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Monday 26 August 2013
Owners/Operators of Two Shreveport Businesses Plead Guilty to Money Laundering, Wire Fraud and Tax Evasion ChargesRead the Press Release
SHREVEPORT, La. – United States Attorney Stephanie A. Finley announced today that William Paul Boyter, 76; Michael Paul Boyter, 51; and Anthony Reuben Riley, 49, all of Shreveport, pleaded guilty before U.S. District Judge Elizabeth E. Foote to charges of conspiracy, money laundering, tax evasion, failure to comply with federal banking regulations, and wire fraud. Also charged as defendants in the case are two businesses operated by the three defendants: Mike’s Auto Sales Inc. and A-1 Auto Finance Company.According to evidence presented in the 19-count superceding indictment filed on September 19, 2012, the defendants engaged in a conspiracy to commit money laundering beginning in 1996 through November 2010. The defendants’ scheme revolved around the sale and financing of used and new vehicles to individuals who derived, or represented that they derived, significant income from the distribution of illegal drugs. The defendants knowingly accepted cash proceeds from drug dealers, allowed vehicle purchases in the names of nominees, and falsified records of payments received. The defendants provided false information to law enforcement agencies, including the Shreveport Police Department and the Harrison County Sheriff’s Office, to facilitate the release of vehicles seized from drug dealers.
In 2009 and 2010, the FBI conducted multiple “sting” operations directing cooperating individuals to purchase vehicles in the names of nominees and using large cash payments towards the purchase of those vehicles. These operations proved that the defendants readily accepted large amounts of money thought to be drug proceeds and skimmed cash from down payments by manipulating records to show lower sales prices and reduced amounts of down payments.
The indictment also charges several violations of The Bank Secrecy Act (BSA), which requires that businesses, including motor vehicle dealerships, take a number of precautions against financial crimes. One such precaution is filing and reporting certain data indicative of money laundering, including cash transactions over $10,000 on a Form 8300. The indictment charges five counts of failure to file a Form 8300 and three counts of filing a false Form 8300.
Additionally, the indictment charges that Michael Boyter evaded taxes for the years of 2007 through 2010 by filing false information on his tax documents. Michael Boyter intentionally understated his income on his personal tax returns, while paying for personal items and services, including an extensive house remodel, with business checks and/or cash. In his plea agreement, Michael Boyter agreed to pay $290,381 to the IRS.
“The defendants have admitted to their involvement in assisting drug traffickers in their illegal activities that took place at Mike’s Auto Sales and A-1 Auto Finance,” Finley stated. “They sold vehicles to drug dealers and used the money to enrich themselves. They further broke the law by attempting to hide the proceeds of the illegally obtained wealth by lying on tax forms and not reporting income. We thank all of the federal, state and local law enforcement agencies who participated in this investigation. My office will continue to vigorously prosecute those who do business with criminal elements in order to make quick profit.”
“This is an important victory for the American public,” stated Gabriel Grchan, Special Agent in Charge, IRS Criminal Investigation. “Michael Boyter, William Boyter and Anthony Riley have taken responsibility for their roles in these crimes with the entering of their guilty pleas. It is important to note that not only are the Boyters and Mr. Riley going to be sentenced for their crimes, but the government has seized a significant portion of the illegal proceeds through asset forfeiture. The role of IRS CI in money laundering investigations is to follow the money so we can financially disrupt and dismantle these types of criminal enterprises. IRS Criminal Investigation is proud to provide its financial expertise as we work alongside our law enforcement partners to bring criminals to justice.”
The defendants also agreed to forfeit the property of Mike’s Auto Sales and A-1 Auto Finance as well as a money judgment in the amount of $1.3 million.
William Paul Boyter faces up to 20 years in prison, a $250,000 fine, and three years of supervised release for the conspiracy to launder monetary instruments charge. Michael Paul Boyter also faces up to 20 years in prison, a $250,000 fine, and three years of supervised release for wire fraud and faces up to five years in prison, a $250,000 fine, and three years of supervised release for the evade or defeat tax charges. Riley faces up to 10 years in prison, a $250,000 fine, and three years of supervised release for the failure to file Form 8300 charges. A sentencing date of January 29, 2014 was set.
This prosecution is the culmination of an investigation dubbed Operation NOMAS and conducted by the Organized Crime Drug Enforcement Task Force (OCDETF). OCDETF is a joint multi-agency group consisting of federal, state, and local law enforcement agencies with a cooperative approach to combat drug trafficking. Investigations of businesses that assist drug dealers in spending and hiding their criminal proceeds is an important part of the OCDETF mission.
Operation NOMAS was a jointly conducted investigation by the FBI’s Northwest Louisiana Violent Crimes Task Force, IRS-Criminal Investigations, DEA, U.S. Marshals Service, Immigration & Customs Enforcement, Shreveport Police Department, Caddo Parish Sheriff’s Office, Bossier City Police Department, Louisiana State Police, the Louisiana National Guard Counter-Drug Task Force, and the DeSoto Parish Sheriff’s Office. The Harrison County Sheriff’s Office in Marshall, Texas, also assisted.
Assistant U.S. Attorneys Allison D. Bushnell and Cytheria D. Jernigan are prosecuting the case.
Norfolk Man Sentenced for Carjacking Sears Delivery TruckRead the Press Release
NEWPORT NEWS, Va. – Gabriel Daniel Morrison Mitchell, 32, of Norfolk, Va. was sentenced on Friday to 260 months in prison. Mitchell was convicted by a federal jury on June 22, 2012, on charges of conspiracy to commit robbery, robbery, carjacking, and brandishing a firearm during a crime of violence.
Neil H. MacBride, United States Attorney for the Eastern District of Virginia, and Carl J. Vasilko, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives’ (ATF) Washington Field Division, made the announcement after the sentencing by United States District Judge Mark S. Davis.
On January 10, 2012, Gabriel D. M. Mitchell and co-defendant, Antonio D. McGhee, carjacked a Sears delivery truck while it was delivering appliances in Hampton, Virginia. They were given information as to the property on the truck and the delivery schedule by an employee of a Sears sub-contractor, Travis Williams, who posed as one of the two victims. The actual victim was handcuffed, duct taped, and blind folded while Williams was barely restrained. Mitchell and McGhee used a U-Haul truck to off load the appliances. The Sears appliances were later recovered. McGhee was also convicted by a jury on June 22, 2012, and on February 4, 2013, was sentenced to 244 months in prison.
This case was investigated by Bureau of Alcohol, Tobacco, Firearms and Explosives and assisted by Hampton Police Department. Assistant United States Attorney Howard J. Zlotnick and Brian J. Samuels prosecuted this case on behalf of the United States.
A copy of this press release may be found on the website of the United States Attorney's Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.Navajo, N.M., Man Pleads Guilty to Federal Child Sex Abuse ChargeRead the Press Release
ALBUQUERQUE – Cornallsen Cortez, 31, an enrolled member of the Navajo Nation who resides in Navajo, N.M., pleaded guilty this morning to a felony information charging him with abusive sexual contact with a child. Under the terms of his plea agreement, Cortez will be sentenced to nine years in federal prison followed by a term of supervised release to be determined by the court. Cortez also will be required to register as a sex offender.
Cortez was arrested in March 2013, based on a criminal complaint alleging that he sexually abused a 12-year-old child in Nov. 2012, in a residence located on the Navajo Indian Reservation. During today’s proceedings, Cortez pleaded guilty to abusive sexual contact with a minor, and admitted that on Nov. 28, 2012, he sexually abused a 12-year-old child by touching the child inappropriately.
Cortez has been in federal custody since his arrest and remains detained pending his sentencing hearing, which has yet to be scheduled.
This case was investigated by the Albuquerque and Gallup offices of the FBI and the Window Rock, Ariz., office of the Navajo Nation Division of Public Safety. It is being prosecuted by Assistant U.S. Attorney Jennifer M. Rozzoni 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/.
Miami Resident Convicted in Identity Theft Tax Refund SchemeRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Paula Reid, Special Agent in Charge, U.S. Secret Service (USSS), Michael J. DePalma, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), and Michael B. Steinbach, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, announce that defendant Math Benjamin, 33, of Miami, was convicted on two counts charged in the third superseding indictment.
Defendant Benjamin was found guilty on Friday, August 23, 2013 of one count of theft of government funds, in violation of Title 18, United States Code, Sections 641 and 2, and one count of aggravated identity theft, in violation of Title 18, United States Code, Sections 1028A(a)(1) and 2.
According to testimony and evidence presented at trial, Benjamin received multiple fraudulent tax refunds into his bank accounts. These fraudulent tax refunds were obtained by using the personal identification information of individuals without their permission.
Sentencing is scheduled for November 6, 2013, before U.S. District Judge Marcia Cooke. At sentencing, Benjamin faces up to 10 years in prison for the theft of government funds to be served consecutively by two years in prison for the aggravated identity theft.
Mr. Ferrer commended the investigative efforts of the Identity Theft Tax Refund Strike Force, with special commendation to the USSS, IRS-CI, and the FBI. The case is being prosecuted by Assistant U.S. Attorneys Gera Peoples 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.
Mexican Man Sentenced for Being in the Country IllegallyRead the Press Release
BUFFALO N.Y.-- U.S. Attorney William J. Hochul, Jr. announced today that Abdias Roblero-Mazariegos, 32, an alien from Mexico, who was convicted of unlawful re-entry after being convicted of an aggravated felony, was sentenced to 24 months in prison by Chief U.S. District Judge William M. Skretny.
Assistant U.S. Attorney Michael DiGiacomo, who handled the case, stated that on October 28, 2012, the defendant was a passenger in a car that was stopped by the Albion Police Department.The defendant admitted during the encounter that he was a citizen of Mexico and illegally in the country. A background check revealed that the defendant had a conviction in 2002, in the state of Florida, for Assault with a Deadly Weapon without the intent to kill and was subsequently deported.
Sentencing is the culmination of an investigation on the part of Special Agents of the United States Border Patrol, under the direction of Chief Border Patrol Agent Kevin W. Oaks.Man Who Threatened Synagogue in Fargo, North Dakota, Charged with Civil Rights ViolationRead the Press Release
Acting Assistant Attorney General for the Civil Rights Division Jocelyn Samuels and U.S. Attorney for the District of North Dakota Timothy Q. Purdon announced that Dominique Jason Flanigan was arraigned today on civil rights and threats charges.
Flanigan was indicted under seal by a grand jury on Dec. 12, 2012, for threatening a synagogue in Fargo, N.D. The two-count indictment charges Flanigan with issuing a threatening interstate communication and with interfering with a federally protected activity. The indictment was unsealed prior to his arraignment.
The indictment alleges that, on Jan. 4, 2011, Flanigan called Temple Beth El in Fargo, and left a voice mail message threatening the employees of the synagogue. The indictment charges that this threat intimidated and interfered with Temple Beth El employees because of their religion.
An indictment is merely an accusation and the defendant is presumed innocent unless proven guilty.
This case is being investigated by the FBI and is being prosecuted by Assistant U.S. Attorneys Lynn C. Jordheim and Megan A. Healy of the U.S. Attorney’s Office for the District of North Dakota and Trial Attorney Dana Mulhauser of the Criminal Section of the Civil Rights Division.
Man Arrested at LAX with Nearly 40,000 Bogus Erectile Dysfunction Pills Hidden in Golf Bag Sentenced to 2½ Years in Federal PrisonRead the Press Release
LOS ANGELES – A Koreatown man was sentenced this afternoon to 30 months in federal prison for smuggling nearly 40,000 counterfeit erectile dysfunction pills that were discovered in a golf bag and other luggage when he entered the United States at Los Angeles International Airport.
Kil Jun Lee, 73, who resides in the Koreatown district of Los Angeles, was sentenced by United States District Judge Dean D. Pregerson, who said the sentence, in part, was due to the threat to public health posed by the counterfeit pills.
A federal jury in May found Lee guilty of three counts of smuggling and three counts of trafficking in counterfeit goods for bringing the phony pills into the United States in February 2012. The retail value of the pills would have been well over $750,000 had they been genuine products.
The counterfeit products – purporting to be Viagra, Cialis and Levitra – were discovered by customs officials at LAX when Lee returned from a trip to China that included a stop in his native Korea. Most of the pills were hidden in a golf bag.
Analysis of the pills showed that they were inconsistent with the genuine products. While many of the pills contained the active ingredient for the brand name product, they typically contained the wrong amount (up to 150 percent of the claimed dose) or contained the active ingredient for a competitor’s product (so the purported Viagra would contain the active ingredient found in Cialis). Some of the counterfeit pills had no active ingredient at all.
When investigators searched Lee’s residence, they found a small number of counterfeit pills, as well as numerous counterfeit labels that were hidden under a rug.
“The danger of this conduct is substantial,” prosecutors wrote in a sentencing memorandum filed with the court. “Indeed, while the government is not aware of any inherently harmful chemicals contained in the pills, the prospect of a user ingesting pills that contain more active ingredient than is listed on the pill, or a different active ingredient than is supposed to be in that pill, raises serious medical concerns.”
The investigation in this case was conducted by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and U.S. Customs and Border Protection.
Release No. 13-109
Los Angeles Man Who Recruited ‘Patients’ from L.A.’s ‘Skid Row’ as Part of $10 Million Health Care Scam Sentenced to Federal PrisonRead the Press Release
LOS ANGELES – A Los Angeles man who recruited homeless people from the “Skid Row” section of Los Angeles as part of a widespread scheme to defraud Medicare and Medi-Cal by providing unnecessary health services was sentenced this morning to 18 months in federal prison.
Estill Mitts, 68, who lives near the Miracle Mile district of Los Angeles, was sentenced by United States District Judge George H. King. In addition to the prison term, Judge King ordered Mitts to pay more than $9.8 million in restitution.
In sentencing Mitts, Judge King stated that Mitts’ conduct was “fueled by greed to enrich himself,” and “breeds contempt for, leads to a lack of confidence in, and threatens the stability of” the Medicare program.
Mitts pleaded guilty in 2008 to conspiracy to commit health care fraud, money laundering and tax evasion. Mitts’ sentencing was delayed a number of times as he provided assistance to the government’s investigation that has led to 11 defendants being charged and convicted.
The Skid Row “capping” – or illegal referral – scheme was discovered in the fall of 2006 after local authorities observed some patients discharged from a local hospital being “dumped” on Skid Row. The patients subsequently reported that they had been paid to go to the hospital.
Mitts “was a ring-leader in a significant, long-term, serious crime that used the homeless as fodder for exploiting the Medicare and Medi-Cal programs,” prosecutors wrote in a sentencing memo filed with the court. Mitts admitted that he received more than $1 million in kickbacks from three hospitals that took in the illegally referred patients from Skid Row.
From 2004 until October 2007, Mitts operated the Assessment Center, a facility on East Seventh Street in downtown Los Angeles that was also known as 7th Street Christian Day Center. “Mitts employed individuals he called ‘stringers’ to recruit homeless people with promises of small payments,” according to the sentencing memorandum. “The Assessment Center was not a medical clinic, but a site that defendant used for the purpose of recruiting homeless Medicare and Medi-Cal beneficiaries for referral to three hospitals – City of Angels Hospital, Los Angeles Metropolitan Medical Center, and Tustin Hospital and Medical Center. Defendant and others working for him would recruit homeless beneficiaries for in-patient hospital admissions whether or not such hospitalizations were medically necessary.”
In relation to the tax evasion count, Mitts admits in the plea agreement that he failed to report more than $479,000 in income in 2005 and more than $620,000 in income in 2006. By failing to report this income, the Internal Revenue Service suffered losses of $349,857.
Mitts is the latest in a series of defendant to be sentenced in relation to the Skid Row investigation. For example, Robert Bourseau, one of the owners of City of Angels, was sentenced to 37 months in prison, and Dante Nicholson, the director of marketing at City of Angels, who also cooperated with the government in its investigation, was sentenced to one year in prison. Late last year, a doctor who admitted homeless patients to the Tustin Hospital and Medical Center after they had been driven from Skid Row was sentenced to one year in federal prison.
These cases are part of an investigation conducted by the U.S. Department of Health and Human Services, Office of Inspector General; the Federal Bureau of Investigation; IRS - Criminal Investigation; the California Department of Justice, Bureau of Medi-Cal Fraud and Elder Abuse; and the Health and Law Enforcement Team (HALT), a multi-agency task force which is operated by the Los Angeles County Health Department.
Anyone with information that could assist in the investigation of health care fraud schemes is encouraged to contact investigators with the Department of Health and Human Services by calling 1-800-HHS-TIPS, or emailing [email protected].
Release No. 13-107
Local Venture Capitalist Pleads Guilty to Tax ChargesRead the Press Release
St. Louis, MO – BURTON DOUGLAS MORRISS pled guilty to tax evasion charges associated with his evasion of taxes on millions of dollars of income he earned between 2006 and 2009. According to his plea agreement, the tax liability Morriss attempted to evade in 2007 was $2,888,483. The total tax due and owing by Morriss for all tax years is $5,559,386.
According to court documents, Morriss was a venture capitalist living in St. Louis County. Morriss admitted that, through his work, he was versed in tax laws. As a venture capitalist, he would discuss tax consequences of buying and selling investments to sophisticated investors. Moreover, he had been dealing with advisers and lawyers regarding his personal taxes for many years before 2006.
For the tax year 2007, which is the tax evasion count to which he pleaded guilty, Morriss earned substantial income from his venture capital activities. In order to reduce his tax liability for that year, he claimed $18,160,613 in losses associated with a number of entities, including Morriss Holdings, MIC Aircraft, Tech Aircraft and MIC Real Estate. These entities were established as single member limited liability companies for Morriss' mother. Additionally, Mrs. Morriss had already claimed these passive losses for her own benefit in previous years. In addition to these 2007 tax losses, Morriss admitted to evading millions more in taxes on income from his venture capital companies in subsequent tax years.
Morriss did not timely file tax returns for 2006, 2007, 2008 and 2009. On June 27,2011, Morriss filed the delinquent 2007 tax return that is the subject of the guilty plea, along with delinquent 2008 and 2009 tax returns.
Sybil A. Smith, the Special Agent in Charge of IRS-Criminal Investigation, stated, "To build faith in our nation's tax system, honest taxpayers need to be reassured that everyone is paying their fair share. IRS Criminal Investigation, together with the Department of Justice, will diligently investigate and prosecute those who knowingly violate our tax system for their own enrichment."
Morriss, Creve Coeur, MO, pled guilty to one felony count of tax evasion before United States District Judge Rodney Sippel. Sentencing has been set for November 22, 2013.
This charge carries a maximum penalty of five years in prison and/or fines up to $100,000. Restitution is mandatory. In determining the actual sentences, a Judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
Morriss' plea comes shortly after a judgment of permanent injunction was ordered against him in the case of Securities and Exchange Commission v. Burton Douglas Morriss in the Eastern District of Missouri. On August 13, 2013, United States District Judge Carol E. Jackson ordered that Morriss, among other things, is prohibited from acting as an officer or director of certain companies issuing securities. The SEC matter was filed in 2012 in the wake of the collapse of the Acartha Group, LLC and other venture capital companies run by Morriss. The SEC complaint alleged that Morriss had fraudulently transferred millions of investor dollars to himself for personal use. In addition to the director/officer bar, the SEC will ask the Court to order disgorgement of ill-gotten gains and civil penalties at a future date.
In addition to the SEC, this case was investigated by Internal Revenue Service Criminal Investigation, the Federal Bureau of Investigation and the United States Postal Inspection Service. Assistant United States Attorney Tom Albus is handling the case for the U.S. Attorney’s Office.
Local Venture Capitalist Pleads Guilty to Tax ChargesRead the Press Release
St. Louis, MO – BURTON DOUGLAS MORRISS pled guilty to tax evasion charges associated with his evasion of taxes on millions of dollars of income he earned between 2006 and 2009. According to his plea agreement, the tax liability Morriss attempted to evade in 2007 was $2,888,483. The total tax due and owing by Morriss for all tax years is $5,559,386.
According to court documents, Morriss was a venture capitalist living in St. Louis County. Morriss admitted that, through his work, he was versed in tax laws. As a venture capitalist, he would discuss tax consequences of buying and selling investments to sophisticated investors. Moreover, he had been dealing with advisers and lawyers regarding his personal taxes for many years before 2006.
For the tax year 2007, which is the tax evasion count to which he pleaded guilty, Morriss earned substantial income from his venture capital activities. In order to reduce his tax liability for that year, he claimed $18,160,613 in losses associated with a number of entities, including Morriss Holdings, MIC Aircraft, Tech Aircraft and MIC Real Estate. These entities were established as single member limited liability companies for Morriss' mother. Additionally, Mrs. Morriss had already claimed these passive losses for her own benefit in previous years. In addition to these 2007 tax losses, Morriss admitted to evading millions more in taxes on income from his venture capital companies in subsequent tax years.
Morriss did not timely file tax returns for 2006, 2007, 2008 and 2009. On June 27,2011, Morriss filed the delinquent 2007 tax return that is the subject of the guilty plea, along with delinquent 2008 and 2009 tax returns.
Sybil A. Smith, the Special Agent in Charge of IRS-Criminal Investigation, stated, "To build faith in our nation's tax system, honest taxpayers need to be reassured that everyone is paying their fair share. IRS Criminal Investigation, together with the Department of Justice, will diligently investigate and prosecute those who knowingly violate our tax system for their own enrichment."
Morriss, Creve Coeur, MO, pled guilty to one felony count of tax evasion before United States District Judge Rodney Sippel. Sentencing has been set for November 22, 2013.
This charge carries a maximum penalty of five years in prison and/or fines up to $100,000. Restitution is mandatory. In determining the actual sentences, a Judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
Morriss' plea comes shortly after a judgment of permanent injunction was ordered against him in the case of Securities and Exchange Commission v. Burton Douglas Morriss in the Eastern District of Missouri. On August 13, 2013, United States District Judge Carol E. Jackson ordered that Morriss, among other things, is prohibited from acting as an officer or director of certain companies issuing securities. The SEC matter was filed in 2012 in the wake of the collapse of the Acartha Group, LLC and other venture capital companies run by Morriss. The SEC complaint alleged that Morriss had fraudulently transferred millions of investor dollars to himself for personal use. In addition to the director/officer bar, the SEC will ask the Court to order disgorgement of ill-gotten gains and civil penalties at a future date.
In addition to the SEC, this case was investigated by Internal Revenue Service Criminal Investigation, the Federal Bureau of Investigation and the United States Postal Inspection Service. Assistant United States Attorney Tom Albus is handling the case for the U.S. Attorney’s Office.
Kimberly Brooks Imprisoned for Embezzlement from Orleans EmployerRead the Press Release
The Office of the United States Attorney for the District of Vermont announced that Kimberley Brooks, 48, of Brownington, was sentenced today in United States District Court in Burlington to 18 months of imprisonment following her guilty plea to charges that she embezzled more than $157,000 from her employer. U.S. District Judge William K. Sessions III also ordered that Brooks serve a three-year term of supervised release after she gets out of prison, and that she pay restitution of about $163,000. The court directed Brooks to surrender to the Bureau of Prisons on October 8 to begin serving her sentence.
On October 18, 2012, a federal grand jury in Burlington returned a three-count indictment charging Brooks with wire fraud, interstate transportation of stolen money and forging checks of her former employer. According to the indictment, Brooks was employed as a bookkeeper for Desmarais Equipment, Inc., a farm equipment and recreational vehicle distributor in Orleans. The indictment alleges that, between September 2008 and March 2011, Brooks embezzled about $157,000 from the company, primarily by stealing cash from funds being deposited into the bank and altering deposit slips in an attempt to cover up the theft. It also accuses Brooks of causing several company checks to be issued to herself or others without authorization, then depositing the checks into her own personal account. According to court records, the embezzlement was detected in May 2011 and Brooks was promptly fired. Brooks pled guilty to the stolen property charge last April.This case was investigated by the Vermont State Police and the U.S. Secret Service.
Brooks is represented by David Sleigh. The prosecutor is Assistant U.S. Attorney Gregory Waples.
Justice Department Sues South Dakota Drug Manufacturer for Improperly Producing Sterile Eye DropsRead the Press Release
The government filed suit in the U.S. District Court for South Dakota against Dakota Laboratories LLC and its owner, Charles L. Voellinger, Sr., to block them from violating the Food, Drug and Cosmetic Act (FDCA) in connection with their alleged violations of Current Good Manufacturing Practices (CGMP). The alleged violations concerned problems with the manufacture of eye drops that may have caused the products to be non-sterile. The Justice Department filed the suit on behalf of the Food and Drug Administration (FDA).
“Consumers must be able to trust that drugs presented as sterile are, in fact, sterile,” said Stuart F. Delery, Assistant Attorney General for the Justice Department’s Civil Division. “We cannot take the chance that a manufacturer’s failure to establish proper controls for sterile drug production could result in products becoming contaminated, placing consumers at risk of infection and potentially serious injury.”
In conjunction with the filing of the complaint, Dakota Laboratories agreed to settle the litigation and be bound by a Consent Decree of Permanent Injunction that prohibits them from committing violations of the FDCA. The consent decree also acknowledges that Dakota Laboratories is no longer in operation, and requires that if they wish to resume manufacturing drug products in the future, the FDA first must determine that Dakota Laboratories’ manufacturing practices have come into compliance with the law. The proposed consent decree, along with the complaint, has been filed with the court and is awaiting judicial approval.
The government’s action resulted from a series of inspections of Dakota Laboratories’ Mitchell, S. D., manufacturing facility, which revealed that Dakota Laboratories failed to establish and implement appropriate procedures for preventing microbiological contamination of drug products. They allegedly lacked sufficient control over the environment in their sterile processing area to prevent products from becoming contaminated and failed to establish and implement appropriate laboratory procedures for determining whether batches of eye drops conformed to their safety specifications.
Compliance with CGMP requirements ensures that drugs meet the safety requirements of the law and have the identity, strength, quality and purity that the drugs purport to possess. FDA regulations, which establish the minimum CGMP requirements applicable to human drugs, require manufacturers to control all aspects of the processes and procedures by which drugs are manufactured to prevent the production of unsafe and ineffective products.
After the inspections of Dakota Laboratories in 2010 and 2011, FDA warned them that their conduct violated the FDCA. In 2012, a third FDA inspection documented the continuing nature of Dakota Laboratories’ CGMP violations. Consequently, the government filed its complaint and settled with Dakota Laboratories.
The complaint was filed by the Department of Justice’s Consumer Protection Branch, Civil Division; the U.S. Attorney’s Office for the District of South Dakota and FDA’s Office of the General Counsel. A complaint is merely a set of allegations that, if the case were to proceed to trial, the government would need to prove by a preponderance of the evidence.
Judge Sentences Johnstown Woman for Falsifying Firearms FormsRead the Press Release
JOHNSTOWN, Pa. - A resident of Johnstown, Pa., has been sentenced in federal court to three years probation, the first eight months of which must be served by conditions of home confinement, on her conviction of making false statements to a federally licensed firearms dealer, United States Attorney David J. Hickton announced today.
United States District Judge Kim R. Gibson imposed the sentence on Kimberly G. Yarnavick, 48.
According to information presented to the court, on July 15, 2009, in conjunction with the purchase of a Hi Point pistol; on Feb. 5, 2010, in conjunction with the purchase of a Phoenix pistol; and on March 3, 2010, in conjunction with the purchase of a American Arms pistol, Yarnavick knowingly made false statements in an effort to deceive Sporting Goods Discounters, a federally licensed firearms dealer. Yarnavick represented she was the actual buyer of the firearms when, in fact, she was purchasing the firearms on behalf of another person.
Assistant United States Attorney John J. Valkovci, Jr., prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Johnstown Police Department for the investigation leading to the successful prosecution of Yarnavick.
According to Mr. Hickton, Yarnavick was prosecuted as part of Project Safe Neighborhoods, a collaborative effort by federal, state, and local law enforcement agencies, prosecutors, and communities to prevent, deter, and prosecute gun crime.
Johnstown Man Distributed Panic Disorder DrugRead the Press Release
JOHNSTOWN, Pa. – A resident of Johnstown, Pa., pleaded guilty in federal court to a charge of distribution of a controlled substance, United States Attorney David J. Hickton announced today.
Nieves Calderon, III, 36, pleaded guilty to one count before United States District Judge Kim R. Gibson.
In connection with the guilty plea, the court was advised that on Nov. 19, 2012, Calderon distributed a quantity of alprazolam.
Judge Gibson scheduled sentencing for Jan. 9, 2014, at 11 a.m. The law provides for a total sentence of five years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the criminal history, if any, of the defendant.
Assistant United States Attorney John J. Valkovci, Jr., is prosecuting this case on behalf of the government.
The Laurel Highlands Resident Agency of the Federal Bureau of Investigation and the Cambria County Drug Task Force conducted the investigation that led to the prosecution of Calderon.
Indictment Unsealed Charging Three Midwest City Women with Conspiracy to Defraud OKC Schools Tutoring ProgramRead the Press Release
Oklahoma City, Oklahoma – A federal indictment was unsealed today charging three Midwest City women with conspiracy to defraud the U.S. Department of Education by making false claims for payment for tutoring sessions of students attending Oklahoma City Public Schools, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma. The three women charged are REBECCA E. COTTON, 42, PATRICIA R. BURNS, 71, and BOBBIE J. DAILEY, 62, all from Midwest City, Oklahoma.
As part of the No Child Left Behind Act of 2001, the U.S. Department of Education provided funding for extracurricular tutoring to eligible students at eligible schools. Eligible schools were those designated by the state to be in need of improvement, and student eligibility was determined by family income. The Oklahoma City Public Schools District ("OKCPS") offered this tutoring program to eligible students at U.S. Grant High School and Roosevelt Middle School. OKCPS required tutoring providers to record student attendance at tutoring sessions on paper rosters and on a computer database which, in turn, was used to generate invoices that the tutoring providers submitted to OKCPS for payment.
It is alleged that during the 2009-2010 school year, Burns, with the assistance of her daughter, Cotton, owned and operated A Plus Academics, LLC ("A Plus"), a business providing academic tutoring to school children. It is alleged that during this same year, Cotton owned and operated Foundations Tutoring, LLC ("Foundations"), a business that also provided academic tutoring to school children. A Plus and Foundations shared office space at 608 Askew Drive, in Midwest City. For 2009-2010, both A Plus and Foundations were state-approved tutoring providers having contracts with OKCPS to provide tutoring services. A Plus primarily tutored students at U.S. Grant High School. Foundations primarily tutored students at Roosevelt Middle School. Both companies hired teachers at the respective schools as tutors. It is alleged that during the 2009-2010 school year Dailey was employed at U.S. Grant High School as a counselor and also as an A Plus tutor and "liaison" between A Plus and U.S. Grant High School.
The indictment alleges that during the 2009-2010 school year, Burns, Cotton, and Dailey instructed tutors at U.S. Grant High School to complete and sign student attendance rosters for tutoring sessions that did not, in fact, take place. It is alleged that Dailey herself completed and signed student attendance rosters for tutoring sessions that did not take place. It is alleged that Cotton and one of the employees of Foundations instructed tutors at Roosevelt Middle School to complete and sign attendance rosters for tutoring sessions that did not, in fact, take place.
It is further alleged that Cotton entered the false attendance information into the computer database used by OKCPS. Burns and Cotton allegedly used this false information to generate invoices, which were submitted to OKCPS for payment. For the 2009-2010 school year, OKCPS paid A Plus $884,548.13 and paid Foundations $351,621.00 for tutoring services.
The indictment alleges eight counts. Count 1 charges Cotton, Burns, and Dailey with conspiracy, for which each face up to five years in prison. Counts 2-4 charge Cotton, Burns, and Dailey with making false statements, for which each face up to five years in prison. Count 5 charges Cotton with making false statements, for which she faces up to five years in prison. Count 6 charges Cotton with wire fraud for which she faces up to 20 years in prison. Count 7 charges Cotton with money laundering for which she faces up to ten years in prison. Count 8 charges Cotton with aggravated identity theft for which she faces up to an additional mandatory two years in prison. All counts also include a potential fine of $250,000. The public is reminded that the indictment is merely an accusation and that the defendants are each presumed innocent unless and until proven guilty. Reference is made to the indictment for further information.
This case is the result of an investigation by the Internal Revenue Service Criminal Investigation, the U.S. Department of Education, and the Economic Crimes Task Force, and is being prosecuted by Assistant U.S. Attorneys Amanda Maxfield Green and Chris M. Stephens.
Husband and Wife Sentenced for Wire FraudRead the Press Release
Thirteen Sentenced to Date in Crestwood Homes Mortgage Fraud
BOISE – Aaron Michael Hymas and Tiffany Kim Hymas, both 38, of North Salt Lake, Utah, were sentenced in United States District Court in Boise today for wire fraud, U.S. Attorney Wendy J. Olson announced. U.S. District Judge Edward J. Lodge sentenced Aaron Hymas to 24 months in prison followed by three years of supervised release and ordered him to pay $1,520,296.77 in restitution. Tiffany Hymas was sentenced to 60 days in prison followed by three years of supervised release, beginning with six months of home detention. She was also ordered to pay $667,505.42 in restitution. The two former Treasure Valley residents each pleaded guilty to one count of wire fraud on October 18, 2012.
According to the plea agreements, the defendants admitted that they schemed to defraud a lender by having Tiffany submit a residential loan application for $295,600, on March 28, 2007, in which she made material misrepresentations. On the application, Tiffany Hymas stated that she was employed by OPM Enterprises with 2.6 years on the job; that she had income and commissions of $72,500 per month; and that she had gross rental income of $14,600 per month from four properties in Meridian, Nampa and Boise. Based on these misrepresentations, Taylor, Bean and Whitaker Mortgage Corporation funded the loan. The defendants admitted they knew Tiffany Hymas’ statements were false and material to the loan application, and that they knew the statements were false at the time she made them.
The cases are part of a long-term investigation of mortgage fraud activity related to Crestwood Homes, which involved multiple defendants, many of them family members, who bought and sold real estate in order to “flip it,” or gain profits from the sales. The financial institutions and mortgage lenders incurred substantial losses on the loan transactions.
In addition to Aaron and Tiffany Hymas, eleven individuals have been sentenced since November 2010 on charges of wire fraud, bank fraud and making false statements, including Michael J. Hymas, Shane M. Hymas, Laurie K. Hymas, Shauntee K. Ferguson, Christopher R. Georgeson, Stanley J. Ferguson, Brent Bethers, Melody C. Redondo, Paul Redondo, Travis R. Hymas and Season Heather Hymas.
“False statements to banks and lenders in order to obtain home loans have undermined the integrity of our nation’s housing financing system,” said Olson. “These sentences send the strong message that those who fabricate financial information to deceive lenders will be investigated, prosecuted and punished.”
“Integrity and honesty in the financial world are critical to society,” said U.S. District Judge Edward J. Lodge.
The cases were investigated by the Federal Bureau of Investigation and Internal Revenue Service-Criminal Investigation, with assistance provided by the Office of the United States Trustee and the Idaho Department of Insurance. The case is being prosecuted by the U.S. Attorney's Office for the District of Idaho and the State of Idaho, Office of the Attorney General.
Today's announcement is part of efforts underway by President Obama's Financial Fraud Enforcement Task Force (FFETF), which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys' offices and state and local partners, it's the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants.
High Stakes Dog Fighters and Gamblers Arrested 367 Fighting Pit Bulls SeizedRead the Press Release
Montgomery, Alabama - On Friday, August 23, 2013, the following people were arrested after being indicted for violations of the federal dog fighting statute and the federal gambling statute:
- Donnie Anderson—48 years old, of Auburn, Alabama
- Demontt Allen—37 years old, of Houston, Texas
- William Antone Edwards—42 years old, of Brantley, Alabama
- William Oneil Edwards—39 years old, of Elba, Alabama
- Robin Stinson—40 years old, of Elba, Alabama
- Michael Martin—54 years old, of Auburn, Alabama
- Lawrence Watford—35 years old, of Adel, Georgia
- Ricky Van Le—24 years old, of Biloxi, Mississippi
- David Sellers—52 years old, of Opelika, Alabama
- Sandy Brown—47 years old, Brownsville, Alabama
The 30 count federal indictment charges that between 2009 and 2013 the above individuals conspired to promote and sponsor dog fights, and conspired to possess, buy, sell, transport and deliver dogs that were involved in dog fighting. The indictment further charges individual defendants with promoting or sponsoring a dog fight and with possessing, buying, selling, transporting and delivering a dog for fighting purposes. Lastly, these defendants were charged with conducting an illegal gambling business.
On Friday, August 23, 2013, agents executed 13 search warrants, 11 in Alabama and two in Georgia. Agents seized 367 pit bull terriers that appeared as if they had been fought multiple times, guns, illegal narcotics, drugs used to treat and train dogs, and other evidence indicative of dog fighting. During the course of this investigation, agents also seized over $500,000 from dog fighters involved in this organization.
The U.S. Attorney’s Office, Auburn Police Division and the Federal Bureau of Investigation requested the assistance of the American Society for the Prevention of Cruelty to Animals and the Humane Society of the United States to help investigate the dog fighting and take custody of the dogs seized.
“These defendants were betting between $5,000 and $200,000 on one dog fight,” stated U.S. Attorney George L. Beck, Jr. “The number of dogs seized and the amount of money involved in this in case shows how extensive this underworld of dog fighting is. These dog fighters abuse, starve and kill their dogs for the supposed ‘fun’ of watching and gambling on a dog fight. Their behavior is deplorable, will not be tolerated, and will be punished to the full extent of the law.”
“The sheer number of dogs seized speaks volumes as to the inhumane and violent abuse of animals associated with the illegal practices of drug activity afflicting our communities,” stated Stephen Richardson, FBI Special Agent in Charge, Mobile Division.
“This is a great example of federal, state, and local agencies working together to make communities safer,” stated Paul Register, Auburn Police Division Chief. “It is not just about the egregious act of dog fighting itself, but the other criminal activity that is affiliated with it. It is important that local law enforcement, such as the Auburn Police Division, work together with other agencies to address crimes that affect the entire country.”
“We are committing to eradicating dog fighting in every dark corner where it festers,” said Wayne Pacelle, president and CEO of The HSUS. “This series of raids reminds every dogfighter that they are not beyond the law and their day of reckoning will come.”
“Today we ended the torture of hundreds of abused and neglected dogs,” said Matt Bershadker, president and CEO of the ASPCA. “Never again will these dogs be forced to fight, live in squalor, or be neglected and deprived of the bare necessities. The ASPCA is extremely grateful to federal and local authorities who pursued this widespread investigation for so long, and we are happy to lend our assistance.”
An indictment merely alleges that crimes have been committed and the defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, the defendants face a maximum sentence of five years for conspiracy to fight dogs, a five year maximum sentence on each of the 15 dog fighting counts, a five year maximum for conducting a gambling business, and five year maximum on the 13 counts of using the telephone to promote gambling. The defendants are also subject to fines and a period of supervised release if convicted.
The case was investigated by the Auburn Police Division and the Federal Bureau of Investigation, with assistance from the Alabama Alcoholic Beverage Control Board; the Coffee County Sheriff’s Office; Alabama State Troopers; the Lee County District Attorney’s Office; the Alabama Department of Public Safety; Bainbridge, Georgia Department of Public Safety; Georgia Bureau of Investigation, Echols County Sheriff’s Office, the United States Marshals Service; the Lee County Sheriff’s Office; the Houston County Sheriff’s Office; the Opelika Police Department; the Georgia Highway Patrol; the Georgia Bureau of Investigation; the Mississippi Bureau of Investigation; the Pensacola, Florida and Columbus, Georgia offices of the Drug Enforcement Administration; and Taylor Crossing Animal Hospital. Assistant United States Attorney Clark Morris is prosecuting the case.
PRESS CONTACT: Clark Morris
Email: [email protected]
Telephone: (334) 551-1755
Fax: (334) 223-7617Gang Member Is Fifteenth to Plead Guilty in Dodge City Racketeering CaseRead the Press Release
WICHITA, KAN. – A Dodge City man has pleaded guilty to a charge of assault with a dangerous weapon in connection with a federal racketeering case, U.S. Attorney Barry Grissom said today.
Andrew Gusman, 21, Dodge City, Kan., pleaded guilty to assault with a dangerous weapon, which was a violent crime in aid of racketeering. In his plea, Gusman admitted that on March 30, 2011, he was with fellow Norteno gang members including co-defendants Alfonso Banda-Hernandez, Enrique Gobin and Jesus Sanchez. At a Love’s convenience store in Dodge City, they encountered George Gonzalez, who was a member of the rival Sureno gang. They threw gang signs at Gonzales and attempted to start a fight.
Later that day, they again encountered Gonzalez and began chasing his car. Gusman and Banda-Hernandez were in one car, and Gobin and Sanchez were in another car. During the case, Sanchez fired shots at Gonzalez. After the shooting, the four defendants met outside of town.
Sentencing is set for Nov. 18. He faces a maximum penalty of 20 years in federal prison and a fine up to $250,000. Gusman was one of 23 Norteno members to be indicted in May 2012. It was only the second time a federal RICO Act indictment (Racketeer Influenced and Corrupt Organizations Act) had been filed in Kansas. Gusman is the fifteenth defendant in the case to enter a guilty plea.Grissom commended the Dodge City Police Department, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Ford County Sheriff’s Office, the Kansas Bureau of Investigation, Assistant Aaron Smith and Assistant U.S. Attorney Lanny Welch for their work on the case.
Four Brooklynites Sentenced in Counterfeiting CaperRead the Press Release
The Office of the United States Attorney for the District of Vermont announced that four residents of Brooklyn, New York have recently been sentenced in United States District Court in Burlington following their guilty pleas to counterfeiting charges. Today, U.S. District Judge William K. Sessions III sentenced Lateek Cargo, 27, to timer served in prison, coupled with six months of home confinement. Earlier this month, Daniel Hyacinthe, 24, was also sentenced to time served, coupled with four months of home confinement. Also within the past several weeks, Larry Galbreith, 23 and Malik Delima, 22, were sentenced to 12 months plus one day in prison. The court ordered each defendant to serve a one-year term of supervised release and ordered the defendants together to pay restitution totalling $1000. Delima, who has been incarcerated since his arrest, is finishing his jail sentence. Galbreith was remanded to Marshals custody on the day he was sentenced.
According to court records, on the evening of October 18, 2012, South Burlington Police Officers encountered Hyacinthe, Delima and Cargo at a gas station on Shelburne Road in South Burlington after receiving reports from several businesses in the area that individuals in a car matching the description of the defendant’s vehicle had passed, or attempted to pass, counterfeit $100 bills. After reportedly obtaining consent to search the vehicle, officers found seven counterfeit $100 bills, receipts showing purchases earlier that day at Burlington-area stores that were paid for with $100 bills, and a color printer that had the capability of photocopying documents. The defendants allegedly made the counterfeit $100 bills by bleaching real $5 bills, then making a photo-reproduction of a $100 bill on the $5 bill paper stock.
According to court papers, officers learned that one of the defendants had been staying at a near-by motel. After they obtained a warrant to search the motel room, officers found 13 more counterfeit $100 bills and 28 bleached $5 bills. They also found Larry Galbreith in the motel room.
The defendants are represented to Federal Public Defender Michael Desautels; David Watts; Brooks McArthur; and Robert Behrens. The prosecutor is Assistant U.S. Attorney Gregory Waples.
Former Wellington Resident Charged in Investment Fraud SchemeRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Michael B. Steinbach, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, and Drew J. Breakspear, Commissioner, Florida’s Office of Financial Regulation, announce the unsealing of an indictment charging George Louis Theodule, 52, former resident of Wellington, FL, with multiple counts of wire fraud, securities fraud and money laundering. Theodule was arrested on August 23, 2013 and had his initial appearance before U.S. Magistrate Judge Dave Brannon later that morning.
According to the indictment, Theodule engaged in an investment fraud or “Ponzi” scheme, wherein he induced individuals to invest money with his companies, Creative Capital Consortium and A Creative Capital Concepts, based upon the representation that he would be able to double their money in 90 days, primarily by trading in stock options. Theodule, the indictment alleges, targeted the Haitian community in South Florida and elsewhere, forming “investment clubs” which attracted thousands of investors between late 2007 and late 2008. In reality only a small portion of investors’ money was placed into trading accounts – which invariably were depleted without showing any gains whatsoever. Rather, substantial funds were used to repay earlier investors, creating the appearance of investment success, and other funds were used by the defendant for his personal benefit. The scheme unraveled in early 2009 when the Securities and Exchange Commission obtained a restraining order and later an injunction to stop the alleged unlawful practices. Investors ultimately lost tens of millions of dollars.
U.S. Attorney Wifredo A. Ferrer stated, “Ponzi schemes, affinity fraud schemes, and high-yield investment fraud scams such as this pose a serious threat to people. For years, George Louis Theodule lured members of the Haitian community to invest money with promises of high-yield returns. In reality, only a small amount of the money was invested, while a substantial portion was used to repay earlier investors, creating the appearance of investment success. Even worse, George Theodule was using their hard earned money for his own personal benefit. The U.S. Attorney’s Office stands committed to bring to justice those who seek to undermine faith in our investment markets.”
“This is a stark reminder that promises of large returns with little risk should immediately send up red flags and make investors run the other way,” said Michael B. Steinbach, Special Agent in Charge of FBI Miami. “Securities markets must be regulated and transparent so investors can continue to trust and have faith in the system. Proactive investigations allow the FBI to prevent losses to victims by identifying those involved and holding them accountable for their unscrupulous actions.”
“This case provides an egregious example of someone exploiting the trust of members of their own community. It demonstrates the Florida Office of Financial Regulation’s (OFR) commitment to work cooperatively in partnership with other state and federal agencies, such as the United States Attorney’s Office to identify and prosecute those who seek to violate that trust and act illegally for their own financial gain,” said OFR Commissioner Drew J. Breakspear. “The OFR is committed to protecting the citizens of Florida while providing smart, efficient and effective regulation of the financial services industry.”
If convicted, Theodule faces a possible statutory maximum sentence of up to 20 years in prison as to each count of wire fraud, and 10 years as to each count of securities fraud and money laundering.
Mr. Ferrer commended the investigative efforts of the FBI and the Florida Office of Financial Regulation. The case is being prosecuted by Assistant United States Attorneys Roger H. Stefin and Carolyn Bell.
An indictment is only an accusation and the defendant is presumed innocent until proven guilty.
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.
Former Utah Chiropractor Sentenced to Prison for Tax EvasionRead the Press Release
The Justice Department and the Internal Revenue Service (IRS) announced that today Douglas R. Madsen, a former chiropractor from Ephraim, Utah, was sentenced by the U.S. District Judge Clark Waddoups to 33 months in prison and resitutition of over $500,000 following a conviction for attempted evasion of payment of income tax in the District of Utah.
On Jan. 12, 2012, a jury convicted Madsen of one count of tax evasion. According to court documents, Madsen owed approximately $1.3 million in assessed income tax, interest and penalties for the years 1995 and 1999 to 2004. Madsen’s tax debt had grown, by the trial date, to over $1.7 million, after accrued interest.
The evidence presented at trial established that Madsen used nominee trusts to conceal the ownership of numerous acres of property, ultimately causing the transfer of that property to Grand Scale Inc., a Washington state corporation of which he was the president, vice president, secretary, treasurer and chairman of the board. In addition, the evidence showed that Madsen used other entities to encumber property and cloud equity in that property through use of mortgages and Uniform Commercial Code financing statements. Madsen was previously held in civil contempt by the U.S. District Court for the District of Utah for failure to comply with court orders with respect to an IRS summons.
Assistant Attorney General for the Justice Department’s Tax Division Kathryn Keneally commended the efforts of Tax Division Trial Attorneys Jennifer R. Laraia and Leslie A. Goemaat, who prosecuted the case, and special agents of IRS – Criminal Investigation, who investigated the case.
Former Police Officer and Co-Defendant Plead Guilty in Scheme to Pay BribeRead the Press Release
WICHITA, KAN. –A former officer of the Wichita Police Department and a co-defendant have pleaded guilty in a scheme to pay a bribe in an unsuccessful effort to keep the officer from losing her job, U.S. Attorney Barry Grissom said today.
Former officer Joletta Vallejo, 35, Wichita, Kan., and Patrick Melendrez, 40, Wichita, Kan., each pleaded guilty to one count of conspiracy to commit wire fraud. Vallejo was employed by the police department from Jan. 9, 2006, to Aug. 24, 2012. In her plea, she admitted that on Oct. 16, 2011, two citizens approached her to make a report they were victims of an aggravated robbery, aggravated kidnaping, aggravated battery and attempted first degree murder. Vallejo did not follow the police department’s policies in responding and filing their complaints.
As a result of her failure to follow department policies, Vallejo was investigated by the police department’s Professional Standards Bureau. When she was interviewed she lied to the investigators. When she became aware she was going to be fired, she and Melendrez devised a scheme to attempt to keep her job.
On Aug. 22, 2012, Vallejo created a Google Voice number in the name of co-defendant Melendrez. They used that number to call and text one of the citizens and offer him money to recant the statements he had made to police about Vallejo’s conduct. The citizen’s response was part of an undercover investigation.
Sentencing is set for Nov. 18. They face a maximum penalty of 20 years and a fine up to $250,000. Grissom commended the Wichita Police Department, the FBI and Assistant U.S. Attorney Debra Barnett for their work on the case.
Former Owner of Los Angeles Medical Equipment Supply Company Pleads Guilty to $2.6 Million Medicare Fraud SchemeRead the Press Release
A former owner of a Los Angeles-area medical equipment supply company pleaded guilty today to a $2.6 million Medicare fraud scheme.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney André Birotte Jr. of the Central District of California; Special Agent in Charge Glenn R. Ferry of the Los Angeles Region of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG); and Assistant Director in Charge Bill L. Lewis of the FBI’s Los Angeles Field Office made the announcement.
Akinola Afolabi, 54, of Long Beach, Calif., pleaded guilty before U.S. District Judge Philip S. Gutierrez in the Central District of California to one count of health care fraud.
According to court documents, Afolabi was the owner and president of Emmanuel Medical Supply, a durable medical equipment (DME) supply company located in Long Beach. Afolabi admitted that from approximately June 2006 through September 2009, he engaged in a scheme to commit health care fraud through the operation of Emmanuel by providing medically unnecessary power wheelchairs and other DME to Medicare beneficiaries and by submitting false and fraudulent claims to Medicare. Afolabi admitted that he obtained Medicare beneficiary information through various means, including “marketers,” whom he paid to refer Medicare beneficiaries to Emmanuel for the purpose of using that information to submit, and cause the submission of, false and fraudulent claims to Medicare on behalf of Emmanuel. Afolabi admitted knowing that the prescriptions and medical documents were fraudulent and that some of the beneficiaries did not receive the DME, yet he certified to Medicare with the submission of each claim that the DME was received and was medically necessary.
From approximately June 7, 2006, through Sept. 28, 2009, Afolabi, through Emmanuel, submitted approximately $2,668,384 in fraudulent claims to Medicare for power wheelchairs and related services, and Medicare paid Emmanuel approximately $1,490,532 on those claims.
At sentencing, scheduled for Nov. 25, 2013, Afolabi faces a maximum penalty of 10 years in prison and a $250,000 fine.
This case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Central District of California. This case is being prosecuted by Trial Attorney Fred Medick of the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,500 defendants who have collectively billed the Medicare program for more than $5 billion. In addition, HHS’s Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to www.stopmedicarefraud.gov.
Former Flight Attendant Pleads Guilty to Making False Bomb ThreatsRead the Press Release
LOS ANGELES – A German national who used to work for United Airlines pleaded guilty this morning to making false bomb threats against flights operated by the international air carrier.
Patrick Cau, who is also known as Patrick Kaiser, 40, who recently relocated to Dallas from Los Angeles, pleaded guilty today to one count of false information and hoaxes.
Cau pleaded guilty before United States District Judge Otis D. Wright II, who is scheduled to sentence the defendant on November 18. At sentencing, Cau faces a statutory maximum penalty of five years in federal prison.
While Cau pleaded guilty to one felony count, in a plea agreement filed in federal court earlier this month, he admitted making eight bomb threats to United from October 2012 through January 2013.
In the first phone call, on October 4, 2012, Cau used a pay phone near his home to call an internal United crew-scheduling number and state that a United flight from London to Los Angeles would be bombed later that day. The subsequent calls were made from pay phones in Los Angeles, New York City, Las Vegas and Seattle to 911, with all of the calls stating that a specific United flight would be bombed.
As a result of the hoaxes, multiple law enforcement agencies were forced to respond to the bomb threats made by Cau. These law enforcement responses included evacuating people from the targeted airplanes; towing the aircraft to a safe area; searching and re-screening all ticketed passengers, baggage and cargo; and searching the aircraft by human, canine and other detection methods.
As a direct result of Cau’s threats, United experienced substantial disruption to its business operations and services, including cancellation of and delays to flights, transfer of aircraft, and significant inconveniences to United passengers. As a result of his actions, Cau has agreed to pay $267,912 in restitution to United. Cau is also expected to be ordered at sentencing to pay an as-yet-undetermined amount of restitution to law enforcement agencies that responded to the bomb threats.
The case against Cau was investigated by the Federal Bureau of Investigation; U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), and the Los Angeles Airport Police.
Release No. 13-108
Former Employee of Financial Brokerage Pleads Guilty to Fraud and Identity TheftRead the Press Release
A former employee of a financial brokerage firm who stole the identity of a client and fraudulently obtained over $36,000 from that client, pled guilty today in federal court in Cedar Rapids.
Teresa Dorenkamp, 42, from Mason City, Iowa, pled guilty to one count of wire fraud and one count of aggravated identity theft.
In a plea agreement, Dorenkamp admitted that, while employed by a financial brokerage in Mason City, Iowa, she fraudulently obtained money from the firm’s clients by falsely depositing money belonging to the clients into Dorenkamp’s or her husband’s bank accounts. Dorenkamp admitted one such false deposit occurred on June 3, 2011, when Dorenkamp had $36,139.60 wire transferred from the client’s investment account into Dorenkamp’s own U.S. Bank account. Dorenkamp further admitted she used the name of and forged the signature of the client in order to complete the false deposit. Dorenkamp further admitted she caused $391,725.31in fraudulent transfers to be made from client accounts into her or her husband’s bank accounts from 2007 through 2011.
Sentencing before United States District Court Chief Judge Linda R. Reade will be set after a presentence report is prepared. Dorenkamp was released on conditions pending sentencing. Dorenkamp faces a mandatory minimum sentence of 2 years’ imprisonment and a possible maximum sentence of 22 years’ imprisonment, a fine equal to the greater of twice the loss caused by her offense, twice the gain caused by her offense, or $500,000, $200 in special assessments, and 4 years of supervised release following any imprisonment.
The case is being prosecuted by Assistant United States Attorney Anthony Morfitt and was investigated by the Federal Bureau of Investigation and the Mason City Police Department.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 13-CR-03032.
Former Alabama Postal Employee Pleads Guilty for His Involvement in a Fraudulent Tax Refund SchemeRead the Press Release
Antoine Green, a former U.S. Postal Service (USPS) employee, pleaded guilty today in U.S. District Court for the Middle District of Alabama to crimes related to his involvement in a stolen identity tax refund fraud scheme, the Justice Department announced.
According to court documents, between November 2011 and October 2012, Green, who was employed as a postal carrier with the USPS in Montgomery, Ala., stole at least 61 U.S. Treasury tax refund checks from his mail route. The checks, which totaled approximately $145,952, were issued by the Internal Revenue Service (IRS) in connection with fraudulent tax returns filed in the names of identity theft victims.
For his involvement in the scheme, Green pleaded guilty to one count of theft of government money and one count of theft of mail by a postal employee. He faces a maximum potential sentence of 15 years in prison and a fine of up to $500,000.
Trial Attorneys Chad Edgar and Michael Boteler of the Justice Department’s Tax Division prosecuted the case. Special Agents of IRS - Criminal Investigation and USPS Office of Inspector General conducted the investigation.
Related Materials:
United States v. Antoine Green
Plea Agreement
InformationEast Elmhurst Man Pleads Guilty to Hiding $3.2 Million from the Internal Revenue Service in Foreign Bank AccountsRead the Press Release
Earlier today at the federal courthouse in Central Islip, New York, Mohanbhai Ramchandani, of East Elmhurst, New York, pled guilty to violating the United States Treasury Department’s Foreign Bank and Financial Accounts Report law (FBAR) and filing false tax returns to conceal $3.2 million that he earned from his Manhattan-based tailoring business – Mohan’s Custom Tailors. According to court filings and facts presented during the plea proceeding, Ramchandani admitted the illegal activity and cooperated with Internal Revenue Service (IRS) agents after being confronted with the evidence against him.
The guilty plea was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and Toni Weirauch, Special Agent-in-Charge, Internal Revenue Service, Criminal Investigation, New York.
Ramchandani built a successful business that made millions. Rather than live up to his financial responsibilities, he sought to conceal in foreign banks $3.2 million of income clearly earned in the United States. Ramchandani tried to evade not just lawful tax reporting obligations but also the laws that protect our economy,” stated United States Attorney Lynch. “Ramchandani not only grossly underreported his true income, he completely underestimated the tenacity of the IRS to ‘follow the money’.”
IRS Special Agent-in-Charge Weirauch stated, “Offshore tax enforcement is a major priority for the Internal Revenue Service. Individuals who chose to hide income outside of the United States expose themselves to a variety of criminal charges, including criminal tax and FBAR violations, and severe penalties. As we continue to gain access to more and more information about individuals involved in offshore tax evasion, potential violators can expect us to use all of our enforcement tools to stop this abuse.”
The government’s investigation revealed that Ramchandani operated a lucrative custom tailoring business specializing in the manufacturing of suits and shirts. Customers paid for their purchases with cash, checks and credit cards, including American Express. Ramchandani sent checks that American Express issued to him for payment of his customers’ purchases to the Bank of India in Hong Kong where he held an account. He then transferred those proceeds to an account held at the same bank in his son’s name, as well as to other banks in India and Canada. Between 2007 and 2009, Ramchandani hid $3.2 million in the foreign bank accounts and, in violation of FBAR laws, failed to report that he had money in those accounts. Ramchandani also filed tax returns that failed to include the money that he sent overseas. The tax loss to the IRS for 2007, 2008 and 2009 was $736,002.00.
Today’s guilty plea took place before United States District Judge Joseph F. Bianco. When sentenced, Ramchandani faces up to five years in prison, a penalty of $1.6 million for the FBAR violation and restitution to the IRS of $736,002.00 for unpaid taxes.
The government’s case is being prosecuted by Assistant United States Attorney Demetri M. Jones.
The Defendants
MOHANBHAI RAMCHANDANI
Age: 66Dickinson Man Sentenced for Possession of Child PornographyRead the Press Release
BISMARCK – U.S. Attorney Timothy Q. Purdon announced that on Aug. 26, 2013, David Fugere, 55, Dickinson, N.D., pleaded guilty and was sentenced by U.S. District Judge Daniel L. Hovland on a charge of possession of materials depicting the sexual exploitation of a minor.
Judge Hovland sentenced Fugere to serve one year and four months in federal prison, to be followed by three years of supervised release. Fugere was ordered to pay a $100 special assessment to the Crime Victim’s Fund. Fugere was also ordered to register as a sex offender.
From November 2001 until about October 2003, Fugere possessed 23 visual depictions of a minor engaging in sexually explicit conduct.
This investigation was conducted by the North Dakota Internet Crimes Against Children Task Force and was a cooperative effort of Homeland Security Investigations, the North Dakota Bureau of Criminal Investigation, and the Dickinson Police Department.
This case was brought as a part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by 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.
Assistant U.S. Attorney Gary Delorme prosecuted the case.
Craig Doctor Arrested for Prescribing Drugs Resulting in Patient Deaths and Heath Care Fraud SchemeRead the Press Release
Click here for a copy of the indictment charging Dr. Joel Miller
DENVER – Joel E. Miller, age 55, of Craig, Colorado, was arrested without incident today on charges of health care fraud, money laundering and distributing/dispensing controlled substances, federal and state authorities announced. Miller was indicted by federal grand jury in Denver on August 21, 2013, which remained under seal until his arrest and first court appearance. Miller was arrested without incident in Steamboat Springs, Colorado. He made his initial appearance this afternoon before a U.S. Magistrate Judge in Grand Junction, where he was advised of his rights and the charges pending against him.
According to the indictment, Miller was a licensed physician in the state of Colorado and obtained Doctor of Osteopathic Medicine (D.O.) degree in 1990. He was licensed to practice medicine in Colorado in 1994. In 2003 he practiced medicine in Moffat County, Colorado and in 2008, Miller opened a solo private medical practice located in Craig, Colorado. The legal name of his business was DODXRX, doing business as High Country Medical.
In September 2009, the State of Colorado Board of Medical Examiners (“Board”) entered a Stipulation and Final Agency Order in which the Board issued a Letter of Admonition against Miller based upon findings he mis-prescribed neuropsychiatric medications to certain patients. The Board ordered Miller, among other things, to attend a continuing medical education course “in the area of prescribing” and provide proof of completion of such a course. In March of 2011, Miller sent a letter to the Board acknowledging completion of the ordered course.
Approximately between May 2008 and September 2012, Miller executed and attempted to execute a scheme to defraud health care benefit programs, namely Medicaid, Medicare, and commercial health care plans. Particularly, Miller prescribed controlled substances to patients without determining a sufficient medical necessity for the prescription of controlled substances; prescribed controlled substances to patients in a manner which was inconsistent with the usual course of professional practice and for other than legitimate medical purpose; and prescribed pharmaceuticals to patients for whom the prescription was not intended, and directed the persons to whom he prescribed the pharmaceuticals to give the prescription to third parties.
Furthermore, Miller prescribed controlled substances in quantities and dosages that would cause patients to abuse, misuse, and become addicted to the controlled substances. He also pre-signed prescriptions and allowed office employees to distribute controlled substance prescriptions to patients in his absence and without a doctor’s examination of the patient. According to the indictment, in August of 2010, Miller dispensed and distributed to a patient hydrocodone (Schedule III controlled substance), alprazolam and clonazepam, (both Schedule IV controlled substances) which resulted in the death of the patient. The indictment also alleges that in May 2012, Miller dispensed and distributed to a patient hydrocodone (Schedule III controlled substance), and diazepam (a Schedule IV controlled substance) which also resulted in death.
“Defrauding our health care system, causing the cost of care to increase is one thing,” said U.S. Attorney John Walsh. “It is quite another when a doctor over prescribes prescription medication that, as alleged in this case, causes patients to be addicted, and in two cases here, die.”
"Dr. Joel E. Miller's over prescribing and distribution of licit drugs is no different than the drug traffickers that DEA targets," said Drug Enforcement Administration Denver Special Agent in Charge Barbra Roach. "Dr. Miller destroyed the life of at least two patients, has hurt many other patients and disguised his drug dealing by conducting those activities in his professional office and while wearing a doctor's coat. DEA will continue to target "drug dealers" no matter their social or professional status."
"Crimes like this are motivated purely by greed and the patients are the real victims in this case," said Stephen Boyd, Special Agent in Charge, IRS Criminal Investigation, Denver Field Office. "Prescription drug abuse is a serious problem and we are committed to investigate along with our law enforcement partners those individuals who are responsible for the illegal distribution of prescription medicine."
“Many people in Moffat County were directly negatively affected by the actions of Dr. Miller,” said Moffat County Sheriff Tim Jantz. “Some in our community were caused great harm and pain, which will never go away for those families. Hopefully this arrest and indictment will bring some closure to those affected by his actions.”
Miller was charged with thirty four counts as follows; one count of health care fraud with death resulting, which carries a penalty of life in prison, and up to a $250,000 fine; eight counts of health care fraud, which carries a penalty of not more than 10 years in federal prison, and a fine of up to $250,000 per count; ten counts of money laundering, which carries a penalty of not more than 20 years in federal prison, and a fine of up to $500,000 or twice the value of the property involved, per count; two counts of dispensing of controlled substances resulting in death, which carries a penalty of not less than 20 years, and up to life in federal prison, and up to a $1,000,000 fine; seven counts of dispensing of controlled substances, which carries a penalty of not more than 20 years in federal prison, and up to a $1,000,000 fine; dispensing of controlled substances, which carries a penalty of not more than 10 years in federal prison, and up to a $250,000 fine; one count of dispensing a controlled substance, which carries a penalty of not more than 10 years in federal prison, and up to a $500,000 fine; and one count of furnishing false and fraudulent material information, which carries a penalty of not more than 4 years in federal prison, and up to a $250,000 fine. The indictment also includes an asset forfeiture allegation.
This case was investigated by agents with the Drug Enforcement Administration (DEA) and IRS Criminal Investigation with the assistance of the Moffat County Sheriff’s Office and the Colorado Attorney General's Office. The case is being prosecuted by Assistant U.S. Attorney Michelle M. Heldmyer.
The charges contained in the indictment are allegations, and the defendant is presumed innocent until proven guilty.
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Cedar Rapids Man Charged with Unlawfully Possessing A Firearm and AmmunitionRead the Press Release
Matthew James Stover, 30, of Jacolyn Drive in Cedar Rapids, Iowa, has been charged by an indictment filed in the United States District Court in the Northern District of Iowa, with unlawfully possessing a .223 caliber Bushmaster rifle and numerous rounds of ammunition as an unlawful user of controlled substances.
Stover was arrested by the Cedar Rapids Police Department without incident at his home today on the indictment that had been sealed pending his arrest.
Stover appeared in federal court in Cedar Rapids today and pleaded not guilty to the indictment. Stover was ordered released on conditions, including that he submit to GPS monitoring and be detained in his home, pending his reporting for inpatient drug and mental health treatment in Minnesota on Thursday.
If convicted on the pending indictment, Stover could be incarcerated for up to 10 years, without the possibility of parole; fined up to $250,000; and required to serve a term of supervised release of up to 3 years.
As with any criminal case, a charge is merely an accusation and a defendant is presumed innocent until and unless proven guilty.
The case is being prosecuted by Assistant United States Attorney Richard L. Murphy. The case has been investigated by the Cedar Rapids Police Department and the FBI’s Safe Streets Task Force.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 13-mj-00068 LRR.
Canadian Man Found Guilty of Importing 147,000 Estasy Pills from Canada into the United StatesRead the Press Release
BUFFALO, N.Y.-- U.S. Attorney William J. Hochul, Jr. announced today that Osborne Young, 47, of Richmond Hill, Ontario, Canada, was convicted following a jury trial before U.S. District Judge Richard J. Arcara of importing approximately 147,000 pills containing Benzylpiperazine, commonly referred to as Ecstasy, into the United States from Canada. This was one of the largest seizures ever of illegal pills at the border. The charge carries a penalty of up to 20 years in prison, a fine of $1,000,000, or both.
According to Special Assistant U.S. Attorney Fauzia K. Mattingly and Assistant U.S. Mary Catherine Baumgarten, who handled the prosecution of the case at trial, the defendant was driving his tractor trailer and attempted to enter the United States from Canada at the Lewiston Bridge Port of Entry in April 2012. After being pulled over for secondary inspection, Customs and Border Protection Officers discovered approximately 147,000 Ecstasy pills concealed in the refrigeration unit of the tractor trailer. The estimated value of the pills was at least $1,500,000.
The verdict is the result of an investigation on the part of Special Agents of Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of James C. Spero and U.S. Customs and Border Protection, under the direction of
Sentencing is scheduled for January 24, 2014 at 1:00 p.m. before Judge Arcara.
Director of Field Operations James Engleman.Cabot Man Has Initial Appearance in Federal Court on Child Pornography ChargesRead the Press Release
Little Rock - Christopher R. Thyer, Attorney for the Eastern District of Arkansas and Randall C. Coleman, Special Agent in Charge of the Federal Bureau of Investigation - Little Rock Field Office announced that Matthew Hiner, age 25, of Cabot, made his initial appearance today in federal court in front of United States Magistrate Judge H. David Young on allegations of possession of child pornography, distribution of child pornography, and production of child pornography. Hiner was arrested on a criminal Complaint, Friday, August 23, 2013. He continues to be detained following his initial appearance today.
“This office is deeply committed to the prosecution of those who destroy the innocence of children for their own aberrant gratification,” stated Thyer. “We are fortunate to have well-trained investigators bring the evidence necessary to make our cases. This evidence allows our dedicated team of Assistant United States Attorneys to prosecute these difficult cases and imprison those who threaten the safety and security of our children.”
"Our Denied Innocence Task Force is a coalition of federal, state, and local officers who are dedicated to stopping those who prey on children," stated Coleman. "We will continue to work together to proactively investigate child sexual predators including producers and distributors of child pornography."
The criminal Complaint alleges on August 22, 2013, an Undercover (UC) Officer from the FBI/MPD Child Exploitation Task Force, operating out of a satellite office in Washington, D.C., was online in a public chat room and began chatting with username “daddylooking4fam”. Username daddylooking4fam posted he was single, 25 years old, active bi, and living in the United States.”
The UC engaged in a private chat conversation with daddylooking4fam. Daddylooking4fam told the UC that he was “looking for a like-minded family to merge with and raise a very loving and active family with.” Daddylooking4fam then asked the UC to chat on a private Yahoo! chat. During the subsequent chat with the UC, the user utilized the screen name “Matthew Hiner.” Hiner sent the UC photographs of himself engaging in sexually explicit conduct with a minor.
Agents with the FBI Office in Little Rock, Arkansas, determined Matthew Hiner’s identity. Hiner was located and arrested on the criminal Complaint.
The investigation was conducted by the Federal Bureau of Investigation with assistance from the Pulaski County Sheriff’s Office. The case is being prosecuted by Assistant United States Attorney Kristin Bryant.
The charges set forth in a Complaint are merely allegations. A federal Grand Jury will decide whether to indict on these charges. The defendant is presumed innocent until proven guilty.
Box Elder Man Indicted for Using Computer to Engage in Criminal Sexual ConductRead the Press Release
United States Attorney Brendan V. Johnson announced that a Box Elder, South Dakota, man has been indicted by a federal grand jury for allegedly attempting to use a computer attached to the Internet to transfer obscene matter and to entice a female under the age of 16 to engage in criminal sexual conduct between March 28 and April 5, 2013.
Craig Joshua Weires, age 23, was indicted by a federal grand jury on July 23, 2013, for attempted enticement of a minor using the Internet and attempted transfer of obscene material to a minor. Weires appeared before U.S. Magistrate Judge Veronica L. Duffy on August 15, 2013, and pleaded not guilty to the indictment. The maximum penalty upon conviction is life imprisonment and a $250,000 fine. The charges are merely accusations and Weires is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Rapid City Police Department, Pennington County Sheriff's Office, South Dakota Division of Criminal Investigation, Office of Special Investigations from Ellsworth Air Force Base, and Federal Bureau of Investigation. Assistant U.S. Attorney Sarah Collins is prosecuting the case. Weires was remanded to the custody of the U.S. Marshal. A trial date has not yet been set.Boone, Iowa Man Pleads Guilty to Meth and Firearm ChargesRead the Press Release
A man who conspired to distribute methamphetamine and possessed a firearm in furtherance of the drug trafficking conspiracy pled guilty August 13, 2013, in federal court in Sioux City.
James Edward Poole, 33, from Boone, Iowa, was convicted of one count of conspiring to distribute methamphetamine and one count of possession of a firearm in furtherance of a drug trafficking crime.
At the plea hearing, Poole admitted his involvement in a conspiracy from 2012 through January 2013 that distributed more than 1000 grams of mixed methamphetamine which contained at least 150 grams of actual (pure) methamphetamine. On January 8, 2013, officers conducted a traffic stop of a vehicle occupied by Poole and his wife, Shannon Poole. During a search of the vehicle, officers located and seized about over 134 grams of actual (pure) methamphetamine, $377.74 in U.S. Currency, and a loaded handgun (namely a Kel-Tec .380). Poole admitted he had just obtained the methamphetamine from his source near Webster City, Iowa, and planned to distribute it to other person(s).
Sentencing before United States District Court Judge Mark W. Bennett will be set after a presentence report is prepared. Poole remains in custody of the United States Marshal pending sentencing. On the conspiracy conviction, Poole faces a mandatory minimum sentence of 10 years’ imprisonment and a possible maximum sentence of life imprisonment, a $10,000,000 fine, a special assessment of $100, and five years up to life of supervised release following any imprisonment. On the firearm conviction, Poole faces a mandatory minimum sentence of 5 years’ imprisonment consecutive to any term imposed on the conspiracy conviction and a possible maximum sentence of life imprisonment, a $250,000 fine, a special assessment of $100, and up to five years of supervised release.
The case is being prosecuted by Assistant United States Attorney Shawn S. Wehde and was investigated by the Iowa Division of Narcotics Enforcement, Webster City Police Department, Hamilton County Sheriff’s Office, Wright County Sheriff’s Office, Iowa State Patrol, and Iowa Division of Criminal Investigation.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 13-3003.
Bank Chairman Pleads Guilty to using Public Funds to Purchase Luxury Vacation CondoRead the Press Release
JEFFERSON CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Columbia, Mo., bank chairman pleaded guilty in federal court today to misleading federal investigators about his use of $381,000 in bank bailout funds to purchase a luxury condominium in Fort Myers, Fla.
“At a time when many other Americans were losing their homes, he was siphoning off public funds to buy a luxury vacation condo in Florida,” Dickinson said. “These federal funds were intended to help stablilize the economy during a fiscal crisis. Instead, this disgraced business leader took advantage of the situation to benefit himself and other bank executives, then lied to federal investigators in an attempt to hide his scheme.”
Darryl Layne Woods, 48, of Columbia, waived his right to a grand jury and pleaded guilty before U.S. Magistrate Judge Matt J. Whitworth to a federal information that charges him with making a false writing.
Woods was the chairman and chief financial officer of Mainstreet Bank in Ashland, Mo. He was also the chairman, president and majority shareholder of Calvert Financial Corporation, the bank holding company for Mainstreet Bank.
“The purpose of TARP is to promote financial stability and lending in a time of national economic crisis, not to bankroll the purchase of luxury vacation properties for bank executives,” said Christy Romero, Special Inspector General for TARP (SIGTARP). “When SIGTARP required Mainstreet Bank to disclose how it spent TARP funds, bank Chairman and CFO Woods failed to tell the truth that within days of receiving the TARP funds, the bank spent more than a third of the funds purchasing a waterfront condo in Florida for his and other executives’ use. SIGTARP and our law enforcement partners will hold accountable and bring to justice those guilty of crimes related to TARP.”
In November 2008, Calvert Financial applied to receive funds through the Troubled Asset Relief Program (TARP). TARP was created through the Emergency Economic Stabilization Act of 2008. The purpose of TARP was to provide capital to financial institutions to enable them to build their capital base and to increase the flow of financing to businesses and individuals. The U.S. Department of Treasury approved the request for TARP funds, and in January 2009 Calvert Financial received $1,037,000 through the TARP Capital Purchase Program.
Woods admitted today that he used $381,487 of the TARP funds to purchase the luxury condominium on Feb. 2, 2009.
The Special Inspector General for the Troubled Asset Relief Program (SIGTARP) was required to supervise, audit and investigate institutions that received TARP funds. SIGTARP sent letters to various financial institutions seeking specific information as to how TARP funds were used by the institutions. Woods responded to that inquiry in a letter dated Feb. 10, 2009.
Woods failed to disclose in his letter that a significant portion of TARP funds had been used to acquire the condominium. Failure to disclose the purchase of the condominium was a material misrepresentation of facts relating to the true use of TARP funds.
Under the terms of today’s plea agreement, Woods is required to desist from any further involvement in banking and may not serve as an officer, director, employee or affiliated party of any financial institution or agency. The government agrees not to bring any charges against his wife, Jackie Woods (Ralston), for any criminal offenses arising from the facts known by the government as a result of this investigation.
Under federal statutes, Woods is subject to a sentence of up to one year in federal prison without parole, plus a fine up to $100,000 and an order of restitution. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Jim Lynn. It was investigated by the FBI, the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) and the Federal Reserve Board – Office of Inspector General.
Austin Man Pleads Guilty to Bank Robbery and Firearms ChargesRead the Press Release
In Austin, 34-year-old Antonio Cervantez faces federal prison time after pleading guilty to federal charges stemming from a bank robbery in May announced United States Attorney Robert Pitman and FBI Special Agent in Charge Armando Fernandez, San Antonio Division.
Appearing before United States Magistrate Judge Mark Lane this afternoon, Cervantez pleaded guilty to one count of bank robbery and one count of possession of a firearm during a crime of violence. By pleading guilty, Cervantez admitted that on the afternoon of May 29, 2013, he robbed the Bank of America located on West Parmer Lane in Austin. A bank customer, who witnessed the robbery from the drive-through banking lane, called the police and followed Cervantez after he fled the scene. Cervantez drove to his residence in the 4300 block of Northridge where authorities subsequently arrested him and recovered approximately $30,000 stolen from the bank and a .380 caliber firearm.
Cervantez, who has remained in custody since his arrest on May 29, 2013, faces up to 25 years in federal prison on the bank robbery charge and a mandatory seven year consecutive prison term for the firearm charge. He will be sentenced at a later date by United States District Judge Sam Sparks.
This case was investigated by the Austin Violent Crime Fugitive Task Force. The Task Force is made up of investigators from the Federal Bureau of Investigation, Austin Police Department and the Round Rock Police Department. Assistant United States Attorney Gregg N. Sofer is prosecuting this case on behalf of the Government.
Anchorage Man sentenced to 60 months in prison for felon in possession of firearm convictionRead the Press Release
Anchorage, Alaska-U.S. Attorney Karen L. Loeffler announced today that a man from Anchorage was sentenced in federal court in Anchorage for one count of being a felon in possession of a firearm.
Menes Weightman, 34, from Anchorage, Alaska, was sentenced August 23, 2013, by U.S. District Court Judge Sharon L. Gleason to 60 months in prison and 3 years of supervised release. Weightman had previously pled guilty to count one of an indictment charging him with being a felon in possession of a firearm.
According to Assistant U.S. Attorney Kelly Cavanaugh, who prosecuted the case, in December 2012, Anchorage Police responded to a residence in Anchorage to investigate a report of an individual being threatened with a firearm. Weightman was contacted at the residence and was found in possession of a stolen sawed off shotgun, a .38 caliber revolver, and ammunition. Weightman has 3 prior felony convictions punishable by more than one year imprisonment, and is prohibited under federal law from possessing guns.
Prior to imposing a sentence, Judge Gleason informed Weightman that she hoped this sentence would deter him from committing similar crimes in the future and that this would protect the public from Weightman’s criminal behavior while he is in prison.
Ms. Loeffler commended the Anchorage Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives for the investigation leading to the successful prosecution of Weightman.Albuquerque Man Pleads Guilty to Robbing Bank of Albuquerque Branch in May 2013Read the Press Release
ALBUQUERQUE – Richard Sedillo, 36, of Albuquerque, N.M., pleaded guilty this morning to a bank robbery charge under a plea agreement with the U.S. Attorney’s Office.
Sedillo was arrested on May 30, 2013, based on a criminal complaint charging him with bank robbery and subsequently was indicted on the same charge on June 12, 2013. According to the indictment, Sedillo robbed the Bank of Albuquerque branch located in the Albertson’s Supermarket at 10131 Coors Blvd. NE in Albuquerque, on May 30, 2013.
During his plea hearing, Sedillo entered a guilty plea to the indictment. In his plea agreement, Sedillo admitted that on May 30, 2013, he approached a bank teller at the Bank and handed the teller a note that “told the teller to hand me money or else I would shoot.” After the teller gave money to Sedillo, Sedillo left the Bank.
Court records reflect that the teller observed Sedillo get into a truck and provided the truck’s license plate number to law enforcement authorities. That information led to Sedillo’s arrest later that day as well as the recovery of most of the money taken by Sedillo during the bank robbery.
Sedillo has been in federal custody since his arrest and remains detained pending his sentencing hearing, which has yet to be scheduled. At sentencing, Sedillo faces a maximum sentence of 20 years in prison.
This case was investigated by the Albuquerque office of the FBI and the Albuquerque Police Department and is being prosecuted by Assistant U.S. Attorney Paige Messec.
Aberdeen Man Charged with False Crop Insurance ClaimsRead the Press Release
First Assistant United States Attorney Randy J. Seiler announced that an Aberdeen, South Dakota, man has been indicted by a federal grand jury for three counts of false crop insurance claims.
Nickolas Berbos, a/k/a Nikolas Berbos, age 52, was indicted by a federal grand jury on August 20, 2013. He appeared before U.S. Magistrate Judge William D. Gerdes on August 22, 2013, and pled not guilty to the indictment. The maximum penalty upon conviction on each count is up to 30 years in custody, a $1,000,000 fine, or both; 5 years of supervised release; and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
For each of the years 2009, 2010 and 2011, Berbos allegedly made false statements and false reports by over-valuing land, property and securities for the purpose of influencing the Federal Crop Insurance Corporation, in that he submitted one or more claims for prevented planting indemnity payments knowing he was ineligible for such payment.
The charge is merely an accusation and Berbos is presumed innocent until and unless proven guilty.
The investigation is being conducted by the U.S. Department of Agriculture. Assistant U.S. Attorney Ann M. Hendrickson is prosecuting the case.
Berbos was released pending trial. A trial date has not been set.
Sunday 25 August 2013
Columbus Woman Sentenced for Embezzling HUD Program Funds, Filing False Income Tax ReturnsRead the Press Release
CONTACT: Fred Alverson
Public Affairs OfficerCOLUMBUS – Wendy Harper, 44, of Columbus, Ohio was sentenced in U.S. District Court to 24 months in prison, three years of supervised release, and ordered to pay restitution in the amounts of $588,121.46 to the U.S. Department of Housing and Urban Development (HUD) for embezzling HUD program funds from her employer, and $126,345.36 to the Internal Revenue Service (IRS) for filing a false federal income tax return.
Carter M. Stewart, U.S. Attorney for the Southern District of Ohio, Brad Geary, Special Agent in Charge, U.S. Department of Housing and Urban Development Office of Inspector General, and Kathy A. Enstrom, Special Agent in Charge, Internal Revenue Service Criminal Investigation announced the sentence handed down today by U.S. District Judge Gregory L. Frost.
According to court documents, Harper was responsible for managing payroll and payment functions for her employer, Harvest Management Group, Inc., which managed more than 900 units for elderly and disabled people who qualify for HUD assistance. Harper manipulated the payroll system to give herself unauthorized salary increases and unauthorized mileage reimbursements between 2009 and 2012. According to calculations made by criminal investigators in this case, Harper would have had to have driven more than 1,200,000 miles in order for the mileage reimbursements to have been legitimate.
Harper pleaded guilty to the aforementioned charges on February 6, 2014. In her plea agreement, Harper acknowledged that the U.S. showed the amount of money she embezzled was $588,121.46 and that she concealed her crime by filing false federal income tax returns for 2009, 2010 and 2011, on which she failed to report the HUD program funds she stole. Harper’s theft of these program funds contributed to Harvest Management Group, Inc. having difficulties maintaining the properties to minimum HUD standards and paying its property taxes.
U.S. Attorney Stewart commended the investigation by HUD and the IRS, the Reynoldsburg Police who referred the case for federal investigation, and Assistant U.S. Attorney Dale E. Williams Jr., who represented the United States in this case.
Anniston Man Arrested and Charged with Murder for HireRead the Press Release
BIRMINGHAM -- An Anniston man has been charged in federal court with using a telephone and a motor vehicle in an effort to hire someone to kill a man he suspected of raping his wife, announced U.S. Attorney Joyce White Vance and FBI Special Agent in Charge Richard D. Schwein Jr.
Federal officials arrested ALLEN WAYNE DENSEN MORGAN, 29, on Sunday in Oxford, Ala., after he told undercover officers, whom he believed to be members of the Ku Klux Klan, that he would pay them to murder a Munford man, according to a federal criminal complaint filed today in U.S. District Court. Morgan was in the custody of U.S. Marshals on Monday.
Morgan talked to a man by phone on Aug. 22, who identified himself as a KKK member, and the two men arranged the Sunday meeting at an Oxford restaurant to discuss payment for the murder-for-hire, according to the complaint. In the Aug. 22 phone conversation, Morgan made explicit threats of how he wanted the man to be tortured and to die a slow, painful death, according to the complaint. Morgan also said he had already confronted the man near his Munford residence and fired several shots toward him to intimidate him, according to the complaint.
The FBI is investigating the case.
Friday 23 August 2013
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:
Shawn Fox, 28, of South Bend, Indiana, pled guilty before Magistrate Judge Christopher A. Nuechterlein to the felony offense of bank robbery with the use of a firearm. Magistrate Nuechterlein is recommending that the district court accept the tendered guilty plea.Parties have 10 days in which to object to the magistrate judge’s recommendation. Sentencing has been set for 11/25/2013.This investigation was conducted by the Federal Bureau of InvestigationThis case is being prosecuted by Assistant United States Attorney Frank Schaffer.
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.
DISPOSITIONS:
Rickey Hemphill, 20, of Riverdale, Illinois, and Timothy Whitfield, 21, of South Bend, Indiana, members of the criminal enterprise Cash Out Boyz, a violent and dangerous gang operating in South Bend during 2010 through 2012, were sentenced by District Judge Robert L. Miller, Jr. this week.Hemphill was sentenced to 174 months of imprisonment and 3 years of supervised release after pleading guilty to the felony offense of racketeering.Whitfield was sentenced to 320 months of imprisonment and 10 years of supervised released after pleading guilty to the felony offense of racketeering and carrying and using a firearm during drug trafficking and a crime of violence.
According to documents filed in this case, members of the COB, including Hemphill and Whitfield, attempted to commit and threatened to commit acts of violence, including murder, attempted murder, robbery and assault in order to protect and expand the enterprise’s criminal operations. Those criminal operations included robbery and illegal trafficking in Ecstasy and marijuana.During his time with the organization, Hemphill was involved in numerous violent altercations with rival gang members which included aggravated assault, exchanging gunfire, public retaliation and distribution of marijuana. Whitfield also had numerous violent altercations with rival gang members which led to shootings.Whitfield has prior convictions for hit and run – leaving the scene (2010), false informing and resisting arrest (2010), theft (2010), and aggravated battery (2011). This case was the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Federal Bureau of Investigation and the South Bend Police Department.This case was prosecuted by Assistant United States Attorney Donald Schmid.
Deneen Lewis, 42, of South Bend, Indiana, was sentenced by District Judge Jon E. DeGuilio to serve 24 months of imprisonment, 2 years of supervised release and $16,603 in restitution after pleading guilty to the felony offense of theft of government property.According to documents filed in this case, from 2010 to 2012, Lewis was receiving the Supplemental Social Security Income payment for her child.At the time that Lewis established herself as the payee, her child did not live with her.Lewis used the payments for personal purchases not intended for the recipient. This case was the result of an investigation by the Social Security Administration.This case was prosecuted by Assistant United States Attorney Barbara Brook.
Gabriel Franco, 31, of Mishawaka, Indiana, was sentenced by District Judge Jon E. DeGuilio to serve 6 months of imprisonment, 6 months location monitoring on home detention and 3 years supervised release after pleading guilty to the felony offense of manufacturing marijuana.According to documents filed in this case, in 2012, Franco was running a marijuana grow operation out of his home. This case was the result of an investigation by Drug Enforcement Administration.This case was prosecuted by Assistant United States Attorney Frank Schaffer.
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:
The following Indictments were returned on August 22, 2013:
Antoine McClain, 31, of East Chicago, Indiana, was charged with possession of a firearm and ammunition by a convicted felon.This charge was filed as the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives HIDTA Task Force and the East Chicago Police Department.This case has been assigned to and will be prosecuted by Assistant United States Attorney Nicholas Padilla.
Turrell Anderson, 41, of East Chicago, Indiana, was charged with possession of a firearm by a convicted felon.This charge was filed as the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the East Chicago Police Department.This case has been assigned to and will be prosecuted by Assistant United States Attorney Thomas McGrath.
Javante Toran, 21, of Hammond, Indiana, was charged with possession of a firearm by a convicted felon.This charge was filed as the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives.This case has been assigned to and will be prosecuted by Assistant United States Attorney David Nozick.
The United States Attorney's Office emphasized that an Indictment is merely an allegation and that all persons charged are presumed innocent until and unless proven guilty in court.
PLEAS:
Lamar Johnson, 26, of Minneapolis, Minnesota, pled guilty before Chief Judge Philip Simon to the felony offense of transportation of a minor with the intent that she engage in prostitution.This case resulted from an investigation by members of the Indiana Internet Crimes Against Children Task Force, including the Federal Bureau of Investigation and the Indiana State Police.This case is being prosecuted by Assistant United States Attorney Jill Koster.
Tajuan Allen, 37, of Gary, Indiana, pled guilty before Chief Judge Philip Simon to the felony offense of selling loaded firearms to a felon.Sentencing has been set for 11/19/13.This charge was filed as a result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives HIDTA Task Force.This case is being prosecuted by Assistant United States Attorney David Nozick.
Tyrone Benson, 38, of Hammond, Indiana, pled guilty before Senior District Judge James Moody to the felony offense of possession of a firearm by a convicted felon.This charge was filed as a result of an investigation by the Drug Enforcement Administration HIDTA Task Force.This case is being prosecuted by Assistant United States Attorney David Nozick.
Manuel Montalvo, 39, of East Chicago, Indiana, pled guilty before District Judge Joseph Van Bokkelen to the felony offense of filing a false tax return.Sentencing has been set for 11/5/13.This charge was filed as a result of an investigation by the Internal Revenue Service and the Federal Bureau of Investigation.This case is being prosecuted by Assistant United States Attorney Gary Bell.
Tiana Williams, 19, of Gary, Indiana, pled guilty before Senior District Judge James Moody to the felony offense of making false statements in the acquisition of a firearm.This charge was filed as a result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives HIDTA Task Force and the Lake County Police Department.This case is being prosecuted by Assistant United States Attorney Nicholas Padilla.
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.
DISPOSITIONS:
Eugene Baber, Jr., 29, of Gary, Indiana, was sentenced by Chief Judge Philip Simon to 42 months imprisonment and 2 years of supervised release after pleading guilty to the felony offense of possession of a firearm and ammunition by a convicted felon.This case was the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives HIDTA Task Force and the Gary Police Department.This case was prosecuted by Assistant United States Attorney Jacqueline Jacobs.
Chanel Bandy, 35, of Merrillville, Indiana, was sentenced by Senior District Judge James Moody to 2 years of probation after pleading guilty to the felony offense of assisting in the preparation of false/fraudulent tax returns.According to documents filed by the government, Bandy worked for Quick Sam Tax Refund and was encouraged to and did prepare and file fraudulent tax returns to obtain grossly inflated refunds for her clients, to bring in business and fees for her employer, and to obtain cash tips for her own financial gain.Losses directly tied to Bandy’s preparation of fraudulent tax returns as of the date of her guilty plea was $87,784. This case was the result of an investigation by the Internal Revenue Service.This case was prosecuted by Assistant United States Attorney Jill Koster.
Joseph Jamal Smith, 20, of Chicago, Illinois, was sentenced by Senior District Judge James Moody to 24 months imprisonment and 2 years of supervised release after pleading guilty to the felony offense of possession of a firearm by a convicted felon.According to documents filed by the government, Smith has a prior conviction for aggravated unlawful use of a weapon. 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 Thomas McGrath.
Luis Yanez, 41, of Lorain, Ohio, was sentenced by Senior District Judge James Moody to 46 months imprisonment and 2 years of supervised release after pleading guilty to the felony offense of conspiracy to possess with the intent to distribute cocaine.This case was the result of an investigation by the Drug Enforcement Administration.This case was prosecuted by Assistant United States Attorney Joshua Kolar.
Washington State Organizations Receive Federal Grants to Combat Sexual Violence and Improve Drug TreatmentRead the Press Release
Two federal grants from the U.S. Department of Justice are aimed at intervening in the lives of those struggling with drug abuse or sexual or domestic violence, announced U.S. Attorney Jenny A. Durkan. The largest grant, more than $975,000, goes to the King County Sexual Assault Resource Center (KSARC) to provide services to youth and young adults who have been impacted by domestic violence, sexual assault, dating violence or stalking. The second grant, to the Washington State Department of Social and Health Services (DSHS) is aimed at supporting drug treatment for offenders in Washington’s jails and prisons. The $150,000 grant is from DOJ’s Bureau of Justice Assistance.
“These grants recognize the quality work being done in Washington to build a better future. Preventing domestic violence and stalking, and helping victims is critical to building safe communities and strong adults. KSARC has long been a national leader on these issues,” said U.S. Attorney Jenny A. Durkan. “As Attorney General Eric Holder noted last week, we also must provide services such as drug treatment to allow those reentering society from prison the best chance at success.”
The grant from DOJ’s Office of Violence Against Women (OVW) is designed to support comprehensive child- and youth-centered prevention, intervention, treatment, and response strategies to more fully address sexual assault, domestic violence, dating violence, and/or stalking. The grant supports training for professionals, school based strategies, services for non-abusive parents and coordinating community responses. This project also supports innovative projects that engage men and boys to act as allies with women and girls to address sexual assault, domestic violence, dating violence, and/or stalking. The King County Sexual Assault Resource Center will implement this comprehensive project which focuses on sexual assault. The primary targeted age groups include youth and young adults, ages 13-24 years old, with a special focus on the homeless and runaway youth population, LGBTQ and the Latino population.
The grant to DSHS will support the Residential Substance Abuse Treatment (RSAT) program in the state’s jails and prisons. The goal of the RSAT program is to break the cycle of drugs and violence by reducing the demand for, use, and trafficking of illegal drugs. RSAT enhances the capability of states and units of local government to provide residential substance abuse treatment for incarcerated inmates; prepares offenders for their reintegration into the communities from which they came by incorporating reentry planning activities into treatment programs; and assists offenders and their communities through the reentry process through the delivery of community-based treatment and other broad-based aftercare services.
Washington State Awarded Nearly $5 Million to Enhance Criminal JusticeRead the Press Release
The U.S. Justice Department today awarded nearly $5 million in grants to improve criminal justice in Washington State, announced U.S. Attorney Jenny A. Durkan. The largest grant, $3.6 million, will be funneled through the Washington State Department of Commerce. An advisory council made up of law enforcement, corrections, treatment and prevention professionals at the local, state and federal level selects the grant recipients throughout the state. Individual police departments also received $1.3 million in direct grants, and the University of Washington received more than $247,000 for its Wrongful Conviction Review Program.
“These Byrne grants, named for a young police officer who lost his life in the line of duty, are critical to the mission of our local police departments,” said U.S. Attorney Jenny A. Durkan. “These grant awards are key to helping police forces with scarce resources so they can better protect public safety.”
The City of Seattle and surrounding jurisdictions (Auburn, Bellevue, Burien, Federal Way, Kent, King County, Renton, Seatac, Seattle and Tukwila) applied together for the largest grant: $635,618. The money will go to a variety of law enforcement programs aimed at preventing and reducing crime and providing services to victims. Tacoma and surrounding jurisdictions (Tacoma Human Services, Pierce County Sheriff, Pierce County Prosecutor, Pierce County Superior Court and the Pierce County Department of Assigned Counsel) also did a combined application. The Tacoma group was awarded $286,619 for various community-based policing and prosecution programs. Priorities include youth violence, crime prevention and community policing.These are the other direct Byrne grants awarded today:
- Skagit County $10,050 for their Victim Offender Meeting Program.
- Bellingham $35,159 for their Active Shooter training for law enforcement agencies in the area to increase officer safety, improve integrated public safety response, and to save lives.
- Everett $54,339 to purchase a variety of equipment including trauma kits, SWAT training, ballistic shields, license plate readers and life vests.
- Clark County $92,769 and surrounding jurisdictions will use the grant for equipment and technology including a crime reporting and analysis system, ammunition, protective gear and a criminal and jail records system
- Thurston County $31,922 for computer equipment; case management transition and implementations; visual aid equipment; and training.
- University Place $10,323 to support community-based programs. Funds will be used for overtime and to augment crime prevention programs concerning personal and property safety.
- Snohomish County $41,155. The Sheriff's Office will use grant funds to support overtime costs incurred for training.
- Bremerton $25,688 to preserve the community resource specialist who oversees the landlord notification, neighborhood watch, and crime prevention programs in the community.
- Lakewood $59,756 to target the increasing crime of copper theft and identify and eradicate illegal scrap metal shops operating in the area.
- Kitsap County $53,590 to obtain new equipment and technology to improve service and provide a safe environment for officers and the community.
Significant funding, $247, 593, was awarded today to the University of Washington Wrongful Conviction Review Program, known as the Innocence Project Northwest. The Program provides high quality and efficient representation for potentially wrongfully convicted defendants in post-conviction claims of innocence. The goals of this initiative are to: provide quality representation to those who may have been wrongfully convicted; alleviate burdens placed on the criminal justice system through costly and prolonged post-conviction litigation; and identify, whenever possible, the actual perpetrator of the crime.
The Byrne Grants are named in honor of New York City Police Officer Edward R. Byrne, who was killed in the line of duty on February 26, 1988. Officer Byrne was just 22-years-old. The Department of Justice's Bureau of Justice Assistance (BJA) administers this program, which allows state and local governments to support a broad range of activities to prevent and control crime and to improve the justice system.
Two Individuals Arrested for Health Care FraudRead the Press Release
SAN JUAN, P.R. – On August 22, 2013, a Federal grand jury returned an indictment against two individuals for conspiracy to commit health care fraud, announced Rosa Emilia Rodríguez-Vélez, United States Attorney for the District of Puerto Rico. The investigation was led by the Department of Health and Human Services, Office of Inspector General (HHS-OIG), with the collaboration of the Food and Drug Administration, Office of Criminal Investigations (FDA-OCI), the Federal Bureau of Investigations (FBI) and the Puerto Rico Police Department.
Carlos I. Rivera-Torres, President of CEM Puerto Rico Health Services, Inc. (CEM) and Alpha-Omega Wound Care (Alpha-Omega) and Pedro Rivera-Rivera, President of New Center Medical Supply, Inc. (New Center), are charged in a 25-count indictment for conspiracy to commit health care fraud and a forfeiture allegation of $1,741,090.08. The government seeks to forfeit two bank accounts, CEM Office Building in Caguas, PR and a property in Urb. Sabanera in Cidra, PR.
The indictment alleges that from on or about June 18, 2008 through on or about March, 2012, CEM and New Center submitted at least 710 false and fraudulent claims to Medicare totaling approximately $2,457670.00, seeking reimbursement for Durable Medical Equipment (DME) including collagen wound dressings that were misbranded, causing Medicare to disburse approximately $1,741,090.08.
It was part of the scheme and artifice to defraud that Rivera-Torres and other unindicted employees of Alpha-Omega, at their premises, in a room that was used for this activity, removed some of the 8x8 inch Helicoll collagen wound dressings from their primary unlabeled pouches, cut them into pieces of approximately 4x4 inch and 2x2 inch and repacked them in unlabeled plastic and foil material, contrary to the manufacturer's product instructions ("Sterility Guaranteed in Unopened, Undamaged Package. To Be Used for One Procedure Only").
Those repacked 4x4 inch and 2x2 inch collagen wound dressings, which were cut by using common household scissors, some of them with rust, were provided to patients by representatives of Alpha-Omega or CEM inside unlabeled pouches created in a converted garage located at the premises of Alpha-Omega.
Both defendants also face three counts for soliciting and receiving kickbacks in relation to the Medicare Program. Defendant Rivera-Torres also faces charges of misbranding and adulterating medical devices with intent to mislead and defraud and money laundering.“As part of the nation’s health care system, Medicare serves vulnerable populations,” said United States Attorney, Rosa Emilia Rodríguez-Vélez. “These individuals jeopardized the health of injured people who needed the sterile collagen wound dressings. Today’s arrests by HHS-OIG agents and our law enforcement partners show that we will not tolerate criminals who engage in fraudulent schemes which deplete the Medicare program of funds in order to enrich themselves.”
Thomas O’Donnell, Special Agent in Charge of the Office of Inspector General’s New York Regional Office which also covers Puerto Rico stated: “HHS/OIG works diligently to investigate allegations of Medicare fraud. Today's arrests involving Durable Medical Equipment (DME) fraud demonstrate our resolve to bring these subjects to justice. Our efforts, along with the US Attorney's Office and our Law Enforcement partners, have made a dramatic reduction on the total dollars billed and paid for DME in Puerto Rico.”
HHS-OIG was the lead agency which conducted the investigation, with the collaboration of FDA, FBI, and PRPD. The case is being prosecuted by Special Assistant U.S. Attorney Wallace A. Bustelo and Assistant U.S. Attorney Héctor Ramírez-Carbó.
If found guilty, the defendants could face a possible sentence of up to 10 years in prison for the Health Care Fraud offense. Indictments contain only charges and are not evidence of guilt. Defendants are presumed to be innocent unless and until proven guilty.
Turnberry Embezzler Sentenced to over Four Years in PrisonRead the Press Release
LAS VEGAS, Nev. – A man who conspired with a former controller to embezzle millions from the company that owned or developed the Residences at MGM, Town Square shopping center, Turnberry Place, Turnberry Towers, and the Stirling Club in Las Vegas, was sentenced today to 51 months in prison, three years of supervised release, and ordered to pay approximately $3.7 million in restitution, announced Daniel G. Bogden, United States Attorney for the District of Nevada.
Rocco Lazazzaro, 55, of Las Vegas, was sentenced by U.S. District Judge Gloria M. Navarro. Lazazzaro pleaded guilty in May to conspiracy to commit wire fraud. According to his guilty plea agreement, from about May 17, 2007, to about Jan. 12, 2012, Lazazzaro and Hope Ippoliti, 51, the former controller for Turnberry Associates, conspired to steal more than $3.7 million dollars from Turnberry and its affiliates.
“Through this embezzlement scheme, Mr. Lazazzaro and Ms. Ippoliti victimized not only Turnberry Associates in the amount of $5.6 million, but caused irreparable harm and financial damage to the many victims and business entities employed and supported by Turnberry Associates,” said United States Attorney Bogden. “It is truly sad that the greed and self-indulgent criminal conduct of Mr. Lazazzaro continues to result in harm to so many other innocent victims.”
Ippoliti created fund transfer requests containing false information that the funds were intended for business-related purposes when she and Lazazzaro actually intended to withdraw the funds for personal use. Ippoliti faxed or emailed the fund transfer requests from Nevada to Turnberry Associates in Florida to cause the transfer of funds into Bank of America accounts over which she had signatory authority. Ippoliti and Lazazzaro deposited and cashed checks and cashier’s checks drawn on Bank of America bank accounts belonging to Turnberry Associates and its affiliates.
The total losses to Turnberry Associates and its affiliates are a total of $5.6 million. According to Lazazzaro’s guilty plea agreement, he was directly involved in causing approximately $3.7 million of those losses. The sentencing memorandum filed by the government states that Lazazzaro used the stolen monies for gambling and drug use.
Lazarro has four prior felony convictions and numerous misdemeanor convictions, many of which involved violence or threats of violence against others through the use or threatened use of fire, knives, or blunt objects. In 1986, while on probation for a 1980 felony grand theft conviction, he was convicted of committing five robberies in addition to vicious assaults and was sentenced to 10 to 20 years in prison. He was discharged from parole one year before committing the Turnberry embezzlement crimes.
Ippoliti pleaded guilty in March to conspiracy to commit wire fraud resulting in total losses of $5.6 million dollars, and is scheduled to be sentenced on Sept. 19, 2013, at 9:00 a.m. before U.S. District Judge Gloria M. Navarro.
The case was jointly investigated by the FBI and the United States Secret Service and is being prosecuted by Assistant U.S. Attorney Christina M. Brown.
Today's announcement is part of efforts underway by President Obama's Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys' offices and state and local partners, it's the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
Three from New York Charged with Offering to Sell WomenRead the Press Release
NORFOLK, Va. – Prince Lee, 20, Henry Olson, 21, and Arielle Pierre, 21, all from New York, have been indicted by a federal grand jury on charges of conspiracy, transportation for prostitution and coercion and enticement.
Neil H. MacBride, United States Attorney for the Eastern District of Virginia and Royce E. Curtin, Special Agent in Charge, Federal Bureau of Investigation Norfolk Office, made the announcement.
Lee, Olson, and Pierre all face a maximum penalty of 20 years if convicted.
According to the indictment, on May 15 2013, Prince Lee and a young woman posted an ad on craigslist.com in Hampton Roads offering to sell the woman as a “sex slave” for $10,000. The Virginia Beach Police Department was monitoring the site and came across the ad and responded. The undercover officer spoke with Prince Lee, of New York, and the young woman and they agreed to sell three women for approximately $225,000. They agreed to meet in Virginia Beach on June 1st. Prince Lee and Henry Olson recruited Jane Doe 1, a 30 year-old also from New York, and told the woman she would receive $10K just to hang out with a friend of Prince Lee’s in Virginia. After much persuasion, she agreed. Arielle Pierre and Prince Lee recruited Jane Doe 2 also to spend a few hours with the man. Neither of the women was told that they were being “sold” to the man. Lee, Olson, Pierre and two others drove with the Jane Does from New York and arrived in Virginia Beach on the morning of June 1. Under observation by the police, Lee and Pierre were seen yelling at and grabbing the Jane Doe 2, trying to force the woman to remain and go to the “date.” Jane Doe 2 eventually ran into a nearby hotel, where employees hid her in the back room. Prince Lee also threatened to desert Jane Doe 1 in Virginia and throw away her car keys if she did not go forward with the plan. In the afternoon of June 1, the UC arrived for the “date” and all defendants were arrested.
This case was investigated by the Virginia Beach Police Department and Federal Bureau of Investigation. Assistant United States Attorney Elizabeth Yusi is prosecuting the case on behalf of the United States.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.
Criminal indictments are only charges and not evidence of guilt. A defendant is presumed to be innocent until and unless proven guilty.Texas Tax Preparer Is Permanently Barred from Tax Preparation for Allegedly Falsifying Returns for Overseas Customers and Impeding AuditsRead the Press Release
The Justice Department announced that yesterday a federal court in Ft. Worth, Texas permanently barred Karena Mondrianh, of Southlake, Texas, from preparing tax returns and from operating a tax-preparation business. Mondrianh consented to entry of the preliminary injunctions without admitting the allegations against her.
In its complaint, the government alleged that Mondrianh prepared fraudulent tax returns understating customers’ income by inventing – sometimes without customers’ knowledge – false business expenses and by falsely claiming that customers’ income was exempt from tax. According to the complaint most of Mondrianh’s customers work overseas for defense contractors. The permanent injunction order was signed by Judge John H. McBryde of the U.S. District Court for the Northern District of Texas.
The complaint further alleged that Mondrianh provided false information to the Internal Revenue Service (IRS) in improper attempts to delay IRS audits of customers. She also allegedly urged a customer to lie to an IRS agent in order to forestall an IRS audit. For more information about this complaint visit www.justice.gov/tax/2013/txdv13690.htm .
Return preparer fraud is one of the IRS’s Dirty Dozen Tax Scams for 2013 , which can be viewed at www.irs.gov/uac/Newsroom/IRS-Releases-the-Dirty-Dozen-Tax-Scams-for-2013 . In the past decade, the Justice Department’s Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department website at www.justice.gov/tax/taxpress2013.htm.
Tennessee Man sentenced to 10 and a half years in prison for distribution of Child PornographyRead the Press Release
Anchorage, Alaska - U.S. Attorney Karen L. Loeffler announced today that a Tennessee man was sentenced in federal court in Anchorage for two counts of distributing child pornography.
Matthew Bren Goodlett, 33, of Knoxville, Tennessee, was sentenced yesterday by Chief U.S. District Court Judge Ralph R. Beistline, to 126 months in prison, followed by 20 years of supervised release, for distributing sexually explicit images of children. Goodlett emailed the materials to an email account in Alaska in January 2012.
According to Assistant U.S. Attorney Audrey J. Renschen, over 3,500 images and 150 videos of children being sexually exploited were involved, including images of children under age 12, and “material that portrays sadistic or masochistic conduct or other depictions of violence.”
At Goodlett’s sentencing, Judge Beistline noted the seriousness of the offenses, the ongoing harm to the victimized children, and the need to deter this kind of conduct. After serving his 10 years and 6 months in prison, Judge Beistline stated Goodlett must serve 20 years of supervised release and be required to comply with special conditions, including participating in sex offender assessment and treatment, and registering as a sex offender.
This case was initiated as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse which was 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 combines federal, state and local resources to better identify, 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.Ms. Loeffler commends Immigration and Customs Enforcement’s Homeland Security Investigations for their investigation of this case.