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Thursday 14 November 2013
Two KC Men Indicted for Illegal Firearms Following Fatal CollisionRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that two Kansas City, Mo., men have been indicted by a federal grand jury for illegally possessing firearms following a high-speed car chase that ended with a collision that killed an employee of the Kansas City Police Crime Laboratory.
Larneal D. Davis, 28, and Christopher L. Murray, 25, both of Kansas City, were charged with being felons in possession of firearms in an indictment returned under seal by a federal grand jury in Kansas City, Mo., on Tuesday, Nov. 12, 2013. That indictment was unsealed and made public today upon Murray’s arrest and initial court appearance.
The federal indictment alleges that Davis and Murray, who have each been convicted of a felony, were in possession of a Taurus .40-caliber semi-automatic pistol and a Ruger .380-caliber semi-automatic pistol on July 6, 2013. Davis was arrested on that day following a high-speed car chase that resulted in a fatal collision with another vehicle and is in state custody.
Michael Chou, a crime scene technician at the Kansas City Police Crime Laboratory, was killed when his vehicle was broadsided by a vehicle that was fleeing from Kansas City police officers. Davis was arrested a short distance from the accident scene after a brief pursuit on foot. Officers found the two pistols inside the wrecked vehicle. Murray was arrested today.
Dickinson cautioned that the charge contained in this indictment is simply an accusation, and not evidence of guilt. Evidence supporting the charge must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney D. Michael Green. It was investigated by the Kansas City, Mo., Police Department.Two Head to Prison for Attempted "Ice" DistributionRead the Press Release
McALLEN, Texas – Raymundo Jose Cabrera-Paredes, of Mission, and Estevan Ochoa-Gomez, of Huixtla, Chiapas, Mexico, have been ordered to federal prison for more than 20 years following their involvement in the distribution of crystal methamphetamine from McAllen to Dallas, announced United States Attorney Kenneth Magidson along with along with Javier Peña, special agent in charge of the Drug Enforcement Administration (DEA). Cabrera-Paredes, 47, and Ochoa-Gomez, 44, pleaded guilty in January 2013.
Today, U.S. District Judge Micaela Alvarez, who accepted the guilty pleas, handed Cabrera-Paredes and Ochoa-Gomez respective sentences of 292 and 262 months in federal prison. In handing down the sentence, Judge Alvarez noted their extensive involvement in the narcotics transactions. The court also noted Cabrera-Paredes was involved in two additional narcotics transaction in April and May of 2012 that, respectively, involved crystal methamphetamine and cocaine. Cabrera-Paredes will serve a five-year-term of supervised release. Ochoa-Gomez is expected to face deportation proceedings after he serves his sentence.
On Oct. 16, 2012, Cabrera-Paredes met with an undercover agent and negotiated the transportation of eight kilograms of crystal methamphetamine from McAllen to Dallas. At the time of the meeting, he claimed his associate, Ochoa-Gomez, was wrapping the narcotics for transportation. Two days later, Ochoa-Gomez delivered to the crystal methamphetamine to the undercover agent for delivery to Dallas.
A subsequent analysis of the narcotics revealed the net weight of the crystal methamphetamine was 12.01 kilograms and that the narcotics had purity level of 98.4%. A purity level of greater than 80% qualifies the narcotic as “ice.”
Both will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The investigation was conducted by DEA. Assistant United States Attorney Juan Alanis is prosecuting the case.
Two District Men Plead Guilty to 2011 Murder of Retired Vietnam Veteran in Southeast Washington-Victim, 71, Was Slain in His Apartment After Trying to Protect His Wife-Read the Press Release
WASHINGTON- James Brewer, 27, and Stephen Page, 20, of Washington, D.C., have pled guilty to charges of second-degree murder while armed in the 2011 slaying of a 71-year-old man in Southeast Washington, U.S. Attorney Ronald C. Machen Jr. announced today.
Both men entered the guilty pleas on Nov. 13, 2013, in the Superior Court of the District of Columbia. The Honorable Herbert B. Dixon, Jr. scheduled sentencing for Jan. 10, 2014.
According to a proffer of facts presented during the plea hearing, on June 27, 2011, at about 9:15 p.m., Brewer, Page, Anthony Thomas, and a fourth man walked into an apartment building in the 2300 block of Good Hope Road SE. They entered the front lobby and gathered at the elevator. Then they took the elevator to the seventh floor.
Minutes later, Brewer, Page and Thomas entered the apartment of Solomon Reese, 71, a Vietnam veteran who supplemented his retirement income by selling cigarettes to neighbors in the area. Mr. Reese was known by many neighbors as the “cigarette man.”
While the men were inside, Mr. Reese’s wife, meanwhile, returned to the apartment from the building’s trash room. Upon hearing scuffling, she began to scream. At that point, Brewer pulled her inside the apartment and threw her toward the front room sofa. Then, as she continued to scream, Thomas placed a blanket over her mouth. Mr. Reese, who initially struggled with Page over a pistol that Page was holding, grabbed Thomas. Page warned him to let go. Then, when Mr. Reese reached into his pocket, Page shot him several times.
Brewer, Page and Thomas left the apartment, taking two bags containing cigarettes and travelers’ checks. Mr. Reese was taken to a hospital, where he died from his injuries. He had been shot multiple times, with bullets hitting him in the chest, abdomen and thigh.
Detectives with the Metropolitan Police Department (MPD) obtained surveillance video showing Brewer, Page, Thomas, and the fourth man entering the building and getting onto the elevator. Footage from approximately seven minutes later showed Brewer, Page and Thomas moving quickly out of the stairwell on the basement level, with Brewer carrying two bags.
On July 14, 2011, the U.S. Marshals Service arrested Brewer in Newport News, Va., and transported him to the District of Columbia for presentment on a charge of first-degree murder while armed. While awaiting presentment in the Superior Court of the District of Columbia, Brewer switched armbands with another arrestee and pretended to be that person. He then signed release papers under that arrestee’s name and left the courthouse. Marshals discovered the ruse and searched for Brewer, who surrendered the following day.
Thomas, 25, earlier pled guilty to a charge of voluntary manslaughter while armed and is awaiting sentencing.
In announcing the pleas, U.S. Attorney Machen praised the work of the MPD detectives,
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officers, crime scene technicians, and forensic specialists who worked on the case. He also expressed appreciation for the assistance provided by the U.S. Marshals Service. In addition, he praised those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialist Alesha Matthews Yette; Litigation Technology Specialists Kimberly Smith, Leif Hickling, and Joshua Ellen; Jelahn Stewart, chief of the Victim Witness Assistance Unit, and Victim/Witness staff members Maria Shumar, Marcia Rinker, Michael Hailey, Katina Adams-Washington, M. Laverne Forrest, Tanya Via, and David Foster. Finally, he commended the efforts of Assistant U.S. Attorneys Gary Wheeler, and Scott Sroka, who secured the indictment in the case and handled the prosecution which led to the plea.Tuscaloosa Man Gets 25 Years in Prison for String of Convenience Store RobberiesRead the Press Release
TUSCALOOSA -- A federal judge today sentenced a Tuscaloosa man to 25 years in prison for his part in a string of armed gas station convenience store robberies in December 2011, announced U.S. Attorney Joyce White Vance and FBI Special Agent in Charge Richard D. Schwein Jr.U.S. District Judge L. Scott Coogler sentenced JUWAN HUNTER, 20, in accordance with a binding plea agreement Hunter entered with the government in July. The agreement specified a 25 year prison sentence for Hunter's pleas of guilty to four Tuscaloosa County robberies and to brandishing a firearm during one of those robberies. Brandishing a firearm during a crime of violence carries a minimum sentence of seven years in prison and a maximum sentence of life, and the sentence must be served after completion of any other sentence imposed for the crime.
Hunter pleaded guilty to robbery of the University Chevron on U.S. 11 in Cottondale on Dec. 8, 2011; the Springbrook Chevron on East McFarland Boulevard in Tuscaloosa on Dec. 16, 2011; the Coaling Marathon Oil on U.S. 11 in Coaling on Dec. 18, 2011; and the Big Sandy Food Mart on Alabama 69 in Moundville on Dec. 21, 2011. He pleaded guilty to brandishing a firearm during the Coaling Marathon Oil robbery.
The FBI, Tuscaloosa Sheriff's Office, Tuscaloosa Police Department and the Coaling Police Department investigated the case. Assistant U.S. Attorney Joseph P. Montminy is prosecuting the case.
Touissant SentencingRead the Press Release
BATON ROUGE, LA – Acting United States Attorney J. Walter Green announced that JOSEPH T. TOUSSAINT, age 33, of Baton Rouge, Louisiana, who was convicted of being a felon in possession of a firearm, was sentenced today by Chief Judge Brian A. Jackson.
On January 7, 2012, officers responded to a Baton Rouge apartment complex in reference to an armed robbery. After being positively identified, TOUSSAINT was arrested and a search warrant was obtained for his residence. A search of TOUSSAINT’S residence revealed a loaded 12 gauge shotgun in between mattresses in a bedroom.
At sentencing, Judge Jackson concluded that TOUSSAINT used the shotgun in connection with the robbery. Noting TOUSSAINT’S extensive criminal history, including his prior convictions for burglary, illegal use of a weapon, and unauthorized entry of an inhabited dwelling, Judge Jackson found TOUSSAINT to be an armed career criminal and sentenced him to 180 months in prison and four years of supervised release.
Acting United States Attorney Walt Green stated, “Violent crimes and firearm related offenses are and will remain a top priority of the United States Attorney’s Office. We congratulate our BRAVE partners for their hard work and their dedication to make this a safer community.”
East Baton Rouge Parish District Attorney Hillar C. Moore stated, “The results in this investigation demonstrate the close coordination of our BRAVE partners in identifying, arresting, and prosecuting violent offenders who commit crimes in the 70805 area of Baton Rouge.”
The investigation of TOUSSAINT was conducted by the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) and the East Baton Rouge Parish Sheriff’s Office as part of the Baton Rouge Area Violence Elimination (BRAVE) project. The BRAVE project is designed to reduce or eliminate violent crimes by targeting gang-related violence and criminal offenses occurring in, or associated with, the most violent areas within Baton Rouge. The Baton Rouge Police Department, East Baton Rouge Sheriff’s Office, Louisiana State Probation and Parole, Louisiana State Police, ATF, FBI, DEA, U.S. Marshals, local community partners, researchers from Louisiana State University, the Mayor-President’s Office, the East Baton Rouge Parish District Attorney’s Office, and the United States Attorney’s Office for the Middle District of Louisiana have all joined together to support and coordinate the BRAVE initiative. This case is being prosecuted by Assistant U.S. Attorney Reginald E. Jones.
Texas Honey Broker Sentenced to Three Years in Prison for Avoiding $37.9 Million in Tariffs on Chinese-Origin HoneyRead the Press Release
CHICAGO — A Texas honey broker was sentenced today to three years in federal prison for illegally brokering the sale of hundreds of container loads of Chinese-origin honey, which was misrepresented as originating from India or Malaysia, to avoid anti-dumping duties when it entered the United States. The defendant, JUN YANG, pleaded guilty in March to facilitating illegal honey imports by falsely declaring that the honey originated in countries other than China to avoid $37.9 million in anti-dumping duties.
Yang, 40, of Houston, operated National Honey, Inc., which did business as National Commodities Company in Houston, and brokered the sale of honey between overseas honey suppliers and domestic customers. He was ordered to begin serving his sentence on Jan. 15, 2014, by U.S. District Judge Charles Kocoras, who cited the “inescapable harm” to the U.S. honey industry in imposing the sentence.
Yang has already paid financial penalties totaling $2.89 million to the government, including a maximum fine of $250,000, mandatory restitution of $97,625, and agreed restitution of $2,542,659.
“This is a significant sentence against a perpetrator of one of the largest food fraud schemes uncovered in U.S. history,” said Gary Hartwig, Special Agent-in-Charge of HSI Chicago. “Unbeknownst to Yang, he was dealing with an undercover HSI agent who was one step ahead of his illegal activities. Together with our partners at Customs and Border Protection, we will continue to protect American industries from deceptive import practices, while facilitating the lawful flow of goods across our borders that is so critical to the U.S. economy.”
According to court documents, Yang caused transportation companies to deliver to U.S. honey processors and distributors 778 container loads of honey, which were falsely declared at the time of importation as being from Malaysia or India, knowing that all or some of the honey had actually originated in China. As a result, the honey, which had an aggregate declared value of nearly $23 million when it entered the country, avoided anti-dumping duties and honey assessments totaling more than $37.9 million.
In addition, Yang admitted that he sold purported Vietnamese honey that tested positive for the presence of Chloramphenicol, an antibiotic not allowed in honey or other food products. After learning of the unfavorable test results, Yang obtained new test results that purported to show that the honey was not adulterated, and he instructed the undercover agent to destroy the unfavorable test results. This adulterated honey was seized by the government.
The sentence was announced by Mr. Hartwig and Zachary T. Fardon, United States Attorney for the Northern District of Illinois.
Yang was among a group of individuals and companies who were charged in February of this year in the second phase of an investigation led by agents of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI). See:
Two Companies and Five Individuals Charged With Roles in Illegal Honey Imports; Avoided $180 Million in AntiDumping DutiesIn December 2001, the Commerce Department determined that Chinese-origin honey was being sold in the United States at less than fair market value, and imposed anti-dumping duties. The duties were as high as 221 percent of the declared value, and later were assessed against the entered net weight, currently at $2.63 per net kilogram, in addition to a “honey assessment fee” of one cent per pound of all honey. In October 2002, the Food and Drug Administration issued an import alert for honey containing the antibiotic Chloramphenicol, a broad spectrum antibiotic that is used to treat serious infections in humans, but which is not approved for use in honey. Honey containing certain antibiotics is deemed “adulterated” within the meaning of federal food and drug safety laws.
In 2008, federal authorities began investigating allegations involving circumventing antidumping duties through illegal imports, including transshipment and mislabeling, on the “supply side” of the honey industry. The second phase of the investigation involved the illegal buying, processing, and trading of honey that illegally entered the U.S. on the “demand side” of the industry.
The government is being represented by Assistant U.S. Attorney Andrew S. Boutros.
Suffolk Man Sentenced to Life in Prison for Role in the Murder of A Federal WitnessRead the Press Release
NORFOLK, Va. – Leroy Scott, 50, of Suffolk, Va., was sentenced today to life in prison for conspiracy, witness tampering, retaliation against a federal witness and the use of a firearm resulting in the murder of a federal witness.
Dana J. Boente, Acting United States Attorney for the Eastern District of Virginia, and Special in Charge, Karl C. Colder of the Drug Enforcement Administration’s Washington Division Office, made the announcement after sentencing by United States District Judge Mark Davis.
Scott pleaded guilty to the charges on August 16, 2013. According to court documents, Scott was a very high level cocaine dealer who conspired to prevent Junior Bivins, Jr. and other individuals, from testifying in a court proceeding that related to his and his associates’ drug distribution activities, their weapons violations and other criminal offenses. Scott also sought retaliation by hiring men to kill Bivins and two others in Hopewell and Petersburg for providing information to law enforcement officers, which resulted in the first degree murder of Bivins in November of 2001 in Suffolk, Virginia.
This case was investigated by the Drug Enforcement Administration and the Suffolk Police Department and is part of an Organized Crime and Drug Enforcement Task Force (OCDETF) investigation “Dealer’s Choice.” Assistant United States Attorney Laura Everhart prosecuted the case on behalf of the United States.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.Statement of the U.S. Attorney’s Office Concerning Federal Search Warrants Executed TodayRead the Press Release
Memphis, TN – Earlier today, federal search warrants were executed upon a number of establishments in Shelby County and North Mississippi. These warrants were filed under seal and are part of an ongoing investigation. Therefore, we have no further comment on this matter at this time.
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Law enforcement agencies involved in the execution of these search warrants include the Memphis Police Department Organized Crime Unit, the United States Secret Service, the United States Marshals Service, the United States Department of Agriculture, and the Tennessee Department of Human Services.Somali Pirates Sentenced to Multiple Life Sentences in Murder of Four Americans Aboard SV QUESTRead the Press Release
NORFOLK, Va. – Somali nationals Ahmed Muse Salad, a/k/a “Afmagalo,” 27, Abukar Osman Beyle, 33, and Shani Nurani Shiekh Abrar, 31, who were previously found guilty of piracy, murder within the special maritime and territorial jurisdiction of the United States, violence against maritime navigation, conspiracy to commit violence against maritime navigation resulting in death, kidnapping resulting in death, conspiracy to commit kidnapping, hostage taking resulting in death, conspiracy to commit hostage taking resulting in death and multiple firearms offenses, were sentenced this week. Salad, Beyle and Abrar were all sentenced to 21 life sentences, 19 consecutive life sentences and 2 concurrent life sentences, and 30 years consecutive, for their role in the February 22, 2011, murder of four Americans aboard the sailing vessel Quest. The victims included: Scott Underwood Adam, Jean Savage Adam, Phyllis Patricia Macay, and Robert Campbell Riggle.
Dana J. Boente, Acting United States Attorney for the Eastern District of Virginia, George Venizelos, Assistant Director in Charge (ADIC) of the FBI’s New York Field Office; Royce E. Curtin, Special Agent in Charge (SAC) of the FBI’s Norfolk Field Office, and Charles T. May, Special Agent in Charge of the Naval Criminal Investigative Service (NCIS) Norfolk Field Office, made the announcement after sentencing by Chief United States District Court Judge Rebecca Beach Smith.
“These defendants, in violation of U.S. and international law, commandeered an American-flagged sailing vessel, refused to release the hostages to the Navy, and brutally murdered the four Americans on board,” said Acting U.S. Attorney Boente. “The multiple, consecutive life sentences imposed today send a clear message that piracy, hostage-taking, and murder on the high seas will not be tolerated.”
Assistant Director in Charge George Venizelos said, “The sad fact about this case is that four Americans are dead because of the actions taken by the defendants and their associates in the form of modern-day piracy. On a fateful day in February 2011, they boarded the sailing vessel Quest with the goal of using violence to get monetary gains. Today’s life sentences provide a vigorous deterrent to armed bandits roaming our seas. The FBI remains vigilant in our responsibility to bring these pirates to justice.”
Charles T. May, Special Agent in Charge Charles T. May said, "NCIS worked closely with our uniformed partners in the Navy, the FBI, and the United States Attorney's Office of the Eastern District of Virginia in bringing these Somali pirates to justice for their senseless kidnapping and murder of four American citizens. Piracy and other transnational crimes such as narcoterrorism and human trafficking represent global threats to maritime security. NCIS, with our unique mission, is especially well-suited to investigating acts of piracy on the high seas, and we will continue to work with our U.S. and foreign law enforcement partners and prosecutorial entities from the U.S. and foreign nations to eradicate this global menace. "
Salad, Beyle and Abrar, were indicted in a 26-count indictment on July 8, 2011 and were found guilty by a federal jury of all 26 counts on July 8, 2013. According to court records and evidence at trial, Salad, Beyle and Abrar, along with co-conspirators, gained control of the Quest while armed with firearms and a rocket-propelled grenade and took the four Americans hostage on February 18, 2011. Their plan was to take the hostages to Somalia, where they and their additional co-conspirators in Somalia could commence ransom negotiations. While they sailed toward Somalia, they took turns standing armed guard over the hostages; at the same time, United States Navy ships headed towards the Quest to aid the hostages and attempt to secure their safe release.
On February 22, 2011, without provocation and before the hostages could be rescued by members of the military, a co-conspirator fired an RPG in the general direction of the USS Sterett. Witnesses testified that sustained firing came from the Quest and that glass could be seen breaking on the starboard side of the Quest. Witnesses also testified that Salad, Beyle, and Abrar, were the shooters and responsible for the deaths of Scott Adam, Jean Adam, Phyllis Macay, and Robert Riggle. After the gunfire died down, the Navy dispatched SEALS to the Quest. The pirates aboard the Quest began surrendering and some were seen throwing AK-47 rifles into the water.
This case was investigated by the FBI and the Naval Criminal Investigative Service. Assistant United States Attorneys Benjamin L. Hatch, Joseph DePadilla and Brian J. Samuels prosecuted the case on behalf of the United States.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.
Six Defendants Sentenced to Total of 36 Years in Prison in National Prearranged Services CaseRead the Press Release
St. Louis, MO – Six defendants were sentenced today before United States District Judge Jean C. Hamilton for their roles in one of the largest frauds ever prosecuted in the Eastern District of Missouri. The defendants were sentenced on more than 40 counts of fraud, money laundering and related crimes and received a total of 36 years and one month incarceration. At sentencing, Judge Hamilton recognized that these defendants, acting through National Prearranged Services, Inc. and Lincoln Memorial Life Insurance Company, had defrauded more than 97,000 customers in more than 16 states, hundreds of funeral homes, and multiple financial institutions, causing more than $450 million in losses.
Five of the defendants previously pled guilty to various counts of fraud in June and July of this year, and each of those defendants was sentenced to the terms of imprisonment consistent with their respective plea agreements. Of the defendants who pled guilty, JAMES DOUGLAS CASSITY received the longest sentence of 115 months imprisonment after admitting that he organized and led the fraudulent enterprise. The former CEO of Lincoln Memorial Life Insurance Company, RANDALL K. SUTTON received a sentence of 84 months imprisonment. BRENT DOUGLAS CASSITY, a one-time officer of NPS, received a sentence of 60 months imprisonment. HOWARD A. WITTNER, an attorney for the companies, received a sentence of 36 months imprisonment. Former NPS President SHARON NEKIL PROVINCE received a sentence of 18 months imprisonment.
One defendant, DAVID WULF, the statutorily appointed independent investment advisor entrusted to oversee the prearranged funeral trusts established in Missouri, faced trial in August and was convicted by a jury on 18 counts of bank fraud, wire fraud and wire fraud affecting a financial institution. Wulf was sentenced to 10 years in prison.
"Honest and law abiding citizens are fed up with the likes of those who use deceit and fraud to line their pockets with other people’s money," said Sybil Smith, Special Agent in Charge of IRS Criminal Investigation.
"This is the largest corporate fraud case prosecuted in the Eastern District of Missouri," said Dean C. Bryant, Special Agent in Charge of the FBI St. Louis Division. “This case affects us all because part of the life insurance premium we pay goes to cover such loss from fraud.”
These sentences mark the culmination of a multi-year investigation and prosecution that brought together three federal law enforcement agencies, numerous state regulatory agencies and the Department of Justice to unravel a complex and immense fraud that spanned more than 15 years. According to court documents and testimony presented at trial, beginning as early as 1992 and continuing until 2008, NPS sold prearranged funeral contracts in several states, including Missouri, Illinois and Ohio. During that time, insurance companies affiliated with NPS issued life insurance policies related to those prearranged funeral contacts. As part of the contracts, the total price for funeral services and merchandise for an individual was agreed upon, and that price would remain constant regardless of when the funeral services and merchandise would be needed. Customers entering into prearranged funeral contracts would usually pay a single sum of money up front to NPS either directly or through a funeral home that was also a party to the contract. NPS represented to individual customers, funeral homes and state regulators that funds paid by customers under the prearranged funeral contracts would be kept in a secure trust or insurance policy as required under state law.
Court documents disclose, however, that NPS made use of funds paid by customers in ways that were inconsistent both with its prior and continuing representations and with the applicable state laws and regulations. Instead, NPS operated as a fraudulent Ponzi-like scheme, where customer funds were neither kept safe in bank trusts or insurance policies, but instead were utilized for unauthorized purposes and the personal enrichment of NPS’s officers and others. In turn, new business became the source of funding for funerals that prior customers had previously paid for in advance. Victims of the scheme include individual customers, funeral homes and state insurance guarantee associations across the country.
This case was investigated by Internal Revenue Service Criminal Investigation, the Federal Bureau of Investigation and the Postal Inspection Service. Assistant United States Attorneys Steven Muchnick, Charles Birmingham and Richard Finneran prosecuted the case for the U.S. Attorney’s Office.
Sex Offender David James Hart Sentenced in U.S. District CourtRead the Press Release
ALICIA A.G. LIMTIACO, United States Attorney for the Districts of Guam and the Northern Mariana Islands, announced that DAVID JAMES HART, was sentenced November 5, 2013, in the District Court of Guam to 21months incarceration, and five years of supervised release.
Defendant HART pled guilty on December 19, 2012, to one count of Failure to Register as Sex Offender, in violation of Title 18 U.S.C. Section 2250(a). Defendant HART traveled to Guam from Pennsylvania. Upon his arrival on Guam, defendant HART failed to maintain information with the Guam Sex Offender Registry.
U.S. Attorney Limtiaco states “The purpose of the Guam Sex Offender Registry is to provide important notice to island residents that sex offenders are living, working and attending schools in our community. The Sex Offender Registry is a nationwide network that exists to increase public safety and community awareness. Defendants who have committed sexually violent offenses, criminal sex conduct offenses, or criminal offenses involving minor victims must all register and maintain their registrations with the Guam Sex Offender Registry. Defendants who refuse to register or update their information will face federal punishment. The United States Attorney’s Office is committed to the aggressive prosecution of non-compliant sex offenders.” Guam’s Sex Offender Registry can be found online at www.guamcourts.org.”
U.S. Attorney Limtiaco noted that this prosecution is part of the U.S. Department of Justice’s Project Safe Childhood (PSC) Initiative, a nationwide commitment to aggressively prosecute defendants who engage in the sexual victimization of children and adults, possess or receive child pornography, and sex offenders who fail to register with the jurisdiction’s Sex Offender Registry.
The investigation was conducted by the United States Marshals Service. The case was handled by Assistant U.S. Attorney R. San Nicolas.
Sentences for November 12 – 14, 2013Read the Press Release
Illiana Theresa Mercado, 40, of Gilbert, Arizona, was sentenced by Federal District Court Judge Scott W. Skavdahl on November 14, 2013, for conspiracy to possess with intent to distribute, and to distributing methamphetamine and for distributing or possessing methamphetamine on a premises where a child is present. Mercado was arrested in Casper, Wyoming. She received 61 months imprisonment, to be followed by four years of supervised release, and was ordered to pay a $200.00 special assessment. This case was investigated by the Wyoming Division of Criminal Investigation.
John L. Atkins, 51, of Alexander, North Dakota, was sentenced by Chief Federal District Court Judge Nancy D. Freudenthal on November 12, 2013, for passing counterfeit obligations of the United States. Atkins was arrested in Cheyenne, Wyoming. He received 21 months imprisonment, to be followed by 32 months of supervised release, and was ordered to pay a $100.00 special assessment. This case was investigated by the U.S. Secret Service.
Second Defendant Sentenced in Murder of U.S. Border Patrol Agent Robert RosasRead the Press Release
SAN DIEGO – Marcos Rodriguez-Perez was sentenced today to 56 years in prison for his participation in the July 2009 robbery and murder of United States Border Patrol Agent Robert Rosas, Jr.
Rodriguez-Perez, a 28-year-old Mexican national, pleaded guilty in August, admitting he was one of three gunmen who lured the agent into a trap to steal his night-vision goggles and then fatally shot him during a struggle. He pleaded guilty to conspiracy to commit robbery and kidnaping, robbery of personal property of the United States, and use and carrying of a firearm during the commission of a crime of violence.
United States District Judge M. James Lorenz also ordered that Rodriguez’s sentence run consecutive to a two-year sentence Rodriguez is currently serving for violating his supervised release from a prior alien smuggling conviction. Prosecutors noted in court that because Rodriguez is almost 29 years old, the combined sentences likely mean Rodriguez will spend the rest of his life in prison.
Court filings indicate that in July 2009, Rodriguez and four others plotted to rob a Border Patrol agent of his night vision device. On July 23, 2009, the group, bearing firearms, traveled by car and foot to the international border near Campo, California. Rodriguez and two others sneaked into the United States at night and waited for a Border Patrol agent to arrive in the area, while the remaining two members of the group stood watch in Mexico. After Agent Rosas arrived in the area and exited his vehicle, Rodriguez and other conspirators detained Rosas at gunpoint. Agent Rosas resisted and, during the ensuing struggle, Rodriguez and his co-conspirators shot Agent Rosas multiple times, killing him. Rodriguez and his co-conspirators then stole the agent’s firearm, night vision device, and other equipment and fled back to Mexico.
In April 2011, Mexican officials arrested Rodriguez in Tijuana, Baja California, Mexico, at the request of the United States. Rodriguez was extradited to the United States in October 2011.
Rodriguez is the second defendant to be sentenced for Agent Rosas’s murder. In April 2010, Judge Lorenz sentenced Christian Daniel Castro-Alvarez to 40 years of imprisonment. Two other defendants, Jose Luis Ramirez-Dorantes and Emilio Samyn Gonzales-Arenazas, have pleaded guilty to participating in the murder and are scheduled to be sentenced in December 2013 and January 2014 respectively. The last defendant, Jose Juan Chacon-Morales, remains a fugitive, and there is a reward of up to $100,000 for information leading to his arrest or location.
After Rodriguez’s sentencing, United States Attorney Laura E. Duffy expressed her condolences to Agent Rosas’s family and colleagues at the Border Patrol: “Nothing can change what happened to Robert on that horrible night, and we realize that. I hope, however, that seeing these men brought to justice and sent to prison for decades helps his family and friends, in some way, as they cope with his loss and move forward.”
Duffy also praised the agents of the Federal Bureau of Investigation and Homeland Security Investigations who conducted the investigation. “This has been a lengthy and extraordinarily difficult investigation, but it’s a testament to the diligence and resolve of those agents as well as the people of the United States, that four men were arrested in a foreign jurisdiction and are now sitting in U.S. prisons. If a law enforcement officer is harmed, we’ll use every resource we have to catch the perpetrators, and never let it be doubted: We will find them.”
Chief Patrol Agent Paul A. Beeson of the U.S. Border Patrol’s San Diego Sector said, “On behalf of the Border Patrol agents of San Diego Sector and all Border Patrol agents nationwide - I want to express our deepest gratitude for the tenacity, persistence, and hard work expended by the honorable men and women of law enforcement involved in this compelling case resulting in Rodriguez-Perez’ arrest, conviction, and sentencing. This sentencing is tempered with the sobering reality of the senseless loss of a fine man, husband and father who was Border Patrol Agent Robert Rosas.”
FBI Special Agent in Charge, Daphne Hearn, commented, "Today's sentencing sends a message that the FBI is committed to bringing to justice those responsible for the death of U.S. Border Patrol Agent, Robert Rosas. Agent Rosas served his country with dedication, honor and courage and was killed while protecting our nation's borders. The FBI recognizes that no punishment will lessen Agent Rosas' death, but we hope today's sentencing will help bring some closure to the family."
DEFENDANT Criminal Case No. 10CR1793-L Marcos Rodriguez-Perez SUMMARY OF CHARGESCount 1: Title 18, United States Code, Section 371: Conspiracy to commit robbery and kidnaping
INVESTIGATING AGENCIES
Count 2: Title 18, United States Code, Section 2112: Robbery of U.S. property
Count 5: Title 18, United States Code, Section 924(c)(1): Discharging firearms during and in relation to a crime of violenceFederal Bureau of Investigation
Homeland Security Investigations
United States Border PatrolSales Broker Sentenced in Manhattan Federal Court to Two Years in Prison for Fraudulent Mark-Up SchemeRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, today announced that BENJAMIN CHOUCHANE, a former sales broker, was sentenced in Manhattan federal court to two years in prison on charges of conspiracy to commit securities fraud and wire fraud. CHOUCHANE – along with Marek Leszczynski and Henry Condron – defrauded clients out of millions of dollars by misrepresenting the prices at which securities were bought and sold. In doing so, the brokerage firm for which they worked earned illegitimate and illegal trading profits, and CHOUCHANE, Leszczynski, and Condron were awarded lucrative bonuses. CHOUCHANE pled guilty to conspiracy to commit securities fraud and wire fraud in June 2013, and was sentenced today by U.S. District Judge John F. Keenan.
Manhattan U.S. Attorney Preet Bharara said: “Benjamin Chouchane misrepresented the price of trade executions in order to make illegal profits for his firm and to increase his own bonus. With his sentence today, he joins the ranks of disgraced professionals to be punished for abusing the trust of clients.”
According to the Complaint, Indictment, statements made during CHOUCHANE’s guilty plea, and other court documents:
From 2005 through November 2010, CHOUCHANE, Leszczynski, and Condron worked at a broker-dealer that was headquartered in London, England, with offices in major cities in Europe, Asia, and the United States (“Broker-Dealer 1”). Among other services offered, Broker-Dealer 1 bought and sold securities on behalf of institutional clients, such as commercial banks and investment firms located throughout the United States and in various European cities.
Leszczynski and CHOUCHANE worked as sales brokers for Broker-Dealer 1’s Cash Equity Desk in New York, New York. In that capacity, they were responsible for receiving orders to buy or sell securities from Broker-Dealer 1’s clients, relaying those orders to traders who executed the trades, communicating with clients as their orders were being filled, and sending trading confirmations to the clients that showed the prices at which securities were bought or sold – including any commissions that Broker-Dealer 1 charged. Condron worked as an execution trader and a middle office manager. In that capacity, Condron was responsible for executing buy and sell orders at the instructions of sales brokers, such as Leszczynski and CHOUCHANE, and inputting trading data into Broker-Dealer 1’s bookkeeping system.
From 2005 until December 2008, CHOUCHANE, Leszczynski, and Condron misrepresented the execution prices at which securities were bought and sold. For example, when Broker-Dealer 1 received a buy order from a client, the defendants and their co-conspirators caused the purchase price of the security that would be reported back to the client to be “marked up” from its actual purchase price. Conversely, when Broker-Dealer 1 received a sell order from a client, the defendants and their co-conspirators caused the sale price of the security that would be reported back to the client to be “marked down” from its actual sale price. The difference between the actual execution prices and the false prices reported to clients was hidden from Broker-Dealer 1’s clients, enabling Broker-Dealer 1 to earn millions in trading profits to which it was not entitled. As a result of the fraudulent scheme, CHOUCHANE, Leszczynski, and Condron were paid inflated bonuses.
In addition to the prison term, Judge Keenan sentenced CHOUCHANE, 39, of New York, New York, to two years of supervised release. CHOUCHANE was also ordered to forfeit $5 million, to pay a $100 special assessment fee, and to make restitution in an amount to be fixed at a later date.
Leszczynski, 44, of Miami, Florida, who previously pled guilty to one count of conspiracy to commit securities fraud and wire fraud, is scheduled to be sentenced on December 19, 2013, by Judge Keenan. Condron, 34, of New York, New York, who previously pled guilty to one count of securities fraud and two counts of conspiracy to commit securities fraud, is scheduled to be sentenced on January 16, 2014, by U.S. District Judge Naomi Reice Buchwald.
Mr. Bharara praised the investigative work of the Federal Bureau of Investigation. He also thanked the U.S. Securities and Exchange Commission for its assistance.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force, on which U.S. Attorney Bharara serves as a Co-Chair of the Securities and Commodities Fraud Working Group. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.StopFraud.gov.
The case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorney Benjamin Naftalis is in charge of the prosecution.
SF Garage Company Owner Pleads Guilty to Tax FraudRead the Press Release
SAN FRANCISCO – John Clifford Pollard pleaded guilty today to one count of aiding and assisting in the preparation and presentation of a false U.S. Income Tax Return United States Attorney Melinda Haag and Internal Revenue Service, Criminal Investigation Special Agent in Charge José M. Martinez announced.
According to the plea agreement, Pollard, 46, of San Francisco, is the owner and operator of 5 12 Construction, Inc., doing business as SF Garage Company. SF Garage Co. specializes in residential and commercial construction in San Francisco. Pollard admitted that during the 2009 and 2010 tax years he willfully aided and assisted in the preparation and filing of the four quarterly employment tax returns [Forms 941] for the 2009 tax year, reporting wages paid to SF Garage employees. The tax returns were all false because they omitted wages that had been paid to SF Garage employees.
Pollard was charged on November 5, 2013, with one count of assisting in the filing of false tax returns. He pleaded guilty to the one count. Sentencing is scheduled for February 20, 2014, at 1:30 p.m., before The Honorable William H. Orrick, United States District Court Judge, in San Francisco. Pollard’s attorney stated in open court today that Pollard has agreed to pay his civil tax liabilities which exceed $300,000.
The maximum statutory penalty for each count of aiding and assisting in the preparation and presentation of a false U.S. income tax return, in violation of Title 26, U.S.C. § 7206(2), is three years in prison and a fine of $250,000. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Cynthia Stier is the Assistant United States Attorney who is prosecuting the case. The prosecution is the result of an investigation by the Internal Revenue Service, Criminal Investigation.
(Pollard information )
Revere Man Arrested for Conspiring to Produce False IDRead the Press Release
BOSTON - A Revere man was arrested today in connection with a conspiracy to fraudulently issue identification documents.
Leonel Sanchez, 52, was arrested in connection with a scheme to produce false identification documents. From December 2012 through January 2013, it is alleged that Sanchez bribed an employee of the Massachusetts Registry of Motor Vehicles in connection with a scheme to issue Massachusetts driver’s licenses to individuals who presented fraudulently obtained, but valid, Puerto Rican identification documents. This arrest is the most recent development in investigations involving identity theft and public corruption relating to the Massachusetts Registry of Motor Vehicles.
United States Attorney Carmen M. Ortiz; Bruce M. Foucart, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations in Boston; Colonel Timothy P. Alben, Superintendent of the Massachusetts States Police; David W. Hall, Special Agent in Charge of the U.S. Department of State, Bureau of Diplomatic Security, Boston Field Office; and Cheryl Garcia, Acting Special Agent in Charge of the U.S. Department of Labor, Office of Inspector General, New York Regional Office, made the announcement today. The case is being prosecuted by Eugenia M. Carris of Ortiz’s Public Corruption Unit.
The details contained in the complaint are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Renoir Painting, Custom Built Sports Car Seized from Convicted Con Man Sold at Auction for $740,000Read the Press Release
PROVIDENCE, R.I. – A Renoir painting and a custom designed sports car seized from imprisoned Rhode Island con man Rocco DeSimone, 60, have been sold at auction for $740,000, announced United States Attorney Peter F. Neronha and U.S. Marshal Jamie A. Hainsworth. DeSimone was convicted by a federal court jury in Providence in March 2011 of bilking an inventor and numerous investors out of more than six million dollars in cash, property and forgiven debt.
In separate auctions administered by the U.S. Marshals Service, a Renoir canvas artwork entitled "Paysage a Cagnes" seized from DeSimone sold for $551,000; a custom built 2006 Ford GT sports car seized from DeSimone sold for $189,000. The proceeds of the auction will be applied toward court ordered restitution by DeSimone to the victims of his scams.
“It is rare that the victims of remorseless, recidivist con-men like the defendant ever receive restitution of any kind,” said United States Attorney Peter F. Neronha. “I am grateful to Marshal Hainsworth and the Marshal Service for their outstanding efforts to this end. Perhaps during his long years ahead in federal prison, the defendant can reflect on the fact that someone else is driving the fancy car and admiring the expensive painting he once enjoyed while looting the bank accounts of others.”
U.S. Marshal Jamie A. Hainsworth added, “The Marshal Service is entrusted with taking custody of and disposing of property seized by federal law enforcement and ordered forfeited by the court. With each item seized we look for creative ways to obtain the most beneficial return of proceeds. It is particularly gratifying in this instance that the proceeds of the auctions will be returned directly to some of the victims of Mr. DeSimone’s scams and crimes.”
At trial, the government presented evidence that DeSimone convinced numerous investors to invest a total of $6,030,145 in cash, property and forgiven debt by making false representations regarding the sale and/or marketing of three inventions developed by two inventors: the Drink Stik - an invention designed to allow individuals wearing protective gear to drink fluids without having to remove the gear; the Song Tube - designed as an improved version of a gastrointestinal medical tube; and the Disk Shield - a protective shield for compact discs and DVDs. The government’s evidence showed that DeSimone used the money to fund a luxurious work-free lifestyle which included worldly travel, high-end cars, valuable collections of art works and artifacts, falconeering, and other recreational events like jamming with the rock band Aerosmith.
DeSimone, who was convicted of seven counts of mail fraud and one count of money laundering, is currently serving a sentence of 192 months in federal prison. At sentencing, DeSimone was ordered to pay restitution to his victims in the amount of $6,030,145.
The case was prosecuted by Assistant U.S. Attorneys Lee H. Vilker and John P. McAdams. The matter was investigated by the FBI and IRS Criminal Investigation.
To assist the media and the public, a glossary of federal judicial terms and procedures is available at http://www.justice.gov/usao/justice101/
Contact: 401-709-5357
[email protected]Philadelphia Man Charged with Sex Trafficking A MinorRead the Press Release
Jerel Jackson, 28, of Philadelphia, PA was charged today by Indictment with three counts of sex trafficking of a minor or of adults by force, announced United States Attorney Zane David Memeger.
If convicted, the defendant faces a mandatory minimum sentence of fifteen years in prison with a maximum sentence of life on each count, a $750,000 fine, a minimum of five years up to a lifetime period of supervised release, and a $300 special assessment.
The case was investigated by the Federal Bureau of Investigation, with assistance from the Philadelphia Police Department Special Victims Unit, the Tinicum Township Police Department, and the Dover (Delaware) Police Department, and is being prosecuted by Assistant United States Attorney Michelle L. Morgan.
Click here to view the indictment
An Indictment or Information is an accusation. A defendant is presumed innocent unless and until proven guilty.UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Pharmacist Arrested in New Jersey, Charged with Assembling Illegal Drug LabRead the Press Release
NEWARK, N.J. - Special agents of the Drug Enforcement Administration (DEA) and FBI arrested a pharmacist early this morning in Jersey City, N.J., on federal charges alleging he assembled equipment for an illegal drug lab, New Jersey U.S. Attorney Paul J. Fishman announced.
Jordan Gonzalez, 33, of New York and formerly of Jersey City, is charged by criminal complaint with one count of attempting to manufacture methylenedioxyamphetamine (MDA) and one count of possessing chemicals and materials to manufacture a controlled substance.
Law enforcement officers are executing search warrants in New Jersey and New York in connection with the ongoing investigation that led to the arrest.
Gonzalez will appear on the charges before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court at a date and time to be determined.
According to the complaint:
Gonzalez made a series of purchases through an online auction website of materials associated with the manufacture of MDA, a hallucinogen and Schedule I controlled substance. His acquisitions included various chemicals and flasks, as well as empty gel caps and a machine to fill them.
The investigation also showed that Gonzalez has conducted Internet research related to the synthesis of MDA.
The manufacturing charge carries a maximum potential penalty of 20 years in prison and a $1 million fine. The possession of equipment charge carries a maximum potential penalty of four years in prison and a maximum $250,000 fine, or twice the gross gain or loss from the offense.
U.S. Attorney Fishman credited special agents of the New Jersey DEA, under the direction of Special Agent in Charge Carl J. Kotowski, and the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, with the ongoing investigation. He also thanked the New York City and Jersey City Police Departments and the New Jersey State Police for their assistance.The government is represented by Assistant U.S. Attorneys L. Judson Welle and Francisco J. Navarro of the U.S. Attorney’s Office Criminal Division in Newark.
The charges and allegations contained in the complaint are merely accusations and the defendant is considered innocent unless and until proven guilty.
13-435
Defense counsel: Assistant Federal Public Defender David Holman Esq., Newark
Gonzalez, Jordan Complaint
Peddling Crack Cocaine from Apartment Sends Topeka Man to Federal PrisonRead the Press Release
TOPEKA, KAN. – A Topeka man has been sentenced to 87 months in federal prison for maintaining an apartment where he sold crack cocaine, U.S. Attorney Barry Grissom said today.
Charles L. Whetstone, 59, Topeka, Kan., pleaded guilty to one count of maintaining a premises in furtherance of drug trafficking. In his plea, he admitted that in April 2011 the Topeka Police Department made controlled buys of cocaine from Whetstone at an apartment at 611 S.W. Fillmore in Topeka. Whetstone lived elsewhere, but told buyers that when a gold Toyota was parked in front of the apartment he was open for business.
After serving a search warrant at the apartment and seizing drugs, police assumed the role of cocaine salesman at the address. Eleven more persons came to the residence and were arrested after they bought simulated drugs from an undercover officer. The apartment was located within 1,000 feet of Cair Paravel private school at 635 S.W. Tyler in Topeka.
Grissom commended the narcotics divisions of the Topeka Police Department and the Shawnee County Sheriff’s Office and Assistant U.S. Attorney Randy Hendershot for their work on the case.
Owner of Northern Kentucky Chiropractic Clinic Indicted for Health Care Fraud ConspiracyRead the Press Release
COVINGTON, KY - The owner of a chiropractic clinic in northern Kentucky was indicted today on charges that she conspired to defraud a federal health care benefit program.
A federal grand jury in Covington returned the indictment charging 47-year-old Dr. Andrea Almond, of Cincinnati, with one count of conspiracy to commit health care fraud.
The indictment alleges that from September 2008 until April 2010, Almond, a chiropractor and owner of Newport Chiropractic in Campbell County, allegedly submitted health care claims to Medicaid for chiropractic services which she did not perform or witness. Furthermore, the indictment alleges that Almond was aware that the chiropractors who did perform the services were not enrolled as providers with Kentucky Medicaid, and therefore were not eligible for reimbursement.
According to the indictment, over the course of the conspiracy Almond submitted or caused to be submitted approximately 1,943 claims for payment in the approximate amount of $483,797, and received approximately $95,098 in actual reimbursement from Kentucky Medicaid.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, Perrye Turner, Special Agent in Charge, Federal Bureau of Investigation, Robin Dangleish, Postal Inspector in Charge, United States Postal Inspection Service, and Jack Conway, Kentucky Attorney General, jointly made the announcement today after a federal grand jury in Covington returned the indictment.
The investigation preceding the indictment was conducted by the Federal Bureau of Investigation, the United States Postal Inspection Service, and the investigators with the Medicaid Fraud and Abuse Control Unit with the Kentucky Office of the Attorney General. The indictment was presented to the grand jury by Assistant United States Attorney Laura K. Voorhees.
Almond’s appearance before the United States District Court has not yet been set by the Court in Covington. If convicted, Almond faces a maximum prison sentence of 10 years. However, any sentence following a conviction would be imposed by the Court after consideration of the United States Sentencing Guidelines and the federal statute governing the imposition of sentences.
Operation Coin CollectorRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that 37 defendants – including 23 Sedalia, Mo., residents and eight Johnson County, Mo., residents – have been indicted in six separate but related cases for their roles in drug-trafficking conspiracies that distributed more than $1 million worth of cocaine and crack cocaine, as well as illegally possessing firearms.
Operation Coin Collector was a two-year investigation launched by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) in partnership with the ATF-led JOLT (Joint Operations Law Enforcement Team) Task Force, comprised of the Sedalia, Warrensburg and Warsaw police departments and the Pettis County, Hickory County, Henry County, Johnson County and Benton County sheriff’s departments. The investigation focused on significant violent crime and drug-trafficking activity in the Sedalia area. As a result of the federal investigation, three indictments were returned under seal by a federal grand jury on Oct. 16, 2013. Three more indictments were returned under seal by a federal grand jury on Nov. 12, 2013.
ATF agents, members of the JOLT Task Force, the U.S. Marshal’s Service, police officers from Knob Knoster, Independence, Columbia, and Kansas City, Mo., the Boone County Sheriff’s Department, the Missouri State Highway Patrol and U.S. Customs and Border Protection Airwing participated in a law enforcement sweep that began early this morning and resulted in 28 arrests and the execution of five search warrants in Sedalia. Five defendants are already in custody for unrelated cases and four defendants are fugitives. All six of the sealed indictments were unsealed and made public today upon the arrests and initial court appearances of a number of defendants. Four defendants are already in custody in separate and unrelated cases.
USA v. Staten, et al
William M. Staten, also known as “Bugs,” 39, Sarandon A. Staten, also known as “Ran,” 19, Robert D. Ballance, also known as “Bass,” 30, Gordon E. Hawkins, also known as “Fresh,” 24, Ronald W. Spencer, 68, and Katherine A. Mazari, 50, all of Sedalia, and Ansley E. Sims, 29, of Columbia, Mo., were charged in a 14-count indictment returned by a federal grand jury in Kansas City on Tuesday, Nov. 12, 2013.
The federal indictment alleges that each of the defendants participated in a conspiracy to distribute five kilograms or more of cocaine and/or 280 grams or more of crack cocaine from Oct. 5, 2011, to Nov. 4, 2013.
In addition to the conspiracy, Ballance and Sarandon Staten are charged together in one count of aiding and abetting each other to distribute crack cocaine. Ballance is also charged with two counts of distributing crack cocaine. William Staten is also charged with one count of possessing cocaine with the intent to distribute.
Ballance, Hawkins, Mazari, Sims, Spencer and Sarandon Staten are each also charged with one count of using a cell phone to facilitate the distribution of cocaine and/or crack cocaine. William Staten is also charged with two counts of using a cell phone to facilitate the distribution of cocaine and/or crack cocaine.
The indictment also contains a forfeiture allegation, which would require each of the defendants to forfeit to the government any property obtained from the proceeds of the alleged offenses or used to commit the alleged offenses, including a money judgment of $1 million, which was allegedly received in exchange for the unlawful distribution of cocaine and/or crack cocaine.
USA v. Wilson, et al
Brian K. Wilson, also known as “Brazy,” 39, Jeffrey A. Kinner, also known as “P-Nut,” 31, D’Shaun L. Johnson, 19, Devan L. Plakorus, 19, and Janice M. Williams, 41, all of Knob Knoster, Mo.; John B. Thomas-Flowers, also known as “J.B.,” 30, and Rashawn D. Cason, 26, both of Blue Springs, Mo.; Jordan L. Wade, also known as “Cali,” 23, Jason L. Jackson, 29, and Connie Sue Kendrick, 46, all of Warrensburg, Mo.; Walter J. Staten, Jr., also known as “Walt Jack,”22, Micah J. Clark, also known as “Dukes,” 32, and Samuel I. Gravitt, 21, all of Sedalia, Mo.; Jeremy D. Peters, also known as “Pun,” 24, of Columbia, Mo.; Kelly L. Buckner, Jr., 22, of Harrisburg, Mo.; and Jacob M. Goans, 20, of Raytown, Mo., were charged in a 27-count indictment returned by a federal grand jury in Kansas City on Tuesday, Nov. 12, 2013.
The federal indictment alleges that 14 of the defendants (with the exception of Gravitt and Goans) participated in a conspiracy to distribute five kilograms or more of cocaine and 280 grams or more of crack cocaine from Oct. 5, 2011, to June 20, 2013.
In addition to the conspiracy, Wilson and Jackson are charged together in one count of aiding and abetting each other to distribute crack cocaine.
Wilson is also charged with being a felon in possession of firearms. The indictment alleges that Wilson, who has a prior felony conviction, was in possession of eight rifles and two shotguns. Wilson is also charged with possessing 10 stolen firearms.
Wade and Gravitt are each charged with one count of possessing stolen firearms. The indictment alleges that Wade and Gravitt were in possession of a stolen Savage 7mm rifle and a stolen Marlin 30-30 caliber rifle. Gravitt and Wade are each also charged with one count of being a felon in possession of firearms.
Goans is charged with one count of possessing stolen firearms. The indictment alleges that Goans was in possession of 11 stolen firearms, including eight shotguns, one rifle, a Mossberg .410-gauge weapon made from a shotgun and a Baikal 12-gauge/.22-caliber combination gun. Goans is also charged with one count of possessing a sawed-off shotgun.
Wilson is also charged with six counts of using a cell phone to facilitate the distribution of cocaine and/or crack cocaine. Wade, Clark, Staten, Johnson, Williams, Peters, Jackson, Plakorus, Kendrick, Kinner and Thomas-Flowers are each also charged with one count of using a cell phone to facilitate the distribution of cocaine and/or crack cocaine.
The indictment also contains a forfeiture allegation, which would require each of the defendants to forfeit to the government any property obtained from the proceeds of the alleged offenses or used to commit the alleged offenses, including a money judgment of $1 million, which was allegedly received in exchange for the unlawful distribution of cocaine and/or crack cocaine.
USA v. Buckner
Eual T. Buckner, also known as “Big Tommy,” 56, of Sedalia, was charged with being a felon in possession of a firearm in an indictment returned by a federal grand jury in Kansas City on Tuesday, Nov. 12, 2013.
The federal indictment alleges that Buckner, who has a prior felony conviction, was in possession of a Remington 16-gauge pump-action shotgun.
USA v. Kendrick, et al
Kenneth C. Kendrick, also known as “Kavi,” 40, his father, Lee A. Kendrick, 65, Eric T. Hawkins, also known as “Easy,” 33, Kardell E. Sims, also known as “FU,” 35, George E. Buckner, also known as “Jorge,” 50, Ronald C. Boggs, also known as “Hobbs,” 47, Marvin D. Spruell, 56, and his wife, Vickey J. Spruell, 56, all of Sedalia, were charged in a 12-count indictment returned by a federal grand jury on Oct. 16, 2013.
The federal indictment alleges that each of the defendants participated in conspiracy to distribute five kilograms or more of cocaine and/or 280 grams or more of crack cocaine from Oct. 5, 2011, to July 2, 2013.
In addition to the conspiracy, Kenneth Kendrick is charged with five counts of distributing crack cocaine and one count of distributing cocaine. Hawkins is also charged with two counts of distributing crack cocaine. Buckner and Boggs are each also charged with one count of aiding and abetting others to distribute crack cocaine. Kenneth Kendrick, Hawkins and Boggs are also charged together in one count of possessing cocaine with the intent to distribute.
The indictment also contains a forfeiture allegation, which would require all of the defendants to forfeit to the government any property obtained from the alleged violations, including a money judgment of $500,000, which was allegedly received in exchange for the unlawful distribution of cocaine and/or crack cocaine.
USA v. Poindexter, et al
Gordell E. Poindexter, also known as “Fat Man,” 23, Art W. Williams, also known as “Ace,” 25, Demetrius N. Gray, also known as “Meechi,” 29, and Antonio T. Gray, also known as “T,” 29, all of Sedalia, were charged in a 19-count indictment returned by a federal grand jury in Kansas City on Oct. 16, 2013.
The federal indictment alleges that each of the defendants participated in a conspiracy to distribute five kilograms or more of cocaine and/or 280 grams or more of crack cocaine from Oct. 5, 2011, to June 20, 2013.
In addition to the conspiracy, Poindexter is charged with seven counts of distributing crack cocaine and two counts of being a felon in possession of a firearm. The indictment alleges that Poindexter, who has a prior felony conviction, was in possession of a Rohm .22-caliber revolver and a Smith & Wesson .44-caliber revolver.
Demetrius Gray is also charged with three counts of distributing crack cocaine and one count of being a felon in possession of a firearm. The indictment alleges that Demetrius Gray, who has a prior felony conviction, was in possession of a Maadi Model Helwan 9mm pistol.
Williams is also charged with two counts of distributing crack cocaine. Antonio Gray is also charged with one count of distributing crack cocaine.
Williams, Demetrius Gray and Antonio Gray are also charged together in one count aiding and abetting each other to distribute crack cocaine. Williams and Antonio Gray are also charged together in one count of aiding and abetting each other to distribute crack cocaine.
The indictment also contains a forfeiture allegation, which would require each of the defendants to forfeit to the government any property obtained from the proceeds of the alleged violations, including a money judgment of $500,000, which was allegedly received in exchange for the unlawful distribution of cocaine and/or crack cocaine.
USA v. Staten
Marquoi D. Staten, also known as “Scratch,” 21, of Sedalia, was charged in a five-count indictment returned by a federal grand jury in Kansas City on Oct. 16, 2013.
The federal indictment alleges that Staten participated in a conspiracy to distribute 28 grams or more of crack cocaine from Oct. 5, 2011, to June 5, 2012. In addition to the conspiracy, Staten is charged with four counts of distributing crack cocaine.
The federal indictment also contains a forfeiture allegation, which would require Staten to forfeit to the government any property obtained from the proceeds of the alleged violations or used to commit the alleged violations, including $2,248 that was seized by Sedalia police officers.
Dickinson cautioned that the charges contained in these indictments are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
These cases are being prosecuted by Special Assistant U.S. Attorney Sydney Sanders. They were investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the ATF-led JOLT Task Force and the Pettis County, Mo., Prosecutor’s Office.Ohio-Based Basco Manufacturing Co. to Pay <br /> $1.1 Million for Allegedly Falsifying Customs Documents<br /> to Evade Import Duties on Chinese ProductsRead the Press Release
The Department of Justice announced today that Ohio-based Basco Manufacturing Co. (Basco) has agreed to pay $1.1 million to resolve allegations that it violated the False Claims Act by making false customs declarations to avoid paying duties on products imported from a Chinese manufacturer, and that it has filed a complaint against four other companies and two individuals based on similar allegations. The defendants named in the lawsuit are California-based C.R. Laurence Co.; Florida-based Southeastern Aluminum Products Inc.; Texas-based Waterfall Group LLC; New York-based Northeastern Aluminum Corp.; Northeastern’s owner, William Ma; and Robert Wingfield, the U.S. representative of Chinese exporter Tai Shan Golden Gain Aluminum Products Ltd. (Tai Shan).
“Companies that import products made abroad must comply with the law, including paying the import duties that protect domestic manufacturers and producers from unfair competition,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery. “The Department of Justice is committed to enforcing the law against those who fail to pay the government money it is owed, just as it will enforce the law against those who falsely claim government funds.”
The government’s settlement and complaint involve allegations that Basco and the companies named in the lawsuit made false declarations to the U.S. Department of Homeland Security Customs and Border Protection to avoid paying antidumping and countervailing duties on aluminum extrusions imported from manufacturer Tai Shan in the People’s Republic of China (PRC). Allegedly, these companies misrepresented that the aluminum extrusions, which are used in the manufacture of shower enclosures and other products, were imported from Malaysia.
The Department of Commerce assesses, and Customs and Border Protection collects, antidumping and countervailing duties to protect U.S. businesses and level the playing field for domestic products. Antidumping duties protect against foreign companies “dumping” products on U.S. markets at prices below cost, while countervailing duties offset foreign government subsidies. Imports of PRC-made aluminum extrusions have been subject to antidumping and countervailing duties since 2010. No such duties are due on imports of such items made in Malaysia.
“Circumvention of our country’s import laws causes substantive harm to U.S. businesses and our economy,” said Acting U.S. Attorney for the Middle District of Florida A. Lee Bentley III. “These laws must be strictly enforced so that our companies can remain competitive in markets throughout the world.”
Basco and the defendants named in the government’s lawsuit allegedly engaged in a scheme to avoid duties by shipping the aluminum extrusions manufactured by Tai Shan in the PRC through Malaysia – a practice called transshipping. The U.S. government alleges that Basco and the defendants knew that the aluminum extrusions were merely repackaged in Malaysia and did not undergo a substantial transformation that may have justified changing the product’s country of origin from the PRC to Malaysia.
“Antidumping and countervailing duties enforcement is a priority for Customs and Border Protection due to the significant role that it plays in the economic security of the United States,” said Director of Field Operations for Customs and Border Protection Vernon Foret. “Customs and Border Protection is responsible for facilitating the legitimate flow of trade, while enforcing the laws against the evasion of duties intended to protect against unfair trade practices.”
The allegations against Basco and asserted in the government’s complaint were brought by whistleblower James F. Valenti Jr. in the U.S. District Court for the Middle District of Florida under the qui tam, or whistleblower, provisions of the False Claims Act. The Act permits private parties to sue companies and individuals on behalf of the government who have falsely claimed federal funds or, as in this case, made false statements to avoid paying funds owed to the government. The Act also allows the government to intervene in and take over a lawsuit, as it has done in this case, and entitles the whistleblower to receive a share of any funds recovered through the lawsuit. Valenti’s share of the Basco settlement has not yet been determined.
The investigation was handled by the Department of Justice Civil Division, Commercial Litigation Branch; the U.S. Attorney’s Office for the Middle District of Florida; the Department of Homeland Security U.S. Customs and Border Protection and Immigration and Customs Enforcement; and the Department of Commerce International Trade Administration.
The lawsuit is captioned United States ex rel. Valenti v. Tai Shan Golden Gain Aluminum Products Ltd., et al., Case No. 11-cv-368 (M.D. Fla.). The government’s claims against Basco, and against the defendants named in the government’s complaint, are allegations only; there has been no determination of liability.
Ohio-Based Basco Manufacturing Co. to Pay $1.1 Million for Allegedly Falsifying Customs Documents to Evade Import Duties on Chinese ProductsRead the Press Release
United States Sues Four Other Companies and Two Individuals
for Similar ViolationsWASHINGTON – The Department of Justice announced today that Ohio-based Basco Manufacturing Co. (Basco) has agreed to pay $1.1 million to resolve allegations that it violated the False Claims Act by making false customs declarations to avoid paying duties on products imported from a Chinese manufacturer, and that it has filed a complaint against four other companies and two individuals based on similar allegations. The defendants named in the lawsuit are California-based C.R. Laurence Co.; Florida-based Southeastern Aluminum Products Inc.; Texas-based Waterfall Group LLC; New York-based Northeastern Aluminum Corp.; Northeastern’s owner, William Ma; and Robert Wingfield, the U.S. representative of Chinese exporter Tai Shan Golden Gain Aluminum Products Ltd. (Tai Shan).
“Companies that import products made abroad must comply with the law, including paying the import duties that protect domestic manufacturers and producers from unfair competition,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery. “The Department of Justice is committed to enforcing the law against those who fail to pay the government money it is owed, just as it will enforce the law against those who falsely claim government funds.”
The government’s settlement and complaint involve allegations that Basco and the companies named in the lawsuit made false declarations to the U.S. Department of Homeland Security Customs and Border Protection to avoid paying antidumping and countervailing duties on aluminum extrusions imported from manufacturer Tai Shan in the People’s Republic of China (PRC). Allegedly, these companies misrepresented that the aluminum extrusions, which are used in the manufacture of shower enclosures and other products, were imported from Malaysia.The Department of Commerce assesses, and Customs and Border Protection collects, antidumping and countervailing duties to protect U.S. businesses and level the playing field for domestic products. Antidumping duties protect against foreign companies “dumping” products on U.S. markets at prices below cost, while countervailing duties offset foreign government subsidies. Imports of PRC-made aluminum extrusions have been subject to antidumping and countervailing duties since 2010. No such duties are due on imports of such items made in Malaysia.
“Circumvention of our country’s import laws causes substantive harm to U.S. businesses and our economy,” said Acting U.S. Attorney for the Middle District of Florida A. Lee Bentley III. “These laws must be strictly enforced so that our companies can remain competitive in markets throughout the world.”
Basco and the defendants named in the government’s lawsuit allegedly engaged in a scheme to avoid duties by shipping the aluminum extrusions manufactured by Tai Shan in the PRC through Malaysia – a practice called transshipping. The U.S. government alleges that Basco and the defendants knew that the aluminum extrusions were merely repackaged in Malaysia and did not undergo a substantial transformation that may have justified changing the product’s country of origin from the PRC to Malaysia.
“Antidumping and countervailing duties enforcement is a priority for Customs and Border Protection due to the significant role that it plays in the economic security of the United States,” said Director of Field Operations for Customs and Border Protection Vernon Foret. “Customs and Border Protection is responsible for facilitating the legitimate flow of trade, while enforcing the laws against the evasion of duties intended to protect against unfair trade practices.”
The allegations against Basco and asserted in the government’s complaint were brought by whistleblower James F. Valenti Jr. in the U.S. District Court for the Middle District of Florida under the qui tam, or whistleblower, provisions of the False Claims Act. The Act permits private parties to sue companies and individuals on behalf of the government who have falsely claimed federal funds or, as in this case, made false statements to avoid paying funds owed to the government. The Act also allows the government to intervene in and take over a lawsuit, as it has done in this case, and entitles the whistleblower to receive a share of any funds recovered through the lawsuit. Valenti’s share of the Basco settlement has not yet been determined.
The investigation was handled by the Department of Justice Civil Division, Commercial Litigation Branch; the U.S. Attorney’s Office for the Middle District of Florida; the Department of Homeland Security U.S. Customs and Border Protection and Immigration and Customs Enforcement; and the Department of Commerce International Trade Administration.
The lawsuit is captioned United States ex rel. Valenti v. Tai Shan Golden Gain Aluminum Products Ltd., et al., Case No. 11-cv-368 (M.D. Fla.). The government’s claims against Basco, and against the defendants named in the government’s complaint, are allegations only; there has been no determination of liability.
Ohio Pair Indicted for Marijuana ConspiracyRead the Press Release
A federal grand jury returned a one-count indictment charging Tyler J. Lilley, age 33, of Akron, Ohio, and Tyler J. Bell, age 31, of Louisville, Ohio, with conspiracy to distribute and possession with intent to distribute marijuana, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
The indictment charges that from at least as early as the Summer of 2012 to on or about June 26, 2013, Lilley conspired to distribute and to possess with the intent to distribute 100 kilograms or more of marijuana; and Bell conspired to distribute and to possess with intent to distribute 50 kilograms or more of marijuana.
If convicted, the defendants’ sentences will be determined by the Court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violations. In all cases, the sentence will not exceed the statutory maximum and, in most cases, it will be less than the maximum.
The investigation preceding the indictment was conducted by the Drug Enforcement Administration. The matter is being prosecuted by Assistant United States Attorney Samuel A. Yannucci.
New York People Plead Guilty in Counterfeit Fraud SchemeRead the Press Release
St. Louis, MO –These five New York residents traveled from New York to St. Louis returning stolen merchandise to various retail stores using counterfeit driver’s licenses and receipts.
According to court documents, on November 29, 2012, Maryland Heights police officers conducted a traffic stop of a vehicle being driven by Ishaan Davis. A subsequent search revealed Toshiba laptop computers, a Star TSP 100 Future Print receipt printer, document making card stock, counterfeit State of Florida and New York drivers licenses in Davis' name and the names of others and assorted clothing bearing sales tags. Further investigation revealed two rooms in which Davis, Shonta V. Simpson and William Randall Estes were registered. In addition to items similar to those found in Davis’ car, in the hotel rooms, the officers found boxes of additional clothing with tags which had been mailed from Leo Lewis in New York to Davis in St. Louis, as well as receipts showing wire transfers of money from Davis to Lewis and Ingrid Millsaps.
Through his plea, Davis admitted that he utilized the equipment to produce counterfeit drivers licenses and merchant receipts so that Simpson and Estes could return stolen merchandise for cash. The total number of counterfeit drivers licenses found in the vehicle and the two hotel rooms was 13. During the scheme, they defrauded Ann Taylor and The Loft stores, as well as stores such as The Gap. Simpson had been recruited by Davis, and Leo Lewis recruited Estes to participate in the fraudulent scheme. Estes received a daily rate for his participation, and Simpson was promised a percentage of the money received when she returned the stolen items.
The merchandise that was fraudulently returned was stolen by individuals such as co-defendant Ingrid Millsaps from stores located in, and near, the Brooklyn, New York area. In general, Millsaps was able to steal merchandise valued at $5,000 within two to three days, which she then provided to Davis and others. On one occasion, in order to comply with a request for merchandise, Millsaps stole clothing and items valued at approximately $60,000 during a two to three week period. Millsaps also stole receipt tape and proprietorial store information from retailers such as Ann Taylor in order to facilitate the fraudulent scheme. Millsaps and Davis engaged in the criminal activity for approximately 11 years. Through their pleas, they agreed that a conservative estimate would place the loss for this area exceeding $400,000.
ISHAAN DAVIS, Springfield Gardens, NY; INGRID MILLSAPS, Brooklyn, NY; and LEO LEWIS, Brooklyn, NY, entered guilty pleas this week before United States District Judge Henry Autrey. Sentencings have been set for February 10, 2014.
Co-defendants, Shonta Simpson and William Estes, both of Brooklyn, NY, pled guilty to related charges and were sentenced earlier this year.
The case was investigated by the City of Maryland Heights Police Department and the United States Postal Inspection Service. Assistant United States Attorney Tracy Berry handled the case for the U.S. Attorney’s Office.
New York Man Indicted for Identity Theft and Bank FraudRead the Press Release
A federal indictment was filed today charging Gregory Frazier, aka Gregory Fernandez, age 53, of New York, New York, with bank fraud and aggravated identity theft, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
The indictment alleges that the defendant executed and attempted to execute a scheme to defraud JP Morgan Chase Bank, and to obtain money owned by and under the custody of the bank by means of false and fraudulent pretenses, representations and promises, on October 23, 2013.
Under this scheme, the defendant obtained counterfeit New York State drivers licenses containing his photograph, and the personal identifier information of three individuals who resided in New York State, according to the indictment.
On October 23, 2013, the defendant entered JP Morgan Chase Bank branches in Streetsboro, Twinsburg, Bedford Heights and Beachwood, Ohio, seeking to withdraw cash from accounts maintained by the three individuals whose personal identifying information had been stolen, according to the indictment.
The case is being prosecuted by Assistant United States Attorneys Robert W. Kern and Miranda Dugi following an investigation by the United States Secret Service, and the Beachwood and Streetsboro Police Departments.
If convicted, the defendant’s sentence will be determined by the court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Moriarty Man Sentenced to Fourteen Years for Robbing Two Albuquerque-Area Banks in July 2012Read the Press Release
ALBUQUERQUE – Georges Marius Hyatt, 47, of Moriarty, N.M., was sentenced earlier today to 14 years in federal prison followed by three years of supervised release for his bank robbery conviction and for violating the terms of his supervised release on prior convictions. Hyatt also was ordered to pay restitution to the banks that were the victims of his criminal conduct.
Hyatt was arrested on July 18, 2012 on a criminal complaint charging him with robbing the New Mexico Federal Credit Union branch at 6501 Indian School Road NE in Albuquerque on July 16, 2012. According to the criminal complaint, Hyatt was identified as the bank robber by an official with the U.S. Probation Officer who saw photographs taken by the Credit Union’s surveillance cameras in the media. The official notified the FBI that a warrant had been issued for Hyatt’s arrest for violating the conditions of his supervised release. Hyatt was arrested after the victim bank teller positively identified him as the bank robber.
On March 23, 2013, Hyatt pled guilty to a four-count felony information charging him with (1) robbing the Credit Union on July 16, 2012; (2) robbing the Bank of the West branch located at 5401 Gibson Blvd. SE in Albuquerque on July 17, 2012; (3) possessing a firearm in furtherance of a crime of violence; and (4) being a felon in possession of a firearm. In entering his guilty plea, Hyatt admitted that he previously had been convicted on bank robbery charges in the U.S. District Court for the District of New Mexico.
This case was investigated by the Albuquerque office of the FBI and the Albuquerque Police Department and was prosecuted by Assistant U.S. Attorney Jon K. Stanford.Monroe Couple Sentenced for Interstate Theft and Tax OffensesRead the Press Release
A husband and wife from Monroe were sentenced today for their roles in a theft and tax violation scheme, U.S. Attorney Barbara L. McQuade announced today.
Judge Marianne O. Battani sentenced John Arthur McCarter, 46, to 57 months in prison, and his wife, Katherine McCarter, 36, to 3 years of probation.
McQuade was joined in the announcement by Carolyn Weber, IRS-Detroit, Acting Special Agent in Charge, and Paul M. Abbate, Special Agent in Charge of the Detroit Division of the Federal Bureau of Investigation.
John McCarter was sentenced for interstate theft of stolen tires and for tax evasion. Katherine McCarter was sentenced for impeding the administration of the IRS laws and presenting false documents to the IRS.The case arose from John McCarter’s theft of six semi-trailers full of new tires and wheels from the Kace Logistics yard in Romulus, Michigan, in August 2006 and October 2007. Some of the stolen tires and wheels were intended for the Ford F-150 Harley Davidson series. After breaking the locks and hitching the semi-trailers to their own cabs, McCarter and his accomplices transported the semi-trailers to Knox, Pennsylvania, where they sold them to a wholesale tire dealer for approximately $240,000.
In addition to the interstate theft charge, John McCarter was also charged with tax evasion for failing to declare and pay taxes on approximately $759,000 that he obtained during from sales of new tires to the wholesale tire company in Pennsylvania. The IRS calculated that he owed taxes of nearly $225,000 on the unreported income.
Katherine McCarter pleaded guilty to impeding the investigation of IRS Criminal Investigations agents by attempting to mislead them about the source and purpose of monies John McCarter directed her to deposit into her personal bank accounts from the proceeds of the tire sales he had obtained.
“Not only did Mr. McCarter evade payment of taxes on his ill-gotten gains but his wife lied to the IRS about it when confronted with these facts. Compliance with our tax laws is an important aspect of our civil responsibilities” stated Carolyn Weber, Acting Special Agent in Charge. The IRS will continue to pursue those who circumvent the United States tax system.”
The investigation of this case was conducted by special agents of the FBI and IRS Criminal Investigations and prosecuted by Assistant U.S. Attorneys Ross MacKenzie and Ellen Christensen.
Midwest USA Outfitters Operated by A Pennsylvania Man Found Guilty on 13 Counts of Lacey Act ViolationsRead the Press Release
DES MOINES, IA - On November 14, 2013, Rodney Eugene Hughes, a 63 year-old resident of Mayfield, Pennsylvania, doing business as Midwest USA Outfitters, Cantril, Iowa, was found guilty in federal court of seven counts of the unlawful sale and/or acquiring of deer, taken and transported in interstate commerce, announced United States Attorney Nicholas A. Klinefeldt. In addition, Mr. Hughes was found guilty of six counts of willfully submitting false information as to the licensing of said deer that was intended to be transported in interstate commerce. Penalties for said crimes include a fine not more than $250,000, imprisonment for not more than five years, or both.
The evidence produced at trial showed that Hughes owned and operated a hunting guide service in Southern Iowa known as Midwest USA Outfitters. In 2008, several non-resident hunters came to Southern Iowa to hunt with Midwest USA Outfitters. These hunters came knowing they did not possess a buck tag, but were told by Hughes that he would provide them with a resident buck tag. Hughes had relatives and friends obtain hunting tags and used these tags to place on the non-resident hunters’ kill. Hughes would then report or cause to be reported the tag information to the State of Iowa by inputting the tag number belonging to people other than the hunters. This is in violation of the Lacey Act, Title 16 U.S. Code Sections 3372 and 3373; in addition to Iowa State Code Sections 483A.1; 483A.26; 483A.38; and various Iowa Administrative Code Sections.
The investigation was conducted by the U.S. Fish & Wildlife Service and the Iowa Department of Natural Resources. The case was prosecuted by the U.S. Attorney’s Office for the Southern District of Iowa.
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Massachusetts Man Charged with Armed Robbery of East Hartford PharmacyRead the Press Release
Deirdre M. Daly, Acting United States Attorney for the District of Connecticut, today announced that DALBERT RODRIGUEZ, 29, recently of Holyoke and Amherst, Mass., has been arrested on a federal criminal complaint charging him with the armed robbery of prescription narcotics from a CVS store in East Hartford last month.
RODRIGUEZ was arrested yesterday in Massachusetts. He appeared before U.S. Magistrate Judge Joan G. Margolis in New Haven yesterday afternoon and was ordered detained.
According to court documents, this matter stems from an investigation into a series of armed robberies occurring at pharmacies in the greater Hartford area and Western Massachusetts. During the robberies, an assailant typically brandished a handgun and proceeded to steal large quantities of prescription narcotics.
As alleged in the criminal complaint, at approximately 9:00 p.m. on October 18, 2013, RODRIGUEZ entered the CVS Pharmacy located at 972 Silver Lane in East Hartford, proceeded to the pharmacy counter, passed through a swinging door and approached the pharmacist who was behind the counter. RODRIGUEZ displayed a handgun to the pharmacist and instructed him to open the safe. RODRIGUEZ then removed numerous pill bottles from the safe, placed them in a plastic bag and exited the store.
The complaint charges RODRIGUEZ with interference with commerce through threat of violence and conspiracy, possession of a firearm in furtherance of a crime of violence, and possession and conspiracy to possess narcotics with intent to distribute.
Acting U.S. Attorney Daly stated that the investigation is ongoing.
This matter is being investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the Drug Enforcement Administration and the East Hartford Police Department, with the assistance of the Cromwell Police Department, the Amherst (Mass.) Police Department and other state and local law enforcement agencies. This case is being prosecuted by Assistant U.S. Attorney Anthony E. Kaplan.
Acting U.S. Attorney Daly stressed that a complaint is only a charge and is not evidence of guilt. Charges are only allegations, and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
PUBLIC AFFAIRS CONTACT:
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[email protected]Man Pleads Guilty in Salina Drug Trafficking CaseRead the Press Release
TOPEKA, KAN. – A man has pleaded guilty in a federal drug trafficking case in Salina, U.S. Attorney Barry Grissom said today.
Jon Reed Woodbridge, 23, Salina, Kan., pleaded guilty to one count of using a telephone with texting capabilities in furtherance of drug trafficking. In his plea, Woodbridge admitted that on Feb. 7, 2013, he used telephone texting technology to facilitate trafficking in marijuana.
He is set for sentencing Feb. 3, 2014. He faces a maximum penalty of eight years in federal prison and a fine up to $250,000.
Co-defendants are:
Abigail Torres Soto, who is set for sentencing Feb. 14, 2014.
Delaine Rae Romeo, who is set for sentencing Jan. 27, 2014.Grissom commended the 1-70/I-35 Drug Task Force, the Salina Police Department and Assistant U.S. Attorney Richard Hathaway for their work on the case.
Las Vegas Man Convicted of Transportation of A Minor with Intent to Engage in Criminal Sexual ActvityRead the Press Release
TUCSON, Ariz. – Keith Deshawn Anderson, 39, of Las Vegas, Nev. was found guilty of four counts of transportation of a minor with intent to engage in criminal sexual activityby a federal jury in Tucson on November 12, 2013. The case was tried before U.S. District Judge Raner C. Collins. The defendant is being held after trial. Sentencing is set before Judge Collins on January 21, 2014.
The evidence at trial showed that during 2011 and 2012 the defendant transported a female minor multiple times from Arizona to Nevada and engaged in statutory rape.
U.S. Attorney John S. Leonardo stated, "This conviction serves as a reminder that sexual predators exist in our communities and we all need to be more vigilant."
A conviction for transportation of a minor with intent to engage in criminal sexual activity carries a minimum mandatory term of ten years imprisonment up to life imprisonment, a maximum fine of $250,000, or both.
The investigation in this case was conducted by the Federal Bureau of Investigation and the Sierra Vista Police Department. The prosecution was handled by Nicole Savel and Karen Rolley, Assistant U.S. Attorneys, District of Arizona, Tucson.CASE NUMBER: CR-12-0914-TUC-RCC (CRP)
RELEASE NUMBER: 2013-086_AndersonFor more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az
Laguna Pueblo Man Pleads Guilty to Statutory Rape ChargeRead the Press Release
ALBUQUERQUE – Joshua Waconda, 21, a member and resident of Laguna Pueblo, entered a guilty plea this morning to an indictment charging him with sexual abuse of a minor under a plea agreement with the U.S. Attorney’s Office.
Waconda was arrested in Nov. 2012, on an indictment charging him with engaging in a sexual act with a child under the age of 16 years in Aug. 2011, on Laguna Pueblo lands. During today’s proceedings, Waconda pleaded guilty to the indictment.
At sentencing, which has yet to be scheduled, Waconda faces a maximum sentence of 15 years in prison followed by a term of supervised release to be determined by the court. Waconda will be required to register as a sex offender after he completes his prison sentence.
This case was investigated by the Laguna/Acoma Agency of BIA’s Office of Justice Services and the Pueblo of Laguna Police Department and is being prosecuted by Assistant U.S. Attorney Kyle T. Nayback.
The case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice (DOJ) to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and DOJ’s 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 http://www.justice.gov/psc/.
Kansas Man Charged in $3 Million Scheme to Sell Foreign Versions of BotoxRead the Press Release
KANSAS CITY, Mo. - Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Hesston, Kan., man has been indicted by a federal grand jury alongside an Alton, Ill., business owner and his company who were charged earlier this year for distributing more than $3 million worth of foreign Botox and Juvederm in the United States.
Christopher Tozier, 43, of Hesston, was charged in a superseding indictment returned by a federal grand jury in Kansas City, Mo. Today’s indictment replaces an April 3, 2013, indictment that charged Christopher Carstens, 48, of Alton, and his company, Orthopaedic Solutions, Inc., with violations of the Federal Food, Drug and Cosmetic Act.
The federal indictment alleges that Carstens and Orthopaedic Solutions distributed approximately 5,879 units of a foreign version of the prescription drug Botox and a foreign version of the prescription device Juvederm through their sales representatives to doctors or other health care professionals in the United States between 2008 and 2011, at a retail value of approximately $3,058,183.
Juvederm is a clear, biodegradable gel implant that is injected into the skin to correct wrinkles and folds.
Today’s superseding indictment charges Carstens, Orthopaedic Solutions and Tozier together in two counts of smuggling goods into the United States. They allegedly imported foreign Botox into the United States contrary to the prohibition against introducing drugs that were misbranded (because the foreign Botox labeling failed to bear the statement “Rx only”). They allegedly imported Juvederm 3 into the United States contrary to the prohibition against introducing devices that were adulterated (because the foreign versions of Juvederm 3 lacked FDA approval for distribution in the United States).
Tozier is also charged in today’s superseding indictment with one count of smuggling foreign Botox into the United States, two counts of distributing a misbranded drug (foreign Botox) across state lines and one count of distributing an adulterated device (Juvederm 3) across state lines.
Today’s superseding indictment contains several charges that were part of the original indictment. Carstens and Orthopaedic Solutions are charged with one count of mail fraud because they allegedly executed their scheme by distributing foreign Botox (which the FDA had not approved for distribution in the United States) via FedEx and attempted to hide their fraudulent scheme from doctors and health care professionals. Carstens and Orthopaedic Solutions are charged with one count of distributing an unapproved new drug across state lines because they had not received approval to import or distribute the foreign version of Botox in the United States. Carstens and Orthopaedic Solutions are charged with one count of distributing a misbranded drug across state lines. Carstens and Orthopaedic Solutions are charged with three counts of distributing an adulterated device across state lines. Carstens and Orthopaedic Solutions are charged with three counts of distributing a misbranded device across state lines because the Juvederm 3 labeling failed to bear adequate directions for use or appropriate warnings.
The indictment also contains a forfeiture count, which would require Carstens and Orthopaedic Solutions to forfeit to the government any property derived from the proceeds of the scheme, including a money judgment of $3,058,183 for all three defendants and an additional $26,125 from Tozier.
Dickinson cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorneys Jane Pansing Brown and Lucinda S. Woolery. It was investigated by the U.S. Food and Drug Administration, Office of Criminal Investigation.Justice Department Announces More Than $62 Million to Strengthen Re-entry; Probation and Parole ProgramsRead the Press Release
WASHINGTON – The Justice Department has awarded more than $62 million in grants to strengthen efforts to help people returning from prison rejoin their communities and become productive, law-abiding citizens. This grant announcement was made by Attorney General Eric Holder today while in St. Louis, where he visited Project EARN, a Drug Reentry Court program. Attorney General Holder delivered remarks to the program’s graduates and emphasized that successful reentry is a top priority at the Justice Department and a central part of his new “Smart on Crime” initiative.
“Over the course of my career, I’ve seen just how important – and powerful – reentry programs can be,” said Attorney General Eric Holder. “I learned how this cycle weakens communities, tears families apart and destroys individual lives. If more communities adopt reentry programs like the one I witnessed today in St. Louis, it will reduce criminal justice spending, ensure the fairest possible outcomes, and forge the stronger, safer communities that all of our citizens deserve.”
Later today, Attorney General Holder will travel to Peoria, IL, to attend a pre-court meeting with judges and pretrial service officers. He will also deliver remarks at an alternative to detention court hearing.
The Office of Justice Programs (OJP) made these 112 competitive and supplemental Second Chance Act (SCA) awards to state, tribal and local governments, and non-profit organizations to reduce recidivism, provide reentry services, conduct research and evaluate the impact of reentry programs. The SCA programs, administered through the Bureau of Justice Assistance (BJA) and the Office of Juvenile Justice and Delinquency Prevention (OJJDP), are designed to help communities develop and implement comprehensive strategies to reduce recidivism and address the challenges faced by incarcerated adults and youth when they return to their communities following release from confinement.
“Effective reentry services are critical to helping formerly incarcerated individuals remain crime-free and become productive, law-abiding citizens,” said Assistant Attorney General of the Office of Justice Programs Karol V. Mason. “The awards continue this Administration’s commitment to achieving sustainable reductions in recidivism and improving the safety of our communities.”
“We must continue to draw on the science of recidivism reduction and what works to ensure that the right people get the right integrated interventions at the right times,” said BJA Director Denise E. O’Donnell.
Of the over $62 million in funding provided, more than $57 million (91 BJA awards and 19 OJJDP awards) supports smart probation projects, treatment of returning adult and juveniles with co-occurring substance abuse and mental health disorders; adult and juvenile reentry demonstration projects; adult mentoring programs; technology career training projects for incarcerated adults and juveniles; and demonstration field experiments to test a parole reentry model. The remaining $5.4 million supports two awards for evaluation activities and training and technical assistance for Second Chance Act grantees and the reentry field in general.
OJJDP awarded more than $9.7 million in Second Chance Act Juvenile Reentry Program grant awards to reduce recidivism and assist youth in successfully returning to their communities after secure confinement. This includes $176,000 to assist four jurisdictions in planning a juvenile reentry program, and $6,573,177 for ten jurisdictions to implement evidence-based reentry programs that provide a comprehensive range of services for juveniles up to 18 years of age. This also includes $2,977,252 for five community programs to reduce long-term alcohol and other substance abuse among youth in secure confinement facilities and to increase drug treatment and mental health services for these youth.
“Too many young people caught up in the juvenile justice system fail to return to school, find a job, or live healthy, drug-free lives after being confined,” said OJJDP Administrator Robert L. Listenbee. “These grants will help them find a path out of crime and delinquency and begin to make positive contributions to their communities.”
OJP will also continue to provide reentry resources to the field through the National Reentry Resource Center (NRRC), through a cooperative agreement with the Council of State Governments (CSG) Justice Center, administered by BJA. The NRRC offers training and technical assistance for SCA grantees, provides distance learning and other reentry resources to the field, and administers the “What Works in Reentry Clearinghouse.” NRRC collaborates with other federal agencies focused on reentry activities and with the Attorney General’s Federal Interagency Reentry Council and its staff working group.
For a list of all OJP grant awards, please visit: www.ojp.gov/funding/funding.htm.
For more information on the NRRC, please visit: www.nationalreentryresourcecenter.org.
For more information on the Federal Reentry Council, please visit: csgjusticecenter.org/nrrc/projects/firc/.
The Office of Justice Programs, headed by Assistant Attorney General Karol V. Mason, provides federal leadership in developing the nation’s capacity to prevent and control crime, administer justice, and assist victims. OJP has six components: the Bureau of Justice Assistance; the Bureau of Justice Statistics; the National Institute of Justice; the Office of Juvenile Justice and Delinquency Prevention; the Office for Victims of Crime; and the Office of Sex Offender Sentencing, Monitoring, Apprehending, Registering, and Tracking.
Justice Department Announces More Than $62 Million <br /> to Strengthen Reentry, Probation and Parole ProgramsRead the Press Release
The Justice Department has awarded more than $62 million in grants to strengthen efforts to help people returning from prison rejoin their communities and become productive, law-abiding citizens. This grant announcement was made by Attorney General Eric Holder today while in St. Louis, where he visited Project EARN, a Drug Reentry Court program. Attorney General Holder delivered remarks to the program’s graduates and emphasized that successful reentry is a top priority at the Justice Department and a central part of his new “Smart on Crime” initiative.
“Over the course of my career, I’ve seen just how important – and powerful – reentry programs can be,” said Attorney General Eric Holder. “I learned how this cycle weakens communities, tears families apart and destroys individual lives. If more communities adopt reentry programs like the one I witnessed today in St. Louis, it will reduce criminal justice spending, ensure the fairest possible outcomes, and forge the stronger, safer communities that all of our citizens deserve.”
Later today, Attorney General Holder will travel to Peoria, Ill., to attend a pre-court meeting with judges and pretrial service officers. He will also deliver remarks at an alternative to detention court hearing.
The Office of Justice Programs (OJP) made these 112 competitive and supplemental Second Chance Act (SCA) awards to state, tribal and local governments, and non-profit organizations to reduce recidivism, provide reentry services, conduct research and evaluate the impact of reentry programs. The SCA programs, administered through the Bureau of Justice Assistance (BJA) and the Office of Juvenile Justice and Delinquency Prevention (OJJDP), are designed to help communities develop and implement comprehensive strategies to reduce recidivism and address the challenges faced by incarcerated adults and youth when they return to their communities following release from confinement.
“Effective reentry services are critical to helping formerly incarcerated individuals remain crime-free and become productive, law-abiding citizens,” said Assistant Attorney General of the Office of Justice Programs Karol V. Mason. “The awards continue this Administration’s commitment to achieving sustainable reductions in recidivism and improving the safety of our communities.”
“We must continue to draw on the science of recidivism reduction and what works to ensure that the right people get the right integrated interventions at the right times,” said BJA Director Denise E. O’Donnell.
Of the over $62 million in funding provided, more than $57 million (91 BJA awards and 19 OJJDP awards) supports smart probation projects, treatment of returning adult and juveniles with co-occurring substance abuse and mental health disorders; adult and juvenile reentry demonstration projects; adult mentoring programs; technology career training projects for incarcerated adults and juveniles; and demonstration field experiments to test a parole reentry model. The remaining $5.4 million supports two awards for evaluation activities and training and technical assistance for Second Chance Act grantees and the reentry field in general.
OJJDP awarded more than $9.7 million in Second Chance Act Juvenile Reentry Program grant awards to reduce recidivism and assist youth in successfully returning to their communities after secure confinement. This includes $176,000 to assist four jurisdictions in planning a juvenile reentry program, and $6,573,177 for ten jurisdictions to implement evidence-based reentry programs that provide a comprehensive range of services for juveniles up to 18 years of age. This also includes $2,977,252 for five community programs to reduce long-term alcohol and other substance abuse among youth in secure confinement facilities and to increase drug treatment and mental health services for these youth.
“Too many young people caught up in the juvenile justice system fail to return to school, find a job, or live healthy, drug-free lives after being confined,” said OJJDP Administrator Robert L. Listenbee. “These grants will help them find a path out of crime and delinquency and begin to make positive contributions to their communities.”
OJP will also continue to provide reentry resources to the field through the National Reentry Resource Center (NRRC), through a cooperative agreement with the Council of State Governments (CSG) Justice Center, administered by BJA. The NRRC offers training and technical assistance for SCA grantees, provides distance learning and other reentry resources to the field, and administers the “What Works in Reentry Clearinghouse.” NRRC collaborates with other federal agencies focused on reentry activities and with the Attorney General’s Federal Interagency Reentry Council and its staff working group.
For a list of all OJP grant awards, please visit: www.ojp.gov/funding/funding.htm.
For more information on the NRRC, please visit: www.nationalreentryresourcecenter.org.
For more information on the Federal Reentry Council, please visit: csgjusticecenter.org/nrrc/projects/firc/.
The Office of Justice Programs, headed by Assistant Attorney General Karol V. Mason, provides federal leadership in developing the nation’s capacity to prevent and control crime, administer justice, and assist victims. OJP has six components: the Bureau of Justice Assistance; the Bureau of Justice Statistics; the National Institute of Justice; the Office of Juvenile Justice and Delinquency Prevention; the Office for Victims of Crime; and the Office of Sex Offender Sentencing, Monitoring, Apprehending, Registering, and Tracking.
Jury Unanimously Finds Hood River Man Guilty of Defrauding Customers Who Purchased Dietary Supplements and Exercise MachinesRead the Press Release
Defendant falsely represented himself as a naturopathic doctorPORTLAND, Ore. – A civil jury unanimously concluded Wednesday afternoon that James Cole, 66, of Hood River, Oregon, operated schemes to defraud his customers in the operation of two separate but related businesses. The first business, Maxam Neutraceutics, manufactures and sells so-called dietary supplements in the form of spray bottles, which were advertised as being effective in treating a variety of incurable medical conditions, including autism, which was Maxam’s primary target market. The second business, TurboSonic USA, sold electronic vibration machines manufactured in Korea and designed to be used for easy exercise. The Maxam products retailed for approximately $125 per bottle, and the TurboSonic machines retailed for between $12,000 and $16,000.
The jury deliberated for approximately four hours following the six-day trial. Evidence at trial revealed that Cole’s scheme in relation to the sale of the Maxam sprays included: falsely representing that the products were created and manufactured by a Harvard chemist, when in fact, they were made by a twice-convicted federal felon and self-taught chemist in the Boston area operating in unknown labs under unknown conditions; failing to disclose that the products contained rare bacteria not listed on the labels and believed by the government’s expert to have been intentionally put into the products by the felon manufacturer; and failing to reveal that Cole had never conducted clinical trials of the products, despite advertising them as “clinically proven” to improve conditions such as autism, Alzheimer’s, Parkinson’s, and multiple sclerosis.
In addition, the customer service representatives Cole hired to respond to customer inquiries – none of whom had any medical training, and all of whom were trained solely by reviewing Maxam’s own marketing literature and speaking to Cole and to the felon chemist – were instructed to provide medical-sounding advice to customers who called the office.
Regarding the TurboSonic machines, the evidence revealed that Cole marketed the machines as FDA-Approved medical devices that were capable of treating over 100 medical conditions if the machine’s dials were turned to particular settings, including cancer and HIV. Much of the company’s marketing efforts were devoted to placing the machines in the offices of chiropractors and physical therapists. Cole’s office manager compiled an alphabetized list of diseases and their corresponding purported treatment settings into a list of “protocols” which Cole’s company distributed with the machines and instructed chiropractors to place on the walls of their offices for patients to use. The machines were then advertised by Cole to have “researched and proven medical benefits” for the treatment of conditions ranging from anemia to vertigo, when in reality, the only research conducted on the machines confirmed that they were meant to be used as exercise machines. In addition, the machines were not FDA-Approved, as the FDA considered the machines to be purely exercise machines and no different from a treadmill, and that the list of treatment protocols were unsupported by any medical research.
The case was filed as a civil asset forfeiture case, and by returning a verdict in favor of the United States, the government is now entitled to keep over $700,000 in assets that were seized from Cole’s home and businesses in April of 2011. The assets included the full balance of three bank accounts held by Cole’s businesses, Cole’s interest in a condominium located in California, and approximately 320 ounces worth of gold found in Cole’s safe. The jury concluded that those assets were traceable to the proceeds of Cole’s frauds. The evidence at trial revealed that Cole’s two businesses grossed almost $21 million between 2005 and mid-2011.
Two additional cases are still pending against Cole. In September of this year, a Portland grand jury indicted him on five counts of subscribing to false tax returns and other tax-related documents. Also in September, the Consumer Protection Branch of the U.S. Department of Justice filed a complaint against Cole, his corporation, and his office manager seeking to permanently shut down the Maxam business for failing to comply with multiple provisions of the Federal Food, Drug, and Cosmetic Act.
This case was investigated by the U.S. Food and Drug Administration Office of Criminal Investigations, and the Internal Revenue Service, Criminal Investigation. Assistant U.S. Attorneys Katie Lorenz and Allan Garten filed the civil action and represented the United States at trial.
Judge Sentences Bucks County Investment Advisor to Four Years for Embezzlement SchemeRead the Press Release
PHILADELPHIA - David Rothman, 50, of Richboro, Pennsylvania, was sentenced yesterday to 48 months in prison for wire fraud and money laundering. Rothman was the Vice-President of Rothman Securities, Inc. (“RSI”), an investment brokerage firm in Southampton, Pennsylvania. Between January 2007 and February 2012, Rothman embezzled from a 92 year-old RSI client and several beneficial trusts for which he was a named trustee. He used the money for personal expenses and to pay his family, his friends, and other clients to whom he provided falsely inflated investment statements. Rothman created bogus documents and cover stories to mask his fraud and lull victims and clients into a false sense of security. Rothman, a graduate of Penn State University whose annual salary was $600,000 in 2011, pleaded guilty to the two counts on March 26, 2013.
In addition to the prison term, U.S. District Court Judge Berle M. Schiller ordered three years of supervised release and restitution of $505,831.09.
The case was investigated by the Federal Bureau of Investigation and the Securities and Exchange Commission. It was prosecuted by Assistant United States Attorney Vineet Gauri.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Jewelry Store Owner Sentenced for Stolen Goods ChargeRead the Press Release
LAS VEGAS, Nev. – A Las Vegas jewelry store owner was sentenced today to two years in prison, three years of supervised release, and ordered to pay $196,000 in restitution for purchasing and selling luxury jewelry that he knew was stolen, announced Daniel G. Bogden, United States Attorney for the District of Nevada.
Nabil (”Bill”) Sakkab, 39, of Las Vegas, was sentenced by U.S. District Judge James C. Mahan. Sakkab pleaded guilty in July to two counts of receipt and sale of stolen goods. Sakkab was permitted to self-report to federal prison no later than Feb. 14, 2014.
“This case was prosecuted as part of a federal and local law enforcement effort to combat organized retail theft,” said U.S. Attorney Bogden. “Organized retail theft causes billions of dollars in losses to retailers annually. These losses are usually passed on to the consumers in the form of higher prices on goods, and states lose the tax revenue that would otherwise be generated from the sale of these goods by legitimate dealers.”
The case was investigated by the FBI and the Las Vegas Metropolitan Police Department Special Investigations Section. The case was prosecuted by Assistant United States Attorney Christina M. Brown.
According to the court records, Sakkab was a partial owner of Red Rock Jewelers in Las Vegas. From about Sept, 20, 2011, to Feb. 3, 2012, Sakkab acted as a fence for stolen property by purchasing and selling luxury jewelry stolen by co-conspirator Jeffrey Cochran, who also pleaded guilty to stolen goods charges and is scheduled to be sentenced on Nov. 25, 2013. Most of the stolen items sold by Sakkab were high priced Rolex watches which had been stolen in other states and transported to Las Vegas. Sakkab resold the stolen jewelry at Red Rock Jewelers, and also sold it privately to third parties for personal gain. The amount of restitution ordered was reduced due to law enforcement’s successful recovery of one of the stolen watches.JASE SentencingRead the Press Release
BATON ROUGE, LA – Acting United States Attorney Walt Green announced today that DR. ANTHONY STEPHEN JASE, 44, of New Orleans, Louisiana, was sentenced to 15 months in prison and ordered to pay $360,293 in restitution for his convictions on health care fraud.
On October 21, 2011, JASE pled guilty to two counts of health care fraud before Judge James J. Brady, for involvement in two nearly identical schemes to defraud Medicare. The first conviction arose from JASE’s association with a Baton Rouge-based company known as Lobdale Medical Services, which was owned by Beatrice and Young Anyanwu. As part of the scheme to defraud, Sandra Parkman Thompson and others procured the names and personal information of Medicare beneficiaries in and around the New Orleans area and delivered these names to JASE, who then signed false and fraudulent prescriptions for power wheelchairs and other durable medical equipment for which the Medicare beneficiaries had no medical need. Thompson subsequently delivered the fraudulent prescriptions to the Anyanwus, who submitted claims to Medicare through Lobdale Medical Services for the medically unnecessary equipment. The total billings to Medicare by Lobdale Medicare Services exceeded $1,000,000. The second conviction arose from JASE’s involvement with a New Orleans-based durable medical equipment company known as Psalms 23-DME, which also paid Thompson to deliver prescriptions for wheelchairs and other durable medical equipment. JASE wrote prescriptions for beneficiaries whom he had never seen and who had no need for the equipment that was prescribed them. As a result, Psalms 23-DME billed Medicare for claims totaling $230,963 using JASE’s provider number.
Beatrice and Young Anyanwu pled guilty to the health care fraud scheme to defraud Medicare as well as the illegal remuneration conspiracy on August 14, 2012, and were sentenced on February 1, 2013. Sandra Parkman Thompson was convicted after a jury trial on August 20, 2012, and was sentenced on March 14, 2013.
Acting U.S. Attorney Walt Green stated, “This case is a great example of how federal and state law enforcement work together on a daily basis to stamp out health care fraud by doctors and others who abuse our health care system in our state.”
FBI Special Agent in Charge Michael Anderson stated, "Addressing betrayals of the public's trust in the health care system by physicians continues to be the FBI's top priority in its ongoing fight against health care fraud."
The investigation of JASE was conducted by the Department of Health and Human Services, Office of Inspector General, the Federal Bureau of Investigation, and the Louisiana Department of Justice. The case was prosecuted by Assistant United States Attorneys Catherine M. Maraist and René I. Salomon of the Middle District of Louisiana and Patrice Sullivan of the Eastern District of Louisiana.
Indictment Unsealed Charging Moore Resident with Disaster Benefits Fraud Following May TornadoRead the Press Release
Oklahoma City, Oklahoma – A federal grand jury indictment was unsealed today charging BLAKE LYNN SELF, 18, of Moore, Oklahoma, with committing disaster benefits fraud in connection with a claim for benefits following the May 2013 tornados in Moore, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma.
Under the Robert T. Stafford Disaster Relief and Emergency Assistance Act, the May 20, 2013, tornado affecting Cleveland County was declared a major disaster and the payment of disaster benefits was authorized. The indictment alleges that on June 14, 2013, Self submitted a false claim for monetary benefits to be paid by Federal Emergency Management Agency (FEMA). Specifically, it is alleged that Self claimed to a FEMA inspector that his primary residence at the time of the May 20, 2013, tornado, was 916 S.W. 14th Street, in Moore, when in fact it was not his residence at that time.
If convicted, Self faces up to 30 years in prison, a $250,000 fine, and payment of restitution. The public is reminded that the indictment is merely an accusation and that the defendant is presumed innocent unless and until proven guilty. Reference is made to the indictment for further information.
This case is the result of an investigation by the U.S. Department of Homeland Security Office of Inspector General and is being prosecuted by Assistant U.S. Attorney Amanda Maxfield Green.
The public may report suspected disaster benefits fraud by contacting the Department of Homeland Security Office of Inspector General (www.oig.dhs.gov or by calling toll free 1-800-323-8603) or by calling the Disaster Fraud Hotline at 1-866-720-5721.
Immigration Charges Filed Against Another Bucks County Landscaping Company ExecutiveRead the Press Release
Charles Zeiser, 68, of North Carolina, was charged today by Information with five counts of wire fraud, announced United States Attorney Zane David Memeger. Zeiser was the controller for Land Tech, Enterprises, a landscaping company in Bucks County. He aided and abetted a fraud scheme in which company employees applied for and fraudulently collected Pennsylvania unemployment compensation while continuing to work full-time for the company. The Commonwealth of Pennsylvania was defrauded of at least $43,589 from late 2010 to the spring of 2011.
If convicted, the defendant faces a maximum possible sentence of 100 years of imprisonment, three years of supervised release, a $1,250,000 fine, and a $500 special assessment.
The case was investigated by United States Department of Labor – Office of Inspector General, the Department of State, and U.S. Immigration and Customs Enforcement Homeland Security Investigations. It is being prosecuted by Assistant United States Attorney Laurie Magid.
Click here to view the indictment
An Indictment or Information is an accusation. A defendant is presumed innocent unless and until proven guilty.UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Heroin Trafficker Sentenced to More Than 12 Years in Federal PrisonRead the Press Release
Deirdre M. Daly, Acting United States Attorney for the District of Connecticut, today announced that ANTOVANY ACOSTA, also known as “Tony,” 33, of New Haven, was sentenced yesterday by U.S. District Judge Vanessa L. Bryant in Hartford to 150 months of imprisonment, followed by five years of supervised release, for trafficking heroin.
According to court documents and statements made in court, in early 2011, the Drug Enforcement Administration in New Haven received information from the Connecticut State Police that ACOSTA was selling substantial quantities of heroin from his residence at 28 Maltby Place in New Haven. Following a series of controlled purchases of heroin from ACOSTA, the DEA New Haven Task Force initiated a court-authorized wiretap investigation. The investigation determined that Adrian Pinzon-Gallardo, also known as “The Mexican,” was supplying large quantities of heroin and cocaine to several individuals in Connecticut, including ACOSTA.
During the course of the wiretap, ACOSTA was intercepted telling an associate that he takes “like 250 grams (of heroin) every 10 days” from a “Mexican connection,” a reference to Pinzon-Gallardo. Other individuals also supplied ACOSTA with large quantities of heroin.
On September 2, 2011, DEA personnel from Connecticut and Rhode Island, with the assistance of the Connecticut State Police, tracked Pinzon-Gallardo’s Jeep as it traveled from Connecticut to Providence where it was believed from wire intercepts that Pinzon-Gallardo intended to conduct a narcotics transaction. In Providence, the surveillance team observed Pinzon-Gallardo and an associate meet and then travel to a storage facility in Pawtucket, R.I. At the facility, Pinzon-Gallardo and his associate entered an open storage unit with several other individuals and closed the door. A short time later, Pinzon-Gallardo’s associate returned to the vehicle, retrieved a black backpack and walked back to the storage unit. Pinzon-Gallardo and his associate then returned to their vehicle and departed. After driving to Boston, Pinzon-Gallardo and his associate drove a circuitous route back to Connecticut when their vehicle was stopped by Connecticut State Police on Interstate 84 after it crossed the Connecticut border. A search of the car revealed three bricks of heroin, weighing a total of approximately 736 grams of heroin, and approximately $14,000 in cash.
A subsequent search of the storage unit in Rhode Island revealed approximately eight kilograms of heroin, including three kilograms that were contained within a black backpack similar to the one that Pinzon-Gallardo’s associate had been seen carrying into the facility, approximately two kilograms of cocaine and approximately $35,000 in cash.
ACOSTA has been detained since his arrest on November 16, 2011. On June 13, 2013, following a six-day trial, a jury found ACOSTA guilty of one count of conspiracy to distribute, and to possess with intent to distribute, one kilogram or more of heroin, and three counts of possession with the intent to distribute and distribution of heroin.
ACOSTA, a citizen of the Dominican Republic, faces immigration proceedings after he completes his prison term.
Pinzon Gallardo pleaded guilty to one count of conspiracy to distribute, and to possess with intent to distribute, one kilogram or more of heroin and, on April 4, 2013, he was sentenced to 135 months of imprisonment.
This matter was investigated by the DEA New Haven Task Force, which includes participants from the New Haven, Hamden, West Haven, North Haven, Branford, Ansonia and Meriden Police Departments, and the United States Marshals Service. The New Britain Police Department and the Connecticut State Police substantially assisted the investigation.
This case is being prosecuted by Assistant United States Attorney S. Dave Vatti.
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[email protected]Grand Jury Returns IndictmentsRead the Press Release
MINNEAPOLIS—A federal grand jury in the District of Minnesota, sitting in Minneapolis, returned the following indictments yesterday. You are advised that a charge is merely an accusation, and that a defendant is presumed innocent until and unless proven guilty. Any sentence is determined by a federal district judge.Mexican citizen charged with illegal re-entry into U.S.
Arnoldo Aguirre-Vasquez, age 44, a citizen of Mexico found in Renville, Minnesota, is charged with illegally re-entering the United States after previously being deported. If convicted, Aguirre-Vasquez faces a potential maximum penalty of 20 years in prison. This case is the result of an investigation by the U.S. Immigration and Customs Enforcement’s Enforcement and Removal Operations. It is being prosecuted by Assistant U.S. Attorney Manda M. Sertich.Kentucky man charged with robbing Eagle Lake bank
George Richard Gaunt, age 25, of Louisville, Kentucky, was charged with one count of bank robbery.
If convicted, Gaunt faces a potential maximum penalty of 25 years in prison. This case is the result of an investigation by the Federal Bureau of Investigation, the Eagle Lake Police Department and the Blue Earth County Sheriff’s Office. It is being prosecuted by Assistant U.S. Attorney Katharine T. Buzicky.Rochester felon charged with gun crime
James Kent Johnson, age 34, of Rochester, was charged with one count of being a felon in possession of a firearm. Since Johnson’s prior felony convictions were for violent crimes, he is subject to the federal armed career criminal statute in the current federal case. That statute mandates a minimum sentence of 15 years in federal prison upon conviction. This case is the result of an investigation by the Olmsted County Sheriff’s Office and the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives. It is being prosecuted by Assistant U.S. Attorney Thomas M. Hollenhorst.
Gallup Man Sentenced to Ten Years in Federal Prison for Second Degree Murder ConvictionRead the Press Release
ALBUQUERQUE – Thomas Benally, 53, an enrolled member of the Navajo Nation who resides in Gallup, N.M., was sentenced to ten years in federal prison followed by two years of supervised release for his second degree murder conviction. Benally’s co-defendant, Luke Spencer, 48, a Navajo man who also resides in Gallup, was sentenced to 37 months in federal prison followed by two years of supervised release for his involuntary manslaughter conviction. The two men were ordered to pay $3,442.34 in restitution to cover funeral costs for the victim of their crimes.
Benally and Spencer were indicted in March 2012 in an indictment charging Benally with second degree murder and Spencer with aiding and abetting second degree murder. According to the indictment, Benally, aided by Spencer, killed a man while driving under the influence of alcohol on the Navajo Indian Reservation between Oct. 1, 2010 and Oct. 2, 2010.
In June 2013, Benally entered a guilty plea to a second degree murder charge and admitted that on the night of Oct. 1, 2010 or the early hours of Oct. 2, 2010, he drove Spencer’s truck while severely intoxicated. He further admitted that, while backing up, he ran over a 71-year-old Navajo man. Benally also admitted that he and Spencer, who was in the passenger’s seat, drove away in the truck without making any effort to check on the victim’s condition or calling the authorities to report the accident. The victim died of injuries he sustained and his remains were found by a passerby on Oct. 7, 2010.
In May 2013, Spencer pleaded guilty to a felony information charging him with involuntary manslaughter and admitted that he permitted Benally to drive his truck while intoxicated.
This case was prosecuted by Assistant U.S. Attorneys Jennifer M. Rozzoni and Jack E. Burkhead based on an investigation by the Gallup office of the FBI and the Crownpoint office of the Navajo Nation Division of Public Safety.
Franklin Sentenced to 76 Months for Receiving BribesRead the Press Release
OXFORD, Miss. - Felicia C. Adams, United States Attorney for the Northern District of Mississippi, Mississippi State Auditor Stacey Pickering, and Yessyka Santana, Special Agent in Charge of the U.S. Department of Education Office of Inspector General's Southeastern Regional Office announced that:
Harvey Franklin, 57, of Monroe, Georgia, was sentenced yesterday by United States District Judge Sharion Aycock in Aberdeen, Mississippi, to 76 months imprisonment for receiving bribes and kickbacks from Edna Cochran Goble and embezzling federal funds from the Department of Education in connection with a contract for reading services between the Greenville, Mississippi, Public School District and Edna Goble’s company, Teach Them to Read, Inc. d/b/a Early Detection Necessary Action. In addition, Franklin was ordered to pay $1,201,247 in restitution to the Department of Education, including an immediate payment of $75,000, 3 years supervised release, 300 hours of community service and a $300 special assessment.
Franklin pled guilty on August 2, 2012, to a three count Information charging him with conspiracy to receive bribes and kickbacks in violation of 18 U.S.C. § 371; receiving bribes and kickbacks in connection with federal program funds in violation of 18 U.S.C. § 666(a)(1)(B); and embezzlement of federal funds in violation of 18 U.S.C. §641.
Edna Goble pled guilty on October 7, 2013, to Count One of an Indictment charging her with Conspiracy to pay bribes and kickbacks in connection with federal program funds in violation of 18 U.S.C. §371. No sentencing date has been set for Goble.
This case was investigated by Special Agents of the Department of Education, Office of Inspector General and the Office of the State Auditor for the State of Mississippi and was prosecuted by Assistant United States Attorneys Clay Dabbs and Clay Joyner.
Founder of Investment Advisory Firm Pleads Guilty in Manhattan Federal Court to Mail Fraud and Conspiracy to Obstruct Justice in Connection with Attempt to Defraud NBA Players UnionRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that JOSEPH LOMBARDO, the founder and managing director of Prim Capital Corporation (“Prim”), pled guilty in Manhattan federal court to mail fraud and conspiracy to obstruct a grand jury investigation in connection with an attempt to defraud the National Basketball Players Association (“NBPA”) through the use of a fraudulent retention contract. LOMBARDO, who was arrested in April 2013, along with Carolyn Kaufman, a principal at Prim, pled guilty today before U.S. District Judge Jesse M. Furman.
Manhattan U.S. Attorney Preet Bharara said: “Joseph Lombardo engaged in an elaborate fraud involving the creation of a fake contract with the professional basketball players who had entrusted him to manage their union’s assets. He then lied to a federal grand jury about his illegal actions and told others to do the same. His guilty plea today shows that such fraud and obstruction will not go unpunished.”
According to the Complaint, Indictment, previously filed documents, and today’s plea proceeding:
Prim was founded by LOMBARDO. From 2001 until 2013, Prim was the primary outside investment advisory firm entrusted with the NBPA’s investments and finances. In that capacity, Prim performed various services for the NBPA, including assisting with the management of up to $250 million of the NBPA’s assets, reviewing the investments of individual NBA players, and conducting financial seminars for NBA players.
In May of 2012, as part of a U.S. Department of Labor (“DOL”) investigation, Prim was served with a grand jury subpoena requesting, among other things, copies of all agreements between Prim and the NBPA. In response, Prim produced a copy of a 2005 contract between the NBPA and Prim, under which Prim’s fee was $350,000 per year. The 2005 contract was signed by the Executive Director of the NBPA, the Treasurer of the NBPA, and LOMBARDO, and was renewable annually upon agreement of the parties. That was the only contract that Prim produced at the time.
Several months later, in January of 2013, after Prim learned that a law firm’s review of the NBPA was going to be made public in the near future, Prim then produced to the DOL a previously undisclosed contract with the NBPA (the “Purported 2011 Contract”). Prim’s fee under this contract was $602,000 per year for a five-year term, for a total of $3,010,000. The Purported 2011 Contract also contained a provision indicating that it could not be cancelled for any reason by the NBPA. The Purported 2011 Contract was purportedly signed in March 2011 by LOMBARDO, Gary Hall, the former NBPA General Counsel, and one other NBPA employee.
An investigation revealed that the signature of Hall was not authentic, and that the Purported 2011 Contract was actually created at Prim months after the death of Gary Hall. The investigation also revealed that LOMBARDO arranged for the creation of a signature stamp capable of stamping the signature “Gary A. Hall,” and used the stamp to falsify Hall’s signature months after his death.
In addition, the investigation revealed that LOMBARDO and Kaufman had agreed and attempted to obstruct a grand jury investigation. During the course of the investigation, both LOMBARDO and Kaufman appeared before the grand jury and provided false and misleading testimony. Kaufman testified, among other things, that she had not spoken with anyone regarding her testimony prior to testifying. However, in a recorded conversation prior to appearing before the grand jury, LOMBARDO gave her specific instructions on how to answer questions before the grand jury, and said that his “life is in [her] hands.” In another recorded conversation, LOMBARDO instructed another individual that, if he provided certain false information to the grand jury about the creation of the contract,“[w]e’re home free.” In a third recorded conversation, LOMBARDO instructed another individual to provide false information and said, “It’s important that we didn’t doctor this document up, okay?”
LOMBARDO, 72, of Gates Mills, Ohio, pled guilty to one count of mail fraud and one count of conspiracy to obstruct justice. He faces a maximum sentence of 20 years in prison on the mail fraud count, a maximum sentence of five years in prison on the conspiracy to obstruct justice count, and a maximum fine of $250,000, or twice the gross gain or gross loss from the offense, on each count. LOMBARDO is scheduled to be sentenced by Judge Furman on March 20, 2014.
Kaufman has been charged in a superseding indictment with one count of conspiracy to obstruct justice, one count of obstruction of justice, and one count of perjury for her alleged role in the agreement to obstruct, and obstruction of, the grand jury investigation. She is scheduled to stand trial beginning on December 2, 2013, before Judge Furman.
Mr. Bharara praised the outstanding investigative work of the U.S. Department of Labor’s Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, and the U.S. Department of Labor’s Office of Labor-Management Standards. Mr. Bharara added that the investigation is continuing.
This case is being handled by the Public Corruption Unit of the U.S. Attorney’s Office. Assistant United States Attorneys Daniel C. Richenthal and Paul M. Krieger are in charge of the prosecution.
The pending charges against Kaufman are merely accusations, and she is presumed innocent unless and until proven guilty.
Lombardo, Joseph and Carolyn Kaufman Indictment 13 Cr 411.
Former Teller Charged with Bank TheftRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced that a 35-year-old Scranton man was charged today with stealing money from a bank where he worked as a teller.
According to United States Attorney Peter J. Smith, his office filed a criminal Information against Gary Fletcher, charging him with the theft of more than $8,000 from Fidelity Deposit and Discount Bank.
The charge against Fletcher resulted from an investigation by the Federal Bureau of Investigation.
The case is being prosecuted by Assistant U.S. Attorney Francis P. Sempa.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilty is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
In this case, the maximum penalty under the federal statute is 10 years’ imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
Former Portfolio Manager for New York Hedge Fund Pleads Guilty to Multi-Million Dollar Insider Trading ConspiracyRead the Press Release
ATLANTA – Mark Megalli pleaded guilty on Thursday to participating in a multi-million dollar insider trading conspiracy involving Carter’s, Inc. stock.
“This conviction marks a tragic fall for a defendant who worked at top investment, law, and consulting firms and rose to a prominent position at a multi-billion dollar New York hedge fund,” said United States Attorney Sally Quillian Yates. “But, there is one set of rules, and they apply to everyone. Rigging the system by trading on inside information undermines the public’s confidence in our financial system – and it’s a violation of the law.”
Mark F. Giuliano, Special Agent in Charge, FBI Atlanta Field Office, stated: “Laws are in place to regulate investment firms and individual investors and to ensure that a level playing field is maintained for those engaging our financial markets. This case illustrates clearly why those laws are in place and the hard consequences for those that choose to disregard them. Today’s guilty plea of Mr. Megalli will begin the process of holding him accountable from his criminal actions involving Carter’s, Inc. stock trades.”
According to United States Attorney Yates, the charges and other information presented in court: Megalli was employed as the portfolio manager for the consumer sector at Level Global Investors, LP (“Level Global”), a multi-billion dollar hedge fund headquartered in New York, NY, between August 2009 and its dissolution in February 2011. Megalli was responsible for managing and making trading decisions on behalf of a multi-million dollar portfolio of consumer industry stocks. Megalli had previously obtained undergraduate and JD/MBA degrees from one of the country’s top universities, passed the New York bar and the Chartered Financial Analyst (“CFA”) examinations, and worked at top investment, consulting, and law firms.
In September 2009, Megalli caused Level Global to hire Eric M. Martin as a paid consultant to Level Global to advise Megalli on consumer sector stocks for $25,000 per quarter. Until March 2009, Martin had been employed as the Vice President of Investor Relations for Atlanta-based Carter’s, Inc., the major children’s clothing company. Carter’s is a public company registered with the U.S. Securities & Exchange Commission (“SEC”) and its common stock is listed on the New York Stock Exchange.
Beginning in mid-September 2009 and continuing through the end of July 2010, Martin provided Megalli with inside information about Carter’s quarterly and annual financial results and other events in advance of the public announcement of the information. Megalli in turn caused Level Global to execute transactions in Carter’s securities between September 2009 and July 2010, based in whole or in part on the inside information received from Martin, earning illegal profits and illegally avoiding losses for Level Global. As part of his guilty plea, Megalli agreed that he is responsible for illegal insider trading gains and losses avoided for Level Global between $2.5 million and $7 million.Martin obtained the inside information from a Carter’s executive, Richard T. Posey, who was employed as the company’s Vice President of Operations at that time. Martin also provided inside information to several other individuals and investment firms for which he had been hired as an outside consultant, directly and through an expert networking firm.
By way of example, Posey tipped Martin, and Martin tipped Megalli and others, in advance of Carter’s October 27, 2009 announcement that it was conducting an internal investigation into accounting irregularities and would be delaying its earnings release for the third quarter of 2009. After business hours on October 22, 2009, Posey and Martin had an in-person meeting during which Posey disclosed inside information about the investigation and earnings delay to Martin. As soon as the meeting ended, Martin placed a telephone call to a former Wall Street equity research analyst previously identified as “Cooperator Number 1,” during which Martin passed on the information that he had received from Posey. Martin asked Cooperator Number 1 to wait to trade on the information until Martin could warn his clients. The next morning, at 9:42 a.m. on Friday, October 23, 2009, Martin sold his entire position in Carter’s stock, over 35,000 shares valued at approximately $1 million. Later that morning, at 11:23 a.m., Martin placed a 7-minute call to Megalli, during which Martin disclosed inside information about the investigation to Megalli. Less than two minutes into the call, Megalli sent an instant message to Level Global’s head of trading in which Megalli ordered the liquidation of Level Global’s entire position in Carter’s stock, 300,000 shares valued at nearly $9 million.
The next trading day, Monday, October 26th, Cooperator Number 1 placed a 12-minute call to Martin. Immediately after the call ended, Cooperator Number 1 sold his entire position in Carter’s stock -- 15,000 shares valued at over $400,000 -- and bought November 30th put options, thereby betting on Carter’s stock price to decline significantly. The next morning, Tuesday, October 27th, Carter’s shocked the market with the news of its internal investigation and earnings delay, and its stock price fell over 20% in one day. The internal investigation ultimately resulted in a multi-year financial restatement by Carter’s, criminal indictments of two of its former top executives for securities fraud and related offenses, and three SEC enforcement actions.
Megalli, 41, of New York, NY, pleaded guilty to one count of conspiracy to commit securities fraud. The charge to which he pleaded guilty carries a maximum sentence of five years in prison and a fine of up to $250,000. In determining the actual sentence, the Court will consider the United States Sentencing Guidelines, which are not binding but provide appropriate sentencing ranges for most offenders.
Megalli is the third individual to be convicted in a criminal investigation into insider trading in Carter’s stock, and the fifth person overall to be criminally charged in connection with the accounting fraud and insider trading investigations arising out of Carter’s October 27, 2009 earnings delay and multi-year financial restatement.
Martin, 43, of Roswell, Georgia, was indicted on November 7, 2012, for conspiracy, securities fraud, and wire fraud in connection with his participation in an insider trading conspiracy and for his own insider trading in Carter’s stock between 2005 and 2009, while Martin was still employed as Carter’s head of investor relations. The conspiracy charge alleged that Martin repeatedly provided inside information about Carter’s to Cooperator Number 1 ahead of the company’s earnings releases and other events between 2005 and 2009. This included tipping Cooperator Number 1 about Carter’s May 2005 acquisition of competitor Oshkosh B’Gosh before the news became public. Martin pleaded guilty to the conspiracy charge on December 8, 2012.
Posey, 48, of Duluth, Ga., was charged by Criminal Information and pleaded guilty to conspiracy to commit securities fraud on June 19, 2012. The conspiracy charge against Posey related to his disclosure of insider information to Martin ahead of quarterly and annual earnings releases and other events between early 2009 and July 2010, after Martin’s separation from Carter’s.Sentencing for Megalli, Martin, and Posey has not yet been scheduled.
The case is being investigated by the Federal Bureau of Investigation.
Assistant United States Attorneys David M. Chaiken and Stephen H. McClain are prosecuting the case.
The Atlanta Regional Office of the SEC has conducted a separate investigation into potential civil violations of the U.S. securities laws relating to insider trading in Carter’s stock. In connection with its investigation, the SEC has filed civil enforcement actions against multiple individuals.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is http://www.justice.gov/usao/gan/.