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16 January 2014
Wyoming Men Sentenced for Involuntary Manslaughter and Aiding and AbettingRead the Press Release
U.S. Attorney for the District of Wyoming Christopher A. Crofts announced today that on January 9, 2014, Alan Brown, 61, and his brother Vernon Lee Brown, 54, both Northern Arapaho Tribal Members, were each sentenced in federal court to 84 months imprisonment with the Bureau of Prisons on one count of Involuntary Manslaughter and Aiding and Abetting (Alan Brown) and Involuntary Manslaughter (Vernon Brown). The charges against Alan and Vernon Lee Brown stem from an incident that occurred on or about May 6, 2006, which resulted in the death of Tad Paul Barnson, 47, who was originally from Idaho Falls, Idaho, but resided in and around Riverton, Wyoming at the time of his death. Alan and Vernon Lee Brown are life-long Wind River Indian Reservation inhabitants and this crime occurred, in part, on the Wind River Indian Reservation. In addition to the imprisonment, Alan and Vernon Lee Brown were also sentenced to three years of supervised release following confinement and ordered to pay a $100 special assessment. The Court will determine and order an appropriate restitution amount within 60 days. This case was investigated by the Federal Bureau of Investigation, the Bureau of Indian Affairs, and the Fremont County Sheriff’s Department.
Whitesboro Man Admits to Illegal Firearm PossessionRead the Press Release
SYRACUSE, NEW YORK – Kaylon Pruitt, 23, of Whitesboro, New York pled guilty in federal court in Syracuse today to possessing a firearm as a convicted felon. Pruitt admitted that he possessed a loaded 12 gauge Mossberg Shotgun on October 15, 2013 when a New York State Parole officer visiting another person approached the front door of the defendant’s residence in Whitesboro, New York. The defendant answered the door while holding the shotgun. Pruitt was previously convicted of Burglary In the Second Degree, in Orangeburg County, South Carolina in 2010. He faces up to ten (10) years imprisonment and a fine of up to $250,000.00 when sentence is imposed on May 21, 2014 in Syracuse, according to United States Attorney Richard S. Hartunian.
The case was investigated by The New York State Division of Parole, The Village of Whitesboro Police Department and the United States Bureau of Alcohol, Tobacco, Firearms and Explosives (Syracuse, New York Office). The defendant was prosecuted by Assistant U.S. Attorney Richard R. Southwick with assistance from the Oneida County District Attorney’s Office.
For further information, contact AUSA Richard R. Southwick at (315) 448-0672.
Westchester Man Charged with Aiming High-Powered Laser Pointer at Police Helicopter; Deferred Prosecution Agreement ReachedRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, George Venizelos, the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), George Longworth, the Commissioner of the Westchester County Department of Public Safety (“WCDPS”), and William J. Bratton, the Commissioner of the New York Police Department (“NYPD”), announced today the filing of a criminal Complaint against PHILIP AVERY PUTTER for aiming a high-powered laser pointer at a WCDPS helicopter that was conducting aerial surveillance at the July 2013 Kensico Dam Fireworks Independence Day celebration. The Government and the defendant have entered into a deferred prosecution agreement, which was today approved in White Plains federal court by United States Magistrate Judge Paul E. Davison.
U.S. Attorney Preet Bharara stated: “Aiming a high-powered laser pointer at an aircraft is serious business; it can cause a deadly crash. The public should know that those who engage in such conduct are committing a federal crime.”
FBI Assistant Director-in-Charge George Venizelos stated: “This is no laughing matter. Plain and simple: lasers pointed at pilots can down an aircraft. The FBI is committed to investigating these incidents that continue to occur with alarming frequency.”
Westchester County Department of Public Safety Commissioner George Longworth stated: “This incident not only caused a danger to the pilots and crew of our Aviation Unit helicopters, but it also jeopardized the safety of thousands of people who were enjoying the festivities that evening at Kensico Dam Park. Blinding the pilot of any aircraft is not a silly prank. It is a crime that has the potential to cause devastating consequences.”
New York Police Commissioner William J. Bratton said, “This prank underscores the type of reckless conduct that can potentially endanger law enforcement and the communities they serve. I want to thank the investigators for their swift action that led to the apprehension of this individual.”
According to allegations contained in the Complaint filed today in White Plains federal court:
On the evening of July 3, 2013, two WCDPS helicopter pilots were assigned to conduct aerial observation of the Fireworks Celebration at the Kensico Dam in Valhalla, New York. There were approximately 10,000 to 15,000 people on the ground below enjoying the festivities.
The helicopter pilots explained that very shortly after they arrived near the Kensico Dam just after 9 p.m., the helicopter was hit by a green laser beam. The laser contact lasted approximately 4-5 seconds. One pilot said that the laser hit prevented him from being able to see objects outside the aircraft, and that after the beam struck the helicopter, his night vision was severely impaired. The other pilot said that the laser beam impaired his ability to read the flight instruments for a period of time.
WCDPS officers on the ground looked up into the sky and saw a green laser beam pointing toward the WCPD helicopter. A police officer followed the steady beam down to the ground and saw a man holding a laser pointer. That man was subsequently identified as PUTTER.
PUTTER, 40, who lives in Hawthorne, New York, has been charged with one count of aiming a laser pointer at an aircraft, which is a relatively new criminal statute enacted by Congress in February 2012 in order to address the increasing nationwide problem of laser pointers targeting aircraft.
PUTTER faces a maximum penalty of 5 years’ imprisonment. Under the terms of the deferred prosecution agreement, however, if PUTTER abides by the conditions of the agreement for six months, the Government will agree to dismiss the Complaint.
Mr. Bharara praised the investigative work of the law enforcement partners involved in the investigation, including the FBI’s Joint Terrorism Task Force and the Westchester County Department of Public Safety..
The case is being handled by the Office’s Terrorism and International Narcotics Unit. Assistant U.S. Attorney Jason P.W. Halperin is in charge of the prosecution.
The charge contained in the Complaint is merely an accusation, and the defendant is presumed innocent unless and until proven guilty.
There are a number of incidents involving lasers pointed at aircraft in the metropolitan New York area that the FBI is now actively investigating. Anyone with information about such incidents is asked to call the FBI at 212-384-1000.
U.S. v. Philip Avery Putter Complaint
U.S. v. Philip Avery Putter Deferred Prosecution AgreementU.S. Attorney's Office Warns Public to Be Aware of Tax Identity Theft During Tax SeasonRead the Press Release
SHREVEPORT/LAFAYETTE/ALEXANDRIA/LAKE CHARLES/MONROE, La.: United States Attorney Stephanie A. Finley joins other federal law enforcement agencies to raise awareness about a growing problem of identity theft as it relates to tax refund fraud. The Federal Trade Commission (FTC) has named this week “Tax Identity Theft Awareness Week.” The FTC reports that the use of a Social Security number or other personal information to file a false return is one of the fastest growing forms of identity theft. Early in the year when tax refunds are due, tax thieves steal social security numbers to grab someone else’s tax refund.
Nationwide tax ID theft fraud is estimated to cost the U.S. Treasury more than $5 billion annually. The IRS has made tax identity theft a top priority and has hired new staff to explore new technologies and adopted new procedures to fight it. In fiscal year 2013, the IRS initiated 1,492 identity theft related criminal investigations, an increase of 66 percent over investigations initiated in FY 2012. Indictments and sentencing doubled in FY 2013 and the average prison term was more than three years (38 months).
Tax identity theft happens when someone files a tax return using other people’s personal information, like a Social Security number, to get an income tax refund from the IRS. It also can happen when someone uses a Social Security number to get a job or claims someone else’s child as a dependent on a tax return. Victims usually do not realize that their identity has been stolen until they do their taxes. The IRS will contact the victim saying that more than one tax return was filed using their Social Security number, or that IRS records show they received wages from an employer they do not know.
There are a number of ways for tax identity thieves to get personal information, to include:
- going through trash or stealing mail from a home or car;
- sending phony emails that look like they’re from the IRS asking for personal information;
- misusing clients’ information or passing it along to identity thieves by employees of businesses.
“With the federal income tax season upon us, it is important that the public is aware of the ways that thieves can steal your identity and your income tax refund,” Finley stated. “Tax identity is one of the biggest hassles you could face and protecting your personal information has never been more critical. Our office, along with our federal law enforcement partners, are keenly aware that these types of crimes are on the rise, and we will continue to prosecute these cases and seek the stiffest penalties available for those who try to scam innocent victims.”
“Individuals who commit violations of identity theft deserve to be punished to the fullest extent of the law,” IRS Criminal Investigation Special Agent in Charge Gabriel L. Grchan said. “IRS Criminal Investigation remains vigilant in identifying, investigating, and prosecuting those individuals who participate in Stolen Identity Refund Fraud schemes. We appreciate the Office of the U.S. Attorney for their aggressive support of identity theft tax fraud cases. It is only with the support of our law enforcement partners that we can assure American taxpayers that identity thieves will be held accountable.”
“Tax identity theft is a significant and growing issue,” said Jessica Rich, director of the FTC’s Bureau of Consumer Protection. “It’s critical that we make sure consumers are aware of how they can prevent it, and if they are victimized, what steps they can take to recover as quickly as possible.”
To protect yourself this tax season, it is important to know the ways that the IRS will and will not contact you if they have concerns. It is not going to be through text, email or the phone. The IRS will only contact you by mail if there is anything they have a concern with. If you receive a letter from the IRS, contact the IRS Identity Protection Specialized Unit at 1-800-908-4490.
For those who have had their identity stolen and used for fraud, the IRS will issue a special PIN to use for filing taxes. Information on the PIN program is available at http://www.irs.gov/uac/Newsroom/IRS-Combats-Identity-Theft-and-Refund-Fraud-on-Many-Fronts-2014. Please visit the FTC at ftc.gov/idtheft and the IRS at irs.gov/identitytheft for more information about tax identity theft.
Two Turkish Nationals Indicted for Smuggling Counterfeit Cancer DrugRead the Press Release
St. Louis, MO - The United States Attorney’s Office for the Eastern District of Missouri announced that OZKAN SEMIZOGLU and SABAHADDIN AKMAN, both from Turkey, have been charged with obtaining unapproved, misbranded, adulterated and counterfeit cancer treatment prescription drugs from Turkey and other foreign countries and smuggling the drugs into the United States, including three shipments sent from Turkey to Chesterfield, Missouri.
According to the indictment, which was filed this morning in St. Louis, Missouri, the defendants used shipping labels that concealed the illegal nature of the prescription drug shipments, including customs declarations falsely describing the contents as "gifts" or "documents" or “product sample” with no or low declared monetary values. Defendants also ensured that large drug shipments were broken into several smaller packages to reduce the likelihood of seizures by U.S. Customs authorities and the corresponding loss of expensive drug shipments. Additionally, the indictment states that the defendants shipped some prescription drugs requiring constant cold temperatures to maintain their stability and effectiveness in shipping boxes without insulation or any temperature protection whatsoever. Given the length of time required to ship products from Turkey to the United States, defendants were aware that on many occasions their packages of their prescription drugs arrived in the United States at temperatures outside the constant cold temperature range discussed on the drugs’ labeling.
Semizoglu and Sabhaddin Akman, both of Instanbul, Turkey, were charged by indictment by a federal grand jury with one felony count of conspiracy to smuggle merchandise into the United States and three counts of smuggling. Both were arrested this morning in Puerto Rico.
If convicted, each count of smuggling carries a maximum penalty of twenty years in prison and/or fines up to $250,000. In determining the actual sentences, a Judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
This case was investigated by the United States Food and Drug Administration, Office of Criminal Investigations, with assistance from the United States Marshal’s Service, the Office of Inspector General for the U.S. Department of Health and Human Services, Johnson County Crime Lab of Olathe, Kansas, and the United States Attorney’s Offices for the Eastern District of Missouri and the District of Puerto Rico.
As is always the case, charges set forth in an indictment are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.Two Sentenced to Prison in Cocaine Trafficking ConspiracyRead the Press Release
PITTSBURGH – Jermaine Edmonds and William Johnson, both from Pittsburgh, were sentenced in federal court in Pittsburgh for violating federal drug trafficking laws, United States Attorney David J. Hickton announced today.
Edmonds, 35, and Johnson, 37, were sentenced by United States District Judge Arthur J. Schwab. They were both convicted at the conclusion of a jury trial in August 2013 of conspiring to possess with intent to distribute and attempting to possess with intent to distribute 500 grams or more of cocaine. Edmonds was sentenced to serve 130 months in prison followed by eight years supervised release. Johnson was sentenced to serve 120 months in prison followed by eight years supervised release.
Both Edmonds and Johnson were under court supervision following imprisonment imposed for prior drug trafficking convictions when they conspired and attempted to acquire over $90,000 worth of cocaine with the intent to distribute it in the Pittsburgh area. Edmonds’ prior drug trafficking sentence was reduced as a result of reductions to the federal crack cocaine sentencing guidelines. As a result of those reductions, he was released from incarceration in November 2011 – three years prior to when he was scheduled to be released from prison. He committed the additional cocaine conspiracy and attempt crimes less than 10 months after his prior sentence reduction.
Assistant United States Attorney Craig W. Haller prosecuted this case on behalf of the United States.
The Drug Enforcement Administration conducted the investigation leading to the convictions and sentences in this case.
Two More Defendants Plead Guilty in Manhattan Federal Court in Scheme to Exert Control over the Waste-Hauling IndustryRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that SCOTT FAPPIANO and ANTHONY BAZZINI pled guilty today in Manhattan federal court in connection with their roles in an illegal scheme to exert control over the commercial waste-hauling industry in the greater New York City metropolitan area and in parts of New Jersey. FAPPIANO and BAZZINI, who were among 32 defendants charged in January 2013, in connection with the scheme, pled guilty today before U.S. District Judge P. Kevin Castel. FAPPIANO and BAZZINI are the twentieth and twenty-first defendants to plead guilty in this matter.
Manhattan U.S. Attorney Preet Bharara said: “With today’s pleas we have convicted nearly two-thirds of the defendants originally charged in this case, and we will not rest until all responsible for this scheme to control the waste-hauling industry in New York City and beyond are made to answer for their numerous crimes.”
According to the Indictment against FAPPIANO and BAZZINI, other documents filed in Manhattan federal court, and statements made at related court proceedings:
FAPPIANO, who is an associate of the Gambino Crime Family, and BAZZINI, who is a made member of the Gambino Crime Family, participated in a scheme, along with other members and associates of three different Organized Crime Families of La Cosa Nostra (“LCN”) – the Genovese, Gambino, and Luchese Crime Families – to control various waste disposal businesses in the New York City metropolitan area and multiple counties in New Jersey. Members of the scheme engaged in various crimes including extortion, loansharking, mail and wire fraud, and stolen property offenses. As part of their involvement in the scheme, FAPPIANO and BAZZINI made threats of bodily harm to a cooperating Government witness (“CW-1”), who owned a waste hauling company, in an effort to obtain payments from CW-1.
FAPPIANO, 52, of Staten Island, New York, pled guilty to one count of communicating a threat of bodily harm in interstate commerce and faces a maximum sentence of five years in prison. FAPPIANO is scheduled to be sentenced by Judge Castel on May 8, 2014, at 10:30 a.m.
BAZZINI, 54, of Glen Head, New York, pled guilty to one count of communicating a threat of bodily harm in interstate commerce and faces a maximum sentence of five years in prison. Bazzini is scheduled to be sentenced by Judge Castel on May 8, 2014, at 11:30 a.m.
Two other defendants have also recently pled guilty in connection with this case. Anthony Cardinalle, 61, of Saddle River, New Jersey, pled guilty on December 20, 2013, before Judge Castel, to participation in a racketeering conspiracy and participation in an extortion conspiracy. He faces a maximum sentence of 40 years in prison and is scheduled to be sentenced on May 23, 2014, at 11:00 a.m. Charles Giustra, 52, of Staten Island, New York, pled guilty on December 23, 2013, before Magistrate Judge Gabriel W. Gorenstein, to using a facility of interstate commerce in furtherance of a narcotics transaction. He faces a maximum sentence of eight years in prison and is scheduled to be sentenced by U.S. District Judge Colleen McMahon on March 25, 2014, at 4:00 p.m.
The charges against the remaining defendants are merely accusations, and these defendants are presumed innocent unless and until proven guilty.
Mr. Bharara praised the investigative work of the Federal Bureau of Investigation and the Westchester County Police Department.
The prosecution of this case is being handled by the Office’s Organized Crime Unit. Assistant United States Attorneys Brian R. Blais, Natalie Lamarque, and Patrick Egan are in charge of the prosecution. Assistant United States Attorney Micah Smith of the Office’s Asset Forfeiture Unit is responsible for the forfeiture aspects of the case.
U.S. v. Bazzini & Fappiano Superseding Information
Two Men Ordered to Pay $1000 Fines for Bringing Loaded Firearms into Inspection Area in Albuquerque AirportRead the Press Release
ALBUQUERQUE – Yesterday a United States Magistrate Judge entered orders in two cases that require two men to pay $1000.00 fines and to abandon their firearms for attempting to board airplanes at the Albuquerque International Sunport in Albuquerque, N.M., with loaded firearms in their carry-on luggage.
Matthew T. O’Conner, 51, of Los Angeles, Calif., and Todd A. Bourgeois, 32, of Albuquerque, N.M., each entered into an Agreement and Consent Order in separate cases to resolve alleged criminal and civil violations of federal laws that prohibit individuals from possessing firearms on their persons or accessible property when entering inspection areas in airports or boarding airplanes.
Court filings reflect that on Nov. 14, 2013, O’Connor was issued a criminal misdemeanor citation after Transportation Security Administration (TSA) officers found a Jennings J-22 firearm loaded with six rounds of .22 caliber ammunition in his luggage during the security inspection process. Bourgeois was issued a criminal misdemeanor citation on Dec. 2, 2013, after TSA officers found a Glock-19 firearm loaded with 15 rounds of 9 mm ammunition in his luggage, including a round that was chambered, when inspecting his carry-on luggage. Bourgeois’ firearm was not hidden but instead was packed at the top of an outer pouch of his carry-on luggage. Neither O’Connor nor Bourgeois was prohibited by law from possessing firearms when they were cited.
In separate Agreements and Consent Orders filed today, O’Connor and Bourgeois each admitted violating the civil regulatory prohibition against possessing firearms in airport security inspection areas or while boarding an airplane. Each man agreed to pay a $1000 fine and voluntarily abandon his firearm to resolve the misdemeanor charge and avoid further civil penalties arising from his violation.
“These two cases are part of an ongoing effort to address security challenges at airports in New Mexico as weapon seizures at airports continue to increase,” said Acting U.S. Attorney Steven C. Yarbrough. “Hopefully, cases like this will increase public awareness of federal laws and regulations that prohibit possession of weapons, explosives and incendiary devices at airports and on planes and help ensure safe air travel.”
“TSA officers at Albuquerque International Sunport recovered 17 guns from passengers at security checkpoints in 2012 and 12 guns were detected during screening in 2013,” said TSA Albuquerque Federal Security Director George Andler. “TSA continues to educate travelers on the importance of knowing what they’ve packed, both for their safety and the safety of their fellow travelers.” Director Andler also noted that “simple rules for traveling with firearms can be found on our website (www.tsa.gov), including packing the gun in a secure, locked box in your checked bag and declaring it to your airline at check-in.”
These two cases were investigated by TSA with assistance from the Albuquerque Aviation Police. Assistant U.S. Attorney William J. Pflugrath represented the United States in the judicial proceedings.
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O'Conner Order
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Burgeois Order
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Two Men Charged in Las Vegas with Biofuels Fraud SchemeRead the Press Release
Two men have been indicted by a federal grand jury in Las Vegas for offenses involving the federal renewable fuel program that allegedly netted them more than $37 million, announced the Justice Department’s Environment and Natural Resources Division, Criminal Division, and the U.S. Attorney’s Office for the District of Nevada. The 57-count indictment against James Jariv, 63, of Las Vegas, and Nathan Stoliar, 64, of Australia, includes allegations of conspiracy, wire fraud, false statements under the Clean Air Act, obstruction of justice and conspiracy to engage in money laundering.
The indictment was unsealed late Wednesday following Jariv’s initial appearance in federal court in Las Vegas, which followed his arrest on Tuesday. Stoliar resides in Australia.
The Energy Independence and Security Act of 2007 created a number of federally-funded programs that provided monetary incentives for the production of biodiesel and to encourage biodiesel use in the United States. Biodiesel producers and importers could generate and attach credits known as “renewable identification numbers” or RINs to biodiesel they produced or imported. Because certain companies need RINs to comply with regulatory obligations, RINs have significant market value. In addition, in order to create an incentive for biodiesel in the United States to be used in the United States, anyone who exports biodiesel is required to obtain these valuable RINs and provide them to EPA. The market price charged for exported biodiesel therefore includes the value an exporter is required to later spend to acquire these RINs.
The indictment alleges that beginning around June of 2009, the two defendants, James Jariv and Nathan Stoliar, operated and controlled a company -- City Farm Biofuel in Vancouver, British Columbia, Canada -- that held itself out as a producer of biodiesel from “feedstocks” such as animal fat and vegetable oils. Jariv also operated and controlled a company based in Las Vegas, Nevada, called Global E Marketing. The government alleges that these defendants claimed to produce biodiesel at the City Farm facility, claimed to import and sell biodiesel to Global E Marketing, and then generated and sold RINs based upon this claimed production, sale and importation. In reality, little to no biodiesel produced at City Farm was ever imported and sold to Global E Marketing as claimed. The indictment alleges that the defendants’ scheme allowed them to generate approximately $7 million in RINs that were fraudulent, which were then sold to companies that needed to obtain them.
The indictment also alleges that, beginning around the same time period and continuing through Dec. 31, 2013, the defendants, using their company MJ Biodfuels, bought over 23 million gallons of RIN-less biodiesel that had been blended with small amounts of petroleum diesel, known as B99, from companies in the United States. The defendants sold some of this biodiesel to purchasers in the United States, claiming it was pure biodiesel, known as B100, produced at the City Farm facility and imported into the United States. By claiming this biodiesel was B100 and not RIN-less B99, the defendants were able to claim the fuel was eligible to be used to generate credits and incentives, and were able to sell the fuel for significantly more than they otherwise would have been able. The defendants also exported the RIN-less B99 they bought in the United States to Canada. The defendants then sold the biodiesel in Canada, and conspired not to acquire and provide RINs for these exports to the United States as they were required to do, but instead to keep the money they received from the sales for themselves. The indictment alleges that, in doing so, the defendants failed to give to the United States RINs worth in excess of $30 million, keeping this money for themselves instead.
The indictment alleges that the defendants created false records and made false statements to conceal their fraudulent claims of biodiesel production, importation, sale and fraudulent RIN generation. Finally, the indictment alleges that the defendants engaged in a conspiracy to launder the proceeds of their crimes, utilizing foreign banking institutions and complex financial transactions to conceal the illegal nature of the funds they received, and to attempt to protect these funds from government enforcement. Today the United States also seized and restrained the assets contained in a number bank accounts utilized by the defendants, as well as several pieces of real and personal property in Las Vegas, Nevada.
An indictment is only a charge and is not evidence of guilt. All defendants are presumed innocent and are entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
The collaborative investigation that led to today’s arrest and seizures was the result of work by the EPA’s Criminal Investigation Division and the FBI, with assistance from the United States Secret Service and the Department of Homeland Security.
The case is being prosecuted by Senior Trial Attorney Wayne D. Hettenbach of the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division , Assistant U.S. Attorneys Crane M. Pomerantz and Daniel D. Hollingsworth of the U.S. Attorney’s Office in Nevada, and Trial Attorney Darrin L. McCullough of the Justice Department’s Criminal Division, Asset Forfeiture and Money Laundering Section, with the assistance of the Justice Department’s Office of International Affairs.Two Men Charged in Las Vegas with Biofuels Fraud SchemeRead the Press Release
WASHINGTON – Two men have been indicted by a federal grand jury in Las Vegas for offenses involving the federal renewable fuel program that allegedly netted them more than $37 million, announced the Justice Department’s Environment and Natural Resources Division, Criminal Division, and the U.S. Attorney’s Office for the District of Nevada. The 57-count indictment against James Jariv, 63, of Las Vegas, and Nathan Stoliar, 64, of Australia, includes allegations of conspiracy, wire fraud, false statements under the Clean Air Act, obstruction of justice and conspiracy to engage in money laundering.
The indictment was unsealed late Wednesday following Jariv’s initial appearance in federal court in Las Vegas, which followed his arrest on Tuesday. Stoliar resides in Australia.
The Energy Independence and Security Act of 2007 created a number of federally-funded programs that provided monetary incentives for the production of biodiesel and to encourage biodiesel use in the United States. Biodiesel producers and importers could generate and attach credits known as “renewable identification numbers” or RINs to biodiesel they produced or imported. Because certain companies need RINs to comply with regulatory obligations, RINs have significant market value. In addition, in order to create an incentive for biodiesel in the United States to be used in the United States, anyone who exports biodiesel is required to obtain these valuable RINs and provide them to EPA. The market price charged for exported biodiesel therefore includes the value an exporter is required to later spend to acquire these RINs.
The indictment alleges that beginning around June of 2009, the two defendants, James Jariv and Nathan Stoliar, operated and controlled a company -- City Farm Biofuel in Vancouver, British Columbia, Canada -- that held itself out as a producer of biodiesel from “feedstocks” such as animal fat and vegetable oils. Jariv also operated and controlled a company based in Las Vegas, Nevada, called Global E Marketing. The government alleges that these defendants claimed to produce biodiesel at the City Farm facility, claimed to import and sell biodiesel to Global E Marketing, and then generated and sold RINs based upon this claimed production, sale and importation. In reality, little to no biodiesel produced at City Farm was ever imported and sold to Global E Marketing as claimed. The indictment alleges that the defendants’ scheme allowed them to generate approximately $7 million in RINs that were fraudulent, which were then sold to companies that needed to obtain them.
The indictment also alleges that, beginning around the same time period and continuing through Dec. 31, 2013, the defendants, using their company MJ Biodfuels, bought over 23 million gallons of RIN-less biodiesel that had been blended with small amounts of petroleum diesel, known as B99, from companies in the United States. The defendants sold some of this biodiesel to purchasers in the United States, claiming it was pure biodiesel, known as B100, produced at the City Farm facility and imported into the United States. By claiming this biodiesel was B100 and not RIN-less B99, the defendants were able to claim the fuel was eligible to be used to generate credits and incentives, and were able to sell the fuel for significantly more than they otherwise would have been able. The defendants also exported the RIN-less B99 they bought in the United States to Canada. The defendants then sold the biodiesel in Canada, and conspired not to acquire and provide RINs for these exports to the United States as they were required to do, but instead to keep the money they received from the sales for themselves. The indictment alleges that, in doing so, the defendants failed to give to the United States RINs worth in excess of $30 million, keeping this money for themselves instead.
The indictment alleges that the defendants created false records and made false statements to conceal their fraudulent claims of biodiesel production, importation, sale and fraudulent RIN generation. Finally, the indictment alleges that the defendants engaged in a conspiracy to launder the proceeds of their crimes, utilizing foreign banking institutions and complex financial transactions to conceal the illegal nature of the funds they received, and to attempt to protect these funds from government enforcement. Today the United States also seized and restrained the assets contained in a number bank accounts utilized by the defendants, as well as several pieces of real and personal property in Las Vegas, Nevada.
An indictment is only a charge and is not evidence of guilt. All defendants are presumed innocent and are entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
The collaborative investigation that led to today’s arrest and seizures was the result of work by the EPA’s Criminal Investigation Division and the FBI, with assistance from the United States Secret Service and the Department of Homeland Security.
The case is being prosecuted by Senior Trial Attorney Wayne D. Hettenbach of the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division, Assistant U.S. Attorneys Crane M. Pomerantz and Daniel D. Hollingsworth of the U.S. Attorney’s Office in Nevada, and Trial Attorney Darrin L. McCullough of the Justice Department’s Criminal Division, Asset Forfeiture and Money Laundering Section, with the assistance of the Justice Department’s Office of International Affairs.Two Jacksonville Men Indicted in Human Trafficking CrimesRead the Press Release
Jacksonville, Florida – Acting United States Attorney A. Lee Bentley, III announces the return by a grand jury of two indictments charging individuals in Jacksonville, Florida with human trafficking offenses. The first indictment charges Clive Sephas Nelson (23, Jacksonville) with the commercial sex trafficking of a minor female, between on or about November 29, 2013 through on or about December 15, 2013, in the Middle District of Florida. Nelson was indicted on January 15, 2014. If convicted, he faces a maximum penalty of life in prison.
The second alleges that, between in or about December 2012 through on or about May 31, 2013, in the Middle District of Florida, Erick George Brooks (29, Jacksonville) committed commercial sex trafficking of an adult female through force, threats of force, fraud, and coercion. The indictment against Brooks was returned on November 14, 2013. He was arrested on December 4, 2013 and is awaiting a trial, currently scheduled for February 3, 2014. If convicted, he faces a maximum penalty of life in federal prison.
Both cases resulted from investigations conducted by a joint human trafficking task force comprised of investigators from the Federal Bureau of Investigation (FBI) and the Jacksonville Sheriff’s Office. Both offenses are charged under the Federal Human Trafficking Statute, 18 U.S.C. § 1591, part of the Trafficking and Violence Protection Act passed by the United States Congress, in 2000.
On December 31, 2013, President Obama issued a proclamation declaring the month of January 2014 as National Slavery and Human Trafficking Prevention Month. In that proclamation, the President noted, “As we work to dismantle trafficking networks and help survivors rebuild their lives, we must also address the underlying forces that push so many into bondage. We must develop economies that create legitimate jobs, build a global sense of justice that says no child should ever be exploited, and empower our daughters and sons with the same chances to pursue their dreams.”
An indictment is merely a formal charge that a defendant has committed a violation of the federal criminal laws, and every defendant is presumed innocent unless, and until, proven guilty.
These cases were investigated by the FBI and the Jacksonville Sheriff’s Office. They will be prosecuted by Assistant United States Attorney Mac D. Heavener, III.
Tioga Man Convicted of Being A Felon in Possession of ExplosivesRead the Press Release
ALEXANDRIA, La. –United States Attorney Stephanie A. Finley announced today that a federal jury found Calvin James Doherty, 43, of Tioga, La., guilty on Wednesday of being a felon in possession of explosive material and improper storage of explosive material. United States District Judge Dee D. Drell presided over the two-day trial.
Doherty’s trial began Tuesday and ended Wednesday with the jury returning the guilty verdicts after deliberating for about 30 minutes. Witness testimony and exhibits admitted into evidence at the two-day trial established that on July 26, 2011, members of the Western District of Louisiana Violent Offender Task Force went to Doherty’s house in Tioga to arrest another person who had three outstanding felony arrest warrants pending against him. While searching the home, Task Force members found and seized a spool belonging to Doherty. The spool was wrapped with more than 700 feet of detonating cord, which is a high explosive. Doherty had a prior felony conviction for possession of methamphetamine in 2007, which prohibited him from possessing any firearm, ammunition, or explosive.
Doherty faces up to 10 years in prison, a $250,000 fine, and three years of supervised release after he completes the prison term. The sentencing date is April 25, 2014.“Those with felony records are prohibited by law from owning dangerous devices such as explosives and firearms,” Finley stated. “People who willfully commit these types of crimes will be prosecuted by this office to the fullest extent of the law. I would like to thank the prosecutor and agents for their hard work in obtaining this conviction.”
Members of the Western District of Louisiana Violent Offender Task Force, U.S. Marshals Service, Rapides Parish Sheriff’s Department, FBI, and the Bureau of Alcohol, Tobacco, Firearms and Explosives conducted the investigation. Assistant U.S. Attorney Robert W. Gillespie Jr. is prosecuting the case as part of Project Safe Neighborhoods. Project Safe Neighborhoods is a nationwide program to reduce violence by aggressively enforcing existing federal firearms and explosives laws.
St. Francis Man Sentenced for Abusive Sexual ContactRead the Press Release
United States Attorney Brendan V. Johnson announced that a St. Francis, South Dakota, man convicted of Abusive Sexual Contact was sentenced on January 14, 2014, by U.S. District Judge Roberto A. Lange.
Vernon Verdell Blackhorse, age 63, was sentenced to 144 months in custody, 3 years of supervised release, a $3,000 fine, and a $100 special assessment to the Federal Crime Victims Fund.
Blackhorse was indicted for Abusive Sexual Contact by a federal grand jury on May 15, 2013. He pled guilty on November 6, 2013.
The conviction stems from an incident that took place in Eagle Butte between May 1, 2002, and August 30, 2002, when the victim was living at the home of a relative where the defendant was also staying. The victim, who was age 11 or 12 at the time, was sleeping on a couch, and Blackhorse was laying on a couch behind her. The victim woke up when she felt Blackhorse touching her over her clothing in a sexual manner. The victim jumped off of the couch and was able to end the sexual contact.
This case was investigated by the Federal Bureau of Investigation and the Rosebud Sioux Tribe Law Enforcement Services. Assistant U.S. Attorney Marie H. Ruettgers prosecuted the case.
Blackhorse was immediately turned over to the custody of the U.S. Marshals Service.
Six Sentenced in Connection with Major False Billing Scheme at AlphaRead the Press Release
Seven defendants charged to date in ongoing fraud investigation at Massey legacy mines
CHARLESTON, W.Va. – A total of six individuals have been sentenced for their roles in a major false billing scheme involving sourcing agents at former Massey Legacy Mines (“Massey”) -- now Alpha Natural Resources (“Alpha”) -- and certain companies that provided supplies, equipment, and services to Alpha, U.S. Attorney Booth Goodwin announced today. Donald Bryan Steele, the former owner of M&S Hydraulics, a major Alpha supplier, was sentenced today to 18 months in federal prison. Steele, 43, of Barboursville, previously pleaded guilty to wire fraud and aiding and abetting in connection with the fraud scheme.
When approached by law enforcement in February 2013, Steele admitted to investigators that during the scheme, he illegally provided cash and other things of value to former Massey sourcing agents Joey R. Phalin, Edward Ellis Mullins, and Nicholas R. Coleman, in exchange for bogus invoices for payment that M&S Hydraulics knowingly had not provided. Between at least July 2007 through 2012, Steele falsely billed, through the sourcing agents, approximately $1.3 million for goods and services that were not provided.
The sourcing agents, who were generally responsible for ordering goods and services for mining operations from Alpha suppliers, participated in the illegal scheme to obtain goods for their own personal benefit. The sourcing agents hid numerous illegal transactions by creating false invoices.
Phalin, 36, of Crab Orchard, W.Va., was sentenced today to five years’ probation, the first three months of which are to be served on home confinement. Mullins, 41, of Peytona, W.Va., was sentenced yesterday to five years’ probation, the first ten months of which are to be served on home confinement. Coleman, 29, of Lester, W.Va. was sentenced yesterday to five years’ probation for his role in the scheme.
Through his cooperation, Steele identified other sourcing agents involved in the scheme. Last week, former sourcing agent Ricky R. Smith, of 49, Glen Daniels, was sentenced to 1 ½ years in federal prison. James Rodger Long II, 34, of Beckley, also a sourcing agent, was sentenced to 1 ½ years in prison.
Harold Wayne Brown, II, a former Alpha underground maintenance chief, previously pleaded guilty to making a false statement to federal authorities regarding benefits he had received from the false billing scheme. Brown, II, 41, of Madison, W.Va. is scheduled to be sentenced on Jan. 21, 2014.
The investigation was conducted by the FBI and the West Virginia State Police with cooperation from Alpha Natural Resource’s internal security team. Assistant United States Attorney Thomas Ryan is in charge of the prosecutions.
In June 2011, Alpha Natural Resources finalized the purchase of Massey, including the mining divisions located along WV Route 3 in Boone and Raleigh counties.
Sentencing for January 09 - 15, 2014Read the Press Release
Luis Armando Piceno-Ornelas, 30, of Mexico, was sentenced by Chief Federal District Court Judge Nancy D. Freudenthal on January 15, 2014, for illegal re-entry of a previously deported alien into the United States. Piceno-Ornelas was arrested in Rock Springs, Wyoming. He received time served plus ten days, was ordered to pay a $100.00 special assessment, and is subject to deportation upon release from custody. This case was investigated by the U.S. Department of Homeland Security, Immigration and Customs Enforcement.
Celso Diaz-Martinez, 41, of Mexico, was sentenced by Federal District Court Judge Scott W. Skavdahl on January 14, 2014, for illegal re-entry of a previously deported alien into the United States. Diaz-Martinez was arrested in Casper, Wyoming. He received time served plus ten days, was ordered to pay a $100.00 special assessment, and is subject to deportation upon release from custody. This case was investigated by the U.S. Department of Homeland Security, Immigration and Customs Enforcement.
Efrain Tzompa-Hernandez, 34, of Mexico, was sentenced by Federal District Court Judge Alan B. Johnson on January 13, 2014, for illegal re-entry of a previously deported alien into the United States. Tzompa-Hernandez was arrested in Jackson, Wyoming. He received 10 months imprisonment, was ordered to pay a $100.00 special assessment, and is subject to deportation upon release from custody. This case was investigated by the U.S. Department of Homeland Security, Immigration and Customs Enforcement.
Juston Jackett, 28, of Bar Nunn, Wyoming, was sentenced by Federal District Court Judge Alan B. Johnson on January 10, 2014, for possession of a stolen firearm. Jackett was arrested in Bar Nunn, Wyoming. He received 55 months imprisonment, consecutive to his state case in Natrona County. Jackett was also ordered to serve three years of supervised release after confinement and to pay a $100.00 special assessment and a $500.00 fine. This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives.Jose Claudio Ramirez-Fuentes, 30, of Mexico, was sentenced by Federal District Court Judge Scott W. Skavdahl on January 9, 2014, for illegal re-entry of a previously deported alien into the United States. Ramirez-Fuentes was arrested in Jackson, Wyoming. He received 18 months imprisonment, to be followed by one year of supervised release, was ordered to pay a $100.00 special assessment, and is subject to deportation upon release from custody. This case was investigated by the U.S. Department of Homeland Security, Immigration and Customs Enforcement.
Fervin Perez-Perez, 25, of Guatemala, was sentenced by Federal District Court Judge Scott W. Skavdahl on January 9, 2014, for illegal re-entry of a previously deported alien into the United States. Perez-Perez was arrested in Natrona County, Wyoming. He received time served plus ten days, was ordered to pay a $100.00 special assessment, and is subject to deportation upon release from custody. This case was investigated by the U.S. Department of Homeland Security, Immigration and Customs Enforcement.
San Francisco Antique Dealers Indicted for Conspiracy and Scheme to Commit Mail and Wire FraudRead the Press Release
SAN JOSE – A federal grand jury in San Jose returned a twelve count indictment charging two antique dealers with conspiracy to commit mail fraud and wire fraud, mail fraud, and wire fraud relating to a multi-million dollar investment scheme, announced United States Attorney Melinda Haag, Federal Bureau of Investigation Special Agent in Charge David J. Johnson, and United States Postal Inspection Service Acting Inspector In Charge Rafael Nunez.
According to the indictment, Anthony Barreiro, 64, and Ernest Ray Parker, also known as Ray Parker Gaylord, 50, both residents of San Francisco and Dallas, founded and operated a business known at various times as ARTLoan Financial, LLC, ARTLoan Financial Services, Inc., and ARTLoan Financial Service, LLC (“ARTLoan”). Barreiro, who represented himself as ARTLoan’s Chairman and CEO, and Gaylord, who represented himself as its President, operated ARTLoan as a specialty finance company, whereby investors were invited to entrust funds to ARTLoan for the sole, stated purpose of providing lending capital to borrowers seeking to finance the acquisition of high-value art work. ARTLoan promised its investors regular interest payments over the term of each loan. As further security, Barreiro and Gaylord promised investors that ARTLoan would retain possession of a borrower’s artwork as collateral against the loan and, in the event of default, the tendered artwork would be forfeited to ARTLoan for the benefit of the investors.
The Indictment alleges that based on these promises, Barreiro and Gaylord obtained from investors a total of approximately $3.4 million dollars. By June 2010, as a result of their fraudulent scheme, the defendants allegedly had made approximately $1.8 million in “Ponzi” payments intended to lull investors while diverting approximately $1.5 million dollars to their own personal benefit.
According to the indictment, Barreiro and Gaylord explained to investors that ARTLoan was a licensed pawn broker that owned valuable pieces of artwork worth millions of dollars. Barreiro and Gaylord further advised investors that ARTLoan helped collectors finance the purchase of valuable pieces of artwork, many of which were purchased through public auctions, and in the process, allowed ARTLoan to cultivate business relationships with high-profile auction houses, such as Sotheby’s and Christie’s, among others. Barreiro and Gaylord allegedly explained that ARTLoan’s financing options would help collectors finance up to 50% of the value of the piece while requiring the collectors to transfer ownership of the subject artwork to ARTLoan as collateral until the conclusion of the debt obligation. Alternatively, if a collector already owned outright a particular piece of artwork, ARTLoan would provide the collector with financing of up to 50% of the appraised value of that particular piece of artwork while requiring the collector to transfer ownership of the subject artwork to ARTLoan as collateral until the conclusion of the debt obligation.
Barreiro and Gaylord allegedly explained to investors that an investment took the form of a loan agreement with ARTLoan. Barreiro and Gaylord memorialized the investments in documents that they provided to investors at the time of the investors’ initial and subsequent investments in ARTLoan. These documents provided, among other things, that the investor would deposit with ARTLoan a specific investment amount and that ARTLoan would pay the investor a certain regular rate of interest. Thereafter, Barreiro and Gaylord mailed periodic account statements to the investors reflecting principal and accrued interest, and, on certain occasions, a check payable to the investor purporting to represent an interest payment. The defendants also transmitted, via mail, electronic mail, and hand delivery, updates to investors about the business operations of ARTLoan generally.
The defendants allegedly represented to investors, among other things, that the funds deposited with ARTLoan would be used only as lending capital and would not be used to fund the business operations of ARTLoan. Instead, defendants advised investors that the monies generated from the loans to third-party collectors provided ARTLoan with sufficient capital for operations, including but not limited to salaries for Barreiro and Gaylord.
The Indictment alleges that through written and oral communications, Barreiro and Gaylord created the false and misleading appearance that ARTLoan was successfully engaging in debt financing agreements with third-party borrowers, generating regular monthly interest payments and increasing the overall value of each investor’s funds with ARTLoan. In truth, according to the Indictment, ARTLoan had not entered into any debt financing agreements, the monies obtained from investors had not been utilized to fund such debt financing agreements, ARTLoan had not secured artwork as collateral in connection with such debt financing agreements, and, the monies provided to investors as purported “interest payments” were, in fact, “Ponzi” payments designed to lull current investors as well as induce other potential investors to enter into loan agreements with ARTLoan.
Both defendants made their initial appearances on Friday, January 10, 2014, in federal court in Dallas, Texas. They made their initial appearance in federal court in San Jose, Calif., today in front of The Honorable Paul S. Grewal, United States Magistrate Judge. The defendants are currently out of custody on bond. Both defendants are scheduled to appear next on February 11, 2014 at 1:30 p.m. in front of The Honorable Howard R. Lloyd, United States Magistrate Court Judge for id of counsel and on February 12, 2014 at 9:00 a.m. in front of The Honorable Lucy H. Koh, United States District Court Judge in San Jose for status and setting.
An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, the Defendants face a maximum statutory penalty of twenty years imprisonment, a fine of $250,000 or twice the amount of gain or loss, whichever is greater, and restitution if appropriate, for each count of the indictment. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Timothy J. Lucey is the Assistant United States Attorney who is prosecuting the case with the assistance of Laurie Worthen. The prosecution is the result of a multi-year joint investigation by the Federal Bureau of Investigation and the United States Postal Inspection Service.
(Barreiro and Parker indictment)
San Fernando Valley Pastor Arrested for Running A Fraudulent Investment Scheme That Targeted Spanish-Speaking InvestorsRead the Press Release
LOS ANGELES – A Chatsworth man was arrested this morning by the U.S. Postal Inspection Service and the Federal Bureau of Investigation after being named in a federal grand jury indictment that charges him with running a multi-million dollar Ponzi scheme that targeted Latino victims.
Luis Alonso Serna, 61, who operated Architects of the Future Investments, which he purported to be a foreign currency investment company, was arrested this morning on federal charges that allege he ran a Ponzi scheme that lured more than 70 victims into investing almost $4 million.
“The Ponzi scheme is a century-old concept, but it remains a clear and present danger to the investing public,” said United States Attorney André Birotte Jr. “Cases like the one against Mr. Serna demonstrate the accuracy of the old adage that if it sounds too good to be true, it almost certainly is.”
Serna, the pastor of Zion Living Word Christian Center (formerly Amistad Cristiana) in San Fernando, was named in a superseding indictment returned on January 10. The indictment charges him with two counts of mail fraud, two counts of wire fraud and two counts of money laundering. Serna is expected to be arraigned on the indictment this afternoon in United States District Court in Los Angeles.
“The Postal Inspection Service has no shortage of Ponzi schemes to investigate, and this is another sad example of greed overcoming honest business practices,” said B. Bernard Ferguson, Inspector in Charge for the Los Angeles Division. “Relying on a reputation or relationship is not enough -- investors must still verify information, especially if there are claims of outperforming the market.”
According to the indictment, Serna claimed to be a successful investor, but he in fact operated a Ponzi scheme by soliciting funds from investors with false claims that their money would be used to purchase foreign currency. Serna allegedly promised to pay the victims monthly returns of up 20 percent. Serna and people working with him sometimes convinced victims to take liens on their homes to invest, according to prosecutors, who noted that many of those victims lost their homes and some declared bankruptcy.
Bill Lewis, the Assistant Director in Charge of the FBI’s Los Angeles Field Office, said: “The FBI is committed to pursuing criminals who prey upon the investing public through various methods, including sophisticated affinity-fraud schemes such as the one we're announcing today. Justice for the victims in this case can be attributed to the collaborative efforts of federal law enforcement.”
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until proven guilty in court.
If he is convicted, Serna would face a statutory maximum penalty of 20 years in federal prison for each of the four fraud charges and up to 10 years in prison for both of the money laundering counts.
This case was investigated by the United States Postal Inspection Service and the Federal Bureau of Investigation.
Release No. 14-005
Saline County Man Sentenced to 16 Years in Prison for Methamphetamine Related OffenseRead the Press Release
John David Clark, 48, of Harrisburg, Illinois, was sentenced today in United States District Court in Benton to 192 months in federal prison for possessing pseudoephedrine with the intent that it be used to manufacture methamphetamine, announced Stephen R. Wigginton, United States Attorney for the Southern District of Illinois. Clark was charged by a Federal Grand Jury in July 2013 with possessing the pseudoephedrine on June 25, 2013 in Saline County. He pled guilty to that offense on October 11th.
“Methamphetamine is a killer. It kills peoples’ abilities to function and it robs them of their future. Hopefully sentences like these will act to deter not only those who make meth, but those who would distribute such poisons in our communities.” said United States Attorney Wigginton.
Evidence supporting the guilty plea and sentence showed that Clark was involved for over a two year period with several other individuals in the manufacture and distribution of methamphetamine in and around Harrisburg. His possession of pseudoephedrine on that date, a necessary ingredient in the manufacturing process, was in furtherance of that overall scheme.
In addition to the 16 year term of imprisonment, Clark was ordered to pay fines and special assessments to the United States totaling $200, and was placed on a 3 year term of supervised release to follow his incarceration. Under federal law, parole has been abolished meaning that Clark will be required to serve a minimum of 85% of his prison sentence.
Clark has been held without bond in the custody of the United States Marshal since his arrest on the federal charges. He was returned to the Marshal’s custody to await designation to a Federal Bureau of Prisons facility. The case was investigated by the Carmi office of the Southern Illinois Drug Task Force and was prosecuted by Assistant United States Attorney James M. Cutchin.
Sacramento Man Indicted in Tax Refund SchemeRead the Press Release
SACRAMENTO, Calif. —A federal grand jury returned a 20-count indictment today charging Manuel Ruiz, 47, of Sacramento, with making false claims for tax refunds on federal income tax returns.
The indictment alleges that Ruiz made false claims on federal income tax returns that he filed on his own behalf and on behalf of eight other individuals for a total of $106,547.
Ruiz is scheduled for arraignment on February 6, 2014.
This case is the product of an investigation by the Internal Revenue Service, Criminal Investigation. Assistant United States Attorney Sherry Hartel Haus is prosecuting the case.
If convicted, Ruiz faces a maximum statutory penalty of up to five years in prison and a $250,000 fine on each count. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.
Rochester Man Sentenced in Large Tax Refund SchemeRead the Press Release
ROCHESTER, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that Juan Marie Delvalle, 26, of Rochester, N.Y., who was convicted of conspiracy to commit tax fraud in connection with a large nationwide tax refund scheme, was sentenced by U.S. District Court Judge David G. Larimer to 12 months in prison and ordered to pay restitution of $1,644,202 to the Internal Revenue Service.
Assistant U.S. Attorney Richard A. Resnick, who handled the case, stated that from February 1, 2011 to October 31, 2011, Delvalle was involved in a scheme to obtain income tax refunds by the filing of fraudulent federal income tax returns with the Internal Revenue Service. Specifically, stolen identities were utilized to file the fraudulent federal income tax returns, and the wages and related tax withholdings reported on the federal income tax returns were fabricated in order to obtain the refunds. Most of the returns were filed in the names and social security numbers of individuals residing in Puerto Rico without their knowledge. Refund checks issued as a result of the fraudulent returns were sent to various addresses in Rochester and other locations in the country.
Approximately 600 federal returns with Rochester area addresses were filed by a company in Bronx, New York. These 600 tax returns claimed tax refunds totaling $3,555,302 of which $1,644,202 was paid out by the IRS. The refund checks were sent by the IRS to various locations in the Rochester area. Delvalle participated in the scheme by retrieving many of the refund checks which were sent to Rochester and forwarding the money to individuals in the New York City area who were responsible for filing the false tax returns. The defendant was paid a fee for his participation in the scheme.
The sentencing is the culmination of a joint investigation on the part of the Federal Bureau of Investigation, under the direction of Special Agent in Charge Brian P. Boetig, and the Internal Revenue Service - Criminal Investigations, under the direction of Toni M. Weirauch, Special Agent in Charge.Remaining San Antonio Businessman Charged in Connection with $133 Million Real Dollar Loss Fraud and Tax Case Pleads GuiltyRead the Press Release
In San Antonio this morning, 61-year-old San Antonio businessman Larry W. Kimes pleaded guilty to his role in what is believed to be the largest real dollar loss fraud and tax related case ever prosecuted in the Western District of Texas announced United States Attorney Robert Pitman, FBI Special Agent in Charge Armando Fernandez and IRS-Criminal Investigation Special Agent In Charge Steve McCollough.
Appearing before United States Chief District Judge Fred Biery, Kimes, the manager of AccounTex Financial Services, LLC, pleaded guilty to a Klein tax fraud conspiracy charge and a mail fraud conspiracy charge. Kimes admitted that between 2002 and 2008, he and other co-conspirators stole more than $133 Million from the clients of a series of Professional Employer Organizations (PEOs) that he and co-defendant Charles Pircher operated. The PEOs controlled by Kimes and Pircher, which included Service Professionals, entered into staff leasing agreements with various client companies to manage the companies’ payroll and insurance programs. Kimes and co-conspirators diverted to their own use and benefit clients’ monies that should have been paid for payroll taxes and insurance premiums.
Kimes faces up to 20 years in federal prison on the mail fraud conspiracy charge and up to five years in federal prison on the Klein tax fraud conspiracy charge. Kimes also agreed that full restitution in this case amounts to $133,401,713. Sentencing has yet to be scheduled.
“This guilty plea brings to justice the six perpetrators of a scheme that stole over $133 Million from clients and taxpayers. The defendants, including Kimes, managed to conceal their crimes behind the complexity of the scheme. Through the hard work of FBI and IRS-CI agents and Tom McHugh in this office, the defendants’ crimes have been revealed and they will be held accountable,” stated United States Attorney Robert Pitman.
Kimes’ co-defendants—Pircher; John D. Walker, II; John Bean; Mike Solis; and, Pat Mire—are all scheduled to be sentenced on February 21, 2014, at 8:30am before Judge Biery.
This case was investigated by agents with the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigation. Assistant United States Attorney Thomas J. McHugh is prosecuting this case on behalf of the Government.Registered Child Sex Offender Pleads Guilty to Receipt of Child PornographyRead the Press Release
WILMINGTON, Del. – William Zimmerman, age 64, of Georgetown, Delaware, pled guilty today to Receipt of Child Pornography, in violation of federal law. Charles M. Oberly, III, United States Attorney for the District of Delaware, announced the guilty plea following a hearing in the United States District Court for the District of Delaware.
Zimmerman was previously convicted in Delaware of Unlawful Sexual Contact Second Degree in 1988 and Possession of Child Pornography in 1993. He served 4 years in prison for the child pornography offense, and was released from custody in 1997. At the time of the instant offense, he was registered as a sex offender as required by Delaware and federal law.
As a result of his prior convictions, Zimmerman faces enhanced sentencing penalties under federal law, including a mandatory minimum sentence of fifteen years, and a maximum sentence of forty years, in prison. Zimmerman also faces a term of supervised release of five years to life following his prison sentence, and he will be required to register as a sex offender in any U.S. jurisdiction in which he lives, works, or attends school. Zimmerman will be sentenced on April 22, 2014 by Chief United States District Judge Gregory M. Sleet.
According to statements made and documents filed in court, Zimmerman came to the attention of the Delaware Child Predator Task Force (the “Task Force”) after it began an investigation into two other registered child sex offenders living in Delaware. That investigation began in October 2012, after the Task Force received a cybertip from the National Center for Missing and Exploited Children (NCMEC). The cybertip reported that an AOL user, subsequently identified as Roger Cordero, a registered child sex offender from New Castle, Delaware, had uploaded files containing child pornography through an AOL server.
On December 20, 2012, Task Force officers executed a state search warrant at Roger Cordero’s New Castle residence, where they found computers containing thousands of images of child pornography featuring mostly prepubescent and adolescent children. They also found that Cordero had been trading child pornography with David Pennington, another registered child sex offender whom Cordero had met while both were incarcerated in the Smyrna Correctional Institution for child sex offenses. The men shared the images of child pornography by mailing digital photographs saved to thumb drives back and forth to one another.Later on the day of December 20, 2012, Task Force officers executed a state search warrant at Pennington’s Georgetown residence. Pennington, who was then wearing an electronic monitoring device due to a state probation violation, was present for the search. During the search, Task Force members recovered evidence relating to the mailing of child pornography and child sexual abuse stories between Pennington and Cordero. A Delaware State Police forensic examiner also recovered from Pennington’s cell phone two images of child pornography and related text messages between Pennington and Zimmerman. The images depicted a prepubescent boy engaged in a sex act with an adult male. During a January 2013 interview with Task Force detectives, Pennington told investigators that he received the two images of child pornography found on his cell phone from Zimmerman, whom Pennington had met in a child sex offender therapy group. Pennington also told investigators that he would go to Zimmerman’s house, where Zimmerman had a computer that they used to access child pornography.
On January 8, 2013, Task Force officers executed a state search warrant at Zimmerman’s Georgetown residence. They recovered several pieces of computer equipment found to contain hundreds of images of child pornography. The images featured children ranging in age from infancy to mid-teen being posed or engaged in sexual acts with adult males.
As intended by the United States Department of Justice’s Project Safe Childhood Program, federal and state child exploitation prosecutors and investigators have worked together to investigate and prosecute Zimmerman, Cordero and Pennington. On October 11, 2013, David Pennington was sentenced to 28 years in prison by Delaware Superior Court Judge T. Henley Graves after pleading guilty to Dealing in Child Pornography, in violation of Delaware law. On June 13, 2013, a federal grand jury indicted Roger Cordero on various child pornography crimes, including production, transportation, receipt and possession of child pornography, in violation of federal law. If convicted of the most serious charges, Cordero faces a mandatory minimum sentence of 35 years in prison, to a maximum sentence of 60 years in prison. Cordero’s case remains pending before the United States District Court for the District of Delaware.
All three cases were brought as part of the United States Department of Justice’s Project Safe Childhood Program, which was launched in May 2006 to combat the growing epidemic of online child sexual exploitation and abuse. Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who sexually exploit children, and to identify and rescue child victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about reporting online child exploitation to the national CyberTipline, visit the National Center for Missing and Exploited Children’s website at: www.missingkids.com.
This case is being investigated by the Delaware Child Predator Task Force and the United States Department of Homeland Security, Homeland Security Investigations. It is being prosecuted by Assistant United States Attorney Edward J. McAndrew.Quitman Man Indicted on Child Pornography Production ChargesRead the Press Release
MONROE, La. – United States Attorney Stephanie A. Finley announced today that a federal grand jury indicted Christopher Nixon, 21, of Quitman, La., Wednesday for production of child pornography.
According to the indictment, between February 1, 2012 and March 30, 2012, Nixon produced child pornography using a male under the age of 18. Nixon faces 15 to 30 years in prison, a fine of $250,000, and five years of supervised release for production of child pornography. He also faces forfeiture of the equipment used to produce and store the child pornography. A trial date will be set at a later date.
“This indictment was made possible by the tireless efforts of local, state and federal law enforcement agencies and the public who provided information sought in this case,” Finley stated. “I would like to thank all who are involved and dedicated to halting the production of child pornography in this district. The damage to victims that these crimes inflict cannot be calculated. This office will continue to prosecute these cases to the fullest extent of the law.”
“This case shows anyone who produces child pornography can and will be held accountable for their criminal actions regardless of where in the world the investigation leads or how much time has passed,” said Raymond R. Parmer Jr., Special Agent in Charge of HSI New Orleans. “Sexual abuse scars children for life, and HSI will continue to do all it can to identify the perpetrators of these horrendous acts and seek justice on behalf of their victims.”
An indictment is merely an accusation and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
Homeland Security Investigations, the Louisiana State Police, and the Jackson Parish Sheriff’s Office investigated the case. Assistant U.S. Attorney Earl M. Campbell is prosecuting the case.
Pittsburg Mother and Son Sentenced to Prison for Conspiring to File False Claims, Second Son Pleads Guilty to Impeding the IRS InvestigationRead the Press Release
OAKLAND – Yesterday, Tonya Gilard was sentenced to 37 months in prison and her son, Tierre Crummie, was sentenced to 15 months in prison and ordered to pay restitution in the amount of $688,687 for conspiring to file false tax returns. Kingsley Murdoch, who is also Gilard’s son, pleaded guilty to obstructing the IRS investigation, United States Attorney Melinda Haag and Internal Revenue Service, Criminal Investigation, Special Agent in Charge José M. Martinez announced.
According to Gilard’s and Crummie’s plea agreements, in January 2009, Gilard and Crummie assisted in filing false federal income tax returns with the IRS. Gilard obtained the personal identifying information of others, including Crummie, which she used to file false federal income tax returns. Gilard and Crummie also filed tax returns in their own names that falsely claimed entitlement to the first-time homebuyer’s credit.
In furtherance of the conspiracy, Crummie provided Gilard with individuals’ bank account information and e-mail addresses, while another person provided names to use on the false tax returns. On April 30, 2009, a search warrant was executed at the defendants’ residence. IRS agents uncovered $69,800 during the search, and found notebooks with names and personal identifying information of others. The evidence obtained during the course of the investigation also showed that Gilard filed the false returns from various locations, recruited others to join the scheme, and received the payments into bank accounts she controlled.
In total, 91 false federal income tax returns were filed as part of this scheme, claiming $688,687 in false refunds.
According to Murdoch’s plea agreement, in November 2009, he was interviewed by IRS Special Agents regarding tax returns filed with the IRS that listed his bank account to receive tax refunds. During the interview, he told the IRS Agents that he provided his bank account information and e-mail address to a person named “Spoogie.” Murdoch further stated that he provided names to “Spoogie” to include on tax returns that were filed with the IRS. He also said that he did not know Tonya Gilard or Tierre Crummie. In December 2009, he testified before the Grand Jury and provided false testimony in order to impede the investigation related to Gilard’s conduct according to his plea agreement.
Gilard, 45, and Crummie, 25, both of Pittsburg, Calif., were indicted on August 8, 2012, and charged with one count of conspiracy to file false claims. They pleaded guilty on May 9, 2013, to the sole count in the indictment.
Murdoch, 27, of Pittsburg, Calif., was charged on August 8, 2012, with Perjury and Obstruction of Justice. He pleaded guilty to one count of Obstruction of Justice. Murdoch’s sentencing is scheduled for May 8, 2014. The maximum statutory penalty for Obstruction of Justice, in violation of 18 U.S.C §1503(a), is 10 years in prison and a $250,000 fine.
Thomas Newman is the Assistant U.S. Attorney who is prosecuting this case. The prosecution is the result of an investigation by the Internal Revenue Service, Criminal Investigation.
(Gilard Indictment)
(Murdoch Indictment)
Pike County Man Sentenced to 15 Years in Prison for Receiving and Distributing Child PornographyRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced that a 49-year-old Dingmans Ferry resident who admitted to receiving and distributing child pornography during January through May of 2013, was sentenced today to serve 15 years in prison by U.S. District Court Judge Malachy E. Mannion.
According to United States Attorney Peter J. Smith, the defendant, Richard A. Lewis, pleaded guilty to the crime on September 5, 2013.
Lewis was indicted by a federal grand jury in May 2013 for using a computer to receive child pornography from a resident of Ontario, Canada, and distribute the child pornography to others.
The charge against Lewis resulted from an investigation by the Department of Homeland Security and the Ontario Provincial Police.
Judge Mannion also ordered that Lewis be placed on supervised release for life following his prison sentence. Lewis must also receive sex offender treatment and abide by sex offender registration requirements after his release from prison.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
The case was prosecuted by Assistant U.S. Attorney Francis P. Sempa.
Pearl Resident Pleads Guilty to Theft of Government FundsRead the Press Release
Jackson, Miss –Jason Zebert, 44, of Pearl, pled guilty in federal court on January 15, 2014 to theft of government funds, U.S. Attorney Gregory K. Davis announced today. Zebert, who worked as an attorney and fiduciary representing veterans, admitted stealing funds which had been entrusted to him by the Department of Veterans Affairs to spend solely on behalf of the veterans he represented.
The case was investigated by the Department of Veterans Affairs Office of Inspector General and prosecuted by Assistant U.S. Attorney Pat Lemon.
Zebert will be sentenced on April 25, 2014 and faces a maximum penalty of ten years in prison and a $250,000 fine.If you believe you have been a victim of fraud from a person or an organization soliciting relief funds on behalf of storm victims, contact the National Center for Disaster Fraud toll free at:
(866) 720-5721
You can also fax information to:
(225) 334-4707
or e-mail it to:
Making sure that victims of federal crimes are treated with compassion, fairness and respect.
Training and seminars for Federal, State, and Local Law Enforcement Agencies.
Help us combat the proliferation of sexual exploitation crimes against children.
Our nation-wide commitment to reducing gun crime in America.
Parmelee Man Sentenced for Child Related Sexual Abuse and Sexual ContactRead the Press Release
United States Attorney Brendan V. Johnson announced that a Parmelee, South Dakota, man convicted of Aggravated Sexual Abuse of a Minor, Abusive Sexual Contact of a Child, Aggravated Sexual Abuse of a Child, and Abusive Sexual Contact While Registered as a Sex Offender was sentenced on January 14, 2014, by U.S. District Judge Roberto A. Lange.
Randy Never Misses A Shot, age 49, was sentenced to 444 months in custody, 5 years of supervised release, and a $500 special assessment to the Federal Crime Victims Fund.
Never Misses A Shot was indicted by a federal grand jury on January 16, 2013. A Superseding Indictment was filed on March 13, 2013. On September 10, 2013, Never Misses A Shot appeared before the Honorable Roberto A. Lange for a jury trial. On September 12, 2013, a jury found him guilty on all charges.
The conviction stems from several incidents which occurred between January 1, 1993, and May 15, 2007, in which Never Misses A Shot sexually abused multiple victims under the ages of 12.
During the years of 1993 through 1997, Never Misses A Shot visited Child Victim A, a young relative, who was staying on the Rosebud Indian Reservation. While visiting her, Never Misses A Shot would sexually abuse her. In addition, Never Misses A Shot engaged in sexual acts with Child Victim A in a wooded area near the He-Dog housing community. As a result of this conduct, Never Misses A Shot was convicted of Aggravated Sexual Abuse of a Child and Abusive Sexual Contact of a Child.
In the summer of 2000, Never Misses A Shot was staying with relatives at a housing complex near Parmelee. While there, Never Misses A Shot sexually abused Child Victim B, another young relative. As a result of this conduct, Never Misses A Shot was convicted of Abusive Sexual Contact of a Child.
The final incident occurred over Mother’s Day weekend of 2007. Never Misses A Shot was on the Pine Ridge Indian Reservation, traveling with a woman and her young daughter, Child Victim C. They stopped at Pine Ridge for the weekend, and while there, Never Misses A Shot grabbed child victim C behind a trailer, forced her to the ground, and abused her in a sexual manner. As a result of this conduct, Never Misses A Shot was convicted of Abusive Sexual Contact of a Child and Abusive Sexual Contact of a Child While Required to Register as a Sex Offender.
This case was investigated by the Federal Bureau of Investigation, Rapid City Police Department, Sioux Falls Police Department, Rosebud Sioux Tribal Law Enforcement, Brooking Police Department, Jefferson County’s Sheriff’s Office, Washington, and the U.S. Marshals Service. Assistant U.S. Attorney Troy R. Morley prosecuted the case.
Never Misses A Shot was immediately turned over to the custody of the U.S. Marshals Service.
Owner of Forty Fort GM Foodmart Store Charged with Money LaunderingRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced that it has charged a 47-year-old Forty Fort businessman with conspiracy to commit money laundering related to the distribution of synthetic marijuana.
According to United States Attorney Peter J. Smith, his office filed a criminal Information yesterday against Mastan Mathan, charging him with conspiring to launder the proceeds of synthetic marijuana sales between October 2011 and July 2012.
The Information alleges that Mathan and/or his co-conspirators obtained synthetic marijuana from out-of-state suppliers; sold synthetic marijuana to customers from the GM Foodmart Store in Forty Fort; and deposited the proceeds of drug sales into at least two bank accounts in order to conceal the illegal nature of the proceeds and to promote the carrying on of the illegal drug business.
The charge against Mathan resulted from an investigation by the IRS Criminal Investigative Division, the Drug Enforcement Administration, and the Pennsylvania State Police.
If convicted of the charge, Mathan faces up to 20 years in prison and a $500,000 fine.
The case is being prosecuted by Assistant U.S. Attorney Francis P. Sempa.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilty is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
In this case, the maximum penalty under the federal statute is 20 years’ imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
Ottawa Man Sentenced to 15 YearsFor Methamphetamine TraffickingRead the Press Release
KANSAS CITY, KAN. An Ottawa man was sentenced Wednesday to 15 years in federal prison for trafficking in methamphetamine.
James New, 47, Ottawa, Kan., pleaded guilty to one count of conspiracy to distribute methamphetamine. In his plea, he admitted that from December 2010 to March 21, 2012, he and others conspired to distribute methamphetamine in Franklin County, Kan. When law enforcement officers stopped his car on March 21, 2012, they seized methamphetamine, scales, plastic baggies and more than $22,000 in cash. Investigators learned that New was spending $10,000 for 10 ounces of methamphetamine twice a week and distributing to customers in Franklin County.
Co-defendants include: Jessica Blackstone, who was sentenced to 116 months in federal prison.
Nicholas Griffin, who was sentenced to 75 months.Grissom commended the Franklin County Drug Enforcement Unit and Assistant U.S. Attorney Sheri McCracken for their work on the case.
Oklahoma City Man Pleads Guilty to Child Sex Trafficking/Exploitation ChargeRead the Press Release
TULSA, Okla. — An Oklahoma City man pleaded guilty in federal court today to charges stemming from a sex trafficking sting conducted by the Tulsa Police Department’s Vice Unit, announced United States Attorney Danny C. Williams, Sr.
Ronald Everett Spivey, Jr, 47, of Oklahoma City, pleaded guilty to Attempted Coercion and Enticement of a Minor before United States District Court Judge Claire V. Eagan. A federal grand jury had previously returned a four-count Superseding Indictment in December 2013, charging Spivey with various trafficking and child exploitation related violations. Kimberly Haven, a co-defendant, previously pled guilty to Interstate Transportation and Racketeering charges stemming from the same investigation. She will be sentenced on January 30, 2013.
During the Summer of 2013, Spivey and his co-defendant, Kimberly Haven, worked together in a commercial sex trafficking venture, during which they attempted to recruit and prostitute a female under 18 years of age. In late July of 2013, Spivey and Haven traveled from Oklahoma City to Tulsa for the purpose of recruiting for their prostitution business a girl whom Spivey believed to be 17 years of age. In actuality, Spivey was communicating with an undercover Tulsa Police Department officer. Spivey exchanged multiple text messages with the undercover officer in which he asked her birthday and even offered to take her to Vegas or Florida to work for him and make money. On July 31, 2013, Spivey and Haven were arrested in Tulsa at a location where they had arranged to meet the “17 year old girl.”
Spivey faces a statutory mandatory minimum of 10 years imprisonment up to life and a fine of $250,000. His sentencing hearing is set for April 17, 2014.
The Tulsa Police Department in coordination with Oklahoma City Police Department investigated this case. Assistant United States Attorneys R. Trent Shores and Clinton J. Johnson prosecuted this matter on behalf of the United States.
“We will continue to aggressively prosecute those who seek to traffic and exploit teenaged girls in the Northern District of Oklahoma. I commend the Tulsa Police Department’s Vice Unit for their excellent work in investigating this matter,” stated United States Attorney Williams.
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."
Oil Well Operators in Hart County, Kentucky Sentenced for Violations of the Safe Drinking Water ActRead the Press Release
BOWLING GREEN, Ky. – Two oil well operators in Hart County, and Logsdon Valley Oil Co. Inc., were sentenced today in United States District Court by Senior Judge Joseph H. McKinley Jr., for continued violations of the Safe Drinking Water Act, announced David J. Hale, United States Attorney for the Western District of Kentucky.
Charles L. Stinson, 75, of Horse Cave, Kentucky, and Ralph Dowell, 75, of Edmonton, Kentucky, operators of Logsdon Valley Oil Co. Inc., were sentenced to two years’ probation. Stinson and Logsdon Valley Oil Co. Inc., were ordered to pay fines for the continued conspiracy to inject fluids, without a permit, into sinkholes and wells, located in Hart County, Kentucky, from March 13, 2008 through July 18, 2012, in violation of the Safe Drinking Water Act.
According to the plea agreement, Stinson and Logsdon Valley Oil Co. Inc., agreed to a fine of $45,000 to be paid at sentencing. According to the terms, Stinson was to pay the fine personally, with $25,000 paid to the Commonwealth of Kentucky, $10,000 to the Environmental Protection Agency, and $10,000 to the United States. Also, as part of the terms, Stinson agreed to provide adequate documentation to EPA that the Stinson #6 (the well used for illegal injection) is plugged and abandoned in such a manner that protects underground sources of drinking water from contamination.
Stinson and Dowell were charged in an eight count federal Superseding Indictment, on August 15, 2012, with conspiring to violate the Safe Drinking Water Act. They pleaded guilty to violating a requirement of an applicable underground injection control program. Specifically, they configured piping to inject produced brine water (fluids brought to the surface in connection with oil production) from the tank battery to sinkholes, and injected produced brine water into a sinkhole, and conveyed fluids into sinkholes, in violation of the Safe Drinking Water Act, Title 42, United States Code, Section 300h-2(b)(2) and Title 40, Code of Federal Regulations, Section 144.11.
In furtherance of the conspiracy, on May 24, 2010, the defendants improperly conveyed fluids into a sinkhole at the Carter-Cheney (McGee) lease; and on May 24, 2010, they improperly conveyed fluids into sinkholes on Payton #7 East lease, both located in Hart County, Kentucky.
“America’s environmental laws are designed to protect clean and safe water sources,” said Maureen O’Mara, Special Agent in Charge of EPA’s criminal enforcement program in Kentucky. “The defendants ignored orders to stop discharging hazardous wastewater into a nearby sinkhole, thereby threatening groundwater quality by allowing harmful materials to enter below-ground aquifers. Today’s sentencing demonstrates that EPA and its partner agencies will actively pursue those who flout environmental laws designed to protect the public.”
The case was prosecuted by Assistant United States Attorney Joshua Judd, and it was investigated by the United States Environmental Protection Agency/Criminal Investigations Division and the Kentucky Department of Environmental Protection.
Ohio Woman Sentenced to 27 Months in Prison for Submitting More Than $164,000 of False Insurance Claims to the U.S. Postal Service-Falsely Claimed That Parcels Were Damaged or Lost in the Mail-Read the Press Release
WASHINGTON – Levette J. Douglas, 35, of Toledo, Ohio, was sentenced today to a 27-month prison term for her role in a scheme that defrauded the U.S. Postal Service out of more than $164,000 through the submission of false insurance claims.
The sentencing, which took place in the U.S. District Court for the District of Columbia, was announced by U.S. Attorney Ronald C. Machen Jr. and Paul L. Bowman, Special Agent in Charge, Capital Metro Area Field Office, U.S. Postal Service, Office of the Inspector General.
Douglas pled guilty in October 2013 to a charge of conspiracy to commit mail fraud. As part of the plea agreement, Douglas agreed to pay $164,859 in criminal forfeiture and restitution. She was sentenced by the Honorable Rudolph Contreras. Upon completion of her prison term, Douglas will be placed on three years of supervised release.
According to the government’s evidence, from April 2010 to July 2013, Douglas and her co-conspirators submitted false claims to the Postal Service for allegedly damaged or lost parcels. As part of this scheme, Douglas and others purchased insurance for approximately 325 parcels that were sent through the mail. They later falsely claimed that the parcels were damaged or lost, often submitting forged or fictitious documents to support their claims.
For example, on one occasion, Douglas submitted a false affidavit purporting to be from a postal letter carrier in support of a claim that a parcel was not delivered. The affiant, allegedly a postal letter carrier with the initials M.M., stated that she had not delivered any parcels to the recipient for several months. The affiant also provided a phone number in case there were questions. That phone number was Douglas’s phone number. In fact, the parcel in question was delivered and the recipient signed a delivery receipt.
As a final part of this scheme, Douglas also mailed to the Postal Service’s accounting department forged internal postal forms purporting to be from Postal Service employees verifying the false claims. In total, the Postal Service paid $164,859 based on these false claims.
In announcing the sentence, U.S. Attorney Machen and Special Agent in Charge Bowman commended the investigative work of Special Agent Jason Manning of the U.S. Postal Service Office of Inspector General. They also praised the efforts of those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialists Corinne Kleinman and Nicole Wattelet; Criminal Investigator Matthew Kutz; Assistant U.S. Attorney Diane Lucas, who worked on forfeiture issues, and Assistant U.S. Attorney David Johnson, who prosecuted the case.
14-011Ninnekah Woman to Serve 24 Months in Prison and Pay over $227,000 in Restitution for Embezzlement from EmployerRead the Press Release
Oklahoma City, Oklahoma – Pamela D. Mills, 53, of Ninnekah, Oklahoma, was sentenced today by Chief United States District Court Judge Vicki Miles-LaGrange to serve 24 months in federal prison for embezzlement from her employer, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma. In addition, Mills was ordered to pay $227,015.07 in restitution to her former employer.
According to court records, Mills was employed by Gerald Welding Fabrication and Construction Company for approximately six years and was responsible for handling the accounts payable and receivable. Although she was not authorize to sign the company checks, Mills prepared checks for payment of the company bills, including the payment of credit card bills. From December of 2008 through August of 2012, Mills prepared checks for her manager to sign which included checks to Capitol One for the payment of her personal credit card statements.
On July 29, 2013, Mills pled guilty to a one-count Information charging her with operating a mail fraud scheme. Mills was ordered to report to federal prison to begin serving her sentence on February 18, 2014.
This case was the result of an investigation conducted by the Federal Bureau of Investigation and was prosecuted by Assistant U.S. Attorney Kerry A. Kelly.
New York-Based Hair Product Companies That Violated Bank Secrecy Act Agree to Pay $15 Million, Make Compliance Reforms in Settlement with New Jersey U.S. AttorneyRead the Press Release
Companies Failed to Report Millions In Cash From Customers
NEWARK, N.J. – Shake-N-Go Fashion Inc., and Model Model Hair Fashion Inc. – wholesale hair product companies based in Port Washington, N.Y. – entered into an agreement today to resolve claims brought by the New Jersey U.S. Attorney’s Office that they enabled the structuring of cash transactions to avoid reporting requirements in violation of the Bank Secrecy Act (BSA), announced U.S. Attorney Paul J. Fishman.
After an investigation conducted by the U.S. Attorney’s Office and U.S. Immigration and Customs Enforcement, Homeland Security Investigations (HSI), the companies – referred to together in court documents as “SNG” – have agreed to forfeit $15 million and to enact a number of compliance reforms as part of the settlement. The settlement agreement and forfeiture complaint were filed today in Newark federal court.
“It doesn’t matter what your business is; you are required to follow the financial reporting requirements of the United States,” said U.S. Attorney Fishman. “Shake-N-Go learned that the hard way, forfeiting millions and enacting stringent compliance reforms as a result of the government’s investigation. Criminals structure cash transactions to hide all manner of illegal activity, and businesses must be vigilant to be sure they are not providing the haven for doing so.”
According to documents filed in this case: SNG willfully engaged in business practices that permitted customers to conduct cash transactions with SNG of more than $10,000 while avoiding the filing of mandatory forms documenting those transactions with the United States Department of the Treasury.
The BSA requires financial institutions involved in cash transactions in amounts greater than $10,000 to file Currency Transaction Reports (CTRs) for each transaction. Similarly, businesses that receive more than $10,000 in cash in one or related transactions are required to file an IRS 8300 form. Many individuals involved in illegal activities, such as tax evasion and money laundering, are aware of these reporting requirements and take active steps to cause financial institutions and businesses to fail to file the necessary forms. These active steps are usually referred to as “structuring,” which is a violation of the BSA.
Although SNG never knowingly received illicit funds, SNG permitted and enabled its customers and employees to structure millions of dollars in cash transactions into SNG’s bank accounts without the filing of CTRs, broke up customer invoices totaling more than $10,000 and willfully failed to file a single 8300 form prior to the government’s investigation.
In 2012, SNG had over $300 million in gross sales receipts. Of that amount, approximately $80 million was made in the form of cash deposits.
Beginning in 2007, SNG instituted a policy that permitted its customers to purchase hair products by depositing cash directly into SNG’s bank accounts. This policy enabled SNG’s customers to regularly structure cash deposits into SNG’s accounts. SNG’s employees also structured funds into SNG’s accounts after collecting the funds from customers. SNG employees were instructed not to issue an invoice or receipt that exceeded $10,000, even when a customer ordered more than $10,000 in hair products at one time.
In addition to the forfeiture, SNG has agreed to implement a number of remedial measures: SNG has appointed and will continue to engage a general counsel to oversee and consult on all legal and compliance issues. SNG will also retain a qualified independent consulting firm, as approved by the United States, to oversee the implementation of a BSA compliance program and SNG’s continued compliance with that program and the terms of SNG’s agreement with the United States.
For a two-year period from the date of the filing of the Complaint, SNG will: provide quarterly reports to the United States, to be authored by the independent consulting firm, describing the state of SNG’s compliance program; appoint a qualified individual, approved by the United States, to serve as a senior level executive to oversee all day-to-day compliance issues – removing that responsibility from the Chief Financial Officer; and establish and enforce written policies on how to receive and process cash payments and how to otherwise comply with the BSA, including the timely filing of any and all 8300 forms.
SNG will also implement mandatory employee training on BSA compliance; will not permit its customers to deposit cash directly into accounts controlled by SNG; and will agree to cooperate with any and all future investigations by the United States and/or other state and local authorities.
The $15 million forfeiture amount includes $2,502,218 previously seized by the United States from SNG on June 25, 2013, and an additional $9,497,782 that SNG has surrendered pursuant to the agreement. As part of that nearly $9.5 million, individual shareholders of SNG have contributed $6 million as claw-backs of profit distributions. Recognizing the extensive costs associated with the remedial measures, the United States has agreed to provide a $3 million credit to SNG. However, in the event that SNG knowingly fails to comply with the agreement, SNG has agreed to surrender that $3 million to the United States.
U.S. Attorney Fishman credited special agents from HSI’s El Dorado Task Force, under the direction of Special Agent in Charge James T Hayes Jr., New York Field Office.
The government is represented by Assistant U.S. Attorneys Evan S. Weitz of the U.S. Attorney’s Office Asset Forfeiture and Money Laundering Unit and Aaron Mendelsohn of the office’s Economic Crimes Unit in Newark.14-022
Defense counsel: Alex Lipman Esq., New YorkShake-N-Go Complaint
Shake-N-Go SettlementNew Hampshire Resident Pleads Guilty to Armed Bank Robbery ChargesRead the Press Release
Contact: Donald E. Clark
Assistant United States Attorney
Tel: (207) 780-3257Portland, Maine: United States Attorney Thomas E. Delahanty II announced today that
Marvin Eugene Ansteth, Jr. 40, of Somersworth, New Hampshire pled guilty in U.S. District
Court in Portland to armed bank robbery charges. The charges arise from the armed bank robberies of Peoples United Bank in Exeter, New Hampshire on October 7, 2013; of Meredith
Village Savings Bank in Alton, New Hampshire on October 10, 2013; and of Kennebunk
Savings in Eliot, Maine on October 19, 2013.According to court records, Ansteth was the getaway driver for the three armed bank robberies. Peoples United Bank was robbed of $1,451; Meredith Village Savings Bank was robbed of $9,740 and Kennebunk Savings was robbed of $7,896.
Ansteth faces up to 25 years in prison and a $250,000 fine, or both, for each robbery. He will be sentenced after the completion of a presentence investigation report by the United States
Probation Office.This case was investigated by the Federal Bureau of Investigation, the Maine State
Police, and the Eliot, Kittery, Sanford, Berwick, York, Maine and Exeter, Somersworth, Alton and Pembroke, New Hampshire police departments. U.S. Attorney Delahanty praised the cooperation among these law enforcement agencies noting that "these armed bank robberies were quickly solved because local, state, county and federal law enforcement agencies across two states worked closely together."Nassau County Man Arrested on Federal Charges of Producing Child PornographyRead the Press Release
Jacksonville, Florida – Acting United States Attorney A. Lee Bentley, III announces the arrest and charge by criminal complaint of John Dewey Todd (60, Fernandina Beach) for producing and attempting to produce child pornography. If convicted, he faces a mandatory minimum sentence of 15 years, up to 30 years in federal prison.
According to the complaint, U.S. Immigration and Customs Enforcement's Homeland Security Investigations and Jacksonville Sheriff’s Office executed a search warrant at the residence of Todd on November 15, 2013, in Fernandina Beach, Florida. During the execution of the warrant, Todd voluntarily spoke with law enforcement and admitted to collecting child pornography for the past “couple years.” Todd explained that he saves his child pornography on two computers, discs, thumb drives and external hard drives. Law enforcement seized electronic media during their search and a preliminary examination of some of the seized materials revealed that they contained at least 12,000 files of child pornography.
During a forensic examination of one thumb drive seized during the search, law enforcement recovered three videos of suspected child pornography. Two of the videos depict Todd adjusting a video camera that appears to be concealed in a plant or planter, focused on a bathtub. Two minor, prepubescent females are recorded with their genitalia displayed.
A criminal complaint is merely a formal charge that a defendant has committed a violation of the federal criminal laws, and every defendant is presumed innocent unless, and until, proven guilty.
The case was investigated by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI) and the Jacksonville Sheriff's Office, with the assistance from the Nassau County Sheriff’s Office. It is being prosecuted by Assistant United States Attorney Kelly S. Karase.
It is another case 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 (CEOS), 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.projectsafechildhood.gov. For more information about internet safety education, please visit www.projectsafechildhood.gov and click on the tab "other resources."
Michigan Man Sentenced for Stealing Trade SecretsRead the Press Release
A former employee of Wacker Chemical Corporation, whose American facilities are located in Adrian, Michigan, was sentenced today to 24 months in federal prison after having pleaded guilty to stealing trade secrets from that company and disclosing them to KCC Silicones, a Korean-based chemical company, announced U.S. Attorney Barbara L. McQuade.
McQuade was joined in the announcement by Paul Abbate, Special Agent in Charge of the Detroit Field Office of the Federal Bureau of Investigation.U.S. District Judge Patrick J. Duggan imposed sentence on Michael Agadoa, 62 of Midland and also ordered that he pay a fine of $7,500.00.
According to the factual basis offered to support the plea, Michael Agadoa worked for Wacker as an engineer for a number of years and left the company’s employment in 1997. Agadoa admitted that he took numerous formulas used in the production of silicone-based and rubber products sold by Wacker when he left. In early 2010, as he was negotiating employment with KCC, Agadoa provided copies of the Wacker formulas to KCC. Later, from March of 2010 to April of 2012, while Agadoa was employed by KCC, he used stolen Wacker formulas to assist KCC in the development of silicone-based products.
"This defendant has admitted to stealing formulas from a chemical company, which invested time, effort and money to develop these trade secrets," McQuade said. "Stealing trade secrets harms Michigan businesses and costs jobs. We are committed to protecting Michigan's technology, and we hope that this prosecution will send a message that stealing proprietary information from an employer or competitor is a serious crime."“Theft of trade secrets and commercial innovations is a serious criminal offense, whether prompted by personal greed or a desire to exploit shortcuts to economic and technological pre-eminence,” stated Mr. Abbate. “These criminal acts negatively impact U.S. industry and the hard-working people and businesses of Michigan. The FBI will continue to work with our partners to bring these criminals to justice and send a message that they will be held accountable for this type of illegal conduct."
U.S. Attorney McQuade thanked the FBI for the successful investigation of the case.
Mccomb Woman Pleads Guilty to Possession with Intent to Distribute Crack CocaineRead the Press Release
Jackson, Miss – Latoya Renae Bonds, 30 of McComb, pled guilty on Wednesday, January 15, 2014, to possession with intent to distribute cocaine base (“crack”), announced U.S. Attorney Gregory K. Davis. She will be sentenced on April 25, 2014 and faces a maximum sentence of 20 years in prison and a $1,000,000.00 fine.
Bonds was indicted along with co-defendants Jermaine Henderson and Craig Lemark Kaho. Henderson and Kaho are charged with conspiracy to possess with intent to distribute more than 280 grams of cocaine base and attempted possession with intent to distribute cocaine base. They are scheduled for trial on March 3, 2014 before U.S. District Judge Carlton W. Reeves.
This case is the result of an investigation carried out by the Mississippi Bureau of Narcotics and the Drug Enforcement Administration with assistance from the U.S. Marshals Service and Mississippi Highway Patrol. The investigation, dubbed “Operation the Night the Lights went out in PG”, infiltrated an organization that was distributing cocaine base in Southwest Mississippi. Assistant U.S. Attorney Erin Chalk is prosecuting the case.If you believe you have been a victim of fraud from a person or an organization soliciting relief funds on behalf of storm victims, contact the National Center for Disaster Fraud toll free at:
(866) 720-5721
You can also fax information to:
(225) 334-4707
or e-mail it to:
Making sure that victims of federal crimes are treated with compassion, fairness and respect.
Training and seminars for Federal, State, and Local Law Enforcement Agencies.
Help us combat the proliferation of sexual exploitation crimes against children.
Our nation-wide commitment to reducing gun crime in America.
Maryland Man Sentenced to More Than Eight Years in Prison for Traveling to the District of Columbia to Have Sex with Under-Aged ChildRead the Press Release
WASHINGTON - John Vanathayan, 42, of Silver Spring, Md., was sentenced today to 100 months in prison for traveling interstate to engage in illicit sexual conduct with a minor, announced U.S. Attorney Ronald C. Machen Jr., Valerie Parlave, Assistant Director in Charge of the FBI's Washington Field Office, and Cathy L. Lanier, Chief of the Metropolitan Police Department (MPD).
Vanathayan pled guilty in November 2012 in the U.S. District Court for the District of Columbia and was sentenced today by the Honorable Amy Berman Jackson. Upon completion of his prison term, Vanathayan will be placed on 10 years of supervised release.
According to the government's evidence, on July 19, 2012, Vanathayan contacted a citizen on a telephone chat line. During the course of the conversation, Vanathayan requested that the citizen provide a female child, between the ages of six and nine, for the purpose of sex. The citizen agreed to try to comply with the request. Instead, the citizen contacted MPD and reported the communication. An MPD officer, along with FBI's Child Exploitation Task Force, began to investigate. During the course of the investigation, Vanathayan arranged with the citizen to meet for the purpose of engaging in sexual acts with a child. On July 20, 2012, Vanathayan traveled from Silver Spring to a pre-arranged meeting place in Washington, D.C. When Vanathayan arrived at the meeting place, he was arrested.
This case was brought as part of the Department of Justice's Project Safe Childhood initiative and investigated by the FBI's Child Exploitation Task Force, which includes members of the FBI's Washington Field Office and MPD.
Project Safe Childhood is a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute people who exploit children, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov
In announcing the sentence, U.S. Attorney Machen, Assistant Director Parlave and Chief Lanier praised the MPD Detectives and Special Agents of the FBI Child Exploitation Task Force. They also commended Assistant U.S. Attorney Julieanne Himelstein, who prosecuted the case, and Legal Intern Matthew Kerr, who provided assistance.
14-013Manhattan U.S. Attorney Announces Forfeiture of $28 Million Worth of Bitcoins Belonging to Silk RoadRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, today announced the forfeiture of approximately 29,655 Bitcoins (which, at today’s Bitcoin exchange rate, are worth approximately $28 million) that were seized from the Silk Road server, as well as the forfeiture of the Silk Road hidden website. The Silk Road hidden website and the Bitcoins that were forfeited yesterday had been seized in connection with the civil forfeiture action previously filed in Manhattan federal court on September 30, 2013, seeking the forfeiture of all assets of Silk Road, including its website and all of its Bitcoins because those assets allegedly were used to facilitate money laundering and constitute property involved in money laundering. In addition to the civil action, a criminal Complaint against Ross William Ulbricht, a/k/a “Dread Pirate Roberts,” a/k/a “DPR,” a/k/a “Silk Road,” the alleged owner and operator of the Silk Road hidden website, was filed in September 2013 in Manhattan federal court charging him with one count of narcotics conspiracy, one of count of conspiracy to commit computer hacking, and one count of money laundering conspiracy. The forfeiture order was signed yesterday by United States District Judge J. Paul Oetken.
Manhattan U.S. Attorney Preet Bharara said: “With today’s forfeiture of $28 million worth of Bitcoins from the Silk Road website, a global cyber business designed to broker criminal transactions, we continue our efforts to take the profit out of crime and signal to those who would turn to the dark web for illicit activity that they have chosen the wrong path. These Bitcoins were forfeited not because they are Bitcoins, but because they were, as the court found, the proceeds of crimes.”
The Silk Road hidden website was designed to enable its users to buy and sell illegal drugs and other unlawful goods and services anonymously and beyond the reach of law enforcement. In connection with the civil forfeiture action, and in addition to the Bitcoins that were forfeited yesterday, the Government seized an additional 144,336 Bitcoins (which, at today’s Bitcoin exchange rate, are worth over $130 million) that were found on computer hardware belonging to Ulbricht. Ulbricht has filed a claim in the civil forfeiture action, asserting that he is the owner of the Bitcoins found on his computer hardware, and contesting the forfeiture of those Bitcoins.
The prosecution of this case is being handled by the Office’s Complex Frauds Unit. Assistant United States Attorney Serrin Turner is in charge of the prosecution, and Assistant United States Attorney Christine Magdo is in charge of the forfeiture aspects of the case.
The charges contained in the criminal Complaint against Ulbricht are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
U.S. v. Silk Road Partial Default Judgment and Order of Forfeiture
Manhattan U.S. Attorney Announces Charges Against Former Warehouse Manager of A Prescription Drug Wholesale Distribution Company for False Prescription Drug Pedigree Scheme Involving More Than $49 Million Worth of Diverted Prescription DrugsRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and George Venizelos, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of a criminal complaint (the “Complaint”) against STEPHEN COX, the former warehouse manager of a prescription drug wholesale distribution company (the “Wholesaler”), for his alleged participation in a scheme to falsify pedigrees for prescription drugs sold to pharmacies all over the country, including at least six pharmacies in New York City. The prescription drugs were diverted from illegal sources and made to appear, through pedigrees falsely documenting their transaction histories, as though they were obtained legitimately from authorized distributors through licensed wholesalers. The defendant allegedly, through the Wholesaler, based in St. George, Utah, conspired with others to sell to pharmacies more than $49 million worth of illegally obtained prescription drugs through several wholesale distribution companies controlled by co-conspirators, some of whom have pled guilty pursuant to cooperation agreements with the Government. COX surrendered to the FBI this morning in New York City in connection with the charges announced today and was presented in Manhattan federal court before U.S. Magistrate Judge Ronald L. Ellis this afternoon.
The Complaint is a result of the continuing investigation into a scheme that defrauded Medicaid out of more than $500 million through the diversion of prescription drugs. On July 17, 2012, 48 defendants were charged in connection with United States v. Viera, et al., 11 Cr. 1072 (DLC), all but five of whom have been arrested and have pled guilty.
Manhattan U.S. Attorney Preet Bharara said: “As alleged, in his position as a warehouse manager for a prescription drug wholesaler, defendant Stephen Cox played an integral role in a multimillion-dollar prescription drug diversion scheme by helping his employer to falsify the pedigrees of second-hand prescription drugs and dispense them to pharmacies across the country. People in need of medicine walk into a pharmacy to untainted, safe prescription drugs; they should not walk out with black market pills, a risk the alleged conduct makes very real.”
FBI Assistant Director-in-Charge George Venizelos said: “Every operation has a conductor whose job it is to ensure all players work together and all parts are delivered on time. As alleged, Stephen Cox acted as a conductor in this massive Medicaid fraud, working with his co-conspirators to manage the shipment and delivery of illegally obtained prescription drugs to the tune of more than $49 million. By providing advice on how to falsify required FDA documents, he continued to defraud the Medicaid system, which is funded by tax dollars to provide healthcare to lower income individuals, and put at risk those unwitting customers who would eventually purchase these secondhand pills. The FBI remains committed to working with our law enforcement partners on our Health Care Fraud Task Force to ensure the public’s safety and investigate those who seek to defraud government program.”
The following allegations are based on the Complaint and other publicly filed documents in the Viera case:
For years, a large network of individuals operated a nation-wide scheme to illegally launder and resell second-hand prescription drugs (typically HIV/AIDs drugs) purchased from Medicaid beneficiaries on street corners and out of bodegas in and around New York City. The drugs had been dispensed in manufacturers’ bottles with pharmacy patient labels affixed to them. Once they purchased the second-hand drugs, the conspirators, who often held the drugs in uncontrolled and unsanitary conditions, used solvents to dissolve the adhesive on the patient labels to remove them and make the bottles look like new bottles, straight from the manufacturer. Once enough bottles were collected, the New York-based conspirators sold them, through Florida-based groups, to individuals in Texas, who operated several corrupt wholesale companies, such as those identified in the Complaint.
The Wholesaler, through COX and others, purchased more than $49 million worth of prescription drugs that they knew had been purchased illegally by the corrupt wholesale companies run from Texas. COX and others then sold them to unsuspecting pharmacies all over the United States, including to some pharmacies in New York City, which, in turn, sold and dispensed the second-hand drugs to unsuspecting patients who were unaware that their medications had previously been dispensed and may have had diminished efficacy or contained contaminants.
Federal law requires prescription drug wholesalers to create and maintain transaction histories, or “pedigrees,” that correctly document each transaction involving prescription drugs. COX and an uncharged co-conspirator who owned the Wholesaler (“CC-1”) instructed co-conspirators affiliated with the corrupt wholesale companies how to falsify these pedigrees to create paperwork that concealed from FDA inspectors and pharmacies purchasing the drugs that the drugs were illegally obtained and previously had been dispensed. Backed by these false pedigrees, the Wholesaler sold illegally obtained prescription drugs to pharmacies all over the country, including to the six in Manhattan and the Bronx referred to in the Complaint.
From at least 2009 through November 4, 2011, STEPHEN COX, the defendant, worked for CC-1 at the Wholesaler as its warehouse manager. At the Wholesaler, COX received by fax from co-conspirators lists of prescription drugs available from unlicensed sources. COX communicated with co-conspirators concerning orders and shipments of prescription drugs from unlicensed sources, and passed along instructions to co-conspirators concerning how to construct false pedigrees. At the Wholesaler and at two subsequent corrupt wholesale distribution companies, COX received and inspected shipments of prescription drugs from unlicensed sources and facilitated the sale of those drugs to pharmacies all around the country, ultimately to be dispensed to unsuspecting patients. COX is the first individual associated with a wholesale distribution company that sold directly to pharmacies to be charged as part of this ongoing investigation.
COX, 34, of Sugarland, Texas, is charged with one count of conspiracy to defraud the United States, falsify pedigrees, and commit misbranding offenses, which carries a maximum sentence of five years in prison. He is also charged with six counts of pedigree falsification relating to prescription drugs the Wholesaler sold to six pharmacies in Manhattan and the Bronx, each of which carries a maximum sentence of three years in prison.
Mr. Bharara praised the efforts of the FBI’s Health Care Fraud Task Force. The New York FBI Health Care Fraud Task Force was formed in 2007 in an effort to combat health care fraud in the greater New York City area. The task force is comprised of agents, officers, and investigators from the FBI, New York City Police Department, the New York State Insurance Fraud Bureau, U.S. Department of Labor, U.S. Office of Personnel Management Inspector General, U.S. Food and Drug Administration, New York State Attorney General’s Office, New York State Office of Medicaid Inspector General, New York State Health and Hospitals Inspector General, and the National Insurance Crime Bureau.
The case is being prosecuted by the Office’s Organized Crime Unit. Assistant U.S. Attorneys Jason A. Masimore, Russell Capone, and Edward B. Diskant are in charge of the prosecution. Assistant U.S. Attorney Alexander Wilson of the Office’s Asset Forfeiture Unit is responsible for the forfeiture of assets.
The charges contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
U.S. v. Stephen Cox Complaint
Manhattan Physician Pleads Guilty to Unlawfully Prescribing Prescription DrugsRead the Press Release
TOPEKA, KAN. A Manhattan, Kan., physician pleaded guilty today to unlawfully prescribing prescription drugs, U.S. Attorney Barry Grissom said.
Michael P. Schuster, 54, Manhattan, Kan., pleaded guilty to one count of conspiracy to distribute controlled substances.
In his plea, Schuster admitted the crime occurred from April 2007 to Aug. 2012, while he was doing business as Manhattan Pain and Spine at 1135 Westport Drive in Manhattan. To carry out daily operations at his clinic he employed up to 12 office staff members at a time, none of whom had lawful authority to distribute controlled substances. He directed and allowed staff members to distribute controlled substances to his patients using blank prescription pads he had signed in advance.
Investigators documented approximately 540 patients who received prescriptions for controlled substances while Schuster was out of his office, including times when he was traveling to Canada, Russia, South Africa, Uruguay, New York, Argentina, Chile, Paraguay, Brazil and Israel.
Sentencing is set for April 7. Both parties have agreed to recommend a sentence of five years in federal prison, restitution of $100,772 and a fine of $25,000. He also has agreed to forfeit his clinic building at 1135 Westport Drive, a 2012 Ford pickup and more than $11,000 contained in two bank accounts. In addition, he agreed to a forfeiture money judgment of $400,000.
In addition, Schuster also agrees to surrender his medical license, not to re-apply for a medical license in Kansas, to surrender his DEA registration number for prescribing controlled substances and not to re-apply for a DEA registration number.
According to court documents, the investigation began early in 2012 when the Riley County Police Department received reports that Schuster was issuing prescriptions for high dosages of scheduled drugs based on minimal or cursory physical examinations.
Grissom commended the Riley County Police Department; the FBI; the Department of Defense, Criminal Investigative Service (DCIS); the Department of Health and Human Services, Office of Inspector General (HHS-OIG); the Drug Enforcement Administration (DEA); the Department of Homeland Security - Homeland Security Investigations (DHS-HSI); the Diplomatic Security Service (DSS), Assistant U.S. Attorney Tanya Treadway, Assistant U.S. Attorney Jared Maag, and Special Assistant U.S. Attorney Robin Graham for their work on the case.Manager of Multi-Million Dollar Mortgage Fraud Conspiracy Pleads Guilty Defendant’s Scheme Caused Losses of over $6 MillonRead the Press Release
SAN DIEGO, CA - United States Attorney Laura E. Duffy announced that Kathryn Sylvester of San Diego pleaded guilty today to participating in a mortgage fraud conspiracy in which she and several co-conspirators caused over $6 million in losses associated with various properties in San Diego County and elsewhere. Sylvester entered her guilty plea to one count of wire fraud and one count of conspiracy to commit wire fraud before Magistrate Judge William V. Gallo, and is scheduled to appear before U.S. District Court Judge Cathy Ann Bencivengo on April 1, 2014 for sentencing.
As defendant admitted in today’s hearing and in court documents, between June 2005 and May 2008, she recruited “straw buyers” to submit falsified mortgage loan applications to purchase properties and obtain home equity loans. Sylvester herself provided false documents to support the straw buyers’ misrepresentations regarding their income and employment, and added straw buyers to unrelated bank accounts so they could inflate the value of their assets on loan applications. Sylvester helped convince lending institutions to fund loans for which Sylvester and the straw buyers would not otherwise qualify. Although Sylvester promised some straw buyers that she would “flip” a number of the properties for a 2 profit, she systematically drained equity from the properties for her own benefit. The straw buyers included Claudia Montes, Tad Lent, and Roderick Michener, all residents of San Diego.
Montes, a former notary public, notarized the signatures of other straw buyers on the loan applications. On April 12, 2013, Montes pleaded guilty to a two-count information (13CR1313-JLS) before Magistrate Judge William McCurine, Jr. She admitted conspiring with Sylvester to submit false loan applications to lenders to obtain the properties and transferring proceeds to Sylvester. She is scheduled to be sentenced before U.S. District Court Judge Janis L. Sammartino on February 14, 2014.
Michener pleaded guilty before Magistrate Judge Barbara L. Major on April 4, 2013, to conspiring with Sylvester to commit bank fraud (13CR1130-CAB). Michener admitted that he permitted co-conspirators to claim an ownership interest in his bank account in order to include the account as an asset on their respective mortgage loan applications. He also admitted transferring fraud proceeds to Sylvester. Michener is scheduled to be sentenced before District Court Judge Cathy A. Bencivengo on March 14, 2014.
Lent pled guilty to conspiring with Sylvester to submit falsified loan applications to mortgage lenders by misrepresenting the amount of his assets (12CR3744-L). Lent entered his guilty plea on January 28, 2013, before District Court Judge M. James Lorenz, and is scheduled to be sentenced on January 21, 2014.
United States Attorney Duffy added, “As our economy slowly improves, it is important for us to address criminal conduct that helped spawn the financial crisis. These mortgage fraud cases are further evidence of our dedication to investigating and prosecuting the fraud that plagued the mortgage loan processes for too long.”
DEFENDANT Case Number: 13CR1355-CAB Kathryn Sylvester Age: 44 SUMMARY OF CHARGESCount 1: Title 18, United States Code, Section 1349 (conspiracy to commit wire fraud and bank fraud)
Maximum penalty: 30 years of custody; $1,000,000 fineCount 5: Title 18, United States Code, Section 1343 (wire fraud)
AGENCY
Maximum penalty: 20 years of custody; $250,000 FineFederal Bureau of Investigation
Man Who Conspired with Female Friend to Solicit ‘Hit Man’ to Kill Her Daughter’s Boyfriend Sentenced to 7 Years in Federal PrisonRead the Press Release
SANTA ANA, California – A Hawthorne man who pleaded guilty in a murder-for-hire scheme targeting a man who was dating the daughter of his co-conspirator was sentenced today to seven years in federal prison.
Antonio Quevedo, 35, was sentenced by United States District Judge Josephine L. Staton.
The second defendant in the case – Adelina Cristobal, 56, of Lawndale, who also pleaded guilty last year to conspiracy to use interstate commerce facilities in the commission of murder-for-hire – is scheduled to be sentenced by Judge Staton on January 31.
The murder-for-hire scheme was uncovered during an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the Los Angeles Police Department. Investigators initiated the investigation after receiving information that the two defendants were attempting to solicit someone to commit a murder on their behalf. An undercover officer posing as the hired “hit man” met with the defendants, who offered the undercover officer $6,500 to kill the intended victim. Cristobal was to pay Quevedo an additional $500 for arranging the meeting with the “hit man.”
Quevedo conspired with Cristobal to hire someone to murder the boyfriend of Cristobal’s daughter, prosecutors wrote in a sentencing memorandum that noted “Had the government not been able to infiltrate the conspiracy, [Quevedo] may well have found a willing assassin to murder the victim and successfully collected his broker’s fee.”
Release No. 14-006
Man Sentenced in Identification Fraud CaseRead the Press Release
The United States Attorney's Office for the Middle District of Pennsylvania announced that Alberto Hernandez-Torres, formerly of Hazleton, Pennsylvania, was sentenced today by United States District Court Judge Malachy Mannion in Scranton to 27 months’ imprisonment after having pleaded guilty to conspiracy to commit identification fraud and conspiracy to commit alien smuggling for financial gain. Hernandez-Torres was also ordered to forfeit $40,000 to the United States. At the conclusion of the proceeding, Judge Mannion entered an order of removal requiring that Hernandez-Torres be removed from the United States to his home country of Mexico.
According to United States Attorney Peter Smith, the multi-jurisdictional, transnational investigation in this case was conducted by investigators of the Department of Homeland Security-Immigration and Customs Enforcement, the United States Postal Inspection Service, the Internal Revenue Service and the United States Department of State. The investigation included 18 court-authorized wiretaps and a nationwide coordinated case take-down that included 260 search warrants, including a search warrant in Hazleton. Fifty-three persons were charged in the case of whom forty-nine were arrested. All 49 persons arrested so far have entered guilty pleas.
The investigation and prosecutions in this case were coordinated by James Yoon, Hope Olds, Courtney Schaefer and Christina Giffin, attorneys in the United States Department of Justice, Criminal Division, Human Rights and Special Prosecutions Section. The case was handled locally in the Middle District of Pennsylvania by Assistant U.S. Attorney William Houser.
Maine Man Sentenced for Wildlife Trafficking ViolationsRead the Press Release
BOSTON – A former Maine resident was sentenced yesterday for violating federal wildlife protection laws which prohibit the illegal purchase and transportation of wildlife.
Senior U.S. District Court Judge Mark L. Wolf sentenced Eric Zeng, 49, to two years of probation and ordered to pay a fine of $5,000. In addition, the court ordered the forfeiture of Zeng’s vehicle. In October 2013, Zeng pleaded guilty to two counts of violating the Lacey Act, a federal wildlife protection statute which prohibits, among other things, the interstate purchase, sale and transportation of wildlife which was obtained in violation of federal, state or local law.
“Protecting the wildlife of our region is critical to ensuring the security of our precious environment,” said United States Attorney Carmen M. Ortiz. “It is our duty to prosecute individuals who senselessly exploit and traffic wildlife, and we will continue to work with our law enforcement partners to prevent these crimes.”
At the time of the offenses, Zeng was living in Presque Isle, Maine where he owned and operated a restaurant. He was actively engaged in the illegal purchase and sale of bear and deer parts in Maine, and continued the illegal trafficking by completing two purchases in Massachusetts.
On two occasions, Zeng bought what he was told were illegally obtained wildlife parts, specifically, black bear gall bladders and bear paws. He then traveled to Massachusetts to complete the purchase. After reviewing the items and paying in cash, Zeng transported them to locations in Connecticut where he sold them to third parties. Zeng drove a Cadillac Escalade, valued at $70,000, to both meetings and, as a result, the vehicle was subsequently seized by law enforcement and was forfeited as part of the sentence.
“We attribute the success of this case to the excellent working relationship we have with the U.S. Attorney’s Office and our counterparts in the U.S. Fish and Wildlife Office of Law Enforcement,” said Colonel Joel Wilkinson of the Maine Warden Service.“This sentence represents the gravity of such crimes committed against our wildlife, conservation and the hunting heritage,” said U.S. Fish and Wildlife Service, Northeast Region Special Agent in Charge Honora Gordon. “The case is another fine example of how our partnership with the Maine Warden Service and the Boston U.S. Attorney's Office is crucial in protecting black bears and other North American species from commercial exploitation."
U.S. Attorney Carmen M. Ortiz; Colonel Joel Wilkinson of the Maine Warden Service; and Honora Gordon, SAC of the U.S. Fish and Wildlife Service made the announcement today. The investigation leading to Zeng’s arrest was a joint effort between the Maine Department of Inland Fisheries and Wildlife, Maine Warden Service, and the United States Fish and Wildlife Service, Office of Law Enforcement. The case was prosecuted by Nadine Pellegrini of Ortiz’s Major Crimes Unit.
Louisville Felon Guilty of Bank Fraud and Illegal Possession of A FirearmRead the Press Release
– Accomplices cashed more than 300 counterfeit checks totaling $200,000
– 70 area business were affectedLOUISVILLE, Ky. – A Louisville felon pleaded guilty, in United States District Court this week, to making more than 300 counterfeit checks totaling over $200,000 and recruiting 15 co-conspirators to pass the counterfeit checks at businesses and financial institutions in Jefferson County and the surrounding area announced David J. Hale, United States Attorney for the Western District of Kentucky.
Phillip Walker, age 40, pleaded guilty to 26 charges in two federal indictments including one count of conspiracy, 19 counts of bank fraud, and one count of possession of a firearm by a convicted felon. According to the plea agreement, Walker admitted from July 2011 through August 2013, that he manufactured approximately 300 counterfeit checks totaling over $200,000. Walker recruited approximately 15 co-conspirators, to pass the checks and would split the proceeds of the checks with the co-conspirators after the checks were successfully negotiated. Walker also caused an unnamed co-defendant to open bank accounts at Your Community Bank and U.S. Bank for the purpose of negotiating counterfeit checks. During the course of the fraud more than 70 area retail outlets were affected. Walker made the counterfeit checks utilizing a computer and two printers, at his home located on West Kentucky Street in Louisville. In furtherance of the crime, Walker admitted to buying stolen driver’s licenses or state identification cards and would make the counterfeit check payable to that person’s name. Walker would then attempt to recruit people who looked similar to the photo of the person on the stolen driver’s license or state identification card to cash the counterfeit check. Further, on August 16, 2013, in Jefferson County, Walker knowingly possessed an American Tactical C45 pistol and eight rounds of .45 caliber ammunition, as well as numerous rounds of assorted ammunition. Walker had previously been convicted of a crime punishable by a term of imprisonment exceeding one year.
If convicted at trial, Walker faced a combined maximum sentence of 325 years, a fine of $9.5 million and a five year term of supervised release.
This case is being prosecuted by Assistant United States Attorney Bryan R. Calhoun and Special Assistant Attorney Sungtae Kang and is being investigated by the United States Secret Service, the Louisville Metro Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Local Gang Member, Associates Sentenced for Federal Drug Trafficking CrimesRead the Press Release
CORPUS CHRISTI, Texas – Three men working with the Texas Mexican Mafia (TMM) to distribute heroin and cocaine in the Corpus Christi area have been sentenced to federal prison, announced United States Attorney Kenneth Magidson. Alejandro Guerrero, 39, of Corpus Christi, was found guilty of conspiracy to distribute heroin after a two-day jury trial in October 2013.
Today, Senior U.S. District Judge Hayden W. Head sentenced Guerrero to a total term of 188 months in federal prison which will be immediately followed by five years of supervised release.
Jose Miguel Zuniga aka Slick, 33, also of Corpus Christi, and Alberto Donicio Galindo aka Crazy Horse, 38, of Laredo, had previously entered respective guilty pleas to possession with intent to distribute heroin and conspiracy to possess with intent to distribute cocaine. Zuniga and Galindo were also sentenced today to 74 and 24 months in federal prison, respectively. Both will serve three years of supervised release.
The remaining defendants in this case, Ruben Esparza aka Popo, 36, and Ernesto Villarreal aka Crash, 36, both of Robstown, have also pleaded guilty to their involvement in the heroin conspiracy and are scheduled for sentencing in Houston before U.S. District Judge Nancy F. Altas in February.
Jurors in the trial of Guerrero heard testimony that Esparza, a local leader of the TMM, had been receiving shipments of narcotics from Laredo in 2011. Investigators learned of the time and place of drug shipments and witnessed Guerrero meet with a courier from Laredo at a Corpus Christi Walmart on two occasions. After a traffic stop, law enforcement discovered a loaded handgun in the passenger compartment of Guerrero’s vehicle. “Black tar” heroin was also found hidden in a secret compartment of Guerrero’s vehicle.
Galindo was another courier for the Laredo drug source. He delivered 4 ½ ounces of cocaine to Esparza in April 2011. Zuniga, another member of the TMM, admitted to purchasing an ounce of heroin from Esparza in May 2011, which Zuniga then intended to distribute.
All defendants have been and will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
This case was investigated through a joint effort by the FBI, Drug Enforcement Administration, the Bureau of Alcohol, Tobacco, Firearms and Explosives, Texas Department of Public Safety and the Corpus Christi Police Department. The case is being prosecuted by Assistant United States Attorney Michael Hess.Leader of Group from New York Charged with Offering to Sell Women Sentenced to 36 Months’ ImprisonmentRead the Press Release
NORFOLK, Va. – Prince Lee, 21, of New York, was sentenced today to 36 months in prison, followed by 5 years of supervised release, for conspiracy to transport persons for prostitution.
Dana J. Boente, Acting United States Attorney for the Eastern District of Virginia, Royce E. Curtin, Special Agent in Charge of the FBI’s Norfolk Field Office and James Cervera, Chief of Police, Virginia Beach Police Department, made the announcement after sentencing by United States District Judge Raymond A. Jackson.
Lee pleaded guilty on October 3, 2013. According to court documents, on May 15, 2013, Prince Lee and a young woman posted an advertisement on craigslist.com in Hampton Roads offering to sell the woman as a “sex slave” for $10,000. The Virginia Beach Police Department was monitoring the site and came across the advertisement and responded. An undercover officer spoke with Prince Lee and Lee agreed to sell three women for approximately $225,000. They agreed to meet in Virginia Beach on June 1, 2013. Prince Lee and codefendant Henry Olson recruited Jane Doe 1, a 30 year old also from New York, and told the woman she would receive $10,000 just to “hang out” with a friend of Prince Lee’s in Virginia. After much persuasion, she agreed. Codefendant Arielle Pierre and Prince Lee also recruited Jane Doe 2 to spend a few hours with the man. Neither of the women was told that they were being “sold” to the man. Lee, Olson, Pierre and two others drove with the Jane Does from New York and arrived in Virginia Beach on the morning of June 1, 2013. Under observation by the police, Lee and Pierre were seen yelling at and grabbing the Jane Doe 2, trying to force the woman to remain and go to the “date.” Jane Doe 2 eventually ran into a nearby hotel, where employees hid her in the back room. Prince Lee also threatened to desert Jane Doe 1 in Virginia and throw away her car keys if she did not go forward with the plan. In the afternoon of June 1, the undercover officer arrived for the “date” and all defendants were arrested. Pierre was sentenced on January 8, 2014 to 12 months in jail. Olson is scheduled to be sentenced on January 29, 2014.
This case was investigated by the Virginia Beach Police Department and Federal Bureau of Investigation. Assistant United States Attorney Elizabeth Yusi prosecuted the case on behalf of the United States.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.
Koito Manufacturing Co. Ltd. Agrees to Plead Guilty to Price Fixing on Automobile Parts Installed in U.S. CarsRead the Press Release
Koito Manufacturing Co. Ltd., a Tokyo-based company, has agreed to plead guilty and to pay a total of $56.6 million in criminal fines for its roles in separate price-fixing conspiracies involving automobile lighting fixtures and lamp ballasts installed in cars sold in the United States and elsewhere, the Department of Justice announced today.
A ccording to a two-count felony charge filed today in U.S. District Court for the Eastern District of Michigan in Detroit, Koito engaged in separate conspiracies to rig bids for, and to fix, stabilize and maintain the prices of automobile lighting fixtures and automotive high-intensity discharge (HID) lamp ballasts sold to automakers in the United States and elsewhere. In addition to the criminal fine, Koito has also agreed to cooperate with the department’s ongoing auto parts investigations. The plea agreement is subject to court approval.
“The conspirators engaged in long-term conspiracies to fix the prices of essential components used in the production of automobiles,” said Brent Snyder, Deputy Assistant Attorney General of the Antitrust Division’s criminal enforcement program. “Today’s criminal fine demonstrates the Antitrust Division’s continued commitment to hold companies accountable for collusive behavior that impacts American consumers.”
According to the charges, Koito and its co-conspirators sold the lighting fixtures and ballasts at noncompetitive prices to automakers in the United States and elsewhere. Koito and its co-conspirators carried out the conspiracies through meetings and conversations in which they discussed and agreed upon bids and price quotations and agreed to allocate among the companies certain sales of automotive lighting fixtures and HID lamp ballasts sold to automobile and component manufacturers. Koito’s involvement in the conspiracy to fix prices of automotive lighting fixtures lasted from at least as early as June 1997 until about July 2011. Koito’s involvement in the conspiracy to fix prices of automotive HID lamp ballasts lasted from at least as early as July 1998 until at least February 2010.
Koito manufactures and sells automotive lighting fixtures, which include automobile headlamps and rear combination lamp assemblies that employ various bulb technologies and are used for forward illumination, visibility and to signal various vehicular functions, such as braking, reversing direction and turning.
Koito also manufactures and sells HID lamp ballasts – electrical devices that are essential for the operation of an HID headlamp. HID lamp ballasts regulate the electrical current used to ignite and control the electrical arc that generates the intensely bright light emitted by an automotive HID headlamp fixture.Including Koito, 24 corporations have pleaded guilty or agreed to plead guilty in the department’s investigation into price fixing and bid rigging in the auto parts industry, and have agreed to pay a total of more than $1.8 billion in fines. Additionally, 26 individuals have been charged.
Koito is charged with price fixing in violation of the Sherman Act, which carries a maximum penalty of a $100 million criminal fine for corporations. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
Today’s prosecution arose from an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the automotive parts industry, which is being conducted by each of the Antitrust Division’s criminal enforcement sections and the FBI. Today’s charges were brought by the National Criminal Enforcement Section, with the assistance of the Detroit Field Office of the FBI and the FBI headquarters’ International Corruption Unit. Anyone with information concerning this investigation should contact the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258, visit www.justice.gov/atr/contact/newcase.html or call the Detroit Field Office of the FBI at 313-965-2323.