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29 January 2014
United States Attorney ChargesRead the Press Release
Hammond South Bend Fort Wayne
Fort Wayne, Indiana - The United States Attorney's Office announced that it filed an
Information on January 15, 2014: Crissy Till, a/k/a Crissy Cardone, a/k/a Crissy Young, 37, of Fort Wayne, Indiana, is charged in a two count Information with theft or embezzlement of money of the Social Security Administration between on or about March 2012 and continuing to on or about June 2012 and false representation in connection with military health care benefits on or about June 20, 2012. This charge was filed as a result of an investigation by the Social Security Administration and the United States Department of Health and Human Services. This case has been assigned to and will be prosecuted by Assistant United States Attorney Tina L. Nommay.
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.U.S. Postal Service Route Driver Pleads Guilty to Stealing MailRead the Press Release
Orlando, FL – United States Attorney A. Lee Bentley, III announces that Carlos M. Rodriguez (25, Apopka) yesterday pleaded guilty to theft of the United States mail. Rodriguez faces a maximum penalty of 10 years in federal prison. A sentencing date has not yet been set.
According to court documents, beginning in October 2013, and continuing until his arrest on November 20, 2013, Rodriguez, who was employed as a contract highway route driver in Central Florida, opened letters and packages entrusted to him for delivery, and often stole or discarded the contents of that mail. During an undercover operation investigating his thefts, Rodriguez failed to properly deliver a parcel placed in the mail, and was approached by agents. During an interview with agents, Rodriguez admitted that he stole mail while driving his route. He further admitted to stealing numerous items and throwing away items that he did not want, after opening the parcels. The items kept by Rodriguez included a laptop computer, a tablet, sunglasses, clothing, food, and alcohol. He also admitted to stealing gift cards, some of which he had on his person at the time. In a written statement, Rodriguez voluntarily said, in part, “The reason I did what I did was to make some extra money and see if I can get some good stuff.”
This case was investigated by the United States Postal Service, Office of Inspector General. It is being prosecuted by Assistant United States Attorney Daniel C. Irick.
U.S. Indicts Corporate Audit Director on Securities Fraud Charges for Allegedly Profiting $286,000 from Insider TradingRead the Press Release
CHICAGO — A certified public accountant who was involved in the auditing process at a publicly-traded company based in Chicago was indicted on federal fraud charges for allegedly engaging in insider trading of the company’s securities that made him an illegal profit of more than $286,000 in 2012. The defendant, STEVEN M. DOMBROWSKI, who was the director of corporate audit for Allscripts Healthcare Solutions, Inc., was charged with 16 counts of securities fraud in an indictment that was returned by a federal grand jury yesterday and announced today.
At the same time, the U.S. Securities and Exchange Commission announced that it filed a civil enforcement action involving the insider trading allegations against Dombrowski yesterday in U.S. District Court in Chicago.
Dombrowski, 49, of Chicago, will be arraigned on the criminal charges on a date yet to be determined in Federal Court.
According to the indictment, Dombrowski misused material nonpublic information he knew about Allscripts’ performance for the first quarter of 2012 and purchased put options and engaged in short sales of stock through a trading account in his wife’s maiden name that he controlled, which resulted in illegal profits of approximately $286,211. The indictment seeks forfeiture of that amount from Dombrowski.
Dombrowski and the employees he supervised were responsible for auditing and testing the processes and procedures Allscripts used to compute and report its financial performance. Allscripts provides information technology solutions to the healthcare industry and its common stock is traded on the NASDAQ stock market under the symbol MDRX.
Between April 10 and April 28, 2012, a quarterly blackout period was in effect at Allscripts. The blackout prohibited certain employees, including Dombrowski, who were given written notice and who had access to material nonpublic information, from engaging in insider trading 15 days before the end of a quarter and ending after the second full business day following the company’s quarterly earnings announcement.
Dombrowski allegedly learned in April 2012 through his employment that Allscripts first quarter financial results were going to be less favorable than market expectations when they were publicly announced on April 26, 2012. Throughout April, Dombrowski conducted securities transactions that he designed to be profitable if the price of Allscripts stock declined, including purchasing put options and short selling stock, which he knew was prohibited, the indictment alleges. Allscripts stock, in fact, declined when its 2012 first quarter announcement revealed lower sales, less revenue, and lower earnings per share than the first quarter of 2011.
After Allscripts stock declined on and after April 26, 2012, Dombrowski allegedly offset his Allscripts securities positions and profited approximately $286,211 from insider trading, the charges allege.
The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation. The SEC cooperated in the investigation.
The government is being represented by Assistant U.S. Attorneys Clifford C. Histed and Paul H. Tzur.
Each count of securities fraud carries a maximum penalty of 20 years in prison and a $5 million fine, and restitution is mandatory. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The public is reminded that an indictment is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Indictment
Two Ohio Residents Convicted for Drug Trafficking in Harrison CountyRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Chris Zumpetta-Parr, Public Affairs SpecialistSix Others Appear for Pleas and Sentencing
CLARKSBURG, WEST VIRGINIA – Two Chillicothe, Ohio, men entered pleas of guilty before Judge Irene M. Keeley for conspiring to sell drugs in Harrison County and for using firearms in furtherance of the alleged drug distribution.
According to United States Attorney William J. Ihlenfeld, II:
Dillon James BARILLARO, age 20, entered pleas of guilty to “Conspiracy to Distribute Cocaine and Heroin” and “Brandishing a Firearm in Connection with a Drug Trafficking Crime.” Nicholas Stephen GARDNER, age 21, entered pleas of guilty to “Conspiracy to Distribute Cocaine and Heroin” and “Possession of a Firearm in Connection with a Drug Trafficking Crime.” As part of their plea agreements, BARILLARO and GARDNER will forfeit Iphones, two firearms, ammunition, and $1,768 in United States Currency seized on November 4, 2013. Both men face up to 20 years in prison on the drug charges and BARILLARO faces a minimum of 7 years in prison on the brandishing charge, consecutive to any other sentence he may receive while GARDNER faces a minimum of 5 years in prison on the gun possession charge, consecutive to any other sentence he may receive.
The following individuals also appeared before Judge Keeley:
LYNN SPAW, age 44, of Clarksburg, was sentenced to 21 months in prison and six years of supervised release for “Distribution of Cocaine within 1,000 Feet of the Pierpont Community and Technical College.” SPAW’s co-defendant, JOSEPH GRANT, age 68, of Bridgeport, West Virginia, was sentenced to 2 years probation for “Maintaining a Drug-Involved Premise.” The Court also ordered the forfeiture of 4 cell phones and $1,968 seized in this investigation.
These cases were prosecuted by Assistant U.S. Attorney Shawn A. Morgan and investigated by the Greater Harrison County Drug & Violent Crimes Task Force, consisting of officers and agents from the Clarksburg Police Department, the Bridgeport Police Department, the West Virginia State Police, and the Drug Enforcement Administration. Investigative support for the task force is provided by the Bureau of Alcohol, Tobacco, Firearms & Explosives, the U.S. Marshals Service, and the U.S. Postal Inspection Service.
AARON SEIDEL, age 29, of Eurora, Illinois, was sentenced to 51 months in prison and 10 years of supervised release for “Traveling in Interstate commerce for the Purpose of Engaging in Illicit Sexual Conduct.” SEIDEL was remanded to the custody of the United States Marshal pending designation to a Federal institution. This case was prosecuted by Assistant United States Attorney Robert H. McWilliams, Jr. and investigated by the West Virginia State Police.
The following individuals appeared before Judge John S. Kaull:
ERIC SNEED, age 25, of Morgantown, West Virginia, entered a plea of guilty to “Distribution of Cocaine within 1,000 Feet of the Star City Playground.” SNEED, who is in custody pending sentencing, faces up to 40 years in prison. This case was prosecuted by Assistant U.S. Attorney Zelda E. Wesley and investigated by the West Virginia State Police-Bureau of Criminal Investigations.
JACE ROWAN, age 31, of Fairmont, West Virginia, entered a plea of guilty to “Possession of Child Pornography.” ROWAN, who is free on bond pending sentencing, faces up to 10 years in prison. This case was prosecuted by Assistant U.S. Attorney David J. Perri and investigated by the Federal Bureau of Investigation.
JAMES GRAY, age 42, an inmate at USP Hazelton, entered a plea of guilty to “Possession of a Prohibited Object” when staff found a cell phone hidden in GRAY’s locker. GRAY was sentenced to 3 months in prison to run consecutive with his current 180-month sentence. This case was prosecuted by Assistant U.S. Attorney Brandon S. Flower and investigated by the Special Investigative Services Staff at USP Hazelton.Tropical Fish Importer Pleads Guilty in New York Federal Court to Piranha Import ViolationsRead the Press Release
Joel Rakower, along with his solely-owned corporation, Transship Discounts Ltd., pleaded guilty today in federal court in Brooklyn, N.Y., to violating the Lacey Act by mislabeling imported piranhas, announced Acting Assistant Attorney General Robert G. Dreher for the Environment and Natural Resources Division of the Department of Justice and Queens County District Attorney Richard A. Brown.
In the plea agreement, Rakower admitted that his company purchased piranhas from a Hong Kong tropical fish supplier and imported them to Queens, N.Y. Each such import must be accompanied by a packing list describing what wildlife is contained in the package being imported, and the importer must provide this packing list to the United States Fish and Wildlife Service upon import for inspection. In March of 2011, shortly after New York City prohibited possession of piranhas, Rakower instructed the foreign supplier to falsely label the piranhas on packing lists as silver tetras, a common and unaggressive aquarium fish. Over the course of 2011 and 2012, Transship submitted packing lists to the Fish and Wildlife Service containing false identifications of 39,548 piranhas, worth approximately $37,376, which Transship then sold to fish retailers in several states.
“Rakower flouted federal laws meant to protect people and the environment from the illegal trade in wildlife species,” said Acting Assistant Attorney General Dreher. “Mislabeling imported wildlife presents dangers to the public and the environment and we will continue to prosecute these cases.”
Under the plea agreements, Rakower agreed to pay a $3,000 fine. Transship agreed to serve a two-year period of probation, pay a $35,000 fine and pay $35,000 in restitution to the State of New York’s Department of Environmental Conservation Division of Law Enforcement. Both parties will be sentenced on April 24, 2014.
Piranhas are freshwater fish originating from South American rivers such as the Amazon, Orinoco, Guyana and the Sao Francisco river systems. Piranhas are extremely aggressive and territorial, feeding on insects, fish, and larger prey such as amphibians, reptiles and mammals. As a result of piranhas’ aggressiveness, 25 states have either banned or regulated piranhas, making them illegal to own or sell. Piranhas, an injurious species, could pose a serious risk if they escaped into native water systems, potentially damaging ecosystems through aggressive predation or injuring people or pets. Tropical fish enthusiasts can contribute to this possibility by releasing piranhas into the wild when they grow too large for a tank. Although piranhas originate from tropical waters, they are able to withstand much cooler water temperatures, creating fear that they may even become established in more northern US waters. Effective regulation of piranha possession and sales within the United States depends on accurate reporting of piranha imports; concealing the fish upon import facilitates their entry into the black market in states that have banned or strictly regulated piranhas to protect state waters and ecosystems.
“Driven by greed and without regard for the health and safety of people or the environment, the defendant and his company illegally trafficked in piranha by falsely labeling the imported predatory freshwater fish as being silver tetras, a far more benign fish often kept in home aquariums and having a far less street value than piranha,” said District Attorney Brown. “I thank the New York State Department of Environmental Conservation and our federal colleagues – the U.S. Fish and Wildlife Service and the United States Department of Justice’s Environment and Natural Resources Division – for providing a reasonable and appropriate resolution of the case.”
This case was investigated by the United States Fish and Wildlife Service in conjunction with the New York State Department of Environmental Conservation Division of Law Enforcement, and is being prosecuted by Cassandra Barnum, a trial attorney in the Environmental Crimes Section of the U.S. Department of Justice’s Environment and Natural Resources Division.Tax Preparer Arrested for Allegedly Stealing More Than $220,000 from the GovernmentRead the Press Release
LAREDO, Texas – Michelle A. Morin has been arrested following the return of a 14-count indictment alleging she aided and assisted in the preparation of false and fraudulent income tax returns, announced United States Attorney Kenneth Magidson.
Morin was arrested yesterday on the sealed indictment, returned Wednesday, Jan. 22, 2014. It was unsealed this morning as she appeared before US. Magistrate Court Judge Scott Hacker, at which time she was permitted release upon posting a $75,000 cash/surety bond and surrendering her U.S. passport.
The indictment alleges that between tax years of 2007 to 2010, Morin aided and assisted in the preparation of U.S. Individual Income Tax Returns Forms 1040. The forms were allegedly false and fraudulent. According to allegations, the forms represented taxpayers were entitled to claim specified amounts in business losses, interest and taxes paid, gifts to charity, job expenses and miscellaneous deductions as well as residential energy credits. Morin knew the taxpayers were not entitled to claim the deductions, according to the charges.
Morin is accused of assisting in the preparation of 14 fraudulent tax returns for a total of seven different taxpayers during the four-year-period, resulting in a total tax harm of more than $220,000 to the United States.
If convicted, Morin faces a maximum sentence of three years in prison and a $250,000 fine on each count. This case was investigated by the IRS-Criminal Investigation and is being prosecuted by Assistant United States Attorney Sanjeev Bhasker.
A defendant is presumed innocent unless and until convicted through due process of law.Statement of U.S. Attorney Jenny A. Durkan Regarding Seattle Police Department LeadershipRead the Press Release
“True and effective reform of the Seattle Police Department will require steady work and strong leadership. Today Mayor Murray continued to show such leadership, making structural changes to ensure compliance and reform efforts are unified and come from the top. We have met with Interim Chief Harry Bailey and believe he is strongly committed to constitutional and effective policing. He and the Mayor have made public safety and reform the top priorities of the Department and have set an important tone. They understand both the challenges police officers face, and that those officers must have public trust to succeed.
Next week, the acting Assistant Attorney General of the Civil Rights Division of the Justice Department (Jocelyn Samuels) and I will be meeting with the Mayor, Chief Bailey and other elected officials of the City of Seattle, along with the Monitor, and members of the police department. We will work together to identify and agree on the reform goals for 2014, discuss structural changes in SPD, and work to ensure everyone is moving towards the same goals. The next several months are critical to the reform process, and the commitments by all parts of City government are essential for success.Done right, the new Chief of Police will have the necessary framework to lead the Seattle Police Department to be the national model for urban policing.”
Stamford Man Sentenced to Federal Prison for Operating Illegal Sports Gambling BusinessRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that STEPHEN JOYCE, 45, of Stamford, was sentenced today by Senior U.S. District Judge Alfred V. Covello in Hartford to 12 months of imprisonment, followed by three years of supervised release, for operating an illegal sports gambling business. JOYCE was also order to forfeit $175,000 and a pay a $3,000 fine.
According to court documents and statements made in court, between January 2008 and August 2011, JOYCE led a lucrative illegal sports bookmaking operation in Stamford that involved at least five other bookmakers.
On July 27, 2011, investigators conducted a court-authorized search of JOYCE’s Stamford residence and seized extensive gambling records, a laptop computer and other items.
On September 24, 2013, JOYCE pleaded guilty to one count of operating an illegal gambling business.
This matter was investigated by the FBI Fairfield County Organized Crime Task Force, the Internal Revenue Service – Criminal Investigation, the Stamford Police Department, the Bridgeport Police Department and the Connecticut State Police. This case was prosecuted by Assistant U.S. Attorney Hal Chen.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722 [email protected]Stamford Man Sentenced to 21 Months in Prison for Role in Organized Crime-backed Gambling BusinessesRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that DOUGLAS CORBIN, 52,of Stamford, was sentenced today by U.S. District Judge Vanessa L. Bryant in Hartford to 21 months of imprisonment, followed by three years of supervised release, for his involvement in organized crime-controlled illegal gambling businesses. CORBIN was also ordered to forfeit $100,000.
According to court documents and statements made in court, after a long-term investigation led by the FBI Fairfield County Organized Crime Task Force, the Internal Revenue Service – Criminal Investigation and the Stamford Police Department, CORBIN, Dean DePreta, Richard Uva and 17 other individuals were charged with various offenses related to their involvement in an illegal Internet sports bookmaking operation and illegal card gambling clubs. As part of the conspiracy, DePreta and Uva were involved in the collection and payment of “tribute” payments to Gambino organized crime family associates in New York.
The investigation, which included the use of court-authorized wiretaps, revealed that CORBIN was involved in a large-scale sports bookmaking operation in which gamblers placed bets with offshore Internet sports-gambling websites, particularly www.44wager.com based in Costa Rica.
FBI analysis of the sports-betting web site utilized by the defendants determined that the total gross revenues of the Stamford-based gambling operation were nearly $1.7 million from October 2010 to June 2011.
In addition, CORBIN and others, operated a card gambling club at 514 Glenbrook Road in Stamford, where a house percentage, commonly referred to as a “rake,” was collected from every hand played.
On June 20, 2013, CORBIN pleaded guilty to one count of conspiring to violate the federal Racketeer Influenced and Corrupt Organizations Act (RICO).
DePreta and Uva pleaded guilty to the same charge. On October 9, 2013, DePreta was sentenced to 71 months of imprisonment and ordered to forfeit $300,000. On October 24, 2013, Uva was sentenced to 46 months of imprisonment and ordered to forfeit $250,000.
This matter is being investigated by the FBI Fairfield County Organized Crime Task Force, the Internal Revenue Service – Criminal Investigation, the Stamford Police Department, the Bridgeport Police Department and the Connecticut State Police. This case is being prosecuted by Assistant U.S. Attorneys Hal Chen and Peter Jongbloed.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722 [email protected]St. Charles Pleads Guilty to Theft of Federal FundsRead the Press Release
St. Louis, MO - WILLIAM NAES, of St. Charles, pled guilty to theft of government funds for his improper receipt of $150,480 in disability benefits over eight years. Naes admitted that he earned significant income running a tax preparation business between 2005 and 2013 and omitted that work and income from documents he submitted to the Social Security Administration in connection with his disability status.
Naes faces up to 10 years imprisonment and a $250,000 fine for his crime. Restitution to the Social Security Administration is also mandatory.
Judge E. Richard Webber accepted his guilty plea this morning and has scheduled sentencing for April 24, 2014. Naes remains in custody pending sentencing.
The case was investigated by the Social Security Administration Office of Inspector General and the Treasury Department. Assistant United States Attorney Tom Albus is handling the cased for the U.S. Attorney’s Office.
Spring Hill Company Owners Sentenced to PrisonFor Harboring Undocumented WorkersRead the Press Release
KANSAS CITY, KAN. - The owners of a framing company in Spring Hill, Kan., were sentenced Wednesday to federal prison for harboring undocumented workers, U.S. Attorney Barry Grissom said.
James Humbert, 45, owner of Advantage Framing Systems, Inc., was sentenced to a year and a day in federal prison.
Kimberly Humbert, 47, wife of James Humbert and co-owner of company, was sentenced to a year and a day in federal prison
Charles Stevens II, 51, brother of Kim Humbert and part-owner of the company, was sentenced to a year and a day in federal prison.The company provided local builders and contractors with engineered floor, pre-built wall panel, and roof truss systems, along with onsite framing erection labor.
Each of the three defendants pleaded guilty to one count of conspiracy to harbor illegal aliens for commercial advantage. In their pleas, they admitted:
- In March 2012, the U.S. Department of Homeland Security and the Internal Revenue Service received information that the owners of company engaged foreign citizens who were not lawfully present in the United States.
- To pay undocumented workers who were members of framing crews, the defendants devised a method of payment requiring crew leaders to obtain insurance. The company paid the crew leaders, who were responsible for paying the undocumented workers on their crews.
- The company paid approximately $4.6 million to framing crews while the defendants were aware that some of the crew leaders and their crew members were not lawfully present in the United States.
Grissom commended the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the Internal Revenue Service and Assistant U.S. Attorney Jabari Wamble for their work on the case.
Sex Offender Admits Failing to RegisterRead the Press Release
POCATELLO —Tyler Zane Clem, 21, of North Little Rock, Arkansas, pleaded guilty today to failing to register as a sex offender, U.S. Attorney Wendy J. Olson announced. Clem was indicted by a federal grand Jury in Pocatello on August 28, 2013.
According to the plea agreement, Clem was convicted in June 2012 of sexual assault in the second degree in Arkansas and required to register as a sex offender. Clem left a half-way house in North Little Rock, Arkansas, on June 28, 2013, and eventually traveled to Pocatello, Idaho, where he was arrested on August 9, 2013. Although Clem had registered as a sex offender when living in Arkansas, he failed to update his registry after leaving the half-way house and did not register in Idaho after his arrival, as is required by law.
The charge of failure to register as a sex offender is punishable by up to ten years in prison, a maximum fine of $250,000, and five years up to lifetime supervised release.
Clem is set for sentencing on April 22, 2014, before Chief U.S. District Judge B. Lynn Winmill at the federal courthouse in Pocatello.
The case was investigated by the U.S. Marshals Service, with the assistance of the Pocatello Police Department.
Clem was prosecuted for a violation of the Sex Offender Registration and Notification Act (SORNA) passed by Congress in 2006. The Act requires sex offenders to register and keep their registration current in each jurisdiction where they reside. Violations of SORNA can be prosecuted in federal court.
Seven Ohio Oncologists Ordered to Pay $2.6 MillionRead the Press Release
Seven Ohio oncologists have been ordered to collectively pay nearly $2.6 million after pleading guilty to importing cancer medications that had not been approved by the Federal Drug Administration, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
The doctors pleaded guilty to causing the shipment of misbranded drugs, a misdemeanor violation of the Food, Drug and Cosmetic Act. They were sentenced to probation and ordered to pay fines and restitution. Their names, ages, the city where they practiced medicine and the amount they were ordered to pay are as follows:
Ranjan Bhandari, 56, Liverpool, $1,139,532.
Timmappa Bidari, 68, Parma, $158,418.
David Fishman, 62, Euclid, $150,000.
Su-Chiao Kuo, 60, Brunswick, $179,840.
Marwan Massouh, 54, Westlake, $609,150.
Poornanand Palaparty, 62, Cleveland, $128,160.
Hassan Tahsildar, 55, Euclid, $179,316.
“These doctors used drugs that had not been approved by the FDA,” Dettelbach said. “Our office is committed to working with our partners to make sure patients are getting medicine that has been properly inspected.”
Antoinette V. Henry, Special Agent in Charge, FDA's Office of Criminal Investigations, said: “FDA's regulatory standards are designed to ensure the safety and quality of the medical devices and drugs distributed to American consumers. We will continue to work to investigate all persons, including medical professionals, who disregard regulatory requirements and jeopardize the public health by participating in the distribution of misbranded products.”
“The introduction of misbranded prescription medications and the subsequent billing of Medicare for such medication is improper and illegal,” said Lamont Pugh III, Special Agent in Charge, U.S. Department of Health & Human Services, Office of Inspector General - Chicago Region. “This conduct is potentially harmful to patients as it circumvents the laws that were enacted to ensure medications are safe for use and further squanders vital taxpayer dollars.
“The OIG will continue to work with our law enforcement partners to ensure that these types of violations are identified, investigated and prosecuted to the fullest extent of the law.”
The doctors are accused of obtaining drugs, including Zometa, Kytril, Taxotere, Gemzar, Eloxatin and others, from outside the United States, where the drugs were not approved by the FDA, according to the charges.
A drug may be considered misbranded even if it is identical in composition to an FDA-approved drug (that is, a drug labeled and packaged in compliance with the FDA’s standards) and even if it was made by the same manufacturer in the same facility as the FDA-approved version.
These cases were prosecuted by Assistant U.S. Attorneys Michael L. Collyer and James L. Bickett following investigations by the FDA – Office of Criminal Investigations and the Department of Health and Human Services – Office of Inspector General.
Anyone suspecting health care fraud, waste or abuse can report it by calling the U.S. Department of Health and Human Services, Office of Inspector General at 800-447-8477. To learn more about health care fraud prevention and enforcement go to www.stopmedicarefraud.gov
Seattle Man Indicted for Sex TraffickingRead the Press Release
A Seattle man has been indicted by the grand jury for sex trafficking and transporting a victim for purposes of prostitution, announced U.S. Attorney Jenny A. Durkan. DESMOND TREVAIN MANAGO, 25, will make his initial appearance in U.S. District Court later this week. According to the indictment, between October and December 2012, MANAGO, through force, fraud and coercion caused a female victim to engage in commercial sex acts. Count two of the indictment alleges that MANAGO transported the female victim to Idaho, Colorado, Arizona, and California, and elsewhere, to engage in prostitution and sexual activity. Sex trafficking is punishable by a mandatory minimum 15 years in prison up to life in prison. Transporting for purposes of prostitution is punishable by up to 20 years in prison.
MANAGO has been in the King County Jail since October 3, 2013 when he was arrested at a traffic stop for outstanding warrants. He will be transferred to federal custody for arraignment on the indictment.
The charges contained in the indictment are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.
The case was investigated by the FBI, King County Sheriff’s Office and Tacoma Police Department. The case is being prosecuted by Assistant United States Attorneys Kate Crisham and Ye-Ting Woo.
President and Vice-President of Luxury Tax, Inc. Convicted of Tax Refund Fraud Utilizing Stolen Personal Identifying Information of Identity Theft VictimsRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Jose A. Gonzalez, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), and Scott J. Israel, Sheriff, Broward County Sheriff’s Office, announce today the conviction of Camilla Gonzalez, 29, and Patricia Alcime, 29, both of Lauderhill, FL, after a two day jury trial, in connection with a tax refund scheme that used stolen social security and other personal identifying information to file false online tax returns that resulted in the issuance of numerous fraudulent tax refunds by the IRS.
Specifically, Gonzalez was convicted of one count of conspiracy to commit false claims, in violation of Title 18, United States Code, Section 286, two counts of theft of public money, in violation of Title 18, United States Code, Section 641, and two counts of aggravated identity theft, in violation of Title 18, United States Code, Section 1028A. Defendant Alcime was convicted of one count of conspiracy to commit false claims, in violation of Title 18, United States Code, Section 286, three counts of theft of public money, in violation of Title 18, United States Code, Section 641, and three counts of aggravated identity theft, in violation of Title 18, United States Code, Section 1028A. Sentencing has been scheduled for April 9, 2014 at 1:30 p.m. before U.S. District Judge William P. Dimitrouleas in Ft. Lauderdale.
At sentencing, Gonzalez and Alcime each face a maximum statutory sentence of up to ten years in prison on each of the theft of public money and conspiracy to commit false claim counts, and a mandatory consecutive two years in prison on the aggravated identity theft counts. The defendants will also forfeit $511,801.28 in U.S. currency that had been frozen by SunTrust Bank.
As alleged in the Indictment and in-court statements, and thereafter proven in court, between January 15, 2011 and continuing until on or about October 20, 2011, Camilla Gonzalez and Patricia Alcime conspired to defraud the United States by obtaining and aiding to obtain the payment or allowance of false, fictitious, and fraudulent claims. It was the object of the conspiracy that the defendants enrich themselves, by obtaining and utilizing stolen means of identification to file false and fraudulent federal income tax returns claiming tax refunds to which they were not entitled.
In the instant case, Camilla Gonzalez and Patricia Alcime obtained personal identifying information of numerous identity theft victims, including their names, dates of birth, and Social Security numbers. The defendants utilized this information to electronically file false and fraudulent federal income tax returns without the knowledge or authorization of the identity theft victims, utilizing the Electronic Filing Identification Number (EFIN) assigned to Luxury Tax Inc. and claiming refunds to which they were not entitled from the IRS. Defendants Camilla Gonzalez and Patricia Alcime thereafter directed the IRS that the fraudulently claimed refunds be direct deposited into Luxury Tax, Inc. bank accounts at JP Morgan Chase Bank and SunTrust Bank or onto pre-paid reloadable debit card accounts.
Once the bank accounts or pre-paid reloadable debit cards had been funded by the Department of the Treasury, Camilla Gonzalez and Patricia Alcime would thereafter withdraw the funds by making withdrawals at local automated teller machines, transfers to other accounts under their control or to merchants directly, or would utilize the debit cards associated with the Luxury Tax Inc. bank accounts to make everyday purchases, including point of sale transactions at various local businesses and merchants.
In total, Camilla Gonzalez filed 621 fraudulent 2010 tax returns on behalf of unsuspecting identity theft victims, claiming $1,738,639.00 in fraudulent refunds. The IRS subsequently paid out $1,858,386.00 in refunds directly to accounts under her control. Patricia Alcime filed at least 92 fraudulent 2010 tax returns on behalf of unsuspecting identity theft victims, claiming $222,652.00 in fraudulent refunds. The IRS subsequently paid out $203,831.00 in refunds directly to accounts under the control of both Camilla Gonzalez and Patricia Alcime.
Mr. Ferrer commended the investigative efforts of IRS-CI and BSO. This case is being handled by Assistant U.S. Attorney Marc Anton.
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.
Port St. Lucie Broker Pleads Guilty to Wire Fraud Embezzlement SchemeRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Michael B. Steinbach, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, and Danny Banks, Special Agent in Charge, Florida Department of Law Enforcement (FDLE), announce today that defendant Paul Elvidge, 53, of Port St. Lucie, FL, pled guilty to wire fraud and aggravated identity theft for embezzling more than $1,000,000 from client investment accounts while acting as a securities broker for Cape Securities, Inc. and Seacoast Investor Services, Inc.
Elvidge pled guilty before U.S. District Judge Jose E. Martinez to eight counts of wire fraud, in violation of Title 18, United States Code, Section 1343, and one count of aggravated identity theft, in violation of Title 18, United States Code, Section 1028A. Elvidge faces a maximum statutory sentence of up to twenty years in prison on each of the wire fraud counts, and a consecutive penalty of two years in prison on the aggravated identity theft count.
According to court pleadings, Elvidge managed and operated Seacoast Investor Services, which later was purchased by Cape Securities, as a brokerage and investment firm in Port St. Lucie. As a registered representative and stockbroker, Elvidge had access to clients’ brokerage accounts and was able to direct wire transfers from these brokerage accounts. From July 2010 to October 2012, Elvidge Jr. embezzled approximately $1,113,594 from client accounts by preparing fraudulent forms and forging account holders’ signatures. Elvidge Jr. used the fraudulently obtained monies to pay for personal and business expenses, and to fund his personal day-trading activities.
Mr. Ferrer commended the investigative efforts of the FBI and FDLE. This case is being prosecuted by Assistant U.S. Attorney Shaniek Maynard.
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.
Owner of Time Share Telemarketing Fraud Sentenced to 20 Years in PrisonRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Michael B. Steinbach, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, announce that Pasquale Pappalardo, 60, of Coral Springs, FL, was sentenced today to 20 years in prison, three years of supervised release, ordered to pay restitution in the amount of $1,061,401 and forfeiture of $3,500,000. Pappalardo was previously convicted in November 2013 in federal court in Fort Lauderdale of conspiracy to commit mail fraud and wire fraud, in violation of Title 18, United States Code, Section 1349, and conspiracy to commit money laundering, in violation of Title 18, United States Code, Section 1956. Co-defendant Audwin Lovinsky, 35, of Tamarac, FL, was also sentenced today to 33 months in prison, three years of supervised release, and ordered to pay restitution in the amount of $34,635. Lovinsky was previously convicted of conspiracy to commit mail fraud and wire fraud, in violation of Title 18, United States Code, Section 1349.
In all, 41 defendants were charged for their involvement with a time-share resale telemarketing room called Timeshare Mega Media and Marketing Group, Inc., (TMMMG). The other defendants were charged in Case Nos. 11-60190-Cr-Cohn, 11-60247-Cr-Marra, 11-60268-Cr-Hurley, 12-60019-Cr-Scola, 13-60049-Cr-Dimitrouleas, 12-60149-Cr-Scola, 13-60154-Cr-Scola, and 13-60155-Cr-Dimitrouleas. Aside from the two defendants who were sentenced today, thirty-seven defendants previously pled guilty, one is awaiting trial, and one is deceased.
According to the evidence presented at trial, in February 2009, Pasquale Pappalardo, also known to the witnesses as “Patsy U’ Patso” and “Posh,” and Joseph Crapella, also known to witnesses as “Joey Cigars,” started a branch office of Time Share Market Pro (TMP), a time-share resale business. The testimony at trial was that they knew each other from a previous stint in federal prison. In June 2009, at the direction of Pappalardo and Crapella, their associates took customer files and the electronic database of TMP, among other items, without the knowledge of the owner of TMP.
Pappalardo and Crapella then took the employees and the documents seized from TMP and formed a second time share resale company called TMMMG. In November 2009 and January 2010, TMMMG hired salesmen who worked for other fraudulent telemarketing resale companies, including defendant Lovinsky, who used the phone name of Edwin Lovins. Among the lies they would tell timeshare unit owners, was that they had sold their time-share unit and that they needed to pay a refundable fee to secure the sale. The salesmen would then ask the time share unit owners for a fee of at least $1,996, and as much as $10,000. At no time were there any buyers for the time-share units. The testimony at trial was that both Pappalardo and Crapella were told about the lies being told by the salesman, but Pappalardo and Crapella would not do anything to stop the salespeople from lying.
During the 10 months that TMMMG was in business, it fraudulently obtained approximately $5,000,000 from about 3,000 customers. Pappalardo received at least $300,000 in checks and hundreds of thousands of dollars in cash from the money sent by victims of TMMMG.
Mr. Ferrer commended the investigative efforts of the FBI. Mr. Ferrer would also like to recognize the assistance provided by the Fort Lauderdale Police Department, the Federal Trade Commission and the Broward Sheriff’s Office. The case is being prosecuted by Assistant U.S. Attorney Jeffrey N. Kaplan.
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.
New York Woman Who Used Counterfeit $100 Bills at North Haven Store Is SentencedRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that ALISHA FRASER, 27, of Brooklyn, N.Y., was sentenced today by U.S. District Judge Vanessa L. Bryant in Hartford to three years of supervised release for passing counterfeit U.S. currency at a store in North Haven.
According to court documents and statements made in court, on December 13, 2010, FRASER used nine counterfeit $100 bills to purchase an iPad from a store in North Haven. Later that day, she returned the iPad and received genuine U.S. currency. Two days later, FRASER purchased two iPods at the same store using five $100 counterfeit bills.
FRASER was arrested on February 25, 2013, and was detained for approximately two weeks before being released on bond. She pleaded guilty to the offense on June 6, 2013.
This matter was investigated by the United States Secret Service, with the assistance of the police departments of Windsor, Waterford, South Windsor, Naugatuck and North Attleborough (Mass.), and the Connecticut State Police. The case was prosecuted by Assistant U.S. Attorney Felice Duffy.
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(203) 821-3722 [email protected]New Hampshire Woman Pleads Guilty to Federal Firearm ViolationsRead the Press Release
Concord, NH –Nutveena Sirirojnananont plead guilty in United States District Court for the District of New Hampshire to federal gun trafficking/export violations that include conspiracy to violate the Arms Export Control Act (AECA), making a false statement in connection with a firearm purchase, and unlicensed firearms dealing, announced United States Attorney, John P. Kacavas.
The investigation revealed that from August 2010 through September 2011, Sirirojnananont was involved in the illegal trafficking/export of approximately eight (8) firearms from the United States to Thailand. These export-controlled articles are on the U.S. Munitions List (USML) items, as defined in the International Traffic in Arms Regulations (ITAR). These charges carry a maximum sentence of twenty years and a maximum fine of $1,000,000.00."The federal regulations involving the sale and export of firearms are specifically designed to prevent guns and other weapons from falling into the wrong hands," said Bruce Foucart, special agent in charge for ICE Homeland Security Investigations in Boston. "This case clearly demonstrates that we are allied with our federal and local law enforcement partners, including the men and women of the ATF and Portsmouth Police Department. Together, we will continue to target those who attempt to profit by circumventing these laws."
The investigation involved by the cooperative efforts of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Manchester Field Office, Homeland Security Investigations (HSI), Resident Agent in Charge Manchester Office, and U.S. Attorney’s Office, District of New Hampshire (USAO-NH). This case was prosecuted by Assistant U.S. Attorney Debra M. Walsh.
Morris County, N.J., Man Convicted of Armed Bank RobberyRead the Press Release
NEWARK, N.J. – A Morris County, N.J. man has been found guilty of robbing a bank at gunpoint, U.S. Attorney Paul J. Fishman announced today.
Rahman Fulton, 35, of Randolph, N.J., was convicted by a jury Jan. 28, 2014, after a two-week trial before U.S. District Judge Stanley R. Chesler in Newark federal court. The jury deliberated three hours before returning guilty verdicts on one count of bank robbery and one count of using a firearm in furtherance of the bank robbery.
According to documents filed in this case and the evidence at trial:
Fulton was charged with robbing the PNC bank in Randolph May 25, 2012. Fulton entered the bank wearing a black cloth mask covering his head and face and holding a handgun. He demanded and received money from a bank teller. The bank teller slipped a GPS tracking device into the money she handed over to Fulton. The GPS data placed the tracking device in Fulton’s bedroom minutes after the robbery. He later lied to the police about his whereabouts during the robbery and made other incriminating statements to his girlfriend and girlfriend’s sister, including a call just 10 minutes after the robbery to someone that worked across the street from the bank asking them if they had heard about the robbery.
Fulton faces a maximum potential penalty of 20 years in prison and a fine of $250,000, or twice the gross gain or loss from the offense, on the bank robbery conviction and a mandatory consecutive seven years in prison on the weapons conviction. Sentencing is scheduled for May 13, 2014.
U.S. Attorney Paul J. Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford, with the investigation leading to the charge. He also thanked the Randolph Township Police Department and Morris County Prosecutor’s Office for their contributions to the case.
The government is represented by Assistant U.S. Attorneys Daniel V. Shapiro and Elizabeth Harris of the U.S. Attorney's Office General Crimes Unit in Newark.14-033
Defense Counsel: Carol Gillen Esq. and K. Anthony Thomas Esq., Assistant Federal Public Defenders, NewarkMoorefield Resident Enters Pleas in Federal CourtRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Chris Zumpetta-Parr, Public Affairs SpecialistELKINS, WEST VIRGINIA – A Moorefield, West Virginia, resident entered pleas of guilty before Magistrate Judge John S. Kaull.
U.S. Attorney William J. Ihlenfeld, II, announced that:
JOSE FRANCISCO RAMIREZ a/k/a “CHICO,” age 27, of Moorefield, West Virginia, entered pleas of guilty to “Possession with Intent to Distribute Methamphetamine” and “Aggravated Reentry of Previously Deported Alien. RAMIREZ, who is in custody pending sentencing, faces up to 20 years in prison on each count. This case was prosecuted by Assistant U.S. Attorney Stephen D. Warner and investigated by the Potomac Highlands Drug & Violent Crime Task Force, consisting of officers from the Federal Bureau of Investigation, and the West Virginia State Police - Bureau of Criminal Investigations, working with US Immigration and Customs Enforcement, Homeland Security Investigations (ICE/HSI), the Hardy County Sheriff’s Department, the Grant County Sheriff’s Department, the Wardensville Police Department and the United States Forest Service.
Manhattan U.S. Attorney Files and Simultaneously Settles Lawsuit Against Nederlander Organization Covering Nine of Broadway’S Most Historic TheatersRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today the filing and settlement of a lawsuit in Manhattan federal court against NEDERLANDER ORGANIZATION, the owners and operators of nine of Broadway’s most historic theaters, the BROOKS ATKINSON, the GERSHWIN, the LUNT FONTANNE, the MARQUIS, the MINSKOFF, the NEDERLANDER, the NEIL SIMON, the PALACE, and the RICHARD RODGERS, involving violations of the Americans With Disabilities Act (the “ADA”). The settlement, in the form of a consent decree, was entered today by U.S. District Judge Katherine Polk Failla.
Manhattan U.S. Attorney Preet Bharara said: “Today’s resolution marks the culmination of years of work to ensure that one of New York City’s leading cultural and entertainment treasures – Broadway theater – is accessible to people with disabilities. As a result of this suit and settlement, coupled with a similar lawsuit filed by the Office against the Shubert Theaters in 2003, over twenty of the leading Broadway theaters, operated by the two largest Broadway theater organizations, will be more accessible than ever before.”
According to the Complaint and Consent Decree filed in Manhattan federal court:
In the course of an investigation and negotiation over several years, the U.S. Attorney’s Office identified numerous ADA violations at each of the nine theaters operated by NEDERLANDER ORGANIZATION. Two of the theaters were constructed over one hundred years ago, in the 1910s; four of the theaters were constructed during the 1920s; and the remainder were constructed in the early 1970s and the 1980s. The ADA generally requires that, under these circumstances, barriers to accessibility be removed where it is readily achievable to do so. Throughout the Government’s investigation and the negotiation of the Consent Decree, NEDERLANDER ORGANIZATION agreed to remove hundreds of barriers to accessibility.
Under the Consent Decree, NEDERLANDER ORGANIZATION agrees to continue and eventually conclude its efforts to improve accessibility at its theaters over the next three years, as the schedules of shows at the theaters permit. NEDERLANDER ORGANIZATION will do the following:
- provide a total of 70 wheelchair accessible seating locations, and direct its ticket vendors to accord priority to persons with disabilities in selling those seating locations;
- provide a total of 134 aisle transfer seating locations for persons who are able to transfer from a wheelchair into a seat, and direct its ticket vendors to accord priority to persons with disabilities in selling those seating locations; and
- eliminate over 500 individual barriers to accessibility in theater restrooms, concession counters, waiting areas, and box offices.
In addition, NEDERLANDER ORGANIZATION will pay a $45,000 civil penalty to the United States.
Since President George H.W. Bush signed the ADA into law in 1990, the U.S. Attorney’s Office for the Southern District of New York has played a significant role in bringing numerous New York City institutions into compliance with the ADA regulations. They include Avery Fisher Hall at Lincoln Center, the Metropolitan Opera, Yankee Stadium, Madison Square Garden, the Apollo Theater, the Puck Building, the Shubert Theaters, the Rainbow Room, and Radio City Music Hall.
To file a complaint alleging that any place of public accommodation within the Southern District of New York is not accessible to persons with disabilities, use the Civil Rights Complaint Form available on the United States Attorney’s Office’s website, www.usdoj.gov/usao/nys. Complaints should be sent to:
U.S. Attorney’s Office, Southern District of New York
86 Chambers Street, 3rd Floor
New York, New York, 10007
Attention: Chief, Civil Rights Unit
Assistant U.S. Attorneys David J. Kennedy and Rebecca C. Martin are in charge of the case.
U.S. v. Nederlander Organization Consent Decree Exhibits
US v. Nederlander Organization, Inc Signed Consent Decree
U.S. v. Nederlander ComplaintMan Pleads Guilty to Transporting 16-Year-Old Girl from California to Nevada to Work as ProstituteRead the Press Release
LAS VEGAS, Nev. – A northern California man pleaded guilty today to transporting a minor female from San Jose, Calif., to Las Vegas, Nev., to work as a prostitute during May 2013, announced Daniel G. Bogden, United States Attorney for the District of Nevada.
Andrew West, 27, of Hayward, Calif., who was indicted on May 29, 2013, pleaded guilty to one count of transportation of a minor for prostitution, and is scheduled to be sentenced on April 30, 2014, by U.S. District Judge James C. Mahan. West faces a mandatory minimum of 10 years in prison and a $250,000 fine, and will have to register as a sex offender.
“We must use maximum resources to prevent our children and youth from becoming victims to sex trafficking,” said United States Attorney Bogden. “The kids who fall victim to pimps are typically physically and emotional abused and scarred for life, and we will work with our local, state and federal law enforcement partners to ensure that these child exploiters who bring kids across state lines for prostitution purposes are prosecuted.”
According to the plea agreement, in early 2013, a 16-year-old female began working as a prostitute for West in Stockton and San Jose, Calif. On May 3, 2013, West, the 16-year-old girl, and others traveled in several vehicles from San Jose to Las Vegas. The 16-year-old traveled in West’s Lexus automobile, but West told the girl that he could not ride in the vehicle with her until after they arrived in Nevada, because if he were arrested he would get into more trouble for crossing state lines with her because of her age. They arrived in Las Vegas the next day, and West, the 16-year-old girl, and another male checked into a motel on the Boulder Highway. West told the girl to make money (by committing sex acts) to pay for the room. The girl walked the Boulder Highway in search of dates, and solicited separate dates with four men who she took back to the motel room. The girl earned a total of $260, part of which was provided to West after each date. The girl was arrested on May 4, 2013, when she attempted to solicit a date from an undercover Las Vegas Metropolitan Police Department Officer in the motel parking lot.
The case was investigated the FBI and Las Vegas Metropolitan Police Department, as part of the Innocence Lost Task Force. The case is being prosecuted by Assistant United States Attorneys Nicholas D. Dickinson and Phillip N. Smith, Jr.The case was brought as part of Project Safe Childhood (PSC), a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal
Division's Child Exploitation and Obscenity Section, PSC marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about PSC, please visit www.usdoj.gov/psc.Man Pleads Guilty to Child ExploitationRead the Press Release
CONCORD, NEW HAMPSHIRE: Eric Morrison, 22, pled guilty in United States District Court for the District of New Hampshire to one count of sexual exploitation of children, announced United States Attorney John P. Kacavas.
The investigation began in 2013 when the Manchester Police received information from the United States Air Force, Office of Special Investigations, that the defendant, a member of the United States Air Force stationed at Kadena Air Base in Okinawa, Japan, was communicating with Erin Upham, a resident of Manchester. Specifically, the Air Force Special Agents informed the Manchester Police that the defendant’s communication was of a sexual nature and involved a minor child.
Search warrants were obtained for various electronic items belonging to Morrison and Upham and a forensic examination of the items revealed digital images of a minor child engaged in sexually explicit conduct. On June 19, 2013, a federal grand jury indicted both Morrison and Upham for conspiracy to produce child pornography. Morrison faces a minimum term of fifteen years in prison and is scheduled to be sentenced on May 8, 2014.
The charge was the result of an investigation by the United States Air Force, Office of Special Investigations, the Federal Bureau of Investigation, and the Manchester and Derry Police Departments and is being prosecuted under Project Safe Childhood, a nationwide initiative by the U.S. Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.This case is being prosecuted by Assistant United States Attorney Helen White Fitzgibbon who is the U.S. Attorney’s coordinator for Project Safe Childhood.
Man Convicted of Armed Bank Robbery and Use of A Firearm During A Crime of ViolenceRead the Press Release
Phillip D. Webb, 33, plead guilty in the United States District Court to a four-count indictment charging him with Armed Bank Robbery, Use and Carry of a Firearm During a Crime of Violence, Possession with Intent to Deliver Cocaine, and Felon in Possession of a Firearm, Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today.
Documents filed in US District Court establish that on June 28, 2011, two women stopped at the Quick Trip station in Madison, Illinois, to buy gasoline. As the driver reentered her vehicle after paying at the pump, Webb slipped into the backseat of her car and pointed a gun at her and her mother. Webb then abducted the two victims, forcing them to drive to a nearby ATM and withdraw money from a bank account. Webb was arrested by the United States Marshals on July 18, 2011, as he fled from an apartment in Collinsville, Illinois. Upon his arrest, Webb was found in possession of two firearms, several rounds of ammunition and 26 grams of crack cocaine which he intended to distribute. Webb was a previously convicted felon, having been convicted of the offense of second degree murder in 2003.
Webb is scheduled to be sentenced in the US District Court on May 30, 2014, at which time he faces a term in prison of up to 25 years on the charge of Armed Bank Robbery, not less than seven (7) years up to Life for the charge of Use and Carry of a Firearm During a Crime of Violence, up to 20 years on the charge of Possession with Intent to Distribute Cocaine, and up to 10 years on the charge of Felon in Possession of a Firearm. Webb also faces a fine up to $1,750,000 and a term of supervised release of up to five (5) years once he is released.
The case was investigated by the Illinois State Police, the Bureau of Alcohol, Tobacco and Firearms, and the Madison Police Department. The case is being prosecuted by Assistant United States Attorneys Ali Summers and Donald Boyce.
Man Charged in Multi-Layered Credit Card Fraud and Identity Theft Scheme Involving Falsified Credit Applications and Fraudulent LawsuitsRead the Press Release
WILMINGTON, Del. - Charles M. Oberly, III, United States Attorney for the District of Delaware, announced that Arthur Robinson, age 39, of Frederick, Maryland, has been charged by a federal grand jury with two counts of bank fraud (18 U.S.C. § 1344), one count of social security fraud (42 U.S.C. § 408), one count of wire fraud (18 U.S.C. § 1343), and three counts of aggravated identity theft (18 U.S.C. § 1028A), by Indictment unsealed yesterday. The defendant faces up to 30 years in prison on each count of bank fraud, up to 20 years in prison on the count of wire fraud, up to 5 years in prison the count of social security fraud, and consecutive 2-year terms of imprisonment on each of the aggravated identity theft charges, in addition to possible fines and restitution.
According to the Indictment, from January 2002 through October 2013, the defendant devised a scheme to defraud multiple federally insured financial institutions, including Delaware-based Barclays Bank and Chase Bank. The defendant is alleged to have used multiple identities, including the identity of a minor child, to submit false and fraudulent credit applications to the banks. The Indictment further alleges that the defendant made purchases on the fraudulently obtained lines of credit and did not pay the balances. In addition, the defendant is alleged to have disputed the lines of credit with at least one credit agency, and he filed lawsuits against the lenders to fend off collection efforts. Moreover, the defendant is alleged to have obtained a new social security number, claiming to be an identity theft victim, which he then used on further fraudulent credit applications.
U.S. Attorney Oberly gave the following comments: “This case should send a clear signal that individuals who repeatedly abuse the credit services offered by the federally-backed lenders here in Delaware will be prosecuted, and false statements to the Social Security Administration in furtherance of such abuse will not be tolerated. Specifically, I want to thank officials at Barclays Bank for initially bringing its concerns about Mr. Robinson to the attention of the United States Attorney’s office in Delaware, and I thank the other institutions that cooperated in the investigation.”This case is the result of an investigation conducted by the Social Security Administration, Office of the Inspector General, and the United States Postal Inspection Service, with cooperation from the State of Maryland. The prosecution is being handled by Assistant United States Attorney Lauren Paxton, District of Delaware.
The charges in the Indictment are only allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
Luzerne County Man Sentenced to 18 Years’ Imprisonment for Jewelry Store Robberies, Bank Robbery, and FraudRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Senior United States District Court Judge James M. Munley sentenced Kirk Robinson, age 45, of Wilkes-Barre, Pennsylvania, to 18 years’ imprisonment for his involvement in two Luzerne County jewelry store robberies, a bank robbery, as well as an insurance fraud scheme.
According to United States Attorney Peter J. Smith, Robinson pleaded guilty in federal court on October 24, 2013, to conspiring with others to carry firearms in relation to the robbery of Steve Hydock Diamonds Jewelry store, Kingston, Pennsylvania, on May 5, 2008, and Dunay Jewelry store, Wilkes-Barre, Pennsylvania, on May 14, 2008. He also pleaded guilty to the armed bank robbery of the M&T Bank, Hanover Township, occurring on October 30, 2010. At his guilty plea, Robinson admitted that he planned and acted as a getaway driver in those three robberies. Additionally, Robinson pleaded guilty to using the mail in a scheme to defraud an insurance company of $43,000. Robinson admitted that the scheme involved staging a robbery with a confederate and filing a police report wherein he falsely claimed an armed robber stole jewelry from him.
Judge Munley ordered that Robinson be placed on supervised release for three years following the service of his 18-year prison sentence. In addition, Judge Munley ordered that Robinson pay restitution in the amount of $150,728 representing the value of money and jewelry stolen during the robberies and fraud scheme.
The case was investigated by the Federal Bureau of Investigation, the Kingston Police Department, the Hanover Township Police, and the Wilkes-Barre Police Department. Assistant United States Attorney John C. Gurganus, Jr. prosecuted the case.
Luzerne County Man Charged with Trafficking Heroin and CocaineRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced that a criminal Information was filed today in U.S. District Court in Scranton charging a Kingston resident with distributing heroin and cocaine during a four-year time period.
According to United States Attorney Peter J. Smith, the Information alleges that James Featherstone, age 33, distributed cocaine and heroin in Luzerne County from January 2009 through September 2013.
A plea agreement was filed along with the Information.
The charge stems from an investigation by The Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), the Pennsylvania State Police, Kingston Police, and the Luzerne County District Attorney’s Office.
Featherstone faces a potential maximum sentence of 20 years in prison and a $1 million fine.
According to the terms of the plea agreement filed in the case, Featherstone has agreed to plead guilty to the charge, and the government and the defendant will recommend that Featherstone be sentenced to between 163 months and 188 months in prison.
The case is being prosecuted by Assistant U.S. Attorney Francis P. Sempa.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilty is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
In this case, the maximum penalty under the federal statute is 20 years’ imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
****Leader of Corrupt Canadian Moneygram Agents Re-Sentenced on Conspiracy & Money Laundering ChargesRead the Press Release
Peter J. Smith, United States Attorney for the Middle District of Pennsylvania, announced that the former leader of a large group of corrupt, Canadian based MoneyGram Agents has been resentenced to a lengthy term of incarceration for helping to defraud thousands of American citizens out of $4 million between January 2004 and April 2009.
JAMES E. UGOH, age 51, of Toronto, Ontario, was re-sentenced by U.S. District Court Judge Sylvia Rambo in Harrisburg yesterday afternoon to 151 months (12.6 years) incarceration. UGOH had been previously sentenced by Judge Rambo to 118 months incarceration in 2012.
In October of 2009 UGOH and three other Toronto area MoneyGram agents, KAYODE KASSIM, age 45, ABEL ONGUNFUNWA, age 51, and FELIX MORDI, age 45 , were indicted on multiple charges by a Middle District of PA grand jury. After an 18-month process, the four defendants were eventually extradited to Harrisburg where they pleaded guilty to Conspiracy to commit Mail Fraud, Wire Fraud, and Money Laundering. In 2012 the 4 were sentenced by Judge Rambo to the following terms of incarceration:
Mordi – 53 months
Ogunfunwa – 63 months
Kassim – 80 months
Ugoh – 118 monthsAfter the sentences were imposed, the government appealed to the U.S. Court of Appeals for the Third Circuit, arguing the district court erred in calculating their advisory sentencing guideline ranges. Last year the Third Circuit agreed with the government and remanded the 4 cases back to Judge Rambo for resentencing.
Thus far, only UGOH and KASSIM have been resentenced. KASSIM was resentenced in December of last year to 109 months incarceration. MORDI is scheduled to be resentenced on February 13, 2014. No date has yet been scheduled for OGUNFUNWA’s resentencing.
Between 2004 and 2009 Canadian based, mass-marketing fraudsters distributed thousands of letters and counterfeit checks to American citizens via the mail and the Internet. The communications falsely promised the recipients cash prizes, fictitious loans, commissions and other payments. The recipients were typically tricked into depositing worthless counterfeit checks into their bank accounts before sending money to the fraudsters for “taxes” and other bogus fees via the MoneyGram money transfer system.
UGOH, an expatriated Nigerian Tribal Chief living in Toronto, was the leader of a corrupt group of Canadian MoneyGram agents who conspired with the mass marketing fraudsters to intercept, launder and distribute the MoneyGram transfers sent by the victims of the mass-marketing schemes. UGOH obtained his first MoneyGram outlet in 2001. By 2008 UGOH had 12 MoneyGram outlets in the greater Toronto area, 1l operating under the name of Money Spot and 1 under the name of N & E Associates. Between January 2005 and February 2009 UGOH’s outlets paid out more Consumer Fraud Reported money transfers than any other MoneyGram agent in the world - 1,754 transfers totaling $3.4 million.
But UGOH’s money laundering activities went far beyond just his 12 MoneyGram outlets. UGOH recruited MORDI, KASSIM, and ONGUNFUNWA to launder MoneyGram transfers checks issued by approximately 28 other corrupt MoneyGram agents in the greater Toronto area. Instead of making the MoneyGram checks payable to the intended payees, UGOH and his co-conspirators would make the checks payable to third party companies controlled by MORDI, KASSIM and OGUNFUNWA. MORDI, KASSIM and UNGUNFUNWA would then deposit the checks into their bank accounts, keep an approximate 3 to 4% cut for themselves, and distribute the balance to UGOH. UGOH would then share the bulk of the funds with the mass marketing fraudsters, typically via off-shore money MoneyGram transfers to Nigeria, Jamaica or Romania, thereby effectively laundering the proceeds. The $4 million loss stipulation in UGOH’s plea agreement represented the approximate dollar value of 2,309 transfers paid out at the 18 MoneyGram outlets controlled by UGOH, MORDI, KASSIM and UNGUNFUNWA that were reported by MoneyGram customers as being fraudulently induced between 2004 and March of 2009.
The UGOH case was one of several on-going investigations of fraudulent international telemarketing schemes involving corrupt MoneyGram and Western Union agents by the U.S. Postal Inspection Service in Harrisburg and the U.S. Attorney=s Office for the Middle District of Pennsylvania. In November of 2012 the U.S. Attorney’s Office for the Middle District of PA and the U.S. Justice Department entered into a Deferred Prosecution Agreement with MoneyGram that required the company to pay $100 million into a victim restitution fund. Thus far, the Postal Inspection Service has returned approximately half of the $100 million to thousands of victims of the mass marketing schemes.
The MoneyGram agent and corporate prosecutions are being handled by Assistant U.S. Attorneys Kim Douglas Daniel and Christy Fawcett, with assistance from the Justice Department’s Asset Forfeiture and Money Laundering Section in Washington, D.C.. The Third Circuit appeal in the UGOH cases was handled by Assistant U.S. Attorney Steven Cerutti.
Kentucky Hospital Agrees to Pay Government $16.5 Million to Settle Allegations of Unnecessary Cardiac ProceduresRead the Press Release
Saint Joseph Health System Inc. has agreed to pay $16.5 million to resolve allegations that Saint Joseph Hospital violated the False Claims Act by submitting false claims to the Medicare and Kentucky Medicaid programs for a variety of medically unnecessary cardiac procedures, the Justice Department announced today. Saint Joseph Health System operates numerous hospitals statewide, including Saint Joseph Hospital, which is based in London, Ky.
“Hospitals that place their financial interests above the well-being of their patients will be held accountable,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery. “ The Department of Justice will not tolerate those who abuse federal health care programs and put the beneficiaries of these programs at risk.”
The government alleged that doctors working at Saint Joseph Hospital performed numerous invasive cardiac procedures, including coronary stents, pacemakers, coronary artery bypass graft surgeries and diagnostic catheterizations, on Medicare and Medicaid patients who did not need them, and that the hospital was aware of these unnecessary procedures. These doctors were affiliated with Cumberland Clinic which is a physician group that entered an exclusive arrangement with Saint Joseph Hospital in 2008 to provide cardiology services to the hospital’s patients. Cumberland Clinic is owned by two London-based cardiologists, Satyabrata Chatterjee and Ashwini Anand.
The settlement also resolves allegations that Saint Joseph Hospital violated the federal Stark Law and Anti-Kickback Statute by entering into sham management agreements that financially benefitted Chatterjee and Anand as an inducement for Chatterjee and Anand to direct more Cumberland Clinic patients to the hospital.
Dr. Sandesh Patil, one of the Cumberland Clinic cardiologists working at the hospital, performed many of the medically unnecessary coronary stents. Patil has since pleaded guilty to a federal health care fraud offense and has been sentenced to serve 30 months in prison.
“We all rely on health care providers to make treatment decisions based on clinical, not financial, considerations,” said U.S. Attorney for the Eastern District of Kentucky Kerry Harvey. “The conduct alleged in this case violates that fundamental trust and squanders scarce public resources set aside for legitimate health care needs. We will use every available tool to protect our federal health care programs and the patients who they serve.”
In connection with this settlement, Saint Joseph Hospital has agreed to enter into a Corporate Integrity Agreement with the Department of Health and Human Services Office of Inspector General (HHS-OIG), which obligates the hospital to undertake substantial internal compliance reforms and to commit to a third-party review of its claims to federal health care programs for the next five years.
"Cases such as this threaten both the health of patients and the financial integrity of the Medicare and Medicaid programs," said Special Agent in Charge at the U.S. Department of Health and Human Services Office of Inspector General in Atlanta Derrick L. Jackson. "This settlement is another example of the OIG’s commitment to protecting our beneficiaries and to recovering any money that has been improperly paid as a result of medically unnecessary procedures."
In addition to the settlement with Saint Joseph Health System, the government announced its intervention in a lawsuit alleging False Claims Act violations by Chatterjee and Anand, who referred patients for and performed the unnecessary procedures and tests, and their practice group, Cumberland Clinic, as well the practice groups each of them owned before forming Cumberland Clinic.
The government actions announced today stem in large part from a whistleblower complaint filed by three Lexington, Ky., cardiologists pursuant to the qui tam provisions of the False Claims Act, which permit private persons to bring a lawsuit on behalf of the government and to share in the proceeds of the suit. The Act also permits the government to intervene in the lawsuit and take over the allegations as it has done in this case. Drs. Michael Jones, Paula Hollingsworth and Michael Rukavina will receive a total of $2.46 million of the $16.5 million settlement with Saint Joseph Hospital.
This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by Attorney General Eric Holder and Secretary of Health and Human Services Kathleen Sebelius. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $17.1 billion through False Claims Act cases, with more than $12.2 billion of that amount recovered in cases involving fraud against federal health care programs.
The investigation was conducted by the FBI, HHS-OIG, the Kentucky Office of Attorney General, Medicaid Fraud and Abuse Control Unit, the Commercial Litigation Branch of the Department of Justice Civil Division and the U.S. Attorney’s Office for the Eastern District of Kentucky. The claims settled by this agreement are allegations only, and there has been no determination of liability.
The lawsuit is captioned United States ex rel. Jones, Hollingsworth and Rukavina v. Saint Joseph Health System et al., no. 11-cv-81-GFVT (E.D.Ky.)
Justice Department Sues to Stop Florida Tax Return Preparer from Preparing Federal Tax Returns for OthersRead the Press Release
The United States has asked a federal court in Fort Lauderdale, Fla., to per manently bar Keisha Stewart and her co mpany, Professional Tax Services Inc., from preparing federal tax returns for others, the Justice Depart ment announced today.
According to the co mplaint, Stewart and her co mpany prepared federal inco me tax returns that in f lated inco me or included f ictitious inco me to quali fy her custo mers to receive or maximize the earned inco me tax credit. The co mplaint states that Stewart also clai med tax credits that are refundable or decrease the a mount of tax on her custo mers’ returns, including false education credits (A merican Opportunity Credit) and residential energy credits. According to the co mplaint, Stewart also falsely clai med head of household status on behalf of custo mers who did not qualify in order to i mproperly decrease her custo mers’ reported tax liabilities. The co mplaint also alleges that Stewart clai med false dependents on behalf of custo mers and also clai med the child and additional child tax credits on behalf of those custo mers. Allegedly, Stewart typically included these ite ms on her custo mers’ returns without their knowledge. The govern ment alleges that Stewart’s returns have resulted in over $1.6 million of loss annually to the United States during the tax years 2010, 2011 and 2012.
Return preparer fraud is one of the IRS' 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 IRS has tips for choosing a tax preparer: www.irs.gov/Tax-Professionals/Choosing-a-Tax-Professional. In the past decade, the Justice 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.
Related Materiala:
United States v. Keisha Stewart, et al.
Complaint for Injunctive ReliefJury Finds Erie Man Guilty of Violating Federal Firearms LawsRead the Press Release
ERIE, Pa. – After deliberating approximately one hour, a federal jury of four men and eight women found Joseph Lee Ollie guilty of three counts of federal firearms violations, United States Attorney David J. Hickton announced today.
Joseph Lee Ollie, 55, was tried before Senior United States District Judge Maurice B. Cohill Jr. in Erie, Pennsylvania.
According to Assistant United States Attorney Marshall J. Piccinini, who prosecuted the case, the evidence presented at trial established that on November 25, 2011, Ollie engaged in a scheme to burglarize homes on Shadduck Road in North East, Pennsylvania, and in the matter on trial, stole a Mossberg Model 500 shotgun. Ollie’s possession of the firearm was unlawful because he was prohibited from firearm possession as a result of his prior felony convictions and as a result of a domestic abuse restraining order against him. According to information presented in court, Ollie was already convicted, and is currently awaiting sentencing, for attempting to obtain a 9mm handgun from Bob’s Gun Shop in Edinboro, Pennsylvania in April 2011, when he lied on the federal firearm transaction form by failing to disclose his prior felony convictions.
According to United States Attorney Hickton, many of the firearms unlawfully used and possessed in Northwestern Pennsylvania have come from residential burglaries. Targeting those criminals who are burglarizing homes and stealing firearms, and vigorous enforcement of those individuals who are violating federal firearms laws, are important pieces of our anti-violence strategy in the region.
Sentencing on both cases will be scheduled at a later time by Judge Cohill. The law provides for a total sentence of 30 years in prison, a fine of $750,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based on the seriousness of the offenses and the prior criminal history, if any, of the defendant.
The Pennsylvania State Police conducted the investigation that led to the prosecution of Ollie.
Jacksonville Restaurant Owner Fined $10,000 for Pattern of Hiring Illegal AliensRead the Press Release
Jacksonville, Florida – U.S. Magistrate Judge Joel B. Toomey today sentenced Juan Carlos Angel (35) to pay a $10,000 fine for engaging in a pattern of hiring illegal aliens. Angel is the owner of Peppers 5 Mexican Restaurant, on Atlantic Boulevard and other locations, in Jacksonville.
Angel pleaded guilty to the offenses on October 30, 2013.
According to court documents, in June 2013, four employees of the Jacksonville restaurant had been arrested for document fraud following a Homeland Security Investigations (HSI) audit of the restaurant’s Form I-9s, or employment eligibility verification forms. After records checks were completed, it was determined that between in or around March 2011 through in and around March 2012, Angel hired employees that were citizens of other countries and were in the United States illegally. Thereafter, Angel was interviewed and admitted to knowingly hiring five illegal aliens not authorized to work in the United States, during those periods.
This case was investigated by the Jacksonville Office of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI). It was prosecuted by Assistant United States Attorney Dale Campion.
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Idaho Falls Man Pleads Guilty to Possessing Child PornographyRead the Press Release
POCATELLO — Daniel Joseph Dalton, 38, of Idaho Falls, Idaho, pleaded guilty today in United States District Court to possessing sexually explicit images of minors, U.S. Attorney Wendy J. Olson announced. Dalton was indicted by a federal grand jury in Pocatello on July 23, 2013.
According to court records, over 300 video files of suspected child pornography were discovered on a desktop computer owned and used by Dalton after Dalton left the computer at a local computer repair shop. When interviewed by a Bonneville County Sheriff’s detective, Dalton admitted to downloading sexually explicit images of children using Limewire peer-to-peer file sharing software. Dalton also admitted that police would find child pornography on an external hard drive at his residence.
The charge of possession of sexually explicit images of minors is punishable by up to ten years in prison, a maximum fine of $250,000, and five years to lifetime supervised release.
Sentencing is set for April 22, 2014, before U.S. District Judge B. Lynn Winmill at the federal courthouse in Pocatello.
The case was investigated by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and the Bonneville County Sheriff’s Office.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab “resources.”
Hudson County, N.J., Man Sentenced to More Than Eight Years in Prison for Sexually Abusing Sleeping Woman on Domestic FlightRead the Press Release
NEWARK, N.J.— A Hudson County, N.J., man was sentenced today to 97 months in prison for sexually abusing a sleeping woman aboard a flight from Phoenix to Newark Liberty International Airport in August 2012, U.S. Attorney Paul J. Fishman announced.
Bawer Aksal, 49, of North Bergen, N.J., was previously convicted of one count of sexual abuse and one count of abusive sexual contact following a five-day trial before U.S. District Judge Jose L. Linares. Judge Linares imposed the sentence today in Newark federal court.
According to documents filed in this case and the evidence presented at trial: Aksal was a passenger on a United Airlines flight from Phoenix to Newark on Aug. 20, 2012, sitting in the middle seat in a row of three. Neither Aksal, the victim seated by the window nor the passenger in the aisle seat knew one other. Before the plane took off, the victim texted a friend complaining about Aksal’s arm encroaching into her seating area.
About one hour before landing, the aisle passenger looked to his right and saw Aksal with his body against the victim’s, his arms around her back and beneath a sweater draped over her. The victim awoke to find Aksal’s hands inside her shirt and shorts and struggled out of his grasp. The aisle passenger observed her jolting awake and he and the victim both gathered their belongings and headed to the back of the plane to report what happened to the flight attendants.
Aksal was detained upon arrival in Newark and arrested by FBI agents.
In addition to the prison term, Judge Linares sentenced Aksal to serve three years of supervised release and ordered him to pay restitution to the victim for her medical expenses. Aksal is required to register as a sex offender.U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford, and the Port Authority Police Department, under the direction of Superintendent Michael A. Fedorko, with the investigation.
The government is represented by Assistant U.S. Attorneys Danielle Alfonzo Walsman and Robert Frazer of the U.S. Attorney’s Office Criminal Division in Newark.
The federal government has exclusive jurisdiction over all sexual abuse cases that occur in American airplanes, as such events are outside the jurisdiction of any state.14-035
Defense counsel: Robert Degroot Esq., Newark
Houston Lake Man Pleads Guilty to Child PornRead the Press Release
Project Safe Childhood
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Houston Lake, Mo., man pleaded guilty in federal court today to possessing child pornography.
Carlos J. Scott, 46, of Houston Lake, pleaded guilty before U.S. District Judge Dean Whipple to possessing child pornography.
According to today’s plea agreement, the investigation began when the victim, identified as “Jane Doe,” reported past sexual molestation by Scott to the Kansas City, Mo., Police Department on Sept. 4, 2011. In a later interview, Jane Doe stated that Scott sexually molested her from the time she was six years old until the age of 12. Jane Doe also stated that Scott left pornography open on the computer and that he had photographs of his penis on the computer, which he would leave in places he knew she would access while using the computer. She also reported that Scott regularly exposed himself to her.
A 12-year-old cousin of the child victim was also interviewed. She repeated Jane Doe’s statements about pornography being left open on Scott’s computer.
Law enforcement officers executed a search warrant at Scott’s residence and seized his laptop computer. They also seized a desktop computer from the home of Scott’s parents, where he had lived during most of the time that the sexual abuse of Jane Doe occurred. Scott had used the computer while living with his parents.
Among the files found on Scott’s computer were images of possible child pornography and erotica as well as multiple photos of young girls playing. Detectives showed Jane Doe several of the photographs; she became emotional and identified herself in the series of photographs. Child pornography and erotica also were located on the parent’s computer. According to today’s plea agreement, there were between 10 and 150 images of child pornography.
Under the terms of today’s plea agreement, Scott is subject to a sentence of at least five years up to 10 years in federal prison without parole. The government contends and will argue at sentencing that Scott engaged in a pattern of activity involving the sexual abuse or exploitation of a minor, which would increase his offense level under the federal sentencing guidelines. 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 Teresa A. Moore. It was investigated by the Kansas City, Mo., Police Department.
Project Safe Childhood
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc . For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."Hogsett Announces Charges Against Indianapolis Man for Health Care FraudRead the Press Release
INDIANAPOLIS -- Joseph H. Hogsett, the United States Attorney, announced today that Ronald Reed, age 46, has been charged with conspiring to commit health care fraud in a scheme that involved the sale of electric wheelchairs and scooters and the potential loss of hundreds of thousands in taxpayer dollars. This comes as Hogsett’s office has continued an effort to crack down on white collar fraud in Indiana’s business community.
“This alleged scheme not only defrauded taxpayers, but also victimized some of the most vulnerable in this community,” Hogsett said. “This case embodies a culture of corruption that is unacceptable, and together with our law enforcement partners, we’re going to put a stop to it.”
According to a federal indictment announced today, Reed was the controlling owner of the Indianapolis-based business Benchmark Mobility Corporation, which sold medical equipment including powered wheelchairs, scooters, lift chairs and hospital beds. As part of these sales, Benchmark would often bill various state and federal health care programs for reimbursement, including Medicare and Indiana Medicaid.
The indictment alleges that beginning in March 2007, Benchmark began having difficulty obtaining operating capital. In response, Reed allegedly began submitting claims to Medicare and Medicaid for used equipment that he had purchased online, refurbished, and was selling as “new.” These used pieces of equipment were often purchased on websites such as eBay and Craigslist, and employees were allegedly directed to change serial numbers and take other actions to hide the fraud.
All told, it is alleged that between March 2007 and March 2011, Reed submitted and was reimbursed for $388,872 in claims to Indiana’s Medicaid program, and $53,816 in claims to Medicare. Reed is also charged with thirteen counts of aggravated identity theft for allegedly using a Medicaid recipient’s identification without permission as part of the scheme.
According to Assistant U.S. Attorney Bradley P. Shepard, who is prosecuting the case for the government, this case was the result of a joint investigation by the Department of Health and Human Services and the Federal Bureau of Investigation. Reed faces up to 10 years in federal prison if convicted, as well as significant fines.
An indictment is only a charge and is not evidence of guilt. A defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
Garland, TX Man Pleads Guilty to Methamphetamine DistributionRead the Press Release
Muskogee, Oklahoma - The United States Attorney’s Office for the Eastern District of Oklahoma, announced that KENNETH TODD PUCKETT, age 40, of Garland, Texas, pled guilty to Possession with Intent to Distribute Methamphetamine, in violation of Title 21, United States Code, Sections 841(a)(1) and 841(b)(1)(C).
The charges are a result from an investigation by the Choctaw Nation Tribal Police and the Bureau of Indian Affairs and the Drug Enforcement Administration. The defendant was indicted in March, 2013.
The Information alleged that on or about September 4, 2013, within the Eastern District of Oklahoma, the defendant did knowingly and intentionally possess with intent to distribute a mixture or substance containing a detectable amount of methamphetamine, a Schedule II Controlled Substance.
The Honorable Steven P. Shreder, Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, presided over the hearing. The defendant will remain in the custody of the United States Marshal Service pending sentencing.
The statutory range of punishment is not more than 20 years or more than life imprisonment, and/or up to a $1,000,000.00 fine and 3 years of supervised release.
Assistant United States Attorney Shannon Henson represented the United States.
Four Individuals Indicted for Drug Trafficking on the High SeasRead the Press Release
Tampa, Florida - U.S. Attorney A. Lee Bentley, III announced today that a federal grand jury returned an indictment charging Linberto Gallardo-Gonzalez (42); Uriel Julio Tapia (35); Miguel Vasquez-Barrios (37), all of Colombia, South America; and Miguel Angel Sori-Ortiz (41, Dominican Republic), with conspiracy to possess with intent to distribute five kilograms or more of cocaine, while on board a vessel subject to the jurisdiction of the United States; and aiding and abetting each other and other persons to possess with intent to distribute five kilograms or more of cocaine, while on board a vessel subject to the jurisdiction of the United States. Each faces a mandatory minimum sentence of 10 years, up to a maximum penalty of life in federal prison for each count.
On January 22, 2014, Gallardo-Gonzalez, Tapia, Vasquez-Barrios, and Sori-Ortiz were detained during the interdiction of a go-fast boat traveling at a high rate of speed and carrying 2,500 pounds of cocaine, worth an estimated $37 million wholesale value. The cocaine was seized in a historic multi-national counterdrug operation south of the Dominican Republic. This interdiction marks the first time a U.S. Coast Guard (USCG) Law Enforcement Detachment Team (LEDET) and helicopter embarked on board a foreign flagged military vessel in support of counterdrug operations. The USCG LEDET team and helicopter were operating aboard the British Royal Fleet Auxiliary (RFA) Wave Knight. The Coast Guard helicopter launched from the RFA Wave Knight when the 25-foot go-fast boat was detected with four individuals and suspicious packages on board, traveling at a high rate of speed. The helicopter crew arrived on scene and attempted to signal the go-fast boat in an effort to stop it. Ultimately, the crew resorted to firing disabling shots to stop the vessel’s engine. During the pursuit, the four individuals on board were observed jettisoning multiple packages overboard. After the vessel was stopped, a USCG LEDET team arrived at the scene and detained the four individuals aboard the boat and retrieved 45 bales of cocaine from the debris field, where the packages had been thrown overboard.
The four crewman detained on the go-fast vessel were brought to Middle District of Florida, Tampa Division for prosecution. They appeared before a United States Magistrate Judge to be advised of the charges against them and for a bond hearing. They were detained pending the resolution of the case.
An indictment is merely a formal charge that a defendant has committed a violation of the federal criminal laws, and every defendant is presumed innocent unless, and until, proven guilty.This case was investigated by OCDETF's Panama Express Strike Force, comprised of agents and analysts from the Federal Bureau of Investigation, Drug Enforcement Administration, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, United States Coast Guard Investigative Service, and Joint Interagency Task Force South. It is being prosecuted by Assistant United States Attorney Maria Chapa Lopez.
The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking and money laundering organizations and those primarily responsible for the nation's drug supply.
Four Defendants Plead Guilty for Role in Cocaine Trafficking OrganizationRead the Press Release
St. Thomas, USVI – Four defendants involved in a multi-kilogram cocaine trafficking organization pleaded guilty today in District Court on St. Thomas, announced United States Attorney Ronald W. Sharpe. Angel L. Negron, 53, of Puerto Rico; Edwin Monsanto, 53 of St. Thomas; Eddie Lopez-Lopez, 37,of Puerto Rico, and Stephen Torres, 27, of Puerto Rico, pleaded guilty before U.S. District Court Judge Curtis V. Gomez for their respective roles in a wide-ranging conspiracy to smuggle and distribute multi-kilograms of cocaine.
Negron-Beltran, Monsanto and Torres pleaded guilty to conspiring to traffic in cocaine, and Lopez-Lopez pleaded guilty to aiding and abetting the possession with intent to distribute cocaine. Negron-Beltran, Monsanto and Lopez face sentences ranging from 10 years to life, and maximum fines of $10 million. Torres faces up to 20 years in prison, and a maximum fine of $5 million
All four defendants were remanded to the custody of the United States Marshals Service pending sentencing, which is scheduled for June 5, 2014. The charges against these four defendants arose in connection with the investigation and prosecution of Roberto Tapia, the former Director of the Environmental Enforcement Division of the Virgin Islands Department of Planning and Natural 2 Resources (DPNR), for using DPNR as a criminal enterprise to engage in illegal drug trafficking activities. Tapia pleaded guilty in September, and is in custody awaiting sentencing. Two other co-conspirators, Angelo Hill, and Hector Alcenio, also pleaded guilty to related charges and are awaiting sentencing.
The remaining two defendants in the case, Raymond Brown, and Walter Hill, are scheduled for trial on February 18, 2014.
U.S. Attorney Sharpe commended the work of the Federal Public Corruption Task Force, which spearheaded the investigation. This Task Force is comprised of agents from the Federal Bureau of Investigation (FBI), the U.S. Drug Enforcement Administration (DEA), the Virgin Islands Police Department, the United States Marshals Service, the Internal Revenue Service Criminal Investigation Division (IRS-CI), the U.S. Department of Homeland Security, Homeland Security Investigations, the U.S. Customs and Border Protection, the United States Coast Guard, the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and the Virgin Islands Inspector General Office.
Fort Hall Man Pleads Guilty to Possessing Sawed-off ShotgunRead the Press Release
POCATELLO – Arriyon Meeks-Ortiz, 33, of Fort Hall, Idaho, pleaded guilty today in United States District Court to possession of an unregistered firearm, U.S. Attorney Wendy J. Olson announced.
According to the plea agreement, on May 15, 2013, Fort Hall Police officers responded to a residence on the Fort Hall Indian Reservation. Meeks-Ortiz was observed to be holding what appeared to be a small bat or club. After being instructed by officers to leave the residence, Meeks-Ortiz tossed the object into a bedroom. Officers subsequently located an Iver Johnson 12-gauge shotgun with a barrel less than 18” in length on the bed in the bedroom. During an interview with law enforcement, Meeks-Ortiz said that he purchased the sawed-off shotgun in its altered condition for $100 and kept it underneath his trailer.
The charge of possessing an unregistered firearm is punishable by up to ten years in prison, a maximum fine of $250,000, and up to three years of supervised release.
Meeks-Ortiz is scheduled to be sentenced on April 22, 2014, before Chief U.S. District Judge B. Lynn Winmill at the federal courthouse in Pocatello.
The case was investigated by the Fort Hall Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Former Tinker Official Sentenced to 30 Months in Prison for Accepting BribesRead the Press Release
Oklahoma City, Oklahoma – JAMES LEE LOMAN, 71, of McLoud, Oklahoma, a former Item Manager at Tinker Air Force Base, was sentenced today to 30 months in prison for conspiring to commit wire fraud, accepting bribes, and participating in government contracting under an illegal conflict of interest, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma.
In July of 2013, a federal jury heard evidence that from approximately 2002 to 2006, Loman accepted large cash payments from an individual associated with Daytona Aerospace, Inc., of Deerfield Beach, Florida, in exchange for favorable treatment in the Air Force’s purchasing of aircraft replacement parts. The evidence included numerous faxes that Loman sent from his home in McLoud to the individual in Florida. Some of these faxes calculated his bribe payments based on a percentage of aircraft sales to the Air Force, beginning at 5% and ending at 10%. Other faxes kept track of the amount of bribes due and the amount already paid to him. Still other faxes were “collection letters” that used coded language. Loman drove to Florida on multiple occasions to pick up the cash in increments of approximately $50,000. The faxes showed total cash bribes in the amount of $838,200. The jury unanimously found Loman guilty on all three charges.
Today, Chief Judge Vicki Miles-LaGrange sentenced Loman to 30 months in the custody of the Federal Bureau of Prisons. The judge explained that the sentence was lower than she would normally have imposed because of Loman’s age and severe health issues. The court ordered Loman to pay $843,200.00 in restitution to the Department of Defense and has also entered a forfeiture money judgment in the amount of $838,200.00.
This sentence is the result of an investigation by the Defense Criminal Investigative Service and the United States Air Force Office of Special Investigations, with assistance from the Federal Bureau of Investigation and the Office of Inspector General for the U.S. Department of Transportation. The case was prosecuted by Assistant U.S. Attorneys Scott E. Williams and Chris M. Stephens.
Former OKC Schools Counselor and Former Tutoring Company OwnerPlead Guilty to OKC Schools Tutoring Program FraudRead the Press Release
Oklahoma City, Oklahoma – BOBBIE J. DAILEY, 62, from Midwest City, Oklahoma, pled guilty today to making false statements to a government agency by submitting false attendance records for tutoring sessions of students attending Oklahoma City Public Schools, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma. Co-defendant REBECCA E. COTTON, 42, of Midwest City, pled guilty on December 19, 2013, to one count of conspiring to make false statements to the government in connection with the same local tutoring program.
As part of the No Child Left Behind Act of 2001, the U.S. Department of Education provided funding for extracurricular tutoring to eligible students at eligible schools. Eligible schools were those designated by the state to be in need of improvement, and student eligibility was determined by family income. The Oklahoma City Public Schools District ("OKCPS") offered this tutoring program to eligible students at U.S. Grant High School and Roosevelt Middle School. OKCPS required tutoring providers to record student attendance at tutoring sessions on paper rosters and on a computer database which, in turn, was used to generate invoices that the tutoring providers submitted to OKCPS for payment with federal funds.
According to the Indictment filed in the case, during the 2009-2010 school year, Cotton co-owned and operated A Plus Academics, LLC ("A Plus"), a business providing academic tutoring to school children. During this same year, Cotton owned and operated Foundations Tutoring, LLC ("Foundation"”), a business that also provided academic tutoring to school children. A Plus and Foundations shared office space at 608 Askew Drive, in Midwest City. For the 2009-2010 school year, both A Plus and Foundations were state-approved tutoring providers having contracts with OKCPS to provide tutoring services. A Plus primarily tutored students at U.S. Grant High School. Foundations primarily tutored students at Roosevelt Middle School. Both companies hired teachers at the respective schools as tutors. During the 2009-2010 school year, co-defendant Bobbie Dailey was employed at U.S. Grant High School as a counselor and also as an A Plus tutor and "liaison" between A Plus and U.S. Grant High School.
At the December plea hearing, Cotton admitted that in 2009 she agreed with Bobbie Dailey that A Plus would submit student attendance rosters for students who were not, in fact, attending tutoring. Cotton admitted that OKCPS was billed for these students and that A Plus was paid by OKCPS with federal funds. Dailey pled guilty today to one count of making false statements to a governmental agency. She admitted that she submitted false attendance rosters to A Plus that were ultimately used to bill OKCPS for tutoring services never provided. The potential punishment each woman faces is up to five years in prison, followed by three years of supervised release, and a fine of $250,000. In separate plea agreements, both Dailey and Cotton agree to pay restitution to the U.S. Department of Education. Sentencing will take place in approximately 90 days.
At the December plea hearing, Cotton admitted that in 2009 she agreed with Bobbie Dailey that A Plus would submit student attendance rosters for students who were not, in fact, attending tutoring. Cotton admitted that OKCPS was billed for these students and that A Plus was paid by OKCPS with federal funds. Dailey pled guilty today to one count of making false statements to a governmental agency. She admitted that she submitted false attendance rosters to A Plus that were ultimately used to bill OKCPS for tutoring services never provided. The potential punishment each woman faces is up to five years in prison, followed by three years of supervised release, and a fine of $250,000. In separate plea agreements, both Dailey and Cotton agree to pay restitution to the U.S. Department of Education. Sentencing will take place in approximately 90 days.
This case is the result of an investigation by the Internal Revenue Service Criminal Investigation, the U.S. Department of Education, and the Economic Crimes Task Force, and is being prosecuted by Assistant U.S. Attorneys Amanda Maxfield Green and Chris M. Stephens.
Former Moore Resident Who Sought Benefits Following May Tornado Pleads Guilty to Disaster Benefits FraudRead the Press Release
Oklahoma City, Oklahoma – IRA ROBERT SCHILLING, 42, a former resident of Moore, Oklahoma, pled guilty today to committing disaster-benefits fraud in connection with a claim for benefits through the Air Force’s Safe Haven program following the May 2013 tornados in Moore, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma.
Under the Robert T. Stafford Disaster Relief and Emergency Assistance Act, the May 20, 2013, tornado affecting Cleveland County was declared a major disaster and the payment of disaster benefits to Tinker Air Force base civilian employees forced to evacuate their homes was authorized through the Safe Haven program. On June 26, 2013, Schilling signed an Air Force memorandum requesting evacuation allowances and benefits. In that memorandum he certified that he and his dependents evacuated their home after the storm and were residing at a Safe Haven location in Norman, Oklahoma. In court today, he admitted that the statement was false and that his false statement caused the Air Force to pay him money.
Schilling faces up to 30 years in prison, a $250,000 fine, and payment of restitution. Sentencing will take place in approximately 90 days.
This case is the result of an investigation by the U.S. Air Force Office of Special Investigations and the U.S. Department of Homeland Security Office of Inspector General and is being prosecuted by Assistant U.S. Attorney Brandon Hale and Special Assistant U.S. Attorney Dakota Davis.
Former Mingo County Commissioner Sentenced to Federal Prison for ExtortionRead the Press Release
David Baisden stripped local vendor of nearly $60,000 in county business for refusing to give him special discount
CHARLESTON, W.Va. – United States Attorney Booth Goodwin today announced that former Mingo County Commissioner David L. Baisden was sentenced to 20 months in federal prison for using his public office to commit extortion.
In June 2009, Baisden, 67, of Delbarton, West Virginia, shook down the Appalachian Tire store in Williamson, West Virginia, for a deep discount on tires for his personal car, threatening to cut off the store’s county business unless it complied. When Appalachian refused Baisden’s demand, he used his authority as the commission’s purchasing agent to make good on his threat, stripping Appalachian of nearly $60,000 in county business.
More recently, Basiden played a key role in a scheme to obstruct a federal investigation of former Mingo County Sheriff Eugene Crum. In early 2013, Baisden learned that a Mingo County drug defendant was informing to the Federal Bureau of Investigation (FBI) regarding alleged criminal conduct by Crum. Baisden and other county officials orchestrated a scheme to remove the informant’s defense attorney, who was encouraging the FBI cooperation, and replace him with another attorney handpicked by Baisden. Former Mingo County Circuit Judge Michael Thornsbury and former Mingo County Prosecuting Attorney Michael Sparks have pleaded guilty in connection with that scheme.
“The people of Mingo County and southern West Virginia are sick and tired of crooked politicians,” said U.S. Attorney Goodwin. “They deserve honest leaders who will work hard to make West Virginia a better place, not feather their own nests. These prosecutions should send a strong message: politicians are not above the law, and there are serious consequences for abusing the public’s trust.”
Goodwin’s office forced Baisden off the Mingo County Commission last October as part of a plea agreement. That agreement barred Baisden from ever seeking or serving in public office again.
As part of Baisden’s sentence, United States District Court Judge John T. Copenhaver, Jr., ordered him to repay nearly $8,000 to Appalachian Tire and the Goodyear Tire and Rubber Company to reimburse the profits he cost them. After he completes his prison time, Baisden will spend three years on federal supervised release.
The FBI and the West Virginia State Police are conducting the investigation of corruption in Mingo County. Counsel to the United States Attorney Steven Ruby and Assistant United States Attorney Haley Bunn are in charge of the prosecutions.
Former Deputy Mayor of the Village of Spring Valley Pleads Guilty to Participating in Bribery SchemeRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that JOSEPH DESMARET pled guilty today in White Plains federal court to participating in a scheme in which he accepted over $10,000 in cash bribes in exchange for his votes, as a member of the Spring Valley Board of Trustees, to sell Village land and steer a state-funded transportation contract to a real estate development company. DESMARET pled guilty before U.S. District Judge Kenneth M. Karas.
Manhattan U.S. Attorney Bharara stated: “Every politician needs to understand that they hold office to serve the public, not themselves, and that those who violate the trust placed in them by the people do so at the risk of ending their careers behind bars. Serving the public is a great privilege and it should be treated as such.”
According to the Indictment and other documents filed in this case:
DESMARET accepted approximately $10,500 worth of cash bribes from an undercover FBI agent (“UC”) and a cooperating witness in exchange for his vote in favor of a sale of land owned by Spring Valley to a company he believed was controlled by the UC. In addition, DESMARET agreed to steer to the UC’s company New York State funding for road work associated with the project that he believed the UC’s company was developing.
DESMARET, 56, of Monsey, New York, is scheduled to be sentenced by Judge Karas on May 22, 2014. He faces a sentence of up to 40 years in prison and also faces restitution and forfeiture orders each in the amount of up to $10,500.
Mr. Bharara praised the outstanding efforts of the Federal Bureau of Investigation.
This case is being handled by the Office’s White Plains Division and Public Corruption Unit. Assistant U.S. Attorneys Douglas B. Bloom and Justin Anderson are in charge of the prosecution.
Former DMV Employee Pleads Guilty to Conspiracy to Commit Bribery and Document Fraud, Bribery and Witness Tampering in A Widespread Corruption Case at the DMV in Southern CaliforniaRead the Press Release
United States Attorney Laura E. Duffy announced that Jeffrey Bednarek, a former employee at the California Department of Motor Vehicles (“DMV”) in El Cajon, California, pleaded guilty late yesterday to his aggravated role in a conspiracy to commit bribery and identification document fraud, bribery, and witness tampering. Bednarek entered his guilty plea before U.S. Magistrate Judge William V. Gallo.
According to the plea agreement, Bednarek was a Licensing Registration Examiner at the El Cajon DMV who was responsible for conducting driving tests for driver’s license applicants. Bednarek admitted that, beginning in at least April 2009, and continuing up to at least April 26, 2012, he conspired with his co-defendants to commit federal program bribery and identification document fraud.
Bednarek admitted that he falsely entered “passing” scores for both written and behind-the-wheel tests for applicants who applied for regular (Class C) and commercial (Class A) driver’s licenses in exchange for bribes. Bednarek also acknowledged that he directed others to enter false “passing” test scores and that he created false driving test score sheets to create the appearance that the applicant had completed the test. Bednarek said in his plea agreement that during the conspiracy, he produced more than 100 fraudulent driver’s permits and licenses, and that applicants paid more than $50,000 in total bribes for permits and licenses that he fraudulently produced.
While awaiting an upcoming trial that was scheduled for December 2, 2013, Bednarek tampered with one of the Government’s witnesses, the plea agreement said. According to court documents, Bednarek was arrested on November 13, 2013 a complaint for witness tampering. On November 22, 2013, U.S. District Judge Cathy A. Bencivengo ordered that Bednarek be detained pending trial. Bednarek admitted in his plea agreement that between January 26, 2013 and November 4, 2013, he knowingly attempted to corruptly persuade a Government witness to alter his testimony, namely, to provide false testimony regarding cash bribes that Bednarek had received for his aggravating role in the conspiracy. Bednarek admitted that he intended to prevent and influence the Government witness’s testimony in the trial that was scheduled for December 2, 2013.
Of the 30 defendants charged in this widespread corruption scheme (related Criminal Case Nos. 12CR1852-CAB and 13CR0592-CAB), all 30 of the defendants, including Bednarek, have pleaded guilty to felony conduct, namely, conspiracy to commit bribery and identification document fraud. Many of these defendants have been sentenced, and several others are currently awaiting sentencing. Bednarek is next scheduled to be in court before United States District Judge Cathy A. Bencivengo for sentencing on April 25, 2014, at 9:00 a.m.
These cases are the result of an active, ongoing criminal investigation. Anyone with information about corruption at the DMV is asked to contact the Federal Bureau of Investigation at 1-877-NO-BRIBE (662-7423), or the DMV’s Investigations Branch-Office of Internal Affairs at 626-851-0173.
DEFENDANT Criminal Case No. 12CR1852-CABJeffrey T. Bednarek
SUMMARY OF CHARGESCount 1: Title 18, United States Code, Section 371 -- Conspiracy to Commit Bribery and to Produce Unauthorized Identification Documents -- statutory maximum sentence of 5 years’ custody, a maximum fine of $250,000, special assessment of $100, and a maximum term of supervised release of 3 years.
Count 2: Title 18, United States Code, Section 666(a)(1)(B) -- Bribery -- statutory maximum sentence of 10 years’ custody, special assessment of $100, and a maximum term of supervised release of 3 years.
Count 7: Title 18, United States Code, Section 1512(b)(1) -- Witness Tampering -- statutory maximum sentence of 20 years’ custody, a maximum fine of $250,000, special assessment of $100, and a maximum term of supervised release of 3 years.
INVESTIGATING AGENCIESFederal Bureau of Investigation
Department of Motor Vehicles B Investigations DivisionFormer City Clerk in Havana, KSPleads Guilty to EmbezzlementRead the Press Release
WICHITA, KAN. A former city clerk for the city of Havana, Kan., pleaded guilty Wednesday to embezzling funds from the city and from her church, U.S. Attorney Barry Grissom said. She agreed to pay restitution of approximately $14,658 to the city of Havana and $44,568 to Cross Point Baptist Church.
Diana L. Cox, 67, Havana, Kan., pleaded guilty to one count of bank fraud and one count of wire fraud.
In her plea, she admitted embezzling $14,658 from the city of Havana while she was working as city clerk. On Aug. 18, 2011, she presented documents to the Arvest Bank in Caney, Kan., falsely stating that the Havana City Council had voted to change its policy to require only one signature on checks written for city business.
She also admitted that while she was treasurer of the Cross Point Baptist Church she devised a scheme to defraud the church of approximately $44,568. On Dec. 30, 2011, she caused the church to electronically transfer approximately $2,536 to Vanderbilt Mortgage and Finance to make a mortgage payment due on her daughter’s home.
Sentencing is set for April 16. She faces a maximum penalty of 30 years and a fine up to $1 million on the bank fraud count, and a maximum penalty of 20 years and a fine up to $250,000 on the wire fraud count.
Grissom commended the FBI and Assistant U.S. Attorney Mona Furst for their work on the case.Financial Planner Sentenced for Bilking Money from His ClientsRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
DAYTON, OHIO –Joshua E. Knisley, 35, of Wilmington, Ohio was sentenced to 15 months in prison and five years of supervised release for bilking the funds he was entrusted to manage and oversee for his clients. Knisley was sentenced on charges of willfully filing a false federal income tax return with the Internal Revenue Service (IRS), wire fraud, and money laundering. In addition, Knisley forfeited a 2006 Jeep Commander. Knisley previously pleaded guilty to these charges on June 7, 2013.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, Kathy A. Enstrom, Special Agent in Charge, Internal Revenue Service Criminal Investigation, Cincinnati Field Office (IRS), and Kevin R. Cornelius, Special Agent in Charge, Federal Bureau of Investigation, Cincinnati Office (FBI), announced the sentence handed down today by U.S. District Court Judge Thomas M. Rose.
According to court documents, between January 2007 and June 2011, Knisley was a business partner with an individual in a retail boat business known as 77 Marine which was located in Centerville, Ohio. In addition, Knisley wasalso a financial advisor for several individuals. Knisley engaged in an extensive scheme to defraud his financial advising clients, various employees and customers of Marine 77, various financial institutions, and the IRS.
Knisley created false documents, to include business checks, personal financial statements, purchase agreements, business sales reports, and other financial documents. Also, Knisley concealed from his financial advising clients the fact that he continued to divert investment funds, sales proceeds, and loan proceeds entrusted to him for unauthorized personal and business purposes.
In December 2010, Knisley, who was then a resident of Bellbrook, Ohio, willfully filed a false federal income tax return with the IRS for the 2007 income tax year claiming total income in the amount of $21,967, when he actually received approximately $153,761.75 in additional total income.
The total tax loss to the IRS caused by Knisley filing false federal income tax returns with the IRS was approximately $66,908 for the 2007-2009 income tax years. In addition, Knisley caused federal employment tax losses to the IRS in the amount of approximately $68,239.98 for 2008-2011 income tax years.
In December 2010, Knisley, in his capacity of a financial advisor, illegally devised a scheme to defraud an individual by falsely informing this individual that mortgage loans placed on this individuals residences located in Davie, Florida and Lees Summit, Missouri were fully paid off.
Between December 2010 and April 2011 Knisley illegally devised a scheme to defraud an individual by fraudulently selling this individual a 2010 Ski Nautique 200 boat for $54,529.54. At the time of the sale, Knisley did not own, possess, nor was authorized to sell the boat. Knisley caused this individual to wire transfer to him $34,529.54 from a bank located in South Africa to a bank account controlled by Knisley’s business, 77 Marine.
In December 2010, Knisley illegally devised a scheme to defraud and individual by causing this individual to wire transfer to him $50,000 from a bank located in West Palm Beach, Florida to a bank account controlled by Knisley in Dayton, Ohio.
In December 2010, Knisley committed money laundering by making a check payable to cash from his personal bank account in the amount of $18,750, which were proceeds of his wire and bank fraud activities and were used to purchase a 2006 Jeep Commander.
This case was prosecuted by Assistant United States Attorney Dwight Keller and was investigated by special agents from IRS, Criminal Investigation and the FBI.
###El Paso County Man Pleads Guilty to the Sexual Exploitation of ChildrenRead the Press Release
DENVER – Kenneth Wayne Hugo, age 37, of El Paso County, Colorado, pled guilty before U.S. District Court Judge Robert E. Blackburn recently to the sexual exploitation of children, United States Attorney John Walsh and FBI Denver Division Special Agent in Charge Thomas Ravenelle announced. Hugo is scheduled to be sentenced by Judge Blackburn on May 22, 2014. The defendant, who appeared at the hearing in custody, was remanded at its conclusion. Hugo was indicted by a federal grand jury in Denver on August 6, 2013. He pled guilty on January 22, 2014.
According to the stipulated facts contained in his plea agreement, this investigation began as an offshoot of an Australian investigation into citizens distributing child pornography. This investigation led authorities to Texas. As a result of a search warrant executed in Texas, federal authorities found a computer that contained evidence of emails being exchanged with an individual in Colorado Springs, Colorado, namely, Kenneth Hugo. On January 23, 2013, the FBI and the El Paso County Sheriff's Office executed a search warrant at Hugo’s residence. During the execution of the search warrant agents and deputies found images depicting prepubescent and toddler aged females being sexually penetrated. It was determined that Hugo started his collection by utilizing a Russian-based image-sharing website to download child pornography images and videos. He also used this website to meet online other like-minded individuals. Hugo also posted images on the site for others to download.
During the subsequent investigation authorities learned that the defendant had inappropriate sexual contact with prepubescent minor females. When minor children slept over at his house during the summer of 2012, Hugo would wait until the minor girls were asleep, sneak into their room, pull down the covers, pajamas and panties, and fondle them, all the while taking pictures using his cell phone camera. Forensic analysis of the items seized during the search warrant revealed 1,600 images of child pornography on the desktop computer and over 4,200 images on the laptop computer. The laptop also contained all the images Hugo had taken using his cell phone of the girls during the sleepovers. An external hard drive contained over 4,000 images of child pornography and a thumb drive contained approximately 290 such images.
Hugo was arrested on January 23, 2013 by state authorities for the sexual assault of three minor girls. Hugo pled guilty to the sexual assault of those girls in state court and was sentenced in November 2013 to an indeterminate term of imprisonment in the Colorado Department of Corrections of four years to life.
The defendant faces not less than 15 years, and not more than 30 years in federal prison for the sexual exploitation of children. He also faces a fine of not more than $250,000.
This case was investigated by the FBI and the Colorado Springs Police Department.
The defendant is being prosecuted by Assistant U.S. Attorney Valeria Spencer.
This case was brought as part of Project Safe Childhood (PSC), a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, PSC marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about PSC, please visit http://www.justice.gov/psc/ For more information about Internet safety education, please visit http://www.justice.gov/psc/resources.html and click on the tab "resources."