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6 February 2014
Businesswoman Sentenced for Role in Securities Fraud SchemeRead the Press Release
BOSTON – The principal of two companies was sentenced yesterday for her role in a fraudulent scheme in which executives agreed to pay secret kickbacks to an investment fund representative.
Kelly Black-White, 52, of Mesa, Ariz., was sentenced by U.S. District Court Judge Denise J. Casper to one year and one day in prison, two years of supervised release, a $7,500 fine and forfeiture of the illegal earnings. In September 2013, Black-White pleaded guilty to conspiracy to commit securities fraud and wire fraud.
Black-White, the principal of Premier Funding, Inc. and Premier Services, Inc., provides investor and public relations services to publicly traded companies. Black-White was sentenced for her role in a fraudulent scheme in which highly-placed executives agreed to pay secret kickbacks to an investment fund representative who had offered to steer his investment fund to buy stock in their companies. Black-White’s role involved referring such executives to the investment fund representative so that those executives could enter into the kickback arrangement. In exchange, Black-White accepted a portion of the kickbacks paid by the executives. Unbeknownst to Black-White, the purported investment fund representative was actually an undercover federal agent.Black-White’s conviction and sentence followed a year-long investigation focusing on preventing fraud in the microcap stock markets. Microcap companies are small publicly-traded companies whose stock often trades at pennies a share. Fraud in the microcap markets is of increasing concern to regulators as such markets have proven to be fertile grounds for fraud and abuse. This is, in part, because accurate information about microcap stocks may be difficult for the average investor to find, since many microcap companies do not file financial reports with the Securities Exchange Commission.
The Securities and Exchange Commission, which conducted a parallel civil investigation alongside the FBI undercover operation, cooperated with criminal authorities in bringing these charges, as well as charges against other defendants who participated in the kickback scheme. To date, 14 other individuals have been charged and convicted for their participation in the scheme.United States Attorney Carmen M. Ortiz and Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. The case was prosecuted by Assistant U.S. Attorneys Vassili Thomadakis, Eric P. Christofferson, and Sarah E. Walters of Ortiz’s Economic Crimes Unit.
This case was brought in coordination with 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.
Brooklyn Man Sentenced to Three Years in Prison for Stealing Copper from SubstationsRead the Press Release
A Brooklyn, Ohio, man was sentenced to three years in prison for his role in a conspiracy to steal copper from two dozen substations in Northeast Ohio owned by First Energy or Cleveland Public Power, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, and Stephen D. Anthony, Special Agent in Charge of the Federal Bureau of Investigation’s Cleveland office.
Michael T. Butts, 33, was also ordered to pay more than $242,626 in restitution to First Energy Corp. by U.S. District Judge Benita Pearson.
Butts and six other men previously pleaded guilty to conspiracy to damage energy facilities. Previously sentenced are:
William Bertini, 26, of Olmsted Falls, to two years in prison.
Christopher M. Butts, 27, of Cleveland, to four years and seven months in prison.
Jason B. Kauffman, 35, of Cleveland, to three years and one month in prison.
Julio Torres, 46, of Cleveland, to two year and three months in prison.
Jon T. Lefort, 26, of Cleveland, to one year and three months in prison
Keven Wenson, 22, of Lakewood, to two years of supervised release.
“These sentences should send a message that the theft of copper and other scrap metal is a serious problem in our region, and the targeting of energy facilities additionally poses a significant threat to our national security infrastructure,” Dettelbach said."This is the last of a group of seven that chose to enrich themselves while risking lives and posing serious threats to our community,” Anthony said. “The FBI and our law enforcement partners will continue to bring to justice those individuals who place our community in harm’s way.”
The thefts took place between January and May 2013 and included substations in Brooklyn, Parma, Brecksville, Fairlawn, Medina, Cleveland, Wadsworth, Lakewood, Cuyahoga Heights, Independence, Vermillion, Lorain, Avon Lake, Westlake and Valley View, according to court documents.
The 24 substations listed in the indictment have copper material around their bases that facilitated the transmission of electricity. Removal of the copper material from a substation causes a substantial risk of electrical blackouts as well as possible injury or death to utility company employees responsible for maintaining, servicing and repairing the substations, according to court documents.
Christopher and Michael Butts instructed Lefort, Bertini, Kauffman, Wenson and Torres how to remove the copper material from the substation in a way that would minimize the risk of physical harm to the person cutting the wire or cable. The defendants used bolt cutters to cut fencing and/or locks protecting the substations, according to court records.
The defendants then unlawfully extracted the copper wire and materials from the substations, manually carrying it in garbage cans, duffel bags, contractor bags and other containers to “staging areas.” From there, the copper material was transported to scrap yards, where it was sold for cash, according to court documents.
Court documents detail 25 copper thefts and five attempted thefts. It also lists 53 instances where at least some of the defendants sold stolen copper to area scrap yards between January and April 2013.
The defendants collectively sold the stolen copper for more than $15,000. They have collectively been ordered to pay $242,626 to First Energy Corp. for the cost of repairs to the substations.
This case is being prosecuted by Assistant U.S. Attorneys Thomas E. Getz and M. Kendra Klump following an investigation by the Federal Bureau of Investigation, Avon Lake Police Department, Brecksville Police Department, Medina County Sheriff’s Office, Middleburgh Heights Police Department, Valley View Police Department and Northeast Ohio Regional Fusion Center, and assistance from the Medina County Prosecutor’s Office.
Bristol Man Indicted for Distributing Synthetic Drugs and Money LaunderingRead the Press Release
GREENEVILLE, Tenn. – A federal grand jury in Greeneville returned an indictment on Jan. 14, 2014 against Daniel Guy Bickley, 55, of Bristol, Va., for conspiracy to distribute and the distribution of controlled substance analogues as well as conspiracy to engage in monetary transactions in criminally derived property and engaging in such transactions.
Bickley appeared in court on Feb. 6, 2014 before U.S. Magistrate Judge Dennis H. Inman and pleaded not guilty. He was released pending trial, which has been set for Apr. 15, 2014, in U.S. District Court, in Greeneville.
According to the indictment on file with the U.S. District Court, Bickley began selling synthetic stimulants (“bath salts”) and synthetic cannabinoids (“spice” or “incense”) in 2010 from his business Exotic Illusions in Bristol, Virginia. When the Commonwealth of Virginia enacted legislation prohibiting certain synthetic drugs in March 2011, Bickley opened a business in Bristol, Tennessee called Cloud 9 Emporium from which he sold synthetic drugs. The indictment alleges Bickley obtained synthetic drugs from distributors in Florida, Arizona, New Mexico, and elsewhere and that Bickley stated he was making $10,000 a day from the sale of synthetic drugs. Bickley opened a second store, also called Cloud 9 Emporium, in Johnson City, Tenn., in October 2011 and opened a third location in December 2011 in Mountain City, Tenn. The indictment also alleges that Bickley and others opened a business in August 2011 in Kingsport, Tenn., called White Cloud Emporium for the purpose of selling synthetic drugs.
The indictment further alleges that Bickley conspired with others to engage in monetary transactions involving the proceeds of the drugs sales and charges fifty-one separate transactions involving $10,000 or more in cash totaling approximately $1.2 million.
If convicted, Bickley faces a term of up to 20 years in prison and fines of up to $1 million on each of the drug charges and up to 10 years in prison and fines of up to $250,000 on each of the money laundering charges.
This indictment is the result of an investigation by the Drug Enforcement Administration, Internal Revenue Service – Criminal Investigation, Sullivan County Sheriff’s Office, Bristol, Tennessee Police Department, Bristol, Virginia Police Department, Johnson City Police Department, and Second Judicial District Drug Task Force. Assistant U.S. Attorney Neil Smith will represent the United States.
Members of the public are reminded that an indictment constitutes only charges and that every person is presumed innocent until their guilt has been proven beyond a reasonable doubt.
Bank Robbers SentencedRead the Press Release
Michael J. Moore, United States Attorney for the Middle District of Georgia announced that Tony Scott Key, aged 45, of Albany, Georgia, was sentenced on Friday, January 22, 2014, to serve nearly 26 years (309 months) in Federal prison for two counts of possession of a firearm during the commission of a crime of violence. Anthony Jerome Facon, aged 48, also of Albany, Georgia, was sentenced on Thursday, February 6, 2014 to 37 years (444 months) imprisonment for armed bank robbery and two counts of possession of a firearm during the commission of a crime of violence. The sentences were handed down by the Honorable W. Louis Sands, United States District Court Judge, in Albany, Georgia. The Court also ordered Mr. Key and Mr. Facon to pay restitution to repay the money stolen and repay costs associated with vehicle repair for vehicles stolen by them or damaged while apprehending them and medical costs of persons affected by their crimes.
Mr. Key entered a plea of guilty to the charges on October 1, 2013. Mr. Facon entered his guilty plea on October 10, 2013. As a part of their plea agreements, Mr. Key and Mr. Facon admitted that on February 28, 2013, they entered the PeoplesSouth Bank located on Tennille Avenue in Donalsonville, Georgia and robbed tellers of approximately $31,113. During the robbery, Mr. Facon was armed with a .22 revolver and Mr. Key with a .38 revolver. Mr. Key and Mr. Facon then fled the bank in a vehicle belonging to one of the bank tellers. The pair was apprehended by the officers from Donalsonville Police Department, Miller County Sheriff’s Office and Seminole County Sheriff’s Office following a vehicle chase and foot chase.Mr. Key and Mr. Facon also admitted to robbing the Trust Bank located at 607 W. 4th Street in Adel Georgia of approximately $9,279 and preparing to rob the Citizen’s Bank in Ray City, Georgia on February 7, 2013.
U.S. Attorney Michael Moore said, “Mr. Key and Mr. Facon are violent criminals who have earned a place in federal prison. When they robbed banks, they terrorized bank employees and endangered the lives of the law enforcement officers who had to chase them. People in Middle Georgia need to know that if they commit violent crimes with a gun, they are headed straight to federal prison”.
Ricky Maxwell, Acting Special Agent In Charge, FBI Atlanta Field Office, stated: “While we are thankful that these dangerous individuals are no longer a threat to the public, we cannot underestimate the impact of what their violence did to the bank tellers, customers and community. They may not have physically harmed anyone, but the psychological harm that these victims have undergone because of these subjects is immeasurable. We will continue to pursue these violent offenders in cooperation and collaboration with our law enforcement partners to protect the citizens of our community”.
The case was investigated by the Federal Bureau of Investigation, Georgia Bureau of Investigation, Donalsonville Police Department, Miller County Sheriff’s Office and Seminole County Sheriff’s Office. The case was prosecuted by Assistant United States Attorney Leah E. McEwen.
Inquiries regarding the case should be directed to Pamela Lightsey, United States Attorney's Office at (478) 621-2603.
Award Winning Documentary on Heroin Abuse Available for Free DownloadRead the Press Release
The United States Attorney’s Office for the District of Vermont announced today that the award-winning documentary, “The Opiate Effect”, has been made available for viewing and free download. This powerful film features the story of Will Gates, a University of Vermont student who tragically overdosed on heroin and the impact that experience has had on his family. It also seeks to educate young people and their parents about the dangers of opiate prescription drug and heroin use by drawing on the experiences of Will’s father, Skip Gates, and a number of heroin addicts in recovery. The film is aimed at preventing people from getting involved with opiate drugs and is geared especially toward high school and college age students and their parents.
The film was produced by the U.S. Attorney’s Office for the District of Vermont. It was filmed and directed by Derek Hallquist of Green River Pictures and has won several awards including two Telly awards. It was nominated for a New England Emmy.
The video is available for viewing or download at the following link:
https://vimeo.com/41741770
Armed Drug Trafficker Exiled to 10 Years in PrisonRead the Press Release
Baltimore, Maryland – U.S. District Judge Catherine C. Blake sentenced Anthony Joseph Harlow, age 30, of Dundalk, Maryland, today to 10 years in prison followed by five years of supervised release for possession with intent to distribute cocaine base and possession of a firearm in furtherance of a drug trafficking crime.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Steven L. Gerido of the Bureau of Alcohol, Tobacco, Firearms and Explosives - Baltimore Field Division; Chief James W. Johnson of the Baltimore County Police Department; and Baltimore County State’s Attorney Scott Shellenberger.
According to his plea agreement, on December 20, 2012, Baltimore County Police officers stopped a car in which Harlow was traveling. The officers executed a warrant to search Harlow and seized a loaded pistol and 55 plastic baggies containing 20.4 grams of crack cocaine.
United States Attorney Rod J. Rosenstein commended the ATF, Baltimore County Police Department and Baltimore County State’s Attorney=s Office for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney Peter J. Martinez, who prosecuted the case.
Apopka Man Convicted of Armed Bank RobberyRead the Press Release
Orlando, FL – United States Attorney A. Lee Bentley, III announces that a federal jury today found Dale Matthews Clar (46, Apopka) guilty of two counts of bank robbery with assault and two counts of using and carrying a firearm during and in relation to a crime of violence. Clar faces a maximum penalty of 25 years in federal prison for the bank robbery convictions, followed by a mandatory minimum consecutive penalty of 32 years’ imprisonment on the firearms offenses. His sentencing hearing is scheduled for April 28, 2013.
Clar was indicted on September 25, 2013.
According to testimony and evidence presented at trial, on January 4, 2013, April 3, 2013, and September 6, 2013, Clar robbed the Chase Bank in Apopka, at gunpoint. He stole a total of approximately $18,000 during the three robberies. During each robbery, Clar rushed into the bank wearing a full ski mask. He pointed his gun at bank employees and customers and demanded cash from the tellers. When Clar fled the bank, he covered his license plate to avoid being caught.
On September 6, 2013, he covered his license plate with a temporary registration tag associated with his vehicle. He also attempted to further avoid suspicion, by placing a Domino’s Pizza delivery sign on the top of his car. Police located Clar and arrested him near his home. A subsequent search of Clar’s vehicle revealed Clar’s disguise, a Glock 9mm handgun, and thousands of dollars in cash that he had just stolen from the bank.
This case was investigated by the Federal Bureau of Investigation and the Apopka Police Department. It is being prosecuted by Assistant United States Attorney Joseph M. Schuster.
Accountant from Jal, N.M., Sentenced to Sixty-One Months in Federal Prison for Fraud and Identity Theft ConvictionRead the Press Release
ALBUQUERQUE – Roger L. Baeza, 32, of Jal, N.M., was sentenced earlier today to sixty-one months in federal prison followed by three years of supervised release for his conviction on securities fraud, access device fraud and aggravated identity theft charges. Baeza also was ordered to pay $501,927.10 in restitution to the victims of his crimes.
Baeza’s sentence was announced by Acting U.S. Attorney Steven C. Yarbrough, Carol K.O. Lee, Special Agent in Charge of the Albuquerque Division of the FBI, and New Mexico State Police Chief Pete N. Kassetas.
In Oct. 2012, Baeza was charged in an 81-count indictment which alleged 78 counts of securities fraud, one count of access device fraud and two counts of aggravated identity theft. According to the indictment, Baeza defrauded two Jal-based businesses, Lea Energy Services, LLC, and Fulfer Oil & Cattle Company, LCC, of more than $500,000 between June 2010 and Feb. 2012, while he was employed as the in-house accountant by the owners of the two businesses.
In June 2013, Baeza pled guilty to all but one count of the indictment, an aggravated identity theft charge. In his plea agreement, Baeza admitted from June 2010 to Feb. 2012, he embezzled approximately $311,960.08 from his employers’ companies by issuing checks on company accounts for cash or for goods and services for his personal use. Baeza also admitted that he covered up his fraudulent conduct by modifying the companies’ accounting records to indicate that the checks had been issued for legitimate purposes.
Baeza also admitted that from June 2010 to Feb. 2012, he used a company credit card issued in the names of his employers to receive payments and items of value in the aggregate amount of $189,267.02. Finally, Baeza admitted using his employer’s name and identity in Feb. 2011, to issue and sign a check on a company account in the amount of $5000.00 and using the money for his personal use.
This case was investigated by the Roswell office of the FBI and the New Mexico State Police, and was prosecuted by Assistant U.S. Attorney Norman Cairns.
14 Years Jail for Local Repeat Drug DealerRead the Press Release
The Office of the United States Attorney for the District of Vermont stated that Stephen R. Bedell, age 51, of Burlington, Vermont, was sentenced to 14 years in jail yesterday by Judge William K. Sessions III of the United States District Court in Burlington.
Bedell was arrested by the Burlington Police Department in October, 2012. He had two prior Vermont felony convictions for drug dealing, in 2002 and 2004. Bedell was arrested while selling crack cocaine to a customer, after multiple prior undercover crack and heroin deals during the preceding months. Burlington Police officers recovered $154,000 that Bedell had hidden in area storage units, and $2,720 that he had when arrested. They also recovered commercial quantities of heroin and many other types of drugs, multiple cell phones, and several cars, including a red 2004 Mazda RX8, and a red Pontiac Grand Prix. Christa Maynard was also arrested and charged as Bedell's conspirator. She previously was sentenced to 36 months.
At yesterdays hearing, Judge Sessions heard evidence that Bedell=s drug customers included 10 area female addicts whom he coerced into performing sexual acts to compensate for drug debts. Photos and videos of the females were found in Bedell's seized iPhones. He also had addict customers steal items and swap them to him for drugs, and had them transfer to him personal belongings such as cameras, jewelry and electronics in exchange for drugs and as collateral for drug debts.
Judge Sessions observed that Bedell's conduct was Aappalling, and his continued drug dealing after prior convictions aggravating. The Court imposed a term of imprisonment of 168 months, followed by a term of supervised release.
The U.S. Attorney expressed gratitude for a superb investigation by the Burlington Police Department. Bedell was represented by David McColgin of the Federal Public Defender. The United States was represented by Assistant U.S. Attorney William Darrow.
5 February 2014
West Virginia Man Sentenced to Six Years in Prison for Distribution and Possession of Child PornographyRead the Press Release
WASHINGTON - Troy Shane Young, 41, of Elkview, W. Va., was sentenced today to six years in prison for distribution 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).
Young pled guilty to the charges in December 2012 in the U.S. District Court for the District of Columbia. He was sentenced by the Honorable Rudolph Contreras. Upon completion of his prison term, Young will be placed on 15 years of supervised release.
According to the government's evidence, on Aug. 24, 2012, Young contacted a man he believed to be the father of an underage girl on a social network site. That man turned out to be an undercover officer with the FBI's Child Exploitation Task Force. Over the next few days, Young engaged in electronic communications with the undercover officer. During this period of time, Young sent the undercover officer approximately 10 videos and 22 still images of child pornography. Upon execution of a search warrant on Young’s residence, members of the FBI’s Child Exploitation Task Force recovered various computers, external storage devices and other electronic equipment containing 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 sentence, U.S. Attorney Machen, Assistant Director in Charge Parlave and Chief Lanier praised the MPD Detectives and the Special Agents of the FBI Child Exploitation Task Force, who investigated the case, and the Special Agents of the FBI’s Pittsburgh Field Office, who assisted in the execution of the search warrant. They also commended the work of Assistant U.S. Attorneys Lisa Johnston and Jennifer Rada, of the Southern District of West Virginia, who assisted in the prosecution. Finally they expressed appreciation to Assistant U.S. Attorney Ari Redbord, who prosecuted the case.
14-032West Virginia Man Sentenced to Six Years in PrisonRead the Press Release
For Distribution and Possession of Child PornographyWASHINGTON - Troy Shane Young, 41, of Elkview, W. Va., was sentenced today to six years in prison for distribution 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).
Young pled guilty to the charges in December 2012 in the U.S. District Court for the District of Columbia. He was sentenced by the Honorable Rudolph Contreras. Upon completion of his prison term, Young will be placed on 15 years of supervised release.
According to the government's evidence, on Aug. 24, 2012, Young contacted a man he believed to be the father of an underage girl on a social network site. That man turned out to be an undercover officer with the FBI's Child Exploitation Task Force. Over the next few days, Young engaged in electronic communications with the undercover officer. During this period of time, Young sent the undercover officer approximately 10 videos and 22 still images of child pornography. Upon execution of a search warrant on Young’s residence, members of the FBI’s Child Exploitation Task Force recovered various computers, external storage devices and other electronic equipment containing 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 sentence, U.S. Attorney Machen, Assistant Director in Charge Parlave and Chief Lanier praised the MPD Detectives and the Special Agents of the FBI Child Exploitation Task Force, who investigated the case, and the Special Agents of the FBI’s Pittsburgh Field Office, who assisted in the execution of the search warrant. They also commended the work of Assistant U.S. Attorneys Lisa Johnston and Jennifer Rada, of the Southern District of West Virginia, who assisted in the prosecution. Finally they expressed appreciation to Assistant U.S. Attorney Ari Redbord, who prosecuted the case.
14-32
W.R. Grace Pays over $63 Million Toward Cleanup and Restoration of Hazardous Waste Sites in Communities Across the CountryRead the Press Release
W.R. Grace & Co, based in Columbia, Md., paid over $63 million to the U.S. government under its bankruptcy plan of reorganization to resolve claims for environmental cleanups at approximately 39 sites in 21states, the U.S. Department of Justice and U.S. Environmental Protection Agency (EPA) announced today.
“Communities across the United States will benefit from this payment of present and future cleanup costs,” said Robert G. Dreher, Acting Assistant Attorney General for the Environment and Natural Resources Division. “The Justice Department is committed to holding polluters responsible for their environmental legacy, and won’t just walk away leaving taxpayers to pick up the tab.”
“Cleaning up toxic pollution in communities is the responsibility of the company that created it, not the American taxpayer,” said Cynthia Giles, Assistant Administrator for EPA’s Office of Enforcement and Compliance Assurance. “This money will be used to clean up contaminated sites and to make a tangible difference for local communities across the country.”
W.R. Grace’s payment includes approximately $54 million for the EPA. The company agreed to pay another $9 million to other federal agencies, including the U.S. Department of Interior and the U.S. Army.
W.R. Grace, a global supplier of specialty chemicals, and 61 affiliated companies filed for bankruptcy in April 2001. In 2003, EPA filed claims against the company to recover past and future cleanup costs at sites contaminated by asbestos and other hazardous substances.
Numerous agreements to resolve the agency’s environmental liability claims against the company and its affiliates were negotiated as part of the company’s bankruptcy proceedings between April 2008 and February 2013. The company continues to be responsible for all of the sites it owns or operates and for any additional sites that were not known or resolved under the earlier settlements.
W.R. Grace’s liability for asbestos contamination in the town of Libby, Mont., was addressed in a separate June 2008 settlement that resulted in a payment of $250 million to EPA. W.R. Grace continues to be responsible for addressing cleanup at the Libby Mine.
The approximately $54 million payment to EPA will reimburse the agency for cleanup costs or provide funds for future cleanup at the following Superfund sites:Acton Plant - Acton, Mass.
Amber Oil - Milwaukee, Wis.
Aqua Tech - Greer, S.C.
Big Tex Site - San Antonio, Texas
Blackburn and Union Privileges - Walpole, Mass.
Cambridge,Plant, Cambridge, Mass.
Casmalia Resources - Santa Barbara, Calif.
Central Chemical - Hagerstown, Md.
Galaxy/Spectron - Elkton, Md.
Green River - Maceo, Ky.
Harrington Tools - Glendale, Calif.
Intermountain Insulation - Salt Lake City, Utah
IWI Site - Summit, Ill.
Li Tungsten - Glen Cove, N.Y.
Malone Services Co. - Texas County, Texas
Massachusetts Military Reservation (MMR) – Barnstable County, Mass.
N-Forcer Site - Dearborn, Mich.
Operating Industries, Inc. - Monterey Park, Calif.
R & H Oil/Tropicana - San Antonio, Texas
RAMP Industries - Denver, Colo.
Reclamation Oil - Detroit, Mich.
Robinson Insulation - Minot, N.D.
Solvents Recovery Service of NE - Southington, Conn.
Vermiculite Exfoliation Site – Nashville, Tenn.
Vermiculite Expansion Site – High Point, N.C.
Vermiculite Intermountain - Salt Lake City, Utah
Vermiculite Northwest - Spokane, Wash.
Watson Johnson LF - Richland Township, Pa.
Wells G & H (Source & Central Areas) - Woburn, Mass.
Western Minerals Processing - Denver, Colo.
Western Minerals Products - Minneapolis, Minn.
W.R. Grace – Weedsport, N.Y.
Zonolite - Wilder, Ky.
Zonolite/W.R. Grace – Easthampton, Mass.
Zonolite - Prince George’s Co., Md.
Zonolite - Hamilton Township, N.J.
Zonolite - Ellwood City, Pa.
Zonolite - New Castle, Pa.
Zonolite Road – Atlanta, Ga.
More information on W.R. Grace’s payments to EPA under their plan of reorganization : http://www2.epa.gov/enforcement/case-summary-epa-receives-over-54-million-wr-grace-bankruptcy .
More information on Cleanup Enforcement : http://www2.epa.gov/enforcement/waste-chemical-and-cleanup-enforcement#cleanup .W.R. Grace Pays over $63 Million Toward Cleanup and Restoration of Hazardous Waste Sites in Communities Across the CountryRead the Press Release
– Settlement includes two Kentucky Superfund sites
WASHINGTON – W.R. Grace & Co, based in Columbia, Md., paid over $63 million to the U.S. government under its bankruptcy plan of reorganization to resolve claims for environmental cleanups at approximately 39 sites in 21 states, the U.S. Department of Justice and U.S. Environmental Protection Agency (EPA) announced today.
“Communities across the United States will benefit from this payment of present and future cleanup costs,” said Robert G. Dreher, Acting Assistant Attorney General for the Environment and Natural Resources Division. “The Justice Department is committed to holding polluters responsible for their environmental legacy, and won’t just walk away leaving taxpayers to pick up the tab.”
“Cleaning up toxic pollution in communities is the responsibility of the company that created it, not the American taxpayer,” said Cynthia Giles, Assistant Administrator for EPA’s Office of Enforcement and Compliance Assurance. “This money will be used to clean up contaminated sites and to make a tangible difference for local communities across the country.”
W.R. Grace’s payment includes approximately $54 million for the EPA. The company agreed to pay another $9 million to other federal agencies, including the U.S. Department of Interior and the U.S. Army.
W.R. Grace, a global supplier of specialty chemicals, and 61 affiliated companies filed for bankruptcy in April 2001. In 2003, EPA filed claims against the company to recover past and future cleanup costs at sites contaminated by asbestos and other hazardous substances.
Numerous agreements to resolve the agency’s environmental liability claims against the company and its affiliates were negotiated as part of the company’s bankruptcy proceedings between April 2008 and February 2013. The company continues to be responsible for all of the sites it owns or operates and for any additional sites that were not known or resolved under the earlier settlements.
W.R. Grace’s liability for asbestos contamination in the town of Libby, Mont., was addressed in a separate June 2008 settlement that resulted in a payment of $250 million to EPA. W.R. Grace continues to be responsible for addressing cleanup at the Libby Mine.
The approximately $54 million payment to EPA will reimburse the agency for cleanup costs or provide funds for future cleanup at the following Superfund sites: Acton Plant - Acton, Mass.
Amber Oil - Milwaukee, Wis.
Aqua Tech - Greer, S.C.
Big Tex Site - San Antonio, Texas
Blackburn and Union Privileges - Walpole, Mass.
Cambridge, Plant, Cambridge, Mass.
Casmalia Resources - Santa Barbara, Calif.
Central Chemical - Hagerstown, Md.
Galaxy/Spectron - Elkton, Md.
Green River - Maceo, Ky.
Harrington Tools - Glendale, Calif.
Intermountain Insulation - Salt Lake City, Utah
IWI Site - Summit, Ill.
Li Tungsten - Glen Cove, N.Y.
Malone Services Co. - Texas County, Texas
Massachusetts Military Reservation (MMR) – Barnstable County, Mass.
N-Forcer Site - Dearborn, Mich.
Operating Industries, Inc. - Monterey Park, Calif.
R & H Oil/Tropicana - San Antonio, Texas
RAMP Industries - Denver, Colo.
Reclamation Oil - Detroit, Mich.
Robinson Insulation - Minot, N.D.
Solvents Recovery Service of NE - Southington, Conn.
Vermiculite Exfoliation Site – Nashville, Tenn.
Vermiculite Expansion Site – High Point, N.C.
Vermiculite Intermountain - Salt Lake City, Utah
Vermiculite Northwest - Spokane, Wash.
Watson Johnson LF - Richland Township, Pa.
Wells G & H (Source & Central Areas) - Woburn, Mass.
Western Minerals Processing - Denver, Colo.
Western Minerals Products - Minneapolis, Minn.
W.R. Grace – Weedsport, N.Y.
Zonolite - Wilder, Ky.
Zonolite/W.R. Grace – Easthampton, Mass.
Zonolite - Prince George’s Co., Md.
Zonolite - Hamilton Township, N.J.
Zonolite - Ellwood City, Pa.
Zonolite - New Castle, Pa.
Zonolite Road – Atlanta, Ga.More information on W.R. Grace’s payments to EPA under their plan of reorganization: http://www2.epa.gov/enforcement/case-summary-epa-receives-over-54-million-wr-grace-bankruptcy.
More information on Cleanup Enforcement: http://www2.epa.gov/enforcement/waste-chemical-and-cleanup-enforcement#cleanup.
Two Men Convicted of Federal Charges in Killing of Coast Guard Officer During Operation Targeting Drug Smuggling BoatRead the Press Release
LOS ANGELES -- Two Mexican nationals were found guilty today of federal charges related to the death of a Coast Guard officer who was fatally injured in late 2012 when he was thrown from a Coast Guard vessel that was rammed by a “panga” boat operated by defendants.
Following a seven-day trial, a federal jury convicted one of the defendants of second-degree murder in the death of Chief Petty Officer Terrell Horne III, who died while his boat was attempting to interdict the panga boat near Santa Cruz Island in the Channel Islands National Park.
The two men found guilty today are:
Jose Meija-Leyva, 42, of Ensenada, who was found guilty of murder, as well as two counts of failure to heave to and four counts of assaulting federal officers with a deadly and dangerous weapon; and
Manuel Beltran-Higuera, 44, of Ensenada, who also was convicted in the two counts of failure to heave to (as an accessory after the fact in one count and as an aider and abettor in the second count) and in the four counts of assault (as an accessory after the fact).
Both defendants are scheduled to be sentenced by United States District Judge Gary A. Feess on May 12.
When he is sentenced, Meija-Leyva will face a statutory maximum sentence of life in federal prison. At sentencing, Beltran-Higuera will face a statutory maximum sentence of 60 years.
Chief Petty Officer Horne, a 34-year-old Redondo Beach resident, was the first Coast Guard officer murdered while on duty since 1927.
“We are pleased with the verdict and that those responsible for Senior Chief Horne’s death will be held accountable,” said Admiral Robert J. Papp, Jr., Commandant of the Coast Guard. “While the conviction of Senior Chief Horne’s killers cannot make up for the loss of a family member, friend and shipmate, we do hope that the conclusion of this case provides some level of comfort and closure to his loved ones. The Coast Guard will continue to honor the legacy Senior Chief Horne and his selfless service to our nation.”
Chief Petty Officer Horne was killed during a law enforcement operation that began late on December 1, 2012 when a Coast Guard airplane identified a suspicious boat about one mile off Santa Cruz Island. After Coast Guard personnel on the Coast Guard cutter Halibut boarded the boat, the airplane identified another suspicious vessel nearby in Smuggler’s Cove on Santa Cruz Island, The airplane reported that the suspicious vessel in Smuggler’s Cove was an approximately 30-foot-long open bowed fishing vessel, commonly referred to as a panga boat.
Coast Guard officers aboard the Halibut launched the Halibut’s small, inflatable boat with four officers aboard. The Coast Guard small boat crew located the panga boat approximately 200 yards from the eastern shore of Santa Cruz Island at approximately 1:20 a.m. on December 2. As the Coast Guard’s small boat approached the panga boat, the officers activated the boat’s police lights and identified themselves as law enforcement. The crew members of the panga boat then throttled the engines and steered the panga boat toward the small boat. As the panga boat rapidly approached the Coast Guard’s small boat, the officer at the helm attempted to avoid a collision by steering the small boat out of the path of the panga boat.
Despite these efforts, the panga boat rammed into the Coast Guard’s small boat, ejecting Chief Petty Officer Horne and another officer into the water. Chief Petty Officer Horne was struck by a propeller in the head and sustained a fatal injury. The other officer sustained a laceration to his knee.After striking the Coast Guard’s small boat, the panga boat crew fled the scene.
Coast Guard aircraft followed the panga boat until it was intercepted by a Coast Guard vessel about four hours later approximately 20 miles north of the Mexico-United States border. Meija and Beltran were arrested at this point.
The investigation in this case was being conducted by the Coast Guard Investigative Service (CGIS) with the assistance of the Los Angeles Border Enforcement Security Task Force (LA BEST) in San Pedro.
Release No. 14-014
Two Indicted in Investigation Involving Smuggling Heroin into Attica Correctional Facility; Two Others Facing Heroin ChargesRead the Press Release
BUFFALO, N.Y.—U.S. Attorney William J. Hochul, Jr. announced today that a federal grand jury returned an indictment charging Elizabeth Camue Martinez, 33, of Buffalo, N.Y., and her husband, Andres Martinez, 28, an inmate at the Attica Correctional Facility, with possession with intent to distribute, and to distribute, heroin and marijuana. Jerome J. Tallington, 25, of Buffalo, N.Y., has also been indicted and charged with possession with intent to distribute and distribution of heroin. Davon Banks, 35, of Buffalo, N.Y., is charged in a complaint with possession with intent to distribute a mixture and substance containing Fentanyl and prohibited person in possession of a firearm. All charges carry a maximum penalty of 20 years in prison and a $1,000,000 fine.
“This past June, we warned of the potentially lethal consequences of heroin and fentanyl,” said U.S. Attorney Hochul. “As demonstrated by the recent fatalities in Western New York and elsewhere, that message went unheeded. Let today’s developments be fully understood. Whether rich or poor, suburban resident or prison inmate, no one is immune from the effects of this addiction. As for the traffickers, because delivery of these substances is akin to handing a person a loaded gun, they will be prosecuted to the fullest extent of the law.”
According to state documents filed in Wyoming County, on December 5, 2013, Elizabeth Camue Martinez smuggled heroin into the Attica Correctional Facility to give to her husband, Andres Martinez, an inmate at the facility. On December 8, 2013, defendant Jerome Tallington sold approximately three grams of heroin to a New York State Police investigator.According to the complaint charging Davon Banks, on January 14, 2014, law enforcement officers executed a search warrant at the defendant’s residence at 359 Sherman Street in Buffalo. Officers seized approximately 163 plastic bags containing a powdery substance, a 12 gauge shotgun, and a digital scale. Subsequent analysis on the powdery substance determined that it contained Fentanyl. The complaint further states that Banks was subject to a protective order preventing him from possessing a firearm.
Drug Enforcement Administration Acting Special Agent in Charge James J. Hunt stated, “Heroin overdose rates have increased 45% nationwide. The spread of heroin abuse has even reached a place we put drug dealers for their crimes – jail. Numerous heroin overdose deaths have been attributed to heroin laced with fentanyl throughout the northeast and in this case, the victim was given pure fentanyl which led to lethal consequences. Every time you use an illicit drug it’s a life or death risk. The DEA, the Western District of New York, and the Wyoming County District Attorney’s Office have investigated these deaths which resulted in the arrests of Andres Martinez, Elizabeth Camue-Martinez and Jerome Tallington for their role in this conspiracy.”
Troop A Commander, Major Michael J. Cerretto said, "Heroin addiction destroys lives. The number of overdose deaths that law enforcement agencies investigate is just staggering. I am very pleased that the New York State Police Community Narcotics Enforcement Team was able to be a part of this very important investigation."
NYS Department of Corrections and Community Supervision Acting Commissioner Anthony J. Annucci said, "Illegal drugs are a danger to our communities and our prisons. I applaud the teamwork that brought about these arrests, and I am proud that DOCCS staff played a role in taking these people and their drugs off the streets."
The indictment and complaint are the result of an investigation by the Drug Enforcement Administration, under the direction of Acting Special Agent in Charge James J. Hunt, New York Field Office, the New York State Police, under the direction of Major Michael Cerretto, the New York State Police Community Narcotics Enforcement Team (CNET), under the direction of Major Wayne C. Olson, the Erie County Sheriff’s Department, under the direction of Sheriff Timothy Howard, the Wyoming Country District Attorney’s Office, under the direction of Donald O’Geen, the Erie County District Attorney’s Office, under the direction of Frank Sedita, and the New York State Department of Corrections and Community Supervision, under the direction of Acting Commissioner Anthony Annucci.
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.
Tax Preparer Indicted in SYAM Tax Service SchemeRead the Press Release
Department of Justice
Office of Public AffairsBEAUMONT, Texas – A Dallas tax preparer has been indicted for federal violations in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
Shannon Tecoko Mays, 36, of Dallas, was indicted today by a federal grand jury charging him with conspiracy to commit wire fraud.
According to prosecutors, an investigation began in August 2012 in response to numerous complaints to state and federal authorities from citizens in Port Arthur, Anahuac, Nacogdoches and Lufkin, Texas regarding income tax returns that were being fraudulently prepared on their behalf. During the investigation, it was discovered that Mays was operating numerous offices across the United States under the name “Syam Tax Services, L.L.C.” and “Baby Momma Tax.” Although the principal office was located in Dallas, Mays also operated or sought to operate satellite offices in numerous other locations, including Fort Worth, Houston, New Orleans, Memphis, Atlanta, Chicago and Los Angeles.
The indictment alleges that Mays targeted individuals who were generally exempt from having to file income tax returns because they would be less likely to discover a fraudulent tax return had been filed on their behalf. To further facilitate the scheme, Mays employed “recruiters,” paying them from $50-100 for every client they successfully brought into Syam Tax. In order to avoid detection, Mays altered the taxpayer’s address and phone numbers on the returns so that any phone calls or correspondence from the IRS would not reach the taxpayer. The scheme also used electronic deposits to ensure paper checks would not be mailed to the taxpayer.
For the tax year 2011, Mays filed 4,226 tax returns claiming approximately $3,150,406. If convicted, Mays faces up to 20 years in federal prison.This case is being investigated by Internal Revenue Service – Criminal Investigation, Federal Bureau of Investigation, the Port Arthur Police Department, the Texas Attorney General’s Office – Consumer Protection Division, and the Treasury Inspector General for Tax Administration. This case is being prosecuted by Assistant U.S. Attorney Baylor Wortham.
It is important to note that a grand jury indictment is not evidence of guilt.
Sulphur Men Sentenced for Making and Distributing Counterfeit MoneyRead the Press Release
LAKE CHARLES, La. –United States Attorney Stephanie A. Finley announced today that Shaun Daigle, 35, and Patrick Murray, 45, both of Sulphur, La., were sentenced by U.S. District Judge Donald E. Walter for conspiring to counterfeit U.S. currency. Daigle received 41 months in prison and Murray received 24 months in prison. They were also sentenced to serve two years of supervised release. They pleaded guilty November 14, 2013.
According to evidence presented at the guilty plea, from May 1, 2013 to May 25, 2013, Daigle and Murray conspired to manufacture and distribute counterfeit U.S. currency in the Sulphur, Lake Charles, and Westlake, La. areas.
The U.S. Secret Service and Sulphur Police Department conducted the investigation. Assistant U.S. Attorney Daniel J. McCoy prosecuted the case.Staten Island Man Convicted of Scheme to Defraud Investors of $5 MillionRead the Press Release
Peter Liounis, a resident of Staten Island, was convicted today by a federal jury in Brooklyn on all nine counts of the indictment for defrauding investors of millions of dollars through Grayson Hewitt, a purported lawsuit funding investment firm. Liounis lied to potential investors and promised them a fixed rate of return on their investments. Rather than make investments as promised, Liounis and his coconspirators stole the investors’ money to purchase gold for their own use. Through the scheme, Liounis defrauded investors of approximately five million dollars. The jury’s verdict followed a two-week trial in United States District Court before the Hon. I. Leo Glasser. Liounis was convicted of six counts of wire fraud, one count of mail fraud, one count of wire and mail fraud conspiracy, and one count of securities fraud.
The verdict was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; Philip R. Bartlett, Postal Inspector in Charge, U.S. Postal Inspection Service, New York Division; James T. Hayes, Jr., Special Agent-in-Charge, U.S. Department of Homeland Security, Homeland Security Investigations (HSI), New York; and Steven G. Hughes, Special Agent-in-Charge, United States Secret Service.
"As the evidence at trial showed, Liounis lied to his victims over and over again, and went on to steal the savings of hard-working individuals. His victims’ needs meant nothing to him, as they were just the means he used to the end of filling his own pockets," stated United States Attorney Lynch. "We will tirelessly pursue individuals who seek to profit through this type of fraud." Ms. Lynch extended her appreciation to the Postal Inspection Service, New York Division; Department of Homeland Security, Homeland Security Investigations; and the United States Secret Service for their assistance in the investigation.
The evidence at trial established that from May 2010 through April 2012, Liounis used the alias "Mark Anderson," to solicit potential investors for Grayson Hewitt. Liounis told potential investors that Grayson Hewitt purchased plaintiffs’ rights to future recoveries in personal injury and other lawsuits, and promised them a return of fifteen percent or more. To perpetrate the scheme, Liounis and his coconspirators sent the victims bogus account statements. In a series of calls captured by a court-ordered wiretap, the son of an investor sought the return of his father's money so that the son could place his father, who had suffered a heart attack, into assisted living. Although the father had some $23,000 left in his Grayson Hewitt account, Liounis falsely told the son that his father had been depleting the account and had only $3,000 remaining. Liounis then sent the father and son a "get well fruit basket." In another call, a Grayson Hewitt investor expressed skepticism about the company, noting "I see this as a Bernie Madoff deal." Liounis responded, "this is no way, no how, a Bernie Madoff...believe that!...You gotta understand, the amount of money we handle here, uh, we'd go away for a hell of a lot longer than Bernie did."
Liounis faces a maximum sentence of 20 years on each of the nine counts of conviction.
The government’s case was prosecuted by Assistant United States Attorneys Michael Yaeger and Justin Lerer, with assistance from Assistant United States Attorney Daniel Spector.
This case was brought in coordination with President Barack Obama's Financial Fraud Enforcement Task Force. President Obama established the interagency Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The Task Force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The Task Force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
The Defendant:
PETER LIOUNIS
Age: 42
Staten Island, New York
St. Louis Man Sentenced in Federal Court for Cyber-Attack on Koch Industries SudsidiaryRead the Press Release
James L. Santelle, United States Attorney for the Eastern District of Wisconsin, announced that on February 5, 2014, Christopher Michael Sudlik (age: 22) of St. Louis, Missouri, was sentenced by Chief United States District Judge William C. Griesbach.to 36 months’ probation, 60 hours of community service, and ordered to pay $110,932.71 in restitution.
Sudlik had previously pled guilty for his participation along with members of the on-line hacker group “Anonymous” in a distributed denial of service attack against the Angel Soft bathroom tissue website in February and March of 2011. Angel Soft is a subsidiary of Koch Industries, the intended target of the attack.
Sudlik and others utilized a “low orbit ion cannon” designed to flood the Angel Soft server with traffic with the intention of disrupting the website’s service. The Angel Soft server is located in Green Bay, Wisconsin. Koch Industries suffered several hundred-thousand dollars in loss as a result of the continuous attacks on several of its network servers over a three day span.
In sentencing the defendant, Judge Griesbach noted the “serious nature of the offense” and decried Sudlik’s “arrogance” for believing that his political beliefs were necessarily superior to those with whom he disagreed. The judge admonished the defendant for “crossing the line” from appropriate political speech to an illegal and costly cyber-attack.
The case was investigated by Special Agents from the Federal Bureau of Investigation in St. Louis. It was prosecuted by Assistant United States Attorney Daniel R. Humble of the Eastern District of Wisconsin.South Florida Resident Convicted in Connection with International Fraudulent Lottery SchemeRead the Press Release
A federal jury in Miami today convicted a South Florida resident for her role in an international fraudulent lottery scheme that targeted U.S. citizens, the Justice Department announced. Charmaine Anne King, 51, of Lauderdale Lakes, Fla. was convicted of one count of conspiracy, three counts of mail fraud and two counts of wire fraud. The case is part of the government’s crackdown on international fraudulent lottery schemes.A federal grand jury returned an indictment against King and a co-conspirator on Oct. 31, 2013, charging that King’s co-conspirators contacted individuals in the U.S. and falsely informed them that they had won more than a million dollars in a lottery. The evidence at trial showed that a co-conspirator sent letters to the victims from a purported sweepstakes company in the U.S. and included false and fraudulent cashier’s checks made out to the victims for thousands of dollars. These letters instructed victims to call “claims agents” who were actually co-conspirators, and when the victims called the purported claims agents, the agents informed the victims that they had to pay several thousand dollars in fees in order to collect their purported lottery winnings. The claims agents told the victims to deposit the cashier’s checks in the victims’ bank accounts in order to purportedly cover the money they had to pay. The co-conspirators instructed the victims on how to send and wire this money to King and others.
Evidence presented at trial showed that King kept a percentage of the money she received from victims and sent the rest of the money to a co-conspirator. King continued to participate in this scheme even after the U.S. Postal Inspection Service verbally informed her that she was participating in unlawful activity, and after she later signed a Cease and Desist Order requiring that she stop receiving money from victims of fraud. The Cease and Desist Order that King signed referenced a complaint detailing the activity that the U.S. Postal Inspection Service explained was unlawful.
As the evidence presented at trial showed, the cashier’s checks victims received from the fraudulent lottery had no value. The evidence demonstrated that after the victims sent money to King, the fraudulent cashier’s checks bounced. Victims never received any lottery winnings.
King faces a maximum sentence of 25 years in prison on each count of conviction, a fine and mandatory restitution. King’s sentencing has been scheduled for April 17, 2014.
Also, on Feb. 4, 2014, U.S. District Court Judge K. Michael Moore adopted a report and recommendation accepting the guilty plea of King’s co-defendant, Althea Peart. Peart had entered a change of plea to guilty on Jan. 9, 2014, to one count of conspiracy to commit mail and wire fraud. She is scheduled to be sentenced on March 20, 2014.
Stuart F. Delery, Assistant Attorney General for the Justice Department’s Civil Division, commended the investigative efforts of the U.S. Postal Inspection Service, Homeland Security Investigations and the U.S. Marshals Service. The case is being prosecuted by Assistant Director Jeffrey Steger and Trial Attorney Kathryn Drenning with the Department of Justice’s Civil Division, Consumer Protection Branch.
Consumers should report telemarketing fraud, including lottery fraud originating from Jamaica, to the Federal Trade Commission at 1-877-FTC-HELP (1-877-382-4357) or online at https://www.ftccomplaintassistant.gov .
Saint Albans Man Sentenced to Federal Prison for Distributing Heroin StampsRead the Press Release
CHARLESTON, W.Va. – A Saint Albans heroin dealer was sentenced to twenty one months in federal prison, U.S. Attorney Booth Goodwin announced. Leonard Lewis Hare, 39, of Saint Albans, WV, previously pleaded guilty in November of 2013 to distribution of heroin. On August 13, 2012, Hare sold eight (8) heroin “stamps” of approximately .06 grams each, to an informant while at his residence at the Carriage Hill Apartments in Saint Albans.
The Metropolitan Drug Enforcement Network Team conducted the investigation. Assistant United States Attorney, Joshua Hanks handled the prosecution. The sentence was imposed by United States District Judge John T. Copenhaver, Jr.
Repeat Offender Sentenced for New Child Pornography ViolationRead the Press Release
CORPUS CHRISTI, Texas – Arthur Gregg Hutchins, 67, under supervised release for a previous conviction of possessing child pornography, has been ordered to prison again, announced United States Attorney Kenneth Magidson.
Hutchins was previously convicted in 2005 and released from prison in 2012. He was under supervised release when he pleaded guilty to one count of possession of child pornography on June 24, 2013.
Following a lengthy hearing yesterday, Senior U.S. District Judge Hayden Head considered Hutchins’ demonstrated recidivism and the need to protect the public and ordered him to federal prison for 188 months. The sentence will be served concurrently to a five-year-term of imprisonment ordered for the revocation of his supervised release in the 2005 case. He will also serve a new lifetime term of supervised release following his release during which he will have to comply with numerous conditions designed to restrict his access to children and the internet.
In handing down the sentence, the court noted that Hutchins presents a real and ongoing danger to the children of our community. The court considered the evidence seized in the case - the child pornography as well as written communications between Hutchins and other pedophiles. In those emails, Hutchins claimed to have himself been sexually assaulted, to have personally sexually assaulted children in the past and expressed a desire to sexually assault children in the future. Hutchins claimed that such writings were nothing more than fantasy. However, the Judge rebuffed that denial and stated that society was entitled to take him at his word that he is a person who has and is capable of sexually assaulting children. The court further noted that his almost immediate return to child pornography following his release from prison in June 2012 was a strong indication that he is likely to reoffend.
Hutchins came to the attention of law enforcement from a CyberTip received by the National Center for Missing and Exploited Children (NCMEC) regarding a person who had posted child pornography images online beginning in September 2012. The images were posted to a popular online photo sharing website by a person using an IP address linked to the Corpus Christi area.
The IP address was later traced to the wife of Hutchins. Under supervised release and forbidden to reside near a school, Hutchins did not reside with his wife. The investigation was able to exclude the wife due to her work schedule and conflicting times associated with the online postings of child pornography. An investigation into his online activities and financial transactions, led to his identification of the one responsible for the postings.
At the time of his plea, he admitted to possessing images of child pornography he acquired from the internet.
The investigation was conducted by the FBI and the Corpus Christi Police Department’s Internet Crimes Against Children Task Force (ICAC).
Assistant United States Attorney Lance Duke is prosecuting the case, which 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."
Repeat Offender Sentenced for New Child Pornography ViolationRead the Press Release
CORPUS CHRISTI, Texas – Arthur Gregg Hutchins, 67, under supervised release for a previous conviction of possessing child pornography, has been ordered to prison again, announced United States Attorney Kenneth Magidson.
Hutchins was previously convicted in 2005 and released from prison in 2012. He was under supervised release when he pleaded guilty to one count of possession of child pornography on June 24, 2013.
Following a lengthy hearing yesterday, Senior U.S. District Judge Hayden Head considered Hutchins’ demonstrated recidivism and the need to protect the public and ordered him to federal prison for 188 months. The sentence will be served concurrently to a five-year-term of imprisonment ordered for the revocation of his supervised release in the 2005 case. He will also serve a new lifetime term of supervised release following his release during which he will have to comply with numerous conditions designed to restrict his access to children and the internet.
In handing down the sentence, the court noted that Hutchins presents a real and ongoing danger to the children of our community. The court considered the evidence seized in the case - the child pornography as well as written communications between Hutchins and other pedophiles. In those emails, Hutchins claimed to have himself been sexually assaulted, to have personally sexually assaulted children in the past and expressed a desire to sexually assault children in the future. Hutchins claimed that such writings were nothing more than fantasy. However, the Judge rebuffed that denial and stated that society was entitled to take him at his word that he is a person who has and is capable of sexually assaulting children. The court further noted that his almost immediate return to child pornography following his release from prison in June 2012 was a strong indication that he is likely to reoffend.
Hutchins came to the attention of law enforcement from a CyberTip received by the National Center for Missing and Exploited Children (NCMEC) regarding a person who had posted child pornography images online beginning in September 2012. The images were posted to a popular online photo sharing website by a person using an IP address linked to the Corpus Christi area.
The IP address was later traced to the wife of Hutchins. Under supervised release and forbidden to reside near a school, Hutchins did not reside with his wife. The investigation was able to exclude the wife due to her work schedule and conflicting times associated with the online postings of child pornography. An investigation into his online activities and financial transactions, led to his identification of the one responsible for the postings.
At the time of his plea, he admitted to possessing images of child pornography he acquired from the internet.
The investigation was conducted by the FBI and the Corpus Christi Police Department’s Internet Crimes Against Children Task Force (ICAC).
Assistant United States Attorney Lance Duke is prosecuting the case, which 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."
Probationary Buffalo Police Officer Pleads Guilty <br /> to Drug ChargeRead the Press Release
BUFFALO, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that James Hamilton, Jr., 29, of Buffalo, N.Y., pleaded guilty to distribution of marijuana before U.S. District Judge William M. Skretny. The charge carries a maximum sentence of five years in prison, a $250,000 fine or both.
Assistant U.S. Attorney Timothy C. Lynch, who is handling the case, stated that on November 20, 2013, Hamilton, a probationary Buffalo Police Officer, sold a half pound of marijuana to a confidential source working with the Drug Enforcement Administration and the Erie County Sheriff’s Department. At the time of the sale, the defendant possessed his Buffalo Police issued .40 caliber Glock handgun.
Following the sale, the defendant was arrested and a search warrant was executed at his residence at 165 Floss Avenue in Buffalo. During the search, officers seized approximately 80 marijuana plants, three to four pounds of processed marijuana and a shotgun.
As a result, the defendant no longer works for the Buffalo Police Department.
Sentencing is scheduled for June 18, 2014 at 9:00 a.m. before Judge Skretny.
The plea is the culmination of an investigation by the Buffalo Police Department, under the direction of Commissioner Daniel Derenda, the Erie County Sheriff’s Department, under the direction of Sheriff Timothy Howard, and the Drug Enforcement Administration, under the direction of Jamie J. Hunt, Acting Special Agent in Charge, New York Field Division.Pine Ridge Man Sentenced for AssaultRead the Press Release
United States Attorney Brendan V. Johnson announced that a Pine Ridge, South Dakota, man convicted of Assault by Striking, Beating, and Wounding was sentenced on February 4, 2014, by U.S. Magistrate Judge Veronica L. Duffy.
Alexander Winter, age 27, was sentenced to 1 year in custody, 1 year of supervised release, and ordered to pay a $25 special assessment to the Federal Crime Victims Fund.
Winter was indicted for repeatedly punching a woman in the chest and face during an argument in March of 2013 at Pine Ridge. This assault resulted in contusions, bruises, a bloody nose, a black eye, and a nasal fracture to the victim.
This case was investigated by the Bureau of Indian Affairs Office of Justice Services and the Oglala Sioux Tribe Department of Public Safety. Assistant U.S. Attorney Eric Kelderman prosecuted the case.
Pine Ridge Man Sentenced for AssaultRead the Press Release
United States Attorney Brendan V. Johnson announced that a Pine Ridge, South Dakota, man convicted of Assault by Striking, Beating, and Wounding was sentenced on February 4, 2014, by U.S. Magistrate Judge Veronica L. Duffy.
Alexander Winter, age 27, was sentenced to 1 year in custody, 1 year of supervised release, and ordered to pay a $25 special assessment to the Federal Crime Victims Fund.
Winter was indicted for repeatedly punching a woman in the chest and face during an argument in March of 2013 at Pine Ridge. This assault resulted in contusions, bruises, a bloody nose, a black eye, and a nasal fracture to the victim.
This case was investigated by the Bureau of Indian Affairs Office of Justice Services and the Oglala Sioux Tribe Department of Public Safety. Assistant U.S. Attorney Eric Kelderman prosecuted the case.Winter was remanded to the custody of the U.S. Marshals Service.
Naples Man Pleads Guilty to Making False Statements to FbiRead the Press Release
ROCHESTER, N.Y.--U.S. Attorney William J. Hochul, Jr. announced today that Brandon Todd, 20, of Naples, N.Y., pleaded guilty before U.S. District Judge Frank P. Geraci, Jr., to making false statements to the Federal Bureau of Investigation. The charge carries a maximum penalty of five years in prison, a fine of $250,000, or both.
Assistant U.S. Attorney Jennifer M. Noto, who is handling the case, stated that the defendant called the FBI in April and early May 2013 claiming to have information about sex trafficking. Todd also claimed to be involved in sex trafficking and to have connections to a group involved in sex trafficking. Following the defendant’s calls, the FBI began an investigation into Todd’s claims. On July 10, 2013, the defendant made false statements to an FBI Special Agent that he had recruited approximately 49 girls for a sex trafficking ring and that he was a member of a gang. At the time, Todd knew that these statements were false. These false statements – concerning the nature of the defendant’s involvement in a sex trafficking ring and his affiliation with a gang - were material to the FBI’s investigation.
The plea is the culmination of an investigation on the part of Special Agents of the Federal Bureau of Investigation, under the direction of Special Agent In Charge Brian Boetig.
Sentencing is scheduled for May 15, 2014 at 3:30 p.m. before Judge Geraci.
Money Judgment of $1,376,670 Rendered Against Iowa Couple for Violations of the False Claims ActRead the Press Release
United States Attorney Brendan V. Johnson announced that on January 29, 2014, U.S. District Judge Charles B. Kornmann entered a civil judgment in favor of the United States in the amount of $1,376,670 against Howard “Jack” Aleff and Reena Slominski, a married couple from Knoxville, Iowa. Aleff and Slominski did business as L & J Wool & Fur, a South Dakota corporation. They illegally submitted 132 separate false claims to the U.S. Department of Agriculture (USDA), Farm Services Agency (FSA), in Iowa and South Dakota.
Over a period of six years, the couple presented bogus documents to the FSA, Commodity Credit Corporation, that appeared to be legitimate business transactions to support their requests for wool loan deficiency payments when in fact they owned no sheep. As a result, the United States paid them $303,890 to which they were not entitled.
The False Claims Act (31 U.S.C. § 3729) imposes liability on persons and companies who knowingly submit false claims to the government or causes another to submit a false claim to the government, or knowingly makes a false record or statement to get a false claim or benefit paid by the government. Persons who submit a false claim must pay to the United States a civil penalty of not less than $5,500 and not more than $11,000 for each false claim, plus three times the amount of damages which the government sustained.Previously, Aleff and Slominski pled guilty to the criminal charge of Conspiracy to Defraud the United States, and on September 13, 2012, they were sentenced to five years’ probation, fined $60,000, and ordered to pay restitution of $303,890 to the Commodity Credit Corporation.
The United States Attorney’s Office places a high priority on criminal and civil enforcement in cases involving all types of fraud committed against the government, and works with various law enforcement agencies to identify and investigate these matters. The investigation in this case was conducted by the USDA, Office of Inspector General (OIG). Assistant U.S. Attorneys Thomas Wright and Cheryl Schrempp DuPris prosecuted the criminal and civil cases respectively.
Martin Man Sentenced for Benefits FraudRead the Press Release
United States Attorney Brendan V. Johnson announced that a Martin, South Dakota, man convicted of Benefits Fraud was sentenced on February 3, 2014, by U.S. Magistrate Judge Veronica L. Duffy.
Walter York, age 34, was sentenced to one year of probation, and ordered to pay a $25 special assessment to the Federal Crime Victims Fund and restitution in the amount of $191.82.
York was indicted for making a purchase at Sam’s Club in Rapid City on July 10, 2011, with unlawfully purchased Supplemental Nutrition Assistance Program (SNAP) benefits.
This case was investigated by the Federal Bureau of Investigation and the South Dakota Department of Social Services. Assistant U.S. Attorney Kathryn N. Rich prosecuted the case.
Marshall County Drug Task Force Announces Expansion of Enforcement EffortsRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Chris Zumpetta-Parr, Public Affairs SpecialistNew interdiction units will team with Task Force
WHEELING, WEST VIRGINIA – Officials from the Marshall County Drug Task Force announced the addition of a new tool that will be used to stop the flow of drugs throughout the region.
Sheriff Kevin Cecil, Moundsville Police Chief Tom Mitchell, Prosecuting Attorney Jeff Cramer, and U.S. Attorney William J. Ihlenfeld, II, made the announcement on Wednesday and also provided an update on the work of the task force during its first year of operation.
According to Sheriff Cecil, five interdiction teams with two officers per team have been formed to target the transportation and delivery of drugs into and through Marshall County. All major roadways in the county will be targeted in addition to neighborhoods that need extra patrols due to suspected drug activity. The new teams will also work to interdict illegal drugs at hotels and motels, and to conduct parcel and package interdiction. The teams will support the drug task force and will be positioned to act upon intelligence that the unit provides.
Sheriff Cecil has allocated multiple vehicles, a K-9 unit, a license plate reader, and overtime funding in support of the new interdiction initiative.
“I’m excited to add this tool to our arsenal so we can continue to put significant pressure on the drug dealers that attempt to operate in Marshall County,” said Sheriff Cecil. “By having interdiction officers on the road we’ll be able to react much more quickly to illegal drug activity, and seize illegal drugs before they make it to the streets of Moundsville, Glen Dale, Benwood, and other communities within the county.”
In addition to announcing the interdiction efforts, the task force board members discussed the early successes of the group. In 2013, investigations by the task force resulted in 64 people being arrested or indicted on a total of 277 felony charges in state and federal court. A total of $578,000 in assets have been seized and either have been forfeited or are in the process of being forfeited.
Over 1,000 dosage units of prescription pills were seized by the task force in 2013, including quantities of oxycodone, hydrocodone, oxymorphone, lorazepam, and hydromorphone. Agents also seized heroin, cocaine, marijuana, and synthetic drugs.
Last week the task force wrapped up the successful prosecution of cross-country prescription painkiller distribution ring. The acts in the conspiracy occurred over a period of three years and involved large quantities of pills being shipped from California to Moundsville via the U.S. Postal Service. The pills were then re-distributed in the Moundsville area by members of the conspiracy. Five people were convicted in federal court and each face up to twenty years in prison.
The Marshall County Drug Task Force includes officers and agents from the Sheriff’s Department, the Moundsville Police Department, and the U.S. Drug Enforcement Administration. It also receives support from the Office of National Drug Control Policy because of Marshall County’s designation as a High Intensity Drug Trafficking Area (HIDTA) in 2012. This federal HIDTA funding allows the task force to conduct more extensive investigations and to be more aggressive in its pursuit of mid and upper-level drug trafficking organizations.
“I’m proud to be a part of the task force and I’m very pleased with results it has produced in just twelve months,” said Chief Mitchell. “By putting all of our agencies together onto one unit we’re able to be much more effective in keeping Moundsville and the surrounding region a safer place for everyone.”
“We’ve never had more of a need for a drug task force than right now,” said Sheriff Cecil. “This unit is critical to keeping the pressure on those who try to profit from the sale of pills, powders, and other substances in the county.”
“I’m thrilled that the Marshall County Prosecuting Attorney’s Office is a part of this task force,” said Prosecutor Cramer. “The joint efforts of the member agencies have already proven to provide a great benefit to the citizens of Marshall County in combating the drug problem.”
Regular updates on the work of the Marshall County Task Force will be made by press releases from its member agencies as well as via the official Twitter feed of the United States Attorney’s Office, @NDWVnews.
Mannford Man Pleads Guilty to Theft or Bribery Concerning Programs Receiving Federal FundsRead the Press Release
Muskogee, Oklahoma - The United States Attorney’s Office for the Eastern District of Oklahoma, announced that ROBERT DEWAYNE GIFFORD, age 62, of Mannford, Oklahoma, pled guilty to an Information in federal court today. The defendant is charged with THEFT OR BRIBERY CONCERNING PROGRAMS RECEIVING FEDERAL FUNDS, in violation of Title 18, United States Code, Section §666(a)(1)(B) and MONEY LAUNDERING, in violation of Title 18, United States Code, Section 1957.
The Information alleges that from on or about January 2010 and continuing through September 2010, ROBERT DEWAYNE GIFFORD and others known and unknown to the government, did accept or agree to accept anything of value of $5,000 or more to persons authorized to act on the behalf of the Choctaw Nation of Oklahoma (CNO) intending to influence and reward an agent, employee and officer of the CNO in connection with a transaction and series of transactions of the CNO.
The Information further alleges that during the period of time from on or about April 9, 2010 to on or about May 5, 2010, in the Eastern District of Oklahoma and elsewhere, the defendant and others known and unknown to the government did engage and attempt to engage in a monetary transaction by, through or to a financial institution, affecting interstate or foreign commerce, in criminally derived property of a value greater than $10,000, such property having been derived from a specified unlawful activity.
The charges are a result of a joint investigation by the Federal Bureau of Investigation and the Internal Revenue Service Criminal Investigations Division.
The statutory range of punishment on each offense is ten years imprisonment and a fine of up to $250,000.00.
The Honorable Kimberly E. West, Magistrate Judge in the Eastern District of Oklahoma presided over the hearing. The defendant was released on bond pending sentencing.
First Assistant United States Attorney Doug Horn and Assistant United States Attorney Chris Wilson represented the United States.
Manhattan U.S. Attorney Announces Charges Against Owner of Bronx Clinic and 23 Other Individuals Involved in Illegal Distribution of More Than Five Million Oxycodone PillsRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Bridget G. Brennan, the Special Narcotics Prosecutor for the City of New York (“SNP”), James J. Hunt, the Acting Special Agent-in-Charge of the New York Field Division of the U.S. Drug Enforcement Administration (“DEA”), and William Bratton, the Police Commissioner of the City of New York (“NYPD”), announced today the unsealing of an Indictment against 24 defendants in connection with a massive drug distribution ring that operated out of a purported medical clinic with multiple locations in the Bronx, New York, known as “Astramed,” and unlawfully distributed more than five million tablets of the prescription painkiller oxycodone over a three-year period. The participants in the distribution ring included doctors, clinic employees, and drug traffickers who oversaw crews of “patients” who they sent into the clinics in order to obtain medically unnecessary prescriptions. The prescriptions were then filled at pharmacies, and the resulting pills resold on the streets of New York and elsewhere.
Twenty-one defendants were arrested yesterday in connection with today’s charges. The defendants will be presented in Manhattan federal court before U.S. Magistrate Judge Gabriel W. Gorenstein later this afternoon. Related charges against one of the clinic doctors were also unsealed today by SNP. The defendant is expected to be arraigned later today in Manhattan Supreme Court before Judge Bruce Allen.
Manhattan U.S. Attorney Preet Bharara said: “The world of prescription drug trafficking is looking more and more like the world of old-school trafficking in narcotics like heroin, cocaine and crack. In this case, the drug spot was a clinic controlled by traffickers, often through intimidation and violence. The traffickers were supplied with prescriptions by corrupt doctors and clinic employees, dispensed to lower-level ‘pretend’ patients so that massive quantities of oxycodone could be distributed wherever the most money could be made, often in communities hundreds of miles away. This is poison by prescription, and the volume and money allegedly involved would make hardened illegal drug traffickers envious – over 31,000 medically unnecessary oxycodone prescriptions for 5.5 million tablets sold with a street value between $170 million and over half a billion dollars. Even legal drugs illegally obtained can be deadly, and more people have been dying from prescription drug abuse than heroin and cocaine combined. Unnecessary painkillers can simply end up being killers. This has to stop and we will do everything we can to stop it.”
Special Narcotics Prosecutor Bridget G. Brennan said: “These clinics have long been a source of community concern and complaints. Dr. Robert Terdiman is charged with selling prescriptions for highly addictive painkillers on a scale we have not seen before – flooding the black market with oxycodone carrying a street value of over $90 million. Not only is he charged with perpetuating a practice that did little to heal and much to harm, both he and The Clinic reaped huge profits. We would like to recognize the extraordinary commitment and dedication of all of the agencies that participated in this investigation.”
DEA Acting Special Agent in Charge James J. Hunt said, “Twenty two arrests, the dismantlement of the largest pill mill in the northeast and the ability for residents living near Southern Boulevard and Westchester Avenue in the Bronx to reclaim their neighborhood from drug dealers are the end results of unified police work by local, state and federal law enforcement in New York. I commend the diligent work of the numerous law enforcement agencies who participated in this investigation.”
NYPD Commissioner William Bratton said: “Instead of abiding by the Hippocratic Oath, these doctors scheduled pseudo physical exams for greed and self-profit. They fueled a criminal operation which distributed highly addictive prescription drugs in the Bronx community and surrounding areas. Thanks to the investigators and prosecutors in this case, Lowe and his crew will no longer traffic illegal drugs.”
According to the allegations contained in the Indictment and other documents unsealed today in Manhattan federal court:
Oxycodone is a highly addictive, prescription narcotic-strength opioid used to treat severe and chronic pain conditions. More than 13 million Americans abuse oxycodone, with the misuse of prescription painkillers such as oxycodone leading to as many as 500,000 annual emergency room visits. Oxycodone prescriptions have enormous cash value to street level drug dealers, who can fill the prescriptions at most pharmacies and resell the resulting pills at vastly inflated rates. Indeed, a single prescription for 180 30-milligram oxycodone pills has an average resale value in New York City of more than $6,000, and up to $18,000 in nearby states.
From approximately January 2011 until January 2014, a drug distribution ring centered at “Astramed,” a purported medical clinic with multiple locations in the Bronx, including a primary location on Southern Boulevard (the “Clinic”), unlawfully diverted and trafficked millions of oxycodone tablets, which netted participants in the distribution scheme hundreds of millions of dollars in proceeds.
Astramed was owned and operated by KEVIN LOWE, a medical doctor, who reaped millions of dollars by charging cash for the thousands of medically unnecessary prescriptions written by the clinic doctors (the “Doctors”). The Doctors were corrupt, Board-certified, state- licensed doctors who, in exchange for cash, were willing to write medically unnecessary prescriptions for large quantities of oxycodone. The Clinic typically charged $300 in the form of a money order for “doctor visits” that usually lasted just a minute or two, involved no actual physical examination, and consistently resulted in the issuance of a prescription for large doses of oxycodone, typically 180 30-milligram tablets, or a daily dosage of six 30-milligram tablets. Indeed, the Doctors, who worked directly for LOWE, were paid only for each prescription they wrote – rather than for each patient they saw – and they were paid nothing if they did not write a prescription.
Various employees of the Astramed clinics controlled access to the Doctors and created false documents in exchange for cash payments. To avoid detection by law enforcement, the Doctors sometimes asked the “patients” for medical documentation, such as MRIs, purporting to document injuries, or urine samples purporting to show that the “patient” was taking oxycodone. Fake MRIs and urine samples were sold by members of the conspiracy to Astramed’s “patients,” typically inside the Clinic or immediately outside its premises.
The Clinic itself bears little resemblance to a standard medical office. For example, on a daily basis during the time set forth in the Indictment, crowds of up to one hundred people gathered outside the Clinic, clamoring to see one of the doctors at the clinic and thereby get a prescription for oxycodone. The majority of these individuals had no medical need for oxycodone, or any legitimate medical record documenting an ailment for which oxycodone would be prescribed. Instead, most of these individuals were members of “crews” – that is, they were recruited and paid by high-level drug traffickers, oxycodone distributors (the “Crew Chiefs”), to pose as “patients” in order to receive medically unnecessary prescriptions from the Doctors. The Crew Chiefs then arranged for and oversaw the filling of the resulting prescription at various pharmacies and took possession of the oxycodone pills to be resold on the street. Crew Chiefs also paid the Clinic’s employees hundreds of dollars in cash at a time to get their Crew Members into the Clinic to see one of the Doctors. The Crew Chiefs maintained their joint control over the operations of the Clinic, in part, as a result of intimidation and the threat of violence.
In total, between approximately January 2011 and January 2014, Astramed Doctors issued approximately 31,500 medically unnecessary prescriptions for oxycodone, comprising nearly 5.5 million oxycodone tablets with a street value of up to $550 million. LOWE alone collected nearly $12 million in fees for “doctor visits” during this time period. Based on the street market value of the pills distributed, the participants in the distribution ring together made hundreds of millions of dollars as a result of the clinic fees charged and the proceeds obtained from the resale of the illegally obtained oxycodone.
All of the defendants are charged with one count of conspiracy to distribute and possess with intent to distribute oxycodone, which carries a maximum sentence of 20 years in prison.
A chart containing each defendant’s age and residence information is attached. The case is assigned to U.S. District Judge Lorna G. Schofield.
Mr. Bharara thanked the DEA and the NYPD for their work in the 15-month investigation, which he noted is ongoing. Mr. Bharara also thanked, the Office of the Special Narcotics Prosecutor for the City of New York, the Town of Orangetown Police Department, the Westchester County Police Department, the United States Department of Health and Human Services, the United States Marshals Service, the New York State Health Department’s Bureau of Narcotic Enforcement, the Office of the Medicaid Inspector General, New York City's Human Resource Administration, the New York State Attorney General’s Office Medicaid Fraud Control Unit, Beacon New York Police Department, the Internal Revenue Service-Criminal Investigation and the El Dorado Task Force for their assistance.
The case is being prosecuted by the Office’s Narcotics Unit. Assistant U.S. Attorneys Edward B. Diskant and Tatiana R. Martins are in charge of the prosecution. Assistant U.S. Attorney Micah Smith of the Office’s Asset Forfeiture Unit is responsible for the forfeiture of assets.
The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
U.S. v. Kevin Lowe et al. Indictment
U.S. v. Kevin Lowe et al. Detention Memo
U.S. v. Kevin Lowe et al Defendant Ages and ResidencesManhattan U.S. Attorney Announces Arrests of Five Defendants for Conspiring to Defraud Consumers Through the Sale of Counterfeit Luxury GoodsRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Philip R. Bartlett, the Inspector-in-Charge of the New York Office of the U.S. Postal Inspection Service (“USPIS”), today announced the unsealing of an Indictment in Manhattan federal court charging JOSEPH MOSSERI, ALBERT MOSSERI, ODED HAKIM, a/k/a “Eddie Hakim,” ELLIOT SHASHO, and ANDREW LI, for their alleged participation in a scheme that victimized hundreds of consumers and numerous credit card processers through the marketing and sale of counterfeit luxury handbags over the Internet. JOSEPH MOSSERI, HAKIM, SHASHO, and LI were arrested today. ALBERT MOSSERI also surrendered today to USPIS. JOSEPH MOSSERI will be presented in Manhattan federal court this afternoon before United States Magistrate Judge Gabriel W. Gorenstein, and the remaining defendants will be presented tomorrow.
U.S. Attorney Preet Bharara said: “I would like to thank our partners, the U.S. Postal Inspection Service, Immigration and Customs Enforcement’s Homeland Security Investigations, U.S. Customs and Border Protection, and the New York State Department of Taxation and Finance, for their outstanding investigative efforts and assistance in bringing this alleged counterfeiting scheme to light.”
USPIS Inspector-in-Charge Philip R. Bartlett said: “When criminals counterfeit goods they harm the economy and legitimate businesses that pay their fair share in taxes and employ American citizens. It’s the same as identity theft, but only from a brand. Postal Inspectors have little tolerance for this type of theft and will aggressively investigate and bring to justice anyone who defrauds American consumers.”
According to the allegations in the Indictment unsealed today in Manhattan federal court:
The defendants and others controlled a series of websites that advertised and sold luxury fashion and other name-brand items – primarily handbags – at prices of up to $3,000. The websites advertised that the goods offered for sale were authentic and that they were offered at a discount because of manufacturing defects that were, according to one of the websites, “infrequently noticeable to the consumer.” In fact, however, the defendants either never shipped goods to consumers who ordered them or shipped goods that were verifiably counterfeit.
In order to prevent the proceeds of their scheme from being eroded by credit card chargebacks initiated by deceived customers, the defendants also defrauded the credit card processors for the websites by misrepresenting the reasons for disputed charges and obstructing efforts by credit card processors to recover disputed funds. The losses attributable to such efforts exceeded, in some cases, hundreds of thousands of dollars.
JOSEPH MOSSERI, ALBERT MOSSERI, HAKIM, and SHASHO directed the scheme and managed its finances. LI supplied the counterfeit luxury goods that were sold on the websites.
JOSEPH MOSSERI, 43; ALBERT MOSSERI, 34; HAKIM, 46; SHASHO, 41; and LI, 34, all of Brooklyn, New York, are each charged with one count of conspiracy to commit wire fraud, one count of substantive wire fraud, and one count of trademark counterfeiting. Each of the fraud counts carries a maximum sentence of 20 years in prison. The trademark counterfeiting count carries a maximum sentence of 10 years in prison. U.S. District Judge Alvin K. Hellerstein has been assigned to the case.
Mr. Bharara praised the outstanding investigative work of the Postal Inspection Service. He also thanked U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, U.S. Customs and Border Protection, and the New York State Department of Taxation and Finance for their assistance.
The prosecution is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorney Scott A. Hartman is in charge of the prosecution.
The charges contained in the Indictments are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
U.S. v. Joseph Mosseri, et al. Indictment
Kansas Man Sentenced to over 2 Years' Imprisonment for Stealing over $190,000 Worth of Scientific CalculatorsRead the Press Release
A man who, along with his brother, stole scientific calculators from Wal-Mart stores in multiple states and shipped the calculators to New York City, was sentenced on February 4, 2014, in federal court in Cedar Rapids to thirty months in federal prison.
Jacob Nelson, 31, from Wichita, Kansas, received the prison term after a November 19, 2013, guilty plea to one count of conspiracy to transport stolen goods in interstate commerce.
At the November 19, 2013 plea hearing, Nelson admitted to agreeing with others to transport over $5,000 in stolen scientific calculators. Nelson further admitted that on August 13, 2013, he and a co-conspirator drove from Wisconsin into Iowa in possession of over 200 stolen scientific calculators valued at more than $26,000. Nelson also admitted that on August 13, 2013, he and a co-conspirator stole fourteen scientific calculators valued at $1,295 from the Wal-Mart in Maquoketa, Iowa. Nelson and his co-conspirator were arrested driving away from the Wal-Mart. Police officers then searched Nelson’s car and found hundreds of stolen calculators and two loaded handguns.
Nelson was sentenced in Cedar Rapids by United States District Court Chief Judge Linda R. Reade. Nelson was sentenced to thirty months’ imprisonment. A special assessment of $100 was imposed, and he was ordered to make $163,974.96 in restitution to Wal-Mart. He must also serve a three-year term of supervised release after the prison term. There is no parole in the federal system.
Nelson’s brother, Caleb Nelson, 29, also from Wichita, Kansas, previously pled guilty on January 21, 2014 for his role in the conspiracy to transport stolen calculators. Caleb Nelson’s sentencing before United States District Court Chief Judge Reade will be set after a presentence report is prepared.
The cases are being prosecuted by Assistant United States Attorney Anthony Morfitt and were investigated by the Federal Bureau of Investigation, the Iowa Division of Criminal Investigation, and the Maquoketa Police Department.
Court file information is available at https://ecf.iand.uscourts.gov/. Jacob Nelson’s case file number is 13-CR-1021. Caleb Nelson’s case file number is 14-CR-1001.
International Narcotics Trafficker Pleads Guilty in Manhattan Federal Court to the Manufacture, Shipment, and Importation of Tons of Cocaine into the United States and Other CountriesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and James J. Hunt, Acting Special Agent-in-Charge of the New York Field Division of the U.S. Drug Enforcement Administration, announced that YESID RIOS SUAREZ pled guilty yesterday in Manhattan federal court in connection with his role in overseeing the manufacture of tens of thousands of kilograms of cocaine in clandestine laboratories in Colombia, and the distribution and importation of tons of cocaine to the United States and other countries. RIOS SUAREZ, a citizen of Colombia, who was originally charged in September 2011, pled guilty yesterday before U.S. District Judge Katherine B. Forrest.
Manhattan U.S. Attorney Preet Bharara said: “Yesid Rios Suarez has admitted his role in the manufacture, distribution, and importation into the U.S. of tons of Colombian cocaine. As a man who stands convicted by guilty plea of spending two decades in the cocaine business, he now faces the prospect of a lengthy prison term.”
DEA Acting Special Agent-in-Charge James J. Hunt said: “This is a significant international drug trafficker responsible for facilitating addiction and heartache for individuals and communities across the country. Thanks to our vast network of law enforcement and sources throughout the world, DEA and our partners successfully infiltrated his prolific drug enterprise and Mr. Suarez will now face the consequences for his criminal life.”
According to the Indictment and statements made at related court proceedings:
Between in or about 1992 until his arrest in Venezuela in or about 2011, RIOS SUAREZ, along with his co-conspirators, oversaw the manufacture of tens of thousands of kilograms of cocaine in clandestine laboratories that they operated in the Arauca department of Colombia and other areas of Colombia near the Venezuelan border. During that time, RIOS SUAREZ and his co-conspirators also oversaw the distribution of tens of thousands of kilograms of cocaine from Colombia and Venezuela to the United States and other countries through various intermediate shipping points. Specifically, once the cocaine had been manufactured in laboratories in Colombia, RIOS SUAREZ worked with others to launch planes carrying multi-hundred-kilogram loads of cocaine from clandestine landing strips operated by RIOS SUAREZ and his co-conspirators in Colombia and Venezuela. All told, prior to his arrest in 2011, RIOS SUAREZ worked for nearly two decades overseeing critical steps in the manufacture, distribution, and importation into the United States and other countries of tons of cocaine.
RIOS SUAREZ, 46, of Colombia, pled guilty to one count of participating in a conspiracy to import cocaine into the United States, and to manufacture and distribute cocaine knowing and intending that it would be imported into the United States. RIOS SUAREZ faces a mandatory minimum sentence of ten years in prison and a maximum sentence of life in prison. RIOS SUAREZ is scheduled to be sentenced by Judge Forrest on June 6, 2014, at 10:00 a.m.
Mr. Bharara praised the outstanding efforts of the DEA’s New York Organized Crime Drug Enforcement Strike Force and the Bogota Country Office; the Government of the Republic of Colombia; and the U.S. Department of Justice’s Office of International Affairs.
The DEA’s New York Organized Crime Drug Enforcement Strike Force comprises agents and officers of the U. S. Drug Enforcement Administration, the New York City Police Department, Immigration and Customs Enforcement – Homeland Security Investigations (HSI), the New York State Police, the U. S. Internal Revenue Service Criminal Investigation Division, the Federal Bureau of Investigation, the Bureau of Alcohol, Tobacco, Firearms and Explosives, U.S. Secret Service, the U.S. Marshal Service, New York National Guard, Office of Foreign Assets Control and the New York Department of Taxation and Finance. The Strike Force is partially funded by the New York/New Jersey High Intensity Drug Trafficking Area (HIDTA), which is a federally funded crime fighting initiative.
The prosecution of this case is being handled by the Office’s Terrorism and International Narcotics Unit. Assistant United States Attorneys Adam Fee and Sean S. Buckley are in charge of the prosecution.
U.S. v. Didier Gerson Rios Galindo and Yesid Rios Suarez Indictment
Information: Federal Court ArraignmentsRead the Press Release
The United States Attorney's Office today announced that those persons listed below were arraigned before the U.S. Magistrate and the indictments handed down by the Grand Jury unsealed.
Appearing before U.S. Magistrate Judge Missoula on January 27, 2014 and entering pleas of Not Guilty were:
- STEVE HUMISTON, a 56-year-old resident of Tacoma, Washington appeared on charges of child exploitation enterprise and conspiracy to advertise child pornography. If convicted of the most serious offense charged in the indictment, HUMISTON faces life in prison, $250,000 in fines and lifetime supervised release. The investigation was a cooperative effort between the Federal Bureau of Investigation, Homeland Security Investigation, Montana Division of Criminal Investigations, Internet Crimes Against Children Task Force, Polson Police Department and Helena Police Department. PACER Case Reference: 13-30
- ROBERT LEE KRISE, a 65-year-old resident of Gaithersburg, Maryland appeared on charges of child exploitation enterprise and conspiracy to advertise child pornography. If convicted of the most serious offense charged in the indictment, KRISE faces life in prison, $250,000 in fines and lifetime supervised release. The investigation was a cooperative effort between the Federal Bureau of Investigation, Homeland Security Investigation, Montana Division of Criminal Investigations, Internet Crimes Against Children Task Force, Polson Police Department and Helena Police Department. PACER Case Reference: 13-30
- IAN JOSEPH NOSEK, a 42-year-old resident of Charlottesville, Washington appeared on charges of child exploitation enterprise and conspiracy to advertise child pornography. If convicted of the most serious offense charged in the indictment, NOSEK faces life in prison, $250,000 in fines and lifetime supervised release. The investigation was a cooperative effort between the Federal Bureau of Investigation, Homeland Security Investigation, Montana Division of Criminal Investigations, Internet Crimes Against Children Task Force, Polson Police Department and Helena Police Department. PACER Case Reference: 13-30
- JEFFREY WOOLLEY, a 53-year-old resident of Nicholasville, Kentucky appeared on charges of child exploitation enterprise and conspiracy to advertise child pornography. If convicted of the most serious offense charged in the indictment, WOOLLEY faces life in prison, $250,000 in fines and lifetime supervised release. The investigation was a cooperative effort between the Federal Bureau of Investigation, Homeland Security Investigation, Montana Division of Criminal Investigations, Internet Crimes Against Children Task Force, Polson Police Department and Helena Police Department. PACER Case Reference: 13-30
Appearing before U.S. Magistrate Judge Strong in Great Falls on January 30, 2014 and entering pleas of Not Guilty were:
- CHARLES CROSBY, a 43-year-old resident of Trenton, New Jersey appeared on charges of child exploitation enterprise and conspiracy to advertise child pornography. If convicted of the most serious offense charged in the indictment, CROSBY faces life in prison, $250,000 in fines and lifetime supervised release. The investigation was a cooperative effort between the Federal Bureau of Investigation, Homeland Security Investigation, Montana Division of Criminal Investigations, Internet Crimes Against Children Task Force, Polson Police Department and Helena Police Department. PACER Case Reference: 13-30
Appearing before U.S. Magistrate Judge Lynch in Missoula on February 4, 2014 and entering pleas of Not Guilty were:
- LLOYD NICKLE, 47-year-old resident of Minot, North Dakota appeared on charges of conspiracy to possess with intent to distribute methamphetamine and possession with intent to distribute methamphetamine. If convicted of the most serious offense charged in the indictment, NICKLE faces life in prison, $10,000,000 in fines and 5 years supervised release. The case was investigated by the Federal Bureau of Investigation. PACER Case Reference: 13-23
Appearing before U.S. Magistrate Judge Strong in Great Falls on February 4, 2014 and entering pleas of Not Guilty were:
- JEFFREY JOE ROY IRONPIPE, a 21-year-old resident of Cut Bank, appeared on charges of sexual abuse of a minor. If convicted of the charge in the indictment, IRONPIPE faces 15 years in prison, $250,000 in fines and lifetime supervised release. The case was investigated by the Federal Bureau of Investigation. PACER Case Reference: 14-01
Appearing before U.S. Magistrate Judge Lynch in Missoula on February 5, 2014 and entering pleas of Not Guilty were:
- RONALD THOMAS WILLIAMS, a 36-year-old resident of Belgrade, appeared on charges of possession with intent to distribute dextroamphetamine/amphetamine and carrying a firearm during and in relation to a drug trafficking crime.. If convicted of the most serious charge in the indictment, WILLIAMS faces 20 years in prison, $1,000,000 in fines and 3 years supervised release. The case was investigated by the Drug Enforcement Administration and the Bureau of Alcohol, Tobacco and Firearms. PACER Case Reference: 14-02
The indictment is merely a formal charging document. It is not proof of guilt and all persons indicted are presumed to be innocent of any crime until proof of guilt is established by trial or guilty plea.
The U.S. Attorney's Office is currently transitioning its media program to new media contacts. Resources and this transition may affect the amount of information the office can process and disclose in a timely manner. Therefore, if any of the above cases are of interest to your media organization and the community it serves, we encourage you to monitor the progress of the case regularly through the U.S. District Court calendar and the PACER system so that you stay current and not miss any important developments in the case.
To establish a PACER account, which will allow you to review documents filed in the case, please go to, http://www.pacer.gov/register.html.
To access the district court's calendar, please go to https://ecf.mtd.uscourts.gov/cgi-bin/PublicCalendar.pl.
Husband, Wife and Business Associate Charged with Health Care FraudRead the Press Release
HOUSTON – William Owuama, 55, Marla Owuama, 46, and Florida Holiday Island, 64, all of Houston, have been charged in an eight-count indictment alleging conspiracy to commit health care fraud, health care fraud and conspiracy to violate the federal anti-kickback statute, announced United States Attorney Kenneth Magidson.
The sealed indictment, returned Jan. 22, 2014, was unsealed this afternoon as all three defendants made their initial appearance before U.S. Magistrate Judge Frances Stacy at 2:00 p.m. At the hearing, Judge Stacy permitted Marla Owuama and Island be released upon posting bond. Upon surrendering his passport, William Owuama is also expected to be released upon posting bond.The indictment alleges William Owuama was the owner of Wilmar Healthcare Systems, his wife Marla was a registered nurse and Island transported patients to and from the clinic. According to allegations, they not only paid patients for visiting the clinic in violation of the anti-kickback statute, but billed Medicare and Medicaid for vestibular testing that was never performed. The indictment also alleges the clinic billed Medicare and Medicaid under the provider number of a local doctor while that doctor was incarcerated on unrelated charges. From January 2006 through October 2009, Medicare and Medicaid paid Wilmar more than $4 million based on the alleged fraudulent claims.
If convicted, all three defendants face up to five years in federal prison and a $250,000 fine for conspiring to commit healthcare fraud and violating the anti-kickback statute. The Owuamas also face up to 10 years in prison and a $250,000 fine for the substantive healthcare fraud charges.
The investigation leading to the charges in this case was conducted by the U.S. Department of Health and Human Services – Office of Inspector General and the Texas Attorney General’s Office Medicaid Fraud Control Unit. Special Assistant United States Attorney (SAUSA) Adrienne Frazior and AUSAs Andrew Leuchtmann and John Pearson are prosecuting the case.
A defendant is presumed innocent unless and until convicted through due process of law.Husband, Wife and Business Associate Charged with Health Care FraudRead the Press Release
HOUSTON – William Owuama, 55, Marla Owuama, 46, and Florida Holiday Island, 64, all of Houston, have been charged in an eight-count indictment alleging conspiracy to commit health care fraud, health care fraud and conspiracy to violate the federal anti-kickback statute, announced United States Attorney Kenneth Magidson.
The sealed indictment, returned Jan. 22, 2014, was unsealed this afternoon as all three defendants made their initial appearance before U.S. Magistrate Judge Frances Stacy at 2:00 p.m. At the hearing, Judge Stacy permitted Marla Owuama and Island be released upon posting bond. Upon surrendering his passport, William Owuama is also expected to be released upon posting bond.The indictment alleges William Owuama was the owner of Wilmar Healthcare Systems, his wife Marla was a registered nurse and Island transported patients to and from the clinic. According to allegations, they not only paid patients for visiting the clinic in violation of the anti-kickback statute, but billed Medicare and Medicaid for vestibular testing that was never performed. The indictment also alleges the clinic billed Medicare and Medicaid under the provider number of a local doctor while that doctor was incarcerated on unrelated charges. From January 2006 through October 2009, Medicare and Medicaid paid Wilmar more than $4 million based on the alleged fraudulent claims.
If convicted, all three defendants face up to five years in federal prison and a $250,000 fine for conspiring to commit healthcare fraud and violating the anti-kickback statute. The Owuamas also face up to 10 years in prison and a $250,000 fine for the substantive healthcare fraud charges.
The investigation leading to the charges in this case was conducted by the U.S. Department of Health and Human Services – Office of Inspector General and the Texas Attorney General’s Office Medicaid Fraud Control Unit. Special Assistant United States Attorney (SAUSA) Adrienne Frazior and AUSAs Andrew Leuchtmann and John Pearson are prosecuting the case.
A defendant is presumed innocent unless and until convicted through due process of law.Fourth Prison Sentence Handed Down in Gun Store Burglary CaseRead the Press Release
LAS VEGAS, Nevada – The last of four men convicted of burglarizing and stealing 21 firearms from a Henderson, Nev. gun store in August 2011, was sentenced today to 2½ years in prison and three years of supervised release, announced Daniel G. Bogden, United States Attorney for the District of Nevada.
The case was investigated by ATF, with the assistance of the Las Vegas Metropolitan Police Department Gang Crimes Bureau, the Henderson Police Department, and the North Las Vegas Police Department. The case was screened through the Southern Nevada Project Safe Neighborhoods Task Force, a team of federal and local law enforcement officers and prosecutors who meet on a regular basis to discuss arrests involving guns and explosives. Project Safe Neighborhoods, also known as PSN, is a Department of Justice initiative and a nationwide commitment to reduce gun and gang crime in America. The prosecution was handled by Assistant United States Attorney Phillip N. Smith, Jr.
Demario F. Edwards, 24, of North Las Vegas, who pleaded guilty in October 2013 to possession of a stolen firearm and theft from a federal firearms licensee, was sentenced by U.S. District Judge Kent J. Dawson. Three co-defendants charged in the case, Victor Williams, 21, Daryl Galtney, 25, and Frank Freeman, 27, also pleaded guilty and were sentenced last year to 37 months, 63 months, and 100 months in prison, respectively.
“Many of these stolen firearms end up in the hands of criminals, who later commit crimes of violence,” said U.S. Attorney Bogden. “It is important to send a message to persons who steal firearms in burglaries and robberies that there are strong federal laws prohibiting this type of conduct and we will use them to keep the community safe.”
According to the court records, on Aug. 13, 2011, at approximately 3:30 a.m., one of the defendants drove a stolen Crown Victoria through the front entrance of a gun store in Henderson. Video surveillance shows a vehicle crashing through the window of the store and the defendants then entering the store. Once inside, the defendants broke a glass display case and began stealing multiple firearms. The defendants exited the store with 21 stolen handguns, and drove away in a separate vehicle, leaving the Crown Victoria inside the store. Beginning in September 2011, investigators started recovering firearms that were stolen in the burglary, some of which were recovered in the Las Vegas area during searches of various residences and following a robbery and a homicide. One of the guns, a .45 caliber handgun, was found in Edwards’ apartment in September 2011 when Nevada Probation and Parole Officers were conducting a compliance check. As a result, Edwards pleaded guilty in a separate federal case to felon in possession of a firearm and was sentenced to two years in prison which will run concurrent to today’s sentence.Founders of Bankrupt Real Estate Investment Firm Indicted in Wide-Ranging Scheme That Led to over $110 Million in LossesRead the Press Release
SANTA ANA, California – The owners of a now-defunct Southern California real estate investment firm were arrested today for allegedly perpetrating a Ponzi scheme that ended with the bankruptcy of their company and caused private investors and banks collectively to lose well over $110 million when the scheme collapsed.
Michael Stewart, 66, of Phoenix, and John Packard, 63, of Long Beach, California, were arrested this morning without incident by special agents with the FBI. The two men were named last month in a 16-count indictment returned by a federal grand jury. The two men each face 11 counts of mail fraud, three counts of bank fraud, and two counts of bankruptcy fraud.
Stewart and Packard owned and were the chief executives of Pacific Property Assets (PPA), which had offices in Long Beach and Irvine. The two men created PPA in 1999 to purchase, renovate, operate, and resell or refinance apartment complexes in Southern California and Arizona. Typically, PPA financed property acquisitions through mortgages, and it raised money from private investors to pay for renovations to the properties. After several years, PPA would usually refinance (or sometimes sell) each property.
Although PPA’s apartment rental operations were not profitable, it was able to raise cash through refinancing. As real estate values were generally increasing until approximately 2007, the properties were refinanced at ever-higher values, which enabled PPA to use the extra refinancing proceeds to not only pay off the original mortgages, but also to make payments on other loans, make payments to investors, to pay other business expenses, and to pay Stewart and Packard. In its 10 years of operations, PPA acquired more than 100 real estate properties and raised tens of millions of dollars from hundreds of investors. Stewart and Packard paid themselves annual salaries of $400,000 to $750,000, and each received millions of dollars in additional payments.
According to the indictment, by the end of 2007, when the real estate market began to decline and credit became scarce, PPA’s business model was no longer feasible. As the value of PPA’s properties was falling, PPA could no longer raise money by refinancing its properties with increasingly large mortgages. Furthermore, PPA faced large debt payments to its mortgage lenders and private investors, while it was continuing to lose money in its business operations.
To keep PPA afloat, from late 2007 through April 2009, Stewart and Packard allegedly continued to raise tens of millions of dollars from new investors. The defendants are accused of using these new funds to pay earlier investors, mortgage lenders, other company expenses, and Stewart and Packard themselves.
The indictment alleges that during the course of this continued fundraising effort, Stewart and Packard misrepresented PPA’s financial condition, claiming that its business model was still working, and that PPA was still financially stable and able to raise money through refinancing. Stewart and Packard allegedly concealed from investors the fact that the business had effectively become a Ponzi scheme, using new investors’ funds to pay back earlier investors. Moreover, following PPA’s final investor offering in 2009, virtually none of the investors’ funds were used to invest in new property purchases, as had been promised to investors; instead, the money was used to pay earlier investors and banks, to pay Stewart and Packard, and to pay PPA’s bankruptcy attorney.
The indictment also charges that PPA provided false financial information to at least one of its bank lenders – Vineyard Bank – in order to obtain loans and to maintain its line of credit with that bank. In particular, PPA allegedly substantially overstated its income (including its rental revenue) and assets (including its cash position), concealing the fact that its operations were unprofitable and it had limited liquidity.
PPA and a group of related companies filed for bankruptcy in June 2009. When the bankruptcy was filed, PPA owed 647 private investors more than $91 million, and it owed banks approximately $100 million. In the bankruptcy proceeding, the private investors received nothing, while banks lost an estimated $24 million.
The indictment further charges that Stewart and Packard committed fraud in connection with the bankruptcy process. After PPA had retained bankruptcy attorneys and shortly before it filed for bankruptcy, Stewart and Packard allegedly transferred $165,000 from PPA to Packard’s personal bank account, ensuring that those funds were not available to PPA’s creditors through the bankruptcy process. The indictment also charges that after PPA entered bankruptcy, Stewart and Packard arranged for $131,000 in funds due to PPA to be transferred to outside accounts and then to Stewart, Packard, and their personal attorneys, thus circumventing the bankruptcy process.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty in court.
Stewart is expected to make his initial court appearance later today in federal court in Phoenix. Packard is expected to be arraigned on the indictment this afternoon in United States District Court in Santa Ana.
If they are convicted of all 16 counts in the indictment, both Stewart and Packard each would face a statutory maximum sentence of 320 years in federal prison and millions of dollars in fines.
This investigation was conducted by the Federal Bureau of Investigation, which received assistance from the United States Trustee’s Office.
In May 2012, the Securities & Exchange Commission filed a complaint against Stewart and Packard, charging them with securities fraud and other violations of securities fraud (see: http://www.sec.gov/litigation/litreleases/2012/lr22365.htm). The SEC’s complaint alleged that, shortly after PPA entered bankruptcy, Stewart and Packard formed a new company, Apartments America, which was intended to replicate PPA’s business model. The complaint also alleged that Stewart and Packard made misleading statements to prospective investors about their track record and that of Apartments America, in an attempt to raise money for the new company. The SEC case has been partially settled, with Stewart and Packard agreeing to an injunction against committing further fraud and selling unregistered securities. The SEC is continuing to seek civil penalties.
Release No. 14-012
Former Tennessee Police Officer Sentenced for Assaulting an ArresteeRead the Press Release
Christopher Eugene Reynolds, 39, a former police officer of the Selmer, Tenn., Police Department (SPD), was sentenced today by 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, the Justice Department announced. Reynolds pleaded guilty Nov. 6, 2013. Judge Breen also sentenced Reynolds to a period of two years supervised release and a $100 special assessment.
“The majority of law enforcement officers do not abuse their authority, however, the defendant has admitted that he wrongfully assaulted an arrestee,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division. “The Justice Department will continue to vigorously prosecute officers who use their official position to violate the civil rights of those in their custody.”
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.
Reynolds was permitted to remain on bond and voluntarily surrender to a U.S. Bureau of Prisons facility to be determined in the near future.
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 El Paso County Sheriff Deputy Is Sentenced to 30 Months in Federal Prison as Part of Ponzi SchemeRead the Press Release
DENVER – David N. Hawkins, age 46, of Colorado Springs, Colorado, was sentenced yesterday by U.S. District Court Judge Robert E. Blackburn to serve 30 months in federal prison for wire fraud and money laundering, the United States Attorney’s Office, IRS – Criminal Investigation, and the Federal Bureau of Investigation announced. Following his prison sentence, Hawkins was ordered to spend 3 years on supervised release. Judge Blackburn also ordered Hawkins to pay $204,348.91 in restitution to the three remaining victims who have not been paid yet. He was also ordered to forfeit $17,000 which the government has agreed to apply towards victim restitution. Hawkins, who appeared at the sentencing hearing free on bond, was ordered to report to a U.S. Bureau of Prisons facility by noon on a designated date.
Hawkins was originally charged by Information on January 2, 2013. He waived his right to be charged by Indictment. He pled guilty on March 15, 2013 to one count of wire fraud and one count of money laundering. He was sentenced on February 4, 2014.
According to the stipulated facts contained in the plea agreement, as well as the information, Hawkins was employed as a deputy sheriff for the El Paso County, Colorado Sheriff's Office. In 2006 Hawkins attended training courses on how to trade profitably in foreign currencies and the exchanges of foreign currencies (hereinafter, the "FOREX" or "foreign currency exchange" markets). He also attempted to self-educate himself concerning trading in the FOREX markets.
From in or about November 2009, when Hawkins obtained his first FOREX trading client, and continuing through early December 2011, he obtained in excess of $1.2 million from his colleagues at the El Paso County Sheriff’s Office, other law enforcement officers in El Paso County, and their respective friends and relatives for the purpose of trading these funds in the FOREX markets on their behalf. He had approximately 73 investors, most investors using personal savings or retirement funds accumulated over the years as their source of the investment funds. Estimated losses to investors collectively total approximately $204,349.
Hawkins made several false representations to investors, including investors would be guaranteed a return of 10% per month (or 120% per annum). These representations were false and at no time were the investments ever profitable.
Over time Hawkins removed investor funds from FOREX trading accounts into bank accounts he controlled. He would then use these funds either for his own personal expenses, for personal investments unrelated to FOREX investments, or to fund payments to those of his investors who requested to withdraw their principal investments. According to government financial analysis, over the course of the scheme, in addition to making Ponzi scheme payments to investors, Hawkins diverted approximately $175,587 for his own uses and purposes. At one point Hawkins applied investor funds toward the purchase of two personal automobiles and in mid-2011, using in excess of at least $70,000 in investor funds to purchase franchises and to set up operations for two semi-professional indoor arena football teams, one located in Danville, Illinois, and the other in Mesquite, Texas. The teams never became operational, and Hawkins was unable to recoup these funds.
“In this case, a law enforcement officer defrauded his colleagues and the public,” said U.S. Attorney John Walsh. “The sentence imposed today justly reflects the severity of that misconduct and breach of trust.”
“The FBI is committed to investigating complex white-collar crimes, especially when someone misuses a position of trust to exploit innocent investors,” said FBI Denver Special Agent in Charge Thomas Ravenelle. “Hawkins abused his position, preyed on unknowing victims, and will now face the consequences of his actions.”
“All too often we hear of hard working Americans who lose their life savings to investment schemes; before you invest, protect yourself and seek out independent financial advice especially when a high rate of return is promised,” said Stephen Boyd, Special Agent in Charge for IRS Criminal Investigation, Denver Field Office.
This case was investigated by the Internal Revenue Service – Criminal Investigation (IRS-CI) and Federal Bureau of Investigation (FBI).
The case was prosecuted by Assistant U.S. Attorney Kenneth Harmon.
Former Commodities Trader Sentenced to 6½ Years in Prison for $5.3 Million Loss to Victims in $10 Million Fraud SchemeRead the Press Release
CHICAGO ― A former Chicago commodities trader was sentenced to 6½ years in federal prison for fraudulently obtaining more than $10 million and misappropriating a substantial portion of the money for his personal commodities futures trading, to make Ponzitype payments to investors, and to benefit himself and his family, resulting in a loss of $5.3 million. The defendant, BRADLEY SCHILLER, used some of the funds to pay for personal and family expenses, including a Range Rover, jewelry, condominium fees, housing rental fees for his mother-in-law, and country club fees.
Schiller, 37, of Chicago, was ordered today to pay $5.33 million in restitution by U.S. District Judge Elaine Bucklo, completing his sentencing that began last month. Schiller was ordered to begin serving his 78-month sentence in mid-April. He pleaded guilty to wire fraud last October.
According to court documents, Schiller represented himself as a successful commodities futures trader and raised more than $10 million between 2007 and 2012 from various victims, including The PrivateBank and Trust Company. Schiller lied to sources and prospective providers of funds about the profitability of his futures trading, the use of money he raised, the risks involved in providing him with money, his financial condition, and the status of the funds. He concealed the fraud scheme by making Ponzi-type payments to victims and by creating and distributing fraudulent documents, including phony commodities brokerage and bank account statements, false financial statements, and false tax forms. During the scheme, Schiller had trading losses of more than $1.5 million and needed to continually raise new funds to repay earlier providers of funds.
In obtaining a $2 million line of credit from The PrivateBank, Schiller falsely represented that he had a net worth of about $2.6 million and an overall balance in his commodities accounts in 2009 of approximately $5.5 million. Schiller knew, however, that he had a negative net worth at the time and his overall balance in his commodities accounts was nearly zero.
The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation. The Commodity Futures Trading Commission provided assistance.
The government was represented by Assistant U.S. Attorney Edward Kohler.
Former Claims Representative for the Social Security Administration Indicted for Stealing Personal Identifying Information and Money from AgencyRead the Press Release
BIRMINGHAM -- A federal grand jury has indicted a former Social Security Administration claims representative for using his position to steal identifying information and benefits from Social Security beneficiaries, announced U.S. Attorney Joyce White Vance and Social Security Administration, Office of Inspector General, Special Agent in Charge Guy Fallen.
A 10-count indictment filed in U.S. District Court charges ALEX JAMANE FLOWERS, 33, of Fairfield, with wire fraud, theft of government property and aggravated identity theft in a scheme to obtain money and property fraudulently from the SSA.
Flowers was a claims representative in the SSA Birmingham District Office between May 2013 and July 2013 when the crimes occurred. The duties of a claims representative include, but are not limited to, obtaining, clarifying and verifying information which will be used to analyze claims and make decisions regarding entitlement to benefits. His job responsibilities required that he have access to SSA databases, including the National Computer Center, which houses records for Social Security beneficiaries.
According to the indictment, Flowers used his access to accounts and identifying information of beneficiaries, including Social Security numbers, to cause SSA to issue payments to claimants and beneficiaries, and directed each payment into accounts that he controlled.
The indictment charges Flowers with seven counts of wire fraud for each interstate communication he made to cause a payment to be issued. He faces one count of theft of government property for embezzling money from the SSA, and two counts of aggravated identity theft for unlawfully using someone else's Social Security number in relation to the wire fraud and government property theft.
The maximum penalty for wire fraud is 20 years in prison and a $250,000 fine. The maximum penalty for theft of government property is 10 years in prison and a $250,000 fine. Aggravated identity theft carries a minimum two-year prison term and a $250,000 fine.
SSA-OIG investigated the case, which the United States Attorney’s Office for the Northern District of Alabama is prosecuting.
The public is reminded that an indictment contains only charges. A defendant is presumed innocent and it will be the government's responsibility to prove guilt beyond a reasonable doubt at trial.Former Chief Technology Officer Pleads Guilty to Embezzling More Than $150,000 from Non-ProfitUsed Money for Laptop, Jewelry, Cable Bills, and Other Personal ExpensesRead the Press Release
WASHINGTON – Paul F. Kaufman, 55, of Stafford, Va., pled guilty today to a federal charge stemming from his embezzlement of more than $150,000 from his former employer, a non-profit based in Washington, D.C., U.S. Attorney Ronald C. Machen Jr. announced.
Kaufman pled guilty in the U.S. District Court for the District of Columbia to a charge of theft concerning a program receiving federal funds. He is to be sentenced May 8, 2014 by the Honorable Ketanji Brown Jackson. Under federal sentencing guidelines, Kaufman faces a potential prison term of up to 30 months in prison and financial penalties. As part of his plea agreement, Kaufman has agreed to pay restitution and a forfeiture money judgment.
According to the government’s evidence, Kaufman oversaw and managed the technology department for a non-profit identified in court documents as “Non-Profit A,” an organization that received federal money. Kaufman was authorized to solicit and approve work from outside vendors and he had the authority to direct the accounting department to pay them. He also had the authority to make business-related charges on certain corporate credit cards.
Without the knowledge of “Non-Profit A,” Kaufman formed two companies. He then submitted invoices from these companies to the non-profit and authorized payments. All told, Kaufman generated $110,925 from this scheme between January 2004 and March 2012.
In addition, the government’s evidence showed, Kaufman embezzled at least $46,590 from the non-profit by using its corporate credit cards and accounting department to pay a variety of personal expenses. Among other things, the unauthorized personal charges included expenses for Kaufman’s home cable and Internet service, food, coffee, gas, parking, music downloads, and a personal laptop computer. At one point, in April 2012, a non-profit employee discovered that Kaufman had used a corporate credit card to charge about $288 at a jewelry store. When asked about the charge, Kaufman produced an altered receipt and falsely claimed that the invoice was for repairs to an employee’s iPhone.
Kaufman was terminated by the non-profit on May 4, 2012. Two days later, he sent an e-mail to the non-profit’s president and chief executive officer, apologizing for his actions and asking that he be allowed to reimburse the organization for the money that he embezzled.
The amount of restitution and forfeiture will be set by the Court. Kaufman contends that the total loss should be offset by the fair market value of work that he purportedly performed, and that the total he owes should be between $70,001 and $157,516.
In announcing the plea, U.S. Attorney Machen commended the work of the Metropolitan Police Department (MPD), which investigated the case. He also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Assistant U.S. Attorney Catherine K. Connelly, who is assisting with forfeiture issues. Finally, he commended Assistant U.S. Attorney Ephraim (Fry) Wernick, who is prosecuting the case.
14-033Former Chief Technology Officer Pleads GuiltyRead the Press Release
To Embezzling More Than $150,000 From Non-Profit
Used Money For Laptop, Jewelry, Cable Bills, and Other Personal ExpensesWASHINGTON – Paul F. Kaufman, 55, of Stafford, Va., pled guilty today to a federal charge stemming from his embezzlement of more than $150,000 from his former employer, a non-profit based in Washington, D.C., U.S. Attorney Ronald C. Machen Jr. announced.
Kaufman pled guilty in the U.S. District Court for the District of Columbia to a charge of theft concerning a program receiving federal funds. He is to be sentenced May 8, 2014 by the Honorable Ketanji Brown Jackson. Under federal sentencing guidelines, Kaufman faces a potential prison term of up to 30 months in prison and financial penalties. As part of his plea agreement, Kaufman has agreed to pay restitution and a forfeiture money judgment.
According to the government’s evidence, Kaufman oversaw and managed the technology department for a non-profit identified in court documents as “Non-Profit A,” an organization that received federal money. Kaufman was authorized to solicit and approve work from outside vendors and he had the authority to direct the accounting department to pay them. He also had the authority to make business-related charges on certain corporate credit cards.
Without the knowledge of “Non-Profit A,” Kaufman formed two companies. He then submitted invoices from these companies to the non-profit and authorized payments. All told, Kaufman generated $110,925 from this scheme between January 2004 and March 2012.
In addition, the government’s evidence showed, Kaufman embezzled at least $46,590 from the non-profit by using its corporate credit cards and accounting department to pay a variety of personal expenses. Among other things, the unauthorized personal charges included expenses for Kaufman’s home cable and Internet service, food, coffee, gas, parking, music downloads, and a personal laptop computer. At one point, in April 2012, a non-profit employee discovered that Kaufman had used a corporate credit card to charge about $288 at a jewelry store. When asked about the charge, Kaufman produced an altered receipt and falsely claimed that the invoice was for repairs to an employee’s iPhone.
Kaufman was terminated by the non-profit on May 4, 2012. Two days later, he sent an e-mail to the non-profit’s president and chief executive officer, apologizing for his actions and asking that he be allowed to reimburse the organization for the money that he embezzled.
The amount of restitution and forfeiture will be set by the Court. Kaufman contends that the total loss should be offset by the fair market value of work that he purportedly performed, and that the total he owes should be between $70,001 and $157,516.
In announcing the plea, U.S. Attorney Machen commended the work of the Metropolitan Police Department (MPD), which investigated the case. He also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Assistant U.S. Attorney Catherine K. Connelly, who is assisting with forfeiture issues. Finally, he commended Assistant U.S. Attorney Ephraim (Fry) Wernick, who is prosecuting the case.
14-33
Former Alabama KKK Leader Pleads Guilty to Cross Burning and Obstruction of JusticeRead the Press Release
Montgomery, Alabama - Steven Joshua Dinkle, 28, former Exalted Cyclops of the Ozark, Ala., chapter of the International Keystone Knights of the Ku Klux Klan (KKK), pleaded guilty in federal court yesterday to hate crime and obstruction of justice charges for his role in a 2009 cross burning, the Justice Department and the U.S. Attorney’s Office for the Middle District of Alabama announced.
According to documents filed with the court, Dinkle and one of his KKK recruits, Thomas Windell Smith, met at Dinkle’s home on May 8, 2009, and decided to burn a cross in a local African-American neighborhood.
Dinkle constructed a wooden cross about six feet tall, wrapped jeans and a towel around it to make it more flammable and loaded it into Smith’s truck. Around 8:00 p.m., Dinkle and Smith drove to an African-American neighborhood in Ozark. Dinkle unloaded the cross at the entrance to the community and dug a hole in the ground, then poured fuel on the cross, stood it up in the hole in view of several houses and set it on fire. Dinkle and Smith then drove away.
When questioned by local investigators, Dinkle falsely denied his involvement in the incident and stated that he had resigned his office and withdrawn from the KKK months before the cross burning. When approached by the FBI, Dinkle again lied and told a special agent that he had been at home with his girlfriend when the cross burning occurred. He further claimed that he did not know one of his superiors in the KKK at the time of the cross burning. During the plea hearing, Dinkle admitted that in burning the cross, he intended to scare and intimidate residents of the African-American community by threatening the use of force against them. He further admitted that he burned the cross because of the victims’ race and color and because they were occupying homes in that area.
Dinkle pleaded guilty to one count of conspiracy to violate housing rights, one count of criminal interference with the right to fair housing and two counts of obstruction of justice.
Dinkle faces a statutory maximum sentence of 10 years in prison and a $250,000 maximum fine on the conspiracy and criminal interference counts and a statutory maximum sentence of 25 years in prison and a $500,000 maximum fine for obstructing justice by making false statements to both local investigators and federal agents. Sentencing for Dinkle has not yet been scheduled.
Dinkle’s co-conspirator, Smith, pleaded guilty to one count of conspiracy to violate housing rights in December 2013. He is scheduled to be sentenced on March 11, 2014.
“By targeting the victims with a blazing cross in the night, one of the most threatening racial symbols in our nation’s history, the defendant attempted to terrorize a neighborhood because of the color of the residents’ skin,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division. “Prosecuting these racially motivated crimes will continue to be a priority for the Department of Justice.”
“As a society we hope to never see this type of hate,” said U.S. Attorney George L. Beck Jr. for the Middle District of Alabama. “We will continue to prosecute those that commit these horrible acts of hate to the fullest extent of the law.”
This case was investigated by the FBI, with the assistance of the Dale County Sheriff’s Office and the Ozark Police Department. The case is being prosecuted by Assistant U.S. Attorney Jerusha T. Adams of the Middle District of Alabama and Trial Attorney Chiraag Bains of the Civil Rights Division.
PRESS CONTACT: Clark Morris
Email: [email protected]
Telephone: (334) 551-1755
Fax: (334) 223-7617Five Individuals Charged with Immigration FraudRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Alysa D. Erichs, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI), Wendy Bashnan, Special Agent in Charge, Miami Field Office, U.S. Department of State’s Diplomatic Security Service (DSS), Jose A. Gonzalez, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), and Michael B. Steinbach, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, announce the arrests of Goran Bjelovic, 44, of Aventura, Srdjan Jovcic, 50, of Wallington, New Jersey, and Hollywood, Florida, Branko Likic, 35, of Fort Lauderdale, Heather Bennett, 30, of Fort Lauderdale, and Ljiljana Aleksic, 54, of Orlando. All five defendants have been charged with various violations of fraud and misuse of visa, permits and other documents, in violation of 18 U.S.C. § 1546(a), marriage fraud, in violation of 8 U.S.C. § 1325(c), and/or conspiracy to commit such, in violation of 18 U.S.C. § 371.
Bjelovic, Likic and Bennett were all arrested this morning and made their initial appearances at 11:00 a.m. before U.S. Magistrate Judge Patrick Hunt in Fort Lauderdale. Jovcic, who was arrested in Wallington, New Jersey, and Aleksic, who was arrested in Orlando, will make their initial appearances in the respective districts.
According to the indictment that was unsealed this morning, Jovcic used and possessed a United States passport that had been procured through marriage fraud and the concealment of prior arrest and conviction history. Specifically, he is charged with using such passport to obtain a Florida driver license in 2009 and to enter the United States at the Miami International Airport on two separate occasions in 2011.
Bjelovic, Jovcic and Aleksic are charged with conspiracy to commit marriage fraud and fraud and misuse of visas, permits and other documents in connection with a sham marriage between Bjelovic and Aleksic. According to the indictment, Bjelovic and Aleksic were married in Orlando, Florida on November 16, 2010, shortly after Aleksic took the civics test to become a U.S. citizen. Aleksic then filed a Petition for Alien Relative on behalf of Bjelovic. Jovcic filed, on behalf of Bjelovic, an Affidavit of Support. Bjelovic is also charged with using and possessing a Form I-512, Authorization for Parole of an Alien, that had been procured through marriage fraud and the concealment of prior arrest and conviction history. Specifically, he is charged with using such Authorization to enter the United States at the Miami International Airport in 2011 and to obtain a Florida driver license in 2012.
Jovcic, Likic and Bennett are charged with a conspiracy to commit marriage fraud and fraud and misuse of visas, permits and other documents in connection with a fake sham marriage between Likic and Bennett. According to the indictment, in September 2010, Bennett traveled from South Carolina to Florida and she and Likic signed a marriage license in Broward County. Subsequently, in January 2011, May 2011 and March 2011, Bennett filed a Petition for Alien Relation on behalf of Likic.
If convicted of the conspiracies set forth in the indictment, the defendants face a statutory maximum term of five years in prison and a fine of $250,000. If convicted of the possession and use of a passport or other document charge set forth in the indictment, defendants Bjelovic and Jovcic face a statutory maximum term of 10 years in prison and a fine of $250,000.
Mr. Ferrer commended the investigative efforts of ICE-HSI, DSS, IRS-CI and FBI. Mr. Ferrer would also like to thank the Broward Sheriff’s Office, Drug Enforcement Administration, Department of Commerce, and the U.S Attorneys’ Offices for the District of New Jersey and the Middle District of Florida for their assistance. The case is being prosecuted by Assistant U.S. Attorney Cynthia Stone.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Federal Grand Jury Criminal Indictments AnnouncedRead the Press Release
TULSA, Okla. — The results of the February 2014 Federal Grand Jury were announced today by Danny C. Williams Sr., United States Attorney for the Northern District of Oklahoma.
The following named individuals have been charged with a federal crime or crimes by the return of an indictment by the Grand Jury. The return of an indictment is a method of informing the defendant of alleged violations which must be proven in a court of law beyond a reasonable doubt to overcome the defendant’s presumption of innocence.
Francisco Cedeno-Esquivel. Alien in the United States After Deportation. Cedeno-Esquivel, 33, was arrested in Tulsa County and is charged with having returned to the United States unlawfully after being deported in May 2011 near Hidalgo, Texas. If convicted, the maximum penalty would be twenty (20) years imprisonment and/or a fine up to $250,000. The U.S. Immigration and Customs Enforcement is the lead agency.
Jose Diaz-Hernandez. Alien in the United States After Deportation. Diaz-Hernandez, 42, was arrested in Tulsa County and is charged with having returned to the United States unlawfully after being deported in October 2013 near Brownsville, Texas. If convicted, the maximum penalty would be twenty (20) years imprisonment and/or a fine up to $250,000. The U.S. Immigration and Customs Enforcement (ICE) is the lead agency.
Gelvin Garcia-Alvarado. Alien in the United States After Deportation. Garcia-Alvarado, 31, was arrested in Tulsa County and is charged with having returned to the United States unlawfully after being deported in April 2008 near Alexandria, Louisiana. If convicted, the maximum penalty would be twenty (20) years imprisonment and/or a fine up to $250,000. The U.S. Immigration and Customs Enforcement (ICE) is the lead agency.
Cesario Hernandez-Aldaba. Alien in the United States After Deportation. Hernandez-Aldaba, 52, was arrested in Tulsa County and is charged with having returned to the United States unlawfully after being deported in April 2012 near Del Rio, Texas. If convicted, the maximum penalty would be twenty (20) years imprisonment and/or a fine up to $250,000. The U.S. Immigration and Customs Enforcement (ICE) is the lead agency.
Hunter Lee Hines. Threats Against the President. Hines, 18, of Claremore, Okla., an inmate at Rogers County Jail, is charged with mailing a threatening letter on December 16, 2013 to United States President Barack Obama. If convicted, Hines would face not more than five (5) years imprisonment and/or a $250,000 fine. The United States Secret Service is the lead agency.
Jose Guadalupe Reyes-Banuelos. Alien in the United States After Deportation. Reyes-Banuelos, 40, was arrested in Tulsa County and is charged with having returned to the United States unlawfully after being deported in February 2010 near San Ysidro, California. If convicted, the maximum penalty would be twenty (20) years imprisonment and/or a fine up to $250,000. The U.S. Immigration and Customs Enforcement (ICE) is the lead agency.
Dominique Amoia McDowell, II. Robbery in Indian Country (Count One) and Brandishing a Firearm During and in Relation to a Crime of Violence (Count Two). McDowell, 19, of Tulsa, is charged in a two count Indictment with brandishing a pistol while robbing an Indian female of $600 in Indian Country. If convicted, Robbery in Indian Country carries a maximum penalty of fifteen (15) years in prison and/or a fine of $250,000. Brandishing a firearm during and in relation to a crime of violence carries a statutory mandatory minimum penalty of seven (7) years imprisonment and/or a fine of $250,000. The Bureau of Indian Affairs-Office of Justice Services and the Osage Nation Police Department jointly investigated this matter. This matter is in Federal court because the alleged crime occurred in Indian Country within the Northern District of Oklahoma.
Michael Medlock. Bank Fraud and Money Laundering. Medlock, 57, of Tulsa, is charged with defrauding over $2,000,000 from ONB Bank & Trust Company between December 2007 and April 2011. As part of the scheme, Medlock, owner of Klutts Equipment, Inc., and Vincens Omnibus, LLC., diverted account receivable payments into personal accounts. If convicted, bank fraud carries a maximum penalty of thirty (30) years imprisonment and/or a fine of $1,000,000 on each count. The penalty for money laundering is not more than ten (10) years imprisonment and/or a fine of $250,000. The Federal Bureau of Investigation is the lead agency.
Jose De Jesus Salinas-Ramirez. Alien in the United States After Deportation. Salinas-Ramirez, 24, was arrested in Tulsa County and is charged with having returned to the United States unlawfully after being deported in July 2012 near Calexico, California. If convicted, the maximum penalty would be twenty (20) years imprisonment and/or a fine up to $250,000. The U.S. Immigration and Customs Enforcement (ICE) is the lead agency.
Thomas Kevin Vaughn. Embezzlement of Mail Matter. Vaughn, 49, of Nowata, Oklahoma, a United States Postal Service employee, is charged with embezzling letters and mail matter on December 18, 2013. If convicted, Vaughn would face a maximum penalty of five (5) years imprisonment and/or a fine up to $250,000. The United States Postal Service-Office of the Inspector General is the lead agency.
Damien Dinchie Wardell. Sex Trafficking of a Child (Count One) and Sex Trafficking by Force, Fraud, and Coercion (Count Two). Wardell, 39, of Tulsa, is charged in a two count Indictment with crimes pertaining to the sex trafficking of a child by force, fraud, and coercion in November 2013. Sex Trafficking of a Child carries a statutory mandatory minimum penalty of ten (10) years imprisonment and/or a fine of $250,000. Sex Trafficking by Force, Fraud, and Coercion carries a statutory mandatory minimum of not less than fifteen (15) years imprisonment and/or a fine of $250,000. The Tulsa Police Department investigated this matter.
Terrance Cortez Whitfield. Sex Trafficking of a Child (Count One), Interstate Travel and Transportation in Aid of Racketeering Enterprises (Count Two), and Possession of Child Pornography (Count Three). Whitfield, 36, of Muskogee, is charged in a three count Indictment with sex trafficking of a child and possessing child pornography. If convicted, Sex Trafficking of a Child carries a statutory mandatory minimum penalty of ten (10) years in imprisonment and/or a fine of $250,000. Interstate Travel and Transportation in Aid of Racketeering Enterprises carries a penalty of up to five (5) years imprisonment and/or a fine of $250,000. Possession of Child Pornography carries a maximum penalty of ten (10) years imprisonment and/or a fine of $250,000. The Tulsa Police Department investigated this matter.
Fargo Man Pleads Guilty to Possession of Explicit Material Involving MinorsRead the Press Release
FARGO- U.S. Attorney Timothy Q. Purdon announced that on Feb. 5, 2014, Jared Tyler Allen, 27, Fargo, N.D., pleaded guilty to receipt of materials involving the sexual exploitation of minors and possession of materials involving the sexual exploitation of minors. U.S. District Judge Ralph R. Erickson is presiding over the case.
Allen came to the attention of law enforcement after an agent with the North Dakota Bureau of Criminal Investigation, assigned to the Internet Crimes Against Children Task Force, discovered a computer geographically located in North Dakota that was sharing child pornography in a peer-to-peer (P2P) network.
Homeland Security Investigators eventually traced the computer to Allen’s apartment located in South Fargo where task force officers seized two computers, including the computer that was previously seen with child pornography on the P2P network. A subsequent forensic examination of the two computers revealed more than 3,400 images and 175 videos depicting child pornography. Receipt of materials involving the sexual exploitation of minors carries a minimum-mandatory sentence of five years in prison and a maximum penalty of 20 years in prison. Possession of materials involving the sexual exploitation of minors carries a maximum penalty of 10 years in prison.
The case was investigated by Homeland Security Investigations, North Dakota Bureau of Criminal Investigation, and the Fargo Police Department.
Judge Erickson set sentencing for May 12, 2014, at 2:15 p.m. in U.S. District Court in Fargo, N.D.
Assistant U.S. Attorney Jennifer Klemetsrud Puhl is prosecuting the case.
This case was prosecuted as part of Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the U.S. Attorneys’ Offices, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.