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13 December 2013
Federal Jury Convicts Tampa Woman on All Counts for Participation in Credit Card Fraud RingRead the Press Release
Tampa, FL – Acting United States Attorney A. Lee Bentley, III announces that following a four-day trial, a federal jury yesterday found Viviana Reyes (40) guilty of conspiracy to commit credit card fraud, conspiracy to commit bank fraud, credit card fraud, bank fraud, aggravated identity theft, and identity theft. Reyes faces maximum penalties ranging from 5 to 30 years in federal prison on each conspiracy, fraud and identity theft count, and a mandatory 2-year consecutive term in prison for each of the three aggravated identity theft counts. A sentencing hearing has been set for March 6, 2014.
Reyes was first indicted on July 29, 2013. Four of her co-conspirators have already pleaded guilty and are awaiting sentencing. Another co-conspirator (Michel Lermos-Hernandez) remains a fugitive.
According to the testimony and evidence presented at trial, the individuals in this indictment, led by Michel Lermos-Hernandez, ran a credit card fraud ring. Lermos, aided by others, obtained credit card numbers by placing key loggers that intercepted and stored swiped credit and debit card account information on credit card terminals at the International Mall, in Tampa. One device, in particular, was located at the Haagen-Dazs ice cream store. Using the stolen credit and debit card account numbers, Lermos and his co-conspirators then created counterfeit credit cards. Lermos obtained blank credit card stock (cards), embossing machines and magnetic stripe re-encoders from Viviana Reyes, and also sold stolen credit and debit card numbers, taken from the key loggers, to her.
After making the credit cards, Lermos provided the counterfeit credit cards to his co-conspirators, including his sister (Norma Cabezas-Hernandez), his girlfriend (Danay-Crespo Rodgriguez), and at least two other separately charged individuals (Lazaro Rodriguez and Abel Osorio-Cuok), to buy electronics and gift cards at Tampa area retailers. The conspirators then took these items to Viviana Reyes’ house, where she paid them in cash for the fraudulently obtained merchandise.
A search of Reyes’ house, in February 2013, revealed a credit card skimming device and two thumb drives filled with hundreds of stolen credit and debit card numbers, many of which were compromised at Haagen-Dazs. Agents also recovered three counterfeit Florida Drivers Licenses, which were indicative of those that Reyes had sold to others for the purpose of opening lines of credit at area stores. A search of Reyes’ phone revealed pictures of merchandise such as Apple computers and tablets for sale, along with numerous text messages advertising electronics and gift cards for sale at greatly reduced prices.
To date, agents estimate the loss to the affected financial institutions to exceed $650,000.
This case was investigated by the Tampa Police Department, Florida Department of Law Enforcement, and the United States Secret Service (USSS), as part of the USSS’s Credit Card Fraud and Identity Theft Task Force. It is being prosecuted by Assistant United States Attorneys Mandy Riedel and Suzanne Nebesky.
Emory Students Targeted by Identity ThievesRead the Press Release
ATLANTA - Maario Coleman and Angela Russell have been arraigned for operating a scheme to obtain thousands of dollars by stealing the identities of Emory University law and medical students and using them to apply for loans.
“The alleged actions of these two defendants demonstrates how every member of our community is vulnerable to identity theft and computer intrusions,” said United States Attorney Sally Quillian Yates. “The potential for causing damage to Emory students’ financial and professional futures cannot be overstated. We continue to work aggressively to combat this problem.”
Ricky Maxwell, Acting Special Agent in Charge, FBI Atlanta Field Office, stated: “This case illustrates the need for the law enforcement community to work together in order to stay ahead of today’s very capable and tech savvy individuals that are able to do much harm to many unsuspecting victims. The FBI’s Atlanta Cyber Task Force applauds the quick response of the Emory University Police Department and its continued assistance throughout this investigation.”
“The teamwork of Emory Police investigators, Emory's University Technology Services and school officials, allowed Emory to respond quickly to reports, initiate an investigation and take steps to prevent further fraud against our graduates,” says Emory Police Chief Craig Watson. “On behalf of the Emory Police Department, I greatly appreciate the productive partnership with the Federal Bureau of Investigation that has led to the arrest of these two individuals.”
According to United States Attorney Yates, the charges, and other information presented in court: Coleman obtained lists of students graduating in the class of 2013 by checking university websites and attending graduation ceremonies. Coleman and Russell used that information to obtain the students’ dates of birth and social security numbers from online databases. The defendants then used those personal identifiers to apply for post-graduate “bar loans” and “residency loans” at Discover Bank. “Bar loans” are designed to pay for living expenses and exam preparation while law school graduates studied for the bar exam. Similarly, “residency loans” assist medical school graduates with the costs of residency, relocation, and board exam review courses.
In many instances, Discover required school transcripts before it would approve and fund the loans. To satisfy this requirement, Coleman and others used the personal identifiers of the victims to obtain passwords to access Emory’s online portal and order the victims’ transcripts. The transcripts were mailed to other participants in the scheme, and Coleman then coordinated sending the transcripts to Discover. He also arranged for the loan proceeds to be deposited into bank accounts fraudulently opened in the victims’ names. After the loans were funded, other participants in the scheme obtained the funds via ATM withdrawals.
The investigation showed that the scheme began as early as May 2013, and continued until at least November 6, 2013. On that date, law enforcement officers, including federal agents, interviewed Russell regarding the scheme. Following the interview, the agents went to a second location, and then returned to Russell’s residence. When they arrived, agents became alarmed by a large volume of smoke they saw rising from Russell’s apartment. After entering the apartment, the agents found Coleman and Russell inside, with fire and smoke coming from the fireplace. The agents put out the fire with an extinguisher and discovered documents and computer equipment, including hard drives and at least one laptop, all either burned in the fire, dismantled or gouged.
To date, investigators have identified over $200,000 in false loan applications. In addition, over 100 students at Emory and other Georgia universities have had their personal information compromised. The fraud was discovered when several Emory students contacted the Emory Police Department after realizing that their personal information had been compromised. The investigation is ongoing.
The indictment charges Coleman, 27, of Decatur, Ga., with one count of conspiracy to commit bank fraud, three counts of aggravated identity theft, one count of computer fraud, and one count of tampering with computers and documents. Russell, 42, of Dunwoody, Ga., is charged with one count of conspiracy to commit bank fraud, one count of aggravated identity theft, and one count of tampering with computers and documents. Both appeared before Linda T. Walker, United States Magistrate Judge.
The bank fraud conspiracy and tampering charges each carry a maximum sentence of 20 years in prison. The computer fraud charge carries a maximum sentence of 5 years in prison. The aggravated identity theft charges carry at least one mandatory two-year consecutive sentence, in addition to any other sentence imposed. In addition, the bank fraud count carries a fine of up to $1,000,000, and the computer fraud and tampering counts each carry 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 Federal Bureau of Investigation and the Emory University Police Department.
Assistant United States Attorney Shanya Dingle is prosecuting the case.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
If you are a victim of identity theft, change the passwords to your online banking and other financial accounts because your information may have been stolen/ acquired over the Internet.
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/ .
Edward Henry Pratt Sentenced in U.S. District CourtRead the Press Release
The United States Attorney's Office announced that during a federal court session in Great Falls, on December 11, 2013, before Chief U.S. District Judge Dana L. Christensen, EDWARD HENRY PRATT, a 35-year-old resident of Browning, was sentenced to a term of:
- Prison: 96 months
- Special Assessment: $100
- Supervised Release: 3 years
PRATT was sentenced in connection with his guilty plea to being a felon-in-possession of a firearm.
In an Offer of Proof filed by Assistant U.S. Attorney Laura B. Weiss, the government stated it would have proved at trial the following:
In 2006, PRATT was convicted of felony controlled substances which therefore prohibited from possessing firearms.
On March 23, 2011, in Browning, PRATT possessed a Savage/Springfield, model 67 series E, 12 gauge, pump-action shotgun.
PRATT had been drinking at a residence in Browning, holding the firearm and showing it to various people in an effort to sell it. Multiple individuals observed PRATT with the firearm.
Because there is no parole in the federal system, the truth in sentencing guidelines mandate that PRATT will likely serve all of the time imposed by the court. In the federal system, PRATT does have the opportunity to earn a sentence reduction for good behavior.( However, this reduction will not exceed 15% of the overall sentence.
The investigation was conducted by the Federal Bureau of Investigation.
East St. Louis Man Sentenced to 57 Months’ Imprisonment for Possession of A Firearm by A Convicted FelonRead the Press Release
An East St. Louis, Illinois, man was sentenced to a prison term in federal district court for possession of a firearm by a convicted felon on December 13, 2013, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today.
Stephen Benson, 42, of East St. Louis, Illinois, was sentenced in federal district court in East St. Louis to 57 months’ imprisonment, 3 years’ supervised release, a $100 special assessment, and a fine of $250, following his plea of guilty, on August 18, 2013, to an Indictment charging him with Possession of a Firearm by a Convicted Felon. The charge relates to an incident that occurred on December 12, 2012, in East St. Louis, Illinois, when law enforcement officers, responding to Benson’s residence in reference to an assault, questioned Benson, who admitted having a firearm. Benson was previously convicted of Theft Under $300/Subsequent Offense, on or about September 9, 2010, in St. Clair County, Illinois, Case No. 10-CF-769. The firearm was a Raven, .25 caliber semi-automatic pistol. The sentencing judge also ordered forfeiture of the firearm and the ammunition contained therein.
The case was investigated by members of the Bureau of Alcohol, Tobacco, Firearms, and Explosives. The case was prosecuted by Assistant U.S. Attorney Stephen B. Clark.
District Man Sentenced to 28 Months in Prison for Sexual Abuse of Child-Five-Year-Old Victim, A Relative, Aided Early Investigation-Read the Press Release
WASHINGTON – A 21-year-old man, of Washington, D.C., was sentenced today to 28 months in prison on charges stemming from a sexual assault against a five-year-old relative, U.S. Attorney Ronald C. Machen Jr. announced.
The defendant, who is not identified here to protect the privacy of the victim, pled guilty in August 2013, in the Superior Court of the District of Columbia, to one count each of attempted second-degree child sexual abuse and violating the Bail Reform Act. The Honorable Robert E. Morin sentenced him. Upon completion of his prison term, the defendant will be placed on three years of supervised release. He also must register as a sex offender for 10 years.
According to the government’s evidence, on May 9, 2013, at approximately 8:50 p.m., the defendant was at the home of a relative in Northeast Washington. During this time, the child and her mother were living temporarily with the same relative and were also in the apartment. The child’s mother, who had momentarily left the home, returned to find the defendant under a blanket with her daughter. The child made an immediate report regarding sexual acts the defendant engaged in with her while her mother was gone.
While this case was pending, the court released the defendant, placing him in the high-intensity supervision program on June 14, 2013. After the June court date, the defendant removed his GPS device, and he did not appear in court as scheduled for a hearing on July 15, 2013. He was re-arrested on a bench warrant on July 26, 2013.
In announcing the sentence, U.S. Attorney Machen commended the work of the detectives of the Metropolitan Police Department’s (MPD) Youth Division who were involved in the arrest and investigation of this case. He also expressed his appreciation to Paralegal Specialist D’Yvonne Key, Victim/Witness Advocate Tracey Hawkins, and Assistant U.S. Attorney Mervin A. Bourne, Jr., who investigated and prosecuted the case.
13-420Defendant Sentenced for Planting Drugs on Woman’s CarRead the Press Release
ROME, Ga. – Clifford J. Joyce has been sentenced to one year and six months in prison for framing a Murray County citizen for drug possession.
“By planting drugs on an innocent woman’s car, Mr. Joyce attempted to use the criminal justice system to serve his own personal agenda,” said United States Attorney Sally Quillian Yates. “In the end, however, it is Mr. Joyce, and not the Murray County woman, who will be headed to prison.”Ricky Maxwell, Acting Special Agent in Charge, FBI Atlanta Field Office, stated: “Mr. Joyce’s sentencing today serves to not only hold him accountable for his crime, but provides him time to reflect on this terrible deceptive act intended to harm another innocent individual. The FBI will continue to work with its various local, state and other federal law enforcement partners to identify and investigate any allegations of criminal conduct involving or adversely impacting our criminal justice system.”
“Vindicating an innocent person is as important as convicting the guilty. The GBI will continue to work with our federal law enforcement counterparts to ensure criminal cases are thoroughly investigated so the innocent remain free and the guilty are held accountable,” said Vernon Keenan, GBI Director.
According to United States Attorney Yates, the charges and other information presented in court: In July 2012, a Murray County citizen met with then-Chief Magistrate Judge Bryant Cochran regarding a legal matter. She alleged that during the meeting, Cochran made inappropriate sexual advances towards her.
In an effort to discredit the citizen, Joyce and others participated in a scheme to frame her for drug possession. On or about August 12, 2012, Joyce hid a metal tin containing five packets of methamphetamine under the tire well of the citizen’s car.
Two days later, on August 14, 2012, Murray County Deputy Sheriff Joshua Greeson (who has since been convicted of witness tampering for lying to law enforcement officers) conducted a traffic stop of the citizen’s car. During the traffic stop, Greeson searched the vehicle for drugs. Ultimately, after receiving information from Captain Michael Henderson (who has also been convicted of witness tampering), Greeson found the metal tin of methamphetamine under the tire well. After locating the drugs, Greeson and Henderson arrested the citizen and the driver of the car on narcotics charges. On August 24, 2012, the District Attorney dismissed the charges against the citizen.On June 14, 2013, Joyce, 27, of Dalton, Ga., pleaded guilty to conspiring to distribute methamphetamine. Today, United States District Judge Harold L. Murphy sentenced Joyce to one year, six months in prison to be followed by three years of supervised release, and 100 hours of community service.
This case was investigated by Special Agents of the Federal Bureau of Investigation and the Georgia Bureau of Investigation.
Assistant United States Attorneys Jeffrey W. Davis and Michael V. Herskowitz prosecuted 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 is www.justice.gov/usao/gan.
Dallas County Man Sentenced to 108 Months Incarceration Based on Illegal Possession of FirearmsRead the Press Release
The United States Attorney, Kenyen Brown announces that Norris Johnson, a 29 year old Selma resident was sentenced today. The Honorable William Steele sentenced Johnson to 108 months incarceration followed by three (3) years of supervised release and a monetary assessment of $200. This sentence was based on Johnson’s illegal possession of two (2) firearms on different occasions and the discharge of one of the firearms into a crowd of people. Johnson was charged by Indictment in May 2013 and later pled guilty on August 8, 2013.
Special Agents of The Bureau of Alcohol Tobacco Firearms and Explosives and the Selma, Alabama Police Department investigated the case and brought it to the U.S. Attorney=s Office for prosecution. The prosecutor assigned to the case is Assistant United States Attorney, Gina S. Vann.
Court Upholds Revocation of Federal Firearms License of Adams County Gun DealerRead the Press Release
Peter J. Smith, United States Attorney for the Middle District of Pennsylvania and Essam Rabadi, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives, Philadelphia Field Division jointly announced today that the U.S. Court of Appeals for the Third Circuit upheld the revocation of the Federal Firearms License (FFL) of Scott W. Taylor, d/b/a Taylor’s Trading Post, located in Biglerville, Pennsylvania.
In early 2010, the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) conducted a compliance inspection of Taylor’s business, which was operated out of his home in Biglerville. ATF discovered that over a three-year period of time, Taylor had committed more than 10,000 violations of the Gun Control Act, which requires firearm dealers to keep detailed and timely records of the purchase and sale of firearms.
Law enforcement relies on these records to apprehend criminals who use firearms to commit crimes and to ensure that firearms are not being sold to persons not authorized to possess them.
Despite buying and selling thousands of guns over that three-year period, Taylor failed to record the purchase of 5,715 firearms, the sale of 2,856 firearms, and keep records of the disposition of 1,618 additional firearms – with about 160 of the firearms remaining unaccounted for. Taylor also admitted to possessing a firearm with an obliterated serial number, which he knew was illegal and failing to report it to law enforcement.
As a result of the large volume of guns that Taylor never recorded, it took nine months and the assistance of additional ATF agents to complete the compliance inspection. Ultimately, in November 2011, ATF revoked Taylor’s Federal Firearms License. Taylor challenged this administrative action claiming his three-year failure to comply with the record requirements had not been willful.
U.S. District Court Judge John E. Jones, III, adopted findings resulting from a hearing before Chief Magistrate Judge Martin C. Carlson in which the violations were found to be willful because Taylor admitted he knew the law required him to keep the records and had kept the records in the past, but then failed to keep the records for three years while he continued to buy and sell thousands of guns each year.
Taylor appealed his license revocation to the Third Circuit Court of Appeals claiming that his three-year failure to record firearm sales and purchases were not willful. The Court of Appeals disagreed, finding that the facts established that there was “no question that Taylor violated the [Gun Control Act]” and that his violations were “willful.” As a result of this ruling, Taylor remains unable to engage in the business of dealing in firearms.
This case was handled by Assistant United States Attorney Kate L. Mershimer of the Civil Division of the U.S. Attorney’s Office and ATF Associate Chief Counsel Jeffrey A. Cohen and ATF Division Counsel J. Kevin White.
Conspirator in $220,000 Armored Car Robbery Exiled to over 7 Years in PrisonRead the Press Release
Greenbelt, Maryland - U.S. District Judge Alexander Williams, Jr. sentenced Kai Holt, age 38, of Waldorf, Maryland, today to 88 months in prison followed by five years of supervised release for conspiring to commit, and committing, the armed robbery of an armored vehicle, and conspiracy to possess, and possession of, a firearm in connection with the robbery.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; Special Agent in Charge Steven L. Gerido of the Bureau of Alcohol, Tobacco, Firearms and Explosives - Baltimore Field Division; Chief J. Thomas Manger of the Montgomery County Police Department; Chief Mark A. Magaw of the Prince George’s County Police Department; and Montgomery County State’s Attorney John McCarthy.
According to his plea agreement, in June 2012, Holt and co-defendants Carmen Camacho and John Williams began planning the robbery of an armored vehicle outside the Navy Federal Credit Union located at 12248 Rockville Pike in Rockville, Maryland. On June 12, Williams told Holt that the robbery would take place the next day.
On June 13, Holt armed himself with a loaded .45 caliber semiautomatic pistol and met with Williams and two other co-defendants, Marcus Brooks and Deangelo Williams. They traveled in two vehicles to the Navy Federal Credit Union. The conspirators drove around the area planning escape routes, and parked nearby waiting for the armored car to arrive. At 11:20 a.m., John Williams called Holt and told him to proceed with the robbery. Holt and Brooks walked towards the credit union where a courier was unloading cash from the back of the van for delivery to the credit union. Holt drew his pistol. The courier threw the bag of money on the ground and ran away. Brooks picked up the bag, which contained $220,000, and he and Holt ran back to their vehicles and fled. The co-conspirators traveled back to Prince George’s County where they divided the proceeds of the robbery.
Carmen Camacho, age 31, of Fort Washington, Maryland, pleaded guilty to his role in the robbery and is awaiting sentencing. John Bernard Williams, age 48, and Deangelo Williams, age 20, both of Fort Washington, and Marcus Brooks, age 21, of Lanham, Maryland, also pleaded guilty. John Williams was sentenced to 112 months in prison, Deangelo Williams was sentenced to three years in prison, and Brooks was sentenced to 61 months in prison.
United States Attorney Rod J. Rosenstein commended the FBI, ATF, Montgomery County Police Department, Prince George’s County Police Department and the Montgomery County State’s Attorney’s Office for their work in the investigation and prosecution. Mr. Rosenstein thanked Assistant United States Attorneys Steven E. Swaney and William D. Moomau, who prosecuted the case.
Con Artist Who Craved A Life of Luxury SentencedIn White Plains Federal Court to Six Years in Prison for Operating A Long-Term Fraud SchemeRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that ALICIA HOLMES was sentenced today in White Plains federal court by United States District Judge Kenneth M. Karas to six years in prison for defrauding individuals and businesses of hundreds of thousands of dollars in accommodations, goods, services, and money. HOLMES pled guilty on March 1, 2013, to one count of wire fraud, one count of mail fraud, and one count of providing a false address in furtherance of fraud before Judge Karas.
Manhattan U.S. Attorney Preet Bharara stated: “Many of us would enjoy some of the finer things in life – a lavish home, luxurious hotel suites – and would work for those goals. Alicia Holmes took a huge shortcut with her fraudulent schemes. With today’s sentence, her next address will far more basic.”
According to the Indictment and documents filed in court proceedings:
Holmes’ scheme spanned from approximately April 2007 through May 2011. To attain a life of luxury, Holmes told scores of lies to real estate brokers, property builders, home owners, hotel managers and staff, and school administrators, among others, including lies about her net worth, about where she lived, and about having access to a vast “overseas trust” within a short period of time. To live in hotels with her husband and two sons, Holmes had the bills paid for by friends who trusted her and by real estate brokers who believed she would soon be purchasing multimillion-dollar homes, which would lead to large commissions for the brokers. Holmes also conned hotel employees into letting her and her family stay at their hotels for months at a time without payments. To keep the scheme going, Holmes impersonated lawyers, bankers, and an FBI agent. Additionally, Holmes instructed victims not to cooperate with federal law enforcement agents who were investigating her scheme.
In addition to the prison term imposed on HOLMES, 49, Judge Karas ordered HOLMES to forfeit $542,343.51, to pay restitution to her victims in the amount of $894,205.01, and to serve three years of supervised release.
Mr. Bharara praised the outstanding investigative work of the United States Postal Inspection Service and the Federal Bureau of Investigation.
The case is being handled by the Office’s White Plains Division. Assistant U.S. Attorneys Ilan Graff and Lee Renzin are in charge of the prosecution.
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Columbia County Man Pleads Guilty in Federal Court to Receiving Child Pornography over the InternetRead the Press Release
Jacksonville, Florida – Acting United States Attorney A. Lee Bentley, III announced today that John George Sessine (58, Lake City) has pleaded guilty in United States District Court, in Jacksonville, to receiving images and videos depicting the sexual abuse of minor children over the Internet. He faces a mandatory minimum penalty of not less than 5 years, up to 20 years in federal prison, a potential life term of supervision, and will be required to register as a sex offender. The court also forfeited his computer media, which was traceable to the offense. Sessine has been in custody since his arrest on June 5, 2013. A sentencing date has not yet been set.
According to court documents, on June 5, 2013, FBI agents and other law enforcement officers executed a federal search warrant at a residence occupied by Sessine, in Lake City, Florida. The FBI had previously learned that at least one computer using an Internet Protocol (IP) address resolved to that residence was sharing videos of child pornography over the Internet. Sessine was at the residence and was interviewed by the agents. During an interview, Sessine stated, among other things, that he used a particular file sharing program to download images and videos, that his preference was for young females, and that the youngest child on his computer was 10 or 12 years old. A forensic analysis of Sessine’s computer media revealed that Sessine had collected 107 images and 104 videos of minor children being sexually abused.
This case was investigated by the Federal Bureau of Investigation, the Columbia County Sheriff’s Office, and the Jacksonville Sheriff’s Office. It is being prosecuted by Assistant United States Attorney D. Rodney Brown.
It is another 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."
Clinton Man Sentenced for Possession of Child PornographyRead the Press Release
Jackson, Miss - Christopher Allen Morace, 31, of Clinton, Mississippi, was sentenced in
U. S. District Court today to 120 months in federal prison followed by a lifetime of supervised release for possession of child pornography, announced U. S. Attorney Gregory K. Davis and
Raymond R. Parmer, Jr. Special Agent in Charge of ICE Homeland Security Investigations (“HSI”). Morace was previously convicted of possession of child pornography in North Carolina and sentenced to one year in prison.
“Child pornographers often go to great lengths in an attempt to conceal their criminal actions,” said HSI New Orleans Special Agent in Charge Raymond R. Parmer Jr. "This case shows that despite those attempts to hide, HSI investigators are routinely able to identify and seek prosecution of these dangerous individuals to make our communities a safer place for law-abiding citizens everywhere.” Parmer oversees a five-state region including Mississippi , Alabama, Arkansas, Louisiana, and Tennessee.###
If you believe you have been a victim of fraud from a person or an organization soliciting relief funds on behalf of storm victims, contact the National Center for Disaster Fraud toll free at:
(866) 720-5721
You can also fax information to:
(225) 334-4707
or e-mail it to:
Making sure that victims of federal crimes are treated with compassion, fairness and respect.
Training and seminars for Federal, State, and Local Law Enforcement Agencies.
Help us combat the proliferation of sexual exploitation crimes against children.
Our nation-wide commitment to reducing gun crime in America.
Canton Man Charged with Distributing Hardcore Child PornographyRead the Press Release
ATLANTA - Billy Gene McCorkle, Jr. has been arraigned on charges of distributing and possessing child pornography of children under the age of 12. McCorkle was indicted by a federal grand jury on December 10, 2013. He was detained.
“The sexual exploitation of a child through the distribution of child pornography is a crime that preys on the most innocent in our society, the very ones who depend on us to protect them,” said United States Attorney Sally Quillian Yates. “This defendant is accused of trafficking sexually graphic images of very young children, with some of them even shown in bondage situations. This office is committed to prosecuting those who engage in this horrible trade.”
"The defendant stands accused of trading in the worst kinds of child pornography, in effect victimizing again children whose documented rapes will haunt them for the rest of their lives ," said Brock D. Nicholson, special agent in charge of HSI Atlanta. "HSI special agents and our law enforcement partners will continue to tirelessly pursue these monsters and will use every tool we have available to hold them accountable for their crimes and keep them away from children."
According to United States Attorney Yates, the charges, and other information presented in court: In October 2013, special agents of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations identified McCorkle as a Canton, Georgia resident using a Google email account to transmit hardcore images of pornography depicting very young children. Federal agents then obtained a search warrant to gain access to McCorkle’s email content. A review of those records revealed that between October 27, 2013, and sometime in November 2013, McCorkle used a cellular telephone connected to the Internet to transmit more than 208 photographs and 14 video files, depicting pornographic images of minors, including children under age 12. The photographs and video files included hardcore images of child pornography, some of which involved bondage.
The indictment charges McCorkle, 45, of Canton, Ga., with distributing child pornography, and possessing images of child pornography depicting minors under age 12. Because McCorkle was previously convicted of a sex offense, the distribution charge carries a mandatory minimum sentence of 15 years of imprisonment, up to a maximum sentence of 40 years of imprisonment, and a fine of up to $250,000. And because McCorkle possessed images of prepubescent minors, the possession charge carries a mandatory minimum sentence of 10 years of imprisonment, up to a maximum sentence of 20 years of imprisonment, 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 U.S. Immigration and Customs Enforcement’s Homeland Security Investigations.
Assistant United States Attorney Richard S. Moultrie, Jr. is prosecuting the case.
This case is being brought as part of Project Safe Childhood. In February 2006, the Attorney General launched Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the United States Attorney’s Offices around the country, Project Safe Childhood marshals federal, state and local resources to apprehend and prosecute individuals who exploit children. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is http://www.justice.gov/usao/gan/.
California Man Sentenced to Prison for Money LaunderingRead the Press Release
Jackson, Miss – Jerome Gordon Wellington, 38, of Palmdale, California, and Byram, Mississippi, was sentenced to 188 months in federal prison for laundering drug proceeds through the purchase of a house in Byram, Mississippi, announced U.S. Attorney Gregory K. Davis and Gabriel L. Grchan, Special Agent in Charge, IRS - Criminal Investigation. Wellington was previously convicted of conspiring to distribute multiple kilograms of cocaine from California into Mississippi.
IRS Special Agent in Charge Gabriel L. Grchan stated: “The role of IRS - CI in narcotics investigations is to follow the money, which enabled us to financially disrupt and dismantle Jerome Wellington’s drug trafficking organization. We were proud to have provided this financial expertise as we worked alongside our law enforcement partners to bring Wellington and his cartel of criminals to justice.”
The Internal Revenue Service Criminal Investigation Division and the Drug Enforcement Administration conducted the criminal investigation of the financial affairs leading to the current indictment. The Drug Enforcement Administration, in conjunction with officers from the Ridgeland Police Department, Jackson Police Department, Hinds County Sheriff=s Office, and the Mississippi Bureau of Narcotics, initially investigated the drug trafficking organization of Jerome Gordon Wellington.
U.S. Attorney Davis praised the efforts of the IRS Criminal Investigation and DEA agents who worked tirelessly on the complex investigation into the financial affairs of this drug organization, and Assistant U.S. Attorney Darren LaMarca who prosecuted the case for the government.###
If you believe you have been a victim of fraud from a person or an organization soliciting relief funds on behalf of storm victims, contact the National Center for Disaster Fraud toll free at:
(866) 720-5721
You can also fax information to:
(225) 334-4707
or e-mail it to:
Making sure that victims of federal crimes are treated with compassion, fairness and respect.
Training and seminars for Federal, State, and Local Law Enforcement Agencies.
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Berlin Man Convicted of Robbing Guardian Angel Credit Union in Berlin, New HampshireRead the Press Release
CONCORD, N.H. –Daniel Hufstetler, 34, formerly of 36 High Street in Berlin, New Hampshire was convicted in United States District Court for the District of New Hampshire of robbing the Guardian Angel Credit Union, announced United States Attorney John P. Kacavas.
On November 14, 2011, Hufstetler robbed the Guardian Angel Credit Union, which is located at 200 Coos Street in Berlin, New Hampshire. Hufstetler was arrested on state armed robbery charges two days after the crime, but those charges were later dismissed and the defendant was prosecuted in federal court.
Hufstetler is in custody pending sentencing which is scheduled for April 1, 2014.
This investigation involved the cooperative efforts of federal and local law enforcement entities, including the Federal Bureau of Investigation, the New Hampshire State Police, the Berlin Police Department, the Coos County Sheriff’s Office, and the New Hampshire Drug Task Force. The case was prosecuted by Assistant U.S. Attorney John J. Farley.
Bankruptcy Court Awards Between $5.1 Billion and $14.1 Billion Against Subsidiaries of Anadarko Petroleum Corp. for Fraudulent Conveyance Designed to Evade Environmental LiabilitiesRead the Press Release
Largest Bankruptcy Award Ever for Governmental Environmental Claims and Liabilities, and One of the Largest Environmental Enforcement Awards Ever
Preet Bharara, the United States Attorney for the Southern District of New York (“SDNY”), Robert G. Dreher, the Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resource Division (“ENRD”), Cynthia Giles, the Assistant Administrator for the Office of Enforcement and Compliance of the U.S. Environmental Protection Agency (“EPA”), and Judith Enck, Regional Administrator of the EPA’s Region 2, announced today that the United States Bankruptcy Court for the Southern District of New York has awarded between $5.1 billion and $14.1 billion against defendant Kerr-McGee Corporation and certain related defendant companies (“Kerr-McGee” or “New Kerr-McGee”), all of which are subsidiaries of the Anadarko Petroleum Corporation, in a fraudulent conveyance case brought by the United States and co-plaintiff Anadarko Litigation Trust (the “Trust”) in the bankruptcy of Tronox, Inc., and its subsidiaries (“Tronox”). The Court found that in 2005 the historic Kerr-McGee Corporation (“Old Kerr-McGee”) fraudulently conveyed assets to New Kerr-McGee to evade its debts, including its liability for environmental clean-up at toxic sites around the country. This is the largest award ever in a bankruptcy for governmental environmental claims and liabilities, and one of the largest environmental enforcement awards ever.
Manhattan U.S. Attorney Preet Bharara said: “The United States will not let polluters evade their environmental liabilities through a corporate shell game. For decades, the Old Kerr-McGee Corporation dumped toxic chemicals across the United States, and then it tried to dump its obligation to clean up this mess on an insolvent company. In its wake, Old Kerr McGee left a legacy of contamination in communities across the nation, which has affected homes, places of worship, and town centers. The Court’s decision means that Kerr-McGee will finally have to pay for its pollution, and will fund clean-up in contaminated communities across the nation.”
Acting Assistant Attorney General Robert G. Dreher said: “We are very pleased with this outcome, which will appropriately and fairly account for past pollution and replenish funds for tomorrow’s cleanups. This court decision also sends a clear message that polluters cannot simply walk away from a toxic legacy and leave federal, state, and tribal governments to pick up the tab. This ruling will keep the financial burden on the responsible party, and not allow it to be shifted to the American taxpayer.”
EPA Assistant Administrator Cynthia Giles said: “The Court’s decision makes a strong statement that companies should take responsibility for the toxic pollution they cause. Those that manipulate their assets and leave American taxpayers to foot the bill to clean up their mess will be held accountable. This is a huge win for public health and the environment, as proceeds from the decision will fund needed cleanups across America.”
EPA Regional Administrator Judith Enck said: “This legal victory illustrates EPA’s commitment to cleaning up toxic waste sites in communities and ensuring that polluters, not taxpayers, pay for the environmental remediation. This was a complex case and the outcome ensures that billions of dollars will be channeled to advance toxic cleanups.”
The Fraudulent Conveyance
According to the complaints of the Government and the Trust and the written opinion of U.S. Bankruptcy Judge Allan L. Gropper:
Old Kerr-McGee operated numerous businesses, which included uranium mining, the processing of radioactive thorium, creosote wood treating, and manufacture of perchlorate, a component of rocket fuel. These operations left contamination across the nation, including radioactive uranium waste across the Navajo Nation; radioactive thorium in Chicago and West Chicago, Illinois; creosote waste in the Northeast, the Midwest, and the South; and perchlorate waste in Nevada.
In the years prior to 2005, Old Kerr-McGee concluded that the liabilities associated with this environmental contamination were a drag on its “crown jewel” business, the exploration and production of oil and gas. With the intent of evading these and other liabilities, Old Kerr-McGee created a new corporate entity – defendant New Kerr-McGee – and, through a series of corporate transactions in 2005 and 2006, transferred its valuable oil and gas exploration assets to the new company. The legacy environmental liabilities were left behind in the old company, which was re-named Tronox. As a result of these transactions, Tronox was rendered insolvent and unable to address its environmental and other liabilities. In 2009, Tronox went into bankruptcy.
The United States and the bankruptcy estate (now represented by the Trust) brought this lawsuit to require the defendants to repay the value of the assets fraudulently conveyed from Old Kerr-McGee.
In its decision, the Court found that Old Kerr-McGee transferred assets with the intent to hinder or delay creditors, including particularly environmental creditors, and also transferred those assets for less than their fair value, which left Tronox insolvent, unable to pay its debts when they came due, and undercapitalized. Among other things, the Court concluded that:
- “[T]here can be no dispute that Kerr-McGee acted to free substantially all its assets – certainly its most valuable assets – from 85 years of environmental and tort liabilities.”
- “[O]verhelming” evidence demonstrated that “Defendants devised, carried out and had complete knowledge that [the transfer of Old Kerr-McGee’s oil and gas exploration and production assets was] part of ‘a single integrated scheme’ to create a ‘pure play’ E&P business free and clear of the legacy liabilities.”
- “[T]here is no credibility to the uniform testimony of the inner circle [of Old Kerr-McGee management] that isolation of the oil and gas assets from the chemical business had nothing to do with an effort to cleanse the E&P assets from the legacy liabilities.”
- “The record is replete with evidence that Kerr-McGee misapplied [the] standard [for setting reserves for environmental claims under Generally Accepted Accounting Principles] and thereby understated its liabilities for GAAP purposes.”
- Statements by former Old Kerr-McGee employees that the cost of this environmental pollution would decline after the spin-off were “not rooted in reality.”
The Court concluded that the net proceeds of the fraudulent transfer were $14,459,000,000, and that, depending on a question of bankruptcy law still to be decided in further proceedings, will result in a damages award of between $5,150,490,000 and $14,166,148,000. The bankruptcy court will conduct further proceedings to determine the amount of damages within this range.
Prior Bankruptcy Settlement and Distribution of Fraudulent Conveyance Recovery
In 2011, in connection with Tronox’s Plan of Reorganization, the estate paid approximately $270 million to fund environmental response trusts created to own and clean-up contaminated property. Additionally, pursuant to the Plan of Reorganization and agreements signed at that time, approximately 88% of the recovery in this lawsuit, net of Trust expenses, will be distributed to the environmental trusts and to the federal, state, and local environmental creditors for environmental clean-up of contaminated sites around the nation.
As a result of these agreements, some of the key environmental recoveries for environmental claims and for clean-up of environmental sites are estimated to be the following:
- Between $1.1 billion and $3.1 billion for the Multistate Environmental Response Trust created in the bankruptcy to clean up more than two dozen contaminated sites around the country, including the Kerr-McGee Superfund Site in Columbus, Mississippi.
- Between $1.1 billion and $3.1 billion to be paid to the Nevada Environmental Response Trust created in the bankruptcy to clean up the perchlorate and other contamination resulting from operations at an industrial park near Lake Mead in Nevada.
- Between $880 million and $2.4 billion to be paid to EPA for clean-up of contamination from uranium mining on the Navajo Nation.
- Between $220 million and $620 million to be paid to EPA for clean-up of thorium contamination at the Welsbach Superfund Site in Gloucester, New Jersey.
- Between $213 million and $601 million to be paid to the federal Superfund in repayment of costs previously incurred by EPA cleaning up the Federal Creosote Superfund Site in Manville, New Jersey.
Additional amounts will be paid for numerous other environmental claims and sites at issue in this case.
Mr. Bharara thanked the Trust, its trustee, and its counsel for their critical work on this case. Mr. Bharara also thanked the many federal, state, and tribal officials who worked tirelessly on this matter. The litigation of this case was assisted by EPA personnel from around the country; the U.S. Fish & Wildlife Service and Bureau of Land Management of the U.S. Department of the Interior; the National Oceanic and Atmospheric Administration of the U.S. Department of Commerce; the U.S. Nuclear Regulatory Commission; and the U.S. Forest Service of the U.S. Department of Agriculture, as well as numerous state governments and the Navajo Nation.
This case was handled by the Environmental Protection Unit and Tax and Bankruptcy Unit of the Office’s Civil Division. Assistant U.S. Attorneys Robert William Yalen and Joseph Pantoja, along with Alan S. Tenenbaum, Katherine Kane, Frederick S. Phillips, Marcello Mollo, and Erica Pencak of ENRD, are in charge of this case.
Bank Robbery Accomplice Sentenced to 114 Months in CustodyRead the Press Release
The United States Attorney Kenyen R. Brown announces that on 12/4/2013, Brandon Payne, was committed to the BOP for a term of 114 MONTHS by Federal Judge William Steele; said term consists of 30 months as to Count One and 84 months as to Count Two; said terms to run consecutively. The Judge recommended that the defendant be allowed to participate in residential, comprehensive, substance abuse treatment while incarcerated. The defendant was sentenced to a Supervised Release Term (SRT) of five (5) years as to Counts One and Two. Defendant was ordered to make restitution in the amount of $5,826.00, payable to BankTrust and to participate in a program of testing and treatment for drug and/or alcohol abuse as directed by the Probation Office and to pay a Special Assessment fee of $200.00.
The defendant along with two co-defendants, Kenterrio Scott and Renaldo Gaddis were charged in Count One of the Superseding indictment with a violation of 18U.S.C. ' 2113(a) & (d), Bank Robbery. Bank Robbery carries a maximum penalty of up to 25 years in custody, a $250,000 fine, 5 years of SRT and $100 Special Assessment. He was also charged in Count Two of the Superseding Indictment with a violation of 18 U.S.C. ' 924(c), Possession of Firearm During a Crime of Violence. The maximum penalty is a custody sentence of 7 years consecutive, a fine of $250,000, 3 years SRT and $100 Special Assessment. Payne was the last one to be brought to justice.
This case was investigated by the Federal Bureau of Investigation and prosecuted by AUSA Vicki Davis.
Bank Robber Ordered to Federal PrisonRead the Press Release
HOUSTON – The last of four convicted in the armed bank robbery of a Wells Fargo Bank in September 2012 has been ordered to federal prison, announced United States Attorney Kenneth Magidson.
Today, U.S. District Judge Melinda Harmon sentenced David Holiday, 35, of Houston, to 135 months for his role in the aggravated bank robbery.
On Sept. 26, 2012, at approximately 9:45 a.m., the Wells Fargo Bank on Fulton Street in Houston was robbed by Holiday and two others – Stanley Snowden, 40, and Alvin Theotis Snowden, 41, both of Houston - wearing masks and bandanas. Stanley Snowden and Alvin Snowden were armed with semiautomatic pistols.
Holiday and Alvin Snowden jumped over the teller counter and demanded the bank employees lay down on the ground, while Alvin Snowden pointed his weapon at them. Alvin Snowden took the bank manager to the vault and demanded money, and Holiday took one of the bank employees to her teller drawer.
Stanley Snowden controlled the lobby area, during which time he assaulted an elderly female customer by throwing her to the ground and pointing his pistol directly at her as she lay on the floor of the bank.
After the robbery, the three men exited the bank and entered a Chevrolet Impala, driven by Anthony D. Brown, 40, of Houston, who drove the others to the bank prior to the robbery. All were apprehended a short time later, at which time a .32 caliber pistol, a 9mm pistol and money stolen from the bank were recovered from the vehicle.
The three others also pleaded guilty. Alvin Snowden received a sentence of 319 months, Stanley Snowden received a sentence of 177 total months, while Brown will serve 92 months in federal prison.
The investigation was conducted by the FBI Bank Robbery Task Force, which is comprised of personnel from the FBI, Houston Police Department and Harris County Sheriff's Office. Assistant United States Attorney Jennie Basile is prosecuting the case.
Arkansas Man Indicted for Additional RobberiesRead the Press Release
JEFFERSON CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a Bella Vista, Ark., man who was previously indicted for robbing Alliant Bank in Blackwater, Mo., has been indicted by a federal grand jury for three additional robberies.
Timothy Patrick Hoyt, 43, of Bella Vista, was charged in a four-count indictment returned by a federal grand jury in Jefferson City, Mo., on Wednesday, Dec. 11, 2013. This superseding indictment replaces the original indictment, returned on Nov. 7, 2013, that charged Hoyt with stealing $5,123 from Alliant Bank on June 26, 2013.
The superseding indictment alleges that Hoyt robbed the Subway restaurant at 330 N. Massey Blvd., Nixa, Mo., on July 12, 2013; the Subway restaurant at 1820 W. 32nd St., Joplin, Mo., on July 14, 2013; and the Sally Beauty Supply Store at 2007-C W. Foxwood Dr., Raymore, Mo., on Aug. 6, 2013.
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 Supervisory Assistant U.S. Attorney Lawrence E. Miller. It was investigated by FBI, the Cooper County, Mo., Sheriff’s Department and the Altoona, Iowa, Police Department, the Nixa, Mo., Police Department, the Joplin, Mo., Police Department and the Raymore, Mo., Police Department.
Arizona-Based Man Sentenced for Role in Multi-State Cocaine Distribution ConspriacyRead the Press Release
NORFOLK, Va. – Luis Alberto Navarro, 33, of Tucson, Arizona, was sentenced today to 360 months in prison, followed by 5 years of supervised release, for his role in a cocaine distribution conspiracy. He was also ordered to forfeit $300,000.00 in cash seized in connection with his arrest in June 2013, along with his interest in a home located in Rio Rico, Arizona, which was affiliated with the conspiracy.
Dana J. Boente, Acting United States Attorney for the Eastern District of Virginia, made the announcement after sentencing by United States District Judge Arenda L. Wright Allen.
Navarro pleaded guilty on September 10, 2013. According to court documents, since approximately 2006, Navarro was a member of a large-scale cocaine distribution conspiracy with a far-reaching distribution network that spanned from Virginia to New York, Pennsylvania, Indiana, Arizona, and other locations. The group concealed the cocaine for distribution and the proceeds from the sale of the drugs by secreting both inside the lining of coolers and inert, hollowed-out fire extinguishers to avoid detection during transportation. Navarro ran the Tucson, Arizona hub of the organization where he recruited others to assist in the distribution of cocaine. He was held responsible today for his role in the distribution of over 160 kilograms of cocaine.
This case was investigated by the Drug Enforcement Administration, the Federal Bureau of Investigation, and the Tucson Police Department. Assistant United States Attorneys V. Kathleen Dougherty and Kevin M. Comstock prosecuted the case on behalf of the United States.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.Andalusia Man Sentenced for Child Sex OffensesRead the Press Release
TALLAHASSEE, FLORIDA – David Daniel Hicks, Jr., 42, of Andalusia, Alabama, was sentenced today to serve 200 months in prison for the use of a facility of interstate commerce to entice a minor to engage in sexual activity, interstate travel for illicit sexual conduct, and production of child pornography. Hicks was sentenced to a lifetime term of supervised release after his incarceration. He is required to register as a sex offender, to complete sex offender treatment, to submit to monitoring of any computer or electronic accounts, to avoid unsupervised contact with children, and to inform future employers of his convictions.
Hicks was arrested on April 12, 2013, after traveling from Andalusia to Tallahassee to have sex with what he thought was a fourteen-year-old boy. His arrest was part of a larger undercover investigation conducted by a coalition of law enforcement agencies. Following the arrest, investigators served a search warrant at Hicks’ Alabama residence and found tens of thousands of images of child pornography, including five computer videos of Hicks performing sexual acts on an adolescent male. These videos were created in that residence, with a camera that was seized there.
The solicitation and travel charges were indicted in the Northern District of Florida. The production charge was indicted in the Middle District of Alabama, but transferred to the Northern District of Florida for disposition and sentencing. Hicks entered guilty pleas to all charges against him. Hicks also agreed to forfeit the electronic devices and electronic media that were seized under the search warrant.
In announcing the sentence imposed by the court, United States Attorney Pamela C. Marsh credited the success of this prosecution to the joint efforts of the agencies participating in the North Florida Internet Crimes Against Children Task Force, particularly the U.S. Immigrations and Customs Enforcement, the Tallahassee Police Department, the Leon County Sherriff’s Office, and the Covington County, Alabama Sherriff’s Office.
The case was prosecuted by Assistant United States Attorneys Michael T. Simpson (NDFL) and Jared Morris (MDAL).
This case was brought as part of Project Safe Childhood, a nationwide initiative launched by the Department of Justice in May 2006 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, Project Safe Childhood marshals federal, state, and local resources to 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.
12 December 2013
Westmoreland County Man Sentenced to Probation with Home Detention for Conspiring to Distribute CocaineRead the Press Release
JOHNSTOWN, Pa. - A resident of Claridge, Pa., has been sentenced in federal court to five years probation, the first 12 months of which must be served by conditions of home confinement, 500 hours of community service and a $5,000 fine on his conviction of conspiracy to distribute cocaine, United States Attorney David J. Hickton announced today.
United States District Judge Kim R. Gibson imposed the sentence on Donald S. Swanger, 44.
According to information presented to the court, from July 2008 to May 10, 2011, Swanger conspired to distribute and possess with the intent to distribute five kilograms or more of cocaine.
Assistant United States Attorney John J. Valkovci, Jr., prosecuted this case on behalf of the government.
A joint task force, headed by the Laurel Highlands Resident Agency of the Federal Bureau of Investigation, conducted the investigation that led to the prosecution of Swanger. Other agencies participating on the task force include the Internal Revenue Service-Criminal Investigation, Pennsylvania State Police, Pennsylvania Attorney General's Office, Cambria County District Attorney's Office, Carrolltown Police Department, Patton Police Department, Ebensburg Police Department, Portage Police Department and the Paint Township Police Department.
Ukrainian National Who Co-founded Cybercrime<br /> Marketplace Sentenced to 18 Years in PrisonRead the Press Release
One of the world’s most prolific cybercriminals was sentenced today to serve 18 years in prison for his role in co-founding the notorious website CarderPlanet. At the time of his arrest, Vega possessed more than half a million stolen credit card numbers.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Loretta E. Lynch of the Eastern District of New York, and Special Agent in Charge Steven G. Hughes of the U.S. Secret Service’s New York Field Office made the announcement after sentencing by Senior U.S. District Judge Allyne R. Ross of the Eastern District of New York.
Roman Vega, 49, a Ukrainian national, pleaded guilty in 2009 to conspiracies to commit money laundering and access device fraud. According to court documents, Vega – who at various times was also known as “Boa,” “Roman Stepanenko” and “Randy Riolta” – conspired with others to steal large volumes of credit card information through hacking and other sophisticated means, and then sold that stolen information to others, who ultimately used the information to purchase merchandise and services. Vega founded two different online marketplaces for this stolen credit card information.
“Today’s sentence is a significant milestone in our ongoing effort to aggressively target and dismantle global cybercrime organizations that operate from every corner of the world,” said Acting Assistant Attorney General Raman. “Vega helped create one of the largest and most sophisticated credit card fraud sites in the cybercrime underworld – a distinction that has earned him the substantial sentence he received today.”
“The defendant and his group of cybercriminals emulated the mafia in organizing their criminal operations,” said U.S. Attorney Lynch. “Now, the defendant shares the same fate as so many mafia bosses – a long term of imprisonment. This investigation has spanned the globe and should send the unmistakable message that when it comes to dismantling global cybercrime organizations, we will not be held back by distance or complexity.”
“The Secret Service is pleased to have participated in this multi-agency criminal investigation that lead to the arrest of Roman Vega also known as ‘Boa’,” said Secret Service Special Agent in Charge Hughes. “This case demonstrates by constricting this criminal enterprise, there is no such thing as anonymity in the cyber world. The Secret Service continues to seek new and innovative ways to combat emerging cyber threats. Our success in this case and other similar investigations is a result of our close work with our network law enforcement partners.”
In the late 1990s, Vega founded the Boa Factory, one of the earliest websites to provide a forum for sellers of stolen credit card information to meet potential buyers. In the early 2000s, he co-founded and became a high-ranking administrator of a second criminal website, CarderPlanet, which became one of the first and busiest online marketplaces for the sale of stolen financial information, computer hacking services and money laundering.
At its height, CarderPlanet had more than 6,000 members and had a hierarchical leadership structure that borrowed its leadership titles from La Cosa Nostra. For example, CarderPlanet was headed by a “Godfather.” Immediately below the Godfather were a number of “Dons,” including the defendant, who used the name “Boa” when serving in this role. Three levels below the Dons was the “Consigliere,” who was an advisor. Vega, using the name “RioRita,” also served as the Consigliere.
CarderPlanet became a premier online criminal bazaar in significant part as a result of Vega’s leadership. Most notably, the defendant helped institute a quality control system for sales. If a cyberthief wanted to sell stolen credit card information on CarderPlanet, the information was subjected to a vetting process overseen by a manager to ensure that buyers obtained usable stolen data. In addition, the website used e-currencies, such as WebMoney, to provide the participants with security and a layer of anonymity. Vega and his co-conspirators thus created an efficient and trustworthy online marketplace for the buyers and sellers of stolen financial information not unlike legitimate e-commerce sites.
Vega also sold stolen data on the marketplaces he founded and managed. He directed cells of cybercriminals located throughout the globe who hacked into financial institutions to steal credit card and other financial information that would in turn be sold on carding forums, including CarderPlanet. Vega’s criminal career was cut short when he was arrested in Cyprus in February 2003 and extradited to the Northern District of California for prosecution. In November 2007, Vega was transferred to the Eastern District of New York following his indictment on the instant charges, and he pleaded guilty in January 2009. Vega has been incarcerated continuously since 2003.
The case was investigated by the U.S. Secret Service, with assistance from the U.S. Postal Inspection Service. The case was prosecuted by Senior Counsel Thomas Dukes of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney William P. Campos of the Eastern District of New York.Ukrainian National Who Co-Founded Cybercrime Marketplace Sentenced to 18 Years in PrisonRead the Press Release
BROOKLYN, NY – Earlier today, at the federal courthouse in Brooklyn, New York, Roman Vega, one of the world’s most prolific cybercriminals, was sentenced to 18 years in prison. Vega, a Ukrainian national who co-founded the notorious Internet website CarderPlanet, pled guilty in 2009 to conspiracies to commit money laundering and access device fraud. At the time of his arrest, Vega possessed over half a million stolen credit card numbers.
The sentence was announced today by Loretta E. Lynch, the United States Attorney for the Eastern District of New York; Acting Assistant Attorney General Mythili Raman of the Criminal Division of the Department of Justice; and Steven G. Hughes, Special Agent in Charge, United States Secret Service, New York Field Office.
“Roman Vega and his cybercriminal associates emulated the mafia in organizing their criminal operations,” stated United States Attorney Lynch. “Now, he shares the same fate as so many mafia bosses – a long term of imprisonment. This investigation spanned the globe and sends the unmistakable warning that when it comes to dismantling global cybercrime organizations, neither distance nor complexity will deter us and our partners in law enforcement.” Ms. Lynch expressed her grateful appreciation to the United States Postal Inspection Service for its assistance.
“Today’s sentence is a significant milestone in our ongoing effort to aggressively target and dismantle global cybercrime organizations that operate from every corner of the world,” said Acting Assistant Attorney General Raman. “Vega helped create one of the largest and most sophisticated credit card fraud sites in the cybercrime underworld – a distinction that has earned him the substantial sentence he received today.”
“The Secret Service is pleased to have participated in this multi-agency criminal investigation that lead to the arrest of Roman Vega also known as ‘Boa’,” said Secret Service Special Agent in Charge Hughes. “This case demonstrates by constricting this criminal enterprise, there is no such thing as anonymity in the cyber world. The Secret Service continues to seek new and innovative ways to combat emerging cyber threats. Our success in this case and other similar investigations is a result of our close work with our network law enforcement partners.”
Vega, who at various times was also known as “Boa,” “Roman Stepanenko,” “Randy Riolta,” and “RioRita,” formed two online marketplaces for stolen credit card information. In the late 1990s, he founded the Boa Factory, one of the earliest websites on the Internet to provide a forum for buyers and sellers of stolen credit card information. In the early 2000s, he co-founded and became a high-ranking administrator of a second criminal website, CarderPlanet, which became one of the first and busiest online marketplaces for the sale of stolen financial information, computer hacking services, and money laundering.
At its height, CarderPlanet had more than 6,000 members and had a hierarchical leadership structure that borrowed its leadership titles from La Cosa Nostra. For example, CarderPlanet was headed by a “Godfather.” Immediately below the Godfather were a number of “Dons,” including Vega, who used the name “Boa” when serving in this role. Two levels below the Dons was the “Consigliere,” who was an advisor. Vega, using the name “RioRita,” also served as the Consigliere.
CarderPlanet quickly became a premier online criminal bazaar in significant part as a result of Vega’s leadership. Most notably, he helped institute a quality control system for sales. If a cyberthief wanted to sell stolen credit card information on CarderPlanet, the information was subjected to a vetting process overseen by a manager to ensure that buyers obtained usable stolen data. In addition, the website used e-currencies, such as WebMoney, to provide the participants with security and the cloak of anonymity. As a result, Vega and his co-conspirators created an efficient and reliable online marketplace for the buyers and sellers of stolen financial information not unlike legitimate e-commerce sites.
Vega also sold stolen data on the marketplaces he founded and managed. He directed cells of cybercriminals around the globe who hacked into financial institutions to steal credit card and other financial information that would in turn be sold on online marketplaces, including CarderPlanet.
Vega was arrested in Cyprus in February 2003 and extradited to the Northern District of California for prosecution. In November 2007, Vega was transferred to the Eastern District of New York following his indictment on the instant charges. Vega has been incarcerated continuously since 2003.
The sentencing proceeding was held before Senior United States District Judge Allyne R. Ross.
The case was prosecuted by Assistant U.S. Attorney William P. Campos of the Eastern District of New York and Senior Counsel Thomas Dukes of the Criminal Division’s Computer Crime & Intellectual Property Section.
The Defendant:
ROMAN VEGA
Age: 49
UkraineE.D.N.Y. Docket No. CR-07-707 (ARR)
Two Patient Recruiters for Miami Home Health Companies<br /> Sentenced for Roles in $48 Million Health Care Fraud SchemeRead the Press Release
WASHINGTON - Two patient recruiters for Miami health care companies were sentenced today for their participation in a $48 million home health Medicare fraud scheme.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Special Agent in Charge Michael B. Steinbach of the FBI’s Miami Field Office, and Special Agent in Charge Christopher B. Dennis of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Office of Investigations Miami Office made the announcement after sentencing by U.S. District Judge Joan A. Lenard in the Southern District of Florida.
Elizabeth Monteagudo, 33, of Miami, was sentenced to serve 70 months in prison, followed by three years of supervised release, and ordered to pay $3.5 million in restitution jointly and severally with co-defendants. Cristobal Gonzalez, 39, of Miami, was sentenced to serve 46 months in prison, followed by two years of supervised release, and ordered to pay $2 million in restitution jointly and severally with co-defendants.
In September 2013, Monteagudo and Gonzalez each pleaded guilty to one count of conspiring to receive health care kickbacks. Monteagudo also pleaded guilty to receiving kickbacks in connection with a federal health care program.
According to court documents, Monteagudo and Gonzalez were patient recruiters who worked for Caring Nurse Home Health Care Corp., and Gonzalez also worked for Good Quality Home Health Care Inc. Caring Nurse and Good Quality were Miami home health care agencies that purported to provide home health and therapy services to Medicare beneficiaries.
According to court documents, from approximately January 2009 through approximately June 2011, Monteagudo and Gonzalez would recruit patients for Caring Nurse and/or Good Quality and would solicit and receive kickbacks and bribes from the owners and operators of Caring Nurse and/or Good Quality in return for allowing the agency to bill the Medicare program on behalf of the recruited patients. These Medicare beneficiaries were billed for home health care and therapy services that were medically unnecessary and/or not provided.
Monteagudo also admitted to her involvement with $7 million in fraudulent billings for Starlite Home Health Agency Inc., which she owned and operated.
In a related case, on Feb. 27, 2013, Rogelio Rodriguez and Raymond Aday, the owners and operators of Caring Nurse and Good Quality, were sentenced to serve 108 and 51 months in prison, respectively. Their sentencings followed their December 2012 guilty pleas each to one count of conspiring to commit health care fraud charged in an October 2012 indictment. According to that indictment, from approximately January 2006 through June 2011, Caring Nurse and Good Quality submitted approximately $48 million in claims for home health services that were not medically necessary and/or not provided. Medicare actually paid approximately $33 million for these fraudulent claims.
The case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida. This case is being prosecuted by Assistant Chief Joseph S. Beemsterboer of the Criminal Division’s Fraud Section.
Since their inception in March 2007, Medicare Fraud Strike Force operations in nine locations have charged more than 1,700 defendants who collectively have falsely billed the Medicare program for more than $5.5 billion. In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov .Two Patient Recruiters for Miami Home Health Companies Sentenced for Roles in $48 Million Health Care Fraud SchemeRead the Press Release
Two patient recruiters for Miami health care companies were sentenced today for their participation in a $48 million home health Medicare fraud scheme.
U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, Special Agent in Charge Michael B. Steinbach of the FBI’s Miami Field Office, and Special Agent in Charge Christopher B. Dennis of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Office of Investigations Miami Office made the announcement after sentencing by U.S. District Judge Joan A. Lenard in the Southern District of Florida.
Elizabeth Monteagudo, 33, of Miami, was sentenced to serve 70 months in prison, followed by three years of supervised release, and ordered to pay $3.5 million in restitution jointly and severally with co-defendants. Cristobal Gonzalez, 39, of Miami, was sentenced to serve 46 months in prison, followed by two years of supervised release, and ordered to pay $2 million in restitution jointly and severally with co-defendants
In September 2013, Monteagudo and Gonzalez each pleaded guilty to one count of conspiring to receive health care kickbacks. Monteagudo also pleaded guilty to receiving kickbacks in connection with a federal health care program.
According to court documents, Monteagudo and Gonzalez were patient recruiters who worked for Caring Nurse Home Health Care Corp., and Gonzalez also worked for Good Quality Home Health Care Inc. Caring Nurse and Good Quality were Miami home health care agencies that purported to provide home health and therapy services to Medicare beneficiaries.
According to court documents, from approximately January 2009 through approximately June 2011, Monteagudo and Gonzalez would recruit patients for Caring Nurse and/or Good Quality and would solicit and receive kickbacks and bribes from the owners and operators of Caring Nurse and/or Good Quality in return for allowing the agency to bill the Medicare program on behalf of the recruited patients. These Medicare beneficiaries were billed for home health care and therapy services that were medically unnecessary and/or not provided.
Monteagudo also admitted to her involvement with $7 million in fraudulent billings for Starlite Home Health Agency Inc., which she owned and operated.
In a related case, on Feb. 27, 2013, Rogelio Rodriguez and Raymond Aday, the owners and operators of Caring Nurse and Good Quality, were sentenced to serve 108 and 51 months in prison, respectively. Their sentencings followed their December 2012 guilty pleas each to one count of conspiring to commit health care fraud charged in an October 2012 indictment. According to that indictment, from approximately January 2006 through June 2011, Caring Nurse and Good Quality submitted approximately $48 million in claims for home health services that were not medically necessary and/or not provided. Medicare actually paid approximately $33 million for these fraudulent claims.
The case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida. This case is being prosecuted by Assistant Chief Joseph S. Beemsterboer of the Criminal Division’s Fraud Section.
Since their inception in March 2007, Medicare Fraud Strike Force operations in nine locations have charged more than 1,700 defendants who collectively have falsely billed the Medicare program for more than $5.5 billion. In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Two Men Sentenced to Prison Terms for 2012 Shooting in Northwest Washington-Bullets Fired into A Block Crowded with Adults and Children-Read the Press Release
WASHINGTON – Carlito Bailey and Rickey Watkins, both 22 and from Washington D.C., were sentenced today to more than a decade in prison on charges stemming from a shooting last year in Northwest Washington, U.S. Attorney Ronald C. Machen Jr. announced.
Bailey and Watkins were found guilty by a jury in October 2013, following a trial in the Superior Court of the District of Columbia, of aggravated assault, assault with a dangerous weapon, and related firearms offenses. The Honorable Robert I. Richter sentenced Bailey to a prison term of 16 ½ years and sentenced Watkins to 11 years and nine months of incarceration.
According to the government’s evidence, on the night of May 5, 2012, Bailey, Watkins, and a third unidentified shooter traveled to Northwest Washington armed with firearms. The three men approached the intersection of Johnson Avenue and R Street NW, where they opened fire, shooting at least ten bullets into a block crowded with adults and children gathered to celebrate a birthday party. One of the adults was shot several times in the legs. After firing the shots, the men fled on Johnson Avenue.
Bailey and Watkins were apprehended approximately 24 minutes after the shooting in a car with two firearms. One of the firearms was a ballistics match to six shell casings and a bullet from the crime scene, and a swab from the slide of that weapon yielded DNA that matched the DNA profile of Bailey. Cell site data placed Watkins at the scene of the shooting.
In announcing the sentences, U.S. Attorney Machen praised the work of the Metropolitan Police Department Second District officers who apprehended the defendants and recovered the key evidence shortly after the shooting, as well as the Third District detectives who investigated the case. He also expressed appreciation to FBI Special Agent Kevin Horan for his valuable work analyzing cell phone records and testifying as a government expert at trial.
In addition, U.S. Attorney Machen commended those who handled the case for the U.S. Attorney’s Office, including Litigation Technology Specialists Joe Calvarese, Kimberly Smith and Ron Royal and Paralegal Specialists Allison Daniels and Mia Beamon. Finally, he acknowledged the efforts of Assistant U.S. Attorney Ephraim (Fry) Wernick and former Assistant U.S. Attorney Mary Chris Dobbie, who indicted the case, and Assistant U.S. Attorneys Ann Carroll and Jonathan Kravis, who prosecuted the case.
13-417Two Indicted for Stolen Treasury ChecksRead the Press Release
Michael J. Moore, United States Attorney for the Middle District of Georgia, announces that Jatin Patel, 42, and Donna Evans Moore, a/k/a Donna Evans Furguson, 38, both from Tifton, Georgia, were indicted by a Federal Grand Jury sitting in Macon, Georgia on December 10, 2013, for Conspiracy to Possess Stolen U.S. Treasury Checks, Passing Forged Securities and Embezzling Public Monies (Count One); Embezzling Government Property (Counts Two-Seven) and Aggravated Identity Theft (Counts Eight-Thirteen). A copy of the indictment is attached. The two were both arrested on December 11, 2013, and were arraigned in in federal court in Albany on that day.If convicted, the defendants face the following penalties: Count One, up to 5 years imprisonment and a $250,000 fine; Counts Two-Seven, up to 10 years imprisonment and a $250,000 fine; Counts Eight-Thirteen, 2 years imprisonment consecutive to any other penalty and a $250,000 fine.
Atlanta SAIC Reginald Moore, said, “ The U.S. Secret Service, along with its local law enforcement partners, will continue to vigorously investigate the negotiation of U.S. Treasury checks generated from Identity Theft.”
An indictment is only an accusation, and each defendant is presumed innocent until proven guilty beyond a reasonable doubt at trial.
The case was investigated by the United States Secret Service and the Tift County Sheriff’s Office. The case is being prosecuted by Assistant United States Attorney Robert D. McCullers.For additional information please contact Pamela Lightsey, Public Information Officer, United States Attorney’s Office at (478) 621-2603.
Two Chicago Real Estate Executives Indicted on Federal Fraud Charges Involving City Tif Notes and Bank LoansRead the Press Release
CHICAGO — Two executives of a prominent Chicago real estate development company were indicted today on federal fraud charges alleging that they lied about and concealed unpaid property taxes, the double-pledging of public financing notes issued by the City of Chicago, and the company’s default on those notes so they could secure credit extensions and payments from the city at a time when they knew their firm was having serious financial difficulties. The defendants, LAURANCE H. FREED, and CAROLINE WALTERS, are, respectively, the president and vice president/treasurer of Joseph Freed and Associates LLC (JFA), best known for its role in the development of Block 37 in Chicago’s Loop.
The charges involve, in part, two Tax Increment Financing (TIF) notes that the City of Chicago agreed to issue in November 2002 to finance redevelopment of the former Goldblatt’s department store in the 4700 block of North Broadway in the city’s Uptown neighborhood. Freed was manager of a limited liability company, formed by JFA, called Uptown Goldblatts Venture LLC, which received a $4.3 million TIF redevelopment area note and a $2.4 million TIF project note from the city to help finance the project.
Freed, 51, of Chicago, and Walters, 53, of Palatine, were each charged with seven counts of bank fraud, one count of mail fraud, and five counts of making false statements to banks in a 14-count indictment returned today by a federal grand jury. The indictment also seeks forfeiture of $2,995,295 in alleged fraud proceeds from both defendants, who will be arraigned at a later date in U.S. District Court.
The indictment alleges three victims: the City of Chicago, Cole Taylor Bank, and a consortium of banks consisting of Bank of America (as successor to the former LaSalle Bank National Association), Associated Bank, Northern Trust, and Wachovia Bank.
According to the indictment, between March 2008 and February 2011 ― when JFA was in the midst of a severe liquidity crisis that jeopardized its ability to pay operating expenses and Freed and Walters knew the possibility that JFA’s inability to make required payments threatened the company’s future ― both defendants made false statements to the city and the banks to obtain funds. Freed and Walters allegedly made false statements:
- to the bank consortium to prevent default on a $105 million line of credit and to obtain a loan modification that would have provided JFA with at least $10 million in additional funds;
- to Cole Taylor Bank regarding the defendants’ intent to persuade the bank consortium to release its claim on the TIF notes as collateral; and
- to the City of Chicago to obtain nearly $1.75 million in payments from the TIF notes, knowing that the bank consortium and Cole Taylor were entitled to those payments.
As background, the indictment details various financial agreements involving JFA and its related entities, including:
- Uptown Goldblatts’ November 2002 TIF agreement with the city contained several conditions guaranteeing that Uptown Goldblatts would not default on its obligations, and, if the conditions were violated, the city would not be obligated to make TIF payments. The city began paying annual principal and interest on the notes after receiving an annual sworn statement from JFA certifying that it was in compliance with the conditions;
- Also in November 2002, Freed, on behalf of Uptown Goldblatts, entered into an agreement with Cole Taylor Bank for a $15 million loan in exchange for Uptown Goldblatts’ assignment to the bank of its rights in the TIF project note. Uptown Goldblatts would receive the annual proceeds from the note so long as it was not in default to the bank, but if it was in default, the bank would be entitled to the proceeds. The loan agreement also forbid Uptown Goldblatts from pledging the TIF note as collateral for any other loan and specified that doing so would constitute default to Cole Taylor Bank. The loan amount was later reduced from $15 million to $9 million; and
- In May 2006, a JFA associated entity, DDL LLC and Freed Illinois Holdings LLC, entered into agreements with the bank consortium, now led by Bank of America, for a revolving line of credit up to $150 million. In exchange, Freed’s entities pledged properties known as Evanston Plaza and West Town Center as collateral, and Freed personally guaranteed the loan for up to $50 million. In November 2007, Uptown Goldblatts entered into a security agreement with the bank consortium, pledging both TIF notes and their proceeds as collateral for the line of credit. Uptown Goldblatts warranted that the notes were free of any other outside interests, despite knowing that the project note had been previously pledged to Cole Taylor. The security agreement, signed by Freed, further provided that Uptown Goldblatts would direct all payments from the TIF notes to a Bank of America lockbox.
Freed and Walters allegedly made false statements to the bank consortium and Cole Taylor Bank about the collateral, as well as to the city about default and misappropriation of the TIF funds. These included concealing from the bank consortium Uptown Goldblatts’ prior pledge of the project note to Cole Taylor Bank, and making false statements and omissions to the consortium while trying to obtain a loan modification of at least $10 million and to prevent default on a $105 million line of credit. Between December 2008 and July 2009, Freed and Walters made four presentations to the bank consortium, allegedly knowing they contained multiple false statements and that Cole Taylor Bank had a superior interest in the TIF project note. Both defendants also made false statements about the Evanston Plaza and West Town Center developments, including concealing that JFA owed unpaid property taxes in April 2009 of at least $1.325 million on Evanston Plaza and at least $590,000 on West Town Center, the indictment alleges.
In December 2008, 2009, and 2010, Freed signed allegedly false affidavits to obtain TIF payments from the city, knowing instead that the bank consortium and Cole Taylor Bank were entitled to the payments. The indictment alleges he also falsely swore that no default condition existed, despite knowing that the double pledge of the project note as collateral to Cole Taylor Bank and the bank consortium had triggered Uptown Goldblatts’ default to the city. Further, Freed and Walters allegedly took steps to ensure that the TIF payments would be delivered directly to JFA and bypass the lockbox to prevent Bank of America from keeping the payments.
Each count of the indictment carries a maximum penalty of 30 years in prison and a $1 million fine, and restitution is mandatory. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; and Joseph Ferguson, Inspector General for the City of Chicago.
The government is being represented by Assistant U.S. Attorney Renato Mariotti.
An indictment contains merely charges and is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Indictment
Two Agricultural Scientists from ChinaCharged with Stealing Trade SecretsRead the Press Release
KANSAS CITY, KAN. – Two agricultural scientists from China have been charged with trying to steal samples of a variety of seeds from a biopharmaceutical company’s research facility in Kansas, U.S. Attorney Barry Grissom said today.
Weiqiang Zhang, 47, Manhattan, Kan., and Wengui Yan, 63, Stuttgart, Ark., are charged with one count of conspiracy to steal trade secrets. The victim in the case – identified in court records as Company A -- has invested approximately $75 million in patented technology used to create a variety of seeds containing recombinant proteins. The company has an extensive intellectual property portfolio of more than 100 issued and pending patents and exclusive licenses to issued patents.
Zhang and Yan are charged in a criminal complaint filed in U.S. District Court in Kansas City, Kan. An affidavit in support of the complaint alleges that on Aug. 7, 2013, agents of U.S. Customs and Border Protection found stolen seeds in the luggage of a group of visitors from China preparing to board a plane to return home. While in the United States, the group had visited various agricultural facilities and universities in the Midwest, as well as the Dale Bumpers National Rice Research Center in Stuttgart, Ark.
According to the complaint:
- Zhang and Yan, both natives of the People’s Republic of China living lawfully in the United States, arranged for the Chinese delegation to visit the United States in 2013. Previously, the two had traveled to China at the same time in 2012 to visit a Crops Research Institute. Some of the people they met in China were members of the Chinese delegation that visited the United States in 2013.
- Zhang, worked as an agricultural seed breeder for Company A since 2008.
- Stolen seeds were delivered to members of the Chinese delegation during the delegation’s visit to the United States July 16 through August 7, 2013.
- Yan, who worked for the U.S. Department of Agriculture as a rice geneticist at the Dale Bumpers National Rice Research Center, picked up the Chinese delegation from a motel in Stuttgart, Ark., on July 22, 2013, and took them to the center.
- Seeds similar to what were found in the delegation’s possession as they left the United States in August 2013, were also found in Zhang’s residence on December 11, 2013.
If convicted, Zhang and Yan face a maximum penalty of 10 years in federal prison and a fine up to $250,000. The Little Rock Field Office of the Federal Bureau of Investigation, the Kansas City Field Office of the Federal Bureau of Investigation and U.S. Customs and Border Protection investigated. Assistant U.S. Attorney Scott Rask is prosecuting with assistance from the U.S. Attorney’s Office in the Eastern District of Arkansas.
In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.
Twenty-Four Plead Guilty to Trafficking Drugs in Dona Ana CountyRead the Press Release
ALBUQUERQUE – Javier Castruita, 45, of Anthony, N.M., entered a guilty plea yesterday to cocaine trafficking charges in federal court in Las Cruces, N.M. His guilty plea resolves the last remaining case charged as a result of a multi-agency investigation that culminated in the filing of drug trafficking charges against 28 residents from Doña Ana County, N.M., and El Paso County, Texas, last spring.
Castruita and 27 others were charged in 12 criminal complaints with distributing cocaine, heroin, methamphetamine and marijuana in and around southern Doña Ana County. The criminal complaints were unsealed on May 8, 2013, following a multi-agency arrest operation resulting in the arrests of 22 defendants. Five others subsequently were arrested, leaving one fugitive.
The charges against the defendants were the result of an intensive four-month multi-agency investigation led by the FBI’s Las Cruces Cross-Border Drug Violence Hybrid Squad and Southern New Mexico Gang Task Force that targeted known drug dealers in southern Doña Ana County. The U.S. Border Patrol and the Las Cruces- Doña Ana County Metro Narcotics Agency, which is comprised of officers from the New Mexico State Police, the Doña Ana County Sheriff’s Office and the Las Cruces Police Department, participated in the investigation. During the course of the investigation, officers oversaw approximately 40 covert drug buys and the purchase of five firearms from the defendants.
The investigation was designated as part of the Organized Crime Drug Enforcement Task Force (OCDETF) program, a nationwide Department of Justice program that combines the resources and unique expertise of federal agencies, along with their local counterparts, in a coordinated effort to disrupt and dismantle major drug trafficking organizations.
Yesterday’s guilty plea was the 24th guilty plea entered by defendants arrested as a result of the investigation. The charges against one of the remaining three defendants were dismissed in support of his prosecution on more significant methamphetamine trafficking charges in the Western District of Texas. Charges against the other two were dismissed with leave to refile.
The cases were investigated by the FBI’s Las Cruces Cross-Border Drug Violence Hybrid Squad, the Las Cruces- Doña Ana County Metro Narcotics Agency, the U.S. Border Patrol and the Dona Doña County Sheriff’s Office. They are being prosecuted by Assistant U.S. Attorneys Shaheen P. Torgoley and Sarah M. Davenport of the U.S. Attorney’s Las Cruces Branch Office.
CASE SUMMARIES
Castruita and his two co-defendants Gloria Portillo Valdivia, 51, and Carlos Alberto Valdivia, 56, both of Anthony, N.M., were charged with cocaine trafficking offenses. Portillo Valdivia pled guilty on Sept. 12, 2013, and was sentenced on Dec. 4, 2013 to ten months in prison followed by three years of supervised release. Valdivia pled guilty on Oct. 4, 2013, under a plea agreement that requires the imposition of an 84-month prison sentence. Castruita, who pled guilty this morning, faces a maximum penalty of 20 years in prison at sentencing.
Abel Romero, 29, of Anthony, N.M., Victor Cano, 30, of Anthony, N.M., and Jaime Cano, 30, of Canutillo, Texas, were charged with cocaine and marijuana trafficking offenses. Romero also was charged with being a felon in possession of a firearm. Victor Cano pled guilty on Nov. 7, 2013, under a plea agreement that requires the imposition of a sentence in the range of 30 to 37 months in prison. Jaime Cano also pled guilty on Nov. 7, 2013, under a plea agreement that requires the imposition of a sentence in the range of 40 to 60 months in prison. On Dec. 5, 2013, Romero pled guilty under a plea agreement that requires the imposition of a 131 month prison sentence.
Noe Perez-Rodriguez, 46, of Berino, N.M., and Larry Valles, Sr., 50, of Los Lunas, N.M., each pled guilty on Sept. 12, 2013, to methamphetamine trafficking charges. At sentencing, each faces a sentence of not less than five years and not more than 40 years in prison.
Rudy Portillo, 54, and Isaiah Portillo, 20, both of Anthony, N.M., and Victor Leos, 53, of Anthony, Texas, were charged with heroin trafficking offenses. Isaiah Portillo and Leos entered guilty pleas on Oct. 11, 2013 and Oct. 24, 2013, respectively, and Rudy Portillo pled guilty on Dec. 5, 2013. At sentencing, Rudy Portillo and Leos each faces a sentence of not less than five years and not more than 40 years in prison, and Isaiah Portillo faces a maximum penalty of 20 years in prison.
Victor Alvarez, 43, of Las Cruces, N.M., and Benjamin Ochoa, 31, of Las Cruces, N.M., pled guilty to cocaine trafficking charges on Oct. 31, 2013 and Nov. 7, 2013, respectively. Each faces a maximum penalty of 20 years in prison at sentencing.
Daniel Arrieta, 38, of Anthony, N.M., pled guilty to a heroin trafficking charge on Dec. 5, 2013, and faces a maximum penalty of 20 years in prison at sentencing.
Michael Vega, 26, and Raul Martinez, 25, both of Anthony, N.M., were charged with cocaine trafficking offenses. Vega pled guilty on Nov. 21, 2013, and faces a maximum penalty of 20 years in prison at sentencing. The charges against Martinez were dismissed without prejudice on Nov. 26, 2013.
John Eric Sapien, 25, of Anthony, N.M., pled guilty to a cocaine trafficking charge on Sept. 20, 2013, and faces a maximum penalty of 20 years in prison at sentencing.
Jose Salcido, 51, of Anthony, N.M., pled guilty to a cocaine trafficking charge, and faces a maximum penalty of 20 years in prison at sentencing. The charges against his co-defendant Gerardo Garcia, 63, who was the sole fugitive, were dismissed following his deportation to Mexico.
Joey Martinez, 29, and Eloy Rios-Montoya, 40, both of Anthony, Texas, pled guilty to cocaine trafficking charges on Sept. 5, 2013 and Sept. 20, 2013, respectively. Each faces a maximum penalty of 20 years in prison at sentencing.
Freddy Sanchez-Ramirez, 56, of Anthony, N.M., and Roberto Andres Urquidi, 34, of Canutillo, Texas, pled guilty to heroin trafficking charges on Sept. 20, 2013 and Nov. 7, 2013, respectively. Each faces a maximum penalty of 20 years in prison at sentencing.
Jesus M. Baeza-Lascano, 44, of Anthony, N.M., pled guilty to a cocaine trafficking charge on July 23, 2013, and was sentenced to ten months in prison on Oc. 22, 2013. Baeza-Lascano, a Mexican national, will be deported after he completes his prison sentence. The charges against his co-defendant Martin Nevarez, 49, of Anthony, N.M., were dismissed.
Jose Alvarez, 27, of Anthony, N.M., and Angel Herrera, 31, of Berino, N.M., each pled guilty on Sept. 12, 2013, to a felony information charging them with a heroin trafficking conspiracy. Each was sentenced to time-served and two years of supervised release.
Treasure Coast Robbers That Targeted Gas Stations and Hotels IndictedRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Hugo Barrera, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Miami Field Office, Julie Leon, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Tampa/Orlando Field Office, Deryl Loar, Sheriff, Indian River County Sheriff’s Office, Wayne Ivey, Sheriff, Brevard County Sheriff’s Office, John A. Bolduc, Chief, Port St. Lucie Police Department, and Frank J. Kitzerow, Chief, Jupiter Police Department, announce that defendants Yubran Alvarez Vasquez, 21, of Bluffton, South Carolina, and Matthew Emmanuel Vasquez, 23, of Savannah, Georgia, were indicted by a federal grand jury in Fort Pierce, on one count of conspiracy to commit armed robbery, in violation of Title 18, United States Code, Section 1951(a), four counts of armed robbery, in violation of Title 18, United States Code, Section 1951(a), and four counts of possessing, brandishing, and discharging a firearm in furtherance of a crime of violence, in violation of Title 18, United States Code, Section 924(c)(1)(A)(ii & iii).
The defendants are alleged to have targeted gas stations and hotels just off exits on I-95 from Melbourne to Jupiter. In one robbery spree on February 14-15, 2013, the defendants are alleged to have robbed at gunpoint two gas stations and two hotels. The defendants brandished guns in all of the robberies and during the robbery of the Holiday Inn Express in Vero Beach, a firearm was discharged. The defendants wore gloves and masks and changed hotels frequently in an attempt to avoid detection.
The defendants fled Florida with the stolen property, and due to a multi-agency effort, the defendants were apprehended. If convicted, each defendant faces up to life in prison.
Mr. Ferrer commended the investigative efforts of ATF, the Indian River County Sheriff’s Office, the Brevard County Sheriff’s Office, the Port St. Lucie Police Department, and the Jupiter Police Department. The case is being prosecuted by Assistant U.S. Attorney Russell R. Killinger.
An indictment is only an accusation, and the defendant is presumed innocent until proven guilty.
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.
Three Buffalo Men Charged in Seperate Bank RobberiesRead the Press Release
BUFFALO, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that Michael Tynes, 53, Michael Bland, 18, and Demetrian Bell-Bradley, 22, all of Buffalo, N.Y., were charged in separate indictments with bank robbery. The charge carries a maximum penalty of 20 years in prison, a $250,000,00 fine or both.
Assistant U.S. Attorney Melissa Marangola, who is handling the case, stated that Bland is accused of robbing three M&T Banks located at 1300 Jefferson Avenue in Buffalo, 750 Main Street in Niagara Falls, and 1877 Main Street in Buffalo, between August 21, 2013 and September 4, 2013. Tynes is accused of robbing the M&T Bank located at 1300 Jefferson Avenue in Buffalo on September 11, 2013. Bell-Bradley is accused of robbing the Key Bank located at 306 West Ferry Street in Buffalo on November 6, 2013. The three defendants used notes threatening the use of weapons in all of the bank robberies.
The indictments are the culmination of an investigation on the part of the Federal Bureau of Investigation, under the direction of Special Agent in Charge Brian P. Boetig, the Buffalo Police Department, of under the direction of Commissioner Daniel Derenda, and the Niagara Falls Police Department, under the direction of Chief Bryan DalPorto.Therapist Pleads Guilty in Miami for His Role <br /> in $63 Million Health Care Fraud SchemeRead the Press Release
A former licensed mental health counselor at the defunct health provider Health Care Solutions Network Inc. (HCSN) pleaded guilty today in Fort Lauderdale, Fla., for his role in a $63 million health care fraud scheme.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Special Agent in Charge Michael B. Steinbach of the FBI’s Miami Field Office; and Special Agent in Charge Christopher B. Dennis of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Office of Investigations Miami Office made the announcement.
Ruben Busquets, 50, of Miami, pleaded guilty before U.S. District Judge William J. Zloch in the Southern District of Florida to one count of conspiracy to commit health care fraud. He faces a maximum penalty of 10 years in prison when he is sentenced on Feb. 20, 2014.
According to court records, Busquets was employed as a licensed therapist at HCSN, a mental health facility that purported to provide Partial Hospitalization Program (PHP) services. A PHP is a form of intensive treatment for severe mental illness. HCSN of Florida (HCSN-FL) operated community mental health centers at two locations. Court records indicate that Busquets was aware that HCSN-FL personnel were routinely fabricating patient medical records. Many of these medical records were created weeks or months after the patients were admitted to HCSN-FL for purported PHP treatment and were utilized to support false and fraudulent billing to government sponsored health care benefit programs, including Medicare and Florida Medicaid. During his employment at HCSN-FL, Busquets and his co-conspirators signed fabricated PHP therapy notes and other medical records used to support false claims to government-sponsored health care programs.
According to court documents, from 2004 through 2011, HCSN billed Medicare and the Florida Medicaid program approximately $63 million for purported mental health services.
This case is being investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida. This case was prosecuted by Trial Attorney Allan J. Medina of the Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,700 defendants who have collectively billed the Medicare program for more than $5.5 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov .Therapist Pleads Guilty in Miami for His Role in $63 Million Health Care Fraud SchemeRead the Press Release
A former licensed mental health counselor at the defunct health provider Health Care Solutions Network Inc. (HCSN) pleaded guilty today in Fort Lauderdale, Fla., for his role in a $63 million health care fraud scheme.
U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, Special Agent in Charge Michael B. Steinbach of the FBI’s Miami Field Office; and Special Agent in Charge Christopher B. Dennis of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Office of Investigations Miami Office made the announcement.
Ruben Busquets, 50, of Miami, pleaded guilty before U.S. District Judge William J. Zloch in the Southern District of Florida to one count of conspiracy to commit health care fraud. He faces a maximum penalty of 10 years in prison when he is sentenced on Feb. 20, 2014.
According to court records, Busquets was employed as a licensed therapist at HCSN, a mental health facility that purported to provide Partial Hospitalization Program (PHP) services. A PHP is a form of intensive treatment for severe mental illness. HCSN of Florida (HCSN-FL) operated community mental health centers at two locations. Court records indicate that Busquets was aware that HCSN-FL personnel were routinely fabricating patient medical records. Many of these medical records were created weeks or months after the patients were admitted to HCSN-FL for purported PHP treatment and were utilized to support false and fraudulent billing to government sponsored health care benefit programs, including Medicare and Florida Medicaid. During his employment at HCSN-FL, Busquets and his co-conspirators signed fabricated PHP therapy notes and other medical records used to support false claims to government-sponsored health care programs.
According to court documents, from 2004 through 2011, HCSN billed Medicare and the Florida Medicaid program approximately $63 million for purported mental health services.
This case is being investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida. This case was prosecuted by Trial Attorney Allan J. Medina of the Fraud Section.
Since their inception in March 2007, Medicare Fraud Strike Force operations in nine locations have charged more than 1,700 defendants who collectively have falsely billed the Medicare program for more than $5.5 billion. In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
The Owners of Ohio Head Shops Among Five Indicted for Distribution of Synthetic Cannabinoids Sold as Spice or K2Read the Press Release
The owners of a chain of head shops were among five people indicted for conspiracy to distribute synthetic cannabinoids for their sale of products with names such as spice and K2, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
Indicted are: Sean Lightner and Sherry Lightner, both 38 and both of Grafton; Dale Drummond, 39, of Cleveland; Mark Picard, 32, of Whittier, Calif. and Nathan Albright, 28, of Glendale, Arizona.
“These defendants sold a product that was designed to mimic an illegal drug,” Dettelbach said. “No matter what it was labeled or whatever clever name it was given, it was illegal.”
Synthetic cannabinoids are a large family of chemically unrelated structures functionally similar to THC. Synthetic cannabinoids may contain Schedule I controlled substances or controlled substance analogues and have purported physchotropic effects when smoked or ingested.
The Lightners operated a chain of head shops (retail stores specializing in drug and smoking paraphernalia) doing business as Twilight Boutique, where they sold synthetic cannabinoids along with accessories such as bongs, pipes and rolling papers, according to the indictment.
They franchised the Twilight Boutique on Madison Avenue in Lakewood to Dale Drummond for a percentage of the store’s monthly revenue. Drummond also sold synthetic cannabinoids from the store, according to the indictment.
The Lightners expanded their business to include several locations in Ohio after they began selling synthetic cannabinoids. They control Twilight Corp., located on Royalton Road in Grafton, and the Twilight Boutique stores located on State Route 43 in Streetsboro, Cleveland Road West in Sandusky, Pearl Road in Brunswick, North Abbe Road in Elyria, Lorain Road in Fairview Park, Whipple Avenue in Plain Township, North Court Street in Athens, Midway Plaza in Tallmadge, South Alex Road in West Carrollton, West Fourth Street in Ontario and Clinton Plaza Drive in Oneonta, N.Y., according to the indictment.
The Lightners presented laboratory reports to others, including employees, alleging that the synthetic cannabinoids sold in the Twilight Boutique stores did not contain controlled substances or controlled substance analogues in an effort to give the appearance that the synthetic cannabinoids were legal when the Lightners knew they were illegal, according to the indictment.
Albright sold synthetic cannabinoids through his company, Desert Distribution, LLC and Albright and Picard sold synthetic cannabinoids through their company, Royal Dutch, LLC.
Prosecutors are also seeking to forfeit more than $225,000 in cash seized, as well as three vehicles and property in Grafton, according to the indictment.
This case is being prosecuted by Assistant United States Attorney Teresa Dirksen following an investigation by the Drug Enforcement Administration Drug Enforcement Administration—Tactical Diversion Squad, Internal Revenue Service -- Criminal Investigations, Lorain County Drug Task Force, Medina County Drug Task Force, Portage County Drug Task Force, Westshore Enforcement Bureau, MEDWAY Drug Enforcement Agency, METRICH Enforcement Unit, Cuyahoga County Sheriff’s Office, Linndale Police Department, Lakewood Police Department, Cleveland Police Department, Ontario Police Department, Sandusky Police Department, Ohio HIDTA and the Ohio State Patrol.
If convicted, the defendants’ sentences will be determined by the court after consideration of the Federal Sentencing Guidelines which depend upon a number of factors unique to each case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the unique characteristics of the violation. In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
An indictment is only a charge. The defendants are innocent until proven guilty beyond a reasonable doubt.
Tax Return Preparer Convicted of Fraud and Identity Theft In$19 Million SchemeRead the Press Release
ATLANTA – A federal jury today found Bernando O. Davis guilty of conspiracy, wire fraud, and aggravated identity theft for using stolen identities to file false federal income tax returns that claimed millions of dollars in bogus refunds.
“Almost every day we learn of another identity thief who has found a unique way to steal personal identifying information. The common theme is that the thieves always use the information they steal to commit a second theft: the theft of money,” said United States Attorney Sally Quillian Yates. “Today, a federal jury brought this defendant’s identity theft scheme to an end.”
“These unscrupulous defendants thought they had figured out a clever scheme to thwart the IRS and steal from American taxpayers,” said IRS Criminal Investigation, Special Agent in Charge, Veronica F. Hyman-Pillot. “Today’s verdict clearly demonstrates that taking advantage, manipulating, and stealing from the American people will not go unpunished.”
“This case is just another prime example that demonstrates the hard work and collaborative law enforcement effort to fight against perpetrators committing fraudulent acts against the American public. The U.S. Postal Inspection Service will continue to aggressively investigate all crimes where illegal use of the U.S. mail is used to further fraudulent schemes." said Keith Fixel, Postal Inspector in Charge, U.S. Postal Inspection Service - Charlotte Division.”
According to United States Attorney Yates, the charges and other information presented in court: From approximately July 2010 to January 2013, Davis operated “Davis Tax Service,” a tax preparation business in Clayton County, Ga. Davis, working with others, including Kevin J. Sonnier, and Carla L. Jefferson of Palmdale, Ca., led thousands of victims to believe that they could apply for “government stimulus payments” or “free government money” from the federal government by providing their names and Social Security numbers. Davis and his co-conspirators used toll-free telephone numbers, web sites, flyers, and radio advertisements to advertise the “stimulus payments” and collect victims’ personal information. They also recruited “runners” who promoted the scheme by word of mouth and collected victims’ personal information. In addition to the “stimulus” charade, Davis and his co-conspirators acquired names from a variety of sources, including prisons and homeless shelters, to use in the fraud. Many victims testified that they had never heard about the “stimulus payments,” but their identities were nonetheless used by Davis and his co-conspirators to file bogus tax returns.
In actuality, no stimulus payment existed, and Davis and his co-conspirators used the victims’ personal information to file fraudulent tax returns that claimed a total of over $19 million in bogus refunds. On the returns, Davis claimed false income amounts and student credits to generate the bogus tax refunds. In many of the returns, Davis directed the IRS to pay the refund amounts to bank accounts he or his co-conspirators controlled. Davis and his co-conspirators shared in the profits generated from this scheme. The victims did not know that Davis had filed tax returns in their names.
The evidence at trial showed that Davis had over 1,600 tax refund checks sent to his home address in Stockbridge, Ga., by listing his home address as the victims’ address on the tax returns he filed in their names. In addition to the checks, Davis received thousands of letters addressed to the victims from the IRS, Social Security Administration, and other government agencies. After seeing such a large number of Treasury checks coming to Davis’ home address, a mail carrier seized over 1,000 of these checks and provided them to law enforcement.
Federal agencies executed a search warrant at Davis’ and Sonnier’s business location in February 2013. There they found numerous lists of names, Social Security numbers, and birth dates of victims which were used to file tax returns. They also found tax forms with victims’ signatures taped onto the forms to make it look like the victims had authorized the tax returns. In reality, Davis and his co-conspirators had cut the signatures from the “stimulus” applications and taped them to the tax forms to make their business appear legitimate if anyone asked any questions. When agents first entered the business to execute the search, Davis fled out of the back of the building and was arrested with the assistance of Clayton County law enforcement.
Davis also faxed a fraudulent Georgia driver’s license and tax forms to a Texas detective in 2012, when the detective asked questions about a tax return Davis had fraudulently filed in a Texas victim’s name. Davis falsely represented that the license had been given to him by the taxpayer. Numerous text messages were also introduced at trial where co-conspirators sent Davis names and Social Security numbers, including from prisoners, for use in the scheme.
In June 2012, Davis, 27, of Stockbridge, Ga., entered into an “Assurance of Voluntary Compliance” with the Administrator of the Georgia Fair Business Practices Act, in which he agreed to modify his business practices. The evidence at trial demonstrated that despite entering into this agreement, he continued to file false tax returns using the identities of unsuspecting victims. Over 20 victims testified at trial. The scheme affected over 15,000 victims in virtually every state across the country.
The jury convicted Davis of one count of conspiracy, 15 counts of wire fraud, and 15 counts of aggravated identity theft. The wire fraud counts each carry a maximum sentence of 20 years in prison, the conspiracy count carries a maximum sentence of 5 years in prison, and the aggravated identity theft charges each carry a mandatory two-year sentence. At least one of the two-year sentences for aggravated identity theft must run consecutively to any other sentence imposed. Each count also carries a fine of up to $250,000. Davis was detained after the verdict.
On November 20, 2013, Jefferson pleaded guilty to conspiracy for her role in the scheme. On May 22, 2013, Sonnier, 44, of Ellenwood, Ga., pleaded guilty to conspiracy, wire fraud, and aggravated identity theft for his role. As part of his plea agreement, Sonnier agreed to forfeit his interest in 17 separate pieces of real estate located throughout Clayton County, thousands of dollars that were previously seized from his bank accounts, and over 80 electronic devices and items of jewelry that were previously seized by the government. In addition, Sonnier agreed to a money judgment of at least $7 million and full restitution to the IRS.
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.
Sentencing for Davis is scheduled for February 19, 2014, at 10:00 a.m. before United States District Judge Charles A. Pannell, Jr. Sentencing for Sonnier is scheduled for January 7, 2014, at 11 a.m., before Judge Pannell. Sentencing for Jefferson is scheduled for February 18, 2014, at 10 a.m., before Judge Pannell.
This case is being investigated by Special Agents of the Internal Revenue Service Criminal Investigation and Postal Inspectors with the United States Postal Inspection Service. If you believe you may be a victim of tax return-related identity theft, please contact the IRS Identity Protection Specialized Unit at 800-908-4490, extension 245 (Mon. - Fri., 7 a.m. - 7 p.m. local time).
Assistant United States Attorneys Stephen H. McClain and Thomas J. Krepp are prosecuting the case.
For further information please contact the U.S. Attorney’s Public Information Office at [email protected] or (404) 581-6016. The Internet address for the HomePage for the U.S. Attorney’s Office for the Northern District of Georgia is www.justice.gov/usao/gan.
St. Petersburg Landlord Charged with EPA Violations and Falsifying RecordsRead the Press Release
Tampa, FL – Acting United States Attorney A. Lee Bentley, III announces the return of a six-count superseding indictment charging Michael Moshe Shimshoni (56, Tierra Verde) with four counts of failing to provide approved Environmental Protection Agency (“EPA”) lead paint warning notices and brochures to his tenants, and two counts of alteration or falsification of records in a federal investigation. If convicted, he faces a maximum penalty of one year in federal prison on each of the failures to provide warning notice counts, and twenty years’ imprisonment for each of the falsification of records counts.
According to the indictment, Shimshoni owned, managed, and offered commercial and residential properties for lease in St. Petersburg through Pinellas Properties, Inc., and Affordable Realty and Property Management, Inc., among other entities. The superseding indictment alleges that Shimshoni knowingly and willfully failed to provide the prescribed lead paint hazard warning notices and federally approved lead paint hazard brochures to lessees of his properties. Federal law and regulations require that landlords must provide a prospective tenant of certain “target housing” built prior to 1978, before a tenant is obligated under any lease, with various warning notices including a lead warning statement, and a statement by the tenant affirming the receipt of an EPA approved lead hazard information pamphlet. The purpose of the pamphlet is to alert tenants to the dangers of lead paint and inform them about measures to reduce the risk of lead-based hazards.
The superseding indictment further alleges that Shimshoni altered, falsified, and made false entries in documents and records with the intent to impede, obstruct, and influence the Environmental Protection Agency’s investigation and administration of the Lead Hazard Reduction Act, the Toxic Substance Control Act, and related provisions by producing backdated "Disclosure of Information on Lead-Based Paint and/or Lead-Based Paint Hazards" forms.
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 the EPA Criminal Investigations Division. It will be prosecuted by Assistant United States Attorney Matthew J. Mueller.
Click HERE to view Superseding Indictment
Smuggler Gets Enhanced SentenceRead the Press Release
McALLEN, Texas ‐ Jose Guadalupe Reyna-Esparza, 21, of Tampico, Tamaulipas, Mexico, has been ordered to federal prison for nine years as a result of his conviction of smuggling undocumented aliens, United States Attorney Kenneth Magidson announced today. Reyna-Esparza pleaded guilty Oct. 2, 2013.
Today, U.S. District Judge Micaela Alvarez sentenced Reyna-Esparza to a sentence of 108 months imprisonment. The sentence was enhanced as the court took into consideration the fact he had sexually assaulted a 14-year-old female undocumented alien on a number of occasions. As an illegal alien, Reyna-Esparza is expected to face deportation proceedings following his release from prison.
From July 16 to July 17, 2012, Reyna-Esparza harbored undocumented aliens at a residence located in McAllen. On July 17, 2012, law enforcement officers observed Reyna-Esparza and two other individuals leave the residence in a vehicle. When officers attempted to conduct a traffic stop, Reyna-Esparza who was driving, led them on a high speed chase before eventually stopping and absconding into a field. Through investigation, it was discovered that Reyna-Esparza had sexually assaulted the 14-year-old undocumented alien.
The investigation leading to the charges was conducted by Homeland Security Investigations, Border Patrol, San Juan Police Department and Alton Police Department.
Assistant United States Attorneys Kimberly Ann Leo and Kristen Rees prosecuted the case.
Six Guilty in Connection with Heroin TraffickingRead the Press Release
Department of Justice
Office of Public AffairsSHERMAN, Texas – Six North Texas men have pleaded guilty in connection with a heroin trafficking conspiracy in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
Julio Cruz, 23, of Carrollton, Texas, pleaded guilty to conspiracy to distribute and possession with intent to distribute heroin on Dec. 10, 2013, before U.S. District Judge Marcia Crone.Co-defendants, Tyrese Jerrell Shelton, 27, of Carrollton; Cesar Alexander Avelar-Gomez, 20, of Dallas; Jose Eladio Molina, 27, of Carrollton; and Taylor Evan Anderson, 22, of Carrollton, each pleaded guilty to the same charges in the previous two months. Clayton Teasdale, 24, of Carrollton, pleaded guilty to using a communication device to facilitate a drug trafficking crime.
According to the Second Superseding Indictment, the distribution of heroin in this case was linked to heroin overdoses, including the death of a Carrollton resident.
A federal grand jury returned an indictment on Dec. 12, 2012, charging the defendants with federal drug trafficking violations.
"Members of the law enforcement community, to include the judicial system, are all too aware of the dangers and impact that illegal drug trafficking and use has on society,” said Chief Rex Redden of the Carrollton Police Department. “The results are always negative; so when we're able to work with our counterparts to bring individuals such as this to justice we know that we may be saving lives and lessening the harmful effects on our community. I want to congratulate everyone involved and thank those that came forward to assist and for their courage to do the right thing. We certainly feel for those that have lost loved ones and will continue to work hard to protect society from the harmful effects of illegal narcotics."
The Drug Enforcement Administration, along with our state and local partners, is committed to targeting and dismantling drug trafficking organizations determined to spread their filth throughout our communities said DEA’s Special Agent in Charge Daniel Salter. “Heroin abuse is unfortunately escalating --- forcing addiction, pain and devastation on its users. Today is a victory and I applaud the efforts of the special agents and officers who worked relentlessly to shut down this drug trafficking organization and to keep our neighborhoods free of the poison being spread by these criminals.”
The defendants each face a minimum of 10 years and up to Life in federal prison at sentencing. Sentencing dates have not been set.
This case is being investigated by the U.S. Drug Enforcement Administration, the Carrollton Police Department, the Coppell Police Department, the San Antonio Police Department, the Dallas County Sheriff’s Office, the Kaufman County Sheriff’s Office, and the Ellis County Sheriff’s Office. This case is being prosecuted by Assistant U.S. Attorney Heather Rattan.
Sentences for Decmber 10 - 12, 2013Read the Press Release
Raul Ramirez-Bravo, a/k/a Javier Bravo Refugio Servin, 44, of Mexico, was sentenced by Federal District Court Judge Alan B. Johnson on December 12, 2013, for illegal re-entry of a previously deported alien into the United States. Ramirez-Bravo was arrested in Gillette, Wyoming. He received time served, plus ten days, was ordered to pay a $100.00 special assessment and is subject to deportation upon release from custody. This case was investigated by the U.S. Department of Homeland Security, Immigration and Customs Enforcement.
Nicole Rae Presfield, 32, of Casper, Wyoming, was sentenced by Federal District Court Judge Scott W. Skavdahl on December 11, 2013, for conspiracy to possess with intent to distribute, and to distributing 50 grams or more of methamphetamine. Presfield was arrested in Meeteetse, Wyoming. She received 132 months imprisonment, to be followed by five years of supervised release, and was ordered to pay a $100.00 special assessment and a $400.00 fine. This case was investigated by the Wyoming Division of Criminal Investigation.
Raymond Lee Norcutt, 57, of Casper, Wyoming, was sentenced by Federal District Court Judge Scott W. Skavdahl on December 10, 2013, for conspiracy to possess with intent to distribute, and to distributing 50 grams or more of methamphetamine. Norcutt was arrested in Meeteetse, Wyoming. He received 121 months imprisonment, to be followed by five years of supervised release, and was ordered to pay a $100.00 special assessment and a $900.00 fine. This case was investigated by the Wyoming Division of Criminal Investigation.
Rochester Man Sentenced to Prison for Filing False Tax ReturnsRead the Press Release
ROCHESTER, N.Y.--U.S. Attorney William J. Hochul, Jr. announced today that Patrick Dandrea, 55, of Rochester, N.Y., who was convicted of filing false tax returns, was sentenced to 24 months in prison by U.S. District Court Judge Frank P. Geraci. The defendant was also ordered to pay $466,007.00 in restitution.
Assistant U.S. Attorney Craig R. Gestring, who handled the case, stated that the defendant was awarded a contract from Erie County in 2006 to remove damaged trees and branches following the October Storm. Dandrea received over $5,000,000 in payments which he failed to report on his 2006 and 2007 Federal Income Tax Returns. As a result, the Internal Revenue Service incurred a tax loss of over $460,000. In addition to being responsible for the tax loss, the defendant is also liable for interest payments and penalties of over $265,000 going back to 2006. Dandrea has previous federal convictions for mail fraud, wire fraud, money laundering, and conspiracy to distribute marijuana.
The sentencing is the culmination of an investigation on the part of Special Agents of the Internal Revenue Service, Criminal Investigations Division, under the direction of Special Agent in Charge Toni Weirauch, and the Federal Bureau of Investigation, under the direction of Special Agent in Charge Brian P. Boetig.Rio Rancho Man Sentenced for Federal Bank Fraud and Money Laundering ConvictionRead the Press Release
ALBUQUERQUE – Derek Barnhill, 49, of Rio Rancho, N.M., was sentenced yesterday afternoon to three months in federal prison followed by three years of supervised release, which is to include nine months of home confinement, for his bank fraud and money laundering conviction. Barnhill also was ordered to pay $560,129.39 in restitution. The restitution is to be paid jointly with co-defendant Vincent J. Garcia.
In June 2010, Barnhill, Vincent Garcia, 61, an Albuquerque real estate developer, and David Garcia, 37, of Albuquerque, were charged in a 19-count superseding indictment with bank fraud and money laundering offenses in connection with three real estate development projects, including the Anasazi Downtown LLC (Anasazi Building).
Barnhill pled guilty in Dec. 2010, to Count 3, a bank fraud offense, and Count 10, a money laundering offense, and admitted collaborating with Vincent Garcia in a bank fraud and money laundering scheme. In Aug. 2011, Vincent Garcia entered a guilty plea to Count 3 of the superseding indictment, and admitted committing bank fraud in the amount of $365,677.00, and acknowledged that the gross loss amount to the victims of his fraudulent activity was $842,237.44. Neither Barnhill nor Vincent Garcia implicated David Garcia in the criminal conduct charged in the superseding indictment and the charges against him subsequently were dismissed.
According to court filings, Vincent Garcia executed a plan to obtain funding from the Columbian Bank & Trust Co. (Bank) by having Barnhill submit a construction loan drawn-down request containing a material misrepresentation to the Bank. The scheme began on Feb. 12, 2007, when Garcia told Barnhill that he needed $360,000.00 for a “good faith payment” towards the purchase of a casino. Garcia asked Barnhill to use an old bid for sheet rock for the Anasazi Building to get the money. Barnhill altered the sheet rock bid to support a fictitious draw-down request for $365,677.00, and submitted the request based solely on the false invoice to the Bank. After the Bank disbursed the money, Barnhill transferred the funds to an Anasazi account at New Mexico Bank and Trust. The next day, Garcia and Barnhill went to New Mexico Bank and Trust and withdrew $360,000.00 of the proceeds and deposited the money at Compass Bank into an account in the name of Albuquerque Downtown Partners. Thereafter, Garcia flew to Washington State with a Compass Bank check for $360,000.00 to make a payment on the casino.
Vincent Garcia was sentenced in April 2013, to 27-months in federal prison followed by five years of supervised release. He also was ordered to pay $722,543.76 in restitution. Garcia is serving his prison sentence.
This case was investigated by IRS Criminal Investigation, the FDIC-OIG and the Albuquerque office of the FBI, and was prosecuted by Assistant U.S. Attorney Jonathon M. Gerson.
Rio Grande City Nurse Practitioner on Her Way to Federal Prison in Marijuana CaseRead the Press Release
McALLEN, Texas – Celia Raquel Zuniga, 45, of Rio Grande City, has been ordered to prison following her conviction of conspiracy to possess with intent to distribute and possession with intent to distribute marijuana, announced United States Attorney Kenneth Magidson. The McAllen federal jury convicted Zuniga following a two-day trial and approximately two hours of deliberations on Wednesday, Sept. 25, 2013.
U.S. District Judge Micaela Alvarez, who presided over the trial, handed Zuniga a total sentence of 78 months in prison to be immediately followed by four years of supervised release. At the hearing today, the court enhanced her sentence, finding she obstructed justice when she perjured herself while testifying at trial. She was further ordered to pay a $5,000 fine as to each count. In handing down the sentence, Judge Alvarez noted while Zuniga performed a great service to the community as a nurse practitioner, she was causing great harm to the community because of this type of criminal activity.
During trial, Starr County sheriff’s deputies testified that on Dec. 6, 2012, they observed three vehicles driving in tandem going east on Expressway 83 near the Starr County and Hidalgo County line. They then observed the middle vehicle change lanes without signaling. Deputies conducted a traffic stop and identified Zuniga as the driver. At that time, deputies noticed a strong odor of marijuana emitting from the vehicle and a canine subsequently alerted to the presence of narcotics.
Initially, Zuniga lied to deputies and denied there was anything illegal in her vehicle. However, after stepping out of her vehicle and when asked a second time, Zuniga admitted there was something illegal inside. Deputies then recovered 24 bundles of marijuana, weighing approximately 243 kilograms within the car.
In her defense, Zuniga testified she had been kidnaped by multiple men while she was driving to a friend’s house. She claimed they took her to a cemetery while bundles of marijuana were loaded into her vehicle. She further testified they told her she would need to drive the vehicle to McAllen or else something would happen to her family.
The jury was not convinced of Zuniga’s claim of duress and ultimately found her guilty as charged.
Previously released on bond, Zuniga was taken into custody following the return of the verdict where she will remain pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The case was investigated by Homeland Security Investigations with the assistance of the Starr County Sheriff’s Office. Assistant United States Attorney Kimberly Ann Leo is prosecuting.
Perry County Man Pleads Guilty to Methamphetamine ConspiracyRead the Press Release
A Perry County, IL, man pled guilty in federal district court to an indictment charging conspiracy to manufacture methamphetamine, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today.
On December 11, 2013, Ty W. Dusch, 50, of DuQuoin pled guilty to the one-count indictment charging conspiracy to manufacture methamphetamine. The offense occurred between 2011 and June 2013 in Jackson and Perry Counties. Evidence at the plea hearing established that Dusch and others were obtaining pseudoephedrine for the purpose of manufacturing methamphetamine. When officers executed a search warrant at a Murphysboro residence where Dusch was staying, they located methamphetamine and methamphetamine-making materials. Dusch faces a term of imprisonment of up to 20 years, to be followed by 3 years’ supervised release, and a $1,000,000 fine. Dusch is currently being held without bond pending an April 4, 2014, sentencing hearing.
The ongoing investigation is being conducted by the Jackson County Sheriff’s Office, Murphysboro Police Department, and Drug Enforcement Administration. The DuQuoin Police Department also assisted in the investigation.
The case is being prosecuted by Assistant United States Attorney Amanda A. Robertson.
Pennsylvania Man Sentenced to 18 Months in Prison <br /> for Hacking into Multiple Computer NetworksRead the Press Release
A Pennsylvania man was sentenced to serve 18 months in prison for his role in a scheme to hack into computer networks and sell access to those networks.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U .S. Attorney Carmen M. Ortiz of the District of Massachusetts made the announcement after sentencing by U.S. District Judge Mark Wolf in the District of Massachusetts on Dec. 11, 2013.
Andrew James Miller, 23, of Devon, Pa., pleaded guilty to conspiracy and computer fraud on Aug. 26, 2013. According to court documents, from 2008 to 2011, Miller remotely hacked into a variety of computers located in Massachusetts and elsewhere, and, in some instances, surreptitiously installed “backdoors” into those computers. These “backdoors” were designed to provide future administrator-level, or “root,” access to the compromised computers.
Miller obtained login credentials to the compromised computers. He and his co-conspirators then sold access to these backdoors, as well as other login credentials. The access sold by Miller and his co-conspirators allowed unauthorized people to access various commercial, education and government computer networks. Miller attempted to sell access for $50,000 to two supercomputers at the Lawrence Berkeley Laboratory in California that were part of the National Energy Research Scientific Computing Center.
The case was investigated by the FBI and prosecuted by Senior Trial Attorney Mona Sedky of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Adam Bookbinder of the U.S. Attorney’s Office for the District of Massachusetts.New Arrest: Carmine Mandarano MD- Complaint for Distribution of Controlled SubstanceRead the Press Release
New Arrest: Carmine Mandarano MD- Complaint for Distribution of Controlled Substance
Mission Hills Woman Indicted for Cayman Island Tax Scheme, Lying to Federal AuthoritiesRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Mission Hills, Kan., woman was indicted by a federal grand jury today for using numerous foreign trusts and secret Cayman Island bank accounts as part of a scheme to avoid paying more than $7 million in income taxes, and for lying to federal authorities concerning her Cayman Island interests.
“Offshore tax evasion is an issue of fundamental fairness,” Dickinson said. “Americans who unlawfully hide their money offshore aren’t paying the taxes they owe, while citizens who play by the rules are forced to pick up the slack and foot the bill.
“Americans with secret offshore bank accounts still have an opportunity to voluntarily disclose those accounts to the Internal Revenue Service to avoid going to jail,” Dickinson added. “I encourage those taxpayers to do the right thing and take advantage of the IRS’s offshore voluntary disclosure program. Taxpayers can voluntarily come back into compliance so they properly report and pay their taxes.”
Verna Cheryl Womack, 62, of Mission Hills, was charged in a 10-count indictment returned by a federal grand jury in Kansas City, Mo. In addition to her Mission Hills residence, Womack maintains a condominium in the Cayman Islands and a condominium at Trump Towers in New York, N.Y. (Although the Cayman Islands and New York residences are owned by companies that Womack organized under trusts that were created in the Cayman Islands, according to today’s indictment, they are in her custody and control and for her use and enjoyment.)
Womack owned and operated a number of businesses associated with selling liability insurance policies to independent truck drivers. She sold those businesses for more than $35 million in April 2002.
Today’s indictment alleges that Womack opened at least 19 bank accounts and organized a series of nominee companies and trusts in the Cayman Islands to conceal a portion of her income from the IRS. According to the indictment, these corrupt endeavors were part of a scheme that began in 1996 and caused a total tax loss to the government in excess of $7 million.
As part of her corrupt endeavors, the indictment says, Womack repeatedly failed, year after year, to report her financial interests in her nominee companies and trusts to the IRS despite the multiple legal requirements that, as a United States citizen, she do so. Today’s indictment alleges that Womack filed federal tax returns that stated she did not have an interest in or signature authority over any foreign financial accounts, even though Womack knew that was false and fraudulent. For example, the indictment says, Womack maintained a Cayman Island bank account in her own name for several years, with balances ranging from nearly $41,000 to more than $173,000. The indictment alleges that Womack repeatedly failed, year after year, to report her financial interests in her bank account to the IRS.
Womack is charged with one count of attempting to interfere with the administration of internal revenue laws and nine counts of making a false statement to a government agency.
Wine Collection & Auction
Among its allegations, the indictment cites one of Womack’s nominee companies in the Cayman Islands as an example of Womack’s corrupt endeavors to conceal income from the IRS. Womack exercised ownership, custody and control over Lucy Limited and its assets. Among its assets, the indictment says, Lucy Limited owned (as nominee for Womack) a wine collection that was stored in the basement of Womack’s Mission Hills residence. Womack used a credit card issued by the Bank of Butterfield (in Grand Cayman) in the name of Lucy Limited to purchase at least part of the wine for her collection, for which she paid approximately $1.5 million over the course of several years.
On March 15, 2008, Womack sold approximately half of the wine stored in her basement at an auction house in New York for $1.6 million. The indictment alleges that she attempted to use her nominee company, Lucy Limited, and its financial accounts at the Bank of Butterfield in Grand Cayman to conceal the revenues and profits she derived from the sale of the wine.
Following the sale, the indictment says, Womack personally directed the auction house to wire more than $1.6 million in a series of transfers to a Lucy Limited account at the Bank of Butterfield that Womack controlled. Womack allegedly employed a number of false and fraudulent business agreements that appeared to be arm’s length transactions, but were in fact Womack’s self-dealing, resulting in wires of those proceeds back to the United States for Womack’s personal use.
For example, the indictment alleges that a $298,957 wire transfer was falsely and fraudulently represented in Lucy Limited’s financial statements as a management fee due to Womack. Womack also allegedly created a false and fraudulent document purporting to be a lease agreement between herself and Lucy Limited. Although not created until October 2008, the indictment says, the false and fraudulent lease agreement stated that Lucy Limited would lease the wine cellars in the basement of Womack’s Mission Hills residence for $25,000 per year beginning in 1995 and continuing through at least 2009. The day after creating that fraudulent document, Womack caused a $350,000 wire transfer from the wine auction proceeds to be wired to a bank account under her control in Kansas City, Mo. According to the indictment, Womack falsely and fraudulently represented in Lucy Limited’s financial statements that this wire transfer was payment for rent due under the lease agreement for the years 1995 through 2008.
After the auction, Womack caused the wine that was provided to the auction house but did not sell during the auction to be transported and stored at her condominium at Trump Towers in New York.
As a result of her efforts to disguise the self-dealing nature of these transactions, the indictment says, Womack did not report the income she derived from the sale of the wine on her federal tax return. She did not disclose her control of Lucy Limited or the existence of its bank account to the IRS, the indictment says, and she did not properly report the profit she derived from that sale – at least $851,188 – on her tax return.
On May 19, 2009, Womack testified under oath in a deposition by a trial attorney for the U.S. Department of Justice, Tax Division, regarding a lawsuit that sought to enjoin a third party from providing tax advice. According to the indictment, Womack falsely and fraudulently stated that Lucy Limited’s investors paid her to purchase the wine, manage the wine, and properly contain the wine, when she knew that there were no such investors, that she organized Lucy Limited, and that she exercised ownership, custody and control over Lucy Limited and its assets.
False Statements
Today’s indictment also alleges that Womack repeatedly lied to federal government officials and agents about her interests in Cayman Island businesses, trusts and bank accounts. On one occasion, Womack allegedly lied to two FBI agents, falsely claiming that she did not own any foreign businesses and that those businesses were owned by other investors, when she knew that no other investors existed. Womack provided a list of her financial accounts to an FBI agent in relation to a separate federal criminal investigation. Womack’s list of her accounts did not include any of her foreign bank accounts.
During the May 19, 2009, deposition, Womack allegedly repeatedly lied under oath about her financial interests in the Cayman Islands. During that deposition, the indictment says, Womack knowingly made numerous false and fraudulent statements regarding her Cayman Island trusts and business interests. Today’s indictment charges Womack with nine counts of making material false statements during that deposition.
Dickinson cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorneys Brian P. Casey and Daniel M. Nelson. It was investigated by IRS-Criminal Investigation and the FBI.
IRS Offshore Voluntary Disclosure Program
Federal tax law requires U.S. taxpayers to pay taxes on all income earned worldwide. U.S. taxpayers must also report foreign financial accounts if the total value of the accounts exceeds $10,000 at any time during the calendar year. Willful failure to report a foreign account can result in a fine of up to 50 percent of the amount in the account at the time of the violation.
Since 2006, American law enforcement agencies have had some, but limited, ability to obtain financial records concerning foreign accounts of American citizens in so-called tax havens. But a new Foreign Account Tax Compliance Act (FATCA) became law in the United States in March 2010 and is taking effect abroad on a country-by-country basis. The IRS and law enforcement are now more readily able to obtain the records of Americans holding foreign bank accounts in countries including Switzerland, the Cayman Islands and Costa Rica. FATCA requires foreign financial institutions to report the holdings of U.S. taxpayers to the IRS, or else face serious penalties.
The IRS Offshore Voluntary Disclosure Program enables U.S. taxpayers to resolve their tax liabilities and minimize their chances of criminal prosecution by voluntarily disclosing previously undisclosed foreign accounts and income. Approximately 38,000 voluntary disclosures from individuals have been made under the Offshore Voluntary Disclosure Initiative.
“How to make an offshore voluntary disclosure”: http://www.irs.gov/uac/How-to-Make-an-Offshore-Voluntary-Disclosure
Medical Drug Clinic Owner Sentenced to 60 Months in Prison for Drug Distribution and Money LaunderingRead the Press Release
LAFAYETTE, La. –United States Attorney Stephanie A. Finley announced today that Gloria Adams, 63, of LaPlace, La., was sentenced by U.S. District Judge Elizabeth E. Foote to 60 months in prison with three years of supervised release for her part in a conspiracy to fill prescriptions without doctors being present. She also was ordered to forfeit $241,793. Adams pleaded guilty on April 23, 2013.
According to evidence presented at the guilty plea, Adams, who is not a doctor, opened Essential Medical Center (EMC) in November 2005 in Lafayette. She admitted to conspiring to dispense Controlled Dangerous Substances (CDS) such as Xanax and Lortab when no doctors were present at the clinic through a system called “pre-signing.” Pre-signing took place at the clinic when some non-physician staff used pre-signed documents to dispense prescriptions to patients while doctors were absent. She also admitted that she aided and abetted the practice of dispensing CDS outside the scope of professional practice and not for a legitimate medical purpose. Adams also admitted to laundering approximately $16,000 in drug proceeds through a financial institution.
“I would like to thank the Drug Enforcement Administration and the Internal Revenue Service for combining forces to successfully investigate this case,” Finley stated. “Combating the illegal distribution of prescription drugs remains a priority in my office.”
“IRS - CI will continue to play an active part in the war on drugs,” stated IRS Special Agent in Charge Gabriel L. Grchan. “Individuals such as Gloria Adams that are guilty of attempting to launder their illegal drug profits will be prosecuted for money laundering violations; IRS - CI will continue to work with our federal partners to that end.”
The Drug Enforcement Administration – Office of Diversion Control and the Internal Revenue Service conducted the investigation. Assistant U.S. Attorney Daniel J. McCoy prosecuted the case.Manhattan U.S. Attorney Files and Settles Civil Rights Lawsuit Against Westchester County Landlord for Discrimination Against African-AmericansRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that the United States has filed and settled a federal civil rights lawsuit under the Fair Housing Act against 61 MAIN STREET CORPORATION and ROSARIO MACRI for discriminating against African-Americans seeking to rent apartments at an apartment complex located at 123 South Broadway in Irvington, New York. The settlement, in the form of a consent decree, was approved today by U.S. District Judge Kenneth M. Karas.
Manhattan U.S. Attorney Preet Bharara said: “Nobody should be deprived of housing opportunities based on his or her race or color. This case should be a wake-up call to any landlord or building owner who discriminates. Racial discrimination in housing is not only antithetical to the principles of fairness and equality, it is against the law.”
The apartment complex at 123 South Broadway is a 22-unit residential apartment complex located in the Village of Irvington, in Westchester County, New York. The apartment complex is owned by 61 MAIN STREET CORPORATION. ROSARIO MACRI is the president of 61 MAIN STREET CORPORATION and manages the apartment complex. According to the Complaint filed in federal court in Manhattan, since at least August 2012, 61 MAIN STREET CORPORATION and ROSARIO MACRI have engaged in conduct constituting discrimination on the basis of race and color under the Fair Housing Act.
Specifically, the United States alleges that 61 MAIN STREET CORPORATION and ROSARIO MACRI have engaged in racially discriminatory housing practices, including failing to inform African-American prospective tenants about available apartments, while telling Caucasian prospective tenants, even on the same day, that apartments were in fact available. The Complaint also alleges that 61 MAIN STREET CORPORATION and ROSARIO MACRI failed to show available apartments and give rental applications to African-American prospective tenants, but showed available apartments and gave rental applications to Caucasian prospective tenants, even on the same day. In addition, the Complaint alleges that 61 MAIN STREET CORPORATION and ROSARIO MACRI provided higher rent prices and less favorable security deposit terms to African-American prospective tenants than those offered to similarly situated Caucasian prospective tenants.
The Consent Decree requires 61 MAIN STREET CORPORATION and ROSARIO MACRI, among other things, to refrain from discriminating on the basis of race in their rental practices, and to implement a non-discrimination policy and non-discriminatory standards and procedures, as set forth in the Consent Decree, at the apartment complex at 123 South Broadway. In addition, 61 MAIN STREET CORPORATION and ROSARIO MACRI will pay $60,000 into a fund for the compensation of victims of their discriminatory conduct, as well as a $32,000 civil penalty to the United States.
The case is being handled by the Office’s Civil Rights Unit. Assistant United States Attorney Rebecca S. Tinio is in charge of the case.
U.S. v. 61 Main Street Corporation and Rosario Marci Consent Decree