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Tuesday 30 July 2013
Petersburg Resident Arrested on Drug and Firearms ChargesRead the Press Release
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ELKINS, WEST VIRGINIA - A 35-year old Petersburg, West Virginia, resident was arrested on July 29, 2013, pursuant to an Indictment returned by a Federal Grand Jury on June 18, 2013.
According to United States Attorney William J. Ihlenfeld, II, LEONARDO RAMOS RODRIGUEZ was named in a 7-count Indictment charging him and co-defendant MEGAN ROHRBAUGH, age 23, of Rio, West Virginia, with Conspiracy to Distribute Oxycodone. RODRIGUEZ is also named in four counts of distribution of heroin and/or oxycodone and two firearms charges. ROHRBAUGH is named in one additional count for the distribution of oxycodone. RODRIGUEZ appeared before Magistrate Judge John S. Kull and was remanded to the custody of the United States Marshal pending a detention hearing scheduled for August
1, 2013.RODRIGUEZ and ROHRBAUGH face up to twenty years in prison on the conspiracy and distribution charges and up to ten years in prison on the firearms charges.
This case will be prosecuted by Assistant United States Attorney Stephen D. Warner and was investigated by the West Virginia State Police-Bureau of Criminal Investigation, US Immigration and Customs Enforcement, Homeland Security Investigations (ICE/HSI), Grant County Probation Office and the Grant County Sheriff’s Department.
It should be noted that the charges contained in the Indictment are merely accusations and not evidence of guilt, and that each defendant is presumed innocent until and unless proven guilty.
Northwestern University to Pay Nearly $3 Million to the United States to Settle Cancer Research Grant Fraud ClaimsRead the Press Release
CHICAGO — Northwestern University will pay the United States $2.93 million to settle claims of cancer research grant fraud by a former researcher and physician at the university’s Robert H. Lurie Comprehensive Center for Cancer in Chicago. Northwestern agreed to the settlement in a federal False Claims Act lawsuit that was unsealed today after the government investigated the claims made by a former employee and whistleblower who will receive a portion of the settlement.
Northwestern allegedly allowed one of its researchers, Dr. Charles L. Bennett, to submit false claims under research grants from the National Institutes of Health. The settlement covers improper claims that Dr. Bennett submitted for reimbursement from the federal grants for professional and consulting services, subcontracts, food, hotels, travel and other expenses that benefited Dr. Bennett, his friends, and family from Jan. 1, 2003, through Aug. 31, 2010.
The allegations were made in a civil lawsuit filed under seal in 2009 by Melissa Theis, who in 2007 and 2008 worked as a purchasing coordinator in hematology and oncology at Northwestern’s Feinberg School of Medicine, and who will receive $498,100 in settlement proceeds. The suit named as defendants Northwestern, the Lurie Cancer Center, Dr. Steven T. Rosen, and Dr. Bennett. It alleged that the defendants submitted false claims to the United States when Drs. Rosen and Bennett directed and authorized the spending of grant funds on goods and services that did not meet applicable NIH and government grant guidelines.
The allegations were investigated by the U.S. Department of Health and Human Services Office of Inspector General, the Federal Bureau of Investigation, the National Institutes of Health, and the U.S. Attorney’s Office. The government contends that it has certain civil claims against Northwestern arising out of Northwestern’s improper submission of claims to NIH for grant expenditures for items that were for the personal benefit of Dr. Bennett, his friends and family that were incurred in connection with grants as to which he was the principal investigator.
Northwestern, which fully cooperated during the investigation, did not admit liability as part of the settlement. The agreement releases the university and all of its affiliates and employees, other than Dr. Bennett, from the claims made in the whistleblower lawsuit. The case remains pending against Dr. Bennett alone. United States, et al., ex rel. Melissa Theis v. Northwestern University, Dr. Charles L. Bennett, et al., No. 09 C 1943 (N.D. Ill.).
“Allowing researchers to use federal grant money to pay for personal travel, hotels, and meals, and to hire unqualified friends and relatives as ‘consultants’ violates the public’s trust,” said Gary S. Shapiro, United States Attorney for the Northern District of Illinois. “This settlement, combined with the willingness of insiders to report fraud, should help deter such misconduct, but when it doesn’t, federal grant recipients who allow the system to be manipulated should know that we will aggressively pursue all available legal remedies,” he added.
“The mismanagement or improper expenditure of grant funds is unacceptable and will not be tolerated,” said Lamont Pugh III, Special Agent-in-Charge of the U.S. Department of Health and Human Services, Office of Inspector General – Chicago Region. “The OIG will continue to diligently investigate allegations of this nature to ensure that taxpayer dollars are being properly utilized.”
Cory B. Nelson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation said: “The FBI takes allegations of fraud seriously, especially those allegations from insiders who are often in the best position to detect wrongdoing long before it would otherwise come to the attention of law enforcement.”
Northwestern agreed to pay the settlement within 14 business days. The agreement covers allegations that the university submitted false claims to NIH for costs that Dr. Bennett incurred on his grant-funded research projects involving adverse drug-events, multiple myeloma drugs, a blood disorder known as thrombotic thrombocytopenic purpura, and quality of care for cancer patients. Dr. Bennett allegedly billed those federal grants for family trips, meals and hotels for himself and friends, and “consulting fees” for unqualified friends and family members, including his brother and cousin. At Dr. Bennett’s request, Northwestern also allegedly improperly subcontracted with various universities for services that were paid for by the NIH grants.
The United States was represented by Assistant U.S. Attorney Kurt N. Lindland.
Under the federal False Claims Act, defendants may be liable for triple the amount of actual damages and civil penalties between $5,500 and $11,000 for each violation. Individual whistleblowers may be eligible to receive between 15 and 30 percent of the amount of any recovery.
Settlement Agreement
North Texas Men, Who Owned Hyperbaric Oxygen Therapy Companies, Plead Guilty to Conspiracy to Commit Health Care Fraud; Third Defendant Admits Conspiring to Make False Statements to A Financial InstitutionRead the Press Release
DALLAS — This morning, two businessmen, Stanley Thaw, of Frisco, Texas, and Michael Kincaid, of Plano, Texas, who owned and operated hyperbaric oxygen therapy companies located in Plano, Denton, Hurst, Houston, and San Antonio, Texas, appeared before U.S. District Judge Jorge A. Solis and pleaded guilty to their roles in a conspiracy to commit health care fraud. Kernell Thaw also appeared in court this morning and pleaded guilty to one count of conspiracy to make false statements to a financial institution regarding properties in Dallas that she purchased from a local home builder. Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
According to documents filed in the case, from January 2008 through June 2011, Stanley Thaw, 71, and Kincaid, 56, conspired together, and with others, to defraud Medicare by making false and fraudulent representations and promises in connection with payments of hyperbaric oxygen therapy (HBOT) services and items. HBOT is a therapy used to assist in healing diabetic sores or amputations in an outpatient setting. HBOT is administered by placing the patient in a hyperbaric oxygen chamber to receive increased levels of oxygen; each session of HBOT is commonly referred to as a “dive,” and generally lasted between ninety minutes and two hours.
The HBOT companies employed physicians to attend and supervise HBOT sessions to ensure that a patient was medically appropriate for the HBOT on that particular day and also to treat any medical emergency that may occur. Stanley Thaw and Kincaid admitted that they defrauded Medicare by billing multiple times for the physician supervision and attendance of HBOT-related services, when, in fact, the physician only supervised and attended one session/dive that day.
Stanley Thaw and his co-conspirators were advised on multiple occasions that billing for multiple dive sessions was improper and that they had overbilled Medicare. They continued to direct fraudulent claims to Medicare and other health care programs through at least June 2011.
Kernell Thaw, 50, admitted that from July 2010 through April 2011, she and a co-conspirator, knowingly made false statements to influence a local bank and its mortgage division, in connection with obtaining a residential loan on a property in north Dallas. Had the financial institution known these false statements and representations were false, it would have rejected their loan.
Each of the three defendants faces a statutory maximum penalty of five years in federal prison, a $250,000 fine or twice the pecuniary gain to the defendant or loss to the victim, and restitution. Each of the defendants is scheduled to be sentenced on November 13, 2013, by Judge Solis. The plea agreement also includes a forfeiture allegation, which would require Stanley Thaw and Kernell Thaw to forfeit all proceeds traceable to their offenses.
The case is being investigated by the FBI, the U.S. Department of Health and Human Services - Office of Inspector General, the Office of Personnel Management - Office of Inspector General and the Texas Department of Public Safety. To learn more about health care fraud, please visit: http://www.stopmedicarefraud.gov/
Assistant U.S. Attorneys Sean McKenna, Glenn Harrison and P.J. Meitl are in charge of the prosecution.
Nicholas Woman Enters Federal Guilty Plea in Connection with Meth Manufacturing ConspiracyRead the Press Release
CHARLESTON – A Nicholas County woman faces up to 20 years in prison after pleading guilty today in connection with a methamphetamine manufacturing conspiracy, announced U.S. Attorney Booth Goodwin. Rachel Petrey, 32, pleaded guilty to conspiracy to manufacture methamphetamine before U.S. District Judge John T. Cophenhaver, Jr.
From August 2010 until February 2011, Petrey manufactured methamphetamine using a technique known as the “shake and bake” method. Petrey manufactured methamphetamine at various residences in and around Nicholas County. During the scheme, Petrey also taught several associates including Felicia Bess, 23, of Summersville, how to cook methamphetamine. Petrey also provided user amounts of methamphetamine to several associates in exchange for their assistance in obtaining meth-making materials.
Bess was previously sentenced in February to three years in federal prison for manufacturing methamphetamine.
Petrey is scheduled to be sentenced on October 9, 2013.
The U.S. Forestry Service, the Central West Virginia Drug Task Force, the West Virginia State Police, the Nicholas County Sheriff’s Department and the Richwood Police Department conducted the investigation. Assistant United States Attorney John Frail is in charge of the prosecution.
New Iberia Man Sentenced to 135 Months in Prison for Attempting to Solicit A Minor OnlineRead the Press Release
LAFAYETTE, La. – United States Attorney Stephanie A. Finley announced today that Gregory Steven Guillot, 35, of New Iberia, La., was sentenced by U.S. District Judge Richard T. Haik, to 135 months in prison for attempting to entice a minor to engage in criminal sexual activity. Guillot is also required to complete 20 years of supervised release and register as a sex offender.
According to the evidence presented at the guilty plea, Guillot made contact with a female he believed to be a 14-year-old girl using an online chat service. Guillot began chatting with the girl and attempted to make her feel comfortable, but later became more aggressive, asking questions of a sexual nature. He then sent sexually explicit images of himself and directed the girl to do the same. The undercover officer Guillot was chatting with made plans to meet him, and on October 24, 2011, authorities arrested Guillot on his way to pick up the 14-year-old girl he had arranged to meet. Guillot pleaded guilty on March 14, 2013.
This is not the first time Guillot has engaged in this type of activity. In 2006, he attempted to meet a female he thought was 15 years of age for sex and was arrested by state authorities in Hammond, La. Guillot originally faced Computer Aided Solicitation of a Minor, but the charge was downgraded to Cyber-stalking. Guillot was given probation.
“This defendant’s goal was to lure a minor through internet chat and then meet to have sex,” Finley stated. “He will now spend years in prison for attempting to bring a child into a potentially dangerous situation. Anytime anyone uses the internet to abuse or exploit children, we will aggressively investigate and prosecute them. Too many children fall prey to online predators. My office, along with our state, local and federal partners will continue to safeguard the children of this community.”
The Kenner Police Department investigated the case. Assistant U.S. Attorney Myers P. Namie prosecuted the case.
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 United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The U.S. Attorney’s Office and the U.S. Department of Homeland Security/Homeland Security Investigations/Immigration & Customs Enforcement (ICE) encourages the public to report suspected child predators and any suspicious activity through its toll-free hotline at (866) DHS-2ICE. Investigators are available at all hours to answer hotline calls. Tips or other information can also be submitted to ICE online at www.ice.gov/exec/forms/hsi-tips/tips.asp and to the FBI at tips.fbi.gov. Tips may be submitted anonymously. The Lafayette FBI office number is (337) 233-2164.
Navajo Man from Chichilta, N.M., Sentenced to Ten Years in Federal Prison for Child Sex Abuse ConvictionRead the Press Release
ALBUQUERQUE – Timothy Ignacio Duboise, 28, an enrolled member of the Navajo Nation who resides in Chichilta, N.M., was sentenced this afternoon to ten years in federal prison followed by six years of supervised release for his aggravated child sexual abuse conviction. Duboise will be required to register as a sex offender after he completes his prison sentence.
According to the criminal complaint filed in the case, the FBI initiated a criminal investigation into Duboise after the Navajo Division of Social Service reported an allegation of child sexual assault. Duboise was arrested on July 30, 2012, and has been in federal custody since that time.
Duboise pleaded guilty on Feb. 27, 2013, to an aggravated sexual abuse charge and admitted that, between July 15, 2011 and Aug. 15, 2011, he sexually assaulted a Navajo child by touching the child’s genitals. Duboise further admitted that the sexual assault occurred on the Navajo Indian Reservation.
This case was investigated by the Gallup office of the FBI and the Crownpoint office of the Navajo Nation Division of Public Safety and with the assistance of the Navajo Division of Social Services. The case was prosecuted by Assistant U.S. Attorney Jacob A. Wishard as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice (DOJ) to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and DOJ’s Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/.
Mission Man Ordered to Federal Prison for Child Pornography ConvictionRead the Press Release
McALLEN, Texas – Mission resident Jose Alaniz-Allen, 23, has been ordered to prison for nearly 19 years following his conviction of receipt of child pornography, United States Attorney Kenneth Magidson announced today. Alaniz-Allen pleaded guilty Jan. 31, 2013.
Today, U.S. District Judge Micaela Alvarez, who accepted the guilty plea, handed Alaniz-Allen a sentence of 225 months in federal prison, taking into consideration various sentencing enhancements. The court noted the offense involved the distribution of images for the receipt, or expectation of receipt, of a thing of value as well as the fact that some of the minors depicted in the pornographic images were vulnerable victims, being under the age of five. In handing down the sentence, Judge Alvarez stated that this crime causes a great harm to the community and individuals like Alaniz-Allen create a demand for this material. She further commented that she does not understand how anyone could gain satisfaction from watching an infant or a young child being sexually abused. Alaniz-Allen will serve five years of supervised release following completion of his prison term, during which time he is not to reside or work near schools or places where children commonly gather, have no direct contact with minors, restricted Internet access and various other conditions. He will also be ordered to register as a sex offender.
Alaniz-Allen came to the attention of law enforcement following an investigation which began Sept. 14, 2012, into persons using the Internet to traffic in child pornography. A Homeland Security Investigations (HSI) agent was able to locate and identify Alaniz-Allen as the owner of a computer as offering to participate in the distribution of child pornography movies through a peer-to-peer network.
On Nov. 29, 2012, a search warrant was executed at his Mission residence and a computer and various external storage media devices were seized. The forensic examination revealed 23 movies of clearly young children engaged in sexually explicit conduct. The images included children under the age of 12 engaged in bondage and acts of violence. Some of the images are of known victims as identified through the National Center for Missing and Exploited Children.
Alaniz-Allen admitted he downloaded child pornography from the Internet thereby receiving and possessing the child pornography found on his computer.
Alaniz-Allen will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
This case, prosecuted by Assistant United States Attorneys Kimberly Leo and Juan Villescas and investigated by Homeland Security Investigations, 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.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Minneapolis Man Sentenced to More Than 18 Years for Armed Robbery of St. Paul PharmacyRead the Press Release
MINNEAPOLIS—Earlier today in federal court in St. Paul, a 31-year-old Minneapolis man was sentenced for the April 3, 2012, armed robbery of the West 7th Pharmacy in St. Paul. United States District Judge Susan Richard Nelson ordered Michael Brooks Bynum to serve 220 months in federal prison on one count of interference with commerce by robbery pursuant to the Hobbs Act and one count of possession of a firearm in furtherance of a crime of violence. Bynum was indicted along with two co-defendants on July 10, 2012, and pleaded guilty on March 11, 2013.
Following today’s sentencing, Scott D. Sweetow, Special Agent in Charge of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (“ATF”), St. Paul Field Division, said, “Armed commercial robberies represent a serious and real threat to the public, one that ATF is fully committed to investigate with our partners, using tools, such as the Hobbs Act, to bring violent offenders to the bar of justice. The public should not have to worry that when they are getting a prescription filled or stopping at the store for a gallon of milk, that they may encounter violent, armed predators looking to steal prescription drugs at gunpoint.”In his plea agreement, Bynum admitted that on April 3, 2012, he drove Ray James Brown, age 25, and Rayshawn Earl James Brown, age 21, both of Minneapolis, to the West 7th Pharmacy in St. Paul. The men entered the establishment wearing masks. They pointed a .40-caliber, semi-automatic pistol at store employees and demanded they get down on the floor. They ordered the pharmacist to dump drugs, such as Percocet, Vicodin, and Oxycontin, into a plastic bag. Grabbing the filled bag, they then ran from the premises to their get-away car. Bynum drove the car, which was stopped by police a short time later. Both of the Browns attempted to run from police, but they were quickly apprehended. The gun brandished during the robbery was recovered nearby.
Bynum and Ray Brown also committed the armed robberies of Lloyds Pharmacy in St. Paul on February 18, 2012; the Best Aid Pharmacy in St. Louis Park on March 15, 2012; and the Pro Pharmacy in St. Paul on March 27, 2012. Rayshawn Brown took part in the Pro Pharmacy robbery. In addition, Bynum has been previously convicted on other robbery and firearms charges and was on supervised release at the time he committed the recent four robberies.
On May 20, 2013, Rayshawn Brown was sentenced to 120 months on one count of interference with commerce by robbery pursuant to the Hobbs Act and one count of possession of a firearm in furtherance of a crime of violence. He pleaded guilty on September 21, 2012. On May 15, 2013, Ray Brown was sentenced to 168 months on two counts of possession of a firearm during and in relation to a crime of violence. He pleaded guilty on September 19, 2012.
The Hobbs Act, passed by Congress in 1946, provides federal jurisdiction for cases involving violent, habitual criminals who commit armed robbery in businesses involved in interstate commerce.
This case was the result of an investigation by the St. Paul Police Department, the St. Louis Park Police Department, the Hennepin County Violent Offender Task Force, and the ATF. It was prosecuted by Assistant U.S. Attorneys Julie E. Allyn and Surya Saxena.Minneapolis Man Sentenced for Bank RobberyRead the Press Release
MINNEAPOLIS—Earlier today in federal court, a 51-year-old Minneapolis man was sentenced for robbing the TCF Bank on West Lake Street in Minneapolis. United States District Court Judge Patrick J. Schiltz sentenced Phillip Leo Nietz to 151 months on one count of bank robbery, as well as three other bank robberies Nietz admitted in his plea agreement to also having committed. Nietz was indicted on October 10, 2012, and pleaded guilty on January 11, 2013. Nietz was ordered to pay restitution to the bank he had robbed.
In his plea agreement, Nietz admitted that on August 22, 2012, he walked into the West Lake Street branch of TCF Bank and gave a teller a note demanding money. He took approximately $3,794, placed it in a black bag, and left the premises on foot.
Nietz also admitted to robbing the three other banks in the same manner: a U.S. Bank in Roseville on August 14, 2012, where he stole $1,047; a Wells Fargo in St. Paul on August 28, 2012, where he stole $7,389; and a U.S. Bank in St. Paul on September 13, 2012, where he stole $1,045.This case was the result of an investigation by the Federal Bureau of Investigation. It was prosecuted by Assistant U.S. Attorney Thomas Calhoun-Lopez.
Minden Woman Sentenced to 2 Years in Prison/Treatment for Fourth DWIRead the Press Release
SHREVEPORT, La. – United States Attorney Stephanie A. Finley announced that Kathleen Larsen Coker, 51, of Minden, La., was sentenced Monday before U.S. District Judge Elizabeth E. Foote to two years in prison and three years of supervised release with conditions of treatment for driving while intoxicated. She was also ordered to pay a $5,000 fine.
According to evidence presented at the guilty plea, Coker drove a truck into a security bollard outside the East Gate of Barksdale Air Force Base at 5:10 a.m. on Nov. 18, 2012. Her blood alcohol level registered at .168 when measured at 7:27 a.m. The legal blood alcohol concentration limit on Barskdale Air Force Base is .08. The defendant had three prior convictions for driving while intoxicated in the last 10 years. The first conviction was on Nov. 16, 2005 in Minden City Court; the second conviction was on March 27, 2007 in 26th Judicial District Court in Webster Parish; and the third conviction was April 7, 2010 in 2nd Judicial District Court in Claiborne Parish. Coker pleaded guilty on March 11, 2013.
“This defendant will spend two years in prison because she made the mistake of drinking and driving,” Finley stated. “She put the lives of everyone who traveled the roads in danger and damaged Barksdale Air Force Base property, which was a cost to taxpayers. Hopefully this case serves as a deterrent to anyone thinking of drinking and getting behind the wheel.”
The Department of the Air Force Police investigated the case. Assistant U.S. Attorney Allison D. Bushnell prosecuted the case.
Maurice Man Pleads Guilty to Counterfeiting $100 BillsRead the Press Release
LAFAYETTE, La. – United States Attorney Stephanie A. Finley announced today that Brandon Lee Landry, 31, of Maurice, La., pleaded guilty before U.S. District Judge Richard T. Haik to counterfeiting $100 bills.
According to evidence presented at the guilty plea, Landry admitted that between August 2012 and September 2012 he counterfeited $100 bills. When officers arrested Landry on September 17, 2012, they found a number of uncut sheets of printed counterfeit $100 bills, an all-in-one printer, scanner, copier and numerous high-quality individual counterfeit $100 bills in his vehicle. The serial numbers on six of the counterfeit bills found in Landry’s vehicle were matched to counterfeit bills used illegally to pay for goods and services throughout the Acadiana area. Landry is responsible for printing more than 59 counterfeit $100 bills and admitted that he used the all-in-one printer, scanner, copier to make counterfeit money at a residence located in or near New Iberia, La. He also admitted that he passed the counterfeit bills to a number of area stores in an attempt to purchase merchandise.
Landry faces a maximum penalty of 20 years in prison, a $250,000 fine and five years of supervised release for counterfeiting. A sentencing date has not been set.
The U.S. Secret Service conducted the investigation. Assistant U.S. Attorney Joseph T. Mickel is prosecuting the case.Manhattan U.S. Attorney Announces Agreement with Liechtenstein Bank to Pay $23.8 Million to Resolve Criminal Tax InvestigationRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Kathryn Keneally, the Assistant Attorney General for the Tax Division of the Department of Justice, and Richard Weber, the Chief of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), announced today that Liechtensteinische Landesbank AG, a bank based in Vaduz, Liechtenstein (“LLB-Vaduz”), has agreed to pay more than $23.8 million to the United States and entered into a non-prosecution agreement (“NPA”) with the U.S. Attorney’s Office for the Southern District of New York. The NPA provides that LLB-Vaduz will not be criminally prosecuted for opening and maintaining undeclared bank accounts for U.S. taxpayers from 2001 through 2011, when LLB-Vaduz assisted a significant number of U.S. taxpayers in evading their U.S. tax obligations, filing false federal tax returns with the IRS, and otherwise hiding accounts held at LLB-Vaduz from the IRS. The NPA requires LLB-Vaduz to forfeit $16,316,000, representing the total gross revenues that it earned in maintaining these undeclared accounts, and to pay $7,525,542 in restitution to the IRS, representing the approximate unpaid taxes arising from the tax evasion by LLB-Vaduz’s clients. The NPA applies only to LLB-Vaduz and not to any of its subsidiaries or any individuals. LLB-Vaduz has decided to close its wholly-owned Swiss subsidiary, Liechtensteinische Landesbank (Switzerland) Ltd. and has also decided to sell another wholly-owned subsidiary, Jura Trust AG.
Manhattan U.S. Attorney Preet Bharara said: “With this agreement, one of Liechtenstein’s most important banks has put an era behind it. Today’s agreement with Liechtensteinische Landesbank AG reflects the unprecedented nature of the bank’s cooperation, and serves as another reminder for U.S. tax cheats who mistakenly believe that their offshore bank will never turn over their account files to U.S. authorities. To them we say, you can hide, but not forever.”
Assistant Attorney General Kathryn Keneally said: “This non-prosecution agreement addresses the past wrongful conduct of LLB-Vaduz in allowing U.S. taxpayers to evade their legal obligations through the use of undisclosed Liechtenstein bank accounts, while also acknowledging the extraordinary efforts of the bank in bringing about significant changes in Liechtenstein law. As a result of new Liechtenstein legislation, U.S. taxpayers who thought that they had obtained the benefit of Liechtenstein’s tax secrecy laws have learned that their bank files were turned over on the request of the Department of Justice.”
IRS-CI Chief Richard Weber said: “In 2008, Liechtensteinische Landesbank AG began requiring all U.S. taxpayers with accounts at LLB-Vaduz to declare their income. In addition, Liechtenstein’s Parliament amended their national law on tax matters to make easier the identification to the United States of non-compliant taxpayers. Today’s action sends a strong message to those Americans who hide their true income from the IRS. It's time to come clean and pay your fair share of taxes like law-abiding citizens do every day.”
The NPA recognizes that, in 2008, before the IRS and the U.S. Attorney’s Office began the investigation, LLB-Vaduz voluntarily implemented a series of remedial measures to stop assisting undeclared U.S. taxpayers in evading federal income taxes. The NPA further recognizes LLB-Vaduz’s extraordinary cooperation in the form of its support and assistance in 2012 to obtain a change in law by the Liechtenstein Parliament that permitted the Department of Justice to request and obtain the bank files of non-compliant U.S. taxpayers from Liechtenstein without having to identify the taxpayers by name (the “2012 Law”).
Pursuant to such a request by the Department of Justice, Liechtenstein transferred to the Department of Justice more than 200 files of U.S. taxpayers who held undeclared accounts at LLB-Vaduz, directly or through sham corporations, foundations, or trusts (“structures”). In addition, pursuant to the 2012 Law, the Department of Justice has submitted a second request to the Liechtenstein government for records relating to various Liechtenstein firms that provided trust administration and other fiduciary services that enabled U.S. taxpayers to hold undeclared accounts through structures at banks in Liechtenstein, Switzerland, and elsewhere.
As part of the NPA, LLB-Vaduz admitted various facts concerning its wrongful conduct and the remedial measures that it took to cease that conduct. Specifically, LLB-Vaduz admitted that it knew certain U.S. taxpayers were maintaining undeclared accounts at LLB-Vaduz in order to evade their U.S. tax obligations, in violation of U.S. law. In addition, LLB-Vaduz admitted that it knew of the high probability that other U.S. taxpayers who held undeclared accounts did so for the same unlawful purpose because significant numbers of U.S. taxpayers employed structures to hold their accounts, instructed LLB-Vaduz to use code names or numbers to refer to them on account statements and other bank documents, instructed LLB-Vaduz not to mail such documents to them in the United States, and instructed LLB-Vaduz not to disclose their identity to the IRS, among other things. At the end of 2006, LLB-Vaduz held more than $340 million of undeclared assets on behalf of U.S. taxpayers in more than 900 accounts.
As part of the NPA, LLB-Vaduz has agreed to forfeit $16,316,000 to the United States, representing LLB-Vaduz’s total gross revenues from services that it provided to undeclared U.S. taxpayers from 2001 through 2011. In connection with this forfeiture, LLB-Vaduz has agreed not to contest a civil forfeiture action filed by the United States. That action was filed on July 30, 2013 in U.S. District Court for the Southern District of New York and assigned to U.S. District Judge Katherine P. Failla.
The U.S. Attorney’s Office entered into the NPA based on factors including:
- LLB-Vaduz’s voluntary implementation of various remedial measures beginning in June 2008, before the investigation of its conduct began;
- LLB-Vaduz’s voluntary cooperation with this Office and the government of Liechtenstein after becoming aware of this Office’s investigation;
- LLB-Vaduz’s willingness to continue to cooperate with this Office and the IRS to the extent permitted by applicable law;
- LLB-Vaduz’s substantial support for the 2012 Law, which has already permitted the production to the Department of Justice of more than 200 account files of U.S. taxpayers who held undeclared accounts at LLB-Vaduz;
- LLB-Vaduz’s representation, based on an investigation by external counsel, that the misconduct under investigation did not, and does not, extend beyond that described in the Statement of Facts;
The NPA requires LLB-Vaduz to continue to cooperate with the United States for at least three years from the date of the agreement. The NPA applies only to LLB-Vaduz and does not apply to any of its subsidiaries, including its Swiss subsidiary, or to any individuals. In the event that LLB-Vaduz violates the NPA, the U.S. Attorney’s Office may prosecute LLB-Vaduz.
Mr. Bharara thanked the IRS for its outstanding work in the investigation of this matter and the Tax Division of the Department of Justice for its assistance in the investigation. Mr. Bharara also thanked the Liechtenstein Tax Authority and the Liechtenstein Public Prosecutor’s Office for their assistance in this matter.
This investigation is being overseen by the Office’s Complex Frauds Unit. Assistant U.S. Attorneys David B. Massey, Daniel W. Levy, and Jason H. Cowley are in charge of the matter.
LLB NPA
LLB Forfeiture ComplaintManhattan U.S. Attorney and FBI Assistant Director-In-Charge Announce Insider Trading Charges Against Former Equity Research AnalystRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and George Venizelos, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), today announced conspiracy charges against SANDEEP AGGARWAL, a former equity research analyst for a financial services firm located in San Francisco, California (“the Firm”), for his alleged involvement in an insider trading scheme. As alleged, AGGARWAL provided material, nonpublic information (“Inside Information”) concerning a strategic partnership in internet search and advertising between Microsoft Corporation (“Microsoft”) and Yahoo! Inc. (“Yahoo”) (the “Partnership”) to at least two different hedge funds. AGGARWAL was arrested yesterday in San Jose, California, and will be presented today in federal district court in the Northern District of California.
Manhattan U.S. Attorney Preet Bharara said: “As alleged, Sandeep Aggarwal leveraged his contacts in the technology industry to obtain an illegal edge in the form of inside information about a highly anticipated development, and then lied about his criminal conduct. With his arrest today, we continue our work to investigate and prosecute privileged professionals who think the laws requiring honesty and fair play do not apply to them.”
FBI Assistant Director-in-Charge George Venizelos said: “Like many others before him, Sandeep Aggarwal allegedly broke the law and provided material non-public information on a Microsoft-Yahoo deal. When questioned by his employer about the source of the information, he lied. Yesterday’s arrest is the latest step in the FBI’s long-running investigation into insider trading in the hedge fund industry.”
In a separate action, the U.S. Securities and Exchange Commission (“SEC”) announced civil charges against AGGARWAL.
According to the Complaint unsealed today in Manhattan federal court:
On the evening of July 9, 2009, AGGARWAL learned from a friend who was an employee of Microsoft that discussions about the Partnership had recommenced and that a transaction was likely within the next few weeks. The next day, AGGARWAL provided information about the Partnership to at least two different hedge funds, including to Richard Lee, then a portfolio manager at SAC Capital Advisors LP. On July 10, 2009, AGGARWAL told Lee, in substance, that he had heard from a source – whom AGGARWAL described as “a senior guy at Microsoft” – that (a) senior Yahoo executives had been meeting with senior Microsoft executives at Microsoft’s offices; (b) senior Microsoft executives were making requests for information that suggested to the sources that a deal was likely to be completed soon; (c) the success of Microsoft’s Bing search engine had caused Yahoo to move closer to Microsoft’s offer; and (d) it was likely that the deal could be announced within the next two weeks. Thereafter, Lee’s hedge fund purchased several hundred thousand shares of Yahoo stock, and Lee purchased 25,000 shares of Yahoo stock in his personal account.
The complaint further alleges that, when the Firm’s management questioned AGGARWAL on July 10, 2009 about the information he was providing to hedge funds concerning the Partnership, AGGARWAL falsely denied having any Inside Information and claimed that his source was a person who had been retired from Microsoft for two years.
AGGARWAL, 40, of Gurgon, India, is charged with one count of conspiracy to commit securities fraud, and one count of conspiracy to commit wire fraud. The conspiracy to commit securities fraud count carries a maximum sentence of five years in prison and a fine of the greater of $250,000, or twice the gross gain or loss from the offense. The conspiracy to commit wire fraud count carries a maximum sentence of 20 years in prison and a fine of the greater of $250,000, or twice the gross gain or loss from the offense.
Richard Lee pled guilty on July 23, 2013 to a criminal Information charging him with one count of conspiracy and one count of securities fraud in connection with insider trading between April 2009 through 2010, while he was employed by SAC Capital Advisors LP.
Mr. Bharara praised the investigative work of the FBI. He also thanked the U.S. Securities and Exchange Commission. He also noted that the investigation is continuing.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force, on which U.S. Attorney Bharara serves as a Co-Chair of the Securities and Commodities Fraud Working Group. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.StopFraud.gov.
The case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys John J. O’Donnell and Arlo Devlin-Brown are in charge of the prosecution.
The charges contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
U.S. v. Sandeep Aggarwal Complaint
Man Pleads Guilty to Conspiring to Distribute Methamphetamine and Possessing A FirearmRead the Press Release
MINNEAPOLIS—Yesterday in federal court in St. Paul, a 25-year-old man pleaded guilty to conspiring to distribute methamphetamine. Jose Alfredo Varela-Meraz, no known address, pleaded guilty to one count of conspiracy to distribute 500 or more grams of methamphetamine and one count of using, carrying, and possessing a firearm during and in relation to a drug-trafficking crime. Varela-Meraz, who was indicted on March 19, 2013, entered his plea before United States District Judge Susan Richard Nelson.
In his plea agreement, Varela-Meraz admitted that from the fall of 2009 through April 20, 2011, he conspired with others to distribute methamphetamine. He also admitted that during the period of the conspiracy, he obtained quantities of methamphetamine from various sources in Minnesota, Arizona, and elsewhere. He then distributed it to mid-level dealers. On March 25, 2010, police arrested Varela-Meraz in Minneapolis. At that time, they also seized 1,131.3 grams of methamphetamine and a loaded nine-millimeter handgun.
For his crimes, Varela-Meraz faces a potential maximum penalty of life in federal prison for each offense. Judge Nelson will determine his sentence at a future hearing, yet to be scheduled.This case is the result of an investigation by the U.S. Drug Enforcement Administration, the Ramsey County Sheriff’s Office, the Hennepin County Sheriff’s Office, the Minnesota State Patrol, and the police departments of Maplewood, Minneapolis, and Roseville. It is being prosecuted by Assistant U.S. Attorney Thomas M. Hollenhorst.
To learn more about the harmful effects of methamphetamine, visit http://www.justice.gov/dea/pr/multimedia-library/publications/drug_of_abuse.pdf#page=48.Leaders of Veterans Affairs Travel Fraud Scheme Sentenced to PrisonRead the Press Release
Two former employees of Seattle’s Veterans Affairs Hospital were sentenced to prison terms today in U.S. District Court in Seattle in connection with their scheme to take kickbacks on fraudulently inflated travel vouchers, announced U.S. Attorney Jenny A. Durkan. The men, veterans themselves, recruited other military veterans to participate in the fraud. Some of those recruited were vulnerable due to service related mental health disorders. NICK HALL, 47, of Seattle was sentenced to 42 months in prison and three years of supervised release. KEISHJUAN DANIELS, 33, of Kent, Washington was sentenced to 37 months in prison and three years of supervised release. At sentencing U.S. District Judge James L. Robart ordered both to share in restitution in the amount of $181,114. Judge Robart said, “There’s nothing like the bright sunshine of public disclosure to reduce fraud. I’m delighted to see there has been a decrease in fraudulent claims following this prosecution.”
“Not only did these defendants recruit vulnerable veterans into criminal activity, they stole resources critically needed to help our men and women returning from Iraq and Afghanistan,” said U.S. Attorney Jenny A. Durkan. “Following the arrests in this case the average monthly cost of larger travel vouchers was cut almost in half here, and sent a deterrent message everywhere: Don’t cheat our wounded warriors.”
Medical benefits are a critical aid for veterans. Not all communities have a VA medical facility. Thus to ensure more veterans get the services they need, the VA will reimburse certain travel costs.
According to records filed in the case, beginning in the second half of 2010, HALL and DANIELS recruited other veterans to lie about where they lived so that they could fraudulently inflate their travel costs for coming to the VA for medical appointments. They provided their co-schemers with phony addresses in towns such as Pullman, Port Townsend, Richland or Port Angeles, Washington so that the amount of mileage each vet claimed was far in excess of what they actually traveled. The two men, who worked in the travel voucher office, provided the falsified vouchers and sometimes provided vouchers for appointments that never occurred. HALL and DANIELS would take a kickback of half the cash the veteran obtained through fraud. Over the course of the 18 month scheme the fraud totaled $180,000.
After the arrest of HALL and DANIELS, the Veterans Affairs Office of Inspector General (VAOIG) analyzed all larger vouchers submitted for payment (more than $500 per veteran). Before the arrest, such vouchers totaled more than $103,000 a month in payments. After the arrests and publicity about the prosecutions, the average total of such vouchers dropped to about $54,000 per month – a drop of 48%.
Michael E. Seitler, Special Agent in Charge of the U.S. Department of Veterans Affairs, Office of Inspector General, Northwest Field Office, stated that “the actions of the defendants in this case served to undermine the public trust and divert precious financial resources from the VA’s critical mission. In this case two corrupt government employees, and eight veterans who conspired with them, exploited a system designed to help facilitate veterans’ access to medical care. This system provides financial travel reimbursements to veterans so that they can more easily come to VA medical centers and get the medical attention they deserve. The defendants abused this system in order to enrich themselves, ultimately at the expense of others. The VA Office of Inspector General will continue to aggressively pursue investigations of this type and hold those responsible accountable for their actions.”
Nationwide over the last 18 months the Veterans Affairs Office of Inspector General has conducted 225 investigations and arrested 125 people for fraud in the travel benefits program. Currently the VA-OIG has more than 125 open investigations of fraud in the travel benefits program.
The VA, Office of Inspector General, has established a hotline for anyone to anonymously report fraud, waste, and abuse at 1-800-488-8244 or [email protected]
The case was investigated by the Veterans Affairs Office of Inspector General with assistance from the Veterans Affairs Police and VA Medical Center Management. The cases were prosecuted by Assistant United States Attorneys Kate Vaughan and Thomas Woods.Largo Felon Sentenced to 15 Years in Prison for Possessing A FirearmRead the Press Release
Tampa, Florida - U.S. District Judge William J. Castagna sentenced Kwamane Coleman (23, Largo) yesterday to 15 years in federal prison for being a felon in possession of a firearm. Coleman pleaded guilty on February 27, 2013.
According to court documents, Coleman was arrested for trespassing in Largo, and was found to be in possession of a firearm and crack cocaine. As a previously convicted felon, Coleman is prohibited from possessing a firearm or ammunition under federal law.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Pinellas County Sheriff's Office. It was be prosecuted by Assistant United States Attorney Jennifer L. Peresie.
It is another case prosecuted as a part of the Department of Justice's "Project Safe Neighborhoods" program - a nationwide, gun-violence reduction strategy. Acting United States Attorney A. Lee Bentley, III, along with Julie Leon, Special Agent in Charge, ATF, is coordinating the Project Safe Neighborhoods effort here in the Middle District of Florida in cooperation with federal, state, and local law enforcement officials.
Laguna Pueblo Man Pleads Guilty to Two Federal Assault ChargesRead the Press Release
ALBUQUERQUE – Dennis George Cheresposy, 49, a member and resident of the Pueblo of Laguna, pleaded guilty this morning to two assault charges announced U.S. Attorney Kenneth J. Gonzales, DuWayne W. Honahni, Sr., Special Agent in Charge of District IV of BIA’s Office of Justice Services, and Chief Michelle F. Ray of the Pueblo of Laguna Police Department.
Cheresposy was arrested on Jan. 18, 2013, on a two-count indictment charging him with (1) assault with a dangerous weapon and (2) assault resulting in serious bodily injury. According to the indictment, Cheresposy used his fists and boots to assault another man on Oct. 20, 2011, causing the victim to suffer serious injuries.
During this morning’s proceedings, Cheresposy pled guilty to Count 2 of the indictment, charging him with assault resulting in serious bodily injury, and a felony information charging him with assaulting a man with his hands and feet on May 3, 2012.
In entering his guilty plea to Count 2 of the indictment, Cheresposy admitted that on Oct. 20, 2011, he kicked and punched a Laguna Pueblo man, who suffered multiple rib fractures as a result of the assault. Cheresposy also admitted that the assault occurred on a ranch run by the Pueblo of Laguna Cattle Association which is located in the Pueblo of Laguna.
In pleading guilty to the felony information, Cheresposy admitted that on May 3, 2012, he kicked and punched another Laguna Pueblo man who suffered a fractured eye orbit and bulging disc as a result of the assault. Cheresposy further admitted that this second assault occurred in a location within the Pueblo of Laguna.
Cheresposy has been in federal custody since his arrest in Jan. 2013 and remains detained pending his sentencing hearing, which has yet to be scheduled. Under the terms of his plea agreement, Cheresposy will be sentenced to 30 months in federal prison followed by a term of supervised release to be determined by the court.
These cases were investigated by the Laguna Agency of the BIA’s Office of Justice Services and the Pueblo of Laguna Police Department and are being prosecuted by Assistant U.S. Attorney Elaine Y. Ramirez.
Jesup Man Sentenced to 110 Years in Prison for Producing and Distributing Child PornographyRead the Press Release
BRUNSWICK, GA: STEPHEN A. KEATING, 53, of Jesup, Georgia, was sentenced yesterday by Chief United States District Court Judge Lisa Godbey Wood to 110 years in prison for his sexual exploitation of minors through the production and distribution of numerous images of child pornography. Evidence presented at the guilty plea and sentencing hearings showed that between 2009 and 2011, KEATING repeatedly sexually molested three children under the age of 12 to create pictures and videos of that conduct, then distributed images of the abuse. In addition to those three children, further investigation following KEATING’s guilty plea revealed that KEATING sexually molested 12 minor victims whose abuse was not captured on film.
United States Attorney Edward J. Tarver said, “This Defendant’s lengthy sentence represents the lifetime of pain and anguish he has brought upon his victims. Depraved acts such as these will bring together every facet of law enforcement to garner the severest punishment allowed by law. Protecting this country’s children is the highest priority for the Department of Justice and this United States Attorney’s Office.”
“The hideous abuse Stephen Keating inflicted on more than a dozen children can never be erased, but hopefully his victims can find some comfort in the fact that he will never again be a free man,” said Brock D. Nicholson, special agent in charge of HSI Atlanta. “This investigation is a perfect example of the revolution in international law enforcement cooperation in cases involving child exploitation and victim identification. After Danish police first discovered the photos, and less than 24 hours after we identified Keating as the perpetrator, HSI and a host of federal, state and local law enforcement agencies were searching his residence, putting him in handcuffs and rescuing his victims.” Each count of child exploitation to which KEATING pleaded guilty carried a mandatory minimum sentence of 15 years in prison and a maximum sentence of 30 years in prison, followed by at least 5 years of supervised release. The count of distribution of child pornography carried a mandatory minimum sentence of 5 years in prison and a maximum sentence of 20 years in prison, followed by at least 5 years of supervised release. KEATING was also ordered to register as a sex offender.
The charges against KEATING arose out of an investigation by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI). This case was brought as part of Project Safe Childhood, a unified and comprehensive strategy to combat child exploitation. Initiated by the Department of Justice in May, 2006, Project Safe Childhood combines law enforcement efforts, community action, and public awareness to reduce the incidence of sexual exploitation of children. 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, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Assistant United States Attorney Jennifer G. Solari prosecuted the case on behalf of the United States. For additional information, please contact First Assistant United States Attorney James D. Durham at (912) 341-7842.Jacksonville Cocaine Distribution Organization Dismantled "BLEW NI’RU"Read the Press Release
RALEIGH - United States Attorney Thomas G. Walker announced the recent completion of an Organized Crime Drug Enforcement Task Force (OCDETF) prosecution targeting Cocaine Trafficking in Jacksonville, North Carolina and the surrounding areas. The results of this investigation, code named Operation BLEW NI’RU, was a total of 26 convictions and the sentencing of 23 defendants to date. This drug trafficking organization operated in the Jacksonville area since the mid 1990’s and was responsible for distributing large amounts of cocaine powder and crack.
Mr. Walker statedThese defendants created havoc on the law abiding residences in the area by their distribution of large amounts of cocaine. My office stands ready to prosecute organizations like this to the full extent of the law to hold those who put profit ahead of public safety accountable.”
Sentences in these cases range from 24 months to 262 months imprisonment. See the attached with a list of individual defendants and their sentences. Operation BLEW NI’RU spanned 4 years and 5 North Carolina counties.
“This investigation, comprised of Federal, State and local law enforcement partners, required a significant investment of investigative manpower and resources resulted in a considerable impact to the level of drug activity in our community.” stated Deputy Chief Tim Malfitano, Deputy Director of Public Safety.
The Jacksonville Police Department’s Special Operation Division led a multi-agency, collaborative effort to target drug activity in the community. Other agencies involved in this investigation included the North Carolina State Bureau of Investigation, Federal Bureau of Investigation, Carteret County Sheriff’s Office and the Craven County Sheriff’s Office. Assistant United States Attorney Rudy E. Renfer prosecuted the cases for the government.
(Download BLEW NI’RU Conviction List)
Hickman Couple Sentenced for Failing to Pay Federal TaxesRead the Press Release
United States Attorney Deborah R. Gilg and Sybil Smith, Special Agent in Charge of IRS Criminal Investigation announced that Michael and Laurie Russell, of Hickman, Nebraska, were sentenced in Lincoln, Nebraska, by United States District Judge John M. Gerrard, for failing to pay employment taxes in 2006. Michael Russell was sentenced to 16 months in prison, followed by a 3 year term of supervised release. Laurie Russell was sentenced to 6 months in prison, followed by 6 months of house arrest as a condition of 3 years of supervised release. The Russells were also ordered to pay restitution, jointly, to the Internal Revenue Service, in the amount of $311,486.21.
The Russells jointly owned and operated a window installation business, North Country Windows. In 2006 they were withholding income and FICA taxes from employee paychecks, but paid none of it to the IRS. Despite failing to make any payments to the IRS, the Russells lived a comfortable lifestyle. The Russells had the financial ability to pay the taxes, and their failure to do so was willful.
“Business owners have a responsibility to withhold income taxes for employees and remit those taxes to the Internal Revenue Service,” said Sybil Smith, Special Agent in Charge of IRS Criminal Investigation. “We are committed to pursuing those who violate the employment tax laws.”
This case was investigated by the Internal Revenue Service Criminal Investigation Division.Heroin Dealer Sentenced to Ten Years in PrisonRead the Press Release
EUGENE, Ore. – John Christopher Norton, 40, of Eugene, Oregon, was sentenced on July 29, 2013, to 120 months in federal prison after previously pleading guilty to conspiracy to possess with intent to distribute heroin.
Norton has a prior criminal history, including convictions for bank robbery and delivery of a controlled substance. In September 2011, he sold heroin within one week after being released from prison. Over the next two months, he used his stepson, Cory Beatt, to help him conduct multiple heroin deals in Lane County. In November 2011, a search warrant led to the discovery of heroin at Norton’s residence. The investigation determined that he possessed a total of 352 grams of heroin.
“Sentencing is about accountability and hope,” said U.S. District Court Chief Judge Ann Aiken, who presided over sentencing. “The damage to the community from people dealing drugs, particularly the quantities involved in this case, needs to be underscored.” The judge characterized as “unacceptable” Norton’s involvement of a family member in his criminal enterprise and reprimanded him for a text message he sent to Beatt after their arrest. In the text message, Norton urged Beatt not to cooperate with law enforcement.
Over twenty of Norton’s supporters showed up in court, spoke out on his behalf, and submitted letters to the court telling of Norton’s sixteen-month sobriety from drugs and alcohol, commitment to mentoring troubled youth and excellent employment record. Judge Aiken credited Norton with extraordinary rehabilitation and sentenced him to 120 months in prison, less than the 151 months recommended by the government.
Norton’s stepson, Cory Beatt, pleaded guilty and was sentenced today. Judge Aiken credited Beatt with the time he had already served in prison and sentenced him to no additional prison time. However, as part of his sentence, Beatt must serve up to 120 days in the Lane County Residential Reentry Center and attend Federal Reentry Court.
This investigation was conducted by the Eugene Police Department, the Lane County Sheriff’s Office and the U.S. Drug Enforcement Administration. The case was prosecuted by Assistant U.S. Attorney William “Bud” Fitzgerald.
Henderson, Kentucky Man Guilty in Multiple Bank RobberiesRead the Press Release
OWENSBORO, Ky. – A Henderson, Kentucky man pleaded guilty last week, in United States District Court, before Magistrate Judge Dave Whalin, to robbing six financial institutions and to money laundering, announced David J. Hale, United States Attorney for the Western District of Kentucky.
According to the plea agreement, James Allen Morris, age 54, admitted to using force, violence, and intimidation when he robbed six financial institutions, whose deposits were then insured by the Federal Deposit Insurance Corporation and the National Credit Union Administration , located in Henderson County, Kentucky, between July 23, 2010 and January 17, 2013.
Specifically, Morris admitted on Friday, July 26, 2013, to robbing the following financial institutions: on January 17, 2013, Green River Credit Union, located at 902 Second Street, Henderson, Kentucky of $32,414; on August 22, 2012, Independence Bank, located at 2610 Zion road, Henderson, Kentucky of $10,400; on August 22, 2012, Bank of Henderson, 2003 Stapp Drive, Henderson, Kentucky of $11,559; on July 11, 2012, Green River Credit Union, 902 Second Street, Henderson, Kentucky of $1,596; on May 24, 2011, U.S. Bank, 501 Barrett Boulevard, Henderson, Kentucky of $6,000; and on July 23, 2010, Integra Bank, 9720 U.S. HWY 41 N., Poole, Kentucky of $2,770.
Further, Morris admitted to one count of money laundering for knowingly depositing the proceeds of bank robbery at three separate branches of the same bank located in Henderson, Kentucky. The separate deposits were designed to conceal the fact that the deposits were bank robbery proceeds taken from the Green River Credit Union.
Further, Morris agreed in court to an order of restitution to be determined at sentencing. The amount owed to victims includes the total loss to the banks listed in the plea agreement including an undetermined amount to Old National Bank, and $4485 to Green River Credit Union at 902 St. Henderson, Kentucky as $29,524 was recovered.
At sentencing Morris faces a combined maximum term of 140 years in prison, a maximum fine of $1,750,000., restitution, and a three year term of supervised release.
Sentencing is scheduled for September 21, 2013 at 10:30am in Owensboro, before Chief Judge Josepha H. McKinley Jr.
This case is being prosecuted by Assistant United States Attorney Joshua Judd and is being investigated by the Henderson Police Department and the Federal Bureau of Investigation.
Haverhill Man Pleads Guilty to Bankruptcy Fraud for Concealing Property in Puerto RicoRead the Press Release
BOSTON – A Haverhill man was convicted today in U.S. District Court in Worcester of bankruptcy fraud for concealing assets from his bankruptcy creditors; specifically, property he owned in Puerto Rico.
Peter A. Schutter, 57, pleaded guilty before U.S. District Judge Timothy S. Hillman to bankruptcy fraud involving the concealment of assets.
In 1994, Schutter’s mother deeded a parcel of property in Aguadilla, Puerto Rico to Schutter and his wife. The Schutters filed a Chapter 7 bankruptcy petition in Worcester in April 2009, but failed to list the Puerto Rico property as an asset. In May 2009, at a meeting of creditors, Schutter was specifically asked by his bankruptcy trustee whether he had owned any real estate in the prior four years and Schutter answered, under oath, “no, sir.” Schutter later disclosed the property to the trustee, but only after the trustee requested records from Schutter that would have led inevitably to the discovery of that property. The trustee later sold it for $115,000 for the benefit of creditors.
Judge Hillman scheduled sentencing for Dec. 18, 2013. The statutory maximum penalty for the bankruptcy fraud charge is five years in prison, followed by three years of supervised release and a $250,000 fine.
United States Attorney Carmen M. Ortiz and Vincent Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. The case was referred for investigation by the U.S. Trustee’s Office in Worcester. The case is being prosecuted by Assistant U.S. Attorney Mark J. Balthazard of Ortiz’s Economic Crimes Unit.
Georgia Man Pleads Guilty to Possessing 216 Stolen Social Security Administration ChecksRead the Press Release
LAFAYETTE, La. –United States Attorney Stephanie A. Finley announced today that Terry Ulysses Morris, 50, of Lithonia, Ga., pleaded guilty before U.S. District Judge Richard T. Haik, to possessing stolen U.S. mail.
According to evidence presented at the guilty plea, authorities pulled over Morris’ vehicle during a traffic stop on January 18, 2012, as he was driving eastbound on Interstate 10 through Calcasieu Parish. A strong odor of marijuana prompted authorities to ask Morris if they could search the vehicle. Authorities found two sacks containing 216 U.S. Treasury checks that had not been cashed. The checks were from Social Security Administration accounts with Georgia addresses. The face value for the checks totaled $144,920. Morris admitted that he traveled to Houston, Texas, to find someone to cash or buy the checks. He could not find buyers because the checks were so old that most of the intended recipients had requested that replacement checks be issued. Morris was driving back to Georgia when he was stopped in Calcasieu Parish.
Morris faces up to five years in prison, a $250,000 fine, and three years of supervised release for possessing stolen mail. A sentencing date was not set.
The U.S. Postal Inspection Service and the Calcasieu Anti-drug Task Force conducted the investigation. Assistant U.S. Attorney Joseph T. Mickel is prosecuting the case.
Former Thurmond, Iowa, Resident Sentenced on Fraud ChargesRead the Press Release
COUNCIL BLUFFS, IA - On July 30, 2013, 55 year-old Robert W. Duncan, formally a resident of Thurmond, Iowa, was sentenced by United States District Court Judge John Jarvey to four years in prison, followed by five years of supervised release, announced U.S. Attorney Nicholas A. Klinefeldt. Duncan entered a guilty plea on March 12, 2013, to defrauding the Social Security Administration, filing a false income tax return and making a false statement to a financial institution. Duncan, former owner and auctioneer for Bob Duncan and Associates, was also ordered to pay restitution to the Social Security Administration in the amount of $218,755.10, and to the Internal Revenue Service in the amount of $42,254.00.
During the plea proceeding, Duncan admitted that he had defrauded the Social Security Administration by receiving benefits he was not entitled to between 1993 and 2011. Duncan also admitted to the court that he had caused to be filed a false 1040 tax form for tax year 2008 by under reporting his income, and that he had provided false financial documents to Treynor State Bank to obtain a $225,000 loan in 2005.
The investigation was conducted by the Iowa Division of Narcotics Enforcement, Southwest Iowa Narcotics Task Force, Mills County Sheriff’s Office, Internal Revenue Service- Criminal Investigations, Social Security Administration-Office of the Inspector General, Drug Enforcement Administration and the Federal Bureau of Investigation. The case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
(Download Press Release )
Former St. Louis Executive of Chicago Area Company Pleads Guilty to $3.9 Million Invoicing Fraud SchemeRead the Press Release
CHICAGO – A former vice president of a company that was based in west suburban Downers Grove pleaded guilty today to engaging in a fraudulent invoicing scheme in which he obtained more than 100 company checks totaling more than $3.9 million and stole the money for himself. The defendant, STEVEN M. BRAZILE, admitted the fraud at his arraignment after being charged earlier this month in U.S. District Court.
Brazile, 52, of St. Louis, was a vice president in the unnamed company’s St. Louis office where he managed the information technology functions in that office. He pleaded guilty to one count of interstate transportation of fraudulently obtained securities. He was released on his own recognizance pending sentencing, which U.S. District Judge Elaine Bucklo set for Nov. 13.
Brazile faces a maximum sentence of 10 years in prison and a $250,000 fine, although his plea agreement with the government anticipates an advisory federal sentencing guidelines range of 57 to 71 months in prison. Brazile also agreed to restitution and forfeiture orders in the amount of $3,902,880, including approximately $126,000 seized from Brazile’s bank accounts, an antique1959 Ford F100 pickup truck seized from Brazile, and $79,545 in proceeds from the sale of a 1965 Ford Tudor classic automobile.
Brazile, who had authority to approve company payments to vendors up to $100,000, admitted that between December 2006 and December 2009 he approved false invoices purporting to be from vendors for goods and services that were never provided to the corporation. He caused the company to issue approximately 104 checks totaling slightly more than $3.9 million. Brazile took those checks and stole the proceeds by depositing them into a bank account he controlled. He then deposited the fraud proceeds into other accounts, including $250,000 placed into a brokerage account which he agreed to forfeit.
The guilty plea was announced by Gary S. Shapiro, United States Attorney for the Northern District of Illinois, and Cory B. Nelson, Special Agent-in-Charge of the Federal Bureau of Investigation. The government is being represented by Assistant U.S. Attorney Sarah E. Streicker.
The case falls under the umbrella of the Financial Fraud Enforcement Task Force, which includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement, who working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information on the task force, visit: StopFraud.gov.
Plea Agreement
Former Social Security Employee Sentenced to Prison for Receipt of Child PornographyRead the Press Release
A former employee of the Social Security Office of Disability Adjudication and Review was sentenced today in U.S. District Court in Seattle to five years in prison for receipt of child pornography, announced U.S. Attorney Jenny A. Durkan. THOMAS JOSEPH BARRETT, 50, of Lynnwood, Washington pleaded guilty earlier this year following his arrest at work in January 2013. The investigation revealed that BARRETT had accessed child pornography on both his work computer and at his home. U.S. District Judge John C. Coughenour imposed a ten year term of supervised release to follow his prison term.
According to records filed in the case, SSA obtained evidence of inappropriate internet use by BARRETT during work hours in November 2012 and immediately initiated an investigation. The Social Security Administration Office of Inspector General (SSA-OIG) investigated BARRETT’s computer use, reviewing his internet history and examining his computer’s hard drive. The analysis produced evidence that BARRETT had viewed child pornography using the computer. In addition, some of the website analysis revealed that BARRETT had accessed news stories about the penalties for possessing and distributing child pornography. According to SSA, SSA’s network and data were never compromised.
Search warrants served at BARRETT’s home and work revealed he had accessed more than 3,500 images of child pornography.
The case was investigated by the Social Security Administration Office of Inspector General, Homeland Security Investigation and the Washington State Patrol.
The case was prosecuted by Special Assistant United States Attorney Seth Wilkinson and Assistant United States Attorney Marci Ellsworth. Mr. Wilkinson is an attorney with the Social Security Administration specially designated to prosecute criminal cases in federal court.
Former Senior Executive of French Power Company<br /> Charged in Connection with Foreign Bribery SchemeRead the Press Release
A former senior executive of a French power and transportation company has been charged in a second superseding indictment for his alleged participation in a scheme to pay bribes to foreign government officials.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, Acting U.S. Attorney Deirdre M. Daly of the District of Connecticut and Assistant Director in Charge Valerie Parlave of the FBI’s Washington Field Office made the announcement.
Lawrence Hoskins, 62, a former senior vice president for the Asia region for the French company, was charged in the District of Connecticut with conspiring to violate the Foreign Corrupt Practices Act (FCPA) and to launder money, as well as substantive FCPA and money laundering violations. William Pomponi, a former executive of the Connecticut-based subsidiary of the power and transportation company who was previously charged in a superseding indictment on April 30, 2013, was charged with Hoskins in the second superseding indictment.
Frederic Pierucci, a current company executive who was previously charged in this case, pleaded guilty yesterday to one count of conspiring to violate the FCPA and one count of violating the FCPA. Charges against Pierucci were initially unsealed on April 16, 2013, along with a guilty plea by David Rothschild, a former vice president of regional sales at the Connecticut-based subsidiary, in connection with the bribery scheme. Rothschild pleaded guilty on Nov. 2, 2012.
According to the charges, the defendants, together with others, allegedly paid bribes to officials in Indonesia – including a member of the Indonesian Parliament and high-ranking members of Perusahaan Listrik Negara (PLN), the state-owned and state-controlled electricity company in Indonesia – in exchange for assistance in securing a $118 million contract, known as the Tarahan project, for the company and its consortium partner to provide power-related services for the citizens of Indonesia. To conceal the bribes, the defendants retained two consultants purportedly to provide legitimate consulting services on behalf of the power company and its subsidiaries in connection with the Tarahan project. The indictment, however, alleges that the primary purpose for hiring the consultants was to use the consultants to pay bribes to Indonesian officials.
The first consultant retained by the defendants allegedly received hundreds of thousands of dollars in his Maryland bank account to be used to bribe the member of Parliament. The consultant then allegedly transferred the bribe money to a bank account in Indonesia for the benefit of the official. According to court documents, emails between Hoskins, Pomponi, Pierucci, Rothschild and their co-conspirators discuss in detail the use of the first consultant to funnel bribes to the member of Parliament and the influence that the member of Parliament could exert over the Tarahan project.
Court documents allege that in the fall of 2003, Hoskins, Pomponi, Pierucci and others determined that the first consultant was not effectively bribing key officials at PLN. One email between employees of the power company’s subsidiary in Indonesia described PLN officials’ “concern that if we have won the job, whether their rewards will still be satisfactory or this agent only give them pocket money and disappear.” In another email, an employee at the power company’s subsidiary in Indonesia sent an email to Hoskins asserting that the consultant “has no grip on the PLN Tender team at all” and “is more or less similar to [a] cashier which I feel we pay too much.” As a result, the co-conspirators allegedly retained a second consultant to more effectively bribe PLN officials. The charges allege that the power company deviated from its usual practice of paying consultants on a pro-rata basis in order to make a much larger up-front payment to the second consultant so that the consultant could “get the right influence.” An employee at the power company’s subsidiary in Indonesia sent an email to Hoskins, Pomponi, Pierucci and others asking them to finalize the consultancy agreement with the front-loaded payments but stated that in the meantime the employee would give his word to a high-level official at PLN, according to the charges. The defendants and their co-conspirators were successful in securing the Tarahan project and subsequently made payments to the consultants for the alleged purpose of bribing the Indonesian officials.
The conspiracy to commit violations of the FCPA count carries a maximum penalty of five years in prison and a fine of the greater of $250,000 or twice the value gained or lost. The substantive FCPA counts each carry a maximum penalty of five years in prison and a fine of the greater of $100,000 or twice the value gained or lost. The conspiracy to commit money laundering count carries a maximum penalty of 20 years in prison and a fine of the greater of $500,000 or twice the value of the property involved in the transaction. The substantive money laundering counts each carry a maximum penalty of 20 years in prison and a fine of the greater of $500,000 or twice the value of the property involved in the transaction.An indictment is merely an accusation, and defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.
This case is being investigated by FBI agents who are part of the Washington Field Office’s dedicated FCPA squad, with assistance from the Meriden, Conn., Resident Agency of the FBI. Significant assistance was provided by the Criminal Division’s Office of International Affairs, and the Department has also worked closely with its law enforcement counterparts in Indonesia at the Komisi Pemberantasan Korupsi (Corruption Eradication Commission) and deeply appreciates KPK’s assistance in this matter.
The case is being prosecuted by Trial Attorney Daniel S. Kahn of the Criminal Division’s Fraud Section and Assistant U.S. Attorney David E. Novick of the District of Connecticut.
Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.
Related Materials:
Second Superseding Indictment
Former School Counselor Pleads Guilty to Sexually Exploiting Children by Producing Sexually Explicit ImagesRead the Press Release
Defendant Admits He Exchanged Child Pornography with a Private Internet Group for More Than Ten Years
BOISE – Mark Alan Saltzer, 45, of Boise, Idaho, pleaded guilty today in United States District Court to sexual exploitation of children by producing sexually explicit images of minors, U.S. Attorney Wendy J. Olson announced. Saltzer was arrested on August 17, 2012, at his home after federal investigators served a search warrant. Two minor boys were at the residence at the time of Saltzer’s arrest. As a part of his plea agreement, Saltzer admitted repeatedly sexually molesting one of the youths at his home, starting in the summer of 2012. Saltzer has been in custody since August 17.
The investigation began in October 2010, when the United States Postal Inspection Service, in conjunction with Toronto Police Services in Canada, initiated an investigation into a private Internet group established by members to communicate with one another about their shared sexual interest in young boys, and to exchange child pornography. Members of the group regularly traded child pornography files with other group members.
The group existed under various names for approximately 15 years. According to court documents, Saltzer had been a member of the group for more than a decade. Participants in the group resided in Idaho, New York, Virginia, Florida, Texas, Indiana, California, Pennsylvania, Canada, Lebanon, and Mexico, among other places.
According to the plea agreement, Saltzer admitted meeting boys between the ages of 10 and 17 in Internet chat rooms and engaging them in webcam sessions during which he encouraged them to masturbate. He used Skype and recorded webcam footage of the teenage boys performing sexual acts. Saltzer admitted using special software that allowed him to import a video of a child about 14 years old masturbating, and show that video to the boy with whom he was chatting, so it appeared that he was chatting with another teenager, instead of an adult.
According to the plea agreement, Saltzer admitted that between 2006 and 2012, he produced sexually explicit videos of numerous boys between the ages of 11 and 17.
The charge of sexual exploitation of children by producing sexually explicit images of minors is punishable by from 15 to 30 years in prison, a maximum fine of $250,000, and a minimum term of five years up to lifetime supervised release. The government is seeking forfeiture of the computer equipment used in the offense. There is no possibility of parole in federal cases.
Sentencing is set is set for October 15, 2013, before Chief U.S. District Judge B. Lynn Winmill at the federal courthouse in Boise.
“Those who victimize children by producing and distributing images of children being sexually abused will be identified, investigated and prosecuted,” said Olson. “Today’s guilty plea sends the strong message that local, state, federal and international law enforcement agencies will work together in an efficient and coordinated manner to bring these predators to justice.”
The case was investigated by United States Postal Inspection Service inspectors from Boise, Seattle and Washington, D.C., and the Indiana State Police. Officers from the Boise Police Department, Meridian Police Department and Idaho State Police assisted locally. The Ada County Prosecuting Attorney originally brought charges against Saltzer, which will be dismissed because of today’s guilty plea.
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.usdoj.gov/psc.
For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab “resources.”
Former Parker Man Pleads Guilty to over $1.7 Million Fraudulent Ponzi SchemeRead the Press Release
DENVER – Shawon McClung, age 27, formerly of Parker, Colorado, pled guilty today before U.S. District Court Judge R. Brooke Jackson to one count of wire fraud, U.S. Attorney John Walsh and FBI Denver Division Special Agent in Charge Thomas Ravenelle announced. McClung is free on bond. Judge Jackson is scheduled to sentence McClung on November 6, 2013 at 8:30 a.m. McClung waived his right to indictment, and was therefore charged by Information on June 12, 2013.
According to court documents, including the stipulated facts contained in the plea agreement, in 2009, McClung began Flint-McClung Capital, LLC (“FMC”) in Indiana. In November 2010, McClung moved FMC from Indiana to Denver, Colorado. In early 2009, McClung entered into financing discussions with a software programmer for the development of proprietary software to make automated trades on the foreign currency (“FOREX”) market. The goal was to develop a software program that would perform numerous automated trades during a short time based on an algorithm designed to predict and exploit differences in foreign exchange rates. On December 15, 2010, an agreement was reached by McClung and the software programmer to provide funding for the software program. However, McClung only provided approximately $213,000 of the promised $614,790, and the software program was never developed and was never available for FMC’s use.
Despite the fact that the software program had not been developed, from approximately March 2009 to approximately April 2011, McClung solicited investor money by falsely representing that FMC owned and used a proprietary “massively parallel automated trading system” to trade currencies on the FOREX market. McClung falsely told investors that this proprietary software was already being used at FMC and had a history of success. Both verbally and in writing, McClung falsely represented to investors, potential investors and others that investors in the investment programs he was offering “historically” received returns of 15% to 100% approximately every 14 to 30 days. In reality, as McClung well knew, the software program did not exist and had no history of success.
Both verbally and in written “Investment Contracts” and “Joint Venture Agreements,” McClung falsely represented to investors, potential investors and others that FMC guaranteed from loss the principal of the investment placed with FMC. McClung also falsely represented to investors, potential investors and others that FMC would use their entire investment to trade in currencies using FMC’s proprietary system, which McClung knew did not exist. In fact, McClung did not place any of the investors’ money in trades.
McClung did make some promised payouts to early investors using money he received from other investors. Some of those early investors told other potential investors about their successful “investments” with FMC, which reassured others about investing their money with McClung and FMC.
After McClung and FMC failed to make promised payments to investors via email and other forms of communication, McClung made a number of false excuses to investors and others regarding why the payments had not been made. He also made a number of false promises about future payments. In March 2011, McClung sent to several investors via email a document entitled “Cancellation of Contract and Account Settlement” in which he falsely represented that FMC would return an amount of money specified in the document if the investor signed and released McClung and others of any liability. After receiving signed “Cancellation of Contract and Account Settlement” from many investors, McClung failed to make the promised payouts and failed to return the investors’ principal.
At sentencing, the government intends to prove 17 victims sustained an aggregate loss of $1,756,750.
“When a promised high rate of return on your investment seems too good to be true, it usually is,” said U.S. Attorney John Walsh. “Ponzi schemes take people’s hard earned investment funds with no intention of investing them or returning them. The Ponzi schemer benefits, while the investor suffers. These economic crimes are among our most important cases, and will be prosecuted to the full extent of the law.”
“To ensure our financial markets operate fairly, the FBI is committed to aggressively pursuing those who commit investment fraud,” said FBI Denver Division Special Agent in Charge Thomas P. Ravenelle. “We are confident the results of this investigation will deter others who may engage in these types of fraudulent schemes.”
McClung faces up to 20 years in federal prison, a fine of not more than the greater of $250,000 or twice the gain or loss from the offense, or both; not more than 3 years of supervised release; a $100 special assessment fee; plus $1,756,750 restitution.
This case was investigated by the Federal Bureau of Investigation (FBI).
McClung is being prosecuted by Special Assistant U.S. Attorney Pegeen Rhyne.
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Former Owner of Los Angeles Medical Equipment Supply Company Sentenced for Conspiring to Defraud MedicareRead the Press Release
The owner and operator of a durable medical equipment (DME) supply company was sentenced today to serve 24 months in prison for conspiring to submit nearly $1 million in fraudulent claims to Medicare.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney André Birotte Jr. of the Central District of California; Special Agent in Charge Glenn R. Ferry of the Los Angeles Region of the U.S. Department of Health and Human Services’ Office of Inspector General (HHS-OIG); and Assistant Director in Charge Bill L. Lewis of the FBI’s Los Angeles Field Office made the announcement.
Tigran Aklyan, 37, of Van Nuys, Calif., was sentenced today by U.S. District Judge Michael W. Fitzgerald in the Central District of California. In addition to his prison term, Aklyan was sentenced to serve three years of supervised release and ordered to pay $653,461 in restitution.
In April 2013, Aklyan pleaded guilty to conspiracy to commit health care fraud. In his plea agreement, Aklyan admitted that he was the owner and president of Las Tunas, a DME supply company located in San Gabriel, Calif. Aklyan admitted that from in or around October 2007 through in or around May 2009 he conspired with others to commit health care fraud by providing medically unnecessary power wheelchairs (PWCs) and other DME to Medicare beneficiaries and submitting false and fraudulent claims to Medicare. Aklyan admitted that he paid the owners and operators of fraudulent medical clinics to provide him with prescriptions and supporting medical documentation for the PWCs and DME that he billed to Medicare. Aklyan knew that the prescriptions and medical documents that the clinics produced were fraudulent, yet he certified to Medicare with the submission of each claim that the DME was medically necessary. Aklyan also admitted that he knew that it was illegal for him to pay for prescriptions, but he did so anyway.
From on or about Dec. 17, 2007, through on or about Feb. 20, 2009, Aklyan, through Las Tunas, submitted approximately $910,377 in fraudulent claims to Medicare for PWCs and related services, and Medicare paid Las Tunas approximately $653,461 on those claims.
The case was investigated by the FBI and the Los Angeles Region of HHS-OIG and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Central District of California. This case is being prosecuted by Assistant Chief Benton Curtis and Trial Attorneys David M. Maria and Blanca Quintero of the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,500 defendants who have collectively billed the Medicare program for more than $5 billion. In addition, HHS’s Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
The Medicare Fraud Strike Force operations are part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
Former Mortgage Broker and Bank Officer Sentenced to One Year in Prison for Conspiring to Defraud Bank in Connection with $1.48 Million LoanRead the Press Release
TRENTON, N.J. – A former mortgage broker and bank officer was sentenced today to 12 months in prison for his role in conspiring to commit bank fraud in order to secure a $1.48 million residential real estate loan, U.S. Attorney Paul J. Fishman announced.
James Cockinos, 58, of Englewood Cliffs, N.J., previously pleaded guilty before U.S. District Judge Freda L. Wolfson to an information charging him with one count of conspiracy to commit bank fraud. Cockinos defrauded Washington Mutual Bank (later acquired by JPMorgan Chase) in New York, for the purpose of securing a $1.48 million residential loan. Judge Wolfson imposed the sentence today in Trenton federal court.
According to documents filed in this case and statements made in court:
Cockinos was the owner/president of Federated Mortgage Company of America (FMCA). He was also a member of the Board of Directors at Mariner’s Bank. Cockinos, through FMCA, served as the mortgage broker on a residential loan with Washington Mutual Bank, F.A., in an application dated April 19, 2007. The borrower, identified as Individual Two in the complaint, applied for the loan at the request of a spouse identified as Individual One in the complaint. There was no co-borrower on the loan.
The loan was for the purpose of purchasing for $1.9 million a property located in Englewood Cliffs. Cockinos was responsible for obtaining certain information from Individual Two for purposes of completing the loan application. At the time that Individual Two signed the loan application, Individual Two did not review the contents of the application, which included information regarding the purpose of the property and Individual Two’s employment, income, and assets.
The application contained false statements concerning Individuals Two’s employment, income and assets. Cockinos also indicated in the application that he obtained the information from Individual Two through a face-to-face interview, when in fact, no such interview took place.
The application indicated that Individual Two had $400,000 in a joint checking account at Mariner’s Bank in New Jersey, when, in fact, Cockinos and Individual One caused $350,000 to be temporarily deposited into the joint account for the purpose of misrepresenting that amount as Individual Two’s assets. Cockinos also directed a Mariner’s Bank employee to falsely verify that there was $350,000 in the joint account for the prior two months, when in fact, there were significantly less funds in the account over the prior two months.
Washington Mutual ultimately approved a loan of $1.48 million and wired the loan amount to Individual Two’s closing attorney on June 17, 2007. On Sept. 25, 2008, JPMorgan Chase acquired the banking operations of Washington Mutual Bank. Between Nov. 2, 2010 and Jan. 10, 2011, Individual Two defaulted on the loan. JP Morgan initiated foreclosure proceedings. The Englewood Cliffs property was sold on March 16, 2012, leaving JPMorgan Chase with a loss of more than $500,000 on the defaulted loan.
In addition to the prison term, Judge Wolfson sentenced Cockinos to two years of supervised release, fined him $5,000 and ordered him to pay $513,882 in restitution.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark; special agents of the Federal Deposit Insurance Corporation., Office of Inspector General, New York Region, under the direction of Special Agent in Charge A. Derek Evans; and criminal investigators from the U.S. Attorney’s Office in Newark, with the investigation leading to today’s sentence.
The government is represented by Assistant U.S. Attorney Zahid N. Quraishi of the U.S. Attorney’s Office Special Prosecutions Division in Newark.
13-317
Defense counsel: Edward J. Plaza Esq., Red Bank, N.J.Former Long Island Stockbroker Pleads Guilty in Connection with 17 Years of Financial Fraud SchemesRead the Press Release
Earlier today, at the federal courthouse in Central Islip, New York, Mark Hotton, a former Long Island stockbroker, pled guilty to conspiring to launder the illicit proceeds of almost two decades of fraud before United States District Judge Joanna Seybert. When sentenced, Hotton faces up to 20 years in prison, forfeiture of $1.8 million and restitution of up to $5.75 million to the victims of his frauds.
According to court filings and facts presented at the plea proceeding, between January 1995 and October 2012, Hotton used funds he obtained from a series of securities fraud schemes, mail fraud schemes and other crimes to promote his continuing illegal conduct. Throughout the conspiracy, Hotton also laundered proceeds of his frauds to pay employees cash wages, thereby avoiding federal withholding taxes intended for Social Security, Medicare and Medicaid. The defendant also laundered funds to avoid required payments to union pension and benefit funds.
The guilty plea was announced by Loretta E. Lynch, the United States Attorney for the Eastern District of New York; Toni Weirauch, Special Agent-in-Charge, New York Field Office of the Internal Revenue Service, Criminal Investigation; and Deputy Inspector General, Daniel R. Petrole of the U.S. Department of Labor, Office of the Inspector General, Office of Labor Racketeering and Fraud Investigations.
“Mark Hotton was a stockbroker who earned a substantial income, but that wasn’t enough for him. For almost two decades, he was the star of his own drama, cheating investors, partners, and his own employees to prop up the fairy tale of his success. Today the curtain has finally fallen on the tale of fraud and deception staged by this defendant, and he stands revealed as the fraud and con man that he is. He will now be held to account for his actions,” stated United States Attorney Lynch. Ms. Lynch expressed her grateful appreciation to the IRS-CI and the DOL-OIG for their investigation and participation in this case.
Hotton was arrested by federal agents on Monday, October 15, 2012, on these offenses, as well as additional fraudulent conduct in the Southern District of New York arising from the financing of the proposed Broadway play “Rebecca.” Hotton pleaded guilty to charges, arising from that conduct, yesterday in United States District Court in Manhattan.
The government’s case is being prosecuted by Assistant U.S. Attorneys Burton T. Ryan, Jr. and Melanie Hendry.
This prosecution was the result of efforts 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. For more information on the task force, visit http://www.StopFraud.gov.
The Defendant
MARK C. HOTTON
Age: 47
Residence: West Islip, New YorkFormer Fugitive Finally Sent to PrisonRead the Press Release
BROWNSVILLE, Texas – Juan Becerra Vallejo, 55, has just been handed a federal prison term following his conviction of possessing with intent to distribute cocaine, United States Attorney Kenneth Magidson announced today. Vallejo, a resident alien from Mexico who resided in Weslaco, pleaded guilty March 14, 2012.
Today, U.S. District Judge Hilda G. Tagle, who accepted the guilty plea, sentenced Vallejo to a total of 210 months in federal prison to be followed a five-year-term of supervised release. In handing down the sentence, Judge Tagle noted that Vallejo exercised management responsibility over the property, assets and activities of a criminal organization by arranging the transportation of multi-kilogram loads of marijuana and cocaine as well as millions of drugs proceeds for multiple drug suppliers.
Vallejo was indicted in 2009 at which time the court issued a warrant for his arrest. He was apprehended on Oct. 27, 2011.
The charges against Vallejo stem from a January 2005 investigation conducted by the Drug Enforcement Administration (DEA). That investigation led to the discovery that Noel Exinia, of La Feria and owner of NE and Family Transport, used one of his company’s tractor trailers to deliver approximately 234 kilograms of cocaine from the Rio Grande Valley to New York City. It was later discovered that Vallejo made the arrangements with Exinia for the transportation of the narcotics load to New York City and had caused the distribution of the load to Exinia for this purpose.
He has been in custody since his arrest where he will remain pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
As a result of the overall Organized Crime Drug Enforcement Task Force (OCDETF) investigation dubbed Operation Hot Pursuit, $805,416 in illegal drug proceeds have been seized.
Exinia himself pleaded guilty after hearing four days of evidence at a jury trial in October 2005. He was later sentenced to 600 months in federal prison.
The OCDETF investigation was conducted by the DEA, Cameron County District Attorney’s Office - Narcotics Division, FBI, Border Patrol, Internal Revenue Service-Criminal Investigation and the United States Marshals Service. The case was prosecuted by Assistant U.S. Attorneys Charles Lewis and Israel Cano III.
Former Freeport Man Sentenced to 20 Years in Federal Prison for Witness RetaliationRead the Press Release
ROCKFORD — A former Freeport, Ill. man was sentenced today in federal court to 20 years in federal prison for retaliating against and causing bodily injury to a witness. The defendant, DAMON RUCKER, 36, was also ordered by U.S. District Judge Frederick J. Kapala to serve 3 years on supervision following his release from prison. Rucker had been charged with causing bodily injury to the witness on Dec. 20, 2012.
Rucker was found guilty of the charge by a federal jury in Rockford, on April 23, 2013, following a two-day jury trial. According to the indictment and evidence at trial, Rucker was initially convicted in federal court in Rockford on July 31, 2012, of a drug trafficking crime. A co-defendant, who also pled guilty in that case, agreed to cooperate with the government and testified against Rucker during Rucker’s sentencing hearing. On Dec. 20, 2012, Rucker, with intent to retaliate against the co-defendant for testifying, slammed the witness’s head against a concrete wall while both were in custody. At the time, the victim was in the process of being transported to a different jail and was in hand and leg shackles. Rucker was not shackled at the time.
Judge Kapala ordered that today’s sentence of 20 years must be served consecutive to the 87 months in prison that Rucker was sentenced to on the drug trafficking conviction. Rucker will not be eligible for parole.
The sentencing was announced by Gary S. Shapiro, United States Attorney for the Northern District of Illinois, and Cory B. Nelson, Special Agent-in-Charge of the Chicago Office of Federal Bureau of Investigation. The United States Marshals Service and the Ogle County Sheriff’s Office assisted in the investigation.
The government was represented by Assistant U.S. Attorneys Scott R. Paccagnini and John G. McKenzie.
Former Citibank Employee Who Bilked Former Salomon Brothers Former Partner Out of $1.3 Million Gets 54 Months in PrisonRead the Press Release
Former Assistant Also Failed to Pay More Than $250,000 in Taxes
NEWARK, N.J. – A former Citibank employee was sentenced today to 54 months in prison for stealing more than $1.3 million from William Salomon, a 98-year-old former managing partner of Salomon Brothers, which was later acquired by Citibank, U.S. Attorney Paul J. Fishman announced.
Karen Febles, 48, of Wallington, N.J., who worked as an executive assistant for Citibank, helping Salomon with his personal and professional finances, was previously convicted by a jury of bank fraud, four counts of wire fraud, three counts of money laundering, and two counts of tax evasion, after a one-week trial before U.S. District Judge William J. Martini. Judge Martini imposed the sentence today in Newark federal court.
According to documents filed in this case and the evidence at trial:
From at least 2000 through September 2011, Febles worked as an executive assistant for Citibank in New York City. Her duties included assisting Salomon with his finances. As part of her employment, Febles had exclusive control over Mr. Salomon’s bank accounts and routinely prepared and negotiated checks on his behalf. Febles was terminated by Citibank in September 2011.Between 2007 and September 2011, at least $1.3 million of Mr. Salomon’s funds went from his bank accounts directly into Febles’ 21 bank accounts, including two accounts that she maintained for her minor son. A review of hundreds of checks written by Febles revealed that the checks had been altered by Febles – after they had been signed by Mr. Salomon – to add additional sums of money. Once issued, Febles negotiated many of these checks, in cash, for the altered amount.
At the same time that more than $900,000 in checks and almost $400,000 cash went from Mr. Salomon’s bank accounts into Febles’ accounts, Febles spent hundreds of thousands of dollars on luxury purchases. These included, in just a five-month period in 2011, $52,720 in cash for a 2011 Range Rover; $34,650 in cash for a Mercedes-Benz; $43,200 in cash for one year’s rent of a three-bedroom home in Clifton, N.J.; and more than $45,000 in cash for six months’ rent on two apartments in Palisades Park, N.J. Febles’ purchases also included more than $115,000 on vacation and travel expenses; $56,000 rent on a four-bedroom home in Mahwah, N.J.; more than $20,000 on other automobile payments; and more than $20,000 on personal expenses, including entertainment, meals, travel, and clothing. During this time, Febles never earned more than $50,000 per year in take-home pay from Citibank.
In addition to the evidence of Mr. Salomon’s money going into Febles’ bank accounts and the evidence of Febles’ expenditures, the evidence at trial also established that Febles transferred hundreds of thousands of dollars that she stole from Mr. Salomon from her accounts into custodial bank accounts that she maintained for her minor son. The jury found that Febles transferred these funds to her son in order to conceal her bank and wire frauds.
In the tax years 2009 and 2010, Febles failed to disclose to the IRS any of the money that she stole from Mr. Salomon. In those two years, she claimed tax refunds of $14,839 and $9,293, respectively. Had Febles disclosed the money that she stole from Mr. Salomon on her tax returns in 2009 and 2010, she would have owed almost $70,000 to the United States in 2009 and more than $200,000 to the United States in 2010.
In addition to the prison term, Judge Martini sentenced Febles to three years of supervised release and ordered forfeiture and restitution of $1,154,911. She was also ordered to surrender $38,000 in cash she had put toward her bail.
U.S. Attorney Fishman credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen in Newark, and special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, with the investigation leading to today’s sentence.
The government is represented by Assistant U.S. Attorneys Aaron Mendelsohn of the Economic Crimes Unit and Evan Weitz of the Asset Forfeiture and Money Laundering Unit of the U.S. Attorney’s Office in Newark.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.stopfraud.gov.
13-316Defense counsel: Edward J. McQuat and Richard Langweber, New York
Foreign National Pleads Guilty to Role in Cocaine ConspiracyRead the Press Release
Victor Manuel Diaz-Lucas, also known as “Victor Raul Cruz-Gutierres,” 31, a citizen of Mexico who most recently resided in Berkeley, MO, entered a plea of guilty on July 25, 2013, to Conspiracy to Distribute and Possess With the Intent to Distribute Cocaine, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today.
Diaz-Lucas had been charged on August 22, 2012, in an eleven-count indictment charging a total of ten individuals with being members of a large drug trafficking organization. Diaz-Lucas, who was only charged in Count 1, is currently scheduled to be sentenced at 10:00 a.m. on November 8, 2013, at which time he faces a potential maximum sentence of ten years to life in prison, followed by a term of supervised release of not less than five years, a $10,000,000 fine, and a $100 special assessment. Diaz-Lucas also agreed to forfeit $1,500,000 to the United States. Diaz-Lucas admitted that he is a citizen of Mexico who is in the United States illegally. He agreed to the entry of a Judicial Order of Removal, which will require him to be deported following the service of his sentence.
According to the Stipulation of Facts which was filed with the Court at the time of the plea, the organization charged in the Indictment was responsible for importing cocaine from Mexico into the United States, where it was taken to Salt Lake City, Utah. From Salt Lake City, the cocaine was transported by members of the conspiracy to the St. Louis Metropolitan area where it was distributed by various members of the organization, including some who operated within the Southern District of Illinois. Proceeds for the sales of the cocaine were then transported back to the leaders of the conspiracy in Salt Lake City.
Of the nine individuals named in the indictment with Diaz-Lucas, six others have entered pleas of guilty; one other has been arrested and are awaiting trial; two are fugitives. The co-defendant not yet convicted is presumed innocent because an indictment is a formal charge against a defendant. Under the law, a defendant is presumed to be innocent of a charge and is entitled to a fair trial at which the Government must prove guilt beyond a reasonable doubt.
Evidence in support of the indictment in this case was obtained in an investigation which was conducted under the auspices of the Organized Crime Drug Enforcement Task Force (OCDETF). The OCDETF initiative is designed to bring federal, state, and local law enforcement agencies and resources together to identify, target and dismantle large national and international drug trafficking organizations. Participating agencies include the Drug Enforcement Administration (DEA), Internal Revenue Service, Criminal Investigations, the U.S. Immigration and Customs Enforcement Office of Homeland Security Investigations (ICE HSI), U.S. Marshal Service, the Granite City Police Department, Fairview Heights Police Department, the Collinsville Police Department, the St. Louis Metropolitan Police Department, the St. Louis County (Missouri) Police Department, the St. Charles County (Missouri) Sheriff's Department, and the Nebraska State Patrol. This case is assigned to Assistant United States Attorney Randy G. Massey for prosecution.
Florida Woman Sentenced for Running Stolen Identity Tax Fraud SchemeRead the Press Release
St. Louis, MO – TANIA HENDERSON of Wesley Chapel, Florida, was sentenced to 144 months in prison for her role in leading a stolen identity tax fraud scheme during 2012. In addition to the term of imprisonment, Henderson was ordered to repay the IRS $835,883 in restitution. She appeared in federal court in St. Louis before United States District Judge Carol E. Jackson.
According to Henderson's plea agreement and other court documents, Henderson stole the identities of more than 400 individuals, many of whom were deceased, and filed fraudulent tax returns using their names and social security account numbers. Henderson pled guilty on April 29, 2013, to one count of theft of government funds and four counts of aggravated identity theft.
Between August and November 2012, Henderson filed 236 fraudulent tax returns from her home in Florida. Using a network of family and friends, she would collect refund checks or prepaid debit cards for the refund amounts and liquidate the proceeds of her scheme. Three of this network, Betty Kirkendoll, Patrina Taylor and Jason Bibbs, have already been prosecuted and sentenced."Stealing identities and filing false tax returns is a serious crime that hurts innocent taxpayers. Today's sentence should serve as a strong warning to those who are considering similar conduct," said Sybil Smith, Special Agent in Charge of IRS-Criminal Investigation.
Although Henderson filed tax returns calling for more than $1.8 million dollars, the IRS was able to intercept nearly $1,000,000 in refunds before they came into Henderson's control.
Henderson’s husband, Dwayne Denard Johnson, also of Wesley Chapel, Florida, has been indicted for theft of government funds and aggravated identity theft and awaits trial in the Eastern District of Missouri. As is always the case, charges set forth in an indictment are merely accusations and do not constitute proof of guilt. Mr. Johnson is presumed to be innocent unless and until proven guilty.
This case was investigated by Internal Revenue Service- Criminal Investigation. Assistant United States Attorney Tom Albus handled the case for the U.S. Attorney’s Office.Five Arrested for Bank Robberies on the Treasure CoastRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Michael B. Steinbach, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, John A. Bolduc, Chief, Port St. Lucie Police Department, Kenneth Mascara, St. Lucie County Sheriff’s Office, J. Michelle Morris, Chief, Sebastian Police Department, Deryl Loar, Sheriff, Indian River Sheriff’s Office, and Sean Baldwin, Chief, Ft. Pierce Police Department, announce the arrest of Anthony Isaac Johnson, 24, of West Palm Beach, Allan Demetrius Bradford, 22, of West Palm Beach, Ivory Lee Robinson, III, 22, of West Palm Beach, Tomaleesha Jeffie Laqua McKeliver, 22, of Ft. Pierce, and Paul Edward Moore, 25, of Green Acres. The five defendants made their initial appearance today before U.S. Magistrate Judge Frank J. Lynch, Jr. in Ft. Pierce and were detained pending trial. A pre-trial detention was set for Friday, August 2, 2013.
The criminal complaint charges the five defendants with violating Title 18, United States Code, Section 1951, conspiracy to obstruct, delay, or affect commerce or the movement of any article or commodity in commerce by robbery (Hobbs Act); and Title 18, United States Code, Sections 924(o) and 924(c), conspiracy to use and carry a firearm during and in relation to a crime of violence. If convicted of the Hobbs Act robbery conspiracy, the defendants face a possible maximum statutory sentence of 20 years in prison. If convicted of the conspiracy to use and carry a firearm during and in relation to a crime of violence, the defendants face a mandatory minimum of seven years, and a possible maximum sentence of life, in prison, consecutive to any other sentence imposed.
According to the criminal complaint, on July 8, 2013, at approximately 9:28 a.m., PNC Bank, located at 4156 Okeechobee Road, Fort Pierce, Florida, was robbed by three black males wearing white clothing and white cloth masks. At least one of the males was armed with a hand gun. All three subjects then fled in a silver mini-van, which was subsequently recovered. Shortly thereafter, law enforcement attempted to conduct a traffic stop of a white Chrysler sedan, operated by a female driver, but the driver failed to pull over and a high speed pursuit ensued. This vehicle was soon disabled near the intersection of Port St. Lucie Boulevard and Aster Road in Port St. Lucie, Florida. Upon execution of a state search warrant on the white Chrysler sedan, a large amount of currency, a semi-automatic handgun, several cellular phones, cloth gloves, and numerous articles of clothing, consistent with what the bank robbers wore during the robbery of the PNC Bank in Fort Pierce, Florida, was recovered. The driver Tomaleesha Jeffie Laqua McKeliver, and the three passengers, Anthony Isaac Johnson, Allan Demetrius Bradford, and Ivory Lee Robinson, III were arrested and transported to the Port St. Lucie Police Department.
The criminal complaint also states that on July 8, 2013, at approximately 9:14 a.m., the PNC Bank, located at 5493 NW St. James Drive, Port St. Lucie, Florida, was robbed by three black males wearing head coverings. At least one of the males was armed with a hand gun. Shortly after two of the males fled the PNC Bank, the third became momentarily trapped inside. He later fled the PNC Bank on foot removing clothing as he fled. A bag containing money was recovered near the PNC Bank, and Paul Edward Moore was arrested nearby, and transported to the Port St. Lucie Police Department.
Mr. Ferrer commended the investigative efforts of the FBI, Port St. Lucie Police Department, St. Lucie County Sheriff’s Office, the Sebastian Police Department and the Ft. Pierce Police Department for their work on this case. The case is being prosecuted by Assistant U.S. Attorney Carmen Lineberger.
A criminal complaint is only an accusation and a defendant is presumed innocent until proven guilty.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Federal Judge Finds Tuscaloosa County Man Guilty of Sexual Exploitation of A Child and Possessing Child PornographyRead the Press Release
TUSCALOOSA – A federal judge today found a Tuscaloosa County man guilty of sexually exploiting a child and possessing child pornography, announced U.S. Attorney Joyce White Vance, FBI Special Agent in Charge Richard D. Schwein Jr. and Tuscaloosa County Sheriff Billy Sharp.
U.S. District Judge L. Scott Coogler found MURRY MALONE BAILEY, 63, guilty on four counts of sexual exploitation of a child and one count of possessing child pornography. The case was tried without a jury before Judge Coogler at the request of the defense.
Evidence at trial showed that on four occasions Bailey induced the child victim, who was 15 years old, to engage in sexually explicit conduct so he could produce video images. For example, the child victim testified about how Bailey coerced and induced her into performing the sexual conduct in a specific room of his home, and the evidence showed how the defendant mounted a camera to record that conduct. Other evidence showed Bailey making sexually explicit comments about what sexual acts he intended to do to the child victim.
No sentencing date has been set.
The maximum penalty for sexually exploiting a child is 30 years in prison and a $250,000 fine, for each count, and carries a statutory minimum penalty of 15 years in prison. The maximum penalty for possessing child pornography is 10 years in prison and a $250,000 fine.
The Tuscaloosa Sheriff’s Office, the Tuscaloosa Police Department, and the FBI investigated the case. Assistant U.S. Attorneys Daniel Fortune and Amanda Wick prosecuted the case.
False Claims Act Judgment Entered Against Washington, DC, Health Care Provider for More Than $17 MillionRead the Press Release
The U.S. District Court for the District of Columbia has entered judgment for more than $17 million against Dr. Ishtiaq Malik and his two companies, Ishtiaq Malik M.D., P.C. and Advanced Nuclear Diagnostics, for submitting false nuclear cardiology claims to federal and state health care programs, the Justice Department announced today. Ishtiaq Malik, a nuclear cardiologist, has practiced in the District of Columbia metropolitan area since 2002.
“Physicians who participate in government health care programs must bill for their services accurately and honestly,” said Stuart F. Delery, Acting Assistant Attorney General for the Civil Division. “The Department of Justice is committed to pursuing those physicians who seek financial gain at the expense of taxpayer-funded programs.”
The government’s allegations focused on Dr. Malik’s inappropriate claims for myocardial perfusion studies, commonly referred to as nuclear stress tests. These diagnostic imaging studies determine whether a patient has heart disease due to inadequate blood flow to the heart muscles. The test is usually performed in two separate phases: stress and rest. The two phases, which can be conducted on the same day or separate days, must be coded and submitted as one test. The government alleged that, contrary to these requirements, Dr. Malik and his companies double-billed for multi-day nuclear stress test studies.
“This doctor fraudulently diverted critical resources from government health care programs, contributing to the rising cost of health care for all Americans,” said Ronald C. Machen Jr., U.S. Attorney for the District of Columbia. “This lawsuit was designed to hold the doctor to account for bilking the taxpayer. We will do everything in our power to obtain every cent of the $17 million this doctor now owes the American people.”
The government alleged that Dr. Malik submitted false claims to Medicare, District of Columbia Medicaid, Maryland Medicaid, TRICARE and the Federal Employees Health Benefits Plan. In addition, the government alleged that Dr. Malik and his companies billed under codes that did not apply to the nuclear stress test studies he administered and billed for services already included in the payment for nuclear stress test codes, such as intravenous injections, drug infusions, 3D rendering and drug administration. He and his companies also allegedly billed for services not performed.
“Federal employees deserve health care providers who meet the highest standards of ethical and professional behavior,” said Patrick E. McFarland, Inspector General of the U.S. Office of Personnel Management. “This judgment reminds health care providers that they must observe those standards and reflects the commitment of federal law enforcement organizations to pursue improper and illegal conduct that places the health care system at risk.”
“Dr. Malik fraudulently charged for his services and taxpayers deserve protection from such scams,” said Daniel R. Levinson, Inspector General of the U.S. Department of Health and Human Services. “OIG agents, working with other law enforcement agencies, conducted interviews, gathered records and analyzed data to conclude a successful investigation and bring the doctor to justice.”
The government filed suit against Dr. Malik and his two companies under the False Claims Act, which allows the government to recover three times its damages, plus penalties, from those who submit false claims for federal funds. The state of Maryland and the District of Columbia subsequently joined the lawsuit under their respective state false claims acts.
This civil lawsuit illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by Attorney General Eric Holder and Health and Human Services Secretary Kathleen Sebelius. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $14.7 billion through False Claims Act cases, with more than $10.7 billion of that amount recovered in cases involving fraud against federal health care programs.
This investigation was a cooperative effort among the Commercial Litigation Branch, Civil Division, Department of Justice; the U. S. Attorney’s Office for the District of Columbia; the Maryland Attorney General’s Office; and the Attorney General’s Office for the District of Columbia. The Department of Health and Human Services’ Office of the Inspector General and the Office of Personnel Management’s Office of the Inspector General assisted in the investigation. The lawsuit is United States of America et al. v. Malik et al., No. 1:12-01234-RLW (D.D.C.).
Elmira Woman Indicted for Embezzling Workers Pension and Health Care MoneyRead the Press Release
ROCHESTER, N.Y.-- U.S. Attorney William J. Hochul, Jr. announced today that a federal grand jury in Rochester has returned a three count indictment charging Linda Riner, 62, of Elmira, N.Y., with embezzling money from Local Laborer’s 1358 employee pension and welfare benefit funds and lying to federal investigators about this matter. Each charge carries a maximum sentence of five years in prison, a fine of $250,000, or both.
Assistant U.S. Attorney John J. Field, who is handling the case, stated that Riner was the Funds Administrator of the Local Laborer’s 1358 employee benefit plans, and owed those plans a fiduciary duty. Instead of honoring that duty, the defendant took advantage of her position to pay herself and her staff thousands of dollars in “Christmas bonuses” without authorization. In addition, when interviewed by Special Agents with the Federal Bureau of Investigation and Department of Labor about these bonuses, Riner sought to mislead investigators by claiming that the payments had been approved. In total, the defendant stole approximately $9,000 from the plans.
The indictment is the result of an investigation by Special Agents of the Federal Bureau of Investigation, under the direction of Acting Special Agent in Charge Richard M. Frankel and the Department of Labor, under the direction of Special Agent in Charge Robert Lapina.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.Drug and Gun Charges FiledRead the Press Release
Nicholas Suozzo, 32, of Philadelphia, PA, was charged by Indictment with nine counts, including: possession of unregistered firearms, which included machine guns and explosive devices; distribution and possession with intent to distribute marijuana within a school zone; and possession of firearms in furtherance of a drug trafficking crime, announced United States Attorney Zane David Memeger.
If convicted the defendant faces a maximum possible sentence of life imprisonment, a mandatory consecutive 5 years imprisonment, at least 4 years up to lifetime supervised release, a $770,000 fine, and $600 special assessment.
The case was investigated by the Philadelphia Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and is being prosecuted by Special Assistant United States Attorney Joseph Whitehead, Jr.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525District Man Pleads Guilty to Second-Degree Murder While Armed in 2011 Strangling at Northeast Washington Park-Victim Was Stabbed, Choked and Robbed in Late-Night Attack-Read the Press Release
WASHINGTON – Mark Coates, 28, of Washington, D.C., pled guilty today to a charge of second-degree murder while armed for the December 2011 slaying of a man at a park in Northeast Washington, U.S. Attorney Ronald C. Machen Jr. announced.
Coates pled guilty in the Superior Court of the District of Columbia. The Honorable Herbert B. Dixon, Jr. scheduled sentencing for Sept. 23, 2013.
According to the government’s evidence, between 11 p.m. on Friday, Dec. 30, 2011, and 1 a.m. on Saturday, Dec. 31, 2011, Coates and an accomplice forced the victim, Leroy Studevant, 56, into the Marvin Gaye Park in the 4200 block of Hunt Place NE, where they punched and kicked him.
During the assault, Mr. Studevant managed to escape, and he ran across the park. However, Coates and the accomplice chased Mr. Studevant through the park, until Coates ultimately cut off Mr. Studevant’s flight path. Using a knife, Coates and his accomplice then stabbed Mr. Studevant. After forcing Mr. Studevant to the ground, Coates and his accomplice kicked him, and Coates was able to unhook and remove Mr. Studevant’s belt from around his waist. The belt was placed around Mr. Studevant’s neck as a noose, and he was choked with the belt until he no longer resisted. During the altercation, a wallet and cell phone were removed from Mr. Studevant’s pockets. Coates and his accomplice split the money in the wallet.
An autopsy determined that Mr. Studevant died as a result of the strangling and assault in the park. The reason for the attack was because the victim would not share his cigarettes.
In announcing the plea, U.S. Attorney Machen praised the work of the detectives, officers, and crime scene technicians who investigated the case for the Metropolitan Police Department. He also commended the efforts of those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialists Kendra Johnson, Ethel Nobel, Marian Russell, and Sandra Lane; Lead Paralegal Specialist Sharon Newman; Victim/Witness Advocate Tamara Ince; Victim Witness Security Specialist Katina Adams-Washington; Investigator Nelson Rhone; and Intelligence Specialists Lawrence Grasso, Zachary McMenamin, Shannon Alexis, and Sharon Johnson. Finally, U.S. Attorney Machen recognized the efforts of Assistant U.S. Attorney Kimberley Nielsen and Assistant U.S. Attorney Robert Feitel, who investigated and prosecuted the case.
13-267Department of Justice Announces Agreement with Liechtenstein Bank to Pay $23.8 Million to Resolve Criminal Tax InvestigationRead the Press Release
Kathryn Keneally, the Assistant Attorney General for the Tax Division of the Department of Justice, Preet Bharara, the U.S. Attorney for the Southern District of New York and Richard Weber, the Chief of the Internal Revenue Service, Criminal Investigation (IRS-CI), announced today that Liechtensteinische Landesbank AG, a bank based in Vaduz, Liechtenstein (LLB-Vaduz), has agreed to pay more than $23.8 million to the United States and entered into a non-prosecution agreement (NPA) with the U.S. Attorney’s Office for the Southern District of New York. The NPA provides that LLB-Vaduz will not be criminally prosecuted for opening and maintaining undeclared bank accounts for U.S. taxpayers from 2001 through 2011, when LLB-Vaduz assisted a significant number of U.S. taxpayers in evading their U.S. tax obligations, filing false federal tax returns with the IRS and otherwise hiding accounts held at LLB-Vaduz from the IRS. The NPA requires LLB-Vaduz to forfeit $16,316,000, representing the total gross revenues that it earned in maintaining these undeclared accounts, and to pay $7,525,542 in restitution to the IRS, representing the approximate unpaid taxes arising from the tax evasion by LLB-Vaduz’s clients. The NPA applies only to LLB-Vaduz and not to any of its subsidiaries or any individuals. LLB-Vaduz has decided to close its wholly-owned Swiss subsidiary, Liechtensteinische Landesbank (Switzerland) Ltd. and has also decided to sell another wholly-owned subsidiary, Jura Trust AG.
Assistant Attorney General Kathryn Keneally stated “this non-prosecution agreement addresses the past wrongful conduct of LLB-Vaduz in allowing U.S. taxpayers to evade their legal obligations through the use of undisclosed Liechtenstein bank accounts, while also acknowledging the extraordinary efforts of the bank in bringing about significant changes in Liechtenstein law. As a result of new Liechtenstein legislation, U.S. taxpayers who thought that they had obtained the benefit of Liechtenstein’s tax secrecy laws have learned that their bank files were turned over on the request of the Department of Justice.”
“With this agreement, one of Liechtenstein’s most important banks has put an era behind it. Today’s agreement with Liechtensteinische Landesbank AG reflects the unprecedented nature of the bank’s cooperation, and serves as another reminder for U.S. tax cheats who mistakenly believe that their offshore bank will never turn over their account files to U.S. authorities. To them we say, you can hide, but not forever”, said U.S. Attorney Preet Bharara.
“In 2008, Liechtensteinische Landesbank AG began requiring all U.S. taxpayers with accounts at LLB-Vaduz to declare their income. In addition, Liechtenstein’s Parliament amended their national law on tax matters to make easier the identification to the United States of non-compliant taxpayers. Today’s action sends a strong message to those Americans who hide their true income from the IRS. It's time to come clean and pay your fair share of taxes like law-abiding citizens do every day”, said IRS-CI Chief Weber.
The NPA recognizes that, in 2008, before the IRS and the U.S. Attorney’s Office began the investigation, LLB-Vaduz voluntarily implemented a series of remedial measures to stop assisting undeclared U.S. taxpayers in evading federal income taxes. The NPA further recognizes LLB-Vaduz’s extraordinary cooperation in the form of its support and assistance in 2012 to obtain a change in law by the Liechtenstein Parliament that permitted the Department of Justice to request and obtain the bank files of non-compliant U.S. taxpayers from Liechtenstein without having to identify the taxpayers by name (the “2012 Law”).
Pursuant to such a request by the Department of Justice, Liechtenstein transferred to the Department of Justice more than 200 files of U.S. taxpayers who held undeclared accounts at LLB-Vaduz, directly or through sham corporations, foundations or trusts (“structures”). In addition, pursuant to the 2012 Law, the Department of Justice has submitted a second request to the Liechtenstein government for records relating to various Liechtenstein firms that provided trust administration and other fiduciary services that enabled U.S. taxpayers to hold undeclared accounts through structures at banks in Liechtenstein, Switzerland and elsewhere.
As part of the NPA, LLB-Vaduz admitted various facts concerning its wrongful conduct and the remedial measures that it took to cease that conduct. Specifically, LLB-Vaduz admitted that it knew certain U.S. taxpayers were maintaining undeclared accounts at LLB-Vaduz in order to evade their U.S. tax obligations, in violation of U.S. law. In addition, LLB-Vaduz admitted that it knew of the high probability that other U.S. taxpayers who held undeclared accounts did so for the same unlawful purpose because significant numbers of U.S. taxpayers employed structures to hold their accounts, instructed LLB-Vaduz to use code names or numbers to refer to them on account statements and other bank documents, instructed LLB-Vaduz not to mail such documents to them in the United States, and instructed LLB-Vaduz not to disclose their identity to the IRS, among other things. At the end of 2006, LLB-Vaduz held more than $340 million of undeclared assets on behalf of U.S. taxpayers in more than 900 accounts.
As part of the NPA, LLB-Vaduz has agreed to forfeit $16,316,000 to the United States, representing LLB-Vaduz’s total gross revenues from services that it provided to undeclared U.S. taxpayers from 2001 through 2011. In connection with this forfeiture, LLB-Vaduz has agreed not to contest a civil forfeiture action filed by the United States. That action was filed on July 30, 2013, in U.S. District Court for the Southern District of New York and assigned to U.S. District Judge Katherine P. Failla.
The U.S. Attorney’s Office entered into the NPA based on factors including:
· LLB-Vaduz’s voluntary implementation of various remedial measures beginning in June 2008, before the investigation of its conduct began;
· LLB-Vaduz’s voluntary cooperation with this Office and the government of Liechtenstein after becoming aware of this Office’s investigation;
· LLB-Vaduz’s willingness to continue to cooperate with this Office and the IRS to the extent permitted by applicable law;
· LLB-Vaduz’s substantial support for the 2012 Law, which has already permitted the production to the Department of Justice of more than 200 account files of U.S. taxpayers who held undeclared accounts at LLB-Vaduz;
· LLB-Vaduz’s representation, based on an investigation by external counsel, that the misconduct under investigation did not, and does not, extend beyond that described in the statement of facts;
The NPA requires LLB-Vaduz to continue to cooperate with the United States for at least three years from the date of the agreement. The NPA applies only to LLB-Vaduz and does not apply to any of its subsidiaries, including its Swiss subsidiary,or to any individuals. In the event that LLB-Vaduz violates the NPA, the U.S. Attorney’s Office may prosecute LLB-Vaduz.
U.S. Attorney Bharara thanked the IRS for its outstanding work in the investigation of this matter and the Tax Division of the Department of Justice for its assistance in the investigation. Bharara also thanked the Liechtenstein Tax Authority and the Liechtenstein Public Prosecutor’s Office for their assistance in this matter.
This investigation is being overseen by the U.S. Attorney’s Office’s Complex Frauds Unit. Assistant U.S. Attorneys David B. Massey, Daniel W. Levy and Jason H. Cowley are in charge of the matter.
Related Materials:
United States v. 15,899,000 in United States Currency
Verified Complaint (PDF)
Agreement Letter (PDF)
Council Bluffs, Iowa Resident Sentenced to Four Months in Prison for Interstate Transportation of Stolen PropertyRead the Press Release
COUNCIL BLUFFS, IA - On July 30, 2013, Joseph Patrick Connor, a 40 year-old resident of Council Bluffs, Iowa, was sentenced by United States District Court Judge John Jarvey to four months in prison, followed by three years of supervised release, for his role in transporting stolen truck repair equipment from Omaha, Nebraska, to Council Bluffs, Iowa. Judge Jarvey also ordered Connor to pay restitution in the amount of $30,000.
On March 18, 2013, Connor pled guilty to the charge of interstate transportation of stolen property. The charge was the result of an investigation conducted by several law enforcement agencies into the theft of tools from Hatcher Mobile Services of Omaha, Nebraska, taken during a burglary committed on March 20, 2012. Many of the tools taken during the burglary were recovered from the back of a straight truck found in Council Bluffs, Iowa, by the Iowa State Patrol. The value of the tools taken during the burglary was estimated to be over $100,000.
The investigation was conducted by the Omaha Police Department, Iowa State Patrol, the Pottawattamie County Attorney’s Office, and the Federal Bureau of Investigation. The case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
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Convicted Santa Cruz Sex Offender Pleads Guilty to Possessing Child PornographyRead the Press Release
SAN JOSE – Steven Hibbett pleaded guilty in federal court in San Jose yesterday to possession of child pornography, United States Attorney Melinda Haag announced.
In pleading guilty, Hibbett, 59, of Santa Cruz, California, admitted that he downloaded child pornography from the Internet onto a laptop computer that law enforcement seized from a Santa Cruz storage locker. Hibbett also admitted that he knowingly possessed over 600 images of child pornography, including images of prepubescent minors and images portraying sadistic or masochistic conduct. Hibbett admitted that he possessed these images of child pornography while on state probation for a prior 2009 California state felony conviction for possessing child pornography.
Hibbett was originally charged by complaint and has been in custody since his initial appearance in federal court on April 18, 2013. On July 25, 2013, Hibbett was charged with an Information alleging possession of child pornography in violation of 18 U.S.C. § 2252(a)(4)(B). Hibbett pleaded guilty to the sole count of the Information and agreed to receive a 10 year prison sentence followed by 5 years of supervised release.
Hibbett’s sentencing is scheduled for October 21, 2013, at 1:30 p.m. before The Honorable Edward J. Davila, U.S. District Court Judge, in San Jose. Since Hibbett has a prior conviction for a child pornography offense, he faces a mandatory minimum sentence of 10 years imprisonment and a maximum statutory penalty of 20 years imprisonment, a $250,000 fine, restitution, and registration as a sex offender. However, any sentence following conviction will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant U.S. Attorney Joseph Fazioli is prosecuting the case with the assistance of Laurie Worthen. The prosecution is a result of an investigation by the Federal Bureau of Investigation and the Santa Cruz Police Department.
Convicted Felon Sentenced for Illegal Re-entry After DeportationRead the Press Release
Gulfport, Miss. – Juan Carlos Rocha-Aguilar, 33, a citizen of Mexico, was sentenced today by U. S. District Judge Sul Ozerden to serve 19 months in federal prison followed by three years of supervised release for illegal re-entry of a deported alien after being convicted of a felony, U.S. Attorney Gregory K. Davis announced.
In February, 2013, Juan Carlos Rocha-Aguilar a/k/a Juan C. Rocha a/k/a Juan Carlos Rocha a/k/a Juan Rocha, was identified by ICE agents as a previously removed alien, having been deported from the United States on Sept. 3, 2005, and on May 31, 2002, with prior felony convictions.
This case was investigated by agents from Homeland Security Investigations and prosecuted by Assistant U. S. Attorney Andrea Jones.
###If you believe you have been a victim of fraud from a person or an organization soliciting relief funds on behalf of storm victims, contact the National Center for Disaster Fraud toll free at:
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Collin County, Texas, Man Admits Embezzling Approximately $1 Million from Employer, Hudson Advisors, LLC, in Wire Fraud SchemeRead the Press Release
DALLAS — Steven Chen Yu, 39, of Allen, Texas, appeared before U.S. Magistrate Judge Paul D. Stickney this morning and pleaded guilty to an information charging wire fraud in connection with his attempt to embezzle approximately $1 million from his employer, Hudson Advisors, LLC and its global subsidiaries (Hudson). Yu, who remains on bond, faces a statutory maximum penalty of 20 years in federal prison, a $250,000 fine or twice any pecuniary gain to Yu or loss to the victim(s) and restitution. A sentencing date was not set. Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
Hudson was a globally integrated asset management company that performed due diligence and analysis, asset management and other support services for Lone Star Funds, a leading private equity firm that invested globally in distressed assets. Hudson employed approximately 800 professionals in the U.S. and had affiliate offices in Europe, Canada and Japan. Hudson’s main offices were in Dallas.
Hudson maintained a private client department that employed several private client managers. It was responsible for providing accounting and bill payment services for Hudson owner J.G. As part of his duties, Yu was authorized by Hudson to access all of J.G.’s personal financial information.
From September 2009 through March 2012, according to documents filed in the case, Yu engaged in several fraudulent acts which enabled him to embezzle substantial funds belonging to J.G. For example, in September – October 2009, Yu fraudulently re-submitted duplicate invoices for legitimate repair work that had been done on J.G.’s boat, knowing that the invoices had already been paid. Yu substituted his own personal bank account information, and in this manner, was able to fraudulently divert and embezzle $150,572 from J.G.’s accounts.
In another scheme, and in a similar manner, on December 1, 2009, Yu defrauded J.G. by also using duplicate invoices for landscaping work that had previously been done on J.G.’s personal residence in Massachusetts. Yu was able to fraudulently divert and embezzle more than $69,000 in funds from one of J.G.’s trust accounts for duplicate payment on the landscaping work. However, later in December 2009, Yu fraudulently caused the more than $69,000 to be deposited back into the account from which they had been diverted prior to Hudson becoming aware of any of Yu’s unlawful activities in connection with the fraudulent diversion or embezzlement of funds.
As part of a larger scheme, beginning in 2009 and continuing through March 2012, Yu fraudulently used and diverted J.G.’s funds which Yu used to make advance “estimated tax payments” for Yu’s benefit in connection with his own future state income taxes due in Massachusetts. When Yu filed his personal income tax returns with Massachusetts, he claimed that he owed no taxes and requested Massachusetts pay him a complete refund of all the estimated tax payments he had made to the state with funds he had stolen from J.G.
During the period from about 2009 through March 2012, as part of his scheme to defraud, Yu attempted to steal and embezzle a total of approximately $1,292,000 from Hudson owner J.G.
The investigation was conducted by the FBI. Assistant U.S. Attorney David L. Jarvis is in charge of the prosecution.
Charleston Pill Dealer Who Pawned Pistol Pleads Guilty to Federal ChargeRead the Press Release
CHARLESTON – A Charleston pill dealer who illegally possessed a firearm in January 2013 pleaded guilty today to a federal charge, announced U.S. Attorney Booth Goodwin. Anthony Dawson, Jr., 30, entered a guilty plea to being a felon in possession of a firearm before U.S. District Judge John T. Copenhaver, Jr. On January 3, Dawson possessed a 9-millimeter pistol and later pawned the firearm near Dunbar, W.Va., in exchange for $400.
Dawson was previously convicted of conspiracy to deliver oxycodone in June 2009 in the Circuit Court of Kanawha County. The defendant did not have his rights to possess a firearm restored.
Dawson faces up to 10 years in prison and a $250,000 fine when he is sentenced on October 29, 2013.
The Charleston Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives conducted the investigation. Assistant United States Attorney Erik S. Goes is in charge of the prosecution.This case is being prosecuted 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.
This case is also being prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers in communities across the Southern District.