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Thursday 19 September 2013
Dallas Man Sentenced to 150 Months in Federal Prison for Transporting and Shipping Child PornographyRead the Press Release
DALLAS — Danny Jack Harder, 39, was sentenced today by U.S. District Judge Ed Kinkeade to 150 months in federal prison and a lifetime of supervised release, following his guilty plea in March 2013 to one count of transporting and shipping child pornography, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas. Harder has been in custody since his arrest in December 2012 on a related federal criminal complaint.
According to documents filed in the case, the investigation of Harder began on October 25, 2013, when an officer with the Plano Police Department, operating in an undercover capacity, encountered an individual online in a peer-to-peer (P2P) file-sharing network who appeared to have several files containing child pornography.
According to the factual resume filed in the case, on November 15, 2012, special agents with the FBI executed a search warrant at Harder’s residence in Dallas. Harder admitted that he intentionally and knowingly received and transported child pornography via P2P file-sharing software and/or networks. He also acknowledged that his P2P shared folder contained well over 350 videos of child pornography. A forensic review of his computer and computer-related items indicated that he provided the password to his P2P shared folder approximately 265 times in 2011-2012 and that on October 25, 2012, his shared folder contained the equivalent of more than 600 images available for sharing.
The case was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”
The investigation was conducted by the FBI and the Plano Police Department. Assistant U.S. Attorney Lisa J. Miller prosecuted.
Convicted Sex Offender Pleads Guilty to New OffenseRead the Press Release
BOISE — Jeremy E. Durkin, 35, of Coeur d’Alene, Idaho, pleaded guilty in federal court on September 19, 2013, to use of a facility of interstate commerce to transmit information about a minor, U.S. Attorney Wendy J. Olson announced
According to the plea agreement, the matter came to the attention of law enforcement on September 23, 2010, when, during routine cell search at the Idaho State Correctional Institution, a correctional officer found a letter on Durkin's bunk, which referenced a Yahoo e-mail account. The letter, written by Durkin, referred to the intended recipient as “you sexy sixteen-year-old.” In the letter, Durkin is asking someone he referred to in the greeting as “my Love,” to keep his (Durkin’s) Yahoo e-mail account active by logging on to it once a month and deleting all incoming mail. The letter further states: “This way I wont loose [sic] all the photos have up there. I don't really want to ask anybody else cuz there is naked photos of you that I don't want anybody to see.”
The FBI identified the victim as a high school student in Oregon. When interviewed, the youth told investigators that Durkin initiated contact in December 2009 via Facebook. The victim further stated that Durkin (who was not known by the victim prior to that time) persuaded the victim to call him at a telephone number in Idaho. The two spoke telephonically and “hit it off,” according to the victim. Durkin initially gave a false name, but not long after they met online, told the youth his true name. According to the victim, Durkin knew the teenager was 15 years old at the time.
According to the victim, from December 2009 until the summer 2010, Durkin was in constant contact via e-mail, telephone and U.S. Mail. The youth described their relationship as being almost immediately romantic and sexual, and said they exchanged sexually explicit photos. A search of Durkin’s Yahoo! account confirmed the allegations. The two never met in person; their relationship was entirely via telephone, e-mail and U.S. Mail.
In 2005, Durkin pleaded guilty in Kootenai County, Idaho, to one count of lewd conduct with a child under age 16. He was on parole and out of custody at the time the incidents occurred that resulted in the new federal charges. Durkin’s parole was revoked in 2010 and he was returned to prison. He is currently serving a state prison sentence on the Kootenai County case and is scheduled for release in 2016.
The federal charge of using a facility of interstate commerce to transmit information about a minor, when committed by a person convicted of a prior sex offense, is punishable by up to 10 years in prison, a maximum fine of $250,000, and up to lifetime supervised release.
Sentencing is set is for December 2, 2013, before U.S. District Judge Edward J. Lodge at the federal courthouse in Boise.
The case was investigated by the Federal Bureau of Investigation and the Idaho Department of Correction. Both agencies are southern Idaho members of the Idaho Internet Crimes Against Children (ICAC) Task Force, 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.”
Cocke County Woman Who Threatened TBI Agent Sentenced to 51 Months in Federal PrisonRead the Press Release
GREENEVILLE, Tenn. – Kathleen Laws Garrett, 51, of Newport, Tenn., was sentenced on September 19, 2013, to serve 51 months in prison, by the Honorable Leon Jordan, U.S. District Judge. Garrett pleaded guilty to a May 2013 federal indictment charging her and her son, Clayton Carroll Owenby, with threatening to retaliate against a witness.
Garrett’s son, Owenby, had been previously charged in an oxycodone distribution conspiracy, which involved nine individuals obtaining prescriptions for oxycodone from various pain clinics and physicians across the state of Tennessee and then redistributing the drug in the Eastern District of Tennessee. Owenby pleaded guilty to the drug distribution conspiracy and admitted that he obtained 5,718 total dose units (totaling 176,240 milligrams) of oxycodone from multiple physicians.
While in federal custody during the pendency of his drug case, Owenby made numerous phone calls to his mother, Garrett, wherein he threated to physically retaliate against the lead case agent and his family. Garrett also made numerous threats to physically retaliate against the lead case agent and his family as well. Garrett admitted to making these threats in response to the agent’s role in the investigation concerning her son. Owenby also pleaded guilty to threatening to retaliate against a witness and was sentenced on September 5, 2013.
“This sentence reflects that threats of physical harm against agents involved in federal investigations will not be tolerated. Such threats are totally unacceptable and will be aggressively prosecuted by this office,” said U. S. Attorney William C. Killian.
This case is the result of a joint investigation by the Cocke County Sheriff’s Office and Tennessee Bureau of Investigation. Assistant U.S. Attorney Suzanne Kerney-Quillen represented the United States.
Cleveland Man Sentenced to Four Years in Prison for Mortgage Fraud, Other CrimesRead the Press Release
A former paid cooperator for a federal law enforcement agency was sentenced to more than four years in prison today for a variety of crimes related to a mortgage-fraud scheme, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, and Stephen D. Anthony, Special Agent in Charge of the FBI’s Cleveland office.
Paul R. Tomko, age 40, of Cleveland, pleaded guilty in March to one count of conspiracy to commit wire fraud and wire fraud, two counts of wire fraud, one count of student loan fraud and one count of concealment.
U.S. District Judge Christopher Boyko sentenced Tomko to 52 months in prison and ordered him to pay $327,044 in restitution.
“Paul Tomko has been sentenced, yet again, for being a fraudster to the tune of hundreds of thousands of dollars,” Anthony said. “The FBI hopes he has finally learned his lesson.”
Tomko pleaded guilty in 2009 to charges related to a mortgage fraud scheme and was sentenced to three years probation in the United States District Court for the Northern District of Ohio, in Case No.1:09CR29, according to court documents.
In 2007, Tomko had signed a paid cooperation agreement with a federal law enforcement agency wherein Tomko was to take full responsibility and make full disclosure of his own mortgage fraud-related violations and assist that agency in other mortgage fraud investigations. Tomko was paid approximately $19,500 in 2007 and $7,500 in 2008 by that agency under their agreement. Tomko concealed this income from the Probation Department and also falsely stated that the law enforcement agency had approved Tomko operating a mortgage business (The Mortgage House) from his residence, according to court documents.
Tomko, through his company, OKMOT (“Tomko” backwards) Real Estate Company, recruited his housekeeper to apply for fraudulent mortgage loans for four properties between 2006 through 2007. Tomko falsely inflated the income and assets of his housekeeper in order for her to qualify for these loans, according to court documents.
Once the loans closed, Tomko fraudulently received approximately $100,000 of the proceeds by filing mechanics liens for work not performed and directing funds to himself and/or companies he owned and controlled, as well as to others not charged in this conspiracy, according to court documents.
Tomko concealed income he received as a cooperator from a federal law enforcement agency, in order to fraudulently obtain student aid and grants from the United States Department of Education, according to court documents.
The case is being prosecuted by Assistant U.S. Attorneys Christian H. Stickan and Christos M. Georgalis, following investigation by agents of the FBI, Cleveland Office and The Office of the Inspector General for the United States Department of Education.
Central Florida Drug Traffickers Sentenced to Federal Prison TermsRead the Press Release
Orlando, Florida - U.S. District Judge Charlene Edwards Honeywell today sentenced Maurice Evans (44, Orlando) to 11 years and 8 months in federal prison and James Marvin Lovett (43, Cocoa) to 12 years and 7 months in federal prison for conspiracy to possess with the intent to distribute and to distribute more than 5 kilograms of cocaine. Evans and Lovett pleaded guilty on June 24, 2013.
According to court documents, on January 29, 2013, law enforcement agents began monitoring communications between Evans and Lovett. Agents learned of their contact with a cocaine supply source located elsewhere in Florida. After making several trips to the supply source to obtain kilograms of cocaine, on February 13, 2013, agents arrested Lovett, who had three kilograms of cocaine in his car. Shortly afterwards, agents intercepted a call from Evans and the source of supply, telling the source to drop their telephones because Lovett had been arrested. Agents eventually executed a search warrant at Lovett’s house and found a cocaine re-processing operation, including a hydraulic press, press plates, aluminum molds, packaging material, scales, cut material, mixing utensils, a microwave, and cocaine.
This case was investigated by the Drug Enforcement Administration and Brevard County Sheriff's Office. It was prosecuted by Assistant United States Attorney Vincent A. Citro.
Campaign Manager Sentenced to 28 Months in Prison for Role in Conduit Contribution SchemeRead the Press Release
Deirdre M. Daly, Acting United States Attorney for the District of Connecticut, and Rhonda M. Glover, Acting Special Agent in Charge of the Federal Bureau of Investigation, announced that JOSHUA NASSI, 35, formerly of Fairfield, was sentenced today by U.S. District Judge Janet Bond Arterton in New Haven to 28 months of imprisonment, followed by one year of supervised release, for his role in a scheme to direct illegal campaign contributions into the campaign of a candidate for the U.S. House of Representatives. NASSI also was ordered to pay a $6,000 fine.
“Seeking to gain an edge in a high-pressure congressional campaign, this defendant traded promises of legislative action in exchange for illegal campaign contributions,” stated Acting U.S. Attorney Daly. “His criminal behavior undermines the principles of transparency and fairness that are the bedrock of our electoral and political processes. We are confident that this prison term, along with those previously imposed in this case, send a clear message to campaign workers whose ethics may be tested.”
“Good honest government, for the people and by the people, has no room for the actions of political insiders like Mr. Nassi, who was willing to trade influence over pending legislation in exchange for contributions to a federal campaign that he was steering,” stated Acting FBI Special Agent in Charge Glover. “The election process in this country is the very foundation of democratic society and the integrity of that process must be protected. Today’s sentence is appropriate and just, and serves as notice that the FBI and the U.S. Attorney’s Office are fully committed to investigating and prosecuting corruption at all levels of government.”
According to court documents and statements made in court, in August 2011, the State of Connecticut applied for a court order enjoining Roll Your Own (“RYO”) smoke shops from continuing to operate without complying with state law governing tobacco manufacturers. RYO smoke shops are retail businesses that sell loose smoking tobacco and cigarette-rolling materials and offer customers the option of paying a “rental” fee to insert the loose tobacco and the rolling materials into a RYO machine, which is capable of rapidly rolling large quantities of cigarettes. Customers did not pay a tax on the RYO cigarettes when rolled by the RYO machines, in contrast to cigarettes purchased over-the-counter.
Fearing that the Connecticut General Assembly would enact legislation harmful to RYO smoke shop owners’ business interests during the 2012 legislative session, certain RYO smoke shop owners and their associates engaged in a scheme to direct conduit campaign contributions into the campaign of Christopher Donovan, a candidate for the U.S. House of Representatives. At the time, Donovan was also the Speaker of the Connecticut House of Representatives. As part of the scheme, the co-conspirators recruited multiple individuals to serve as conduit contributors to the campaign. These individuals permitted checks to be written in their own names to the campaign and were then reimbursed with cash, thereby concealing the fact that RYO smoke shop owners were contributing to the campaign.
At the time, NASSI was the campaign manager for the Chris Donovan for Congress campaign.
In November and December 2011, participants in the scheme made four $2,500 conduit contributions to the Chris Donovan for Congress campaign. On approximately January 31, 2012, the campaign submitted to the Federal Election Commission (“FEC”) a report of campaign committee’s receipts and disbursements for the period October 1, 2011 through December 31, 2011. The report falsely stated the source and amount of the four $2,500 contributions that were received and deposited by the campaign committee during that time period.
On April 3, 2012, Harry “Ray” Soucy, who had helped facilitate the scheme, contacted NASSI and told him that RYO owners wanted to provide additional contributions to the campaign. That same day, the Connecticut General Assembly’s Joint Committee on Finance, Revenue and Bonding voted in favor of Senate Bill 357, legislation that would have deemed RYO smoke shop owners to be tobacco manufacturers under Connecticut law, a designation that would have subjected RYO smoke shop owners to a substantial licensing fee and tax increase. Later that day, Soucy contacted NASSI again to state his displeasure with the vote.
Approximately one week later, Soucy, RYO smoke shop owner Paul Rogers and an FBI special agent working in an undercover capacity delivered four $2,500 checks in the names of conduit contributors to NASSI. On April 23, 2012, NASSI advised Soucy that one of the checks had bounced and Soucy indicated that the contributor had been given cash to deposit. NASSI stated that the campaign needed the check by midnight the following day, and Soucy delivered a replacement check by that deadline. On May 2, 2012, the campaign submitted a fundraising report to the FEC stating that the four contributions given in April were from the conduit contributors when, in fact, they were not.
Over the next two weeks, NASSI continued to advise Soucy on the status of the RYO legislation and Soucy told NASSI that he would be delivering $10,000 if the legislation died. On May 9, 2012, the legislative session ended and the legislation had not been called for a vote by either chamber of the General Assembly.
On May 14, 2012, Soucy provided Rogers with $10,000 in cash to be used to reimburse additional conduit contributors. Soucy then collected three $2,500 checks made payable to the Donovan for Congress campaign from conduit contributors, and, at Nassi’s request, one $2,500 check from a conduit contributor that was payable to a political party. Soucy delivered the four checks to Nassi at a political event later that day.
On May 16, 2012, Soucy informed the Donovan for Congress campaign finance director Robert Braddock that one of the contributions had been made in the name of an RYO shop owner and should not be deposited, and Braddock stopped the check from being deposited. Soucy then met NASSI and provided him with a replacement $2,500 check in the name of someone who was not affiliated with any RYO shops.
On April 12, 2013, NASSI pleaded guilty to one count of conspiracy to make false statements to the Federal Election Commission and to impede the FEC’s enforcement of federal campaign finance laws.
Rogers, Soucy, Braddock and four others have also been convicted of charges stemming from this scheme.
This matter is being investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorneys Christopher M. Mattei and Eric J. Glover.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
[email protected]CITGO Agrees to Reduce Air Pollution and Pay Penalty to Resolve Clean Air Act Violations at Two RefineriesRead the Press Release
The Department of Justice and U.S. Environmental Protection Agency (EPA) announced that Houston-based CITGO Petroleum Corp. (CITGO) has agreed to pay a $737,000 civil penalty and to implement projects to reduce harmful air pollution, resolving alleged violations of the Clean Air Act (CAA) at its petroleum refining facilities located in Lemont, Ill., and Lake Charles (Westlake), La.
In addition to the penalty, today’s settlement, lodged in U.S. District Court for the Southern District of Texas, requires that CITGO implement projects that are expected to reduce emissions of volatile organic compounds (VOCs), including toxics, by more than 100 tons over the next five years.
“The terms of this settlement require projects to significantly reduce harmful air pollution, including reductions in benzene emissions and other cancer-causing air toxics,” said Robert G. Dreher, Acting Assistant Attorney General of the Justice Department’s Environment and Natural Resources Division. “This agreement will benefit communities across the United States with cleaner healthier air and will bring mobile sources of pollution under control, according to the standards of the Clean Air Act.”
“Producing fuel for cars sold in the U.S. carries a requirement to meet Clean Air Act standards,” said Cynthia Giles, Assistant Administrator for EPA's Office of Enforcement and Compliance Assurance. “The innovative technologies that CITGO is required to install will reduce the impact of its fuel production on the environment and help protect communities from harmful air pollution.”
To reduce VOC emissions, including toxics, the settlement requires that CITGO install and maintain a geodesic dome on one of the fuel storage tanks at its Lemont refinery, as well as carbon adsorption systems on two fuel storage tanks at its Lake Charles refinery.
In a complaint filed at the same time as the settlement, EPA alleged that the Lake Charles refinery produced fuel that exceeded the refinery’s annual average emissions limit for mobile source air toxics, including benzene. EPA further alleged that CITGO failed to sample and test reformulated gasoline blendstock at its Lemont refinery, as required by the CAA.The CAA requires that all fuel produced, imported, and sold in the United States meet certain emissions standards for harmful pollutants, such as benzene and other cancer-causing air toxics. Air toxics emissions from vehicles and other mobile sources are of particular concern in the areas closest to where they are emitted, but can also be transported long distances, affecting the health and welfare of people in other geographic areas. Some of these toxic compounds can persist in the environment and bioaccumulate in the food chain, further spreading their harmful effects.
The sampling, testing, recordkeeping, and reporting requirements of the fuels program provide the foundation for EPA’s compliance program. Refiners that violate these requirements undermine the integrity of the fuels regulations and hinder the Agency’s ability to ensure gasoline complies with fuel quality and performance standards, potentially leading to an increase in harmful air pollution. Today’s settlement supports EPA’s efforts to reduce toxic air pollution from facilities that threaten communities and the environment.
CITGO is a refiner and marketer of transportation fuels, lubricants, petrochemicals and other industrial products. CITGO is owned by PDV America Inc., an indirect, wholly-owned subsidiary of Petróleos de Venezuela, S.A. (PDVSA), the national oil company of the Bolivarian Republic of Venezuela.
The settlement is subject to a 30-day public comment period and final court approval. It will be available for viewing at www.justice.gov/enrd/Consent_Decrees.html.
More information on the settlement: www2.epa.gov/enforcement/citgo-petroleum-corporation-clean-air-act-settlement.
Buffalo Gang Members Plead Guilty to Cocaine ChargesRead the Press Release
BUFFALO, N.Y.--U.S. Attorney William J. Hochul, Jr. announced today that Tramell McGee, 30, who was convicted of conspiracy to trafficking cocaine, was sentenced to 60 months in prison by Chief U.S. District Judge William M. Skretny.
According to Assistant U.S. Attorney Timothy C. Lynch, who handled the case, the defendant was a members of the "Camp Street Boys" which operated on Buffalo's East Side. McGee was one of the leaders of the gang. The defendant and others distributed the crack cocaine in the vicinity of Jefferson Avenue and Genesee Street in Buffalo.
The defendant was arrested along with 10 others in June 2011, to date eight of the defendants have been convicted.
“This represents the second gang member convicted in Federal Court this week,” said U.S. Attorney Hochul. “We will continue to work with our law enforcement partners to remove all such criminals from the streets of our communities.”
The sentencing is the culmination of an investigation on the part the Federal Bureau of Investigation's Safe Streets Task Force, under the direction of Acting Special Agent in Charge Brian P. Boetig and the Drug Enforcement Administration, under the direction of Special Agent in Charge Brian R. Crowell, New York Field Division.Bourg, Louisiana Man, Roddy Vizier, Sentenced for Child Pornography ChargesRead the Press Release
RODDY VIZIER, 41, of Bourg, Louisiana, was sentenced today before U.S. District Court Jane Triche Milazzo to 66 months incarceration for crimes involving the sexual exploitation of children, announced U. S. Attorney Dana J. Boente. Following the term in incarceration, VIZIER will be placed on ten years of supervised release and will be required to register as a sex offender.
According to court documents, on December 14, 2012, VIZIER was indicted by a federal grand jury for Receipt of Materials Involving the Sexual Exploitation of Minors and was arrested by federal agents with the U. S. Department of Homeland Security, Homeland Security Investigations (HSI). On March 28, 2013, VIZIER pled guilty in federal court to the indictment. According to documents filed in federal court, special agents with HSI determined VIZIER was downloading images depicting the sexual victimization of children through the use of peer-to-peer file sharing software. Federal agents learned from Customs and Border Protection officers that VIZIER was a crew member aboard the maritime vessel Harvey War Horse II which was docked in Port Fourchon, LA and was scheduled to depart for Jamaica. HSI agents boarded the vessel and searched VIZIER’s computer and determined VIZIER had downloaded 26 videos and 789 images of child pornography.
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."
This case was investigated by special agents from the U. S. Department of Homeland Security, HSI. The prosecution of this case was handled by Strike Force Chief and Project Safe Childhood Coordinator, Assistant U. S. Attorney Brian M. Klebba.
Astatula Businessman Charged with $44 Million Bank Fraud SchemeRead the Press Release
Orlando, Florida - Acting United States Attorney A. Lee Bentley, III announces the unsealing of an indictment charging Pedro Benevides (44, Astatula) with conspiracy to commit bank fraud, nine counts of bank fraud, and nine counts of making false statements to financial institutions. If convicted, Benevides faces a maximum penalty of 30 years in federal prison and a $1million fine for each of the nineteen charged counts. The indictment also notifies Benevides that the United States is seeking a money judgment in the amount of $44,059,565.00, the proceeds of the charged conspiracy.
According to the indictment, from about 2005 through about September 2008, Benevides, using several businesses that he controlled, participated in a conspiracy and a fraudulent scheme to obtain $44,059,565.00 in various loans from federally insured financial institutions. Benevides allegedly submitted and caused the submission of documents to those institutions that contained materially false and fraudulent information. In particular, he submitted and caused the submission of documents that, among other things: (a) contained false information concerning the income and assets of the person or entity in whose name Benevides sought the loans, mortgages, and lines of credit; (b) were false and forged business and personal tax return documents; (c) were false and forged financial statements that purported to be from financial institutions; (d) were false and forged bank statements; (e) were a false and forged official checks; and (f) were false and forged correspondence from a title and escrow company that purported to show funds held for the benefit of entities that Benevides controlled, which funds did not actually exist.
On occasion, Benevides also submitted false loan applications supported by the false documents and signed documents certifying the accuracy of the false documents. Once Benevides obtained the loans, he used the funds from the loans to pay the interest and principal on previously obtained loans, which he had also obtained through fraud. Benevides also used the funds from the loans to fund his lifestyle and the businesses he controlled.
An indictment is merely a formal charge that a defendant has committed a violation of the federal criminal laws, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by the Internal Revenue Service - Criminal Investigation, U.S. Immigration and Customs Enforcement's Homeland Security Investigations, the United States Secret Service, and the St. Cloud IRS-USSS Federal Financial Crimes Task Force. It will be prosecuted by Assistant United States Attorney Daniel C. Irick.
A Former Resident of Troy Sentenced to Serve Six Years in Prison for Fraud and Tax EvasionRead the Press Release
Scott Atkins, 44, of Scottsdale, Arizona, and a former resident of Troy, Michigan, was sentenced on September 18, 2013 to serve 6 years in custody, for operating an advanced fee fraud scheme and tax evasion, United States Attorney Barbara L. McQuade announced today.
Imposing the sentence was U.S. District Judge Marianne O. Battani.According to information provided to the court at the April 17, 2013 guilty plea hearing, from February 2005 through August 10, 2010, Atkins, falsely portraying himself as a hedge fund manager and/or an attorney, solicited large advanced fees by falsely promising to arrange large commercial loans for over 50 individual and commercial clients throughout the nation. In fact, Atkins had no means to secure such funding and never intended to do so. Moreover, Atkins' never intended to keep his promises that the advanced fees would be refunded should financing not materialize, but rather, always intended to use the funds to pay for personal expenses. As a result of these activities, Atkins' clients lost over $1,400,000.00.
In addition, Atkins never reported or paid any income taxes on any of the funds he received during that period, and evaded his income tax liability, totaling over $270,000, by opening bank accounts in the names of fictitious entities, sometimes using the social security number of his minor daughter, and depositing funds into those accounts, or transferring or directing his income into accounts controlled by his mother.
Upon his release from custody, the Court ordered Atkins to serve 3 years on supervised release, and pay restitution of over $1,730,000 to the victims of his advanced fee fraud scheme, as well as related investment fraud, and $270,094 to the Internal Revenue Service.
FBI Acting Special Agent in Charge John Robert Shoup stated “We are very proud of the work done by the FBI and the IRS Criminal Investigation Division in this complex case. Large-scale financial crimes have a tremendous negative impact on our economy, and the FBI remains committed to investigating them.”
"Atkins is a scam artist. He took money from people with no intention of producing what he promised. He used the money for his own personal gain," said Acting Special Agent in Charge Carolyn Weber. "IRS Criminal Investigation will thoroughly investigate those who blatantly steal from others and fail to pay their taxes."
The investigation of this case was conducted by the F.B.I and I.R.S. Criminal Investigations.
6 Ordered to Prison in Drug ConspiracyRead the Press Release
McALLEN, Texas – A total of six people have been ordered to prison for terms ranging from approximately 10-24 years for their respective roles in a marijuana and cocaine conspiracy, announced United States Attorney Kenneth Magidson.
Jose Guadalupe Rangel-Hernandez, 51, of Miguel Aleman, was sentenced today by U.S. District Judge Randy Crane to a 292-month-term of federal imprisonment. Area residents Carlos Guerra, 36, of Pharr; Guy Oshiro Lugo, 48, of Alamo; Lineth Guerra, 39, of Mission; and Deborah Garcia, 46, and Alberto Aguirre, 49, both of Weslaco, received sentences of 210, 168, 160, 121 and 235 months, respectively.
All the defendants had previously entered pleas of guilty to one count of conspiring to possess with the intent to distribute more than 1,000 kilograms of marijuana. Additionally, Carlos Guerra and Lineth Guerra were found guilty of conspiring to possess with the intent to distribute more than five kilograms of cocaine.From 2009 and 2011, the defendants were part of drug conspiracy headed by Israel Garcia which was responsible for distributing thousands of tons of marijuana and multi-kilogram quantities of cocaine. In January 2011, Israel Garcia and Lineth Guerra were arrested in a hotel in McAllen and found to be in possession of more than $300,000. Additionally, information obtained as a result of their apprehension led to the seizure of more than 7,000 kilograms of marijuana.
The investigation revealed Rangel-Hernandez, Carlos Guerra, Lineth Guerra and Deborah Garcia all assisted Israel Garcia in transporting the narcotics from the Rio Grande Valley to Florida, Georgia and Ohio.Israel Garcia was also convicted and will be sentenced at a later date.
The investigation leading to the charges was conducted by the Homeland Security Investigations, Drug Enforcement Administration and Texas Department of Public Safety. Assistant United States Attorney James Sturgis prosecuted the case.
11 Defendants Charged with Federal Crimes Related to Stolen Identity Tax Fraud SchemeRead the Press Release
STATESBORO, GA - Two federal indictments, unsealed today in federal court, have charged 11 defendants with conspiracy to commit theft of public money and access device fraud in connection with fraudulent tax returns. Both of these indictments allege that the defendants illicitly obtained and possessed debit cards and tax refund checks stemming from the preparation and submission of fraudulent tax returns. The initial court appearances were held today at 10:00 a.m. in the Federal Courthouse in Statesboro, Georgia.
United States Attorney Edward J. Tarver said, “These indictments demonstrate the continued commitment of the United States Attorney’s Office to protecting the hard-earned money of honest taxpayers. Our law enforcement partners will continue to investigate and prosecute those who seek to profit from the preparation and filing of fraudulent tax returns.”
IRS Criminal Investigation Special Agent in Charge Veronica Hyman-Pillot said, "Today's announcement exemplifies the intense focus on the rigorous pursuit of identity theft by IRS and our law enforcement partners. IRS Criminal Investigation has made investigating refund fraud and identity theft a top priority and we will continue to vigorously pursue those who undermine the integrity of the U.S. tax system."
Mark F. Giuliano, Special Agent in Charge, FBI Atlanta Field Office, stated, "The FBI will continue to work with our local, state, and other federal law enforcement partners to aggressively pursue criminals who defraud the U.S. government by stealing the identities of unwitting and innocent victims.”
Joshua Waites, Chief, Office of Special Investigations, Georgia Department of Revenue, stated, “Today’s arrests show how serious the State of Georgia is at finding and arresting individuals committing identity theft fraud. The Georgia Department of Revenue will continue to work with our federal and local law enforcement officials to combat this growing trend.”
Statesboro Director of Public Safety Wendell Turner said, “The Statesboro Police Department has been working with our local and federal counterparts to apprehend the persons responsible for defrauding the government and individuals through a variety of criminal schemes. We are very proud of these partnerships and the results they yield for our citizens. This investigation is just another example of everyone working together, sharing resources, information and expertise for the common good of our community.”
Mr. Tarver emphasized that an indictment is only an accusation and is not evidence of guilt. The defendants are entitled to a fair trial, during which it will be the government’s burden to prove guilt beyond a reasonable doubt.
FBI Special Agent Marcus Kirkland, IRS Special Agent Gwen Weston and SPD Sgt. James Winskey, assisted by their agencies’ colleagues, conducted the investigation which led to the indictments. The United States Marshals Service, Georgia State Patrol, Georgia State Probation Office, Sylvania Police Department and the sheriff’s offices for Bulloch and Screven counties assisted in the arrests of numerous defendants.
Assistant United States Attorneys David Stewart and Lamont A. Belk are prosecuting the cases on behalf of the United States. For additional information, please contact First Assistant United States Attorney James D. Durham at (912) 201-2547.
List of 11 Federal Defendants
RICHARD PARKER, 60, of Sylvania, Georgia
EULA MAE RODRIGUEZ, 47, of Sylvania, Georgia
TACARRO MORGAN, 25, of Sylvania, Georgia
SIRBRINA BANGS, 26, of Statesboro, Georgia
DEQUILLIA HILL, 43, of Sylvania, Georgia
KANDICE WHITE, 25, of Sylvania, Georgia
ALECEIA LOVETT, 29, of Statesboro, Georgia
CIERRA JOHNSON, 22, of Statesboro, Georgia
DANIELLE CLARK, 26, of Statesboro, Georgia
DEVANG SHAH, 32, of Sylvania, Georgia
TAMEIKA CLARK, 24, of Statesboro, Georgia
10th Defendant Charged with Allegedly Participating in Food Stamp Fraud ConspiraciesRead the Press Release
PROVIDENCE, R.I. – Mashhod Afzal, 25, of North Providence, an employee of the Stop & Go convenience store in Providence, one of five convenience stores previously identified in court records as locations where store owners and employees were allegedly participating in conspiracies to defraud the food stamp program, was named in a federal superseding indictment returned by a grand jury on Wednesday which charges him with conspiracy, food stamp fraud and lying to a federal agent, announced United States Attorney Peter F. Neronha.
On September 5, 2013, United States Attorney Peter F. Neronha announced the findings to date of an ongoing two-year investigation which uncovered more than $3 million dollars of alleged fraud of the food stamp program in Rhode Island. At the time, United States Attorney Neronha announced criminal charges had been filed in federal court against nine Providence convenience store owners and employees.
It is alleged in court records that a pattern of conspiracies and Supplemental Nutrition Assistance Program (SNAP) benefits abuse was revealed when federal law enforcement undercover investigators visited area convenience stores; examined thousands of documents, bank records and tax filings; and reviewed information and evidence seized during the execution of court authorized search warrants at several businesses on April 1, 2013.
It is alleged in court documents that store owners and/or employees allowed SNAP benefit recipients to use their Electronic Benefit Transfer cards to exchange their SNAP benefits for cash, a violation of the program’s laws and regulations. It is alleged that in return, the defendants added a surcharge to the recipients’ withdrawal of SNAP benefits, usually an amount equal to that of the amount of cash benefit received by the recipient. SNAP benefit funds are transferred electronically directly to accounts managed by the retailer.
An indictment is merely an allegation 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.
The cases are being prosecuted in U.S. District Court in Providence by Assistant U.S. Attorneys Sandra R. Hebert and Richard B. Myrus.The investigation is being conducted by the United States Attorney’s Office; the U.S. Department of Agriculture, Office of Inspector General; U.S. Department of Agriculture, Food and Nutrition Service - Retailer Investigations Branch; Internal Revenue Service Criminal Investigation; and the Rhode Island State Police
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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]
Wednesday 18 September 2013
Wounded Knee Man Sentenced for Sexual ContactRead the Press Release
United States Attorney Brendan V. Johnson announced that a Wounded Knee, South Dakota, man convicted of Abusive Sexual Contact was sentenced on September 12, 2013, by Chief Judge Jeffrey L. Viken, U.S. District Court.
Wayne Simon Yellow Shield, age 44, was sentenced to 3 years’ probation and ordered to pay $100 to the Federal Crime Victims Fund, a $250 fine, and restitution in an amount to be determined later.
On November 3, 2011, at Wounded Knee, Yellow Shield engaged in sexual contact with a woman without her consent. He pled guilty on May 10, 2013.
This case was investigated by the Bureau of Indian Affairs Office of Justice Services and the Oglala Sioux Tribe Department of Public Safety. Assistant U.S. Attorney Sarah B. Collins prosecuted the case.White River Man Pleads Guilty to Failure to Register as A Sex OffenderRead the Press Release
United States Attorney Brendan V. Johnson announced that Nathan First In Trouble, age 34, of White River, South Dakota, appeared before U.S. District Judge Roberto A. Lange on September 16, 2013, and pled guilty to Count I of the Indictment that charged him with Failure to Register as a Sex Offender.
The maximum penalty upon conviction is 10 years of imprisonment and/or a $250,000 fine and 5 years of supervised release. Restitution and a $100 special assessment to the Federal Crime Victims Fund may also be ordered.
Around April 13, 1998, First In Trouble was convicted of Sexual Abuse of a Minor in U.S. District Court and sentenced to 30 months' imprisonment. He was also ordered to register as a sex offender. During the time period of February to April of 2013, First In Trouble registered as a sex offender at his father’s residence in Mellette County. However, he was not residing there. He went to Pierre at some point in January of 2013 and started working and staying in Pierre until March of 2013 when he was arrested. During the time he was working in Hughes County he should have properly registered as a sex offender, including updating his residence and his employment information.
The investigation was conducted by the U.S. Marshals Service. Assistant U.S. Attorney Tim Maher prosecuted the case.
First In Trouble was remanded to the custody of the U.S. Marshals Service pending sentencing, which has been set for November 26, 2013.
White River Man Pleads Guilty to Assault with A Dangerous WeaponRead the Press Release
United States Attorney Brendan V. Johnson announced that Theodore Larvie, age 23, of White River, South Dakota, appeared before U.S. District Judge Roberto A. Lange on September 16, 2013, and pled guilty to Count I of the Indictment that charged him with Assault With a Dangerous Weapon.
The maximum penalty upon conviction is 10 years of imprisonment and/or a $250,000 fine, 3 years of supervised release, and an additional 2 years of supervised release upon revocation. Restitution and a $100 special assessment to the Federal Crime Victims Fund may also be ordered.
The conviction stems from an incident on November 8, 2012. Larvie jumped on the victim’s back, biting him on the arm and taking him to the ground. During the altercation, Larvie also stabbed the victim several times with a knife. The victim received treatment at the Jones County Hospital in Murdo for his stab wounds.
The investigation was conducted by the Rosebud Sioux Tribe Law Enforcement Services. Assistant U.S. Attorney Tim Maher is prosecuting the case.
Larvie was remanded to the custody of the U.S. Marshals Service pending sentencing, which has been set for December 2, 2013.
Westmoreland County Man Sentenced to 21 Years in Prison for Producing Child PornRead the Press Release
PITTSBURGH - A Westmoreland County man has been sentenced in federal court to 252 months of imprisonment, 180 months of which will run concurrent with his state conviction, and 72 months of which will run consecutive to any state sentence, and was ordered to serve a lifetime term of supervised release on his conviction for production of material depicting the sexual exploitation of a minor, United States Attorney David J. Hickton announced today.
United States District Judge Mark R. Hornak imposed the sentence on Timothy Eugene Shearer, 55, formerly of Avonmore, Pa.
According to information presented to the court, from February of 2009 to September of 2009, and in or around October of 2006, Shearer persuaded, induced, and coerced a minor to engage in sexually explicit conduct, for the purpose of producing visual depictions of that conduct, namely a digital video and other images. The indictment also charged that Shearer possessed visual depictions, namely, digital image files and a video file, depicting minors engaging in sexually explicit conduct.
Assistant United States Attorney Jessica Lieber Smolar prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Federal Bureau of Investigation and the Pennsylvania State Police for the investigation leading to the successful prosecution of Shearer.
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.justice.gov/psc.
Washington Man Pleads Guilty to Conspiracy to Export Computers and Services to IranRead the Press Release
Tampa, Florida - Acting United States Attorney A. Lee Bentley, III announces that John Alexander Talley (42, Seattle, Washington), and his company, Tallyho Peripherals, Inc. d/b/a Enterprise Solutions Systems, today pleaded guilty to conspiracy to violate the International Emergency Economic Powers Act and the Iranian Transaction Regulations. Talley faces a maximum penalty of five years in federal prison.
According to the plea agreement, from approximately 2009 to September 2012, Talley and his company conspired with others to unlawfully export sophisticated enterprise level computer equipment from the United States to Iran, and to provide computer IT support services for the equipment, all in violation of the United States embargo. Talley’s role was to provide training and computer IT support to ensure that the computer equipment operated in Iran. In an effort to conceal their activities, the conspirators in the United States caused shipments of the computers and related equipment, as well as the payments for same, to travel to and from the United States and Iran through the United Arab Emirates. Similarly, payments for Talley’s support services were transmitted through the UAE.
On September 12, 2013, two Iranian nationals, Mahmood Akbari a/k/a John Wassermann and Reza Hajigholamali, and three United Arab Emirate “front” companies, Patco Group Ltd., Managed Systems and Services (FZC), and TGO General Trading LLC a/k/a Three Green Orbit, were indicted in connection with the same conspiracy to violate the Iranian Embargo. Those parties are charged with conspiracy to violate the International Emergency Economic Powers Act and the Iranian Transaction Regulations, and a conspiracy to commit international money laundering. If convicted, Akbari and Hajigholamali each face a maximum penalty of up to 40 years in federal prison.
On July 11, 2012, co-conspirator Mohammad Reza “Ray” Hajian and three of his companies, RH International LLC, Nexiant LLC, and P & P Computers LLC, pleaded guilty to conspiracy to violate the International Emergency Economic Powers Act and the Iranian Transaction Regulations. On October 18, 2012, Hajian was sentenced to four years in federal prison.
"The magnitude and scope of the threats facing the United States has never been greater than today, and that's why Homeland Security Investigations investigates individuals who try to export sensitive technologies to embargoed nations," said Sue McCormick, special agent in charge of Homeland Security Investigations Tampa. "Homeland Security Investigations and our partners at the Department of Commerce take pride in protecting our country, and today’s guilty plea is the latest example of our effective investigative efforts."
"Today's guilty plea is another step to dismantle a complex diversion scheme to illegally divert U.S.-origin technology through the United Arab Emirates to Iran. We will continue to pursue those who present a threat to our national security and prosecute them to the fullest extent of the law," said Robert Luzzi, Special Agent-in-Charge, U.S. Department of Commerce, Bureau of Industry and Security, Office of Export Enforcement, Miami Field Office.
An indictment is merely a formal charge that a defendant has committed a violation of the federal criminal laws, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and the U.S. Department of Commerce, Office of Export Enforcement. It is being prosecuted by Assistant United States Attorneys Rachelle DesVaux Bedke and Mark E. Bini and U.S. Department of Justice Trial Attorney Mariclaire Rourke.
Virginia Man Sentenced to 40 Months in Prison for Traveling into the District of Columbia to Engage in Illicit Sexual Conduct with A MinorRead the Press Release
WASHINGTON – George G. Kahl, 42, was sentenced today to 40 months in prison for traveling interstate to engage in illicit sexual conduct with a minor, announced U.S. Attorney Ronald C. Machen Jr., Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office, and Cathy L. Lanier, Chief of the Metropolitan Police Department (MPD).
Kahl, of Alexandria, Va., pled guilty in April 2013 in the U.S. District Court for the District of Columbia. He was sentenced by the Honorable Rosemary M. Collyer. Upon completion of his prison term, Kahl will be placed on 10 years of supervised release.
According to the government's evidence, on Feb. 9, 2013, Kahl contacted a man he believed to be the father of an under-aged female child on a social network site. That man turned out to be an undercover officer with the FBI's Child Exploitation Task Force. Over the next few days, Kahl engaged in graphic online e-mail and text message conversations with the undercover officer. During these conversations, Kahl arranged with the undercover officer to meet for the purpose of engaging in sexual acts with the purported child. On Feb. 22, 2013, Kahl traveled from Alexandria to Washington, D.C. for that purpose and was arrested.
This case was brought as part of the Department of Justice's Project Safe Childhood initiative and investigated by the FBI's Child Exploitation Task Force, which includes members of the FBI's Washington Field Office and MPD. In February 2006, the Attorney General created Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the U.S. Attorney's Offices, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
In announcing the sentence, U.S. Attorney Machen, Assistant Director Parlave and Chief Lanier praised the MPD Detectives and Special Agents of the FBI Child Exploitation Task Force. They also commended Assistant U.S. Attorney Ari Redbord, who prosecuted the case.
13-321UBS Securities Japan Co. Ltd Sentenced<br /> for Long-running Manipulation of LiborRead the Press Release
UBS Securities Japan Co. Ltd. (UBS Securities Japan), an investment bank, financial advisory securities firm and wholly-owned subsidiary of UBS AG, was sentenced today for its role in manipulating the London Interbank Offered Rate (LIBOR), a leading benchmark used in financial products and transactions around the world, the Justice Department announced.
UBS Securities Japan was sentenced by U.S. District Judge Robert N. Chatigny in the District of Connecticut. UBS Securities Japan pleaded guilty on Dec. 19, 2012, to one count of engaging in a scheme to defraud counterparties to interest rate derivative trades by secretly manipulating LIBOR benchmark interest rates. UBS Securities Japan signed a plea agreement with the government in which it admitted its criminal conduct and agreed to pay a $100 million fine, which the court accepted in imposing sentence. In addition, UBS AG, the Zurich-based parent company of UBS Securities Japan, entered into a non-prosecution agreement (NPA) with the government requiring UBS AG to pay an additional $400 million penalty, to admit and accept responsibility for its misconduct as set forth in an extensive statement of facts and to continue cooperating with the Justice Department in its ongoing investigation. The NPA reflects UBS AG’s substantial cooperation in discovering and disclosing LIBOR misconduct within the financial institution and recognizes the significant remedial measures undertaken by new management to enhance internal controls.
Together with approximately $1 billion in regulatory penalties and disgorgement – $700 million as a result of a Commodity Futures Trading Commission (CFTC) action; $259.2 million as a result of a U.K. Financial Conduct Authority (FCA) action; and $64.3 million as a result of a Swiss Financial Market Supervisory Authority (FINMA) action – the Justice Department’s criminal penalties bring the total amount of the resolution to more than $1.5 billion.
“This action, and the resulting sentence, prove that no individual or firm is above the law – no matter what,” said Attorney General Eric Holder. “The Department of Justice will continue to stand vigilant against corporations or individuals who threaten the integrity of our financial markets, undermine the stability of our economy, or jeopardize the well-being of our citizens. And, when supported by the facts and the law, we will never hesitate to use every tool and authority available to us to hold accountable those who illegally take advantage of others for their own financial gain.”
“Through its guilty plea and sentence, UBS has been held to account for deliberately manipulating LIBOR, one of the cornerstone interest rates in our global financial system,” said Acting Assistant Attorney General Mythili Raman of the Criminal Division. “The $1.5 billion global resolution against UBS – of which this guilty plea and sentence are a critical element – is just one of several actions we have taken against financial firms throughout the world that sought to illegally influence LIBOR. As we continue our active and ongoing investigation of the manipulation of LIBOR, our prosecutors and agents will continue to tenaciously follow the evidence wherever it leads. Neither UBS, nor the individual UBS defendants we have charged in connection with this sophisticated scheme, nor any other bank or individual, is above the law.”
According to documents filed in these cases, LIBOR is an average interest rate, calculated based on submissions from leading banks around the world, reflecting the rates those banks believe they would be charged if borrowing from other banks. LIBOR serves as the primary benchmark for short-term interest rates globally, and is used as a reference rate for many interest rate contracts, mortgages, credit cards, student loans and other consumer lending products. The Bank of International Settlements estimated that as of the second half of 2009, outstanding interest rate contracts were estimated at approximately $450 trillion.
LIBOR, published by the British Bankers’ Association (BBA), a trade association based in London, is calculated for 10 currencies at 15 borrowing periods, known as maturities, ranging from overnight to one year. The LIBOR for a given currency at a specific maturity is the result of a calculation based upon submissions from a panel of banks.
Beginning in September 2006, UBS Securities Japan and a senior trader employed in the Tokyo office of UBS Securities Japan orchestrated a sustained, wide-ranging and systematic scheme to move Yen LIBOR in a direction favorable to the trader’s trading positions, defrauding UBS’s counterparties and harming others with financial products referencing Yen LIBOR who were unaware of the manipulation. Between November 2006 and August 2009, the senior trader or a colleague of the senior trader endeavored to manipulate Yen LIBOR on at least 335 of the 738 trading days in that period, and during some periods on almost a daily basis. Because of the large size of the senior trader’s positions, even slight moves of a fraction of a percent in Yen LIBOR could generate large profits. For example, the senior trader once estimated that a 0.01 percent movement in the final Yen LIBOR fixing on a specific date could result in a $2 million profit for UBS.
According to the charging documents, UBS Securities Japan and the senior trader employed three strategies to execute the scheme: causing UBS to make false and misleading Yen LIBOR submissions to the BBA; causing cash brokerage firms, which purported to provide market information regarding LIBOR to panel banks, to disseminate false and misleading information about short-term interest rates for Yen, which those banks could and did rely upon in formulating their own LIBOR submissions to the BBA; and communicating with interest rate derivatives traders employed at three other Yen LIBOR panel banks in an effort to cause them to make false and misleading Yen LIBOR submissions to the BBA.
In entering into the NPA with UBS AG, the Justice Department considered information from UBS and from regulatory agencies in Switzerland and Japan demonstrating that in the last two years UBS has made important and positive changes in its management, compliance and training to ensure adherence to the law. The Department received favorable reports from the FINMA and the Japan Financial Services Authority (JFSA) describing, respectively, progress that UBS has made in its approach to compliance and enforcement and UBS Securities Japan’s effective implementation of the remedial measures the JFSA imposed based on findings relating to the attempted manipulation of Yen benchmarks.
The investigation was conducted by the FBI’s Washington Field Office. The prosecution is being handled by Deputy Chiefs Daniel Braun and William Stellmach and Trial Attorneys Thomas B.W. Hall and Sandra L. Moser, along with former Trial Attorney Luke Marsh, of the Criminal Division’s Fraud Section. Assistant U.S. Attorneys Eric Glover and Liam Brennan of the U.S. Attorney’s Office for the District of Connecticut have provided valuable assistance. The Criminal Division’s Office of International Affairs also provided assistance in this matter.
The investigation leading to these cases has required, and has greatly benefited from, a diligent and wide-ranging cooperative effort among various enforcement agencies both in the United States and abroad. The Justice Department acknowledges and expresses its deep appreciation for this assistance. In particular, the CFTC’s Division of Enforcement referred this matter to the Department and, along with the FCA, has played a major role in the investigation. The SEC has also played a significant role in the LIBOR series of investigations and, among other efforts, has made an invaluable contribution to the investigation relating to UBS. The Department of Justice also wishes to acknowledge and thank FINMA, the Japanese Ministry of Justice, and the JFSA. Various agencies and enforcement authorities from other nations also have participated in different aspects of the broader investigation relating to LIBOR and other benchmark rates, and the Department is grateful for their cooperation and assistance.
This prosecution is part of efforts underway by President Barack Obama’s Financial Fraud Enforcement Task Force (FFETF). President Obama established the interagency FFETF to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets and recover proceeds for victims of financial crimes. For more information about the task force visit: www.stopfraud.gov.
U.s. Attorney Hogsett Announces Charges Against Indiana-based Biofuels Fraud SchemeRead the Press Release
INDIANAPOLIS – U.S. Attorney Joseph H. Hogsett, along with Robert G. Dreher, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division, announced today the return of two indictments against six individuals and three companies for offenses involving federal renewable fuel programs, allegedly creating losses to victims totaling more than $100 million. An additional defendant was charged today by federal information, and has petitioned the court to enter a plea of guilty and cooperate with investigators. The 88 counts included in the three charging documents include allegations of conspiracy, wire fraud, false tax claims, false statements under the Clean Air Act, obstruction of justice, money laundering and securities fraud.
“This morning, federal agents brought into custody individuals who allegedly operated the largest tax and securities fraud scheme in Indiana history,” Hogsett said. “This case represents a collaborative effort on the part of law enforcement to hold fully accountable those who seek personal profit at the taxpayer’s expense.”
“Congress enacted incentives for the production of biofuels to make the United States stronger and more energy independent,” said Dreher. “Fraud by parties claiming such incentives threatens these important public policies. The Justice Department will vigorously prosecute those seeking to line their pockets using scams like those alleged in this indictment.”
The Law
The Energy Independence and Security Act of 2007 created a number of federally-funded programs that provided monetary incentives for the production of biodiesel. A dollar-per-gallon tax credit was available only to the first person to blend the pure biodiesel (known as B100) with petroleum diesel. After the biodiesel was blended and the tax credit claimed, the resulting product was generally known in the industry as B99, meaning that it was approximately 99% biodiesel and 1% petroleum diesel. Additionally, biodiesel producers could generate and attach credits known as “renewable identification numbers” or RINs to biodiesel they produced. Because certain companies need RINs to comply with regulatory obligations, RINs have significant market value. These two incentives were available only once for any given volume of biodiesel. For these reasons, a gallon of B100 with RINs and an available tax credit was worth much more than a gallon of RIN-stripped B99. At times during the conspiracy, a gallon of B100 with RINs was worth up to $2 more than an equivalent gallon of B99, effectively doubling its value.
The Defendants
Four of the defendants—Craig Ducey, Chad Ducey, Chris Ducey and Brian Carmichael— operated E-Biofuels, a Middletown, Indiana company that held itself out as a producer of biodiesel from “feedstocks” such as animal fat and vegetable oils. The government alleges that these defendants conspired with Joseph Furando and Evelyn Katirina Pattison—two executives with a pair of related New Jersey-based companies that operated under the names Caravan Trading Company and CIMA Green—to purchase RIN-stripped B99 from third parties, pretend that E-Biofuels had produced that fuel at its Middletown facility and fraudulently resell that fuel to customers as B100 with RINs and an available tax credit. While the E-Biofuels facility was capable of producing B100, at times during the conspiracy it was producing no fuel of its own, but instead was simply acting as a pass-through facility for fuel purchased elsewhere.
The Alleged Conspiracy
The indictment alleges that beginning in July 2009 and continuing until May 2012, these defendants fraudulently sold more than 35 million gallons of RIN-stripped B99 to unwitting customers who paid an inflated price, thinking they were purchasing B100 with RINs and an available tax credit. All told, the customers were allegedly defrauded of more than $55 million as a result of these activities and the Internal Revenue Service was exposed to as much as $35 million in false claims.
The government alleges that the defendants delivered the fraudulently mislabeled fuel to the victims in one of three ways. In some cases, the biodiesel was transported from fuel terminals to the E-Biofuels facility in Middletown where it was unloaded into a holding tank. A short time later, the biodiesel would be reloaded into tanker trucks and delivered to unsuspecting customers along with fraudulent paperwork that misidentified it as B100 with RINs produced by E-Biofuels. On other occasions, the truck drivers did not unload the fuel when they arrived at Middletown plant. Instead, they simply picked up paperwork falsely stating that the truck contained a load of B100 with RINs that originated at the E-Biofuels facility. The truck drivers referred to this procedure as “flipping a load.”
Finally, in the most egregious instances, the truck drivers hauled RIN-stripped B99 from fuel terminals directly to customers. Because these loads never went to the E-Biofuels facility they were known as “ghost loads” or “phantom loads.” In those cases, the defendants faxed or e-mailed the false paperwork to the truck drivers along their routes between the fuel terminals and the customer locations.
In an information filed today in federal court, Brian Carmichael was charged with one count of conspiracy to defraud the United States. Carmichael has filed a petition with the court indicating his willingness to plead guilty to this charge. Carmichael faces up to five years in federal prison if convicted.
The Alleged Securities Fraud
In May 2010, E-Biofuels was purchased by Imperial Petroleum, a publicly traded company based in Evansville. After the acquisition, E-Biofuels accounted for more than 97% of Imperial Petroleum’s operating income. Defendant Jeffrey Wilson was the president and chief executive officer of Imperial Petroleum.
The government alleges that Jeffrey Wilson and Craig Ducey knew that E-Biofuels was purchasing biodiesel from third parties instead of making its own biodiesel. They hid this fact from Imperial’s investors, shareholders and outside auditors by falsely stating that E-Biofuels produced biodiesel from chicken fat and other feedstocks. They made these and other related false statements and omissions in Imperial Petroleum’s annual and quarterly reports filed with the Securities and Exchange Commission and in written and oral communications with Imperial Petroleum’s investors and outside auditors.
The Process
If found guilty, the six individuals charged by indictment face up to twenty years in federal prison on some counts, as well as significant fines. The three companies indicted today also face significant fines and other regulatory action. The defendants will have initial appearances before a federal magistrate judge today at 1:30pm.
The case is being prosecuted by Senior Litigation Counsel Steven D. DeBrota of the U.S. Attorney’s Office, along with Senior Counsel Thomas Ballantine of the Environmental Crimes Section in the Department of Justice’s Environment and Natural Resources Division, and Jake Schmidt, a Special Assistant U.S. Attorney at the U.S. Attorney’s Office and Senior Attorney for the Securities and Exchange Commission.
An indictment is only a charge and is not evidence of guilt. All defendants are presumed innocent and are entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
Law Enforcement Partners
The collaborative investigation that led to today’s arrests was the result of work by the Environmental Protection Agency’s Criminal Investigation Division, the Internal Revenue Service Criminal Investigation, the Federal Bureau of Investigation, the Securities and Exchange Commission, as well as the U.S. Department of Agriculture and the Indiana Department of Environmental Management.
In response to the federal grand jury indictments, the following law enforcement partners issued statements:
Cynthia Giles, Assistant Administrator for Enforcement and Compliance Assurance, Environmental Protection Agency:
“The Renewable Fuel Standard Program was designed to achieve greenhouse gas emission reductions, promote energy independence and expand our nation’s renewable fuels sector. Today’s action supports these goals by protecting the integrity of the biofuel market. Those that cheat the system are breaking the law, and undermine our commitment to protect public health and the environment.”
Robert A. Jones, Special Agent in Charge, Federal Bureau of Investigation:
“We are proud to work with our federal partners to identify and investigate groups that manipulate and utilize federal government programs to line their pockets by fraud. In doing so, they deceive their customers, their shareholders, and the American public. The FBI will continue the fight against this dishonest and fraudulent behavior which harms the American people and the American economy.”
James C. Lee, Special Agent in Charge, IRS Criminal Investigation:
“The indictments returned today send a loud message that IRS Criminal Investigation operates year round to protect the integrity of our tax system and today is a victory for the American people. Together with the cooperative efforts of our law enforcement partners, we were able to identify and vigorously investigate the fraud involved in this scheme.”
Two North Carolina Residents Convicted for Conspiracy to Distribute OxycodoneRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-7725 ● Contact: Chris Zumpetta-Parr, Public Affairs SpecialistFollow us on Twitter @NDWVnews
Four Others Appear for Pleas and Sentencing
CLARKSBURG, WEST VIRGINIA - United States Attorney William J. Ihlenfeld, II,
announced the convictions of two North Carolina men for selling painkillers in West Virginia.AARON MONTREAL RIGGIN, age 37, and REGINALD SCOTT, age 45, both of North Carolina, entered pleas of guilty to “Conspiracy to Distribute Oxycodone” in federal court in Clarksburg. RIGGIN and SCOTT admitted to selling oxycodone in Morgantown, WV, between September of 2011 to April 21, 2012. RIGGIN, who is free on bond, and SCOTT, who is in custody, each face up to 20 years in prison. This case was prosecuted by Assistant United States Attorney Zelda E. Wesley and investigated by the West Virginia State Police-Bureau of Criminal Investigations.
HALEY HOBLITZELL, age 24, of Morgantown, West Virginia, was sentenced to
21 months in prison and 3 years of supervised release for “Theft of Firearms” on August 9, 2012. HOBLITZELL was remanded to the custody of the United States Marshal pending designation to a Federal institution. This case was prosecuted by Wesley and was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the West Virginia State Police.MARCUS ALLEN, age 51, an inmate at the federal prison in Gilmer County, entered a plea of guilty to “Possession of a Prohibited Object” when staff at the institution confiscated a small plastic bottle containing marijuana which had been given to ALLEN by a visitor. ALLEN was sentenced to 4 months in prison to run consecutive to his current 175-month sentence. This case was prosecuted by Assistant United States Attorney Brandon S. Flower and was investigated by the Federal Bureau of Investigation and the Special Investigative Services Unit at FCI Gilmer.
RONALD CLEVENGER, age 70, of Clarksburg, was sentenced to 5 years of probation and ordered to make restitution in the amount of $115,150.06 for “Embezzlement, Theft and Conversion of Government Funds.” From October of 1999 to September of 2010, CLEVENGER converted benefits from agencies of the United States by taking Social Security and Coal Mine Workers’ Compensation benefits that were paid to CLEVENGER’s deceased mother. This case was prosecuted by Assistant United States Attorney Andrew R. Cogar and investigated by the Social Security Administration Office of Inspector General and the Department of Labor Office of Inspector General.
GREGGORY MAYFIELD, age 49, of Albright, West Virginia, was sentenced to 5 years of probation for “Possession of Stolen Explosives” from December of 2012 to February 20, 2013, in Preston County. This case was prosecuted by Assistant United States Attorney Shawn A. Morgan and investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Two New Orleans Area Merchants Charged with Food Stamp FraudRead the Press Release
LONG T. TRINH, age 44, a resident of New Orleans, Louisiana, was charged today in a Bill of Information for receiving approximately $2,296,379 from the United State Department of Agriculture based upon food stamp benefits through his store Seafood Heaven, located in Gretna, Louisiana, that were not authorized, announced U. S. Attorney Dana Boente. In a separate Bill of Information, HAI BUI aka JIMMY BUI, age 57, a resident of Harvey, Louisiana, was charged with over $1 million dollars in food stamp fraud through his store Theresas Seafood #2, also located in Gretna, Louisiana. BUI’s wife, TERESA THUY BUI, age 62, was charged with misprision of a felony.
If convicted, the maximum penalty LONG T. TRINH and JIMMY BUI each face is 5 years imprisonment and/or a maximum fine of $250,000. TERESA BUI faces a maximum term of imprisonment of 3 years and/or a maximum fine of $250,000.
According to the Bills of Information, grocery retailers who participate in the Supplemental Nutrition Assistance Program (SNAP), a federal government program formerly known as the Food Stamp Program, may only accept and redeem food stamp benefits in exchange for the sale of eligible food items. Retailers may not exchange food stamp benefits for cash or any other ineligible items of value such as tobacco products or alcoholic beverages. Both store owners, LONG T. TRINH and JIMMY BUI are charged with knowingly presenting for payment and redemption SNAP benefits which had been purchased in exchange for cash money and ineligible items through their respective stores.
U. S. Attorney Boente reiterated that the Bills of Information are merely charges and that the guilt of the defendants must be proven beyond a reasonable doubt. This case was investigated by the United State Department of Agriculture, Office of Inspector General, and the Louisiana Department of Children and Family Services. The case is being prosecuted by Assistant United States Attorney Dorothy Manning Taylor.
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(Download Bill of Information - Bui )
Trenton, N.J., Man Convicted at Trial on Federal Weapons ChargeRead the Press Release
TRENTON, N.J. – A federal jury in Trenton, N.J., today convicted a Trenton man for illegally carrying a loaded shotgun as a convicted felon, U.S. Attorney Paul J. Fishman announced.
The government is represented by Assistant U.S. Attorney R. Joseph Gribko and Special Assistant U.S. Attorney Joseph Muoio of the U.S. Attorney’s Office Criminal Division in Trenton.
The jury returned a guilty verdict against Tyreek Harrington, 27, following a three-day trial before U.S. District Judge Freda L. Wolfson. Harrington was convicted of the first count in the indictment against him: being a convicted felon in possession of a loaded, sawed-off shotgun. Harrington was not convicted on the second count, involving possession of a revolver.
According to documents filed in this case, statements made in court, and the evidence at trial:
In the early morning of April 20, 2012, officers from the New Jersey State Police and Trenton Police Departments were conducting surveillance in the area of Spring and Passaic Streets in Trenton when Harrington was observed in an alley handling a sawed-off shotgun.
The felon in possession count carries a maximum potential penalty of 10 years in prison and a $250,000 fine. Sentencing is scheduled for Jan. 6, 2014.
U.S. Attorney Fishman credited special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Thomas J. Cannon; the Trenton Police Department, under the direction of Director Ralph Rivera; and the New Jersey State Police’s Crime Suppression North Unit, under the direction of Colonel Rick Fuentes, Superintendent, for the investigation leading to the conviction.
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Defense counsel: John S. Furlong Esq., West Trenton, N.J.Topeka Man Indicted on Gun, Drug ChargesRead the Press Release
TOPEKA, KAN. - A Topeka man with a record of felony convictions has been indicted on federal gun and drug charges, U.S. Attorney Barry Grissom said today.
Dustin C. Lynch, 30, Topeka, Kan., is charged with one count of unlawful possession of a firearm after felony convictions, one count of unlawful possession of a firearm in furtherance of drug trafficking and one count of possession with intent to distribute methamphetamine. The crimes are alleged to have occurred Aug. 15, 2013, in Shawnee County, Kan.
The indictment alleges Lynch possessed a 9 mm pistol while he was prohibited under federal law from possessing a firearm because of prior felony convictions. The indictment cites prior felony convictions in 2008, 2009 and 2010 on charges including burglary, aggravated burglary and possession of methamphetamine.
If convicted, he faces a penalty of not less than 15 years in federal prison on the charge of unlawful possession of a firearm after a felony conviction; not less than five years on the charge of possession of a firearm in furtherance of drug trafficking; and a maximum penalty of 30 years and a fine up to $2 million on the drug charge. The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated. Assistant U.S. Attorney Anthony Mattivi is prosecuting.
OTHER INDICTMENTS
Kenneth Leslie Lauter, Jr., 68, Kansas City, Kan., is charged with one count of receiving child pornography and one count of possessing child pornography. The crimes are alleged to have occurred Nov. 1, 2011, in Wyandotte County, Kan.
If convicted, he faces a penalty of not less than five years and not more than 20 years in federal prison and a fine up to $250,000 on the charge of receiving child pornography, and a maximum penalty of 10 years and a fine up to $250,000 on the possession charge. The U.S. Postal Inspection Service investigated. Assistant U.S. Attorney Christine Kenney is prosecuting.
Corey D. Cooley, 29, Junction City, Kan., is charged with failing to register as required by the federal Sex Offender Registration and Notification Act. The indictment alleges he was convicted in the state of Washington on a charge of first degree child molestation. The federal crime is alleged to have occurred from May 13 to Aug. 12, 2013, in Riley County, Kan.
If convicted, he faces a maximum penalty of 10 years and a fine up to $250,000. The U.S. Marshals Service investigated. Assistant U.S. Attorney Christine Kenney is prosecuting.
Ian Dominique Hudson, 25, is charged with unlawful possession of a firearm after a felony conviction. The crime is alleged to have occurred Sept. 26, 2012.
The indictment alleges he was convicted in Shawnee County District Court in 2006 on a felony charge of aggravated robbery.
If convicted, he faces a maximum penalty of 10 years and a fine up to $250,000. The FBI investigated. Assistant U.S. Attorney Jared Maag is prosecuting.
In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.Theo Summers Buffalo Bulltail Found Guilty in U.S. Federal CourtRead the Press Release
The United States Attorney's Office announced that on September 17, 2013, in Billings, after a federal district court trial before U.S. District Judge Donald W. Molloy, THEO SUMMERS BUFFALO BULLTAIL, a 30-year-old resident of Pryor, was found guilty of assault on a federal officer. Sentencing is set for December 18, 2013. He is currently detained.
At trial, the following evidence and testimony was presented to the jury.
On November 2, 2012, a Bureau of Indian Affairs Police officer was called to respond to a disturbance in Pryor. When he got to the house, BULLTAIL was identified by the occupants as the one causing problems. The officer tried to talk with BULLTAIL, but BULLTAIL immediately took a fighting stance. The officer tried to handcuff BULLTAIL, who then started fighting with the officer. During the ensuing scuffle, the officer was struck on the chin by BULLTAIL with the back of his head. The officer then lost his balance and struck his head, which resulted in a loss of consciousness for a brief period of time. The officer sought medical attention for pain in his head.
Assistant U.S. Attorney Lori Harper Suek prosecuted the case for the United States.
BULLTAIL faces possible penalties of 20 years in prison, a $250,000 fine and 3 years supervised release.
The investigation was conducted by the Bureau of Indian Affairs.
Texas Leader of Latin Kings Street Gang Sentenced in Indiana to 262 Months in Prison for Racketeering ConspiracyRead the Press Release
A Texas leader of the Latin Kings street gang was sentenced today in Hammond, Ind., to serve 262 months in prison for racketeering conspiracy, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney David Capp of the Northern District of Indiana.
Dante Reyes, aka “DK,” 41, of Alton, Texas, was sentenced by U.S. District Judge Rudy Lozano in the Northern District of Indiana. In addition to his prison term, Reyes was sentenced to serve three years of supervised release. On March 14, 2013, Reyes pleaded guilty to one count of racketeering conspiracy.
According to the third superseding indictment filed in this case, the Latin Kings is a nationwide gang that originated in Chicago and has branched out throughout the United States, including the state of Texas. The Latin Kings is a well-organized street gang that has well-defined leadership and is composed of regions that include multiple chapters. The third superseding indictment charges that the Latin Kings was responsible for more than 20 murders in southeast Chicago, northwest Indiana and Big Spring, Texas.During a co-defendant’s trial, the government presented evidence of several murders committed by members of the Latin Kings. In addition, cooperating defendants testified that the Latin Kings was responsible for distributing more than 150 kilograms of cocaine and 1,000 kilograms of marijuana over the course of the racketeering conspiracy.
During his guilty plea proceeding, Reyes acknowledged that he became a member of the Latin Kings at an early age and ultimately rose to the level of South Texas Regional Inca. He admitted that he attended at least two meetings in Texas with other members of the Latin Kings leadership in order to solidify the relationship between the Latin Kings in Texas and Chicago. Reyes further admitted that on at least one occasion, he traveled to the Chicago area with other Latin Kings members to meet with local Latin Kings leadership.
According to court documents, Reyes distributed cocaine and marijuana to Latin Kings members in Texas. He also distributed cocaine in Michigan through the use of couriers. These couriers traveled from Texas by bus or other vehicles and passed through the Northern District of Indiana while en route.
Twenty-three Latin Kings members and associates have been indicted in this case. Including Reyes, 21 defendants have pleaded guilty, one was convicted by jury and one remains a fugitive.This case was investigated by the FBI; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Drug Enforcement Administration; ICE Homeland Security Investigations; the National Gang Intelligence Center; the Chicago Police Department; the Houston Police Department; the Griffith, Ind., Police Department; the Highland, Ind., Police Department; the Hammond, Ind., Police Department; and the East Chicago Police Department.
The case is being prosecuted by Trial Attorney Joseph A. Cooley of the Criminal Division’s Organized Crime and Gang Section, and Assistant U.S. Attorney David J. Nozick of the Northern District of Indiana. Assistant U.S. Attorney Andrew Porter of the Northern District of Illinois and Assistant U.S. Attorney Jeffrey Haag of the Northern District of Texas, Lubbock Division, provided significant assistance.
The third superseding indictment is not evidence of guilt. The defendant who has not been convicted is innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Texas Leader of Latin Kings Street Gang Sentenced in Indiana to 262 Months in Prison for Racketeering ConspiracyRead the Press Release
WASHINGTON – A Texas leader of the Latin Kings street gang was sentenced today in Hammond, Ind., to serve 262 months in prison for racketeering conspiracy, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney David Capp of the Northern District of Indiana.
Dante Reyes, aka “DK,” 41, of Alton,Texas, was sentenced by U.S. District Judge Rudy Lozano in the Northern District of Indiana.In addition to his prison term, Reyes was sentenced to serve three years of supervised release.On March 14, 2013, Reyes pleaded guilty to one count of racketeering conspiracy.
According to the third superseding indictment filed in this case, the Latin Kings is a nationwide gang that originated in Chicago and has branched out throughout the United States, including the state of Texas. The Latin Kings is a well-organized street gang that has well-defined leadership and is composed of regions that include multiple chapters. The third superseding indictment charges that the Latin Kings was responsible for more than 20 murders in southeast Chicago, northwest Indiana and Big Spring, Texas.
During a co-defendant’s trial, the government presented evidence of several murders committed by members of the Latin Kings. In addition, cooperating defendants testified that the Latin Kings were responsible for distributing more than 150 kilograms of cocaine and 1,000 kilograms of marijuana over the course of the racketeering conspiracy.
During his guilty plea proceeding, Reyes acknowledged that he became a member of the Latin Kings at an early age and ultimately rose to the level of South Texas Regional Inca. He admitted that he attended at least two meetings in Texas with other members of the Latin Kings leadership in order to solidify the relationship between the Latin Kings in Texas and Chicago. Reyes further admitted that on at least one occasion, he traveled to the Chicago area with other Latin Kings members to meet with local Latin Kings leadership.
According to court documents, Reyes distributed cocaine and marijuana to Latin Kings members in Texas.He also distributed cocaine in Michigan through the use of couriers.These couriers traveled from Texas by bus or other vehicles and passed through the Northern District of Indiana while en route.
Twenty-three Latin Kings members and associates have been indicted in this case.Including Reyes, 21 defendants have pleaded guilty, one was convicted by jury and one remains a fugitive.
This case was investigated by the FBI; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Drug Enforcement Administration; ICE Homeland Security Investigations; the National Gang Intelligence Center; the Chicago Police Department; the Houston Police Department; the Griffith, Ind., Police Department; the Highland, Ind., Police Department; the Hammond, Ind., Police Department; and the East Chicago Police Department.
The case is being prosecuted by Trial Attorney Joseph A. Cooley of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorney David J. Nozick of the Northern District of Indiana.Assistant U.S. Attorney Andrew Porter of the Northern District of Illinois and Assistant U.S. Attorney Jeffrey Haag of the Northern District of Texas, Lubbock Division, provided significant assistance.
The third superseding indictment is not evidence of guilt.The defendant who has not been convicted is innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Terry Lynn Braine Sentenced in U.S. District CourtRead the Press Release
The United States Attorney's Office announced that during a federal court session in Billings, on September 18, 2013, before U.S. District Judge Donald W. Molloy, TERRY LYNN BRAINE, a 47-year-old resident of Ashland, was sentenced to a term of:
- Prison: 37months
- Special Assessment: $100
- Supervised Release: 3 years
BRAINE, was sentenced in connection with his guilty plea to domestic assault by a habitual offender.
In an Offer of Proof filed by Assistant U.S. Attorney Lori Harper Suek, the government stated it would have proved at trial the following:
On November 29, 2012, BRAINE punched his elderly father in the eye causing severe swelling, redness, and a laceration. His elderly mother was present as well and suffered emotional trauma from witnessing the attack. BRAINE has four prior tribal court convictions for domestic assault - all of them involve assaults on his elderly parents.
The assault occurred in Lame Deer, which is within the exterior boundaries of the Northern Cheyenne Indian Reservation.
Because there is no parole in the federal system, the "truth in sentencing" guidelines mandate that BRAINE, will likely serve all of the time imposed by the court. In the federal system, BRAINE, does have the opportunity to earn a sentence reduction for "good behavior." However, this reduction will not exceed 15% of the overall sentence.
The investigation was conducted by the Bureau of Indian Affairs.
Tennessee Federal Court Bars the Owners of Mo’ Money Taxes from Owning, Operating, Licensing or Franchsing a Tax Return Preparation Business and Preparing Tax Returns for OthersRead the Press Release
A federal court in Memphis, Tenn., permanently barred the owners of Mo’ Money Taxes, Markey Granberry and Derrick Robinson, as well as a former Mo’ Money manager, Eumora Reese, from preparing tax returns for others and owning or operating a tax return preparation business, the Justice Department announced today. The civil injunction order, to which Granberry, Robinson and Reese agreed without admitting the allegations against them, was signed by Judge S. Thomas Anderson of the U.S. District Court for the Western District of Tennessee.
The United States brought the civil injunction suit in April, seeking to shut down Mo’ Money Taxes, a Memphis-based tax-preparation chain that at one time operated as many as 300 offices in 18 states. The government complaint, which can be viewed at www.justice.gov/tax/2013/txdv13412.htm , alleged that Mo’ Money Taxes, its owners Granberry and Robinson and store manager Reese created and maintained a business environment that encouraged the preparation of fraudulent federal income tax returns. According to the complaint, Mo’ Money Taxes’ managers, licensees and employees prepared fraudulent returns that caused their customers to incorrectly report their federal tax liabilities and underpay their taxes. The complaint further alleged that defendants charged customers bogus and unconscionably high fees.
According to the complaint, Granberry and Robinson most recently used the business name Marquis Taxes and, along with Reese, also used the name Southern King Taxes. The complaint also alleges that Granberry and Robinson received fees for each tax return prepared by these businesses through Caymau Service Bureau LLC. The civil injunction order not only bars Granberry, Robinson and Reese from owning and operating these businesses, but also from managing, working in, controlling, licensing or franchising a tax return preparation business.
The complaint alleges that Granberry, Robinson and Reese encouraged Mo’ Money Taxes preparers to falsely claim the earned-income credit; claim improper filing status; claim bogus education credits, improperly prepare returns using paystubs rather than employer-issued W-2 forms; fabricate bogus W-2 forms; file tax returns without customers’ consent; sell false and deceptive loan products; and charge deceptive and unconscionable fees.
Return preparer fraud, claiming false income or expenses to secure larger refundable credits such as the earned-income credit, and identity theft are among the IRS’s “Dirty Dozen” Tax Scams for 2013, which can be viewed at www.irs.gov/uac/Newsroom/IRS-Releases-the-Dirty-Dozen-Tax-Scams-for-2013 .
“American taxpayers need to know they can rely on their tax preparers to prepare honest, accurate returns,” said Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division. “The Internal Revenue Service and Justice Department are committed to strong enforcement action against tax preparers who fail to live up to that standard.”
In the past decade the Justice Department's Tax Division has obtained injunctions against hundreds of tax-return preparers and tax-fraud promoters. Information about these cases is available on the Justice Department website at www.justice.gov/tax/taxpress2013.htm. For more information about choosing a tax return preparer, see the IRS website at www.irs.gov/uac/Tips-for-Choosing-a-Tax-Return-Preparer and the IRS YouTube Channel at www.youtube.com/watch?v=ujqdzMn7PX0.
Related Materials:
United States v. Markey Granberry, et al.
Order of Permanent Injunction Against Markey Granberry, Derrick Robinson and Eumora Reese
Swansea Man Indicted for 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, 29, of Swansea, was indicted by a federal grand jury sitting in East St. Louis on charges that he stole unemployment benefits from the United States Railroad Retirement Board.
The indictment alleges that from January 2013 through May 2013, Fisher 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. The charge carries a maximum penalty of 10 years in prison, a $250,000 fine, and up to 3 years of supervised release.
An indictment is a formal charge against a defendant. Under the law, a defendant is presumed to be innocent of a charge and is entitled to a fair trial at which the Government must prove guilt beyond a reasonable doubt.
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. Francis Man Sentenced on Assault ChargeRead the Press Release
United States Attorney Brendan V. Johnson announced that a St. Francis, South Dakota, man convicted of Assault With a Dangerous Weapon was sentenced on September 16, 2013, by U.S. District Judge Roberto A. Lange.
Orson Black Spotted Horse, age 50, was sentenced to 18 months of imprisonment, 18 months of supervised release, and a $100 special assessment to the Federal Crime Victims Fund.
Black Spotted Horse was indicted on two counts by a federal grand jury in February of 2013. He pled guilty to Count I of the Indictment, Assault with a Dangerous Weapon, on June 25, 2013.
The conviction stems from an incident on September 3, 2012, when the Defendant got into an argument with the victim. Black Spotted Horse took a metal pipe and hit the victim in the head, and the victim sustained a head injury.
The investigation was conducted by the Rosebud Sioux Tribe, Law Enforcement Services. Assistant U.S. Attorney Tim Maher prosecuted the case.
Black Spotted Horse was immediately turned over to the custody of the U.S. Marshals Service.
South Jordan Woman Sentenced to 30 Months in Federal Prison After Money Laundering ConvictionRead the Press Release
Admitted She Embezzled $462,455.80 From Her EmployerSALT LAKE CITY – Monica Paris, age 31, of South Jordan, who pleaded guilty in February to one count of money laundering, will serve 30 months in federal prison. Judge Ted Stewart imposed the sentence in U.S. District Court in Salt Lake City Tuesday afternoon.
Paris must report to the U.S. Bureau of Prisons on Nov. 5, 2013, to begin serving her sentence. She will be on supervised release for 36 months when she finishes her prison sentence. Judge Stewart also ordered her to pay full restitution of $462,455.80.
In the plea agreement reached with federal prosecutors, Paris admitted she embezzled approximately $462,455.80 from Ultradent Products, Inc., her former employer. She used the funds she embezzled from her employer for personal expense.
Paris worked at Ultradent, a privately-owned Utah corporation involved in the production and distribution of dental products, from 1997 until her termination around February 2012. Her last position at the company was assistant to the director of major accounts.
According to court documents, as a part of her job duties, Paris was responsible for purchasing promotional materials used by Ultradent. The standard practice at the company involved Paris purchasing the items using her personal credit card and then seeking reimbursement for charges she incurred on the company’s behalf.
As a part of her plea agreement, Paris admitted that beginning around August 2010 and continuing through February 2012, she fraudulently submitted expense reports for personal reimbursement payments for items she never actually purchased. She then fraudulently approved the expense reports on behalf of Ultradent and directed that the reimbursement payments be sent to her personal bank account. She also admitted that she fraudulently claimed that personal items she purchased at Sam’s Club, including large amounts of pre-paid credit cards, were company expenses for which she sought reimbursement payments. Using her Sam’s Club membership, she admitted she bought personal items using the credit cards of two other company employees. She then submitted the purchases for reimbursement and created false invoices to show that the purchases were for company expenses.
Paris admitted that in August 2011, she sent a check for $10,891.29 to her credit union as payment for a car loan. She admitted she knew that the funds she transferred were stolen from her employer. Judge Stewart also signed a forfeiture order in the case ordering Paris to forfeit a 2007 Mazda vehicle, finding that there was a nexus between the car and her money laundering offense.
The case is being prosecuted by the U.S. Attorney’s Office in Salt Lake City and investigated by special agents of IRS Criminal Investigation.
(Follow the U.S. Attorney’s Office on Twitter @DUTnews)Sixty People Indicted for Heroin TraffickingRead the Press Release
Sixty people were indicted in federal court for their roles in a conspiracy to bring heroin from Chicago and Atlanta and sell it throughout Greater Cleveland, law enforcement officials announced today.
An additional 32 people were indicted in Cuyahoga County Common Pleas Court on related state charges.
The indictments were announced today by Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, Timothy McGinty, Cuyahoga County Prosecutor, Stephen D. Anthony, Special Agent in Charge of the Federal Bureau of Investigation’s Cleveland office and Cleveland Police Chief Michael McGrath.The 203-count federal indictment describes a conspiracy took place from at least September 2011 through this month.
Keith Ricks, Brandy M. Bates and Dammarkro S. Nolan obtained heroin from suppliers in Atlanta and transported the drugs to Cleveland by mail or car. Ricks, Maurice Golston, Dionte Thompson and Leamon Shephard also pooled their money to obtain heroin from Atlanta, according to the indictment.
Ricks then distributed the heroin to other traffickers in Cleveland, including Shephard, Golston, Marcus Blue, Maceo Moore, Gregory Hamilton and Robert Belk, according to the indictment.
Shephard also took the heroin he obtained from Ricks and other suppliers and distributed to other dealers. Moore also obtained the heroin and distributed it to other dealers, including Jamez Jamel Webb II, Rolando J. Reed and Terrance Fletcher, according to the indictment.
Ricks, Moore, Shephard, Blue, Golston, Nolan and others also planned and committed burglaries and robberies from other drug dealers, customers and each other. This was done to fund their drug trafficking, to obtain heroin and other drugs and to collect drug debts, according to the indictment.
The men then sold the stolen heroin at discounted prices or used the stolen money to obtain heroin. They identified potential victims through a variety of ways, including targeting those who appeared to have expensive jewelry or cars or by using women to gather information about potential victims and report back to them. They sometimes used firearms or zip ties to restrain victims, according to the indictment.
The conspirators conducted counter-surveillance on law enforcement, including posting sentries to serve as lookouts. They also shared information about drug traffickers who had been arrested and obtained court documents regarding the details of traffickers’ court dates as a way to warn co-conspirators not to do business with other traffickers who had been arrested, according to the indictment.
Jovan Fussell and others also obtained large quantities of heroin from suppliers in Chicago and transported the drugs to Cleveland, where it was distributed to heroin dealers including Kenneth E. Harris, Gregory Hamilton, David E. McCall, Jr. Pierre A. Campbell and others.
Harris then redistributed the heroin to other individuals, including Frederick L. Darling, Gregory T. Savage, Jr., Terrance L. Fletcher and other dealers. Darling then supplied heroin to several other people for redistribution, including Eugene Miller, Thomas C. McCully and others.
“These defendants used firearms and violence to fund an operation that brought heroin, and the death it causes, from across the country into Greater Cleveland,” Dettelbach said. “Far from some of these defendants’ glamorous view of themselves, the suffering they caused unmasks them for what they are – greedy heroin dealers who cared about little besides money.”
Anthony said: “These individuals represent the worst of the worst, putting everyday citizens in danger by engaging in countless violent acts while lining their pockets with ill-gotten drug money. This wide-ranging investigation is another example of the comprehensive strategy by local, state and federal law enforcement to target, dismantle and eliminate the most significant criminal enterprises in our region.”
“Cuyahoga County is on track this year to set record-breaking numbers for heroin deaths,” McGrath said. “Lives will be saves as a result of the hard work by the Northeast Ohio Law Enforcement Task Force. These arrests are a testament to the great results achieved when law enforcement agencies work together for the common goal of making our streets safe and drug free. Through our cooperative partnership we will continue to seek out those groups and individuals that push poison into our neighborhoods.”
McGinty said: “Let today's raids and indictments-- and the trials and convictions to come -- be a message to those who want to capitalize on addiction: There’s a prison cell already built, the floor is painted, the stainless steel toilet is installed – and it’s waiting for you.”
Those facing federal charges are as follows: Carl Akins, 37, of Cleveland; Darnell Alexander, 29, of Brooklyn; Brandy Bates, 30, of Cleveland Heights; Beneditto Belfiore, 23, of South Euclid; Robert Belk, 27, of Cleveland; Stevenson Black, 47, of Cleveland; Dominique Blair, 28, of Euclid; Latrice Blevins, 39, of Cleveland; Marcus Blue, 30, of Euclid; Michael Buchanan, 48, of Cleveland; Pierre Campbell, 29, of Cleveland; Frederick Darling, 57, of Cleveland; Jacob Derrickson, 25, of Euclid; Leamon Eddie, 46, of Cleveland; Dana Ervin; 51, of Cleveland; Corey Etheridge, 22, of Shaker Heights; Antwon Evans, 30, of University Heights; Frederick Ferrell, 61, of Cleveland Heights; Terrance Fletcher, 40, of Cleveland; Robert Lee Fowlkes, 31, of Cleveland; Jovan Fussell, 33, of Euclid; Maurice Golston, 32, of Cleveland; Jermaine Grayson, 25, of Cleveland; Lachelle Hall, 30, of Euclid; Gregory Hamilton, 37, of Cleveland; Kenneth Harris, 45, of Cleveland; Ryland Harris, 53, of Cleveland; David Harsley, 32, of Cleveland; Erian Harwell, 24, of Cleveland; Carlton Higdon, 44, of Cleveland; Dominique Ivory, 25, of Euclid; Douglas Johnson, 58, of Cleveland; Luther Johnson, 55, of Cleveland; Michael Jones, 50, of Cleveland; Andrew Lovings, 59, of Cleveland; Devonta Maxwell, 30, of Euclid; Dave McCall, 37, of Cleveland; Thomas McCully, 53, of Cleveland; Lamar Middleton, 25, of Cleveland; Eugene Miller, 51, of Cleveland; Sandra Miller, 33, of Painesville; Maceo Moore, 37, of Euclid; Vince Morgan, 22, of North Olmsted; Ed Nix, 48, of Euclid; Dammarkro Nolan, 39, of Painesville; Brenda Norman, 58, of Cleveland; Vernon Norman, 77, of Euclid; Antwone Nowden, 31, of Cleveland; Ivan Percy, 38, of Cleveland; Eric Powell, 38, of Cleveland; Rolando Reed, 23, of Cleveland; Keith Ricks, 31, of Cleveland; Gregory Savage, 53, of Cleveland; Kevin Scott, 47, of Cleveland; Leamon Shephard, 25, of Cleveland; Dionte Thompson, 25, of Cleveland; Jamez Webb, 21, of Cleveland; Jamal Williams, 34, of Cleveland; Shaun Williams, 30, of Cleveland, and Raymundo Wren, 31, of Cleveland.
This case is being prosecuted by Assistant U.S. Attorneys Matthew W. Shepherd, Daniel J. Riedl and Matthew B. Kall following a multi-year investigation by the Northern Ohio Law Enforcement Task Force (NOLETF).
The NOLETF is a long standing multi-agency task force comprised of investigators from the Federal Bureau of Investigation, Cuyahoga Metropolitan Housing Authority, Drug Enforcement Administration, Internal Revenue Service, U.S. Coast Guard Investigative Service, Cleveland Division of Police, Cleveland Heights Police Department, Cuyahoga County Sheriff’s Office, Euclid Police Department, Regional Transit Authority Police Department, Westlake Police Department and Shaker Heights Police Department. The NOLETF is also one of the initial Ohio High Intensity Drug Trafficking Area (HIDTA) initiatives. HIDTA supports and helps coordinate numerous Ohio drug task forces in their efforts to eliminate or reduce drug trafficking in Ohio.
The investigation was assisted by the Hotel Interdiction Team, another HIDTA initiative comprised of members of the FBI, Cuyahoga County Sheriff’s Office, Homeland Security Investigations and police departments from Broadview Heights, Brooklyn, Brook Park and Independence.
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.
Six Individuals, Three Corporations Charged in Indiana-based Biofuels Fraud SchemeRead the Press Release
The Justice Department’s Environment and Natural Resources Division and the U.S. Attorney’s Office for the Southern District of Indiana announced today the return of two indictments against six individuals and three companies for offenses involving federal renewable fuel programs, allegedly creating losses to victims totaling more than $100 million. The 88 counts included in the three charging documents include allegations of conspiracy, wire fraud, false tax claims, false statements under the Clean Air Act, obstruction of justice, money laundering and securities fraud.
“Congress enacted incentives for the production of biofuels to make the United States stronger and more energy independent,” said Robert G. Dreher, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “Fraud by parties claiming such incentives threatens these important public policies. The Justice Department will vigorously prosecute those seeking to line their pockets using scams like those alleged in this indictment.”
“This morning, federal agents brought into custody individuals who allegedly operated the largest tax and securities fraud scheme in Indiana history,” said U.S. Attorney for the Southern District of Indiana Joseph H. Hogsett. “This case represents a collaborative effort on the part of law enforcement to hold fully accountable those who seek personal profit at the taxpayer’s expense.”
“The Renewable Fuel Standard Program was designed to achieve greenhouse gas emission reductions, promote energy independence and expand our nation’s renewable fuels sector,” said Cynthia Giles, Assistant Administrator for Enforcement and Compliance Assurance, Environmental Protection Agency (EPA). “Today’s action supports these goals by protecting the integrity of the biofuel market. Those that cheat the system are breaking the law, and undermine our commitment to protect public health and the environment.”
“We are proud to work with our federal partners to identify and investigate groups that manipulate and utilize federal government programs to line their pockets by fraud,” said Robert A. Jones, Special Agent in Charge of the FBI Indianapolis Division. “In doing so, they deceive their customers, their shareholders, and the American public. The FBI will continue the fight against this dishonest and fraudulent behavior which harms the American people and the American economy.”
“The indictments returned today send a loud message that IRS Criminal Investigation operates year round to protect the integrity of our tax system and today is a victory for the American people,” said James C. Lee, Special Agent in Charge, IRS Criminal Investigation. “Together with the cooperative efforts of our law enforcement partners, we were able to identify and vigorously investigate the fraud involved in this scheme.”
The Energy Independence and Security Act of 2007 created a number of federally-funded programs that provided monetary incentives for the production of biodiesel. A dollar-per-gallon tax credit was available only to the first person to blend the pure biodiesel (known as B100) with petroleum diesel. After the biodiesel was blended and the tax credit claimed, the resulting product was generally known in the industry as B99, meaning that it was approximately 99 percent biodiesel and 1 percent petroleum diesel. Additionally, biodiesel producers could generate and attach credits known as “renewable identification numbers” or RINs to biodiesel they produced. Because certain companies need RINs to comply with regulatory obligations, RINs have significant market value. These two incentives were available only once for any given volume of biodiesel. For these reasons, a gallon of B100 with RINs and an available tax credit was worth much more than a gallon of RIN-stripped B99. At times during the conspiracy, a gallon of B100 was worth up to $2.50 more than an equivalent gallon of B99.
Four of the defendants—Craig Ducey, Chad Ducey, Chris Ducey and Brian Carmichael— operated E Biofuels, a Middletown, Indiana company that held itself out as a producer of biodiesel from “feedstocks” such as animal fat and vegetable oils. The government alleges that these defendants conspired with Joseph Furando and Evelyn Katirina Pattison—two executives with a pair of related New Jersey-based companies that operated under the names Caravan Trading Company and CIMA Green—to purchase RIN-stripped B99 from third parties, pretend that E-Biofuels had produced that fuel at its Middletown facility and fraudulently resell that fuel to customers as B100 with RINs and an available tax credit. While the E-Biofuels facility was capable of producing B100, at times during the conspiracy it was producing no fuel of its own, but instead was simply acting as a pass-through facility for fuel purchased elsewhere.
The indictment alleges that beginning in July 2009 and continuing until May 2012, these defendants fraudulently sold more than 35 million gallons of RIN-stripped B99 to unwitting customers who paid an inflated price, thinking they were purchasing B100 with RINs and an available tax credit. All told, the customers were allegedly defrauded of more than $55 million as a result of these activities and the Internal Revenue Service was exposed to as much as $35 million in false claims.
The government alleges that the defendants delivered the fraudulently mislabeled fuel to the victims in one of three ways. In some cases, the biodiesel was transported from fuel terminals to the E-Biofuels facility in Middletown where it was unloaded into a holding tank. A short time later, the biodiesel would be reloaded into tanker trucks and delivered to unsuspecting customers along with fraudulent paperwork that misidentified it as B100 with RINs produced by E-Biofuels. On other occasions, the truck drivers did not unload the fuel when they arrived at Middletown plant. Instead, they simply picked up paperwork falsely stating that the truck contained a load of B100 with RINs that originated at the E-Biofuels facility. The truck drivers referred to this procedure as “flipping a load.”
Finally, in the most egregious instances, the truck drivers hauled RIN-stripped B99 from fuel terminals directly to customers. Because these loads never went to the E-Biofuels facility they were known as “ghost loads” or “phantom loads.” In those cases, the defendants faxed or e-mailed the false paperwork to the truck drivers along their routes between the fuel terminals and the customer locations.
In May 2010, E-Biofuels was purchased by Imperial Petroleum, a publicly traded company based in Evansville. After the acquisition, E-Biofuels accounted for more than 97% of Imperial Petroleum’s operating income. Defendant Jeffrey Wilson was the president and chief executive officer of Imperial Petroleum.
The government alleges that Jeffrey Wilson and Craig Ducey knew that E-Biofuels was purchasing biodiesel from third parties instead of making its own biodiesel. They hid this fact from Imperial’s investors, shareholders and outside auditors by falsely stating that E-Biofuels produced biodiesel from chicken fat and other feedstocks. They made these and other related false statements and omissions in Imperial Petroleum’s annual and quarterly reports filed with the Securities and Exchange Commission and in written and oral communications with Imperial Petroleum’s investors and outside auditors.
If found guilty, the six individuals charged by indictment face up to 20 years in federal prison on some counts, as well as significant fines. The three companies indicted today also face significant fines and other regulatory action. The defendants were scheduled for initial appearances before a federal magistrate judge today.
An additional defendant was charged today by federal information, and has petitioned the court to enter a plea of guilty and cooperate with investigators. Brian Carmichael was charged with one count of conspiracy to defraud the United States. Carmichael has filed a petition with the court indicating his willingness to plead guilty to this charge. Carmichael faces up to five years in federal prison if convicted.The case is being prosecuted by Senior Litigation Counsel Steven D. DeBrota of the U.S. Attorney’s Office, along with Senior Counsel Thomas Ballantine of the Environmental Crimes Section in the Department of Justice’s Environment and Natural Resources Division, and Jake Schmidt, a Special Assistant U.S. Attorney of the U.S. Attorney’s Office and Senior Attorney for the Securities and Exchange Commission.
An indictment is only a charge and is not evidence of guilt. All defendants are presumed innocent and are entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
The collaborative investigation that led to today’s arrests was the result of work by the EPA’s Criminal Investigation Division, the Internal Revenue Service Criminal Investigation, the FBI, the Securities and Exchange Commission, as well as the U.S. Department of Agriculture and the Indiana Department of Environmental Management.Shiprock Man Pleads Guilty to Sexually Abusing a MinorRead the Press Release
ALBUQUERQUE – Leo Thompson, 54, an enrolled member of the Navajo Nation who resides in Shiprock, N.M., pleaded guilty this morning to sexually abusing of a minor under a plea agreement with the U.S. Attorney’s Office. Under the terms of the plea agreement, Thompson will be sentenced to eight years in prison followed by a term of supervised release to be determined by the court. Thompson will be required to register as a sex offender after he completes his prison sentence.
Thompson was arrested on Jan. 29, 2013, on a criminal complaint charging him with aggravated sexual abuse of a minor. During today’s proceedings, Thompson pleaded guilty to a felony information charging him with sexual abuse of a minor and admitted engaging in a sexual act with a child between the age of 12 and 16 years. Thompson admitted penetrating the child victim’s genitals with his finger at a location within the Navajo Indian Reservation on Nov. 12, 2011.
Thompson has been in federal custody since his arrest and remains detained pending his sentencing hearing, which has yet to be scheduled.
This case was investigated by the Farmington office of the FBI and the Shiprock office of the Navajo Nation Division of Public Safety. The case is being prosecuted by Assistant U.S. Attorney Presiliano A. Torrez as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice (DOJ) to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and DOJ’s Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/.
Sanostee, N.M., Man Pleads Guilty to Federal Assault ChargeRead the Press Release
ALBUQUERQUE – Donovan Isiah Sisco, 19, an enrolled member of the Navajo Nation who resides in Sanostee, N.M., pleaded guilty this morning to an aggravated burglary charge under a plea agreement with the U.S. Attorney’s Office.
Sisco was arrested on March 1, 2013, on a criminal complaint charging him with unlawfully entering into a dwelling for the purpose of committing a felony and with committing a battery. He subsequently was indicted and charged with aggravated burglary and assault with intent to commit aggravated burglary in a residence located on the Navajo Indian Reservation on Feb. 8, 2013.
Today, Sisco entered his guilty plea to Count 2 of a superseding indictment charging him with assault with the intention to commit an aggravated burglary. In his plea agreement, Sisco admitted entering the victim’s home without consent and assaulting the victim by grabbing her by the hair and throwing her to the ground causing her to sustain injuries. Sisco also admitted breaking the windows at the victim’s residence as well as the windows of the victim’s vehicle.
Sisco remains in federal custody pending his sentencing hearing, which has yet to be scheduled. At sentencing, Sisco faces a maximum penalty of 10 years in prison followed by three years of supervised release.
This case was investigated by the Farmington office of the FBI and the Shiprock office of the Navajo Nation Division of Public Safety. Assistant U.S. Attorney Elaine Y. Ramirez is prosecuting the case.
San Jose Man Pleads Guilty to Impersonating DEA Agent and Securities FraudRead the Press Release
SAN JOSE - Jonathan Hoang, of San Jose, California, pleaded guilty in federal court in San Jose on September 16, 2013, to impersonating a U.S. Drug Enforcement Agency (DEA) Agent securities fraud, announced United States Attorney Melinda Haag.
Hoang, 48, was indicted on July 25, 2012, by federal grand jury charging him with Use of a Counterfeit Seal of an Agency of the United States, in violation of18 U.S.C. § 506(a)(2); Pretending to Be an Officer of the United States, in violation of 18 U.S.C. § 912; and Possession of a Counterfeit Seal of an Agency of the United States, in violation of 18 U.S.C. § 506(a)(3). He was also charged in a Superseding Information filed on September 12, 2013, with Securities Fraud in violation of 15 U.S.C. §§ 78j(b) and 78ff and 17 C.F.R. §§ 240.10b-5.
Hoang pleaded guilty to all four counts in the Indictment and Superseding Information without a plea agreement with the United States. During the plea hearing, Hoang admitted to the factual basis for the guilty pleas to all charges.
The charges to which Hoang pleaded guilty involving impersonating a DEA Special Agent, are based on the following among other evidence: during the early morning of July 20, 2012, San Jose Police Department Officers found Hoang in a parked truck and discovered law enforcement type equipment in the truck. Upon investigation, the DEA determined that Hoang had indicated to his landlord that he worked for DEA. Hoang also indicated to his landlord that in order to do to his job with the DEA, the landlord could not run a credit check on Hoang. Hoang also provided his landlord with a drug screening report, credit check, and verification of employment from the DEA. The documents Hoang provided to his landlord included documents on purported DEA letterhead containing a DEA seal. In addition, when Hoang was arrested on July 20, 2012, the officers found a counterfeit DEA employee identification card. This document identified “Vu H. Hoang”, “Agent ID# 860501” as a Special Agent of the U.S. Department of Justice Drug Enforcement Administration. The false Identification card contained a DEA seal and a photograph of Hoang.
Hoang has never been employed as a law enforcement officer with the DEA, nor has he ever been authorized by the DEA to hold himself out as a Special Agent of the DEA.
The charge to which Hoang pleaded guilty involving securities fraud is based on the following among other evidence. On or about November 8, 2012, Hoang sold purported stock to an investor. Hoang offered to the investor 2,500 shares of stock in Utherverse Digital, Inc. that Hoang claimed to own. The investor signed a purported “Subscription Agreement” to document the sale, and gave Hoang a check for $2,500 as the purchase money for the stock. Hoang represented to the investor that Utherverse Digital operated a website called Redlight Center, Utherverse Digital was in the process of being acquired by another company, and the shares of Utherverse Digital would dramatically increase in value after the acquisition. At the time Hoang made these representations, he did not own stock issued by Utherverse Digital. Also, Utherverse Digital was not involved in negotiations with another person or entity for the acquisition of Utherverse Digital. Federal Bureau of Investigation agents found the purchase money check and purported “Subscription Agreement” in Hoang’s car on November 9, 2013, while executing a search warrant.
Hoang has been in custody since November 9, 2012.
Hoang’s sentencing hearing is scheduled for December 10, 2013, at 9:00 a.m., before The Honorable Edward J. Davila, U.S. District Court Judge, in San Jose. The following are the maximum statutory penalties for each count:
- Count One of the Indictment: 18 U.S.C. § 506(a)(2) – Use of a Counterfeit Seal of an Agency of the United States: Statutory Penalties: a maximum prison sentence of five years, a maximum fine of $250,000, a maximum period of supervised release of three years, and a $100 special assessment.
- Count Two of the Indictment: 18 U.S.C. § 912 – Pretending to Be an Officer of the United States: Statutory Penalties: a maximum prison sentence of three years, a maximum fine of $250,000, a maximum period of supervised release of one year, and a $100 special assessment.
- Count Three of the Indictment: 18 U.S.C. § 506(a)(3) – Possession of a Counterfeit Seal of an Agency of the United States: Statutory Penalties: a maximum prison sentence of five years, a maximum fine of $250,000, a maximum period of supervised release of three years, and a $100 special assessment.
- Count One of Information: 15 U.S.C. §§ 78j(b) and 78ff and 17 C.F.R. §§ 240.10b-5 – Securities Fraud: Statutory Penalties: a maximum prison sentence of 20 years, a maximum fine of $5,000,000, a maximum period of supervised release of three years, and a $100 special assessment.
However, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
The prosecution is the result of an investigation by the FBI, the DEA, the San Jose Police Department, and Internal Revenue Service – Criminal Investigation.
(Hoang information )
(Hoang indictment )
Rochester Man Sentenced on Drug and Firearms ChargesRead the Press Release
ROCHESTER, N.Y.-- U.S. Attorney William J. Hochul, Jr. announced today that Tabari Facen, 36, of Rochester, N.Y., was sentenced to 41 months in prison by U.S. District Court Judge David G. Larimer, following the defendant’s convictions by a jury for possessing cocaine with the intent to distribute it and possessing ammunition while being a convicted felon. Prior to sentencing, Judge Larimer dismissed additional drug and firearms crimes for which the jury had found defendant guilty, after he concluded that there was insufficient evidence to support the jury’s verdict on those counts. The dismissed counts carried a combined statutory mandatory minimum sentence of 15 years in prison.
Assistant U.S. Attorneys Craig Gestring and Charles E. Moynihan, who handled the case, stated that Facen was arrested after members of the Greater Rochester Area Narcotics Enforcement Team executed a narcotics search warrant at 303 Lakeview Park on September 26, 2011. Upon entering the location, officers encountered and arrested the defendant in a bedroom on the second floor of the apartment.
In searching the apartment, law enforcement officers located and seized a small quantity of crack cocaine which was packaged for street level sale. Officers also located paraphernalia associated with drug trafficking, including glassine ziplock bags. In addition to these items, law enforcement officers located and seized a box of ammunition, which was in plain view in the same room in which officers found Facen.
The sentencing is the result of an investigation by the Greater Rochester Area Narcotics Enforcement Team, under the direction of Lieutenant Gerald Smith, Special Agents from the Drug Enforcement Administration, under the direction of Special Agent in Charge Brian R. Crowell, New York Field Division, the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Resident Agent in Charge Scott Heagney, and the Rochester Police Department, under the direction of Chief James M. Sheppard.Rochester Man Indicted for Threatening the President of the United StatesRead the Press Release
ROCHESTER, N.Y.—U.S. Attorney William J. Hochul, Jr., announced today that a federal grand jury has returned a one-count indictment charging Christopher Ludwig, 30, of Rochester, N.Y., with threats against the President. The charge carries a maximum penalty of five years in prison, a fine of $250,000, or both.
Assistant U.S. Attorney Tiffany H. Lee, who is handling the case, stated that according to the indictment, the defendant called the Monroe County Board of Elections in April 2012 and told an employee “I am going to kill him” in reference to the President of the United States.
The indictment is the culmination of an investigation on the part of the United States Secret Service, under the direction of Special Agent in Charge Tracy Gast.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.Rhino Horn Trafficker Arrested and DetainedRead the Press Release
Earlier today, a federal magistrate judge in Brooklyn detained an Irish national who was arrested on Saturday and charged in a complaint for false labeling in connection with his alleged role in international rhinoceros horn smuggling in violation of the Lacey Act. The arrest and charge is a result of “Operation Crash,” a nationwide effort led by the U.S. Fish & Wildlife Service (FWS) and the Justice Department to investigate and prosecute those involved in the black market trade of endangered rhinoceros horns.
The Department of Justice filed a complaint in federal court in the Eastern District of New York alleging that Michael Slattery, Jr., a 25-year-old Irish national, fraudulently purchased a set of black rhinoceros horns in Texas and then travelled to New York and used a falsified document to sell the horns for $50,000.
The charge and arrest were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and Robert G. Dreher, Acting Assistant Attorney General for the Justice Department’s Environmental and Natural Resources Division.
According to the complaint filed in on September 14, 2013, in 2010 Slattery traveled from England to Texas to acquire black rhinoceros horns. Slattery and others then used a day laborer with a Texas driver’s license as a straw buyer to purchase two horns from an auction house in Austin. The complaint charges that Slattery and his group then traveled to New York where they presented a fraudulent Endangered Species Bill of Sale and sold those two and two other horns to an individual for $50,000.According to court records and government statements made in court, Slattery is a member of The Rathkeale Rovers (also known as the “Irish Travelers”), which are tight-knit extended family groups that live a nomadic lifestyle. The group leverages the rising price for rhinoceros horns in the black market to be used for traditional medicines and carving. According to information made public by Europol, the Rathkeale Rovers have been involved in an epidemic of raids on museums in Europe in which rhinoceros horns have been stolen.
Rhinoceros are an herbivore species of prehistoric origin and one of the largest remaining mega-fauna on earth. They have no known predators other than humans. All species of rhinoceros are protected under United States and international law, and all black rhinoceros species are endangered. Since 1976, trade in rhinoceros horn has been regulated under the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), a treaty signed by more than 175 countries around the world to protect fish, wildlife and plants that are or may become imperiled due to the demands of international markets. Nevertheless, the demand for rhinoceros horn and black market prices have skyrocketed in recent years due to the value that some cultures have placed on ornamental carvings, good luck charms or alleged medicinal purposes, leading to a decimation of the global rhinoceros population. In China, there is a tradition dating back centuries of intricately carved rhinoceros horn cups. Drinking from such a cup was believed to bring good health and such carvings are highly prized by collectors. As a result of this demand, rhino populations have declined by more than 90 percent since 1970. South Africa, for example, has witnessed a rapid escalation in poaching of live animals, rising from 13 in 2007 to more than 618 in 2012.
The charge in the complaint is merely and allegation, and the defendant is presumed innocent unless and until proven guilty. The government’s case is being prosecuted by Assistant U.S. Attorney Julia Nestor of the Eastern District of New York and Trial Attorney Gary N. Donner of the Justice Department’s Environmental and Natural Resources Division.
Rhino Horn Trafficker Arrested and DetainedRead the Press Release
Earlier today, a federal magistrate judge in Brooklyn detained an Irish national who was arrested on Saturday and charged in a complaint for false labeling in connection with his alleged role in international rhinoceros horn smuggling in violation of the Lacey Act. The arrest and charge is a result of “Operation Crash,” a nationwide effort led by the U.S. Fish & Wildlife Service (FWS) and the Justice Department to investigate and prosecute those involved in the black market trade of endangered rhinoceros horns.
The Department of Justice filed a complaint in federal court in the Eastern District of New York alleging that Michael Slattery, Jr., a 25-year-old Irish national, fraudulently purchased a set of black rhinoceros horns in Texas and then travelled to New York and used a falsified document to sell the horns for $50,000.
The charge and arrest were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and Robert G. Dreher, Acting Assistant Attorney General for the Justice Department’s Environmental and Natural Resources Division.
“The illicit trafficking in black rhino horns encourages the wholesale destruction of these protected animals. Slattery showed no regard for the black rhino’s tenuous hold on survival, as he allegedly used a straw buyer and fraudulent documents to convert the protected animal parts into cash. This arrest is the culmination of the dogged efforts of committed law enforcement agents to track down and root out illegal trafficking in protected wildlife,” said U.S. Attorney Lynch. “The majestic black rhinoceros is protected under the laws of this country and the international community – we stand by our obligations to defend these precious animals.” Ms. Lynch extended her grateful appreciation to the U.S. Fish and Wildlife Service Special Operations and the Department of Homeland Security for their assistance.
According to the complaint filed in on September 14, 2013, in 2010 Slattery traveled from England to Texas to acquire black rhinoceros horns. Slattery and others then used a day laborer with a Texas driver’s license as a straw buyer to purchase two horns from an auction house in Austin. The complaint charges that Slattery and his group then traveled to New York where they presented a fraudulent Endangered Species Bill of Sale and sold those two and two other horns to an individual for $50,000.
According to court records and government statements made in court, Slattery is a member of The Rathkeale Rovers (also known as the “Irish Travelers”), which are tight-knit extended family groups that live a nomadic lifestyle. The group leverages the rising price for rhinoceros horns in the black market to be used for traditional medicines and carving. According to information made public by Europol, the Rathkeale Rovers have been involved in an epidemic of raids on museums in Europe in which rhinoceros horns have been stolen.
Rhinoceros are an herbivore species of prehistoric origin and one of the largest remaining mega-fauna on earth. They have no known predators other than humans. All species of rhinoceros are protected under United States and international law, and all black rhinoceros species are endangered. Since 1976, trade in rhinoceros horn has been regulated under the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), a treaty signed by more than 175 countries around the world to protect fish, wildlife and plants that are or may become imperiled due to the demands of international markets. Nevertheless, the demand for rhinoceros horn and black market prices have skyrocketed in recent years due to the value that some cultures have placed on ornamental carvings, good luck charms or alleged medicinal purposes, leading to a decimation of the global rhinoceros population. In China, there is a tradition dating back centuries of intricately carved rhinoceros horn cups. Drinking from such a cup was believed to bring good health and such carvings are highly prized by collectors. As a result of this demand, rhino populations have declined by more than 90 percent since 1970. South Africa, for example, has witnessed a rapid escalation in poaching of live animals, rising from 13 in 2007 to more than 618 in 2012.
The charge in the complaint is merely and allegation, and the defendant is presumed innocent unless and until proven guilty. The government’s case is being prosecuted by Assistant U.S. Attorney Julia Nestor and Trial Attorney Gary N. Donner of the Justice Department’s Environmental and Natural Resources Division.
The Defendant
Michael Slattery, Jr.
Citizenship: Irish
Age: 25Registered Sex Offender Sentenced to Federal Prison for Receipt of Child PornographyRead the Press Release
DENVER – Kris Katzenmeyer, age 51, of Broomfield, Colorado, was sentenced today by U.S. District Court Judge Robert E. Blackburn to serve 87 months (over 7 years) in federal prison for receipt of child pornography, U.S. Attorney John Walsh and Denver Division U.S. Postal Inspector in Charge Adam P. Behnen announced. Following his prison sentence, Judge Blackburn sentenced Katzenmeyer to spend 20 years on supervised release. He also will be required to register as a sex offender. The defendant appeared at the sentencing hearing in custody, and was remanded at the hearing’s conclusion.
Katzenmeyer was indicted by a federal grand jury in Denver on December 6, 2012. He pled guilty to receipt of child pornography before Judge Blackburn on June 20, 2013. He was sentenced on September 18, 2013.
According to court documents, including the indictment and the stipulated facts contained in the plea agreement, in October 2010, the United States Postal Inspection Service (USPIS) and a Foreign Law Enforcement Agency began an investigation into a movie production company that operated a website offering DVDs and streaming videos (films) of child pornography for sale. On numerous occasions in 2011, USPIS Inspectors conducted undercover purchases of DVDs via the international company’s online ordering system. Law enforcement determined that the international company had a shipping facility located in the state of New York and that the undercover online orders were transferred from the international company to this New York based shipping facility for fulfillment.
A review of the international company’s business records, recovered pursuant to a lawfully obtained search warrant during the investigation, identified customer Kris Katzenmeyer, the defendant, who was living in Northglenn, Colorado. The defendant used the internet to purchase 49 films from the international company’s website between November 24, 2006 and April 29, 2011. The defendant received all of the films as they were delivered to him through the U.S. Mail.
During the investigation it was determined that the defendant volunteered at a local church, working on the church’s website and teaching computer classes. During a subsequent interview, the defendant stated that he had physical contact with a minor child on three occasions between 2009 and 2012.
“This investigation originated from information received from overseas law enforcement partners, which demonstrates that the Department of Justice, and the U.S. Attorney’s Office, working closely together with our law enforcement partners, will now allow international boundaries to prevent us from conducting criminal investigations, especially when they pertain to the exploitation of our children,” said U.S. Attorney John Walsh.
“Protecting children from these crimes is a top priority for the U.S. Postal Inspection Service,” said Denver Division U.S. Postal Inspector in Charge Adam P. Behnen. “This prison sentence should put all types of child predators on notice that serious consequences await those who seek to exploit children via the U.S. Mail.”
This case was investigated by the U.S. Postal Inspection Service (USPIS).
The defendant was prosecuted by Assistant U.S. Attorney Alecia Riewerts Wolak.
This case was brought as part of Project Safe Childhood (PSC), a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, PSC marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about PSC, please visit http://www.justice.gov/psc/ For more information about Internet safety education, please visit http://www.justice.gov/psc/resources.html and click on the tab "resources."
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Public Relations Firm Employee Sentenced to 18 Months in Federal Prison for Embezzling More Than $772,000 from EmployerRead the Press Release
DALLAS — Marci Johnson, 46, of Kaufman, Texas, was sentenced today by U.S. District Judge Jorge A. Solis to 18 months in federal prison for embezzling more than $772,000 from her employer, Spaeth Communications. Judge Solis also ordered that Johnson serve a one-year term of supervised release with the first six months served in home confinement with electronic monitoring. The Court also ordered that Johnson pay restitution of $772,829. Prior to sentencing, Johnson paid the full amount of restitution to the clerk’s registry, and Judge Solis, as part of sentencing, ordered that the money be disbursed to the victim. Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
Johnson pleaded guilty in June 2013 to an Information charging one count of mail fraud. According to documents filed in the case, from at least August 2003 to March 2011, Johnson embezzled $772,829 from Spaeth Communications of Dallas. During part of that time, Johnson was the company’s Chief Administrative Officer, and in that role, had access to its company checks and company credit cards. Based on her long-standing working relationship with the company’s owner, Johnson occupied a position of trust that provided her substantial discretion over the company’s bank accounts.
Johnson admitted using her corporate American Express card for numerous personal charges, such as dining, department stores and entertainment. In addition, she used company checks to pay for outstanding charges on the company’s American Express bill, including charges she made for personal expenses. She also wrote company checks to cover charges on her personal credit cards. In fact, Johnson admitted that she wrote company checks to Citibank, her personal credit card provider, to cover the cost of an outdoor deck, hot tub, outdoor granite countertops and grill at her personal residence in Kaufman and caused false entries to be made in the company’s accounting software to prevent others from discovering her fraudulent purchases.
The investigation was conducted by the U.S. Postal Inspection Service and the FBI. Assistant U.S. Attorneys J. Nicholas Bunch and P. J. Meitl prosecuted; Assistant U.S. Attorney Melissa Childs handled the forfeiture.
President of Tivest Sentenced to Fifty Months in Prison for Fraud Related to the Bank of the CommonwealthRead the Press Release
NORFOLK, Va. – Dwight A. Etheridge, 49, of Chesapeake, Virginia, was sentenced today to fiftymonths in prison, followed by five years of supervised release, for conspiracy to commit bank fraud, bank fraud, false statements to a financial institution, and aiding and abetting misapplication of bank funds.
Kathleen M. Kahoe, Acting United States Attorney for the Eastern District of Virginia; Royce E. Curtin, Special Agent in Charge of the FBI’s Norfolk Field Office; Thomas J. Kelly, Special Agent in Charge of the Internal Revenue Service Criminal Investigation’s Washington, D.C., Field Office (IRS-CI); Christy L. Romero, Special Inspector General for the Troubled Asset Relief Program (SIGTARP); Jon T. Rymer, Inspector General of the Federal Deposit Insurance Corporation (FDIC-OIG); and Mark Bialek, Inspector General of the Board of Governors of the Federal Reserve System and Consumer Financial Protection Bureau (Fed-CFPB-OIG) made the announcement after sentencing by United States District Judge Raymond A. Jackson.
Etheridgewas found guilty after a lengthy, ten week, jury trial on May 24, 2013. The evidence presented at trial demonstrated that Etheridge, President of Tivest Development & Construction, LLC, and other corporate entities, conspired with numerous Bank of the Commonwealth (“Bank”) insiders to engage in an illegal reciprocal relationship where he performed favors to mask the Bank’s loan losses in exchange for preferential treatment. For example, at the request of Bank insiders and to prevent losses related to a failing loan, Etheridge arranged for Tivest to purchase a construction project located at 310 24th Street in Virginia Beach. The Bank gave Tivest a $4.1 million loan to purchase and renovate this property. During the funding of this loan, Etheridge caused fraudulent construction draws to be submitted to the Bank which certain Bank insiders funded without inspecting whether Etheridge had completed the work. In one draw request, Etheridge requested monies for a “final clean” when the project stood as an empty shell wrapped in building wrap. Etheridge used construction loan proceeds to make payments on his other loans at the Bank, to support his staffing company, Genesis Staffing, to obtain thousands of dollars in cash, to make political donations, and to make charitable contributions.
In exchange for performing this favor, Edward Woodard, Stephen Fields and Jeremy Churchill allowed Etheridge to amass large overdrafts without question, have easy access to millions in loans, and gave his company thousands of dollars to work on bank-owned property. As a result, Etheridge was able to prop up his failing businesses and portray himself as an upstanding, effective business leader. All the while, Etheridge was attempting to convince the Norfolk City Council to allow him to build a multi-million dollar office building called the MidTown Office Tower in the heart of Norfolk.
Additionally, Etheridge also defrauded the Bank and a new market tax credit fund called Paramount Community Development Fund (“Paramount”) in connection with a construction project called the Villas at Broad Creek. After the City of Norfolk gave acres of land in the Broad Creek section of Norfolk for a nominal fee, Etheridge obtained a construction loan totaling $4,860,000 from Paramount where he promised to use the funds solely to construct a mixed use development project in the troubled Broad Creek neighborhood. Again, Etheridge caused fraudulent construction draws to be submitted to the Bank. Etheridge used a portion of the construction loan proceeds to support his staffing company, Genesis Staffing, to make payments on unrelated, overdue loans at the Bank, to cover large overdrafts at the Bank, to make political donations and to make charitable contributions.
At the end of 2010, after the Bank could no longer fund loans to Etheridge, his businesses collapsed. Etheridge defaulted on millions of dollars of loans at Paramount and the Bank, laid-off his employees at Tivest, and he declared personal bankruptcy. As a result of the Bank’s failure, the Federal Deposit Insurance Corporation currently has suffered $333 million in losses to date.
The investigation was conducted by the FBI’s Norfolk Office, IRS-CI, SIGTARP, FDIC-OIG, and Fed-CFPB-OIG. Assistant United States Attorneys Melissa E. O’Boyle, Katherine Lee Martin, and Uzo Asonye prosecuted the case on behalf of the United States.
A copy of this press release may be found on the website of the United States Attorney's Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.Pollock Prisoner Convicted of Assaulting Fellow InmateRead the Press Release
ALEXANDRIA, La. – United States Attorney Stephanie A. Finley announced that John Waller, 41, of New Rochelle, N.Y., was found guilty Tuesday by a federal jury of attacking a fellow inmate with a makeshift knife. United States District Judge Dee D. Drell presided over the trial.Waller’s trial started Monday and ended Tuesday afternoon with the jury returning the guilty verdict after deliberating for more than two hours. Based on witness testimony and documents admitted into evidence, it was established that on March 28, 2010 at the U.S. Penitentiary in Pollock, La., Waller could be seen on video in a prison common area stabbing a fellow inmate repeatedly with a makeshift knife. The assaulted inmate received puncture wounds to the upper body and was brought to a nearby hospital for treatment. Waller testified at trial. He said that he acted in self-defense, and that he was justified in committing the assault. Waller is serving a 320-month sentence on narcotics and weapons charges.
Waller faces up to 10 years in prison, a $250,000 fine, and three years of supervised release for assault with a dangerous weapon with intent to cause bodily harm. Sentencing has been set for December 19, 2013.
The FBI and U.S. Bureau of Prisons conducted the investigation. Assistant U.S. Attorney Brandon B. Brown is prosecuting the case.
Pine Ridge Man Indicted on Assault ChargesRead the Press Release
United States Attorney Brendan V. Johnson announced that a Pine Ridge, South Dakota, man was indicted by a federal grand jury for kicking a man in the head during an argument and for striking an Oglala Sioux Tribe police officer in the face.
Lee Larney, a/k/a “Southern Wind,” age 32, was indicted on March 19, 2013, for Assault with a Dangerous Weapon and Assault Resulting in Serious Bodily Injury, and on April 16, 2013, for Assault on a Federal Officer. He appeared before U.S. Magistrate Judge Veronica L. Duffy on September 12, 2013, and pled not guilty to the Indictments.
The maximum penalty upon conviction is 20 years’ imprisonment and/or a $250,000 fine. The charges are merely accusations and Larney is presumed innocent until and unless proven guilty.
The investigations are being conducted by the Oglala Sioux Tribe Department of Public Safety, the Bureau of Indian Affairs Office of Justice Services, and the Federal Bureau of Investigation. Assistant U.S. Attorney Sarah B. Collins is prosecuting the cases.
Larney was remanded to the custody of the U.S. Marshals Service. A trial date has not been set.Pennsylvania Sex Offender Sentenced for Failing to RegisterRead the Press Release
ROCHESTER, N.Y.-- U.S. Attorney William J. Hochul, Jr. announced today that Gregory Grove, a/k/a Gregory Kutruff, 37, Fayette, N.Y., who was convicted of failing to register as a sex offender, was sentenced to 18 months in prison and five years of supervised release by U.S. District Judge David G. Larimer.
Assistant U.S. Attorney Tiffany H. Lee, who handled the case, stated that Grove is a sex offender required to register under the Sex Offender Registration and Notification Act. In June 2011, he left the State of Pennsylvania to come to the Western District of New York but failed to register as a sex offender in New York State. The defendant also failed to update his registration status with Pennsylvania authorities to advise them that he had left that state.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The sentencing is the culmination of an investigation on the part of the United States Marshals Service, under the direction of Marshal Charles Salina.Pennsylvania Man Charged with Traveling to Have Sex with Minor FemaleRead the Press Release
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Federal Grand Jury also returns drug and gun indictments
MARTINSBURG, WV – A Warfordsburg, Pennsylvania, man has been indicted by a federal grand jury for allegedly traveling across state lines to have sex with a minor, according to United States Attorney William J. Ihlenfeld, II.
ANTHONY ALLEN PENNINGTON, age 24, is charged with transporting a minor female from Berkeley Springs, West Virginia, to the Commonwealth of Pennsylvania and engaging in sexual activity with her on May 18, 2013. PENNINGTON faces one count of “Transportation in Interstate Commerce of Minor for Purposes of Engaging in Sexual Activity,” and one count of “Traveling in Interstate Commerce with the Intent to Engage in Illicit Sexual Conduct.” If convicted, PENNINGTON faces up to life in prison on the transportation count and up to thirty years in prison on the traveling count.
PENNINGTON, who is being held at the Eastern Regional Jail, will appear in federal court for an initial appearance. The case was investigated by the Morgan County Sheriff’s Department.
In addition, the following indictments were also returned:
NICHOLAS JAMES HALL, age 22, of Martinsburg, was charged with two counts of “Distribution of Crack Cocaine,” one count of “Possession with Intent to Distribute Crack Cocaine,” two counts of “Possession with Intent to Distribute Heroin,” and two counts of “Felon in Possession of Firearms and Ammunition.” The U.S. Attorney’s office is seeking to forfeit $5,898 in U.S. currency as well as firearms and ammunition seized by law enforcement officers. If convicted, HALL faces up to 30 years in prison on each of the drug charges and up to 10 years in prison on each of the firearms charges. This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Eastern Panhandle Drug & Violent Crime Task Force, consisting of officers from the West Virginia State Police - Bureau of Criminal Investigation, the Martinsburg Police Department, and the Berkeley County Sheriff’s Department.
THEOFANIS MAVROUDIS, age 45, of Charles Town, West Virginia, was charged with “Failure to Register as Sex Offender” from April 2012 to November 21, 2012, in Charles Town, West Virginia. If convicted, MAVROUDIS faces up to ten years in prison. This case was investigated by the United States Marshals Service.
The PENNINGTON, HALL and MAVROUDIS cases will be prosecuted by Assistant United States Attorney Jarod J. Douglas.
BRANDON L. WHITE, age 29, of Martinsburg, was charged with one count of “Stealing Public Money” and two counts of “False Statement.” The Indictment charges WHITE with providing false travel vouchers to the VA Medical Center for reimbursement for travel from a false address in Augusta, West Virginia, in the approximate amount of $10,076.58. If convicted, WHITE faces up to ten years in imprisonment on the stealing public money charge and five years in prison on the false statement charges. This case will be prosecuted by Assistant United States Attorney Robert H. McWilliams, Jr. and was investigated by the Veterans Administration, Office of Inspector General, Criminal Investigations Division.
DONNIE COLLINS, age 28, was charged with three counts of “Distribution of Heroin,” one count of “Possession with Intent to Distribute Heroin,” and one count of “Felon in Possession of Firearms.” The U.S. Attorney’s office is seeking to forfeit three firearms seized by law enforcement officers. If convicted, COLLINS faces up to 20 years in prison on each of the drug charges and up to 10 years in prison on the firearms charges.
CODY ASHBY, age 21, of Martinsburg, was charged with “Felon in Possession of a Firearm.” The U.S. Attorney’s office is seeking a firearm and ammunition seized by law enforcement officers. If convicted, ASHBY faces up to 10 years in prison.
These case were investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Eastern Panhandle Drug & Violent Crime Task Force, consisting of officers from the West Virginia State Police - Bureau of Criminal Investigation, the Martinsburg Police Department, and the Berkeley County Sheriff’s Department.
RENE GONZALEZ-BERMUDEZ, was charged with “Illegal Reentry After Removal.” If convicted, GONZALEZ-BERMUDEZ faces up to two years imprisonment. The case was investigated by US Immigration and Customs Enforcement, Homeland Security Investigations (ICE/HSI).
The COLLINS, ASHBY and GONZALEZ-BERMUDEZ cases will be prosecuted by Assistant United States Attorney Paul T. Camilletti.
All of the charges contained in the above-referenced indictments are merely accusations and not evidence of guilt, and each defendant is presumed innocent until and unless proven guilty. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offense and the criminal history, if any, of the defendant.