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Monday 9 December 2013
Alabama Man Pleads Guilty for His Role in Racially Motivated Cross BurningRead the Press Release
Montgomery, Alabama - Thomas Windell Smith, 24, of Dothan, Alabama, pleaded guilty in federal court last Friday to one count of conspiring to violate housing rights. The charge relates to his participation in a cross burning at the entrance to an African American community in Ozark, Alabama, on May 8, 2009.
During his plea, Smith admitted that he and a co-conspirator agreed to burn a cross together in order to intimidate the African American residents. Using materials from around his home, the co-conspirator constructed a wooden cross about six feet tall and wrapped cloth around the cross. The co-conspirator loaded the cross into Smith’s truck. With Smith driving and the co-conspirator providing directions, the two men transported the cross to a predominantly African American residential neighborhood. They unloaded the cross at the entrance to the community. There, the co-conspirator poured fuel on the cross, stood it up in view of several houses, and set it on fire.
“The defendant’s crime illustrates the damage hate crimes can do to entire communities, making people feel unsafe in their own homes,” said Jocelyn Samuels, Acting Assistant Attorney General for Civil Rights. “We’d like to think these offenses are a thing of the past, but the reality is that they happen here in the 21st century. The Justice Department is committed to stamping them out.”
“This defendant not only committed a federal crime, but committed a contemptible action of hate,” stated U.S. Attorney Beck. “Citizens in the Middle District of Alabama should not and will not tolerate such actions. I hope this prosecution sends a clear message that these hateful demonstrations will not be tolerated and will be prosecuted to the fullest extent of the law.”
Sentencing is yet to be scheduled. Smith faces a maximum penalty of ten years in prison and a fine of up to $250,000.
This case was investigated by the Federal Bureau of Investigation, 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 Justice Department’s Civil Rights Division.
PRESS CONTACT: Clark Morris
Email: [email protected]
Telephone: (334) 551-1755
Fax: (334) 223-761718 Charged as Result of Federal Investigation into Corruption and Civil Rights Abuses by Members of L.A. County Sheriff’s DepartmentRead the Press Release
Current and Former Deputies Charged with Federal Crimes, including Illegal Beatings of Jail Inmates and Obstruction of Justice
LOS ANGELES – Five criminal cases that charge a total of 18 current or one-time deputy sheriffs of various ranks were unsealed today as part of ongoing and wide-ranging FBI investigation into allegations of civil rights violations and corruption involving members of the Los Angeles County Sheriff’s Department. Four grand jury indictments and one criminal complaint allege crimes that include unjustified beatings of jail inmates and visitors at downtown Los Angeles jail facilities, unjustified detentions and a conspiracy to obstruct a federal investigation into misconduct at the Men’s Central Jail.
Federal authorities announced the charges after 16 of the defendants were taken into custody earlier today. Those defendants are expected to be arraigned on the charges this afternoon in United States District Court in Los Angeles.
“The five cases allege a wide scope of illegal conduct,” said United States Attorney André Birotte Jr. “This investigation started by focusing on misconduct in county jails, and we uncovered examples of civil rights violations that included excessive force and unlawful arrests.
“Our investigation also found that these incidents did not take place in a vacuum – in fact, they demonstrated behavior that had become institutionalized. The pattern of activity alleged in the obstruction of justice case shows how some members of the Sheriff’s Department considered themselves to be above the law. Instead of cooperating with the federal investigation to ensure that corrupt law enforcement officers would be brought to justice, the defendants in this case are accused of taking affirmative steps designed to ensure that light would not shine on illegal conduct that violated basic constitutional rights.”
Bill Lewis, the Assistant Director in Charge of the FBI’s Los Angeles Field Office, commented: “The defendants charged in this case are facing serious allegations, including violating the trust of the public they were sworn to serve. It is equally as important to point out that these charges should not reflect on the thousands of men and women of the Sheriff’s Department who proudly serve the citizens of Los Angeles County, and who partner with the FBI in a variety of crime areas.”
This morning, FBI agents took into custody 16 of the 18 defendants named in four indictments and one criminal complaint. Most of the defendants were arrested at various LASD facilities.
The five cases, which are part of an ongoing investigation, were unsealed this morning.
United States v. Brunsting and Branum, CR13-573
Two deputy sheriffs – Bryan Brunsting and Jason Branum – are charged in a six-count indictment with civil rights violations and making false statements in reports. Brunsting, who was a training officer, is charged in relation to an incident in which an inmate allegedly was assaulted and suffered bodily injury. Both Brunsting and Branum are charged in another assault. The victims were inmates at the Twin Towers Correctional Facility, where both deputies worked. Following the two incidents, the indictment alleges that Brunsting used deputies he was training to file reports that covered up the abuse.
United States v. Gonzalez, et al., CR13-574
This indictment charges a sergeant and four deputies with civil rights violations that allege they arrested or detained five victims – including the Austrian consul general – when they arrived to visit inmates at the Men’s Central Jail (MCJ) in 2010 and 2011.
The lead defendant in this indictment – Sergeant Eric Gonzalez, who was a supervisor in the MCJ visiting center, but no longer works for LASD – fostered an atmosphere “that encouraged and tolerated abuses of the law, including through the use of unjustified force and unreasonable searches and seizures by deputy sheriffs he supervised,” according to the indictment.
Each of the four deputies – Sussie Ayala, Fernando Luviano, Pantamitr Zunggeemoge and Noel Womack – is charged with participating in at least one of the four incidents in which victims allegedly suffered civil rights violations. In one incident, a man suffered a broken arm and a dislocated shoulder that has left him permanently disabled. In another incident, the Austrian consul general and her husband were handcuffed and detained.United States v. Thompson, et al., CR13-819
This six-count indictment that alleges a broad conspiracy to obstruct justice charges seven sworn members of the LASD. This case developed when deputies assigned to the Men’s Central Jail – including Lieutenant Gregory Thompson, who oversaw LASD’s Operation Safe Jails Program, and Lieutenant Stephen Leavins, who was assigned to the LASD’s Internal Criminal Investigations Bureau – learned that an inmate was an FBI informant and was acting as a cooperator in the FBI’s corruption and civil rights investigation.
After learning that the inmate received a cellular phone from a deputy sheriff who took a bribe and that the inmate was part of a civil rights investigation, those allegedly involved in the obstruction scheme took affirmative steps to hide the cooperator from the FBI and the United States Marshals Service, which was attempting to bring the inmate to testify before a federal grand jury in response to an order issued by a federal judge. As part of the conspiracy, the deputies allegedly altered records to make it appear that the cooperator had been released. They then re-booked the inmate under a different name, and then told the cooperator that he had been abandoned by the FBI.
Over the course of several weeks, the deputy sheriffs allegedly also attempted to obtain an order from a Los Angeles Superior Court judge that would have compelled the FBI to turn over information about its investigation to LASD. After the judge refused to issue such an order, according to the indictment, two LASD sergeants who are charged in this case nevertheless confronted an FBI special agent at her residence in an attempt to intimidate her into providing details about the investigation. The sergeants falsely told the special agent and her supervisor that they were obtaining a warrant for her arrest, according to the indictment.
Thompson no longer works for LASD. The other deputies named in this indictment are Gerard Smith, Mickey Manzo, and James Sexton, who were assigned to the Operation Safe Jails Program; and Scott Craig and Maricella Long, who were LASD sergeants within the Internal Criminal Investigations Bureau.
United States v. Piquette, CR13-821
Deputy Richard Piquette is charged in the fourth indictment with illegally building and possessing an assault rifle. The indictment charges Piquette with possessing an unregistered Noveske Rifleworks N-4 .223 caliber rifle with a barrel length of less than 16 inches. The second count in the indictment charges Piquette with manufacturing the Noveske rifle. Piquette, who is currently on leave with LASD, was previously assigned to the Twin Towers Correctional Facility. The investigation in this case was conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives.
United States v. Khounthavong, et al., 13-3105M
The fifth case unsealed today is a criminal complaint that charges three LASD deputies, all of whom are brothers, with conspiracy to make false statements to two banks in connection with a “buy-and-bail” mortgage fraud scheme. The complaint alleges that the three deputies – Billy Khounthavong, Benny Khounthavong, and Johnny Khounthavong – made false statements and reports to Flagstar Bank to purchase a 3,900-square-foot residence in Corona. The brothers then made additional false statements and reports to Bank of America in relation to another large residence they owned. The brothers walked away from – or “bailed” on – that home in which they were “under water,” meaning they owed substantially more than the residence was worth. As a result of the scheme, the brothers allegedly avoided more than $340,000 of unpaid mortgage debt. Benny Khounthavong and Johnny Khounthavong are assigned to LASD jail facilities.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty.
The five cases announced today are part of an ongoing investigation being conducted by the Federal Bureau of Investigation.
Release No. 13-143
Friday 6 December 2013
Week in Review – South BendRead the Press Release
South Bend, Indiana —The United States Attorney’s Office announced the following activity in Federal Court:
PLEAS:
Tyrone Franklin, 34, of Michigan City, Indiana pled guilty before Magistrate Judge Christopher A. Nuechterlein to the felony offense of being a felon in possession of a firearm.Magistrate Nuechterlein is recommending that the district court accept the tendered guilty plea.Parties have 14 days in which to object to the magistrate judge’s recommendation. This charge was filed as a result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives.Sentencing has been set for 3/6/2014.This case is being prosecuted by Assistant United States Attorney Frank Schaffer.
Brian W. Lindsey, 26, of La Porte, Indiana, pled guilty before Magistrate Judge Christopher A. Nuechterlein to the felony offense of passing counterfeit Federal Reserve notes.Magistrate Nuechterlein is recommending that the district court accept the tendered guilty plea.Parties have 14 days in which to object to the magistrate judge’s recommendation. This charge was filed as a result of an investigation by US Secret Service.Sentencing has been set for 3/6/2014.This case is being prosecuted by Assistant United States Attorney John Maciejczyk.
If convicted in court, any specific sentence to be imposed will be determined by the judge after a consideration of federal sentencing statutes and the Federal Sentencing Guidelines.
DISPOSITIONS:
Frank Piatek, 72, of Elkhart, Indiana was sentenced by District Judge Robert L. Miller, Jr. to 15 months imprisonment with 1 year supervised release after pleading guilty to the felony offense of failure to register as a sex offender.According to documents filed in this case, upon his release from prison in Florida for child molesting, Piatek moved to Elkhart.Piatek took up residence at the Faith Mission, which also houses families with children.Piatek did not register in Indiana as a sex offender. This case was the result of an investigation by the US Marshals Service.This case was prosecuted by Assistant United States Attorney John Maciejczyk.
Dale Marshall, 54, of Logansport, Indiana was sentenced by District Judge Robert L. Miller, Jr. to 6 months imprisonment with 2 of years supervised release (6 months of which under home detention) after pleading guilty to the felony offense of using a communication facility in causing or facilitating another felony.According to documents filed in this case, in July 2012, Marshall used a phone to facilitate a marijuana transaction.This case was the result of an investigation by Drug Enforcement Administration.This case was prosecuted by Assistant United States Attorney Frank Schaffer.
James Ryans, 41, of Union, Michigan was sentenced by District Judge Robert L. Miller, Jr. to 87 months imprisonment (27 months on his guilty plea to one count of making false statements to federal officers and 60 months on his guilty plea to one count of interstate travel in aid of racketeering, which sentence is consecutive to his 27 month sentence) and 3 years supervised release.According to documents filed in this case, Ryans participated in an international drug trafficking business. He helped distribute large quantities of cocaine, marijuana, and methamphetamine. When summoned to a federal grand jury in 2009, Ryans lied to investigators after volunteering to speak to them. This case was the result of an investigation by the Federal Bureau of Investigation.This case was prosecuted by Assistant United States Attorney William Grimmer.
Week in Review – HammondRead the Press Release
Hammond, Indiana - The United States Attorney’s Office announced the following activity in Federal Court:
INDICTMENT:
An Indictment returned on November 21, 2013 charged five individuals with identity theft:
Alexis Young, 31, of Hammond, Indiana was charged with one count of conspiracy to commit identity theft, three counts of aggravated identity theft, one count of HIPPA violation and six counts of unlawful use and disclosure of Social Security Numbers;
Angela Young, 41, of Chicago Heights, Illinois was charged with one count of conspiracy to commit identity theft and three counts of aggravated identity theft;
Cynthia Mullins, 45, of Gary, Indiana was charged with one count of conspiracy to commit identity theft;
Montrease Young, 30, of Chicago, Illinois was charged with one count of conspiracy to commit identity theft; and
Chavon Jackson, 27, of Hammond, Indiana was charged with one count of conspiracy to commit identity theft.
These charges were filed as the result of an investigation by the United States Postal Service-Office of the Inspector General.This case has been assigned to and will be prosecuted by Assistant United States Attorney Toi Houston.
The United States Attorney's Office emphasized that an Indictment is merely an allegation and that all persons charged are presumed innocent until and unless proven guilty in court.
PLEAS:
Claude Hunter, 57, of Schererville, Indiana, pled guilty before Chief Judge Philip Simon to the felony offense of sale of a firearm to a known felon.Sentencing has been set for 3/6/14.This charge was filed as a result of an investigation by the Federal Bureau of Investigation.This case is being prosecuted by Assistant United States Attorney Joshua Kolar.
Kenneth Sandidge, 54, of Gary, Indiana, pled guilty before Senior District Judge Rudy Lozano to the felony offense of possession of a firearm by a convicted felon.This charge was filed as a result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Lake County Police Department.This case is being prosecuted by Assistant United States Attorney Nicholas Padilla.
Terrance Winton, 49, of Merrillville, Indiana, pled guilty before District Judge Joseph Van Bokkelen to the felony offense of possession with the intent to distribute crack cocaine.This charge was filed as a result of an investigation by the Federal Bureau of Investigation GRIT Task Force.This case is being prosecuted by Assistant United States Attorney Jennifer Chang-Adiga.
George Van Til, 66, of Merrillville, Indiana, pled guilty before Senior District Judge James Moody to six counts of the felony offense of wire fraud.These charges were filed as a result of an investigation by the Federal Bureau of Investigation.This case is being prosecuted by Assistant United States Attorneys Philip Benson and Joshua Kolar.
Ronald Holmes, 47, of Griffith, Indiana, pled guilty before Chief Judge Philip Simon to the felony offense of violating a requirement of a pretreatment program approved by the EPA in that he caused the discharge of pollutants into the Hammond Sanitary District’s publicly-owned treatment works when he had not been issued a permit to do so.NH Environmental Group, Inc. also plead guilty to a misdemeanor information filed at the same time charging that they introduced and caused to be introduced, hauled and trucked pollutants into a publicly owned treatment works.Sentencing has been set for 3/14/14.This charge was filed as a result of an investigation by the Environmental Protection Agency.This case is being prosecuted by Assistant United States Attorney Toi Houston.
Tonja Muldrow, 34, of Michigan City, Indiana, pled guilty before Chief Judge Philip Simon to the felony offense of possession of a firearm by a convicted felon.This charge was filed as a result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Michigan City Police Department.This case is being prosecuted by Assistant United States Attorney Dean Lanter.
Kevin Wilkerson, 39, formerly of Gary and Crown Point, Indiana, pled guilty before District Judge Joseph Van Bokkelen to the felony offense of bank robbery.This charge was filed as a result of an investigation by the Federal Bureau of Investigation and the Gary Police Department.This case is being prosecuted by Assistant United States Attorney Diane Berkowitz.
If convicted in court, any specific sentence to be imposed will be determined by the judge after a consideration of federal sentencing statutes and the Federal Sentencing Guidelines.
DISPOSITIONS:
Daniel Rivas, 34, of East Chicago, Indiana, was sentenced by Senior District Judge James Moody to 46 months imprisonment and 4 years of supervised release after pleading guilty to the felony offense of possession with the intent to distribute marijuana.According to documents filed in this case, Rivas took delivery of a shipment of drugs originating in Brownsville, Texas destined for Griffith, Indiana.The shipment contained 8 boxes, each containing approximately 35-50 pounds of marijuana.This case was the result of an investigation by the Federal Bureau of Investigation GRIT Task Force.This case was prosecuted by Assistant United States Attorney Nicholas Padilla.
Roman Perez, 42, of Crown Point, Indiana, was sentenced by Chief Judge Philip Simon to24 months of probation, 50 hours of community service and restitution of $26,417 after pleading guilty to the felony offense of making false statements on a tax return and making false statements in a bankruptcy proceeding.According to documents filed in this case, Perez understated his total taxable income by approximately $110,000 of which approximately $80,000 constituted payments from both the Lake County Treasurer and the Lake County Sheriff’s Commissary Fund to Roman Art Inc., a graphic design business owned by Perez.Perez also understated his gross income for the year 2009 by an amount in excess of $40,000 in a bankruptcy proceeding.This case was the result of an investigation by the Internal Revenue Service and the Federal Bureau of Investigation.This case was prosecuted by Assistant United States Attorney Philip Benson.
Lakita Lee, 36, of Gary, Indiana, was sentenced by District Judge Joseph Van Bokkelen to 16 months of probation (10 months of this probationary period to be served on home detention), restitution of $32,608 to the Social Security Administration and a $1,000 fine after pleading guilty to the felony offense of theft of government property.According to documents filed in this case, Lee was a Social Security representative payee for Marva Davis.Lee did not report to Social Security that Davis had died and continued to complete paperwork, signed under oath, stating that she was using the disability benefit funds for the benefit of Davis, instead Lee was using the funds for her own benefit.This case was the result of an investigation by the Social Security Administration-Office of the Inspector General.This case was prosecuted by Assistant United States Attorney Gary Bell.
Jose Lechuga-Carrasco, 39, of Cicero, Illinois, was sentenced by Chief Judge Philip Simon to 37 months of imprisonment and 2 years of supervised release after pleading guilty to the felony offense of possession with the intent to distribute and distributing cocaine.According to documents filed in this case, law enforcement found approximately 500 grams of cocaine concealed in Lechuga-Carrasco’s car after a traffic stop in Hammond, Indiana.This case was the result of an investigation by the Drug Enforcement Administration and the Hammond Police Department.This case was prosecuted by Assistant United States Attorney Joshua Kolar.
David Hernandez-Cervantes, 53, of Chicago, Illinois, was sentenced by Senior District Judge James Moody to 70 months imprisonment and 2 years of supervised release after pleading guilty to the felony offense of possession with the intent to distribute methamphetamine.According to documents filed in this case, Hernandez-Cervantes attempted to sell kilogram quantities of 99.5% pure methamphetamine. He was working with others in a large-scale distribution of an extremely dangerous drug. This case was the result of an investigation by the Drug Enforcement Administration.This case was prosecuted by Assistant United States Attorney Joshua Kolar.
Roberto Ramirez Cardona, 55, of Hammond, Indiana, was sentenced by Senior District Judge James Moody to 70 months imprisonment and 2 years of supervised release after pleading guilty to the felony offense of possession with the intent to distribute heroin.According to documents filed in this case, US Postal inspectors identified a package as possibly containing narcotics based on size, weight, shape and mailing origin.After confirming this suspicion, the package was wired with a device that would allow law enforcement to track its location and opening.When the package was delivered and the transmitter indicated the package had been opened, Federal Agents executed a search warrant at Cardona’s residence, finding, in addition to the heroin, marijuana, $10,000.00 dollars in US currency, multiple cell phones and wire receipts. This case was the result of an investigation by the United States Postal Service-Office of the Inspector General.This case was prosecuted by Assistant United States Attorney Nicholas Padilla.
Matthew Jasek, 31, of Demotte, Indiana, was sentenced by Chief Judge Philip Simon to 51 months imprisonment and 5 years of supervised release after pleading guilty to the felony offense of possession of child pornography.According to documents filed in this case, Jasek admitted that he possessed the equivalent of over 600 child pornography images and that he distributed some of the material through a file sharing program. He further admitted that he had been interested in child pornography for eight years, had received and possessed child pornography through several peer to peer file sharing programs, and had searched for child pornography as often as twice a week. This case resulted from an investigation by members of the Indiana Internet Crimes Against Children Task Force, including the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations.This case was prosecuted by Assistant United States Attorney Thomas McGrath.
Week in Review – Fort WayneRead the Press Release
Fort Wayne, Indiana —The United States Attorney’s Office announced the following activity in Federal Court:
DISPOSITIONS:
Glenda Brickey, 28, of Ligonier, Indiana was sentenced by District Judge Theresa L. Springmann to 37 months imprisonment with 2 years of supervised release after pleading guilty to the felony offense of knowingly or intentionally possessing with the intent to distribute methamphetamine.According to documents filed in this case, in December 2012, during a traffic stop, local law enforcement noticed suspicious behavior by Brickey.A drug canine alerted officers to a narcotic presence which led to a search of Brickey.During the search, a small amount of methamphetamine and a glass smoking pipe were discovered as well as additional drug evidence in the vehicle. This case was the result of an investigation by the Drug Enforcement Administration and was prosecuted by Assistant United States Attorney Anthony Geller.
Virginia Man Sentenced for <br /> Conducting $270 Million Investment Fraud SchemeRead the Press Release
The owner of a Virginia-based investment firm was sentenced today to serve 144 months in prison for orchestrating a $270 million stock loan scheme that defrauded his clients of more than $35 million.
Acting Assistant Attorney General Mythili Raman of the Department of Justice’s Criminal Division, Acting United States Attorney Dana J. Boente of the Eastern District of Virginia and Assistant Director in Charge Valerie Parlave of the FBI’s Washington Field Office made the announcement after sentencing by U.S. District Judge Gerald Bruce Lee of the Eastern District of Virginia.
William Dean Chapman, 44, of Sterling, Va., pleaded guilty to one count of wire fraud on May 23, 2013. Chapman was the founder and owner of Alexander Capital Markets (ACM), whose primary business was to offer a financial product that provided customers with a purportedly fully hedged loan at an above-market rate of interest against a customer’s securities. This served as collateral for the transaction for a percentage – typically between 85 percent and 90 percent – of the securities’ value. For example, in exchange for a customer’s Apple stock, ACM would provide a cash loan to that customer worth 85 percent or 90 percent of the stock’s value. After a period of time – between two and seven years, and typically three years – the customer could receive back their securities, or the equivalent cash value, if they repaid the balance of the loan plus accrued interest. Alternatively, because the loans were non-recourse, the customer could walk away at the end of the redemption period having already received up to 90 percent of the value of their securities.
ACM’s customers were assured that ACM was engaged in hedging transactions such that ACM would be able to return the full value of the securities, or the cash equivalent, at the end of the contract period. In reality, ACM simply sold the securities upon receipt, remitted up to 90 percent of the sales proceeds to its customers as the loan, and retained the remaining sales proceeds for itself and the parties who sold, marketed or facilitated the product.
Because ACM simply sold the securities upon receipt and no legitimate hedge existed, ACM could not return securities, or the cash equivalent, to the customers at the end of the redemption period unless it had sufficient funds to buy back the securities. By in or about April 2008, ACM was functionally insolvent. ACM did not have – and could not have expected to have – sufficient funds to cover its outstanding liabilities. Nevertheless, Chapman continued to solicit new customers despite knowing that ACM would never be able to fulfill its financial obligations.
Over seven years, Chapman took in more than $270 million in stock, and 122 victims lost more than $35 million as a result of this scheme. At the same time that ACM was amassing massive liabilities and failing to repay its existing clients, Chapman used his clients’ money to support a lavish lifestyle by purchasing a custom-built $3 million home in Great Falls, Va.; condominiums in the Turks & Caicos and Pompano Beach, Fla.; and a Lamborghini and Ferrari.
This case was investigated by the FBI’s Washington Field Office. The Criminal Division and the U.S. Attorney’s Office for the Eastern District of Virginia recognize the substantial assistance of the U.S. Securities and Exchange Commission on this case. Assistant United States Attorney Chad Golder and Trial Attorney Henry Van Dyck of the Criminal Division’s Fraud Section prosecuted the case on behalf of the United States.United States Files False Claims Act Complaint Against Washington Closure Hanford LLC, Federal Engineers and Constructors Inc, and Laura ShikashioRead the Press Release
Spokane – On Friday, the United States Attorney's Office for the Eastern District of Washington filed a civil complaint under the False Claims Act alleging that Washington Closure Hanford LLC (WCH) and others falsely claimed credit for awarding tens of millions of dollars-worth of federal subcontracting business to small businesses including woman-owned small businesses. The complaint alleges that WCH claimed such small businesses would perform subcontracted work, but that those companies were used merely as pass-throughs and the actual work was performed by another subcontractor, Federal Constructors Inc. (FE&C). WCH is a prime contractor of the Department of Energy (DOE) at the Hanford Site and is owned by URS Corporation, Bechtel National Inc., and CH2M Hill Companies Ltd.
DOE fully reimburses WCH for hundreds of millions of dollars in subcontracts awarded under the River Corridor Closure Contract. Accordingly, DOE mandates that WCH award a certain percentage of those subcontracts to small businesses and to disadvantaged small businesses, including woman owned small businesses, according to the complaint. Failure of WCH to meet these requirements or to not provide subcontracts to such small businesses in good faith can result in millions of dollars withheld from WCH by DOE, the complaint alleges.
The complaint alleges that WCH falsely represented to DOE that it had awarded three different multi-million dollar subcontracts to two different subcontractors, which it claimed qualified as small businesses or woman-owned small businesses when, as alleged in the complaint, they did not so qualify. These small businesses were merely acting as pass through companies for another subcontractor, FE&C, which was not a disadvantaged small business of any kind, according to the complaint.
The complaint alleges that, in May of 2009, WCH awarded a subcontract referred to as the Truck & Pup subcontract to Phoenix Enterprises Northwest (Phoenix) claiming that Phoenix was a small business. The Small Business Administration (SBA) determined about a month later that Phoenix was merely acting as a pass through company for another subcontractor, FE&C, that did not qualify as a small business but was actually doing the work. According to the complaint, rather than re-bid the subcontract, WCH agreed to not claim small business credit and allow Phoenix and FE&C to keep the subcontract. However, beginning less than a year later in 2010, despite knowing of the SBA determination and despite having agreed not to claim the small business credit, WCH falsely represented to DOE that it was entitled to over $2.7 million worth of small business credit for modifications to the Truck & Pup Subcontract, the complaint alleges.
In November of 2010, according to the complaint, WCH awarded another multimillion dollar subcontract that involved FE&C. The complaint alleges that WCH falsely represented to DOE that it was entitled to small business credit for this subcontract, referred to as the 100 Area Subcontract, because a woman-owned small business, Sage Tec LLC, would perform on the contract with FE&C as a teaming partner. In fact, according to the allegations, Sage Tec only had one employee, its owner Laura Shikashio, and WCH and FE&C knew that Sage Tec would merely be acting as a pass through company. As alleged in the complaint, in performing on the 100 Area Subcontract Sage Tec simply used FE&C's employees, which stayed on the FE&C payroll, and in that manner merely acted as a pass through contributing only its woman-owned small business name to the project.
The complaint further alleges that in October of 2012 WCH once again awarded a multimillion dollar subcontract, worth over $15 million, that involved FE&C. As with the 100 Area Subcontract, the complaint alleges that WCH falsely represented to DOE that it was entitled to disadvantaged small business credit for this subcontract, referred to as the 300 Area Subcontract, because Sage Tec would perform on the contract with FE&C as a teaming partner. In fact, according to the allegations, Sage Tec still only had one employee, its owner Laura Shikashio, and WCH and FE&C knew that Sage Tec would be acting, once again, as a pass through company merely contributing its woman owned small business name with FE&C performing the work, just as with the previous subcontract.
The Department of Energy Office of Inspector General and the Small Business Administration Office of Inspector General is investigating the case. "SBA's set-aside contracting programs are intended to give small businesses the best opportunity to provide goods and services to the federal government," said SBA Inspector General Peggy E. Gustafson. "The fraud alleged in this complaint egregiously denied the government the opportunity to obtain tens of millions of dollars-worth of federal subcontracting from small businesses."
Pursuant to the False Claims Act, the United States is seeking damages and civil penalties from WCH, FE&C, Sage Tec, and Laura Shikashio for their roles in the alleged fraud. In filing this civil complaint the United States is partially intervening in a whistleblower law suit brought under the False Claims Act against WCH, FE&C, and others by Salina Savage and Savage Logistics LLC. Ms. Savage has pending False Claims Act allegations against WCH and FE&C that are in addition to those in the United States' complaint. In its complaint the United States is also suing WCH for breaching its contract with DOE for making the false statements about its small business subcontracting to DOE. The United States is also suing WCH, FE&C, Sage Tec, and Ms. Shikashio for payment by mistake and for being unjustly enriched as a result of the alleged fraud.
The United States' complaint is captioned as United States of America ex rel. Salina Savage, Savage Logistics LLC, vs. Washington Closure Hanford LLC, Federal Engineers and Constructors, Inc., Sage Tec LLC, and Laura Shikashio, CV-10-5051-EFS.
United Kingdom National Sentenced for Resisting Deportation OrdersRead the Press Release
LAKE CHARLES, La. – United States Attorney Stephanie A. Finley announced today that Michael Phillip Telemaque, 47, of the United Kingdom, was sentenced by U.S. District Judge Patricia Minaldi to 57 months in prison followed by three years of supervised release for four counts of impeding or hampering his deportation. A federal jury found Telemaque guilty on September 10, 2013 after a two-day trial.
Witness testimony and documents admitted at trial revealed that Telemaque refused to fill out passport applications for his deportation to the United Kingdom four times between November 2010 and September 2011. In addition to the application requirement, the United Kingdom also requires that Telemaque must speak to a representative of the consulate, provide fingerprints and a photo, and show proof that he is a United Kingdom citizen. He refused to perform any of these tasks. Telemaque was convicted in January 1997 of selling crack cocaine and received a 180-month prison sentence. He was ordered to be removed from the United States in June of 2010.
The Immigration and Customs Enforcement - Enforcement and Removal Operations conducted the investigation. Assistant U.S. Attorney James T. McManus and Special Assistant U.S. Attorney Robert C. Abendroth prosecuted the case.
United Kingdom National Sentenced for Resisting Deportation OrdersRead the Press Release
LAKE CHARLES, La. – United States Attorney Stephanie A. Finley announced today that Michael Phillip Telemaque, 47, of the United Kingdom, was sentenced by U.S. District Judge Patricia Minaldi to 57 months in prison followed by three years of supervised release for four counts of impeding or hampering his deportation. A federal jury found Telemaque guilty on September 10, 2013 after a two-day trial.
Witness testimony and documents admitted at trial revealed that Telemaque refused to fill out passport applications for his deportation to the United Kingdom four times between November 2010 and September 2011. In addition to the application requirement, the United Kingdom also requires that Telemaque must speak to a representative of the consulate, provide fingerprints and a photo, and show proof that he is a United Kingdom citizen. He refused to perform any of these tasks. Telemaque was convicted in January 1997 of selling crack cocaine and received a 180-month prison sentence. He was ordered to be removed from the United States in June of 2010.
The Immigration and Customs Enforcement - Enforcement and Removal Operations conducted the investigation. Assistant U.S. Attorney James T. McManus and Special Assistant U.S. Attorney Robert C. Abendroth prosecuted the case.
U.S. District Court Finds Joseph Edward Duncan, III CompetentRead the Press Release
Judge Lodge Reinstates Previous Order
BOISE — Convicted child murderer Joseph Edward Duncan, III, was found competent to waive his appeal in November 2008 after a federal jury sentenced him to death in August 2008 for the kidnapping and murder of a nine-year-old north Idaho boy. United States District Court Judge Edward J. Lodge issued his 66-page order finding Duncan competent today. The order followed a six week retrospective competency hearing conducted by Judge Lodge in January and February of this year.
In July of 2011, the Ninth Circuit Court of Appeals remanded this case to the district court for a hearing to determine whether defendant Joseph Edward Duncan, III, competently waived his right to appeal in November 2008. That decision followed a filing in the Ninth Circuit by Duncan’s then-defense counsel. The defendant, who was representing himself at the time, indicated in both a letter to this Court and in a November 24, 2008, hearing that he did not wish to appeal. On August 27, 2008, a federal capital sentencing jury had returned three death sentence verdicts for the defendant’s intentional murder of the nine-year-old boy, D.G. Judge Lodge, as required by law, imposed those sentences. On November 13, 2008, Judge Lodge also imposed other, non-capital sentences for federal crimes committed from April through July of 2005, including sexual assault of a then-eight-year-old north Idaho girl.
“The United States is pleased with this careful, considered decision,” said U.S. Attorney Wendy J. Olson. “As we argued to the Court at the hearing, this defendant demonstrated his competency from the time he meticulous planned his crimes in North Dakota, to the time he carried them out in Idaho and Montana, through his participation in the capital sentencing hearing and in post-hearing interviews with FBI agents. We will continue to defend Judge Lodge’s deliberate and thorough consideration of the defendant’s competency just as we will continue to seek justice for the victims in this case through any additional appellate proceedings. The kidnapping, sexual assault and murder of this nine-year-old boy and the kidnapping and sexual assault of his sister were heinous crimes and a tragic chapter for all Idahoans, but for the sake of the surviving victim and her family, we need to bring it to a close.”
Two Georgia Residents Sentenced for Sex TraffickingRead the Press Release
ALEXANDRIA, Va. – Quintavis Deonte Dumas, age 23, and Koya Tiffany Rooke, age 24, both of Snellville, Georgia, were each sentenced today to 10 years in prison for Sex Trafficking of a Child. Dumas and Rooke were also ordered to pay a total of $17,572.47 in restitution.
Dana J. Boente, Acting United States Attorney for the Eastern District of Virginia, Colonel Edwin C. Roessler, Jr., Chief of the Fairfax County Police Department, and Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office made the announcement after sentencing by United States District Judge Gerald Bruce Lee.
Dumas and Rooke were found guilty by a jury on September 16, 2013. The evidence at trial showed that Dumas and Rooke were members of an organization that prostituted teenage girls in various states, including Virginia, Florida, South Carolina, and Georgia. Dumas and Rooke frequently would rent the cars that were used to transport the teenage victims to the various places where they were prostituted.
Rooke and Dumas rented hotels rooms where commercial sex acts occurred and allowed their computer to be used to post advertisements that were posted on Backpage.com to solicit customers. Rooke herself was a prostitute and sometimes performed commercial sex acts with customers along with the victims. Rooke was the girlfriend of Quintavis Dumas. Besides transporting victims and renting hotel rooms, Quintavis Dumas carried a firearm to ensure that the proceeds were secure and sometimes obtained drugs that were provided to the teenage victims. In March 2013, two other members of the ring, Edwin Barcus, Jr. and Joshua Deonte Dumas, pleaded guilty to engaging in a Child Exploitation Enterprise. Barcus was sentenced to 25 years of imprisonment while Joshua Dumas was sentenced to 19.9 years of imprisonment.
This case was investigated by the Fairfax County Police Department and the Federal Bureau of Investigation. Assistant United States Attorney Michael J. Frank and Special Assistant United States Attorney C. Alexandria Bogle prosecuted the case on behalf of the United States.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.Two Former Miami-Dade Residents Sentenced for Their Role in Smuggling Cocaine Aboard Cargo ShipsRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Alysa D. Erichs, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI), announce that David Rodriguez, 47, of Miami, and Rogny Jerez Lopez, 35, of Hialeah, were sentenced on December 4, 2013 for their role in a drug importation conspiracy involving the smuggling of cocaine aboard cargo ships operated by King Ocean Services. U.S. District Judge K. Michael Moore sentenced David Rodriguez to 235 months in prison, to be followed by five years of supervised release, and Rogny Jerez Lopez to 87 months in prison, followed by two years of supervised release.
The investigation revealed that beginning in approximately 2005 through 2012, Rodriguez, the leader of a Miami-based drug-trafficking organization, and Jerez Lopez, a former King Ocean Services employee working at Port Everglades, were involved in the importation of millions of dollars’ worth of cocaine. Rodriguez, Jerez Lopez and their co-conspirators smuggled the cocaine into the United States by having it concealed inside cargo containers while King Ocean Services cargo vessels were docked at ports overseas. Once the vessels arrived at Port Everglades, Jerez Perez assisted in removing the narcotics from the cargo vessels and into the hands of drug traffickers under the direction of Rodriguez.
This case was the result of an ongoing Organized Crime Drug Enforcement Task Force (OCDETF) led by ICE-HSI. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
Mr. Ferrer commended the investigative efforts of ICE-HSI, the South Florida Money Laundering Strike Force, the Broward Sheriff's Office and the DEA. The case was prosecuted by Assistant U.S. Attorney Aimee Jimenez.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Three Cleveland Men Given Lengthy Prison Sentences for Bank RobberiesRead the Press Release
Three Cleveland men sentenced to lengthy prison terms this week for their roles in unrelated bank robberies, 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.
Perry Johnson, 21, was sentenced to 25 years in prison. Charles D. Moore, 28, was sentenced to more than 16 years in prison and Mitchell Perkins, 28, was sentenced to nearly 12 years in prison.
“These three defendants put everyday customers in grave danger,” Anthony said. “The sentences demonstrate that the FBI Violent Crimes Task Force will continue efforts to investigate and remove menacing criminals from our streets.”
Johnson was found guilty of two armed robberies of CVS pharmacies last year in which he threatened the use of a firearm and took cash and prescription medication.
Johnson robbed the CVS pharmacy at 10022 Madison Avenue on Nov. 16 and the CVS pharmacy at 3171 West Boulevard on Nov. 23, 2012.
In the first robbery, he threatened the use of a firearm and took five bottles of prescription medication and cash from a CVS employee, according to the indictment. In the second robbery, Johnson pointed a firearm at CVS employees and took cash, 30 bottles of prescription medication and other merchandise, according to court documents.
Moore was found guilty of one count of armed bank robbery. This charge arises from the July 9, 2013, bank robbery of the PNC Bank at 20711 Chagrin Boulevard. in Shaker Heights, when Moore held the bank manager at gunpoint and stole approximately $46,000 from the bank's tellers, according to court documents.
Perkins was found guilty of armed bank robbery and using a firearm during the commission of a felony. He robbed the U.S. Bank at 5154 Wilson Mills Road in Richmond Heights, Ohio, on May 29, 2012, according to court documents.
The cases were all investigated by the Federal Bureau of Investigation and handled by prosecutors in the U.S. Attorney’s Office.
Thirteen Defendants Plead Guilty for December 2010 Cyber-Attack Against PayPalRead the Press Release
SAN JOSE – Thirteen defendants pleaded guilty in federal court in San Jose yesterday to charges related to their involvement in the cyber-attack of PayPal’s website as part of the group “Anonymous,” United States Attorney Melinda Haag announced. One of the defendants also pleaded guilty to the charges arising from a separate cyber-attack on the website of Santa Cruz County.
In pleading guilty, the defendants admitted to carrying out a Distributed Denial of Service (DDoS) cyber-attack against PayPal in December 2010.
These DDoS attacks were facilitated by software tools designed to damage a computer network’s ability to function by flooding it with useless commands and information, thus, denying service to legitimate users. A group calling itself “Anonymous” claimed responsibility for the attacks, saying they conducted the attacks in protest of the companies’ and organizations’ actions. The attacks were facilitated by the software tools “Anonymous” made available for free download on the Internet. The victims included major U.S. companies across several industries.
According to the plea agreements and statements made in court, in late November 2010, WikiLeaks released a large amount of classified United States State Department cables on its website. Citing violations of the PayPal terms of service, and in response to WikiLeaks’ release of the classified cables, PayPal suspended WikiLeaks’ accounts such that WikiLeaks could no longer receive donations via PayPal. WikiLeaks’ website declared that PayPal’s action “tried to economically strangle WikiLeaks.”
The plea agreements further state that, in retribution for PayPal’s termination of WikiLeaks’ donation account, Anonymous coordinated and executed DDoS attacks against PayPal’s computer. Anonymous referred to these co-ordinated attacks on PayPal as “Operation Avenge Assange.”
The following defendants pleaded guilty:
- CHRISTOPHER WAYNE COOPER, dob 10/21/87, aka “Anthrophobic,” Elberta, Alabama
- JOSHUA JOHN COVELLI, dob 1/10/85, aka “Absolem, and, “Toxic,” Fairborn, Ohio
- KEITH WILSON DOWNEY, dob 11/7/84, Jacksonville, Florida
- MERCEDES RENEE HAEFER, dob 6/21/91, aka “No,” and “MMMM,” Las Vegas, Nevada
- DONALD HUSBAND, dob 8/14/81, aka “Ananon,” Fairfield, California
- VINCENT CHARLES KERSHAW, dob 2/23/84, aka “Trivette,” “Triv,” and “Reaper,” Fort Collins, Colorado
- ETHAN MILES, dob 9/1/77, Flagstaff, Arizona
- JAMES C. MURPHY, dob 11/15/74, Baldwin Park, California
- DREW ALAN PHILLIPS, dob 4/15/85, aka “Drew010,” Santa Rosa, California
- . JEFFREY PUGLISI, dob 2/19/83, aka “Jeffer,” “Jefferp,” and “Ji,” Clinton Township, Michigan
- DANIEL SULLIVAN, dob 6/29/89, Camarillo, California
- TRACY ANN VALENZUELA, dob 2/11/69, Napa, California
- CHRISTOPHER QUANG VO, dob 5/16/89, Attleboro, Massachusetts
With the exception of Valenzuela, Phillips and Miles, each of the defendants pleaded guilty to one count of Conspiracy, in violation of 18 USC 1030(b)(Felony), and one count of Intentional Damage to a Protected Computer, in violation of 18 USC 1030(a)(5)(A)(Misd.). Defendant Valenzuela pleaded guilty to one count of Reckless Damage to a Protected Computer, in violation of 18 USC 1030(a)(5)(A)(Misd.). Defendants Phillips and Miles were permitted to plead guilty to one count each of Intentional Damage to a Protected Computer, in violation of 18 USC 1030(a)(5)(A)(Misd.) only.
The terms of the plea agreements allow that unless a defendant violates any of the terms of the plea agreement or fails to accept responsibility, at the time of sentencing, the defendant may make an unopposed motion to withdraw his/her guilty plea to Count One, Conspiracy to Commit Intentional Damage to a Protected Computer in violation of 18 U.S.C. 1030(b) and the government will dismiss Count One, leaving only the misdemeanor count of violating of 18 U.S.C. 1030(a)(5)(A) to be entered as a final judgment against the defendant.
Defendant Joshua John Covelli also pleaded guilty to executing a DDoS attack (with another defendant, presently a fugitive) against the Santa Cruz County web server, admitting that it was in retaliation for a statute enacted by the City of Santa Cruz. The City of Santa Cruz enacted Section 6.36.010 of its Municipal Code, entitled “Camping Prohibited,” which contained restrictions and definitions on camping within Santa Cruz City. In response to the enforcement of Section 6.36.010, protesters occupied the Santa Cruz County Courthouse premises from approximately July 4, 2011 to October 2, 2011. Law enforcement officers from Santa Cruz County disbanded the protest and several protesters were charged with misdemeanors crimes in Santa Cruz County.
According to Covelli’s plea agreement and statements in court, in retribution for Santa Cruz City’s enforcement of Section 6.36.010 of the Municipal Code, and Santa Cruz County’s disbandment of the protest, Covelli and others, calling themselves the “People’s Liberation Front’” or “PLF,” and claiming to be associated with the “Anonymous” group, co-ordinated and executed an attack against Santa Cruz County’s computer servers. The PLF referred to these coordinated attacks on Santa Cruz County as “Operation Peace Camp 2010.”
The defendants are currently released on bond.
The sentencing hearings for twelve of the defendants are scheduled for December 4, 2014 at 10:00 a.m. before the Honorable D. Lowell Jensen, United States District Court Judge, in San Jose. Tracy Valenzuela’s sentencing hearing is scheduled for November 20, 2014 at 10:00 a.m. before Judge Jensen as well. The maximum statutory penalty for each count in violation of 18 United States Code, Section 1030(b) – Conspiracy (Felony), is 5 years imprisonment and a $250,000 fine; for each count in violation of 18 United States Code, Section 1030(a)(5)(A) – Intentional Damage to a Protected Computer (Felony), is 10 years imprisonment and a $250,000 fine; for each count in violation of 18 United States Code, Sections 1030(a)(5)(A) & (c)(4)(G)(i) – Intentional Damage to a Protected Computer (Misd.) is 1 year in prison and a $100,000 fine, and for each count in violation of 18 United States Code, Sections 1030(a)(5)(A) & (c)(4)(G)(i) – Reckless Damage to a Protected Computer (Misd.) is 1 year in prison and a $100,000 fine.
However, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Matt Parrella and Hanley Chew are the Assistant U.S. Attorneys who prosecuted the case with the assistance of Elise Etter. The prosecution is the result of an investigation by the Federal Bureau of Investigation, along with cooperation from PayPal. Authorities in the Netherlands, Germany and France have also taken their own investigative and enforcement actions.
The National Cyber-Forensics and Training Alliance, a public-private partnership whose mission to identify, mitigate, and neutralize cyber-crime, also provided assistance.
(Anonymous superseding indictment )
Third Former Bank Employee Pleads GuiltyTo Embezzling from A Grant County BankRead the Press Release
WICHITA, KAN. – A third former bank employee has pleaded guilty to embezzling from a bank in Grant County, Kan., U.S. Attorney Barry Grissom said today.
Linda Wise, 60, Ulysses, Kan., pleaded guilty Thursday to one count of theft from a bank. In her plea, she admitted that from late 2010 to March 2013 while she worked at Western State Bank in Ulysses, Kan., she embezzled money from the bank.
Subsequent to July 24, 2010, she conspired with fellow employees and co-defendants Ashley Cravens and Amber Gutierrez to steal money from the bank. From late 2010 to March 2013, the three stole a total of $24,450 from the bank.
Co-defendants are:
Amber Gutierrez, 32, Ulysses, Kan., who is set for sentencing Feb. 4.
Ashley Cravens, 29, Ulysses, Kan., who is set for sentencing Feb. 7.
Hattie Wiginton, 33, Ulysses, Kan., who is set for jury trial Jan. 21.Grissom commended the FBI, the KBI, the Grant County Sheriff=s Office, the Ulysses Police Department and Assistant U.S. Attorney Aaron Smith for their work on the case.
In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.
Syrian National Sentenced for Social Security FraudRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Syrian national was sentenced in federal court today for Social Security fraud.
Mohamad Yasser Baiazid, 71, a naturalized U.S. citizen from Syria who resided in Kansas City, Mo., was sentenced by U.S. District Judge Howard F. Sachs to one year and one day in federal prison without parole. Baiazid must pay $34,429 in restitution.
On July 31, 2013, Baiazid pleaded guilty to theft of government money by receiving Social Security benefits that he was not entitled to receive. Baiazid admitted that he resided outside of the United States for several years while receiving Supplemental Security Income (SSI) benefits. Baiazid admitted that his actions caused the government to incur a fraud loss of $34,179, for which he must pay restitution. Baiazid also received a one-time $250 payment to which he was not entitled under the American Recovery and Reinvestment Act of 2009, for which he also must pay restitution.
Baiazid applied for SSI benefits on Nov. 29, 2007. Beneficiaries of SSI may not reside outside of the country for a full calendar month or for 30 consecutive days or more. Beneficiaries who reside outside of the United States for more than a full calendar month or for 30 consecutive days or more are no longer eligible to receive SSI benefits. Accordingly, SSI beneficiaries have a duty to notify the Social Security Administration if they leave the United States and are gone for a full calendar month or for 30 consecutive days or more.
Baiazid lived outside the United States on three separate occasions. On Jan. 25, 2008, he traveled to Syria and did not return to the United States until Oct. 21, 2009 – approximately one year and 10 months later. On Jan. 21, 2012, Baiazid traveled to Syria and remained outside the United States until Feb. 24, 2010 – more than one month. Baiazid again left the United States headed for Syria on May 23, 2010, and resided outside of the United States until May 2, 2013 – nearly three years.
Upon his return to the United States in 2013, Baiazid initially had a return ticket to Beirut, Lebanon, leaving Kansas City International Airport on July 7, 2013. After learning that he was a target of a criminal investigation, he amended his flight plans and attempted to leave the United States on May 21, 2013.
When Baiazid was interviewed by an employee of the Social Security Administration in January 2010, he falsely claimed to be living in Kansas City since 2007. In a March 2010 interview, Baiazid again falsely claimed he had not been outside the United States for a calendar month or 30 consecutive days since November 2007. Baiazid was interviewed again in May 2013 and falsely claimed that he had not traveled outside the United States (except for a one-week visit to France).
This case was prosecuted by Assistant U.S. Attorney Trey Alford. It was investigated by the Social Security Administration, Office of Inspector General, Office of Investigations.Sterling Man Sentenced ForConducting $270 Million Investment Fraud SchemeRead the Press Release
ALEXANDRIA, Va. – William Dean Chapman, 44, of Sterling, Va., was sentenced today to 144 months in prison, for orchestrating a $270 million stock loan scheme that defrauded his clients of more than $35 million.
Dana J. Boente, Acting United States Attorney for the Eastern District of Virginia, Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office and Mythili Raman, Acting Assistant Attorney General of the Justice Department’s Criminal Division, made the announcement after sentencing by United States District Judge Gerald Bruce Lee.
William Dean Chapman, 44, of Sterling, Va., pleaded guilty to one count of wire fraud on May 23, 2013. Chapman was the founder and owner of Alexander Capital Markets (ACM), whose primary business was to offer a financial product that provided customers with a purportedly fully hedged loan at an above-market rate of interest against a customer’s securities. This served as collateral for the transaction for a percentage – typically between 85 percent and 90 percent – of the securities’ value. For example, in exchange for a customer’s Apple stock, ACM would provide a cash loan to that customer worth 85 percent or 90 percent of the stock’s value. After a period of time – between two and seven years, and typically three years – the customer could receive back their securities, or the equivalent cash value, if they repaid the balance of the loan plus accrued interest. Alternatively, because the loans were non-recourse, the customer could walk away at the end of the redemption period having already received up to 90 percent of the value of their securities.
ACM’s customers were assured that ACM was engaged in hedging transactions such that ACM would be able to return the full value of the securities, or the cash equivalent, at the end of the contract period. In reality, ACM simply sold the securities upon receipt, remitted up to 90 percent of the sales proceeds to its customers as the loan, and retained the remaining sales proceeds for itself and the parties who sold, marketed or facilitated the product.
Because ACM simply sold the securities upon receipt and no legitimate hedge existed, ACM could not return securities, or the cash equivalent, to the customers at the end of the redemption period unless it had sufficient funds to buy back the securities. By in or about April 2008, ACM was functionally insolvent. ACM did not have – and could not have expected to have – sufficient funds to cover its outstanding liabilities. Nevertheless, Chapman continued to solicit new customers despite knowing that ACM would never be able to fulfill its financial obligations.
Over seven years, Chapman took in more than $270 million in stock, and 122 victims lost more than $35 million as a result of this scheme. At the same time that ACM was amassing massive liabilities and failing to repay its existing clients, Chapman used his clients’ money to support a lavish lifestyle by purchasing a custom-built $3 million home in Great Falls, Va.; condominiums in the Turks & Caicos and Pompano Beach, Fla.; and a Lamborghini and Ferrari.
This case was investigated by the FBI’s Washington Field Office. The Criminal Division and the U.S. Attorney’s Office for the Eastern District of Virginia recognize the substantial assistance of the U.S. Securities and Exchange Commission on this case. Assistant United States Attorney Chad Golder and Trial Attorney Henry Van Dyck of the Criminal Division’s Fraud Section prosecuted the case on behalf of the United States.Southington Man Sentenced to 30 Months for Mortgage Fraud and Money Laundering OffensesRead the Press Release
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Deirdre M. Daly, Acting United States Attorney for the District of Connecticut, announced that HENRY J. PAPALE, 62, of Southington, was sentenced today by Senior U.S. District Judge Ellen Bree Burns in New Haven to 30 months of imprisonment, followed by three years of supervised release, for operating a mortgage fraud scheme.
According to court documents and statements made in court, in 2007, PAPALE convinced others to purchase four investment homes in Florida using mortgage loans. To inflate the size of the mortgages above the purchase prices for the properties, PAPALE submitted fraudulent invoices, work authorizations and wire transfer instructions to a settlement agent in Florida, each purportedly from a construction company for restoration on the properties. In fact, the construction company was fictitious and no work was performed on the properties. Following the closing on each sale, the Florida settlement agent wired loan proceeds, in amounts that corresponded to the cost of the restoration work, to a bank account in Southington that it believed belonged to the fictitious construction company, but was actually held by certain of PAPALE’s family members.
A total of $360,307.23 was transferred to PAPALE’s family members in this manner. Based on PAPALE’s representations, a member of PAPALE’s family then turned the majority of the fraudulently-obtained loan proceeds over to PAPALE, who deposited them into his own bank account. PAPALE ultimately transferred $255,500 in fraudulently obtained loan funds from that bank account to an investment trading account he held.
On August 13, 2013, PAPALE pleaded guilty to one count of wire fraud and one count of money laundering.
This matter was investigated by the Federal Bureau of Investigation and was prosecuted by Assistant U.S. Attorneys Jonathan N. Francis and Michael S. McGarry.
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[email protected]Sioux Falls Man Convicted in Sex Trafficking CaseRead the Press Release
United States Attorney Brendan V. Johnson announced that Mohammed Sharif Alaboudi, age 45, of Sioux Falls, South Dakota, was found guilty of four counts of sex trafficking, including sex trafficking by force and sex trafficking of a child. The guilty verdicts followed a four-day federal jury trial in Sioux Falls. Each of the four counts carries a maximum prison term of life. Three counts carry mandatory minimum prison terms of 15 years.
In 2011, the Sioux Falls Police Department (SFPD) Street Crimes Unit began investigating a criminal organization operating in and around Sioux Falls. Witnesses identified several individuals they claimed had been selling narcotics and prostitutes. In January 2012, the SFPD requested federal assistance, and a team consisting of the Department of Homeland Security–Criminal Investigations, the Federal Bureau of Investigation, the SFPD, and the South Dakota Division of Criminal Investigation began investigating the case.
Investigators discovered that Alaboudi was living in a one-bedroom, upstairs apartment in a house several blocks from downtown Sioux Falls. Girls and young women, many homeless and suffering from addiction, would frequent Alaboudi’s residence where he provided drugs and a place to stay. At trial, victims and other witnesses described how, once they were there, Alaboudi would use violence and drugs to force them into having sex with him and with other men who would come to the apartment and pay Alaboudi with drugs and money.
“Alaboudi operated a house of horrors right here in South Dakota. He lured women and young girls to his home and then kept them high on drugs and alcohol while forcing them to engage in sex acts with strangers,” said Johnson. “This case reminds us that when people fall through the cracks in our community, there are sexual predators waiting in the wings to exploit them. Thanks to the outstanding work of law enforcement, Mr. Alaboudi’s days of preying on the most vulnerable citizens in our community are over.”
Alaboudi was indicted by a federal grand jury on November 6, 2012, as a co-defendant of Emmanuel Nyuon, alleging the two men conspired to engage in the sex trafficking of one child victim. On March 6, 2013, the grand jury added additional charges against Alaboudi regarding another child victim and an adult victim. Alaboudi’s and Nyuon’s cases were severed on March 11, 2013. A count regarding a fourth victim was added against Alaboudi on May 8, 2013. Nyuon was convicted on April 5, 2013, following a separate jury trial, and he is currently serving a federal prison sentence of 30 years.
“The Civil Rights Division commends the District of South Dakota for vindicating the rights and dignity of some of the most vulnerable members of our society—the homeless young women and girls the defendant cruelly exploited and sold for sex,” commented Jocelyn Samuels, Acting Assistant Attorney General of the Justice Department’s Civil Rights Division. “When human traffickers prey on those hidden in the shadows, destroying human lives for their own profit, they offend the values of liberty and justice for all that lie at the heart of our nation. We are committed to bringing these traffickers to justice.”
This case was investigated by the SFPD, the Federal Bureau of Investigation, Department of Homeland Security—Criminal Investigations, and the South Dakota Division of Criminal Investigation. Assistant U.S. Attorneys Kevin Koliner and Jeff Clapper prosecuted the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by 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 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.
A presentence investigation was ordered. Alaboudi was remanded to the custody of the U.S. Marshals Service and a sentencing date will be set.Rockford Tax Preparer Pleads Guilty to Filing False Personal Income Tax ReturnRead the Press Release
ROCKFORD — A Rockford, Ill. woman pleaded guilty today in federal court before U.S. District Judge Philip G. Reinhard to federal income tax fraud. ANNA MARTINEZ, 44, admitted that in 2007 she filed a false income tax return with the United States Internal Revenue Service.
According to the written plea agreement, during calendar years 2006 – 2008 Martinez was the owner and sole proprietor of Community Tax Service, a tax preparation business, in Rockford, Illinois, which was her only source of income. Martinez admitted in the plea agreement that she filed her U.S. Individual Income Tax Return Form 1040 with schedules and attachments for the calendar year 2007, which she verified by written declaration made under the penalties of perjury, and failed to disclose approximately $236,524 of receipts of Community Tax Service for 2007. Martinez also admitted that she failed to report receipts or sales received by Community Tax Services of $68,026 on her individual income tax return for 2006, and $79,594 for 2008, for a total of at least $384,144 for tax years 2006 – 2008, knowing that she failed to pay approximately $72,156 in taxes to the IRS.
Sentencing for Martinez is scheduled for Wednesday, May 7, 2014, at 11:00 a.m. Martinez faces a maximum sentence of up to 3 years in prison, up to one year of supervised release following imprisonment, and a maximum fine of up to $250,000. Martinez must also pay restitution to the Internal Revenue Service and the costs of prosecution. The actual sentence will be determined by the United States District Court, guided by the advisory United States Sentencing Guidelines.
The sentencing was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and James C. Lee, Special Agent-In-Charge of the Chicago Field Office of Internal Revenue Service - Criminal Investigation Division.
The government is represented by Assistant U.S. Attorney Scott R. Paccagnini.
Plea Agreement
Roanoke Man Sentenced for Detonating Explosive DeviceRead the Press Release
ROANOKE, VIRGINIA – A Roanoke man who admitted to building and detonating a pipe bomb was sentenced this morning in the United States District Court for the Western District of Virginia in Roanoke.
Derick G. Wilson, 24, of Roanoke, Va., who previously pled guilty to knowingly possessing a destructive device, was sentenced today in Federal District Court to 36 months in federal prison, along with a two-year period of supervised release.
“The defendant put the lives of innocent bystanders and first responders at risk when he detonated this very dangerous device,” United States Attorney Timothy J. Heaphy said today. “Due to the prompt response and careful investigation of law enforcement, he has now been held accountable for his reckless acts.”
“The criminal use of explosives or improvised explosive devices poses an extreme threat to public safety. ATF will aggressively investigate any use of these weapons that are designed for only one reason - to inflict serious injury or death to anyone nearby,” stated Carl Vasilko, Special Agent in Charge, ATF Washington Field Division.
The evidence in the case showed that on August 1, 2012, the defendant got into a physical altercation with an individual at Virginia Tech over a former girlfriend. Following the altercation, the defendant drove to his home in Roanoke, where he constructed a pipe bomb, using a piece of galvanized pipe, two end-caps, powder, and a fuse. After constructing the pipe bomb, the defendant drove back to Virginia Tech and placed the pipe bomb under the left front fender of a vehicle belonging to the person with whom he had got into an altercation. The defendant lit the fuse and the pipe bomb exploded, causing significant damage to the vehicle. There were no injuries.
The investigation of the case was conducted by the Bureau of Alcohol, Tobacco, Firearms and
Explosives, the Virginia State Police Bomb Squad, the Blacksburg Police Department and the Virginia Tech Police Department. Assistant United States Attorney Craig “Jake” Jacobsen prosecuted the case.Rio Rancho Men Arrested on Federal Synthetic Drug Trafficking ChargesRead the Press Release
ALBUQUERQUE – Roman Salsberry Huerta, 44, and Dean Tommy Cole, 23, both of Rio Rancho, N.M., made their initial appearances in federal court this morning on criminal complaints charging them with synthetic drug trafficking offenses. Both men remain in custody pending detention hearings scheduled for Dec. 9, 2013.
Huerta and Cole were arrested by DEA agents and officers of the Rio Rancho Police Department on criminal complaints charging the two with conspiracy to distribute controlled substance analogues, commonly known as “Spice,” and distribution of Spice. Huerta also is charged with possession of Spice with intent to distribute and with maintaining two drug-involved premises.
According to the criminal complaints, Huerta is the owner of Smoke World, a business located on Southern Blvd. in Rio Rancho, and Cole is employed at Smoke World. The complaints allege that Huerta sold Spice to an informant in the Smoke World premises in May 2013, and that Cole sold Spice to the informant in the premises on two occasions in summer of 2013.
The complaints state that on Aug. 8, 2013, law enforcement authorities executed a federal search warrant at Huerta’s Rio Rancho residence where they allegedly found a Spice manufacturing facility with all the equipment and ingredients necessary to manufacture and distribute Spice. The authorities also allegedly found two large caches of cash in the residence, $102,000 in a lock box hidden under dirty clothes in a hamper and $4,059 in a lock box in a bedroom closet, which they seized as alleged proceeds from the sale of Spice.
Also on Aug. 8, 2013, law enforcement authorities executed a federal search warrant at Smoke World where they allegedly seized substances believed to be Spice that were packaged for retail sale and in bulk form. The packaged substances allegedly were packaged similarly to Spice allegedly found in Huerta’s residence.
If convicted on the charges in the criminal complaints, Huerta and Cole each face maximum penalties of twenty years in prison. Charges in criminal complaints are merely accusations. Criminal defendants are presumed innocent unless found guilty beyond a reasonable doubt.
This case was investigated by the Albuquerque office of the DEA and the Rio Rancho Police Department and is being prosecuted by Assistant U.S. Attorney Joel R. Meyers.
Background on Designer Synthetic Drugs
Designer synthetic drugs are often marketed as herbal incense, potpourri, bath salts, jewelry cleaner, or plant food, and have caused significant abuse, addiction, overdoses, and emergency room visits. Those who have abused synthetic drugs have suffered vomiting, anxiety, agitation, irritability, seizures, hallucinations, tachycardia, elevated blood pressure, and loss of consciousness. They have caused significant organ damage as well as overdose deaths.
Smokable herbal blends marketed as being “legal” and providing a marijuana-like high have become increasingly popular, particularly among teens and young adults, because they are easily available and, in many cases, they are more potent and dangerous than marijuana. These products consist of plant material that has been impregnated with dangerous psychoactive compounds that mimic THC, the active ingredient in marijuana. Synthetic cannabinoids are sold at a variety of retail outlets, in head shops and over the Internet. Brands such as “Spice,” “K2,” “Blaze,” and “Red X Dawn” are labeled as incense to mask their intended purpose. In 2012, a report by the Substance Abuse and Mental Health Services Administration (SAMHSA) reported 11,406 emergency department visits involving a synthetic cannabinoid product during 2010. In a 2013 report, SAMHSA reported the number of emergency department visits in 2011 involving a synthetic cannabinoid product had increased 2.5 times to 28,531. The American Association of Poison Control Centers reported 5,205 calls related to human exposure of synthetic cannabinoids.
For the past several years, there has also been a growing use of, and interest in, synthetic cathinones (stimulants/hallucinogens) sold under the guise of “bath salts” or “plant food.” Marketed under names such as “Ivory Wave,” “Purple Wave,” “Vanilla Sky,” or “Bliss,” these products are comprised of a class of dangerous substances perceived to mimic cocaine, LSD, MDMA, and/or methamphetamine. Users have reported impaired perception, reduced motor control, disorientation, extreme paranoia, and violent episodes. The long-term physical and psychological effects of use are unknown but potentially severe. The American Association of Poison Control Centers reported 2,656 calls related to synthetic cathinone (“bath salts”) exposures in 2012 and overdose deaths have been reported as well.
These products have become increasingly popular, particularly among teens and young adults and those who mistakenly believe they can bypass the drug testing protocols of employers and government agencies to protect public safety. They are sold at a variety of retail outlets, in head shops, and over the Internet. However, they have not been approved by the Food and Drug Administration (FDA) for human consumption or for medical use, and there is no oversight of the manufacturing process.
Controlled Substance Analogue Enforcement Act
While many of the designer drugs being marketed today are not specifically prohibited in the Controlled Substances Act (CSA), the Controlled Substance Analogue Enforcement Act of 1986 (AEA) allows many of these drugs to be treated as controlled substances if they are proven to be chemically and/or pharmacologically similar to a Schedule I or Schedule II controlled substance.
DEA has used its emergency scheduling authority to combat both synthetic cathinones (the so-called “bath salts” with names like Ivory Wave, etc.) and synthetic cannabinoids (the so-called incense products like K2, Spice, etc.), temporarily placing several of these dangerous chemicals into Schedule I of the CSA. Congress has also acted, permanently placing 26 substances into Schedule I of the CSA in 2012.
For more information about this operation and synthetic designer drugs, visit www.dea.gov.
Rio Rancho Man Sentenced to Five Years in Prison for Violating Federal Firearms LawsRead the Press Release
ALBUQUERQUE – David Garcia, 40, of Rio Rancho, N.M., was sentenced today to five years in federal prison for using and carrying a firearm in relation to a drug trafficking offense. Garcia will be on supervised release for three years after he completes his prison sentence.
Garcia was arrested in Jan. 2013 on a three-count indictment charging him with (1) being a felon in possession of a firearm and ammunition; (2) possession of methamphetamine with intent; and (3) using and carrying a firearm in furtherance of a drug trafficking crime. According to the indictment, Garcia committed these offenses on May 23, 2012. At the time, Garcia was prohibited from possessing firearms or ammunition because he previously had been convicted of conspiracy to traffic in cocaine in the 1st Judicial District Court for the State of New Mexico.
In Sept. 2013, Garcia pled guilty to count 3 of the indictment. In entering his guilty plea, Garcia admitted that on May 23, 2012, he possessed a 9mm pistol in addition to possessing methamphetamine which he intended to distribute. Garcia admitted that he possessed the pistol in order to protect himself and his methamphetamine.
This case was investigated by the Albuquerque office of the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Rio Rancho Police Department and was prosecuted by Assistant U.S. Attorneys David M. Walsh and Louis E. Valencia.
Retired San Diego Unified School District Educator Sentenced to 84 Months for Receipt of Child PornographyRead the Press Release
SAN DIEGO - James Rick Mitchell, a retired teacher and counselor in the San Diego Unified School District, was sentenced today by U.S. District Judge Janis L. Sammartino to 84 months in prison, followed by five years of supervised release, for a child pornography offense. He is expected to self-surrender to serve his sentence by February 7, 2014.
According to documents filed in court, Mitchell collected 947,542 images and 4,751 videos depicting minors engaged in sexually explicit conduct. Mitchell was identified as a collector of child pornography in an investigation conducted by the United States Postal Service into a commercial distributor of child pornography images and videos.
The investigation revealed that Mitchell had purchased videos and images from the company over an approximately 5 year period between 2006 and 2011, spending approximately $4,300 to purchase dozens of illicit images and videos. Based on that information, United States Postal Inspectors executed a search 2 warrant at Mitchell’s residence, where they uncovered the trove of child pornography that Mitchell had collected.
Mitchell was employed by the San Diego Unified School District for 34 years between 1969 and 2003. He worked as a physical education teacher and counselor at Einstein Junior High School; as a math teacher and track coach at Point Loma High School; and for 24 years between 1979 and 2003 at University City High School as a math teacher, counselor and track coach. Judge Sammartino told Mitchell that he had cast a “pallor” on his career as an educator with his actions and noted that possession of child pornography results in acute harm to the children depicted in the images.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by 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 individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
DEFENDANT Criminal Case No. 13-cr-667-JLS James Rick Mitchell SUMMARY OF CHARGESReceipt of Images of Minors Engaged in Sexually Explicit Conduct, in violation of Title 18, United States
Code, Section 2252(a)(2)Maximum Penalties: 5 year mandatory minimum, 20 year maximum; 5 years of supervised release
AGENCIESUnited States Postal Service
San Diego Internet Crimes Against Children Task ForceRepeat Offender Sentenced to Eight Years in Prison for Drug and Gun CrimesRead the Press Release
A federal felon who dealt prescription drugs and possessed a gun while on supervised release was sentenced today in U.S. District Court in Tacoma to eight years in prison and six months of supervised release, announced U.S. Attorney Jenny A. Durkan. EDWARD WOODRUFF, aka “Pretty Eddie,” --, was arrested in September 2012 following an investigation by the South Sound Gang Task Force. The investigation revealed WOODRUFF was selling large quantities of oxycodone pills, and that he possessed a firearm. WOODRUFF has both state and federal convictions which prohibit him from possessing guns. U.S. District Judge Ronald B. Leighton imposed the sentence.
According to records filed in the case, in July 2012 a person working with law enforcement purchased 100 oxycodone pills from WOODRUFF. In September 2012, court authorized search warrants were executed at a storage locker, WOODRUFF’s residence in Spanaway, an apartment he leased in Lakewood, and another apartment (of a relative) that he frequented in Tacoma. In the storage locker, law enforcement found a Mercedes Benz that WOODRUFF had been seen driving in connection with drug dealing. In the car, inside a shopping bag, was over $40,000 cash. In a plastic storage bin next to the car, police found a .45 caliber MasterPiece Arms semi-automatic pistol and over 100 rounds of .45 caliber ammunition. Forensic analysis revealed WOODRUFF’s fingerprint on the extended magazine of the gun. Additional cash, about 57 oxycodone pills and some marijuana, were found inside a safe in the Lakewood apartment. A bag containing approximately 1200 oxycodone pills was found hidden in a couch at the Tacoma apartment.
WOODRUFF has prior convictions in state court for drug distribution (1997) and assault (2002). He has federal convictions for Felon in Possession of a Firearm (two counts) and Possession of Cocaine with Intent to Distribute (2007). WOODRUFF was on supervised release on those federal convictions when these drug and gun crimes occurred.
The case was investigated by the South Sound Gang Task Force. The SSGTF is composed of members of the FBI Seattle Division (Tacoma Resident Agency), Lakewood and Tacoma Police Departments, the Washington State Patrol, the Washington State Department of Corrections, and the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF).
The case was prosecuted by Assistant United States Attorney Gregory A. Gruber.
Project Safe Neighborhoods Targets Communities Most Affected by Gun ViolenceRead the Press Release
St. Thomas, USVI - United States Attorney Ronald W. Sharpe announced today that as part of the Department of Justice’s Project Safe Neighborhoods (PSN) initiative, and in conjunction with the Virgin Islands Housing Authority (VIHA), a series of community meetings are presently taking place throughout the Virgin Islands to discuss and address criminal activity, including the escalating gun violence in the Virgin Islands. The goal of these meeting is to afford those persons most affected by gun violence an opportunity to meet and hear from law enforcement and other agencies charged with keeping our communities safe, and to provide a forum for community members to voice their concerns and needs.
The most recent meeting was held at the Community Center in Tutu High-Rise. During this lively two-hour event, a standing room only crowd heard from 14 Project Safe Neighborhoods (PSN) partners about ways to make the Tutu Community safer. The question and answer period following the presentations allowed residents and community members to voice their concerns about how to make their community safer, about the need for neighborhood cameras, and about the large number of guns entering the territory. Residents were also encouraged to complete a Crime Perception Survey, which was provided at the meeting. Once compiled and analyzed, these surveys will greatly assist law enforcement in identifying how violent crime is affecting our community, and how best to combat it.
Over the past several months, meetings have also been held at Oswald Harris Court, Contant Knolls, Bergs Home and Smith Bay in St. Thomas. The next meeting will be held at the Pearson Gardens Community Center, St. Thomas, on December 10, 2013 at 6:00 p.m., and a meeting is being planned for Grove Place in St. Croix. Follow-up meetings will also be held.
United States Attorney Sharpe noted that the U.S. Department of Justice’s Project Safe Neighborhoods is a nationwide commitment to reducing gun crime in America by marshaling federal and local resources to better locate, apprehend, and prosecute individuals who commit offenses involving firearms. United States Attorney Sharpe also commended the following PSN partners who are participating in these meetings and reaching out to the community: Virgin Islands Police Department, Virgin Islands Attorney General’s Office, Bureau of Alcohol Tobacco, Firearms and Explosives, Drug Enforcement Administration, U.S. Marshals Service, Crime Stoppers, Virgin Islands Housing Authority, My Brothers Workshop, Weed & Seed St. Thomas and St. Croix
“To end violent gun crime, we need to bring together law enforcement, prosecutors, community members, and community-based organizations,” United States Attorney Sharpe said. “Creating effective partnerships between the community and both law enforcement and non-law enforcement agencies is the first step in combating these crimes.”For more information about Project Safe Neighborhoods, please visit: www.psn.gov.
Pine Ridge Man Pleads Not Guilty to Theft of Government PropertyRead the Press Release
United States Attorney Brendan V. Johnson announced that a Pine Ridge, South Dakota, man has been indicted by a federal grand jury for Theft of Government Property and False Statement.
Michael Twiss, age 49, was indicted on November 19, 2013. Twiss appeared before U.S. Magistrate Judge Veronica L. Duffy on December 4, 2013, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 10 years in custody and/or a $250,000 fine, 3 years of supervised release, and $100 to the Federal Crime Victims Fund on each charge. Restitution may also be ordered.
The charges relate to Twiss illegally taking overtime payments in an amount greater than $1,000 while employed as a Wildland Fire Operations Specialist for the Bureau of Indian Affairs in 2009. Twiss then gave false statements concerning the theft to a special agent with the Office of Inspector General.
The charges are merely accusations and Twiss is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Office of Inspector General, U.S. Department of the Interior. Assistant U.S. Attorney Wayne Venhuizen is prosecuting the case.
Twiss was released on bond pending trial. A trial date has been set for February 18, 2014.
Phlebotomist Charged with Using False Identification Documents to Work at Local HospitalsRead 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), and R. Sean Baldwin, Chief, Fort Pierce Police Department, announce the arrest of William Evens Josma, 34, of Fort Pierce, for using the name, social security card, and employment authorization card of another person to obtain employment as a phlebotomist at local hospitals. Josma was arraigned in federal court yesterday before U.S. Magistrate Judge Frank J. Lynch, Jr. in Ft. Pierce, Florida.
The complaint alleges that from January 7, 2013 to November 2013, Josma worked as a phlebotomist at Indian River Medical Center under a false name. Josma is a Haitian national, and does not have immigration authorization to work in the United States. Josma used the name, social security card and employment authorization card of another person to satisfy the employment verification requirements of the Immigration and Nationality Act to obtain employment. Josma’s real identity was uncovered when he purchased a fraudulent immigration stamp from Haiti to make it appear that he had continued authorization to work in the United States. Josma also possessed a Florida driver’s license in the false identity, as well as a badge under that identity showing that he previously worked at Martin Memorial Health System as well.
The indictment charges Josma with two counts of making a false attestation on Form I-9, Employment Eligibility Verification, to satisfy a requirement of the employment verification system in violation of Title 18, United States Code, Section 1546(b)(3); two counts of using an identification document not issued to him to satisfy a requirement of the employment verification system in violation of Title 18, United States Code, Section 1546(b)(1); two counts of false representation of a social security number in violation of Title 42, United States Code, Section 408(a)(7)(B); and two counts of aggravated identity theft in violation of Title 18, United States Code, Section 1028A. If convicted, Josma faces up to five years in prison for the false attestation, use of an unlawful identification and false representation of a social security number counts, and a consecutive two years in prison for the aggravated identity theft count.
Mr. Ferrer commended the investigative efforts of ICE-HSI and the Fort Pierce Police Department. The case is being handled by Assistant U.S. Attorney Shaniek Maynard.
A complaint and indictment are only accusations, and a defendant is presumed innocent unless and until proven guilty.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Parma Heights Man Sentenced to Three Years in Prison, Ordered to Pay Nearly $1.2 Million for Tax FraudRead the Press Release
A Parma Heights man was sentenced to more than three years in prison and ordered to pay nearly $1.2 million in restitution, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, and Kathy Enstrom, IRS-Criminal Investigation Special Agent in Charge.
Bryan D. McCallum previously pleaded guilty to a two-count information charging him with a false claims conspiracy and with making 30 false claims. McCallum is 40 years old, according to court records.“Those individuals who engage in this type of financial fraud should know they will not go undetected and will be brought to justice,” Dettelbach said.
“This sentence sends an important message to America’s taxpayers who play by the rules that we have no tolerance for those who make up their own rules,” Enstrom said.
McCallum worked as an accountant/bookkeepr for two corporations owned and controlled by Brian D. Krantz, 46, of Twinsburg. These companies engaged in financial services and/or real estate investment business activities.
From approximately April 2009 through June 8, 2010, Krantz and McCallum conspired to make false claims for tax refunds using income tax returns filed with the IRS in the names of Krantz, companies formed by Krantz and McCallum, and several “shelf” companies purchased by Krantz. A “shelf” company is a corporate or other formal non-operating business entity established for the purpose of being held for sale to another person, according to court documents.
The scheme involved the use of fake IRS Forms 2439, titled “Notice to Shareholder of Undistributed Long-Term Capital,” which is a form to be issued by a regulated investment company (RIC) or real estate investment trust (REIT) to report undistributed capital gains and taxes withheld from those gains on behalf of the shareholders. Under federal tax law, RICs and REITs are entities that are not taxed on their earnings but instead pass those earnings to their shareholders who, in turn, have the obligation to report those earnings and any resulting tax liabilities on the shareholders’ income tax returns. The returns filed pursuant to the conspiracy claimed substantial amounts of Form 2439 withholding credits, when, in fact, none of the companies listed on the forms were actually RICs or REITs or had any undistributed capital gains or withheld taxes, according to court documents.
Krantz used more than $1 million of the refund proceeds to finance a real estate venture he established with other partners, known as Phoenix Ventures Partners LLC. Krantz and McCallum misled Krantz’s real estate partners to believe that a group of Colorado-based hard money lenders had provided the funds.
Krantz was pleaded guilty to earlier this year to a 31-count indictment related to filing income tax refunds totaling more than $8.8 million. The U.S. Treasury issued 17 refund checks totaling approximately $3,615,586 payable to Krantz and various corporations controlled by Krantz as a result of the alleged scheme, according to the court documents.
He is scheduled to be sentenced in March.
The government’s case is being prosecuted by Assistant United States Attorneys John M. Siegel and Justin J. Roberts, following an investigation by the Internal Revenue Service, Criminal Investigation.
Owner of New York Sportswear Distribution Business Sentenced for Tax FraudRead the Press Release
Harry Neuhoff, a resident of Brooklyn, N.Y., was sentenced to serve 12 months and one day in prison and three years supervised release for tax evasion, the Justice Department and Internal Revenue Service (IRS) announced today.
According to documents filed with the court, Neuhoff was the president and an owner of EVA TEES Inc., a wholesale distributor of sportswear. EVA TEES was formerly located in Long Island City, N.Y., and is presently located in Piscataway, N.J. From approximately 2006 to 2008, Neuhoff manipulated EVA TEES accounts through his accounting software program to delete cash sales from the general ledger accounts maintained on the computer accounting system. As a result, Neuhoff caused false corporate tax returns to be filed with the IRS that underreported the company’s gross receipts. During those years, Neuhoff’s behavior also resulted in his filing false personal income tax returns with the IRS. According to documents filed with the court, Neuhoff underreported the gross receipts of EVA TEES by at least $1.5 million using computer manipulation.
The case was investigated by IRS-Criminal Investigation. Trial Attorneys Mark Kotila and Karen E. Kelly of the Justice Department’s Tax Division prosecuted this case.
Mother and Son Sentenced for Heroin Distribution and Operating Fairview Heights “Drug House”Read the Press Release
The United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today that on December 5, 2013, Deborah A. Perkins and her son, Douglas A. Oliver, were sentenced in United States District Court for Distribution of Heroin and Maintaining Drug- Involved Premises.
Perkins, 66, was sentenced to 27 years in prison. Oliver, 47, received a sentence of 30 years in prison. Both defendants have been incarcerated since their arrest on February 14, 2013.
United States Attorney Stephen R. Wigginton stated, “I am proud that we were able to get these two extremely dangerous drug dealers off the streets for good. Heroin is the most deadly drug in the world. I hope the sentences imposed on Perkins and Oliver today will bring some measure of comfort and closure to the families of Jessica Williams and Jennifer Herling, the two young women who lost their lives. I also hope that other drug dealers in our district will take a long, hard look at the severe penalties imposed on Perkins and Oliver, and decide not to take the same risks.”
Prior to their arrests, Perkins and Oliver resided at a notorious drug house which Perkins owned and operated at 20 Kassing Drive, Fairview Heights, Illinois. Because the house was used between 2004 and 2013 as a drug distribution center, a federal judge ordered the residence forfeited.
On August 1, 2013, Perkins pled guilty to federal charges of Conspiracy to Distribute Heroin, Possession with Intent to Distribute Heroin, and Maintaining a Drug House. Oliver pled guilty to the same charges on August 13, 2013.
Oliver admitted that he had given heroin to both Williams and Herling at 20 Kassing Drive in exchange for sex. Both women overdosed and died. In March 2012, Oliver and Perkins moved Williams body from Fairview Heights to a wooded area in Washington Park, Illinois. Police discovered Williams’ body 16 days after her death. Herling died 6 months later, on September 29, 2012, in the basement of 20 Kassing Drive.
The investigation which resulted in the arrest and conviction of Perkins and Oliver was conducted by the Drug Enforcement Administration, the Fairview Heights, Illinois Police Department, and the St. Clair County Sheriff’s Office.
The case was prosecuted by Assistant United States Attorney Robert L. Garrison.
Members of Family Who Manufactured Homemade ‘Male Enhancement’ Drug Sentenced in Federal Conspiracy CaseRead the Press Release
LOS ANGELES – Three members of a Rowland Heights family involved in a home-based enterprise that manufactured a “male enhancement” drug that sold on the Internet and in retails stores nationwide have been sentenced for unlawfully importing tadalafil, the same active ingredient in the prescription drug Cialis.
Won Bae Kim, 61, was sentenced on Wednesday to 11 months in federal prison.
Two sons, Jong Ik Kim, 35, and Jong Heon Kim, 34, each were sentenced to one year probation, which will include six months of home detention.
The Kims were sentenced on Wednesday by United States District Judge Dean D. Pregerson, who also ordered Won Bae Kim to pay a $10,000 fine.
According to court documents, Won Bae Kim started a business named Kawa Health and imported pounds of tadalafil from China, which were used to manufacture a male enhancement drug that Kawa Health marketed under the name “Xzen 1200.” The tadalafil packages were delivered to commercial mailbox facilities, where the Kims were able to pick them up. After the Xzen 1200 pills were manufactured, Jong Ik Kim and Jong Heon Kim sold the drugs across the country, including to adult book stores. The packaging for the drugs did not disclose that tadalafil was an ingredient, which prompted the U.S. Food and Drug Administration to issue a warning about the product earlier this year. The investigation revealed that the Kims generated sales of more than $300,000 over a one-year period.
The operation was disrupted when U.S. Customs and Border Protection officials found that overseas packages intended for one of the mailboxes contained tadalafil. Agents of Department of Homeland Security’s Homeland Security Investigations then followed the delivery of the packages to a mailbox, when Won Bae Kim picked them up. Agents followed him back to his home and executed a search warrant, where they discovered large amounts of pills and packaging material for the Xzen product, as well as $13,000 in cash, which has been forfeited.
Release No. 13-139
Marietta Industrial Enterprises, Inc. Agrees to Pay $50,000 for Violating Clean Air ActRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
COLUMBUS, OHIO -- Marietta Industrial Enterprises, Inc. (MIE) has agreed to pay a $37,500 fine and make a $12,500 community service payment after pleading guilty to a felony charge of failing to report violations of the company’s permit in connection with its mineral processing operation. Company president William Scott Elliott pleaded guilty to a misdemeanor charge of being an accessory after the fact for failing to notify Ohio Environmental Protection Agency of the violations.
Carter Stewart, U.S. Attorney for the Southern District of Ohio, Randall K. Ashe, Special Agent in Charge of the U.S. Environmental Protection Agency (U.S. EPA), Ohio Attorney General Mike DeWine, and Scott J. Nally, Director of the Ohio Environmental Protection Agency (Ohio EPA) announced the pleas entered today before U.S. District Judge Algenon L. Marbley.
MIE’s plea agreement includes a recommendation that the company pay a fine of $37,500 and make a community service payment of $12,500 to the Warren Township Fire Department. Elliott’s plea agreement includes a recommended sentence of 48 consecutive hours in jail followed by five months and 28 days of home confinement with electronic monitoring. Judge Marbley will review the plea agreement before deciding whether or not to accept the terms and recommended sentences.
“The company has agreed to perform 200 hours of community service, with at least 100 hours being personally performed by Elliott, in addition to a three-year probation term for the company, which must conduct an environmental audit of their facilities and correct any deficiencies identified in that audit,” U.S. Attorney Stewart said. “These steps will ensure safety for the community and employees going forward.”
According to court documents, One of MIE’s manufacturing processes is crushing medium carbon ferromanganese alloy, referred to as medium carbon, in a mill line. Emissions from the mill lines are captured by equipment known as a baghouse using a large electric fan to ensure that air pollution from the facility is limited. According to court documents, company employees began turning off the fan when processing medium carbon sometime in 2006. In May 2009, Elliott learned that the baghouse fans were being turned off when medium carbon was crushed and put an end to the practice.MIE’s permit calls for the company to disclose any instances that the baghouse has not operated properly in its quarterly and annual reports to Ohio EPA. Between 2006 and 2009, MIE never reported that the baghouse fans were turned off during the processing of medium carbon. From July 19, 2009 through August 10, 2010, Elliott, on behalf of MIE, submitted reports to Ohio EPA. None of the reports stated that the baghouse fans were turned off during the processing of medium carbon.
“We will not tolerate an intentional failure to operate properly installed and permitted air pollution controls,” Ohio Attorney General Mike DeWine said. “This type of behavior threatens Ohioans with unnecessary pollutants.”
This case was jointly investigated by the Ohio Bureau of Criminal Investigation, Ohio EPA, and the U.S. EPA Criminal Investigation Division, all members of the Central Ohio Environmental Crimes Task Force. Special Assistant U.S. Attorney Brad Beeson and Assistant U.S. Attorney J. Michael Marous prosecuted the case.
Man Who Bought and Sold Stolen Personal Information Online Convicted of Participating in Racketeering OrganizationRead the Press Release
LAS VEGAS, Nev. – The first defendant to go to trial in “Operation Open Market,” an investigation of a sophisticated cybercrime organization that operated a world-wide online market place for stolen personal and financial information, was convicted today by a federal jury in Las Vegas, announced Daniel G. Bogden, United States Attorney for the District of Nevada and Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division.
David Ray Camez, 22, of Phoenix, Ariz., was convicted of one count of participating in a racketeer influenced corrupt organization and one count of conspiracy to participate in a racketeer influenced corrupt organization. Camez is scheduled to be sentenced on April 10, 2014, and faces up to 20 years in prison on each count and fines of up to $250,000. The trial began on Nov. 18, 2013.
“It is difficult to fathom the enormity and complexity of the Carder.su racketeering organization and its far-reaching tentacles across international borders,” said U.S. Attorney Bogden. “The Internet has provided sophisticated international criminals access to the United States and its citizens, and the ability and means to harm us. It has given new definition to reaching out and touching someone. This verdict and our charges against other members of this criminal organization demonstrate that we are likewise reaching out and touching them with our federal criminal justice system.”
“The actions of these computer hackers and identity thieves have harmed countless innocent Americans and seriously compromised our financial system and global commerce,” said Michael Harris, Assistant Special Agent in Charge of Homeland Security Investigations in Las Vegas. “These criminals may think they can escape detection by hiding behind their computer screens here and overseas, but as this verdict demonstrates, cyberspace is not a refuge from American justice.”
Camez was one of 39 charged in an indictment returned in January 2012. Five others have pleaded guilty, seven are scheduled for trial in February 2014, and the rest are fugitives. There were also 16 other defendants charged in the scheme in three separate indictments. Most of those defendants are also scheduled to go to trial in February.
The target of the investigation was an organization which called itself “Carder.su.” Investigation of the Carder.su organization began in March 2007, after the United States Secret Service, operating in conjunction with Homeland Security Investigations and other federal, state and local law enforcement agencies who participate in the Southwestern Identity Theft and Fraud Task Force (SWIFT), began investigating a pattern of credit and debit card fraud. A special agent initiated an undercover investigation called Open Market and assumed the identity as a member of the organization when it was in its infancy.
The investigation determined that members of the Carder.su organization, known as “carders,” were involved in large scale trafficking of compromised credit card account data and counterfeit identifications and credit cards, as well as money laundering, narcotics trafficking, and various types of computer crime. The organization operated an internet web portal called a forum, where members could purchase the illicitly obtained data and share knowledge of various fraud schemes. A second forum was also created to vet incoming new members. The forums were generally hosted within the former Soviet Union and the upper echelon of the organization resides within the former Soviet Union. It was estimated that in July 2011, there were over 5,500 members of the organization.
It was determined that members of the organization had different roles, including moderators who directed other members in carrying out activities; reviewers who examined and tested products, services, and contraband; vendors who advertised and sold products, services and contraband; and members. Members were required to successfully complete a number of security features designed to protect the organization from infiltration by law enforcement or members of rival criminal organizations. Camez became a member of the organization under the name “Bad Man” on June 22, 2008. Camez also used the name “doctorsex.” During 2009 and 2010, the undercover special agent had multiple contacts with Camez in which Camez purchased counterfeit Nevada and Arizona driver’s licenses. Investigators also intercepted and seized a package shipped to Camez from Pakistan which contained counterfeit credit and gift cards. During a search of Camez’ home in Phoenix in May 2010, agents recovered counterfeit credit cards, equipment used to manufacture counterfeit credit cards, counterfeit U.S. currency, and counterfeit identification documents. A search of Camez’ computer revealed software used to encode counterfeit credit cards and stolen identity information.
In addition to the U.S. Secret Service, Homeland Security Investigations and members of the SWIFT Task Force in Las Vegas, NASA’s Jet Propulsion Laboratory, Computer Crimes Division, also provided assistance in the investigation. The case was prosecuted by Assistant U.S. Attorneys Kimberly M. Frayn and Andrew W. Duncan, and Trial Attorney Jonathan Ophardt of the U.S. Department of Justice Organized Crime and Gang Section.
This law enforcement action is sponsored by 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.
Man Held Without Bond on Armed Robbery ChargesRead the Press Release
Indictment Charges Armed Robberies of East St. Louis Pawn Shop and Belleville Liquor Store
Timothy R. Collier, 47, has been ordered detained, that is held without bond, by a magistrate judge following a hearing, Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today.
Collier was indicted on November 20, 2013, in two counts of Interference with Commerce by Robbery, which is a violation of the Hobbs Act, and two counts of Use of a Firearm During a Crime of Violence, in connection with the armed robbery of East St. Louis Jewelry and Loan that occurred on April 25, 2013, and the armed robbery that occurred at Arena Liquor in Belleville on July 12, 2013.
The offenses charged in the indictment allege that on April 25, 2013, Collier took numerous items of jewelry and a firearm from the presence of the owner of East St. Louis Jewelry and Loan, by means of actual and threatened force, by brandishing and discharging a firearm and shooting the owner of East St. Louis Jewelry and Loan in the chest and head. The indictment also alleges that on July 12, 2013, Collier took United States Currency from the presence of an employee of Arena Liquor, by means of actual and threatened force, by brandishing a firearm.
If convicted of a violation of the Hobbs Act, Collier faces a term in prison of up to 20 years on each count, a fine of up to $250,000, or both, and a term of supervised release of up to 3 years. If convicted of the offense of Use of a Firearm During a Crime of Violence for the armed robbery of the East St. Louis Jewelry and Loan, Collier faces a minimum term in prison of 10 years up to a maximum term of Life, consecutive to, meaning in addition to, any term of imprisonment imposed on the Hobbs Act violations, as well as a fine of up to $250,000 and a term of supervised release of up to 5 years. Additionally, if convicted of a second offense of Use of a Firearm During a Crime of Violence for the armed robbery of Arena Liquor, Collier faces a term in prison of 25 years up to a maximum of Life, consecutive to the term of imprisonment imposed on the counts of conviction.
A trial date is currently set for January 27, 2014.
This case is being investigated by the Illinois State Police, the Federal Bureau of Investigation, the Belleville Police Department, and the East St. Louis Police Department as part of the Metro East Armed Robbery Initiative. The case is assigned to Assistant United States Attorney Ali Summers for prosecution.
Man from Mexico Sentenced for Conspiracy to Distribute MarijuanaRead the Press Release
United States Attorney Brendan V. Johnson announced that a man from Mexico convicted of Conspiracy to Distribute a Controlled Substance was sentenced on December 2, 2013, by U.S. Chief Judge Jeffery L. Viken.
Reyes Chavez-Rojo, age 25, was sentenced to 97 months in custody, 4 years supervised release, and a $100 special assessment to the Federal Crime Victims Fund.
Chavez-Rojo was indicted for Conspiracy to Distribute a Controlled Substance by a federal grand jury on May 15, 2012. He pled guilty on August 16, 2013.
Beginning no later than 2010 until May 15, 2012, Chavez-Rojo distributed in excess of 100 kilograms of marijuana to Abraham Romero, and Romero would then engage in further distribution within the District of South Dakota. Chavez-Rojo was involved in this conspiracy with more than five participants and was acting as an organizer or leader. Romero was previously sentenced to 120 months in custody.
This case was investigated by the Northern Plains Safe Trails Drug Enforcement Task Force, the Federal Bureau of Investigation, the Bureau of Indian Affairs Office of Justice Services, and the South Dakota Division of Criminal Investigation. Assistant U.S. Attorney Ted L. McBride prosecuted the case.
Chavez-Rojo was immediately turned over to the custody of the U.S. Marshals Service.
Lower Brule Man Charged with Assaulting, Resisting and Impeding A Federal OfficerRead the Press Release
United States Attorney Brendan V. Johnson announced that a Lower Brule, South Dakota, man has been indicted by a federal grand jury for Assaulting, Resisting and Impeding a Federal Officer.
Dru Peterson, age 26, was indicted on November 14, 2013. He appeared before U.S. Magistrate Judge Mark A. Moreno on December 3, 2013, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 20 years in custody and/or a $250,000 fine, 3 years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that on September 3, 2013, Peterson interfered with several officers while they were engaged in the performance of their official duties as federal law enforcement officers.
The charge is merely an accusation and Peterson is presumed innocent until and unless proven guilty.The investigation is being conducted by the Federal Bureau of Investigation. Assistant U.S. Attorney Meghan N. Dilges is prosecuting the case.
Peterson was remanded to the custody of the U.S. Marshals Service pending trial. A trial date has not been set.
Local Member of Violent Take-Over Style Bank Robbery Ring Sentenced to 13 Years in PrisonRead the Press Release
A Tacoma, Washington gang member was sentenced today to 13 years in prison for his role in a violent, take-over style bank robbery ring, announced U.S. Attorney Jenny A. Durkan. ANTHONY V. MOSLEY, 46, joined with six other defendants in a series of bank robberies in Washington, Ohio, and Michigan. Sometimes MOSLEY was the get-away driver, sometimes he was in the robbery team threatening and demanding money in the banks. He played a key role in the Western Washington robberies providing a place for the LA-based gang to stay, and obtaining rental cars in the names of an innocent associate. MOSLEY entered into the robbery ring just six weeks after getting out of federal prison for a supervised release violation in connection with a previous bank robbery conviction. At sentencing U.S. District Judge Richard A. Jones said the ring was “highly sophisticated… operating with military precision” and he noted that MOSLEY was a “utility player… whatever role was necessary, you fulfilled that role.”
“The robberies victimized bank tellers and bank customers – people who are forever changed just because they stood in the way of the defendant and his gang,” said U.S. Attorney Jenny A. Durkan. “I commend the FBI and the South Sound Gang Task Force for their innovative work to identify and arrest this bank robbery ring.”
According to records filed in the case, various members of the seven member ring participated in one or more of a string of takeover-style bank robberies in Washington, Ohio and Michigan. During the robberies, subjects entered the banks in groups, covered head to toe in loose clothing and gloves, and demanded money while jumping over teller counters. The four robberies in Washington were: the May 25, 2012 robbery of a Wells Fargo branch on Pacific Avenue South in Tacoma; the September 6, 2012, robbery of a U.S. Bank Branch on Bridgeport Way in Lakewood; and the December 20, 2012, robbery of a Wells Fargo Bank branch on 132nd Avenue NE in Kirkland. In their plea agreements, various members of the gang admitted to participating in different robberies in Saline, Ypsilanti, Ann Arbor, Temperance, and Jackson, Michigan, and Toledo, Ohio.
The other defendants in this case are Jeanine M. Daniels, 32; Charles A. Williams, 40; Kevin L. Brown, 38; Curtis W. Smith, 22; and Douglas L. Smith, 22, all of Los Angeles, California; and Janalisa Estrada, 33, of Hollywood, California. All have entered guilty pleas and have been sentenced, or will be sentenced by U.S. District Judge Richard A. Jones over the next few months.
The South Sound Gang Task Force (SSGTF) in Washington arrested five of the subjects on December 22, 2012 on state bank robbery charges. The SSGTF arrested the subjects as they prepared to board a Greyhound bus to Los Angeles, California. Investigators were waiting at the bus station, based upon information that the group frequently traveled to Los Angeles by Greyhound bus within days of a bank robbery.
The Tacoma-based SSGTF investigated the robberies in Washington in partnership with the Lakewood Police Department’s Gang Unit and the FBI Seattle Safe Streets Task Force. The SSGTF is composed of members of the FBI Seattle Division, Lakewood and Tacoma Police Departments, the Washington State Patrol, the Washington State Department of Corrections, and the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF). FBI entities nationwide collaborated in the investigation, including the Los Angeles Field Office and the Ann Arbor, Denver, and Toledo Resident Agencies.
The case is being prosecuted by Assistant United States Attorneys Michael Dion and Kate Crisham.
Lebanon Man Sentenced for Unlawful Possession of ExplosivesRead the Press Release
The United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today that Thomas Lee Stanton, 18, of Lebanon, Illinois, was sentenced in United States District Court in East St. Louis to 30 months in prison, to be followed by 3 years of supervised release, a $200 fine, and a $100 special assessment for the charge of unlawfully possessing destructive devices.
“Remember that these devices, despite the name, could maim or kill anyone nearby. Clearly, the Court was sending a message that there is no reason to fool with do-it-yourself explosive devices.” said United States Attorney Wigginton.
Stanton had previously admitted that on April 17, 2013, he possessed destructive devices including four “cricket” bombs, two Molotov cocktails, and other explosive making materials. Evidence at sentencing indicated that Stanton had hoarded and concealed other bomb-making components. Stanton had also made racist writings in his journals and school notes.
The case was investigated by the Federal Bureau of Investigation, the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the Illinois State Police, the St. Clair County Sheriff’s Department, the O’Fallon Police Department, the Lebanon Police Department, the Illinois Secretary of State Police Bomb Squad, the Scott Air Force Base Explosive Ordnance Disposal K-9 Unit, and O’Fallon Township High School Security Officers. The case is being prosecuted by Assistant United States Attorney Liam Coonan.
Lebanon County Man Charged with Million Dollar Investment Fraud SchemeRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced the filing of an Information in U.S. District Court in Harrisburg Thursday charging Christopher Burhans, age 64, of Lebanon County, Pennsylvania, with conspiracy to commit mail fraud.
According to United States Attorney Peter J. Smith, in or about 2003, Burhans started a private mortgage company known as Angelic Ventures. The stated business purpose of Angelic Ventures was to solicit private investors to provide money for private mortgages. Later, in about 2006, Burhans started a business known as Home Buyers Solutions, Inc. ("HBSI"). HBSI, like Angelic Ventures, was in the business of making private real estate loans financed with private investor funds. Burhans operated both businesses out of his home located at 847 Maple Street, Lebanon, Pa.
Burhans carried out the scheme to defraud the individuals who invested in Angelic Ventures and HBSI by placing advertisements in several farming newspapers, including "Fish Wrapper," "Die Botschaft," and "Lancaster Farming," announcing an investment opportunity with Angelic Ventures and HBSI. In the advertisement, Burhans represented that the investments were insured, secured, and promised rates of return as high as 12%.
Burhans falsely represented to investors that their money would be solely used to make loans for the purchase of real estate.Between on or about April 1, 2005, to on or about May 1, 2007, Burhans received and deposited into the Angelic Ventures Real Estate Escrow Account approximately $1,880,150.00 received from investors.
Between on or about November 2006, to on or about April 2008, Burhans received and deposited into the HBSI bank account approximately $450,000 received from HBSI investors.
In December 2009, Burhans wrote to Angelic Ventures and HBSI investors stating that due to the downturn in the economy, Angelic Ventures and HBSI were no longer in business. In the December 2009 letter, Burhans misrepresented to investors that the business losses "ate up even our reserves and all our own personal belongings." As of December 2009, Burhans owed Angelic Ventures and HBSI investors in excess of $1,000,000.
Burhans misappropriated much of the money he received form investors. He diverted money to other businesses he owned and for his own personal needs and expenses, including payment of a salary for himself, his wife and son. Burhans also used investor money to purchase multiple timeshares he used for vacation.
The investigation was conducted by the Federal Bureau of Investigations. The case is being prosecuted by Assistant U.S. Attorney Joseph J. Terz.
The U.S. Attorney’s Office also filed a plea agreement which must be approved by the District Court.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilty is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
In this case, the maximum penalty under the federal statute is five years’ imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
Leader of ‘Ghost Riders’ Motorcycle Gang Sentenced to Prison for Illegal Weapons PossessionRead the Press Release
A leader of the Ghost Riders motorcycle gang in Pierce County was sentenced today in U.S. District Court in Tacoma to five years in prison for possession of an unregistered short-barreled shotgun and being a felon in possession of explosives, announced U.S. Attorney Jenny A. Durkan. KARL TWILLEAGER, a/k/a “King Karl”, 66, of Spanaway, Washington, has been in custody since his property was searched on June 13, 2013 and the weapons were discovered. The explosives were being stored for a retaliatory attack on a rival gang. U.S. District Judge Ronald B. Leighton imposed the sentence.
“The possession of illegal firearms and explosives by violent felons endangers a whole community,” said U.S. Attorney Jenny A. Durkan. “This defendant and his gang planned a violent attack on rivals that could have caused serious injuries or deaths. Innocent bystanders could have been caught up in the carnage. The very act of storing those explosives illegally in the storage locker posed risks to the community should they be stolen or ignite accidently.”
According to the plea agreement signed in September 2013, ATF agents searched a Spanaway storage locker belonging to TWILLEAGER and found more than two sticks of Emulsion explosives and four blasting caps. They also recovered six firearms, including three rifles, two shotguns, and a handgun, as well as additional ammunition and empty ammunition magazines. Two days later they searched TWILLEAGER’s home and a shed on the property that was used as the Ghost Riders clubhouse. They seized multiple rounds of different calibers of ammunition, and six more firearms, including four handguns, a rifle, and a J.C. Higgins model 20 12-gauge short-barreled shotgun, with a barrel length of approximately 15.5 inches with no serial number. TWILLEAGER was convicted of second degree murder in Grant County, Washington in 1994 and is therefore prohibited from possessing firearms and explosives.
In asking for a five year sentence, prosecutors noted that the ‘Ghost Riders’ motorcycle gang was preparing for a violent attack. “The government believes that the gel explosives and at least some of the firearms were gathered for the purpose of a planned violent attack on ‘Uncle Sam’s Bar and Grill’ in Spanaway, known to be a favored hangout of a rival motorcycle gang, the Bandidos. This attack was to be in retaliation for Defendant Twilleager and about eight of his “brother” Ghost Riders having been tricked and assaulted at that very location on June 2, 2012 (almost exactly a year earlier),” prosecutors wrote in their sentencing memo.The case was investigated by the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF), with assistance from the Pierce County Sheriff’s Office Bomb Squad, the Washington State Patrol SWAT Team, the South Sound Gang Task Force, and the Seattle Police Department, and was prosecuted by Assistant United States Attorney Gregory A. Gruber.
Leader of Quarter-Billion Dollar Tax Fraud Scheme, Already Sentenced to 14 Years, Ordered to Pay $2.9 Million in RestitutionRead the Press Release
During Past 2 Years, 43 Defendants Linked to Inland Empire’s Old Quest Foundation Have Been Convicted, Including Attorney and 7 Tax Return Preparers.
SANTA ANA, California – Concluding sentencing proceedings in which he was already previously to serve a 14-year prison term, the former leader of the Fontana-based Old Quest Foundation was ordered this afternoon to pay $2,925,620 in restitution in relation to a tax fraud scheme that resulted in more than 400 fraudulent federal income tax returns being filed with the IRS that cumulatively sought more than $250 million in fraudulent refunds.
Arturo S. Ruiz, 55, of Moreno Valley, was sentenced by United States District Judge Josephine L. Staton, who issued the 168-month prison sentence on September 20.
The scheme run out of Old Quest was the largest tax refund fraud in history involving misuse of Original Issue Discount tax forms. The case against Ruiz and the other Old Quest defendants stems from Operation Stolen Treasures, an investigation conducted by Special Agents with IRS Criminal Investigation that led to 55 people being indicted by a federal grand jury in the fall of 2011.
Ruiz, who was the chief executive officer of Old Quest, was convicted at trial in January 2013 of one count of conspiracy to defraud the United States and 41 counts of filing false claims against the United States, including four of his own false federal tax returns. Old Quest’s president and second-in-command, Francisco J. Mendoza, also was convicted during the January trial, but died shortly before he was scheduled to be sentenced in November 2013.
Old Quest promoter Arturo Villarreal-Alba, 45, of Whittier, who was previously sentenced to eight years in prison, was ordered today to pay $462,239 in restitution to the IRS.
Also sentenced today was Old Quest promoter Ricardo Bonilla, 52, of Fontana , who received a prison term of 33 months.
The evidence presented at Ruiz and Mendoza’s trial and in court documents showed that Ruiz fraudulently told Old Quest customers they each could receive hundreds of thousands of dollars in tax refunds by accessing “secret government accounts” through a process that included the filing of IRS Forms 1099-OID. During presentations made across Southern California, members of the Old Quest conspiracy promoted the secret account theory and other “tax defier” arguments. In an attempt to give legitimacy to the scheme, Ruiz falsely told customers who attended seminars that Old Quest had employees who were attorneys, accountants, CPAs, and former IRS employees. Taxpayers who signed up were required to pay Old Quest fees as high as $10,000, and they were required to promise to “donate” to Old Quest 25 percent of any tax refunds they received.
In exchange for the payments, Old Quest prepared and filed false income tax returns, which routinely sought hundreds of thousands of dollars – and sometimes millions of dollars – in income tax refunds. In some cases, Old Quest filed multiple false tax returns on behalf of customers. During a search warrant executed at Old Quest’s offices, special agents with IRS Criminal Investigation seized several unfiled tax returns, including one signed tax return that falsely reported $10,500,106 in federal income tax had been withheld and fraudulently claimed a $6,868,675 tax refund. Although the IRS stopped most of the false refunds before they issued, several very large refunds issued, including one for $1,192,653.
Bank records and other evidence showed that Old Quest received approximately $2 million from customers who used the fraudulent OID scheme, as well as from tax refunds erroneously issued by the IRS. The evidence also showed that while IRS agents were searching Old Quest’s offices, Mendoza emptied more than $250,000 from one of Old Quest’s bank accounts, and then Ruiz hid those funds from authorities by depositing them into another bank account in a different name.
When customers received IRS letters warning that their tax returns were frivolous, Old Quest employees assured customers that the IRS sent letters only to “intimidate” them because the “IRS did not want to pay.” After several refund checks were erroneously issued and the IRS froze the bank accounts of the customers who had received them, Ruiz instructed their employees to open new accounts for customers at different banks in an attempt to avoid further IRS scrutiny. The IRS search of the Old Quest offices and computers in September 2009 revealed numerous emails and printouts of IRS publications warning of the exact same scheme that Ruiz was promoting.
Prior to the tax refund scheme, Ruiz had promoted a “land patent” program to many of the same customers, according to the evidence introduced at his trial. Under this fraudulent program, Ruiz promised to eliminate the customers’ mortgages through an obscure and mysterious process, again in exchange for substantial fees. The land patent program quickly failed, and dozens of customers lost their homes to foreclosure.
In addition to selling the fraudulent schemes to customers across the Southland, Ruiz and Mendoza failed to report hundreds of thousands of dollars of their own income, and Ruiz filed several false federal income tax returns for himself that fraudulently sought refunds. The evidence at trial showed that Ruiz bragged about not paying taxes for more than 25 years.Of the 55 defendants indicted as part of Operation Stolen Treasures, seven have been convicted at trial (which includes Mendoza), 36 have pleaded guilty, two have agreed to plead guilty, and eight are pending trial. One defendant remains a fugitive, and one defendant was acquitted.
Release No. 13-140
Kansas City Man Sentenced in Carjacking CaseRead the Press Release
KANSAS CITY, KAN. - A man from Kansas City, Kan., has been sentenced on federal charges arising from a carjacking and armed robbery, U.S. Attorney Barry Grissom said today.
Anthony L. Irvin, 19, Kansas City, Kan., was sentenced Friday to 207 months in federal prison. He pleaded guilty to one count of carjacking and one count of using a firearm in a crime of violence.
In his plea, Irvin admitted that on May 26, 2013, he and his co-defendants walked to a Stop Shop gas station at 6865 State Avenue in Kansas City, Kan., where they stole a 2004 Ford Freestar minivan. Irvin held the driver of the minivan at gunpoint while co-defendants Derrick Freeman and Terry Tillman took the driver’s wallet and keys. The defendants drove away in the minivan, with Irvin at the wheel.
When the defendants realized officers had spotted their vehicle, they led police on a 17-minute chase at speeds up to 112 miles per hour. The minivan wrecked in a plowed field near Leavenworth Road and North 184th Street in Basehor, Kan., where the defendants fled on foot. Freeman fired a handgun at a law enforcement officer before being arrested.
Co-defendant Derrick Freeman is awaiting sentencing.
Co-defendant Terry Tillman was sentenced to 10 years.Grissom commended the Kansas City, Kan., Police Department, the Wyandotte County Sheriff’s Department, the Kansas Highway Patrol, the Basehor Police Department, the Edwardsville Police Department, the Bonner Springs Police Department, the Leavenworth County Sheriff’s Department and Special Assistant U.S. Attorneys Erin Tomasic and Trent Krug for their work on the case.
Justice Department Reaches Settlement with Newseum to Improve Access for People with DisabilitiesRead the Press Release
The Department of Justice announced today that it has reached a settlement with Newseum Inc., which owns and operates the Newseum, to address alleged violations of the Americans with Disabilities Act (ADA). The settlement agreement resolves allegations that the Newseum, a museum of news and history in Washington, D.C., was operating exhibits and providing facilities that were not accessible to people with disabilities.
Under the settlement, the Newseum must take steps to ensure that all of its programs, exhibits and facilities are accessible to people with disabilities, including:
· Providing additional wheelchair spaces and companion seats in the Walter and Leonore Annenberg Theater;
· Providing assistive listening devices for patrons who are deaf or hard of hearing in the Newseum’s 15 theaters, and providing captioning and other auxiliary aids and services throughout its more than 20 galleries of exhibitions and interactive programs;
· Ensuring that the operating controls of all Newseum interactive programs are within the reach-range of people who use wheelchairs;
· Providing museum tours that are audio described and include tactile experiences for individuals who are blind or have impaired vision ; and
· Providing printed materials and maps in alternate formats (e.g., audio, large print and Braille).
“This agreement ensures that people with disabilities will have an equal opportunity to enjoy the Newseum as other visitors,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division. “The Justice Department is committed to knocking down these types of barriers, and we commend the Newseum for its innovative efforts to improve accessibility for all visitors.”
The agreement resolves a compliance review under the ADA. People interested in finding out more about the ADA, the Standards for Accessible Design or this agreement can call the department’s toll-free ADA Information Line at 1-800-514-0301 or 1-800-514-0383 (TTY) or visit its ADA website at www.ada.gov.
Justice Department Files Lawsuit to Stop Tennessee Man from Preparing Tax ReturnsRead the Press Release
The Department of Justice filed a civil lawsuit today in Memphis federal court to stop Grady Smith, who does business as One Price Refunds, from preparing federal tax returns. According to the complaint, Smith and One Price Refunds have prepared over 2,000 tax returns since 2009.
The complaint filed with the U.S. District Court for the Western District of Tennessee alleges that Smith understates his customers’ federal tax liabilities by reporting false or inflated business expenses, reporting false or inflated educational expenses and improperly claiming the earned income tax credit. In addition, the complaint alleges that Smith has prepared tax returns using fictitious taxpayer identification numbers, thereby obscuring his identity as the tax return preparer. According to the complaint, Smith’s activities may have caused a total of over $800,000 in harm to the government.
Return preparer fraud is one of the Internal Revenue Service’s Dirty Dozen Tax Scams for 2013, which can be viewed at www.irs.gov/uac/Newsroom/IRS-Releases-the-Dirty-Dozen-Tax-Scams-for-2013 . The Internal Revenue Service has some tips for choosing a tax preparer: www.irs.gov/Tax-Professionals/Choosing-a-Tax-Professional . In the past decade, the department’s Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department website at www.justice.gov/tax/taxpress2013.htm .
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Jury Finds Two New Haven Men Guilty of Narcotics Distribution OffensesRead the Press Release
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Deirdre M. Daly, Acting United States Attorney for the District of Connecticut, announced that a federal jury in New Haven today found MICHAEL THOMPSON, 34, and TYLON VAUGHN, also known as “Bucky B,” 35, both of New Haven, guilty of narcotics distribution offenses.
THOMPSON and VAUGHN and more than one hundred other individuals were charged as a result of “Operation Bloodline,” a joint law enforcement investigation targeting narcotics trafficking and gang violence in the Dwight-Kensington and Fair Haven sections of New Haven. Led by the DEA New Haven Task Force and the New Haven and Hamden Police Departments, the year-long investigation included the use of court-authorized wiretaps on numerous telephones, extensive physical surveillance, controlled purchases of narcotics, execution of search warrants, and seizures of narcotics and firearms.
According to the evidence at trial, THOMPSON received kilogram quantities of cocaine from suppliers, including co-defendant Christopher “White Boy Chris” Morley, which THOMPSON converted into crack cocaine and then sold to other narcotics distributors and customers. Morley also provided THOMPSON with quantities of oxycodone, which THOMPSON redistributed to others. At times, THOMPSON supplied powder cocaine to Morley.
The trial evidence further established that VAUGHN received distribution quantities of crack cocaine from co-defendant Britt Martin, also known as “Big Baby,” and that he distributed crack and marijuana, among other controlled substances, to customers in Fair Haven. In May and June 2011, investigators made two controlled purchases of crack from VAUGHN.
The jury found THOMPSON guilty of one count of conspiracy to possess with intent to distribute, and to distribute, five kilograms or more of cocaine, 280 grams or more of cocaine base (“crack cocaine”), and a quantity of oxycodone. VAUGHN was found guilty of one count of conspiracy to possess with intent to distribute, and to distribute, 280 grams of more of cocaine base and a quantity of marijuana. On these convictions, both defendants face a mandatory minimum term of imprisonment of 10 years and a maximum term of imprisonment of life. VAUGHN also was found guilty of two counts of distributing cocaine base, which carries a maximum term of imprisonment of 20 years, on each count.
Senior U.S. District Judge Ellen Bree Burns scheduled sentencing for both defendants for February 28, 2014.
THOMPSON and VAUGHN have been detained since May 22, 2012.
Morley and Martin have pleaded guilty and await sentencing.
This matter is being investigated by the Drug Enforcement Administration’s New Haven Task Force, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the New Haven, Hamden, West Haven, North Haven, Branford, Ansonia and Meriden Police Departments. The United States Marshals Service, the Connecticut State Police, the Connecticut Department of Correction, Parole and Community Services and the Milford, Hartford, New Britain, North Branford and Stratford Police Departments have provided valuable assistance to the investigation.
This case is being prosecuted by Assistant U.S. Attorneys S. Dave Vatti and Marc Silverman.
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[email protected]Jury Convicts Two Los Angeles Sheriff's Deputies of Mortgage FraudRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that two deputies of the Los Angeles County, Calif., Sheriff’s Department were convicted in federal court today for their roles in an $11 million mortgage fraud scheme.
James Arthur Nash, Jr., 43, and Arman Nshanian, 37, both of Corona, Calif., were each found guilty of conspiracy to commit wire fraud. In addition to the criminal conspiracy, Nash was convicted of four counts of wire fraud and Nshanian was convicted of two counts of wire fraud related to fax transmissions and emails that were sent across state lines during the mortgage application process.
Nash and Nshanian are among nine defendants who participated in a mortgage fraud scheme from early 2005 through Aug. 4, 2006. Mortgage lenders made loans of approximately $11,092,886 on 16 residential properties in Lee’s Summit, Liberty, Blue Springs, Parkville, Independence and Oak Grove, Mo. From that total, unbeknownst to the lenders, buyers received approximately $2,006,845 from the loan proceeds. The scheme resulted in a financial loss to mortgage lenders of nearly $5 million.
Co-defendants Leann Raejeana Turner, 44, of Blue Springs, Bruce Q. Williams, 44, of Kansas City, Kan., Carole L. Colson, 71, of Lake Worth, Fla., Anthony E. Hicks, 41, of Little Rock, Ark., Mark P. Billey, 40, of Buena Park, Calif., Zelda Ann Jackson, 40, of Newbury Park, Calif., and Linda Joyce Henry Johnson, 65, all of Corona, Calif., have all pleaded guilty to their roles in the conspiracy.
Turner and Jackson were real estate agents. Williams and Hicks were mortgage loan officers. Colson was a real estate broker. Billey and Johnson each purchased properties and Jackson assisted her husband in the purchase of a property.
Conspirators submitted fraudulent mortgage loan applications to purchase residential properties at inflated prices. The purchases were structured in such a way that the buyers would receive $100,000 cash back from the loan proceeds. The buyers obtained mortgage loans in excess of the actual sales prices to be paid to the seller, in order to receive the difference between the actual sales price and the inflated loan amount.
Turner and Colson listed and arranged for the sale of the homes at inflated prices and solicited buyers. In order to obtain the loan proceeds without the lenders’ knowledge, the buyers created fictitious businesses that issued false invoices that claimed the businesses had provided work and services for which they were entitled to receive loan proceeds.
Nash fraudulently purchased two residential properties in Blue Springs, Mo. He received $100,000 from each property. Nshanian fraudulently purchased a residential property in Lee’s Summit, Mo., and received $100,000.
Under federal statutes, Nash and Nshanian are each subject to a sentence of up to five years in federal prison without parole for the conspiracy, and up to 20 years in prison on each count of wire fraud. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Linda Parker Marshall. It was investigated by the FBI and IRS-Criminal Investigation.Jury Convicts Normal Illinois Man for Crack Cocaine and Marijuana Distribution ConspiracyRead the Press Release
Peoria, Ill. – A Normal, Ill., man, Richard George Martin, 34, faces mandatory life in prison following his conviction today in federal court in Peoria. Trial in the case began on Monday, Dec. 2, 2013. The jury deliberated for approximately three hours before finding Martin guilty of conspiracy to distribute and possess with the intent to distribute at least five kilograms of cocaine and 50 kilograms of marijuana from 1999 to 2011.
Martin’s conviction is the latest as a result of "Operation Prairie Eagle," a cooperative investigation targeting distribution of crack cocaine and marijuana in the Bloomington‑Normal area. The Organized Crime Drug Enforcement Task Force (OCDETF) investigation was led by the Normal Police Department and the Federal Bureau of Investigation. Assistant U.S. Attorney Greggory R. Walters is prosecuting the defendants charged as a result of the “Prairie Eagle” investigation, and was joined at trial by Assistant U.S. Attorney John H. Campbell. Since 2011, “Operation Prairie Eagle” has resulted in the conviction of 22 defendants for conspiracy to distribute and the distribution of controlled substances in the Bloomington-Normal area.
Martin is scheduled to be sentenced on Apr. 7, 2014, before U.S. District Judge Michael M. Mihm. Martin remains detained in the custody of the U.S. Marshals Service.
Jesus Sablan Palacios Found Guilty on Federal Firearm ChargesRead the Press Release
United States Attorney ALICIA A.G. LIMTIACO, U.S. Attorney for the Districts of Guam and the Northern Mariana Islands (NMI), announced that Jesus Sablan Palacios was found guilty on Wednesday, December 5, 2013, of the following charges: three counts of Felon in Possession of Firearm and/or Ammunition, and three counts of Unlawful User of a Controlled Substance in Possession of Firearm and/or Ammunition, in violation of Title 18 U.S.C. §§ 922(g)(1) and (3).
Defendant Palacios will be sentenced on March 14, 2014 in the U.S. District Court for the Northern Mariana Islands. Palacios is facing a mandatory minimum of 15 years imprisonment and a maximum sentence of life, under the armed career criminal sentencing enhancement.
The Indictment filed on August 22, 2013 charged that Defendant Palacios, after having been convicted of a crime, knowingly possessed six .22 caliber bullets, ten Winchester 38SPL .38 caliber bullets, eight .9 mm caliber bullets and one Ruger, Model 10/22, .22 caliber rifle, one .22 caliber rifle with its barrel and stock sawed off, and three .22 caliber bullets, all items that had been shipped and transported in interstate and foreign commerce. Defendant Palacios was also charged with being an unlawful user of a controlled substance while knowingly possessing these items.
U.S. Attorney Limtiaco stated, “The possession of firearms and drugs is a potentially deadly combination. Innocent civilians and law enforcement are unnecessarily placed at great risk of harm by the exposure to firearms in the wrong hands. Those who use firearms to protect their illegal activities must know that they will face hard time.” U.S. Attorney Limtiaco also stated, “Methamphetamine has been linked to an increase in violent crimes and results in devastating effects to individuals and to the community. Those who engage in the use of this illegal drug and found to be in possession of firearms will be prosecuted and face severe penalties.”
This case was investigated by Special Agents from the Bureau of Alcohol, Tobacco, Firearms and
explosives (ATF), and the Drug Enforcement Administration (DEA), and officers from the CNMI
Department of Public Safety. Assistant United States Attorneys Rami Badawy and Ross Naughton
prosecuted the case.Jamaican National Sentenced to 5 Years in Prison for Defrauding Hundreds of Senior Citizens in Jamaican Lottery ScamRead the Press Release
James L. Santelle, the United States Attorney for the Eastern District of Wisconsin, announced that O’Brain J. Lynch (age 28) of Jamaica was sentenced to 5 years in prison for his role in a Jamaican lottery scam. Lynch is believed to be the first Jamaican national charged in the United States for this type of fraud.
A Jamaican Lottery Scheme is a form of mass-marketing fraud committed via the internet, telemarketing, or mass mailings. Jamaican criminal organizations contact victims and identify themselves as lawyers, government officials, law enforcement agents, or lottery company officials. The potential victims are led to believe they won an international multi-million dollar lottery. The fraudulent telemarketers then inform the victims that in order to receive their winnings the victim needs to pay an advance fee. This fee is usually described as a tax, insurance payment, or customs duty that must be paid to release the winnings. The victims are instructed to send the funds via mail or wire transfer.
The scammers routinely involve victims to help facilitate the laundering of financial transactions by receiving and withdrawing funds from prepaid cards and receiving and sending wire transfers. In an attempt to conceal and layer the proceeds from the lottery scams, the scammers direct victims to send funds, knowingly and unknowingly, to other victims and associates of the scammers within the United States. These victims and co-conspirators then transfer the proceeds of this fraud to the scammers in Jamaica by wire transfers. The Jamaican criminal organizations have modified the lottery scam into other variations of telemarketing schemes to include redirecting individuals Social Security Administration (SSA) benefits, direct deposit, automatic debit, re-routing schemes and other identity theft schemes.
According to documents filed in court, in March 2012, the SSA learned that a social security recipient, from Glendale, Wisconsin, was receiving social security benefits in the name of other recipients and cashing in these benefits. Special Agents from the SSA - Office of Inspector General (OIG) discovered the recipient was sending this money to Jamaica because he believed he had won “The Jamaican Lottery.” He said he was contacted by an official from Global International who informed him that he won $2.5 million and two (2) Mercedes Benz vehicles in a sweepstakes. He was then advised that in order for him to collect the money and the cars, he had to pay taxes, customs duty, and other fees. He initially sent his own money to Jamaica, and, once he had depleted his own assets, he was directed, by telephone, to accept checks, Direct Express cards, and other cash value cards in the names of other people (who were also victims), cash them out and then send the money to Jamaica. As a result, numerous victims did not receive their social security benefits, and instead they were mailed to Jamaica. Investigators from SSA discovered that hundreds of victims throughout the United States were losing their social security benefits and their life savings either because they believed that they had won “The Jamaican Lottery” or because, as part of another telemarketing scheme, they revealed enough information about themselves that allowed the thieves to fraudulently divert their money.
SSA -OIG, the Postal Inspection Service (USPS) and U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) joined forces, and were able to identify O’Brain Lynch, as being one of the principal individuals involved in this scheme in Jamaica. HSI reported that Lynch is a resident of Montego Bay, Jamaica, and formerly was a lawful permanent resident of the United States. HSI learned that Lynch and his girlfriend were coming to the United States for a vacation. Lynch was arrested in February 2013.
Numerous records showed that Lynch and his co-actors were involved in a massive telemarketing scheme involving hundreds of victims. They would identify vulnerable victims, and change the recipients’ addresses to a third party. They then had the third party send the money to Jamaica or to others in the United States, who would then wire the money to Jamaica. At the direction of Lynch (and other working with him) numerous victims received SSA Direct Express, netSpend, Green Dot, and other types of cash value cards in the names of other victims. In addition, items were ordered in the United States by Lynch and his co-actors and were paid for using money fraudulently obtained through the scheme. These items, including jewelry, cell phones, a computer tablet, various electronics and other items were received by victims or other co-actors in the United States, and then sent to Jamaica where they could not be traced or recouped. Many of these items have now been linked directly to Lynch.
United States Attorney James L. Santelle commented: "The significant, five-year prison term that O'Brain Lynch will serve reflects, first, the calculated, pernicious nature and scope of his victimization of more than 50 people, many of whom suffered substantial losses of social security benefits monies on which they relied to live. Second, it responds with clarity and force to Lynch's criminal purpose and a-social intent in orchestrating a sophisticated scheme of fraudulent representations, false promises, and deceptive international financial transaction mechanisms. The United States Department of Justice--along with its highly professional and vigilant investigative partners in the Social Security Administration, Office of the Inspector General, the United States Postal Inspection Service, and the United States Immigration and Customs Enforcement Service, Homeland Security Investigations--has been and will remain highly focused on identifying, stopping, and prosecuting the perpetrators of these kinds of malevolent scams; those who take advantage of innocent people here in Eastern Wisconsin and throughout our nation through schemes like this will be charged and called to account for their crimes."
Santelle continued: "Our successful investigation and effective prosecution of this case should also serve an educational purpose to all of the good, law-abiding citizens we serve and protect: Offers and solicitations through the regular mail, telemarketing, or the internet that purport to confirm winnings or the recovery of large amounts of money--especially but not limited to those with international trappings--are virtually always fraudulent, especially when they contemplate the transfers or payments of monies to "recover" lottery or similar monetary awards. The best response to these types of notifications and requests is no response at all--aside from prompt reporting of them to local, state, and federal law enforcement authorities for follow-up action, domestic or international. In that connection, I commend not only the attorney and professional staff of my office for this important result but also the extremely timely, tenacious, and exhaustive work of the agents of the Social Security Administration, the Postal Inspection Service, and Homeland Security Investigations--all of whom are, in partnership and collaboration, responsible for shutting down Lynch's scam and bringing him to justice."
Special Agent in Charge William Cotter of the Social Security Administration, Office of Inspector General said, "The arrest and conviction of OBrain Lynch is a significant breakthrough in our investigation into this Jamaican Lottery Scheme, which has redirected millions of dollars in senior citizens' retirement benefits to thieves' accounts opened for the purpose of stealing this money. Lynch was a major organizer of this scam and he personally received or was responsible for defrauding hundreds of thousands of dollars from very vulnerable senior citizens. The Inspector General's Office for the Social Security Administration has worked very closely in this case with Homeland Security Investigations and the Postal Inspection Service and we will continue our collaborative effort to arrest and prosecute additional people involved with this scheme.""Jamaican lottery scammers like Mr. Lynch think nothing of fleecing older Americans of large amounts of money, often leaving their victims destitute and ashamed,” said HSI Chicago Special Agent in Charge Gary Hartwig. "In collaboration with our law enforcement partners, HSI will continue to use our unique cross-border authorities to combat this devastating crime and bring those responsible to justice."
"Americans have lost millions of dollars to criminals from countries around the world in foreign lottery scams, said Pete Zegarac, Inspector in Charge, Chicago Division U.S. Postal Inspection Service. When one family member is harmed by a foreign lottery scam, the impact is felt by all. Losses can be monumental, sometimes entire life savings are wiped out. The United States Postal Inspection Service will continue to partner with the Inspector General's Office for the Social Security Administration and Homeland Security Investigations, as well as other law enforcement agencies, regulatory agencies and the financial industry to combat cross border fraud targeting U.S. consumers, particularly the elderly. The Postal Inspection Service will continue to aggressively investigate these crimes and arrest people like Lynch, who ruthlessly exploit American consumers."
This matter was investigated by special agents from the Social Security Administration - Office of Inspector General, the Postal Inspection Service and Homeland Security Investigations. The case was prosecuted by Assistant United States Attorney Karine Moreno Taxman.