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28 October 2013
Jury Convicts El Paso Attorney Marco Delgado in Connection with A Multi-Million Dollar Money Laundering SchemeRead the Press Release
In El Paso 47-year-old El Paso attorney Marco Antonio Delgado, a.k.a. Marco Delgado Licon, faces up to 20 years in federal prison after a jury convicted him of conspiracy to launder up to $600 million in illegal drug proceeds announced United States Attorney Robert Pitman and Homeland Security Investigations Special Agent in Charge Dennis Ulrich.
Based on evidence presented during trial, the jury found that from a period of time between 2007 and 2008, Delgado conspired with other individuals to launder $600 million in illegal drug proceeds for members of the Milenio Drug Trafficking Organization. Two episodes of money laundering demonstrated to the jury included a Department of Homeland Security seizure in September 2007 of $1,000,000 in U.S. Currency traveling from Atlanta, GA to Mexico via El Paso; and, an HSI seizure of $50,000 in drug proceeds, in July 2008, in Chicago, IL, which was transported to El Paso and deposited in Delgado’s Attorney Interest on Lawyers’ Trust Account (IOLTA) bank account.
Delgado, who has remained in federal custody since his arrest in November 2012, is scheduled to be sentenced at 10:30am on January 24, 2014, before United States Senior District Judge David Briones.
Delgado is currently set to go to trial again on November 18, 2013, based on a separate indictment which charges him with two wire fraud counts and 15 money laundering counts. According to that indictment, in January 2010, Delgado, as a legal representative of FGG Enterprises, Inc. (FGG) signed a $121 million contract between FGG and the Comision Federal de Electricidad (CFE), a Mexican-state-owned utility company, for the acquisition and installation of equipment at the Agua Prieta II power plant located in Agua Prieta, Sonora, Mexico. Pursuant to the agreement, payments from CFE to FGG were to be deposited into a FGG bank account located in El Paso. The indictment alleges that Delgado, for the purpose of personal enrichment and without the consent of the sole owner of FGG, submitted a fraudulent written request to the Banco Nacional de Comercio Exterior in Mexico which caused two wire transfers—one on March 8, 2010, in the amount of $20 million and one on July 6, 2010, in the amount of $12 million—to be deposited into a bank account he controlled located in the Turks and Caicos Islands. The indictment further alleges that Delgado subsequently wire transferred approximately $1.15 million from the Turks and Caicos Island bank account to bank accounts in El Paso; Taos, NM; and, Pittsburg, PA, in order to conceal or disguise the nature, location, source ownership or the control of the proceeds from his scheme.
Upon conviction, Delgado faces up 20 years in federal prison per count. An indictment is merely a charge and should not be considered as evidence of guilt. The defendant is presumed innocent until proven guilty in a court of law.
This indictment resulted from an investigation by Homeland Security Investigations (HSI). Assistant United States Attorneys Debra Kanof and Anna Arreola are prosecuting these cases on behalf of the Government.
Jasper County Man Sentenced for Child Pornography ViolationsRead the Press Release
Department of Justice
Office of Public AffairsBEAUMONT, Texas – A 40-year-old Jasper, Texas, man has been sentenced to federal prison for child pornography violations in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
Tracy Jay Chappell pleaded guilty on July 11, 2013 to possession of child pornography and was sentenced to 60 months in federal prison today by U.S. District Judge Marcia Crone.According to information presented in court, on Apr. 4, 2011, Chappell was identified through his IP (Internet Protocol) address during an undercover operation targeting child pornography distribution. The IP address had files available for any computer user connected to the internet to access using publicly available file sharing software. A federal search warrant was later executed at Chappell’s residence on County Road 136 in Jasper. During the search, a personal computer was seized that contained approximately 1,200 files depicting child pornography. Chappell was indicted by a federal grand jury on Feb. 6, 2013
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
This case was investigated by Homeland Security Investigation’s Immigration and Customs Enforcement and the Beaumont Police Department and prosecuted by Assistant U.S. Attorney Randall L. Fluke.Irene Paster and Yolanda Paster Sentenced in U.S. District CourtRead the Press Release
The United States Attorney's Office announced that during a federal court session in Butte, on October 25, 2013, before U.S. District Judge Sam E. Haddon, IRENE PASTER, age 65, and YOLANDA PASTER, age 40, residents of Big Sky, were each sentenced to a term of:
Prison: 10 months
Special Assessment: $25
Supervised Release: 1 year
In addition, YOLANDA PASTER was fined $3,000.
They were sentenced in connection with their guilty pleas to willful failure to file a tax return.
In an Offer of Proof filed by Assistant U.S. Attorney Chad C. Spraker, the government stated it would have proved at trial the following:
A married person filing a joint return must file a tax return if his or her income exceeds $18,700 in gross income for the 2009 calendar year. During the 2009 calendar year, IRENE PASTER and her spouse had gross income totaling $91,322.
IRENE filed an extension of time to file an IRS Form 1040 for the 2009 tax year, which created an extension date of October 15, 2010. IRENE however, willfully failed to file a 2009 return on or before October 15, 2010.
An unmarried person, who is not a surviving spouse or head of household, must file a tax return if his or her income exceeds $9,350 in gross income for the 2009 calendar year. During the 2009 calendar year, YOLANDA PASTER, Irene(s daughter, had a gross income totaling $60,413.
YOLANDA filed an extension of time to file an IRS Form 1040 for the 2009 tax year, which created an extension date of October 15, 2010. YOLANDA, however, willfully failed to file a 2009 return on or before October 15, 2010.
Because there is no parole in the federal system, the "truth in sentencing" guidelines mandate that they will likely serve all of the time imposed by the court. In the federal system, they do 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 a cooperative effort between the Federal Bureau of Investigation, the Criminal Investigation Division of the Internal Revenue Service, and the U.S. Secret Service.
Inmate Sentenced for Assault That Left Fellow Inmate HospitalizedRead the Press Release
ALEXANDRIA, La. – United States Attorney Stephanie A. Finley announced today that Ernest Prado, 48, Uvalde, Texas, was sentenced by U.S. District Judge Dee D. Drell to 84 months in prison with three years of supervised release for assaulting a fellow inmate. He pleaded guilty July 23, 2013.According to evidence presented at the guilty plea, officials for the U.S. Penitentiary in Pollock, La., on November 29, 2010 observed Prado and fellow inmate Gumaro Lopez in the recreation yard assaulting another inmate using homemade icepick-type weapons. When the corrections officers approached to intervene, Prado and Lopez stopped the assault and threw the weapons on the ground. The injured inmate was transported to a local hospital and was found to have sustained approximately 15 puncture wounds to his upper torso. The assault was captured on video.
The FBI-Alexandria Resident Agency and the Federal Bureau of Prisons conducted the investigation. Assistant U.S. Attorney Earl M. Campbell prosecuted the case.
Idaho U.S. Attorney's Office, Civil Rights Division, FBI Conclude Lengthy Investigation into Prison AssaultsRead the Press Release
BOISE — After a lengthy investigation and review of more than three years, the U.S. Attorney's Office for the District of Idaho announced today that the Department of Justice is declining prosecution under federal criminal civil rights statutes of inmate-on-inmate assaults at the Idaho Correctional Center. The investigation examined whether any prison correctional staff had criminal liability for inmate-on-inmate assaults occurring between 2006 and 2011, including an assault, captured on videotape, of inmate Hanni Elabed on January 18, 2010.
The incidents were investigated by the Federal Bureau of Investigation and reviewed by prosecutors in both the U.S. Attorney’s Office and the U.S. Department of Justice, Civil Rights Division, Criminal Section. United States Attorney Wendy J. Olson called the investigation and prosecutorial review “detailed and thorough.” “We pursued and obtained all the information necessary to make a prosecutive decision,” she said. The investigation covered numerous reported assaults. According to Olson, investigators and prosecutors reviewed thousands of pages of court documents, prison records, photographs and videotapes and conducted numerous interviews of correctional staff.
Under federal criminal civil rights statutes, a law enforcement officer, including a correctional officer, commits a criminal act when he or she willfully fails to stop an assault or is deliberately indifferent to an inmate who is in need of medical care. A person acts willfully under the law when the person knows what he or she is doing is wrong and chooses to do it anyway. Correctional officers who follow prison policies or training that direct them to act in a certain way typically do not act willfully, even if the policy ultimately is determined to be inappropriate. “Inmate-on-inmate violence at the Idaho Correctional Center has certainly been problematic,” said Olson. “But, under federal criminal civil rights laws, this investigation necessarily focused on whether one or more correctional staff willfully or with deliberate indifference placed inmates in situations where there was actual knowledge of a substantial risk of serious harm to the inmate.”
A decision not to prosecute may be made for a variety of reasons, Olson said, including insufficiency of evidence to prove the correctional officer acted willfully. “The statute sets out a tough standard in cases involving allegations of misconduct by a correctional officer,” she said. “It requires that we be cautious, thorough and deliberative, and that's what we’ve been in this case. We determined that under the circumstances, none of these assaults were incidents where we could prove the elements of a federal offense beyond a reasonable doubt. In such situations, we are obligated to decline prosecution. We do so here.”
U.S. Attorney Olson also stated that under the circumstances found by the FBI and reviewed by experienced criminal civil rights prosecutors, the various civil lawsuits brought by inmates against the Corrections Corporation of America, the private company that runs the Idaho Correctional Center, were a more appropriate vehicle for addressing the assaults that the investigation examined. Olson said that the federal criminal investigation did not cover recent admissions by Idaho Correctional Center that its staff did not work all of the hours billed to the State of Idaho.
“Along with the FBI and Civil Rights Division, we remain committed to vigorously and thoroughly investigating allegations of law enforcement officer misconduct,” said Olson. “All of law enforcement has an interest in ensuring that those who are vested with the authority to enforce the law do not abuse it.”
Gross Ile Businessman Convicted in Mortgage Fraud CaseRead the Press Release
A Grosse Ile businessman was found guilty today by a federal jury of conspiracy and one count of wire fraud, announced United States Attorney Barbara L. McQuade.
U.S. Attorney McQuade was joined in the announcement by Paul M. Abbate, Special Agent in Charge of the Detroit, Michigan office of the Federal Bureau of Investigation.
The jury convicted Richard Dean Woolsey, 42, after a two-week trial before U.S. District Judge Avern Cohn.
The evidence at trial showed that from 2006 to 2008, Woolsey conspired and defrauded mortgage lenders in numerous transactions in Michigan and Tennessee. Using his own real estate and appraisal companies, Woosley orchestrated millions of dollars of fraudulent mortgage transactions by directing the activities of bank employees, buyers, appraisers and closing agents. To complete the scheme, he disguised the source of down payments, provided false and inflated appraisals for properties and provided false income information for buyers to bolster their creditworthiness to qualify for mortgage loans.
Woolsey was convicted of wire fraud and conspiracy to commit wire fraud. Each count carries a maximum possible penalty of 20 years in prison and a $250,000 fine.
We all pay the price for mortgage fraud," McQuade said. "This crime damages the integrity of our real estate markets and undermines the ability of lending institutions to protect themselves from debilitating losses, which leads to higher costs for all of us," McQuade said.
Special in Charge Abbate stated, “As reflected in the investigation of Mr. Woolsey’s criminal activity and his conviction today, the FBI takes mortgage fraud very seriously. These crimes, particularly those as egregious as Mr. Woolsey’s, not only negatively impact real estate markets, banks, and the financial industry, but hurt our entire community. The FBI will continue to aggressively investigate these crimes.”
Sentencing will be set after a presentence investigation by the United States Probation Department. Bond was continued.
Girl's Former Tennis Coach SentencedFor Soliciting Her for Child PornographyRead the Press Release
KANSAS CITY, KAN. - A Missouri man who coached youth tennis has been sentenced to 78 months in federal prison for soliciting a minor girl he coached to send him sexually explicit photos of herself, U.S. Attorney Barry Grissom said today. The defendant also was ordered to pay $15,000 in restitution.
Rex Haultain, 56, Parkville, Mo., pleaded guilty to one count of soliciting child pornography. In his plea, he admitted that in 2009 he told a minor girl he was coaching that she sexually aroused him. While traveling to a tournament in the summer of 2010, he showed her a picture of his penis on a cell phone. In the fall of 2010 he began asking her to send him photos of herself naked, leading eventually to his sexually molesting her.
At sentencing, the victim, now 18, read a statement saying Haultain manipulated her by exploiting her desire to become an outstanding tennis player. Her statement read in part: “Not a day goes by that I don’t think about what happened to me. I believe that will be the case for a long time, and maybe even for the rest of my life.”
Grissom commended the Overland Park Police Department, the FBI, Victim-Witness Specialist Vivian VanVleet and Assistant U.S. Attorney Scott Rask for their work on the case.
Frederick and Carey Gonzales Sentenced to Federal Prison for Child Pornography ConvictionsRead the Press Release
ALBUQUERQUE – Frederick Gonzales, 43, and his wife Carey Gonzales, 37, both of Albuquerque, N.M., were sentenced this morning for their convictions on federal child pornography charges. Frederick Gonzales was sentenced to 97 months in federal prison followed by 15 years of supervised release. Carey Gonzales was sentenced to 36 months in federal prison followed by 20 years of supervised release. Each also was ordered to pay $500 in restitution to the victim whose image was at issue in the child pornography offenses of conviction. Both will be required to register as sex offenders after they complete their respective prison sentences.
The sentences imposed on the couple were announced by Acting U.S. Attorney Steven C. Yarbrough, New Mexico Attorney General Gary K. King, Carol K.O. Lee, Special Agent in Charge of the Albuquerque Division of the FBI, and Bernalillo County Sheriff Dan Houston.
Frederick and Carey Gonzales were arrested on state child pornography charges on Jan. 11, 2013. At that time, Frederick Gonzales was the incoming president of Albuquerque’s Young America Football League (YAFL), and Carey Gonzales was employed as a kindergarten teacher’s aide by the Albuquerque Public Schools (APS). Shortly thereafter, the YAFL removed Frederick Gonzales from his position with the organization and APS fired Carey Gonzales. On Jan. 18, 2013, the couple was arrested on criminal complaints alleging federal child pornography charges by members of the New Mexico Internet Crimes Against Children (ICAC) Task Force.
Frederick and Carey Gonzales were indicted on Feb. 6, 2013 in a six-count indictment charging Frederick Gonzales with three counts of receipt of visual depictions of minors engaged in sexually explicit conduct and two counts of possession of visual depictions of minors engaged in sexually explicit conduct. The indictment also charged Carey Gonzales with one count of possessing visual depictions of minors engaged in sexually explicit conduct.
The charges against Frederick and Carey Gonzales were the result of an undercover investigation initiated by the New Mexico Attorney General’s Office in Sept. 2012, that identified an IP Address subscribed to Frederick Gonzales as one that was used to possess, receive and distribute child pornography. As a result of the investigation, on Jan. 11, 2013, the Bernalillo County Sheriff’s Office executed a search warrant at the Gonzales residence and seized computers and computer-related media that contained videos and images consistent with child pornography.
On May 29, 2013, Frederick Gonzales entered a guilty plea to Count 1 of the indictment charging him with receipt of child pornography. In his plea agreement, Frederick Gonzales acknowledged that, on Jan. 11, 2013, he voluntarily participated in a recorded interview during which he admitted watching child pornography videos and that he had been downloading child pornography videos using a file-sharing program for approximately six months. On that same day, Carey Gonzales entered a guilty plea to Count 6 of the indictment charging her with possession of child pornography and admitted watching child pornography videos that her husband downloaded and saved.
This case was prosecuted by Assistant U.S. Attorney Charlyn E. Rees and was investigated by the following members of the New Mexico ICAC Task Force: the New Mexico Attorney General’s Office, the Bernalillo County Sheriff’s Office, the Albuquerque office of the FBI and the New Mexico Regional Computer Forensic Lab.
The case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice (DOJ) to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and DOJ’s Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/.
The case also was brought as part of the New Mexico ICAC Task Force’s mission, which is to locate, track, and capture Internet child sexual predators and Internet child pornographers in New Mexico. There are 64 federal, state and local law enforcement agencies associated with the ICAC Task Force, which is funded by a grant administered by the New Mexico Attorney General’s Office. Anyone with information relating to suspected child predators and suspected child abuse is encouraged to contact federal or local law enforcement.
Former President of Port Arthur, Texas, Chemical Company Sentenced for Federal Crimes Related to Employee DeathsRead the Press Release
The former president of Port Arthur Chemical and Environmental Services LLC (PACES) has been sentenced for occupational safety crimes which resulted in the death of an employee, announced Robert G. Dreher, Acting Assistant Attorney General of the Justice Department’s Environment and Natural Resources Division and John M. Bales, U.S. Attorney for the Eastern District of Texas.
Matthew Lawrence Bowman, 41, of Houston, pleaded guilty on May 9, 2013, to violating the Occupational Safety and Health Act (OSH Act) and making a false statement and was sentenced to serve 12 months in federal prison today by U.S. District Judge Marcia Crone. Bowman was also ordered to pay fines in the amount of $5,000.
Bowman admitted to not properly protecting PACES employees from exposure to hydrogen sulfide, a poisonous gas resulting in the death of truck driver Joey Sutter on Dec. 18, 2008. In addition, Bowman admitted to directing employees to falsify transportation documents to conceal that the wastewater was coming from PACES after a disposal facility put a moratorium on all shipments from PACES after it received loads containing hydrogen sulfide.
“Today’s sentence is a just punishment for Bowman’s actions, which placed workers at unacceptable risk and had fatal consequences,” said Acting Assistant Attorney General Dreher. “The Justice Department and the U.S. Attorney’s Offices will continue to work with our law enforcement partners to vigorously investigate and prosecute those who violate the laws enacted to ensure the safety of workers handling hazardous materials and to prevent the kind of tragedies that occurred in this case.”
“The government’s prosecution of Matthew Bowman is now complete. While Mr. Bowman is being held accountable for his criminal conduct, and that is appropriate, there is no amount of time in prison; no amount of criminal fine that can be levied that will compensate for the loss of life at PACES. We extend our deepest condolences and well wishes to the friends and family of Mr. Sutter, who died pitilessly and needlessly because of the criminally negligent actions of Matthew Bowman,” said U.S. Attorney Bales. “The agents and prosecutors conducted an outstanding investigation and prosecution.”
"The sentencing today is a clear signal of the U.S. Department of Transportation’s (USDOT), and its Office of Inspector General’s (OIG) commitment to protecting the public from illegally transported hazardous materials,” said Max Smith, regional Special Agent-in-Charge, USDOT OIG. “Working with our law enforcement and prosecutorial colleagues we will continue our vigorous efforts to prosecute to the fullest extent of the law those who would seek to disregard the Nation’s transportation laws and endanger the public.”
“Environmental violations are serious crimes, and in a worst-case scenario, they can kill people,” said Ivan Vikin, special Agent in Charge of EPA’s criminal enforcement program in Texas. “In this case, a senior manger’s actions led directly to the death of one of his employees. This is why we have laws regarding the safe and legal handling of hazardous materials. Enforcement of these laws must be consistent and uncompromising.”
“When a worker loses his or her life on the job, it has a ripple effect on their families, friends, community and the workplace. Matt Bowman and PACES knowingly violated workplace safety standards that led to Joey Sutter's death,” said OSHA's Deputy Regional Administrator Eric Harbin in Dallas. “OSHA standards are in place to protect workers and employers will be held accountable when they fail to follow these standards.”
According to information presented in court, Bowman was president and owner of PACES, located in Port Arthur, Texas, and CES Environmental Services (CES) located in Houston. PACES was in operation from November 2008 to November 2010, and was in the business of producing and selling caustic materials to paper mills. The production of caustic materials involved hydrogen sulfide, a poisonous gas. According to the National Institute for Occupational Safety and Health, hydrogen sulfide is an acute toxic substance that is the leading cause of sudden death in the workplace. Employers are required by OSHA to implement engineering and safety controls to prevent employees from exposure above harmful limits of hydrogen sulfide.
Bowman was responsible for approving and directing PACES production operations, the disposal of hydrogen sulfide wastewater, and ensuring implementation of employee safety precautions. In some cases, Bowman personally handled the investigation of work-related employee injuries, directed the transportation of PACES wastewater, and determined what safety equipment could be purchased or maintained. In the cases at issue, hazardous materials were transported illegally with false documents and without the required placards. Most importantly, the workers were not properly protected from exposure to hazardous gases. The exposure resulted in the deaths of two employees, Joey Sutter and Charles Sittig, who were truck drivers, at the PACES facility on Dec. 18, 2008 and Apr. 14, 2009. Placarding is critical to ensure the safety of first responders in the event of an accident or other highway incident. Bowman and PACES were indicted by a federal grand jury on July 18, 2012.
This case was investigated by EPA Criminal Investigation Division; the U.S. Department of Transportation Office of Inspector General; the Texas Commission on Environmental Quality - Environmental Crimes Unit, part of the Texas Environmental Enforcement Task Force; the Texas Parks & Wildlife Department - Environmental Crimes Unit; the Houston Police Department - Major Offenders, Environmental Investigations Unit; the Travis County, Texas - District Attorney’s Office; the Harris County, Texas, District Attorney’s Office - Environmental Crimes Division; the Houston Fire Department; OSHA; the U.S. Coast Guard; the Port Arthur Police Department; and the Port Arthur Fire Department.
The case was prosecuted by the U.S. Attorney’s Office for the Eastern District of Texas and the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division.Former President of Port Arthur Chemical Company Sentenced for Federal Crimes Related to Employee DeathsRead the Press Release
Department of Justice
Office of Public AffairsBEAUMONT, Texas – The former president of Port Arthur Chemical and Environmental Services, LLC (PACES) has been sentenced for occupational safety crimes which resulted in the death of an employee, announced John M. Bales, U.S. Attorney for the Eastern District of Texas, and Robert G. Dreher, Acting Assistant Attorney General of the Justice Department’s Environment and Natural Resources Division
Matthew Lawrence Bowman, 41, of Houston, pleaded guilty on May 9, 2013, to violating the Occupational Safety and Health Act (OSH Act) and making a false statement and was sentenced to 12 months in federal prison today by U.S. District Judge Marcia Crone. Bowman was also ordered to pay fines in the amount of $5,000.Bowman admitted to not properly protecting PACES employees from exposure to hydrogen sulfide, a poisonous gas resulting in the death of truck driver Joey Sutter on Dec. 18, 2008. In addition, Bowman admitted to directing employees to falsify transportation documents to conceal that the wastewater was coming from PACES after a disposal facility put a moratorium on all shipments from PACES after it received loads containing hydrogen sulfide.
“The government’s prosecution of Matthew Bowman is now complete. While Mr. Bowman is being held accountable for his criminal conduct, and that is appropriate, there is no amount of time in prison; no amount of criminal fine that can be levied that will compensate for the loss of life at PACES. We extend our deepest condolences and well wishes to the friends and family of Mr. Sutter, who died pitilessly and needlessly because of the criminally negligent actions of Matthew Bowman,” said U.S. Attorney John M. Bales. “The agents and prosecutors conducted an outstanding investigation and prosecution.”
“Today’s sentence is a just punishment for Bowman’s actions, which placed workers at unacceptable risk and had fatal consequences,” said Robert G. Dreher, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “The Justice Department and the U.S. Attorney’s Offices will continue to work with our law enforcement partners to vigorously investigate and prosecute those who violate the laws enacted to ensure the safety of workers handling hazardous materials and to prevent the kind of tragedies that occurred in this case.”
“The sentencing today is a clear signal of the U.S. Department of Transportation’s (USDOT), and its Office of Inspector General’s (OIG) commitment to protecting the public from illegally transported hazardous materials,” said Max Smith, regional Special Agent-in-Charge, USDOT OIG. “Working with our law enforcement and prosecutorial colleagues we will continue our vigorous efforts to prosecute to the fullest extent of the law those who would seek to disregard the Nation’s transportation laws and endanger the public.”
“Environmental violations are serious crimes, and in a worst-case scenario, they can kill people,” said Ivan Vikin, special Agent in Charge of EPA’s criminal enforcement program in Texas. “In this case, a senior manger’s actions led directly to the death of one of his employees. This is why we have laws regarding the safe and legal handling of hazardous materials. Enforcement of these laws must be consistent and uncompromising.”
"When a worker loses his or her life on the job, it has a ripple effect on their families, friends, community and the workplace. Matt Bowman and PACES knowingly violated workplace safety standards that led to Joey Sutter's death," said OSHA's Deputy Regional Administrator Eric Harbin in Dallas. "OSHA standards are in place to protect workers and employers will be held accountable when they fail to follow these standards."
The case was prosecuted by the U.S. Attorney’s Office for the Eastern District of Texas and the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division.
According to information presented in court, Bowman was president and owner of PACES, located in Port Arthur, Texas, and CES Environmental Services (CES) located in Houston. PACES was in operation from November 2008 to November 2010, and was in the business of producing and selling caustic materials to paper mills. The production of caustic materials involved hydrogen sulfide, a poisonous gas. According to the National Institute for Occupational Safety and Health, hydrogen sulfide is an acute toxic substance that is the leading cause of sudden death in the workplace. Employers are required by OSHA to implement engineering and safety controls to prevent employees from exposure above harmful limits of hydrogen sulfide.
Bowman was responsible for approving and directing PACES production operations, the disposal of hydrogen sulfide wastewater, and ensuring implementation of employee safety precautions. In some cases, Bowman personally handled the investigation of work-related employee injuries, directed the transportation of PACES wastewater, and determined what safety equipment could be purchased or maintained. In the cases at issue, hazardous materials were transported illegally with false documents and without the required placards. Most importantly, the workers were not properly protected from exposure to hazardous gases. The exposure resulted in the deaths of two employees, Joey Sutter and Charles Sittig, who were truck drivers, at the PACES facility on Dec. 18, 2008 and Apr. 14, 2009. Placarding is critical to ensure the safety of first responders in the event of an accident or other highway incident. Bowman and PACES were indicted by a federal grand jury on July 18, 2012.
This case was investigated by EPA Criminal Investigation Division; the U.S. Department of Transportation Office of Inspector General; the Texas Commission on Environmental Quality - Environmental Crimes Unit, part of the Texas Environmental Enforcement Task Force; the Texas Parks & Wildlife Department - Environmental Crimes Unit; the Houston Police Department - Major Offenders, Environmental Investigations Unit; the Travis County, Texas - District Attorney’s Office; the Harris County, Texas, District Attorney’s Office - Environmental Crimes Division; the Houston Fire Department; OSHA; the U.S. Coast Guard; the Port Arthur Police Department; and the Port Arthur Fire Department.Former Crew Leader Sentenced for Harboring Undocumented WorkersRead the Press Release
KANSAS CITY, KAN. - A former crew leader has been sentenced to time served after pleading guilty to harboring undocumented workers who were employees of a framing company in Spring Hill, Kan., U.S. Attorney Barry Grissom said today. He will be turned over to Immigration and Customs Enforcement for deportation.
Edino Pacheco, also known as Dennis Erickson Portillo, 30, has been in custody since he was arrested April 1. In his plea, he admitted that owners and managers of Advantage Framing Systems, Inc., in Spring Hill, Kan., knowingly employed undocumented workers. Advantage devised a method to reimburse undocumented workers by making crew leaders responsible to pay undocumented workers in their crews. Pacheco served as a crew leader and cashed checks issued to him from Advantage Framing to pay crew members for their framing work.
Advantage Framing issued checks to more than 32 crews for compensation for framing work. During the conspiracy, the total amount of checks written to various framing crews was approximately $4.6 million.
Co-defendants include:
James Humbert,owner of Advantage Framing, who pleaded guilty and is set for sentencing Jan. 17.
Kimberly Humbert, co-owner of Advantage Framing, who pleaded guilty and is set for sentencing Jan. 17.
Charles Stevens II, co-owner of Advantage Framing,who pleaded guilty and is set for sentencing Dec. 3.
Jose Ramon Caro-Corral, a crew leader, who is awaiting trial.
Angel Arguello-Plata, a crew leader, who pleaded guilty, and is awaiting sentencing.
Jorge Uriel Delgado-Ovalle, a crew leader, who is awaiting trial.
Grissom commended the U.S. Immigration and Customs Enforcement?s (ICE) Homeland Security Investigations (HSI), the Internal Revenue Service and Assistant U.S. Attorney Jabari Wamble for their work on the case.Former County Worker and School Board Member Sentenced to Four Years in Prison for Accepting BribesRead the Press Release
Former Cuyahoga County employee and Maple Heights school board member Santina “Sandy” Klimkowski was sentenced to four years in prison today for her role in the Cuyahoga County corruption scandal, federal law enforcement officials announced today.
Klimkowski, 61, of Maple Heights, previously pleaded guilty to after previously pleading Hobbs Act conspiracy, bribery, conspiracy to commit mail fraud, making false statements, tax charges and other crimes.
Klimkowski participated in a scheme with then-Cuyahoga County Auditor Frank Russo in which contracts for commercial appraisal work went to a company that paid bribes to Russo, a portion of which went to Klimkowski. She also got cash and home repairs in exchange for using her position on the school board to steer construction contracts to contractors who paid bribes to her, according to court documents.
She was also ordered to pay $270,302 in restitution. That money will go to Cuyahoga County ($154,000), Maple Heights City Schools ($83,414) and the Internal Revenue Service ($32,888).
“Klimkowski is yet another individual uncovered in a lengthy public corruption investigation that was portraying herself as a public servant through her employment while defrauding the citizens of our community,” said Stephen D. Anthony, Special Agent in Charge of the FBI’s Cleveland office. “The FBI and its partners will continue to root out public corruption, bringing the individuals involved to justice, as demonstrated with more than 60 convictions in this investigation.”
More than 60 people – including two judges, the county auditor and a former county commissioner -- have been convicted in the federal investigation into corruption in Cuyahoga County. Cuyahoga County is the largest county in Ohio and includes Cleveland.
The case was prosecuted by Assistant United States Attorneys Nancy L. Kelley and Antoinette T. Bacon following an investigation by the FBI and IRS – Criminal Investigation.
Former Congressman Richard G. Renzi Sentenced for Extortion and Bribery in Illegal Federal Land SwapRead the Press Release
Former U.S. Congressman Rick Renzi was sentenced today to serve 36 months in prison following his June conviction by a federal jury in Tucson, Ariz., for extortion, bribery, insurance fraud, money laundering and racketeering. Renzi’s co-defendant, James Sandlin, was also sentenced today to serve 18 months in prison for his role in the extortion, bribery and money laundering scheme.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, First Assistant U.S. Attorney Elizabeth A. Strange of the District of Arizona, Special Agent in Charge Douglas G. Price of the FBI’s Phoenix Division, and Special Agent in Charge Dawn Mertz of the Internal Revenue Service – Criminal Investigation (IRS-CI) made the announcement following sentencing by Senior U.S. District Judge David C. Bury.
Renzi, 55, of Burke, Va., and Sandlin, 62, of Sherman, Texas, were convicted on June 11, 2013. Renzi was found guilty of 17 felony offenses including conspiracy, honest services wire fraud, extortion under color of official right, racketeering, money laundering and making false statements to insurance regulators. Sandlin was convicted of 13 felony offenses including conspiracy, honest services wire fraud, extortion under color of official right and money laundering.
“Mr. Renzi abused the power – and the corresponding trust – that comes with being a member of Congress by putting his own financial interests over the interests of the citizens he had sworn to serve,” said Acting Assistant Attorney General Raman. “He fleeced his own insurance company to fund his run for Congress, and then exploited his position for personal gain. Mr. Renzi’s conviction and today’s sentence demonstrate the Justice Department’s commitment to fighting corruption at the highest levels of government.”
“Former Congressman Renzi disregarded his oath to uphold the law, ignoring the interests of the people he was elected to serve in favor of his own interests,” stated First Assistant U.S. Attorney Strange. “The sentences imposed today reinforce the fundamental principle that no one, including an elected official, is above the law.”
“When our elected officials betray the trust of the American people it strikes at the very core of our democracy,” said FBI Special Agent in Charge Price. “The sentencing of former Congressman Rick Renzi illustrates the commitment by the FBI and our law enforcement partners to investigate and prosecute corruption at all levels. Today’s sentencing is a reminder that when a public official violates the public's trust they will be held accountable to the fullest extent of the law.”
“The public expects its elected officials to be honest, to be trustworthy and to show respect for the law," stated IRS Special Agent in Charge Mertz. “Those in public office should be held to a higher standard and are not exempt from criminal prosecution. The prison sentence imposed today should serve as a wake-up call to other public officials who believe there are no consequences for betraying the public trust.”
According to evidence at trial, Renzi, then a member of Congress from Arizona’s 1st Congressional District, promised in 2005 to use his legislative influence to profit from a federal land exchange that involved property owned by Sandlin, a real-estate investor.
At the time, Sandlin owed Renzi $700,000 in future payments from their business dealings, and Renzi threatened proponents of the land exchange that he would not support it unless they purchased Sandlin’s property in Cochise County, Ariz. When they refused, Renzi promised a second proponent of a land exchange that he would support the exchange if they purchased Sandlin’s property. According to an agreement reached in May 2005, Sandlin was paid $1 million in earnest money, out of which he paid $200,000 to Renzi. Just before Sandlin received the $1.6 million balance owed on the exchange, he paid an additional $533,000 to Renzi.
Evidence at trial further showed that from 2001 to 2003, Renzi engaged in insurance fraud by diverting his clients’ insurance premiums to fund his first campaign for Congress, and he subsequently sent false letters to his insurance customers and provided false statements to various state regulators who were investigating his activities.
This case was investigated by the FBI and the Internal Revenue Service – Criminal Investigation. The prosecution was handled by Trial Attorneys David Harbach and Sean Mulryne of the Department of Justice’s Public Integrity Section and Assistant U.S. Attorneys Gary Restaino and James Knapp of the District of Arizona.
Former Congressman Richard G. Renzi Sentenced for Extortion and Bribery in Illegal Federal Land SwapRead the Press Release
WASHINGTON – Former U.S. Congressman Rick Renzi was sentenced today to serve 36 months in prison following his June conviction by a federal jury in Tucson, Ariz., for extortion, bribery, insurance fraud, money laundering and racketeering. Renzi’s co-defendant, James Sandlin, was also sentenced today to serve 18 months in prison for his role in the extortion, bribery and money laundering scheme.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, First Assistant U.S. Attorney Elizabeth A. Strange of the District of Arizona, Special Agent in Charge Douglas G. Price of the FBI’s Phoenix Division, and Special Agent in Charge Dawn Mertz of the Internal Revenue Service – Criminal Investigation (IRS-CI) made the announcement following sentencing by Senior U.S. District Judge David C. Bury.
Renzi, 55, of Burke, Va., and Sandlin, 62, of Sherman, Texas, were convicted on June 11, 2013. Renzi was found guilty of 17 felony offenses including conspiracy, honest services wire fraud, extortion under color of official right, racketeering, money laundering and making false statements to insurance regulators. Sandlin was convicted of 13 felony offenses including conspiracy, honest services wire fraud, extortion under color of official right and money laundering.
“Mr. Renzi abused the power – and the corresponding trust – that comes with being a member of Congress by putting his own financial interests over the interests of the citizens he had sworn to serve,” said Acting Assistant Attorney General Raman. “He fleeced his own insurance company to fund his run for Congress, and then exploited his position for personal gain. Mr. Renzi’s conviction and today’s sentence demonstrate the Justice Department’s commitment to fighting corruption at the highest levels of government.”
“Former Congressman Renzi disregarded his oath to uphold the law, ignoring the interests of the people he was elected to serve in favor of his own interests,” stated First Assistant U.S. Attorney Strange. “The sentences imposed today reinforce the fundamental principle that no one, including an elected official, is above the law.”
“When our elected officials betray the trust of the American people it strikes at the very core of our democracy,” said FBI Special Agent in Charge Price. “The sentencing of former Congressman Rick Renzi illustrates the commitment by the FBI and our law enforcement partners to investigate and prosecute corruption at all levels. Today’s sentencing is a reminder that when a public official violates the public's trust they will be held accountable to the fullest extent of the law.”
“The public expects its elected officials to be honest, to be trustworthy and to show respect for the law," stated IRS Special Agent in Charge Mertz. “Those in public office should be held to a higher standard and are not exempt from criminal prosecution. The prison sentence imposed today should serve as a wake-up call to other public officials who believe there are no consequences for betraying the public trust.”
According to evidence at trial, Renzi, then a member of Congress from Arizona’s 1st Congressional District, promised in 2005 to use his legislative influence to profit from a federal land exchange that involved property owned by Sandlin, a real-estate investor.
At the time, Sandlin owed Renzi $700,000 in future payments from their business dealings, and Renzi threatened proponents of the land exchange that he would not support it unless they purchased Sandlin’s property in Cochise County, Ariz. When they refused, Renzi promised a second proponent of a land exchange that he would support the exchange if they purchased Sandlin’s property. According to an agreement reached in May 2005, Sandlin was paid $1 million in earnest money, out of which he paid $200,000 to Renzi. Just before Sandlin received the $1.6 million balance owed on the exchange, he paid an additional $533,000 to Renzi.
Evidence at trial further showed that from 2001 to 2003, Renzi engaged in insurance fraud by diverting his clients’ insurance premiums to fund his first campaign for Congress, and he subsequently sent false letters to his insurance customers and provided false statements to various state regulators who were investigating his activities.
This case was investigated by the FBI and the Internal Revenue Service – Criminal Investigation. The prosecution was handled by Trial Attorneys David Harbach and Sean Mulryne of the Department of Justice’s Public Integrity Section and Assistant U.S. Attorneys Gary Restaino and James Knapp of the District of Arizona.
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Five Virginia Charter Fishing Boat Captains Sentenced for Lacey Act ViolationsRead the Press Release
Nolan L. Agner, the last of five Virginia Beach charter fishing boat captains convicted of poaching Atlantic striped bass was sentenced today in federal court in Norfolk, Va. All five captains – including Agner, Jeffery S. Adams, Raymond Carroll Webb, David Dwayne Scott, and William W. “Duby” Lowery IV – were sentenced for violating the Lacey Act by selling illegally-harvested striped bass, the Justice Department announced.
“As charter boat captains, these men had an obligation to know and follow the laws that protect this natural resource from overharvesting,” said Robert G. Dreher, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “Their illegal poaching of striped bass gave them an unfair economic advantage over law abiding fisherman and irresponsibly posed a threat to this food supply. “With these sentences, they will pay the price by serving jail time or receiving probation, as well as paying fines, surrendering their captain’s license, or having their operations closely monitored or curtailed.”
In 1984, Congress passed the Atlantic Striped Bass Conservation Act, recognizing that “Atlantic striped bass are of historic commercial and recreational importance and economic benefit to Atlantic coastal States and to the Nation,” and that it “is in the national interest to implement effective procedures and measures to provide for effective inter-jurisdictional conservation and management of this species.” Since 1990, the Secretary of Commerce has imposed a moratorium on fishing for striped bass within the exclusive economic zone (EEZ), the zone where the U.S. and other coastal nations have jurisdiction over economic and resource management. The moratorium makes it unlawful to fish for or harvest striped bass in the EEZ. The moratorium also makes it unlawful to retain any striped bass that were taken in or from the EEZ.
The Lacey Act makes it unlawful for any person to import, export, transport, sell, receive, acquire or purchase any fish or wildlife taken, possessed, transported or sold in violation of any law or regulation of the United States, or to attempt to do so. Such conduct constitutes a felony crime if the market value of the fish or wildlife is in excess of $350. Under the Lacey Act, it is a “sale” of fish or wildlife for any person, for money or other consideration, to offer or provide guiding, outfitting, or other services.
Each of the captains, all of whom operated charters out of Rudee Inlet in Virginia Beach, was charged separately on Nov. 8, 2012, with violating the Lacey Act by selling charter fishing trips to harvest striped bass illegally from the EEZ, among other charges.
Today, Agner, captain of the Flat Line, having previously pleaded guilty to violating the Lacey Act, was sentenced to pay a $3,500 fine. He and his corporation, Agner, Inc., were also placed on three years’ probation with special conditions requiring them to purchase and maintain a Vessel Monitoring System (VMS) device on any vessel that they own or operate for fishing purposes during the term of probation.
The other four defendants all previously pleaded guilty to violating the Lacey Act and have been sentenced:On, April 25, 2013, Scott, captain of the Stoney’s Kingfisher, was sentenced to a $5,600 fine and $1,900 in restitution to the National Oceanic and Atmospheric Administration (NOAA). Scott was also sentenced to three years’ probation with special conditions prohibiting Scott from engaging in either the charter or commercial fishing industries, anywhere in the world, in any capacity, during the term of his probation. Scott is prohibited not only from captaining a vessel, but also rendering any assistance, support, or other services, with or without compensation, for other charter or commercial fishermen.
Also on April 25, 2013, Adams, captain of the Providence II, and his corporation Adams Fishing Adventures, were sentenced to three years’ probation with special conditions requiring them to apply for and receive a Federal Fisheries permit, and to purchase and install a VMS device on any vessel that they own or operate during the term of probation.
On May 30, 2013, Lowery, captain of the Anna Lynn, was sentenced to 30 days’ in jail, followed by 12 months of supervised release with the special conditions that Lowery surrender his captain’s license to the U.S. Coast Guard and that he not be eligible for reinstatement of that license. Lowery is also prohibited from engaging in the charter fishing industry in any capacity during the term of his supervised release.
On July 2, 2013, Webb, captain of the Spider Webb, and his corporation Peake Enterprises were sentenced to pay a $3,000 fine and $1,000 restitution to NOAA. Webb and Peake Enterprises were also sentenced to three years’ probation with special conditions requiring them to apply for and receive a Federal Fisheries permit, and to purchase and install a VMS device on any vessel that they own or operate during the term of probation.
This case was investigated by NOAA’s Office of Law Enforcement and the Virginia Marine Police with assistance from the Federal Communications Commission Enforcement Bureau, Norfolk Office. Assistant U.S. Attorney Stephen W. Haynie of the United States Attorney’s Office for the Eastern District of Virginia and Trial Attorney James B. Nelson of the Department of Justice’s Environmental Crimes Section of the Environment and Natural Resources Division prosecuted the case on behalf of the United States.
Federal Jury Convicts Dallas Man in Massive Stolen Identity Refund Fraud SchemeRead the Press Release
Defendant and Co-Conspirators Attempted to Fraudulently Obtain Millions of Dollars in Tax Refunds for Their Own Use and Benefit
DALLAS, Texas — After a nearly week-long trial before U.S. District Judge Barbara M. G. Lynn, a federal jury in Dallas has convicted Ogiesoba City Osula, 37, of Dallas, on all 16 counts of a second superseding indictment charging various offenses stemming from his role in a conspiracy to use stolen identities to fraudulently obtain federal income tax refunds. Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
Osula’s four defendants charged in the case have entered guilty pleas:
George Ojonugwa, 32, of Garland, Texas; Eseos Igiebor, 43, of Richardson, Texas; and Ebenezer Legbedion, 42, of Lagos, Nigeria; each pleaded guilty to one count of conspiracy to commit wire fraud. Igiebor also pleaded guilty to one count of aggravated identity theft. Evelyn Nyaboke Haley, 34, of Dallas, pleaded guilty to one count of conspiracy to defraud the government with respect to claims.
Specifically, late Friday afternoon, the jury convicted Osula on one count of conspiracy to commit wire fraud, mail fraud and bank fraud; seven counts of presenting fraudulent claims upon the United States; two counts of fraud in connection with access devices and aiding and abetting; and six counts of aggravated identity theft and aiding and abetting.
The maximum statutory penalties, per count, are: conspiracy to commit wire fraud, mail fraud and bank fraud – 30 years; fraud in connection with access devices – 15 years; and aggravated identity theft – two years. In addition, each count carries a fine of up to $250,000 and restitution could be ordered.
The government presented evidence at trial that Osula conspired to defraud the government by using stolen identity information and false information to create and electronically file false tax returns to fraudulently claim refunds. Osula and his coconspirators had the refunds credited to stored value cards or bank accounts opened with stolen taxpayer identity information. While Osula and his co-conspirators fraudulently obtained millions of dollars in tax refunds, they filed additional fraudulent returns in an attempt to obtain millions more in tax refunds for their own use and benefit.
The government also presented evidence that Osula and his coconspirators were sending information to and trading information with a group running a similar scheme in Cincinnati, Ohio. On Nov. 8, 2011, Osula and Ojonugwa, who were in a parked car after midnight with the leader of the Cincinnati ring, were questioned by police in a Cincinnati suburb. A drug detection dog alerted on the vehicle, and when it was searched, police found more than $300,000 in cash and money orders and numerous debit cards. During that incident, while Osula was in a police car and waiting to be questioned, he ate a debit card.
According to documents filed in this case and statements made in court:
Stolen Identity Refund Fraud (SIRF) is a common type of fraud committed against the United States government that results in more than $2 billion in losses annually to the United States Treasury. SIRF schemes generally share a number of hallmarks:
- SIRF perpetrators obtain personal identifying information, including Social Security numbers and dates of birth, from unwitting individuals.
- SIRF perpetrators complete Individual Income Tax Return Form using the fraudulently-obtained information and falsifying wages earned, taxes withheld and other data. Perpetrators use data to make it appear that the “taxpayers” listed on the fraudulent 1040 forms are entitled to tax refunds – when in fact, the various tax withholdings indicated on the fraudulent 1040s have not been paid by the listed “taxpayers,” and no refunds are due.
- Perpetrators direct the U.S. Treasury Department to issue the refunds through checks (Tax Refund Treasury Checks) generated by the fraudulent 1040 forms to locations they control or can access, in various ways.
- With Tax Refund Treasury Checks now in hand, SIRF perpetrators generate cash proceeds. Certain SIRF perpetrators sell Tax Refund Treasury Checks at a discount to face value. In turn, the buyers then cash the Tax Refund Treasury Checks, either themselves or using straw account holders, by cashing checks at banks or check cashing businesses, or by depositing checks into bank accounts. When cashing or depositing Tax Refund Treasury Checks, SIRF perpetrators often present false or fraudulent identification documents in the names of the “taxpayers” to whom the checks are payable.
The investigation was conducted by IRS Criminal Investigation and the FBI. Assistant U.S. Attorneys Mark Penley, Christopher Stokes and P.J. Meitl are prosecuting.
FEMA fraud charges for Hurricane Sandy disaster reliefRead the Press Release
Complaint 1: FEMA fraud charges for Hurricane Sandy disaster relief
Complaint 2: FEMA fraud charges for Hurricane Sandy disaster relief
Complaint 3: FEMA fraud charges for Hurricane Sandy disaster reliefEquity Trader Indicted on Securities Fraud ChargesRead the Press Release
Defendant Worked for Cushing MLP Asset Management, LP in Dallas
DALLAS — Daniel Lutz Bergin, 41, of Dallas, made his initial appearance this afternoon in federal court in Dallas, following his self-surrender on an indictment charging 15 counts of securities fraud, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas. Bergin entered a not guilty plea to the indictment. He was ordered released on his own promise to appear, subject to certain conditions, including that he refrain from working in the financial services industry while on pretrial release. A trial date was not set.
According to the indictment, from 2008 to May 23, 2013, Bergin was an equity trader employed by Cushing MLP Asset Management, LP (Cushing), an investment advisor located on Preston Road in Dallas. Cushing was a wholly owned subsidiary of Swank Capital, LLC and had approximately $2.5 billion in discretionary assets under management. Cushing provided advisory and portfolio management services to institutional clients, including high net worth individuals, investment companies, pooled investment vehicles, pension and profit sharing plans, charitable organizations and state/municipal government entities.
Primarily, Cushing invested client assets in energy infrastructure master limited partnerships (MLPs) that are traded on stock exchanges, royalty trusts and other energy-income investments. Cushing has established policies and procedures, including a Code of Ethics, in compliance with regulatory requirements, that explicitly prohibit insider trading and outline restrictions on personal securities transactions by Cushing employees.
The indictment alleges that beginning in at least January 2010, until his termination on May 23, 2013, Bergin ran a “front-running” scheme in which he misused “inside” or “material, non-public” information when placing trades in a personal brokerage account held in his wife’s name. This scheme allowed Bergin to take advantage of limited opportunities to buy and sell the same securities in which he was placing trades on behalf of Cushing’s clients’ and proprietary accounts. Although Bergin disclosed certain personal brokerage accounts held in his name at Fidelity and Scottrade, he failed to disclose brokerage accounts in his wife’s name at Fidelity and eTrade.
An indictment is an accusation by a federal grand jury, and a defendant is entitled to the presumption of innocence unless proven guilty. If convicted, however, the maximum penalty for each count of securities fraud, as charged, is 25 years in federal prison, a $250,000 and restitution.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
The investigation is being conducted by the FBI. Assistant U.S. Attorney J. Nicholas Bunch is in charge of the prosecution.
(Download Factual Basis)
East St. Louis Resident Sentenced to 168 Months for Role in KidnappingRead the Press Release
Jevon M. Jenkins, from East St. Louis, Illinois, was sentenced in federal court today to 168 months in federal prison for Aiding and Abetting Kidnapping, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today.
Court documents indicate that in July 2012, Jenkins and others physically assaulted a Cahokia man in East St. Louis. Jenkins then aided and abetted a co-defendant in confining the Cahokia man in a vehicle and driving him across the Popular Street Bridge into Missouri.
United States Attorney Stephen R. Wigginton noted that, “The facts of this case are unimaginable, atrocious, and inexcusable. We are proud of the sentence imposed today. It sends a strong message to the criminals: these crimes will not be tolerated. My office remains dedicated to seeking justice for all victims. Today, the victim in this case witnessed that first hand.”
United States Attorney Wigginton added: “This case would not have been successful without the courage of the investigators, the witnesses, and the victim. We are especially appreciative of the cooperative efforts of the Federal Bureau of Investigation, the Illinois State Police, the Columbia, Illinois, Police Department, and the East St. Louis, Illinois, Police Department, who comprised the Save Our Streets Task Force active in the summer of 2012.”
The case was prosecuted by Assistant United States Attorney Monica A. Stump.
East St. Louis Man Sentenced for Firearm OffenseRead the Press Release
Antoine T. Thomas, 37, from East St. Louis, Illinois, was sentenced on October 25, 2013, in Federal District Court in East St. Louis, on one count of unlawful possession of a firearm by a user of a controlled substance, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today. Thomas was sentenced to 12 months and a day in prison; two years supervised release, a $500 fine and ordered to pay a $100 special assessment.
Facts presented in court revealed that on June 29, 2010, law enforcement officers executed a search warrant at a residence in East St. Louis, Illinois. A search of the home led to the seizure of two loaded revolvers, marijuana and three digital scales. Thomas admitted ownership of the two firearms and marijuana found in the household.
This case resulted from the efforts of the WAVE (Working Against Violent Elements) Task Force, which focuses its efforts on combating violent crime tin East St. Louis, Washington Park, and surrounding communities. This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and was prosecuted by Assistant United States Attorney Daniel T. Kapsak.
Detroit Man Who Arrived at Huntington Bus Station with Heroin Sentenced to 21 Months in Federal PrisonRead the Press Release
HUNTINGTON, W.Va. – A Detroit drug courier who arrived at a Huntington Greyhound Bus Station in April 2013 in possession of heroin was sentenced today to 21 months in federal prison, announced U.S. Attorney Booth Goodwin. Jalin Tyref McArn, 19, previously pleaded guilty in July to possession of heroin with intent to distribute.
On April 24, 2013, a Drug Enforcement Administration (DEA) agent working undercover received a phone call from a Detroit drug supplier to arrange a heroin transaction. That same day, McArn, acting as a drug courier, arrived at the Greyhound bus station in Huntington to complete the prearranged transaction.
As McArn exited the bus station, he was approached by a federal agent working undercover at the time. Following a brief conversation, McArn got into the undercover agent’s vehicle and indicated that he had heroin on his person. McArn also told the undercover agent that he would provide him with heroin as payment for the ride from the bus station. Police arrested McArn and seized approximately 15 grams of heroin that he had hidden on his person.
The Huntington Police Department and the DEA conducted the investigation. Assistant United States Attorney Gregory McVey handled the prosecution. The sentence was imposed by Chief United States District Judge Robert C. Chambers.
Defense Contractor Arraigned on Charges She Exported Military Blueprints to India Without A LicenseRead the Press Release
Indictment Alleges She Used Local Church’s Website Illegally to Transmit
Defense Materials to Overseas ConspiratorTRENTON, N.J. – The owner of two New Jersey defense contracting businesses was arraigned today for allegedly transmitting military blueprints to India without a license, in violation of export laws, U.S. Attorney Paul J. Fishman announced.
Hannah Robert, 48, North Brunswick, N.J., was arraigned before U.S. District Judge Joel A. Pisano in Trenton federal court. She was indicted by a federal grand jury on Oct. 10, 2013, on one count of violating the Arms Export Control Act and one count of conspiracy to violate the act. She remains under home detention pending trial.
According to the documents filed in this case and statements made in court:
Robert was the founder, owner, and President of One Source USA LLC, a company located at her then-residence in Mount Laurel, N.J., and contracted with the U.S. Department of Defense (DoD) to supply defense hardware items and spare parts pursuant to government contracts. In September 2012, Robert opened a second defense-contracting company, Caldwell Components Inc., based at the same address in Mount Laurel.
Along with “R.P,” a resident of India, Robert owned and operated a company in India, One Source (One Source India), that manufactured at its own facility defense hardware items and spare parts. From June 2010 to December 2012, Robert and R.P. conspired to export to India defense technical drawings without obtaining the necessary licenses from the U.S. Department of State. The exported technical drawings include parts used in the torpedo systems for nuclear submarines, in military attack helicopters, and in F-15 fighter aircraft.
Robert allegedly lied on her bids for DoD contracts, stating that she would be supplying American-made products and that her N.J.-based company was a manufacturer, rather than a dealer, of defense spare parts. One Source USA also subcontracted to other American defense contractors, including those in Sussex County, N.J., and Boca Raton, Fla. Robert provided export-controlled items made in India to these defense contractors in the United States in such a way as to appear to the DoD that the items were manufactured in this country.
In addition to United States’ sales, Robert and R.P. sold defense hardware items to foreign customers. Robert transmitted export-controlled technical data to R.P. in India so that Robert and R.P. could submit bids to foreign actors, including those in the United Arab Emirates (UAE), to supply them or their foreign customers with defense hardware items and spare parts. Neither Robert nor R.P. obtained approval from the U.S. Department of State for this conduct.
On August 23, 2012, R.P. e-mailed Robert from India requesting the technical drawing for a particular military item. R.P.’s e-mail forwarded Robert an e-mail from an individual purporting to be “an official contractor of the UAE Ministry of Defence,” and who listed a business address in Abu Dhabi, UAE. The UAE e-mail requested quotations for a bid for the “blanket assembly” for the CH-47F Chinook military helicopter and listed the “End User” for the hardware item as the UAE Armed Forces. Later that same day, Robert replied to R.P.’s e-mail, attaching, among other things, the electronic file for an export-controlled technical drawing titled “Installation and Assy Acoustic Blankets, STA 120 CH-47F,” to be used in the Chinook attack helicopter.
Starting in October 2010, Robert transmitted the military drawings for these parts to India by posting the technical data to the password-protected website of a Camden County, N.J., church where she was a volunteer web administrator. This was done without the knowledge of the church staff. Robert e-mailed R.P. the username and password to the church website so that R.P. could download the files from India. Through the course of the scheme, Robert uploaded thousands of technical drawings to the church website for R.P. to download in India.
On June 25, 2012, R.P. e-mailed Robert from India, stating in part: “Please send me the church web site username and password.” The e-mail was in reference to both an invoice to, and a quote for, an individual known to Robert as a broker of defense hardware items for an end-user in Pakistan. This individual (the “Pakistan trans-shipper”) employed a UAE address for shipping purposes. Later than day, Robert replied to this e-mail, providing a new username and password for the church website so that R.P. could download the particular defense drawings.
There were quality issues with the parts that Robert provided to the DoD. After the DoD in October 2012 disclosed the failure of certain parts used in the wings of the F-15 fighter aircraft, supplied by one of One Source USA’s American customers, Robert and R.P. provided the principal of that company with false and misleading material certifications and inspection reports for the parts. These documents, to be transmitted to the DoD, listed only One Source USA’s New Jersey address and not the address of the actual manufacturer in India, One Source India. As a result of the failed wing pins, the DoD grounded approximately 47 F-15 fighter aircraft for inspection and repair, at a cost estimated to exceed $150,000.
Robert was, until November 2012, an employee of a separate defense contractor in Burlington County, N.J., where she worked as a System Analyst and had access to thousands of drawings marked with export-control warnings and to information on this defense contractor’s bids on DoD contracts. During her employment, Robert misrepresented to her employer the nature and extent of her involvement with One Source USA.
The conspiracy count with which Robert is charged is punishable by a maximum potential penalty of five years in prison and a $250,000 fine. The substantive violation of the Arms Export Control Act is punishable by a maximum potential penalty of 20 years in prison and a $1 million fine. The indictment also seeks forfeiture of Robert’s proceeds from the alleged criminal scheme.
The Arms Export Control Act prohibits the export of defense articles and defense services without first obtaining a license from the U.S. Department of State and is one of the principal export control laws in the United States.
U.S. Attorney Fishman credited special agents of the U.S. Department of Defense, Defense Criminal Investigative Service Northeast Field Office, under the leadership of Special Agent in Charge Craig W. Rupert, and special agents of the Department of Homeland Security, Homeland Security Investigations, Counter Proliferation Investigations, under the supervision of Special Agent in Charge Andrew M. McLees, with the investigation leading to the indictment.
The government is represented by Assistant U.S. Attorney John E. Clabby of the U.S. Attorney’s Office Criminal Division in Trenton.
The charges and allegations contained in the indictment are merely accusations, and the defendant is considered innocent unless and until proven guilty.
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Defense counsel: David Schafer Esq., Assistant Federal Public Defender, TrentonRobert Indictment
Deadwood Man Pleads to Illegally Possessing A FirearmRead the Press Release
United States Attorney Brendan V. Johnson announced that Sean Jason Romanjenko, age 39, of Deadwood, South Dakota, appeared before U.S. Magistrate Judge Veronica L. Duffy on October 18, 2013, and pled guilty to a charge of Felon in Possession of a Firearm.
The charge carries a maximum penalty upon conviction of 10 years and/or a $250,000 fine.
On December 1, 2012, Romanjenko, a previously convicted felon, was illegally in possession of a .45 caliber pistol while at a shooting range near Deadwood.
The investigation was conducted by the Bureau of Alcohol, Tobacco, Firearms & Explosives. The case is being prosecuted by Assistant U.S. Attorney Eric Kelderman.
A presentence investigation was ordered and a sentencing date will be set. The defendant remains released from custody pending sentencing.Co-Owner of Company That Originated $30 Million in Fraudulent Mortgages Pleads GuiltyRead the Press Release
NEWARK, N.J. B The co-owner of a mortgage company that was responsible for a long-running, large-scale mortgage fraud that caused losses of more than $30 million today admitted his role in the scheme, U.S. Attorney Paul J. Fishman announced.
Lester Soto, 57, of Freehold, N.J., pleaded guilty before U.S. District Judge Esther Salas in Newark federal court to an information charging him with two counts of conspiracy to commit bank fraud.
According to the Information and other publicly-filed documents: From September 2006 to May 2008, Soto and others, including fake document creators, a complicit lawyer and paralegal, and numerous loan officers, engaged in two related mortgage fraud conspiracies through a company called Premier Mortgage Services (APMS). Soto and his conspirators targeted properties in low-income areas of New Jersey. After recruiting “straw buyers,” Soto and his conspirators used a variety of fraudulent documents to make it appear as though the straw buyers possessed far more assets and earned far more income than they actually did.
Soto and his conspirators then submitted these fraudulent documents as part of mortgage loan applications to financial institutions. Relying on these fraudulent documents, financial institutions provided mortgage loans for the subject properties. Soto and his conspirators then split the proceeds from the mortgages among themselves and others by using fraudulent settlement statements (HUD-1s), which hid the true sources and destinations of the mortgage funds provided by financial institutions. The straw buyers had no means of paying the mortgages, and many of the properties entered into foreclosure proceedings. Soto and his conspirators defrauded financial institutions out of more than $30 million. Besides being a part-owner of PMS, Soto also acted as a loan officer on certain PMS mortgage loan applications. Soto took a percentage of PMS’ profits. Soto employed document makers to create false and fraudulent documents and put mortgage brokers at PMS in contact with these document makers to create other false and fraudulent documents. Soto instructed PMS employees to provide him with loan files that PMS employees believed contained suspicious information, and then personally shepherded these loan files through to funding.Other conspirators, including Isaac DePaula, Adilson Silva, and Klary Arcentales were loan officers at PMS. DePaula, Silva, and Arcentales recruited straw buyers, provided false and fraudulent documents to the straw buyers, and incorporated false and fraudulent documents into loan applications to induce financial institutions to fund mortgage loans. The loan officers profited illegally by receiving a commission from PMS for each mortgage loan that they closed and also profited illegally by diverting portions of the fraudulently obtained mortgage proceeds for themselves, often via shell corporations or nominee bank accounts.
Rodrigo Costa created false and fraudulent documents, including Verifications of Deposit (VODs) and Verifications of Rent (VORs). Other defendants, including DePaula and Silva, then submitted Costa’s fraudulent documents to support the fraudulent mortgage loan applications of various straw buyers. For his participation, Costa received a portion of the illicit proceeds from the mortgages.
Michael Rumore was an attorney licensed in the State of New Jersey. Rumore served as the settlement agent on mortgage loans brokered by DePaula, Silva, and Soto for various subject properties. Rumore used his status as an attorney to further the fraudulent scheme, including by convening closings, receiving funds from lenders, and preparing HUD-1s that purported to reflect the sources and destinations of funds for mortgages on subject properties B when in fact, the HUD-1s were neither true nor accurate. Rumore disbursed mortgage loan proceeds directly to PMS, Soto, DePaula, and Silva, including amounts not reflected on the HUD-1s. Rumore received a fee for each fraudulent loan in which he participated.
Antonio Pimenta owned and managed Kelmar Construction Co. (Kelmar). Kelmar built properties that were then sold to straw buyers utilizing fraudulent mortgage loans brokered by Arcentales.
The counts with which Soto is charged are each punishable by a maximum potential penalty of 30 years in prison and a fine of $1 million. Sentencing is scheduled for Feb. 10, 2014.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford, and special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen, for the investigation leading to today’s guilty plea. Fishman also thanked the Social Security Administration-Office of Inspector General, under the direction of Special Agent in Charge Edward Ryan, for its participation in the investigation.
The government is represented by Assistant U.S. Attorneys Rahul Agarwal and Zach Intrater of the U.S. Attorney’s Office Criminal Division.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.stopfraud.gov13-419
Defense counsel: Jeff Smith Esq., of Teaneck, N.J.
Soto Information
Cartel Money Laundering Cell ArrestedRead the Press Release
BROWNSVILLE, Texas – Law enforcement officials have arrested a total of nine individuals alleging they violated the laws of the United States by moving money undetected through the United States banking system from Florida to Texas into Mexico, announced United States Attorney Kenneth Magidson and Janice Ayala, special agent in charge of Homeland Security Investigations (HSI), San Antonio.
Those arrested include Oscar J. Aguilar, 37, Yurixi Guadalupe Vega-Martinez, 29, Bea Marie Fairbanks, 24, Mayte Ayde Diaz, 39, Lorena M. Moreno-Martinez, 39, Teodosa Gonzalez-Rodriguez, 32, and Yezenia V. Campos-Silva, 31, all of Brownsville, and Yamileth Sinai Carballo, 20, and Miguel Jonathan Pereira, 21, both of Bayview. They are expected to make their initial appearance before U.S. Magistrate Judge Ronald G. Morgan tomorrow morning.
Jose M. Rivera, 26, of Brownsville, is also charged but not as yet in custody. He is considered a fugitive and a warrant remains outstanding for his arrest. Anyone with information about his whereabouts is asked to contact HSI at 1-866-DHS-2ICE (1-866-347-2423).
The 21-count indictment was returned under seal Oct. 22, 2013, and unsealed upon the arrests today.
“Those individuals arrested today are members of a money laundering organization that allegedly orchestrated the movement of millions of dollars in illicit proceeds in an attempt to circumvent law enforcement and reap their illicit gains abroad,” said Ayala. “HSI is dedicated to dismantling suspected transnational criminal organizations, seizing their assets and severing their financial life line.”
The alleged money laundering cell opened bank accounts at Bank of America in Brownsville and then sent their account numbers to unknown individuals in Florida, according to allegations. There, the unknown individuals would allegedly deposit cash in amounts under the $10,000 reporting requirement for cash transactions. The indictment alleges that on the same day, defendants in Brownsville would then withdraw the cash in amounts under the $10,000 reporting requirement. They allegedly kept a portion of the cash as their payment and then gave the bulk of the money to another individual for it to be walked across the border at ports of entry in Brownsville. The scheme allegedly occurred from on or about November 2008 through December 2012.
The indictment indicates the money was proceeds of illegal narcotics sales belonging Mexican drug trafficking organizations including the Gulf Cartel.
All are charged with one count of conspiracy and one count of operation of an unlicensed money transmitting business which carries as possible punishment a maximum five-year-term of imprisonment and $250,000 fine on each count. All are also charged with varying counts of structuring withdrawals at a financial institution which also carries the same five years and $250,000 fine on each charge, upon conviction. However, if is determined the financial scheme involved more than $100,000, then the punishment is up to 10 years imprisonment and the same $250,000 fine. Aguilar, Diaz and Moreno-Martinez are also charge with conspiracy to commit international money laundering and further face 20 years in federal prison and a $500,000 fine.
The indictment also includes a notice of forfeiture against the defendants for $1,893,170, alleged proceeds from the criminal activity.
Today’s arrests came as a result of a year-long investigation by HSI, Financial Crimes Group with the assistance of U.S. Marshals Service, Border Patrol, Cameron County District Attorney’s Office, Cameron County Sheriff’s Office and the Brownsville Police Department. The case is being prosecuted by Assistant United States Attorney Karen Betancourt.
An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.Cahokia Man Pleads Guilty to Firearm OffenseRead the Press Release
On October 25, 2013, Mautaveus T. Ayers, an 18-year old Cahokia, Illinois, man pled guilty in Federal District Court, in East St. Louis, to unlawful possession of a firearm by a previously convicted felon, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today. Sentencing is scheduled for February 27, 2014, at which time he faces a maximum sentence of 10 years in prison and a fine of up to $250,000, not more than 3 years of supervised release after his prison term, and a mandatory special assessment of $100.
Court proceedings revealed that on April 17, 2013, a patrolling officer in Cahokia, Illinois, observed a vehicle driven by Ayers commit a traffic violation and fitting the description of a car involved in a shooting earlier that day. The officer activated his lights for the vehicle to stop, but Ayers continued driving. A short chase followed with Ayers eventually stopping in the parking lot of an apartment complex. Ayers attempted to run after exiting the vehicle, but stopped when the officer drew his service weapon, ordering him to stop and lay on the ground. Ayers was placed under arrest. The police car, equipped with an audiovisual dash-camera, recorded Ayers making statements on his cell phone to an unknown individual about his arrest and directing him to retrieve a weapon from his home, and take it to the unknown individual’s residence. Ayers also directed the unknown party to retrieve a firearm he had hidden underneath his sink. Ayers consented to a search of his home the following day, where a shotgun was found underneath his kitchen sink. Ayers has a prior felony conviction in St. Clair County, Illinois.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Cahokia Police Department. Special Assistant United States Attorney Neal C. Hong is prosecuting the case.
Burlington County Man Admits Producing Images of Child Sexual AbuseRead the Press Release
CAMDEN, N.J. – A Burlington County, N.J., man today admitted his role in producing images of child sexual abuse, U.S. Attorney Paul J. Fishman announced.
David Clark, 49, of Southampton, N.J., pleaded guilty before U.S. District Judge Joseph H. Rodriguez in Camden federal court to an information charging him with three counts of producing child pornography. Clark’s detention was continued.
According to documents filed in this case and statements made in court:
From 2004 through March 9, 2011, Clark employed, used, persuaded, induced, enticed or coerced three separate minor victims to engage in sexually explicit conduct for the purpose of producing a visual depiction of such conduct. Clark was charged federally in October 2011 by criminal complaint. Under terms of the plea agreement, Clark will be sentenced to 30 years in prison and a lifetime term of supervised release. Sentencing is scheduled for Feb. 4, 2014.
U.S. Attorney Fishman credited special agents of the FBI's Child Exploitation Task Force, under the direction of Special Agent in Charge Aaron T. Ford in Newark; investigators with the Burlington County Prosecutor's Office, under the direction of Prosecutor Robert D. Bernardi; and detectives with the N.J. State Police, under the direction of Col. Rick Fuentes, and the N.J. Regional Computer Forensic Laboratory with the investigation leading to today's guilty plea.
The government is represented by Assistant U.S. Attorney Jacqueline M. Carle of the Criminal Division in Camden.
13-420
Defense counsel: Lori M. Koch Esq., Assistant Federal Public Defender, Camden
Clark Information
Bowie County Man Sentenced for Trafficking MethamphetamineRead the Press Release
Department of Justice
Office of Public AffairsTYLER, Texas – A 37-year-old Texarkana, Texas man has been sentenced to federal prison for drug trafficking violations in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
Sonya Lamarcus Hopkins pleaded guilty on June 6, 2013 to possession with intent to distribute and distribution of methamphetamine and was sentenced to 87 months in federal prison today by U.S. District Judge Michael H. Schneider.
According to information presented in court, on Feb. 28, 2012, Hopkins arranged by telephone to distribute 7 grams of methamphetamine to another individual. The transaction was carried out by another person on behalf of Hopkins in Texarkana, Texas. Hopkins was indicted by a federal grand jury on Sep. 12, 2012 and charged with drug trafficking violations.
This case was investigated by the Bi-State Narcotics Task Force, Texarkana Police Department, Bowie County Sheriff’s Office, and the Federal Bureau of Investigation and prosecuted by Assistant U.S. Attorney Mary Ann Cozby.
Axway, Inc. Agrees to Pay $6.2 Million to Resolve False Claims Act Allegations Related to GSA Multiple Awards ContractRead the Press Release
Baltimore, Maryland – Axway, Inc. has agreed to pay the United States $6.2 million to settle allegations under the False Claims Act that it and its predecessors provided the General Services Administration (GSA) with defective pricing information in order to obtain and maintain a GSA Multiple Award Schedule (MAS) contract that permitted them to sell software licenses and related services to federal agencies at inflated prices.
The settlement was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Inspector General Brian D. Miller of the GSA Office of the Inspector General.
“This agreement demonstrates the Department of Justice’s commitment to rooting out fraud in government procurements and protecting taxpayer dollars,” said U.S. Attorney Rod J. Rosenstein. “Companies that attempt to skirt the rules for securing government business should be on notice that they will be held accountable and will not be permitted to undermine the integrity of the procurement process.”
"Companies must provide complete and accurate pricing information during the GSA contracting process," said GSA Inspector General Brian D. Miller. "Failure to do so is cheating the government and ultimately the American taxpayers, and taxpayers deserve a better deal."
Under the MAS Program, prospective vendors agree to disclose their commercial pricing policies and practices to GSA in exchange for the opportunity to gain access to the broad federal marketplace and the ease of administration that comes from selling to hundreds of government purchasers under one central MAS contract. GSA regulations require that, during the initial contract negotiations with GSA, prospective vendors seeking a MAS contract make “current, accurate and complete” disclosures of the standard and non-standard discounts they offer to commercial customers. GSA relies on the accuracy of these disclosures in order to negotiate fair pricing for government purchasers. Additionally, after the MAS contract is awarded, regulations require that MAS Program vendors disclose to GSA any changes in their commercial pricing practices, including new discounts that are offered to commercial customers after the MAS contract is in place.
According to the Settlement Agreement, on October 3, 2001, GSA awarded an MAS contract to Valicert, Inc. for the sale of software licenses and related services. Valicert subsequently merged in 2003 with Tumbleweed Communications Corporation, which in turn merged with Axway in 2009. GSA approved the novation of the MAS contract to these successors. From 2001 to December 31, 2011, numerous federal agencies purchased products and services from Valicert, Tumbleweed and Axway based on the MAS contract pricing.
This settlement resolves allegations that during the initial negotiation of the contract, Valicert knowingly provided GSA with commercial pricing information that was not current, accurate and complete. As a result, the United States alleges that the MAS contract that was awarded to Valicert contained pricing that was less advantageous to the government than would have been negotiated had accurate and complete disclosures been made. In addition, the United States alleges that in 2007, when the MAS contract was renewed, Tumbleweed also failed to provide GSA with accurate and complete commercial pricing disclosures. Finally, the United States contends that after being novated onto the MAS contract, Tumbleweed and Axway failed to comply with the price reduction clause of the contract. As a result, the United States alleges that the MAS contract contained inflated prices, and that numerous government agencies relied on these inflated prices and overpaid for their purchases of software and related services.
The civil settlement resolves a lawsuit filed under the whistleblower provision of the False Claims Act, which permits private parties to file suit on behalf of the United States for false claims and obtain for themselves a portion of the government’s recovery. The civil lawsuit was filed in the District of Maryland by Kenneth Marcus, who is a former employee of Tumbleweed. The case is captioned United States ex rel. Kenneth Marcus v. Tumbleweed Communications Corp., DKC-08-1006. As part of today’s resolution, Mr. Marcus will receive $1,178,000 from the settlement.
The settlement was the result of an investigation by the U.S. Attorney’s Office for the District of Maryland and GSA Office of Inspector General, with assistance from the Defense Criminal Investigative Service and the Naval Criminal Investigative Service. The case was handled by Assistant U.S. Attorneys Michael A. DiPietro and Jason D. Medinger.
Another Telemarketer Sent to Prison for Timeshare Resale FraudRead the Press Release
Robert Thomas, 36, of Lakeworth, Fla., was sentenced to 40 months in federal prison for knowingly participating in a fraudulent telemarketing scam that victimized timeshare owners nationwide, Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today. In pronouncing the sentence, the United States District Judge explained that the prison term was necessary to promote respect for the law and to deter others from committing the same offense. “This is a very serious crime,” he said, noting that the victims of the scheme – many of whom had financial problems – were particularly vulnerable.
Thomas previously worked as a telemarketer for Universal Marketing Solutions and Creative Vacation Solutions – scam companies that operated out of Palm Beach County, Florida, from October 2007 to January 2010. All told, the companies defrauded 22,000 consumers to the tune of $30 million dollars. Victims were found in all 50 States, the District of Columbia and Puerto Rico, all 10 Canadian provinces and the Northwest Territory of Canada. There were at least 54 victims in the Southern District of Illinois, representing 28 of the district’s 38 counties.
In July, Thomas pled guilty to a one-count felony Information charging conspiracy to commit mail fraud and wire fraud in connection with the conduct of telemarketing.
As part of his plea, Thomas admitted that he and other telemarketers lied to consumers over the phone, falsely representing that their company had actual buyers for the consumers’ timeshare properties. In exchange for this false hope, Thomas and others solicited advanced fees of up to several thousand dollars from each victim in purported closing costs – fees they promised would be refunded to the timeshare owner once the closing on the property occurred. Many timeshare owners were told that their closings would take place within 60 to 90 days. Thomas and his co-conspirators, however, simply pocketed the fees. No closings ever took place, and despite collecting fees from 22,000 victims, not a single timeshare unit was ever sold.
Approximately 30 other people have been charged in connection with this scam. The former chief executive of Creative Vacation Solutions, Jennifer Kirk, pled guilty to a criminal Information on June 30, 2011. She was sentenced on January 9, 2012, to over 16 years in prison and five years’ supervised release. Over 20 others have also been sentenced, receiving prison terms that range from 8 months to 14 years.
The prosecutions follow an investigation by the St. Louis Field Office of the Chicago Division of the United States Postal Inspection Service, working in concert with the Florida Attorney General’s Office, the Florida Department of Agriculture and Consumer Services, and the Boynton Beach Florida Police Department. The case against Thomas was prosecuted by Assistant United States Attorneys Nathan D. Stump and Bruce E. Reppert.
As part of his sentence, Thomas was ordered to pay a $500 fine and a $100 special assessment. He will also spend three years on supervised release after his prison term.
Alleged “Zone 4” Gang Members Charged in Peoria’s “Don’t Shoot” Anti-Violence InitiativeRead the Press Release
Peoria, Ill. – This afternoon, 12 more alleged members of a rival Peoria street gang, known as “Zone 4,” are to appear in court on federal charges in the second round-up under the “Don’t Shoot” anti-violence strategy. One year ago, 12 members of the “Bomb Squad” were the first to face similar federal charges in Peoria’s “Don’t Shoot” anti violence strategy.
U.S. Attorney Jim Lewis, Central District of Illinois, and Peoria Mayor Jim Ardis were joined by representatives of local and federal law enforcement agencies, along with others working in support of the ‘Don’t Shoot’ initiative, to announce the indictment. The ongoing investigation is being conducted by the Peoria Police Department and the FBI Safe Streets Task Force. The case is being prosecuted in the Peoria Division of the U.S. Attorney’s Office by Assistant U.S. Attorney K. Tate Chambers.
The indictment was returned by the grand jury last week and sealed pending the arrest of several defendants this past weekend. Those charged are: Alan Fitzpatrick, 34; Aeiral Yarbrough, 25; Daryl McGee, 24; Sam Carpenter, 24; Willie Breedlove, 22; Michael Costic, 24; Shawn Joiner, 28; Jermaine Jones, 30; Deonta White, 24; Tyrell Logan, 26; Robert Nathan, 25; and, Tristan Shelton, 23, all of Peoria, Ill.
The indictment alleges that the 12 men are members and associates of a drug trafficking and violent criminal street gang, as defined by federal criminal statute; that the defendants engaged in a conspiracy to use, carry and possess firearms in relation to and to further a drug conspiracy; and, that they conspired to possess with intent to distribute and to distribute controlled substances, including cocaine, crack cocaine, heroin and marijuana, from about 2005 to the present.
The indictment alleges that “Zone 4,” and its associated subgroups, the “P-Stones” and “4 Corner Hustlers,” operated as a criminal street gang, an ongoing group or association of five or more that has as one of its primary purposes the commission of one or more criminal offenses, including conspiracy to distribute controlled substances, whose members were engaged within the past five years in a continuing series of offenses and the activities affected interstate commerce.
According to the indictment, from 2005 to the present, “Zone 4” and its subgroups, functioned as a continuing unit for a common purpose to achieve the gang’s objectives: acquiring money and other things of value through the trafficking and distribution of drugs, including cocaine, crack cocaine, heroin and marijuana, and committing acts of violence, including murder, attempted murder, armed robbery, carrying and using firearms, and possession of firearms.
Violent acts were allegedly committed, among other purposes: to protect the gang’s territory from encroachment by other gangs to allow associates and members to freely engage in criminal activities, including distribution of controlled substances; to enrich its members by acquiring cash, guns, drugs, and other property; to enforce discipline and loyalty among the gang; to protect the gang from retaliation by others as well as detection, apprehension and prosecution by law enforcement; and to promote and enhance the reputation and standing of the gang, its members and associates.
If convicted, for conspiracy to use, carry, and possess firearms in relation to and in furtherance of a drug conspiracy, the statutory penalty is up to 20 years in prison. For the offense of conspiracy to possess with intent to distribute and to distribute controlled substances, the penalty is five to 40 years in prison; if a defendant has one or more prior felony drug convictions, the enhanced statutory penalty is 10 years to life in prison.
If convicted as a member of a criminal street gang, defendants Fitzpatrick, Yarbrough, Carpenter, Joiner, White, Nathan, and Shelton, face enhanced sentencing penalties of up to 10 years in prison in addition to any other prison term, because, according to the indictment, each has been convicted within the past five years of requisite offenses to be subject to the penalty provision of this federal statute.
Members of the public are reminded that an indictment is merely an accusation; each defendant is presumed innocent until proven guilty.
Alleged Hacker Indicted in New Jersey for Data Breach Conspiracy Targeting Government Agency NetworksRead the Press Release
NEWARK, N.J. – The New Jersey U.S. Attorney’s Office has charged an alleged hacker in the United Kingdom with breaching thousands of computer systems in the United States and elsewhere – including the computer networks of federal agencies – to steal massive quantities of confidential data, U.S. Attorney Paul J. Fishman announced.
The federal indictment, filed in Newark federal court, charges Lauri Love, 28, of Stradishall, England, with one count of accessing a U.S. department or agency computer without authorization and one count of conspiring to do the same. An investigation led by the U.S. Army Criminal Investigation Command-Computer Crime Investigative Unit and the FBI in Newark revealed that Love allegedly illegally infiltrated U.S. government computer systems – including those of the U.S. Army, U.S. Missile Defense Agency, Environmental Protection Agency and National Aeronautics and Space Administration – resulting in millions of dollars in losses.
Law enforcement authorities in the United Kingdom, including investigators with the Cyber Crime Unit of the National Crime Agency (NCA), announced today that they arrested Love at his residence Friday, Oct. 25, 2013, in connection with an ongoing investigation by the NCA. Love was previously charged in New Jersey by federal complaint, also unsealed in connection with his arrest. He also is charged in a criminal complaint in the Eastern District of Virginia with alleged conduct related to other intrusions.
“According to the indictment, Lauri Love and conspirators hacked into thousands of networks, including many belonging to the United States military and other government agencies,” said U.S. Attorney Fishman. “As part of their alleged scheme, they stole military data and personal identifying information belonging to servicemen and women. Such conduct endangers the security of our country and is an affront to those who serve.”
According to the indictment unsealed in Newark federal court:
Between October 2012 and October 2013, Love and fellow conspirators sought out and hacked into thousands of computer systems. Once inside the compromised networks, Love and his conspirators placed hidden “shells” or “back doors” within the networks, which allowed them to return to the compromised computer systems at a later date and steal confidential data. The stolen data included the personally identifying information (PII) of thousands of individuals, some of whom were military servicemen and servicewomen, as well as other nonpublic material.
“Computer intrusions present significant risks to national security and our military operations,” said Daniel Andrews, director of the U.S. Army Criminal Investigation Command’s Computer Crime Investigative Unit. “The borderless nature of Internet-based crime underscores the need for robust law enforcement alliances across the globe. We appreciate the bilateral support of the National Crime Agency in bringing cyber criminals to justice.”
“This investigation shows the necessity and value of strong partnerships among law enforcement agencies worldwide in the fight against cyber criminals,” said FBI Special Agent in Charge Aaron T. Ford. “Cybercrime knows no boundaries, and without international collaboration, our efforts to dismantle these operations would be impossible.”
Love and his conspirators planned and executed the attacks in secure online chat forums known as internet relay chats, or “IRC.” They communicated in these chats about identifying and locating computer networks vulnerable to cyber attacks and gaining access to and stealing massive amounts of data from those networks. They also discussed the object of the conspiracy, which was to hack into the computer networks of the government victims and steal large quantities of non-public data, including PII, to disrupt the operations and infrastructure of the United States government.
To gain entry to the government victims’ computer servers, Love and conspirators often deployed what is known as a “SQL injection attack.” Structured Query Language is a type of programing language designed to manage data held in particular types of databases; the hackers identified vulnerabilities in SQL databases and used those vulnerabilities to infiltrate a computer network. They also exploited vulnerabilities in a web application platform that some of the targeted agencies used known as “Coldfusion.” Like SQL Injection attacks, this method of hacking allowed the conspirators to gain unauthorized access to secure databases of the victims. Once the network was infiltrated, Love and his conspirators placed malicious code, or malware, on the system. This malware created a “back door” or “shell,” leaving the system vulnerable and helping Love and the conspirators maintain access to the network.
The intrusions identified in the indictment are as follows:
Date
Organization
Location
Type of Attack
Data Involved
Army Corps - Engineer Research and Development Center
Vicksburg, Miss.
ColdFusion
demolition and disposal of military facilities
Oct. 6, 2012
Army Corps
Vicksburg, Miss.
ColdFusion
natural resource management
Oct. 6-9, 2012
U.S. Army – Network Enterprise Technology Command
Aberdeen Proving Ground, Md.
SQL Injection
PII (more than 1,000 individuals)
Oct. 7,8, 2012
U.S. Army – Army Contracting command
Redstone Arsenal, Ala.
SQL Injection
nonpublic competitive acquisition bid data and attachments
Oct. 9, 2012
U.S. military – Plans and Analysis Integration Office
Aberdeen Proving Ground, Md.
ColdFusion
defense program budgeting data
October 2012
U.S. Department of Defense – Missile Defense Agency
not specified in indictment
ColdFusion
PII (more than 4,000 individuals)
Dec. 23, 2012
Army Corps - Engineer Research and Development Center
Vicksburg, Miss.
ColdFusion
not specified in indictment
Jan. 11, 2013
U.S. Army War College – Strategic Studies Institute
Carlisle, Pa.
ColdFusion
not specified in indictment
July 10, 2013
National Aeronautics and Space Administration
not specified in indictment
ColdFusion
PII of numerous NASA employees
Jan. 3, 2013
Environmental Protection Agency - Federal Facilities Environmental Stewardship and Compliance Assistance Center
Newark, Del.
ColdFusion
non-PII personnel data
Love and his conspirators took steps to conceal their identities and illegal hacking activities. To mask their IP addresses, the conspirators used “proxy” and “tor” servers to launch the attacks. They also frequently changed their nicknames in online chat rooms, using multiple identities to communicate with each other.
If convicted, the defendant faces a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense, on each of the two counts with which he is charged.
U.S. Attorney Fishman credited special agents of the U.S. Army Criminal Investigation Command - Computer Crime Investigative Unit, under the direction of Director Andrews, and the FBI in Newark, under the direction of Special Agent in Charge Ford, with the investigation leading to the indictment. Fishman also recognized the important work of the U.S. Department of Defense, Office of Inspector General Defense Criminal Investigative Service, under the direction of Special Agent in Charge Jeffrey Thorpe, Cyber Field Office; EPA Office of Inspector General, under the direction of Michael Daggett, Deputy Assistant Inspector General for Investigations; the NASA Office of Inspector General, Computer Crimes Division; and U.S. Department of Energy, Office of Inspector General, Deputy Inspector General for Investigations under the direction of John Hartman, in this case.
The government is represented by Assistant U.S. Attorney Nicholas P. Grippo of the U.S. Attorney’s Office Criminal Division in Trenton.The charges and allegations contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Information on the charges in the Eastern District of Virginia can be obtained from the U.S. Attorney’s Office for that district at 703-842-4050 or by email at [email protected]
Love Indictment
13-417Alleged Hacker Charged in Virginia with Breaching Multiple Government Agency ComputersRead the Press Release
ALEXANDRIA, Va. – Lauri Love, 28, of Stradishall, England was charged in a criminal complaint unsealed today with conspiracy to access and damage the protected computer networks of multiple U.S. government agencies.
Dana J. Boente, Acting United States Attorney for the Eastern District of Virginia; Valerie Parlave, Assistant Director in Charge of the Federal Bureau of Investigation’s Washington Field Office; John R. Hartman, Deputy Inspector General for Investigations at the U.S. Department of Energy; and Nick DiGiulio, Special Agent in Charge, Office of Inspector General, U.S. Department of Health and Human Services, made the announcement after the unsealing of the criminal complaint in federal court.
Law enforcement authorities in the United Kingdom arrested Love at his residence on Friday, October 25, 2013, in connection with an ongoing investigation by the Cyber Crime Unit of the National Crime Agency. In addition, the United States Attorney’s Office for the District of New Jersey announced the unsealing of an indictment charging Love with allegedly infiltrating U.S. government computer systems—including those of the U.S. Army, U.S. Missile Defense Agency, Environmental Protection Agency, and National Aeronautics and Space Administration.
According to the criminal complaint filed in Virginia, between approximately October 2012 and August 2013, Love and his conspirators accessed without authorization protected computers belonging to the U.S. Department of Energy (DOE), U.S. Department of Health and Human Services (HHS), U.S. Sentencing Commission, and Regional Computer Forensics Laboratory. Love and his conspirators gained unauthorized access to the protected computers by exploiting a known vulnerability in Adobe ColdFusion, a software program that is designed to build and administer websites and databases. The vulnerability, which has since been corrected, allowed Love and his conspirators to access protected areas of the victims’ computer servers without proper login credentials—in other words, to bypass security on the protected computers.
After gaining unauthorized access to the protected servers, Love and his conspirators obtained administrator-level access to the networks using custom file managers, which allowed the conspirators to upload and download files, as well as create, edit, remove, and search for data. As detailed in the criminal complaint, Love and his conspirators used these techniques in order to engage in the following data breaches:
- From on or about July 24, 2013 through on or about August 8, 2013, Love and his conspirators gained unauthorized access to DOE’s protected computers. In an online conversation obtained by law enforcement, Love and his conspirators discussed the data breach in real time during the offense. Love commented, “they [the DOE] must have about 30k employees[,]” and he then copied the personal information of various employees from the protected computer to the online conversation.
- On or about December 24, 2012, Love and his conspirators gained unauthorized access to protected networks operated by HHS’s Health Resources and Services Administration and the National Institutes of Health.
- From on or about December 25, 2012 through on or about January 27, 2013, Love and his conspirators breached the U.S. Sentencing Commission’s servers, and after gaining unauthorized access, the conspirators altered the website to display a video that criticized the Sentencing Guidelines with respect to Internet-related crimes.
- From on or about January 11, 2013 through on or about February 14, 2013, Love and his conspirators gained unauthorized access to the computer networks of the Regional Computer Forensics Laboratory (RCFL), a national digital forensics lab and training center overseen by the FBI. Through the unauthorized access, Love and his conspirators successfully stole the personal information—including names, phone numbers, and e-mail addresses—of RCFL and FBI employees.
This was a joint investigation of the DOE and HHS Offices of Inspector General as part of the FBI Washington Field Office’s Cyber Task Force. Assistant United States Attorneys Ryan K. Dickey and Jay V. Prabhu are prosecuting the case on behalf of the United States.
Love faces a maximum penalty of 10 years’ imprisonment if convicted of the offenses charged in Virginia. Criminal complaints are only charges and not evidence of guilt. A defendant is presumed to be innocent until and unless proven guilty.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.
Additional information regarding the charges filed in New Jersey may be obtained at http://www.justice.gov/usao/nj.Alabama Man Pleads Guilty to His Involvement in an Identity Theft Scheme Using Stolen Prisoner NamesRead the Press Release
Montgomery, Alabama -
Harvey James pleaded guilty to one count of mail fraud and one count of aggravated identity theft for his role in a Stolen Identity Refund Fraud (“SIRF”) scheme, announced Assistant Attorney General Kathryn Keneally of the Justice Department's Tax Division and U.S. Attorney for the Middle District of Alabama George L. Beck Jr.
According to court documents and court proceedings, Harvey James obtained stolen identities from individuals who had access to inmate information from the Alabama Department of Corrections. For several years, James, his sister, Jacqueline Slaton, and others used those inmate names to file false federal and state tax returns. James and Slaton directed some of the false refunds to be sent to either prepaid debit cards or issued via check. In 2012, James and Slaton enlisted the assistance of U.S. Postal Service mail carrier Vernon Harrison in the scheme. Harrison, who provided James and his co-conspirators with mailing addresses to which they could mail debit cards, retrieved the debit cards from the mail and delivered them to James and his co-conspirators. In exchange, Harrison received substantial payments. Between 2010 and 2012, James and his co-conspirators filed hundreds of federal and state income tax returns that claimed over $1,000,000 in fraudulent tax refunds.
Sentencing has not yet been scheduled. James faces a minimum sentence of two years in prison and a maximum sentence of twenty-two years in prison, along with three years of supervised release, restitution and a maximum fine of $250,000. Slaton has already pleaded guilty and was sentenced to 70 months in prison. In July 2013, Harrison was found guilty by a jury for his role in the scheme. Harrison will be sentenced on Oct. 31, 2013.
The case was investigated by Special Agents of the IRS - Criminal Investigation. Trial Attorneys Jason H. Poole and Michael Boteler of the Justice Department’s Tax Division and Assistant U.S. Attorney Todd Brown are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found at justice.gov/tax.
PRESS CONTACT: Clark Morris
Email: [email protected]
Telephone: (334) 551-1755
Fax: (334) 223-7617Accountant Sentenced for Fraudulent ReturnRead the Press Release
United States Attorney Deborah R. Gilg announced that Donald Ray Ondrak, 61, of Lexington, Nebraska, was sentenced today in Lincoln, to 1 year and 1 day in prison by United States District Judge Laurie Smith-Camp, for aiding in the preparation of a false tax return. After prison, Ondrak will be required to serve 1 year of supervised release, and pay a fine in the amount of $5,000. Ondrak previously surrendered his CPA license.
Ondrak was a Certified Public Accountant in Lexington, Nebraska, who prepared tax returns for many farmers, businessmen, and businesses, in the central Nebraska area. In 2007, Ondrak filed a Form 1120 tax return for a medical equipment business that reflected a fraudulent $800,000 management fee expense as a “cost of labor”. This had the effect of lowering taxable income for the business, thereby reducing its tax liability by $254,715.
IRS Criminal Investigation Special Agent in Charge Sybil Smith said, “Tax return preparers have a duty to their clients to prepare tax returns that comply with the law and are accurate. IRS Criminal Investigation wants to make sure taxpayers do not pay good money for bad advice.”
This case was investigated by the Internal Revenue Service, Criminal Investigations Division.
Additional information about the Tax Division and its enforcement efforts may be found at www.justice.gov/tax.
25 October 2013
Woman Pleads Guilty to Deepwater Horizon Oil Spill FraudRead the Press Release
Gulfport, Miss. – Kimberly Marie Isabell, 32, of Gulfport, pled guilty in U.S. District Court on Tuesday, October 22, 2013, to one count of mail fraud, announced U.S. Attorney Gregory K. Davis.
Isabell admitted making a false claim to BP’s Gulf Coast Claims Facility, alleging that she lost earnings and work hours from her job at Isabell Janitorial Services in Gulfport as a result of the Deepwater Horizon Oil Spill. She received a check in the amount of $12,000 as a result of her false claim.
Isabell will be sentenced on Tuesday, January 28, 2014, at 9:30 a.m. by U. S. District Judge Sul Ozerden and faces a maximum sentence of 20 years in prison and a $250,000 fine. This case was investigated by the United States Secret Service and prosecuted by Assistant U.S. Attorney Andrea Jones.###
If you believe you have been a victim of fraud from a person or an organization soliciting relief funds on behalf of storm victims, contact the National Center for Disaster Fraud toll free at:
(866) 720-5721
You can also fax information to:
(225) 334-4707
or e-mail it to:
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Wisconsin Man Found Guilty of Possessing Child PornographyRead the Press Release
FARGO – U.S. Attorney Timothy Q. Purdon announced that on Oct. 25, 2013, Robert Carey Evans, 58, of Waukesha, Wis., was found guilty by a 12-person jury of 14 counts of possession of materials containing child pornography. The jury deliberated approximately three hours before returning the guilty verdicts. U.S. District Judge Ralph R. Erickson presided over the four-day trial.
This case came to the attention of law enforcement after a North Dakota Bureau of Criminal Investigations special agent assigned to the Internet Crimes Against Children Task Force discovered two computers geographically located in North Dakota that were sharing child pornography in a peer-to-peer network.
An agent from Homeland Security Investigations eventually traced the computers to Evan’s apartment located in South Fargo. Evans, a resident of Wisconsin, was living and doing consultant work in Fargo at the time. A search warrant was issued for Evan’s Fargo apartment where task force officers seized more than 13 hard drives and 43 DVDs containing child pornography.
A subsequent forensic examination of this media revealed more than 22,000 images and videos depicting mostly young girls engaged in sexually explicit conduct.The case was investigated by Homeland Security Investigations, North Dakota Bureau of Criminal Investigation and the Fargo Police Department.
Sentencing for Evans has been set for Jan. 15, 2014, in Fargo.
Assistant U.S. Attorney Jennifer Klemetsrud Puhl is prosecuting the case.
This case was prosecuted as part of Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the U.S. Attorneys’ Offices, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Week in Review – South BendRead the Press Release
FOR IMMEDIATE RELEASECONTACT: Mary Hatton
www.usdoj.gov/usao/inn/ CELL: (219) 314-9993
South Bend, Indiana —The United States Attorney’s Office announced the following activity in Federal Court:
PLEA:
Kahley Vergon-Mayotte, 28, of Monticello, Indiana, a defendant in the case US v Hoosier EMS Inc. et al., pled guilty before District Judge Joseph Van Bokkelen to the felony offense of conspiracy to commit health care fraud.Sentencing has been set for 1/8/2014.This charge was filed as a result of an investigation by the Federal Bureau of Investigation, the Medicaid Fraud Control Unit and the United States Department of Health and Human Services.This case is being prosecuted by Assistant United States Attorney Diane Berkowitz.
Jacalyn Selman, 54, of Kouts, Indiana, pled guilty before Magistrate Judge Christopher A. Nuechterlein to the felony offense of embezzling mail. Magistrate Nuechterleinis recommending that the district court accept the tendered guilty plea.Parties have 14 days in which to object to the magistrate judge’s recommendation. Sentencing has been set for 1/30/2014. This charge was filed as a result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives .This case is being prosecuted by Assistant United States Attorney Jesse Barrett.
Evan Vanator, 23, of South Bend, Indiana, pled guilty before Magistrate Judge Christopher A. Nuechterlein to the felony offense of possession of a firearm while being an illegal user of controlled substances. Magistrate Nuechterlein is recommending that the district court accept the tendered guilty plea.Parties have 14 days in which to object to the magistrate judge’s recommendation. Sentencing has been set for 1/21/2014. This charge was filed as a result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives .This case is being prosecuted by Assistant United States Attorney Frank Schaffer.
Lorenzo Coben, 33, pled guilty before Magistrate Judge Christopher A. Nuechterlein to the felony offense of using a firearm in relation to a crime of violence. Magistrate Nuechterlein is recommending that the district court accept the tendered guilty plea.Parties have 14 days in which to object to the magistrate judge’s recommendation. This charge was filed as a result of an investigation by the Federal Bureau of Investigation .This case is being prosecuted by Assistant United States Attorney Jesse Barrett.
If convicted in court, any specific sentence to be imposed will be determined by the judge after a consideration of federal sentencing statutes and the Federal Sentencing Guidelines.
Week in Review – HammondRead the Press Release
FOR IMMEDIATE RELEASECONTACT: Mary Hatton
www.usdoj.gov/usao/inn/ CELL: (219) 314-9993
Hammond, Indiana - The United States Attorney’s Office announced the following activity in Federal Court:
DISPOSITIONS:
Joshua Robinson, 23, of Lafayette, Indiana, was sentenced by Senior District Judge James Moody to 33 months imprisonment and 2 years of supervised release after pleading guilty to the felony offense of possession of a firearm with an obliterated serial number.According to documents filed in this case, Robinson, who has an extensive criminal history consisting of juvenile adjudications and adult criminal convictions, burglarized a residence where a .20 gauge shotgun and a .223 caliber rifle were taken. After the firearms were stolen, Robinson and a co-defendant proceeded to take the serial number off one of the firearms in preparation of selling the firearms in Chicago, Illinois. This case was the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Tippecanoe County Police Department and the Lafayette Police Department.This case was prosecuted by Assistant United States Attorney Nicholas Padilla.
Che Williams, Jr., 21, of Gary, Indiana, was sentenced by Senior District Judge James Moody to 30 months imprisonment and 2 years of supervised release after pleading guilty to the felony offense of possession of a firearm with an obliterated serial number.This case was the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives.This case was prosecuted by Assistant United States Attorney Dean Lanter.
Ramon Salinas, Jr., 37, of East Chicago, Indiana, was sentenced by Senior District Judge Rudy Lozano to 210 months imprisonment and 25 years of supervised release after pleading guilty to the felony offense of distribution of child pornography.According to documents filed in this case, law enforcement conducted an online Internet investigation to identify those possessing and sharing child pornography.The investigation identified an IP address belonging to the Salinas residence sharing files containing material depicting minors under the age of 16 engaged in sexual acts or poses.A search warrant was executed at this residence where law enforcement found that Salinas possessed at least 60 videos depicting minors engaging in sexually explicit conduct. Salinas also has a prior conviction for possession of child pornography in Marion County in 2005. This case resulted from an investigation by members of the Indiana Internet Crimes Against Children Task Force, including the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, the Indiana State Police, the Indianapolis Metropolitan Police Department and the Highland Police Department.This case was prosecuted by Assistant United States Attorney Jill Koster.
James Urschel, 47, of Lafayette, Indiana, was sentenced by Senior District Judge James Moody to 3 years of probation after pleading guilty to the felony offense of false impersonation of a federal officer.According to documents filed in this case, Urschel impersonated a Deputy United States Marshal while buying numerous firearms at Gander Mountain in Lafayette, Indiana.He would then pawn the guns at a local pawn shop for cash. This case was the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives.This case was prosecuted by Assistant United States Attorney Nicholas Padilla.
Charles E. Johnson, Jr., 33, of Gary, Indiana, was sentenced by Senior District Judge James Moody to 37 months imprisonment and 3 years of supervised release after pleading guilty to the felony offense of distribution of crack cocaine.According to documents filed in this case, law enforcement executed a search warrant at Johnson’s residence and found 17.9 grams of crack cocaine in a safe.Johnson had a felony conviction for dealing in cocaine in 2008 and was on probation for that offense when he was charged in this case. This case was the result of an investigation by the Federal Bureau of Investigation GRIT Task Force.This case was prosecuted by Assistant United States Attorney Jennifer Chang-Adiga.
Daryl V. Johnson, 40, of East Chicago, Indiana, was sentenced by Senior District Judge James Moody to 180 months of imprisonment and 3 years of supervised release after pleading guilty to the felony offense of possession of a firearm by a convicted felon.According to documents filed in this case, Johnson has 15 prior felony convictions and 9 misdemeanor convictions over a period of 18 years.Johnson was in a motor vehicle that was pursued by Hammond Police Department due to the occupants violating the seat belt law. After the vehicle fled from police, Johnson exited the vehicle and fled on foot. The police recovered a handgun from the route on which Johnson fled. This case was the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives HIDTA Task Force and the Hammond Police Department.This case was prosecuted by Assistant United States Attorney Nicholas Padilla.
Regina Cabell, 39, of Lafayette, Indiana, was sentenced by Senior District Judge Rudy Lozano to 18 months imprisonment and $79,000 in restitution after pleading guilty to the felony offense of health care fraud ---submitting a claim to Indiana Medicaid for providing a service to an Indiana Medicaid recipient to whom she did not actually provide the claimed service ---and failing to file a federal income tax return for her gross income of $297,567 in the 2011 tax year.According to documents filed in this case, Cabell, d/b/a L&G Transportation, submitted approximately $96,600 in false claims to Indiana Medicaid for providing transportation services that did not actually occur.This case was the result of an investigation by the Federal Bureau of Investigation, the Medicaid Fraud Control Unit and the Internal Revenue Service.This case was prosecuted by Assistant United States Attorney Diane Berkowitz.
Week in Review – Fort WayneRead the Press Release
FOR IMMEDIATE RELEASECONTACT: Mary Hatton
www.usdoj.gov/usao/inn/ CELL: (219) 314-9993
Fort Wayne, Indiana —The United States Attorney’s Office announced the following activity in Federal Court:
DISPOSITIONS:
Demarcus White, 30, of Fort Wayne, Indiana was sentenced by District Judge Theresa L. Springmann to 46 months of imprisonment and 2 years of supervised release after pleading guilty to the felony offense of being a felon in possession of a firearm.According to documents filed in this case, several firearms were discovered in White’s custody during a traffic violation stop. White had two rifles and one handgun in his possession.In June 2003, White was convicted of armed bank robbery and brandishing and using a firearm during and in relation to a crime of violence.This case was the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives.This case was prosecuted by Assistant United States Attorney Anthony Geller.
Ron Luthe, 40, of Fort Wayne, Indiana was sentenced by District Judge Theresa L. Springmann to 30 months imprisonment with 2 years supervised release after pleading guilty to the felony offense of being a felon in possession of a firearm.According to documents filed in this case, in May 2012, Luthe was arrested with a Glock .40 handgun while working at a gun shop.In 2002, Luthe was sentenced for a conviction for Theft and Receiving Stolen Property.This case was the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives.This case was prosecuted by Assistant United States Attorney Tina Nommay.
WASHINGTON – Harvey James Pleaded Guilty to One Count of Mail Fraud and One Count of Aggravated Identity Theft for His Role in A Stolen Identity Refund Fraud (“SIRF”) Scheme, Announced Assistant Attorney General Kathryn Keneally of the Justice DepartmentRead the Press Release
ALABAMA MAN PLEADS GUILTY TO HIS INVOVLEMENT IN AN
IDENTITY THEFT SCHEME USING STOLEN PRISONER NAMES AND A CORRUPT POSTAL EMPLOYEEAccording to court documents and court proceedings, Harvey James obtained stolen identities from individuals who had access to inmate information from the Alabama Department of Corrections. For several years, James, his sister, Jacqueline Slaton, and others used those inmate names to file false federal and state tax returns. James and Slaton directed some of the false refunds to be sent to either prepaid debit cards or issued via check. In 2012, James and Slaton enlisted the assistance of U.S. Postal Service mail carrier Vernon Harrison in the scheme. Harrison, who provided James and his co-conspirators with mailing addresses to which they could mail debit cards, retrieved the debit cards from the mail and delivered them to James and his co-conspirators. In exchange, Harrison received substantial payments. Between 2010 and 2012, James and his co-conspirators filed hundreds of federal and state income tax returns that claimed over $1,000,000 in fraudulent tax refunds.
Sentencing has not yet been scheduled. James faces a minimum sentence of two years in prison and a maximum sentence of twenty-two years in prison, three years of supervised release, restitution and a maximum fine of $250,000. Slaton already pleaded guilty and was sentenced to 70 months in prison. In July 2013, Harrison was found guilty by a jury for his role in the scheme. Harrison will be sentenced on Oct. 31, 2013.
The case was investigated by Special Agents of the IRS - Criminal Investigation. Trial Attorneys Jason H. Poole and Michael Boteler of the Justice Department’s Tax Division and Assistant U.S. Attorney Todd Brown are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found at www.justice.gov/tax.
13-1138U.S. Attorney Hartunian is asking everyone to look in their medicine cabinets and dispose of unused prescription drugs this Saturday Prescription drug abuse remains a serious threat to our children, yet there are simple things everyone can do to helpRead the Press Release
Albany, NY United States Attorney Richard S. Hartunian is once again urging parents, grandparents, teachers, nurses and the community as a whole to help stop the abuse of prescription drugs among young people. The problem is more widespread than people think, and there are simple things everyone can do to save those who may fall into such abuse.
"The abuse of prescription and over-the-counter drugs happens in many, often innocent, ways, but the costs of such abuse can be astronomical," said U. S. Attorney Hartunian. "1 in 8 teens has reported getting high on over-the-counter cough medicine1 and 1 in 12 high school seniors reported nonmedical use of the prescription pain reliever Vicodin along with 1 in 20 reporting they've used OxyContin.2 After marijuana, prescription and over-the-counter medications account for most of the commonly abused drugs by our youth.3 These aren't drugs being manufactured behind closed doors and sold on street comers. These are substances readily available in each of our homes. We all have a responsibility in helping to stop this scary and upward trend of prescription drug abuse."
The trends of prescription drug abuse are escalating. More than one-half of the estimated 2.4 million first-time prescription drug abusers were females and about one-third of them were between 12 and 17 years old.4 Worse yet, among all young adults ages 18 to 25, 5.9% report using nonmedical drugs within the past month in the National Survey on Drug Use and Health study.5
"What's most alarming about these trends of use is where young people are obtaining these drugs," warns U.S. Attorney Hartunian. "Over half of those who reported nonmedical drug use said they were given the drugs by a friend or relative.6 Close to 20 percent said they took the substances from a friend or relative.7 In response, we must do all we can to monitor the prescription drugs that are in our possession, discard unused medications properly and talk with young people about the very real dangers of prescription drug abuse."
Each year the Drug Enforcement Administration hosts a national "Take-Back" day. This year's event is this Saturday, Oct. 26th. Plan to dispose safely of unused prescription drugs on that day at collection sites which will be open between 1 0 am to 2 pm. The public can find a nearby collection site by visiting www.dea.gov, clicking on the "Got Drugs?" icon, and following the links to a database where they can enter their zip code. Or they can call 1-800-882-9539.
The Partnership at Drugfree.org has new ads aimed at helping parents and grandparents understand how important it is to monitor the possession of their prescription medications, especially pain killers. You can view and share these ads with everyone you know: http://www.drugfree.org/videos/
Talk can be one of the most effective tools we have. Talking with your own children and grandchildren about the dangers of prescription drug abuse is important, just as in the past we have talked about the dangers of drinking, drinking and driving and the use of tobacco. When adults have open, honest discussions with young people, they take it to heart. And it just might be one of those conversations, in the end, that keeps your teen from trying nonmedical drugs.
"Take time this week. Don't put it off. Dispose of your unused prescriptions. Talk with the young people around you about these dangers. You may be saving a loved one's life," suggested U.S. Attorney Hartunian.
Steps YOU can take this week to help stop prescription drug abuse
1. DISPOSE of your unused prescription drugs, especially unused pain killers, on Saturday, Oct. 26th. Find a location near you by visiting http://www.dea.gov/index.shtml and clicking on the "Got Drugs?" icon or call1-800-882-9539.
2. WATCH AND SHARE these ads to learn how easy it is to obtain prescription drugs: http://www.drugfree.org/videos/
3. TALK with your own children and grandchildren about the dangers of using prescription drugs and over-the-counter medications that aren't meant for them. For ideas of what to say, go to www.drugfree.org
FREE EDUCATIONAL WEBINAR
Clink on this webinar link and share this link to learn more about Prescription Drug Abuse Link: http://neric.welearntube.org/?q=node/314
_________________
1The Medicine Abuse Project, The Partnership at Drugfree.org website http://medicineabuseproject.org/assets/documents/Preventing_teen_over_the_counter_cough_med_abuse_2014.pdf
2National Institute on Drug Abuse's Monitoring the Future Survey, 2010
3National Institute on Drug Abuse Research Report Series 5
4Ibid.
5National Survey on Drug Use and Health, 2010
6University of Michigan, 2010 Monitoring the Future Study
7Ibid.Three Time Convicted Felon Pleads Guilty to Firearms and Drugs ChargesRead the Press Release
ROCHESTER, N.Y.—U.S. Attorney William J. Hochul, Jr. announced today that Jewell D. Wiggins, 46, of Rochester, N.Y., pleaded guilty before U.S. District Judge David G. Larimer to possession of cocaine with intent to distribute and possession of a firearm and ammunition as a convicted felon. The charges carry a maximum penalty of 30 years in prison, a fine of $2,000,000, or both.
Assistant U.S. Attorney Charles E. Moynihan, who is handling the case, stated that the defendant was arrested after members of the Rochester Police Department, while conducting a routine traffic stop of his car, found the defendant in possession of a loaded .45 caliber Colt Combat Commander semiautomatic handgun. During the investigation, Wiggins made several admissions to possessing the firearm.
Once under arrest for possessing the firearm, the defendant was transported to the Rochester Police Department Public Safety Building. During this transport, the Rochester Police Department officer observed Wiggins moving around in the backseat of the police vehicle. As this was happening, the defendant stated, “I just want you to know, I’m only moving around back here because I have a bad leg, not because I’m doing anything funny.” The officer searched the rear of his patrol vehicle after he had turned the defendant over the Monroe County Jail and found that the defendant had discarded thirty small bags of cocaine and five small bags of marijuana. Officers also found that the defendant possessed over $300.00 in United States currency.
The plea is the culmination of an investigation on the part of Special Agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Resident Agent-in-Charge, Scott Heagney, members of the Rochester Police Department, under the direction of Police Chief James Sheppard.
Sentencing is scheduled for January 15, 2014, at 2:00 p.m. before Judge Larimer.Three South Floridians Convicted in $2.2 Million Dollar Identity Theft Tax Refund Fraud SchemeRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Michael J. De Palma, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), Paula Reid, Special Agent in Charge, United States Secret Service, Miami Field Office, and Rafael P. Hernandez, Jr., Chief, North Miami Beach Police Department announce today that a federal jury in Miami found defendants Frantz Pierre, 33, of Parkland, and Terry Pierre, 29, and Christmanie Bissainthe, 33, of Miami, guilty of charges relating to their participation in a stolen identity tax refund scheme that resulted in the submission of approximately $2.2 million in fraudulent refund claims to the Internal Revenue Service.
Specifically, the jury convicted Frantz Pierre, Terry Pierre and Christmanie Bissainthe on 12 counts, including conspiracy to submit fraudulent claims to the government, access device fraud, and aggravated identity theft.
According to trial evidence and testimony, 1,000 pre-paid debit cards were sent to Frantz Pierre’s business in the name of Tax Professors in May 2010. Co-conspirators subsequently caused approximately 338 fraudulent and unauthorized tax returns using stolen prisoners’ identities to be submitted to the IRS seeking $2.2 million in refunds for payment onto the Tax Professors’ debit cards. The IRS paid approximately $1.9 million in refunds in connection with these fraudulent returns to these debit cards. Evidence at trial included, among other things, video evidence of all three defendants withdrawing funds from these debit cards.
According to trial evidence and testimony, law enforcement executed a search warrant at defendant Frantz Pierre’s seven-bedroom residence in Parkland, Florida in July 2012. The evidence showed that this residence had been purchased primarily with fraudulent tax refund proceeds. After law enforcement announced their presence, an individual was observed tossing laptops from the second floor of Pierre’s residence towards the pool. Law enforcement found over 70 pre-paid debit cards and a thumb drive with over 2,000 people’s names, dates of birth, Social Security numbers, and IRS pin numbers in Frantz Pierre’s bedside dresser.
Sentencing is scheduled for January 22, 2014 at 10:00 a.m. before U.S. District Judge Marcia G. Cooke. At sentencing, Frantz Pierre faces a maximum sentence of 41 years in prison, Terry Pierre faces a maximum sentence of 31 years in prison, and Christmanie Bissainthe faces a maximum sentence of 29 years in prison.
Mr. Ferrer commended the investigative efforts of the Identity Theft Tax Refund Strike Force, with special commendation to IRS-CI (Miami and St. Paul), the U.S. Secret Service, and the North Miami Beach Police Department. The case is being prosecuted by Assistant U.S. Attorneys Michael N. Berger and Cristina Moreno.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Third Defendant Sentenced in $14 Million Identity Theft Tax Refund Fraud SchemeRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Michael J. DePalma, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), Paula Reid, Special Agent in Charge, U.S. Secret Service, Matthew Boyd, Chief, Miami Gardens Police Department, and Larry Gomer, Chief, North Miami Beach Police Department, announce that defendant Serge St-Vil, 61, of Miami, was sentenced today for his participation in a stolen identity tax refund scheme that resulted in the submission of approximately $14 million in fraudulent refund claims. St-Vil was sentenced to 96 months in prison, followed by three years of supervised release and a $7 million forfeiture money judgment. St-Vil previously pled guilty to one count of wire fraud in violation of Title 18, United States Code, Section 1343, and one count of aggravated identity theft in violation of Title 18, United States Code, Section 1028A.
According to court documents, in 2010, St-Vil, Muller Pierre, and Finshley Fanor were involved in a scheme to file fraudulent and unauthorized tax returns seeking refunds. During the course of the scheme, there were over 5,000 fraudulent and unauthorized returns submitted to the Internal Revenue Service seeking over $14 million in refunds. Nearly all of these returns were submitted in the names of deceased persons. St-Vil was responsible for the filing of thousands of these returns using an Electronic Filing Identification Number obtained by Fanor.
Court documents show that the Internal Revenue Service paid out $12.1 million in refunds into bank accounts controlled by the defendants and co-conspirators connected to the scheme. There was over $6 million in refunds deposited into accounts controlled directly by St-Vil and an additional $1.6 million deposited indirectly into St-Vil’s bank account from co-conspirators’ accounts. In addition, there was $600,000 in refunds deposited into accounts controlled by Pierre and an additional $1.7 million deposited indirectly into Pierre’s bank account from co-conspirators’ accounts.
On June 26, 2013, Muller Pierre, 62, of North Miami Beach, was sentenced to 57 months in prison, to be followed by 3 years of supervised release. Pierre pled guilty to wire fraud in violation of Title 18, United States Code, Section 1343. On May 22, 2013, Finshley Fanor, 34, of Lauderhill, was sentenced to two years of probation. Fanor pled guilty to conspiracy to defraud the government with respect to claims in violation of Title 18, United States Code, Section 286.
Mr. Ferrer commended the investigative efforts of the Identity Theft Tax Refund Strike Force, with special commendation to the IRS-CI, the U.S. Secret Service, the Miami Gardens Police Department, and the North Miami Beach Police Department. The case is being prosecuted by Assistant U.S. Attorney Michael N. Berger.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Syracuse Trucking Company Settles Environmental ViolationRead the Press Release
SYRACUSE, NEW YORK - United States Attorney Richard S. Hartunian announced today that his office has settled a civil prosecution under the Clean Water Act. Riccelli Enterprises, Inc. filled in over 5 acres of federally regulated wetlands with a parking lot. Riccelli agreed to remove the illegal parking lot and pay a $50,000.00 fine. Riccelli signed a similar agreement with the State of New York, agreeing to remove the illegal parking lot and to pay an additional $50,000.00 fine.
Complaint
The federal settlement is based upon a Complaint filed in the U.S. District Court for the Northern District of New York. The Complaint’s allegations include the following: Riccelli Enterprises, Inc. and Riccelli Enterprises, LLC are corporations with offices located at 6131 East Taft Road, North Syracuse, Onondaga County, New York. The Clean Water Act prohibits the discharge of pollutants into navigable waters unless a permit is obtained from the U.S. Army Corps of Engineers (Corps). Sometime prior to July 30, 2008, and without seeking a permit from the Corps, Riccelli filled in wetlands to construct a parking lot at 6131 East Taft Road, North Syracuse. Riccelli used mechanized land-clearing and earth-moving equipment to fill in the parking lot.
An environmental study concluded that Riccelli had disturbed 6.06 acres of land, including 5.39 acres of regulated wetlands. The fill used by Riccelli to create the parking lot included dirt, spoil, rock, and sand, all of which are described as “pollutants” by the Clean Water Act. The Corps issued a Notice of Violation to Riccelli, which stated that Riccelli had filled in the parking lot without Department of the Army authorization and in violation of the Clean Water Act.
Consent Decree
In August, 2013 Riccelli and the United States signed a Consent Decree. The Consent Decree provides in part that 1) Riccelli shall pay a civil penalty to the United States in the amount of $50,000.00, 2) Riccelli shall restore the 5.39 acres of disturbed wetlands, pursuant to a “Wetland Restoration and Monitoring Plan” prepared by an environmental firm in January, 2013, and 3) the United States may enter Riccelli’s premises at all reasonable times to monitor Riccelli’s activities, obtain samples, verify data submitted to the United States, and inspect and evaluate Riccelli’s restoration efforts. The Wetland Restoration and Monitoring Plan provides that Riccelli shall excavate and remove the fill material, add topsoil as needed, reseed and revegetate the area, restore the area to its condition before the parking lot was installed, and its environmental firm will submit annual monitoring reports for five years, which will include studies of hydrology, and samples of vegetation from 15 plots.
After the parties signed the Consent Decree a notice was published in the Federal Register and public comment was invited. No comments or objections were received. On October 24, 2013 the Consent Decree was approved and ordered by the Hon. Gary L. Sharpe, Chief U.S. District Judge.
Diane Kozlowski, the Chief of the Regulatory Branch of the U.S. Army Corps of Engineers, Buffalo District, stated that, "[T]his resolution directly supports the Corps Regulatory Program's goal to provide strong protection of the nation’s aquatic environment, including wetlands, and help maintain the physical, chemical and biologic integrity of the nation’s waters. This resolution will help deter those entities who contemplate proceeding with a project in the vicinity of waters subject to regulation under the Clean Water Act without first contacting and coordinating with the Corps to obtain the proper authorizations required by law.”
Richard S. Hartunian, United States Attorney for the Northern District of New York, stated that “The United States Attorney’s Office is committed to the protection of the environment and the aggressive enforcement of the Clean Water Act. This case reflects a coordinated effort by this office,the Department of Justice, and the U.S. Army Corps of Engineers.”
This matter is assigned to Assistant U.S. Attorney Charles E. Roberts. Colin Ozanne, Esq. of the U.S. Army Corps of Engineers Buffalo District, and Eric Hostetler, Esq. of the U.S. Department of Justice are also assigned. News inquiries should be directed to Executive Assistant U.S. Attorney John Duncan, tele. (315) 448-0672.
Six Individuals Charged in Manhattan Federal Court in Connection with Armed Robberies of Cell Phone StoresRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Raymond W. Kelly, the Police Commissioner of the City of New York (“NYPD”), announced today the unsealing of an Indictment charging six members of an armed robbery crew operating in the Bronx, Brooklyn and Queens, with robbery conspiracy and firearms offenses. Five of the defendants charged in the Indictment – HENRY JAMES, EDWARD MATTHEWS, KELVIN GREEN, UNTRA JONES JR., and TYRELL JONES – were previously charged by complaint in September 2013. Of the five defendants charged in September 2013, all but HENRY JAMES were previously arrested, remanded, and remain in custody. JAMES and previously uncharged defendant JEROME ORTIZ were arrested on Wednesday and presented before U.S. Magistrate Judge Frank Maas yesterday. JAMES and ORTIZ were detained.
Manhattan U.S. Attorney Preet Bharara said: “As alleged, the defendants unleashed a rash of robberies at gunpoint across three boroughs, in which they stole money and cell phones while dressed in disguise. The perpetrators of violence cannot hide from the law, as the arrests of these defendants show.”
NYPD Commissioner Raymond W. Kelly said: “New York City is a safer place for residents and businesses because of our continued efforts to stop the source of violent crime. In this case, our investigators tracked down and apprehended a gang that allegedly robbed numerous stores across three boroughs at gunpoint. I commend our detectives for their diligent efforts as well as our federal partners and the prosecutors with the U.S. Attorney’s Office for their fine work throughout this investigation.”
According to the allegations contained in the Superseding Indictment and other court documents previously filed in Manhattan federal court:
Between approximately July 2013 and October 2013, members of the robbery crew engaged in a series of over 30 armed robberies and attempted armed robberies of cellular phone stores located throughout the Bronx, Queens, and Brooklyn.
The robberies followed a simple but violent pattern: On each occasion, two or three members of the crew would enter a cellular phone store, often wearing masks, wigs and other disguises; each member of the crew would have a gun; and the robbers would brandish their guns and demand money and cellular phones from employees of the stores.
JAMES, 45, of Brooklyn, New York; ORTIZ, 40, of Brooklyn, New York; MATTHEWS, 61, of Brooklyn, New York; GREEN, 44, of Brooklyn, New York; TYRELL JONES, 26, of Bronx, New York; and UNTA JONES, 27, of Brooklyn, New York, are each charged with one count of Hobbs Act robbery conspiracy, which carries a maximum sentence of life in prison, and one count of brandishing a firearm in furtherance of the Hobbs Act robbery conspiracy, which carries a maximum sentence of life in prison.
Mr. Bharara praised the investigative work of the NYPD, especially detectives from the Bronx Robbery Squad and Brooklyn Robbery Squad. Mr. Bharara also thanked the U.S. Marshals Service Fugitive Squad for their outstanding assistance in the pursuit and arrest of JAMES.
The case is being prosecuted by the Office’s Violent Crimes Unit. Assistant United States Attorneys Andrew Bauer and Andrea Griswold are in charge of the prosecution.
The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
U.S. v. Henry James et al. Indictment
Shawn Anthony Fernandez 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 25, 2013, before U.S. District Judge Sam E. Haddon, SHAWN ANTHONY FERNANDEZ, a 49-year-old resident of Butte, was sentenced to a term of:
- ison: 48 months
- ecial Assessment: $100
- pervised Release: 5 years
FERNANDEZ was sentenced in connection with his guilty plea to conspiracy to possess with the intent to distribute methamphetamine.
In an Offer of Proof filed by Assistant U.S. Attorney Paulette L. Stewart, the government stated it would have proved at trial the following:
From approximately December 2011 until approximately July 2012, FERNANDEZ and others possessed with the intent to distribute methamphetamine in Butte and other places in Montana. The methamphetamine came from Las Vegas for distribution in the Butte area.
FERNANDEZ was arrested by law enforcement on July 29, 2012, with approximately 110 grams of pure methamphetamine in the trunk of his vehicle and hidden in the bottom of a cereal box.
FERNANDEZ admitted to this conduct when interviewed by law enforcement. This information was confirmed through the interview of other witnesses. Money Gram records also confirmed FERNANDEZ's admissions.
A laboratory analysis confirmed the presence of methamphetamine that was confiscated by law enforcement during their investigation.
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 a cooperative effort between the U.S. Department of Homeland Security - Homeland Security Investigations, the Butte-Silver Bow Law Enforcement, and the Drug Enforcement Administration Lab.
Rhode Island Man Sentenced to Life in Prison for Murder and Robbery of Gas Station ManagerRead the Press Release
Jason W. Pleau, 35, of Providence, R.I., was sentenced today to life in prison for the murder and robbery of Woonsocket, R.I., gas station manager David D. Main. Pleau chased, shot at close range and robbed Main on Sep. 20, 2010, as Main approached the doorstep of a Woonsocket bank where he was to have deposited receipts belonging to the gas station that he managed.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney Peter F. Neronha of the District of Rhode Island; Rhode Island Attorney General Peter F. Kilmartin; Colonel Steven G. O’Donnell, Superintendent of the Rhode Island State Police; Woonsocket Police Chief Thomas S. Carey; and Special Agent in Charge Vincent B. Lisi of the FBI’s Boston Field Office made the announcement following sentencing by U.S. District Court Judge William E. Smith.
Pleau pleaded guilty on July 31, 2013, to conspiracy to commit Hobbs Act robbery; Hobbs Act robbery; and carrying, using, and discharging a firearm during and in relation to a federal crime of violence resulting in death.
Co-defendant Jose A. Santiago, 36, formerly of Springfield, Mass., pleaded guilty on Sep. 5, 2013, to conspiracy to commit Hobbs Act robbery; Hobbs Act robbery; and carrying, using, and discharging a firearm during and in relation to a federal crime of violence resulting in death. Santiago is scheduled to be sentenced on Jan. 9, 2014.
A third defendant, Kelly Marie Lajoie, 35, formerly of Springfield, Mass., pleaded guilty on Dec. 9, 2011, to Hobbs Act conspiracy, aiding and abetting a Hobbs Act robbery, and use of a firearm during a federal crime of violence. A sentencing hearing has not been scheduled.
The matter was investigated by the Woonsocket Police Department, Rhode Island State Police and the FBI.
The case was prosecuted by Assistant U.S. Attorneys Adi Goldstein and William J. Ferland of the District of Rhode Island and Trial Attorney Jacabed Rodriguez-Coss of the Criminal Division's Capital Case Section.
Real Estate Developer Pleads Guilty to ERISA Fraud and Failure to Pay over TaxesRead the Press Release
WILMINGTON, Del. – Charles M. Oberly, III, United States Attorney for the District of Delaware announced that Michael A. Stortini – the managing member of the Frank Robino Companies, LLC, (“FRC”) a real estate development company in Wilmington, Delaware – pleaded guilty yesterday before United States District Court Judge Richard G. Andrews to charges of Theft from an Employee Pension Benefit Plan and Willful Failure to Pay Over Tax. Sentencing has been scheduled for March 11, 2014.
From facts disclosed at the plea hearing, in 2009, Stortini diverted over $600,000 in funds from an employee 401(k) account to pay business expenses associated with the company. Moreover, in 2009 and 2010, Stortini failed to pay over $450,000 in payroll taxes to the Internal Revenue Service for entities related to FRC. Over the same time period, Stortini transferred over $900,000 from company accounts for his personal use.
This case was investigated by IRS, Criminal Investigation and the United States Department of Labor, Office of the Inspector General, and prosecuted by Assistant United States Attorney Shawn A. Weede. For further information, please contact Public Information Officer Kimberlynn Reeves at (302) 573-6277, ext. 16287.