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20 December 2013
Fox Chapel Woman Sentenced to Probation for Smuggling Anti-Cancer Drugs into U.S. for Sale at Stanton-Negley PharmacyRead the Press Release
PITTSBURGH - A Fox Chapel woman was sentenced in federal court to two years’ probation on her conviction of smuggling and unlawfully importing prescription drugs, United States Attorney David J. Hickton announced today.
United States District Judge Arthur J. Schwab imposed the sentenced on Robin W. Simon, 45. She was also required to pay $600,000 to the United States government. The amount represents the profits from the resale of the unlawfully imported prescription drugs. Simon paid that amount prior to sentencing.
According to information presented in court, in July of 2007 Simon unlawfully imported the anti-cancer prescription drug known as "Xeloda" from Lisbon, Portugal. Simon had purchased the Xeloda from United Drug Wholesalers, which is based in Ireland, and directed United Drug to send those drugs to her in Portugal. In September of 2008, Simon unlawfully imported Xeloda from Heathrow Healthcare, Limited, which is based in Hounslow, Great Britain. The Xeloda tablets which Simon unlawfully imported from Portugal and Great Britain had been manufactured by Roche Laboratories in New Jersey. Simon then caused those medications to be dispensed to persons who presented prescriptions for Xeloda to the Stanton-Negley Pharmacy, which is located on North Negley Avenue in Pittsburgh.
Assistant United States Attorney Shaun E. Sweeney prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the U.D. Food and Drug Administration-Office of Criminal Investigations, the United States Department of Health and Human Services Office of Inspector General, the Department of Homeland Security, the Federal Bureau of Investigation and the United States Postal Inspection Service for conducting the investigation that led to the prosecution of Simon.
Fourteen Charged in Alleged Steubenville Heroin Trafficking ConspiracyRead the Press Release
CONTACT: Fred Alverson
Six face federal charges; eight charged in state court
Public Affairs Officer
COLUMBUS – An ongoing investigation by federal, state and local law enforcement in Steubenville and Jefferson County, Ohio has led to the indictment of six people on federal drug trafficking and gun charges that are punishable by at least 15 years in prison. Eight others have been charged by a Jefferson County grand jury.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, Kevin R. Cornelius, Special Agent in Charge, Federal Bureau of Investigation (FBI), Jefferson County Prosecutor Jane M. Hanlin, Jefferson County Sheriff Fred Abdalla and Steubenville Police Chief Bill McCafferty announced the charges today following early morning efforts to arrest and locate the defendants.
Named in the federal indictment are: Kinlawyed Hendrix, aka “Lo”, 27, Steubenville
Calvin D. Bryant Jr., aka “Gunz”, 26, Canton, Ohio
Robert L. Simmons Jr., aka “Chase”, 19, Steubenville
Jessie O. Birden, aka “J-Money”, 21, Steubenville
Berryon F. Moore, III, aka “Pumpkin”, 25, Steubenville
Joseph L. Dennis, 30, aka “JD” Toronto, OhioThe federal indictment charges the six defendants with conspiracy to possess with intent to distribute more than one kilogram of heroin, a crime punishable by at least ten years and up to life in prison. The indictment also charges all defendants except Dennis with possession of a firearm in furtherance of a drug crime. Hendrix is charged with two gun counts. That crime carries a punishment of at least five years and up to 40 years in prison, served consecutive to any time served for the heroin trafficking.
“The federal indictment is a result of an ongoing investigation into heroin trafficking and the related gun violence in the Ohio Valley,” U.S. Attorney Stewart said. “We will continue with a regional approach to investigate the sources of the illegal drugs and guns.”
“These indictments are the result of great cooperation between local, county, state and federal law enforcement agencies dedicated to making this community a better place in which to live,” stated FBI Special Agent in Charge Kevin Cornelius.
Jefferson County Prosecutor Jane M. Hanlin stated, “This investigation is a primary example of the success that can be achieved through cooperation between local and federal law enforcement. These arrests mark a significant turning point in our ongoing battle against the heroin trade in our area.”
All federal defendants will appear before a U.S. Magistrate Judge in Columbus who will determine whether or not to hold them without bond until trial.
In addition to those charged federally, Jefferson County Prosecutor Hanlin announced that a Jefferson County grand jury indicted the following individuals: Lavinia Hearon, 29, Chicago Tampering with Evidence
Jacari Benson, 30, Weirton, WV Trafficking in Heroin
Frederick L. McGowan, 39, Madison WI Possession of Heroin, Possession of Cocaine
Robert Jackson, 32, Steubenville Trafficking in Heroin (Two Counts) (Forfeiture: $1,669)
Harry E. Stackhouse, 25, Steubenville Trafficking in Heroin (Two Counts)
Rashann D. Mukes, 28, Steubenville Trafficking in Heroin in the presence of a Juvenile
(Gun specifications) (Forfeiture of $6716)
Kyle M. Irvin, 29, Chicago Trafficking in Heroin (Forfeiture: $10,723)
Charles Henry Thompson, 24, Chicago Trafficking in Heroin (Forfeiture: $10,010)
Having a Weapon Under Disability (Two counts)Officials allege that this drug organization transported more than 23 kilograms of heroin from Chicago for distribution in the Steubenville area over a two-year period.
U.S. Attorney Stewart commended the cooperative investigation by the Jefferson County Drug Task Force, whose members include the DEA in addition to the agencies named above, and the assistance of the Ohio State Highway Patrol in the investigation. The U.S. Marshals Service participated in the arrests. U.S. Attorney Stewart also acknowledged the assistance of the Brooke-Hancock-Weirton Drug Task Force in West Virginia, and Assistant U.S. Attorney Michael Hunter, who is prosecuting the case.
Charges contained in a complaint are allegations. All defendants should be presumed innocent until and unless proven guilty in court.
Four KC Men Charged with Armed Robbery Following Car Chase, CrashRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that four Kansas City, Mo., men were charged in federal court today with armed robbery following a high-speed police chase that ended in a crash that sent one of the men to the hospital.
Randolph E. Wells, 28, Jamal L. Vassie, 24, Gary S. Dorch, 20, and Sergio A. Rascoe, 27, all of Kansas City, were charged in a two-count federal criminal complaint filed in the U.S. District Court in Kansas City, Mo. Wells, Vassie and Dorch remain in federal custody pending a detention hearing on Thursday, Dec. 26, 2013. Rascoe remains hospitalized with injuries from the collision.
Each of the four defendants is charged with one count of armed robbery and one count of possessing a firearm during and in relation to a crime of violence.
According to an affidavit that was filed in support of the criminal complaint, the defendants carjacked a Chrysler Sebring from an elderly woman at a car wash before driving to Public Storage, 9820 Holmes in Kansas City, where they stole $80 from the business as well as a wallet, identification and cell phone from an employee.
Shortly after the carjacking, the affidavit says, law enforcement officers saw the stolen Sebring being driven in tandem with a black Ford Taurus that had been identified with past robberies. The FBI and the Kansas City Police Department have been conducting an investigation into a series of armed robberies of various businesses in the metropolitan area. During the course of the investigation, the affidavit says, the Taurus was observed near robberies that occurred in and around Kansas City.
The Sebring and the Taurus both drove to Public Storage, and the Taurus parked on a side street while Dorch, a passenger in the Sebring, allegedly pulled a red bandana up over his face and entered the business. Immediately after the robbery, law enforcement officers arrested Wells, the driver of the Taurus, and Vassie, a passenger in the Taurus. A loaded Cobray 9mm pistol with an extended magazine was lying on the back seat.
The Sebring, driven by Rascoe, fled north on Holmes and exited onto I-435 East while being pursued by law enforcement personnel with their lights and sirens activated. Rascoe refused to stop and the Sebring was involved in a vehicular crash near the intersection of Blue Parkway and Elmwood. Rascoe and Dorch were arrested. A loaded Taurus .40-caliber pistol was removed from Dorch’s front pants pocket.
Dickinson cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Special Assistant U.S. Attorney Patrick Edwards. It was investigated by the FBI and the Kansas City, Mo., Police Department.Former Union Official Sentenced in Manhattan Federal Court to Eight Years in Prison for His Role in LIRR Fraud SchemeRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that JOSEPH RUTIGLIANO, a former LIRR conductor and president of a union local, was sentenced today in Manhattan federal court to eight years in prison for his role in the massive fraud scheme in which Long Island Railroad (“LIRR”) workers claimed to be disabled upon early retirement so that they could receive disability benefits to which they were not entitled. Between approximately 1999 and 2011, RUTIGLIANO completed fraudulent disability applications on behalf of at least 268 LIRR clients and received over $400,000 in federal disability benefits based upon his own fraudulent disability application. Following a three-week jury trial, RUTIGLIANO was convicted on August 6, 2013, on all counts with which he was charged, including two counts of conspiracy to commit mail fraud, wire fraud and health care fraud; two counts of conspiracy to defraud the Railroad Retirement Board (“RRB”); three counts of mail fraud; three counts of wire fraud; and one count of making a false statement.
Manhattan U.S. Attorney Preet Bharara said: “Joseph Rutigliano not only defrauded the government out of more than $400,000 in unentitled benefits by fabricating his own disabilities, he helped hundreds of other LIRR employees bilk the disability benefit system out of more than $80 million. He will now pay for his crimes with a lengthy term in federal prison and by having to repay the money he defrauded.”
According to the Complaint, the Superseding Indictments, the evidence at trial, and statements made in court:
The RRB is an independent U.S. agency that administers benefit programs, including disability benefits, for the nation’s railroad workers and their families. A unique LIRR contract allowed employees to retire at the relatively young age of 50 (which has since changed to 55) if they had been employed by the LIRR for at least 20 years. Eligible employees are entitled to receive an LIRR pension, which is a portion of the full retirement payment for which they are eligible at 65. In addition, at full retirement age (between age 60 and age 65 depending on years of service), they are eligible to receive an RRB retirement pension. For LIRR workers who retired at 50 with only an LIRR pension, they would receive less than their prior salary and substantially lower pension payments than those to which they would be entitled at full retirement age. However, LIRR employees who retired and claimed disability could receive a disability payment from the RRB on top of their LIRR pension, regardless of age. A retiree’s LIRR pension, in combination with RRB disability payments, can be roughly equivalent to the base salary earned during his or her career.
Hundreds of LIRR employees have allegedly exploited the overlap between the LIRR pension and the RRB disability program by pre-planning the date on which they would falsely declare themselves disabled so that it would coincide with their projected retirement date. These false statements, made under penalty of prosecution in disability applications, allowed LIRR employees to retire as early as age 50 with an LIRR pension, supplemented by the fraudulently obtained RRB disability annuity. From 1995 through 2011, more than 75% of LIRR employees stopped working and began receiving RRB disability benefits, whereas during this same period, only 25% of retiring Metro-North employees stopped working and began receiving RRB disability benefits.
RUTIGLIANO is a former LIRR conductor and president of a union local who received fraudulent disability benefits in the scheme, and who was instrumental in helping other LIRR employees receive disability benefits to which they were not entitled. Between approximately 1999 and 2011, RUTIGLIANO received $409,498 in disability benefits based on a fraudulent disability application in which RUTIGLIANO claimed to suffer from disabilities that made it hard for him to sit, stand, walk, dress himself, bathe himself, or hold a pen for any length of time. At the same time, the evidence showed that in the years RUTIGLIANO collected those benefits, he played hundreds of hours of year-round golf in New York and Florida, and engaged in other physical activities. RUTIGLIANO obtained the fraudulent disability benefits with the help of his co-defendant, the disability doctor Peter J. Lesniewski, who was also convicted at trial, and who provided RUTIGLIANO with false documentation reflecting fabricated physical conditions that purportedly made it impossible for RUTIGLIANO to perform the duties of a train conductor, including walking on trains and collecting tickets from passengers.
In addition to obtaining fraudulent benefits, RUTIGLIANO helped at least 268 other LIRR employees obtain disability benefits to which they were not entitled. In exchange for receiving payments of up to $1,000 per employee, RUTIGLIANO completed fraudulent disability applications on the employees’ behalf, fabricating claims of serious physical suffering and declining health, and grossly exaggerating the physical demands of the employees’ jobs. As a result of this fraud, RUTIGLIANO’s LIRR customers have received over $80 million in RRB disability benefit payments, and the intended losses from his fraud amount to over $102 million.
In addition to his prison term, RUTIGLIANO, 66, of Holtsville, New York, was also sentenced to three years of supervised release. He was also ordered to pay $82,356,348 in restitution, to forfeit $82,883,348, and to pay an $1100 special assessment.
Thirty-three people have been charged in connection with the LIRR disability fraud scheme, 28 of whom have pled guilty, and five of whom were convicted after trial.
Mr. Bharara praised the RRB-OIG, the FBI, and the MTA-OIG for their outstanding work in the investigation, which he noted is ongoing. He also acknowledged the previous investigation conducted by the New York State Attorney General’s Office into these pension fraud issues.
The Office’s Complex Frauds Unit is handling the case. Assistant U.S. Attorneys Justin Weddle, Daniel Tehrani, and Nicole Friedlander are in charge of the prosecution.
Former Robertson County, Tenn. Commissioner Sentenced to 71 Months in Prision for Ponzi SchemesRead the Press Release
More Than $16 Million Solicited From Investors
Edward Shannon Polen, 37, of Greenbrier, Tennessee and former Robertson County Commissioner, was sentenced yesterday to serve 71 months in prison, to be followed by a five year term of supervised release, for operating a series of Ponzi schemes that solicited more than $16,000,000 from investors, announced David Rivera, United States Attorney for the Middle District of Tennessee.
"Investors are devastated by cases like these, especially people who trust their life's savings to individuals they know and trust, only to find that their trust has been misplaced," said U.S. Attorney David Rivera. A"In this case, a lot of people invested money they couldn't afford to lose, particularly in hard economic times. The United States Attorney's Office will diligently and aggressively prosecute those who perpetrate such schemes and prey on unsuspecting and trusting investors."According to testimony at a guilty plea hearing conducted in December 2012, Polen admitted that, between January 2007 and about March 2011, he operated three investment Ponzi schemes in which he solicited and received approximately $16,000,000 from more than fifty investors. Polen admitted that the three investment schemes, identified individually as the "John Deere Investment," the "Greenway Investment," and the "Tennessee Valley Authority Coal Ash Cleanup Investment," were totally fraudulent and he never intended to invest any of the funds he received from investor-victims.
“Yesterday, justice was served for the victims of Polen’s Ponzi schemes, and as a consequence of his crimes, Polen will spend almost six years in federal prison,” said Christy Romero, Special Inspector General for the Troubled Asset Relief Program (SIGTARP). “Polen stole more than $15 million from investors and cheated them, TARP recipient F&M Bank, and other TARP banks in a fraudulent investment scheme where his sole objective was to obtain money to feed his gambling habit and to sustain his scam. The consequences of Polen’s fraudulent actions rippled throughout his community and impacted all U.S. taxpayers who are investors in TARP. SIGTARP, alongside our law enforcement partners, will bring justice to those who exploit and abuse the taxpayer-funded TARP bailout.”
"Honest and law abiding citizens are fed up with the likes of those who use deceit and fraud to line their pockets with other people's money," said Christopher A. Henry, Special Agent in Charge of the IRS-Criminal Investigation Division. "Those individuals who engage in this type of financial fraud should know they will not go undetected and will be held accountable. We are pleased with the successful resolution of this investigation due to the cooperative efforts of our law enforcement partners."
"Those who participate in this type of criminal scheme steal the dreams of future and financial security from innocent victims," said A. Todd McCall, Special Agent in Charge of the Memphis Division of the Federal Bureau of Investigation. "I am very proud of the hard work of the FBI and our law enforcement partners, and today's sentence demonstrates that those who intentionally commit fraud for personal benefit cannot hide from justice and will pay the price for their crimes."
In or around January 2007 he began soliciting funds for investment in the purchase and resale of tractors and other farm equipment that had been repossessed by John Deere & Company. It was part of the scheme that Polen falsely represented to investors that he needed funds to finance the initial purchase of repossessed John Deere farm equipment, which he would immediately resell to a "guaranteed buyer" for a significant profit. According to Polen, investors would thereafter receive a return of their principal investment, plus a substantial profit. However, the John Deere Investment did not exist, and defendant never invested any of the funds collected from victim- investors. Instead, defendant converted John Deere investor funds to his own personal use and to repay other investor-victims.
In or around January 2008, Polen began soliciting funds to finance the initial purchase of construction materials, which he told investors would be re- sold to the subcontractors of the State of Tennessee Greenway projects for a significant profit. As in the John Deere scheme, defendant promised victim-investors that they would receive a return of their principal investment, plus a substantial profit. However, like the John Deere scheme, the Greenway Investment did not exist, and defendant never invested any of the invested funds. Instead, defendant converted Greenway project investor funds to his own personal use and to repay other investor-victims.
In or around February 2009, Polen began soliciting investment funds to purchase construction materials and equipment, which he told investors would then be sold to contractors and sub-contractors hired by the Tennessee Emergency Management Agency ("TEMA") for use in the Kingston Fossil Plant clean-up project. As in the John Deere and Greenway investment schemes, Polen promised victim-investors that they would receive a return of their principal investment, plus a substantial profit. However, the TVA Coal Ash Investment did not exist, and Polen never invested any of the funds collected from victim-investors. Instead, Polen converted TVA Coal Ash investor funds to his own personal use and to repay other investor-victims.
It was a significant part of each of the three investment schemes that Polen would, at the time of investment, provide investors with a minimum of two post-dated checks, one for the principal amount of their investment and the other for the profit that their investment was expected to produce. The post-dated checks were drawn on multiple accounts controlled by Polen at various banks insured by the Federal Deposit Insurance Corporation. Polen used the post-dated checks as a ruse to create the illusion for investors that their investments were safe and secure. Polen assured the investors that the post-dated checks could be cashed at any time, but at the time he tendered the checks to the investors, Polen knew that the accounts upon which the checks were drawn had either been closed or did not, and would never contain funds sufficient to cover the amounts of the checks.
TARP Connection:
The parent companies of F&M Bank (F&M Financial Corporation of Clarkesville, Tenn.), U.S. Bank (U.S. Bancorp of Minneapolis, Minn.), and Fifth Third Bank (Fifth Third Bancorp of Cincinnati, Ohio) each received federal government assistance through the U.S. Department of the Treasury's Troubled Asset Relief Program (TARP). The federal government realized an approximate $3.8 million loss on its approximate $17.2 million taxpayer investment in F&M Bank. The TARP investments in U.S. Bank (approximately $6.6 billion) and Fifth Third Bank (approximately $3.4 billion) were repaid in full on June 17, 2009, and Feb. 2, 2011, respectively.
Polen wrote checks on accounts from these institutions; accounts which were either closed or lacked sufficient funds for the withdrawals.
This case was investigated by the TVA-OIG, IRS-CI, FBI, TBI, and SIG-TARP. The United States was represented by Assistant United States Attorney John K. Webb.
Former Pharmacy Student Sentenced on Drug ChargesRead the Press Release
BUFFALO, N.Y.B U.S. Attorney William J. Hochul, Jr. announced today that Abraham Reinhardt, 24, of Buffalo, N.Y., who was convicted of possession with intent to distribute Oxymorphone, was sentenced to 12 months in prison by Chief U.S. District Judge William M. Skretny.
Assistant U.S. Attorney Timothy C. Lynch, who is handled the case, stated that in November 2012, Reinhardt, a pharmacy student at St. John Fisher College in Rochester, N.Y. at the time, was arrested in the parking lot of the Home Depot in Batavia, N.Y. where he was about to sell 80 Opana (Oxymorphone) tablets, a quantity of marijuana, and hallucinogenic mushrooms.
Following Reinhardt’s arrest, a search warrant was executed at the defendant=s residence on Elmwood Avenue in Rochester. Drug Enforcement Agents seized Oxymorphone pills, and a quantity of hallucinogenic mushrooms and marijuana. In addition, during the summer months, the defendant operated an ice cream truck in Cheektowaga, N.Y. and sold hallucinogenic mushrooms and marijuana from the truck.
Reinhardt ordered the Opana pills through Silkroad.com, an on-line, black market website which has since been shut down.
The sentencing is the culmination of an investigation by Special Agents of the Drug Enforcement Administration, under the direction of Brian R. Crowell, Special Agent in Charge, New York Region, and the Erie County Sheriff’s Department.Former Office Manager Charged with Defrauding Car Dealership, Filing False Tax ReturnsRead the Press Release
PITTSBURGH - On Dec. 17, 2013, a former resident of Venetia, Pa., was indicted by a federal grand jury in Pittsburgh on charges of wire fraud and filing false income tax returns, United States Attorney David J. Hickton announced today.
The seven-count indictment, unsealed today, named Deborah Cassini, 61, as the sole defendant.
According to the indictment presented to the court, Cassini was employed by Three Rivers Volkswagen as the Office Manager. As the Office Manager, Cassini had access to the company’s bank accounts, payroll system, accounting system and cash. Over the course of several years, Cassini embezzled funds in numerous ways, including making online payments to her personal credit cards from the company bank account; by making online payments for her BMW from the company bank account; by issuing herself additional compensation through the payroll system; by skimming cash; by writing checks to herself and to cash on company checks and by making cash withdrawals from the company bank account. Cassini concealed the theft by making false accounting entries into the company’s accounting system. The indictment further charges that she submitted false income tax returns for the years in which the embezzlement occurred.
The law provides for a maximum total sentence of 89 years in prison, a fine of $1,750,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Lee J. Karl is prosecuting this case on behalf of the government.
The United States Postal Inspection Service and the Internal Revenue Service-Criminal Investigation conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Former JSO Corrections Officer Indicted for Receipt, Distribution, and Possession of Child PornographyRead the Press Release
Jacksonville, Florida – Acting United States Attorney A. Lee Bentley, III announces the arrest and unsealing of an indictment charging former Jacksonville Sheriff’s Office (JSO) Corrections Officer Leon Perry Brooks, Sr. (39, Jacksonville) with two counts of receipt of child pornography, one count of distribution of child pornography, and one count of possession of child pornography. If convicted on each of the receipt counts and the distribution count, he faces a minimum of 5 years, up to 20 years in federal prison. On the possession of child pornography charge, Brooks faces a maximum penalty of 10 years’ imprisonment.
Brooks will make his initial appearance in federal court today, in Jacksonville, at 2:15 p.m. before U.S. Magistrate James R. Klindt.
According to the indictment, the offenses occurred between June 19, 2012, and May 20, 2013, and involve certain named computer files depicting minors engaging in sexually explicit conduct.
An indictment is merely a formal charge that a defendant has committed a violation of the federal criminal laws, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), in conjunction with the Jacksonville Sheriff’s Office’s Internet Crimes Against Children Task Force. It will be prosecuted by Assistant United States Attorney Diidri Robinson.
It is another case brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Click HERE to view indictment.
Former Chief Executive Officer of Financial Lending Company Pleads Guilty in Bank Fraud SchemeRead the Press Release
Earlier today, John Murphy, the former Chief Executive Officer of Oak Rock Financial, LLC (“Oak Rock”), pled guilty to bank fraud before United States Magistrate Judge Gary R. Brown at the United States courthouse in Central Islip, New York. The charge arose out of Murphy’s scheme to defraud various financial institutions including Israel Discount Bank (“IDB”), the primary lender to Oak Rock. The losses to these financial institutions and Oak Rock investors are in excess of $100 million. When sentenced by United States District Judge Leonard D. Wexler, the defendant faces a maximum of 30 years’ imprisonment.
The conviction was 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).
“Murphy abused his position as CEO and defrauded banks out of millions of dollars by lying about his company’s financial health,” stated United States Attorney Lynch. “Today’s conviction should act as warning to executives, if you lie to lenders and investors, you will be investigated and prosecuted to the full extent of the law.” Ms. Lynch expressed her grateful appreciation to the New York State Department of Financial Services for its assistance in this investigation.
“Mr. Murphy, instead of being a steward of Oak Rock Financial, spent his time cooking the books. Let this serve as a reminder to executives everywhere that honesty and integrity are more important than the bottom line,” stated FBI Assistant Director-in-Charge Venizelos.
Oak Rock is a financial lending company located in Suffolk County, New York, that is in the business of securing lines of credit for businesses throughout the United States. Until April 2013, Murphy was the Chief Executive Officer and President of Oak Rock. During his guilty plea, Murphy admitted to lying to IDB, other financial institutions, and Oak Rock investors regarding the accounts receivable for Oak Rock. Specifically, Murphy admitted, since January 2009, he had been committing fraud by changing delinquency dates to keep collateral and loans current; booking fictitious payments, thereby creating fictitious accounts receivable; and re-aging delinquent accounts receivable by copying data from timely paid accounts so that the loans appeared to have been stable. By relying on Murphy’s misrepresentations IDB, other financial institutions and Oak Rock investors sustained losses in excess of $100 million.
The government’s case is being prosecuted by Assistant United States Attorney Michael P. Canty
The Defendant:
JOHN MURPHY
Age: 63
Nesconset, New YorkE.D.N.Y Docket No 13-CR-702 (LDW)
Former Allentown Realtors Charged in Fraud SchemeRead the Press Release
Former Allentown-based real estate agents, Jose Antigua, 36, and Melquisidec Caraballo, 42, were charged today by Information with one count of conspiracy to commit bank fraud and wire fraud affecting financial institutions, announced United States Attorney Zane David Memeger.
According to the Information, from at least October 2006 until at least August 11, 2008, Antigua and Caraballo conspired with each other and two former employees of Madison Funding, a loan origination company, to defraud lenders into loaning money to their real estate clients who were not creditworthy. The Information alleges that Antigua and Caraballo helped numerous clients, who were unemployed or under-employed, buy real estate by referring them to Madison Funding employees Claribel Gonzalez and Florentia Peralta, knowing that Gonzalez and Peralta would submit fraudulent loan applications to lenders such as Mortgage IT, Countrywide, and Bank of America, on behalf of those clients.
In total, Antigua and Caraballo helped their clients obtain more than $1.7 million in fraudulent loans, many of which have since gone into default, costing the lenders, secondary investors, and insurers hundreds of thousands of dollars.
If convicted, each defendant faces a maximum possible sentence of five years in prison, a fine of up to $250,000, three years of supervised release, and a $100 special assessment.
Gonzalez and Peralta were charged with multiple mortgage fraud-based crimes in a separate indictment and have pleaded guilty to those charges. Six other former Madison Funding employees also have pleaded guilty to mortgage fraud-based charges. Gonzalez and Peralta are scheduled to be sentenced on February 11, 2014.
The case was investigated by the Offices of the Inspector General for the Department of Housing and Urban Development, the FDIC, and the Federal Housing Finance Agency. It is being prosecuted by Assistant United States Attorney Mark B. Dubnoff.
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, 215-861-8525Financial Advisor, Jabari Ragas, Charged with Money Laundering and Tax FraudRead the Press Release
JABARI RAGAS, age 40, a resident of New Orleans, Louisiana, was charged in a two count bill of information today with money laundering and filing a false tax return, announced U. S. Attorney Kenneth A. Polite, Jr.
According to court documents, RAGAS was employed by Ameriprise Financial Services, Inc. (“Ameriprise”) as a registered broker and investment adviser. In early 2006, a client of RAGAS indicated to him that he wished to open a Simplified Employee Pension (“SEP”) account to allow him to contribute towards his retirement. The client made contributions from 2006 – 2009.
Without authorization, RAGAS began moving money from the Ameriprise SEP account into an account ending in X0686 that was controlled by him. On June 26, 2009, RAGAS used an interstate wire to transfer $40,000 from this Ameriprise SEP account to that personal bank account ending in X0686.
The client later checked the account balance and inquired as to why the account balance was lower than it should have been. RAGAS falsely told the client that the funds had been transferred to an investment account of a different financial institution located in Texas. RAGAS was then asked by the client to supply him with written account statements showing the balance, account number, and institution name. RAGAS then supplied the client with a fraudulent account statement for an account that did not exist, along with a fraudulent balance.
After using the interstate wire to transfer $40,000 from the Ameriprise account of the client to his account ending in X0686, RAGAS then allegedly committed money laundering on June 29, 2009, by further transferring $20,000 into a different account controlled by RAGAS ending in X6565.
Additionally, on October 12, 2008, RAGAS signed and filed a 2007 U.S. Individual Income Tax Return (Form 1040) with the Internal Revenue Service. The tax return allegedly did not report approximately $288,000 in income.
If convicted, RAGAS faces a maximum term of imprisonment of ten years, on the money laundering count, and a maximum term of imprisonment of three years, on the tax count. RAGAS also faces a fine of $250,000.00 or the greater of twice the gross gain to the defendant or twice the gross loss to any person as to the money laundering count. As to the tax count, RAGAS faces a fine of $100,000 together with the costs of prosecution. RAGAS faces a three year term of supervised release as to the money laundering count and a one year term of supervised release on the tax count, following any term of imprisonment.
U.S. Attorney Polite reiterated that the bill of information is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt.
The case was investigated by the Special Agents of the Internal Revenue Service and the prosecution is being handled by Assistant United States Attorney Jon Maestri.
(Download Bill of Information )
Federal Prison Terms Handed Down to Two Florida Women Involved in Nationwide Timeshare Resale ScamRead the Press Release
Arantazazu Atorrasagasti, 36, and Carmen L. Picache, 33, both of Orlando, Florida, were sentenced to terms of 30 months and 24 months in prison, respectively, for their roles in a nationwide telemarketing scheme that defrauded thousands of people throughout the United States and Canada, including victims in seven counties within the Southern District of Illinois, Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced. Both women pled guilty in August 2013 to one count of conspiracy to commit mail and wire fraud.
Atorrasagasti and Picache were telemarketers who worked in Orlando for a series of related companies known as “National Solutions.” From 2007 to 2011, the scheme operated under more than a dozen business names, including Bluescape Timeshares International, Country Wide Timeshares, Countrywide Timeshares MA, Landmark Timeshares, Propertys Direct, Quicksale Propertys, Sun Property Networks, Sun Property’s, Universal Propertys, VIM Timeshares, Propertys DRK, Quick Sale Advisers, Quick Sale International, City Resorts, Resort Advisors, American Timeshares, Exit Week, and Resort Advisors International.
Telemarketers for National Solutions placed cold calls to timeshare owners, falsely representing that they had actual buyers interested in purchasing the victim’s unit. Many victims were told that their closings would occur within a matter of days. To accept the deal, victims were required to pay hefty advanced fees (often as much as several thousand dollars), which would supposedly be refunded at closing. The entire business, however, was a fraud. Despite collecting fees from their victims, the National Solutions companies never succeeded in selling a single timeshare unit and indeed made little effort even to market the properties for sale. Instead, Atorrasagasti, Picache, and their co-conspirators simply pocketed the money.
In July 2011, the Federal Trade Commission initiated a civil action against National Solutions and immediately shut the business down pursuant to a federal court order. Documents and records seized by the FTC were shared with the United States Postal Inspection Service in support of a parallel criminal investigation. All told, over 2,500 timeshare owners across the country were scammed by National Solutions to the tune of more than $6 million.
As part of their sentences, both women were ordered to spend five years on supervised release and to pay over $100,000 in restitution to the identified victims of their crimes. One of the conditions of their supervision is that they will not be allowed to perform any telemarketing work without the express consent of the United States Probation Office.
These prosecutions – two out of several dozen timeshare resale fraud prosecutions brought in the Southern District of Illinois – are the result of an ongoing investigation by the St. Louis Field Office of the Chicago Division of the United States Postal Inspection Service and the Midwest Regional Office of the Federal Trade Commission. The cases were prosecuted by Assistant United States Attorneys Michael J. Quinley and Nathan D. Stump.
Federal Agent Indicted in Conspiracy to Commit Extortion, Bribery and Making False StatementsRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, David Nieland, Special Agent in Charge, Department of Homeland Security (DHS), Office of Inspector General (OIG), Miami Field Office, and David D’Amato, Special Agent in Charge, U.S. Immigration and Customs Enforcement, Office of Professional Responsibility, announce the indictment of Juan Felipe Martinez, a Special Agent with DHS, 47, of Coral Gables. The indictment charges Martinez with eight counts of extortion, two counts of bribery, and two counts of making false statements.
One of the extortion counts charges that Martinez and others conspired to extort money and unlawfully enrich themselves by using Martinez’s official position to obtain large payments from a Colombian company and certain individuals associated with it. Martinez and others conspired to falsely state that the company and certain individuals associated with it were going to be put on the Specially Designated Nationals (SDN) list by Office of Foreign Asset Control and then offering to keep them off the SDN list if they made large payments to co-conspirators. Two of the bribery counts allege that Martinez accepted thousands of dollars in exchange for United States significant public benefit paroles.
U.S. Attorney Wifredo A. Ferrer stated, “Today’s arrest is a reminder that no one is above the law. You can’t sell your badge and abuse your power and expect to get away with it. And while Martinez’s alleged conduct tarnishes his badge, it does not tarnish those of the honorable men and women who serve and protect our community faithfully every day.”
David Nieland, Special Agent in Charge for DHS-OIG added, “Whenever a law enforcement officer engages in illegal activity, it erodes the public trust. Such actions by a few undermine the hard work of the many who serve to protect America each day. Corruption remains a top priority of the DHS OIG and we remain committed to holding those who violate the public’s trust accountable for their illegal actions.”
Martinez had his initial appearance today before U.S. Magistrate Judge William C. Turnoff. The Court set bond at $250,000, with a Nebbia condition. Report regarding counsel and arraignment was set for January 21, 2014 before the duty Magistrate Judge.
If convicted, the defendant faces a statutory maximum of twenty years in prison on each extortion count, fifteen years in prison on each bribery count, and five years in prison on each false statements count and a $250,000 fine.
An indictment is only an accusation and each defendant is presumed innocent unless and until proven guilty.
Attachment:
Indictment (PDF)
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.
Fayetteville Man Sentenced to 30 Months in Prison for Possession of Child PornographyRead the Press Release
CHATTANOOGA, Tenn. – Thomas Kandziorski, 62, of Fayetteville, Tenn., was sentenced on Dec. 16, 2013, to serve 30 months in prison by the Honorable Harry S. Mattice, Jr., U.S. District Judge. Kandzioski was also ordered to complete 15 years of supervised release upon his release from prison and pay a $100 Special Assessment fee. He will also be required to register as a sex offender. Kandziorski pleaded guilty in August 2013, to an information charging him with one count of possession of child pornography.
A search warrant was executed by the Lincoln County Sheriff’s Department at Kandziorski’s residence and a computer, a camera, and several other electronic storage devices were seized. Some of those devices were found to contain images of child pornography. Kandziorski admitted to law enforcement that he was aware of the sexually explicit images of child pornography stored on these devices.
The successful prosecution of Kandziorski was the result of an investigation conducted by the Federal Bureau of Investigation, Tennessee Bureau of Investigation, Lincoln County Sheriff’s Department, and Winchester Police Department, who took the lead role in this investigation. Assistant U.S. Attorneys Terra L. Bay and John MacCoon represented the United States.
The U.S. Attorney for the Eastern District of Tennessee, William C. Killian stated, “This is yet another example of the hard work and partnership between the federal, state, and local law enforcement agencies to protect the children of our District and prosecute the predators who endanger them.”
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
El Departamento de Justicia y la Oficina para la Protección Financiera del Consumidor Realizan Acuerdo Conciliatorio de 98 Millones de Dólares en Resolución de Alegatos de Discriminación de Crédito para Vehí...Read the Press Release
WASHINGTON – El Departamento de Justicia y la Oficina para la Protección Financiera del Consumidor [Consumer Financial Protection Bureau (CFPB)] anunciaron hoy el mayor acuerdo conciliatorio realizado por el gobierno federal en relación a alegatos de discriminación en el otorgamiento de préstamos para la compra de vehículos alegando que Ally Financial Inc. y Ally Bank, con sede en Detroit, exhibieron un patrón o práctica nacional de discriminación contra prestatarios afroestadounidenses, hispanos y asiáticos/isleños del Pacífico en sus préstamos de vehículos desde el 1° de abril de 2011. El acuerdo es la primera acción conjunta del departamento y la CFPB para hacer valer las leyes de otorgamiento justo de préstamos. Con este acuerdo, ocho de los 10 principales acuerdos conciliatorios asociados con el otorgamiento justo de préstamos en la historia del departamento se han producido bajo el liderazgo del Secretario de Justicia de los Estados Unidos Eric Holder.
El acuerdo dispone que se destinen 80 millones de dólares para indemnizar a víctimas de discriminación pasada por uno de los mayores prestamistas de crédito para vehículos y exige que Ally pague 18 millones de dólares al Fondo de Multas Civiles de la CFPB. Asimismo, Ally debe reembolsar los sobrecargos discriminatorios a prestatarios durante los próximos tres años, si no reduce significativamente las disparidades en incrementos injustificados de la tasa de interés. Este sistema creará un fuerte incentivo financiero para eliminar los sobrecargos discriminatorios.
"Con este acuerdo conciliatorio, el mayor logrado en un caso de discriminación en el otorgamiento de crédito para vehículos, estamos adoptando una postura firme contra la discriminación en un mercado crítico de préstamos ", señaló el Secretario de Justicia de los Estados Unidos Eric Holder. "Al exigir que Ally reembolse a los prestatarios a los que se les cobró demás debido a su raza u origen nacional, este acuerdo asegurará la reparación para los estadounidenses victimizados. Esto permitirá que el Departamento de Justicia y la CFPB trabajen estrechamente con Ally y otros para prevenir prácticas discriminatorias en el futuro. Y reforzará nuestra determinación de tener una respuesta enérgica a la discriminación en los mercados de préstamos de los Estados Unidos, donde sea que se produzca".
El acuerdo conciliatorio resuelve las alegaciones del departamento y la CFPB de que Ally discriminó al cobrarles tasas de interés más altas a alrededor de 235,000 prestatarios afroestadounidenses, hispanos y asiáticos/isleños del Pacífico que a los prestatarios blancos no hispanos. Las agencias alegan que Ally les cobró a prestatarios tasas de interés más altas debido a su raza u origen nacional, y no debido a la solvencia de los prestatarios u otros criterios objetivos relacionados con el riesgo que presentaban. La víctima media pagó entre 200 y 300 dólares más a lo largo de la vida del préstamo. La Ley de Igualdad de Oportunidades de Crédito [Equal Credit Opportunity Act (ECOA)] prohíbe la discriminación en todas las formas de préstamo, incluidos los préstamos para la compra de vehículos. El acuerdo conciliatorio de Ally con el Departamento de Justicia [Department of Justice (DOJ)] se presentó hoy en el Tribunal Federal de Distrito para el Distrito Este de Michigan en junto con la demanda del DOJ. Con respecto a la acción iniciada por la CFPB, Ally realizó un acuerdo conciliatorio administrativo público.
"La discriminación es un problema grave en todos los mercados de crédito de consumo", indicó el Director de la CFPB Richard Cordray. "Les estamos devolviendo 80 millones de dólares a consumidores trabajadores que pagaron más por sus automóviles o camionetas debido a su raza u origen nacional. Nos complacerá trabajar estrechamente con el Departamento de Justicia y Ally para asegurarnos que se tomen las medidas correspondientes para resolver este grave problema en los próximos años también".
En lugar de recibir solicitudes directamente de los consumidores, Ally otorga la mayoría de sus préstamos a través de 12,000 concesionarios de automóviles de todo el país que ayudan a sus clientes a pagar por sus vehículos nuevos o usados al presentar sus solicitudes de crédito a Ally. La práctica comercial de Ally, así como la de otras importantes sociedades de préstamos de vehículos, permiten que los concesionarios varíen la tasa de interés de un préstamo de la tasa inicialmente establecida por Ally según factores objetivos crediticios del prestatario. Los concesionarios reciben pagos más altos de Ally por préstamos que incluyan una tasa de interés más alta. Las investigaciones coordinadas por el departamento y la CFPB que precedieron al acuerdo conciliatorio de hoy determinaron que este sistema de determinación subjetiva y libre de los precios hace con que los prestatarios de Ally afroestadounidenses, hispanos y asiáticos/isleños del Pacífico acaben pagando más que los prestatarios blancos no hispanos calificados.
Las agencias alegan que Ally no controla adecuadamente que los incrementos de tasa de interés no se produzcan debido a la discriminación, ni exige que los concesionarios documenten sus decisiones de aumento de tasa de interés. La primera iniciativa por parte de Ally de controlar que no ocurra discriminación en los incrementos de la tasa de interés recién comenzó hace unos meses después de que se enteró de la determinación preliminar por parte de la CFPB de hechos de discriminación, y como resultado, solo dos concesionarios fueron sancionados y lo único que se les exigió fue la realización de capacitación voluntaria.
"Este acuerdo conciliatorio brinda reparación a las personas perjudicadas por esta discriminación", señaló la Fiscal Federal para el Distrito Este de Michigan Barbara McQuade. "Los prestamistas deben tener en cuenta la solvencia crediticia del prestatario individual basado en sus ingresos, ahorros, historial de crédito y otros factores objetivos al determinar los términos de un préstamo. Este acuerdo conciliatorio garantizará que, en el futuro, los prestatarios puedan obtener préstamos de Ally basado en su propio historial de crédito, libres de discriminación debido a su raza u origen nacional".
El acuerdo conciliatorio de hoy representa la primera resolución de la labor conjunta del departamento y la CFPB respecto de las prácticas discriminatorias en el otorgamiento de préstamos de vehículos. La Ley Dodd-Frank de 2010 le otorgó al DOJ y a la CFPB autoridad para tomar medidas contra bancos grandes como Ally por violaciones de la ECOA. Si bien el departamento presentó demandas anteriormente por violaciones de la ECOA asociadas a préstamos de vehículos, la de hoy es la primera demanda relacionada con la ECOA contra una sociedad de préstamos de vehículos con operaciones en todo el país.
Además de los 98 millones de dólares en pagos por su conducta en el pasado y la exigencia de reembolsar futuros cargos discriminatorios, el acuerdo conciliatorio exige que Ally mejore sus sistemas de control y cumplimiento. El acuerdo conciliatorio le permite a Ally probar diferentes medios de reducir la discriminación y exige que informe al departamento y a la CFPB periódicamente los resultados de sus iniciativas y que discuta posibles maneras de mejorar los resultados. El departamento considera encomiable la cooperación de Ally para alcanzar una resolución adecuada para este caso. El departamento ve con agrado el compromiso de Ally, como parte del acuerdo conciliatorio, de trabajar con la División de Derechos Civiles y la CFPB en encontrar mejores maneras de cobrarles a todos los consumidores de manera justa, sin dejar de recompensar de forma justa a los concesionarios de vehículos por los servicios que brindan.
La Unidad de Préstamos Justos de la Sección de Vivienda y Cumplimiento de la Ley Civil de la División de Derechos Civiles es responsable, en el departamento, de hacer valer las leyes de otorgamiento justo de préstamos. Desde su fundación en febrero de 2010, la Unidad de Préstamos Justos ha iniciado o resuelto 30 casos asociados con préstamos bajo la Ley de Vivienda Justa [Fair Housing Act], ECOA y la Ley de Amparo Civil para Militares [Servicemembers Civil Relief Act]. Los acuerdos conciliatorios logrados en estos casos consistieron en casi 775 millones de dólares en indemnizaciones a comunidades afectadas y más de 535,000 prestatarios individuales. Los informes anuales del Secretario de Justicia de EE.UU. al Congreso bajo ECOA destacan los logros del Departamento en el otorgamiento de préstamos justos y están disponibles en www.justice.gov/crt/publications.
El acuerdo conciliatorio propuesto dispone que un administrador independiente ubique a las víctimas y distribuya los pagos indemnizatorios sin ningún costo a los prestatarios identificados por el departamento y la CFPB como víctimas de la discriminación por parte de Ally. El departamento y la CFPB realizarán un anuncio público y publicarán información en sus portales en Internet cuando existan más detalles disponibles sobre el proceso de indemnización. Los prestatarios elegibles para indemnización debido al acuerdo conciliatorio serán contactados por el administrador y no necesitan comunicarse con el departamento o la CFPB en este momento. Las personas con preguntas sobre préstamos de vehículos o que deseen presentar una queja pueden comunicarse con la CFPB llamando al (855) 411-2372.
La División de Derechos Civiles, la Fiscalía Federal para el Distrito Este de Michigan y la CFPB son miembros de la Fuerza de Tarea de Coacción contra el Fraude Financiero. El Presidente Obama estableció la Fuerza de Tarea Interagencial para llevar a cabo una iniciativa enérgica, coordinada y proactiva para investigar y enjuiciar los delitos financieros. La fuerza de tarea incluye a representantes de una amplia gama de dependencias federales, autoridades reguladoras, inspectores generales y miembros de las fuerzas del orden público estatales y locales, quienes, trabajando unidos, aportan un poderoso espectro de recursos de coacción penal y civil. La fuerza de tarea está trabajando para mejorar la labor en todo el poder ejecutivo federal, y con asociados estatales y locales, para investigar y enjuiciar los delitos financieros importantes, asegurar un castigo justo y eficaz para quienes cometan delitos financieros, combatir la discriminación en los mercados de préstamos y financieros, y recuperar fondos para las víctimas de delitos financieros. Para obtener más información sobre la fuerza de tarea, visite www.StopFraud.gov.
Eagle Butte Man Sentenced for Assault with A Dangerous Weapon and Assault Resulting in Serious Bodily InjuryRead the Press Release
United States Attorney Brendan V. Johnson announced that an Eagle Butte, South Dakota, man convicted of Assault with a Dangerous Weapon and Assault Resulting in Serious Bodily Injury was sentenced on December 19, 2013, by U.S. District Judge Roberto A. Lange.
Martin Garreau, age 19, was sentenced to 48 months in custody, 2 years supervised release, and a $200 special assessment to the Federal Crime Victims Fund.
Garreau was indicted for Assault with a Dangerous Weapon and Assault Resulting in Serious Bodily Injury by a federal grand jury on April 12, 2013. He was found guilty of the charges on October 9, 2013, following a jury trial.
The conviction stems from an incident that occurred on November 11, 2012, at Eagle Butte, in which Garreau and two other co-defendants were socializing and drinking at Garreau’s father’s house. During the party, the victim, who was intoxicated, tried to invite himself in the house. Several people at the party did not want the victim to join their group so a verbal argument ensued. The argument escalated into a physical fight. During the fight, Garreau and another co-defendant smashed several empty glass alcohol bottles over the victim’s head and the victim was knocked unconscious and fell into a fetal position. The assault continued after the victim had been knocked out and was rendered helpless.
As a result of the assault, the victim suffered bilateral subdural hematomas that required emergency surgery in Rapid City to release the pressure on his brain. He also suffered numerous lacerations to his head, multiple bruises and contusions to his face, arms, and body and was hospitalized for 19 days at Rapid City Regional Hospital.
This case was investigated by Cheyenne River Sioux Tribe Law Enforcement. Assistant U.S. Attorney Mikal Hanson prosecuted the case.
Garreau was immediately turned over to the custody of the U.S. Marshals Service to begin serving his sentence.
Eagle Butte Man Sentenced for Aggravated Sexual Abuse of A ChildRead the Press Release
United States Attorney Brendan V. Johnson announced that an Eagle Butte, South Dakota, man convicted of Aggravated Sexual Abuse of a Child was sentenced on December 17, 2013, by U.S. District Court Judge Roberto A. Lange.
Chad Two Hearts, age 40, was sentenced to 27 years in custody, 5 years of supervised release, and a $100 special assessment to the Federal Crime Victims Fund.
Two Hearts was indicted by a federal grand jury on March 13, 2013, for Aggravated Sexual Abuse of a Child. He was convicted of that charge following a two-day jury trial in August 2013.
At trial, the jury heard evidence from the victim. The victim said when he was 9 or 10 years old, Two Hearts had sexually assaulted him at least two times in Two Hearts’ mother’s home in Eagle Butte. The victim also testified that Two Hearts sexually abused him in Minnesota. Federal Bureau of Investigation agents and the sexual assault task force members testified that Two Hearts made a taped confession admitting the sexual assault of the victim in Minnesota. The jury also heard evidence from two sexual assault experts who explained that it is not unusual for children to delay the reporting of sexual abuse or to keep the sexual abuse a secret, sometimes for years.
At his sentencing on December 17, 2013, the district court took notice that Two Hearts had a prior State of South Dakota conviction in Hughes County for Attempted Second Degree Rape in 1995. This assault involved a 17 year old minor.
The federal case was investigated by the Federal Bureau of Investigation, the Cheyenne River Sioux Tribe Law Enforcement Division, and the South Dakota Division of Criminal Investigation. Assistant U.S. Attorney Mikal Hanson prosecuted the case.
Two Hearts was immediately turned over to the custody of the U.S. Marshals Service to begin serving his sentence.
Dupree Woman Sentenced for Child Abuse and NeglectRead the Press Release
United States Attorney Brendan V. Johnson announced that a Dupree, South Dakota, woman convicted of Child Abuse and Neglect was sentenced on December 18, 2013, by U.S. District Judge Roberto A. Lange.
Alisa Knight, age 29, was sentenced to time served (50 days), 3 years of supervised release, and a $100 special assessment to the Federal Crime Victims Fund.
Knight was indicted for the above charge by a federal grand jury on May 15, 2013. She pled guilty on October 28, 2013.
The conviction stems from incidents that occurred on multiple occasions between December 2011 and December 2012 when Knight resided in Dupree with her three minor children. Among the children was the victim who witnessed the defendant on more than one occasion ingest controlled substances, primarily methamphetamine, a Schedule II controlled substance. Such acts were committed in the presence of the young victim and while the victim was under the care, custody, and control of Knight. As a result, the victim gained knowledge of what methamphetamine is, how to ingest it, and where Knight obtained it.
This case was investigated by the Federal Bureau of Investigation. Assistant U.S. Attorney Troy R. Morley prosecuted the case.
Developer Sentenced to 12.5 Years in Prison for Orchestrating Massive Mortgage Fraud Involving over $7 Million in LossRead the Press Release
BOSTON – A Boston man was sentenced late yesterday on charges relating to a massive mortgage fraud that he orchestrated.
Sirewl R. Cox, 38, was sentenced by U.S. Judge Denise J. Casper to 150 months in prison and three years of supervised release. On Nov. 15, 2013, following a 16-day jury trial, Cox was convicted of wire fraud, bank fraud and conducting an unlawful monetary transaction.
In 2006 and 2007, Cox identified multiple-family buildings for sale and recruited straw buyers to purchase the buildings. Cox and others then recruited straw buyers to purchase individual units in buildings that Cox controlled. The straw buyers’ financing for the purchases was obtained by submitting mortgage loan applications and other documents that falsely represented key information, such as the buyers’ income, employment, assets, and/or intention to reside in the condominiums. Deals were closed with HUD-1 settlement statements that falsely represented that straw buyers had made down payments and paid other funds in connection with the property transactions, and that falsely represented how the proceeds of the mortgage loans were disbursed.
United States Attorney Ortiz said, “This case involved the largest mortgage fraud scheme perpetrated in the run up to the financial crisis by a convicted defendant in this district. Sham transactions like the ones in this case help drive up prices for legitimate homeowners, and the abandonment of properties to foreclosure that often results further victimizes the affected neighborhoods. So-called ‘white-collar’ crimes like this one have a profound and direct impact on the lives of innocent homeowners.”
Cox is the fourth defendant involved in this scheme to be sentenced. Three other defendants pleaded guilty and have been sentenced. In December 2012, Lord Allah was sentenced to 18 months in prison. In January 2013, Rebecca Konsevick was sentenced to 30 months in prison while Latonya Burnett was sentenced to three years of probation.
United States Attorney Carmen M. Ortiz; Thomas P. Baker, Acting Special Agent in Charge of the U.S. Secret Service; John G. Collins, Special Agent in Charge of Internal Revenue Service’s Criminal Investigation in Boston; Kevin M. Niland, Inspector in Charge of U.S. Postal Inspection Service; and Christina Scaringi, Special Agent in Charge of the U.S. Department of Housing and Urban Development, Office of the Inspector General, Northeast Regional Office, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Ryan M. DiSantis of Ortiz’s Economic Crimes Unit.Detroit Man Sentenced to More Than 21 Years in PrisonFor Receipt and Possession of Child PornographyRead the Press Release
A Detroit man was sentenced today to 262 months in federal prison after having pleaded guilty to receipt and possession of child pornography, U.S. Attorney Barbara L. McQuade announced today.
Joining McQuade in the announcement was Special Agent in Charge Marlon Miller, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI).
Lawrence Flack, 54, of Detroit, Michigan was sentenced by United States District Judge Stephen J. Murphy, III.
Evidence established that Flack, who had previously been convicted of sexual battery against a minor, used a peer-to-peer file sharing program to locate and download images and videos of little girls, mostly ages 9 to 10 years old, being forced to engage in sexually explicit activities with adults. Agents from the Department of Homeland Security identified over 7,500 images and videos, some portraying sadistic or masochistic conduct.
In announcing the sentence, McQuade stated, "This case is not just about bad pictures. Real children suffer so that defendants like this one can look at child pornography. The children are physically abused and then virtually abused again and again forever."
“This significant sentencing against a convicted child predator should serve as a stark warning for those who target and prey on children,” said Marlon Miller, Special Agent in Charge for HSI Detroit. “The aggressive investigation and prosecution of child predators remains among HSI's highest priorities.”
This case was investigated by the Department of Homeland Security. It was prosecuted by Assistant United States Attorney Maggie Smith, of the General Crimes Unit.
Denver Man Sentenced to Federal Prison for Being A Felon in Possession of A FirearmRead the Press Release
DENVER – Albert Jesse Gallegos, Jr., of Denver, Colorado, was sentenced this week by U.S. District Court Judge Philip A. Brimmer to serve 78 months in federal prison for being a felon in possession of a firearm, United States Attorney John Walsh and Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Special Agent in Charge Luke Franey announced. Following his prison sentence, Gallegos was ordered to spend 3 years on supervised release. The defendant, who appeared at the sentencing hearing in custody, was remanded at the hearing’s conclusion.
Gallegos was indicted by a federal grand jury in Denver on October 4, 2012. He pled guilty before Judge Brimmer on September 16, 2013. Gallegos was sentenced on December 16, 2013.
According to court records, including the stipulated facts contained in the defendant’s plea agreement, on September 13, 2012, officers from the Denver Police Department, Lakewood Police Department, and the Rocky Mountain Safe Streets Task Force were conducting surveillance in southwest Denver in an attempt to locate and arrest the defendant, Albert Jesse Gallegos, Jr. Defendant Gallegos was a known fugitive with an active arrest warrant out of Lakewood, Colorado.
Shortly before 4:00 pm, law enforcement officers saw Gallegos leave a Denver home. Gallegos was carrying a black backpack. Gallegos walked to a black Ford Expedition, opened the rear door and placed the backpack inside. Officers moved in to arrest Gallegos. Gallegos attempted to run, but was restrained by the officers. Gallegos resisted arrest and fought with the officers, but was eventually handcuffed and arrested.
Gallegos was searched incident to arrest. Officers found a glass smoking pipe and three clear plastic baggies containing methamphetamine in Gallegos’s pockets. Police impounded the vehicle and conducted an inventory search. Officers found the backpack behind the driver’s seat. Inside the backpack were two loaded semiautomatic handguns - a .40 caliber, Smith and Wesson pistol and a .9mm, FNP pistol - and ammunition. The Smith and Wesson was loaded with a magazine containing 7 rounds of .40 caliber ammunition. The FNP pistol was loaded with a magazine containing 13 rounds of .9mm ammunition. There was also a box of .40 caliber ammunition inside the backpack.
Gallegos was a felon and therefore a prohibited person. Prior to his September 13, 2012 possession of the firearms and ammunition, Gallegos had received six felony convictions, three in Colorado and three in Arizona, for crimes punishable by more than one year imprisonment. Following his arrest, Gallegos was convicted of two additional felonies in Colorado state court.
This case was investigated by the ATF, the Denver Police Department, and the Lakewood Police Department as part of Project Safe Neighborhoods.
Gallegos was prosecuted by Assistant U.S. Attorney Richard Hosley.
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Defendant Sentenced for Wire Fraud Involving Loss of Nearly $2,000,000Read the Press Release
Michael J. Moore, United States Attorney for the Middle District of Georgia, announces that William Frazier, 43, of Midland, Georgia was sentenced on Thursday, December 19, 2013, to serve fifty one (51) months imprisonment for wire fraud. The sentence was handed down by the Honorable Clay D. Land, United States District Court Judge in Columbus, Georgia
Mr. Frazier entered a plea of guilty on August 16, 2013. In his plea agreement, the defendant admitted that on August 31, 2010, he made an unauthorized Omega Visa credit card purchase in the amount of $47,250 for a statue of a golfer. On January 27, 2010, he sent an unauthorized wire transfer in the amount of $75,312.87 from the state of Georgia to the states of Delaware and then to Maryland which he used to pay personal bills. The credit cards used in those transactions had been issued to Mr. Frazier by his employer for business use only but instead he used same to make personal purchases and to obtain funds for his personal use. The total amount of the fraud was $1,900,000.The case was investigated by the Federal Bureau of Investigation. The case was prosecuted by Assistant United States Attorney Mel Hyde.
For additional information please contact Pamela Lightsey, Public Information Officer, United States Attorney’s Office at (478) 621-2603.
Defendant Sentenced for StalkingRead the Press Release
Michael J. Moore, United States Attorney for the Middle District of Georgia, announces that James Howard Wheeler, 46, of Imperial Beach, California, was sentenced on Thursday, December 19, 2013, to serve thirty (30) months imprisonment for interstate stalking. The sentence was handed down by the Honorable Clay D. Land, United States District Court Judge in Columbus, Georgia
Mr. Wheeler entered a plea of guilty on August 13, 2013. In his plea agreement, the defendant admitted that beginning in July, 2012, and continuing to February, 2013, he directed threatening and harassing communications from his home in California to the victim, who was an estranged family member living in Georgia, via telephone, text messages, e-mail, and Facebook. Many of the messages contained express and implied threats of coming to Georgia and harming the victim. Over 37 threatening voice mails were left on the victim’s phone in a three month period, as well as numerous Facebook and other public internet postings. All of the voice mails were left even after Mr. Wheeler had been confronted by agents of the Federal Bureau of Investigation (FBI) about his conduct.The case was investigated by the Federal Bureau of Investigation. The case was prosecuted by Assistant United States Attorney Crawford Seals.
For additional information please contact Pamela Lightsey, Public Information Officer, United States Attorney’s Office at (478) 621-2603.
Defendant Sentenced for Possession with Intent to Distribute CocaineRead the Press Release
Michael J. Moore, United States Attorney for the Middle District of Georgia, announces that Darrin Scott, 42, of Columbus, Georgia, was sentenced on Thursday, December 19, 2013, by the Honorable Clay D. Land, United States District Court Judge in Columbus, Georgia to serve sixty three (63) months imprisonment for possession with intent to distribute cocaine.
Mr. Scott entered a plea of guilty on August 13, 2013. In his plea agreement, the defendant admitted that between August 9, 2011 and March 7, 2012, he conspired with others to distribute 1981 grams of cocaine by shipping packages from California to Columbus, Georgia.
The case was investigated by the U.S. Drug Enforcement Administration and the U.S. Postal Inspection Service. The case was prosecuted by Assistant United States Attorney Mel Hyde.For additional information please contact Pamela Lightsey, Public Information Officer, United States Attorney’s Office at (478) 621-2603.
Defendant Sentenced for Possession of Methamphetamine and A Stolen HandgunRead the Press Release
Michael J. Moore, United States Attorney for the Middle District of Georgia, announces that Larry Eugene Yancey, aka “Ziggy”, 42, of an unknown address, was sentenced on Thursday, December 19, 2013, to serve two hundred twenty eight (228) months imprisonment for possession with the intent to distribute methamphetamine and possession of a firearm in furtherance of a drug trafficking crime. The sentence was handed down by the Honorable Clay D. Land, United States District Court Judge in Columbus, Georgia
Mr. Yancey entered a plea of guilty on August 13, 2013. In his plea agreement, the defendant admitted that on April 24, 2012, he was apprehended by the Phenix City, Alabama Police and the Metro Narcotics Task Force with 343.3 grams of crystal methamphetamine and a stolen Smith and Wesson .38 special handgun.Said United States Attorney Michael J. Moore, “While federal drug crimes carry heavy sentences all by themselves, this is another case in which the possession of a firearm substantially increased this defendant’s time in prison.”
The case was investigated by the Columbus Police Department, the Metro Narcotics Task Force and the U.S. Drug Administration. The case was prosecuted by Assistant United States Attorney Mel Hyde.
For additional information please contact Pamela Lightsey, Public Information Officer, United States Attorney’s Office at (478) 621-2603.
Defendant Sentenced for Domestic ViolenceRead the Press Release
Michael J. Moore, United States Attorney for the Middle District of Georgia, announces that Robert Hielscher, 36, of Opelika, Alabama was sentenced on Thursday, December 19, 2013, to serve sixty (60) months imprisonment in a case of domestic violence resulting in substantial bodily injury. The sentence was handed down by the Honorable Clay D. Land, United States District Court Judge in Columbus, Georgia
Mr. Hielscher, an active military employee at the time of the incident, entered a plea of guilty on August, 14 2013. In his plea agreement, the defendant admitted that on April 28, 2013, he repeatedly assaulted the victim with his hands and fists in the presence of their two year old child. In addition, Mr. Hielscher cut the victim with a knife and assaulted her. The assault occurred in the parties’ residence at Ft. Benning, Georgia.The case was investigated by the Ft. Benning Criminal Investigation Division and the Federal Bureau of Investigation. The case was prosecuted by Assistant United States Attorney Crawford Seals.
For additional information please contact Pamela Lightsey, Public Information Officer, United States Attorney’s Office at (478) 621-2603.
Correctional Institution Employee Sentenced on Bribery Related OffenseRead the Press Release
RALEIGH - United States Attorney Thomas G. Walker announced today RASHONDA CROSS, 27,a formercorrectional officer at the Rivers Correctional Institution, Winton, North Carolina, was sentenced by United States District Judge Louise W. Flanagan for one count of conspiracy to commit bribery, in violation of Title 18, United States Code, Section 371, to 3 years’ probation, 45 days intermittent confinement, and a $100 special assessment.
Investigation revealed that CROSS, while employed as a correctional officer at the Rivers Correctional Institution, accepted payments from inmates within the facility in return for smuggling in contraband items such as cell phones and cigarettes. It further showed that some inmates paid bribes to correctional officers to gain their cooperation in the scheme. Four others have been previously convicted and sentenced for their conduct in the scheme: former Rivers Correctional Officer RHONDA BOYD wassentenced in July 2013 to 20 months’ imprisonment; former Rivers Correctional Officer RAYE LYNN HOLLEY wassentenced in October 2013 to 20 months’ imprisonment; former Rivers’ inmate ROLAND BAZEMORE was sentenced in April 2013 to 30 months’ imprisonment; and former Rivers’ inmate KENNETH DODD was sentenced in October 2013 to 37 months’ imprisonment.
Investigation of this case was conducted by the Department of Justice, Office of Inspector General and the Federal Bureau of Investigation, with assistance provided by the United States Postal Inspection Service.
Convicted Sex Offender, Who Was Arrested in Oklahoma, Admits Failing to Register as A Sex OffenderRead the Press Release
LUBBOCK, Texas— Glenn Wayne Baker, 60, formerly of Taylor County, Texas, appeared this morning in federal court, before U.S. District Judge Sam R. Cummings, and pleaded guilty to an indictment charging failure to register and update registration as a sex offender. He faces a maximum statutory penalty of 10 years in federal prison and a $250,000 fine. Judge Cummings ordered a presentence investigation report with a sentencing date to be set after the completion of that report. Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
According to documents filed in the case, in August 1981, Baker was convicted by a jury of the felony offense of aggravated rape, in the District Court of Taylor County, Texas. Based on this conviction, he was a sex offender under the Sex Offender Registration and Notification Act (SORNA), and was required to register as a sex offender for life under state and federal law. On January 11, 2013, Baker registered as a sex offender, listing his address in Tye, Taylor County, Texas, and acknowledging his duty to register as a sex offender for life.
Beginning in January 2013, Baker lived with his sister in Tye after being paroled on his Texas aggravated rape conviction, and was registered as a sex offender while living there. On July 29, 2013, Baker cut off his electronic monitor and left his residence in Tye, and he did not provide any notice, before or after he left, to any authorities. He then traveled to Enid, Oklahoma, and moved in with his wife, who he had married several years earlier while he was in prison. He told her that he had been given permission by Texas authorities to move to Oklahoma. Baker lived in Enid, Oklahoma, from approximately August 1, 2013, until he was arrested in mid-August 2013.
The case was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”
The investigation was conducted by the U.S. Marshals Service. Assistant U.S. Attorney Steven M. Sucsy is in charge of the prosecution.
Connecticut Man Sentenced to 27 Months in Prison for Stealing $390,000 Through Investment Fraud SchemeRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that JONATHAN GRACIA, 25, formerly of Middletown, was sentenced today by U.S. District Judge Vanessa L. Bryant in Hartford to 27 months of imprisonment, followed by three years of supervised release, for running an investment fraud scheme.
According to court documents and statements made in court, GRACIA falsely told friends and acquaintances that he was developing a website for which he had potential buyers, and that he had developed an “app” for the iPhone, and then solicited investments and loans from his victims in connection with both of these purported ventures. GRACIA regularly told the victims that they would receive outsized returns on their investments. As part of the scheme, GRACIA created bogus documents to deceive his victims, including fake checks, bogus bank account statements and a letter that he created on what appeared to be the letterhead of a prominent Connecticut hedge fund management company. Through this scheme, GRACIA defrauded his victims of $390,000.
GRACIA was ordered to pay full restitution to his victims.
GRACIA was arrested on March 18, 2013, and is currently detained. On June 18, 2013, he pleaded guilty to one count of wire fraud.
This matter was investigated by the Federal Bureau of Investigation, with the assistance of the Branford and Stamford Police Departments. The case was prosecuted by Assistant U.S. Attorney Paul A. Murphy.
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CAMDEN, N.J. – A Camden man is charged in a scheme to produce and sell fake government documents after federal agents broke up his alleged fraudulent operation, U.S. Attorney Paul J. Fishman announced today.
Domingo Luna, 33, aka “Morro,” of Camden, N.J., was arrested by special agents of Immigration and Customs Enforcement, Homeland Security Investigations (ICE HSI) on Dec. 12, 2013. A Mexican citizen not legally in the United States, he has been held in ICE administrative custody since that time. Luna was charged federally late yesterday in a criminal complaint with one count of making fake identification documents and one count of producing counterfeit permanent resident, or “green” cards.
Luna appeared this morning before U.S. Magistrate Judge Joel Schneider in Camden federal court and was detained.
According to the criminal complaint and statements made in court: Federal law enforcement officers learned that a man nicknamed “Morro” was producing and selling false and fraudulent U.S. Social Security cards, permanent residence cards and driver’s licenses from a location in Camden. From early to mid-December 2013, “Morro,” who was later identified as Luna, sold an undercover law enforcement officer two fake social security cards, a fraudulent permanent residence card and a Pennsylvania driver’s license. Luna took pictures of the officer with a digital camera and produced the documents at the Camden address.
On Dec. 12, 2013, law enforcement officers executed a search warrant on Luna’s residence, where they found evidence of a sophisticated fraudulent document-making operation, including computer equipment, a digital camera, a laminating machine and at least 25 fake cards.
The charges of producing a false identification card and green card carry a maximum potential penalty of 15 years and 10 years in prison, respectively. Each charge also carries a maximum $250,000 fine.
U.S. Attorney Fishman credited special agents of ICE HSI, under the direction of Special Agent in Charge Andrew M. McLees, and ICE Enforcement and Removal Operations, under the direction of Newark, N.J., Field Office Director John Tsoukaris, with the investigation leading to today’s arrests.
The government is represented by Assistant U.S. Attorney Matthew T. Smith of the U.S. Attorney’s Office Criminal Division in Camden.
13-479Defense counsel: Assistant Federal Public Defender Tom Young Esq., Camden
Cairo, Illinois, Man Charged with Disaster Relief FraudRead the Press Release
A federal grand jury in Benton, Illinois, has charged Bernard F. Brown, 48, Cairo, Illinois, with false statements to federal officials and disaster relief fraud offenses, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today.
The indictment charges Brown with four counts of making false statements and one count of disaster relief fraud during 2011 and 2012. The false statement charges carry a potential sentence of up to five years imprisonment, a $250,000 fine, and up to 3 years of supervised release. The disaster relief fraud charge carries a potential sentence of up to 30 years imprisonment, a $250,000 fine and up to 5 years supervised release.
An indictment is a formal charge against a defendant. Under the law, a defendant is presumed to be innocent of a charge until proved guilty beyond a reasonable doubt to the satisfaction of a jury.
Brown’s trial is set for February 21, 2014, at the U.S. District Court in Benton, Illinois.
The investigation in this case was conducted by the Department of Homeland Security and the case is being prosecuted by Assistant United States Attorney Thomas E. Leggans.
Broward Resident Sentenced for Tax FraudRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and José A. Gonzalez, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), announce that defendant Mazincia Ductant, 37, of Sunrise, was sentenced today to 36 months in prison, followed by one year of supervised release. Ductant previously pled guilty to one count of tax fraud, in violation of Title 26, United States Code, Section 7206(2). Ductant was also ordered to pay $1,317,508 in restitution.
According to court documents, Ductant was the owner of Ninote Tax Services (“Ninote”), a tax preparation business in Margate, Florida. During the years 2007-2009, Ductant used Ninote to file hundreds of tax returns on behalf of her clientele. Ductant falsified a high percentage of the returns she prepared by inflating or completely fabricating Schedule A deductions, Schedule C losses, First Time Home Buyers' credits, and Household Help wages.
Court documents state that Ductant was responsible for preparing fraudulent tax returns for approximately 125 people, which resulted in a total tax loss to the government of approximately $1,317,508.
Mr. Ferrer commended the investigative efforts of IRS-CI. The case is being prosecuted by Assistant U.S. Attorney Harry C. Wallace. Jr.
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.
Brandenton Man Sentenced to 27 Years in Prison for Production of Child PornographyRead the Press Release
Jacksonville, Florida – U.S. District Judge Timothy J. Corrigan today sentenced Estella D. (Washington) Wright and her husband, Dorian D. Wright, to 4 years, 3 months’ and 15 months’ imprisonment, respectively. The sentences were handed down in connection with the couple’s involvement in a tax refund scheme and Estella Wright’s conviction on seven counts of aggravated identity theft. The court also ordered the couple to pay restitution in the amount of $210,737.97, to the Internal Revenue Service, and $1,500.00 to a victim of the identity theft. The couple resides in Brunswick, Georgia.
Both pleaded guilty to the charges on June 26, 2013.
According to court documents, from at least September 2007 through 2008, Estella Wright stole the means of identification from individuals through her employment at a temporary staffing agency. Wright then provided these means of identification to her co-conspirators to fraudulently file tax returns and obtain income tax refunds. The fraudulently filed tax returns caused a total of $816,384.00 to be directly deposited into bank accounts held in either Estella Wright’s or Dorian Wright’s name.
The case was investigated by Internal Revenue Service - Criminal Investigation. It is being prosecuted by Assistant United States Attorney Kelly S. Karase.
Bradenton Man Sentenced to 27 Years in Prison for Production of Child PornographyRead the Press Release
Tampa, Florida – U.S. District Judge Elizabeth A. Kovachevich today sentenced Heriberto Pena-Salazar (25, Bradenton) to 27 years in federal prison for production of child pornography. As part of his sentence, he was also ordered to serve a 15-year term of supervised release, following his incarceration, and to register as a sex offender.
Salazar was found guilty on October 2, 2013.
According to court documents, in May 2012 Pena-Salazar persuaded a pre-pubescent female to engage in sexually explicit conduct for the purpose of producing a visual depiction of the act. In a video recovered on Pena-Salazar’s cellular phone, his face is visible, as he is seen pulling back the victim’s pants and underwear and performing sexual acts on her. During an interview, he admitted that he abused the child and stated that he did so in order to trade the video for child pornography from others.
A forensic review of the computer laptops and hard drive seized from Pena-Salazar revealed 600 videos and 400 images of child pornography, including files depicting pre-pubescent children and sadomasochistic conduct. Pena-Salazar, a Mexican national, was illegally present in the United States.“The exploitation of children is one of the most heinous crimes we investigate,” said Susan McCormick, special agent in charge of Homeland Security Investigations Tampa. “This case was especially egregious, and as a result, this man will serve nearly 30 years in prison. Let this case serve as a warning to individuals who prey on innocent children – we will find you, arrest you and ensure you are prosecuted to the fullest extent of the law.”
This case was investigated by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and Enforcement and Removal Operations, the Florida Department of Law Enforcement, the Manatee County Sheriff’s Office, and the Bradenton Police. It was prosecuted by Assistant United States Attorneys Jennifer L. Peresie and Amanda C. Kaiser.
It is another case brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.Boca Raton Resident Sentenced for Filing False Tax Returns, Access Device Fraud, and Aggravated Identity TheftRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Assistant Attorney General Kathryn Keneally of the Justice Department’s Tax Division, José A. Gonzalez, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), and Michael B. Steinbach, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, announce that Harvey Zitron, 62, of Boca Raton, was sentenced to 81 months in prison, to be followed by three years of supervised release.
Zitron was previously convicted by a federal jury on all ten counts charged in the indictment. According to the indictment, Zitron was charged with filing fraudulent IRS United States Individual Income Tax Returns, Forms 1040, for 2004 and 2005 (Counts 1 and 2), and Amended Individual Income Tax Returns, Forms 1040X for 2003, 2004 and 2005 (Counts 3-5), all in violation of Title 26, United States Code, Section 7206(1). In addition, he was charged with three counts of access device fraud, in violation of Title 18, United States Code, Section 1029(a)(2) (Counts 6, 8 and 10), and two counts of aggravated identity theft, in violation of Title 18, United States Code, Section 1028A(a)(1) (Counts 7 and 9).
According to the evidence presented at trial, Zitron used companies to write checks to friends or acquaintances who cashed the checks and returned the cash to Zitron. Zitron then failed to declare this income on his tax returns. He also opened credit card accounts in the names of his son and ex-wife, and charged more than $1,000 in a single year on those accounts without their authorization or knowledge.
Mr. Ferrer commended the investigative efforts of the IRS-CI and the FBI. This case was prosecuted by Assistant U.S. Attorney Harry Wallace and Department of Justice Tax Division Attorney Kevin C. Lombardi.
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.
Bank Employee Sentenced to Prison for Failing to File Currency Transaction Reports on Drug ProceedsRead the Press Release
Accepted Payment from Drug Dealer for Converting Proceeds from Small Bills to $100 Bills
Baltimore, Maryland – U.S. District Judge James K. Bredar sentenced Sabrina Nicole Fitts, age 29, of Baltimore, Maryland, today to one month in prison, followed by eight months of home detention, for failing to file currency transaction reports on suspected drug proceeds. Judge Bredar also ordered Fitts to perform 250 hours of community service and to forfeit $5,000 she was paid by a drug dealer for converting the drug proceeds.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Assistant Special Agent in Charge Gary Tuggle of the Drug Enforcement Administration, Baltimore District Office; and Chief James W. Johnson of the Baltimore County Police Department.
According to Fitts’ plea agreement, Fitts was the head teller at the Perry Hall branch of M&T Bank. On at least eight occasions over a period of two to three years, Fitts converted the proceeds from the sale of illegal drugs from small denomination bills (i.e. $5, $10 and $20 bills) to $100 bills, on behalf of the leader of drug trafficking organization. The amounts involved in each transaction ranged from $50,000 to $100,000 and Fitts converted the bills without filing or having anyone else at the bank file a currency transaction report or suspicious activity report, as she was required by law to do. For example, on April 18, 2013, the drug dealer called Fitts to arrange to convert $100,000, gave Fitts $100,000 in small denomination bills in a bag or backpack, and returned later the same day to retrieve the $100 bills. On each occasion, the drug dealer paid Fitts one percent of the amount involved as her fee. Fitts admitted she received $5,000 from the drug dealer.As head teller at the bank, Fitts was familiar with the currency transaction reporting requirements, and in fact had attended anti-money laundering training annually since at least 2009.
United States Attorney Rod J. Rosenstein praised the DEA and Baltimore County Police Department for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Stefan D. Cassella, who prosecuted the case.Baltimore Man Pleads Guilty to Producing Child Pornography and Attempting to Entice A Minor to Engage in Sexual ActivityRead the Press Release
His Ex-Wife Pleads Guilty to Distribution of Child Pornography
Baltimore, Maryland – David Ralph Fisher, age 43, of Baltimore, pleaded guilty today to producing child pornography and attempting to coerce and entice a minor to engage in sexually explicit activity. His ex-wife, Lori Fisher, age 46, of St. Cloud, Florida, pleaded guilty to distribution of child pornography.
The guilty pleas were announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; Commissioner Anthony W. Batts of the Baltimore Police Department; and Baltimore City State’s Attorney Gregg L. Bernstein.
According to their plea agreements, after repeated requests from David Fisher, Lori Fisher produced multiple sexually explicit photographs of two minor females, on at least two occasions between August and December of 2008. Lori Fisher took the photographs with her cell phone, then sent the images electronically to David Fisher via text message.
On November 4, 2012, the Baltimore Police Department (BPD) received information that images and videos of child pornography were observed on David Fisher’s external hard drive, located at his residence. The external hard drive was provided to the BPD and examined. Multiple files depicting minors engaged in sexually explicit conduct were found. A search warrant was subsequently executed at David Fisher’s residence on November 20, 2012, and computers, cell phones and other items were seized and forensically examined. Sexually explicit email messages with attachments were recovered in which Fisher solicited child pornography from other individuals, and shared child pornography from his collection. Also, in February 2013, law enforcement confirmed that some of the sexually explicit images found on David’s computer and cell phone were images of the two minor girls that Lori Fisher had photographed and sent to David. In all, over 2200 images and 100 videos of minors engaged in sexually explicit conduct, including prepubescent minors, were recovered.
On March 14, 2013, a BPD detective working in an undercover capacity contacted David Fisher on his Facebook profile posing as a 14 year old female. Between March 14 and April 11, 2013, David Fisher communicated with the undercover detective through Facebook and email. For many of these communications, Fisher was using a computer at a public library because his computer was seized during the search of his residence in November 2012. David Fisher asked the undercover detective to send him sexually explicit photographs and sent the undercover detective sexually explicit photographs of himself. In addition, Fisher gave the undercover detective his cell phone number and proposed meeting to engage in sexual activity. A meeting was arranged for April 11, 2013. Fisher was arrested when he arrived at the meeting location at the appointed time.
As part of their plea agreements, David and Lori Fisher will be required to register as a sex offender in the place where they reside, where they are employees, and where they are students, under the Sex Offender Registration and Notification Act (SORNA).
David Fisher faces a minimum mandatory sentence of 15 years and a maximum of 30 years in prison for production of child pornography, and a minimum of 10 years in prison and a maximum of life in prison for coercing and enticing a minor to engage in sexually explicit conduct. Lori Fisher faces a minimum of five years and a maximum of 20 years in prison for distribution of child pornography. U.S. District Judge James K. Bredar has scheduled sentencing for David Fisher on April 3, 2014 at 3:00 p.m. and for Lori Fisher on June 11, 2014 at 9:30 a.m.
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. For more information about internet safety education, please visit www.justice.gov/psc and click on the "resources" tab on the left of the page.
United States Attorney Rod J. Rosenstein commended the FBI, Baltimore Police Department and Baltimore City State’s Attorney’s Office for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Judson T. Mihok, who is prosecuting the case.
Army National Guard Colonel and Sergeant Indicted<br /> for Allegedly Defrauding Recruiting Assistance ProgramRead the Press Release
A retired colonel and a sergeant in the Army National Guard have been charged in a nine-count indictment in Albuquerque, N.M., for allegedly defrauding the National Guard Bureau and its contractor of approximately $12,000 by fraudulently obtaining recruiting bonuses, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division.
Retired Colonel Isaac Alvarado, 74, of Albuquerque, N.M. was charged with one count of conspiracy to commit wire fraud, four counts of wire fraud and four counts of aggravated identity theft in an indictment that was filed this week in the U.S. District Court for the District of New Mexico. Sergeant First Class Travis Nau, 40, also of Albuquerque, N.M., was charged with one count of conspiracy to commit wire fraud, three counts of wire fraud and three counts of aggravated identity theft.
According to court documents, in approximately September 2005, the National Guard Bureau entered into a contract with Document and Packaging Broker Inc. to administer the Guard Recruiting Assistance Program (G-RAP). The G-RAP was a recruiting program that was designed to offer monetary incentives to soldiers of the Army National Guard who referred others to join the Army National Guard. Through this program, a participating soldier could receive bonus payments for referring another individual to join. Based on certain milestones achieved by the referred soldier, a participating soldier would receive payment through direct deposit into the participating soldier’s designated bank account. To participate in the program, soldiers were required to create online recruiting assistant accounts. The rules prohibited Army National Guard recruiters from participating in the G-RAP.
According to court documents, between approximately November 2007 and February 2012, Alvarado participated as a recruiting assistant in the G-RAP. Nau, who worked in a recruiting office and is Alvarado’s son-in-law, allegedly provided Alvarado with the names and Social Security numbers of potential soldiers. This enabled Alvarado to claim that he was responsible for referring these potential soldiers to join the military, when in fact he did not recruit any of them. In addition, Nau advised at least two potential soldiers to falsely report that Alvarado had assisted in their recruitment even though he had not. As a result, Alvarado allegedly received a total of approximately $12,000 in fraudulent recruiting bonuses.
An indictment is merely a charge and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
If convicted, the defendants face up to five years in prison on the conspiracy count. Each wire fraud count carries a maximum penalty of 20 years in prison. Each count of aggravated identity theft carries a mandatory two-year sentence in prison. Each charged count carries a maximum fine of up to $250,000, or twice the gross gain.
The case is being investigated by special agents from the Fort Bliss Army Criminal Investigation Command. The case is being prosecuted by Trial Attorneys Sean F. Mulryne, Mark J. Cipolletti and Heidi Boutros Gesch of the Criminal Division’s Public Integrity Section.ADM Subsidiary Pleads Guilty to<br /> Conspiracy to Violate the Foreign Corrupt Practices ActRead the Press Release
A subsidiary of Archer Daniels Midland Company (ADM) pleaded guilty today and has agreed to pay more than $17 million in criminal fines to resolve charges that it paid bribes through vendors to Ukrainian government officials to obtain value-added tax (VAT) refunds, in violation of the Foreign Corrupt Practices Act (FCPA).
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney James A. Lewis of the Central District of Illinois and Special Agent in Charge David A. Ford of the FBI’s Springfield Division made the announcement.
“As today’s guilty plea shows, paying bribes to reap business benefits corrupts markets and undermines the rule of law,” said Acting Assistant Attorney General Raman. “ADM’s subsidiaries sought to gain a tax benefit by bribing government officials, and then attempted to deliberately conceal their conduct by funneling payments through local vendors. ADM, in turn, failed to implement sufficient policies and procedures to prevent the bribe payments, although ultimately ADM disclosed the conduct, cooperated with the government, and instituted extensive remedial efforts. Today’s corporate guilty plea demonstrates that combating bribery is and will remain a mainstay of the Criminal Division’s mission. We are committed to working closely with our foreign and domestic law enforcement partners to fight global corruption.”
Alfred C. Toepfer International Ukraine Ltd. (ACTI Ukraine), a subsidiary of ADM, pleaded guilty in the Central District of Illinois to one count of conspiracy to violate the anti-bribery provisions of the FCPA and agreed to pay $17.8 million in criminal fines. The Department of Justice also entered into a non-prosecution agreement (NPA) with ADM in connection with the company’s failure to implement an adequate system of internal financial controls to address the making of improper payments both in Ukraine and by an ADM joint venture in Venezuela.
In a parallel action, ADM consented with the U.S. Securities and Exchange Commission (SEC) to a proposed final judgment that orders the company to pay roughly $36.5 million in disgorgement and prejudgment interest, bringing the total amount of U.S. criminal and regulatory penalties to be paid by ADM and its subsidiary to more than $54 million.
According to the charges, from 2002 to 2008, ACTI Ukraine, a trader and seller of commodities based in the Ukraine, together with Alfred C. Toepfer International G.m.b.H. (ACTI Hamburg), another subsidiary of ADM, paid third-party vendors to pass on bribes to Ukrainian government officials to obtain VAT refunds. The charges allege that, in total, ACTI Ukraine and ACTI Hamburg paid roughly $22 million to two vendors, nearly all of which was to be passed on to Ukrainian government officials to obtain over $100 million in VAT refunds, resulting in a benefit to ACTI Ukraine and ACTI Hamburg of roughly $41 million.
According to the NPA with ADM, a number of concerns were expressed to ADM executives, including an e-mail calling into question potentially illegal “donations” by ACTI Ukraine and ACTI Hamburg to recover the VAT refunds, yet nonetheless failed to implement sufficient anti-bribery compliance policies and procedures to prevent corrupt payments.
In addition to the monetary penalty, ADM and ACTI Ukraine also agreed to cooperate with the department, to periodically report the companies’ compliance efforts, and to continue implementing enhanced compliance programs and internal controls designed to prevent and detect FCPA violations.
The agreements acknowledge ADM’s timely, voluntary and thorough disclosure of the conduct; ADM’s extensive cooperation with the department, including conducting a world-wide risk assessment and corresponding global internal investigation, making numerous presentations to the department on the status and findings of the internal investigation, voluntarily making current and former employees available for interviews, and compiling relevant documents by category for the department; and ADM’s early and extensive remedial efforts.
The department acknowledges and expresses its appreciation for the cooperation and assistance of German law enforcement authorities, which, in a parallel investigation, reached a resolution with ACTI Hamburg regarding its role in the bribery scheme.
In addition, the department acknowledges and expresses its appreciation for the significant assistance provided by the SEC’s Division of Enforcement.
This ongoing investigation is being conducted by the FBI. The case is being prosecuted by Trial Attorney Daniel S. Kahn of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Eugene Miller of the Central District of Illinois, with significant assistance from the Criminal Division’s Office of International Affairs.
Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa .13-Year Fugitive Doctor Convicted for Federal Income Tax FraudRead the Press Release
HOUSTON – A former doctor who was a fugitive for more than 13 years has been convicted of filing a false income tax return, announced United States Attorney Kenneth Magidson. Steven Louis Price pleaded guilty late yesterday after a lengthy hearing to making false statements on a federal income tax return.
Price became a fugitive when he failed to appear in court on this case on Dec. 16, 1999. He remained a fugitive until his surrender to the U.S. Marshals Service on March 20, 2013.
The investigation established Price willfully made materially false statements in his 1992 federal income tax return by understating gross income derived from his medical practice and falsely claiming entitlement to a married joint filing status. Price was never married. The Investigation further determined Price willfully understated Schedule C gross receipts derived from his medical practice on his federal income tax return by at least $98,315. Price received the majority of this income from attorneys and insurance companies paying worker’s compensation or automobile accident claims. In order to conceal this income, Price cashed many of the checks and used the proceeds to purchase cashier’s checks.
U.S. District Judge Nancy F. Atlas, who accepted the guilty plea, has set sentencing for Feb. 26, 2014. At that time, he faces up to 36 months in prison and a possible $100,000 fine. Price has been in custody since his surrender on March 20, 2013, where he will remain pending that hearing.
The investigation was conducted by Internal Revenue Service-Criminal Investigation. The case is being prosecuted by Assistant United States Attorney Daniel C. Rodriguez.
19 December 2013
West Point Cadet Arrested for PossessionAnd Distribution of Child PornographyRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and James T. Hayes, Jr., the Special Agent-in-Charge of the New York Office of the United States Department of Homeland Security (“DHS”), Homeland Security Investigations (“HSI”), announced today the arrest of RICKY PATRICK HESTER for possession and distribution of child pornography. HESTER, a cadet at the United States Military Academy at West Point, was arrested by HSI agents today on the West Point campus and presented in White Plains federal court before United States Magistrate Judge Lisa Margaret Smith.
Manhattan U.S. Attorney Preet Bharara stated: “As alleged, Ricky Patrick Hester possessed and distributed illegal child pornography, a crime that victimizes the most vulnerable members of our society. Thanks to the efforts of Homeland Security Investigations, Hester’s alleged illicit conduct was brought to light, and he will now have to answer to these serious charges.”
HSI Special Agent-in-Charge James T. Hayes, Jr. stated: "Few crimes are more damaging and disturbing than the willful possession and distribution of explicit sexual images of children. This is not a victimless crime and HSI will work tirelessly to target and arrest those who enable exploitation by purchasing child pornography."
According to the allegations in the criminal Complaint filed today in White Plains federal court:
From at least as early as February 2013, and up to on or about September 29, 2013, on a number of occasions, HESTER possessed and distributed images and videos containing child pornography. According to the Complaint, during their investigation, DHS agents learned that HESTER used an email account to exchange numerous videos with other internet users that contained what appeared to be minor children engaging in sexually explicit conduct. When HESTER was questioned in his barracks yesterday, he admitted that he sent and received numerous images and videos containing child pornography using a private email account.
HESTER, 23, of Granger, Indiana, is charged with one count of receiving or distributing child pornography, which carries a mandatory minimum sentence of five years in prison and a maximum sentence of 20 years in prison, and one count of possessing child pornography, which carries a maximum sentence of 10 years in prison. Both counts also carry a maximum fine of $250,000 or twice the gross gain or loss from the offense.
Mr. Bharara praised the outstanding investigative work of the Department of Homeland Security. He also thanked the Army Criminal Investigation Command for their assistance in the investigation. He added that the investigation is continuing.
HSI encourages the public to report suspected child predators and any suspicious activity through its toll-free hotline at 1-866-DHS-2ICE. Investigators staff this hotline around the clock. Suspected child sexual exploitation or missing children may also be reported to the National Center for Missing and Exploited Children, an Operation Predator partner, at 1-800-843-5678 or http://www.cybertipline.com
The prosecution is being overseen by the Office’s White Plains Unit. Assistant United States Attorney Daniel P. Filor is in charge of the prosecution.
The charges contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Waterford Man Sentenced to 51 Months in Rison for Leading Extensive Mortgage Fraud SchemeRead the Press Release
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Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that JOSE GUZMAN, 53, of Waterford, was sentenced today by Senior U.S. District Judge Alfred V. Covello in Hartford to 51 months of imprisonment, followed by three years of supervised release, for operating an extensive mortgage fraud scheme in eastern Connecticut.
According to court documents and statements made in court, GUZMAN operated a fraudulent mortgage business first with Maurizio Lancia at Royal Financial Services, and then later with Stacey Petro at First Source Financial Services. GUZMAN also owned and operated J.G. Property and Investment Management Company, which was a real estate property management company located in New London. In addition, GUZMAN, Lancia, and William Athan formed and operated Broad Street Investment Group, which was purportedly a Real Estate Investment Company. Through these companies, GUZMAN, Lancia, Athan, Petro and others arranged for individuals (“borrowers”) to purchase real estate, primarily residential housing properties located in New London County, by obtaining funding from various mortgage companies and mortgage originators after submitting false information on the borrowers’ mortgage loan applications. The fraudulent information included information regarding the borrowers’ income, assets, employment, rent history, as well as the borrowers’ intention to make the properties their primary residence. The borrowers, who typically were individuals who had good credit but were of modest means with low levels of income, were compensated for participating in the scheme.
For certain transactions, GUZMAN and his co-conspirators caused escrow checks to be issued to a contracting company purportedly to pay for work that had been done on the property prior to the closing, when no work had been performed. The checks were converted to cashier’s checks, which were used during the closing as down payments from the borrower.
Through this conspiracy, GUZMAN and his co-conspirators collected large commissions and fees, and kept part of the money advanced by the lenders, which was intended to be used to finance the purchase of the properties, but instead was used for the benefit of GUZMAN, his co-conspirators and their various companies.
In addition, GUZMAN and others also falsified closing records that showed that money obtained from the financing would be used to improve the properties. GUZMAN and his co-conspirators represented to the borrowers that they would properly manage the purchased properties, but failed to do so. Instead, they converted the rent money to their own use, rather than use the money to pay the mortgages.
GUZMAN and his co-conspirators caused more than 200 mortgages to be funded during the period of the conspiracy. As a result of defaults on the mortgages, the lenders suffered losses of more than $9 million.
As part of his sentence, Judge Covello ordered GUZMAN to pay restitution of approximately $7.8 million.
On September 9, 2008, GUZMAN pleaded guilty to one count of conspiracy to commit mail fraud and wire fraud. Sixteen other individuals, including Lancia, Athan and Petro, have pleaded guilty to various charges stemming from this scheme. Lancia and Petro are currently serving prison terms of 27 months and 41 months, respectively. Athan awaits sentencing.
This matter has been investigated by the Federal Bureau of Investigation and the U.S. Department of Housing and Urban Development, Office of Inspector General. The case is being prosecuted by Assistant U.S. Attorneys Michael S. McGarry and David T. Huang.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722 [email protected]VA Employee Charged with Theft of Government FundsRead the Press Release
ATLANTA - Zerry Feaster, a/k/a Zerry Travis, a/k/a Zerry West has been arraigned on federal charges of theft of government funds and making false statements. Feaster was indicted by a federal grand jury on December 17, 2013.
“This defendant is charged with abusing her position with the VA by repeatedly using her government credit card to steal over $80,000,” said United States Attorney Sally Quillian Yates. “Money intended to support the men and women who have served our country was instead used by the defendant for gambling and at luxury stores.”
Monty Stokes, Special Agent in Charge, U.S. Department of Veterans Affairs, Office of Inspector General, said “We are disappointed in Feaster’s alleged betrayal of public trust. She was hired to help veterans, but allegedly elected to abuse her position for her own personal gain. We are committed to safeguarding VA programs and resources to ensure veterans are afforded the care they have earned.”
According to United States Attorney Yates, the charges, and other information presented in court: Feaster was employed as a secretary in the Police Services division at the Department of Veteran Affairs Medical Center in Atlanta. From February 2010 through February 2012, Feaster allegedly engaged in a scheme to steal over $80,000 from the VA by misusing her government-issued credit card. The credit card was supposed to be used to purchase office supplies and other equipment for the Police Services division. Feaster instead allegedly misused her government credit card to purchase pre-paid gift cards, which she then used to buy personal items, such as luxury accessories and jewelry at stores such as Coach and Tiffany & Co., as well as to gamble. Feaster attempted to hide the gift card purchases by creating and submitting fake purchase orders to the VA, falsely claiming that she was using the government credit card to buy office supplies and equipment for Police Services.
The indictment charges Zerry Feaster, 45, of Ellenwood, Ga., with seven counts of theft of government funds and five counts of false statements. Each theft of government funds count carries a maximum sentence of ten years in prison and a fine of up to $250,000. Each false statement count carries a maximum sentence of five years in prison and a fine of up to $250,000. In determining the actual sentence, the Court will consider the United States Sentencing Guidelines, which are not binding but provide appropriate sentencing ranges for most offenders.
Members of the public are reminded that the indictment only contains charges. The defendant is presumed innocent of the charges and it will be the government’s burden to prove the defendant’s guilt beyond a reasonable doubt at trial.
This case is being investigated by the Department of Veterans Affairs, Office of Inspector General.
Assistant United States Attorneys Mary L. Webb and Ryan Scott Ferber are prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is http://www.justice.gov/usao/gan/.
U.s. Attorney Announces New Fraud Charges in Connection with Indianapolis Land BankRead the Press Release
INDIANAPOLIS – United States Attorney Joseph H. Hogsett announced this afternoon the return of an indictment charging Reginald Walton, age 30, and Mark Harsley, age ##, with conspiring to defraud Indianapolis taxpayers with a wire fraud scheme involving a city mowing contract. This follows the indictment of Walton and four others connected with the Indianapolis Land Bank program on charges that they engaged in wire fraud and bribery in order to facilitate a number of fraudulent land purchases.
“It is time we began calling the waste and abuse of tax dollars exactly what it is – theft,” Hogsett said. “It steals teachers from our classrooms, officers from our streets, and federal law enforcement has had enough. If you violate the public trust, we will find you, we will investigate you, and we will hold you fully accountable in a court of law.”
According to a grand jury indictment unsealed this afternoon, the two defendants began their alleged scheme in February 2013. At the time, Walton was the Assistant Administrator of the Indianapolis Department of Metropolitan Development (DMD), and oversaw the operation of the Indianapolis Land Bank program. The indictment alleges that Walton solicited from Harsley gifts, payments, and other things of value, in exchange for favorable official action by the DMD.
As a result, the charging document alleges that Walton used his position to influence the DMD to award Harsley a contract to mow the lawns of DMD-held properties across the city. It is also alleged that Walton had accepted offers from Harsley to receive future kickbacks on the city contract. Harsley began submitting invoices and collecting payment for this corruptly obtained contract in the summer of 2013.
“Public corruption is the number one priority of our criminal program and the focus of the FBI’s Public Corruption Task Force,” said FBI Special Agent in Charge Robert A. Jones. “This case is the result of the tireless work of FBI Agents and an Indiana State Police Task Force Officer working with dedicated prosecutors from the United States Attorney’s Office.”
These new allegations follow the May 2013 indictment 0.of Walton and four others on charges that they engaged in wire fraud and bribery in an effort to defraud Indianapolis taxpayers. These defendants included John Hawkins, age 27, who was the Senior Project Manager for the DMD during the alleged conspiracy.
The purpose of the Indianapolis Land Bank is to acquire abandoned and tax delinquent properties in Indianapolis and make them available for sale to non-profit and for-profit real estate developers. For-profit investors interested in purchasing real estate from the Land Bank must meet or exceed a property appraisal in their purchase price. Non-profit purchasers, however, may bypass the auction process, purchasing real estate for a price between $1,000 and $2,500 per parcel, regardless of the appraised value of the property.
The May indictment alleges that Walton and Reed accepted bribes and “kick-backs” to facilitate fraudulent property sales to non-profit entities that would then sell the property to for-profit businesses. After these “pass-through” transactions had taken place, Walton and Hawkins would receive kickback payments from the non-profit organizations from the proceeds of the property sales. The investigation into the pair also included the use of an undercover agent, and Walton accepted $500 from that agent in return for his agreement to fraudulently transfer at least ten parcels of land to the agent for $1,000 each.
The May indictment charges David Johnson, age 47, Executive Director of the Indianapolis Minority AIDS Coalition, as well as Randall K. Sargent, age 57, president of New Day Residential Development, with participating in the scheme.
Prior indictments have also charged Aaron Reed, age 35, with wire fraud and bribery. Reed is the registered agent for the Naptown Housing Group, a for-profit real estate corporation. It is alleged that Reed would solicit for-profit investors to obtain real estate currently held by the Land Bank. After the investors obtained the property from one of the “pass-through” non-profit organizations, Reed would obtain profits, which he would share with Walton through payments and kickbacks. The indictment further alleges that Reggie Walton, while working at the DMD and heading up the Land Bank program, became a silent partner in the Naptown Housing Group.
These indictments come as the U.S. Attorney’s Office has prioritized the investigation and prosecution of fraud, waste and abuse on the part of public officials and those in positions of trust. As part of this effort, in 2012 the Office created its first Public Integrity Working Group to assist in the investigation and prosecution of cases involving public corruption and white collar crimes. This case is the result of an investigation by the Federal Bureau of Investigation and the Indiana State Police, both active members of the Working Group.
According to Special Litigation Counsel Bradley A. Blackington, today’s new wire fraud charges carry a maximum penalty of twenty years in prison. An indictment is only a charge and is not evidence of guilt. Defendants are presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
U.S. Army Soldier Charged with Attempting to Sell Stolen C-4 Explosive MaterialRead the Press Release
A federal criminal complaint was unsealed today that charges 23–year-old U.S. Army soldier Tyler Glen Patrick with possession and transportation of stolen explosive material announced United States Attorney Robert Pitman and FBI Special Agent in Charge Armando Fernandez.
According to the criminal complaint, on December 17, 2013, federal authorities arrested Patrick in Copperas Cove, TX, after he attempted to sell a one-and-a-quarter-pound block of C-4 explosive which he previously stole following a field exercise on Fort Hood, TX.
Patrick, who remains in federal custody, faces up to ten years in federal prison and a maximum $250,000 fine upon conviction.
This case is being investigated by the Federal Bureau of Investigation together with the U.S. Army Criminal Investigation Division. Assistant United States Attorney Greg Gloff is prosecuting this case on behalf of the Government.Two Men Sentenced for Interstate Stolen Credit Card Scheme and Bank FraudRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced that two men convicted by a Harrisburg jury of stealing over a hundred credit card numbers from over 25 banks and credit unions were sentenced Wednesday to federal prison.
According to United States Attorney Peter J. Smith, Wednesday, Chief Judge Christopher C. Conner sentenced Ramil Kismat, of New York, to 64 months in prison, as well as a period of two years of supervised release following incarceration. Previously, Chief Judge Conner had sentenced the co-defendant, Sergey Sorokin, of New Jersey, to 58 months of incarceration followed by two years of supervised release. Sorokin faces deportation to Russia following service of his sentence.
In November 2012, a jury convicted Kismat and Sorokin of fraudulently obtaining over 100 credit card and debit card numbers from a variety of banks and credit unions. These stolen credit card numbers were embossed on cards for use in retail establishments. Between June and October 2010, Kismat and Sorokin used these credit and debit card numbers at of stores throughout the Mid-Atlantic states.
The scheme was initially discovered by investigators for Target Stores in the Harrisburg area. They observed two individuals repeatedly entering their stores, attempting to purchase gift cards with multiple credit cards, many of which were regularly declined. Through a comprehensive investigation conducted with the United States Secret Service, the scheme was uncovered and Kismat and Sorokin were identified and charged. The evidence revealed their activities took place primarily at Target stores in New Jersey, Pennsylvania, and Maryland. Evidence also showed that credit cards were used at other retailers. The potential loss from the defendants’ use of these fraudulent credit cards in this four-month period was over half a million dollars.
Although the primary victims in this case were the 25 financial institutions and over a hundred citizens whose accounts were compromised, Target Stores provided substantial investigative resources in solving and prosecuting this case. The U.S. Attorney’s Office also acknowledged the efforts of the United States Secret Service, Silver Spring Township Police, Swatara Township Police, and Wegman's Stores for their efforts.
The case was prosecuted by Assistant U.S. Attorney Michael A. Consiglio.
Two Elizabeth, N.J., Women Plead Guilty to Operating Counterfeit Check SchemeRead the Press Release
NEWARK, N.J. – Two Elizabeth, N.J., women admitted today to conspiring to commit bank fraud by depositing more than half a million dollars in counterfeit checks into different TD Bank accounts, U.S. Attorney Paul J. Fishman announced.
Latisha White, 28, and Synethia Bland, 30, each pleaded guilty before U.S. District Judge William J. Martini to one count of bank fraud conspiracy in the superseding indictment against them.
According to documents filed in this case and statements made in court:
Between October 2009 and May 2012, White created counterfeit checks on her computer using commercially available check-writing software. White and Bland deposited the counterfeit checks into multiple accounts at TD Bank. In addition, Bland recruited others to use their own accounts or open new accounts to deposit the counterfeit checks.
White and Bland employed a variety of methods to withdraw the fraudulent funds, including making ATM cash withdrawals, submitting cash withdrawal slips and making debit card purchases on merchandise and postal money orders.
White and Bland each admitted they arranged the deposit of more than 150 counterfeit checks into more than 120 different bank accounts. They also each admitted that they deposited counterfeit checks that totaled more than $500,000.
The charge to which White and Bland pleaded guilty carries a maximum potential penalty of 30 years in prison and a maximum fine of $1 million. Sentencing is scheduled for April 24, 2014.
U.S. Attorney Fishman credited special agents of the U.S. Secret Service, under the direction of Special Agent in Charge James Mottola; postal inspectors, under the direction of Inspector in Charge Maria L. Kelokates; and investigators at the Union County Prosecutor=s Office, under the direction of Acting Prosecutor Grace H. Park, and the Morris County Prosecutor’s Office, under the direction of Acting Prosecutor Fredric M. Knapp.
The government is represented by Assistant U.S. Attorney Bohdan Vitvitsky of the U.S. Attorney’s Office Economic Crimes Unit in Newark.13-478
Defense counsel:
Bland: Rubin Sinins Esq., Springfield, N.J.
White: Ruth Liebesman Esq., Paramus, N.J.
Bland, Synethia and White, Latisha Superseding Indictment
Trinidad and Tobago Woman Sentenced <br /> for Her Role in Kidnapping SchemeRead the Press Release
A woman from Trinidad and Tobago was sentenced today to serve 20 years in prison for her role in the 2005 kidnapping of naturalized U.S. citizen Balram “Balo” Maharaj, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and Special Agent in Charge Michael B. Steinbach of the FBI’s Miami Field Office.
Doreen Alexander, 47, of Arima, Trinidad and Tobago, was sentenced by U.S. District Judge Emmet G. Sullivan in the District of Columbia. Alexander pleaded guilty on Oct. 3, 2013, to conspiracy to commit hostage taking, a lesser included offense under count one of the indictment, which charged conspiracy to commit hostage taking that resulted in death. Judge Sullivan also sentenced Alexander to serve five years of supervised release to follow her prison term.
Alexander was the last charged co-conspirator involved in the kidnapping of Maharaj, Alexander’s former boyfriend and the father of one of her sons. The other 12 co-conspirators were previously extradited and prosecuted by the U.S. Attorney’s Office for the District of Columbia.
According to court documents, Alexander initiated the April 2005 kidnapping of Maharaj and provided information that allowed the kidnappers to identify, locate and track Maharaj. Alexander alerted the kidnappers to Maharaj’s visits to Trinidad and Tobago; gave them information on his wealth, which was used to calculate the ransom; and reassured the kidnappers that they had the right man after the ransom negotiations went awry. Maharaj died as a result of the kidnapping.
The case was investigated by the FBI’s Miami Division Extraterritorial Squad with the assistance of the Criminal Division’s Office of International Affairs and the FBI’s Legal Attache’s Office in Port of Spain, Trinidad and Tobago. Special assistance was further provided by the Trinidad & Tobago Police Service Anti-Kidnapping Squad and Homicide Bureau.
The case is being prosecuted by Senior Trial Attorneys Matthew C. Singer and Teresa A. Wallbaum of the Criminal Division’s Human Rights and Special Prosecutions Section.Three Men from Toledo Area Indicted for $23 Fraud SchemeRead the Press Release
A federal grand indicted three men from the Toledo area for their roles in the operation of a $23 million fraud scheme involving the sale of Iraqi dinar currency and two non-existent hedge funds, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, and Kathy Enstrom, Special Agent in Charge, IRS-Criminal Investigation, Cincinnati field office.
Those indicted are: Bradford L. Huebner, 66, of Ottawa Hills, Ohio; Charles N. Emmenecker, 66, of Sylvania, Ohio, and Michael L. Teadt, 67, of Maumee, Ohio.
Rudolph M. Coenen, age 47, of Jacksonville, Florida, has already pleaded guilty to crimes related to his role in the conspiracy.
The men are charged with conspiracy to commit wire fraud and wire fraud. Huebner is also charged with multiple counts of money laundering, structuring and willful failure to file currency and transaction reports.
As a result of the defendants’ conduct, investors lost about $23.8 million from dinar sales and more than $700,000 from the sale of non-existent hedge fund “seats” and “placements,” according to the indictment.
“These defendants made false statements time and again to convince people to part with their savings and hard-earned cash,” Dettelbach said. “The fact that they falsely claimed one member of the conspiracy was wounded while fighting in Iraq is particularly egregious.”
“Illegal activity involving the investment industry has brought financial ruin to many Americans,” Enstrom said. “IRS Criminal Investigation is committed to unraveling complex investment schemes to ensure that the promoters of these schemes do not use the financial-services industry for personal gain.”
The indictment charges that beginning about August 2010, Huebner, Coenen, Emmenecker and Teadt conspired to operate “BH Group” in Toledo and “Bayshore Capital Investments” in Jacksonville in order to defraud investors through investments in the Iraqi dinar currency and two non-existent hedge funds.
The conspirators promoted the dinar and non-existent hedge funds through the dissemination of a series of material falsehoods conveyed primarily through weekly interstate conference calls and through the conspirators’ web site, according to the indictment.False claims included statements about the U.S. Treasury Department’s holdings of dinar and involvement in the Iraqi dinar investment market, according to the indictment.
Additional material false statements made by all the defendants include, but are not limited to, portrayal of Coenen as a former vice president at JP Morgan Chase and a former Marine who was awarded the Purple Heart after being wounded in Iraq during Operation Desert Storm.
Coenen worked for JP Morgan Chase for one day as an account executive/loan officer. He never served in the first Gulf War, was never wounded in combat and never received a Purple Heart, according to the indictment.
If convicted, the defendants’ sentence will be determined by the court after a review of factors unique to this case, including the defendants’ prior criminal record, if any, the defendants’ roles in the offense and the characteristics of the violation. The sentence will not exceed the statutory maximum and in most cases will be less than the maximum.
This case is being handled by Assistant United States Attorneys Gene Crawford and Matthew W. Shepherd following an investigation by the Internal Revenue Service – Criminal Investigation.
An indictment is only a charge and is not evidence of guilty. The defendants are entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Three Individuals Convicted on Drug ChargesRead the Press Release
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(304) 234-7725 ● Contact: Chris Zumpetta-Parr, Public Affairs SpecialistFollow us on Twitter @NDWVnews
WHEELING, WEST VIRGINIA – Three individuals entered pleas of guilty before Judge Frederick P. Stamp, Jr.
U.S. Attorney William J. Ihlenfeld, II, announced that
SYLVESTER WALKER, also known as "COOP", age 21, of Wheeling, entered a plea of guilty to “Distribution of Crack Cocaine within 1,000 Feet of Luau Manor” and NICOLE MARIE GUST, age 20, of Bellaire, Ohio, entered a plea of guilty to “Aiding and Abetting the Distribution of Crack Cocaine.” WALKER, who is in custody pending sentencing, faces up to 40 years in prison and GUST, who is in custody pending sentencing, faces up to 20 years in prison. This case was prosecuted by Assistant U.S. Attorney Randolph J. Bernard and was investigated by the Ohio Valley Drug & Violent Crime Task Force, consisting of officers from the Wheeling Police Department, the Ohio County Sheriff’s Department, and the Drug Enforcement Administration.
MICHAEL HURST, age 27, of Moundsville, West Virginia, entered a plea of guilty to “Aiding and Abetting the Distribution of Oxycodone within 1,000 Feet of Moundsville Middle School.” HURST, who is free on bond pending sentencing, faces up to 40 years in prison. This case was prosecuted by Assistant U.S. Attorney Robert H. McWilliams, Jr. and investigated by the Marshall County Drug Task Force includes officers and agents from the Moundsville Police Department, the Marshall County Sheriff’s Department, and the Drug Enforcement Administration.