Latest Records
Newest first across public DOJ and U.S. Attorney press releases.
30 September 2013
Shiprock Man Sentenced to Seven Years for Using a Firearm in Connection with Robbery on the Navajo Indian ReservationRead the Press Release
ALBUQUERQUE – Eddie Shirley, 28, an enrolled member of the Navajo Nation who resides in Shiprock, N.M., was sentenced this morning to seven years in federal prison for using and brandishing a firearm in relation to a crime of violence on the Navajo Indian Reservation. Shirley will be on supervised release for seven years after he completes his prison sentence.
Shirley was arrested in Dec. 2012, on a criminal complaint charging him and co-defendant, Jerrileta Singer, 32, with the armed robbery of a Sonic Drive-In Restaurant in Shiprock on Nov. 30, 2012. He has been in federal custody since his arrest. Singer subsequently was arrested in Jan. 2013. The two were then indicted and charged with (1) robbery, and (2) using and brandishing a firearm during and in relation to a crime of violence.
Shirley pleaded guilty on June 25, 2013 to Count 2 of the indictment and admitted using a firearm to rob the Sonic Drive-In in Shiprock on Nov. 30, 2012. Shirley acknowledged that a female participated in the robbery and that together they used force, intimidation and violence to take money from the restaurant’s employees.
On July 25, 2013, Singer pleaded guilty to Count 1, the robbery charge, of the indictment and admitted her role in robbing four individuals in the restaurant by use of force, violence and intimidation and taking money belonging to the restaurant. Singer faces a maximum of 15 years in prison when she is sentenced. Her sentencing hearing is scheduled for Oct. 28, 2103.
This case was investigated by Farmington office of the FBI and the Shiprock office of the Navajo Nation Division of Public Safety, and is being prosecuted by Assistant U.S. Attorney Novaline D. Wilson.
Seven Individuals Convicted on Drug ChargesRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-7725 ● Contact: Chris Zumpetta-Parr, Public Affairs SpecialistFollow us on Twitter @NDWVnews
ELKINS, WEST VIRGINIA — United States Attorney William J. Ihlenfeld, II announced that seven individuals recently entered pleas of guilty in Federal Court in Elkins before Magistrate Judge John S. Kaull.
CHRISTOPHER MICHAEL FISCHER, age 27, of Moorefield, West Virginia, entered a plea of guilty to “Possession of Pseudoephedrine to be Used in the Manufacture of Methamphetamine.” FISCHER, who is free on bond pending sentencing, faces up to 20 years in prison.
ROGER ALLEN SEE, age 23, of Lost River, West Virginia, entered a plea of guilty to “Possession of Material to be Used in the Manufacture of Methamphetamine.” SEE, who is free on bond pending sentencing, faces up to 10 years in prison.
This case was investigated by the Moorefield Police Department, the West Virginia State Police-Bureau of Criminal Investigations and the Hardy County Sheriff’s Department.
JAMES FRANKLIN FLUHARTY, age 23, of Bridgewater, Virginia, entered a plea of guilty to “Possession of Pseudoephedrine to be Used in the Manufacture of Methamphetamine.” FLUHARTY, who is free on bond pending sentencing, faces up to 20 years in prison. This case was investigated by uniformed officers of the West Virginia State Police and the West Virginia State Police BCI unit.
JACK FRANCIS GIBBINS, age 35, of Moorefield, entered a plea of guilty to “Distribution of Heroin.”
GIBBINS, who is free on bond pending sentencing, faces up to 20 years in prison. This case was investigated by the Hardy County Sheriff’s Department, the Wardensville Police Department and the Moorefield Police Department.
MEGAN ROHRBAUGH, age 23, of Rio, West Virginia, entered a plea of guilty to “Distribution of Oxycodone.” ROHRBAUGH, who is free on bond pending sentencing, faces up to 20 years in prison.
LEONARDO RAMOS RODRIGUEZ, age 35, of Petersburg, West Virginia, entered pleas of guilty to one count of “Distribution of Oxycodone” and one count of “Felon in Possession of a Firearm.” RODRIGUEZ, who is in custody pending sentencing, faces up to 20 years in prison on the drug charge and up to 10 years in prison on the firearms charge.
This case was investigated by the West Virginia State Police, US Immigration and Customs Enforcement, Homeland Security Investigations (ICE/HSI), the Grant County Sheriff’s Department and the Grant County Probation Office.
TIMOTHY JUSTON WIMER, age 29, of Moorefield, entered a plea of guilty to one count of “Possession with Intent to Distribute Hydrocodone,” one count of “Possession with Intent to Distribute Oxycodone,” one count of “Possession with Intent to Distribute Methamphetamine,” and, one count of “Possession with Intent to Distribute Morphine.” WIMER, who is in custody pending sentencing, faces up to 10 years imprisonment on the hydrocodone charge and up to 20 years in prison on each of the other three drug charges.
This case was investigated by uniformed officers of the West Virginia State Police, the West Virginia State Police-BCI unit, ATF, the Moorefield Police Department, the Grant County Sheriff’s Department, the Hardy County Sheriff’s Department, the Petersburg Police Department and the Wardensville Police Department.
These cases were prosecuted by Assistant United States Attorney Stephen D. Warner.
Seattle Police and Community Partners Selected for $750,000 in Grants to Combat Human TraffickingRead the Press Release
The Seattle Police Department (SPD) and the International Rescue Committee in Seattle (IRC) will receive U.S. Justice Department grants in recognition of their leadership combatting human trafficking, announced U.S. Attorney Jenny A. Durkan. The two grants, $500,000 to SPD and $250,000 to IRC, will continue the work of the Washington Advisory Committee on Trafficking (WashACT). The funding pays for investigators working on human trafficking cases, and for services to victims of human trafficking.
“This funding will support vital work combatting human trafficking in western Washington, where strong partnerships have built a model program,” said U.S. Attorney Jenny A. Durkan. “The task force made up of federal, state and local law enforcement and community partners has helped more than 100 victims and prosecuted more than 60 cases of human trafficking.”
WashACT has served as a model for human trafficking task forces around the country due to the uniquely successful collaboration among this multi-disciplinary team. WashACT was one of three task forces chosen to develop and lead intensive immersion leadership training for other human trafficking task forces sponsored by the Department of Justice (DOJ). Further, WashACT leaders contributed significantly to DOJ’s Anti-Trafficking Task Force and are regularly called on to provide training and technical assistance on human trafficking and multi-disciplinary collaboration locally, nationally and internationally.
“We appreciate the assistance of this grant in that it will help further the efforts of the department and others in fighting human trafficking. Ultimately, it’s about making the victims whole again,” said Seattle Police Chief Jim Pugel.
“Nothing is more important in combating human trafficking than providing victims and survivors with the support they need to build new lives for themselves,” said Kathleen Morris, Program Manager for the Washington Anti-Trafficking Response Network (WARN). “This funding will allow IRC in Seattle and our WARN partners to provide essential support and services to those affected by human trafficking in our community.”
The grant to the Seattle Police Department is from DOJ’s Bureau of Justice Assistance (BJA). The grant to the International Rescue Committee in Seattle is from DOJ’s Office for Victims of Crime (OVC). The grants support the Enhanced Collaborative Model Task Force taking a comprehensive approach to combating all forms of trafficking—sex trafficking and labor trafficking of foreign nationals and U.S. citizens (male and female, adults and minors). Awards made by BJA support law enforcement agencies to coordinate the goals, objectives, and activities of the entire task force in close collaboration with the U.S. Attorney’s Office and victim service provider partner. Awards made by OVC support victim service organization to coordinate the provision of a comprehensive array of culturally and linguistically appropriate services to all trafficking victims identified within the geographic area impacted by the task force.
Santa Clara Pueblo Man Pleads Guilty to Assaulting Intimate PartnerRead the Press Release
ALBUQUERQUE – James Allen Moquino, 31, a member of Santa Clara Pueblo, N.M., pleaded guilty this morning to a federal assault charge, announced Acting U.S. Attorney Steven C. Yarbrough and DuWayne W. Honahni, Sr., Special Agent in Charge of District IV of BIA’s Office of Justice Services.
Moquino was arrested on July 5, 2013 based on an indictment charging him with assaulting a woman and causing her serious bodily injury. According to the indictment, Moquino committed the crime on Nov. 21, 2010, in Indian Country within Rio Arriba County.
During this morning’s proceedings, Moquino entered a guilty plea to the indictment and admitted that he assaulted his intimate partner and the mother of his child by repeatedly striking her in the head and face causing her to suffer serious bodily injury. Moquino further admitted that the assault occurred within Santa Clara Pueblo.
Moquino has been in federal custody since his arrest and remains detained pending his sentencing hearing, which has yet to be scheduled. At sentencing, Moquino faces a maximum penalty of ten years in prison.
This case was investigated by the Northern Pueblos Agency of the BIA’s Office of Justice Services and is being prosecuted by Special Assistant U.S. Attorney David M. Adams.
The case was brought pursuant to the Tribal Special Assistant U.S. Attorney (Tribal SAUSA) Pilot Project which is sponsored by the Justice Department’s Office on Violence Against Women, and seeks to train tribal prosecutors in federal law, procedure and investigative techniques to increase the likelihood that every viable violent offense against Native women is prosecuted in either federal court or tribal court, or both. The Tribal SAUSA Pilot Project was largely driven by input gathered from annual tribal consultations on violence against women, and is another step in the Justice Department's on-going efforts to increase engagement, coordination and action on public safety in tribal communities.
San Ramon Attorney Pleads Guilty to Tax Evasion and Eavesdropping ChargesRead the Press Release
SAN FRANCISCO - Mary Nolan, a family law attorney in San Ramon, California, pleaded guilty in federal court on September 27, 2013, to four counts of tax evasion and one count of unlawful interception of communications, announced United States Attorney Melinda Haag.
Nolan, 61, entered guilty pleas to all of the substantive counts in the indictment. According to her plea agreement, Nolan willfully evaded more than $400,000 in federal taxes between 2005 and 2009. Nolan agreed to pay $468,918.01 in restitution, and admitted having obstructed justice by submitting false contracts to the IRS during an audit. Additionally, according to the plea agreement, Nolan caused her staff to illegally eavesdrop by accessing a listening device that private investigator Christopher Butler had installed in a vehicle used by “N.F” (a victim). Nolan agreed to resign her bar license and never to practice law again.
Butler, who pleaded guilty to unlawful interception and several other offenses on May 4, 2012, admitted having installed approximately seventy-five to one hundred unlawful listening devices at the request of clients or their attorneys, including the listening device in “N.F.’s” vehicle in August 2007. Butler was sentenced to 60 months imprisonment on this charge, to be served concurrently with the 96-month sentence on his other counts of conviction.
Nolan was indicted on September 6, 2012, by a federal grand jury charging her with tax evasion for the years 2005 through 2009, in violation of 26 U.S.C. § 7201; unlawful interception of communication, in violation of 18 U.S.C. § 2511(1)(a) and (4)(a); and conspiracy to unlawfully intercept communications, in violation of 18 U.S.C. § 371.
Nolan’s sentencing hearing is scheduled for January 15, 2013, at 10:00 a.m., before the Honorable Charles R. Breyer, United States District Court Judge. The maximum penalties for each of the five counts to which Nolan pleaded guilty are five years’ imprisonment, $250,000 fine, three years supervised release, and a $100 special assessment. However, any sentence will be imposed by the Court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Hartley M. K. West is the Assistant U.S. Attorney who prosecuted the case with the assistance of Helen Yee and Rosario Calderon. The prosecution is the result of an investigation by the FBI and the Internal Revenue Service – Criminal Investigation.
(Nolan indictment )
San Bruno Man Sentenced to 70 Months for Obstruction and Being an Accessory-After-The-Fact to Three MurdersRead the Press Release
SAN FRANCISCO – Michael Ortiz, Sr. was sentenced on September 27, 2013, to 70 months in federal prison for obstruction of justice and being an accessory-after-the-fact to three racketeering murders committed by his son, Joseph Ortiz, announced United States Attorney Melinda Haag.
Michael Ortiz, Sr., 50, of San Bruno, admitted that during the evening of December 22, 2010, his son, Joseph Ortiz, told him that he shot and killed several rival gang members in South San Francisco, California. Michael Ortiz, Sr. and other co-defendants agreed to hide or destroy the firearms used in the shootings in order to help Joseph Ortiz avoid arrest and prosecution as well as to hinder the investigation of the shootings. In addition, the next day, Michael Ortiz, Sr. drove his son out of the Bay Area and later helped him flee to Mexico. Michael Ortiz, Sr. also helped hide a critical witness from law enforcement in Mexico.
“This sentence should serve as a warning about the consequences facing gang members who use violence and intimidation to further their criminal enterprises,” said Clark Settles, Special Agent in Charge for Homeland Security Investigations, San Francisco. “Homeland Security Investigations will continue to use all of the resources and authorities at its disposal to attack and dismantle the dangerous transnational gangs operating in the Bay Area.”
Michael Ortiz, Sr., pleaded guilty on July 10, 2013, to being an accessory after the fact to racketeering murder, in violation of 18 U.S.C. §§ 3 and 1959(a)(1); conspiring to obstruct justice, in violation of 18 U.S.C. § 371; obstruction of justice, in violation of 18 U.S.C. §§ 1512(c)(2) and (2); and concealment of an object to obstruct an investigation, in violation of 18 U.S.C. §§ 1519 and 2.
The Honorable Susan Illston, United States District Court Judge, handed down the 70 month sentence. Judge Illston also ordered the defendant to serve a three-year term of supervised release during which he may be searched by any federal, state, or local law enforcement officer with or without cause.
Joseph Ortiz, AKA “Little Vicious,” member of the 500 Block/C Street Gang, pleaded guilty to the racketeering murders on July 19, 2013. He is scheduled to be sentenced by Judge Susan Illston on November 8, 2013.
Acadia L. Senese and W.S. Wilson Leung are the Assistant United States Attorneys who are prosecuting the case, with the assistance of Kevin Costello, Ponly Tu, Marina Ponomarchuk, and Daniel Charlier-Smith. This prosecution is the result of an investigation by the Daly City Police Department and the South San Francisco Police Department, working with Homeland Security Investigations, and with the assistance of the San Mateo County Sheriff’s Office. Of the nineteen defendants originally charged as a result of this investigation, fourteen have pleaded guilty to racketeering-related offenses and/or offenses related to the obstruction of justice.
(Ortiz second superseding indictment )
Richland County Woman Sentenced on Methamphetamine Related ChargesRead the Press Release
A Richland County woman was sentenced on September 24, 2013, to federal prison on methamphetamine related charges, Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today.
Patricia Ann Utley, 53, of Olney, was sentenced to 108 months in prison, to be followed by four years supervised release, and fined $200. Utley had previously pleaded guilty to a federal indictment which charged that from February 2011, until on or about October 2012, in Richland County and Edwards County, Utley conspired with others known and unknown to the grand jury to manufacture more than 50 grams of methamphetamine.
The investigation was conducted by the Richland County Sheriff’s Office.
The case is being handled by Assistant United States Attorney George Norwood.
Prewitt, N.M., Man Sentenced to Nine Years in Federal Prison for Aggravated Child Sexual Abuse ConvictionRead the Press Release
ALBUQUERQUE – Justin Kenneth, 21, a member and resident of the Navajo Nation who resides in Prewitt, N.M., was sentenced this morning to nine years in federal prison followed by five years of supervised release for his aggravated child sexual abuse conviction. He also was ordered to pay $2,411 in restitution. Kenneth will be required to register as a sex offender after he completes his prison sentence.
The sentence was announced by Acting U.S. Attorney Steven C. Yarbrough, Special Agent Carol K.O. Lee of the Albuquerque Division of the FBI, and Director John Billison of the Navajo Nation Division of Public Safety.
Kenneth was arrested in Dec. 2010, on a criminal complaint alleging that he sexually abused a child under the age of 12 in Oct. 2010, on the Navajo Indian Reservation. On April 29, 2013, Kenneth entered a guilty plea to a felony information charging him with aggravated sexual abuse and admitted sexually abusing the child victim by improperly touching the child’s genitalia. Kenneth further admitted that he committed this crime on Oct. 6, 2010, at a residence located on the Navajo Indian Reservation. Kenneth has been in federal custody since entering his guilty plea.
This case was investigated by the Gallup office of the FBI and the Crownpoint office of the Navajo Division of Public Safety. Assistant U.S. Attorney Jacob A. Wishard prosecuted the case as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice (DOJ) to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and DOJ’s Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/.
Philadelphia Man Sentenced to 60 Months in Prison for Forging Federal Judge’s Signature to Escape from PrisonRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced that Kevin William Small, age 50, was sentenced today in Harrisburg by United States District Court Judge Gene E.K. Pratter to 60 months’ imprisonment and three years of supervised release for mail fraud, escape, forging judicial signatures, use of a counterfeit seal and possession of a counterfeit seal. Small was also ordered to pay a $2,500 fine.
According to United States Attorney Peter J. Smith, in 2007, Small was convicted of four counts of filing false tax claims following a week-long trial before Chief District Court Judge Christopher C. Conner. Evidence presented during the trial showed that Small was a long-term state prisoner who for at least four years had filed for an income tax refund claiming that he was due a substantial tax refund. Trial evidence from 2007 also established that Small created documents to substantiate his fictitious employment and opened fraudulent bank accounts to receive the tax refunds.
Judge Conner sentenced Small to serve 135 months in federal prison and directed that he begin serving this sentence after he finished serving his state sentence at Huntingdon State Prison. Small’s conviction and sentence were affirmed by appellate courts following two rounds of appeals.Small’s state sentence expired on January 5, 2012 and he was scheduled to be turned over to federal prison authorities on that day. However, state prison officials had received a document that purported to be signed and sealed by Judge Conner and the Clerk of Courts for the Middle District of Pennsylvania that stated that Small’s federal conviction had been vacated. As a result, Small was released on that day rather than being turned over to federal prison authorities to begin serving his federal sentence.
The escape was discovered when a federal agent called the state prison on another matter on March 8, inquired about Small, and learned that Small had been released to the street on January 5, 2012.
Small was located by the U.S. Marshals Service and arrested in a residence in Philadelphia in March 2012. Many documents that appeared to be forged or fraudulent were seized from the residence at the time of his arrest, including partially-prepared court documents that purportedly freed other state prisoners.
Small was indicted on the most recent charges in March 2012. A superseding indictment was returned in December 2012. Small pleaded guilty in May 2013.
Judge Pratter, a federal Judge in the Eastern District of Pennsylvania, was assigned to the case because the defendant’s conduct involved forgery of the signature of a federal Judge in the Middle District of Pennsylvania.
This case was investigated by the United States Marshals Service, the Federal Bureau of Investigation, and the Internal Revenue Service Criminal Investigations and is assigned to Assistant U.S. Attorney Christy H. Fawcett.
Pharr Man Handed Sentence for Involvement in Straw Purchase of FirearmsRead the Press Release
McALLEN, Texas – Christopher Bryan Santos, 21, of Pharr, has been handed a federal prison sentence for making false statements in the acquisition of firearms from Federal Firearms Licensees (FFL), commonly known as straw purchasing, announced United States Attorney Kenneth Magidson along with Robert Elder, special agent in charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).
Today, U.S. District Judge Randy Crane sentenced Santos to 51 months in federal prison to be immediately followed by a two-year-term of supervised release.
In February 2011, ATF agents discovered information regarding several firearms purchases made by Santos. On March 28, 2011, and April 15, 2011, Santos purchased a total of four firearms. He admitted he provided false information on ATF forms that the firearms were purchased for himself, when he knew they were actually for another individual.
It was further determined that the firearms were being trafficked and used or possessed for another felony offense. The sentence today was further enhanced because it was determined he recruited others to make additional straw purchases.
Santos will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The investigation was conducted by the ATF and is being prosecuted by Assistant United States Attorney Juan Villescas.
Pennsylvania Man Admits Conspiring with Alleged Members of Organized Crime Family and Others in Fraud SchemeRead the Press Release
A Pennsylvania man today admitted he conspired to defraud FIRSTPLUS Financial Group Inc. (FPFG), a Texas-based financial services company allegedly targeted for extortionate takeover and looting by a group led by alleged Lucchese organized crime family member Nicodemo S. Scarfo.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney Paul J. Fishman of the District of New Jersey made the announcement.
Cory Leshner, 30, pleaded guilty before U.S. District Judge Robert B. Kugler in a federal court in Camden, N.J., to a superseding information charging him with conspiracy to commit wire fraud. He faces a maximum of five years in prison when he is sentenced on Jan. 17, 2014.
According to documents filed in this case and statements made in court, Leshner and 12 others – including Scarfo, an alleged member of the Lucchese La Cosa Nostra (LCN) crime family, and Salvatore Pelullo, an alleged associate of the Lucchese and Philadelphia LCN families – were variously charged in a November 2011 indictment with a racketeering conspiracy that included acts of securities fraud, wire fraud, mail fraud, bank fraud, extortion, interstate travel in aid of racketeering, money laundering and obstruction of justice. The indictment charged that FPFG was targeted for extortionate takeover and looting by a group of the conspirators. A substantial part of the enterprise’s activities occurred in New Jersey, including communications and the transfer of money into and out of the state. Cory Leshner admitted that he joined the conspiracy in April 2007.Leshner admitted that he assisted Scarfo and Pelullo in managing family trusts and limited liability companies as part of the scheme to defraud FPFG. Pelullo directed Leshner in the use of various bank accounts through which Pelullo received hundreds of thousands of dollars between July 2007 and April 2008 as part of the scheme. The money involved proceeds of the fraud that Pelullo allegedly received as part of a fraudulent “consulting” agreement between his shell company, Seven Hills Management, and codefendant William Maxwell, a Texas attorney who served as “special counsel” to FPFG as part of the scheme. The money also involved proceeds received from the fraudulent sale of Scarfo and Pelullo’s worthless companies to FPFG in 2007. The receipt of the fraudulent proceeds often occurred in the form of wire transfers from accounts in Pennsylvania to accounts in New Jersey.
According to his court statements, Leshner was a law student during the scheme. Leshner graduated from law school in 2009 and became an attorney in Pennsylvania in 2011. As part of his plea agreement, Leshner agreed to notify the Pennsylvania Supreme Court of his guilty plea and to accept any disciplinary action brought by disciplinary officials as a result of the guilty plea and sentence. Leshner also agreed to not seek the reinstatement of his license to practice law while serving any sentence of imprisonment imposed in the case.
Scarfo, Pelullo, and five other defendants charged in November 2011 – including attorneys William Maxwell, David Adler, Gary McCarthy, and Donald Manno, as well as John Maxwell – are scheduled for trial beginning Oct. 28, 2013. Todd Stark, also charged in the indictment, previously pleaded guilty to providing ammunition to Scarfo and Pelullo, convicted felons.
This case was investigated by the FBI; the Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations; and the Bureau of Alcohol, Tobacco, Firearms and Explosives, with the assistance of the U.S. Securities and Exchange Commission. The case is being prosecuted by Trial Attorney Adam Small of the Organized Crime and Gang Section of the Justice Department’s Criminal Division and Assistant U.S. Attorneys Steven D’Aguanno and Howard Wiener of the New Jersey U.S. Attorney’s Office Organized Crime/Gangs Unit and Criminal Division in Camden.
With respect to the defendants awaiting trial, the charges and allegations contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Pennsylvania Man Admits Conspiring with Alleged Members of Organized Crime Family and Others in Fraud SchemeRead the Press Release
CAMDEN, N.J. – A West Reading, Pa., man admitted he conspired to defraud FirstPlus Financial Group Inc. (FPFG), a Texas-based financial services company allegedly targeted for extortionate takeover and looting by a group led by alleged Lucchese organized crime family member Nicodemo S. Scarfo, U.S. Attorney Paul J. Fishman announced.
Cory Leshner, 30, pleaded guilty before U.S. District Judge Robert B. Kugler in Camden federal court to a superseding information charging him with conspiracy to commit wire fraud.
According to documents filed in this case and statements made in court: Leshner and 12 others – including Scarfo, an alleged member of the Lucchese La Cosa Nostra (LCN) crime family, and Salvatore Pelullo, an alleged associate of the Lucchese and Philadelphia LCN families – were variously charged in a November 2011 indictment with a racketeering conspiracy, including acts of securities fraud, wire fraud, mail fraud, bank fraud, extortion, interstate travel in aid of racketeering, money laundering and obstruction of justice. The indictment charged that FPFG was targeted for extortionate takeover and looting by a group of the conspirators. A substantial part of the enterprise’s activities occurred in New Jersey, including communications and the transfer of money into and out of the state. Cory Leshner admitted that he joined the conspiracy in April 2007.
Leshner admitted that he assisted Scarfo and Pelullo in managing family trusts and limited liability companies on behalf of Scarfo and Pelullo as part of the scheme to defraud FPFG. Leshner said that Pelullo directed Leshner in the use of various bank accounts through which Pelullo received hundreds of thousands of dollars between July 2007 and April 2008 as part of the scheme. The money included the proceeds of the fraud that Pelullo allegedly received as part of a fraudulent “consulting” agreement between his shell company, Seven Hills Management, and codefendant William Maxwell, a Texas attorney who served as “special counsel” to FPFG as part of the scheme. The money also involved proceeds received from the fraudulent sale of Scarfo and Pelullo’s worthless companies to FPFG in 2007. The receipt of the fraudulent proceeds often occurred in the form of wire transfers from accounts in Pennsylvania to accounts in New Jersey.
Leshner also said that he was a law school student during the scheme. Leshner graduated from law school in 2010 and became an attorney in Pennsylvania in 2011. As part of his plea agreement, Leshner agreed to notify the Pennsylvania Supreme Court of his guilty plea and to accept any disciplinary action brought by disciplinary officials as a result of the guilty plea and sentence. Leshner also agreed to not seek the reinstatement of his license to practice law while serving any sentence of imprisonment imposed in the case.
Nicodemo S. Scarfo, Pelullo, and five other defendants charged in November 2011 – including attorneys William Maxwell, David Adler, Gary McCarthy, and Donald Manno, as well as John Maxwell – are scheduled for trial beginning Oct. 28, 2013. Todd Stark, also charged in the indictment, previously pleaded guilty to providing ammunition to Scarfo and Pelullo, convicted felons.
The conspiracy count to which Cory Leshner pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for Jan. 17, 2014.
U.S. Attorney Fishman praised special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark; the Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, under the direction of Acting Special Agent in Charge Cheryl Garcia, New York Region; and the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Thomas J. Cannon in Newark. He also thanked the FBI under the direction of Special Agent in Charge Edward J. Hanko in Philadelphia for its vital assistance and the U.S. Securities and Exchange Commission for its role.
The government is represented by Assistant U.S. Attorneys Steven D’Aguanno and Howard Wiener, of the New Jersey U.S. Attorney’s Office Organized Crime/Gangs Unit and Criminal Division in Camden, and Trial Attorney Adam Small of the Organized Crime and Gang Section of the Justice Department’s Criminal Division.
With respect to the defendants awaiting trial, the charges and allegations contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
13-398Defense counsel: Rocco C. Cipparone Jr., Esq., Haddon Heights
Leshner Superseding Information
Penfield Man Sentenced for Trafficking HeroinRead the Press Release
ROCHESTER, N.Y.– U.S. Attorney William J. Hochul, Jr. announced today that Alfredo Valentin, Jr., a/k/a Alfredo Valentine, a/k/a Fred Valentin, a/k/a Fred Vegas, 44, of Penfield, N.Y., who was convicted of conspiracy to possess with intent to distribute and distribution of one kilogram or more of heroin, was sentenced to 20 years in prison and 10 years supervised release by U.S. District Judge David G. Larimer. Valentin was also ordered to forfeit $74,690 in U.S. currency, a 9mm pistol, and rounds of ammunition seized during the investigation.
Assistant U.S. Attorney Robert A. Marangola, who handled the case, stated that Valentin purchased large quantities of heroin in New York City which he transported back to Rochester. The defendnat then processed, packaged, and resold the heroin in various quantities. Valentin was arrested January 16, 2013 while operating a rental car and was in possession of over 130 grams of heroin and $2,000 in U.S. currency. During the execution of a search warrant that same day at the defendant’s Plank Road residence in Penfield, law enforcement officers recovered a Hi-Point 9mm pistol with a defaced serial number, rounds of 9mm ammunition, and heroin trafficking paraphernalia. The investigation continued after Valentin was arrested and, on February 13, 2013, agents seized $72,690 in the defendant’s drug proceeds during the execution of a search warrant at 140 Central Park in Rochester.
The sentencing is the culmination of an investigation on the part of Special Agents of the Drug Enforcement Administration, under the direction of Special Agent in Charge, Brian R. Crowell, New York Field Division, with assistance provided by the Greater Rochester Area Narcotics Enforcement Team (GRANET), and the Rochester Police Department under the direction of Chief James M. Sheppard, the Monroe County District Attorney’s Office, under the direction of Sandra Doorley, and the Bureau of Alcohol, Tobacco, Firearms, and Explosives under the direction of Resident Agent in Charge, Scott Heagney.Omaha Men Sentenced to Prison for Distributing Methamphetamine in Omaha, NebraskaRead the Press Release
United States Attorney Deborah R. Gilg announced Friday that the Honorable Richard G. Kopf, U.S. District Court Judge, sentenced Carlos Navarro, 21, to 46 months imprisonment, and Erik Martinez, 22, to 57 months imprisonment, each to be followed by 3 years of supervised release. They were both also ordered to pay a $100 special assessment, following their conviction for distribution of methamphetamine.
On August 15, 2012, a cooperating witness bought 109 grams of methamphetamine from Martinez. Martinez contacted Navarro who made the actual delivery. On August 22, 2012, a meeting was set up between Martinez and the cooperator for the cooperator to pay for the methamphetamine. Both Martinez and Navarro showed up, Martinez was given the money and they were arrested.
Homeland Security Investigations and the Omaha Police Department were responsible for the investigation of this case.
North Carolina Businessman Sentenced for Tax FraudRead the Press Release
William Robert Hupman Jr., of Mebane, N.C., was sentenced to serve 17 months in prison followed by one year of supervised release for tax fraud today, the Justice Department and the Internal Revenue Service (IRS) announced. Hupman was also ordered to pay restitution to the IRS of $103,420.
Hupman pleaded guilty on May 31, 2013, to corruptly endeavoring to obstruct or impede the due administration of the Internal Revenue laws. According to court documents and court proceedings, Hupman managed and controlled Security Concepts LLC (SC), a security alarm company based in Mebane, N.C. Instead of receiving a salary from SC, Hupman received income by using an SC debit card to pay his expenses. Despite receiving over $770,000 in such fees between 2007 and 2011, Hupman has not filed an individual income tax return since tax year 2006.
Court documents indicate that in addition to his failure to comply with his personal income tax responsibilities, Hupman also failed to comply with his employment tax responsibilities at SC. As the person who managed and controlled SC, Hupman was responsible for withholding employment taxes and paying them over to the IRS on a periodic basis. SC last paid over employment taxes and filed the required tax form for the third quarter of 2009, despite the fact that employment taxes were actually withheld from the wages of SC employees. Hupman did not pay employment taxes or file the required tax form for the fourth quarter of 2009 or any of the quarters in 2010 and 2011. He also has not paid the federal unemployment taxes owed or filed the required tax form for years 2009, 2010 or 2011. According to court documents and court proceedings, the criminal tax loss was $103,420.
Kathryn Keneally, Assistant Attorney General of the Justice Department’s Tax Division, thanked Special Agents of IRS - Criminal Investigation, who investigated the case, and Tax Division Trial Attorneys Todd Ellinwood and Kevin Lombardi for prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found at www.justice.gov/tax .
North Carolina Businessman Sentenced for Tax FraudRead the Press Release
WASHINGTON – William Robert Hupman Jr., of Mebane, N.C., was sentenced to serve 17 months in prison followed by one year of supervised release for tax fraud today, the Justice Department and the Internal Revenue Service (IRS) announced. Hupman was also ordered to pay restitution to the IRS of $103,420.
Hupman pleaded guilty on May 31, 2013, to corruptly endeavoring to obstruct or impede the due administration of the Internal Revenue laws. According to court documents and court proceedings, Hupman managed and controlled Security Concepts LLC (SC), a security alarm company based in Mebane, N.C. Instead of receiving a salary from SC, Hupman received income by using an SC debit card to pay his expenses. Despite receiving over $770,000 in such fees between 2007 and 2011, Hupman has not filed an individual income tax return since tax year 2006.
Court documents indicate that in addition to his failure to comply with his personal income tax responsibilities, Hupman also failed to comply with his employment tax responsibilities at SC. As the person who managed and controlled SC, Hupman was responsible for withholding employment taxes and paying them over to the IRS on a periodic basis. SC last paid over employment taxes and filed the required tax form for the third quarter of 2009, despite the fact that employment taxes were actually withheld from the wages of SC employees. Hupman did not pay employment taxes or file the required tax form for the fourth quarter of 2009 or any of the quarters in 2010 and 2011. He also has not paid the federal unemployment taxes owed or filed the required tax form for years 2009, 2010 or 2011. According to court documents and court proceedings, the criminal tax loss was $103,420.
Kathryn Keneally, Assistant Attorney General of the Justice Department’s Tax Division, thanked Special Agents of IRS - Criminal Investigation, who investigated the case, and Tax Division Trial Attorneys Todd Ellinwood and Kevin Lombardi for prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found at www.justice.gov/tax.
North Canton Man Charged with Embezzling $219,000Read the Press Release
A criminal information was filed charing a North Canton man with embezzling $219,000, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
Joshua L. Haddad, age 29, is accused of embezzling approximately $219,900 from First Merit Corporation from April 2010 through September 2012. Haddad did this while he was employed as a teller at the bank’s Country Fair Branch, 4105 Tuscarawas Street West, in Canton, Ohio, which is a bank whose deposits were insured by the Federal Deposit Insurance Corporation, according to the information.
If convicted, the defendant's sentence will be determined by the court after review of factors unique to this case, including the defendant's prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
An information is only a charge and is not evidence of guilt. The defendant is entitled to a fair trial in which it will be the government's burden to prove guilt beyond a reasonable doubt.
This case is being prosecuted by Assistant U.S. Attorney Margaret A. Sweeney, following investigation by the Federal Bureau of Investigation.
Naples Man Sentenced to Four Years for Filing False Income Tax ReturnsRead the Press Release
Fort Myers, Florida – U.S. District Judge John E. Steele today sentenced Frederick R. Green to 4 years in federal prison for false claims against the government, possession of 15 or more unauthorized access devices, and theft of government money. The court also ordered Green to forfeit $10,322.00 in United States currency, which is traceable to proceeds of the offense. In addition, Green was ordered to pay $311,746.00 in restitution to the Internal Revenue Service. Green pleaded guilty on March 5, 2013.
According to court documents, on or about January 20, 2012, Green knowingly filed a false federal income tax return using the name E.P., in which he made a fraudulent claim for an income tax refund in the amount of $9,913, to the Internal Revenue Service.
The Internal Revenue Service confirmed that on January 20, 2012, E.P.’s return was prepared, received and processed by the IRS and a refund in the amount of $9,913 was applied to a Bancorp debit card.
The Internal Revenue Service conducted additional research and determined that more than 70 returns were filed from the same IP address utilized by Green on January 20, 2012.
A search warrant was executed on July 12, 2012, on Green’s residence in Collier County. During the execution of the warrant, Green was found to be in possession of 15 or more unauthorized access devices. Specifically, he was in possession of 25 debit cards in other peoples’ names that were found in his jacket pocket. Further, there were numerous other debit cards on the table next to his computer. One of the cards found during the execution of the search warrant was in E.P.’s name. Agents also located sheets of personal identifying information and more than $10,000 in cash.
From at least January 20, 2012 through July 12, 2012, Green knowingly and willfully stole and converted to his own use money that belonged to the United States. The amount of the returns filed from the IP address while it was assigned to Green’s residence is $648,967. From the fraudulent claims for income tax refunds, Green received payment for $311,746.
This case was investigated by the United States Secret Service, the Lee County Sheriff’s Office, and the Collier County Sheriff’s Office as part of the United States Secret Service Southwest Florida Financial Crimes Strike Force, and the Internal Revenue Service. It is being prosecuted by Assistant United States Attorney Yolande G. Viacava.
Multi-Agency Operation in Danville Concludes with Sentencing of Final Federal DefendantRead the Press Release
DANVILLE, VIRGINIA – Officials from local, state and federal law enforcement agencies announced today the culmination of an investigation that took nearly 50 drug dealers off the streets of Danville.
Operation Clean Sweep was the result of collaborative work by the Federal Bureau of Investigation, the Virginia State Police, the Danville Police Department, the Pittsylvania County Sheriff’s Office, the Danville Commonwealth’s Attorneys’ Office, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Department of Homeland Security, the Drug Enforcement Administration, Virginia Department of Corrections, the United States Office of Probation and Parole and the Danville City Sheriff’s Office.
During the course of the investigation, more than forty-nine individuals have been convicted in both state and federal court for distributing crack cocaine in and around the City of Danville. In addition, many of the defendants were also convicted on firearms charges.
Overall, of the 49 individuals charged as part of the operation, 42 were prosecuted by state officials. Those charges included more than 64 counts of drug and firearms related offenses. Seven defendants were prosecuted by federal officials. The federal charges included more than 20 counts of drug and firearms related offenses. Throughout the course of the investigation more than 20 firearms were seized.
“Operation Clean Sweep successfully took nearly 50 drug dealers and violent criminals off the streets of Danville,” United States Attorney Timothy J. Heaphy said today. “This operation was a success due to the cooperation of local, state and federal authorities. We must continue to join together in the Danville region if we are going to truly make the city safer. We must also augment our targeted enforcement work with support for effective crime prevention and offender reentry programs. Only a comprehensive approach will truly achieve public safety in Danville and elsewhere.”
“The conclusion of this extensive investigation and the accumulative prison time of more than 68 years among the defendants should send a clear message that criminal narcotic and gang activity will not be tolerated in Danville or any other region of the Commonwealth,” said Captain G.W. Austin, Jr., Commander of the Virginia State Police Bureau of Criminal Investigation’s Salem Field Office. “Thanks to the collaborative efforts of local, state and federal law enforcement, we were able to eradicate a significant criminal network and validate our commitment to making our communities safer.”
“This intensive narcotics and gang enforcement project focused on addressing street-level narcotics activity and subsequent crimes of violence in the Danville area. Arrests, seizures and the identification of gang members was the result of the hard work and dedication of the many local, state and federal law enforcement partners who dedicated resources and personnel towards this important task,” said Jeffrey C. Mazanec, Special Agent in Charge of the FBI’s Richmond Division.
“This successful law enforcement initiative between local, state and federal partners resulted in the prosecution of a number of armed narcotics traffickers and violent criminals. This operation has had a positive effect on the Danville community and efforts to aggressively investigate armed violent offenders in the Danville area will continue,” said Carl Vasilko, Special Agent in Charge of the ATF Washington Field Division.
“This combined effort by local, state and federal law enforcement agencies was very effective, especially in addressing the street-level drug crime and violence involving members of one of Danville’s most violent gangs,” said Danville Police Chief Philip Broadfoot. “The lengthy federal sentences given to several defendants for drug and firearm offenses should be a wake-up call to all gang members.”
“The Danville Commonwealth’s Attorney’s Office wishes to thank the dedicated work of all the law enforcement officers from the Virginia State Police, local police department, and all other agencies for providing the thousands of man hours necessary to make this operation a success,” Danville Commonwealth’s Attorney Michael Newman said today. “We are dedicated to continue to work with all local, state, and federal agencies to take and keep these violent criminals off the streets.”
The following defendants were prosecuted federally by the United States Attorney’s Office for the Western District of Virginia:
Parnell Moore, 24, of Danville, Va., convicted on multiple counts of distributing crack cocaine and multiple firearms offenses, sentenced to 420 months in federal prison.
Damien Courtney Fitzgerald, 27, of Danville, Va., convicted of distributing crack cocaine and a firearms offense, sentenced to 180 months in federal prison.
Demetrius Townes, 26, of Danville, Va., convicted of distributing crack cocaine and a firearms offense, sentenced to 106 months in federal prison.
Christopher Mayo, 27, of Danville, Va., convicted of a pair of firearms offenses, sentenced to 97 months in federal prison.
Ryan Neil Polk III, 27, of Danville, convicted of distributing crack cocaine, sentenced to 12 months and one day in federal prison.
Antonio Davis, 36, of Danville, Va., convicted of distributing crack cocaine, sentenced to 12 months and one day in federal prison.
Tyrell Keoni Saunders, 20, of Danville, Va., convicted of distributing crack cocaine and a firearms offense, sentenced to 240 months in federal prison.
Other agencies that assisted in the investigation include the United States Marshall’s Service, Virginia Probation and Parole, the North Carolina Highway Patrol and the Virginia Alcohol Beverage Commission.
Monroe County Man Sentenced to Prison ForRead the Press Release
Federal Cocaine Trafficking Charges
The United States Attorney’s Office for the Middle District of Pennsylvania announced that a Monroe County man was sentenced today by Senior United States District Judge Edwin M. Kosik to serve 60 months in prison on the charges of conspiracy to distribute cocaine.
According to United States Attorney Peter J. Smith, Jhonathan Gutierrez-Esquea, age 33, formerly of Stroudsburg, Monroe County, admitted to participating in a drug-trafficking conspiracy which obtained cocaine in Texas and distributed the cocaine in the Monroe County and Northampton County areas in 2011.
Gutierrez-Esquea also faces deportation proceedings.
In addition to the prison term, Senior Judge Kosik also ordered that Gutierrez-Esquea be supervised by a probation officer for two years following his prison sentence if he is not deported.
The investigation was conducted by the Drug Enforcement Administration, the Stroud Area Regional Police Department and the Internal Revenue Service, Criminal Investigations.
The case was prosecuted by Assistant United States Attorney Robert J. O’Hara.
****Monroe County Man Enters Guilty Plea to Filing of False ERISA DocumentsRead the Press Release
The United States Attorney's Office for the Middle District Pennsylvania announced that on September 26, 2013, Charles A. Poalillo, Jr., age 80, of Monroe County, Pennsylvania, entered a guilty plea to the charge of filing false documents with the Department of Labor and the Internal Revenue Service.
According to United States Attorney Peter J. Smith, Poalillo was the former owner of Penn Hills Lodge, Inc., a Pocono honeymoon resort located in Analomink, Pennsylvania. While he operated Penn Hills Lodge and related businesses, Poalillo borrowed approximately $1 million from two pension funds. He was charged with falsely reporting the security of these assets to the United States Department of Labor and the Internal Revenue Service. Pursuant to a guilty plea agreement filed with the information, Poalillo agreed to attempt to make full restitution by the time of sentencing.
On September 26, 2013, Poalillo entered the guilty plea to the offense before Senior U.S. District Court Judge Edwin Kosik.
The United States Department of Labor’s Employee Benefits Security Administration and the Department of Labor’s Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, conducted the investigation. The Monroe County District Attorney’s Office initiated the investigation and assisted the federal authorities. Prosecution is assigned to Assistant United States Attorney Michael A. Consiglio.
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 these particular cases, the maximum penalty under the federal statute is five years of imprisonment and 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.
* * * *Miami Physician Indicted in Medicare Fraud SchemeRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Christopher B. Dennis, Special Agent in Charge, U.S. Department of Health and Human Services, Office of Inspector General, and Michael B. Steinbach, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, announce that a federal grand jury indicted defendant Christopher Gregory Wayne, 53, of Miami Beach, an osteopathic physician residing in Miami, for health care fraud. Wayne was arrested today and made his initial appearance at 2:00 p.m. before U.S. Magistrate Judge Barry L. Garber.
The indictment charges Wayne with twelve counts of health care fraud by executing a scheme to defraud the Medicare program, in violation of Title 18, United States Code, Section 1347. The case has been assigned to U.S. District Judge Robert N. Scola, Jr.
If convicted, Wayne faces a maximum statutory sentence of up to ten years in prison and a $250,000 fine.
Mr. Ferrer commended the investigative efforts of HHS-OIG and the FBI. The case is being prosecuted by Assistant U.S. Attorney Eric Morales.
The Indictment is only an accusation and is not evidence of guilt. A defendant is presumed innocent unless and until he is proven guilty.
Attachment:
Indictment (PDF)
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Mercer County, N.J., Man Sentenced to Four Years for His Role in Trenton, N.J., Narcotics RingRead the Press Release
TRENTON, N.J. – A Mercer County, N.J., man was sentenced today to 48 months in prison for his role in a conspiracy to distribute oxycodone pain pills, U.S. Attorney Paul J. Fishman announced.
Giuseppe A. Scordato, 48, of Hamilton, N.J, previously pleaded guilty before U.S. District Judge Michael A. Shipp in Trenton federal court to an information charging him with one count of conspiracy to distribute and possess with intent to distribute oxycodone.
According to documents filed in this case and statements made in court: Between November 2011 and July 2012, Scordato obtained oxycodone-based prescription pain pills from Joseph A. “JoJo” Giorgianni, Mary Manfredo and Charles Hall III. Scordato obtained the pills from two locations: Giorgianni’s business – JoJo’s Steakhouse – and “Giordianni’s Clubhouse,” which was located next to the steakhouse. Scordato would sell those pills and remit the proceeds to Giorgianni and Manfredo at JoJo’s Steakhouse in exchange for a portion of the proceeds from those sales.
In addition to the prison term, Judge Walls sentenced Scordato to serve three years of supervised release and fined him $2,000.
U.S. Attorney Fishman credited special agents of the FBI’s Trenton Resident Agency, Newark Field Office, under the direction of Special Agent in Charge Aaron T. Ford, for the investigation leading to today’s guilty pleas.The government is represented by Assistant U.S. Attorneys Eric W. Moran and Matthew J. Skahill of the U.S. Attorney’s Office Special Prosecutions Division in Trenton and Camden, respectively.
13-399
Defense counsel: Scott Krasny Esq., West Trenton, N.J.Mastermind of $100 Million Mortgage Fraud Sentenced to Eight Years in PrisonRead the Press Release
SAN DIEGO – Mary Armstrong, the mastermind of a $100 million mortgage fraud that generated almost $15 million in illegal kickbacks, was sentenced today to 100 months in prison by U.S. District Judge John A. Houston.
Armstrong’s former boyfriend, William Fountain, was sentenced on Friday to serve 42 months in prison for his participation in the scheme. In addition, both Armstrong and Fountain were ordered to pay more than $500,000 in restitution to victims of the offense.
“These are significant sentences for serious crimes,” said U.S. Attorney Laura Duffy. “Mortgage fraud is one of the fastest growing financial crimes in the country, and we can add these two defendants to a long list of fraudsters who have landed in prison as a result of our crackdown.”
FBI Special Agent in Charge, Daphne Hearn, stated, "Today's sentencing signifies the continued effort of the FBI, U.S. Attorney's Office and Federal Housing Finance Agency to investigate and prosecute those who commit mortgage fraud. The FBI is committed to holding those accountable who line their own pockets at the expense of the American taxpayers and we hope that today's sentencing will help deter future fraud."
Acting Inspector General Stephens of the Federal Housing Finance Agency stated, “Armstrong participated in a fraudulent scheme involving over $100 million in mortgage loans, many of which ultimately defaulted, to the detriment of Fannie Mae, Freddie Mac and the American taxpayers. We are proud to support our law enforcement partners in investigating and prosecuting this case.”
Armstrong, Fountain and their co-conspirators recruited real estate “investors” through advertisements in the Los Angeles Times, Monster.com, and elsewhere. They offered these “investors” the opportunity to purchase homes using their good credit with no money down. In order to get these “investors” to participate in the loan fraud, Armstrong promised to make the mortgage payments on their behalf using rental income from the properties.
In reality, these so-called investors were nothing more than straw buyers who were promised $10,000 for each property purchased as part of the scheme. Armstrong (who was not a licensed mortgage broker) secured mortgages on the properties by falsifying loan applications for the straw buyers. Among other things, the loan applications falsely claimed exorbitant income from fake employers and used sham companies, which Fountain helped to create, in order to verify the borrowers’ fabricated employment and rental histories. Armstrong and her co-conspirators used these loan applications to obtain mortgages with 100% financing – and thus avoided having to make any down payment on the properties.
Armstrong earned millions of dollars in profits by convincing the sellers of the properties to inflate the purchase price by $100,000 or more per property. These inflated amounts were allegedly for construction to improve the properties. In fact, no construction work was performed and the funds were diverted (or “kicked back”) to bank accounts controlled by Armstrong’s co-conspirators. Armstrong then had Fountain and other co-conspirators launder the funds back to her in cash payments or official checks, so that the money could not be traced. In this way, she pocketed nearly $15 million in kickbacks, made few if any mortgage payments, and allowed nearly all of the properties to swiftly fall into foreclosure. Armstrong arranged the purchase of approximately $100 million in loans through this scheme, resulting in estimated losses between $7 million and $20 million to the mortgage lenders and secondary purchasers Fannie Mae and Freddie Mac.
Armstrong and Fountain were charged with participating in the scheme along with four others: Teresa Rose, a Ramona real estate agent; John Allen, a mortgage loan processor from Laguna Hills; Justin Mensen, a straw buyer who later recruited others and helped launder the funds; and Audrey Yeboah, a Los Angeles-based tax preparer who generated fake paperwork to support the loans. All of the defendants have pled guilty to participating in the scheme. Allen was sentenced by Judge Houston on September 16, 2013, to one year in custody. Audrey Yeboah is scheduled for sentencing on December 2, 2013, and Teresa Rose and Justin Mensen are scheduled for sentencing on December 9, 2013, all before Judge Houston.
United States Attorney Duffy explained that the American public is the actual victim of this type of widespread mortgage fraud, which played such a significant role in destabilizing the country’s financial situation. She emphasized that her office would aggressively prosecute such crimes and urged anyone in the community who has information relating to these charges to contact San Diego FBI Field Office at telephone number (858) 320-1800 or the Federal Housing Finance Agency - Office of Inspector General hotline at (800) 793-7724.
This matter was investigated jointly by agents from the FBI and FHFA-OIG. The case is being prosecuted by FHFA-OIG Investigative Counsel and Special Assistant U.S. Attorney Emily W. Allen and Assistant U.S. Attorney Valerie Chu of the Southern District of California.
DEFENDANTS Criminal Case No. 12CR1848-JAH Mary Armstrong
Teresa Rose
William Fountain
John Allen DEFENDANT Criminal Case No. 12CR1458-JAH Justin Mensen DEFENDANT Criminal Case No. 12CR4322-JAH Audrey Yeboah SUMMARY OF CHARGESMary Armstrong, Teresa Rose, and William Fountain
Count 1: Title 18, United States Code, Section 371 -- Conspiracy to Commit Wire Fraud and to Launder Money -- statutory maximum sentence of 5 years custody, a maximum fine of $250,000 or twice the gain derived from or loss caused by the offense, and $100 special assessment.
Mary Armstrong
Count 2: Title 18, United States Code, Section 1343 -- Wire Fraud -- statutory maximum sentence of 20 years custody, a maximum fine of $250,000 or twice the gain derived from or loss caused by the offense, and $100 special assessment.
Counts 3-5: Title 18, United States Code, Section 1956(a)(1)(B)(I) -- Money Laundering -- statutory maximum sentence of 15 years’ custody, a maximum fine of $500,000 or twice the value of the property involved in the transaction, and $100 special assessment.
Justin Mensen
Information: Title 18, United States Code, Section 371 -- Conspiracy to Commit Wire Fraud and to Launder Money -- statutory maximum sentence of 5 years custody, a maximum fine of $250,000 or twice the gain derived from or loss caused by the offense, and $100 special assessment.
Audrey Yeboah
Information: Title 18, United States Code, Section 1343 -- Wire Fraud -- statutory maximum sentence of 20 years custody, a maximum fine of $250,000 or twice the gain derived from or loss caused by the offense, and $100 special assessment.
AGENCIESFederal Bureau of Investigation
Federal Housing Finance Agency - Office of Inspector GeneralMassachusetts Man Sentenced for Human Trafficking and Production of Child PornographyRead the Press Release
Jackson, Miss - Jemery Hodges, 27, was sentenced today by U.S. District Judge David Bramlette III to serve 23 years and 2 months in federal prison followed by a lifetime of supervised release for human trafficking of a minor child and the production of child pornography, announced U.S. Attorney Gregory K. Davis and Raymond R. Parmer, Jr., Special Agent in Charge of ICE Homeland Security Investigations in New Orleans.
At his June, 2013, guilty plea hearing, Hodges admitted traveling to Mississippi for the purpose of engaging in sexual intercourse with a child under the age of 10 years old. He also admitted that he produced videos of himself engaging in sexually explicit conduct with the child.
“Today’s sentencing reaffirms the message that there are serious consequences for victimizing innocent children,” said U.S. Attorney Davis. “The U.S. Attorney’s Office is dedicated to the aggressive prosecution of those who commit such heinous crimes.”
“The horrific abuse inflicted upon a defenseless child in this case was unspeakable, and yet the defendant went even further by recording and sharing the evidence of his sexual crimes,” said HSI New Orleans Special Agent in Charge Raymond R. Parmer Jr. "Predators destroy lives, and HSI will continue to do everything it can to protect children by investigating and seeking prosecution wherever these criminals may be found." Parmer oversees a five-state region including Mississippi, Alabama, Arkansas, Louisiana and Tennessee.
The investigation of this case began when the Cambridge, Massachusetts Police Department received information about a video tape of illegal sexual activities and the production of videos depicting the sexual assault of a child. The Cambridge Police Department contacted the Department of Homeland Security (“HSI”) in Atlanta and the Georgia Bureau of Investigation who worked with HSI in Jackson to conduct further investigation. The collaborative efforts of HSI agents and investigators in Cambridge, Atlanta, Memphis and Jackson ultimately led to the identification of the minor child in the videos, who is now safe with her family.
Assistant U.S. Attorneys Glenda Haynes and Scott Gilbert prosecuted the case for the government.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched by the Department of Justice in May 2006 to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to 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.
###If you believe you have been a victim of fraud from a person or an organization soliciting relief funds on behalf of storm victims, contact the National Center for Disaster Fraud toll free at:
(866) 720-5721
You can also fax information to:
(225) 334-4707
or e-mail it to:
Making sure that victims of federal crimes are treated with compassion, fairness and respect.
Training and seminars for Federal, State, and Local Law Enforcement Agencies.
Help us combat the proliferation of sexual exploitation crimes against children.
Lake Charles Woman Pleads Guilty to Wire FraudRead the Press Release
LAFAYETTE, La. – United States Attorney Stephanie A. Finley announced today that Carol A. Thrasher, 60, of Lake Charles, La., pleaded guilty before U.S. District Judge Richard T. Haik to wire fraud.
According to evidence presented at the guilty plea, Thrasher admitted that from January 2007 to April 2012, while working as a manager for a Westlake, La., company, she stole $551,357. She had access to her company’s Midsouth Bank account and used funds from it to pay the balance of a personal Capital One credit card numerous times over the five-year period. The credit card payments Thrasher made ranged from a few hundred dollars to more than $8,000. She reportedly used the Capital One card to pay for the majority of her living expenses, and she also stated that she spent the money on gambling, shopping, dining and vacations.
Thrasher faces up to 20 years in prison, three years of supervised release, a $250,000 fine and restitution for the wire fraud count. A sentencing date was not set.
The U.S. Secret Service conducted the investigation. Assistant U.S. Attorney Myers P. Namie is prosecuting the case.
Kenmore Financial Advisor Arrested for Mail FraudRead the Press Release
A long-time financial advisor who was stripped of his insurance producers license in 2012, was arrested today on a federal charge of mail fraud for liquidating a client account without authorization, announced U.S. Attorney Jenny A. Durkan. EDWARD H. KAHLER, 64, is the owner of Key Resources, a Kenmore, Washington retirement consultation company which sells annuities and life insurance. The charge alleges that KAHLER used proprietary information from the company he used to represent to access customer accounts. KAHLER allegedly used that information to liquidate the customer account and use the money for his own benefit. KAHLER will make his first appearance in U.S. District Court in Seattle at 2:00 PM tomorrow, October 1, 2013.
According to the criminal complaint, from 1983 to 2007 KAHLER was a financial advisor for Variable Annuity Life Insurance Company (VALIC), and was appointed by VALIC to sell its annuities. VALIC terminated KAHLER in 2007 when it discovered he was promoting competing annuities. Using information that he had in his files, KAHLER allegedly created profiles for former clients using the VALIC on-line system, and fraudulently caused VALIC to liquidate the clients’ accounts and send the proceeds to him for his personal use and benefit. In the instance described in the complaint, on Christmas Eve 2012, KAHLER liquidated the account of a client who had died in 1984, and used the $125,000 to fund a trip to Las Vegas, the payment on a BMW and other personal expenses. He also paid business expenses with the money.
Mail fraud is punishable by up to 20 years in prison.
The charges contained in the complaint are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.
The case is being investigated by the FBI, the U.S. Postal Inspection Service (USPIS), and the Social Security Administration Office of Inspector General (SSA-OIG). The case is being prosecuted by Assistant United States Attorney Justin Arnold.
Justice Department to File Lawsuit Against the State of North Carolina to Stop Discriminatory Changes to Voting LawRead the Press Release
The Justice Department announced today that it intends to file a lawsuit against the State of North Carolina, the North Carolina State Board of Elections, and the Executive Director for the State Board of Elections over recent voting changes made by North Carolina House Bill 589, which was signed into law in August 2013. The United States’ complaint challenges provisions of House Bill 589 under the non-discrimination requirements of Section 2 of the Voting Rights Act.
"By restricting access and ease of voter participation, this new law would shrink, rather than expand, access to the franchise,” said Attorney General Eric Holder. “Allowing limits on voting rights that disproportionately exclude minority voters would be inconsistent with our ideals as a nation. Whenever warranted by the facts and the law, the department will not hesitate to use the tools and legal authorities at our disposal to fight against racial discrimination, to stand against disenfranchisement, and to safeguard the right of every eligible American to cast a ballot."
The United States’ complaint contends that at least four provisions of House Bill 589 were adopted with the purpose, and will have the result, of denying or abridging the right to vote on account of race, color, or membership in a language minority group. The complaint asks the court to prohibit North Carolina from enforcing these requirements, and also requests that the court order bail-in relief under Section 3(c) of the Voting Rights Act. If granted, this would subject North Carolina to a new preclearance requirement.
House Bill 589 imposes a number of restrictions on voting that will deny or abridge the right of minority voters to participate in the political process. Over the years, voter participation rates in North Carolina have steadily increased as the state adopted election practices and procedures that made voting more accessible to more voters. In the November 2008 and November 2012 general elections, for example, African-American voters dramatically increased their participation rates and heavily relied on early voting in North Carolina. In the November 2008 and November 2012 general elections, about 71 percent of all African Americans who cast ballots in North Carolina during those elections voted during the early voting period.
Although the prior system encouraged expanded voter participation, the state legislature chose in 2013 to adopt numerous barriers to voting and to eliminate voter-friendly practices. Additionally, the state waited to adopt many of these changes until after the Supreme Court’s recent decision in Shelby County v. Holder, which held that certain jurisdictions, including 40 counties in North Carolina, were no longer required to obtain preclearance of voting changes prior to their implementation.
The complaint cites several provisions of House Bill 589. In particular, it cites: the elimination of the first week of early voting, which reduces the total number of days of early voting (from 17 days to 10 days); the elimination of same-day voter registration during the early voting period; the prohibition on counting certain provisional ballots; and the failure to provide adequate safeguards for voters who lack the limited types of acceptable photo identification cards that will be required in future elections. The first three changes are scheduled to take effect in 2014, and the last change will take effect in 2016.
Based on the state’s own data, all four changes will have a discriminatory impact on minority voters, who disproportionately have relied on the first seven days of early voting, the same-day registration process and past practices regarding the counting of certain provisional ballots in order to participate in the elections process. In addition, the State Board of Elections released a report earlier this year showing that African-Americans disproportionately lacked photo identification cards issued by the state’s Department of Motor Vehicles. Despite knowledge of this report, the legislature adopted a strict photo identification requirement that lacks the types of protections for voters without identification that are common in other states that require voter identification. Minority voters will disproportionately face obstacles and barriers to obtaining certain permitted photo identification cards that are now required to vote, and the State has failed to provide adequate protections to ensure that these voters will not be disenfranchised by the new law.
“The right to vote is one of the sacred rights that we hold dear as a nation,” said Jocelyn Samuels, Acting Assistant attorney General for the Justice Department’s Civil Rights Division. “The Department of Justice will use all the tools it has available to ensure that each citizen can cast a ballot free from discrimination. North Carolina adopted these changes in a rushed process, despite evidence before the legislators that a number of these changes will harm minority voters.”
“The United States Attorneys for all three districts in North Carolina support today’s action to protect the rights of all eligible North Carolinians to exercise the right to vote free from discrimination,” said United States Attorney Ripley Rand of the Middle District of North Carolina. “Anne Tompkins of the Western District, Thomas Walker of the Eastern District and I will ensure that our respective offices provide whatever support and assistance is needed to pursue this important voting rights case.”
If the federal court in this case finds that the State of North Carolina should be covered by Section 3(c), then the state would be required to submit voting changes to the U.S. Attorney General or to the federal court for review prior to implementation, to ensure that the changes do not have a discriminatory effect or a discriminatory purpose.
More information about the Voting Rights Act and other federal voting laws is available on the Department of Justice’s website at www.justice.gov/crt/about/vot. Complaints about discriminatory voting practices may be reported to the Voting Section of the Justice Department’s Civil Rights Division at 1-800-253-3931.
Related Materials:
Complaint
Justice Department to File Lawsuit Against the State of North Carolina to Stop Discriminatory Changes to Voting LawRead the Press Release
WASHINGTON – The Justice Department announced today that it intends to file a lawsuit against the State of North Carolina, the North Carolina State Board of Elections, and the Executive Director for the State Board of Elections over recent voting changes made by North Carolina House Bill 589, which was signed into law in August 2013. The United States’ complaint challenges provisions of House Bill 589 under the non-discrimination requirements of Section 2 of the Voting Rights Act.
"By restricting access and ease of voter participation, this new law would shrink, rather than expand, access to the franchise,” said Attorney General Eric Holder. “Allowing limits on voting rights that disproportionately exclude minority voters would be inconsistent with our ideals as a nation. Whenever warranted by the facts and the law, the department will not hesitate to use the tools and legal authorities at our disposal to fight against racial discrimination, to stand against disenfranchisement, and to safeguard the right of every eligible American to cast a ballot."
The United States’ complaint contends that at least four provisions of House Bill 589 were adopted with the purpose, and will have the result, of denying or abridging the right to vote on account of race, color, or membership in a language minority group. The complaint asks the court to prohibit North Carolina from enforcing these requirements, and also requests that the court order bail-in relief under Section 3(c) of the Voting Rights Act. If granted, this would subject North Carolina to a new preclearance requirement.
House Bill 589 imposes a number of restrictions on voting that will deny or abridge the right of minority voters to participate in the political process. Over the years, voter participation rates in North Carolina have steadily increased as the state adopted election practices and procedures that made voting more accessible to more voters. In the November 2008 and November 2012 general elections, for example, African-American voters dramatically increased their participation rates and heavily relied on early voting in North Carolina. In the November 2008 and November 2012 general elections, about 71 percent of all African Americans who cast ballots in North Carolina during those elections voted during the early voting period.
Although the prior system encouraged expanded voter participation, the state legislature chose in 2013 to adopt numerous barriers to voting and to eliminate voter-friendly practices. Additionally, the state waited to adopt many of these changes until after the Supreme Court’s recent decision in Shelby County v. Holder, which held that certain jurisdictions, including 40 counties in North Carolina, were no longer required to obtain preclearance of voting changes prior to their implementation.
The complaint cites several provisions of House Bill 589. In particular, it cites: the elimination of the first week of early voting, which reduces the total number of days of early voting (from 17 days to 10 days); the elimination of same-day voter registration during the early voting period; the prohibition on counting certain provisional ballots; and the failure to provide adequate safeguards for voters who lack the limited types of acceptable photo identification cards that will be required in future elections. The first three changes are scheduled to take effect in 2014, and the last change will take effect in 2016.
Based on the state’s own data, all four changes will have a discriminatory impact on minority voters, who disproportionately have relied on the first seven days of early voting, the same-day registration process and past practices regarding the counting of certain provisional ballots in order to participate in the elections process. In addition, the State Board of Elections released a report earlier this year showing that African-Americans disproportionately lacked photo identification cards issued by the state’s Department of Motor Vehicles. Despite knowledge of this report, the legislature adopted a strict photo identification requirement that lacks the types of protections for voters without identification that are common in other states that require voter identification. Minority voters will disproportionately face obstacles and barriers to obtaining certain permitted photo identification cards that are now required to vote, and the State has failed to provide adequate protections to ensure that these voters will not be disenfranchised by the new law.
“The right to vote is one of the sacred rights that we hold dear as a nation,” said Jocelyn Samuels, Acting Assistant attorney General for the Justice Department’s Civil Rights Division. “The Department of Justice will use all the tools it has available to ensure that each citizen can cast a ballot free from discrimination. North Carolina adopted these changes in a rushed process, despite evidence before the legislators that a number of these changes will harm minority voters.”
“The United States Attorneys for all three districts in North Carolina support today’s action to protect the rights of all eligible North Carolinians to exercise the right to vote free from discrimination,” said United States Attorney Ripley Rand of the Middle District of North Carolina. “Anne Tompkins of the Western District, Thomas Walker of the Eastern District and I will ensure that our respective offices provide whatever support and assistance is needed to pursue this important voting rights case.”
If the federal court in this case finds that the State of North Carolina should be covered by Section 3(c), then the state would be required to submit voting changes to the U.S. Attorney General or to the federal court for review prior to implementation, to ensure that the changes do not have a discriminatory effect or a discriminatory purpose.
More information about the Voting Rights Act and other federal voting laws is available on the Department of Justice’s website at www.justice.gov/crt/about/vot. Complaints about discriminatory voting practices may be reported to the Voting Section of the Justice Department’s Civil Rights Division at 1-800-253-3931.
Justice Department Sues Cleveland Landlord for Discriminating Against Families with ChildrenRead the Press Release
The Justice Department announced today that it has filed a lawsuit against the manager and owner of the Linden House Apartments in Cleveland for refusing to rent apartments to families with children in violation of the federal Fair Housing Act.
The complaint, filed in the U.S. District Court for the Northern District of Ohio names the management company responsible for Linden House Apartments, Zaremba Management Company Inc., the manager of Linden House Apartments, Katrina Ivanskis and the owner of the property, Linden Apartment Company. It alleges that Zaremba and Ivanskis maintained a policy of refusing to rent units at Linden House to families with children. It also alleges that the Linden House has a policy of evicting tenants or asking tenants to relocate if they have children while living at Linden House.
“Fighting illegal discrimination in housing is a top priority of the Justice Department,” said Jocelyn Samuels, Acting Assistant Attorney General for Civil Rights. “We will vigorously enforce the Fair Housing Act to ensure families are not denied the home of their choice because they have children.”
The lawsuit seeks an order prohibiting the defendants from engaging in future unlawful discrimination. It also seeks the payment of a civil penalty and monetary damages for the persons who were refused the opportunity to rent at Linden House because of familial status, or who were asked to leave Linden House because of familial status.
The federal Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex familial status, national origin and disability. More information about the Civil Rights Division and the laws it enforces is available at www.usdoj.gov/crt . Individuals who believe that they have been victims of housing discrimination at Linden House or have other information related to this lawsuit can call the Justice Department at 1-800-896-7743 or e-mail the Justice Department at [email protected]. Individuals who believe they have experienced housing discrimination elsewhere can contact the Justice Department at 1-800-896-7743 or [email protected] or contact the Department of Housing and Urban Development at 1-800-669-9777.
The complaint is an allegation of unlawful conduct. The allegations must be proven in federal court.
Justice Department Settles with South Carolina Department of Corrections to End Discrimination Against Inmates with HIVRead the Press Release
The Justice Department announced today that it has reached a settlement with the South Carolina Department of Corrections (SCDC) and its director, to resolve alleged violations of Title II of the Americans with Disabilities Act (ADA) and Section 504 of the Rehabilitation Act of 1973 (Section 504). The agreement, filed today along with a complaint in the U.S. District Court for the District of South Carolina, resolves the department’s investigation of SCDC policies and practices of segregating inmates with HIV/AIDS (HIV) and denying them the opportunity to participate equally in services, programs and activities.
The department’s investigation found that, under policies implemented in the late 1990s, SCDC unnecessarily segregates all inmates with HIV in two of SCDC’s highest security prisons, regardless of their individual security classification. There are currently approximately 350 male and female inmates with HIV who are segregated in SCDC’s highest security prisons solely on the basis of their HIV-positive status. SCDC further segregates inmates with HIV to “HIV-only” dorms in these two high security prisons and the inmates are required to wear clothing and badges that identify their dorms and effectively disclose their HIV status to other inmates, correctional staff and visitors. Because certain programs are not provided at the two prisons, inmates with HIV are unable to participate in a variety of SCDC’s programs, such as drug treatment, work release, pre-release preparation, intermediate psychiatric care and SCDC jobs that are available to other inmates without HIV.
“With this consent decree, SCDC joins 49 other state correctional systems that recognize that individuals with HIV are entitled to equal treatment under the law. Science and longstanding experience have demonstrated that HIV, alone, is not a basis for segregation from the general population without an individualized assessment of the inmate’s circumstances,” said Jocelyn Samuels Acting Assistant Attorney General for the Civil Rights Division, “We applaud SCDC’s efforts to close this final chapter of illegal segregation of inmates based on HIV and, to instead commit to the integration of current and future inmates with HIV, based on their individual circumstances, individualized assessment and classification level.”
“I am proud that this office had the opportunity to work with the Department of Justice and the state of South Carolina in addressing this issue,” said William Nettles, U.S. Attorney for the District of South Carolina. “This consent decree will put us all on the right side of history.”
Title II of the ADA and Section 504 prohibit discrimination against people with disabilities, including people with HIV. Discrimination includes unnecessary segregation of people with disabilities as well as excluding people with disabilities from programs or providing unequal access to people with disabilities. While Title II of the ADA provides that public entities, such as correctional institutions, may impose legitimate safety requirements necessary for the safe operation of their services, programs or activities, the requirements must be based on actual risks, not on mere speculation, stereotypes, or generalizations about people with disabilities. The Department of Justice found that SCDC’s segregation policies were based on generalizations and stereotypes about HIV, not on actual risks. No other U.S. state prison system continues to segregate inmates based solely on their HIV positive status; in fact, a court recently invalidated an Alabama policy that, similar to that of South Carolina, segregated inmates with HIV from the general population.
Under the terms of the consent decree, SCDC and its director will implement policies prohibiting discrimination on the basis of disability, including HIV in particular. SCDC will revoke all policies that separate or segregate inmates with HIV, solely on the basis of HIV and regardless of security classification status. Additionally, inmates with HIV who are currently housed in the SCDC’s two high security prisons will have an opportunity to choose new housing options based on the SCDC’s classification system and without regard to HIV.
SCDC inmates with HIV will also have the opportunity to participate in any programs for which they are otherwise qualified such as drug treatment, work release, pre-release preparation, intermediate psychiatric care, youthful offender programs, re-entry and food service jobs in the cafeteria and canteen. Inmates with HIV who have already been segregated and denied such opportunities will be given priority access to those programs under a plan to be developed by SCDC.
To read the consent decree and complaint or for more information on the ADA and HIV, visit www.ada.gov/aids . Those interested in finding out more about this settlement or the obligations of public entities under the ADA may call the Justice Department’s toll-free ADA information line at 800-514-0301 or 800-514-0383 (TDD), or access its ADA website at www.ada.gov . ADA complaints may be filed by email to [email protected] .
Justice Department Reaches Fair Lending Settlement with Chevy Chase Bank Resulting in $2.85 Million in Relief for HomeownersRead the Press Release
The Justice Department filed a settlement agreement and order today that resolved allegations that Chevy Chase Bank F.S.B. engaged in a pattern or practice of discrimination against qualified African-American and Hispanic borrowers in its home mortgage lending from 2006 through 2009.
The settlement, which is subject to court approval, was filed in conjunction with the Justice Department’s complaint in the U.S. District Court for the Eastern District of Virginia. The complaint alleges that Chevy Chase Bank charged elevated prices on mortgage loans made to African-American and Hispanic borrowers in violation of the Fair Housing Act (FHA) and the Equal Credit Opportunity Act (ECOA). Chevy Chase Bank was purchased in 2009 by Capital One, N.A. and Capital One is its successor in interest. The United States’ claims relate solely to loans originated by Chevy Chase Bank and do not relate to any mortgage lending practices of Capital One.
“This settlement ensures that African-American and Hispanic borrowers who paid more for their mortgages as a result of Chevy Chase Bank’s actions will be properly compensated,” said Jocelyn Samuels, Acting Assistant Attorney General for the Justice Department’s Civil Rights Division. “We commend Capital One for working cooperatively with the Justice Department to reach this agreement.”
The lawsuit originated from a 2010 referral by the Office of the Comptroller of the Currency (OCC) to the Justice Department’s Civil Rights Division.
“Every loan applicant should be evaluated on objective factors, and not on the basis of the color of their skin, so we are pleased that these illegal loan pricing practices are being remedied,” said Comptroller of the Currency Thomas J. Curry. “The OCC is committed to continuing to work with the Department of Justice and our other federal partners on an interagency basis to ensure fair treatment for everyone in the credit markets.”
Under the proposed settlement, Capital One will pay $2.85 million to approximately 3,100 African-American and Hispanic victims of discrimination. The settlement requires borrowers who are eligible for compensation to be notified and provides for monitoring of the compensation process by the department.
“Our office stands committed to ensuring justice and compensation to those who are victims of unfair lending practices,” said Dana J. Boente, Acting U.S. Attorney for the Eastern District of Virginia. “Through our partnership with the Justice Department’s Civil Rights Division and our membership on the Financial Fraud Enforcement Task Force, we remain steadfastly committed to engaging in this important work.”
The Justice Department’s enforcement of fair lending laws is conducted by the Fair Lending Unit of the Housing and Civil Enforcement Section in the Civil Right Division. Since the Fair Lending Unit was established in February 2010, it has filed or resolved 28 lending matters under the Fair Housing Act, ECOA, and the Servicemembers Civil Relief Act. The settlements in these matters provide for a minimum of $660 million in monetary relief for impacted communities and more than 300,000 individual borrowers. The Attorney General’s annual reports to Congress subject to ECOA highlight the department’s accomplishments in fair lending and are available at www.justice.gov/crt/publications .
The Civil Rights Division, the U.S. Attorney’s Office for the Eastern District of Virginia, and the OCC are members of the Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information on the task force, visit www.StopFraud.gov .
A copy of the complaint, as well as additional information about fair lending enforcement by the Justice Department, can be obtained from the Justice Department’s website at www.justice.gov/fairhousing .
Justice Department Files Sexual Harassment Lawsuit in Michigan Against Owners and Property Manager of Alger Meadow ApartmentsRead the Press Release
The Justice Department announced it has filed a lawsuit today in the federal district court for the Western District of Michigan against the owners and manager of Alger Meadow Apartments in Grand Rapids, Mich., alleging that the manager has sexually harassed tenants in violation of the Fair Housing Act.
The lawsuit alleges that Dale VanderVennen, manager at Alger Meadow Apartments, has sexually harassed female residents at the complex. The complaint alleges that such harassment has included unwelcome sexual advances, touching female residents without their consent, entering the apartments of female residents without permission and notice, granting and denying tangible housing benefits based on sex; and taking adverse actions against female tenants when they refused his sexual advances.
"No person should be subject to sexual harassment in their own home, especially when that harassment comes from someone who holds the key to the front door," said Jocelyn Samuels, Acting Assistant Attorney General for the Civil Rights Division.
“This office is committed to addressing civil rights violations and enforcing federal civil rights law” said Patrick A. Miles, Jr. U.S. Attorney for the Western District of Michigan. “Women should not face this type of discrimination and harassment when making housing choices.”
The suit also names as defendants the owners and/or managers of Alger Meadow Apartments: Jack VanderVennen, Linda VanderVennen, DDJ Rental Real Estate LLC, Calcutta Associates LLC, and LLJ LLC .
The suit seeks monetary damages to compensate the victims, a civil penalty and a court order barring future discrimination.
The federal Fair Housing Act prohibits discrimination in housing based on race, color, religion, national origin, sex, disability and familial status. More information about the Civil Rights Division and the laws it enforces is available at www.justice.gov/crt. Individuals who believe that they may have been victims of housing discrimination at Alger Meadows or have other information about this matter can contact the Justice Department at 1-800-896-7743, option 5, or e-mail the Justice Department at [email protected] . Persons who believe that they have experienced unlawful housing discrimination elsewhere can contact the Justice Department at 1-800-896-7743, or e-mail [email protected] , or contact the Department of Housing and Urban Development at 1-800-669-9777.
The complaint is an allegation of unlawful conduct. The allegations must be proven in federal court.
Justice Department Files Lawsuit Against Ruston, Louisiana Public Housing Authority Alleging Race Discrimination in Housing PracticesRead the Press Release
WASHINGTON – The Justice Department today announced that it has filed a lawsuit alleging that the Housing Authority for the City of Ruston, La., has engaged in a pattern or practice of discrimination against African-American tenants, in violation of the federal Fair Housing Act. The Ruston Housing Authority is a public housing authority that provides housing for persons of low income in Ruston. Currently, the Ruston Housing Authority owns and maintains five housing complexes in Ruston.
The complaint alleges that the Ruston Housing Authority maintained a racially segregated housing authority by steering and assigning applicants to its five complexes based on race, rather than in order of their placement on the Ruston Housing Authority’s waiting list. The complaint also alleges that the Ruston Housing Authority’s discriminatory assignment practices have harmed dozens of applicants and tenants who were assigned to segregated housing or delayed housing because of their race.
“Access to housing free from racial discrimination is everyone’s right, including those who seek public housing assistance,” said Jocelyn Samuels, Acting Assistant Attorney General for the Justice Department’s Civil Rights Division. “The department will continue its vigorous enforcement of the Fair Housing Act.”
“The United States Attorney’s Office is committed to addressing unlawful discriminatory practices and enforcing anti-discrimination laws,” said Stephanie A. Finley, U.S. Attorney for the Western District of Louisiana. “Today’s filing is an example of our continuing efforts to end discrimination.”
The federal Fair Housing Act prohibits discrimination in housing based on race, color, religion, national origin, sex, disability and familial status. More information about the Civil Rights Division and the laws it enforces is available at www.usdoj.gov/crt. Individuals who believe that they may have been victims of housing discrimination can call the Housing Discrimination Tip Line at 1-800-896-7743, e-mail the Justice Department at [email protected], or contact the Department of Housing and Urban Development at 1-800-669-9777.
Justice Department Files Lawsuit Against Ruston, La.Public Housing Authority Alleging Race Discrimination in Housing PracticesRead the Press Release
The Justice Department today announced that it has filed a lawsuit alleging that the Housing Authority for the City of Ruston, La., has engaged in a pattern or practice of discrimination against African-American tenants, in violation of the federal Fair Housing Act. The Ruston Housing Authority is a public housing authority that provides housing for persons of low income in Ruston. Currently, the Ruston Housing Authority owns and maintains five housing complexes in Ruston.
The complaint alleges that the Ruston Housing Authority maintained a racially segregated housing authority by steering and assigning applicants to its five complexes based on race, rather than in order of their placement on the Ruston Housing Authority’s waiting list. The complaint also alleges that the Ruston Housing Authority’s discriminatory assignment practices have harmed dozens of applicants and tenants who were assigned to segregated housing or delayed housing because of their race.
“Access to housing free from racial discrimination is everyone’s right, including those who seek public housing assistance,” said Jocelyn Samuels, Acting Assistant Attorney General for the Justice Department’s Civil Rights Division. “The department will continue its vigorous enforcement of the Fair Housing Act.”
“The United States Attorney’s Office is committed to addressing unlawful discriminatory practices and enforcing anti-discrimination laws,” said Stephanie A. Finley, U.S. Attorney for the Western District of Louisiana. “Today’s filing is an example of our continuing efforts to end discrimination.”
The federal Fair Housing Act prohibits discrimination in housing based on race, color, religion, national origin, sex, disability and familial status. More information about the Civil Rights Division and the laws it enforces is available at www.usdoj.gov/crt. Individuals who believe that they may have been victims of housing discrimination can call the Housing Discrimination Tip Line at 1-800-896-7743, e-mail the Justice Department at [email protected], or contact the Department of Housing and Urban Development at 1-800-669-9777.
Jacksonville Man Indicted for Attempted Murder of United States District Judge Timothy J. CorriganRead the Press Release
Jacksonville, Florida - Acting United States Attorney A. Lee Bentley, III announces the unsealing of an indictment charging Aaron M. Richardson (24, Jacksonville) with a number of federal offenses, including the attempted murder of United States District Judge Timothy J. Corrigan. In addition to the attempted murder of a sitting United States District Judge, the indictment also charges Richardson with federal firearm offenses involving the possession and discharge of a stolen firearm, and possession of a firearm and ammunition by a convicted felon. The indictment also charges Richardson with failure to attend court hearings and making numerous false statements to the FBI and his supervising probation officer. Finally, the indictment alleges that Richardson impersonated a Captain in the United States Navy.
In total, the indictment charges Richardson with committing twenty-five separate federal offenses. If convicted on all counts, he faces a maximum penalty of life in federal prison. The indictment also notifies Richardson that the United States intends to forfeit a Savage Arms .30-06 rifle and Winchester ammunition used during the attempted murder.
According to the indictment and court records, Judge Corrigan previously convicted and sentenced Richardson for attempting to make an incendiary device in a 2008 case. Following incarceration for that crime, Richardson was serving a term of supervised release. Beginning in 2012, Richardson made a number of false statements to his probation officer about new arrests and new criminal court appearances in Clay, Duval, and Volusia Counties. On January 30, 2013, Richardson appeared in federal court on a petition alleging his violation of supervised release for committing new crimes. Richardson was released with conditions that day.
The indictment alleges that Richardson continued making false statements to his assigned probation officer and failed to appear for court hearings on June 3 and June 11, 2013. Shortly thereafter, Richardson stole a Savage Arms .30-06 rifle and ammunition from the a Sports Authority store in Jacksonville. Several days later, on June 23, 2013, he discharged that rifle during his attempt to murder Judge Corrigan.
An indictment 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 FBI and multiple other federal, state, and local law enforcement agencies, including the United States Marshals Service, the Bureau of Alcohol, Tobacco, Firearms, and Explosives, the United States Probation Office, Florida Department of Law Enforcement, the Jacksonville Sheriff's Office, the Clay County Sheriff's Office, the Baker County Sheriff's Office, the St. Johns County Sheriff's Office, the Daytona Beach Police Department, and the Bethune Cookman University Public Safety Office. The case will be prosecuted by Deputy Chief Assistant United States Attorney Mac D. Heavener, III and Assistant United States Attorney Mark B. Devereaux.
(Download Factual Basis )
International Narcotics Trafficker Pleads Guilty in Manhattan Federal Court to Conspiring to Distribute One Ton of Cocaine Using A U.S.-Registered AircraftRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that RAWSON EDWARD WATSON, a citizen of the United Kingdom, pled guilty today in Manhattan federal court to conspiring to distribute cocaine using aircraft registered in the United States. WATSON arrived in the Southern District of New York on November 9, 2012, from the Dominican Republic, where he was apprehended on December 15, 2011. WATSON pled guilty before U.S. District Judge Richard J. Sullivan.
Manhattan U.S. Attorney Preet Bharara stated: “Today’s guilty plea ensures that Rawson Edward Watson will be punished for his role in attempting to further the international drug trade using U.S. aircraft.”
According to the Indictment to which WATSON pled guilty and other documents filed in Manhattan federal court:
In late 2011, WATSON and others made arrangements for an aircraft registered in the United States to be flown from the Dominican Republic to Belgium. WATSON was arrested on December 15, 2011 in the Dominican Republic after he boarded a U.S.-registered aircraft that was loaded with 1,000 kilograms of cocaine. The DEA has estimated that the quantity of cocaine on board the aircraft where WATSON was arrested has a wholesale market value of at least $30,000,000.
WATSON, 48, pled guilty to one count of conspiring to possess with intent to distribute five kilograms or more of cocaine on board an aircraft registered in the United States. WATSON faces a maximum sentence of life in prison, and a mandatory minimum sentence of 10 years in prison. Sentencing before Judge Sullivan is scheduled for January 31, 2014, at 10:00 a.m.
Mr. Bharara praised the investigative work of the New Jersey Division of the DEA, the Caribbean Division of the DEA, and the DEA Dominican Republic Country Office. Mr. Bharara also thanked the Government of the Dominican Republic for its assistance, and the U.S. Department of Justice, Office of International Affairs.
This case is being handled by the Office’s Terrorism and International Narcotics Unit. Assistant U.S. Attorneys Anna M. Skotko, Shane T. Stansbury, Michael D. Lockard, and Randall W. Jackson are in charge of the prosecution.
U.S. v. Watson, Epskamp, and Fawaz S1 Indictment
Grand Jury for the District of NebraskaRead the Press Release
United States Attorney Deborah R. Gilg announced the federal Grand Jury for the District of Nebraska has returned 24 indictments charging 26 defendants. Indictments are charging documents that contain one or more individual counts that are merely accusations, and every defendant is presumed innocent unless and until proven guilty.
* Charles J. Baasch, age 54; James M. Holz, age 41, both of Grand Island, Nebraska and Justin Lee Orstad, age 46, of Bothel, Washington, are charged with conspiracy to distribute 500 grams or more of a mixture or substance containing a detectable amount of methamphetamine. The maximum possible penalty if convicted is imprisonment of not less than 10 years and up to life, a $10 million fine, a 5 year term of supervised release, and a $100 special assessment. The indictment also alleges any and all property constituting or derived from any proceeds obtained directly or indirectly as a result of the violation alleged in the indictment, including but not limited to $3,786 in United States currency, should be forfeited to the United States.
* William Bell, Jr., age 53, of Emerson, Nebraska, is charged in a two-count indictment. Count I of the Indictment alleges from on or about March 16, 2011, and continuing through December 31, 2011, the defendant did embezzle funds from the Social Security Administration in the amount of approximately $7, 438.00. The maximum possible penalty if convicted is imprisonment of 10 years, a fine of $250,000, 3 years of supervised release and a $100 special assessment. Count II alleges on or about March 16, 2011, and continuing through December 31, 2011, Mr. Bell intentionally concealed and failed to disclose income and royalties from oil and mineral rights on Indian Trust lands, in order to continue to receive Social Security benefits . The maximum possible penalty if convicted is imprisonment of 5 years, a fine of $250,000, 3 years supervised release, and a $100 special assessment.* Joseph J. Benz, age 52, of Kearney, Nebraska, is charged in a two-count Indictment. Count I of the Indictment alleges from on or about January 1, 2013, and continuing to on or about May 20, 2013, the defendant did knowingly receive and distribute child pornography. If convicted, the maximum possible penalty is imprisonment of not less than 5 years or more than 20 years, a fine of $250,000, supervised release for life, and a $100 special assessment. Benz is charged in Count II of the Indictment with possession of child pornography from on or about May 20, 2013. The maximum possible penalty is imprisonment of 10 years, a $250,000 fine, supervised release for life, and a $100 special assessment. The indictment also alleges any and all property constituting or derived from any proceeds obtained directly or indirectly as a result of the violations alleged in the indictment, should be forfeited to the United States.
* Robert O. Boyd, age 60, of Grand Island, Nebraska, is charged with possession with intent to distribute methamphetamine on or about September 13, 2013. The maximum possible penalty if convicted is imprisonment is up to 20 years, a $1 million fine, a 3 year team of supervised release and a $100 special assessment. The indictment also alleges any and all property constituting or derived from any proceeds obtained directly or indirectly as a result of the violation alleged in the indictment, including but not limited to: $777 in United States currency seized on September 13, 2013, a 2012 Homemade Bobber motorcycle, and $7,622 of United States currency seized on September 16, 2013, should be forfeited to the United States.
* Alejandro Cortes-Guzman, age 32, of Bellevue, Nebraska is charged with illegal reentry into the United States on or about September 17, 2013, following deportation as an aggravated felon. The maximum possible penalty if convicted is imprisonment of 20 years, a $250,000 fine, 3 years of supervised release, and a $100 special assessment.* Glen Fischer, age 55, of Omaha, is charged with possession with intent to distribute 5 grams or more of actual methamphetamine on or about August 28, 2013. The maximum possible penalty if convicted is imprisonment of not less than 5 years and up to 40 years, a $5 million fine, a 4 year term of supervised release and a $100 special assessment.
* Ricardo Flores-Dominguez, age 30, of Omaha, is charged with illegal reentry into the United States on or about September 12, 2013, after deportation or removal. The maximum possible penalty if convicted is imprisonment of 2 years, a $250,000 fine, 1 year of supervised release, and a $100 special assessment.
* Jamie Gomez-Bustamante, age 36, is charged with illegal reentry into the United States on or about September 18, 2013, following deportation as an aggravated felon. The maximum possible penalty if convicted is imprisonment of 20 years, a $250,000 fine, 3 years of supervised release, and a $100 special assessment.* Mark Anthony Grant, age 21, of Winnebago, Nebraska, is charged with child abuse resulting in death on or about September 10, 2013. The maximum penalty if convicted is imprisonment of 20 years to Life, a fine of $250,000, 5 years of supervised release, and a special assessment of $100.
* Laron Hawkins, age 25, of Omaha, Nebraska, is charged with being a felon in possession of a firearm on or about September 13, 2013. The maximum penalty if convicted is imprisonment of 10 years, a fine of $250,000, 3 years supervised release, and a special assessment of $100.
* Dewayne K. Long, age 51, of Omaha, is charged with two counts of wire fraud and two counts of mail fraud in connection with a scheme to defraud investors doing business with Citywide Financial Services Corporation . Long, the President of Citywide, allegedly solicited funds under false pretenses by, among other things, representing that funds entrusted to him for investment purposes would earn returns ranging from 100-400 percent annually. The indictment alleges Long only invested a small amount of the investors’ funds and converted the rest to his own personal use. The indictment alleges three victims lost approximately $480,000. Each of the four counts is punishable by up to 20 years imprisonment, a $250,000 fine, or both, and a $100 special assessment.
* Long is charged in a separate indictment along with Leslie A. Schulz, age 66, of Omaha, with conspiracy to defraud the United States and nine counts of filing false claims against the United States. The indictment alleges Schulz, d/b/a Schulz Accounting and Tax Service in Omaha, conspired with Long to submit fraudulent IRS Forms 1099-OID falsely claiming that millions of dollars had been withheld from the income of various taxpayers who claimed they were entitled to refunds. According to the indictment Long referred clients to Schulz for the purpose of having Schulz prepare their tax returns. It is alleged Schulz filed nine separate federal income tax returns falsely claiming, in total, that $6,862,825 had been withheld which returns sought refunds in the amount of $4,701,010. The conspiracy count is punishable by up to 10 years in prison while the other nine counts are punishable by up to 5 years in prison. All ten counts also can be punished by up to a $250,000 fine.
* Jose Martinez-Rodriguez, age 41, is charged with illegal reentry into the United States on or about September 18, 2013, after being deported following conviction for an aggravated felony. The maximum possible penalty if convicted, is imprisonment of 20 years, a fine of $250,000, 3 years of supervised release and a $100 special assessment.* Eduardo Medina, age 37, of Creston, Iowa, is charged with illegal reentry into the United States on or about September 5, 2013, after being deported following conviction for an aggravated felony. The maximum possible penalty if convicted is imprisonment of 20 years, a fine of $250,000, 3 years of supervised release and a $100 special assessment.
* Mariano Alberto Miranda-Quiroz, age 31, of Omaha, is charged with illegal reentry into the United States on or about August 15, 2013, after deportation or removal. The maximum possible penalty if convicted is imprisonment of 2 years, a $250,000 fine, 1 year of supervised release, and a $100 special assessment.
* Isaias Navarette-Diaz, age 27, of Omaha, Nebraska is charged in a three-count Indictment. Count I of the Indictment charges the defendant with misuse of a Social Security Number on or about October 15, 2012. The maximum possible penalty for this count is imprisonment of 5 years, a fine of $250,000, 3 years supervised release, and a special assessment of $100. Count II of the Indictment alleges on or about October 15, 2012, Navarette-Diaz made a false statement and claimed to be a United States citizen with the intent to receive Federal and State benefits and to be employed in the United States. The maximum possible penalty for this count is imprisonment of 5 years, a $250,000 fine, 1 year of supervised release, and a $100 special assessment. Count III of the Indictment alleges that on or about October 15, 2012, Navarette-Diaz misused a Social Security Card, a State of Colorado Certificate of Live Birth, and a State of Texas Identification Card knowing that said documents were not issued lawfully for his use. The maximum possible penalty for this count is imprisonment of 5 years, a $250,000 fine, 3 years of supervised release, and a $100 special assessment.
* Trent R. Nitzel, age 45, of Omaha, Nebraska, is charged in a two-count indictment. Count I of the Indictment charges Nitzel with bank robbery resulting in the taking of approximately $5,027.00, from Centennial Bank, 6307 Center Street, Omaha, Nebraska, on or about October 24, 2011. The maximum possible penalty if convicted is 20 years imprisonment, a fine of $250,000, 3 years of supervised release, and a $100 special assessment. Count II of the indictment charges the defendant with bank robbery resulting in the taking of approximately $3,730.00, from First National Bank, 1601 Capitol Avenue, Omaha, Nebraska, on or about October 28, 2011. The maximum possible penalty if convicted is 20 years imprisonment, a fine of $250,000, 3 years of supervised release, and a $100 special assessment.
* Lois Louise Powell, age 73, of Kimball, Nebraska, is charged with theft of Government funds from the Social Security Administration on or about January 13, 1998, and continuing through on or about July 24, 2013, by receiving payments to which she knew she was not entitled, having a value of approximately $177,675.90. The maximum possible penalty if convicted, is imprisonment of 10 years, a fine of $250,000, 3 years of supervised release, and a $100 special assessment.
* Jose Rodriguez-Bedolla, age 29, of Crete, Nebraska, is charged with illegal reentry into the United States on or about September 5, 2013, after deportation or removal. The maximum possible penalty if convicted is imprisonment of 2 years, a $250,000 fine, 1 year of supervised release, and a $100 special assessment.
* Paul Rosberg, age 62, of Randolph, Nebraska, is charged in a two-count Indictment. Count I of the Indictment alleges that the defendant solicited another person to threaten use of physical force against a witness on or about August 30, 2013. The maximum possible penalty if convicted is imprisonment of 10 years, a $125,000 fine, 5 years of supervised release, and a $100 special assessment. Count II of the Indictment alleges that Rosberg did corruptly endeavor to influence, obstruct, and impede the due administration of the justice. The maximum possible penalty if convicted is imprisonment of 10 years, a $250,000 fine, 3 years of supervised release, and a $100 special assessment.
* Estaban Ignacio Saligan, age 31, of Omaha, is charged with illegal reentry into the United States on or about September 17, 2013, following deportation as an aggravated felon. The maximum possible penalty if convicted is imprisonment of 20 years, a $250,000 fine, 3 years of supervised release, and a $100 special assessment.* Hugo Sotelo-Gardeo, age 36, of Greeley, Colorado, is charged with illegal reentry into the United States on or about February 29, 2013, after deportation or removal. The maximum possible penalty if convicted is imprisonment of 10 years, a $250,000 fine, 5 years of supervised release, and a $100 special assessment.
* Matthew C. Steging, age 42, of Emerson, Nebraska, is charged in a three-count Indictment. Count I of the Indictment charges the defendant with production of child pornography from on or about July 6, 2013 and continuing on to July 15, 2013. The maximum possible penalty if convicted is imprisonment of not less than 15 years or more than 30 years, a $250,000 fine, 5 years to Life of supervised release, and a $100 special assessment. Count II of the Indictment charges the defendant with receipt and distribution of child pornography on and before August 26, 2013. If convicted, the maximum possible penalty is imprisonment of not less than 5 years or more than 20 years, a fine of $250,000, 5 years to Life of supervised release, and a $100 special assessment. Steging is charged in Count III with possession of child pornography from on and before August 26, 2013. The maximum possible penalty for this count if convicted is imprisonment of 10 years, a $250,000 fine, 5 years to Life supervised release, and a $100 special assessment.
* Joaquin Urias-Barranco, age 40, of Omaha, Nebraska, is charged with illegal reentry into the United States on or about August 20, 2013, following deportation as a felon. The maximum possible penalty if convicted is imprisonment of 10 years, a $250,000 fine, 3 years of supervised release, and a $100 special assessment.Gang Member Sentenced in Dodge City Racketeering CaseRead the Press Release
KANSAS CITY, KAN. – A Dodge City gang member has been sentenced to federal prison for conspiring to commit assaults with dangerous weapons in connection with a federal racketeering case, U.S. Attorney Barry Grissom said today.
Alfonso Banda-Hernandez, 21, Dodge City, Kan., was sentenced to six years in federal prison. He pleaded guilty to two counts of conspiracy to commit assaults with dangerous weapons, which were violent crimes in aid of racketeering. In his plea, he admitted he was a member of the Los Carnales Chingones gang affiliated with the Norteno gang on March 30, 2011, when he conspired to commit an assault with a firearm against George Gonzalez; and in April 2010 when he conspired to commit an assault with a beer bottle against a member of a rival gang.
In his plea, Banda-Hernandez admitted that on March 30, 2011, he and three other Norteno gang members encountered a Sureno gang member named George Gonzalez at a Love’s convenience store in Dodge City. Banda-Hernandez and the other Nortenos began throwing gang signs at Gonzalez and attempting to start a fight. Later that day, they again encountered Gonzalez and chased his car. One of the Nortenos fired shots at Gonzalez’s car.
Banda-Hernandez also admitted that in April 2010 he was with other Norenos when they encountered a member of the rival Sureno street gang in an alley in Dodge City. During a fight, one of the Nortenos used a beer bottle to strike a Sureno gang member in the head, injuring him.
Banda-Hernandez was one of 23 Norteno members indicted in May 2012. It was only the second time a federal RICO Act indictment (Racketeer Influenced and Corrupt Organizations Act) had been filed in Kansas.
Grissom commended the Dodge City Police Department, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Ford County Sheriff’s Office, the Kansas Bureau of Investigation, Assistant U.S. Attorney Lanny Welch and Assistant U.S. Attorney Aaron Smith for their work on the case.
Fugitive Caught with Stolen Firearm Headed to Federal PrisonRead the Press Release
A 19-year old fugitive from Illinois was sentenced to almost four years in federal prison after he was caught in Cedar Rapids with a gun that had been stolen during a home burglary.
Austin Curtis received the prison term after an August 13, 2013 guilty plea to possession of a firearm as a fugitive from justice.
Court documents show that Curtis was charged in Illinois with Domestic Battery Causing Bodily Harm. Instead of appearing in court on the domestic battery charge, Curtis removed a court-ordered ankle bracelet that monitored his location and fled to Cedar Rapids, Iowa, where Curtis had previously lived. During an April 22, 2013 traffic stop in Cedar Rapids, Curtis was found with a 9 millimeter pistol in his waistband. The pistol had been stolen from a home burglary that occurred in Cedar Rapids that same day. At the time he was found with the pistol, Curtis was on probation for a residential burglary that occurred in 2012 in Illinois.
Curtis was sentenced in Cedar Rapids by United States District Court Chief Judge Linda R. Reade. Curtis was sentenced to 46 months’ imprisonment. A special assessment of $100 was imposed. Curtis must serve a 3-year term of supervised release after the prison term. There is no parole in the federal system.
Curtis is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Justin Lightfoot, and was investigated by the Federal Bureau of Investigation’s Safe Streets Task Force, which is comprised of the FBI; the Cedar Rapids Police Department; and the High Risk Unit, Sixth Judicial District Department of Correctional Services.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 13-CR-46.
Four Arrested Following Joint Investigation of Massena Cocaine and Heroin RingRead the Press Release
Investigation Yields Seizures of Crack, Heroin, and Cocaine
PLATTSBURGH, NEW YORK – Four men have been indicted and arrested on federal felony drug trafficking charges, announced United States Attorney Richard S. Hartunian. The arrests followed a year-long investigation led by Homeland Security Investigations (HSI), the Massena Police Department (MPD), the Saint Lawrence County Sheriff’s Department and the New York State Police (NYSP).
The indictment charges the following individuals with conspiracy to possess with intent to distribute and to distribute a controlled substance in violation of 21 U.S.C. § 846:
Matthew Malu, aka “Compo” and “Capo,” 24, of New York City
Ian Hendricks, aka “Jew,” 19, of Massena, New York
Star Perrin, 34, of Massena, New YorkEach defendant listed above faces a mandatory minimum sentence of five (5) years imprisonment, a forty (40) year maximum term of imprisonment, and the possibility of a $5,000,000 fine.
A separate indictment charges Adam Gauthier, 24, of Massena, New York, with possession with the intent to distribute a controlled substance. Gauthier faces a twenty (20) year maximum term of imprisonment and the possibility of a $1,000,000 fine.
The investigation revealed that this organization used suppliers in New York City to obtain large quantities of cocaine, heroin and crack for redistribution. After obtaining the drugs, the organization employed couriers to transport the drugs from New York City to Massena, New York, where the organization’s distribution network sold ounce and gram quantities of the drugs to drug users and other wholesale drug dealers in the area.
During the investigation, law enforcement officers seized drugs and money from the defendants, to include:
1. On March 15, 2013, law enforcement officers from the Syracuse Police Department and HSI seized approximately 82.5 grams of heroin from Adam Gauthier.
2. On September 13, 2013, officers from HSI, NYSP, and MPD seized approximately 27.32 grams of crack, 29.94 grams of powder cocaine, and 117.38 grams of heroin from a package sent to Ian Hendricks. 3. On September 27, 2013, offices from HSI and MPD seized approximately $5,000 in cash from Star Perrin.The District Attorneys of Clinton, Franklin and St. Lawrence Counties, the Saint Regis Mohawk Tribal Police Department, the United States Customs and Border Protection Office of Air and Marine, the United States Customs and Border Protection Office of Field Operations, the Drug Enforcement Administration, the Royal Canadian Mounted Police, the New York Attorney General’s Office, the Oneida Indian Nation Police and the Customs and Border Protection United States Border Patrol assisted in the investigation.
The United States is represented in this prosecution by Assistant U.S. Attorney Daniel C. Gardner and Assistant U.S. Attorney Katherine Kopita.
The charges contained in the indictments are merely accusations and the defendants are presumed innocent until and unless proven guilty.
Former State Corrections Accountant SentencedRead the Press Release
Springfield, Ill. – U.S. District Judge Sue E. Myerscough today sentenced Mary Ann Bohlen, 47, a former Illinois Department of Corrections employee, to serve 21 months in federal prison for embezzlement. Bohlen was also ordered to pay restitution of $27,174 to the Illinois Department of Corrections and $23,540 to the Illinois Correctional Employees Memorial Association. Bohlen was ordered to self-report to the federal Bureau of Prisons to begin serving her sentence on a date to be determined by the Bureau of Prisons.
Bohlen, of Edinburg, Ill., pled guilty in February 2013 to embezzlement from various department funds over a period of four years, from 2007 to 2011. Bohlen waived indictment and pleaded guilty to two counts of mail fraud and two counts of embezzlement of government funds as charged in an information filed by the U.S. Attorney’s Office for the Central District of Illinois.
According to court documents, Bohlen was employed from February 2004 until Feb. 15, 2012, as Assistant Deputy Director and Supervisor of Central Accounting for the Division of Fiscal Accounting Compliance. In her position, Bohlen had access to various financial accounts and funds including the Inmate Benefit Fund, Inmate Commissary Fund, and the Reimbursement and Education Fund. In April 2006, Bohlen became treasurer of the Illinois Correctional Employees Memorial Association, an organization of IDOC employees formed to recognize and memorialize IDOC employees who were killed or suffered permanent disability in the line of duty. Bohlen actively solicited employees to become members of the association, which was funded by membership fees, fundraisers and donations.
Bohlen admitted that from June 2007 to July 2011, she embezzled more than $50,000 from the Illinois Correctional Employees Memorial Association. From March 2008 to April 2011, Bohlen embezzled more than $27,000 from other various funds, including the Inmate Benefit Fund, Inmate Commissary Fund, and the Reimbursement and Education Fund, to conceal and replace the funds she had embezzled from the Memorial Association.
Bohlen admitted that she wrote more than $50,000 worth of checks drawn on the Memorial Associations’ bank account which were payable to herself, to cash, and to a business in Owaneco, Ill., where she was an employee, partner or accountant.
The charges were investigated by the Illinois State Police and the U.S. Postal Inspection Service. Assistant U.S. Attorney Gregory K. Harris prosecuted the case.
Former Project Manager Convicted for Role in Conspiracy Schemes Involving Two EPA Superfund Sites in New JerseyRead the Press Release
WASHINGTON — A New Jersey jury convicted a former project manager for his central role in conspiracies that spanned seven years and involved kickbacks in excess of $1.5 million at two Environmental Protection Agency (EPA) Superfund sites in New Jersey, the Department of Justice announced today. The jury returned guilty verdicts on 10 counts charged in the indictment against Gordon D. McDonald, which was filed on Aug. 31, 2009.
In addition to today’s conviction, to date, eight individuals and three companies have pleaded guilty to charges arising out of this investigation.
After a two-week trial, McDonald, a former project manager for a prime contractor, was convicted of engaging in separate bid-rigging, kickback and/or fraud conspiracies with three subcontractors at two New Jersey Superfund sites – Federal Creosote in Manville, N.J., and Diamond Alkali in Newark, N.J. He was also convicted of engaging in an international money laundering scheme, major fraud against the United States, accepting illegal kickbacks, committing two tax violations and obstruction of justice. The various conspiracies took place at different time periods from approximately December 2000 until approximately April 2007. McDonald was acquitted on counts eight and nine involving certain fraud and kickback charges.
“Today’s guilty verdict sends a clear message that corrupt purchasing officials will be held accountable for engaging in fraudulent schemes designed to undermine the government’s competitive contracting practices,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “The Antitrust Division is committed to ensuring there is fair play and competition in our markets.”
As part of the conspiracies, McDonald and co-conspirators at his former company accepted kickbacks from sub-contractors in exchange for the award of sub-contracts at Federal Creosote. McDonald provided co-conspirators at Bennett Environmental Inc., a Canadian-based company that treats and disposes of contaminated soil, with bid prices of their competitors, which allowed them to submit higher bid prices and still be awarded the sub-contracts. In exchange for McDonald’s assistance, Bennett Environmental, Inc. provided him with over $1.5 million in kickback payments.
According to court documents, McDonald also accepted kickbacks in exchange for the award of sub-contracts at the Federal Creosote and Diamond Alkali sites from the owner of JMJ Environmental Inc., a wastewater treatment and chemical supply company, and the co-owner of National Industrial Supply LLC, an industrial pipes supplier. He participated in a conspiracy with the owner of JMJ and co-conspirators to rig bids and allocate sub-contracts at inflated prices for wastewater treatment supplies and services at Federal Creosote.
The cleanup at Federal Creosote was primarily funded by the EPA. An interagency agreement between the EPA and the U.S. Army Corps of Engineers designated that the U.S. Army Corps of Engineers hire the prime contractors at Federal Creosote. According to a settlement with the EPA and the New Jersey Department of Environmental Protection, Tierra Solutions was required to fund remedial action and maintenance of Diamond Alkali. Tierra Solutions hired the prime contractor for the remedial action and maintenance of Diamond Alkali.
Sentencing is scheduled for Jan. 6, 2014, before Judge Susan D. Wigenton. To date, more than $6 million in criminal fines and restitution have been imposed, and five individuals have been sentenced to serve more than 10 years in total prison time.
Today’s conviction is the result of an ongoing federal antitrust investigation being conducted by the Antitrust Division’s New York Office, the EPA Office of Inspector General and the Internal Revenue Service-Criminal Investigation. Anyone with information concerning bid rigging, kickbacks, tax offenses or fraud relating to subcontracts awarded at the Federal Creosote Superfund site or Diamond Alkali Superfund site should contact the Antitrust Division’s New York Office at 212-335-8000 or visit www.justice.gov/atr/contact/newcase.htm.Former President and Fund Administrator of Electrical Union Plead Guilty to EmbezzlementRead the Press Release
Jessie Bell, the former pension fund administrator of the International Union of Electronic, Electrical, Salaried, Machine and Furniture Workers, Local 431 (“Local 431”) Pension Fund (“Pension Fund”) pleaded guilty today at the federal courthouse in Brooklyn, New York, before United States Magistrate Judge Marilyn D. Go to embezzling from the Pension Fund. On May 7, 2013, Frederick Meyers, Bell’s father and the former president of Local 431, also pleaded guilty to embezzling from the Pension Fund.
The guilty pleas were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, Jonathan Kay, Regional Director for the New York Regional Office of the United States Department of Labor, Employee Benefits Security Administration (“DOL-EBSA”), and Cheryl Garcia, Acting Special Agent in Charge, Office of Inspector General, Office of Labor Racketeering and Fraud Investigation, New York Region (“DOL-OIG”).
During their respective plea allocutions, both defendants admitted that from approximately January 2005 to October 2008, they embezzled $85,000 by using a Pension Fund American Express credit card for their personal expenses, including travel, gasoline, parking, meals and cellular telephone bills, and also used Pension Fund bank checks to pay personal expenses such as parking tickets and parking expenses. In addition, from approximately January 2005 to July 2008, Bell received over $100,000 in compensation from the Pension Fund that was not approved by the Pension Fund Board of Trustees.
“Members of Local 431 entrusted their hard-earned dollars, made by the sweat of their brow, to Bell and her father, relying on them to safeguard those funds until the day they had to put down their tools. Instead of watching over the workers’ future, Bell and her father stole those funds and squandered them on their own daily expenses,” stated United States Attorney Lynch. “Union executives who take pension contributions from hardworking union members to fund their own personal spending sprees will be held accountable.” Ms. Lynch expressed her grateful appreciation to DOL-EBSA Regional Director Kay and DOL-OIG Acting Special Agent in Charge Garcia, whose offices led the government’s investigation.
When sentenced, each defendant faces a maximum of five years’ imprisonment.
The government’s case is being prosecuted by Assistant United States Attorney Anthony M. Capozzolo.
The Defendants:
FREDERICK MEYERS
Jersey City, New Jersey
Age: 74JESSIE BELL
Newark, New Jersey
Age: 52Former Owner of Los Angeles Medical Equipment Supply Company Indicted in $4 Million Medicare Fraud SchemeRead the Press Release
A former owner of a Los Angeles medical equipment supply company has been indicted for allegedly engaging in a $4 million Medicare fraud scheme.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney André Birotte Jr. of the Central District of California, Special Agent in Charge Glenn R. Ferry of the Los Angeles Region of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), and Assistant Director in Charge Bill L. Lewis of the FBI’s Los Angeles Field Office made the announcement.
Valery Bogomolny, 41, of Los Angeles, Calif., was indicted in the Central District of California on six counts of health care fraud, each of which carries a maximum penalty of 10 years in prison upon conviction. Bogomolny was taken into custody on Sept. 27, 2013, and the indictment was unsealed following his initial appearance in federal court that afternoon.
According to court documents, Bogomolny was the owner and president of Royal Medical Supply, a durable medical equipment (DME) supply company located in Los Angeles. From approximately January 2006 through October 2009, he allegedly engaged in a scheme to commit health care fraud through the operation of Royal by providing medically unnecessary power wheelchairs and other DME to Medicare beneficiaries and submitting false and fraudulent claims to Medicare. Court documents allege that Bogomolny knew the prescriptions and medical documents were fraudulent and that some of the beneficiaries did not receive the DME, yet he certified to Medicare with the submission of each claim that the DME was received and was medically necessary.
Bogomolny, through Royal, allegedly submitted approximately $4 million in fraudulent claims to Medicare for power wheelchairs and related services, and Medicare paid Royal approximately $2.7 million on those claims.
The charges and allegations contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
The case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Central District of California. This case is being prosecuted by Trial Attorney Fred Medick of the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,500 defendants who have collectively billed the Medicare program for more than $5 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
Former Owner of Los Angeles Medical Clinic Management Company Indicted in $13 Million Medicare Fraud SchemeRead the Press Release
The former owner of a Los Angeles medical clinic management company has been indicted for his role in a $13 million scheme to defraud Medicare.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney André Birotte Jr. of the Central District of California, and Assistant Director in Charge Bill L. Lewis of the FBI’s Los Angeles Field Office made the announcement.
Mikran “Mike” Meguerian, 36, of Glendale, Calif., was indicted in the Central District of California on one count of conspiracy to commit health care fraud and five counts of health care fraud, each of which carries a maximum penalty of 10 years in prison upon conviction. Meguerian was arrested on Sept. 26, 2013, and the indictment was unsealed following his initial appearance in federal court on Sept. 27, 2013.
According to court documents, Meguerian owned Med Serve Management, a medical clinic management company located in Van Nuys, Calif. From approximately 2006 through February 2009, he allegedly engaged in a conspiracy to commit health care fraud, in part through the operation of Med Serve. According to court documents, Meguerian oversaw several medical clinics that generated prescriptions and other medical documents for medically unnecessary power wheelchairs and other durable medical equipment (DME). Meguerian and his co-conspirators then sold the prescriptions to DME supply companies, knowing that the prescriptions were fraudulent. Court documents allege that, based on these fraudulent prescriptions, the DME supply companies then submitted false and fraudulent claims to Medicare.
Court documents allege that fraudulent prescriptions from Meguerian’s clinics were instrumental in generating approximately $13.6 million in fraudulent claims to Medicare, and Medicare paid approximately $7.6 on those claims.
The charges and allegations contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
The case was investigated by the FBI and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Central District of California. This case is being prosecuted by Trial Attorneys Fred Medick and Blanca Quintero of the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,500 defendants who have collectively billed the Medicare program for more than $5 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
Former Owner of SMC Electronics Sentenced to 13 Years in Prison for Defrauding Nortel NetworksRead the Press Release
Oklahoma City, Oklahoma – Mehran Koranki, formerly of Yukon, Oklahoma, has been sentenced to 13 years in prison for defrauding Nortel Networks by submitting bogus warranty claims for computer parts, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma.
Koranki owned and controlled two Oklahoma City companies in the business of maintaining, repairing, and selling computer networking components – SMC Electronics and Allied Solutions Technical Center (“ASTC”). Both companies had extended warranty agreements with Nortel Networks that allowed businesses with Nortel computer systems to receive replacements for broken or defective parts. These agreements required these businesses to use replacement parts in their own Nortel systems and not to sell replacement parts to third parties.
From February of 2005 until March of 2006, SMC used its extended warranty agreement with Nortel to obtain hundreds of thousands of dollars’ worth of computer networking equipment. During 2005 and the first three months of 2006, SMC fraudulently claimed that it needed replacements for over 850 computer parts under its warranty agreement, mostly line cards for Passport 8600 computer networks. The evidence also showed that SMC did not even use a Nortel computer network. With Koranki’s knowledge and encouragement, SMC then sold these parts for a profit. After Nortel refused to send more parts to SMC, Koranki used his other company, ASTC, to ask for even more replacement parts under a separate extended warranty agreement registered under an employee’s home address and a fake name.
A grand jury indicted Koranki on February 2, 2010, on mail fraud and money laundering charges. The mail fraud counts were based on Federal Express shipments of replacement parts from Nortel’s warehouse in Memphis, Tennessee, to SMC’s offices in Oklahoma City. The money laundering counts related to SMC’s deposits of more than $10,000 from computer companies that purchased Nortel replacement parts that SMC had obtained fraudulently.
After four days of testimony in November of 2010, a jury found Koranki guilty of all 48 counts of mail fraud and two counts of money laundering. After trial, Koranki left the United States and is currently an international fugitive.
Today United States District Judge Timothy D. DeGiusti sentenced Koranki in absentia to 156 months in prison and ordered him to pay $6,010,157.95 in restitution to Nortel Networks. The court also entered a forfeiture money judgment against Koranki in the amount of $6,299,182.95.
This sentence is the result of an investigation conducted by the Postal Inspection Service and Internal Revenue Service Criminal Investigation. The case was prosecuted by Assistant U.S. Attorneys Scott E. Williams and Amanda Maxfield Green.
Former NBA Player and CEO of the George Group Convicted on All Counts in $2 Million Ponzi SchemeRead the Press Release
TRENTON, N.J. – C. Tate George, former NBA basketball player and the CEO of purported real estate development firm The George Group, was convicted today on all counts on which he was indicted in connection with his role in orchestrating a $2 million investment fraud scheme, U.S. Attorney Paul J. Fishman announced.
The jury deliberated four hours before convicting George, 45, of Newark, of four counts of wire fraud after a three-week trial before U.S. District Judge Mary L. Cooper. George was immediately remanded into federal custody to await sentencing, which is scheduled for Jan. 16, 2014.According to documents filed in this case and evidence presented at trial:
George, a former player for the New Jersey Nets and Milwaukee Bucks professional basketball teams, held himself out as the CEO of The George Group and claimed to have more than $500 million in assets under management. He pitched prospective investors, including several former professional athletes, to invest with the firm and told them their money would be used to fund The George Group’s purchase and development of real estate development projects, including projects in Connecticut and New Jersey. George represented to some prospective investors that their funds would be held in an attorney trust account and personally guaranteed the return of their investments, with interest.
Based on George’s representations, investors invested more than $2 million in The George Group between 2005 and 2011, which he deposited in both the firm’s and his personal bank account. Instead of using investments to fund real estate development projects as promised, George used the money from new investors to pay existing investors in Ponzi-scheme fashion, as well as paying for his daughter’s Sweet 16, extensive renovations on his New Jersey home (that has since been foreclosed), the mortgage on a New Jersey home, the mortgage on a Florida home, taxes to the IRS, and traffic tickets. The defendant gave money to family members and friends. He also spent $2,905 for a reality video about himself (a “sizzle reel” for “The Tate Show,” is available on YouTube). The George Group had virtually no income-generating operations.
Each of the wire fraud counts on which he was convicted is punishable by a maximum potential penalty of 20 years in prison and a $250,000 fine.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford; postal inspectors of the USPIS, under the direction of Postal Inspector in Charge Maria L. Kelokates; and criminal investigators with the U.S. Attorney’s Office, with the investigation leading to today’s conviction.
The government is represented by Assistant U.S. Attorneys Joseph B. Shumofsky and Zach Intrater of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.stopfraud.gov.13-401
Defense counsel: David E. Schafer Esq., and Andrea Bergman Esq., Assistant Federal Public Defenders, TrentonFormer Global Wealth Management Firm Employee Admits Insider Trading ChargesRead the Press Release
TRENTON, N.J. – A former employee of a global wealth management firm admitted today to passing on material, nonpublic information concerning Gilead Sciences, Inc.'s (Gilead) $11 billion acquisition of New Jersey-based Pharmasset Inc. (Pharmasset), U.S. Attorney Paul J. Fishman announced.
Kevin Dowd, 38, of Boca Raton, Fla., pleaded guilty before U.S. District Judge Anne E. Thompson in Trenton federal court to an information charging him with conspiracy to commit securities fraud.
According to documents filed in this case and statements made in court:
Dowd was a registered representative of a global wealth management firm (identified as “Brokerage Firm A” in court documents) in the firm’s Aventura, Fla., branch office and held the titles of second vice president and financial advisor. He joined the firm in 2005 and worked there through late October 2012. The Aventura branch’s largest customer was a member of Pharmasset’s board of directors. The Pharmasset board member informed his advisors at the Aventura branch that Pharmasset was in the process of being acquired by a large pharmaceutical company and that the acquisition price was going to be in the high $130s per share.
On Nov. 21, 2011, Gilead publicly announced that it had entered into an agreement with Pharmasset to acquire the company for $11 billion, or $137 per share in cash. The purchase price represented an approximately 89 percent premium over Pharmasset’s closing price of $72.67 on Nov. 18, 2011. In response to the announcement, Pharmasset’s stock price increased to $134.14 per share at the close of trading on Nov. 21, 2011.
On Nov. 18, 2011, prior to the public announcement of the Pharmasset acquisition, Dowd tipped conspirator “J.F.”, a childhood friend, about the impending Pharmasset acquisition, knowing that J.F. was going to trade on the material, nonpublic information. Immediately following the tip, J.F. purchased approximately $196,000 worth of Pharmasset stock. J.F. then also tipped conspirator “E.B.”, who purchased 100 highly speculative “out-of-the-money” call options in Pharmasset within minutes of J.F.’s purchase of Pharmasset stock.
On Nov. 21, 2011, after the public announcement of the Pharmasset acquisition, J.F. and E.B. liquidated the positions in Pharmasset they had acquired Nov. 18, 2011. J.F. netted an illegal profit of $163,621 based on Dowd’s tip. Trades placed by E.B. resulted in an illegal profit of $544,706 from the sale of Pharmasset options. Dowd admitted that his personal gain from passing along the material, nonpublic information was $35,000.Dowd faces a maximum potential penalty of five years in prison and a fine of $250,000. Sentencing is scheduled for Jan. 15, 2014.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, with the investigation leading to today’s guilty plea. He also thanked the U.S. Securities and Exchange Commission’s Market Abuse Unit and Philadelphia Regional Office, under the direction of Daniel M. Hawke for its assistance.
The government is represented by Deputy Chief Gurbir S. Grewal and Assistant U.S. Attorney Mala Ahuja Harker of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.stopfraud.gov.
13-400
Defense counsel: Peter Willis Esq., Jersey City, N.J.Dowd Information
Former Florida Man Pleads Guilty to Murder-For-Hire Conspiracy and Related CrimesRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced that a former resident of Cape Coral, Florida, pleaded guilty today to conspiring with a Scranton man to commit a murder-for-hire and committing two related offenses before Senior U.S. District Court Judge A. Richard Caputo.
According to United States Attorney Peter J. Smith, the defendant, Edward McLaughlin, age 64, admitted to conspiring with Gary Williams to murder McLaughlin’s ex-wife. McLaughlin admitted to offering Williams a job with a company in Florida if he would carry-out the murder, and Williams agreed to do so.
The conspiracy began when McLaughlin and Williams were cell mates in the Pike County Prison in June 2011, and continued through June 2012. During that time period, McLaughlin shipped a German Mauser rifle and ammunition from Florida to Williams in Scranton, Pennsylvania, to be used to carry-out the murder. McLaughlin and Williams also used the mail and telephones in planning and attempting to carry-out the murder plot.
McLaughlin pleaded guilty to three crimes related to the interstate murder-for-hire scheme: conspiracy to use interstate facilities to commit a murder-for-hire; carrying and possessing a firearm in relation to and in furtherance of a crime of violence; and unlawfully shipping a firearm and ammunition in interstate commerce as a convicted felon.
McLaughlin was most recently charged in a third superseding indictment filed in September 2013, as a result of an investigation by the Federal Bureau of Investigation and the Scranton Police Department.
Judge Caputo scheduled sentencing in the case for January 6, 2014. McLaughlin faces a possible maximum sentence of life in prison, a fine of up to $750,000, a maximum term of supervised release of 11 years, and a $300 special assessment.
Gary Williams, McLaughlin’s co-defendant, was convicted last month of five counts related to the murder-for-hire scheme.
Assistant U.S. Attorney Francis P. Sempa is prosecuting the case.
****