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22 November 2013
Former Wichita Area Physician ConvictedOn Federal Firearm and Drug ChargesRead the Press Release
WICHITA, KAN. – A former Wichita area physician who was serving time on supervised release for a drug conviction has been convicted on federal firearm and drug charges, U.S. Attorney Barry Grissom said today.
A jury found Lawrence M. Simons, 57, Wichita, Kan., guilty on one count of unlawful possession of a firearm after a felony conviction and one count of unlawful possession of controlled substances.
During trial, prosecutors presented evidence that in 2009 Simons, a former employee of the Schneider Medical Clinic in Haysville, Kan., pleaded guilty to two counts of unlawfully distributing controlled substances. In January 2010, Simons was sentenced to 24 months in federal prison to be followed by three years on supervised release.
In April 2013 an agent of the Bureau of Alcohol, Tobacco, Firearms and Explosives learned that Simons had given a pistol to Steven Woodin, proprietor of S&F Bail Bonds in Wichita. Simons owed Woodin for bonding him out of jail on a $25,000 bond in a Sedgwick County District Court case involving a charge of making a criminal threat.
Prosecutors also presented evidence that on Aug. 7, 2008, Simons signed a Drug Enforcement Administration form surrendering his controlled substances privileges. On Aug. 21, 2009, Simons leased three storage units at the West Kellogg Stor-All where he stored personal property. Controlled substances later were found in the storage units including Fentanyl, Actiq, Lortab Elixer, Ketamine, Versed, Midazolam, Brevital Sodium, Diazepam, Stadol and Niravan.
Sentencing is set for Feb. 10, 2014. He faces a maximum penalty of 10 years in federal prison and a fine up to $250,000 on each firearm count, and a maximum penalty of two years and a fine of not less than $2,500 on the drug count. The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated. Assistant U.S. Attorney Alan Metzger is prosecuting.
Former Real Estate Developer and his Long-Time Girlfriend Sentenced to Prison for Tax Evasion SchemeRead the Press Release
A former western Washington real estate developer and his long-time girlfriend were sentenced today in U.S. District Court in Seattle for 25 counts of tax evasion and false statements related to their scheme to avoid paying taxes on more than $23 million in income, announced U.S. Attorney Jenny A. Durkan. WINSTON BONTRAGER, 64, was sentenced to 11 years in prison and three years of supervised release. His long-time girlfriend, PAULINE ANDERSON, 65, was sentenced to 39 months in prison. As an Australian citizen, she likely will be deported following her prison term. Both will share a restitution obligation of $2,717,510. The couple was indicted in March 2012, and both have been in federal custody since June 2012. They were convicted following a four week jury trial in July 2013. At sentencing U.S. District Judge Richard A. Jones said to BONTRAGER, “You were a one man wrecking ball in the lives of many people... You believed you had immunity from restitution and tax obligations... You lived the lifestyle of the rich and famous while lying and cheating to avoid tax obligations.”
“This is Mr. Bontrager’s third conviction and sentencing hearing before a federal judge in Western Washington,” said U.S. Attorney Jenny A. Durkan. “Despite having more than enough money to pay his taxes and his debt to society, this defendant brazenly thumbed his nose at every governmental agency and institution that he came into contact with, by lying, cheating and deceiving them, for one sole purpose: greed.”
BONTRAGER was previously convicted in 1983 for bank fraud and in 1994 for defrauding the Oregon Public Employees Retirement System and the IRS of over $687,000. In 1994 he was sentenced to 40 months in prison. BONTRAGER made numerous false statements surrounding his failure to pay more than $687,000 in restitution from his prior conviction. During the trial prosecutors detailed how BONTRAGER and ANDERSON filed false tax returns from 2004-2009, failing to report more than $23 million in income and failing to pay more than $2.7 million in taxes. Over $10 million was moved into foreign bank accounts in PAULINE ANDERSON’s name, and virtually all of the couples’ assets were put in ANDERSON’s name in order to hide it from the IRS and those seeking to enforce BONTRAGER’s restitution obligation and collect delinquent taxes. At the same time that the couple paid little in income taxes, they purchased a luxury condominium in Bellevue and spent approximately $500,000 on an extensive remodel. They owned a $325,000 wine collection, a $1.2 million home in Southern California, a 6.7 carat diamond ring, a Bentley worth $186,000, and they spent over $3.4 million in credit card purchases, including travel, cosmetic surgery, cosmetic dentistry, restaurants, and clothing and shoes.
At trial prosecutors described various development deals in Vancouver, Washington where BONTRAGER made millions of dollars, in some instances defrauding business partners as well as the IRS.“Mr. Bontrager refused to pay court-ordered restitution to his victims from a previous fraud conviction. Mr. Bontrager clearly failed to learn his lesson and continued to commit fraud. In his latest scheme, he defrauded his new business partners and the American taxpayers. He also enlisted the help of Ms. Anderson to conceal his fraud and ill-gotten gains,” said Kenneth Hines, Special Agent in Charge of IRS Criminal Investigation in Seattle. “Today's sentences show that greed is a powerful emotion that cloud judgment and motivate people to abuse the trust of others.”
BONTRAGER was convicted of nine tax counts and eight counts of making false statements. ANDERSON was convicted of 11 tax counts.
The case was investigated by the Internal Revenue Service Criminal Investigation. The case was prosecuted by Assistant United States Attorney Carl Blackstone.Former Massachusetts Attorney Convicted of Mortgage FraudRead the Press Release
BOSTON - A Pennsylvania man, formerly an attorney practicing in Boston, was convicted of mortgage fraud.
Charles R. Sammon, 37, of West Pittston, Penn., pleaded guilty before U.S. District Judge Richard G. Stearns to 13 counts of wire fraud, mail fraud and money laundering, all in connection with the mortgage fraud scheme that occurred in 2006 and 2007.
Sammon participated in at least 13 fraudulent real estate transactions involving triple-decker apartment buildings in various sections of Boston, including Dorchester, Roxbury and Jamaica Plain. For eight of those transactions, Sammon served as the real estate closing attorney representing the mortgage lender. For the other five, Sammon participated as the seller of real property himself. The basic scheme involved recruiting people to buy properties by promising to pay them as much as $40,000 per transaction, which payments were not disclosed to the lenders. Many of the buyers were also promised that the seller would pay the mortgage for upwards of a year. Also central to the scheme was representing to the lenders that each borrower intended to occupy the property as his or her primary residence, when that was not the case, as Sammon knew.Many of the payments to buyers were made directly from Sammon’s law firm bank account on transactions for which he was the closing attorney, but Sammon failed to disclose those payments to the mortgage lenders that he represented. Sammon also received some of the loan proceeds in addition to his legal fees, which was not disclosed to the lender. In one transaction, he received more than $50,000.
Each of the loans for these 13 transactions went into default, and all the properties were sold at foreclosure or through a short sale, resulting in combined losses to the lenders of more than $2.5 million.
Sentencing is scheduled for Feb. 19, 2014. Sammon faces a maximum sentence of 20 years in prison, to be followed by three years of supervised release and a $250,000 fine on each of the mail and wire fraud charges, and 10 years in prison, three years of supervised release and a $250,000 fine on the money laundering charge.
United States Attorney Carmen M. Ortiz; John Collins, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston; Kevin Niland, Inspector in Charge of the United States Postal Inspection Service; Steven Ricciardi, Special Agent in Charge of the United States Secret Service; and Fred W. Gibson, Jr., Acting Inspector General of the Federal Deposit Insurance Corporation, made the announcement today.
The case is being prosecuted by Assistant U.S. Attorney Mark J. Balthazard of Ortiz’s Economic Crimes Unit and DOJ Trial Attorney Alexander H. Berlin.
Former Law Enforcement Officer Sentenced to 40 YearsRead the Press Release
Hammond, Indiana - United State Attorney David Capp announced that former police officer John Smith, 56, of Indianapolis, Indiana, was sentenced today to 40 years imprisonment for using police credentials and firearms to protect drug shipments.
In June, 2013, Smith was found guilty at trial of the felony offenses of conspiracy to possess with intent to distribute and distribute 5 kilograms or more of cocaine, two counts of attempting to possess with intent to distribute 5 kilograms or more of cocaine, two counts of possessing firearms in furtherance of a federal drug trafficking crime, and transferring firearms knowing that they would be used in a drug trafficking crime.
Smith had previously served as a police officer with three different Indiana departments:Brooklyn, Knightstown, and Stinesville.The conduct for which Smith was convicted occurred after he had left those departments.Smith, however, continued to illegally utilize his formerly issued police credentials in these drug transactions.
Terry Carlyle, a former Marshal with the Brooklyn, Indiana Police Department and police officer with the Indianapolis Police Department, was a co-conspirator with Smith.Carlyle, who cooperated with the government, was sentenced in September, 2013 to 10 years of imprisonment.
USA Capp stated, “We will continue to investigate public corruption, including police corruption, and will vigorously prosecute and, upon conviction, seek substantial sentences for officers, current or former, who abuse the public trust.”
These charges were filed as the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms, and Explosives Indianapolis Field Office, the Indianapolis Metropolitan Police Department, the Indiana State Police, with the assistance of the ATF Chicago Field Office, the ATF Merrillville Field Office, the ATF HIDTA Task Force, the Gary Police Department, the Hammond Police Department, the East Chicago Police Department, and the Lake County Police Department.This case was prosecuted by Assistant United States Attorneys David Nozick and Gary Bell.
Former High School Football Player Pleads Guilty to Making Racially Motivated Threats to African-American Assistant Football CoachRead the Press Release
Jonathan Caine, 20, of Nashville, Tenn., pleaded guilty today to a federal hate crime for making racially motivated threats to an African-American assistant football coach at a local high school, the Justice Department announced.
Caine, formerly a student and football player at the high school where the victim works as a coach, pleaded guilty to threatening the victim with violence because of the victim’s race and employment before U.S. Magistrate Judge John Bryant in federal court in Nashville, Tenn.
According to the information presented in court, Caine made repeated anonymous threats to the assistant coach, and others in the high school administration, which included racial slurs and references to violent acts. In court, Caine admitted that on Aug. 10, 2012, he left an anonymous threatening voice mail on the assistant coach’s cellular phone, saying, “And thus sayeth the Lord all [epithet] shall be killed. Amen, amen I say to you [unintelligible] as the Lord Christ says if a [epithet] shall be born unto thee, the [epithet] shall be killed.” Caine admitted that he targeted the coach because of the coach’s race. Prior to law enforcement identifying Caine as the caller, the team took security measures to protect the coach.
“The Department of Justice will not hesitate to prosecute such acts of hate-motivated intimidation,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division. “Hate crimes have no place in our society; not only did this former student and player threaten his coach’s safety, he violated the victim’s civil rights by using racist, discriminatory language. The Civil Rights Division will remain vigilant in our efforts to bring these individuals to justice.”
“When individuals choose to act out their hatred by making threats based on a person’s race, they can expect to face prosecution by the U.S. Attorney’s Office,” said U.S. Attorney David Rivera for the Middle District of Tennessee. “Every arm of the Justice Department is committed to protecting the civil rights of all individuals and insuring they remain free from acts of violence and intimidation when those acts are based on the color of their skin.”
Sentencing is scheduled for Feb. 24, 2014. Caine faces a statutory maximum penalty of a 12-month sentence in prison and a $100,000 fine.
The case was investigated by the Nashville Division of the FBI and is being prosecuted by Assistant U.S. Attorney Blanche Cook of the Middle District of Tennessee and Trial Attorney Nicholas Murphy of the Civil Rights Division.
Former High School Football Player Pleads Guilty to Making Racially Motivated Threats to African-American Assistant Football CoachRead the Press Release
WASHINGTON – Jonathan Caine, 20, of Nashville, Tenn., pleaded guilty today to a federal hate crime for making racially motivated threats to an African-American assistant football coach at a local high school, the Justice Department announced.
Caine, formerly a student and football player at the high school where the victim works as a coach, pleaded guilty to threatening the victim with violence because of the victim’s race and employment before U.S. Magistrate Judge John Bryant in federal court in Nashville, Tenn.
According to the information presented in court, Caine made repeated anonymous threats to the assistant coach, and others in the high school administration, which included racial slurs and references to violent acts. In court, Caine admitted that on Aug. 10, 2012, he left an anonymous threatening voice mail on the assistant coach’s cellular phone, saying, “And thus sayeth the Lord all [epithet] shall be killed. Amen, amen I say to you [unintelligible] as the Lord Christ says if a [epithet] shall be born unto thee, the [epithet] shall be killed.” Caine admitted that he targeted the coach because of the coach’s race. Prior to law enforcement identifying Caine as the caller, the team took security measures to protect the coach.
“The Department of Justice will not hesitate to prosecute such acts of hate-motivated intimidation,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division. “Hate crimes have no place in our society; not only did this former student and player threaten his coach’s safety, he violated the victim’s civil rights by using racist, discriminatory language. The Civil Rights Division will remain vigilant in our efforts to bring these individuals to justice.”
“When individuals choose to act out their hatred by making threats based on a person’s race, they can expect to face prosecution by the U.S. Attorney’s Office,” said U.S. Attorney David Rivera for the Middle District of Tennessee. “Every arm of the Justice Department is committed to protecting the civil rights of all individuals and insuring they remain free from acts of violence and intimidation when those acts are based on the color of their skin.”
Sentencing is scheduled for Feb. 24, 2014. Caine faces a statutory maximum penalty of a 12-month sentence in prison and a $100,000 fine.
The case was investigated by the Nashville Division of the FBI and is being prosecuted by Assistant U.S. Attorney Blanche Cook of the Middle District of Tennessee and Trial Attorney Nicholas Murphy of the Civil Rights Division.
Former Credit Suisse Managing Director Sentenced in Manhattan Federal Court to 30 Months in Prison in Connection with Scheme to Hide Losses in Mortgage-Backed Securities Trading BookRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that KAREEM SERAGELDIN, the former Managing Director/Global Head of Structured Credit in the Investment Banking Division of Credit Suisse Group (“Credit Suisse”), was sentenced today to 30 months in prison in connection with a scheme to hide more than $100 million in losses in a mortgage-backed securities trading book at Credit Suisse. The bonds at issue in Credit Suisse’s trading book comprised subprime residential mortgage backed securities (“RMBS”) and commercial mortgage backed securities (“CMBS”). Once discovered, SERAGELDIN’s manipulation of these bond prices contributed to Credit Suisse taking a $2.65 billion write-down of its 2007 year-end financial results. In April 2013, SERAGELDIN was extradited from the United Kingdom and pled guilty to conspiring to falsify the books and records of the bank before U.S. District Judge Alvin K. Hellerstein. SERGAGELDIN’s co-conspirators, David Higgs and Salmaan Siddiqui, have also pled guilty and are awaiting sentencing.
Manhattan U.S. Attorney Preet Bharara said: “With today’s sentence Kareem Serageldin will now pay a steep price for the role he played in a conspiracy to cover up more than one hundred million dollars in subprime mortgage-related losses – the loss of his liberty.”
According to the Indictment filed against SERAGELDIN and the Informations to which Higgs and Siddiqui pled guilty, other court documents, and statements made during court proceedings:
SERAGELDIN was employed at Credit Suisse as a Managing Director. He held the position of Global Head of the Structured Credit Group in the Securities Department of Credit Suisse’s Investment Banking Division, and divided his time between the company’s New York and London offices. The Structured Credit Group held and traded ABS (“Asset Backed Security”) cash bonds, which included RMBS and CMBS. SERAGELDIN oversaw and
managed a number of trading books, including a trading book known as “ABN1.” The ABN1 book comprised primarily several thousand individual long and short subprime-related positions, as well as other securities. The long positions consisted of, among other things, various types of cash securities, including AAA-rated and non-AAA-rated cash bonds. Until March 2008, ABN1 had a net asset value of approximately $5.35 billion, approximately $3.71 billion of which consisted of ABS cash bonds, including RMBS and CMBS positions.
Pricing of Mortgage-Backed Securities
Credit Suisse traders were required at all relevant times to price securities they held at their fair value, that is, on a “mark-to-market” basis, which was determined by reference to either the current market price of the asset or liability, or the current price for a similar asset or liability. In the absence of a liquid market, Credit Suisse traders were required to look to other indicia in order to determine the fair value of the assets on their books. During this time, the ABX Index served as a benchmark for certain securities backed by home loans. It was widely understood within Credit Suisse that traders were to consult the corresponding ABX indices when pricing RMBS bonds and related products.
The Bond Pricing Scheme
The deterioration throughout 2007 of the real estate market in the United States, including the subprime housing market, led to significant reductions in valuations of mortgage-backed securities. As mortgage delinquencies increased across the country, the value of the securities backed by these mortgages decreased and the market for them became increasingly illiquid.
By late November 2007, SERAGELDIN was aware that the market for mortgage-backed securities had declined enormously. On November 28, 2007, SERAGELDIN told Higgs, Siddiqui, and a co-conspirator (“CC-1”) that “the housing market [was] going down the tubes” and that they had to “find a way to sell these bonds,” i.e., mortgage-backed bonds in ABN1. As SERAGELDIN recognized, “[t]hose bonds are going to start trading worse than the [ABX] Index.” SERAGELDIN and his co-conspirators did not sell the bonds because the market prices for the bonds were substantially below the inflated value at which they marked the bonds.
From August 2007 through February 2008, SERAGELDIN, Higgs, Siddiqui, and their co-conspirators artificially increased the price of bonds in order to create the false appearance of profitability in the ABN1 trading book. Specifically, SERAGELDIN directed Higgs on numerous occasions to reach specific Profit & Loss (“P&L”) targets on a daily and month-end basis. Higgs, in turn, instructed Siddiqui and another unnamed co-conspirator to mark the books so as to achieve the particular P&L targets specified by SERAGELDIN, rather than to reflect the fair value of the bonds.
Credit Suisse’s ABN1 Trading Book Was Falsely Inflated as a Result of the Scheme
As a result of the scheme, there was a growing disparity between the values ascribed to the marks in the ABN1 book and the available external benchmarks such as the ABX Index. From August 2007 through the end of that year, as ABX Index prices fell, bond prices in ABN1 that were supposed to reflect the ABX Index remained effectively stable, thereby giving the false impression to Credit Suisse senior management that the ABN1 book was profitable. On one occasion in January 2008, SERAGELDIN expressed concern to Higgs that the overpriced bonds were at risk of being discovered: “We should mark these down because someone is going to spot this,” he said.
The February 2008 Mark-Down
On March 20, 2008, Credit Suisse issued a press release that announced completion of its internal review and stated that the fair value reduction, or write-down, of the ABS positions – which included, but was not limited to, the ABNl book – was approximately $2.65 billion. Approximately $540 million of this write-down was attributable to the ABN1 trading book, and included ABS cash bonds for the fourth quarter 2007 that SERAGELDIN manipulated and inflated in connection with his scheme.
In addition to the prison term, Judge Hellerstein sentenced SERAGELDIN, 40, a citizen of the United Kingdom, to two years of supervised release. SERAGELDIN also was ordered to pay forfeiture in the amount of $1 million, a $150,000 fine, and a $100 special assessment.
Mr. Bharara praised the work of the Federal Bureau of Investigation and thanked the Securities and Exchange Commission for its assistance in the investigation of this case.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant United States Attorney Eugene Ingoglia is in charge of the prosecution. This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force, on which Mr. Bharara serves as a Co-Chair of the Securities and Commodities Fraud Working Group. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.stopfraud.gov.
Former Bookkeeper Sentenced to Federal Prison for EmbezzlementRead the Press Release
Rosalie Seabolt stole more than $800,000 from Roane County oil and gas company
CHARLESTON, W.Va. – A former Spencer-based oil and gas company bookkeeper who stole more than $800,000 from her employer was sentenced yesterday to two years in federal prison, announced U.S. Attorney Booth Goodwin. Rosalie J. Seabolt, 60, of Spencer, W.Va., previously pleaded guilty to mail fraud in August. Seabolt was employed at Kimco, Inc. and its affiliate, Roy G. Hildreth and Son, Inc. (“Hildreth”) for more than 25 years. During her employment at Kimco, Seabolt eventually became the company’s bookkeeper.
From approximately September 9, 2000 and continuing through December 24, 2012, Seabolt wrote numerous unauthorized checks to herself from Kimco’s bank account. During the scheme, Seabolt deposited and cashed these checks at her personal credit union. Seabolt hid the unauthorized checks from Kimco by writing false information in the company’s books that indicated the checks were made to Hildreth as a business expense.
“Small businesses are the lifeblood of our state’s economy,” U.S. Attorney Booth Goodwin said. “That's why my office has focused on investigating and prosecuting cases like these, to protect small businesses and to send a clear message that stealing from those business carries serious consequences."
From at least 2000 through 2012, Poca Valley Bank mailed monthly bank statements to Kimco that included check images. Seabolt, who was in charge of reviewing the monthly bank statements, altered the statements by covering up the check images that revealed unauthorized checks she had written to herself. Also during the scheme, Seabolt destroyed portions of original bank statements the company had received from the bank.
On January 10, 2013, Seabolt told law enforcement that she had defrauded Kimco. In total, Seabolt took at least $815,693.27 of monies from the company between 2000 and 2012.
At sentencing, United States District Judge John T. Copenhaver, Jr. ordered Seabolt to pay full restitution in the amount of $815,693.27 to Kimco.
The investigation was conducted by the FBI and the West Virginia State Police. Assistant United States Attorneys Meredith George Thomas and Philip Wright handled the prosecution.
This case was prosecuted as part of the United States Attorney’s Office for the Southern District of West Virginia’s Small Business Protection Initiative. U.S. Attorney Booth Goodwin announced the Small Business Protection Initiative in November 2010. The initiative focuses on the prosecution of individuals who defraud small West Virginia businesses located within the Southern District.
Former Bank Executive Admits Receiving Bribes from Oxford Collection AgencyRead the Press Release
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Deirdre M. Daly, Acting United States Attorney for the District of Connecticut, announced that WILBUR TATE III, 49, of Dacula, Ga., pleaded guilty today before U.S. District Judge Stefan R. Underhill in Bridgeport to receiving bribes while he was an executive at U.S. Bank in Ohio.
According to court documents and statements made in court, Oxford Collection Agency was a private financial services company that engaged in accounts receivables management, primarily debt collecting, with offices in New York, Pennsylvania and Florida. Between 2007 and 2011, Oxford Collection Agency executives engaged in a multi-year scheme to defraud its lender, investors and clients. The investigation also revealed that Oxford Collection Agency was actively involved in bribing bank officials.
TATE, an Assistant Vice President of U.S. Bank in Ohio from January 2004 through February 2011, was in charge of outsourcing collection accounts to collection agencies, including Oxford Collection Agency. Beginning in approximately August 2008 and continuing for more than two years, Oxford Collection Agency executives engaged in a bribery scheme with TATE in order to obtain and retain the business of U.S. Bank. As part of the scheme, Oxford executives initially provided TATE with boxes of expensive cigars, and subsequently sent TATE monthly cash payments of between $2,500 and $5,000, which were hidden in cigar boxes and mailed to TATE’s residence in Mason, Ohio.
U.S. Bank received funds through the Troubled Asset Relief Program (TARP).
TATE was arrested on February 27, 2013. Today, he pleaded guilty to one count of conspiracy to commit bank bribery, which carries a maximum term of imprisonment of five years. Judge Underhill has scheduled sentencing for February 18, 2014.
Six other individuals have been convicted as a result of this investigation and prosecution of criminal activity arising from Oxford Collection Agency and the debt collection industry.
This ongoing investigation is being conducted by the Internal Revenue Service – Criminal Investigation, the Federal Bureau of Investigation, the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), and the Connecticut Securities, Commodities, and Investor Fraud Task Force. The case is being prosecuted by Assistant U.S. Attorney Liam Brennan and Special U.S. Attorney John McReynolds
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(203) 821-3722 [email protected]Federal Grand Jury in Fort Wayne Returns IndictmentRead the Press Release
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Fort Wayne, Indiana - The United States Attorney's Office announced that a Grand Jury sitting in Fort Wayne, Indiana, returned the following Indictment on May 22, 2013: Orlando Paschall, 22, and Devonte Travier, 19, both of Fort Wayne, Indiana, are charged in a two count Indictment with conspiracy to interfer with commerce by threat or violence and use, carry, brandish, and discharge a firearm during and in relation to a crime of violence both occurring on or about November 13, 2012. These charges were filed as a result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives, Fort Wayne Police Department, Allen County Police Department and the New Haven Police Department. This case has been assigned to and will be prosecuted by Assistant United States Attorney Tina L. Nommay.
The United States Attorney's Office emphasized that an Indictment is merely an allegation and that all persons charged are presumed innocent until and unless proven guilty in court.
If convicted in court, any specific sentence to be imposed will be determined by the judge after a consideration of federal sentencing statutes and the Federal Sentencing Guidelines.Federal Grand Jury in Fort Wayne Returns IndictmentRead the Press Release
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Fort Wayne, Indiana - The United States Attorney's Office announced that a Grand Jury sitting in Fort Wayne, Indiana, returned the following Indictment on November 20, 2013: Jacob Miller, 50, of Auburn, Indiana, is charged in a five count Indictment with selling firearms to a known felon on or about March 28, 2013, April 15, 2013, June 14, 2013 and November 15, 2013, and dealing in firearms as an unlicensed dealer between on or about March
21, 2013, and continuing to on or about November 15, 2013. The Indictment also seeks the forfeiture of firearms and ammunition. These charges were filed as a result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives. This case has been assigned to and will be prosecuted by Assistant United States Attorney Tina L. Nommay.
The United States Attorney's Office emphasized that an Indictment is merely an allegation and that all persons charged are presumed innocent until and unless proven guilty in court.
If convicted in court, any specific sentence to be imposed will be determined by the judge after a consideration of federal sentencing statutes and the Federal Sentencing Guidelines.Eight Individuals Charged in Illegal Gambling OperationRead the Press Release
Jackson, Miss – A federal grand jury returned an indictment against eight individuals from the Meridian, Mississippi area in connection with illegal gambling operations, announced U. S. Attorney Gregory K. Davis, Gabriel Grchan, Special Agent in Charge of IRS Criminal Investigation and Daniel McMullen, Special Agent in Charge of the Federal Bureau of Investigation.
The Indictment charges WILLIAM WAYNE (BILL) GORDON, SR., age 79, MILDRED GORDON, age 76, WILLIAM WAYNE (WAYNE) GORDON, JR., age 55, NELLIE MILLER, age 50, CAMERON GORDON, age 24, DENNIS MICHAEL GORDON, age 54, RICHARD McKISSACK, age 50, and CHRISTOPHER CRAWFORD, age 38, in Count 1 with Conspiracy to Commit a Federal Offense under 18 U.S.C. §371. Count 2 of the Indictment charges WILLIAM WAYNE (BILL) GORDON, SR., MILDRED GORDON, WILLIAM WAYNE (WAYNE) GORDON, JR., NELLIE MILLER, CAMERON GORDON, RICHARD McKISSACK, and CHRISTOPHER CRAWFORD with violation of the prohibition of operating illegal gambling business under 18 U.S.C. §1955. The maximum penalty for each offense is five years imprisonment and/or a fine of $250,000.00. The Defendants are scheduled to appear for arraignment before U.S. Magistrate Judge F. Keith Ball on Tuesday, November 26, 2013, at 10:00 a.m. at the U.S. Courthouse in Jackson, MS.
According to the Indictment, the charges are associated with the operation of illegal gambling businesses from November 2011 through at least May 14, 2013, at the following locations in Meridian, MS: The Snack Shack, located at 1479 Highway 11 & 80; The Sports Connection, which is commonly referred to as “the Log Cabin”, located at 501 46th Avenue; and The New Place, located at 401 23rd Avenue. It is alleged that at these locations the defendants would accept illegal wagers on the outcome of college and professional sporting events, then collect and remove the wagers from these locations and grade the bets based on the outcome of the wagered event to calculate winnings and losses for those persons placing the wagers. Thereafter, the defendants would pay persons with winning wagers and keep the remaining funds for their personal use and benefit. The Indictment in the case also alleges that the defendants would possess, own, control, display, operate, and expose for play illegal gambling and gaming devices, such as illegal video poker machines. It is alleged that the illegal gambling businesses were conducted in violation of Mississippi law and remained in substantially continuous operation for a period in excess of 30 days.
The Indictment also gives notice of the United States’ intent to seek criminal forfeiture of 8 pieces of real property in Meridian, MS, associated with the alleged criminal conduct, as well as approximately $125,905.15 in U.S. Currency seized from locations associated with the gambling operation.
The case is being prosecuted by Assistant U.S. Attorneys Carla J. Clark and J. Scott Gilbert. The investigation was conducted by the Internal Revenue Service-Criminal Investigations and the Federal Bureau of Investigation with assistance from the Mississippi Gaming Commission.
The public is reminded that an indictment is merely an accusation and all defendants are presumed innocent until proven guilty.###
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District Woman Indicted for First-Degree Murder While Armed in March 2013 Slaying of Her Husband-Shooting Took Place at Couple’s Apartment-Read the Press Release
WASHINGTON - Diana Lalchan, 28, of Washington, D.C., has been indicted on charges of first-degree murder while armed and possession of a firearm during a crime of violence for the slaying earlier this year of her husband, U.S. Attorney Ronald C. Machen Jr. announced today.
A grand jury returned the indictment on Nov. 21, 2013 in the Superior Court of the District of Columbia. Lalchan pled not guilty to the charges at her arraignment today. The Honorable Ronna L. Beck has set a trial date of March 3, 2014. If convicted, Lalchan faces a potential sentence of life in prison.
According to the government’s evidence, on March 28, 2013, at approximately 12:05 a.m., Lalchan called 911 and reported that she had just shot her husband inside their apartment in the 1200 block of Fourth Street SW. The Metropolitan Police Department (MPD) responded to the scene and found her inside the apartment, holding a cell phone. Police found her husband, Christopher Lalchan, 36, lying on the floor, unconscious and unresponsive. Mr. Lalchan was suffering from an apparent gunshot wound to the back of the head. The defendant was placed under arrest. A search of the residence revealed a semi-automatic handgun and three shell casings on the floor.
Lalchan had been married to Mr. Lalchan since October of 2008. After the shooting, Lalchan told police that her husband had asked her to come home on the evening of March 27, 2013, so that the two could have a meeting regarding their marriage. After having dinner, Lalchan said that an argument ensued that escalated and de-escalated for several hours. Ultimately, according to the government’s evidence, she fired three shots at Mr. Lalchan. According to the forensic evidence, the first shot was fired into the kitchen. The second shot was fired into the back of Mr. Lalchan’s head. A third shot was fired next to his head.
An indictment is merely a formal charge that a defendant has committed a violation of criminal law and is not evidence of guilt. Every defendant is presumed innocent until, and unless, proven guilty.
In announcing the indictment, U.S. Attorney Machen commended the work of the MPD detectives and officers who investigated the case. He also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialists Kelly Blakeney and Mia Beamon; Criminal Investigators Nelson Rhone, John Marsh, and Tommy Miller; Victim/Witness Advocates Tamara Ince and Marcia Rinker, and Assistant U.S. Attorney Cynthia Wright, who is prosecuting the matter.
13-403District Man Sentenced to Eight Years in Prison for Sexually Assaulting 8-Year-Old Girl-Victim Immediately Came Forward-Read the Press Release
WASHINGTON – A 38-year-old man from Washington, D.C., was sentenced today to eight years in prison on a charge that stemmed from his sexual abuse of an eight-year-old girl at whose home he was staying temporarily, U.S. Attorney Ronald C. Machen Jr. announced.
The defendant, who is not identified here to protect the privacy of the victim and her family, pled guilty in July 2013 in the Superior Court of the District of Columbia to one count of second-degree child sexual abuse. He was sentenced by the Honorable John Ramsey Johnson. In addition to the prison term, the defendant will be required to register as a sex offender for the rest of his life. He already was a convicted sex offender, having been previously convicted of the misdemeanor sexual assault of a 10-year-old girl in 2001.
According to the government’s evidence, the defendant was a trusted family friend, who frequently stayed overnight in the victim’s home in Southeast Washington. On June 20, 2013, while the girl’s mother was asleep in another room, he was alone with the victim, and used the opportunity to sexually assault her. The victim immediately ran to her mother and disclosed the abuse.
In announcing the sentence, U.S. Attorney Machen commended the work of the Metropolitan Police Department’s Youth Investigations Division. He also acknowledged the work of the Children’s Advocacy Center and the Children’s National Medical Center, which provided critical services to the victim. In addition, he praised the efforts of those who handled the case from the U.S. Attorney’s Office, including Child Forensic Interview Specialist Karen Giannakoulias and Victim/Witness Advocate Melissa Milam. Finally, he acknowledged the efforts of Assistant U.S. Attorney Heide L. Herrmann, who prosecuted the matter.
13-405District Man Sentenced to 6 ½ Years in Prison for Kidnapping and Sexual Assault-Defendant Sexually Assaulted Woman, Then Threw Her Down the Steps-Read the Press Release
WASHINGTON – Cornell “Man” Shumate, 30, of Washington, D.C., was sentenced today to 6 ½ years in prison on charges stemming from the kidnapping and sexual assault of a woman in March of 2012, U.S. Attorney Ronald C. Machen Jr. announced.
Shumate was found guilty in September 2013 by a jury in the Superior Court of the District of Columbia of charges of kidnapping, attempted sexual abuse, and assault. He was sentenced by the Honorable John Ramsey Johnson. Upon completion of his prison term, Shumate will be placed on five years of supervised release. He also will be required to register as a sex offender for the rest of his life.
According to the government’s evidence, in March 2012, the victim met Shumate’s friend and they exchanged phone numbers. A few days later, on March 25, 2012, the victim agreed to get together with Shumate’s friend. The friend brought the victim to Shumate’s house in Northeast Washington, and they, along with several others, drank and had casual conversation.
Unbeknownst to the victim, Shumate and his friend were using her as part of a game to see if they could get a woman to have sex with every man in the apartment. After a night of drinking and socializing, the victim had consensual sex with Shumate’s friend in the apartment. After she rejected the defendant, he pushed her into his bedroom, locked the door and started to rape her. After she was able to get away, he threw her out of the apartment and down two flights of stairs. The victim reported the assault immediately and Shumate was apprehended that night.
In announcing the sentence, U.S. Attorney Machen commended the work of those who investigated the case from the Metropolitan Police Department’s Sexual Assault Unit. He also praised those who handled the case from the U.S. Attorney’s Office, including Victim/Witness Advocate Veronica Vaughan, Paralegal Specialist D’Yvonne Key, and Litigation Technology Specialist Kimberly Smith. Finally, he commended the efforts of Assistant U.S. Attorney Amy H. Zubrensky, who indicted the case, and Assistant U.S. Attorney Mervin A. Bourne, Jr., who prosecuted the case.
13-404District Man Sentenced to 24-Year Prison Term for Kidnapping Two Men and Assaulting A Police Officer-Armed Attacks Occurred Early Christmas Morning-Read the Press Release
WASHINGTON – Paul Smith, 33, of Washington, D.C., was sentenced today to a prison term of 24 years for kidnapping two men and assaulting a police officer last Christmas morning, all while armed, U.S. Attorney Ronald C. Machen Jr. announced.
Smith pled guilty in September 2013, in the Superior Court of the District of Columbia, to charges of kidnapping while armed, assaulting, resisting, or interfering with a police officer, and a firearms offense. He was sentenced by the Honorable William M. Jackson. Upon completion of his prison term, Smith will be placed on five years of supervised release.
According to the government’s evidence, on Dec. 25, 2012, at approximately 1 a.m., Smith approached three men who were traveling in a vehicle near the intersection of Martin Luther King Jr. Avenue and Sumner Road SE. He asked them for a ride home, and directed them to a building on Chesapeake Street SE.
Once at the building, Smith pulled out a firearm and ordered the men out of the vehicle. One ran away. Smith pointed a gun at the two others and demanded their money. The victims emptied their pockets, and one had an ATM card. Smith ordered the men back into the vehicle at gunpoint, and directed them to drive to a bank in the 4100 block of South Capitol Street SE.
Once they arrived at the bank, Smith ordered one of the men to go to the ATM, withdraw money, and give him the money. While this victim was at the ATM, Smith pointed the firearm at the second man, who remained in the vehicle. Once the victim returned from the ATM and handed Smith $300, an officer from the Metropolitan Police Department (MPD) pulled up. The two victims told the officer that Smith was robbing them.
The officer ordered Smith to drop his gun. Instead, Smith pointed his gun at the officer, and told the officer “No you drop your gun!” Smith then ran away, and the officer followed, ordering him to stop and drop his weapon. Smith refused to comply with the officer’s demands, and continued to run away towards Chesapeake Street SE. While on Chesapeake Street SE, Smith pointed the firearm at the officer. The officer discharged his firearm, striking Smith twice.
In announcing the sentence, U.S. Attorney Machen commended the work of the Metropolitan Police Department. He also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialist Lynette Briggs; Litigation Support Specialists William Henderson, Paul Howell, and Kimberly Smith, and Victim/Witness Advocate James Brennan. Finally, he expressed appreciation for the work of Assistant U.S. Attorneys Demian S. Ahn, who investigated the case, and Kendra Briggs, who investigated and prosecuted the matter.
13-406Demolition Company Operators Found Guilty in Manhattan Federal Court of Scheme to Underpay Employees in Violation of Federal Prevailing Wage LawRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that JOVER NARANJO, the owner and president of Enviro & Demo Masters, Inc. (“Enviro”), and LUPERIO NARANJO, SR., a foreman for Enviro, were found guilty today in Manhattan federal court of perpetrating a scheme to underpay employees in violation of the federal prevailing wage law. The jury also found that JOVER NARANJO and LUPERIO NARANJO, SR., tampered with witnesses and used other people’s identities to further their fraudulent scheme. In addition, the jury found that JOVER NARANJO made false statements to a government agent in connection with the scheme. They were convicted after a two-week trial before U.S. District Judge Jed S. Rakoff.
Manhattan U.S. Attorney Preet Bharara said: “Today, Jover Navanjo, and Luperio Naranjo, Sr. stand convicted of deceiving government agencies through fraudulent payrolls that hid the unlawful underpayment of their employees, and then concealing their fraud. The Office has zero tolerance for contractors who unlawfully take advantage of their staff, abuse federal funds, and then lie about it to cover their tracks. With today’s verdict, Jover Naranjo and Luperio Naranjo, Sr., will be punished for their conduct.”
According to the Complaint and the Superseding Indictment filed in Manhattan federal court and the evidence presented at trial:
In August 2009, Enviro was awarded a sub-contract by the general contractor on a New York City project (the “Project”) to demolish five buildings in Manhattan (the “Contract”) that was funded in part with federal stimulus money. From August 2009 through February 2010, JOVER NARANJO and LUPERIO NARANJO, SR., participated in a scheme to submit fraudulent certified payrolls to the New York City Department of Housing Preservation and Development (“HPD”) and the U.S. Department of Labor in connection with the Contract. These certified payrolls were fraudulent in at least three respects. First, they listed relatives as the demolition workers on the Project, when in fact, these relatives did no work. Second, the certified payrolls did not list the actual individuals who worked on the Project. Third, the certified payrolls misrepresented the wages being paid to Enviro’s workers.
In this regard, the fraudulent certified payrolls indicated that Enviro was paying its employees the federal prevailing wage, as required by federal law, but in reality, they were being paid far less. Although the applicable federal prevailing wages for Enviro employees working on the Contract were approximately $49 and $33 per hour for demolition laborers, JOVER NARANJO and LUPERIO NARANJO, SR., paid their demolition workers as little as $13 per hour. The total amount of salary underpaid by the defendants to Enviro employees working on the Contract was in excess of approximately $650,000.
JOVER NARANJO and LUPERIO NARANJO, SR., also employed a number of measures to conceal their fraud. For example, they submitted supporting documentation with the certified payrolls that included time sheets on which they forged workers’ signatures, and canceled checks that they had doctored to make it appear that workers were earning the prevailing wage. In addition, they hid their workers from investigators and told some to lie about their identities, work schedules, and/or pay rates if they were questioned by investigators. When an employee truthfully told investigators that the employee was paid below the prevailing wage, JOVER NARANJO and LUPERIO NARANJO, SR., fired the employee and the employee’s relative.
JOVER NARANJO, 37, and LUPERIO NARANJO, SR., 65, both of Queens, New York, were each convicted of mail fraud, conspiracy to commit mail fraud, witness tampering, conspiracy to commit witness tampering, and aggravated identity theft. JOVER NARANJO was also convicted of one count of making false statements.
JOVER NARANJO faces a total maximum sentence of 87 years in prison, including a mandatory minimum sentence of two years. LUPERIO NARANJO, SR., faces a total maximum sentence of 82 years in prison, including a mandatory minimum sentence of two years. The defendants also each face a maximum fine of $250,000 or twice the gross gain or loss from the offense on each count except aggravated identity theft.
The defendants are scheduled to be sentenced by Judge Rakoff on March 24, 2014 at 4:00 p.m.
Mr. Bharara praised the outstanding investigative work of the New York Field Office of the U.S. Department of Labor’s Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, the New York City Department of Investigation, and the United States Environmental Protection Agency Criminal Investigation Division.
This case is being handled by the Office’s Public Corruption Unit. Assistant United States Attorneys Brian A. Jacobs and Brent S. Wible are in charge of the prosecution.
Crestline Man Charged with Child Pornography OffensesRead the Press Release
Miles E. Price, 29, of Crestline, Ohio, was charged with receiving, distributing and possessing visual depictions of minors engaged in sexually explicit conduct, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
The indictment charges that from on or about June 3, 2013, through on or about September 2, 2013, Price knowingly received and distributed in interstate and foreign commerce, by computer, numerous computer files, which files contained visual depictions of real minors engaged in sexually explicit conduct.
The indictment also charges that from on or about June 3, 2013, through on or about October 23, 2013, Price possessed a computer that contained child pornography.
The actual sentence in this case will be determined by the court after consideration of the Federal Sentencing Guidelines which depend upon a number of factors unique to each case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the unique characteristics of the violation. In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
This case is being prosecuted by Assistant United States Attorney Michael A. Sullivan. The case was investigated by the Canton office of the Federal Bureau of Investigation.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Chief Deputy of Bernalillo County Sheriff’s Office Assumes Leadership of Multi-Agency Intelligence Sharing NetworkRead the Press Release
ALBUQUERQUE – Acting U.S. Attorney Steven C. Yarbrough and Bernalillo County Sheriff Dan Houston announced that Jessica A. Tyler, Chief Deputy of the Bernalillo County Sheriff’s Office, has been elected Chairwoman of the Rio Grande Law Enforcement Information Exchange (LInX) Advisory Group. Deputy Chief Tyler replaces Chief Julian Gonzales of the Bernalillo Police Department, who is retiring after 37 years in law enforcement.
Rio Grande LInX is a federal initiative sponsored by the U.S. Attorney’s Office and the Naval Criminal Investigative Service that facilitates electronic sharing of law enforcement information among 41 federal state and local law enforcement agencies in New Mexico and west Texas. The LInX initiative provides participating partner agencies with secure access to regional crime and incident data and the tools needed to process it, enabling investigators to search across jurisdictional boundaries to help solve crimes and resolve suspicious events. There are nine LInX regions, including the Rio Grande LInX, throughout the United States with over 760 partner agencies.
Deputy Chief Tyler is the first woman to hold the rank of Chief Deputy in the Bernalillo County Sheriff’s Office. She began her law enforcement career as a patrol officer with the department in 2000 and was named to her current position earlier this year. In addition to working in the Crimes Against Children Unit, she served as the department’s training coordinator and spent time as a member of the SWAT team as a crisis negotiator. Deputy Chief Tyler also has served as commander of the internal affairs unit, field services division and criminal investigations division during her career with the Bernalillo County Sheriff’s Office.
Acting U.S. Attorney Steven C. Yarbrough praised the selection of Deputy Chief Tyler as the new leader of the Rio Grande LInX Advisory Group and said, “Chief Deputy Tyler has long been a tremendous asset to our law enforcement community. Throughout her distinguished career with the Sheriff’s Office, she has supported numerous local Department of Justice criminal justice initiatives, including Operation Weed and Seed, Project Safe Neighborhoods, and violence reduction training and outreach programs. I am grateful to Sheriff Dan Houston for his support and the nomination of his Chief Deputy to lead the Rio Grande LInX Advisory Group which provides nationwide support to the law enforcement community.”
“It is an honor for the Bernalillo County Sheriff's Office to provide a leader for this important initiative with the appointment of Chief Deputy Tyler,” said Bernalillo County Sheriff Dan Houston. “Her dedication to the profession of law enforcement is evidenced by her level of education as she has a Master’s Degree in Public Administration. I know she will continue to lead this initiative with the same professionalism as her predecessor.”
Cheyenne Man Convicted for Attempted Online Enticement of A MinorRead the Press Release
U.S. Attorney Christopher A. Crofts announced today that Cheyenne resident David Faust has been convicted in federal court. A jury found Faust guilty of attempted online enticement of a minor for sexual purposes after a two-day jury trial in the U.S. District Court in Cheyenne. Faust is scheduled to be sentenced by Federal District Court Judge Johnson on January 30, 2014. The investigation in this case was conducted by the Federal Bureau of Investigation, assisted by the Wyoming Division of Criminal Investigation Internet Crimes Against Children Task Force and Homeland Security Investigations.
Charlotte Jury Finds Former Owner of Mental Health Clinic Guilty of Defrauding Medicaid Using Stolen Identities of Children and CliniciansRead the Press Release
Defendant Submitted Over $700,000 In Fraudulent Reimbursement Claims To Medicaid
CHARLOTTE, N.C. – A federal jury sitting in Charlotte returned a guilty verdict today for a Charlotte man accused of conspiring to defraud Medicaid of at least $700,000, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Calvin Cantrell Estrich, 32, of Charlotte, was convicted following a four-day trial before U.S. District Judge Max O. Cogburn, Jr. Estrich was also found guilty of committing health care fraud, making false statement in connection with a health care program, stealing the identities of children and clinicians to commit the fraud, money laundering and making false statements to investigators.
U.S. Attorney Tompkins is joined in making today’s announcement by Attorney General Roy Cooper, who oversees the North Carolina Medicaid Investigations Division (MID).
“We will not allow the likes of Estrich to use Medicaid or any other taxpayer funded health care program as their personal ATMs,” said U.S. Attorney Tompkins in making today’s announcement of the guilty verdict. “Working together with our state partners we will find and prosecute those who pilfer precious health care resources from patients who need them and use scams to pocket taxpayer dollars.”
“Ripping off Medicaid harms needy patients, wastes tax dollars and contributes to rising health care costs,” North Carolina Attorney General Roy Cooper said. “This conviction sends a strong message that criminals who cheat Medicaid will pay, and it’s a great example of our ongoing partnership to stamp out health care fraud here in North Carolina.”
According to filed court documents and trial proceedings, from October 2009 to November 2010, Estrich and his co-conspirator, Joye Strong, participated in a scheme to defraud Medicaid for medically unnecessary services. Estrich’s company, Everyday’s Blessing, was approved by Medicaid to provide Intensive In-Home Community Intervention Services, which are mental and behavioral services designed to stabilize living arrangements for youth and children and prevent out-of-home therapeutic treatment. Trial evidence showed that Estrich and Strong stole and misused the identities of a nurse practitioner and two therapists in order to complete the necessary paperwork for Medicaid to approve services for Medicaid recipients to receive these services. According to evidence presented at trial, once Medicaid approved Everyday’s Blessing to provide services to these recipients based upon the fraudulent paperwork, Estrich and Strong sought and received payment from Medicaid for the fraudulent services. Evidence presented at trial established that in many instances, the Medicaid recipients did not receive any services at all. For example, evidence presented at trial established that Estrich, aided and abetted by others, used the Medicaid recipient identification number of a juvenile identified as “J.R.” and falsely and fraudulently billed Medicaid for services that J.R. never received. Estrich and Strong, through Everyday’s Blessing, received over $24,000 in payments from Medicaid for these false services.
Evidence presented at trial also showed that Estrich and Strong stole the identity of therapist “J.O.” in order to obtain approval from Medicaid for fraudulent and medically unnecessary services. Trial testimony revealed that J.O. provided her name and credentials to Strong when she sought employment at another company operated by Strong. Thereafter, Estrich and Strong stole and misused J.O.’s identity by forging J.O.’s signature to paperwork for diagnostic and therapeutic services which J.O. did not perform.
According to trial evidence, based on the fraudulent claims Medicaid reimbursed Estrich and Strong $462,178, from which Estrich received $192,000 for his role in the scheme. Trial evidence also showed that when investigators interviewed Estrich about the fraud scheme in December 2012, Estrich made materially false and fraudulent statements to investigators.
Estrich remains free on bond pending sentencing. At sentencing, Estrich faces a maximum term of ten years in prison for the health care fraud conspiracy count and for each of the four counts of health care fraud. Each of the four counts of making false statements in connection with health care matters carries a maximum term of five years in prison. Each of the eight aggravated identity theft counts carries a mandatory prison term of two years. Estrich also faces a maximum of 10 years in prison for the money laundering charge and a maximum of five years in prison for the one count of making false statements to investigators in a federal health care fraud investigation. Each count of conviction carries a maximum fine of $250,000. A sentencing date for Mr. Estrich has not yet been set.
Estrich’s co-conspirator, Joye Strong, pleaded guilty to eight counts of health care fraud and two counts of money laundering on October 4, 2011. Strong is awaiting sentencing on these charges.
The investigation into Estrich and Strong was handled by MID with assistance from the North Carolina Division of Medical Assistance.
The prosecution was handled by Special Assistant United States Attorneys Timothy Rodgers and Laura Lansford of the Western District of North Carolina. Mr. Rodgers is a Special Deputy Assistant Attorney General and Ms. Lansford is an Assistant Attorney General with the North Carolina Department of Justice Medicaid Investigations Division. The SAUSA position is reflection of the partnership between the Medicaid Investigations Division and the United States Attorney that helps ensure the effective and vigorous prosecution of Medicaid fraud.
The investigation and charges are the work of the Western District’s joint Health Care Fraud Task Force. The Task Force is multi-agency team of experienced federal and state investigators, working in conjunction with criminal and civil prosecutors, dedicated to identifying and prosecuting those who defraud the health care system, and reducing the potential for health care fraud in the future. The Task Force focuses on the coordination of cases, information sharing, identification of trends in health care fraud throughout the region, staffing of all whistle blower complaints, and the creation of investigative teams so that individual agencies may focus their unique areas of expertise on investigations. The Task Force builds upon existing partnerships between the agencies and its work reflects a heightened effort to reduce fraud and recover taxpayer dollars.
If you suspect Medicare fraud please report it by phone at 1-800-447-8477 (1-800-HHS-TIPS), or E-Mail at [email protected]. To report Medicaid fraud in North Carolina, call the North Carolina Medicaid Investigations Division at 919-881-2320.
Charges Brought in $7.4 Million Continuing Financial Crimes Enterprise That Targeted Northern Virginia Hispanic CommunityRead the Press Release
ALEXANDRIA, Va. – A twenty-five count superseding indictment was unsealed today charging five defendants—Rosita Vilchez, 39, of Lima, Peru; Armando Pino, 53, of Centerville, Va., currently in Peru; Edgar Vilchez, 38, of Manassas, Va.; Lorene Chittenden, 57, of Centerville, Va.; and Rocio Benavides, 28, of Manassas, Va.—with conspiracy to commit bank fraud and wire fraud affecting a financial institution and operating a continuing financial crimes enterprise. According to the indictment, between August 2005 and August 2007, the conspiracy generated nearly $7.4 million in fraudulent proceeds.
Dana J. Boente, Acting United States Attorney for the Eastern District of Virginia; Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office; and Fred W. Gibson, Acting Inspector General of the Federal Deposit Insurance Corporation, made the announcement.
The indictment alleges that Rosita Vilchez and her brother, Armando Pino, operated a real estate firm (Vilchez & Associates), a title insurance company (Pino Title), and the branch of a loan brokerage business (Mount Vernon Capital Corporation) in Manassas, Va., as a continuing financial crimes enterprise. According to the indictment, the defendants and their co-conspirators submitted fraudulent loan documents that falsified their real estate clients’ income, employment, and assets so that they could obtain loans to buy property through Vilchez & Associates, which received commissions of as much as six percent of the selling price of every home. Many of these transactions involved loans that allegedly were originated fraudulently by Lorene Chittenden, a loan officer who, according to the indictment, received thousands of dollars in loan commissions as a result of the fraud.
The indictment also alleges that the defendants targeted Hispanic clients who were not proficient in spoken or written English and who therefore often were unable to read and were unaware of the false statements made on the loan documents submitted to the lenders on their behalf. According to court filings, the fraudulent loan applications made it possible for the borrowers to qualify for loans they could not afford to repay. Most of these borrowers later lost their homes to foreclosure.
Rosita Vilchez originally was indicted on September 6, 2012, and she remains a fugitive in Peru. On October 31, 2013, the FBI announced a reward of up to $6,000, or up to 15,000 Peruvian soles, for information leading directly to the location and arrest of Rosita Vilchez. Additional information regarding Rosita Vilchez, including a poster with her picture, is available on the FBI’s website at http://www.fbi.gov/wanted/wcc/rosita-vilchez/view.
This case was investigated by the FBI’s Washington Field Office and the FDIC’s Office of Inspector General. Assistant United States Attorney James P. Gillis is prosecuting the case on behalf of the United States.
Criminal indictments are only charges and not evidence of guilt. A defendant is presumed to be innocent until and unless proven guilty.
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.Charenton Man Pleads Guilty to Assault on Woman and Chitimacha Tribal Police OfficerRead the Press Release
LAFAYETTE, La. – United States Attorney Stephanie A. Finley announced that David Frederick, 38, of Charenton, La., pleaded guilty Wednesday before U.S. District Court Judge Richard T. Haik, to assaulting a woman and a Chitimacha tribal police officer.
According to evidence presented at the guilty plea, on January 27, 2013, Frederick assaulted his girlfriend near her place of employment on Chitimacha tribal lands. After he was arrested and while being booked, Frederick attacked a Chitimacha tribal police officer and attempted to take his handgun. A second officer entered the struggle, and Frederick was subdued after pepper spray and a TASER were deployed. During the investigation, law enforcement agents learned that the defendant also assaulted his girlfriend on January 25, 2013, at her residence on the Chitimacha Tribal Reservation.
Frederick faces 20 years in prison, a $250,000 fine, and three years of supervised release for the assault of the Chitimacha tribal police officer. He also faces a maximum penalty of six months in prison, a $250,000 fine, and one year of supervised release for the assault within Indian Country count.
Jurisdiction in Indian Country is based upon the unique sovereign relationship between the federal government and Indian tribes. Congress has criminalized certain acts that take place in Indian Country, and the U.S. Attorney’s Office is the agency that prosecutes the felony cases where either the defendant or the victim is an Indian or both the defendant and the victim are Indian. The U.S. Attorney’s Office also prosecutes cases involving misdemeanors where the defendant is a non-Indian and the victim is an Indian.
The Federal Bureau of Investigation and Chitimacha Tribal Police Department conducted the investigation. Assistant U.S. Attorney Daniel J. McCoy is prosecuting the case.Bullhead Woman Sentenced for Child AbuseRead the Press Release
United States Attorney Brendan V. Johnson announced that Velnita Hairy Chin, age 41, of Bullhead, South Dakota, pled guilty to Child Abuse and was sentenced on November 18, 2013, by U.S. District Judge Charles B. Kornmann.
Hairy Chin was sentenced to 12 months in custody, 1 year of supervised release, and a $100 special assessment to the Federal Crime Victims Fund.
Hairy Chin was indicted for the above charge by a federal grand jury on December 11, 2012. The conviction stems from an incident occurring between March 30, 2012 and May 20, 2012, in which Hairy Chin neglected the needs of her infant daughter by failing to seek prompt medical attention for her injuries.
The investigation was conducted by the Bureau of Indian Affairs. Assistant U.S. Attorney Troy R. Morley prosecuted the case.
Hairy Chin was immediately turned over to the custody of the U.S. Marshals Service.
Bullhead Man Indicted on Assault ChargesRead the Press Release
United States Attorney Brendan V. Johnson announced that a Bullhead, South Dakota, man has been indicted by a federal grand jury.
Alexander Oka, age 22, was indicted on November 14, 2013, for Assault by Strangulation and Suffocation and Domestic Assault by an Habitual Offender. Oka appeared before U.S. Magistrate Judge William D. Gerdes on November 19, 2013, and pled not guilty to the Indictment.
The maximum penalty upon conviction is 10 years of imprisonment and/or a $250,000 fine, 3 years of supervised release, an additional 2 years of supervised release upon revocation, and a mandatory $100 special assessment to the Federal Crime Victims Fund. Restitution may also be ordered.
The charges are merely accusations, and Oka is presumed innocent until and unless proven guilty.
The Indictment alleges that on August 20, 2013, Oka assaulted his dating partner by strangling and suffocating her.
The investigation is being conducted by the Bureau of Indian Affairs. Assistant U.S. Attorney Troy R. Morley is prosecuting the case.
Oka was remanded to the custody of the U.S. Marshals Service. A trial date has not been set.
Buffalo Woman Sentenced on Drug ChargesRead the Press Release
BUFFALO, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that Tracy D. Anderson, 41, of Buffalo, N.Y., who was convicted of attempting to possess with intent to distribute, and to distribute, cocaine, was sentenced to 30 months in prison by U.S. District Court Judge Richard J, Arcara.
Assistant U.S. Attorneys Timothy C. Lynch and Frank T. Pimintel, who handled the case, stated that on August 8, 2012, the defendant accepted delivery of a package shipped from the U.S. Virgin Islands that she believed contained cocaine. Prior to delivery, the actual cocaine had been seized by law enforcement officers and replaced with something of similar size, shape and weight. After being arrested, Anderson admitted that she agreed to accept delivery of the package in exchange for $200.00.
The sentencing is the culmination of an investigation on the part of the United States Postal Inspection Service, under the direction of Inspector in Charge Kevin Niland of the Boston Division and the Drug Enforcement Administration, under the direction of Brian R. Crowell, Special Agent in Charge, New York Field Division.Buffalo Man Sentenced for Conspiracy to Commit Money Laundering ChargeRead the Press Release
BUFFALO, N.Y.-- U.S. Attorney William J. Hochul, Jr. announced today that Montique Shelton, 38, of Buffalo, N.Y., who was convicted of conspiracy to commit money laundering, was sentenced to three years probation by U.S. District Judge Richard J. Arcara.
Assistant U.S. Attorney Mary Catherine Baumgarten, who handled the case, stated that Shelton conspired with other individuals who were engaged in drug trafficking, and thereafter purchased real estate in the City of Buffalo in his name using drug proceeds. As a result of the investigation, the property at 341 Hinman Avenue in Buffalo has been forfeited.
The sentencing is the culmination of an investigation on the part of Special Agents of the Federal Bureau of Investigation, under the direction of Special Agent in Charge Broan P. Boetig.British Actor Sentenced to 25 Years in Federal Prison for Production of Child Pornography over the InternetRead the Press Release
Orlando, Florida – United States District Judge Charlene Edwards Honeywell yesterday sentenced John David Baker (30, resident of Celebration, Florida; citizen of the United Kingdom) to 25 years in prison for using children to produce child pornography over the Internet. He was also ordered to serve a 15-year term of supervised release, following his incarceration, and to register as a sex offender. Baker has been held in the custody of the United States Marshals Service since his arrest on September 7, 2012.
According to court documents, beginning in or about November 2008 through about August 2010, Baker used computers and interactive computer services to engage in online conversations with several minor children. During this period, Baker worked as an actor and helped train and audition adults and children who were attempting to pursue careers in the entertainment business. Baker also served as a talent judge for a talent competition in Florida. In this role, Baker met minor children who were auditioning to obtain work in the art and film industries.
After a complaint by a concerned parent of a child whom Baker had contacted online, Baker was interviewed by law enforcement. Baker acknowledged that he had been confronted by the director of the talent competition about his inappropriate online contact with minors and admitted to sexually-oriented chatting with other minors from the talent competition online. Baker also admitted to having sent or trading sexually- oriented photos of himself or others during chats, and having solicited photos from at least ten children in the talent competition. Baker obtained pornographic images over the Internet of at least one minor female, and used these images to establish a fictitious online personae for himself. Using this false personae, Baker persuaded at least two other minor children to send him, via the Internet, images and videos of themselves engaging in sexually explicit conduct.
During the analysis of Bakers' computer, a forensic examiner located several images and a video of a minor male engaging in sexually explicit conduct.
“Mr. Baker abused his position as a talent judge and acting coach to pursue inappropriate relationships with minors,” said Shane Folden, deputy special agent in charge of Homeland Security Investigations Tampa, which oversees the agency’s Jacksonville office that conducted this investigation. “We urge parents to talk to their children about how to protect themselves from sexual predators, and if they are exploited, they should report it. There are dedicated law enforcement officers and special agents at all levels of government who will do something about it. This case is testament to that. Mr. Baker will spend the next 25 years behind bars due to his actions.”
This case was investigated by the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the Jacksonville Sheriffs Office, the Orange County Sheriffs Office, the Osceola County Sheriffs Office, and the former Child Predator Cybercrime Unit of the Florida Attorney Generals Office. It was prosecuted by Assistant United States Attorney D. Rodney Brown.
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."
Bowie Realtor Sentenced to over 4 Years in Prison in $2 Million Mortgage Fraud SchemeRead the Press Release
Greenbelt, Maryland - U.S. District Judge Peter J. Messitte sentenced Michael Abobor, age 38, of Bowie, Maryland, today to 51 months in prison, followed by five years of supervised release, for wire fraud in connection with a mortgage fraud scheme involving intended losses of at least $2 million. Judge Messitte also entered an order that Abobor forfeit $2,026,205 and pay restitution of $1,832,650.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Acting Inspector General Fred W. Gibson, Jr. of the Federal Deposit Insurance Corporation; Special Agent in Charge Kathy Michalko of the United States Secret Service – Washington Field Office; and Special Agent in Charge Cary A. Rubenstein of the Housing and Urban Development Office of Inspector General - Office of Investigations.
According to his plea agreement, in the Spring and Summer of 2007, Abobor, a licensed realtor, submitted fraudulent loan applications for the purchase of homes in Maryland. Abobor purchased two homes in his own name, and purchased the rest of the homes using the names, and credit, of various friends and family members. Each loan application contained fraudulent information about the borrower’s earnings (including their monthly income and their assets) and employers, of which Abobor had full knowledge. Some of these applications contained fake documents, like doctored W-2s and paystubs; and all of them alleged that the borrower made much more money than he or she really did. Based on these fraudulent application materials, the victim lending institutions funded loans that totaled hundreds of thousands of dollars, resulting in substantial commission payments to Abobor. Eventually, each of these loans fell into default, causing large losses to the victims. Abobor also received large amounts of money that were disguised as “renovation payments” and funded by the mortgagesFor example, on July 25, 2007, Abobor facilitated the purchase of a home in Bowie, and while serving as the buyer’s real estate agent, knowingly submitted a false loan application on the buyer’s behalf. The loan application, among other things, vastly inflated the buyer’s monthly income figures. Relying upon these false representations, the lending institution funded a loan of $375,000. As part of this transaction, Abobor received a commission payment of $5,499, and also received over $37,000 in “renovation” payments.
In all, Abobor arranged at least seven fraudulent real estate transactions, caused more than $2,000,000 in intended losses to victim financial institutions, took in excess of $20,000 in fraudulent real estate commissions, and collected over $270,000 in extra money from the transactions in the form of third party disbursements for renovations that were never completed.
The Maryland Mortgage Fraud Task Force was established to unify the agencies that regulate and investigate mortgage fraud and promote the early detection, identification, prevention and prosecution of mortgage fraud schemes. This case, as well as other cases brought by members of the Task Force, demonstrates the commitment of law enforcement agencies to protect consumers from fraud and promote the integrity of the credit markets. Information about mortgage fraud prosecutions is available www.justice.gov/usao/md/Mortgage-Fraud/index.html.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.United States Attorney Rod J. Rosenstein praised the FDIC Office of Inspector General, U.S. Secret Service and the Department of Housing and Urban Development Office of Inspector General for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Sujit Raman, who prosecuted the case.
Blanchester Man Arrested for Child ExploitationRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
CINCINNATI – Stewart Matthew Kidwell, 36, of Blanchester, Ohio was arrested today on charges that he sought someone online to rape a four-year old family member while he watched, and that he distributed child pornography through a social media website.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, Kevin Cornelius, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Police Chief Jeffrey Blackwell, Hamilton County Sheriff Jim Neil who oversees the Regional Electronics and Computer Investigations Task Force (RECI) and other agencies in the Greater Cincinnati Internet Crimes Against Children Task Force announced the charges today which were unsealed after Kidwell’s arrest.
According to court documents, Kidwell approached a user on a social dating site in October 2013 and said he wanted to see someone rape his four-year old family member. The user reported the exchange to Cincinnati police who referred the case to RECI and the FBI for further investigation.
Investigators worked with the user to continue the conversation. Kidwell sent the investigator sexually explicit photos of the family member and offered to bring the child to a meeting in order to engage in sex.
The two-count complaint charges Kidwell with one count of coercion and enticement of another person to engage in illegal sexual contact with a minor child, a crime punishable by at least ten years and up to life imprisonment, and one count of distribution of child pornography, which is punishable by at least five years and up to 20 years in prison.
Kidwell appeared before U.S. Magistrate Judge Stephanie K. Bowman who ordered him held without bond. The case will be presented to a federal grand jury for possible additional charges.
This case was brought as part of Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the U.S. Attorneys Offices, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov/.
Stewart commended the investigation by FBI Special Agents, Cincinnati Police officers and investigators with the Greater Cincinnati ICAC as well as Assistant U.S. Attorney Christy Muncy who is representing the United States in this case.
Agencies participating in the Greater Cincinnati ICAC, in addition to the U.S. Attorney’s Office include the FBI, U.S. Marshals Service, U.S. Secret Service, Hamilton County Prosecutor Joe Deters, Hamilton County Sheriff Jim Neil and the police departments in Amberley Village, Blue Ash, Cincinnati, and West Chester.
Charges in a criminal complaint are accusations only. It is the government’s burden to prove the allegations beyond a reasonable doubt.
Blair Chiefstick Sentenced in U.S. District CourtRead the Press Release
The United States Attorney's Office announced that during a federal court session in Great Falls, on November 21, 2013, before Chief U.S. District Judge Dana L. Christensen, BLAIR CHIEFSTICK, a 22-year-old resident of Box Elder, was sentenced to a term of:
- ison: 87 months
- ecial Assessment: $100
- pervised Release: 10 years
CHIEFSTICK was sentenced in connection with his guilty plea to aggravated sexual abuse.
In an Offer of Proof filed by Assistant U.S. Attorney Danna R. Jackson, the government stated it would have proved at trial the following:
On September 2, 2012, after a night of huffing gasoline and drinking beer, CHIEFSTICK went to L.C.'s house. L.C.,J.C., and two children were at the home. CHIEFSTICK knocked on J.C.(s door and asked for some beer. CHIEFSTICK then grabbed J.C. by the ankles and drug her to another bedroom. He locked the door, pushed J.C. onto the floor, poured gasoline on J.C., and yelled that they were going to burn and die. CHIEFSTICK then sexually abused J.C.
CHIEFSTICK was arrested the next day. When interviewed, CHIEFSTICK told law enforcement that he knocked on J.C.(s door and asked for beer. He admitted that he pulled J.C. to the master bedroom. CHIEFSTICK recalled an altercation with L.C. and recalled jumping out a window and running away because he did not want to be caught by the police.
Because there is no parole in the federal system, the "truth in sentencing" guidelines mandate that CHIEFSTICK will likely serve all of the time imposed by the court. In the federal system, CHIEFSTICK does have the opportunity to earn a sentence reduction for "good behavior." However, this reduction will not exceed 15% of the overall sentence.
The investigation was conducted by the Federal Bureau of Investigation.
Arizona Man who Transported Drugs North and Weapons South into Mexico Sentenced to 15 Years in PrisonRead the Press Release
A drug and gun smuggler based in Arizona was sentenced yesterday in U.S. District Court in Seattle to 15 years in prison for his role in a wide ranging international drug conspiracy, announced U.S. Attorney Jenny A. Durkan. RAUL ANCHONDO, 29, was convicted in May 2013, of Conspiracy to Distribute Controlled Substances, Conspiracy to Possess Firearms in Furtherance of Drug Trafficking Crimes & Crimes of Violence, and Possession of Firearms in Furtherance of a Drug Trafficking Crime. Judge Robert S. Lasnik also imposed five years of supervised release as part of the sentence.
“This defendant was personally involved in moving large amounts of heroin and methamphetamine, drug proceeds, and military-style firearms on behalf of a violent drug cartel,” said U.S. Attorney Jenny A. Durkan. “The drugs directly contribute to the cycle of addiction and abuse in Western Washington and the drug proceeds and firearms feed violence and destruction in Mexico.”
ANCHONDO was arrested in March 2012, following a lengthy investigation of the drug trafficking ring. According to records filed in the case, during the investigation, agents seized multiple kilos of heroin, pounds of methamphetamine, and more than a dozen firearms, including military-style assault rifles which were bound for cartel members in Mexico. During the course of the investigation, federal agents were able to interdict a shipment of a dozen weapons to Mexico, preventing high powered firearms from crossing the border. In all, 34 people have been charged in the case. Conspiracy leader Victor Berrelleza-Verduzco was sentenced in September 2013 to 20 years in prison.
According to testimony at trial, ANCHONDO ran a stash house for drugs and bulk cash in Arizona, and later became a courier, bringing multi-pound loads of methamphetamine and kilos of heroin up to Western Washington in hidden compartments of various load vehicles. The compartments would be loaded with cash for the return trip – as much as $100,000 to $300,000 headed back to Mexico. ANCHONDO helped pack and ship the drugs – the packages were wrapped in a distinctive way with the initials of the drug leaders in Mexico responsible for the load noted on the packaging. At the direction of the conspiracy leaders, members of the conspiracy slept with firearms at their sides to protect the drugs and the cash. ANCHONDO also received two high powered weapons for shipment to Mexico, and used other firearms during the course of the conspiracy.
This was an Organized Crime and Drug Enforcement Task Force (OCDETF) investigation, providing supplemental federal funding to the federal and state agencies involved. The case was investigated by the ICE’s Homeland Security Investigations, the Bureau of Alcohol, Tobacco and Firearms (ATF), the Drug Enforcement Administration (DEA), the Lake Stevens Police Department, the Snohomish Police Department, Washington State Patrol, the Snohomish Regional Drug Task Force and the Seattle Police Department.
The case is being prosecuted by Assistant United States Attorneys Vince Lombardi and John McNeil.
Albuquerque Man Facing Federal Child Pornography ChargesRead the Press Release
ALBUQUERQUE – Joshua Iben, 21, of Albuquerque, N.M., entered a not guilty plea in federal court this morning on a criminal complaint charging him with distribution, receipt and possession of visual depictions of minors engaged in sexually explicit conduct. Iben will remain in federal custody pending trial.
Iben was arrested yesterday based on an FBI investigation that began in July 2013 and revealed that an IP address subscribed to Iben’s residential address allegedly was being used to share child pornography images. According to the criminal complaint, on Nov. 20, 2013, FBI agents executed a federal search warrant at Iben’s residence and seized computers and computer-related media. A preliminary forensic examination of a laptop computer taken from Iben’s residence revealed that it contains images consistent with child pornography.
If convicted of the charges in the criminal complaint, Iben faces a federal prison term of not less than five years and not more than 20 years. If convicted, Iben also would be required to register as a sex offender. Charges in criminal complaints are merely accusations and criminal defendants are presumed innocent unless found guilty beyond a reasonable doubt.This case was investigated by the Albuquerque office of the FBI and is being prosecuted by Assistant U.S. Attorney Mark T. Baker 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/.
Alabama Sheriff’s Investigator Indicted for Unlawfully Detaining and Assaulting Handcuffed Man at County JailRead the Press Release
The Department of Justice announced today that a federal grand jury in the Middle District of Alabama has returned an indictment against J. Keith McCray, a criminal investigator with the Macon County, Ala., Sheriff’s Office for violating the rights of a man he unlawfully seized and assaulted.
McCray, 41, is charged with two counts of deprivation of rights under color of law and one count of witness tampering. On July 4, 2013, the victim was going door-to-door in McCray’s neighborhood attempting to sell alarm systems. According to the indictment, McCray unlawfully seized the victim using a firearm, and then brought the victim to the county jail. The indictment alleges that at the jail, McCray struck the victim while he was handcuffed, which resulted in bodily injury. The indictment further alleges that McCray engaged in witness tampering when he intimidated the victim and corruptly persuaded him not to file a complaint for the assault.
If convicted, McCray could face a statutory maximum sentence of 10 years in prison and a $250,000 fine for each deprivation-of-rights count. He could face a statutory maximum sentence of 20 years in prison and a $250,000 fine for the witness tampering charge.
An indictment is merely an accusation, and the defendant is presumed innocent unless proven guilty.
This case is being investigated by the Federal Bureau of Investigation and the Alabama Bureau of Investigation. The case is being prosecuted by Assistant U.S. Attorney Jerusha T. Adams of the Middle District of Alabama and Trial Attorney Chiraag Bains of the department’s Civil Rights Division.
21 November 2013
“Biggest Fraud I’ve Ever Seen” Lands Mt. Carmel Accountant in Federal Prison for Ten YearsRead the Press Release
A Mt. Carmel, Ill. tax accountant began serving a10 year sentence in federal prison, on November 21, 2013, Stephen R. Wigginton, announced today. Kevin C. Williams, 53, was sentenced on November 15, 2013, to 120 months (10 years) in prison, to be followed by 3 years of supervised release, and nearly two million dollars in restitution. The sentencing judge ordered Williams to surrender today to begin serving his sentence.
Williams pled guilty on June 5, 2013. In pleading guilty, Williams admitted to having misused his trusted relationship with an elderly Mt. Carmel resident that enabled him to exert influence over the investment and distribution of her income. Williams admitted that he engaged in a lengthy scheme to defraud the victim, by stealing her money while she was alive and forging will and trust documents so that he would stand to inherit more of her money upon her demise.
Testimony at the sentencing hearing established that Williams defrauded a 96-year old victim of nearly $2 million dollars through a series of 476 identified financial transactions over the course of more than 20 years. The sentencing hearing included testimony from an IRS agent who explained how the victim reacted after learning that her once-trusted confidant was actually a con-man. The agent described that the elderly lady sobbed, trembled and said that she wished that she could just die. In a later interview, the victim described Williams’ crime as “the biggest fraud I’ve ever seen, and it happened to me.”
Williams admitted orchestrating the fraud scheme where he transferred the victim’s funds into his personal checking accounts, his personal savings accounts, his business accounts, and to pay his mortgage. Williams provided the victim with phony account statements so that she would believe that her money was safely invested when in truth much of her money had been stolen.
Williams committed money laundering by engaging in a series of financial transactions designed to deceive the victim into believing that she was receiving interest payments from investments when no such investments really existed. Williams misappropriated the victim’s money to buy cashier’s checks, but then later misrepresented those cashier’s checks to be the proceeds of her investments, when in truth and in fact no such investments existed.
According to the terms of the plea, in addition to being ordered to repay the victim $1,719,444, Williams also agreed to pay restitution to the IRS in the amount of $106,438, to a former employer for embezzling $38,547 and to the State of Illinois for fraudulently claiming $16,174 in unemployment benefits.
The investigation was conducted by agents from the Internal Revenue Service / Criminal Investigations, The Illinois Secretary of State Division of Securities, and the US Department of Labor Office of Inspector General. The case was prosecuted by Assistant United States Attorney Steven D. Weinhoeft.
Zander Sentenced to 68 Months in Prison for Fraud, Money Laundering, Tax Charges in Case Involving Scheme to Defraud Paiute TribeRead the Press Release
SALT LAKE CITY - Jeffrey Charles Zander, age 58, a former tribal planner, general counsel and economic development and trust resources director for the Paiute Indian Tribe of Utah, will serve 68 months in federal prison. Zander was convicted of mail and wire fraud, money laundering, and willful failure to file tax returns following a week-long trial in U.S. District Court in March.
U.S. District Judge David Nuffer, who imposed the sentence Wednesday, also ordered Zander to pay $202,543.92 in restitution. Zander will be allowed to self-surrender to begin serving his prison sentence.
Zander was charged with two counts of mail fraud, two counts of wire fraud, one count of money laundering, and three counts of willful failure to file a tax return in a superseding indictment returned in February 2012.
“Prosecuting white collar crime cases is a high priority for our office. This case is particularly egregious because it involves a person in a position of trust with the Paiute Tribe, who diverted funds intended to help the Tribe for his own personal use,” U.S. Attorney David B. Barlow said today.
Zander began working for the Paiute Tribe around October 1998 as its tribal planner. About two years later, he became the Tribe’s economic development director and trust resources director. Around September 2007, Zander convinced the Tribe to hire him as general counsel when, in truth, he did not possess a license to practice law.
Evidence presented at trial showed that beginning in 2005, Zander developed a scheme to divert more than $175,000 for his personal use that had been awarded to the Paiute Tribe through grant proposals the defendant had authored and assisted the tribe in applying for. The grants were awarded for Integrated Resource Management Plans (IRMP), which are long-term plans to balance the use of tribal resources between interests of residents of the reservation and revenue-generating uses of tribal lands. Zander told tribal leaders that he had hired companies in Salt Lake City, Las Vegas, and Provo to act as consultants or facilitators to assist with the creation of the IRMPs. Zander told the tribe that since he would be traveling to work with the consultants or facilitators, he could hand-deliver progress payment checks to the companies.
Evidence at trial showed the companies were bogus – created by the defendant to facilitate the fraud. Zander created fictitious invoices from the companies, submitted them for payment from the Tribe, and then drove to different points between Provo, Utah, and Mesquite, Nevada to deposit the checks into his personal bank accounts. He also drafted quarterly reports for the Bureau of Indian Affairs to show that the money was being spent for facilitators and consultants when, in truth, he had converted grant funds for his own use.
The scheme came to light when a transaction raised a red flag with a bank teller and, at about the same time, tribal leaders started to uncover the defendant’s deceit and misrepresentations. Evidence showed that invoices from all four companies were found on his work computer. Zander was fired from his tribal position and the case was turned over to the FBI.
“This defendant devised a scheme that caused the Paiute Nation to suffer substantial financial losses over a period of many years. I appreciate the IRS Criminal Investigation Division, the FBI special agents, and the United States Attorney’s Office for their dedicated work on this case. I believe this investigation highlights law enforcement’s ongoing commitment to investigating and prosecuting criminal activity on Native American lands in Utah,” Mary F. Rook, Special Agent in Charge of the FBI in Salt Lake City said today.
“This serves as a strong message to those in positions of trust who put greed over duty. All income is reportable including amounts you unlawfully obtain from others. Don't think using bogus entities and shell companies is going to conceal your activities from an agency with over 93 years of refining the art of following the money. Such acts will only serve to incriminate you more,” Paul Camacho, Special Agent in Charge of IRS Criminal Investigation, said.
The case was prosecuted by the U.S. Attorney’s Office in Salt Lake City and investigated by special agents of the FBI and the IRS Criminal Investigation Division.
Wounded Knee Man Sentenced for Assaulting A Woman with A BatRead the Press Release
United States Attorney Brendan V. Johnson announced that a Wounded Knee, South Dakota, man convicted of Assault with a Dangerous Weapon was sentenced on November 15, 2013, by Chief Judge Jeffrey L. Viken, U.S. District Court.
Lyle Sutton, Jr., age 27, was sentenced to 36 months of imprisonment, 3 years of supervised release, a $100 special assessment to the Federal Crime Victims Fund, and restitution.
Sutton was indicted for Assault with a Dangerous Weapon and Assault Resulting in Serious Bodily Injury by a federal grand jury on February 20, 2013. The charges stemmed from an incident that occurred at Wounded Knee on December 28, 2012. Sutton struck a woman with a wooden bat, causing nasal and cheek fractures and severe bruising to her back. Sutton pled guilty to Assault with a Dangerous Weapon on May 3, 2013.
This case was investigated by the Bureau of Indian Affairs, Office of Justice Services, and the Oglala Sioux Tribe Department of Public Safety. Assistant U.S. Attorney Wayne Venhuizen prosecuted the case.
Sutton was immediately turned over to the custody of the U.S. Marshals Service.
Wounded Knee Man Sentenced for Assaulting A Woman with A BatRead the Press Release
United States Attorney Brendan V. Johnson announced that a Wounded Knee, South Dakota, man convicted of Assault with a Dangerous Weapon was sentenced on November 15, 2013, by Chief Judge Jeffrey L. Viken, U.S. District Court.
Lyle Sutton, Jr., age 27, was sentenced to 36 months of imprisonment, 3 years of supervised release, a $100 special assessment to the Federal Crime Victims Fund, and restitution.
Sutton was indicted for Assault with a Dangerous Weapon and Assault Resulting in Serious Bodily Injury by a federal grand jury on February 20, 2013. The charges stemmed from an incident that occurred at Wounded Knee on December 28, 2012. Sutton struck a woman with a wooden bat, causing nasal and cheek fractures and severe bruising to her back. Sutton pled guilty to Assault with a Dangerous Weapon on May 3, 2013.
This case was investigated by the Bureau of Indian Affairs, Office of Justice Services, and the Oglala Sioux Tribe Department of Public Safety. Assistant U.S. Attorney Wayne Venhuizen prosecuted the case.
Sutton was immediately turned over to the custody of the U.S. Marshals Service.
Wood River Man Sentenced to 10 Years in Prison for Distribution and Possession of Child PornographyRead the Press Release
Charlie M. Jarrett, 71, of Wood River, Illinois, was sentenced on November 20, 2013, in the United States District Court to 10 years in prison for Distribution and Possession of Child Pornography, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today. Jarrett was also ordered to pay $10,000 in restitution to the victims of his offenses, a $200 special assessment, and a fine in the amount of $17,500. Following his prison sentence, Jarrett will be on federal supervised release for life and will also be required to register as a sex offender for the remainder of his life.
Court documents establish that in February 2012, during an undercover Internet investigation, agents from the Federal Bureau of Investigation determined that Jarrett was distributing child pornography using a peer-to-peer file sharing network. Agents obtained and executed a search warrant for Jarrett’s residence during which they seized Jarrett’s computer, 25 CD and DVD’s as well as a binder which contained over 200 images of child pornography. Jarrett was interviewed and admitted that he had been downloading child pornography from the internet for approximately 8 years and that he had distributed the images and videos containing child pornography to other individuals. During a forensic examination of Jarrett’s computer, agents recovered 2638 image files and 60 videos containing child pornography.
In pronouncing the sentence, the United States District Judge took note of the shocking content of the images distributed by Jarrett. “The Court just simply cannot get past the images that have been passed around between men,” he remarked. “This is a serious crime. And I hope that in this case that the word gets out . . . because we want them to pause. We want them to stop. And maybe just think that what I’m doing here even though it is at some level gratifying to me can cause me a lot of pain.” Were it not for Jarrett’s advanced age, the Judge noted that Jarrett would have been sentenced to more prison time.
“People need to know that there are men out there, like Mr. Jarrett and many others whom we have prosecuted, who join on-line worldwide secret networks to view, distribute and exchange some of the most shocking and sickening videos and photographs of children, toddlers and infants being raped. In this case our investigation found images and videos of adult males sexually penetrating infants and toddlers as well as toddlers forced to perform sexual acts on adults. Some of the images and videos included bondage and sadistic attacks on children.” said United States Attorney Wigginton. “The general public needs to know that more often than not the phrase ‘child pornography’ really means ‘child rape caught on tape.’ There are groups of adults who are interested in infant pornography, there are other groups of adults interested in toddler pornography, and there are many who are interested in prepubescent pornography. Terms like shocking, appalling, and sickening simply do not accurately describe what we see in these horrific cases.”
This case is part of Project Safe Childhood, a nationwide initiative launched in 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.”
The investigation was conducted by the Federal Bureau of Investigation’s Metro East Cyber Crimes and Analysis Task Force. The case was prosecuted by Assistant United States Attorney Ali Summers.
Wasilla Resident charged with possessing unregistered silencerRead the Press Release
Anchorage, Alaska - U.S. Attorney Karen L. Loeffler announced today that a Wasilla resident was charged with the illegal possession of an unregistered silencer.
Wasilla resident, James C. Riggs, 58, was charged by the federal grand jury with illegally possessing an unregistered .22 caliber silencer. In a separate matter, Riggs and three other South-central Alaska men were also charged by the United States Attorney with a violation of the Lacey Act and other crimes in connection with the take and possession of two bull Moose which were illegally taken within Denali National Park in September 2012.
According to Assistant U.S. Attorney Steven Skrocki, who presented the case to the grand jury, the silencer was discovered in Riggs’ home while it was being searched in connection with the Denali moose hunt in September 2012.
Ms. Loeffler commends the National Park Service, the United States Fish and Wildlife Service, the Bureau of Land Management and the Bureau of Alcohol, Tobacco and Firearms and Explosives for their work in the investigation of this case.
An indictment is only a charge and is not evidence of guilt. A defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
Violent Felon Sentenced to 96-Months for Illegally Possessing A Firearm AgainRead the Press Release
Jeremy Crawford, a 32-year old Venice, Illinois resident, was sentenced today in United States District Court to 96-months in federal prison for illegally possessing a firearm, announced Stephen R. Wigginton, United States Attorney for the Southern District of Illinois.
According to court documents, on September 19, 2012, officers with the Venice, Illinois, Police Department noticed that the driver of a black Chevy Silverado, later identified as Jeremy Crawford, was not wearing his seat belt. The officers got behind the truck and attempted to affect a traffic stop. Crawford would not pull over, and when he did, he tried to take off again. A third Venice PD officer arrived at the scene and parked Crawford in, preventing his vehicle from leaving. One officer opened the car door and instructed Crawford to get on the ground. Crawford refused, so he was forced out of the car and onto the ground, where he was handcuffed. The officers then placed Crawford in the back of the patrol car. Another officer checked the Chevy Silverado visually for other passengers and noticed a silver 9mm pistol under the driver’s seat. The officer observed that the gun was loaded with one in the chamber. While waiting in the patrol car, Crawford rolled down the rear passenger window of the patrol unit, climbed out of the window, and attempted to flee. The officers noticed Crawford’s actions and ran over to him. Crawford began kicking the officers. He was returned to the patrol car and arrested on an outstanding warrant.
Noting that Crawford’s criminal actions have “contributed to the atmosphere of fear” experienced in this district and that Crawford is a “danger to law enforcement,” the federal judge imposed a sentence above the recommended range of 57 to 71 months imprisonment. There is no parole in the federal prison system. In addition to the prison sentence, Crawford must also serve 3 years of supervised release and pay a $750 fine. United States Attorney Wigginton noted, “My office remains committed to prosecuting the district’s most violent criminals, especially those who illegally arm themselves with firearms and use them. As the Court recognized, Jeremy Crawford is an exceptionally dangerous and violent man. He’s a danger not just to the community, but also to law enforcement. A sentence like this sends a strong, clear message: stop the violence or pay the price.”
The Venice Police Department and the Bureau of Alcohol, Tobacco, Firearms, and Explosives investigated this case. Assistant United States Attorney Monica A. Stump prosecuted the offense.
Vermont Lake Monsters Take Steps to Comply with the Americans with Disabilities ActRead the Press Release
The United States Attorney’s Office for the District of Vermont announces that the Vermont Lake Monsters have completed specific modifications at Centennial Field to improve accessibility as described in Title III of the Americans with Disabilities Act (“ADA”). Title III of the ADA prohibits a public accommodation from denying an individual or a class of individuals, on the basis of a disability, the opportunity to participate in or benefit from the goods, services, facilities, or accommodations of an entity. Title III requires a public accommodation to remove architectural barriers to access in existing facilities where it is readily achievable to do so. The United States Attorney’s Office’s investigation began following a complaint regarding accessibility at Lake Monsters’ home games played at Centennial Field.
In particular, the United States Attorney’s Office investigated ADA compliance issues related to the Centennial Field’s parking lot, access route, and seating arrangement. The Lake Monsters have completed improvements to Centennial Field making all three of these areas more accessible under the ADA.
Assistant United States Attorney Nikolas P. Kerest, with assistance from the Disability Rights Section of the Civil Rights Division of the Department of Justice, handled this matter on behalf of the United States and is working with other Vermont businesses to resolve their ADA compliance issues. Further information on the ADA and its requirements may be found at www.ada.gov.
Vantage Oncology LLC to Pay More Than $2.08 Million for <br /> False Medicare Claims for Radiation Oncology ServicesRead the Press Release
Vantage Oncology LLC (Vantage) has agreed to pay the government more than $2.08 million to settle allegations that it submitted false claims to Medicare for radiation oncology services performed at its Illinois centers from 2007 through June 2012, the Justice Department announced today. Vantage owns and manages radiation oncology centers in multiple states, including two centers in Spring Valley and Streator, Ill.
“Billing Medicare for patient care that is not necessary or appropriate contributes to the soaring costs of health care,” said Assistant Attorney General for the Civil Division Stuart F. Delery. “The Department of Justice is committed to protecting public funds and guarding against abuse of the Medicare system.”The government alleged that Vantage double billed and overbilled Medicare for certain procedures, billed for services that lacked supporting documentation and improperly billed for radiation treatment provided to patients without proper physician supervision.
“Our office remains committed to ensuring appropriate patient care and protecting the integrity of government insurance programs,” said U.S. Attorney for the Southern District of Ohio C arter M. Stewart .
“Cheating taxpayers by double billing, overbilling and wrongly billing for services without required medical oversight will not be tolerated,” said Special Agent in Charge with the Office of Inspector General of the U.S. Department of Health and Human Services Lamont Pugh III. “The Office of Inspector General is committed to identifying, investigating and holding accountable those who improperly profit at the expense of the Medicare program.”This settlement resolves a lawsuit filed by former Vantage employee Suleiman Refaei under the qui tam, or whistleblower, provisions of the False Claims Act. The Act allows private citizens with knowledge of fraud to bring civil actions on behalf of the government and to share in any recovery. Refaei will receive $354,450.
This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by Attorney General Eric Holder and Health and Human Services Secretary Kathleen Sebelius. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $16.7 billion through False Claims Act cases, with more than $11.9 billion of that amount recovered in cases involving fraud against federal health care programs.
The investigation was jointly handled by the U.S. Attorney’s Office for the Southern District of Ohio; the Justice Department’s Civil Division, Commercial Litigation Branch and the Department of Health and Human Services Office of the Inspector General.
The case is captioned United States ex rel. Suleiman Refaei v. Vantage Oncology, et al., Case No. 1:10-cv-833 (S.D. Ohio). The claims resolved by the settlement are allegations only, and there has been no determination of liability.
United States V. Lacey Jane Hollinger and Elaine Monique Zavala-CharresRead the Press Release
Indictment Filed In Scheme to Defraud The IRS
SYRACUSE, NEW YORK – United States Attorney Richard S. Hartunian announced today that an Indictment was filed in United States District Court for the Northern District of New York charging Lacey Jane Hollinger, 27, of Massena, New York and Elaine Monique Zavala-Charres, 33, of Phoenix, Arizona with seven (7) counts of operating a mail fraud scheme to defraud the Internal Revenue Service and two (2) counts aggravated identity theft. The mail fraud charges carry a maximum sentence of up to twenty (20) years imprisonment, a period of supervised release and a fine of up to $250,000.00. The aggravated identity theft charges carry a sentence of two years imprisonment.
The indictment alleges that Hollinger and Zavala-Charres operated the scheme to defraud the IRS from January 2012 to May 2013 in St. Lawrence County, New York and elsewhere. The scheme involved using personal identification information acquired through fraud used to file tax returns with false income levels to generate fraudulent refunds. The scheme involved the submission of over $500,000.00 in fraudulent tax returns to IRS in tax years 2011 and 2012, primarily in New York and Arizona.
The case was investigated by IRS Criminal Investigations, Syracuse, New York Office.
The charges in the indictment are mere allegations and the defendants are presumed innocent until and unless proven guilty in a court of law.
Two men indicted for conspiracy to distribute methamphetamine and heroinRead the Press Release
Anchorage, Alaska - U.S. Attorney Karen L. Loeffler announced today that two men have been indicted by a federal grand jury on charges that they conspired to distribute large quantities of methamphetamine and heroin.
Branden Lee Anastasio, 24, of Anchorage, Alaska, and Ernie Benny Juarez, Jr., 34, of Stockton, California, were named in both counts of the two-count indictment. The first count charges Anastasio and Juarez with conspiring to distribute and to possess with the intent to distribute 50 grams or more of actual methamphetamine and 100 grams or more of heroin. The second charges both men with actually possessing the narcotics with the intent to distribute them to others.
Assistant U.S. Attorney Stephanie Courter, who presented the case to the grand jury, indicated that both men face a ten-year mandatory minimum sentence on the methamphetamine charges, with a maximum sentence of up to life in prison. The law also provides for a fine of up to $10 million dollars. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offense and the prior criminal history of the defendant.The United States Postal Inspection Service led the investigation that resulted in the indictment in this case.
An indictment is only a charge and is not evidence of guilt. A defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
Two New York Doctors Admit Taking Bribes in Test-Referrals Scheme with New Jersey Clinical LabRead the Press Release
NEWARK, N.J. – Two doctors with a practice in New York admitted today to accepting bribes in exchange for test referrals as part of a long-running and elaborate scheme operated by Biodiagnostic Laboratory Services LLC (BLS), of Parsippany, N.J., its president and numerous associates, New Jersey U.S. Attorney Paul J. Fishman announced.
Richard Goldberg, 60, of Weston, Conn., and Gary Leeds, 60, of Greenwich, Conn., each pleaded guilty today before U.S. District Judge Stanley R. Chesler in Newark federal court to one count of accepting bribes.
Including Goldberg and Leeds, 20 people have now pleaded guilty in connection with the bribery scheme, which its organizers have admitted involved millions of dollars in bribes and resulted in more than $100 million in payments to BLS from Medicare and various private insurance companies.
According to documents filed in this and related cases and statements made in court:
During today’s guilty plea proceedings, Goldberg and Leeds admitted to accepting thousands of dollars per month in cash between September 2010 and April 2013 in return for referring patient blood specimens to BLS. The pair acknowledged they each accepted more than $100,000 in cash from BLS in exchange for referring at least a combined $1.8 million in lab business from their joint practice, Family Medical Group of Manhattan.
As part of their guilty pleas, Goldberg and Leeds each agreed to forfeit $108,000.
On April 9, 2013, federal agents arrested David Nicoll, 39, of Mountain Lakes, N.J., Scott Nicoll, 33, of Wayne, N.J., a senior BLS employee and David Nicoll’s brother, and Craig Nordman, 35, of Whippany, N.J., a BLS employee and the CEO of Advantech Sales LLC – one of several entities used by BLS to make illegal payments. They were charged by federal complaint with the bribery conspiracy, along with the BLS company and Frank Santangelo, 44, of Boonton, N.J. In June 2013, David and Scott Nicoll, Nordman and four other associates of BLS pleaded guilty to charges related to their involvement. Santangelo, a doctor, pleaded guilty in August 2013 to charges relating to his role in the scheme.
So far, 11 employees or associates of BLS, and 9 physicians have pleaded guilty to their roles in the bribery scheme. The investigation has recovered more than $6.5 million to date through forfeiture.
The bribery count to which Goldberg and Leeds pleaded guilty is punishable by a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing for both defendants is scheduled for April 1, 2014.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford; U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Thomas O’Donnell; IRS–Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen; and inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates, with the ongoing investigation leading to today’s guilty pleas.
The government is represented by Assistant U.S. Attorney Joseph Minish, Senior Litigation Counsel Andrew Leven and Jacob T. Elberg, Chief of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark, as well as Assistant U.S. Attorney Barbara Ward of the office’s Asset Forfeiture and Money Laundering Unit.
U.S. Attorney Paul J. Fishman reorganized the health care fraud practice at the New Jersey U.S. Attorney’s Office shortly after taking office, including creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $500 million in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.
13-445Defense counsel:
Richard Goldberg: Aidan P. O’Connor Esq., Hackensack, N.J.
Gary Leeds: E. Scott Morvillo Esq., New YorkGoldberg, Richard Information
Leeds, Gary InformationTwo Men Who Operated Credit Card Fraud Rings Based in San Gabriel Valley Sentenced to Federal PrisonRead the Press Release
LOS ANGELES – A San Gabriel Valley man involved in credit card fraud was sentenced this morning to 87 months in federal prison for heading a credit card fraud ring that used stolen credit card numbers from around the world to buy hundreds of thousands of dollars of luxury goods, cosmetics, electronics and other merchandise at retail stores.
With the 7¼-year sentence, Zhanghang Wu (吳章航) becomes the second man this month sentenced to prison in federal court in Los Angeles for operating a fraudulent credit card ring.
Wu, 38, who at the time of the offenses was residing in Alhambra, was sentenced by United States District Judge John A. Kronstadt. Wu, who was also known as "Leo Han," pleaded guilty in December 2012 to conspiracy and credit card fraud.
The second credit card scammer, Xiaoliang Chen (陳曉亮), 27, of Monterey Park, was sentenced on November 4 to 51 months in federal prison for leading a similar operation that used stolen credit card numbers and counterfeit cards to bilk financial institutions from around the world.
The operations involving Wu and Chen involved losses that are estimated to be approximately $1.5 million, with Wu being responsible for just over $1 million of those losses.
Wu and Chen each led rings that received credit card numbers that had been stolen from bank customers around the world. That stolen information was used to manufacture counterfeit credit cards that bore the names of “runners” -- co-conspirators who went to retails stores, including Nordstrom, Macy’s, Apple, and Abercrombie & Fitch -- who used the fake cards to make fraudulent transactions. After the runners purchased items with the counterfeit credit cards, they either returned the goods for credit, or the goods were sold to other parties.
An investigation into fraudulent credit card use in the San Gabriel Valley led by the United States Secret Service generated information that Wu and Chen may be involved in organized fraud rings. Wu had earlier been associated with a credit card fraud operation that had been uncovered during an investigation by Chinese authorities. In March 2012, Secret Service agents searched the homes of Wu and Chen, where they discovered machines for making credit cards and computers containing credit card information.
In July 2012, Secret Service agents arrested Wu in Las Vegas, Nevada, where he had fled after the search of his residence and where he continued to engage in credit card fraud. Wu had been living in casino hotels for several weeks, and at the time of his arrest was in the process of sending a group of runners to Chicago to continue the scheme.
Chen was arrested in August 2012, also in Las Vegas, by Secret Service agents.
During the course of the investigation, the Secret Service received information from the Chinese Ministry of Public Security, Economic Crimes Investigation Division, about their investigation of credit card fraud in China.
Joseph Beaty, the special agent in charge of the United States Secret Service, Los Angeles District, acknowledged the cooperation provided by the Chinese Ministry of Public Security and the People’s Republic of China. Without the assistance of the Chinese authorities, the complete investigation and prosecution of this case would not have been possible, Beaty said.
This case is the product of an investigation by the U.S. Secret Service, which also received assistance from the United States Postal Inspection Service.
Release No. 13-133a
Two Louisville Men Charged in String of Armed Robberies Federal Charges Result from “Project Recoil”Read the Press Release
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LOUISVILLE, Ky. – David J. Hale, United States Attorney for the Western District of Kentucky, announced the federal indictment this week, of two Louisville men, one a convicted felon, charged with robbing nine businesses located in Jefferson County, Kentucky. These federal charges stem from “Project Recoil,” the on-going partnership of multiple Jefferson County, Kentucky law enforcement agencies, developed by U.S. Attorney Hale, Jefferson County Commonwealth’s Attorney Tom Wine, Jefferson County Attorney Mike O’Connell, LMPD Chief Steve Conrad, ATF Special Agent in Charge Stuart Lowrey, FBI Special Agent in Charge Perrye Turner, and United States Marshal James Clark to maximize penalties for the most violent offenders and to reduce violent crime in our community.
The eighteen-count indictment charges Xavier Demetrius Porter, age 39, with nine counts of obstructing interstate commerce through robbery, eight counts of brandishing a firearm during a robbery, and one count of being a felon in possession of a firearm. Dmitry Kontarovich, age 31, is charged with three counts of obstructing interstate commerce through aiding and abetting a robbery.
Porter is charged with robbing Spinelli’s Pizza located at 2905 Goose Creek Road on March 5, 2013, the Subway located at 3503 South Hurstbourne Parkway on March 7, 2013, the Subway located at 8056 New LaGrange Road on March 17, 2013, Circle K located at 4600 Wattbourne Lane on April 15, 2013, the White Castle located at 3705 Bardstown Road on April 16, 2013, and the Thornton’s located at 3909 Taylorsville Road on April 17, 2013. Porter and Kontarovich are charged with robbing the Subway located at 4214 Bishop Lane on April 17, 2013, JC’s Cigarette Outlet located at 6620 Six Mile Lane on April 18, 2013, and Adam and Eve Store located at 3862 South Hurstbourne Parkway on April 18, 2013. The federal robbery charges are brought pursuant to the Hobb’s Act, which criminalizes robberies that affect interstate commerce.
According to court records, on May 30, 1996, Porter was convicted of three counts of armed robbery in Dougherty County Superior Court located in Georgia.
If convicted at trial, Porter faces a mandatory minimum sentence of 197 years in prison and a maximum potential penalty of life in prison, a fine of $4,5000,000 and up to and including a life term of supervised release. Kontarovich faces a maximum potential penalty of 60 years in prison, a fine of $750,000 and a period of supervised release.
This case is being prosecuted by Assistant United States Attorney Jo E. Lawless and is being investigated by the Louisville Metro Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).
The indictment of a person by a Grand Jury is an accusation only and that person is presumed innocent until and unless proven guilty.
Two Executives Indicted for Roles in Fixing Prices<br /> on Automobile Parts Sold to Toyota<br /> to Be Installed in U.S. CarsRead the Press Release
A Cleveland federal grand jury returned an indictment against two executives of a Japanese automotive supplier for their roles in an international conspiracy to fix prices of automotive anti-vibration rubber parts sold to Toyota and installed in U.S. cars, the Department of Justice announced today.
The indictment, filed yesterday in U.S. District Court for the Northern District of Ohio in Toledo, charges Masao Hayashi and Kenya Nonoyama, both Japanese nationals, with participating in a conspiracy to suppress and eliminate competition in the automotive parts industry by agreeing to allocate the supply of, to rig bids for and to fix, raise and maintain the prices of anti-vibration rubber parts sold to Toyota Motor Corp., Toyota Motor Engineering & Manufacturing North America Inc. and affiliated companies (collectively Toyota) for installation in automobiles manufactured and sold in the United States and elsewhere.
Automotive anti-vibration rubber products are comprised primarily of rubber and metal, and include engine mounts and suspension bushings. They are installed in automobiles for the purpose of reducing road and engine vibration.
The indictment alleges, among other things, that from as early as March 1996 until at least December 2008, Hayashi and Nonoyama and their co-conspirators conducted meetings and communications in Japan to reach collusive agreements. The indictment alleges that the conspiracy involved agreements affecting the Toyota Corolla, Avalon, Tacoma, Camry, Tundra, Sequoia, Rav4, Sienna, Venza and Highlander.
“Today’s indictment reaffirms the Antitrust Division’s commitment to hold executives accountable for actions that corrupt the competitive landscape and harm consumers,” said Renata B. Hesse, Deputy Assistant Attorney General for the Department of Justice’s Antitrust Division. “The Antitrust Division continues to work closely with its fellow competition enforcers abroad to ensure that there are no safe harbors for executives who engage in international cartel crimes.”
Hayashi and Nonoyama are charged with a violation of the Sherman Act, which carries a maximum penalty of 10 years in prison and a $1 million criminal fine for individuals. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
Including Hayashi and Nonoyama, 21 companies and 26 executives have been charged in the Justice Department’s ongoing investigation into the automotive parts industry. To date, more than $1.6 billion in criminal fines have been obtained and seventeen of the charged executives have been sentenced to serve time in U.S. prisons or have entered into plea agreements calling for significant prison sentences.
The charges are the result of an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the automotive parts industry, which is being conducted by each of the Antitrust Division’s criminal enforcement sections and the FBI. Today’s charges were brought by the Antitrust Division’s Chicago Office and the FBI’s Cleveland Field Office, with the assistance of the FBI headquarters’ International Corruption Unit and the U.S. Attorney’s Office for the Northern District of Ohio. Anyone with information on price fixing, bid rigging and other anticompetitive conduct related to other products in the automotive parts industry should contact the Antitrust Division’s Citizen Complaint Center at (888) 647–3258, visit www.justice.gov/atr/contact/newcase.html or call the FBI’s Cleveland Field Office at (216) 522-1400.Two Executives Indicted for Roles in Fixing Prices on Auto Parts Sold to ToyotaRead the Press Release
A Cleveland federal grand jury returned an indictment against two executives of a Japanese automotive supplier for their roles in an international conspiracy to fix prices of automotive anti-vibration rubber parts sold to Toyota and installed in U.S. cars, the Department of Justice announced today.
The indictment, filed yesterday in U.S. District Court for the Northern District of Ohio in Toledo, charges Masao Hayashi and Kenya Nonoyama, both Japanese nationals, with participating in a conspiracy to suppress and eliminate competition in the automotive parts industry by agreeing to allocate the supply of, to rig bids for and to fix, raise and maintain the prices of anti-vibration rubber parts sold to Toyota Motor Corp., Toyota Motor Engineering & Manufacturing North America Inc. and affiliated companies (collectively Toyota) for installation in automobiles manufactured and sold in the United States and elsewhere.
Automotive anti-vibration rubber products are comprised primarily of rubber and metal, and include engine mounts and suspension bushings. They are installed in automobiles for the purpose of reducing road and engine vibration.
The indictment alleges, among other things, that from as early as March 1996 until at least December 2008, Hayashi and Nonoyama and their co-conspirators conducted meetings and communications in Japan to reach collusive agreements. The indictment alleges that the conspiracy involved agreements affecting the Toyota Corolla, Avalon, Tacoma, Camry, Tundra, Sequoia, Rav4, Sienna, Venza and Highlander.
“Today’s indictment reaffirms the Antitrust Division’s commitment to hold executives accountable for actions that corrupt the competitive landscape and harm consumers,” said Renata B. Hesse, Deputy Assistant Attorney General for the Department of Justice’s Antitrust Division. “The Antitrust Division continues to work closely with its fellow competition enforcers abroad to ensure that there are no safe harbors for executives who engage in international cartel crimes.”
Hayashi and Nonoyama are charged with a violation of the Sherman Act, which carries a maximum penalty of 10 years in prison and a $1 million criminal fine for individuals. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
Including Hayashi and Nonoyama, 21 companies and 26 executives have been charged in the Justice Department’s ongoing investigation into the automotive parts industry. To date, more than $1.6 billion in criminal fines have been obtained and seventeen of the charged executives have been sentenced to serve time in U.S. prisons or have entered into plea agreements calling for significant prison sentences.
The charges are the result of an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the automotive parts industry, which is being conducted by each of the Antitrust Division’s criminal enforcement sections and the FBI. Today’s charges were brought by the Antitrust Division’s Chicago Office and the FBI’s Cleveland Field Office, with the assistance of the FBI headquarters’ International Corruption Unit and the U.S. Attorney’s Office for the Northern District of Ohio. Anyone with information on price fixing, bid rigging and other anticompetitive conduct related to other products in the automotive parts industry should contact the Antitrust Division’s Citizen Complaint Center at (888) 647–3258, visit www.justice.gov/atr/contact/newcase.html or call the FBI’s Cleveland Field Office at (216) 522-1400.