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Thursday 15 August 2013
Long Island Fisherman and Fish Dealer Plead Guilty to Wire Fraud and Records FalsificationRead the Press Release
The operator of the dragger F/V Norseman and an associated fish dealer pleaded guilty Thursday in federal court in Central Islip, N.Y., to federal violations stemming from their role in systematically underreporting fluke (summer flounder) that was being harvested as part of the federal Research Set-Aside Program, the Justice Department’s Environment and Natural Resources Division announced.
Charles Wertz Jr., a commercial fisherman from East Meadow, N.Y., pleaded guilty to one count of wire fraud and two counts of falsification of federal records for knowingly submitting 137 falsified dealer reports from May 2009 through December 2011, and 70 falsified fishing logs, known as fishing vessel trip reports (FVTRs), from May 2011 through December 2011, as part of a scheme to defraud the United States of overharvested and underreported fluke. The fish dealer, C&C Ocean Fishery Ltd., pleaded guilty to one count of wire fraud and three counts of falsification of federal records for its participation in the scheme, which included aiding and abetting the submission of falsified dealer reports and FVTRs.
As part of the plea deal, the defendants agreed to pay between $480,000 and $516,000 in combined fines and forfeitures. The defendants also agreed to multiple sentence conditions, including relinquishment of federal fishing permits, a ban on participation in the Research Seat-Aside Program, divestiture of any interest in the F/V Norseman, and shutting down the company, C&C Ocean Fishery Ltd. The court will hear sentencing recommendations at a hearing set for Nov. 22, 2013.
“Protecting the integrity of the Research Set Aside program supports the goal of ensuring sustainable fisheries for future generations,” said Robert G. Dreher, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “When individuals like the defendant willfully defraud the government in order to turn a larger profit for themselves they are also cheating their fellow fishermen who choose to play by the rules. Today’s plea demonstrates that we will hold those who break the rules accountable and make sure that this valuable resource remains available to everyone.”“Our office takes these violations very seriously,” said Logan Gregory, Special Agent in Charge of the National Oceanic and Atmospheric Administration (NOAA) Office of Law Enforcement's Northeast Division. “This type of illegal activity has a ripple effect on seafood markets and impacts fishing communities by driving down the price of fluke which reduces the potential profits of fishermen and dealers who abide by the regulations. We hope the outcome of this case deters others from coming up with similar schemes to circumvent federal fisheries laws and regulations and from gaining an unfair advantage over those who comply with the regulations.”
Under NOAA regulations, all of the Norseman’s catch had to be reported to NOAA on FVTRs. During the years 2009, 2010, and 2011, the Norseman principally targeted fluke. However, on multiple occasions the vessel exceeded its relevant federal and New York State quotas for fluke for 137 trips, totaling 86,080 pounds of fluke worth approximately $200,000.
In order to cover up the illegal fluke harvesting, the operators of the Norseman falsified the FVTRs that were submitted to NOAA. For each of the 137 trips, a false FVTR was submitted. During 2009 and 2010, another individual submitted the false FVTRs, but by May 2, 2011, Mr. Wertz was falsifying and submitting the FVTRs himself. The defendants were aware that the FVTRs were utilized by NOAA as part of the administration of its statutory-mandated fisheries management program.C&C Ocean was not only aware of the false Norseman FVTRs, but it aided and abetted the perpetration of the FVTR scheme through its preparation of federal dealer reports. As a federal dealer, C&C Ocean was required to prepare and submit federal dealer reports to NOAA. The dealer reports include information such as date of landing, port of landing, catch vessel, corresponding FVTR numbers, commercial grade, species, price, and weight. In order to cover up the overharvesting that occurred on the water, C&C Ocean’s dealer report had to match the catch data that was submitted on the corresponding FVTR. In other words, if the FVTR falsely underreported the Norseman’s catch of fluke, then the scheme would likely be detected unless the corresponding dealer report was similarly falsified. Both defendants prepared and submitted false dealer reports for each of the trips set forth in the table.
The defendants electronically submitted the 137 false dealer reports from Wertz’s desktop computer in New York, through an out-of-state internet server, to NOAA’s Regional Fisheries Administrator in Gloucester, Mass.
The case was investigated by agents of NOAA’s National Marine Fisheries Service, with assistance from the New York State Department of Environmental Conservation Police. The case is being prosecuted by Christopher L. Hale of the Justice Department’s Environmental Crimes Section, Environment and Natural Resources Division.Related Materials:
Wertz Plea Agreement
C&C Plea AgreementLocal Police Department Recovers Proceeds from Dismantling Major Internet Gambling OperationRead the Press Release
Department of Justice
Office of Public AffairsPLANO, Texas – The federal government provided nearly $5 million in proceeds to the Plano Police Department after their joint efforts dismantled a major internet gambling operation, announced U.S. Attorney John M. Bales and IRS Criminal Investigation Acting Special Agent in Charge Madie Branch today.
The Plano Police Department was presented a check in the amount of $4,753,841.40 at an asset sharing ceremony today at the Plano Police Department. The check presentation was made by U.S. Attorney Bales and Acting SAC Branch.
The Plano Police Department began an investigation in 2006 in which an undercover police detective developed a betting relationship with a bookmaker. The bookmaker was part of a larger organization operating an offshore sports book that utilized toll free telephone numbers and the Internet as a means of accepting sports wagers from bettors located throughout the United States. Further investigation revealed the illegal gambling organization originated in North Texas and had operated the offshore Internet sports book utilizing a corporate identity, global Internet Corporation (GIC), incorporated in Willemstad Curacao Netherlands Antilles, since September 2002.
The investigation identified 18 individuals who conspired to illegally accept wagers on college and professional sporting events through approximately 25 Internet websites hosted in Curacao, Netherlands Antilles. The defendants provided bettors with a personal login code and password to facilitate the placement of wagers through the websites and to disguise their identities. Bettors were then directed to specific websites or to toll free numbers operated by the websites where the bettors placed wagers on sporting events.
On March 3 and 4, 2011, law enforcement officers executed 32 federal search warrants at residences, offices and safe-deposit boxes belonging to defendants. During the course of the investigation, 47 seizure warrants were also served seizing numerous bank and investment accounts, automobiles, businesses, and real properties. The investigation disclosed that this illegal Internet wagering organization generated in excess of $5.4 billion in gross wagers resulting in approximately $200 million in illegal earnings to the defendants from January 2007 to February 2011.
All 18 defendants have pleaded guilty to various criminal violations including money laundering, illegal gambling, structuring and tax violations related to income derived from their illegal gambling enterprise. To date, in excess of $10 million has been forfeited to the U.S. Government. In addition to forfeiture of money and assets and court ordered fines, the defendants were sentenced as follows:
Albert Sydney Reed, Jr., 57, of Southlake, Texas, was convicted of prohibition of illegal gambling business and sentenced to 12 months and 1 day in federal prison.
Curtis Wayne Higgins, 45, of Proper, Texas, was convicted of engaging in monetary transactions in property derived from illegal gambling and sentenced to 5 years of probation.
David Mullins, 48, of Coppell, Texas, was convicted of engaging in monetary transactions in property derived from illegal gambling and sentenced to 5 years of probation.
Dean Hartley Maddox, 69, of Houston, was convicted of willful failure to file a tax return and sentenced to 18 months of probation.
Carl Francis, 71, of Dallas, was convicted of prohibition of illegal gambling business and was sentenced to 3 years of probation, 6 months home confinement and 200 hours of community service.
Andrew Harris McElroy, 44, of Dallas, was convicted of engaging in monetary transactions in property derived from illegal gambling and sentenced to 3 years of probation.
Steven Arnold Bell, 58, of Arlington, Texas, was convicted of prohibition of illegal gambling business and sentenced to 2 years of probation and 6 months home detention.
Neil Marcus Gerson, 51, of Frisco, Texas, was convicted of prohibition of illegal gambling business and sentenced to 2 years of probation.
Robert Primm, 71, of Fort Worth, was convicted of a violation of willful failure to file a tax return and sentenced to 6 months of probation.
Charles Albert Brawner, 66, of McKinney, Texas, was convicted of engaging in monetary transactions in property derived from illegal gambling and sentenced to 5 years of probation.
Adam John Brady, 36, of Irving, Texas, was convicted of prohibition of illegal gambling business and sentenced to 2 years of probation.
William Craig Robertson, 42, of Rockwall, Texas, was convicted of prohibition of illegal gambling business and sentenced to 3 years of probation.
Thomas Applegate, 45, of Carrollton, Texas pleaded guilty to prohibition of illegal gambling business and is awaiting sentencing.
William Michael Christopher, 56, of Fort Worth, pleaded guilty to prohibition of illegal gambling business and is awaiting sentencing.
Larry Dean Coralli, 78, of Addison, Texas, pleaded guilty to prohibition of illegal gambling business and is awaiting sentencing.
Brent Lee Coralli, 48, of Plano, Texas, pleaded guilty to prohibition of illegal gambling business and is awaiting sentencing.
Robert Roy Hodges, 71, of Dallas, pleaded guilty to prohibition of illegal gambling business and is awaiting sentencing.
Gregg Richard Merkow, 49, of Plano, Texas, pleaded guilty to prohibition of illegal gambling business and is awaiting sentencing.
“Taking away the assets from these illegal organizations hits criminals where it hurts the most – it deprives them of their profits,” said Madie Branch, Acting Special Agent in Charge of IRS Criminal Investigation. “Today, we are transferring those seized profits from the criminals and giving them back to the communities.”
This case was prosecuted by Assistant U. S. Attorney Milton A. Stover and the investigation was led by the Internal Revenue Service Criminal Investigation and Plano Police Department. Additional agencies that assisted in the investigation and will be receiving proceeds at a later date include: Dallas Police Department, Denton County District Attorney’s Office, Flower Mound Police Department, Fort Worth Police Department, Arlington Police Department, Midlothian Police Department, Desoto Police Department, and Southlake Police Department.Leader of Drug and Money Laundering Conspiracy Receives 20 Years in Federal PrisonRead the Press Release
BOSTON – The leader of an organized crime group was sentenced to 20 years in federal prison for drug trafficking and money laundering after a multi-year FBI task force investigation into illegal activity in Boston’s Chinatown.
John Willis, 42, of Dorchester, also known by his Chinese nickname “Bac Guai John” (White Devil John), was sentenced by United States District Court Judge Joseph L. Tauro. He pleaded guilty in March to conspiracy to distribute oxycodone and money laundering conspiracy. Judge Tauro also imposed a criminal forfeiture money judgment of $2 million. Willis, along with 12 others, was first charged in 2011 for leading an organization which spanned Massachusetts, Florida, New York, Rhode Island, South Carolina and elsewhere. The organization trafficked hundreds of thousands of oxycodone pills and generated over $4 million in proceeds.
The FBI’s Organized Crime Task Force led a long-term investigation into drug-trafficking, illegal gambling, extortion, prostitution, and other criminal activity in Boston’s Chinatown and elsewhere. The investigation included a seven month, court-authorized wire surveillance of cell phones, including the phones of five of the defendants associated with the conspiracy. The investigation has resulted in the seizure of over $480,000 in cash, a 38-foot speed boat, numerous luxury vehicles, 13 firearms and approximately 12,000 oxycodone pills. Investigators also uncovered extensive evidence of illegal gambling and prostitution as well as the use of extortionate threats to collect loans to gamblers and others.
“Twenty years in federal prison is well-deserved for Mr. Willis, a career criminal and the mastermind behind this organization,” said U.S. Attorney Carmen M. Ortiz. “Not only did this investigation expose a world of illegal gambling, prostitution, and extortion, but also revealed a significant Oxycodone distribution operation. This case significantly disrupted the flow of this highly-addictive, dangerous heroin substitute which has been responsible for numerous deaths in Massachusetts.”
“Mr. Willis and his associates are an example of the opportunistic nature of organized crime groups whose members share a common bond of victimizing their communities through drug dealing, illegal gambling, extortion and exploitation of women in their quest for illegal profits,” said Vincent Lisi, Special Agent in Charge of the FBI’s Boston Division. “The methodical nature and duration of this investigation reflects the focus of the Boston Organized Crime Task Force, which is composed of the Massachusetts State Police, Medford, Boston, and Quincy Police Departments, Massachusetts Department of Corrections and IRS-CID, to secure justice for the victims and to make the community safer.”
The following were also convicted of the drug-trafficking conspiracy and, in the cases of some defendants, money laundering conspiracy: Kevin Baranowski, 41, of Boston, sentenced to 80 months; Peter Melendez, 50, of Sunrise, Fla., sentenced to 160 months; Colby Deering, 41, of Quincy, sentenced to 60 months; Brian Bowes, 42, of Sunrise, Fla., sentenced to 57 months. Bridget Welty, 40, of Boston, was convicted of structuring, and was sentenced to a year of supervised release. Anh Nguyen, 28, of Boston, was convicted of witness tampering, and sentenced to a year of probation. Brant Welty, 39, of Boston, and Aibun Eng, 38, of Quincy, both convicted of drug conspiracy, are scheduled to be sentenced on Sept. 18. Michael Clemente, 29, of Sunrise, Fla., also convicted of drug conspiracy, is scheduled for sentencing on Oct. 1.
Willis has a long history of involvement in organized crime. He was involved with several others who were charged in this investigation. In one case, the following defendants were convicted of operating an illegal gambling business, which had been based at 17-23 Beach Street in Chinatown since 2010. Minh Cam Luong, a/k/a Ming Jai, 46, Hin Pau, 45, and Judy Huyen Truong, 41, of Quincy; Jian Ming Chen, 38, of Brighton; Elburke Lamson, 47, of Chelsea; and Tan Ngo, 54, of Waltham. Luong and Pau also were convicted of conspiring to use and/or using extortionate means, including threats or actual use of violence, to collect debts, including debts owed to the illegal gambling business.
Luong, was sentenced to 84 months; Pau, 96 months; Chen, one year and one day; Lamson, six months; Ngo,18 months; and Truong, time served and seven months supervised release. Finally, Chien Van Tran, 43, of Malden, whose case is pending, is charged with operating an illegal gambling business and extortion conspiracy.
According to an FBI affidavit filed with the court, Luong and Ngo were both members of Chinatown’s Ping On gang in the late 1980s and early 1990s, when the Ping On gang was vying for control of crime in Chinatown. Both were convicted and have served federal prison sentences on charges including heroin trafficking. Willis, also involved in the Ping On gang, was a follower of Ngo.
In another case arising from this investigation, Wei Xing Chen, 50, of Cambridge, was convicted of possession with intent to distribute benzylpiperazine (BZP), also known as ecstasy, and conspiracy to distribute BZP. In addition, Chen and Xiaohong Xue, 41, of Cambridge, were convicted of conspiring to induce travel to engage in prostitution. Chen also was convicted of money laundering conspiracy. Chen, who operated brothels in Cambridge and Boston, was sentenced to 70 months while Xue was sentenced to two years of probation, including six months of home detention.
Willis and several of his co-defendants frequented Chen’s brothels and Luong’s gambling den. Employees of Luong’s gambling business frequented Chen’s brothels. Some of Luong’s employees associated with Willis. Willis also served as an enforcer for Chen.
In a final case arising from this investigation, brothers Stanley Gonsalves, 34, of Sandwich, and Joshua Gonsalves, 33, of Dennisport, have been charged with distribution and conspiracy to possess with intent to distribute oxycodone. Both defendants are detained pending trial.
U.S. Attorney Ortiz and FBI Special Agent in Charge Lisi made the announcement today. The case was investigated by the FBI’s Organized Crime Task Force which includes IRS Criminal Investigation, Massachusetts State Police, Massachusetts Department of Correction, and Quincy, Medford and Boston Police Departments. Assistance was also received from the DEA, ICE Homeland Security Investigations, Cambridge Police Department, New York City Police Department, Broward County (Fla.) Sheriff’s Office and the Ridgeland and Dillon Police Departments in South Carolina. The case was prosecuted by Assistant U.S. Attorneys Timothy E. Moran and Richard L. Hoffman of Ortiz's Strike Force Unit.
Kentucky Resident Charged with Tax Evasion and Other Tax Fraud ChargesRead the Press Release
WASHINGTON, DC - Kathryn Keneally, Assistant Attorney General of the Justice Department’s Tax Division, and Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, jointly announced today that James S. Faller II, of Russell Springs, KY., was indicted by a federal grand jury in Bowling Green, KY. Faller, a consultant and private investigator, is charged in an eleven count indictment with obstructing the internal revenue laws, evading his individual income taxes, making and subscribing to a false form that he filed with the Internal Revenue Service (IRS) and failing to file his individual income tax returns.
The indictment, returned on Wednesday, alleges that Faller obstructed the IRS’s ability to collect payment of a substantial penalty he owed to the government and the IRS’s ability to identify his income from 2006 through 2009. According to the indictment, Faller evaded the payment of a $216,000 penalty related to unpaid employment taxes of Call Center Communications Inc., of which Faller was the president. In addition, Faller was charged with evading his individual income taxes from 2006 through 2009. He allegedly failed to report more than $960,000 of income during this four-year period and committed various affirmative acts of evasion.
Faller faces a maximum punishment of three years in prison for the charge of obstructing the internal revenue laws; five years for each count of evading his individual income taxes; three years for making and subscribing to a false form that he filed with the IRS; and one year for each count of failing to file his individual income tax returns. He faces a maximum fine of $100,000 on each count of failing to file his income tax returns and $250,000 for each of the other counts. An indictment merely alleges that a crime has been committed, and a defendant is presumed innocent until proven guilty beyond a reasonable doubt.
The case resulted from an investigation by special agents of the IRS - Criminal Investigation. Tax Division Trial Attorney Thomas Voracek and Assistant U.S. Attorney Lee Gentry are prosecuting the case.
Justice Department Files Lawsuit in Delaware Against Regal Contractors, LLC, Et Al., to Enforce the Employment Rights of Air Force Reserve MemberRead the Press Release
WILMINGTON, Del. — The Justice Department and U.S. Attorney for the District of Delaware Charles M. Oberly III announced today the filing of a lawsuit alleging that Regal Contractors LLC, Regal Builders LLC and Noble Pond Homes willfully violated the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) by terminating U.S. Air Force Reserve Member Lon Fluman following his return from required military training with his reserve unit.
Fluman is a Senior Airman with the U.S. Air Force Reserve serving with the 712th Aircraft Maintenance Squadron at Dover Air Force Base. According to the complaint, filed in the U.S. District Court for Delaware, Fluman was scheduled for reserve military duty to begin on Sept. 3, 2012 but was rescheduled on short notice to start one day later. Subsequently, Fluman served weekend reserve duty in early December of 2012. Following his second duty, the defendants terminated Fluman from his position as a maintenance technician. Although Fluman satisfied USERRA’s notification requirements before departing for his military leaves, according to the complaint, the defendants terminated Fluman anyway, claiming the notice provided was not sufficient.
USERRA explicitly protects the rights of members of the uniformed services to retain their employment following absences due to military service obligations. “Congress enacted USERRA to protect our men and women in uniform from experiencing this kind of injustice,” said Jocelyn Samuels, Acting Assistant Attorney General for the Civil Rights Division. “The Justice Department is committed to vigorously enforcing federal laws that protect the employment rights of our servicemembers.”
“Members of the Air Force Reserve sacrifice time away from their jobs to serve their country,” said U.S. Attorney Oberly. “USERRA ensures that they are not discriminated against and that their employment rights are protected.”
This case stems from a referral by the U.S. Department of Labor following an investigation by the Department of Labor’s Veterans’ Employment and Training Service. The case is being handled by the Civil Rights Division and the U.S. Attorney’s Office for the District of Delaware, who work collaboratively with the Department of Labor to protect the jobs and benefits of National Guard and Reserve servicemembers upon their return to civilian life.
Additional information about USERRA can be found on the Justice Department website: www.servicemembers.gov and www.usdoj.gov/crt/emp, as well as on the Labor Department’s website at www.dol.gov/vets/programs/userra/main.htm.
Fluman Complaint
Judge Sentences Bucketlist Bandit to 135 Months in PrisonRead the Press Release
ERIE, Pa. - A former resident of Pensacola, Florida, has been sentenced in federal court to 135 months in prison and ordered to make restitution to the banks involved on his conviction of bank robbery, United States Attorney David J. Hickton announced today.
Chief United States District Judge Sean M. McLaughlin imposed the sentence on Michael Eugene Brewster, 54.
According to information presented to the court, between June 21, 2012 and September 10, 2012, Brewster robbed eleven banks across the nation. In the course of the bank robbery spree Brewster used a similar method of operation and entered each bank, without being disguised, wore similar clothes, carried a dark leather notebook, presented demand notes containing similar threatening language to each of the victim tellers, and left the scene driving a 2009 black SUV, which Brewster had stolen in Pensacola, Florida. In his last bank robbery in Erie, Pennsylvania, on September 10, 2012, Brewster entered the Huntington National Bank, located at 2185 West 12th Street and presented a demand note, claiming that he had a gun and that the teller had one minute to comply. Brewster then claimed to the teller that he had cancer and did not care what happened. Brewster obtained bank proceeds and fled the area in a black SUV. Bank surveillance images and images from area surveillance cameras clearly depicted Brewster and the vehicle he used. Comparing the Erie Huntington Bank surveillance photographs with those from the ten other bank robberies that had occurred throughout the United States confirmed that each robbery had been committed by the same person. On September 12, 2012, the FBI received a tip that the bank robber depicted in the surveillance photographs was Brewster. A review of Brewster's Florida driver's license confirmed Brewster's identity as the bank robber. In addition, evidence disclosed that an arrest warrant had been issued for Brewster alleging that he had stolen a black Chevy Captiva SUV in Pensacola, Florida on June 11, 2012. Once Brewster's identity had been established in the Erie, Pennsylvania robbery, the FBI and law enforcement partners in the jurisdictions of the other ten bank robberies confirmed his identity in those cases as well.
Brewster entered the Chase Bank at 5250 Wadsworth Boulevard in Arvada, Colorado on June 21, 2012, the Chase Bank at 1484 South Milton Road in Flagstaff, Arizona on June 27, 2012; and the Ireland Bank at 486 Yellowstone Avenue in Pocatello, Idaho on July 6, 2012, and obtained federally insured funds after presented a threatening note demanding money. In Roy, Utah on July 6, 2012, Brewster entered the Wells Fargo Bank located at 5603 South 1900 West, and obtained money after presenting a threatening demand note claiming that he had only four months to live. In Winston-Salem, North Carolina on July 20, 1012, Brewster entered a Bank of America at 1209
Silas Creek Parkway and presented a threatening demand note indicating that he had nothing to lose and threatening to come back after the teller if any silent alarm was activated. Brewster obtained no money from the Wells Fargo Bank. Then, at the Regions Bank at 360 West State Road 436 in Altamonte Springs, Florida on July 27, 2012, the BB&T bank at 2120 Gunbarrel Road in Chattanooga, Tennessee on August 3, 2012; the PNC bank at 2217 West Market Street in Bloomington, Illinois on August 17, 2012; the Lamdmark bank at 202 North Stadium Boulevard in Colombia, Missouri on August 29, 2012; and the Lindell bank at 4521 Highway K in O'Fallon, Missouri on August 30, 2012, Brewster obtained money after presenting threatening demand notes, including a claim that he was armed with a gun.On September 13, 2012, a police officer with the Roland Police Department in Roland, Oklahoma conducted a traffic stop of a black, 2009, Chevy Captiva vehicle and identified Brewster as the driver and sole occupant. A fake Utah license plate had been affixed to the vehicle. A computer check of Brewster's name revealed Brewster's outstanding arrest warrant in Pensacola, Florida for allegedly stealing the Chevy Captiva vehicle. Brewster was then taken into custody and was found to be in possession of money from the Erie, Pennsylvania Huntington bank robbery. Among other items located in the Captiva vehicle was a handgun, money from the Erie, Pennsylvania Huntington Bank robbery, the clothing worn by Brewster in the bank robberies as depicted in the surveillance photographs, and the leather notebook carried by Brewster into the banks he robbed. Brewster was then arrested on the Erie, Pennsylvania arrest warrant and he was returned to the Western District of Pennsylvania to face federal prosecution.
Prior to imposing sentence, Judge McLaughlin commented on the fact that Brewster's claim of a terminal disease was untrue and stated that, "The impetus for the crimes was simply greed, not grief."
Assistant United States Attorney Marshall J. Piccinini prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Federal Bureau of Investigation in each of the jurisdictions, the Erie Bureau of Police, the Arvada Police Department, the Flagstaff Police Department, the Pocatello Police Department, the Roy City Police Department, the Winston-Salem Police Department, the Altamonte Springs Police Department, the Chattanooga Police Department, the Bloomington Police Department, the Columbia Police Department, the O'Fallon Police Department and the Roland Police Department for the investigations leading to the successful prosecution of Brewster.
Iranian National Sentenced in Manhattan Federal Court to 30 Months in Prison for Conspiring to Export Satellite Technology from the United States to IranRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, George Venizelos, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), James T. Hayes, Jr., the Special Agent-in-Charge of the New York Field Office of U.S. Immigration and Customs Enforcement’s (“ICE”) Homeland Security Investigations (“HSI”), Kenneth Siegler, the Resident Agent-in-Charge of the New York Office of the Defense Criminal Investigative Service (“DCIS”), Sidney Simon, the Special Agent-in-Charge of the U.S. Commerce Department, Bureau of Industry and Security’s Office of Export Enforcement New York Field Office (“OEE”), and Robert E. Perez, Director of New York Field Operations for U. S. Customs and Border Protection (CBP), announced that SEYED AMIN GHORASHI SARVESTANI, an Iranian national, was sentenced yesterday in Manhattan federal court to 30 months in prison for conspiring to export goods, including satellite technology and hardware, from the United States to Iran, in violation the International Emergency Economic Powers Act. GHORASHI was arrested on October 3, 2012, and pled guilty on May 8, 2013 before U.S. District Judge Paul G. Gardephe, who also imposed yesterday’s sentence.
According to the Complaint, the Information to which GHORASHI pled guilty, and statements made during the plea proceeding:
GHORASHI, an Iranian national, was an owner of, and served as a managing director and director of, two related companies based in the United Arab Emirates. In that capacity, he worked with others to export electronic equipment used for satellite communications and data transfer, as well as other goods, from the United States to Iran, without the requisite approval from the U.S. Department of Treasury, Office of Foreign Assets Control.
GHORASHI and others conspired to acquire satellite technology and hardware from a supplier based in the United States, for shipment to Iran. To conceal the true destination of the goods from the U.S. supplier, GHORASHI and his co-conspirators arranged for the items to be shipped first to the United Arab Emirates and subsequently shipped to Iran.
Mr. Bharara praised the investigative work of the New York Offices of the FBI, ICE-HSI, DCIS, and OEE. Mr. Bharara also thanked CBP for their assistance.
In addition to the prison term, GHORASHI, 46, was ordered to pay a $100,000 fine and to forfeit $54,000. Judge Gardephe also ordered him to pay a $100 special assessment.
This case is being handled by the Office’s Terrorism and International Narcotics Unit. Assistant U.S. Attorney Rachel P. Kovner is in charge of the prosecution.
Hunting and Fishing Guide Guilty of Federal Wildlife ViolationRead the Press Release
Department of Justice
Office of Public Affairs“Gar Guy” admits that he transported alligator killed in violation of state and federal law
BEAUMONT, Texas – A 49-year-old Kennard, Texas, hunting and fishing guide has pleaded guilty to transporting an alligator that he knew had been shot in violation of state and federal wildlife laws, announced U.S. Attorney John M. Bales today.
Steve Barclay, 49, pleaded guilty on Aug. 13, 2013, before U.S. Magistrate Keith F. Giblin to the felony offense of transporting wildlife taken in violation of federal law. Barclay admitted that on May 8th, 16th, and 20th of 2008 he witnessed John A. McCall, a client for whom he was providing guide services, shoot and kill a total of three alligators even though Barclay knew that Texas law limits hunters to one alligator per hunter per season. Barclay admitted that he transported the alligator killed on May 20th in Leon County to Sportsman’s Memory taxidermy shop in Grapeland, Texas.
The Endangered Species Act prohibits the taking of any threatened species of fish or wildlife in violation of any federal or state regulation pertaining to such species. Alligators are listed as a threatened species pursuant to the Endangered Species Act. The Lacy Act prohibits the transport, receipt, or acquisition of any wildlife taken, possessed, or transported in violation of any law, treaty, or regulation of the United States.
Although Barclay is facing up to 5 years in federal prison and a $250,000.00 fine, his plea agreement with the government, subject to approval by the court, calls for a $5,000 fine and three years’ probation.This case was investigated by the U.S. Fish and Wildlife Service, Office of Law Enforcement, Houston, and the Texas Parks and Wildlife Department, Criminal Investigations Division, and prosecuted by Assistant U.S. Attorney Jim Noble.
The mission of the U.S. Fish and Wildlife Service is working with others to conserve, protect, and enhance fish, wildlife, plants, and their habitats for the continuing benefit of the American people. It is both a leader and trusted partner in fish and wildlife conservation, known for its scientific excellence, stewardship of lands and natural resources, dedicated professionals, and commitment to public service. For more information on its work and the people who make it happen, visit www.fws.gov. Connect with its Facebook page at www.facebook.com/usfws, follow its tweets at www.twitter.com/usfwshq, watch its YouTube Channel at https://www.youtube.com/usfws and download photos from its Flickr page at http://www.flickr.com/photos/usfwshq.
Heroin and Methamphetamine Trafficking Group IndictedRead the Press Release
LAREDO, Texas – Eleven members of a heroin and methamphetamine trafficking group have been arrested throughout the Southern District of Texas and elsewhere for their involvement in a large-scale drug conspiracy, United States Attorney Kenneth Magidson announced today.
The indictment, returned under seal July 23, 2013, alleges the group was responsible for smuggling heroin and methamphetamine from Mexico into the United States at ports of entry from San Diego, Calif., to Brownsville. Authorities allegedly intercepted shipments of drugs totaling 131 kilograms of heroin and 31 kilograms of methamphetamine. The drugs were transported utilizing private vehicles and were seized at the ports of entry or border checkpoints, according to the indictment.
Arrested today were Luis Daniel Aguilar, 22, Eduardo Aguilar-Vera, 37, Juan Trevino, 23, and Jose Librado Sanchez-Guerra, 29, all of Laredo; Edgar Loera, 30, and Antonio De Jesus Mejia-Contreras, 23, both of Mira Loma, Calif.; Clementina Aguilar-Castillo, 29, and Ericka Pina, 37, both of Corpus Christi; Eduardo Segura, 22, of Tucson, Ariz.; Leticia Corona, 37, of Dallas; and Miguel Angel Vives-Macias, 34, of San Antonio. The indictment remains as to those charged but not as yet in custody. Some will or have already made their initial appearances in federal court in the jurisdiction where they were arrested. Those taken into custody in Laredo are expected to make their initial appearances tomorrow morning.
All defendants are charged with conspiracy to import and possession with intent to distribute controlled substances and face up to 10 years in federal prison and a possible $10 million fine, upon conviction. Aguilar, Loera, Aguilar-Vera and Trevino are also charged with conspiracy to launder monetary instruments. If convicted, they face a sentence of up to 20 years and a maximum $500,000 fine. The substantive counts of heroin and/or methamphetamine trafficking carry varying terms of federal imprisonment up to a possibility of life depending upon the amount of drugs involved.
The Organized Crime Drug Enforcement Task Force investigation was conducted by Homeland Security Investigations, Drug Enforcement Administration and the Texas Department of Public Safety. This case is being prosecuted by Assistant United States Attorney José Angel Moreno.
An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.Government Contractor in Huntsville Pleads Guilty in $14 Million Fraud SchemeRead the Press Release
BIRMINGHAM – A federal government contractor in Huntsville pleaded guilty today in federal court to charges related to a scheme to defraud the government of nearly $14 million in contract payments over six years.JOSEPH SHANE TERRY, 40, of Meridianville, Ala., and sole owner of Government Technical Services, entered his plea before U.S. District Judge R. David Proctor to charges of wire fraud, false statements to the Small Business Administration, false statements on loan applications, and money laundering. As part of his plea agreement, Terry is to forfeit a minimum of $1 million to the government as proceeds of illegal activity. No sentencing date has been set.
U.S. Attorney Joyce White Vance; Internal Revenue Service, Criminal Investigation, Special Agent in Charge Veronica Hyman-Pillot; Department of the Army, Criminal Investigation Command Special Agent in Charge James Wallis; Department of Defense, Defense Criminal Investigative Service Special Agent in Charge John F. Khin; and Small Business Administration Inspector General Peggy E. Gustafson announced the plea.
"This case was the result of a four-year investigation involving multiple federal investigative agencies," Vance said. "Fraud against the government costs every taxpayer and harms communities, such as Huntsville, whose economy relies heavily on the defense industry. We are committed to investigating and prosecuting fraud by defense contractors against the United States," she said.
According to Terry's plea agreement, he carried out his scheme to defraud the government as follows:
In 2003, Terry applied for and obtained a small disadvantaged or minority-owned business status from the SBA by submitting fraudulent tax returns. In order to maintain that status, Terry also submitted false tax returns to the SBA for each year from 2004 through 2008. Having the special status with the SBA enabled GTS to bid on and win government contracts specifically set aside for small disadvantaged businesses.
Terry submitted personal and corporate returns to the SBA for the tax years 2002 through 2007 to show he was current on filing his taxes, but he had never filed the returns with the IRS.
Terry's wire fraud scheme culminated in GTS obtaining a $961,551 contract in September 2006 to install metal roofing on three buildings at Fort Polk, La. In order to obtain authorization to start work on this contract, GTS submitted forged performance and payment bonds and a power of attorney from a Mississippi bond company and its parent surety company in Louisiana. GTS won the contract, but was terminated in April 2008 for failing to perform the work and for providing fraudulent bonds. In all, Terry employed the scheme to fraudulently obtain more than $14 million in government contracts.
Terry pleaded guilty to five wire fraud counts that involved separate electronic fund transfers totaling more than $500,000. The money was transferred from the Defense Finance and Accounting Service in Indiana, an agency of the Department of Defense, to a bank account of Terry's in Huntsville in 2007. The five transfers were all payments to GTS on the Fort Polk roofing contract.
Terry also pleaded guilty to three counts of mortgage fraud in the Madison County area by inducing banks to make mortgage loans totaling $480,000 based on his false tax returns and other false financial documents.
The money laundering that Terry pleaded guilty to is related to one of the false statements he made on a loan application. Terry admitted that in 2008 he induced his then-girlfriend to apply for a loan and supplied documents falsely claiming that GTS employed her. Terry admitted to money laundering for using the fraudulently obtained loan proceeds for his own purposes.
The normal statute of limitations on fraud against the United States is five years. However, certain charges in this indictment were prosecuted under the Wartime Suspension of Limitations Act, which operates to suspend the statute of limitations for crimes involving fraud against the Government during a time when the United States is at war or there is an Authorization for Use of Military Force in effect, such as for Afghanistan and Iraq. This case represents the first time that this suspension statute has been used in this district.
Terry faces a maximum penalty of 30 years in prison and a $1 million fine.
IRS, Criminal Investigations; U.S. Army Criminal Investigation Command; SBA, Office of Inspector General; and Department of Defense, Defense Criminal Investigative Service, investigated the case. Assistant U.S. Attorneys David Estes and Jennifer Murnahan are prosecuting the case.
Fourteen-year Sentence for Darke County Man Convicted of Receipt and Possession of Child PornographyRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
Richard Trepanier, 40, of Gettysburg, Ohio was sentenced to 168 months in prison for receiving and possessing child pornography in a case that began with an undercover investigation by Australian law enforcement.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, and Kevin R. Cornelius, Special Agent in Charge, Federal Bureau of Investigation (FBI), announced the sentence handed down today by U.S. District Judge Thomas M. Rose.
Following a six-day trial, a jury convicted Trepanier on April 16, 2013 of one count of receipt of child pornography and one count of possession of child pornography.
Trepanier, using the name “Wingman66”, contacted an Australian Federal Police undercover officer patrolling the internet in February 2008 and offered him images of child pornography. The Australian authorities tracked the user name to Trepanier and sent the information to the FBI’s office in Cincinnati.
FBI agents interviewed Trepanier who consented to a search of his computer by the Miami Valley Regional Computer Forensics Laboratory. Their analysis identified approximately 56 images of child pornography and evidence that Trepanier was trading child pornography.
“This case demonstrates the international cooperation that is necessary to protect children from exploitation,” U.S. Attorney Stewart said.
“These series [of images] were created not only within the United States (Washington, North Carolina, Florida, and Georgia), but they were also created abroad (France, England, Denmark, Germany, Paraguay, and Belgium),” Dayton Branch Chief Laura Clemmens and Assistant U.S. Attorney Christy Muncy wrote in a memorandum filed with the court prior to sentencing. “This simple fact highlights the heartbreaking reality of the child pornography industry: it knows no borders.”
Trepanier was also sentenced to serve ten years under court supervision after completing his prison sentence. While under court supervision, he must register as a sex offender anywhere he lives, works or goes to school.
This case was brought as part of Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the U.S. Attorneys Offices, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov/.
U.S. Attorney Stewart commended the cooperative investigation by the agencies involved, as well as Clemmens and Muncy, who prosecuted the case.
Former Top Officers of Vitesse Semiconductor Corporation Plead Guilty in Manhattan Federal Court to Conspiring to Obstruct an Impending Federal InvestigationRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that LOUIS TOMASETTA, the founder and former CEO of Vitesse Semiconductor Corporation (“Vitesse”), a publicly-traded company, and EUGENE HOVANEC, the former Chief Financial Officer and Vice President of Vitesse, pled guilty in Manhattan federal court to conspiring to destroy, alter, or falsify records relating to Vitesse’s April and October 2001 stock option grants with the intent to obstruct a contemplated investigation by the U.S. Securities and Exchange Commission (“SEC”). TOMASETTA and HOVANEC pled guilty before U.S. District Judge Jed S. Rakoff to a one-count Superseding Information, which was filed today.
Manhattan U.S. Attorney Preet Bharara said: “With today’s guilty pleas, Louis Tomasetta and Eugene Hovanec answer as felons for their attempts to use their positions of power to obstruct an investigation they expected the SEC to conduct into their company’s accounting practices. As this case demonstrates, we will not hesitate to reach into corporate board rooms and executives suites to shine a light on corrupt practices.”
According to the Superseding Information, evidence in prior court proceedings, and statements made during today’s guilty plea proceeding:
During 2001 to 2006, Vitesse’s Board of Directors, specifically the Compensation Committee of the Board (the “Compensation Committee”), administered shareholder approved stock options plans (the “Plans”) and had the authority under the Plans to grant stock option awards. Vitesse’s public filings for the 2001 to 2005 year-end period indicated that the exercise price of all stock options was at least equal to the fair market value of Vitesse’s stock price on the date of the grant. During this time period, TOMASETTA, HOVANEC, and others, generally initiated and oversaw the option grant process.
Controversy Concerning the April and October 2001 Option Grants
In November 2005, Yatin Mody (“Mody”), then Vitesse’s Chief Financial Officer, contacted Vitesse’s then-outside law firm (“Law Firm-1”) concerning a press inquiry about Vitesse’s stock option practices. After reviewing documents related to stock option grants in April 2001 and October 2001, Law Firm-1 advised Mody and TOMASETTA that it had concerns about those option grants, and specifically concern about whether Vitesse had properly accounted for these option grants. For example, Vitesse’s April 12, 2001 Compensation Committee meeting minutes memorialized option grants with an exercise price at the April 6, 2001 closing price of Vitesse’s stock, which was lower than the April 12 closing price. These minutes raised a question about whether the options were in fact granted on the day of the meeting (April 12) or on the earlier date (April 6), and potentially affected the accounting treatment of the options in a way that would require adjustments to Vitesse’s financial reports. Similarly, the Compensation Committee meeting minutes from October 25, 2001 memorialized option grants with an exercise price at the October 2, 2001 closing price, which was lower than the October 25 closing price.
In late November 2005, after discussions with TOMASETTA and HOVANEC, Mody created minutes of the Compensation Committee meetings allegedly held on April 6, 2001 and October 2, 2001. Mody then provided copies of these minutes to Law Firm-1, and specifically advised Law Firm-1 that they were prepared in November 2005 to reflect what had actually occurred at those meetings.
Tomasetta and Hovanec Alter and Fabricate Records Regarding the 2001 Option Grants
On March 18, 2006, the Wall Street Journal published an article that raised questions about stock option practices at various companies, including Vitesse. Following the article, Law Firm-1 raised concerns to Vitesse’s directors and management, including TOMASETTA and HOVANEC, about Vitesse’s option grants and specifically, about the fact that Compensation Committee minutes had been created years after the fact. Law Firm-1 informed TOMASETTA and HOVANEC that because of the Wall Street Journal article, there was a significant possibility of an SEC investigation into Vitesse’s option practices and disclosures.
At a meeting on April 11, 2006, Law Firm-1 also advised Vitesse’s directors and management, including TOMASETTA and HOVANEC, that Mody’s after-the-fact creation of Compensation Committee meeting minutes raised questions about whether the meetings had actually occurred. That same day, Vitesse’s Audit Committee retained a law firm (“Law Firm-2”) to conduct an independent investigation into Vitesse’s stock option grants. Law Firm-2 requested that Vitesse provide it with access to the computer used by the Vitesse employee who was responsible for actually typing the minutes of the Compensation Committee meetings when they occurred (the “Assistant’s Computer”).
With an understanding that Law Firm-2 would access the Assistant’s Computer, on April 12, 2006, TOMASETTA, HOVANEC, and Mody created documents that purported to be minutes of meetings of Vitesse’s Compensation Committee on April 6, 2001 and October 2, 2001, authorizing option grants at those meetings. After creating these documents, they transferred electronic copies of the documents containing the two recently created sets of minutes to the Assistant’s Computer and, in an effort to make it appear that the minutes were created at an earlier time, TOMASETTA, HOVANEC, and Mody reset the computer’s internal clock to backdate the creation date of these purported minutes. TOMASETTA and HOVANEC engaged in this action to obstruct Law Firm-2’s internal investigation, knowing that there was likely to be an SEC investigation of Vitesse’s option grant practices and disclosures.
TOMASETTA, 64, Ojai, California, and HOVANEC, 61, Westlake Village, California, each pled guilty to one count of conspiracy to destroy, alter, or falsify records in contemplation of a federal investigation, which carries a maximum term of five years in prison.
Yatin Mody, 50, of Westlake Village, California, pled guilty in December 2010, before U.S. District Judge John G. Koeltl, to an Information charging him with securities fraud, making false entries in the financial records of a corporation, and conspiracy pursuant to a cooperation agreement with the Government. He awaits sentencing.
Mr. Bharara praised the investigative work of the U.S. Postal Inspection Service and the Criminal Investigators of the U.S. Attorney’s Office, which jointly investigated this case. He also thanked the SEC for its assistance.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force, on which U.S. Attorney Bharara serves as a Co-Chair of the Securities and Commodities Fraud Working Group. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.StopFraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys John J. O’Donnell, Katherine R. Goldstein and David I. Miller are in charge of the prosecution.
U.S. v. Eugene Hovanec & Louis Tomasetta S2 Superseding Information
Former Studio Assistant to Jasper Johns Charged in Manhattan Federal Court with $6.5 Million Scheme to Sell Stolen Johns WorksRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and George Venizelos, the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), today announced the unsealing of an Indictment charging JAMES MEYER, a former assistant to artist Jasper Johns, with selling 22 works that he stole from Johns’ studio in Sharon, Connecticut. MEYER was arrested yesterday morning at his home in Salisbury, Connecticut, and appeared in federal court in Hartford that afternoon.
Manhattan U.S. Attorney Preet Bharara said: “As alleged, James Meyer is the latest in a long line of thieves who sought to make millions through a fraud on the art world. Meyer, a former assistant to artist Jasper Johns, allegedly stole and resold a number of pieces he was charged with maintaining. His arrest underscores our commitment to exposing deception in this lucrative industry and holding fraudsters to account.”
FBI Assistant Director-in-Charge George Venizelos said: “As alleged, James Meyer exploited his position of trust to steal repeatedly from his long-time employer. That his employer is a renowned American artist only made the crime more lucrative. To convert the artworks to cash, Meyer allegedly engaged in a serial scheme to deceive the buyers of the art and the gallery through which they bought it.”
According to the allegations in the Indictment unsealed yesterday in Manhattan federal court:
JAMES MEYER was a studio assistant for Johns for over 25 years, and was responsible for, among other things, maintaining a studio file drawer containing pieces of art that were not yet completed by Johns and not authorized by Johns to be placed in the art market.
Between September 2006 and February 2012, MEYER removed 22 individual pieces of art from the studio file drawer he was responsible for maintaining, and from elsewhere in Johns’ studio, and transported those pieces from the studio in Sharon to an art gallery located in Manhattan for the purpose of selling those works without the knowledge or permission of Johns. MEYER represented both to the owner of the gallery (the “Gallery Owner”) and to potential purchasers that these pieces had been given to him as gifts by Johns when, in fact, that was not true.
As part of his scheme to defraud, MEYER provided sworn, notarized certifications both to the Gallery Owner and to buyers stating that each piece was an authentic Johns work, that the art had been given to him directly by Johns, that he was the rightful owner of the piece, and that he had the right to sell that particular work. In addition, MEYER conditioned the sale of each of these works on the signed agreement by the purchaser that the art would be kept private for at least eight years, during which time the piece would not be loaned, exhibited, or re-sold.
MEYER also created fictitious inventory numbers for these pieces to give the impression that they were finished works that were authorized by Johns to be sold in the art market. Additionally, and to facilitate certain sales, MEYER created fake pages that he thereafter inserted into a ledger book of registered pieces of art maintained at Johns’ studio, and which he subsequently photographed, to give additional assurances to prospective buyers about the provenance, or history of ownership, of a particular piece.
During the course of his almost six-year scheme, the Gallery Owner sold 22 works of art on MEYER’s behalf for a total of approximately $6.5 million, of which $3.4 million was remitted directly to MEYER in sales proceeds.
MEYER, 51, of Salisbury, Connecticut, is charged with one count of interstate transportation of stolen property, which carries a maximum sentence of 10 years in prison, and one count of wire fraud, which carries a maximum sentence of 20 years in prison. U.S. District Judge Alvin K. Hellerstein is assigned to the case.
Mr. Bharara praised the FBI for its outstanding work in the investigation.
This case is being handled by the Office’s Complex Frauds Unit. Assistant U.S. Attorney Christopher D. Frey is in charge of the prosecution.
The charges contained in the Indictment are merely accusations and the defendant is presumed innocent unless and until proven guilty.
U.S. v. James Meyer Indictment
Former Sales Manager Pleads Guilty in Manhattan Federal Court to Multi-Million Dollar Scheme That Targeted Debt-Ridden ConsumersRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that DENIS KURLYAND, the former Vice President of Sales for Mission Settlement Agency (“Mission”), pled guilty to fraud charges for his role in a multi-million dollar scheme that victimized more than 1,200 debt-ridden individuals across the country. KURLYAND, who was charged in May 2013, pled guilty today in Manhattan federal court before U.S. District Judge Paul G. Gardephe. He is the third defendant to plead guilty in the case.
According to the allegations contained in the Indictment against Mission, KURLYAND, and two other Mission employees and its owner, other documents filed in Manhattan federal court, and statements made at related court proceedings:
Mission offered “debt settlement” services to financially disadvantaged individuals who were struggling or unable to pay their credit card debts. Like other purported debt settlement providers, Mission held itself out as a company that could successfully negotiate to lower the overall debt its customers owed to credit card companies and banks.
The defendants targeted financially disadvantaged individuals known to be struggling to pay credit card debt and reached out to them through telemarketing and mail solicitations. Thereafter, Mission’s sales representatives typically spoke to the prospective customers on the phone, describing Mission’s work and its ability to renegotiate debt.
From 2009 through May 2013, the defendants systematically exploited and defrauded over 1,200 financially disadvantaged individuals across the country who were struggling to pay their credit card debts. They tricked people into paying Mission for purported debt settlement services by lying to prospective customers about the agency’s ability to help settle their debts, the fees that Mission charged, and its purported affiliation with the federal government. In connection with the scheme, Mission received over $6.6 million in fees. For more than 1,200 of its customers, Mission took fees totaling nearly $2.2 million and has never paid a penny to the customers’ creditors.
KURLYAND served as Mission’s Vice President of Sales from 2009 through 2012. In that capacity, he provided instructions to Mission’s sales representatives, who in turn lied to prospective customers about the agency’s fees to induce them to become customers of Mission. KURLYAND also helped arrange for solicitation letters to be sent on Mission’s behalf to prospective customers that falsely suggested that the agency was acting on behalf of or in connection with a federal governmental program. The letter included an image of the Great Seal of the United States and indicated that it was coming from the “Reduction Plan Administrator” of the purported “Office of Disbursement.”
KURLYAND, 30, of Brooklyn, New York, pled guilty to one count of conspiracy to commit mail and wire fraud, one count of mail fraud, and one count of wire fraud. He faces a maximum sentence of 60 years in prison. KURLYAND is scheduled to be sentenced by Judge Gardephe on December 20, 2013 at 2:30 p.m. As part of his guilty plea, KURLYAND agreed to forfeit $2,196,522 to the United States.
Mission and six individuals – including KURLYAND and Mission’s owner, Michael Levitis – were charged in connection with the scheme. Defendants Felix Lemberskiy and Zakhir Shirinov pled guilty to Informations in April 2013 in connection with this case. The charges against the remaining defendants are merely allegations, and they are all presumed innocent unless and until proven guilty.
Mr. Bharara praised the investigative work of the United State Postal Inspection Service. He also thanked the Consumer Financial Protection Bureau for referring this case to this Office and for their assistance in this matter.
The prosecution of this case is being handled by the Office’s Complex Frauds Unit. Assistant United States Attorneys Nicole W. Friedlander and Edward A. Imperatore are in charge of the prosecution. Assistant United States Attorney Carolina A. Fornos of the Office’s Asset Forfeiture Unit is responsible for the forfeiture aspects of the case.
U.S. v. Mission Settlement Agency, et al. Indictment
Former Member of Liberty City Seven Charged in Federal Court for Drug DistributionRead the Press Release
Fort Myers, Florida - Acting United States Attorney A. Lee Bentley, III announces the arrest of Burson J. Augustin (29, Fort Myers) for distribution of cocaine. If convicted, Augustin faces a maximum penalty of 20 years in federal prison and a fine of up to $1million. Augustin was charged by criminal complaint on August 15, 2013.
According to the complaint, on August 7, 2013, Augustin sold approximately 29 grams of cocaine to a confidential informant working with the Lee County Sheriff’s Office for $1,200. The complaint also states that Augustin was previously arrested as a member of the Liberty City Seven, in 2006, for conspiracy and providing material support to terrorism related to a plot to blow up the Sears Tower in Chicago. For that offense, he was convicted and sentenced to six years in federal prison, followed by ten years of supervised release. At the time of this offense, Augustin was on supervised release. He was released from prison on September 21, 2012. A criminal complaint is merely a formal charge that a defendant has committed a violation of the federal criminal laws, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by the Lee County Sheriff's Office and the Federal Bureau of Investigation. It will be prosecuted by Assistant United States Attorney Jeffrey F. Michelland.
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Former Lawyer Sentenced to Prison for Obstruction of JusticeRead the Press Release
Albany, New York – David A. Ehrlich, 38, of Cohoes, was sentenced today to be imprisoned for 12 months and 1 day upon his conviction for obstruction of justice, announced United States Attorney Richard S. Hartunian and Special Agent-in-Charge Andrew W. Vale of the Albany Division of the Federal Bureau of Investigation. Ehrlich, a former lawyer, pled guilty in March to obstructing justice in United States v. Joseph P. Brown, a criminal appeal before the United States Court of Appeals for the Second Circuit. Ehrlich admitted that he was paid $7500 to handle the Brown appeal, but prepared and provided to Brown’s wife a brief Ehrlich falsely represented had been filed, and later prepared and provided to Brown’s wife a document, dated May 13, 2008, that Ehrlich falsely represented to be the written decision of the Second Circuit Court of Appeals denying Brown's appeal.
Because no brief was filed, the Court of Appeals dismissed the appeal. When Brown found out he had been denied his right to pursue an appeal by Ehrlich's conduct, Brown prepared and filed motions for relief. There was litigation in both the U.S. District Court for the Northern District of New York and the Court of Appeals, and Brown was permitted to pursue his appeal. On January 12, 2010, the Court of Appeals actually decided Brown’s appeal, ordering a limited remand to the District Court to strike a special condition of Brown's supervised release, but otherwise affirming Brown's sentence. Meanwhile, the Albany Division of the Federal Bureau of Investigation conducted a thorough investigation into what had happened, revealing that Ehrlich had falsified the Court of Appeals decision and resulting in the charges in this case.
Ehrlich was directed to report on October 1st to the facility designated by the Bureau of Prisons to begin serving his term of imprisonment. When that is completed, Ehrlich will be on supervised release for 1 year. The sentence included restitution in the total amount of $8900, which Ehrlich had provided in advance of sentencing (comprised of the $7500 paid by the Browns and $1400 paid by two other clients whose cases were encompassed by Count 2 of the Indictment). In imposing the sentence, Chief U.S. District Judge Gary L. Sharpe cited the need for deterrence and the importance of maintaining public respect for our system of justice.
On April 22, 2010, Ehrlich was disbarred in New York by the Supreme Court, Appellate Division, Third Department, for professional misconduct, including “attempting to mislead and deceive his clients about the status of their cases and falsifying court documents.” Ehrlich also was disbarred by Florida, Massachusetts, and the U.S. Supreme Court.
First Assistant United States Attorney Grant Jaquith prosecuted the federal criminal case, and said: “The proper functioning of the system of laws that is the cornerstone of our democracy depends on the candor and ethics of our lawyers. Every lawyer knows that no case, client, or fee, no advantage in litigation, and no escape from a mistake or predicament justifies compromising your integrity. David Ehrlich’s falsification of a decision of the Court of Appeals victimized his clients and struck at the heart of the process for the fair administration of justice.” United States Attorney Hartunian thanked the Albany Division of the Federal Bureau of Investigation, the Committee on Professional Standards for the Third Judicial Department of the Appellate Division of the Supreme Court for the State of New York, and The Lawyers’ Fund for Client Protection of the State of New York for their vigilance and outstanding work to address Ehrlich’s conduct and restore fairness for his clients.
FBI Albany Special Agent in Charge Andrew W. Vale said "The FBI will continue to work with the United States Attorney's Office and our local partners to bring justice to those who seek to disregard and disrespect the very system to which they are pledged to honor and advance. Today's sentencing demonstrates that such disrespect of the judicial system will not be tolerated."
Former Carteret High School Vice Principal Sentenced to 37 Months in Prison for Possession of Child PornographyRead the Press Release
TRENTON, N.J. - A Rahway, N.J., man who was the vice principal at Carteret High School was sentenced today to 37 months in prison for possessing child pornography, U.S. Attorney Paul J. Fishman announced.
Nicholas Sysock, 54, previously pleaded guilty before U.S. District Judge Mary L. Cooper to an information charging him with one count of possession of child pornography. Judge Cooper imposed the sentence today in Trenton federal court.
According to documents filed in this case and statements made in court:Between May 2008 and March 2011, Sysock purchased from a company in Canada numerous DVDs that contained video recordings of child pornography. During a search of Sysock’s residence in October 2012, federal investigators found these DVDs and also found printed images featuring naked children. Sysock was arrested the same day. At the time of his arrest, Sysock was the vice principal of Carteret High School.
In addition to the prison term, Judge Cooper sentenced Sysock to five years of supervised release, with monitored computer use, mental health treatment and restrictions on contact with children.
U.S. Attorney Fishman praised inspectors with the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates, for the investigation leading to today’s sentence.
The government is represented by Assistant U.S. Attorney David M. Eskew of the U.S. Attorney’s Office General Crimes Unit in Newark.
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Defense counsel: Carol Gillen Esq., Assistant Federal Public Defender, Newark
Florida Woman Found Guilty in Telemarketing ScamRead the Press Release
Jury Deliberates Less Than One Hour Before Returning Verdict
Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today that a jury sitting in Federal District Court in East St. Louis found Kathryn G. Garten, 51, of Orlando, Florida, guilty of conspiracy to commit mail and wire fraud in connection with a nation-wide telemarketing scheme which defrauded persons throughout the United States and Canada, including victims in seven counties in the Southern District of Illinois.
“I believe the swiftness of this verdict was, in part, due to the outrageous and flagrant nature of the scheme Ms. Garten participated in to bilk consumers out of their hard-earned cash.” said United States Attorney Wigginton. “I will continue to prosecute these cases of scammers preying on consumers, and continue to warn consumers that unsolicited offers for items or services which seem too good to be true should be ignored.”
This prosecution, one of many in the Southern District of Illinois, follows an investigation by the Midwest Region Office of the Federal trade Commission and the St. Louis Field Office of the Chicago Division of the United States Postal Service. Essentially, the case involved telemarketers falsely representing to consumers that buyers for the consumers’ time-share properties had been located. The time-share owners were enticed to pay fees to complete the sales, when, in fact, no sale had ever occurred. The case was prosecuted by Assistant United States Attorney Nathan Stump and Special Assistant United States Attorney Theresa Dawson.
Sentencing for Garten was set for November 19, 2013. The Court stated that the trial proved that Garten was a “facile dissembler” and found that she was a danger to the community, thus Garten’s bond was revoked and she was remanded to the custody of the United States Marshal. At sentencing, Garten faces a maximum possible sentence of 25 years in prison, as well as a maximum $250,000.00 fine.
Federal Jury Finds Charlotte Man Guilty of Sex Trafficking of A MinorRead the Press Release
CHARLOTTE, N.C. – A federal jury handed down a guilty verdict late on Wednesday, August 14, 2013, for a Charlotte man charged with sex trafficking of a minor, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Juan Brandon Gray-Sommerville, 23, of Charlotte was charged on April 16, 2013, with one count of knowingly obtaining, harboring, providing and transporting a minor to engage in prostitution.
John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division and Chief Rodney D. Monroe, of the Charlotte-Mecklenburg Police Department (CMPD) join U.S. Attorney Tompkins in making today’s announcement.
According to filed court documents and testimony presented during the two-day trial, the minor female met Gray-Sommerville through social media in early March 2012. Shortly thereafter, the defendant began exchanging text messages with the minor, encouraging her to meet him. According to court records, on March 13, 2012, Gray-Sommerville and his girlfriend travelled to a town outside of Charlotte to pick up the minor in front of her school. According to trial testimony, the three of them drove back to Charlotte and checked into a motel. Trial testimony established that the defendant took pictures of the minor at the motel and created an online advertisement on Backpage.com to recruit clients to engage in sex acts with her. Court records indicate that the defendant drove the minor to have sex for money with two clients. According to court documents and witness testimony, law enforcement located the minor when they responded her 9-1-1 call, after Gray-Sommerville abandoned her fearing police detection. Court records indicate that during the investigation, an FBI computer forensic examiner found on Gray-Sommerville’s computer the picture of the minor the defendant posted on Backpage.com. Investigators also recovered text messages the defendant had exchanged with the minor using his cell phone.
In making today’s announcement U.S. Attorney Tompkins stated, “Gray-Sommerville prayed upon a vulnerable young girl and exploited her in the worst possible way. Sex trafficking is a reprehensible crime that dehumanizes victims and strips them of their dignity. My Office will continue to work closely with our law enforcement partners to identify and prosecute sex traffickers who profit from prostituting minors.”
“The defendant lured a young girl away from her family with promises of money, but instead sold her as a sex slave. It is inconceivable that someone would sexually exploit a child for financial gain, but it does happen and the FBI will aggressively pursue those who victimize our children,” said John A. Strong, Special Agent in Charge of the Charlotte Division of the FBI.
“The verdict sends a loud message that these type of disgraceful offenses against children will not be tolerated in our community. We will continue to work with our federal partners in our efforts to protect children,” said Chief Monroe, Charlotte Mecklenburg Police Department.
Gray-Sommerville has been in local federal custody since April 2013. At sentencing, he faces a mandatory minimum term of 10 years and a maximum of life in prison and a $250,000 fine. A sentencing date has not been set yet.
The investigation of the case was handled by the FBI assisted by CMPD. The prosecution of the case is handled by Assistant U.S. Attorney Kimlani Ford, of the U.S. Attorney’s office in Charlotte.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. 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.
Federal Jury Convicts Block Burners of Drug Trafficking, Robbery and MurderRead the Press Release
GRAND RAPIDS, MICHIGAN – Four Lansing men were convicted of drug trafficking, armed robbery and first degree murder in U.S. District court in Grand Rapids late Wednesday afternoon, announced U.S. Attorney Patrick A. Miles, Jr. The men—Charles Kunta Lewis, age 36, Wallee Abdullazeem Al-Din, age 24, his brother, Mustafa Al-Din, age 25, and Ralphael Crenshaw, age 24, were tried by a jury before U.S. District Judge Robert J. Jonker. After a two-week trial, the jury convicted the defendants of conspiring to commit drug trafficking crimes and robbery, and using a firearm during and in relation to a drug trafficking crime resulting in murder. The four defendants were found guilty of abducting and murdering Lansing resident Shayla Johnson, age 19, in an effort to obtain drugs. This charge carries a maximum term of life in prison.
Evidence at trial established that the defendants were members and associates of a violent Lansing street gang known as the Block Burners. The prosecution’s evidence demonstrated that during one six-week span in the summer of 2010, the defendants were involved in a violent pattern of robbing and at times beating victims for drugs, money and other valuable items. Their violent conduct culminated in the kidnaping and first degree murder of Shayla Johnson. The defendants wrongly believed Shayla Johnson had access to a large amount of marijuana plants. The defendants planned to kidnap her in order to compel her to disclose the location of the marijuana plants. Acting on their plan the defendants entered her home, forced her from her bedroom, and brutally shoved her into the trunk of a vehicle. When Ms. Johnson fought back, she was fatally shot multiple times with an assault rifle.
In the fall of 2010, the Ingham County Prosecutors Office sought the assistance of the U.S. Attorney’s Office in the prosecution of the matter because of serious concerns over allegations of obstruction and intimidation by gang members. The decision was made to transfer the case to federal court for prosecution. The case was investigated by the Lansing Police Department, the Meridian Township Police Department and the Bureau of Alcohol, Tobacco and Firearms.
This case was prosecuted by Assistant U.S. Attorneys Timothy P. VerHey and Brian K. Delaney. No sentencing date has yet been announced.
END
Federal Indictment Charges 18 Defendants in Eastern Oregon Cockfighting RingRead the Press Release
PORTLAND, Ore. – A federal grand jury has indicted 18 defendants on various charges in connection with a cockfighting operation in Irrigon, Morrow County, Oregon, involving ten “derbies” occurring from April 1, 2012, through May 19, 2013.
Arrests on the charges occurred today at various sites in Oregon and Washington. Those arrested in Oregon are scheduled to appear for arraignment before a federal magistrate judge in Portland on Friday, August 16, 2013, at 1:30 p.m. Those arrested in Washington will appear for arraignment before a federal magistrate judge in Yakima, Washington.
Six individuals are charged with operating an illegal gambling business:
- John Wesley Walker, 67, of Irrigon;
- Irina Walker (aka Irina Kreuger), 60, of Irrigon;
- Mario Perez (aka El Cuba), 62, of Hermiston, Oregon;
- David Sanchez, 29, of Irrigon;
- Jose Luis Virgen Ramirez, 48, of Hermiston; and
- Aurelia Garcia Mendoza, 33, of Irrigon.
These six persons are also charged, along with 12 others, with conspiracy to violate the Animal Welfare Act by conducting unlawful animal fighting ventures on ten occasions. The additional defendants are:
- Apolinar Munoz Gutierrez (aka Polo), 37, of Irrigon;
- Cecilio Mendoza Magana, 63, of Kennewick, Washington;
- Mauro Gonzalez Pulido (aka Cala), 47, of Zillah, Washington;
- Ruben Saltos Godina (aka Chino), 42, of Moxee, Washington;
- Arturo Olmedo Silva (aka El Havolin, Cepillo), 45, of Hermiston;
- Eduardo Cisneros (aka Mariachi), 27, of Sunnyside, Washington;
- Eulalio Delamora Anguiano (aka Lalo), 44 of Moxee, Washington;
- Francisco Javier Vega (aka Sergio Gonzalez Manzano), 39, of Plymouth, Washington;
- Oscar Acosta Navarrete, 46, of Prosser, Washington;
- Antonio Dominguez Robles (aka Tono, Memo), 37, of Pasco, Washington;
- Gerardo Gomez Castillo (aka Aguilo), 54, of Wapato, Washington; and
- Valente Piedra Magana, 38, of Union Gap, Washington.
“Cockfighting is illegal under federal law and under the laws of all 50 states,” Amanda Marshall, United States Attorney for the District of Oregon, stated. “Besides being a barbaric practice, cockfighting jeopardizes public health and safety and facilitates the commission of other criminal acts,” she added.
Each of the charged offenses – illegal gambling (one count), unlawful animal fighting venture (ten counts), and conspiracy (one count) – carries a maximum sentence of five years in prison and a fine of $250,000. The indictment also alleges that, upon conviction of illegal gambling, defendants John Wesley Walker and Irina Walker are subject to the forfeiture of their real property and buildings used in the gambling business, located on Depot Lane in Irrigon, Morrow County, Oregon.
A copy of the 12-count indictment is attached. An indictment is a charging instrument only, and all defendants are presumed innocent unless and until found guilty beyond a reasonable doubt.
The case was investigated by the Office of Inspector General, U.S. Department of Agriculture, with assistance from the Drug Enforcement Administration, the Oregon State Police, the Washington State Gaming Commission, and the Blue Mountain (Oregon) Narcotics Team. The case is being prosecuted in Oregon by Assistant U. S. Attorney Stephen F. Peifer.
For more information, please see the attached Indictment Here
Federal Grand Jury in Fort Wayne Returns IndictmentsRead the Press Release
FOR IMMEDIATE RELEASECONTACT: Mary Hatton
www.usdoj.gov/usao/inn/ CELL: (219) 314-9993
FortWayne,Indiana - TheUnited States Attorney's Office announced that a Grand Jury sitting in Fort Wayne, Indiana, returned the following Indictments on June 26, 2013:
Phillip Biddle, 36, of Kendallville, Indiana, is charged in a single count Indictment with knowingly possessing visual depictions of minor(s) engaged in sexually explicit conduct on or aboutJune15,2012.TheIndictmentalsoseekstheforfeitureofacomputerandaharddrive. Thischargewasfiledasaresultof aninvestigationbytheInternetCrimesAgainstChildren (ICAC)TaskForce.Thiscasehasbeenassigned toandwillbeprosecutedbyAssistantUnited States Attorney Lesley J. Miller Lowery.
Keith Kinney, 51, of Fort Wayne, Indiana, is charged in a single countIndictmentwith knowingly possessing visual depictions of minor(s) engaged in sexually explicit conduct on or aboutJuly11,2012.TheIndictmentalsoseekstheforfeitureofacomputerandaharddrive. Thischargewasfiledasaresultof aninvestigationbytheInternetCrimesAgainstChildren (ICAC)TaskForce.Thiscasehasbeenassigned toandwillbeprosecutedbyAssistantUnited States Attorney Lesley J. Miller Lowery.
TheUnitedStatesAttorney'sOfficeemphasizedthatanIndictmentismerelyanallegation and that all persons charged are presumed innocent until and unless proven guilty in court.
If convicted in court, any specific sentence to be imposed willbedetermined by the judge after a consideration of federal sentencing statutes and the Federal Sentencing Guidelines.
Federal Escapee Allegedly Involved InRead the Press Release
The Robbery Of Dunmore Bank Charged
The United States Attorney’s Office for the Middle District of Pennsylvania announced the filing of a criminal Information in U.S. District Court in Scranton Wednesday charging Romeal Price, age 36, of Brooklyn, New York, with escape and bank robbery.
According to United States Attorney Peter J. Smith, the Information charges that while completing his remaining few months of a 15-year federal prison sentence from 2001, Price escaped from the Catholic Social Services Residential Reentry Center on June 18, 2013. It is alleged that following his escape, Price robbed the Pennstar Bank, 1230 O’Neill Highway, Dunmore, Pennsylvania, of approximately $11,000 on June 28, 2013. Following the robbery, Price fled to New York City. On July 17, 2013, deputies of the United States Marshals Service arrested Price in a New York City apartment without incident.
The case was investigated by the United States Marshals Service, the Federal Bureau of Investigation, and the Dunmore Police Department. The case is being prosecuted by Assistant U.S. Attorney John Gurganus.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilty is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
In this case, the maximum penalty under the federal statute is 25 years’ imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
Facebook Predator Sentenced to 15 YearsRead the Press Release
A 33-year-old New Baltimore man was sentenced on Wednesday to 15 years in federal prison for producing child pornography by using Facebook to entice boys to send him nude pictures of themselves, U.S. Attorney Barbara L. McQuade announced today.
Joining McQuade in the announcement was FBI Special Agent in Charge Robert D. Foley, III.
On August 17, 2012, Gregory Austin, age 33, of New Baltimore, Michigan, was charged with three counts of production of child pornography for manipulating young boys, through Facebook, to create pornographic pictures of themselves.
In March of 2012, Austin was arrested by the Roseville Police Department, in the parking lot an elementary school, for illegally purchasing Vicodin. The arrest led to an investigation that discovered images of child pornography on Austin’s cellular phone. Further investigation revealed that Austin created an on-line persona, through Facebook, of a young woman named “Julie”. Through “Julie” and her Facebook page, Austin convinced numerous minor boys, including former students, to photograph their genital and pubic area and send him the images. In total, 133 images, depicting mostly young boys in various states of dress and undress, were found on Austin’s phone and computer.
Yesterday, United States District Judge Arthur J. Tarnow sentenced Austin to 15 years in federal prison for his crimes. In making his decision, Judge Tarnow cited that Austin had committed a serious crime that required a severe punishment. Austin was also placed on five years of supervised release.
According to McQuade, "Parents and teens should be aware that predators use social media to manipulate victims. This defendant tricked young boys into sending him nude pictures of themselves. You need to be careful when communicating online because you never know who really is on the other end of a digital message."
The Roseville Police Department along with the Federal Bureau of Investigation’s Southeast Michigan Crimes Against Children Task Force participated in the investigation and prosecution of this case. This case was brought as part of the U.S. Attorney’s Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation through the Internet.
East Texas Women Sentenced for Trafficking MethamphetamineRead the Press Release
Department of Justice
Office of Public AffairsTYLER, Texas – Two East Texas women were sentenced to federal prison today for drug trafficking violations in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
Stacie Serenko, 29, of Tyler, Texas pleaded guilty on Feb. 7, 2013 to possession with intent to distribute methamphetamine and was sentenced to 70 months in federal prison today by U.S. District Judge Leonard E. Davis.
Jennifer Northcutt, 42, of Mineola, Texas, pleaded guilty on Feb. 5, 2013, to possession with intent to distribute methamphetamine and was sentenced to 60 months in federal prison today by Judge Davis.
According to information presented in court, on Aug. 21, 2010, Serenko and Northcutt both found in possession of methamphetamine which they intended to distribute to others. Serenko admitted to being in possession of more than 5 grams of methamphetamine. Northcutt admitted to possessing at least 17 grams of methamphetamine and a firearm.
Another defendant, Billie Earl Johnson, is set for trial on Oct. 8, 2013.
This case is being investigated by the U.S. Drug enforcement Administration and the Mineola Police Department and prosecuted by Assistant U.S. Attorney Bill Baldwin.
Eagle Butte Man Sentenced for Simple AssaultRead the Press Release
United States Attorney Brendan V. Johnson announced that John Maynard, a 51-year-old non-Indian man from Eagle Butte, South Dakota, pled guilty to Simple Assault and was sentenced on August 13, 2013, by U.S. Magistrate Judge Mark A. Moreno.
Maynard was sentenced to 6 months in custody and a $10 assessment to the Federal Crime Victims Fund.
The conviction relates to a July 2013 incident in which Maynard committed a simple assault upon a Native American woman by hitting her with a closed fist at her residence in Eagle Butte.
The investigation was conducted by the Cheyenne River Sioux Tribe Law Enforcement Division and the Ziebach County Sheriff’s Office. Assistant U.S. Attorney Mikal Hanson prosecuted the case.
Maynard was remanded to the custody of the U.S. Marshals Service to begin serving his sentence.Eagle Butte Man Sentenced for Assaulting A Man in A BarRead the Press Release
United States Attorney Brendan V. Johnson announced that Bevan Ray Bordeaux, a 26-year-old man from Eagle Butte, South Dakota, pled guilty to two charges of Assault by Striking, Beating and Wounding and was sentenced on August 12, 2013, by U.S. Magistrate Judge Mark A. Moreno.
Bordeaux was sentenced to one year of custody, $79.20 in restitution, and a $20 assessment to the Federal Crime Victims Fund.
The conviction arose from an incident on December 28, 2012, when the Defendant’s wife got into a verbal argument with the victim at an Eagle Butte bar. The Defendant then approached the victim and joined in the argument, which escalated and resulted in Bordeaux striking the victim and knocking him to the floor. Following the initial assault, Bordeaux unlawfully struck the victim a second time when he was on the floor of the bar.
The investigation was conducted by the Cheyenne River Sioux Tribe Law Enforcement Division. Assistant U.S. Attorney Mikal Hanson prosecuted the case.
Bordeaux was remanded to the custody of the U.S. Marshals Service to begin serving his sentence.Doctor Brothers Jose and Carlos Lopez Diaz Sentenced for Health Care FraudRead the Press Release
SAN JUAN, P.R. – Yesterday and today, doctor brothers José and Carlos López-Díaz were sentenced to 121 months and 36 months and one day of imprisonment respectively, and three years of supervised release for their participation in a conspiracy to commit health care fraud, announced United States Attorney for the District of Puerto Rico, Rosa Emilia Rodríguez-Vélez. U.S. District Court Judge Francisco A. Besosa imposed the sentences and ordered José López-Díaz to be committed immediately to the Metropolitan Detention Center while Carlos López-Díaz was allowed to voluntary surrender upon designation by the Bureau of Prisons.
Doctor José López-Díaz and his brother Doctor Carlos López-Díaz were arrested on September 1, 2011, after a Federal grand jury returned 20-count indictment for conspiracy to commit health care fraud and a forfeiture allegation of $727,729.16. The investigation was lead by the Department of Health and Human Services, Office of the Inspector General (HHS-OIG), with the collaboration of the United States Secret Service (USSS). They were found guilty by a jury of their peers on June 13, 2012.
According to the indictment, José Lopez-Díaz a general practitioner licensed to practice medicine in Puerto Rico, was billing for Medicare services not rendered. The services billed and not rendered included: billing Medicare for 10,231 claims for medical treatment allegedly provided to Medicare patients at Guaynabo Medical Mall’s Emergency Room, even though he had never worked at such institution and never saw the patients; billing of Medicare code 53085, known as “Drainage Perineal Urinary Extravasation”, a procedure which was allegedly performed by José López-Díaz on female patients, when this procedure can only be performed on male patients. José Lopez-Díaz never provided medical treatment to the Medicare beneficiaries whose identities he used in order to bill Medicare.
Over the period of time referred to in the Indictment, José Lopez-Díaz fraudulently billed Medicare for $3,591,298.90 and received the amount of $727,729.16 in Medicare reimbursements. He was also ordered to pay the amount of $1,028,691.55 in restitution and a Special Monetary Assessment of $3,400.
Doctor Carlos López-Díaz is a licensed dentist in Puerto Rico and the brother of José Lopez-Díaz. Over the course of the health care fraud scheme, Carlos López-Díaz conspired with his brother to defraud Medicare and provided him with names and Medicare beneficiary numbers of patients treated by Carlos López-Díaz at his dental clinic in order for his brother to bill Medicare for services not rendered to those patients.
“We are pleased with the sentences of these two defendants,” said United States Attorney, Rosa Emilia Rodríguez-Vélez. “These demonstrate that we will not tolerate criminals who engage in fraudulent schemes which deplete the Medicare program of funds which are destined for our elderly population in order to enrich themselves. “May these sentences serve as an example for the medical community in Puerto Rico of what could be the consequences they can face if they defraud the Medicare program.”“We are proud to be a part of the federal team that brought these defendants to justice for defrauding the Medicare program and exploiting the elderly,” said Thomas O’Donnell, Special Agent in Charge of the Office of Inspector General’s New York Regional Office which also covers Puerto Rico. “Arresting owners and providers, freezing their assets and prosecuting them to the fullest extent possible, are some of the tools that the federal government has available, and will be utilized to remove these individuals from participating in the Medicare program.”
HHS-OIG, USSS and the FBI, the investigative agencies received substantial collaboration from the Special Investigative & Compliance Units from Medical Card System Inc., Triple-S Salud, Medicare y Mucho Màs and Preferred Medicare Choice.
The case was prosecuted by Assistant U.S. Attorney Ernesto López-Soltero and Special Assistant U.S. Attorney Wallace A. Bustelo.
Department of Justice Reaches Agreement to Improve Conditions at St. Tammany Parish Jail in LouisianaRead the Press Release
The Justice Department announced today that it has entered into a comprehensive agreement with the Parish of St. Tammany, La., and the St. Tammany Parish Sheriff to correct conditions of confinement at the St. Tammany Parish Jail and to ensure that improvements made since the Department’s investigation will be maintained. The St. Tammany Parish Jail is located in Covington, La., and houses approximately 1,000 adult male and female prisoners. The jail is staffed by approximately 225 sworn law enforcement officers and civilian employees.
The agreement outlines significant remedial measures to address deficiencies in correctional mental health care and suicide prevention. Under the terms of the agreement, St. Tammany will work to ensure that prisoners are safe and receive care and services necessary to meet their constitutional rights. The agreement underscores the Parish’s obligation to protect prisoners the substantial risk of serious harm.
“We commend Sheriff Jack Strain, St. Tammany Parish President Patricia Brister, and other St. Tammany officials for their willingness to work aggressively to address the problems identified during the course of our investigation,” said Jocelyn Samuels, Acting Assistant Attorney General, Civil Rights Division. “Based on the productive relationship we have established to date, we expect to continue to work cooperatively with St. Tammany to improve conditions of confinement at this facility.”
In April 2011, the Justice Department initiated its investigation of the St. Tammany Jail under the Civil Rights of Institutionalized Persons Act (CRIPA). The Department issued its findings in July 2012, concluding that certain conditions at St. Tammany violated prisoners’ constitutional rights to adequate mental health care, including adequate suicide prevention.
Today’s agreement comprehensively addresses the department's findings through an in-depth focus on the systemic problems that caused the unconstitutional conditions at the jail. The agreement also builds on improvements made by St. Tammany during the department’s investigation, most notably the removal of small booking cages that had been used for the confinement of suicidal prisoners and the construction of a specialized housing unit to manage and monitor prisoners in mental health crisis. The agreement requires:
- Improved screening and assessments of prisoners with serious mental health needs.
- Adequate and timely mental health treatment for prisoners, including group or individual therapy services, better monitoring when medication is administered to prisoners and follow-up and crisis services.
- Improved suicide precautions.
- Enhanced staff training on mental health and suicide prevention.
- The collection and tracking of data to identify triggers and trends involving suicide and self-injurious behavior, with the goal of preventing or reducing further incidents.
- The appointment of an independent auditor, jointly selected by St. Tammany and the department, with expertise in the areas covered by this agreement. As part of overseeing the implementation of the agreement, the independent auditor will periodically inspect the facility for compliance and provide technical assistance to St. Tammany staff.
CRIPA authorizes the Attorney General to investigate conditions of confinement in certain institutions owned or operated by, or on behalf of, state and local governments. In addition to adult and juvenile correctional facilities, these institutions include psychiatric hospitals, nursing homes and residential facilities serving persons with developmental disabilities. CRIPA’s focus is on systemic deficiencies rather than individual, isolated problems. Please visit http://www.justice.gov/crt to learn more about CRIPA and other laws enforced by the Justice Department’s Civil Rights Division
The investigation of the St. Tammany Parish Jail was conducted by Corey M. Sanders, Trial Attorney in the Special Litigation Section of the Civil Rights Division.
Related Material:
Findings Letter: http://www.justice.gov/crt/about/spl/documents/tammany_findings_7-12-12.pdf
Defendant Sentenced for Receipt of Child PornographyRead the Press Release
Michael J. Moore, United States Attorney for the Middle District of Georgia, announced that
Josh Ensley, age 52, of Tucker, Georgia, was sentenced today by the Honorable Charles A. Pannell, Jr., United States District Judge, in Atlanta, Georgia, for receipt of child pornography. Judge Pannell sentenced Mr. Ensley to 180 months imprisonment, to be followed by supervised release for life, and mandatory registration as a sex offender.Mr. Ensley entered a plea of guilty on May 16, 2013 to Count One of an Indictment charging him with Receipt of Child Pornography. In entering a plea of guilty, Mr. Ensley admitted that between September 18, 2008, and March 20, 2011, he ordered and received DVDs containing visual depictions of minors engaged in sexually explicit conduct which had been shipped to him in interstate commerce. He also admitted that on October 25, 2012, he possessed additional material on his computer which contained visual depictions of minors engaged in sexually explicit conduct which had been obtained by him over the internet. Some of the visual depictions possessed by Mr. Ensley depicted minors who were younger than twelve (12) years old. Mr. Ensley was an employee of a school in Dekalb County, Georgia, which had students under the age of eighteen (18) years, and he further acknowledged that on October 25, 2012, he possessed videos that he had produced which depicted minor students of the school using the restroom. He admitted surreptitiously placing video cameras in the boys’ and girls’ restrooms at the school and videotaping students’ genitals without their knowledge or consent.
“Our child pornography laws are on the books to protect our children from people like Mr. Ensley. Every time he viewed one of his DVDs containing child pornography, he re-victimized these children. This case reminds us that we, as parents and educators and anyone else caring for children, must be mindful of those who prey on them,” said U.S. Attorney Michael Moore.The case was investigated by the United States Postal Inspection Service, Atlanta Division, and prosecuted by Assistant United States Attorneys Paul C. McCommon III and Robert D. McCullers.
Inquiries regarding the case should be directed to Sue McKinney, Public Affairs Specialist, United States Attorney's Office at (478) 621-2602.
David H. Brooks, Founder and Former Chief Executive Officer of DHB Industries, Inc., Sentenced to 17 Years in Prison for Insider Trading, Fraud, Lying to Auditors and Obstruction of JusticeRead the Press Release
Earlier today, in Central Islip, New York, the former Chief Executive Officer of a Long Island-based supplier of body armor to the U.S. military and law enforcement agencies was sentenced to 17 years in prison for his leadership role in a $200 million fraud and obstruction of justice case, to be followed by five years of supervised release. DHB Industries, Inc. founder David H. Brooks, who was convicted in September 2010 on 14 counts of conspiracy, mail and wire fraud, securities fraud, obstruction of justice, and lying to auditors and subsequently pleaded guilty to conspiracy to defraud the IRS and filing false income tax returns, was also ordered to pay a fine of $8.7 million, and to forfeit approximately $65 million in illegally-gained profits to the United States. The court will determine the amount Brooks must pay in restitution to the victims of his fraud scheme within 90 days. The sentence was imposed by United States District Judge Joanna Seybert.
The sentence was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI); and Richard Weber, Chief, Criminal Investigation, Internal Revenue Service (IRS).
“DHB Industries made body armor that protected the men and women of the U.S. military, who risk their lives to keep us safe. To David Brooks, it was merely a vehicle for plunder and a means to feed his own greed. Brooks fancied himself a master of the sport of kings. In reality, he was a selfish man who looted his company, defrauded his investors, lied to the SEC and the investing public, and sought to profit through insider trading right before the collapse of his house of cards. And he demonstrated time and time again that he believes he is above the law. Today, David Brooks learned otherwise,” stated United States Attorney Lynch. “Thanks to the hard work and dedication of law enforcement, the investing public can rest easier knowing that for the next 17 years, Brooks will not be able to lie, cheat and steal from anyone else.” Ms. Lynch thanked the FBI and IRS for leading the investigation and the Defense Criminal Investigative Service for its assistance in the case.
FBI Assistant Director-in-Charge Venizelos stated, “David Brooks repeatedly stole from his company, stole from investors, lied to auditors and regulators, and traded on inside information. He did all this to finance an obscenely lavish lifestyle paid for by his victims. Today’s sentencing is the justice the government has been seeking.”
“Tax fraud was integral to sustaining Brooks’s securities fraud schemes and fueling his lust for money,” stated IRS Chief, Criminal Investigation Weber. “Brooks falsified his income tax returns in order to prevent law enforcement from discovering that he was looting DHB. IRS-CI will turn over every stone to find where criminals are hiding and spending their illegal proceeds. This case should send a message to those who feel that they can commit fraud and evade taxes -- their consuming greed will always leave a money trail.”
During an eight-month trial, the government’s evidence proved that Brooks and others conspired to loot DHB for personal gain. Brooks concealed his control of a related company in order to funnel more than ten million dollars from DHB to support a thoroughbred horse-racing business. Brooks also falsely inflated inventory at a DHB subsidiary to artificially boost reported profits, and then lied to auditors in an effort to cover up the schemes.
Although Brooks was initially released on bail conditions requiring that he account for and repatriate all foreign assets, he was re-arrested and bail was revoked in January 2010 after the government discovered that Brooks had concealed millions of dollars in accounts in the tax haven principality of San Marino as well as in London, England. He has remained in custody ever since. During his trial, Brooks smuggled prescription pills into the courtroom, created a fake e-mail that his attorney tried to use to cross examine a government witness, and then disobeyed a court order to produce evidence of the email’s authenticity prompting the court to hold him in contempt.
Unauthorized and Undisclosed Compensation
Brooks stole more than $6 million from DHB’s coffers to finance a horse-racing business that had no relationship to DHB’s business and to finance a lavish lifestyle that included corporate-paid trips to exotic locations, the purchase of a luxury car and an armor-plated vehicle, personal jewelry, plastic surgery for his wife, a burial plot for his mother, a plasma television for his son’s bedroom, country club bills, $40,000 leather bound invitations for his son’s Bar Mitzvah and a $101,000 belt buckle encrusted with diamonds, sapphires and rubies. To cover up his theft, Brooks created, and directed others to create, fictitious documents and misclassified these personal expenses as business expenses on DHB’s books and records. In yet another scheme, Brooks scalped tickets to sporting events and concerts that DHB paid for and then kept more than $300,000 that he generated from selling the company’s tickets.
The Related Party Scheme
Brooks also concealed the related party status of Tactical Armor Products (TAP), a company supposedly run independently of DHB by Brooks’ wife, but in fact wholly controlled by Brooks. Through this scheme, Brooks siphoned more than $10 million out of DHB to pay for obsolete body armor plates sold by TAP. The profits from these concealed related party transactions were used to pay for more than $16 million in Brooks’s personal horse racing business, jewelry and cash investments. To conceal the scheme and deceive auditors and investors, Brooks created fraudulent multi-million dollar transactions and doctored internal DHB documents.
The Accounting Frauds
Brooks also engaged in accounting fraud schemes designed to increase the net income and profits that DHB reported in its press releases and filings with the Securities and Exchange Commission (SEC) by falsely inflating the value of DHB’s existing inventory, adding non-existent inventory to the company’s books and records, and fraudulently reclassifying expenses.
Lying to Auditors and Obstruction of Justice
Brooks attempted to cover up several of the schemes by obstructing the SEC’s investigation. Brooks and others submitted false reports to the SEC during an investigation of DHB’s executive compensation and related party schemes that began in March 2003; Brooks lied to DHB’s independent auditors about the inventory inflation fraud; and when auditors tried to look at the phony inventory, Brooks falsely claimed that it had been destroyed in a hurricane. Brooks later admitted that the supposed inventory never actually existed.
Insider Trading
In November 2004, several days after DHB filed a financial report with the SEC and sent shareholders a statement containing many of the same misrepresentations and omissions described above, Brooks sold more than $69 million of DHB stock. In December 2004, he sold an additional $116 million in stock knowing that that DHB’s stock price of $20 per share had been artificially-inflated through his many and varied schemes. After those insider sales, DHB stock plummeted to pennies per share and the company was de-listed from the American Stock Exchange.
The government’s case was prosecuted by Assistant United States Attorneys Richard Lunger, Christopher Ott, Christopher Caffarone, James Knapp, Kathleen Nandan, Laura Mantell, Bonni Perlin and Mary Dickman.
This prosecution was the result of efforts by President Barack 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. For more information on the task force, visit http://www.StopFraud.gov.
The Defendant:
DAVID H. BROOKS
Age: 58
Old Westbury, New YorkCommercial Fisherman Indicted for Alteration of Objects to Obstruct a Federal Investigation and Making False StatementsRead the Press Release
TPANAMA CITY, FLORIDA– Thomas Zachary Breeding, 29, of Panama City, Florida, has been charged by a federal grand jury with the alteration or falsification of an object to obstruct a federal investigation and two counts of making false statements to agents of the National Oceanic and Atmospheric Administration, announced United States Attorney Pamela C. Marsh, Northern District of Florida.
The indictment alleges that, on or about January 18, 2012, Breeding knowingly altered the GPS device on his fishing vessel to impede, obstruct, and influence an investigation conducted by the NOAA into his activities in The Edges Closed Area. The Edges is an area of the Gulf of Mexico closed annually to commercial and recreational fishing from January 1 to April 30 to protect the spawning season for gag grouper. Gag grouper, like other shallow and deep water groupers, red snapper and tilefish are extremely valuable and economically important species to both commercial and recreational fishermen and are managed under the Gulf of Mexico Individual Fishing Quota program.
The indictment further alleges Breeding made two false statements to NOAA. On or about January 18, 2012, Breeding is alleged to have falsely told NOAA that he was fishing in The Edges Closed Area by accident because the GPS device and plotter on his fishing vessel were inaccurate, when he knew that he intended to fish in The Edges Closed Area. Then, on or about April 4, 2012, Breeding is alleged to have falsely told NOAA that he did not alter the GPS device on his fishing vessel to cover up his intentional entry into The Edges Closed Area, when defendant’s purpose in altering the GPS and plotter on his fishing vessel was to conceal his intentional entry into The Edges Closed Area to fish.
Count One of the indictment charges Breeding with the alteration or falsification of an object to obstruct a federal investigation. If convicted on this count, Breeding faces a term of imprisonment of not more than twenty (20) years, a period of supervised release of up to five (5) years, a fine of up to $250,000, and a $100 special monetary assessment. Counts Two and Three of the indictment charge Breeding with making false statements. If convicted on these counts, Breeding faces a term of imprisonment of not more than five (5) years imprisonment, a fine of up to $250,000, a period of supervised release of up to three (3) years, and a $100 special monetary assessment on each count.
Breeding appeared today for his initial appearance and arraignment at the United States District Court in Panama City, Florida. Breeding pled not guilty to the charges and his trial was scheduled for October 21, 2013 before United States District Judge Richard Smoak.
The indictment results from an investigation by agents of NOAA, and is being prosecuted by Assistant U.S. Attorney Gayle Littleton.
An indictment is merely an allegation by a grand jury that a defendant has committed a violation of federal criminal law and is not evidence of guilt. All defendants are presumed innocent and entitled to a fair trial, during which it will be the government’s burden to prove guilt beyond a reasonable doubt at trial in a court of law.
Colorado River Man Sentenced to 22 Years in Federal Prison for Second-degree MurderRead the Press Release
PHOENIX, Ariz. – On Aug. 14, 2013, Loren Kaysang Tahbo, 33, of Parker, Ariz., and a member of the Colorado River Indian Tribes, was sentenced by U.S. District Judge David G. Campbell to 265 months in prison, five years of supervised release, and restitution. Tahbo pleaded guilty on Jan. 23, 2013, to second-degree murder.
On Aug. 10, 2012, Tahbo stabbed and ultimately killed a man on the Colorado River Indian reservation. Tahbo left the scene of the murder, stole the victim’s car, crashed the car into a canal, and later fled on foot to a woman’s home where tribal police apprehended him.
The investigation in this case was conducted by the Federal Bureau of Investigation and the Colorado River Indian Tribes Police Department. The prosecution was handled by Jennifer E. Green, Assistant U.S. Attorney, District of Arizona, Phoenix.
CASE NUMBER: CR-12-01773-PHX-DGC
RELEASE NUMBER: 2013-065_TahboFor more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
Collin County Antique Automobile Dealer Sentenced for Bank Fraud and Money Laundering ViolationsRead the Press Release
Department of Justice
Office of Public AffairsSHERMAN, Texas – A 58-year-old Prosper, Texas business owner has been sentenced to prison for federal violations in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
Ricky Prince pleaded guilty on Sep. 6, 2012, to bank fraud and money laundering and was sentenced to a total of 36 months in federal prison on Aug. 13, 2013, by U.S. District Judge Marcia A. Crone. Prince was also ordered to pay restitution in the amount of $1,461,807.27. .
According to information presented in court, from March 2007 to August 2010, Prince owned and operated North Texas Muscle Cars, Inc., specializing in antique automobile sales, in McKinney, Texas. During this time, Prince submitted materially false personal finance statements and income tax returns to financial institutions to secure credit for himself and North Texas Muscle Cars, Inc. To further the scheme, Prince included antique automobiles such as a 1963 Chevrolet Corvette, a 1974 Pantera Detomasoy, a 1967 Chevrolet Chevelle and a 1938 Ford Custom Street Rod, that were never purchased. As a result of the fraudulent activity, the financial institutions incurred actual losses totaling approximately $1,347,472.
Prince was ordered to report to prison on Sep. 27, 2013 to begin serving his sentence.
This case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service Criminal Investigation and prosecuted by Assistant U.S. Attorney Randall Blake.
Chambers SentencedRead the Press Release
BATON ROUGE, LA – Acting United States Attorney J. Walter Green announced that another public official has been sentenced in Operation Blighted Officials. Chief U.S. District Judge Brian A. Jackson today sentenced RICHARD L. CHAMBERS, SR., age 68, of LaPlace, Louisiana, to 30 months imprisonment, 1 year of supervised release following imprisonment, a fine of $10,500, and forfeiture of $11,341. The defendant was sentenced after having pled guilty to racketeering based on his corrupt activity while Deputy Commissioner for the Louisiana Department of Insurance.
Today’s sentence results from the defendant’s involvement in two corrupt schemes in 2009 and 2010 while serving as Deputy Commissioner for the Louisiana Department of Insurance. In the first scheme, the defendant used his official position to steer insurance business from municipalities and other entities to an insurance agent in exchange for a split of the commissions. The defendant created the scheme and estimated that it would generate between $200,000 and $4,000,000 in commissions. In the second scheme, the defendant took $5,000 in cash bribes to use his official position to fraudulently secure $500,000 in private investor funding for a conceptual trash can cleaning product.
Acting U.S. Attorney Green stated: “This office, together with our federal, state, and local partners, will continue to aggressively pursue corrupt public officials who line their own pockets at the expense of the public trust. Such corruption undermines the dedicated and honest work performed by the vast majority of our public servants and will not be tolerated. Today’s sentence reflects the seriousness of public corruption, while also appropriately crediting a defendant who accepts responsibility and substantially cooperates with the investigation.”
This matter is part of Operation Blighted Officials, a long-running public corruption investigation conducted primarily by the United States Attorney’s Office and the Federal Bureau of Investigation. This matter was prosecuted by Assistant United States Attorney Corey R. Amundson who serves as the Senior Deputy Chief of the Criminal Division.
Status of Other Operation Blighted Officials Defendants
George L. Grace, Sr.: In March 2012, the former Mayor of St. Gabriel, Louisiana, was convicted by a federal jury following a six week trial of violating RICO, engaging in honest services wire and mail fraud, bribery, obstruction of justice, making false statements, and use of an interstate facility in aid of racketeering. U.S. District Judge Maurice Hicks sentenced Grace to 22 years imprisonment.
Thomas A. Nelson, Jr.: In June 2011, the former Mayor of New Roads, Louisiana, was convicted by a federal jury following a two and a half week trial of violating RICO, engaging in honest services wire fraud, using an interstate facility in aid of racketeering, and making false statements to the FBI. Chief Judge Jackson sentenced Nelson to 11 years imprisonment.
Maurice Brown: In February 2011, the former Mayor of White Castle, Louisiana, was convicted by a federal jury following a two week trial of violating RICO, engaging in honest services wire and mail fraud, and use of an interstate facility in aid of racketeering. Chief Judge Jackson sentenced Brown to 10 years imprisonment.
Frederick W. Smith: In October 2011, the Chief of Police for Port Allen, Louisiana, was convicted by a federal jury following a two week trial of 11 counts of violating RICO, engaging in honest services wire and mail fraud, and using an interstate facility in aid of racketeering. Chief Judge Jackson sentenced Smith to 7.5 years imprisonment.
Derek Lewis: In July 2011, the former Mayor of Port Allen, Louisiana, pled guilty to violating RICO and agreed to cooperate with authorities. Chief Judge Jackson sentenced Lewis to 40 months imprisonment.
Johnny Johnson: In July 2010, the former member of the Port Allen City Council pled guilty to using an interstate facility in aid of racketeering and agreed to cooperate with authorities. Chief Judge Jackson sentenced Johnson to two years probation, with a condition of having to spend 6 months in a half-way house.
Bullhead Man Sentenced for Assault Resulting in Serious Bodily InjuryRead the Press Release
United States Attorney Brendan V. Johnson announced that a Bullhead, South Dakota, man convicted of Assault Resulting in Serious Bodily Injury was sentenced on August 12, 2013, by U.S. District Judge Charles B. Kornmann.
Morgan Bagola, age 21, was sentenced to 18 months of imprisonment, 3 years of supervised release, and a $100 special assessment to the Federal Crime Victims Fund.
Bagola was indicted by a federal grand jury on September 19, 2012. He pled guilty to the above charge on April 29, 2013.
The charge stems from an incident wherein Bagola, on or about December 11, 2011, used a bat to break several windows of a home. Bagola then fought with one of the other persons present. As a result of the struggle and Bagola’s use of the bat, the victim suffered serious bodily injury, including a broken ankle, laceration on his head, and a large welt on his back.
The investigation was conducted by the Bureau of Indian Affairs, Standing Rock Agency, and the Federal Bureau of Investigation. Assistant U.S. Attorney Kathryn N. Rich prosecuted the case.
Bagola was immediately turned over to the custody of the U.S. Marshals Service.Bucket List Bandit Sentenced to 135 Months in PrisonRead the Press Release
Erie, PA – A former resident of Pensacola, Florida, has been sentenced in federal court to
135 months in prison and ordered to make restitution to the banks involved on his conviction of
bank robbery, United States Attorney David J. Hickton announced today.Chief United States District Judge Sean M. McLaughlin imposed the sentence on Michael
Eugene Brewster.According to information presented to the court, between June 21, 2012 and September 10,
2012, Brewster robbed eleven banks across the nation. In the course of the bank robbery spree
Brewster used a similar method of operation and entered each bank, without being disguised, wore
similar clothes, carried a dark leather notebook, presented demand notes containing similar
threatening language to each of the victim tellers and left the scene driving a 2009 black SUV,
which Brewster had stolen in Pensacola, Florida.In his last bank robbery in Erie, Pennsylvania, on September 10, 2012, Brewster entered the Huntington National Bank, located at 2185 West 12th Street and presented a demand note, claiming that he had a gun and that the teller had one minute to comply. Brewster then claimed to the teller that he had cancer and did not care what happened. Brewster obtained bank proceeds and fled the area in a black SUV. Bank surveillance images and from area surveillance cameras clearly depicted Brewster and the vehicle he used.
Comparing the Erie Huntington Bank surveillance photographs with those from the ten other bank
robberies that had occurred throughout the United States confirmed that each robbery had been
committed by the same person. On September 12, 2012, the FBI received a tip that the bank robber
depicted in the surveillance photographs was Brewster. A review of Brewster's Florida driver's
license confirmed Brewster's identity as the bank robber. In addition, evidence disclosed that an
arrest warrant had been issued for Brewster alleging that he had stolen a black Chevy Captiva SUV
in Pensacola, Florida, on June 11, 2012. Once Brewster's identity had been established in the Erie,
Pennsylvania robbery, the FBI and law enforcement partners in the jurisdictions of the other ten
bank robberies confirmed his identity in those cases as well.Brewster entered the Chase Bank at 5250 Wadsworth Boulevard in Arvada, Colorado, on
June 21, 2012, the Chase Bank at 1484 South Milton Road in Flagstaff, Arizona, on June 27, 2012;
and the Ireland Bank at 486 Yellowstone Avenue in Pocatello, Idaho, on July 6, 2012, and obtained
federally insured funds after presented a threatening note demanding money. In Roy, Utah, on July
6, 2012, Brewster entered the Wells Fargo Bank located at 5603 South 1900 West, and obtained
money after presenting a threatening demand note claiming that he had only four months to live.
In Winston-Salem, North Carolina, on July 20, 1012, Brewster entered a Bank of America at 1209
Silas Creek Parkway and presented a threatening demand note indicating that he had nothing to lose
and threatening to come back after the teller if any silent alarm was activated. Brewster obtained
no money from the Wells Fargo Bank. Then, at the Regions Bank at 360 West State Road 436 in
Altamonte Springs, Florida, on July 27, 2012, the BB&T bank at 2120 Gunbarrel Road in
Chattanooga, Tennessee, on August 3, 2012; the PNC bank at 2217 West Market Street in
Bloomington, Illinois, on August 17, 2012; the Lamdmark Bank at 202 North Stadium Boulevard in
Colombia, Missouri, on August 29, 2012; and the Lindell Bank at 4521 Highway K in O'Fallon,
Missouri, on August 30, 2012, Brewster obtained money after presenting threatening demand notes,
including a claim that he was armed with a gun.On September 13, 2012, a police officer with the Roland Police Department in Roland,
Oklahoma, conducted a traffic stop of a black, 2009 Chevy Captiva vehicle and identified Brewster
as the driver and sole occupant. A fake Utah license plate had been affixed to the vehicle. A
computer check of Brewster's name revealed Brewster's outstanding arrest warrant in Pensacola,
Florida, for allegedly stealing the Chevy Captiva vehicle. Brewster was then taken into custody and
was found to be in possession of money from the Erie, Pennsylvania, Huntington bank robbery.
Among other items located in the Captiva vehicle was a handgun, money from the Erie,
Pennsylvania Huntington Bank robbery, the clothing worn by Brewster in the bank robberies as
depicted in the surveillance photographs and the leather notebook carried by Brewster into the
banks he robbed. Brewster was then arrested on the Erie, Pennsylvania, arrest warrant and he was
returned to the Western District of Pennsylvania to face federal prosecution.Prior to imposing sentence, Judge McLaughlin commented on the fact that Brewster's claim
of a terminal disease was untrue and stated that, "The impetus for the crimes was simply greed, not
grief."Assistant United States Attorney Marshall J. Piccinini prosecuted this case on behalf of the
government.U.S. Attorney Hickton commended the Federal Bureau of Investigation in each of the
jurisdictions, the Erie Bureau of Police, the Arvada Police Department, the Flagstaff Police
Department, the Pocatello Police Department, the Roy City Police Department, the Winston-Salem
Police Department, the Altamonte Springs Police Department, the Chattanooga Police Department,
the Bloomington Police Department, the Columbia Police Department, the O'Fallon Police
Department and the Roland Police Department for the investigations leading to the successful
prosecution of Brewster.Bucket List Bandit Sentenced to 135 Months in PrisonRead the Press Release
Erie, PA – A former resident of Pensacola, Florida, has been sentenced in federal court to
135 months in prison and ordered to make restitution to the banks involved on his conviction of
bank robbery, United States Attorney David J. Hickton announced today.Chief United States District Judge Sean M. McLaughlin imposed the sentence on Michael
Eugene Brewster.According to information presented to the court, between June 21, 2012 and September 10,
2012, Brewster robbed eleven banks across the nation. In the course of the bank robbery spree
Brewster used a similar method of operation and entered each bank, without being disguised, wore
similar clothes, carried a dark leather notebook, presented demand notes containing similar
threatening language to each of the victim tellers and left the scene driving a 2009 black SUV,
which Brewster had stolen in Pensacola, Florida.In his last bank robbery in Erie, Pennsylvania, on September 10, 2012, Brewster entered the Huntington National Bank, located at 2185 West 12th Street and presented a demand note, claiming that he had a gun and that the teller had one minute to comply. Brewster then claimed to the teller that he had cancer and did not care what happened. Brewster obtained bank proceeds and fled the area in a black SUV. Bank surveillance images and from area surveillance cameras clearly depicted Brewster and the vehicle he used.
Comparing the Erie Huntington Bank surveillance photographs with those from the ten other bank
robberies that had occurred throughout the United States confirmed that each robbery had been
committed by the same person. On September 12, 2012, the FBI received a tip that the bank robber
depicted in the surveillance photographs was Brewster. A review of Brewster's Florida driver's
license confirmed Brewster's identity as the bank robber. In addition, evidence disclosed that an
arrest warrant had been issued for Brewster alleging that he had stolen a black Chevy Captiva SUV
in Pensacola, Florida, on June 11, 2012. Once Brewster's identity had been established in the Erie,
Pennsylvania robbery, the FBI and law enforcement partners in the jurisdictions of the other ten
bank robberies confirmed his identity in those cases as well.Brewster entered the Chase Bank at 5250 Wadsworth Boulevard in Arvada, Colorado, on
June 21, 2012, the Chase Bank at 1484 South Milton Road in Flagstaff, Arizona, on June 27, 2012;
and the Ireland Bank at 486 Yellowstone Avenue in Pocatello, Idaho, on July 6, 2012, and obtained
federally insured funds after presented a threatening note demanding money. In Roy, Utah, on July
6, 2012, Brewster entered the Wells Fargo Bank located at 5603 South 1900 West, and obtained
money after presenting a threatening demand note claiming that he had only four months to live.
In Winston-Salem, North Carolina, on July 20, 1012, Brewster entered a Bank of America at 1209
Silas Creek Parkway and presented a threatening demand note indicating that he had nothing to lose
and threatening to come back after the teller if any silent alarm was activated. Brewster obtained
no money from the Wells Fargo Bank. Then, at the Regions Bank at 360 West State Road 436 in
Altamonte Springs, Florida, on July 27, 2012, the BB&T bank at 2120 Gunbarrel Road in
Chattanooga, Tennessee, on August 3, 2012; the PNC bank at 2217 West Market Street in
Bloomington, Illinois, on August 17, 2012; the Lamdmark Bank at 202 North Stadium Boulevard in
Colombia, Missouri, on August 29, 2012; and the Lindell Bank at 4521 Highway K in O'Fallon,
Missouri, on August 30, 2012, Brewster obtained money after presenting threatening demand notes,
including a claim that he was armed with a gun.On September 13, 2012, a police officer with the Roland Police Department in Roland,
Oklahoma, conducted a traffic stop of a black, 2009 Chevy Captiva vehicle and identified Brewster
as the driver and sole occupant. A fake Utah license plate had been affixed to the vehicle. A
computer check of Brewster's name revealed Brewster's outstanding arrest warrant in Pensacola,
Florida, for allegedly stealing the Chevy Captiva vehicle. Brewster was then taken into custody and
was found to be in possession of money from the Erie, Pennsylvania, Huntington bank robbery.
Among other items located in the Captiva vehicle was a handgun, money from the Erie,
Pennsylvania Huntington Bank robbery, the clothing worn by Brewster in the bank robberies as
depicted in the surveillance photographs and the leather notebook carried by Brewster into the
banks he robbed. Brewster was then arrested on the Erie, Pennsylvania, arrest warrant and he was
returned to the Western District of Pennsylvania to face federal prosecution.Prior to imposing sentence, Judge McLaughlin commented on the fact that Brewster's claim
of a terminal disease was untrue and stated that, "The impetus for the crimes was simply greed, not
grief."Assistant United States Attorney Marshall J. Piccinini prosecuted this case on behalf of the
government.U.S. Attorney Hickton commended the Federal Bureau of Investigation in each of the
jurisdictions, the Erie Bureau of Police, the Arvada Police Department, the Flagstaff Police
Department, the Pocatello Police Department, the Roy City Police Department, the Winston-Salem
Police Department, the Altamonte Springs Police Department, the Chattanooga Police Department,
the Bloomington Police Department, the Columbia Police Department, the O'Fallon Police
Department and the Roland Police Department for the investigations leading to the successful
prosecution of Brewster.Brownstown Man Sentenced for Theft of United States Mail Fom Postal EmployeeRead the Press Release
Admitted Snatching Package from Postal Employee Instead of Paying
A Brownstown, Illinois, man, convicted of Theft of United States Mail, was sentenced in United States District Court in East St. Louis, Illinois, on August 15, 2013, to 6 months of incarceration, 3 years of supervised release and ordered to pay restitution to the United States Postal Service, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today.
Greggory L. Carroll, 26, pled guilty to the charges on April 22, 2013. Carroll admitted that on April 24, 2012, he entered the United States Post Office in Brownsville, Illinois, to pick up a package containing bath salts. He further admitted that he grabbed the package from the hands of a postal employee and ran from the building when he did not have money to pay for the “Cash on Delivery” shipment.
The investigation was conducted by the United States Postal Inspection Service and was prosecuted by Assistant United States Attorney Ranley R. Killian.
Bank Teller Sentenced for Embezzling from Customer AccountsRead the Press Release
Stole $144,908 from Elderly Bank Customers and a Restaurant’s Account, Failing to Pay at Least $30,000 in Taxes Owed on the Embezzled Funds
Greenbelt, Maryland – U.S. District Judge Paul W. Grimm sentenced Irene Quansah, age 37, of Germantown, Maryland, today to two years in prison followed by five years of supervised release for embezzlement and income tax evasion. Judge Grimm also entered an order that Quansah forfeit and pay restitution of $144,908.33 to the victim bank and $30,000 to the IRS.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; Special Agent in Charge Thomas J. Kelly of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office.
“Ms. Quansah’s embezzlement scheme to steal from her employer’s customer bank accounts was illegal and her act of deliberately underreporting her embezzlement income on her federal tax returns is unlawful,” said Thomas J. Kelly, Special Agent in Charge, IRS Criminal Investigation, Washington DC Field Office. “IRS Criminal Investigation will continue to work with our law enforcement partners to bring to justice those that abuse their positions of trust and steal from innocent victims. Today’s sentencing is a reminder that there are detrimental consequences for this type of criminal behavior.”
According to her plea, from November 2010 to July 2012 Quansah used her position as a teller coordinator at a bank to fraudulently withdraw funds from customers’ accounts and fail to deposit customer funds.
Specifically, on at least 100 occasions Quansah removed cash from cash deposits made by a restaurant at an ATM, stealing a total of $35,696.29. On December 28, 2010, she withdrew $10,000 from the account of an elderly woman, returning the money from funds drawn off of her teller vault only after the customer complained to bank officials about the unauthorized withdrawal. On five occasions from December 2010 to April 2011, Quansah withdrew a total of $11,550 from another elderly woman’s account, falsely noting that the fraudulent withdrawals were done at the customer’s request.
In February 2011, the daughter of a third elderly woman presented savings bonds to Quansah to redeem and deposit the proceeds into the elderly mother’s account. Quansah told the daughter that she needed to leave the bonds with her so that Quansah could redeem them over the next few months. Quansah, however, deposited only a portion of the proceeds of the bonds into the customer’s account, stealing at least $9,975.48. Similarly, in September 2011 Quansah was asked to redeem savings bonds valued at $25,179.48 and deposit the proceeds into another elderly woman’s account, but Quansah deposited only $13,342.92, retaining the remainder for her own benefit.
On nine occasions from September 2011 to March 2012, Quansah stole a total of $65,850 from an elderly couple’s account, again falsely noting that the withdrawals were made at the couple’s request. After the elderly man complained to bank officials about these unauthorized withdrawals, Quansah refunded the account using funds drawn off of a friend’s line of credit. About an hour later, Quansah debited her teller vault to repay her friend’s line of credit.
On August 1, 2012 the bank made a surprise cash audit of Quansah’s cash drawer and teller vault which revealed a shortage of $87,900. Quansah admitted to taking the money.
The total amount Quansah embezzled was $144,908.33. She did not report any of the embezzled funds to the IRS on her tax returns and thus owed between $30,000 and $80,000 for underreporting her income.
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.
United States Attorney Rod J. Rosenstein thanked the FBI and IRS Criminal Investigation for their work in the investigation. Mr. Rosenstein praised Assistant U.S. Attorneys Christen A. Sproule and Kelly O'Connell Hayes, who prosecuted the case.
Avon Man Sentenced in Child Pornography CaseRead the Press Release
ROCHESTER, N.Y.-- U.S. Attorney William J. Hochul, Jr. announced today that Timothy P. Glavin, 32, of Avon, N.Y., who was convicted of production of child pornography, was sentenced to 15 years in prison and 15 years of supervised release by U.S. District Judge David G. Larimer.
Assistant U.S. Attorney Tiffany H. Lee, who handled the case, stated that the defendant used a minor under the age of 13 to produce images of that minor engaging in sexually explicit conduct. In August 2012, the images were discovered on the defendant's cell phone by his wife who reported the images to the Livingston County Sheriff's Office.
The sentencing is the culmination of an investigation on the part of Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent in Charge James C. Spero, the Livingston County Sheriff's Office, under the direction of Undersheriff James Szczesniak, and the Livingston County District Attorney's Office under the direction of Greg McCaffrey.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.Attorney General Recognizes Eastern District of Texas EmployeesRead the Press Release
Department of Justice
Office of Public AffairsWASHINGTON – An Eastern District of Texas prosecution team was one of 154 members of the Department of Justice recognized by Attorney General Eric Holder and Executive Office for U.S. Attorneys (EOUSA) Director H. Marshall Jarrett with a 2013 Director’s Award.
On Aug.15, 2013, U.S. Attorney John M. Bales recognized Deputy Criminal Chief/Assistant U.S. Attorney in Charge of the Plano Office Shamoil T. Shipchandler, Assistant U.S. Attorney Christopher A. Eason, and former Assistant U.S. Attorney Richard J. Johnson in a ceremony at the U.S. Attorney’s Office in Plano.
In personalized letters to the recipients, Attorney General Holder told the three lawyers, “You and your team are responsible for the successful prosecution of the largest mortgage fraud scheme in the Eastern District of Texas to date, and one of the largest in Texas history. Forty defendants conspired to defraud lending institutions by convincing them to approve mortgage loans for residential properties with fraudulently inflated values. Your dedication to this case led to 37 of 40 defendants pleading guilty, successful verdicts in two trials, sentences of up to 120 months’ imprisonment, restitution orders totaling more than $100 million, and forfeitures in excess of $11 million.”
The complex mortgage fraud scheme was led by defendant John Barry, and included title attorneys, escrow officers, real estate agents, loan officers, appraisers, property flippers, and straw buyers. The scheme involved over 114 residential properties in cities throughout Texas, including Allen, Arlington, Cedar Hill, Coppell, Corinth, Cypress, Dallas, Flower Mound, Fort Worth, Frisco, Granbury, Heath, Highland Village, Houston, Keller, Lantana, Lewisville, Little Elm, Lubbock, Magnolia, McKinney, Plano, Roanoke, Southlake, spring, the Woodlands, and Willis. Shipchandler served as lead counsel during the investigation and early prosecution of the case and as a member of the trial team. Johnson led the trial team for the two trials and Eason served as co-counsel and played a crucial role in streamlining the evidence in the massive case.
“Each day the members of the U.S. Attorneys’ community go to work for the citizens of this country with one goal in mind – to do everything they can to protect the rights of all Americans,” said EOUSA Director Jarrett. “I am continually humbled by their resiliency, dedication, and unparalleled work ethic to accomplish this noble mission. Today’s awardees exemplify what it truly means to be a patriot and it is an honor to recognize them for their extraordinary service.”
“The Director’s Awards presented today were earned by individuals who toiled hundreds of hours, not for any notion of individual glory, but because they are driven to serve and to be instruments of justice where wrongdoing has occurred. Just as importantly, in a case like the Barry investigation, the entire office pitched in to a significant degree making it possible for the individual Assistant United States Attorney’s to be successful. I am so proud of Shamoil, Chris and Jay who represent the finest principles in prosecution; they are fair, persistent and highly skilled,” said U.S. Attorney Bales.Arrest and Indictment of Seventy-Five Individuals for Social Security FraudRead the Press Release
SAN JUAN, P.R. - On August 16, 2013 a Federal Grand Jury in the District of Puerto Rico returned 73 separate Indictments charging three doctors, Wildo Vargas, Rafael Miguez Balseiro, and Erica Rivera Castro; one non-attorney representative, Samuel Torres Crespo, a retired Social Security employee; and 71 other social security claimants for fraud in the application process of Social Security Administration (SSA) disability insurance benefits in Puerto Rico, announced United States Attorney for the District of Puerto Rico, Rosa Emilia Rodríguez Vélez.
For the past two years the FBI and SSA-OIG have jointly investigated fraud in claims for SSA disability insurance benefits. Analysis conducted by SSA of the volume of pending, processed, and approved claims suggested that Puerto Rico is one of the top districts in the country for the commission of this type of fraud. The investigation focused on historical claimants, whose claims were medically supported by suspect physicians.
The SSA is responsible for the implementation of the Disability Insurance Benefits Program. The SSA provides cash benefits to workers with severe, long-term disabilities, who have worked in SSA covered employment for the required length of time. Spouses and dependent children of disabled workers may also be eligible to receive benefits.
Pursuant to SSA regulations, a claimant must prove to SSA that he or she is disabled by furnishing medical and other evidence with the application. The application and supporting evidence would then be evaluated by SSA to determine the claimant’s medical impairments and determine the effect of the impairment on the claimant’s ability to work on a sustained basis.
Samuel Torres Crespo would complete an SSA disability insurance application for a claimant in a manner calculated to justify a non-existent medical disability, in order to improperly deceive and persuade the SSA to award the claimant retroactive and future disability benefit payments. Torres Crespo charged and collected a fee equal to 25% of the retroactive lump sum payment made by the SSA, but not to exceed $6,000.00 dollars. The government has civilly forfeited approximately $1.7 million dollars and other valuables from Torres Crespo.
The doctors, Wildo Vargas, Rafael Miguez Balseiro, and Erica Rivera Castro, would evaluate, treat, and diagnose the claimants in a manner calculated to justify a non-existent disability in order to improperly deceive and persuade the SSA to award the claimants with retroactive and future disability benefit payments. The doctors would receive between $150.00 to $500.00 dollars for the submission of their medical reports to SSA.
The defendants who illegally received the benefits are Myrna M. Santos Rivera, Nevelline Tirado Gomez, Mayra L. Pantoja Carrelo, Obette Santiago Maldonado, Julio A. Crespo Crespo, Arnaldo Pino Hernandez, Jose Perez, Carmen L. Gonzalez, Olvin Rosado Ballester, Arlivone Rodriguez Rivera, Carlos Colon Gonzalez, Liz D. Vega Mena, Joanna Rodriguez, Lynette Figueroa Vazquez, Gerardo Torres Lopez, Aixa Prado Serrano, Joel Pabón Hernandez, Glorivette Montalvo Guzman, Ruth Adan, Lizbeth M. Martinez Velez, Juan J. Malpica Nieves, Victor R. Santiago, Carmen Noriega, Carmen R. Cortes Nieves, David Rodriguez Colon, Alex E. Morales Quijano, Cynthia E. Rivera Mejías, Ismael Rivera Figueroa, Enrique Torruella, Jismel A. Lozada Pabon, Jaime M. Santiago Piñeiro, Nancy Melendez Crespo, Madelyn Molina Valentin, Benny Bonet Rivera, Jose L. Orta Rivera, Jorge L. Morales Melendez, Hector L. Rodriguez Marrero, Luz D. Figueroa Diaz, Eduardo Serrano Quintero, Lissette Vidot Santiago, Victor O. Rodriguez Arroyo, Francisco L. Cintron Otero, Aurora Millet Millet, Neftalí Vazquez Erazo, Misael Ramirez, Jose L. Lozada Maldonado, Angel F. Declet, Maribel Matos Soto, Adelmis Rosario Hernandez, Nydia E. Rivera Rodriguez, Brenda I Rivera Rivera, Elsie Padilla Caban, Manuel Tirado Maldonado, Miguel Rivera Ayala, Luis R. Santiago Rodriguez, Juan C. Colon Casanova, Juan Arocho De Jesus, Adahid Galàn Figueroa, Norma Calderon Ortiz, Leinette Bravo Maldonado, Alberto L. Pagan Rosario, Ruben Ortiz Rodriguez, Julio C. Baquero Torres, Doreli Pagan Castro, Sonia Candelario Castro, Carmen M Torres Hernandez, Luis Pastrana Pastrana, Maribel Varela Fuentes, Javier F. Declet Carrasquillo, Sandra I. Rios Serrano, and Hector L. Rodriguez Rodriguez. All the defendants are facing forfeiture allegations totaling more than $900,000.00 dollars.
“These 75 individuals are charged with defrauding the Social Security Administration by making false claims for social security benefits,” said United States Attorney Rosa Emilia Rodríguez-Vélez. “The Department of Justice is committed to investigate and prosecute those who engage in these types fraudulent schemes,” stated Rodríguez-Vélez.
Special Agent-in-Charge Edward J. Ryan of the Office of the Inspector General, Office of Investigations of the Social Security Administration stated “This fraud conspiracy scheme involving unscrupulous medical professionals, a non-attorney representative, and SSA disability claimants has been exposed and those involved are being brought to justice. It was only after an extensive analysis of medical source documentation in voluminous SSA files that SSA and OIG identified the fraudulent pattern investigated by SSA OIG, the FBI San Juan Office, and the Puerto Rico Police Department. This intensive and complex investigative work consisted of numerous interviews, hundreds of surveillances, and other investigative activities that I cannot detail. The evidence was provided to the U.S. Attorney’s Office which culminated in the arrests this morning. However, our cooperative investigative work in this conspiracy continues. OIG will continue to work with our partners to protect the integrity of the Social Security Trust Fund.”
The case was investigated by the Social Security-OIG with the collaboration of the FBI. The case was indicted by First Assistant U.S. Attorney Maria Dominguez.
Alabama State Employee Sentenced to Federal Prison for Stolen Identity Refund FraudRead the Press Release
Montgomery, Alabama - Chequlia Motley of Montgomery, Ala., was sentenced to 36 months in federal prison yesterday for conspiracy and aggravated identity theft, Assistant Attorney General Kathryn Keneally of the Justice Department’s Tax Division and U.S. Attorney for the Middle District of Alabama George L. Beck, Jr., announced. Motley had previously pleaded guilty to those charges in May.
According to Motley’s plea agreement, she was a former state employee who stole identities from state databases and sold them to co-conspirators. As the sentencing hearing showed, Motley had previously worked for the Alabama State Employees’ Insurance Board and stole the personal information of over 100 state workers and their family members from the databases maintained by the Board. She provided this information to Veronica Temple, Yolanda Moses, and Barbara Murry, who used the stolen identities to file false tax returns that fraudulently requested tax refunds from the IRS. Temple, Moses, and Murry were previously convicted and each sentenced to 57 months in prison in February.
In addition to the sentence of imprisonment, Motley was ordered to pay $179,946 in restitution to the Internal Revenue Service.
The case was investigated by agents of the IRS - Criminal Investigation. Trial Attorneys Michael Boteler and Jason Poole of the Justice Department’s Tax Division prosecuted the case, with the assistance of the U.S. Attorney’s Office for the Middle District of Alabama and, in particular, Assistant United States Attorney Todd Brown.
Additional information about the Tax Division and its enforcement efforts may be found at justice.gov/tax.
PRESS CONTACT: Clark Morris
Email: [email protected]
Telephone: (334) 551-1755
Fax: (334) 223-7617Additional Charge Filed Against Pulaski County Sheriff’s Deputy for Federal Civil Rights ViolationRead the Press Release
WASHINGTON, D.C. - United States Attorney for the Western District of Kentucky David J. Hale and Acting Assistant Attorney General for the Civil Rights Division Jocelyn Samuels announced that Steven Molen, a Sheriff’s Deputy with the Pulaski County Sheriff’s Office, was indicted by a federal grand jury yesterday on one count of violating the civil rights of a victim by using excessive force in August 2008.
The indictment alleges that on August 24, 2008, in Russell County, Kentucky, located in the Western District of Kentucky, Molen, age 48, assaulted a victim identified in the indictment as “C.F.,” resulting in bodily injury.
On June 27, 2013, a federal grand jury in the Eastern District of Kentucky indicted Molen on two other counts of violating the civil rights of different victims by using excessive force in 2009 and 2011.
The investigation was conducted by the Louisville division of the FBI. The cases against Molen will be prosecuted by Assistant United States Attorney Joshua Judd from the Western District of Kentucky, Assistant United States Attorneys Pat Molloy and Ron Walker from the Eastern District of Kentucky, and Trial Attorney Ali Ahmad from the Civil Rights Division.
The indictment of a person by a Grand Jury is an accusation
only and that person is presumed innocent until and unless
proven guilty.57 People Linked to Drug Trafficking Organizations That Smuggled Narcotics from Mexico in PVC Pipes Charged in Federal CourtRead the Press Release
LOS ANGELES -- A federal drug task force today arrested 18 people linked to three drug trafficking organizations that smuggled narcotics from Mexico in PVC pipes typically hidden in the axles of commercial trucks that ended up at truck yards located in South Los Angeles and southern Los Angeles County.
The 18 defendants arrested this morning are among 57 people charged in two indictments and one criminal complaint filed in United States District Court. Authorities continue to search for the remaining defendants. During the course of an investigation that started in early 2011, authorities seized more than 2,400 pounds of methamphetamine, 30 kilograms of cocaine, 16 kilograms of white heroin, 20 kilograms of brown heroin, and more than $1.2 million in suspected narcotics proceeds, and recovered 18 firearms. This morning’s enforcement resulted in the seizure of an additional 7 pounds of methamphetamine, 3 firearms, four vehicles, approximately $50,000 in cash and an operational methamphetamine laboratory.
“As the means and methods that drug trafficking organizations use evolve, so will law enforcement evolve to meet the challenge,” said United States Attorney André Birotte Jr. “The allegations here describe a wide-ranging conspiracy to exploit aspects of our nation’s trucking and transportation system and funnel enormous amounts of dangerous narcotics into this country. The arrests we announce today dismantle that conspiracy and disrupt this threat to public safety.”
The investigations that led to this morning’s takedown were conducted by the Los Angeles High Intensity Drug Trafficking Area (HIDTA)/Southern California Drug Task Force, a federally funded group comprised of federal and local law enforcement agencies to include the Drug Enforcement Administration (DEA), U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), and Internal Revenue Service -Criminal Investigation and in coordination with the Azusa Police Department, South Gate Police Department, Los Angeles County Sheriff’s Department and Whittier Police Department.
“Through the cooperation of federal, state and local law enforcement, thousands of pounds of methamphetamine, cocaine and heroin have been seized, with a combined street value in the tens of millions of dollars,” said Anthony Williams, DEA Special Agent in Charge. “These drugs were en-route to our communities and neighborhoods. Today’s arrests have taken those responsible for distributing these dangerous drugs off our streets to face justice in federal court.”
“The criminal networks targeted in this case exploited one of the nation’s busiest transportation corridors to mask the movement of staggering amounts of contraband - the volume of methamphetamine being smuggled by these organizations is virtually unprecedented,” said Claude Arnold, special agent in charge for HSI Los Angeles. “Today, as a result of our collective enforcement efforts, we’ve literally knocked the wheels off of a highly sophisticated drug distribution scheme that had ties to at least five states.”
The investigation initially looked into a drug trafficking organization run by the Mexico-based Miguel Angel Molinero-Castro. The Molinero organization used truck yards in South Gate and Wilmington to receive large quantities of controlled substances hidden in PVC pipes that were further concealed in tractor trailer axles.
According to the criminal complaint that charged Molinero and 37 others related his alleged drug trafficking ring, Molinero arranged for narcotics to be transported via truck from Mexico to Nogales, Arizona, where co-conspirators would take control of the shipments. The narcotics were then transported either to other distributors in Arizona or to the Los Angeles area.
The criminal complaint charges 38 defendants with two counts: conspiracy to distribute controlled substances and possession with intent to distribute controlled substances.
A related indictment charges eight defendants involved in another drug distribution ring that also allegedly smuggled narcotics from Mexico into the United States inside PVC pipes hidden inside truck axles.
An indictment in a third case charges eight defendants in a conspiracy to distribute heroin, cocaine and methamphetamine. This case concerns narcotics smuggled from Mexico in PVC pipes and distributed from a truck yard in South Gate.
Additional agencies that provided substantial assistance during this investigation and this morning’s takedown include. U.S. Customs and Border Protection, Los Angeles-SRT; the Azusa Police Department; DEA Offices in Bakersfield and Ventura, the Ventura County Combined Agency Team (VCAT), the California Highway Patrol; the Los Angeles Sheriff’s Department, California Multi-Jurisdictional Methamphetamine Enforcement Team; LA IMPACT, and the Anaheim Police Department.
Release No. 13-105
16 People Sentenced to Lengthy Terms for Drug Trafficking and Money LaunderingRead the Press Release
LAREDO, Texas – Several members of a large scale drug trafficking and money laundering organization operating out of the Zapata area from approximately 2006 through 2011 have received significant federal prison sentences, United States Attorney Kenneth Magidson announced today.
The sentences were imposed in Laredo federal court by U.S. District Judge Diana Saldaña yesterday and Tuesday of this week.
The convictions and sentences were the result of a more than three-year investigation into a drug trafficking and money laundering organization based out of Zapata. The organization was led by Pedro Navarro Jr., 38, of Zapata, who received a sentence of 364 months in federal prison.
The others primarily worked for Navarro and were responsible for transporting drugs and/or large amounts of cash which represented the proceeds of drug sales for Navarro or helping others to do so. These 15 defendants, 14 of whom are residents of various places in the Zapata area, were sentenced to varying terms as outlined below.
Alex Navarro, 23: 131 months
Andres Quintero-Ortiz, 48: 127 months
Servando Guerrero Jr., 38: 174 months
Sandalio Ramos, 44: 224 months
Rene Davila, 31: 93 months
Leonel Rodriguez, 43: 240 months
Juan Luis Rivera, 31: 131 months
Jorge Grajeda Jr., 30: 46 months
Juan Antonio Valadez Sr., 55: 63 months
Jose Luis Gonzalez-Chapa, 24: 93 months
Judith Zamora, 27: 93 months
Claudia Medrano, 28: 108 months
Leonides Navarro, 23: 87 months
Maria Micaela Berrones, 25: 58 months
James Clinton Crabtree (of Immokalee, Fla.), 30: 33 monthsThe members of these conspiracies would primarily transport drugs which had been brought into the United States from Mexico from Zapata to other parts of the United States. The drugs would typically be smuggled into the United States in small boats which crossed Falcon Lake at night from Mexico into Zapata. The boats then docked at a house maintained by Navarro on the shores of Falcon Lake where the drugs were unloaded and stored before being transported. Navarro and his co-conspirators subsequently transported these drugs from Zapata to other parts of Texas and beyond, to include the South Florida area. The members of the conspiracy also would then bring the proceeds from the sales of these drugs back to the Zapata area and ultimately into Mexico in order to promote the continuation of the drug trafficking activities. This investigation ultimately led to the conviction of Navarro and the others as well as the seizure of more than five kilograms of methamphetamine and 6,000 kilograms of marijuana.
Over the course of the conspiracy, evidence further showed the members of conspiracy were also responsible for generating proceeds from that activity in the amount of at least $18 million.
This case is the result of an investigation conducted by the Drug Enforcement Administration with assistance from Internal Revenue Service - Criminal Investigation, Border Patrol, Homeland Security Investigations, Texas Department of Public Safety and Webb County Sheriff’s Department. Assistant U.S. Attorney Arthur R. Jones is prosecuting.
Wednesday 14 August 2013
Wyoming Couple Sentenced to A Total of 17 Years’ Prison on Oxycodone Distribution and Money Laundering ChargesRead the Press Release
Couple received thousands of pain pills by mail from Florida; deposited more than $300,000 in bank as payment
BECKLEY, W.Va. – A Wyoming County couple was sentenced to a total of 17 years in federal prison for conspiracy to distribute oxycodone and money laundering charges, announced U.S. Attorney Booth Goodwin. Christopher Brooks, 36, was sentenced to ten years in prison. Brooks’ co-defendant and wife Jennifer Brooks, 29, both of Glen Fork, Wyoming County, was sentenced to seven years in prison. The sentences were handed down today by United States District Judge Irene C. Berger in Beckley. Both defendants previously pleaded guilty in February.
From at least March 2010 until April 27, 2012, Mr. and Ms. Brooks received packages by mail containing oxycodone from a known individual located in Tampa, Fla. Mr. and Ms. Brooks received at least 130 express mail packages containing approximately 17,000 30-milligram oxycodone tablets between October 15, 2010 and April 27, 2012. Mr. and Ms. Brooks deposited at least $300,000 cash into bank accounts that were owned and controlled by a known individual in exchange for the oxycodone tablets.
In a related matter, Keith Keiffer, 32, of Calvin, Nicholas County, was sentenced last month to four years in federal prison for his role in an oxycodone distribution and money laundering scheme. During the scheme, Keiffer received at least 15 express mail packages that contained a total of approximately 1,400 30-milligram oxycodone tablets from an individual located in Tampa, Fla. In exchange for the oxycodone tablets, Keiffer deposited at least $30,000 into bank accounts that were owned and controlled by his pill source of supply.
The Southern Regional Drug and Violent Crime Task Force, the U.S. Postal Inspection Service, the Internal Revenue Service - Criminal Investigation, the Drug Enforcement Administration and the Wyoming County Sheriff’s Department conducted the investigations. Assistant United States Attorney Haley Bunn handled the prosecutions.
The cases were prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers in communities across the Southern District.
Winthrop Insurance Advisor Sentenced to over Eight Years for Investment Fraud SchemeSeven Million Dollar Loss over 10-year PeriodRead the Press Release
BOSTON - A Winthrop man was sentenced late yesterday in federal court for his role in a $7 million fraud scheme that centered on steering clients into investments in “life settlements.”
United States District Court Judge Nathaniel M. Gorton sentenced Joseph Gennaco, 68, of Winthrop and Jupiter, Fla., to 100 months in prison to be followed by three years of supervised release for 27 counts of mail and wire fraud. He was ordered to pay $7 million in restitution to 40 victims. In February 2013, Gennaco pleaded guilty to all counts in the indictment. Gennaco has been held in custody since November 2011, when his bail was revoked because, among other things, he continued to defraud people even after he had been charged.
From 2001 through 2011, Gennaco defrauded customers of his insurance business by claiming that their money would be invested in various insurance-based instruments. Instead Gennaco diverted the customers’ funds for his own personal and business purposes. Gennaco operated in the name of several entities, including Gennaco & Associates, Oceanview Financial Services, GCT Trust, and Crescent Management Group. Gennaco told investors that their funds would be invested in one or more life insurance policies - or “life settlements” - and that the investments would be repaid with a “guaranteed” profit from the sale of those policies. In reality, Gennaco took investors’ funds for his own uses, allowed insurance policies to lapse by failing to pay the premiums, and failed to repay investors when he sold policies that had been purchased as investments. By continually reassuring investors that their money was safe, and by offering a variety of phony excuses for the delay in repaying investors, Gennaco strung along many of his victims for years.
United States Attorney Carmen M. Ortiz; Kevin M. Niland, Inspector in Charge of the United States Postal Inspection Service in Boston; and Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. Suffolk County District Attorney Daniel Conley’s office; Secretary of the Commonwealth’s Securities Division; the Commonwealth’s Office of Consumer Affairs and Business Regulation, Division of Insurance; and the United States Trustee’s Office in Boston also provided assistance in the investigation. The case is being prosecuted by Assistant U.S. Attorney Mark J. Balthazard of Ortiz’s Economic Crimes Unit.
Winston County Man Sentenced to Five Years in Prison for Arson at Poultry Company OfficeRead the Press Release
TUSCALOOSA – A federal judge today sentenced a Northwest Alabama man to five years in prison for a December fire at a Marshall Durbin office building in Haleyville, announced U.S. Attorney Joyce White Vance and Bureau of Alcohol, Tobacco, Firearms and Explosives Special Agent in Charge Jeffrey L. Fulton.
U.S. District Judge L. Scott Coogler sentenced CHARLES WILLIAM HEAVNER JR., 43, of Hackleburg, on one count of maliciously damaging the Marshall Durbin Field Operations Office with fire on Dec. 4. Heavner pleaded guilty to the charge in April. Heavner must pay the poultry company $500 in restitution. He will remain on supervised release for three years after completing his prison sentence.
According to Heavner's plea agreement and other court documents, the arson took place as follows:
Marshal Durban had not provided baby chicks for Heavner to raise because of maintenance problems with the chicken housing facilities on his farm. Heavner was angry about that decision on the morning of Dec. 4 and had threatened physical violence against the company's broiler manager, Joe Bolding. Bolding called an employee at the operations office, warned her of Heavner's threats and told her to lock the office door. As she did so, she saw Heavner pull into the parking lot, take an orange five-gallon bucket and a walking cane from his truck and approach the building with liquid sloshing out of the bucket. She told him he could not come in, but after she locked the door, he tried to kick it in.
Employees outside the office building who were called to help arrived to find the front of the building on fire. They used fire extinguishers to put out the flames. The orange bucket was recovered in the back of a company truck parked near the building and Heavner's cane and a cigarette lighter were found beside the building. Traces of gasoline were discovered in the bucket.
Heavner fled and was later arrested in Oklahoma.
The ATF, Alabama State Fire Marshal, U.S. Marshals Service, and the Winston County Sheriff's Office investigated the case. Assistant U.S. Attorney Michael W. Whisonant Sr. prosecuted the case.