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10 December 2013
Federal Jury Convicts Austin Man Who Harbored Female at Local MotelRead the Press Release
CORPUS CHRISTI, Texas - Jose Gallegos, 47, of Austin, has been found guilty by a Corpus Christi jury of harboring and transporting an undocumented person, announced United States Attorney Kenneth Magidson. The verdict was returned late this morning following a two-day trial and approximately 45 minutes of deliberation.
On Aug. 17, 2013, Gallegos was caught at the Sarita Border Patrol checkpoint with a scantily-clad 18-year-old female passenger. During trial, the jury heard testimony that she was being smuggled by Gallegos and his associates from Mexico to New Jersey. The young woman provided tearful testimony that she was sexually assaulted by Gallegos, forced to wear revealing clothing and receive facial piercings. She further testified she was threatened with death if she disobeyed or told anyone.
Gallegos kept the young woman and other undocumented persons being smuggled from Mexico at a Palmview motel for two weeks prior to being arrested at the checkpoint.
The defendant appeared pro se, representing himself in all proceedings and claimed the government was merely attacking him. The jury disagreed and found him guilty as charged.
U.S. District Judge Nelva Gonzales Ramos, who presided over the trial, will set sentencing at a later date. At the time of that hearing, Gallegos will face up to five years imprisonment and a possible $250,000 fine. He will remain in custody pending sentencing.
The matter was investigated by Homeland Security Investigations in conjunction with the U.S. Border Patrol. Assistant United States Attorney Jeffrey D. Preston prosecuted the case.
Federal Grand Jury Indicts Charleston Man on Illegal Firearm Possession ChargeRead the Press Release
CHARLESTON, W.Va. – A 32-year-old man was indicted today by a federal grand jury sitting in Charleston for being a felon in possession of a firearm. According to a single-count indictment, Jon Paul Clements, of Charleston, W.Va., allegedly possessed a firearm on March 9, 2013.
Clements was previously convicted of first degree robbery with a firearm in July 2002 in the Circuit Court of Kanawha County. He did not have his rights to possess a firearm restored.
Clements faces up to 10 years in prison, if convicted.The investigation was conducted by the Charleston Police Department. Assistant United States Attorney Monica Coleman is in charge of the prosecution.
The case is being brought as part of Project Safe Neighborhoods. Project Safe Neighborhoods is a nationwide commitment to reduce gun crime in the United States by networking existing local programs targeting gun crime.
Click here to view a copy of the indictment
Note: The charge contained in the indictment is merely an accusation, and the defendant is presumed innocent unless and until proven guilty.
East Texans Arrested on Federal Drug Trafficking ChargesRead the Press Release
Department of Justice
Office of Public AffairsTYLER, Texas - U.S. Attorney John M. Bales announced today that 16 individuals have been arrested following a lengthy investigation into drug trafficking in the Eastern District of Texas.
On Dec. 10, 2013, a combined task force of federal, state and local law enforcement agencies began arresting individuals named in a federal indictment returned by a grand jury on Nov. 20, 2013. The indictment charges the following individuals with conspiracy to distribute methamphetamine, cocaine and marijuana in the Eastern District of Texas:
ANTONIO CORTEZ GONZALES, 34, of Tyler, MONICA HENSLEY, 35, of Longview, GUILLERMO ORTIZ-PINEDA, a/k/a "The General," 38, of Houston, JUAN GUTIERREZ MOJICA, 43, of Tyler, a/k/a "Benjamin Blanco", a/k/a "Chava", a/k/a "Chaparro", a/k/a "El4", a/k/a "Carlos Pineda", a/k/a "Oneldo Pineda", a/k/a "Eledoni Panteleon", a/k/a "Serafin GutietTez", a/k/a "Gonzalo Coria", a/k/a "Luis Tapia", a/k/a "Emilio Guerra;”
MIRIAM REYES, 41, of Houston, JUVENCIO DUQUE, 53, of Dallas, MAURICIO ORROSTIETA RODRIGUEZ, 40, of Tyler, ALEJANDRO HERNANDEZ, 46, of Irving, Texas, IVAN SANCHEZ, 21, of Tyler, ESTEBAN AVELLANEDA MUNOZ, 19, of Tyler, JONHYAYALA, 34, of Tyler, JESUS BOTELLO, 34, of Tyler, GUADALUPE CUARENTA, 48, of Tyler, SERGIO MOJICA, 30, of Tyler, LUIS GARCIA-AGUIRRE, 32, of Tyler, and
IRERI PINEDA, xx, of Tyler.The defendants will appear today in federal court for initial appearances. If convicted, the defendants face from 10 years to life in federal prison.
This case is the result of an ongoing Organized Crime Drug Enforcement Task Force (OCDETF) joint investigation. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
In August 2012, the Drug Enforcement Administration (DEA) Tyler Task Force, in conjunction with multiple law enforcement agencies, initiated an OCDETF investigation into a crystal methamphetamine trafficking organization based in the East Texas area with direct ties to Mexico. The organization also distributes cocaine and marijuana. This 16 month investigation involved extensive surveillance and innovative investigative techniques. Several sources of supply for crystal methamphetamine, cocaine, and marijuana were identified during the course of the investigation. To date, law enforcement officials have seized multiple pounds of crystal methamphetamine, cocaine, and marijuana. Officers have also seized more than $200,000 cash, multiple weapons, vehicles, and real property.
“Today’s enforcement operations are indicative of the DEA’s commitment to rid our communities of drug trafficking organizations determined to profit on the backs of addiction,” said the DEA Dallas Division’s Special Agent in Charge Daniel R. Salter. “Citizens in East Texas can rest assured that the DEA and our law enforcement partners are determined to ensure that Tyler and its surrounding communities remain safe and a great place to live. The success of this investigation is an outstanding example of our law enforcement community’s resolve and determination.”
The DEA Task Force in Tyler includes officers from the Gregg County Sheriff’s Office, Henderson County Sheriff’s Office, Henderson Police Department, Kilgore Police Department, Smith County Sheriff’s Office, and Upshur County Sheriff’s Office, as well as DEA Special Agents.Other agencies assisting in the joint investigation include the Federal Bureau of Investigation, Homeland Security Investigations, Internal Revenue Service Criminal Investigation, Department of Public Safety (DPS), Kilgore Police Department, Longview Police Department, Gregg County Sheriff’s Office, Smith County Sheriff’s Office, Tyler Police Department, and the Harris County Sheriff’s Office. This case is being prosecuted by Assistant U.S. Attorney Mary Ann Cozby.
A grand jury indictment is not evidence of guilt. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Dingmans Ferry Man Charged with Assaulting A Federal Law Enforcement Officer at the Delaware Water GapRead the Press Release
The United States Attorney's Office for the Middle District of Pennsylvania, announced that a felony Criminal Information charging Brian Michael Herdman, age 52, of Dingmans Ferry, Pennsylvania, was filed in the United States District Court in Scranton, Monday.
According to United States Attorney Peter J. Smith, Herdman was charged with allegedly assaulting a United States Park Ranger at the Delaware Water Gap National Recreational Area on September 4, 2013.
The investigation was conducted by the United States Park Service and Federal Bureau of Investigation. The case is assigned to Assistant United States Attorney Todd K. Hinkley.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilty is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
In this case, the maximum penalty under the federal statute is eight years’ imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
Detroit Man Convicted of Oxycodone DistributionRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-7725 ● Contact: Chris Zumpetta-Parr, Public Affairs SpecialistFollow us on Twitter @NDWVnews
WHEELING, WEST VIRGINIA – A Michigan man has been convicted of distributing painkillers in Northern West Virginia.
U.S. Attorney William J. Ihlenfeld, II, announced that MALCOLM TYLER, age 36, of Detroit entered a plea of guilty before Judge Frederick P. Stamp, Jr. to “Conspiracy to Distribute Oxycodone” in the Wheeling area from late 2011 to Spring of 2012. TYLER admitted to being a source of supply of painkillers for a Wheeling-area drug dealer, who then redistributed the pills locally.
TYLER is in custody pending sentencing and faces up to 20 years in federal prison. As a result of this conviction TYLER violated his state parole and will face prison time in Michigan once he has completed his federal sentence.
The TYLER case was prosecuted by Assistant United States Attorney Randolph J. Bernard and was investigated by the Ohio Valley Drug & Violent Crime Task Force, consisting of officers and agents from the Wheeling Police Department, the Ohio County Sheriff’s Department, West Virginia State Police-BCI, and the Drug Enforcement Administration.
U.S. Attorney Ihlenfeld also announced that five individuals were sentenced and one other entered a guilty plea. The following individuals were sentenced by Chief Judge John Preston Bailey:
JAMES GREATHOUSE, age 23, of Wheeling, was sentenced to 85 months in prison and three years of supervised release as a result of his conviction for “Felon in Possession of a Firearm.” GREATHOUSE was remanded to the custody of the United States Marshal pending designation to a Federal institution. The case prosecuted by Assistant United States Attorney Stephen L. Vogrin and investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives.
MONTRELL L. BLACK, also known as “SLIM”, age 20, of Wheeling, was sentenced to 46 months in prison and three years of supervised release for “Conspiracy to Distribute Crack Cocaine” and “Felon in Possession of a Firearm.” BLACK was remanded to the custody of the United States Marshal pending designation to a Federal institution.
DANIEL R. ROBERTSON, age 28, was sentenced to 24 months in prison and three years of supervised release for the “Distribution of Oxymorphone.” ROBERTSON was remanded to the custody of the United States Marshal pending designation to a Federal institution.
The BLACK and ROBERTSON cases were prosecuted by Assistant United States Attorney Randolph J. Bernard and investigated by the Marshall County Drug Task Force, which includes officers and agents from the Moundsville Police Department, the Marshall County Sheriff’s Department, and the Drug Enforcement Administration.
CHRISTIAN E. IVERSON, age 26, of New Martinsville, was sentenced to 24 months in prison and three years of supervised release for “Felon in Possession of a Firearm.” IVERSON, who is free on bond, will self-report to the designated Federal institution on January 8, 2014. This case was investigated by the New Martinsville Police Department and the Bureau of Alcohol, Tobacco, Firearms & Explosives.
MICHAEL RUNYON, age 33, of Bridgeport, Ohio, was sentenced to 15 months in prison and five years of supervised release for “Failure to Update Sex Offender Registration.” RUNYON, who is free on bond, will self-report to the designated Federal institution on January 8, 2014. This case was investigated by the United States Marshals Service.
The IVERSON and RUNYON cases were prosecuted by Assistant United States Attorney David J. Perri.
CODY G. ROBERTSON, age 29, of Hundred, West Virginia, entered a plea of guilty before Magistrate Judge James E. Seibert to “Possession of Child Pornography.” ROBERTSON, who is free on bond pending sentencing, faces up to 10 years in prison and lifetime supervision. This case was prosecuted by Assistant United States Attorney Robert H. McWilliams, Jr. and was investigated by the Federal Bureau of Investigation. ROBERTSON will be sentenced once a pre-sentence investigation report has been completed.
Denver Man Sentenced for Possession of Child Pornography He Ordered over the Internet Which Was Delivered via United States MailRead the Press Release
Torture table was found in house of defendant when authorities executed search warrant
DENVER -- Clifford Eric Perian, age 53, of Denver, Colorado, was sentenced today by Senior U.S. District Court Judge Lewis T. Babcock to serve 82 months (over 6 years) in federal prison for possession of child pornography, the United States Attorney’s Office and the U.S. Postal Inspection Service announced. After serving his prison sentence, Perian was ordered to serve 10 years on supervised release. He will also be required to register as a sex offender. The defendant, who appeared at the hearing in custody, was remanded immediately after the sentencing was concluded.
Perian was first charged by Criminal Complaint on May 24, 2013. He was then indicted by a federal grand jury in Denver on June 18, 2013. He pled guilty before Senior Judge Babcock on September 17, 2013. He was sentenced on December 10, 2013.
According to court documents, including the affidavit in support of the Criminal Complaint, the indictment, and the stipulated facts contained in the plea agreement, based on a law enforcement tip, the United States Postal Inspection Service (USPIS) began an investigation into Clifford Eric Perian, and determined that he had on multiple occasions purchased several child pornography films. With the help of the National Center for Missing and Exploited Children (NECMEC), the United States Postal Inspection Service (USPIS) investigated numerous CyberTipLine reports relating to emails and online postings by an individual using three different email addresses going back as far as November 11, 2007. The NCMEC and the USPIS were able to establish that evidence existed indicating that all three accounts were used by Clifford Perian. In the postings, Perian was soliciting parents of minor boys or looking for minor volunteers to be subjected to various acts of sexual torture and/or abuse.
On May 23, 2013, Postal Inspectors executed a search warrant at the residence of Perian in Denver. Inspectors found the bondage and sexual paraphernalia Perian boasted about online. They found DVD’s containing child pornography or child erotica, as well as a home-made “torture table” with which to tie down and immobilize others. Computers were also seized. Following the execution of the search warrant, Postal Inspectors contacted Perian. Investigators then determined that Perian ordered videos online, and then received them in the U.S. Mail. It was also determined that Perian received images of young males under the age of 18 engaged in sexual activity with male adults through internet chat rooms and via email. There were also allegations that Perian sexually touched and was sexually touched by at least three boys ages 16 to 17 in approximately 2004 through 2006. Law enforcement also determined that Perian had been to local water parks taking non-explicit pictures of young boys he did not know under the age of 18.
“This defendant was focused on the physical torture of young children,” said U.S. Attorney John Walsh. “Not only did he possess images of child torture, he admitted to molesting boys, and Postal Inspectors found a ‘torture table’ in the basement of his home. His prison sentence clearly will protect our children from this predator.”
“We continued to aggressively investigate, apprehend and assist in the prosecution of individuals who seek to exploit children via the U.S. Mail,” said Adam P. Behnen, Inspector in Charge, U.S. Postal Inspection Service, Denver Division. “It is imperative that we identify and prosecute these predators to stop the further exploitation of children.”
This case was investigated by the U.S. Postal Inspection Service.
Perian was prosecuted by Assistant U.S. Attorney Valeria Spencer.
This case was brought as part of Project Safe Childhood (PSC), 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, PSC 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 PSC, please visit http://www.justice.gov/psc/ For more information about Internet safety education, please visit http://www.justice.gov/psc/resources.html and click on the tab "resources."
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Defendant Sentenced to 216 Months for Methamphetamine Trafficking ConspiracyRead the Press Release
KANSAS CITY, KAN. - A defendant has been sentenced to 216 months in federal prison for his role in a methamphetamine trafficking organization that operated in the Kansas City metro area, U.S. Attorney Barry Grissom said today.
Juan Carlos Chirinos, 30, Independence, Mo., was sentenced Monday in U.S. District Court in Kansas City, Kan. Chirinos pleaded guilty to one count of conspiracy to distribute methamphetamine. In his plea, he admitted that in 2009 he his co-defendants sold methamphetamine to agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives who were working undercover.
Investigators bought methamphetamine from Chirinos and other conspirators in 2009 on May 27, June 25, July 2, July 16, July 28, Sept. 17 and Oct. 15.
Co-defendants include: Susan Friend, who was sentenced to 144 months.
Xavier Garza, who was sentenced to 75 months.
Russell Loomis, who was sentenced to 72 months.
Grissom commended the Bureau of Alcohol, Tobacco, Firearms and Explosives and Special Assistant U.S. Attorney Trent Krug for their work on the case.Chinese National Sentenced to 57 Months' Incarceration for Attempting to Illegally Export Aerospace-Grade Carbon FiberRead the Press Release
Earlier today at the federal courthouse in Brooklyn, New York, Ming Suan Zhang, a citizen of the People’s Republic of China, was sentenced today to 57 months’ incarceration for violating the International Emergency Economic Powers Act by attempting to export high-grade carbon fiber from the United States to China. Zhang attempted to negotiate a long-term contract for massive quantities of the controlled commodity, which he asserted was to be provided to a Chinese company involved in the development of a military aircraft. Zhang was arrested after traveling to the United States to meet with an undercover agent (“UC”) in an effort to obtain a sample of the specialized fiber, which has applications in the defense and aerospace industries and is therefore closely regulated by the United States Department of Commerce.
The sentence was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; John Carlin, Acting Assistant Attorney General for National Security; James T. Hayes, Jr., Special Agent-in-Charge, U.S. Immigration and Customs Enforcement, Homeland Security Investigations (HSI), New York; and Sidney Simon, Special Agent-in-Charge, U.S. Department of Commerce (DOC), Office of Export Enforcement, New York Field Office.
"The defendant brazenly disregarded U.S. law in an attempt to procure a highly sought after commodity and provide it to a foreign power," stated United States Attorney Lynch. "Foreign governments are willing to go to great lengths to acquire potentially dangerous materials such as specialized carbon fiber composites, which are of high value in the development of advanced weapons programs. We and our law enforcement partners will continue to use all of the tools in our arsenal to protect our technology and maintain the national security of the United States and its allies." Ms. Lynch expressed her grateful appreciation to the U.S. Immigration and Customs Enforcement, Homeland Security Investigations, New York, and the U.S. Department of Commerce, Office of Export Enforcement, New York Field Office, for their outstanding work in this investigation.
Zhang came to the attention of federal authorities last year after two Taiwanese buyers, acting on his behalf, attempted to procure several tons of specialized carbon fiber, including Toray type M60-JB-3000-50B (“M60”), via Internet marketplace forums. Zhang met with one of the buyers in mainland China and directed him to purchase a large quantity of high-grade carbon fiber, which Zhang intended to provide to a customer in China. The buyers searched for a source of the commodity and contacted the UC. The UC informed the buyers that he was willing to negotiate a deal, but that a license from the U.S. government was required to export the M60 from the United States.
When Zhang’s agents failed to obtain and deliver a sample of the carbon fiber, Zhang became personally involved in the scheme. He ultimately contacted the UC and stated that he had an urgent need for the carbon fiber. Zhang indicated that his customer, an executive at a prominent Chinese military company, was involved in the test flight of a “jet fighter plane.” In an email to the UC in August 2012, Zhang explained:
Hello! Please find time to send me an email or call me to explain the situation, because the customer over here is rushing me. . . . On the 5th, [he] is handling the site of a new fighter aircraft test flight. He will return between the 10th and the 20th of next month. That’s why he requested that be done this month. . . . Thank you for your cooperation!
Zhang then obtained a passport to travel to the United States for a meeting with the UC and take possession of a sample of M60 carbon fiber, which would be shipped to China and analyzed to verify its authenticity. Zhang’s plan was obtain a steady supply of the high-grade fiber for export to China, totaling thousands of pounds. However, Zhang was placed under arrest after he arrived at the meeting with the UC.
Certain types of carbon fiber, such as the type that the defendant sought to acquire in this case, are closely controlled for nuclear non-proliferation and anti-terrorism reasons because they can be used to make ballistic missiles, aircraft, and nuclear centrifuges, among other things. The regulation of carbon fiber falls under the jurisdiction of the Department of Commerce, which reviews and controls the export of certain goods and technology from the United States to foreign countries. In particular, the Commerce Department has placed restrictions on the export of goods and technology that it has determined could make a significant contribution to the military potential or nuclear proliferation of other nations, or that could be detrimental to the foreign policy or national security of the United States. High grade carbon fiber has applications in specialized technology, including aerospace and nuclear engineering. In addition, certain carbon fiber-based composites, such as the material sought by the defendant, can be used in military aircraft.
The sentencing proceeding was held before by the Hon. Nicholas G. Garaufis at the United States District Court in Brooklyn, New York. The government's case was prosecuted by Assistant United States Attorneys Seth DuCharme and David Sarratt, with assistance from Trial Attorney David Recker of the Department of Justice Counterespionage Section. Assistance was also provided by Trial Attorney Dan E. Stigall of the Department of Justice Office of International Affairs.
The Defendant:
MING SUAN ZHANG
Age: 42Carbon County Man Pleads Guilty to Federal Cocaine Trafficking ChargesRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced that a man from Carbon County pleaded guilty today before Senior United States District Judge Edwin M. Kosik to the charge of aiding and abetting the distribution of cocaine.
According to United States Attorney Peter J. Smith, Alexander Sommers, age 47, of Summit Hill, Carbon County, admitted to assisting others in distributing crack cocaine and powder cocaine in the Carbon County area between January 2011 and December 2012.
Previously, Victoria Argott, age 34, of Lansford, Carbon County, the former girlfriend of Sommers, was sentenced to 40 months in federal prison for participating in the same cocaine trafficking conspiracy.
The investigation was conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Nesquehoning and Lansford Police Departments in Carbon County.
The case is being prosecuted by Assistant United States Attorney Robert J. O’Hara.
In this particular case, the maximum penalty under the federal statute is 40 years’ imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
9 December 2013
Wichita Maintenance Technician Pleads Guilty to Stealing Equipment from EmployersRead the Press Release
WICHITA, KAN. – A Wichita maintenance technician has pleaded guilty to making more than $150,000 from selling equipment he stole from the companies where he worked, U.S. Attorney Barry Grissom said today.
Mark A. Lankford, 45, Wichita, Kan., pleaded guilty Monday in U.S. District Court in Wichita to two counts of wire fraud. In his plea, he admitted stealing equipment from two Wichita companies where he worked, Spirit Aerosystems and Fiber Glass Systems LP.Lankford was employed as an equipment maintenance technician for Spirit Aerosystems in Wichita from October 2010 to Sept. 5, 2011. During that time he stole computer parts from Spirit with a total value of more than $466,559. He used email to offer stolen parts for sale mainly to individuals in Owing Mills, Maryland. On April 25, 2011, he offered for sale an Allen Bradley model 1785-LT programmable controller, an Allen Bradley model 1771-DLC, an Allen Bradley model 1772-LXP, an Allen Bradley model 1772-TB2 and a Siemens model 6FC5303-OAB20-1AAO, all stolen from Spirit. Law enforcement officers recovered items worth approximately $454,435, leaving a remaining loss of more than $12,123.
From March 2008 to Oct 2010, Lankford worked as a maintenance mechanic for Fiber Glass Systems in Wichita. He stole computer parts from the company with a total value of more than $41,268. He offered stolen parts for sale on eBay including an Allen Bradley Controllogix Processor 7 slot system stolen from the company.
Lankford obtained a total of more than $154,824 from selling stolen parts.
Sentencing is set for Feb. 24. He faces a maximum penalty 20 years in federal prison and a fine up to $250,000 on each count.
Grissom commended the FBI and Assistant U.S. Attorney Jason Hart for their work on the case.
Waynesboro Chiropractor Pleads GuiltyRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania, announced that a Waynesboro, PA chiropractor has pleaded guilty to charges stemming from a bogus automobile accident personal injury claim.
According to United States Attorney Peter J. Smith, Lawrence S. Herman, age 47, a resident of Frederick, Maryland and the owner/operator of “Herman Chiropractic” in Waynesboro, PA, pleaded guilty to a one count Information charging him with False Statements in Health Care Matters. Herman entered his guilty plea today in United States District Court in Harrisburg before the Honorable Sylvia Rambo in Harrisburg. The plea was entered by Herman pursuant to a plea agreement with the government.
The charges stem from a claim Herman submitted to the USAA insurance company in May 2012 for injuries allegedly suffered in an August 16, 2011 automobile accident in Maryland. In May of 2012 Herman supported his claim with records indicating he was treated by a chiropractor for neck and back injuries between August 2011 and January 2012. When USAA did not immediately honor the claim, Herman hired a Baltimore area law firm to demand $60,000 from USAA for reimbursement of his chiropractic treatment expenses; and for pain and suffering.During the guilty plea hearing, Herman admitted the chiropractic treatment records were false and were created, at his direction, by a chiropractor who worked for him in his Waynesboro office. To conceal the fact the chiropractor was his employee, the fraudulent treatment records were submitted to USAA under a fictitious business letterhead created by Herman.
Assistant U.S. Attorney Kim Douglas Daniel stated during the hearing that Herman was not injured in the accident and in fact participated in several 5K, 10K, Half-Marathon and Marathon foot races during the period when Herman was supposedly being treated for his injuries in late 2011.
The case was investigated by the Harrisburg Office of the FBI and is being prosecuted by Assistant United States Attorney Kim Douglas Daniel.
A sentence following a finding of guilty is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
In this case, the maximum penalty under the federal statute is five years’ imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
Utah Resident Pleads Guilty to Filing False Claims for Tax Refunds Totaling $653,884Read the Press Release
Stanley J. Wardle, 65, of Spanish Fork, Utah, pleaded guilty today in the U.S. District Court in Salt Lake City to nine counts of filing false claims for income tax refunds, the Justice Department and Internal Revenue Service (IRS) announced. Wardle, who was indicted on Feb. 15, 2012, is scheduled to be sentenced before U.S. District Judge Dee Benson on Feb. 27, 2014.
According to the indictment, on or about Jan. 22, 2009, Wardle prepared and filed a false U.S. Individual Income Tax Return for the year 2008, in which he claimed a tax refund of $32,115. In addition, between Dec. 8, 2008 and May 13, 2009, he caused additional false claims for tax refunds to be made on behalf of others. In total, Wardle was involved in false claims for refunds totaling $653,884.
Wardle faces a statutory maximum sentence of five years in prison and a fine of up to $250,000 or twice the gross gain or loss caused by the defendant for each false claim charge.
Assistant Attorney General Kathryn Keneally for the department’s Tax Division commended the special agents of IRS - Criminal Investigation who investigated the case, and Tax Division Trial Attorneys Michael Romano and Stuart Wexler, who prosecuted the case.
U.S. Department of Labor Files Lawsuit Against St. James TearoomRead the Press Release
ALBUQUERQUE – The U.S. Department of Labor has filed a lawsuit against St. James Tearoom, Inc. and its owners, Mary Alice and Daniel Higbie, after an investigation by the Wage and Hour Division found that the defendants violated the Fair Labor Standards Act (FLSA). The lawsuit seeks to recover unpaid minimum wages, overtime, pay and liquidation damages totaling $304,000, as well as an injunction to permanently prohibit the defendants from committing future FLSA violations. The complaint was filed in the U.S. District Court for the District of New Mexico.
“When employers fail to pay the required minimum and overtime wages, it negatively impacts not just the workers and their families, but also other businesses and the community. Underpaying workers gives this business an unfair competitive edge against employers who abide by the law,” said Cynthia Watson, regional administrator for the division in the Southwest. “This lawsuit demonstrates that the department is fully committed to using all enforcement tools at its disposal to ensure that workers are paid all wages due under the laws we enforce.”
Investigators from the division’s Albuquerque District Office found that St. James Tearoom required that its dishwashers and serving staff join a tip pool, resulting in minimum wage violations. The mandatory tip pool included salaried managers, shift leaders, dishwashers, and other employees who are not eligible for tip pools, making the defendants’ entire tip pool arrangement invalid. Defendants also failed to keep accurate records of hours worked by employees, resulting in record-keeping violations.
Under the FLSA, the employer may consider tips as part of wages, but the employer must pay at least $2.13 per hour in direct wages. The employer who elects to use the tip credit provision must inform the employee in advance and must show that the employee receives at least the applicable minimum wage of $7.25 when direct wages and tip credit are combined. If an employee’s tips, combined with the employer’s direct wages of at least $2.13 an hour do not equal the minimum hourly wage, the employer must make up the difference. Employees must retain all their tips, except to the extent that they participate in a valid tip pool of sharing arrangement.
Colleen B. Nabhan of the Office of the Solicitor, U.S. Department of Labor, and Assistant U.S. Attorney Michael H. Hoses of the District of New Mexico are litigating the case on behalf of the Labor Department.
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Indictment
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U.S. Attorney Tackles Drug Dealing Around Schools in TenderloinRead the Press Release
SAN FRANCISCO – Ten individuals have been indicted by a federal grand jury on charges of drug trafficking within 1,000 feet of schools in San Francisco’s Tenderloin District, United States Attorney Melinda Haag and DEA Special Agent in Charge Jay Fitzpatrick, announced.
The ten individuals are:
- Alfred Craney, United States v. Craney, CR-13-0752-CRB
- Ivan Speed, United States v. Speed, CR-13-0753-EMC
- Latoya Jackson, United States v. Jackson, CR-13-0754-THE
- Angela Jones, United States v. Jones, CR-13-0755-RS
- Saquita Nash, United States v. Nash, CR-13-00757-THE
- Mellina Williams, United States v. Williams, CR-13-00758-WHO
- Shaneka Clay, United States v. Clay, CR-13-00759-RS
- Cassie Roberts, United States v. Roberts, CR-13-00760-CRB
- Jamesha Harris, United States v. Harris, CR-13-00761-CRB
- Lori Spiller, United States v. Spiller, CR-13-00768-WHO
According to the charging documents, the defendants are each charged in separate, one-count indictments alleging that they dealt cocaine base in the form of “crack” cocaine within 1,000 feet of elementary schools in the Tenderloin, in violation of 21 U.S.C. § 841(a)(1) and 860.
According to Haag, the cases are part of an ongoing relationship between her office, the U.S. Drug Enforcement Administration, the San Francisco Police Department, and the Tenderloin community. “There are thousands of children who live and go to school in the Tenderloin District,” commented United States Attorney Melinda Haag. “Those children deserve the same chance as children who live in other neighborhoods around San Francisco: the chance to go to and from school without having to navigate through crack deals on the way. That is why I have directed my office to work with the DEA and the San Francisco Police Department to aggressively prosecute drug trafficking in areas around Tenderloin schools.”
Haag stressed that more charges could be on the way. “Everyone who treats the Tenderloin as an open-air drug market should be on notice: law enforcement is paying attention. You won’t know when the next arrests will be, or which schools or street corners we’ll focus on next, but if you’re caught you will face significant time in federal custody.”
“DEA is committed to making San Francisco a safe place for the children and families who live here, and the citizens who work in or visit this great city. We are pleased to have partnered with the San Francisco Police Department and the US Attorney’s Office to bring Federal charges against these defendants. We hope these arrests send a clear message that we won’t tolerate drug trafficking in any of our neighborhoods,” said Jay Fitzpatrick, DEA Special Agent in Charge.
The ten defendants who have been indicted so far have all been arrested and arraigned in federal court in San Francisco, with the exception of Craney, who, according to prosecutors, is currently in state custody on unrelated charges.
The maximum statutory penalty for violating the federal drug-free school zone statute is 40 years in prison, with a minimum mandatory one year in jail, at least six years and up to life on supervised release, and a maximum fine of up to $2,000,000. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
The prosecutions are the result of multiple investigations by the San Francisco Police Department, the San Francisco Field Division of the U.S. Drug Enforcement Administration and the United States Attorney’s Office for the Northern District of California.
Please note, an indictment contains only allegations against an individual and, as in all cases, the defendants listed above must be presumed innocent unless and until proven guilty.
Sergeant First Class Enters Guilty Plea to Bribery and Theft SchemesRead the Press Release
GREENVILLE – United States Attorney Thomas G. Walker announced that today in federal court, JAMES EDWARD TRAVIS pled guilty before United States Magistrate Judge Kimberly A. Swank to a Criminal Information charging him with demanding, seeking, and accepting bribes, in violation of Title 18, United States Code, Sections 201(b)(2)(A) and (B), and to theft of government property in violation of Title 18, United States Code, Sections 641 and 2.
The case was investigated by the Defense Criminal Investigation Service, the Office of the Special Inspector General for Afghanistan Reconstruction, and the United States Army Criminal Investigation Command, and the Federal Bureau of Investigation. Assistant U.S. Attorney Banumathi Rangarajan handled the prosecution of this case on behalf of the Eastern District of North Carolina.
United States Attorney Walker reflected, “Public corruption such as this defendant’s criminal conduct undermines our nation’s reconstruction efforts overseas and dishonors the sacrifice our military makes every day.”
According to the Criminal Information filed on November 13, 2013, and information presented in open court, JAMES EDWARD TRAVIS was a Sergeant First Class in the United States Department of the Army assigned to the Operational Detachment-Bravo for Alpha Company, 4th Battalion, 3rd Special Forces Group for a wartime deployment to Afghanistan. Between January 3, 2012, and October 4, 2012, TRAVIS was deployed to Afghanistan, working out of Forward Operating Base Sharana. During his deployment, TRAVIS acted as both a paying agent and a contracting officer representative. As a contracting officer representative, TRAVIS was responsible for, among other things, approving completion of contracts and then approving payments. TRAVIS was also in charge of contracting for cargo vehicles or “jingle trucks” to move supplies and equipment as well as small construction projects. TRAVIS accepted kickbacks from various vendors on a “quid pro quo” basis for various contracts. The kickbacks ranged from $4,000 to $7,000 per contract. TRAVIS received approximately $211,890 in kickbacks.
In addition, TRAVIS, another U.S. soldier, and a local Afghan worked together to steal fuel from FOB Sharana in Afghanistan. On multiple occasions, TRAVIS paid the other soldier to escort an Afghan driver to the fuel point on FOB Sharana, to load fuel into the Afghan’s tanker truck, and to escort the driver with the stolen fuel back off FOB Sharana. Agents determined that 182,815 gallons of fuel were stolen. Based on an average price of $2.31/gallon for JP-8 fuel, the loss from the fuel theft scheme to the government is estimated at $422,302.65.
“Defense Criminal Investigative Service (DCIS) Special Agent in Charge John F. Khin, Southeast Field Office, commented, "It is disheartening when a military member abandons his code of conduct and violates a position of trust for personal enrichment. The DCIS investigates fraud and corruption that undermines the integrity of the Department of Defense. We continue to aggressively investigate violators to preserve precious American taxpayer dollars and better support our Warfighters serving honorably and selflessly in Southwest Asia."
“American servicemen and women face dangerous situations every day; their lives should not be put at risk by fellow soldiers working for their own profit. James Edward Travis stole thousands of dollars meant to support efforts in Afghanistan, but he could not hide his crimes from the FBI and our military partners dedicated to upholding justice,” said John Strong, Special Agent in Charge of the FBI in North Carolina.
“Theft of fuel in a war zone is serious. Not only does it rob US taxpayers and damage the reconstruction effort, stolen fuel can also wind up in the hands of insurgents bent on harming Americans. There must be zero tolerance for this kind of crime -- and SIGAR is dedicated to ensuring that anyone engaging in this activity will face justice,” commented Special Inspector General for Afghanistan Reconstruction John F. Spoko.Scott Arthur Parent Sentenced in U.S. District CourtRead the Press Release
The United States Attorney's Office announced that during a federal court session in Billings, on December 6, 2013, before U.S. District Judge Donald W. Molloy, SCOTT ARTHUR PARENT, a 54-year-old resident of Lincoln, was sentenced to a term of:
- ison: 30 months
- ecial Assessment: $100
- pervised Release: 5 years
PARENT was sentenced in connection with his guilty plea to failure to register as a sexual offender.
In an Offer of Proof filed by Assistant U.S. Attorney Timothy J. Racicot, the government stated it would have proved at trial the following:
In August 2011, the United States Marshals Service received information that PARENT was believed to have left the State of Oregon and had been residing in the Lincoln area.
In 1996, PARENT was convicted of attempted rape in the State of Oregon. PARENT was advised that he was required to register as a sexual offender.
Upon release from prison, PARENT registered as a sex offender in Oregon. As part of the sex offender registration process, PARENT acknowledged his requirement as a sex offender to notify the appropriate authorities of any change of address, including relocation out of state. PARENT last registered in Oregon in 2004, and had failed to register anywhere since that time. PARENT ultimately traveled to Montana in approximately 2010, where he resided in Lincoln. PARENT failed to notify the appropriate authorities in Montana upon arrival.
The Montana Sexual and Violent Offender Registry confirmed that PARENT did not register as required by law. PARENT was required to register under the Sexual Offender Registration and Notification Act due to his conviction in Oregon. The Montana Sexual and Violent Offender Registry confirmed that PARENT was currently out of compliance with Montana's Sexual Offender Registry requirements and had been so since entering Montana in approximately 2010.
Because there is no parole in the federal system, the truth in sentencing guidelines mandate that PARENT will likely serve all of the time imposed by the court. In the federal system, PARENT 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 United States Marshals Service.
Rochester Woman Sentenced to Federal Prison for Drug Trafficking and Firearms ChargesRead the Press Release
ROCHESTER, N.Y.-- U.S. Attorney William J. Hochul, Jr. announced today that Tina Holley, 36, of Rochester, NY, who previously plead guilty to conspiracy to possess crack cocaine with the intent to distribute it and possessing a firearm in furtherance of drug trafficking crimes, was sentenced to seven years in prison and three years’ supervised release by U.S. District Court Judge David G. Larimer. Holley was also ordered to pay a $3,367.00 fine and a $200 Special Penalty Assessment.
Assistant U.S. Attorneys Craig Gestring and Charles E. Moynihan, who handled the case, stated that Holley was arrested when members of the Greater Rochester Area Narcotics Enforcement Team executed two narcotics search warrants at 399 Lake Avenue on April 6, 2010. Upon entering the location, officers encountered and arrested the co-defendant, Warren Love, at the threshold of the rear first floor apartment. Holley was not there at the time.
In searching the rear first floor apartment, law enforcement officers located and seized over nineteen grams of crack cocaine which was in the process of being packaged for street level sale. Officers also located paraphernalia associated with drug trafficking, including digital scales and glassine zip lock bags. In addition to these items, law enforcement officers located and seized two bullet proof vests and two handguns, one of which was loaded with ten rounds of ammunition.
In searching the rear second floor apartment, officers also located a sophisticated surveillance system which showed the area outside of 399 Lake Avenue through the use of strategically mounted surveillance cameras. Officers located, in the same apartment, paraphernalia related to drug trafficking, as well as a loaded 40 caliber rifle which was underneath a sofa. Finally, officers found Holley’s daughter playing with Love’s son in the living room in which they found the loaded rifle.
Holley was arrested several months later in Madison, Wisconsin, after a United States grand jury had returned an indictment charging Holley and Love with drug trafficking and related firearms offenses.
These convictions in federal court resulted from an investigation on the part of the Greater Rochester Area Narcotics Enforcement Team composed of law enforcement personnel from the Bureau of Alcohol, Tobacco, Firearms and Explosives under the direction of Resident Agent in Charge Scott Heagney, the Rochester Police Department, under the direction of Chief James M. Sheppard and Irondequoit Police Department, under the direction of Richard Boyan.Pittsburgh Man Pleads Guilty in Scheme to Get Oxycodone Through Fraudulent PrescriptionsRead the Press Release
PITTSBURGH - A Pittsburgh man pleaded guilty in federal court to one charge of violating federal narcotic laws, United States Attorney David J. Hickton announced today.
Christopher Nugent, 34, pleaded guilty to one count before United States District Judge Arthur J. Schwab.
In connection with the guilty plea, the court was advised that Nugent conspired together with others, including Ryan Raithel and David Best, to obtain oxycodone by fraud, in that he passed a fraudulent oxycodone prescription at a pharmacy located in the Western District of Pennsylvania, thereby obtaining oxycodone pursuant to that fraudulent prescription. Ryan Raithel has pled guilty to conspiracy to distribute and possess with the intent to distribute oxycodone. David Best has pled not guilty to the charges against him.
Judge Schwab scheduled sentencing for May 13, 2014, at 10 a.m. The law provides for a total sentence of not more than four (4) years in prison, a fine of up to $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Eric S. Rosen is prosecuting this case on behalf of the government.
The Drug Enforcement Administration conducted the investigation that led to the prosecution of Christopher Nugent.
Patrick Fay McMullen Sentenced in U.S. District CourtRead the Press Release
The United States Attorney's Office announced that during a federal court session in Missoula, on December 4, 2013, before U.S. District Judge Donald W. Molloy, PATRICK FAY McMULLEN, a 31-year-old resident of McKinleyville, California, was sentenced to a term of:
- obation: 5 years, with 12 months house arrest
- ecial Assessment: $100
He was sentenced in connection with his guilty plea to conspiracy to possess with the intent to distribute marijuana.
In an Offer of Proof filed by Assistant U.S. Attorney Jessica T. Fehr, the government stated it would have proved at trial the following:
From the summer of 2008, until the summer of 2010, Joseph Chartraw organized and profited from a marijuana distribution network across Montana. Chartraw had numerous distributors and drug couriers in Montana. Chartraw's source of supply was identified by law enforcement as being in California. Chartraw used his cellular telephone to communicate with everyone in his distribution organization -- including his sources of supply in California.
Chartraw's first connection to a group of marijuana growers and distributors in California was Kirk Felhaber. Felhaber would bring together multiple growers at his home whenever Chartraw or one of his couriers would be arriving in California. Felhaber would have several individuals bring their marijuana to his home for redistribution to Chartraw or one of his couriers. McMULLEN, James Baltierra, Gregory Harris, and Henry Combs had several grow operations in Californian and were one of the sources of supply for Chartraw through Felhaber. Felhaber was the primary contact for the group and Chartraw until Felhaber refused to provide Chartraw with a title for a vehicle he had sold him. Felhaber then took a lesser role in the distribution-- he continued to participate -- just in a lesser degree.
At that point McMULLEN, Felhaber's grandson, took over the organization of deliveries to Chartraw's organization. McMULLEN was business partners with Baltierra. McMULLEN and Baltierra continued to distribute to Chartraw until the Summer of 2010 when Chartraw was arrested in Billings.
Evidence would have proven that more than 100 kilograms of marijuana was possessed by the conspiracy with the intent to distribute.
Chartraw, Harris, Combs, Felhaber, and Baltierra pled guilty to federal charges.
The investigation was conducted by the Federal Bureau of Investigation's Big Sky Safe Streets Task Force.
Parker Hunting Guide Pleads Guilty to Failing to File Income Tax Returns and Agrees to Pay $278,000 to the IRSRead the Press Release
DENVER – Richard K. Sears, age 65, of Parker, Colorado pled guilty before U.S. District Court Chief Judge Marcia S. Krieger today to three counts of failing to file tax returns with the Internal Revenue Service United States Attorney John Walsh and IRS Criminal Investigation Special Agent in Charge Stephen Boyd announced. Sears, who is free on a bond, is scheduled to be sentenced by Chief Judge Krieger on March 4, 2014. Sears was charged by an Information in Denver on April 10, 2013. IRS Special Agents and Investigators with the Colorado Parks and Wildlife executed a search warrant on Sears’ residence in July of 2010.
According to the facts contained in the Information as well as the stipulated facts contained in the plea agreement, from 2004 through 2009 Sears owned and operated several businesses including Apache Park Land & Cattle, Inc. ("APLC"), Trophy Outfitters, Inc. ("TO"), Private Land Bucks and Bulls, Inc. ("PLBB") and Apache Park Livestock, Inc. ("APL"). Sears hunting business operated in Colorado and New Mexico and he solicited customers to travel to these two states to hunt big game such as elk, deer, and bear. The cost of hunting packages ranged from approximately $2,000 to $10,000. His other business was a livestock business in Colorado.
During calendar years 2004 through 2009, Sear’s received significant gross income from his businesses for which he failed to file income tax return for as required by law. He earned at least the following amounts of gross income when in fact he knew he was required to file income tax returns for these years:
Tax Year
Gross Income
2004
$ 281,763
2005
$ 382,946
2006
$ 93,701
2007
$ 155,586
2008
$ 75,755
2009
$ 274,953
Furthermore, in July of 1997, Sears purchased property in Parker, Colorado for the purpose of building a home for him and his family. The property was purchased in the wife’s name in an attempt to hinder IRS collection efforts as he was aware of back taxes he owed. Particularly, the IRS assessed taxes against Sears several times during 1991 through 1993 and was unsuccessfully in collecting over $37,000 in taxes plus interest and penalties. The IRS had filed tax liens against Sears for money he owed. Once the tax liens expired in 2007, Sears executed a quit claim deed transferring ownership of the property into his name.
The total tax loss of $ 278,274 is attributable to Sears’ endeavors to frustrate IRS collection of back taxes due and owed for calendar years 1991-1993, and the tax loss from his failures to file income tax returns for years 2004-2009.
“As citizens, we all have an obligation to file our tax returns and pay any tax properly owing,” said U.S. Attorney John Walsh. “Ignoring and circumventing tax obligations only results in a kind of ‘double trouble:’ Not only will the tax bill eventually come due with interest and penalties, but there is also the possibility of jail time and a criminal conviction.”
“Income tax fraud is based on greed, individuals who commit tax fraud are merely stealing money and creating an unfair tax burden on honest tax paying citizens. These individuals believe they will not be caught but they will be caught and brought to justice,” said Stephen Boyd, Special Agent in Charge for IRS Criminal Investigation, Denver Field Office.
Willful failure to file a tax return with the IRS carries a penalty of not more than 1 year imprisonment, and up to a $100,000 fine, per count.This case was investigated by the Internal Revenue Service – Criminal Investigation with assistance from Colorado Parks and Wildlife, and US Fish and Wildlife Service.
This case is being prosecuted by Assistant U.S. Attorney Timothy Neff and Department of Justice Tax Division Trial Attorney Kevin Sweeney.
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Owner of Gourmet Food Markets Sentenced in Manhattan Federal Court to Five Years in Prison for Participating in Massive Tax Fraud Scheme That Concealed over $50 Million in Income from the IRS and for Witness TamperingRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that ADEM ARICI was sentenced today in Manhattan federal court by Chief United States District Judge Loretta A. Preska to five years in prison for his role in a long-running tax fraud conspiracy in which more than $50 million in gross receipts from six gourmet food markets in New York, New Jersey, and Connecticut was hidden from federal, state, and local tax authorities. ARICI was one of the leaders of the scheme and was one of the two of the nine defendants charged in the case with ownership interests in all six markets. ARICI pled guilty on June 4, 2013, before U.S. Magistrate Judge Paul E. Davison to one count of conspiracy to commit tax and fraud offenses, four counts of subscribing to false and fraudulent federal personal income tax returns, nine counts of aiding and assisting in the preparation of false and fraudulent federal corporate, partnership, and payroll tax returns, and one count of witness tampering in connection with a federal investigation of individuals engaging in prohibited transactions in which a Cuban national had an interest.
Manhattan U.S. Attorney Preet Bharara stated: “Those who cheat on their taxes impose an unfair burden on everyone else who dutifully pay their fair share. Adem Arici used the cover of his popular, gourmet markets to engage in tax and other fraud. Today, he learned the price he must pay for his crimes.”
According to the Indictment and statements made during court proceedings:
ARICI had an ownership interest and played an active management role in the following gourmet food markets (the “Markets”):
- Zeytuna, also known as Idaho Farmers Market, Inc., located at 59 Maiden Lane, New York, New York.
- The Amish Market, also known as Potato Farms LLC, located at 53 Park Place, New York, New York.
- Zeytinia Gourmet, also known as Forest Market LLC, located at 56 Maple Street, Croton-on-Hudson, New York.
- Zeytinia Fine Food Store, also known as Oakland Fine Food, Inc., located at 350 Ramapo Valley Road, Oakland, New Jersey.
- Zeytinia Fine Food Store, also known as Zeytinia LLC, located at 2801 Pacific Avenue – Units 203-204, Atlantic City, New Jersey.
- Zeytinia Gourmet Market, also known as Wilton Farms LLC, located at 14 Danbury Road – Suite 11, Wilton, Connecticut.
The Markets’ customers typically paid for their purchases with either cash or credit cards. Credit card payments, and on occasion a small portion of the cash receipts, were deposited into bank accounts maintained by each particular Market. The remaining cash was diverted from the books and records of the Markets. The owners of the Markets used this cash to pay business expenses, including cash payroll, as well as to line their own pockets. They paid numerous employees, including undocumented foreign citizens, in cash. The owners of the Markets failed to withhold and pay to the IRS the withheld payroll taxes, and caused the preparation and filing with the IRS of forms that falsely and fraudulently understated the true salaries paid to employees. In many cases, they failed to report the salaries of employees entirely.
The cash that was left over after paying business expenses was divided up among the owners of the Markets for their own personal uses. The owners of the Markets maintained a “second set of books” and other records that recorded the true income and expenses of the Markets and reflected the cash skimmed from each of the Markets. These books showed that the owners of the Markets failed to report in excess of $50 million in gross receipts during the years 2004 through 2009.
In addition to depriving federal, state, and local governments of approximately $5 million in corporate, payroll, and sales taxes, ARICI himself avoided paying over $1 million in personal income taxes.
With respect to the witness tampering count, on or about November 18, 2011, ARICI counseled an individual with whom he had traveled to Cuba unlawfully to falsely tell law enforcement agents with the Department of Homeland Security, among other things, that the individual did not travel to Cuba, did not know ARICI, and had not met with ARICI in Cuba.
In addition to the prison term imposed on ARICI, 51, of Easton, Connecticut, Chief Judge Preska ordered ARICI to forfeit $7 million and to serve three years of supervised release.
On September 12, 2013, co-defendant Jody Vitale was sentenced to time served followed by two years of supervised release, and ordered to forfeit $354,166. On October10, 2013, Josefina Caraballo was sentenced to one year of probation, and ordered to forfeit $41,331. Defendants Omer Ipek and Atilla Yayla are fugitives. All other defendants are awaiting sentencing.
Mr. Bharara praised the outstanding efforts of the Internal Revenue Service, Criminal Investigation, and the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations.
The case is being handled by the Office’s White Plains Division. Assistant U.S. Attorneys Lee Renzin and Perry A. Carbone are in charge of the prosecution.
The charges contained in the Indictment against the fugitive defendants remain pending and are merely accusations. Those defendants are presumed innocent unless and until proven guilty.
Osburn Pharmacist SentencedRead the Press Release
Ordered to Pay $75,594 in Restitution for Misappropriating Controlled Substances
COEUR D’ALENE — Steven R. Milot, 66, of Kellogg, Idaho, was sentenced to three years’ probation for wire fraud, U.S. Attorney Wendy J. Olson announced. U.S. District Judge Edward J. Lodge also ordered Milot to pay $75,594 in restitution and perform 100 hours of community service.
Milot was employed as a pharmacist at Osburn Drug in Kellogg for many years. In 2012, video surveillance recorded Milot misappropriating controlled substances. Idaho State Police executed a search warrant at Milot’s residence and found large quantities of various controlled substances that were not prescribed to him.
Milot pleaded guilty to the charge on August 20, 2013. In court, Milot admitted misappropriating controlled substances from Osburn Drug for three to four years and maintained that he personally used all of the controlled substances he took. A pill audit revealed that 1,817 Oxycodone IR five milligram tablets, 6,098 OxyContin forty milligram tablets, 580 sixty milligram OxyContin tablets, and 2,356 OxyContin eighty milligram tablets were missing, among others. Milot ordered the controlled substances via wire transmissions to avoid detection. Milot’s criminal activities caused restitution due and owing of $75,594 to Osburn Drug.
The case was investigated by the Idaho State Police, the Tactical Diversion Group of the Drug Enforcement Administration, and the Shoshone County Sheriff’s Office, with assistance from the Shoshone County Prosecutor’s Office.
Orange County Criminal Defense Attorney Sentenced to A Year in Prison in Federal Bribery CaseRead the Press Release
SANTA ANA, CALIFORNIA – An Orange County criminal defense attorney, who was convicted by a jury of executing a bribery scheme to obtain dismissal of a state criminal case against one of his clients, was sentenced today to 12 months and one day in federal prison.
Lawrence Anthony Witsoe, age 70, a resident of Mission Viejo, CA, was sentenced by United States District Judge Andrew J. Guilford. In September, Witsoe’s co-defendant, Aaron Scott Vigil, who was a police officer with the Rialto Police Department and a Task Force Officer with the U.S. Drug Enforcement Administration (“DEA”), was sentenced to 33 months in prison for his role in the bribery scheme.
In addition to his prison sentence, Witsoe’s license to practice law was suspended on August 12, 2013 as a result of his conviction in this case, according to State Bar records.
Earlier this year, a federal jury convicted both Witsoe and Vigil of conspiring to solicit a $2,500 bribe from one of Witsoe’s clients, who was charged with assault in a state criminal case, in exchange for having Officer Vigil falsely represent to the Orange County District Attorney’s Office that Witsoe’s client had been cooperating with Officer Vigil and the DEA in connection with drug investigations. In addition to the conspiracy count, Witsoe was also found guilty of two other counts, namely, soliciting the bribe payment from his client and offering and giving the bribe payment to Officer Vigil.
Release No. 13-143a
Omaha Man Sentenced for Wire Fraud and Weapons PossessionRead the Press Release
United States Attorney Deborah R. Gilg announced that Joshua Roth, age 37 of Omaha, Nebraska, was sentenced for wire fraud and being a felon in possession of a firearm. The Honorable Laurie Smith Camp sentenced Roth to twelve months and one day of incarceration to be followed by five years of supervised release. He was also ordered to pay restitution in the amount of $21,325.40.
Roth came into possession of a bank account number, user name and password of a First National Bank customer. He used that information to open a PayPal account in that customer’s name by representing himself to be that customer. Through that account, Roth was able to transfer money from the bank account to the PayPal account. He additionally used that information to purchase items from Ebay and had them shipped to his house. When officers served a search warrant at the house, they located some of the items ordered and also two firearms. Roth had previously been convicted of a felony offense and as such, is prohibited by law from possessing firearms.
The case was investigated by the United States Secret Service.
Ohio Woman Sentenced to Probation with Home Detention for Role in Marijuana Distribution SchemeRead the Press Release
JOHNSTOWN, Pa. - A resident of Hanoverton, Ohio, has been sentenced in federal court to five years of probation, the first 12 months of which must be served by conditions of home confinement, on her conviction of conspiracy to distribute and possess marijuana, United States Attorney David J. Hickton announced today.
United States District Judge Kim R. Gibson imposed the sentence on Bonnie L. Chapman, 63.
According to information presented to the court, from March 2009 to May 9, 2011, Chapman conspired with George M. Lowmaster to distribute and possess with the intent to distribute 100 kilograms or more of marijuana in order to facilitate and promote Lowmaster's drug distribution organization.
Assistant United States Attorney John J. Valkovci, Jr., prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the joint task force, headed by the Laurel Highlands Resident Agency of the Federal Bureau of Investigation, for the investigation leading to the successful prosecution of Chapman. Other agencies participating on the task force include the Internal Revenue Service- Criminal Investigation; Pennsylvania State Police; the Pennsylvania Attorney General's Office; the Cambria County District Attorney's Office; the Carrolltown Police Department; the Patton Police Department; the Ebensburg Police Department; the Portage Police Department and the Paint Township Police Department.
Northrop Grumman Corp. Pays $11.4 Million to Resolve Allegations That It Improperly Charged Costs to Government ContractsRead the Press Release
The Justice Department announced today that Northrop Grumman Corp. has paid the United States $11.4 million to settle a government claim for penalties provided under the Federal Acquisition Regulation (FAR) and False Claims Act allegations stemming from its failure to abide by a 2002 settlement agreement with the Defense Contract Management Agency (DCMA). The government alleged that Northrop charged to its federal contracts certain costs for deferred compensation awards to key employees, even though it had promised not to do so as part of the earlier 2002 settlement.
“Federal contractors must abide by the obligations they accept when contracting with the government, including compliance with federal regulations restricting the types and amount of costs they can charge to their federal contracts,” said Assistant Attorney General for the Department of Justice’s Civil Division Stuart F. Delery. “The Department of Justice is committed to enforcing these fundamental obligations using every available tool, including FAR penalties assessed under the contract and, where appropriate, fraud-based counterclaims.”
Northrop had agreed in its 2002 settlement with DCMA that it would limit the amount of deferred compensation it would include in proposals for subsequent contracts. The government’s contracting officer found that Northrop had failed to honor this commitment and should be assessed a penalty equal to twice the amount of the unallowable costs claimed. Northrop challenged the decision in a complaint filed in the U.S. Court of Federal Claims in Washington, D.C. The Department of Justice responded to the suit with counterclaims alleging that in addition to the FAR penalties, Northrop also had violated the False Claims Act by passing along these unallowable costs to the government in indirect rates applicable to hundreds of 2004 contracts with the government. The government alleged that as a consequence of Northrop’s knowing misrepresentations, it was induced to pay more than $1.9 million in unallowable costs in thousands of vouchers and invoices.The settlement was the result of a consolidated effort spearheaded by the Civil Division’s Commercial Litigation Branch in conjunction with the DCMA and the Defense Contract Audit Agency, Western Region Investigative Support Division. The claims settled by this agreement are allegations only, and there has been no determination of liability. The case is captioned Northrop Grumman Corporation v. United States, Fed. Cl. No. 07-482C.
North Idaho Man Sentenced for Conspiring to Distribute MethamphetamineRead the Press Release
COEUR D’ALENE — Anthony Jerald Brown, 29, of Coeur d’Alene, Idaho, was sentenced today on charges of conspiracy to possess with intent to distribute and distribution of methamphetamine, U.S. Attorney Wendy J. Olson announced. U.S. District Judge Edward J. Lodge sentenced Brown to 60 months in prison followed by three years of supervised release. As part of his sentence, Brown was ordered to forfeit $10,000 in illegal drug proceeds. During his community release, Brown will be required to report to a federal supervision officer and allow law enforcement to search his person, home and automobile upon demand. Brown will also be required to be employed or in school full-time and to report for drug testing.
Brown pleaded guilty to the charge on September 4, 2013. At the plea hearing, Brown admitted to buying and selling between 500 grams and 1.5 kilograms of methamphetamine from June 2011 until May 2012.
The case is the result of a joint investigation of the Organized Crime and Drug Enforcement Task Force (OCDETF), led by the North Idaho Violent Crime Task Force, a Federal Bureau of Investigation sponsored Safe Streets Task Force comprised of law enforcement from the Kootenai County Sheriff’s Office, Coeur d’Alene City Police Department, Post Falls Police Department, Idaho State Police, Bonner County Sheriff's Office, Shoshone County Sheriff's Office, and the Coeur d’Alene Tribe.
The OCDETF program is a federal multi agency, multi-jurisdictional task force that supplies supplemental federal funding to federal and state agencies involved in the identification, investigation, and prosecution of major drug trafficking organizations. Federal task force members include the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Drug Enforcement Administration, the Federal Bureau of Investigation, Internal Revenue Service-Criminal Investigation, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), and U.S. Marshals Service.
New York Man Sentenced to 136 Months’ Imprisonment for EscapeRead the Press Release
And Robbery Of Dunmore Bank
The United States Attorney’s Office for the Middle District of Pennsylvania announced that today Senior United States District Court Judge James M. Munley sentenced Romeal Price, age 36, of Brooklyn, New York, to 11 years and four months’ imprisonment for escape and bank robbery.
According to United States Attorney Peter J. Smith, Romeal Price appeared for sentencing today in Federal Court in Scranton following an earlier guilty plea wherein he admitted to bank robbery and escaping from the Catholic Social Services Residential Reentry Center on June 18, 2013.
At the time of his escape, Price was serving the remaining few months of a 15-year federal prison sentence from 2001. Ten days after his escape, he robbed the Pennstar Bank, in Dunmore, Pennsylvania, of approximately $11,000. Following the robbery, Price fled to New York City. On July 17, 2013, deputies from the United States Marshals Service arrested Price in a New York City apartment without incident.
In October 2013, Vanessa Ramos, age 23, pleaded guilty to aiding and abetting the bank robbery by acting as the getaway driver for Romeal Price. Ramos is awaiting sentencing.
The case was investigated by the United States Marshals Service, the Federal Bureau of Investigation, and the Dunmore Police Department. The case is being prosecuted by Assistant U.S. Attorney John Gurganus.
New Haven Man Sentenced to More Than 10 Years for Firearm Offense, Violating Supervised ReleaseRead the Press Release
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Deirdre M. Daly, Acting United States Attorney for the District of Connecticut, today announced that found TYRON HAMMOND, 31, of New Haven, was sentenced today by U.S. District Judge Janet C. Hall in New Haven to 126 months of imprisonment for illegally possessing a firearm, and for violating the conditions of his supervised releases from a previous federal conviction.
According to the evidence presented during a trial in August, on December 11, 2012, the U.S. Marshals Service Violent Fugitive Task Force, executing a state arrest warrant, arrested HAMMOND at an apartment on Chambers Street in New Haven. A subsequent court-authorized search of the apartment revealed a fully-loaded .22 caliber revolver with one expended casing.
The Connecticut Department of Emergency Services and Public Protection’s Forensic Science Laboratory determined that HAMMOND’s DNA was on both the firearm and the ammunition.
HAMMOND’s criminal history includes a 2004 federal conviction for possession of a firearm by a previously convicted felon. That conviction stemmed from an incident in November 2003 when HAMMOND shot and injured an individual with a .44 caliber revolver in the Farnam Court housing complex in New Haven. HAMMOND was also convicted in state court of first degree assault in relation to the shooting. In December 2004, HAMMOND was sentenced in U.S. District Court to 10 years of imprisonment, followed by three years of supervised release. He was released from federal prison in July 2012.
It is a violation of federal law for a person previously convicted of a felony offense to possess a firearm or ammunition that has moved in interstate or foreign commerce.
On August 28, 2013, a jury found HAMMOND guilty of possession of ammunition by a previously convicted felon. The ammunition was manufactured in Idaho, but the revolver was manufactured in Connecticut and could not be traced due to its age.
Judge Hall sentenced HAMMOND to 108 months of imprisonment for the illegal possession of ammunition, and a consecutive 18-month prison term for violating the terms and conditions of his supervised release from the 2004 conviction.
This matter was investigated Bureau of Alcohol, Tobacco, Firearms and Explosives, the U.S. Marshals Service Violent Fugitive Task Force, and the New Haven Police Department. This case was prosecuted by Assistant U.S. Attorney Anthony E. Kaplan.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722 [email protected]NOAA Special Agent Charles A. Raterman Honored by U.S. Attorney Alicia A.G. LimtiacoRead the Press Release
HAGATNA, GU – United States Attorney ALICIA A.G. LIMTIACO, United States Attorney for the Districts of Guam and the Northern Mariana Islands (NMI), presented a special award today to National Oceanic and Atmospheric Administration (NOAA) Special Agent Charles (Chuck) A. Raterman in recognition of his work to establish a Sea Turtle reward program for this region.
The poaching of sea turtles is prevalent on Guam. It is a challenge to prosecute such violators because they typically reside in the smaller villages on the southern part of Guam, where hunting and killing sea turtles is a source of increased status. A network of friends and relatives are often aware of their activities and they maintain a traditional code of silence as to the violators. This reward program was initiated to raise awareness of the effect of this poaching and to break that code of silence, encouraging citizens to come forward, even if it might involve persons within their social or village network.
This is NOAA’s first permanent reward program for turtles, known as “haggan” in the Chamorro language. Chuck created flyers urging people to be “Haggan Heroes,” posted them at mayors= offices, stores, charter dive shops and fish markets on Guam and Saipan. He has appeared at numerous Saturday public outreach events sponsored by law enforcement, as well as fishing derbies, career days and local festivals, radio and school appearances. He has enlisted the support of the Guam Department of Wildlife Resources, whose agents have assisted him in distributing more than 200 posters around this region.
To date, three individuals have qualified for this $1,000 reward by providing information that has led to the arrest and conviction of turtle poachers. We are hopeful that more people will come forward to help us put an end to this destructive poaching, so this species has a chance to recover.
See attached photos.
From left to right, First Assistant Steve Sinnott, Civil Chief Mikel Schwab, U.S.
Attorney Alicia Limtiaco, NOAA Special Agent Chuck Raterman and AUSA Karon Johnson.
NOAA Special Agent Chuck Raterman with the U.S. Attorney’s Staff for the District of Guam after being presented with a plaque and a turtle with the staff’s congratulatory remarks.Morgan County Judge-Executive and Owners of Salyersville-Based Bridge Contractor Indicted for Kickback Scheme, Fraud, and Money LaunderingRead the Press Release
LEXINGTON, KY - Timothy Alexander Conley, the Morgan County Judge Executive, has been charged with soliciting and accepting kickbacks from a Salyersville, KY., based bridge contractor, in exchange for contract awards, according to a federal indictment unsealed today.
The indictment, filed under seal on Thursday, December 5, charges Conley and Kenneth Lee Gambill and Ruth L. Gambill, the co-owners of PBTHNOJJ Construction, with several offenses arising from the kickback scheme. Conley and Kenneth Gambill are both charged with four counts of mail fraud and one count of theft from a program receiving federal funds. All three defendants are also charged with conspiring to launder money.
Specifically, the indictment alleges that, from early 2009 until August 2013, as part of a mail fraud scheme, Conley rigged competitive bidding processes to select PBTHNOJJ Construction for Morgan County construction contracts. After obtaining PBTHNOJJ Construction’s payments for these contracts, Kenneth Gambill then delivered to Conley cash kickbacks from the contract proceeds.
In addition, Conley and Kenneth Gambill are charged with defrauding a federally-funded program. The indictment alleges that Conley misappropriated money from Morgan County, which received federal funding for emergency services, debris cleanup, and rebuilding efforts following a tornado that swept through West Liberty, KY., on March 2, 2012. As part of the debris cleanup effort, Morgan County contracted with PBTHNOJJ Construction and other entities. Conley allegedly abused his position to ensure that PBTHNOJJ Construction received excessive payments for this work.
Finally, Conley, Kenneth Gambill, and Ruth Gambill are charged with conspiring to launder the proceeds of these crimes, in order to promote ongoing illegal activities and conceal the nature and source of the funds, among other things.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, Perrye Turner, Special Agent in Charge, FBI, and Jack Conway, Kentucky Attorney General jointly announced the indictment today.
The investigation preceding the indictment was conducted by the FBI and the Kentucky Attorney General’s Office. The indictment was presented to the grand jury by Assistant U.S. Attorney Andrew T. Boone.
Conley is scheduled to appear in federal court on Tuesday, December 10 in Lexington at 3:00 pm. Kenneth Gambill will appear in court on December 30, 2013 at 1:00. in Lexington. A date for Ruth Gambill to appear in court has not yet been scheduled. The mail fraud and money laundering counts each carry a maximum penalty of 20 years in prison. The federal program fraud count carries a maximum penalty of 10 years in prison. The maximum fine for each count is $250,000. However, any sentence following a conviction would be imposed by the Court after consideration of the U.S. Sentencing Guidelines and the federal statutes.
An indictment is an accusation only. A defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
Monroeville Man Was Part of Violent Heroin Trafficking ConspiracyRead the Press Release
PITTSBURGH - A Monroeville man pleaded guilty in federal court to federal firearms and drug trafficking charges, United States Attorney David J. Hickton announced today.
Antonio Hardin, 32, pleaded guilty to two counts before United States District Judge Cathy Bissoon.
In connection with the guilty plea, the Court was advised that from April 2012 to February 2013, Hardin conspired together with his charged co-defendants Brandon Thompson, James Walker, Richard Wood, Gregory Harris, Jr., Luther Harper and others to possess with the intent to distribute and distribute, heroin. Those co-defendants have pleaded not guilty and the charges are still pending against them.
Specifically, the Court learned, for example, that in April, 2012, Hardin received heroin from co-conspirator Brandon Thompson. Hardin then supplied this heroin to an uncharged co- conspirator who was later shot by Thompson and Edward Cook at Club Pink in Munhall, Pa., on or about August 12, 2012. Cook has pleaded guilty to this shooting, and he was sentenced to 12-years imprisonment. The Court also learned that Hardin, acting together with Brandon Thompson, James Walker, and Joseph Thompson, shared a heroin “stash house” with them in Pitcairn, Pa., at which these persons packaged raw heroin into stamp bags that would later be sold on to other dealers, and eventually to individual users. In addition, the Court learned that Hardin, over the course of the conspiracy, sold heroin to other charged distributors, including Richard Wood, Gregory Harris, Jr., and Luther Harper. The Court heard intercepts of a call in which Luther Harper and Bryce Harper discussed purchasing 25 brick quantities (40 gram quantities) of heroin from Hardin that the Harpers then planned to distribute to individual users.
Last, Hardin acknowledged that during his drug trafficking crimes he possessed a firearm, including a 9mm Glock, to protect himself and to protect his drugs. Specifically, Hardin carried a firearm during his drug trafficking crimes. As a result, Hardin possessed a firearm in furtherance of the abovementioned drug trafficking crimes.
Judge Bissoon scheduled sentencing for April 30, 2013. The law provides for a total sentence of up to life in prison, a fine of up to $5,250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Eric S. Rosen is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation, Bureau of Alcohol, Tobacco, Firearms, and Explosives, Pennsylvania Office of the Attorney General, City of Pittsburgh Bureau of Police, Pennsylvania State Police, Allegheny County Sheriff's Office, McKeesport Police Department, Munhall Police Department, and the West Homestead Police Department conducted the investigation that led to the prosecution of Antonio Hardin.
Manhattan Man Pleads GuiltyTo Being Accessory After the Fact in Fatal ArsonRead the Press Release
WICHITA, KAN. - A Manhattan, Kan., man has pleaded guilty to being an accessory after the fact in an arson that killed a Kansas State University researcher, U.S. Attorney Barry Grissom said today.
Gavin Taylor Hairgrove, 30, Manhattan, Kan., pleaded guilty Monday to one count of accessory after the fact in the Feb. 6, 2013, arson at the Lee Crest Apartments in Manhattan. Vansanta Pallem, who lived in the apartments, died as a result of inhaling gases from the fire.
In his plea, Hairgrove admitted that on Feb. 6, 2013, he was present when co-defendants Frank Joseph Hanson, Dennis James Denzien and Patrick Martin Scahill talked about what to do to keep the Riley County Police Department from searching an apartment where Scahill and Denzien lived. They were afraid that during a search police would find evidence that Denzien and Hanson had robbed Dara’s Fast Lane store in Manhattan on Feb. 5, 2013, and that the gun used in the robbery was owned by Scahill. They were also concerned that police would find narcotics in the apartment. The group talked about creating a diversion that would give Scahill time to re-enter the residence and remove the incriminating evidence.
Later that day, Scahill and co-defendant Virginia Griese drove to the Lee Crest Apartments in Manhattan, where Scahill poured gasoline in a hallway of the apartments and started a fire in an effort to create a diversion. Vasanta Pallem was killed in the fire.After setting the fire, Scahill and Griese made their way back to Griese’s apartment where Scahill cleaned up and removed his clothing because it smelled like gasoline. Hairgrove assisted Scahill in disposing of Scahill’s shoes, which reeked of gasoline. Hairgrove also provided Scahill with another pair of shoes to wear.
Sentencing is set for Feb. 24, 2014. He faces a maximum penalty of 15 years in federal prison and a fine up to $250,000.
Grissom commended all the investigators and law enforcement agencies that worked on the case, including the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Riley County Attorney=s Office, the Riley County Police Department, the Manhattan Fire Department, the Kansas State Fire Marshal=s Office, the Kansas Bureau of Investigations and the Pottawatomie County Sheriff=s Office, as well as Assistant U.S. Attorney Jared Maag, Special Assistant U.S. Attorney Barry Wilkerson and Special Assistant U.S. Attorney Barry Disney, who are prosecuting.
Man Sentenced to Five Years for Drug ConspiracyRead the Press Release
BUFFALO, N.Y. - U.S. Attorney William J. Hochul, Jr. announced today that Dale Lockwood, 61, of Buffalo, New York, was sentenced to 60 months in prison and 4 years supervised release by United States District Court Judge Richard J. Arcara. The sentence followed the defendant’s conviction for conspiracy to possess with intent to distribute 500 grams or more of cocaine, and was part of a larger, federal criminal investigation into the Afro-Dogs Motorcycle Club.
Assistant U.S. Attorney Thomas S. Duszkiewicz, who handled the case, stated that as part of their investigation, agents from the Drug Enforcement Administration intercepted the defendant and others engaging in narcotics-related conversations pursuant to a Court-ordered wiretap. On March 3, 2011, agents and officers discovered inside Lockwood’s home at 567 Lasalle Avenue, over $71,000 in US currency, eight firearms, ammunition, and drug scales. The overall Afro-Dogs investigation ultimately resulted in the indictment of 12 defendants, including Lockwood. During the course of the investigation agents purchased or seized in excess of 1100 grams of cocaine or cocaine base and recovered 11 other firearms.
Lockwood and five others charged in the case proceeded to trial in April of 2013. While the jury convicted the leader of the Afro Dogs, Dewey Taylor, of numerous narcotics related charges, the jury was unable to reach a verdict as to Lockwood. The defendant thereafter pleaded guilty to the narcotics charges giving rise to today’s sentence on August 5, 2013.
To date, nine defendants have been convicted in connection with the Afro Dogs investigation. In addition to the term of imprisonment, Lockwood must also forfeit an additional $50,000 and any interest he may have in the Afro-Dogs Clubhouse at 1093/1095 Genesee Street.
The conviction was the culmination of an investigation on the part of Special Agents of the Drug Enforcement Administration, under the direction of Special Agent in Charge Brian R. Crowell, law enforcement officers of the Buffalo Police Department, under the direction of Commissioner Daniel Derenda, Town of Tonawanda Police Department, under the direction of Chief Anthony J. Palombo, Lockport Police Department, under the direction of Chief Lawrence M. Eggert, along with Special Agents of the Bureau of Alcohol Tobacco and Firearms, under the direction of Resident Agent in Charge Frank Christiano.MS-13 Gang Leader Sentenced to Life in PrisonRead the Press Release
Earlier today at the federal courthouse in Central Islip, New York, Heriberto Martinez, also known as “Boxer,” the former leader of the Coronados clique of La Mara Salvatrucha, also known as the MS-13 street gang, was sentenced to life in prison. Martinez and co-defendant Carlos Ortega, also known as “Silencio,” were convicted, on March 21, 2013, following a six-week trial, on all 21 counts of the trial indictment, including racketeering, racketeering conspiracy, murder, assault with dangerous weapons, and related firearms and conspiracy offenses. Ortega was sentenced to life in prison on November 21, 2013.
The sentence was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office; and Thomas V. Dale, Commissioner of the Nassau County Police Department.
“Heriberto Martinez placed less value on human lives than he did on enforcing the barbaric rules of the MS-13, and, as a leader of the MS-13, making sure other gang members were doing the same. In keeping with those twisted rules, during a six-week period in early 2010, Martinez authorized the execution of a young mother, whom he believed had disrespected the gang, ordered the execution of a security guard for doing his job, and both advocated for and carried out the execution of a fellow MS-13 member who refused to commit senseless, violent crimes,” stated U.S. Attorney Lynch. “The jury’s verdict earlier this year and today’s sentence demonstrate that the brutal and senseless violence committed by Martinez and his fellow MS-13 members will not be tolerated and will be prosecuted tenaciously.” Ms. Lynch extended her grateful appreciation to the members of the FBI’s Long Island Gang Task Force and the New York City Police Department for their assistance in this case.
FBI Assistant Director-in-Charge Venizelos stated, “Martinez terrorized, victimized, and murdered members of our community in the name of MS-13. His violence and criminal activity knew no limits. Consistent with the recent sentences of other MS-13 gang members, today’s sentence of Martinez should send a clear message to all members of these violent enterprises: your actions will not be tolerated, no matter what group you hide behind. The FBI, along with our law enforcement partners, will continue efforts to rid the streets of these violent criminals and bring them to justice.”
At trial, the government proved that Martinez, along with his fellow MS-13 gang members, killed multiple victims between February and March of 2010:
(1) Martinez was convicted in connection with the execution-style murder of Vanessa Argueta, a 19-year-old woman, in Central Islip, New York, on February 5, 2010. Martinez also was convicted of being an accessory after-the-fact in the murder of Argueta and her 2-year-old son, Diego Torres, who was shot and killed during the same criminal incident. Martinez helped three of his co-conspirators evade arrest in New York and flee to El Salvador after the commission of the murders. The bodies of Argueta and Torres were found in a secluded wooded area in Central Islip. Argueta had been shot in the head and chest, and Torres had been shot twice in the head.
(2) Martinez also was convicted in connection with the execution-style murder of 23-year-old Nestor Moreno, a security guard at El Rancho Bar and Grill in Hempstead, New York, on March 6, 2010. In late February 2010, Heriberto Martinez and several other members of the MS-13 were involved in a dispute with El Rancho employees over an unpaid bar tab. The dispute escalated into a physical altercation during which Martinez was sprayed with pepper spray. Prior to leaving El Rancho, Martinez identified himself as an MS-13 member to the victim and told him, “It’s not going to end like this.” On March 6, 2010, Martinez, along with four co-conspirators, returned to El Rancho and carried out that threat, shooting Moreno in the head at point-blank range. The gun used to kill Moreno was the same semi-automatic handgun used to kill Argueta and her son one month earlier.
(3) Both Martinez and Ortega were convicted for the March 17, 2010, murder of Mario Alberto Canton Quijada in Far Rockaway, New York. Quijada, who was a fellow member of the MS-13, was killed because of his reluctance to “put in work,” or attack rival gang members on behalf of the MS-13. On March 17, 2010, Quijada was lured to the beach in Far Rockaway under the guise of attacking rival gang members. Once alone on the beach, the MS-13 gang members tried to shoot Quijada in the head with the same semi-automatic handgun used in the murders of Moreno, Argueta, and Argueta’s son. However, the gun jammed. Undeterred, Martinez, Ortega, and the other MS-13 members set upon Quijada with knifes and machetes and hacked him to death.
Martinez’s conviction is the latest in a series of federal prosecutions by the United States Attorney’s Office for the Eastern District of New York targeting members of the MS-13, a violent international street gang comprised primarily of immigrants from El Salvador, Honduras, and Guatemala. With numerous branches, or “cliques,” the MS-13 is the largest street gang on Long Island. Since 2002, more than 200 MS-13 members, including more than two dozen clique leaders, have been convicted on federal felony charges in the Eastern District of New York. More than 100 of those MS-13 members have been convicted on federal racketeering charges. Since 2010 alone, this Office has convicted more than 30 members of the MS-13 on charges relating to their participation in one or more murders. These prosecutions are the product of investigations led by the FBI’s Long Island Gang Task Force, comprising agents and officers of the FBI, Nassau County Police Department, Nassau County Sheriff’s Department, Suffolk County Probation, Suffolk County Sheriff’s Department, Rockville Centre Police Department, and Suffolk County Police Department.
The life sentence was imposed by United States District Judge Joseph F. Bianco.
The government’s case was prosecuted by Assistant United States Attorneys John J. Durham, Raymond A. Tierney, and Carrie N. Capwell.
The Defendant:
HERIBERTO MARTINEZ, also known as “Boxer”
Far Rockaway, New York
Age: 26Lockport Man Sentenced for Drug Conspiracy Charge and Buffalo Woman Sentenced for Money Laundering Conspiracy ChargeRead the Press Release
BUFFALO, N.Y.--U.S. Attorney William J. Hochul, Jr. announced today that Mark Robertson, 41, of Lockport, NY, was sentenced to 3 years supervised released with 6 months electronic monitoring, for his conviction for conspiracy to possess with intent to distribute, and to distribute, heroin. Danielle Barton, 31, formerly of League City, Texas, was sentenced to 9 months in prison, 1 year supervised release, and fined $5,000, for conspiracy to commit money laundering. Both sentences were imposed by Chief Judge William M. Skretny, United States District Court.
Assistant U.S. Attorney Mary Catherine Baumgarten, who handled the case, stated that the sentences imposed today were the result of an investigation into narcotics trafficking in Niagara County and the City of Buffalo conducted by the Drug Enforcement Administration and Niagara County Drug Taskforce. Robertson distributed heroin in the Lockport, New York area from July 2009 through August 2010, which was supplied to him by co-defendants Damian Ard and John Cruz. Barton, meanwhile, made cash deposits of approximately $131,000, which were proceeds of Will Johnson’s drug activities, into her bank account.
In total, investigators charged twenty-four defendants in connection with this investigation, twenty-two of whom have been convicted. The leader of the narcotics trafficking operation, Will Johnson, was sentenced to 10 years in prison on September 13, 2013.
This conviction is the culmination of an investigation by Special Agents of the United States Drug Enforcement Administration, under the direction of Brian R. Crowell, Special Agent in Charge, New York Field Division, and the Niagara County Sheriff’s Drug Task Force, under the direction of Sheriff James Votour.Kevin Scott Nessland Found Guilty in U.S. Federal CourtRead the Press Release
The United States Attorney's Office announced that on December 2, 2013, in Missoula, after a federal district court bench trial before Chief U.S. District Judge Dana L. Christensen held on November 27, 2013, KEVIN SCOTT NESSLAND, a 41-year-old resident of Bozeman, was found guilty of (3) counts of receipt of child pornography. Sentencing is set for March 6, 2014. He is currently detained.
At trial, the following evidence and testimony were presented.
On October 17, 2011, the Bozeman Police Department began a criminal investigation which involved the surreptitious visual observation of two victims in Bozeman. The suspect was NESSLAND.
When the investigation commenced, NESSLAND left the Bozeman area. When NESSLAND left Bozeman, he took some of his computers and equipment from his residence.
On October 18, 2011, NESSLAND spoke to a Bozeman Police detective by phone and the conversations were recorded. During one of the phone conversations, NESSLAND told the detective that he has sex addiction issues and was on his way to a treatment facility out of state. NESSLAND also indicated that he had a computer with him in his vehicle.
On October 18, 2011, the Bozeman Police Department obtained a search warrant for NESSLAND's residence and served the warrant the same day. Photographs of the residence were taken. Law enforcement seized several computers, electronic storage devices and other items. Law enforcement also determined that computers had been removed from the residence prior to the search. A warrant for NESSLAND's arrest was issued.
On November 7, 2011, NESSLAND was located by law enforcement in Idaho. Blackfoot Police officers responded to NESSLAND's vehicle. NESSLAND was located in his vehicle during a suicide attempt. Officers had to break the window of NESSLAND's vehicle, and he was transported from the scene via ambulance.
The contents of the vehicle were inventoried, which included computers, external storage devices and other items. After they learned of the Montana arrest warrant, Blackfoot Police advised the Bozeman Police Department of the items in their custody. The computer and other electronic devices were transferred to the Bozeman Police Department.
On November 7, 2011, a detective began an initial review of the computers, a camera, and storage devices. While the detective was looking for evidence of the crime of surreptitious visual observation/recordation and burglary, he found images of child pornography. All the computers and electronic devices were then sent to the Montana DCI Computer Crime Lab for forensic examination. This included the devices seized from NESSLAND's residence and vehicle.
A Certified Forensic Computer Examiner located more than 1,700 files which were visual depictions of minors engaged in sexually explicit conduct. The image files were located on multiple external storage devices, and were created between February 2007 and September 2010.
Assistant U.S. Attorney Cyndee L. Peterson prosecuted the case for the United States.
NESSLAND faces possible penalties of a mandatory minimum of 5 years in prison and could be sentenced to 20 years, a $250,000 fine, and lifetime supervision for each of the (3) counts.
The investigation was a cooperative effort between the Montana Internet Crimes Against Children Task Force (ICAC), the Bozeman Police Department, the Montana Department of Criminal Investigation, and the Idaho Blackfoot City Police Department.
KC Company Pleads Guilty to Illegally Transporting Hazardous WasteRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Kansas City, Mo., company pleaded guilty in federal court today to illegally transporting hazardous waste.
Z-Group, LLC, is a Kansas company registered to do business in Missouri. Company president Friedrich-Wilhelm Zschietzschmann represented the company in court today to plead guilty before U.S. District Judge Brian C. Wimes to illegally transporting hazardous waste.
Zschietzschmann was also the president and CEO of Z-International, Inc., which specialized in the labeling industry. Z-International used large quantities of ink and ink-related products in its business, making labels for numerous companies all over the world. Z-International was located at 110 East 16th Street, Kansas City, Mo. Z-Group was established in 2001 by Zschietzschmann to serve as owner of real estate where Z-International operated its business.
Z-International was closed by Zschietzschmann in July 2010. Any assets or fixtures remaining on the property after the business closed were sold or otherwise disposed of by a Z-International employee.
Between July 2010 and April 2012, the company authorized personnel to hire others to transport hazardous waste to a separate location. Z-International employees authorized the transportation of 23 containers of varying sizes that contained liquid hazardous waste to Studer Container Service, 520 Madison Ave., Kansas City, Mo. Studer did not have a permit to receive hazardous waste.
In April 2012, Environmental Protection Agency officials conducted a compliance inspection at Studer. During the inspection, EPA inspectors found several containers of what appeared to be hazardous materials.
On June 28, 2012, EPA began its sampling and clean-up operation. On Dec. 21, 2012, the EPA National Enforcement Investigations Center provided analytical results for 38 samples collected from the containers dumped at Studer. Five of the samples tested positive for ignitability and two of the samples tested positive for toxicity.
The EPA Superfund Program cleaned up the hazardous waste at Studer to eliminate possible adverse effects on human health and environment. The total EPA Superfund cost was $36,871.
Under the terms of today’s plea agreement, Z-Group must pay a $50,000 fine and $36,871 in restitution, for a total payment of $86,871. The company is also subject to up to five years of probation. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Jane Pansing Brown. It was investigated by the Environmental Protection Agency, Criminal Investigation Division.Jose Morales Sentenced to Life in Prison for Murdering A Witness in A Baltimore City CaseRead the Press Release
Prosecution of Morales Resulted in the Exoneration of Demetrius Smith for a Crime He Didn’t Commit
Greenbelt, Maryland – U.S. District Judge Roger W. Titus sentenced Jose Joaquin Morales, age 37, of Baltimore, Maryland, today to life in prison for using a cell phone to arrange the murder-for-hire of Robert Long, who was a cooperating witness in a case pending against Morales in the Circuit Court for Baltimore City. Morales is currently serving two consecutive 262 month sentences for drug convictions in Maryland and Texas.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Assistant Special Agent in Charge Gary Tuggle of the Drug Enforcement Administration, Baltimore District Office; and Colonel Michael Kundrat, Chief of the Maryland Transportation Authority Police.
“Thanks to outstanding law enforcement work, Jose Morales will spend the rest of his life in federal prison for murder, and a wrongly convicted man was exonerated,” said U.S. Attorney J. Rosenstein.
“Today’s sentencing of Jose Morales not only closes the book on a career offender, it slams shut the prison cell door,” stated Gary Tuggle, Assistant Special Agent in Charge of the Drug Enforcement Administration, Baltimore District Office. “This case as well as the prior drug case against Morales strongly illustrates DEA’s commitment to target career offenders. Due to the combined efforts of law enforcement agencies along with the United States Attorney’s Office, Morales will never see the light of freedom again.”
According to evidence presented at his two week trial, Long and Morales were co-defendants in a series of theft cases in Baltimore City Circuit Court. Long had agreed to testify against Morales less than two weeks before he was shot. Detectives used Long’s information to obtain a search warrant at Morales’ home and seized a large amount of stolen construction equipment. Six days later, on March 24, 2008, Long was dead. Witnesses testified that Morales ordered the murder to prevent Long, who was also an employee of Morales, from testifying against him.
The jury learned that three weeks after the murder, Morales confessed to his attorney, Stanley Needleman, that he paid Dead Men Inc. (DMI), a prison and street gang, $20,000 to kill Long. Needleman testified that he had learned that Long was cooperating against Morales and reported that fact to Morales on March 20, 2008. Long was last seen about 15 minutes before his murder walking with a DMI member.
Trial evidence was presented that Morales was arrested on unrelated drug trafficking charges I August 2008 in Texas. He was convicted and sentenced to 22 years in prison. At the time of his arrest, he purported to cooperate against Needleman, advising federal agents that Needleman was involved in drug trafficking and that Needleman told Morales that he (Needleman) “took care” of Morales’ co-defendant by having him killed by DMI. Needleman testified that he did not learn about the cooperation until Needleman was the subject of an April 2011 federal search warrant that yielded over $1.2 million dollars in unreported cash in his home. Needleman subsequently pled guilty in September 2011 and agreed to testify, and did testify, against Morales.
The jury also heard testimony that Morales learned in 2011 that federal authorities were investigating Long’s murder. In order to convince federal agents in Maryland to proffer him in order to reduce his Texas sentence, Morales stated that a DMI member and the member’s brother shot Long in the head twice. Morales also made incriminating statements about his knowledge and involvement in the murder to two other inmates who also testified at trial.
Stanley Needleman, age 71, of Pikesville, Maryland, pleaded guilty to tax evasion and structuring financial transactions to avoid reporting large cash receipts and deposits. Needleman was sentenced on December 15, 2011 to a year and day.
The prosecution of Morales resulted in the exoneration of Demetrius Smith, who was serving life in state prison for the murder -- a crime he did not commit.
United States Attorney Rod J. Rosenstein commended the DEA and Maryland Transportation Authority Police for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys Sandra Wilkinson and Martin J. Clarke, who prosecuted this Organized Crime Drug Enforcement Task Force case.
Joaquin F. Taitano Sentenced in U.S. District CourtRead the Press Release
United States Attorney ALICIA A.G. LIMTIACO, U.S. Attorney for the Districts of Guam and the Northern Mariana Islands (NMI), announced that Defendant JOAQUIN TAITANO, age 35, from Yigo, was sentenced on December 6, 2013, in the District Court of Guam, to 30 months incarceration, three years supervised release, and 100 hours community service for Conspiracy to Distribute less than five grams of methamphetamine. TAITANO was charged in an indictment on April 27, 2013, with Possession of Methamphetamine with Intent to Distribute, in violation of Title 21, U.S.C. § 841(a)(1). He pled guilty on June 28, 2011.
The investigation was conducted by Task Force Agents from the Superior Court’s probation office assigned to the Drug Enforcement Administration. The case was handled by Assistant U.S. Attorney Clyde Lemons.Jefferson Davis County Man Sentenced to Ten Years in Prison on Federal Gun ChargesRead the Press Release
Hattiesburg, Miss - On Friday, December 6, 2013, Dennis Earl Smith, Jr. was sentenced by U.S. District Judge Keith Starrett to the maximum penalty of 120 months in federal prison followed by three years of supervised release for possession of a firearm by a convicted felon, announced U.S. Attorney Gregory K. Davis and Phillip Durham, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives. Smith was also ordered to pay a $3,000 fine.
This case was the result of an investigation by the Lamar County Sheriff’s Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives. It was prosecuted by Assistant U.S. Attorney Annette Williams.###
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
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Jackson Man Pleads Guilty to Federal Civil Rights Charge of Desecrating Religious ParaphernaliaRead the Press Release
Jackson, TN – Justin Shawn Baker, 25, of Jackson, TN, pleaded guilty today to violating the civil rights of students and faculty of the Margolin Hebrew Academy by defacing a Torah and religious prayer books, announced U.S. Attorney Edward L. Stanton III.
According to information contained in the indictment and facts revealed during today’s plea hearing, on or about January 12, 2013, students and faculty of the Margolin Hebrew Academy were staying overnight at the Doubletree Hotel in Jackson en route to Gatlinburg, TN. While there, they used a meeting room at the hotel to conduct a Sabbath worship service. A Torah, religious books, and musical instruments were left in the meeting room overnight with the intention of continuing worship services on the following morning.
The facts presented today further revealed Baker admitted that while employed as a security guard at the hotel, he discovered the items in the room, and defaced the Torah, the prayer books, and the musical instruments with profanity, anti-Semitic phrases, and Satanic writing. He also admitted to spitting on the Torah. Photographic evidence presented during the hearing confirmed that the Torah was defaced with profanity and phrases including “Hail Satan.”
“Freedom of religion and the freedom to practice it without harassment are bedrock principles upon which our nation was founded,” said U.S. Attorney Stanton. “Baker’s offensive acts represent an attack upon the rights and freedoms enjoyed by every citizen, which generations of Americans fought and died to ensure and protect.”
This case was investigated by the FBI, and is being prosecuted by Executive Assistant U.S. Attorney Larry Laurenzi and Trial Attorney Douglas Kern of the Civil Rights Division’s Criminal Section.Hogsett Announces Sentencing of Australian Man in Prosecution of International Child Exploitation ConspiracyRead the Press Release
INDIANAPOLIS – Joseph H. Hogsett, the United States Attorney, announced this morning the sentencing of an Australian man who exploited a young boy in a scheme that stretched across three continents. Peter Truong, age 36, an Australian citizen, along with previously-sentenced defendant Mark J. Newton, age 42, an American citizen living in Australia, orchestrated the abuse of the young child at the hands of a number of other men around the world. In a hearing before U.S. District Judge Sarah Evans Barker, Truong was sentenced to 30 years in prison.
“This young child endured a nightmare that stretched over one year and three continents, including some of the most heinous acts of exploitation that this office has ever seen,” Hogsett said. “Through the tireless work of our Project Safe Childhood team, this child has been rescued and these men are facing what amounts to effective life sentences.”
Newton and Truong, who were living in Queensland, Australia, were the legal parents of a boy (“Victim 1”) who was five to six years of age during the events described in the federal charges. Between 2010 and 2011, Newton and Truong traveled to the United States, and elsewhere, with Victim 1 to meet with other men, allegedly including John R. Powell, age 41, a resident of Florida, and Jason Bettuo, age 36, a resident of Illinois, so that these persons could use high definition digital cameras to record the sexual abuse of Victim 1.
These instances allegedly included a September 2010 meeting with Powell, in which Newton and Truong allowed him to engage in sexual conduct with Victim 1 and produce child pornography of the encounter. In April 2011, they traveled with Victim 1 to San Francisco, at which time Powell and Bettuo allegedly engaged in sexual conduct with the child and produced additional child pornography.
On one occasion, Newton and Truong allowed a man, allegedly Powell, to travel to Australia and visit them at their home. During this visit, Powell was given access to Victim 1 and would allegedly sexually exploit the child and create child pornography. Court documents also indicate that Newton and Truong traveled to France for a “vacation” on at least one occasion, inviting Powell to meet with them who then engaged in sexual conduct with Victim 1, which was again video recorded. The child pornography was then brought back to the United States.
Over the course of this scheme to sexually exploit Victim 1, Newton and Truong were also found to have engaged in a conspiracy to transport the child pornography produced during these encounters to individuals around the world, including individuals in Anderson, Indiana, and Arlington, Virginia. Powell is also alleged to have participated in this scheme. It was this trafficking of materials that alerted United States Postal Inspectors and Indiana investigators to the case, launching the two year investigation of Newton, Truong, Powell, Bettuo, and others.
This case is the result of the investigative efforts of the United States Postal Inspection Service to target individuals who use the US Mail and the Internet to sexually exploit children. They were assisted locally by the Indiana Internet Crimes Against Children Task Force, and received significant help from the Queensland Police Service, Task Force Argos in Australia.
According to Senior Litigation Counsel Steven D. DeBrota and Assistant U.S. Attorney A. Brant Cook, who along with the Criminal Division’s Child Exploitation and Obscenity Section Trial Attorney Michael Grant are prosecuting these cases for the government, Truong was also sentenced to 10 years of federally-supervised release. Prosecutors said that defendant Bettuo has filed a petition in federal court expressing his intent to enter a plea of guilty, and Powell’s case is still pending as he awaits trial.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Hogsett pointed out that in the last Project Safe Childhood reporting year, the U.S. Attorney’s Office prosecuted 52 defendants in Indiana, an increase of 37% over the prior year, and 49 defendants were convicted and sentenced.
The greatest measure of the PSC program’s impact, however, is the identification and rescue of child victims of sexual exploitation and abuse. Over the last year, the U.S. Attorney’s Office successfully identified more than 120 child victims, including minors in Indiana, numerous places in the United States, Canada, Switzerland, and other countries around the world.
Led nationally 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 better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
An Information or Indictment is only a charge and is not evidence of guilt. A defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
Government Intervenes in False Claims Lawsuit Against Ipc the Hospitalist Co. Inc. Alleging Overbilling of Physician ServicesRead the Press Release
The government has intervened in a lawsuit against IPC The Hospitalist Co. Inc., and its subsidiaries (IPC), alleging that IPC submitted false claims to federal health care programs, the Justice Department announced today. IPC, based in North Hollywood, Calif., is one of the largest providers of hospitalist services in the United States, employing physicians and other health care providers who work in more than 1,300 facilities in 28 states. Hospitalists are physicians who work only in hospitals and other long-term care facilities, overseeing and coordinating inpatient care from admission to discharge.
The lawsuit alleges that IPC physicians sought payment for higher and more expensive levels of medical service than were actually performed – a practice commonly referred to as “upcoding.” Specifically, the lawsuit alleges that IPC encouraged its physicians to bill at the highest levels regardless of the level of service provided, trained physicians to use higher level codes and encouraged physicians with lower billing levels to “catch up” to their peers.
“We continue to be vigilant in our enforcement efforts to ensure that health care programs funded by the taxpayers pay only for appropriate costs,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery.
The lawsuit was filed by Dr. Bijan Oughatiyan, a former IPC physician, under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private parties to sue for false claims on behalf of the government and to share in any recovery. The Act also allows the government to intervene or take over the lawsuit, as it has done in this case, and to recover three times its damages plus civil penalties. The government has asked the U.S. District Court in Chicago for 120 days to file its own complaint stating its allegations.
This intervention illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by Attorney General Eric Holder and Health and Human Services Secretary Kathleen Sebelius. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $17 billion through False Claims Act cases, with more than $12.2 billion of that amount recovered in cases involving fraud against federal health care programs.
The case was investigated by the Commercial Litigation Branch, Civil Division, U.S. Department of Justice and the U.S. Attorney’s Office for the Northern District of Illinois, with assistance from the Department of Health and Human Services Office of Inspector General.
The case is captioned United States ex rel. Oughatiyan v. IPC The Hospitalist Company Inc., et al., Civ. No. 09 C 5418 (N.D. Ill.). The claims asserted against IPC are allegations only; there has been no determination of liability.Government Intervenes in False Claims Lawsuit Against IPC the Hospitalist Company, Alleging Overbilling of Physician ServicesRead the Press Release
CHICAGO ― The United States has intervened in a civil lawsuit against Californiabased IPC The Hospitalist Company, Inc., and its subsidiaries (IPC), alleging that IPC submitted false claims to federal health care programs, the U.S. Attorney’s Office and the Justice Department announced today. The lawsuit, which was unsealed Friday in U.S. District Court in Chicago, alleges that IPC violated state and federal False Claims Acts by knowingly engaging in systematic overbilling for hospital evaluation and management services billed to Medicare, Medicaid, and other federal health benefit programs.
IPC, based in North Hollywood, Calif., is one of the largest providers of hospitalist services in the United States, employing physicians and other health care providers who work in more than 1,300 facilities in 28 states. Hospitalists are physicians who work only in hospitals and other long-term care facilities, overseeing and coordinating inpatient care for patients from admission to discharge.
The lawsuit alleges that IPC physicians sought payment for higher and more expensive levels of medical service than were actually performed ― a practice commonly referred to as “upcoding.” Specifically, the lawsuit alleges that IPC encouraged its physicians to bill at the highest levels regardless of the level of service provided, trained physicians to use higher level codes and encouraged physicians with lower billing levels to “catch up” to their peers.
“We continue to be vigilant in our enforcement efforts to ensure that health care programs funded by the taxpayers pay only for appropriate costs,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery.
The lawsuit was filed under seal in 2009 by Dr. Bijan Oughatiyan, of Dallas, who worked as a hospitalist for IPC in San Antonio from 2003 to 2008, under the qui tam or whistleblower provisions of the False Claims Act. The federal law and similar state statutes permit private individuals to sue for false claims on behalf of the government and to share in any recovery. The Act also allows the government to intervene or take over the lawsuit, as it has done in this case, and to recover three times its damages plus civil penalties ranging from $5,500 to $11,000 for each false claim submitted.
The government investigated Dr. Oughatiyan’s allegations and filed a notice of intervention, asking at the same time that the complaint be unsealed. Chief U.S. District Judge Ruben Castillo last week ordered the case unsealed and granted the government’s request for 120 days to file its own complaint against IPC and related defendants, announced Zachary T. Fardon, United States Attorney for the Northern District of Illinois.
According to Dr. Oughatiyan’s 2009 complaint, more than half of IPC’s revenues ― more than $125 million in 2008 alone ― came from government medical insurers, including Medicare and Medicaid. “IPC’s upcoding scheme has caused those Government health insurers to overpay millions of dollars to IPC, and has adversely impacted patient care,” the suit states.
The lawsuit alleges that IPC directed and encouraged its physicians to engage in systematic overbilling of the codes submitted to Medicare, Medicaid, and other health benefit programs for evaluation and management procedures such as admission, subsequent hospital visits, and discharge of patients. Based on IPC=s regular and detailed monitoring of the codes billed by individual physicians, the lawsuit alleges that IPC was aware that its physicians were using the highest level billing codes (those which require the most work and are reimbursed at the highest amounts) at rates far in excess of what would normally be expected. It further alleges that IPC knew and/or should have known that its physicians could not have actually been performing the services at the levels for which claims were submitted.
This intervention illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by Attorney General Eric Holder and Health and Human Services Secretary Kathleen Sebelius. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $17 billion through False Claims Act cases, with more than $12.2 billion of that amount recovered in cases involving fraud against federal health care programs.
The matter is being jointly handled by the U.S. Attorney’s Office for the Northern District of Illinois and the Civil Frauds Section of the Commercial Litigation Branch of the Justice Department’s Civil Division, with assistance from the U.S. Department of Health and Human Service’s Office of Inspection General, the Office of Personal Management’s Office of Inspector General, and the Railroad Retirement Board’s Office of Inspector General. The government is being represented by Assistant U.S. Attorney Eric Pruitt and DOJ Senior Trial Counsel Elizabeth Rinaldo.
The case is captioned United States ex rel. Oughatiyan v. IPC The Hospitalist Company, Inc., et al., No. 09 C 5418 (N.D. Ill.). The claims asserted against IPC are allegations only, and there has been no determination of liability. In a civil case, the government has the burden of proving the allegations by a preponderance of the evidence.
Glendale Man Who Admitted Hacking into Hundreds of Computers in ‘Sextortion’ Case Sentenced to Five Years in Federal PrisonRead the Press Release
LOS ANGELES – A Glendale man who hacked into hundreds of online accounts and victims’ computers, using extortion to coerce women into showing their naked bodies, was sentenced today to 60 months in federal prison.
Karen “Gary” Kazaryan, 27, was sentenced by United States District Judge George H. King, who said the defendant was a “cyber-terrorist.” Judge King remanded Kazaryan into custody at the conclusion of the sentencing hearing.
Kazaryan pleaded guilty in July to felony counts of computer hacking and aggravated identity theft.
In sentencing papers that recommended a six-year prison term, prosecutors wrote: “Kazaryan is a sexual cyber terrorist. He hacked into hundreds of victims’ email, Facebook, and Skype accounts using their usernames and passwords or password reset questions. He then methodically searched their accounts for naked pictures, passwords, and the contact information of their friends. He had two goals every time that he accessed these accounts: get more naked pictures in any way he could, and get more victims.”
According to court documents, Kazaryan gained unauthorized access to – meaning he hacked into – online accounts. In some cases, he obtained naked pictures from those accounts and then extorted the victims to provide additional photos and videos. If they refused, he posted the original pictures on the Internet. In other cases, Kazaryan posed as young women and asked their friends to provide naked photos.
“His victims were devastated and felt like they had been raped,” according to the sentencing memorandum. “They continue to be thoroughly traumatized by his criminal conduct.”
The investigation was conducted by the Federal Bureau of Investigation.
“Sextortion” is a type of extortion or blackmail of a victim who is usually asked for a nude image. The perpetrator typically threatens to publicly release a nude image unless a victim performs a sexual act or complies with other demands. To avoid become a victim, everyone should be prudent when posting images online or to any wireless communication (computer, phone, tablet), especially if the images have private or compromising content. Victims who receive extortionate threats or whose personal accounts have been compromised are urged to contact a parent, trusted adult or law enforcement, since the situation will only worsen. As always, computer users are warned to ensure their passwords are difficult for others to guess, avoid opening unverified attachments, and use reliable anti-virus software with updated definitions. Lastly, computer users should cover their webcam when it’s not in use.
Release No. 13-142
Gary City Councilman Charged by InformationRead the Press Release
Hammond, Indiana - United States Attorney David Capp announced the filing of a two count Information against Gary City Councilman Ronier Scott. Scott, 42, of Gary, was charged with willfully failing to file income tax returns for the 2008 and 2009 calendar years.Scott signed a plea agreement that was filed in conjunction with the Information.
These charges were filed as a result of an investigation by the Internal Revenue Service.This case is being prosecuted by Assistant United States Attorneys Gary Bell.
The United States Attorney's Office emphasized that an Information is merely an allegation and that all persons charged are presumed innocent until and unless proven guilty in court.
If convicted in court, any specific sentence to be imposed will be determined by the judge after a consideration of federal sentencing statutes and the Federal Sentencing Guidelines.
Gang Member Sentenced in Dodge City Racketeering CaseRead the Press Release
WICHITA, KAN. B A Dodge City gang member has been sentenced to 10 years on a conspiracy charge in a federal racketeering case, U.S. Attorney Barry Grissom said today.
Eusebio Sierra-Medrano, 33, Dodge City, Kan., was sentenced Monday in U.S. District Court in Wichita. He had pleaded guilty to one count of conspiracy to commit crimes under the federal Racketeering Influenced and Corrupt Organizations Act. In his plea, he admitted that from 2008 to May 2012 he participated in a criminal conspiracy in Dodge City involving members of the Norteno street gang and their affiliates, the Diablos Viejos and Los Carnales Chingones. Sierra-Medrano was a member of the Diablos Viejos.
On March 29, 2010, he and fellow gang members assaulted a Sureno gang member named Jose Arreola. They encountered Arreola at a convenience store at 400 E. Wyatt Earp in Dodge City. After a fellow gang member attacked Arreola with the handle of a windshield wiper, Sierra-Medrano joined in with a knife. He stabbed Arreola multiple times. The stabbing was in retaliation for the prior stabbing of two Nortenos.
On the same day as the stabbing, Sierra-Medrano was found to be in possession with intent to distribute cocaine. In his plea, he admitted that during that time he was distributing cocaine he obtained from California. The stabbing and the drug trafficking helped him to maintain his position with the Norteno enterprise.
Sierra-Medrano was one of 23 Norteno members indicted in May 2012. It was only the second time a federal RICO Act indictment (Racketeer Influenced and Corrupt Organizations Act) had been filed in Kansas. So far, 21 defendants have been convicted. Defendants Adam Flores and Jayson Vargas are awaiting trial.
Grissom commended the Dodge City Police Department, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Ford County Sheriff=s Office, the Ford County Attorney’s Office, the Kansas Bureau of Investigation, Assistant U.S. Attorney Lanny Welch and Assistant U.S. Attorney Aaron Smith for their work on the case.
Former Ripley Police Officer Sentenced to Federal Prison for Child Pornography OffenseRead the Press Release
George Michael Puskas II told police he took pornographic pictures during relationship with a 16-year-old minor
CHARLESTON, W.Va. – George Michael Puskas II, of Ripley, was sentenced today to one year and one day in prison, followed by 10 years of supervised release for a child pornography offense, U.S. Attorney Booth Goodwin announced. Puskas, a former police officer in Ripley, previously pleaded guilty in July to possession of child pornography. The sentence was handed down by United States District Judge John T. Copenhaver, Jr. in Charleston.
In March 2010, Puskas, 31, established a sexual relationship with a then 16-year-old minor. At the time of the relationship, Puskas produced images and a video of the minor having sex or performing sex acts. Puskas produced a video of child pornography using a police department-issued digital camera. Puskas also used a cellphone to create images of child pornography. On September 7, 2011, Puskas possessed between 10 and 150 images of child pornography.
Puskas also told police that he maintained a relationship with the minor up until the time the individual turned 18 years old. On September 14, 2011, Puskas sent the individual an image that showed the two of them having sex.
On April 6, 2012, the West Virginia Internet Crimes Against Children Task Force executed a federal search warrant and seized a computer, a flash drive, and other items that Puskas used to produce child pornography. Puskas told police that he produced and possessed images of child pornography.
Puskas, who was an officer with the department at the time he committed the federal felony, resigned from the Ripley Police Department in May 2012.Upon completion of his prison term, Puskas will be placed on supervised release for 10 years. In addition, he will be required to register as a sex offender for the rest of his life.
The West Virginia Internet Crimes Against Children Task Force conducted the investigation. Assistant United States Attorney Lisa Johnston handled the prosecution.
This case was prosecuted as part of U.S. Attorney Goodwin’s ongoing initiative to combat child sexual exploitation and abuse in the Southern District of West Virginia.
Former Real Estate Investor Sentenced to 5 Years in Prison for Bank Fraud and Money LaunderingRead the Press Release
Orlando, Florida – U.S. District Judge Gregory A. Presnell today sentenced James Olivos (47, Lake Mary) to 5 years in federal prison for bank fraud and money laundering. As part of his sentence, the court also entered a money judgment in the amount of $2,866,121.39, the proceeds of the fraud scheme. Olivos pleaded guilty on September 18, 2013.
According to court documents, between March 2003 and November 2007, Olivos engaged in a scheme wherein he recruited other individuals ("straw purchasers") to purchase expensive homes, which they could not afford. Olivos prepared loan applications for these straw purchasers, which grossly overstated their incomes and gave false employment histories. Additionally, these applications stated that these homes would be used as primary residences, but Olivos had actually told these buyers that the homes would be investments and that he would find renters to cover the mortgage payments. Further, in order to increase his profits, Olivos convinced the sellers of the homes to inflate the sales prices by stating additional money would be necessary for home improvement. Olivos would then split the proceeds of the sales with the sellers. As a result of this fraud, Olivos caused a total loss to the lenders of approximately $3.2 million dollars.
This case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service – Criminal Investigation. It was prosecuted by Assistant United States Attorney Vincent S. Chiu.