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14 January 2014
El Salvadoran National Sentenced to 15 Years in Federal Prison in Credit Card Fraud CaseRead the Press Release
LOS ANGELES – An El Salvadoran national who was convicted of credit card fraud, trafficking in counterfeit goods and identity theft has been sentenced to 15 years in federal prison for causing victims to suffer losses of over $100,000.
Jose Rolando Renderos, 39, who last resided in Montebello, but has been in federal custody since February 1, 2013, was sentenced yesterday afternoon by United States District Judge Audrey B. Collins. In October 2013, a federal jury convicted Renderos of various federal charges related to a credit card manufacturing scheme.
Renderos was apprehended on February 1, 2013, after receiving a box of more than 3,000 counterfeit credit cards imported from China and then leading law enforcement on a high-speed chase through the San Gabriel Valley. All told, authorities seized more than 100,000 counterfeit credit cards and numbers in packages imported from China and at a credit card manufacturing plant that Renderos had operated in Montebello, California.
“Credit card fraud and identity theft impact the financial security, privacy, and emotional well-being of millions of Americans every year,” said United States Attorney André Birotte Jr. “Mr. Renderos is a repeat offender who callously disregarded the effect that his schemes had on the lives of his unfortunate victims and now he will be serving a lengthy and richly deserved sentence in federal prison.”
“Identity theft and credit card fraud are growing at an alarming rate, posing a real threat to consumers and financial institutions nationwide,” said Claude Arnold, special agent in charge for HSI Los Angeles. “As this sentencing shows, those who perpetrate such schemes face serious consequences. HSI will continue to work closely with its federal law enforcement partners to aggressively target those who seek to undermine the integrity of our financial system and compromise our quality of life.”
At trial, federal prosecutors presented evidence that Renderos had lived a luxurious lifestyle that had been financed by credit card fraud. The ill-gotten gains paid for cosmetic surgery for himself and his girlfriend, VIP tickets to Lakers and Clippers games, and designer handbags and shoes.
“Our success in this case and other similar investigations is a result of our close work with our law enforcement partners,” said Joseph Beaty, Special Agent in Charge of the U.S. Secret Service Los Angeles Field Office. “The Secret Service worked closely with the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations to share information and resources that ultimately brought Jose Rolando Renderos to justice.”
During the investigation, authorities learned that Renderos obtained valid credit card numbers by installing “skimmers” inside gas station pumps throughout Southern California. Renderos used others to block cameras and distract gas station employees while he did the installation. Six other defendants were also prosecuted as part of the scheme, including his girlfriend, his 18 year-old son, his brother, and others who purchased products for Renderos using the counterfeit credit cards.
Renderos was previously convicted of credit card fraud in the California courts. When he was arrested last year, Renderos was a fugitive wanted by federal authorities after he absconded from supervised release imposed after he was convicted of interstate transportation of a stolen vehicle. Renderos was also wanted by local authorities because he absconded while being prosecuted in Los Angeles County on credit card fraud charges. While a fugitive, Renderos had assumed the identities of several Puerto Rican men to hide from authorities.
The case was investigated by the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and the United States Secret Service with substantial assistance provided by U.S Customs and Border Protection.
Release No. 14-003
Developer Sentenced to 96 Months in Prison for His Role in Mortgage Fraud SchemeRead the Press Release
RALEIGH - United States Attorney Thomas G. Walker announced that in federal court today before Chief United States District Judge James C. Dever, III, DAVID LEWIS JOHNSON, JR. of Cary, NC, was sentenced to a 96 month term of imprisonment, followed by 5 years of supervised release, on charges of Conspiracy to Commit Mail, Wire, and Bank Fraud, in violation of Title 18, United States Code, Section 1349. JOHNSON was also ordered to pay $2,413,605.89 to 11 banks and lenders who were victims of the fraud.
With respect to the charge of Conspiracy to Commit Mail, Wire, and Bank Fraud, JOHNSON, operating through E-Z N Homes, engaged in a real estate “flipping” scheme. JOHNSON and others utilized various schemes to fraudulently obtain more than 100 properties with total mortgage loans in excess of $20,000,000. The defendant used straw buyers to purchase properties in exchange for a kickback from the loan proceeds. JOHNSON also fabricated investment statements to make it appear that straw buyers had, in some instances, one million dollars in assets. In fact, the straw buyers recruited by JOHNSON did not possess the income or assets to support the loans obtained in their names.
As a result of the scheme and JOHNSON’s conduct, banks and lenders issued loans to the conspirators in the amount of approximately $9.1 million, which resulted in $3.4 million in actual losses to the banks and lenders.Investigation of this case was conducted by the Internal Revenue Service Criminal Investigation and the Federal Bureau of Investigation. Assistant United States Attorney William M. Gilmore represented the United States.
Denver Colorado Man Convicted for Conspiracy to Possess with Intent to Distribute, and to Distribute, MethamphetamineRead the Press Release
U.S. Attorney Christopher A. Crofts announced today that Denver, Colorado resident Eugene Velarde has been convicted in federal court. A jury found Velarde guilty of Conspiracy to Possess with Intent to Distribute, and to Distribute, Methamphetamine after a five-day jury trial in the U.S. District Court in Cheyenne. Velarde is scheduled to be sentenced by Chief Federal District Court Judge Nancy D. Freudenthal on March 25, 2014.
The investigation in this case was conducted jointly by the Albany County Sheriff’s Department and the Wyoming Division of Criminal Investigation with the assistance of the Drug Enforcement Administration.
Deleon Springs Man Sentenced to 7 Years for Armed Bank RobberyRead the Press Release
Orlando, Florida –Senior U.S. District Judge Gregory A. Presnell yesterday sentenced Robert Gordon Shaw (37, Deleon Springs) to 7 years in federal prison for armed bank robbery. Shaw pleaded guilty on August 1, 2013.
According to court documents, on April 19, 2013, Shaw conspired with another individual (Matthew Anthony Cosimini) to rob a Regions Bank in Sanford, Florida. During the course of the robbery, they displayed a fake explosive detonation device, passed a note to a bank teller demanding money, and indicated that an explosive had been placed inside the bank. While committing the offense, Shaw and Cosimini also possessed a semiautomatic pistol with ammunition.
After Shaw passed the demand note and displayed the detonation device, the bank teller handed Shaw approximately $14,098 in bank funds. Shaw and Cosimini fled in a stolen vehicle as responding officers from the Sanford Police Department pursued them. During the pursuit, Shaw caused damage to both a police vehicle and a civilian's vehicle. Police officers apprehended Shaw and Cosimini approximately one mile from the bank and recovered the semiautomatic handgun and fake detonation device from the stolen vehicle.
Further investigation revealed that the detonation device was a hoax and that there were no explosives inside the bank. The investigation also determined that Cosimini and Shaw had planned to rob the bank together.
Cosimini pleaded guilty to his role in the offense on August 29, 2013. He was sentenced on November 25, 2013, to 6 ½ years in federal prison.
This case was investigated by the Federal Bureau of Investigation, with assistance from the Sanford Police Department and the Seminole County Sheriff's Office. It was prosecuted by Assistant United States Attorney Andrew C. Searle.
Defendant Charged with Threatening to Kill U.S. Embassy OfficialRead the Press Release
ALEXANDRIA, Va. – Robert S. Kanli, also known as Robert S. Martin, 33, born in La Mirada, California, was arrested on charges alleging that he emailed threats to kill an official in the United States Embassy in Pristina, Kosovo.
Dana J. Boente, Acting United States Attorney for the Eastern District of Virginia, and Gregory B. Starr, Director of the Diplomatic Security Service for the U.S. Department of State, made the announcement after Kanli’s initial appearance before United States Magistrate Judge Ivan D. Davis. Kanli will appear in federal court on January 15, 2014 for a preliminary hearing and bond hearing.
Robert S. Kanli faces a maximum penalty of five years in prison if convicted.
According to court documents, Kanli, who has been residing outside the United States for several years, was attempting to obtain a sixth United States passport over the Internet when he was informed of a delay due to the number of lost passports he had previously reported. After learning that his $56 application fee could not be refunded, Kanli wrote a series of threatening emails to a Consular Officer in the United States Embassy in Kosovo. These communications explicitly threatened to kill the embassy employee who was helping Kanli with his replacement passport application.
Kanli was returned to the United States on January 10, 2014 after being released from custody in Kosovo, where he was held for threatening a foreign mission.
This investigation was conducted by the United States Diplomatic Security Service, with assistance provided by the Republic of Kosovo Police and Department of Criminal Justice and the Austrian Federal Police in connection with Kanli’s arrest and return to the United States. Assistant United States Attorney Ronald L. Walutes, Jr. is prosecuting the case on behalf of the United States.
Criminal complaints are only charges and not evidence of guilt. A defendant is presumed to be innocent until and unless proven guilty.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.Correctional Officer and BGF Inmate with Whom She Had Sex Sentenced in Jail House Racketeering ConspiracyRead the Press Release
Correctional Officer Smuggled Drugs for BGF into Baltimore Correctional Facility; BGF Inmate Had Sex with Correctional Officers and Directed Them to Smuggle Contraband into the Prison
Baltimore, Maryland – U.S. District Judge Ellen L. Hollander sentenced correctional officer Taryn Kirkland, age 23, of Baltimore to 42 months in prison followed by two years of supervised release, and BGF member and commander Steven Loney, age 24, today to nine years in prison followed by three years of supervised release, for racketeering conspiracy arising from the smuggling of drugs for members of the Black Guerilla Family (BGF) gang inside the Baltimore City Detention Center (BCDC).
The sentences were 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; Acting Secretary Gregg Hershberger of the Maryland Department of Public Safety and Correctional Services; Baltimore Police Commissioner Anthony W. Batts; and Baltimore City State’s Attorney Gregg L. Bernstein.According to court documents, BGF has been the dominant gang at the BCDC, and in several connected facilities, including the Baltimore Central Booking Intake Center, the Women’s Detention Center, which houses many men, and in the Jail Industries Building.
According to their plea agreements, Kirkland worked as a correctional officer at BCDC where BGF member Loney was an inmate. For a time, Loney was a cellmate of Tavon White, the leader of BGF at BCDC. Following his transfer to another section, Loney became the commander of one of two BGF regimes at BCDC, and answered only to Tavon White. Throughout 2011 to 2013, Loney often directed the smuggling of contraband into BCDC by BGF members and associates, especially through the services of correctional officers. Loney became involved in sexual relationships with correctional officers, including Kirkland. Kirkland frequently smuggled contraband, including marijuana and prescription pills, into BCDC on behalf of Loney. Kirkland also helped other correctional officers, such as Jennifer Owens, smuggle drugs into BCDC for other BGF inmates such as Tavon White.
Correctional officer Adrena Rice, age 25, of Baltimore previously pleaded guilty to her participation in the conspiracy and was sentenced on January 8, 2014 to 42 months in prison. BGF leader Tavon White, age 36, also pleaded guilty to the racketeering enterprise and is scheduled to be sentenced on February 20, 2014 at 10:00 a.m. Outside supplier James Yarborough, a/k/a J.Y., age 27, of Baltimore, is scheduled to have a rearraignment tomorrow at 10:00 a.m.
The case arose from the efforts of the Maryland Prison Task Force, a group of local, state and federal law enforcement agencies and prosecutors that met regularly for more than two years and generated recommendations to reform prison procedures. The investigation is continuing.
U.S. Attorney Rosenstein recognized the efforts of the other members of the Maryland Prison Task Force, including: Colonel Marcus L. Brown, Superintendent of the Maryland State Police; Chief Mark A. Magaw of the Prince George’s County Police Department; United States Marshal Johnny Hughes; Special Agent in Charge Karl C. Colder of the Drug Enforcement Administration - Washington Field Division; Tom Carr, Director of the Washington-Baltimore High Intensity Drug Trafficking Area; and Dave Engel, Executive Director of the Maryland Coordination and Analysis Center.
United States Attorney Rod J. Rosenstein praised the FBI, Maryland Department of Public Safety and Correctional Services, Baltimore Police Department, and Maryland Prison Task Force, for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys Robert R. Harding and Ayn B. Ducao, who are prosecuting this Organized Crime Drug Enforcement Task Force case.Confessed Heroin Dealer Admits Providing Drugs That Caused Death of Two Young Metroplex WomenRead the Press Release
DALLAS — Misael Perla, a/k/a “Irving” and “Weasal25, of Dallas, pleaded guilty this morning, before U.S. Magistrate Judge Irma C. Ramirez, to two counts of possession of heroin with intent to distribute, the use of which caused the death of victims Alexandra Julia Moreno, 20, of Irving, Texas, and Cassidy Seward, 18, of Grapevine, Texas. Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
According to the factual resume filed in the case, Perla, a confessed heroin dealer, admitted that on July 16, 2013, he knowingly distributed heroin to Moreno, a woman he had recently met at a club. Perla provided the heroin to Moreno while she was staying with him at his mother’s home and he watched as she used the heroin in his presence. Later that evening and into the next morning, Perla attempted to wake Moreno, and he became concerned that she may have overdosed. He put her into the bed of a truck, drove to Baylor Medical Center at Irving and left her body with medical personnel at the emergency room. Moreno was pronounced dead shortly after her arrival at the hospital and a subsequent autopsy report concluded that she “died as the result of the toxic effects of heroin.”
Additionally, Perla also admits in the factual resume that he knew Cassidy Seward used heroin and that she would take some heroin from a supply at his residence. After staying with the defendant one evening, Seward overdosed on drugs taken from his home. After her family found her unresponsive, paramedics arrived and took her to the hospital, where she was soon pronounced dead. A subsequent autopsy report concluded that she died from the “mixed drug toxicity” of heroin and methamphetamine.
On each count of conviction, Perla faces a statutory penalty of at least 20 years and up to life in prison and a $5 million fine. A sentencing date was not set.
The investigation was led by the Irving Police Department and the Grapevine Police Department, with assistance from U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI).
Assistant U.S. Attorney Jason Schall is in charge of the prosecution.
Charleston Doctors and Medical Clinic Settle Allegations of FraudRead the Press Release
Contact Person: Bill Nettles (803) 929-3000
Dr. Baron S. Nason, Robert T. Hamilton and Nason Medical
Settle Allegations of Fraud for $1,021,778.26
Columbia, South Carolina ---- United States Attorney Bill Nettles announced today that the United States Attorney's Office for the District of South Carolina, settled claims of health care fraud with Nason Medical, out of Charleston, South Carolina, and two of its owners, Dr. Baron S. Nason and Robert T. Hamilton. The United States contended that Nason Medical submitted numerous false claims to Medicare, Medicaid and TRICARE. Specifically, the United States contended that Nason Medical:
1 Submitted claims to Medicare and TRICARE for services that were provided by physician assistants, as though the services were provided by physicians. Both Medicare and TRICARE pay 85% of the physician fee schedules for services provided by mid-level providers like physician assistants; 2 Submitted claims to Medicare, Medicaid and TRICARE for testing that was not medically indicated including laboratory tests and potentially harmful CT scans; Submitted claims for radiological services provided by a radiology technician who did not hold a current South Carolina license; and 4 Submitted claims for Tetanus Immunoglobulin when Tetanus Toxoid was given which is considerably less expensive;
The investigation began with the filing of whistleblower lawsuits, called qui tams, under the False Claims Act. The suits were filed by former employees of Nason Medical. The False Claims Act allows the government to recover actual damages and penalties of three times the actual damages and up to $11,000 per false claim. This settlement includes repayment of actual damages and penalties.
The False Claims Act allows individuals to file lawsuits with allegations that fraud has been committed against the federal government on behalf of the government. Whistleblowers, referred to as Relators in the False Claims Act, are entitled to share in any recovery received by the government. In this case, the two relators collectively will receive 18% of the funds of the settlement, or $183,920.08, plus they are entitled to their costs and attorney fees. One whistleblower claimed he was terminated for his actions taken to stop the fraudulent billing. If that is true, he is entitled to recover for his personal damages as well.
Mr. Nettles said, ?Health care fraud is a very high priority in this office. We have shifted our office resources by trebling the number of attorneys dedicated to address civil fraud cases. This case is particularly egregious because it involves allegations of profiting by exposing patients to unnecessary radiation in the CT scans.?
“Being a health care provider in Federal health care programs such as Medicare and Medicaid is a privilege, not a right. When health care providers order medically unnecessary procedures such as CT scans and submit other improper claims just to boost profits, they threaten both the health of their patients and the financial integrity of the Medicare and Medicaid programs,” said Derrick L. Jackson, Special Agent in Charge at the U.S. Department of Health and Human Services, Office of Inspector General (OIG). “In an effort to ensure Nason Medical’s egregious billing history is not its future, the company agreed to a rigorous 5-year Corporate Integrity Agreement (CIA) we crafted to hold them accountable.”
Under this CIA, except for X-rays, Nason Medical also agreed to remove all its imaging equipment (including CT scans) and to provide medical services only appropriate for an Urgent Care Center. To that end, Nason Medical may not present or advertise itself out as providing any medical services for emergencies. Nason Medical is required to take down its Emergency signage and to stop advertising for emergency services. And, to ensure its compliance with federal healthcare programs and this CIA, Nason Medical, among other requirements, must engage the services of an independent monitor, chosen by OIG.
This case was investigated by agents from U.S. Health and Human Resources Office of Inspector General, Defense Criminal Investigative Service and the Federal Bureau Investigation.
If you suspect Medicare or Medicaid fraud please report it by phone at 1-800-447-8477 (1-800-HHS-TIPS), or E-Mail at [email protected].Bridgeport Man Sentenced to 38 Months in Federal Prison for Illegally Possessing FirearmRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that SCOTT LAMBERT, also known as “Mike,” 33, of Bridgeport, was sentenced today by U.S. District Judge Stefan R. Underhill in Bridgeport to 38 months of imprisonment, followed by three years of supervised release, for illegally possessing a firearm.
According to court documents and statements made in court, on two occasions in May 2011, LAMBERT sold heroin to an individual working with law enforcement. On August 6, 2011, Bridgeport Police stopped a truck in which LAMBERT was a passenger. LAMBERT was arrested after he attempted to discard a handgun that he possessed.
LAMBERT was convicted of cocaine possession in 2003 in federal court, and he also has multiple state felony convictions. It is a violation of federal law for a person previously convicted of a felony offense to possess a firearm or ammunition that has moved in interstate or foreign commerce.
This matter stems from an FBI Bridgeport Safe Streets Task Force and Connecticut State Police Statewide Narcotics Task Force investigation into narcotics trafficking activity and violent criminal activity in and around the Trumbull Gardens housing complex in Bridgeport. The Bridgeport, Norwalk, and Trumbull Police Departments participated in the investigation.
The case is being prosecuted by Assistant U.S. Attorneys Tracy Lee Dayton and Rahul Kale.
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(203) 821-3722 [email protected]Bluefield, W.Va. Man Sentenced on Bank Fraud, Identity Theft ChargesRead the Press Release
ABINGDON, VIRGINIA – The former administrator of the Bluefield Virginia Rescue Squad in Bluefield, Va., was sentenced this morning on charges that he stole money from the squad and obtained a fraudulent loan without the squad’s authority.
Thomas Franklin Carroll, 48, of Bluefield, W.Va., previously pled guilty to one count of bank fraud and one count of identity theft. This morning in District Court, he was sentenced to 45 months of federal incarceration, 4 years of supervised release, and ordered to pay $204,490 in restitution.
“Mr. Carroll stole money from an organization tasked with providing needed assistance in medical emergencies,” United States Attorney Timothy J. Heaphy said today. “He abused the trust placed in him by the Rescue Squad, and used their scarce resources for his personal gain. The sentence imposed today appropriately recognizes the seriousness of Mr. Carroll’s crime.”
According to evidence presented in court today, Carroll was employed as the administrator of the Bluefield Virginia Rescue Squad in Tazewell County from 2005 to June 2011. Between October 11, 2008 and October 23, 2011, Carroll incurred personal credit card charges on at least 4 of the Squad’s credit cards, without authorization to do so from the Squad’s Board of Directors.
In addition, in May 2011, in an effort to hide his crime, Carroll obtained a loan from a bank without authorization to do so from the Squad’s Board of Directors and deposited some of the proceeds of the loan into the Squad’s account.
The investigation of the case was conducted by the United States Secret Service and the Virginia State Police. Assistant United States Attorney Randy Ramseyer prosecuted the case for the United States.
Bluefield, W.Va Resident Pleads to Structuring and Wire Fraud ChargesRead the Press Release
ABINGDON, VIRGINIA – A West Virginia woman, who was part of a Nigerian wire fraud scheme, pled guilty yesterday in the United States District Court for the Western District of Virginia in Abingdon.
Audrey Elaine Elrod, 45, of Bluefield, W.Va., waived her right to be indicted yesterday and pled guilty to a two-count Information charging her with one count of structuring transactions to avoid reporting requirements and one count of conspiracy to commit wire fraud.
“Ms. Elrod and her co-conspirators stole hundreds of thousands of dollars in an elaborate fraud scheme,” United States Attorney Timothy J. Heaphy said today. “This United States Attorney’s Office will continue to prioritize the investigation and prosecution of financial fraud and bring those who commit such fraud to justice.”
According to evidence presented in court by Assistant United States Attorney Randy Ramseyer, Elrod was a participant in a Nigerian wire fraud scheme in which money was sent to Elrod from victims. Elrod then structured the transactions and forwarded most of the proceeds to Nigeria, via wire transfer. Between March 2012 and July 2013, Elrod received $446,927 in wire transfers into bank accounts she controlled. Between July 2012 and July 2013, Elrod structured $411,411 in cash transactions in an effort to hide her activity from the government.
At sentencing, Elrod faces a maximum possible penalty of up to 20 years in prison on the wire fraud charge and a maximum possible penalty of up to 10 years in prison on the structuring charge. In addition, the defendant faces a possible additional10-year prison term, per count, for committing these crimes while on pretrial release.
The investigation of the case was conducted by the Internal Revenue Service, Criminal Investigations, the United States Marshal Service, the Russell County Sheriff’s Office, the Bluefield Virginia Police Department, and the Bluefield West Virginia Police Department. Assistant United States Attorney Randy Ramseyer is prosecuting the case for the United States.
Beverly Man Pleads Guilty to Child Pornography ChargesRead the Press Release
BOSTON – A Beverly man who sold child pornography and erotica was convicted today for mailing child pornography to a customer in Atlanta.
Stanton Hager, 67, pleaded guilty to mailing child pornography and possession of child pornography. He is scheduled to be sentenced by Judge Rya W. Zobel on April 9, 2014.
Hager operated a business selling child pornography and child erotica over the Internet. In April 2013, personnel at an Atlanta bank notified law enforcement that they received a package containing child pornography and child erotica. The package, which had been wrongly delivered to and opened by the bank, had been mailed by Hager and intended for a customer in Atlanta.
In May 2013, law enforcement obtained a search warrant of Hager’s Beverly residence where they found a collection of child pornography including videos of children and adult males engaging in sex. Also found at his residence were documents and records pertaining to Hager’s business of selling child pornography and erotica. His business webpage made reference to “boy love” as his specialty. The government indicated that after being advised of his rights by law enforcement, Hager stated that he knows child pornography is illegal, but that the government had no right to come into his home and take his pictures.
During today’s hearing, Judge Zobel inquired about releasing the defendant, who had been held in custody since his arrest, prior to sentencing. The government argued against release and informed the court that there is reason to believe that Hager has had sexual contact with children. Specifically, during the search of his residence law enforcement recovered Hager’s personal journal where he had written that he had had sexual contact with children during a stay in Thailand. The government further described that an entry in Hager’s journal described a sexual encounter with a boy in Thailand Hager believed was 11-years-old.
Hager was detained until sentencing. He faces a maximum penalty of 20 years in prison, to be followed by five years of supervised release. Under federal law, he must serve at least five years in prison.
United States Attorney Carmen M. Ortiz and Kevin M. Niland, Inspector in Charge of the U.S. Postal Inspection Service in Boston, made the announcement today. The case is being prosecuted by David Tobin of Ortiz’s Major Crimes Unit.
Bastrop Resident Sentenced to 65 Months in Prison for Attempting to Receive Child PornographyRead the Press Release
LAFAYETTE, La. – United States Attorney Stephanie A. Finley announced that Christopher Wallace, 25, of Bastrop, La., was sentenced last week (January 10, 2014) by U.S. District Court Judge Elizabeth E. Foote to 65 months in prison and five years of supervised release for attempting to receive child pornography. He pleaded guilty on September 5, 2013.
According to evidence presented at the guilty plea, on January 31, 2011, Wallace began chatting online with a female he believed to be 14 years of age. He asked the girl, who was actually an undercover officer, to perform sexual acts in front of a web camera, while Wallace himself also performed sexual acts in front of the camera. Wallace was attempting to receive the sexually explicit video by using the web camera feature.
Homeland Security Investigations and the Lafayette Police Department conducted the investigation. Assistant U.S. Attorney John Luke Walker prosecuted the case. This case is part of Project Safe Childhood, a U.S. Department of Justice nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The U.S. Attorney’s Office and the U.S. Department of Homeland Security/Homeland Security Investigations/Immigration & Customs Enforcement (ICE) encourages the public to report suspected child predators and any suspicious activity through its toll-free hotline at (866) DHS-2ICE. Investigators are available at all hours to answer hotline calls. Tips or other information can also be submitted to ICE online at www.ice.gov/exec/forms/hsi-tips/tips.asp. Tips may be reported anonymously.
Another Greenleaf Co-owner Pleads Guilty to Multi-million-dollar Mortgage Fraud SchemeRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a Nixa, Mo., man who was a co-owner of Greenleaf Companies has pleaded guilty in federal court to aiding and abetting a bank fraud conspiracy that was part of a multi-million-dollar mortgage investment scheme.
Eric Gagnepain, 41, of Nixa, waived his right to a grand jury and pleaded guilty before U.S. Magistrate Judge David P. Rush on Thursday, Jan. 9, 2014, to a federal information that charges him with aiding and abetting a conspiracy to commit bank fraud.
Gagnepain co-owned and operated Greenleaf Companies and all of its subsidiaries, along with Scot Dasal, 47, of Republic, Mo., from 2006 through May 2008. During this time, Greenleaf sponsored real estate investment seminars that were designed to recruit potential investors to apply for mortgage loans for the construction and sale of residential homes in southwest Missouri and northwest Arkansas.
By pleading guilty today, Gagnepain admitted that he aided and abetted others in the creation and submission of fraudulent mortgage loan documents. These mortgage loan documents contained material false statements regarding the true source of monies provided at the time of closing, as well as fraudulently omitting the payment of monies obtained from the sale of the real estate properties.
Dasal was sentenced on Nov. 21, 2013, to three years in federal prison without parole and ordered to pay $2,911,209 in restitution. Dasal pleaded guilty to aiding and abetting a bank fraud.
According to the plea agreement, Gagnepain derived more than $1 million in gross receipts from his criminal conduct. The total loss amount resulting from the bank fraud conspiracy is between $2.5 million and $7 million.
The plea agreement cites a specific instance of such fraud that occurred on March 12, 2008. Gagnepain and others created false mortgage loan documents that were submitted to Flagstar Bank. The loan documents fraudulently stated that the borrower had provided their own monies at the time of the closing; in reality, however, Greenleaf provided monies that were falsely identified as “cash from borrower.” Additionally, the loan documents omitted the fact that Greenleaf would receive monies from the sale of the real estate property from the seller. If Flagstar Bank had known the true source of the monies provided on behalf of the borrower, or that Greenleaf was receiving monies from the sale of this real estate property, the bank would have denied the mortgage loan application.
Under the terms of the plea agreement, Gagnepain will be sentenced to four years in federal prison without parole and must pay restitution in the amount ordered by the court. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office. Gagnepain must also plead guilty to state charges (State of Missouri vs. Eric Christian Gagnepain). The sentence in the state case will be served concurrently with the federal sentence.
This case is being prosecuted by Assistant U.S. Attorney Patrick Carney. It was investigated by the FBI and IRS-Criminal Investigation.
Annapolis Forum Addresses Growing Threat of Heroin AbuseRead the Press Release
U.S. Attorney Urges Parents and Teachers to Focus on Drug Prevention in 2014
Baltimore, Maryland – In opening remarks at a regional drug abuse symposium held in Annapolis today, U.S. Attorney Rod J. Rosenstein sounded the alarm about a surge in drug overdose deaths and addiction and called on parents and teachers to “teach every student, from first grade through twelfth grade, about the horrible consequences of using heroin and other debilitating addictive drugs.”
“Heroin is one of the leading causes of death in Maryland, and some victims are teenagers who start by taking oxycodone and similar prescription drugs from their parents’ medicine cabinets,” said Mr. Rosenstein. “In 2012, more Marylanders died of heroin than murder. It is essential to treat drug addiction as a communicable disease that is preventable. Today I call on parents and teachers to help to prevent drug abuse by teaching children about the dangers of drug addiction and how to avoid it.”
Maryland reported 378 heroin overdose deaths in 2012, an increase from 245 deaths in 2011. A total of 761 drug overdose deaths were reported in the state in 2012.
The symposium, hosted by the Baltimore/Washington High Intensity Drug Trafficking Area (“HIDTA”) under the leadership of Executive Director Tom Carr, brings together key law enforcement, prevention and treatment professionals from Maryland, Virginia and the District of Columbia as well as four surrounding HIDTAs: Appalachia, Philadelphia/Camden, New York/New Jersey, and New England. The purpose of the symposium is to raise awareness about the surge in heroin abuse, explain the relationship between heroin overdoses and the abuse of prescription drugs such as opioids, and develop programs and strategies to address the problem.
Further information about heroin and prescription drug abuse is available at www.justice.gov/dea . For more information about the HIDTA program, please visit www.hidta.org.
Annandale Mortgage Broker Pleads Guilty to Involvement in Mortgage Fraud SchemeRead the Press Release
ALEXANDRIA, Va. – Kil Seok (“Michael”) Seo, 49, formerly of Fairfax, Va., pleaded guilty today to bank fraud and aggravated identity theft charges in connection with his involvement in a mortgage fraud scheme.
Dana J. Boente, Acting United States Attorney for the Eastern District of Virginia, and Valerie Parlave, Assistant Director in charge of the FBI’s Washington Field Office, made the announcement after the plea was accepted by United States District Judge James C. Cacheris.
Seo was indicted on December 10, 2009, by a federal grand jury on charges related to a scheme to defraud mortgage lenders. Seo faces a maximum penalty of 32 years’ imprisonment, which includes a mandatory two-year term of imprisonment, when he is sentenced on April 3, 2014.
According to the indictment and a statement of facts filed with the plea agreement, Seo, an Annandale, Va., mortgage broker, schemed with others, including Peter Jin, to defraud lenders by transferring title to residential properties into the names of victims without their knowledge or consent and then opening home equity lines of credit in victims’ names, again without their knowledge or consent. Seo and Jin then opened bank accounts in the victims’ names for the purpose of receiving the fraudulently-obtained loan proceeds. As part of the scheme, Seo obtained from the Virginia Department of Motor Vehicles an identification card in the name of a victim but with Seo’s photo. He used that fraudulent ID to take out a home equity loan in the victim’s name. In total, the scheme resulted in losses to the lenders of nearly $900,000. Seo has resided in South Korea since 2009, and he was extradited to the United States in November, 2013 to face the criminal charges contained in the December 2009 indictment.
In 2009, co-defendant Jin pleaded guilty to mail fraud and aggravated identity theft charges in connection with his role in the offense and was sentenced to 48 months’ imprisonment.
This case was investigated by the Federal Bureau of Investigation. Assistant United States Attorney Timothy D. Belevetz is prosecuting the case on behalf of the United States.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.Anchorage Man Sentenced to 70 Months for Narcotics TraffickingRead the Press Release
Anchorage, Alaska-U.S. Attorney Karen L. Loeffler announced today that an Anchorage man was sentenced in federal court in Anchorage for his role in an Anchorage and Fairbanks drug conspiracy.
Antonio Fleming, a/k/a, “Wookie,” age 35, from Anchorage, Alaska was sentenced on Tuesday, January 14, 2014, by United States District Court Chief Judge Ralph R. Beistline. Fleming received a sentence of 52 months in prison and 5 years of supervised release on charges related to a drug conspiracy. During the course of the drug conspiracy, Fleming was also on Federal Supervised Release from a prior drug conspiracy for which he was sentenced to 120 months in November 2002. As a result of his new conviction, Fleming had 18 months imposed for the probation violation to be served consecutive to the 52 months, for a total of 70 months imprisonment.
Fleming was a member of a drug trafficking conspiracy during which he and his co-conspirators attempted to conceal their drug trafficking by claiming they were involved in a legitimate business, specifically that they were “artists,” employees, or promoters of an Anchorage recording label and rap and hip hop performance group known as “Out Da Cutt” (ODC) Entertainment and “Up North ‘D’” or “Dope Boys” (UNDB). Members of this conspiracy would record rap and hip hop songs, post videos on Youtube.com, and perform local shows in Anchorage and Fairbanks. Much of their music glorified the lifestyle of selling illegal narcotics and committing other crimes. The lavish and extravagant lifestyle portrayed in their music and videos was supported by their sales of illegal narcotics. Fleming held himself out as a business manager of the record label and recording group. During the course of the conspiracy, Fleming was mainly responsible for collecting drug debts.
Fleming has a prior federal drug trafficking conspiracy conviction. Before imposing a sentence, Judge Beistline chastised the defendant for returning to the same criminal lifestyle so soon after being released from a lengthy prison sentence for a similar crime. Judge Beistline characterized the defendant as an "enforcer" during the drug conspiracy, and informed the defendant that he was being sentenced so that others would be deterred in the future and to re-affirm societal norms.
Fleming was a member of a wide ranging conspiracy along with 13 co-conspirators located in Anchorage and Fairbanks. Christopher Anderson was previously sentenced to 14 months imprisonment on November 2, 2012. DeMarr Moultrie was sentenced to 40 months imprisonment on May 1, 2013. Jeraelyn Hill was sentenced to 66 months imprisonment on May 28, 2013. Jerry Wormley was sentenced to 36 months imprisonment on May 31, 2013. Rock Phelps II was sentenced to 18 months imprisonment on June 14, 2013. Brent Gunnels was sentenced to 6 months on August 2, 2013. Mihla Hall was sentenced to 28 months on August 21, 2013. Joshua Mustovich was sentenced to 87 months on September
6, 2013. Dalon Johnson was sentenced to 92 months on September 24, 2013. Donnell Johnson, Tevoris Carter, Emma Shine, and Terrance Fleming have plead guilty for their roles in connection with the conspiracy and await sentencing.Ms. Loeffler commended the Federal Bureau of Investigation, the Drug Enforcement Administration, the United States Postal Service, the Internal Revenue Service Criminal Investigation Division, and the Anchorage Police Department for the investigation leading to the successful prosecution of Mr. Fleming.
Alabama Man Pleads Guilty to Tax Fraud and Identity TheftRead the Press Release
Montgomery, Alabama - Nakia Jackson pleaded guilty to one count of conspiracy to defraud the United States and one count of aggravated identity theft for his role in a stolen identity refund fraud scheme, announced U.S. Attorney George L. Beck Jr. for the Middle District of Alabama and the Internal Revenue Service (IRS).
According to court documents, between January 2009 and March 2011, Jackson obtained stolen identities from an Alabama state employee and used those identities to file false tax returns. Jackson recruited a bank employee, LaQuanta Clayton, to assist him in having the false income tax refunds deposited into various bank accounts. He obtained permission from several individuals to use their bank accounts to receive false refunds and when a false refund was deposited, Jackson would direct the individuals to withdraw the money and give the money to him. In total, Jackson filed over 100 false tax returns and requested over $400,000 in refunds.
Sentencing has been scheduled for April 23, 2014. Jackson faces a statutory minimum sentence of two years in prison and a statutory maximum sentence of 12 years in prison, three years of supervised release, restitution and a maximum fine of $250,000, or twice the loss caused by the offense. LaQuanta Clayton has already pleaded guilty and is awaiting sentencing.
IRS-Criminal Investigation agents investigated this case and Tax Division Trial Attorneys Charles M. Edgar Jr. and Michael Boteler and Assistant U.S. Attorney Todd Brown are prosecuting the case.
More information about the Tax Division and its enforcement efforts can be found at justice.gov/tax.
PRESS CONTACT: Clark Morris
Email: [email protected]
Telephone: (334) 551-1755
Fax: (334) 223-7617AirTran Employee Sentenced for Bypassing TSA Security with A Machine GunRead the Press Release
ATLANTA - Rasondo Maurice Norris, who attempted to smuggle cocaine and a Mac-11 machine gun onto a commercial flight has been sentenced to ten years in prison.
“Security screening at our airports is vital to keeping citizens safe,” said United States Attorney Sally Quillian Yates. “By using his credentials to bypass security with backpacks of contraband, the defendant tried to allow drugs and a machine gun onboard a commercial flight. Public safety is a responsibility we take seriously, and our office will continue to prosecute those who are endangering our citizens.”
“The defendant abused his position to enrich himself without any regard for the harm that could have resulted from his actions,” said Brock D. Nicholson, special agent in charge of HSI Atlanta. “HSI special agents will continue to work closely with our partners at Hartsfield-Jackson to ensure the safety of the traveling public.”
“As an integral part of the David G. Wilhelm OCDETF Strike Force, IRS Criminal Investigation is proud to have worked with our Strike Force partners to pursue this individual who disregarded the public trust for his own financial benefit.” stated Special Agent in Charge, Veronica F. Hyman-Pillot. “IRS Criminal Investigation not only enforces the nation's tax laws, but we also take particular interest in cases where the public is at risk due to unlawful activity.”
According to United States Attorney Yates, the charges, and other information presented in court: Norris, 30, of Stone Mountain, Ga., worked as a baggage handler for AirTran Airlines at the Hartsfield Jackson International Airport. In May 2013, HSI Special Agents learned that, for a fee, Norris would help people engaged in criminal activity bring contraband onto airplanes by using his security clearance to bypass TSA security.
On or about May 23, 2013, an HSI Special Agent, acting in an undercover capacity, gave the defendant a backpack containing what was represented to be five kilograms of cocaine. Norris took the backpack from the undercover agent, bypassed security, and returned the backpack back to the agent once the agent cleared security. In a similar manner, on May 30, 2013, Norris again bypassed security with a backpack, this time containing what was represented to be $500,000 in drug proceeds. Finally, on June 5, 2013, Norris once more bypassed security with a backpack carrying what was represented to be three kilograms of cocaine, and a Mac 11 automatic firearm (which had been previously rendered inert by law enforcement agents), a magazine and a silencer. Norris was paid between $600 and $800 each time he bypassed security with the contraband.
Norris admitted in court that he violated the Hartsfield-Jackson International Airport’s security measures by bringing the Mac-11 machine gun, silencer, and magazine past the TSA security checkpoints and that he attempted to possess five kilograms of cocaine in the airport.
Norris was sentenced by United States District Judge Steven C. Jones to ten years in prison. Norris was convicted on October 10, 2013, after he pleaded guilty.
The agents who investigated this case are assigned to the David G. Wilhelm OCDETF Strike Force and are employed by the following law enforcement agencies: the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations; the Bureau of Alcohol, Tobacco, Firearms and Explosives; Internal Revenue Service Criminal Investigation; and the Drug Enforcement Administration.
Assistant United States Attorney Kamal Ghali prosecuted the case.
The U.S. Attorney’s Office in Atlanta recommends parents and children learn about the dangers of drugs at the following web site: www.justthinktwice.com.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia is www.justice.gov/usao/gan.
Administrative Assistant Charged with Theft from Cambridge Non-ProfitRead the Press Release
BOSTON – The administrative assistant of a non-profit organization was charged yesterday with stealing $118,000 from the institute.
Tysen Julian, 33, of East Hampstead, New Hampshire, was charged by Information, and has agreed to plead guilty to theft from an organization receiving more than $10,000 in federal funds in a one year period. From October 2009 through July 2013, Julian allegedly stole approximately $118,000 from a non-profit institute in Cambridge by submitting false expense reimbursements.
Julian faces a maximum sentence of 10 years in prison, three years of supervised release, $118,000 in restitution, and a $250,000 fine, or twice the gross gain or loss, whichever is greater.
United States Attorney Carmen M. Ortiz and Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Sara Miron Bloom of Ortiz's Economic Crimes Unit.
13 January 2014
Zia Pueblo Man Pleads Guilty to Federal Arson ChargeRead the Press Release
ALBUQUERQUE – Lawrence Shije, 35, a member and resident of Zia Pueblo, pleaded guilty this morning to a federal arson charge.
Shije was indicted on Oct. 30, 2013, and charged with setting fire to and burning a dwelling located on Zia Pueblo on June 30, 2012. Today, Shije pled guilty to the indictment and admitted maliciously setting fire to and burning a small area of a residence located on Zia Pueblo. In his plea agreement, Shije acknowledged that the owner of the residence is the mother of his two children, and that she and the children were in the residence at the time he started the fire.
Under the terms of his plea agreement, Shije will be sentenced to a year and a day in prison followed by a term of supervised release to be determined by the court. Shije remains at a half-way house under pretrial supervision pending his sentencing hearing, which has yet to be scheduled.
This case was investigated by the Northern Pueblos Agency of the BIA’s Office of Justice Services and is being prosecuted by Special Assistant U.S. Attorney David Adams. It 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.
Western Pennsylvania U.S. Attorney’s Office Collects $24.4 Million in Civil and Criminal Actions for U.S. Taxpayers in Fiscal Year 2013Read the Press Release
PITTSBURGH - U.S. Attorney David J. Hickton announced today that the Western District of Pennsylvania collected $24,480,775.61 in criminal and civil actions in Fiscal Year 2013. Additionally, the Western District of Pennsylvania worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect an additional $5,702,777.80 in cases pursued jointly with these offices.
Attorney General Eric Holder announced on Thursday that the Justice Department collected approximately $8.1 billion in civil and criminal actions in the fiscal year ending Sept. 30, 2013. The more than $8 billion in collections in FY 2013 represents nearly three times the appropriated $2.76 billion budget for the 94 U.S. Attorney’s offices and the main litigating divisions in that same period.
“The department’s enforcement actions help to not only ensure justice is served, but also deliver a valuable return to the American people,” said Attorney General Holder. “It is critical that Congress provide the resources necessary to match the department’s mounting caseload. As these figures show, supporting our federal prosecutors is a sound investment.”
“Recovering monies due the American taxpayer is a priority and we have made substantial progress improving our performance over the last three years,” said U.S. Attorney Hickton. “The $24.4 million collected in FY 2013 represents a 86.2 percent increase over last year’s collections of $13.1 million. Collections related to civil actions rose 58 percent, to $22.9 million from $9.6 million in FY 2012. Overall, in FY 2013, we collected more than twice the amount of money the federal government allocates us to operate our office.”
The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.
The largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal health, safety, civil rights or environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education.
Wendell Man Sentenced for Distributing MethamphetamineRead the Press Release
BOISE – U.S. Attorney Wendy J. Olson announced today that Fernando Manuel Soares, 53, of Wendell, Idaho, was sentenced today for distribution of methamphetamine. U.S. District Judge Edward J. Lodge sentenced Soares this afternoon to 72 months in prison followed by five years of supervised release. He pleaded guilty to the charge on October 21, 2013. Judge Lodge fined Soares $1,000, and ordered him to forfeit $10,000 in proceeds of the offense and $2,292 in seized currency.
According to court proceedings, Soares sold methamphetamine to an undercover law enforcement agent on March 5 and March 19, 2013. On May 21, 2013, Soares made arrangements to sell another ounce of methamphetamine to the undercover agent. Soares was stopped on his way to complete the transaction, and found to have 36 grams of methamphetamine in his vehicle. A search warrant was served at his residence in Wendell, and an additional 437.3 grams of methamphetamine, a set of digital scales, and $2,292 in U.S. currency was found in Soares’ bedroom.
The case was investigated by the Gooding County Sheriff’s Office, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and Drug Enforcement Administration.
United States Settles Action Against New York City Department of Education for Submitting False Claims to Medicaid for Psychological Services to Special Education StudentsRead the Press Release
Loretta E. Lynch, United States Attorney for the Eastern District of New York, today announced that the United States has entered into a settlement with the City of New York in the case of Ohlmeyer ex rel. United States of America v. City of New York, a whistleblower action brought pursuant to the qui tam provisions of the federal False Claims Act, 31 U.S.C. Sections 3729-33 (the FCA). In its civil complaint, the United States alleged that the City of New York Department of Education (DOE) submitted false claims to Medicaid for psychological counseling services to special education students in the New York City public schools. The settlement calls for the City to pay $1,375,000 to the United States.
“When Medicaid shells out scarce dollars for services that are not provided, both the students in need of psychological support and the public fisc are harmed,” stated United States Attorney Lynch. “We will vigorously pursue entities, including local governmental agencies that seek reimbursement of federal funds to which they are not entitled.”
As described in the complaint, Medicaid pays DOE a flat fee of $223 for each student to whom DOE provides at least two psychological counseling sessions in a calendar month. Half of that money comes from the federal government. DOE is not entitled to any payment if an individual student receives fewer than two counseling sessions in a month. The United States alleged that, between 2001 and 2004, the DOE knowingly billed Medicaid for counseling services to individual students, even though it provided fewer than two counseling sessions per month to those students. In one case, DOE requested 15 months of payments from Medicaid for psychological counseling to a student during the 2001-02 and 2002-03 school years. According to DOE’s own service records, the student received fewer than two counseling sessions in 12 of those months.
Of the settlement amount, 15%, or $206,250, will be paid to the Relator, Dana Ohlmeyer, who initiated the case under the qui tam, or whistleblower provisions of the FCA. The City will also pay FCA attorney’s fees of $40,000.
The case was handled by Assistant United States Attorney Michael J. Goldberger with assistance from Department of Health and Human Services Office of Inspector General Special Agent Elysia Doherty.
United States Attorney Ortiz Appoints Fred Wyshak to Head Public Corruption UnitRead the Press Release
BOSTON – United States Attorney Carmen M. Ortiz announced today that she has appointed Assistant United States Attorney Fred Wyshak as the Chief of her Public Corruption and Special Investigations Unit. Mr. Wyshak replaces former Assistant United States Attorney Brian Kelly who left the office at the end of last year.
“Fred has an extraordinary record as a trial lawyer and a profound commitment to public service,” said U.S. Attorney Ortiz. “While he is well-known for his efforts to prosecute and convict James Bulger, Fred’s prosecutorial resume extends far beyond that. He has served this office with distinction for 25 years and I know his experience and legal acumen will serve him well in this position.”
In 1978, Mr. Wyshak began his legal career in the Brooklyn (NY) District Attorney’s Office, as an Assistant District Attorney, later becoming the Deputy Chief of that office’s Economic Crime and Arson Bureau. He came to Boston in 1989, coming from the US Attorney’s Office in New Jersey where he prosecuted organized crime cases, including the acting boss of a prominent LCN family. He joined the United States Attorney’s Office in Massachusetts as a prosecutor in the Organized Crime Strike Force, handling some very difficult and defining cases – including labor racketeering cases. In 2005, he was cross-designated as a state’s attorney in Florida to assist in the prosecution of former FBI agent John Connolly for the murder of John Callahan.
“I am honored to have the opportunity to serve as Chief of the Public Corruption and Special Investigations Unit,” said Wyshak. “I intend to build upon the strong foundation and hard work of each of my predecessors and the dedicated prosecutors in the Public Corruption Unit. These cases are crucial to ensure that the public maintains faith in government, the law is upheld, and taxpayer money is spent correctly. I look forward to continuing to prosecute these very important cases.”
While Mr. Wyshak has prosecuted some of the most high-profile cases handled by this office – including Bulger and the Big Dig cases – he has also worked behind-the-scenes as its Senior Litigation Counsel, providing training and mentoring to Assistant United States Attorneys, for the past 10 years.
“Fred is known for his excellent trial skills, case preparation and an attention to detail and potential legal issues, which have consistently resulted in successful prosecutions. Given his experience and accomplishments, I am thrilled to have him as Chief of the Public Corruption Unit,” added U.S. Attorney Ortiz.
Mr. Wyshak is a graduate of New York University and St. John’s School of Law.
The Public Corruption and Special Prosecutions Unit handles sensitive cases involving offenses at the federal, state and local levels by the actions of corrupt officials who abuse the power and responsibilities that they have been entrusted. Whether it be accepting a bribe, inflating a salary, or selling drugs on the side, corruption takes a heavy toll on communities.
Union County, N.J., Man Admits Distributing Images of Child Sexual AbuseRead the Press Release
NEWARK, N.J.— A Union County, N.J., man today admitted distributing images of child sexual abuse over the Internet, U.S. Attorney Paul J. Fishman announced.
Andrew Johnson, 30, of Cranford, N.J., pleaded guilty before U.S. District Judge Susan D. Wigenton in Newark federal court to an information charging him with one count of distribution of child pornography.
According to documents filed in the case and statements in court:
Johnson admitted that on Dec. 7, 2012, he made available for others to download via an online peer-to-peer file-sharing network images and videos of child pornography that were stored on his home computer. An undercover law enforcement agent successfully downloaded from Johnson one image and 14 videos of child pornography via the file sharing network.
As part of his guilty plea, Johnson agreed to forfeit the computers and computer accessories he used to commit the offense. He will also be required to register as a sex offender.
The count of distributing child pornography to which Johnson pleaded guilty carries a mandatory minimum penalty of five years in prison, a maximum potential penalty of 20 years in prison and a $250,000 fine. Sentencing is currently scheduled for April 22, 2014.
U.S. Attorney Fishman credited special agents of the FBI’s Child Exploitation Task Force, under the direction of Special Agent in Charge Aaron T. Ford in Newark; and the Cranford Police Department with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Danielle Alfonzo Walsman of the U.S. Attorney’s Office Criminal Division in Newark.
14-013
Defense counsel: Lorraine Gauli-Rufo Esq., Assistant Federal Public Defender, Newark
Johnson Information
U.S. Attorney’s Office Collects over $8.1 Million from Civil & Criminal Actions and Forfeitures in Fy 2013Read the Press Release
GRAND RAPIDS, MICHIGAN – U.S. Attorney Patrick A. Miles, Jr. announced today that the U.S. Attorney’s Office for the Western District of Michigan collected $5,545,164.37 in criminal and civil actions in Fiscal Year 2013. Of this amount, $3,193,153.56 was collected as fines, penalties, and restitution in criminal actions and $2,352,010.81 was collected in civil actions. Working with partner agencies and divisions, the U.S. Attorney’s Office for the Western District of Michigan also collected $2,560,915 from civil, criminal, and administrative forfeiture actions in FY 2013.
Additionally, the U.S. Attorney’s Office for the Western District of Michigan worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect an additional $529,531.18 in cases pursued jointly with these offices. Of this amount, $29,531.18 was collected in criminal actions and $500,000 was collected in civil actions.
Attorney General Eric Holder announced on Thursday that the Justice Department collected approximately $8.1 billion in civil and criminal actions in the fiscal year ending September 30, 2013. The more than $8 billion in collections in FY 2013 represents nearly three times the appropriated $2.76 billion budget for the 94 U.S. Attorney’s offices and the main litigating divisions in that same period.
“The department’s enforcement actions help to not only ensure justice is served, but also deliver a valuable return to the American people,” said Attorney General Holder. “It is critical that Congress provide the resources necessary to match the Department’s mounting caseload. As these figures show, supporting our federal prosecutors is a sound investment.”
“The U.S. Attorney’s Office for the Western District of Michigan is actively working to make sure crime does not pay,” said U.S. Attorney Miles. “We are using all legal tools available to protect the public.”
Among the more significant recoveries in FY 2013, the U.S. Attorney’s Office collected over $1,000,000 in civil damages and criminal restitution in a parallel civil and criminal healthcare fraud case against Babubhai Rathod. Rathod, a disgraced physical therapist, pled guilty to one count of conspiring to violate the federal Anti-Kickback Statute, voluntarily agreed to a 20-year exclusion from federal healthcare programs, and liquidated his business holdings and certain personal property to pay the civil damages and criminal restitution. In a separate case, the U.S. Attorney’s Office collected $988,366 in criminal restitution from Elaine Dawson, the owner of five cinemas in Bellaire, Petoskey, Gaylord, Mackinaw City, and Cheboygan, Michigan. Dawson pled guilty to tax evasion. She routinely under-reported the number of patrons who bought movie tickets, and under-reported her receipts from sales of concessions, gift certificates, and other items, then skimmed the cash from the unreported sales for personal use.
The U.S. Attorneys’ Offices, along with the Department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the Department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.
The largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal health, safety, civil rights or environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education.
Proceeds generated from civil, criminal, and administrative forfeiture actions are deposited in the Department of Justice Assets Forfeiture Fund or the Treasury Department’s Treasury Forfeiture Fund. These funds are used to restore funds to crime victims and for a variety of law enforcement purposes through the Department of Justice’s equitable sharing program. In FY 2013, the U.S. Attorney’s Office for the Western District of Michigan distributed $330,377 to state and local law enforcement agencies through the equitable sharing program.
These FY 2013 civil and criminal collections and forfeiture figures total $8.1 million for the U.S. Attorney’s Office for the Western District of Michigan. By way of comparison, the total figures for the office in FY 2012 and FY 2011 were approximately $8.2 million and $7.5 million, respectively.
END
U.S. Attorney Warns of Growing Threat of Taxpayer ID TheftRead the Press Release
U.S. Attorney Jenny A. Durkan joined federal law enforcement partners warning about a growing problem of identity theft related to tax refund fraud. Scammers across the country are using other people’s personal information to try to claim income tax refunds. People may not know they are a victim until they try to file their tax return and it is rejected because someone using their Social Security Number has already filed and claimed a refund.
“Protecting your personal information has never been more critical,” said U.S. Attorney Jenny A. Durkan. “Always mail your tax documents from a secure mailbox, or file electronically on a secure network. Using a trusted tax professional and filing early can also protect you from being a victim.”
In 2013, nearly 700 Washington residents reported being a victim of tax related identity theft, and there are likely many more people who simply did not report being victimized. Nationwide tax ID theft fraud is estimated to cost the U.S. Treasury more than $5 billion annually.
“Stealing identities and trying to file false tax returns not only threatens the integrity of our tax system, it victimizes innocent people. It can cost victims time and stress when they have done nothing wrong,” said Kenneth J. Hines, Special Agent in Charge of IRS Criminal Investigation in the Pacific Northwest. “The men and women of IRS, along with our law enforcement partners and the United States Attorney's Office, will continue to pursue fraudsters who try and help themselves to our nation’s tax dollars and who cause so much heartache for the victims of this crime.”
This week as part of Tax Identity Theft Awareness Week, the Federal Trade Commission and the Internal Revenue Service are teaming up to educate the public about ID theft tax refund fraud. The FTC is providing a webinar tomorrow to educate tax preparers about the problem and how to assist their clients if they discover they have been the victim of tax refund ID theft. For those who have had their identities stolen and used for fraud, the IRS will issue a special PIN to use for filing taxes. More information on the PIN program is available at http://www.irs.gov/uac/Newsroom/IRS-Combats-Identity-Theft-and-Refund-Fraud-on-Many-Fronts-2014
IRS-CI Special Agent in Charge Ken Hines is available to talk further with reporters about the problem of tax ID theft refund fraud. To arrange an interview please contact Leia Bellis at (206) 464-4920 or [email protected].
Both the Federal Trade Commission and the Washington Coalition of Crime Victim Advocates (WCCVA) have resources for victims of identity theft. Find them at www.ftc.gov and www.wccva.org
Two Sentenced, Three Plead Guilty in Marijuana Cultivation ProsecutionsRead the Press Release
FRESNO, Calif. — Two more marijuana cultivators were sentenced and three entered guilty pleas today for their involvement in separate cases resulting from Operation Mercury, a six-county effort that focused on large-scale marijuana cultivation on agricultural land in the Central Valley, U.S. Attorney Benjamin B. Wagner announced.
6,158 Marijuana Plants/Firearms Seized from National Forest Grow (1:12-cr-300 LJO)
Osmin Norberto Mejia, aka Osmin Mejia Masariegos, 31, of La Libertad, Petén, Guatemala, was sentenced to seven years and three months in prison following his guilty plea last year to possessing a firearm in furtherance of drug trafficking and cultivating marijuana at a grow site in the Slick Rock area of the Sequoia National Forest in Kern County. He was also ordered to pay $3,393 to the U.S. Forest Service to cover the costs of cleaning up the grow site. Mejia is subject to deportation upon completion of his prison term.
According to court documents, Mejia was in possession of a shotgun when he encountered law enforcement officers executing a search warrant at the grow site and used the weapon to protect himself and the marijuana plants that he was growing there. Drug agents seized 6,158 marijuana plants from the cultivation site, along with the shotgun Mejia possessed and a rifle found in a tent at a campsite at the grow. The cultivation operation caused significant damage to the land and natural resources. Native vegetation and many oak trees were cut down to make room for the marijuana plants and the ground was terraced. Large amounts of trash and fertilizer bags were scattered throughout the grow site.
The case was investigated by the U.S. Forest Service, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), and the Kern County Sheriff’s Office.
1,313 Marijuana Plants/Handgun Seized from Terra Bella Grow (1:12CR318 LJO)
Jose Guadalupe Zavala Ramos, 33, of Michoacàn, Mexico, was sentenced to two years and three months in prison for conspiring to cultivate, distribute and possess with intent to distribute marijuana plants grown on a 40-acre agricultural parcel in Terra Bella that was rented by Baltazar Rodriguez, 44, also of Michoacàn. According to court documents, Zavala, along with Rodriguez and four others also charged in this case, was found at the cultivation site during the execution of a federal search warrant. The agents seized 1,313 marijuana plants and a loaded .38 caliber handgun from Rodriguez’s residence on the property. The agents obtained the search warrant following surveillance of a drug courier to the Terra Bella site who had delivered supplies to multiple grow sites on National Forest lands in Tulare, Kern, and Ventura Counties.
Zavala was sentenced following his guilty plea last October. In pleading guilty, Zavala acknowledged that he was to be paid $100 a day to assist in tending the marijuana plants. Three of Zavala’s co-defendants have also entered guilty pleas.
Rodriguez and the remaining co-defendant have requested a jury trial, which is set for later this year. The charges against them are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.
This case was also investigated by the U.S. Forest Service with assistance from, HSI, and the Tulare and Ventura County Sheriff’s Offices.
2,932 Marijuana Plants Seized in Fresno Ag Grow (Case No. 1:12C2341 LJO)
Rassamee Phothidokmai, 53; Paul Nokham, aka Boun Theung Hokham, 49; Thavone Onsyphanla, 51; all of Las Vegas, pleaded guilty today to conspiring to cultivate, distribute and possess with intent to distribute marijuana grown on an agricultural parcel on Marks Avenue in rural southwest Fresno. During the execution of a federal search warrant there, narcotics agents found the men, along with 2,932 marijuana plants, and a firearm. Court records indicate that some of the marijuana was destined for Las Vegas.
Sentencing for Nokham and Onsyphanla is scheduled for March 31, 2014 and for Phothidokmai on April 7, 2014. They face a maximum prison sentence of 20 years and a fine of up to $1 million. Their actual sentences will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
This case was investigated by the Drug Enforcement Administration and the Fresno County Sheriff’s Office.
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Each of the above cases stem from Operation Mercury, an intensive marijuana eradication and enforcement effort initiated in 2012 by federal, state, and local law enforcement agencies in six counties to address the increasing problem of the cultivation of marijuana on agricultural land. Operation Mercury resulted in the seizure of nearly half a million marijuana plants and the prosecution of 84 defendants in federal court in Fresno.Assistant U.S. Attorney Karen A. Escobar is handling the above marijuana prosecutions.
Two Sentenced for Assaulting Federal OfficerRead the Press Release
BISMARCK – U.S. Attorney Timothy Q. Purdon announced that on Jan. 13, 2014, Adrienne Ducheneaux, 42, and Chad Lavallie, 40, both of Bismarck, N.D., were sentenced by U.S. District Judge Daniel L. Hovland on a charge of assaulting a federal officer. Ducheneaux pleaded guilty to the charge on Oct. 18, 2013. Lavallie pleaded guilty to the charge on Sept. 10, 2013.
Judge Hovland, after acknowledging that Ducheneaux had amassed three months’ credit for time already served, sentenced Ducheneaux to serve an additional seven month split sentence with four months in federal prison and three months in a half-way house, to be followed by three years of supervised release. Ducheneaux was ordered to pay a $100 special assessment to the Crime Victim’s Fund.
Judge Hovland sentenced Lavallie to serve one year and three months in federal prison, to be followed by three years of supervised release. Lavallie was ordered to pay a $100 special assessment to the Crime Victim’s Fund.
On April 13, 2013, Lavallie was the driver of a vehicle, which was stopped by law enforcement officers near Fort Yates. Ducheneaux was a passenger in the vehicle. While a BIA officer was near Ducheneaux’s window, she grabbed the hand and thumb of the BIA officer and twisted his thumb backwards. As the officer was struggling with Ducheneaux, Lavallie stepped on the vehicle’s accelerator, speeding away from the scene. The officer was able to pull his arm free after having taken several steps with the vehicle.
The case was investigated by the Bureau of Indian Affairs – Standing Rock Agency and the Standing Rock Police Department, with the assistance of the Standing Rock Tribal Prosecutor’s Office.
Assistant U.S. Attorney Gary Delorme prosecuted the case.
Two Former Vice-Presidents of Schuylkill Products, Inc.Read the Press Release
Sentenced In Largest Disadvantaged Business
Enterprise Fraud In Nation's HistoryThe U.S. Attorney's Office for the Middle District of Pennsylvania announced today that Dennis F. Campbell, of Orwigsburg, Pennsylvania, and Timothy G. Hubler, of Ashland, Pennsylvania, were sentenced by the Senior U.S. District Judge Sylvia H. Rambo in Harrisburg in connection with their roles in what the U.S. Department of Transportation (USDOT) has called the largest Disadvantaged Business Enterprise (DBE) fraud in the nation's history.
Campbell, Schuylkill Products, Inc.'s (SPI) former Vice-President in charge of Sales and Marketing, was sentenced to 24 months’ imprisonment, $119 million in restitution to the USDOT and 2 years supervised release. Hubler, SPI's former Vice-President in charge of Field Operations, was sentenced to 33 months’ imprisonment, $119 million in restitution to the USDOT, $82,370 in restitution to the Internal Revenue Service, and 2 years supervised release. Both men were ordered to surrender to the Bureau of Prisons by February 17, 2014 to commence service of their sentences.
Campbell pleaded guilty to DBE fraud in 2008, and Hubler pleaded guilty to DBE fraud and tax fraud in 2008. Romeo P. Cruz, of West Haven, Connecticut, the former owner of Marikina Construction Corporation, the DBE firm which operated as a front for SPI to gain lucrative DBE contracts, pleaded guilty to DBE fraud and tax fraud in 2008 and 2009, and is scheduled to be sentenced on Wednesday, January 15, 2014. All three men cooperated with the government's investigation which led to the conviction of the two former owners of SPI, Ernest G. Fink, of Orwigsburg, Pennsylvania, SPI's former Vice-President and Chief Operating Officer, and Joseph W. Nagle, of Deerfield Beach, Florida, SPI's former President and Chief Executive Officer.
Fink pleaded guilty to DBE fraud in 2010. Nagle was convicted after a four-week jury trial in 2012 of 26 charges relating to the DBE fraud scheme. No sentencing date has been scheduled for Fink and Nagle.
"The sentences handed down today, in what is the largest reported DBE fraud case in USDOT history, serve as clear signals that severe penalties await those who would attempt to subvert USDOT laws and regulations,” said Doug Shoemaker, OIG Regional Special Agent in Charge. “Preventing and detecting DBE fraud are priorities for the Secretary of Transportation and the USDOT Office of Inspector General. Prime contractors and subcontractors are cautioned not to engage in fraudulent DBE activity and are encouraged to report any suspected DBE fraud to the USDOT-OIG. Our agents will continue to work with the Secretary of Transportation, the Administrators of the Federal Highway, Transit and Aviation Administrations, and our law enforcement and prosecutorial colleagues to expose and shut down DBE fraud schemes throughout Pennsylvania and the United States.”
According to U.S. Attorney Peter J. Smith, the DBE fraud lasted for over 15 years and involved over $136 million in government contracts in Pennsylvania alone. SPI, using Marikina as a front, operated in several other states in the Mid-Atlantic and New England regions. Although Marikina received the contracts on paper, all the work was really performed by SPI personnel, and SPI received all the profits. In exchange for letting SPI use its name and DBE status, Marikina was paid a small fixed-fee set by SPI.
The scheme lasted as long as it did because of the numerous fraudulent steps the co-conspirators took to conceal the scheme. SPI personnel routinely pretended to be Marikina personnel by using Marikina business cards, email addresses, stationery, and signature stamps, as well as using magnetic placards and decals bearing the Marikina logo to cover up SPI's logo on SPI vehicles.
SPI and its wholly-owned subsidiary, CDS Engineers, was sold in 2009 and was based in Cressona, Pennsylvania. SPI manufactured concrete bridge beams, as well as other suppliers' products. CDS was SPI’s erection division and installed SPI’s bridge beams as well as other suppliers’ products. USDOT provides billions of dollars a year to states and municipalities for the construction and maintenance of highways and mass transit systems on the condition that small businesses owned and operated by disadvantaged individuals receive a fair share of these federal funds. The DBE fraud here involved SPI's use of Marikina's name and status to obtain DBE contracts that it was not entitled to receive.
The investigation was conducted by the FBI, the USDOT Inspector General's Office, U.S. Department of Labor Inspector General’s Office, and the Criminal Investigation Division of the Internal Revenue Service. Senior Litigation Counsel Bruce Brandler handled the prosecution.
Two Defendants Sentenced for Conspiracy to Distribute MethamphetamineRead the Press Release
Third Co-conspirator Sentencing Set for March 17, 2014
POCATELLO — Vanessa Campos, 25, and Noe Gonzalez, 29, both of Caldwell, Idaho, were sentenced today to serve 47 months and 151 months, respectively, for conspiring to distribute and possess with intent to distribute methamphetamine, U.S. Attorney Wendy J. Olson announced. Judge N. Randy Smith of the Ninth Circuit Court of Appeals, sitting by designation as a district court judge, also ordered Campos and Gonzalez to serve five years of supervised release following their prison terms, and to forfeit all property used to commit the crime and proceeds derived from the crime. Gonzalez was also ordered to pay a $500 fine. Campos pleaded guilty to the charges on October 16, 2013; Gonzalez on August 29.
According to court records, an Idaho State Police trooper stopped a vehicle being driven by Gonzalez on February 12, 2013, in Bonneville County. Campos’s sister was a passenger, and both she and Gonzalez were ultimately arrested. Pursuant to a search warrant, the vehicle was searched the next day. Hidden in the dash of the vehicle, police found a white tube sock containing four baggies of methamphetamine within a larger zip lock bag. The methamphetamine totaled 95.53 grams. Police also found a handgun and loaded magazine in the glove box. Recorded calls between Campos and her sister revealed that Campos planned to get the vehicle out of police impound and recover the methamphetamine before it was discovered by law enforcement. By the time Campos recovered the vehicle, the police had already located the drugs. Gonzalez later admitted to being involved in the conspiracy for two months as the “enforcer,” who attempted to collect money owed for purchased methamphetamine.
Court records further reveal that on March 6, 2013, a probation search of Campos’s residence revealed a digital scale, two glass methamphetamine pipes, a small amount of methamphetamine, and a drug ledger.
Campos’s sister and co-defendant, Angelica Campos, pleaded guilty to the same conspiracy charge on October 23, 2013. She is scheduled to be sentenced in Pocatello on March 17, 2014, by U.S. District Judge Ted Stewart of the District of Utah.
The indictment was the result of an investigation by the Organized Crime Drug Enforcement Task Force (OCDETF), which included the cooperative law enforcement efforts of the Idaho State Police, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), Bonneville County Sheriff's Office, Idaho Falls Police Department, Madison County Sheriff's Office, Rexburg Police Department, Bingham County Sheriff’s Office, Fremont County Sheriff’s Office, Federal Bureau of Investigation (FBI), Internal Revenue Service-Criminal Investigation (IRS-CI), and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). Other federal agencies participating in the OCDETF program include the Drug Enforcement Administration and the U.S. Marshals Service.
The OCDETF program is a federal multi agency, multi-jurisdictional task force that supplies supplemental federal funding to federal and state agencies involved in the identification, investigation, and prosecution of major drug trafficking organizations.
Three Former Rabobank Traders Charged with Manipulating Yen LiborRead the Press Release
Two former Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A. (Rabobank) Japanese Yen derivatives traders and the trader responsible for setting Rabobank’s Yen London InterBank Offered Rate (LIBOR) were charged as part of the ongoing criminal investigation into the manipulation of LIBOR.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, Deputy Assistant Attorney General Brent Snyder of the Justice Department’s Antitrust Division and Assistant Director in Charge Valerie Parlave of the FBI’s Washington Field Office made the announcement.
Earlier today, a U.S. Magistrate Judge sitting in the Southern District of New York signed a criminal complaint charging Paul Robson of the United Kingdom, Paul Thompson of Australia, and Tetsuya Motomura of Japan with conspiracy to commit wire fraud and bank fraud as well as substantive counts of wire fraud. All are former employees of Rabobank, which on Oct. 29, 2013, entered into a deferred prosecution agreement with the Department of Justice as part of the department’s LIBOR investigation and agreed to pay a $325 million penalty. Each defendant faces up to 30 years in prison for each count upon conviction.
“Today, less than three months after Rabobank admitted its involvement in the manipulation of LIBOR, we have charged three of its senior traders with participating in this global fraud scheme,” said Acting Assistant Attorney General Raman. “As alleged, these three traders – working from Japan, Singapore and the U.K. – deliberately submitted what they called ‘obscenely high’ or ‘silly low’ LIBOR rates in order to benefit their own trading positions. The illegal manipulation of this cornerstone benchmark rate undermines the integrity of the markets; it harms those who are relying on what they expect to be an honest benchmark; and it has ripple effects that extend far beyond the trading at issue here. The Justice Department has now charged eight individuals and reached resolutions with four multi-national banks as part of our ongoing and industry-wide LIBOR probe and, alongside our law enforcement and regulatory partners both here and abroad, we remain committed to continuing to root out this misconduct.”
“The conspirators charged today conspired to rig the interest rates used by derivative products throughout the financial industry to benefit their own trading books,” said Deputy Assistant Attorney General Snyder. “Today’s charges demonstrate the department’s commitment to hold individuals accountable for schemes that undermine the integrity of markets that rely on competition to flourish.”
“Manipulation of benchmark rates that are routinely referenced by financial products around the world erodes the integrity of our financial markets,” said Assistant Director in Charge Parlave. “The charges against these individuals represent another step in our ongoing efforts to find and stop those who hide behind complex corporate and securities fraud schemes. I commend the Special Agents, forensic accountants and analysts as well as the prosecutors for the significant time and resources they committed to investigating this case.”
According to the complaint, LIBOR is an average interest rate, calculated based on submissions from leading banks around the world, reflecting the rates those banks believe they would be charged if borrowing from other banks. LIBOR is published by the British Bankers’ Association (BBA), a trade association based in London. At the time relevant to the criminal complaint, LIBOR was calculated for 10 currencies at 15 borrowing periods, known as maturities, ranging from overnight to one year. The published LIBOR “fix” for Yen LIBOR at a specific maturity is the result of a calculation based upon submissions from a panel of 16 banks, including Rabobank.
LIBOR serves as the primary benchmark for short-term interest rates globally and is used as a reference rate for many interest rate contracts, mortgages, credit cards, student loans and other consumer lending products. The Bank of International Settlements estimated that as of the second half of 2009, outstanding interest rate contracts were valued at approximately $450 trillion.
According to allegations in the complaint, all three defendants traded in derivative products that referenced Yen LIBOR. Robson worked as a senior trader at Rabobank’s Money Markets and Short Term Forwards desk in London; Thompson was Rabobank’s head of Money Market and Derivatives Trading Northeast Asia and worked in Singapore; and Motomura was a senior trader at Rabobank’s Tokyo desk who supervised money market and derivative traders employed at Rabobank’s Tokyo desk. In addition to trading derivative products that referenced Yen LIBOR, Robson also served as Rabobank’s primary submitter of Yen LIBOR to the BBA.
Robson, Thompson and Motomura each entered into derivatives contracts containing Yen LIBOR as a price component . The profit and loss that flowed from those contracts was directly affected by the relevant Yen LIBOR on certain dates. If the relevant Yen LIBOR moved in the direction favorable to the defendants’ positions, Rabobank and the defendants benefitted at the expense of the counterparties. When LIBOR moved in the opposite direction, the defendants and Rabobank stood to lose money to their counterparties.
The complaint alleges that from about May 2006 to at least January 2011, Robson, Thompson, Motomura and others agreed to make false and fraudulent Yen LIBOR submissions for the benefit of their trading positions. According to the allegations, sometimes Robson submitted rates at a specific level requested by a co-defendant and consistent with the co-defendant’s trading positions. Other times, Robson made a higher or lower Yen LIBOR submission consistent with the direction requested by a co-defendant and consistent with the co-defendant’s trading positions. On those occasions, Robson’s manipulated Yen LIBOR submissions were to the detriment of, among others, Rabobank’s counterparties to derivative contracts.
In addition to allegedly manipulating Rabobank’s Yen LIBOR submissions, Robson, on occasion and on behalf of one or more co-defendants, coordinated his Yen LIBOR submission with the trader responsible for making Yen LIBOR submissions at another Yen LIBOR panel bank. At times, Robson allegedly submitted Yen LIBOR at a level requested by the other trader, and, at other times, that trader submitted Yen LIBOR at a level requested by Robson.
As alleged in the complaint, Thompson, Motomura and another Rabobank trader described in the complaint as Trader-R made requests of Robson for Yen LIBOR submissions through electronic chats and email exchanges. For example, on May 19, 2006, after Thompson informed Robson that his net exposure for his 3-month fixes was 125 billion Yen, he requested by email that Robson “sneak your 3m libor down a cheeky 1 or 2 bp” because “it will make a bit of diff for me.” On or about May 19, 2006, Robson responded: “No prob mate I mark it low.”
On Sept. 21, 2007, Trader-R asked Robson by email, “where do you think today’s libors are? If you can I would like 1mth higher today.” Robson responded, “bookies reckon .85,” to which Trader-R replied, “I have some fixings in 1mth so would appreciate if you can put it higher mate.” Robson answered, “no prob mate let me know your level.” After Trader-R asked for “0.90% for 1mth,” Robson confirmed, “sure no prob[ ] I’ll probably get a few phone calls but no worries mate… there’s bigger crooks in the market than us guys!”
As another example, on Aug. 4, 2008, in a Bloomberg chat, Motomura asked Robson, “Please set today’s 6mth LIBOR at 0.96 I have chunky fixing.” To this, Robson responded, “no worries mate.”
The complaint alleges that Robson accommodated the requests of his co-defendants. For example, on Sept. 21, 2007, after Robson received a request from Trader-R for a high 1 month Yen LIBOR, Rabobank submitted a 1-month Yen LIBOR rate of 0.90, which was 7 basis points higher than the previous day and 5 basis points above where Robson said that “bookies” predicted it, and which moved Rabobank’s submission from the middle to the highest of the panel.
According to court documents, the defendants were also aware that they were making false or fraudulent Yen LIBOR submissions. For example, on May 10, 2006, Robson admitted in an email that “it must be pretty embarrassing to set such a low libor. I was very embarrassed to set my 6 mth – but wanted to help thomo [Thompson]. tomorrow it will be more like 33 from me.” At times, Robson referred to the submissions that he submitted on behalf of his co-defendants as “ridiculously high” and “obscenely high,” and acknowledged that his submissions would be so out of line with the other Yen LIBOR panel banks that he might receive a phone call about them from the BBA or Thomson Reuters.
A criminal complaint is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless and until convicted.
The investigation is being conducted by special agents, forensic accountants, and intelligence analysts in the FBI’s Washington Field Office. The prosecution is being handled by Trial Attorneys Carol L. Sipperly, Brian Young and Alexander H. Berlin of the Criminal Division’s Fraud Section, and Trial Attorneys Ludovic C. Ghesquiere and Michael T. Koenig of the Antitrust Division. Former Deputy Chief Glenn Leon and Senior Counsel Rebecca Rohr of the Criminal Division’s Fraud Section, along with Assistant Chief Elizabeth Prewitt and Trial Attorneys Eric Schleef and Richard Powers of the Antitrust Division, have also provided valuable assistance. The Criminal Division’s Office of International Affairs has provided assistance in this matter as well.
The broader investigation relating to LIBOR and other benchmark rates has required, and has greatly benefited from, a diligent and wide-ranging cooperative effort among various enforcement agencies both in the United States and abroad. The Justice Department acknowledges and expresses its deep appreciation for this assistance. In particular, the Commodity Futures Trading Commission’s Division of Enforcement referred this matter to the department and, along with the U.K. Financial Conduct Authority, has played a major role in the LIBOR investigation. The department has worked closely with the Dutch Public Prosecution Service and the Dutch Central Bank in the investigation of Rabobank. Various agencies and enforcement authorities from other nations are also participating in different aspects of the broader investigation relating to LIBOR and other benchmark rates, and the department is grateful for their cooperation and assistance. In particular, the Securities and Exchange Commission has played a significant role in the LIBOR series of investigations, and the department expresses its appreciation to the United Kingdom’s Serious Fraud Office for its assistance and ongoing cooperation.
This prosecution is part of efforts underway by President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets and recover proceeds for victims of financial crimes. For more information about the task force visit: www.stopfraud.gov.Third Defendant Sentenced in OCDETF CaseRead the Press Release
POCATELLO – U.S. Attorney Wendy J. Olson announced today that Julian Vega-Valdez, 25, a Mexican national, was sentenced today in federal court in Pocatello to 70 months in prison for distributing five grams or more of actual methamphetamine. He appeared today before Judge N. Randy Smith of the Ninth Circuit Court of Appeals, sitting by special designation as a district court judge.
Vega-Valdez pleaded guilty on August 14, 2013. According to the plea agreement, he admitted that on January 10, 2011, he met with co-defendant Josue Rodriguez-Sanchez in Idaho Falls and provided him with more than five grams of methamphetamine for distribution to other individuals.
Mexican nationals Josue Rodriguez-Sanchez, of Idaho Falls, and Fernando Garcia, of Logan, Utah, were sentenced in December 2013. Rodriguez-Sanchez was sentenced to 120 months in prison for conspiracy to distribute 50 grams or more of actual methamphetamine. Garcia was sentenced to 10 months in prison for possession with intent to distribute a small amount of cocaine.
The charges are the result of an investigation by the Organized Crime Drug Enforcement Task Force (OCDETF), including the Idaho State Police, U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI), Bonneville County Sheriff's Office, Idaho Falls Police Department, Madison County Sheriff's Office, Rexburg Police Department, Bingham County Sheriff’s Office, Fremont County Sheriff’s Office, Federal Bureau of Investigation (FBI), Internal Revenue Service-Criminal Investigation, and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). Other federal agencies participating in the OCDETF program include the Drug Enforcement Administration and the U.S. Marshals Service.
The OCDETF program is a federal multi-agency, multi-jurisdictional task force that supplies supplemental federal funding to federal and state agencies involved in the identification, investigation, and prosecution of major drug trafficking organizations.
Tax Preparer Found Guilty in Manhattan Federal Court on All Counts Relating to False Tax Returns and Aggravated Identity TheftRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Toni Weirauch, the Special Agent-in-Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), announced that MAHAMADOU DAFFE, a tax preparer, was found guilty Friday, January 10, 2014, by a jury in Manhattan federal court of conspiracy to steal government funds, theft of government funds, conspiracy to file false claims, wire fraud, and aggravated identity theft in connection with the preparation and filing of nearly 1,000 false tax returns submitted online using stolen identities. DAFFE was also convicted of conspiracy to steal government funds, theft of government funds, and conspiracy to file false claims in connection with his use of stolen children’s identities to claim false dependents on his clients’ income tax returns. The investigation that led to DAFFE’s arrest and his conviction last week was undertaken by the Criminal Investigation Unit of the Internal Revenue Service (“IRS”), which lost more than $1.5 million as a result of DAFFE’s crimes, during which he attempted to steal more than $4.5 million from the Government. DAFFE was convicted after a one-week trial before U.S. District Judge Naomi Reice Buchwald.
According to the Indictment, as well as evidence presented at DAFFE’s trial:
From 2008 through January 2013, DAFFE engaged in two separate schemes to defraud the IRS. DAFFE filed false tax returns for his tax preparation clients, in which he caused those clients to claim as dependents children who were in fact total strangers to them, and whose identities DAFFE stole. In exchange, DAFFE collected $1,000 per return.
In another scheme, during the same time frame, DAFFE used stolen identities to file hundreds of false tax returns, supported by bogus Forms W-2, through an online tax preparation service intended for use by individual taxpayers. He then funneled the resulting refunds into several bank accounts he controlled—accounts in his own name, the names of co-conspirators, and the names of aliases DAFFE used.
DAFFE, 31, of Queens, New York, was convicted of eight counts relating to theft of government funds, filing false returns, wire fraud, and aggravated identity theft. Each of the counts charging conspiracy to steal government funds carries a maximum penalty of five years in prison and a fine of $250,000, or twice the gross gain or loss from the offense. Each of the counts charging substantive theft of government funds carries a maximum penalty of 10 years in prison and a fine of $250,000, or twice the gross gain or loss from the offense. Each of the false claims conspiracy counts carries a maximum penalty of 10 years in prison and a fine of $250,000, or twice the gross gain or loss from the offense. The conspiracy to commit wire fraud count carries a maximum penalty of 20 years in prison and a fine of $250,000, or twice the gross gain or loss from the offense. The aggravated identity theft count of which DAFFE was convicted carries a mandatory minimum term of imprisonment of two years, to be served consecutively to any other sentence imposed, as well as a maximum fine of $250,000, or twice the gross gain or loss from the offense. DAFFE is scheduled to be sentenced by Judge Buchwald on April 24, 2014, at 3:00 p.m.
DAFFE’s co-conspirator, Mohamed Sangare, previously pled guilty to similar counts and is awaiting sentencing.
Mr. Bharara praised the investigative work of the IRS-CI and thanked the IRS. He noted that the investigation is continuing.
This case is being handled by the Office’s General Crimes Section. Assistant U.S. Attorneys Carolina A. Fornos and Sarah E. McCallum are in charge of the prosecution.
U.S. v. Mahamadou Daffee Indictment S1
Stockton Man Sentenced for Escaping from Mendota Federal Correctional InstitutionRead the Press Release
FRESNO, Calif. – Michael Paul Thompson, 32, of Stockton, was sentenced today by U.S. District Judge Lawrence J. O’Neill to 13 months in prison for escaping from the custody of a federal correctional institution, United States Attorney Benjamin B. Wagner announced.
According to court documents, Thompson escaped from Federal Correctional Institution–Mendota, on October 12, 2011. He had been serving a 10-year sentence following his conviction in June 2010 for conspiring to distribute and possess with intent to distribute methamphetamine.
Thompson was apprehended in Stockton on March 29, 2013, after leading police officers on a 20-minute high-speed chase reaching speeds of 100 mph in moderate-to-heavy traffic. The reckless endangerment during this flight required police officers to undertake physical intervention, resulting in major damage to one police vehicle.
This case was the product of an investigation by the U.S. Marshals Service and the Stockton Police Department. Assistant U.S. Attorney Christopher Baker prosecuted the case.
Steven James Lucy Sentenced for Crack Cocaine DistributionRead the Press Release
MOBILE, AL-- United States Attorney Kenyen R. Brown announces that Steven James Lucy was sentenced on Friday by United States District Court Judge William H. Steele to forty- six months imprisonment for possession with the intent to distribute crack cocaine in violation of Title 21 USC ' 841(a)(1). The defendant plead guilty to this offense in May 2013. Lucy was also ordered to serve three years of supervised release with the United States Probation Office after he completes his term of imprisonment at the Federal Bureau of Prisons. Lucy was also ordered to pay a $100 special assessment which goes into a fund for victims of crime.
United States Attorney Brown stated that the case was investigated by the Alabama Alcoholic Beverage Control Bureau, Enforcement Division. Brown added that his office would continue to aggressively prosecute offenders who distribute illegal drugs and thereby endanger the community.
Steubenville Man Convicted on Cocaine Trafficking ChargeRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Chris Zumpetta-Parr, Public Affairs SpecialistDefendant faces up to Thirty Years in Prison
WHEELING, WEST VIRGINIA - A 42-year old Ohio man was convicted last week by a federal jury for conspiracy to distribute cocaine in the Northern District of West Virginia and in Jefferson County, Ohio.
United States Attorney William J. Ihlenfeld, II, announced that MICHAEL T. MCGEE, of Steubenville, was convicted of the felony offense of “Conspiracy to Possess with Intent to Distribute and to Distribute Cocaine” after a three-day jury trial before Judge Frederick P. Stamp, Jr. MCGEE, who has prior convictions for armed robbery and cocaine and marijuana trafficking, was found to have conspired with co-defendant Ronald Snider and others, to distribute cocaine, from November of 2012 to June of 2013.
MCGEE, who is in custody pending sentencing, faces up to 30 years imprisonment and a $2,000,000 fine.
The case was prosecuted by Assistant United States Attorney Robert H. McWilliams, Jr. and investigated by the Drug Enforcement Administration and the Steubenville Police Department.
Statement of U.S. Attorney Goodwin on Investigation into Chemical Release into Water SupplyRead the Press Release
CHARLESTON, W.Va. – United States Attorney Booth Goodwin today issued the following statement regarding his office’s investigation into the release of a potentially dangerous chemical into the southern West Virginia water supply:
“As the immediate water crisis begins to ease and West Virginians regain access to drinkable water, I want to make three things clear. One, my office will continue working as quickly as possible to find out exactly what happened here, including the complete timeline of the release and what was done---or not done---before and after it. Two, if our investigation reveals that federal criminal laws were violated, we will move rapidly to hold the wrongdoers accountable. And three, companies whose facilities could affect the public water supply should be on notice: if you break federal environmental laws, you will be prosecuted. Our drinking water is not something you can take chances with, and this mess can never be allowed to happen again.”
Click here to listen to an audio sound bite from U.S. Attorney Booth Goodwin
Statement of Manhattan U.S. Attorney Preet BhararaOn the Conviction of State Assemblyman Eric StevensonRead the Press Release
“As a unanimous jury swiftly found, Assemblyman Stevenson brazenly betrayed the public that elected him. Graft and greed are intolerable in Albany, and we will go to trial as often as we have to until government in New York is cleaned up.”
St. Francis Woman Charged with Assaulting A Federal OfficerRead the Press Release
United States Attorney Brendan V. Johnson announced that a St. Francis, South Dakota, woman has been indicted by a federal grand jury for Assaulting a Federal Officer.
Amanda Broken Leg, age 20, was indicted on November 14, 2013. She appeared before U.S. Magistrate Judge Mark A. Moreno on January 8, 2014, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 20 years in custody and/or a $250,000 fine, 3 years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The charges relate to incidents that occurred on October 18, 2013, when Broken Leg assaulted a law enforcement officer with a dangerous weapon, that is, a motor vehicle. Broken Leg also assaulted and resisted law enforcement officers when they tried to restrain her.
The charge is merely an accusation and Broken Leg is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Rosebud Sioux Tribe Law Enforcement Services. Assistant U.S. Attorney Marie H. Ruettgers is prosecuting the case.
Broken Leg was released on bond pending trial. A trial date has not been set.
Southern Maryland Drug Dealer Sentenced to over 10 Years in PrisonRead the Press Release
Greenbelt, Maryland – Chief U.S. District Judge Deborah K. Chasanow sentenced Travis Tittus Moore, a/k/a “Short Man,” age 31, of Harwood, Maryland, today to 125 months in prison followed by four years of supervised release for possession with intent to distribute crack and powder cocaine, phencyclidine (PCP), and marijuana. Chief Judge Chasanow also ordered that Moore forfeit the $12,192 seized during the investigation.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Karl C. Colder of the Drug Enforcement Administration - Washington Field Division; Calvert County Sheriff Mike Evans; and Anne Arundel County Police Chief Kevin Davis.
According to Moore’s plea agreement, on January 19, 2012, agents overheard a co-conspirator arrange for Moore to meet the co-conspirator on Solomons Island Road in Sunderland, Maryland. Officers saw Moore pull up in his car next to the co-conspirator’s vehicle and followed Moore as he left. As the officers followed Moore they saw him swerve and hit the center line and the officers attempted to perform a traffic stop, but Moore sped off, eventually crashing into a telephone pole. Moore climbed out of the passenger side window carrying a bag and tried to hide under the car. Moore was arrested and officers recovered $2,192 in cash from Moore and $10,000 in cash, 32.1 grams of crack cocaine, .71 grams of PCP, 62.3 grams of powder cocaine, 12.6 grams of marijuana, and a scale with cocaine residue from the bag Moore was carrying.United States Attorney Rod J. Rosenstein praised the DEA, Calvert County Sheriff’s Office and Anne Arundel County Police Department for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Arun G. Rao and Steven E. Swaney, who prosecuted this Organized Crime Drug Enforcement Task Force case.
Southern Indiana Man Listed on the National Registry of Sex Offenders Sentenced to 10 Years in Prison for Possession of Child PornographyRead the Press Release
LOUISVILLE, Ky. – A Georgetown, Indiana man listed on the National Registry of Sex Offenders was sentenced in United States District Court on January 9, 2014, by U.S. District Judge John G. Heyburn II, to 10 years in prison followed by a lifetime of supervised release, for possession of child pornography announced David J. Hale, U.S. Attorney for the Western District of Kentucky.
James W. Dotts, Jr., 38, was subject to supervised release from the Southern District of Indiana, which began on February 13, 2012, as a result of a conviction for possession of child pornography. On February 12, 2013, Dotts admitted to downloading over 500 computer image files and approximately 12 movie files depicting child pornography onto a computer at his employer's facility located in Louisville, Kentucky. He admitted to defeating his employer's security software, downloading the images from the Internet, saving the images to the computer, and transferring the images to a USB thumb drive that he carried back and forth from home to his job site. Dotts admitted that he began downloading adult pornography in June 2012, then began downloading child pornography in January 2013.
A search of Dotts' locker at his place of employment resulted in the discovery of four high-capacity thumb drives. Dotts admitted that the thumb drives contained images of non-nude children, which he had downloaded from the Internet. The USB drives and the computers used to download the child pornography were seized by the FBI for forensic analysis. The forensic analysis revealed 5 images of child pornography located on one of the computers and approximately 270 images of child erotica. At the time those files were downloaded, Dotts was the only employee with access to the computers.
This case was prosecuted by Assistant United States Attorney A. Spencer McKiness and was investigated by the Federal Bureau of Investigation (FBI).
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Social Worker Pleads Guilty to Identity Theft, Tax CrimesRead the Press Release
Rakecia Matrese Brame, formerly of Greensboro, N.C., and now of Grand Prairie, Texas, pleaded guilty on Jan. 10, 2014, to identity theft, tax, and fraud charges, the Department of Justice and the Internal Revenue Service (IRS) announced today. Brame pleaded guilty to one count of wire fraud, one count of aggravated identity theft and one count of aiding and assisting the preparation of a false tax return. U.S. District Judge Thomas Schroeder for the Middle District of North Carolina set a sentencing hearing for May 16, 2014.
According to court documents, from approximately February 2009 to February 2011, Brame was employed as a social worker at the Alamance County Department of Social Services (Alamance DSS) in North Carolina. Brame was responsible for investigating claims of abuse and neglect against minors and disabled adults. As part of her official duties, Brame had authorized access to extensive identifying information – including names, dates of birth and Social Security numbers - of Alamance DSS clients, including abuse victims and recipients of various state benefits, and of witnesses in official investigations.
According to court documents, Brame used her access to identifying information contained in Alamance DSS records to illegally obtain the personal identifying information of Alamance DSS clients and others. Pursuant to an ongoing agreement, Brame sold that personal identifying information to Jennifer Bullock and Saichelle McNeill, two return preparers at the Greensboro branch of Nothing But Taxes, a tax return preparation firm. Bullock and McNeill used the stolen identities to claim false dependents on tax returns they prepared for Nothing But Taxes clients, thereby claiming inflated tax refunds on the clients’ behalf. Bullock and McNeill paid Brame $200 to $300 per identity they purchased, and Brame knowingly sold these identities to Bullock and McNeill to be used for tax fraud.
Court documents state that, as a social worker, Brame owed a legal and professional duty to keep the information she learned about victims and witnesses confidential. She had no authority to sell such information or otherwise use it for personal gain, and doing so violated the professional standards applicable to social workers, as well as federal and state law and Alamance DSS policy.
According to court documents, one victim of the identity theft scheme was referred to Alamance DSS for investigation on or about Feb. 15, 2010, and assigned to Brame. A few days later, Brame sold this victim’s identity to Bullock for use as a false dependent on a tax return. On or about March 3, 2010, Bullock prepared a 2009 tax return for a Nothing But Taxes client which falsely claimed that the victim was a dependent. As a result of the falsification, the tax return claimed a higher tax refund than the Nothing But Taxes client was actually entitled to receive. Approximately one year later, Brame sold the victim’s identity and that of her sister to McNeill, who then prepared 2010 tax returns for two different Nothing But Taxes clients that falsely claimed both victims as dependents.
Brame faces a statutory maximum of 20 years in prison on the wire fraud charge and a maximum of three years in prison for the charge of aiding and assisting in the preparation of a false tax return. The aggravated identity theft charge carries a mandatory two year sentence, which must run consecutively to any sentence on the other charges.
The related case against McNeill resulted in a guilty plea to federal criminal charges of wire fraud, aggravated identity theft and aiding and assisting in the preparation of false tax returns. McNeill was sentenced to serve 27 months in federal prison on Aug. 20, 2013. Brame’s co-defendant Bullock pleaded guilty to wire fraud, aggravated identity theft and tax charges on Dec. 4, 2013, and she is currently awaiting sentencing.
This case and related Nothing But Taxes cases were investigated by agents of the IRS -Criminal Investigation and were prosecuted by Assistant U.S. Attorney Frank Chut and Trial Attorney Jonathan Marx of the Tax Division. The prosecution team wishes to thank the Alamance DSS for their assistance and cooperation in the investigation.
Social Worker Pleads Guilty to Identity Theft, Tax CrimesRead the Press Release
WASHINGTON – Rakecia Matrese Brame, formerly of Greensboro, N.C., and now of Grand Prairie, Texas, pleaded guilty on Jan. 10, 2014, to identity theft, tax, and fraud charges, the Department of Justice and the Internal Revenue Service (IRS) announced today. Brame pleaded guilty to one count of wire fraud, one count of aggravated identity theft and one count of aiding and assisting the preparation of a false tax return. U.S. District Judge Thomas Schroeder for the Middle District of North Carolina set a sentencing hearing for May 16, 2014.
According to court documents, from approximately February 2009 to February 2011, Brame was employed as a social worker at the Alamance County Department of Social Services (Alamance DSS) in North Carolina. Brame was responsible for investigating claims of abuse and neglect against minors and disabled adults. As part of her official duties, Brame had authorized access to extensive identifying information – including names, dates of birth and Social Security numbers - of Alamance DSS clients, including abuse victims and recipients of various state benefits, and of witnesses in official investigations.
According to court documents, Brame used her access to identifying information contained in Alamance DSS records to illegally obtain the personal identifying information of Alamance DSS clients and others. Pursuant to an ongoing agreement, Brame sold that personal identifying information to Jennifer Bullock and Saichelle McNeill, two return preparers at the Greensboro branch of Nothing But Taxes, a tax return preparation firm. Bullock and McNeill used the stolen identities to claim false dependents on tax returns they prepared for Nothing But Taxes clients, thereby claiming inflated tax refunds on the clients’ behalf. Bullock and McNeill paid Brame $200 to $300 per identity they purchased, and Brame knowingly sold these identities to Bullock and McNeill to be used for tax fraud.
Court documents state that, as a social worker, Brame owed a legal and professional duty to keep the information she learned about victims and witnesses confidential. She had no authority to sell such information or otherwise use it for personal gain, and doing so violated the professional standards applicable to social workers, as well as federal and state law and Alamance DSS policy.
According to court documents, one victim of the identity theft scheme was referred to Alamance DSS for investigation on or about Feb. 15, 2010, and assigned to Brame. A few days later, Brame sold this victim’s identity to Bullock for use as a false dependent on a tax return. On or about March 3, 2010, Bullock prepared a 2009 tax return for a Nothing But Taxes client which falsely claimed that the victim was a dependent. As a result of the falsification, the tax return claimed a higher tax refund than the Nothing But Taxes client was actually entitled to receive. Approximately one year later, Brame sold the victim’s identity and that of her sister to McNeill, who then prepared 2010 tax returns for two different Nothing But Taxes clients that falsely claimed both victims as dependents.
Brame faces a statutory maximum of 20 years in prison on the wire fraud charge and a maximum of three years in prison for the charge of aiding and assisting in the preparation of a false tax return. The aggravated identity theft charge carries a mandatory two year sentence, which must run consecutively to any sentence on the other charges.
The related case against McNeill resulted in a guilty plea to federal criminal charges of wire fraud, aggravated identity theft and aiding and assisting in the preparation of false tax returns. McNeill was sentenced to serve 27 months in federal prison on Aug. 20, 2013. Brame’s co-defendant Bullock pleaded guilty to wire fraud, aggravated identity theft and tax charges on Dec. 4, 2013, and she is currently awaiting sentencing.
This case and related Nothing But Taxes cases were investigated by agents of the IRS -Criminal Investigation and were prosecuted by Assistant U.S. Attorney Frank Chut and Trial Attorney Jonathan Marx of the Tax Division. The prosecution team wishes to thank the Alamance DSS for their assistance and cooperation in the investigation.
Sentences and Plea Agreements in Child Exploitation CasesRead the Press Release
FRESNO, Calif. — Today, two defendants were sentenced, three defendants pleaded guilty, and a defendant is back in custody after breaking the terms of his supervised release, United States Attorney Benjamin B. Wagner announced.
“While there is no way to undo the despicable crimes committed against these innocent and vulnerable children, it is a relief that the defendants found guilty of these crimes will no longer be in a position to carry out their criminal acts,” said Mike Prado, resident agent in charge of HSI Fresno “HSI will continue to work tirelessly with its federal and local law enforcement partners to seek justice for the young victims in these cases, who will bear the emotional and physical scars of these crimes for the rest of their lives.”
Except as noted, all cases are being prosecuted by Assistant United States Attorney David Gappa.
Twenty Years in Prison for Idaho Man (1:13-cr-045 LJO)
Allen Trent Carter, 53, of McCammon, Idaho, was sentenced today by United States District Judge Lawrence J. O’Neill to 20 years in prison to be followed by a lifetime term of supervised release.
According to court documents, Carter was identified during the course of an investigation of his son, Bradley Vaine, 27, of Fresno, who is being prosecuted for trafficking in child pornography. According to a criminal complaint, Vaine and Carter exchanged many images of child pornography and engaged in many chat sessions on Facebook in which they discussed the sexual abuse of children. A federal search warrant was executed at Carter’s residence in Idaho, and he admitted he had exchanged images of child pornography with Vaine in August and October 2012. Carter has been detained in federal custody, as a flight risk and danger to the community, since his arrest in Idaho on January 8, 2013. The charges against Vaine are pending. He is presumed innocent until and unless proven guilty beyond a reasonable doubt.
This case was the result of an investigation by the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) offices in Fresno and Idaho Falls, Idaho with assistance from the Idaho State Police and the Bannock County Sheriff’s Office.
Air Force Employee Sentenced to 13 Years in Prison (1:13-cr-145 AWI)
Ronald Townsend, 30, of Rosamond was sentenced to 13 years in prison for receipt and distribution of child pornography. He will also be required to serve a lifetime term of supervised release upon his release from prison during which he will be required to register as a sex offender and his access to the Internet, computers, and minors will be restricted. According to court documents, Townsend came to law enforcement’s attention when he chatted online with an undercover detective on January 30, 2013. At that time he sent about 40 images of child pornography in order to obtain videos from the undercover detective. Townsend also developed relationships online and on the phone with under-aged girls, one 13 and one 16 years old. As part of the plea agreement, he provided the court today with $7,500 that was ordered as restitution.
This case is the product of an investigation by the Air Force Office of Special Investigations.
Bakersfield Cases: Two Plead Guilty and One Admits to Supervised Release Violations
John Brian Noblia, 33, of Bakersfield, pleaded guilty to one count of receipt and distribution of a visual depiction of a minor engaged in explicit conduct. His sentencing is set for March 31, 2014. He faces a sentence of five to 20 years in prison. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. This case is the product of an investigation by HSI. Assistant United States Attorney Megan Richards is prosecuting the case. (1:13-cr-143 LJO)
Fernando David Rangel, 20, of Bakersfield, pleaded guilty today to receiving images of child pornography. He admitted in a plea agreement that he used the Internet and a computer to receive between 300-600 images of child pornography, including images that depicted prepubescent minors and images of violence or sadistic conduct. His sentencing is scheduled for March 31, 2014. He faces a sentence of five to 20 years in prison. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. This case is the product of an investigation by the FBI. (1:13-cr-280 LJO).
Christopher Kent Bowersox, 42, of Bakersfield, today admitted to two violations of his supervised release conditions in a proceeding before U.S. Magistrate Judge Gary S. Austin. Bowersox had been released from prison, after serving a sentence for possession of child pornography and had served five months of a 10-year term of supervised release. He admitted today that he had accessed the Internet and viewed adult pornography in violation of conditions of his supervised release. Bowersox has been in custody since December 26, 2013. He will be sentenced on February 24, 2014, and he faces a potential term of two years in prison. The actual sentence imposed, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines. (1:10-cr-082 AWI).
Modesto Man Pleads Guilty to Receipt and Distribution of Child Pornography (1:12-cr-384 AWI)
Ted Lee Duran, 49, of Modesto, pleaded guilty today to receipt and distribution of child pornography. According to court documents, a relative of Duran went to Modesto Police and reported finding child pornography on a phone that Duran had borrowed. Further investigation revealed that Duran had received more than 600 images of minors being sexually abused, some of which depicted violence or were of sadistic conduct.
Duran is scheduled to be sentenced on March 24, 2014, at 10:00 am. He faces a potential sentence of five to 20 years in prison. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. This case is the product of an investigation by the FBI and the Modesto Police Department.
These cases were brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. Click on the “resources” tab for information about Internet safety education.
San Fernando Valley Woman Pleads Guilty to Federal Charges in $25 Million Health Care Fraud CaseRead the Press Release
LOS ANGELES -- A North Hollywood woman who worked in the health care industry pleaded guilty today to federal charges for orchestrating a scheme that submitted nearly $25 million in fraudulent bills to Medicare for services and supplies, including power wheelchairs and diagnostic tests that were medically unnecessary and sometimes were never provided.
Susanna Artsruni, 46, who formerly owned a durable medical equipment (DME) company and worked at a number of medical clinics in Los Angeles, pleaded guilty this afternoon before United States District Judge Margaret M. Morrow. Artsruni, who often used the names “Mary” and “Rose,” pleaded guilty to one count of health care fraud and one count of money laundering.
In a plea agreement filed last year in United States District Court, Artsruni admitted that she defrauded Medicare in a number of ways. In one part of the scheme, Artsruni had physician’s assistants at three Los Angeles medical clinics sign prescriptions and orders for medically unnecessary DME and diagnostic tests that were later referred to other Medicare providers that billed for the equipment and tests. Artsruni also caused the three clinics to bill Medicare for medically unnecessary services. Further, Artsruni fraudulently billed Medicare on behalf of her own DME supply company, Midvalley Medical Supply in Van Nuys, for medically unnecessary DME based on referrals from one of the three medical clinics.
In total, Artsruni caused more than $24.8 million in fraudulent claims to be submitted to Medicare, which paid more than $9.2 million on the bogus bills.
Artsruni also admitted that she wrote checks totaling more than $35,000 from the Midvalley bank account to three corporations that had no connection to the medical industry and apparently had not provided any legitimate business services to Midvalley. Artrsuni admitted that she wrote these checks to conceal the nature of the funds as the proceeds of health care fraud and used the three corporations to launder these funds.
At the time that she worked at two of the clinics and wrote one of the checks to launder the proceeds of her fraud, Artsruni was free on bond in another health care fraud case (United States v. Artsruni, CR08-209-CAS). Although the terms of her pre-trial release in the 2008 case dictated that she not commit crimes and forbid her from working at medical facilities, Artsruni concealed her activities from her Pre-Trial Services Officer and engaged in the fraudulent conduct that led to most of the losses suffered by Medicare in the second case.
As a result of today's guilty pleas, Artsruni faces a statutory maximum sentence of 30 years in federal prison. Judge Morrow is scheduled to sentence Artsruni on April 14.
A second defendant in the case, Erasmus Kotey, a physician's assistant who worked with Artsruni in a medical clinic on North Vermont Avenue in Los Angeles, is scheduled to go on trial before Judge Morrow on April 8.
The case against Artsruni and Kotey is the product of an investigation by the Federal Bureau of Investigation; the U.S. Department of Health and Human Services, Office of Inspector General; and IRS - Criminal Investigation.
Release No. 14-002
Richland Man Sentenced to Five Years in Federal Prison for Receipt of Child PornographyRead the Press Release
Spokane - Michael C. Ormsby, United States Attorney for the Eastern District of Washington, announced that Sky Steven Bennett, age 34, of Richland, Washington, was sentenced on January 13, 2014, after having previously pleaded guilty on October 22, 2013 to Receipt of Child Pornography. United States District Court Judge Wm. Fremming Nielsen sentenced Bennett to a five-year term of imprisonment, to be followed by a twenty-year term of court supervision after he is released from Federal prison. In addition, Bennett was ordered to forfeit to the United States the computer equipment and digital media used to receive and store his child pornography collection.
According to information disclosed during the court proceedings, in August of 2012, the Columbia Energy and Environmental Services (CEES) Human Resource Department conducted an internal investigation of Bennett related to child pornography. The CEES referred their investigation to the Richland Police Department. The Richland Police Department, in partnership with the Federal Bureau of Investigation, conducted further investigation of Bennett and, on August 22, 2012, a search warrant was executed at Bennett's residence. Law enforcement discovered an extensive collection of child pornography at Bennett's residence. A forensic examiner determined that Bennett began receiving child pornography in 2000 and continued to do so until his residence was searched in August of 2012.
Michael C. Ormsby stated, "I commend the collaborative work of the Richland Police Department and Federal Bureau of Investigation in this case. The United States Attorney's Office in the Eastern District of Washington is, and will continue to be, committed to prosecuting aggressively and seeking appropriate punishment for child pornography crimes. Prosecuting offenders who are collecting child pornography is a priority of the United States Attorney's Office."
This case was pursued as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the United States Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. The Project Safe Childhood Initiative ("PSC") has five major components:
- Integrated federal, state, and local efforts to investigate and prosecute child exploitation cases, and to identify and rescue child victims;
- Participation of PSC partners in coordinated national initiatives;
- Increased federal enforcement in child pornography and enticement cases;
- Training of federal, state, and local law enforcement agents; and
- Community awareness and educational programs.
For more information about Project Safe Childhood, please visit www.usdoj.gov/psc . For information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources".
This investigation was conducted the Federal Bureau of Investigation and Richland Police Department. The case was prosecuted by Stephanie J. Lister, an Assistant United States Attorney and PSC Coordinator for the Eastern District of Washington.
CR-13-06062-WFN
Portland Man Sentenced in Armed Bank RobberiesRead the Press Release
Armed Bank Robber Sentenced to 22 ½ Years in Federal PrisonPORTLAND, Ore. – Daniel Arthur Carter, who engaged in several takeover-style armed robberies in late 2012, was sentenced today by United States District Judge Marco A. Hernandez to serve 270 months in federal prison. He was sentenced for armed robberies of a U.S. Bank branch on November 21, 2012, and a Chase Bank branch on October 22, 2012, and for using a firearm in those robberies. Carter, 32, most recently resided in Portland, Oregon before his arrest in this case.
In pleading guilty, Carter admitted that on October 22, 2012, he entered a Chase Bank branch located in Tigard, Oregon wearing a mask and a hooded sweatshirt, and wielding a semiautomatic handgun. As he entered the bank he yelled demands to customers and employees, telling them to get down and to not activate any alarms. At gun point, he demanded that the tellers stuff his backpack with money. He then stole a car from one of the customers which he used to get away with $17,401 stolen in the robbery.
He also admitted that on November 21, 2012, he entered a U.S. Bank branch in SW Portland, Oregon wearing a mask and a hooded sweatshirt and wielding a semiautomatic handgun. As he entered the bank he yelled demands to customers and employees, telling them to get down and to not activate any alarms. At gun point, he demanded that the tellers stuff his backpack with money. He then unsuccessfully attempted to steal cars from customers before running away with $11,800 stolen in the robbery. He was apprehended by Portland Police Bureau officers as he was running from the bank.
Carter was sentenced to serve 186 months in federal prison for the armed bank robberies, consecutive to an additional 84 months for using a firearm during the violent crime. He was ordered to pay complete restitution of $29,401 for the robberies. He was also ordered to forfeit the firearm and ammunition which were used in the robberies, and the $17,401 in unrecovered money from the Chase Bank robbery. Carter’s sentence was enhanced because he stole property from a financial institution, used a firearm, physically restrained people, engaged in carjacking, and stole a considerable amount of money.
Carter also agreed to plead guilty in Multnomah County Circuit Court to armed robberies of the following Southwest Portland businesses:
- 45th Street Pub and Grill on July 10, 2012 during which $4,557 was stolen;
- Hillsdale Liquor Store on July 26, 2012 during which $3,821.05 was stolen.;
- Old Market Pub on August 19, 2012 during which ,$2,500 was stolen; and,
- Comfort Suites on July 31, 2012, during which $287.00 was stolen.
Upon release from custody, Carter will serve a five year period of supervised release. During his supervised release he must abide by a number of conditions which include mental health counseling, education and employment.
The case was investigated by the Portland Police Bureau. The case was prosecuted by Assistant U. S. Attorney Sean B. Hoar.
Pleasanton Woman Sentenced to 27 Months in Prison for Filing False Claim with the IRSRead the Press Release
OAKLAND – Denise LaShawn Reed, also known as Brooke Nicholson, Lauren Roberts, Denise Berry, Savana Jones, and Neyce Roberts, was sentenced yesterday to 27 months for her role in a false tax refund scheme, announced United States Attorney Melinda Haag and Internal Revenue Service-Criminal Investigation Special Agent in Charge José M. Martinez.
Reed pleaded guilty on September 5, 2013. According to the plea agreement, from January 2009 through February 2010, Reed filed 14 false and fraudulent federal income tax returns with the IRS. These claims were all filed as Forms 1040, U.S. Individual Income Tax Returns. The total amount of the false claims was $94,700. The claims listed on the returns were all fictitious, with the exception of the taxpayers’ identity. As part of the scheme, some of the returns reported that the taxpayer earned income as part of a business they operated when Reed knew the taxpayer did not own or operate a business. The 14 false tax returns fraudulently reported a refund was due. Reed admitted to receiving tax refunds for 13 of the false claims.
According to court documents, Reed electronically filed tax returns using others’ identities to defraud the United States into paying money in fraudulent tax refunds. The refunds were deposited into bank accounts or debit cards controlled by Reed. Reed then used the funds to pay personal expenses.
Reed, 45, of Pleasanton, California was charged on December 18, 2012, with 14 counts of filing false claims. She pleaded guilty to one count.
The sentence was handed down by the Honorable Yvonne Rogers Gonzalez, U.S. District Court Judge. In addition to 27 months in prison, Judge Gonzalez sentenced the defendant to a 3-year period of supervised release. In an attempt to obtain a lenient sentence, Reed provided false information to the Court in the form of a forged letter on Stanford Hospital letterhead stating that she was being treated for breast cancer, which was not true. As a result, at sentencing Judge Gonzalez found that Reed obstructed justice and increased her sentence accordingly. The defendant is in custody serving her sentence.
Cynthia Stier is the Assistant United States Attorney who is prosecuting the. The prosecution is the result of an investigation by the Internal Revenue Service, Criminal Investigation.