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Thursday 7 November 2013
Vegas Clay Calder Sentenced in U.S. District CourtRead the Press Release
The United States Attorney's Office announced that during a federal court session in Helena, on November 6, 2013, before Senior U.S. District Judge Charles C. Lovell, VEGAS CLAY CALDER, a 38-year-old resident of Helena, was sentenced to a term of:
- ison: 100 months
- ecial Assessment: $100
- ne: $5,000
- pervised Release: 3 years
CALDER was sentenced in connection with his guilty plea to being a felon-in-possession of a firearm.
In an Offer of Proof filed by Assistant U.S. Attorney Paulette L. Stewart, the government stated it would have proved at trial the following:
On September 1, 2005, CALDER was convicted of criminal possession of dangerous drugs and conspiracy to possess with the intent to distribute methamphetamine and was therefore prohibited from possessing firearms.
On November 2, 2011, Montana Probation and Parole conducted a probation search of CALDER(s Helena residence because CALDER failed to report as required on October 26, 2011. They had received information that he was living in Helena and that he was in possession of several firearms.
During the probation search, officers located a safe in CALDER's bedroom closet. The safe contained three loaded firearms with obliterated serial numbers, $7,700 cash, and drug paraphernalia. The firearms were a Rock Island Armory .45 caliber pistol, a Charter Arms .38 caliber revolver, and a Ruger 9mm pistol.
Because there is no parole in the federal system, the "truth in sentencing" guidelines mandate that he will likely serve all of the time imposed by the court. In the federal system, he does have the opportunity to earn a sentence reduction for "good behavior." However, this reduction will not exceed 15% of the overall sentence.
The investigation was a cooperative effort between the Federal Bureau of Investigation, the Montana Probation and Parole, the Missouri River Drug Task Force, the Helena Police Department, the Lewis and Clark Sheriff's Office, and the Montana Division of Criminal Investigation.
U.S. Attorney’s Office Announces Award RecipientsRead the Press Release
New Employees Also Recognized at Courthouse Ceremony
Baltimore, Maryland - Twelve employees of the United States Attorney’s Office and four law enforcement officers were honored today with the Office’s most prestigious awards. At a ceremony held to announce the awards this morning at the U.S. Courthouse in Baltimore, the United States Attorney also welcomed new Assistant U.S. Attorneys and other employees who have joined the Office since last year.
Former United States Attorney, Maryland Court of Appeals Judge Lynne A. Battaglia served as the keynote speaker for the event. Judge Battaglia served as U.S. Attorney from 1993 to 2001.
“The recipients of these awards upheld the highest ethical and professional standards while pursuing justice with exceptional skill and dedication,” commented U.S. Attorney Rod J. Rosenstein.
“The Maryland U.S. Attorney’s Office has earned a reputation for excellence, integrity and achievement over more than two centuries,” U.S. Attorney Rosenstein added. “We are counting on our new employees to live up to that reputation as you work to promote the rule of law, punish criminals, deter crime and protect government property.”
Annual Awards
The following awards were announced for accomplishments over the past year:
Gary Jordan Award
Recipient: Joyce K. McDonaldGary P. Jordan served with distinction for many years as an Assistant U.S. Attorney, as First Assistant from March 29, 1987 until his death on October 25, 1996, and as interim U.S. Attorney in 1993. This is an honorary award presented annually to an Assistant U.S. Attorney for exemplary performance that demonstrates the highest traditions of the office: integrity, ingenuity, dedication to public service and fairness.
Barnet D. Skolnik Award
Recipients: Robert R. Harding
Christopher J. RomanoBarnet D. (Barney) Skolnik was an Assistant U.S. Attorney who led teams that prosecuted numerous white collar criminals and corrupt public officials in the 1970s, including Vice President Spiro T. Agnew. This is an honorary award presented annually to one or more Assistant U.S. Attorneys who demonstrate outstanding professionalism, determination and creativity in a case of unusual public significance.
Employee of the Year Award
Recipient: Kathleen RosierThe Employee of the Year Award recognizes sustained superior performance and outstanding achievements by a non-attorney employee. The award also recognizes the recipient's professionalism, dedication and comprehensive knowledge in their area of expertise.
Pete Twardowicz Award
Recipients: Michael Aiosa
Richard Henry
Daniel Salak
Dougald ThrutchleyThe Pete Twardowicz Award was established in honor of Eugene P. (Pete) Twardowicz, who rendered many years of outstanding service to the U.S. Attorney’s Office as an IRS criminal investigator and a Special Investigator for this Office. This award recognizes law enforcement agents or officers for outstanding cooperation and achievement while working with the U.S. Attorney’s Office on a significant case.
Excellence in Civil Advocacy
Recipient: Joseph R. BaldwinThe U.S. Attorney’s Award for Excellence in Civil Advocacy, established in 2007, is presented annually to an Assistant U.S. Attorney for outstanding advocacy in civil litigation.
Excellence in Prosecution of Fraud
Recipients: Jefferson M. Gray
Leo J. WiseThe U.S. Attorney’s Award for Excellence in Prosecution of Fraud, established in 2007, is presented annually to an Assistant U.S. Attorney for outstanding work in prosecuting fraud.
Excellence in Prosecution of Violent Crime
Recipient: Stefan D. Cassella
Peter M. NothsteinThe U.S. Attorney’s Award for Excellence in Prosecution of Violent Crime, established in 2007, is presented annually an Assistant U.S. Attorney for outstanding work in prosecuting violent crime.
Excellence in Prosecution of Organized Crime
Recipient: David I. SalemThe U.S. Attorney’s Award for Excellence in Prosecution of Organized Crime, established in 2007, is presented annually to an Assistant U.S. Attorney for outstanding work in prosecuting organized criminal activity.
Excellence in Legal Support
Recipient: Michelle WickerThe U.S. Attorney’s Award for Excellence in Legal Support, established in 2007, is presented annually to one or more non-attorney employees for outstanding work in support of the mission of the U.S. Attorney’s Office.
Outstanding Contributions to a Law Enforcement Initiative
Recipient: Rachel M. YasserThe U.S. Attorney’s Award for Outstanding Contributions to a Law Enforcement Initiative, established in 2007, is presented annually to one or more employees for outstanding work in support of an initiative of the U.S. Attorney’s Office.
New Employees
In addition, the U.S. Attorney welcomed new employees who joined the office last year. Assistant U.S. Attorneys: Leah Bressack, Kenneth Clark, Kelly Hayes, Jakarra Jones, Scott Lemmon, Peter J. Martinez, Nicholas Mitchell, Seema Mittal, David Sharfstein, Thomas Sullivan, Thomas Windom. Support Staff: Jennifer Mills, Angela Ostrum, Ashley Tyson, Damaris Weeks.
U.S. Attorney's Office Collects over $168,500 for Costs of Suppressing “Ten Mile Fire” in Lemhi Co.Read the Press Release
BOISE — U.S. Attorney Wendy J. Olson announced today that her office’s Affirmative Civil Enforcement Unit has resolved a claim for fire suppression costs without filing a lawsuit. The U.S. Attorney’s Office collected $168,596 for costs of suppressing a fire near Ten Mile Creek in Lemhi County, Idaho. The fire, known as the “Ten Mile Fire,” started on July 18, 2012, on land owned by Jeffrey and Paula Kerner, who regularly reside in Wadsworth, Illinois. Mr. Kerner was shooting at an exploding target on a ninety-five degree day when the target blew apart and ignited the fire, which spread and threatened at least two homes and burned 440 acres of federal land.
The United States owns, manages, and administers various parcels of public lands through the Bureau of Land Management and the United States Forest Service. Both agencies suppress uncontrolled wildfires within their jurisdiction pursuant to mutual aid and cooperative agreements. The money collected will reimburse the agencies for funds expended.
“We are pleased to be able to recover more than $168,500 for future fire suppression efforts,” said Olson. “We will continue to make strong efforts to ensure that in appropriate cases private parties who cause fires reimburse the taxpayers for putting out fires on federally managed land.”
Two Pitt County Drug Traffickers Sentenced in Operation “No Quarter”Read the Press Release
NEW BERN - United States Attorney Thomas G. Walker announced that in federal court United States District Judge Louise W. Flanagan sentenced NIGEL OMAR GRAY, 34, of Greenville, North Carolina, to 131 months of imprisonment and 5 years of supervised and TORRICK JOHNTRELLE RODGERS, 34, of Farmville, North Carolina, to 211 months of imprisonment and 5 years supervised release. GRAY previously pled guilty to conspiracy to distribute and possess with the intent to distribute 1 kilogram or more of heroin and 500 grams or more of cocaine. RODGERS previously pled guilty to conspiracy to distribute 5 kilograms or more of cocaine and 280 grams or more of crack cocaine and three other federal drug charges.
GRAY was arrested on February 16, 2012, after GRAY agreed to purchase one kilogram of heroin and a half kilogram of cocaine from an undercover operative working for the U.S. Drug Enforcement Administration and the Greenville Police Department. The investigation further revealed that GRAY was responsible for distributing an additional 1.5 kilograms of heroin and 28 grams of cocaine since 2000. GRAY faced an enhanced sentence due to his prior convictions which qualified him as a career offender.
RODGERS was arrested on December 3, 2010, after officers found 53 grams of cocaine and 62 grams of crack cocaine during a search of RODGERS’ house pursuant to a search warrant obtained by the Farmville Police Department. The investigation also involved two controlled purchases of crack cocaine from RODGERS. The investigation revealed that from 2008 until his arrest, RODGERS purchased over 2 kilograms of cocaine which he converted into 2.8 kilograms of crack cocaine which he later sold. RODGERS faced an enhanced sentence due to his prior convictions which qualified him as a career offenderThe Organized Crime Drug Enforcement Task Force (OCDETF) Operation "No Quarter" was designed to attack the infrastructure of the Mexican Drug Trafficking Organizations (DTO), including those of the Los Zetas, La Familia, Gulf and Sinaloa drug cartels, operating not only in the Eastern District of North Carolina, but throughout North Carolina, the United States and Mexico. These DTO's are responsible for the importation of large quantities of cocaine, marijuana, heroin, and methamphetamine into the United States, as well as the related remittance of illegal drug proceeds back into Mexico.
The investigation spanned ten years and five North Carolina counties. As part of the investigation, over 100 individuals have been charged by indictment or criminal information in the Eastern District of North Carolina and state courts. Law enforcement officials seized drugs with a street value of $4.6 million, including 127 kilograms of cocaine, 53 pounds of crystal methamphetamine, 160 pounds of marijuana, and 32 grams of heroin. Additionally, $2.2 million in U.S. Currency, 35 firearms and 35 real properties valued at $1.5 million were seized by law enforcement authorities.Investigation of this case was conducted by the Drug Enforcement Administration (DEA) - Raleigh and Greensboro Resident Offices, the New York Field Division and numerous other DEA offices in the United States and Mexico; the Internal Revenue Service - Criminal Investigations; the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) - Raleigh and Wilmington offices; the United States Marshals Service; the United States Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI) - Raleigh and Tampa, Florida offices; the North Carolina State Bureau of Investigation; the North Carolina National Guard; the North Carolina State Highway Patrol; the Greenville Police Department; the Pitt County Sheriff's Office; the Pamlico County Sheriff's Office; the Lenoir County Sheriff's Office; the Craven County Sheriff's Office; the Carteret County Sheriff's Office; the Beaufort County Sheriff's Office; the New Bern Police Department, the Wayne County Sheriff's Office; the Person County Sheriff's Office; the Farmville Police Department; the Goldsboro Police Department; the Rocky Mount Police Department; the Burlington Police Department, the Alamance County Sheriff's Office, and the Wilson Police Department.
The federal prosecutions were handled by Special Assistant United States Attorneys Glenn Perry and Augustus Willis, IV. Mr. Perry is a prosecutor with the Pitt County District Attorney’s Office. Mr. Willis is a prosecutor with the Carteret, Craven and Pamlico Counties District Attorney’s Office. District Attorneys Kimberly Robb and Scott Thomas have assigned Mr. Perry and Mr. Willis to the United States Attorney’s Office to prosecute federal Organized Crime Drug Enforcement Task Force criminal matters. Their assignments to the United States Attorney’s Office have been made possible by grants funded by the Governor’s Crime Commission.
Two Baltimore Area Men Sentenced to 28 and 29 Years in Prison for Sexually Abusing A Child to Produce Child PornographyRead the Press Release
Baltimore, Maryland – In two unrelated cases, U.S. District Judge Ellen L. Hollander today sentenced Larry James Kerfoot, age 38, of Dundalk, Maryland, and Robert Marzola, age 31, of Essex, Maryland, to 28 and 29 years in prison, respectively, each followed by lifetime supervised release, for sexually abusing a minor to produce child pornography. Judge Hollander also ordered that upon their release from prison, Kerfoot and Marzola must each register as a sex offender in the place where he resides, where he is an employee, and where he is a student, under the Sex Offender Registration and Notification Act (SORNA).
The sentences were announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge William Winter of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; Chief James W. Johnson of the Baltimore County Police Department; and Baltimore County State’s Attorney Scott Shellenberger.
According to Kerfoot and Marzola’s plea agreements, in late May and early June 2012, respectively, an undercover Baltimore County detective downloaded child pornography from internet files made available by Kerfoot and Marzola from their homes.
Law enforcement officers executed a search warrant at Kerfoot’s home on June 27, 2012, and seized computers and digital media containing 19 videos and 80 images of child pornography that Kerfoot had received from the internet. Officers also seized a video Kerfoot had produced of a 12 year old girl whom he had coerced to engage in sexually explicit conduct with him on at least five occasions.
Baltimore County Police executed a search warrant at Marzola’s residence on July 19, 2012 and seized a camera, computers and digital media. Investigation revealed that between December 2011 and July 2012, Marzola sexually abused a minor male at his home to produce images of himself and the minor engaged in sexually explicit conduct. Marzola saved the images on his laptop. Marzola told the boy, who was six years old when the abuse began, not to tell anyone about their conduct, which Marzola described to the boy as a game. The images and videos that Marzola had previously produced of the boy were found on his laptop, along with 18 additional videos of children engaged in sexual conduct. According to information presented at today’s sentencing hearing, during the investigation law enforcement identified a second boy that had been sexually abused by Marzola. The second victim, who was five years old at the time of the abuse, told investigators that on at least one occasion he had witnessed the sexual abuse of the first victim, and had been abused himself. As with the first victim, Marzola told the second victim not to tell anyone about what happened.
These cases were brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the "resources" tab on the left of the page.
The Marzola investigation was also part of Operation Predator, a nationwide HSI initiative to protect children from sexual predators, including those who travel overseas for sex with minors, Internet child pornographers, criminal alien sex offenders and child sex traffickers. HSI encourages the public to report suspected child predators and any suspicious activity through its toll-free hotline at 1-866-DHS-2ICE or by completing its online tip form. Both are staffed around the clock by investigators.
United States Attorney Rod J. Rosenstein commended HSI Baltimore, FBI, Baltimore County Police Department and Baltimore County State’s Attorney’s Office for their work in these investigations. Mr. Rosenstein thanked Assistant U.S. Attorney Judson T. Mihok, who prosecuted the Kerfoot case and Assistant U.S. Attorney Paul Budlow, who prosecuted the Marzola case.
Trio Accused of Using Counterfeit $100 BillsRead the Press Release
Three people were indicted on charges that they conspired to pass counterfeit money totalling more than $10,000, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
Indicted are Barbara Hendricks, 20, of Wilmington, Delaware; Jaonta Scarlett, age 25, of Monticello, New York, and Harlin Mack, age 25, of Hempstead, New York.
They are accused of traveling to stores in Northwest Ohio and Southeast Michigan in 2013 and purchasing items at large department stores, including WalMart, Meijer, Home Depot and Toys R Us, with counterfeit $100 bills. They would then return the items at different locations of the same store for genuine U.S. currencty, according to the indictment.
If convicted, the defendants’ sentences will be determined by the Court after reviewing factors unique to this case, including the defendants’ prior criminal record, if any, the defendants’ 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.
The investigating agency in this case is the United States Secret Service, Toledo, Ohio. The case is being handled by Assistant United States Attorney Angelita Cruz Bridges.
An indictment is only a charge and is not evidence of guilt. Defendants are entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Toledo Man Charged with Child Pornography OffensesRead the Press Release
An indictment was filed charging Joshua J. Burchett, 33, of Toledo, with receipt and distribution of child pornography and possession of child pornography, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
If convicted, the defendant’s sentence will be determined by the Court after reviewing 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.
The investigating agency in this case is the Department of Homeland Security, Cleveland, Ohio. The case is being handled by Assistant United States Attorney Alissa M. Sterling.
An indictment is only a charge and is not evidence of guilt. Defendants are entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Three Handed Sentences for Lengthy Health Care Fraud ConspiracyRead the Press Release
McALLEN, Texas – Two former clinic staffers and a physician assistant’s wife have all been ordered to prison for conspiracy to defraud Medicare and the Texas Medicaid program in the operation of the Mission Clinic and La Hacienda Family Clinic, announced United States Attorney Kenneth Magidson and Texas Attorney General Greg Abbott.
Eliza Lozano Lumbreras, 46, and San Juanita Gallegos Lozano, 57, a couple who operated the Mission Clinic, were in the midst of trial in late 2012, when they opted to enter guilty pleas for their roles in the conspiracy. Manuel Anthony Puig, 48, and Romelia Puig, 45, both of Edinburg, operated La Hacienda Family Clinic near Alton and both previously pleaded guilty in advance of trial.
Today, Chief U.S. District Judge Ricardo H. Hinojosa sentenced Lumbreras and Lozano to 50 and 33 months in federal prison, respectively. In addition to the prison terms, Judge Hinojosa ordered they pay $371,720.16 in restitution to Medicare and Medicaid for the false and fraudulent claims they submitted or caused to be submitted to the health care programs. Romelia Puig was ordered to pay $185,881.75 in restitution and received a sentence of 18 months. All will also serve three-year-terms of supervised release upon completion of their prison sentences. Manuel Puig will be sentenced Tuesday, Nov. 12, 2013 at 2:30 p.m.
Lumbreras and Lozano conspired together and with the others to submit claims to Medicare and Medicaid using the Medicaid provider number of a medical doctor who for years before his death, was unable to practice medicine. In fact, the doctor suffered from Parkinson’s disease and associated Dementia and had been mentally incompetent to practice medicine since September 2001. Although the doctor was unable to practice, they kept the Mission Clinic open for patient care. Lumbreras and Lozano took the doctor to the Mission Clinic and placed him in an office while Lumbreras saw and treated patients. Neither Lumbreras or Lozano were licensed to provide any medical services. The government’s evidence showed that between September 2001 and January 2006, Lumbreras and Lozano submitted bills to the Medicare and Medicaid programs which fraudulently claimed the doctor had provided patients with more than 13,000 medical benefits, items or services when in fact those services had been provided by Lumbreras or not at all. As a result, Medicare and Medicaid paid more than $344,000 on those claims.
Beginning in April 2005, Lumbreras and Lozano also arranged for Manual Puig to operate La Hacienda Family Clinic in Alton and to send bills to Medicare and Medicaid using the provider number of that same unpracticing doctor. Manuel Puig is physician assistant. By state law, a licensed physician is required to supervise and delegate work to a physician assistant and to be responsible for the physician assistant. At his plea hearing, Manuel Puig admitted he joined the ongoing conspiracy, admitting to fraudulently using the Medicaid provider number of that doctor who was unable to practice medicine nor provide any health care benefits, items or services; who did not delegate authority to Manuel Puig to provide any health care benefits, items or services; and who did not supervise Puig’s attempts to provide health care benefits, items or services.
Romelia Puig admitted that between May 2005 and January 2006, she was the biller at La Hacienda Family Clinic and that she submitted or caused to be submitted more than 6,000 claims to Medicare and Medicaid fraudulently using that Texas Medical provider number for which Medicare and Medicaid paid approximately $173,830.56.Lumbreras had access to the doctor’s bank accounts and was able to obtain control over the money Medicare and Medicaid paid for the fraudulent bills submitted from the Mission and La Hacienda clinics, which was divided among Lumbreras, Lozano, their families, Puig and his wife.
Previously released on bond, all were allowed to remain on bond and voluntarily surrender to a U.S. Bureau of Prisons facility to be determined in the near future.
The investigation leading to the charges in this case was conducted by the FBI and the Texas Attorney General's Medicaid Fraud Control Unit with assistance from the Mission Police Department. Assistant United States Attorney Casey N. MacDonald and Special Assistant United States Attorney Rex G. Beasley are prosecuting the case.
Tax Credit Refund Conspirator Gets 51 Month SentenceRead the Press Release
PHILADELPHIA – Paul Rawls, 55 of Philadelphia, was sentenced today to 51 months in prison for his role in a tax fraud scheme that sought to bilk the government of over $600,000.
Rawls conspired with three others – including Jonathan Brownlee 29, a Philadelphia tax preparer. Rawls pleaded guilty to conspiracy and one count of filing a false claim on June 25, 2013. Brownlee, who also pleaded guilty, was sentenced on October 9th to 24 months in prison.Christopher Brownlee, 38, and Anthony Foster, 44, also of Philadelphia are the remaining conspirators. Both are awaiting sentencing. The scheme involved filing false tax claims by obtaining and using the personal identifying information of several individuals, including their Social Security numbers, sometimes under false pretenses. The defendants used the information to prepare and file bogus tax returns claiming fraudulent refunds and directed the refunds to be deposited into bank accounts that the conspirators controlled. The tax returns fraudulently reported that the individuals for whom the defendants had prepared the returns, were entitled to receive a $7,500 refundable tax credit under the Housing and Economic Recovery Act of 2008. The returns were false because those individuals had not purchased new homes and thus were not eligible to apply for the refundable tax credit. Some of the individuals---in whose name the returns had been prepared and filed---were not aware that the defendants had used their Social Security numbers for the purpose of filing the false returns. The indictment was the first in the Eastern District of Pennsylvania involving fraud effecting the Housing and Economic Recovery Act of 2008.
In addition to the prison terms, U.S. District Court Judge Berle M. Schiller ordered Rawls and Brownlee to pay restitution in the amount of $197,385.
The case was investigated by the Internal Revenue Service Criminal Investigations and the Office of Inspector General for the United States Social Security Administration. It is being prosecuted by Assistant United States Attorneys Floyd J. Miller and Patrick J. Murray.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Tax Charges Filed Against Bucks County BusinessmanRead the Press Release
Theodore Harris, 51, of Holland, PA, was charged today by information with willful failure to pay over employment taxes, announced United States Attorney Zane David Memeger. Harris owned and operated Clean Tech USA (“Clean Tech”), a janitorial business located in Huntingdon Valley, PA.
According to the information, between January 1, 2007 and January 31, 2008, willfully failed to collect and pay to the IRS approximately $93,000 in employment taxes owed for his employees.
If convicted, Harris faces a maximum possible sentence of five years in prison and restitution to the IRS.
The case was investigated by the Internal Revenue Service Criminal Investigation and is being prosecuted by Assistant United States Attorney David Axelrod.
Click here to view the indictment
An Indictment, Information or Criminal Complaint 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, 215-861-8525Six Indicted on Federal Gun ChargesRead the Press Release
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(304) 234-7725 ● Contact: Chris Zumpetta-Parr, Public Affairs SpecialistFollow us on Twitter @NDWVnews
IN CONNECTION WITH STONEWOOD POLICE BREAK-IN
Greater Harrison DTF Leads Investigation
CLARKSBURG, WEST VIRGINIA — Six Clarksburg residents were indicted by a federal grand jury this week in connection with the recent theft of firearms from a local police department.
United States Attorney William Ihlenfeld, II, announced that a 32-count indictment was returned this week related to a burglary that occurred at the Stonewood Police Department in August of 2013.
JONATHAN CARPENTER, age 25; MICHELLE MCKINNEY, age 29; DOMINIC SUTHERLIN, age 27; JOHN LYNCH, age 43, DENAUL DICKERSON, age 26; and KRISTOPHER COX, age 33, all of Clarksburg, were named in a thirty-two count Indictment. CARPENTER, MCKINNEY, SUTHERLIN and LYNCH were named in one count of “Conspiracy to Violate Federal Firearms Laws” from August 24 to August 26, 2013. As part of the conspiracy, the defendants are charged with the possession, concealment, storing, selling and disposing of firearms that were stolen from the police department.
DICKERSON is named in one count of “Possession of a Firearm by an Unlawful Drug User/Addict and COX is named in one count of “Felon in Possession of a Firearm.”
CARPENTER faces a total of twenty-four counts; MCKINNEY faces a total of eight counts; and SUTHERLIN and LYNCH each face a total of five counts.
In addition to the conspiracy charge, other charges include “Possession, Concealment and Storage of Stolen Firearms,” “Possession of a Firearm by an Unlawful Drug User/Addict,” “Felon in Possession of Firearms,” “Possession of an Unregistered Firearm,” “Making a Materially False Statement in the Acquisition of a Firearm,” and “Sale and Disposal of a Stolen Firearm.” The defendants each face up to five years in prison on the conspiracy charge and up to twenty years in prison on each of the other charges.
In another case investigated by the drug task force, five area residents were named in a 17-count drug indictment. MATTHEW VANHORN, 27, of Stonewood; CHARLES COUNTS, age 42, of Reynoldsville; MEGAN COUNTS, age 24, of Stonewood; MARY WILCOX, age 43, of Stonewood; and, ONDREA KATHERINE COUNTS, age 41, of Reynoldsville, were each charged with various federal drug felonies.
VANHORN, CHARLES COUNTS, MEGAN COUNTS and ONDREA COUNTS are charged with one count of “Conspiracy to Possess with Intent to Distribute MDMA, BZP and Crack Cocaine” from October of 2010 to January of 2012 in Clarksburg. VANHORN faces a total of thirteen counts, CHARLES COUNTS faces eight counts; MEGAN COUNTS faces five counts; WILCOX faces one count; and ONDREA COUNTS faces two counts.
In addition to the conspiracy charge, other charges include “Conspiracy to Possess with Intent to Distribute More than 100 Grams of Heroin”, “Maintaining Drug-Involved Premises”, “Distribution of and Possession with Intent to Distribute MDMA, BZP, Crack Cocaine and Heroin within 1,000 Feet of Oakmound Apartments” and “Possession with Intent Distribute Heroin.”
The U.S. Attorney’s Office is seeking to forfeit $5,121 in United States currency and is seeking a $50,000 money judgment in the case.
The defendants face up to twenty years in prison on the conspiracy charge, up to forty years in prison on the sales and possessions that occurred near a protected location as well as the conspiracy charging more than 100 grams of heroin; and up to 20 years on the premises charges.
These cases will be prosecuted by Criminal Chief Shawn A. Morgan. The Greater Harrison County Drug and Violent Crime Task Force consists of officers & agents from the Bridgeport Police Department; the Clarksburg Police Department; the Drug Enforcement Administration; the West Virginia State Police-Bureau of Criminal Investigations; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the United States Postal Inspection Service; and the United States Marshals Service.
The charges contained in the indictments are merely accusations and not evidence of guilt, and each defendant is presumed innocent until and unless proven guilty.
Sentences for November 01 – 07, 2013Read the Press Release
Alfredo Muniga-Fuentes, 43, of Mexico, was sentenced by Federal District Court Judge Alan B. Johnson on November 7, 2013, for illegal re-entry of a previously deported alien into the United States. Muniga-Fuentes was arrested in Jackson, Wyoming. He received time served, plus ten days, was ordered to pay a $100.00 special assessment, and is subject to deportation upon release from custody. This case was investigated by the U.S. Department of Homeland Security, Immigration and Customs Enforcement.
Jose Ines Nunez-Matamoros, 42, of Mexico, was sentenced by Federal District Court Judge Alan B. Johnson on November 7, 2013, for illegal re-entry of a previously deported alien into the United States. Nunez-Matamoros was arrested in Douglas, Wyoming. He received time served plus ten days, was ordered to pay a $100.00 special assessment, and is subject to deportation upon release from custody. This case was investigated by the U.S. Department of Homeland Security, Immigration and Customs Enforcement.
James Donald Gardner, 32, of Evansville, Wyoming, was sentenced by Federal District Court Judge Scott W. Skavdahl on November 6, 2013, for conspiracy to possess with intent to distribute, and to distributing 124.88 grams of methamphetamine. Gardner was arrested in Casper, Wyoming. He received 120 months imprisonment, to be followed by five years of supervised release, and was ordered to pay a $100.00 special assessment and a $1,000.00 fine. This case was investigated by the Wyoming Division of Criminal Investigation.
Lori Ann Bair, 28, of Newcastle, Wyoming, was sentenced by Federal District Court Judge Scott W. Skavdahl on November 5, 2013, for conspiracy to possess with intent to distribute and to distributing 50-200 grams of methamphetamine. Bair was arrested in Union City, Pennsylvania. She received 33 months imprisonment, to be followed by four years of supervised release, and was ordered to pay a $100.00 special assessment. This case was investigated by the Wyoming Division of Criminal Investigation.
Martin Antonio Paredes-Zamorano, 25, of Glenrock, Wyoming, was sentenced by Federal District Court Judge Alan B. Johnson on November 4, 2013, for being an illegal alien in possession of a firearm. Paredes-Zamorano was arrested in Glenrock, Wyoming. He received ten months imprisonment, was ordered to pay a $100.00 special assessment, and is subject to deportation upon release from custody. This case was investigated by the U.S. Department of Homeland Security, Immigration and Customs Enforcement.
Vincent A. Apodaca, 26, of Rawlins, Wyoming, was sentenced by Federal District Court Judge Alan B. Johnson on November 1, 2013, for conspiracy to possess with intent to distribute, and to distributing 50 grams or more of methamphetamine and for possession of a firearm in furtherance of a drug felony. Apodaca was arrested in Cheyenne, Wyoming. He received 120 months imprisonment, to be followed by four years of supervised release, and was ordered to pay a $200.00 special assessment and a $1,000.00 fine. This case was investigated by the Wyoming Division of Criminal Investigation.
Romanian National Aurel Cojocaru Extradited from Czech Republic to United States to Face Charges Related to Multimillion Dollar International Cyber Fraud SchemeRead the Press Release
Romanian national Aurel Cojocaru has been extradited to the United States from the Czech Republic to face charges related to his participation in a sophisticated multimillion dollar cyber fraud scheme that targeted consumers on U.S.-based Internet marketplace websites such as eBay.com. Cojocaru specialized in making high-quality fraudulent passports to open U.S. bank accounts used to launder the stolen funds. His extradition followed a coordinated international takedown in December 2012 during which law enforcement officials in Romania, the Czech Republic, the United Kingdom, and Canada, acting at the request of the United States, arrested six Romanian nationals, including Cojocaru. The Czech Republic’s Ministry of Justice granted the extradition request on August 9, 2013. Cojocaru was transported to the Eastern District of New York on November 6, 2013, and was arraigned today before U.S. Magistrate Judge Roanne L. Mann.
In addition to Cojocaru’s extradition, three other defendants – Cristea Mircea, Ion Pieptea, and Nicolae Simion – have been extradited to the United States from Romania, and one defendant, Emil Butoi, was extradited from the United Kingdom. Earlier today, Mircea pleaded guilty to committing wire fraud. Butoi pleaded guilty to committing passport fraud on November 5, 2013. Defendant Nicolae Ghebosila is still engaged in extradition proceedings in Canada. Seven defendants, including Romanian national Nicolae Popescu, are currently fugitives from justice.1
The extradition and the guilty plea were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI).
As alleged in the complaint and subsequent indictment,2 defendants Cojocaru, Mircea and their co-conspirators saturated Internet marketplace websites, such as eBay, Cars.com, AutoTrader.com, and CycleTrader.com, with detailed advertisements for cars, motorcycles, boats, and other high‑value items generally priced in the $10,000 to $45,000 range. Unbeknownst to the buyers, however, the merchandise did not exist. The so-called sellers corresponded with the victim buyers by email, sending fraudulent certificates of title and other information designed to lure the victims into parting with their money. Sometimes, they pretended to sell cars from nonexistent auto dealerships in the United States and even created phony websites for these fictitious dealerships.
The complaint and indictment further describe how, after the purported Asellers@ reached an agreement with the victim buyers, they would often email them fraudulent invoices purporting to be from Amazon Payments, PayPal, or other online payment services, with wire transfer instructions directing the buyers to send money to American bank accounts. Foreign nationals in the United States, known as Aarrows,@ used fraudulent passports manufactured and supplied by Cojocaru and others as identification to open the bank accounts. Finally, the Aarrows@ would collect the illicit proceeds and send them to co-conspirators in Europe by wire transfer and other methods. Cojocaru produced high-quality fake passports purportedly issued by various European countries as part of this scheme. During one recorded video chat, Cojocaru displayed the tools of his trade – new holograms he had acquired in order to create more authentic-looking passports. In another recorded call, he boasted about his supposed ability to evade the Czech authorities. On December 6, 2012, however, Czech law enforcement officers arrested Cojocaru, and during their search of Cojocaru’s residence outside Prague, the Czech officers and FBI agents found over 180 stolen and fraudulent passports and dozens of identification cards.
According to court filings, the government alleges that the defendant and his coconspirators defrauded their victims of at least $3 million during the course of the conspiracy.
Defendant Cojocaru is charged with conspiracy to commit substantive offenses against the United States, passport fraud, wire fraud, and money laundering. If convicted, the defendant faces a maximum sentence of 20 years’ imprisonment on each of the conspiracy, wire fraud, and money laundering counts, and a maximum sentence of 10 years’ imprisonment on the passport fraud count.
Defendant Mircea faces up to 20 years in prison as the result of his guilty plea to wire fraud. Defendant Butoi faces up to 10 years in prison as the result of his guilty plea to passport fraud.
“Cojocaru’s fraudulent passports were a key part of the criminal infrastructure supporting this sophisticated and global cyber scheme,” stated United States Attorney Lynch. “He operated his fake passport factory with what he thought was impunity. But unlike his passports, our efforts to protect American consumers are genuine and, as demonstrated by Cojocaru’s arrest and extradition and Mircea’s guilty plea today, extend beyond national borders.”
FBI Special Agent in Charge Venizelos stated, “Cojocaru’s extradition means he will finally have to face the American justice system. As alleged, Cojocaru played an integral part in a multi-million dollar cyber scam as the principal passport forger. Using the fake documents Cojocaru created, foreign nationals in the United States could open bank accounts under phony names and launder payments to foreign accounts from duped American buyers. Working with our law enforcement partners abroad, the FBI was able to stop this complex global scam.”
The government of the Czech Republic, particularly the Ministry of Justice, and Interpol provided significant assistance and support during the investigation, arrest, and extradition of the defendant. The Department of Justice’s Office of International Affairs worked with its counterparts in the Czech Republic to effect the extradition, and the U.S. Marshals Service coordinated and transported the defendant to the United States.
The government’s case is being prosecuted by Assistant United States Attorneys Cristina Posa, Nadia Shihata, and Claire Kedeshian of the U.S. Attorney’s Office for the Eastern District of New York, and Trial Attorney Carol Sipperly of the Criminal Division’s Fraud Section.
The Defendants
AUREL COJOCARU
Age: 44
RomanianCRISTEA MIRCEA
Age: 31
RomanianE.D.N.Y. Docket No. 12-CR-0785 (ERK)
_____________________________
1 The FBI’s Wanted Posters for the fugitive defendants are available at http://www.fbi.gov/wanted/cei.
2 The charges in the complaint and indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty.
Real Estate Developer Sentenced to 6 Months of Imprisonment for Soliciting $300,000 in Kickbacks on NYC Housing Preservation & Development Project in the BronxRead the Press Release
Earlier today, in federal court in Brooklyn, New York, Placido Rodriguez, a real estate developer who engaged in a $300,000 kickback scheme while developing the Alexander Avenue Cluster affordable housing project in the Bronx for the New York City Department of Housing Preservation and Development (HPD), was sentenced to a term of imprisonment of 6 months following his conviction for wire fraud conspiracy. In addition, Rodriguez was ordered to pay $98,333 in restitution to the City of New York and pay an additional $98,333 to the federal government as forfeiture.
The sentence was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; George Venizelos, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI); Cheryl Garcia, Acting Special Agent in Charge, United States Department of Labor (DOL) Office of Inspector General; and Rose Gill Hearn, Commissioner, New York City Department of Investigation (DOI).
Previously, Rodriguez pleaded guilty to a one-count information charging him with wire fraud conspiracy in connection with a scheme to defraud HPD by collecting kickbacks from a general contractor on HPD affordable housing projects and making HPD pay for the kickbacks by disguising them as construction costs. As detailed in the information and complaint, after Rodriguez and two business partners won the HPD contract to develop the Alexander Avenue Cluster project, they hosted a “pre-bid” meeting with a prospective general contractor who was planning to bid on the project. During that meeting, Rodriguez, in agreement with his business partners, demanded $300,000 from the general contractor in return for their support of his bid. After the general contractor won the bid, he would direct some of the money that he was paid by HPD for his work as a general contractor to Rodriguez and his partners as payments toward the $300,000 kickback. In order to conceal the criminal nature of these payments, Rodriguez and his partners gave the general contractor false invoices from a company they controlled, PRA Building Materials, that were tailored to match the kickback payments. Until the government discovered this corrupt scheme, the general contractor had paid approximately $267,000 in kickbacks, fraudulently billed to HPD, to Rodriguez, and his partners.
“Thousands of New Yorkers turn to HPD for assistance in literally putting a roof over their heads. This defendant lined his pockets with federal housing funds intended to help those families. We will not stop in our pursuit of those who profit by corrupting this vital resource for some of this city’s most vulnerable families. Our ongoing investigation of the New York City affordable housing development sector will continue,” stated United States Attorney Lynch. Ms. Lynch expressed her grateful appreciation to the United States Department of Labor, Office of the Inspector General, for their assistance in this case.
FBI Assistant Director-in-Charge Venizelos stated, “Motivated by greed, the defendant real estate developer constructed a scheme to defraud HPD and took advantage of an opportunity to help the less fortunate in our community. His sentence reinforces the federal government’s unyielding stance that corruption on any level will not be tolerated. The FBI and our law enforcement partners remain vigilant in bringing to justice those who misuse their positions of trust for personal gain.”
DOI Commissioner Rose Gill Hearn said, “This individual and his co-conspirators collected bribes and passed the cost to the taxpayers, in effect stealing money from the City’s affordable housing program. Their corruption was exposed in a joint federal and City investigation. Now as they go to prison, stripped of their stolen money, their scheme looks much less clever than they imagined.”
United States Attorney Lynch thanked the Internal Revenue Service, Criminal Investigation, New York (IRS); the United States Department of Housing and Urban Development (HUD); and the New York City Police Department (NYPD) for their cooperation in this case.
The sentencing proceeding was held before United States District Judge Nina Gershon at the U.S. Courthouse in Brooklyn, New York.
To date, three supervisory officials of HPD, including former HPD Assistant Commissioner Wendell Walters, and six real estate developers and general contractors have pleaded guilty to charges including racketeering conspiracy, bribery, and wire fraud conspiracy in connection with the government’s ongoing investigation of widespread corruption involving affordable housing contracts at HPD. HPD inspection supervisors Michael Provenzano and Luis Adorno were each sentenced to 18 months in prison, and developer Sergio Benitez was sentenced to 22 months. On October 10, 2013, Rodriguez’s partner, Angel Villalona, was sentenced to six months’ imprisonment and ordered to pay $100,000 restitution to the City of New York, and also ordered to forfeit $100,000 to the government. Rodriguez is the fourth defendant sentenced in this ongoing investigation of corruption within the New York City affordable housing development sector.
The government’s case is being prosecuted by Assistant United States Attorneys Cristina M. Posa, Anthony Capozzolo, and Claire Kedeshian.
The Defendant:
PLACIDO RODRIGUEZ
Fort Lee, New Jersey
Age: 66Priest Admits Possessing Photos of Minors Engaged in Sexually Explicit ConductRead the Press Release
PITTSBURGH - A Catholic priest pleaded guilty in federal court to a charge of possession of material depicting the sexual exploitation of a minor, United States Attorney David J. Hickton announced today.
David Dzermejko, 65, Braddock, Pa., pleaded guilty to one count before United States District Judge Nora Barry Fischer.
In connection with the guilty plea, the court was advised that on Jan. 11, 2013, Dzermejko, a Catholic priest, possessed photographs in computer graphics files, the production of which involved the use of minors engaging in sexually explicit conduct. The child pornography was found on various computers and computer-related equipment taken from Dzermejko's former residence in Pittsburgh, Pa., following the execution of a search warrant.
The search warrant was issued on information provided, in part, from Microsoft Corp., that a "Skydrive" user identified by email address [email protected] and screen name "Lord Winchester Cuthbert Thurston VII", had uploaded a sexual image of a prepubescent minor to his Skydrive account. Dzermejko admitted to law enforcement officers executing the warrant that he had been viewing child pornography for in excess of 10 years, had acquired the images on-line from various websites, and had traveled on numerous occasions to Thailand where he engaged in sexual encounters with teen boys, some of whom he thereafter maintained an on-line relationship.
Judge Fischer scheduled sentencing for March 20, 2014, at 11:30 p.m. The law provides for a total sentence of 10 years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the criminal history, if any, of the defendant.
Pending sentencing, the court continued defendant on bond.
Assistant United States Attorney Carolyn J. Bloch is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation and officers of the Crimes Against Children Task Force conducted the investigation that led to the prosecution of Dzermejko.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Pearland Man Pleads Guilty to Producing and Distributing Child PornographyRead the Press Release
HOUSTON – Travis James McReynolds, 33, of Pearland, has entered a plea of guilty to production and distribution of child pornography, announced United States Attorney Kenneth Magidson.
McReynolds was chatting online with an undercover officer in New Mexico, during which the undercover officer received three images and several videos of child pornography. One of the videos appeared to be a webcam video of a minor female under the age of 13 who is seen lewdly displaying her genitals for the camera and digitally penetrating her genitals and anus. Still images depicting minor girls displaying their genitals were also emailed to the undercover officer. The officer was able to determine the Internet Service Provider and traced the user to McReynold’s address in Pearland. The undercover officer received from McReynolds a short video clip of what turned out to be a young teen girl that McReynolds had produced himself. Based on this, the undercover officer contacted Galveston area law enforcement with the information.
On Oct. 20, 2012, a state search warrant was executed at the defendant?s apartment in Pearland, at which time two laptop computers were seized which revealed child pornography. Upon questioning, McReynolds admitted to obtaining child pornography by chatting with others over the Internet. Forensic analysis resulted in the discovery of approximately 132 images and 35 videos of child pornography on the two computers.
McReynolds entered the plea before U.S. Magistrate Judge Froeschner today. Sentencing is set for Jan. 22, 2013, before U.S. District Judge Gregg Costa, at which time McReynolds faces a minimum of 15 and up to 30 years imprisonment for production as well as up to 20 years on the distribution charge. He also faces a potential fine of $250,000 and up to life on supervised release during which the court can impose a number of special conditions designed to protect children and prohibit the use of the Internet. McReynolds will remain in custody pending that hearing.The charges against McReynolds were the result of an investigation conducted by the Galveston and Albuquerque offices of Homeland Security Investigations and the Pearland Police Department as part of the Houston Metro Internet Crimes Against Children Task Force.
This case, prosecuted by Assistant U.S. Attorney Robert Stabe, was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to locate, apprehend and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Northern California Real Estate Investor Agrees to Plead Guilty to Bid Rigging at Public Foreclosure AuctionsRead the Press Release
A Northern California real estate investor has agreed to plead guilty for his role in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in Northern California, the Department of Justice announced.
Felony charges were filed today in the U.S. District Court for the Northern District of California in Oakland against Chuokee “Joseph” Bo of Pleasanton, Calif.
Bo is the 38th individual to plead guilty or agree to plead guilty as a result of the department’s ongoing antitrust investigations into bid rigging and fraud at public real estate foreclosure auctions in Northern California.
According to court documents, Bo conspired with others not to bid against one another, but instead designated a winning bidder to obtain selected properties at public real estate foreclosure auctions in Alameda County, Calif. Bo was also charged with conspiring to use the mail to carry out a scheme to fraudulently acquire title to selected Alameda County properties sold at public auctions, to make and receive payoffs, and to divert money to co-conspirators that would have otherwise gone to mortgage holders and others by holding second, private auctions open only to members of the conspiracy. The department said that the selected properties were then awarded to the conspirators who submitted the highest bids in the second, private auctions. The private auctions often took place at or near the courthouse steps where the public auctions were held. Bo is charged with participating in the conspiracies beginning as early as August 2009 and continuing until about October 2010.
“Today’s plea agreement is the latest step in the Antitrust Division’s efforts to preserve open competition in local markets,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “The division remains committed to prosecuting individuals who subvert the competitive process for their own profit.”
The department said that the primary purpose of the conspiracies was to suppress and restrain competition and to conceal payoffs in order to obtain selected real estate offered at Alameda County public foreclosure auctions at non-competitive prices. When real estate properties are sold at these auctions, the proceeds are used to pay off the mortgage and other debt attached to the property, with remaining proceeds, if any, paid to the homeowner. According to court documents, these conspirators paid and received money that otherwise would have gone to pay off the mortgage and other holders of debt secured by the properties, and, in some cases, the defaulting homeowner.
"This is another example of justice being served in preserving the fairness of public real estate foreclosure auctions as well as the FBI’s commitment in investigating those who take advantage of a competitive marketplace,” said David J. Johnson, FBI Special Agent in Charge of the San Francisco Field Office. “Criminal activity like this takes place in our communities and we continue to rely on the public’s help in seeking those who cheat the system.”
A violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine for the Sherman Act charges may be increased to twice the gain derived from the crime or twice the loss suffered by the victims if either amount is greater than $1 million. A count of conspiracy to commit mail fraud carries a maximum sentence of 30 years in prison and a $1 million fine. The government can also seek to forfeit the proceeds earned from participating in the conspiracy to commit mail fraud.
Today’s charges are the latest filed by the department in its ongoing investigation into bid rigging and fraud at public real estate foreclosure auctions in San Francisco, San Mateo, Contra Costa, and Alameda counties, Calif. These investigations are being conducted by the Antitrust Division’s San Francisco Office and the FBI’s San Francisco Office. Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Antitrust Division’s San Francisco Office at 415-436-6660, visit www.justice.gov/atr/contact/newcase.html or call the FBI tip line at 415-553-7400.
Today’s charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. 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 fraud charge(s) referenced in this press release were subsequently dismissed on the government’s motion.**
North Carolina Paving Contractor Pleads Guilty to Tax and Bank FraudRead the Press Release
Tommy Edward Clack pleaded guilty in federal court in Greensboro, N.C., to one count of willfully filing a false federal income tax return and one count of knowingly making a false statement to a federally-insured bank in order to obtain a mortgage loan, the Justice Department and the Internal Revenue Service (IRS) announced today.
According to filings with the court, for approximately the past 10 years Clack has been an itinerant, self-employed paving contractor doing business in North Carolina, South Carolina, Maryland, and Florida. Clack operated under several different business names, and he changed the names of his paving business frequently in order to avoid scrutiny by state and federal law enforcement agencies. As a result of his business practices, over the years Clack was charged with multiple state criminal violations in Maryland, North Carolina, South Carolina and Florida. Since June 2010, Clack has been under an injunction banning him from operating as a driveway paving contractor in North Carolina. He is also subject to a cease-and-desist order in Maryland banning him from various fraudulent practices.
According to court documents, Clack significantly underreported the income from his paving business on his tax returns. From 2004 to 2007, Clack earned gross income of over $5.7 million, but reported only a fraction of it to the IRS. Clack underreported his income by approximately $294,829 in 2004; $1,178,822 in 2005; $1,868,556 in 2006 and $2,428,710 in 2007. Clack’s returns were prepared by an accountant, but Clack knowingly provided her with false information upon which to base Clack’s returns, and signed his returns knowing that they significantly understated his income. Altogether, as a result of these false returns Clack underpaid his taxes during this period by approximately $1,350,597. To conceal his tax fraud, Clack employed a number of strategies: he did not maintain books and records, dealt extensively in cash, paid his employees in cash and structured currency transactions with his bank in amounts designed to evade the bank’s requirement to file Currency Transaction Reports with the IRS.
Court documents state that in 2003, Clack submitted a mortgage loan application in the name of his then-wife to a bank in Greensboro. The application sought a $640,000 loan to finance the purchase of a $1.2 million home. As part of the loan application, Clack provided the bank with a 2002 tax return in his wife’s name, which reported adjusted gross income of $372,748 and claimed total tax liability of $127,745. Clack represented that this tax return had been filed with the IRS, when in fact it had not been. In fact, Clack and his then-wife had filed a 2002 joint federal income tax return which claimed that the couple had adjusted gross income of $17,656 and total tax liability of $2,685. Had the bank known of the discrepancy, they would not have issued the loan. Clack ultimately defaulted on the loan, and the bank suffered a loss after foreclosing the collateral.
For the false tax return charge, Clack faces a maximum of three years in prison, one year of supervised release and a maximum fine of $250,000. Clack faces a maximum of 30 years in prison, five years of supervised release and a maximum fine of $1,000,000 for the bank fraud count. Sentencing is scheduled for March 7, 2014.
The case was investigated by special agents of the IRS - Criminal Investigation, with assistance from the North Carolina State Bureau of Investigation. It is being prosecuted by Trial Attorney Jonathan Marx of the Justice Department’s Tax Division.
New Hampshire Man Charged with Passing Fraudulent Documents in Connection with His Sale of Black Rhinoceros Horns for $35,000Read the Press Release
Ari B. Goldenberg, 46, of Milton, N.H., was charged today with trafficking in and making a false record for illegally selling a black rhinoceros head mount to an undercover U.S. Fish & Wildlife Service (FWS) special agent.
The indictment is a result of a nationwide effort led by the FWS and the Justice Department to investigate and prosecute those involved in the black market trade of endangered rhinoceros horns.
The indictment alleges that Goldenberg, seeking to profit from the sale of a black rhinoceros head mount he acquired for less than $1,000, illegally sold the mount to an undercover special agent of the FWS Office of Law Enforcement for $35,000. The indictment also charges Goldenberg with providing the undercover agent with a falsified receipt for the sale of the mount.
Rhinoceros are a herbivorous species of prehistoric origin and one of the largest remaining mega-fauna on earth. They have no known predators other than humans. All species of rhinoceros are protected under United States and international law, and all black rhinoceros species are endangered. Since 1976, trade in rhinoceros horn has been regulated under the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), a treaty signed by more than 175 countries around the world to protect fish, wildlife and plants that are or may become imperiled due to the demands of international markets. Nevertheless, the demand for rhinoceros horn and black market prices have skyrocketed in recent years due to the value that some cultures have placed on ornamental carvings, good luck charms or alleged medicinal purposes, leading to a decimation of the global rhinoceros population. In China, there is a tradition dating back centuries of intricately carved rhinoceros horn cups. Drinking from such a cup was believed to bring good health, and such carvings are highly prized by collectors. As a result of this demand, rhino populations have declined by more than 90 percent since 1970. South Africa, for example, has witnessed a rapid escalation in poaching of live animals, rising from 13 in 2007 to more than 618 in 2012.
An indictment is merely an accusation and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
The case was investigated by the FWS Office of Law Enforcement and is being prosecuted by the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division.New Hampshire Man Arrested, Charged in New Jersey for Illegal Weapons Sales on Underground Online MarketplaceRead the Press Release
NEWARK, N.J. B Federal agents arrested a New Hampshire man in Hampton, N.H., on charges that he illegally trafficked firearms through New Jersey on an underground, Internet-based marketplace known as “Black Market Reloaded,” New Jersey U.S. Attorney Paul J. Fishman announced.
Matthew Crisafi, 38, of Hampton, was arrested by special agents from U.S. Immigration and Customs Enforcement, Homeland Security Investigations (HSI), on a federal criminal complaint charging him with three counts: the unlicensed sale of firearms; smuggling of firearms from the United States to an overseas destination; and conspiring to commit money laundering in connection with firearms trafficking activities.
The defendant, who is the owner of an independent trucking company in New Hampshire, is scheduled for an initial appearance and bail hearing this afternoon before U.S. Magistrate Judge Daniel Lynch, in Concord, N.H., federal court. He will be brought to New Jersey to appear in Newark federal court on a date to be determined.
“International arms trading and other crimes are just as dangerous whether deals are made in person or through anonymous computer networks and currencies,” said U.S. Attorney Fishman. “Online black market sellers should take note: we aren’t just targeting the administrators of these sites, which can pop up again elsewhere. If you buy or sell illegal goods on an underground marketplace, law enforcement is watching.”
According to the criminal complaint unsealed today:
In April 2013, HSI special agents conducted an investigation of illicit sales activity on Black Market Reloaded (BMR). The website provides a platform for vendors and buyers to conduct anonymous online transactions involving the sale of a variety of illegal goods, including firearms, ammunition, explosives, narcotics and counterfeit items. Unlike mainstream e-commerce websites, BMR is only accessible via the Tor network – a special computer network designed to enable users to conceal their identities and locations. Transactions on BMR are conducted using Bitcoin, an anonymous, decentralized form of electronic currency that only exists online.
During the investigation, HSI learned that Crisafi maintained a seller’s profile on BMR to advertise the illegal sale of firearms and ammunition. Over a period of approximately three months, Crisafi negotiated with an undercover officer – whom he believed was an international purchaser of firearms – to sell a number of semi-automatic handguns and rifles, including a Smith & Wesson Model Bodyguard .380 caliber semi-automatic handgun; a Glock Model 26, 9mm caliber semi-automatic handgun; a KelTec Model P32, .32 caliber semi-automatic handgun; a NORINCO SKS 7.62 semi-automatic rifle; an AR-15 Bushmaster semi-automatic rifle and others. In all, Crisafi sold multiple firearms to the undercover officer, valued by law enforcement to be worth more than $11,000 on the black market.
Crisafi shipped the firearms in packages through the U.S. Postal Service. Several of the weapons Crisafi sold were sent to the undercover officer through a location in New Jersey, where they were seized by law enforcement officials.
“Today’s arrest is a testament to the strong working relationships HSI has forged with our numerous law enforcement partners,” said HSI Newark Special Agent in Charge Andrew McLees. “People who think they can hide behind a veil of an “underground” website to buy and sell weapons illegally are mistaken – HSI will use all of our collective resources to track you down and bring you to justice.”
U.S. Attorney Fishman credited special agents of HSI, under the direction of Special Agent in Charge McLees in Newark and Special Agent in Charge Bruce M. Foucart in Boston with leading the investigation; as well as postal inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria Kelokates; special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Acting Special Agent in Charge George P. Belsky; the U.S. Attorney’s Office for the District of New Hampshire, under the direction of John P. Kacavas; and officers from the Hampton Police Department in Hampton, N.H., under the direction of Police Chief Jamie Sullivan, for their important contributions.
The prosecution is being handled by the U.S. Attorney’s Office National Security Unit in Newark.The charges and allegations contained in the complaint are merely accusations and the defendant is considered innocent unless and until proven guilty.
13-430Crisafi, Matthew Complaint
Nampa Man Pleads Guilty to Distributing MethRead the Press Release
BOISE – Timothy Alan Butterbaugh, 46, of Nampa, Idaho, pleaded guilty today in federal court to one count of distributing methamphetamine, U.S. Attorney Wendy J. Olson announced. Butterbaugh was indicted by a federal grand jury in Boise on September 10, 2013, charged with four counts of distributing methamphetamine.
According to the plea agreement, an individual working with law enforcement provided information that Butterbaugh was selling methamphetamine. On June 27, 2013, the individual contacted Butterbaugh to arrange to purchase a “quarter.” Later that day, at an agreed upon location in Nampa, Butterbaugh sold the individual one-quarter ounce of methamphetamine for $400. Following the meeting, the individual gave the methamphetamine to law enforcement agents who had conducted surveillance before and during the transaction. Testing by the Drug Enforcement Administration laboratory determined the substance to be 98.8% pure and contained 6.8 grams of actual methamphetamine. Butterbaugh was arrested at his residence on August 28, 2013, during execution of a search warrant.
Butterbaugh faces up to 40 years in prison, a maximum fine of $5 million, and at least four years of supervised release.
Sentencing is set for January 23, 2014, before Chief U.S. District Judge B. Lynn Winmill at the federal courthouse in Boise.
The case was investigated by the Treasure Valley Metro Violent Crimes Task Force, which is comprised of federal, state and local agencies, including the Federal Bureau of Investigation, Bureau of Alcohol, Tobacco, Firearms and Explosives, Boise Police Department, Ada County Sheriff’s Office, Caldwell Police Department, Nampa Police Department, Meridian Police Department, Canyon County Sheriff’s Office, and Idaho Department of Correction.
The case is being prosecuted by the Special Assistant U.S. Attorney hired by the Treasure Valley Partnership and the State of Idaho to address gang crimes. The Treasure Valley Partnership is comprised of a group of elected officials in southwest Idaho dedicated to regional coordination, cooperation, and collaboration on creating coherent regional growth. For more information, visit treasurevalleypartners.org.
Muskegon Landlord Convicted of Arson, Insurance Fraud, and Tax Fraud Sent to Federal Prison for 55 YearsRead the Press Release
GRAND RAPIDS, MICHIGAN – Gerald Eugene Singer, 74, of Muskegon, Michigan, was sentenced to 55 years in prison, U.S. Attorney Patrick Miles announced today. In addition to the prison terms, United States District Judge Gordon J. Quist also ordered Singer to pay $653,140 in restitution to the victims of his crimes.
Singer was convicted by a jury in March 2013 of two counts of arson, three counts of using fire to commit mail fraud, one count of mail fraud, and five counts of tax fraud after a 16-day trial at which nearly 100 witnesses testified. The jury found that Singer committed arson and used fire to commit mail fraud at the following properties:
1292 E. Broadway, Norton Shores, MI, a commercial building formerly known as “The Fair” fabric store, which was insured by Hartford Insurance and Westport Insurance (destroyed by fire on June 20, 1999);
250 Myrtle St., Muskegon, MI, an investment/rental property which was insured by Foremost Insurance (destroyed by fire on November 9, 2006); and
2608-2614 7th Street, Muskegon Heights, MI, a four-unit apartment complex insured by Farm Bureau General Insurance Company (destroyed by fire on August 28, 2007).
The mail fraud charge included those properties as well as fires at six additional properties and
two attempted fires at properties in Muskegon Heights, MI.The jury also convicted Singer of filing a false tax-related document each year between 2005 and 2008 for failing to disclose to the IRS approximately $500,000 in insurance proceeds from the fire at “The Fair” fabric store in Norton Shores. Singer also was convicted of obstructing the administration of tax laws by causing false individual income tax returns for tax years 2005 through 2008 to be filed; making false and misleading statements to IRS officials about his individual income tax returns; misleading his tax preparer by withholding information; concealing income from the IRS by means of “structuring” the payout of insurance funds; and causing the filing of false home buyer tax credit claims against the IRS.
U.S. Attorney Miles said, “Arson endangers the lives of residents, neighbors and first responders, it raises the cost of insurance for everyone, and it harms neighborhoods. Today, Mr. Singer received the bitter fruits of his continual disregard for others. He learned that arson and fraud do not pay. He will be spending a long time where he belongs, which is in prison.”
Daryl McCrary, Acting Special Agent in Charge of the Detroit office of the Bureau of Alcohol, Tobacco, Firearms & Explosives (“ATF”) and Carolyn Weber, Acting Special Agent in Charge of the Detroit office of the Internal Revenue Service-Criminal Investigation (“IRS-CI”), joined in the announcement of the sentences.
ATF Acting Special Agent in Charge Daryl McCrary said, “This complex multi-layered, multi-agency investigation further displays that arson (arson for profit) crimes are not victimless fires, they result in the loss of income and the loss of property. Mr. Singer’s wanton criminal acts have altered and endangered the lives of many citizens in the community, including the fire fighters who responded to these fires,” said McCrary. “This sentence will not heal the individuals affected, but we hope it will deter others from committing heinous acts of arson in the future.”
IRS Criminal Investigation Acting Special Agent in Charge, Carolyn Weber, stated, “Gerald Singer lined his pockets with the proceeds of false insurance claims. IRS will vigorously pursue those who seek to profit from illegal activities.”
Under federal sentencing laws, the Court was required to sentence Singer to at least 5 years and up to 20 years in prison for the arson convictions. The law also mandated that Singer receive a consecutive minimum sentence of 10 years for the first conviction of using fire to commit mail fraud and two additional mandatory consecutive minimum sentences of 20 years for the second and third convictions for using fire to commit mail fraud.
This case was investigated by the Grand Rapids offices of the ATF and IRS-CI, and the Muskegon Heights Fire Department. Assistant U.S. Attorneys Michael MacDonald and Christopher O’Connor prosecuted the case..
END
Mexican National Living Illegally in Denver Caught with over 50 Kilograms of MarijuanaRead the Press Release
DENVER – Joel Rodriguez Padilla, a/k/a Isaias Rodriguez Padilla, age 37, a Mexican national living in Denver, was indicted by a federal grand jury this week on immigration and drug charges, United States Attorney John Walsh and U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) Special Agent in Charge Kumar Kibble announced. Padilla has been in custody since his arrest on a Criminal Complaint on October 8, 2013. The indictment was returned by a federal grand jury in Denver on November 5, 2013. Padilla appeared in U.S. District Court in Denver this morning before a Magistrate Judge, where he was arraigned on the indictment. A tentative trial date of January 13, 2014 has been set before U.S. District Court Judge William J. Martinez.
According to court documents, including the indictment and the affidavit in support of the original Criminal Complaint, on October 9, 2013, Padilla, a Mexican national, did unlawfully, knowingly and intentionally possess with intent to distribute 50 or more kilograms of marijuana. Further, on that same date, Padilla, an alien, was found in the United States after having been denied admission, deported and removed from the United States. Padilla faces an enhanced penalty because his deportation was subsequent to a conviction for an aggravated felony offense.
The indictment includes an asset forfeiture allegation. Upon conviction, Padilla could be ordered to forfeit the proceeds from his criminal conduct, including $60,365 in currency seized from his Denver home. Padilla also faces the forfeiture of his home, where the money as well as scores of kilograms of marijuana were found.
The investigation revealed that Padilla had been previously involved in and prosecuted for the trafficking 1.5 pounds of methamphetamine in October 2000. Agents also found that Padilla had been deported on a number of different occasions.
“Trafficking in marijuana for illicit sale – here, by a previously deported foreign national – is a serious federal crime,” said U.S. Attorney John Walsh. “This case falls squarely within guidance provided by the Department of Justice for federal prosecution of marijuana offenses.”
“Illegal re-entry after deportation and possession with the intent to distribute narcotics are serious federal violations,” said Kumar C. Kibble, special agent in charge of HSI Denver. “Our HSI special agents routinely partner with law enforcement nationally to help identify, locate, and ultimately pursue prosecution against these individuals. In many cases, these re-entry convictions lead to significantly enhanced prison sentences that help to deter further criminal activity.”
If convicted, Padilla faces not more than 20 years in federal prison, and up to a $250,000 fine for possession with intent to distribute more than 50 kilograms of marijuana. If convicted of illegal reentry of a deported alien subsequent to an aggravated felony conviction, Padilla faces not more than 20 years in federal prison, and up to a $250,000 fine.
This case was investigated by HSI, the U.S. Forest Service, the Adams County Sheriff’s Office, the North Metro Task Force, and the Westminster Police Department.
The defendant is being prosecuted by Special Assistant U.S. Attorneys Kirsten Sinclair and Geoffrey Rieman.
The charges contained in the indictment are allegations. The defendant is presumed innocent unless and until proven guilty.
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Mexican National Charged with Stealing Identification DocumentsRead the Press Release
Enrique Torres, 43, of Philadelphia, Pennsylvania was charged today by Indictment with two counts of knowingly transferring identification documents of the United States, two counts of knowingly selling Social Security cards, and one count of unlawful reentry after deportation, announced United States Attorney Zane David Memeger.
The indictment alleges that the defendant, a Mexican national who previously was deported from the United States, sold identification documents, including two Social Security cards and one Legal Permanent Resident card.
If convicted the defendant faces a maximum possible sentence of 60 years in prison and a $1.25 million fine.
The case was investigated by Immigration and Customs Enforcement Homeland Security Investigations and is being prosecuted by Assistant United States Attorney Karen M. Klotz.
Click here to view the indictment
An Indictment 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, 215-861-8525Mexican Citizen Sentenced for Illegal ReentryRead the Press Release
LAFAYETTE, La. – United States Attorney Stephanie A. Finley announced today that Abelardo Antunez-Gama, 46, of Mexico, was sentenced by U.S. District Court Judge Richard T. Haik to 20 months in prison for illegal reentry with deportation upon service of sentence and no supervised release to follow. Antunez-Gama pleaded guilty August 8, 2013.
According to evidence presented at the guilty plea, local law enforcement found Antunez-Gama after conducting a traffic stop January 23, 2013 on Interstate 10, near Exit 36, east of Lake Charles, La. He was handed over to U.S. Border Patrol agents who discovered he had reentered the United States illegally three times previously, and had prior drug and firearm convictions. The defendant was convicted on March 2001 for possessing a firearm during commission of a drug crime and was deported in May 2001. He was found to be in the Unites States again in 2011 and was removed in May 2011. He was arrested near the Mexican border town of Del Rio, Texas, on June 9, 2011, was convicted on illegal reentry charges on November 17, 2011, served time in prison for the offense, and then was removed from the United States again in September of 2012.The U.S. Border Patrol and Homeland Security conducted the investigation. Assistant U.S. Attorney Myers P. Namie prosecuted the case.
Men Indicted on Fraud, Identity Theft, and Conspiracy ChargesRead the Press Release
BUFFALO, N.Y.--U.S. Attorney William J. Hochul, Jr. announced today that a federal grand jury in Buffalo has returned a 68-count indictment charging Brian Smith, 40, of Buffalo, N.Y., with defrauding various individuals, companies, and financial institutions, resulting in a total financial loss of over $1,000,000. The charges carry a maximum penalty of 30 years in prison, a fine of $1,000,000 or both. Brian Smith is also charged with aggravated identity theft, which carries a penalty of two years in prison. Kelly Atkinson, 30, of Wake Forest, North Carolina, was also indicted on 13 counts, related to his role in some of the schemes to defraud.
Assistant U.S. Attorney Maura K. O'Donnell, who is handling the case, stated that according to the indictment, Smith caused fraudulent loan applications and supporting documentation to be submitted to banks, credit unions, peer to peer lenders, and other business entities. In addition, Smith is accused of defrauding individuals out of funds under the guise of investing their money in real estate, when, in fact, he personally spent the money and did not purchase real estate. The indictment also charges Smith with using stolen identifying information from an individual to open a credit card and to obtain a vehicle.
Defendant Atkinson is charged with causing fraudulent loan applications and supporting documentation to be submitted to a credit union and another business for the purpose of obtaining loans.
The Indictment is the culmination of an investigation on the part of Special Agents of the Federal Bureau of Investigation, under the direction of Special Agent in Charge Brian P. Boetig and Special Agents from the United States Secret Service, under the direction of Special Agent in Charge Tracy Gast.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.Mark Lawrence Wilson Arraigned and Pleads Guilty in U.S. Federal CourtRead the Press Release
The United States Attorney's Office announced that during a federal court session in Missoula, on November 7, 2013, before U.S. Magistrate Judge Jeremiah C. Lynch, MARK LAWRENCE WILSON, a 45-year-old resident of Big Fork, was arraigned and pled guilty to unlawful drug user in possession of firearms and ammunition. Sentencing is set for February 20, 2014.
In an Offer of Proof filed by Assistant U.S. Attorney Paulette L. Stewart, the government stated it would have proved at trial the following:
On November 8, 2012, WILSON, an unlawful drug user of marijuana and cocaine, possessed 12 firearms and more than 5,200 rounds of ammunition in Flathead County.
On November 8, 2012, law enforcement executed search warrants on WILSON's car and Flathead County residence as the result of a four-month investigation regarding WILSON's use and distribution of cocaine.
Law enforcement located two handguns and a shotgun during the search warrant execution on WILSON's 2003 Chevy Tahoe that WILSON was driving at the time of his arrest. One of those handguns was a FN 5.7 x 28. The FN handgun appeared to be the same gun that WILSON brandished during a cocaine sale of two grams for $200 on November 2, 2012. Law enforcement also located three FN 5.7 x 28 magazines. The magazines contained 44 rounds of FN 5.7 x 28 ammunition.
Law enforcement located nine firearms; 5,235 rounds of ammunition, two bags of marijuana, suspected cocaine and LSD, one digital scale, and $1,550 cash from WILSON's Flathead County residence.
Law enforcement recovered more than 5,200 rounds of coordinating ammunition at WILSON's Flathead County residence. The types of ammunition recovered include shotgun shells, .45 caliber ammunition, 9mm ammunition, 7.62 x 39 ammunition, .223 caliber ammunition, .300 win mag ammunition, .22 caliber ammunition, and .357 caliber ammunition. There were more than 3,300 rounds of the 7.62 x 39 and the .223 caliber ammunition. Law enforcement also recovered three, 30-round .223 magazines and three, AK 7.62 x 39, 30-round magazines.
During this time and before, WILSON regularly used marijuana and cocaine. Witnesses reported to law enforcement that WILSON regularly sold and used these substances.
WILSON faces possible penalties of 10 years in prison, a $250,000 fine and 3 years supervised release.
The investigation was a cooperative effort between the Northwest Drug Task Force and the U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI).
Man Charged with Selling Counterfeit CurrencyRead the Press Release
BUFFALO, N.Y.--U.S. Attorney William J. Hochul, Jr. announced today that Novel Rogers, 25, of Buffalo, N.Y., was charged by criminal complaint with making, selling, and delivering fraudulent U.S. currency. The charges carry a maximum penalty of 20 years in prison, a fine of $250,000, or both.
Assistant U.S. Attorney Maura K. O'Donnell, who is handling the case, stated that according to complaint, Rogers sold counterfeit currency to a cooperating witness on several occasions. A search was later conducted at Rogers’ residence where law enforcement officers found that the defendant was in possession of over $16,000 in counterfeit bills which he had produced.
The criminal complaint is the result of an investigation by Special Agents from the United States Secret Service, under the direction of Special Agent in Charge Tracy Gast.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.Luz M. Vega, Accountant, Found Guilty of Health Care FraudRead the Press Release
SAN JUAN, Puerto Rico –Today, after 15 days of jury trial before U.S. District Court Judge Gustavo A. Gelpi, Luz M. Vega, Certified Public Accountant, president of Preferred Medical Equipment (PME) and professor at the Interamerican University in Arecibo, PR, was found guilty of conspiracy to commit health care fraud, 24 counts of health care fraud, three counts of Aggravated Identity Theft, 28 counts of payments of kickbacks, and two charges of money laundering, announced United States Attorney for the District of Puerto Rico, Rosa Emilia Rodríguez-Vélez.
The health care fraud scheme involved Luz M. Vega, Doctor Francisco Garrastegui, Lissette Acevedo, Luisa Nieves and María Elisa Pérez. According to the sixty-count indictment, from on or about April 2010, until on or about March 2011, PME submitted false claims to Medicare, seeking reimbursement for not medically necessary Durable Medical Equipment including: power wheelchairs, power pressure reducing air mattresses, wheelchair accessories, lumbar-sacral orthosis, knee orthosis and hospital beds. PME submitted at least 95 fraudulent claims totaling approximately $210,223.47, causing Medicare to disburse approximately $107,876.73. Defendants Garrastegui, Acevedo and Nieves pled guilty previously. The government will forfeit $107,876.73 and one bank account.
“As part of the nation’s health care system, Medicare serves vulnerable populations,” said United States Attorney, Rosa Emilia Rodríguez-Vélez. “Today’s verdict shows that we will not tolerate criminals who engage in fraudulent schemes which deplete the Medicare program of funds destined for our elderly population, in order to enrich themselves.”The case was investigated by the U.S. Department of Health and Human Services, Office of the Inspector General, with the assistance of the U.S. Secret Service and the Federal Bureau of Investigation. The prosecution was assigned to Assistant U.S. Attorney Héctor Ramírez-Carbó and Special Assistant US Attorney Wallace Bustelo. The defendant could face a possible sentence of up to 10 years in prison for the health care fraud, and a 24 months statutory term for the aggravated identity theft charges consecutive to any other counts of conviction.
Lincoln County Man Sentenced on Federal Child Pornography ChargesRead the Press Release
St. Louis, MO – MATTHEW M. HANSEN was sentenced to 20 years in prison on charges of attempting to entice minor boys to engage in sexually explicit conduct for him to videotape between 2007 and 2012.
According to court documents, Hansen was an elementary teacher at the Fort Zumwalt School District, a volunteer fireman and a camp counselor for the school district’s fifth grade camps. Investigation revealed that Hansen video recorded over 75 minor boys under the age of twelve undressing to take showers at the camps.
Hansen, Winfield, Missouri, pled guilty in July to eight felony counts of attempted production of child pornography. He appeared today in St. Louis before United States District Judge Jean C. Hamilton for sentencing.
This case was investigated by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI) and St. Charles County Cyber Crime Unit. Assistant United States Attorney Rob Livergood handled the case for the U.S. Attorney's Office.
Last Man Sentenced to 6 Years in federal prison for role in Sarasota Mortgage fraud conspiracyRead the Press Release
Tampa, Florida – U.S. District Judge Richard A. Lazzara sentenced J. Patrick Brester (41, Sarasota) yesterday to six years in federal prison for conspiring to commit wire fraud affecting a financial institution, and committing wire fraud affecting a financial institution. The court also ordered Brester to forfeit $1,995,800, which is traceable to proceeds of the offense. Brester was found guilty on June 4, 2013.
According to court documents and evidence presented at trial, Brester conspired with Michael Chadwick, Matthew Landsman, Joshua Unger, and others to engage in fraudulent cash-back-to-buyer mortgage transactions involving the 2007 purchase and sale of condominiums at Vintage Grand, a large condominium complex in Sarasota, Florida. Each fraudulent transaction involved Brester first purchasing the unit from the development company, Sarasota 432, LLC, and then simultaneously flipping it to Michael Chadwick. Brester and his co-conspirators deceived mortgage lenders about the true nature of the transactions by inflating the purchase prices of the properties, and ultimately the amount lent by the mortgage lenders, to include fees that were falsely described as “management fees" payable to shell corporations under their control.
In truth, the so-called “management fees” were actually the method by which Brester and his co-conspirators funneled cash back to themselves without the lenders’ knowledge. In furtherance of the conspiracy, Brester and his co-conspirators caused interstate wire transfers of the proceeds of the loans obtained from the victim mortgage lenders into bank accounts held in the name of shell companies, including IGS, Inc. and Landwick I, LLC. Evidence presented at trial showed that Brester made over $550,000 from his role in the conspiracy. Mortgage lenders incurred a loss of over $1.2 million from the conspiracy.
For his role in the scheme, Chadwick was sentenced to 12 months and one day in prison, on October 19, 2010. Landsman was sentenced to 2 years’ imprisonment on August 19, 2011. Unger was ordered to serve a 15 month prison term on June 27, 2013. All four were ordered to pay restitution to the financial institutions in the amount of $1,266,156.
This case was investigated by the Federal Bureau of Investigation and the Florida Department of Law Enforcement. It is being prosecuted by Assistant United States Attorneys Amanda L. Riedel and Matthew J. Mueller.
Lakeland man found guilty of trafficking in methamphetamineRead the Press Release
Tampa, Florida – Acting United States Attorney A. Lee Bentley, III announces that a federal jury yesterday found Ricky Muoio (Lakeland) guilty of distribution of methamphetamine and possession with intent to distribute methamphetamine. He faces a maximum penalty of life imprisonment in federal prison. A sentencing hearing is scheduled for January 27, 2014.
Muoio was indicted on May 1, 2013.
According to testimony and evidence presented at trial, on April 11, 2013, a confidential source (CS) working with the Drug Enforcement Administration (DEA) purchased two ounces of methamphetamine, for $3,000, from Muoio, at his Lakeland residence on Creekwood Run. On April 24, 2013, DEA agents executed a federal search warrant at the residence. In one of the bedrooms, they found and seized a total of approximately 1.5 ounces of methamphetamine, $3,500 in cash, and a digital scale.
This case was investigated by the Drug Enforcement Administration. It is being prosecuted by Assistant United States Attorney Kathy J.M. Peluso.
KC Man Pleads Guilty to Leading a nearly $100 Million, Nationwide Tax Fraud ConspiracyRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Kansas City, Mo., man pleaded guilty in federal court today to leading a tax fraud conspiracy that attempted to receive nearly $100 million in fraudulent refunds from the IRS. Co-conspirators from eight states were involved in filing fraudulent tax returns in the largest federal false claims case that has ever been prosecuted in Missouri.
“This scheme was based on a nonsensical formula that any honest person would instantly recognize was patently absurd and fraudulent,” Dickinson said. “Fortunately, the vast majority of these refund claims were detected by the IRS and denied. Those who profited from the scheme at the expense of law-abiding taxpayers will be held accountable.”
Gerald A. Poynter, also known as “Brother Jerry Love,” 48, of Kansas City, Mo., pleaded guilty before U.S. District Judge Brian C. Wimes to one count of conspiracy to defraud the United States by filing fraudulent tax returns and one count of filing a fraudulent tax return.
Under the terms of today’s plea agreement, Poynter will be sentenced to 13 years in federal prison without parole and must pay $951,930 in restitution to the government.
Poynter admitted that conspirators prepared and filed 284 fraudulent tax returns from July 1, 2008, to Sept. 21, 2011. Each of the returns contained false claims that the taxpayer listed was due a refund due to over-withholding of taxes, based on fictitious forms 1099-OID. In actuality, Poynter’s clients had not received interest income from the banks and lenders listed on their Forms 1099, nor had any money been over-withheld. Conspirators claimed that a total of $96 million dollars in fraudulent tax refunds were due. The IRS mistakenly paid out $3.5 million on these fraudulent claims.
Some individuals received hundreds of thousands of dollars in refunds. For the returns that successfully were paid out, Poynter received a fee. In an attempt to mask his involvement, Poynter requested that conspirators refer to his fees as “love donations,” frequently directing them to write checks to “Jerry Love Ministries.” Poynter used computer software to file returns electronically from his karate studio in Blue Springs.
Poynter filed returns in his own name, and in the names of his family. Poynter received a refund of $196,348 as a result of filing a fraudulent claim in July 2008. Poynter personally was responsible for recruiting at least 44 filers to the scheme. Poynter submitted at least $25 million in fraudulent claims on 81 returns filed for his clients, which caused a tax loss to the United States of at least $951,930.
Poynter also recruited “branch managers” who in turn recruited additional filers to the scheme.
Poynter is among 11 defendants who have pleaded guilty, including Kristi Jones, 41, of Riverside, Mo.; Shirley Oyer, 72, of Overland Park, Kan.; Jennifer Wilson, 36, of Cumming, Ga.; Mark J. Murray, 51, of Newton, Ala.; John V. Perdido, 57, of Temecula, Calif.; Earl Lee Davis, 54, of Monroe, La.; Robert E. Morris, 67, of Rocklin, Calif.; and Karen A. Olson, 42, of Wood Dale, Ill. Marian Fine-Kennedy, 36, of Eugene, Ore., and Maria Haro Campos, 42, of Vista, Calif., have each pleaded guilty in separate but related cases.
Poynter conducted a training seminar in December 2008 at the Doubletree Hotel in Atlanta, Ga. At the seminar, Poynter gave a presentation outlining his “OID process,” during which he pointed out that the IRS would issue refunds even if the name listed on the OID form was “Spongebob Squarepants” or “Spiderman.” Poynter told attendees they would use a rented office rather than process the OID returns at home to avoid their homes being raided by the FBI. He talked about attracting attention from IRS criminal investigators, and he provided pointers on how to avoid that outcome. He also joked that his going to prison was a possibility.
In addition to this training session, Poynter conducted and participated in numerous other seminars and conference calls around the country to promote his OID process. Poynter also maintained a Web site called “luckytown” that was used to promote the scheme.
Oyer, the owner of ABC Seamless Siding in Kansas City, Mo., was a promoter and branch manager who recruited at least a dozen clients in furtherance of the scheme. She helped these individuals prepare and file at least 26 fraudulent returns, claiming $12.4 million in refunds. Of those attempts, the IRS paid out $92,974 and denied the remainder. Oyer did not file any returns in her name, and her personal total profit from the scheme was $2,862.
Perdido, who acted as a branch manager and recruited clients for the scheme, received the largest single refund from the scheme – $805,749, which must be forfeited to the government. Perdido received the refund on Feb. 6, 2009, and deposited the check into his bank account on Feb. 11. Perdido and his wife signed the check with “by:” in front of their names, a Sovereign Citizen practice.
More than $500,000 was quickly removed from Perdido’s bank accounts, with four wire transfers to the Philippines of $100,000 each that were used to purchase a car and a house in Batung. Perdido also bought an $11,000 Rolex watch, paid off his credit cards, and invested $200,000 in a private company (Helios). Before he received his refund, Perdido expressed concerns about the process’s legality. After getting the refund, he was concerned about cashing or depositing the check because the IRS might prosecute him. Even after expressing concerns about his potential prosecution for getting the refund check, Perdido became an affiliate in the scheme.
1099-OID Tax Fraud Scheme
Conspirators utilized 1099-Original Issue Discount forms as part of their scheme.
These forms are legitimately used by tax filers who must pay taxes on income they receive from the interest on their bond investments. Tax on certain bonds must be paid as income accrues. Bond holders receive annual forms, called 1099-Original Issue Discount (OID), from the debt issuers. Bond holders then file these OID forms with the IRS, along with their income tax forms.
However, the scheme described in the indictments utilized the 1099-OID forms in a nonsensical manner. Clients of the conspirators, working with their branch managers, assembled financial documents such as mortgage and loan statements, car payments, foreclosure records, bank statements, credit card statements, and other records of debt and spending. Poynter and his staff used this debt information – rather than any actual bond income – to prepare and/or finalize false tax returns and improperly calculated Forms 1099-OID.
These tax returns falsely claimed that the filers had received income from bond proceeds and that federal income tax had been withheld. The fraudulent returns claimed the government had over-withheld taxes from the clients’ OID bond income, making the clients appear entitled to more than $96 million in tax refunds.
In reality, Poynter’s clients had not earned – or paid tax on – any bond income. No bond payer had issued any 1099-OID forms. Instead, the bond income that was listed was calculated by what the indictment describes as an “arbitrary and capricious formula.” Conspirators simply added up the taxpayers’ debts and spending and listed those creditors as “payers” of bond interest.
OID Fraud Web Site
A Web site has been established to provide information about the status of this investigation. Updates about this investigation and related cases will be posted at www.justice.gov/usao/mow/divisions/OIDfraud.html
This case is being prosecuted by Assistant U.S. Attorney Daniel M. Nelson. It was investigated by IRS-Criminal Investigation and the Treasury Inspector General for Tax Administration (TIGTA).Iraqi-Based Construction Company Pays $2.7 Million for Alleged False Claims in Bribery SchemeRead the Press Release
NEWARK, N.J. – Iraqi Consultants and Construction Bureau (ICCB) has paid the United States $2.7 million to resolve allegations that it violated the False Claims Act by bribing a government official to obtain United States government contracts in Iraq, the Department of Justice announced today. ICCB is a privately owned construction company headquartered in Baghdad, Iraq.
“It is offensive that anyone would see projects to promote stability, health and education in a rebuilding country as a way to make illegal cash on the side; we will not abide companies paying to play in such a system,” said Paul J. Fishman, U.S. Attorney for the District of New Jersey.
The government alleged that from 2007 to 2008, ICCB paid bribes to Army Corps of Engineers procurement official John Salama Markus, 41, of Nazareth, Pa., to obtain information that gave it an advantage in bidding on several construction contracts with the Department of Defense in Iraq. The contracts supported reconstruction efforts in the Iraq war, including infrastructure and security projects and the building of medical facilities and schools. ICCB then knowingly overcharged the United States for services provided under the contracts, according to the government’s allegation.
“Bribery will not be tolerated in government contracting,” said Stuart F. Delery, Assistant Attorney General for the Justice Department’s Civil Division. “We will ensure that government contracts are awarded on merit and pursue allegations of fraudulently procured contracts wherever they occur.”
“The Defense Criminal Investigative Service (DCIS) is committed to protecting the integrity of the Defense acquisition process from personal and corporate avarice,” said Craig Rupert, Special Agent in Charge, DCIS Northeast Field Office. “Ensuring the proper use of U.S. taxpayers’ dollars and preventing contract fraud is in our nations’ interest and remains a priority.”
The settlement is part of a larger investigation initiated by the U.S. Attorney’s Office for the District of New Jersey. As part of that investigation, Markus pleaded guilty on Sept. 7, 2012, to wire fraud, money laundering and failure to report a foreign bank account in connection with more than $50 million in contracts awarded to foreign companies in Gulf Region North, Iraq. Markus was sentenced to 13 years in prison on March 12, 2013, in Newark federal court.
The investigation is being handled by the U.S. Attorney’s Office for the District of New Jersey and the Civil Division’s Commercial Litigation Branch, in cooperation with the Defense Criminal Investigative Service, the Major Procurement Fraud Unit of the Army’s Criminal Investigation Command, the Criminal Investigative Division of the Internal Revenue Service, and the Department of Homeland Security.
The claims resolved by the settlement are allegations only; there has been no determination of liability.
13-431ICCB Settlement
Iraqi-Based Construction Company Pays $2.7 Million <br /> to U.S. for Alleged False Claims in Bribery SchemeRead the Press Release
Iraqi Consultants and Construction Bureau (ICCB) has paid the U.S. $2.7 million to resolve allegations that it violated the False Claims Act by bribing a U.S. government official to obtain U.S. government contracts in Iraq, the Department of Justice announced today. ICCB is a privately owned construction company headquartered in Baghdad, Iraq.
“Bribery will not be tolerated in government contracting,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery. “We will ensure that government contracts are awarded based on merit and pursue allegations of fraudulently procured contracts wherever they occur.”
The government alleged that, from 2007 to 2008, ICCB paid bribes to Army Corps of Engineers procurement official John Salama Markus, 41, of Nazareth, Pa., to obtain information that gave it an advantage in bidding on several construction contracts with the Department of Defense in Iraq. The contracts supported reconstruction efforts involving the Iraq war, including infrastructure and security projects and the building of medical facilities and schools. ICCB then knowingly overcharged the U.S. for services provided under the contracts, according to the government’s allegation.
“It is offensive that anyone would see projects to promote stability, health and education in a rebuilding country as a way to make illegal cash on the side,” said U.S. Attorney for the District of New Jersey Paul J. Fishman. “We will not abide companies paying to play in such a system.”
“The Defense Criminal Investigative Service (DCIS) is committed to protecting the integrity of the Defense acquisition process from personal and corporate avarice,” said Special Agent in Charge, DCIS Northeast Field Office Craig Rupert. “Ensuring the proper use of U.S. taxpayers’ dollars and preventing contract fraud is in our nation’s interest and remains a priority.”
The settlement is part of a larger investigation initiated by the U.S. Attorney’s Office for the District of New Jersey. As part of that investigation, Markus pleaded guilty on Sept. 7, 2012, to wire fraud, money laundering and failure to report a foreign bank account in connection with more than $50 million in contracts awarded to foreign companies in Gulf Region North, Iraq. Markus was sentenced to 13 years in prison on March 12, 2013, in Newark, N.J., federal court.
The investigation is being handled by the U.S. Attorney’s Office for the District of New Jersey and the Civil Division’s Commercial Litigation Branch, in cooperation with the Defense Criminal Investigative Service, the Major Procurement Fraud Unit of the Army’s Criminal Investigation Command, the Criminal Investigative Division of the Internal Revenue Service and the Department of Homeland Security. The claims resolved by the settlement are allegations only; there has been no determination of liability.
Home Health Agency Owner Sentenced for Role in $13.8 Million Medicare Fraud SchemeRead the Press Release
Detroit-area resident Javed Rehman was sentenced to serve 60 months in prison today for his role in a $13.8 million Medicare fraud scheme.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan, Special Agent in Charge Paul M. Abbate of the FBI’s Detroit Field Office, and Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Office of Investigations’ Detroit Office made the announcement.
Rehman, 50, of Farmington Hills, Mich., was sentenced by U.S. District Judge Gerald E. Rosen in the Eastern District of Michigan. In addition to his prison term, Rehman was sentenced to serve two years of supervised release and was ordered to pay $1,734,801 in restitution, jointly and severally with his co-defendants. Rehman pleaded guilty on July 12, 2013, before Judge Rosen to one count of conspiracy to commit health care fraud.
According to court records, in or around May 2009, Rehman purchased Quantum Home Care Inc. with co-conspirators Tausif Rahman and Muhammad Ahmad. Rehman paid kickbacks to recruiters to obtain Medicare beneficiary information used to bill Medicare for home health services – including physical therapy and skilled nursing services – that were never rendered. Rehman was the administrator of Quantum and was responsible for the submission of false and fraudulent claims to Medicare based on falsified files created by the co-conspirators.
Medicare paid approximately $1.7 million to Quantum for physical therapy and skilled nursing services that Quantum purported to render between approximately June 2009 and September 2011. According to court documents, between 2008 and 2009, Rehman’s co-conspirators acquired control of three other home health care companies. The four companies, including Quantum, received approximately $13.8 million from Medicare in the course of the conspiracy.
Rahman pleaded guilty on Jan. 5, 2012, to one count of conspiracy to commit health care fraud and one count of money laundering and is scheduled for sentencing on May 21, 2014. Ahmad pleaded guilty on Aug. 28, 2012, to one count of conspiracy to commit health care fraud and is scheduled for sentencing on May 14, 2014.
This case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan. The case is being prosecuted by Assistant Chief Catherine K. Dick of the Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,500 defendants who have collectively billed the Medicare program for more than $5 billion. In addition, HHS’s Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.Hogsett Presents United States Attorney Awards to Local, Federal Law Enforcement OfficersRead the Press Release
FISHERS – Joseph H. Hogsett, the United States Attorney, was in Hamilton County today to acknowledge the presentation of U.S. Attorney Awards to four federal and local law enforcement officers. Joined by United States Marshal Kerry Forestal, HSI-ICE Assistant Special Agent-in-Charge Gary Woolf, Carmel Police Chief Tim Green, and Fishers Police Chief George Kehl, Hogsett applauded the significant impact of these four individuals in a child exploitation prosecution involving an Indiana minor.
“The work of these individuals on this case is an example of law enforcement at its best,” Hogsett said. “This was a complicated case with many moving parts, but the selfless dedication and tireless work of our partners here in Hamilton helped stop the victimization of a young child and ensure the defendants were held fully accountable.”
The United States Attorney Award was established in 2003 to recognize outstanding law enforcement work in Hoosier communities as part of federal investigations and prosecutions. Just twenty total awards were awarded in 2013, and the Carmel and Fishers police departments were two of only six local law enforcement agencies to be recognized. Those honored today included:
• Detective John Pirics, Carmel Police Department
• Detective J.D. Floyd, Fishers Police Department
• Special Agent Mike Johnson, Department of Homeland Security
• Senior Inspector Tammy Hammons of the United States Marshals ServiceIn February 2013, these four individuals participated in a joint operation by the Indiana Internet Crimes Against Children Task Force. That investigation involved the criminal conduct of Leslie Woods, an Indiana resident who had failed to register as a sex offender, and Brock Boston, a resident of Columbus, Indiana.
Woods and Boston together had met and formed a relationship with a minor boy in Ohio who they filmed while he engaged in sexually explicit conduct. In addition, Boston was also found to be producing child pornography involving a four year-old family member. The two men were subsequently found to possess large collections of child pornography that they had acquired from other sources.
According to Assistant U.S. Attorney Gayle Helart, who prosecuted the case for the government, the extraordinary work of these four individuals was vital in convicting the two men. Boston was sentenced in May of this year to 28 years in federal prison, and Woods was sentenced to 26 ½ years in federal prison. Both were also ordered to serve lifetime supervised release when their prison terms are completed.
Hartford Residents Charged with Operating Identity Theft and Credit Card Scheme, Counterfeiting OffensesRead the Press Release
Deirdre M. Daly, Acting United States Attorney for the District of Connecticut, announced that JONATHAN PRESTON, 22, and LUMI NUNEZ, 33, of Hartford, were arrested today on a criminal complaint alleging that they operated an extensive identity theft and credit card fraud scheme, and engaged in counterfeiting offenses.
PRESTON and NUNEZ were arrested this morning at their residence at 848 Capitol Avenue in Hartford. They appeared this afternoon before U.S. Magistrate Judge Donna F. Martinez in Hartford and are detained pending a hearing that is scheduled for tomorrow.
As alleged in the criminal complaint, PRESTON and NUNEZ used the Internet and other sources to obtain personal identifying information of several prominent individuals, and used that information to pose as their victims to gain access to the victims’ credit card accounts. Since approximately 2010, it is alleged that PRESTON and NUNEZ used the credit card accounts to make more than $500,000 in unauthorized purchases and cash withdrawals. The purchases included automobiles, Vespa scooters, jewelry, and a limousine trip from Connecticut to Ohio.
Members of the U.S. Secret Service, Hartford Police Department and Connecticut Financial Crimes Task Force conducted a court-authorized search of the defendant’s residence today and seized from the premises a BMW 650i automobile that had allegedly been rented for $16,000 using a fraudulent credit card account number.
The complaint further alleges that a previous search of a Hartford residence occupied by PRESTON and NUNEZ revealed counterfeit $50 bills and counterfeiting instructions.
The complaint specifically charges PRESTON and NUNEZ with manufacturing counterfeit currency, passing counterfeit currency, and conspiracy.
Acting U.S. Attorney Daly stressed that a complaint is only a charge and is not evidence of guilt. Charges are only allegations and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This investigation is being conducted by the U.S. Secret Service, Hartford Police Department and Connecticut Financial Crimes Task Force. The Task Force includes members of the U.S. Secret Service, U.S. Postal Inspection Service, Internal Revenue Service – Criminal Investigation, Connecticut State Police, and the Greenwich, Hartford, Monroe, Stamford, Shelton, Stratford and Waterford Police Departments. The case is being prosecuted by Assistant U.S. Attorney Edward Chang.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
[email protected]George Theodore Sutherland Pleads Guilty in U.S. Federal CourtRead the Press Release
The United States Attorney's Office announced that during a federal court session in Great Falls, on November 7, 2013, before U.S. Magistrate Judge Keith Strong. GEORGE THEODORE SUTHERLAND, a 21-year-old resident of Box Elder and an enrolled member of the Chippewa Cree Indian Tribe, pled guilty to assault resulting in serious bodily injury. Sentencing has been set for February 7, 2014. He is currently detained.
In an Offer of Proof filed by Assistant U.S. Attorney Danna R. Jackson, the government stated it would have proved at trial the following:
On April 3, 2012, within the exterior boundaries of the Rocky Boy(s Indian Reservation, SUTHERLAND chased the victim down a road, intentionally kicking her and causing the victim to fall and strike her head on the ground.
As a result of the fall, the victim suffered a gash on her temple. The victim sought treatment at the Northern Montana Hospital Emergency Room. The victim bled a significant amount. In addition to receiving several sutures, the victim was treated for her extreme physical pain.
SUTHERLAND faces possible penalties of 10 years in prison, a $250,000 fine and 3 years supervised release.
The investigation was conducted by the Federal Bureau of Investigation.
Four Members of Colombian Guerilla Organization Indicted on Charges in 2000 Kidnapping-Three U.S. Nationals Were Among the Hostages Taken by the ELN-Read the Press Release
WASHINGTON – Four members of a violent guerilla organization were indicted today on conspiracy and hostage-taking charges stemming from the kidnapping of more than 60 people in Colombia in 2000, including three United States nationals. As a result of the ensuing captivity, three Colombian citizens who were taken hostage by the kidnappers died.
The indictment, returned by a grand jury in the U.S. District Court for the District of Columbia, was announced by Ronald C. Machen Jr., U.S. Attorney for the District of Columbia, and Michael B. Steinbach, Special Agent in Charge of the FBI’s Miami Field Division.
According to the indictment, at the time of the crimes, the defendants were members of the Ejercito De Liberación Nacional (ELN), which in English translates to the National Liberation Army. Since its inception in 1964, the ELN has engaged in an armed conflict to overthrow the democratically elected government of the Republic of Colombia. The ELN has engaged in terrorist activity, including murder, hostage-taking and the violent destruction of property.
Those indicted today include Eudes Ojeda Ovando, 44, also known as “El Tuerto” and “Martin;” Fidel Castro Murillo, 54, also known as “El Profe” and “Daniro Rodriguez” and two others identified as John Does. They were each charged with one count of conspiracy to commit hostage-taking resulting in death and three counts of hostage-taking. None of the defendants is in custody. If convicted of these charges following an extradition, each defendant would face a maximum term of 60 years of incarceration, the maximum sentence permitted under Colombian law for Colombian nationals extradited to the United States for prosecution.
“The indictment returned today alleges that four members of an armed and violent guerilla organization held more than 60 hostages – including American citizens – for ransom in the Colombian jungle,” said U.S. Attorney Machen. “During this harrowing ordeal, members of this insurgent group allegedly fired at Colombian military helicopters searching for the hostages and armed themselves with bazookas to resist the military operation pursuing the guerillas. This prosecution demonstrates our commitment to pursuing members of foreign terrorist organizations who target Americans as well as our resolve to seeking justice for the three Colombian citizens who actually died during this hostage ordeal.”
“The ELN is a foreign terrorist organization whose members have engaged in violent acts against American and Colombian citizens. These indictments today demonstrate the FBI’s commitment to bring these ELN members to justice,” said Special Agent in Charge Steinbach. “The outstanding, long-term cooperation between the Colombian National Police and U.S. law enforcement has dealt another blow to international terrorism.”
According to the indictment, the defendants were among the leaders of a series of kidnappings carried out on Sept. 17, 2000. The three U.S. nationals – a woman, her brother, and her sister-in-law – were taken hostage at a country home roughly 30 minutes outside of Cali, Colombia. More than 60 others, all Colombian nationals, were taken hostage at two restaurants in the area. The restaurants and country home were all near Kilometer 18 of a road that led from Cali to Buenaventura, Colombia. The hostages were forced into vehicles and taken into the Colombian jungle and mountains. One of the U.S. nationals, a 66-year-old man, was released at that point because of concerns he would not survive a journey through the jungle and mountains and would also slow down the kidnappers during their escape from Colombian authorities.
The indictment alleges that the defendants and their co-conspirators used firearms to keep and detain the hostages; threatened to kill the hostages; conducted or attempted to conduct negotiations for ransom with family members of the hostages, and demanded that military operations by the armed forces of the Republic of Colombia against the hostage-takers cease. On the second day of the ordeal, the kidnappers released another one of the U.S. nationals – a 58-year-old woman – so that she could personally convey one of their ransom demands. The third U.S. national, a 69-year-old woman, was released on Sept. 20, 2000 after three days in captivity, but the kidnappers continued to hold her adult son as a hostage and continued to demand that she pay a large ransom for his release.
The rest of the hostages remained with the ELN, some for several weeks. During this time-frame, the indictment alleges, the ELN conspirators fired at helicopters of the Colombian military members who were attempting to locate the hostages, and also armed bazookas intended to be used against the Colombian military. Three hostages, all Colombian nationals, died as a result of the extreme conditions: Dr. Miguel Nassif, Carlos Alberto Garcia, and Alejandro Henao Botero. According to the indictment, all were denied medical treatment by their captors.
By early November 2000, the last remaining hostages were finally released to representatives from the Colombian Red Cross and the Colombian Peace Commissioner. Even after that, however, the kidnappers pressed on with ransom demands.
An indictment is merely a formal charge that a defendant has committed a violation of criminal laws. Every defendant is presumed innocent until and unless found guilty.
The charges were the result of an investigation led by the FBI=s Miami Field Division and are being prosecuted by Assistant U.S. Attorneys Brenda J. Johnson and Fernando Campoamor-Sanchez of the U.S. Attorney’s Office for the District of Columbia. Assistance also was provided by the FBI Office of the Legal Attaché in Colombia.
13-384Fort Yates Man Sentenced for AssaultRead the Press Release
BISMARCK– U.S. Attorney Timothy Q. Purdon announced that on Nov. 7, 2013, Tracy Peters, 47, Fort Yates, N.D., pleaded guilty and was sentenced by U.S. Magistrate Judge Charles S. Miller Jr. on a charge of assault by striking, beating or wounding for assaulting a woman with whom he had a relationship.
Magistrate Judge Miller sentenced Peters to two years of probation. Peters was ordered to complete 60 hours of community service, to pay restitution of $536 and to pay a $25 special assessment to the Crime Victim’s Fund.
On April 20, 2013, Peters, a non-Indian, assaulted an Indian woman on the Standing Rock Indian Reservation. The woman suffered bruising to her face.
Under the Violence Against Women Reauthorization Act of 2013, the penalty was increased for the offense of assault by striking, beating or wounding from a class B misdemeanor, with a maximum penalty of up to 6 months’ imprisonment, to a class A misdemeanor, with a maximum penalty of up to 1 year’s imprisonment.
The case was investigated by the Bureau of Indian Affairs – Standing Rock Agency.
Assistant U.S. Attorney Gary Delorme and Special Assistant U.S. Attorney Grant Walker prosecuted the case.Former Seattle Investment Advisor Convicted of Wire Fraud, Money Laundering and Investment Advisor FraudRead the Press Release
A long-time Seattle investment advisor was convicted today by a federal jury of 32 criminal counts including wire fraud, money laundering and investment advisor fraud, announced U.S. Attorney Jenny A. Durkan. MARK F. SPANGLER, 58, formerly of Seattle, (who now resides in Portland, Oregon) promised his clients that he would protect their life’s savings by investing it in safe investments. Instead, SPANGLER diverted their money – without their knowledge or consent – to two risky start-up companies that he controlled and in which he had a significant financial stake. The jury deliberated for two days following the three week trial. U. S. District Judge Ricardo S. Martinez will sentence SPANGLER on February 6, 2014.
“Mark Spangler gambled with other people’s money without their knowledge – he defrauded friends and family members who trusted him with their life’s savings,” said U.S. Attorney Jenny A. Durkan. “This defendant used his position of trust as a tool to cheat his clients out of money for their mortgages, their children and grandchildren’s education, their retirement and plans for charitable giving.”
The evidence at trial demonstrated that SPANGLER repeatedly violated his fiduciary duty as an investment advisor by hiding where his clients’ money was invested, and by providing them with false account statements which, among other things, drastically inflated the value of their investments. SPANGLER told his clients that their assets were worth over $73 million. However, after SPANGLER ran out of money and put his business into receivership, only approximately $28 million was recovered for the victims, resulting in a loss of approximately $50 million.
Many of the investors who testified in court described how they were told their funds were conservatively invested in publicly traded companies and in bonds. SPANGLER provided them false quarterly account statements fraudulently inflating the value of their accounts and how the money was invested. When some investors sought to liquidate their holdings SPANGLER ran a Ponzi scheme using new money from investors to pay out the other investors. Eventually, SPANGLER was unable to raise money to cover all the liquidation requests and was forced to place his investment business into receivership. At trial, prosecutors presented evidence that federal law enforcement officials executed a search warrant at SPANGLER’s residence on September 23, 2011, disrupting SPANGLER’s plans to flee the jurisdiction. SPANGLER had purchased airline tickets for Ecuador with his wife, Luanne Renfrow, and they were planning to leave on September 25, 2011. The couple had also placed their million dollar Capitol Hill home and his $890,000 yacht up for sale when the search warrant was executed.
“The FBI is pleased that Mr. Spangler will be held accountable for hurting people who trusted him,” said Special Agent-in-Charge Laura M. Laughlin of the FBI Seattle office. “Mr. Spangler exploited clients who specifically chose him for a reputation of honesty and integrity, then he constructed layers of deceit to mask his exploitation. The FBI has been proud to partner with the USAO, IRS, and SEC in ending Mr. Spangler's callous criminal activity.”
“This case is a clear example of how greed triumphed over friendship, judgment and honesty,” said Kenneth J. Hines, Special Agent in Charge of the Seattle Field Office, IRS Criminal Investigation. “The title “Investment Advisor” is used by professionals all over the country as they assist their clients in securing their financial future. But when a fraudster uses that title to prey on the dreams of investors, federal law enforcement will hold them accountable. The jury’s message today to Mr. Spangler was, ‘guilty.”
During the course of his scheme, SPANGLER and his company collected over $4 million in investment advisor fees from his clients and over $1 million in fees from the two startup companies. SPANGLER also stood to gain approximately 20% of any profits from the investments he made in the two startup companies if they turned out to be successful. At the very same time SPANGLER was losing tens of millions of his clients’ money, SPANGLER used client fees to live a life of luxury. SPANGLER traveled the world, purchased an $890,000 yacht, and a $20,000 engagement ring.
The case was investigated by the FBI and Internal Revenue Service Criminal Investigation (IRS-CI).
The case is being prosecuted by Assistant United States Attorneys Carl Blackstone, Mike Lang, and Francis Franze-Nakamura.Former School Principal Sentenced to Two Years in Prison for Possession of Child PornRead the Press Release
PHILADELPHIA - Troy Czukoski, 43, of Exton, PA, was sentenced today to 24 months in prison for possessing more than 150, but less than 300, images of children engaging in sexually explicit conduct. At the time of the investigation, Czukoski was serving as Principal of the Springton Lake Middle School in the Rose Tree Media School District in Delaware County. In addition to the prison term, U.S. District Court Judge Legrome D. Davis ordered 10 years of supervised release, a $10,000 fine and a $100 special assessment. Czukoski must report to prison on December 30, 2013.
Czukoski was identified through a website that sells child porn. Records from that website showed the Czukoski had made purchases from 2008 through 2011. A warrant was then executed on the defendant=s home, during which the defendant confessed that he had purchased the pornographic content over the internet. Agents with the U.S. Postal Inspection Service found numerous CDs and DVDs, as well as two flash drives that contained images and video of child porn. Czukoski pleaded guilty on May 10, 2013.
The case was investigated by the United States Postal Inspection Service and was prosecuted by Assistant United States Attorney Michelle Rotella.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Former Mental-Health Clinic Therapist Sentenced for Role in $55 Million Medicare Fraud SchemeRead the Press Release
A former therapist for Biscayne Milieu, a Miami-based mental-health clinic, was sentenced yesterday to serve 120 months in prison for his participation in a $55 million Medicare fraud scheme.
U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, Special Agent in Charge Michael B. Steinbach of the FBI’s Miami Field Office; and Special Agent in Charge Christopher B. Dennis of the U.S. Department of Health and Human Services’ Office of Inspector General (HHS-OIG) Miami office made the announcement.
Jose Rojo, 39, of Miami, was sentenced by U.S. District Judge Marcia G. Cooke in the Southern District of Florida. Rojo was convicted on Aug. 7, 2013, of one count of conspiring to commit health care fraud following a one-month jury trial. In addition to the prison term, Rojo was ordered to pay more than $11 million in restitution, jointly and severally with his co-defendants, and to serve three years of supervised release.
According to the evidence at trial, Rojo and his co-conspirators caused the submission of more than $55 million dollars in fraudulent claims to Medicare through Biscayne Milieu, which purportedly operated a partial hospitalization program (PHP) – a form of intensive treatment for severe mental illness. Instead of providing PHP services, the defendants devised a scheme in which they paid patient recruiters to refer ineligible Medicare beneficiaries to Biscayne Milieu for services that were never provided. Many of the patients admitted to Biscayne Milieu were not eligible for PHP because they were chronic substance abusers, suffered from severe dementia and would not benefit from group therapy, or had no mental health diagnosis but were seeking exemptions for their U.S. citizenship applications.
The evidence at trial further showed that, as a therapist at Biscayne Milieu, Rojo conducted sham therapy sessions for patients he knew were ineligible for PHP treatment. Often Rojo showed up late for these sessions or not at all, but Medicare was still billed as if a full session took place. Rojo created fraudulent documents to help cover-up Biscayne Milieu’s massive fraud, including bogus treatment plans and phony group therapy notes that were copied from one document to the other. Deliberately inaccurate group therapy notes for different patients on different days – often years apart – were in many respects identical, including having the same descriptions of patients’ statements in group sessions and even the same misspelled words. Further, Rojo provided other therapists at the clinic with fake group therapy notes for a fee. Biscayne Milieu billed Medicare for tens of millions of dollars in PHP treatments for these patients.
Various owners, doctors, managers, therapists, patient brokers and other employees of Biscayne Milieu have also been charged with health care fraud, kickback violations, money laundering and other offenses in two indictments unsealed in September 2011 and May 2012. Biscayne Milieu, its owners, and more than 25 of the individual defendants charged in these cases have pleaded guilty or have been convicted at trial. Antonio and Jorge Macli and Sandra Huarte – the owners and operators of Biscayne Milieu – were each convicted at trial and were sentenced in April 2013 to 30 years, 25 years and 22 years in prison, respectively.
This case was investigated by the FBI with the assistance of HHS-OIG and was brought by the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida. The case is being prosecuted by Assistant U.S. Attorneys Marlene Rodriguez and James V. Hayes of the Southern District of Florida; Hayes was formerly a trial attorney of the Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,500 defendants who have collectively billed the Medicare program for more than $5 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to www.stopmedicarefraud.gov.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Former Clay County Officials Admit to Racketeering ConspiracyRead the Press Release
LEXINGTON, KY - Former public officials from Manchester, KY., admitted in federal court that they conspired to organize a long running criminal enterprise to achieve personal gain and control over the politics in Clay County.
Former longtime Clay County Circuit Judge, Russell Cletus Maricle; schools superintendent, Douglas C. Adams; county clerk, Freddy W. Thompson; democratic election commissioner, Charles W. Jones; and election officer William E. Stivers pleaded guilty to a racketeering conspiracy before U.S. District Judge Karen Caldwell on Wednesday.
The defendants admitted that starting in 2002 they conspired to gain control of the Clay County board of elections and corruptly used the board’s authority to control the outcome of elections in the county. In order to carry out this scheme, the defendants acknowledged that they pooled their money together to bribe voters and that they also appointed corrupt election officers who ensured that the bribed voters delivered for the slate of candidates that the members of the conspiracy wanted to win.
Three other co-defendants, Stanly Bowling, and Debra and Bart Morris previously pleaded guilty to the same charge.
Sentencing for the defendants is scheduled for February. Maricle faces a maximum of 87 months imprisonment; Adams, a maximum of 75 months imprisonment; Thompson, a maximum of 66 months imprisonment; Jones, a maximum of 69 months imprisonment; and Stivers, a maximum of 72 months imprisonment. However, any sentence following a conviction would come after the Court considers the U.S. Sentencing guidelines and the federal statutes.
Former Chief Executive Officer of Hospital for Special Surgery Sentenced in Manhattan Federal Court to 18 Months in Prison for Participating in Fraudulent Kickback SchemeRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that JOHN R. REYNOLDS, the former Chief Executive Officer (“CEO”) of the Hospital for Special Surgery (the “Hospital”), was sentenced today in Manhattan federal court to 18 months in prison for participating in a fraudulent scheme in which he was paid nearly $300,000 in undisclosed kickbacks from a subordinate Hospital employee. REYNOLDS pled guilty in July 2013 to one count of wire fraud and one count of making false statements to a law enforcement agent. He was sentenced by U.S. District Judge Harold Baer, Jr.
Manhattan U.S. Attorney Preet Bharara said: “During his tenure as CEO of a world-renowned New York hospital, John Reynolds shamelessly put his own personal interests above those of the institution he was charged with running. The successful prosecution of Mr. Reynolds reaffirms the Office’s unwavering commitment to stamping out corruption, particularly by those who abuse positions of power and authority.”
According to the allegations in the Indictment and Superseding Information filed in Manhattan federal court, as well as statements made during court proceedings:
From 1986 until 1997, REYNOLDS served as the Chief Financial Officer of the Hospital, the oldest orthopedic hospital in the United States. In 1997, he was promoted to the position of CEO, and served in that capacity as a full-time Hospital employee until October 2006. In order to effectuate a smooth transition in Hospital leadership to a newly hired CEO, REYNOLDS served as a contract employee in the same position from October 2006 through December 2008.
Between 2000 and 2005, REYNOLDS demanded and received approximately $298,500 in kickbacks from a subordinate employee of the Hospital in exchange for negotiating payment of that employee’s annual bonus. During this same time period, REYNOLDS also repeatedly made false statements to, and deliberately withheld information from, the Hospital’s board of directors about certain conflicts of interest, including his undisclosed financial arrangement with the subordinate Hospital employee.
In addition, in May 2008, during the course of the investigation of his involvement in this fraudulent scheme, REYNOLDS made a number of false statements to an agent of the New York Office of the U.S. Department of Health and Human Services, Office of Inspector General (“HHS-OIG”), about his relationship with that Hospital employee and the funds he had received from that employee.
In addition to his prison term, REYNOLDS, 64, of Venice, Florida, was sentenced to two years of supervised release. REYNOLDS was also ordered to forfeit $718,500. A final determination on restitution is scheduled before Judge Baer on December 11, 2013 at 10:30 a.m.
Mr. Bharara praised the investigative work of the HHS-OIG.
This case is being handled by the Office’s Complex Frauds Unit. Assistant U.S. Attorney Christopher D. Frey is in charge of the prosecution.
Former Broker Charged with Multiple Counts of Wire FraudRead the Press Release
United States Attorney James Santelle of the Eastern District of Wisconsin, announced that on November 5, 2013, a federal grand jury returned an indictment against Lisa A. Lewis (age: 48) of Green Bay, Wisconsin, charging her with five counts of Wire Fraud in violation of 18 U.S.C. Section 1343. If convicted, Lewis faces a maximum of 20 years in prison, $250,000 fine, and three years of supervised release on each count.
The indictment alleges that Lewis, a former financial broker, represented herself as an account representative and persuaded approximately thirteen elderly investors to create an individual investment account. Generally, the scheme to defraud included Lewis then creating a joint account under her name and that of a victim-most often unbeknownst to the victim. Without authorization, Lewis then transferred funds from the victim’s individual account, to the joint account, and then to one of Lewis’ personal accounts where she used the funds for personal expenses unrelated to the victim’s financial interest. Such unauthorized expenditures of victim funds included the purchase of a 2013 Chevrolet Camaro. The indictment alleges that Lewis’ fraud scheme resulted in her obtaining funds in excess of $1,000,000.
On November 6, 2013, Lewis appeared before the Honorable William C. Griesbach, District Court Judge. Lewis was taken into custody and is being held at the Brown County Jail. Her next court date is set for November 8, 2013. A trial date has been scheduled for January 13, 2014.
This case was investigated by the Federal Bureau of Investigation and the Brown County Sheriff’s Department. The case is being prosecuted by Assistant United States Attorney William Roach.An indictment is only a charge and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
Former Arkansas Scholarship Lottery Deputy Director Sentenced to 37 Months in Prison for Wire Fraud and Money LaunderingRead the Press Release
Little Rock - Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas, and Christopher A. Henry, Special Agent in Charge of the IRS-Criminal Investigation Nashville Field Office announced today that United States District Judge Susan Webber Wright sentenced Remmele Mazyck, 34, formerly of Bryant, to 37 months in prison to be followed by two years of supervised release. Mazyck was also ordered to pay $482,671.93 in restitution to the Arkansas Scholarship Lottery (ASL).
During the sentencing hearing today, Mazyck acknowledged responsibility for the theft and apologized to the ASL for his actions and the impact they had on the ASL. The ASL Director, Bishop Woosley, spoke regarding the impact of the actions taken by Mazyck on the ASL stating that, ultimately, it was scholarships for students that were affected by the scheme. Mazyck was released on his own recognizance after the hearing. He is to report to the Bureau of Prisons (BOP) on January 6, 2014, to begin serving his sentence.
“I am grateful for the cooperation of the Arkansas State Lottery and the investigative team of IRS agents and Arkansas State Police detectives for their work, which resulted in a successful prosecution,” stated Thyer. “We are committed to addressing issues of fraud and public corruption in the Eastern District of Arkansas. The success of this mission would not be possible without the law enforcement partnerships we have at all levels – federal, state and local.”
“Public officials hold positions of trust in the community, that trust is broken when officials use their positions to line their own pockets," said Christopher A. Henry, Special Agent in Charge of the IRS-Criminal Investigation Division. "No matter what your position, it is unacceptable to help yourself to other people's money and violate their trust. Individuals who engage in this type of financial fraud should know they will not go undetected and will be held accountable.”
Mazyck pled guilty July 12, 2013, to one count of wire fraud and one count of money laundering. As Deputy Director of Security for the Arkansas Scholarship Lottery, Mazyck had access to packages of promotional lottery tickets, which the lottery routinely gave away at large-scale events such as festivals, fairs, and retailer rallies. Beginning in or about December 2009 through October 2012, Mazyck took lottery tickets from the Arkansas Scholarship Lottery vendor’s warehouse for his personal use. He would assign the tickets to retailers no longer selling tickets, and then use his position as Deputy Director of Security to log into the Arkansas Scholarship Lottery’s software program to change the tickets from “Available-Virgin” to “Promotional.” This change activated the tickets and allowed Mazyck to cash any winning tickets. To hide the scheme, Mazyck would only cash winning tickets of less than $500. This allowed Mazyck to cash his winning tickets at convenience stores all over Arkansas. He then would go into the software program and change the status of all the losing tickets to “Voided by Security.”
This investigation was conducted by IRS-Criminal Investigation and the Arkansas State Police. Assistant United States Attorneys Cameron McCree and Jana Harris have prosecuted this case for the United States.
First Installment of PagliaRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
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PROCEEDS PAID TO DRUG TASK FORCE
Investigation pays big dividends for local departments
CLARKSBURG, WV - Federal authorities presented the Greater Harrison County Drug & Violent Crimes Task Force with a check for over $700,000 today as a down payment on its share of the assets recovered in a large synthetic drug investigation.
Leaders from the DEA, ATF, IRS, U.S. Marshals Service and U.S. Attorney's Office presented a check in the amount of $706,472.13 to the Clarksburg Police Department, the Bridgeport Police Department, and the West Virginia State Police. The money disbursed was the first installment of equitable sharing that will occur as a result of the "Hot Stuff, Cool Things" investigation that began in 2011 and led to arrests, indictments, and convictions in 2012.
According to Task Force board members, the funds received this week will be used by the unit to further its efforts to combat drug trafficking in the area. Additional funds will be disbursed in 2014 once the remaining assets are liquidated. The amount of the next disbursement to the Task Force will depend upon a number of factors, including the amounts received for real estate that has been seized but not yet sold.
According to United States Attorney William Ihlenfeld, II, many of the assets in the case were formerly the property of Jeffrey J. Paglia, the proprietor of stores in Clarksburg & Buckhannon that sold bath salts - a synthetic controlled substance - in violation of federal law. Paglia was indicted in April of 2012 and then convicted in November of 2012 for his role in the distribution of Schedule I Controlled Substances, and Schedule I Analogue Controlled Substances. He was also convicted for the structuring monetary transactions in order to evade reporting requirements. Paglia was sentenced to more than seven years in prison for his crimes.
Co-defendants Jeremia J. Phillips and Derek L. Calip were also convicted in 2012 for their involvement in the distribution of bath salts. They were each sentenced to 21 months in federal prison. John N. Skruck, the fourth defendant named in the indictment, has been on the run since May of 2013 and is still wanted by authorities.
Assets seized in April and May of 2012 included eleven parcels of West Virginia real estate in Clarksburg, Buckhannon, and Lost Creek, and one parcel of real estate in Gardner, Massachusetts. Vehicles seized included a 2011 Ford F-150, a 2011 Honda Crosstour, a 2007 Yamaha Motorcycle, and a 2005 Indian SPCN Motorcycle. Agents also seized a 2008 Bobcat front end loader, a 1998 GMC dump truck, and a Kubota U35 excavator. Multiple bank accounts were also seized.
The Greater Harrison County Drug & Violent Crimes Task Force is comprised of officers and agents from the Clarksburg Police Department, the Bridgeport Police Department, the West Virginia State Police, and the Drug Enforcement Administration. Investigative support for the task force is provided by the Bureau of Alcohol, Tobacco, Firearms & Explosives, the U.S. Marshals Service, and the U.S. Postal Inspection Service.
Firearms Charge Filed Against Canton ManRead the Press Release
A federal grand jury sitting in Cleveland returned a one-count indictment charging Larico Wesley, aka Rico, age 33, of Canton, Ohio, with being a felon in possession of a firearm, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
Wesley was arrested on October 31, 2013 by members of the FBI Stark County Safe Street Task Force and Canton Police after an investigation conducted by Canton Police Department.
On August 25, 2013, Canton Police responded to calls of shots fired in the 700 block of Fourth Street, SW. Upon arrival officers observed Wesley pacing near and around a black SUV in the parking lot. Further investigation pertaining to Wesley’s physical location revealed a semi-automatic handgun on the bumper of the vehicle, according to the indictment.
If convicted, his sentence will be determined by the court after review of factors unique to this case, including his prior criminal record, if any, his role in the offenses and the unique 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 case is being prosecuted by Assistant U.S. Attorney Teresa Dirksen.
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.