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21 November 2013
Four People Indicted for Defrauding Cleveland Heights Charter School Out of $400,000Read the Press Release
Four people were indicted on charges of wire fraud, mail fraud and conspiracy to launder money for their roles in a scheme to defraud a Cleveland Heights charter school out of more than $400,000, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
Indicted are: Joel B. Friedman, 65, of Mayfield Heights; Jeffrey A. Pope, 46, of Bowie, Maryland; Marianne Stefanik, 64, of Parma, and Virgil B. Holley, 51, of Cleveland Heights.
“These defendants are accused of taking money intended for students and using it to enrich themselves,” Dettelbach said.
“Joel Friedman and his co-conspirators violated the trust of taxpayers and the students of Greater Heights Academy,” said Kathy Enstrom Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office. “Running a charter school does not give you a license to steal.”
Friedman served as chairman of Greater Heights Academy, a charter school located in Cleveland Heights. Stefanik worked as Friedman’s secretary at the school. Pope operated a consulting business in Maryland known as R&D International. Holley worked as Friedman’s employee at GHA in various capacities, including starting Holley Enterprises to provide security at GHA.
Around 2006, Friedman approached Pope with a proposition for Pope to make extra money. Friedman and Stefanik provided Pope with legitimate previous orders to use as templates, which he then used to create fraudulent invoices on R&D letterhead. Stefanik then processed the payments, knowing the invoices were false. Friedman then called Pope and instructed him on how much of the money he could keep and how much he should return to Friedman, according to the indictment.
The defendants caused a loss of approximately $287,269 to GHA and its students as a result of the scheme, $14,000 of which was retained by Pope, according to the indictment.
Beginning in 2006, Holley, at Friedman’s suggestion, began submitting false invoices to GHA for work that Holley Enterprises did not perform. Upon receipt of a check from GHA, Friedman would tell Holley whether the payment was for a legitimate invoice or whether the proceeds were to be diverted to Friedman personally or an entity Friedman controlled, according to the indictment.
As a result of this scheme, the defendants caused a loss to GHA and its students of approximately $117,000, according to the indictment.
This case is being prosecuted by Assistant United States Attorney Robert J. Patton. The case was investigated by the Federal Bureau of Investigation and Internal Revenue Service – Criminal Investigations.
If convicted, the defendant’s sentence will be determined by the court after consideration of the Federal Sentencing Guidelines which depend upon a number of factors unique to each case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the unique characteristics of the violation. In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
An indictment is only a charge 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.
Four Commercial Fishermen Indicted in Maryland for Illegal Harvest and Interstate Sale of Striped Bass from Chesapeake BayRead the Press Release
Four commercial fishermen and one company were indicted yesterday by a federal grand jury in Baltimore for a criminal conspiracy involving the illegal harvesting and interstate sale of striped bass on the Chesapeake Bay, announced Robert G. Dreher, Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division, and Rod J. Rosenstein, U.S. Attorney for the District of Maryland.
According to court documents, Michael D. Hayden Jr., his company, William J. Lednum, Kent Sadler and Daniel Murphy engaged in a multi-year conspiracy during which time they harvested tens of thousands of pounds of striped bass on the Chesapeake Bay in violation of Maryland fishing regulations, falsified documents filed with the State of Maryland, and then transported and sold those poached fish in interstate commerce. In addition, after the investigation of these crimes began, it is alleged that Hayden attempted to manipulate some witnesses’ testimony while trying to outright prevent the testimony and cooperation of others. In addition, it is alleged that in at least one incident, Hayden threatened to retaliate against another potential witness he believed to be cooperating with investigators. Hayden was arrested on Sept. 17, 2013, having been charged in a criminal complaint with several counts of witness intimidation and retaliation.
The 26-count indictment charges the defendants with conspiracy, and Lacey Act violations. These charges carry possible terms of incarceration of five years. In addition, the witness intimidation/retaliation charges against Mr. Hayden each carry a maximum-term of 20 years in prison.
An indictment is a charging document and all defendants are innocent until proven guilty.
This case is being investigated by criminal investigators with the Maryland Department of Natural Resources, Natural Resources Police and Special Agents from the U.S. Fish and Wildlife Service. The case is being jointly prosecuted by the United States Attorney’s Office for the District of Maryland and the Environmental Crimes Section of the United States Department of Justice.
Fort Thompson Man Sentenced for Felon in Possession of FirearmRead the Press Release
United States Attorney Brendan V. Johnson announced that a Fort Thompson, South Dakota, man convicted of Felon in Possession of Firearm was sentenced on November 20, 2013, by U.S. District Judge Roberto A. Lange.
Bryant Ross, age 39, was sentenced to 9 months of imprisonment, 18 months of supervised release, and a $100 special assessment to the Federal Crime Victims Fund.
Ross was indicted for the above charge by a federal grand jury on July 16, 2013. He pled guilty on August 29, 2013.
The conviction stems from an incident occurring on February 23, 2013, when a Bureau of Indian Affairs Officer made contact with Ross in the Old Fort campground area off of Highway 47. At this time, it was learned that Ross had an active tribal warrant. During his arrest on the tribal warrant, two firearms were discovered in Ross’ possession.
In 1998, Ross was convicted of Possession of a Controlled Substance-Meth, which makes him a prohibited person.
The investigation was conducted by the Bureau of Indian Affairs. Assistant U.S. Attorney Meghan N. Dilges prosecuted the case.
Ross was immediately turned over to the custody of the U.S. Marshals Service.
Former Waterbury Detective Pleads Guilty to Obstructing Tax InvestigationRead the Press Release
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Deirdre M. Daly, Acting United States Attorney for the District of Connecticut, today announced that ROBERT LIQUINDOLI, 42, of Waterbury, pleaded guilty yesterday before U.S. Magistrate Judge Joan G. Margolis in New Haven to one count of obstruction of the administration of the Internal Revenue laws.
According to court documents and statements made in court, in December 2011, the Internal Revenue Service was conducting an investigation of Thomas Thorndike, a Waterbury tax preparer. In connection with that investigation, the IRS requested to interview LIQUINDOLI, whose 2007 and 2008 tax returns had been prepared by Thorndike. After being contacted by the IRS, LIQUINDOLI sought to obstruct the IRS’s investigation by obtaining false documents that he intended to present to the IRS in support of deductions he claimed on his tax returns in 2007 and 2008. Between December 2011 and February 2012, LIQUINDOLI engaged in an effort to obtain false documents in support of false items on these tax returns, and lied to the IRS concerning the extent to which he possessed original and legitimate documents to support the deductions on his tax returns. LIQUINDOLI also falsely denied that he had attempted to obtain false documents to support those deductions.
LIQUINDOLI was formerly employed as a detective with the Waterbury Police Department.
LIQUINDOLI is scheduled to be sentenced by U.S. District Judge Janet Bond Arterton on February 12, 2014, at which time he faces a maximum term of imprisonment of three years.
LIQUINDOLI has been released on a $200,000 bond since his arrest on December 7, 2012.
Thorndike pleaded guilty to tax offenses in October 2012 and, on March 12, 2013, was sentenced to 72 months of imprisonment.
This case is being investigated by the Federal Bureau of Investigation and the Internal Revenue Service – Criminal Investigation. The case is being prosecuted by Assistant U.S. Attorneys Christopher Mattei and Eric Glover.
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(203) 821-3722 [email protected]Former President of Union Sentenced to 48 Months of Imprisonment for Accepting Kickbacks and Tax EvasionRead the Press Release
Earlier today, in federal court in Brooklyn, New York, Hector Lopez, the former president of the Metal Polishers Union (Local 8A-28A) (the “Union”) and Chairman of the Board of Trustees of the Local 8A-28A welfare fund (the “Fund”), was sentenced to a term of imprisonment of 48 months following his convictions for conspiracy to commit mail and wire fraud, and tax evasion. In addition, Lopez was ordered to pay $800,371 in restitution and forfeit an additional $371, 517 to the federal government.
The sentence was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; Cheryl Garcia, Acting Special Agent-in-Charge, United States Department of Labor (DOL), Office of Inspector General; Andriana Vamvakas, District Director, Department of Labor, Office of Labor-Management Standards, New York; and Toni Weirauch, Special Agent-in-Charge, Internal Revenue Service, Criminal Investigation, New York.
“The hard-working members of Local 8A-28A trusted Hector Lopez to safeguard their welfare fund. Instead of representing their best interests, Lopez corrupted his leadership position and abused his authority to the tune of over $1 million. The defendant’s corruption and fraud have now earned him a new home in federal prison,” stated U.S. Attorney Lynch. “Today’s sentencing sends a message to other union officials that they will be held accountable if they abuse their position of trust.” Ms. Lynch expressed her appreciation to the New York Regional Office of the United States Department of Labor, Employee Benefits Security Administration, for its assistance on this case.
On April 9, 2013, Lopez pleaded guilty to conspiracy to commit mail and wire fraud, and tax evasion, both in connection with a scheme to defraud the Fund of over $1 million. As detailed in the indictment, the defendant defrauded the Fund in multiple ways:
(1) accepting over $740,000 in kickbacks from the third-party administrator of the Fund in exchange for continuing to employ the administrator,
(2) accepting kickbacks from an employer trustee of the Fund (“the employer trustee”) in exchange for authorizing the Fund to pay fraudulent invoices for a union hall renovation performed by a company owned by the employer trustee, and
(3) accepting a kickback from the employer trustee in exchange for rigging the bidding process to ensure that a sprinkler installation job was awarded to a company controlled by the employer trustee.
Further, the defendant committed tax evasion by failing to report over $300,000 in income from his fraudulent schemes, resulting in a tax loss to the United States of over $100,000.
Finally, as also charged in the indictment, the defendant criminally violated the Taft-Hartley Act by living rent-free with his family in a New Jersey home owned by the employer trustee, whose company had a collective bargaining agreement with the Union, and illegally structured over $82,000 in cash deposits at local banks to evade federal currency reporting requirements.
The sentence was imposed by United States District Judge Allyne R. Ross.
The government’s case is being prosecuted by Assistant United States Attorneys Charles Kleinberg and Marisa Megur Seifan.
The Defendant:
HECTOR LOPEZ
Oakland, New Jersey
Age: 55Former NJ Transit Official Charged with Agreeing to Accept $8,000 BribeRead the Press Release
NEWARK, N.J. – A former New Jersey Transit official appeared in court today on charges she agreed to accept an $8,000 bribe in connection with a snow removal contract, U.S. Attorney Paul J. Fishman announced.
Donna Schiereck, 56, of Jackson, N.J., is charged by complaint with one count of agreeing to accept a bribe. Schiereck appeared this afternoon before U.S. Magistrate Judge James B. Clark III in Newark federal court for an initial appearance.
According to the complaint unsealed today:
From September 2012 to December 2012, Schiereck was a supervisor at NJ Transit. During that same time period, Schiereck agreed to accept $8,000 in exchange for her assistance with securing a snow removal contract for a Lakewood, N.J., company.
The charge is punishable by a maximum potential penalty of 10 years in prison and a $250,000 fine.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford; and the N.J. State Police, under the direction of Col. Joseph R. Fuentes, superintendent, for the investigation leading to today’s charge. He thanked the N.J. Attorney General’s Office, under the direction of Acting Attorney General John Hoffman, and Elie Honig, director of the N.J. Division of Criminal Justice, for their roles in this investigation.
The government is represented by Assistant U.S. Attorney Amy Luria of the U.S. Attorney’s Office Special Prosecutions Division in Newark, and Special Assistant U.S. Attorney Michael A. Monahan, the Deputy Chief of the Corruption Bureau, Division of Criminal Justice, in the New Jersey Office of the Attorney General.
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Defense counsel: David A. Schwartz, Eatontown, N.J., for Donna Schiereck.
Schiereck, Donna Complaint
Former Federal Agent Charged with Embezzlement and Thirty Counts of Making False StatementsRead the Press Release
SAN FRANCISCO – A federal grand jury in Seattle indicted former ATF Special Agent and Group Supervisor James Contreras today with embezzlement of public funds and making false statements, United States Attorney Melinda Haag and Special Agent in Charge Frank J. Cabibi, United States Department of Justice, Office of the Inspector General, Los Angeles Field Office, announced.
The indictment alleges that during the time Contreras was working as an agent and supervisor at the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) office in Seattle, he embezzled money from a cash fund for which he was responsible and prepared and submitted falsified reports when accounting for the money in the fund.
According to the indictment, Contreras, 51, of Maple Valley, Washington, was a Special Agent and Group Supervisor with ATF in Seattle. He was also responsible for an Agent Cashier Fund, a cash fund that was to be used for investigative purposes such as purchasing evidence or making subsistence payments to confidential informants working with the ATF. Contreras was responsible for reviewing and approving requests by Special Agents under his supervision to use money from the fund for authorized purposes and for requesting replenishment of the fund from ATF Headquarters on a monthly basis.
The indictment alleges that between March 10, 2010 and April 30, 2012, Contreras knowingly embezzled and converted to his own use money from the Agent Cashier Fund. Specifically, the indictment states that in connection with thirty alleged payments from the fund, Contreras falsified required records and forms by writing what appeared to be the signatures of agents who were supposedly requesting and receiving money from the fund from Contreras, and by signing forms falsely representing that payments were being made to informants working for the ATF on specific investigations. In addition to the embezzlement count, the indictment also charges Contreras with thirty counts of making false statements in connection with records and reports accounting for the money in the fund.
The ATF is a component of the United States Department of Justice. The United States Attorney’s Office in San Francisco, California, is investigating and prosecuting this case with the San Francisco Bay Area office of the United States Department of Justice, Office of Inspector General, Investigations Division. The United States Attorney’s Office for the Western District of Washington is recused from this matter.
Contreras will make his initial appearance before the assigned U.S. District Court Judge in Seattle in December.
The maximum statutory penalty for embezzlement in violation of 18 U.S.C. § 641 is ten years imprisonment, a $250,000 fine, and restitution. The maximum penalty for each count of making a false statement in violation of 18 U.S.C. § 1001(a)(3) is five years imprisonment and a $250,000 fine. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Susan Badger is the Assistant United States Attorney who is prosecuting the case with the assistance of Rosario Calderon. The prosecution is the result of a 1½ year investigation by the United States Department of Justice, Office of Inspector General, Investigations Division and the ATF Office of Professional Responsibility and Security Operations.
Please note, an indictment contains only allegations against an individual and, as with all defendants, James Contreras must be presumed innocent unless and until proven guilty.
(Contreras indictment )
Former Energy Director for City of Rockford Pleads Guilty to FraudRead the Press Release
ROCKFORD — The former Energy Director for the City of Rockford pleaded guilty today in federal court, before U.S. District Judge Frederick J. Kapala, to one count of mail fraud. MARK E. BIXBY, 58, of Rockton, Ill. admitted that between December 2006 and March 2010 he defrauded a heating contractor and window contractor, both of whom did work for the City’s Energy Division, out of at least $53,101.33 in funds and benefits.
According to the written plea agreement, Bixby, as the Energy Director, managed the City of Rockford’s Energy Division. The Energy Division operated the Illinois Home Weatherization Assistance Program in Winnebago and Boone counties. The purpose of the weatherization program was to help low-income residents save energy and money by providing services that included repairing and replacing heating systems, windows, and doors.
In court today, Bixby admitted that he defrauded a heating contractor and a window contractor, both of whom did work under the weatherization program, by causing them to provide funds and benefits to him through false representations and pretenses. According to the plea agreement, the funds and benefits Bixby obtained from the two contractors included the following: (1) use of a new, 2007, two-door, red, convertible Pontiac Solstice; (2) a total of $18,440 in donations to “charities,” which were deposited into bank accounts controlled by Bixby and a family member, and which were used to pay their personal expenses; (3) $2,980 for the “sale” of cemetery plots by Bixby to the heating contractor, for which Bixby never turned over the titles or deeds to the heating contractor; and (4) a $2,000 “loan” from the window contractor, which Bixby never repaid.
Bixby is scheduled to be sentenced on March 3, 2014, at 2:30 p.m. Mail fraud carries a maximum penalty of 20 years in prison, a maximum fine of $250,000, or an alternate fine totaling twice the loss or twice the gain derived from the offense, whichever is greater, and restitution. The actual sentence will be determined by the United States District Court, guided by the advisory United States Sentencing Guidelines.
The guilty plea was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation. The Winnebago County State’s Attorney’s Office and the Rockford Police Department assisted in the investigation.
The guilty plea was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation. The Winnebago County State’s Attorney’s Office and the Rockford Police Department assisted in the investigation.
Plea Agreement
Former Crestwood Water Officials Sentenced for Concealing Village’s Use of Well in Drinking Water SupplyRead the Press Release
CHICAGO — Two former water department officials for the southwest suburban Village of Crestwood were each sentenced today to two years’ probation for lying repeatedly to environmental regulators for more than 20 years about using a water well to supplement the village’s drinking water supply. The defendants, FRANK SCACCIA, a retired certified water operator, and THERESA NEUBAUER, former water department clerk and supervisor and, later, Crestwood’s police chief, effectively thwarted the government from implementing the federal Safe Drinking Water Act’s notice and testing requirements designed to ensure the safety of municipal water supplies.
In addition to probation, Scaccia, 61, of Crestwood, was ordered to serve the first six months in home confinement. He pleaded guilty on April 11 this year to making false statements. Neubauer, 56, of Crestwood, was fined $2,000 and ordered to perform 200 hours of community service. She was convicted by a jury on April 29 of 11 counts of making false statements after a week-long trial.
U.S. District Judge Joan Gottschall cited Scaccia’s serious health condition in imposing his sentence. She said the case involved a “breach of the public trust for years,” which had as its purpose “the perpetual re-election of the mayor.”
Both defendants concealed the village’s use of its well from the government and the citizens of Crestwood to save money. By doing so, the village didn’t properly monitor for contaminants that could have been introduced to Crestwood’s water supply, avoided having to fix its leaking water distribution system, or paying the neighboring Village of Alsip more money for water drawn from Lake Michigan.
“Providing safe drinking water is one of the most fundamental and important functions of local government. Those who operate municipal water systems are now on notice that defeating the Safe Drinking Water Act in exchange for selfish political and personal objectives is an extremely serious crime that will be dealt with through vigorous federal prosecution,” said Zachary T. Fardon, United States Attorney for the Northern District of Illinois.
“Public servants swear an oath to protect the citizens of their community,” said Randall Ashe, Special Agent-in-Charge of the U.S. Environmental Protection Agency’s Criminal Enforcement Program in Illinois. “Rather than protecting the citizens of Crestwood, Scaccia and Neubauer engaged in a very lengthy scheme to deny Crestwood citizens their basic right to know the source of their drinking water, and to deceive them into thinking that their drinking water was properly tested for dangerous contaminants. As a result, Crestwood residents will never fully know what contaminants from the well they ingested. This case demonstrates that anyone who violates the public trust to assure the distribution of safe, potable and properly tested drinking water will face the consequences in court.”
According to court records and the evidence at trial, since at least 1973, the substantial majority of Crestwood’s drinking water came from Lake Michigan and was purchased from neighboring Alsip, which, in turn, had purchased the water from the City of Chicago after it was treated and tested pursuant to state and federal environmental regulations. Since 1982, Crestwood regularly supplemented the Lake Michigan water with water drawn from an underground aquifer through a well located on Playfield Drive, known as Well #1. Crestwood found it necessary to supplement the Lake Michigan water with water pumped from Well #1, in part, because of substantial leakage in its water distribution system, which Crestwood officials failed to adequately repair.
Between 1987 and 2008, Scaccia, Neubauer were among of a small circle of trusted village employees ― directed by Crestwood’s longtime former mayor, Chester Stranczek, who was not charged ― who concealed that Crestwood was supplementing its Lake Michigan water with water drawn from Well #1. Scaccia was responsible for ensuring that water distributed by Crestwood met all federal and state regulations, including filing annual Consumer Confidence Reports (CCRs); obtaining the raw data that was used to complete the Monthly Operation and Chemical Analysis Reports (MORs); transmitting raw data for the MORs to Neubauer so that she could complete them and submit them to the IEPA; and serving as a point of contact for IEPA with respect to drinking water compliance issues. Neubauer prepared the CCRs for signature by Stranczek, arranged for the CCRs to be issued to Crestwood’s water customers, prepared MORs for distribution to the IEPA based upon information obtained from Scaccia, and distributed completed MORs to IEPA. All the while, Neubauer and Scaccia knew that water pumped from Well #1 was being distributed to the village’s water customers. Neubauer also helped prepare and submit various false reports stating that Well #1 was on standby status and that the sole source of Crestwood’s drinking water was Lake Michigan water purchased from Alsip.
Under the federal Safe Drinking Water Act of 1974, the U.S. EPA created regulations to ensure the safety of drinking water distributed by public water systems by requiring testing and establishing maximum contaminant levels for various contaminants. The EPA delegated the primary responsibility for enforcement to the Illinois EPA, which established its own state regulations that implemented the federal statute and regulations.
Because the City of Chicago tested and treated Lake Michigan water for contaminants, Crestwood, like other municipalities that purchased water directly or indirectly from Chicago, was excused from monitoring its Lake Michigan water for certain contaminants. Due to Crestwood’s use of Well #1, an unmonitored and unreported water source, the village should have periodically tested its drinking water for organic contaminants, inorganic contaminants, and radiological contaminants beginning in the 1970s.
Crestwood was also required to submit an Annual Water Use Audit form, known as an LMO-2 form, to the Illinois Department of Natural Resources and, previously, to the Illinois Department of Transportation. This form required Crestwood to report the amount of water it had drawn from Lake Michigan and from Well #1, and to account for the amount of water distributed and lost by its water system annually. From at least 1982 to 2008, Crestwood officials filed LMO-2 forms that neither reported the amount of water drawn from Well #1, nor accurately accounted for the amount of water distributed and lost by its water system.
The government was represented by Assistant U.S. Attorneys Erika Csicsila and Timothy Chapman, and Special Assistant U.S. Attorney Crissy Pellegrin, criminal enforcement counsel for the U.S. EPA Region V.
Former CFO of New York Brokerage Firm Admits Stealing $1 Million from His Former EmployerRead the Press Release
TTRENTON, N.J. – The former chief financial officer of the Manhattan-based brokerage firm Needham & Co. today admitted stealing $1 million from his former employer through an elaborate false invoicing scheme, U.S. Attorney Paul J. Fishman announced.
Glen W. Albanese, 42, of Manalapan, N.J., pleaded guilty before U.S. District Judge Peter G. Sheridan in Trenton federal court to an information charging him with conspiring to steal $1 million from Needham & Co. Two of Albanese’s conspirators, Vincent Sarubbi, 43, of Manalapan, N.J., and Eric Siegel, 38, of New York, previously pleaded guilty in connection with their roles in the scheme.
According to documents filed in this case and statements made in court:
From 2000 through 2010, while he was employed as the CFO of Needham & Co., a broker-dealer with headquarters in New York, Albanese stole $1 million from the company through a false invoicing scheme. Albanese induced several vendors of Needham – including Data Source Partners, an information technology services company owned by Sarubbi, and S&R Graphic Company, a printing company where Siegel worked – to submit fraudulent invoices to Needham. Some of the fraudulent invoices charged for services that were never provided, while others inflated the amount due for services that were provided. Albanese approved the fraudulent invoices on behalf of Needham and then directed the vendors to send him the bulk of the illicit proceeds.
The vendors funneled the illicit proceeds to Albanese in a variety of ways. Albanese admitted that he directed Siegel to meet him at predetermined locations in Manhattan with envelopes containing thousands of dollars in cash. He directed both Siegel and Sarubbi to pay his personal expenses directly. Siegel and Sarubbi used the proceeds from the scheme to pay for landscaping and interior decorating at Albanese’s residence, a designer-breed dog and “canine fence,” equestrian equipment, thousands of dollars’ worth of wine and more than $40,000 in flights, hotels and travel expenses.
The conspiracy count to which Albanese pleaded guilty is punishable by a maximum potential penalty of 20 years in prison and a $250,000 fine. As part of the plea, Albanese agreed to pay restitution of $1 million to Needham. Sentencing is scheduled for Feb. 25, 2014.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford with the investigation leading to today’s guilty plea.
The government is represented by Christopher J. Kelly, Chief of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. 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.
13-446Defense counsel: Joseph R. Benfante Esq, New York
Albanese, Glen Information
Former Big Brother Volunteer Sentenced to 5 Years in Federal Prison for Possessing and Distributing Child PornographyRead the Press Release
ROVIDENCE, R.I. – Robert Brown, Jr., 42, formerly of Scituate, a former Big Brother volunteer, was sentenced today to 60 months in federal prison for possessing and distributing child pornography, announced United States Attorney Peter F. Neronha and Vincent B. Lisi, Special Agent in Charge of the Boston Field Office of the FBI.
According to information presented to the court, beginning in September 2009, an FBI agent from the San Diego Division logged in to online file sharing programs often used for the sharing of child pornography. The agent was friended by Brown and was permitted by Brown to access and download his files. On at least three occasions, the FBI agent downloaded files containing images and videos depicting child pornography.
According to information presented to the court, the FBI investigation revealed that Brown was accessing and sharing the files from an Internet address at his former Scituate residence. In May 2010, FBI agents executed a court authorized search warrant at Brown’s residence and seized three laptop computers, 19 hard drives and portable digital storage memory cards, computer disks and thumb drives, a web camera and a digital camera.
A forensic examination of the items seized revealed approximately 13,000 images and 370 videos depicting child pornography. The National Center for Missing and Exploited Children identified 2,297 images and 32 videos containing images of known children who were identified in 80 series depicting child pornography.
At sentencing, U.S. District Court Judge John J. McConnell, Jr., also ordered Brown to pay restitution to victims in the amount of $10,500; pay a fine of $17,500; and to serve five years supervised release upon completion of his prison term. Brown pleaded guilty on August 6, 2013, as charged in a federal indictment returned in December 2012, to three counts of distribution of child pornography and one count of possession of child pornography. No plea agreement was filed in this matter.
Brown was ordered to self-surrender to the U.S. Marshals Service on January 7, 2014, to begin serving his prison sentence.
The case was prosecuted by Assistant U.S. Attorney John P. McAdams.
To assist the media and the public, a glossary of federal judicial terms and procedures is available at http://www.justice.gov/usao/justice101/
Contact: 401-709-5357
[email protected]Former Administrator Pleads Guilty to Embezzling from Jackson County CourtRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that the former court administrator for the Jackson County Circuit Court pleaded guilty in federal court today to a fraud scheme in which the government contends she embezzled nearly $140,000 from the circuit court.
Teresa L. York, 58, of Blue Springs, waived her right to a grand jury and pleaded guilty before U.S. District Judge Howard F. Sachs to a federal information that charges her with mail fraud.
York was appointed as the court administrator for the Jackson County Circuit Court in 2003 and resigned on July 2, 2012, after her embezzlement was discovered.
York admitted that she engaged in a scheme to defraud the court between January 2009 and June 4, 2012, when she was placed on administrative leave. York used court-paid credit cards for her own personal use and purchased gift cards paid for by the court for her own personal use. According to the federal charging document, York also entered into a fraudulent contract for which no services were ever provided and which primarily benefited a person with whom she had a personal relationship. (York does not admit that conduct in today’s plea agreement, but the government reserves the right to present evidence of the contract fraud at her sentencing hearing.)
As a result of York’s fraudulent actions, the government contends the total loss to the court was $139,536, while the intended loss was $142,278. Under the terms of today’s plea agreement, York must pay a $77,778 money judgment to the government in forfeiture, which represents her proceeds from the fraud scheme.
Credit Card Scheme
The Jackson County Circuit Court used credit cards to pay for court business, such as judicial travel and Missouri Bar expenses. These credit cards were collectively referred to as purchasing cards, or “P-cards.” As court administrator, York was an authorized user of the P-cards.
York admitted that, from 2009 to 2012, she used the court’s P-card to purchase:
- $2,252 for gas for her personal driving, even though the court used mileage reimbursement forms to reimburse business driving;
- $9,532 for personal items and gift cards from Amazon;
- $6,446 for personal items such as clothing and make-up;
- $8,350 for personal meals;
- $487 for U.S. postal stamps for her personal use (the court uses metered postage for its mail, rather than stamps);
- $46,535 for Apple computer products (the court did not use a system compatible with Apple computers);
- $35,356 for gift cards. (York kept most of the gift cards, in the amount of $29,371, for her personal use and distributed $5,985 of these gift cards to court staff, on a merit system determined by her, as a type of bonus. The amounts of the cards were more than the Internal Revenue Service de minimis requirements for income reporting, however, the cards were not ever tracked or reported as income.)
York also sold some computers owned by the court and kept the proceeds of the sales for her personal use.
From January 2009 to June 4, 2012, York reimbursed the Court a total of $1,660 for her personal expenditures. On June 7, 2012, after being confronted with her embezzlement scheme and placed on leave, York reimbursed the Court an additional $2,742.
York admitted that the approximate intended loss to the court from her personal use of the court’s credit cards is $77,778, while the actual loss to the court from that part of her scheme is $75,036.
Contract Scheme
Today’s information also alleges that York engaged in a fraudulent contract scheme. On Sept. 30, 2010, York entered into a contract with CBDM Services, LLC, on behalf of the court, purportedly for workflow analysis (a business process review, a customer service evaluation and an organizational redesign). The amount to be paid was originally $68,000, although it was later increased to $69,500.
CBDM, which was not organized as a company at the time the contract was signed, was actually a front for the true contracting party, identified in court documents as “B.V.” York did not disclose to the court that B.V. would be receiving more than 90 percent of the payments made to CBDM or that she had a personal relationship with B.V.
At York’s direction, the court paid CBDM a total of $64,500, although no usable work product or report was produced. Of the $64,500 paid by the court, the owner and only principal of CBDM (identified in court documents as “N.D.”) kept approximately $2,000 plus banking fees and sent the remainder, approximately $62,000, to B.V.
Under federal statutes, York is subject to a sentence of up to 20 years in federal prison without parole, plus a fine up to $250,000. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Kathleen D. Mahoney. It was investigated by the FBI.
First Cousins from La Plant Sentenced for IncestRead the Press Release
United States Attorney Brendan V. Johnson announced that a La Plant, South Dakota, man and woman convicted of Incest were sentenced on November 18, 2013, by U.S. District Judge Roberto A. Lange.
The investigation was conducted by the Cheyenne River Sioux Tribe Law Enforcement Division. The case was prosecuted by Assistant U.S. Attorney Mikal Hanson.
Nicholas Ray White Eagle, age 26, and Fawn Lynn Scott, age 21, were each sentenced to 3 years of probation and a $100 special assessment to the Federal Crime Victims Fund.
White Eagle and Scott were indicted by a federal grand jury on June 12, 2013, and pled guilty to Incest on August 14, 2013.
In April 2011, White Eagle and Scott, first cousins, had consensual sexual intercourse that produced a child with a genetic disability. At the time of the sexual intercourse, White Eagle and Scott were not legally married and were within the degrees of consanguinity with each other within which marriages are void.
Federal Officials Close Investigation into Deaths of Veterans at Local VA Health FacilitiesRead the Press Release
PITTSBURGH - United States Attorney David J. Hickton issued the following statement today:
“Today, we announce that no criminal charges will be brought in connection with our investigation related to the tragic illnesses and deaths of veterans from Legionnaires Disease at our local Veterans Administration health facilities.
“The investigation has been a high priority of my Office and federal law enforcement for the last nine months. We conducted the investigation jointly with the Federal Bureau of Investigation and the Veterans Administration - Office of Inspector General. It must be noted that our jurisdiction is limited to determining if any federal criminal statutes were violated. The focus of our work was not to determine exactly how patients contracted the disease, but rather whether there was evidence of any material false statements by VA officials or employees, and whether there was evidence justice had been obstructed in any way.
“Senior members of my staff and experienced FBI and VA-OIG agents conducted a thorough and independent review of this matter. Approximately 30 interviews were conducted. The interviews spanned high level hospital officials, maintenance workers and outside contractors. The investigative team analyzed and reviewed more than 250,000 internal VA emails. They studied volumes of records, including logbooks of maintenance performed on the systems used to combat the Legionella bacteria and purchase orders for parts related to such maintenance. Test results were examined, along with the detailed reports of the Centers for Disease Control and the Health Inspection Division of the OIG.
“Our investigation revealed no basis for charging any individual or any entity with a federal crime. Accordingly, no prosecution is warranted in this matter based upon our thorough review.
“While the federal criminal investigation has concluded, consideration of the many issues raised by this tragic event will surely continue in other forums. If any new or additional evidence emerges, today’s assessment does not prevent the U.S. Attorney’s Office from reviewing such evidence and reopening the investigation if the facts warrant.”
Federal Jury Convicts York County Man for Receipt of Child PornographyRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced that a jury in Harrisburg has found a York County man guilty of two counts of receipt of child pornography.
Following a three-day trial, early Wednesday evening, the jury convicted Lawrence B. Blevins, Jr., age 44, of West Manchester, Pennsylvania, of downloading child pornography from the internet. The trial was held before Chief United States District Court Judge Christopher C. Conner. A sentencing date has not been set. Blevins faces a 15-year mandatory minimum sentence.
The case arose from an investigation by West Manchester Township Police into a network of individuals who shared child pornography over the internet. On December 29, 2011, West Manchester Township Police executed a search warrant at Blevins’s residence and recovered multiple computers and external storage devices from his room. Police found over a half million images of child pornography and hundreds of videos. He was arrested and charged by local officials. On September 26, 2012, a federal grand jury returned a two-count indictment charging Blevins with possession of child pornography.
United States Attorney Peter J. Smith stated that the prosecution is part of the continuing cooperation between state and federal authorities in the Project Safe Childhood program. The investigation was conducted by West Manchester Township Police Department, the Northern York Regional Police Department, and the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI). The prosecutor assigned to the case is Assistant United States Attorney Michael A. Consiglio.
Federal Jury Convicts Joshua Roberts in Crack Cocaine ConspiracyRead the Press Release
GREENEVILLE, Tenn. – On Nov. 20, 2013, following a two day trial in U.S. District Court, a jury convicted Joshua Roberts, 28, of Knoxville, Tenn., of conspiring to possess with the intent to distribute over 28 grams of cocaine base, also known as crack.
Sentencing is set for Mar. 24, 2013 at 1:30 p.m., in U.S. District Court in Greeneville. Roberts faces a minimum mandatory 10 year sentence up to life in prison, a fine of up to $8,000,000 and at least eight years up to life on supervised release following the prison term.
The investigation of Roberts and his co-conspirators, all of whom entered guilty pleas prior to Roberts’ trial, began when Johnson City Police Officers responded to a request from the Motel 6 in Johnson City that officers investigate suspicious activity in a room. There, officers found Roberts and three of his four co-defendants in a room with packages of crack cocaine and tools of the drug trade. Another room rented by the group also contained crack cocaine. In all, nearly 3.5 ounces or 97.97 grams of crack cocaine, having a street value of approximately $10,000, was found in the rooms. Testimony at trial established that Roberts, and the others, came to Johnson City from Knoxville to sell crack cocaine, initially staying at the Red Roof Inn. After selling out of crack cocaine at the Red Roof Inn, the group returned to Knoxville to get more crack, then returned to Johnson City, this time staying at the Motel 6, where law enforcement intervened.
U.S. Attorney, William C. Killian, stated: “This should send a message to drug dealers wishing to peddle their poison on the streets of East Tennessee. You are not welcome here.”
Law enforcement agencies participating in the joint investigation which led to indictment and subsequent conviction of Roberts included the Johnson City Police Department, First Judicial District Drug Task Force, and Tennessee Bureau of Investigation. Assistant U.S. Attorney J. Gregory Bowman represented the United States.
Federal Court Shuts Down Two St. Louis Tax Return PreparersRead the Press Release
A federal district judge in St. Louis has permanently barred defendants Joseph Burns, Joseph Thomas and International Tax Service Inc. from preparing federal tax returns for others, the Justice Department announced today. The defendants consented to the permanent injunction after the government filed a complaint and a motion for preliminary injunction. A hearing on that preliminary injunction motion, which resolves the case, was scheduled to commence today.
The complaint alleged that, from 2005 until late 2011, Thomas worked as a tax return preparer for Burns, who was doing business as Electronic Tax Service, but in early 2012, Thomas opened his own tax preparation business, called International Tax Service Inc. Burns and Thomas operated their respective tax preparation businesses from the same building, located at 4144 Lindell Boulevard in the Midtown neighborhood of St. Louis. According to the complaint, the defendants repeatedly fabricated expenses and deductions on customers’ returns and falsely claimed head of household status for customers who were married in order to illegally understate their customers’ federal tax liabilities and to obtain fraudulent tax refunds. The complaint also alleged that the defendants falsely claimed that some of their customers earned income from businesses that the defendants fabricated or increased the amount of business income their customers earned in order to illegally claim the maximum earned income tax credit on customers’ returns. In one example cited in the complaint, a customer of Burns told him that she made approximately $1200 for the year styling hair, but Burns claimed the customer had a beautician business and fabricated $16,900 in income which he reported on the customer’s tax return. As alleged in the complaint, the IRS estimates that the annual tax loss from the returns prepared by the defendants could be as much as $6 million.
Return preparer fraud is one of the IRS's Dirty Dozen Tax Scams for 2013 . The IRS has tips for choosing a tax preparer www.irs.gov/Tax-Professionals/Choosing-a-Tax-Professional . In the past decade, the department's Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department website.
Relatd Materials:
United States v. Joseph L. Burns, et al.
Final Stipulated Permanent Injunction Order Against Joseph L. Burns
Final Stipulated Permanent Injunction Order Against Joseph Thomas and International Tax Service, Inc.Fairview Heights Man Pleads to Firearm OffenseRead the Press Release
The United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today that Quinten M. Allen, 24, of Fairview Heights, pled guilty in the federal district court in East St. Louis on November 19, 2013, to the charge of being a previously convicted felon in possession of a firearm.
Court proceedings show that on February 5, 2013, in East St. Louis, Allen knowingly possessed a firearm - one SCCY, model CPX-1, 9 mm. caliber, semi-automatic pistol with ten (10) rounds of 9 mm. caliber ammunition. Previously on July 26, 2012, Allen was convicted of the felony offense of Unlawful Possession of a Controlled Substance in the Circuit Court of the Twentieth Judicial Circuit in St. Clair County, Illinois.
Allen is scheduled for sentencing on April 7, 2014 and faces maximum penalties of 10 years in prison, a $250,000 fine, and up to 3 years of supervised release.
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The case was investigated by agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). The case is being prosecuted by Assistant U.S. Attorney Liam Coonan.
Eagle Butte Woman Sentenced for Possession of A Controlled SubstanceRead the Press Release
United States Attorney Brendan V. Johnson announced that Nicole Condon, a/k/a Nicole Garreau, age 35, of Eagle Butte, South Dakota, has pled guilty to Possession of a Controlled Substance and was sentenced on November 19, 2013, by U.S. Magistrate Judge Mark A. Moreno.
Condon was sentenced to 2 years of probation, a $1,000 fine, and a $25 special assessment to the Federal Crime Victims Fund. Condon was indicted on August 21, 2013.
The conviction stems from an incident occurring on October 23, 2012, when Condon was in a vehicle that was stopped for a traffic violation. Condon was transported to the Cheyenne River Sioux Tribe Adult Detention Center and searched. Officers found 0.68 grams of a mixture or substance containing a detectable amount of methamphetamine on her person in addition to several syringes, a straw, and empty plastic bags. Condon admitted to consuming methamphetamine.
The investigation was conducted by the Northern Safe Trails Drug Enforcement Task Force. Assistant U.S. Attorney Kathryn N. Rich prosecuted the case.
Durable Medical Equipment Clinic Owner Pleads Guilty in Miami for Role in $11 Million Health Care Fraud SchemeRead the Press Release
The former owner of a defunct durable medical equipment (DME) clinic based in Miami pleaded guilty today for his role in an $11 million Medicare fraud scheme.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Special Agent in Charge Michael B. Steinbach of the FBI’s Miami Field Office and Special Agent in Charge Christopher B. Dennis of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Office of Investigations’ Miami Office made the announcement.
Francisco Enrique Chavez, 36, of Miami, pleaded guilty before U.S. District Judge Patricia A. Seitz in the Southern District of Florida to one count of health care fraud. He faces a maximum penalty of 10 years in prison when he is sentenced on Feb. 11, 2014.
According to court records, Chavez served as the president and sole corporate officer of World Class Medical Clinic Corp. (World Class) . From March 27, 2006, through Aug. 22, 2006, Chavez submitted or caused to be submitted approximately $11,303,494 in fraudulent claims to the Medicare program on behalf of World Class for DME that was neither prescribed by a physician nor medically necessary. Medicare paid more than $1,713,959 on these fraudulent claims. The proceeds of the World Class fraud scheme were deposited into corporate bank accounts that were controlled by Chavez, and he made numerous cash withdrawals and deposits into personal and shell entity bank accounts to conceal the nature of the scheme.
Chavez was a fugitive who was extradited from Spain to Miami on Aug. 30, 2013.
This case is being investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida. This case was prosecuted by Trial Attorneys Allan J. Medina and Sarah M. Hall of the Fraud Section . The Criminal Division’s Office of International Affairs provided significant assistance in the extradition.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,700 defendants who have collectively billed the Medicare program for more than $5.5 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.govDrug Dealer Sentenced to 10 Years in PrisonRead the Press Release
Participated in the Shipment of Almost 10,000 Kilograms of Marijuana
Baltimore, Maryland – U.S. District Judge George L. Russell III sentenced Thurston Lindsey, whose true name is Daniel Mitchell Williams, Jr., age 43, of Phoenix, Arizona, today to 10 years in prison, followed by four years of supervised release, for conspiracy to possess with the intent to distribute marijuana.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Assistant Special Agent in Charge Gary Tuggle of the Drug Enforcement Administration, Baltimore District Office; Chief James W. Johnson of the Baltimore County Police Department; and Colonel Michael Kundrat, Chief of the Maryland Transportation Authority Police.
According to Lindsey’s plea agreement, in December of 2011, Lindsey agreed to work with several co-conspirators, including Jerome Adolfo Castle, in the distribution of large quantities of cocaine and marijuana. Lindsey relocated to Phoenix, Arizona, where from early 2012 until the time of his arrest on April 22, 2013, he worked directly with two of his co-conspirators, who provided Lindsey with housing and paid him for his services. Lindsey assisted in the packaging and shipment of large quantities of marijuana and cocaine to Baltimore and other cities on the east coast. Lindsey’s duties also included inspecting the quality of shipments of the drugs acquired by his co-conspirators, weighing the drugs (primarily the marijuana), and once the drugs were packaged for shipment, delivering the drugs to the shipping agent, who was responsible for shipping the marijuana and cocaine to locations in Baltimore and elsewhere. Jerome Castle was in charge of the distribution of the drugs once they arrived in Baltimore. Lindsey admits that he participated in the shipment of close to 10,000 kilograms of marijuana and also admits that cocaine was also shipped to Maryland during this period of time.Jerome Adolfo Castle, age 35, a Jamaican national residing in Pikesville, Maryland, pleaded guilty on November 19, 2013, to illegal re-entry of a removed alien, conspiracy to distribute and possess with the intent to distribute cocaine and marijuana, and conspiracy to launder money. According to his plea agreement, law enforcement executed a search warrant at Castle’s residence and recovered almost $58,000 in cash; jewelry appraised at over $411,000; a money counter; a scale used to measure quantities of drugs; over 200 grams of marijuana; and seven handguns. In addition, Castle admitted that between 2010 and April 2013, he deposited approximately $300,000 in cash to bank accounts under the name of Dontwon Burris. These deposits were made with proceeds from the sale of cocaine and marijuana, and are, therefore, criminally derived property.
As part of his plea agreement, Castle will be required to forfeit the cash, jewelry and firearms seized from his home during the search, as well as all interest he maintained in seven properties located in Baltimore; six vehicles, including three Ford F-150’s and a Jaguar XF Premium; two laptop computers and an Apple I-Pad; and 98 pairs of assorted men’s shoes.
Castle and the government have agreed that if the Court accepts the plea agreement Castle will be sentenced to 14 years in prison. Castle has agreed that he will consent to removal from the United States upon completion of his sentence. Judge Russell has scheduled sentencing for February 28, 2014 at 2:00 p.m.
United States Attorney Rod J. Rosenstein praised the DEA, Baltimore County Police Department and Maryland Transportation Authority Police for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorneys James G. Warwick and Kenneth S. Clark, who prosecuted this Organized Crime Drug Enforcement Task Force case.Delaware Doctor Charged with Illegally Selling Controlled Substances on the Silk Road Drug MarketplaceRead the Press Release
Orlando, FL – Acting United States Attorney A. Lee Bentley, III, along with Special Agent in Charge Mark R. Trouville, (DEA) Miami Field Division, and Special Agent in Charge David Dongilli, (DEA) Philadelphia Field division announce the arrest and unsealing of a criminal complaint charging Dr. Olivia Bolles, a/k/a “MDPro,” (32, Newark, Delaware) with the illegal distribution of controlled substances. If convicted, she faces a maximum penalty of 20 years in federal prison. Bolles was arrested at her Delaware residence today. She will make an initial appearance in U.S. Federal Court later today, in the District of Delaware.
According to the criminal complaint, between March 2013 and October 2, 2013, Bolles, a licensed medical doctor in Delaware, operated as the vendor “MDPro” on the underground website known as Silk Road, a sophisticated Internet marketplace. Silk Road operated as an online criminal marketplace designed to enable its users to buy and sell drugs and other illegal goods and services anonymously, outside the reach of law enforcement. The website provided a sales platform for vendors and buyers to conduct transactions online.
Between June 13, 2013, and August 20, 2013, DEA purchased Oxycodone, Diazepam, Xanax, Adderall, Hash Oil, Tetrahydrocannabinol (THC), and Vyvanse from “MDPro,” on the Silk Road website. The investigation determined that Bolles shipped the controlled substances, which were purchased from “MDPro,” from Delaware to Central Florida. The investigation also found that Bolles used her personal bank accounts to purchase items which were used to further her illegal drug dealing business, including packaging and laboratory materials. More than 600 sales of controlled substances are alleged to have been mailed, by Bolles, to individuals in more than 17 different countries.
A criminal complaint is merely an allegation that a defendant has committed a violation of federal criminal law, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by the Drug Enforcement Administration (Orlando, Florida and Wilmington, Delaware Offices), with the assistance of the United States Postal Inspection Service. It will be prosecuted by Assistant United States Attorney David Haas.
Crozet Man Indicted on Child Pornography ChargesRead the Press Release
CHARLOTTESVILLE, VIRGINIA – A federal grand jury sitting in the United States District Court for the Western District of Virginia in Harrisonburg has indicted a local man on a series of charges related to the distribution and possession of child pornography.
Michael G. Morris, a.k.a. “funshooter2006,” was charged today by a federal grand jury in an indictment returned this afternoon. The grand jury has charged Morris, age 50, of Crozet, Va., with two counts of distributing or receiving images of child pornography and one count of possession of child pornography.
The indictment alleges that Morris distributed or received images of child pornography on January 6, 2012 and March 19, 2013. The possession charges alleges that on November 6, 2013, Morris possessed images or videos of a minor whom the defendant knew was a prepubescent teen who had not attained 12 years of age.
If convicted, Morris faces a sentence of between five and 20 years in prison on counts one and two and up to 20 years in prison on count three.
The investigation of the case was conducted by the Federal Bureau of Investigation. Assistant United States Attorney Nancy Healey and Herbrina Sanders, a Trial Attorney with the Department of Justice’s Child Exploitation and Obscenity Section, will prosecute the case for the United States.
A Grand Jury Indictment is only a charge and not evidence of guilt. The defendant is entitled to a fair trial with the burden on the government to prove guilt beyond a reasonable doubt.
Coventry Man Arrested for Making Threats Against the PresidentRead the Press Release
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Deirdre M. Daly, Acting United States Attorney for the District of Connecticut, and Robert L. Barrett, Resident Agent in Charge of the U.S. Secret Service, today announced that JOSHUA PHILLIP KLIMAS, 32, of Coventry, was arrested yesterday on a federal criminal complaint charging him with making threats against the President of the United States and the President’s family.
KLIMAS was arrested by the U.S. Secret Service at his residence. He appeared yesterday before U.S. Magistrate Judge Donna F. Martinez in Hartford and was ordered to be admitted to a local hospital for psychiatric evaluation.
As alleged in the criminal complaint, on June 1, 2013, KLIMAS sent a message to the whitehouse.gov website that contained several threatening statements against President Obama and his family, including “If you do not resign by the end of the year I will kill you!”
The complaint further alleges that KLIMAS has also threatened other individuals.
This matter is being investigated by the U.S. Secret Service, with the assistance of the UConn Police Department and the Coventry Police Department.
Acting U.S. Attorney Daly stressed that a complaint is only a charge and is not evidence of guilt. Charges are only allegations, and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
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(203) 821-3722 [email protected]Correctional Officer Indicted for Accepting BribesRead the Press Release
ABILENE, Texas — Matthew Castaneda, 23, of Big Spring, Texas, was arrested yesterday on a federal indictment, returned by a grand jury last week and unsealed today, charging him with one count of bribery of public officials. Castaneda made his initial appearance in federal court today before U.S. Magistrate Judge E. Scott Frost, and entered a not guilty plea to the charge. He was released on his own recognizance. Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
The indictment alleges that from September 14, 2013, to approximately December 13, 2012, Castaneda, who at the time was employed as a Correctional Officer at the Big Spring Correctional Center, brought contraband to an inmate, in the form of cell phones, in exchange for money from that inmate.
An indictment is an accusation by a federal grand jury, and a defendant is entitled to the presumption of innocence unless proven guilty. If convicted, however, Castaneda faces a maximum statutory penalty of 15 years in federal prison and a $250,000 fine.
The investigation was conducted by the Department of Justice Office of the Inspector General. Assistant U.S. Attorney Paulina Jacobo is in charge of the prosecution.
Clackamas Man Sentenced to Four Years in Prison for Filing False Claims for $1.9 Million in Fraudulent Federal Income Tax RefundsRead the Press Release
PORTLAND, Ore. – U.S. District Judge Michael H. Simon sentenced defendant Miles J. Julison to four years in federal prison and three years of post-release supervision for two counts of filing false claims against the United States. The sentencing hearing on Wednesday, November 19th followed a five-day trial in August when a Portland jury convicted Julison of the charges. The evidence at trial established that Julison, a 41-year-old former real estate investor, had filed tax returns for the years 2007 and 2008 fraudulently claiming that he was due refunds for tax overpayments totaling nearly $2 million. In fact, he had paid no federal income taxes at all in those years. Julison had also helped another man file his own fraudulent claim for more than $480,000.
U.S. Attorney Amanda Marshall commended the sentence, “It is a serious sentence for a serious crime. As Judge Simon noted, Miles Julison stole hundreds of thousands of dollars from his neighbors, honest and hardworking taxpayers. He tried to steal even more and helped others do the same; the severity of the sentence properly reflects the extent of his criminal conduct.”
The evidence at trial established that Julison falsely reported on his 2007 tax return that he had earned more than half a million dollars that year and that almost all of it had been withheld for taxes. He then fraudulently claimed he was due a tax refund of $411,773.00. The IRS issued him a check for that amount two weeks later. In January 2009, Julison falsely reported on his tax return that he had earned more than $2.3 million in 2008, and that all but $815 of that total had been withheld for taxes. He fraudulently claimed a tax refund of more than $1.5 million. By then, however, Julison was already under criminal investigation, and the refund was never issued.
Julison used the refund he obtained from his 2007 return to purchase, among other things, a $60,000 Mercedes-Benz sedan, to pay off his home mortgage, and to make payments on a 23-foot ski boat, a Toyota Sequoia SUV , two Kawasaki wave runners, and two Polaris snowmobiles. Judge Simon ordered Julison to pay $411,773 in restitution to the IRS for that refund.
This case was investigated by IRS, Criminal Investigation. Assistant U.S. Attorneys Seth D. Uram and Ryan W. Bounds prosecuted the case.
Cedar Rapids Man Sentenced to over 17 Years on Child Pornography ChargesRead the Press Release
A man who downloaded and possessed child pornography was sentenced today to over seventeen years in federal prison.
Brian Lynch, age 47, of Cedar Rapids, Iowa, received the sentence after an August 1, 2013, guilty plea to one count of receipt of child pornography and one count of possession of child pornography. At the guilty plea, Lynch admitted that, between March 2010 and March 2013, he used the Internet to download child pornography. He also admitted that, between November 2004 and April 2013, he possessed child pornography. In a plea agreement, Lynch admitted that he possessed over 350 videos and over 175 images of child pornography, including depictions of prepubescent children.
Lynch was sentenced in Cedar Rapids by United States District Court Chief Judge Linda R. Reade. Lynch was sentenced to 210 months’ imprisonment. A special assessment of $200 was imposed, and Lynch must also serve a ten-year term of supervised release. He must comply with all sex offender registration and public notification requirements.
This case was prosecuted by Assistant United States Attorney Mark Tremmel and was investigated by the Iowa Division of Criminal Investigation, the DeWitt Police Department, the Cedar Rapids Police Department, and the United States Marshals Service.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab “resources.”
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is CR 13-29.
Caribbean Narcotics Traffickers Found Guilty by A Federal JuryRead the Press Release
Tampa, Florida – Acting United States Attorney A. Lee Bentley, III announces that a federal jury today found Yugool Persaud (61, Guyana) and Desmond Wilson (54, Guyana) guilty of two counts of violating the U.S. Maritime Drug Law Enforcement Act. Persaud and Wilson face a maximum penalty of life in federal prison. Their sentencing is scheduled for February 20, 2014.
Persaud and Wilson were indicted on September 5, 2013.
According to testimony and evidence presented at trial, a U.S. Coast Guard law enforcement detachment on board the British Royal Fleet Auxiliary ship WAVE KNIGHT observed a suspicious fishing vessel, the MISS TIFFANY, transiting a known drug trafficking corridor in the Caribbean Sea. When the WAVE KNIGHT called over the radio, the MISS TIFFANY began evasive maneuvers, while jettisoning white bales overboard. U.S. Coast Guard boarding teams recovered 1,265 kilograms of marijuana from the jettison fields, boarded the MISS TIFFANY, and detained Persaud and Wilson. Both men were turned over to special agents from Panama Express Strike Force.
This case was investigated by the Drug Enforcement Administration, Federal Bureau of Investigation, and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations. It is being prosecuted by Special Assistant United States Attorney Michael Meyer and Assistant United States Attorney Shauna Hale.
Panama Express Strike Force (PANEX) is a federally approved Organized Crime Drug Enforcement Task Force (OCDETF) consisting of U.S. Immigration and Customs Enforcement, the Drug Enforcement Administration, United States Coast Guard, Internal Revenue Service, Federal Bureau of Investigation, Pinellas County Sheriff’s Office, and the Florida Department of Law Enforcement. Operation Panama Express currently targets South American-based drug trafficking organizations responsible for smuggling drugs to the United States and elsewhere for distribution.
Canadian Man Convicted of Attempting to Enter the United States IllegallyRead the Press Release
BUFFALO, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that Victor Osa Ohanmu, 54, of Pickering, Ontario, was convicted of attempting to enter the United States after deportation, subsequent to a conviction for an aggravated felony, and making a material false statement to Customs and Border Protection officers, following a jury trial before U.S. District Court Judge Richard J. Arcara. The charges carry a maximum penalty of 20 years in prison, a $250,000 fine or both.
According to Assistant U.S. Attorneys Kathleen A. Lynch and Paul J. Campana, who handled the prosecution of the case, the defendant drove a vehicle to the Lewiston Bridge Port of Entry on March 14, 2013 and presented a Canadian passport under a different identity. When questioned, the defendant told the officers he was driving to Boston, Massachusetts for a funeral.
Ohanmu falsely told the officers that he had not been in the U.S. before 1992, when, in fact, he had been convicted of an aggravated felony in 1990. The defendant was deported from the U.S. on two previous occasions, January 15, 1992 and February 12, 2003.
Sentencing is scheduled for March 13, 2014 at 1:00 p.m. before Judge Arcara.
The conviction is the result of an investigation by Customs and Border Protection, under the direction of Randy Howe, Acting Director of Field Operations.California Woman Pleads Guilty to Drug ChargeRead the Press Release
BUFFALO, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that Myra Hight, 52, of Lake Tahoe, CA, pleaded guilty to marijuana conspiracy before Chief U.S. District Judge William M. Skretny. The charge carries a maximum penalty of five years in prison, a $250,000 fine or both.
Assistant U.S. Attorney John M. Alsup, who is handling the case, stated that the defendant was arrested on February 20, 2012 by Hamburg Police in the parking lot of a store in the Town of Hamburg. During a search of the car Hight was driving, officers recovered $77,000 in U.S. Currency, money the defendant admitted was proceeds of her marijuana trafficking conspiracy.
The plea is the culmination of an investigation by the Hamburg Police Department, under the direction of Chief Michael Williams and the Drug Enforcement Administration, under the direction of Special Agent in Charge Brian R. Crowell, New York Field Division.Caldwell Man Pleads Guilty to Possessing Obscene Visual Representations of the Sexual Abuse of ChildrenRead the Press Release
BOISE — Patrick S. Baker, 50, of Caldwell, Idaho, pleaded guilty today in United States District Court to possessing obscene visual representations of the sexual abuse of children, U.S. Attorney Wendy J. Olson announced.
According to the plea agreement, officers from the Nampa Police Department responded to the Hilton Inn in Nampa, Idaho, on March 14, 2013, in response to a request from hotel management to remove a guest who had overstayed the contracted time. Officers discovered Baker in the room. He had checked in the previous night and used the hotel’s wireless Internet service to download child erotica and at least 36 realistic-looking animated images depicting prepubescent minor females engaged in various sexual acts with adults, according to the plea agreement. Investigators also found several images of minor females, most approximately ages 3 to 12 years, in various kinds of dress, posing in ways to bring attention to their genital or pubic area. Baker admitted that he had downloaded the images and that he had an addiction to pornography, including adults and children.
The charge is punishable by up to ten years in prison, a maximum fine of $250,000, and up to three years of supervised release.
Baker is set for sentencing on February 3, 2014, before Chief U.S. District Judge B. Lynn Winmill at the federal courthouse in Boise.
The case was investigated by the Nampa Police Department, an affiliate of the Idaho Internet Crimes Against Children Task Force (ICAC). The ICAC is a statewide coalition of local, state and federal law enforcement and prosecution agencies, focused on apprehending and prosecuting individuals who use the Internet to criminally exploit children. For more information about the Idaho ICAC Task Force and a list of all the participating agencies, visit www.icacidaho.org.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab “resources.”
Butler County Man ChargedWith Producing Child PornographyRead the Press Release
KANSAS CITY, KAN. - An Augusta, Kan., man has been indicted on charges of producing child pornography, U.S. Attorney Barry Grissom said today. The indictment was returned by a federal grand jury in Kansas City, Kan.
Kristopher K. Sims, 30, Augusta, Kan., is charged with two counts of production of child pornography. The crimes are alleged to have occurred July 20, 2012, and Nov. 5, 2012, in Butler County, Kan.
Sims initially was charged in a criminal complaint filed Nov. 15 in U.S. District Court in Wichita. An investigator’s affidavit in support of the complaint alleges that a Wichita police detective initiated the investigation after receiving information from Omegle, an online chat service that encourages users to communicate anonymously with strangers. Investigators learned that during a chat on Omegle users exchanged an image of an adult male engaged in sexual activity with a female child who appeared to be under the age of four. They followed an electronic trail to Sims’ home in Augusta. They learned that Sims had used the Internet to pose as a 14-year-old boy in order to contact girls and to entice them to send him photos of themselves engaged in sexual activities.
If convicted, he faces a penalty of not less than 15 years and not more than 30 years and a fine up to $250,000 on each count. Homeland Security Investigations, Immigration and Customs Enforcement and the Wichita Police Department investigated. Assistant U.S. Attorney Jason Hart is prosecuting.OTHER INDICTMENTS
Nicolas P. Juszcyk, 24, is charged with one count of possession with intent to distribute methamphetamine, one count of unlawful possession of a firearm in relation to drug trafficking, and one count of unlawful possession of a firearm after a felony conviction. The crimes are alleged to have occurred Oct. 9, 2013, in Kansas City, Kan.
If convicted, he faces a penalty of not less than five years and not more than 40 years and fine up to $5 million on the methamphetamine charge, not less than five years and not more than life and a fine up to $250,000 on the charge of possessing a firearm in furtherance of drug trafficking, and a maximum penalty of 10 years and a fine up to $250,000 on the other firearm charge. The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated. Special Assistant U.S. Attorney Erin Tomasic is prosecuting.
Anthony R. Barajas, 22, Kansas City, Kan., is charged with one count of unlawful possession of a firearm after a felony conviction. The crime is alleged to have occurred Oct. 31, 2013, in Kansas City, Kan.
If convicted, he faces a maximum penalty of 10 years and a fine up to $250,000. The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated. Assistant U.S. Attorney David Zabel is prosecuting.
Brian Garner, 37, who is an inmate of the U.S. Penitentiary at Leavenworth, is charged with one count of possession with intent to distribute marijuana and one count of possession of a prohibited object in the penitentiary. The crimes are alleged to have occurred Jan. 13, 2013, in Leavenworth, Kan.
If convicted, he faces a maximum penalty of five years in federal prison and a fine up to $250,000 on each count. The FBI investigated. Assistant U.S. Attorney David Zabel is prosecuting.
Leonard Frank Bagdol, 71, is charged with one count of unlawful possession of a firearm after a felony conviction. The crime is alleged to have occurred Nov. 13, 2013, in Lawrence, Kan.
If convicted, he faces a maximum penalty of 10 years and a fine up to $250,000. The Bureau of Alcohol, Tobacco, Firearms and Explosives and the Kansas Highway Patrol investigated. Assistant U.S. Attorney Greg Hough is prosecuting.
In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.Bergen County, N.J., Couple Convicted of Bank Fraud, Conspiracy to Commit Wire Fraud, in Connection with Mortgage SchemeRead the Press Release
NEWARK, N.J. — A husband and wife from Bergen County, N.J., were both convicted today of one count each of bank fraud and conspiracy to commit wire fraud, U.S. Attorney Paul J. Fishman announced.
Linda Yarleque, 44, and her husband, Fabio Moreno Vargas, 46, of Westwood, N.J., were convicted following a one-week trial before U.S. District Judge William H. Walls in Newark federal court. The jury deliberated two hours before returning the guilty verdicts.
According to documents filed in this case and the evidence at trial: Yarleque and Moreno obtained 10 fraudulent loans over a period of three years. They falsified their employment and income, failed to disclose their debts and other properties that they owned, and lied about where they lived. They fraudulently obtained a total of $3.4 million in mortgages this way and personally pocketed approximately $269,000, through “cash out” refinancings that they directed to their own bank accounts. They then spent that money on vacations, cars, and to buy more properties.
The defendants made up a phony business where Moreno was supposedly employed (My Limousine). They then obtained a phone line in the name of My Limousine and had it forwarded to their personal cell phones. When mortgage lenders called to verify Moreno’s employment, the defendants lied, posing as fictitious employees, using names such as “Janet Alvarez” and “Casandra Sterling.”
Each count upon which the defendants were convicted is punishable by a maximum potential penalty of 30 years in prison and a $1 million fine. Sentencing is scheduled for March 11, 2014.U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, with the investigation leading to today=s convictions. He also thanked IRS-Criminal Investigation for its role in the case.
The government is represented by Assistant U.S. Attorney J. Jamari Buxton of the general crimes unit and Rachael A. Honig, counsel to the U.S. Attorney.13-448
Defense counsel: Yarleque: Peter Willis Esq., of Jersey City, N.J., Moreno: Chester Keller Esq. and Carol Gillen Esq., Assistant Federal Public Defenders, Newark
Yarleque, Linda and Moreno, Fabio Indictment
Arkansas Woman Pleads Guilty to Million-Dollar Health Care Fraud, Money Laundering SchemeRead the Press Release
Jackson, TN –Rebecca Christain, 57, of Mountain Home, AR, pleaded guilty on November 20, 2013, to a two-count federal information charging her with one count of health care fraud and one count of money laundering in relation to a Medicare fraud scheme, announced U.S. Attorney Edward L. Stanton III.
According to the facts alleged in the information and statements made during her guilty plea, Christain was the owner of Sleep Analysts, Inc. and a subsidiary company, Pulmonary Solutions. Pulmonary Solutions had offices in Michie, TN; Brownsville, TN; Savannah, TN; Waynesboro, TN; and Jackson, TN, and was in the business of providing respiratory therapy services to Medicare, Medicaid and other federal healthcare program patients.
From October 2008 to December 2009, Christain devised a scheme to defraud the Medicare program by hiring unlicensed individuals to perform services that were billed to Medicare as respiratory therapy services, and by instructing her staff to falsify records setting forth the amount of time during which services were provided. She also instructed employees to designate certain services for billing under physical therapy codes, which resulted in payments approximately double those of respiratory codes, and instructed employees to designate certain services to be double or triple billed using both physical therapy and respiratory therapy codes, even though Pulmonary Solutions never employed any physical therapists.
In total, Christain caused fraudulent claims in excess of $1,000,000 to be paid by Medicare and Medicaid for fraudulently billed respiratory therapy services. Christain is scheduled to be sentenced on February 20, 2014, in Jackson, TN, before U.S. District Judge J. Daniel Breen.
This investigation was conducted by the Department of Health and Human Services, Office of Inspector General; IRS-Criminal Investigation; the Federal Bureau of Investigation and the Tennessee Bureau of Investigation. Assistant U.S. Attorney John Fabian represented the government.Antigo Man Charged with Conspiracy to Distribute Cocaine and MarijuanaRead the Press Release
James L. Santelle, United States Attorney for the Eastern District of Wisconsin, announced that on November 19, 2013, a federal grand jury returned an indictment against John M. Hunter (age: 35) of Antigo, Wisconsin, charging him with a single count of Conspiracy to Distribute Controlled Substances in violation of 21 U.S.C. Sections 846 and 841(b)(1)(B), and 18 U.S.C. Section 2. If convicted of the offense, the defendant faces between five and forty years’ imprisonment, up to a five million dollar fine, and four years to life of Supervised Release.
According to the indictment, Hunter conspired with others known and unknown to distribute and possess with the intent to distribute over 500 grams of cocaine and over 50 kilograms of marijuana between May 2009 and August 2011.
Mr. Hunter is scheduled for arraignment in United States District Court in Green Bay, Wisconsin, on December 11, 2013.The case was investigated by the Langlade County Sheriff’s Office and the Marathon County Sheriff’s Office. It is being prosecuted by Assistant United States Attorney Daniel R. Humble.
An indictment is only a charge and not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
ABT Amended Settlement Agreement Granted Final Approval; Implementation to Begin by December 3, 2013Read the Press Release
On November 4, 2013 the United States District Court for the Western District of Washington granted final approval to the amended ABT Settlement Agreement (Agreement). The Agreement provides that individuals who file or intend to file asylum applications with either the United States Citizenship and Immigration Service (USCIS) or the Executive Office for Immigration Review (EOIR) are entitled to new procedures relating to the crediting of time toward eligibility for employment authorization.
The original Agreement was amended in September 2013 to clarify two points. First, a clarification was added to the Agreement, stating that when an asylum case is remanded to an immigration judge from the Board of Immigration Appeals (Board) for adjudication of an asylum claim (including Board remands to an immigration judge following an appeal to a U.S. Court of Appeals), the applicant will not only be credited with the total number of days between the immigration judge's decision and the date of the Board's remand order for employment eligibility purposes, but the time going forward from the date of the Board remand order will also be credited to the applicant, excluding any delays requested or caused by the applicant. Second, the agreement was amended to clarify that Remand Claim relief would be implemented pursuant to the six month timeframe provided for most other provisions of the agreement.
Due to the government shutdown, the six month implementation timeframe was extended by several weeks, so that implementation will now begin by December 3, 2013.
Additional information on the ABT Settlement Agreement is available on www.justice.gov/eoir.
19 New Defendants, Including 14 Correctional Officers, Indicted for Federal Racketeering in Baltimore City Jail InvestigationRead the Press Release
Superseding Indictment Focuses on Conduct Prior to April 2013
Baltimore, Maryland - United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; Secretary Gary D. Maynard of the Maryland Department of Public Safety and Correctional Services; Baltimore City State’s Attorney Gregg Bernstein; Baltimore Police Commissioner Anthony W. Batts; and Prince George’s County Police Chief Mark A. Magaw announced that a federal superseding indictment was unsealed today charging 19 additional defendants, including 14 former and current correctional officers with the Maryland Department of Public Safety and Correctional Services, with conspiring to operate the Black Guerilla Family (BGF) gang inside correctional facilities. All 19 defendants also are charged with conspiracy to distribute and possession with intent to distribute drugs; and six are charged with money laundering conspiracy.
This brings to 44 the total number of alleged BGF gang members and associates charged in the case, including 27 correctional officers. Sixteen of the 25 defendants in the original indictment in April 2013 have pleaded guilty to racketeering conspiracy, including nine correctional officers, four inmates and three drug suppliers. One defendant is deceased. Eight defendants charged with racketeering in April 2013 remain in the superseding indictment.
This case was developed as a result of the efforts of the Maryland Prison Task Force, formed in 2011 with the Maryland Department of Public Safety and Correctional Services, local, state and federal law enforcement agencies, and prosecutors. The Task Force has met regularly for almost three years, generating recommendations to reform prison procedures and producing leads that have been pursued by state, local and federal criminal investigators.
“The new charges focus on criminal conduct that occurred prior to April 2013, adding 19 new defendants as a result of additional evidence that came to light during the ongoing investigation,” said U.S. Attorney Rod J. Rosenstein. “I want to thank Secretary Maynard and the many law-abiding employees of the Department of Public Safety and Correctional Services who have assisted in this investigation and are working to eliminate corruption in state correctional facilities.”
“We are grateful to our federal law enforcement partners for their responsiveness, their good work, and their ongoing willingness to work with us as we root out corruption, improve security, and promote integrity at Maryland correctional institutions,” DPSCS Secretary Gary Maynard said. “While our work continues, those indicted out of the Taskforce’s efforts do not represent the overwhelming majority of honest and hardworking correctional officers working every day to keep our institutions safe.”
The superseding indictment and a search warrant affidavit were unsealed today upon the arrests of the defendants and the execution of 15 search warrants. Approximately 150 agents and officers assisted in the arrests and search warrants. The superseding indictment was returned on November 5, 2013, and remained under seal until after the warrants were executed this morning.
The defendants charged in the superseding indictment are alleged to be members or associates of the BGF, a gang active in prisons throughout the United States. According to the indictment, BGF has been the dominant gang at the Baltimore City Detention Center (BCDC), and in several connected facilities, especially the Baltimore Central Booking Intake Center, the Women’s Detention Center, which houses many men, and in the Jail Industries Building.
According to the affidavit, the BGF inmates and correctional officers operated a criminal organization within the prison facility, enabling them to make large amounts of money through drug trafficking, robbery, assault, extortion, bribery, witness retaliation, money laundering and obstruction of justice. “Green Dot” cash cards routinely were used to transfer money. BGF members and associates used the money to bribe correctional officers and other employees at BCDC and related prison facilities to smuggle drugs, cell phones and other contraband. Correctional officers arranged favored treatment and privileges for imprisoned BGF gang members, thwarted interdiction and law enforcement efforts against BGF inmates, and facilitated attacks on inmates in furtherance of BGF objectives. Gang members and associates extorted protection money from inmates who were non-members, often paid by relatives outside the jail.
The correctional officers allegedly hid drugs and other contraband beneath clothing and inside body cavities when they entered the prison. The correctional officers also smuggled items in their shoes, or in sandwiches they brought into the prison. BGF leaders used contraband cell phones to order drugs and other contraband and to coordinate gang activities.
Court documents allege that BGF members recruited correctional officers through personal and often sexual relationships as well as bribes, and that some officers traded sex for money. Officers believed it was unlikely that they would be fired or face significant discipline even if they were caught smuggling contraband or fraternizing with inmates.
The defendants face a maximum sentence of 20 years in prison on the racketeering and drug conspiracies. Thirteen of the defendants face a maximum sentence of 20 years in prison as well for conspiracy to commit money laundering. James Yarborough also faces five years in prison for possession with intent to distribute marijuana.
Most of the defendants are expected to have initial appearances in U.S. District Court in Baltimore this afternoon.
An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.The U.S. Attorney praised the FBI, the Maryland Department of Public Safety and Correctional Services, the Baltimore Police Department, the Prince George’s County Police Department, the Maryland Prison Task Force, and the Baltimore City State’s Attorney’ Office for their work on the investigation. Mr. Rosenstein thanked Assistant U.S. Attorneys Robert R. Harding and Ayn B. Ducao, who are prosecuting this Organized Crime Drug Enforcement Task Force case.
The U.S. Attorney also thanked the leaders of other agencies that have assisted the Maryland Prison Task Force, including Colonel Marcus L. Brown, Superintendent of the Maryland State Police; United States Marshal Johnny Hughes; Special Agent in Charge Karl C. Colder of the Drug Enforcement Administration - Washington Field Division; Tom Carr, Director of the Washington-Baltimore High Intensity Drug Trafficking Area; and Dave Engel, Executive Director of the Maryland Coordination and Analysis Center.
ATTACHMENT A
The following 19 defendants are newly charged in the superseding indictment unsealed today.
Inmates: Russell Carrington, a/k/ Rutt, age 33; and
Frederick Morrison, a/k/a Fry, age 29.
Current and former correctional officers: Kevin Armstrong, age 26, of Gwynn Oak, Maryland; Clarissa Clayton, age 24, of Brooklyn Park, Maryland; Tanierdra Finch, age 26, of Baltimore; Danielle Forrest, age 26; Aisha Fraction, age 25, Brooklyn; Sean Graves, age 47, of Windsor Mill, Maryland; Ricolle Hall, age 26, of Glen Burnie, Maryland; Angela Johnson, age 34, of Baltimore; Derrick Jones, age 41, of Aberdeen, Maryland; Javonne Lunkin, age 28, of Baltimore; Ashley Newton, age 30, Baltimore; Travis Paylor, age 26, Baltimore; Milshenna Peoples, age 29, of Baltimore; and
Michelle Ricks, age 43, Edgewood, Maryland.Other DPSCS employee: Michelle McNair, age 22, Baltimore.
Outside supplier: Raylanair Reese, age 31; and
Linnard Wortham, a/k/a Stu, age 29, of Glen Burnie, Maryland.The following eight defendants were charged in the original indictment and remain in the superseding indictment.
Inmates: Jamar Anderson, a/k/a Hammer and Hamma Head, age 24, of Baltimore; Derius Duncan, a/k/a D or Lil D, age 24, of Baltimore; and
Joseph Young, a/k/a Monster, age 30, of Baltimore.
Current and former correctional officers: Antonia Allison, age 27; of Baltimore; Ebonee Braswell, age 27; of Baltimore; Chania Brooks, age 28, of Baltimore; and
Tiffany Linder, age 27, of Baltimore.
Outside suppliers: James Yarborough, a/k/a J.Y., age 27, of Baltimore.The following 16 defendants were charged in the original indictment unsealed in April 2013 and have pleaded guilty to their participation in the racketeering conspiracy.
Inmates: Tavon White, age 36, of Baltimore; Steven Loney, age 24, of Baltimore; Kenneth Parham, age 24, of Baltimore; and
Jermaine McFadden, age 25, of Baltimore.Correctional officers: Kimberly Dennis, age 26, of Baltimore; Jasmin Jones, a/k/a/ J.J., age 25, of Baltimore; Taryn Kirkland, age 23, of Baltimore; Katrina Laprade, a/k/a Katrina Lyons, age 31, of Baltimore; Vivian Matthews, age 26, of Essex, Maryland; Jennifer Owens, a/k/a/ O and J.O., age 31, of Randallstown; Adrena Rice, age 25, of Baltimore; Katera Stevenson, a/k/a KK, age 25, of Baltimore; and
Jasmine Thornton, a/k/a J.T., age 26, of Glen Burnie.Outside suppliers: Tyesha Mayo, age 30; of Baltimore; Tyrone Thompson, age 36, of Baltimore; and
Teshawn Pinder, age 24, of Baltimore.Ralph Timmons, Jr., age 35, of Baltimore, was also charged in the original indictment and is deceased.
20 November 2013
Wentzville, Missouri, Man Indicted for Multiple Armed Bank Robberies and Shooting Missouri State Highway Patrol TrooperRead the Press Release
St. Louis, MO – A joint, cooperative investigation by the Federal Bureau of Investigation and multiple local law enforcement agencies has resulted in the federal grand jury returning am indictment against WARREN J. GLADDERS, Wentzville, Missouri, for multiple armed bank robberies committed by Gladders between October 2012 and September 2013. Following Gladders’ final armed bank robbery on September 20, 2013, Gladders was pursued and captured by a Missouri State Highway Patrol trooper. During the course of the capture, Gladders fired four rounds at the trooper. One round struck the trooper in his protective ballistic vest. The trooper returned fire, disabling Gladders and effectuating his arrest.
"The FBI and our local and state law enforcement partners have a close working relationship, especially when bank robberies involve physical violence," said Dean C. Bryant, Special Agent in Charge of the FBI St. Louis Division. "As a result of the partnerships, 90% of the bank robberies last year in the entire Eastern Missouri have been solved."
If convicted, each charge of armed bank robbery carries a maximum penalty of 20 years in prison and/or fines up to $250,000. For his use and discharge of the firearm, Gladders is facing a maximum possible penalty of life in prison. Gladders also faces an additional maximum possible penalty of up to 10 years in prison for his possession of an unregistered "sawed-off" shotgun on September 20, 2013, as well. In determining the actual sentences, a judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
In addition to the Federal Bureau of Investigation, this case is being investigated by the Missouri State Highway Patrol, the Warren County Sheriff’s Department, the St. Charles County Sheriff’s Department, the Creve Coeur Police Department, the Montgomery County Sheriff’s Department, the Jonesburg Police Department and the Wright City Police Department, along with coordination by the Warren County, St. Charles County and St. Louis County Prosecuting Attorneys’ Offices.
As is always the case, charges set forth in an indictment are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.
Waterloo Tax Return Preparer Sentenced to Prison for Preparing and Filing Fraudulent Tax ReturnsRead the Press Release
A woman who formerly operated her own tax return preparation business and prepared and filed fraudulent federal tax returns was sentenced November 19, 2013, to over a year in federal prison.
Victoria Jones, 49, from Waterloo, Iowa, received the prison term after an August 16, 2013, guilty plea to one count of aiding and assisting the preparation and filing of a false and fraudulent tax return.
In a plea agreement, Jones, who owned and operated a tax return preparation business in Waterloo, admitted she prepared and filed a false tax return on behalf of a client, fraudulently increasing the amount of the client’s refund by falsely claiming inflated business expenses and itemized deductions and falsely claiming the client was entitled to a tax credit. Jones further admitted she filed multiple other similarly false tax returns between 2007 and 2010. Finally, Jones admitted that the false and fraudulent tax returns she prepared and filed resulted in at least $30,000 in unwarranted refunds for her clients.
Jones was sentenced in Cedar Rapids by United States District Court Chief Judge Linda R. Reade. Jones was sentenced to 15 months’ imprisonment and fined $15,000. A special assessment of $100 was imposed, and she was ordered to make $4,833 in restitution the Internal Revenue Service. She must also serve a one-year term of supervised release after the prison term. There is no parole in the federal system.
"Tax return preparers have a duty to their clients to prepare tax returns that comply with the law and are accurate," said Sybil Smith, IRS Criminal Investigation Special Agent in Charge. "Taxpayers should not pay good money for bad advice."
Jones was released on conditions previously set by the United States District Court and is to surrender to the United States Marshal on December 16, 2013.
The case was prosecuted by Assistant United States Attorney Anthony Morfitt and investigated by the Internal Revenue Service Criminal Investigation Division.
Court file information is available at https://ecf.iand.uscourts.gov/. The case file number is 13-CR-02015.
Washington County Man and Woman Sentenced to Imprisonment for Conspiracy to Distribute MethamphetamineRead the Press Release
DAVENPORT, IA – On November 20, 2013, Kurt James Brookhart, age 46, was sentenced by United States District Judge John A. Jarvey to 110 months’ imprisonment for conspiracy to distribute at least 500 grams of a mixture or substance containing methamphetamine and 50 grams of actual methamphetamine, announced United States Attorney Nicholas A. Klinefeldt. Brookhart was also ordered to serve five years of supervised release following the imprisonment, and to pay $100 towards the Crime Victims Fund.
In a related case, Nahida Amira Buchheit, age 38, was also sentenced on November 20, 2013, by United States District Judge John A. Jarvey to 68 months’ imprisonment for conspiracy to distribute five grams or more of actual methamphetamine. Buchheit was also ordered to serve four years of supervised release following the imprisonment, and to pay $100 towards the Crime Victims Fund.
Beginning in approximately November 2011 and continuing until about April 10, 2012, Brookhart and Buchheit conspired with Tony Henry Young, Cesar Alexis Gonzalez, and others to distribute methamphetamine in the Washington County, Iowa, area. During this time period Brookhart and Young received “ice” (also known as “crystal”) methamphetamine from Young’s nephew, Gonzalez. Gonzalez obtained the methamphetamine from a source in Arizona, and then shipped the methamphetamine via parcel services to Brookhart’s residence in Wellman, Iowa, where Brookhart resided with Young and Buchheit. Brookhart received a portion of the methamphetamine from each package as did Young. Brookhart distributed some amount of that methamphetamine to other individuals. On March 22, 2012, law enforcement intercepted a parcel sent by Gonzalez to the Wellman residence. That parcel contained approximately 200 grams of ice methamphetamine.
On October 16, 2012, Chief Judge James E. Gritzner sentenced Tony Henry Young to 135 months imprisonment and five years of supervised release following imprisonment for conspiracy to distribute at least 500 grams of a mixture or substance containing methamphetamine and 50 grams of actual methamphetamine. Cesar Alexis Gonzalez has pled guilty to conspiracy to distribute at least 500 grams of a mixture or substance containing methamphetamine and 50 grams of actual methamphetamine, and is pending sentencing.
This case was investigated by the Washington-Louisa County Drug Task Force and the Iowa Department of Public Safety - Division of Narcotics Enforcement. The case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
(Download Press Release )
U.S. Attorney Laura Duffy to Host Screening of “Out of Reach,” A Short Film About Prescription Drug Abuse Created by A Teen FilmmakerRead the Press Release
SAN DIEGO – U.S. Attorney Laura Duffy will host a special screening of “Out of Reach,” a short documentary about prescription drug abuse created by a teen filmmaker, on Wednesday evening, November 20, at Junipero Serra High School.
This is the first “Out of Reach” screening to take place on the West Coast. Cyrus Stowe, a 17-year-old high school student, interviews friends, classmates, community members and others about prescription drug abuse and their views of what it means to abuse prescription drugs. It was created in collaboration with director Tucker Capps (of A&E’s “Intervention”) and The Partnership at Drugfree.org's Medicine Abuse Project.
The film screening will be followed by a panel discussion moderated by U.S. Attorney Duffy. Local experts will examine the scope of the problem and what’s being done in San Diego County to reduce prescription drug abuse.
In an effort to raise awareness of the disturbing trends, U.S. Attorney Duffy has joined The Partnership at Drugfree.org in The Medicine Abuse Project, a five-year action campaign that aims to prevent half a million teens from abusing medicine by the year 2017 and advises parents and others to take a pledge to take control of their medicine cabinets.
WHAT: Screening of “Out of Reach,” a teen-made documentary on prescription drug abuse
WHO: MODERATOR: Laura Duffy, United States Attorney for the Southern District of California
PANELISTS: Tom Lenox, Supervisory Special Agent Tactical Diversion Squad, Drug Enforcement Administration San Diego
Dr. Roneet Lev, Director of Operations, Scripps Mercy Hospital Emergency Department, San Diego County Prescription Drug Abuse Medical Task Force
Sherrie Rubin, Director, The Hope2Gether Foundation, Prescription Medication, Drug and Alcohol Education and Awareness
WHEN: Wednesday, November 20th, 2013
WHERE: Junipero Serra High School, 5156 Santo Road, San Diego, 92124.
WHY: One out of five high school juniors in San Diego County say they’ve misused prescription drugs. In the last five years, unintentional deaths caused by prescription drugs rose by 22 percent in San Diego County, according to the latest Report Card issued by the Prescription Drug Abuse Task Force earlier this month.
Two Virgin Islands Residents Indicted on Drug Trafficking ChargesRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Ronald W. Sharpe, United States Attorney for the District of the Virgin Islands, Mark R. Trouville, Special Agent in Charge, U.S. Drug Enforcement Administration (DEA), Miami Field Division, Vito S. Guarino, Special Agent in Charge, U.S. Drug Enforcement Administration, Caribbean Division, and Angel M. Melendez, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI), San Juan and U.S. Virgin Islands, announce the indictment of Dwight Iva Durant, 44, a Transportation Security Administration (TSA) Supervisor, and Shawn Dowe, 29, both of the Virgin Islands, for their alleged participation in a drug trafficking conspiracy. Defendant Durant was arrested yesterday in St. Thomas, United States Virgin Islands, where he made his initial appearance in federal court today. Dowe was arrested in California and will make his initial appearance in federal court tomorrow. The indictment was returned in Miami, Florida, where the defendants will stand trial.
The indictment, filed on November 14, 2013, and unsealed yesterday, charges Dwight Iva Durant and Shawn Dowe, each, with conspiracy to distribute five or more kilograms of cocaine and aiding and abetting the possession with intent to distribute cocaine, in violation of Title 21, United States Code, Sections 841(a)(1) and 846. If convicted, the defendants each face a mandatory minimum sentence of 10 years in prison and a possible statutory maximum sentence of life.
This case is a result of the Organized Crime Drug Enforcement Task Force (OCDETF), a partnership between federal, state and local law enforcement agencies. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
Mr. Ferrer commended the investigative efforts of the DEA West Palm Beach Task Force which is comprised of the following agencies: Palm Beach County Sheriff’s Office, West Palm Beach Police Department, Jupiter Police Department, Delray Beach Police Department, Boynton Beach Police Department, and North Bay Village Police Department. In addition, Mr. Ferrer commended the investigative efforts of DEA Miami, DEA San Juan, ICE-HSI, Sunrise Police Department, and U.S. Transportation and Security Administration. The case is being prosecuted by Assistant U.S. Attorney Dustin M. Davis.
An indictment is only an accusation and the defendants are presumed innocent until proven guilty beyond a reasonable doubt.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Two Virgin Islands Residents Indicted on Drug Trafficking ChargesRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Ronald W. Sharpe, United States Attorney for the District of the Virgin Islands, Mark R. Trouville, Special Agent in Charge, U.S. Drug Enforcement Administration (DEA), Miami Field Division, Vito S. Guarino, Special Agent in Charge, U.S. Drug Enforcement Administration, Caribbean Division, and Angel M. Melendez, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI), San Juan and U.S. Virgin Islands, announce the indictment of Dwight Iva Durant, 44, a Transportation Security Administration (TSA) Supervisor, and Shawn Dowe, 29, both of the Virgin Islands, for their alleged participation in a drug trafficking conspiracy. Defendant Durant was arrested yesterday in St. Thomas, United States Virgin Islands, where he made his initial appearance in federal court today. Dowe was arrested in California and will make his initial appearance in federal court tomorrow. The indictment was returned in Miami, Florida, where the defendants will stand trial.
The indictment, filed on November 14, 2013, and unsealed yesterday, charges Dwight Iva Durant and Shawn Dowe, each, with conspiracy to distribute five or more kilograms of cocaine and aiding and abetting the possession with intent to distribute cocaine, in violation of Title 21, United States Code, Sections 841(a)(1) and 846. If convicted, the defendants each face a mandatory minimum sentence of 10 years in prison and a possible statutory maximum sentence of life.
This case is a result of the Organized Crime Drug Enforcement Task Force (OCDETF), a partnership between federal, state and local law enforcement agencies. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
Mr. Ferrer commended the investigative efforts of the DEA West Palm Beach Task Force which is comprised of the following agencies: Palm Beach County Sheriff’s Office, West Palm Beach Police Department, Jupiter Police Department, Delray Beach Police Department, Boynton Beach Police Department, and North Bay Village Police Department. In addition, Mr. Ferrer commended the investigative efforts of DEA Miami, DEA San Juan, ICE-HSI, Sunrise Police Department, and U.S. Transportation and Security Administration. The case is being prosecuted by Assistant U.S. Attorney Dustin M. Davis.
An indictment is only an accusation and the defendants are presumed innocent until proven guilty beyond a reasonable doubt.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at http://www.justice.gov/usao-sdfl/pr. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Treasurer for Road District, Fire District Pleads Guilty to Embezzling $1.5 MillionRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that the former treasurer of both the Wellington Napoleon Fire Protection District and Special Road District pleaded guilty in federal court today to a fraud scheme in which he embezzled more than $1.5 million from the two districts.
Leland Ray Kolkmeyer, 58, of Wellington, Mo., waived his right to a grand jury and pleaded guilty before U.S. District Judge Gary A. Fenner to a federal information that charges him with two counts of mail fraud.
Kolkmeyer was appointed as treasurer of the road district in 1996. Kolkmeyer was first elected treasurer of the fire district in 1997. He resigned from both positions on Feb. 25, 2013. The offices of both the fire district and the road district are located in Wellington.
Road District Fraud Scheme
Kolkmeyer admitted that he stole approximately $900,000 from the road district from August 1998 to Feb. 12, 2013. Kolkmeyer made checks payable from the road district’s bank account to himself and others for his own benefit without the knowledge, authorization or consent of the road district. The government alleges that Kolkmeyer fraudulently transferred $939,485 from the road district’s bank account to his own bank account or to pay bills on his behalf.
Kolkmeyer, in his position as treasurer of the road district, made false statements and material omissions to the Special Road District Board concerning the checks that were made payable to himself and to others on his behalf.
Fire District Fraud Scheme
Kolkmeyer also admitted that he stole more than $500,000 from the fire district from August 1998 to Feb. 17, 2013. The government alleges that Kolkmeyer fraudulently transferred $590,674 from the fire district bank accounts to his own bank account or to pay bills on his behalf.
Kolkmeyer, in his position as treasurer of the fire district, made false statements and material omissions to the Fire Protection District Board concerning the checks that were made payable to himself and to others on his behalf.
The federal information requires Kolkmeyer to forfeit to the government $1,530,159, which represents the total amount he embezzled from the two districts.
Under federal statutes, Kolkmeyer is subject to a sentence of up to 40 years in federal prison without parole, plus a fine up to $500,000 and an order of restitution. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Paul S. Becker. It was investigated by the FBI.
Three Investment Advisors Sentenced in California <br /> for $1 Billion High-yield Investment FraudRead the Press Release
Three former investment advisers were sentenced on Nov. 19, 2013 for their roles in attempting to defraud a wealthy investor of $1 billion through a high-yield investment fraud scheme.
Acting Assistant Attorney General Mythili Raman of the Criminal Division and U.S. Attorney Andre Birotte Jr. of the Central District of California made the announcement.
William J. Ferry, a former stock broker and investment advisor; Dennis J. Clinton, a former real estate investment manager; and Paul R. Martin, a former senior vice president and managing director of Bankers Trust, were convicted on July 31, 2012, of conspiracy, mail fraud and wire fraud. The investor they attempted to defraud was, in reality, part of an undercover FBI team that posed as wealthy investors and investment managers to stop fraudsters before they actually harmed victims.
Ferry, 71, of Newport Beach, Calif., was sentenced to serve 15 months in prison. Clinton, 65, of San Diego, Calif., was sentenced to serve 30 months in prison. Martin, 64, of New Jersey, was sentenced to 30 months in prison.
Evidence at trial established that from February to December 2006, Ferry, Clinton, Martin and others conspired to promote a high-yield investment fraud scheme that promised an extremely high return at little or no risk to principal. The defendants claimed their investment program was a “Fed Trade Program” that was regulated by the Federal Reserve Bank, that they had to follow strict Fed guidelines, and that a Fed trade administrator administered their program, with compliance duties handled by a Fed compliance officer.
Investors also were told that once the investment program passed compliance, it would become registered in Washington, D.C., with the Fed. The defendants falsely represented to FBI undercover agents that they would arrange for them to meet a Federal Reserve official and/or the chairman of the board of a major U.S. bank to confirm the existence of the defendants’ investment program. The defendants falsely claimed that these Fed investment programs existed primarily to generate funds for project funding and humanitarian purposes, such as Hurricane Katrina relief. The promised profits from investing in a Fed program had to be divided in equal amounts, with one portion going to some humanitarian purpose, another portion to some kind of project financing and the remainder to the investor. The defendants represented to the undercover agents that the agents’ offshore bank account would be managed by a Swiss banker who was already managing billions of dollars for the defendants.
Throughout the scheme, Ferry acted as an underwriter and member of the compliance team; Martin acted as a banking expert; and Clinton acted as a trouble shooter during the compliance phase and transfer of funds to the Swiss banker.
Another conspirator, Brad Keith Lee, of California, who acted as the contact with the Swiss banker, pleaded guilty to conspiracy and wire fraud on April 13, 2009, and was sentenced to 24 months in prison on Jan. 11, 2010. Oregon resident John Brent Leiske, who acted as a trader during the scheme, pleaded guilty in the District of Oregon to conspiracy, mail fraud and wire fraud on Jan. 24, 2012, and was sentenced to 120 months in prison on Feb. 14, 2013.
This continuing investigation is being conducted by the FBI. This case is being prosecuted by Senior Litigation Counsel David Bybee and Trial Attorney Fred Medick of the Criminal Division’s Fraud Section.Tampa Man Sentenced for Stealing Government MoneyRead the Press Release
Tampa, Florida – U.S. District Judge Steven D. Merryday today sentenced Tampa resident Thomas Crouch (66) to one year, and one month in federal prison for theft of government funds. The court also entered a forfeiture money judgment in the amount of $124,944.00, the proceeds of the charged criminal conduct.
Crouch pleaded guilty to a one-count indictment on August 28, 2013.
According to court documents, Crouch’s Aunt (Naomi Page) had been a recipient of U.S. Department of Veteran Affairs (“VA”) Dependency and Indemnity Compensation (“DIC”) benefits, which she received based upon her husband's military service, up until her death on January 25, 2010. The VA periodically sought to verify Page’s continued right to receive benefit payments and, in the process of doing so, sent marital status questionnaires to Page to determine her continued eligibility, attempting to verify that she had not remarried. The VA did not receive a response from Page, which prompted a suspension of her benefits. After finally receiving a response from Page, shortly before her death, the VA subsequently reinstated Page's benefits. Page died on January 25, 2010.
On January 26, 2010, when reinstating Page's benefits, the VA mistakenly sent Page a check in the amount of $122,636.00. Upon discovering the error, the VA promptly sent out a letter on February 12, 2010, asking for the check to be returned or that a personal check be sent back to the VA. The VA investigated the matter and determined that the VA check had already been negotiated, purportedly with Page’s signature on the back of the check. Further investigation revealed that Page had died before the check had been issued, thus could not have contained her signature. Additionally, not having received notice of Page's death, the VA also sent Page two other checks, in the amount of $1,154.00 each. These checks, which also appeared to contain Page's signature, were negotiated after her death.
A VA investigation revealed that Crouch, Page’s Power of Attorney, had forged Page's signature after her death and negotiated the $124,944.00 check, to which neither he nor Page was entitled. When questioned by law enforcement, Crouch initially denied that Page had ever received paper checks from the VA, but later admitted that he had forged Page's signature on the checks and spent the money on a boat, a van, a motorcycle and a truck, and had given family members some money. Crouch also acknowledged that he received letters from the VA about the overpayment, but had ignored the letters and spent the money.
This case was investigated by the U.S. Department of Veterans Affairs, Office of the Inspector General. It was prosecuted by Assistant United States Attorney Amanda C. Kaiser.
Tacoma pimp sentenced to 25 years for sex-Trafficking two VictimsRead the Press Release
Under Title 18, United States Code, Section 1591PORTLAND, Ore. – U.S. District Judge Anna J. Brown sentenced Christopher Cool Wilmer, 30, of Tacoma, to 25 years in prison, followed by 10 years of supervised release, for four counts of sex trafficking involving a 16-year-old and an 18-year-old. In May 2013, just weeks before trial, Wilmer pled guilty to the indictment.
According to court documents filed for the sentencing hearing, the investigation began on February 22, 2012, when police responded to a call for help from the 18-year-old victim at a Motel 6. She reported that her pimp “Cool” had locked her out of a room where he was also pimping another young woman. Portland Police officers learned that the registered guest to that room was Christopher Cool Wilmer who had previous arrests for promoting prostitution. Officers went to the room where they found the 16-year-old victim and a john. Although the victim initially denied knowing Wilmer, Officers later observed pictures on her cell phone showing Wilmer, including pictures of him flexing under the caption “Daddy Cool,” and in a bubble bath. Wilmer manipulated the 16 year old victim into performing numerous commercial sex acts. Text messages sent to Wilmer described her pain and humiliation at having been manipulated and coerced by the defendant into performing these acts.
Further investigation uncovered records of Wilmer’s travel with the victims on Amtrak and Greyhound between Oregon and Washington. Agents also located 30 postings to the escort section of Backpage.com advertising the services of the 16-year-old minor between January and February 2012. Ads featured the minor in provocative poses and set prices for these “services” for $60 to $125 per hour. Witness testimony established Wilmer placed new sex-trafficking recruits on 90-day probation periods to evaluate their performance. He also established certain “rules” to gain compliance such as prohibiting the minor victim from eating food until she earned her daily quota from walking the “track” (Southeast 82nd) performing commercial sex acts. Wilmer demanded that the minor always answer his phone calls, stay ready to work at all times, and never look another man in the eyes.
The defendant argued against labeling him as a “pimp,” and called witness Anthony Marcus, an anthropologist, who testified that a more accurate term for Wilmer’s role was “market facilitator.” The government countered that Wilmer branded himself a pimp with arm tattoos that read: “Hoe Hard [or] Hoe Home.” “Federal law prohibits buying or selling children for sex. Safeguarding minors from commercial sexual exploitation is one of the top priorities of my office and the Department of Justice,” stated U.S. Attorney Amanda Marshall. “Contrary to defendant’s assertions that this problem is merely mythical and exaggerated by ‘panicked’ social workers, a recent research study conducted by Portland State University identified at least 469 children who were victims of commercial sexual exploitation in the Portland Metro area between 2009 and 2013. Such data reflects a serious and real problem that my office will continue to combat through aggressive prosecution.”
In crafting an appropriate sentence, Judge Brown noted the terrible nature of the offense and addressed the negative impact it has on victims and our community. She also described as an aggravating factor defendant’s history of devaluing the women around him.
“No child deserves to endure the violence that these girls face every day. They don’t deserve the rape and drug abuse and control that these pimps exert. These kids are not throwaways… they are not somebody else’s problem,” said Greg Fowler, Special Agent in Charge of the FBI in Oregon. “The Child Exploitation Task Force is doing everything it can to recover these girls and get them connected with a support system. But, this is not just a law enforcement problem or a social service problem. This is a community-wide problem, and we need a whole community response to really be effective.”
This case was investigated by the FBI’s Child Exploitation Task Force (CETF), led by two task force detectives from the Tigard Police Department and Portland Police Bureau (PPB). The FBI-sponsored CETF partners with local law enforcement agencies to combat the commercial sexual exploitation of children in the area. Partners include the Portland Police Bureau, Tigard Police Department, Beaverton Police Department, Vancouver Police Department, who work closely with prosecutors from both the U.S. Attorney’s office and Multnomah County District Attorney’s Office. This case was prosecuted by Assistant U.S. Attorney Leah K. Bolstad.
Swansea Man Pleads to Stealing Funds from Railroad Retirement BoardRead the Press Release
The United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today that Mark A. Lewis, 30, of Swansea, pled guilty in the federal district court in East St. Louis to the charge that he stole unemployment benefits from the United States Railroad Retirement Board.
Court proceedings revealed that from January 2013 through May 2013, Lewis fraudulently obtained monies belonging to the Railroad Retirement Board, an agency of the United States, by concealing his employment status in order to receive unemployment benefits.
Lewis is scheduled for sentencing on March 20, 2014, when he faces maximum penalties of 10 years in prison, a $250,000 fine, and up to 3 years of supervised release.
The case was investigated by agents of the Railroad Retirement Board, Office of Investigations. The case is being prosecuted by Assistant U.S. Attorney Liam Coonan.
If you suspect or know of an individual or company that is committing fraud against any U.S. Railroad Retirement Board program, you may report this to the U.S. Railroad Retirement Board’s Office of Inspector General by calling 800.772.4258 or by e-mailing a complaint or information to: [email protected].
St. Louis Man Pleads Guilty to Bank RobberyRead the Press Release
Was Wearing Polka Dot Dress and Wig During Robbery
On November 19, 2013, Arnell L. Edwards, a fifty-year old St. Louis, Missouri, man pled guilty in federal district court, in East St. Louis, to bank robbery, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today. Edwards is scheduled for sentencing on April 7, 2014, at which time he faces a potential sentence of 20 years in prison and a fine of up to $250,000, not more than 5 years of supervised release after his prison term, a mandatory special assessment of $100 and restitution.
Court proceedings revealed that on September 6, 2013, Edwards entered the US Bank in New Athens, Illinois wearing a polka dot dress, wig and sunglasses. He then placed a rag over his mouth, approached a bank teller showing her a hand written note on a small piece of red paper, reading, “STICK UP ALL MONEY,” and stated, “Give me all the money.” The frightened teller removed money from her drawer and placed it on the counter. Edwards picked up the cash and exited the bank. As he ran away, he removed and discarded clothing in a bush and shed near a wooded area, before entering an apartment nearby. Officers used a PA system to contact Edwards, who emerged from his apartment shortly thereafter. A search of the apartment resulted in the discovery of a pad of red Post-It-Notes. The pad found in his apartment matched in size, shape and color the note given to the bank teller.
This case was investigated by the Federal Bureau of Investigation and is assigned to Assistant United States Attorney Daniel T. Kapsak for prosecution.
Springfield Man Sentenced for Armed RobberyRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a homeless Springfield, Mo., man was sentenced in federal court today for the armed robbery of Great Southern Bank.
Dale C. Barkfelt, 35, of Springfield, was sentenced by U.S. District Judge Greg Kays to nine years and seven months in federal prison without parole.
On May 8, 2013, Barkfelt pleaded guilty to using a handgun to rob Great Southern Bank, 1615 W. Sunshine St., Springfield.
According to court documents, Barkfelt entered the bank at approximately 2 p.m. on April 9, 2012, and placed a white plastic grocery bag on a teller counter. Barkfelt pointed a semi-automatic handgun at the teller and told her to “Put it in there.” The teller handed Barkfelt $966 and he left the bank.
Approximately three hours after the robbery, a Springfield police officer recognized Barkfelt in a bank surveillance photo. The officer was familiar with Barkfelt from previous police-related contacts and had been in contact with Barkfelt within the previous week. Barkfelt, who is homeless, was staying at an outdoor camp site near Kansas Expressway and West Sunshine Street, which is in the vicinity of the bank. Barkfelt was arrested the following day.
This case was prosecuted by Supervisory Assistant U.S. Attorney Michael S. Oliver and Assistant U.S. Attorney Abram McGull II. It was investigated by the FBI and the Springfield, Mo., Police Department.