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9 December 2013
Former Doctor Sentenced to Home Detention for Health Care Fraud ConvictionsRead the Press Release
BUFFALO, N.Y.---U.S. Attorney William J. Hochul, Jr. announced that former medical doctor Daniel C. Gillick, 63, of Youngstown, N.Y., who previously pleaded guilty to obtaining controlled substances by fraud and health care fraud, was sentenced today to 6 months of home detention and 2 years’ probation. As a part of the plea, the defendant surrendered his medical license.
Assistant U.S. Attorney Timothy C. Lynch and Maura K. O’Donnell, who handled the case, stated that between August 2011 and September 7, 2011, the defendant was employed as an emergency room physician at Schuyler Hospital. During that time, Gillick devised a scheme whereby on September 7, 2011, his then-girlfriend, Christine Guilfoyle, reported to the emergency room at Schuyler Hospital and pretended to suffer from a medical condition known as Trygeminal Neuralgia. The defendant then performed an apparent examination of her, fraudulently diagnosed her as suffering from Trygeminal Neuralgia and issued a prescription to her for Dilauded, a controlled substance.
In reality, Gillick?s girlfriend was not suffering from this condition, and had no medical need for the drug Dilaudid. In participating in this illegal scheme, the defendant defrauded Schuyler Hospital and also aided and abetted his former girlfriend in obtaining a controlled substance by fraud.
“This Office has previously spoken about the need for all segments of the community to understand and help combat the dangers associated with the illegal trafficking in painkillers,” said United States Attorney Hochul. “Doctors and other medical professionals need to also understand that this Office will not hesitate to bring criminal charges against them when warranted by the facts and the law.”
On November 22, 2013, U.S. Magistrate Judge Hugh B. Scott sentenced Christine Guilfoyle to time-served for her misdemeanor conviction for possessing cocaine base.
These cases are the result of an investigation on the part of Special Agents of the United States Drug Enforcement Administration, under the direction of Brian R. Crowell, Special Agent in Charge, New York Field Division, Special Agents of the Federal Bureau of Investigation, under the direction of Special Agent in Charge Brian P. Boetig, the New York State Police, under the direction of Major Michael Cerretto, Customs and Border Protection, under the direction of James Engleman, Director of Field Operations, The New York State Attorney General Medicaid Fraud Control Unit, the Amherst Police Department, under the direction of Chief John Askey, the Buffalo Police Department, under the direction of Commissioner Daniel Derenda, the Lancaster Police Department, under the direction of Chief Gerald Gill, the Erie County Sheriff?s Department, under the direction of Sheriff Timothy Howard, the Depew Police Department, under the direction of Chief Stan Carwile, and the Niagara County Sheriff?s Drug Task Force, under the direction of Sheriff James Votour.
Former Doctor Sentenced to Home Detention for Health Care Fraud ConvictionsRead the Press Release
BUFFALO, N.Y.---U.S. Attorney William J. Hochul, Jr. announced that former medical doctor Daniel C. Gillick, 63, of Youngstown, N.Y., who previously pleaded guilty to obtaining controlled substances by fraud and health care fraud, was sentenced today to 6 months of home detention and 2 years’ probation. As a part of the plea, the defendant surrendered his medical license.
Assistant U.S. Attorney Timothy C. Lynch and Maura K. O’Donnell, who handled the case, stated that between August 2011 and September 7, 2011, the defendant was employed as an emergency room physician at Schuyler Hospital. During that time, Gillick devised a scheme whereby on September 7, 2011, his then-girlfriend, Christine Guilfoyle, reported to the emergency room at Schuyler Hospital and pretended to suffer from a medical condition known as Trygeminal Neuralgia. The defendant then performed an apparent examination of her, fraudulently diagnosed her as suffering from Trygeminal Neuralgia and issued a prescription to her for Dilauded, a controlled substance.
In reality, Gillick?s girlfriend was not suffering from this condition, and had no medical need for the drug Dilaudid. In participating in this illegal scheme, the defendant defrauded Schuyler Hospital and also aided and abetted his former girlfriend in obtaining a controlled substance by fraud.
“This Office has previously spoken about the need for all segments of the community to understand and help combat the dangers associated with the illegal trafficking in painkillers,” said United States Attorney Hochul. “Doctors and other medical professionals need to also understand that this Office will not hesitate to bring criminal charges against them when warranted by the facts and the law.”
On November 22, 2013, U.S. Magistrate Judge Hugh B. Scott sentenced Christine Guilfoyle to time-served for her misdemeanor conviction for possessing cocaine base.
These cases are the result of an investigation on the part of Special Agents of the United States Drug Enforcement Administration, under the direction of Brian R. Crowell, Special Agent in Charge, New York Field Division, Special Agents of the Federal Bureau of Investigation, under the direction of Special Agent in Charge Brian P. Boetig, the New York State Police, under the direction of Major Michael Cerretto, Customs and Border Protection, under the direction of James Engleman, Director of Field Operations, The New York State Attorney General Medicaid Fraud Control Unit, the Amherst Police Department, under the direction of Chief John Askey, the Buffalo Police Department, under the direction of Commissioner Daniel Derenda, the Lancaster Police Department, under the direction of Chief Gerald Gill, the Erie County Sheriff?s Department, under the direction of Sheriff Timothy Howard, the Depew Police Department, under the direction of Chief Stan Carwile, and the Niagara County Sheriff?s Drug Task Force, under the direction of Sheriff James Votour.
Former Defense Contractor Pleads GuiltyRead the Press Release
CHARLOTTESVILLE, VIRGINIA – A former contractor for the Department of Defense pled guilty today in the United States District Court for the Western District of Virginia in Charlottesville to charges related to the removal of classified materials.
Bruce Schliemann, 50, of Austin, Texas, waived his right to be indicted and pled guilty today to a one-count Information charging him with the unauthorized removal and retention of classified documents. At sentencing, he faces a maximum possible penalty of up to one-year in prison and/or a fine of up to $100,000.
“Protecting the integrity of classified documents is crucial to our national security,” United States Attorney Timothy J. Heaphy said today. “Defendant Schliemann was a decorated Navy Seal who knew the importance of protecting classified information. Nonetheless, he misused classified information, and then tried to cover up his crime. We will do all we can to identify breaches of national security like this one and hold the offenders responsible. ”
According to a statement of facts filed today in court, in 2010, Schliemann, a retired Navy Seal, was working as an employee for a Department of Defense contractor in the Southern District of California in San Diego.
In April 2010, Schliemann knowingly downloaded classified information from a classified computer in a secure facility to a personal thumb drive. The defendant then removed the thumb drive from the secure facility and transferred those classified files to the laptop computer that had been issued to him by his employer. After removing the classified markings, Schliemann then emailed the classified material to employees of another defense contractor located in the Western District of Virginia. The employees of this second defense contractor subsequently then transmitted the classified information to a number of unauthorized and un-cleared persons in several locations.
During September 2010, Schliemann found out he was being investigated for his actions and consulted with a computer-savvy friend for assistance in “wiping” the hard drive of his laptop computer. After wiping the hard drive, Schliemann physically destroyed the hard drive and thumb drive that held the classified information.
In addition, when approached by agents in September 2010, Schliemann lied about a number of facts, including telling the agents he obtained the classified information by “digging around on the internet.” The defendant also specifically denied removing the classified information from the secure facility in San Diego.
The investigation of the case was conducted by the Department of Homeland Security Investigations [HIS] and the Defense Criminal Investigative Service. Assistant United States Attorney Stephen Pfleger is prosecuting the case for the United States.
Former CFO of Emporia Company Pleads Guilty to Embezzling $265,927Read the Press Release
TOPEKA, KAN. - The former chief financial officer for a manufacturing firm in Emporia has pleaded guilty to embezzling more than $265,927 from the company, U.S. Attorney Barry Grissom said today.
Sandra Moore, 58, Emporia, Kan., pleaded guilty Monday to one count of embezzlement. In her plea, she admitted the crime occurred beginning in 2008 while she was CFO of Sauder Custom Fabrication, Inc., in Emporia, Kan.She devised a variety of schemes to divert money from her employer’s accounts to her own including:
- Making unauthorized transfers from the company’s disbursement account to her personal account at ESB Financial in Emporia.
- Issuing unauthorized checks and depositing them into her personal account.
- Issuing unauthorized checks to repay loans she obtained from her 401K account.
Using those methods, she embezzled a total of $265,927 from the company.
Sentencing is set for March 3. She faces a maximum penalty of 10 years in federal prison and a fine up to $250,000. Grissom commended the FBI and Assistant U.S. Attorney Richard Hathaway for their work on the case.Former Bend Attorney Pleads Guilty to $1.1 Million FraudRead the Press Release
EUGENE, Ore. – Today, Bryan W. Gruetter, 55, of Bend, Oregon, pleaded guilty to one count of conspiracy to commit wire fraud before U.S. District Judge Michael McShane. In court, Gruetter admitted to diverting more than $1.1 million of client funds.
According to court documents, Gruetter was a personal injury attorney with offices in Bend and Portland, Oregon. As part of his guilty plea, Gruetter admitted that he and others illegally diverted more than $1.1 million in client settlement funds via interstate wire transfers. He further admitted that he and others used his clients’ money to pay for personal and business expenses rather than to pay the clients or to pay the clients’ legal, medical, insurance, or other associated costs as promised. On February 3, 2012, the Oregon State Bar took custody of defendant’s law practice, and on March 9, 2012, defendant resigned his law license, desiring not to contest allegations that he neglected clients’ legal matters, failed to communicate with clients, and failed to deliver funds to clients.
Sentencing is set for March 17, 2014, at 9 a.m.before Judge McShane. The maximum penalty for conspiracy to commit wire fraud is 20 years in prison and a $250,000 fine.
This case was investigated by the FBI and IRS-CI and is being prosecuted by Assistant U.S. Attorney Scott E. Bradford.
First Public Hearing of the American Indian and Alaska Native Children Exposed to Violence Task Force Held in Bismarck, N.D.Read the Press Release
The Attorney General’s Advisory Committee of the Task Force on American Indian/Alaska Native Children Exposed to Violence held its first public hearing today in Bismarck, N.D., convening tribal researchers, advocates and local community members to discuss domestic violence and child physical and sexual abuse in Indian Country.
The task force is comprised of a federal working group that includes U.S. Attorneys and officials from the Departments of the Interior and Justice and an advisory committee of experts on American Indian studies, child health and trauma and child welfare.
“Today represents an important step in protecting American Indian and Alaska Native children,” said Associate Attorney General Tony West. “This task force has already begun addressing children’s exposure to violence in tribal communities in ways that recognize the unique government-to-government relationship between the United States and tribes, and it will continue to develop approaches that will help us protect our children.”
“The problem of American Indian and Alaska Native children’s exposure to violence is complex and widespread and can have devastating consequences for these children,” said Assistant Attorney General for the Office of Justice Programs Karol V. Mason. “I’m pleased that this group of experts will help us understand the challenges before us and give us the information we need to reduce the incidence of violence and trauma among native children.”
During the hearing, experts on the trauma of sexual abuse of American Indian children discussed their experiences and recommended ways to improve the identification, assessment and treatment of children. Other topics addressed included violence in the home, healing from trauma and programs for children exposed to violence in Indian Country and urban communities.
In addition to today’s hearing, the advisory committee will convene three public hearings in early 2014 in Phoenix, Fort Lauderdale, Fla., and Anchorage, Alaska, focusing on violence in homes, schools and communities in Indian country. The 13-member advisory committee is co-chaired by former U.S. Senator Byron Dorgan and Iroquois composer and singer Joanne Shenandoah. The advisory committee will draw upon research and information gathered through public hearings to draft a final report of policy recommendations that it will present to Attorney General Eric Holder by late 2014.
Attorney General Holder created the task force this year as part of his Defending Childhood initiative to prevent and reduce children’s exposure to violence as victims and witnesses. The task force is also a component of the Justice Department’s ongoing collaboration with leaders in American Indian and Alaska Native communities to improve public safety.
For more information about the advisory committee and public hearings, please visit www.justice.gov/defendingchildhood.Federal Jury Finds Nashville Man Guilty of Bank FraudRead the Press Release
Keith Churn, 44, of Nashville, Tenn., was found guilty of bank fraud by a federal jury on Friday, December 6, announced David Rivera, United States Attorney for the Middle District of Tennessee.Churn was convicted of seven counts of bank fraud in connection with a scheme to defraud a federally-insured financial institution that had issued loans for the construction of modular homes in Nashville and Franklin, Tennessee. Churn was found not guilty of four additional counts of bank fraud.
“The jury’s verdict confirms that those who seek to profit through fraudulent financial schemes will be held responsible, “said U.S. Attorney David Rivera. “This office and our law enforcement partners remain dedicated to ferreting out and prosecuting all varieties of financial fraud.”
“The Secret Service will continue to aggressively investigate financial crimes, to include mortgage fraud schemes such as the one perpetrated by Mr. Churn, in order to support the integrity of our nation’s financial infrastructure and to bring to justice those that use the financial system to victimize others,” said U.S. Secret Service Special Agent in Charge Todd Hudson.
Evidence at trial showed that Churn made numerous false statements to a Tennessee bank in order to induce additional draws on certain construction loans, the proceeds of which Churn transferred to a bank account under his control, as well as to conceal his scheme and to dissuade the bank from calling these loans. Churn submitted false invoices from a modular home manufacturer, falsely representing that down payments had been made and that modular units had been ordered, and misrepresented the status of construction that had been done to date. The evidence also demonstrated that Churn failed to fulfill his promises to make interest payments on behalf of certain individuals who had applied for the construction loans at issue, causing these loans to be foreclosed.
Churn will be sentenced by United States District Court Chief Judge William J. Haynes, Jr. on a date yet to be determined. He faces a maximum penalty of 30 years in prison for each count, as well as fines and forfeiture of the money derived from the fraudulent scheme.
The U.S. Secret Service conducted this investigation. Assistant U.S. Attorneys Sandra G. Moses and William F. Abely prosecuted the case.
Eighty-Four, Pa. Man Pleads Guilty in Oxycodone Trafficking SchemeRead the Press Release
PITTSBURGH - A Washington County resident pleaded guilty in federal court to a charge of violating federal narcotic laws, United States Attorney David J. Hickton announced today.
Andrew Brown, 23, of Eighty Four, Pa., pleaded guilty to one count before United States District Judge Arthur J. Schwab.
In connection with the guilty plea, the Court was advised that Brown conspired with others to possess with the intent to distribute and distribute oxycodone, a Schedule II controlled substance. In that regard, the Court learned that Brown passed a number of fraudulent oxycodone prescriptions at pharmacies in the Western District of Pennsylvania. Brown then provided the obtained oxycodone to charged co-defendant David Best, who later resold this oxycodone. David Best has pleaded not guilty to the charges against him.
Judge Schwab scheduled sentencing for May 13, 2014, at 9 a.m. The law provides for a total sentence of up to 20 years in prison, a fine of not more than $1,000,000, 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 Andrew Brown.
East St. Louis Man Sentenced to Prison for Revocation of Supervised Release and for Distribution of HeroinRead the Press Release
An East St. Louis, Illinois, man was sentenced to a prison term in federal district court upon revocation of supervised release and for distribution of heroin on December 6, 2013, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today.
Delano Perry, 41, of East St. Louis, Illinois, was sentenced in federal district court in East St. Louis to a total of 33 months in prison, to be followed by 3 years of supervised release, a $100 special assessment, and a fine of $200, following his plea of guilty, on August 1, 2013, to an Indictment charging him with Distribution of Heroin and upon a plea of guilty on December 6, 2013, to violating the terms of his supervised release. The charges relate to an incident that occurred on June 6, 2013, in East St. Louis, Illinois, when Perry sold approximately 24 grams of heroin to a confidential informant who was working in conjunction with agents of the Bureau of Alcohol, Tobacco, Firearms, and Explosives.
Perry, who was previously convicted of Distribution of Cocaine Base on July 17, 1998, was released from prison on March 1, 2012, and began serving a term of supervised release. He was on supervised release when he committed the instant crime of Distribution of Heroin. The judge noted that Perry began his term of supervised release successfully, but had fallen back to crime in part to pay the funeral expenses of his 20-year-old son, who was murdered in 2012.
The case was investigated by members of the Bureau of Alcohol, Tobacco, Firearms, and Explosives. The case was prosecuted by Assistant U.S. Attorney Stephen B. Clark.
Duck Valley Man Sentenced for Failing to Register as Sex OffenderRead the Press Release
BOISE — Martin Daniel Atkins, Jr., 30, of Owyhee, Nevada, was sentenced today to 30 months in federal prison followed by five years of supervised release for failure to register as a sex offender, and for violating his supervised release on a prior conviction for the same offense, U.S. Attorney Wendy J. Olson announced. He pleaded guilty on July 17, 2013.
According to court documents, Atkins was required to register as a sex offender because of his guilty plea in 2005 to two counts of sexual abuse of minor, involving children from the Duck Valley Indian Reservation. Upon his release from prison, Atkins began the registration process and reported that he was living at his stepmother's home on the Idaho side of the Duck Valley reservation. Investigators learned that Atkins had moved to Nevada and was later employed in Arizona and had failed to notify authorities. He pleaded guilty in 2011 to failing to register under the Sex Offender Registration and Notification Act and was sentenced to 21 months in prison.
Upon his release from custody in January 2013, Atkins returned to the Duck Valley reservation. He registered as a sex offender with the Elko County Sheriff’s Office in Nevada and reported that he would be living with his aunt. In late February 2013, federal probation officers went to Atkins’ aunt’s home and learned that he had not stayed there since he returned to the reservation. U.S. Marshals Service located Atkins in March and arrested him. He had been living at another location on the Duck Valley Indian Reservation.
Atkins was prosecuted for violating the Sex Offender Registration and Notification Act (SORNA), which was passed by Congress in 2006. The Act requires sex offenders to register and keep their registration current in each jurisdiction where they reside, are employed or are students. Violations of SORNA are prosecuted in federal court.
Donald William Forrest 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 6, 2013, before Chief U.S. District Judge Dana L. Christensen, DONALD WILLIAM FORREST, a 51-year-old resident of Butte, was sentenced to a term of:
- ison: 16 months
- ecial Assessment: $100
- pervised Release: 5 years
FORREST was sentenced in connection with his guilty plea to possession with the intent to distribute methamphetamine.
In an Offer of Proof filed by Assistant U.S. Attorney Bryan R. Whittaker, the government stated it would have proved at trial the following:
On August 23, 2011, a confidential informant (CI) met with FORREST at a gas station in Rocker to purchase methamphetamine. The CI had prearranged to meet FORREST at this location. The CI approached FORREST's 1992 two-tone grey and white Ford extended cab pickup truck and got inside. FORREST and the CI circled the parking lot for approximately two minutes. The CI paid FORREST $280 in exchange for two grams of methamphetamine. FORREST had the methamphetamine sitting on the center console of his truck as he had done in previous deals. FORREST gave the CI a Premium Blend red cigarette pack which contained approximately two grams of individually wrapped methamphetamine. The CI turned the cigarette pack and the methamphetamine over to law enforcement agents who were observing the transaction.
On August 29, 2011, the CI again met with FORREST in Rocker to purchase methamphetamine. The CI had prearranged to meet FORREST at this location. The CI approached FORREST's truck and got inside. The CI paid FORREST $280 in prerecorded U.S. currency in exchange for two grams of methamphetamine. FORREST counted the money and had the methamphetamine sitting on the center console of his truck. FORREST gave the CI a Camel cigarette pack which contained the two grams of individually wrapped methamphetamine. The CI turned the cigarette pack and the methamphetamine over to law enforcement agents. Multiple law enforcement agents witnessed the transaction. The CI also wore an electronic recording device which recorded the transaction between the CI and FORREST.
On September 7, 2011, the CI made arrangements with FORREST to meet with an undercover agent (UA) and sell him 6.5 grams of methamphetamine for $900. FORREST agreed to the sale and instructed the CI to have the UA meet him behind a store in Butte. The UA met with FORREST in the store's parking lot. FORREST told the agent that he was only able to get 2 grams of methamphetamine instead of the expected 6.5 grams. The agent purchased the 2 grams of methamphetamine from FORREST for $300. FORREST gave the agent an Old Gold cigarette pack that was sitting on the center console between them which contained two individually wrapped baggies inside. The transaction was electronically recorded and observed by multiple law enforcement agents.
On September 22, 2011, the agent again met with FORREST behind the store in Butte. The agent purchased what he thought to be 4.5 grams of methamphetamine from FORREST for $600. After the agent left the transaction, the methamphetamine was weighed at only 3.3 grams. The transaction was electronically recorded and observed by multiple law enforcement agents. The agent later called FORREST to complain about the missing amount of methamphetamine wherein FORREST apologized and promised to make it right.
On December 27, 2011, FORREST indicated to the agent that he could conduct a drug transaction for approximately 1 oz. of methamphetamine for $2,400. The agent instead offered to buy 1/2 oz. of methamphetamine for $1,300. The following day the agent met with FORREST at a saloon in Montana City. FORREST got into the agent's vehicle to conduct the transaction. FORREST pulled a plastic baggie from his left front shirt pocket and provided 1/2 oz. of methamphetamine to the agent for the agreed upon price. The transaction was electronically recorded and observed by multiple law enforcement agents.
On January 21, 2013, FORREST again met the agent at the saloon where he sold the agent approximately 2 oz. of methamphetamine for $4,800. The transaction was electronically recorded and observed by multiple law enforcement agents.
Law enforcement agents sent all the methamphetamine to the DEA laboratory for testing. A DEA chemist would have testified that the total amount of actual (pure) methamphetamine sold by FORREST to the CI and the agent was more than 68 grams
Because there is no parole in the federal system, the "truth in sentencing" guidelines mandate that FORREST will likely serve all of the time imposed by the court. In the federal system, FORREST does have the opportunity to earn a sentence reduction for "good behavior." However, this reduction will not exceed 15% of the overall sentence.
The investigation was a cooperative effort between the Federal Bureau of Investigation, the Montana Division of Criminal Investigation, and the Southwest Montana Drug Task Force.
District Man Sentenced to 24 Years in Prison for 2006 Shoot-Out That Killed an Innocent Bystander-Gun Battle Unfolded in Parking Lot of Southeast Washington Apartment Complex-Read the Press Release
WASHINGTON – Dontrace Blaine, 26, formerly of Washington, D.C., was sentenced today to 24 years in prison on charges stemming from a gun battle in 2006 that led to the death of an innocent bystander, U.S. Attorney Ronald C. Machen Jr. announced.
Blaine was found guilty by a jury in September 2013, following a trial in the Superior Court of the District of Columbia, of second-degree murder while armed and possession of a firearm during a crime of violence. He was sentenced by the Honorable Robert E. Morin.
According to the government’s evidence, Blaine took part in a gun battle at 11 p.m. on Dec. 29, 2006 outside an apartment complex in the 2500 block of Pomeroy Road SE. During the gunfire, an innocent bystander, 25-year-old Adegoke Adenikinju, was struck in the chest by a stray bullet as he attempted to exit his vehicle in hopes of seeking cover. Mr. Adenikinju died in the parking lot from his injuries. Witnesses later identified Blaine as among the shooters.
In announcing the sentence, U.S. Attorney Machen commended the work of the officers, detectives and evidence technicians from the Metropolitan Police Department (MPD) who investigated the case. He also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialists Fern Rhedrick , Sandra Lane, Alesha Matthews Yette and Sharon Newman,; Litigation Technology Specialists Jeannie Latimore-Brown and Anisha Bhatia, and Investigative Analysts Lawrence Grasso and Zachary McMenamin. Finally, he expressed appreciation for the work of Assistant U.S. Attorney Vinét Bryant, who prosecuted the case.
13-415Devils Lake Man Sentenced for Abusive Sexual ContactRead the Press Release
FARGO – U.S. Attorney Timothy Q. Purdon announced that on Dec. 9, 2013, Jerome Louis Blackbird, Jr., of Devils Lake, N.D., was sentenced before U.S. District Judge Ralph R. Erickson on a charge of abusive sexual contact.
Judge Erickson sentenced Blackbird, Jr. to 33 months’ imprisonment to be followed by five years of supervised release. Blackbird, Jr., was ordered to register as a sex offender and to pay a $100 special assessment to the crime victims fund.
On July 13, 2013, Blackbird, Jr., pleaded guilty to engaging in sexual contact with a minor child by intentionally touching the child’s genitalia and breasts through her clothing,
The case was investigated by the Federal Bureau of Investigation.
Assistant U.S. Attorney Janice M. Morley prosecuted the case.
Corrupt Colombian Government Employee and Criminal Defense Attorney Convicted in Obstruction of Justice CaseRead the Press Release
Earlier today, Freddy Mauricio Tellez-Buitrago and Adriana Gonzalez-Marquez pled guilty before U.S. Magistrate Judge Cheryl M. Pollak at the federal courthouse in Brooklyn, New York, to obstruction of justice for stealing selling sensitive and confidential United States law enforcement information concerning prosecutions in the Eastern District of New York and selling that information to a narcotics trafficker in Colombia. When sentenced, both defendants face a maximum of twenty years' imprisonment and a fine of up to $250,000. Tellez-Buitrago has agreed to forfeit $30,000, and Gonzalez-Marquez has agreed to forfeit $50,000.
The guilty pleas were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; James T. Hayes, Jr., Special Agent-in-Charge, U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI), New York, and Brian R. Crowell, Special Agent-in-Charge, Drug Enforcement Administration (DEA), New York Division. The investigation was led by HSI in Bogota, Colombia, with assistance provided by HSI in New York, DEA in Bogota and New York, and local law enforcement authorities in Colombia.
“The defendants sought to undermine U.S. efforts to bring international narco-traffickers to justice, and traded on sensitive and confidential information on U.S. operations in exchange for money. Their convictions signify our pursuit of individuals who attempt to compromise the judicial process by obstructing justice here and in Colombia,” stated United States Attorney Lynch. “We will continue to rely on the success of the international cooperation between the United States and Colombia to pursue individuals who steal information that put the lives of law enforcement officers at risk.” Ms. Lynch extended her grateful appreciation to the Colombian National Police and the Colombian Attorney General's Office for their assistance in this case.
The defendants' convictions resulted from an investigation that revealed that, through his employment at the Colombian Attorney General's Office, Tellez-Buitrago had specialized access to law enforcement materials, including requests from the United States government for the extradition of alleged Colombian drug traffickers. The Colombian authorities treat such extradition requests as sensitive and confidential until the arrest of the individual whose extradition is sought. Tellez-Buitrago accepted bribes from criminal defense attorney Gonzalez-Marquez, a former prosecutor at the Attorney General’s Office in Colombia, in exchange for leaking documents relating to EDNY extradition requests for narcotics traffickers. Gonzalez-Marquez, in turn, sold the information to a narcotics trafficker in exchange for the equivalent of approximately $30,000 in U.S. dollars.
The government’s case is being prosecuted by Assistant United States Attorney Soumya Dayananda.
The Defendants:
ADRIANA GONZALEZ-MARQUEZ
Age: 33FREDDY MARQUEZ TELLEZ-BUITRAGO
Age: 34E.D.N.Y. Docket No. 12-687 (ERK)
Conspirator in Maryland Drug Ring Sentenced to 11 Years in PrisonRead the Press Release
Conspired to Distribute Over 1,500 Pounds of Marijuana and Launder Over $1 Million
Greenbelt, Maryland – Chief U.S. District Judge Deborah K. Chasanow sentenced Mikhnail DelRosario, a/k/a Mickey, age 28, of Silver Spring, Maryland, today to 11 years in prison, followed by four years of supervised release, for conspiring to distribute more than 700 kilograms of marijuana and conspiring to commit money laundering. Chief Judge Chasanow also ordered that DelRosario forfeit $1 million, believed to be the proceeds of the drug and money laundering conspiracies.
The sentences were announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge William Winter of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); and Chief J. Thomas Manger of the Montgomery County Police Department.
According to his guilty plea and court documents, from March 2011 to December 2012, DelRosario conspired with Billymir Mancilla-Brevichet, Chamron Thach, Carlos Escobar, and others to distribute marijuana in the Montgomery County, Maryland area. From October 2012 through December 2012, Delrosario was intercepted on over seventy-five drug-related telephone conversations on Mancilla and Thach’s telephones, during which he discussed the sale of and arranged drug transactions involving marijuana.
Specifically, Mancilla acquired large amounts of high-quality marijuana from suppliers in California and elsewhere, and arranged for the transport of the marijuana by plane, car and mail to co-conspirators in Montgomery County, Maryland, including DelRosario. During the time of the conspiracy, DelRosario received 2 to 4 pound packages of marijuana from Mancilla at least two to three times per month. DelRosario also received packages of marijuana that he supplied to other members of the conspiracy on Mancilla’s behalf. DelRosario also sent couriers with currency to Mancilla in California to purchase marijuana from Mancilla. DelRosario paid Mancilla between $3,000 and $4,000 per pound of marijuana.
Mancilla’s co-conspirators also transported at least 100 pounds of marijuana at a time by car to a storage facility in Maryland, where Mancilla arranged for DelRosario and others, to pick up multiple pounds of marijuana for re-distribution. On at least five occasions, DelRosario traveled to California to receive marijuana and to transport drug proceeds in the form of bulk cash to Mancilla. DelRosario packaged and shipped the marijuana from Mancilla’s California residence to Maryland for redistribution.
During his participation in the conspiracy, DelRosario conspired to distribute between 700 and 1,000 kilograms of marijuana.
The conspirators also engaged in financial transactions that were designed to conceal the nature, location, source, ownership and control of the drug proceeds. For example, Mancilla arranged to receive payment for the marijuana he caused to be distributed by having drug customers deposit cash payments in amounts less than $10,000 into bank accounts that he controlled that were held in fake names and in the names of fake businesses. DelRosario and other co-conspirators, including Mancilla, Thach and Escobar, structured the financial transactions to evade the requirement that banks report transactions over $10,000 to the IRS, thereby concealing from the government large cash transactions by drug dealers.
Mancilla arranged for drug customers to mail drug proceeds from Maryland to him in California. Mancilla also had drug customers make payments to DelRosario and other co-conspirators in Maryland, who bundled the drug proceeds together in amounts ranging from $10,000 to $100,000, and arranged for individuals to transport the bulk cash by airplane from Maryland to Mancilla in California. DelRosario also made several trips by plane from Maryland to Mancilla in California with bulk cash.
For example, during the course of the conspiracy, DelRosario made two deliveries of currency to a cooperating informant totaling over $36,000. In October 2012, DelRosario provided $58,200 to Thach for payment to Mancilla for marijuana. DelRosario was responsible for acquiring and transporting at least $1,000,000 during the course of the conspiracy.
Billymir Mancilla-Brevichet, age 28, of Oakland, California, was previously sentenced to 90 months in prison and ordered to forfeit $278,618 seized from May to October, 2012. Co-conspirators Chamron Thach, a/k/a Sham, age 30, of Silver Spring, Maryland, and Carlos Salvador Escobar, a/k/a Esco, age 30, of Arlington, Virginia, were sentenced to eight years and three years in prison, respectively, for their participation in the drug and money laundering conspiracies. Six other conspirators pleaded guilty and were sentenced to between 4 years and 78 months in prison.
United States Attorney Rod J. Rosenstein commended HSI Baltimore and Montgomery County Police Department for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys Christen A. Sproule and Mara Zusman Greenberg, who prosecuted this Organized Crime Drug Enforcement Task Force case.
Boise Man Pleads Guilty in Illegal Gambling CaseRead the Press Release
BOISE – Skinner “Skip” Anderson, II, 57, of Boise, Idaho, pleaded guilty today to one count of misprision of a felony, U.S. Attorney Wendy J. Olson announced. Anderson appeared today before Chief U.S. Magistrate Judge Candy W. Dale at the federal courthouse in Boise.
At his change of plea hearing, Anderson admitted to having knowledge of an illegal gambling operation that was being run out of a house he owns located at 6655 W. Victory Road in Boise. Anderson further admitted to taking steps to conceal the illegal gambling operation and not reporting it to the proper authorities.
Anderson faces up to three years in prison, a maximum fine of $250,000, and not more than one year of supervised release. In a separate civil proceeding, the United States is seeking forfeiture of the residence where the illegal gambling operation occurred.
Sentencing is set for February 18, 2014, before Chief U.S. District Judge B. Lynn Winmill.
This case was investigated by the Treasure Valley Metro Violent Crime Task Force. The task force is comprised of federal, state, and local agencies, including the Federal Bureau of Investigation, Bureau of Alcohol, Tobacco, Firearms and Explosives, Boise Police Department, Ada County Sheriff’s Office, Caldwell Police Department, Nampa Police Department, Meridian Police Department, Canyon County Sheriff’s Office, and the Idaho Department of Correction. The Metro Task Force was assisted by Internal Revenue Service-Criminal Investigation.
Armed Career Criminal Exiled to over 24 Years in Prison for Being A Felon in Possession of A FirearmRead the Press Release
Baltimore, Maryland – U.S. District Judge James K. Bredar sentenced Stephen Sylvester Walker, age 31, of Baltimore, Maryland, today to 293 months in prison, followed by five years of supervised release, for being a felon in possession of a gun. Judge Bredar enhanced Walker’s sentence upon finding that Walker is an armed career criminal based on one previous first degree assault conviction and two previous narcotics convictions.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Steven L. Gerido of the Bureau of Alcohol, Tobacco, Firearms and Explosives - Baltimore Field Division; Baltimore County State’s Attorney Scott Shellenberger; and Chief James W. Johnson of the Baltimore County Police Department.
According to evidence presented at Walker’s three day trial, on January 30, 2011 at approximately 2:30 a.m., Baltimore County Police officers received a dispatch call for an armed person near a Denny’s Restaurant in Parkville, Maryland. Officers testified that they went to the location and witnesses identified Walker as the armed person. An officer drew his weapon and approached Walker, ordering him to show his hands and get on the ground. Walker refused to comply and another officer finally got Walker on the ground and arrested him. As the officer was detaining Walker, he saw a semiautomatic handgun tucked into Walker’s waistband. The officers recovered the gun, which was loaded with ammunition and also had a round in the chamber.
Witnesses testified that after his arrest Walker looked at the first officer that approached him and said, “I should have smoked you when I had the chance.” During an earlier motions hearing in the case, witnesses testified that Walker also made statements threatening to harm the arresting officers and their families, and threatening the civilians in the area for “snitching.”
Judge Bredar found that Walker was not truthful when he falsely testified at trial that he did not have a firearm on his person, and that he did not know where the firearm came from.
United States Attorney Rod J. Rosenstein commended the ATF, Baltimore County Police Department and Baltimore County State’s Attorney=s Office for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys Michael C. Hanlon and Scott Lemmon, who prosecuted the case.
Alabama Man Pleads Guilty for His Role in Racially Motivated Cross BurningRead the Press Release
Thomas Windell Smith, 24, of Dothan, Ala., turned himself in and pleaded guilty in federal court on Friday, Dec. 6, 2013, to one count of conspiring to violate housing rights, the Justice Department announced today. The information charging Smith was unsealed today. The charge relates to his participation in a cross burning at the entrance to an African-American community in Ozark, Ala., on May 8, 2009, with a former KKK leader who was arrested and charged with a five-count indictment on Wednesday, Nov. 27, 2013.
During his plea, Smith admitted that he and a co-conspirator agreed to burn a cross together in order to intimidate the neighborhood’s African-American residents. Using materials from around his home, the co-conspirator constructed a wooden cross about six feet tall and wrapped cloth around the cross. The co-conspirator loaded the cross into Smith’s truck, and, with Smith driving while the co-conspirator provided directions, the two men transported the cross to a predominantly African-American residential neighborhood. They unloaded the cross at the entrance to the community, where the co-conspirator poured fuel on the cross, stood it up in view of several houses and set it on fire.
“The defendant’s crime illustrates the damage hate crimes can do to entire communities, making people feel unsafe in their own homes,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division. “We’d like to think these offenses are a thing of the past, but the reality is that they happen here in the 21st century. The Justice Department is committed to stamping them out.”
“This defendant not only committed a federal crime, but committed a contemptible action of hate,” said U.S. Attorney George L. Beck Jr. “Citizens in the Middle District of Alabama should not and will not tolerate such actions. I hope this prosecution sends a clear message that these hateful demonstrations will not be tolerated and will be prosecuted to the fullest extent of the law.”
Smith faces a statutory maximum penalty of 10 years in prison and a fine of up to $250,000.
This case was investigated by the Federal Bureau of Investigation, with the assistance of the Dale County Sheriff’s Office and the Ozark Police Department. The case is being prosecuted by Assistant U.S. Attorney Jerusha T. Adams of the Middle District of Alabama and Trial Attorney Chiraag Bains of the department’s Civil Rights Division.
Alabama Man Pleads Guilty for His Role in Racially Motivated Cross BurningRead the Press Release
Montgomery, Alabama - Thomas Windell Smith, 24, of Dothan, Alabama, pleaded guilty in federal court last Friday to one count of conspiring to violate housing rights. The charge relates to his participation in a cross burning at the entrance to an African American community in Ozark, Alabama, on May 8, 2009.
During his plea, Smith admitted that he and a co-conspirator agreed to burn a cross together in order to intimidate the African American residents. Using materials from around his home, the co-conspirator constructed a wooden cross about six feet tall and wrapped cloth around the cross. The co-conspirator loaded the cross into Smith’s truck. With Smith driving and the co-conspirator providing directions, the two men transported the cross to a predominantly African American residential neighborhood. They unloaded the cross at the entrance to the community. There, the co-conspirator poured fuel on the cross, stood it up in view of several houses, and set it on fire.
“The defendant’s crime illustrates the damage hate crimes can do to entire communities, making people feel unsafe in their own homes,” said Jocelyn Samuels, Acting Assistant Attorney General for Civil Rights. “We’d like to think these offenses are a thing of the past, but the reality is that they happen here in the 21st century. The Justice Department is committed to stamping them out.”
“This defendant not only committed a federal crime, but committed a contemptible action of hate,” stated U.S. Attorney Beck. “Citizens in the Middle District of Alabama should not and will not tolerate such actions. I hope this prosecution sends a clear message that these hateful demonstrations will not be tolerated and will be prosecuted to the fullest extent of the law.”
Sentencing is yet to be scheduled. Smith faces a maximum penalty of ten years in prison and a fine of up to $250,000.
This case was investigated by the Federal Bureau of Investigation, with the assistance of the Dale County Sheriff’s Office and the Ozark Police Department. The case is being prosecuted by Assistant U.S. Attorney Jerusha T. Adams of the Middle District of Alabama and Trial Attorney Chiraag Bains of the Justice Department’s Civil Rights Division.
PRESS CONTACT: Clark Morris
Email: [email protected]
Telephone: (334) 551-1755
Fax: (334) 223-761718 Charged as Result of Federal Investigation into Corruption and Civil Rights Abuses by Members of L.A. County Sheriff’s DepartmentRead the Press Release
Current and Former Deputies Charged with Federal Crimes, including Illegal Beatings of Jail Inmates and Obstruction of Justice
LOS ANGELES – Five criminal cases that charge a total of 18 current or one-time deputy sheriffs of various ranks were unsealed today as part of ongoing and wide-ranging FBI investigation into allegations of civil rights violations and corruption involving members of the Los Angeles County Sheriff’s Department. Four grand jury indictments and one criminal complaint allege crimes that include unjustified beatings of jail inmates and visitors at downtown Los Angeles jail facilities, unjustified detentions and a conspiracy to obstruct a federal investigation into misconduct at the Men’s Central Jail.
Federal authorities announced the charges after 16 of the defendants were taken into custody earlier today. Those defendants are expected to be arraigned on the charges this afternoon in United States District Court in Los Angeles.
“The five cases allege a wide scope of illegal conduct,” said United States Attorney André Birotte Jr. “This investigation started by focusing on misconduct in county jails, and we uncovered examples of civil rights violations that included excessive force and unlawful arrests.
“Our investigation also found that these incidents did not take place in a vacuum – in fact, they demonstrated behavior that had become institutionalized. The pattern of activity alleged in the obstruction of justice case shows how some members of the Sheriff’s Department considered themselves to be above the law. Instead of cooperating with the federal investigation to ensure that corrupt law enforcement officers would be brought to justice, the defendants in this case are accused of taking affirmative steps designed to ensure that light would not shine on illegal conduct that violated basic constitutional rights.”
Bill Lewis, the Assistant Director in Charge of the FBI’s Los Angeles Field Office, commented: “The defendants charged in this case are facing serious allegations, including violating the trust of the public they were sworn to serve. It is equally as important to point out that these charges should not reflect on the thousands of men and women of the Sheriff’s Department who proudly serve the citizens of Los Angeles County, and who partner with the FBI in a variety of crime areas.”
This morning, FBI agents took into custody 16 of the 18 defendants named in four indictments and one criminal complaint. Most of the defendants were arrested at various LASD facilities.
The five cases, which are part of an ongoing investigation, were unsealed this morning.
United States v. Brunsting and Branum, CR13-573
Two deputy sheriffs – Bryan Brunsting and Jason Branum – are charged in a six-count indictment with civil rights violations and making false statements in reports. Brunsting, who was a training officer, is charged in relation to an incident in which an inmate allegedly was assaulted and suffered bodily injury. Both Brunsting and Branum are charged in another assault. The victims were inmates at the Twin Towers Correctional Facility, where both deputies worked. Following the two incidents, the indictment alleges that Brunsting used deputies he was training to file reports that covered up the abuse.
United States v. Gonzalez, et al., CR13-574
This indictment charges a sergeant and four deputies with civil rights violations that allege they arrested or detained five victims – including the Austrian consul general – when they arrived to visit inmates at the Men’s Central Jail (MCJ) in 2010 and 2011.
The lead defendant in this indictment – Sergeant Eric Gonzalez, who was a supervisor in the MCJ visiting center, but no longer works for LASD – fostered an atmosphere “that encouraged and tolerated abuses of the law, including through the use of unjustified force and unreasonable searches and seizures by deputy sheriffs he supervised,” according to the indictment.
Each of the four deputies – Sussie Ayala, Fernando Luviano, Pantamitr Zunggeemoge and Noel Womack – is charged with participating in at least one of the four incidents in which victims allegedly suffered civil rights violations. In one incident, a man suffered a broken arm and a dislocated shoulder that has left him permanently disabled. In another incident, the Austrian consul general and her husband were handcuffed and detained.United States v. Thompson, et al., CR13-819
This six-count indictment that alleges a broad conspiracy to obstruct justice charges seven sworn members of the LASD. This case developed when deputies assigned to the Men’s Central Jail – including Lieutenant Gregory Thompson, who oversaw LASD’s Operation Safe Jails Program, and Lieutenant Stephen Leavins, who was assigned to the LASD’s Internal Criminal Investigations Bureau – learned that an inmate was an FBI informant and was acting as a cooperator in the FBI’s corruption and civil rights investigation.
After learning that the inmate received a cellular phone from a deputy sheriff who took a bribe and that the inmate was part of a civil rights investigation, those allegedly involved in the obstruction scheme took affirmative steps to hide the cooperator from the FBI and the United States Marshals Service, which was attempting to bring the inmate to testify before a federal grand jury in response to an order issued by a federal judge. As part of the conspiracy, the deputies allegedly altered records to make it appear that the cooperator had been released. They then re-booked the inmate under a different name, and then told the cooperator that he had been abandoned by the FBI.
Over the course of several weeks, the deputy sheriffs allegedly also attempted to obtain an order from a Los Angeles Superior Court judge that would have compelled the FBI to turn over information about its investigation to LASD. After the judge refused to issue such an order, according to the indictment, two LASD sergeants who are charged in this case nevertheless confronted an FBI special agent at her residence in an attempt to intimidate her into providing details about the investigation. The sergeants falsely told the special agent and her supervisor that they were obtaining a warrant for her arrest, according to the indictment.
Thompson no longer works for LASD. The other deputies named in this indictment are Gerard Smith, Mickey Manzo, and James Sexton, who were assigned to the Operation Safe Jails Program; and Scott Craig and Maricella Long, who were LASD sergeants within the Internal Criminal Investigations Bureau.
United States v. Piquette, CR13-821
Deputy Richard Piquette is charged in the fourth indictment with illegally building and possessing an assault rifle. The indictment charges Piquette with possessing an unregistered Noveske Rifleworks N-4 .223 caliber rifle with a barrel length of less than 16 inches. The second count in the indictment charges Piquette with manufacturing the Noveske rifle. Piquette, who is currently on leave with LASD, was previously assigned to the Twin Towers Correctional Facility. The investigation in this case was conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives.
United States v. Khounthavong, et al., 13-3105M
The fifth case unsealed today is a criminal complaint that charges three LASD deputies, all of whom are brothers, with conspiracy to make false statements to two banks in connection with a “buy-and-bail” mortgage fraud scheme. The complaint alleges that the three deputies – Billy Khounthavong, Benny Khounthavong, and Johnny Khounthavong – made false statements and reports to Flagstar Bank to purchase a 3,900-square-foot residence in Corona. The brothers then made additional false statements and reports to Bank of America in relation to another large residence they owned. The brothers walked away from – or “bailed” on – that home in which they were “under water,” meaning they owed substantially more than the residence was worth. As a result of the scheme, the brothers allegedly avoided more than $340,000 of unpaid mortgage debt. Benny Khounthavong and Johnny Khounthavong are assigned to LASD jail facilities.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty.
The five cases announced today are part of an ongoing investigation being conducted by the Federal Bureau of Investigation.
Release No. 13-143
6 December 2013
Week in Review – South BendRead the Press Release
South Bend, Indiana —The United States Attorney’s Office announced the following activity in Federal Court:
PLEAS:
Tyrone Franklin, 34, of Michigan City, Indiana pled guilty before Magistrate Judge Christopher A. Nuechterlein to the felony offense of being a felon in possession of a firearm.Magistrate Nuechterlein is recommending that the district court accept the tendered guilty plea.Parties have 14 days in which to object to the magistrate judge’s recommendation. This charge was filed as a result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives.Sentencing has been set for 3/6/2014.This case is being prosecuted by Assistant United States Attorney Frank Schaffer.
Brian W. Lindsey, 26, of La Porte, Indiana, pled guilty before Magistrate Judge Christopher A. Nuechterlein to the felony offense of passing counterfeit Federal Reserve notes.Magistrate Nuechterlein is recommending that the district court accept the tendered guilty plea.Parties have 14 days in which to object to the magistrate judge’s recommendation. This charge was filed as a result of an investigation by US Secret Service.Sentencing has been set for 3/6/2014.This case is being prosecuted by Assistant United States Attorney John Maciejczyk.
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.
DISPOSITIONS:
Frank Piatek, 72, of Elkhart, Indiana was sentenced by District Judge Robert L. Miller, Jr. to 15 months imprisonment with 1 year supervised release after pleading guilty to the felony offense of failure to register as a sex offender.According to documents filed in this case, upon his release from prison in Florida for child molesting, Piatek moved to Elkhart.Piatek took up residence at the Faith Mission, which also houses families with children.Piatek did not register in Indiana as a sex offender. This case was the result of an investigation by the US Marshals Service.This case was prosecuted by Assistant United States Attorney John Maciejczyk.
Dale Marshall, 54, of Logansport, Indiana was sentenced by District Judge Robert L. Miller, Jr. to 6 months imprisonment with 2 of years supervised release (6 months of which under home detention) after pleading guilty to the felony offense of using a communication facility in causing or facilitating another felony.According to documents filed in this case, in July 2012, Marshall used a phone to facilitate a marijuana transaction.This case was the result of an investigation by Drug Enforcement Administration.This case was prosecuted by Assistant United States Attorney Frank Schaffer.
James Ryans, 41, of Union, Michigan was sentenced by District Judge Robert L. Miller, Jr. to 87 months imprisonment (27 months on his guilty plea to one count of making false statements to federal officers and 60 months on his guilty plea to one count of interstate travel in aid of racketeering, which sentence is consecutive to his 27 month sentence) and 3 years supervised release.According to documents filed in this case, Ryans participated in an international drug trafficking business. He helped distribute large quantities of cocaine, marijuana, and methamphetamine. When summoned to a federal grand jury in 2009, Ryans lied to investigators after volunteering to speak to them. This case was the result of an investigation by the Federal Bureau of Investigation.This case was prosecuted by Assistant United States Attorney William Grimmer.
Week in Review – HammondRead the Press Release
Hammond, Indiana - The United States Attorney’s Office announced the following activity in Federal Court:
INDICTMENT:
An Indictment returned on November 21, 2013 charged five individuals with identity theft:
Alexis Young, 31, of Hammond, Indiana was charged with one count of conspiracy to commit identity theft, three counts of aggravated identity theft, one count of HIPPA violation and six counts of unlawful use and disclosure of Social Security Numbers;
Angela Young, 41, of Chicago Heights, Illinois was charged with one count of conspiracy to commit identity theft and three counts of aggravated identity theft;
Cynthia Mullins, 45, of Gary, Indiana was charged with one count of conspiracy to commit identity theft;
Montrease Young, 30, of Chicago, Illinois was charged with one count of conspiracy to commit identity theft; and
Chavon Jackson, 27, of Hammond, Indiana was charged with one count of conspiracy to commit identity theft.
These charges were filed as the result of an investigation by the United States Postal Service-Office of the Inspector General.This case has been assigned to and will be prosecuted by Assistant United States Attorney Toi Houston.
The United States Attorney's Office emphasized that an Indictment is merely an allegation and that all persons charged are presumed innocent until and unless proven guilty in court.
PLEAS:
Claude Hunter, 57, of Schererville, Indiana, pled guilty before Chief Judge Philip Simon to the felony offense of sale of a firearm to a known felon.Sentencing has been set for 3/6/14.This charge was filed as a result of an investigation by the Federal Bureau of Investigation.This case is being prosecuted by Assistant United States Attorney Joshua Kolar.
Kenneth Sandidge, 54, of Gary, Indiana, pled guilty before Senior District Judge Rudy Lozano to the felony offense of possession of a firearm by a convicted felon.This charge was filed as a result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Lake County Police Department.This case is being prosecuted by Assistant United States Attorney Nicholas Padilla.
Terrance Winton, 49, of Merrillville, Indiana, pled guilty before District Judge Joseph Van Bokkelen to the felony offense of possession with the intent to distribute crack cocaine.This charge was filed as a result of an investigation by the Federal Bureau of Investigation GRIT Task Force.This case is being prosecuted by Assistant United States Attorney Jennifer Chang-Adiga.
George Van Til, 66, of Merrillville, Indiana, pled guilty before Senior District Judge James Moody to six counts of the felony offense of wire fraud.These charges were filed as a result of an investigation by the Federal Bureau of Investigation.This case is being prosecuted by Assistant United States Attorneys Philip Benson and Joshua Kolar.
Ronald Holmes, 47, of Griffith, Indiana, pled guilty before Chief Judge Philip Simon to the felony offense of violating a requirement of a pretreatment program approved by the EPA in that he caused the discharge of pollutants into the Hammond Sanitary District’s publicly-owned treatment works when he had not been issued a permit to do so.NH Environmental Group, Inc. also plead guilty to a misdemeanor information filed at the same time charging that they introduced and caused to be introduced, hauled and trucked pollutants into a publicly owned treatment works.Sentencing has been set for 3/14/14.This charge was filed as a result of an investigation by the Environmental Protection Agency.This case is being prosecuted by Assistant United States Attorney Toi Houston.
Tonja Muldrow, 34, of Michigan City, Indiana, pled guilty before Chief Judge Philip Simon to the felony offense of possession of a firearm by a convicted felon.This charge was filed as a result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Michigan City Police Department.This case is being prosecuted by Assistant United States Attorney Dean Lanter.
Kevin Wilkerson, 39, formerly of Gary and Crown Point, Indiana, pled guilty before District Judge Joseph Van Bokkelen to the felony offense of bank robbery.This charge was filed as a result of an investigation by the Federal Bureau of Investigation and the Gary Police Department.This case is being prosecuted by Assistant United States Attorney Diane Berkowitz.
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.
DISPOSITIONS:
Daniel Rivas, 34, of East Chicago, Indiana, was sentenced by Senior District Judge James Moody to 46 months imprisonment and 4 years of supervised release after pleading guilty to the felony offense of possession with the intent to distribute marijuana.According to documents filed in this case, Rivas took delivery of a shipment of drugs originating in Brownsville, Texas destined for Griffith, Indiana.The shipment contained 8 boxes, each containing approximately 35-50 pounds of marijuana.This case was the result of an investigation by the Federal Bureau of Investigation GRIT Task Force.This case was prosecuted by Assistant United States Attorney Nicholas Padilla.
Roman Perez, 42, of Crown Point, Indiana, was sentenced by Chief Judge Philip Simon to24 months of probation, 50 hours of community service and restitution of $26,417 after pleading guilty to the felony offense of making false statements on a tax return and making false statements in a bankruptcy proceeding.According to documents filed in this case, Perez understated his total taxable income by approximately $110,000 of which approximately $80,000 constituted payments from both the Lake County Treasurer and the Lake County Sheriff’s Commissary Fund to Roman Art Inc., a graphic design business owned by Perez.Perez also understated his gross income for the year 2009 by an amount in excess of $40,000 in a bankruptcy proceeding.This case was the result of an investigation by the Internal Revenue Service and the Federal Bureau of Investigation.This case was prosecuted by Assistant United States Attorney Philip Benson.
Lakita Lee, 36, of Gary, Indiana, was sentenced by District Judge Joseph Van Bokkelen to 16 months of probation (10 months of this probationary period to be served on home detention), restitution of $32,608 to the Social Security Administration and a $1,000 fine after pleading guilty to the felony offense of theft of government property.According to documents filed in this case, Lee was a Social Security representative payee for Marva Davis.Lee did not report to Social Security that Davis had died and continued to complete paperwork, signed under oath, stating that she was using the disability benefit funds for the benefit of Davis, instead Lee was using the funds for her own benefit.This case was the result of an investigation by the Social Security Administration-Office of the Inspector General.This case was prosecuted by Assistant United States Attorney Gary Bell.
Jose Lechuga-Carrasco, 39, of Cicero, Illinois, was sentenced by Chief Judge Philip Simon to 37 months of imprisonment and 2 years of supervised release after pleading guilty to the felony offense of possession with the intent to distribute and distributing cocaine.According to documents filed in this case, law enforcement found approximately 500 grams of cocaine concealed in Lechuga-Carrasco’s car after a traffic stop in Hammond, Indiana.This case was the result of an investigation by the Drug Enforcement Administration and the Hammond Police Department.This case was prosecuted by Assistant United States Attorney Joshua Kolar.
David Hernandez-Cervantes, 53, of Chicago, Illinois, was sentenced by Senior District Judge James Moody to 70 months imprisonment and 2 years of supervised release after pleading guilty to the felony offense of possession with the intent to distribute methamphetamine.According to documents filed in this case, Hernandez-Cervantes attempted to sell kilogram quantities of 99.5% pure methamphetamine. He was working with others in a large-scale distribution of an extremely dangerous drug. This case was the result of an investigation by the Drug Enforcement Administration.This case was prosecuted by Assistant United States Attorney Joshua Kolar.
Roberto Ramirez Cardona, 55, of Hammond, Indiana, was sentenced by Senior District Judge James Moody to 70 months imprisonment and 2 years of supervised release after pleading guilty to the felony offense of possession with the intent to distribute heroin.According to documents filed in this case, US Postal inspectors identified a package as possibly containing narcotics based on size, weight, shape and mailing origin.After confirming this suspicion, the package was wired with a device that would allow law enforcement to track its location and opening.When the package was delivered and the transmitter indicated the package had been opened, Federal Agents executed a search warrant at Cardona’s residence, finding, in addition to the heroin, marijuana, $10,000.00 dollars in US currency, multiple cell phones and wire receipts. This case was the result of an investigation by the United States Postal Service-Office of the Inspector General.This case was prosecuted by Assistant United States Attorney Nicholas Padilla.
Matthew Jasek, 31, of Demotte, Indiana, was sentenced by Chief Judge Philip Simon to 51 months imprisonment and 5 years of supervised release after pleading guilty to the felony offense of possession of child pornography.According to documents filed in this case, Jasek admitted that he possessed the equivalent of over 600 child pornography images and that he distributed some of the material through a file sharing program. He further admitted that he had been interested in child pornography for eight years, had received and possessed child pornography through several peer to peer file sharing programs, and had searched for child pornography as often as twice a week. This case resulted from an investigation by members of the Indiana Internet Crimes Against Children Task Force, including the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations.This case was prosecuted by Assistant United States Attorney Thomas McGrath.
Week in Review – Fort WayneRead the Press Release
Fort Wayne, Indiana —The United States Attorney’s Office announced the following activity in Federal Court:
DISPOSITIONS:
Glenda Brickey, 28, of Ligonier, Indiana was sentenced by District Judge Theresa L. Springmann to 37 months imprisonment with 2 years of supervised release after pleading guilty to the felony offense of knowingly or intentionally possessing with the intent to distribute methamphetamine.According to documents filed in this case, in December 2012, during a traffic stop, local law enforcement noticed suspicious behavior by Brickey.A drug canine alerted officers to a narcotic presence which led to a search of Brickey.During the search, a small amount of methamphetamine and a glass smoking pipe were discovered as well as additional drug evidence in the vehicle. This case was the result of an investigation by the Drug Enforcement Administration and was prosecuted by Assistant United States Attorney Anthony Geller.
Virginia Man Sentenced for <br /> Conducting $270 Million Investment Fraud SchemeRead the Press Release
The owner of a Virginia-based investment firm was sentenced today to serve 144 months in prison for orchestrating a $270 million stock loan scheme that defrauded his clients of more than $35 million.
Acting Assistant Attorney General Mythili Raman of the Department of Justice’s Criminal Division, Acting United States Attorney Dana J. Boente of the Eastern District of Virginia and Assistant Director in Charge Valerie Parlave of the FBI’s Washington Field Office made the announcement after sentencing by U.S. District Judge Gerald Bruce Lee of the Eastern District of Virginia.
William Dean Chapman, 44, of Sterling, Va., pleaded guilty to one count of wire fraud on May 23, 2013. Chapman was the founder and owner of Alexander Capital Markets (ACM), whose primary business was to offer a financial product that provided customers with a purportedly fully hedged loan at an above-market rate of interest against a customer’s securities. This served as collateral for the transaction for a percentage – typically between 85 percent and 90 percent – of the securities’ value. For example, in exchange for a customer’s Apple stock, ACM would provide a cash loan to that customer worth 85 percent or 90 percent of the stock’s value. After a period of time – between two and seven years, and typically three years – the customer could receive back their securities, or the equivalent cash value, if they repaid the balance of the loan plus accrued interest. Alternatively, because the loans were non-recourse, the customer could walk away at the end of the redemption period having already received up to 90 percent of the value of their securities.
ACM’s customers were assured that ACM was engaged in hedging transactions such that ACM would be able to return the full value of the securities, or the cash equivalent, at the end of the contract period. In reality, ACM simply sold the securities upon receipt, remitted up to 90 percent of the sales proceeds to its customers as the loan, and retained the remaining sales proceeds for itself and the parties who sold, marketed or facilitated the product.
Because ACM simply sold the securities upon receipt and no legitimate hedge existed, ACM could not return securities, or the cash equivalent, to the customers at the end of the redemption period unless it had sufficient funds to buy back the securities. By in or about April 2008, ACM was functionally insolvent. ACM did not have – and could not have expected to have – sufficient funds to cover its outstanding liabilities. Nevertheless, Chapman continued to solicit new customers despite knowing that ACM would never be able to fulfill its financial obligations.
Over seven years, Chapman took in more than $270 million in stock, and 122 victims lost more than $35 million as a result of this scheme. At the same time that ACM was amassing massive liabilities and failing to repay its existing clients, Chapman used his clients’ money to support a lavish lifestyle by purchasing a custom-built $3 million home in Great Falls, Va.; condominiums in the Turks & Caicos and Pompano Beach, Fla.; and a Lamborghini and Ferrari.
This case was investigated by the FBI’s Washington Field Office. The Criminal Division and the U.S. Attorney’s Office for the Eastern District of Virginia recognize the substantial assistance of the U.S. Securities and Exchange Commission on this case. Assistant United States Attorney Chad Golder and Trial Attorney Henry Van Dyck of the Criminal Division’s Fraud Section prosecuted the case on behalf of the United States.United States Files False Claims Act Complaint Against Washington Closure Hanford LLC, Federal Engineers and Constructors Inc, and Laura ShikashioRead the Press Release
Spokane – On Friday, the United States Attorney's Office for the Eastern District of Washington filed a civil complaint under the False Claims Act alleging that Washington Closure Hanford LLC (WCH) and others falsely claimed credit for awarding tens of millions of dollars-worth of federal subcontracting business to small businesses including woman-owned small businesses. The complaint alleges that WCH claimed such small businesses would perform subcontracted work, but that those companies were used merely as pass-throughs and the actual work was performed by another subcontractor, Federal Constructors Inc. (FE&C). WCH is a prime contractor of the Department of Energy (DOE) at the Hanford Site and is owned by URS Corporation, Bechtel National Inc., and CH2M Hill Companies Ltd.
DOE fully reimburses WCH for hundreds of millions of dollars in subcontracts awarded under the River Corridor Closure Contract. Accordingly, DOE mandates that WCH award a certain percentage of those subcontracts to small businesses and to disadvantaged small businesses, including woman owned small businesses, according to the complaint. Failure of WCH to meet these requirements or to not provide subcontracts to such small businesses in good faith can result in millions of dollars withheld from WCH by DOE, the complaint alleges.
The complaint alleges that WCH falsely represented to DOE that it had awarded three different multi-million dollar subcontracts to two different subcontractors, which it claimed qualified as small businesses or woman-owned small businesses when, as alleged in the complaint, they did not so qualify. These small businesses were merely acting as pass through companies for another subcontractor, FE&C, which was not a disadvantaged small business of any kind, according to the complaint.
The complaint alleges that, in May of 2009, WCH awarded a subcontract referred to as the Truck & Pup subcontract to Phoenix Enterprises Northwest (Phoenix) claiming that Phoenix was a small business. The Small Business Administration (SBA) determined about a month later that Phoenix was merely acting as a pass through company for another subcontractor, FE&C, that did not qualify as a small business but was actually doing the work. According to the complaint, rather than re-bid the subcontract, WCH agreed to not claim small business credit and allow Phoenix and FE&C to keep the subcontract. However, beginning less than a year later in 2010, despite knowing of the SBA determination and despite having agreed not to claim the small business credit, WCH falsely represented to DOE that it was entitled to over $2.7 million worth of small business credit for modifications to the Truck & Pup Subcontract, the complaint alleges.
In November of 2010, according to the complaint, WCH awarded another multimillion dollar subcontract that involved FE&C. The complaint alleges that WCH falsely represented to DOE that it was entitled to small business credit for this subcontract, referred to as the 100 Area Subcontract, because a woman-owned small business, Sage Tec LLC, would perform on the contract with FE&C as a teaming partner. In fact, according to the allegations, Sage Tec only had one employee, its owner Laura Shikashio, and WCH and FE&C knew that Sage Tec would merely be acting as a pass through company. As alleged in the complaint, in performing on the 100 Area Subcontract Sage Tec simply used FE&C's employees, which stayed on the FE&C payroll, and in that manner merely acted as a pass through contributing only its woman-owned small business name to the project.
The complaint further alleges that in October of 2012 WCH once again awarded a multimillion dollar subcontract, worth over $15 million, that involved FE&C. As with the 100 Area Subcontract, the complaint alleges that WCH falsely represented to DOE that it was entitled to disadvantaged small business credit for this subcontract, referred to as the 300 Area Subcontract, because Sage Tec would perform on the contract with FE&C as a teaming partner. In fact, according to the allegations, Sage Tec still only had one employee, its owner Laura Shikashio, and WCH and FE&C knew that Sage Tec would be acting, once again, as a pass through company merely contributing its woman owned small business name with FE&C performing the work, just as with the previous subcontract.
The Department of Energy Office of Inspector General and the Small Business Administration Office of Inspector General is investigating the case. "SBA's set-aside contracting programs are intended to give small businesses the best opportunity to provide goods and services to the federal government," said SBA Inspector General Peggy E. Gustafson. "The fraud alleged in this complaint egregiously denied the government the opportunity to obtain tens of millions of dollars-worth of federal subcontracting from small businesses."
Pursuant to the False Claims Act, the United States is seeking damages and civil penalties from WCH, FE&C, Sage Tec, and Laura Shikashio for their roles in the alleged fraud. In filing this civil complaint the United States is partially intervening in a whistleblower law suit brought under the False Claims Act against WCH, FE&C, and others by Salina Savage and Savage Logistics LLC. Ms. Savage has pending False Claims Act allegations against WCH and FE&C that are in addition to those in the United States' complaint. In its complaint the United States is also suing WCH for breaching its contract with DOE for making the false statements about its small business subcontracting to DOE. The United States is also suing WCH, FE&C, Sage Tec, and Ms. Shikashio for payment by mistake and for being unjustly enriched as a result of the alleged fraud.
The United States' complaint is captioned as United States of America ex rel. Salina Savage, Savage Logistics LLC, vs. Washington Closure Hanford LLC, Federal Engineers and Constructors, Inc., Sage Tec LLC, and Laura Shikashio, CV-10-5051-EFS.
United Kingdom National Sentenced for Resisting Deportation OrdersRead the Press Release
LAKE CHARLES, La. – United States Attorney Stephanie A. Finley announced today that Michael Phillip Telemaque, 47, of the United Kingdom, was sentenced by U.S. District Judge Patricia Minaldi to 57 months in prison followed by three years of supervised release for four counts of impeding or hampering his deportation. A federal jury found Telemaque guilty on September 10, 2013 after a two-day trial.
Witness testimony and documents admitted at trial revealed that Telemaque refused to fill out passport applications for his deportation to the United Kingdom four times between November 2010 and September 2011. In addition to the application requirement, the United Kingdom also requires that Telemaque must speak to a representative of the consulate, provide fingerprints and a photo, and show proof that he is a United Kingdom citizen. He refused to perform any of these tasks. Telemaque was convicted in January 1997 of selling crack cocaine and received a 180-month prison sentence. He was ordered to be removed from the United States in June of 2010.
The Immigration and Customs Enforcement - Enforcement and Removal Operations conducted the investigation. Assistant U.S. Attorney James T. McManus and Special Assistant U.S. Attorney Robert C. Abendroth prosecuted the case.
United Kingdom National Sentenced for Resisting Deportation OrdersRead the Press Release
LAKE CHARLES, La. – United States Attorney Stephanie A. Finley announced today that Michael Phillip Telemaque, 47, of the United Kingdom, was sentenced by U.S. District Judge Patricia Minaldi to 57 months in prison followed by three years of supervised release for four counts of impeding or hampering his deportation. A federal jury found Telemaque guilty on September 10, 2013 after a two-day trial.
Witness testimony and documents admitted at trial revealed that Telemaque refused to fill out passport applications for his deportation to the United Kingdom four times between November 2010 and September 2011. In addition to the application requirement, the United Kingdom also requires that Telemaque must speak to a representative of the consulate, provide fingerprints and a photo, and show proof that he is a United Kingdom citizen. He refused to perform any of these tasks. Telemaque was convicted in January 1997 of selling crack cocaine and received a 180-month prison sentence. He was ordered to be removed from the United States in June of 2010.
The Immigration and Customs Enforcement - Enforcement and Removal Operations conducted the investigation. Assistant U.S. Attorney James T. McManus and Special Assistant U.S. Attorney Robert C. Abendroth prosecuted the case.
U.S. District Court Finds Joseph Edward Duncan, III CompetentRead the Press Release
Judge Lodge Reinstates Previous Order
BOISE — Convicted child murderer Joseph Edward Duncan, III, was found competent to waive his appeal in November 2008 after a federal jury sentenced him to death in August 2008 for the kidnapping and murder of a nine-year-old north Idaho boy. United States District Court Judge Edward J. Lodge issued his 66-page order finding Duncan competent today. The order followed a six week retrospective competency hearing conducted by Judge Lodge in January and February of this year.
In July of 2011, the Ninth Circuit Court of Appeals remanded this case to the district court for a hearing to determine whether defendant Joseph Edward Duncan, III, competently waived his right to appeal in November 2008. That decision followed a filing in the Ninth Circuit by Duncan’s then-defense counsel. The defendant, who was representing himself at the time, indicated in both a letter to this Court and in a November 24, 2008, hearing that he did not wish to appeal. On August 27, 2008, a federal capital sentencing jury had returned three death sentence verdicts for the defendant’s intentional murder of the nine-year-old boy, D.G. Judge Lodge, as required by law, imposed those sentences. On November 13, 2008, Judge Lodge also imposed other, non-capital sentences for federal crimes committed from April through July of 2005, including sexual assault of a then-eight-year-old north Idaho girl.
“The United States is pleased with this careful, considered decision,” said U.S. Attorney Wendy J. Olson. “As we argued to the Court at the hearing, this defendant demonstrated his competency from the time he meticulous planned his crimes in North Dakota, to the time he carried them out in Idaho and Montana, through his participation in the capital sentencing hearing and in post-hearing interviews with FBI agents. We will continue to defend Judge Lodge’s deliberate and thorough consideration of the defendant’s competency just as we will continue to seek justice for the victims in this case through any additional appellate proceedings. The kidnapping, sexual assault and murder of this nine-year-old boy and the kidnapping and sexual assault of his sister were heinous crimes and a tragic chapter for all Idahoans, but for the sake of the surviving victim and her family, we need to bring it to a close.”
Two Georgia Residents Sentenced for Sex TraffickingRead the Press Release
ALEXANDRIA, Va. – Quintavis Deonte Dumas, age 23, and Koya Tiffany Rooke, age 24, both of Snellville, Georgia, were each sentenced today to 10 years in prison for Sex Trafficking of a Child. Dumas and Rooke were also ordered to pay a total of $17,572.47 in restitution.
Dana J. Boente, Acting United States Attorney for the Eastern District of Virginia, Colonel Edwin C. Roessler, Jr., Chief of the Fairfax County Police Department, and Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office made the announcement after sentencing by United States District Judge Gerald Bruce Lee.
Dumas and Rooke were found guilty by a jury on September 16, 2013. The evidence at trial showed that Dumas and Rooke were members of an organization that prostituted teenage girls in various states, including Virginia, Florida, South Carolina, and Georgia. Dumas and Rooke frequently would rent the cars that were used to transport the teenage victims to the various places where they were prostituted.
Rooke and Dumas rented hotels rooms where commercial sex acts occurred and allowed their computer to be used to post advertisements that were posted on Backpage.com to solicit customers. Rooke herself was a prostitute and sometimes performed commercial sex acts with customers along with the victims. Rooke was the girlfriend of Quintavis Dumas. Besides transporting victims and renting hotel rooms, Quintavis Dumas carried a firearm to ensure that the proceeds were secure and sometimes obtained drugs that were provided to the teenage victims. In March 2013, two other members of the ring, Edwin Barcus, Jr. and Joshua Deonte Dumas, pleaded guilty to engaging in a Child Exploitation Enterprise. Barcus was sentenced to 25 years of imprisonment while Joshua Dumas was sentenced to 19.9 years of imprisonment.
This case was investigated by the Fairfax County Police Department and the Federal Bureau of Investigation. Assistant United States Attorney Michael J. Frank and Special Assistant United States Attorney C. Alexandria Bogle prosecuted the case on behalf of the United States.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.Two Former Miami-Dade Residents Sentenced for Their Role in Smuggling Cocaine Aboard Cargo ShipsRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Alysa D. Erichs, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI), announce that David Rodriguez, 47, of Miami, and Rogny Jerez Lopez, 35, of Hialeah, were sentenced on December 4, 2013 for their role in a drug importation conspiracy involving the smuggling of cocaine aboard cargo ships operated by King Ocean Services. U.S. District Judge K. Michael Moore sentenced David Rodriguez to 235 months in prison, to be followed by five years of supervised release, and Rogny Jerez Lopez to 87 months in prison, followed by two years of supervised release.
The investigation revealed that beginning in approximately 2005 through 2012, Rodriguez, the leader of a Miami-based drug-trafficking organization, and Jerez Lopez, a former King Ocean Services employee working at Port Everglades, were involved in the importation of millions of dollars’ worth of cocaine. Rodriguez, Jerez Lopez and their co-conspirators smuggled the cocaine into the United States by having it concealed inside cargo containers while King Ocean Services cargo vessels were docked at ports overseas. Once the vessels arrived at Port Everglades, Jerez Perez assisted in removing the narcotics from the cargo vessels and into the hands of drug traffickers under the direction of Rodriguez.
This case was the result of an ongoing Organized Crime Drug Enforcement Task Force (OCDETF) led by ICE-HSI. 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.
Mr. Ferrer commended the investigative efforts of ICE-HSI, the South Florida Money Laundering Strike Force, the Broward Sheriff's Office and the DEA. The case was prosecuted by Assistant U.S. Attorney Aimee Jimenez.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Three Cleveland Men Given Lengthy Prison Sentences for Bank RobberiesRead the Press Release
Three Cleveland men sentenced to lengthy prison terms this week for their roles in unrelated bank robberies, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, and Stephen D. Anthony, Special Agent in Charge of the Federal Bureau of Investigation’s Cleveland office.
Perry Johnson, 21, was sentenced to 25 years in prison. Charles D. Moore, 28, was sentenced to more than 16 years in prison and Mitchell Perkins, 28, was sentenced to nearly 12 years in prison.
“These three defendants put everyday customers in grave danger,” Anthony said. “The sentences demonstrate that the FBI Violent Crimes Task Force will continue efforts to investigate and remove menacing criminals from our streets.”
Johnson was found guilty of two armed robberies of CVS pharmacies last year in which he threatened the use of a firearm and took cash and prescription medication.
Johnson robbed the CVS pharmacy at 10022 Madison Avenue on Nov. 16 and the CVS pharmacy at 3171 West Boulevard on Nov. 23, 2012.
In the first robbery, he threatened the use of a firearm and took five bottles of prescription medication and cash from a CVS employee, according to the indictment. In the second robbery, Johnson pointed a firearm at CVS employees and took cash, 30 bottles of prescription medication and other merchandise, according to court documents.
Moore was found guilty of one count of armed bank robbery. This charge arises from the July 9, 2013, bank robbery of the PNC Bank at 20711 Chagrin Boulevard. in Shaker Heights, when Moore held the bank manager at gunpoint and stole approximately $46,000 from the bank's tellers, according to court documents.
Perkins was found guilty of armed bank robbery and using a firearm during the commission of a felony. He robbed the U.S. Bank at 5154 Wilson Mills Road in Richmond Heights, Ohio, on May 29, 2012, according to court documents.
The cases were all investigated by the Federal Bureau of Investigation and handled by prosecutors in the U.S. Attorney’s Office.
Thirteen Defendants Plead Guilty for December 2010 Cyber-Attack Against PayPalRead the Press Release
SAN JOSE – Thirteen defendants pleaded guilty in federal court in San Jose yesterday to charges related to their involvement in the cyber-attack of PayPal’s website as part of the group “Anonymous,” United States Attorney Melinda Haag announced. One of the defendants also pleaded guilty to the charges arising from a separate cyber-attack on the website of Santa Cruz County.
In pleading guilty, the defendants admitted to carrying out a Distributed Denial of Service (DDoS) cyber-attack against PayPal in December 2010.
These DDoS attacks were facilitated by software tools designed to damage a computer network’s ability to function by flooding it with useless commands and information, thus, denying service to legitimate users. A group calling itself “Anonymous” claimed responsibility for the attacks, saying they conducted the attacks in protest of the companies’ and organizations’ actions. The attacks were facilitated by the software tools “Anonymous” made available for free download on the Internet. The victims included major U.S. companies across several industries.
According to the plea agreements and statements made in court, in late November 2010, WikiLeaks released a large amount of classified United States State Department cables on its website. Citing violations of the PayPal terms of service, and in response to WikiLeaks’ release of the classified cables, PayPal suspended WikiLeaks’ accounts such that WikiLeaks could no longer receive donations via PayPal. WikiLeaks’ website declared that PayPal’s action “tried to economically strangle WikiLeaks.”
The plea agreements further state that, in retribution for PayPal’s termination of WikiLeaks’ donation account, Anonymous coordinated and executed DDoS attacks against PayPal’s computer. Anonymous referred to these co-ordinated attacks on PayPal as “Operation Avenge Assange.”
The following defendants pleaded guilty:
- CHRISTOPHER WAYNE COOPER, dob 10/21/87, aka “Anthrophobic,” Elberta, Alabama
- JOSHUA JOHN COVELLI, dob 1/10/85, aka “Absolem, and, “Toxic,” Fairborn, Ohio
- KEITH WILSON DOWNEY, dob 11/7/84, Jacksonville, Florida
- MERCEDES RENEE HAEFER, dob 6/21/91, aka “No,” and “MMMM,” Las Vegas, Nevada
- DONALD HUSBAND, dob 8/14/81, aka “Ananon,” Fairfield, California
- VINCENT CHARLES KERSHAW, dob 2/23/84, aka “Trivette,” “Triv,” and “Reaper,” Fort Collins, Colorado
- ETHAN MILES, dob 9/1/77, Flagstaff, Arizona
- JAMES C. MURPHY, dob 11/15/74, Baldwin Park, California
- DREW ALAN PHILLIPS, dob 4/15/85, aka “Drew010,” Santa Rosa, California
- . JEFFREY PUGLISI, dob 2/19/83, aka “Jeffer,” “Jefferp,” and “Ji,” Clinton Township, Michigan
- DANIEL SULLIVAN, dob 6/29/89, Camarillo, California
- TRACY ANN VALENZUELA, dob 2/11/69, Napa, California
- CHRISTOPHER QUANG VO, dob 5/16/89, Attleboro, Massachusetts
With the exception of Valenzuela, Phillips and Miles, each of the defendants pleaded guilty to one count of Conspiracy, in violation of 18 USC 1030(b)(Felony), and one count of Intentional Damage to a Protected Computer, in violation of 18 USC 1030(a)(5)(A)(Misd.). Defendant Valenzuela pleaded guilty to one count of Reckless Damage to a Protected Computer, in violation of 18 USC 1030(a)(5)(A)(Misd.). Defendants Phillips and Miles were permitted to plead guilty to one count each of Intentional Damage to a Protected Computer, in violation of 18 USC 1030(a)(5)(A)(Misd.) only.
The terms of the plea agreements allow that unless a defendant violates any of the terms of the plea agreement or fails to accept responsibility, at the time of sentencing, the defendant may make an unopposed motion to withdraw his/her guilty plea to Count One, Conspiracy to Commit Intentional Damage to a Protected Computer in violation of 18 U.S.C. 1030(b) and the government will dismiss Count One, leaving only the misdemeanor count of violating of 18 U.S.C. 1030(a)(5)(A) to be entered as a final judgment against the defendant.
Defendant Joshua John Covelli also pleaded guilty to executing a DDoS attack (with another defendant, presently a fugitive) against the Santa Cruz County web server, admitting that it was in retaliation for a statute enacted by the City of Santa Cruz. The City of Santa Cruz enacted Section 6.36.010 of its Municipal Code, entitled “Camping Prohibited,” which contained restrictions and definitions on camping within Santa Cruz City. In response to the enforcement of Section 6.36.010, protesters occupied the Santa Cruz County Courthouse premises from approximately July 4, 2011 to October 2, 2011. Law enforcement officers from Santa Cruz County disbanded the protest and several protesters were charged with misdemeanors crimes in Santa Cruz County.
According to Covelli’s plea agreement and statements in court, in retribution for Santa Cruz City’s enforcement of Section 6.36.010 of the Municipal Code, and Santa Cruz County’s disbandment of the protest, Covelli and others, calling themselves the “People’s Liberation Front’” or “PLF,” and claiming to be associated with the “Anonymous” group, co-ordinated and executed an attack against Santa Cruz County’s computer servers. The PLF referred to these coordinated attacks on Santa Cruz County as “Operation Peace Camp 2010.”
The defendants are currently released on bond.
The sentencing hearings for twelve of the defendants are scheduled for December 4, 2014 at 10:00 a.m. before the Honorable D. Lowell Jensen, United States District Court Judge, in San Jose. Tracy Valenzuela’s sentencing hearing is scheduled for November 20, 2014 at 10:00 a.m. before Judge Jensen as well. The maximum statutory penalty for each count in violation of 18 United States Code, Section 1030(b) – Conspiracy (Felony), is 5 years imprisonment and a $250,000 fine; for each count in violation of 18 United States Code, Section 1030(a)(5)(A) – Intentional Damage to a Protected Computer (Felony), is 10 years imprisonment and a $250,000 fine; for each count in violation of 18 United States Code, Sections 1030(a)(5)(A) & (c)(4)(G)(i) – Intentional Damage to a Protected Computer (Misd.) is 1 year in prison and a $100,000 fine, and for each count in violation of 18 United States Code, Sections 1030(a)(5)(A) & (c)(4)(G)(i) – Reckless Damage to a Protected Computer (Misd.) is 1 year in prison and a $100,000 fine.
However, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Matt Parrella and Hanley Chew are the Assistant U.S. Attorneys who prosecuted the case with the assistance of Elise Etter. The prosecution is the result of an investigation by the Federal Bureau of Investigation, along with cooperation from PayPal. Authorities in the Netherlands, Germany and France have also taken their own investigative and enforcement actions.
The National Cyber-Forensics and Training Alliance, a public-private partnership whose mission to identify, mitigate, and neutralize cyber-crime, also provided assistance.
(Anonymous superseding indictment )
Third Former Bank Employee Pleads GuiltyTo Embezzling from A Grant County BankRead the Press Release
WICHITA, KAN. – A third former bank employee has pleaded guilty to embezzling from a bank in Grant County, Kan., U.S. Attorney Barry Grissom said today.
Linda Wise, 60, Ulysses, Kan., pleaded guilty Thursday to one count of theft from a bank. In her plea, she admitted that from late 2010 to March 2013 while she worked at Western State Bank in Ulysses, Kan., she embezzled money from the bank.
Subsequent to July 24, 2010, she conspired with fellow employees and co-defendants Ashley Cravens and Amber Gutierrez to steal money from the bank. From late 2010 to March 2013, the three stole a total of $24,450 from the bank.
Co-defendants are: Amber Gutierrez, 32, Ulysses, Kan., who is set for sentencing Feb. 4.
Ashley Cravens, 29, Ulysses, Kan., who is set for sentencing Feb. 7.
Hattie Wiginton, 33, Ulysses, Kan., who is set for jury trial Jan. 21.Grissom commended the FBI, the KBI, the Grant County Sheriff=s Office, the Ulysses Police Department and Assistant U.S. Attorney Aaron Smith for their work on the case.
In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.
Syrian National Sentenced for Social Security FraudRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Syrian national was sentenced in federal court today for Social Security fraud.
Mohamad Yasser Baiazid, 71, a naturalized U.S. citizen from Syria who resided in Kansas City, Mo., was sentenced by U.S. District Judge Howard F. Sachs to one year and one day in federal prison without parole. Baiazid must pay $34,429 in restitution.
On July 31, 2013, Baiazid pleaded guilty to theft of government money by receiving Social Security benefits that he was not entitled to receive. Baiazid admitted that he resided outside of the United States for several years while receiving Supplemental Security Income (SSI) benefits. Baiazid admitted that his actions caused the government to incur a fraud loss of $34,179, for which he must pay restitution. Baiazid also received a one-time $250 payment to which he was not entitled under the American Recovery and Reinvestment Act of 2009, for which he also must pay restitution.
Baiazid applied for SSI benefits on Nov. 29, 2007. Beneficiaries of SSI may not reside outside of the country for a full calendar month or for 30 consecutive days or more. Beneficiaries who reside outside of the United States for more than a full calendar month or for 30 consecutive days or more are no longer eligible to receive SSI benefits. Accordingly, SSI beneficiaries have a duty to notify the Social Security Administration if they leave the United States and are gone for a full calendar month or for 30 consecutive days or more.
Baiazid lived outside the United States on three separate occasions. On Jan. 25, 2008, he traveled to Syria and did not return to the United States until Oct. 21, 2009 – approximately one year and 10 months later. On Jan. 21, 2012, Baiazid traveled to Syria and remained outside the United States until Feb. 24, 2010 – more than one month. Baiazid again left the United States headed for Syria on May 23, 2010, and resided outside of the United States until May 2, 2013 – nearly three years.
Upon his return to the United States in 2013, Baiazid initially had a return ticket to Beirut, Lebanon, leaving Kansas City International Airport on July 7, 2013. After learning that he was a target of a criminal investigation, he amended his flight plans and attempted to leave the United States on May 21, 2013.
When Baiazid was interviewed by an employee of the Social Security Administration in January 2010, he falsely claimed to be living in Kansas City since 2007. In a March 2010 interview, Baiazid again falsely claimed he had not been outside the United States for a calendar month or 30 consecutive days since November 2007. Baiazid was interviewed again in May 2013 and falsely claimed that he had not traveled outside the United States (except for a one-week visit to France).
This case was prosecuted by Assistant U.S. Attorney Trey Alford. It was investigated by the Social Security Administration, Office of Inspector General, Office of Investigations.Sterling Man Sentenced ForConducting $270 Million Investment Fraud SchemeRead the Press Release
ALEXANDRIA, Va. – William Dean Chapman, 44, of Sterling, Va., was sentenced today to 144 months in prison, for orchestrating a $270 million stock loan scheme that defrauded his clients of more than $35 million.
Dana J. Boente, Acting United States Attorney for the Eastern District of Virginia, Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office and Mythili Raman, Acting Assistant Attorney General of the Justice Department’s Criminal Division, made the announcement after sentencing by United States District Judge Gerald Bruce Lee.
William Dean Chapman, 44, of Sterling, Va., pleaded guilty to one count of wire fraud on May 23, 2013. Chapman was the founder and owner of Alexander Capital Markets (ACM), whose primary business was to offer a financial product that provided customers with a purportedly fully hedged loan at an above-market rate of interest against a customer’s securities. This served as collateral for the transaction for a percentage – typically between 85 percent and 90 percent – of the securities’ value. For example, in exchange for a customer’s Apple stock, ACM would provide a cash loan to that customer worth 85 percent or 90 percent of the stock’s value. After a period of time – between two and seven years, and typically three years – the customer could receive back their securities, or the equivalent cash value, if they repaid the balance of the loan plus accrued interest. Alternatively, because the loans were non-recourse, the customer could walk away at the end of the redemption period having already received up to 90 percent of the value of their securities.
ACM’s customers were assured that ACM was engaged in hedging transactions such that ACM would be able to return the full value of the securities, or the cash equivalent, at the end of the contract period. In reality, ACM simply sold the securities upon receipt, remitted up to 90 percent of the sales proceeds to its customers as the loan, and retained the remaining sales proceeds for itself and the parties who sold, marketed or facilitated the product.
Because ACM simply sold the securities upon receipt and no legitimate hedge existed, ACM could not return securities, or the cash equivalent, to the customers at the end of the redemption period unless it had sufficient funds to buy back the securities. By in or about April 2008, ACM was functionally insolvent. ACM did not have – and could not have expected to have – sufficient funds to cover its outstanding liabilities. Nevertheless, Chapman continued to solicit new customers despite knowing that ACM would never be able to fulfill its financial obligations.
Over seven years, Chapman took in more than $270 million in stock, and 122 victims lost more than $35 million as a result of this scheme. At the same time that ACM was amassing massive liabilities and failing to repay its existing clients, Chapman used his clients’ money to support a lavish lifestyle by purchasing a custom-built $3 million home in Great Falls, Va.; condominiums in the Turks & Caicos and Pompano Beach, Fla.; and a Lamborghini and Ferrari.
This case was investigated by the FBI’s Washington Field Office. The Criminal Division and the U.S. Attorney’s Office for the Eastern District of Virginia recognize the substantial assistance of the U.S. Securities and Exchange Commission on this case. Assistant United States Attorney Chad Golder and Trial Attorney Henry Van Dyck of the Criminal Division’s Fraud Section prosecuted the case on behalf of the United States.Southington Man Sentenced to 30 Months for Mortgage Fraud and Money Laundering OffensesRead the Press Release
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Deirdre M. Daly, Acting United States Attorney for the District of Connecticut, announced that HENRY J. PAPALE, 62, of Southington, was sentenced today by Senior U.S. District Judge Ellen Bree Burns in New Haven to 30 months of imprisonment, followed by three years of supervised release, for operating a mortgage fraud scheme.
According to court documents and statements made in court, in 2007, PAPALE convinced others to purchase four investment homes in Florida using mortgage loans. To inflate the size of the mortgages above the purchase prices for the properties, PAPALE submitted fraudulent invoices, work authorizations and wire transfer instructions to a settlement agent in Florida, each purportedly from a construction company for restoration on the properties. In fact, the construction company was fictitious and no work was performed on the properties. Following the closing on each sale, the Florida settlement agent wired loan proceeds, in amounts that corresponded to the cost of the restoration work, to a bank account in Southington that it believed belonged to the fictitious construction company, but was actually held by certain of PAPALE’s family members.
A total of $360,307.23 was transferred to PAPALE’s family members in this manner. Based on PAPALE’s representations, a member of PAPALE’s family then turned the majority of the fraudulently-obtained loan proceeds over to PAPALE, who deposited them into his own bank account. PAPALE ultimately transferred $255,500 in fraudulently obtained loan funds from that bank account to an investment trading account he held.
On August 13, 2013, PAPALE pleaded guilty to one count of wire fraud and one count of money laundering.
This matter was investigated by the Federal Bureau of Investigation and was prosecuted by Assistant U.S. Attorneys Jonathan N. Francis and Michael S. McGarry.
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(203) 821-3722 [email protected]Sioux Falls Man Convicted in Sex Trafficking CaseRead the Press Release
United States Attorney Brendan V. Johnson announced that Mohammed Sharif Alaboudi, age 45, of Sioux Falls, South Dakota, was found guilty of four counts of sex trafficking, including sex trafficking by force and sex trafficking of a child. The guilty verdicts followed a four-day federal jury trial in Sioux Falls. Each of the four counts carries a maximum prison term of life. Three counts carry mandatory minimum prison terms of 15 years.
In 2011, the Sioux Falls Police Department (SFPD) Street Crimes Unit began investigating a criminal organization operating in and around Sioux Falls. Witnesses identified several individuals they claimed had been selling narcotics and prostitutes. In January 2012, the SFPD requested federal assistance, and a team consisting of the Department of Homeland Security–Criminal Investigations, the Federal Bureau of Investigation, the SFPD, and the South Dakota Division of Criminal Investigation began investigating the case.
Investigators discovered that Alaboudi was living in a one-bedroom, upstairs apartment in a house several blocks from downtown Sioux Falls. Girls and young women, many homeless and suffering from addiction, would frequent Alaboudi’s residence where he provided drugs and a place to stay. At trial, victims and other witnesses described how, once they were there, Alaboudi would use violence and drugs to force them into having sex with him and with other men who would come to the apartment and pay Alaboudi with drugs and money.
“Alaboudi operated a house of horrors right here in South Dakota. He lured women and young girls to his home and then kept them high on drugs and alcohol while forcing them to engage in sex acts with strangers,” said Johnson. “This case reminds us that when people fall through the cracks in our community, there are sexual predators waiting in the wings to exploit them. Thanks to the outstanding work of law enforcement, Mr. Alaboudi’s days of preying on the most vulnerable citizens in our community are over.”
Alaboudi was indicted by a federal grand jury on November 6, 2012, as a co-defendant of Emmanuel Nyuon, alleging the two men conspired to engage in the sex trafficking of one child victim. On March 6, 2013, the grand jury added additional charges against Alaboudi regarding another child victim and an adult victim. Alaboudi’s and Nyuon’s cases were severed on March 11, 2013. A count regarding a fourth victim was added against Alaboudi on May 8, 2013. Nyuon was convicted on April 5, 2013, following a separate jury trial, and he is currently serving a federal prison sentence of 30 years.
“The Civil Rights Division commends the District of South Dakota for vindicating the rights and dignity of some of the most vulnerable members of our society—the homeless young women and girls the defendant cruelly exploited and sold for sex,” commented Jocelyn Samuels, Acting Assistant Attorney General of the Justice Department’s Civil Rights Division. “When human traffickers prey on those hidden in the shadows, destroying human lives for their own profit, they offend the values of liberty and justice for all that lie at the heart of our nation. We are committed to bringing these traffickers to justice.”
This case was investigated by the SFPD, the Federal Bureau of Investigation, Department of Homeland Security—Criminal Investigations, and the South Dakota Division of Criminal Investigation. Assistant U.S. Attorneys Kevin Koliner and Jeff Clapper prosecuted the case.
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. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to 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.
A presentence investigation was ordered. Alaboudi was remanded to the custody of the U.S. Marshals Service and a sentencing date will be set.Rockford Tax Preparer Pleads Guilty to Filing False Personal Income Tax ReturnRead the Press Release
ROCKFORD — A Rockford, Ill. woman pleaded guilty today in federal court before U.S. District Judge Philip G. Reinhard to federal income tax fraud. ANNA MARTINEZ, 44, admitted that in 2007 she filed a false income tax return with the United States Internal Revenue Service.
According to the written plea agreement, during calendar years 2006 – 2008 Martinez was the owner and sole proprietor of Community Tax Service, a tax preparation business, in Rockford, Illinois, which was her only source of income. Martinez admitted in the plea agreement that she filed her U.S. Individual Income Tax Return Form 1040 with schedules and attachments for the calendar year 2007, which she verified by written declaration made under the penalties of perjury, and failed to disclose approximately $236,524 of receipts of Community Tax Service for 2007. Martinez also admitted that she failed to report receipts or sales received by Community Tax Services of $68,026 on her individual income tax return for 2006, and $79,594 for 2008, for a total of at least $384,144 for tax years 2006 – 2008, knowing that she failed to pay approximately $72,156 in taxes to the IRS.
Sentencing for Martinez is scheduled for Wednesday, May 7, 2014, at 11:00 a.m. Martinez faces a maximum sentence of up to 3 years in prison, up to one year of supervised release following imprisonment, and a maximum fine of up to $250,000. Martinez must also pay restitution to the Internal Revenue Service and the costs of prosecution. The actual sentence will be determined by the United States District Court, guided by the advisory United States Sentencing Guidelines.
The sentencing was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and James C. Lee, Special Agent-In-Charge of the Chicago Field Office of Internal Revenue Service - Criminal Investigation Division.
The government is represented by Assistant U.S. Attorney Scott R. Paccagnini.
Plea Agreement
Roanoke Man Sentenced for Detonating Explosive DeviceRead the Press Release
ROANOKE, VIRGINIA – A Roanoke man who admitted to building and detonating a pipe bomb was sentenced this morning in the United States District Court for the Western District of Virginia in Roanoke.
Derick G. Wilson, 24, of Roanoke, Va., who previously pled guilty to knowingly possessing a destructive device, was sentenced today in Federal District Court to 36 months in federal prison, along with a two-year period of supervised release.
“The defendant put the lives of innocent bystanders and first responders at risk when he detonated this very dangerous device,” United States Attorney Timothy J. Heaphy said today. “Due to the prompt response and careful investigation of law enforcement, he has now been held accountable for his reckless acts.”
“The criminal use of explosives or improvised explosive devices poses an extreme threat to public safety. ATF will aggressively investigate any use of these weapons that are designed for only one reason - to inflict serious injury or death to anyone nearby,” stated Carl Vasilko, Special Agent in Charge, ATF Washington Field Division.
The evidence in the case showed that on August 1, 2012, the defendant got into a physical altercation with an individual at Virginia Tech over a former girlfriend. Following the altercation, the defendant drove to his home in Roanoke, where he constructed a pipe bomb, using a piece of galvanized pipe, two end-caps, powder, and a fuse. After constructing the pipe bomb, the defendant drove back to Virginia Tech and placed the pipe bomb under the left front fender of a vehicle belonging to the person with whom he had got into an altercation. The defendant lit the fuse and the pipe bomb exploded, causing significant damage to the vehicle. There were no injuries.
The investigation of the case was conducted by the Bureau of Alcohol, Tobacco, Firearms and
Explosives, the Virginia State Police Bomb Squad, the Blacksburg Police Department and the Virginia Tech Police Department. Assistant United States Attorney Craig “Jake” Jacobsen prosecuted the case.Rio Rancho Men Arrested on Federal Synthetic Drug Trafficking ChargesRead the Press Release
ALBUQUERQUE – Roman Salsberry Huerta, 44, and Dean Tommy Cole, 23, both of Rio Rancho, N.M., made their initial appearances in federal court this morning on criminal complaints charging them with synthetic drug trafficking offenses. Both men remain in custody pending detention hearings scheduled for Dec. 9, 2013.
Huerta and Cole were arrested by DEA agents and officers of the Rio Rancho Police Department on criminal complaints charging the two with conspiracy to distribute controlled substance analogues, commonly known as “Spice,” and distribution of Spice. Huerta also is charged with possession of Spice with intent to distribute and with maintaining two drug-involved premises.
According to the criminal complaints, Huerta is the owner of Smoke World, a business located on Southern Blvd. in Rio Rancho, and Cole is employed at Smoke World. The complaints allege that Huerta sold Spice to an informant in the Smoke World premises in May 2013, and that Cole sold Spice to the informant in the premises on two occasions in summer of 2013.
The complaints state that on Aug. 8, 2013, law enforcement authorities executed a federal search warrant at Huerta’s Rio Rancho residence where they allegedly found a Spice manufacturing facility with all the equipment and ingredients necessary to manufacture and distribute Spice. The authorities also allegedly found two large caches of cash in the residence, $102,000 in a lock box hidden under dirty clothes in a hamper and $4,059 in a lock box in a bedroom closet, which they seized as alleged proceeds from the sale of Spice.
Also on Aug. 8, 2013, law enforcement authorities executed a federal search warrant at Smoke World where they allegedly seized substances believed to be Spice that were packaged for retail sale and in bulk form. The packaged substances allegedly were packaged similarly to Spice allegedly found in Huerta’s residence.
If convicted on the charges in the criminal complaints, Huerta and Cole each face maximum penalties of twenty years in prison. Charges in criminal complaints are merely accusations. Criminal defendants are presumed innocent unless found guilty beyond a reasonable doubt.
This case was investigated by the Albuquerque office of the DEA and the Rio Rancho Police Department and is being prosecuted by Assistant U.S. Attorney Joel R. Meyers.
Background on Designer Synthetic Drugs
Designer synthetic drugs are often marketed as herbal incense, potpourri, bath salts, jewelry cleaner, or plant food, and have caused significant abuse, addiction, overdoses, and emergency room visits. Those who have abused synthetic drugs have suffered vomiting, anxiety, agitation, irritability, seizures, hallucinations, tachycardia, elevated blood pressure, and loss of consciousness. They have caused significant organ damage as well as overdose deaths.
Smokable herbal blends marketed as being “legal” and providing a marijuana-like high have become increasingly popular, particularly among teens and young adults, because they are easily available and, in many cases, they are more potent and dangerous than marijuana. These products consist of plant material that has been impregnated with dangerous psychoactive compounds that mimic THC, the active ingredient in marijuana. Synthetic cannabinoids are sold at a variety of retail outlets, in head shops and over the Internet. Brands such as “Spice,” “K2,” “Blaze,” and “Red X Dawn” are labeled as incense to mask their intended purpose. In 2012, a report by the Substance Abuse and Mental Health Services Administration (SAMHSA) reported 11,406 emergency department visits involving a synthetic cannabinoid product during 2010. In a 2013 report, SAMHSA reported the number of emergency department visits in 2011 involving a synthetic cannabinoid product had increased 2.5 times to 28,531. The American Association of Poison Control Centers reported 5,205 calls related to human exposure of synthetic cannabinoids.
For the past several years, there has also been a growing use of, and interest in, synthetic cathinones (stimulants/hallucinogens) sold under the guise of “bath salts” or “plant food.” Marketed under names such as “Ivory Wave,” “Purple Wave,” “Vanilla Sky,” or “Bliss,” these products are comprised of a class of dangerous substances perceived to mimic cocaine, LSD, MDMA, and/or methamphetamine. Users have reported impaired perception, reduced motor control, disorientation, extreme paranoia, and violent episodes. The long-term physical and psychological effects of use are unknown but potentially severe. The American Association of Poison Control Centers reported 2,656 calls related to synthetic cathinone (“bath salts”) exposures in 2012 and overdose deaths have been reported as well.
These products have become increasingly popular, particularly among teens and young adults and those who mistakenly believe they can bypass the drug testing protocols of employers and government agencies to protect public safety. They are sold at a variety of retail outlets, in head shops, and over the Internet. However, they have not been approved by the Food and Drug Administration (FDA) for human consumption or for medical use, and there is no oversight of the manufacturing process.
Controlled Substance Analogue Enforcement Act
While many of the designer drugs being marketed today are not specifically prohibited in the Controlled Substances Act (CSA), the Controlled Substance Analogue Enforcement Act of 1986 (AEA) allows many of these drugs to be treated as controlled substances if they are proven to be chemically and/or pharmacologically similar to a Schedule I or Schedule II controlled substance.
DEA has used its emergency scheduling authority to combat both synthetic cathinones (the so-called “bath salts” with names like Ivory Wave, etc.) and synthetic cannabinoids (the so-called incense products like K2, Spice, etc.), temporarily placing several of these dangerous chemicals into Schedule I of the CSA. Congress has also acted, permanently placing 26 substances into Schedule I of the CSA in 2012.
For more information about this operation and synthetic designer drugs, visit www.dea.gov.
Rio Rancho Man Sentenced to Five Years in Prison for Violating Federal Firearms LawsRead the Press Release
ALBUQUERQUE – David Garcia, 40, of Rio Rancho, N.M., was sentenced today to five years in federal prison for using and carrying a firearm in relation to a drug trafficking offense. Garcia will be on supervised release for three years after he completes his prison sentence.
Garcia was arrested in Jan. 2013 on a three-count indictment charging him with (1) being a felon in possession of a firearm and ammunition; (2) possession of methamphetamine with intent; and (3) using and carrying a firearm in furtherance of a drug trafficking crime. According to the indictment, Garcia committed these offenses on May 23, 2012. At the time, Garcia was prohibited from possessing firearms or ammunition because he previously had been convicted of conspiracy to traffic in cocaine in the 1st Judicial District Court for the State of New Mexico.
In Sept. 2013, Garcia pled guilty to count 3 of the indictment. In entering his guilty plea, Garcia admitted that on May 23, 2012, he possessed a 9mm pistol in addition to possessing methamphetamine which he intended to distribute. Garcia admitted that he possessed the pistol in order to protect himself and his methamphetamine.
This case was investigated by the Albuquerque office of the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Rio Rancho Police Department and was prosecuted by Assistant U.S. Attorneys David M. Walsh and Louis E. Valencia.
Retired San Diego Unified School District Educator Sentenced to 84 Months for Receipt of Child PornographyRead the Press Release
SAN DIEGO - James Rick Mitchell, a retired teacher and counselor in the San Diego Unified School District, was sentenced today by U.S. District Judge Janis L. Sammartino to 84 months in prison, followed by five years of supervised release, for a child pornography offense. He is expected to self-surrender to serve his sentence by February 7, 2014.
According to documents filed in court, Mitchell collected 947,542 images and 4,751 videos depicting minors engaged in sexually explicit conduct. Mitchell was identified as a collector of child pornography in an investigation conducted by the United States Postal Service into a commercial distributor of child pornography images and videos.
The investigation revealed that Mitchell had purchased videos and images from the company over an approximately 5 year period between 2006 and 2011, spending approximately $4,300 to purchase dozens of illicit images and videos. Based on that information, United States Postal Inspectors executed a search 2 warrant at Mitchell’s residence, where they uncovered the trove of child pornography that Mitchell had collected.
Mitchell was employed by the San Diego Unified School District for 34 years between 1969 and 2003. He worked as a physical education teacher and counselor at Einstein Junior High School; as a math teacher and track coach at Point Loma High School; and for 24 years between 1979 and 2003 at University City High School as a math teacher, counselor and track coach. Judge Sammartino told Mitchell that he had cast a “pallor” on his career as an educator with his actions and noted that possession of child pornography results in acute harm to the children depicted in the images.
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. Led by U.S. Attorneys’ offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
DEFENDANT Criminal Case No. 13-cr-667-JLS James Rick Mitchell SUMMARY OF CHARGESReceipt of Images of Minors Engaged in Sexually Explicit Conduct, in violation of Title 18, United States
Code, Section 2252(a)(2)Maximum Penalties: 5 year mandatory minimum, 20 year maximum; 5 years of supervised release
AGENCIESUnited States Postal Service
San Diego Internet Crimes Against Children Task ForceRepeat Offender Sentenced to Eight Years in Prison for Drug and Gun CrimesRead the Press Release
A federal felon who dealt prescription drugs and possessed a gun while on supervised release was sentenced today in U.S. District Court in Tacoma to eight years in prison and six months of supervised release, announced U.S. Attorney Jenny A. Durkan. EDWARD WOODRUFF, aka “Pretty Eddie,” --, was arrested in September 2012 following an investigation by the South Sound Gang Task Force. The investigation revealed WOODRUFF was selling large quantities of oxycodone pills, and that he possessed a firearm. WOODRUFF has both state and federal convictions which prohibit him from possessing guns. U.S. District Judge Ronald B. Leighton imposed the sentence.
According to records filed in the case, in July 2012 a person working with law enforcement purchased 100 oxycodone pills from WOODRUFF. In September 2012, court authorized search warrants were executed at a storage locker, WOODRUFF’s residence in Spanaway, an apartment he leased in Lakewood, and another apartment (of a relative) that he frequented in Tacoma. In the storage locker, law enforcement found a Mercedes Benz that WOODRUFF had been seen driving in connection with drug dealing. In the car, inside a shopping bag, was over $40,000 cash. In a plastic storage bin next to the car, police found a .45 caliber MasterPiece Arms semi-automatic pistol and over 100 rounds of .45 caliber ammunition. Forensic analysis revealed WOODRUFF’s fingerprint on the extended magazine of the gun. Additional cash, about 57 oxycodone pills and some marijuana, were found inside a safe in the Lakewood apartment. A bag containing approximately 1200 oxycodone pills was found hidden in a couch at the Tacoma apartment.
WOODRUFF has prior convictions in state court for drug distribution (1997) and assault (2002). He has federal convictions for Felon in Possession of a Firearm (two counts) and Possession of Cocaine with Intent to Distribute (2007). WOODRUFF was on supervised release on those federal convictions when these drug and gun crimes occurred.
The case was investigated by the South Sound Gang Task Force. The SSGTF is composed of members of the FBI Seattle Division (Tacoma Resident Agency), Lakewood and Tacoma Police Departments, the Washington State Patrol, the Washington State Department of Corrections, and the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF).
The case was prosecuted by Assistant United States Attorney Gregory A. Gruber.
Project Safe Neighborhoods Targets Communities Most Affected by Gun ViolenceRead the Press Release
St. Thomas, USVI - United States Attorney Ronald W. Sharpe announced today that as part of the Department of Justice’s Project Safe Neighborhoods (PSN) initiative, and in conjunction with the Virgin Islands Housing Authority (VIHA), a series of community meetings are presently taking place throughout the Virgin Islands to discuss and address criminal activity, including the escalating gun violence in the Virgin Islands. The goal of these meeting is to afford those persons most affected by gun violence an opportunity to meet and hear from law enforcement and other agencies charged with keeping our communities safe, and to provide a forum for community members to voice their concerns and needs.
The most recent meeting was held at the Community Center in Tutu High-Rise. During this lively two-hour event, a standing room only crowd heard from 14 Project Safe Neighborhoods (PSN) partners about ways to make the Tutu Community safer. The question and answer period following the presentations allowed residents and community members to voice their concerns about how to make their community safer, about the need for neighborhood cameras, and about the large number of guns entering the territory. Residents were also encouraged to complete a Crime Perception Survey, which was provided at the meeting. Once compiled and analyzed, these surveys will greatly assist law enforcement in identifying how violent crime is affecting our community, and how best to combat it.
Over the past several months, meetings have also been held at Oswald Harris Court, Contant Knolls, Bergs Home and Smith Bay in St. Thomas. The next meeting will be held at the Pearson Gardens Community Center, St. Thomas, on December 10, 2013 at 6:00 p.m., and a meeting is being planned for Grove Place in St. Croix. Follow-up meetings will also be held.
United States Attorney Sharpe noted that the U.S. Department of Justice’s Project Safe Neighborhoods is a nationwide commitment to reducing gun crime in America by marshaling federal and local resources to better locate, apprehend, and prosecute individuals who commit offenses involving firearms. United States Attorney Sharpe also commended the following PSN partners who are participating in these meetings and reaching out to the community: Virgin Islands Police Department, Virgin Islands Attorney General’s Office, Bureau of Alcohol Tobacco, Firearms and Explosives, Drug Enforcement Administration, U.S. Marshals Service, Crime Stoppers, Virgin Islands Housing Authority, My Brothers Workshop, Weed & Seed St. Thomas and St. Croix
“To end violent gun crime, we need to bring together law enforcement, prosecutors, community members, and community-based organizations,” United States Attorney Sharpe said. “Creating effective partnerships between the community and both law enforcement and non-law enforcement agencies is the first step in combating these crimes.”For more information about Project Safe Neighborhoods, please visit: www.psn.gov.
Pine Ridge Man Pleads Not Guilty to Theft of Government PropertyRead the Press Release
United States Attorney Brendan V. Johnson announced that a Pine Ridge, South Dakota, man has been indicted by a federal grand jury for Theft of Government Property and False Statement.
Michael Twiss, age 49, was indicted on November 19, 2013. Twiss appeared before U.S. Magistrate Judge Veronica L. Duffy on December 4, 2013, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 10 years in custody and/or a $250,000 fine, 3 years of supervised release, and $100 to the Federal Crime Victims Fund on each charge. Restitution may also be ordered.
The charges relate to Twiss illegally taking overtime payments in an amount greater than $1,000 while employed as a Wildland Fire Operations Specialist for the Bureau of Indian Affairs in 2009. Twiss then gave false statements concerning the theft to a special agent with the Office of Inspector General.
The charges are merely accusations and Twiss is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Office of Inspector General, U.S. Department of the Interior. Assistant U.S. Attorney Wayne Venhuizen is prosecuting the case.
Twiss was released on bond pending trial. A trial date has been set for February 18, 2014.
Phlebotomist Charged with Using False Identification Documents to Work at Local HospitalsRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Alysa D. Erichs, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI), and R. Sean Baldwin, Chief, Fort Pierce Police Department, announce the arrest of William Evens Josma, 34, of Fort Pierce, for using the name, social security card, and employment authorization card of another person to obtain employment as a phlebotomist at local hospitals. Josma was arraigned in federal court yesterday before U.S. Magistrate Judge Frank J. Lynch, Jr. in Ft. Pierce, Florida.
The complaint alleges that from January 7, 2013 to November 2013, Josma worked as a phlebotomist at Indian River Medical Center under a false name. Josma is a Haitian national, and does not have immigration authorization to work in the United States. Josma used the name, social security card and employment authorization card of another person to satisfy the employment verification requirements of the Immigration and Nationality Act to obtain employment. Josma’s real identity was uncovered when he purchased a fraudulent immigration stamp from Haiti to make it appear that he had continued authorization to work in the United States. Josma also possessed a Florida driver’s license in the false identity, as well as a badge under that identity showing that he previously worked at Martin Memorial Health System as well.
The indictment charges Josma with two counts of making a false attestation on Form I-9, Employment Eligibility Verification, to satisfy a requirement of the employment verification system in violation of Title 18, United States Code, Section 1546(b)(3); two counts of using an identification document not issued to him to satisfy a requirement of the employment verification system in violation of Title 18, United States Code, Section 1546(b)(1); two counts of false representation of a social security number in violation of Title 42, United States Code, Section 408(a)(7)(B); and two counts of aggravated identity theft in violation of Title 18, United States Code, Section 1028A. If convicted, Josma faces up to five years in prison for the false attestation, use of an unlawful identification and false representation of a social security number counts, and a consecutive two years in prison for the aggravated identity theft count.
Mr. Ferrer commended the investigative efforts of ICE-HSI and the Fort Pierce Police Department. The case is being handled by Assistant U.S. Attorney Shaniek Maynard.
A complaint and indictment are only accusations, and a defendant is presumed innocent unless and until proven guilty.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Parma Heights Man Sentenced to Three Years in Prison, Ordered to Pay Nearly $1.2 Million for Tax FraudRead the Press Release
A Parma Heights man was sentenced to more than three years in prison and ordered to pay nearly $1.2 million in restitution, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, and Kathy Enstrom, IRS-Criminal Investigation Special Agent in Charge.
Bryan D. McCallum previously pleaded guilty to a two-count information charging him with a false claims conspiracy and with making 30 false claims. McCallum is 40 years old, according to court records.“Those individuals who engage in this type of financial fraud should know they will not go undetected and will be brought to justice,” Dettelbach said.
“This sentence sends an important message to America’s taxpayers who play by the rules that we have no tolerance for those who make up their own rules,” Enstrom said.
McCallum worked as an accountant/bookkeepr for two corporations owned and controlled by Brian D. Krantz, 46, of Twinsburg. These companies engaged in financial services and/or real estate investment business activities.
From approximately April 2009 through June 8, 2010, Krantz and McCallum conspired to make false claims for tax refunds using income tax returns filed with the IRS in the names of Krantz, companies formed by Krantz and McCallum, and several “shelf” companies purchased by Krantz. A “shelf” company is a corporate or other formal non-operating business entity established for the purpose of being held for sale to another person, according to court documents.
The scheme involved the use of fake IRS Forms 2439, titled “Notice to Shareholder of Undistributed Long-Term Capital,” which is a form to be issued by a regulated investment company (RIC) or real estate investment trust (REIT) to report undistributed capital gains and taxes withheld from those gains on behalf of the shareholders. Under federal tax law, RICs and REITs are entities that are not taxed on their earnings but instead pass those earnings to their shareholders who, in turn, have the obligation to report those earnings and any resulting tax liabilities on the shareholders’ income tax returns. The returns filed pursuant to the conspiracy claimed substantial amounts of Form 2439 withholding credits, when, in fact, none of the companies listed on the forms were actually RICs or REITs or had any undistributed capital gains or withheld taxes, according to court documents.
Krantz used more than $1 million of the refund proceeds to finance a real estate venture he established with other partners, known as Phoenix Ventures Partners LLC. Krantz and McCallum misled Krantz’s real estate partners to believe that a group of Colorado-based hard money lenders had provided the funds.
Krantz was pleaded guilty to earlier this year to a 31-count indictment related to filing income tax refunds totaling more than $8.8 million. The U.S. Treasury issued 17 refund checks totaling approximately $3,615,586 payable to Krantz and various corporations controlled by Krantz as a result of the alleged scheme, according to the court documents.
He is scheduled to be sentenced in March.
The government’s case is being prosecuted by Assistant United States Attorneys John M. Siegel and Justin J. Roberts, following an investigation by the Internal Revenue Service, Criminal Investigation.
Owner of New York Sportswear Distribution Business Sentenced for Tax FraudRead the Press Release
Harry Neuhoff, a resident of Brooklyn, N.Y., was sentenced to serve 12 months and one day in prison and three years supervised release for tax evasion, the Justice Department and Internal Revenue Service (IRS) announced today.
According to documents filed with the court, Neuhoff was the president and an owner of EVA TEES Inc., a wholesale distributor of sportswear. EVA TEES was formerly located in Long Island City, N.Y., and is presently located in Piscataway, N.J. From approximately 2006 to 2008, Neuhoff manipulated EVA TEES accounts through his accounting software program to delete cash sales from the general ledger accounts maintained on the computer accounting system. As a result, Neuhoff caused false corporate tax returns to be filed with the IRS that underreported the company’s gross receipts. During those years, Neuhoff’s behavior also resulted in his filing false personal income tax returns with the IRS. According to documents filed with the court, Neuhoff underreported the gross receipts of EVA TEES by at least $1.5 million using computer manipulation.
The case was investigated by IRS-Criminal Investigation. Trial Attorneys Mark Kotila and Karen E. Kelly of the Justice Department’s Tax Division prosecuted this case.
Mother and Son Sentenced for Heroin Distribution and Operating Fairview Heights “Drug House”Read the Press Release
The United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today that on December 5, 2013, Deborah A. Perkins and her son, Douglas A. Oliver, were sentenced in United States District Court for Distribution of Heroin and Maintaining Drug- Involved Premises.
Perkins, 66, was sentenced to 27 years in prison. Oliver, 47, received a sentence of 30 years in prison. Both defendants have been incarcerated since their arrest on February 14, 2013.
United States Attorney Stephen R. Wigginton stated, “I am proud that we were able to get these two extremely dangerous drug dealers off the streets for good. Heroin is the most deadly drug in the world. I hope the sentences imposed on Perkins and Oliver today will bring some measure of comfort and closure to the families of Jessica Williams and Jennifer Herling, the two young women who lost their lives. I also hope that other drug dealers in our district will take a long, hard look at the severe penalties imposed on Perkins and Oliver, and decide not to take the same risks.”
Prior to their arrests, Perkins and Oliver resided at a notorious drug house which Perkins owned and operated at 20 Kassing Drive, Fairview Heights, Illinois. Because the house was used between 2004 and 2013 as a drug distribution center, a federal judge ordered the residence forfeited.
On August 1, 2013, Perkins pled guilty to federal charges of Conspiracy to Distribute Heroin, Possession with Intent to Distribute Heroin, and Maintaining a Drug House. Oliver pled guilty to the same charges on August 13, 2013.
Oliver admitted that he had given heroin to both Williams and Herling at 20 Kassing Drive in exchange for sex. Both women overdosed and died. In March 2012, Oliver and Perkins moved Williams body from Fairview Heights to a wooded area in Washington Park, Illinois. Police discovered Williams’ body 16 days after her death. Herling died 6 months later, on September 29, 2012, in the basement of 20 Kassing Drive.
The investigation which resulted in the arrest and conviction of Perkins and Oliver was conducted by the Drug Enforcement Administration, the Fairview Heights, Illinois Police Department, and the St. Clair County Sheriff’s Office.
The case was prosecuted by Assistant United States Attorney Robert L. Garrison.
Members of Family Who Manufactured Homemade ‘Male Enhancement’ Drug Sentenced in Federal Conspiracy CaseRead the Press Release
LOS ANGELES – Three members of a Rowland Heights family involved in a home-based enterprise that manufactured a “male enhancement” drug that sold on the Internet and in retails stores nationwide have been sentenced for unlawfully importing tadalafil, the same active ingredient in the prescription drug Cialis.
Won Bae Kim, 61, was sentenced on Wednesday to 11 months in federal prison.
Two sons, Jong Ik Kim, 35, and Jong Heon Kim, 34, each were sentenced to one year probation, which will include six months of home detention.
The Kims were sentenced on Wednesday by United States District Judge Dean D. Pregerson, who also ordered Won Bae Kim to pay a $10,000 fine.
According to court documents, Won Bae Kim started a business named Kawa Health and imported pounds of tadalafil from China, which were used to manufacture a male enhancement drug that Kawa Health marketed under the name “Xzen 1200.” The tadalafil packages were delivered to commercial mailbox facilities, where the Kims were able to pick them up. After the Xzen 1200 pills were manufactured, Jong Ik Kim and Jong Heon Kim sold the drugs across the country, including to adult book stores. The packaging for the drugs did not disclose that tadalafil was an ingredient, which prompted the U.S. Food and Drug Administration to issue a warning about the product earlier this year. The investigation revealed that the Kims generated sales of more than $300,000 over a one-year period.
The operation was disrupted when U.S. Customs and Border Protection officials found that overseas packages intended for one of the mailboxes contained tadalafil. Agents of Department of Homeland Security’s Homeland Security Investigations then followed the delivery of the packages to a mailbox, when Won Bae Kim picked them up. Agents followed him back to his home and executed a search warrant, where they discovered large amounts of pills and packaging material for the Xzen product, as well as $13,000 in cash, which has been forfeited.
Release No. 13-139