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3 December 2013
Former El Paso Businessman and City Representative Sentenced in El Paso Corruption CaseRead the Press Release
In El Paso this morning, Roberto “Bobby” Ruiz, a former representative for New York–based financial services firm Bear Stearns, was sentenced to two years in federal prison followed by three years of supervised release for his role in a “pay-to-play” scheme uncovered during the ongoing public corruption investigation in El Paso announced United States Attorney Robert Pitman and FBI Special Agent in Charge Douglas E. Lindquist, El Paso Division.
United States District Judge Frank Montalvo also ordered that Ruiz pay a $175,000 fine and to self-surrender to the Dallas office of the U.S. Marshals Service on January 7, 2014, to begin serving his prison term.
In sentencing Ruiz below the applicable advisory U.S. Sentencing Guidelines, Judge Montalvo took into consideration the Government’s request to the Court to acknowledge Ruiz’ lengthy, extensive and beneficial assistance to the Government in the El Paso public corruption investigation as well as his assistance to other state and federal initiatives in other jurisdictions.
Judge Montalvo also sentenced former El Paso city representative and attorney, Raymond Telles, this morning to five years of probation and ordered Telles to pay a $4,000 fine for his role in the conspiracy.
In sentencing Telles to a term of probation, Judge Montalvo took into consideration the Government’s recommendation regarding Telles’ sentencing based on Telles’ expeditious cooperation with the Government, within one month of learning he was under investigation, and Telles’ truthful and complete cooperation. In addition, the Judge recognized Telles’ minimal benefit as a result of corrupt conduct. According to counsel for Telles, the defendant voluntarily surrendered his Texas law license in 2009 and has no intent to practice law in the future.
Previously, Telles and Ruiz pleaded guilty to conspiracy to commit mail and wire fraud, and deprivation of honest services. By pleading guilty, both admitted to conspiring to participate in a bribery scheme in an effort to secure a $40 million El Paso County debt refinancing contract.
“The sentencing of Mr. Ruiz and Mr. Telles are a reminder that those who illegally conspire to profit from taxpayer dollars will have to answer to the people of El Paso,” stated FBI Special Agent in Charge Douglas E. Lindquist.
This FBI investigation has resulted in 39 federal convictions -- 36 individuals who entered guilty pleas and three individuals who were convicted by juries.
Assistant United States Attorneys Debra Kanof and Jose Luis Gonzalez prosecuted this case on behalf of the Government.
Former Crawford County 911 Director Pleads Guilty to Mail FraudRead the Press Release
WICHITA, KAN. – A former 911 director for Crawford County, Kan., has pleaded guilty to mail fraud, U.S. Attorney Barry Grissom said today.
John Gagliardo, 60, Pittsburg, Kan., pleaded guilty Monday in U.S. District Court in Wichita to one count of mail fraud. In his plea, he admitted the crime occurred in 2011 while he was serving as 911 Director for Crawford County, Kan., and also working as a salesman at Washington Electronics at 611 N. Pine in Pittsburg, Kan.
In 2011 Dave Gobel, an employee of the Kansas Division of Wildlife and Parks, was responsible for obtaining storm warning equipment for Farlington, Kan., and an area around Crawford County State Park. Gobel prepared a grant application to the state of Kansas. He solicited a bid for the equipment from Washington Electronics. In addition to supplying Gobel a legitimate bid from Washington Electronics, Gagliardo supplied Gobel with a fraudulent bid from a non-existent company called K-Sirens of Scammon, Kan. Goebel did not ask for the second bid and did not know it was fraudulent. The fraudulent bid was for a higher amount than the legitimate bid from Washington Electronics.
Sentencing is set for Feb. 19. The parties have agreed to recommend probation.
Co-defendant George Washington is set for sentencing Feb. 10.
Grissom commended the Kansas Bureau of Investigation, the FBI and Assistant U.S. Attorney Lanny Welch for their work on the case.
Florida Marine Life Dealers Sentenced for Illegal Wildlife TraffickingRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Otha Easley, Acting Special Agent in Charge, NOAA Fisheries Office of Law Enforcement, and Edward Grace, Deputy Assistant Director U.S. Fish & Wildlife Service, Office of Law Enforcement, announce that Eric Pedersen, 51, and Serdan Ercan, 43, both formerly of Grassy Key, were sentenced today in federal District Court in Key West for conspiring to harvest, transport, and sell wildlife, including Live Rock and attached invertebrates, sea fans, bonnethead sharks, lemon sharks, and nurse sharks, with a fair market value in excess of $350.00, knowing the marine life were taken, possessed, transported, sold, and intended to be sold in violation of the laws and regulations of the State of Florida, contrary to the federal Lacey Act, Title 16, United States Code, Sections 3372(a)(2)(A), (a)(4), 3373(d)(1) and (2), and Title 18, United States Code, Section 554, all in violation of Title 18, United States Code, Section 371.
Pedersen was sentenced by U.S. District Judge Jose E. Martinez to 24 months in prison, followed by two years of supervised release and ordered to pay a fine of $10,000. Additionally, Pedersen was barred by the Court from any employment during his supervised release that involves the possession, display, transportation, exhibition, purchase, or sale of wildlife. Pedersen was also the subject of an Order of Forfeiture which forfeited the vessel used in perpetrating the illegal harvesting activities. Ercan received a sentence of one year and a day in prison, followed by one year of supervised release and a fine of $6,000.
According to the Indictment, Joint Factual Statements submitted to the Court, and arguments at sentencing, from approximately March 2012 through November 2012, Pedersen and Ercan engaged in a conspiracy to illegally harvest and market marine life from the Florida Keys to wholesalers throughout the United States and abroad through a business located on Grassy Key known as Key Marine, Inc. At the time of the offenses charged, Pedersen was Vice President and Ercan was Secretary of Key Marine. In addition to ornamental fish, the wildlife included Live Rock, Ricordea florida, sea fans, and several species of sharks, which were subject to specific required Florida licensing requirements and bag limits which the participants in the harvesting and sales operations ignored. According to the Factual Statements, Pedersen and Ercan were aware of the requirements of the law, and took actions to conceal the scope and nature of their activities from authorities. Unknown to Pedersen and Ercan, federal agents had begun to monitor their harvest and sales activities, including covertly recording harvest operations and marking illegally acquired products to trace them through their interstate sales. Key Marine, Inc. was dissolved in the wake of the federal prosecution.
Mr. Ferrer commended the joint investigative efforts of the Special Agents of the NOAA Office of Law Enforcement and the Fish & Wildlife Service Office of Law Enforcement who participated in the long-term investigation into the illegal harvesting and sale of marine life resources from the Florida Keys known as Operation Rock Bottom, and the assistance of the Officers of the Florida Fish & Wildlife Conservation Commission who assisted the federal investigation. This case was prosecuted by Assistant U.S. Attorneys Thomas Watts-FitzGerald and Antonia Barnes, with assistance from the U.S. Attorney?s Office for the District of Idaho.
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.
Fire Captain Jailed for Conspiring to Set FiresRead the Press Release
The Office of the United States Attorney for the District of Vermont stated that George Allen, age 30, of Wallingford, Vermont, former Captain of the Wallingford Volunteer Fire Department, was sentenced to 13 months in jail yesterday by Chief Judge Christina Reiss, of the United States District Court in Rutland, Vermont. Allen was found guilty after a jury trial last July of conspiring with younger members of the fire department to set a series of outdoor fires in Wallingford in early 2008. Because several of the fires were in the Green Mountain National Forest, owned by United States, the arsons were charged in federal court.
At the July trial the jury determined that Captain Allen conspired with several teenaged members of the fire department to start the fires. The motive was the excitement of responding to a fire with the fire department, and the boredom of being on a department with few fire calls. After the younger firemen set fires and called 911, Captain Allen and the Wallingford Fire Department responded to extinguish them.
At sentencing yesterday, Chief Judge Reiss found that the offense was Aoutrageous@ and Adangerous,@ entailing risks of injury to both firefighters and the public, as emergency vehicles traveled the roads. Current Wallingford Fire Chief Stephane Goulet made a statement to the Court regarding the adverse impact of the offense on the department=s personnel, finances, equipment, and reputation.
Allen, represented by attorney Mark Furlan of Rutland, asked for a probationary sentence, urging that no-one had been hurt. The United States, represented by Assistant U.S. Attorney William Darrow, asked for a term of imprisonment of at least 15 months. The Court imposed a sentence of 13 months, to begin in January, and also ordered Allen to serve two years of supervised release, perform 75 hours of community service, and pay a $100 assessment.
The U.S. Attorney=s Office credited the Vermont State Police Arson Unit, and the U.S. Forest Service with the investigation, and thanked the Wallingford Fire Department for its cooperation.
Federal Jury Returns Guilty Verdicts in Gambling and Money Laundering CaseRead the Press Release
United States Attorney ALICIA A.G. LIMTIACO, U.S. Attorney for the Districts of Guam and the Northern Mariana Islands (NMI), announced today that a federal jury in the District of Guam returned a verdict finding defendants William M. Perez and Jennie Wen Chin Pau guilty, as follows:
Defendant William M. Perez –
Count 1 – Conspiracy to Commit Illegal Gambling
Count 2 – Illegal Gambling Business
Counts 18-38 – Money LaunderingDefendant Jennie Wen Chin Pau -
Count 1 – Conspiracy to Commit Illegal Gambling
Count 2 – Illegal Gambling Business
Counts 18-35 – Money Laundering
Counts 40-44 - StructuringThe jury found the defendants not guilty as to money laundering charges in Counts 3-17. Defendants Perez and Pau will be sentenced by the Hon. Frances Tydingco-Gatewood, Chief Judge, on March 28, 2014 at 10:00 A.M.
Two co-defendants, Jimmy Hsieh and Pauline Perez, pleaded guilty before trial and are awaiting sentencing. Co-defendant Wai Kam Ho remains charged, with a trial anticipated in early 2014.
The evidence at trial showed that from at least January 2006 until December 14, 2010, defendants Perez and Pau conspired with other individuals to conduct an illegal gambling business in a manner which violated the laws of the Territory of Guam. The defendants offered card games of chance, including baccarat and poker, at the MGM Spa building approximately five times a week. The games violated Guam law in that the defendants, as the “house,” took a percentage of the winnings from each poker game, and also charged $5 per $100 of bets for food and drink.
The evidence at trial also showed that defendants Perez and Pau committed money laundering by knowingly conducting financial transactions affecting interstate commerce, which transactions involved the proceeds of a specified unlawful activity, namely conducting an illegal gambling business.
The evidence at trial further showed that defendant Pau knowingly and for the purpose of evading reporting requirements, structured transactions with domestic financial institutions, in violation of federal law.
U. S. Attorney Limtiaco stated, “The defendants participated in illegal gambling and laundered illegal gambling proceeds. The convictions demonstrate the commitment of the U.S. Attorney’s Office, Department of Justice, to hold accountable those involved in facilitating illegal gambling businesses.” U.S. Attorney Limtiaco further stated, “This case involved the collaborative investigative efforts, skills and resources of the Internal Revenue Service Criminal Investigations Unit (IRS-CI), the Federal Bureau of Investigations (FBI) and the Naval Criminal Investigative Service (NCIS). We thank our law enforcement agencies for their diligent work in the investigation and prosecution of this illegal gambling operation. ”
The Conspiracy, Illegal Gambling, and Structuring counts each carries a maximum prison term of five years. Each count of Money Laundering carries a maximum prison term of 20 years.
This case was investigated by Special Agents from the Internal Revenue Service Criminal Investigations Unit (IRS-CI), the Federal Bureau of Investigations (FBI) and the Naval Criminal Investigative Service (NCIS). Assistant United States Attorney Karon V. Johnson prosecuted the case.
Federal Jury Convicts Brunswick, Georgia Woman in $4 Million Medicaid Fraud SchemeRead the Press Release
Waycross, GA – Randy Strickland, 55, a former Pierce County, Georgia Deputy Sheriff, pled guilty last week before United States District Court Judge William T. Moore, Jr. for his role in trafficking methamphetamine.
According to the evidence presented during his guilty plea hearing, Strickland agreed to act as “security” for individuals he believed were dealing meth, by acting as the lookout. Strickland’s drug activities occurred while he was in uniform and armed, and while he was driving his police vehicle. After receiving information about Strickland’s apparent criminal activities, Pierce County Sheriff Ramsey Bennett immediately requested federal law enforcement assistance. As a result, Strickland’s last “security detail” was for a confidential informant and under the watchful eyes of several federal agents. On that occasion, Strickland agreed to act as the lookout for who he believed to be a drug dealer selling ounces of methamphetamine. Shortly after receiving his charged fee of $100, which at Strickland’s direction was placed in a potato chip bag on the side of a road, Strickland was arrested by federal authorities.
United States Attorney Edward Tarver stated, "Former Deputy Sheriff Strickland’s actions tarnished the badge and the community’s trust. Police corruption leaves a stain on the good work of our law enforcement community. Make no mistake that defendants who violate the trust of this community, law enforcement or otherwise, will be prosecuted to the fullest extent of the law.”
“Mr. Strickland abused his position of public trust and demonstrated a complete lack of integrity by protecting people he believed to be meth dealers,” said Brock D. Nicholson, Special Agent in Charge of U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI) Atlanta. “Thanks to the hard work of HSI special agents and the assistance of our partners at the ATF, FBI, Pierce County Sheriff’s Office, and the U.S. Attorney's Office, his schemes have been broken.”
Mark F. Giuliano, Special Agent in Charge, FBI Atlanta Field Office, stated, “While the guilty plea of former Pierce County Deputy Sheriff Strickland concludes a sensitive and critical joint investigation, it also concludes one man's career in law enforcement. These law enforcement based public corruption cases clearly illustrate the harm that can be done to the community as well as the criminal justice system, but they also provide an opportunity for those many committed law enforcement officers to re-dedicate themselves to the oaths that they were sworn to uphold.”“The criminal conduct of former Pierce County Deputy Sheriff Strickland is unconscionable and unthinkable for those serving faithfully within the criminal justice community,” said ATF Special Agent in Charge Christopher Shaefer. “The guilty plea will provide many opportunities for him to reflect on his actions and serve as notice to others that the ATF and our law enforcement partners will not tolerate this type of conduct.”
Pierce County Sheriff Ramsey Bennett stated, “It is of utmost importance that the public not perceive that we in law enforcement act as though we are ‘above the law.’ The investigation and prosecution of Randy Strickland should reassure the general public that I, as Sheriff will not tolerate law enforcement officers in my jurisdiction that violate the law and the public trust. Those of us who take an oath to serve and protect the public and uphold the constitution must be vigilant in regard to our duties and what the public expects of us.”
Strickland faces up to 20 years in prison for his conviction. There is no parole in the federal system. Strickland’s sentencing will be scheduled after the U.S. Probation Office completes a presentence investigation report.
This case was investigated by ATF, HSI, FBI and local law enforcement. Assistant United States Attorneys Greg Gilluly and Tania Groover are prosecuting the case on behalf of the United States. For additional information, please contact First Assistant United States Attorney James D. Durham at (912) 201-2547.
DeBlasio’s Restaurant Owner Sentenced to Probation with Home Detention for Evading TaxesRead the Press Release
PITTSBURGH - A resident of Presto, Pa., has been sentenced in federal court to five years of probation, including 24 months of home detention, and a $10,000 fine plus 500 hours of community service, on his conviction of federal income tax evasion, United States Attorney David J. Hickton announced today.
United States District Judge David S. Cercone imposed the sentence on Donald J. DeBlasio, 69. According to information presented to the court, as the owner of DeBlasio's, defendant engaged in the practice of "skimming" cash from restaurant sales, resulting in a total tax loss of $341,128.62 from the filing of false personal, corporate and payroll tax returns during the years 2007-2009.
Prior to imposing sentence, Judge Cercone stated that he has “long felt that under-payment of taxes is one of the most serious problems in our country, but [the defendant’s] age is a factor and not every case warrants incarceration.”
Assistant United States Attorney Leo M. Dillon prosecuted this case on behalf of the government. U.S. Attorney Hickton commended the Internal Revenue Service, Criminal Investigation for the investigation leading to the successful prosecution of DeBlasio.
Bridgeport Woman Sentenced to 30 Months in Federal Prison for Distributing CrackRead the Press Release
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Deirdre M. Daly, Acting United States Attorney for the District of Connecticut, announced that XANG NAKHOUNE, 38, of Bridgeport, was sentenced today by U.S. District Judge Janet C. Hall in New Haven to 30 months of imprisonment, followed by three years of supervised release, for distributing crack cocaine.
According to court documents and statements made in court, in October 11, 2012, NAKHOUNE served as an intermediary in the sale of 38 grams of crack cocaine to an individual working with law enforcement. On November 9, 2012, NAKHOUNE contacted the same individual with an offer to sell two ounces of crack in exchange for $2,400. NAKHOUNE was arrested after she arrived at the location that had been arranged for the intended sale. A subsequent search of her vehicle revealed approximately 49 grams of crack.
NAKHOUNE has been detained since her federal arrest on March 1, 2013. On September 10, she pleaded guilty to one count of conspiracy to possess with intent to distribute, and to distribute, cocaine base (“crack cocaine”).
This matter was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, with the assistance of the New Haven and Bridgeport Police Departments. This case was prosecuted by Assistant U.S. Attorney Michael E. Runowicz.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722 [email protected]Brad Charles Fisher, an Insurance Salesman Convicted of Tax Evasion, Sentenced in U.S. District CourtRead the Press Release
The United States Attorney's Office announced that during a federal court session in Helena, on December 3, 2013, before Senior U.S. District Judge Charles C. Lovell, BRAD CHARLES FISHER, 51, a former resident of Helena and a current resident of Kenmore, Washington, was sentenced to a term of:
- ison: 45 months
- ecial Assessment: $100.00
- stitution: $729,794.16
- pervised Release: 3 years
FISHER was sentenced after a federal district court trial in which he was found guilty of attempt to evade or defeat income tax.
Assistant U.S. Attorney Chad C. Spraker and Department of Justice Tax Trial Attorney Joseph Rillotta prosecuted the case for the United States.
At trial, the following evidence and testimony was presented to the jury.
From April 2006 until January 2008, FISHER attempted to evade and defeat the payment of an income tax due and owing by him to the United States for the calendar years 2001 to 2006 by concealing and attempting to conceal from the Internal Revenue Service the nature and extent of his assets and by making false statements to Internal Revenue Service agents.
From 2001 through 2006, FISHER earned substantial amounts of income by selling insurance products. However, FISHER did not file any tax returns for these years until mid-2006. After IRS commenced a civil audit of FISHER for the 2001-03 tax years, and later sent him a notice of tax deficiency for this period, FISHER eventually filed his 2001-06 returns. In these tax returns, FISHER reported that he earned income and owed tax. However, contrary to his accountant(s instruction, he only paid a small portion of his tax due. By FISHER's own estimation, he owed a total of about $444,761 in tax for 2001-06 (not including interest and penalties). He paid a total of about $44,444. Accordingly, IRS referred this case to its Collections Division. An IRS agent was assigned to collect FISHER's back taxes, and he contacted FISHER in April 2006 to initiate the collections process. The agent asked that FISHER fill out a Collection Information Statement, which calls for the taxpayer to disclose his assets.
When the agent first met with FISHER on May 9, 2006, FISHER provided a partially filled out Collection Information Statement. Because the form did not list any motor vehicles, the agent asked FISHER what motor vehicles he owned. FISHER listed several cars, but failed to mention four to which he held title at the time: a 1967 Chevrolet Corvette, a 1974 Chevrolet Nova, a 1996 GMC K-1500, and a 1999 Chevrolet Tahoe. FISHER also failed to mention a 2004 Chaparral boat that he owned, until the agent inquired about a reference to a boat in FISHER's bank records during a later meeting. Even then, FISHER said he had "no equity" in the boat, when in fact he sold it shortly thereafter and received $17,227 net of encumbrances.
In late 2006, as it became apparent that FISHER was not selling assets voluntarily, the IRS began to take steps to levy certain of his assets. On April 9, 2007, FISHER sent a second Collection Information Statement to the agent. Again, however, it failed to disclose a vehicle that FISHER owned, this time a 2007 Chevrolet Silverado that he had recently purchased. As IRS Collections proceeded toward seizure of FISHER's assets, FISHER filed for bankruptcy on November 14, 2007. It was only during a subsequent bankruptcy hearing that the agent learned about the vintage classic cars that FISHER had previously concealed.
In addition to the agent's testimony and presentation of Department of Motor Vehicles (DMV) records concerning the concealed vehicles, the government offered testimony from the persons that sold certain cars (and the boat) to FISHER, as well as from the buyers who later purchased the vehicles from him. FISHER's travel agent also testified that, during the time his tax debt was outstanding, FISHER purchased expensive vacation packages instead, belying any suggestion that FISHER attempted to pay his debt in good faith.
The vast majority of American citizens pay their taxes when due. Mr. Fisher did not. A jury convicted him of willfully evading hundreds of thousands of dollars in tax liability. Today, Mr. Fisher was sentenced to 45 months in federal prison for his crime, which will serve as a deterrent to others who evade their tax liability." U.S. Attorney Michael W. Cotter.
Because there is no parole in the federal system, the "truth in sentencing" guidelines mandate that FISHER will likely serve all of the time imposed by the court. In the federal system, FISHER does have the opportunity to earn a sentence reduction for "good behavior." However, this reduction will not exceed 15% of the overall sentence.
The investigation was conducted by the Criminal Investigation Division of the Internal Revenue Service.
Bells Man Convicted of Methamphetamine TraffickingRead the Press Release
Jackson, TN – Angel Hernandez, 33, of Bells, TN, was convicted last night by a federal jury on one count of possession with intent to distribute 351 grams of ice methamphetamine, announced U.S. Attorney Edward L. Stanton III.
According to facts revealed during trial, on March 12, 2013, agents with the West Tennessee Violent Crime and Drug Task Force for the 28th Judicial District, the Drug Enforcement Administration and the Jackson Police Department executed a search warrant at the Deerfield Inn in Humboldt, Tennessee.
Hernandez was found in possession of 351 grams of ice methamphetamine. Agents also found a large amount of U.S. currency and other evidence that he intended to distribute the drugs. Agents with the task force testified that due to the purity of the methamphetamine, it had a potential street value of up to $50,000 and could have been distributed to more than one thousand individuals.
The jury deliberated approximately 30 minutes before returning its guilty verdict. Hernandez could be sentenced to between five and 40 years in prison and fined up to $5 million. There is no parole in the federal system.
This case was investigated by the West Tennessee Violent Crime and Drug Task Force for the 28th Judicial District and the Jackson Police Department. Assistant U.S. Attorney Matt Wilson represented the government.Bank Employee Pleads GuiltyRead the Press Release
Montgomery, Alabama - Christopher Todd Jones, 30 years old, of Montgomery, Alabama, pled guilty today before United States Magistrate Judge Wallace Capel, Jr., to a one-count Information charging Jones, a former employee of First Tuskegee Bank, with bank fraud, announced George L. Beck, Jr., United States Attorney for the Middle District of Alabama.
Jones admitted that while an employee of First Tuskegee Bank, he set up fictitious credit card accounts which he used to steal approximately $580,000.00 from First Tuskegee Bank. Jones faces a potential sentence of not more than 30 years imprisonment, a fine of not more than $1,000,000, and not more than 5 years of supervised release.
This case was investigated by the Federal Bureau of Investigation, and prosecuted by Assistant U.S. Attorney Brandon K. Essig and Assistant U.S. Attorney Donald G. Valeska.
PRESS CONTACT: Clark Morris
Email: [email protected]
Telephone: (334) 551-1755
Fax: (334) 223-7617Alabama Man Sentenced to Federal Prison for Stolen Identity Tax Refund Fraud SchemeRead the Press Release
Montgomery, Alabama - Clarence Hicks, of Montgomery, Ala., was sentenced to serve 57 months in federal prison and three years of supervised release and ordered to pay $210,555.62 in restitution for his role in a stolen identity refund fraud scheme, announced George L. Beck Jr., U.S. Attorney for the Middle District of Alabama. Hicks had previously pleaded guilty to filing a false claim for a federal tax refund and to aggravated identity theft.
According to court documents, Hicks had access to an Internal Revenue Service (IRS) Electronic Filing Identification Number assigned to another person and used that number to file false federal income tax returns in the names of stolen identities. The court found that Hicks intended to steal more than $300,000 from the IRS, which paid out $210,555.62 in false claims based on fraudulent returns Hicks filed.
This case was investigated by special agents of the Internal Revenue Service - Criminal Investigation. Trial Attorneys Justin Gelfand and Jason Poole of the department's Tax Division prosecuted the case.
Additional information about the department's Tax Division and its enforcement efforts may be found at justice.gov/tax.
PRESS CONTACT: Clark Morris
Email: [email protected]
Telephone: (334) 551-1755
Fax: (334) 223-7617
2 December 2013
Wisconsin Man Sentenced for Anonymous Attack on Koch IndustriesRead the Press Release
WICHITA, KAN. – A Wisconsin man has been sentenced to two years federal probation and ordered to pay $183,000 in restitution for taking part in a cyber-attack on Koch Industries in Wichita that was sponsored by a group known as Anonymous, U.S. Attorney Barr Grissom said today.
Eric J. Rosol, 38, Black Creek, Wis., pleaded guilty to one misdemeanor count of accessing a protected computer. In his plea, he admitted that on Feb. 28, 2011, he took part in a denial of service attack on a Web page of Koch Industries – Kochind.com. From Wisconsin, he used software called a Low Orbit Ion Cannon Code, which was loaded on his computer. He took part in the attack for approximately one minute. The attack, which was organized by a computer hacking group known as Anonymous, caused Kochind.com to go offline for approximately 15 minutes.
Koch Industries had hired a consulting group to protect its Web sites at a cost of approximately $183,000.
Grissom commended the FBI and Assistant U.S. Attorney Alan Metzger for their work on the case.Victoria Man Sentenced for Producing Child PornographyRead the Press Release
VICTORIA, Texas – Vincent Tyler Jimenez, 32, has been ordered to prison for 25 years following his conviction of sexual exploitation of a child, more commonly referred to as production of child pornography, announced United States Attorney Kenneth Magidson. Jimenez previously pleaded guilty July 1, 2013.
Today, Senior U.S. District Judge John D. Rainey took into consideration testimony from the government and the victims in the case. Noting the need to protect the public and to reflect the seriousness of his crime, the court then handed down the 25-year sentence. In addition to the prison term, Jimenez will be required to serve 15 years of supervised release upon the completion of his prison term and will be required to register as a sex offender.
On July 3, 2012, law enforcement in Waller County conducted an investigation into a person pretending to be a child who was soliciting children to produce pornographic images of themselves. The investigation revealed that Jimenez, while pretending to be a female juvenile, used a cell phone to text a child. Jimenez was able to convince the child to produce nude images and then send those images to Jimenez.
Over time, Jimenez learned the identity of the child’s minor sibling and began communicating with that sibling as well. Jimenez was able to convince the second sibling to also produce nude images.
At some point, the first victim resisted demands for more nude images and Jimenez then began to blackmail the victim with threats to distribute the pictures online if Jimenez did not receive new images.
The criminal activity was discovered by a parent of the children and reported to law enforcement. A state search warrant was executed on his Victoria County home, at which time a cell phone was discovered containing some of the nude images.
Homeland Security Investigations investigated.
This case, prosecuted by Assistant United States Attorney Lance Duke, was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to locate, apprehend and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Victoria Man Pleads Guilty to Possession of Child PornographyRead the Press Release
VICTORIA, Texas – Joshua Almeida, 23, has entered a plea of guilty to one count of possession of child pornography, announced United States Attorney Kenneth Magidson.
During the hearing, Almeida stipulated to the facts as presented in court. On March 18, 2012, the Victoria County Sheriff’s Office conducted an undercover online investigation into person trading child pornography. A computer which ultimately traced back to Almeida was determined to be offering numerous images of child pornography for distribution. A state search warrant was executed on Almeida’s home in Victoria on Sept. 27, 2012, at which time several electronic storage devices were seized and identified as belonging to Almeida. A subsequent computer forensics search of those devices led to the discovery of numerous files containing child pornography.
Senior U.S. District Judge John D. Rainey, who accepted the guilty plea, has set sentencing for March 3, 2014. At that time, Almeida faces up to 10 years imprisonment. He was permitted to remain on bond pending that hearing.
This case, prosecuted by Assistant United States Attorney Lance Duke, was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to locate, apprehend and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
US Attorney Lynch's testimony before NY County Lawyers' AssociationRead the Press Release
US Attorney Lynch's testimony before NY County Lawyers' Association
Two Men Sentenced for $39 Million FraudRead the Press Release
Montgomery, Alabama - After a three day sentencing hearing, on November 27, 2013, United States District Court Judge Myron S. Thompson sentenced Paul Hulse, Sr., to the statutory maximum of 10 years imprisonment followed by three years supervised release for interstate transportation of property by fraud, announced George L. Beck, Jr., U.S. Attorney for the Middle District of Alabama. Judge Thompson also sentenced Frank J. Teers to 8 years imprisonment followed by five years of supervised release for conspiracy to commit wire and financial institution fraud, and committing wire fraud and financial institution fraud.
Both men were ordered to pay $39,239,561.06 in restitution to the Federal Land Bank Association of South Alabama. Judge Thompson continued the sentencing co-defendant, Steven P. Mock, until 2014.
According to court filings, Paul Hulse, Sr. (“Hulse”) was a director of H&H Worldwide Financial Service, Inc., Paul Hulse, Jr. (“Hulse Jr.”) was H&H’s president, Steven P. Mock was an attorney in the Houston area, and Frank J. Teers was a bond broker employed by Tri-Star Financial Services in Houston. Beginning in 2003, Hulse began soliciting various persons and businesses for loans based on the false representation that he controlled a large portfolio of bonds—the amount ranged from tens to hundreds of millions of dollars—that could be used as collateral for the loans. Mock and Teers made false statements to the prospective lenders that supported Hulse’s claim that he owned a substantial bond portfolio. In fact, Hulse did not have a bond portfolio. None of the solicited institutions, which included Western National Bank of Midland, Texas, MetLife, UBS Securities, and Jefferies and Co. agreed to make a loan to Hulse or H&H.
In February 2005, Hulse began soliciting loans from the Federal Land Bank of South Alabama (the “Bank”) in Montgomery, Alabama. During the course of the discussions:
•Hulse falsely represented that he had a large bond portfolio that could serve as collateral for the loans to H&H and submitted documents that concealed Hulse’s plan to use approximately half the loan proceeds to purchase the bonds that were going to serve as collateral for the loans.
•Mock falsely claimed that he was Hulse’s “senior trust officer” and that the “trust agreements” permitted the use of $15 million of trust bonds in connection with the proposed loan.
•Teers falsely represented that he managed a significant bond portfolio for Hulse, provided documents to Hulse that Hulse used to support his claim of ownership, signed documents that represented that bonds were on account at Tri-Star, and failed to disclose to the Bank and to Tri-Star that he had been interviewed by IRS criminal investigators about Hulse’s fraudulent activities.
Based on those false representations, the Bank made two loans to H&H totaling $68.5 million in August and December 2005. H&H used more than half the money to buy the bonds that were to serve as collateral for the loan. A significant amount of the loan proceeds were used for the personal benefit of Mock, Hulse, and members of the Hulse family. Teers made more than $600,000 in commissions from the buying and selling of bonds on behalf of H&H. By Spring of 2007, the relationship between H&H and the Bank had deteriorated. In an effort to convince the Bank to allow the principal of the bonds to be used to make the quarterly loan payment, on June 28, 2007, Mock, Hulse, and Hulse Jr. sent a letter to the Bank that (a) falsely claimed that H&H was on the “doorstep” of obtaining a loan from Wells Fargo that would allow the Bank to be paid in full, and (b) described how the loan proceeds had been used without disclosing the fact that more than half the loan proceeds had been used to buy the bond collateral.
“These sentences are particularly fitting because these crimes were committed by professionals who have a fiduciary duty to our citizens of loyalty and trust,” stated U.S. Attorney Beck. “In order to maintain a level of confidence in our lending institutions, those closely involved with those lending institutions have to be forthcoming and honest. These defendants were not. These defendants lied and mislead these credit institutions for their own gain.”
The case was investigated by the FBI with assistance from the Internal Revenue Service, Criminal Investigations in Houston, Texas. This case was prosecuted by former Assistant United States Attorney Andrew O. Schiff and Assistant United States Attorney Denise O. Simpson.
PRESS CONTACT: Clark Morris
Email: [email protected]
Telephone: (334) 551-1755
Fax: (334) 223-7617Sewage Dumper Sentenced to Six Months in PrisonRead the Press Release
United States Attorney Laura E. Duffy announced today that Las Vegas resident Eric Russell was sentenced by the Honorable Roger T. Benitez to time served (approximately six months) in custody for dumping thousands of gallons of raw sewage on Bureau of Land Management (BLM) land in Imperial County. Russell, who has been in custody since June 2013 after absconding from authorities, was also ordered to pay $21,244.19 in restitution.
Russell had been a driver for All-in-One Environmental Services of Havasu, Arizona. On January 3, 2012, Russell was driving an All-in-One waste disposal truck along Highway 72 in Imperial County. In order to save the time it would take to drive to a lawful disposal site and properly dispose of his cargo, Russell illegally dumped approximately 1,500-2,000 gallons of domestic sewage onto BLM land alongside Highway 72. BLM rangers responded to the scene, and saw Russell’s sewage tanker truck stuck in a wash along Highway 78 (SR 78), near mile post 66 in Imperial County, and smelled a strong stench of sewage. Russell, the driver of the truck, told the ranger that the trunk contained nothing but water, but he declined to take a sip of the “water” himself. The passenger in the sewage truck advised the ranger that they had ended up in the wash after pumping out the holding tanks at a commercial center in the Imperial Sand Dune Recreation Area. But the passenger also indicated that Russell’s stepfather directed him to dump the sewage, and it was their practice to drive 10-15 miles outside of Blythe and dump waste on Red Cloud Road. BLM had to send a team to remediate the dump site, at a cost to the taxpayers of $21,244.19
Another All-in-One Environmental Services driver, Dennis Johnson (Russell’s stepfather) previously pleaded guilty to dumping sewage on the ground in Imperial County and was sentenced to probation and a fine (12-cr-05096).
“Dumping sewage in the middle of nowhere is not only disgusting and harmful to the environment but it is a federal crime that is worthy of time in custody,” said U.S. Attorney Duffy. “These defendants couldn’t be bothered to do the right thing, and now they are paying a price.”
“Untreated sewage contains bacteria and other pathogens that can cause a wide variety of acute illnesses, which is why sewage disposal is a regulated activity that must be done legally and safely,” said Jay M. Green, Special Agent-in-Charge of EPA’s criminal enforcement program in California. “Rather than abide by the law, the defendants in these cases devised a scheme to indiscriminately and dangerously dump untreated sewage onto federal lands located in Imperial County, California - saving them money and time. Today’s sentencing is a reminder that those who try to profit by committing environmental crimes will be held responsible for their actions.”
The BLM manages public lands -- many of which are remote areas that attract illegal dumping. Every year, California BLM Field Offices spend thousands of dollars to reverse the damage caused by abandoned automobiles, dumping and littering. In the California Desert District around 100-tons of solid waste was removed from public lands in 2013 according to Sterling White, Hazardous Materials Program Specialist. Illegally dumped wastes found on BLM lands are primarily nonhazardous materials that are dumped to avoid either disposal fees or the time and effort required for proper disposal. These materials typically include: (1) construction and demolition waste such as drywall, roofing shingles, lumber, bricks, concrete, and siding, (2) abandoned automobiles, auto parts, and scrap tires, (3) appliances or "white goods," (4) furniture, (5) yard waste, (6) household trash, and (7) tires. Such wastes end up being illegally dumped because they are banned from certain landfills, or because it costs money to properly dispose of them. BLM reminded the public that if they see anyone dumping these or other prohibited waste on public lands, please contact the nearest BLM Field Office or contact BLM through its web site, www.blm.gov.
DEFENDANT Criminal Case No. 13cr1273-BEN Eric Russell SUMMARY OF CHARGESUnlawful Disposal of Sewage, in Violation of Title 33, United States Code, Sections 1319 and 1345.
Maximum Penalties: 3 years in custody and $50,000 fine/day of violation, a minimum fine of $5,000/day of violation, $100 special assessment.
AGENCIESBureau of Land Management
U.S. Environmental Protection Agency, Criminal Investigations DivisionRomanian Man Heads to Prison on 33 Counts of Wire FraudRead the Press Release
VICTORIA, Texas – Romanian national Doru Gabriel Trifu, 29, has been ordered to federal prison following his convictions on 33 counts of wire fraud in an Internet fraud scheme, announced United States Attorney Kenneth Magidson and Brian M. Moskowitz, special agent in charge of Homeland Security Investigations (HSI). A federal jury sitting in Victoria convicted Trifu following a four-day trial on Wednesday, Sept. 25, 2013.
Today, Senior U.S. District Judge John Rainey, who presided over the trial, sentenced Trifu to a total of 96 months in federal prison to be followed by three years supervised release. He was further ordered to pay $562,239.78 restitution. In handing down the sentence, Judge Rainey noted this was the most extensive fraud scheme he had ever seen and that the scheme played to someone’s allegiances and loyalties to the military. Not a U.S. citizen, Trifu is expected to face deportation proceedings following his release from prison.
Trifu, a Romanian non-immigrant residing in Orangevale, Calif., was part of the fraudulent scheme in which consumer items were listed for sale over the Internet. Individuals attempting to make purchases were instructed to send money via MoneyGram to an escrow agent who would accept the funds, complete the transaction and deliver the item. However, after the buyer electronically transferred the money, the item would never be delivered.
“This case serves as an important and timely ‘Cyber Monday’ reminder that consumers need to be careful when shopping online,” said Moskowitz.
During trial, the government presented videos and numerous surveillance photographs taken from Wal-Mart stores across Texas, Mississippi and Alabama where the fraudulent transactions occurred.
Testimony was provided by several victims who described how they were told they were purchasing the item from a U.S. serviceman who was about to deploy to the Middle East and were told to use a third party broker to complete the transaction.
An agent with Homeland Security Investigations (HSI) also testified and identified a pattern of approximately 230 fraudulent transactions between March 2011 and February 2012 using two fake U.S. passport numbers. Over the course of the scheme, the amount of identified fraud totaled more than $567,000.
Trifu has been in custody since his November 2012 arrest in California where he will remain pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.The case was investigated by HSI. Assistant U.S. Attorney Lance Watt is prosecuting.
Rochester Man Sentened to 15 Years for Attempted Production of Child PornographyRead the Press Release
Planned to Create Still Images and Videos of a 12-Year-Old Girl
ALBANY, NEW YORK – JASON FRANK, age 27, of Rochester, New York, was sentenced to fifteen (15) years of imprisonment for attempted production of child pornography on November 27, 2013 in Albany by Chief United States District Court Judge Gary L. Sharpe, announced United States Attorney Richard S. Hartunian and Joseph D’Amico, Superintendent of the New York State Police. FRANK, who had entered a guilty plea on August 8, 2013, was also ordered to serve a 10-year term of supervised release, to have no unsupervised contact with minors, and to register with the New York State Sex Offender Registry Program.
In February 2013, FRANK began chatting online with an undercover New York State Police officer posing as a twelve-year-old girl in Albany, New York. Over approximately two months, FRANK sent the undercover officer still images and videos of child pornography in an effort to convince her to meet with him at a Syracuse hotel so that he could have sex with her and film it. On April 9, 2013, FRANK arrived at a hotel in Syracuse expecting to meet the girl and to create child pornography, but he was arrested by the New York State Police. At the time of FRANK’s arrest, he possessed a digital camera with video recording capabilities and a thumb drive that contained still images and videos of child pornography.
This case was investigated by the New York State Police.
Prior Sex Offender Pleads Guilty to Federal Child Pornography ChargesRead the Press Release
ALBUQUERQUE – James Olsson, 60, of Albuquerque, N.M., pleaded guilty this morning to a two-count indictment charging him with possession of visual depictions of minors engaged in sexually explicit conduct. Under the terms of his plea agreement, Olsson will be sentenced to ten years in federal prison followed by a lifetime of supervised release. Olsson will be required to register as a sex offender after he completes his prison sentence.
The indictment charged Olsson with possession of child pornography on April 11, 2013, in Bernalillo County, N.M. According to court filings, on that day, a state probation officer learned that Olsson possessed child pornography during a routine field visit with Olsson at his residence. Olsson was on probation for failure to register as a sex offender as required by his 2009 state court conviction for possession of child pornography. Olsson was arrested on state charges that day and was in state custody until he was transferred to federal custody on June 26, 2013.
In his plea agreement, Olsson admitted that while on probation for failure to register as a sex offender, he obtained child pornography images and videos from the Internet. Olsson further admitted that he had been collecting child pornography for approximately six months prior to his arrest in April 2013.
Olsson must serve an enhanced sentence of not less than ten years in prison because of his prior child pornography conviction. Olsson has been in federal custody since his arrest and remains detained pending his sentencing hearing, which has yet to be scheduled.
This case was investigated by the Albuquerque office of the FBI, the Bernalillo County Sheriff’s Office and the New Mexico Corrections Department Probation and Parole, and is being prosecuted by Assistant U.S. Attorney Marisa A. Lizarraga.
The case was filed as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice (DOJ) to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and DOJ’s 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 http://www.justice.gov/psc/.
The case also was brought as part of the New Mexico Internet Crimes Against Children (ICAC) Task Force’s mission, which is to locate, track, and capture Internet child sexual predators and Internet child pornographers in New Mexico. There are 64 federal, state and local law enforcement agencies associated with the ICAC Task Force, which is funded by a grant administered by the New Mexico Attorney General’s Office. Anyone with information relating to suspected child predators and suspected child abuse is encouraged to contact federal or local law enforcement.
Payette Man Pleads Guilty to Possessing Child PornographyRead the Press Release
BOISE – Steven Ray Hemenway, 47, of Payette, Idaho, pleaded guilty today in United States District Court to possessing sexually explicit images of minors, U.S. Attorney Wendy J. Olson announced.
According to the plea agreement, in December 2012, law enforcement officers executed a search warrant at a residence in Toronto, Ontario, Canada. The individual at that residence confessed to distributing images of child pornography via his e-mail account. Investigators reviewed the account and developed information that the Canadian subject had sent images and videos of child pornography to an e-mail account associated with Hemenway. In February 2013, federal agents executed a search warrant at Hemenway’s home in Payette and seized his computer. During an interview with investigators, Hemenway admitted that he had been receiving child pornography via the Internet for several years, according to the plea agreement. He also told agents that he had e-mailed between 100 and 500 images of child pornography to approximately ten other e-mail accounts during the previous year.
The images and videos recovered from Hemenway’s computer confirmed that the user had been receiving and distributing child pornography, including sexually explicit material depicting prepubescent minors.
The material was sent to the National Center for Missing and Exploited Children (NCMEC) for comparison with previously identified victims of abuse. According to NCMEC, among the images found on Hemenway’s computer were previously known victims from North Carolina, Georgia, Washington, Missouri, Connecticut, Kentucky, Pennsylvania, Canada, United Kingdom, Ukraine, France and Belgium.
The charge is punishable by up to ten years in prison, a maximum fine of $250,000, and five years to lifetime supervised release.
Sentencing is set for February 25, 2014, before U.S. District Edward J. Lodge at the federal courthouse in Boise.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab “resources.”
Orthopedic Surgeon Pleads Guilty to Conspiracy to Take Fraudulent Tax DeductionsRead the Press Release
ALEXANDRIA, Va. – Abdul Razaq, an orthopedic surgeon in La Plata, Md, pleaded guilty today to conspiring to defraud the United States Department of Treasury by taking fraudulent tax deductions as part of a decades-long scheme to conceal the transfer of at least $3.5 million from the government of Pakistan to fund lobbying efforts in America related to Kashmir.
Dana J. Boente, Acting United States Attorney for the Eastern District of Virginia; John P. Carlin, Acting Assistant Attorney General for National Security; Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office; Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division; and Thomas J. Kelly, Special Agent in Charge, IRS Criminal Investigation, Washington D.C. Field Office, made the announcement after the plea was accepted by United States District Judge Liam O’Grady.
Razaq faces a maximum penalty of five years in prison when he is sentenced on July 18, 2014.
In a statement of facts filed with the plea agreement, Razaq, a member of the Board of Directors of the Society for International Help, a 501(c)(3) tax-exempt charity based in New York, admitted to taking charitable deductions for money that he routed through the Society for International Help, as well as another charity – the Kashmiri American Council (KAC) – even though he was reimbursed at least in part for these deductions in Pakistan. Razaq also admitted to being part of Syed Ghulam Nabi Fai’s financial network of donors, which Fai used to conceal that the KAC was funded with at least $3,500,000 from the Inter-Services Intelligence Directorate, Pakistan’s military intelligence service. Fai was sentenced to serve two years in prison on March 30, 2012.
This investigation is being conducted by the FBI’s Washington Field Office and the IRS Criminal Investigation’s Washington Field Office. The prosecution is being handled by Assistant U.S. Attorney Gordon Kromberg, Trial Attorney John Gibbs of the Counterterrorism Section of the Justice Department’s National Security Division, and Special Assistant U.S. Attorney Allison Ickovic from the Justice Department’s Tax Division.
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.One Defendant Sentenced, Another Pleads Guilty in Dodge City Racketeering CaseRead the Press Release
WICHITA, KAN. - One member of a Dodge City street gang was sentenced and another pleaded guilty Monday in a federal racketeering case, U.S. Attorney Barry Grissom said today.
Fabian Neave, 26, Dodge City, Kan., was sentenced to 60 months in federal prison. He pleaded guilty to one count of racketeering conspiracy. In his plea, he admitted committing crimes while he was a member of the Diablos Viejos and associated with the Norteno street gang.
Alfredo Beltran-Ruiz, 22, Dodge City, Kan., pleaded guilty to one count of aiding and abetting attempted murder, which was a violent crime in aid of racketeering.
In his plea, Neave admitted being involved in three incidents. He took part in an Aug. 27, 2011, assault at 703 E. 9th Ave. in Dodge City, and he possessed methamphetamine with intent to distribute on Dec. 27, 2011. In the third incident, on July 2, 2008, he and other Nortenos robbed a victim named Bryant Licon. During the robbery, Neave held a knife to Licon. He and two other Nortenos split the money from the robbery.
In his plea, Beltran-Ruiz admitted that on March 15, 2011, he aided and abetted the attempted murder of a victim named Reyes Delira-Padilla by firing shots at the victim’s house at 1705 Ave. D in Dodge City. Delira-Padilla was a member of the rival Sureno gang.
Beltran-Ruiz is set for sentencing Feb. 24. He faces a penalty of up to 10 years in federal prison and a fine up to $250,000.
Both defendants were among 23 Nortenos indicted in May 2012. It was only the second time a federal RICO Act indictment (Racketeer Influenced and Corrupt Organizations Act) had been filed in Kansas. So far, 21 defendants have been convicted. Defendants Adam Flores and Jayson Vargas are awaiting trial.
Grissom commended the Dodge City Police Department, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Ford County Sheriff?s Office, the Ford County Attorney’s Office, the Kansas Bureau of Investigation, Assistant Aaron Smith and Assistant U.S. Attorney Lanny Welch for their work on the case.Navajo Man Sentenced to 188 Months Imprisonment for Armed Bank RobberyRead the Press Release
PHOENIX – On Dec. 2, 2013, Michael James, 42, of Tohatchi, N.M., was sentenced by U.S. District Judge Howard D. McKibbento 188-months imprisonment following his plea of guilty to armed bank robbery.
On May 17, 2013, James entered the First American Credit Union, located on the Navajo Indian Reservation in Window Rock, Ariz., and displayed a BB handgun to the bank tellers – demanding money. James was given the sum of $15,226.
The instant offense constituted James’ third felony conviction for a crime of violence.
The investigation in this case was conducted by the Federal Bureau of Investigation and the Navajo Criminal Investigator’s Office in Window Rock, Ariz. The prosecution was handled by Cassie Bray Woo, Assistant U.S. Attorney, District of Arizona, Phoenix.
CASE NUMBER: CR-13-8145-PCT-DGC
RELEASE NUMBER: 2013-090_JamesFor more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
Mingo’s Former Chief Magistrate Pleads Guilty to Federal Election FraudRead the Press Release
Dallas L. Toler is the fourth former Mingo official to plead guilty in connection with federal corruption probe
CHARLESTON, W.Va. –Mingo County’s former chief magistrate pleaded guilty in Charleston federal court to voter registration fraud, U.S. Attorney Booth Goodwin announced today. Dallas L. Toler, 45, is the fourth former Mingo County official to plead guilty to charges in connection with a federal corruption investigation.
U.S. Attorney Booth Goodwin said, "Corruption is the biggest threat to democracy. In Mingo County, corruption was an epidemic. Once again in this investigation we have a judge engaging in corruption—this time corruption of the electoral process so that he and his cohorts could keep their jobs." Goodwin continued, "The people of Mingo County are tired of these shenanigans, and we’ll continue to do what’s necessary to help them."
In or about April 2012, Toler, who at the time was a member of a political campaigning and fundraising group known as "Team Mingo," participated with other individuals in an effort to identify potential voters who would support Team Mingo's candidates in the 2012 primary election. Toler was a candidate to retain the office of magistrate.
Toler, a landlord of several rental properties in and around Mingo County, went to one of his rental properties in April 2012 to collect rent. During the visit to his rental unit, Toler encountered an individual who he learned was on probation for a felony offense. In a later encounter, Toler told the individual that he would arrange for the individual to be registered to vote in the 2012 primary election. Toler knew that the individual was on probation for a felony and was ineligible to vote. Toler later procured the completion and submission of a voter registration application in the name of the known person. Toler also caused the application to be completed and caused it to include a false statement that the known person was not on probation for a felony. On or about April 23, 2012, after receiving a voter registration card as the result of Toler's actions, the known person unlawfully voted in the 2012 primary election in Mingo County.
United States District Court Judge Thomas E. Johnston presided over today’s plea hearing and will sentence Toler on March 10, 2014. Toler faces five years in prison and a $250,000 fine. Toler previously resigned as chief magistrate of Mingo County in October. As part of his federal guilty plea, Toler's plea agreement with the Office of the U.S. Attorney required him to resign as a Mingo County magistrate and never seek elected office again.
Toler was previously appointed as magistrate in January 2012 by former Mingo County Circuit Judge Michael Thornsbury.
Thornsbury, 57, pleaded guilty in October for his role in a scheme to violate the constitutional rights of an individual to cover up evidence of illegal drug use and other misconduct by late Mingo County Sheriff Eugene Crum. Thornsbury faces up to 10 years in prison when he is sentenced on January 13, 2014.
Another former Mingo County official, C. Michael Sparks, 44, previously pleaded guilty on Nov. 18 in connection with a conspiracy to deprive a Mingo County resident of his constitutional rights. Sparks, Mingo County's former prosecuting attorney, faces a year in prison when he is sentenced on February 24, 2014.In a separate matter, former Mingo County Commissioner David Baisden pleaded guilty in connection with a scheme to illegally extort a discount from a Mingo County tire store. Baisden, 66, resigned from the Mingo County Commission in October. Baisden faces up to 20 years in prison when he is sentenced on January 14, 2014.
The investigation is being conducted by the FBI and the West Virginia State Police. Counsel to the United States Attorney Steven Ruby and Assistant United States Attorney Haley Bunn are handling the prosecution.
Click here to view a copy of the plea agreement
Middleburg Man Sentenced to 5 Years in Prison for Receipt of Child PornographyRead the Press Release
Jacksonville, FL – U.S. District Judge Timothy Corrigan has sentenced Robert Hohman (66) to five years in federal prison for receipt of child pornography. Hohman was indicted on October 18, 2012. He pleaded guilty to the offense on August 6, 2013.
In December 2010, the Federal Bureau of Investigation (“FBI”) initiated an investigation regarding a large volume of child pornography being distributed by a French-based message board. A message board is an online discussion website that allows users to hold conversations via posted messages. Over the course of this investigation, a customized message board or forum was created, which appeared to be distributing large amounts of child pornography. Further investigation revealed that one of the individuals utilizing the forum was Robert Hohman.
On August 7, 2012, special agents with the FBI conducted a non-custodial interview of Hohman at his job. During the interview Hohman confessed to registering a specific username and associated email address on the forum. In addition, he admitted that he had been seeking, viewing, and downloading child pornography for many years. During the interview, Hohman gave the FBI consent to search his home computer. A forensic review of Hohman’s computer revealed that he downloaded over a dozen videos and hundreds of images of children, as young as toddlers, involved in sexually explicit conduct with adults.
This case was investigated by Federal Bureau of Investigation. It was prosecuted by Assistant United States Attorney Malisa Chokshi.
It is another case brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Michigan Aquarium Store Operators Plead Guilty to Illegal Trafficking of Marine LifeRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Otha Easley, Acting Special Agent in Charge, NOAA Fisheries Office of Law Enforcement, and Edward Grace, Deputy Assistant Director, U.S. Fish & Wildlife Service Office of Law Enforcement, announced that Richard Perrin, 80, formerly of Romulus, Michigan, pled guilty yesterday in federal District Court in Key West for conspiring with others to transport, sell, receive, acquire, and purchase fish and wildlife, Sea Fans (Gorgonia flabellum and Gorgonia ventalina), ornamental tropical fish, sharks, and alligators (Alligator mississippiensis), with a fair market value in excess of $350.00, knowing the wildlife was taken, possessed, transported, sold, and intended to be sold in violation of the laws and regulations of the State of Florida, in violation of Title 16, United States Code, Sections 3372(a)(2)(A), 3372(a)(4), and 3373(d)(1) and (2), all in violation of Title 18,United States Code, Section 371.
United States District Court Judge Jose E. Martinez, who accepted Perrin’s plea, set sentencing in the matter for March 25, 2014 at 2:00 p.m. in Key West. Perrin faces a maximum sentence of five years in prison, three years of supervised release, and a criminal fine of up to $250,000. He also faces forfeiture of the vehicle used in the commission of the Lacey Act Violations. Perrin’s co-defendant, Joseph Franko, 35, also of Romulus, entered a guilty plea to the same charge on November 25, 2013 and faces the same possible sentence and fine.
According to the Indictment and Joint Factual Statements submitted to the Court, from approximately December 2008 through December 2011, Perrin and Franko engaged in a conspiracy to purchase, harvest, and transport marine life and reptiles from Florida to Michigan for sale through a business known as Tropicorium, Inc. Perrin was the owner Tropicorium, engaged in the day-to-day management and operation of the corporation, while Franko was an employee. Tropicorium was organized in 1993 under the laws of Michigan with its principal place of business in Romulus. Tropicorium was engaged in the purchase and retail sale of marine life and reptiles, including sharks, marine invertebrates, Sea Fans, ornamental tropical fish, and alligators.
The defendants admitted that they failed to acquire or possess the licenses required by Florida Statute for the marine life they harvested during multiple trips to the Florida Keys. Additionally, the Sea Fans taken by the defendants and sold in Michigan are prohibited from being harvested from the waters of the State or the Florida Keys National Marine Sanctuary, where they plied their trade. Richard Perrin and Franko also made stops while en route to the Keys in the area of Big Cypress National Preserve, where they illegally poached juvenile alligators to sell through Tropicorium. Unknown to the defendants, on one occasion they actually sold a baby alligator and illegal Sea Fans from a Florida harvesting trip to an undercover Special Agent of the Fish & Wildlife Service. They also utilized a facility on Grassy Key as maintenance base for their harvested marine life until they were ready to ship or transport the specimens to Michigan for sale.
Mr. Ferrer commended the joint investigative efforts of the Special Agents of the NOAA Office of Law Enforcement and the Fish & Wildlife Service Office of Law Enforcement who participated in the long-term investigation into the illegal harvesting and sale of marine life resources from the Florida Keys known as Operation Rock Bottom, and the assistance of the Officers of the Michigan Department of Natural Resources. This case was prosecuted by Assistant U.S. Attorneys Thomas Watts-FitzGerald of the Economic & Environmental Crimes Section and Antonia Barnes of the Asset Forfeiture Division.
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.
Macy Man Sentenced for Robbery ConvictionRead the Press Release
United States Attorney Deborah R. Gilg announced that Cory Woodhull, age 25 of Macy, Nebraska, was sentenced for his conviction for robbery in Indian Country. Chief United States District Court Judge Laurie Smith Camp sentenced Woodhull to 40 months imprisonment to be followed by three years of supervised release. Woodhull was further ordered to pay restitution in the amount of $750.
Woodhull found his victim sitting in a snow bank and unable to make it to his residence following a New Year’s Eve party. Woodhull assisted the victim to his home but, once inside, Woodhull beat and kicked the victim while demanding the PIN to the victim’s food stamp card. Woodhull eventually took the victim’s food stamp card and a DVD collection and left the residence. The victim suffered serious bodily injuries and was unable to move about his residence for approximately three days after the assault.
This case was investigated by the Federal Bureau of Investigation.
Lymphedema & Wound Care Institute Settle False Claims Act AllegationsRead the Press Release
HOUSTON - Susan Morgan, Erin Hamilton and Ryan Chuston, doing business as the Lymphedema & Wound Care Institute Inc., have paid the United States $4.3 million to settle claims they violated the Federal False Claims Act by submitting claims to the Medicare Program for physical therapy treatments provided by unqualified therapists, announced United States Attorney Kenneth Magidson. Additionally, under the terms of the settlement agreement, Morgan will be barred from participating in federal health benefit programs for a period of 10 years.
Morgan, Hamilton and Chuston conducted business in four locations throughout the Houston area as the Lymphedema & Wound Care Institute. The settlement announced today involved allegations that from Jan. 2, 2006 through Sept. 12, 2012, they billed the Medicare program for providing manual lymphatic drainage therapy to Medicare beneficiaries using massage therapists as opposed to physical therapists as required under the rules and regulations governing the Medicare program.
“Today’s settlement once again demonstrates our commitment to fight the fraud and abuse that threatens the financial health of our federal healthcare programs,” said Magidson. “In addition to yielding a substantial recovery for taxpayers, this settlement will prohibit Morgan from participating in the federal health benefit programs for several years, which should deter similar conduct in the future.”
By agreeing to a voluntary suspension from federal health benefit programs, Morgan will not be allowed to bill these programs for treating Medicare beneficiaries for 10 years.
Also as part of the agreement, Hamilton and Chuston have agreed to operate the Lymphedema & Wound Care Institute under a corporate integrity agreement to be monitored by the Office of Counsel to the Inspector General for the Department of Health and Human Services. The corporate integrity agreement will provide for increased monitoring of Lymphedema & Wound Care Institute’s billing practices.
The settlement resolves allegations made against Morgan, Hamilton and Chuston in a qui tam or whistleblower lawsuit filed in January 2011 in federal court by a physician who also provides manual lymphatic drainage treatments to patients with lymphedema. Under the False Claims Act, private citizens can bring suit on behalf of the government and share in any amounts that are obtained through that legal action. In this case, the whistleblower will receive 19% of the proceeds of the settlement.
The investigation was conducted by the Department of Health and Human Services - Office of Inspector General. Assistant United States Attorney Andrew A. Bobb is prosecuting the case.
Knoxville Attorney Pleads Guilty to Federal Tax OffenseRead the Press Release
KNOXVILLE, Tenn. – Johnny V. Dunaway, 65, of Knoxville, Tenn., pleaded guilty on Dec. 2, 2013, in the U.S. District Court for the Eastern District of Tennessee at Knoxville, to filing a false tax return. Sentencing has been set for 11:00 a.m., Apr. 23, 2014, in U.S. District Court in Knoxville.
Dunaway faces a term of three years in prison. In addition, he may be ordered to pay restitution to the Internal Revenue Service for unpaid taxes.
According to a one-count information filed by the U.S. Attorney in October 2013, Dunaway submitted a false tax return for the 2008 tax year. In conjunction with his guilty plea, Dunaway admitted that his 2008 return failed to declare truthfully the business income that he had received from his law practice.
This conviction is the result of an investigation by the Internal Revenue Service. Assistant U.S. Attorney Frank M. Dale, Jr. represented the United States.
Jicarilla Apache Man Pleads Guilty to a Domestic Assault by a Habitual Offender ChargeRead the Press Release
ALBUQUERQUE – Quentin Scott Veneno, 27, pleaded guilty this morning to a domestic assault by a habitual offender charge under a plea agreement that requires him to serve a 27 month federal prison sentence. Veneno’s guilty plea was announced by Acting U.S. Attorney Steven C. Yarbrough and Police Chief Kendall P. Vicenti of the Jicarilla Apache Tribal Police Department.
Veneno, a member of the Jicarilla Apache Nation who resides in Dulce, N.M., was arrested on Sept. 19, 2013, based on an indictment alleging that he assaulted his domestic partner, also a member of the Jicarilla Apache Nation, in Nov. 2012. Veneno was charged federally as a habitual domestic violence offender because he has two prior domestic violence convictions in the Jicarilla Apache Nation Court.
This morning, Veneno pled guilty to the indictment and admitted assaulting his intimate partner and the mother of his child by striking her in the face multiple times with a closed fist and biting her on the neck. Veneno further admitted that he committed this crime on Nov. 8, 2012, in a location within the Jicarilla Apache Reservation. Veneno also admitted that he previously was convicted on domestic violence charges on two occasions in 2009 before the Jicarilla Apache Nation Court.
Veneno has been in federal custody since his arrest and remains detained pending his sentencing hearing, which has yet to be scheduled.
This case was investigated by the Jicarilla Apache Tribal Police Department, and is being prosecuted by Special Assistant U.S. Attorney David Adams. It was brought pursuant to the Tribal Special Assistant U.S. Attorney (Tribal SAUSA) Pilot Project in the District of New Mexico which is sponsored by the Justice Department’s Office on Violence Against Women under a grant administered by the Pueblo of Laguna. The Tribal SAUSA Pilot Project seeks to train tribal prosecutors in federal law, procedure and investigative techniques to increase the likelihood that every viable violent offense against Native women is prosecuted in either federal court or tribal court, or both. The Tribal SAUSA Pilot Project was largely driven by input gathered from annual tribal consultations on violence against women, and is another step in the Justice Department's on-going efforts to increase engagement, coordination and action on public safety in tribal communities.
Idaho Aquarium Operators Sentenced for Illegal Trafficking of Marine LifeRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Otha Easley, Acting Special Agent in Charge, NOAA Fisheries Office of Law Enforcement, and David Pharo, Resident Agent in Charge U.S. Fish & Wildlife Service, Miami, announce that Ammon Covino, 40, formerly of Meridian, Idaho, and Christopher Conk, 40, of Middleton, Idaho, were sentenced today in federal District Court in Key West for conspiring to harvest, transport, and sell spotted eagle rays and lemon sharks, knowing the marine life were taken, possessed, transported, sold, and intended to be sold in violation of the laws and regulations of the State of Florida, contrary to the federal Lacey Act, Title 16, United States Code, Sections 3372(a)(2)(A), and 3373(d)(1) and (2), all in violation of Title 18, United States Code, Section 371.
Covino was sentenced by United States District Court Judge Jose E. Martinez to one year and a day in prison, followed by a term of supervised release of two years. Additionally, Covino was barred by the Court from any employment during the period of supervised release that involves the possession, display, transportation, exhibition, purchase, or sale of wildlife. Conk, who cooperated with investigators, received a reduced sentence of four months in prison followed by two years of supervised release. Conk was also the subject of an Order of Forfeiture which forfeited the motor vehicle used in perpetrating the crime. As part of his sentence, 180 days of the supervised release is to be served in home detention under electronic monitoring. Conk also received the specific employment prohibition during his period of supervised release, as Covino. In imposing the prison sentences, Judge Martinez stated that the defendants’ conduct “strikes to the very heart of this area and the economy of this area.”
According to the Indictment, Joint Factual Statements submitted to the Court, and argument at sentencing, during March 2012 through approximately November 2012, Covino and Conk engaged in a conspiracy to purchase and transport wildlife from the Florida Keys to Idaho for exhibit at the Idaho Aquarium in Boise. The wildlife included spotted eagle rays and lemon sharks, which required Florida licenses and permits never acquired by the participants in the deals. According to the Factual Statements, Covino and Conk were both at the time officers of the Aquarium, were individually advised of the requirements of the law, and nevertheless directed their Florida-based suppliers to ignore the law and make the shipments. Unknown to Covino and Conk at the time of the phone calls was the fact that the business owner was cooperating with federal authorities and the phone conversations and text messages were recorded. Payment for the various specimens was made by credit cards held in the Aquarium?s name. The defendants acknowledged that their illegal conduct was within the scope of their employment, and intended to benefit, at least in part, the Idaho Aquarium. In the same case, Idaho Aquarium, Inc. pled guilty to the same conspiracy count and is awaiting sentencing.
In a separate criminal proceeding, United States v. Peter C. Covino, IV, Case No. 13-10010-CR-Martinez, Peter Covino, the nephew of Ammon Covino, was tried, convicted, and sentenced for obstruction of justice in connection with his effort to persuade the supplier in the Florida Keys to destroy the invoices and messages related to the illegal purchases of marine life to prevent their use in Ammon Covino’s case, in violation of Title 18, United States Code, Sections 1512(b)(2)(B). Testimony at the trial established that after Ammon Covino had been arrested on February 21, 2013 he induced Peter Covino to make the calls. During the sentencing proceeding, Judge Martinez specifically noted that Peter Covino would likely never have been involved in the criminal conduct but for the actions of his uncle.
Mr. Ferrer commended the joint investigative efforts of the Special Agents of the NOAA Office of Law Enforcement and the Fish & Wildlife Service Office of Law Enforcement who participated in the long-term investigation into the illegal harvesting and sale of marine life resources from the Florida Keys known as Operation Rock Bottom, and the assistance of the Officers of the Idaho Department of Fish & Game. This case was prosecuted by Assistant U.S. Attorneys Thomas Watts-FitzGerald of the Economic & Environmental Crimes Section and Antonia Barnes of the Asset Forfeiture Division, with assistance from the U.S. Attorney’s Office for the District of Idaho.
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.
Health Care Clinic Owners Sentenced for Role in <br /> $8 Million Health Care Fraud SchemeRead the Press Release
Two health care clinic owners were sentenced today in connection with an $8 million health care fraud scheme involving the now-defunct home health care company Flores Home Health Care Inc.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Special Agent in Charge Michael B. Steinbach of the FBI’s Miami Field Office, and Special Agent in Charge Christopher B. Dennis of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Office of Investigations Miami Office made the announcement.
Miguel Jimenez, 43, and Marina Sanchez Pajon, 29, both of Miami, were sentenced by U.S. District Judge Ursula Ungaro in the Southern District of Florida. Jimenez was sentenced to serve 87 months in prison and Pajon was sentenced to serve 57 months in prison. Jimenez and Pajon pleaded guilty in August to conspiracy to commit health care fraud.
Jimenez and Pajon, who are married, were owners and operators of Flores Home Health, a Miami home health care agency that purported to provide home health and physical therapy services to Medicare beneficiaries.
According to court documents, Jimenez and Pajon operated Flores Home Health for the purpose of billing Medicare for, among other things, expensive physical therapy and home health care services that were not medically necessary and/or not provided. Jimenez’s primary role at Flores Home Health involved controlling the company and running and overseeing the schemes conducted through Flores Home Health. Both Jimenez and Pajon were responsible for negotiating and paying kickbacks and bribes, interacting with patient recruiters, and coordinating and overseeing the submission of fraudulent claims to the Medicare program.
Jimenez, Pajon, and their co-conspirators paid kickbacks and bribes to patient recruiters in return for the recruiters providing patients to Flores Home Health for home health and therapy services that were medically unnecessary and/or not provided. They also paid kickbacks and bribes to co-conspirators in doctors’ offices and clinics in exchange for home health and therapy prescriptions, medical certifications, and other documentation. Jimenez, Pajon, and their co-conspirators used the prescriptions, medical certifications, and other documentation to fraudulently bill Medicare for home health care services, which Jimenez and Pajon knew was in violation of federal criminal laws.
From approximately October 2009 through approximately June 2012, Flores Home Health was paid approximately $8 million by Medicare for fraudulent claims for home health services that were not medically necessary and/or not provided.
The case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida. This case was prosecuted by Trial Attorney A. Brendan Stewart of the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,700 defendants who have collectively billed the Medicare program for more than $5.5 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov .
Health Care Clinic Owners Sentenced for Role in $8 Million Health Care Fraud SchemeRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Mythili Raman, Acting Assistant Attorney General of the Justice Department’s Criminal Division, Michael B. Steinbach, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, and Christopher B. Dennis, Special Agent in Charge, U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Office of Investigations, Miami Office announce that two health care clinic owners were sentenced today in connection with an $8 million health care fraud scheme involving the now-defunct home health care company Flores Home Health Care Inc.
Miguel Jimenez, 43, and Marina Sanchez Pajon, 29, both of Miami, were sentenced by U.S. District Judge Ursula Ungaro. Jimenez was sentenced to serve 87 months in prison and Pajon was sentenced to serve 57 months in prison. Jimenez and Pajon pleaded guilty in August to conspiracy to commit health care fraud.
Jimenez and Pajon, who are married, were owners and operators of Flores Home Health, a Miami home health care agency that purported to provide home health and physical therapy services to Medicare beneficiaries.
According to court documents, Jimenez and Pajon operated Flores Home Health for the purpose of billing Medicare for, among other things, expensive physical therapy and home health care services that were not medically necessary and/or not provided. Jimenez’s primary role at Flores Home Health involved controlling the company and running and overseeing the schemes conducted through Flores Home Health. Both Jimenez and Pajon were responsible for negotiating and paying kickbacks and bribes, interacting with patient recruiters, and coordinating and overseeing the submission of fraudulent claims to the Medicare program.
Jimenez, Pajon, and their co-conspirators paid kickbacks and bribes to patient recruiters in return for the recruiters providing patients to Flores Home Health for home health and therapy services that were medically unnecessary and/or not provided. They also paid kickbacks and bribes to co-conspirators in doctors’ offices and clinics in exchange for home health and therapy prescriptions, medical certifications, and other documentation. Jimenez, Pajon, and their co-conspirators used the prescriptions, medical certifications, and other documentation to fraudulently bill Medicare for home health care services, which Jimenez and Pajon knew was in violation of federal criminal laws.
From approximately October 2009 through approximately June 2012, Flores Home Health was paid approximately $8 million by Medicare for fraudulent claims for home health services that were not medically necessary and/or not provided.
The case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida. This case was prosecuted by Trial Attorney A. Brendan Stewart of the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,700 defendants who have collectively billed the Medicare program for more than $5.5 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Hartford Man Sentenced to More Than 20 Years in Prison for Producing and Distributing Child PornographyRead the Press Release
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Deirdre M. Daly, Acting United States Attorney for the District of Connecticut, announced that ELIEZER MALDONADO, 26, of Hartford, was sentenced today by U.S. District Judge Stefan R. Underhill in Bridgeport to 244 months of imprisonment, followed by 15 years of supervised release, for producing and distributing child pornography.
According to court documents and statements made in court, on June 8, 2012, Homeland Security Investigations and Hartford Police conducting a child exploitation investigation executed a state search warrant at MALDONADO’s residence. On that date, MALDONADO admitted that on multiple occasions he had engaged in sexual acts with a minor victim who was under the age of 12, had used a smartphone to take several photographs of the minor victim engaged in sexually explicit poses, and then posted the images to an online file-sharing service. He also admitted that he had traded additional images of child pornography with others via email and online storage accounts.
Subsequent forensic examination of MALDONADO’s smartphone revealed eight images of the minor victim engaged in sexually explicit conduct. Examination of MALDONADO’s email and online storage accounts also revealed approximately 5,500 images and 267 videos of child pornography. The vast majority of these images and videos depicted prepubescent children under the age of 12.
MALDONADO has been detained since his arrest on June 8, 2012. On July 16, 2013, he pleaded guilty to one count of production of child pornography.
This matter was investigated by Homeland Security Investigations in Hartford, with the assistance of HSI in Philadelphia, the Connecticut State Police and the Hartford Police Department. The case was prosecuted by Assistant U.S. Attorneys Sarala V. Nagala and Anastasia E. King.
This prosecution is part of the U.S. Department of Justice’s Project Safe Childhood Initiative, which is aimed at protecting children from sexual abuse and exploitation. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
To report cases of child exploitation, please visit www.cybertipline.com.
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(203) 821-3722 [email protected]Gallant Pharma Company and Co-Owner Plead Guilty to Sixteen Charges of Prescription Drug FraudRead the Press Release
ALEXANDRIA, Va. – Gallant Pharma International Inc., headquartered in Arlington, Va., pleaded guilty today to two counts of importation fraud, five counts of selling misbranded drugs, and five counts of distributing prescription drugs without a license. Co-founder and co-owner Syed “Farhan” Huda, 38, of Arlington, Va., entered the guilty plea on behalf of Gallant Pharma, and he also pleaded guilty to one count each of importation fraud, selling misbranded drugs, distributing prescription drugs without a license, and wire fraud.
Dana J. Boente, Acting United States Attorney for the Eastern District of Virginia; Antoinette V. Henry, Special Agent in Charge of the Food and Drug Administration’s (FDA) Office of Criminal Investigations; Special Agent in Charge DEA Washington Division, Karl C. Colder; Gary Barksdale, Inspector in Charge of the Washington Division of the U.S. Postal Inspection Service; Acting Special Agent in Charge Scot R. Rittenberg for U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) in Washington, D.C.; and M. Douglas Scott, Arlington County Chief of Police, made the announcement after the pleas were accepted by United States District Judge Claude M. Hilton.
“Gallant Pharma exploited some of our most vulnerable citizens to make a profit, including those suffering from cancer and undergoing intravenous chemotherapy. We will prosecute these cases aggressively,” said Acting United States Attorney Boente. FDA Special Agent in Charge Henry added, “Gallant Pharma purchased drugs on the international black market, with no idea whose hands those drugs passed through or what conditions the drugs were stored or shipped in. FDA will continue to vigorously protect the health and safety of medical patients in the United States.”
In the statements of facts filed with the plea agreements, Huda and Gallant Pharma admitted that the company sold many “cold chain” drugs, which are subject to strict temperature controls to protect drug efficacy, and shipped and received those drugs with ice packs that sometimes melted, not with dry ice used by legitimate drug distributors. Many of the drugs sold by Gallant Pharma, including Botox, were required to contain a “black box” warning, the strongest warning issued by the FDA, which indicates that a drug has a significant risk of serious or life-threatening adverse effects. The versions sold by Gallant Pharma did not meet this or other FDA labeling requirements.
Huda is the eighth member of Gallant Pharma to enter a guilty plea in this prosecution. On October 15, 2013, Gallant Pharma co-founder and co-owner Talib Khan, 42, of Montreal, Canada and Barbados, pleaded guilty to selling misbranded chemotherapy and cosmetic drugs, and conspiracy to commit importation fraud, sell misbranded drugs, distribute prescription drugs without a license, and defraud the FDA. Four Gallant Pharma sales representatives and two office managers also have entered guilty pleas for their participation in this scheme.
Huda faces a maximum penalty of 53 years’ imprisonment when he is sentenced on March 28, 2014. Huda, a Canadian citizen, also faces deportation as a result of his conviction. A jury trial is scheduled for January 6, 2014, for alleged Gallant Pharma administrator (and wife of Huda) Deeba Mallick, 36, of Arlington, Va.; alleged supplier Mirwaiss Aminzada, 44, of Dubai, United Arab Emirates, and Montreal, Canada; and alleged drop-shipper and customer Anoushirvan Sarraf, 47, of Rockville, Md.
This case was investigated by FDA’s Office of Criminal Investigations, the Drug Enforcement Agency’s Group 33 Diversion Task Force, ICE, and the U.S. Postal Inspection Service, with assistance from the Arlington County Police Department. Assistant United States Attorneys Lindsay Kelly, Ryan K. Dickey, Jay V. Prabhu, and Maya Song are prosecuting 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.Four Men Convicted in I-96 Cocaine SeizureRead the Press Release
The two out-of-state defendants sent to prison for 15 and 30 years.
GRAND RAPIDS, MICHIGAN – Four men have been convicted and two of them already sentenced in connection with the seizure of approximately three kilograms of cocaine and crack cocaine on I-96 in Ingham County, Michigan, Patrick A. Miles, U.S. Attorney for the Western District of Michigan announced today. Luis Edwards, the suspected source of the drugs, was sentenced on November 25 to fifteen years and eight months in prison. In August, Israel Mendez, a drug courier, was sentenced to thirty years in prison. The two men who were originally caught with the drugs near Lansing, Gilbert Albarez and Rogelio Ruiz, have now pled guilty and await sentencing.
The drug seizure took place on October 24, 2012, when an Ingham County deputy sheriff stopped a car on I-96 near Lansing, Michigan. Inside the car, the deputy found approximately three kilograms of cocaine and crack cocaine. The occupants of the car, Albarez, age 37, and Ruiz, age 42, both from Lansing, were subsequently indicted in federal court for possession of cocaine and crack cocaine with intent to distribute. Both of them pled guilty to that charge on November 13, 2013.
Investigative efforts by the FBI and the Tri-County Metro Narcotics Unit following the seizure revealed that Albarez and Ruiz had picked up the drugs in Columbus, Ohio, and were transporting them to Lansing when they were stopped. Law enforcement set up a reverse “sting” by arranging to return the drugs to their suspected source. On October 25, 2012, Mendez, from Ft. Wayne, Indiana, came to Lansing to retrieve the drugs and law enforcement promptly arrested him. Mendez was found guilty by a jury in April of possessing with intent to distribute the seized drugs. The Hon. Paul L. Maloney, Chief Judge, sentenced Mendez on August 19 to thirty years in prison based on his extensive criminal history.
Edwards, age 43, the suspected drug supplier, was arrested when he crossed the border from Mexico into the United States near Hidalgo, Texas, on March 22, 2013. He pled guilty to conspiracy to possess with intent to distribute the seized drugs in August, and Chief Judge Maloney sentenced him to 188 months in prison last week. Edwards is also subject to deportation at the conclusion of his sentence.
These convictions were the result of a Drug Task Force investigation in the Lansing, Michigan, area led by the FBI and the Tri-County Metro Narcotics Unit. The case was prosecuted by Assistant U.S. Attorney John Bruha.
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Former Wichita Police Officer Sentenced in Scheme to Pay BribeRead the Press Release
WICHITA, KAN. - A former officer of the Wichita Police Department has been sentenced to a year on federal probation after pleading guilty in a scheme to pay a bribe as part of an unsuccessful effort to keep from losing her job, U.S. Attorney Barry Grissom.
Former officer Joletta Vallejo, 35, Wichita, Kan., pleaded guilty to one count of conspiracy to commit wire fraud. Vallejo was employed by the police department from Jan. 9, 2006, to Aug. 24, 2012. In her plea, she admitted that on Oct. 16, 2011, two citizens approached her to make a report that they were victims of an aggravated robbery, aggravated kidnaping, aggravated battery and attempted first degree murder. Vallejo did not follow the police department’s policies in responding and filing their complaints.
As a result of her failure to follow department policies, Vallejo was investigated by the police department’s Professional Standards Bureau. When she was interviewed she lied to the investigators. When she became aware she was going to be fired, she and co-defendant Patrick Melendrez devised a scheme to attempt to keep her job.
On Aug. 22, 2012, Vallejo created a Google Voice number in the name of Melendrez. They used that number to call and text one of the citizens and offer him money to recant the statements he had made to police about Vallejo’s conduct. The citizen’s response was part of an undercover investigation.
Co-defendant Patrick Melendrez was sentenced to two years on probation. Co-defendant Courtney Foster is awaiting trial
Grissom commended the Wichita Police Department, the FBI and Assistant U.S. Attorney Debra Barnett for their work on the case.
Former Northern Kentucky School Superintendent Admits Embezzling MoneyRead the Press Release
COVINGTON, KY - The former superintendent for the Dayton Independent School District has admitted in federal court to embezzling school funds during his tenure.
William Rye, 65, of Wilder, KY., pleaded guilty today to one count of embezzlement. Rye waived his right to be indicted by a federal grand jury and pleaded guilty to the embezzlement charge brought by U.S. Attorney Kerry B. Harvey.
In the course of his guilty plea, Rye admitted that, between 2004 and 2012, he embezzled approximately $193,149.22 from the Dayton Independent School District, while serving as school superintendent.
This case is eligible for federal prosecution because the Dayton School District annually receives in excess of $10,000 in federal funds.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, and Perrye Turner, Special Agent in Charge, Federal Bureau of Investigation, jointly made the announcement today.
The investigation was conducted by the Federal Bureau of Investigation. Assistant U.S. Attorney Laura K. Voorhees represents the US. Attorney’s Office in this case.
Rye is currently scheduled to appear for sentencing in Covington on April 22 at 11:00 am. Rye faces a maximum prison sentence of 10 years. However, any sentence would be imposed by the Court after consideration of the U.S. Sentencing Guidelines and the federal statutes governing the imposition of sentences.
Former NASA SES Employee Pleads Guilty to Conflict of Interest ViolationRead the Press Release
Orlando, Florida – Acting United States Attorney A. Lee Bentley, III announces that Edward J. Mango, (52, Orlando) today pleaded guilty to an Information charging him with acting in his official capacity while having a financial conflict of interest, a felony. Mango faces a maximum penalty of five years in federal prison. A sentencing date has not yet been set.
According to the plea agreement, Mango was a Senior Executive Service employee, who worked for the National Aeronautics and Space Administration (NASA). In this capacity, he worked as the manager of the commercial crew program (CCP), at the Kennedy Space Center (KSC) in Brevard County.
In December 2012, state authorities arrested C.T., a NASA employee. Mango used a credit card advance to loan money to C.T. so that C.T. could retain legal counsel and pay for other expenses. As a result of additional state charges, C.T. was subjected to the NASA employee disciplinary process. Using official government e-mail, telephones, and other property, Mango intervened on C.T.’s behalf and improperly exerted his influence as an SES employee, in an effort to mitigate C.T.’s punishment. Mango contacted employees in human resources, the KSC center director, KSC human resources director, KSC protective services deputy chief, and other NASA employees in Washington, D.C., urging them to mitigate C.T.’s punishment. As a result of Mango’s improper actions, C.T. was spared discipline that would otherwise be appropriate for his/her acts. NASA employees later said that had they been aware of the financial relationship between Mango and C.T., they would not have entertained Mango’s contact on C.T.’s behalf. When interviewed by NASA Office of the Inspector General agents, Mango admitted to his actions.
This case was investigated by NASA Office of the Inspector General. It is being prosecuted by Assistant United States Attorney Vincent A. Citro.
- Plea Agreement
- Plea Agreement
Former KKK Leader Indicted for Cross Burning; Second KKK Member Indicted for PerjuryRead the Press Release
Montgomery, Alabama - Steven Joshua Dinkle, former Exalted Cyclops of a chapter of the Ku Klux Klan (KKK) in Ozark, Ala., was arrested on Wednesday, Nov. 27, in Mississippi for burning a cross at the entrance to a predominantly African-American neighborhood and for obstructing the investigation into the offense. Pamela Morris, Dinkle’s mother and the former secretary of the KKK chapter, was arrested on Nov. 21, 2013, for committing perjury before the grand jury investigating the cross burning.
Dinkle, 28, was charged in a five-count indictment returned by a federal grand jury in the Middle District of Alabama that was unsealed on Nov. 27. The indictment charges him with one count of conspiracy to violate housing rights, one count of criminal interference with the right to fair housing, one count of using fire to commit a federal felony and two counts of obstruction of justice.
The indictment alleges that on May 8, 2009, Dinkle conspired with another person to burn a cross in an African-American neighborhood to threaten and intimidate residents of that neighborhood and thereby interfere with their federally protected housing rights. Dinkle allegedly constructed a six-foot cross, wrapping jeans and a towel around it. He and his co-conspirator drove the cross to an African-American community near Johntown Road in Ozark where Dinkle poured fuel on the cross, erected it in the ground and set it on fire. The indictment further contends that Dinkle obstructed justice by lying to local investigators in 2009, and federal investigators in 2012. Dinkle claimed he had withdrawn from the KKK months before the cross burning, provided a false alibi and denied knowing a person who was, in fact, his superior in the KKK.
The grand jury returned a separate indictment against Morris, 45, charging her with two counts of perjury. The indictment alleges that Morris made multiple false statements to the grand jury investigating the cross burning when she denied her own involvement in the KKK and knowing that Dinkle was also involved.
If convicted, Dinkle could face a maximum statutory sentence of 10 years in prison and a $250,000 fine on the conspiracy and criminal-interference counts; sentence maximum of 10 years in prison for the use-of-fire; a maximum of 20 years in prison and a $250,000 fine for obstructing justice by making false statements to local investigators; and a maximum of five years in prison and a $250,000 fine for making false statements to the FBI.
If convicted, Morris could face a maximum statutory sentence of five years in prison and a $250,000 fine on each count of perjury.
An indictment is merely an accusation, and the defendants are presumed innocent unless and until proven guilty.
This case is being investigated by the FBI, 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) 223-7617Former Hospital Employee Sentenced in Connection with Widespread Hepatitis C OutbreakRead the Press Release
CONCORD, N.H. – David M. Kwiatkowski, 34, a former employee of Exeter Hospital, was sentenced today to 39 years in prison for his conduct in causing a widespread Hepatitis C outbreak in numerous states, announced United States Attorney John P. Kacavas and Barry R. Grissom, United States Attorney for the District of Kansas.
After working as a health care technician at several medical facilities in Michigan between 2003 and 2007, the defendant became a “traveling” radiologic technician, using various placement agencies to find employment at medical facilities in New York, Pennsylvania, Maryland, Arizona, Kansas, Georgia, and New Hampshire. While employed as a “traveler,” he stole syringes of Fentanyl – a powerful anesthetic to which he did not have authorized access – intended for patients undergoing certain medical procedures. He replaced the stolen syringes with syringes that he had stolen from previous procedures and refilled with saline, after having injected himself with the Fentanyl intended for his patients.
The defendant engaged in this diversion and tampering despite knowing that he was infected with Hepatitis C, a blood-borne virus that can cause serious damage to the liver as well as other complications. Precisely when he contracted the virus remains an open question. However, the defendant learned no later than June of 2010, while employed at Hays Medical Center in Kansas, that he was infected with Hepatitis C. Despite that knowledge, he continued to inject himself using stolen Fentanyl syringes, in the process causing those syringes to become tainted with his infected blood. He refilled those tainted syringes with saline and replaced them for use on unsuspecting patients undergoing subsequent procedures. Consequently, instead of receiving their prescribed dose of Fentanyl with its intended anesthetic effect, those patients actually received saline tainted with the defendant’s strain of the Hepatitis C virus.
As a “traveler,” the defendant worked in no fewer than eight different states and he engaged in this diversion and/or tampering in each of them. His criminal conduct only came to light when several unexplained cases of Hepatitis C were detected at Exeter Hospital in New Hampshire in May of 2012. That discovery triggered a massive public health investigation in which authorities in New Hampshire, other states in which the defendant had been employed, and the Centers for Disease Control and Prevention (CDC) sought to identify the scope of the defendant’s criminal conduct. All told, the CDC recommended that more than 12,000 patients seek testing to determine whether the defendant infected them. Testing to date has revealed that 32 patients who were treated at Exeter Hospital, six patients who were treated at Hays Medical Center in Kansas, six patients who were treated at Johns Hopkins Hospital in Maryland, and one patient who was treated at the VA Medical Center in Baltimore, Maryland carry a strain of Hepatitis C that has been genetically linked to the viral strain with which the defendant is infected.
An individual who has a personal relationship with one of the Exeter Hospital victims also has become infected with the same strain of the virus. Additionally, Hepatitis C contracted from the defendant has been identified as a contributing factor in the death of an elderly Kansas patient.
The defendant’s 40-year sentence was imposed on his pleas of guilty to eight counts of obtaining controlled substances by fraud and eight counts of tampering with a consumer product.
Fourteen of those charges were initiated in New Hampshire and two charges were transferred from the District of Kansas. This sentence is believed to be the highest sentence ever received for a crime of this nature.
United States Attorney John P. Kacavas said, “The 40-year sentence imposed today ensures that this serial infector will no longer be in position to harm innocent and vulnerable people, extinguishing once and for all the pernicious threat he posed to public health and safety. This prosecution surely heightened public awareness of the problem of drug diversion in medical settings, and the defendant’s convictions and sentence represent a major step forward in redressing the catastrophic consequences of his selfish and reckless behavior. While no sentence of incarceration can restore his victims to their former state of health, I hope that bringing this defendant to swift and certain justice will give them some peace of mind as they confront the uncertainty of living with the Hepatitis C virus.”
United States Attorney Barry R. Grissom said, “The defendant learned he had Hepatitis C while he was working at Hays Medical Center in Kansas. A patient in Kansas died and a medical examiner found that Hepatitis C contributed to the death. Many patients and their families still are living with the harm inflicted by the defendant’s reckless choices.”
Special Agent in Charge Vincent Lisi, of the Federal Bureau of Investigation, Boston Field Division said ,“This was a heinous crime that touched so many of us in New Hampshire and in several states throughout the country. When you go into a hospital for treatment, you should be able to trust that someone like the defendant will not steal pain medication intended for you and infect you with a deadly disease. We are pleased to see justice served today, and we hope this lengthy sentence will deter others who might be tempted to prey on vulnerable patients. We are grateful to all the Federal, State, and local investigating agencies that took part in this unprecedented investigation and to the leadership of both United States Attorney John Kacavas and Assistant United States Attorney John Farley who worked tirelessly to bring justice to the many victims in this case. Most of all, we are deeply thankful to the numerous victims who selflessly shared their time and extremely personal information with investigators under such difficult circumstances. They are the true heroes in this investigation. Though faced with difficult circumstances themselves, their extraordinary cooperation and information was the backbone for the investigation.”
“Patients put their trust in the safety of this country’s health care system,” said Phillip Coyne, Special Agent in Charge of the U.S. Department of Health and Human Services Office of Inspector General region including New Hampshire. “When the reckless actions of Mr. Kwiatkowski compromised the safety of some patients in federally funded health care programs, we joined with our law enforcement partners to protect people from the defendant.”
In addition to his term of incarceration, the defendant will be placed on supervised release for three years following his release from prison. He also must pay a $1,600.00 special assessment and restitution in the amount of nearly $25,000.00.
This investigation involved the cooperative efforts of federal, state, and local law enforcement agencies, including the Federal Bureau of Investigation, the Office of Inspector General of the U.S. Department of Health and Human Services, the Drug Enforcement Administration, Office of Criminal Investigations of the Food and Drug Administration, the Office of Inspector General of the Department of Veterans Affairs, the New Hampshire Attorney General’s Office, the New Hampshire State Police, and the Exeter, New Hampshire Police Department. Assistance also was provided by the New Hampshire Drug Task Force, the Marlborough, Massachusetts Police Department, the Boxborough, Massachusetts Police Department, and the United States Attorney’s Offices in the District of Massachusetts, the District of Kansas, the District of Maryland, and the Middle District of Georgia. The case was prosecuted by Assistant U.S. Attorney John J. Farley. The Kansas aspects of the case were handled by Assistant U.S. Attorney Tanya Treadway.
Former Hays Waste Water Manager Sentenced for Violating Clean Water ActRead the Press Release
WICHITA, KAN. – A former waste water treatment superintendent for the City of Hays pleaded guilty and was sentenced Monday for violating the federal Clean Water Act, U.S. Attorney Barry Grissom said today.
Charles L. Blair, 58, Hays, Kan.,was sentenced to a year on federal probation and a $2,500 fine. Blair pleaded guilty to one misdemeanor count of negligent discharge of a pollutant. In his plea, he admitted that in February 2012 he negligently allowed for the discharge of effluent from the waste water treatment plant in Hays that contained an ammonia nitrogen level of 46.2 milligrams per liter. This level of ammonia nitrogen is in excess of both state and federal regulations.
Grissom commended the Environmental Protection Agency and Assistant U.S. Attorney Matt Treaster for their work on the case.
Former Governor of State of Tamaulipas, Mexico, Indicted in the Southern District of TexasRead the Press Release
BROWNSVILLE, Texas – A federal indictment charging Tomas Yarrington Ruvalcaba, the former governor of the State of Tamaulipas, Mexico, has been unsealed.
The unsealing was announced by United States Attorneys Kenneth Magidson and Robert L. Pitman, of the Southern and Western Districts of Texas, respectively, along with Janice Ayala, special agent in charge, Homeland Security Investigations (HSI); Javier Peña, special agent in charge, Drug Enforcement Administration (DEA); Bernard Butler, acting special agent in charge, Internal Revenue Service - Criminal Investigation (IRS-CI); and Armando Fernandez, special agent in charge, FBI.
Following an investigation that spanned several years, the sealed indictment was returned in May 2013 by a federal grand jury sitting in Brownsville. The indictment charges Yarrington, 56, and Fernando Alejandro Cano Martinez, 57, the owner of a Mexican construction firm, with conspiring to violate the provisions of the Racketeer Influenced and Corrupt Organization (RICO) statute. The two men are also charged with conspiracy to launder money, conspiracy to defraud and conspiracy to make false statements to federally insured U.S. banks.
Yarrington is also separately charged with a conspiracy to violate the provisions of the Controlled Substances Act, two substantive bank fraud charges and a conspiracy to structure currency transactions at a domestic financial institution, while Cano is separately charged with three counts of bank fraud.
Yarrington served as governor of Tamaulipas from 1999 to 2004. Tamaulipas lies along the southern border between the United States and Mexico directly across from Brownsville and Laredo.
According to the indictment, beginning in approximately 1998, Yarrington received large bribes from major drug traffickers operating in the Mexican state of Tamaulipas, including the Gulf Cartel. In return, Yarrington allegedly allowed them to operate their large scale, multi-ton enterprises freely, which included the smuggling of large quantities of drugs to the United States for distribution. From 2007 to 2009, Yarrington allegedly became involved in the smuggling of large amounts of cocaine through the Port of Veracruz into the United States.
Yarrington also allegedly collected bribes from commercial operations in Mexico, according to the indictment. Cano operated Materiales y Construcciones Villa de Aguayo, S.A. de C.V., a construction firm in Tamaulipas that received significant public works contracts during Yarrington’s term as governor. The indictment alleges Cano, in turn, paid bribes to Yarrington to include the acquisition of real estate in front names for him.
The indictment further alleges Yarrington also received control over stolen public funds in the latter part of 2004. Portions of those funds were allegedly used to buy a Sabreliner 60 airplane in January 2005. As part of that purchase, $300,000 was transferred to a bank account in the United States. Another portion of the allegedly stolen funds, $5 million Mexican pesos, was transferred to Cano in the spring of 2005, according to the indictment.
The indictment further alleges that starting in approximately 1998, Yarrington, and later to include Cano, became involved in the acquisition of valuable assets in the United States, using front names and business entities established starting in 2005 to disguise the true ownership of the assets. The assets allegedly included bank accounts, residences, airplanes, vehicles and real estate in Bexar, Cameron, Hidalgo and Hays Counties, many of which were acquired via allegedly fraudulent loans from banks in Texas. According to the indictment, bank accounts established in front names at Texas banks were used to receive and disburse money to carry the ongoing costs of the assets, such as loan costs and condo fees.
The indictment identifies numerous specific front entities involved in the scheme, each of which allegedly applied for multi-million dollar fraudulent loans at Texas banks, which Cano allegedly personally guaranteed. The indictment details a total of more than $7 million in transfers into the U.S. accounts of the front entities.
Additional entities were created and used to apply for other loans to fund the purchase of still other assets, according to the indictment. Numerous currency transactions were allegedly conducted at First National Bank, headquartered in Edinburg, Texas, in a structured manner in amounts at or below $10,000 in order to evade the filing of Currency Transaction Reports by the bank.
Neither Yarrington nor Cano is in the custody of the United States and warrants remain outstanding for their arrests. Anyone with information about their whereabouts is asked to contact Homeland Security Investigations at 956-542-5811. Persons calling from Mexico should call 001-800-010-5237.
The RICO and money laundering charges each carry sentences of up to 20 years in prison, while conspiracy to commit bank fraud carries as possible punishment up to 30 years. The drug conspiracy charges carry a term of imprisonment of at least 10 years. The currency structuring charges carry a possible five-year-term of imprisonment.
The indictment also includes a notice of forfeiture. Some of the assets identified in the indictment already have been seized by the United States in civil forfeiture actions over the course of the investigation, to include approximately 46 acres in Bexar County, a condo on South Padre Island, a 2005 Pilatus airplane and residences in Hidalgo and Hays counties.
The investigation leading to the indictment has been conducted by the Organized Crime Drug Enforcement Task Force in Brownsville, San Antonio, Houston, Corpus Christi and New York and has included agents and officers with HSI, DEA, IRS-CI, FBI and the Texas Attorney General’s Office. The United States government also acknowledges with gratitude the significant assistance received from the government of Mexico in the course of this investigation, including through sharing evidence and expertise.
The case is being prosecuted by Assistant United States Attorneys Charles Lewis, Julie K. Hampton and Jody Young.
Former Employee of Two Government Contractors Pleads Guilty to Role in Procurement Fraud Scheme Involving over $33 Million in Federal ContractsRead the Press Release
ALEXANDRIA, Va. – Anthony R. Bilby, 40, of Leesburg, Va., pleaded guilty today to conspiracy to commit wire fraud and major government fraud.
Dana J. Boente, Acting United States Attorney for the Eastern District of Virginia; Charles K. Edwards, Deputy Inspector General for the Department of Homeland Security (DHS); Brian D. Miller, General Services Administration (GSA) Inspector General; Peggy E. Gustafson, Small Business Administration (SBA) Inspector General; and Kim Lampkins, Special Agent in Charge, Department of Veterans Affairs (VA), Office of Inspector General, made the announcement after the plea was accepted by United States District Judge Anthony J. Trenga.
Bilby faces a maximum penalty of five years in prison when he is sentenced on February 21, 2014. He has agreed to forfeit $1,065,103.90, representing his personal proceeds from the conspiracy.
In a statement of facts filed with the plea agreement, Bilby admitted that from April 2007 through November 2012, while he was employed by two service-disabled veteran-owned small businesses, he participated in a conspiracy to obtain government contracts through fraud and misrepresentation. During this time period, Bilby caused employees at a nominal competitor to submit inflated bids on the same procurements for which Bilby submitted bids on behalf of his employers. Bilby also gained improper access to the procurement process through co-conspirators working within the government. These co-conspirators provided Bilby and others with internal government cost estimates, so that Bilby knew how much the government was willing to pay before he drafted his and his competitor’s bids. Bilby also drafted portions of internal procurement documents in a manner that increased his odds of winning contracts without facing actual competition.
One of Bilby’s employers, with Bilby’s knowledge and assent, agreed to pay ten percent of its profits on a contract worth more than $24 million to co-conspirators within the government. These co-conspirators, in turn, provided Bilby and his employer with improper access to documents and a competitive advantage in obtaining the contract. In total, the conduct of Bilby and others resulted in the award of more than $33 million in federal contracts through fraudulent procurement practices.
As part of his plea agreement, Bilby has agreed to cooperate in the investigation of others involved in the conspiracy. Another co-conspirator, Thomas S. Flynn, pleaded guilty on October 2, 2013.
This case was investigated by the Offices of the Inspector General for DHS, GSA, SBA, and the VA, with assistance from DHS’s Office of the Chief Security Officer, Cyber Forensic Branch. Assistant United States Attorney Kosta S. Stojilkovic is prosecuting 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.Former Employee of Exeter Hospital Sentenced in Connection with Widespread Hepatitis C OutbreakRead the Press Release
CONCORD, N.H. – David M. Kwiatkowski, 34, a former employee of Exeter Hospital, was sentenced today to 39 years in prison for his conduct in causing a widespread Hepatitis C outbreak in numerous states, announced United States Attorney John P. Kacavas and Barry R. Grissom, United States Attorney for the District of Kansas.
After working as a health care technician at several medical facilities in Michigan between 2003 and 2007, the defendant became a “traveling” radiologic technician, using various placement agencies to find employment at medical facilities in New York, Pennsylvania, Maryland, Arizona, Kansas, Georgia, and New Hampshire. While employed as a “traveler,” he stole syringes of Fentanyl – a powerful anesthetic to which he did not have authorized access – intended for patients undergoing certain medical procedures. He replaced the stolen syringes with syringes that he had stolen from previous procedures and refilled with saline, after having injected himself with the Fentanyl intended for his patients.
The defendant engaged in this diversion and tampering despite knowing that he was infected with Hepatitis C, a blood-borne virus that can cause serious damage to the liver as well as other complications. Precisely when he contracted the virus remains an open question. However, the defendant learned no later than June of 2010, while employed at Hays Medical Center in Kansas, that he was infected with Hepatitis C. Despite that knowledge, he continued to inject himself using stolen Fentanyl syringes, in the process causing those syringes to become tainted with his infected blood. He refilled those tainted syringes with saline and replaced them for use on unsuspecting patients undergoing subsequent procedures. Consequently, instead of receiving their prescribed dose of Fentanyl with its intended anesthetic effect, those patients actually received saline tainted with the defendant’s strain of the Hepatitis C virus.
As a “traveler,” the defendant worked in no fewer than eight different states and he engaged in this diversion and/or tampering in each of them. His criminal conduct only came to light when several unexplained cases of Hepatitis C were detected at Exeter Hospital in New Hampshire in May of 2012. That discovery triggered a massive public health investigation in which authorities in New Hampshire, other states in which the defendant had been employed, and the Centers for Disease Control and Prevention (CDC) sought to identify the scope of the defendant’s criminal conduct. All told, the CDC recommended that more than 12,000 patients seek testing to determine whether the defendant infected them. Testing to date has revealed that 32 patients who were treated at Exeter Hospital, six patients who were treated at Hays Medical Center in Kansas, six patients who were treated at Johns Hopkins Hospital in Maryland, and one patient who was treated at the VA Medical Center in Baltimore, Maryland carry a strain of Hepatitis C that has been genetically linked to the viral strain with which the defendant is infected.
An individual who has a personal relationship with one of the Exeter Hospital victims also has become infected with the same strain of the virus. Additionally, Hepatitis C contracted from the defendant has been identified as a contributing factor in the death of an elderly Kansas patient.
The defendant’s 40-year sentence was imposed on his pleas of guilty to eight counts of obtaining controlled substances by fraud and eight counts of tampering with a consumer product. Fourteen of those charges were initiated in New Hampshire and two charges were transferred from the District of Kansas. This sentence is believed to be the highest sentence ever received for a crime of this nature.
United States Attorney John P. Kacavas said, “The 40-year sentence imposed today ensures that this serial infector will no longer be in position to harm innocent and vulnerable people, extinguishing once and for all the pernicious threat he posed to public health and safety. This prosecution surely heightened public awareness of the problem of drug diversion in medical settings, and the defendant’s convictions and sentence represent a major step forward in redressing the catastrophic consequences of his selfish and reckless behavior. While no sentence of incarceration can restore his victims to their former state of health, I hope that bringing this defendant to swift and certain justice will give them some peace of mind as they confront the uncertainty of living with the Hepatitis C virus.”
United States Attorney Barry R. Grissom said, “The defendant learned he had Hepatitis C while he was working at Hays Medical Center in Kansas. A patient in Kansas died and a medical examiner found that Hepatitis C contributed to the death. Many patients and their families still are living with the harm inflicted by the defendant’s reckless choices.”
Special Agent in Charge Vincent Lisi, of the Federal Bureau of Investigation, Boston Field Division said ,“This was a heinous crime that touched so many of us in New Hampshire and in several states throughout the country. When you go into a hospital for treatment, you should be able to trust that someone like DAVID KWIATKOWSKI will not steal pain medication intended for you and infect you with a deadly disease. We are pleased to see justice served today, and we hope this lengthy sentence will deter others who might be tempted to prey on vulnerable patients. We are grateful to all the Federal, State, and local investigating agencies that took part in this unprecedented investigation and to the leadership of both United States Attorney John Kacavas and Assistant United States Attorney John Farley who worked tirelessly to bring justice to the many victims in this case. Most of all, we are deeply thankful to the numerous victims who selflessly shared their time and extremely personal information with investigators under such difficult circumstances. They are the true heroes in this investigation. Though faced with difficult circumstances themselves, their extraordinary cooperation and information was the backbone for the investigation.”
“Patients put their trust in the safety of this country’s health care system,” said Phillip Coyne, Special Agent in Charge of the U.S. Department of Health and Human Services Office of Inspector General region including New Hampshire. “When the reckless actions of Mr. Kwiatkowski compromised the safety of some patients in federally funded health care programs, we joined with our law enforcement partners to protect people from the defendant.”
In addition to his term of incarceration, the defendant will be placed on supervised release for three years following his release from prison. He also must pay a $1,600.00 special assessment and restitution in the amount of nearly $25,000.00.
This investigation involved the cooperative efforts of federal, state, and local law enforcement agencies, including the Federal Bureau of Investigation, the Office of Inspector General of the U.S. Department of Health and Human Services, the Drug Enforcement Administration, Office of Criminal Investigations of the Food and Drug Administration, the Office of Inspector General of the Department of Veterans Affairs, the New Hampshire Attorney General’s Office, the New Hampshire State Police, and the Exeter, New Hampshire Police Department. Assistance also was provided by the New Hampshire Drug Task Force, the Marlborough, Massachusetts Police Department, the Boxborough, Massachusetts Police Department, and the United States Attorney’s Offices in the District of Massachusetts, the District of Kansas, the District of Maryland, and the Middle District of Georgia. The case was prosecuted by Assistant U.S. Attorney John J. Farley. The Kansas aspects of the case were handled by Assistant U.S. Attorney Tanya Treadway.
Five Dallas Men Sentenced for Various Roles in Hydroponic Marijuana Growing OperationRead the Press Release
DALLAS — Today, Louis Michael Olerio, Jr., 36, of Dallas, was sentenced to 24 months in federal prison, following his guilty plea in October 2012 to conspiracy to commit money laundering, stemming from his role in a hydroponic marijuana growing operation. Five other defendants charged in the case also pleaded guilty to various felony offenses and received sentences of 18 months to 36 months, as noted below. Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
The other five defendants convicted and their sentences are:
Brian Edward Deloney, 37, 18 months
Jeremy Cash McElroy, 37, 36 months
Eric Irving Love, 35, 30 months
Jeffrey Scott Gannon, 34, 27 months
Stephen Ray Willeford, Jr., 39, 24 months
McElroy also pleaded guilty to conspiracy to commit money laundering. Love and Gannon pleaded guilty to conspiracy to maintain drug involved premises and Deloney pleaded guilty to maintaining a drug involved premise.
According to documents filed in the case, McElroy, Olerio, Gannon, and Love were fraternity brothers at Southern Methodist University (SMU) in the past. Between 2004 and June 2010, the defendants conspired to maintain 11 houses, in Dallas and Richardson, Texas, to cultivate and distribute highly potent hydroponic marijuana. Almost all of the marijuana grown at these houses by the defendants was ultimately delivered to Deloney for distribution.
After having grown marijuana with Olerio at one of the houses for numerous cycles, McElroy decided to distance himself from the day-to-day operations of the conspiracy and agreed to sell two of the marijuana grow houses to Olerio, while retaining a percentage of the proceeds in the sale of marijuana grown in those houses. To that end, McElroy transferred the deed for one of the houses to Olerio and sold another one of the grow houses to Olerio, leaving the marijuana grow equipment in both houses so that Olerio could continue to growing operation in them. Olerio agreed to continue the operation in these houses and pay McElroy twenty percent of the profits from the sale of the marijuana. McElroy and Olerio conducted financial transactions with the intent to conceal any ownership McElroy had in the profits from the marijuana sales.
The case was investigated by the Internal Revenue Service - Criminal Investigations and the Drug Enforcement Administration. Deputy Criminal Chief Assistant U.S. Attorney Jay Dewald was in charge of the prosecution.
Ex-Social Security Employee Sentenced to Prison for ExtortionRead the Press Release
ATLANTA - Cordell Fleming, a former Claims Representative with the Social Security Administration, has been sentenced to one year and one day in prison for extortion.
“Mr. Fleming abused his position of public trust with the Social Security Administration when he extorted money from the disabled, aged, and indigent, in return for expediting their claims” said United States Attorney Sally Quillian Yates. “The defendant earned every day of this prison sentence.”
“While employee fraud is rare in SSA’s dedicated work force, the Office of the Inspector General has no higher priority than the investigation and prosecution of the rare individual who violates the public trust. I’m pleased to see this case brought to a successful conclusion and grateful that the U.S. Attorney’s Office shares our determination to ensure the integrity of SSA’s programs,” said Thomas Caul, Special Agent in Charge, Office of the Inspector General for the Social Security Administration.
According to United States Attorney Yates, the charges and other information presented in court: Fleming worked as a Claims Representative for the Social Security Administration in Morrow, Ga. As part of his duties, Fleming processed requests for Supplemental Security Income (SSI) payments for eligible individuals. SSI is a Federal income supplement program designed to help aged, blind, and disabled people, who have little or no income, by providing cash to meet basic needs for food, clothing, and shelter. As part of his scheme, Fleming offered to “expedite” the processing time of SSI payments to recipients in exchange for a fee. In an attempt to make the expedited SSI payments appear legitimate, Fleming frequently created false documents that purportedly justified the expedited disbursement of the payments. From October 2012 to April 2013, Fleming extorted and attempted to extort money (in amounts ranging from approximately $500 to $1,800) from at least nine SSI recipients or their representatives.
On August 27, 2013, Fleming, 47, of Conyers, Ga., pleaded guilty to Extortion under the Color of Official Right. Today, United States District Judge Timothy C. Batten, Sr. sentenced Fleming to one year and one day in prison to be followed by three years of supervised release, and full restitution. He was also ordered to perform 120 hours of community service.
This case was investigated by Special Agents of the Social Security Administration - Office of the Inspector General.
Special Assistant United States Attorney Diane C. Schulman and Assistant United States Attorney Jeffrey W. Davis prosecuted the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia is www.justice.gov/usao/gan.
District Man Found Guilty of Manslaughter in Stabbing Death of Fellow Marine-Attack Took Place in April 2012 in Southwest Washington-Read the Press Release
WASHINGTON – Michael Poth, 22, of Washington, D.C., was found guilty by a jury today of manslaughter while armed in the fatal stabbing of a fellow U.S. Marine Corps enlistee, U.S. Attorney Ronald C. Machen Jr. announced.
Poth was found guilty following a trial in the Superior Court of the District of Columbia. The Honorable Russell F. Canan scheduled sentencing for Feb. 7, 2014. The charge carries a statutory maximum of 60 years in prison.
According to the government’s evidence, Poth and the victim, Philip Bushong, 24, were active duty U.S. Marine Corps enlistees. At the time of the incident, the defendant was a private first class and was assigned to the Marine Barracks Washington, while the victim, a lance corporal, was a few days away from receiving an honorable discharge and was in the District of Columbia visiting friends. The men did not know one another. In the early morning hours of April 21, 2012, both were in the area near the 700 block of Eighth Street SE, near the Marine Barracks. Multiple bars and restaurants are in the area.
Poth walked by Lance Cpl. Bushong, who was with a group of friends. Shortly after he passed by the group, Lance Cpl. Bushong yelled something at the defendant. Poth took offense, took out a small pocket knife from his pocket, and waved it in the air toward Lance Cpl. Bushong and his group of friends. Poth also muttered out loud that he was going to “cut someone’s (expletive) lungs out.”
About 10 minutes later, Poth, after circling the block, aggressively walked toward Lance Cpl. Bushong, who was still in the area talking to a friend. Poth walked up to Lance Cpl. Bushong, uttered an anti-gay slur, and then kept walking. Lance Cpl. Bushong proceeded to follow Poth, and the two began to argue. As Lance Cpl. Bushong drew back his fist to punch Poth, Poth stated, “I’m going to stab you.” He then drew his knife and stabbed Lance Cpl. Bushong once in chest. Lance Cpl. Bushong died about two hours later.
“Today a District of Columbia jury held Michael Poth accountable for stabbing a fellow Marine to death on a public street near their barracks,” said U.S. Attorney Machen. “Their guilty verdict makes clear that our community will not tolerate the deadly violence that so often arises from petty disputes. We hope that this decision brings some measure of comfort to the family and friends of the young Marine killed that night.”
In announcing the verdict, U.S. Attorney Machen commended the work of those who investigated the case from the Metropolitan Police Department and the Naval Criminal Investigative Service, and thanked the U.S. Marine Corps for their cooperation. He also expressed appreciation for the work of the District of Columbia Department of Forensic Sciences and the District of Columbia Office of the Chief Medical Examiner. In addition, he acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialists Sandra Lane and Alesha Matthews; Victim/Witness Advocate Tamara Ince; David Foster, Katina Adams-Washington, and La June Thames, all of the Victim Witness Assistance Unit, and Litigation Technology Specialists Will Henderson and Paul Howell. Finally, he praised Assistant U.S. Attorney Michael Liebman, who prosecuted the case.
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