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Wednesday 14 August 2013
Drug Trafficking Organization Leader Sentenced to 40 Years in PrisonRead the Press Release
PHOENIX – On Aug. 12, 2013, Artemio Pena-Torrecillas, 26, of Culiacan, Sinaloa, Mexico, was sentenced by U.S. District Judge Susan R. Boltonto 40 years in prison. Pena-Torrecillas was found guilty by a federal jury on May 30, 2013, of conspiracy to possess with intent to distribute 500 grams or more of methamphetamine, conspiracy to commit money laundering, two counts of possession with intent to distribute methamphetamine, and two counts of possession of firearms in furtherance of a drug trafficking offense.
U.S. Attorney John S. Leonardo stated, “Through the efforts of a long-term investigation by federal and local law enforcement, a leader and other members of a drug trafficking organization have been removed from our community. Our neighborhoods are safer as a result of the removal of these drug dealers who possessed firearms to further their illegal enterprise.”
“Drugs and violence go hand in hand. This deadly combination must be met with combined law enforcement expertise at the local, state, county and federal levels,” said DEA Special Agent in Charge Doug Coleman. “DEA is committed to keeping violent drug traffickers off the streets and putting them where they belong—behind bars.”
Between January 2011 and April 2011, Pena-Torrecillas, along with Cruz Ortega-Ruano, led a Phoenix-based drug trafficking organization (DTO) responsible for the distribution of pound-quantities of exceptionally pure methamphetamine as well as the collection of narcotics proceeds. Law enforcement used sophisticated investigative techniques to dismantle the DTO resulting in a five-defendant indictment against members of the DTO. Pena-Torrecillas was responsible for obtaining pounds of methamphetamine from a source of supply, hiring drug couriers to drive vehicles equipped with sophisticated hidden compartments to transport the drugs, and distributing the drugs to customers. Other co-defendants including Gerardo Diarte-Lara, Francisco Torrecillas-Torres, and Juan Martin Tapia-Bernal assisted the DTO by acting as stash house operators and couriers. Through the investigation into this DTO, law enforcement seized approximately 12 pounds of methamphetamine, over $200,000 in narcotics proceeds, 60 firearms including assault rifles and handguns, high capacity firearm magazines, ammunition, and vehicles from the DTO at three separate stash houses operated by the organization.
In addition to Pena-Torrecillas, four co-defendants entered guilty pleas and were sentenced on Dec. 3, 2012, by U.S. District Judge Frederick J. Martone:- Cruz Ortega-Ruano, 32, of Mexico, was sentenced to 20 years in prison. He was responsible for coordinating the delivery of narcotics and collection of narcotics proceeds for the DTO.
- Gerardo Diarte-Lara, 28, of Mexico, was sentenced to 17.5 years in prison. He served as a trusted narcotics and narcotics proceeds courier for the organization.
- Francisco Torrecillas-Torres, 39, of Mexico, was sentenced to 10 years in prison for his role as a narcotics courier.
- Juan Martin Tapia-Bernal, 46, of Mexico, was sentenced to 23 years in prison. He was a stash house operator and courier for the DTO.
The investigation in this case was conducted by the Drug Enforcement Administration, Bureau of Alcohol, Tobacco, Firearms, and Explosives, Arizona Department of Public Safety, Mesa Police Department, Tempe Police Department, Navajo County Sheriff’s Office, and Pinal County Sheriff’s Office. The prosecution was handled by Jonell L. Lucca and John Z. Boyle, Assistant U.S. Attorneys, District of Arizona, Phoenix.
CASE NUMBER: CR-11-00731-PHX-SRB
RELEASE NUMBER: 2013-064_Pena-TorrecillasFor more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
District Man Sentenced to 14 Months in PrisonRead the Press Release
For Theft of More Than $340,000 in Government Funds
-Defendant Cashed in on Benefits in Name of Deceased Mother-WASHINGTON - Eugene Weatherford, 60, of Washington, D.C., was sentenced today to 14 months incarceration on a federal charge stemming from the theft of more than $340,000 in government money, announced U.S. Attorney Ronald C. Machen Jr., Michael McGill, Special Agent in Charge from the Social Security Administration’s Office of Inspector General, and Patrick E. McFarland, Inspector General for the Office of Personnel Management.
Weatherford pled guilty in May 2013 in the U.S. District Court for the District of Columbia to theft of government funds. He was sentenced by the Honorable Richard W. Roberts. Following his incarceration, Weatherford will be placed on supervised release for 36 months. Weatherford was also ordered to pay $346,522 in restitution and to complete 50 hours of community service.
In connection with the guilty plea, Weatherford admitted that from March 1999 through June 2012, he received and negotiated U.S. Treasury checks issued in the name of his mother, who died in February 1999. These checks included retirement benefits from the U.S. Social Security Administration and annuity benefits from the U.S. Office of Personnel Management.
According to the government’s evidence, following his mother’s death, Weatherford continued to receive and negotiate the U.S. Treasury checks in her name by depositing them into a joint bank account that they shared. In certain instances, Weatherford signed his own name in endorsing the backs of the checks issued in his mother’s name, and in other instances, he left the endorsement blank, aside from instructions to deposit the money into the joint bank account.
Weatherford admitted that, through this scheme, he obtained approximately $255,038 in Social Security retirement benefits and $91,484 in OPM annuity benefits, for a total illicit gain of approximately $346,522.In announcing the sentence, U.S. Attorney Machen, Special Agent in Charge McGill and Inspector General McFarland commended those who investigated the case from the Social Security Administration’s Office of Inspector General and OPM’s Office of Inspector General. They also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialists Angela Lawrence and Nicole Wattelet, Assistant U.S. Attorney Catherine Connelly, who assisted with forfeiture issues, and Assistant U.S. Attorney David Last, who prosecuted the case.
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Denver Insurance Executive Michael Van Gilder Sentenced for Insider TradingRead the Press Release
DENVER – Insurance executive Michael Van Gilder, age 45, of Denver, was sentenced today by Senior U.S. District Court Judge Wiley Y. Daniel to serve 5 years’ probation with the first 6 months in home detention with electronic monitoring, U.S. Attorney John Walsh and FBI Denver Special Agent in Charge Thomas Ravenelle announced. In the course of sentencing proceedings, Judge Daniel formally accepted Van Gilder’s guilty plea and adjudged him guilty of a count of securities fraud based on illegal insider trading. In addition, Judge Daniel ordered Van Gilder to pay a fine of $5,000.
The Van Gilder case was prosecuted in conjunction with the U.S. Attorney’s Office for the Southern District of New York. The U.S. Securities and Exchange Commission conducted a parallel civil investigation and substantially contributed to the criminal investigation of the case as well. Van Gilder was indicted by a federal grand jury on October 24, 2012. He pled guilty before Judge Daniel on May 1, 2013. He was sentenced today, August 14, 2013.
According to publicly available records, including the indictment and plea agreement, Van Gilder was the chief executive officer and a member of the board of directors of Van Gilder Insurance Company, an insurance business owned by the defendant’s family. Van Gilder was a close personal friend of a senior executive at Delta Petroleum. Delta Petroleum was a Denver-based oil and gas exploration and development company whose core area of operations was in the Gulf Coast and Rocky Mountain regions. The company’s stock was traded on NASDAQ under the ticker symbol “DPTR.” Van Gilder at times arranged for and provided insurance policies covering certain of Delta’s business operations.
From November 5, 2007 and continuing until at least January 9, 2008, Van Gilder committed securities fraud by trading in securities based on material, non-public information.
Specifically, on November 8, 2007, Delta publicly announced and filed with the U.S. Securities and Exchange Commission (SEC) a quarterly report disclosing its operational performance, revenues, earnings and other financial performance for its quarterly period which ended September 30, 2007. Three days prior to the disclosure, the financial publication Barron’s disseminated an article entitled “Day of Reckoning” focusing on Delta, expressing pessimism about the company and its stock. Following the publication of the article, the price of Delta’s common stock dropped $1.49 per share. Van Gilder was, at the time, a shareholder of Delta and held shares of its common stock and long-term call options to purchase Delta common stock in a brokerage account with Merrill Lynch and Company.
The Barron’s article was brought to Van Gilder’s attention. Based on the article, the defendant called his stockbroker and asked whether he should sell his shares of Delta. Later that day, Van Gilder spoke with the senior Delta executive. According to court documents, the executive conveyed to the defendant that Delta planned on announcing figures in its third quarter financial report that would not miss its third quarter forecasts and projections for its financial and operational performance, a first in a number of quarters that Delta would meet its projected numbers. At the time Van Gilder received this information, the financial and operational performance had not yet been publicly released and was not generally known to the investing public.
Based on this confidential material, Van Gilder decided not to sell his Delta investment but instead instructed his stockbroker to buy more Delta common stock on his behalf. As a result, the stockbroker purchased an additional 1,250 shares of Delta common stock at $15.55 per share. Several hours after he purchased the additional stock, Van Gilder emailed two friends and told them that the Barron’s article was “bogus” and that they should buy Delta stock because Delta “will hit their numbers.” In the November 8, 2007 third quarter results Delta disclosed earnings and other financial figures that were in line with or exceeding previous forecasts and predictions of its performance for the quarter.
In late November 2007, discussions also began for Delta to get a large cash infusion from a privately held investment company called Tracinda, owned by California resident Kirk Kerkorian, through a large equity investment by Tracinda in the oil and gas company. The indictment alleges that the Delta senior executive shared confidential information about the possible investment with defendant Van Gilder, and that, on November 26, 2007, following a series of calls and other communications, Van Gilder contacted his stockbroker and purchased an additional 1,750 shares of Delta common stock at $13.87 and $13.88 per share.
As court documents further relate, this Delta senior executive continued to share information about the confidential discussions about the contemplated Tracinda equity investment in Delta with defendant Van Gilder, as the confidential discussions progressed over the course of early December 2007. As a result, according to court documents, on December 8, 2007, Van Gilder, in turn, emailed his stockbroker to advise him that he “wanted to purchase as much Delta stock as possible” and two days later arranged through the stockbroker to purchase an additional 4,000 shares of Delta common stock at $17.64 per share. Within minutes of execution of these purchases, Van Gilder spoke by phone with a family member, who, several minutes later, instructed his own stockbroker to purchase Delta common stock.
On December 17, 2007, the senior Delta executive advised its board of directors of his discussions with Tracinda. The board authorized the executive to proceed with negotiations with Tracinda. That evening, the executive exchanged a series of text messages with the defendant regarding the board’s decision. Several hours later Van Gilder directed that $40,000 be wire transferred from a bank account to his Merrill Lynch brokerage account.
On December 19, 2007, a representative of Tracinda contacted the senior Delta executive and made an offer for Tracinda to purchase a one-third interest in Delta through a purchase of Delta’s common stock at $17 per share. At the time, Delta’s stock was trading at approximately $14.65 per share. Tracinda’s overture remained confidential. Van Gilder, knowing about the overture, purchased 200 call options, entitling him to purchase up to 20,000 shares of Delta common stock at $20 per share. Delta continued negotiations with Tracinda, and on December 22, 2007, Tracinda agreed to increase its stock purchase to $19 per share. The court documents state that in a series of calls Van Gilder was informed of the progress of the confidential negotiations. Immediately following one of these conversations between Van Gilder and the senior Delta executive, Van Gilder sent an email to two of his family members, with the subject line entitled “Xmas present.” In the email, he advised the family members to purchase Delta stock because “something significant will happen in the next 2-4 weeks.”
On December 24, 2007, Van Gilder, through his stockbroker, purchased 3,000 more shares of Delta common stock at prices ranging between $15.63 and $15.65 per share, and 90 more call options to purchase up to 9,000 additional shares at $20 per share. On December 28, 2007, during the course of working to finalize the Tracinda stock purchase, the senior Delta executive exchanged a series of cell phone text messages with Van Gilder. As a result, the defendant caused $272,212 from a bank account to be wire transferred into his Merrill Lynch brokerage account. The following day Van Gilder emailed his stockbroker, requesting the broker to “get it on Delta asap.”
On December 29, 2007, Delta’s board of directors approved a finalized stock purchase agreement for Tracinda to purchase approximately 35% of Delta’s common stock for $19 per share. On Monday, December 31, 2007, before the commencement of NASDAQ’s regular trading hours, Delta and Tracinda issued a press release announcing the stock purchase agreement. Within an hour of the commencement of regular trading hours that day, Van Gilder’s stockbroker purchased an additional 4,000 shares of Delta common stock at prices ranging from $19.28 to $19.33 per share, and 114 additional call options. By the close of regular hours trading that day, Delta’s common stock price had risen $3.34 from its previous close of $15.51. Over the course of the next three trading days, Delta’s stock price continued to rise, closing at $22.82 per share by January 4, 2008. On January 9, 2008, Van Gilder sold the 290 call options that he had purchased between December 19 and December 24, 2007, realizing a profit of approximately $86,100 on the transaction.
Immediately before sentencing, pursuant to the plea agreement in this case, Van Gilder provided the United States a check for $86,100 to repay these illegally derived trading gains.
“Working closely with our partners in the U.S. Attorney’s Office in the Southern District of New York, the FBI and the SEC, we were able to obtain a conviction and sentence of a well-known Denver executive whose greed got the best of him,” said U.S. Attorney John Walsh.
“To ensure our financial markets operate fairly, the FBI is committed to aggressively pursuing those who commit investment fraud,” said FBI Denver Special Agent in Charge Thomas Ravenelle. “I am confident the results of this investigation will deter others who seek to gain illegally from insider information.”
This case was investigated by the Federal Bureau of Investigation, New York and Denver Divisions, with the assistance of and working with the U.S. Securities and Exchange Commission.
Van Gilder was prosecuted by Assistant U.S. Attorney Ken Harmon and Special Assistant U.S. Attorney Michael Levy from the Southern District of New York.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
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Customs and Border Protection Officer and Wife Charged with Fraud over Education Reimbursement ClaimsRead the Press Release
A U.S. Customs and Border Protection officer living in Victoria, B.C. Canada, and his wife were arrested and charged today with conspiracy to defraud the U.S. with respect to claims for filing false claims for educational expenses, announced U.S. Attorney Jenny A. Durkan.
JOHN ERIC WEAVER and his wife JOY WEAVER appeared in U.S. District Court in Tacoma today. WEAVER had been assigned to desk duty since the investigation began, and has now been placed on paid administrative leave.According to the complaint, U.S. Customs and Border Protection (CBP) officers, like other federal employees stationed overseas, are eligible for an education allowance for their minor children. Those expenses include basic tuition for required courses and necessary elective courses, books and supplies required by the school, and local transportation on school days between the school and the employee’s home. The complaint alleges that in 2009 and 2010, JOY WEAVER created fictitious invoices from the school their children attended, claiming tuition that was twice the actual amount of tuition. JOHN ERIC WEAVER submitted the false documents and claims to the CBP Office of Administration. The fraud was discovered in June 2010 when a financial program specialist checked with the school to see if there were costs for books and supplies that should be reimbursed. When the school indicated the invoices did not reflect the accurate cost of tuition and had not been produced by the school, U.S. Immigration and Customs Enforcement’s (ICE) Office of Professional Responsibility (OPR) began its investigation. The invoices submitted by the WEAVERS were determined to be false. The complaint alleges that the couple filed false claims for education reimbursement of more than $8,000.
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.
Conspiracy to file a false claim is punishable by up to ten years in prison and a $250,000 fine.
The case was investigated by U.S. Immigration and Customs Enforcement’s (ICE) Office of Professional Responsibility (OPR) with the assistance of ICE’s Homeland Security Investigations, U.S. Customs and Border Protection’s Office of Internal Affairs, and the Department of Homeland Security’s Office of the Inspector General.The case is being prosecuted by Assistant United States Attorney Marci Ellsworth.
Chiropractor Sentenced to Five Years in Prison for Fraudulent Insurance SchemeRead the Press Release
Fort Myers, Florida - United States District Judge John E. Steele sentenced Dr. Stephen M. Lovell (55, Windermere) to five years in federal prison for conspiracy to commit health care fraud. As part of his sentence, the court also entered a money judgment in the amount of $1.695 million, the proceeds of the offense. A jury found Lovell guilty on February 28, 2013, following a two-week trial.
According to testimony presented at trial, Xtreme Care Rehabilitation Center Inc. (“Xtreme Care”) was operating in Cape Coral, Florida as an unlicensed health care clinic since 2009. The State of Florida licensing requirements were circumvented by the conspirators as a result of the purported exclusive ownership of these clinics by licensed health care practitioners, including licensed chiropractor Dr. Stephen M. Lovell. As a result of the purported ownership of the clinics by a licensed health care practitioner, these clinics avoided greater regulatory scrutiny. In actuality, other conspirators including Francisco Huici Fernandez and Ernesto Diaz were the true owners of the clinics.
In furtherance of the health care fraud, the conspirators caused individuals to be recruited to be involved in staged accidents and received injuries. These individuals would then go to Xtreme Care in exchange for payment. Xtreme Care then billed insurance companies by submitting false claims through the mail for alleged medically necessary treatments that these patients received. Treatment was either never provided to these patients or was not medically necessary. Upon payment by the insurance company, the proceeds of the fraudulent activity were then transferred to corporations created by the conspirators to launder the proceeds of the criminal activity. Ultimately, Lovell and his co-conspirators received the benefits of the fraudulent activity through payments or expenditures for themselves from the corporate bank accounts.
Francisco Huici Fernandez and Ernesto Diaz previously pleaded guilty for their roles in the case. On March 13, 2013, Fernandez was sentenced to five years and ten months in federal prison. On July 15, 2013, Diaz was sentenced to eight years in federal prison.This case was investigated by the Cape Coral Police Department, the Internal Revenue Service Criminal Investigation, the United States Secret Service, Hialeah Police Department, City of Miami Police, Florida Department of Financial Services, along with the assistance of the National Insurance Crime Bureau and the Federal Reserve Board - Office of the Inspector General. It was prosecuted by Assistant United States Attorney Jesus M. Casas.
Charleston Felon Who Purchased A Stolen Pistol Pleads Guilty to Federal ChargeRead the Press Release
CHARLESTON – A Charleston man pleaded guilty in federal court to possession of a stolen firearm, announced U.S. Attorney Booth Goodwin. Brian M. Smith, 30, illegally purchased a Kel Tec 9-millimeter pistol from a person on December 2, 2009. Smith pleaded guilty today before United States District Judge Thomas E. Johnston in Charleston.
Smith purchased the firearm in exchange for $100. The illegal firearm transaction took place at Smith’s Charleston residence. Smith knew or had reasonable cause to believe that the pistol was stolen. On December 3, 2009, Smith was approached by law enforcement officers at an automotive parts store located in Charleston. Police conducted a search of Smith and found the 9-millimeter pistol on his person.
Smith was previously convicted of three counts of burglary in October 2005 in the Circuit Court of Kanawha County. He did not have his rights to possess a firearm restored.
Smith faces up to 10 years in prison and a $250,000 fine when he is sentenced in November.The investigation was conducted by the Charleston Police Department, with assistance by the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant United States Attorney Erik S. Goes is in charge of the prosecution.
This case is being brought as part of Project Safe Neighborhoods. Project Safe Neighborhoods is a nationwide commitment to reduce gun crime in the United States by networking existing local programs targeting gun crime.
Charges Filed Against Employee Leasing Firm Aracoma Contracting, Llc for Structuring Millions in Cash Out of Bank of MingoRead the Press Release
Company involved in scheme to bilk BrickStreet Mutual Insurance out of millions in insurance premiums also structured over $2 million in cash out of Bank of Mingo
CHARLESTON, W.Va. – An information was filed today alleging that a Williamson employee leasing firm, Aracoma Contracting, LLC (“Aracoma”), structured cash withdrawals from the company’s bank accounts held at the Bank of Mingo. In March 2013, Aracoma’s principals, Jerome Edward Russell, 50, of Williamson, W.Va., and Frelin R. Workman, 58, of Belfry, KY, pled guilty to their involvement in an honest services mail fraud scheme to defraud BrickStreet Mutual Insurance (BrickStreet) of insurance premiums and tax evasion. Today’s charges, filed against the corporation, allege that Aracoma generated the cash to bribe the BrickStreet auditor, Arville Sargent, 52, of Chapmanville, and pay employees cash wages was generated by structuring monies from accounts held at Bank of Mingo. “Structuring” involves the breaking down of cash transactions in amounts of $10,000 or less for the purpose of avoiding a financial institution’s reporting requirements to the Internal Revenue Service (IRS).
Acting on behalf of Aracoma, Russell and Workman formed a longstanding relationship with the Bank of Mingo, and, particularly, one of its employees at the bank’s Williamson branch. From January 2009 through April 2012, Aracoma, through its representatives including Russell and Workman, structured at least $2.2 million out of Bank of Mingo. Russell and Workman also enlisted the assistance of a number of individuals who agreed to appear at the Williamson branch of Bank of Mingo and cash cashier’s checks.
The cash from the bank withdrawals was later brought back to Aracoma’s office to be used to pay cash payroll.
During the scheme, Aracoma sent advance forms to the Williamson branch of Bank of Mingo prior to the structured cash withdrawals, so the bank could prepare the cash ahead of time. Bank of Mingo would then prepare cashier’s checks in the names of the identified individual or individuals and pre-count the requested cash. When an individual or individuals from Aracoma appeared at a Bank of Mingo teller window, a bank representative presented them with the cashier’s check in the individual’s name. The check was immediately endorsed and the individual was given the pre-counted cash.
Despite numerous occasions when multiple individuals appeared at the same teller window at the Williamson branch of Bank of Mingo to endorse cashier’s checks that exceeded $10,000 on Aracoma’s line of credit, Bank of Mingo routinely failed to file a currency transaction report, as required by law.
An investigation determined that the cash structured out of Bank of Mingo by Aracoma was used to pay the company’s payroll in cash, therefore avoiding the payment of employment taxes and also to make bribe payments to a former BrickStreet field auditor, Arville Sargent.Sargent, 52, of Chapmanville, previously pleaded guilty in March to honest services mail fraud and tax evasion. As a field auditor, Sargent purposely allowed four “employee leasing” companies, including Aracoma, to falsify documents drastically understating their actual payroll. In exchange for saving those policyholders millions of dollars in insurance premiums rightfully owed to BrickStreeet, Sargent accepted hundreds of thousands of dollars in cash bribes and other things of value, including a Yamaha Rhino all-terrain vehicle.
Russell and Workman each face up to 25 years in prison and a $500,000 fine when they are sentenced on August 22, 2013.
Sargent faces up to 25 years in prison and a $500,000 fine when he is sentenced on August 28, 2013.
The FBI, the IRS, the West Virginia State Police and the West Virginia Insurance Commission conducted the investigations. This investigation was also handled in coordination with the United States Attorney’s Office for the Western District of Virginia and the IRS’s local Abingdon, Virginia Resident Agency. Assistant United States Attorney Thomas Ryan is in charge of the prosecutions.
Cary Collector of Child Pornography Sentenced to 180 Months ImprisonmentRead the Press Release
RALEIGH - United States Attorney Thomas G. Walker announced that in federal court today JOHN WARREN COURTNEY, 47, was sentenced by Senior United States District Court Judge Malcolm J. Howard to 180 months imprisonment, 15 years of supervised release and a $4,000 fine for receipt of child pornography.
COURTNEY pled guilty to a Criminal Information filed on February 15, 2013, charging him of one count of Receipt of Child Pornography. According to the investigation during the years of 2011 and 2012, COURTNEY did knowingly receive 4,883 visual depictions of minors engaged in sexually explicit conduct on files containing digital images and 246 videos, all in violation of Title 18, United States Code, Section 2252(a)(2). The defendant was caught attempting to photograph a child urinating in a public bathroom at Adventure Landing in Raleigh. A subsequent examination of the defendant’s computer revealed numerous videos of nude and partially nude young boys in public restrooms at local restuarants and a swimming pool.
This case was part of the Project Safe Childhood initiative, a national program aimed at ensuring that criminals exploiting children are effectively prosecuted by making full use of all available law enforcement resources at every level. For more information about this important national project, Project Safe Childhood, go to www.projectsafechildhood.gov.
Investigation of this case was conducted by the Federal Bureau of Investigation (FBI) and the Raleigh Police Department. Assistant United States Attorney Jay Exum prosecuted the case for the United States.
Carroll County Company Founder Sentenced to over 3 Years in Prison for $1.9 Million Securities FraudRead the Press Release
Founder and Former President of Gargoyles, Inc. Misrepresented
Company Sales and Customers to InvestorsBaltimore, Maryland - U.S. District Judge Richard D. Bennett sentenced John F. “Jef” Curran, III, age 44, of Westminster, Maryland today to 37 months in prison, followed by three years of supervised release, for securities fraud, in connection with the sale of $1.9 million worth of stock in his company, Gargoyles, Inc. Judge Bennett also ordered that Curran forfeit $1,963,065, and pay restitution of $1,250,768 to repay victims for the money they invested in Gargoyles, Inc.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; and Postal Inspector in Charge Gary R. Barksdale of the U.S. Postal Inspection Service - Washington Division.
According to the statement of facts that is part of his plea agreement, Curran was the founder, president and single largest shareholder of Gargoyles, Inc., located in Westminster, Maryland. Gargoyles was a self-described “advanced materials application company,” purportedly doing business with customers in a variety of settings including the military and law enforcement.From January 2009 to September 2010, Curran sold approximately $1.9 million worth of Gargoyles stock to investors. Curran admitted that he falsely represented to investors and potential investors that Gargoyles had customers, sales contracts and purchase orders for its products when, in fact, it did not. Curran also misrepresented his education to investors.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
United States Attorney Rod J. Rosenstein thanked the FBI and U.S. Postal Inspection Service for their work in the investigation and thanked the Securities Division of the Office of the Maryland Attorney General for its assistance in the case. Mr. Rosenstein praised Assistant U.S. Attorney Leo Wise, who prosecuted the case.
California Man, Martin Vellozzi, Pleads Guilty to Mail FraudRead the Press Release
MARTIN VELLOZZI, age 56, of Rancho Palos Verdes, California, pleaded guilty as charged today before U.S. District Judge Susie Morgan to one-count Bill of Information charging him with mail fraud for his role in creating and selling non-authentic Merceds-Benz diagnostic equipment, announced U.S. Attorney Dana J. Boente.
According to the court documents, VELLOZZI owned LMV Industries, a California-based company that offered technical information and support for Mercedes-Benz automobiles. Between about 2005 and July 2012, VELLOZZI also produced and sold unauthorized and non-authentic versions of the Mercedes-Benz Star Diagnostic System (SDS), a hand-held computer containing proprietary, confidential software. Such diagnostic devices are used by mechanics to identify problems with and assure the safety of motor vehicles employing electronic control systems. By selling non-authentic, unauthorized SDS that bore Mercedes-Benz logos and trademarks, VELLOZZI mislead purchasers into thinking that the equipment he was selling was authentic and authorized by Daimler AG, when, in fact, they were not.
Furthermore, according to court documents, the “real” SDS sold for between $8,300 and $22,000 each; VELLOZZI sold the non-authentic SDS, which contained Mercedes-Benz logos and trademarks, for approximately $6,000. VELLOZZI worked with a company in Durham, North Carolina and a company in Harahan, Louisiana to manufacture, sell, and repair the “fake” SDS, which were then sent through commercial interstate carrier, including Federal Express and the United Parcel Service, to the purchasers. On some occasions, when one of the fake SDS units VELLOZZI sold would break, the Harahan-based company would provide fixes or “patches” either to VELLOZZI or directly to the customer. VELLOZZI also used cracking software, called “keygens” to “unlock” SDS software, override Mercedes-Benz’s security protections, and make the software (and software updates) work on his unauthorized SDS. In total, VELLOZZI sold approximately ninety-five (95) non-authentic SDS, at approximately $6,000 each.
VELLOZZI faces a maximum term of imprisonment of 20 years, followed by up to 3 years of supervised release, and a $250,000 fine. Sentencing is scheduled for November 20, 2013 at 2:00 pm.
This case is being investigated by agents from the Federal Bureau of Investigation. The prosecution of this case is being handled by Assistant United States Attorney Jordan Ginsberg.
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CHARGING DOCUMENTS: U.S. V. Javier Martin-Artajo and U.S. V. Julien GroutRead the Press Release
U.S. v. Javier Martin-Artajo Complaint
U.S. v. Julien Grout ComplaintBrandon Man Pleads Guilty to Killing Federally Protected Black BearRead the Press Release
Jackson, Miss. -- Ryan C. Murphy, 32, of Brandon, Mississippi, pled guilty in U.S. District Court today to killing a Louisiana Black Bear, a federally protected animal under the Endangered Species Act, U.S. Attorney Gregory K. Davis announced.
Murphy killed the Louisiana Black Bear while bow hunting on November 16, 2012, in Issaquena County, Mississippi. Murphy was immediately sentenced today by U.S. Magistrate Judge F. Keith Ball to a fine of $10,000. He was also ordered to pay $10,000 in restitution to the State of Mississippi and $5,000 to the BEaR Foundation, a non-profit foundation for the restoration of Black Bears in the State of Mississippi. Murphy was placed on two years of probation and prohibited from hunting worldwide for a period of two years. His bow was forfeited as part of his sentence.
This case was investigated by the Mississippi Department of Wildlife, Fisheries, & Parks and the United States Federal Fish and Wildlife Service. It was prosecuted by Assistant U.S. Attorney Darren LaMarca.If you believe you have been a victim of fraud from a person or an organization soliciting relief funds on behalf of storm victims, contact the National Center for Disaster Fraud toll free at:
(866) 720-5721
You can also fax information to:
(225) 334-4707
or e-mail it to:
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Boise Man Pleads Guilty to Conspiracy to Launder Money in Treasure Valley “Spice” CaseRead the Press Release
Defendants Charged with Multiple Counts of Conspiring to Distribute “Spice,” Money Laundering, Smuggling
BOISE – William B. Mabry, 45, of Boise, Idaho, pleaded guilty yesterday in United States District Court to count four of the indictment charging him with conspiracy to launder money, U.S. Attorney Wendy J. Olson announced.
In court yesterday, Mabry admitted that beginning in March 2011, he knowingly entered into a conspiracy with other individuals to conduct financial transactions in connection with a “spice” manufacturing and distribution business. Mabry admitted that he knowingly participated and assisted in the financial activity of the business by engaging in bank and other financial transactions, through both domestic and foreign financial institutions. The transactions consisted of the proceeds of prior illegal spice sales and other specified unlawful activity and, in many cases, the transactions conducted through financial institutions separately consisted of criminally derived property of a value greater than $10,000; most of the transactions occurred in Idaho, Washington and California.
The charge of conspiracy to launder money is punishable by to 20 years in prison, a maximum fine of $500,000 or twice the value of the property involved in the transaction, whichever is greater, and up to three years of supervised release.
Sentencing is set for November 4, 2013, before U.S. District Judge Edward J. Lodge at the federal courthouse in Boise.
Mabry and four co-defendants were indicted by a federal grand jury on May 14, 2013, on charges of conspiracy to distribute a controlled substance analogue; conspiracy to smuggle goods into the United States; conspiracy to sell and transport drug paraphernalia; and conspiracy to launder money. Mark A. Ciccarello, Robert A. Eoff, Troy L. Palmer and Holly F. Ciccarello are set for trial on October 22.
The indictment alleges that between March 1, 2011 and July 9, 2012, within the states of Idaho, Alaska, California, Washington, and Wisconsin, the defendants conspired to purchase and import from China chemicals known as AM2201, UR-144, and XLR11, which they used to treat innocuous plant matter to make “spice”—a synthetic cannabinoid similar to substances listed in Schedule I of the Controlled Substances Act. The indictment further alleges that one or more of the defendants conspired to sell and transport drug paraphernalia for sale, and that they conspired to launder money illegally obtained through their drug, importation and paraphernalia violations. The government is seeking forfeiture of proceeds derived from the alleged criminal activities.
The case is the result of a joint investigation of the Organized Crime and Drug Enforcement Task Force (OCDETF), which included the cooperative law enforcement efforts of the Drug Enforcement Administration (DEA), U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), Internal Revenue Service-Criminal Investigation, Boise Police Department, Meridian Police Department, Ada County Sheriff’s Office, Canyon County Sheriff’s Office, and Nampa Police Department. Other federal agencies participating in the OCEDTF program include the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Federal Bureau of Investigation (FBI), and U.S. Marshals Service.
The OCDETF program is a federal, multi-agency, multi-jurisdictional task force that supplies supplemental federal funding to federal and state agencies involved in the identification, investigation, and prosecution of major drug trafficking organizations.
Attorney General, Manhattan U.S. Attorney, and FBI Assistant Director-In-Charge Announce Charges Against Two Derivatives Traders in Connection with Multi-Billion Dollar Trading Loss at JPMorgan Chase & CompanyRead the Press Release
Eric Holder, the Attorney General, Preet Bharara, the United States Attorney for the Southern District of New York, and George Venizelos, the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), announced the unsealing of criminal Complaints against JAVIER MARTIN-ARTAJO and JULIEN GROUT for their alleged participation in a conspiracy to hide the true extent of losses in a credit derivatives trading portfolio maintained by the Chief Investment Office (“CIO”) of JPMorgan Chase & Company (“JPMorgan”). MARTIN-ARTAJO served as a Managing Director and Head of Credit and Equity Trading for the CIO, and GROUT was a Vice President and derivatives trader in the CIO.
Attorney General Eric Holder said: “Our financial system has been hurt in recent years not just by risky bets gone bad, but also, in some cases, by criminal wrongdoing. We will not stop pursuing those who violate the public trust and compromise the integrity of our markets. I applaud U.S. Attorney Bharara, his colleagues in the Southern District of New York, and all of our partners on the President’s Financial Fraud Enforcement Task Force for their longstanding commitment to combating all forms of financial fraud. And I pledge that we will continue to move both fairly and aggressively to bring the perpetrators of financial crimes to justice.”
Manhattan U.S. Attorney Preet Bharara said: “As alleged, the defendants, Javier Martin-Artajo and Julien Grout, deliberately and repeatedly lied about the fair value of billions of dollars in assets on JPMorgan's books in order to cover up massive losses that mounted month after month at the beginning of 2012, which ultimately led JPMorgan to restate its losses by $660 million. The defendants’ alleged lies misled investors, regulators, and the public, and they constituted federal crimes. As has already been conceded, this was not a tempest in a teapot, but rather a perfect storm of individual misconduct and inadequate internal controls. The difficulty inherent in precisely valuing certain kinds of financial positions does not give people a license to lie or mislead to cover up losses; it does not confer a license to create false books and records or to make false public filings. And that goes double for handsomely-paid executives at a public company whose actions can roil markets and upend the economy.”
FBI Assistant Director-in-Charge George Venizelos said: “The complaints tell a story of a group of traders who got in over their heads, and to get out, doubled down on a series of risky positions. In the first quarter of 2012, boom turned to bust, as the defendants, concerned about losing control to other traders at the bank, fudged the numbers on their daily book, and in some cases completely made them up. It brought a whole new meaning to cooking the books.”
In a separate action, the U.S. Securities and Exchange Commission (“SEC”) announced civil charges against MARTIN-ARTAJO and GROUT.
According to the allegations in the criminal Complaints unsealed today in Manhattan federal court:
JPMorgan’s CIO, is a component of the bank’s Corporate/Private Equity line of business, which, according to the bank, exists to manage the bank’s excess deposits – approximately $350 billion in 2012. Since approximately 2007, the CIO’s investments have included a so-called Synthetic Credit Portfolio (“SCP”), which consists of indices and tranches of indices of credit default swaps (“CDS”). A credit default swap is essentially an insurance contract on an underlying credit risk, such as corporate bonds. CDS indices are collections of CDSs that are traded as one unit, while CDS tranches are portions of those indices, usually sliced up by riskiness.
Under U.S. Generally Accepted Accounting Principles (“GAAP”) and according to JPMorgan policy, CDS traders were required to value the securities in their portfolios on a daily basis. Those values, or “marks,” became part of the bank’s daily books and records. Because CDS indices and tranches are not traded over an exchange, traders are required to look to various data points in order to value their securities, such as actual transaction prices, price quotations from market makers, and values provided by independent services (such as Totem and MarkIT). JPMorgan’s accounting policy, which used the same methodology employed by the independent services, provided that the “starting point for the valuation of a derivatives portfolio is mid-market,” meaning the mid-point between the price at which market-makers were willing to buy or sell a security. Through about January 2012, CIO traders generally marked the securities in the SCP approximately to this mid-point, which they sometimes referred to as the “crude mid.”
The SCP was extremely profitable for JPMorgan – it produced approximately $2 billion in gross revenues since its inception – but in the first quarter of 2012, the SCP began to sustain consistent and considerable losses. From at least March 2012, MARTIN-ARTAJO and GROUT conspired to artificially manipulate the SCP marks to disguise those losses. They did so, among other reasons, to avoid losing control of the SCP to other traders at JPMorgan.
Although MARTIN-ARTAJO pressured his traders, including GROUT, to “defend the positions” in early 2012 by executing trades at favorable prices, the SCP lost approximately $130 million in January and approximately $88 million in February. In March 2012, when the market moved even more aggressively against the CIO’s positions, MARTIN-ARTAJO specifically instructed GROUT and the head SCP trader, Bruno Iksil (who has entered a non-prosecution agreement), not to report losses in the SCP unless they were tied to some identifiable market event, such as a bankruptcy filing by a company whose bonds were in the CDS index. MARTIN-ARTAJO explained that “New York” – meaning, among others, JPMorgan’s Chief Investment Officer – did not want to see losses attributable to market volatility.
By mid-March 2012, GROUT was explicitly and admittedly “not marking at mids.” He maintained a spreadsheet that kept track of the difference between the price that GROUT recorded in JPMorgan’s books and records, on the one hand, and the “crude mids,” on the other. By March 15, 2012, according to GROUT’s spreadsheet, the difference had grown to approximately $292 million. In a recorded on-line chat the same day, GROUT explained that he was trying to keep the marks for most of the SCP’s positions “relatively realistic,” with the marks for one particular security “put aside.” That is, GROUT mis-priced that one particular security, of which the SCP held billions of dollars’ worth, by the full $292 million. The following day, Iksil told MARTIN-ARTAJO that the difference had grown to $300 million, and “I reckon we get to 400 [million] difference very soon.” In a separate conversation, Iksil remarked to GROUT that “I don’t know where he [MARTIN-ARTAJO] wants to stop, but it’s getting idiotic.”
In the days that followed, GROUT at times ignored Iksil’s instructions on how to mark the positions, and instead, followed MARTIN-ARTAJO’s mandate to continue to hide the losses. By March 20, 2012, Iksil insisted that GROUT show a significant loss: $40 million for the day. In a recorded call, MARTIN-ARTAJO excoriated Iksil, finally emphasizing, “I didn’t want to show the P&L [the profit and loss].” Throughout the remainder of March 2012, while Iksil continued to try to insist that MARTIN-ARTAJO acknowledge the reality of the losses, GROUT, at MARTIN-ARTAJO’s instructions, continued to hide them. As of March 30, 2012 – the last day of the first quarter of 2012 – GROUT continued to fraudulently understate the SCP’s losses. These incorrect figures in the SCP were not only integrated into JPMorgan’s books and records, but also – as MARTIN-ARTAJO and GROUT were well aware – into the bank’s quarterly financial filing for the first quarter of 2012 with the SEC.
During the course of the mis-marking scheme carried out by MARTIN-ARTAJO and GROUT, the CIO’s Valuation Control Group (“VCG”) was supposed to serve as an independent check on the valuations assigned by traders to the securities that the traders were marking at month-end. The VCG, however, was effectively only staffed by one person and did not perform any independent review of the valuations. Instead, the VCG tolerated valuations outside of the bid-offer spread as presented by MARTIN-ARTAJO and other CIO traders.
In August 2012, after MARTIN-ARTAJO and GROUT were stripped of their responsibilities over the SCP and their scheme was discovered, JPMorgan restated its first quarter 2012 earnings, and recognized an additional loss of $660 million in net revenue attributable to the mis-marking of the SCP. JPMorgan announced that it was restating its earnings because it had lost confidence in the “integrity” of the marks submitted by GROUT, at MARTIN-ARTAJO’s direction.
MARTIN-ARTAJO, 49, a Spanish citizen, and GROUT, 35, a French citizen, are charged in one count of conspiracy; one count of falsifying the books and records of JPMorgan; one count of wire fraud; and one count of causing false statements to be made in JPMorgan’s filings with the SEC. They each face a maximum sentence of five years in prison on the conspiracy count, and 20 years in prison on each of the three remaining counts in the Complaints, and a fine of the greater of $5,000,000 or twice the gross gain or gross loss as to certain of the offenses.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force, on which Mr. Bharara serves as a Co-Chair of the Securities and Commodities Fraud Working Group. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’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.
Mr. Bharara praised the work of the FBI. He also thanked the SEC and the Department of Justice’s Office of International Affairs.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Eugene Ingoglia and Matthew L. Schwartz are in charge of the prosecutions.
The charges contained in the Complaints are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
U.S. v. Javier Martin-Artajo Complaint
U.S. v. Julien Grout ComplaintAtlanta Attorney Admits to Stealing over $300,000 from Law Firm ClientsRead the Press Release
ATLANTA - Thomas Dickson has pleaded guilty to defrauding more than 50 clients out of funds that were deposited into his law firm’s trust account.
“As a lawyer, Dickson had a duty to act with his clients’ best interests in mind,” said United States Attorney Sally Quillian Yates. “Instead, he used his position at the law firm to steal from clients he was supposed to protect.”
Mark F. Giuliano, Special Agent in Charge, FBI Atlanta Field Office, stated: “The defendant in this matter displayed a reckless disregard for his firm’s many clients by diverting monies due them to his personal account. The FBI will continue to investigate such cases of criminal misconduct and bring them forward for prosecution.”
According to United States Attorney Yates, the charges and other information presented in court: In December 2008, while employed with a large Atlanta law firm, Dickson was retained by tenants in common (TIC) owners of commercial real estate purchased through DBSI, Inc. DBSI, Inc., an Idaho based company, sold TIC investments or fractional ownership interests in commercial real estate to investors across the country. In November 2008, DBSI filed bankruptcy and many of the investors lost their life savings. In December 2008, several TIC property owners retained Dickson to represent their interests in the bankruptcy action. In 2009, Dickson encouraged TIC owners to transfer rents and other income into his law firm’s trust account.
Between February 24, 2010, and January 6, 2012, Dickson directed his law firm’s accounting department to unlawfully transfer over $300,000 from the law firm’s trust account to a business checking account in Plano, Texas. Dickson led the firm’s accounting department to believe that the funds were being transferred on behalf of TIC clients to pay third party expenses. Instead the money was transferred into a personal checking account controlled by Dickson and his wife.
In January 2012, the law firm initiated an internal investigation and Dickson, 52, of Atlanta, Ga., was terminated. In March 2013, Dickson was disbarred by the Georgia State Bar.The charge of wire fraud in this case carries a maximum sentence of 20 years in prison and a fine of up to $250,000.00.
Sentencing is scheduled for October 30, 2013, at 10:00 a.m. before United States District Judge Willis B. Hunt.
This case is being investigated by the Federal Bureau of Investigation.
Assistant United States Attorney Jeffrey Brown is prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the HomePage for the U.S. Attorney’s Office for the Northern District of Georgia is www.justice.gov/usao/gan.Allentown Mortgage Co.'s Former Manager Sentenced for FraudRead the Press Release
PHILADELPHIA – Joel Tillett, 36, of Whitehall, PA, was sentenced today to four years in prison and ordered to pay restitution of $979,562.20 in connection with a mortgage fraud conspiracy. Tillett, the former general manager of Madison Funding, Inc., a now-defunct Allentown mortgage loan origination company, pleaded guilty on May 14, 2013 to conspiracy and to uttering and publishing false documents to obtain a loan insured by the Department of Housing and Urban Development (HUD). The fraud conspiracy caused mortgage lending businesses to issue millions of dollars’ worth of loans that were based on false information.
Between October 2006 and at least June 2008, Tillett conspired to defraud mortgage lenders by submitting loan applications that contained false information about the borrowers which was often supported by falsified, forged, and altered documents. The mortgage lenders, which included Washington Mutual Inc., Countrywide Home Loans, Mortgage IT, International Mortgage Corporation, and Security Atlantic Mortgage Company, relied on the fraudulent representations and provided Madison Funding’s clients with millions of dollars in loans to purchase real estate. Each funded loan generated thousands of dollars’ worth of commissions to Madison Funding and its employees. Many of those loans have since defaulted and some of them were insured by the Federal Housing Administration (“FHA”), which was an agency within HUD. Fannie Mae incurred losses of $1.2 million after purchasing approximately 65 mortgages that were originated at Madison Funding during the time frame of the scheme.
In addition to the prison term, U.S. District Court Judge Harvey R. Bartle ordered three years of supervised release. Tillett must also pay a $200 special assessment.
The case was investigated by the Department of Housing and Urban Development Office of the Inspector General, the Federal Deposit Insurance Corporation Office of Inspector General, and the Federal Housing Finance Agency Office of Inspector General. It is being prosecuted by Assistant United States Attorney Mark B. Dubnoff.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Alabama State Employee Sentenced to Prison for Stolen Identity Refund FraudRead the Press Release
Chequlia Motley of Montgomery, Ala., was sentenced yesterday to serve 36 months in prison for conspiracy and aggravated identity theft, announced Assistant Attorney General Kathryn Keneally of the Justice Department’s Tax Division and U.S. Attorney for the Middle District of Alabama George L. Beck Jr. Motley pleaded guilty to those charges in May 2013.
According to Motley’s plea agreement, she was a former state employee who stole identities from state databases and sold them to co-conspirators. As evidence presented at the sentencing hearing showed, Motley had previously worked for the Alabama State Employees’ Insurance Board and stole the personal information of over 100 state workers and their family members from the databases maintained by the board. She provided this information to Veronica Temple, Yolanda Moses and Barbara Murry, who used the stolen identities to file false tax returns that fraudulently requested tax refunds from the IRS. Temple, Moses and Murry were previously convicted and each sentenced in February to 57 months in prison.
In addition to the prison sentence, Motley was ordered to pay $179,946 in restitution to the Internal Revenue Service (IRS).
The case was investigated by agents of the IRS - Criminal Investigation. Trial Attorneys Michael Boteler and Jason Poole of the Justice Department’s Tax Division prosecuted the case, with the assistance of the U.S. Attorney’s Office for the Middle District of Alabama and, in particular, Assistant U.S. Attorney Todd Brown.
Additional information about the Tax Division and its enforcement efforts may be found at www.justice.gov/tax.
Alabama Defendant Who Received Fraudulent Federal Refunds into His Bank Account Receives Two Years in Federal PrisonRead the Press Release
Montgomery, Alabama - Anton Miles was sentenced today to two years in federal prison for his involvement in a stolen identity refund fraud scheme, United States Attorney George L. Beck, Jr., and the Internal Revenue Service (IRS) announced. On May 9, 2013, Miles pleaded guilty to one count of theft of government funds.
According to court documents, in January 2012, Miles opened a bank account under his name d/b/a A and M Mobile Car Wash. Between January 2012 and March 2013, approximately 120 false federal income tax refunds that claimed approximately $164,526 were directed to Defendant’s bank account. The Defendant withdrew the fraudulent proceeds deposited into his bank account. The tax refunds were generated through the filing of false tax returns that used stolen identities.
The case was investigated by Special Agents of the IRS - Criminal Investigation. Trial attorneys Michael Boteler and Charles Edgar, Jr. of the United States Department of Justice, Tax Division, and Assistant United States Attorney Todd Brown, prosecuted the case.
Additional information about the Justice Department's Tax Division and its enforcement efforts may be found at justice.gov/tax.
PRESS CONTACT: Clark Morris
Email: [email protected]
Telephone: (334) 551-1755
Fax: (334) 223-7617Accused Bank Robber Charged with EscapeRead the Press Release
Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, announced today that a federal grand jury in Cleveland, Ohio, returned an indictment charging Perry T. Johnson, age 22, of Cleveland Ohio, in connection with his escape from the Bedford Heights Jail on August 12, 2013.
The indictment charges that Mr. Johnson escaped from the Bedford Heights Jail, where he was ordered detained by U.S. Magistrate Judge Kenneth S. McHargh, pending the resolution of a separate criminal case. In that case, Johnson pled guilty to robbing two CVS pharmacies in November 2012, brandishing a firearm in connection with one of the robberies, and possessing with the intent to distribute oxycodone that he stole from one of the CVS pharmacies. He is scheduled to be sentenced on August 20, 2013, in connection with that case.
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 indictment 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. Attorneys Matthew B. Kall and Margaret A. Sweeney, following investigation by the U.S. Marshal Service and the Bedford Heights Police Department.
Acadia Parish Rice Mill Owner Pleads Guilty and Is Sentenced for Failure to Report Discharge of Waste Oil into BayouRead the Press Release
LAFAYETTE, La. – United States Attorney Stephanie A. Finley announced today that Southwest Rice Mill Inc. president and owner Frederick Marque De La Houssaye, 60, of Crowley, La., pleaded guilty to one count of negligent discharge of hazardous materials. De La Houssaye was then sentenced to serve 24 months of probation and 160 hours of community service. He was also ordered to pay a $2,500 fine. Southwest Rice Mill was ordered to pay restitution of $1, 012,401. United States Magistrate Judge Patrick J. Hanna handed down the sentence.
According to evidence presented at the guilty plea, from May 27, 2011 to May 31, 2011, De La Houssaye and Southwest Rice Mill Inc. in Crowley, La., negligently discharged waste oil into navigable waters. Mill laborers were performing routine maintenance on May 27, 2011 on a railroad spur, which in part the mill leased from Acadiana Railroad, in an effort to maintain drainage ditches for the mill and Acadiana Railroad. While performing the spur maintenance near the mill with an excavator, a laborer negligently struck the valve of an above-ground storage tank containing waste oil, which is a hazardous substance. After the valve was struck, oil began to shoot 10 to 15 feet from the tank. The tank was near a drainage ditch, and the oil spilled and accumulated in the ditch. The laborer who struck the valve called his supervisor, De La Houssaye. About an hour later, De La Houssaye arrived at the scene. An unknown amount of oil had spilled from the tank and flowed into Bayou Blanc. De La Houssaye ignored his duty to report the spill, and he and the laborers later left the site.Robert Burke, the Crowley District Fire Chief, received a call May 28, 2011 from a resident reporting an oil spill on Bayou Blanc. Burke traced the oil spill back to the drainage ditch at the mill. De La Houssaye told investigators he planned to deal with it after the Memorial Day holiday, which was May, 31, 2011.
Environmental authorities were called to the scene to investigate and began cleanup efforts. The U.S. Coast Guard, U.S. Environmental Protection Agency, Louisiana Department of Environmental Quality, and others conducted an operation that cost federal, state, and local authorities $1, 012,401.
“My office will prosecute to the fullest extent of the law those who pollute our air, land and water,” Finley stated. “Companies and their employees will be held accountable for the damage they do to the environment. Hopefully this case serves as a deterrent to those who would ignore the environmental laws of this nation and state.”
“This country’s environmental laws are aimed at keeping inland waterways from becoming dumping grounds for waste materials,” said Ivan Vikin, Special Agent in Charge of EPA’s criminal enforcement program in Louisiana. “After the rupture of an oil storage tank on his property, the defendant failed to notify authorities who could have minimized the damage caused by thousands of gallons of untreated waste oil flowing directly into Bayou Blanc. Today’s guilty plea demonstrates that companies and their senior managers will be held responsible for environmental crimes.”
“This is an example of the consequences people face when they choose to violate the environmental regulations,” Louisiana Department of Environmental Quality Secretary Peggy Hatch said. “We have seen great strides in the environment throughout the state because the majority of the people care about the environment and want to do the right thing. Hopefully, today’s events will serve as an incentive for everyone to abide by the environmental regulations.”
The U.S. Environmental Protection Agency, U.S. Coast Guard, Louisiana Department of Environmental Quality and Crowley District Fire Department conducted the investigation and cleanup. Assistant U.S. Attorney Myers P. Namie prosecuted the case."Duffel Bag Bandit" Indicted in Idaho for Bank RobberyRead the Press Release
BOISE – U.S. Attorney Wendy J. Olson announced the indictment today of a Boise man currently living in Shreveport, Louisiana, for the March 2013 robbery of a Boise bank.
A one-count indictment filed today in United States District Court for the District of Idaho charges Gerald Edward Massey, 55, with robbing the US Bank located at 10556 Fairview Avenue of $64,500 on March 6, 2013. Massey was arrested by the FBI in Shreveport on Monday; he appeared yesterday in federal court there. An initial appearance in Idaho federal court has not been set.
Massey faces up to 20 years in prison, a maximum fine of $250,000, and up to three years of supervised release.
The case is being investigated by the Federal Bureau of Investigation.
An indictment is a means of charging a person with criminal activity. It is not evidence. The person is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
$250,000 Fine Imposed for Fraudulent Sale of Postal UniformsRead the Press Release
Los Angeles resident Carl Wayne Adrian, Sr., and his company, California Uniforms, Inc. were fined $250,000 and ordered to forfeit $135,000 worth of seized Postal uniform items. Adrian Sr. was also sentenced to 12 months of home detention by U.S. District Judge William Q. Hayes.
As revealed during their guilty plea, the defendants participated in a scheme to defraud the Postal Service by providing unlicensed vendors with access to the Postal Service uniform sales reimbursement system in return for a 10% kickback.
Postal Service contracts with vendors wishing to sell licensed Postal uniform items require the vendor to accept payment only at the point of sale from Postal employees with proper identification. Payment for Postal uniforms can only be accepted in the form of uniform allowance cards, which are funded by the Postal Service. Vendors under contract with the Postal Service are given an authorization code which allows them to receive payments.
The vendor licensing agreements allow the Postal Service to insure that its uniforms are sold only by responsible vendors. This control over the sales of Postal uniforms has an important public safety aspect, in that most Americans will willingly open the door to their home to anyone wearing a Postal letter carrier uniform. For this reason, it is a misdemeanor for anyone who is not a letter carrier to wear such a uniform (18 USC 1730).
In December of 2009, Carl Adrian, Sr. received a proposal from Ace Uniforms in San Diego (which had recently lost its license to sell Postal uniforms) that he and his company, California Uniforms (which at that time possessed a valid license to sell Postal uniforms) process the uniform allowance card purchases made at Ace Uniforms, Inc. stores in San Diego and Phoenix, falsely representing the purchases to be the sales of California Uniforms, in return for a kickback of 10% of the amount paid by the Postal Service. Adrian admitted that he agreed to this proposal and during the period from December 9, 2009, through August 31, 2010, he and his firm improperly processed payments totaling approximately $105,000 for Postal uniform items sold at Ace Uniforms.
On August 31, 2010, the Postal Service canceled the contract with California Uniforms, Inc. that allowed the firm to sell Postal uniforms. Thereafter, the company contacted Monica Lauer of Merchandise Center, Inc. (who possessed a valid license to sell Postal uniforms), and proposed that Merchandise Center process the uniform allowance card purchases made at California Uniforms, Inc. stores in San Diego and Los Angeles, falsely representing the purchases to be the sales of Merchandise Center, in return for a kickback of 10% of the amount paid by the Postal Service. During the period from August 31, 2010, through October 13, 2011, Merchandise Center improperly processed payments totaling $410,000 for Postal uniform sold at California Uniforms.
This is one of a series of cases involving this scheme to defraud. On February 2, 2012, defendant Ace Uniforms, Inc. and its owner, Marc Stein, pled guilty to Conspiracy to Provide Kickbacks for their part in the scheme. Both Ace Uniforms and California Uniforms agreed to forfeit to the government all Postal uniforms found at their locations during the execution of search warrants at their business locations. Ace 3 Uniforms and Stein are scheduled to be sentenced before Judge Hayes on September 23, 2013, at 9:00 a.m.
On August 21, 2012, Monica Lauer and Merchandise Center, Inc. also pled guilty to Conspiracy to Accept Kickbacks for their role in the scheme. Lauer and Merchandise Center are also scheduled to be sentenced before Judge Hayes on September 23, 2013, at 9:00 a.m.
On August 22, 2013, Carl Wayne Adrian, Jr., the manager of the San Diego store for California Uniforms, pled guilty to Criminal Infringement of a Copyright. Postal uniforms bear the Sonic Eagle logo, which is copyrighted and trademarked by the Postal Service. Adrian Jr. admitted that he directed his employees to continue selling the Postal uniform items in inventory, including those bearing the Sonic Eagle logo, after California Uniform's license to distribute Postal uniforms had been revoked, thereby infringing upon the Sonic Eagle copyright held by the Postal Service. On October 9, 2012, Adrian Jr. was sentenced to one year probation and a fine of $500.
Pacific Area Field Office Special Agent in Charge Scott Pierce said: “The Postal Service manages over 30,000 contract actions each fiscal year. About $11 billion were spent on postal contracts in FY 2012. Due to the sheer volume of contracts and the huge dollar amounts involved, the Postal Service can be susceptible to losses in the hundreds of millions to fraud every year. Special Agents of the United States Postal Service Office of Inspector General actively investigate allegations of fraud, waste, and misconduct by contractors and postal employees who handle contracts. This case is an excellent example of the successful partnership between the Office of Inspector General and the U.S. Attorney’s office to aggressively pursue and prosecute cases where contract improprieties are uncovered.”
Criminal Case No. 12cr3650-WQH DEFENDANTS California Uniforms, Inc.
Los Angeles, California
Carl Wayne Adrian, Sr.
Los Angeles, CaliforniaDate of Incorporation: 8-15-67
SUMMARY OF CHARGESCount 1 - Adrian Sr.
Wire Fraud, in Violation of Title 18, United States Code, Section 1343
Maximum Penalties: 20 years in custody and/or $250,000 fine, $100 special assessment.Count 6 - California Uniforms, Inc.
Wire Fraud, in Violation of Title 18, United States Code, Section 1343
Criminal Case No. 12cr3136-WQH DEFENDANTS
Maximum Penalties: 5 years probation, $500,000 fine, $400 special assessment.Merchandise Center, Inc.
North Hollywood, CaliforniaMonica Lauer
Los Angeles, CaliforniaDate of Incorporation: 12-17-86
SUMMARY OF CHARGESConspiracy to Accept Kickbacks, in Violation of Title 18, United States Code, Section 371, and Title 41, United States Code, Sections 8702 and 8707
Maximum Penalties: 5 years in custody and/or $250,000 fine, $100 special assessment for the individual, and 5 years probation, a $500,000 fine and a $400 special assessment for the corporation.
Criminal Case No. 12cr0235-WQH DEFENDANTSAce Uniforms, Inc.
San Diego, CaliforniaMarc Stein
San Diego, CaliforniaDate of Incorporation: 1-12-95
SUMMARY OF CHARGESConspiracy to Provide Kickbacks, in Violation of Title 18, United States Code, Section 371, and Title 41, United States Code, Sections 52 and 53
Maximum Penalties: 5 years in custody and/or $250,000 fine, $100 special assessment for the individual, and 5 years probation, a $500,000 fine and an $400 special assessment for the corporation
Criminal Case No. 12cr3452-JMA DEFENDANTSCarl Adrian, Jr.
SUMMARY OF CHARGES
San Diego, CaliforniaCriminal Infringement of a Copyright, in Violation of Title 18, United States Code, Sections 2319 and 2 Maximum Penalties: 1 year in custody and/or $100,000 fine, $25 special assessment
AGENCYUnited States Postal Service, Office of Inspector General
Tuesday 13 August 2013
Wildlife Researcher Sentenced for Golden Eagle TheftRead the Press Release
United States Attorney Laura E. Duffy announced that Julian resident John David Bittner was sentenced today following his plea of guilty to the unlawful taking of a Golden Eagle, in violation of the Bald and Golden Eagle Protection Act.
At the sentencing hearing today, Magistrate Judge David H. Bartick observed that although Bittner had devoted his life to wildlife, he had apparently placed his own financial interests ahead of the need to comply with federal permitting requirements. Bittner was paid by power companies, developers and others to track the birds for environmental impact studies.
Judge Bartick cited the fact that Bittner captured and banded birds without federal and state permits, placed unpermitted devices on birds, conducted aerial surveys after authorization was denied, used wild birds in educational programs without a permit, failed to immediately send eagle carcasses to the National Eagle Repository (where there is a lengthy waiting list for Native Americans to obtain plumage for religious ceremonies) and failed to provide to the government the data he had obtained about this wildlife. After considering the scientific concerns associated with placing multiple tracking devices on a single bird, and the failure to send eagle carcasses to the National Eagle Repository, Judge Bartick concluded that "it cannot be said that there was no harm in this case."
Judge Bartick sentenced Bittner to three years’ probation, a $7,500 fine, and ordered Bittner to provide the government with the raw data compiled from tracking birds from 2007-2012. Bittner had previously withheld this data, but now it can be used by government biologists to evaluate the effect of proposed projects on the bird population.
According to court documents and admissions in his guilty plea, Bittner is the founder of a non-profit organization and makes his living by “banding” birds and gathering data on the movement of those birds. Bittner performs these services to assist companies with environmental impact statements needed for the construction and maintenance of power lines and wind power generators. In order to “band” a bird, the creature must be trapped, captured or taken out of its nest. Such activity is considered a "take" of the bird and requires a permit under both the Migratory Bird Act and the Bald and Golden Eagle Protection Act. These permits are issued by the federal Bird Banding Lab (“BBL”) in Laurel, Maryland, under the auspices of the U.S. Geological Survey. There are 2000 federal Master Bander permits issued throughout the entire United States, and only 181 Master Banders are authorized to band Golden Eagles.
Bittner first obtained a federal bird banding permit while living in Ohio on July 15, 1964. On August 13, 1980, the BBL sent a letter to Bittner, advising him that his permit was revoked due to "various discrepancies in your bird banding operation." This action was taken after the State of Ohio had revoked Bittner's 1979 state banding permit, and requested that the federal government remove Ohio from the list of states in which Bittner was permitted to band birds. The BBL subsequently agreed to keep Bittner’s permit status as inactive, rather than revoked.
Bittner had no active federal permit to band birds from 1980 until April 30, 1997, when Bittner obtained authorization to band all non-endangered species of migratory birds, and later, to band California Condors and Golden Eagles. Like all such permits, his permit limited the permitted activities to specific states and stated that the federal permit was not valid "unless accompanied by any required State permits or licenses."
In California, a state permit is required to band Golden Eagles, as well as other migratory birds. Since 2000, Bittner has not possessed a valid permit from the State of California, due in large part to his failure to provide the required data in reference to past activities. The lack of a permit from the State of California invalidated the federal permit held by Bittner with respect to collecting and banding of 936 birds in California during the period from 2000-2011.
Bittner's federal banding permit expired on January 31, 2010. On February 13, 2010, Bittner emailed the BBL, stating: "My permit expired on January 31, 2010 but was just renewed on July 14, 2009 only five months before. Permits are supposed to be valid for two years. What's up?" A BBL biologist responded, noting that Bittner’s permit was not automatically renewed in July 2009, and reminding Bittner that he owed BBL data on 300-400 bands he had already conducted. Eventually, on August 12, 2010, the federal permit was renewed.
Despite not having a valid federal or California bird banding permit, during the period from January 31, 2010 through August 12, 2010, Bittner illegally trapped and marked 164 birds (including 37 eagles); 144 of those birds were trapped in San Diego or Imperial County. Of the 144 birds trapped in San Diego and Imperial Counties, 29 were Golden Eagles, and the banding cards filled out at the time the birds were marked indicated that Bittner – the only person in the organization who previously held a permit – was personally present on at least 18 of those occasions. As Judge Bartick noted in sentencing Bittner, during the time when no permits were in effect, the defendant's non-profit organization was paid over $500,000 by various clients for its services.
According to Paul Schmidt, the Fish and Wildlife Service's Assistant Director for Migratory Birds in 2009, "The Bald Eagle population has rebounded in the past decades, and its recovery poses the challenge of managing a healthy population still protected under the Bald and Golden Eagle Protection Act. But unlike the Bald Eagle, the Golden Eagle population is not expanding, and may be in decline." The Bald and Golden Eagle Protection Act continues to protect these birds by prohibiting anyone without a permit from "taking" Bald or Golden eagles, including their parts, nests and eggs. “Taking” such birds includes pursuing, shooting, shooting at, poisoning, wounding, killing, capturing, trapping, collecting, molesting or disturbing.
United States Attorney Laura E. Duffy observed, "It is a sacred trust to preserve our natural heritage for future generations. This trust mandates that we observe both the spirit and letter of our law designed to protect the environment."
DEFENDANT Criminal Case No. 13cr1391-W John David Bittner SUMMARY OF CHARGESUnlawful Taking of a Golden Eagle, in Violation of Title 16, United States Code, Section 668(a).
AGENCY
Maximum Penalties: 1 year in custody and/or $100,000 fine, $25 special assessment.U.S. Fish and Wildlife Service
Utica Area Man Sentenced in Insurance Fraud CaseRead the Press Release
United States Attorney Richard S. Hartunian announced today that a Utica man has been sentenced for his role in an insurance fraud scheme.
DAVID MORGAN, age 55, Utica, NY, was sentenced by United States District Court Judge Norman A. Mordue in Syracuse. MORGAN was sentenced to 21 months imprisonment and ordered to pay restitution in an amount exceeding $1.4 million. MORGAN will also serve three years of supervision following his release from incarceration.
DAVID MORGAN pled guilty on July 31, 2012 to mail fraud. MORGAN admitted that in or about 2005 he agreed to assist other conspirators in an insurance fraud scheme. The scheme involved a staged motor vehicle accident on Harbor Lock Road in Utica on March 20, 2006. On that date, Joseph Dellerba and Cynthia Morgan, David’s wife, claimed to have been injured while passengers in a Ford van which was struck by a Ryder truck driven by Michael Matrulli. In fact, the collision was staged, and Dellerba and Morgan were not passengers at the time of the impact. Dellerba and Morgan claimed to have been injured as a result of the accident and submitted false insurance claims, including claims for personal injuries, no fault benefits and disability benefits. Dellerba and Morgan sought medical treatment for non-existent injuries or injuries that they claimed were the result of the collision. David Morgan and his wife subsequently initiated a civil lawsuit seeking a monetary recovery as a result of injuries suffered by Cynthia in the fictitious accident. That suit was settled with a payment of $30,000 to the Morgans.
The case was investigated by the Federal Bureau of Investigation, the Internal Revenue Service, Criminal Investigation Division and the New York State Department of Financial Services, Criminal Investigations Unit. The case was prosecuted by Assistant United States Attorney Edward R. Broton.
Two Indicted on Federal Child Enticement ChargesRead the Press Release
Little Rock - Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas, announced that the Indictments of Kenneth Wayne Thompson, age 21, of Bradford, and Benjamin Cade Vardell, age 19, of Jonesboro were unsealed yesterday after they turned themselves in to the United States Marshal and made their initial appearance before United States Magistrate Judge H. David Young. Thompson and Vardell were each indicted by a federal grand jury August 7, 2013, on one count of enticement of a minor to engage in criminal sexual conduct. Each indictment also includes a forfeiture allegation for their cell phones used in the crime.
On December 21, 2012, Jonesboro Police Department detectives responded to a runaway juvenile call. During the course of that investigation, the detectives were given the juvenile's phone by consent of the mother. Several of the individuals who had contacted the juvenile were interviewed based on the messages they sent to the juvenile. They were subsequently arrested by local police departments resulting in these charges.
If convicted, they face a statutory sentence of not less than 10 to not more than life incarceration and/or $250,000 fine with not less than 5 years up to a lifetime of supervised release. Thompson and Vardell's trials are set for September 16, 2013.
This case was investigated by the Jonesboro Police Department and the United States Secret Service Department. The case is being prosecuted by Assistant United States Attorney Marsha Clevenger.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit
Two Guilford Women Sentenced to Federal Prison for Overseeing Gifting Tables Pyramid SchemeRead the Press Release
Deirdre M. Daly, Acting United States Attorney for the District of Connecticut, and Phil Hall, Acting Special Agent in Charge of IRS Criminal Investigation in New England, announced that two Guilford women who oversaw a pyramid scheme known as “Gifting Tables” were sentenced today in Hartford federal court. Chief United States District Judge Alvin W. Thompson sentenced DONNA BELLO to 72 months of imprisonment and three years of supervised release, and JILL PLATT to 54 months of imprisonment and three years of supervised release. BELLO also was ordered to pay a $15,000 fine.
“These significant sentences are appropriate for two individuals who profited from an illegal pyramid scheme and conspired to conceal their income from the IRS,” stated Acting U.S. Attorney Daly. “The investigation into this and other Gifting Tables schemes in Connecticut is ongoing. Hopefully, this successful prosecution and the prison terms imposed today will serve as a strong deterrent and end this criminal activity.”
According to the evidence presented during the trial, a Gifting Table is configured as a four-level pyramid, with eight participants assigned to the bottom row, four participants assigned to the third row, two participants assigned to the second row, and one participant assigned to the top row. The top row participant is referred to as the “Dessert,” the two participants on the second row as “Entrees,” the four participants on the third row as “Soup and Salads,” and the eight participants on the bottom row as “Appetizers.” To join a Gifting Table, new participants were required to pay $5,000, typically cash, to the Dessert, that is, the participant occupying the top position on the pyramid. The $5,000 payment, which was fraudulently characterized as a gift, secured the new participant a position as an Appetizer on the bottom row. Participants progressed from the bottom row of the pyramid by recruiting additional people to join the Gifting Table. When eight new participants joined a Gifting Table, each having made a $5,000 “gift” to the person occupying the Dessert position at the top of the pyramid, the Dessert left the Gifting Table and kept the $40,000 paid by the eight new participants. That particular Gifting Table was then split, with the two participants occupying the Entree position on the second row moving to the top position (Dessert) of two new pyramids. The other incumbent members of the Gifting Table moved up a row on one of the two newly-formed pyramids, and the search for 16 new participants began. The success of the Gifting Tables depended on new participants joining and making the $5,000 “gift.”
From approximately 2008 to 2011, BELLO, 57, and PLATT, 65, oversaw and profited from this Gifting Tables pyramid scheme. The defendants recruited individuals to join the scheme, prepared and distributed materials to recruits that contained false representations, and affirmatively misrepresented to recruits and participants that Gifting Tables was not a pyramid scheme. Also, in May 2010, the defendants attempted to intimidate a participant who had questioned the legality of the Gifting Table scheme.
BELLO and PLATT also conspired to defraud the Internal Revenue Service by telling recruits and participants that monies given and received during the scheme were tax-free “gifts” under the IRS Code and that lawyers and accountants had approved Gifting Tables as legal ventures that generated tax-free proceeds. In addition, BELLO and PLATT filed false tax returns that failed to report income generated from the scheme.
Evidence at trial included several emails, including an email sent by PLATT in March 2009 that told a participant: “It’s sort of a joke that I refer to our freezer as the ATM.” Later in March 2009, BELLO complained to a co-conspirator and another individual about two recalcitrant recruits, stating: “They have had enough parties. Its [sic] costing us a small fortune in their food and wine delights. No more parties until they commit with the cash.”
In June 2009, BELLO sent an email that said “I am not a . . . saint . . . . I’m teaching you all how to make an extra 80 grand a year . . . . Isn’t that enough?”
Later in October 2009, BELLO emailed a participant: “as women we like our own stash. Keep it in a safe. Keep it quiet because rather not have red flags raised. Hiring accountants and atterneys [sic] is costly.”
On February 20, 2013, after a four-week trial, BELLO and PLATT were convicted of conspiracy to commit wire fraud and conspiracy to defraud the IRS, multiple counts of wire fraud, and filing false tax returns.
BELLO and PLATT were ordered to pay restitution in the amount of $32,000 to several victims of the scheme.
This matter is being investigated by the Internal Revenue Service – Criminal Investigation, and is being prosecuted by Assistant United States Attorneys Douglas P. Morabito and Peter S. Jongbloed.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
[email protected]Tax Preparer Pleads Guilty in Manhattan Federal Court to Tax Fraud Scheme Involving over $7 Million in Bogus DeductionsRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that MARK GOLDBERG, a Bronx-based tax preparer, pled guilty today in Manhattan federal court to charges related to his participation in a scheme to file fraudulent tax returns on behalf of numerous clients, falsely claiming more than $7 million in bogus deductions, including school tuition credits and expenses. GOLDBERG pled guilty before Chief U.S. District Judge Loretta A. Preska.
Manhattan U.S. Attorney Preet Bharara said: “Mark Goldberg’s fraudulent tax return preparation business spanned neighborhoods and family lines, as he manufactured bogus deductions – including false school tuition credits and expenses – for hundreds of clients throughout the Bronx, including for his relatives and himself. Tax fraud, particularly when it exploits credit and refund programs that are supposed to provide important benefits to those truly entitled to them, threatens the integrity of our tax system and victimizes all law-abiding taxpayers. We will continue to be aggressive in rooting out such fraud.”
According to the Indictment, statements made during the plea proceedings, and other documents filed in Manhattan federal court:
GOLDBERG ran a tax preparation and multi-service business named E&M Multi-Services, Inc. (“E&M”) out of a storefront building in the Bronx. Through that business, he prepared, and oversaw the preparation of, hundreds of federal and New York State tax returns that claimed false deductions, expenses, and credits, including tuition credits and expenses, unreimbursed employee business expenses, medical and dental expenses, charitable gifts, and earned income tax credits.
Between 2005 and 2012, GOLDBERG caused the preparation and filing of tax returns for his clients that included over $7,000,000 of fabricated and fraudulently-inflated deductions, resulting in the payment of refunds to which his clients were not lawfully entitled.
GOLDBERG, 40, of Bronx, New York, pled guilty to one count of subscribing to a false and fraudulent tax return for himself, one count of aiding and assisting in the preparation of a false tax return for a relative, and one count of wire fraud. He faces a maximum sentence of 26 years in prison, and is scheduled to be sentenced by Chief Judge Preska on December 17, 2013 at 10 a.m. In addition, GOLDBERG agreed as part of his guilty plea not to contest the forfeiture by the Internal Revenue Service of over $500,000 in an account maintained by GOLDBERG in the name of E&M, representing the fees generated by GOLBERG as part of his tax fraud scheme.
Mr. Bharara praised the investigative efforts of the Internal Revenue Service, Criminal Investigation and the New York State Department of Taxation and Finance. Mr. Bharara also thanked the U.S. Department of Justice’s Tax Division and the Bronx District Attorney’s Office for their assistance.
The case is being prosecuted by the Office’s Complex Frauds Unit. Assistant United States Attorneys Stanley J. Okula, Jr. and Paul Monteleone, and Special Assistant United States Attorneys Jorge Almonte (of the Tax Division) and Graham Van Epps (of the Bronx D.A.’s Office) are in charge of the prosecution.
Goldberg, Mark Indictment
Tampa Man Sentenced to 5 Years in Prison on Tax Fraud ChargesRead the Press Release
Tampa, Florida - U.S. District Judge James E. Whittemore sentenced James Earl Smiley (41, Tampa) yesterday to 5 years and one month in federal prison for committing stolen identity refund fraud. As part of his sentence, the court also entered a forfeiture money judgment in the amount of $98,719.65, representing the proceeds of the offense.
Smiley pleaded guilty on March 6, 2013, to one count of theft of government property and one count of aggravated identity theft.
According to the plea agreement and court documents, in October 2012, Smiley was stopped by the Tampa Police Department. He had several Turbo Tax Visa debit cards and receipts in his possession. The debit cards were not in Smiley's name, or in the name of his passenger. Further investigation revealed that the debit cards were funded with fraudulent tax return proceeds. On numerous occasions, Smiley was captured on video surveillance using the fraudulent debit cards. He admitted that the cards contained proceeds from fraudulently filed tax returns. None of the victims, including deceased individuals and others whose names appeared on the debit cards, had given Smiley or his passenger the authority to use their identities.
This case was investigated by the Internal Revenue Service Criminal Investigation, the United States Secret Service, the Tampa Police Department, the Hillsborough County Sheriff's Office, and the Collier County Sheriff's Office. It was prosecuted by Assistant United States Attorney Kelley C. Howard-Allen.
Southington Man Pleads Guilty to Mortgage Fraud and Money Laundering OffensesRead the Press Release
Deirdre M. Daly, Acting United States Attorney for the District of Connecticut, announced that HENRY J. PAPALE, 62, of Southington, pleaded guilty today before Senior United States District Judge Ellen Bree Burns in New Haven to federal wire fraud and money laundering offenses stemming from a mortgage fraud scheme.
According to court documents and statements made in court, in 2007, PAPALE used credit information of others to purchase four homes in Florida and obtain mortgage loans. He submitted fraudulent invoices, work authorizations and wire transfer instructions to a settlement agent in Florida, each of which purported to be from a construction company for restoration on the properties. In fact, the construction company was fictitious and no work was performed on the properties. Following the closing on each property, the settlement agent wire transferred loan proceeds, in amounts that corresponded to the price for restoration work, to a bank account in Southington that it believed belonged to the fictitious construction company, but was actually held by certain of PAPALE’s family members. A total of $360,307.23 was transferred to PAPALE’s family members in this manner.
Based on PAPALE’s representations, a member of PAPALE’s family then turned the majority of the fraudulently obtained loan proceeds over to PAPALE, who deposited them into his own bank account. PAPALE transferred $255,500 in fraudulently obtained loan funds from his bank account to an investment trading account.
PAPALE pleaded guilty to one count of wire fraud, which carries a maximum term of imprisonment of 20 years, and one count of money laundering, which carries a maximum term of imprisonment of 10 years. Judge Burns has scheduled sentencing for November 5, 2013.
The case was investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorneys Jonathan N. Francis and Michael S. McGarry.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
[email protected]South Carolina Man Sentenced for Traveling to Have Sex with Eight Year OldRead the Press Release
GAINESVILLE, Ga. – David Alan Wolf has been sentenced to 14 years for enticing a minor to engage in sexual activity.
“After this defendant used the internet to arrange for a sexual encounter with a vulnerable, eight-year-old girl, he then traveled to Atlanta in an effort to commit this repugnant act” said United States Attorney Sally Quillian Yates. “Thankfully, there was no eight-year-old, and law enforcement arrested him. Sexual predators have no place in our community and we will see to it that they are caught, prosecuted, and punished.”
“The Barrow County Sheriff’s Office will continue to be vigilant in our attempt to apprehend those who prey on our children,” said Barrow County Sheriff Jud Smith. “Our Investigators are working very hard every day to keep these predators off the streets and protect our communities.”
According to United States Attorney Yates, the criminal information, and material presented in court: In August 2012, a Barrow County investigator, operating undercover and posing as a thirty-four-year-old female with an eight-year-old daughter, was contacted online by an individual later identified as David Alan Wolf. Wolf indicated that he was interested in engaging in sex acts with the investigator’s eight-year-old daughter, including oral sex and intercourse. Wolf and the undercover investigator communicated online for close to two weeks. During that time, Wolf described in detail his sexual fantasies and the sex acts he would perform on the eight-year-old girl. On August 28, 2012, Wolf traveled from South Carolina to Georgia to meet the investigator and her fictitious daughter and was arrested upon his arrival.
Wolf, 63, of Rock Hill, S.C., was sentenced today by United States District Judge William C. O’Kelley to 14 years in prison to be followed by lifetime supervised release. He was also ordered to pay a fine of $5,000. The defendant will be required to register as a sex offender when he is released from prison.
This case was investigated by the Barrow County Sheriff’s Office.Assistant United States Attorney Jill E. Steinberg is prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the HomePage for the U.S. Attorney’s Office for the Northern District of Georgia is www.justice.gov/usao/gan.
Sex Trafficking Sting Nets Nine ArrestsRead the Press Release
United States Attorney Brendan V. Johnson announced that nine men have been arrested and federally indicted as a result of a sex trafficking undercover operation conducted during the 2013 Sturgis Motorcycle Rally, which ended August 11. All nine men were indicted for Commercial Sex Trafficking.
The arrests were a result of investigations by the South Dakota Internet Crimes Against Children Task Force. All of the defendants allegedly negotiated with law enforcement agents posing as pimps, and agreed to pay for sex with underage girls, ranging from 12-15 years of age.
Five of the defendants are from South Dakota, and four are from out-of-state.- Jerry Lane Golliher, age 31, of Rapid City, South Dakota.
- Eric D. Murphy, age 27, of Rapid City, South Dakota.
- John Miller, age 24, of Rapid City, South Dakota.
- Michael Francis Fox Jr., age 43, of Owings Mills, Maryland.
- Scott B. Falk, age 29, of Kenai, Alaska.
- Timothy Charles Gravens, age 54, of Grapevine, Texas.
- Miguel Angel Aguilar, age 19, of Brighton, Colorado.
- James Eugene Larive Jr., age 42, of Belle Fourche, South Dakota.
- Curtis Ray Austin, age 20, of Rapid City, South Dakota.
Falk, Fox, Gravens, and Aguilar are in the custody of the U.S. Marshals Service and are scheduled to make an initial appearance before a United States Magistrate Judge in Rapid City on August 14, 2013. The remaining defendants will be taken into federal custody and will be making an initial appearance at a future date.
The crime of Commercial Sex Trafficking carries a mandatory minimum sentence of 10-15 years in prison up to a life maximum, and/or a $250,000 fine. The mandatory minimum prison sentence is determined by the age of the victim.
The charges are merely accusations and the defendants are presumed innocent until and unless proven guilty.
The undercover operation and arrests were a joint effort between the South Dakota Division of Criminal Investigation, the Federal Bureau of Investigation, the Rapid City Police Department, and the Pennington County Sheriff’s office. Assistant U.S. Attorney Sarah Collins is prosecuting the cases.Seven Oncologists Charged with Importing Unapproved DrugsRead the Press Release
Seven Ohio oncologists were charged with importing cancer medications that had not been approved by the Food and Drug Administration, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
The doctors were charged with causing the shipment of misbranded drugs, a misdemeanor violation of the Food, Drug and Cosmetic Act. Their names, ages and the city where they practiced medicine are:
Ranjan Bhandari, 56, Liverpool.
Timmappa Bidari, 68, Parma.
David Fishman, 62, Euclid.
Su-Chiao Kuo, 60, Brunswick.
Marwan Massouh, 54, Westlake.
Poornanand Palaparty, 62, Cleveland.
Hassan Tahsildar, 55, Euclid.
“These doctors used drugs that had not been approved by the FDA,” Dettelbach said. “Our office is committed to working with our partners to make sure patients are getting medicine that has been properly inspected.”
“FDA’s regulatory standards are designed to ensure the safety and quality of the medical devices and drugs distributed to American consumers,” said Antoinette V. Henry, Special Agent in Charge, FDA’s Office of Criminal Investigations. “We will continue to work to investigate all persons, including medical professionals, who disregard regulatory requirements and jeopardize the public health by participating in the distribution of misbranded products.”
The doctors are accused of obtaining drugs, including Zometa, Kytril, Taxotere, Gemzar, Eloxatin and others, from outside the United States, where the drugs were not approved by the FDA, according to the charges.
A drug may be considered misbranded even if it is identical in composition to an FDA-approved drug (that is, a drug labeled and packaged in compliance with the FDA’s standards) and even if it was made by the same manufacturer in the same facility as the FDA-approved version.
If convicted, the doctors face up to one year in prison and fines up to $100,000. Their sentences will be determined by the court after reviewing 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.
These cases are being prosecuted by Assistant U.S. Attorney Michael L. Collyer following investigations by the FDA – Office of Criminal Investigations and the Department of Health and Human Services – Office of Inspector General.
Anyone suspecting health care fraud, waste or abuse can report it by calling the U.S. Department of Health and Human Services, Office of Inspector General at 800-447-8477. To learn more about health care fraud prevention and enforcement go to www.stopmedicarefraud.gov
A charge is not evidence of guilt. The defendants are entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Securities Broker Sentenced to Three Years in Prison for Investment FraudRead the Press Release
Orlando, FL - U.S. District Judge Charlene Honeywell today sentenced Gurudeo "Buddy" Persaud (47, Orlando) to three years in federal prison for mail fraud. As part of his sentence, the court also ordered Persaud to pay $948,340.00 in restitution to the victims of his scheme.
According to the plea agreement, Persaud, a licensed securities broker, formed White Elephant Trading Company LLC in 2007. White Elephant was a private equity fund that purportedly invested in securities on the national markets. Persaud solicited investors by telling them that he would generate profits using his trading skills and that he would make all trading decisions. Persaud guaranteed investors rates of return of between 6% and 18% that were payable in a short period of time. However, Persaud used a trading strategy that was based on lunar cycles and the gravitational pull between the moon and the Earth. Furthermore, Persaud did not invest all of the money that he received from investors, but instead used money from later investors to pay earlier investors and used significant portions of the money for his own personal use. Persaud defrauded investors out of more than $1million.
This case was investigated by the Federal Bureau of Investigation. It was prosecuted by Assistant United States Attorney David Haas.
Second Man Pleads Guilty to Preparing False Tax ReturnsRead the Press Release
FOR IMMEDIATE RELEASE
August 13, 2o13
MINNEAPOLIS—Earlier today in federal court in St. Paul, a man pleaded guilty to conspiring to file false tax returns after admitting he had used the identity information of several children to generate false dependents. Rotimi Williams specifically pleaded guilty to one count of conspiracy to obstruct the lawful functioning of the Internal Revenue Service (“IRS”) and four counts of identity theft. Williams, who was indicted along with Ayo Aseph on April 15, 2013, entered his plea before United States District Judge Paul A. Magnuson.
In his plea agreement, Williams admitted that from about April 15, 2008, through about April 15, 2011, he conspired with others to obstruct the IRS in its legal obligation to collect income taxes. During that time, Williams was in the business of preparing and filing federal and state income tax returns for clients, his main office located in Brooklyn, New York. Williams had several clients in Minnesota, including Aseph.
Williams, who had clients in Minnesota and New York, admitted to generating false tax returns for certain New York clients by adding the names, social security numbers, and birthdates of children who were not their dependents. Williams did this in order to lower the amount of federal taxes owed, and, thereby, qualify for refunds, by claiming additional dependents on their tax returns. The dependent information involved minors from Minnesota, and were added to certain New York clients’ tax returns.
On June 12, 2013, Williams’ co-defendant, Ayo Aseph, pleaded guilty to one count of conspiracy. In his plea agreement, Aseph admitted that Williams prepared his tax returns starting in 2007, and that Williams was his employer until 2011. In 2008, Aseph, at Williams’ direction, obtained the identities of children not his own to claim on his income tax return for that year. Aseph admittedly gave his brother money in exchange for the identification information of two children that his brother knew. The identification information of a third child was also provided by one of Aseph’s co-workers. Those three children were claimed as dependents on Aseph’s 2009 tax return as well. And, for his 2010 tax return, one of the children as well as two other children were claimed as dependents.
For their crimes, both defendants face a potential maximum penalty of five years in prison for conspiracy. In addition, Williams faces a potential maximum penalty of 15 years on each count of identity theft. Judge Magnuson will determine their sentences at a future hearing, yet to be scheduled.
This case is the result of an investigation by the IRS-Criminal Investigations. It is being prosecuted by Assistant U.S. Attorney John Docherty.
According to the IRS, approximately 60 percent of taxpayers use tax professionals to prepare and file their tax returns, with these paid preparers now collectively responsible for more than 80 million individual tax returns annually. “Tax return preparer fraud” is one of the IRS’s “Dirty Dozen Tax Scams.” For more information about the fight against tax fraud or how to choose a reliable tax return preparer, visit http://www.irs.gov/uac/Tips-for-Choosing-a-Tax-Return-Preparer.Per U.S. Department of Justice policy, the U.S. Attorney’s Office is not allowed to provide the age and city of residence for defendants charged in criminal tax cases.
Red Lake Man Sentenced for Assaulting A Man with an Axe HandleRead the Press Release
MINNEAPOLIS—Yesterday in federal court in Fergus Falls, a 48-year-old Red Lake man was sentenced for assaulting a man with an axe handle. On August 12, 2013, United States District Judge John R. Tunheim sentenced Joseph William Howard, Jr., to 105 months on one count of assault resulting in serious bodily injury. Howard was indicted on February 22, 2012, and pleaded guilty on May 29, 2012.
In his plea agreement, Howard admitted that on January 13, 2012, he assaulted the victim at a Redby residence. According to a law enforcement affidavit filed in the case, authorities were called to the residence, located on the Red Lake Indian Reservation, on that day. There, they found the victim, whose face had been severely beaten and lacerated. Officers also discovered blood splattered on the bed and walls in the room where the victim was staying. A bloody axe handle was ultimately uncovered behind the dryer in that home’s utility room. As a result of the assault, the victim suffered multiple fractures, and his left eye was so badly damaged that it had to be surgically removed.This case was the result of an investigation conducted by the Red Lake Tribal Police Department and the Federal Bureau of Investigation. It was prosecuted by Assistant U.S. Attorney Deidre Y. Aanstad.
Because the Red Lake Indian Reservation is a federal-jurisdiction reservation, some of the crimes that occur there are investigated by the FBI in conjunction with the Red Lake Tribal Police Department. Those cases are prosecuted by the U.S. Attorney’s Office.Pittsburgh Man Charged with Possession Sexual Images of MinorsRead the Press Release
PITTSBURGH, Pa. - An Allegheny County man has been indicted by a federal grand jury in Pittsburgh on a charge of possession of material depicting the sexual exploitation of a minor, United States Attorney David J. Hickton announced today.
The one-count indictment named Kelly Eugene Jones, 39, as the sole defendant.
According to the indictment, on Feb. 15, 2013, Jones possessed visual depictions, namely, images in computer graphics files, the production of which involved the use of minors engaging in sexually explicit conduct.
The law provides for a maximum total sentence of 20 years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Jessica Lieber Smolar is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation and the Allegheny County District Attorney Investigations Unit conducted the investigation leading to the indictment in this case.
An indictment or information is an accusation. A defendant is presumed innocent unless and until proven guilty.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Overseer of Manatee County Marijuana Grow Houses Convicted at TrialRead the Press Release
TAMPA, FLORIDA - Acting United States Attorney A. Lee Bentley, III announces that a federal jury yesterday found Do Nguyen (39, Bradenton) guilty of conspiracy to possess with intent to distribute 100 or more marijuana plants. Nguyen faces a maximum penalty of 40 years in federal prison. His sentencing hearing will be scheduled at a later date. Nguyen was indicted on November 6, 2012.
According to testimony and evidence presented at trial, Nguyen managed five separate marijuana grow houses throughout Manatee County from mid-2010 through October 2011. The houses were located in Bradenton, Parrish, and Duette. Nguyen recruited and employed three workers at the houses. Between March and October 2011, law enforcement executed a series of searches at the homes and recovered approximately 3,387 marijuana plants, worth approximately $5 million, along with extensive growing equipment and paraphernalia. During the time period of the conspiracy, Nguyen also paid a relative (Minh Tran), who worked as a driver for UPS, to deliver packages to him containing multiple pounds of marijuana from California. Tran pleaded guilty to conspiracy to distribute 100 kilograms or more of marijuana in May 2013. His sentencing is scheduled for September 23, 2013.
This case was investigated by the Manatee County Sheriff's Office, Bradenton Police Department, and the Drug Enforcement Administration. It is being prosecuted by Assistant United States Attorney Patrick Scruggs.
Oklahoma Woman Sentenced to Two Years in Federal Prison on Tax Evasion ConvictionRead the Press Release
Defendant, a Former Resident of Arlington, Texas, Must Also Pay More Than $228,000 in Restitution to the IRS
DALLAS — Jessica Pillow Venable has been sentenced to 24 months in federal prison and ordered to pay $228,060 in restitution to the Internal Revenue Service (IRS) following her guilty plea in April 2013 to an indictment charging two counts of tax evasion. The Court ordered that she surrender to the Bureau of Prisons on August 26, 2013. Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas (NDTX).
Venable, a former resident of Arlington, Texas, was charged by indictment in the NDTX on January 23, 2013, and shortly thereafter formally stated that she intended to plead guilty and requested that jurisdiction of her case be transferred to the Western District of Oklahoma (WDOK). At the time of her guilty plea, Venable was 26, according to the petition she filed with the Court.
According to the indictment and other documents filed in the case, Venable willfully failed to report income embezzled from Dream Machines of Texas for tax years 2009 and 2010. According to the judgment filed in the case, the $228,060 in restitution ordered paid to the IRS is a condition of supervised release. This is in addition to her obligation, pursuant to a separate settlement agreement, to pay $400 per month to the victim of the embezzlement.
This case was investigated by IRS Criminal Investigation. Assistant U.S. Attorneys Joseph Revesz of the NDTX and Charles Brown of the WDTX prosecuted.
Ohio Man Pleads Guilty in Connection with A Multi-year Marijuana Distribution ConspiracyRead the Press Release
Longtime drug dealer assaulted W.Va. State Trooper during January 2012 traffic stop
HUNTINGTON, W.Va. – U.S. Attorney Booth Goodwin today announced that an Ohio man pleaded guilty to federal charges in connection with a multi-year marijuana distribution conspiracy. Robin Earl Slater, 51, of Langsville, Ohio, pleaded guilty to four federal charges: conspiracy to distribute 100 kilograms or more of marijuana; possession of firearms in furtherance of a marijuana conspiracy; convicted felon in possession of firearms; and obstruction of justice.
Slater admitted today that he conspired to distribute over 100 kilograms of marijuana by supplying the drug to lower-level dealers in Putnam and Kanawha counties, as well as out of state.
On January 23, 2012, a West Virginia State Trooper followed Slater into a store parking lot after observing the defendant commit several traffic violations in St. Albans, W.Va. During an attempt to flee, Slater bit the police officer on the arm and pepper sprayed him. Slater was arrested a short time after the violent altercation. Following Slater’s arrest, police recovered $24,515, six firearms and drug ledgers from his vehicle.
U.S. Attorney Goodwin said, “We owe it to our law enforcement officers to do everything we can to protect them on the job. We’ve seen too many tragic, senseless law enforcement deaths in situations just like this: routine encounters that suddenly turn violent.” Goodwin continued, “Law enforcement officers risk their lives every day to keep the rest of us safe. I will spare no effort in prosecuting anyone who attacks them.”
Slater told police that the money he had was from individuals to whom he had supplied marijuana. Slater also admitted that he possessed firearms to protect himself and the proceeds of his drug activity.
Slater faces a mandatory minimum of 15 years in prison and up to life in prison when he is sentenced on November 18, 2013 by Chief United States District Judge Robert C. Chambers.Slater has two prior felony drug convictions related to the distribution of marijuana.
This case is being brought as part of Project Safe Neighborhoods. Project Safe Neighborhoods is a nationwide commitment to reduce gun crime in the United States by networking existing local programs targeting gun crime.
The West Virginia State Police, the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Putnam County Sheriff’s Department conducted the investigation. Assistant United States Attorney Steven Loew is in charge of the prosecution.
Ninth Individual Sentenced in Connection with Costa Rica-based Business Opportunity Ventures That Defrauded AmericansRead the Press Release
Michael Kerry Deevy, a Canadian citizen, was sentenced today in connection with a series of business opportunity fraud ventures based in Costa Rica, the Justice Department and the U.S. Postal Inspection Service announced. Beginning in 2006, Deevy and his co-conspirators in Costa Rica are alleged to have fraudulently induced purchasers in the U.S. to buy business opportunities from companies known as Cards-R-Us Inc., Premier Cards Inc. and Nation West. The business opportunities cost purchasers thousands of dollars each, with most paying at least $10,000. Today’s sentencing forms part of the government’s continued nationwide crackdown on business opportunity fraud.
“Business opportunity fraud schemes such as this one can crush the dreams – and wipe out the savings – of Americans who simply want to operate their own small businesses,” said Stuart F. Delery, Assistant Attorney General for the Civil Division. “The Department of Justice will continue to prosecute those who engage in these schemes, whether they set up shop here or abroad.”
“Business opportunity schemes target believers in a system that rewards those who are willing to sacrifice and work hard in the hope of getting ahead,” said U.S. Attorney for the Southern District of Florida Wifredo Ferrer. “In this particular case, the business opportunity fraud ventures were based in Costa Rica and targeted purchasers in the United States, including South Florida. Today’s sentence will hopefully send a message to those who are contemplating engaging in schemes such as this that, no matter where you are, we will pursue and prosecute you and bring you to justice for these illegal schemes.”
Deevy was sentenced by U.S. District Court Judge Patricia A. Seitz in Miami to 60 months in prison and 5 years’ supervised release. Deevy also was ordered to pay $4,541,914 in restitution. Prior to Deevy’s sentencing today, 11 other individuals were charged in connection with related business opportunity fraud ventures based in Costa Rica. Deevy is the ninth of those individuals to be convicted and sentenced in the U.S.
On April 11, Deevy pleaded guilty to one count of conspiracy, three counts of mail fraud and nine counts of wire fraud in connection with the business opportunity scheme. Deevy was arrested in Costa Rica in 2011 and extradited to the U.S. in 2012 following his indictment by a federal grand jury in Miami on Nov. 29, 2011. The indictment alleged that Deevy and his co-conspirators purported to sell greeting card and vending machine business opportunities, including assistance in establishing, maintaining and operating these businesses. Each company operated for several months, and after one company closed, another one opened.
Co-conspirators at the companies made numerous false statements to potential purchasers of the business opportunities. They indicated that purchasers likely would earn substantial profits; prior purchasers of the business opportunities were earning substantial profits; purchasers would sell a guaranteed minimum amount of merchandise, such as greeting cards and beverages; and that the companies worked with third party “locators” familiar with the potential purchasers’ areas who would secure, or had already secured, high-traffic locations for the prospective buyers’ merchandise display racks or machines.
In addition to these “locators,” the companies also employed various other types of sales representatives, including fronters, references and closers. Fronters spoke to prospective purchasers when they initially contacted the company in response to an advertisement. References told potential buyers that they had purchased one of the business opportunities and were making a profit. Closers subsequently spoke to potential purchasers to finalize deals. In pleading guilty, Deevy admitted that he was a fronter and reference for Cards-R-Us Inc., Premier Cards Inc. and Nation West.
“This investigation shows the resolve of the U.S. Postal Inspection Service to protect the American public from predatory business opportunity frauds,” said Ronald Verrochio, U.S. Postal Inspector in Charge, Miami Division. “We will continue to work with our law enforcement partners in the United States and overseas to root out these schemes.”
Assistant Attorney General Delery commended the investigative efforts of the U.S. Postal Inspection Service. The case was prosecuted by Assistant Director Jeffrey Steger and Trial Attorney Alan Phelps with the Consumer Protection Branch of the U.S. Department of Justice’s Civil Division.
Ninth Individual Sentenced in Connection with Costa Rica-Based Business Opportunity Ventures That Defrauded AmericansRead the Press Release
Michael Kerry Deevy, a Canadian citizen, was sentenced today in connection with a series of business opportunity fraud ventures based in Costa Rica, the Justice Department and the U.S. Postal Inspection Service announced. Beginning in 2006, Deevy and his co-conspirators in Costa Rica are alleged to have fraudulently induced purchasers in the U.S. to buy business opportunities from companies known as Cards-R-Us Inc., Premier Cards Inc. and Nation West. The business opportunities cost purchasers thousands of dollars each, with most paying at least $10,000. Today’s sentencing forms part of the government’s continued nationwide crackdown on business opportunity fraud.
“Business opportunity schemes target believers in a system that rewards those who are willing to sacrifice and work hard in the hope of getting ahead,” said U.S. Attorney for the Southern District of Florida Wifredo Ferrer. “In this particular case, the business opportunity fraud ventures were based in Costa Rica and targeted purchasers in the United States, including South Florida. Today’s sentence will hopefully send a message to those who are contemplating engaging in schemes such as this that, no matter where you are, we will pursue and prosecute you and bring you to justice for these illegal schemes.”
“Business opportunity fraud schemes such as this one can crush the dreams – and wipe out the savings – of Americans who simply want to operate their own small businesses,” said Stuart F. Delery, Assistant Attorney General for the Civil Division. “The Department of Justice will continue to prosecute those who engage in these schemes, whether they set up shop here or abroad.”
Deevy was sentenced by U.S. District Court Judge Patricia A. Seitz in Miami to 60 months in prison and 5 years’ supervised release. Deevy also was ordered to pay $4,541,914 in restitution. Prior to Deevy’s sentencing today, 11 other individuals were charged in connection with related business opportunity fraud ventures based in Costa Rica. Deevy is the ninth of those individuals to be convicted and sentenced in the U.S.
On April 11, Deevy pleaded guilty to one count of conspiracy, three counts of mail fraud and nine counts of wire fraud in connection with the business opportunity scheme. Deevy was arrested in Costa Rica in 2011 and extradited to the U.S. in 2012 following his indictment by a federal grand jury in Miami on Nov. 29, 2011. The indictment alleged that Deevy and his co-conspirators purported to sell greeting card and vending machine business opportunities, including assistance in establishing, maintaining and operating these businesses. Each company operated for several months, and after one company closed, another one opened.
Co-conspirators at the companies made numerous false statements to potential purchasers of the business opportunities. They indicated that purchasers likely would earn substantial profits; prior purchasers of the business opportunities were earning substantial profits; purchasers would sell a guaranteed minimum amount of merchandise, such as greeting cards and beverages; and that the companies worked with third party “locators” familiar with the potential purchasers’ areas who would secure, or had already secured, high-traffic locations for the prospective buyers’ merchandise display racks or machines.
In addition to these “locators,” the companies also employed various other types of sales representatives, including fronters, references and closers. Fronters spoke to prospective purchasers when they initially contacted the company in response to an advertisement. References told potential buyers that they had purchased one of the business opportunities and were making a profit. Closers subsequently spoke to potential purchasers to finalize deals. In pleading guilty, Deevy admitted that he was a fronter and reference for Cards-R-Us Inc., Premier Cards Inc. and Nation West.
“This investigation shows the resolve of the U.S. Postal Inspection Service to protect the American public from predatory business opportunity frauds,” said Ronald Verrochio, U.S. Postal Inspector in Charge, Miami Division. “We will continue to work with our law enforcement partners in the United States and overseas to root out these schemes.”
Assistant Attorney General Delery commended the investigative efforts of the U.S. Postal Inspection Service. The case was prosecuted by Assistant Director Jeffrey Steger and Trial Attorney Alan Phelps with the Consumer Protection Branch of the U.S. Department of Justice’s Civil Division.
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.
Nine Individuals Indicted for One of the Largest International Penny Stock Frauds and Advance Fee Schemes in HistoryRead the Press Release
Defendants Planned to Open Next Fraudulent Call Center in Brooklyn
BROOKLYN, NY – Earlier today, the Federal Bureau of Investigation (FBI) arrested six men in New York, Arizona, New Jersey, Florida and California for engaging in an international fraud conspiracy that spanned the globe from North America to Europe and Asia. A seventh defendant was also arrested today on a provisional arrest warrant in Ontario, Canada. The arrests resulted from an indictment charging nine defendants with 24 counts of securities fraud, wire fraud and false personation of Internal Revenue Service (IRS) employees in connection with the sale of securities and conspiracy.1 As set forth in court filings, the defendants masterminded securities fraud and advance fee schemes that victimized investors in approximately 35 nations and generated more than $140 million through various brokerage and bank accounts under their control. To uncover the international aspects of the scheme and gather evidence, the FBI used wiretaps in the United States and undercover agents in foreign countries.
The indictment and arrests are the result of one of the largest international penny stock investigations ever conducted by the Department of Justice and the FBI and mark the unveiling of a multi-year, ongoing investigation, which included significant assistance from the Royal Canadian Mounted Police (RCMP), as well as from other U.S. law enforcement agencies and law enforcement authorities in England, as well as assistance from Thailand and China.
The defendants are charged in two separate but interrelated schemes. According to the indictment, the defendants first engaged in an international ‘pump and dump’ scheme during which they fraudulently ‘pumped up’ the share price of worthless penny stocks and then ‘dumped’ billions of shares of those stocks by unloading them on unsuspecting victim investors across the globe. Second, the defendants operated boiler rooms in at least four countries that induced investors in penny stocks, including many of the same victims from the ‘pump and dump’ scheme, to pay advance fees that the defendants promised would enable the victim-investors to sell their penny stocks and recover losses that they incurred. In reality, the defendants simply stole the fees without providing any services, fraudulently extracting millions of additional dollars from their victims.
The charges and arrests were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; George Venizelos, Assistant Director-in-Charge, FBI, New York Field Office; Toni Weirauch, Special Agent-in-Charge, IRS, Criminal Investigation, New York; James C. Spero, Special Agent-in-Charge, Homeland Security Investigations, Department of Homeland Security, Buffalo; and Robert O’Malley, Special Agent-in-Charge, Treasury Inspector General for Tax Administration (TIGTA).
The ‘Pump and Dump’ Scheme
As alleged in the indictment, defendants Sandy Winick, Gary Kershner, Joseph Manfredonia, Cort Poyner, Songkram Roy Shachaisere and William Seals orchestrated one of the largest international penny stock frauds in history. First, the defendants gained controlling interests of huge quantities of worthless stock in 11 public companies known in the industry as ‘file cabinet businesses’ – thinly traded companies with minimal assets and non-existent business operations, which in many cases were mere shell companies. They then ‘pumped up’ the share prices of the companies’ stock by engaging in fraudulent and illegal sales campaigns, which included distributing false press releases, announcing non-existent business ventures and fake mergers, posting false information on social media sites and bribing stock promoters and brokers.
These efforts fraudulently inflated share prices so that the pump and dump defendants could trade billions of shares of penny stocks that they owned and controlled at a profit, ultimately generating more than $120 million worth of fraudulent stock sales in accounts under their control. As a result of the defendants’ efforts, investors in 35 countries were defrauded in connection with their purchase of the companies’ stock.
To avoid detection, the defendants, many of whom operated from outside the United States, were often careful to use “throwaway phones.” In fact, defendant Poyner was intercepted on a wire communication reminding others in the scheme to use such mobile devices to avoid being caught. The defendants also knew that they should not draw attention to their illegal trading scheme. For example, defendant Winick boasted about the superiority of the charged scheme compared to another more obvious scam, stating: “That deal is obviously a pump and dump. We know enough to be subtle.”
The Advance Fee Scheme
As the indictment alleges, defendants Winick, Gregory Curry, Kolt Curry and Gregory Ellis perpetrated a second scheme in which they fraudulently induced penny stock victims to pay advance fees, on the promise that the victims would then either be able to sell their securities to other waiting investors or join lawsuits to reclaim their losses. In reality, the advance fees were nothing more than a con, as neither the investors nor the lawsuits existed. To hoodwink the penny stock owners, the advance fee defendants invented fake trading companies and a fake law firm and then posed as employees of those entities while soliciting advance fees from the penny stock victims.
To facilitate the scheme, the defendants established boiler rooms or call centers from which members of the conspiracy would solicit advance fees from the unsuspecting penny stock victims. The call centers were located in various locales around the world, including Canada, Thailand and the United Kingdom. Recently, the defendants began planning to open a new call center in Brooklyn, New York. Some of the victims were told that they either needed to pay the advance fee to remove restrictions that were placed upon their penny stock, which prevented the victims from selling their stock in the market, or to join investors in a pending or anticipated lawsuit to recover losses that they incurred while owning the penny stock. Victims were then told that the advance fees were needed to convert the warrants of their stocks to a saleable security. In several instances, the advance fee defendants even pretended to be IRS employees collecting a bogus advance tax from victim investors before they could unload their penny stocks.2 The victims were directed to send payment of the advance fees to banks around the world, including bank accounts in New York City. The fraud proceeds were then transferred through a funds transfer network, located in Getzville, New York, to an account maintained in Beirut, Lebanon. Ultimately, these defendants generated more than $20 million in fraudulently obtained advance fees.
Defendant Kolt Curry described the Advance Fee Scheme in the following way over an intercepted wire communication: “I would say that 100 percent of these stocks are like uh pink uh… just dumps . . . . so … ya know they’re totally, they’re like, so a lot of these guys are dying . . . . to get rid of this crap. . . . The money is good, it’s easy. It’s easy money. Definitely easy money, and it’s good money.” In fact, while bragging about his prowess as a fraudster, defendant Kolt Curry further stated, “I had a guy send me a million dollars over one phone call . . . . He actually sent me almost two million dollars over the period of the hit . . . . I guess in the industry they coin it as a smash and grab.” As for the group’s recent plans to open a call center in Brooklyn, New York, defendant Kolt Curry said, “I tell you what man . . . hitting the Americans would be like taking money from a baby.”
“As alleged in the indictment, the defendants used our securities markets as a platform from which to run elaborate fraudulent schemes to victimize unsuspecting investors across the globe. Where others saw citizens of the world, the defendants saw a pool of potential marks. They cheated, lied and swindled investors into buying billions of shares of worthless stock, then turned around and used a second scam to cheat those investors again. But today, the defendants were the marks, and it was law enforcement that ran the table,” stated United States Attorney Lynch. “As this case shows, we are committed to preserving the rule of law and protecting our investors and markets from fraud. I would like to thank our partners at FBI for their hard work on this important investigation.” Ms. Lynch also thanked the Royal Canadian Mounted Police, Financial Crime Intelligence Unit in Vancouver and the Integrated Market Enforcement Team in Toronto, the IRS, the Department of Homeland Security, TIGTA and the Serious Organized Crime Agency in the United Kingdom. Throughout the course of the investigation, significant assistance was also provided by the United States Embassies in Ottawa, Toronto, London, Bangkok and Beijing. Ms. Lynch also expressed her grateful appreciation to the Securities and Exchange Commission for its cooperation and assistance in the investigation.
FBI Assistant Director-in-Charge Venizelos stated, “As alleged in the indictment, the defendants overstated the value of penny stocks and sold them to unwitting investors worldwide. By tricking victims into paying advance fees with the promise of realizing larger gains or recovering losses, some of the defendants dipped into the pockets of those they had betrayed—not once, but twice. The investing public has the right to trade in an uncorrupted market, and we have a responsibility to uphold the public’s confidence in the integrity of our financial markets. While the charges announced today are significant, they are but one example of what’s left to come as we continue to work with our partners in this ongoing investigation.”
“The criminals behind this scheme were shameless in heartlessly defrauding hundreds of victims out of their savings and retirement accounts for their own enrichment,” said James C. Spero, special agent in charge of Immigration and Customs Enforcement Homeland Security Investigations (HSI) in Buffalo. “HSI is committed to working with our partners at the FBI and the U.S. Attorney’s Office to hold these perpetrators accountable and recover as much money as possible for their victims.”
IRS Special Agent-in-Charge Weirauch stated, “Illegal activity in the investment industry continues to bring financial ruin to unsuspecting American investors. IRS-Criminal Investigation is proud to be part of the multi-agency team that stopped this international investment scam. We stand ready to bring our forensic accounting skills to the fight against other investment schemes and white collar crimes.”
“Impersonation of an employee of the Internal Revenue Service is a violation of federal law,” said Robert E. O’Malley, Special Agent in Charge for the TIGTA. “Taxpayers should exercise extreme caution when contacted by individuals representing themselves as IRS employees, and immediately verify those individuals’ employment by contacting the IRS through their website at www.irs.gov. If the individuals cannot be verified as IRS employees, they should immediately contact TIGTA.”
The defendants have been charged with: one count of conspiracy to commit securities fraud, two counts of conspiracy to commit wire fraud, 15 counts of wire fraud, four counts of securities fraud and two counts of false personation of an officer of the United States. If convicted, the defendants will face up to 20 years’ imprisonment for each count of conspiracy to commit wire fraud, substantive wire fraud and substantive securities fraud and up to five years’ imprisonment for conspiracy to commit securities fraud. The defendants face up to three years in prison for each count of false personation of an officer of the United States. In addition, all proceeds of fraudulent schemes are subject to forfeiture. The defendants will be presented for arraignment later today at the United States Courthouses in Brooklyn, New York; Los Angeles, California; Miami, Florida; and Tucson, Arizona. The defendants in Los Angeles, Miami and Tucson are expected to be removed to Brooklyn.
The government’s case is being prosecuted by Assistant United States Attorneys Christopher A. Ott, Sylvia Shweder and Melanie Hendry.
This prosecution was the result of efforts by President Barack Obama’s Financial Fraud Enforcement Task Force (FFETF), which was created in November 2009 to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ Offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions, and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants. For more information on the task force, visit http://www.StopFraud.gov.
The Defendants
SANDY WINICK
Citizenship: Canada
Age: 55
Bangkok, ThailandGREGORY CURRY
Citizenship: Canada
Age: 63
Bangkok, ThailandKOLT CURRY
Citizenship: Canada
Age: 38
Ontario, CanadaGREGORY ELLIS
Citizenship: Canada
Age: 46
Ontario, CanadaGARY KERSHNER
Citizenship: United States
Age: 72
Tucson, ArizonaJOSEPH MANFREDONIA
Citizenship: United States
Age: 45
Tom’s River, New JerseyCORT POYNER
Citizenship: United States
Age: 44
Boca Raton, FloridaSONGKRAM ROY SAHACHAISERE
Citizenship: United States
Age: 43
Huntington Beach, CaliforniaWILLIAM SEALS
Citizenship: United States
Age: 51
Fallbrook, California_____________________________
1The charges contained in the indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty.
2 The investigation showed that the identities used were fictitious and no IRS employees were involved in the scheme.
Minneapolis Man Sentenced to 30 Years in Prison for Committing Sexual Abuse Against A ChildRead the Press Release
MINNEAPOLIS—Yesterday in federal court in Fergus Falls, a 32-year-old Minneapolis man was sentenced for committing aggravated sexual abuse against a child. On August 12, 2013, United States District Judge John R. Tunheim sentenced Joseph Valerian Parshall to 360 months in prison on two counts of aggravated sexual abuse against a child under the age of 12. Parshall was indicted on September 21, 2011, and was convicted on February 7, 2012.
According to the indictment and evidence presented at trial, Parshall committed two sexual acts against the child between February 1 and July 27, 2011. A law enforcement affidavit filed in the case states that on July 27, 2011, the Red Lake Tribal Police Department was informed of the abuse. The Federal Bureau of Investigation’s Fugitive Task Force arrested Parshall on August 31, 2011, in Minneapolis.
This case was the result of an investigation by the Red Lake Tribal Police Department and the FBI. It was prosecuted by Assistant U.S. Attorney Clifford B. Wardlaw. Because the Red Lake Indian Reservation is a federal-jurisdiction reservation, some of the crimes that occur there are investigated by the FBI in conjunction with the Red Lake Tribal Police Department. Those cases are prosecuted by the U.S. Attorney’s Office.Milwaukee Man Facing Life Imprisonment for Witness RetaliationRead the Press Release
United States Attorney James L. Santelle announced that today a federal grand jury indicted Kyle T. Collins, age 35, of Milwaukee, on one count of Retaliation Against a Federal Witness. If convicted of the charge, Collins faces a maximum penalty of life in prison without parole.
The charge relates to allegations that on June 14, 2013, Collins physically assaulted and threatened to kill a female who had testified earlier this year in the federal sex-trafficking trial of Tyrone McMillian. The female witness had been included in McMillian’s indictment as one of four minors that McMillian had trafficked in the sex trade between 2006 and 2009. The jury hearing that case found McMillian guilty of seven sex-trafficking counts. McMillian faces life in prison on four of those counts.
In documents previously filed publicly in connection with the allegations against Collins, the federal witness and two other individuals described to law enforcement officers Collins’ attack on the witness. According to those documents, in the early morning hours of June 14, 2013, Collins confronted the federal witness in a nightclub and told her that he knew she had testified against McMillian. A short while later, the witness left the nightclub and Collins again confronted her. Collins physically assaulted the witness outside of the nightclub and dragged her by her hair towards a waiting car where he was heard to say, “I’m going to kill this snitch.” Although Collins had dragged her halfway into the car, the witness was able to break free and run away. Collins was arrested a short while later.
In announcing the indictment, United States Attorney Santelle commented: “Attacks of any type on witnesses strike at the very heart of our criminal justice system, and witness intimidation and witness retaliation threaten the mission of all of us who work to keep our community safe and secure. That the alleged victim in this case is a young woman who, as a minor, was previously victimized by a sex trafficker makes this conduct all the more egregious and troubling. Today’s charge makes clear once again that the weight of the federal criminal justice system will be brought to bear on those who would in any manner, through any means attempt to harm or otherwise influence individuals who have the courage and the commitment to step forward and provide information about the criminal activities of others.”
The indictment was the result of an investigation by the Milwaukee Police Department. The case has been assigned to Assistant United States Attorney Joseph R. Wall.The public is cautioned that an indictment is merely the formal method of charging an individual and does not constitute evidence of guilt. An individual is presumed innocent until such time, if ever, that the government establishes his or her guilt beyond a reasonable doubt.
# # #Midwest City Man to Serve 27 Years in Federal Prison for Producing Child PornRead the Press Release
Oklahoma City, Oklahoma – JACK RUSSELL OWENS, 62, of Midwest City, Oklahoma, was sentenced by United States Chief District Judge Vicki Miles-LaGrange to serve 324 months in federal prison for producing child pornography, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma.
According to court records, Owens, a former professional photographer, made pornographic images of prepubescent girls in his Midwest City home. He used both regular cameras and hidden video cameras. He took the pictures and videos in the bathroom, in and around the backyard pool, and in the attic. Some of the pornographic pictures taken by Owens were surreptitious; others were not. Evidence showed that Owens, who frequented girls gymnastics events and went to nudist resorts, had been taking pictures of young girls—both clothed and unclothed—since the 1980s. In addition, evidence also showed that Owens had touched the genitals of a 9-year-old girl on more than one occasion. Owens had told the child, now a young adult, that she would get in trouble if she reported him.
In addition to homemade child pornography, Owens also possessed approximately 20,000 images of child pornography that he had downloaded from the Internet on two different home computers and an external hard drive. The bulk of Owens’s collection depicted girls between the ages of 5 and 11.
Owens’s misconduct came to light when a local citizen, through a chance encounter, observed child pornography on one of Owens’s computers and reported it to the Midwest City Police Department. Owens pled guilty to producing child pornography on May 8, 2013.
This case was part of Project Safe Childhood, the flagship program in the Department of Justice’s National Strategy for Child Exploitation Prevention and Interdiction, and was the result of an investigation conducted by the Midwest City Police Department and the Edmond Police Department, in conjunction with the AT&T Digital Crime lab at the University of Central Oklahoma. The case was prosecuted by Assistant U.S. Attorneys Brandon Hale and Chris Stephens.
Man Indicted for Embezzling from VA Program and Identity TheftRead the Press Release
BOSTON – A Massachusetts man was charged today with embezzling money from a Veterans Affairs program and identity theft.
Riccardo D’Orsainville, a/k/a “Riccardo Lloyd-D’Or,” was indicted for embezzling money from a program receiving federal funds, and for using the identity of other persons to open bank accounts.
The indictment alleges that between July 2012 and January 2013, D’Orsainville embezzled more than $66,000 in program payments and more than $2,000 in U.S. Treasury checks which were intended for the Boston Veterans Affairs Research Institute, Inc., (BVARI), where D’Orsainville was employed through a temporary agency as an executive assistant. BVARI is a federally funded non-profit organization which conducts medical research and educational activities for the Veterans Affairs health care system. It is further alleged that D’Orsainville used the identities of co-workers to open unauthorized corporate bank accounts under BVARI’s name, where he deposited the stolen checks and withdrew the funds for his own use.
If convicted, D’Orsainville faces a maximum penalty of up to 15 years in prison, to be followed by three years of supervised release and a $250,000 fine.
United States Attorney Carmen M. Ortiz and Jeffrey G. Hughes, Special Agent in Charge, Department of Veterans Affairs, Office of Inspector General, Northeast Field Office made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Shelbey D. Wright of Ortiz’s Health Care Fraud Unit.
The details contained in the indictment are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Man Convicted of Attempted Online Enticement for a Minor and Traveling from Alabama to Engage in Illicit Sexual ConductRead the Press Release
PANAMA CITY, FLORIDA – Following a two-day trial, Jeffrey Monroe Roy (48), of Mobile, Alabama, was found guilty of using the Internet in an attempt to persuade, induce, and entice a minor to engage in sexual activity and of traveling from Mobile, Alabama, to Panama City, Florida, with the intent to engage in sexual conduct with a 13 year old female.
Evidence presented during trial proved that on June 13, 2012, law enforcement officers, acting in an undercover capacity posted an advertisement on Craigslist posing as a 13 year old female. Roy responded to the posting, and over the next three days, Roy engaged in email chats and telephone calls that were sexual in nature with a person who the defendant believed to be a 13 year old female named Jaz. During his communications with Jaz, Roy discussed numerous sexual situations and attempted to entice the 13 year old female to engage in sexual activity with him. After making arrangements to meet the 13 year old female, Roy drove from Mobile, Alabama on June 16, 2012 to meet with 13 year old Jaz at a predetermined location, where he was arrested and found to be in possession of Viagra, condoms, a camera, a knife, handcuffs, a first aid kit, and a deck of 52 sex position cards.
As a result of the guilty verdict, Roy faces a sentence of ten years to life in prison on Count One of the Indictment, attempted online enticement of a minor, and a sentence of up to thirty years in prison on Count Two of the Indictment, traveling with the intent to engage in illicit sexual conduct. Roy also faces a fine of up to $250,000, not less than five years and up to a life term of supervised release, and a $100 special assessment on both counts. Sentencing is set for November 20, 2013 at 10 a.m.
In announcing the verdict, Pamela C. Marsh, United States Attorney for the Northern District of Florida, credited the success of this prosecution to the joint efforts of the agencies participating in the North Florida Internet Crimes Against Children Task Force Program, particularly U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, the United States Marshals Service, Bay County Sheriff’s Office, and the Gainesville Police Department. Ms. Marsh said, “The safety and well-being of our children is a top priority for the Department of Justice. Our office will continue to aggressively prosecute these cases to protect the community and children, who are our most innocent victims. Great praise is deserved by all of our law enforcement partners who contributed to the success of this investigation.”
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 Attorney’s 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 identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The case was prosecuted by Assistant United States Attorney Kathryn Risinger.
Kyle Man Indicted for Assaulting an OfficerRead the Press Release
United States Attorney Brendan V. Johnson announced that a Kyle, South Dakota, man was indicted by a federal grand jury for assaulting an Oglala Sioux Tribe police officer.
Red Owl was remanded to the custody of the U.S. Marshals Service. A trial date has not been set.
Richard Red Owl, age 46, was indicted on July 23, 2013, for Assaulting a Federal Officer. He appeared before U.S. Magistrate Judge Veronica L. Duffy on August 12, 2013, and pled not guilty to the indictment. Red Owl allegedly swung a tree branch at the officer, and then threw a knife at him.
The maximum penalty upon conviction is 20 years’ imprisonment and/or a $250,000 fine. The charge is merely an accusation and Red Owl is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Bureau of Indian Affairs Office of Justice Services and the Oglala Sioux Tribe Department of Public Safety. Assistant U.S. Attorney Eric Kelderman is prosecuting the case.Justice Department Resolves Lawsuit Alleging Discrimination on Basis of Race and National Origin in MinneapolisRead the Press Release
The Justice Department today announced a settlement of its lawsuit alleging that Highland Management Group Inc., Edina Park Apartments LLC, and Amy Koch violated the Fair Housing Act (FHA) by discriminating against Somali prospective renters at Edina Park Apartments in Edina, Minn. a suburb of Minneapolis. After filing the complaint earlier today, the department submitted the settlement to U.S. District Court Judge Susan R. Nelson, in the form of a proposed consent decree.
The case originated based on evidence generated by the department’s Fair Housing Testing Program, in which individuals pose as prospective renters to gather information about possible discriminatory practices. The testing uncovered evidence that Amy Koch, who was the then property manager at Edina Park Apartments, showed white testers apartments when they walked in while she told Somali testers they had to make an appointment to see an apartment the next day. She also failed to tell Somali testers about certain apartments becoming available that she mentioned to white testers. Amy Koch was an employee of Highland Management Group, Inc.
“Treating people differently because of their race or national origin when they are looking for a place to live is a fundamental affront to American values,” said Acting Assistant Attorney General Jocelyn Samuels. “This settlement demonstrates that the Civil Rights Division Housing Testing Program is an important tool in combating discrimination.”
Under the settlement, Highland Management Group Inc. and Edina Park Apartments must pay $30,000 to the government as a civil penalty. The settlement also requires Highland Management Group, Inc. and Edina Park Apartments to maintain a nondiscrimination policy, provide employees with training on the requirements of the Fair Housing Act and provide periodic reports to the government.
U.S. Attorney B. Todd Jones said, “Everyone has the right to expect equal treatment under the law when searching for housing. The U.S. Department of Justice and the U.S. Attorney’s Office will work tirelessly to ensure that all people are treated fairly when attempting to secure housing for themselves and their families. It is what the good citizens of Minnesota expect and deserve.”
The federal Fair Housing Act prohibits discrimination in housing based on race, color, religion, national origin, sex, disability and familial status. Individuals who believe that they may have been victims of housing discrimination should call the Housing Discrimination Tip Line (1-800-896-7743) or email the Justice Department at [email protected]. Such persons may also contact the U.S. Department of Housing and Urban Development at 1-800-669-9777.
Fair housing enforcement is a priority of the Civil Rights Division. More information about the Civil Rights Division and the laws it enforces is available at http://www.usdoj.gov/crt.
Justice Department Reaches Settlement with Homeowners Association and Property Management Company inFair Housing Lawsuit Involving Occupancy LimitsRead the Press Release
The Justice Department announced today that the Townhomes of Kings Lake HOA Inc. (HOA) and Vanguard Management Group Inc. have agreed to pay $150,000 to settle a lawsuit alleging violations of the Fair Housing Act (FHA). The lawsuit alleged that the HOA adopted and both defendants enforced occupancy limits that discriminated against families with children at the Townhomes of Kings Lake, a 249-townhome community in Gibsonton, Fla.
Under the proposed consent decree, which must still be approved by the U.S. District Court for the Middle District of Florida, the defendants will pay $45,000 to the family that initiated the original complaint filed with the U.S. Department of Housing and Urban Development (HUD), $85,000 into a victim fund to compensate other aggrieved families, and $20,000 to the United States as a civil penalty. In addition, the proposed consent decree prohibits the defendants from discriminating in the future against families with children and requires the defendants to receive training on the requirements of the FHA. In January 2013, while the lawsuit was pending, the HOA modified its occupancy limits to permit four occupants in 2-bedroom townhomes, six occupants in 3-bedroom townhomes, and eight occupants in 4-bedroom townhomes.
“The Fair Housing Act ensures that families with children are not denied their housing rights based on discriminatory occupancy policies,” said Jocelyn Samuels, Acting Assistant Attorney General for the Civil Rights Division. “The Justice Department will continue to vigorously enforce fair housing laws that protect the rights of families with children.”
The lawsuit, filed in October 2012, arose from a complaint filed with HUD by a family with six children that was living at the Townhomes of Kings Lake. After the family moved into their 4-bedroom townhome, the defendants indicated there was a problem with the number of people living in the home and threatened to evict the family. The family eventually moved out of the Kings Lake community. After HUD investigated the complaint, it issued a charge of discrimination and referred the matter to the Justice Department. The lawsuit alleged that the defendants violated the family’s rights, that the restrictive occupancy policies discriminated against other families with children, and that the defendants engaged in a pattern or practice of discrimination or denied rights protected by the FHA to a group of persons.
“Twenty-plus years of HUD guidance and cases have put housing providers on notice that occupancy standards which unfairly limit or exclude families with children violate the Fair Housing Act,” said Bryan Greene, HUD’s Acting Assistant Secretary for Fair Housing and Equal Opportunity. “HUD and the Department of Justice are committed to making sure that all people have equal access to the housing for which they financially qualify.”
Individuals who believe they or other individuals they know were victims of housing discrimination as a result of the former occupancy policies at the Townhomes of Kings Lake should contact the Housing and Civil Enforcement Section of the Civil Rights Division at 1-800-896-7743, mailbox number 9994, or by sending an email to [email protected] .
The federal Fair Housing Act prohibits discrimination in housing based on race, color, religion, national origin, sex, disability and familial status. Fair housing enforcement is a priority of the Civil Rights Division. More information about the Civil Rights Division and the laws it enforces is available at www.justice.gov/crt.