Latest Records
Newest first across public DOJ and U.S. Attorney press releases.
14 November 2013
Las Vegas Man Convicted of Transportation of A Minor with Intent to Engage in Criminal Sexual ActvityRead the Press Release
TUCSON, Ariz. – Keith Deshawn Anderson, 39, of Las Vegas, Nev. was found guilty of four counts of transportation of a minor with intent to engage in criminal sexual activityby a federal jury in Tucson on November 12, 2013. The case was tried before U.S. District Judge Raner C. Collins. The defendant is being held after trial. Sentencing is set before Judge Collins on January 21, 2014.
The evidence at trial showed that during 2011 and 2012 the defendant transported a female minor multiple times from Arizona to Nevada and engaged in statutory rape.
U.S. Attorney John S. Leonardo stated, "This conviction serves as a reminder that sexual predators exist in our communities and we all need to be more vigilant."
A conviction for transportation of a minor with intent to engage in criminal sexual activity carries a minimum mandatory term of ten years imprisonment up to life imprisonment, a maximum fine of $250,000, or both.
The investigation in this case was conducted by the Federal Bureau of Investigation and the Sierra Vista Police Department. The prosecution was handled by Nicole Savel and Karen Rolley, Assistant U.S. Attorneys, District of Arizona, Tucson.CASE NUMBER: CR-12-0914-TUC-RCC (CRP)
RELEASE NUMBER: 2013-086_AndersonFor more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az
Laguna Pueblo Man Pleads Guilty to Statutory Rape ChargeRead the Press Release
ALBUQUERQUE – Joshua Waconda, 21, a member and resident of Laguna Pueblo, entered a guilty plea this morning to an indictment charging him with sexual abuse of a minor under a plea agreement with the U.S. Attorney’s Office.
Waconda was arrested in Nov. 2012, on an indictment charging him with engaging in a sexual act with a child under the age of 16 years in Aug. 2011, on Laguna Pueblo lands. During today’s proceedings, Waconda pleaded guilty to the indictment.
At sentencing, which has yet to be scheduled, Waconda faces a maximum sentence of 15 years in prison followed by a term of supervised release to be determined by the court. Waconda will be required to register as a sex offender after he completes his prison sentence.
This case was investigated by the Laguna/Acoma Agency of BIA’s Office of Justice Services and the Pueblo of Laguna Police Department and is being prosecuted by Assistant U.S. Attorney Kyle T. Nayback.
The case was brought 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/.
Kansas Man Charged in $3 Million Scheme to Sell Foreign Versions of BotoxRead the Press Release
KANSAS CITY, Mo. - Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Hesston, Kan., man has been indicted by a federal grand jury alongside an Alton, Ill., business owner and his company who were charged earlier this year for distributing more than $3 million worth of foreign Botox and Juvederm in the United States.
Christopher Tozier, 43, of Hesston, was charged in a superseding indictment returned by a federal grand jury in Kansas City, Mo. Today’s indictment replaces an April 3, 2013, indictment that charged Christopher Carstens, 48, of Alton, and his company, Orthopaedic Solutions, Inc., with violations of the Federal Food, Drug and Cosmetic Act.
The federal indictment alleges that Carstens and Orthopaedic Solutions distributed approximately 5,879 units of a foreign version of the prescription drug Botox and a foreign version of the prescription device Juvederm through their sales representatives to doctors or other health care professionals in the United States between 2008 and 2011, at a retail value of approximately $3,058,183.
Juvederm is a clear, biodegradable gel implant that is injected into the skin to correct wrinkles and folds.
Today’s superseding indictment charges Carstens, Orthopaedic Solutions and Tozier together in two counts of smuggling goods into the United States. They allegedly imported foreign Botox into the United States contrary to the prohibition against introducing drugs that were misbranded (because the foreign Botox labeling failed to bear the statement “Rx only”). They allegedly imported Juvederm 3 into the United States contrary to the prohibition against introducing devices that were adulterated (because the foreign versions of Juvederm 3 lacked FDA approval for distribution in the United States).
Tozier is also charged in today’s superseding indictment with one count of smuggling foreign Botox into the United States, two counts of distributing a misbranded drug (foreign Botox) across state lines and one count of distributing an adulterated device (Juvederm 3) across state lines.
Today’s superseding indictment contains several charges that were part of the original indictment. Carstens and Orthopaedic Solutions are charged with one count of mail fraud because they allegedly executed their scheme by distributing foreign Botox (which the FDA had not approved for distribution in the United States) via FedEx and attempted to hide their fraudulent scheme from doctors and health care professionals. Carstens and Orthopaedic Solutions are charged with one count of distributing an unapproved new drug across state lines because they had not received approval to import or distribute the foreign version of Botox in the United States. Carstens and Orthopaedic Solutions are charged with one count of distributing a misbranded drug across state lines. Carstens and Orthopaedic Solutions are charged with three counts of distributing an adulterated device across state lines. Carstens and Orthopaedic Solutions are charged with three counts of distributing a misbranded device across state lines because the Juvederm 3 labeling failed to bear adequate directions for use or appropriate warnings.
The indictment also contains a forfeiture count, which would require Carstens and Orthopaedic Solutions to forfeit to the government any property derived from the proceeds of the scheme, including a money judgment of $3,058,183 for all three defendants and an additional $26,125 from Tozier.
Dickinson cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorneys Jane Pansing Brown and Lucinda S. Woolery. It was investigated by the U.S. Food and Drug Administration, Office of Criminal Investigation.Justice Department Announces More Than $62 Million to Strengthen Re-entry; Probation and Parole ProgramsRead the Press Release
WASHINGTON – The Justice Department has awarded more than $62 million in grants to strengthen efforts to help people returning from prison rejoin their communities and become productive, law-abiding citizens. This grant announcement was made by Attorney General Eric Holder today while in St. Louis, where he visited Project EARN, a Drug Reentry Court program. Attorney General Holder delivered remarks to the program’s graduates and emphasized that successful reentry is a top priority at the Justice Department and a central part of his new “Smart on Crime” initiative.
“Over the course of my career, I’ve seen just how important – and powerful – reentry programs can be,” said Attorney General Eric Holder. “I learned how this cycle weakens communities, tears families apart and destroys individual lives. If more communities adopt reentry programs like the one I witnessed today in St. Louis, it will reduce criminal justice spending, ensure the fairest possible outcomes, and forge the stronger, safer communities that all of our citizens deserve.”
Later today, Attorney General Holder will travel to Peoria, IL, to attend a pre-court meeting with judges and pretrial service officers. He will also deliver remarks at an alternative to detention court hearing.
The Office of Justice Programs (OJP) made these 112 competitive and supplemental Second Chance Act (SCA) awards to state, tribal and local governments, and non-profit organizations to reduce recidivism, provide reentry services, conduct research and evaluate the impact of reentry programs. The SCA programs, administered through the Bureau of Justice Assistance (BJA) and the Office of Juvenile Justice and Delinquency Prevention (OJJDP), are designed to help communities develop and implement comprehensive strategies to reduce recidivism and address the challenges faced by incarcerated adults and youth when they return to their communities following release from confinement.
“Effective reentry services are critical to helping formerly incarcerated individuals remain crime-free and become productive, law-abiding citizens,” said Assistant Attorney General of the Office of Justice Programs Karol V. Mason. “The awards continue this Administration’s commitment to achieving sustainable reductions in recidivism and improving the safety of our communities.”
“We must continue to draw on the science of recidivism reduction and what works to ensure that the right people get the right integrated interventions at the right times,” said BJA Director Denise E. O’Donnell.
Of the over $62 million in funding provided, more than $57 million (91 BJA awards and 19 OJJDP awards) supports smart probation projects, treatment of returning adult and juveniles with co-occurring substance abuse and mental health disorders; adult and juvenile reentry demonstration projects; adult mentoring programs; technology career training projects for incarcerated adults and juveniles; and demonstration field experiments to test a parole reentry model. The remaining $5.4 million supports two awards for evaluation activities and training and technical assistance for Second Chance Act grantees and the reentry field in general.
OJJDP awarded more than $9.7 million in Second Chance Act Juvenile Reentry Program grant awards to reduce recidivism and assist youth in successfully returning to their communities after secure confinement. This includes $176,000 to assist four jurisdictions in planning a juvenile reentry program, and $6,573,177 for ten jurisdictions to implement evidence-based reentry programs that provide a comprehensive range of services for juveniles up to 18 years of age. This also includes $2,977,252 for five community programs to reduce long-term alcohol and other substance abuse among youth in secure confinement facilities and to increase drug treatment and mental health services for these youth.
“Too many young people caught up in the juvenile justice system fail to return to school, find a job, or live healthy, drug-free lives after being confined,” said OJJDP Administrator Robert L. Listenbee. “These grants will help them find a path out of crime and delinquency and begin to make positive contributions to their communities.”
OJP will also continue to provide reentry resources to the field through the National Reentry Resource Center (NRRC), through a cooperative agreement with the Council of State Governments (CSG) Justice Center, administered by BJA. The NRRC offers training and technical assistance for SCA grantees, provides distance learning and other reentry resources to the field, and administers the “What Works in Reentry Clearinghouse.” NRRC collaborates with other federal agencies focused on reentry activities and with the Attorney General’s Federal Interagency Reentry Council and its staff working group.
For a list of all OJP grant awards, please visit: www.ojp.gov/funding/funding.htm.
For more information on the NRRC, please visit: www.nationalreentryresourcecenter.org.
For more information on the Federal Reentry Council, please visit: csgjusticecenter.org/nrrc/projects/firc/.
The Office of Justice Programs, headed by Assistant Attorney General Karol V. Mason, provides federal leadership in developing the nation’s capacity to prevent and control crime, administer justice, and assist victims. OJP has six components: the Bureau of Justice Assistance; the Bureau of Justice Statistics; the National Institute of Justice; the Office of Juvenile Justice and Delinquency Prevention; the Office for Victims of Crime; and the Office of Sex Offender Sentencing, Monitoring, Apprehending, Registering, and Tracking.
Justice Department Announces More Than $62 Million <br /> to Strengthen Reentry, Probation and Parole ProgramsRead the Press Release
The Justice Department has awarded more than $62 million in grants to strengthen efforts to help people returning from prison rejoin their communities and become productive, law-abiding citizens. This grant announcement was made by Attorney General Eric Holder today while in St. Louis, where he visited Project EARN, a Drug Reentry Court program. Attorney General Holder delivered remarks to the program’s graduates and emphasized that successful reentry is a top priority at the Justice Department and a central part of his new “Smart on Crime” initiative.
“Over the course of my career, I’ve seen just how important – and powerful – reentry programs can be,” said Attorney General Eric Holder. “I learned how this cycle weakens communities, tears families apart and destroys individual lives. If more communities adopt reentry programs like the one I witnessed today in St. Louis, it will reduce criminal justice spending, ensure the fairest possible outcomes, and forge the stronger, safer communities that all of our citizens deserve.”
Later today, Attorney General Holder will travel to Peoria, Ill., to attend a pre-court meeting with judges and pretrial service officers. He will also deliver remarks at an alternative to detention court hearing.
The Office of Justice Programs (OJP) made these 112 competitive and supplemental Second Chance Act (SCA) awards to state, tribal and local governments, and non-profit organizations to reduce recidivism, provide reentry services, conduct research and evaluate the impact of reentry programs. The SCA programs, administered through the Bureau of Justice Assistance (BJA) and the Office of Juvenile Justice and Delinquency Prevention (OJJDP), are designed to help communities develop and implement comprehensive strategies to reduce recidivism and address the challenges faced by incarcerated adults and youth when they return to their communities following release from confinement.
“Effective reentry services are critical to helping formerly incarcerated individuals remain crime-free and become productive, law-abiding citizens,” said Assistant Attorney General of the Office of Justice Programs Karol V. Mason. “The awards continue this Administration’s commitment to achieving sustainable reductions in recidivism and improving the safety of our communities.”
“We must continue to draw on the science of recidivism reduction and what works to ensure that the right people get the right integrated interventions at the right times,” said BJA Director Denise E. O’Donnell.
Of the over $62 million in funding provided, more than $57 million (91 BJA awards and 19 OJJDP awards) supports smart probation projects, treatment of returning adult and juveniles with co-occurring substance abuse and mental health disorders; adult and juvenile reentry demonstration projects; adult mentoring programs; technology career training projects for incarcerated adults and juveniles; and demonstration field experiments to test a parole reentry model. The remaining $5.4 million supports two awards for evaluation activities and training and technical assistance for Second Chance Act grantees and the reentry field in general.
OJJDP awarded more than $9.7 million in Second Chance Act Juvenile Reentry Program grant awards to reduce recidivism and assist youth in successfully returning to their communities after secure confinement. This includes $176,000 to assist four jurisdictions in planning a juvenile reentry program, and $6,573,177 for ten jurisdictions to implement evidence-based reentry programs that provide a comprehensive range of services for juveniles up to 18 years of age. This also includes $2,977,252 for five community programs to reduce long-term alcohol and other substance abuse among youth in secure confinement facilities and to increase drug treatment and mental health services for these youth.
“Too many young people caught up in the juvenile justice system fail to return to school, find a job, or live healthy, drug-free lives after being confined,” said OJJDP Administrator Robert L. Listenbee. “These grants will help them find a path out of crime and delinquency and begin to make positive contributions to their communities.”
OJP will also continue to provide reentry resources to the field through the National Reentry Resource Center (NRRC), through a cooperative agreement with the Council of State Governments (CSG) Justice Center, administered by BJA. The NRRC offers training and technical assistance for SCA grantees, provides distance learning and other reentry resources to the field, and administers the “What Works in Reentry Clearinghouse.” NRRC collaborates with other federal agencies focused on reentry activities and with the Attorney General’s Federal Interagency Reentry Council and its staff working group.
For a list of all OJP grant awards, please visit: www.ojp.gov/funding/funding.htm.
For more information on the NRRC, please visit: www.nationalreentryresourcecenter.org.
For more information on the Federal Reentry Council, please visit: csgjusticecenter.org/nrrc/projects/firc/.
The Office of Justice Programs, headed by Assistant Attorney General Karol V. Mason, provides federal leadership in developing the nation’s capacity to prevent and control crime, administer justice, and assist victims. OJP has six components: the Bureau of Justice Assistance; the Bureau of Justice Statistics; the National Institute of Justice; the Office of Juvenile Justice and Delinquency Prevention; the Office for Victims of Crime; and the Office of Sex Offender Sentencing, Monitoring, Apprehending, Registering, and Tracking.
Jury Unanimously Finds Hood River Man Guilty of Defrauding Customers Who Purchased Dietary Supplements and Exercise MachinesRead the Press Release
Defendant falsely represented himself as a naturopathic doctorPORTLAND, Ore. – A civil jury unanimously concluded Wednesday afternoon that James Cole, 66, of Hood River, Oregon, operated schemes to defraud his customers in the operation of two separate but related businesses. The first business, Maxam Neutraceutics, manufactures and sells so-called dietary supplements in the form of spray bottles, which were advertised as being effective in treating a variety of incurable medical conditions, including autism, which was Maxam’s primary target market. The second business, TurboSonic USA, sold electronic vibration machines manufactured in Korea and designed to be used for easy exercise. The Maxam products retailed for approximately $125 per bottle, and the TurboSonic machines retailed for between $12,000 and $16,000.
The jury deliberated for approximately four hours following the six-day trial. Evidence at trial revealed that Cole’s scheme in relation to the sale of the Maxam sprays included: falsely representing that the products were created and manufactured by a Harvard chemist, when in fact, they were made by a twice-convicted federal felon and self-taught chemist in the Boston area operating in unknown labs under unknown conditions; failing to disclose that the products contained rare bacteria not listed on the labels and believed by the government’s expert to have been intentionally put into the products by the felon manufacturer; and failing to reveal that Cole had never conducted clinical trials of the products, despite advertising them as “clinically proven” to improve conditions such as autism, Alzheimer’s, Parkinson’s, and multiple sclerosis.
In addition, the customer service representatives Cole hired to respond to customer inquiries – none of whom had any medical training, and all of whom were trained solely by reviewing Maxam’s own marketing literature and speaking to Cole and to the felon chemist – were instructed to provide medical-sounding advice to customers who called the office.
Regarding the TurboSonic machines, the evidence revealed that Cole marketed the machines as FDA-Approved medical devices that were capable of treating over 100 medical conditions if the machine’s dials were turned to particular settings, including cancer and HIV. Much of the company’s marketing efforts were devoted to placing the machines in the offices of chiropractors and physical therapists. Cole’s office manager compiled an alphabetized list of diseases and their corresponding purported treatment settings into a list of “protocols” which Cole’s company distributed with the machines and instructed chiropractors to place on the walls of their offices for patients to use. The machines were then advertised by Cole to have “researched and proven medical benefits” for the treatment of conditions ranging from anemia to vertigo, when in reality, the only research conducted on the machines confirmed that they were meant to be used as exercise machines. In addition, the machines were not FDA-Approved, as the FDA considered the machines to be purely exercise machines and no different from a treadmill, and that the list of treatment protocols were unsupported by any medical research.
The case was filed as a civil asset forfeiture case, and by returning a verdict in favor of the United States, the government is now entitled to keep over $700,000 in assets that were seized from Cole’s home and businesses in April of 2011. The assets included the full balance of three bank accounts held by Cole’s businesses, Cole’s interest in a condominium located in California, and approximately 320 ounces worth of gold found in Cole’s safe. The jury concluded that those assets were traceable to the proceeds of Cole’s frauds. The evidence at trial revealed that Cole’s two businesses grossed almost $21 million between 2005 and mid-2011.
Two additional cases are still pending against Cole. In September of this year, a Portland grand jury indicted him on five counts of subscribing to false tax returns and other tax-related documents. Also in September, the Consumer Protection Branch of the U.S. Department of Justice filed a complaint against Cole, his corporation, and his office manager seeking to permanently shut down the Maxam business for failing to comply with multiple provisions of the Federal Food, Drug, and Cosmetic Act.
This case was investigated by the U.S. Food and Drug Administration Office of Criminal Investigations, and the Internal Revenue Service, Criminal Investigation. Assistant U.S. Attorneys Katie Lorenz and Allan Garten filed the civil action and represented the United States at trial.
Judge Sentences Bucks County Investment Advisor to Four Years for Embezzlement SchemeRead the Press Release
PHILADELPHIA - David Rothman, 50, of Richboro, Pennsylvania, was sentenced yesterday to 48 months in prison for wire fraud and money laundering. Rothman was the Vice-President of Rothman Securities, Inc. (“RSI”), an investment brokerage firm in Southampton, Pennsylvania. Between January 2007 and February 2012, Rothman embezzled from a 92 year-old RSI client and several beneficial trusts for which he was a named trustee. He used the money for personal expenses and to pay his family, his friends, and other clients to whom he provided falsely inflated investment statements. Rothman created bogus documents and cover stories to mask his fraud and lull victims and clients into a false sense of security. Rothman, a graduate of Penn State University whose annual salary was $600,000 in 2011, pleaded guilty to the two counts on March 26, 2013.
In addition to the prison term, U.S. District Court Judge Berle M. Schiller ordered three years of supervised release and restitution of $505,831.09.
The case was investigated by the Federal Bureau of Investigation and the Securities and Exchange Commission. It was prosecuted by Assistant United States Attorney Vineet Gauri.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Jewelry Store Owner Sentenced for Stolen Goods ChargeRead the Press Release
LAS VEGAS, Nev. – A Las Vegas jewelry store owner was sentenced today to two years in prison, three years of supervised release, and ordered to pay $196,000 in restitution for purchasing and selling luxury jewelry that he knew was stolen, announced Daniel G. Bogden, United States Attorney for the District of Nevada.
Nabil (”Bill”) Sakkab, 39, of Las Vegas, was sentenced by U.S. District Judge James C. Mahan. Sakkab pleaded guilty in July to two counts of receipt and sale of stolen goods. Sakkab was permitted to self-report to federal prison no later than Feb. 14, 2014.
“This case was prosecuted as part of a federal and local law enforcement effort to combat organized retail theft,” said U.S. Attorney Bogden. “Organized retail theft causes billions of dollars in losses to retailers annually. These losses are usually passed on to the consumers in the form of higher prices on goods, and states lose the tax revenue that would otherwise be generated from the sale of these goods by legitimate dealers.”
The case was investigated by the FBI and the Las Vegas Metropolitan Police Department Special Investigations Section. The case was prosecuted by Assistant United States Attorney Christina M. Brown.
According to the court records, Sakkab was a partial owner of Red Rock Jewelers in Las Vegas. From about Sept, 20, 2011, to Feb. 3, 2012, Sakkab acted as a fence for stolen property by purchasing and selling luxury jewelry stolen by co-conspirator Jeffrey Cochran, who also pleaded guilty to stolen goods charges and is scheduled to be sentenced on Nov. 25, 2013. Most of the stolen items sold by Sakkab were high priced Rolex watches which had been stolen in other states and transported to Las Vegas. Sakkab resold the stolen jewelry at Red Rock Jewelers, and also sold it privately to third parties for personal gain. The amount of restitution ordered was reduced due to law enforcement’s successful recovery of one of the stolen watches.JASE SentencingRead the Press Release
BATON ROUGE, LA – Acting United States Attorney Walt Green announced today that DR. ANTHONY STEPHEN JASE, 44, of New Orleans, Louisiana, was sentenced to 15 months in prison and ordered to pay $360,293 in restitution for his convictions on health care fraud.
On October 21, 2011, JASE pled guilty to two counts of health care fraud before Judge James J. Brady, for involvement in two nearly identical schemes to defraud Medicare. The first conviction arose from JASE’s association with a Baton Rouge-based company known as Lobdale Medical Services, which was owned by Beatrice and Young Anyanwu. As part of the scheme to defraud, Sandra Parkman Thompson and others procured the names and personal information of Medicare beneficiaries in and around the New Orleans area and delivered these names to JASE, who then signed false and fraudulent prescriptions for power wheelchairs and other durable medical equipment for which the Medicare beneficiaries had no medical need. Thompson subsequently delivered the fraudulent prescriptions to the Anyanwus, who submitted claims to Medicare through Lobdale Medical Services for the medically unnecessary equipment. The total billings to Medicare by Lobdale Medicare Services exceeded $1,000,000. The second conviction arose from JASE’s involvement with a New Orleans-based durable medical equipment company known as Psalms 23-DME, which also paid Thompson to deliver prescriptions for wheelchairs and other durable medical equipment. JASE wrote prescriptions for beneficiaries whom he had never seen and who had no need for the equipment that was prescribed them. As a result, Psalms 23-DME billed Medicare for claims totaling $230,963 using JASE’s provider number.
Beatrice and Young Anyanwu pled guilty to the health care fraud scheme to defraud Medicare as well as the illegal remuneration conspiracy on August 14, 2012, and were sentenced on February 1, 2013. Sandra Parkman Thompson was convicted after a jury trial on August 20, 2012, and was sentenced on March 14, 2013.
Acting U.S. Attorney Walt Green stated, “This case is a great example of how federal and state law enforcement work together on a daily basis to stamp out health care fraud by doctors and others who abuse our health care system in our state.”
FBI Special Agent in Charge Michael Anderson stated, "Addressing betrayals of the public's trust in the health care system by physicians continues to be the FBI's top priority in its ongoing fight against health care fraud."
The investigation of JASE was conducted by the Department of Health and Human Services, Office of Inspector General, the Federal Bureau of Investigation, and the Louisiana Department of Justice. The case was prosecuted by Assistant United States Attorneys Catherine M. Maraist and René I. Salomon of the Middle District of Louisiana and Patrice Sullivan of the Eastern District of Louisiana.
Indictment Unsealed Charging Moore Resident with Disaster Benefits Fraud Following May TornadoRead the Press Release
Oklahoma City, Oklahoma – A federal grand jury indictment was unsealed today charging BLAKE LYNN SELF, 18, of Moore, Oklahoma, with committing disaster benefits fraud in connection with a claim for benefits following the May 2013 tornados in Moore, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma.
Under the Robert T. Stafford Disaster Relief and Emergency Assistance Act, the May 20, 2013, tornado affecting Cleveland County was declared a major disaster and the payment of disaster benefits was authorized. The indictment alleges that on June 14, 2013, Self submitted a false claim for monetary benefits to be paid by Federal Emergency Management Agency (FEMA). Specifically, it is alleged that Self claimed to a FEMA inspector that his primary residence at the time of the May 20, 2013, tornado, was 916 S.W. 14th Street, in Moore, when in fact it was not his residence at that time.
If convicted, Self faces up to 30 years in prison, a $250,000 fine, and payment of restitution. The public is reminded that the indictment is merely an accusation and that the defendant is presumed innocent unless and until proven guilty. Reference is made to the indictment for further information.
This case is the result of an investigation by the U.S. Department of Homeland Security Office of Inspector General and is being prosecuted by Assistant U.S. Attorney Amanda Maxfield Green.
The public may report suspected disaster benefits fraud by contacting the Department of Homeland Security Office of Inspector General (www.oig.dhs.gov or by calling toll free 1-800-323-8603) or by calling the Disaster Fraud Hotline at 1-866-720-5721.
Immigration Charges Filed Against Another Bucks County Landscaping Company ExecutiveRead the Press Release
Charles Zeiser, 68, of North Carolina, was charged today by Information with five counts of wire fraud, announced United States Attorney Zane David Memeger. Zeiser was the controller for Land Tech, Enterprises, a landscaping company in Bucks County. He aided and abetted a fraud scheme in which company employees applied for and fraudulently collected Pennsylvania unemployment compensation while continuing to work full-time for the company. The Commonwealth of Pennsylvania was defrauded of at least $43,589 from late 2010 to the spring of 2011.
If convicted, the defendant faces a maximum possible sentence of 100 years of imprisonment, three years of supervised release, a $1,250,000 fine, and a $500 special assessment.
The case was investigated by United States Department of Labor – Office of Inspector General, the Department of State, and U.S. Immigration and Customs Enforcement Homeland Security Investigations. It is being prosecuted by Assistant United States Attorney Laurie Magid.
Click here to view the indictment
An Indictment or Information is an accusation. A defendant is presumed innocent unless and until proven guilty.UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Heroin Trafficker Sentenced to More Than 12 Years in Federal PrisonRead the Press Release
Deirdre M. Daly, Acting United States Attorney for the District of Connecticut, today announced that ANTOVANY ACOSTA, also known as “Tony,” 33, of New Haven, was sentenced yesterday by U.S. District Judge Vanessa L. Bryant in Hartford to 150 months of imprisonment, followed by five years of supervised release, for trafficking heroin.
According to court documents and statements made in court, in early 2011, the Drug Enforcement Administration in New Haven received information from the Connecticut State Police that ACOSTA was selling substantial quantities of heroin from his residence at 28 Maltby Place in New Haven. Following a series of controlled purchases of heroin from ACOSTA, the DEA New Haven Task Force initiated a court-authorized wiretap investigation. The investigation determined that Adrian Pinzon-Gallardo, also known as “The Mexican,” was supplying large quantities of heroin and cocaine to several individuals in Connecticut, including ACOSTA.
During the course of the wiretap, ACOSTA was intercepted telling an associate that he takes “like 250 grams (of heroin) every 10 days” from a “Mexican connection,” a reference to Pinzon-Gallardo. Other individuals also supplied ACOSTA with large quantities of heroin.
On September 2, 2011, DEA personnel from Connecticut and Rhode Island, with the assistance of the Connecticut State Police, tracked Pinzon-Gallardo’s Jeep as it traveled from Connecticut to Providence where it was believed from wire intercepts that Pinzon-Gallardo intended to conduct a narcotics transaction. In Providence, the surveillance team observed Pinzon-Gallardo and an associate meet and then travel to a storage facility in Pawtucket, R.I. At the facility, Pinzon-Gallardo and his associate entered an open storage unit with several other individuals and closed the door. A short time later, Pinzon-Gallardo’s associate returned to the vehicle, retrieved a black backpack and walked back to the storage unit. Pinzon-Gallardo and his associate then returned to their vehicle and departed. After driving to Boston, Pinzon-Gallardo and his associate drove a circuitous route back to Connecticut when their vehicle was stopped by Connecticut State Police on Interstate 84 after it crossed the Connecticut border. A search of the car revealed three bricks of heroin, weighing a total of approximately 736 grams of heroin, and approximately $14,000 in cash.
A subsequent search of the storage unit in Rhode Island revealed approximately eight kilograms of heroin, including three kilograms that were contained within a black backpack similar to the one that Pinzon-Gallardo’s associate had been seen carrying into the facility, approximately two kilograms of cocaine and approximately $35,000 in cash.
ACOSTA has been detained since his arrest on November 16, 2011. On June 13, 2013, following a six-day trial, a jury found ACOSTA guilty of one count of conspiracy to distribute, and to possess with intent to distribute, one kilogram or more of heroin, and three counts of possession with the intent to distribute and distribution of heroin.
ACOSTA, a citizen of the Dominican Republic, faces immigration proceedings after he completes his prison term.
Pinzon Gallardo pleaded guilty to one count of conspiracy to distribute, and to possess with intent to distribute, one kilogram or more of heroin and, on April 4, 2013, he was sentenced to 135 months of imprisonment.
This matter was investigated by the DEA New Haven Task Force, which includes participants from the New Haven, Hamden, West Haven, North Haven, Branford, Ansonia and Meriden Police Departments, and the United States Marshals Service. The New Britain Police Department and the Connecticut State Police substantially assisted the investigation.
This case is being prosecuted by Assistant United States Attorney S. Dave Vatti.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722 [email protected]Grand Jury Returns IndictmentsRead the Press Release
MINNEAPOLIS—A federal grand jury in the District of Minnesota, sitting in Minneapolis, returned the following indictments yesterday. You are advised that a charge is merely an accusation, and that a defendant is presumed innocent until and unless proven guilty. Any sentence is determined by a federal district judge.Mexican citizen charged with illegal re-entry into U.S.
Arnoldo Aguirre-Vasquez, age 44, a citizen of Mexico found in Renville, Minnesota, is charged with illegally re-entering the United States after previously being deported. If convicted, Aguirre-Vasquez faces a potential maximum penalty of 20 years in prison. This case is the result of an investigation by the U.S. Immigration and Customs Enforcement’s Enforcement and Removal Operations. It is being prosecuted by Assistant U.S. Attorney Manda M. Sertich.Kentucky man charged with robbing Eagle Lake bank
George Richard Gaunt, age 25, of Louisville, Kentucky, was charged with one count of bank robbery.
If convicted, Gaunt faces a potential maximum penalty of 25 years in prison. This case is the result of an investigation by the Federal Bureau of Investigation, the Eagle Lake Police Department and the Blue Earth County Sheriff’s Office. It is being prosecuted by Assistant U.S. Attorney Katharine T. Buzicky.Rochester felon charged with gun crime
James Kent Johnson, age 34, of Rochester, was charged with one count of being a felon in possession of a firearm. Since Johnson’s prior felony convictions were for violent crimes, he is subject to the federal armed career criminal statute in the current federal case. That statute mandates a minimum sentence of 15 years in federal prison upon conviction. This case is the result of an investigation by the Olmsted County Sheriff’s Office and the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives. It is being prosecuted by Assistant U.S. Attorney Thomas M. Hollenhorst.
Gallup Man Sentenced to Ten Years in Federal Prison for Second Degree Murder ConvictionRead the Press Release
ALBUQUERQUE – Thomas Benally, 53, an enrolled member of the Navajo Nation who resides in Gallup, N.M., was sentenced to ten years in federal prison followed by two years of supervised release for his second degree murder conviction. Benally’s co-defendant, Luke Spencer, 48, a Navajo man who also resides in Gallup, was sentenced to 37 months in federal prison followed by two years of supervised release for his involuntary manslaughter conviction. The two men were ordered to pay $3,442.34 in restitution to cover funeral costs for the victim of their crimes.
Benally and Spencer were indicted in March 2012 in an indictment charging Benally with second degree murder and Spencer with aiding and abetting second degree murder. According to the indictment, Benally, aided by Spencer, killed a man while driving under the influence of alcohol on the Navajo Indian Reservation between Oct. 1, 2010 and Oct. 2, 2010.
In June 2013, Benally entered a guilty plea to a second degree murder charge and admitted that on the night of Oct. 1, 2010 or the early hours of Oct. 2, 2010, he drove Spencer’s truck while severely intoxicated. He further admitted that, while backing up, he ran over a 71-year-old Navajo man. Benally also admitted that he and Spencer, who was in the passenger’s seat, drove away in the truck without making any effort to check on the victim’s condition or calling the authorities to report the accident. The victim died of injuries he sustained and his remains were found by a passerby on Oct. 7, 2010.
In May 2013, Spencer pleaded guilty to a felony information charging him with involuntary manslaughter and admitted that he permitted Benally to drive his truck while intoxicated.
This case was prosecuted by Assistant U.S. Attorneys Jennifer M. Rozzoni and Jack E. Burkhead based on an investigation by the Gallup office of the FBI and the Crownpoint office of the Navajo Nation Division of Public Safety.
Franklin Sentenced to 76 Months for Receiving BribesRead the Press Release
OXFORD, Miss. - Felicia C. Adams, United States Attorney for the Northern District of Mississippi, Mississippi State Auditor Stacey Pickering, and Yessyka Santana, Special Agent in Charge of the U.S. Department of Education Office of Inspector General's Southeastern Regional Office announced that:
Harvey Franklin, 57, of Monroe, Georgia, was sentenced yesterday by United States District Judge Sharion Aycock in Aberdeen, Mississippi, to 76 months imprisonment for receiving bribes and kickbacks from Edna Cochran Goble and embezzling federal funds from the Department of Education in connection with a contract for reading services between the Greenville, Mississippi, Public School District and Edna Goble’s company, Teach Them to Read, Inc. d/b/a Early Detection Necessary Action. In addition, Franklin was ordered to pay $1,201,247 in restitution to the Department of Education, including an immediate payment of $75,000, 3 years supervised release, 300 hours of community service and a $300 special assessment.
Franklin pled guilty on August 2, 2012, to a three count Information charging him with conspiracy to receive bribes and kickbacks in violation of 18 U.S.C. § 371; receiving bribes and kickbacks in connection with federal program funds in violation of 18 U.S.C. § 666(a)(1)(B); and embezzlement of federal funds in violation of 18 U.S.C. §641.
Edna Goble pled guilty on October 7, 2013, to Count One of an Indictment charging her with Conspiracy to pay bribes and kickbacks in connection with federal program funds in violation of 18 U.S.C. §371. No sentencing date has been set for Goble.
This case was investigated by Special Agents of the Department of Education, Office of Inspector General and the Office of the State Auditor for the State of Mississippi and was prosecuted by Assistant United States Attorneys Clay Dabbs and Clay Joyner.
Founder of Investment Advisory Firm Pleads Guilty in Manhattan Federal Court to Mail Fraud and Conspiracy to Obstruct Justice in Connection with Attempt to Defraud NBA Players UnionRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that JOSEPH LOMBARDO, the founder and managing director of Prim Capital Corporation (“Prim”), pled guilty in Manhattan federal court to mail fraud and conspiracy to obstruct a grand jury investigation in connection with an attempt to defraud the National Basketball Players Association (“NBPA”) through the use of a fraudulent retention contract. LOMBARDO, who was arrested in April 2013, along with Carolyn Kaufman, a principal at Prim, pled guilty today before U.S. District Judge Jesse M. Furman.
Manhattan U.S. Attorney Preet Bharara said: “Joseph Lombardo engaged in an elaborate fraud involving the creation of a fake contract with the professional basketball players who had entrusted him to manage their union’s assets. He then lied to a federal grand jury about his illegal actions and told others to do the same. His guilty plea today shows that such fraud and obstruction will not go unpunished.”
According to the Complaint, Indictment, previously filed documents, and today’s plea proceeding:
Prim was founded by LOMBARDO. From 2001 until 2013, Prim was the primary outside investment advisory firm entrusted with the NBPA’s investments and finances. In that capacity, Prim performed various services for the NBPA, including assisting with the management of up to $250 million of the NBPA’s assets, reviewing the investments of individual NBA players, and conducting financial seminars for NBA players.
In May of 2012, as part of a U.S. Department of Labor (“DOL”) investigation, Prim was served with a grand jury subpoena requesting, among other things, copies of all agreements between Prim and the NBPA. In response, Prim produced a copy of a 2005 contract between the NBPA and Prim, under which Prim’s fee was $350,000 per year. The 2005 contract was signed by the Executive Director of the NBPA, the Treasurer of the NBPA, and LOMBARDO, and was renewable annually upon agreement of the parties. That was the only contract that Prim produced at the time.
Several months later, in January of 2013, after Prim learned that a law firm’s review of the NBPA was going to be made public in the near future, Prim then produced to the DOL a previously undisclosed contract with the NBPA (the “Purported 2011 Contract”). Prim’s fee under this contract was $602,000 per year for a five-year term, for a total of $3,010,000. The Purported 2011 Contract also contained a provision indicating that it could not be cancelled for any reason by the NBPA. The Purported 2011 Contract was purportedly signed in March 2011 by LOMBARDO, Gary Hall, the former NBPA General Counsel, and one other NBPA employee.
An investigation revealed that the signature of Hall was not authentic, and that the Purported 2011 Contract was actually created at Prim months after the death of Gary Hall. The investigation also revealed that LOMBARDO arranged for the creation of a signature stamp capable of stamping the signature “Gary A. Hall,” and used the stamp to falsify Hall’s signature months after his death.
In addition, the investigation revealed that LOMBARDO and Kaufman had agreed and attempted to obstruct a grand jury investigation. During the course of the investigation, both LOMBARDO and Kaufman appeared before the grand jury and provided false and misleading testimony. Kaufman testified, among other things, that she had not spoken with anyone regarding her testimony prior to testifying. However, in a recorded conversation prior to appearing before the grand jury, LOMBARDO gave her specific instructions on how to answer questions before the grand jury, and said that his “life is in [her] hands.” In another recorded conversation, LOMBARDO instructed another individual that, if he provided certain false information to the grand jury about the creation of the contract,“[w]e’re home free.” In a third recorded conversation, LOMBARDO instructed another individual to provide false information and said, “It’s important that we didn’t doctor this document up, okay?”
LOMBARDO, 72, of Gates Mills, Ohio, pled guilty to one count of mail fraud and one count of conspiracy to obstruct justice. He faces a maximum sentence of 20 years in prison on the mail fraud count, a maximum sentence of five years in prison on the conspiracy to obstruct justice count, and a maximum fine of $250,000, or twice the gross gain or gross loss from the offense, on each count. LOMBARDO is scheduled to be sentenced by Judge Furman on March 20, 2014.
Kaufman has been charged in a superseding indictment with one count of conspiracy to obstruct justice, one count of obstruction of justice, and one count of perjury for her alleged role in the agreement to obstruct, and obstruction of, the grand jury investigation. She is scheduled to stand trial beginning on December 2, 2013, before Judge Furman.
Mr. Bharara praised the outstanding investigative work of the U.S. Department of Labor’s Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, and the U.S. Department of Labor’s Office of Labor-Management Standards. Mr. Bharara added that the investigation is continuing.
This case is being handled by the Public Corruption Unit of the U.S. Attorney’s Office. Assistant United States Attorneys Daniel C. Richenthal and Paul M. Krieger are in charge of the prosecution.
The pending charges against Kaufman are merely accusations, and she is presumed innocent unless and until proven guilty.
Lombardo, Joseph and Carolyn Kaufman Indictment 13 Cr 411.
Former Teller Charged with Bank TheftRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced that a 35-year-old Scranton man was charged today with stealing money from a bank where he worked as a teller.
According to United States Attorney Peter J. Smith, his office filed a criminal Information against Gary Fletcher, charging him with the theft of more than $8,000 from Fidelity Deposit and Discount Bank.
The charge against Fletcher resulted from an investigation by the Federal Bureau of Investigation.
The case is being prosecuted by Assistant U.S. Attorney Francis P. Sempa.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilty is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
In this case, the maximum penalty under the federal statute is 10 years’ imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
Former Portfolio Manager for New York Hedge Fund Pleads Guilty to Multi-Million Dollar Insider Trading ConspiracyRead the Press Release
ATLANTA – Mark Megalli pleaded guilty on Thursday to participating in a multi-million dollar insider trading conspiracy involving Carter’s, Inc. stock.
“This conviction marks a tragic fall for a defendant who worked at top investment, law, and consulting firms and rose to a prominent position at a multi-billion dollar New York hedge fund,” said United States Attorney Sally Quillian Yates. “But, there is one set of rules, and they apply to everyone. Rigging the system by trading on inside information undermines the public’s confidence in our financial system – and it’s a violation of the law.”
Mark F. Giuliano, Special Agent in Charge, FBI Atlanta Field Office, stated: “Laws are in place to regulate investment firms and individual investors and to ensure that a level playing field is maintained for those engaging our financial markets. This case illustrates clearly why those laws are in place and the hard consequences for those that choose to disregard them. Today’s guilty plea of Mr. Megalli will begin the process of holding him accountable from his criminal actions involving Carter’s, Inc. stock trades.”
According to United States Attorney Yates, the charges and other information presented in court: Megalli was employed as the portfolio manager for the consumer sector at Level Global Investors, LP (“Level Global”), a multi-billion dollar hedge fund headquartered in New York, NY, between August 2009 and its dissolution in February 2011. Megalli was responsible for managing and making trading decisions on behalf of a multi-million dollar portfolio of consumer industry stocks. Megalli had previously obtained undergraduate and JD/MBA degrees from one of the country’s top universities, passed the New York bar and the Chartered Financial Analyst (“CFA”) examinations, and worked at top investment, consulting, and law firms.
In September 2009, Megalli caused Level Global to hire Eric M. Martin as a paid consultant to Level Global to advise Megalli on consumer sector stocks for $25,000 per quarter. Until March 2009, Martin had been employed as the Vice President of Investor Relations for Atlanta-based Carter’s, Inc., the major children’s clothing company. Carter’s is a public company registered with the U.S. Securities & Exchange Commission (“SEC”) and its common stock is listed on the New York Stock Exchange.
Beginning in mid-September 2009 and continuing through the end of July 2010, Martin provided Megalli with inside information about Carter’s quarterly and annual financial results and other events in advance of the public announcement of the information. Megalli in turn caused Level Global to execute transactions in Carter’s securities between September 2009 and July 2010, based in whole or in part on the inside information received from Martin, earning illegal profits and illegally avoiding losses for Level Global. As part of his guilty plea, Megalli agreed that he is responsible for illegal insider trading gains and losses avoided for Level Global between $2.5 million and $7 million.Martin obtained the inside information from a Carter’s executive, Richard T. Posey, who was employed as the company’s Vice President of Operations at that time. Martin also provided inside information to several other individuals and investment firms for which he had been hired as an outside consultant, directly and through an expert networking firm.
By way of example, Posey tipped Martin, and Martin tipped Megalli and others, in advance of Carter’s October 27, 2009 announcement that it was conducting an internal investigation into accounting irregularities and would be delaying its earnings release for the third quarter of 2009. After business hours on October 22, 2009, Posey and Martin had an in-person meeting during which Posey disclosed inside information about the investigation and earnings delay to Martin. As soon as the meeting ended, Martin placed a telephone call to a former Wall Street equity research analyst previously identified as “Cooperator Number 1,” during which Martin passed on the information that he had received from Posey. Martin asked Cooperator Number 1 to wait to trade on the information until Martin could warn his clients. The next morning, at 9:42 a.m. on Friday, October 23, 2009, Martin sold his entire position in Carter’s stock, over 35,000 shares valued at approximately $1 million. Later that morning, at 11:23 a.m., Martin placed a 7-minute call to Megalli, during which Martin disclosed inside information about the investigation to Megalli. Less than two minutes into the call, Megalli sent an instant message to Level Global’s head of trading in which Megalli ordered the liquidation of Level Global’s entire position in Carter’s stock, 300,000 shares valued at nearly $9 million.
The next trading day, Monday, October 26th, Cooperator Number 1 placed a 12-minute call to Martin. Immediately after the call ended, Cooperator Number 1 sold his entire position in Carter’s stock -- 15,000 shares valued at over $400,000 -- and bought November 30th put options, thereby betting on Carter’s stock price to decline significantly. The next morning, Tuesday, October 27th, Carter’s shocked the market with the news of its internal investigation and earnings delay, and its stock price fell over 20% in one day. The internal investigation ultimately resulted in a multi-year financial restatement by Carter’s, criminal indictments of two of its former top executives for securities fraud and related offenses, and three SEC enforcement actions.
Megalli, 41, of New York, NY, pleaded guilty to one count of conspiracy to commit securities fraud. The charge to which he pleaded guilty carries a maximum sentence of five years in prison and a fine of up to $250,000. In determining the actual sentence, the Court will consider the United States Sentencing Guidelines, which are not binding but provide appropriate sentencing ranges for most offenders.
Megalli is the third individual to be convicted in a criminal investigation into insider trading in Carter’s stock, and the fifth person overall to be criminally charged in connection with the accounting fraud and insider trading investigations arising out of Carter’s October 27, 2009 earnings delay and multi-year financial restatement.
Martin, 43, of Roswell, Georgia, was indicted on November 7, 2012, for conspiracy, securities fraud, and wire fraud in connection with his participation in an insider trading conspiracy and for his own insider trading in Carter’s stock between 2005 and 2009, while Martin was still employed as Carter’s head of investor relations. The conspiracy charge alleged that Martin repeatedly provided inside information about Carter’s to Cooperator Number 1 ahead of the company’s earnings releases and other events between 2005 and 2009. This included tipping Cooperator Number 1 about Carter’s May 2005 acquisition of competitor Oshkosh B’Gosh before the news became public. Martin pleaded guilty to the conspiracy charge on December 8, 2012.
Posey, 48, of Duluth, Ga., was charged by Criminal Information and pleaded guilty to conspiracy to commit securities fraud on June 19, 2012. The conspiracy charge against Posey related to his disclosure of insider information to Martin ahead of quarterly and annual earnings releases and other events between early 2009 and July 2010, after Martin’s separation from Carter’s.Sentencing for Megalli, Martin, and Posey has not yet been scheduled.
The case is being investigated by the Federal Bureau of Investigation.
Assistant United States Attorneys David M. Chaiken and Stephen H. McClain are prosecuting the case.
The Atlanta Regional Office of the SEC has conducted a separate investigation into potential civil violations of the U.S. securities laws relating to insider trading in Carter’s stock. In connection with its investigation, the SEC has filed civil enforcement actions against multiple individuals.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is http://www.justice.gov/usao/gan/.
Former Owner of Morgan, N.J., Construction Company Admits Role in Bid-Rigging SchemeRead the Press Release
TRENTON, N.J. – A former owner of Tarheel Enterprises Inc., a heavy construction and paving company, admitted today to participating in a bid-rigging scheme, U.S. Attorney Paul J. Fishman announced.
George Chrysanthopoulos, 50, of Little Silver, N.J., pleaded guilty mid-trial to Count Three of an indictment, charging him with a scheme to defraud a private terminal operator at Port Elizabeth, N.J., of the honest services of one of its employees through bribes to rig a bid. Chrysanthopoulos entered his plea before U.S. District Judge Joel A. Pisano in Trenton federal court. The remaining six counts of the indictment are to be dismissed at sentencing.
According to documents and evidence admitted in this case and statements made in court:
Chrysanthopoulos was a vice-president and a co-owner of Tarheel, a heavy construction and paving company headquartered in Morgan, N.J. Between February 2011 and April 2011 Chrysanthopoulos schemed to bribe Donald Olesky, the former director of facilities Maintenance at Maher Terminals LLC, in exchange for the Olesky’s assistance in rigging Maher Terminals’ bid process for a construction project in favor of Tarheel. Unbeknownst to Chrysanthopoulos, Olesky was cooperating with law enforcement and recorded a series of meetings with Chrysanthopoulos, during which Chrysanthopoulos schemed to rig that bid. As part of the scheme, Chrysanthopoulos gave to Olesky a list of contractors to invite to bid on the project and also agreed to pay Olesky a $50,000 bribe in exchange for his assistance in rigging the bid process in favor of Tarheel.
Chrysanthopoulos, who was released on bond, faces a maximum prison term of 20 years and a maximum fine of $250,000. Sentencing before Judge Pisano is scheduled for March 26, 2014.
Donald Olesky previously pleaded guilty before U.S. District Judge Freda L. Wolfson in Trenton federal court to two counts of the use of mail and facilities in interstate commerce to promote commercial bribery. Olesky’s sentencing will be scheduled at a later date.
U.S. Attorney Fishman credited special agents of the FBI’s Trenton Resident Agency, under the direction of Special Agent in Charge Aaron T. Ford, for the investigation leading to today’s guilty plea. Fishman also thanked the N.J. Department of Transportation, Office of Inspector General, for its assistance in the investigation.
The government is represented by Assistant U.S. Attorneys Harvey Bartle, Attorney-in-Charge of the U.S. Attorney’s Trenton Office, and Vikas Khanna, of the U.S. Attorney’s Office Special Prosecutions Division.
13-436
Defense counsel: Michael Critchley Esq., and John Vazquez Esq., Roseland
Chrysanthopoulos, George Indictment
Former MPD Officer Found Guilty of Felony Charges for Sexually Abusing 11-Year-Old Girl-Victim Came Forward Years Later-Read the Press Release
WASHINGTON - Wendel Palmer, 45, a former officer with the Metropolitan Police Department (MPD), was found guilty today of sexually abusing a child on numerous occasions between 2004 and 2006, U.S. Attorney Ronald C. Machen Jr. announced.
Palmer was found guilty by a jury in the Superior Court of the District of Columbia of three counts of first-degree child sexual abuse with aggravating circumstances, two counts of second-degree child sexual abuse with aggravating circumstances, and two counts of enticing a child with aggravating circumstances. The Honorable J. Herbert B. Dixon, Jr. scheduled sentencing for Jan. 31, 2014.
According to the government’s evidence, at the time of the offenses, Palmer was an MPD officer who was also the youth choir director at the Bethuel Temple Church of Christ Apostolic, Inc., in the 2400 block of Martin Luther King Avenue SE. The defendant’s family founded and operated the church. The victim’s family belonged to the church, and the victim was a member of the choir. The abuse began when the victim was 10 or 11 years old, and occurred at the defendant’s home in Maryland, at the church during breaks in choir rehearsals, and at other locations in the District of Columbia and in Maryland. The victim was afraid to report the abuse while it was occurring, in part because the defendant was a police officer. The victim reported the abuse in 2012, after she turned 18.
In announcing the verdict, U.S. Attorney Machen commended the work of the detectives from the Metropolitan Police Department’s Youth Division and Mobile Crime Division. He also expressed appreciation for the work of Victim/Witness Advocate Tracey Hawkins, Paralegal Specialists Jason Manuel and Kristy Penny, and the Litigation Support Staff. Lastly, he acknowledged the efforts of Assistant U.S. Attorneys Amy Zubrensky, who investigated, indicted and tried the case, and Sarah McClellan, who also investigated the case.
13-394Former Federal Contractor Sentenced for Disclosing National Defense Information and Distributing Child PornographyRead the Press Release
INDIANAPOLIS – United States Attorney Joseph H. Hogsett announced this morning that Donald J. Sachtleben, age 55, of Carmel, a former FBI bomb technician who later worked as a government contractor for the agency, has been sentenced to 140 months (11 years, 8 months) in federal prison after pleading guilty to possessing and distributing child pornography, as well as unlawfully disclosing national defense information relating to a disrupted terrorist plot.
“This case began as an investigation into images of child exploitation – but soon took investigators to Carmel, to Washington, to the Arabian Peninsula, and back again,” Hogsett said. “It doesn’t matter who you are, or what you have done in the past. If you choose to violate the sacred trust of the public, you will be caught, and you will be held fully accountable.”
As part of his petition to plead guilty, Sachtleben admitted his role in the two national security charges as well as the two child pornography offenses. U.S. District Judge William T. Lawrence sentenced the defendant to a total of 140 months of incarceration, including a 43-month prison term for the national security offenses and a consecutive 97-month term for the pornography charges.
Child Pornography Case:
According to a criminal complaint filed in Indiana in May 2012, federal and state investigators became aware of an individual trading images of child pornography online in September 2010. An extensive investigation into that individual led to the arrest of a defendant in Illinois in January 2012. Upon arrest, a forensic search of that defendant’s computer equipment and email accounts allegedly revealed that he had been actively trading the explicit materials online with numerous other people.
Based on that information, law enforcement traced the alleged online activity to Sachtleben’s home in Carmel. After conducting several days of surveillance, a search warrant was executed on May 11, 2012, by law enforcement officers from the Indiana State Police and the FBI Cyber Crime Task Force. Sachtleben was charged in the Southern District of Indiana with possession and distribution of child pornography.
An initial forensic examination of Sachtleben’s laptop computer revealed the presence of approximately 30 images and video files containing child pornography. A number of files identified during this initial search matched those that had been found while investigating the Illinois defendant. Sachtleben’s laptop hard drive was found to contain references to other files known to have been in the possession of the Illinois defendant.
National Security Case:
On May 2, 2012, nine days before Sachtleben was arrested in Indiana on child pornography charges, Sachtleben knowingly and willfully disclosed national defense information to a reporter for a national news organization not entitled to receive it. Sachtleben has admitted that he had reason to believe that this information could be used to the injury of the United States and to the advantage of a foreign nation. He was also charged and plead guilty to willfully retaining documents relating to the national defense without authorization.
Sachtleben worked for the FBI from 1983 through 2008. During his career, he was a Special Agent Bomb Technician and was assigned to work on many major cases involving terrorist attacks. In his work as an FBI employee, Sachtleben held a Top Secret security clearance and had regular access to classified and national defense information relating to the FBI’s activities, as well as the activities of other members of the U.S. intelligence community.
In 2008, Sachtleben retired from the FBI and was rehired as a contractor. Because of his official responsibilities, he maintained his Top Secret security clearance as an FBI contractor. As a result, he continued to have regular access to classified and national defense information relating to the FBI’s activities, as well as the activities of other members of the U.S. intelligence community. As a contractor, he routinely visited the FBI Lab in Quantico, Virginia.
One of the criminal charges addressed Sachtleben’s contacts with the reporter relating to the disruption of a plot to conduct a suicide bomb attack on a U.S.-bound airliner by the Yemen-based terrorist organization Al-Qaeda in the Arabian Peninsula and the recovery by the United States of a bomb in connection with that plot. As a result of Sachtleben’s disclosure of national defense information to the reporter, the national security of the United States was compromised, a significant international intelligence operation was placed in jeopardy, and lives were put at risk.
Sachtleben was employed as an FBI contractor until on or about May 11, 2012. The following day, he was arrested in Indiana and charged by complaint with the federal child pornography charges.
The national security investigation was conducted by the FBI’s Washington Field Office with assistance from the FBI’s Indianapolis Field Office. The prosecution is being handled by Assistant U.S. Attorneys Jonathan M. Malis and G. Michael Harvey of the U.S. Attorney’s Office for the District of Columbia and Trial Attorney Richard S. Scott of the Counterespionage Section of the Justice Department’s National Security Division. Assistance was provided by Assistant U.S. Attorney Mona N. Sahaf of the U.S. Attorney’s Office for the District of Columbia, and Senior Litigation Counsel Steven D. DeBrota of the U.S. Attorney’s Office for the Southern District of Indiana, who is also prosecuting the child pornography case.
The child pornography investigation 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 on Project Safe Childhood, visit www.projectsafechildhood.gov.
Florida Pair Charged as "Felony Lane" Crew Members in Check Cashing SchemeRead the Press Release
PHILADELPHIA - Brandon James, 23, and Lenardo Nicolas, 25, both of Florida, were charged today by Indictment with participating in an illegal check cashing scheme that involved cashing fraudulent checks using the drive-through teller lane at victim banks. It is alleged that the defendants and other co-conspirators from Florida, known and unknown to the grand jury (“crew members”), stole identifications, checks, bank cards, and credit cards from women’s wallets and purses usually left inside the victims’ cars in unattended parking lots. In order to carry out the scheme, the defendants and other crew members recruited female co-conspirators (“workers”) who could impersonate the victims’ identifications. The defendants and other crew members specifically instructed the workers to use the drive-through teller lane, known to law enforcement as the “felony lane”, to cash the fraudulent checks. The defendants carried out the alleged scheme between December 2012 and September 2013. The indictment charges each defendant with one count of conspiracy, two counts of bank fraud and one count of aggravated identity theft, announced United States Attorney Zane David Memeger.
According to the indictment, James, Nicolas and other crew members rented cars for the female workers to use during the course of the scheme. It is alleged that the defendants and other crew members covered the rental car’s license plate usually with a stolen license plate to conceal the identity of the car as it was in the bank drive-through lane. After a fraudulent check was successfully cashed, the workers would meet the defendants and other crew members, who waited close by to the bank in another rental vehicle, and then give them the money from the illegally cashed check. The workers would then receive another fraudulent, stolen check or checks and stolen identification to use at the next victim bank. The indictment alleges that the defendants and other crew members perpetrated this scheme in different states around the country. The victim bank locations in Pennsylvania included Montgomery and Chester Counties.
If convicted, James and Nicolas each face a maximum possible sentence of 67 years in prison, a $2.5 million fine, a five year period of supervised release and a $400 special assessment.
The case was investigated by the Federal Bureau of Investigation, the Hatfield Township Police Department, the Willistown Township Police Department, and the Upper Uwchlan Township Police Department and is being prosecuted by Assistant United States Attorney Jennifer Chun Barry and Special Assistant United States Attorney Peter Hobart.
Click here to view the indictment
An Indictment, Information or Criminal Complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Florida Man Pleads Guilty to Conspiring to Defraud InvestorsOver 100 Investors Lost More Than $11 MillionRead the Press Release
ORLANDO, FLA. - Damien L. Bromfield, 37, of Ocoee, Fla., pled guilty today to a federal charge stemming from his role in an investment fraud scheme in which more than 100 investors lost over $11 million, announced U.S. Attorney Ronald C. Machen Jr. and James D. Robnett, Special Agent in Charge of the Tampa Field Office of IRS- Criminal Investigation.
Bromfield pled guilty in the U.S. District Court for the Middle District of Florida to a charge of conspiracy to commit wire fraud. No sentencing date was set.
The conspiracy charge carries a maximum of 20 years imprisonment and financial penalties. The parties agreed that, under the federal sentencing guidelines, Bromfield faces a range of between 78 and 188 months in prison and a fine of between $12,500 and $175,000. He also will be required to pay restitution to the investors of between $6,752,000 and $8,541,102.
“This defendant used fraud and deception to trick more than 100 people into investing in a fund they believed was financially sound,” said U.S. Attorney Machen. “His conduct led to millions in losses and now he himself is paying the price with a criminal prosecution. This case demonstrates the resolve of law enforcement to hold fraudsters accountable for carrying out such investment schemes.”
“Illegal activity involving the investment industry has brought financial ruin to many Americans,” said Special Agent in Charge Robnett. “IRS Criminal Investigation, along with our law enforcement partners, will vigorously pursue corporate officers who victimize their investors and violate the public trust.”
According to facts presented to the Court by Assistant U.S. Attorney Ephraim (Fry) Wernick, who is designated to prosecute the case as a Special Attorney in the Middle District of Florida, Bromfield worked between January 2007 and September 2008 as the director of operations for Capital Blu Management, LLC, a Florida corporation that purported to offer investment and managed account services for investors in the off-exchange foreign currency, or “forex,” marketplace. He partnered with two others to operate Capital Blu Management: one as the director of trading operations, and the other as the managing member primarily responsible for soliciting investors.
In or about September 2007, Bromfield and the two other men formed the CBM FX Fund, LP, which pooled investors’ money into a common fund to be traded by Capital Blu Management. Investors, who resided both inside and outside of Florida, were induced to invest in the CBM FX Fund based, among other things, on the Capital Blu Management and CBM FX Fund’s advertised trading results, which posted only positive monthly returns.
In or about January 2008, Bromfield and his two partners knew that the CBM FX Fund sustained significant trading losses, and that the CBM FX Fund had lost approximately 30 percent of its value by the end of that month. At or about that time, Bromfield and his two partners agreed and conspired to post a positive monthly return to the CBM FX Fund’s investors for the month of January 2008. The positive performance results were provided to the CBM FX Fund’s investors on Capital Blu Management’s website, via email, and U.S. mail.
Although Bromfield and his two co-conspirators knew that performance numbers were false, they hoped that Capital Blu Management would make up the losses to the CBM FX Fund, which the three co-conspirators referred to as, the “gap,” through better trading performance in the future. Bromfield and his two co-conspirators also knew that if they reported the losses to the investors, then the investors would have removed their money from the CBM FX Fund. Bromfield and his co-conspirators agreed upon a gap catch-up plan which included “keep[ing] the upcoming performance numbers as low as possible, but still enough to achieve confidence in our client base and future client base.”
Between January and August 2008, Bromfield and his co-conspirators implemented their gap catch-up plan, but failed to make up the losses to the CBM FX Fund. During this time, Bromfield and his co-conspirators continued to provide investors with false monthly performance statements which reported only false positive monthly returns. In addition, during this time, Bromfield and his co-conspirators diverted investors’ money from the CBM FX Fund to pay for Capital Blu Management’s operational expenses. These expenses included, among other things, salaries of approximately $15,000 per month for Bromfield and his co-conspirators, thousands of dollars per month for their luxury car payments, and over $50,000 per month for their use and partial ownership of a private airplane. Bromfield and his co-conspirators also agreed to divert new investors’ funds from the CBM FX Fund to pay redemptions to other investors in order to conceal their fraudulent misrepresentations to investors about the value of their investments.
In or about August 2008, the CBM FX Fund sustained losses of approximately $4 million. Nevertheless, Capital Blu Management again reported a positive monthly return to investors for that month. Soon thereafter, the National Futures Association, an independent self-regulatory organization that oversees commodities and futures trading in the United States, visited Capital Blu Management and suspended the company’s trading operations. Between August 2007 and September 2008, over 100 investors invested approximately $16.6 million into the CBM FX Fund. By September 2008, the investors had lost a total of about $11.8 million.
As part of his plea agreement, Bromfield acknowledged that, after Capital Blu Management’s demise, he started another forex investment company and he accessed and traded approximately $200,000 of investors’ money from Capital Blu Management’s bank accounts. Bromfield also acknowledged that, between 2007 and 2009, he made false statements to law enforcement agents who were investigating Capital Blu Management and he and his co-conspirators. Finally, Bromfield acknowledged that he lied and committed perjury during civil proceedings which were initiated against Capital Blu Management, Bromfield, and his co-conspirators, by the United States Commodity Futures Trading Commission in 2010 and 2011.
This case was transferred to the U.S. Attorney’s Office for the District of Columbia from the Middle District of Florida. The investigation is continuing.
In announcing the plea, U.S. Attorney Machen and Special Agent in Charge Robnett commended the work of the task force consisting of agents from the IRS- Criminal Investigation, the U.S. Secret Service, the Florida Department of Law Enforcement, and the Brevard County Sherriff’s Office, which investigated the criminal case. They also expressed appreciation for the work of the agents from the National Futures Association and attorneys from the Commodity Futures Trading Commission who litigated the civil action. In addition, they acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office for the District of Columbia, including Paralegal Specialists Diane Hayes and Corinne Kleinman, Legal Assistant Angela Lawrence, Auditor Crystal Boodoo, and Information Technology Specialist Thomas (Ron) Royal.
Finally, they thanked Assistant U.S. Attorneys Jonathan P. Hooks and Ephraim (Fry) Wernick of the U.S. Attorney’s Office for the District of Columbia. They were designated as Special Attorneys in the Middle District of Florida, and are prosecuting the case. They also expressed appreciation for the work of Assistant U.S. Attorneys Catherine K. Connelly and Anthony Saler, of the Asset Forfeiture and Money Laundering Section of the U.S. Attorney’s Office for the District of Columbia.
13-393Final Defendant in Uvalde/Crystal City-based Texas Mexican Mafia Racketeering Ring Sentenced to Federal PrisonRead the Press Release
In Del Rio this afternoon, 31-year-old Texas Mexican Mafia member Eliseo Sanchez, III, of Crystal City was sentenced to 70 months in federal prison for conspiring to violate the Racketeering Influenced Corrupt Organization (RICO) statute plus an additional 24 months in federal prison for violating supervised release conditions stemming from a prior alien smuggling conviction. Sanchez is the last of 12 convicted Uvalde and Crystal City, Texas-based TMM members and associates charged in this racketeering investigation to be sentenced announced United States Attorney Robert Pitman and FBI Special Agent in Charge Armando Fernandez.
The other TMM members convicted of the RICO conspiracy received the following prison sentences:
Jorge Abel Ramirez (a/k/a “Hondo,” a/k/a “Superdope”), of Hondo and Crystal City, 240 months; Geronimo Torres (a/k/a “Jerry,” a/k/a “G”), of Uvalde, 180 months; Benito Benavides (a/k/a “Benny”), of Uvalde, 240 months; Chris Gutierrez (a/k/a “Fire”), of Uvalde, 108 months; Albert Torres (a/k/a “Terrible”), of Uvalde; 168 months; Eric Velasquez Solis (a/k/a “Kilo”), of Uvalde, 162 months; Mario Zavala, of Crystal City, 108 months; Rodolfo Villegas (a/k/a “Rudy”), of Crystal City, 72 months; Charles Martinez (a/k/a “Charlie”), of Crystal City, 115 months; and, Sebastian Cortinas (a/k/a “Seabass”), of Crystal City and Eagle Pass, 72 months.
Additionally, Robert Marcus Castro (a/k/a “Tiny”), of Crystal City, pleaded guilty to committing a Violent Crime In Aid of Racketeering, and was sentenced to 97 months in federal prison.
The defendants conspired to engage in a pattern of organized criminal conduct including attempted murder, retaliation against an informant, extortion, and distribution of cocaine, heroin, marijuana and methamphetamine.
As a result of the same indictment, Carlos Guerrero of Uvalde, Zachary Vasquez of Uvalde and Jose Ibarra of Uvalde all pleaded guilty and were sentenced for conspiracy to possess with intent to distribute less than 500 grams of cocaine within 1,000 feet of Robb Elementary School in Uvalde, Texas. Guerrero was sentenced to 52 months incarceration; Vasquez to 24 months incarceration; Ibarra to 18 months incarceration.
Jorge Abel Ramirez was also found guilty of violently assaulting a prison guard while the RICO case was pending. He received 37 months incarceration for that offense, set to run consecutive to his 240 months RICO sentence, for a total of 277 months imprisonment.
“In this case, a dozen members of a violent drug gang have been sentenced to lengthy prison terms, and the community can rest assured that we will continue to use the resources of federal law enforcement to target the most dangerous offenders in the illegal drug trade,” stated United States Attorney Robert Pitman.
This case resulted from a joint investigation by the Federal Bureau of Investigation, Texas Department of Public Safety – Criminal Investigations Division, Uvalde County Sheriff’s Office, Drug Enforcement Administration and the U.S. Marshals Service, with assistance from the Real County Sheriff’s Office, Hondo Police Department, Zavala County Sheriff’s Office and Uvalde Police Department.Felon Who Riddled Parkersburg Residence with Bullets Sentenced to 6 ½ Years in Federal PrisonRead the Press Release
Shaun Linko opened fire on a Lynn Street residence in Parkersburg
CHARLESTON, W.Va. – A Parkersburg felon who opened fire on a Parkersburg residence in September 2012 using an AK-47 semi-automatic rifle was sentenced today to six and a half years in federal prison, announced U.S. Attorney Booth Goodwin. Twenty-six-year-old Shaun Michael Linko previously pleaded guilty in April to being a felon in possession of a firearm. The sentence was handed down by United States District Judge Thomas E. Johnston in Charleston.
On September 19, 2012, police responded to a report of shots fired in the vicinity of 1122 Lynn Street. Upon their arrival, officers with the Parkersburg Police Department observed a large quantity of spent shell casings from a semi-automatic rifle in the street, along with apparent bullet holes in the exterior of the residence at 1122 Lynn Street in Parkersburg. A short time later, Wood County deputy sheriffs observed a GMC Jimmy SUV parked at the 7th Street Park and Ride, located in close proximity to Lynn Street. As deputies approached the vehicle, they observed an ammunition box lying on the ground beside the driver’s side door of the vehicle. Police officers ordered the driver, Shaun Michael Linko, and a female passenger to exit the vehicle.
Linko, who was arrested, told police that he shot at the 1122 Lynn Street residence using the AK-47. Officers recovered the rifle and loose ammunition from the defendant’s vehicle.
Linko was previously convicted in March 2010 of conspiracy to deliver a controlled substance in the Circuit Court of Wood County. The defendant did not have his rights to possess a firearm restored.The investigation was conducted by the Parkersburg Police Department, the Wood County Sheriff’s Department, and the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant United States Attorney Joshua Hanks handled the prosecution.
This case was prosecuted as part of Project Safe Neighborhoods. Project Safe Neighborhoods is a nationwide commitment to reduce gun crime in the United States by networking existing local programs targeting gun crime.
Essex County, N.J., Woman Admits Mailing Threatening LetterRead the Press Release
NEWARK, N.J. – An Irvington, N.J., woman today admitted that she mailed a threatening letter to the Town of Secaucus, U.S. Attorney Paul J. Fishman announced.
Karen Waller, 50, pleaded guilty before U.S. District Judge Kevin McNulty in Newark federal court to an information charging her with mailing a threatening communication in interstate commerce.
According to documents filed in this case and statements made in court:
Waller admitted that she wrote and mailed a letter to Secaucus that included threatening language about bomb attacks and warned against underestimating her.
The charge carries a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for Feb. 27, 2014.
U.S. Attorney Fishman credited special agents, detectives and investigators assigned to the Joint Terrorism Task Force (JTTF), under the direction of FBI Special Agent in Charge Aaron T. Ford in Newark, with the investigation. The JTTF comprises law enforcement officers from numerous federal, state and local agencies throughout New Jersey.
The government is represented by Assistant U.S. Attorney Andrew Kogan of the U.S. Attorney’s Office Criminal Division in Newark.
13-437
Defense counsel: Assistant Federal Public Defender Lisa Mack Esq., Newark
Waller Information
Department of Defense Employee Pleads Guilty to<br /> Submitting False Claim for Housing AllowanceRead the Press Release
A Department of Defense (DOD) employee has pleaded guilty to filing a false claim with the DOD while stationed in the Republic of Korea (ROK) to fraudulently obtain $64,000 in housing allowance, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney Daniel G. Bogden of the District of Nevada.
Patrick Y. Kim, 56, of Reno, Nev., pleaded guilty today before U.S. District Judge Howard D. McKibben in the District of Nevada in Reno to one count of making a false claim. Kim faces a maximum penalty of five years in prison when he is sentenced on Feb. 12, 2014. As part of his plea agreement, Kim has agreed to pay full restitution to the DOD in the amount of $64,000.
The former chief of the Furniture Branch at the United States Army Garrison in Daegu, ROK, Kim admitted that he submitted a fraudulent lease to the housing office to obtain a living quarters allowance (LQA) that he was not entitled to receive. Kim began working at Daegu Garrison in or about October 2002, and, as a DOD civilian employee working in the ROK, he was entitled to receive certain housing allowances, including LQA under certain circumstances. To receive LQA, Kim was required to submit a copy of a housing lease in support of his application and acknowledge that the LQA payments were exclusively for the payment of rent and not for the payment of refundable security deposits or “key money” leases. Key money leases – sums of money paid to a lessor in lieu of rent, which are returned to the lessee at the end of the lease – are common in the ROK; however, they are prohibited by State Department regulations.
Kim admitted that in September 2008, he was looking for a new apartment as the lease for his current apartment was about to expire. He and his wife located a residence at an apartment complex; however, the owners of the apartments did not offer traditional rental leases – only key money leases and purchases. On or about Sept. 8, 2008, Kim’s wife entered into a key money lease for one of the apartments. Kim admitted that he knew that State Department regulations prohibited him from receiving LQA to pay for the key money lease signed by his wife. On or about Sept. 9, 2008, Kim created a fake rental lease for the subject property and submitted it to the housing office at Daegu Garrison in support of his request for LQA. The fake lease for the apartment purported to be a two-year lease with a total cost of $64,000. Kim admitted receiving $64,000 in LQA, which is non-taxable, and also admitted that he used the money to pay for a portion of the key money lease entered into by his wife.
Kim also admitted that he created a fake receipt for the purported $64,000 rental payment and submitted it to the housing office at Daegu Garrison to justify his receipt of the LQA. He received the $64,000 back at the end of the key money lease in 2010, and he used it for the purchase of a new residence in the ROK.
The case is being investigated by the U.S. Army Criminal Investigation Division and the FBI. The case is being prosecuted by Trial Attorney Richard B. Evans of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Sue P. Fahami of the District of Nevada.
Defense Contractor CEO Sentenced to Prison for Defrauding United States NavyRead the Press Release
Orlando, Florida – U.S. District Judge Roy B. Dalton, Jr. today sentenced Thomas Frank Robeson (48, Potomac, Montana) to 18 months in federal prison for conspiracy to commit money laundering. As part of his sentence, the court also entered a money judgment in the amount of more than $2.1 million, the proceeds of money laundering conspiracy.
Robeson was found guilty on June 4, 2013.
According to court documents, Robeson owned and operated Nomad Aviation, Inc. (Nomad), located in Sanford, Florida, and repaired avionics systems in military aircrafts. Naval Air Systems Command (NAVAIR) selected Nomad as the sole and prime contractor for a $43 million avionics integration contract for the T-44 Pegasus aircraft fleet. On May 20, 2008, Nomad submitted an invoice for $5,075,907 pursuant to the terms of the contract. In July 2008, the Administrative Contracting Officer assigned to the contract requested that the Defense Contract Audit Agency (DCAA) evaluate the $5 million invoice, known internally to the DCAA as Voucher NOM0028 (NOM0028). On or about October 17, 2008, Robeson, and someone acting on Robeson’s behalf, provided the DCAA with four vendor invoices, including one for $2,171,621 from South Peck LLC, which was dated October 15, 2008.
Robeson created South Peck Aviation (SPA) and provided SPA invoices as if SPA was an unrelated, third-party vendor that had billed Nomad. SPA or Nomad actually purchased parts from third-party vendors, “marked up” the costs of the purchases, and submitted the inflated amounts in NOM0028, as if Nomad had purchased the parts from SPA. Robeson, and others acting at his direction, submitted the fictitious invoices via wire, specifically e-mail communication. SPA was actually a bakery that Robeson and his wife owned in Hawaii.
This case was investigated by the Internal Revenue Service – Criminal Investigation, the Defense Criminal Investigative Service, the Naval Criminal Investigative Service, and the Defense Contract Audit Agency. It was prosecuted by Assistant United States Attorney Vincent A. Citro.
Defendants Plead Guilty in Manhattan Federal Court to Participating in Racketeering Conspiracy with Russian-American Organized Crime Enterprise Operating International Sportsbook and to Participating in A Gambling RingRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that VADIM TRINCHER pled guilty today in Manhattan federal court to participating in a racketeering conspiracy in connection with his role as a member of a Russian-American organized crime enterprise. VADIM TRINCHER’s son, EUGENE TRINCHER, also pled guilty today to operating an illegal gambling business. VADIM TRINCHER and EUGENE TRINCHER were charged in April 2013 along with 32 other alleged members and associates of two Russian-American organized crime enterprises in an indictment that included racketeering, money laundering, extortion, and various gambling offenses. They pled guilty before U.S. District Judge Jesse M. Furman.
Manhattan U.S. Attorney Preet Bharara said: “Vadim Trincher played a critical role in the Taiwanchik-Trincher Organization – by helping both to launder tens of millions of dollars in proceeds from the organization's sportsbook and to run the illegal gambling business. His son Eugene ran a high stakes illegal card game in New York City for more than two years. We will not stop until, like Vadim and Eugene Trincher, everyone involved in this international crime ring is held to account.”
According to the Indictment, other documents filed in Manhattan federal court, and statements made at various proceedings in this case, including today’s guilty pleas:
The Taiwanchik-Trincher Organization is a nationwide criminal enterprise with strong ties to Russia and Ukraine. The leadership of the organization ran an international sportsbook that catered primarily to Russian oligarchs living in Russia and Ukraine and throughout the world. The Taiwanchik-Trincher Organization laundered tens of millions of dollars in proceeds from the gambling operation from Russia and the Ukraine through shell companies and bank accounts in Cyprus, and from Cyprus into the United States. Once the money arrived in the United States, it was either laundered through additional shell companies or invested in seemingly legitimate investments, such as hedge funds or real estate. VADIM TRINCHER was a U.S.-based participant in the enterprise. As part of his plea, VADIM TRINCHER acknowledged that he, in furtherance of the Taiwanchik-Trincher Organization, laundered the proceeds of the organization’s international sportsbook and assisted in the operation of the illegal gambling business.
EUGENE TRINCHER ran a high stakes illegal poker game in New York City from 2010 through April 2013. At these games, the pots frequently reached tens of thousands of dollars or more. The operators of these poker games, including EUGENE TRINCHER, collected percentages of the pots known as Arakes.@ Each of the poker games employed at least five or more people to assist with the operation of the poker games, payments of debts, and collection of debts.
VADIM TRINCHER, 52, of New York, New York, faces a maximum of 20 years in prison and three years of supervised release. As part of his plea agreement, VADIM TRINCHER agreed to forfeit cash and property worth over $20 million. He is scheduled to be sentenced by Judge Furman on March 20, 2014, at 3:45 p.m.
EUGENE TRINCHER, 27, of Beverly Hills, California, faces a maximum of five years in prison and three years of supervised release. As part of his plea agreement, EUGENE TRINCHER agreed to forfeit the proceeds of his illegal gambling business. He is scheduled to be sentenced by Judge Furman on March 24, 2014, at 3:00 p.m.
VADIM TRINCHER is the 15th defendant in this case to plead guilty. EUGENE TRINCHER is the 16th defendant in this case to plead guilty. The following defendants previously pled guilty and await sentencing:
- Bryan Zuriff pled guilty to gambling charges on July 26, 2013;
- William Barbalat pled guilty to gambling charges on August 14, 2013;
- Kirill Rapoport pled guilty to gambling charges on August 16, 2013;
- Edwin Ting and Justin Smith pled guilty to gambling charges on September 4, 2013;
- Dmitry Druzhinsky and David Aaron pled guilty to gambling charges on October 4, 2013;
- Alexander Zaverukha pled guilty to gambling charges on October 10, 2013;
- Nicholas Hirsch pled guilty to conspiring to commit wire fraud on October 16, 2013;
- Anatoly Shteyngrab pled guilty to conspiring to commit money laundering on October 17, 2013;
- Yugeshwar Rajkumar pled guilty to gambling charges on October 18, 2013;
- Stan Greenberg pled guilty to conspiring to commit racketeering on October 22, 2013;
- Arthur Azen pled guilty to conspiring to commit money laundering and conspiring to collect extensions of credit by extortionate means on November 5, 2013; and
- Hillel Nahmad pled guilty to gambling charges on November 12, 2013.
Mr. Bharara praised the investigative work of the Federal Bureau of Investigation, New York City Police Department, and Internal Revenue Service.
The case is being prosecuted by the Office’s Organized Crime Unit. Assistant U.S. Attorneys Harris M. Fischman, Joshua A. Naftalis, Peter Skinner, and Kristy J. Greenberg of the Organized Crime Unit are in charge of the prosecution. Assistant U.S. Attorneys Alexander Wilson and Christine Magdo of the Office’s Asset Forfeiture Unit are responsible for the forfeiture aspects of the case.
U.S. v. Alimzhan Tokhtakhounov, et al. Indictment
Crossville Man Pleads Guilty to Manufacturing Counterfeit CurrencyRead the Press Release
Ronald Thacker, 48, of Crossville, Tennessee, pleaded guilty yesterday in U.S. District Court to two counts of counterfeiting United States currency, announced David Rivera, U.S. Attorney for the Middle District of Tennessee.
At his plea hearing, Thacker admitted manufacturing counterfeit $50 bills in Nashville in May 2012, and using the counterfeit bills to purchase food at restaurants and to purchase items from retail stores. Thacker also admitted manufacturing counterfeit $50 bills in Crossville, Tennessee in August 2012 and using or attempting to use the counterfeit bills at restaurants and retail stores.
Thacker is scheduled to be sentenced on January 31, 2014, by Judge Todd J. Campbell. He faces a maximum sentence of twenty years in prison on each count.
This case was investigated by agents of the United States Secret Service, the Metropolitan Nashville Police Department and the Crossville Police Department. The case was prosecuted by Assistant United States Attorney William F. Abely.Crew Responsible for More Than 45 Commercial and Residential Burglaries Charged with Interstate Transportation of Stolen PropertyRead the Press Release
Earlier today, an indictment was unsealed charging Victor Arias, Rafael Astacio, Michael Figueroa, Nikitas Margiellos, and Leonard Repka with conspiracy and the interstate transportation of stolen property.1 Astacio, who was a detective with the New York City Police Department at the time of the burglaries, was also charged with unlawfully accessing a database that was maintained by the Federal Bureau of Investigation. The defendants= initial appearances are scheduled for this afternoon before United States District Judge Joseph F. Bianco at the United States Courthouse in Central Islip, New York.
The charges were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, Kathleen M. Rice, Nassau County District Attorney, George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), Thomas V. Dale, Commissioner, Nassau County Police Department, Toni Weirauch, Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation, New York (IRS), and Raymond W. Kelly, Commissioner, New York City Police Department (NYPD).
“The defendants were part of a sophisticated burglary crew that victimized Long Island businesses and residents for more than three years. Each defendant had a role to play in this band of criminals. The crew relied upon weapons of force as well as modern technology to steal millions from both homes and businesses alike. The defendant Astacio’s actions make clear that he was a police officer in name only, having sold his badge and his honor in exchange for his share of their ill-gotten gains,” stated United States Attorney Lynch. Ms. Lynch expressed her grateful appreciation to the Nassau County Police Department for its work in the investigation, and to the Suffolk County Police Department for its cooperation and assistance in the investigation.
“When a police officer or any public servant breaks the law it casts a pall on all men and women who risk their lives and work hard to serve their communities. Detective Astacio and his fellow defendants betrayed the public trust by using Long Island homes and businesses as personal piggybanks, and we will prosecute to the fullest extent of the law,” stated Nassau County District Attorney Rice.
“The defendants did not discriminate when choosing their victims: businesses and private residences were equal targets of their thievery. To facilitate their alleged illegal activity, the defendants used a combination of physical labor and modern technology, to include the unlawful access by Astacio of protected FBI information. As charged, Astacio not only turned his back on the community he promised to protect, he also betrayed his fellow law enforcement officers for a chance to line his pockets with his victims’ hard-earned money. As the arrest of these defendants demonstrates, no one is above the law. We will continue to work with our law enforcement partners to ensure that those who steal and violate the public’s trust will be brought to justice,” stated FBI Assistant Director-in-Charge Venizelos.
“It is always a sad day when a member of the law enforcement community aligns himself with those who will hurt the public, choosing to abandon those he swore to protect,” stated IRS Special Agent-in-Charge Weirauch. The public should be secure in knowing, however, that the strong partnership between federal and local law enforcement authorities will work tirelessly to protect the public from harm and will strive to make the public whole when it is wronged.”
“The Internal Affairs Bureau thoroughly investigates allegations of members of the service, and their dedication to this Long Island-based case resulted in the indictment being announced today. The Department subsequently removed Astacio of his post and terminated his employment, and any of the members of the service considering criminal association faces the same,” stated NYPD Police Commissioner Kelly.
According to the indictment and court filings, between 2009 and 2012, the sophisticated burglary crew led by Nikitas Margiellos committed approximately three dozen commercial burglaries and ten residential burglaries in the Eastern District of New York stealing approximately $10,000,000 in cash and property. To carry out the burglaries, the crew used both traditional burglary tools, such as blow torches, crowbars, wire cutters, and sledge hammers, as well as modern technology, including cell phone jammers and police scanners. In addition, they often conducted surveillance of their burglary victims to determine when the victims would be out of their homes and businesses. On at least one occasion, the crew even installed a tracking device on a victim’s car to assist in that endeavor.
Additionally, as set forth in the indictment and court filings, in one instance, the defendants Arias, Figueroa, Margiellos, and Repka burglarized a business in Plainview, New York, entering that commercial establishment, while Astacio and another coconspirator monitored a police scanner and acted as lookouts. Arias, Figueroa, Margiellos, and Repka spent approximately three and a half hours in the business and stole more than 45,000 pairs of Under Armour, Hobie, and other sunglasses that were worth approximately $3,000,000. After the burglary, the defendants and their coconspirators transported the stolen property across state lines and sold some of the sunglasses on the Internet. During another burglary, members of the crew stole approximately $2,000,000 in cash from a plastic surgeon’s office located in Nassau County.
If convicted, Arias, Figueroa, Margiellos, and Repka each face a maximum sentence of 15 years’ imprisonment, and Astacio faces 17 years’ imprisonment.
The government’s case is being prosecuted by Assistant United States Attorney Christopher C. Caffarone and Nassau County District Attorney’s Office Rackets Bureau Chief Rick Whelan, who will be cross-designated for this case as a Special Assistant United States Attorney.
The Defendants
VICTOR ARIAS
Age: 37
Copiague, New YorkRAFAEL ASTACIO
Age: 41
Copiague, New YorkMICHAEL FIGUEROA
Age: 52
Mount Vernon, New YorkNIKITAS MARGIELLOS
Age: 40
West Babylon, New YorkLEONARD REPKA
Age: 50
Lindenhurst, New YorkE.D.N.Y. Docket No. 13-CR-640
_____________________________
1 The charges announced today are merely allegations, and the defendants are presumed innocent unless and until proven guilty.
Columbus Man Pleads Guilty to Using Stolen Identities to Defraud Federally Funded Tutoring ProgramRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
COLUMBUS, OHIO –Ashkir Ali, 46, of Columbus pleaded guilty today to defrauding the U.S. Department of Education’s Supplemental Education Services Program by billing two area school districts more than $100,000 for tutoring sessions that were never provided.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, Thomas D. Utz, Jr., Special Agent in Charge for the North Central Region of the U.S. Department of Education, Office of Inspector General and Ohio Auditor of State Dave Yost announced the pleas entered today before U.S. District Judge Edmund A. Sargus Jr.
“These crimes were committed in order to abuse a program set up to help central Ohio schoolchildren,” U.S. Attorney Stewart said. “We will continue to work with federal and state law enforcement to uncover and prosecute such crimes.”
“This is a theft of literacy, not just money,” Auditor Yost said. “These boys and girls will never get those years of learning back.” Yost commended the federal authorities for their cooperation and “their passion to win justice for these kids.”Ali pleaded guilty to one count of making false statements, which is punishable by up to five years in prison, and one count of aggravated identity theft, punishable by a two-year sentence that he must serve after completing the sentence for making false statements. Judge Sargus will set a date for sentencing.
Ali owned WAISS Network Technologies. According to court documents, Ali created fraudulent forms using forged tutor, student and parent names and other information. He billed Columbus City Schools and was paid for tutoring 51 students who either never attended tutoring or who went very few times. Investigators determined the fraudulent scheme netted Ali approximately $100,000 over a two-year period.
Ali used the same method to defraud Southwestern City Schools out of approximately $20,000 in the 2010-2011 school year. Investigators did not find a single student from Southwestern City Schools who attended tutoring allegedly provided by WAISS.
Allegations surfaced of possible misconduct by providers of the Supplemental Education Services Program in January 2011. The Auditor of State’s Special Investigations unit conducted a special audit of the Columbus City School District in June 2011.
U.S. Attorney Stewart commended the investigation by the U.S. Department of Education Office of Inspector General and State Auditor Yost’s Special Investigations Unit, as well as Assistant U.S. Attorney Kenneth Affeldt who is representing the United States in this case.
Centre County Man Sentenced to Probation for Possessing Marijuana PlantsRead the Press Release
JOHNSTOWN, Pa. - A resident of Patton, Pa., has been sentenced in federal court to four years probation, the first three months of which must be satisfied by conditions of home confinement with electronic monitoring, on his conviction of possession of marijuana plants, United States Attorney David J. Hickton announced today.
United States District Judge Kim R. Gibson imposed the sentence on Stephen D. Lamont, 36.
According to information presented to the court, on May 9, 2011, Lamont possessed with the intent to distribute at least 50, but less than 100, marijuana plants.
Assistant United States Attorney John J. Valkovci, Jr., prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the joint task force, headed by the Laurel Highlands Resident Agency of the Federal Bureau of Investigation, for the investigation leading to the successful prosecution of Lamont. Other agencies participating on the task force include the Internal Revenue Service-Criminal Investigation; Pennsylvania State Police; the Pennsylvania Attorney General's Office; the Cambria County District Attorney's Office; the Carrolltown Police Department; the Patton Police Department; the Ebensburg Police Department; the Portage Police Department and the Paint Township Police Department.
Bulger Sentenced to Two Life TermsRead the Press Release
BOSTON – In U.S. District Court in Boston today, James J. Bulger was sentenced for operating a criminal enterprise that was responsible for the murder of 11 people, as well as numerous counts of extortion, money laundering, drug dealing, and firearms possession.
U.S. District Court Judge Denise J. Casper sentenced Bulger to two consecutive life terms plus five years and $19.5 million in restitution. During the sentencing hearing this morning, Judge Casper told Bulger that, “The scope, the callousness, the depravity of your crimes, is almost unfathomable.”
On August 12, 2013, Bulger was convicted by a jury following a two-month long trial. The jury found the former fugitive guilty of racketeering conspiracy and numerous racketeering acts of murder, extortion, narcotics distribution, money laundering and possession of firearms including machineguns. In their verdict, the jury found that Bulger played a role in the murders of Deborah Hussey, Paul McGonagle, Edward Connors, Thomas King, Richard Castucci, Roger Wheeler, Brian Halloran, Michael Donahue, John Callahan, Arthur Barrett and John McIntyre.
“The loss and anguish suffered by these families and many others is unimaginable. What is undeniable is the fact that all of this suffering was caused by James Bulger – who is now, finally being held accountable for his horrific acts,” said United States Attorney Carmen M. Ortiz.
Bulger, the former leader of the Winter Hill Gang, ran a vast criminal network that emanated from South Boston and controlled much of the city and the surrounding areas during the 1970s and 1980s. In order to generate money and maintain dominance among other criminal enterprises, Bulger and his associates engaged in numerous illegal activities such as loansharking, extortion of local business owners and bookmakers, trafficking of narcotics and firearms, and murder. Bulger, and associates under his direction, used violence, threats, and intimidation to carry out these illegal activities.In late 1994, upon learning of his impending indictment, Bulger fled Massachusetts. On June 22, 2011, Bulger and his companion, Catherine Greig, were arrested in Santa Monica, California after 16 years on the run. Greig was later convicted of conspiracy to harbor a fugitive and is currently serving eight years in federal prison.
U.S. Attorney Ortiz; Colonel Timothy P. Alben, Superintendent of the Massachusetts State Police; John J. Arvanitis, Special Agent in Charge of the Drug Enforcement Administration, Boston Field Division; William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; Michael E. Horowitz, Inspector General for the Department of Justice; Vincent Lisi, Special Agent in Charge of the FBI’s Boston Field Division, and U.S. Marshal John Gibbons made the announcement today.
The case was prosecuted by Assistant U.S. Attorneys Fred M. Wyshak, Jr., Brian T. Kelly and Zachary Hafer of Ortiz’s Public Corruption and Special Prosecutions Unit.
Brownwood, Texas, Man Sentenced to 135 Months in Federal Prison for Enticing A Minor Child to Engage in Sexual ActivityRead the Press Release
AMARILLO, Texas — Luis Gerardo Alvarado, 22, was sentenced this morning, by U.S. District Judge Mary Lou Robinson, to 135 months in federal prison, following his guilty plea in September 2013 to one count of enticement of a minor and aiding and abetting. Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
According to documents filed in the case, while living in Brownwood, Texas, Alvarado met a minor female, who lived in Coleman County, Texas, by contacting her through Facebook chat. From mid-March 2013 until April 8, 2013, Alvarado communicated with the minor female and attempted to persuade and entice her to engage in sexual activity with him. Alvarado knew the minor female was under 17 years of age. Alvarado has been in federal custody since July 1, 2013, when he was received from state custody, where he was being held on pending state charges.
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 U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the Coleman Police Department, the Santa Anna Police Department and the Brownwood Police Department. Assistant U.S. Attorney Steven M. Sucsy prosecuted.
Belmond Man Pleads Guilty to Making A False Statement to A BankRead the Press Release
A businessman who made a false statement to a bank in order to obtain a loan pled guilty today in federal court in Cedar Rapids.
Marvin Redenius, age 49, from Belmond, Iowa, was convicted of one count of making a false statement to a financial institution.
At the plea hearing, Redenius admitted that, on November 10, 2006, he lied to the financial institution, claiming the purpose of the loan was for the purchase of farm equipment when, in fact, Redenius used the proceeds of the loan to purchase stock in a company.
Sentencing before United States District Court Chief Judge Linda R. Reade will be set after a presentence report is prepared. Redenius remains free on bond previously set. Redenius faces a possible maximum sentence of 30 years’ imprisonment, a $1 million fine, $100 in special assessments, and five years of supervised release following any imprisonment.
The case is being prosecuted by Assistant United States Attorney C.J. Williams and was investigated by the Internal Revenue Service and the Federal Bureau of Investigation.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 13-cr-3007.
Attorney General Eric Holder Calls on Congress to Pass Bipartisan Second Chance ActRead the Press Release
WASHINGTON – Attorney General Eric Holder today endorsed the reauthorization of the Second Chance Act, bipartisan legislation introduced by Senators Patrick Leahy and Rob Portman and its companion legislation by Representatives Danny Davis and F. James Sensenbrenner, Jr. that provides resources and support to people reintegrating into their communities after being incarcerated. The Attorney General’s endorsement came while visiting a graduation ceremony for participants of Project EARN, a federal reentry court in St. Louis. The visit highlighted the department’s “Smart on Crime” initiative that seeks to reform the criminal justice system, improve reentry programs, and pursue alternatives to incarceration for low-level, non-violent offenses.
During Fiscal Year 2013 under the Second Chance Act, the Justice Department’s Bureau of Justice Assistance and the Office of Juvenile Justice funded over 100 grants, totaling more than $62 million, to support improved probation, parole, and reentry programs throughout America. The grants include mental health and substance abuse treatment initiatives, technology career training programs, juvenile reentry efforts, and smart probation projects. If Congress fails to reauthorize the Second Chance Act, countless neighborhoods will no longer have the critical support that has helped make profound and positive differences.
Please see below for the Attorney General’s prepared remarks in St. Louis.
REMARKS AS PREPARED FOR DELIVERY BY ATTORNEY GENERAL ERIC HOLDER AT PROJECT EARN GRADUATION CEREMONY
Thank you, Your Honor – and good morning, everyone. It is a pleasure to be here in St. Louis, and a privilege to stand with each of the participants – and, especially, the graduates – of this remarkable program.
I appreciate the opportunity to share this moment with you. And I am honored to join all of the proud family members and friends who are with us today in celebrating your achievements, reflecting on the progress you’ve made, and reaffirming your individual commitments to yourselves, your communities – and your futures.
First, to our graduates: I know the journey that has led you to this moment has not been easy. I know you’ve had to work hard and overcome tremendous adversity.
At times, it’s been an uphill battle. But the fact that you stand before this Court as Project EARN graduates is not only inspiring – it is proof of the strength, and the sheer determination, that defines you. And it’s emblematic of the courage that defines everyone who has the resolve to enter treatment and keep moving down the long and difficult – but ultimately rewarding – road to recovery.
For our graduates – and for those who aspire to join them – I know this program has presented both an opportunity and a challenge. It has required you to be honest with yourselves, and with your families and friends. It has demanded that you confront your weaknesses and acknowledge past mistakes. And it has given you the chance not only to reclaim your future, but to build a new one.
We can all be proud of the positive strides that our four distinguished graduates have made in this regard.
After a great deal of hard work, Kenneth Johnson is expected to earn his degree in HVAC next month. And he’s already giving back to those around him by helping others stay on the right path and maintain a sober lifestyle.
Roger Jenkins is a full-time college student who’s only three credits away from earning his degree. He’s keeping busy – running his own carpet cleaning business, which I’m glad to hear is thriving, and placing a renewed focus on his wonderful family.
Donald Westrich has turned his back on decades of drug use. He’s been sober for more than a year. And, in addition to maintaining full-time employment, he’s become active in his community through a local church.
Last but not least, Michael Stephens has undergone a remarkable transformation. After a difficult start in this program, he has been free of cocaine use for more than a year. He’s served as a source of inspiration to many of those around him. And I’m told that he always has a smile on his face.
Each of these graduates is here as a result of months of hard work, dedication, and willpower. Today, they stand among the ranks of well over a million people who have graduated from drug courts like this one across the country.
I hope those of you who are still making your way through this program will be encouraged by what they’ve accomplished.
As you keep moving forward, I want you to know that you have my support, and the support of my colleagues at every level of the Department of Justice – as well as President Obama and others throughout the Administration.
All of us are committed to the same goals that have driven leading criminal justice professionals to come together – here in St. Louis – to create this innovative program. And we’re determined to keep building on the successes you’re making possible – not only in this community, but across the country.
In fact, I am pleased to announce today that, during Fiscal Year 2013, the Justice Department funded over 100 grants totaling more than $62 million under the landmark Second Chance Act. These important funds support improved probation, parole, and reentry programs throughout America. And they have the potential to make a real difference in countless neighborhoods.
That’s why it’s imperative that we keep up the good work. I want to take this opportunity to call on Congress to pass legislation, introduced yesterday by U.S. Senators [Patrick] Leahy and [Rob] Portman, which would reauthorize and strengthen the Second Chance Act. This law enjoys broad, bipartisan support. And its timely reauthorization would enable us to institutionalize our commitments to programs like this one – and continue providing the resources necessary to make good on our nation’s promise of equality, opportunity, and justice under law.
We must support these programs because we recognize that – as our graduates here have shown – better treatment, and expanded access to the resources you need, can result in better outcomes and brighter futures for many who come into contact with the criminal justice system.
This is something I’ve seen firsthand. During my time as a judge on the Superior Court in Washington, D.C. – and later as United States Attorney for the District of Columbia – I learned how drug abuse, crime, and incarceration can trap people in a destructive cycle. A cycle that weakens communities, tears families apart, and destroys individual lives.
Day after day, I watched lines of young people – most often young men of color – stream through my courtroom. Too many of the faces I saw became familiar – because too many of the people I sentenced served their time, were released from prison, and sooner or later returned to the same behavior that had led them to my courtroom in the first place.
That’s one reason why I’m passionate about programs like this one – programs that can help strong, committed individuals like you to break that cycle and gain the tools you need to reenter your communities and lead productive and fulfilling lives.
But I’m also here today because I understand that our country has a broader obligation to stand with you, and to support you – because we’re not fundamentally different.
I grew up in a neighborhood – in Queens – where people like you would have been my friends. We would have gone to school, and partied, and played basketball together.
So I can’t help but feel mindful of the fact that, although I’m here in my capacity as Attorney General of the United States, a few of the people I grew up with – good people, like you –ended up taking very different paths. Some of them didn’t catch the same breaks. Some had to deal with drug issues. And some became involved with the criminal justice system – because of bad luck, or bad choices, or both.
I’ve seen how tough it can be for people in your shoes to turn your lives around, to deal with unfairness, and to overcome adversity. I know that everyone makes mistakes – everyone. Including me. And that’s why I wanted to be here today: to tell you in person how proud I am that each of you has decided not to let your mistakes define you – and not to make excuses – but to make the most of the opportunities that you’ve been given.
You’re here today because you’re smart. You have the skills and the determination not just to make positive contributions, but to become role models for those around you – especially the young people who will learn from your examples.
Never forget that you have a responsibility to these kids – to talk to them, to serve as mentors, to help them learn from your mistakes, and to ensure that their lives aren’t interrupted or cut short.
For those of you who are graduating today – Kenneth, Roger, Donald, and Michael – I congratulate you on this extraordinary achievement. For those who are just starting Project EARN, or who are well on your way – I am proud of every one of you.
I am confident in your ability to keep moving forward, to become leaders and role models in your neighborhoods, and to make the difference that our fellow citizens – and especially our young people – need and deserve.
Congratulations, once again – and keep up the great work. I expect to hear great things about all that you’ll do and achieve from this moment forward.
For more information about the department’s “Smart on Crime” initiative, please visit http://www.justice.gov/ag/smart-on-crime.pdf.
Attempted Crystal Meth Distribution Results in Significant SentencesRead the Press Release
McALLEN, Texas – Gelacio Cendejas-Renteria, 44, of Uruapan, Michoacan, Mexico, and Julian Martinez-Rodriguez, 44, of McAllen, have been ordered to federal prison for their respective involvement in the distribution of crystal methamphetamine from McAllen to Houston, announced United States Attorney Kenneth Magidson along with Javier Peña, special agent in charge of the Drug Enforcement Administration (DEA).
Today, U.S. District Judge Randy Crane sentenced Cendejas-Renteria to life in prison. In handing down the sentence, Judge Crane noted Cendejas-Renteria’s role in the transaction as well as utilization of his residence to store the narcotics and involving the assistant of a minor in the drug negotiations. As an illegal alien, Cendejas-Renteria is expected to
Taking into consideration his role in the case as well as his prior criminal history, Judge Crane sentenced Martinez-Rodriguez to 360 months in federal prison today. He will also face deportation proceedings following his release from prison.
On Jan. 17, 2013, Cendejas-Renteria met with an undercover agent and negotiated the transportation of crystal methamphetamine from McAllen to Houston. On Feb. 1, 2013, Cendejas-Renteria met with the agent and provided him money to cover the cost of transporting the narcotics to Houston. On the same date, Cendejas-Renteria provided the agent the keys to a motor vehicle containing the narcotics. The agent then obtained the vehicle and, while traveling to another location, was followed by Martinez-Rodriguez. The vehicle was determined to have 10 bricks of crystal methamphetamine with a gross weight of 12 kilograms. A subsequent search at the residence of Cendejas-Renteria and Martinez-Rodriguez lead to the discovery of an additional 20 bricks of crystal methamphetamine with a gross weight of 22 kilograms and an additional 29 bundles of marijuana with a gross weight of 272 kilograms.
Cendejas-Renteria pleaded guilty on March 25, 2013, while Martinez-Rodriguez pleaded guilty on May 3, 2013.
Both men will remain in custody.
The investigation was conducted by DEA and is being prosecuted by Assistant United States Attorney Juan Alanis.
Armed Drug Dealer Sentenced in Federal CourtRead the Press Release
MOBILE, Ala. – Jakeith Terrell Campbell, 31, of Mobile, was sentenced in federal court today to a total term of 35 years imprisonment. Campbell entered guilty pleas to charges of conspiracy to possess with intent to distribute crack cocaine, and two counts of using, carrying and possession of a firearm during and in relation to a drug trafficking offense. Judge Callie V. S. Granade imposed the sentence, which consisted of consecutive penalties required by federal law for the serious drug and gun offenses.
The gun penalties require the imposition of consecutive mandatory terms of 5 years and 25 years. The sentence for the drug offense was an additional 5 years. The judge ordered a five-year term of supervised release, which will commence when Campbell is released from imprisonment, and a total of $300 in special mandatory assessments. No fine was imposed.
The case was investigated by the Mobile County Sheriff’s Office, the Mobile Police Department, and the Bureau of Alcohol, Tobacco, Firearms and Explosives. It was prosecuted in the United States Attorney=s Office by Assistant United States Attorney Gloria Bedwell.
Ambulance Company Owner and Son Plead Guilty to Conspiracy to Commit Health Care & Wire FraudRead the Press Release
RALEIGH - United States Attorney Thomas G. Walker announced that today, before United States District Judge Terrence W. Boyle, PHYLLIS STALLINGS HARRELL and PAUL LYNN TRUEBLOOD, both of Belvidere, North Carolina, pleaded guilty to Count 1 of the Second Superseding Indictment which charged them with Conspiracy to Commit Health Care Fraud and Wire Fraud, in violation of Title 18, United States Code, Section 1349.
The investigation of this case was conducted by the United States Department of Health and Human Services Office of the Inspector General, the North Carolina Department of Justice's Medicaid Investigations Unit, and the Federal Bureau of Investigation. Assistant United States Attorney William M. Gilmore is the assigned prosecutor on the case from the Economic Crimes Division of the United States Attorney's Office.
Count 1 of the Second Superseding Indictment alleges that between January of 2004 and December of 2009, HARRELL and TRUEBLOOD conspired to defraud Medicare, Medicaid, and private insurers in connection with various billings for alleged non-emergency ambulance transportation services in the area of Elizabeth City. The Indictment alleges that HARRELL, the mother of TRUEBLOOD, billed Medicare and Medicaid through Harrell Medical Transport, a company owned by HARRELL and operated by HARRELL and TRUEBLOOD. The indictment further alleges that TRUEBLOOD operated a wheelchair van transportation company that transported Medicare and Medicaid beneficiaries to routine medical appointments on a weekly basis. The Indictment alleges that although patients were transported in wheelchair vans, HARRELL and TRUEBLOOD billed Medicare and Medicaid through Harrell Medical Transport as though the trips had occurred in an ambulance. Medicare and Medicaid do not pay wheelchair van providers for wheelchair van transportation. The Indictment alleges that HARRELL and TRUEBLOOD fabricated and caused to be fabricated information in medical records to make it appear as though the patients had traveled by ambulance. The Indictment also alleges that HARRELL and TRUEBLOOD caused employees of Harrell Medical Transport to omit material information in medical records concerning the ability of patients to walk and ride in wheelchairs, which affects whether Medicare and Medicaid will pay for ambulance transportation.
During the investigation of the case, the United States Attorney’s Office, with the assistance of the United States Department of Health and Human Services, the North Carolina Attorney General’s Office – Medicaid Investigaitons Division, and the Federal Bureau of Investigation, seized several hundred thousand dollars in assets held by HARRELL and TRUEBLOOD. Seized assets included various ambulances and other vehicles, as well as the contents of various bank and investment accounts. During court today, United States District Judge Terrence W. Boyle entered a Preliminary Order of Forfeiture with respect to these assets and other assets linked to the fraud.
At sentencing, which has been tentatively scheduled for the Court’s February 17, 2014 term, HARRELL and TRUEBLOOD each face up to 20 years in prison, 3 years of supervised release, and up to a $250,000 fine. HARRELL and TRUEBLOOD will also be ordered to make restitutuion to Medicare, Medicaid, and private insurers who lost money due to the fraud. While the exact amount of restitutuion has yet to be determined, during court the Government noted that the loss in the case could amount to as much as $2.5 Million.Albuquerque Woman Sentenced to Eight Years for Methamphetamine Trafficking ConvictionRead the Press Release
ALBUQUERQUE – Reyna Carizoza, 51, a Mexican national illegally in the United States, was sentenced this morning to 97 months in prison followed by four years of supervised release for her methamphetamine trafficking conviction. Carizoza will be deported after she completes her prison sentence.
Carizoza was arrested on a criminal complaint in April 2013, after law enforcement officers found methamphetamine in her vehicle following a traffic stop. She subsequently was indicted and charged with possession of methamphetamine with intent to distribute.
Court records reflect that the FBI initiated an investigation into Carizoza in April 2013, after an informant identified her as an Albuquerque-area drug trafficker. On April 26, 2013, the FBI directed the informant to make several recorded telephone calls to Carizoza during which the informant negotiated to buy four ounces of methamphetamine from Carizoza. Thereafter, law enforcement officers executed a traffic stop of Carizoza’s vehicle. After a narcotics canine “alerted” to the passenger side of the vehicle, officers found a bag containing approximately 64.7 grams of methamphetamine hidden in a toy that was in the vehicle. Carizoza was arrested and has been in federal custody since that time.
This case was investigated by the FBI’s Albuquerque Cross Border Drug Violence Hybrid Squad and the Bernalillo County Sheriff’s Office and was prosecuted by Assistant U.S. Attorneys Holland S. Kastrin and Lynn W.Y. Wang.
Alabama Woman Assisted Co-Conspirator in Tax Evasion SchemeRead the Press Release
JOHNSTOWN, Pa. - A resident of Florala, Al., pleaded guilty in federal court to a charge of conspiracy United States Attorney David J. Hickton announced today.
Linda Reed, 69, pleaded guilty to one count before United States District Judge Kim R. Gibson.
In connection with the guilty plea, from June 9, 2007, to April 15, 2008, Reed conspired with others to defraud the United States by assisting a co-conspirator in concealing money from the Internal Revenue Service in order for the co-conspirator to avoid paying income tax.
Judge Gibson scheduled sentencing for April 1, 2014, at 10:30 a.m. The law provides for a maximum total sentence of 5 years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Stephanie L. Haines is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation and the Internal Revenue Service Criminal Investigation conducted the investigation that led to the prosecution of Reed.
Alabama Man Sentenced to Federal Prison for Role in Identity Theft and Tax Refund SchemeRead the Press Release
Kevin Jackson of Montgomery, Ala., was sentenced to serve 102 months in federal prison and three years of supervised release, along with an order to pay $150,840.49 in restitution, for his role in a stolen identity refund fraud scheme, announced Assistant Attorney General Kathryn Keneally of the Justice Department's Tax Division and U.S. Attorney for the Middle District of Alabama George L. Beck Jr. Jackson had previously pled guilty to access device fraud and to aggravated identity theft.
According to court documents, Jackson possessed a storage locker in which law enforcement authorities found a computer, three cellular telephones, at least 500 names and Social Security numbers of identity theft victims and at least 70 prepaid debit cards, all tied to a scheme to obtain fraudulent federal tax refunds by causing federal tax returns to be filed in the names of stolen identities.
The case was investigated by special agents of the Internal Revenue Service - Criminal Investigation and the U.S. Secret Service, along with assistance from the Montgomery Police Department. Trial Attorneys Justin Gelfand and Jason Poole of the department’s Tax Division prosecuted the case.
Additional information about the Tax Division and its enforcement efforts may be found at www.justice.gov/tax .
Alabama Man Sentenced to Federal Prison for Role in Identity Theft and Tax Refund SchemeRead the Press Release
Montgomery, Alabama - Montgomery, AL – Kevin Jackson of Montgomery, Ala., was sentenced to serve 102 months in federal prison and three years of supervised release, along with an order to pay $150,840.49 in restitution, for his role in a stolen identity refund fraud scheme, announced U.S. Attorney for the Middle District of Alabama George L. Beck Jr. Jackson had previously pled guilty to access device fraud and to aggravated identity theft.
According to court documents, Jackson possessed a storage locker in which law enforcement authorities found a computer, three cellular telephones, at least 500 names and Social Security numbers of identity theft victims and at least 70 prepaid debit cards, all tied to a scheme to obtain fraudulent federal tax refunds by causing federal tax returns to be filed in the names of stolen identities.
The case was investigated by special agents of the Internal Revenue Service - Criminal Investigation and the U.S. Secret Service, along with assistance from the Montgomery Police Department. Trial Attorneys Justin Gelfand and Jason Poole of the department’s Tax Division prosecuted the case.
Additional information about the Tax Division and its enforcement efforts may be found at justice.gov/tax.
PRESS CONTACT: Clark Morris
Email: [email protected]
Telephone: (334) 551-1755
Fax: (334) 223-7617
13 November 2013
Woman Pleads GuiltyIn Salina Drug Trafficking CaseRead the Press Release
TOPEKA, KAN. – A woman has pleaded guilty in a federal drug trafficking case from Salina, U.S. Attorney Barry Grissom said today.
Abigail Torres Soto, 23, pleaded guilty to one count of conspiracy to distribute methamphetamine, three counts of distributing methamphetamine and one count of possession with intent to distribute methamphetamine. In April 2013, Soto was indicted along with co-defendants Jon Reed Woodbridge, 23, and Delaine Rae Romeo, 48, Salina, Kan. The indictment alleged that beginning in January 2013 the defendants conspired to distribute methamphetamine in Saline County, Kan.
In June 2013, Romeo pleaded guilty to one count of conspiracy to distribute methamphetamine. In her plea, she admitted that on Feb. 7, 2013, agents with the drug task force based in Salina executed a search warrant at the Koyotee lounge in Salina and seized more than $6,000 in cash, marijuana, methamphetamine and other drug paraphernalia. Agents had made three controlled buys of methamphetamine from the Koyotee lounge. Romeo admitted that she had been receiving methamphetamine from Soto to sell.
Soto is set for sentencing Feb. 14. She faces a penalty of not less than 10 years and a fine up to $4 million on the conspiracy count, not less than five years and not more than 40 years and a fine up to $2 million on each distribution count, and a maximum penalty of 20 years and a fine up to $1 million on the remaining count.
Co-defendants include: Jon Reed Woodbridge, who is set for trial Nov. 14.
Delaine Rae Romeo, who is set for sentencing Jan. 27, 2014.Grissom commended the 1-70/I-35 Drug Task Force, the Salina Police Department and Assistant U.S. Attorney Richard Hathaway for their work on the case.
In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.
Westmoreland County Restaurateur Sentenced to Probation with Home Detention for Evading TaxesRead the Press Release
PITTSBURGH - A resident of Greensburg, Pennsylvania, has been sentenced in federal court to five years probation, including one year of home detention, and ordered to file tax returns, including penalties and interest on her conviction of federal income tax evasion, United States Attorney David J. Hickton announced today.
Senior United States District Judge Gustave Diamond imposed the sentence on Jeanean C. Smith.
According to information presented to the court, as owner of Jioio's Restaurants in Latrobe and North Huntingdon, Smith engaged in the practice of "skimming" cash from restaurant sales, resulting in a total tax loss of $438,661 from the filing of false personal, corporate and payroll tax returns during the years 2006-2009.
Prior to imposing sentence, Judge Diamond stated that defendant's personal circumstances and the need to run her business in order to repay the IRS outweighed any need for a Sentencing Guidelines sentence of imprisonment.
Assistant United States Attorney Leo M. Dillon prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Internal Revenue Service, Criminal Investigation for the investigation leading to the successful prosecution of Smith.
Washington Park Man Sentenced for Firearm OffenseRead the Press Release
Terrell A. Rey, 28, of Washington Park, Illinois, was sentenced in federal district court on November 8, 2013, to 30 months in prison, to be followed by three years supervised release, a $100 special assessment, and a $250 fine, for unlawful possession of a firearm by a previously convicted felon, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today.
Facts presented in court revealed that On October 28, 2012, police officers responded to Rey’s home. The officers announced themselves and encountered Rey just inside the front door of the residence, at which point they observed a firearm in his back pants pocket. Rey was taken into police custody, interviewed and read his Miranda rights. He admitted to possessing a firearm, knowing he was a previously convicted felon.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Washington Park Police Department. Special Assistant United States Attorney Neal C. Hong prosecuted the case.
Voluntown Man Charged with Distributing Designer Drugs over the Internet, Possessing LsdRead the Press Release
Deirdre M. Daly, Acting United States Attorney for the District of Connecticut, and John J. Arvanitis, Special Agent in Charge of the Drug Enforcement Administration in New England, announced that AARON MIODUSZEWSKI, 33, of Voluntown, was arrested today on a six-count indictment charging him with possessing and distributing controlled substance analogues over the Internet, and possessing LSD.
According to court documents and statements made in court, it is alleged that between June 2011 and July 2012, MIODUSZEWSKI distributed controlled substance analogues through websites he operated, including www.eastcoastchems.com and www.simfluxresources.com. It is further alleged that when law enforcement officers executed a search warrant at MIODUSZEWSKI’s home in July 2012, they recovered large quantities of various controlled substance analogues, as well as LSD.
Controlled substance analogues are synthetic drugs that are illegal if intended for human consumption. Common names for various controlled substance analogues are “designer drugs,” “bath salts,” “spice,” and “herbal incense.” The synthetic drugs mimic the dangerous effects of cocaine, amphetamines and other substances that are Schedule I or II controlled substances under the federal Controlled Substances Act.
The indictment charges MIODUSZEWSKI with four counts of possession with intent to distribute and distribution of controlled substance analogues, one count of possession with intent to distribute controlled substance analogues, and one count of possession with the intent to distribute lysergic acid diethylamide (“LSD”).
A federal grand jury in Hartford returned the indictment on November 5, 2013, and MIODUSZEWSKI was arrested this morning at his residence. He appeared this afternoon before U.S. Magistrate Judge Donna F. Martinez and is detained pending a hearing that is scheduled for Friday, November 15, at 11:30 a.m.
If convicted, MIODUSZEWSKI faces a maximum term of imprisonment of 20 years and a fine of up to $1 million on each count.
Acting U.S. Attorney Daly stressed that an indictment is only a charge and is not evidence of guilt. Charges are only allegations and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This matter is being investigated by the Drug Enforcement Administration’s Tactical Diversion Squad in Worcester, Mass., and is being prosecuted by Special Assistant U.S. Attorney Natasha Dye.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722 [email protected]Two North Idaho Men Sentenced for Conspiring to Distribute MethRead the Press Release
COEUR D’ALENE – U.S. Attorney Wendy J. Olson announced today that Justin William Russell, 27, of Sandpoint, and Michael Alan Briggs, 43, of Hayden, were sentenced for conspiring to possess with intent to distribute 50 grams or more of methamphetamine. The defendants appeared before U.S. District Judge Edward J. Lodge at the federal courthouse in Coeur d’Alene.
Russell was sentenced today to serve 89 months in prison and fined $1,000. Briggs was sentenced on Tuesday to serve 87 months. Judge Lodge ordered each defendant to serve five years of supervised release following their prison term and forfeit at least $10,000, which represents the proceeds derived from the offense conduct.
According to court documents, Russell and Briggs pleaded guilty on August 20 and June 24, 2013, respectively, to count one of the federal indictment filed on March 19, 2013. The defendants admitted that from May 2011 to at least December 2011, they conspired together and with other individuals to possess and distribute 50 grams or more of methamphetamine. The evidence showed that Briggs received his methamphetamine from Russell until Russell was arrested, and then moved on to another supplier. Both individuals sold their methamphetamine in the Coeur d’Alene area.
The case is the result of a joint investigation of the Organized Crime and Drug Enforcement Task Force (OCDETF), led by the North Idaho Violent Crime Task Force, a Federal Bureau of Investigation sponsored Safe Streets Task Force comprised of law enforcement from the Kootenai County Sheriff’s Office, Coeur d’Alene City Police Department, Post Falls Police Department, Idaho State Police, Bonner County Sheriff's Office, Shoshone County Sheriff's Office, and the Coeur d’Alene Tribe.
The OCDETF program is a federal multi agency, multi-jurisdictional task force that supplies supplemental federal funding to federal and state agencies involved in the identification, investigation, and prosecution of major drug trafficking organizations. Federal task force members include the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Drug Enforcement Administration, the Federal Bureau of Investigation, Internal Revenue Service-Criminal Investigation, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), and U.S. Marshals Service.
Two Indicted in $15 Million Investment Fraud Scheme That Victimized National Hockey League Players and Long Island InvestorsRead the Press Release
An indictment was unsealed this morning in federal court in Brooklyn charging Phillip A. Kenner, a former financial advisor to several former and current National Hockey League (“NHL”) players, and Tommy C. Constantine, also known as “Tommy C. Hormovitis,” a former professional race car driver, with wire fraud and wire fraud and money laundering conspiracies in connection with schemes involving fraudulent real estate and business investments. Kenner is also charged with wire fraud involving a separate scheme to buy real estate in Sag Harbor, New York.
The defendants were arrested earlier today in Scottsdale, Arizona, by agents of the Federal Bureau of Investigation and Internal Revenue Service and officers of the Scottsdale Police Department, and a search warrant was executed at Kenner’s residence. The defendants are scheduled to appear later today before United States Magistrate Judge Bridget S. Bade at the federal courthouse in Phoenix, Arizona, for removal proceedings to the Eastern District of New York.
The charges and arrests were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office, and Toni Weirauch, Special Agent-in-Charge, Internal Revenue Service Criminal Investigation, Criminal Investigation, New York.
During his college years at Rensselaer Polytechnic Institute (“RPI”) in Troy, New York, Kenner became acquainted with one of the schemes’ victims, who played hockey at RPI before being drafted by an NHL professional team. In approximately 1994, Kenner was licensed as a financial advisor and, early in his career, worked at a firm in Boston, Massachusetts, where he built a client list of several NHL players, before starting his own firm in 2003. Between 2002 and 2013, Kenner advised numerous hockey players on investments in a series of allegedly fraudulent schemes that he represented would earn significant profits for the players; however, the victimized players instead suffered losses exceeding $15 million.
The Hawaii Real Estate Investment Scheme
As alleged in the indictment and other court filings by the government, Kenner fraudulently solicited at least 13 players to invest $100,000 each in a real estate development project on the Big Island of Hawaii. In connection with this scheme, Kenner also convinced several NHL players to open lines of credit, to which Kenner was given access. Unbeknownst to the players, Kenner allegedly used their investments for purposes unrelated to the development of the Hawaii real estate project. Rather than investing the money as promised, Kenner and Constantine used it to fund personal real estate purchases, pay personal expenses, and pay down other debts necessary to conceal the scheme. Beyond the NHL players, in August 2006, Kenner and Constantine also allegedly defrauded Lehman Brothers Holdings, Inc. of $2 million based on Kenner’s misrepresentations concerning the use of a real estate loan. In total, the victims of this scheme lost more than $13 million.
The Eufora LLC Scheme
Constantine operated Eufora, LLC, a prepaid debit card business, which he founded in 2002. Kenner informed the NHL players that Eufora was an up-and-coming company with great potential for growth. Between February 2008 and May 2009, players invested, at Kenner’s urging, approximately $1.4 million into Eufora. However, none of that $1.4 million was actually invested in Eufora; rather, the investment money was diverted to bank accounts that Kenner and Constantine controlled, and was used to cover the costs of Kenner and Constantine’s personal mortgages, credit card bills, travel costs, jewelry, and other expenses. In December 2009, Kenner and Constantine fraudulently convinced an Eastern District of New York resident to invest another $200,000 in Eufora, the vast majority of which was later diverted to a Constantine-controlled account unrelated to Eufora. In total, investors lost more than $1.5 million as a result of the Eufora scheme.
The Global Settlement Fund Scheme
In May 2009 through February 2010, Kenner and Constantine persuaded NHL players to give approximately $4.1 million to fund an attorney’s escrow account, termed the Global Settlement Fund, or “GSF,” which was to be used to finance litigation related to Mexican land deals. However, only a small fraction of the players’ contributions to the GSF were used for litigation; rather, the vast majority of the money was allegedly transferred into bank accounts controlled by Constantine, and significant portions of the money were used by Kenner and Constantine for purposes unrelated to the GSF, including funding Kenner’s personal investment in a tequila company in Mexico, funding litigation in Florida related to a race car company owned by Constantine, and funding the transfer of Constantine’s Arizona home. The players lost more than $1 million as a result of this scheme.
The Sag Harbor Scheme
In a separate scheme, Kenner acquired a 25% interest in real property in Sag Harbor, New York, without using any of his own money. To achieve this result, Kenner took $395,000 from a player’s line of credit, without that player’s knowledge or permission. Kenner also convinced another player to pay $375,000 for a 50% interest, when Kenner only gave him a 25% interest and pocketed the other half of the money. In early 2010, the investors realized Kenner had not contributed any of his own money, and they sold the property at a loss. Kenner has filed a civil lawsuit in Arizona against one of the investors in connection with the Sag Harbor property.
“As alleged, Phillip Kenner spun a web of lies, deceit and broken promises that stretched from Hawaii to Mexico to the East End of Long Island. Kenner used his school connections to build a client list of NHL players. Once he gained their trust he promptly betrayed it by steering them to fraudulent investment schemes that enriched himself and Constantine to the tune of millions at the players’ expense,” stated United States Attorney Lynch. “We and our law enforcement partners will vigorously pursue and prosecute to the fullest extent those who seek to profit by such fraud.” Ms. Lynch expressed her grateful appreciation to the FBI and IRS for their work on the investigation, and thanked the Scottsdale, Arizona, Police Department for their assistances.
Assistant Director in Charge George Venizelos: “As alleged, Kenner exploited his personal relationship with these players in pursuit of his own lucre. Player after player, time after time he and his partner, Constantine, stole from anyone they could find. This was an elaborate scheme of deception, trickery, and lies that victimized many. The FBI will continue to pursue anyone who believes using others’ savings as their personal piggy bank is acceptable behavior.
“It is not uncommon for investment fraudsters to target a specific group of victims and that group may even include the perpetrator’s own friends and acquaintances,” stated IRS Special Agent-in-Charge Weirauch. “The cooperation between IRS-Criminal Investigation, the U.S. Attorney’s Office, and the FBI should give the investing public confidence that investment fraud schemes will ultimately be uncovered and thoroughly investigated, and that the scammers will be prosecuted. Nevertheless, always take care when entrusting money to others, including to investment professionals whom you already know.”
The charges in the indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty. If convicted the defendants face maximum sentences of 20 years.
The criminal case has been assigned to the Honorable Joseph F. Bianco, United States District Judge for the Eastern District of New York, in Central Islip, New York. The government's case is being prosecuted by Assistant United States Attorneys Carrie Capwell, Demetri Jones and Diane Leonardo.
The Defendants
Name: PHILLIP A. KENNER
Age: 43
Residence: Scottsdale, ArizonaName: TOMMY C. CONSTANTINE, a/k/a “Tommy C. Hormovitis”
Age: 47
Residence: Scottsdale, ArizonaE.D.N.Y. Docket No. 13-CR-607(JFB)