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Tuesday 19 November 2013
Charleston Man with More Than $20,000 Cash, Half-kilo of Cocaine Sentenced to Nearly 4 Years in Federal PrisonRead the Press Release
CHARLESTON, W.Va. – A thirty-five-year-old man who possessed a total of more than $20,000 in cash and nearly a half-kilogram of cocaine inside of his Charleston residence was sentenced today to 46 months in federal prison, announced U.S. Attorney Booth Goodwin. Jason McGhee, 35, previously pleaded guilty in July to possession with intent to distribute cocaine. On April 24, 2013, a confidential informant working with the Metropolitan Drug Enforcement Network Team (MDENT) arranged to purchase cocaine from McGhee. The police informant later arrived at McGhee’s residence and gave the defendant $2400 in pre-recorded buy money to fulfill a previous drug debt. A short time later, McGhee handed the informant five ounces of suspected cocaine. The informant later turned the suspected cocaine over to law enforcement agents. The suspected cocaine was tested by police and proved to be 146 grams of cocaine.
Following the controlled drug transaction between McGhee and the informant, police executed a search warrant on the defendant’s residence. During the search of the residence, police found $2400 in pre-recorded currency that was used as part of a previous controlled drug transaction, an additional $17,800 in cash, two sets of digital scales and approximately 499 grams of cocaine.In total, McGhee is responsible for distributing a total of at least two kilograms but less than 3.5 kilograms of cocaine in and around Charleston.
The investigation was conducted by MDENT and the Drug Enforcement Administration. Assistant United States Attorney Monica D. Coleman handled the prosecution. The sentence was imposed by United States District Judge Thomas E. Johnston in Charleston.
Chamberlain Man Charged with Access Device Fraud and LarcenyRead the Press Release
United States Attorney Brendan V. Johnson announced that a Chamberlain, South Dakota, man has been indicted by a federal grand jury.
Warren LaRoche, age 23, was indicted on November 14, 2013, for Access Device Fraud and Larceny. LaRoche appeared before U.S. Magistrate Judge Mark A. Moreno on November 18, 2013, and pled not guilty to the Indictment.
The maximum penalty upon conviction is 15 years of imprisonment and/or a $250,000 fine, 3 years of supervised release, an additional 2 years of supervised release upon revocation, and a mandatory $100 special assessment to the Federal Crime Victims Fund. Restitution may also be ordered.
The charges are merely accusations, and LaRoche is presumed innocent until and unless proven guilty.
The Indictment alleges that between December 3, 2012, and April 16, 2013, LaRoche stole a credit card number and made unauthorized purchases in excess of $1,000.
The investigation is being conducted by the Bureau of Indian Affairs. Assistant U.S. Attorney Meghan N. Dilges is prosecuting the case.
LaRoche was remanded to the custody of the U.S. Marshals Service. A trial date has not been set.
Cabot Corporation Agrees to Spend over $84 Million to Control Harmful Air Pollution at Louisiana and Texas FacilitiesRead the Press Release
Boston-based Cabot Corporation, the second largest carbon black manufacturer in the United States, has agreed to pay a $975,000 civil penalty and spend an estimated $84 million on state of the art technology to control harmful air pollution, resolving alleged violations of the New Source Review (NSR) provisions of the Clean Air Act (CAA) at its three facilities in the towns of Franklin and Ville Platte, La., and Pampa, Texas, the Department of Justice and the U.S. Environmental Protection Agency (EPA) announced today. This agreement is the first to result from a national enforcement initiative aimed at bringing carbon black manufacturers into compliance with the CAA’s NSR provisions.
The state of Louisiana Department of Environmental Quality is a co-plaintiff in the case and will receive $292,500 of the penalty.
“By agreeing to pay an appropriate penalty and install state of the art technology to control harmful air pollution, Cabot Corp. is taking a positive step forward to address these alleged violations of the Clean Air Act,” said Acting Assistant Attorney General Robert G. Dreher of the Justice Department’s Environment and Natural Resources Division. “This agreement will serve as a model for how the industry can come into compliance with the Clean Air Act by installing controls that prevent harmful pollution and improve air quality for surrounding communities.”
“With today’s commitment to invest in pollution controls, Cabot has raised the industry standard for environmental protection,” said Assistant Administrator Cynthia Giles of EPA’s Office of Enforcement and Compliance Assurance. “These upgrades will have lasting, tangible impacts on improved respiratory health for local communities. We expect others in the industry to take notice and realize their obligation to protect the communities in which they operate.”
“This is a huge win for the citizens of our district,” said U.S. Attorney Stephanie A. Finley. “These harmful pollutants can cause serious, long term respiratory harm. The United States Attorney’s Office is committed to the enforcement of the environmental laws and protection of the community. This settlement promotes a healthier environment and an opportunity to allow the residents of the district to breathe cleaner air.”
At all three facilities, the settlement requires that Cabot optimize existing controls for particulate matter or soot, operate an “early warning” detection system that will alert facility operators to any particulate matter releases, and comply with a plan to control “fugitive emissions” which result from leaks or unintended releases of gases. To address nitrogen oxide (NOx) pollution, Cabot must install selective catalytic reduction technology to significantly reduce emissions, install continuous monitoring, and comply with stringent limits. At the two larger facilities in Louisiana, Cabot must address sulfur dioxide (SO2) pollution by installing wet gas scrubbers to control emissions, install continuous monitoring, and comply with stringent emissions limits. In addition, the Texas facility is required to comply with a limit on the amount of sulfur in feedstock that is the lowest for any carbon black plant in the United States.
These measures are expected to reduce NOx emissions by approximately 1,975 tons per year, SO2 emissions by approximately 12,380 tons per year, and significantly improve existing particulate matter controls. Exposure to NOx emissions can cause severe respiratory problems and contribute to childhood asthma. SO2 and NOx can be converted to fine particulate matter once released in the air. Fine particulates can be breathed in and lodged deep in the lungs, leading to a variety of health problems and even premature death. The harmful health and environmental impacts from these pollutants can occur near the facilities as well as in communities far downwind from the plants.
In the complaint filed by DOJ on behalf of EPA, the government alleged that, between 2003 and 2009, Cabot made major modifications at its carbon black facilities without obtaining pre-construction permits and without installing and operating required pollution technology. The complaint further alleges that these actions resulted in increased emissions of NOx and SO2, violating CAA requirements stating that companies must obtain the necessary permits prior to making modifications at a facility and must install and operate required pollution control equipment if those modifications will result in increases of certain pollutants.
Today’s action also requires that Cabot spend $450,000 on energy saving and pollution reduction projects that will benefit the communities surrounding the facilities in Franklin and Ville Platte, La., and in Pampa, Texas, such as upgrading air handling units at municipal buildings in the three communities to more efficient technology.
Carbon black is a fine carbonaceous powder used as a structural support medium in tires and as a pigment in a variety of products such as plastic, rubber, inkjet toner and cosmetics. It is produced by burning oil in a low oxygen environment; the oil is transformed into soot (carbon black), which is collected in a baghouse. Because the oil used in the process is low value high sulfur oil, the manufacturing process creates significant amounts of SO2 and NOx, as well as particulate matter.
This settlement is part of EPA’s national enforcement initiative to control harmful air pollution from the largest sources of emissions. Since 2010, EPA has been focusing enforcement efforts on reducing emissions at carbon manufacturing plants in the United States. Currently, none of the 15 carbon black manufacturing plants located in the United States have controls on emissions of SO2 and NOx or have continuous emissions monitors.
Cabot Corporation manufactures global specialty chemicals and performance materials, which include rubber additives for tires and brake pads, activated carbon for air purifiers, chemicals used in the manufacture of lithium-ion batteries, and inkjet colorants.
The proposed consent decree will be lodged with the U.S. District Court for the Western District Court for Louisiana and will be subject to a 45-day public comment period. The company is required to pay the penalty within 30 days after the court approves the settlement. The proposed consent decree can be viewed online at www.justice.gov/enrd/Consent_Decrees.html
More information about the settlement:
www2.epa.gov/enforcement/cabot-corporation-clean-air-act-settlement
More information about EPA’s national enforcement initiative: www.epa.gov/compliance/data/planning/initiatives/2011airpollution.html
Buffalo Grandmother who Headed Family Drug Organization Sentenced on Drug Conspiracy ChargesRead the Press Release
BUFFALO, N.Y. - U.S. Attorney William J. Hochul, Jr. announced today that Theresa Anderson, 57, of Buffalo, N.Y. who was convicted of conspiracy to distribute and distribution of crack cocaine, was sentenced to 188 months in prison by U.S. District Court Judge, Richard J. Arcara.
Assistant U.S. Attorney Melissa Marangola, who handled the case, stated that between 2000 and February 2012, Anderson headed an illegal narcotics drug trafficking organization that controlled drug sales on Swinburne and Deshler Streets in the City of Buffalo. The defendant employed several family members to sell crack cocaine on a daily basis in the neighborhood. In order to monopolize narcotics sales in the area, the defendant threatened and intimidated rival narcotics traffickers and even purchased several homes in the area which were used for selling and storing the illegal narcotics.
“This defendant not only destroyed her own family by leading them into a life of illegal narcotics trafficking, she also damaged the neighborhood where the drug trafficking took place,” said U.S. Attorney Hochul. "Together with our law enforcement partners, we will continue our efforts to make Buffalo and its neighborhoods a safer place to live.”As part of this case, the Government seized over $50,000 in U.S. Currency and approximately nine houses used by the drug organization.
Anderson was arrested in February 2012 along with eight others: Steven Butler; Dion Anderson; Melvin Calhoun; Anquensha Hodge, a/k/a Anne Anderson; Wymiko Anderson, a/k/a Red; Toshia Hodge, a/k/a Toshia Anderson; Tajia Anderson, a/k/a Porkchop; and Leo Mellerson; all of Buffalo. Five of these are either children or grandchildren of Anderson. A sixth defendant is Anderson's husband and the two others are boyfriends of Andersons' daughters. All nine have been convicted.
The sentencing is the culmination of an investigation on the part of the Drug Enforcement Administration, under the direction of Brian R. Crowell, Special Agent in Charge, New York Field Division, the Buffalo Police Department, under the direction of Commissioner Daniel Derenda, and the New York State Police, Special Investigations Unit, under the direction of Major Thomas G. Marmion.Appeals Court Affirms Sentence for Olson’s Wire Fraud OffenseRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced that the Third Circuit Court of Appeals Monday affirmed the 65-month prison sentence imposed by Senior U.S. District Court Judge James M. Munley on Jeffrey Olson for his scheme to defraud investors of $2.8 million and for violating conditions of his supervised release.
According to United States Attorney Peter J. Smith, Olson, age 51, who resided in Pocono Lake during the time of the offense, previously pleaded guilty to wire fraud in connection with soliciting investments in a business called Northco Investments between 2008 and 2011. Olson was sentenced to prison in February 2013.
Olson was charged in May 2011, as a result of an investigation by the Federal Bureau of Investigation.
In his appeal, Olson challenged the validity of his guilty plea; claimed that the government promised him a lesser sentence; and argued that consecutive sentences for the wire fraud offense and his supervised release violation were unreasonable. The Third Circuit Court rejected each of those claims and noted that Judge Munley’s sentence was “premised upon appropriate and judicious consideration of the relevant factors.”
Assistant United States Attorney Francis P. Sempa prosecuted the case and handled the appeal for the government.
Monday 18 November 2013
“Strategies for Justice – Collaboration in the Western Pacific: A Pacific Regional Response to Combat Human Trafficking”Read the Press Release
U.S. Attorney’s Office for the District of Guam and the Northern Mariana Islands Co-sponsors Human Trafficking Training in Palau
Alicia A.G. Limtiaco, U.S. Attorney for the Districts of Guam and the Northern Mariana Islands, announced that her office co-sponsored the 2nd Pacific Regional Response to Combat Human Trafficking International Conference held in the Republic of Palau on July 22-26, 2013. U.S. Attorney Limtiaco, Assistant U.S. Attorney (AUSA) Rosetta San Nicolas and AUSA Rami Badawy, conducted training and presentations on topics including, “Pacific Regional Response to Combat Human Trafficking - Collaboration in the Western Pacific”; “Investigation and Prosecution of Sexually Oriented Businesses and Civil Code Enforcement”; and “Child Sexual Exploitation, Child Pornography and Human Trafficking of Minors.” U.S. Attorney Limtiaco, AUSA San Nicolas and AUSA Badawy were also instructors of the Human Trafficking Trial Advocacy Course, held at the Conference.
The U.S. Attorney’s Office (“USAO”) for the Districts of Guam and the Northern Mariana Islands (“NMI”) has been and continues to work collaboratively with the National District Attorney’s Association (NDAA); U.S. Department of Interior, Office of Insular Affairs, Federal Ombudsman Office; and U.S. Department of State, Monitoring of Trafficking in Persons Office, on a Pacific Regional Response to Combat Human Trafficking initiative. This response is a critical component of the USAO’s human trafficking strategic plan given increased concerns in the Pacific region regarding sex and labor trafficking, violence against women, and child abuse and sexual exploitation. Also of significance are the source countries within the Asia Pacific region from which victims are recruited and trafficked, and their close proximity to Guam, the NMI, Republic of Palau, Republic of the Marshall Islands, and Federated States of Micronesia (“FSM”); and the trafficking of victims in the islands themselves.
The Pacific Regional Response to Combat Human Trafficking initiative employs a multidisciplinary model, including participation, coordination, and collaboration among law enforcement; prosecution; victim service providers; social services; medical, mental and public health professionals; faith based organizations; educational institutions; Consulates; and other community stakeholders. The response calls for the establishment and provision of victim services, investigation and prosecution of human trafficking, training opportunities, community outreach/ public awareness and prevention programs, and creation of human trafficking task forces and coalitions in the Pacific region island communities.
Providing fundamental training in human trafficking, including victimization, investigation and prosecution, prevention efforts, and other related topics, to law enforcement; prosecution; victim service providers; social services; medical, mental and public health professionals; faith based organizations; educational institutions; Consulates; and other community stakeholders, in our Pacific region island communities, is critical to effective prevention and enforcement efforts in the region.
The conference provided a forum for governmental and non-governmental organizations to engage in dialogue and discuss issues, concerns, problems, plans, strategies and solutions relating to human trafficking in their respective Pacific island communities, in the Pacific region, and globally. The conference also provided an opportunity for the participants to establish professional relationships and partnerships, and to engage in cooperative and collaborative domestic and international efforts to prevent and fight against human trafficking, establish victim services, and prosecute and hold traffickers accountable for these heinous crimes.
The “2nd Pacific Regional Response to Combat Human Trafficking International Conference” was attended by approximately 100 leaders and members of the Pacific regional community.
Photos of the conference are attached.
Conference attendees from Guam and Saipan, left to right,
Assistant U.S. Attorney Rami Badawy, Cynthia Kinto, UOG Student, Mary Kate Donnell, UOG Student, U.S. Attorney Alicia Limtiaco. Lauri Ogumoro, Director, Guma Esperanza, Saipan Attorney General Joey San Nicolas and Assistant U.S. Attorney Rosetta San Nicolas.U.S. Attorney Alicia Limtiaco addressing conference participants.
William K. Harrington to Serve as U.S. Trustee for New York, Connecticut, VermontRead the Press Release
WASHINGTON – William K. Harrington, the U.S. Trustee for Massachusetts, New Hampshire, Maine and Rhode Island (Region 1), has been designated by Attorney General Eric Holder also to serve as the U.S. Trustee for New York, Connecticut and Vermont (Region 2), effective on November 27, 2013, the Executive Office for U.S. Trustees announced today. Mr. Harrington replaces Tracy Hope Davis, who has been appointed U.S. Trustee for Northern and Eastern California and Nevada (Region 17).
“The U.S. Trustee Program is tremendously fortunate to have Bill Harrington able to step in to serve as U.S. Trustee for this extremely significant region,” stated Clifford J. White III, Director of the Executive Office for U.S. Trustees. “Bill has many years of experience in the oversight of complex chapter 11 reorganizations, including as head of our office in Wilmington, Delaware, and he was a leader in the development of the updated chapter 11 attorneys’ fee guidelines that we issued in June.”
Mr. Harrington has served as U.S. Trustee for Region 1 since October 2010. Prior to that appointment, he served for two years as the Assistant U.S. Trustee in Wilmington, Del., after joining the U.S. Trustee Program (USTP) in March 2004 as a Trial Attorney. Previously, Mr. Harrington practiced law in a large regional law firm concentrating on bankruptcy, corporate and commercial litigation matters. Before attending law school, he worked as a senior accountant for an investment management firm in Boston.
Mr. Harrington received a law degree from Villanova University School of Law in Villanova, Pa., and a Bachelor of Science (Economics) degree from the Wharton School, University of Pennsylvania, in Philadelphia.
The USTP is the component of the Justice Department that protects the integrity of the bankruptcy system by overseeing case administration and litigating to enforce the bankruptcy laws. The USTP has 21 regions and 95 field offices. Region 2 is headquartered in New York City with additional offices in Albany, Brooklyn, Buffalo, Central Islip, Rochester and Utica, N.Y., and New Haven, Conn.
Contact:Jane Limprecht, Public Information Officer
Executive Office for U.S. Trustees
(202) 305-7411Wichita Man Sentenced for HelpingPolice Officer in Scheme to Pay BribeRead the Press Release
WICHITA, KAN. – A Wichita man has been sentenced to two years on federal probation for helping a former officer of the Wichita Police Department in a scheme to bribe a witness in hopes of keeping the officer from losing her job, U.S. Attorney Barry Grissom said today. He already spent five months in jail.
Patrick Melendrez, 40, Wichita, Kan., pleaded guilty to one count of conspiracy to commit wire fraud. In his plea, he admitted that co-defendant Joletta Vallejo developed a plan and asked him to assist her in bribing a witness to recant statements the witness made about Vallejo to the police department’s Professional Standards Bureau.
Vallejo was employed by the Wichita Police Department from Jan. 9, 2006, to Aug 24, 2012. On Oct. 16, 2011, two citizens approached her to report they were victims of an aggravated robbery, aggravated kidnaping, aggravated battery and attempted first degree murder. Vallejo did not follow the police department’s policies in responding and filing their complaints. As a result, Vallejo was investigated by the police department’s Professional Standards Bureau. When she was interviewed she lied to investigators. When she became aware she was going to be fired, she and Melendrez devised a scheme to attempt to keep her job.
On Aug. 22, 2012, Vallejo created a Google Voice number in the name of Melendrez. On Aug. 22 and 23, that number was used to call and text a witness to persuade him to recant his statements to the Professional Standards Bureau. In return, Vallejo and Melendrez offered the witness money. What Vallejo and Melendrez did not know is the witness was cooperating with an undercover investigation into the bribery attempt.
Co-defendant Vallejo is set for sentencing Dec. 2.
Grissom commended the Wichita Police Department, the FBI and Assistant U.S. Attorney Debra Barnett for their work on the case.
West Memphis Arrests Take Violent Drug Dealers Off the StreetsRead the Press Release
Little Rock - Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas; along with Howard S. Marshall, Acting Special Agent in Charge of the Little Rock Field Office of the Federal Bureau of Investigation; Colonel Stan Witt, Arkansas State Police; and Chief Donald Oakes, West Memphis Police Department; announced today that on November 6, 2013, a federal grand jury returned a twenty-five count indictment charging twenty individuals in Crittenden County with participating in a drug conspiracy and firearms offenses.
“I made a commitment to the Arkansas Delta law enforcement to work side-by-side with them to take violent drug dealers off their streets,” stated Thyer. “The arrests this morning were the result of a coordinated effort with the West Memphis Police Department. When we work together, we will make a difference for the citizens of Eastern Arkansas.”
“Today's arrests in Operation Delta Crossroads are intended to reiterate the strong message to gang members and other criminals who pose the greatest threat of violence to the safety and security of those who live and work in Eastern Arkansas," stated Acting FBI Special Agent in Charge Howard S. Marshall. "We are here, we are working together, and we are committed to dismantling and disrupting your illegal operations.”
“With the arrests made this morning we took a big step in the fight against drugs and violence it in our community, and it is a great example of what can be accomplished when Local, State and Federal Law Enforcement cooperate for a common goal.”
The charges stem from a state and federal Organized Crime and Drug Enforcement Task Force (OCDETF) investigation operationally dubbed "Delta Crossroads." The investigation, which primarily focused on drug trafficking in West Memphis, was initiated by the FBI at the request of the West Memphis Police Department, which assisted extensively with the investigation. During the course of the investigation, law enforcement utilized three court-authorized wiretaps, during which hundreds of calls pertaining to cocaine and crack cocaine trafficking and firearms offenses were intercepted.
Defendants arrested in a round-up conducted by the FBI, ASP, and West Memphis Police Department, on November 18, 2013 will appear before United States Magistrate Judge Joseph J. Volpe for Plea and Arraignment on November 19, 2013, at 11:00 a.m. The remaining defendants will appear for Plea and Arraignment on a later date. The case, 4:13CR00329 BSM, is pending before U.S. District Chief Judge Brian S. Miller.
The investigation was conducted by the United States Attorney=s Office, FBI, ASP, and West Memphis Police Department. It is being prosecuted by Assistant United States Attorney Julie Peters.
An indictment contains only allegations. The defendants are presumed innocent unless and until proven guilty.
See attachment for specific information on individual defendants.
Delta Crossroads
Attachment
Statutory Sentences
Conspiracy to distribute and to possess with intent to distribute more than five hundred grams of mixtures containing cocaine and more than twenty-eight grams of mixtures containing cocaine base, commonly known as crack cocaine, in violation of 21 U.S.C. ' 846 carries a possible punishment of no less than five years and up to forty imprisonment, a fine of up to $5 million, and not less than four years and up to life supervised release.
Possession with intent to distribute cocaine in violation of 21 U.S.C. ' 841(a)(1) carries a possible punishment up to twenty years imprisonment, a fine of up to $1 million, and not less than three years and up to life supervised release.
Possession with intent to distribute crack cocaine in violation of 21 U.S.C. ' 841(a)(1) carries a possible punishment up to twenty years imprisonment, a fine of up to $1 million, and not less than three years and up to life supervised release.
The use of a telephone in furtherance of a drug trafficking crime in violation of 21 U.S.C. § 846 carries a possible punishment of up to four years imprisonment, a fine of up to $250,000, and up to one year supervised release.
The possession of a firearm in furtherance of a drug trafficking crime in violation of 18 U.S.C. ' 924(c) carries a possible punishment of no less than five years and up to life imprisonment, up to a $250,000 fine, and up to five years supervised release.
Osiel Acuna-Perez age 34 (BOP Custody) Memphis, TN Demetreuis Barrett age 30 West Memphis, AR Brandon Bohannon age 29 West Memphis, AR Brent Bohannon age 21 West Memphis, AR Willie Brown age 35 West Memphis, AR Willie Cooper age 50 West Memphis, AR David Edwards age 28 Olive Branch, MS Wendell Glenn age 27 West Memphis, AR David Green age 25 West Memphis, AR Delvin Green age 23 West Memphis, AR Courtney Hamilton age 23 West Memphis, AR John Hayes age 48 Houston, TX Rafael McDaniel age 31 West Memphis, AR Michael McDonald age 27 West Memphis, AR Gregory Miller age 34 (BOP Custody) Memphis, TN Deloricko Prewitt age 32 West Memphis, AR Detarious Robinson age 21 West Memphis, AR Dominique Robinson age 31 West Memphis, AR Jesse Robinson age 23 West Memphis, AR Ronnie Sanes age 33 West Memphis, ARWatertown Man Charged with Unlawful Taking of Migratory Birds and Lacey Act ViolationsRead the Press Release
United States Attorney Brendan V. Johnson announced that a Watertown, South Dakota, man has been charged with Unlawful Taking of Migratory Birds and Lacey Act Violations by an Information filed October 30, 2013.
Roger Meyer, age 52, appeared before U.S. Magistrate Judge William D. Gerdes on November 8, 2013, and pled not guilty to the charge.
The maximum penalty upon conviction is 1 year of imprisonment and/or a $100,000 fine, 1 year of supervised release and an additional year of supervised release upon revocation, and a $25 special assessment to the Federal Crime Victims Fund. Restitution may also be ordered.
The charges are merely accusations, and Meyer is presumed innocent until and unless proven guilty.
The investigation is being conducted by the U.S. Fish and Wildlife Service. Assistant U.S. Attorney Meghan N. Dilges is prosecuting the case.
Meyer was released on bond pending trial which has not been set.
Waterford Man Sentenced to Federal Prison for Mortgage Fraud OffensesRead the Press Release
Deirdre M. Daly, Acting United States Attorney for the District of Connecticut, announced that JUAN VELEZ, 60, of Waterford, was sentenced today by U.S. District Judge Robert N. Chatigny in Hartford to 12 months and one day of imprisonment, followed by five years of supervised release, for his role in a mortgage fraud scheme. Judge Chatigny also ordered VELEZ to spend the first six months of his supervised release in home confinement, and to perform 120 hours of community service.
According to court documents and statements made in court, in 2006 and 2007, VELEZ and others engaged in a mortgage fraud scheme involving multiple properties in New London. As part of the scheme, VELEZ acquired properties from a co-defendant and other individuals and then sold the properties to another co-defendant, Flavia Mendoza, at inflated prices using fraudulently obtained mortgage loans.
On June 20, 2013, VELEZ pleaded guilty to one count of bank fraud. In pleading guilty, VELEZ specifically acknowledged that he was involved in the fraudulent transaction of a property located at 624-626 Montauk Avenue in New London. When VELEZ sold the property to Mendoza, the loan paperwork contained multiple false statements, including information related to Mendoza’s income, her intention to occupy the property as her primary residence, and the amount of money she was providing to purchase the property. Additionally, the Housing and Urban Development Settlement Statement form (“HUD-1”), which VELEZ signed, falsely stated that Mendoza had provided VELEZ with approximately $29,760 for the purchase of the property when Mendoza had not, in fact, provided any down payment money for the transaction. Based on these false statements, Mendoza obtained a mortgage loan in the amount of $492,699 from the bank.
VELEZ, Mendoza and others shared the profits of this and other fraudulently obtained residential mortgage loans, which totaled more than $1.2 million.
Judge Chatigny ordered VELEZ to pay restitution in the amount of $908,695.64 to four victim financial institutions.
Mendoza has pleaded guilty and awaits sentencing.
This matter was investigated by the U.S. Postal Inspection Service, the Internal Revenue Service – Criminal Investigation and the Federal Bureau of Investigation. The case is being prosecuted by Assistant U.S. Attorneys Michael S. McGarry and Peter S. Jongbloed.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
[email protected]Wanblee Woman Pleads Guilty to Conspiracy to Distribute MethamphetamineRead the Press Release
United States Attorney Brendan V. Johnson announced that Shy Bettelyoun, age 30, of Wanblee, South Dakota, appeared before U.S. Magistrate Judge Veronica L. Duffy, on November 8, 2013, and pled guilty to Conspiracy to Distribute a Controlled Substance and Distribution of a Controlled Substance.
The maximum penalty upon conviction is up to 20 years of imprisonment and/or a $1,000,000 fine.
On or about August 2009 through February 20, 2013, Bettelyoun conspired with other persons to distribute 50 grams or more of methamphetamine in and around the Pine Ridge Indian reservation.
The investigation was conducted by the Northern Plains Safe Trails Drug Enforcement Task Force, the Bureau of Indian Affairs Office of Justice Services, the Federal Bureau of Investigation, and Rapid City Police Department. The case is being prosecuted by Assistant U.S. Attorney Ted L. McBride.
A presentence investigation was ordered and a sentencing date has not been set. The defendant was remanded to the custody of the U.S. Marshals Service pending sentencing.
US Attorney Marshall presents at White House Tribal Leaders ConferenceRead the Press Release
US Attorney Amanda Marshall with Grand Ronde Tribal Council Member Cheryle Kennedy
U.S. Attorney’s Office for the Districts of Guam and the Northern Mariana Islands Conducts Training in Palau, Pohnpei and ChuukRead the Press Release
Alicia A.G. Limtiaco, U.S. Attorney for the Districts of Guam and the Northern Mariana Islands (NMI), announced that her office, together with the FBI, conducted training in the Republic of Palau; Pohnpei State, Federated States of Micronesia (FSM), and Chuuk State, FSM. The training was held in Palau in December 6-7, 2012, in Ponape on January 7- 8, 2013, and in Chuuk on January 9-10, 2013. U.S. Attorney Limtiaco, AUSA Rosetta San Nicolas, and AUSA Rami Badawy conducted presentations on topics including, “Pacific Regional Response to Combat Human Trafficking - Collaboration in the Western Pacific;” “Introduction to Human Trafficking Investigation and Prosecution;” and “Nuts and Bolts: Investigation and Prosecution of Human Trafficking Cases;” and “Bullying and Cyberbullying.” FBI Special Agent Jason Todd provided training on “Active Listening; Suspect Interviews;” “Crime Scene Investigation;” and “Introduction to Cyber Crime.”The U.S. Attorney’s Office (“USAO”) for the Districts of Guam and the NMI has been and continues to work collaboratively with the National District Attorney’s Association; U.S. Department of Interior, Office of Insular Affairs, Federal Ombudsman Office; and U.S. Department of State, Monitoring of Trafficking in Persons Office, on a Pacific Regional Response to Combat Human Trafficking. The Pacific Regional Response to Combat Human Trafficking initiative employs a multidisciplinary model, including participation, coordination, and collaboration among law enforcement; prosecution; victim service providers; social services; medical, mental and public health professionals; faith based organizations; educational institutions; Consulates; and other community stakeholders. The response calls for the establishment and provision of victim services, investigation and prosecution of human trafficking, training opportunities, community outreach/ public awareness and prevention programs, and creation of human trafficking task forces and coalitions in the Pacific region island communities. Providing fundamental training in human trafficking, including victimization, investigation and prosecution, prevention efforts, and other related topics, to law enforcement; prosecution; victim service providers; social services; medical, mental and public health professionals; faith based organizations; educational institutions; Consulates; and other community stakeholders, in our Pacific region island communities, is critical to effective prevention and enforcement efforts in the region.
Participants also learned about human trafficking, including sex trafficking and labor trafficking, the seriousness of the problem, and how to identify, communicate with, and respond to the needs of victims. Also discussed was a review of the Trafficking Victims Protection Act and other related federal laws.
The second day brought to the participants an overview of technology, what cybercrime is and related issues such as terrorism. Participants were also given an overview of bullying and cyberbullying; the seriousness of the problem; the impact on the community including youth suicide; enforcement efforts including civil rights lawsuits and consent decrees issued against school districts; and prevention efforts including public awareness outreaches to schools and parent groups, training of school districts, and other related activities.
Participants were provided information about child sexual and physical abuse. Also discussed were issues relating to children with special needs, and the relationship between child abuse and human trafficking of children.
U.S. Attorney’s Office for the Districts of Guam and the Northern Mariana Islands Conducts Training in Palau, Pohnpei and ChuukRead the Press Release
“Strategies for Justice – Collaboration in the Western Pacific”
Alicia A.G. Limtiaco, U.S. Attorney for the Districts of Guam and the Northern Mariana Islands (NMI), announced that her office, together with the FBI, conducted training in the Republic of Palau; Pohnpei State, Federated States of Micronesia (FSM), and Chuuk State, FSM. The training was held in Palau in December 6-7, 2012, in Ponape on January 7- 8, 2013, and in Chuuk on January 9-10, 2013. U.S. Attorney Limtiaco, AUSA Rosetta San Nicolas, and AUSA Rami Badawy conducted presentations on topics including, “Pacific Regional Response to Combat Human Trafficking - Collaboration in the Western Pacific;” “Introduction to Human Trafficking Investigation and Prosecution;” and “Nuts and Bolts: Investigation and Prosecution of Human Trafficking Cases;” and “Bullying and Cyberbullying.” FBI Special Agent Jason Todd provided training on “Active Listening; Suspect Interviews;” “Crime Scene Investigation;” and “Introduction to Cyber Crime.”
The U.S. Attorney’s Office (“USAO”) for the Districts of Guam and the NMI has been and continues to work collaboratively with the National District Attorney’s Association; U.S. Department of Interior, Office of Insular Affairs, Federal Ombudsman Office; and U.S. Department of State, Monitoring of Trafficking in Persons Office, on a Pacific Regional Response to Combat Human Trafficking. The Pacific Regional Response to Combat Human Trafficking initiative employs a multidisciplinary model, including participation, coordination, and collaboration among law enforcement; prosecution; victim service providers; social services; medical, mental and public health professionals; faith based organizations; educational institutions; Consulates; and other community stakeholders. The response calls for the establishment and provision of victim services, investigation and prosecution of human trafficking, training opportunities, community outreach/ public awareness and prevention programs, and creation of human trafficking task forces and coalitions in the Pacific region island communities. Providing fundamental training in human trafficking, including victimization, investigation and prosecution, prevention efforts, and other related topics, to law enforcement; prosecution; victim service providers; social services; medical, mental and public health professionals; faith based organizations; educational institutions; Consulates; and other community stakeholders, in our Pacific region island communities, is critical to effective prevention and enforcement efforts in the region.
Participants also learned about human trafficking, including sex trafficking and labor trafficking, the seriousness of the problem, and how to identify, communicate with, and respond to the needs of victims. Also discussed was a review of the Trafficking Victims Protection Act and other related federal laws.
The second day brought to the participants an overview of technology, what cybercrime is and related issues such as terrorism. Participants were also given an overview of bullying and cyberbullying; the seriousness of the problem; the impact on the community including youth suicide; enforcement efforts including civil rights lawsuits and consent decrees issued against school districts; and prevention efforts including public awareness outreaches to schools and parent groups, training of school districts, and other related activities.
Participants were provided information about child sexual and physical abuse. Also discussed were issues relating to children with special needs, and the relationship between child abuse and human trafficking of children.
A photo of some of the speakers at the training is attached
From left to right, U.S. Attorney Alicia Limtiaco, Dr. Sharon Cooper, Suzanna Tiapula, NDAA Executive Director, and Dr. Kimberly Chang.U.S. Attorney's Office, Cleveland Clinic and Others to Host Daylong Summit on Heroin EpidemicRead the Press Release
The Cleveland Clinic and United States Attorney’s Office, together with many partners, will host a daylong summit on the growing heroin epidemic in Northeast Ohio on Thursday, November 21 at the InterContinental Hotel.
“Heroin: A Crisis Facing Our Entire Community” will look at heroin abuse from the perspectives of the medical, treatment, education, prevention and law enforcement communities. The day will culminate with the development of community action plan that will lay out strategies and next steps in turning back the tide of heroin addiction.
“Greater Cleveland’s leading institutions are coming together to find solutions to this public health crisis,” said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio. “The fight against heroin is not just about arrests. It is also about prevention and treatment.”
“We support the efforts of the U.S. Attorney’s Office for bringing together this collaboration to stop the escalating abuse of heroin taking place in our communities,” said David Rowan, Cleveland Clinic’s Chief Legal Officer. “Through this summit, we have an opportunity to fight this battle on multiple levels by bringing together healthcare providers, criminal investigators, and experts in addiction and counseling.”
The summit will take place Nov. 21 from 8 a.m. until 3:30 p.m at the InterContinental Hotel, 9801 Carnegie Ave., Cleveland, 44106.
The threat is real. Heroin overdose fatalities are up about 400 percent in recent years in parts of Northeast Ohio. Police and prosecutors report a huge influx in both the availability of heroin and the number of heroin-related crimes.
There are also significant challenges from this crisis that are facing the medical profession. Doctors are grappling with how to effectively treat pain will responsibly prescribing opioids. Treatment professionals struggle with how to provide resources and help to people struggling with addiction, while parents, educators and others search for effective strategies to keep people from trying heroin in the first place.
The daylong event will feature speakers at the forefront of dealing with the heroin epidemic, as well as panel discussions and breakout sessions.
The summit is sponsored by the United States Attorney’s Office, the Cleveland Clinic, the Cuyahoga County Executive, the Ohio Attorney General, MetroHealth Medical Center, University Hospitals, Cuyahoga County Common Pleas Court, the Cleveland Division of Police, the Drug Enforcement Administration, the Federal Bureau of Investigation, the Ohio State Medical Board, the Ohio State Pharmacy Board, Cuyahoga County Board of Health, the Cuyahoga County Medical Examiner, the ADAMHS Board., the Westshore Enforcement Bureau and others.
Tracy Hope Davis Is Appointed U.S. Trustee for Northern and Eastern California, NevadaRead the Press Release
WASHINGTON–Tracy Hope Davis has been appointed by Attorney General Eric Holder as U.S. Trustee for Northern and Eastern California and Nevada (Region 17), effective on November 27, 2013, the Executive Office for U.S. Trustees announced today. She replaces August B. Landis, who has been appointed to the U.S. Bankruptcy Court for the District of Nevada.
“I am delighted to announce the appointment of Tracy Hope Davis as U.S. Trustee for Northern and Eastern California and Nevada,” stated Clifford J. White III, Director of the Executive Office for U.S. Trustees. “Tracy has done an outstanding job as U.S. Trustee in New York, Connecticut and Vermont, and is nationally recognized for her superb oversight of complex chapter 11 cases in the Southern District of New York. We are fortunate to have her bring her expertise to another vital region of the country and to continue to rely on her leadership in developing national policies and initiatives.”
Ms. Davis was appointed as U.S. Trustee in New York, Connecticut and Vermont (Region 2) in August 2010. She joined the U.S. Trustee Program (USTP) in 1997 as a Trial Attorney before being named as the Assistant U.S. Trustee in the Southern District of New York. She has also served as the Acting Assistant U.S. Trustee in the Eastern District of New York (Brooklyn) and the Acting U.S. Trustee for Region 2. Previously, she practiced bankruptcy law in New York City and served as law clerk to the Honorable Cornelius Blackshear, U.S. Bankruptcy Court, Southern District of New York (retired).
Ms. Davis received a law degree from Rutgers Law School in Newark, N.J., and a Bachelor of Arts degree from Wells College in Aurora, N.Y. She has served in various capacities as a Wells College alumna, including as a member of the Wells College Board of Trustees and as a vice president on the Alumnae Board of Wells College.
The USTP is the component of the Justice Department that protects the integrity of the bankruptcy system by overseeing case administration and litigating to enforce the bankruptcy laws. The USTP has 21 regions and 95 field offices. Region 17 is headquartered in San Francisco, with additional offices in Fresno, Oakland, Sacramento and San Jose, Calif., and Las Vegas and Reno, Nev.
Contact:Jane Limprecht, Public Information Officer
Executive Office for U.S. Trustees
(202) 305-7411Three Somali Immigrants Sentenced for Providing Support to Foreign TerroristsRead the Press Release
SAN DIEGO – Basaaly Saeed Moalin, a cabdriver who was convicted by a federal jury of providing material support to the terrorist group al-Shabaab, was sentenced today by U.S. District Judge Jeffrey T. Miller to 18 years in prison.
Also sentenced at the same hearing were Mohamed Mohamed Mohamud, the imam at a popular mosque frequented by the city’s immigrant Somali community, to 13 years in prison; and Issa Doreh, who worked at a money transmitting business that was the conduit for moving the illicit funds, to 10 years in prison.
In sentencing Moalin, Judge Miller acknowledged the defendant’s considerable support from the Somali community, his childhood scars from violence in war-torn Somalia and his philanthropy as a naturalized American. However, he noted Moalin’s virtuous behavior “is substantially offset” by his collaboration with al-Shabaab and one of its most prominent leaders - Aden Hashi Ayrow.
Judge Miller said he imposed part of the sentence consecutively – making it three years longer - because Moalin went beyond financial assistance and provided a house to Ayrow. Judge Miller described that action as “an offense of a different magnitude,” noting that Moalin personally offered the home in Mogadishu to advance the agenda of al-Shabaab and to help hide weapons. “This count went beyond financial support and entered into another realm,” Judge Miller said.
At trial, the United States played for the jury a recorded telephone conversation in which Moalin gave the terrorists in Somalia permission to use his house, telling Ayrow that “after you bury your stuff deep in the ground, you would, then, plant trees on top.” Prosecutors argued at trial that Moalin was offering a place to hide weapons.
“These men willfully sent money to a terrorist organization, knowing al-Shabaab’s extremely violent methods, and knowing the U.S. had designated it as a foreign terrorist organization,” said U.S. Attorney Laura Duffy. “Months of intercepted phone conversations included discussion of suicide bombing, assassinations and Jihad. We are satisfied that because of this investigation and prosecution, we have furthered our mission to safeguard national security by blocking financial support to this dangerous group.”
FBI Special Agent in Charge, Daphne Hearn, stated: "I want to commend the work of the FBI's Joint Terrorism Task Force (JTTF) and the U.S. Attorney's Office who worked countless hours to successfully investigate and prosecute this case. As demonstrated in this case, the multi-agency partnerships which make up the JTTF continue to play a critical role in the day-to-day protection of our communities and our national security.”
“Today’s sentencing underscores HSI’s commitment to aggressively investigate those who engage in or attempt to support the financing of foreign terrorist organizations,” said Nick Annan, acting Special Agent in Charge for ICE HSI in San Diego. “I commend all of our partners on the San Diego Joint Terrorism Task Force for their exhaustive efforts to dismantle the plot that aimed to provide support to terrorists who wish to harm us.”
Moalin and his co-conspirators were found guilty during a three-week trial in February. The United States presented evidence that Moalin, Mohamud, Doreh and a fourth defendant, Ahmed Nasiri Taalil Mohamud, conspired to provide money to al-Shabaab, a violent and brutal militia group that engages in suicide bombings, targets civilians for assassination, and uses improvised explosive devices. In February, 2008, the U.S. Department of State formally designated al-Shabaab as a foreign terrorist organization.
At trial, the jury listened to dozens of the defendants’ intercepted telephone conversations, including many between Moalin and Ayrow. In those calls, Ayrow implored Moalin to send money to al-Shabaab, telling Moalin that it was “time to finance the Jihad.”
Ayrow told Moalin, “You are running late with the stuff. Send some and something will happen.” Ayrow was subsequently killed in a missile strike on May 1, 2008.
According to evidence at trial, the defendants conspired to transfer the funds from San Diego to Somalia through the Shidaal Express, a now-defunct money transmitting business in San Diego.
The fourth defendant, Ahmed Nasiri Taalil Mohamud, a cabdriver from Anaheim, is scheduled to be sentenced January 31, 2014 at 10 a.m. before Judge Miller.
This case was prosecuted in federal court in San Diego by Assistant U.S. Attorneys William Cole and Caroline Han and Department of Justice Trial Attorney Steven Ward. This case was investigated by the San Diego Joint Terrorism Task Force; the Federal Bureau of Investigation; the Department of Homeland Security, Immigration and Customs Enforcement; and the Department of Homeland Security, Customs and Border Protection.
DEFENDANTS Criminal Case No. 10CR4246-JM Basaaly Saeed Moalin
Mohamed Mohamed Mohamud
Issa Doreh
Ahmed Nasir Taalil Mohamud SUMMARY OF CHARGESCount 1 (all defendants) : Title 18, United States Code, Section 2339A(a)(1) - Conspiracy provide
material support to terrorists; Maximum penalties: 15 years in prisonCount 2 (all defendants): Title 18, United States Code, Section 2339B(a)(1) - Conspiracy provide
material support to foreign terrorist organization; terrorists; Maximum penalties: 15 years in prisonCount 3 (all defendants): Title 18, United States Code, Section 1956(h) – Conspiracy to launder
monetary instruments; Maximum penalties: 15 years in prisonCount 4 (Basaaly Moalin) Title 18, United States Code, Section 2339A(a) – Providing material support to
terrorists; Maximum penalties: 15 years in prisonCount 5 (defendants Basaaly Moalin, Mohamed Mohamed Mohamud and Issa Doreh) Title 18, United
INVESTIGATING AGENCIES
States Code, Section 2339B(a)(1) – Providing material support to foreign terrorist organization;
Maximum penalties 15 years in prisonSan Diego Joint Terrorism Task Force
Federal Bureau of Investigation
Homeland Security Investigations, Immigration and Customs Enforcement
Homeland Security Investigations, Customs and Border ProtectionThomas Andrew Quinton Pleads Guilty in U.S. Federal CourtRead the Press Release
The United States Attorney's Office announced that during a federal court session in Great Falls, on November 12, 2013, before U.S. Magistrate Judge Keith Strong, THOMAS ANDREW QUINTON, a 32-year-old resident of Lethbridge, Alberta, Canada, pled guilty to travel with the intent to engage in illicit sexual conduct. Sentencing has been set for February 7, 2014. He is currently detained.
In an Offer of Proof filed by Assistant U.S. Attorney Michael S. Lahr, the government stated it would have proved at trial the following:
In June 2013, members of the Montana Internet Crimes Against Children (ICAC) Task Force in Great Falls conducted a "catch the predator" operation. An advertisement was posted on Craigslist in an attempt to target individuals in Great Falls and the surrounding area who were interested in engaging in sexual conduct with a minor child.
On June 24, 2013, an agent posted one such ad and received numerous responses. The agent then used an undercover persona to pose as a fictitious person named Teresa Smith, a 38-year-old female in Great Falls living with her 12-year-old niece, Katie Smith. The agent exchanged several e-mails with an individual responding to the ad who ultimately identified himself as Thomas Andrew Quinton, a Canadian citizen. The e-mails from QUINTON contained descriptions of sexual acts QUINTON wanted to engage in with Katie. QUINTON also sent a photograph of himself and two more of his penis.
Beginning July 2, 2013, QUINTON began texting the agent stating that he would be taking time off work. The agent exchanged 375 text messages with QUINTON between July 2, 2013, and July 3, 2013. Many of the text messages contained descriptions of sexual acts or were of a sexual nature. QUINTON was advised on multiple occasions via text and e-mail that Katie was a 12-year-old girl.
The telephone number QUINTON used was identified as a Canadian-based number out of Lethbridge, Alberta.
QUINTON was given the address of the house being utilized by ICAC Task Force agents for the operation, and QUINTON agreed to travel to the residence to engage in sexual conduct with Katie.
At around 4:15 p.m. on July 3, 2013, QUINTON parked his truck at the residence and walked to the house where he was arrested and taken into state custody charged with sexual abuse of children.
The agent and a Great Falls Police detective interviewed QUINTON who stated that he had traveled from Lethbridge to Great Falls on July 3, 2013, to have sex with Katie. He confirmed his cellular phone number was the number used for the text messaging and that he had corresponded via text messaging and e-mails with Teresa and Katie for the purpose of meeting Katie and engaging in sexual acts. The agent also confirmed that QUINTON and his vehicle had entered the United States at the Sweetgrass Port of Entry on July 3, 2013, at 2:28 p.m.
QUINTON faces possible penalties of 30 years in prison, a $250,000 fine, and lifetime supervision.
The investigation was a cooperative effort between the U.S. Department of Homeland Security - Homeland Security Investigations, the Montana Internet Crimes Against Children (ICAC) Task Force, and the Great Falls Police Department.
Statement of Mythili Raman Acting Assistant Attorney General U.S. Justice Department Criminal Division Before the Committee on Homeland Security and Governmental Affairs United States Senate for a Hearing Entitled "Beyond the Silk Road"Read the Press Release
Chairman Carper, Ranking Member Coburn, and distinguished Members of the Committee: Thank you for the opportunity to appear before the Committee today to discuss the Department of Justice’s work regarding virtual currencies. I am honored to represent the Department at this hearing and to describe for you our approach to virtual currencies, our recent successes in prosecuting criminals who use virtual currencies for illicit purposes, and some of the challenges we face as virtual currency systems continue to evolve.
The Department of Justice recognizes that many virtual currency systems offer legitimate financial services and have the potential to promote more efficient global commerce. We have also seen, however, that certain aspects of virtual currencies appeal to criminals and present a host of new challenges to law enforcement.
The concept of virtual currencies is not new to the Department and, indeed, the Department has investigated and prosecuted the illicit use of virtual currencies since the late 1990s, when criminals first began using systems such as WebMoney and e-Gold to conduct their business. Over the last 15 years, however, virtual currencies have evolved and diversified significantly, challenging the Department to adapt our capabilities to deal with new systems and threats.
As with all emerging technologies, the Department has aggressively used our existing tools and capabilities to combat illegal activities involving virtual currencies. The Department has two primary law enforcement interests in virtual currency: (1) deterring and prosecuting criminals using virtual currency systems to move or hide money that is used to facilitate, or is derived from, criminal or terrorist acts, i.e., money laundering; and (2) investigating and prosecuting those virtual currency services that themselves violate laws aimed at illegal money transmission and money laundering. As I will describe in my testimony, the Department is committed to using all the tools at our disposal to ensure that those law enforcement interests are met, even as virtual currency systems evolve.
“Virtual currency” is a medium of exchange circulated over a network, typically the Internet, which is not backed by a government. These systems can be both centralized and decentralized.
Early centralized models, where the currency is controlled by a single private entity, have expanded and now encompass a wide range of business concepts. Some centralized virtual currencies take the form of digital precious metals, such as e-Gold and Pecunix, where users exchange digital currency units ostensibly backed by gold bullion or other precious metals. Others exist within popular online games or virtual worlds, such as Farmville, Second Life, or World of Warcraft. Still others are online payment systems such as WebMoney and Liberty Reserve, which are available generally outside of specific online communities and denominate users’ accounts in virtual currency rather than U.S. Dollars, Euros, or some other national currency. Decentralized systems such as Bitcoin, which have no centralized administrating authority and instead operate as peer-to-peer transaction networks, entered the scene relatively recently but are growing rapidly. A network of sites and services, including exchangers who buy and sell virtual currencies in exchange for national currencies or other mediums of value, have developed around virtual currency systems, as well.
Criminals are nearly always early adopters of new technologies and financial systems, and virtual currency is no exception. As virtual currency has grown, it has attracted illicit users along with legitimate ones. Our experience has shown that some criminals have exploited virtual currency systems because of the ability of those systems to conduct transfers quickly, securely, and often with a perceived higher level of anonymity than that afforded by traditional financial services. The irreversibility of many virtual currency transactions additionally appeals to a variety of individuals seeking to engage in illicit activity, as does their ability to send funds cross-border.
Cyber criminals were among the first illicit groups to take widespread advantage of virtual currency. We have seen that many players in the cyber underground rely on virtual currency to conduct financial transactions. Early users of virtual currency also included criminals involved in the trafficking of child pornography, credit card fraud, identity theft, and high-yield investment schemes. As virtual currency became more widespread and criminals became increasingly computer savvy, other criminal groups moved to capitalize on virtual currency, as well. There are now public examples of virtual currency being used by nearly every type of criminal imaginable.
It is not surprising that criminals are drawn to services that allow users to conduct financial transactions while remaining largely anonymous. And, indeed, some of the criminal activity occurs through online black markets, many of which operate as Tor hidden services. Tor hidden services are sites accessible only through Tor, an anonymizing network that masks users’ Internet traffic by routing it through a series of volunteer servers, called “nodes,” across the globe. Online black markets capitalize on Tor’s anonymizing features to offer a wide selection of illicit goods and services, ranging from pornographic images of children to dangerous narcotics to stolen credit card information.
At the same time, we have seen that though virtual currency systems are growing rapidly, few systems currently exist that could easily accommodate the hundreds of millions of dollars often moved in a single large-scale money laundering scheme. Transaction size is limited by the carrying capacity of the virtual currency systems and the exchangers. When taken in the aggregate, however, the relatively small dollar values associated with most illicit virtual currency transactions quickly add up. At their prime, e-Gold and Liberty Reserve, two virtual currency systems prosecuted by the Department, each moved the equivalent of over $1 billion in illegal proceeds annually. As virtual currencies grow, the capacity for larger single transactions grows, as well.
The Department has prosecuted several of these systems, such as e-Gold, based on evidence that they can be, and often are, intentionally designed to facilitate illegal activity. These services typically do not conduct any meaningful customer due diligence and do not screen for transactions related to money laundering or terrorist financing. At the same time, these complicit and illicit businesses allow users to conceal their identities and maintain high levels of anonymity during transactions.
To be clear, virtual currency is not necessarily synonymous with anonymity. A convertible virtual currency with appropriate anti-money laundering and know-your-customer controls, as required by U.S. law, can safeguard its system from exploitation by criminals and terrorists in the same way any other money services business could. As virtual currency systems develop, it is imperative to law enforcement interests that those systems comply with applicable anti-money laundering and know-your-customer controls.
Exploitation by malicious actors is a problem faced by all types of financial services and is not unique to virtual currency systems. Although malicious actors have utilized emerging technologies to further their criminal schemes, the Department has thus far been able to apply existing tools to ensure vigorous prosecution of these schemes.
The Department relies on money services business, money transmission, and anti-money laundering statutes to curtail this sort of unlawful activity. Many virtual currency systems, exchangers, and related services operate as money transmitters, which are part of a larger class of institutions called money services businesses. Money transmitters are required under 31 U.S.C. § 5330 to register with the Financial Crimes Enforcement Network (FinCEN). Most states also require money transmitters to obtain a state license in order to conduct business in the state. Any money transmitter that fails to register with FinCEN or to obtain the requisite state licensing may be subject to criminal prosecution under 18 U.S.C. § 1960. Additionally, the general money laundering and spending statutes, 18 U.S.C. §§ 1956 and 1957, cover financial transactions involving virtual currencies. Finally, where virtual currencies are used in furtherance of underlying criminal activity, the Department can rely on traditional criminal statutes proscribing that activity, such as narcotics, cybercrime, child exploitation, and firearms laws.
Some of the major prosecutions in recent years involving virtual currency services are as follows.
The Department first took major action against an illicit virtual currency service in 2007, when it indicted e-Gold and its three principal owners on charges related to money laundering and operating an unlicensed money transmitting business. E-Gold offered digital accounts purportedly backed by physical gold bullion. A valid e-mail address was the only information required to set up an account, allowing users to conduct highly anonymous international transactions over the Internet. As a result, e-Gold became a popular payment method for sellers of child pornography, operators of investment scams, and perpetrators of credit card and identity fraud. At its peak, e-Gold reportedly moved over $6 million each day for more than 2.5 million accounts. In 2008, e-Gold and the three individuals pleaded guilty.Following the e-Gold indictment, several similar but smaller systems and exchangers were indicted or closed themselves down to evade law enforcement detection. According to publicly filed charging documents, an executive of one of those businesses, Arthur Budovsky, then set out to create Liberty Reserve, an improved centralized virtual currency variation allegedly designed to evade U.S. law enforcement. Among other things, Liberty Reserve operated offshore –it was based in Costa Rica--and purportedly recommended that its customers use money exchangers located in countries without significant governmental money-laundering oversight or regulation. Moreover, Budovsky, the principal founder of Liberty Reserve, was so committed to avoiding the reach of U.S. law that, according to the indictment, in 2011, he formally renounced his U.S. citizenship and became a Costa Rican citizen in order to avoid facing justice in the United States .
Despite Budovsky’s alleged efforts, earlier this year, the Department indicted Liberty Reserve and its executives, including Budovsky, for running a $6 billion money laundering operation. In a coordinated action, the Department of the Treasury identified Liberty Reserve as a financial institution of primary money laundering concern under Section 311 of the USA PATRIOT Act, effectively cutting it off from the U.S. financial system.
According to the indictment, Liberty Reserve allowed users to send and receive funds with a high level of anonymity by not requiring users to validate their identities and allowing users to make untraceable fund transfers in exchange for a privacy fee. Many of the transactions were sent to or from users in the United States, but Liberty Reserve never registered with the appropriate U.S. authorities. As revealed in the Department’s filings, Liberty Reserve became a system of choice for cyber criminals and was used in a wide array of illegal activity, including credit card fraud, identity theft, investment fraud, computer hacking, and child pornography. As a result of the Department’s action, the site was shuttered and effectively put out of business, and five defendants were arrested. One is in custody in the United States, one has entered a guilty plea, and three others, including the lead defendant Budovsky, are pending extradition. The case exemplifies the Department’s resolve to pursue purported major money laundering facilitators, even those who hide offshore.
Just last month, the Department took action against one of the most popular online black markets, Silk Road. Allegedly operated by a U.S. citizen living in California at the time of his arrest, Silk Road accepted bitcoins exclusively as a payment mechanism on its site. The Department’s complaint alleges that, in less than three years, Silk Road served as a venue for over 100,000 buyers to purchase hundreds of kilograms of illegal drugs and other illicit goods from several thousand drug dealers and other criminal vendors. The site also purportedly laundered the proceeds of these transactions, amounting to hundreds of millions of dollars in bitcoins. In addition to arresting the site’s operator and shutting down the service, the Department to date has seized over 170 thousand bitcoins, valued as of Friday, November 15, 2013, at over $70 million.
A separate indictment charges Silk Road’s operator with drug distribution conspiracy, attempted witness murder, and using interstate commerce facilities in the commission of murder-for-hire. With regard to the murder-related charges, the indictment alleges that the Silk Road operator paid an undercover federal agent to murder one of the operator’s employees.
The cases I just described illustrate not only Department successes in combating illicit use of virtual currency, but also many of the challenges investigators face when they encounter these systems, some of which may ultimately require additional legal or regulatory tools.
Virtual currency allows users to send money across the globe without dealing with a traditional financial institution. While this feature provides several benefits for legitimate customers, it can significantly complicate law enforcement efforts to follow the money.
Virtual currency systems have a global reach and clientele. Virtual currency businesses can cater to U.S. clientele while operating on the other side of the world. Investigations into illicit virtual currency businesses therefore often require considerable cooperation from international partners. The Liberty Reserve investigation and takedown, for example, involved coordinated law enforcement action in 17 countries.
The international nature of the transactions poses an additional challenge where the overseas regulatory regime treats virtual currency differently or, as is true in some cases, fails to cover it at all. While this challenge may diminish with the Financial Action Task Force’s recent guidance addressing the need for all countries to develop a risk-based approach to new payment products and services, incongruent regulatory regimes will likely remain a challenge when dealing with virtual currency services overseas.
Among the most significant challenges the Department faces in dealing with virtual currency is the difficulty in obtaining customer records. Because decentralized systems lack any sort of administering authority to collect user information or receive legal process, investigators must rely on information collected by other sources, such as exchangers. Even if the target used a centralized system or exchanger, however, accurate customer records may still be difficult to obtain, or may not exist at all. Illicit users are typically attracted to systems with lax anti-money laundering and know-your-customer controls. These services often attempt to evade U.S. action by operating out of countries that have poor regulatory oversight and are less willing to cooperate with U.S. law enforcement. Even if the system at issue operates in a country with effective regulation and a cooperative relationship with the United States, the legal process for obtaining foreign records is relatively slow when compared to the near-instantaneous speed at which the virtual currency user can send the funds to another jurisdiction.
A final challenge arises from the link between virtual currency and encryption. Decentralized virtual currencies typically rely on an encryption algorithm, rather than a central authority, to administer the currency. These encryption-based currencies, also known as cryptocurrencies, lack a central administering authority that might otherwise possess valuable evidence. In addition, users of these currencies often encrypt their digital wallets, complicating our efforts to seize and forfeit criminal proceeds.
The Department recognizes that virtual currency’s ability to facilitate the global movement of funds by a wide array of illicit actors necessitates a comprehensive and collaborative approach with our domestic and international partners. To promote such coordination, the Department is an active participant in the Virtual Currency Emerging Threats Working Group (VCET). VCET was founded by the Federal Bureau of Investigation (FBI) in early 2012 to mitigate the cross-programmatic threats arising from illicit actors’ use of virtual currency systems. The group leverages the collective subject matter expertise of its members to address issues arising from illicit actors’ use of virtual currency, and deconflicts and shares information and concerns. VCET members represent an array of U.S. Government agencies, including, within the Department, the FBI, the Drug Enforcement Administration, multiple U.S. Attorney’s Offices, and the Criminal Division’s Asset Forfeiture and Money Laundering Section and Computer Crime and Intellectual Property Section.
The Department contributes to several additional interagency groups concerning virtual currencies and emerging payment systems, including the New Payment Methods Ad Hoc Working Group, a subgroup of the Terrorist Finance Working Group, led by the State Department. The FBI specifically has issued numerous intelligence products related to virtual currency, many of which were coauthored with other members of the U.S. Intelligence Community.
The Department is committed to working with our regulatory partners to ensure appropriate coordination on regulatory issues related to virtual currency. The Department participated in meetings and discussions with FinCEN regarding the July 2011 Final Rule on Money Services Businesses and its applicability to virtual currencies, as well as the related March 18, 2013, FinCEN guidance. The Department regards FinCEN’s regulation of many virtual currency services as money transmitters, as well as the resulting applicability of anti-money laundering and know-your-customer requirements under the Bank Secrecy Act, as crucial tools in preventing malicious actors from exploiting virtual currency systems in furtherance of illicit activity.
The Department works closely with FinCEN and the Department of Treasury to coordinate enforcement actions when appropriate. This relationship allowed the Department to unseal the Liberty Reserve indictment in coordination with Treasury’s announcement naming the company as a financial institution of primary money laundering concern under Section 311 of the USA PATRIOT Act. Such coordinated actions are integral tools in combating illicit finance.
The Department anticipates that virtual currency will continue to evolve and grow in popularity. That growth inevitably will be accompanied by an increase in illicit transactions, which makes it critical that virtual currency services understand their legal obligations and requirements. The Department is encouraged by the increasing prominence of legitimate virtual currency services that are attempting to comply with U.S. law. While a number of services have registered at the federal level, many are still struggling with implementing appropriate anti-money laundering, know-your-customer, and customer due diligence programs, as well as complying with state-level regulations and licensing requirements. As members of the U.S. financial community, virtual currency services can and must safeguard themselves from exploitation by criminals and terrorists by implementing legally required anti-money laundering and know-your-customer controls.
As the Administration’s Strategy to Combat Transnational Organized Crime recognizes, transnational organized crime networks are increasingly involved in cybercrime, and can imperil consumers’ faith in emerging digital systems. We must also pay close attention to the critical role of facilitators who cross both the licit and illicit worlds and provide services to legitimate customers and criminals alike.
The Department recognizes that malicious actors are often resourceful, and even legitimate virtual currency services can become unwitting conduits for illicit transactions when these actors are able to defeat or circumvent anti-money laundering controls. Outreach to these systems, much as the Department conducts with the formal financial sector, is an important tool in combating the exploitation of the systems for criminal and terrorist purposes. Because centralized payment systems and exchangers often interact with the traditional financial sector and hold bank accounts at major financial institutions, the range of such Department outreach extends to the financial services community at large, complementing the outreach and training efforts of FinCEN, the primary BSA regulator, and the Department of the Treasury. Department of Justice personnel routinely provide trainings to the private sector, as well as to domestic and international law enforcement and intelligence personnel, and specifically address virtual currency.
Law enforcement, Congress, and regulators must remain vigilant to ensure that the U.S. legal and regulatory structure is sufficiently robust to cover decentralized virtual currencies. The Department looks forward to working with Congress to ensure that law enforcement continues to have the tools necessary to combat the use of virtual currency for illicit purposes.
Chairman Carper and Ranking Member Coburn, I thank you for this opportunity to discuss the Department’s work on virtual currency.
I look forward to any questions that you may have.
Stars of ‘Real Housewives of New Jersey’ Television Series Indicted on Additional Fraud ChargesRead the Press Release
NEWARK, N.J. – Two of the stars of the Bravo television show “The Real Housewives of New Jersey” were indicted today on additional charges of bank fraud and loan application fraud, U.S. Attorney Paul J. Fishman announced.
The 41-count superseding indictment returned by a federal grand jury against Teresa Giudice, 41, and her husband, Giuseppe “Joe” Giudice, 43, both of Towaco, N.J., adds two new counts charging both defendants: one count of bank fraud and one count of loan application fraud. The original 39 counts on which they were indicted on July 29, 2013, which include conspiracy to commit mail and wire fraud, bank fraud, making false statements on loan applications and bankruptcy fraud, as well as charges against Giuseppe Giudice for failure to file tax returns from 2004 through 2008, remain in place.
An arraignment on the new charges has been scheduled for 10:30 a.m., Nov. 20, 2013, before U.S. District Judge Esther Salas in Newark federal court.According to the superseding indictment:
The two additional counts stem from a $361,250 mortgage loan that Teresa Giudice obtained in July 2005. In the course of obtaining the loan, she and Giuseppe Giudice prepared a loan application which falsely stated that Teresa Giudice was employed as a realtor and that she had a monthly salary of $15,000. Teresa Giudice was not employed outside the home at the time.
The bank fraud and loan application fraud counts each carry a maximum potential penalty of 30 years in prison and a $1 million fine.
U.S. Attorney Fishman credited special agents of the Federal Deposit Insurance Corporation, Office of Inspector General, New York Region, under the direction of Special Agent in Charge A. Derek Evans; special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen; and Region 3 U.S. Trustee Roberta DeAngelis and the Newark office of the U.S. Trustee, with the investigation which led to today’s indictment.
The government is represented by Assistant U.S. Attorneys Jonathan W. Romankow and Rachael Honig of the U.S. Attorney’s Office, Criminal Division in Newark.
The charges and allegations contained in the indictment are merely accusations, and the defendants are considered innocent unless and until proven guilty
13-440
Defense counsel:
Giuseppe Giudice: Miles Feinstein Esq., Paterson
Teresa Giudice: Henry E. Klingeman Esq., NewarkGiudice, Giuseppe and Teresa Superseding Indictment
Stars of ‘Real Housewives of New Jersey’ Television Series Indicted on Additional Fraud ChargesRead the Press Release
NEWARK, N.J. – Two of the stars of the Bravo television show “The Real Housewives of New Jersey” were indicted today on additional charges of bank fraud and loan application fraud, U.S. Attorney Paul J. Fishman announced.
The 41-count superseding indictment returned by a federal grand jury against Teresa Giudice, 41, and her husband, Giuseppe “Joe” Giudice, 43, both of Towaco, N.J., adds two new counts charging both defendants: one count of bank fraud and one count of loan application fraud. The original 39 counts on which they were indicted on July 29, 2013, which include conspiracy to commit mail and wire fraud, bank fraud, making false statements on loan applications and bankruptcy fraud, as well as charges against Giuseppe Giudice for failure to file tax returns from 2004 through 2008, remain in place.
An arraignment on the new charges has been scheduled for 10:30 a.m., Nov. 20, 2013, before U.S. District Judge Esther Salas in Newark federal court.According to the superseding indictment:
The two additional counts stem from a $361,250 mortgage loan that Teresa Giudice obtained in July 2005. In the course of obtaining the loan, she and Giuseppe Giudice prepared a loan application which falsely stated that Teresa Giudice was employed as a realtor and that she had a monthly salary of $15,000. Teresa Giudice was not employed outside the home at the time.
The bank fraud and loan application fraud counts each carry a maximum potential penalty of 30 years in prison and a $1 million fine.
U.S. Attorney Fishman credited special agents of the Federal Deposit Insurance Corporation, Office of Inspector General, New York Region, under the direction of Special Agent in Charge A. Derek Evans; special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen; and Region 3 U.S. Trustee Roberta DeAngelis and the Newark office of the U.S. Trustee, with the investigation which led to today’s indictment.
The government is represented by Assistant U.S. Attorneys Jonathan W. Romankow and Rachael Honig of the U.S. Attorney’s Office, Criminal Division in Newark.
The charges and allegations contained in the indictment are merely accusations, and the defendants are considered innocent unless and until proven guilty
13-440
Defense counsel:
Giuseppe Giudice: Miles Feinstein Esq., Paterson
Teresa Giudice: Henry E. Klingeman Esq., NewarkGiudice, Giuseppe And Teresa Superseding Indictment
St. Francis Man Charged with Abusive Sexual ContactRead the Press Release
United States Attorney Brendan V. Johnson announced that Vernon Verdell Blackhorse, age 63, of St. Francis, South Dakota, appeared before U.S. District Judge Roberto A. Lange on November 6, 2013, and pled guilty to Abusive Sexual Contact.
The maximum penalty upon conviction is 6 years in custody and/or a $250,000 fine, 3 years of supervised release, and $100 to the Federal Crime Victims Fund.
The conviction stems from an incident that took place in Eagle Butte between May 1, 2002, and August 30, 2002, when Blackhorse was laying on a couch behind the victim, who was age 11 or 12 at the time. The victim woke up when she felt Blackhorse touching her over the clothing in a sexual manner. The victim jumped off the couch and was able to end the sexual contact.
The investigation was conducted by the Federal Bureau of Investigation and the Rosebud Sioux Tribe Law Enforcement Services. The case is being prosecuted by Assistant U.S. Attorney Marie H. Ruettgers.A presentence investigation was ordered and a sentencing date was set for January 27, 2014. Blackhorse was remanded to the custody of the U.S. Marshals Service pending sentencing.
Springfield Man Sentenced to 14 Years in Prison for Receiving Child PornographyRead the Press Release
SPRINGFIELD, Ill. – A Springfield, Ill., man, Kievan R. Walters, III, 24, was taken into the custody of the U.S. Marshals Service today immediately following his sentencing hearing for receiving child pornography. U.S. District Judge Sue E. Myerscough sentenced Walters, of the 900 block of North Indiana Avenue, Springfield, Ill., to 14 years in federal prison to be followed by 25 years of supervised release following completion of the prison sentence.
Walters pled guilty on Jul. 23, 2013, to one count of receiving child pornography in the fall of 2012.
The case was investigated by the U.S. Immigration and Customs Enforcement Homeland Security Investigations. Assistant U.S. Attorney Gregory K. Harris prosecuted the case.
The case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Romanian National Pleads Guilty to Naturalization FraudRead the Press Release
BOISE – Simona Rus, 36, of Ketchum, Idaho, pleaded guilty today in United States District Court to unlawful procurement of United States Citizenship based on her fraudulent marriage to a United States citizen, U.S. Attorney Wendy J. Olson announced.
According to the plea agreement filed in the case, Rus admitted that, in 2003, she married a U.S. citizen for the sole purpose of obtaining immigration benefits. Rus never resided with her spouse as husband and wife. In January of 2009, Rus misrepresented the nature of her marriage in an application for naturalization to United States Citizenship and Immigration Services (USCIS). In May of 2009, USCIS granted Rus naturalization as a United States citizen as a result of her fraudulent marriage. As part of her plea agreement, Rus stipulated to an order revoking her citizenship.
Rus faces up to ten years in prison, a maximum fine of $250,000, and up to three years of supervised release, in addition to administrative removal proceedings.
Rus is scheduled to be sentenced on February 10, 2014, before U.S. District Judge Edward J. Lodge at the federal courthouse in Boise.
The case was investigated by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI).
Raymond Donovan Williams Convicted of Federal Drug CrimesRead the Press Release
MOBILE, Ala. – Raymond Donovan Williams, 32, of Chickasaw, was convicted in federal court today for his participation in a conspiracy to possess with intent to distribute cocaine, and for possession with intent to distribute cocaine. Williams’ jury trial started before Hon. Kristi K. Dubose this morning, and ended with the jury verdict of guilty on both charges returned shortly before 5:00 p.m. today.
As a result of the guilty verdicts, Judge Dubose remanded Williams into the custody of the United States Marshal’s Office pending the imposition of sentence in the case, and ordered that the sentencing hearing be set for February 14, 2014. She ordered the United States Probation Office to prepare a presentence investigation report to assist her in determining the appropriate sentence, as is required in every criminal case prior to the imposition of sentence. Williams faces terms of imprisonment ranging from 5 years to 40 years on each count.
The case was investigated by the Mobile County Sheriff’s Office and the Department of Homeland Security Investigations. It was prosecuted in the United States Attorney=s Office by Assistant United States Attorney Gloria Bedwell.
Rapid City Woman Pleads Guilty to Concealing A FugitiveRead the Press Release
United States Attorney Brendan V. Johnson announced that Tina Marie Ladeaux, a/k/a Tina M. Cooper, a/k/a Tina Cooperboyd, age 41, of Rapid City, South Dakota, appeared before U.S. Magistrate Judge Veronica L. Duffy on October 31, 2013, and pled guilty to Concealing Person from Arrest.
The maximum penalty upon conviction is 5 years of imprisonment and a $250,000 fine.
The charge stems from Ladeaux concealing her husband, Eric Ladeaux, from law enforcement after being informed there was a warrant for his arrest for Escape on federal charges in September 2012.
The investigation was conducted by the U.S. Marshals Service. The case is being prosecuted by Assistant U.S. Attorney Sarah B. Collins.
A presentence investigation was ordered and a sentencing date was set for February 3, 2014. The defendant was released on bond pending sentencing.
Puerto Rico Man Pleads Guilty to Felony Violation of the Lacey Act for Illegal Sale of Sea Turtle MeatRead the Press Release
SAN JUAN, Puerto Rico – Manuel Garcia-Figueroa, a resident of Playa Añasco, Puerto Rico, pleaded guilty to a bill of information charging him with a felony violation of the Lacey Act for the illegal sale of sea turtle meat, the Justice Department announced today.
According to the information filed in the U.S. District Court in Puerto Rico, Garcia-Figueroa knowingly sold more than $350 of meat and carapaces from endangered hawksbill sea turtles (Eretmochelys imbricata) and meat from a threatened green sea turtle (Chelonia mydas), while knowing that the sea turtles had been taken in violation of the Endangered Species Act (ESA). The illegal sales took place on or about Dec.11, 2009, to on or about Jan. 4, 2010, in and around Playa Añasco. The case resulted from a joint-undercover operation by the National Oceanic and Atmospheric Administration Office of Law Enforcement (NOAA-OLE) and the FBI.
All species of sea turtles found in the Gulf of Mexico, Atlantic Ocean, Caribbean Sea and waters adjacent to the United States are protected by the ESA. Sea turtles are long-lived and slow to reach maturity. Pressures from habitat loss, fishing operations, pollution, illegal harvesting of eggs, and poaching of adults exacerbate the extinction risk faced by these animals. In Puerto Rico, the green sea turtle (Chelonia mydas) is listed as “threatened” under the ESA; the hawksbill sea turtle (Eretmochelys imbricata) is listed as “endangered.”
The Lacey Act is the principal U.S. statute designed to reduce the role that wildlife poaching, selling, and smuggling plays in depleting protected species. Once an ESA-listed wildlife species is taken or possessed illegally, it is unlawful to “import, export, transport, sell, receive, acquire, or purchase” that species. A person commits a criminal violation of the Lacey Act if the illegal conduct involves the sale or purchase of wildlife with a market value in excess of $350, while knowing that the wildlife was taken in violation of or in a manner unlawful under, any underlying law, treaty, or regulation.
The waters around Puerto Rico are designated as a critical habitat for the hawksbill and the green sea turtle. The most significant nesting for the hawksbill within the U.S. occurs in Puerto Rico and the U.S. Virgin Islands. Each year, about 500-1,000 hawksbill nests are laid on Mona Island, Puerto Rico. The green sea turtle population has declined by 48-65 percent over the past century. Puerto Rico is also home to nesting sites for the endangered leatherback sea turtle, the largest species of turtle in the world.
The commonwealth of Puerto Rico contains six national wildlife refuges (Cabo Rojo, Culebra, Desecheo, Laguna Cartagena, Navassa Island and Vieques) and is home to 25 endangered and threatened animal species, 21 of which are found nowhere else on earth
In 2013, the Justice Department’s Environment and Natural Resources Division and the U.S. Attorney’s Office in Puerto Rico announced the formation of the Puerto Rico Environmental Crimes Task Force to investigate and prosecute environmental crimes on the island. Under the new task force, federal investigative agencies are coordinating their efforts to investigate and prosecute those responsible for committing serious environmental crimes.The cases are being prosecuted by Trial Attorney Christopher Hale of the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division and Assistant U.S. Attorneys Carmen Márquez and Hector Ramirez of the District of Puerto Rico. If convicted, the defendant faces a maximum sentence of five years in prison and a $250,000 fine.
Sentencing is scheduled for Feb. 18, 2014.
For more information of environmental crime laws: www.justice.gov/enrd/ENRD_ecs.htmlFor more information on marine turtles: www.nmfs.noaa.gov/pr/species/turtles/
13- 1231
Prince George’s County Drug Dealer Sentenced to 25 Years in PrisonRead the Press Release
Sold Drugs From His Suitland Auto Repair Business
Greenbelt, Maryland – U.S. District Judge Paul W. Grimm sentenced Kevin Leon Mormon, age 33, of Brandywine, Maryland, today to 25 years in prison, followed by 10 years of supervised release, for conspiracy to distribute and possess with intent to distribute crack cocaine.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; and Chief Mark A. Magaw of the Prince George’s County Police Department.
According to evidence presented during Mormon’s three day trial, between July 2009 and June 2012, Mormon conspired with others in the Prince George’s County area to distribute crack and powder cocaine. Beginning in February 2012, the FBI began investigating Mormon’s distribution activity out of his Suitland business, Premier Auto Salon. In late March and early April a confidential source made two controlled purchases at Premier. The first purchase was $1,100 in powder cocaine bought from one of Mormon’s co-conspirators and the second was $1,200 in crack cocaine purchased from Mormon himself.A witness testified that she began buying drugs from Mormon in 2009, purchasing between 2 to 4.5 ounces of crack cocaine once a month from the summer of 2009 to the end of 2010. Beginning in early 2011, the witness estimated that she increased the size and frequency of her crack purchases from Mormon to two to three times a month, in quantities of up to 12 ounces each occasion.
In November 2012, after Mormon had been indicted and while he was serving a six month sentence for a violation of supervised release from a previous federal conviction, FBI agents visited Mormon in prison, and he agreed to speak with them. The agents testified at trial that Mormon told them he had one main supplier for his cocaine, who provided “pretty good” quality cocaine powder for $36,000 per kilogram. Mormon said he bought a half-kilogram at a time and would buy at least weekly and sometimes as often as daily from his supplier. According to the agent’s testimony, Mormon admitted to selling to between 20 and 30 different customers at Premier, and admitted that he occasionally stored drugs in customer vehicles parked outside.
United States Attorney Rod J. Rosenstein praised the FBI and Prince George’s County Police Department for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Adam K. Ake, who prosecuted the case.
Pomona Gang Member Pleads Guilty to Federal Weapons and Drug Offenses in Deal Expected to Bring Sentence of up to 17½ YearsRead the Press Release
LOS ANGELES – A Pomona man pleaded guilty today to a federal drug trafficking charge for possessing more than one-half pound of methamphetamine that he was planning to distribute.
Raymond Anthony Montanez, 24, pleaded guilty today to possession with intent to distribute methamphetamine and being a felon in possession of a firearm.
Montanez pleaded guilty before United States District Judge Philip S. Gutierrez, who is scheduled to sentence the defendant on February 10. As part of the plea agreement that led to this morning’s guilty pleas, prosecutors and Montanez agree that he will be sentenced to at least 10 years in federal prison and up to 17½ years in custody. The actual sentence will be determined by Judge Gutierrez next year.
Authorities recovered 243.7 grams of methamphetamine from Montanez’s residence on July 29, 2012 after he had shot himself in the leg and was brought to the hospital for treatment. Pomona Police Officers investigating the incident responded to his residence, recovered the weapon that Montanez used to shoot himself, found two other firearms, and discovered the narcotics.
The firearms charge relates to Montanez’s possession of a firearm on July 4, 2012. He prohibited from possessing any guns because was previously convicted of a felony in 2008 in state court of carrying a loaded handgun.
The case against Montanez is the result of an investigation by the San Gabriel Valley Safe Streets Gang Task Force, which is made up of agents and officers from the Federal Bureau of Investigation; the Pomona Police Department; the Drug Enforcement Administration; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Los Angeles County Sheriff’s Department; and the California Department of Corrections and Rehabilitation.
Release No. 13-129
Pittsburgh Resident Sentenced for Heroin DistributionRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-7725 ● Contact: Chris Zumpetta-Parr, Public Affairs SpecialistFollow us on Twitter @NDWVnews
Five Others Appear for Pleas and Sentencing
CLARKSBURG, WEST VIRGINIA – United States Attorney William J. Ihlenfeld, II,
announced that a Pittsburgh, Pennsylvania, resident was sentenced to prison as a result of his conviction on a heroin distribution charge.ANDRE ABRAM, age 32, of Pittsburgh, was sentenced by Judge Irene M. Keeley, to 30 months in prison and six years of supervised release for “Possession with Intent to Distribute Heroin within 1,000 Feet of Koupal Towers.” The Court also ordered the forfeiture of $3,376 in United States currency which constitutes proceeds obtained from the illegal activity. ABRAM was remanded to the custody of the United States Marshal pending designation to a Federal institution. This case was prosecuted by Criminal Chief Shawn A. Morgan and investigated by the Greater Harrison County Drug & Violent Crimes Task Force, consisting of officers and agents from the Clarksburg Police Department, the Bridgeport Police Department, the West Virginia State Police, and the Drug Enforcement Administration. Investigative support for the task force is provided by the Bureau of Alcohol, Tobacco, Firearms & Explosives, the U.S. Marshals Service, and the U.S. Postal Inspection Service.
ANTHONY LUCAS, age 24, an inmate at USP Hazelton was sentenced by Judge Keeley to an additional year in prison to run consecutive to his current 36-month sentence for “Possession of a Homemade Weapon” when staff at the institution searched LUCAS and found a homemade weapon or shank in his sock. The weapon was 8 1/2 inch long piece of metal sharpened to a point.
ALBERT MEIER, age 24, an inmate at USP Hazelton, was sentenced by Magistrate Judge John S. Kaull to three months in prison to run consecutive with his current 60-month sentence for “Possession of a Prohibited Object” on February 16, 2013, when staff observed MEIER talking on a cellphone and confiscated same.
These cases were investigated by the Special Investigative Services Staff at USP Hazelton.
ERIC ROBINSON, age 39, an inmate at FCI Gilmer entered a plea of guilty before Judge Keeley to “Possession of Marijuana” and was sentenced to four months in prison, to run consecutive with his current 48-month sentence. This case was investigated by the Special Investigative Services Staff at FCI Gilmer.
These cases were prosecuted by Assistant U.S. Attorney Brandon S. Flower.
LINDA BLAND, age 46, of Fairmont, West Virginia, and JANET POSEY, age 63, of Clarksburg, entered pleas of guilty, before Magistrate Judge Kaull, to “Receipt and Concealment of Embezzled Funds on Federal Property.” BLAND and POSEY, who are free on bond pending sentencing face up to 1 year in prison. These cases were prosecuted by Assistant U.S. Attorney Andrew R. Cogar and were investigated by the Department of Labor-Management Standards.
Pine Ridge Man Guilty of AssaultRead the Press Release
United States Attorney Brendan V. Johnson announced that Alexander Winter, 27, of Pine Ridge, South Dakota, appeared before U.S. Magistrate Judge Veronica L. Duffy on November 14, 2013, and pled guilty to a charge of Assault by Striking, Beating, and Wounding.
The charge carries a maximum penalty upon conviction of 1 year of imprisonment and/or a $100,000 fine.
On March 18, 2013, Winter repeatedly punched a woman in the chest and face during an argument, causing contusions, bruises, a bloody nose, a black eye and a nasal fracture.
The investigation was conducted by the Bureau of Indian Affairs Office of Justice Services and the Oglala Sioux Tribe Department of Public Safety. The case is being prosecuted by Assistant U.S. Attorney Eric Kelderman.
A presentence investigation was ordered and a sentencing date was set for February 3, 2014. The defendant remained on bond pending sentencing.
Orange County Ambulance Company Pays More Than $3 Million to Settle Allegations That It Overbilled Federal Health Care ProgramsRead the Press Release
SANTA ANA, California – An Orange County-based ambulance company has paid the United States more than $3 million to settle a lawsuit alleging it received overpayments from the Medicare program and other federal healthcare programs for transporting patients who were not eligible for ambulance transports, United States Attorney André Birotte Jr. announced today.
A federal judge in Santa Ana on Friday unsealed a lawsuit filed under the False Claims Act against ambulance transport company FILYN Corporation, which does business under the name Lynch Ambulance and is based in Anaheim. Lynch Ambulance and two of its principals named in the lawsuit settled the case. On November 7 Lynch Ambulance paid $3.05 million to the United States to resolve allegations that from 2001 through 2007 it regularly billed Medicare and other federal healthcare programs for transporting patients who were not “bed-confined” or whose transports otherwise were not medically necessary. The federal health care programs that paid claims for medically unnecessary transports were Medicare, TRICARE and the Federal Employees Health Benefits Program.
The settlement resolves a lawsuit filed under the qui tam – or “whistleblower” – provisions of the federal False Claims Act, which allow private citizens with knowledge of fraud to bring civil actions on behalf of the United States and to share in any recovery. The lawsuit -- which was filled by two former Lynch Ambulance employees, Jamie Weatherly and Dawn Lucero -- was unsealed after the United States elected to take over part of the case and negotiated the settlement.
Lynch Ambulance has also entered into a Corporate Integrity Agreement with the Department of Health and Human Services. Glenn R. Ferry, Special Agent in Charge for the Los Angeles Region of the Office of Inspector General for the Department of Health of Human Services, said: “Taxpayers shouldn't be on the hook for these expensive and medically unnecessary ambulance trips. Count on federal law enforcement to aggressively investigate and prosecute such actions.”
Lynch Ambulance and its principals have resolved this case without admitting any wrongdoing.
The settlement with Lynch Ambulance is the result of an investigation by the United States Department of Health and Human Services, Office of the Inspector General; the Department of Defense, Office of the Inspector General; the Office of Personnel Management, Office of the Inspector General; and the Federal Bureau of Investigation.
Release No. 13-130
Ocala Man Pleads Guilty to Federal Drug, Firearm, and Theft ChargesRead the Press Release
Ocala, Florida – Acting United States Attorney A. Lee Bentley, III, announces that William Deboris Gordon, III (41, Ocala) today pleaded guilty, in two separate criminal cases, to charges of attempted possession of five kilograms or more of cocaine with the intent to distribute, possession of firearms affecting commerce by a convicted felon, and theft of government property by filing false income tax returns. He faces a minimum mandatory of 20 years, up to life in federal prison on the drug offense and a maximum of 10 years’ imprisonment on each of the firearm and theft offenses. A sentencing date has yet to be set.
According to the plea agreements, Gordon met with an undercover Drug Enforcement Administration (DEA) agent in Marion County, Florida, on March 18, 2013. During the recorded meeting, Gordon described his extensive network for distributing cocaine and his need to acquire kilograms of cocaine in order to supply his customers. When the agent and Gordon met again several days later, the agent showed Gordon five kilograms of cocaine. Gordon immediately agreed to purchase the drugs and was arrested. A search of Gordon’s vehicle revealed more than $60,000 in cash that Gordon had intended to use to purchase the cocaine. A subsequent search of his home revealed two loaded firearms, marijuana and assorted drug paraphernalia, including a cocaine press.
According to court documents, Gordon had a prior felony conviction for a state cocaine distribution offense, which prohibited him from possessing firearms. A separate financial investigation also showed that Gordon had obtained more than $763,900 in fraudulent refunds through the filing of false income tax returns from November 2011 through March 2013.
This case was investigated by DEA; the Bureau of Alcohol, Tobacco, Firearms and Explosives; Internal Revenue Service - Criminal Investigation; and the United States Secret Service. It is being prosecuted by Assistant United States Attorneys Robert E. Bodnar, Jr., and Samuel D. Armstrong.
Naugatuck Man Involved in Illegal Campaign Contribution Scheme Is SentencedRead the Press Release
Deirdre M. Daly, Acting United States Attorney for the District of Connecticut, announced that HARRY RAYMOND SOUCY, 61, of Naugatuck, was sentenced today by U.S. District Judge Janet Bond Arterton in New Haven to three years of probation, the first six months of which SOUCY must spend in community confinement (a “halfway house”), for his role in a scheme to direct illegal contributions into the campaign of a candidate for the U.S. House of Representatives. SOUCY was also ordered to pay a $5,000 fine.
According to court documents and statements made in court, in August 2011, the State of Connecticut applied for a court order enjoining Roll Your Own (“RYO”) smoke shops from continuing to operate without complying with state law governing tobacco manufacturers. RYO smoke shops are retail businesses that sell loose smoking tobacco and cigarette-rolling materials and offer customers the option of paying a “rental” fee to insert the loose tobacco and the rolling materials into a RYO machine, which is capable of rapidly rolling large quantities of cigarettes. Customers did not pay a tax on the RYO cigarettes when rolled by the RYO machines, in contrast to cigarettes purchased over-the-counter.
Fearing that the Connecticut General Assembly would enact legislation harmful to RYO smoke shop owners’ business interests during the 2012 legislative session, certain RYO smoke shop owners and their associates, including SOUCY, engaged in a scheme to direct conduit campaign contributions into the campaign of Christopher Donovan, a candidate for the U.S. House of Representatives. At the time, Donovan was also the Speaker of the Connecticut House of Representatives. As part of the scheme, the co-conspirators recruited multiple individuals to serve as conduit contributors to the campaign. These individuals permitted checks to be written in their own names to the campaign and were then reimbursed with cash, thereby concealing the fact that RYO smoke shop owners were contributing to the campaign.
In November and December 2011, participants in the scheme made four $2,500 conduit contributions to the Chris Donovan for Congress campaign. On approximately January 31, 2012, the campaign submitted to the Federal Election Commission (“FEC”) a report of campaign committee’s receipts and disbursements for the period October 1, 2011 through December 31, 2011. The report falsely stated the source and amount of the four $2,500 contributions that were received and deposited by the campaign committee during that time period.
In late April 2012, SOUCY was approached by investigators and began cooperating with the investigation. With his assistance, the RYO owners directed an additional $17,500 in conduit contributions to the Donovan for Congress Campaign, as well as a conduit contribution in the amount of $2,500 to a political party.
On July 24, 2012, SOUCY waived his right to indictment and pleaded guilty to one count of wire fraud deprivation of honest services, and one count of conspiracy to make false statements to the FEC and to defraud the United States.
Seven other individuals, including two employees of the Donovan for Congress campaign, have also been convicted of charges stemming from this scheme.
This matter was investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant U.S. Attorneys Christopher M. Mattei and Eric J. Glover.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
[email protected]Mon Valley Drug Task Force Investigation Leads to Federal IndictmentRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-7725 ● Contact: Chris Zumpetta-Parr, Public Affairs SpecialistFollow us on Twitter @NDWVnews
CLARKSBURG, WEST VIRGINIA — United States Attorney William J. Ihlenfeld, II, announced that an investigation by the Mon Valley Drug Task Force has led to an indictment being returned by a federal grand jury in Clarksburg.
ANTWAN GREGORY, age 32, of Tallahassee, Florida; KENNETH GREGORY, age 26, of Columbus, Ohio; and, JENNIFER FERRARO WOODSON, age 31, of Morgantown, West Virginia, were named in a seven-count Indictment charging them with “Conspiracy to Possess with Intent to Distribute and to Distribute Cocaine and Crack Cocaine.”
ANTWAN and KENNETH GREGORY each face a total of six counts and WOODSON faces a total of seven counts.
In addition to the conspiracy charge, other charges include “Distribution of Cocaine and Crack Cocaine,” “Distribution of Cocaine and Crack Cocaine within 1,000 Feet of West Virginia University,” and, “Use and Carry of a Firearm in Relation to a Drug-Trafficking Offense.”
The defendants each face up to twenty years in prison on the conspiracy and distribution charges; up to forty years in prison on the protected location charges; and, a mandatory term of five years in prison on the firearms charge.
This case will be prosecuted by Assistant United States Attorney Zelda E. Wesley and was investigated by the Mon Valley Drug & Violent Crime Task Force, consisting of officers from the Morgantown Police Department, the Monongalia County Sheriff’s Department, and the Drug Enforcement Administration.
All of the charges contained in the above-referenced indictments are merely accusations and not evidence of guilt, and each defendant is presumed innocent until and unless proven guilty. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offense and the criminal history, if any, of the defendant.
Miami-Dade Resident Sentenced for Tax EvasionRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and José A. Gonzalez, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), announce that defendant Annabel Cooper was sentenced today to one year and one day in prison, followed by three years of supervised release, and was ordered to pay $687,475.00 in restitution. Cooper previously pled guilty to an Information that charged her with attempting to evade tax, in violation of Title 26, United States Code, Section 7201.
According to court documents, between 2006 and 2009, Cooper evaded the payment of income taxes to the IRS by failing to accurately report her true income on her Form 1040. The total amount of income Cooper failed to report during the tax years in question was approximately $2,320,000. The resulting tax loss to the United States was approximately $687,475.
Mr. Ferrer commended the investigative efforts of IRS-CI. The case is being prosecuted by Assistant U.S. Attorney Jon M. Juenger.
An indictment is only an accusation and a defendant is presumed innocent until proven guilty beyond a reasonable doubt.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Mexican Cocaine Supplier ConvictedRead the Press Release
LAREDO, Texas – Salvador Ibarra De-Alba, 48, of Nuevo Laredo, Tamaulipas, Mexico, has entered a plea of guilty for his role in a conspiracy to transport five kilograms or more of cocaine, announced United States Attorney Kenneth Magidson.
De-Alba was named in a sealed indictment returned Aug. 28, 2012, which indicated a drug trafficking organization had transported five kilograms or more of cocaine since 2008 from Nuevo Laredo, Mexico, to Houston and Miami, Fla., on a regular basis. De-Alba is the eighth conspirator to plead guilty in the case.
As part of the plea, De-Alba admitted he supplied cocaine to relatives living in Laredo and ensured its transportation further north into the United States. After the arrest of De-Alba’s brother, Juan Ramon Ibarra Sr. in 2010, De-Alba worked with his nephew, Juan Ramon Ibarra Jr., to continue the transportation of cocaine. Ibarra Sr. was sentenced to 130 months in federal prison along with another of his sons, Alejandro Ibarra, who received a sentence of 120 months. Ibarra Jr. is set for sentencing Feb. 3, 2014.
U.S. District Judge Marina Garcia Marmolejo, who accepted De-Alba's plea and the others in this case, has set his sentencing also for Feb. 3, 2014, at which time he faces a mandatory minimum of 10 years up to a maximum of life in prison as well as a possible $10 million fine. The United States is also seeking a money judgment in the amount of $2,408,204.
The case is the result of a two-year Organized Crime Drug Enforcement Task Force Investigation dubbed Silver Fox Hunt led by the Drug Enforcement Administration with the assistance of Homeland Security Investigations. Assistant United States Attorneys James Hepburn and Elizabeth Rabe are handling the case.
Maryland Man Sentenced to More Than Nine Years in Prison for Pair of Robberies in Northwest Washington-Defendant Attacked Two Women from Behind-Read the Press Release
WASHINGTON – Raymond Jones, 23, has been sentenced to serve nine years and eight months in prison for a pair of robberies that targeted women in Northwest Washington, U.S. Attorney Ronald C. Machen Jr. announced today.
Jones, whose last known address was in Prince George’s County, Md., pled guilty in July 2013, in the Superior Court of the District of Columbia, to robbery in one case and attempted robbery in the other. The Honorable Michael Ryan sentenced him on Nov. 15, 2013, to 17 years in prison for the crimes, but suspended some of that time on the condition that he successfully complete three years of supervised probation following his release from prison. Jones also must pay $610 in restitution to the victims.
According to the government’s evidence, on May 29, 2012, at about 6 p.m., Jones was seen pulling open a locked door to an apartment building in the 6100 block of 16th Street NW. He then attacked the victim as she walked through a fourth-floor hallway. He approached her from behind, put his right arm around her neck, and began choking her.
The victim fell and was pinned against the ground and the wall, while being choked by Jones, who then snatched her purse and an iPod from her hand. Believing that she would be killed, the victim reached back and pulled out one of Jones’s dreadlocks in the hopes that the police might find it and her attacker. Jones eventually released her and fled.
In the second attack, on Aug. 7, 2012, at 6:30 a.m., Jones accosted another woman as she walked to a bus stop in the 1500 block of Missouri Avenue NW. He struck the woman from behind, causing her to fall to the ground. Then he struggled with her, trying to wrestle away her purse. Jones then stole her purse and other items, which included a cell phone, cash, and earrings. The victim in this case suffered a fractured jaw. The injury required surgery and the victim’s jaw was shut for six weeks.
Jones previously was convicted of robbery in two other incidents, which took place in 2006 and 2007. Both times, he attacked victims from behind. During the investigation of the 2007 robbery, Jones admitted to police that he had carried out similar attacks.
In announcing the sentence, U.S. Attorney Machen commended the work of those who investigated the crimes from the Metropolitan Police Department (MPD). He also acknowledged the efforts of those who handled the case for the U.S. Attorney’s Office, including Paralegal Specialists Todd McClelland, Lynda Randolph, and Lynette Briggs; Victim/Witness Advocate Jennifer Clark; Information Technology Specialists Kimberly Smith and Anisha Bhatia; former Assistant U.S. Attorney Seth Adam Meinero, who investigated the case; Assistant U.S. Attorney Stephen Rickard, of the Appellate Section, and Assistant U.S. Attorney Phil Selden, who investigated and prosecuted the case.
13-397Manhattan U.S. Attorney Announces Claims Process for $2.35 Billion Madoff Victim FundRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today the start of the process for victims of the fraud perpetrated through Bernard L. Madoff Investment Securities LLC (“Madoff Securities”) to make claims against the $2.35 billion Madoff Victim Fund (the “MVF”). Victims may file claims under this process immediately. The MVF is funded through recoveries by the U.S. Attorney’s Office in various criminal and civil forfeiture actions, and is overseen by Richard Breeden, the former Chairman of the United States Securities and Exchange Commission, in his capacity as Special Master appointed by the Department of Justice to assist in connection with the victim remission proceedings.
The MVF also announced Department of Justice-approved eligibility criteria for granting victim claims. For the first time since Madoff Securities collapsed in December 2008, victims of the Madoff Securities fraud who invested through “feeder funds,” investment groups, and other pooled investment vehicles will be eligible to recover for their losses alongside direct investors in Madoff Securities.
Manhattan U.S. Attorney Bharara said: “This was an epic fraud and the process of compensating victims has been complex, but significant steps have been taken, and the Government is continuing its investigation to ensure that assets are recovered for the benefit of Madoff’s victims. With today’s announcement, we take a great step forward in returning the $2.35 billion collected so far to Madoff’s victims, and we hope to return even more. The process we have put in place opens the door for thousands of defrauded victims who otherwise might never have recovered anything. We have made eligibility to recover far more inclusive, and more equitable, than ever before. We will continue to work tirelessly with our partners from the FBI and the IRS to track down any and all proceeds of Madoff’s Ponzi scheme and return them to their rightful owners.”
Of the approximately $2.35 billion currently in the MVF, approximately $2.2 billion was collected as part of the historic December 2010 civil forfeiture recovery from the estate of deceased Madoff investor Jeffry Picower. The remaining funds were collected through a civil forfeiture action against investor Carl Shapiro and his family, and from civil and criminal forfeiture actions against Bernard L. Madoff, Peter B. Madoff, and their co-conspirators. In addition, there are a number of pending civil and criminal matters being pursued by the U.S. Attorney’s Office that, along with other pending matters, could lead to further collections and resultant distributions from the MVF.
Under the eligibility criteria announced today, subject to limited exceptions, anyone that lost his or her own funds that were invested in Madoff Securities at the time of its collapse, and who can document their net loss, will be eligible to recover from the MVF. That may include the more than 10,000 investors whose claims were denied in the Madoff Securities bankruptcy as “indirect” claims. Victim claims must be received by the MVF no later than February 28, 2014. Information about the MVF, including detailed eligibility criteria and instructions for filing a claim, can be found on its website at www.madoffvictimfund.com. Further questions about the eligibility criteria or filing procedures should be directed to the office of the Special Master, by phone, at (866) 624-3670, or by e-mail, at [email protected].
Mr. Bharara praised the work of the FBI and the IRS in connection with collecting the funds to be distributed, and thanked the Asset Forfeiture and Money Laundering Section of the Department of Justice for its assistance in the remission proceedings.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force, on which Mr. Bharara serves as a Co-Chair of the Securities and Commodities Fraud Working Group. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.StopFraud.gov.
The Madoff Securities cases are being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Matthew L. Schwartz, Randall W. Jackson, John T. Zach, Arlo Devlin-Brown, Christopher Frey, and Paul M. Monteleoni are in charge of the cases.
Manhattan U.S. Attorney Announces Claims Process for $2.35 Billion Madoff Victim FundRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today the start of the process for victims of the fraud perpetrated through Bernard L. Madoff Investment Securities LLC (“Madoff Securities”) to make claims against the $2.35 billion Madoff Victim Fund (the “MVF”). Victims may file claims under this process immediately. The MVF is funded through recoveries by the U.S. Attorney’s Office in various criminal and civil forfeiture actions, and is overseen by Richard Breeden, the former Chairman of the United States Securities and Exchange Commission, in his capacity as Special Master appointed by the Department of Justice to assist in connection with the victim remission proceedings.
The MVF also announced Department of Justice-approved eligibility criteria for granting victim claims. For the first time since Madoff Securities collapsed in December 2008, victims of the Madoff Securities fraud who invested through “feeder funds,” investment groups, and other pooled investment vehicles will be eligible to recover for their losses alongside direct investors in Madoff Securities.
Manhattan U.S. Attorney Bharara said: “This was an epic fraud and the process of compensating victims has been complex, but significant steps have been taken, and the Government is continuing its investigation to ensure that assets are recovered for the benefit of Madoff’s victims. With today’s announcement, we take a great step forward in returning the $2.35 billion collected so far to Madoff’s victims, and we hope to return even more. The process we have put in place opens the door for thousands of defrauded victims who otherwise might never have recovered anything. We have made eligibility to recover far more inclusive, and more equitable, than ever before. We will continue to work tirelessly with our partners from the FBI and the IRS to track down any and all proceeds of Madoff’s Ponzi scheme and return them to their rightful owners.”
Of the approximately $2.35 billion currently in the MVF, approximately $2.2 billion was collected as part of the historic December 2010 civil forfeiture recovery from the estate of deceased Madoff investor Jeffry Picower. The remaining funds were collected through a civil forfeiture action against investor Carl Shapiro and his family, and from civil and criminal forfeiture actions against Bernard L. Madoff, Peter B. Madoff, and their co-conspirators. In addition, there are a number of pending civil and criminal matters being pursued by the U.S. Attorney’s Office that, along with other pending matters, could lead to further collections and resultant distributions from the MVF.
Under the eligibility criteria announced today, subject to limited exceptions, anyone that lost his or her own funds that were invested in Madoff Securities at the time of its collapse, and who can document their net loss, will be eligible to recover from the MVF. That may include the more than 10,000 investors whose claims were denied in the Madoff Securities bankruptcy as “indirect” claims. Victim claims must be received by the MVF no later than February 28, 2014. Information about the MVF, including detailed eligibility criteria and instructions for filing a claim, can be found on its website at www.madoffvictimfund.com. Further questions about the eligibility criteria or filing procedures should be directed to the office of the Special Master, by phone, at (866) 624-3670, or by e-mail, at [email protected].
Mr. Bharara praised the work of the FBI and the IRS in connection with collecting the funds to be distributed, and thanked the Asset Forfeiture and Money Laundering Section of the Department of Justice for its assistance in the remission proceedings.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force, on which Mr. Bharara serves as a Co-Chair of the Securities and Commodities Fraud Working Group. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.StopFraud.gov.
The Madoff Securities cases are being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Matthew L. Schwartz, Randall W. Jackson, John T. Zach, Arlo Devlin-Brown, Christopher Frey, and Paul M. Monteleoni are in charge of the cases.
Lower Brule Woman Sentenced for AssaultRead the Press Release
United States Attorney Brendan V. Johnson announced that a Lower Brule, South Dakota, woman convicted of Assault by Striking, Beating and Wounding was sentenced on November 14, 2013, by U.S. Magistrate Judge Mark A. Moreno.
Monica Quilt, age 42, was sentenced to 6 months of imprisonment, 1 year of supervised release, and a $25 special assessment to the Federal Crime Victims Fund.
Quilt was indicted by a federal grand jury on May 15, 2013. She pled guilty to an Information on September 4, 2013.
The conviction stems from an incident between May 8, 2013, and May 9, 2013, wherein Quilt and the victim, who were involved in an intimate, dating relationship, had both been out drinking, but separately. During the morning hours of May 9th, Quilt went to her home and the victim arrived later. A physical assault occurred between Quilt and the victim, which resulted in the victim suffering injuries to his neck and face that required medical treatment.
The investigation was conducted by the Bureau of Indian Affairs, Lower Brule Agency. Assistant U.S. Attorney Meghan N. Dilges prosecuted the case.
Quilt is to self-report to the U.S. Marshals Service on December 12, 2013.
Lower Brule Man Sentenced for Assaulting A Federal OfficerRead the Press Release
United States Attorney Brendan V. Johnson announced that Cole Brouse, age 20, of Lower Brule, South Dakota, pled guilty to an Information that charged him with Assaulting, Resisting and Impeding a Federal Officer.
Brouse was sentenced on November 1, 2013, by U.S. Magistrate Judge Mark A. Moreno to 18 months of probation, a $1,500 fine, and a $25 special assessment to the Federal Crime Victims Fund.
The charge stems from an incident occurring on March 26, 2013, when U. S. Marshals and a Bureau of Indian Affairs officer went to Brouse’s home to look for another individual who had a federal warrant. Brouse was not home but arrived a short time later. When he arrived, he got upset at the officers, yelled at them and retrieved his pit-bull. The dog barked loudly, snarling and pulling on her leash in an attempt to get at the officers. The U.S. Marshals were able to talk to Brouse, who then put his dog away.
The investigation was conducted by the U.S. Marshals Service and the Bureau of Indian Affairs. Assistant U.S. Attorney Meghan N. Dilges prosecuted the case.
Local Business Owner Sentenced on Fraud ChargesRead the Press Release
ROANOKE, VIRGINIA – A former project manager at Breakell Inc., who pled guilty early this year to mail fraud charges, was sentenced today in the United States District Court for the Western District of Virginia in Roanoke.
Jamie Carl Graham, 34, of Roanoke, Va., previously pled guilty to one count of mail fraud. Today he was sentenced to 41 months of federal incarceration and was ordered to pay $1,290,624 in restitution.
“Mr. Graham stole materials and labor from his employer for his own benefit, and the benefit of his friends and other area business owners,” United States Attorney Timothy J. Heaphy said today. “This United States Attorney’s Office will continue to investigate and prosecute incidents of white collar fraud and bring those responsible to justice.“
Graham, while working as a project manager for Breakell, previously admitted to diverting labor and materials from his employer’s projects to other projects or for his own personal benefit. In order to divert the resources and hide the costs from Breakell, Graham forged change orders and miscoded expenses to and from various projects. As a result of Graham’s actions, Breakell used the US Postal Service and other commercial carriers to place orders with suppliers for the delivery of materials and sent payment to subcontractors for labor that Graham had wrongfully diverted.
The investigation of the case was conducted by Federal Bureau of Investigation. Assistant United States Attorneys Anthony Giorno and Daniel Bubar prosecuted the case for the United States.
Laguna Pueblo Man Pleads Guilty to Assaulting Intimate Partner Defendant Prosecuted as Part of Federal Initiative to Address the Epidemic Incidence of Violence Against Native WomenRead the Press Release
ALBUQUERQUE – Edwin Cheromiah, 28, pleaded guilty this morning to assaulting his intimate partner under a plea agreement that requires him to serve a 72-month federal prison sentence. Cheromiah’s guilty plea was announced by Acting U.S. Attorney Steven C. Yarbrough, DuWayne W. Honahni, Sr., Special Agent in Charge of District IV of BIA’s Office of Justice Services, and Police Chief Vincent M. Mariano of the Acoma Tribal Police Department.
Cheromiah, a member and resident of Laguna Pueblo, was arrested on Sept. 12, 2013, on an indictment charging him with assault resulting in serious bodily injury; assault with a dangerous weapon; and possessing and brandishing a firearm during a crime of violence.
This morning, Cheromiah pled guilty to a two-count felony information charging him with assault with a dangerous weapon and assault of an intimate partner by strangling and suffocation. In entering his guilty plea, Cheromiah admitted that on Dec. 27, 2010, he assaulted his intimate partner, an Acoma Pueblo woman, by placing a rifle into the mouth of the victim and threatening to kill her. He further admitted assaulting the victim by strangling her and attempting to suffocate her.
Cheromiah has been in federal custody since his arrest and remains detained pending his sentencing hearing, which has yet to be scheduled. The indictment against Cheromiah will be dismissed after sentence is imposed.
This case was investigated by the Laguna/Acoma Agency of the BIA’s Office of Justice Services and the Acoma Tribal Police Department, and is being prosecuted by Assistant U.S. Attorney Kyle T. Nayback.
This case was brought pursuant to the Tribal Special Assistant U.S. Attorney (Tribal SAUSA) Pilot Project in the District of New Mexico which is sponsored by the Justice Department’s Office on Violence Against Women under a grant administered by the Pueblo of Laguna. The Tribal SAUSA Pilot Project seeks to train tribal prosecutors in federal law, procedure and investigative techniques to increase the likelihood that every viable violent offense against Native women is prosecuted in either federal court or tribal court, or both. The Tribal SAUSA Pilot Project was largely driven by input gathered from annual tribal consultations on violence against women, and is another step in the Justice Department's on-going efforts to increase engagement, coordination and action on public safety in tribal communities.
Kyle Woman Sentenced for Conspiracy to Distribute MarijuanaRead the Press Release
United States Attorney Brendan V. Johnson announced that a Kyle, South Dakota, woman convicted of Conspiracy to Distribute a Controlled Substance was sentenced on November 13, 2013, by Chief Judge Jeffrey L. Viken, U.S. District Court.
Stephanie Standing Soldier, age 38, was sentenced to 16 months of imprisonment, 3 years' supervised release, and a $100 special assessment to the Federal Crime Victims Fund.
The conviction stems from Standing Soldier conspiring with others to distribute at least 100 kilograms or more of marijuana on the Pine Ridge Indian Reservation between 2008 and 2012. Standing Soldier pled guilty to the charge on April 30, 2013.
This case was investigated by the Federal Bureau of Investigation, Northern Plains Safe Trails Drug Enforcement Task Force, South Dakota Division of Criminal Investigation, and the Bureau of Indian Affairs Office of Justice Services. Assistant U.S. Attorney Ted L. McBride prosecuted the case.
Standing Soldier remained in the custody of the U.S. Marshals Service.
Joshua Tyler Apland Sentenced in U.S. Federal CourtRead the Press Release
The United States Attorney's Office announced that during a federal court session in Helena, on November 18, 2013, before Senior U.S. District Judge Charles C. Lovell, JOSHUA TYLER APLAND, a 21-year-old resident of Minot, North Dakota, was sentenced to a term of:
- ison: 100 months
- ecial Assessment: $200
- pervised Release: 5 years
APLAND was sentenced in connection with his guilty plea to conspiracy to possess with intent to distribute methamphetamine and being a felon-in-possession of a firearm.
In an Offer of Proof filed by Assistant U.S. Attorneys Michael S. Lahr and Zeno B. Baucus, the government stated it would have proved at trial the following:
On February 1, 2011, APLAND was convicted of an offense punishable by more than one year imprisonment in the state of North Dakota, therefore prohibiting him from possessing firearms.
In September 2012, members of the Missouri River Drug Task Force (MRDTF) investigated APLAND, X.X., Z.Z. and others for conspiring to possess methamphetamine with the intent to distribute in Helena as well as in other locations in Montana. As part of that investigation, on September 13, 2012, a Montana Division of Criminal Investigation (MDCI) agent learned that APLAND was in Helena. The agent also learned that APLAND was the subject of an arrest warrant for failing to comply with the terms of his probationary sentence in North Dakota.
On September 19, 2012, members of the MRDTF learned APLAND, X.X., and Z.Z. were staying at a residence in Helena. Agents then contacted the owner of the residence who confirmed APLAND, X.X., and Z.Z. were staying at the residence and were armed with handguns and a shotgun.
Later, on September 19, 2012, agents went to the residence and placed it under surveillance. Still later on the same day, APLAND left the residence in a vehicle. X.X. and Z.Z. left the residence in another vehicle;
A uniformed officer driving a patrol car attempted to stop the vehicle driven by APLAND. APLAND fled from the officer. Along the way, he threw a Weatherby, model PA-459, 12 gauge shotgun out of the vehicle. Law enforcement officials recovered that firearm. APLAND also disposed of a Smith and Wesson, model SW40VE, .40 caliber, semiautomatic pistol during the course of the pursuit. On September 20, 2012, law enforcement recovered that firearm near a stretch of the same road.
APLAND was ultimately arrested at a bar in Lincoln on September 19, 2012;
Members of the MRDTF interviewed APLAND following his arrest. APLAND admitted that he possessed the shotgun and pistol and that he threw the shotgun while being pursued by the patrol car.
APLAND admitted that, during the time period of the conspiracy, he, X.X., Z.Z., and Y.Y. traveled to Salt Lake City, Utah on multiple occasions. APLAND stated that during those trips they obtained a total of approximately 25 ounces of methamphetamine for distribution. APLAND stated that Y.Y. financed most the purchases of methamphetamine and received much of the methamphetamine obtained in Salt Lake City.
APLAND stated that he or other members of the conspiracy, including X.X., Z.Z., and Y.Y., then distributed the methamphetamine in Montana, North Dakota, and South Dakota. APLAND stated that he distributed some of the methamphetamine to Y.Y. in a meeting that occurred in Helena during the course of the conspiracy.
Because there is no parole in the federal system, the "truth in sentencing" guidelines mandate that APLAND will likely serve all of the time imposed by the court. In the federal system, APLAND does have the opportunity to earn a sentence reduction for "good behavior." However, this reduction will not exceed 15% of the overall sentence.
The investigation was a cooperative effort between the Federal Bureau of Investigation and the Montana Division of Criminal Investigation.
Joint Statement Following the<br /> EU-US Justice and Home Affairs <br /> Ministerial MeetingRead the Press Release
Attorney General Eric Holder and Acting Department of Homeland Security (DHS) Secretary Rand Beers today hosted an EU/U.S. Justice and Home Affairs Ministerial with their counterparts in the European Union: Lithuanian Minister of Justice Juozas Bernatonis and Lithuanian Vice Minister of Interior Elvinas Jankevicius representing the Lithuanian Presidency of the Council of the EU; Greek Minister of Justice, Transparency and Human Rights Charalampos Athanasiou representing the incoming Greek Presidency of the EU; and European Commission Vice President Viviane Reding and Commissioner Cecilia Malmström representing the EU Commission.
The U.S. and EU together released the following statement on the meeting:
“Our meeting was constructive and productive. We discussed a broad array of issues critical to the European Union and the United States, including: addressing the problem of sexual abuse of children online; coordinating work on counter-terrorism and security issues; countering violent extremism; expanding cooperation in criminal matters; joint efforts in the areas of cybercrime and cybersecurity; and mobility, migration and border issues. In addition, we discussed the rights of victims of crime, the rights of persons with disabilities and the prosecution of hate crimes.
Of special note, we discussed the threat posed by foreign fighters going to third countries, in particular Syria, and the possible response to address it. We intend to promote close information sharing between our respective agencies, as well as coordinated initiatives in third countries. We also discussed efforts of the U.S. and the EU in countering violent extremism, and agreed to intensify our cooperation.
Our meeting also addressed data protection, and issues related to alleged activities of U.S. intelligence agencies. We together recognize that this has led to regrettable tensions in the transatlantic relationship, which we seek to lessen. In order to protect all our citizens, it is of the utmost importance to address these issues by restoring trust and reinforcing our cooperation on justice and home affairs issues.
The EU and the U.S. are allies. Since 9/11 and subsequent terrorist attacks in Europe, the EU and U.S. have stepped up cooperation, including in the areas of police and criminal justice. Sharing relevant information, including personal data, while ensuring a high level of protection, is an essential element of this cooperation, and it must continue.
We are therefore, as a matter of urgency, committed to advancing rapidly in the negotiations for a meaningful and comprehensive data protection umbrella agreement in the field of law enforcement. The agreement would act as a basis to facilitate transfers of data in the context of police and judicial cooperation in criminal matters, by ensuring a high level of personal data protection for U.S. and EU citizens. We are committed to working to resolve the remaining issues raised by both sides, including judicial redress (a critical issue for the EU). Our aim is to complete the negotiations on the agreement ahead of summer 2014.
We also underline the value of the EU-U.S. Mutual Legal Assistance Agreement. We reiterate our commitment to ensure that it is used broadly and effectively for evidence purposes in criminal proceedings. There were also discussions on the need to clarify that personal data held by private entities in the territory of the other party will not be accessed by law enforcement agencies outside of legally authorized channels. We also agree to review the functioning of the Mutual Legal Assistance Agreement, as contemplated in the Agreement, and to consult each other whenever needed.
We take stock of the work done by the joint EU-U.S. ad hoc Working Group. We underline the importance of the ongoing reviews in the U.S. of U.S. Intelligence collection activities, including the review of activities by the Privacy and Civil Liberties Oversight Board (PCLOB) and the President’s Review Group on Intelligence and Communications Technology (Review Group). The access that has been given to the EU side of the ad hoc Working Group to officials in the U.S. intelligence community, the PCLOB, the Review Group, and U.S. congressional intelligence committees will help restore trust. This included constructive discussions about oversight practices in the U.S. The EU welcomes that the U.S. is considering adopting additional safeguards in the intelligence context that also would benefit EU citizens.
As these ongoing processes continue, they contribute to restoring trust, and to ensuring that we continue our vital law enforcement cooperation in order to protect EU and U.S. citizens.”
Home-Invasion Robber Sentenced to 20 Years’ ImprisonmentRead the Press Release
Earlier today, at the federal courthouse in Brooklyn, Derrick Diaz, the former leader of a crew of robbers who targeted innocent civilians in their homes, was sentenced to 20 years in prison following his February 10, 2012, guilty plea to Hobbs Act robbery conspiracy. The sentence also included a term of supervised release of 3 years and an order that Diaz make restitution payments in the amount of $296,300 to his victims.
The sentence was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and Brian Crowell, Special Agent-in-Charge, Drug Enforcement Administration (DEA), New York Division.
“As the leader of a vicious crew of robbers, Derrick Diaz violated the sanctity of the homes of innocent residents of Brooklyn and terrorized his victims with guns and knives,” stated United States Attorney Lynch. “Today, his life as a career criminal has earned him a home in federal prison for the next 20 years of his life.” Ms. Lynch expressed her grateful appreciation to the DEA, and thanked the New York City Police Department and the Office of the Kings County District Attorney for their assistance.
DEA Special Agent-in-Charge Crowell stated, “Nearly four years ago, the DEA and the NYPD tracked down and arrested this ruthless criminal, along with four of his gang members, who terrorized residents in and around the 61st Precinct in Brooklyn, NY. This organization was violent and a community’s worst nightmare, to include breaking into occupied homes and forcibly restraining children during robberies. This crew stole valuables worth hundreds of thousands of dollars with no concern for the children they terrorized. As part of this joint investigation, additional victims were identified resulting in dozens of home invasions linked to this armed robbery crew.” Mr. Crowell commended the men and women of the U.S. Attorney’s Office for the Eastern District of New York, the DEA and the New York City Police Department for their tenacious work.
Over the course of several robberies, Diaz and members of his crew broke into Brooklyn homes armed with, among other weapons, firearms and knives. They threatened their victims, including senior citizens and children, at gunpoint and knifepoint, pistol whipped victims, stabbed one victim, and bound and gagged multiple victims.
From the age of 16, Diaz has never gone longer than three years between arrests, other than time when he was already in custody of law enforcement. He has been convicted of burglary or related crimes five times, narcotics crimes twice, and various other offenses. Of Diaz’s burglary convictions, three involved his breaking into, or attempting to break into, a private residence. Today’s sentence was the culmination of Diaz’s first conviction in federal court.
Four members of the Diaz crew previously were convicted of federal felony charges in the Eastern District of New York.
The sentencing proceedings were held before United States District Judge Kiyo A. Matsumoto.
The government’s case is being prosecuted by Assistant United States Attorney Justin D. Lerer.
The Defendant
DERRICK DIAZ
Age: 40
Roselle Park, New JerseyEDNY Docket No. 10-CR-277 (S-4) (KAM)
High-Ranking Bank Official at Venezuelan State Development Bank Pleads Guilty to Participating in Bribery SchemeRead the Press Release
A senior official in Venezuela’s state economic development bank has pleaded guilty in New York federal court to accepting bribes from agents and employees of a New York-based broker-dealer (Broker-Dealer) in exchange for directing her bank’s security-trading business to the Broker-Dealer.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Preet Bharara of the Southern District of New York, and Assistant Director in Charge George Venizelos of the New York Office of the FBI made the announcement.
Maria De Los Angeles Gonzalez De Hernandez, 55, pleaded guilty today before U.S. District Judge Paul A. Engelmayer in the Southern District of New York to conspiring to violate the Travel Act and to commit money laundering, as well as substantive counts of these offenses. Sentencing for Gonzalez is scheduled for Aug. 15, 2014, before Judge Engelmayer.
At all times relevant to the charges, Banco de Desarrollo Económico y Social de Venezuela (BANDES) was a state-run economic development bank in Venezuela. The Venezuelan government had a majority ownership interest in BANDES and provided it with substantial funding.
According to court records, Gonzalez was an official at BANDES and oversaw the development bank’s overseas trading activity. At her direction, BANDES conducted substantial trading through the Broker-Dealer. Most of the trades executed by the Broker-Dealer on behalf of BANDES involved fixed income investments for which the Broker-Dealer charged the bank a mark-up on purchases and a mark-down on sales.
From early 2009 through 2012, Gonzalez participated in a bribery scheme in which she directed trading business she controlled at BANDES to the Broker-Dealer and, in return, agents and employees of the Broker-Dealer shared the revenue the Broker-Dealer generated from this trading business with Gonzalez. During this time period, the Broker-Dealer generated over $60 million in mark-ups and mark-downs from trades with BANDES. Agents and employees of the Broker-Dealer devised a split with Gonzalez of the commissions paid by BANDES to the Broker-Dealer. Emails, account records, and other documents collected from the Broker-Dealer and other sources reveal that Gonzalez received a substantial share of the revenue generated by the Broker-Dealer for BANDES-related trades. Specifically, Gonzalez received millions in bribe payments from Broker-Dealer agents and employees.
Additionally, Gonzalez paid a portion of the bribe payments she received to another BANDES employee who was also involved in the scheme.
To further conceal the scheme, the kickbacks to Gonzalez were often paid using intermediary corporations and offshore accounts that Gonzalez and others held in Switzerland, among other places.
Previously, three former employees of the Broker-Dealer – Ernesto Lujan, Jose Alejandro Hurtado, and Tomas Alberto Clarke Bethancourt – each pleaded guilty in New York federal court to conspiring to violate the Foreign Corrupt Practices Act (FCPA), to violate the Travel Act and to commit money laundering, as well as substantive counts of these offenses, relating, among other things, to the scheme involving bribe payments to Gonzalez. Sentencing for Lujan and Clarke is scheduled for Feb. 11, 2014, before U.S. District Judge Paul G. Gardephe. Hurtado is scheduled for sentencing before U.S. District Judge Harold Baer Jr. on March 6, 2014.
This ongoing investigation is being conducted by the FBI, with assistance from the SEC and the Justice Department’s Office of International Affairs. Assistant Chief James Koukios and Trial Attorneys Maria Gonzalez Calvet and Aisling O’Shea of the Criminal Division’s Fraud Section and Assistant United States Attorneys Harry A. Chernoff and Jason H. Cowley of the Southern District of New York’s Securities and Commodities Fraud Task Force are in charge of the prosecution. Assistant United States Attorney Carolina Fornos is also responsible for the forfeiture aspects of the case.
Additional information about the Justice Department’s FCPA enforcement efforts can befound at www.justice.gov/criminal/fraud/fcpa