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30 October 2013
Father, Son Convicted of Bank Fraud and Money LaunderingRead the Press Release
PENSACOLA, FLORIDA – United States Attorney Pamela C. Marsh announced today that Gary Wayne Thomas, 64, of Daphne, Alabama, and Brian Keith Thomas, 40, of Birmingham, Alabama, both former residents of Destin, Florida, have been convicted for their involvement in a bank fraud and money laundering scheme. Both men were charged with conspiracy to structure cash withdrawals and structuring cash withdrawals to avoid the Currency Transaction Reporting (CTR) requirement, conspiring to commit bank fraud, and conspiracy to commit money laundering. Gary Thomas was also charged with money laundering.
Brian Thomas, the son, went to trial during the week of July 22, 2013, before Chief U.S. District Judge M. Casey Rodgers and was convicted of all counts. Brian Thomas is scheduled to be sentenced on November 15, 2013, at 1:00 p.m. by Judge Rodgers. The father, Gary Thomas, pled guilty to all charges today and is scheduled to be sentenced on January 22, 2014, at 9 a.m. by Judge Rodgers.
The evidence showed that between January 1, 2008, and November 1, 2008, Gary Thomas and Brian Thomas caused approximately $4,550,000 to be deposited into their domestic bank accounts and then wired to offshore bank accounts in the Cayman Islands and Belize. Shortly thereafter, Gary Thomas stopped making payments on the loans he and his various entities had obtained from New South Federal Savings Bank, now known as Beal Bank. The total amount of the loans was approximately $56 million. In the summer of 2009, the bank filed civil suits against Gary Thomas on these loans.
In a three-year period between 2010 and 2013, Gary Thomas wired approximately $2,150,000 from the offshore banks into five accounts in Destin banks that Brian Thomas opened as well as accounts opened by others. Thereafter, the father and son conspired to structure withdrawals of cash under $10,000 to avoid the CTR requirement and to hide Gary Thomas’s interest in the funds from his creditor bank. The structured withdrawals were done on roughly 194 occasions and totaled more than $1.6 million.Gary Thomas used some of these funds to purchase five airplanes, numerous vehicles, and homes in Destin, Florida, and Fairhope, Alabama. Thus far, the government has successfully forfeited the five airplanes, approximately $387,413 in cash, which represents the proceeds of the sale of the home in Fairhope, Alabama, and a $60,000 Hyundai Equus. A superseding indictment, returned in May of this year, also identified $1,624,648 in cash as being subject to criminal forfeiture.
Gary Thomas became a fugitive from justice after the superseding indictment was returned. As a result, an additional indictment was returned against Gary Thomas charging him with failure to appear. While Brian Thomas was in court on July 22nd, the United States Marshals Service captured Gary Thomas on Palafox Street in Pensacola, in the now forfeited Hyundai Equus. When Gary Thomas was apprehended, he was in possession of a loaded Smith and Wesson .38 caliber revolver that he obtained in Tallassee, Alabama, while he was a fugitive. A third indictment was returned against Gary Thomas charging him with possession of a firearm and ammunition by a fugitive from justice and transportation of a firearm and ammunition by a person under indictment.
On the original case, each defendant faces maximum penalties of five years in prison for the structuring conspiracy, 10 years for each count of structuring, 30 years for conspiracy to commit bank fraud, and 20 years for the conspiracy to commit money laundering. Gary Thomas also faces a maximum penalty of 20 years in prison for the money laundering count in the original case. For his failure to appear, Gary Thomas faces up to 10 years in prison consecutive to any sentence he receives in the original case. For the third case, the firearm charges, Gary Thomas faces up to 10 years on each count.
The charges are the result of an investigation by the Internal Revenue Service – Criminal Investigation with the assistance of the United States Marshals Service and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
This case was prosecuted by Assistant U.S. Attorney Tiffany Eggers.
False Bomb Threats at Dededo Mall Result in Federal ChargesRead the Press Release
GUAM –ALICIA A.G. LIMTIACO, United States Attorney for the Districts of Guam and the Northern Mariana Islands, announced the filing on October 30, 2013, of federal criminal charges against MICHAEL SAN NICOLAS SANTOS stemming from recent bomb threats directed at the Dededo Mall.
The federal criminal complaint (a copy of which is attached) alleges that on three occasion – September 26, 2013, October 10, 2013, and October 29, 2013 – SANTOS, using a cellular phone, called 911 and falsely reported a bomb threat to the Dededo Mall located in Dededo, Guam. On each of those dates, SANTOS was scheduled to appear as a defendant in a small claims case pending in the Superior Court of Guam, Northern Court Satellite, which is located in the Dededo Mall. Each of the phone calls was made shortly before SANTOS’ scheduled court appearance and caused the evacuation of the court and other occupants of the Dededo Mall, and the continuance of SANTOS’ hearing and all court cases. Santos was arrested on October 29, 2013, shortly after the most recent bomb threat.
The complaint charges three counts of violating Title 18, United States Code, Section 844(e). Under that statute, it is a federal criminal offense to willfully make a threat or maliciously convey false information, through the use of a telephone, an instrument of interstate or foreign commerce, concerning an alleged attempt being made to unlawfully damage or destroy a building by means of an explosive. Each violation of the statute carries a maximum potential sentence of ten years in federal prison and a $250,000 fine.
The defendant made his initial appearance before U.S. Magistrate Judge Joaquin V.E. Manibusan, Jr. on October 30, 2013, at 10:00 am. The Court set a preliminary examination hearing for November 13, 2013, at 2:30 pm, and remanded the defendant to the custody of the U.S. Marshals Service.The investigation was conducted by the Federal Bureau of Investigation, the Guam Police Department, E911 personnel, the Guam Fire Department, and the Joint Terrorism Task Force. The case is being prosecuted by Assistant United States Attorney Marivic David.
The charges are merely accusations and the defendant is presumed innocent until and unless proven guilty.
Ex-Captain from Murray County Sheriff's DepartmentSentenced to Federal PrisonRead the Press Release
ROME, Ga. - Michael Henderson, a former Captain with Murray County Sheriff’s Office, has been sentenced to 12 months and one day in prison for obstructing a public corruption investigation.
“By lying to his fellow law enforcement officers, Mr. Henderson obstructed a public corruption investigation,” said United States Attorney Sally Quillian Yates. “But, in addition to violating the law, Mr. Henderson also violated the trust given to him by Murray County’s citizen.”
Mark F. Giuliano, Special Agent in Charge, FBI Atlanta Field Office, stated: “Today’s sentencing of former Captain Henderson marks the end of an otherwise successful and promising career in law enforcement with the Murray County Sheriff’s Office. Actions that betray an officer’s sworn oath and the overall public trust bestowed upon them cannot be tolerated. With today’s sentencing, former Captain Henderson is being held accountable for those actions.”
According to United States Attorney Yates, the charges and other information presented in court: In April 2012, a female citizen of Murray County, Ga., met with then-Chief Magistrate Judge Bryant Cochran regarding a legal matter. The citizen claimed that during that meeting, Mr. Cochran made inappropriate sexual overtures towards her. Following the complaint, Mr. Cochran called several local police officers to pass along a “tip” that the citizen carried drugs in her white Dodge vehicle.
Sometime in mid-July 2012, Mr. Cochran provided then-Captain Henderson with the tip that the citizen carried drugs in her white Dodge vehicle. After receiving the tip, Henderson provided the tip to, and discussed the tip with, other members of the Murray County Sheriff’s Office.
On August 14, 2012, Henderson and separately-convicted former Deputy Sheriff Joshua L. Greeson participated in a traffic stop of the white Dodge car. During the stop, Greeson found methamphetamine in a metal tin hidden under the wheel well of the car. After finding the drugs, Henderson and Greeson arrested the female citizen and another occupant of the vehicle.
Shortly thereafter, the Georgia Bureau of Investigation (GBI) received information that the drugs had been planted on the vehicle by another individual, in an attempt to falsely implicate the female citizen. As a result, the state drug charges against the citizen were dismissed.
On August 22, 2012, agents from the GBI interviewed Henderson in connection with a public corruption investigation. During the interview, Henderson falsely stated to the GBI agents that he had never told any other members of the Murray County Sheriff’s Office that he had received a tip that the white Dodge was allegedly carrying drugs.
On August 31, 2012, Henderson was fired from the Murray County Sheriff’s Office.
On March 27, 2013, Henderson, 41, of Murray County, Ga., pleaded guilty to tampering with a witness by lying to the GBI agents. United States District Judge Harold L. Murphy sentenced Henderson to 12 months and one day in prison to be followed by one year of supervised release.
This case was investigated by the Federal Bureau of Investigation and the Georgia Bureau of Investigation.
Assistant United States Attorneys Jeffrey W. Davis and Michael Herskowitz prosecuted the case.For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the home page for the U.S. Attorney's Office for the Northern District of Georgia is www.justice.gov/usao/gan.
Donald Leroy Rickards Sentenced in U.S. District CourtRead the Press Release
The United States Attorney's Office announced that during a federal court session in Missoula, on October 30, 2013, before Chief U.S. District Judge Dana L. Christensen, DONALD LEROY RICKARDS, a 49-year-old resident of Kelson, Washington, was sentenced to a term of:
- ison: 48 months
- ecial Assessment: $100
- pervised Release: 5 years
RICKARDS was sentenced in connection with his guilty plea to conspiracy to distribute methamphetamine.
In an Offer of Proof filed by Assistant U.S. Attorney Tara J. Elliott, the government stated it would have proved at trial the following:
On October 28, 2011, during the execution of a Montana state search warrant, a Montana Highway Patrol Trooper and a Special Agent with the DEA seized $175,060 and approximately one half pound of methamphetamine from a concealed aftermarket compartment of a Toyota truck driven by Sylvia Canales-Pierson. RICKARDS was a passenger in the vehicle. The drugs were later tested by the DEA laboratory which indicated that they contained well over 50 grams of pure methamphetamine.
The agent detained Canales-Pierson and her sister, Maria Dolores Ramsdell, after they attempted to retrieve the truck from the Montana Highway Patrol. When interviewed, Canales-Pierson indicated that, under the direction of her niece, she had been transporting bulk currency and/or methamphetamine about every two weeks since approximately October of 2010 between Kelso, Washington; Minneapolis, Minnesota; and San Jose, California. Canales-Pierson stated that her niece had made arrangements on this most recent trip for her to take the Toyota truck. Canales-Pierson stated that her niece paid $7,000 on average to her for making each trip, that her boyfriend RICKARDS had traveled with her during a majority of the trips to keep her company and to share the driving, and that Canales-Pierson paid RICKARDS about $2,000 for taking the trips with her. Canales-Pierson stated that she had taken her first trip in October of 2010 with her sister, Ramsdell, who had made prior trips at Canales-Pierson(s niece(s direction from Kelso, Washington, to Minneapolis, Minnesota, then to San Jose, California, back to Minneapolis, and then back to Kelso.
When interviewed, Ramsdell provided statements that were consistent with Canales-Pierson's statement, confirming her own involvement in and knowledge of the transportation of methamphetamine and/or bulk currency at the direction of Canales-Pierson's niece.
RICKARDS also made a statement which was consistent with Canales-Pierson's statement and confirmed his involvement in and knowledge of the transportation of methamphetamine and/or bulk currency at the direction of the niece.
Ramsdell and Canales-Pierson pled guilty to federal charges.
Because there is no parole in the federal system, the "truth in sentencing" guidelines mandate that he will likely serve all of the time imposed by the court. In the federal system, he does have the opportunity to earn a sentence reduction for "good behavior." However, this reduction will not exceed 15% of the overall sentence.
The investigation was conducted by the Drug Enforcement Administration.
Court Employee Pleads Guilty to $185,000 Scheme to Cheat Health Insurance ProgramRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that an employee of the Kansas City, Mo., Municipal Court pleaded guilty in federal court today to stealing more than $185,000 from the city’s health insurance provider, along with hundreds of other public employees, by falsely claiming to have run marathons and competed in other athletic events for cash incentives.
Crystal Burgin-Woods, 43, an employee of the municipal court, pleaded guilty before U.S. District Judge Gary A. Fenner to one count of wire fraud.
By pleading guilty today, Burgin-Woods admitted that she made fraudulent submissions to the city’s health insurance program on behalf of 383 employees, resulting in the issuance of 939 gift cards worth a total of $185,665.
Burgin-Woods received health insurance coverage from Blue Cross/Blue Shield of Kansas City. She was therefore eligible to participate in a wellness program called “Points to Blue.” The program offered gift cards to Burgin-Woods and other insured employees based upon entries made to the Points to Blue Web site, where they could log various exercise programs and diet programs. Every 1,000 “points” earned by an employee translated to $1 towards a gift card, up to a maximum of $250 annually. More strenuous exercises earned more points.
Burgin-Woods and other employees submitted materially false entries to the Points to Blue Web site, purporting to have completed extremely strenuous activities in order to fraudulently obtain the maximum gift card of $250. To make even more money in this scheme, Burgin-Woods and others submitted materially false entries for other employees and their eligible dependents, in exchange for receiving a portion of the fraudulent gift card proceeds.
Among the fraudulent submissions that Burgin-Woods made to Points to Blue were claims that a 3-year-old child had completed four triathlons, three marathons, two duathlons and three half marathons.
Burgin-Woods is among six employees of the city of Kansas City, Mo., who have pleaded guilty to their roles in the wire fraud scheme.
Matt Tholen, 30, an emergency medical technician, admitted that he made fraudulent Points to Blue submissions on behalf of 62 employees, resulting in 144 gift cards worth a total of $17,600. Tholen was sentenced on Sept. 5, 2013, to three years of probation and ordered to pay $17,600 in restitution.
Matt Stivers, 42, an employee of the city’s information technologies department, admitted that he made fraudulent Points to Blue submissions on behalf of 80 employees, resulting in 248 gift cards worth a total of $39,070.
Kim Blair, 36, an employee of the city’s parks and recreation department, admitted that she made fraudulent Points to Blue submissions on behalf of 83 employees, resulting in 238 gift cards worth a total of $30,485.
Sylvia Sims, 47, an employee of the city’s parks and recreation department, admitted that she made fraudulent Points to Blue submissions on behalf of 28 employees, resulting in 90 gift cards worth a total of $8,925.
Michael King, 31, an employee of the city’s water department, admitted that he made fraudulent Points to Blue submissions on behalf of 51 employees, resulting in 79 gift cards worth a total of $12,745.
As a result of the scheme, 1,253 fraudulent gift cards were issued, totaling $310,960.
Under federal statutes, each of the defendants is subject to a sentence of up to 20 years in federal prison without parole, plus a fine up to $250,000. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney John E. Cowles. It was investigated by the U.S. Postal Inspection Service Task Force, U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI) and the Overland Park, Kan., Police Department.Colorado Man Pleads Guilty to Defrauding Elderly VictimRead the Press Release
DENVER – Akihiko Siegfried, age 54, formerly of Denver, CO, pled guilty before U.S. District Court Judge Philip A. Brimmer late Monday to one count of mail fraud and one count of money laundering, federal law enforcement authorities announced. Siegfried, who is currently in custody, is scheduled to be sentenced by Judge Brimmer on March 10, 2014. Siegfried was indicted by a federal grand jury in Denver on June 17, 2013.
According to the facts contained in the indictment as well as the stipulated facts contained in the plea agreement, in January of 2008, Siegfried knocked on the door of the elderly victim’s residence and when the door opened Siegfried pretended to be distraught and was crying. Siegfried falsely told the victim that Siegfried’s parents had just died in a car crash and that he had no money and no family to turn to for help. Siegfried asked to borrow money. The victim was then an 89-year-old widower of Japanese descent with little family, asked Siegfried if he was Japanese which he replied that he was. He felt sorry for Siegfried and, in part because of their shared Japanese heritage, decided to help Siegfried.
Siegfried borrowed from the victim several times and in the middle of 2008 falsely told the victim he would inherit substantial money as a result of his parents’ death, but that it would be tied up in probate for some time and he needed money for paying the associated fees and taxes. In fact, Siegfried’s father died in the 1990s, his mother died in 2002, and there was never any inheritance held up in probate; however, from mid-2008 through March of 2013 Siegfried repeatedly falsely told the victim the inheritance was held up in probate.
From March of 2009 through March of 2013, Siegfried frequently spent time as an inmate in the Colorado Department of Corrections. When he was in jail during that time frame, he repeatedly called and sent letters through the mail asking for money, directing the victim to deposit and wire transfer money to Siegfried’s inmate account with the Colorado Department of Corrections. Siegfried told the victim he needed the money because he was required to pay for his diabetes medicine while he was in jail and because he needed to pay more probate fees and taxes for his purported inheritance. In fact, Siegfried has never been diagnosed with diabetes, has never taken medication for diabetes, and inmates of the Colorado Department of Corrections are not required to pay for medicine prescribed to them while they are in custody.
During the entire scheme, Siegfried told the victim he would repay all of the money Siegfried received his inheritance. Siegfried agrees that, from January 2008 through March 2013, as a result of the scheme, the victim provided at least $400,001 to him and that his sentence will include an order of restitution of at least $400,001 and up to $560,861.
In October of 2012, when Siegfried was released from prison, he received a check payable to himself in the amount of $49,655.30 from the State of Colorado, Department of Corrections. At least $10,000 of this money was proceeds of the fraud scheme involving the elderly victim.
“All too often, con men prey on our senior citizens and steal their life savings,” said U.S. Attorney John Walsh. “Protecting the public – and particularly seniors – from fraud is one of the top priorities of this office. The defendant in this case will face the full weight of the law at sentencing.”
“Individuals who commit crimes against the vulnerable and elderly with this degree of trickery, fraud and deceit will to be punished to the fullest extent of the law,” said Stephen Boyd, Special Agent in Charge for IRS Criminal Investigation, Denver Field Office.
“The FBI will continue to aggressively pursue con-artists who prey upon the elderly and defraud innocent victims of their life’s savings,” said FBI Denver Special Agent in Charge Thomas Ravenelle.
Mail fraud carries a penalty of not more than 20 years in federal prison, and a fine of up to $250,000 per count. Money Laundering carries a penalty of not more than 10 years in federal prison, and a fine of up to $250,000 per count.
This case was investigated by agents with IRS Criminal Investigation, Federal Bureau of Investigation (FBI), and the Colorado Department of Correction. The case is being prosecuted by Assistant U.S. Attorney Pegeen Rhyne. AUSA James Russell is handling the asset forfeiture.
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Chandler Business Owner Sentenced to Prison for Committing Bank FraudRead the Press Release
PHOENIX - On Oct. 28, 2013, Gjergj Kol Mihilli, 61, of Gilbert, Ariz., was sentenced to 51 months in prison and ordered to pay $302,420.64 by U. S. District Judge G. Murray Snow. The defendant previously pled guilty to bank fraud and aggravated identity theft for concocting the following scheme:
Mihilli owned and operated the Mama Mia Panaderia store in Chandler, Ariz. Between May 2010 and June 2011, the Mihilli engaged in a check-kiting type scheme by creating thousands of fraudulent money orders for deposit into the Mama Mia Panaderia business account. The money orders were fraudulent and worthless because they were created without the receipt of actual cash from third parties and were made payable to fictitious payees. For many of the fraudulent money orders, Mihilli used the names of Hollywood celebrities, politicians, and professional sports figures. He routinely caused the fraudulent money orders to be deposited into his account for the purpose of artificially inflating the balance. During the life of the scheme, Mihilli created and deposited over 10,000 fraudulent money orders with an aggregate value of over $10,000,000.
The investigation in this case was conducted by the U.S. Immigration and Customs Enforcement (ICE) Department of Homeland Security, the U.S. Internal Revenue Service, and the SABR Task Force. The prosecution was handled by Assistant United States Attorney Raymond K. Woo, District of Arizona, Phoenix.CASE NUMBER: CR-12-1794-PHX-GMS
RELEASE NUMBER: 2013-083_MihilliFor more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az
Camden, N.J., Man Admits That He Exchanged More Than $2.5 Million in Snap/Food Stamp Benefits for CashRead the Press Release
CAMDEN, N.J. – A Camden man today admitted that he stole more than $2.5 million dollars from the U.S. Government through a food stamps scheme, U.S. Attorney Paul J. Fishman announced.
Alexander D. Vargas, 34, pleaded guilty today before U.S. District Court Judge Joseph H. Rodriguez to an information charging him with stealing U.S. Government monies during a scheme in which he purchased Supplemental Nutrition and Assistance Program (SNAP) benefits (formerly known as food stamps) for approximately 50 cents on the dollar at the local grocery store he managed in Camden. Vargas was detained after his arrest on May 16, 2013, and his detention was continued.
According to documents filed in this case and statements made in court:
From January 2012 through December 2012 Vargas managed Eddies Grocery, a small store in Camden that was authorized to accept SNAP benefits. The program is administered by the U.S. Department of Agriculture. Retail food stores approved for participation in SNAP may sell food in exchange for food stamp benefits. However, they may not exchange food stamp benefits for cash.
Every food stamp recipient receives an Electronic Benefits Transfer (EBT) card, similar to a debit card, with which to make purchases. Every retailer authorized to accept food stamp benefits has an EBT terminal. Food purchases are made by swiping the card at the terminal. After the customer enters a secret Personal Identification Number (PIN), the EBT terminal verifies the PIN, determines whether the customer’s account balance is sufficient to cover the proposed transaction and informs the retailer whether the transaction should be authorized or denied. If the transaction is authorized, the amount of the purchase is then deducted electronically from the food stamp benefits reserved for the customer, and the amount is credited to the retailer’s designated bank account.
Eddies Grocery designated a bank account at Sovereign Bank to receive the reimbursements for SNAP benefits. Bank records listed Vargas and another individual as managers of Eddies Grocery.Eddies Grocery was first approved to participate in the SNAP program in 2007. In his application to participate in SNAP, the owner estimated that Eddies Grocery would generate receipts of approximately $280,000 annually, or an average of $23,333 per month. The volume of SNAP benefits reimbursement received at Eddies Grocery substantially exceeded those estimates, indicating large scale food stamp fraud. From February 2012 through November 2012 the SNAP redemptions were more than $2.8 million greater than the estimates.
In addition to the high volume of SNAP benefits redemptions, law enforcement agents verified the fraudulent exchange of SNAP benefits for cash through the use of a cooperating witness and an undercover law enforcement officer. During a series of five transactions from June 7, 2012, through Oct. 4, 2012, law enforcement agents directed a cooperating witness and an undercover law enforcement officer to go into Eddies Grocery and exchange $1,359.75 in SNAP benefits for $650 cash.
A review of the bank records for the Eddies Grocery account showed total cash withdrawals of $3,109,776 for the 2012 calendar year. Records from Feb. 15, 2012, (when defendant Alexander Vargas was added as an authorized cosigner on the account) through December 2012, showed $2,548,510 in cash withdrawals – of which Vargas’ name was on 40 withdrawals totaling $1,869,266.
Vargas faces a maximum potential penalty of 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Under the terms of the plea agreement, Vargas has agreed to forfeit $22,273 seized from him on the date of his arrest, and has also agreed to the entry of a forfeiture money judgment for $2,981,642. Sentencing is scheduled for Feb. 5, 2014.
U.S. Attorney Fishman credited special agents of the U.S. Department of Agriculture, Office of Inspector General, under the direction of Special Agent in Charge William G. Squires Jr. in New York; the Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Andrew McLees; and IRS – Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Diana Carrig of the U.S. Attorney’s Office in Camden.
13-423
Defense counsel: Jeffrey C. Zucker Esq., Camden, N.J.
Vargas Information
Brentwood Businessman Sentenced to Twenty-Four Months in Prison for Bank FraudRead the Press Release
B Joseph D. Wheliss, Jr., 44, of Brentwood, Tennessee, former owner and operator of National Embroidery Works, Inc., was sentenced on October 25, 2013, by Chief United States District Court Judge William J. Haynes, Jr. to twenty-four months in prison, to be followed by a five year term of supervised release and an additional seventeen months in a halfway house, announced David Rivera, Acting U.S. Attorney for the Middle District of Tennessee. Wheliss was also ordered to pay approximately $1.9 million in restitution to Pinnacle National Bank and $2.85 million in restitution to Cincinnati Insurance Company.
Wheliss pleaded guilty on October 5, 2012, to a single count of bank fraud, arising from a fraudulent loan scheme. Between May 2005 and January 2011, Wheliss sought and received multiple loans from Pinnacle National Bank totaling more than $4 million. The majority of the loans were commercial loans to Wheliss' business, National Embroidery Works, Inc. To collateralize each of these loans, Wheliss pledged his purported interest in a trust fund which he knew was non-existent.
During the five year period of the scheme, Wheliss regularly presented forged documents to Pinnacle National Bank purporting to show the balance of the fictitious trust fund growing from approximately $2.7million to over $19 million. As a result of this fraudulent scheme, Wheliss obtained over $4.7 million in loans from Pinnacle National Bank, which he used to fund his living expenses and lavish lifestyle.
The case was investigated by the FBI and the Special Inspector General for the Troubled Asset Relief Program. The United States was represented by Assistant U.S. Attorney Sandra G. Moses.Boonton Township, N.J., Man Arrested, Charged with Distributing Sexually Explicit Images of ChildrenRead the Press Release
NEWARK, N.J. – Special agents of U.S. Immigration and Customs Enforcement, Homeland Security Investigations (ICE HSI)and officers of the Boonton Township Police Department arrested a Boonton Township, N.J., man at his home this morning on a charge that he distributed sexually explicit images of children from his home computer, U.S. Attorney Paul J. Fishman announced.
Lucas J. Reinmann, 34, is charged by complaint with one count of distributing images of child pornography over the Internet. He appeared this afternoon before U.S. Magistrate Judge Joseph A. Dickson in Newark federal court and was released on a $150,000 bond.
According to the criminal complaint unsealed today:
On June 8, 2013, Reinmann distributed videos and images depicting child pornography on the Internet via peer-to-peer file sharing software, which allowed others access to the material in shared directories. An undercover agent discovered and downloaded the images and videos, and the username and IP address of the sharer was traced back to Reinmann’s residence.
ICE HSI special agents, working with the Morris County Prosecutor’s Office (MCPO) and the Boonton Township Police Department, executed a search warrant at Reinmann’s home on July 15, 2013, and discovered computer equipment allegedly containing multiple images of child pornography.
The distribution count carries a minimum penalty of five years in prison and a maximum potential penalty of 20 years in prison and a $250,000 fine.
U.S. Attorney Fishman credited special agents of ICE HSI, under the direction of Special Agent in Charge Andrew M. McLees in Newark; the MCPO, under the direction of Acting Prosecutor Fredric M. Knapp; and the Boonton Township Police Department, under the direction of Chief Paul C. Fortunato, with the investigation leading to today’s arrest.
The government is represented by Assistant U.S. Attorney Sara F. Merin of the U.S. Attorney’s Office General Crimes Unit in Newark.
The charge and allegations contained in the complaint are merely accusations, and the defendant is considered innocent unless and until proven guilty.
13-422Defense counsel: Edward V. Sapone Esq., New York
Reinmann Complaint
Big Spring, Texas, Man Sentenced to 240 Months in Federal Prison on Federal Child Pornography ConvictionRead the Press Release
ABILENE, Texas — Aaron Charles Lustfeldt, 27, of Big Spring, Texas, was sentenced this morning, by U.S. District Judge Jorge A. Solis, to 240 months in federal prison, following his guilty plea in June 2013 to one count of receipt of child pornography, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
According to documents filed in the case, on February 1, 2013, the Big Spring Police Department was dispatched to Comanche Trail Park in Big Spring regarding a male exposing himself to children in the play area. Officers located Lustfeldt, who admitted being in the park, but denied doing anything inappropriate, stating that he was not supposed to be at the park because he was a registered sex offender. Later, as part of their investigation, officers located images of child pornography on his cell phone, and Lustfeldt eventually admitted that he had received and downloaded images from the Internet onto his cell phone.
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 case was investigated by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and the Big Spring Police Department. Assistant U.S. Attorney Justin Cunningham, of the U.S. Attorney’s Office in Lubbock, Texas, prosecuted.
Belgian Man Charged with Attempting to Illegally Export Aluminum Tubes to Malaysian Front for Individual in IranRead the Press Release
CHICAGO — A Belgian businessman is scheduled to be arraigned tomorrow on federal charges alleging that he violated U.S. laws by attempting to export aluminum tubes that were controlled for nuclear nonproliferation purposes from a company in Schaumburg, through Belgium, to a company in Kuala Lumpur, Malaysia, without obtaining a license from the U.S. Commerce Department, federal law enforcement officials announced today. The case follows a lengthy undercover investigation in which the Schaumburg company, which was cooperating with law enforcement, actually shipped different non-controlled aluminum tubes to the defendant’s business in Belgium before they were allegedly illegally transshipped to Malaysia.
Court documents allege that the Malaysian business is a front company operated by an individual who is located at times in Iran.
The case involves 7075 T6 aluminum tubing with an outside diameter of 4.125 inches and an ultimate tensile strength of 572 MPa (megapascals), which is used in the aerospace industry, among other applications. As a controlled material, a license was required from the Commerce Department’s Bureau of Industry and Security to export the 7075 aluminum from the U.S. to Malaysia, but not to Belgium.
The defendant, NICHOLAS KAIGA, 36, of Brussels and London, was charged with one count of violating the International Emergency Economic Powers Act (IEEPA) and two counts of making false statements on U.S. export forms in a three-count indictment returned by a federal grand jury last Thursday. Kaiga has been in federal custody since he was arrested on June 25 in New York City, approximately a week after he arrived there. A criminal complaint filed at the time of his arrest was unsealed when he was indicted last week.
Kaiga will be arraigned at 11 a.m. tomorrow before U.S. Magistrate Judge Maria Valdez in U.S. District Court in Chicago.
The charges were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Gary Hartwig, Special Agent-in-Charge of Homeland Security Investigations in Chicago; Robert J. Shields, Jr., Acting Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; and Ronald B. Orzel, Special Agent-in-Charge of the U.S. Department of Commerce, Bureau of Industry and Security, Office of Export Enforcement, Chicago Field Office. The Justice Department’s National Security Division is providing assistance in the case.
According to the complaint affidavit and the indictment, the Schaumburg company, identified as “Company A” in court documents began cooperating with law enforcement in December 2007. The cooperation began after a person identified as “Individual A,” who was at times located in Iran, attempted to purchase 7075 aluminum from Company A, to be shipped to a company in the United Arab Emirates, but was denied an export license. In late 2009, an undercover agent began posing as an employee of Company A.
Between November 2009 and February 2012, the indictment alleges that Kaiga, who was managing director of a Belgian company, Industrial Metals and Commodities, attempted to export 7075 aluminum from Company A to Company B in Malaysia without an export license. The complaint affidavit alleges that Company B was a front for Individual A in Iran. The false statements charges allege that Kaiga lied on Commerce Department export declaration forms, which stated that the ultimate destination and recipient of the 7075 aluminum were in Belgium.
In November 2011, material that was purported to be 7075 aluminum, but was actually substituted with a different aluminum by Company A in cooperation with law enforcement, was picked up from Company A by a freight forwarding company designated by Kaiga’s Belgian company. The material arrived in the Belgian port of Antwerp on Dec. 1, 2011, and two months later it was shipped by a freight forwarding company to Individual A’s front company in Malaysia.
Violating IEEPA carries a maximum penalty of 20 years in prison and a $1 million fine, while making false statements to government agencies carries a maximum penalty of five years in prison and a $250,000 fine. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines. The government is being represented by Assistant U.S. Attorneys Raj Laud and Nancy DePodesta.
An indictment contains merely charges and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Indictment
ComplaintBank Robber SentencedRead the Press Release
A St. Louis man, Walter W. Wallace, Jr., 26, convicted of Armed Bank Robbery of the Caseyville, Ill., branch of the First Collinsville Bank, and Interference with Commerce by Armed Robbery of the Granite City location of Advance America, was sentenced to 151 months in federal prison on October 30, 2013, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today. The court ordered 99 months of the sentence to run consecutively to a 141 month sentence imposed in the Eastern District of Missouri for a bank robbery Wallace committed there, so Wallace will serve a total sentence of 20 years in federal prison for the robbery spree which began on March 1, 2011, and ended on April 30, 2011 (there is no parole in the federal system).
Following release from imprisonment, Wallace will serve 3 years supervised release. Wallace was also ordered to make restitution for the amount stolen, pay a fine, and pay a $200 special assessment. Wallace pleaded guilty to the charges on August 2, 2013. Wallace has been in custody since his arrest on May 3, 2011.
Attorney General Holder Announces $6.7 Million to Improve Legal Defense Services for the PoorRead the Press Release
Attorney General Eric Holder today announced a total of $6.7 million in grants to state and local criminal and civil legal services organizations across the country that provide legal defense services for the poor. These grants from the Office of Justice Programs (OJP) are part of the Justice Department’s continuing efforts to improve indigent defense, which is often underfunded and understaffed, and to support training, mentoring, technical assistance, leadership development and research to enhance the effectiveness of adult, juvenile and tribal indigent defense practices.
“Everyone accused of a serious crime has the right to legal representation – even if she or he cannot afford it,” said Attorney General Holder. “In recent years, the Department of Justice has made a commitment to improving the delivery, quality and availability of legal services for everyone in our country, including the very poor. Today's significant grant awards will help ensure America’s criminal justice system is fair for every defendant, regardless of wealth.”
“These awards, in conjunction with other efforts we’re making to strengthen indigent defense, will fortify our public defender system and help us to meet our constitutional and moral obligation to administer a justice system that matches its demands for accountability with a commitment to fair, due process for poor defendants,” said Associate Attorney General Tony West.
The FY 2013 grants, which promote cost-effective innovations to improve indigent defense, are administered by OJP’s Bureau of Justice Assistance (BJA), National Institute of Justice (NIJ) and Office of Juvenile Justice and Delinquency Prevention (OJJDP).
In FY 2013, BJA awarded a total of $5.4 million. Of this amount, $1 million was awarded to Gideon’s Promise, a nonprofit organization that partners with public defender offices to build a community of attorneys committed to indigent defense reform. The funds will provide 25 new attorneys, including criminal defense lawyers working on tribal lands; establish training and leadership development for public defender trainers and supervisors and a semi-annual leadership summit for chief defenders; and create an advisory council to test measures and indicators showing the outcomes of providing effective counsel for all individuals.
Another $90,000 was awarded to the states of Mississippi, Tennessee and Utah through BJA’s National Training and Technical Assistance Center (NTTAC). Through NTTAC, BJA assists jurisdictions with meeting their constitutional obligation to provide adequate representation to indigent defendants. Services include assessing the effectiveness of indigent defense systems, developing recommendations to ensure adequate and appropriate services are provided consistently throughout the state and determining appropriate measures for evaluating a defender services program.
The Measures for Justice (MFJ) initiative, which will provide a framework for using indicator metrics to evaluate local criminal justice systems against a national standard of excellence, received $50,000. MFJ is conducting a pilot study in Milwaukee to examine the capacity and availability of resources at the local level and to determine where additional resources are needed within the criminal justice system.
Answering Gideon’s Call, a national assistance program to improve the effectiveness of right to counsel services, received $1.8 million of the $5.4 million awarded by BJA. Of the $1.8 million, Seattle University received $450,000 to, in partnership with the Sixth Amendment Center (6AC), provide training and technical assistance to educate policymakers and aid the unfunded, legislatively established Office of the Public Defender in Mississippi and work with the Utah Judicial Council to develop standards assessing indigent defense services to help state legislatures meet their constitutional obligations. Another $891,854 was awarded to the National Association of Criminal Defense Lawyers (NACDL) to train public defenders and assigned counsel by regions to meet specific jurisdictional needs, such as helping them to better manage workloads. The remaining $450,000 went to American University in partnership with the National Legal Aid and Defender Association to conduct a nationwide self-assessment evaluating whether state and local indigent defense providers comply with standards incorporated into the American Bar Association’s Ten Principles, producing the first national empirical assessment of quality of indigent defense services.
Through its Encouraging Innovation: Field Initiated Programs, BJA awarded a total of $619,700 to the San Francisco Public Defender’s Office ($395,231) to create the first local and nationally applicable checklist system to better guide attorneys through key moments in cases, ensuring competent representation and avoiding costly errors, and to NACDL ($224,469) to develop pretrial release manuals for the defense bar and to provide onsite training and distance learning to give attorneys the necessary tools to engage in effective bail advocacy.
The remaining $1.9 million of BJA’s awarded $5.4 million was provided through the Tribal Civil and Criminal Legal Assistance Initiative, designed to improve access to tribal justice systems and strengthen representation of indigent defendants in civil causes of action and in criminal cases under Indian tribes’ jurisdiction. Of the $1.9 million, the Tulalip Foundation received $262,943 to provide regional, direct legal services to tribal members and $121,779 to create a Criminal Conflict Counsel Program to train defense counsel and provide services to resolve cases. The Native American Rights Fund received $715,944 to continue its partnership with the National American Indian Legal Association and its 25 Indian Legal Services organizations providing civil legal representation to tribes and tribal members, and a second award of $515,940 to provide indigent defense services to tribes and tribal members. The William Mitchell College of Law received $283,394 to provide direct criminal defense services and legal assistance to up to seven tribes.
OJJDP made two FY 2013 awards, totaling more than $1 million, to the National Juvenile Defender Center in the District of Columbia in order to improve juvenile indigent defense across the nation. The first award, in the amount of $400,000, will provide juvenile defense counsel with customized technical assistance, training, and resources for policy development and reform. The second award, in the amount of $695,000, will support the Juvenile Indigent Defense Special Initiative to reduce the overrepresentation of minority youth in the juvenile justice system and to improve access to counsel and quality of representation for youth with unique needs, including lesbian, gay, bisexual and transgender youth and those with disabilities, substance abuse behaviors and language access needs.
In FY 2013, NIJ awarded $334,000 to the RAND Corp. in Pittsburgh, Pa., for an empirical evaluation of the holistic approach to individual defense, which includes the defense attorney as one member of an interdisciplinary team providing comprehensive services to address defendants’ legal and social needs. The study will examine the effect of holistic defense on case outcomes such as plea status, verdict and sentence and disposition length and estimate the effectiveness of the holistic approach for subgroups of offenses or defendants.
More information about the Justice Department’s Access to Justice Initiative, which works to strengthen and improve legal services for disadvantaged groups, is available at www.usdoj.gov/atj.
OJP, 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. More information about OJP can be found at www.ojp.gov.
Amos Patton Named in Nine-Count Indictment Following Shooting at Millington National Guard CenterRead the Press Release
Memphis, TN – Amos Patton, 42, of Cordova, TN was indicted today by a federal grand jury on nine counts related to a shooting at the Tennessee Army National Guard Recruiting Center in Millington, TN, announced U.S. Attorney Edward L. Stanton III; Special Agent in Charge of the Memphis Division of the Federal Bureau of Investigation, A. Todd McCall; and Naval Criminal Investigative Service Special Agent Michael C. Cote.
Patton is charged with four counts of unlawfully attempting to kill Major WJC, Sergeant Major RRM, Lieutenant Colonel HLB, and Sergeant Major CTC while they were in performance of their official duties. Patton is also charged with four counts of assault with a deadly weapon on each of the four individuals, and further charged with one count of using and carrying a firearm during and in relation to a crime of violence.
If convicted, Patton could receive up to 20 years in prison for each charge of unlawfully attempting to kill and up to 20 years for each assault charge. He also could receive a minimum of 10 years for the firearms charge. There is no parole in the federal system. This case is being investigated by the FBI and the NCIS. Assistant U.S. Attorney Fred Godwin is representing the government.
The charges and allegations contained in the indictment are merely accusations, and the defendants are considered innocent unless and until proven guilty.Adams Produce CEO Sentenced to 16 Months in PrisonRead the Press Release
BIRMINGHAM – A federal judge late Tuesday sentenced the former CEO of Adams Produce Company to 16 months in prison for fraud against the company, failure to report a felony against the government and failure to file federal income tax returns, announced U.S. Attorney Joyce White Vance, FBI Special Agent in Charge Richard D. Schwein Jr. and IRS Criminal Investigation Special Agent in Charge Veronica Hyman-Pillot.
SCOTT DAVID GRINSTEAD, 45, chief executive officer of the now-defunct Adams Produce company, pleaded guilty to the charges in April. Grinstead agreed, as part of his plea agreement with the government, to pay $450,000 in restitution to the bankruptcy estate of Adams Produce to benefit the company's employees who lost pay when Adams closed abruptly and filed for bankruptcy in 2012. As part of Grinstead's sentence, U.S. District Judge Karon O. Bowdre ordered him to perform 20 hours of community service.
"This defendant, while CEO of Adams Produce, allowed officers and employees to continue cheating the government on contracts involving military bases and schools while, at the same time, he continued to steal from the company," Vance said. "Prison is deserved punishment for his criminal acts, which harmed the government and his company, but we also are pleased that resolution of this case will bring some compensation to the employees who lost their jobs and did not receive their final paychecks from Adams Produce," she said.
"Financial fraud at this company harmed employees, customers and U.S. taxpayers," Schwein said. "The FBI remains committed to investigating corporate fraud and seeing its perpetrators brought to justice."
"Individuals who earn income should accurately report their income to the IRS," Hyman-Pillot said. "The sentence today should reassure Americans that those individuals who willfully and intentionally violate their known legal duty of filing and paying their fair share of taxes will be prosecuted."
Three other officials of Adams Produce – David Andrew Kirkland, Christopher Alan Pfahl and Stanley Joel Butler II – have been charged and pleaded guilty, and another employee, Michael John O'Brian, was indicted in August in connection with fraud at the Birmingham-based company that had been a leading distributor of fresh fruits and vegetables across the Southeast for decades. Adams Produce was founded as a family-owned business more than 100 years ago. The family sold the company to executives and a private equity firm in 2010.
The federal government, through the Defense Supply Center Philadelphia, was one of Adams' customers. The supply center contracted with Adams Produce to provide fresh fruits and vegetables to military bases, public schools systems, junior colleges and universities. Adams Produce entered into contracts with the government worth millions of dollars, according to court records.
Kirkland, O'Brien, Butler and Pfahl conspired to create false records that reflected a higher purchasing cost for fruits and vegetables from a national distributor than Adams Produce actually paid. The inflated costs were presented to the government, which had agreed to pay a certain amount over Adams cost for produce.
Between Aug. 4, 2011, and Dec. 7, 2011, the Adams' employees and officers conspired to conduct at least 82 transactions with the national distributor that were designed to create false invoices and purchase orders. Through those false invoices submitted to the Defense Supply Center, Adams Produce fraudulently received about $481,000 from the government.
One of the charges Grinstead pleaded guilty to is misprision of a felony for knowing of the fraud that other officers were engaged in and allowing it to continue and end slowly, so as to avoid raising red flags with the government, rather than stopping it immediately and reporting it to authorities.
Grinstead pleaded guilty to wire fraud for wiring hundreds of thousands of dollars from an Adams Produce account to American Express to pay for clothing, jewelry, personal travel for himself and his family, lawn care at his home, and items for a house on Lake Martin.
He pleaded guilty to two counts of failure to file a federal tax return, one for 2009 and one for 2010. According to court records, Grinstead had a gross income of about $748,801 for the 2009 calendar year and willfully failed to file an income tax return with the Internal Revenue Service. In 2010, he received about $1,878,700 in gross income and willfully did not file a return with the IRS.
The FBI and the IRS investigated the case, and Assistant U.S. Attorney George A. Martin Jr. is prosecuting it.
29 October 2013
William Lawrence Barrow Sentenced in U.S. District CourtRead the Press Release
The United States Attorney's Office announced that during a federal court session in Helena, on October 28, 2013, before U.S. District Judge Sam E. Haddon, WILLIAM LAWRENCE BARROW, a 40-year-old resident of Clearfield, Utah, was sentenced to a term of:
- ison: 172 months
- ecial Assessment: $100
- pervised Release: 5 years
BARROW was sentenced in connection with his guilty plea to conspiracy to possess with intent to distribute heroin and methamphetamine.
In an Offer of Proof filed by Assistant U.S. Attorney Jessica T. Fehr, the government stated it would have proved at trial the following:
On January 10, 2013, a Montana Highway Patrol (MHP) Trooper observed a vehicle on Interstate 94 near Glendive that failed to have visible registration tags. The Trooper approached the passenger side window of the vehicle and detected the odor of raw marijuana coming from within the suspect vehicle. The driver of the vehicle was identified as R.B. The passenger of the vehicle was identified as M.C.
The Trooper was given permission to search the vehicle by the registered owner, M.C. During the search, the Trooper discovered a backpack inside the vehicle. M.C. advised the backpack did not belong to him. Likewise, R.B. also denied owning the backpack. In the backpack law enforcement found numerous items of drug paraphernalia such as tin foil, a torch, numerous small plastic baggies, and a locked box. Inside the locked box there were two bags containing powdery substances. One bag field tested positive for heroin and weighed approximately 2 ounces. The second bag field tested positive for methamphetamine and weighted approximately 1.5 ounces.
The investigation revealed that R.B. and M.C. drove from Dickinson, North Dakota, to Billings on January 9, 2013. They stayed at a local motel in Billings and while at the motel, R.B. went to another room and stayed for about 2 hours. R.B. was meeting with his source of supply for methamphetamine and heroin. It was believed the male source of supply was still staying at the motel in Billings. R.B. and M.C. had previously traveled to Billings just before New Years Day, 2013, to pick up more drugs from the same source of supply.
Law enforcement returned to the motel in Billings and discovered the source of supply, BARROW, was still staying at the motel.
Agents obtained a search warrant for the motel room. Just prior to executing the search warrant agents noticed BARROW and the female with him were packing up their car and preparing to leave the motel. Agents detained BARROW and the female passenger until a K9 Officer was able to arrive and conduct an exterior sniff test of the vehicle BARROW was driving. The K9 alerted on the vehicle.
The car and the motel room were searched by law enforcement. Agents found syringes, plastic baggies, two computers, four cellular phones - which contained several text messages between BARROW and R.B. - a leather notebook with drug ledger, a flash drive, and a false bottom Arizona Iced tea can.
BARROW was detained at the Billings DEA Office. Agents seized $2,503.22 from BARROW's person along with approximately three (3) ounces of heroin wrapped in a plastic bag.
Further investigation revealed that BARROW was R.B.'s main drug connection out of Utah. BARROW had historical distributed at least 100 grams of methamphetamine and 100 grams of heroin to R.B. during the course of the conspiracy.
Because there is no parole in the federal system, the "truth in sentencing" guidelines mandate that BARROW will likely serve all of the time imposed by the court. In the federal system, BARROW does have the opportunity to earn a sentence reduction for "good behavior." However, this reduction will not exceed 15% of the overall sentence.
Today's sentencing is a product of diligent work by the very dedicated agents who have been joined together under the banner of Project Safe Bakken. As the work of this team - which includes law enforcement professionals from all branches of local, state, and federal law enforcement - goes forward, the people of Montana and North Dakota can expect more cases from affected communities. That is the mission and commitment of Project Safe Bakken." said U.S. Attorney Michael W. Cotter.
This investigation was a part of Project Safe Bakken, which is a cooperative effort between the Drug Enforcement Administration (DEA), the Federal Bureau of Investigation (FBI), the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), the Bureau of Indian Affairs (BIA), the U.S. Border Patrol, the U.S. Marshal's Service, the Environmental Protection Agency Criminal Investigation Division (EPA-CID), the Department of Homeland Security (DHS), the Montana Division of Criminal Investigation (MDCI), the Montana Highway Patrol, the North Dakota Bureau of Criminal Investigation (BCI), the Billings Police Department, the Yellowstone County Sheriff's Office, and the Idaho State Police.
Wichita Store Owner Pleads GuiltyTo Trafficking Counterfeit Designer GoodsRead the Press Release
WICHITA, KAN. - A woman who owns a retail store in Wichita has pleaded guilty to trafficking in counterfeit designer goods, U.S. Attorney Barry Grissom said today.
Glenda Sue Morgan, 55, Wichita, Kan., pleaded guilty to one count of trafficking in goods bearing counterfeit trademarks. In her plea, she admitted selling the counterfeit goods as “replicas” at her business, The Fabulous Store at 9131 E. 37th North in Wichita. On April 2, 2013, undercover law enforcement officers bought about $500 worth of such items including a “Chanel” bracelet and sunglasses, a “Michael Kors” purse and a “Prada” purse. When investigators served a search warrant they seized 400 replica items with a retail value of about $14,000.
In June 2009, more than $1 million in counterfeit goods was seized by Homeland Security Investigations from the same location. At the time, Morgan forfeited ownership of the items and they were destroyed, but she was not charged criminally.
Sentencing is set for Jan. 17, 2014. She faces a maximum penalty of 10 years in federal prison and a fine up to $2 million. Grissom commended Homeland Security Investigations, the Wichita Police Department and Assistant U.S. Attorney Brent Anderson for their work on the case.Waterbury Man Who Lied to Federal Agents Conducting Tax Fraud Investigation Is SentencedRead the Press Release
Deirdre M. Daly, Acting United States Attorney for the District of Connecticut, announced that JOHN B. MAIA, 73, of Waterbury, was sentenced today by U.S. District Judge Alvin W. Thompson in Hartford to three months of home confinement and one year of probation for lying to federal agents conducting a tax fraud investigation. MAIA was also ordered to perform 200 hours of community service and pay a $1,000 fine.
According to court documents and statements made in court, on April 14, 2010, MAIA, a retired Waterbury Police detective and inspector with the Waterbury State’s Attorney’s Office, submitted to a voluntary interview with special agents of the Internal Revenue Service – Criminal Investigation who were conducting an investigation into fraudulent conduct by Thomas Thorndike and the clients of Thorndike’s tax preparation business, Cornerstone Financial Services. MAIA was a Cornerstone Financial Services client. During the interview, agents asked MAIA if he had overstated deductions for charitable contributions and listed fictitious business expenses on his federal tax returns from 2005 through 2008. MAIA falsely stated that the charitable contributions and business expenses were legitimate and that he had provided supporting documentation for the contributions and expenses to his tax preparer.
On March 22, 2013, MAIA pleaded guilty to one count of making a false statement to federal law enforcement.
Thorndike pleaded guilty to tax offenses in October 2012 and, on March 12, 2013, was sentenced to 72 months of imprisonment.
This matter was investigated by the Internal Revenue Service – Criminal Investigation and the Federal Bureau of Investigation. The case was prosecuted by Assistant U.S. Attorneys Christopher Mattei and Eric Glover.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722 [email protected]Two Men Charged with Swindling Victims of Thousands of Dollars in Advance Fees While Failing to Modify Home LoansRead the Press Release
CHICAGO ― Two men who operated various businesses at multiple Chicago area locations since at least 2009 are facing federal fraud charges for allegedly charging thousands of dollars in advance fees, purportedly to help individuals modify their existing home mortgage loans, but then failing to provide the services they promised. The charges allege that the defendants defrauded a handful of known victims, but federal law enforcement officials believe there could be hundreds of potential victims and are appealing for information from anyone with knowledge of the alleged scheme.
The defendants, EVERETT POPE, also known as “Jonathan Pincuss,” 38, of Bolingbrook, and COLBI ANDRY, aka “Richard Lockwell” and “Rich Ingram,” 38, of Chicago, were each charged with wire fraud in a criminal complaint that was filed last week in U.S. District Court. Both men were released on $10,000 unsecured bonds and have a preliminary hearing set for Nov. 13 before U.S. Magistrate Judge Michael Mason in Federal Court.
The business entities that they allegedly used were: EAC Financial LLC; Emergency Debt Relief Center; Dimond Financial LLC; D Financial; The Andry Group, LLC; Family First Home Solutions LLC; The Law Group; Certified Forensic Loan Auditors, LLC; and Integrity Mortgage and Insurance Co., all of which were located, often at retail business sites, in Chicago or south suburban Monee or Matteson.
Anyone who suspects that he or she might be a victim and has not already received a victim survey from the U.S. Attorney's Office should submit their name and address to [email protected]. Persons without internet access may call a toll-free number ― (866) 364-2621 ― and leave a message with the spelling of their name and an address, and a form will be mailed to them.
According to the complaint, Pope and Andry frequently convinced customers who were not experiencing financial hardship that they were eligible for loan modifications. Then, they demanded up-front fees from victims, usually ranging between $2,000 and $3,000. For many of their victims, loan modifications were never completed or were completed with terms that were less favorable and without the customers’ agreement.
To perpetuate the alleged scheme, Pope and Andry have used aliases to conceal their true identities, and they have frequently changed business names to make it more difficult for dissatisfied customers to locate them. As part of the scheme, Pope and Andry falsely represented to victims that their loan modification would be overseen by an attorney, the charges allege. At times, Pope allegedly identified himself as “attorney Jonathan Pincuss.”
After the City of Chicago and the Illinois Attorney General’s Office filed separate civil lawsuits in 2010 and 2011, respectively, against Pope, Andry, and certain business entities that were known at that time, the complaint alleges that the defendants ceased operating under those business names and started up new business entities while continuing to defraud customers.
The charges were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Shields, Jr., Acting Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.
The government is being represented by Assistant U.S. Attorney Sharon Fairley.
Wire fraud carries a maximum penalty of 20 years in prison and a $250,000 fine, or an alternative fine totaling twice the gross gain or twice the loss, whichever is greater, and restitution is mandatory. If convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.
A complaint contains only charges and is not evidence of guilt. The defendants presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
The investigation falls under the umbrella of the Financial Fraud Enforcement Task Force, which includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information on the task force, visit: StopFraud.gov.
Complaint
Tax Return Preparer Pleads Guilty to Tax FraudRead the Press Release
ATLANTA - Amberula Levitt pleaded guilty today to two counts of filing false personal tax returns for the 2004 and 2005 tax years.
“Remarkably, this defendant was preparing tax returns for others while cheating on her own,” said United States Attorney Sally Quillian Yates. “She used her knowledge and expertise of the tax system to try and defraud it.”
“Individuals who evade their tax obligations cheat their country and their fellow citizens,” said Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division. “The Justice Department will investigate and prosecute tax professionals who use their skills to defraud the Internal Revenue Service.”
"Each of us is responsible for filing correct and accurate tax returns, “stated IRS CI Special Agent in Charge, Veronica F. Hyman-Pillot. "IRS CI will continue to investigate those individuals who intentionally evade their tax obligations."
According to United States Attorney Yates, the charges and other information presented in court: From 2004 through 2010, Levitt owned and operated Tax Time Tax Service (“Tax Time”), a tax preparation business with multiple locations throughout metro Atlanta. Levitt fraudulently under-reported the earnings from Tax Time on her personal tax returns. For the years 2004 through 2009, Levitt owes approximately $620,000 in back taxes to the IRS.
The charges for filing a false tax return in this case carry a maximum sentence of three years in prison and a fine of up to $250,000 on each count. 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.
Sentencing for Levitt, 44, of East Point, Ga., is scheduled for January 23, 2014, at 10:30 am before United States District Judge Amy Totenberg.
This case is being investigated by the Internal Revenue Service Criminal Investigation.
Trial Attorney Christopher J. Maietta of the Justice Department’s Tax Division and Assistant United States Attorney Steven D. Grimberg are prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is http://www.justice.gov/usao/gan/.
Springfield Man Pleads Guilty to Scheme to Sell Thousands of Counterfeit DVDsRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a Springfield, Mo., man has pleaded guilty in federal court to charges related to a scheme to sell thousands of counterfeit DVDs over the Internet.
Matthew Cerullo, 42, of Springfield, waived his right to a grand jury and pleaded guilty before U.S. Magistrate Judge David P. Rush on Monday, Oct. 28, 2013, to a four-count information that charges him with mail fraud, trafficking in counterfeit labels, trafficking in counterfeit goods and making false statements to federal agents.
Based on records obtained from the U.S. Postal Service, the United Parcel Service (UPS), DHL, EBay and Amazon.com, federal agents determined that Cerullo purchased and received more than 22,000 counterfeit DVDs from a distributor in Hong Kong, China between Feb. 13, 2013 and Sept. 10, 2013.
According to court documents, the federal investigation began when a shipment of counterfeit DVDs from Hong Kong was seized by Customs and Border Protection agents at JFK Airport. The counterfeit DVDs were being shipped to a UPS store located in Springfield under the name of a business owned by Cerullo.
Homeland Security Investigations (HSI) agents interviewed Cerullo at his residence on May 2, 2013. Cerullo told agents that he had not receive a seizure notice from Customs and Border Protection. Cerullo also told agents that he orders toys and jewelry from China to resell on EBay or to local venders, but does not buy DVDs. Cerullo claimed that he owns only one business, C3 Wholesale, LLC.
During the course of the investigation, however, agents learned that Cerullo’s statement contained false and fraudulent information that was designed to mislead them and their investigation. Agents determined that Cerullo had in fact received four prior seizure notices from Customers and Border Protection; these notices were discovered in his desk during the execution of a search warrant at his residence. Agents also learned that Cerullo owned, operated and sold counterfeit DVDs through four different businesses: C3 Wholesale, LLC; EJC Supply, LLC; Midwest Wholesale and Capital Sierra, LLC; and EJC Supply Company.
On Sept. 3, 2013, agents observed Cerullo mail a large quantity of packages at a local post office. Postal Inspectors inspected the contents of these packages and discovered that Cerullo had mailed 165 packages of counterfeit DVDs to various individuals around the country. Inspectors also noted that the return address on each package was fictitious.
The next day, federal agents executed a search warrant on Cerullo’s residence and a storage locker that Cerullo rented. Agents discovered more than 22,000 counterfeit DVDs between those locations.
Under federal statutes, Cerullo is subject to a sentence of up to 40 years in federal prison without parole, plus a fine up to $1 million and an order of restitution. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Patrick Carney. It was investigated by the Department of Homeland Security.Sex Trafficker Terrence “T-Rex” Yarbrough Sentenced to Serve536 Months in PrisonRead the Press Release
U.S. District Court Judge S. Thomas Anderson sentenced Terrence Yarbrough, aka “T-Rex,” 38, of Memphis, Tenn., to serve 536 months in prison, the Justice Department announced today. A jury convicted Yarbrough on Dec. 5, 2012 of 10 counts of sex trafficking and one count of conspiracy to commit food stamp fraud.
“The Civil Rights Division is committed to pursuing justice on behalf of vulnerable members of our society,” said Acting Assistant Attorney General Jocelyn Samuels. “Today’s sentence sends a clear message that the United States will not tolerate modern-day slavery and will work tirelessly to restore the rights and dignity of its victims.”
“Today’s sentence of 536 months in prison ensures Terrence Yarbrough, a ruthless predator who inflicted unspeakable physical and emotional harm upon vulnerable young women, will be held accountable for his depraved acts,” said Edward L. Stanton III, U.S. Attorney for the Western District of Tennessee. “We will continue to prosecute those who engage in such reprehensible conduct of coercion and exploitation.”
During the trial, victims recounted a series of violent acts perpetrated by Yarbrough to coerce them into prostituting for him, including being beat with belts, wooden coat hangers, crowbars, padlocks and dog chains; being thrown down stairs; having their heads smashed in car doors; having their legs burned with irons; and being scalded with boiling water.
“The horrific physical violence, sexual abuse, and emotional torment suffered by the victims in this case cannot be undone, but this sentence ensures that their violent and evil predator will face the consequences of his actions,” said A. Todd McCall, Special Agent in Charge of the Memphis Division of the Federal Bureau of Investigation. “The efforts of the FBI and our law enforcement partners have removed a human trafficker from our streets. We will continue to work together to aggressively pursue and bring to justice those who cruelly exploit others for profit, and to restore the rights and dignity of human trafficking victims.”
“ The USDA-Office of Inspector General is committed to the investigation and prosecution of those individuals who fraudulently obtain food stamp benefits,” said Karen Citizen-Wilcox, Special Agent in Charge of the Southeast Region for the U.S. Department of Agriculture’s Office of the Inspector General. “We are very pleased we were able to work with the U.S. Attorney's Office and other law enforcement agencies in this case .”
Evidence presented at trial included the testimony of 10 victims identified in the indictment as well as several eyewitnesses. Numerous witnesses testified that Yarbrough repeatedly lured vulnerable victims, some as young as 15 years old, into prostitution with false promises of love, family and prosperity. The evidence showed that any time a victim refused to engage in prostitution, Yarbrough resorted to threats, intimidation and violence. The jury heard testimony that Yarbrough’s pattern of recruitment, exploitation, and violent coercion continued for years before his 2009 arrest in St. Louis.
One victim testified that Yarbrough forced her to engage in prostitution the entire time she was pregnant with his child and that he frequently beat her on the stomach when she did not want to comply with his demands. He induced labor through a severe beating in her eighth month of pregnancy, during which time he also had her working as a prostitute in Tunica, Miss. Yarbrough drove her back to Memphis, dropped her off at a hospital, and forced her to resume prostituting the day after her release. At a later date, Yarbrough smashed her on the head with a lamp and kicked out her front teeth when she tried to stop prostituting for him.
Another victim testified that Yarbrough lured her into prostitution by promising to reunite her with their children, then beat her severely when she insisted on seeing them and refused to continue working, punching her in the face so hard that he broke three of her teeth. On another occasion, he beat her knees with a metal pipe, causing injuries that continue to affect her. She also testified that Yarbrough threatened to prostitute their nine-year-old daughter.
Further testimony showed that a victim slept through a phone call from a client after prostituting for days on end with almost no sleep, and that when Yarbrough found out that she had missed the call, he smashed her head into a car door, dragged her by the hair to his hotel room and beat her with his belt. Jurors also saw a letter addressed to the same victim and signed by Yarbrough stating that he was proud she did not scream during the aforementioned beating.
Witnesses testified that as a warning, Yarbrough bragged about his beatings of some victims to other victims. Jurors also saw the “T-Rex” logos Yarbrough tattooed on four separate victims, and heard that he claimed that they had been “branded” as his property. Testimony and jail recordings showed that Yarbrough confiscated his victims’ identification documents and money to make it difficult for them to escape.
Jurors also heard testimony that Yarbrough conspired with his mother, Norma Yarbrough Webb, 66, and Michelle Johnson, 41, to fraudulently obtain food stamp benefits while Yarbrough was incarcerated. Johnson and Webb previously pled guilty to related charges.
The case was investigated by the FBI and the U.S. Department of Agriculture Office of the Inspector General, with assistance from the St. Louis Police Department. Assistant U.S. Attorney Jonathan Skrmetti and Trial Attorney Benjamin J. Hawk of the United States Department of Justice Civil Rights Division’s Human Trafficking Prosecution Unit prosecuted the case.
Seventh Correctional Officer Pleads Guilty to A Racketeering ConspiracyRead the Press Release
Smuggled Drugs and Other Contraband for BGF Gang Members in Baltimore Correctional Facilities
Baltimore, Maryland – Kimberly Dennis, age 26, of Baltimore, Maryland pleaded guilty today to a racketeering conspiracy for smuggling drugs and other contraband for members of the Black Guerilla Family (BGF) gang inside several correctional facilities.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; Secretary Gary D. Maynard of the Maryland Department of Public Safety and Correctional Services; Baltimore Police Commissioner Anthony W. Batts; and Baltimore City State’s Attorney Gregg L. Bernstein.According to court documents, BGF has been the dominant gang at the Baltimore City Detention Center (BCDC), and in several connected facilities, including the Baltimore Central Booking Intake Center, the Women’s Detention Center, which houses many men, and in the Jail Industries Building.
According to her plea, Kimberly Dennis worked as a Correctional Officer (CO) at Baltimore City Detention Center (BCDC) from 2006 to 2013. She entered into personal and sexual relationships with two inmates who were members of the Black Guerilla Family (“BGF). Dennis smuggled contraband, including marijuana, tobacco and prescription pills, into BCDC on behalf of BGF inmates, who would then sell that contraband to other BCDC inmates who were members of BGF. Dennis was aware that of the inmates’ BGF affiliation and assisted in furthering the racketeering enterprise. Dennis worked with other CO’s to assist in the smuggling. Dennis obtained contraband from others, including co-defendants. Dennis was aware that other co-defendants and correctional officers also smuggled contraband.
Dennis faces a maximum sentence of 20 years in prison for the racketeering conspiracy. U.S. District Judge Ellen L. Hollander scheduled sentencing for January 24, 2014.
In addition to Dennis, six other CO’s have pleaded guilty to the racketeering enterprise:
Jasmin Jones, a/k/a/ J.J., age 24, of Baltimore; Taryn Kirkland, age 23, of Baltimore; Jennifer Owens, a/k/a/ O and J.O., age 31, of Randallstown; Adrena Rice, age 25, of Baltimore; Katera Stevenson, a/k/a KK, age 24, of Baltimore; and
Jasmine Thornton, a/k/a J.T., age 26, of Glen Burnie.Three other co-defendants, inmates Tavon White, age 36, and Steven Loney, age 24, both of Baltimore, and Tyesha Mayo, age 29, of Baltimore, have also pleaded guilty.
The case arose from the efforts of the Maryland Prison Task Force, a group of local, state and federal law enforcement agencies and prosecutors that met regularly for more than two years and generated recommendations to reform prison procedures. The investigation is continuing.U.S. Attorney Rosenstein recognized the efforts of the other members of the Maryland Prison Task Force, including: Colonel Marcus L. Brown, Superintendent of the Maryland State Police; Chief Mark A. Magaw of the Prince George’s County Police Department; United States Marshal Johnny Hughes; Special Agent in Charge Karl C. Colder of the Drug Enforcement Administration - Washington Field Division; Tom Carr, Director of the Washington-Baltimore High Intensity Drug Trafficking Area; and Dave Engel, Executive Director of the Maryland Coordination and Analysis Center.
United States Attorney Rod J. Rosenstein praised the FBI, Maryland Department of Public Safety and Correctional Services, Baltimore Police Department, and Maryland Prison Task Force, for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys Robert R. Harding and Ayn B. Ducao, who are prosecuting this Organized Crime Drug Enforcement Task Force case.Rabobank Admits Wrongdoing in Libor Investigation, Agrees to Pay $325 Million Criminal PenaltyRead the Press Release
Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A. (Rabobank) has entered into an agreement with the Department of Justice to pay a $325 million penalty to resolve violations arising from Rabobank’s submissions for the London InterBank Offered Rate (LIBOR) and the Euro Interbank Offered Rate (Euribor), which are leading benchmark interest rates around the world, the Justice Department announced today.
A criminal information will be filed today in U.S. District Court for the District of Connecticut that charges Rabobank as part of a deferred prosecution agreement (DPA). The information charges Rabobank with wire fraud for its role in manipulating the benchmark interest rates LIBOR and Euribor. In addition to the $325 million penalty, the DPA requires the bank to admit and accept responsibility for its misconduct as described in an extensive statement of facts. Rabobank has agreed to continue cooperating with the Justice Department in its ongoing investigation of the manipulation of benchmark interest rates by other financial institutions and individuals.
“For years, employees at Rabobank, often working with traders at other banks around the globe, illegally manipulated four different interest rates – Euribor and LIBOR for the U.S. dollar, the yen, and the pound sterling – in the hopes of fraudulently moving the market to generate profits for their traders at the expense of the bank’s counterparties,” said Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division. “Today’s criminal resolution – which represents the second-largest penalty in the Criminal Division’s active, ongoing investigation of the manipulation of global benchmark interest rates by some of the largest banks in the world – comes fast on the heels of charges brought against three former ICAP brokers just last month. Rabobank is the fourth major financial institution that has admitted its misconduct in this wide-ranging criminal investigation, and other banks should pay attention: our investigation is far from over.”
“Rabobank rigged multiple benchmark rates, allowing its traders to reap higher profits at the expense of their unsuspecting counterparties,” said Deputy Assistant Attorney General Leslie C. Overton of the Justice Department’s Antitrust Division. “Not only was this conduct fraudulent, it compromised the integrity of globally-used interest rate benchmarks – undermining financial markets worldwide.”
“Rabobank admitted to manipulating LIBOR and Euribor submissions which directly affected the rates referenced by financial products held by and on behalf of companies and investors around the world,” said Assistant Director in Charge Valerie Parlave of the FBI’s Washington Field Office. “Rabobank’s actions resulted in the deliberate harm to counterparties holding products referencing the manipulated rates. Today’s announcement is yet another example of the tireless efforts of the FBI special agents and forensic accountants who are dedicated to investigating complex fraud schemes and, together with prosecutors, bringing to justice those who participate in such schemes.”
Together with approximately $740 million in criminal and regulatory penalties imposed by other agencies in actions arising out of the same conduct – $475 million by the Commodity Futures Trading Commission (CFTC) action, $170 million by the U.K. Financial Conduct Authority (FCA) action and approximately $96 million by the Openbaar Ministerie (the Dutch Public Prosecution Service) – the Justice Department’s $325 million criminal penalty brings the total amount to be paid by Rabobank to more than $1 billion.
According to signed documents, LIBOR is an average interest rate, calculated based upon submissions from leading banks around the world and reflecting the rates those banks believe they would be charged if borrowing from other banks. LIBOR serves as the primary benchmark for short-term interest rates globally and is used as a reference rate for many interest rate contracts, mortgages, credit cards, student loans and other consumer lending products. The Bank of International Settlements estimated that as of the second half of 2009, outstanding interest rate contracts were valued at approximately $450 trillion.
LIBOR is published by the British Bankers’ Association (BBA), a trade association based in London. At the time relevant to the conduct in the criminal information, LIBOR was calculated for 10 currencies at 15 borrowing periods, known as maturities, ranging from overnight to one year. The LIBOR for a given currency at a specific maturity is the result of a calculation based upon submissions from a panel of banks for that currency (the Contributor Panel) selected by the BBA. From at least 2005 through 2011, Rabobank was a member of the Contributor Panel for a number of currencies, including United States dollar (dollar) LIBOR, pound sterling LIBOR, and yen LIBOR.
The Euro Interbank Offered Rate (Euribor) is published by the European Banking Federation (EBF), which is based in Brussels, Belgium, and is calculated at 15 maturities, ranging from overnight to one year. Euribor is the rate at which Euro interbank term deposits within the Euro zone are expected to be offered by one prime bank to another at 11:00 a.m. Brussels time. The Euribor at a given maturity is the result of a calculation based upon submissions from Euribor Contributor Panel banks. From at least 2005 through 2011, Rabobank was also a member of the Contributor Panel for Euribor.
According to the statement of facts accompanying the agreement, from as early as 2005 through at least November 2010, certain Rabobank derivatives traders requested that certain Rabobank dollar LIBOR, yen LIBOR, pound sterling LIBOR, and Euribor submitters submit LIBOR and Euribor contributions that would benefit the traders’ trading positions, rather than rates that complied with the definitions of LIBOR and Euribor.
In addition, according to the statement of facts accompanying the agreement, from as early as January 2006 through October 2008, a Rabobank yen LIBOR submitter and a Rabobank Euribor submitter had two separate agreements with traders at other banks to make yen LIBOR and Euribor submissions that benefitted trading positions, rather than submissions that complied with the definitions of LIBOR and Euribor.
The Rabobank LIBOR and Euribor submitters accommodated traders’ requests on numerous occasions, and on various occasions, Rabobank’s submissions affected the fixed rates.
According to the statement of facts, Rabobank employees engaged in this conduct through electronic communications, which included both emails and electronic chats. For example, on Sept. 21, 2007, a Rabobank Yen derivatives trader emailed the Rabobank Yen LIBOR submitter at the time with the subject line “libors,” writing: “Wehre do you think today’s libors are? If you can, I would like 1mth libors higher today.” The submitter replied: “Bookies reckon 1m sets at .85.” The trader wrote back: “I have some fixings in 1 mth so would appreciate if you can put it higher mate.” The submitter replied: “No prob mate let me know your level.” The trader responded: “Wud be nice if you could put 0.90% for 1mth cheers.” The submitter wrote back: “Sure no prob. I’ll probably get a few phone calls but no worries mate!” The trader replied: “If you may get a few phone calls then put 0.88% then.” The submitter responded: “Don’t worry mate – there’s bigger crooks in the market than us guys!” That day, as requested, Rabobank’s 1-month Yen LIBOR submission was 0.90, an increase of seven basis points from its previous submission, whereas the other panel banks’ submissions decreased by approximately a half of a basis point on average. Rabobank’s submission went from being tied as the tenth highest submission on the Contributor Panel on the previous day to being the highest submission on the Contributor Panel.
On Nov. 29, 2006, a Rabobank dollar derivatives trader wrote to Rabobank’s Global Head of Liquidity and Finance and the head of Rabobank’s money markets desk in London, who supervised rate submitters: “Hi mate, low 1s high 3s LIBOR pls !!! Don't tell [another Rabobank U.S. Dollar derivatives trader] haa haaaaaaa. Sold the market today doooooohhhh!” The money markets desk head replied: “ok mate , will do my best …speak later.” After the LIBOR submissions that day, Rabobank’s ranking compared to other panel banks dropped as to 1-month dollar LIBOR and rose as to 3-month dollar LIBOR. Two days later, on Dec. 1, 2006, the trader again wrote to the money markets desk head: “Appreciate 3s go down, but a high 3s today would be nice… cheers chief.” The money markets desk head wrote back: “I am fast turning into your LIBOR bitch!!!!” The trader replied: “Just friendly encouragement that’s all , appreciate the help.” The money markets desk head wrote back: “No worries mate , glad to help ….We just stuffed ourselves with good ol pie , mash n licker !!”
In an example of an agreement with traders at other banks, on July 28, 2006, a Rabobank rate submitter and Rabobank trader discussed their mutual desires for a high fixing. The submitter stated to the trader: “setting a high 1m again today - I need it!” to which the trader responded: “yes pls mate…I need a higher 1m libor too.” Within approximately 20 minutes, the submitter contacted a trader at another Contributor Panel bank and wrote: “morning skipper.....will be setting an obscenely high 1m again today...poss 38 just fyi.” The other bank’s trader responded, “(K)...oh dear..my poor customers....hehehe!! manual input libors again today then!!!!” Both banks’ submissions on July 28 moved up one basis point, from 0.37 to 0.38, a move which placed their submissions as the second highest submissions on the Contributor Panel that day.
As another example, on July 7, 2009, a Rabobank trader wrote to a former Rabobank yen LIBOR submitter: “looks like some ppl are talking with each other when they put libors down. . . quite surprised that 3m libors came down a lot.” The former submitter replied: “yes deffinite manipulation – always is tho to be honest mate. . . i always used to ask if anyone needed a favour and vise versa. . . . a little unethical but always helps to have friends in mrkt.”
By entering into a DPA with Rabobank, the Justice Department took several factors into consideration, including that Rabobank has no history of similar misconduct and has not been the subject of any criminal enforcement actions or any significant regulatory enforcement actions by any authority in the United States, the Netherlands, or elsewhere. In addition, Rabobank has significantly expanded and enhanced its legal and regulatory compliance program and has taken extensive steps to remediate the misconduct. Significant remedies and sanctions are also being imposed on Rabobank by several regulators and an additional criminal law enforcement agency (the Dutch Public Prosecution Service).
This ongoing investigation is being conducted by special agents, forensic accountants, and intelligence analysts of the FBI’s Washington Field Office. The prosecution of Rabobank is being handled by Assistant Chief Glenn S. Leon and Trial Attorney Alexander H. Berlin of the Criminal Division’s Fraud Section and Trial Attorneys Ludovic C. Ghesquiere, Michael T. Koenig and Eric L. Schleef of the Antitrust Division. Deputy Chiefs Daniel Braun and William Stellmach of the Criminal Division’s Fraud Section, Criminal Division Senior Counsel Rebecca Rohr, Assistant Chief Elizabeth B. Prewitt and Trial Attorney Richard A. Powers of the Antitrust Division’s New York Office, and Assistant U.S. Attorneys Eric Glover and Liam Brennan of the U.S. Attorney’s Office for the District of Connecticut, along with Criminal Division’s Office of International Affairs, have provided valuable assistance in this matter.
The investigation leading to these cases has required, and has greatly benefited from, a diligent and wide-ranging cooperative effort among various enforcement agencies both in the United States and abroad. The Justice Department acknowledges and expresses its deep appreciation for this assistance. In particular, the CFTC’s Division of Enforcement referred this matter to the department and, along with the FCA, has played a major role in the investigation. The department has also worked closely with the Dutch Public Prosecution Service and De Nederlandsche Bank (the Dutch Central Bank) in the investigation of Rabobank. Various agencies and enforcement authorities from other nations are also participating in different aspects of the broader investigation relating to LIBOR and other benchmark rates, and the department is grateful for their cooperation and assistance. In particular, the Securities and Exchange Commission has played a significant role in the LIBOR investigation, and the department expresses its appreciation to the United Kingdom’s Serious Fraud Office for its assistance and ongoing cooperation.
This prosecution is part of efforts underway by President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets and recover proceeds for victims of financial crimes. For more information about the task force visit: www.stopfraud.gov.Related Materials:
Deferred Prosecution Agreement
Statement of Facts-->Deferred Prosecution Agreement
Statement of FactPhoenix Man Sentenced to Prison for Commercial Loan FraudRead the Press Release
PHOENIX - On Oct. 28, 2013, Joseph N. Gagliano, 45, of Phoenix, was sentenced to 30 months in prison and ordered to pay $2,903,010.26 in restitution by U.S. District Court Judge G. Murray Snow.
First Assistant U.S. Attorney Elizabeth A. Strange highlighted the significance of this sentence: “These loans should have gone to qualified small business owners in need of financial support. The defendant’s fraudulent conduct denied small business owners the opportunity to obtain access to capital in a difficult economy, and the United States Attorney’s Office will continue to investigate and prosecute such borrowers who obtain SBA loans through fraud.”
“Corrupt borrowers who attempt to defraud SBA=s loan programs will be aggressively pursued by our office,” said SBA Inspector General Peggy E. Gustafson. “This successful investigation and prison sentence demonstrates our commitment to insure that SBA loans are only disbursed to deserving small businesses helping to grow our economy. We appreciate the leadership of the U.S. Attorney=s Office and the support of the FBI to bring this indictment forward.”
The case against Gagliano was based on an investigation by the SBA-OIG and FBI. Between June 2006 and July 2010, Gagliano sought a SBA loan for a car wash located in Chandler and mortgage loans for residential real estate located in Scottsdale and Phoenix. He submitted loan applications that falsely misrepresented that his father, who has the same name, was the actual borrower, and also made misrepresentations concerning his income, assets, liabilities and intent to occupy the residential properties as a primary residence. Gagliano also forged signatures, altered bank statements and submitted bogus lease agreements. The scheme to defraud resulted in nearly $3 million in losses to the Small Business Administration, Wells Fargo Bank, and JP Morgan Chase.
The investigation in this case was conducted by the Small Business Administration-Office of Inspector General and the Federal Bureau of Investigation. The prosecution was handled by Kevin M. Rapp Assistant U.S. Attorney, District of Arizona, Phoenix.
CASE NUMBER: CR-12-00364-PHX-GMS
RELEASE NUMBER: 2013-081_Gagliano# # #
For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/Parkville Man Indicted for Sex TraffickingRead the Press Release
Baltimore, Maryland – A federal grand jury returned an indictment today charging Rodney Hubert, a/k/a “Noah,” age 38, of Parkville, Maryland, with sex trafficking of a minor.
The indictment was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; Chief James W. Johnson of the Baltimore County Police Department; and Baltimore County State’s Attorney Scott Shellenberger.
According to the one count indictment, Hubert paid a 19 year old associate who worked for him as a prostitute a commission for recruiting a 16 year old girl to perform prostitution for him. Hubert allegedly offered to pay the 16 year old girl $400 to take photos of her wearing lingerie in a provocative manner. The girl posed for the pictures but never received the promised payment. Hubert offered to pay an additional $1,000 to make a pornographic film. The girl told Hubert that she was only 16 years old.
According to the allegations in the indictment, from February 1 to 22, 2013, Hubert uploaded these photos onto an internet website and advertised the girl as a prostitute. He paid a driver and a security guard to travel with the girl to “outcalls,” using money she earned as a prostitute. Hubert kept a large percentage of the girl’s earnings.
Hubert faces a minimum mandatory sentence of 10 years in prison and a maximum of life in prison followed by up to lifetime of supervised release. An initial appearance has not yet been scheduled.
An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
The case was investigated by the FBI-led Maryland Child Exploitation Task Force (MCETF), created in 2010 to combat child prostitution, with members from10 state and federal law enforcement agencies. The Task Force coordinates with the National Center for Missing and Exploited Children and the Maryland State Police Child Recovery Unit to identify missing children being advertised online for prostitution.
MCETF partners with the Maryland Human Trafficking Task Force, formed in 2007 to discover and rescue victims of human trafficking while identifying and prosecuting offenders. Members include federal, state and local law enforcement, as well as victim service providers and local community members. For more information about the Maryland Human Trafficking Task Force, please visit http://www.justice.gov/usao/md/priorities_human.html.
United States Attorney Rod J. Rosenstein commended the FBI, Baltimore County Police Department and Baltimore County State's Attorney’s Office for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Mark W. Crooks, who prosecuted the case.
Owners and Supervisor of Ambulance Transportation Company Plead Guilty in Los Angeles for Role in Ambulance Fraud SchemeRead the Press Release
The owners and supervisor of Alpha Ambulance Inc. (Alpha), a now-defunct Los Angeles-area ambulance transportation company, have pleaded guilty in connection with an ambulance fraud scheme.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney André Birotte Jr. of the Central District of California; Special Agent in Charge Glenn R. Ferry of the Los Angeles Region of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG); and Assistant Director in Charge Bill L. Lewis of the FBI’s Los Angeles Field Office made the announcement.
Alex Kapri, aka Alex Kapriyelov or Alexander Kapriyelov, 56; Aleksey Muratov, aka Russ Muratov, 32; and Danielle Hartsell Medina, 36, pleaded guilty on Oct. 28, 2013, before U.S. District Court Judge Audrey B. Collins in the Central District of California to conspiracy to commit health care fraud. They face a maximum penalty of 10 years in prison when they are sentenced on Feb. 24, 2014.
Kapri and Muratov were owners and operators of Alpha, an ambulance transportation company that operated in the greater Los Angeles area and that specialized in the provision of non-emergency ambulance transportation services to Medicare-eligible beneficiaries, primarily dialysis patients. Medina was employed by Alpha and ultimately supervised the training and education of its employees.
According to court documents, Kapri, Muratov and Medina knowingly provided non-emergency ambulance transportation services to Medicare beneficiaries whose medical condition at that time did not require those services. With Kapri’s knowledge, Muratov and Medina instructed certain Alpha employees to conceal the Medicare beneficiaries’ medical conditions by altering requisite paperwork and creating fraudulent reasons that justified, on paper, the transportation services. Based on these medically unnecessary transportation services, the defendants caused Alpha to submit false and fraudulent claims to Medicare.
Additionally, as the defendants were submitting false and fraudulent claims to Medicare, Medicare notified Alpha the company would be subject to a Medicare audit. In response to this notice, Muratov and Medina instructed Alpha employees – with Kapri’s knowledge – to alter requisite paperwork and create fraudulent reasons that justified, on paper, transportation services for the beneficiaries identified as the subject of Medicare’s audit.
From at least June 2008 through at least July 2012, Alpha submitted more than $49 million in claims for ambulance transportation services. As a result, Medicare paid Alpha more than $13 million for these claims, many of which were false and fraudulent.
The case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Central District of California. This case was prosecuted by Trial Attorneys Blanca Quintero and Alexander F. Porter and Assistant Chief O. Benton Curtis III.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,500 defendants who have collectively billed the Medicare program for more than $5 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
Orlando Man Sentenced to 8 Years for Distributing Child PornographyRead the Press Release
Orlando, Florida – Chief U.S. District Judge Anne C. Conway sentenced David Lahn (60, Orlando) yesterday to 8 years in federal prison for distributing and attempting to distribute child pornography. Lahn is also required to register as a sex offender and to serve a 20-year term of supervision, following his release from prison. The court also ordered Lahn to forfeit his computer equipment. Lahn pleaded guilty on June 26, 2013.
According to court documents, on September 6, 2011, Lahn emailed images of child pornography to an individual in Australia. Later in 2011, the Queensland Police Service in Australia arrested the recipient of Lahn’s child pornography and informed the Federal Bureau of Investigation of Lahn’s email. Lahn later admitted to special agents that he sent the September 6, 2011 email and the attached images of child pornography. Law enforcement officers conducted a forensic examination of Lahn’s computers and found that he possessed more than 1,000 images and at least five videos depicting children and infants being sexually abused and exploited.
This case was investigated by the Federal Bureau of Investigation. It was prosecuted by Assistant United States Attorney Andrew C. Searle.
This is another case brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc.
Operators and Employee of Schaumburg Home Visiting Physician Group Among Three Indicted in $12 Million Medicare Fraud SchemeRead the Press Release
CHICAGO ― The administrator, medical director, and an employee of a Schaumburgbased in-home visiting physician group were indicted on federal charges for their alleged roles in a $12 million health care fraud scheme, federal law enforcement officials announced today. The defendants operated or were employed by a home visiting physician practice, Medicall Physicians Group, Ltd., that allegedly billed Medicare for patient services that were never provided. The defendants allegedly fraudulently obtained approximately $4.7 million in Medicare payments from January 2007 to December 2011.
A 10-count indictment that was returned by a federal grand jury last Wednesday was unsealed today following the arrest of RICK E. BROWN, 56, of Rockford, the president of Home Care America, Inc., which controlled the daily operations of Medicall. Brown pleaded not guilty and was released on a $10,000 unsecured bond at his arraignment today before U.S. Magistrate Judge Mary Rowland in Federal Court in Chicago.
Also indicted were Dr. ROGER A. LUCERO, 62, of Elmhurst, a physician and the medical director of Medicall, and MARY C. TALAGA, 53, of Elmwood Park, a Medicall and Home Care America employee who submitted claims to Medicare on behalf of Medicall and the medical professionals who were employed by Medicall. Lucero and Talaga were not arrested and will be arraigned on dates yet to be determined.
Brown and Lucero were each charged with one count of conspiracy to commit health care fraud and multiple counts of health care fraud. All three defendants were charged with three counts each of making false statements relating to health care matters. The indictment also seeks forfeiture of more than $4.49 million from Brown and Lucero.
According to the indictment, Brown and Lucero operated Medicall, and Talaga submitted the company’s bills to Medicare, totaling more than $12 million. Brown instructed employees to bill Medicare for patient oversight and other services that were never provided, and Lucero created backdated records in an effort to conceal the fraudulent billings, the indictment alleges. Talaga allegedly billed Medicare for these services, even though she knew they were not documented, a practice that required her to fabricate the information submitted to Medicare.
The arrest and charges were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; Robert J. Shields Jr., Acting Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; and Lamont Pugh III, Special Agent-in- Charge of the Chicago Regional Office of the U.S. Department of Health and Human Services Office of Inspector General.
Health care fraud conspiracy and each count of health care fraud each carry a maximum penalty of 10 years in prison and a $250,000 fine, while each count of making false statements relating to health care matters carries a maximum penalty of five years in prison and a $250,000 fine. If convicted, restitution is mandatory and the court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
An indictment contains merely charges and is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
The investigation was conducted jointly by the FBI and HHS-OIG and brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office. The case is being prosecuted by Trial Attorney Brooke Harper of the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in Chicago and eight other cities across the country, has charged more than 1,500 defendants who have collectively billed the Medicare program for more than $5 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: stopmedicarefraud.gov.
Indictment
Oakland Man Sentenced to More Than Five Years in Prison for Trafficking MethamphetamineRead the Press Release
OAKLAND – John Alan Hunt was sentenced yesterday to five and a half years in prison for trafficking methamphetamine, United States Attorney Melinda Haag announced.
Hunt, 52, of Oakland, Calif., was indicted by a federal grand jury on April 23, 2013. The three-count Indictment charged Hunt and co-defendants Daniel Artinger, and Nile Glenn with Conspiracy to Distribute and Possess with the Intent to Distribute Methamphetamine, in violation of 21 U.S.C. § 846, and Distribution and Possession with the Intent to Distribute Methamphetamine, in violation of 21 U.S.C. § 841(a)(1).
Hunt pleaded guilty on July 29, 2013, to Distribution and Possession with the Intent to Distribute Methamphetamine. According to the plea agreement, Hunt admitted that on August 2, 2012, and again on August 30, 2012, he knowingly and intentionally sold a total of approximately 48.4 grams of actual methamphetamine to an undercover officer in the in the vicinity of High Street in Oakland.
“One of ATF’s top priorities is to rid our neighborhoods of dangerous criminals who plague our community by selling drugs,” said Bureau of Alcohol, Tobacco, Firearms and Explosives, Special Agent in Charge Joseph M. Riehl. “The success of this investigation is attributed to the excellent undercover work that was conducted and the solid partnership between ATF, Oakland Police Department, and the United States Attorney’s Office.”
Artinger pleaded guilty on October 21, 2013, and is scheduled to be sentenced on January 6, 2014. Glenn pleaded guilty in the District of Oregon on October 24, 2013, and is scheduled to be sentenced there on February 5, 2014.
The sentence was handed down by The Honorable Claudia Wilken, U.S. District Court Chief Judge, Judge Wilken also sentenced the defendant to a 4 year period of supervised release.
Hunt has been in federal custody since his initial appearance on May 6, 2013.
Chinhayi Cadet is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Elizabeth Garcia. The prosecution is the result of a 10 month investigation by the ATF and the Oakland Police Department.
(Hunt indictment )
Notorious Sex Trafficker Terrence “T-Rex” Yarbrough Sentenced to 536 Months in PrisonRead the Press Release
Memphis, TN – Terrence Yarbrough, a/k/a, “T-Rex,” 38, of Memphis, Tenn., was sentenced to 536 months in federal prison today by United States District Judge S. Thomas Anderson. There is no parole in the federal system. The sentencing follows Yarbrough’s December 2012 conviction by a federal jury on 10 counts of sex trafficking and one count of conspiracy to commit food stamp fraud.
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“Today’s sentence of 536 months in prison ensures Terrence Yarbrough, a ruthless predator who inflicted unspeakable physical and emotional harm upon vulnerable young women, is held accountable for his depraved acts,” said Edward L. Stanton III, U.S. Attorney for the Western District of Tennessee. “We will continue to prosecute those who engage in such reprehensible conduct.”
At the trial, victims recounted a series of violent acts perpetrated by Yarbrough to coerce them into prostituting for him, including beatings with belts, wooden coat hangers, crowbars, padlocks attached to belts, and dog chains. They also testified to being thrown down stairs, having their heads smashed into car doors, having their legs burned with irons, and being scalded with boiling water.
“The horrific physical violence, sexual abuse, and emotional torment suffered by the victims in this case cannot be undone, but this sentence ensures that their violent and evil predator will face the consequences of his actions,” said A. Todd McCall, Special Agent in Charge of the Memphis Division of the Federal Bureau of Investigation. “The efforts of the FBI and our law enforcement partners have removed a human trafficker from our streets. We will continue to work together to aggressively pursue and bring to justice those who cruelly exploit others for profit, and to restore the rights and dignity of human trafficking victims.”
Evidence presented at trial included the testimony of 10 victims identified in the indictment, as well as several eyewitnesses and investigators. Numerous witnesses testified that Yarbrough repeatedly enticed vulnerable women as young as 15 years old into prostitution with false promises of love, family, and prosperity. Any time a victim refused to engage in prostitution, he resorted to threats, intimidation, and violence. The jury heard testimony that Yarbrough’s pattern of recruitment, exploitation, and violent coercion continued for years before his 2009 arrest in St. Louis.
One of the victims testified that Yarbrough forced her to engage in prostitution the entire time she was pregnant with his child. He frequently beat her on the stomach when she did not want to comply with his demands. He forced her to work as a prostitute in Tunica, MS in her eighth month of pregnancy and induced her labor through a severe beating. Yarbrough drove her back to Memphis and dropped her off at a hospital. The day after she left the hospital following childbirth, Yarbrough forced her to resume prostituting. Sometime later, Yarbrough smashed her on the head with a lamp and kicked out her front teeth when she tried to stop prostituting for him.
Another victim testified that Yarbrough lured her into prostitution by promising to reunite her with their children, and then beat her severely when she insisted on seeing them and refused to continue working. Yarbrough punched her in the face so hard he broke three of her teeth. On another occasion, he beat her knees with a metal pipe and caused injuries that continue to affect her. She also testified that Yarbrough threatened to prostitute their nine-year-old daughter.
The jury heard testimony that one exhausted victim slept through a phone call from a client after serving prostitution clients for days on end with almost no sleep. When Yarbrough found out she missed the call, he smashed her head into a car door, dragged her by the hair to his hotel room, and beat her with his belt. Jurors saw a letter addressed to that victim and signed by Terrence Yarbrough stating that he was proud of how she did not scream while he beat her with the belt.
Witnesses testified that Yarbrough bragged about his beatings of some victims to other victims to let them know what would happen to them if they disobeyed him. Jurors also saw the “T-Rex” logos Yarbrough tattooed on four separate victims, and heard that he claimed that they had been “branded” as his property. Testimony and jail recordings showed that Yarbrough confiscated his victims’ identification documents as well as all their money to make it difficult for them to escape.
Jurors also heard testimony that Yarbrough conspired with his mother, Norma Yarbrough Webb, 66, and Michelle Johnson, 41, to fraudulently obtain food stamp benefits while Yarbrough was incarcerated. Johnson and Webb previously pled guilty to related charges.
“The USDA-Office of Inspector General is committed to the investigation and prosecution of those individuals who fraudulently obtain food stamp benefits. We are very pleased we were able to work with the U.S. Attorney's Office and other law enforcement agencies in this case,” stated Karen Citizen-Wilcox, Special Agent-in-Charge of the Southeast Region for the U.S. Department of Agriculture’s Office of Inspector General.
The case was investigated by the FBI and the U.S. Department of Agriculture Office of Inspector General, with assistance from the St. Louis Police Department. Assistant U.S. Attorney Jonathan Skrmetti and Trial Attorney Benjamin J. Hawk of the United States Department of Justice Civil Rights Division’s Human Trafficking Prosecution Unit prosecuted the case.New York Political Consultant Is Charged in White Plains Federal Court with Defrauding the New York Democratic Senate Campaign Committee and Other FraudsRead the Press Release
Preet Bharara, United States Attorney for the Southern District of New York, and Toni Weirauch, the Special Agent-in-Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), announced today the unsealing of a nine-count Complaint charging New York political consultant MELVIN LOWE with fraud and tax violations. The Complaint alleges that LOWE defrauded the New York Democratic Senate Campaign Committee ("DSCC") and its contributors of $100,000 by causing a vendor to submit a false invoice for printing services to the DSCC. According to the Complaint, LOWE instructed the vendor to send $75,000 of the proceeds to LOWE and $20,000 to a political consultant and to keep $5,000 for himself. The Complaint further alleges that the $20,000 payment came days after a State Senator promised to pay a benefit to the consultant for assistance the consultant had previously provided to the Senator. In addition to this fraud charge, the Complaint charges LOWE with income tax violations for his failure to report more than $2 million in consulting income. He is also charged with causing his bank to make a false statement to his mortgage lender, and also for defrauding a Yonkers resident of $66,000. LOWE was arrested this morning and will be presented later today before United States Magistrate Judge Paul E. Davison in White Plains federal court.
Manhattan U.S. Attorney Preet Bharara stated: “Today’s Complaint alleges that New York's culture of political corruption extends beyond elected officials to the relatively unknown professional political insiders who work behind the scenes to carry out corrupt schemes. Our investigation will continue and we will continue bringing to justice every corrupt official we find, as well as those who allegedly execute their unlawful plots."
IRS-CI Special Agent-in-Charge Toni Weirauch stated: “Elected politicians and others involved in the political process, such as political consultants and insiders, must comply with the same laws as the rest of the American public. IRS-Criminal Investigation investigates tax crimes and other financial crimes to ensure that those who are involved in making the rules, directly or indirectly, are held accountable when they do not follow them.”
According to the allegations in the Complaint unsealed today in White Plains federal court:
Fraud on the Democratic Senate Campaign Committee
In June 2010, MELVIN LOWE, a political consultant who had been retained by the DSCC, caused a New Jersey based political consulting firm (the "Vendor") to submit to the DSCC a false invoice for printing services in the total amount of $100,000. LOWE told a representative of the Vendor to send a total of $75,000 to a bank account held by one of LOWE's companies, $20,000 to another New York political consultant (the "Consultant") and to keep $5,000 for himself. The Complaint alleges further that LOWE used the $75,000 he received to pay for the installation of a pool and other renovations at his second home in Georgia and to give $5,000 to a Manhattan community board member.
The Complaint charges that the Consultant received the $20,000 wire transfer from the Vendor several days after a State Senator, identified as "Senator #1," promised the Consultant a benefit for assistance that the Consultant previously had provided to the Senator. The Consultant, who is further described as a former staff member to elected officials in New York City, did not know the Vendor, had done no work for the Vendor and was not owed any money by the DSCC. The Complaint alleges that days after the Senator promised the Consultant a benefit, the Consultant learned of the $20,000 deposit into his bank account in a telephone call from LOWE.
Tax Violations
The Complaint also charges LOWE with three counts of subscribing to false tax returns for each of the years 2007 through 2009 and three counts of failing to file tax returns for each of the years 2010 through 2012. In total, LOWE is charged with failing to report more than $2 million in income from consulting services over a period of six years.
False Statement in Connection with Mortgage Loan Application
The Complaint charges further that LOWE caused an employee of Commerce Bank to make a false statement to LOWE's mortgage lender regarding the balance of LOWE's checking account at Commerce Bank. In 2007, LOWE obtained a mortgage loan from Premium Capital in the principal amount of approximately $225,000 that was secured by his second home in Georgia. As part of the loan application process, LOWE signed a form in which he represented that he had more than $80,000 in his checking account at Commerce Bank and authorized Commerce Bank to confirm that balance, as well as the average balance in the account over the previous two months, to Premium Capital. LOWE then asked an Assistant Manager at his local Commerce Bank branch to confirm that he had more than $80,000 in his checking account. The Assistant Manager did so, despite the fact that LOWE had less than $2,200 in that account at that time. The Complaint alleges that LOWE's fraudulently inflated checking account balance was a material misstatement in that it allowed LOWE to appear to have a positive net worth when, in fact, LOWE had a negative net worth at the time he closed on his mortgage loan. LOWE's mortgage loan balance remains above $225,000 today and the loan is now in foreclosure.
Fraud on Yonkers Resident
The Complaint alleges that LOWE also defrauded a Yonkers resident who is identified as "John Doe," of $66,000. LOWE told John Doe that he needed $66,000 in connection with his purchase of his second home in Georgia and that he would repay the loan within a few days. When John Doe asked LOWE to repay the loan, LOWE gave John Doe a check that was returned due to insufficient funds. Thereafter, LOWE promised to repay the loan at various times but failed to do so. He told John Doe on multiple occasions that he did not have the money to repay the loan when he, in fact, did have the money, the Complaint alleges.
LOWE, 52, of New York City, faces upon conviction a maximum sentence of 20 years' imprisonment on the count charging wire fraud in connection with the scheme to defraud the DSCC; a maximum sentence of 30 years' imprisonment on the count charging him with causing an employee of a federally insured bank to make a false report; a maximum of three years' imprisonment on each of the three counts charging him with subscribing to false tax returns; a maximum of one year's imprisonment on each of the three counts charging him with failure to file tax returns; and a maximum of 20 years' imprisonment on the count charging wire fraud in connection with the scheme to defraud the Yonkers resident.
Mr. Bharara praised the investigative work of IRS-CI and the investigators from the United States Attorney's Office for the Southern District of New York.
This prosecution is being handled by the Office's White Plains Division. Assistant U.S. Attorneys Perry A. Carbone and James McMahon are in charge of the prosecution.
The charges contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
LoweMelvin.Complaint
Navajo Man Sentenced to 141 Months for Home InvasionRead the Press Release
PHOENIX– On Oct. 25, 2013, Lee Kinder Tso, 51, of Many Farms, Ariz., and a member of the Navajo Nation, was sentenced by U.S. District Judge Neil V. Wake to 141 months in federal prison. He had previously pleaded guilty on March 15, 2013, to assault with a dangerous weapon and brandishing a firearm in furtherance of a crime of violence
On Feb. 3, 2012, Tso used his rifle to shoot two victims in the chest, causing serious injuries to the victims. He was angry with the victims because he believed they harmed his nephews earlier in the day. Tso and others drove to a residence and shot one victim in the chest after he answered the door. The second victim came out of a bedroom, and Tso also shot him in the chest. Both victims survived following lengthy hospitalizations and multiple surgeries.
The investigation in this case was conducted by the Federal Bureau of Investigation and the Navajo Nation Police Department. The prosecution was handled by Jennifer E. Green, Assistant U.S. Attorney, District of Arizona, Phoenix.
CASE NUMBER: CR-08051-PHX-NVW
RELEASE NUMBER: 2013-082_TsoFor more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
Mingo Pill Dealer Sentenced to 4 Years in Federal Prison for Oxycodone ConspiracyRead the Press Release
Napier illegally mailed package containing oxycodone tablets, arrested by undercover officer
CHARLESTON, W.Va. – A Mingo County man who mailed a package that contained more than 1,700 oxycodone pills was sentenced to four years in federal prison, U.S. Attorney Booth Goodwin announced today. Patrick Warren Napier, 41, of Dingess, W.Va., previously pleaded guilty in July to conspiracy to distribute oxycodone. On April 29, 2011, investigators with the United States Postal Inspection Service intercepted a package in Peach Creek, W.Va. The package, which contained 1,789 30-milligram oxycodone tablets, had been mailed by Napier. The package was intended for his associate, Michael Fortuna. Napier told investigators that he mailed the package containing the oxycodone and expected to be paid once the pills were sold.
Napier also told investigators that he obtained oxycodone pills from a source of supply located in Florida beginning in April 2011.
Michael Ray Fortuna, 45, of Peach Creek, Logan County, W.Va., previously pleaded guilty in January to conspiracy to distribute oxycodone. Fortuna faces up to 20 years in prison when he is sentenced on November 19, 2013.
The United States Postal Inspection Service, the Drug Enforcement Administration and the Logan County Sheriff’s Department conducted the investigation. Assistant United States Attorney Joshua Hanks handled the prosecution. The sentence was imposed by United States District Judge Thomas E. Johnston.
This case was prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers in communities across the Southern District.
Mingo Pill Dealer Sentenced to 4 Years in Federal Prison for Oxycodone ConspiracyRead the Press Release
Napier illegally mailed package containing oxycodone tablets, arrested by undercover officer
CHARLESTON, W.Va. – A Mingo County man who mailed a package that contained more than 1,700 oxycodone pills was sentenced to four years in federal prison, U.S. Attorney Booth Goodwin announced today. Patrick Warren Napier, 41, of Dingess, W.Va., previously pleaded guilty in July to conspiracy to distribute oxycodone. On April 29, 2011, investigators with the United States Postal Inspection Service intercepted a package in Peach Creek, W.Va. The package, which contained 1,789 30-milligram oxycodone tablets, had been mailed by Napier. The package was intended for his associate, Michael Fortuna. Napier told investigators that he mailed the package containing the oxycodone and expected to be paid once the pills were sold.
Napier also told investigators that he obtained oxycodone pills from a source of supply located in Florida beginning in April 2011.
Michael Ray Fortuna, 45, of Peach Creek, Logan County, W.Va., previously pleaded guilty in January to conspiracy to distribute oxycodone. Fortuna faces up to 20 years in prison when he is sentenced on November 19, 2013.
The United States Postal Inspection Service, the Drug Enforcement Administration and the Logan County Sheriff’s Department conducted the investigation. Assistant United States Attorney Joshua Hanks handled the prosecution. The sentence was imposed by United States District Judge Thomas E. Johnston.
This case was prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers in communities across the Southern District.
Mexican Truck Driver Sentenced to 120 Months for Drug Trafficking with Wooden-HampersRead the Press Release
LAREDO, Texas – Mexican national Moises Rodriguez-Ortega, 36, has been ordered to federal prison for 10 years for possessing with intent to distribute almost 10 kilograms of methamphetamine, announced United States Attorney Kenneth Magidson. Rodriguez-Ortega pleaded guilty July 8, 2013.
Today, U.S. District Judge Diana Saldana handed Rodriguez-Ortega the total 120-month-term of federal imprisonment. As a non-U.S. citizen, he is expected to face deportation proceedings following release from prison.
On May 21, 2013, Rodriguez-Ortega was arrested at the Columbia Solidarity International Bridge in Laredo after applying for admission into the United States. He was driving a tractor-trailer, and upon inspection by United States Customs and Border Protection (CBP) agents, was referred to secondary inspection for further investigation.
CBP agents discovered methamphetamine inside his tractor cab. Agents had located wooden-wicker hampers and drug dogs alerted to the presence of narcotics. Upon X-ray examination of these hampers, CBP agents discovered and extracted approximately 9.4 kilograms of methamphetamine from the wooden frames. Upon questioning, Rodriguez-Ortega admitted to smuggling the narcotics into the United Stated with the intention to traffic and sell these drugs throughout the United States.
The case was investigated by Homeland Security Investigations (HSI) and CBP. Assistant U.S. Attorney Sanjeev Bhasker is prosecuting.
Mercer County, N.J., Man Pleads Guilty to Production of Child PornographyRead the Press Release
TRENTON, N.J. – A Mercer County, N.J., man today admitted producing images of child sexual abuse, U.S. Attorney Paul J. Fishman announced.
Fredy Arbito, 31, of Hightstown, N.J., pleaded guilty before U.S. District Judge Michael A. Shipp to an information charging him with one count of production of child pornography.
According to documents filed in this case and statements made in court:
From July 2011 to Jan. 28, 2013, Arbito knowingly coerced an 11-year-old girl to engage in sexually explicit conduct for the purpose of transmitting it live over the internet.
The production of child pornography charge to which Arbito pleaded guilty is punishable by a maximum potential penalty of 30 years in prison, with a mandatory minimum of 15 years in prison and a $250,000 fine. Sentencing is scheduled for Feb. 4, 2013.
U.S. Attorney Fishman praised special agents of the Department of Homeland Security’s Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent in Charge Andrew M. McLees, with the investigation leading to today’s charges.
The government is represented by Assistant U.S. Attorney R. Joseph Gribko of the U.S. Attorney’s Office Criminal Division in Trenton.
13-421Defense counsel: James R. Lisa Esq., Jersey City, N.J.
Arbito, Fredy Information
Massachusetts Man Sentenced to 30 Months for Making Hoax Emergency Services CallsRead the Press Release
A Massachusetts man was sentenced to serve 30 months in prison today for engaging in an illegal practice known as “swatting,” in which he made hoax emergency telephone calls reporting an ongoing, dangerous crime to elicit an armed police response from a SWAT team to a specific location, typically in order to harass someone he believed was at the location.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney Carmen M. Ortiz of the District of Massachusetts made the announcement after sentencing by U.S. District Court Judge Timothy Hillman.
Nathan Hanshaw, 22, of Athol, Mass., pleaded guilty on Aug. 30, 2013, to a three-count information charging him with one count of making interstate threats, one count of threats to use explosives and one count of threats to use a firearm.According court records, Hanshaw typically claimed in his swatting calls that he was a fugitive who was wanted by the authorities; that he was armed with weapons, explosives and nerve agents; and that he had taken hostages. He demanded cash and a helicopter ride to Mexico and threatened to detonate his bombs and kill his hostages if his demands were not met. He also threatened to kill any law enforcement personnel who arrived at the location. Hanshaw generally claimed to be, and, because he used techniques to disguise his location, appeared to be, calling from an address that, unbeknownst to the law enforcement officers responding to the call, was the address of his intended swatting victim.
At the change of plea hearing in August, prosecutors told the court that, had the case proceeded to trial, the government would have proven that, from September 2012 through mid-January 2013, Hanshaw made swatting calls to emergency services numbers across the United States, including Denver; Ventura, Calif.; and Waverly, N.Y. In each case, armed police responses ensued. In response to Hanshaw’s swatting call to Ventura, for example, more than 40 local and federal officers arrived at the purported crime scene, a hotel was evacuated, and nearby streets were closed for several hours. His activities created a serious risk of physical harm to innocent victims and caused extensive disruptions to important public services.
The case was investigated by the FBI and is being prosecuted by Trial Attorney Mona Sedky of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Adam Bookbinder of the District of Massachusetts’ Computer Crimes Unit.
Massachusetts Man Sentenced for Making Hoax Emergency Services Calls to Elicit Swat Team ResponseRead the Press Release
BOSTON – An Athol, Mass., man was sentenced today for engaging in an illegal practice known as “swatting,” in which he made hoax emergency telephone calls and falsely reported an ongoing, dangerous crime in order to elicit an armed police response (from a SWAT team) to a specific location, typically in order to harass someone he believed was there.
Nathan Hanshaw, 22, was sentenced to 30 months in prison by U.S. District Court Judge Timothy Hillman as agreed upon in the plea agreement. In August 2013, Hanshaw pleaded guilty to a three-count information charging him with making interstate threats, threats to use explosives, and threats to use a firearm.
Hanshaw, in his swatting calls, typically claimed that he was a fugitive who was wanted by the authorities, was armed with weapons, explosives, and nerve agents, and that he had taken hostages. He demanded cash and a helicopter ride to Mexico and threatened to detonate his bombs and kill his hostages if his demands were not met. He also threatened to kill any law enforcement personnel who arrived at the location. Hanshaw generally claimed to be calling from an address that, unbeknownst to the law enforcement officers responding to the call, was the address of his intended swatting victim
From September 2012 through mid-January 2013, Hanshaw made swatting calls to emergency services numbers across the United States, including Denver, Colorado; Ventura, California; and Waverly, New York. In each case, armed police responses ensued. In response to Hanshaw’s swatting call to Ventura, California, for example, more than 40 local and federal officers arrived at the purported crime scene, a hotel was evacuated, and nearby streets were closed for several hours. His “swatting” activities created a serious risk of physical harm to innocent victims and caused extensive disruptions to important public services.
Acting Assistant Attorney General Mythli Raman and United States Attorney Carmen M. Ortiz made the announcement today. The case was investigated by the Federal Bureau of Investigation with significant assistance from the Massachusetts State Police and the Ventura Country Sherriff’s Department. The case is being prosecuted by Trial Attorney Mona Sedky of the Department of Justice’s Computer Crime and Intellectual Property Section, Criminal Division, and Assistant U.S. Attorney Adam Bookbinder in Ortiz’s Computer Crimes Unit.
Las Cruces Man Sentenced to Twenty Years in Federal Prison for Methamphetamine Trafficking and Firearms ConvictionRead the Press Release
ALBUQUERQUE – Mark Anthony Harriman, 45, of Las Cruces, N.M., was sentenced this morning in Las Cruces federal court to 20 years in federal prison followed by five years of supervised release for his drug trafficking and firearms conviction.
The sentence was announced by Acting U.S. Attorney Steven C. Yarbrough, Special Agent in Charge Joseph M. Arabit of the El Paso Division of the DEA, Special Agent in Charge Bobby Holden of the Las Cruces/Doña Ana County Metro Narcotics Agency and New Mexico State Police Chief Pete N. Kassetas.
Harriman and Agustin Abascal, 27, also of Las Cruces, were arrested in April 2013 based on a criminal complaint charging them with conspiracy to distribute methamphetamine in Doña Ana County, N.M., between Nov. 2012 and March 2013. According to the complaint, Harriman and Abascal sold quantities of methamphetamine to a New Mexico State Police officer and a DEA informant who were acting in undercover capacities during the five month period. Both men have been in federal custody since their arrests.
Harriman pled guilty in July 2013 to a two-count felony information charging him with possession of methamphetamine with intent to distribute and being a felon in possession of a firearm. In entering his guilty plea, Harriman admitted that between Feb. 26, 2013 and March 14, 2013, he obtained methamphetamine from California and sold it in Las Cruces. Harriman also admitted selling an ounce of methamphetamine to an informant on Feb. 26, 2013. He further admitted that he was traveling back from California with two ounces of methamphetamine when he was arrested in this case.
Harriman also admitted that, when federal agents executed a search warrant at his residence, they seized nine firearms and large amounts of ammunition that belonged to him. Harriman acknowledged that he was prohibited from possessing firearms or ammunition because he previously was convicted of two felony offenses. Under the terms of his plea agreement, Harriman agreed to forfeit the firearms and more than 1000 rounds of ammunition seized from his residence in addition to $13,940 in cash.
Abascal also entered a guilty plea in July 2013. He pled guilty to a one-count felony information charging him with distribution of methamphetamine and admitted selling methamphetamine to an undercover officer on five separate occasions between Nov. 1, 2012 and March 7, 2013. Abascal faces a term of ten years to life in prison when he is sentenced. His sentencing hearing has yet to be scheduled.
This case was investigated by the Las Cruces office of the DEA, the Las Cruces/Doña Ana County Metro Narcotics Agency and the New Mexico State Police, and is being prosecuted by Assistant U.S. Attorney Renee L. Camacho of the U.S. Attorney’s Las Cruces Branch Office.
Lafayette Man Sentenced to 121 Months in Prison for Possession of Child PornographyRead the Press Release
LAFAYETTE, La. – United States Attorney Stephanie A. Finley announced today that Ray Hatton III, 31, of Lafayette, was sentenced by U.S. District Judge Richard T. Haik to 121 months in prison and a lifetime of supervised release for possessing child pornography with some of the images involving infants. He pleaded guilty May 13, 2013.According to the evidence presented at the guilty plea, law enforcement authorities determined that Hatton was downloading child pornography using an internet file sharing program. After obtaining a warrant, authorities searched his residence on March 8, 2012, and seized the defendant’s computer. Hatton was found to have downloaded 10 videos of child pornography. Some of the pornography depicted infants and very young children.
“This defendant admitted to downloading one of the most despicable types of child pornography produced,” Finley stated. “Those who download and possess child pornography will be prosecuted to the fullest extent of the law. I hope this serves as a deterrent to anyone seeking to acquire this type of material.”
The Lafayette Police Department and the Department of Homeland Security conducted the investigation. This case is part of Project Safe Childhood, a U.S. Department of Justice nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorneys’ 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 exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The U.S. Attorney’s Office and the U.S. Department of Homeland Security/Homeland Security Investigations/Immigration & Customs Enforcement (ICE) encourages the public to report suspected child predators and any suspicious activity through its toll-free hotline at (866) DHS-2ICE. Investigators are available at all hours to answer hotline calls. Tips or other information can also be submitted to ICE online at www.ice.gov/exec/forms/hsi-tips/tips.asp.
Assistant U.S. Attorney John Luke Walker prosecuted the case.
Lackawanna Store Owner Sentenced for Food Stamp FraudRead the Press Release
BUFFALO, N.Y. – U.S. Attorney William J. Hochul, Jr. announced today that Tofeek Albanna, 37, of Lackawanna, N.Y., who was convicted of food stamp fraud, was sentenced to 15 months in prison by U.S. District Court Judge Richard J. Arcara. The defendant was also ordered to pay $73,400 in restitution to the United States Department of Agriculture, which administers the federal government’s Supplemental Nutrition Assistance Program (“SNAP”), previously known as the Food Stamp Program.
Assistant U.S. Attorneys Robert C. Moscati and John E. Rogowski, who handled the prosecution of this case, stated that Albanna owned and operated LA Fashions on Holland Avenue in Lackawanna. Albanna primarily stocked clothing items along with a few food items in the store. The SNAP program requires that those receiving benefits purchase certain approved food items. Despite selling mostly clothing items, between February 2009 and April 2010, the defendant redeemed over $100,000 in SNAP benefits.
A lengthy investigation by state and federal law enforcement revealed that Albanna routinely sold clothing items to customers in exchange for SNAP benefits. In addition, the defendant paid cash, for a significant premium, for SNAP credits. The investigation, which utilized undercover officers who purchased clothing items with SNAP benefits, determined that the defendant fraudulently redeemed $73,400 in SNAP benefits.
The sentencing is the culmination of an investigation on the part of Special Agents of the United States Department of Agriculture, Office of Inspector General, Special Agents of the Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent in Charge James C. Spero, the Federal Bureau of Investigation, under the direction of Special Agent in Charge Brian P. Boetig, and the New York State Police, under the direction of Major Michael Cerretto.Kewa Pueblo Man Sentenced to Twenty-Four Months in Federal Prison for Child Sexual Abuse ConvictionRead the Press Release
ALBUQUERQUE – Calvin Tenorio, Sr., 65, a member and resident of Kewa Pueblo, was sentenced this afternoon to 24 months in federal prison followed by five years of supervised release for his child sex abuse conviction. Tenorio will be required to register as a sex offender when he completes his prison sentence.
Tenorio was arrested on Jan. 10, 2013, based on a criminal complaint charging him with abusive sexual contact with a minor and subsequently was indicted on that same charge. According to the indictment, Tenorio sexually assaulted a child who had not attained the age of 12 years on Nov. 28, 2012, by touching the child’s clothed genitals.
According to court filings, a member of the child’s family reported the sexual assault to Kewa Pueblo officials on Nov. 28, 2012, and the Pueblo officials promptly referred the report to the BIA for investigation. After preliminary investigation, the BIA arrested Tenorio on tribal charges and referred the matter to the FBI for further investigation. Tenorio remained in tribal custody until his arrest on federal charges and has been in federal custody since that time.
On April 9, 2013, Tenorio pled guilty to the indictment without the benefit of a plea agreement. During his plea hearing, Tenorio admitted sexually assaulting a child under 12 years of age in a residence located in Kewa Pueblo.
This case was investigated by the Albuquerque and Santa Fe offices of the FBI and the Southern Pueblos Agency of the BIA’s Office of Justice Services. The case was prosecuted by Assistant U.S. Attorney Elaine Y. Ramirez 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/.
Justice Department and the Commonwealth of Puerto Rico <br /> Jointly Select Juan Mattos Jr. to Oversee Reform of the Puerto Rico Police DepartmentRead the Press Release
The Justice Department announced today that, jointly with the Commonwealth of Puerto Rico, it is moving in the U.S. District Court for the appointment of Juan Mattos Jr. as Technical Compliance Advisor (TCA). Mattos will be responsible for evaluating the implementation of a comprehensive settlement agreement to reform the Puerto Rico Police Department (PRPD). He will begin his term as TCA pursuant to appointment by U.S. District Court Judge Gustavo A. Gelpí.
Under the agreement, the TCA will assist in determining whether the terms of the reform plan have been fully implemented in a timely manner. The TCA’s assessment will include a thorough review of PRPD’s policies, training curricula, standard operating procedures, plans, protocols and other operational documents related to the agreement. The TCA will also assess whether the implementation of the agreement results in constitutional policing, increased community trust and the professional treatment of individuals by PRPD officers. To this end, the TCA will engage community stakeholders including representatives of civic and community organizations, minority communities, lesbian, bisexual, gay, transgender and transsexual communities, student and labor groups, civil rights organizations, and women’s advocacy groups to ensure they have a voice in the reform process. The TCA will also assess and report on PRPD’s compliance, as well as provide technical assistance to promote constitutional policing. Once appointed, Mattos will assist PRPD officials with the development of action plans to modernize its administrative systems and professionalize its police force.
The parties jointly selected Mattos to serve as TCA given his extensive experience in law enforcement and his efforts in the successful implementation of a federal consent decree. Mattos is a career law enforcement officer with nearly 40 years of service in the New Jersey State Police (NJSP) and the United States Marshals Service. During his tenure with the NJSP, Mattos served as a state trooper, an equal employment opportunity/affirmative action officer, as Commandant of the NJSP Academy and as Commander of both the Division Staff and Intelligence Services Sections. Mattos also actively supervised the efforts of the NJSP to comply with a 1999 consent decree related to racial profiling. Under his leadership, the NJSP received national recognition for its patrol practices and procedures. Following his retirement from the NJSP, Mattos joined the Middlesex County Prosecutor’s Office where he oversaw the development of policies and procedures for the office’s Bias Crime Unit and established a community outreach initiative with minority community leaders and advocacy groups in Middlesex County. Currently, Mattos serves as the U.S. Marshal for the District of New Jersey, having been appointed to the position by President Obama in July 2011. Mattos intends to hire several other experienced law enforcement professionals to assist him in assessing compliance with the agreement.
“We are pleased to have worked collaboratively with the Commonwealth to select Mr. Mattos, who we believe is uniquely positioned to assess and report on the Puerto Rico Police Department’s reform efforts,” said Jocelyn Samuels, Acting Assistant Attorney General for the Civil Rights Division. “We look forward to working with Mr. Mattos, the Commonwealth of Puerto Rico and the community to ensure effective and constitutional policing throughout the commonwealth.”
A copy of the complaint, the final agreement and the September 2011 letter of findings can be found at www.justice.gov/crt If individuals have information that is relevant to the case and PRPD, you may contact the Department of Justice at [email protected] or at 877-871-9726.
Justice Department Files Lawsuit in Massachusetts AgainstIron Workers Union Trustees and Pension Fund to Enforce the Employment Rights of Navy Reserve MemberRead the Press Release
The Civil Rights Division and U.S. Attorney Carmen M. Ortiz announced today the filing of a complaint alleging that the Iron Workers District Council of New England Pension Fund (the Pension Fund) and the Trustees of the Iron Workers District Council of New England Pension Fund (the Trustees) willfully violated the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) by failing to credit U.S. Navy Reserve Member Thomas Shea, a member of the International Association of Bridge, Structural, Ornamental and Reinforcing Iron Workers, Local 7 (the Union), with service time while he was serving in the armed forces in Afghanistan. The suit was filed in the Federal District Court for the District of Massachusetts.
USERRA requires that service members who leave their civilian jobs to serve in the military be treated as not having incurred a break in service with regard to their pension plans. USERRA further provides that each period served by a person in the uniformed services shall upon reemployment be deemed to constitute service with the employer(s) maintaining the plan for the purpose of determining the nonforfeitabilty of the person's accrued benefits and for the purpose of determining the accrual of benefits under the plan.
The complaint alleges that the Pension Fund and the trustees violated USERRA by refusing to grant Shea pension credits that he earned while on military duty unless and until he worked at least 300 hours in the one year period following his discharge from the military and accrued 2.5 pension credits, which is equal to 3,000 hours, in the subsequent five year period following his release from active duty. Both of these requirements exceed those placed on members of the Pension Fund who do not take military leave and therefore violate USERRA. The complaint also seeks back payment of annuity contributions that were not made while Shea was on active duty.
“Congress enacted USERRA to protect our men and women in uniform from experiencing exactly this kind of injustice,” said Jocelyn Samuels, Acting Assistant Attorney General for the Department of Justice’s Civil Rights Division. “The Justice Department is committed to vigorously enforcing federal laws that protect the employment rights of our service members.”
“Reservists who are called to active duty sacrifice time away from their jobs to serve their country,” said Ortiz. “USERRA ensures that they are not discriminated against after they have returned from service and that their employment rights are protected. We are committed to vigorously enforcing USERRA’s protections.”
"It is important for all employers and their organizations to realize that the Labor Department is here to protect the employment and reemployment rights of American service members under USERRA," said Assistant Secretary Keith Kelly of the Veterans' Employment and Training Service. "We owe these brave Americans every protection when they return from their military obligations."
The U.S. Department of Labor’s (DOL) Veterans’ Employment and Training Service investigated Shea’s allegations with the assistance of the DOL’s Office of Regional Solicitor. This case is being handled jointly by the Civil Rights Division and the U.S. Attorney’s Office for the District of Massachusetts.
Additional information about USERRA can be found on the Justice Department website: www.servicemembers.gov and www.usdoj.gov/crt/emp, as well as on the Labor Department’s website at www.dol.gov/vets/programs/userra/main.htm.
Justice Department Files Lawsuit Against Iron Workers Union and Pension Fund to Enforce the Employment Rights of Navy Reserve MemberRead the Press Release
BOSTON - The Civil Rights Division and U.S. Attorney Carmen M. Ortiz announced today the filing of a complaint alleging that the Iron Workers District Council of New England Pension Fund (the Pension Fund) and the Trustees of the Iron Workers District Council of New England Pension Fund (the Trustees) willfully violated the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) by failing to credit U.S. Navy Reserve Member Thomas Shea, a member of the International Association of Bridge, Structural, Ornamental and Reinforcing Iron Workers, Local 7 (the Union), with service time while he was serving in the armed forces in Afghanistan. The suit was filed in the Federal District Court for the District of Massachusetts.
USERRA requires that service members who leave their civilian jobs to serve in the military be treated as not having incurred a break in service with regard to their pension plans. USERRA further provides that each period served by a person in the uniformed services shall, upon reemployment, be deemed to constitute service with the employer or employers maintaining the plan for the purpose of determining the nonforfeitability of the person's accrued benefits and for the purpose of determining the accrual of benefits under the plan.
The complaint alleges that the Pension Fund and the Trustees violated USERRA by refusing to grant Shea pension credits that he earned while on military duty unless and until he (1) worked at least 300 hours in the one-year period following his discharge from the military; and (2) accrued 2.5 pension credits, which is equal to 3,000 hours, in the subsequent five-year period following his release from active duty. Both of these requirements exceed the requirements placed on members of the Pension Fund who do not take military leave and therefore violate USERRA. The complaint also seeks back payment of annuity contributions that were not made while Shea was on active duty.
“Reservists who are called to active duty sacrifice time away from their jobs to serve their country,” said Ortiz. “USERRA ensures that they are not discriminated against after they have returned from service and their employment rights are protected. We are committed to vigorously enforcing USERRA’s protections.”
“It is important for all employers and their organizations to realize that the Labor Department is here to protect the employment and reemployment rights of American service members under USERRA,” said Assistant Secretary Keith Kelly of the Veterans' Employment and Training Service. “We owe these brave Americans every protection when they return from their military obligations.”
The U.S. Department of Labor’s Veterans Employment and Training Service investigated Shea’s allegations with the assistance of the Department of Labor’s Office of Regional Solicitor. This case is being handled jointly by the Civil Rights Division in Washington, D.C. and the U.S. Attorney’s Office for the District of Massachusetts.
Civil rights enforcement is a top priority of the Department of Justice and District of Massachusetts. Additional information about USERRA can be found on the Justice Department website: www.servicemembers.gov and www.usdoj.gov/crt/emp, as well as on the Labor Department’s website at www.dol.gov/vets/programs/userra/main.htm
Justice Department Asks Federal Court to Shut DownNorth Mississippi Tax PreparerRead the Press Release
Holly Springs Tax Preparers Allegedly File Fraudulent Tax Returns for Customers
The United States has sued Eric Hardaway, aka Eric Brittenum, and Yvonne Hardaway, seeking to bar them and their business, Hardaway Taxx, from preparing federal tax returns for others, the Justice Department announced today.
The civil injunction complaint, filed in U.S. District Court for the Northern District of Mississippi, alleges that the Hardaways, of Holly Springs, Miss., have prepared federal income tax returns for customers that fraudulently understated their tax liabilities or overstated refunds by claiming frivolous fuel tax credits. According to the complaint, an Internal Revenue Service (IRS) investigation revealed that 156 income tax returns prepared by the Hardaways and audited by the IRS resulted in tax deficiencies. The lawsuit alleges that the tax harm caused by the Hardaways’ misconduct exceeds $321,000 in erroneous refunds issued to taxpayers.
Return preparer fraud is one of the IRS’s Dirty Dozen Tax Scams for 2013, which can be viewed at www.irs.gov/uac/Newsroom/IRS-Releases-the-Dirty-Dozen-Tax-Scams-for-2013 . The IRS has tips for choosing a tax preparer: www.irs.gov/Tax-Professionals/Choosing-a-Tax-Professional . In the past ten years, the Justice Department's Tax Division has obtained injunctions against hundreds of unscrupulous tax-return preparers. Information about these cases is available on the Justice Department Website at www.justice.gov/tax/taxpress2013.htm .
Related Materials:
United States v. Eric Hardaway, etc. et al.
Complaint for Permanent Injunction and Other Relief
Jicarilla Apache Woman Pleads Guilty to Being an Accessory to Sex Abuse Involving a Navajo ChildRead the Press Release
ALBUQUERQUE – Rosabelle Ben, 58, a member of the Jicarilla Apache Nation who resides in Shiprock, N.M., pleaded guilty this afternoon to being an accessory to the sexual abuse of a minor. Under the terms of her plea agreement, Rosabelle Ben will be sentenced to a federal prison term within the range of two to five years followed by a term of supervised release to be determined by the court. Rosabelle Ben will be required to register as a sex offender when she completes her prison sentence.
Rosabelle Ben and co-defendants Herbert Ben, Sr., 63, a member of the Navajo Nation who resides in Shiprock, and Bruce Hamilton, 77, a non-native resident of Shiprock, were arrested in May 2012, based on a criminal complaint alleging child sex abuse offenses. All three subsequently were indicted and charged with sexual abuse of a child between the age of 12 and 16 years, and aiding and abetting the sexual abuse of a child.
In her plea agreement, Rosabelle Ben admitted that between Aug. 1, 2010 and Dec. 11, 2011, she made a child between the ages of 12 and 15 available to Hamilton so that Hamilton could engage in a sexual act with the child. Rosabelle Ben further admitted that Hamilton paid her with money and alcohol for making the child victim available to him. She further admitted that the offense occurred on the Navajo Indian Reservation.
Herbert Ben, Sr., pled guilty on July 31, 2013, to sexual abuse of a minor and admitted that, on a date between Aug. 2010 and Dec. 2011, he sexually abused a minor at a location within the Navajo Reservation. Hamilton pled guilty on Aug. 19, 2013, to sexually abusing a minor and admitted sexually abusing a Navajo child between the age of 12 and 15 on a date between Aug. 2010 and Dec. 2011. Both men admitted committing these crimes on the Navajo Indian Reservation. At sentencing, each man faces a federal prison term within the range of two to five years followed by a term of supervised release to be determined by the court. Each also will be required to register as a sex offender when he completes his prison sentence.
This case was investigated by the Farmington office of the FBI and the Shiprock office of the Navajo Nation Division of Public Safety. It is being prosecuted by Assistant U.S. Attorneys Jacob A. Wishard and Novaline D. Wilson 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/.
Jackson Man Sentenced on Federal Drug ChargeRead the Press Release
Jackson, Miss. – Terrence Womack, 38, of Jackson, was sentenced today by U.S. District Judge Henry T. Wingate to 72 months in federal prison followed by five years of supervised release for possession with intent to distribute more than 28 grams of cocaine base (“crack”),announced U.S. Attorney Gregory K. Davis and FBI Special Agent in Charge Daniel McMullen. Womack was also ordered to pay restitution in the amount of $9,000 to the FBI.
Womack was indicted in connection with “Operation Paperchase”, an extensive investigation targeting illegal narcotics distribution in the City of Jackson. He pled guilty to the charge on July 28, 2013.
This case was investigated by the Federal Bureau of Investigation with assistance from the Drug Enforcement Administration, U.S. Marshals Service, Gulf Coast HIDTA, Organized Crime Drug Enforcement Task Force, Mississippi Bureau of Narcotics, Hinds County Sheriff’s Department, and Jackson Police Department. The case was prosecuted by Assistant United States Attorney Erin Chalk.###
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