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Friday 6 December 2013
Iowa City Man Sentenced for Conspiracy to Distribute Crack CocaineRead the Press Release
DAVENPORT, IA - On December 5, 2013, Ricardo Ibarra Toscano, a 39 year-old citizen of Mexico, was sentenced by United States District Court Judge John A. Jarvey to 60 months in prison, after pleading guilty to illegal re-entry into the United States as an aggravated felon, announced United States Attorney Nicholas A. Klinefeldt. After serving his sentence, Ibarra Toscano will be turned over to immigration authorities. If he is not deported, then he will be subject to a term of supervised release of three years. Ibarra Toscano was also ordered to pay $100 to the Crime Victims Fund. Ibarra Toscano had been deported on four prior occasions and had five prior drug convictions, including one in 2002 for manufacturing methamphetamine. Ibarra Toscano was found in Muscatine County, Iowa, in March 2013, after pleading guilty to interference with official acts.
This case was investigated by the United States Department of Homeland Security-Immigration and Customs Enforcement and the Muscatine County Sheriff’s Office, and was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
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Iowa City Man Sentenced for Conspiracy to Distribute Crack CocaineRead the Press Release
DAVENPORT, IA - On December 5, 2013, Norman Dudley, age 22, from Iowa City, Iowa, was sentenced by United States District Court Judge John A. Jarvey to 26 months in prison, after pleading guilty to distribution of cocaine base (“crack”), announced United States Attorney Nicholas A. Klinefeldt. Dudley was also ordered to serve three years of supervised release, following the period of imprisonment, and to pay $100 towards the Crime Victims Fund.
In a related case, John Mulbah, age 22, from Iowa City, Iowa, was also sentenced by United States District Court Judge John A. Jarvey to 72 months in prison, after pleading guilty to conspiracy to distribute cocaine base (“crack”), announced United States Attorney Nicholas A. Klinefeldt. Mulbah was also ordered to serve four years of supervised release following the period of imprisonment, and to pay $100 towards the Crime Victims Fund.
As part of the investigation, law enforcement officers made controlled purchases of crack cocaine from Mulbah on August 10, August 13 and August 14. During the purchase on August 14, 2012, both Dudley and Mulbah distributed crack cocaine as part of a controlled transaction with law enforcement officers. Mulbah admitted as part of the plea proceedings that between August 14 and August 17, 2012, he was involved with Norman Dudley and others in an agreement to distribute crack cocaine.
This case was investigated by the Iowa Department of Public Safety-Division of Narcotics Enforcement, Iowa Division of Criminal Investigation, the Iowa City, Iowa, Police Department and the Johnson County Sheriff’s Office. This case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
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Informational: Federal Court Initial AppearancesRead the Press Release
The United States Attorney's Office announced that during a federal court session in Great Falls, on December 6, 2013, before U.S. Magistrate Judge Keith Strong, the following individuals were arraigned:
BRUCE JOHN DENNY, a 55-year-old resident of Box Elder, appeared on a charge of sexual abuse. He is currently detained. If convicted of this charge, DENNY faces possible penalties of life in prison, a $250,000 fine, and lifetime supervision. Assistant U.S. Attorney Danna R. Jackson is the prosecutor for the United States. The investigation was conducted by the Federal Bureau of Investigation.
GARRETT KIRBY LAFROMBOISE, age 21, and CECILIA ROSE GARDIPEE, age 22, residents of Box Elder, appeared on charges of second degree murder and assault resulting in serious bodily injury. They are currently detained. If convicted of these charges, they each face possible penalties of life in prison, a $250,000 fine, and 5 years supervised release. Assistant U.S. Attorney Danna R. Jackson is the prosecutor for the United States. The investigation was conducted by the Federal Bureau of Investigation.
ZACKARIA JULY CRAWFORD, a 22-year-old resident of Browning, appeared on charges of strangulation and assault resulting in serious bodily injury. He is currently detained. If convicted of these charges, CRAWFORD faces possible penalties of 10 years in prison, a $250,000 fine, and 3 years supervised release on each charge. Assistant U.S. Attorney Ryan G. Weldon is the prosecutor for the United States. The investigation was conducted by the Federal Bureau of Investigation.
The defendants pled not guilty to the charges.
The charge, an indictment, information or complaint, is merely an accusation and all persons named as defendants are presumed innocent until proven guilty. A pre-trial conference and a trial date will be set and the United States will be required to prove the allegations set forth in the indictment beyond a reasonable doubt.
Informational: Federal Court ArraignmentRead the Press Release
The United States Attorney's Office announced that during a federal court session in Great Falls, on December 6, 2013, before U.S. Magistrate Judge Keith Strong, the following individual was arraigned:
KEVIN LEWIS JOUBERT, a 43-year-old resident of Bozeman, appeared on a charge of receipt of child pornography. He is currently detained. If convicted of this charge, JOUBERT faces possible penalties of a mandatory minimum of 15 years in prison and could be sentenced to 40 years, a $250,000 fine, and lifetime supervision. Assistant U.S. Attorney Cyndee L. Peterson is the prosecutor for the United States. The investigation was a cooperative effort between the Montana Internet Crimes Against Children Task Force (ICAC), the Bozeman Police Department, and the U.S. Department of Homeland Security - Homeland Security Investigations.
The defendant pled not guilty to the charge.
The charge, an indictment, information or complaint, is merely an accusation and all persons named as defendants are presumed innocent until proven guilty. A pre-trial conference and a trial date will be set and the United States will be required to prove the allegations set forth in the indictment beyond a reasonable doubt.
Information Technology Specialist at <br /> National Science Foundation <br /> Pleads Guilty to Stealing $90,000 from GovernmentRead the Press Release
An information technology specialist working for the National Science Foundation (NSF) pleaded guilty late yesterday to theft of government property totaling more than $90,000, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and Acting U.S. Attorney Dana J. Boente of the Eastern District of Virginia.
According to court records, James Troy Clark, 51, of Fredericksburg, Va., was responsible for purchasing information technology supplies and services for his office at NSF using government-issued purchase cards. From 2010 through July 2013, Clark used these purchase cards to purchase items for his personal use and the personal use of others, including cellular telephones and the attendant monthly service charges for those phones; multiple laptop computers and tablets; thousands of dollars in movies, music, and other content from the Apple iTunes store; and numerous other electronic devices and accessories.
The total amount of purchases made by Clark for his and others’ personal use was approximately $94,493. Clark faces a maximum penalty of 10 years in prison when he is sentenced on Feb. 21, 2014.
The case was investigated by National Science Foundation’s Office of Inspector General. The case was prosecuted by Trial Attorneys Kevin Driscoll and Menaka Kalaskar of the Criminal Division’s Public Integrity Section and Mark D. Lytle of the U.S. Attorney’s Office for the Eastern District of Virginia.Information Technology Specialist at National Science Foundation Pleads Guilty to Stealing $90,000 from GovernmentRead the Press Release
WASHINGTON – An information technology specialist working for the National Science Foundation (NSF) pleaded guilty late yesterday to theft of government property totaling more than $90,000, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and Acting U.S. Attorney Dana J. Boente of the Eastern District of Virginia.
According to court records, James Troy Clark, 51, of Fredericksburg, Va., was responsible for purchasing information technology supplies and services for his office at NSF using government-issued purchase cards. From 2010 through July 2013, Clark used these purchase cards to purchase items for his personal use and the personal use of others, including cellular telephones and the attendant monthly service charges for those phones; multiple laptop computers and tablets; thousands of dollars in movies, music, and other content from the Apple iTunes store; and numerous other electronic devices and accessories.
The total amount of purchases made by Clark for his and others’ personal use was approximately $94,493. Clark faces a maximum penalty of 10 years in prison when he is sentenced on Feb. 21, 2014.
The case was investigated by National Science Foundation’s Office of Inspector General. The case was prosecuted by Trial Attorneys Kevin Driscoll and Menaka Kalaskar of the Criminal Division’s Public Integrity Section and Mark D. Lytle of the U.S. Attorney’s Office for the Eastern District of Virginia.
Grant County Man Pleads Guilty to Federal Firearms ChargesRead the Press Release
ALBUQUERQUE – Javier J. Reyes, 19, of the Village of Santa Clara in Grant County, N.M., pleaded guilty in Las Cruces federal court today to firearms charges. Reyes entered his guilty plea without the benefit of a plea agreement.
Reyes and his co-defendant Gabriel Saiz, 20, of Silver City, N.M., were charged with possession of an unregistered firearm in a criminal complaint filed on March 1, 2013. The two subsequently were indicted and charged with possession of an unregistered short-barreled rifle, and possession of a firearm with an obliterated serial number. According to the indictment, Saiz and Reyes possessed a firearm made from a Mossberg .22 caliber rifle with a barrel length of less than 16 inches and an obliterated serial number on Nov. 27, 2012, in Grant County, N.M.
According to court filings, Reyes and Saiz were arrested on local charges by the Silver City Police Department on Nov. 27, 2012, in Silver City after they robbed a woman at gunpoint at approximately 7:30 p.m. that day and allegedly assaulted four individuals by brandishing a firearm at them approximately an hour later. The officers were able to apprehend Reyes and Saiz at approximately 9:00 p.m. that night because the victim of the armed robbery provided the license plate number for the vehicle in which Reyes and Reyes were driving. When the officers arrested the men, they observed a firearm on the floor board under the front passenger seat.
Reyes was released pending trial following his arrest. While on release, Reyes was arrested again on Oct. 25, 2013, on a criminal complaint charging him with receiving a firearm while under indictment. According to the complaint, Reyes was arrested on Oct. 4, 2013, on state charges at a dormitory of the Western New Mexico University campus by officers who responded to reports of a man with a gun. At the time of his arrest, Reyes had a firearm in the front waistband of his pants. Reyes has been in custody since this second arrest.
During today’s proceedings, Reyes pled guilty to the indictment charging him with possession of the unregistered short-barreled rifle with the obliterated serial number. He also pled guilty to a felony information charging him with receiving a firearm while under indictment. At sentencing, Reyes faces a maximum penalty of ten years in prison for possession of an unregistered firearm, five years in prison for possession of a firearm with an obliterated serial number, and five years in prison for receiving a firearm while under indictment. He remains in custody pending his sentencing hearing, which has yet to be scheduled.
Saiz, Reyes’ co-defendant, pleaded guilty in Sept. 2013 to both counts of the indictment. He faces a maximum penalty of ten years in prison for possession of an unregistered firearms and a maximum penalty of five years in prison for possession of a firearm with an obliterated serial number. He remains detained pending his sentencing hearing, which has not been scheduled.
This case was investigated by the Las Cruces office of the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Silver City Police Department and is being prosecuted by Assistant U.S. Attorney Maria Y. Armijo of the U.S. Attorney’s Las Cruces Branch Office.
Georgia Man Accused of Discharging Waste into Potomac River- Indicted on Conspiracy, Clean Water Act, False Claims, and Related Charges -Read the Press Release
WASHINGTON - Patrick Brightwell, 47, of Bogart, Ga., has been indicted by a federal grand jury on charges that he orchestrated the discharge of waste into the Potomac River at Hains Point from 2009 through 2011, during the same period his company was hired by the National Park Service to clean out the storm water sewer system on the National Mall.
The indictment was announced by Acting Assistant Attorney General Robert G. Dreher of the Environment and Natural Resources Division of the Department of Justice; Ronald C. Machen Jr., U.S. Attorney for the District of Columbia, David G. McLeod, Jr. Special Agent in Charge of the Environmental Protection Agency’s criminal enforcement program for the Middle Atlantic States, and Teresa Chambers, Chief of the U.S. Park Police.
The eight-count indictment of Brightwell was unsealed following his arrest in Georgia on Dec. 5, 2013. It was filed on Nov. 15, 2013, by a grand jury in the U.S. District Court for the District of Columbia. It charges Brightwell with conspiracy, a Clean Water Act violation, false claims, and obstructing the investigation of these offenses by tampering with witnesses and making false statements.
“This indictment alleges that Patrick Brightwell ripped off the taxpayer and polluted the Potomac River by illegally dumping waste he was being paid to dispose of properly,” said U.S. Attorney Machen. “According to the indictment, Brightwell tried to cover up his crimes by lying to the police and encouraging someone else to lie as well. This prosecution demonstrates our commitment to enforcing criminal laws designed to protect our precious natural resources.”
“Illegally discharged wastewater presents a danger to public health and a threat to our environment,” said Special Agent in Charge McLeod. “This indictment demonstrates EPA’s resolve to collaborate with our partners to vigorously investigate any credible allegation that a company or individual is treating our nation's environmental laws with contempt.”
“We are pleased to have taken part in the initial discovery and investigation of this crime,” said Chief Chambers. “It is through collaborative efforts such as this that law enforcement sends a strong message that we take environmental crimes seriously and that violators will be prosecuted.”
According to the indictment, from in or about 2008 through 2011, Brightwell’s company had a contract with the National Park Service to clean the storm water sewer system on the National Mall. The contract required that waste removed from the Mall’s storm drains and oil-water separators be disposed of at a proper disposal facility in compliance with District of Columbia regulations and federal law. Brightwell hired employees to work under the contract in 2008, 2009, and 2010, and hired a subcontractor, B&P Environmental LLC, to perform the work in 2011. Each year, Brightwell supervised the work: collecting waste in a vacuum truck, a vehicle designed to gather, store, and transport such waste.
As alleged in the indictment, in 2009, 2010, and 2011, Brightwell directed his employees and subcontractors to discharge waste from the vacuum truck at a storm drain on Hains Point, where the waste would flow into the Potomac River; Brightwell also directed his employees to conceal these discharges from the National Park Service and police.
During this period, Brightwell continued to invoice the National Park Service for cleaning services, but concealed and did not disclose that Brightwell’s company was not properly disposing of the waste, as required by the contract. Brightwell’s company received approximately $533,000 between 2008 and 2011, according to the indictment.
The indictment further alleges that, on June 6, 2011, after the U.S. Park Police stopped the vacuum truck at Hains Point, Brightwell sought to obstruct the investigation by making false statements himself, by telling a subcontractor to make false statements to the police, and by telling an employee to leave the area to prevent police from interviewing him.
If convicted, Brightwell faces a maximum sentence of five years in prison on each of the conspiracy and false claims charges, as well as a $250,000 fine; a maximum sentence of three years in prison on the Clean Water Act violation and a fine of up to $50,000 per day; a maximum sentence of twenty years in prison on the witness tampering counts; and a maximum sentence of up to five years in prison on the false statement count. The case is assigned to the Honorable James E. Boasberg of the U.S. District Court for the District of Columbia.
Earlier this year, the subcontractor, B&P Environmental LLC, and a B&P employee working on June 6, 2011, both pled guilty to violations of the Clean Water Act before the U.S. District Court. As part of their pleas, both the company and employee agreed to cooperate with the government’s investigation. Both the company and employee are awaiting sentencing.
An indictment is merely a formal charge that a defendant has committed a violation of criminal laws and is not evidence of guilt. Every defendant is presumed innocent until, and unless, proven guilty.
The case is being investigated by Special Agent Socrates Michael of the EPA and Detective Jon Crichfield of the U.S. Park Police. It is being prosecuted by Senior Trial Attorney Lana Pettus of the Department of Justice’s Environmental Crimes Section and Assistant U.S. Attorney Jonathan P. Hooks of the U.S. Attorney’s Office for the District of Columbia. Assistance was provided by Paralegal Specialist Ashleigh Nye of DOJ’s Environmental Crimes Section and Paralegal Specialist Krishawn Graham of the U.S. Attorney’s Office.
13-414Gambia Man Pleads Guilty to Misuse of Passport and Aggravated Identity TheftRead the Press Release
BUFFALO, N.Y. – U.S. Attorney William J. Hochul, Jr., announced today that Bakusa Dukaray, 38, of Gambia, pleaded guilty to misuse of passport and aggravated identity theft before U.S. District Chief Judge William M. Skretny. The misuse of passport charge carries a maximum sentence of 10 years in prison, a $250,000 fine, or both. The aggravated identity theft charge carries a mandatory two year consecutive sentence to the misuse of passport charge.
Assistant U.S. Attorney Marie P. Grisanti, who is handling the case, stated that on May 5, 2013, Dukaray attempted to enter the U.S. at the Lewiston Bridge Port of Entry in Lewiston, N.Y. At that time, the defendant presented a Canadian passport issued to his friend.
The conviction is the result of an investigation on the part of Enforcement Officers of the U.S. Customs and Border Protection under the direction of Randy Howe, Acting Director of Field Operations.
Sentencing is scheduled for March 5, 2014, at 9:00 am before Judge Skretny.Fort Thompson Man Charged with Failure to Register as A Sex OffenderRead the Press Release
United States Attorney Brendan V. Johnson announced that a Fort Thompson, South Dakota, man has been indicted by a federal grand jury for Failure to Register as a Sex Offender.
Stuart Dion, age 30, was indicted on November 14, 2013. He appeared before U.S. Magistrate Judge Mark A. Moreno on December 3, 2013, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 10 years in custody and/or a $250,000 fine, a mandatory minimum period of at least 5 years of supervised release, with a violation of a condition of release possibly resulting in 2 years of additional incarceration on any such revocation. If Dion commits a new felony violation of sexual abuse, sexual exploitation and other abuse of children, transportation for illegal sexual activity and related crimes, kidnapping, or sex trafficking of children by force, fraud, or coercion, while on supervised release, he may be incarcerated for a mandatory minimum term of 5 years up to life for each violation. He may also be required to pay $100 to the Federal Crime Victims Fund, and restitution may also be ordered.
The Indictment alleges that between September 17, 2013 and October 21, 2013, Dion knowingly failed to register and update his registration.
The charge is merely an accusation and Dion is presumed innocent until and unless proven guilty.
The investigation is being conducted by the U.S. Marshals Service. Assistant U.S. Attorney Meghan N. Dilges is prosecuting the case.
Dion was remanded to the custody of the U.S. Marshals Service pending trial. A trial date has not been set.
Former USDA Employee Sentenced to 40 Months for Lying in Order to Secure Loans to Hide More Than $600,000 in Thefts from Federally Funded Non-profitRead the Press Release
MONROE, La. –United States Attorney Stephanie A. Finley announced today that Donna Jean Remides, 52, of Winnsboro, La., was sentenced by U.S. District Judge Robert G. James to 40 months in prison and five years of supervised release for lying on loan applications in order to receive loans used to hide the theft of $640,000 from a federally funded non-profit. She was also ordered to pay $450,000 in restitution. Remides pleaded guilty June 24, 2013 during the course of a trial.
Witness testimony and documents admitted at trial and the guilty plea revealed that Remides was employed as a project coordinator by the U.S. Department of Agriculture (USDA) through the Natural Resource Conservation Service (NRCS) to work for the non-profit Northeast Delta Resource Conservation and Development Council (NDRC&DC) in Winnsboro. From January 2001 to December 2010, Remides used the NDRC&DC accounts to pay herself $640,000 without authorization from the NDRC&DC. She wrote herself and her private business checks during the nearly 10-year period. She also obtained loans in the name of the council to cover the thefts. Loan documents were filled out stating that the council members had authorized loans at meetings when in fact they had not.
The USDA, Office of Inspector General in Jackson, Miss., and the Federal Bureau of Investigation investigated the case. Assistant U.S. Attorney Cytheria D. Jernigan prosecuted the case.
Former Top Officers of Vitesse Semiconductor Corporation Sentenced in Manhattan Federal Court for Conspiring to Obstruct an Impending Federal InvestigationRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that LOUIS TOMASETTA, the founder and former CEO of Vitesse Semiconductor Corporation (“Vitesse”), a publicly-traded company, and EUGENE HOVANEC, the former Chief Financial Officer and Vice President of Vitesse, were sentenced today in Manhattan federal court to three years of probation for conspiring to destroy, alter, or falsify records relating to Vitesse’s April and October 2001 stock option grants with the intent to obstruct a contemplated investigation by the U.S. Securities and Exchange Commission (“SEC”). TOMASETTA and HOVANEC pled guilty in August 2013, and were sentenced today by U.S. District Judge Jed S. Rakoff.
According to the Superseding Information and evidence in court proceedings:
During 2001 to 2006, Vitesse’s Board of Directors, specifically the Compensation Committee of the Board (the “Compensation Committee”), administered shareholder-approved stock options plans (the “Plans”) and had the authority under the Plans to grant stock option awards. Vitesse’s public filings for the 2001 to 2005 year-end period indicated that the exercise price of all stock options was at least equal to the fair market value of Vitesse’s stock price on the date of the grant. During this time period, TOMASETTA, HOVANEC, and others generally initiated and oversaw the option grant process.
In November 2005, Yatin Mody, then Vitesse’s Chief Financial Officer, contacted Vitesse’s then-outside law firm (“Law Firm-1”) concerning a press inquiry about Vitesse’s stock option practices. After reviewing documents related to stock option grants in April 2001 and October 2001, Law Firm-1 advised Mody and TOMASETTA that it had concerns about those option grants, and specifically concern about whether Vitesse had properly accounted for these option grants. For example, Vitesse’s April 12, 2001, Compensation Committee meeting minutes memorialized option grants with an exercise price at the April 6, 2001, closing price of Vitesse’s stock, which was lower than the April 12 closing price. These minutes raised a question about whether the options were in fact granted on the day of the meeting (April 12) or on the earlier date (April 6), and potentially affected the accounting treatment of the options in a way that would require adjustments to Vitesse’s financial reports. Similarly, the Compensation Committee meeting minutes from October 25, 2001, memorialized option grants with an exercise price at the October 2, 2001, closing price, which was lower than the October 25 closing price.
In late November 2005, after discussions with TOMASETTA and HOVANEC, Mody created minutes of the Compensation Committee meetings allegedly held on April 6, 2001, and October 2, 2001. Mody then provided copies of these minutes to Law Firm-1, and specifically advised Law Firm-1 that they were prepared in November 2005 to reflect what had actually occurred at those meetings.
Tomasetta and Hovanec Alter and Fabricate Records Regarding the 2001 Option Grants
On March 18, 2006, the Wall Street Journal published an article that raised questions about stock option practices at various companies, including Vitesse. Following the article, Law Firm-1 raised concerns to Vitesse’s directors and management, including TOMASETTA and HOVANEC, about Vitesse’s option grants and specifically about the fact that Compensation Committee minutes had been created years after the fact. Law Firm-1 informed TOMASETTA and HOVANEC that because of the Wall Street Journal article, there was a significant possibility of an SEC investigation into Vitesse’s option practices and disclosures.
At a meeting on April 11, 2006, Law Firm-1 also advised Vitesse’s directors and management, including TOMASETTA and HOVANEC, that Mody’s after-the-fact creation of Compensation Committee meeting minutes raised questions about whether the meetings had actually occurred. That same day, Vitesse’s Audit Committee retained a law firm (“Law Firm-2”) to conduct an independent investigation into Vitesse’s stock option grants. Law Firm-2 requested that Vitesse provide it with access to the computer used by the Vitesse employee who was responsible for actually typing the minutes of the Compensation Committee meetings when they occurred (the “Assistant’s Computer”).
With an understanding that Law Firm-2 would access the Assistant’s Computer, on April 12, 2006, TOMASETTA, HOVANEC, and Mody created documents that purported to be minutes of meetings of Vitesse’s Compensation Committee on April 6, 2001 and October 2, 2001, authorizing option grants at those meetings. After creating these documents, they transferred electronic copies of the documents containing the two recently created sets of minutes to the Assistant’s Computer and, in an effort to make it appear that the minutes were created at an earlier time, TOMASETTA, HOVANEC, and Mody reset the computer’s internal clock to backdate the creation date of these purported minutes. TOMASETTA and HOVANEC engaged in this action to obstruct Law Firm-2’s internal investigation, knowing that there was likely to be an SEC investigation of Vitesse’s option grant practices and disclosures.
In addition to their sentences, TOMASETTA, 64, of Ojai, California, and HOVANEC, 61, of Westlake Village, California, were each fined $30,000.
Yatin Mody, 50, of Westlake Village, California, pled guilty in December 2010, before U.S. District Judge John G. Koeltl, to securities fraud, making false entries in the financial records of a corporation, and conspiracy, pursuant to a cooperation agreement with the Government. Mody awaits sentencing.
Mr. Bharara praised the investigative work of the U.S. Postal Inspection Service and the Criminal Investigators of the U.S. Attorney’s Office, which jointly investigated this case. He also thanked the SEC for its assistance.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force, on which Mr. Bharara serves as a Co-Chair of the Securities and Commodities Fraud Working Group. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.StopFraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys John J. O’Donnell, Katherine R. Goldstein, and David I. Miller are in charge of the prosecution.
Former State Department Contract Employee and Husband Sentenced for $53 Million FraudRead the Press Release
ALEXANDRIA, Va. – Kathleen D. McGrade, age 64, and Brian C. Collinsworth, age 47, of Stafford, Va., were sentenced today to 24 and 18 months incarceration, respectively, by U.S. District Judge Liam O’Grady in the Eastern District of Virginia for committing major fraud against the government, conspiracy to launder monetary instruments, and engaging in unlawful monetary transactions.
Dana J. Boente, Acting United States Attorney for the Eastern District of Virginia; Steve A. Linick, Inspector General for the Department of State; and Thomas J. Kelly, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Section, Washington, D.C. Field Office, made the announcement following the sentencing hearing.
According to Court records, McGrade and Collinsworth admitted that McGrade was a contract employee for the Department of State and performed the role of a contract specialist for an office that awarded construction contracts for work done at U.S. embassies worldwide. Collinsworth worked at one of the companies that received contracts. In 2006, the defendants married, but did not tell others at the Department of State. The defendants started a company, the Sterling Royale Group, or SRG, with McGrade being the president and Collinsworth the vice-president and project manager.
In late 2007, McGrade caused a State Department contracting officer to sign a contract between the Department of State and SRG, when McGrade failed to disclose her role in SRG, her marriage, or that proper contracting competitive procedures had not been followed. The contract made SRG eligible to receive task orders for work to be done at embassies and McGrade began steering work to the company. She acted as the contract negotiator between the Department of State engineers responsible for getting the jobs done, on the one hand, and Collinsworth, who was acting on behalf of SRG and the subcontractors, on the other. Between 2008 and 2011, McGrade caused Department of State contracting officers to sign 17 task orders awarding work worth almost $53 million. In 2010, the defendants also lied about their marriage to investigators conducting McGrade’s background investigation regarding renewal of her security clearance.
In the summer of 2011 a news article disclosed the defendants’ marriage, and the Department of State terminated her employment. The Department of State, however, had paid SRG about $39 million, and after the defendants had paid their subcontractors, they still had millions of dollars. Among other things, they bought houses, a condominium, a yacht, a Lexus automobile, jewelry, and a Steinway piano with the fraudulently obtained money. The defendants were ordered to forfeit all of those items in the amount of $7,864,795.
This case was investigated by the Department of State, Office of Inspector General, and the Global Illicit Financial Team, a task force led by the Criminal Investigation Section of the Internal Revenue Service. Assistant United States Attorneys Jack Hanly and Mark D. Lytle are prosecuting the case on behalf of the United States.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.Former Sea Star Line President Sentenced to Serve Five Years in <br /> Prison for Role in Price-Fixing Conspiracy Involving Coastal <br /> Freight Services Between the Continental United States and <br /> Puerto RicoRead the Press Release
The former president of Sea Star Line LLC, a Jacksonville, Fla.-based water freight carrier, was sentenced to serve five years in prison and to pay a $25,000 criminal fine for his participation in a conspiracy to fix rates and surcharges for freight transported by water between the continental United States and Puerto Rico, the Department of Justice announced today.
Frank Peake was sentenced today by Judge Daniel R. Dominguez in U.S. District Court for the District of Puerto Rico in San Juan. Peake’s two-week trial took place in January 2013.
“The sentence imposed today reflects the serious harm these conspirators inflicted on American consumers, both in the continental United States and in Puerto Rico,” said Bill Baer, Assistant Attorney General in charge of Department of Justice’s Antitrust Division. “The Antitrust Division will continue to vigorously prosecute executives who collude to fix prices at the expense of consumers.”
According to court documents and evidence presented at trial, Peake and his co-conspirators conspired through meetings and other communications in the continental United States and Puerto Rico to fix, stabilize and maintain rates and surcharges for Puerto Rico freight services, to allocate customers of Puerto Rico freight services between and among the conspirators and to rig bids submitted to customers of Puerto Rico freight services. Peake was involved in the conspiracy from at least late 2005 until at least April 2008.As a result of the ongoing investigation, the three largest water freight carriers serving routes between the continental United States and Puerto Rico, including Peake’s former employer Sea Star, have pleaded guilty and been ordered to pay more than $46 million in criminal fines for their roles in the conspiracy. Sea Star pleaded guilty on Dec. 20, 2011, and was sentenced by Judge Dominguez to pay a $14.2 million criminal fine. Sea Star transports a variety of cargo shipments, such as heavy equipment, perishable food items, medicines and consumer goods, on scheduled ocean voyages between the continental United States and Puerto Rico.
Peake and five other individuals have been ordered to serve prison sentences ranging from seven months to five years. Additionally, Thomas Farmer, the former vice president of price and yield management of Crowley Liner Services, was indicted in March 2013 for his role in the conspiracy and is scheduled to go to trial in May 2014.This case is part of an ongoing investigation being conducted by the Antitrust Division’s National Criminal Enforcement Section and the Defense Criminal Investigative Service. Anyone with information concerning price fixing or other anticompetitive conduct in the coastal water freight transportation industry is urged to call the Antitrust Division’s National Criminal Enforcement Section at 202-307-6694.
Former Newton County Deputy Sheriff Pleads Guilty to Firearms ChargeRead the Press Release
ATLANTA - Darrell Mathis has pleaded guilty to a charge of possessing a firearm in furtherance of a drug trafficking crime.
“The defendant dealt drugs while armed with a gun while he was a deputy sheriff,” said United States Attorney Sally Quillian Yates. “He was sworn to uphold the law and to protect the public from the crimes that he committed himself. Today’s guilty plea provides important reassurance to the community that corrupt law enforcement officers have no place in our community and will be held accountable for their actions.”
Ricky Maxwell, Acting Special Agent in Charge, FBI Atlanta Field Office, stated: “A career in law enforcement comes with not only immense responsibilities but also temptations to stray from those responsibilities. Former Deputy Mathis unfortunately gave in to those temptations, the results of which ended his career and damaged the public’s trust in those others serving honorably. The FBI will continue its efforts to identify, investigate, and present for prosecution, those individuals who engage in similar such corrupt and criminal conduct.”
According to United States Attorney Yates, the charges and other information presented in court: In April 2013, it came to the attention of the Federal Bureau of Investigation that Mathis, a deputy sheriff with the Newton County Sheriff’s Office, was engaged in distributing marijuana. From May through September 2013, Mathis sold various quantities of marijuana to a confidential source who was working with the FBI, as well as to an undercover FBI agent. On at least two occasions, Mathis sold marijuana from his marked patrol vehicle while wearing his Newton County Sheriff’s Office uniform.
On August 8, 2013, Mathis sold one pound of marijuana to an undercover FBI agent. Following that sale, Mathis and the undercover FBI agent went to meet with another undercover FBI agent to discuss the sale of additional quantities of marijuana. Mathis brought his NCSO badge and his firearm to the meeting. Mathis told the undercover agent that he was bringing his firearm to the meeting “just in case.” During the meeting, Mathis told the second undercover FBI agent, who Mathis believed to be a marijuana and cocaine trafficker, that he was a police officer, pulled out his badge, and stated, “Don't worry, I'm on your side.” Mathis was arrested on September 19, 2013, when he met with the undercover FBI agent while in possession of one pound of marijuana.
The charge in this case carries a maximum sentence of life imprisonment and a mandatory minimum sentence of five years' incarceration, as well as a maximum fine of $250,000. In determining the actual sentence, the Court will consider the United States Sentencing Guidelines, which are not binding but provide appropriate sentencing ranges for most offenders.
Darrell Mathis, 41, of Lithonia, Ga., is scheduled to be sentenced on March 5th, at 2:00 p.m. before United States District Judge Orinda D. Evans.
This case is being investigated by the Federal Bureau of Investigation.
Assistant United States Attorney Jamie L. Mickelson is prosecuting the case.
The U.S. Attorney’s Office in Atlanta recommends parents and children learn about the dangers of drugs at the following web site: www.justthinktwice.com.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is http://www.justice.gov/usao/gan/.
Former Madison County Treasurer Sentenced for Structuring Property Tax Sales to Reward Campaign ContributorsRead the Press Release
The former treasurer of Madison County, Illinois, was sentenced to thirty months in prison by the U.S. District Court in East St. Louis, Illinois, on December 6, 2013, for violating the Sherman Antitrust Act, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today. Fred Bathon, 58, had pleaded guilty on February 5, 2013, to a violation of the Sherman Antitrust Act for his role in structuring Madison County property tax sales in a way that increased prices and rewarded campaign contributors. In addition to the thirty month sentence, Bathon was ordered to pay a $20,000 fine and will serve two years supervised release after his sentence of incarceration.
In imposing sentence, the Court noted the impossibility of making the individualized determination of loss as to each victim which is required by law before the Court can impose an order of restitution on a defendant. There were thousands of homeowners who were impacted by the tax auctions and each homeowner's situation was legally unique making calculation of individual losses impossible.
At Illinois tax lien auctions, investors bid to purchase tax lien certificates issued against delinquent tax payers. Investors are supposed to compete to purchase these tax liens by bidding on the interest rate the property owner will be required to pay prior to redeeming the tax lien attached to the owner's property. The bid opens at no more than the statutory maximum of 18% and through a competitive bidding process can be driven as low as 0 percent. The bidder offering the least penalty percentage rate, i.e., the bidder who is willing to allow the owner to redeem his property for the smallest penalty, is allowed to purchase the tax lien. As such, competitive bidding benefits financially distressed homeowners by reducing the amount of money that they have to pay to save their home from foreclosure; however, that same system reduces the profit made by tax buyers. Tax buyers prefer to receive high interest rates, which corresponds to higher profits.
For the tax sales conducted in 2005-2008, Fred Bathon structured the tax sales in a way that eliminated competitive bidding and allowed the tax buyers to engage in price fixing by only bidding the statutory maximum interest rate of 18%. In addition to awarding properties at non-competitive interest rates, Bathon also utilized a seating chart to ensure that his largest campaign contributors were recognized by the auctioneer as the winning bidder.
By 2007 and 2008, the bid rigging and price fixing was so pervasive that distressed homeowners were charged the statutory maximum interest rate on nearly every property tax lien sold. During the tax auction occurring November 14-15, 2007, 2,549 out of 2,574 property tax liens were awarded to bidders for the statutory maximum interest rate of 18%, which represented 99.03% of the property tax liens auctioned. During the tax auction occurring November 13-14, 2008, 2,290 out of 2,364 property tax liens were awarded to bidders for the statutory maximum interest rate of 18%, which represented 96.86% of the property tax liens auctioned.
Under Illinois law, Bathon will also forfeit his entire public pension as a result of his conviction. The Illinois Pension Code provides that “[n]one of the benefits herein provided for shall be paid to any person who is convicted of any felony relating to or arising out of or in connection with his or her service as a member.” This provision of Illinois law is oftentimes referred to as the “Ryan Rule,” following the Illinois Supreme Court’s decision in Ryan v. Bd. of Trustees of Gen. Assembly Ret. Sys., 236 Ill. 2d 315, 924 N.E.2d 970 (2010), which determined former Governor George Ryan forfeited all of his public pension benefits following his conviction on federal corruption charges. The state pension forfeiture provision reaches all public pension benefits, including those earned while serving in public positions with no connection or nexus to the federal conviction.
The investigation was conducted through the Metro East Public Corruption Task Force by agents from the Internal Revenue Service, and the Federal Bureau of Investigation. The case was prosecuted by Assistant United States Attorneys Steven D. Weinhoeft and Norman R. Smith.
Former Goldman Sachs Vice President Sentenced in Manhattan Federal Court to Nine Months in Prison for Fraudulently Amassing and Concealing Trading PositionRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that MATTHEW TAYLOR, formerly a vice president at Goldman, Sachs & Co. (“Goldman Sachs”) and a trader on Goldman Sachs’s Capital Structure Franchise Trading (“CSFT”) desk, was sentenced today in Manhattan federal court to nine months in prison for fraudulently amassing and concealing an approximately $8.3 billion trading position in an account that TAYLOR managed at Goldman Sachs. TAYLOR pled guilty in April 2013 to one count of wire fraud in connection with the scheme, and was sentenced by U.S. District Judge William H. Pauley III.
According to the Information to which TAYLOR pled guilty, and statements made in court proceedings:
While employed at Goldman Sachs as a vice president, TAYLOR was a member of the CSFT desk and was responsible for a trading account called the CSFT Equity Volatility Portfolio (the “Trading Account”), which included trading in equity derivatives products. Among the products that TAYLOR traded on the CSFT desk were Standard & Poor’s E-mini futures contracts (“S&P E-mini futures”), which are futures contracts tied to the S&P 500 stock index. TAYLOR traded in S&P E-mini futures using an electronic trading platform called “Globex.”
In November 2007, TAYLOR had lost a significant portion of the profits that he had accumulated in the Trading Account earlier that year. As a result, he was instructed by his supervisors to reduce the overall risk in the Trading Account. These supervisors had previously informed TAYLOR and other traders on the CSFT desk about risk limits for the CSFT desk and acceptable risk levels and trading limits.
Despite these instructions to reduce the risk in the Trading Account, on December 13, 2007, TAYLOR significantly increased the notional value of his long position in S&P E-mini futures by entering a series of electronic trades through Globex. In so doing, he amassed a position that far exceeded all trading and risk limits set by Goldman Sachs, not only for individual traders, but for the entire CSFT desk. TAYLOR increased the profitability of the Trading Account in order to restore his professional reputation within Goldman Sachs and to increase his performance-based compensation.
At the same time that TAYLOR increased his S&P E-mini futures position, he actively concealed this position from others at Goldman Sachs. He recorded multiple false entries for S&P E-mini futures trades that he never made in a manual trade entry system (the “Manual Trade Entry System”), which was typically intended to be used by traders for recording trades that – unlike S&P E-mini futures – could not be executed through the Globex electronic trading platform. TAYLOR recorded multiple false trading entries in the Manual Trade Entry System that were in the opposite direction of the electronic trades he made in the Trading Account. Where TAYLOR purchased S&P E-mini futures in the Trading Account via Globex, he then manually entered fictitious S&P E-mini futures sales in the Manual Trade Entry System. The purpose of entering these fabricated trades was to conceal and understate the true size of the S&P E-mini futures position within the Trading Account, as the fictitious sales functioned to offset portions of TAYLOR’s actual purchases.
In addition, at the end of the trading day on December 13, 2007, TAYLOR prepared a false profit and loss report for the Trading Account (the “December 13, 2007, P&L Report”) that served to conceal his actual oversized position and market risk. He then forwarded the December 13, 2007, P&L Report to his supervisors and others at Goldman Sachs. By the morning of December 14, 2007, however, various employees at Goldman Sachs had detected a significant discrepancy between TAYLOR’s actual position in the Trading Account and what TAYLOR had falsely reported in the December 13, 2007, P&L Report. In response to questioning from these employees, TAYLOR made various false statements about his position and risk in the Trading Account. His fraudulent scheme resulted in significant losses to Goldman Sachs.
In addition to his prison term, TAYLOR, 34, of West Palm Beach, Florida, was also sentenced to three years of supervised release and ordered to pay $118 million in restitution.
The United States Attorney’s Office for the Southern District of New York first learned of the Taylor matter on November 10, 2012. Less than five months later, on April 3, 2013, Taylor was charged in an Information and pled guilty.
Mr. Bharara praised the investigative work of the Federal Bureau of Investigation. He also thanked the U.S. Commodity Futures Trading Commission. This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force, on which Mr. Bharara serves as a Co-Chair of the Securities and Commodities Fraud Working Group. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.stopfraud.gov.
The case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorney Steve Lee is in charge of the prosecution.
Former Chief of Remington, Virginia Fire Department Sentenced for Fraud, EmbezzlementRead the Press Release
ALEXANDRIA, Va. – Douglas G. “Bo” Taylor, age 52, of Remington, Va., the former Chief of the Remington Volunteer Fire & Rescue Department (“RVFD”), was sentenced today to 24 months incarceration, to be followed by a term of 3 years of supervised release by U.S. District Judge Leonie M. Brinkema in the Eastern District of Virginia for his role in a wire fraud scheme that defrauded the RVFD and the Prince William County School System and the filing of false individual income tax returns. Taylor was also ordered to pay restitution of $70,833 to the Remington Fire Department, $59,419 to the Prince William County Schools, and $79,576 to the Internal Revenue Service.
Dana J. Boente, Acting United States Attorney for the Eastern District of Virginia; Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office; and Thomas J. Kelly, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Section, Washington, D.C. Field Office made the announcement today after the sentencing.
According to court records, Taylor served as the Chief of the RVFD from 1994 through 2011, during a time when the RVFD fire station underwent major renovations and reconstruction with funding, in significant part, from the U.S. Department of Agriculture. Taylor, a licensed Master Electrician, offered to do some of the renovations at the fire station and only seek reimbursement for his out of pocket expenses. Taylor then submitted false invoices which contained charges for materials Taylor did not purchase and charges for labor that, at times, was never performed or was inflated from the hours that were actually performed. Taylor also used a Prince William County Public Schools System (“PWCS”) credit card to purchase some of the materials used at the fire station project (and elsewhere). In total, Taylor defrauded the RVFD of more than $80,000 and the PWCS of approximately $60,000. Finally, Taylor did not disclose the money he fraudulently obtained from the RVFD and winnings from the Virginia lottery on two individual income tax returns filed with the IRS.
This case was investigated by the Federal Bureau of Investigation’s Washington Field Office and the Internal Revenue Service, Criminal Investigation. Assistant United States Attorney Mark D. Lytle is prosecuting the case on behalf of the United States. The Office of the U.S. Attorney thanks the following agencies for their assistance in the investigation and prosecution of this matter: United States Department of Agriculture; United States Department of Education, Office of Inspector General; and the Prince William County School System.
Any person who believes they may have information regarding public corruption in the Northern Virginia area is encouraged to call the FBI’s Northern Virginia Public Corruption Hotline at 703-686-6225.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.Former AAU Coach Pleads Guilty to Wire FraudRead the Press Release
LYNCHBURG, VIRGINIA – A former AAU coach and mentor to a local college basketball star pled guilty earlier this week in the United States District Court for the Western District of Virginia in Lynchburg to a wire fraud charges.
Thomas Patric Boggs, 60, of Brookneal, Va., pled guilty on Tuesday to one count of wire fraud. At sentencing, he faces a maximum possible penalty of up to 20 years in prison and/or a fine of up to $250,000.
“Mr. Boggs exploited the trust placed in him by Travis Watson and turned it into a vehicle for fraud,” United States Attorney Timothy J. Heaphy said today. “This defendant stole hundreds of thousands of dollars from a man who considered him a father figure and caused harm that extends well beyond the victim’s financial loss.”
Boggs admitted Tuesday in U.S. District Court that he met Travis Watson when Watson was a freshman in high school in Texas. During a trip to Lynchburg, Va. to play in an AAU tournament, Watson met the defendant, who welcomed Watson into his home. The two soon became close and through Boggs’ efforts, Watson was able to attend Oak Hill Academy where he continued to develop his basketball skills. Watson considered Boggs a mentor, coach and father figure.
Following high school, Watson attended and played basketball at the University of Virginia before playing professionally in Greece, Italy, Lithuania and other places in Europe.
The Government’s evidence established, and Boggs admitted, that during Watson’s time overseas, Boggs approached him and offered to invest a portion of Watson’s earnings to ensure financial security post-basketball. Boggs knew that due to the close personal nature of their relationship, Watson would trust him to invest his money wisely. Boggs instructed Watson how to wire money into a pair of accounts, and that Watson expected Boggs to invest that money for Watson’s benefit.
Between 2009 and 2011, Watson wired $357,965 to the accounts controlled by Boggs, who admitted that he used nearly all of the money sent by Watson to pay the personal expenses of Boggs and to pay family members. In addition, throughout the process, Boggs assured Watson that he was making sound investments and that he was going to make Watson a “millionaire.”
The investigation of the case was conducted by the Federal Bureau of Investigation. Assistant United States Attorneys Anthony Giorno and Laura Rottenborn prosecuted the case for the United States.
Fishing Boat Captain Pleads Guilty and Is Fined for Attempted Sale of Shark FinsRead the Press Release
HONOLULU – Matthew Brian Case, age 46, a fishing boat captain formerly based in Hawaii, pled guilty on December 6, 2013 in federal court for attempting to sell shark fins to a Honolulu restaurant, a violation of the federal Lacey Act. Case entered the plea before United States Magistrate Judge Kevin S.C. Chang, who sentenced him to a $100 fine.
Florence T. Nakakuni, United States Attorney for the District of Hawaii, said it is a violation of federal law to sell, or attempt to sell, shark fins, if a person knows that the fins were removed from the bodies of sharks at sea, and then possessed aboard a fishing vessel. According to information produced in court, Case was the captain of the “Hokuao,” a long-line fishing vessel which operated out of Honolulu. During a month-long fishing trip that began in February 2013, Case instructed his crew to engage in “shark finning,” which involved catching sharks, removing their fins aboard the vessel, and disposing of the carcasses in the ocean. Case concealed approximately 100 shark fins in a hidden compartment in the vessel, and transported them back to Honolulu.
During court proceedings, Case admitted trying to sell the shark fins to a restaurant in the Ala Moana area on March 8, 2013. According to Nakakuni, Case thought the fins could be sold for approximately $600, but the restaurant declined to buy the illegal fins. Case, who now lives in Mexico, voluntarily appeared in Honolulu to answer the criminal charge. During arguments presented to the court, the government recommended a $100 fine, based on various factors, including Case’s immediate and continued cooperation with authorities, lack of profit, and willingness to return from Mexico to enter the plea.
United States Attorney Nakakuni said that “shark finning” is prohibited not only by the Lacey Act, but also by the Federal Shark Conservation Act of 2010. That act prohibits persons subject to the jurisdiction of the United States to remove fins from sharks at sea, to possess such unattached fins in their vessels, and then bring the fins to land.
The prosecution resulted from an investigation conducted by the National Oceanic & Atmospheric Administration, Office of Law Enforcement, with assistance from the Coast Guard, Immigration and Customs Enforcement -- Homeland Security Investigations, and the State of Hawaii Department of Conservation and Resources Enforcement. The prosecution was handled by Assistant U.S. Attorney Thomas Brady.
Federal Agent Pleads Guilty to $800,000 Mortgage FraudRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a special agent for U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI) pleaded guilty in federal court today to making false statements to FBI agents in regard to a more than $800,000 mortgage fraud scheme.
Jeffrey Morriss, 48, of Kansas City, Mo., pleaded guilty before U.S. District Judge Howard F. Sachs to the charge contained in a Feb. 5, 2013, federal indictment. Morriss was employed as a special agent for ICE HSI since 1997.
Morriss submitted four separate home loan applications for three houses between August 10, 2007, and March 6, 2012. Morriss admitted that he made at least 12 material misrepresentations and omissions to obtain $811,917 in home loans. Morriss failed to make full payments on these loans, resulting in three defaults and foreclosures.
Morriss admitted that, on each loan application, he omitted the full amount of his debt, and on other occasions he provided other inaccurate and false information, which improved his debt-to-income ratio and assisted him to qualify for the loans. Morriss did not disclose debt for property he purchased in Colorado, did not disclose monthly child support liability and did not disclose that his property in Pleasant Hill, Mo., had been foreclosed. On a $161,150 loan application for residential property in Kansas City, Morriss falsely inflated his monthly income by about $2,600.
Morriss lied to FBI agents during an interview about the loan applications that was held on Nov. 18, 2012.
Under the terms of today’s plea agreement if it is accepted by the court at his sentencing hearing, Morriss will be sentenced to three years of probation and pay $12,794 in restitution. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Daniel M. Nelson. It was investigated by the FBI and HUD-Office of Inspector General.
Dunkirk Man Sentenced for Filing Tax Returns for more than 120 Dead PeopleRead the Press Release
BUFFALO, N.Y.--U.S. Attorney William J. Hochul, Jr. announced today that John M. Berry, Jr., 42, of Dunkirk, N.Y., who was convicted of making a false claim against the United States, was sentenced to 41 months in prison by U.S. District Court Judge Richard J. Arcara. The defendant was also ordered to pay restitution in the amount of $92,462.12 to the Internal Revenue Service.
Assistant U.S. Attorney Aaron J. Mango, who handled the case, stated that between September 3, 2008 and March 25, 2009, the defendant filed 122 false income tax returns for the tax years 2007 and 2008 with the Internal Revenue Service. During that time, Berry obtained the personal and identifying information for 122 recently deceased individuals and then used that information to file federal tax returns on behalf of the deceased. The defendant created fraudulent income and withholding information for the deceased and filed the returns electronically.
The 122 tax returns sought refunds totaling $217,520 from the Internal Revenue Service, of which the defendant received $92,462.12. The refunds were deposited directly into Berry’s bank account.
“Identity theft is something that our Office, working with our law enforcement partners, takes very seriously,” said U.S. Attorney Hochul. “The defendant in this case not only stole the identities of recently deceased individuals which may have caused further grief to their loved ones, but he also cheated the taxpayers of this country. Such behavior will not be tolerated.”
The sentencing is the culmination of an investigation on the part of Special Agents of the Internal Revenue Service - Criminal Investigations, under the direction of Toni M. Weirauch, Special Agent in Charge.
Colorado Man Indicted for Conspiracy to Distribute Marijuana and Distribution of MethamphetamineRead the Press Release
United States Attorney Brendan V. Johnson announced that a Colorado man has been indicted by a federal grand jury for Conspiracy to Distribute a Controlled Substance and Distribution of a Controlled Substance.
Christopher Luke, age 28, was indicted on November 19, 2013. He appeared before U.S. Magistrate Judge Veronica Duffy on December 2, 2013, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 20 years in custody and/or a $1,000,000 fine, 3 years of supervised release, and $100 to the Federal Crime Victims Fund.
Beginning no later than the summer of 2012, Luke conspired with others to distribute methamphetamine in the District of South Dakota.
The charge is merely an accusation and Luke is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Unified Narcotic Enforcement Team and the Drug Enforcement Administration. Assistant U.S. Attorney Ted L. McBride is prosecuting the case.
Luke was remanded to the custody of the U.S. Marshals Service pending trial. A trial date has not been set yet.
Church Youth Leader Sentenced for Sexual Exploitation of ChildrenRead the Press Release
Project Safe Childhood
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that an Ava, Mo., man who volunteered as a church youth leader was sentenced in federal court today for enticing minors for illegal sexual activity.
Brent “Pete” Turley, 23, of Ava, was sentenced by U.S. District Judge Gary Fenner to 10 years in federal prison without parole.
On July 23, 2013, Turley pleaded guilty to using the Internet and a cell phone to attempt to entice a 14-year-old child victim to engage in illegal sexual activity. Turley, a youth leader at the church his victim attended, had been sending sexually explicit text messages. A law enforcement officer was using the child victim’s phone to investigate after the parents contacted authorities. Turley made arrangements with the undercover officer to meet the child victim at a local park, where he was arrested on March 19, 2012. Condoms were located in Turley’s pocket and a firearm was found in his truck.
Turley also pleaded guilty to a separate count of using the Internet and a cell phone to entice a second child victim to engage in illegal sexual activity. Turley admitted that he engaged in illicit sexual activity with a 15-year-old victim. Turley used Facebook text messages to arrange a meeting with the child victim at a softball field in Mansfield, Mo. During the meeting, which occurred in February 2012, the child victim performed oral sex upon Turley in his vehicle. The child victim was later interviewed at the Child Advocacy Center and confirmed Turley’s admission.
According to court documents, Turley also admitted to law enforcement officers that he took a third child victim, whom he believed to be as young as 12 years old (but who was actually 14 years old) to see the “Yogi Bear” movie at a theater in Mountain Grove, Mo., in late 2010 or early 2011. During the movie, Turley digitally penetrated the child’s vagina. The victim was later interviewed and confirmed the illicit sexual conduct.
This case was prosecuted by Assistant U.S. Attorney James J. Kelleher. It was investigated by the Southwest Missouri Cybercrimes Task Force and the Missouri State Highway Patrol.
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."Cancer Researcher Sentenced to 18 Months in Prison for Tax EvasionRead the Press Release
A southwest Washington cancer researcher was sentenced today in U.S. District Court in Tacoma to 18 months in prison, three years of supervised release and $376,679 in restitution for tax evasion, announced U.S. Attorney Jenny A. Durkan. PETER D. URREA, 74, of Washougal, Washington made a variety of phony documents to avoid paying $376,679 he owed in income taxes for years 2005-2009. At sentencing U.S. District Judge Ronald B. Leighton said, “this crime is unique because of its depth, and the tenacity and persistence” involved.
“Instead of devoting all his energies to his cancer research, this defendant schemed to avoid paying his fair share of taxes – the very income that the government uses to fund trials and approval processes for the drugs he works to develop,” said U.S. Attorney Jenny A. Durkan. “No one enjoys paying taxes, but it is an obligation we all share to keep our country strong and our safety nets in place.”
According to records filed in the case, URREA began his scheme in 2004 by creating and filing W-2C forms on behalf of his employer Taiho Pharma USA. These forms he created and filed, falsely indicated that Taiho Pharma paid him less than half his actual salary. URREA created other forms to indicate some of the funds were paid to a company he controlled – then URREA falsified the business expenses associated with the company to reduce his tax obligation. URREA engaged in this scheme for four years, from 2004-2008. Because URREA failed to file all of the documents required when a company amends a W-2 form, the IRS started looking into the filings in 2009. Taiho Pharma questioned why URREA was filing a W-2C, since those forms are only to be filed by the employer. URREA attempted to blame a different employee at Taiho Pharma, claiming he had been acting on that person’s advice. When the IRS asked for records related to expenses in tax years 2004-2008, URREA created a letter from a fictitious Vice President at Taiho Pharma indicating URREA would be responsible for all his research expenses – the company confirmed no such person ever worked there.
“Those who engage in dishonesty and deceit to cheat the tax system will be held accountable”, said Tamera Cantu, Assistant Special Agent in Charge of IRS Criminal Investigation in Seattle.
URREA pleaded guilty to an information charging tax evasion in July 2013.
The case was investigated by the Internal Revenue Service Criminal Investigation (IRS-CI) and was prosecuted by Assistant United States Attorney Arlen Storm.
Brothers from Thoreau Plead Guilty Fedral Assault ChargesRead the Press Release
ALBUQUERQUE – Two members of the Navajo Nation who reside in Thoreau, N.M., have entered guilty pleas to federal assault charges under plea agreements with the U.S. Attorney’s Office. Aldo Jones, 30, entered his guilty plea on Dec. 4, 2013, and his brother Eddie Jones, Jr., III, 23, entered his guilty plea yesterday afternoon.
Aldo and Eddie Jones were arrested in early Aug. 2013, based on a criminal complaint charging them with assault charges arising out of an attack on a 21-year-old Navajo man in Crownpoint, N.M., on July 28, 2013. According to court filings, Aldo and Eddie Jones assaulted the victim for failing to pay a $50 debt. Aldo repeatedly stabbed the victim in the head, upper back and right hand with a screwdriver, and both he and Eddie pummeled the victim with their fists. The victim sustained a life-threatening injury to his head where his skull was punctured. He also sustained stab wounds to his upper back and right hand and a broken nose.
Aldo and Eddie Jones subsequently were charged in a four-count indictment with assault resulting in serious bodily injury and assault with a dangerous weapon arising from the assault on the 21-year-old victim. Aldo Jones also was charged with two assault charges arising out of an attack on a second victim on July 28, 2013, in Littlewater, N.M.
On Dec. 4, 2013, Aldo Jones pled guilty to two assault charges and admitted assaulting the two victims on July 28, 2013. He admitted assaulting the first victim at approximately 5:00 p.m. by stabbing him with a screwdriver. Aldo Jones also admitted stabbing the second victim with a knife approximately two hours later when the second victim confronted him about stabbing his cousin, the first victim. At sentencing, Aldo Jones faces a maximum penalty of ten years in prison on each assault charge. He remains in custody pending his sentencing hearing, which has yet to be scheduled.
During yesterday’s proceedings, Eddie Jones entered a guilty plea to assaulting the first victim. In his plea agreement, Eddie Jones admitted beating the victim who also was stabbed by Aldo Jones. At sentencing, Eddie Jones faces a maximum penalty of ten years in prison for each assault charge. He remains in custody pending his sentencing hearing, which has yet to be scheduled.
The case was investigated by the Crownpoint office of the Navajo Nation Division of Public Safety and is being prosecuted by Assistant U.S. Attorney Paul H. Spiers.Batesland Man Sentenced for Conspiracy to Distribute MarijuanaRead the Press Release
United States Attorney Brendan V. Johnson announced that a Batesland, South Dakota, man convicted of Conspiracy to Distribute a Controlled Substance was sentenced on December 2, 2013, by U.S. Chief Judge Jeffery L. Viken.
Richard Marshall, age 46, was sentenced to 60 months in custody, 4 years of supervised release, and a $100 special assessment to the Federal Crime Victims Fund.
Marshall was indicted for Conspiracy to Distribute a Controlled Substance by a federal grand jury on May 15, 2012. He pled guilty on August 23, 2013.
Beginning no later than 2010 until May 15, 2012, Marshall received and stored marijuana, in excess of 100 kilograms, from Abraham Romero and then engaged in further distribution within the District of South Dakota. Marshall was acting as an organizer or leader in this drug conspiracy. Romero was previously sentenced to 120 months in custody.
This case was investigated by the Northern Plains Safe Trails Drug Enforcement Task Force, the Federal Bureau of Investigation, the Bureau of Indian Affairs Office of Justice Services, and the South Dakota Division of Criminal Investigation. Assistant U.S. Attorney Ted L. McBride and Special Assistant U.S. Attorney Laura A. Shattuck prosecuted the case.
Marshall was immediately turned over to the custody of the U.S. Marshals Service.
10th Street Member Sentenced on Drug ChargesRead the Press Release
BUFFALO, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that Ben Medina, 25, of Buffalo, N.Y., who was convicted of conspiracy to possession with intent to distribute crack cocaine, cocaine and marijuana, was sentenced to 46 months in prison by U.S. District Judge Richard J. Arcara.
Assistant U.S. Attorney Joseph M. Tripi, who handled the case, stated that the defendant was a member of the 10th Street Gang. Between 2004 and July 2010, Medina along with other members and associates of the 10th Street Gang distributed illegal narcotics, including crack cocaine, cocaine and marijuana, on the West Side of Buffalo.
To date 26 members and associates of the 10th Street Gang have been convicted in connection with the investigation which began in 2009.
The sentencing is the culmination of an investigation on the part of Investigators of the New York State Police, under the direction of Major Michael Cerretto, the Buffalo Police Department, under the direction of Commission Daniel Derenda, and Special Agents of the Federal Bureau of Investigation, under the direction of Special Agent in Charge Brian P. Boetig.
Thursday 5 December 2013
“Investment Advisory Firm” Owner Convicted of FraudRead the Press Release
GALVESTON – Kimberly Fontenot, a Brazoria County resident, has been convicted of defrauding clients of her so-called investment advisory firm, Stellar Grants Inc., announced United States Attorney Kenneth Magidson.
As outlined in documents filed with the court and admitted by Fontenot during her guilty plea today, from at least January through December 2012, Fontenot lured potential clients by falsely claiming to know numerous wealthy investors located throughout the United States. She offered access to these wealthy investors, whom she called her “angel investors,” to potential Stellar Grants clients in exchange for money. Specifically, Fontenot misrepresented that in exchange for money, she could put Stellar Grants clients in contact with the “angel investors” and would help them seek investments from the angel investors.
In addition to claiming personal and business relationships with them, Fontenot used the web-based email services Yahoo.com and Gmail.com to create fake email accounts in the names of the investors. She used these accounts to send emails to Stellar Grants clients, making it seem as if the emails were coming to and from the “angel investors” when, in reality, they were coming from Fontenot.Fontenot also hired a voice actor to impersonate the “angel investors” or their representatives during telephone calls with Stellar Grants clients. She also instructed the actor how to act and what to say during the calls. Fontenot then held fake conference calls in which she pretended to represent the Stellar Grants client and the voice actor pretended to be the angel investor or a representative of the angel investor, all in an attempt to justify the consulting fees paid by the Stellar Grants clients.
To avoid detection, Fontenot arranged for Stellar Grants clients or their representatives to sign “Master Consulting Agreements.” These agreements included a penalty clause which imposed heavy financial penalties if the clients contacted any of the angel investors.
U.S. District Judge Gregg Costa accepted Fontenot’s plea and has set sentencing for Feb. 24, 2013. At that time, she faces a maximum penalty of 20 years in federal prison and a $250,000 maximum fine or twice the pecuniary gain or loss. She was permitted to remain on bond pending that hearing.
The case is being investigated by the FBI and prosecuted by Assistant U.S. Attorney John Pearson.
Wyoming Woman Sentenced for Negligent Homicide by VehicleRead the Press Release
U.S. Attorney for the District of Wyoming Christopher A. Crofts announced that on December 4, 2013, Robin Neubauer, a 29 year old tribal descendant, was sentenced for negligent homicide by vehicle in connection with an incident on August 10, 2012 in which she struck and killed Rex Coando, a 61 year old member of the Eastern Shoshone Tribe. Ms. Neubauer was sentenced by United States Magistrate Judge Teresa McKee to one year supervised probation with three months home confinement; work release; $2,866.00 restitution; a $2,000.00 fine and a $25.00 special assessment. This case was investigated by the Federal Bureau of Investigation.
Wyoming Pill Dealer with $570,000 in Illegal Drug Proceeds Sentenced to 7 Years in Federal PrisonRead the Press Release
Police seized hundreds of thousands in cash, firearms and pills during investigation
BECKLEY, W.Va. – A 55-year-old Wyoming County pill dealer who had hundreds of thousands in cash, illegal prescription pain pills and two firearms hidden at his residences was sentenced yesterday to seven years in prison on a federal drug charge, announced U.S. Attorney Booth Goodwin. Delbert Lester, of McGraws, Wyoming Co., W.Va., previously pleaded guilty in August to possession of oxycodone with intent to distribute. Lester’s sentence was handed down by United States District Judge Irene C. Berger in Beckley.
From January 11, 2011 through May 4, 2013, Lester illegally sold prescription pills to a confidential informant working in cooperation with law enforcement authorities on eight separate occasions. Lester, who maintained two residences in McGraws, lived at one residence and ran his illegal pill business out of the other.
On May 9, 2013, law enforcement agents executed search warrants on Lester’s two residences. During the searches, agents recovered 190 30-milligram oxycodone pills and 155 10-milligram oxycodone pills.
Agents also recovered a total of $570,000 in cash and several firearms including two loaded .22 caliber semi-automatic pistols.
According to his plea agreement, Lester will forfeit the $570,000 in illegal drug proceeds that was seized from his residence.
The investigation was conducted by the Wyoming County Sherriff’s Department, the West Virginia State Police, the Southern Regional Drug and Violent Crime Task Force, and the Internal Revenue Service. Assistant United States Attorney Haley Bunn handled the prosecution.
This case was prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers in communities across the Southern District.
Woman Pleads Guilty to Tax ConspiracyRead the Press Release
BUFFALO, N.Y. – U.S. Attorney William J. Hochul, Jr. announced today that Emma Mills, 38, of Buffalo, N.Y., pleaded guilty to conspiracy to file false claims with the Internal Revenue Service before U.S. District Court Judge Richard J. Arcara. The charge carries a maximum sentence of 10 years in prison, a $250,000 fine, or both.
Assistant U.S. Attorney Trini E. Ross, who is handling the case, stated that the defendant conspired with others to defraud the Internal Revenue Service by creating false and fictitious W-2 forms. The forms were created by obtaining identification information from other persons. The fabricated W-2’s were submitted to the IRS with false tax returns, on which undeserved refunds and tax credits were claimed.
As part of her plea agreement, the defendant agreed to pay $35,519.00 in restitution to the Internal Revenue Service, and $6,976.00 to the New York State Department of Taxation and Finance.
Sentencing is scheduled for April 14, 2014 before Judge Arcara.
The conviction is the result of an investigation on the part of Special Agents of the Internal Revenue Service, under the direction of Toni Weirauch, Special Agent in Charge.Wasilla Conspiracy Leader sentenced for Designer Drug Case which resulted in deathRead the Press Release
Anchorage, Alaska - U.S. Attorney Karen L. Loeffler announced today that the leader of a drug conspiracy involving seven defendants was sentenced to 16 years in federal prison.
Robin Gattis, 20, of Wasilla, Alaska, pled guilty in August 2013 to drug conspiracy, admitting that he imported approximately three kilograms of methylone between October 2011 and July 2012 and distributed it in Alaska. In a plea agreement filed with the court, Gattis admitted that he was the leader and organizer of the conspiracy, that he directly imported the drugs from China, and that he repeatedly wired money to China or directed others to do so in order to pay for drugs. He also admitted that he engaged in drug dealing as a livelihood, that he knowingly used persons under age 18 to assist in the crime, that he distributed the drugs to persons under 18, and that he distributed methylone to Matt Scott, who died of a methylone overdose in April 2012 in Anchorage.
The six other co- conspirators have previously pled guilty to federal drug charges stemming from a conspiracy to possess and distribute methylone. Two have been sentenced, and four are awaiting sentencing.
Chief U.S. District Court Judge Ralph R. Beistline imposed the sentence today in Anchorage, Alaska. Gattis has been in federal custody since his arrest on July 31, 2012.U.S. Attorney Loeffler warned Alaskans that “People taking these drugs have absolutely no idea what they are ingesting. They are not made in a laboratory with standards and oversight. They are made by criminals, and there is no way to tell what is in the powder you’re putting in your body. A teenage party should not end with death and a grieving family. These club drugs are touted as safe, and they are not.”
“Designer drugs from China in the hands of young, enterprising drug dealers proved to be deadly in this case,” said Brad Bench, Special Agent in Charge of Homeland Security Investigations in Seattle, who oversees Alaska investigations. “International shipments are routinely inspected by U.S. Customs and Border Protection officers at sorting facilities around the country to detect illicit packages like the ones shipped to Gattis and his co-conspirators. HSI and its law enforcement partners are committed to pursuing those who use legitimate shipping channels to smuggle drugs into the U.S.”
“By the defendant’s own admission, he engaged in the trafficking of Methylone for a living and as a result a terrible and senseless tragedy has occurred,” said DEA Special Agent in Charge Matthew G. Barnes. “Synthetic drugs are insidious substances that are manufactured in clandestine laboratories and marketed to our youth all in the name of greed. We are grateful to our partners, Homeland Security Investigations, Anchorage Police Department, Alaska State Troopers, U.S. Postal Service and the United States Attorney’s Office for their persistence and dedication in obtaining justice.”
Methylone, a Schedule I controlled substance; also popularly known as “Molly,” “M1,” “MDMC,”and “rolls,” is a synthetic drug similar to ecstasy (“MDMA”), and is commonly imported from China via the internet for use in the U.S. particularly at clubs, parties and other social gatherings such as “raves.”
Ms. Loeffler commends Homeland Security Investigations, the Drug Enforcement Administration, the Anchorage Police Department, the United States Postal Inspection Service, and the Mat-Su Drug Unit for the investigation of this case.
Unilever Pleads Guilty to Violating Clean Water Act at Connecticut FacilityRead the Press Release
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Deirdre M. Daly, Acting United States Attorney for the District of Connecticut, Cynthia Giles, Assistant Administrator for EPA’s Office of Enforcement and Compliance Assurance, and Commissioner Daniel C. Esty of the Connecticut Department of Energy and Environmental Protection announced that CONOPCO, INC., doing business as UNILEVER HOME & PERSONAL CARE USA, (“Unilever”) waived its right to indictment and pleaded guilty today in Hartford federal court to two felony violations of the Clean Water Act. The charges stem from Unilever’s December 2008 illegal discharge of industrial wastewater at a manufacturing site in Clinton and the company’s failure to report the discharge in a timely manner. As part of its plea agreement, Unilever agreed to pay a $1 million fine. The company also intends to contribute $3.5 million to state and local environmental programs.
“The environmental integrity of Connecticut’s rivers and the Long Island Sound are of essential importance to our state,” said Acting U.S. Attorney Daly. “As this case demonstrates, our Office will vigorously prosecute companies whose actions threaten Connecticut’s natural resources. We recognize and thank the EPA for their invaluable work in this investigation. In addition, it is entirely appropriate that Unilever has agreed to redress their violations by contributing $2.5 million to fund research, outreach and education projects related to the effects of rising sea levels, $500,000 to construct a fishway in Clinton, and $500,000 to the Town of Clinton for other environmentally beneficial projects. The Company’s contributions will directly assist the State of Connecticut in its efforts to protect and preserve our environment.”
“America’s communities deserve clean water, free from containments in illegal wastewater discharges,” said Cynthia Giles, Assistant Administrator for EPA’s Office of Enforcement and Compliance Assurance. “Protecting these communities means holding violators accountable, both for illegal discharges and for failure to report them.”
“This case sends the clear message that those who flaunt environmental laws designed to protect public health and natural resources will pay a price,” said DEEP Commissioner Esty. “A portion of the funds will be directed to environmentally beneficial projects in the town of Clinton, the place where the violations took place. The remaining dollars will be used to build on our efforts to increase the resiliency of coastal communities and interior floodplains – and their residents – so we are better prepared to face the more extreme and severe weather predicted for the future.”
According to court documents and statements made in court, Unilever’s Clinton manufacturing facility produced a variety of health and beauty products for sale in the United States. The wastewater produced by the plant was regulated by a permit that prohibited the company from bypassing any portion of its wastewater treatment system unless the bypass was unanticipated, unavoidable, and necessary to prevent loss of life, personal injury or severe property damage. The permit further required that Unilever notify authorities within two hours of becoming aware of any bypass, and submit a written report within five days setting forth the cause of the problem, the duration of the event including dates and times, and corrective actions taken or planned to prevent future occurrences.
On December 5, 2008, at approximately 3:00 p.m., a third party contract employee noticed that a hose was being used to bypass the industrial process wastewater treatment system by allowing the contents of a 4,500 gallon vacuum filter filtrate tank to discharge directly to a storm drain pipe that led to Hayden Creek. Upon making this discovery, the contract employee alerted the junior wastewater treatment operator for the Clinton facility and showed him the hose and ongoing wastewater bypass. These two individuals then shut off the hose at approximately 3:10 p.m.
At 3:30 p.m., the contract employee notified his non-Unilever supervisor about his observations, and was urged to notify the Safety, Health and Environmental (SHE) manager of the Clinton facility. The SHE manager received a call from the contract employee between 3:30 and 3:45 p.m. After asking the contract employee to send her an email describing his observations, the SHE manager went to the waste treatment area between 3:45 and 4:00 p.m. and observed foamy water and signs of recent discharge at the inlet of the storm drain pipe. The SHE manager notified the plant manager, took pictures, and observed the downstream oil/water separator. Despite the requirement that the Connecticut Department of Energy and Environmental Protection (DEEP) be notified within two hours of the detection of such a bypass, Unilever chose not notify the DEEP within this two-hour window.
On December 6, 2008, the SHE manager referred the matter to counsel for Unilever for further investigation and notification of DEEP. The next day, in response to the SHE manager’s request, the contract employee sent the SHE manager an email detailing his observations of the bypass and stating “[t]his is not the first time I’ve seen this done at your facility, I’ve seen this on two previous occasions. At that time, however, I was still trying to learn the system as quickly as possible and didn’t understand the significance of what I was viewing.” In the email, the contract employee opined that the senior operator had performed the intentional bypass and had “done this on several occasions, and perhaps more often than we care to know.”
On December 8, 2008, three days after being notified of the illegal discharge, the Unilever plant manager interviewed the two wastewater treatment operators and the contract employee who had initially discovered the bypass. All three individuals denied any responsibility for the bypass and indicated that they did not know who was responsible, although the contract employee again stated that he believed that the senior operator was responsible. From these interviews, the plant manager did not determine who was responsible for the bypass or confirm whether any prior bypasses had occurred. Later that day, the plant manager sent an email to his superior within the organization indicating that “we had somebody by pass [sic] the waste treatment process and put water into the storm water system . . .working with legal on how to handle the DEP [sic], if at all.”
On December 8, a DEEP compliance inspector was on-site at the Clinton facility for an unrelated reason. Unilever again failed to notify the on-site DEEP representative of the bypass that had occurred. On approximately December 10, Unilever notified the DEEP for the first time of the discharge that occurred five days earlier on December 5. This written notification occurred within the required five-day time period for the mandatory written report. Unilever also disclosed the discharge to the U.S. Environmental Protection Agency (EPA) in a written submission dated December 16, 2008.
Unilever conducted its own internal investigation of the December 2008 incident. In subsequent conversations and written communications with federal and state authorities throughout 2009 and 2010, Unilever claimed it was unable to conclusively determine who was responsible for the bypass, and mischaracterized the incident as an isolated, “one-off” incident that may have been the work of unknown “vandals.”
An extensive EPA investigation revealed the truth about what had happened. The junior operator admitted to the EPA that he intentionally bypassed the system on December 5. EPA further concluded that for an extended period of time, perhaps as long as two years prior to December 2008, the wastewater treatment operators routinely bypassed the system on a weekly basis, discharging approximately 1,500 gallons of partially treated wastewater at a time to the storm drain that led to Hayden Creek. EPA’s investigation established that these bypasses were concealed from and unknown to Unilever management, including the SHE manager and the plant manager. Unilever’s management was aware, however, both that the operators were not properly overseeing the wastewater treatment system and that the system was not properly functioning:
- The strength, flow, and variability of the facility’s wastewater made it difficult to treat. System upsets and capacity limitations often necessitated that wastewater be trucked off-site for treatment at a cost of approximately $1500 per truckload. The treatment system operators had authority to call for trucking if needed for wastewater treatment.
- Portions of the treatment system were old and in need of repair and maintenance. Equipment replacements and system improvements recommended by outside consultants were not fully implemented, although some corrective measures were completed.
- The treatment system required constant operator attention and adjustment. Nevertheless, during 2008, the senior operator was often absent. The junior operator did not possess the required license or training to qualify him to operate the system independently for extended periods of time without supervision, yet he was allowed by Unilever to do so.
- Although the waste treatment operators were licensed by the State of Connecticut and subject to applicable permit requirements, they required oversight to properly operate the plant. That oversight was inconsistent and the operators were allowed to act autonomously.
In December 2012, Unilever ceased manufacturing operations at the Clinton facility.
Unilever pleaded guilty to two counts of knowingly violating, or causing to be violated, the Clean Water Act. Each of these counts carries a maximum term of probation of five years and a fine of up to $500,000. U.S. District Judge Robert N. Chatigny scheduled sentencing for March 3, 2014.
Under the terms of a binding plea agreement, if accepted by the court, Unilever will be placed on probation for three years and pay a fine of $1 million. At the time of sentencing, Unilever intends to bring to the court’s attention that it made a $3.5 million payment to the Connecticut Statewide Supplemental Environmental Project Account (SEP) administered by DEEP. Of that money, $2.5 million will be used to fund the Connecticut Resiliency and Climate Adaptation Center, which will conduct research, outreach and education projects related to the effects of rising sea levels. In addition, $500,000 will be used to design and construct a fishway at the Chapman Mill Pond in Clinton, and $500,000 will be used to fund environmentally beneficial projects proposed by the Town of Clinton, including the acquisition of open space.
Unilever also has agreed to periodic environmental compliance inspections by an outside auditor at all of its manufacturing locations in the U.S, and to certify, within one year of sentencing, that all of its employees at these facilities who perform or manage work subject to environmental compliance requirements have received basic environmental compliance training. In addition, all Unilever employees who are responsible for advising these facilities with respect to mandatory notifications to be made to state and federal environmental agencies must complete additional training to ensure they understand the legal notification requirements under applicable environmental laws.
This matter has been investigated by the U.S. Environmental Protection Agency and the Connecticut Department of Energy and Environmental Protection. The case is being prosecuted by Assistant U.S. Attorney Ray Miller and Special Assistant U.S. Attorney Peter Kenyon.
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[email protected]Two V-not Gang Members Sentenced to Prison TermsRead the Press Release
Kenneth Jackson - 92 Month Sentence. Donald Johnson - 108 Month Sentence
RICHARD S. HARTUNIAN, United States Attorney, Northern District of New York, announces the sentencings of KENNETH JACKSON, age 29 and DONALD JOHNSON, Jr., age 26, both of whom are admitted members of the V-NOT Gang. Both JACKSON and JOHNSON previously pled guilty to an indictment which charged them and nine others with conspiring to exploit their membership in the V-NOT Gang to engage in a pattern of racketeering activity which included acts of murder, drug trafficking, and robbery. JACKSON was sentenced yesterday to 92 months in prison and JOHNSON was sentenced today to 108 months in prison.
The Indictment to which JACKSON and JOHNSON pled alleges that from at least 2003 through May 2012 members of the V-Not Gang: (1) maintained a specific geographic territory within the City of Syracuse in which only gang members can sell crack cocaine and marijuana; (2) protected that exclusive crack distribution territory with violence; (3) obtained drugs from various suppliers; (4) projected a very violent attitude and responded to violence with violence in order to preserve their stature in the gang community; (5) used graffiti, hand signs, and tributes on their clothing to slain gang members to signify their gang membership; (6) used criteria such as a willingness to use violence, ability to sell drugs, and familial connections to determine membership; and (7) routinely carried and used firearms in connection with their gang activity.
There are multiple acts of violence and drug distribution set forth in the Indictment, including 1 murder, 10 other shootings, 8 other acts of gun possession, and 18 acts of crack distribution and/or possession with intent to distribute crack.
JACKSON, who was known on the street as KAROME, which meant "Killer Affiliated Ruler Over Many Enemies," admitted his involvement in many acts, including possessing crack cocaine and drug proceeds, participating in a gang fight at the Juke Box Bar along with multiple co-defendants, firing at least 22 shots from an AK-47 into the home of a rival gang member while in a car with multiple co-defendants, and shooting at a rival gang member. JOHNSON, admitted his involvement in multiple drug trafficking crimes. The indictment also alleged JOHNSON’s involvement in an act of gun possession and a shooting.
Multiple other V-NOT Gang members are set to be sentenced over the next month.
This prosecution resulted from a long-term investigation conducted by the Syracuse Gang Violence Task Force, which is comprised of agents and detectives from the following agencies: the Syracuse Police Department, the Onondaga County Sheriff's Department, the New York State Troopers, the United States Marshals Service and the United States Department of Justice, Bureau of Alcohol, Tobacco, and Firearms (Syracuse Office). The Onondaga County District Attorney’s Office also assisted in the investigation.
Further questions or inquiries may be directed to Assistant U.S. Attorney, John M. Katko, who is handling the case, at (315) 448-0672.
Two Mexican Nationals Sentenced for Drug TraffickingRead the Press Release
POCATELLO – U.S. Attorney Wendy J. Olson announced today that Josue Rodriguez-Sanchez, 25, of Idaho Falls, and co-defendant Fernando Garcia, 31, of Logan, Utah, were sentenced this week in United States District Court for violating federal drug laws.
Chief U.S. District Judge B. Lynn Winmill sentenced Rodriguez-Sanchez on Tuesday to 120 months in prison followed by five years of supervised release for conspiracy to distribute 50 grams or more of actual methamphetamine. He pleaded guilty to the charge on August 14, 2013.
U.S. District Judge Brian Ted Stewart of the District of Utah sentenced Garcia today to 10 months in prison for possession with intent to distribute a small amount of cocaine. He pleaded guilty on September 20.
According to plea agreements filed in the case, Rodriguez-Sanchez admitted that between November 29, 2010, and January 25, 2011, he distributed cocaine and methamphetamine in the Idaho Falls area. He further admitted that in total he distributed more than 50 grams of methamphetamine and that he received the narcotics from various co-defendants. Garcia admitted that on April 22, 2011, he arranged to sell and subsequently delivered cocaine to an individual in Idaho Falls, Idaho, for $1,150.
The remaining co-defendant, Julian Vega-Valdez, 25, a Mexican national, pleaded guilty on August 14 to distributing five grams or more of actual methamphetamine. According to the plea agreement, Vega-Valdez admitted that on January 10, 2011, he met with Rodriguez-Sanchez in Idaho Falls and provided him with more than five grams of methamphetamine for distribution to other individuals. Vega-Valdez is scheduled to be sentenced on January 13, 2014, before the Hon. N. Randy Smith, Circuit Judge for the U.S. Court of Appeals for the Ninth Circuit.
The charges are the result of an investigation by the Organized Crime Drug Enforcement Task Force (OCDETF), including the Idaho State Police, U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI), Bonneville County Sheriff's Office, Idaho Falls Police Department, Madison County Sheriff's Office, Rexburg Police Department, Bingham County Sheriff’s Office, Fremont County Sheriff’s Office, Federal Bureau of Investigation (FBI), Internal Revenue Service-Criminal Investigation, and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). Other federal agencies participating in the OCDETF program include the Drug Enforcement Administration and the U.S. Marshals Service.
The OCDETF program is a federal multi-agency, multi-jurisdictional task force that supplies supplemental federal funding to federal and state agencies involved in the identification, investigation, and prosecution of major drug trafficking organizations.
Two Co-Defendants from Idaho Falls Sentenced for Trafficking MethRead the Press Release
POCATELLO – Two members of an Eastern Idaho drug trafficking organization were sentenced in United States District Court this week, U.S. Attorney Wendy J. Olson announced. Three co-conspirators were sentenced in October 2013 to serve a combined total of over 46 years in federal prison.
Erica Rodriguez, 33, of Idaho Falls, Idaho, was sentenced on Monday to 92 months in prison followed by five years of supervised release for possession to with intent to distribute 50 grams or more of actual methamphetamine. Chief U.S. District Judge B. Lynn Winmill also ordered Rodriguez to pay a $750 fine. She pleaded guilty on August 13.
Marco Antonio Echeverria, 25, also of Idaho Falls, was sentenced today by U.S. District Judge Brian Ted Stewart to 97 months in prison for distributing methamphetamine. Echeverria was also ordered to serve five years of supervised release and pay a $1,000 fine. He pleaded guilty on August 29.
Co-defendant Fausto Urias, of Idaho Falls, was sentenced earlier to 35 years in prison for conspiracy to distribute 50 grams or more of actual methamphetamine. He was also ordered to forfeit $100,000 and pay a $5,000 fine. Urias’ lengthy prison sentence was the result of the court finding him responsible for a significant amount of methamphetamine; he was the leader/organizer of a criminal organization; he possessed guns in connection with the offense, and he used violence and threats of violence in carrying out the offense. Co-defendant Benito Joya, of Rigby Idaho, was sentenced to 121 months in prison for possession with intent to distribute 50 grams or more of actual methamphetamine. Co-defendant Misti Chapman, also of Idaho Falls, was sentenced to 21 months in prison for distribution of methamphetamine and violating a previously imposed term of supervised release.
The remaining defendant, Juan Carlos Garcia, 36, of Idaho Falls, will be sentenced on December 16 for conspiracy to distribute 50 grams or more of actual methamphetamine.
According to plea agreements filed in the case, between November 2009 and October 23, 2012, Urias and Garcia conspired to possess and distribute methamphetamine to other individuals in the Idaho Falls area. Garcia made arrangements with an individual to purchase methamphetamine and directed that person to a location in Idaho Falls, Idaho, where he met with Echeverria. According to the plea agreement, Echeverria told the individual that Garcia had asked him to handle the transaction; the following day Echeverria provided the individual with methamphetamine. In April 2012, during a traffic stop, Idaho State Police found more than 50 grams of actual methamphetamine Rodriguez was hiding on her person. According to the plea agreement, Rodriguez admitted she possessed the methamphetamine intending to distribute it to others.
The charges are the result of an investigation by the Organized Crime Drug Enforcement Task Force (OCDETF), including the Idaho State Police, U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI), Bonneville County Sheriff's Office, Idaho Falls Police Department, Madison County Sheriff's Office, Rexburg Police Department, Bingham County Sheriff’s Office, Fremont County Sheriff’s Office, Federal Bureau of Investigation (FBI), Internal Revenue Service-Criminal Investigation, and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). Other federal agencies participating in the OCDETF program include the Drug Enforcement Administration and the U.S. Marshals Service.
The OCDETF program is a federal multi-agency, multi-jurisdictional task force that supplies supplemental federal funding to federal and state agencies involved in the identification, investigation, and prosecution of major drug trafficking organizations.
Twenty-four Individuals Imprisoned, Twelve Others Face Deportation in Sweeping Investigation Targeting Armed Drug Dealers and Gang MembersRead the Press Release
PROVIDENCE, R.I. – A sweeping, more than two-year investigation into the trafficking of heroin by armed drug dealers in Providence and surrounding areas has resulted in the imprisonment of twenty-four individuals, the arrest and detention of twelve others who face deportation on alleged immigration violations, and the dismantling of the MS-13 Providence street gang.
The investigation, dubbed “Operation Gas,” was conducted by a task force comprised of federal agents from the FBI, DEA, Bureau of Alcohol, Tobacco, Firearms and Explosives, and Homeland Security Investigations, detectives and officers from the Rhode Island State Police, Providence Police, Cranston Police, Newport Police, Pawtucket Police and Woonsocket Police Departments, and prosecutors from the United States Attorney’s Office and the Rhode Island Department of Attorney General.
The investigation targeted the trafficking of heroin from the Dominican Republic and Guatemala to Rhode Island, and the distribution of that heroin by armed drug dealers in Providence and surrounding areas. The investigation led to the seizure of more than twenty-three kilograms of heroin, including the largest single seizure in Rhode Island, as well as the seizure of over 100 grams of cocaine, fifteen firearms, more than $400,000 in cash, and twelve vehicles. The drug trafficking investigation led to a subsequent investigation that targeted leaders, members and associates of the MS-13 Providence street gang who were involved in gang-on-gang violence, firearms sales and drug distribution.
The subsequent prosecution of those involved resulted in the conviction and imprisonment of twenty-four individuals, including the leaders and known members of the MS-13 Providence street gang on drugs, firearms, assault and arson charges, and of a convicted heroin trafficker who attempted to hire a person to murder his girlfriend.
In addition, twelve individuals identified as members and associates of the MS-13 Providence street gang and the SUR-13 street gang were detained by Homeland Security Investigations on alleged immigration violations. Many of the individuals have already been deported.
“Armed gang activity, and associated drug dealing, continues to plague Providence and other urban neighborhoods across our state,” said United States Attorney Peter F. Neronha. “History has taught us only too well: gangs and drug dealing inevitably lead to gun violence. To effectively combat this violence, we must continue to do more than simply wait for the shooting to stop and assess the carnage. Only a proactive approach, targeting the worst of the worst and bringing them to justice before the shooting starts, can lead to a safer Rhode Island.”
“This is an example where another team challenged ours and lost,” said Vincent Lisi, Special Agent in Charge of the FBI’s Boston Division which is responsible for Rhode Island. “Gang members who want to fill the vacuum left by these arrests should know the Safe Streets Task force will always win over those who chose a life of crime by holding responsible those who put illegal guns on our streets, deal heroin in our neighborhoods and commit other crimes in our cities.”
"DEA is committed to the dismantling of criminal organizations that bring drugs and violence into our neighborhoods", said John J. Arvanitis, Special Agent in Charge of the Drug Enforcement Administration’s New England Field Division. "Our commitment is unwavering and together with our federal, state and local law enforcement partners we will continue to target violent drug trafficking organizations operating throughout our communities."
“Cooperation among local, state and federal law enforcement agencies and prosecutors led to the successful disruption of the MS-13 gang in Providence. Targeting criminal activity by gangs and gang members before violence erupts is critical in bringing greater security to our urban communities,” said Attorney General Peter Kilmartin.
“As I have stated in the past, investigations like this are a message as to how we leverage our partnerships and combine our efforts to dismantle organized gang and drug activity. Operations like this are what makes the community safer and also sends a strong message to those involved in the gun, gang, and drug trade,” said Colonel Hugh Clements.
Among the defendants arrested, convicted and imprisoned as a result of “Operation Gas”
Jose Fernandez was arrested in April 20, 2011, following a lengthy investigation into his suspected heroin trafficking activities. In addition to numerous undercover purchases of heroin, law enforcement seized two kilograms of heroin discovered concealed inside car parts shipped from Guatemala to an auto dealership where Fernandez worked. During the investigation into Fernandez’s drug trafficking activities, law enforcement learned that Fernandez was attempting to hire a person to murder his girlfriend. Fernandez was convicted in federal court of attempted murder for hire as well as multiple heroin distribution charges. Fernandez is serving a sentence of 97 months in federal prison.
In the Fall of 2011, the FBI and DEA began investigating a Dominican drug trafficking organization that distributed heroin, and on occasion cocaine, to customers in Rhode Island and Massachusetts. According to information presented to the court, Jose Dume, Jr., was identified by law enforcement as the leader of this conspiracy. The investigation revealed that Dume purchased kilogram quantities of heroin from Ariel Hassel. It is estimated that over the course of the conspiracy, Dume purchased approximately 3 kilos of heroin, often in 500 to 600 gram increments, which he then sold to various customers throughout Rhode Island.
During the course of the investigation into Dume and Hassel’s drug trafficking and firearm trafficking activities, which included undercover drug and firearms purchases, the use of electronic monitoring and surveillance equipment, and the execution of court authorized search warrants and wiretaps, law enforcement seized four firearms, about 2.5 kilograms of heroin, over $400,000 in cash, jewelry valued at more than $60,000 and twelve vehicles from residences in Providence, Cranston, and West Warwick. The wiretap investigation led to the arrest and conviction of 14 individuals including Dume, Hassel, their partners and drug runners, as well as customers. Among those arrested was Vlady Tejada, a fugitive on federal drug charges out of the District of Massachusetts.
Dume and Hassel were arrested by federal agents on May 11, 2012. Dume pleaded guilty in October 2013, to federal conspiracy, heroin trafficking and firearm charges. He was sentenced on October 21, 2013, to 15 years in federal prison. Hassel pleaded guilty in July 2013 to heroin and cocaine trafficking charges. He was sentenced in July 2013 to 90 months in federal prison.In October 2012, the DEA arrested Jorge Daniel Estrada and Angel Feliz on charges of conspiracy to distribute 17 kilograms of heroin. In addition to seizing 17 kilos of heroin, police seized three vehicles. The arrests of Jose Fernandez, Jorge Estrada and Angel Feliz, prompted by information developed by Providence Police detectives, resulted in the seizure of a total of 19 kilograms of heroin valued at $4.5 million dollars, the largest single seizure of heroin in Rhode Island. Estrada and Feliz have been sentenced to 180 and 70 months in federal prison respectively.
In October 2012, Francisco Bonilla, the alleged leader of the MS-13 Providence street gang, was indicted by a Rhode Island state court grand jury on assault and weapons charges. He pleaded guilty in January 2013, and is currently serving a 10-year prison sentence at the ACI. Bonilla, a citizen of El Salvador, will face deportation proceedings upon completion of his prison term.
In October 2012, Richard Ibenez, a member of the MS-13 Providence street gang, was indicted by a Rhode Island state court grand jury on conspiracy and arson charges. He pleaded guilty in January 2013, and is currently serving an 8 year prison sentence at the ACI.
Defendants charged in the U.S. District Court were prosecuted by Assistant U.S. Attorneys Adi Goldstein, Paul F. Daly, Jr., Sandra R. Hebert, Milind M. Shah, and First Assistant U.S. Attorney Kenneth P. Madden. Defendants charged in Rhode Island state court were prosecuted by Assistant Attorney General James Baum.
Drug and firearms charges
3 years in federal prison to be followed by 5 years of supervised release
Heroin Trafficking
70 months in federal prison to be followed by 5 years supervised release
Faces deportation proceedings
MS-13 gang leader
Assault & firearms charges
20 years, 10 years to serve at ACI
10 years suspended w/probation
Heroin possession & distribution charges
5 years probation
Heroin and cocaine trafficking charges
90 months in federal prison to be followed by 5 years supervised release
Faces deportation proceedings
SUR-13 gang member
Firearm possession
Six months confinement to be followed by 5 years supervised release
Conspiracy
24 months in federal prison to be followed by 5 years supervised release
C-Block gang member
Conspiracy and firearm charges
51 months in federal prison to be followed by 3 years supervised release
Leader of heroin trafficking conspiracy
Heroin trafficking and firearm charges
15 years in federal prison to be followed by 5 years supervised release
Faces deportation proceedings
Conspiracy and heroin trafficking charges
15 years in federal prison followed by lifetime supervised release.
Immigration detainer lodged
Heroin trafficking charges
70 months in federal prison to be followed by 3 years supervised release
Heroin trafficking and murder for hire charges
97 months in federal prison to be followed by 5 years of supervised releasee
Drug source for MS-13 gang
Conspiracy and cocaine trafficking charges
71 months in federal prison to be followed by 5 years supervised release
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MS-13 gang member
Conspiracy and arson charges
20 years, 8 years to serve at ACI
12 years suspended w/probation
Convicted at trial in June 2013 on charges of trafficking heroin
Detained
Firearm charge
24 months in federal prison to be followed by 3 years supervised release
Heroin trafficking charges
80 months in federal prison to be followed by 5 years supervised release
Faces deportation proceedings
Maintaining a drug involved premises and fraud charges
30 months in federal prison followed by 3 years supervised release
Faces deportation proceedings
Heroin trafficking charges
90 months in federal prison followed by 5 years supervised release
Faces deportation proceedings
Firearms charges
60 months in federal prison to be followed by 3 years of supervised release
Firearm source for MS-13
Firearm charges
37 months in federal prison followed by 3 years supervised release
Cocaine conspiracy and distribution
70 months in federal prison followed by 5 years supervised release.
Heroin and cocaine trafficking charges
71 months in federal prison to be followed by 4 years supervised release
Faces deportation proceedings
Heroin and cocaine trafficking charges
80 months in federal prison followed by 5 years supervised releaseGuatemala
MS-13 gang member
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MS-13 gang member
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MS-13 gang member
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MS-13 gang member
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MS-13 gang member
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MS-13 gang associate
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MS-13 gang member
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MS-13 gang associate
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MS-13 gang member
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SUR-13 gang member
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MS-13 gang member
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MS-13 gang associateTo assist the media and the public, a glossary of federal judicial terms and procedures is available at http://www.justice.gov/usao/justice101/
Contact: 401-709-5357
[email protected]Torrington Man Sentenced to Five Years in Federal Prison for Bank Fraud, Violating Supervised ReleaseRead the Press Release
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Deirdre M. Daly, Acting United States Attorney for the District of Connecticut, today announced that STEVEN FINKLER, 49, of Torrington, was sentenced yesterday by U.S. District Judge Stefan R. Underhill in Bridgeport to 60 months of imprisonment, followed by five years of supervised release, for bank fraud, and for violating the conditions of his supervised release from a previous federal conviction.
According to court documents and statements made in court, on July 19, 2012, a fraudulent check from Fidelity Brokerage Services, LCC made payable to FINKLER in the amount of $10,000.46 was deposited into FINKLER’s bank account at Sovereign Bank in Torrington. Over the course of the next week, $9,828.83 was withdrawn from the account through check card transactions, ATM withdrawals, and cashed checks made payable to FINKLER’s wife.
In June and July 2012, FINKLER deposited five additional fraudulent checks totaling more than $29,000 into accounts he maintained. In each of these instances, the financial institution discovered the fraud and the check did not clear.
FINKLER has a criminal history that spans 30 years and includes numerous convictions, including four federal convictions stemming from various fraud schemes. In October 2005, he was sentenced in the Eastern District of New York to 92 months of imprisonment, followed by three years of supervised release, for engaging in three separate fraud schemes, two of which occurred while he was previously incarcerated. FINKLER was released from prison on September 15, 2010.
FINKLER has been detained since his arrest on July 26, 2012. On April 23, 2013, he pleaded guilty to one count of bank fraud and to violating the terms of his supervised release. Judge Underhill sentenced FINKLER to 36 months of imprisonment on the fraud conviction, and a consecutive 24-month prison term for the supervised release violation.
This matter was investigated by the Federal Bureau of Investigation and was prosecuted by Assistant U.S. Attorney Vanessa Richards.
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Tom Carson
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[email protected]Three Strikes Drug Dealer Sentenced to Mandatory Life ImprisonmentRead the Press Release
In El Paso this morning, United States District Judge Kathleen Cardone sentenced 46-year-old habitual drug trafficker Benito Martinez, Jr., (a.k.a. “Benny”) to three concurrent life imprisonment terms on federal drug trafficking charges announced United States Attorney Robert Pitman and Drug Enforcement Administration Special Agent In Charge Joseph Arabit.
In October, a federal jury convicted Martinez of conspiracy to possess with intent to distribute five kilograms or more of cocaine and two counts of aiding and abetting the possession with the intent to distribute five kilograms or more of cocaine. Evidence presented at trial revealed that Martinez had well-established relationships with individuals in the Republic of Mexico with direct ties to a Mexico-based drug cartel operating in and around Guadalajara, Jalisco, Mexico, and was responsible for large amounts of cocaine transported from Juarez through El Paso and on to Connecticut, New York and Chicago.
At sentencing, Judge Cardone considered Martinez’s criminal history which included a five-year federal prison term beginning in 1992 for marijuana importation and a nearly 11-year federal prison term for conspiracy to possess a controlled substance with intent to distribute in 2002. According to court records, Martinez continued his drug trafficking efforts even prior to the expiration of his terms of supervised release following each prison term. Judge Cardone also ordered that Martinez pay a monetary judgment in the amount of $112,000, representing the value of a property in El Paso that Martinez used in furtherance of his drug trafficking crimes.
This Organized Crime Drug Enforcement Task Force (OCDETF) investigation was conducted by agents with the Drug Enforcement Administration along with assistance from other federal, state and local law enforcement agencies in El Paso, New York, Chicago and Connecticut.
Three Plead Guilty to Making Illegal Identification DocumentsRead the Press Release
Montgomery, Alabama - Noemi Vasquez, 39 years old, along with Raul Castro-Morales and Wilfredo Cheverria-Funez, all of Montgomery, Alabama, pled guilty in federal court on Tuesday, December 3, 2013 to aggravated identity theft, illegal production of an identification card, and counterfeiting a social security card, announced U.S. Attorney George L. Beck, Jr.
In January of 2012, Noemi Vasquez worked at a company that used the federal E-Verify system. E-Verify is a federal internet-based program which allows an employer to determine if a prospective employee is authorized to work in the United States. Vasquez used her position at this company to access the E-Verify system and obtain biographical information of Hispanic males This information included name, citizenship status, date of birth, and place of birth.
As part of the scheme, Vasquez would pull an E-Verify report of a person that was of similar height, weight and age as an undocumented alien seeking employment. Vasquez would then sell the E-Verify report to the undocumented alien for $300 and provide him with Cheverria-Funez’ contact information to obtain the illegal identification documents. Cheverria-Funez would then introduce the undocumented alien to Raul Castro-Morales who would create false social security and identification cards for an additional fee.
If convicted, Vasquez, Cheverria-Funez, and Castro-Morales face sentences of not less than two years, and not more than 15 years of incarceration with the Bureau of Prisons. They further face up to five years of supervised release, a fine of not more than $250,000, and payment of restitution to the victims. Cheverria-Funez and Castro-Morales also face deportation after conviction and service of sentence.
This case was investigated by U.S. Immigration and Customs Enforcement and prosecuted by Assistant U.S. Attorney Susan Redmond.
PRESS CONTACT: Clark Morris
Email: [email protected]
Telephone: (334) 551-1755
Fax: (334) 223-7617Three Dayton Family Members Plead Guilty to Immigration and Firearms ViolationsRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
DAYTON – Two members of a Dayton family have pleaded guilty in U.S. District Court to charges connected to their attempts to gain U.S. citizenship. A third family member admitted to illegal possession of a firearm.
Carter Stewart, U.S. Attorney for the Southern District of Ohio, and Kevin R. Cornelius, Special Agent in Charge, Federal Bureau of Investigation, announced the pleas that were entered on November 27 before U.S. District Judge Walter Rice.
Muzaffar Mirsoliyev, 28, of Dayton, pleaded guilty to one count of making a false statement under oath during a matter relating to naturalization and citizenship. His father, Mustafo Mirsoliyev, 51, of Dayton, pleaded guilty to one count of failure of an alien to update a change of address within ten days of relocation. Muzaffar Mirsoliyev’s wife, Fanisa Shaydullina, 26, of Dayton, pleaded guilty to one count of possession of a firearm by an individual illegally in the United States.
The plea agreements for Muzaffar Mirsoliyev and Fanisa Shaydullina include their judicial removals from the United States upon completion of the sentencing proceedings, which Judge Rice scheduled for December 23, 2013.
All three suspects were arrested in August by the FBI Joint Terrorism Task Force (JTTF), which includes officers and agents from Cincinnati Police Department, Colerain Police Department, Dayton Police Department, Harrison Police Department, Ohio State Highway Patrol, United States Immigrations and Customs Enforcement, United States Secret Service and the West Chester Police Department.
U.S. Attorney Stewart commended the United States Citizenship and Immigration Services (USCIS), the Homeland Security Investigations directorate (ICE), and the United States Department of Agriculture (USDA) for the cooperation they provided during this investigation. Assistant U.S. Attorney Brent Tabacchi prosecuted the case.
Thirteenth Person Sentenced in Major Eastern Idaho Meth CaseRead the Press Release
POCATELLO – Isidoro David Herrera, 32, of Idaho Falls, Idaho, was sentenced in United States District Court today to 100 months in prison for conspiracy to possess with intent to distribute in excess of 50 grams of methamphetamine, U.S. Attorney Wendy J. Olson announced. U.S. District Judge Brian Ted Stewart of the District of Utah also sentenced Herrera to five years of supervised release. He pleaded guilty to the charge on January 24, 2013. Herrera is the thirteenth defendant sentenced in the case. The remaining defendant, Guadalupe Meraz, 42, of Madera, California, is a fugitive.
According to plea agreements filed in the case, from June 2005 through January 2012, a group of individuals centered around co-defendant Samuel Nevarez-Ayon entered into a conspiracy to possess and distribute in excess of 50 grams of actual methamphetamine in the Idaho Falls area. In furtherance of the conspiracy, Nevarez-Ayon admitted that he distributed methamphetamine to other individuals on at least three occasions during this same time period. In furtherance of the conspiracy, Nevarez-Ayon directed activities of various co-defendants, including Herrera. In addition to distributing methamphetamine, several defendants laundered proceeds from the sale of the methamphetamine, and made false loan application to local banks to further the laundering of money. During the course of the conspiracy, the defendants obtained in excess of $500,000 from the distribution of methamphetamine.
Defendants sentenced to date include:
- Samuel Nevarez-Ayon, 27, of Rexburg, Idaho, to 292 months in prison for continuing criminal enterprise, $500,000 forfeiture, and $4,000 fine;
- Ricardo Garcia Lopez, 36, of Idaho Falls, to 235 months in prison for conspiracy to possess with intent to distribute more than 50 grams of methamphetamine, five years of supervised release, and $1,000 fine;
- Alberto Abarca, 23, of Idaho Falls, to 130 months in prison for possession with intent to distribute methamphetamine, and five years of supervised release;
- Juan Ortiz, Jr., 29, of Shelley, Idaho, to 120 months in prison for conspiracy to possess with intent to distribute more than 50 grams of methamphetamine, five years of supervised release and $1,000 fine;
- Antonio Javier Mendoza, 29, of Shelley, to 96 months in prison for conspiracy to possess with intent to distribute more than 50 grams of methamphetamine, five years of supervised release, and $1,000 fine;
- Daniel Quiroz, 26, a Mexican national, to 78 months in prison for conspiracy to possess with intent to distribute more than 50 grams of methamphetamine, five years of supervised release, $500 fine;
- Nicolas Levi Olsen, 30, of Idaho Falls, to 60 months in prison for aiding and abetting possession with intent to distribute methamphetamine, five years of supervised release, and $500 fine;
- Everado Tapia Torres, Jr., 31, of Idaho Falls, to 54 months in prison for possession with intent to distribute five grams or more of methamphetamine, and four years of supervised release;
- Rafael Ignacio Guerrero, 38, a Mexican national, to 42 months in prison for conspiracy to possess with intent to distribute more than 50 grams of methamphetamine, deportation;
- Fabiola Esmerelda Marin-Castro, 27, a Mexican national, to 36 months in prison for conspiracy to possess with intent to distribute more than 50 grams of methamphetamine, $300 fine, and forfeit $83,575 and two vehicles;
- Ana Rosa Valdez-Ceja, 27, of Shelley, to two years of probation for money laundering; and
- Abel Garcia, 25, of Idaho Falls, to one month in prison for false statement to a bank.
The charges were the result of a nine-month investigation by the Organized Crime Drug Enforcement Task Force (OCDETF), including the Idaho State Police, Bonneville County Sheriff's Office, Idaho Falls Police Department, Madison County Sheriff's Office, Rexburg Police Department, Bingham County Sheriff’s Office, Fremont County Sheriff’s Office, Federal Bureau of Investigation (FBI), U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI), Internal Revenue Service-Criminal Investigation, and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). Other federal agencies participating in the OCDETF program include the Drug Enforcement Administration and the U.S. Marshals Service.
The OCDETF program is a federal multi-agency, multi-jurisdictional task force that supplies supplemental federal funding to federal and state agencies involved in the identification, investigation, and prosecution of major drug trafficking organizations.
Texas Man Sentenced for Being A Felon in Possession of A FirearmRead the Press Release
SHREVEPORT, La. –United States Attorney Stephanie A. Finley announced today that Larry Robert Baker, 50, of Maud, Texas, was sentenced by U.S. District Judge Donald E. Walter to 30 months in prison and three years of supervised release for possessing a firearm after being convicted and serving time for a murder and other felonies in Texas. He pleaded guilty August 29, 2013.
According to evidence presented at the guilty plea, the Louisiana Department of Wildlife and Fisheries (LDWF) conducted an operation on January 11, 2013 to catch night hunters who were shooting after dark from the roads in north Caddo Parish. During the operation, LDWF agents observed Baker shooting from a car at a deer decoy set up by agents. A .22 caliber revolver was found in the car that he was driving, along with a box of .22 caliber ammunition. Baker was arrested for the wildlife violation, driving under suspension, and traveling with open containers of alcohol. Upon further investigation, agents found that Baker had recently been released from prison after serving 20 years for a Texas murder. Baker was found guilty of murder on August 5, 1993, in the 54th District Court of McLennan County, Texas. He also has prior burglary and property theft convictions.
The Louisiana Department of Wildlife and Fisheries and the Bureau of Alcohol, Tobacco, Firearms and Explosives conducted the investigation. Assistant U.S. Attorney Robert W. Gillespie Jr. prosecuted the case as part of Project Safe Neighborhoods. Project Safe Neighborhoods is a nationwide program started in 2001 designed to reduce violence by aggressively enforcing existing federal firearms laws.
Statement of Attorney General Eric Holder on the Death of Nelson MandelaRead the Press Release
Attorney General Eric Holder issued the statement below following the death of Nelson Mandela:
“I join President Obama in expressing my heartfelt condolences to the people of South Africa, and the entire Mandela family, on the passing of Nelson Mandela.
The world has lost an extraordinary pioneer and an unsurpassed champion for freedom and justice. As a lawyer and an activist, he inspired millions – not only in South Africa, but around the globe – to stand united against oppression and apartheid. As a statesman, he fought throughout his career to advance democratic values, working tirelessly to combat poverty, AIDS, and human rights abuses. As South Africa’s first democratically-elected president, he sought to bring healing to a torn and deeply divided country. And he became much more than the ‘father of a nation.’
Like so many – in every corner of the globe – I have regarded President Mandela as a personal hero for decades. I was inspired years ago by his courage and his devotion to improving the lives of those around him. And when I had the privilege of meeting with him, as Deputy Attorney General, I found him to be a remarkable man and a brilliant and principled leader. His legacy will endure, and his important work will go on, in the efforts of all who continue to speak out for peace, for freedom, for justice, and for the dignity to which every human being is entitled. I was deeply saddened to hear of his passing today, and will hold his friends, loved ones, and countrymen and -women in my thoughts and prayers.”
Springfield Felon Sentenced to 13 Years for Second Child Porn OffenseRead the Press Release
Project Safe Childhood
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Springfield, Mo., man who has been convicted twice for possessing child pornography was sentenced in federal court today.
Lattrell Anthony Morris, 30, of Springfield, was sentenced by U.S. District Judge Gary A. Fenner to 13 years in federal prison without parole for possessing child pornography and for violating the terms of his supervised release (which was being served for an earlier conviction, also for possessing child pornography). Morris was sentenced to 10 years in prison for possessing child pornography and to five years in prison for violating his supervised release, with two years of that sentence to be served concurrently to his 10-year sentence, for a total of 13 years. Following his prison term, Morris will be on supervised release for the rest of his life.
Today’s sentence is more than double the length of his previous sentence for possessing child pornography. Morris was sentenced in 2007 to serve 70 months in federal prison for possessing child pornography, followed by a lifetime term of supervised release. Morris had been on supervised release for only a few months when he was caught downloading child pornography on his cell phone.
Morris received a cell phone in September 2012, approximately four months after being released from federal prison. Despite Morris’s supervised release restrictions against Internet services, Morris paid $50 a month for unlimited Internet access through his cell phone. Morris admitted that he used his cell phone daily to conduct Internet searches for child pornography. Law enforcement officers examined Morris’s cell phone and found more than 15 images of child pornography.
As a result, Morris’s supervised release was revoked and he was charged again with possessing child pornography. Morris pleaded guilty in the second case on May 21, 2013.
This case was prosecuted by Assistant U.S. Attorney Abram McGull II. It was investigated by the FBI, the Springfield, Mo., Police Department and the U.S. Probation and Pretrial Services Office.
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."Smith County Man Guilty of Loan FraudRead the Press Release
Department of Justice
Office of Public AffairsTYLER, Texas – A 58-year-old Tyler, Texas man has pleaded guilty to federal violations in the Eastern District of Texas, announced U.S. Attorney John M. Bales.
Bobby Gene Loggins pleaded guilty to an Information charging him with making false statements to a bank today before U.S. Magistrate Judge John D. Love.According to information presented in court, Loggins has been affiliated with Loggins Meat Company (LMC) in Tyler for more than 30 years. During most of that time, Loggins served as President and Chief Executive Officer of LMC. The company was founded in 1940 by Loggins’ father and operates as a wholesaler, retailer, and processor of meat and meat products. In March 2009, Loggins applied to Bank of Tyler for a revolving line of credit. In connection with the loan application, Loggins provided fraudulent financial information for LMC. Following approval of the loan, Loggins continued to provide false financial data when seeking advances on the credit line. Ultimately, LMC ceased operation in about August 2010.
Loggins faces up to 30 years in federal prison and a fine of up to $1 million. A sentencing date has not been set.
This case is being investigated by the Federal Bureau of Investigation and prosecuted by Assistant U.S. Attorney Frank Coan.
Serial Armed Robber Sentenced to 124 Years in PrisonRead the Press Release
Frank Richardson Jr., 39 of Detroit, was sentenced to 124 years in federal prison after having been found guilty in June on ten counts of robbery and firearms offenses, announced United States Attorney Barbara L. McQuade.
McQuade was joined in the announcement by Special Agent in Charge Paul M. Abbate, Federal Bureau of Investigation, Acting Special Agent in Charge Daryl McCrary, Bureau of Alcohol Tobacco and Firearms, and Detroit Police Chief James Craig.
The sentence was imposed by Chief Judge Gerald E. Rosen in Detroit.
The evidence presented at trial established that Richardson was the leader of a seven man robbery crew that committed armed robberies of Verizon and Radio Shack stores in the cities of Detroit and Eastpointe between February 22, 2010 and May 8, 2010. Richardson and one of his co-defendants selected and surveilled the stores to be robbed. They would then assemble the crew and, armed with handguns, commit armed robberies at the various locations. During the robberies, employees and patrons would be forced into rear storage rooms at gunpoint. Other co-defendants collected cellular telephones into large laundry bags before fleeing the store. Richardson would act as a look-out from outside of each location, communicating with the men inside the stores by cell-phone or handheld radios. The stolen cell phones would later be sold to individuals who offered them for sale on-line on e-Bay. Through the course of the robberies, losses to the various stores exceeded $80,000.
Richardson and the rest of the crew were apprehended when counter-surveillance by the Detroit FBI Violent Crimes Task Force resulted in arrests immediately following the May 8, 2010 robbery.
US Attorney McQuade stated, “"A lengthy sentence like this one results from the mandatory minimum sentences required for multiple counts of armed robbery. Congress mandated severe sentences for the severe harm violent criminals cause to public safety. We hope that violent offenders will take note of this type of sentence and put down their guns."FBI Detroit Field Office Special Agent in Charge, Paul M. Abbate said, "This investigation, leading to the arrest, conviction, and sentencing of the defendant, highlights the value and effectiveness of combining local, state, and federal resources and working jointly to combat violent criminals and protect the citizens of the Detroit metropolitan area. The FBI Detroit Division maintains strong working relationships with its local, state and federal law enforcement partners to aggressively pursue violent criminal offenders and protect the community."
ATF Acting Special Agent McCrary stated, ““In addition to the intense prosecution effort, we are getting the word out that violent crime committed with a firearm will lead to serious time in prison. I think the message is clear that we will not tolerate individuals who continually jeopardize the safety of our citizens by committing senseless violent acts of crime.”
United States Attorney McQuade praised the work of the Detroit Violent Crimes Task Force for the diligent pursuit and investigation of the men who were intent on terrorizing businesses, employees and customers in the Detroit area. The Violent Crimes Task Force is comprised of federal and local law enforcement officers who focus their efforts on the investigation and apprehension of individuals who commit violent, assaultive and narcotics related federal offenses in southeastern Michigan.
The case was prosecuted by Assistant United States Attorneys Jeanine Brunson and John O’Brien.
Sentences for Decmber 02 - 03, 2013Read the Press Release
Quang Vu Nguyen, 30, of San Jose, California, was sentenced by Federal District Court Judge Alan B. Johnson on December 3, 2013, for conspiracy to possess with intent to manufacture 36.3 kilograms of marijuana. Nguyen was arrested in San Jose, California. He received 30 months imprisonment, to be followed by three years of supervised release, was ordered to pay a $100.00 special assessment and a $400.00 fine. This case was investigated by Wyoming Division of Criminal Investigation.
Lisa Renee Williams, 40, of Berthoud, Colorado, was sentenced by Federal District Court Judge Alan B. Johnson on December 2, 2013, for conspiracy to possess with intent to distribute, and to distributing approximately three ounces of methamphetamine. Williams was arrested in Berthoud, Colorado. She received 70 months imprisonment, to be followed by four years of supervised release, and was ordered to pay a $100.00 special assessment and a $200.00 fine. This case was investigated by the Wyoming Division of Criminal Investigation.
Stanley J. Jones, 59, of Otto, Wyoming, was sentenced by Federal District Court Judge Alan B. Johnson on December 2, 2013, for realty trespass and for grazing trespass on public land administered by the Bureau of Land Management. Jones received two years of supervised probation and was ordered to pay a $75.00 special assessment. The Court also ordered Jones to pay $3,000.00 fine which is contingent on Jones erecting new fences and repairing existing fences and removing his person property from public lands within six months. This case was investigated by the Bureau of Land Management’s Worland Field Office.
Seattle Man Sentenced to Ten Years in Prison for $30 Million Ponzi SchemeRead the Press Release
A 30-year-old Seattle man who operated a ‘Ponzi scheme’ disguised as real estate investment opportunities in Peru, was sentenced today in U.S. District Court in Seattle to ten years in prison for wire fraud and money laundering, announced U.S. Attorney Jenny A. Durkan. JOSE L. NINO DE GUZMAN, Jr., ran NDG Investment Group, LLC from 2006 until 2009 when his scheme collapsed. The Washington State Department of Financial Institutions issued a cease and desist order in 2010 concerning his fraudulent sales of investment opportunities. DE GUZMAN raised more than $30 million from over 200 investors for real estate investments in Peru. However, most of the investments described to investors did not occur, instead DE GUZMAN spent investor money on homes, a yacht, jewelry and other luxuries, and to pay off earlier investors. At sentencing U.S. District Judge Robert S. Lasnik said DE GUZMAN made “obscene expenditures of funds on hedonistic things for pride, hubris and ego.” In discussing DE GUZMAN’s misconduct, Judge Lasnik said it was “beyond anything this court has seen before.” Judge Lasnik called DE GUZMAN a “proven con man and a danger to the community.”
“This defendant committed a brazen, Ponzi-scheme spanning nearly three years and two continents and involving tens of millions of dollars, and more than 180 victims,” said U.S. Attorney Jenny A. Durkan. “Month after month, day after day, Nino de Guzman lied to his friends and family and other investors, separating them from their hard-earned money, simply so he could live a lavish lifestyle. And when his web of lies unraveled, he desperately tried to knit together other stories to avoid accountability. The work of state authorities and the FBI put an end to his fraud.”
According to records filed in the case, DE GUZMAN left school at the University of Washington without graduating and at the age of 23 founded NDG Investment Group LLC. Prior to starting the company in September 2006, DE GUZMAN had been employed by U.S. Bank as a teller and then as a personal banker. However, despite his true background, DE GUZMAN solicited investors by telling them he had worked at U.S. Bank for three years as a business and commercial lending officer and specialized in fixed income with a focus on real estate.
DE GUZMAN made numerous misrepresentations about his success and the most basic fundamentals of the investments. For example, DE GUZMAN falsely represented to investors that he had a proven track record of successfully developing real estate through an established company in Peru; that the investors’ funds would be used for specific real estate projects and that the investments were secured by real property in Peru; that investors would get a high rate of return on their investments when the development projects were complete; and that NDG would only receive a portion of the profits upon successful completion of the projects and after all the investors had received their original investment and projected rates of return. These representations were false. Neither DE GUZMAN nor NDG had ever successfully completed any real estate projects in Peru and, despite raising funds for approximately twenty projects, had only purchased a limited number of real properties. No projects ever generated a profit. Nevertheless, NINO DE GUZMAN told the investors their projects were completed or were progressing, and he sent periodic, fraudulent “updates” to investors, including showing “construction” sites for projects in which the land had not even been purchased. Investors’ funds instead were used to fund DE GUZMAN’s expensive lifestyle, including the purchase of a $365,000 diamond ring, a $600,000 yacht, a $250,000 suite for Seahawks games and a $200,000 Bentley automobile. Moreover, as in a classic Ponzi scheme, DE GUZMAN used millions of dollars of investors’ funds to pay off previous investors to continue the illusion that DE GUZMAN was a successful developer, and to induce additional investors.
DE GUZMAN pitched his investment opportunity at expensive downtown clubs and hotels, and emphasized NDG’s established alliances and relationships with well-known businesses and individuals. Some of the investors were the parents or friends of people employed by NDG, and it was some of these employees who first reported DE GUZMAN to regulators when they became aware of the fraud.
“Nino de Guzman's scheme stole the dream of retirement and financial security from his victims,” said Steven J. Bellis, Assistant Special Agent in Charge of IRS Criminal Investigation in Seattle. “I am pleased that the dedicated agents of IRS CI were able to bring their expertise in rooting out financial fraud to the law-enforcement team that put an end to the deception and held Nino de Guzman accountable for his crimes.”
“The severity of this sentence recognizes the outrageous conduct of a con man who took others’ life savings and ruined trusted relationships with friends and family.” said Special Agent-in-Charge Laura M. Laughlin of the FBI Seattle field office. “The FBI had excellent partners in the IRS and DFI, together uncovering the extent of Nino De Guzman’s many lies and many victims, and in the USAO, who worked tirelessly on this case. The lengthy joint investigation and the dedicated prosecution show our shared commitment to bring financial criminals to justice.”
DE GUZMAN was arrested on a criminal complaint on July 7, 2011, and was indicted by the grand jury later that month. He pleaded guilty to wire fraud and money laundering on July 19, 2013. He has been in custody since his 2011 arrest. Judge Lasnik ordered him to pay $18,321,209 in restitution and imposed three years of supervised release following prison. In addition, Judge Lasnik entered a money judgment in the amount of $31,618,674 against DE GUZMAN.
The case was investigated by the Washington State Department of Financial Institutions (DFI), the Internal Revenue Service Criminal Investigations and the Federal Bureau of Investigation. The case is being prosecuted by Assistant United States Attorneys Tessa Gorman and Justin Arnold, as well as Special Assistant United States Attorney Robert Kondrat, who is a DFI attorney cross-designated to the United States Attorney’s Office to prosecute securities fraud cases.