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Thursday 27 June 2013
Justice Department Reaches Settlement with National Retailer to Resolve Immigration-Related Unfair Employment PracticesRead the Press Release
The Justice Department announced today that it has reached an agreement with Macy’s Retail Holdings and other Macy’s entities (Macy’s) resolving allegations that the company violated the anti-discrimination provision of the Immigration and Nationality Act (INA). Macy’s employs approximately 180,000 employees in the United States.
The investigation was initiated based on several calls to the Justice Department’s Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC) worker hotline regarding potential immigration-related unfair employment practices. Based on the investigation, the department determined that Macy’s engaged in unfair documentary practices against work-authorized immigrant employees during the employment eligibility reverification process and that some employees suffered economic harm through lost work or seniority as a result. The INA’s anti-discrimination provision prohibits employers from treating workers differently in the employment eligibility verification or reverification process by demanding more or different documents, or by limiting the worker’s choice of documents, based on an individual’s immigration status or national origin.
According to the settlement agreement, Macy’s agrees to revise its employment eligibility reverification policies and procedures and to provide training to its human resources personnel across the country on the INA’s anti-discrimination provision. Macy’s also agrees to pay $175,000 in civil penalties to the United States, and to create a $100,000 back pay fund to compensate any individuals who suffered lost wages or loss of seniority as a result of its practices. Under the agreement, Macy’s employment eligibility verification practices will be subject to monitoring by the department and reporting requirements for a period of two years.
“Employers must ensure that they follow correct procedures during the reverification of employment authorization of non-U.S. citizens,” said Gregory Friel, Deputy Assistant Attorney General for the Civil Rights Division. “Given the size of their workforce, national employers are particularly encouraged to evaluate their policies and practices and make use of the division’s no-cost technical assistance to ensure compliance with the INA’s anti-discrimination provision.”
OSC is responsible for enforcing the anti-discrimination provision of the INA. The case was handled by Liza Zamd and Ronald Lee, OSC trial attorneys. For more information about protections against employment discrimination under the immigration laws, call the OSC’s worker hotline at 1-800-255-7688 (1-800-237-2525, TTY for hearing impaired), call the OSC’s employer hotline at 1-800-255-8155 (1-800-362-2735, TTY for hearing impaired), sign up for a no-cost webinar at www.justice.gov/about/osc/webinars.php, email [email protected] or visit the website at www.justice.gov/crt/about/osc.Justice Department Files Lawsuit Against the Reading, Pa. Parking Authority for National Origin Discrimination and RetaliationRead the Press Release
The Justice Department announced today the filing of a lawsuit against the Reading Parking Authority in the city of Reading, Pa., alleging that the Reading Parking Authority discriminated against former employee Henry Perez, as well as other current and former employees, in violation of Title VII of the Civil Rights Act of 1964 by subjecting them to harassment based upon their national origin. According to the complaint, after Perez complained about the harassment, he was subjected to retaliation, also in violation of Title VII. Title VII is a federal statute that prohibits discrimination on the basis of race, color, national origin, sex and religion and prohibits retaliation against an employee who opposes an unlawful employment practice or because the employee has made a charge or participated in an investigation, proceeding or hearing under the Act.
The suit, filed in the U.S. District Court for the Eastern District of Pennsylvania, alleges that these employees were subjected to pervasive ethnic slurs, offensive comments and threats of physical harm by their co-workers and supervisors beginning as early as 2007 and continuing over a period of years. The complaint further alleges that, despite timely complaints about the harassment by the workers to their supervisors, the Reading Parking Authority failed to take meaningful steps to stop the harassment, prevent further harassment or discipline the harassers but, instead, disciplined Perez because his complaints of discrimination were offensive to his co-workers. Through this lawsuit, the United States seeks declarative and injunctive relief requiring the Reading Parking Authority to develop and implement policies that prevent its employees from being subjected to harassment based upon national origin and retaliation, as well as monetary damages for the victims of the employer’s discriminatory actions.
“No one should have to endure unlawful harassment due to their national origin or retaliation for speaking out against such discrimination,” said Jocelyn Samuels, Principal Deputy Assistant Attorney General for the Civil Rights Division. “Through our partnership with the EEOC, the Civil Rights Division continues to vigorously enforce the nation’s laws barring discrimination in employment and to work to realize the promise of equal employment opportunity.”
Perez filed a charge of discrimination and retaliation with the Equal Employment Opportunity Commission (EEOC), whose Philadelphia District Office investigated the matter, determined there was reasonable cause to believe that discrimination and retaliation had occurred, and referred the matter to the Department of Justice.
“The EEOC is committed to ensuring that employees are not subjected to unlawful discrimination and harassment based on their national origin. Employers must stop cruel and humiliating victimization of vulnerable employees when it is brought to their attention, instead of taking adverse action against them," said EEOC District Director Spencer H. Lewis Jr., of the EEOC’s Philadelphia District Office. “Our close collaboration with the Department of Justice is vital to ensuring that workplaces are free from bias.”
The continued enforcement of Title VII has been a priority of the Justice Department’s Civil Rights Division. Additional information about the work of Civil Rights Division is available on its website at www.usdoj.gov/crt/emp/index.htmlInformational: Federal Court ArraignmentRead the Press Release
The United States Attorney's Office announced that during a federal court session in Billings, on June 27, 2013, before U.S. Magistrate Judge Carolyn S. Ostby, the following individual was arraigned:
TYE DUSTIN ALBRIGHT, a 41-year-old resident of Billings, appeared on charges of conspiracy to distribute methamphetamine, possession with intent to distribute methamphetamine the intent to distribute methamphetamine, and distribution of methamphetamine. He is currently detained. If convicted of these charges, ALBRIGHT faces possible penalties of a mandatory minimum of 10 years in prison and could be sentenced to life, a $10,000,000 fine, and 5 years supervised release. Assistant U.S. Attorney Lori Harper Suek is the prosecutor for the United States. The investigation was conducted by the Billings Drug Task Force.
The defendant pled not guilty to the charges.
The charge, an indictment, information or complaint, is merely an accusation and all persons named as defendants are presumed innocent until proven guilty. A pre-trial conference and a trial date will be set and the United States will be required to prove the allegations set forth in the indictment beyond a reasonable doubt.
Idaho Falls Apartment Owner Sentenced for Release of Asbestos Air PollutantRead the Press Release
POCATELLO – U.S. Attorney Wendy J. Olson announced that Tyler Harwood, 30, of Idaho Falls, was sentenced yesterday to one year probation for violating the Clean Air Act by negligently releasing a hazardous air pollutant. U.S. Magistrate Judge Ronald E. Bush also fined Harwood $250, and ordered him to take a class for property owners on following EPA guidelines. Harwood pleaded guilty on April 25, 2013.
According to the court documents, Harwood arranged for and caused a boiler wrapped in asbestos material to be removed from the basement of his “D Street Apartments.” During the dismantling and removal of the boiler, residents of the apartment building were exposed to powdered air-borne asbestos dust released into the ambient air of the apartment building.
“Exposure to asbestos can cause cancer and serious respiratory illness,” said Tyler Amon, Special Agent-in-Charge of EPA's Office of Criminal Enforcement. “Cutting corners when it comes to handling asbestos is not just a health hazard, but in this case was a criminal act that put people at risk.”
The case was investigated by agents of the U.S. Environmental Protection Agency.
Hundreds of Youths Attend Third Annual Anti-Violence Summit Led by U.S. Attorney’s Office and Community Partners- U.S. Attorney Machen: “Your Future Is Your Responsibility”-Read the Press Release
WASHINGTON – More than 500 youths gathered at Friendship Collegiate Academy in Northeast Washington today for a summit sponsored by the U.S. Attorney’s Office for the District of Columbia that featured presentations about issues facing young people here and nationwide, including bullying, sexual assaults, street gangs, and drug abuse.
U.S. Attorney Ronald C. Machen Jr. and other speakers addressed the summit’s theme of “Breaking the Silence on Youth Violence.” The free event also included workshops for older and younger youth, a dance-off, and entertainment from a variety of performers, including nationally known recording artist Marcus Canty.
“You must protect your future at all times,” U.S. Attorney Machen said in his opening remarks. “Your future is your responsibility and no one else’s.”
U.S. Attorney Machen talked about the importance of making good decisions, warning “Never let somebody without a future take yours away.” He urged the youths, ages 8 through 18, to stay out of bad situations, act with integrity, and work hard to achieve long-term goals.
“You have to ask yourself, ‘are you willing to stand up for what you believe in? You can be a voice of positive change,” U.S. Attorney Machen declared.
This was the office’s third annual Youth Summit, which assembles young people from under-served neighborhoods in the District of Columbia to discuss the most pressing public safety challenges facing their communities. Each of the previous summits also drew hundreds of students. For today’s event, youths began arriving in the morning at Friendship Collegiate Academy, 4095 Minnesota Avenue NE, and remained well into the afternoon.
This year’s summit was organized with help from the Project Safe Neighborhoods Task Force, the East River Family Strengthening Collaborative, and law enforcement and community partners. The goal of the Youth Summit is to reach out to area youth on current public safety topics in an informative and inspiring way.
Several collaborative partners, including the Columbia Heights Shaw/Family Collaborative, the District of Columbia Department of Health, the D.C. Rape Crisis Center, Street Wize Foundation, and the National Center for Missing and Exploited Children, joined together to present the day’s programs. Assistance was provided by the Metropolitan Police Department (MPD) and other District of Columbia government agencies.
The youth summit is one in a series of community events sponsored by the U.S. Attorney’s Office for the District of Columbia, including town hall meetings, crime prevention presentations, and various outreach programs for people of all ages.
13-231Hearing Scheduled for Professional Hunter Accused of Violating Federal ProbationRead the Press Release
KANSAS CITY, KAN. – A professional hunter from Tennessee is set for a hearing in federal court today on a government motion accusing him of hunting in violation of his probation, U.S. Barry Grissom said today.
William “Spook” Spann, 50, Dickinson, Tenn, was sentenced in February to three years on supervised release for a misdemeanor Lacey Act violation in Kansas. He pleaded guilty to transporting across state lines a white-tailed deer that was unlawfully taken in Stafford County, Kan. As part of the probation he was prohibited from hunting for six months, admonished not to commit any further federal crimes and ordered to pay a $10,000 fine and $10,000 restitution.
On June 10, the federal probation office in Kansas filed a petition alleging Spann violated his probation by hunting in Tennessee and violating a Tennessee law against baiting wildlife. In court documents, Spann is alleged to have been caught on surveillance cameras hunting in Tennessee. Agents also monitored his use of social media. They found pictures on his Facebook page of Spann dressed in camouflage and posing with other hunters next to harvested turkeys. Although Spann is not accused of shooting a turkey, according to court documents he hunted by calling turkeys, carrying hunting equipment, carrying dead turkeys and placing feed as bait.
The government is proposing Spann have his probation revoked and he be ordered to serve 90 days in jail.
The U.S. Fish and Wildlife Services and Tennessee Wildlife Resource Agency investigated. Assistant U.S. Attorney Chris Oakley is prosecuting.
In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.
Haitian Native Admits to Running Ponzi SchemeRead the Press Release
PHILADELPHIA - Constant Damas, 45, of Philadelphia, Pennsylvania, pleaded guilty today to two counts of wire fraud in connection with a “Ponzi” scheme that defrauded more than 20 investors out of more than $1 million, announced United States Attorney Zane David Memeger. A sentencing hearing is scheduled for September 30, 2013.
Between 2007 through the end of 2012, Damas, who was an account manager at Coca-Cola Company, misrepresented to various individuals, including family members and friends in his Haitian community, that he was an investment manager at Coca-Cola. He told his victims that, through this position, he could invest their money in Coca-Cola’s investment opportunities. In fact, Damas did not hold this position and no such opportunities existed. To entice his victims, Damas often made the following false representations to them: he would collect a sum of money from the victims as their “principle” investment; the victims would receive an interest payment of a certain amount every month; and they could receive their principle payment upon request. Damas, however, did not return the full “principle” investment amount back to his victims, and many of the victims did not receive any of their funds back or any interest payments. Upon his arrest in February 2013, Damas admitted to federal agents that this was a “scam business.”
Damas faces a maximum possible sentence of 40 years in prison, a three-year period of supervised release, a $500,000 fine, a $200 special assessment, and the imposition of full restitution.
The case was investigated by the Federal Bureau of Investigation and Immigration and Customs Enforcement Homeland Securities Investigations. It is being prosecuted by Assistant United States Attorney Patrick J. Murray.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Gwynn Oak Man Pleads Guilty to Fraudulently Obtaining Social Security and Veterans BenefitsRead the Press Release
Baltimore, Maryland – Dwight McCloud Newman, age 63, of Gwynn Oak, Maryland pleaded guilty today to Title II program fraud.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Michael McGill of the Social Security Administration (SSA) - Office of Inspector General, Philadelphia Field Division; and Inspector General Kim R. Lampkins, Special Agent in Charge, Mid Atlantic Field Office, Washington, DC of the U.S. Department of Veterans Affairs (VA).
According to his plea agreement, Newman’s father received Social Security retirement and Veteran disability benefits at the time of his death on January 7, 2007. The benefits were directly deposited into a checking account in which Newman and his father were joint account holders. Newman failed to notify SSA or VA of his father’s death. As a result, from January 7, 2007 to November 3, 2011, SSA deposited $62,110 into the checking account, and VA deposited $16,995 from January 7, 2007 to November 30, 2012. Newman withdrew or spent substantially all of these benefits for his own benefit.
Newman faces a maximum sentence of five years in prison and a $250,000 fine for Title II program fraud. Newman agrees to pay restitution of $79,105, including $7,000 to be paid at the time of sentencing. U.S. District Judge William D. Quarles, Jr. scheduled sentencing for October 15, 2013 at 1:00 p.m.
United States Attorney Rod J. Rosenstein praised the SSA–OIG and VA-OIG for their work in the investigation. Mr. Rosenstein thanked Special Assistant U.S. Attorney Paul K. Nitze of the SSA, who is prosecuting the case.
Greeneville Physician and Wife Indicted for Misbranded Drugs and Health Care FraudRead the Press Release
Clinic obtained unapproved foreign drugs for three years
GREENEVILLE, Tenn. – A federal grand jury in Greeneville returned an indictment on June 11, 2013, against Dr. Anindya Kumar Sen, 64, his wife, Patricia Posey Sen, 65, and their business, East Tennessee Cancer & Blood Center, P.C. (ETCBC), all of Greeneville, Tenn., for introduction of misbranded drugs with intent to defraud and mislead, importing drugs contrary to law, conspiracy to commit those offenses, and conspiracy to commit health care fraud.
Dr. and Mrs. Sen appeared in court on June 27, 2013, before U.S. Magistrate Judge Dennis H. Inman and pleaded not guilty. They were released pending trial, which has been set for September 4, 2013 in U.S. District Court, in Greeneville.
According to the indictment on file with the U.S. District Court, Sen was the owner and managing physician of ETCBC, a cancer clinic with locations in Greeneville and Johnson City; Posey was practice manager for the clinic. Beginning in April 2009, they began obtaining foreign drugs not approved for use by the Food & Drug Administration (FDA) in the United States. The drugs were “misbranded,” as defined in the Food, Drug and Cosmetic Act, because, among other things, the drugs had not been manufactured at facilities registered with the FDA and the drugs’ packaging contained foreign languages. The Sens purchased over $3 million in unapproved drugs which were administered to patients at ETCBC. Claims were then submitted to Medicare, TennCare, and other health care programs falsely representing that FDA-approved drugs had been administered.
If convicted, the Sens face terms of up to 20 years in prison on the health care charge and each of the unlawful importation charges, along with fines of up to $250,000 per count and up to three years of supervised release.
This indictment is the result of an investigation by the Food & Drug Administration Office of Criminal Investigation, Federal Bureau of Investigation, and Tennessee Bureau of Investigation. Assistant U.S. Attorney Neil Smith and Special Assistant U.S. Attorney Ben Cunningham will represent the United States.
Members of the public are reminded that an indictment constitutes only charges and that every person is presumed innocent until their guilt has been proven beyond a reasonable doubt.
Fourth Adams Produce Official Charged in Scheme to Defraud U.S. GovernmentRead the Press Release
BIRMINGHAM – The U.S. Attorney's Office has charged a fourth official of Adams Produce Company in a scheme to defraud the federal government of $481,000, announced U.S. Attorney Joyce White Vance FBI Special Agent in Charge Richard D. Schwein Jr. and IRS Criminal Investigation Division Special Agent in Charge Veronica Hyman-Pillot.Prosecutors this week filed an information in U.S. District Court charging STANLEY JOEL BUTLER II, a former purchasing agent for Adams, with conspiracy to defraud the United States. In an agreement with the government, also filed this week, Butler agrees to plead guilty to the conspiracy charge and, along with co-conspirators in the case, to pay $481,000 in restitution to the government.
"In an attempt to address Adams Produce's deteriorating financial situation, officers and employees of the company resorted to fraud. That fraud harmed Adams employees, customers and U.S. taxpayers," Vance said. "We are holding the perpetrators accountable for the crimes that were committed."
Three other officials of Adams Produce – Scott David Grinstead, David Andrew Kirkland and Christopher Alan Pfahl – have been charged and pleaded guilty in connection with fraud at the Birmingham-based company that had been a leading distributor of fresh fruits and vegetables across the Southeast for many years. Adams Produce was founded as a family-owned business more than 100 years ago. The family sold the company to executives and a private equity firm in 2010. The company shut down and filed for bankruptcy in 2012.
Butler, 42, of Trussville, worked at the corporate office in Birmingham and reported to Kirkland, the company's director of purchasing. Butler's duties included gathering produce pricing information from other Adams employees, including Kirkland, Phafl and the general manager of the company's Pensacola, Fla., distribution center, according to Butler's plea agreement. Butler also prepared a weekly pricing catalog that was submitted to the government.
The federal government, through the Defense Supply Center Philadelphia, was one of Adams' customers. The supply center contracted with Adams Produce to provide fresh fruits and vegetables to military bases, public schools systems, junior colleges and universities. Adams Produce entered into contracts with the government worth millions of dollars, according to court records.
Butler, along with Pfahl and Kirkland, engaged in a scheme to create false records that reflected a higher purchasing cost for fruits and vegetables from a national distributor than Adams Produce actually paid. The inflated costs were then presented to the government, which had agreed to pay a certain amount over Adams cost for produce.
According to Butler's, and other plea agreements in the case, Adams bought from TLC, one of the largest distributors of fresh produce in the United States, with offices located across the country. Beginning in about August 2011, Adams employees arranged and conduced transactions with TLC in Marietta, Ga., designed to create purchase orders and invoices that reflected inflated costs to Adams Produce.
Butler received the false purchase orders and invoices and, knowing they were created to represent Adams paid more than it actually did for the produce, used them to create the weekly pricing catalogs that he presented to the government Defense Supply Center, according to his plea agreement.
Between Aug. 4, 2011, and Dec. 7, 2011, Adams employees and officers conspired to conduct at least 82 transactions with TLC designed to create false invoices and purchase orders, according to the plea agreement. Through those false invoices submitted to the Defense Supply Center, Adams Produce fraudulently received about $481,000 from the government.
The conspiracy charge Butler faces carries a maximum penalty of five years in prison and a $250,000 fine.
The FBI and the IRS investigated the cases, which Assistant U.S. Attorney George A. Martin Jr. is prosecuting.
Four Northern California Real Estate Investors Agree to Plead Guilty to Bid Rigging at Public Foreclosure AuctionsRead the Press Release
Four Northern California real estate investors have agreed to plead guilty for their role in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in Northern California, the Department of Justice announced.
Felony charges were filed today in the U.S. District Court for the Northern District of California in Oakland against Wesley Barta of Oakland, Irma Galvez of Pacheco, Calif., Stan Kahan of Berkeley, Calif., and Joseph Vesce of San Francisco.
To date, as a result of the department’s ongoing antitrust investigations into bid rigging and fraud at public real estate foreclosure auctions in Northern California, 35 individuals, including Barta, Galvez, Kahan and Vesce, have agreed to plead or have pleaded guilty.
“These conspirators manipulated and suppressed the competitive process through their fraudulent and collusive conduct to the detriment of lenders and distressed homeowners,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “The Antitrust Division will continue to pursue those responsible for these illegal activities.”
According to court documents, for various lengths of time between June 2008 and January 2011, Barta and Vesce conspired with others not to bid against one another, but instead designated a winning bidder to obtain selected properties at public real estate foreclosure auctions in Contra Costa County, Calif. Barta and Vesce were also charged with a conspiracy to use the mail to carry out a scheme to fraudulently acquire title to selected Contra Costa County properties sold at public auctions, to make and receive payoffs and to divert money to co-conspirators that would have gone to mortgage holders and others by holding second, private auctions open only to members of the conspiracy. The department said that the selected properties were then awarded to the conspirators who submitted the highest bids in the second, private auctions. The private auctions often took place at or near the courthouse steps where the public auctions were held.
The same charges were brought against Galvez and Kahan for their involvement in similar conduct in Alameda County, Calif., from November 2008 through May 2010.
The department said that the primary purpose of the conspiracies was to suppress and restrain competition and to conceal payoffs in order to obtain selected real estate offered at Alameda and Contra Costa County public foreclosure auctions at non-competitive prices. When real estate properties are sold at these auctions, the proceeds are used to pay off the mortgage and other debt attached to the property, with remaining proceeds, if any, paid to the homeowner. According to court documents, these conspirators paid and received money that otherwise would have gone to pay off the mortgage and other holders of debt secured by the properties, and, in some cases, the defaulting homeowner.
“The continued success of our investigation into the bid rigging conspiracies at Northern California public foreclosure auctions is evident in today’s four guilty pleas,” said David J. Johnson, FBI Special Agent in Charge of the San Francisco Field Office. “The FBI will remain focused with the Antitrust Division in holding those accountable for such illegal acts.”
A violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine for a Sherman Act charge may be increased to twice the gain derived from the crime or twice the loss suffered by the victim if either amount is greater than $1 million. A count of conspiracy to commit mail fraud carries a maximum sentence of 30 years in prison and a $1 million fine. The government can also seek to forfeit the proceeds earned from participating in the conspiracy to commit mail fraud.
Today’s charges are the latest filed by the department in its ongoing investigation into bid rigging and fraud at public real estate foreclosure auctions in San Francisco, San Mateo, Contra Costa, and Alameda counties, Calif. These investigations are being conducted by the Antitrust Division’s San Francisco Office and the FBI’s San Francisco Office. Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Antitrust Division’s San Francisco Office at 415-436-6660, visit www.justice.gov/atr/contact/newcase.htm or call the FBI tip line at 415-553-7400.
Today's charges were brought in connection with the President'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.
**The fraud charge(s) referenced in this press release were subsequently dismissed on the government’s motion.**
Four Individuals Sentenced for Their Roles in Large, Multi-state Identity Theft RingRead the Press Release
MINNEAPOLIS—Earlier today in federal court in St. Paul, four individuals were sentenced for their roles in a large, multi-state, identity theft ring. United States District Court Judge Paul A. Magnuson sentenced Donyea Terrell Collins, age 27, of Richfield, to 55 months in prison; Derek Charles Estelle, age 25, of Stillwater, to 30 months in prison; and Kelly Jenelle Scott, age 44, no known address, to 46 months in prison. All three had earlier pleaded guilty to one count of conspiracy to commit bank fraud and one count of aggravated identity theft. Judge Magnuson also sentenced Lee Vang, age 32, of St. Paul, to 30 months in prison on one count of conspiracy to commit money laundering and one count of aggravated identity theft. Vang had also previously pled guilty to these charges.
These individuals, along with over 100 others, were involved in a conspiracy from 2006 through December of 2011 to defraud banks, bank customers, and businesses. The co-conspirators used victim information to create counterfeit checks and false identification documents to conduct fraudulent transactions at retail establishments, where expensive merchandise was purchased and returned for cash, and at banks, where the conspirators posed as customers and withdrew money from victims’ bank accounts. The members of the conspiracy conducted these fraudulent transactions throughout Minnesota and in at least 13 other states. Victim information was obtained by members of the conspiracy through multiple sources, including from individuals who stole victim information from their places of employment, from individuals employed at area banks, from those who stole the information from the mail, during vehicle break-ins, and business burglaries, among other sources.
Following sentencing, Patrick Henry, the head of the Minnesota Financial Crimes Task Force, said, “This investigation came together as a result of the partnerships between agencies and the extraordinary efforts of all involved. The Minnesota Financial Crimes Task Force led this investigation, but this is an example of successful collaboration of local, state, and federal criminal justice agencies.”
Kelly R. Jackson, Special Agent in Charge of IRS Criminal Investigations, St. Paul Field Office, which also participated in the investigation, said, “Individuals who commit identity fraud of this magnitude deserve to be punished to the fullest extent of the law. These individuals caused immeasurable hardship to innocent victims. IRS Criminal Investigations remains committed to the pursuit of identity theft, and together with our law enforcement partners and the U.S. Attorney’s Office, we will hold those who engage in similar behavior fully accountable.”
Several other defendants have been sentenced in this case thus far. On June 20, 2013, Patricia Grace Pnewski, age 52, of South St. Paul, was sentenced to time served on one count of conspiracy to commit bank fraud. She pleaded guilty on February 6, 2012. Also on June 20, Cynthia Andrea Maxwell, age 45, of St. Paul, was sentenced to 12 months and one day in prison on one count of conspiracy to commit concealment money laundering. She pleaded guilty on July 12, 2012. Judge Magnuson also sentenced Vinicia Andrell Williamson, age 28, of Minneapolis, to 24 months in prison on one count of conspiracy to commit bank fraud and one count of aggravated identity theft. She pleaded guilty on August 1, 2012.
On June 19, 2013, five co-conspirators were sentenced each on one count of conspiracy to commit bank fraud and one count of aggravated identity theft. Christeena Janell Barker, age 46, no known address, was sentenced to 48 months in prison. She pleaded guilty on January 19, 2012. Brianna Marie Blegen, age 26, of Ham Lake, was sentenced to 24 months in prison. She pleaded guilty on June 6, 2012. Jacqueline Cleveland, age 55, of Bloomington, was sentenced to 26 months in prison. She pleaded guilty on April 11, 2012. Melissa Jean Beaman, age 37, of St. Louis Park, was sentenced to 24 months and one day in prison. She pleaded guilty on January 9, 2012. Robin Dawn Finger, age 44, of St. Paul, was sentenced to 34 months in prison. She pleaded guilty on June 21, 2012.
Also on June 19, Brianna Marie Darwin, age 27, of St. Paul, was sentenced to 24 months in prison on one count of conspiracy to commit money laundering and one count of aggravated identity theft. She pleaded guilty on July 20, 2011.
On June 14, 2013, four co-conspirators were sentenced each on one count of conspiracy to commit bank fraud and one count of aggravated identity theft. Jamie Hubert Branson, age 47, of Minneapolis, was sentenced to 43 months in prison. He pleaded guilty on January 19, 2012. Ginger Loucina Halliburton, age 46, of St. Paul, was sentenced to 30 months in prison. She pleaded guilty on February 8, 2013. Majorie Marie Neely, age 51, of Red Wing, was sentenced to 43 months in prison. She pleaded guilty on January 10, 2012. Darryl Alan Brant, age 55, of St. Paul, was sentenced to 30 months in prison. He pleaded guilty on January 19, 2012.
In a related case, four additional individuals, Jemall Ronta Williams, Jerome Davis, Jr., Tierra Samantha Catrina House, and Shanell Collette Brewer pleaded guilty. Gordon Lamarr Moore was convicted in April 2013 following a jury trial. He remains a fugitive.
These cases resulted from an investigation conducted by the Minnesota Financial Crimes Task Force, the U.S. Postal Inspection Service, and the Internal Revenue Service-Criminal Investigations. They were prosecuted by Assistant U.S. Attorney Karen B. Schommer and Assistant U.S. Attorney Michelle E. Jones.
The Financial Crimes Task Force was established pursuant to state law and is comprised of local, state, and federal law enforcement investigators dedicated to combating the growing problem of cross-jurisdictional financial crimes. The task force, overseen by an advisory board also created under state law, serves the entire District of Minnesota, presenting its cases to county or federal prosecutors, as appropriate.
The task force and the Minnesota U.S. Attorney’s Office want to remind people to protect themselves from identity theft. For more information, visit http://www.stopfraud.gov/protect-identity.html.
For more information on how to avoid becoming a victim of identity theft, visit https://postalinspectors.uspis.gov/investigations/MailFraud/fraudschemes/mailtheft/IdentityTheft.aspx . The IRS-Criminal Investigations also urges citizens to review the Taxpayer Guide to Identity Theft, which can be found at http://www.irs.gov.
For tips on how to prevent mail theft, visit https://postalinspectors.uspis.gov/investigations/MailFraud/fraudschemes/mailtheft/MailTheft.aspx.Founder of Kansas-Based Franchising Business Pleads Guilty to Misleading SECRead the Press Release
KANSAS CITY, KAN. – The founder of a Kansas-based insurance franchising business has pleaded guilty to filing an annual report with the Securities and Exchange Commission that contained misleading statements about the now-defunct company’s finances, U.S. Attorney Barry Grissom said today.
Robert D. Orr, 59, Denver, Colo, pleaded guilty to one count of making false statements in a report to the Securities and Exchange Commission. In his plea, he admitted that while he served as founder and non-executive chairman of the board of directors of Brooke Corporation, the company filed a 2007 annual report (Form 10-K) that presented a more financially robust position for Brooke Corporation’s investment in Brooke Capital Corporation than was supported by the actual financial conditions within the company. Orr knew that the report omitted material facts including the specific number of failed Brooke Capital Corporation franchise locations and the exact or total amount of financial assistance being provided by Brooke Capital Corporation to under-performing franchises.
Co-defendant Leland Orr is set for trial Feb. 24, 2014. Robert Orr is set for sentencing Oct. 7. The parties have agreed to recommend a sentence of three years probation and a fine of $48,000.
Grissom commended the FBI and Assistant U.S. Attorney Mike Warner for their work on the case.
Former VP of Lending Convicted of Bank EmbezzlementRead the Press Release
HOUSTON – Shawn Nelson, 39, of Houston and a former vice-president at Members Choice Credit Union, has entered a plea of guilty to embezzling approximately $340,000 from the bank, United States Attorney Kenneth Magidson announced today.
Court records reflect that Nelson was a vice-president of lending at Members Choice Credit Union in Houston. From 2001 through 2009, Nelson opened signature loan accounts in his friends’ and family members’ names without their authorization and then withdrew money from accounts without their authorization. By the time the fraud was discovered, Nelson had stolen more than $340,000 from the credit union.
U.S. District Judge Keith P. Ellison, has set sentencing for Sept. 26, 2013, at which time Nelson faces up to 30 years in federal prison and a possible $1 million fine. Additionally, as part of his plea agreement, Nelson has agreed to forfeit approximately $340,000.
The investigation was conducted by the U.S. Secret Service. Assistant United States Attorneys Sharad S. Khandelwal and Kristine Rollinson are prosecuting.
Former New Jersey Lawyer Sentenced to 33 Months in Prison for Embezzling More Than $885,000 in Law Firm FundsRead the Press Release
TRENTON, N.J. – A former partner of a law firm based in Freehold, N.J., was sentenced today to 33 months in prison for defrauding the firm and its clients by improperly diverting more than $885,000 from the law firm, U.S. Attorney Paul J. Fishman announced.
Timothy Provost, 58, of Millstone Township, N.J., previously pleaded guilty before U.S. District Judge Michael A. Shipp to an information charging him with one count of mail fraud. Judge Shipp imposed the sentence today in Trenton federal court.
According to documents filed in this case and statements made in court:
Provost admitted that between April 2004 and January 2011, he embezzled from the law firm, which was not identified in court documents, by wrongfully writing checks from its attorney trust and business accounts to himself and his personal creditors to pay for his and his family’s personal expenses, including his mortgage, his children’s tuition and horse stable expenses. Provost then mailed some of the checks to his personal creditors. He further admitted to attempting to hide his theft by using the stolen funds to purchase cashier’s checks payable to his creditors or to himself.
Provost, who was a partner at the firm, had access to the law firm’s bank accounts in order to conduct real estate transactions on behalf of clients, including closings and refinancings. Provost’s embezzlement left several clients with double mortgages, which insurance then stepped in to cover. In total, Provost stole more than $885,000 from the attorney trust and business accounts for his personal benefit.
In addition to the prison term, Judge Shipp sentenced Provost to three years of supervised release and ordered him to pay $887,134 in restitution.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford; and the Monmouth County Prosecutor’s Office, under the direction of Acting Prosecutor Christopher Gramiccioni, for the investigation leading to today’s sentence.
The government is represented by Assistant U.S. Attorney Joseph Muoio of the U.S. Attorney’s Office Criminal Division in Trenton.
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Defense counsel: Nicholas Caliendo Esq., Freehold, N.J.
Former Highland Park Police Officer Sentenced to Prison for BriberyRead the Press Release
A former Highland Park Police officer was sentenced to prison today for conspiring with three other police officers to commit extortion and protect a shipment of cocaine, U.S. Attorney Barbara L. McQuade announced today.
McQuade was joined in the announcement by FBI Special Agent in Charge Robert D. Foley, III.
During a hearing before U.S. District Judge Avern Cohn, Craig Clayton, 55, of Highland Park, Michigan, was sentenced to 12 months and one day in prison and two years of supervised release based on his plea of guilty to conspiring to commit extortion. Clayton had agreed with three other Highland Park police officers to take money in exchange for delivering a four-kilogram shipment of cocaine. Clayton brought his badge and gun to protect the shipment, and Clayton accepted $1,500 in cash from an FBI informant for his work.
United States Attorney McQuade said, "The court’s sentence today sends a strong message that police officers who take bribes will go to prison, and that no one is above the law.”
FBI Special Agent in Charge Foley stated, “Police officers who swear an oath to serve and protect are held to the highest standards of ethics and integrity. The FBI is committed to ensuring those standards are maintained, and in cases of abuse, will pursue and prosecute those responsible."Thus far in the investigation, three of the four Highland Park police officers charged have pleaded guilty and been convicted. Former Officer Shawn Williams pleaded guilty on May 2, 2013 to conspiring to commit extortion, and former officer Anthony Bynum pleaded guilty on May 23, 2013 to conspiring to commit extortion and bribery.
The case was investigated by agents of the FBI. It is being prosecuted by Assistant United States Attorney David A. Gardey.
Former Hartford Resident Pleads Guilty to Sex Trafficking of A MinorRead the Press Release
Deirdre M. Daly, Acting United States Attorney for the District of Connecticut, announced that KAMAR JAMES, also known as “Sean Steppa,” “Sean Lawson” and “Akamar Lawson,” 30, a citizen of Jamaica last residing in Hartford, pleaded guilty today before United States Magistrate Judge Thomas P. Smith in Hartford to one count of sex trafficking of a minor.
According to court documents and statements made in court, in 2011, JAMES recruited a minor victim whom JAMES knew to be under the age of 18 to engage in prostitution. On multiple occasions, JAMES transported the minor victim from Connecticut to streets in New York City where the victim would meet men who would pay her for sexual encounters. JAMES also posted pictures of the minor victim on the Internet to advertise the victim’s prostitution services. He then transported the victim to hotels in the New York City area when the victim engaged in pre-arranged prostitution encounters. The victim turned over all of the proceeds from the prostitution encounters to JAMES.
JAMES is scheduled to be sentenced by United States District Judge Vanessa L. Bryant on September 19, 2013, at which time he faces a mandatory minimum term of imprisonment of 10 years and a maximum term of life.
JAMES has been detained since his arrest on February 3, 2012.
This matter has been investigated by the Federal Bureau of Investigation and the Hartford Police Department, with the assistance of U.S. Immigration and Customs Enforcement. The case is being prosecuted by Assistant United States Attorney David E. Novick.
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U.S. ATTORNEY'S OFFICE
Tom Carson
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[email protected]Former Employee Pleads Guilty to Stealing Funds from Postal ServiceRead the Press Release
MINNEAPOLIS—Earlier today in federal court in St. Paul, a former employee of the United States Postal Service (“USPS”) pleaded guilty to embezzling postal funds from the Brooklyn Park Post Office. Kathleen M. Warner, age 53, of Otsego, pleaded guilty to one count of misappropriation of postal funds. Warner, who was indicted on March 12, 2013, entered her plea before United States District Court Judge Paul A. Magnuson.
In her plea agreement, Warner admitted that from in or about February 2010 to in or about August 2012, while performing her duties as a service associate for the USPS, she stole funds exceeding $1,500. Warner admittedly recorded cash sales of postage stamps incorrectly to benefit herself, used postage stamps for personal mailings without paying for them, took money out of her cash drawer to purchase Post Office merchandise, and took money from the cash drawer for her own benefit. Warner’s activities were discovered through the use of a surveillance camera.
For her crime, Warner faces a potential maximum penalty of ten years in prison. Judge Magnuson will determine her sentence at a future hearing, yet to be scheduled. This case is the result of an investigation by the USPS-Office of Inspector General. It is being prosecuted by Assistant U.S. Attorney Manda M. Sertich.Former Department of Health and Human Services Employee<br /> Sentenced to Prison for Wire Fraud SchemeRead the Press Release
A former employee of the Department of Health and Human Services’ Office of the Assistant Secretary for Preparedness and Response (HHS-ASPR) was sentenced today to serve six months in prison for his role in a scheme to defraud the United States by submitting fraudulent employment offers in order to claim retention bonuses totaling $138,875, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division.
Michael A. Balady, 62, of Springfield, Va., was sentenced by U.S. District Judge Rudolph Contreras in the District of Columbia. In addition to his prison term, Balady was sentenced to serve six months of home confinement and two years of supervised release, and he was ordered to pay a fine of $22,000.
Balady worked in the HHS-ASPR initially as the director of acquisition management systems in ASPR’s Biological Advanced Research and Development Authority and later as the acting director of ASPR’s Office of Acquisitions, Management, Contracts and Grants. As part of his plea agreement, Balady admitted that he conspired with an employee of a communications firm based in Alexandria, Va., to fabricate employment offers for a position with that firm in order to justify retention bonuses paid to him by HHS. Retention bonuses are monetary incentives paid by HHS to employees deemed essential to its mission who would be likely to leave in the absence of such a bonus.
From 2009 until 2012, Balady improperly received retention bonus payments totaling $94,940. In June 2012, HHS approved another retention bonus in the amount of $38,875, but that bonus was never paid to Balady.
This case was investigated by the HHS Office of the Inspector General and was prosecuted by Trial Attorneys Richard B. Evans and Mark Angehr of the Criminal Division’s Public Integrity Section.
Former CEO of London-Based Company Sentenced to 41 Months in Prison for $2.1 Million Fraud Scheme-Defendant Used Nearly $1.7 Million of Proceeds to Buy Home in Great Falls, Va.-Read the Press Release
WASHINGTON – Kevin Richard Halligen, 51, an Irish citizen, was sentenced today to 41 months in prison for carrying out a scheme in which he defrauded $2.1 million from a Netherlands-based commodities trading company, announced U.S. Attorney Ronald C. Machen Jr. and Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office.
Halligen pled guilty in May 2013 to one count of wire fraud, the first of two counts of an indictment that was returned against him in 2009 in the U.S. District Court for the District of Columbia. As part of the plea agreement, the government agreed to dismiss the second count of the indictment, which was a money laundering charge stemming from the same scheme. He was sentenced by the Honorable Colleen Kollar-Kotelly.
Under the plea agreement, Halligen also must pay $2.1 million in restitution to the company that was the victim of his scheme.
Halligen was incarcerated in the United Kingdom from the date of his arrest in November 2009 until his extradition in December 2012. When he was presented for his initial appearance in the U.S District Court for the District of Columbia, in December 2012, he was ordered to be held without bond and he has been incarcerated since that time. He will get credit for the time he has served in the United States and abroad. He has voluntarily requested that he be removed from the United States immediately.
The wire fraud charge stems from actions taken by Halligen in 2006 and 2007, when he was the Chief Executive Officer of Red Defence International (RDI), a London-based security consulting and crisis management firm, which was hired by Trafigura Beheer BV (Trafigura), a Netherlands-based international commodities trading company, and its London-based law firm, Waterson Hicks. Trafigura hired RDI as a consultant in crisis management after two Trafigura executives were captured and imprisoned in the Ivory Coast while visiting there for the purpose of determining the company’s next steps to address an environmental issue caused by the leakage of toxic waste material from Trafigura vessels in an Ivory Coast port.
While employed by Trafigura, Halligen claimed to have incurred $2.1 million in expenses related to pursuing a strategy in the United States aimed at convincing the United States to assist in securing the release of the Trafigura executives; in reality, Halligen spent the money on a home in Great Falls, Va., which was to be his personal residence, as well as other personal expenses, according to the government’s evidence.
According to a Statement of Offense, signed by the defendant as well as the government, at the request of Trafigura, Waterson Hicks hired RDI in October 2006 to help secure the release of two Trafigura executives who were arrested and detained in Abidjan, Ivory Coast. The arrests followed an environmental spill off the coast of Abidjan. Under a contract that took effect in October 2006, RDI was to provide security intelligence and public relations services related to Trafigura’s presence in the Ivory Coast and to assist with facilitating the release of the Trafigura executives. Under the contract with RDI, Waterson Hicks paid RDI and then, in turn, the law firm was reimbursed by Trafigura.
During November 2006, after other efforts to secure the executives’ release proved unsuccessful, Halligen suggested that the U.S. government should be involved with facilitating negotiations with the Ivory Coast. His stated strategy was to utilize his contacts in the United States to encourage Ivory Coast officials to release the executives. Halligen said the “American Strategy” would cost an additional $2.1 million, on top of the money RDI already was receiving. In total, Halligen received close to $12 million under this contract.
The $2.1 million supposedly was to be used to pay expenses incurred by Halligen in the United States to hire consultants and lobbyists to influence officials in the United States on Trafigura’s behalf. In December 2006, Halligen was informed that the law firm had received the $2.1 million from Trafigura. Then, in January 2007, Halligen told the law firm to wire $2.1 million from their bank account in London to his personal bank account in the United States.
Between November 2006 and January 2007, Halligen traveled to the United States on numerous occasions, claiming to have met with U.S. officials in Washington, D.C., allegedly in furtherance of the “American Strategy.” While in Washington, D.C., he began dating a woman who resided in the area and subsequently became engaged to her.
Halligen gave his fianceé a $2 million budget to find a suitable house in which they would live after their marriage. Shortly thereafter, she found a six-bedroom, 4 ½-bathroom residence in Great Falls, Va. On Jan. 11, 2007 - the day after $2.1 million was wired to Halligen’s personal bank account for the American strategy - Halligen wired nearly $1.7 million from his account to complete the purchase of the Great Falls residence.
None of the proceeds from the $2.1 million payment from Waterson Hicks to RDI were ever directed toward reimbursement of expenses related to the “American Strategy.” In addition to spending nearly $1.7 million on the purchase of the Great Falls residence, the rest of the money was spent on other personal expenses, including a lavish fake wedding to his Washington, D.C. fiancé which was held at an exclusive location in Georgetown, two purebred dogs, and other luxury personal items.
The Trafigura executives ultimately were released in February 2007.
At the time of his indictment in November 2009, Halligen was no longer residing in the United States. On Nov. 25, 2009, he was arrested at a hotel in Oxford, the United Kingdom, so that he could be extradited to the United States. At the time of his arrest, Halligen was using an alias. Subsequent to his arrest in the United Kingdom, Halligen litigated issues surrounding his extradition to the United States. He ultimately was extradited in December 2012.
In announcing the sentence, U.S. Attorney Machen and Assistant Director in Charge Parlave commended the work of the Special Agents from the FBI’s Washington Field Office who handled the case. They also expressed appreciation to those who worked on the case for the U.S. Attorney’s Office, including paralegals Donna Galindo, Tasha Harris, and Krishawn Graham. Finally, they commended the efforts of Assistant U.S. Attorneys Maia L. Miller and Matt Graves, who prosecuted the case, and former Assistant U.S. Attorney Vasu Muthyala who investigated the matter.
13-230Former Bishop of Trumbull Church Sentenced to 46 Months in Prison for Investment Fraud SchemeRead the Press Release
Deirdre M. Daly, Acting United States Attorney for the District of Connecticut, announced that JULIUS C. BLACKWELDER, 59, formerly of Stratford, was sentenced today by Senior United States District Judge Ellen Bree Burns in New Haven to 46 months of imprisonment, followed by three years of supervised release, for operating an investment fraud scheme.
According to court documents and statements made in court, beginning in 2005, BLACKWELDER persuaded individuals to invest their money with him as part of an investment pool known as the “Friend’s Investment Group.” At the time, BLACKWELDER was the Bishop of the Bridgeport Ward of the Church of Jesus Christ of Latter-day Saints located in Trumbull, and he solicited investments from, among others, members of his congregation.
BLACKWELDER misrepresented to investors that he would invest their money in safe, long-term commodities futures contracts, and that he was an experienced and successful commodities investor. In some instances, BLACKWELDER guaranteed investors’ principal and a specific return on their investment. He documented his misrepresentations to investors in promissory notes, offering memoranda and account updates that he prepared.
In fact, BLACKWELDER used investors’ money to fund his construction of a 7,000 square-foot home on the Housatonic River in Stratford, to pay other personal expenses and to repay personal bank loans, including a line of credit from a Troubled Asset Relief Program (TARP) recipient bank. BLACKWELDER also used some invested funds to pay earlier investors.
Through this scheme, BLACKWELDER defrauded investors of nearly $500,000.
One victim of BLACKWELDER’s scheme, who was nearing retirement, took out a $100,000 home equity loan on his house and withdrew $130,000 from his 401k to invest with BLACKWELDER.
“This defendant exploited his position in his church to mislead other church members into believing he was an accomplished investor who could help them protect and increase their wealth,” stated Acting U.S. Attorney Daly. “Instead, he used much of the money he took from his victims to construct a luxurious waterfront mansion so that he could live in comfort while his victims struggled to make ends meet. I want to thank the U.S. Postal Inspection Service, SIGTARP, IRS-Criminal Investigation and the Connecticut Department of Banking who investigated this matter, as well as our other law enforcement partners who are working diligently to protect investors by identifying and rooting out fraudulent financial schemes.”
On February 20, 2013, BLACKWELDER pleaded guilty to one count of wire fraud and one count of money laundering.
This matter was investigated by the United States Postal Inspection Service, the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), the Internal Revenue Service – Criminal Investigation, and the State of Connecticut Department of Banking. The case was prosecuted by Assistant United States Attorney Jonathan N. Francis and Acting United States Attorney Daly.
The Connecticut Securities, Commodities and Investor Fraud Task Force investigates matters relating to insider trading, market manipulation, Ponzi schemes, investor fraud, financial statement fraud, violations of the Foreign Corrupt Practices Act, and embezzlement. The Task Force includes representatives from the U.S. Attorney’s Office; Federal Bureau of Investigation; Internal Revenue Service – Criminal Investigation; U.S. Secret Service; U.S. Postal Inspection Service; U.S. Department of Justice’s Criminal Division, Fraud Section and Antitrust Division; U.S. Securities and Exchange Commission (SEC); U.S. Commodity Futures Trading Commission (CFTC); Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP); Office of the Chief State’s Attorney; State of Connecticut Department of Banking; Greenwich Police Department and Stamford Police Department.
Citizens are encouraged to report any financial fraud schemes by calling, toll free, 855-236-9740, or by sending an email to [email protected].
Today’s announcement is part of efforts underway by the President’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants.
To report financial fraud crimes, and to learn more about the President’s Financial Fraud Enforcement Task Force, please visit www.stopfraud.gov.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
[email protected]Former Bellevue Travel Agent Sentenced for Stealing Money and Miles from ClientsRead the Press Release
A former Bellevue travel agent who used her access to clients’ credit card numbers and mileage plan awards to steal cash, travel and tickets worth more than $300,000 was sentenced today by U. S. District Judge James L. Robart to 24 months in prison and three years of supervised release, announced U.S. Attorney Jenny A. Durkan. KAREN YEAKEL, 64, was ordered to pay $339,242 to those she defrauded and to her employer who incurred thousands of dollars investigating the embezzlement.
According to records filed in the case, between 2005 and 2011, YEAKEL used her close relationship with some of her clients to steal their money and their miles. In some instances, YEAKEL would use their credit card accounts to charge airplane tickets to Hawaii or Mexico and then would resell the tickets as “travel vouchers” at a discount to other clients, pocketing the cash. She put more than $180,000 in fraudulent charges on the clients’ credit cards. The other prong of the scheme involved using clients’ miles to book her own travel or travel for her family members. YEAKEL booked more than 152 flights for family members using other people’s frequent flyer miles. When clients wanted to use their miles, YEAKEL claimed no mileage seats were available, when in fact she had simply drained the miles from the accounts. The value of the miles is estimated at more than $132,000.
YEAKEL pleaded guilty January 28, 2013.
Writing to the court prosecutors described how YEAKEL betrayed clients, many of whom were close friends, with her scheme. “Year after year, month after month, day after day, defendant Yeakel misused credit card and airline mile accounts her clients had entrusted to her. During this lengthy period, defendant Yeakel led her clients to believe that she was acting in their best interests, when in fact, she was embezzling hundreds of thousands of dollars from them to support her own lifestyle….. here is simply no excuse for an educated defendant, entrusted with private financial information by her clients, to engage in a multi-year fraud which caused significant emotional pain and significant losses,” prosecutors wrote in their sentencing memo.
The case was investigated by the Bellevue Police Department and was prosecuted by Assistant United States Attorney Justin Arnold.
Press contact for the U.S. Attorney’s Office is Thomas Bates at (206) 553-7970 or [email protected].
Former Air Guard Member Convicted of Wire FraudRead the Press Release
WICHITA, KAN. – A former Kansas Air National Guard senior airman who was assigned to McConnell Air Force Base in Wichita has been convicted on a federal charge of wire fraud, U.S. Attorney Barry Grissom said today.
After a trial in U.S. District Court in Wichita, a jury found Eledria J. Bradley, 28, Wichita, Kan., guilty of one count of wire fraud.
During trial, prosecutors presented evidence that Bradley collected more than $50,000 in travel reimbursements by claiming she lived in Arizona while she was working at McConnell. Evidence showed that Bradley accessed her file via a virtual MPF, an online personnel system in which military members can access and change their personal information, and changed her residential address from Wichita to Chandler, Ariz. The change in address placed her outside the commuting distance for McConnell Air Force Base, As a result, she received lodging and per diem benefits to which she was not entitled from April 22, 2009, to April 23, 2011, totaling $54,992.
Sentencing will be set for a later date. She faces a maximum penalty of 20 years in federal prison and a fine up to $250,000. Grissom commended the Air Force - OSI and Assistant U.S. Attorney Alan Metzger for their work on the case.
Five Indicted for $4.1 Million Mortgage Fraud Involving Homes in Medina and Gates MillsRead the Press Release
A federal indictment was filed charging five people with taking part in a $4.1 million mortgage fraud scheme involving six luxury properties in Medina, Ohio, and one property in Gates Mills, Ohio, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
The seven-count indictment charges one count of conspiracy to commit bank fraud and wire fraud, one count of conspiracy to commit bank fraud and five counts of bank fraud.
Those charged are: Thomas G. France, age 43, of Strongsville; Katen S. Pabley, a.k.a. Keith Pabley, age 40, of Shaker Heights; Su Chi Straka, age 37, of Parma; Lisa R. Nagle, age 42, of Houston, Texas; and, Ranjeet Pabley, age 67, of Lombard, Illinois.
Previously charged via information were Joseph Beccia, age 60, of Parma; and, Alex Blackmore, age 49, of Bronx, New York.
As part of the first mortgage fraud scheme, the indictment charges that from in or around May 2006 through on or about June 20, 2007, Beccia and his company, Horizon Construction, built six new, luxury properties in Medina. Although some of the properties were not fully completed, Beccia listed five of the six properties for sale at purchase prices that were equal to the true market value of each property, starting on or about May 13, 2005.
Specifically, Beccia listed the five properties for sale as follows: 2940 Sutton Lane, Medina for $599,000, on or about August 30, 2006; 4281 Fox Glen Drive, Medina for $395,000, on or about May 13, 2005; 4320 Perian Court, Medina for $399,000, on or about November 9, 2005; 3006 Sutton Lane, Medina for $529,500, on or about August 30, 2006; and, 4740 Lake Forest Trial, Medina for $925,000, on or about August 30, 2006.
Beccia incurred the cost of the construction of these homes without having known purchasers for these properties. Beccia was not able to sell these properties for an extended period of time and began to experience financial difficulties. Joseph Jones, an individual previously convicted in another mortgage fraud scheme, met Beccia through France, a real estate agent working in the area. France advised Beccia that Jones had a system by which Jones could sell these properties so that Beccia could pay off his debts on the properties, according to the indictment.
The indictment charges further that Jones and France explained to Beccia that Jones had individuals willing to have properties purchased in their names. Jones and France also advised Beccia that in order to make Jones’ system work the properties would need to be removed from the market and re-listed at significantly higher purchase prices. Finally, Jones and France advised Beccia that they would handle the interactions with the loan officers and securing the mortgage loans. All Beccia had to do was participate in the sale of the properties at the significantly inflated purchase prices and sign off on the loan documents as the seller, which Beccia agreed to do, according to the indictment.
The indictment also charges that Beccia advised Jones and France the amount of money he required from the sale of each the properties in order for him to repay the amounts he had borrowed to construct the homes. Then, Jones determined the additional amount of money he wanted to receive over and above the amount of money required to be distributed to Beccia after the sale of each property. Beccia and France prepared new purchase agreements for each of the six properties with the inflated purchase price necessary to satisfy the amounts of money required. After the newly inflated purchase agreements were created, the purchase agreements were provided to Straka and Nagel, knowing that they would provide appraisal reports to support the inflated purchase prices, according to the indictment.
Jones enlisted K. Pabley and Blackmore to be straw buyers/investors of Beccia’s properties. Jones advised K. Pabley and Blackmore that if they would agree to allow these luxury homes to be purchased in their names, they would not have to provide any down payment funds because Jones would provide the down payment, and Jones would provide K. Pabley and Blackmore with a significant amount of cash back after the closing of each property for allowing their names to be used as the purchasers. K.Pabley’s credit could not support the purchase of the luxury properties, so K.Pabley recruited R.Pabley, his mother, to serve as the straw buyer/investor. Both R.Pabley, at the direction of K.Pabley, and Blackmore signed the loan documents containing false information in order for them to qualify to purchase the properties, according to the indictment.
The indictment charges that France re-listed five of the six properties for sale at the inflated purchase prices determined by Beccia and Jones as follows: 2940 Sutton Lane, Medina from $599,000 to $950,000; 4281 Fox Glen Drive, Medina from $395,000 to $647,000; 4320 Perian Court, Medina from $399,000 to $650,000; 3006 Sutton Lane, Medina from $529,500 to $920,000; and, 4740 Lake Forest Trial, Medina from $925,000 to $1,400,000.
Finally, the indictment charges that Jones enlisted the services of Marilyn Mannarino, an individual previously convicted in another mortgage fraud scheme, and Tower City Title on all six of Beccia’s properties. Tower City prepared the HUD-1s to make it appear to the financial institutions and mortgage lenders that R.Pabley and Blackmore provided the down payments from their own personal funds, when in fact Jones provided the down payments. Beccia, R.Pabley, and Blackmore signed the HUD-1s knowing that R.Pabley and Blackmore had not provided the down payments from their own personal funds.
Each of the properties for which defendants secured a mortgage loan went into foreclosure, resulting in a total loss of approximately $3,327,333, with Flagstar Bank incurring a loss of approximately $1,053,000, Lehman Brothers Bank incurring a loss of approximately $752,500, J.P. Morgan Chase incurring a loss of approximately $422,000, Suntrust Mortgage, Inc. incurring a loss of approximately $420,833, and American Brokers Conduit, a division of American Home Mortgage, Inc. incurring a loss of approximately $679,000, according to the indictment.
In the second mortgage fraud scheme, the indictment charges Jones and K.Pabley of conspiring with D.C., owner of Perl Building Corporation, to fraudulent purchase the property located at 1924 Epping Road, Gates Miles, Ohio, in R.Pabley’s name. Similar to Beccia, Jones identified D.C. as a builder in financial trouble and contacted D.C. with an offer to purchase the Epping Road property that D.C. had not been able to sell. Jones explained that he had an individual willing to purchase the property, but that in order to make the transaction work they would need to inflate the purchase price of the property significantly over the fair market value of the property so that Jones could obtain the excess funds from the inflated purchase price. Just as Jones had done with Beccia, Jones advised D.C. that he would handle all the aspects of the transaction. All D.C. had to be willing to do was sign the HUD-1 containing the inflated purchase price, which D.C. agreed to do, according to the indictment.
Again, K.Pabley’s credit score would not support the purchase of the property, so he recruited R.Pabley to have the property purchased in her name. And, again, Jones enlisted the services of Mannarino and Tower City Title to prepare the HUD-1 and handle the closing. The loan application and HUD-1 were falsified in a similar manner as those in the Medina scheme and those involved in the Epping property signed the loan documents knowing they contained false information in order to induce the lender, Washington Mutual, to approve and fund the loan. The Epping Road property, also, went into foreclosure creating a loss to Washington Mutual of approximately $807,000, according to the indictment.
If convicted, defendants’ sentences will be determined by the Court after review of factors unique to this case, including defendants’ prior criminal records, if any, each defendant’s role in the offense, and the characteristics of the violation. In all cases the sentences will not exceed the statutory maximum and in most cases they will be less than the maximum.
This case is being prosecuted by Assistant United States Attorney Mark S. Bennett, following an investigation by the Cleveland Offices of the Federal Bureau of Investigations and the United States Secret Service. An indictment is only a charge and is not evidence of guilt. Defendants are entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Final Defendant Sentenced to 120 Months in Large Warren County Marijuana Distribution RingRead the Press Release
– 21 defendants prosecuted on multiple charges of money laundering and distribution of more than 1000 kilograms of marijuana
BOWLING GREEN, Ky. - United States Attorney David J. Hale announced the sentencing of the last of 21 defendants prosecuted in a large marijuana distribution ring operating from June 2008 to February 2010, in Warren County, Kentucky.
Senior Judge Thomas B. Russell late yesterday sentenced Brian Miller of Bowling Green, to 120 months in prison for his role in a conspiracy to distribute more than 1,000 kilograms of marijuana in the Western District of Kentucky.
“The successful conclusion of this multi-defendant drug trafficking case follows from an effective and coordinated law enforcement effort,” stated U.S. Attorney Hale. “We commend the good work of the Bowling Green-Warren County Drug Task Force and the DEA. These important federal and local partnerships are working to reduce the drug trafficking and the violent crime that all too often is associated with drug trafficking organizations, throughout the Western District of Kentucky.”
“This is what can be accomplished when we all work together, share information,” stated Thomas M. Loving, Director, Bowling Green-Warren County Drug Task Force.
All defendants pleaded guilty to various drug trafficking and/or money laundering charges while some pleaded guilty to reduced charges. The indictments in U.S. District Court were returned by a grand jury on November 3, 2010, April 6, 2011, and March 14, 2012. Defendants were sentenced in United States District Court, in Bowling Green, on December 4, 2012, and on February 28, 2013. The following is a listing of sentences received: Tony Barber to 30 months imprisonment; Paul Cuen to 37 months imprisonment; Bryson Hall to 18 months imprisonment; Carl Gene Jones Jr. to 97 months imprisonment; Roger Kollman to 60 months probation; Craig Larry to 60 months probation; Tim Manning to 60 months probation; Brian Scott Miller to 120 months imprisonment; Jacob Paul Miller to 87 months imprisonment; Darrell Morgan to 60 months probation; Michael Perry to 41 months imprisonment; Julius Price to 60 months imprisonment; Ralph Rich to 60 months probation; Scott Rich to 41 months imprisonment; Troy Rich to 84 months imprisonment; Stephanie Rich to 60 months probation; Michael Rich to 45 months imprisonment; Jonathan Watkins to 37 months imprisonment; and Paul Michael Wilson to 27 months imprisonment.
Differences between the sentences received for the same charge are attributable to the individual defendant’s criminal history record, which is an important factor in federal sentencing procedures. In addition to the sentences noted above, all defendants who received a prison sentence would be placed on supervised release for a period of at least three years after serving the imposed sentence. There is no parole in the federal prison system.
Two defendants had charges dismissed on a motion by the United States and one defendant, Francisco Parra of Rio Pico, Arizona, was acquitted at trial.
In addition to the sentences, the investigation resulted in the forfeiture of approximately $200,000 in U.S. currency and approximately $800,000 in real and personal property.
The cases were prosecuted by Assistant United States Attorney Larry Fentress, and investigated by the Bowling Green-Warren County Drug Task Force and the United States Drug Enforcement Administration.
Final Defendant Sentenced in Alien Harboring ConspiracyRead the Press Release
HOUSTON – Carlos Alejandrez, the final defendant convicted in a conspiracy to harbor and induce illegal aliens to reside in the country, has been ordered to federal prison, United States Attorney Kenneth Magidson announced today. Alejandrez, 30, of Houston, entered a plea of guilty Feb. 5, 2013.
Today, U.S. District Judge Sim Lake handed Alejandrez a 97-month term of imprisonment to be followed by three years of supervised release. Four others - Jabier Alejandre, 22, of Houston, and Ismael Melgoza-Arredondo, 39, Miguel Granados-Lupian, 33, and William Dubon-Milla, 22, all illegal aliens residing in Houston - have also pleaded guilty in the case. Dubon-Milla and Granados-Lupian both received sentences of 37 months, while Alejandre and Melgoza-Arredondo were sentenced to respective terms of 51 and 97 months.
All five admitted they conspired to harbor undocumented aliens for financial gain.
The investigation began on Dec. 17, 2012, after special agents with Homeland Security Investigations (HSI) responded to a call for assistance from the Houston Police Department (HPD) regarding a possible alien stash house on the 7300 block of Northleaf in Houston.
Earlier that day, HPD had responded to the residence, began surveillance and subsequently observed a black GMC pickup departing the residence. Officers initiated a traffic stop and discovered Alejandrez was driving and Granados-Lupian was a passenger in the car as was an undocumented female from Honduras who had entered the U.S. illegally. The alien had paid $1,700 to the alien smuggling organization and was being delivered to relatives in Houston who were to pay an additional $1,700 upon her arrival.
Shortly thereafter, a Toyota pickup was seen leaving the same house and was also stopped by law enforcement. Melgoza-Arredondo was driving and had as passenger a female undocumented alien from El Salvador who had arrived in the U.S. approximately one month prior. She had already paid $8,000 to the smuggling organization to be brought to New Jersey from El Salvador and still owed another $800.
HPD officers and HSI agents entered the Northleaf residence, at which time they discovered Alejandre, the brother of Alejandrez, and Dubon-Milla as well as 43 recently smuggled undocumented aliens. The aliens were all interviewed and admitted they were smuggled illegally into the country and were being housed at this residence until their delivery. The vast majority of the males were wearing nothing but their underwear, which court records indicate is a common practice used by alien smugglers to discourage men from attempting escape. Among those in the residence were an unaccompanied five-year-old boy and 12 other juveniles.
During the course of the search, agents seized various documents and items including ledgers commonly referred to as "polio lists" which are used to keep track of the smuggled aliens as well as a .22 caliber handgun and a 12-gauge shotgun, two baseball bats and numerous cell phones.
Previously released on bond, Alejandrez was taken into custody following the sentencing today where he will remain pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The case was investigated by HSI with the assistance of HPD. Assistant United States Attorney Suzanne Elmilady is prosecuting the case.
Federal, State and Local Officials to Hold Press Conference to Discuss New Mexico’s Role in Yesterday’s Nationwide Synthetic Drug TakedownRead the Press Release
ALBUQUERQUE – Federal, state and local officials will hold a press conference on THURSDAY, JUNE 27, 2013 at 2:00 P.M. to discuss the role of New Mexico law enforcement community in yesterday’s nationwide synthetic drug takedown.
WHO: U.S. Attorney Kenneth J. Gonzales Joseph M. Arabit, Special Agent in Charge, El Paso Division of the DEA Other Federal, State and Local Law Enforcement Officials
WHAT: Press conference to discuss role of New Mexico law enforcement community in yesterday’s nationwide synthetic drug takedown.
WHEN: THURSDAY, JUNE 27, 2013 2:00 P.M.
WHERE: U.S. Attorney’s Office 10th Floor Multi-Media Room (Reception on 9th Floor) 201 Third Street NW Albuquerque, NM 87102 OPEN PRESSNOTE: All media must present government-issued photo ID (such as driver’s license) as well as valid media credentials. Media may begin to arrive at 1:45 p.m. Press inquiries regarding logistics should be directed to Jessica Masoner at (505) 224-1448 or (505) 366-1463.
Federal Jury Convicts Wisconsin Man for Possessing Cocaine and Crack Cocaine with Intent to DistributeRead the Press Release
MINNEAPOLIS—Yesterday in federal court in St. Paul, a jury found a 33-year-old man from Green Bay, Wisconsin, guilty of conspiring to possess with intent to distribute cocaine and crack cocaine. On June 26, 2013, the jury convicted Travis Sentell Peeler of one count of conspiracy to possess with intent to distribute five or more kilograms of cocaine and 280 or more grams of crack cocaine. Peeler was indicted on July 23, 2012, along with six co-defendants.
The evidence presented at trial proved that between March 2009 and March 2012, Peeler conspired with others to possess with intent to distribute cocaine and crack cocaine. Earlier, six of Peeler’s co-defendants pleaded guilty to one count of conspiracy to distribute controlled substances. In their plea agreements, the co-defendants admitted that between March 2009 and March 2012, they conspired with each other to possess with intent to distribute cocaine and crack cocaine.
On March 4, 2013, Rossco Antonieo Ross, age 35, of Columbia Heights, pleaded guilty. In his plea agreement, Ross admitted that he obtained the cocaine, “cooked” it into crack cocaine, and sold it to the others. He also admitted responsibility for 340 grams of crack cocaine. On January 11, 2013, William Elisha Carter, age 28, of Plymouth, pleaded guilty. In his plea agreement, Carter admitted responsibility for between 5 and 15 kilograms of cocaine.
On December 18, 2012, Musaaleh Waheed Muhammad, age 36, of Brooklyn Park, pleaded guilty. In his plea agreement, Muhammad admitted that he distributed cocaine to others to sell. Muhammad admitted responsibility for between 5-15 kilograms of cocaine. On November 21, 2012, Charles Eric Jackson, Jr., age 45, of Minneapolis, pleaded guilty. In his plea agreement, Jackson admitted that he purchased crack cocaine from Ross and sold it to others. Jackson admitted responsibility for 161 grams of crack cocaine.
On November 19, 2012, Gregory Leroy Carter, age 26, of Brooklyn Park, pleaded guilty. In his plea agreement, Carter admitted that he purchased cocaine from Ross and sold it to others. He also admitted responsibility for 56 grams of crack cocaine. In addition, Carter admitted that he carried firearms, including a nine-millimeter pistol while he was trafficking in narcotics on February 5, 2012. On November 14, 2012, Heriberto Sanchez, age 25, of Lucerne, California, pleaded guilty. In his plea agreement, Sanchez admitted securing the transport of cocaine from Mexico through California to Minnesota. He also admitted responsibility for between 5 and 15 kilograms of cocaine.
For their crimes, Peeler, Sanchez, Ross, Muhammad, and William Carter face a potential maximum penalty of life in prison. Jackson and Gregory Carter face a potential maximum penalty of 40 years in prison. United States District Court Judge Richard H. Kyle will determine their sentences at future hearings, yet to be scheduled.
This case is the result of an investigation conducted by the Safe Streets Task Force, with assistance from the Wisconsin State Patrol and the United States Bureau of Alcohol, Tobacco, Firearms and Explosives. Safe Streets is a FBI-sponsored task force that focuses on combating violent street crime as well as gang and drug trafficking offenses. It is being prosecuted by Assistant U.S. Attorney LeeAnn K. Bell.Federal Grand Jury Returns 30-Count Indictment Related to <br /> Boston Marathon Explosions and Murder of MIT Police Officer Sean CollierRead the Press Release
A federal grand jury returned a 30-count indictment against Dzhokhar A. Tsarnaev for his alleged role in using weapons of mass destruction at the Boston Marathon to kill three individuals and maim or seriously injure many others, as well as for using a firearm to intentionally kill Massachusetts Institute of Technology (MIT) Police Officer Sean Collier.
Tsarnaev, aka “Jahar Tsarni”, 19, a U.S. citizen residing in Cambridge, Mass., was charged today by indictment with the use of a weapon of mass destruction resulting in death and conspiracy; bombing of a place of public use resulting in death and conspiracy; malicious destruction of property resulting in death and conspiracy; use of a firearm during and in relation to a crime of violence; use of a firearm during and in relation to a crime of violence causing death; carjacking resulting in serious bodily injury; interference with commerce by threats or violence; and aiding and abetting.
“This indictment is the result of exemplary cooperation between federal prosecutors and a wide range of federal, state, and local law enforcement agencies to investigate the horrific attacks on the Boston Marathon two months ago,” said Attorney General Eric Holder. “The Department is firmly committed to achieving justice on behalf of all who were affected by these senseless acts of violence. And today’s action proves our unyielding resolve to hold accountable – to the fullest extent of the law – anyone who would threaten the American people or attempt to terrorize our great cities. I would like to thank our law enforcement partners, the FBI, the Department's National Security Division, the U.S. Attorney’s Office for the District of Massachusetts and every investigator, agent, officer, attorney, analyst, and support staff member whose courage and commitment continues to make our communities and our nation safer.”
“Today’s indictment is the result of the dedicated and collective efforts of law enforcement and intelligence partners, working with a sense of urgency and purpose to find those responsible for these deadly attacks,” said FBI Director Robert S. Mueller. “These continuing efforts reflect the pursuit of justice for those who lost their lives, and for the scores of individuals who were injured.”
“Today’s charges reflect the serious and violent nature of the events that occurred on April 15th and the tragic series of events that followed,” said Carmen Ortiz, U.S. Attorney for the District of Massachusetts. “The defendant’s alleged conduct forever changed lives. The victims, their families and this community have shown extraordinary strength and resilience in the face of this senseless violence, and it is with the hundreds of injured, as well as Krystle, Lingzi, Martin and Sean in mind that we proceed to ensure that justice is served in this case.”
“Our hearts go out to the victims of these horrendous acts of violence, and our gratitude to the courageous law enforcement officers who have given so much to protect the people of Boston and the United States,” said John Carlin, Acting Assistant Attorney General of the Justice Department’s National Security Division. “We remain committed to obtaining justice in this matter and will continue to work side by side with our partners throughout the law enforcement and intelligence communities to protect the American people from future harm.”
The indictment alleges that beginning no later than February 2013 and continuing until Tsarnaev was apprehended on April 19, 2013, Tsarnaev and his brother Tamerlan conspired to use improvised explosive devices (IEDs) against people, property and places of public use. Specifically, the indictment alleges that on April 15, 2013, during the 117th running of the Boston Marathon, Tsarnaev and his brother placed IEDs among the crowds of spectators who were cheering the runners on Boylston Street towards the marathon finish line. After placing the IEDs among the crowd, the indictment alleges, Tsarnaev and his brother detonated the bombs seconds apart, killing three people, maiming and injuring many more, and forcing a premature end to the marathon. The indictment alleges that the IEDs were constructed from pressure cookers, explosive powder, shrapnel, adhesives and other items, and were designed to shred skin, shatter bone and cause extreme pain and suffering, as well as death.
The indictment also alleges that on April 18, 2013, the FBI released photographs of Tsarnaev and his brother, identifying them as suspects in the marathon bombings. These photographs were widely disseminated on television and elsewhere. The indictment alleges that hours later on April 18, Tsarnaev and his brother, armed with five IEDs, a Ruger P95 semiautomatic handgun, ammunition, a machete and a hunting knife, drove in their Honda Civic to the MIT campus, where they shot MIT Police Officer Sean Collier and attempted to steal his service weapon.
The indictment further alleges that shortly after Tsarnaev and his brother killed Officer Collier, they carjacked a Mercedes, kidnaped the driver, and forced him to drive to a gas station, robbing him of $800 along the way. After the driver managed to escape, the brothers are alleged to have driven the carjacked vehicle to the vicinity of Laurel Street and Dexter Avenue in Watertown, Mass., where Watertown police officers located them and tried to apprehend them. The indictment alleges that the brothers fired at the police officers and used four additional IEDs against them; then Tsarnaev reentered the carjacked vehicle, drove it directly at the officers, running over his brother as he managed to escape. Tsarnaev is alleged to have hidden in a dry-docked boat in a Watertown backyard until his arrest the following night.
Seventeen of the charges authorize a penalty of up to life in prison or the death penalty. The remainder authorize a maximum penalty of life in prison or a fixed term of years. Tsarnaev is scheduled to be arraigned on July 10, 2013.
U.S. Attorney Carmen M. Ortiz; Middlesex County, Mass., District Attorney Marian T. Ryan; Suffolk County, Mass., District Attorney Daniel F. Conley; Richard DesLauriers, Special Agent in Charge of the FBI’s Boston Field Division; Boston Police Commissioner Edward Davis; Colonel Timothy P. Alben, Superintendent of the Massachusetts State Police; Kenneth J. Croke, Acting Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Boston Field Division; and Bruce M. Foucart, Special Agent in Charge of U.S. Immigration and Customs Enforcement-Homeland Security Investigations (ICE-HSI) in Boston, made the announcement today during a press conference.
This investigation was conducted by the FBI’s Boston Division, the Boston Police Department, the Massachusetts State Police, and member agencies of the Boston Joint Terrorism Task Force, which is comprised of more than 30 federal, state and local law enforcement agencies, including the ATF, ICE-HSI, U.S. Marshals Service, U.S. Secret Service, the Massachusetts Bay Transit Authority and others. In addition, the Watertown Police Department, the Cambridge Police Department, the MIT Police Department, the Boston Fire Department, the National Guard and police, fire and emergency responders from across Massachusetts and New England played critical roles in the investigation and response.
This case is being prosecuted by Assistant U.S. Attorneys William Weinreb and Aloke Chakravarty of the U.S. Attorney’s Office for the District of Massachusetts' Anti-Terrorism and National Security Unit, Nadine Pellegrini, Chief of its Major Crimes Unit, and Trial Attorneys of the U.S. Department of Justice's National Security Division's Counterterrorism Section and its Criminal Division.
The details contained in the indictment are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
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Indictment
Federal Grand Jury Returns 30-Count Indictment Related to Boston Marathon Explosions and Murder of MIT Police Officer Sean CollierRead the Press Release
BOSTON – A federal grand jury today returned a 30-count indictment against Dzhokhar A. Tsarnaev for his alleged role in using weapons of mass destruction at the Boston Marathon to kill three individuals and maim or seriously injure many others, as well as for using a firearm to intentionally kill Massachusetts Institute of Technology (MIT) Police Officer Sean Collier.
Tsarnaev (aka Jahar Tsarni), 19, a U.S. citizen residing in Cambridge, was charged by indictment with use of a weapon of mass destruction resulting in death and conspiracy; bombing of a place of public use resulting in death and conspiracy; malicious destruction of property resulting in death and conspiracy; use of a firearm during and in relation to a crime of violence; use of a firearm during and in relation to a crime of violence causing death; carjacking resulting in serious bodily injury; interference with commerce by threats or violence; and aiding and abetting.
The indictment alleges that beginning no later than February 2013 and continuing until Tsarnaev was apprehended on April 19, 2013, Tsarnaev and his brother Tamerlan Tsarnaev conspired to use improvised explosive devices (IEDs) against people, property, and places of public use. Specifically, the indictment alleges that on April 15, 2013, during the 117th running of the Boston Marathon, the brothers placed IEDs among the crowds of spectators who were cheering the runners towards the Marathon finish line. After placing the IEDs among the crowd, the indictment alleges, Tsarnaev and his brother detonated the bombs seconds apart, killing three people, maiming and injuring many more, and forcing a premature end to the Marathon. The indictment alleges that the IEDs were constructed from pressure cookers, explosive powder, shrapnel, adhesives, and other items, and were designed to shred skin, shatter bone, and cause extreme pain and suffering, as well as death.
The indictment also alleges that on April 18, 2013, the FBI released photographs of Dzhokhar Tsarnaev and his brother, identifying them as suspects in the Marathon bombings. These photographs were widely disseminated on television and elsewhere. The indictment alleges that hours later on April 18, Dzhokhar Tsarnaev and his brother, armed with five IEDs, a Ruger P95 semiautomatic handgun, ammunition, a machete, and a hunting knife, drove their Honda Civic to the MIT campus, where they shot and killed MIT Police Officer Sean Collier and attempted to steal his service weapon.
The indictment further alleges that shortly after Dzhokhar Tsarnaev and his brother killed Officer Collier, they carjacked a Mercedes, kidnapped the driver, and forced him to drive to a gas station, robbing him of $800 along the way. After the driver managed to escape, the brothers are alleged to have driven the carjacked vehicle to the vicinity of Laurel Street and Dexter Avenue in Watertown, where Watertown police officers located them and tried to apprehend them. The indictment alleges that the brothers fired at the police officers and used four additional IEDs against them. Dzhokhar Tsarnaev then reentered the carjacked vehicle and drove it directly at the officers, running over his brother as he managed to escape. Tsarnaev is alleged to have hidden in a dry-docked boat in a Watertown backyard until his arrest the following night.
Seventeen of the charges authorize a penalty of up to life in prison or the death penalty. The remaining charges authorize a maximum penalty of life in prison or a fixed term of years.
U.S. Attorney Carmen M. Ortiz; Middlesex County District Attorney Marian T. Ryan; Suffolk County District Attorney Daniel F. Conley; Richard DesLauriers, Special Agent in Charge of the Federal Bureau of Investigation’s Boston Field Division; Boston Police Commissioner Edward Davis; Colonel Timothy P. Alben, Superintendent of the Massachusetts State Police; Kenneth J. Croke, Acting Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives, Boston Field Division; Bruce M. Foucart, Special Agent in Charge of Homeland Security Investigations in Boston made the announcement today during a press conference.
This investigation was conducted by the FBI’s Boston Division, Boston Police Department, Massachusetts State Police, and member agencies of the Boston Joint Terrorism Task Force, including the Bureau of Alcohol, Tobacco, Firearms and Explosives, U.S. Immigration and Customs Enforcement – Homeland Security Investigations, U.S. Marshals Service, Massachusetts Bay Transit Authority and others. In addition, the Watertown Police Department, the Cambridge Police Department, the MIT Police Department, the Boston Fire Department, the National Guard and police, fire and emergency responders from across Massachusetts and New England played critical roles in the investigation and response.
This case is being prosecuted by Assistant U.S. Attorneys William Weinreb and Aloke Chakravarty of the U.S. Attorney’s Office for the District of Massachusetts' Anti-Terrorism and National Security Unit, Nadine Pellegrini, Chief of its Major Crimes Unit, and Trial Attorneys of the U.S. Department of Justice's National Security Division's Counterterrorism Section and its Criminal Division.
The details contained in the indictment are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
(Download Indictment )
Erie Man Sentenced to 12+ Years in Prison for Dealing CocaineRead the Press Release
ERIE, Pa. - A resident of Erie, Pennsylvania, pleaded guilty and was sentenced in federal court to 151 months in jail on his conviction of violating federal drug laws. United States Attorney David J. Hickton announced today. In addition, he was given a concurrent sentence of 37 months for violating his supervised release of a previous conviction.
Chief United States District Judge Sean J. McLaughlin imposed the sentences on Glenn Andre Hollingsworth, Jr., 33.
According to information presented to the court, on or about July 8, 2011, Hollingsworth possessed with intent to distribute and distributed approximately 76 grams of cocaine.
Assistant United States Attorney Marshall J. Piccinini prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the EAGLE task force, which is comprised of members of the Federal Bureau of Investigation, the Pennsylvania State Police, the Erie Police Department. and the Pennsylvania Attorney General, Bureau of Narcotics Investigation for the investigation leading to the successful prosecution of Hollingsworth.
El Paso Man Convicted of Making False Statements to Law Enforcement in Reporting Threats to the PresidentRead the Press Release
A jury in El Paso, Texas, today convicted Keith Nicholas Aiken, 31, of making false statements to law enforcement while serving as a civilian military employee stationed in Afghanistan, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney for the Western District of Texas Robert Pitman; Special Agent in Charge David Iacovetti of U.S. Secret Service Honolulu Field Office; and Resident Agent in Charge Ed Garcia of the U.S. Secret Service El Paso Resident Office
On Jan. 9, 2013, Aiken was charged in U.S. District Court in the Western District of Texas with two counts of making false statements to law enforcement.
According to evidence presented at trial, on Jan. 13, 2011, Aiken reported to the Deputy Command Office for the 4-401st Army Field Support Brigade in Kandahar, Afghanistan, that a co-worker had threatened to shoot President Obama and threatened that a friend was prepared to blow up Air Force One. Aiken repeated that statement to the U.S. Army Criminal Investigation Command (CID) and later to the U.S. Secret Service. Evidence introduced at trial established that to investigate the threat, the Secret Service deployed agents to Afghanistan, diverting resources from a significant investigation. The trial evidence further showed that approximately six weeks after reporting the alleged threat, Aiken confessed that he had fabricated the story because the co-worker was opinionated and had made statements that offended Aiken, and he was hoping that the investigation of the threat would lead to the co-worker’s transfer off the base.
At sentencing, scheduled for Sept. 13, 2013, Aiken faces a maximum penalty of five years in prison on each count.
The case was prosecuted by Senior Trial Attorney Teresa Wallbaum of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorney Daphne Newaz of the Western District of Texas (El Paso Division). The case was investigated by the U.S. Secret Service’s Honolulu, Hawaii and El Paso, Texas offices.
East Liberty Man Pleads Guilty to Bank Fraud ChargesRead the Press Release
PITTSBURGH, Pa. - A resident of Pittsburgh, Pa., pleaded guilty to bank fraud, United States Attorney David J. Hickton announced today.
Brandon Lee Price, 29, of East Liberty, pleaded guilty to four counts before United States District Judge Terrence McVerry.
According to information presented to the court, Price defrauded Citibank, N.A. by causing the bank to send account information of Citibank customer P.A. to Price who then tried to use the customer's funds.
Judge McVerry scheduled sentencing for Sept. 30, 2013, at 1:30 p.m. The law provides for a maximum total sentence of up to 30 years in prison, a fine of up to $1,000,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
The Federal Bureau of Investigation conducted the investigation leading to the indictment in this case.
District Women Sentenced to 30 Months in Prison for Two Bank Robberies in Northwest Washington-Defendant Threatened Tellers and Robbed Two Banks Within 20 Minutes-Read the Press Release
WASHINGTON - Mercedes Romero, 36, of Washington, D.C., was sentenced today to a 30-month prison term for robbing two banks in Northwest Washington on the same day, announced U.S. Attorney Ronald C. Machen Jr., Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office, and Cathy L. Lanier, Chief of the Metropolitan Police Department (MPD).
Romero pled guilty in April 2013 to two counts of bank robbery. She was sentenced by the Honorable John D. Bates. Upon completion of her prison term, Romero will be placed on three years of supervised release. In addition, she must pay $1,596 in restitution to the two banks.
According to the government’s evidence, on Feb. 4, 2013, Romero robbed two banks within 20 minutes by producing demand notes that threatened bank tellers at the institutions.
First, at 9:10 a.m., she entered a PNC Bank in the 4200 block of Wisconsin Avenue NW, stopping briefly at the lobby counter, then proceeding to the teller window. She provided the bank teller with a demand note and a blank bank deposit slip. According to the teller, the demand note stated “give me all $100s, $50s, and $20s or I will kill you after work.” Romero then instructed the teller to return the demand note after receiving the cash. Later, an audit of the teller’s cash box determined that the teller provided the defendant with $1,048 in cash.
Then, at 9:28 a.m., Romero robbed the Bank of America in the 3400 block of Connecticut Avenue NW. She entered the bank, again stopping briefly at the lobby counter before proceeding to the teller’s window. Once again, she provided the teller with a demand note and a blank bank deposit slip. At that time, she also told the teller that she had a gun. The teller further recalled that the demand note stated “I have a gun. Give me all of your 20s and 50s. Act normal. Don’t sound the alarm. I’m going to kill you at the end of the day if you say anything.” A bank audit of the teller’s cash box determined that the teller provided the defendant with $548 in cash.
An investigation of the robberies was conducted and the defendant’s picture was displayed on television and print media. Romero was charged with the crimes on Feb. 21, 2013.
In announcing today’s sentence, U.S. Attorney Machen, Assistant Director in Charge Parlave and Chief Lanier commended the actions of the FBI agents and MPD officers who participated in the investigation, arrest and prosecution. They also acknowledged the work of Assistant U.S. Attorney Emory V. Cole, who investigated and prosecuted the case.
13-232Cullman Car Dealer Pleads Guilty to Violating Legal Protections for Active-Duty Service MembersRead the Press Release
BIRMINGHAM – A Cullman used car dealer pleaded guilty today for violating federal protections for active-duty military service members by refusing to reduce the loan interest rate and repossessing the vehicle he sold to a man who was later deployed overseas with the Alabama National Guard, announced U.S. Attorney Joyce White Vance and FBI Special Agent in Charge Richard D. Schwein Jr.CARL RALPH NUSS, 75, entered his guilty plea before U.S. Magistrate Judge Harwell G. Davis III to the two counts of the March indictment charging him with violating the Servicemembers Civil Relief Act. The act provides certain protections for service members called to active duty, including interest rate limitations and protection from civil suit, repossession and eviction.
Nuss entered his plea without a plea agreement with the government. He is scheduled for sentencing Sept. 12.
Nuss is owner of North Alabama Wholesale Autos in Cullman. In February 2011, he sold a 2002 Ford Sport-Trac to a 22-year-old man. The dealership sold the vehicle for $9,746 and, after a $2,200 down payment, financed the balance at 25 percent interest per year, according to the indictment.
In May 2012, the Guardsman, a private first class, was called to active duty in Afghanistan. In July 2012, according to the indictment, Nuss received a letter from the Guardsman requesting that the dealership reduce the interest rate on his car loan from 25 percent to 6 percent, as required by the relief act. Nuss never reduced the interest rate and, two days after receiving the letter, hired two men to repossess the guardsman's truck. The two men repossessed the vehicle without a court order, in violation of the Servicemembers Civil Relief Act, the indictment says.
The maximum penalty for each count is one year in prison and a $100,000 fine.
The FBI investigated the case, which Assistant U.S. Attorney George A. Martin Jr. is prosecuting.
Crawfordville Resident Indicted for Firearm OffensesRead the Press Release
TALLAHASSEE, FLORIDA – United States Attorney Pamela C. Marsh announced today thatAlbert Hendrik Van der Merwe, 46, also known as “Henk Van der Merwe,” has been charged by a federal grand jury sitting in Gainesville, Florida for importing silencers under fraudulent invoices, for receiving unregistered silencers, and for possession of a machinegun. Trial will be held in Tallahassee, Florida on September 3, 2013.
Van der Merwe was arrested on a related complaint on June 5, 2013. That complaint alleged that three silencers were found in a package sent to Van der Merwe from South Africa, on about April 3, 2013. The invoice described the devices as “motorcycle dampeners used in motorcycle exhausts.” Agents delivered the package and then executed a search warrant. A nine millimeter Uzi carbine was seized because it was compatible with one of the silencers. The carbine was later determined to be fully automatic.
Federal law prohibits the receipt or possession of a machinegun or silencer, unless it is registered in the National Firearms Registration and Transfer Record. If convicted, Van der Merwe faces up to twenty years in prison for importing merchandise under a fraudulent invoice, and up to ten years in prison for receiving unregistered silencers and for possessing a machinegun. He also faces up to a three year term of supervised release and fines of up to $250,000 for each charge.
U.S. Attorney Marsh praised the joint efforts of Homeland Security Investigations and the Bureau of Alcohol, Tobacco, Firearms, and Explosives, whose investigation led to the indictment in this case. Assistant U.S. Attorney Michael T. Simpson is prosecuting this case.
An indictment is merely an allegation by a grand jury that a defendant has committed a violation of federal criminal law and is not evidence of guilt. All defendants are presumed innocent and entitled to a fair trial, during which it will be the government’s burden to prove guilt beyond a reasonable doubt at trial in a court of law.
Couple Indicted for Stealing Hundreds of Identities to Claim over $600,000 in False Tax RefundsRead the Press Release
ATLANTA – Justin Cody, also known as “Decatur Slim,” was arraigned on federal charges of conspiracy to commit theft of public funds, theft of public funds, and aggravated identity theft.
“Fraud schemes in which criminals file fraudulent tax returns and obtain fraudulent refunds using the stolen identities of innocent persons have become all too common in recent years,” said United States Attorney Sally Quillian Yates. “These defendants are charged with engaging in criminal activity that not only harmed the U.S. Treasury, but that also undermined financial security of the individuals whose identities were stolen.”“These unscrupulous defendants thought they had figured out a clever scheme to thwart the IRS and steal from American taxpayers,” said Veronica Hyman-Pillot, Special Agent in Charge, IRS Criminal Investigation. “IRS Criminal Investigation has made investigating refund fraud and identity theft a top priority and we will vigorously pursue those who undermine the integrity of the U.S. tax system.”
“The indictment of Mr. Cody and Ms. Wilmore further illustrates the FBI’s efforts and commitment toward not only protecting public funds but protecting the public from those who would prey on them,” stated Mark F. Giuliano, Special Agent in Charge, FBI Atlanta Field Office. “The FBI will continue to work with its various law enforcement partners in combating identity theft and tax refund fraud.”
According to United States Attorney Yates, the charges and other information presented in court: From as early as February 2013 to May 2013, Justin Cody, also known as “Decatur Slim,” and Aeshia Wilmore participated in a scheme to defraud the Department of the Treasury by filing hundreds of fraudulent income tax returns using stolen identities. This is commonly called stolen identity refund fraud. Cody used the electronic filing identification numbers of at least two tax preparer businesses, as well as the stolen identification information of hundreds of victims, along with fake wage and withholding information, to prepare the fraudulent tax returns which claimed over $600,000 in tax refunds. After the refunds were processed, Cody had the refunds applied to blank prepaid debit cards that he and Wilmore used at various ATM machines throughout the Atlanta area.
Cody, 32, of Decatur, Ga., and Wilmore, 24, of Atlanta, Ga. were indicted by a federal grand jury on June 25, 2013. Cody has been detained. Wilmore’s arraignment date is pending. The conspiracy to commit theft of public funds carries a maximum sentence of five years in prison. Each substantive count of theft of public funds carries a maximum sentence of ten years in prison. Each of the aggravated identity theft charges carry a mandatory minimum two-year consecutive sentence to any other sentence imposed. Each count also carries a fine of up to $250,000. The United States is also seeking the forfeiture of all funds derived from or involved in this scheme.
The public is reminded that criminal charges are only allegations. A defendant is presumed innocent of the charges and it will be the government’s burden to prove a defendant’s guilt beyond a reasonable doubt at trial.
This case was investigated by Special Agents of the Internal Revenue Service Criminal Investigation and the Federal Bureau of Investigation.
Assistant United States Attorney Karlyn J. Hunter is prosecuting the case.
For further information please contact the U.S. Attorney’s Affairs Office at [email protected] or (404) 581-6016. The Internet address for the HomePage for the U.S. Attorney’s Office for the Northern District of Georgia is www.justice.gov/usao/gan.
Columbus Junction Man Sentenced to 3 Years of Probation for Copyright InfringementRead the Press Release
DAVENPORT, IA – On June 26, 2013, Arturo Eduardo Cantu, age 50, of Columbus Junction, Iowa, was sentenced to 3 years of probation for copyright infringement, announced United States Attorney Nicholas A. Klinefeldt. Chief United States District Judge James E. Gritzner also imposed a $3,000 fine.
In July of 2012, Cantu was encountered by law enforcement with over 500 DVDs for sale in a parking lot in Muscatine, Iowa. A subsequent search of Cantu’s residence revealed numerous computers, external hard drives, DVD burners, more than 8,000 blank DVDs, and approximately 1,000 illegally copied DVDs.
This case was investigated by Homeland Security Investigations, and was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
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Colorado U.S. Attorney's Office, in Cooperation with the Food and Drug Administration, Seizes over 1,600 Websites Selling Counterfeit or Misbranded MedicationRead the Press Release
DENVER – U.S. Attorney John Walsh announced today that the Colorado U.S. Attorney’s Office, as part of International Internet Week of Action, and in conjunction with Interpol’s Operation Pangea VI, obtained seizure warrants in the United States District Court for the District of Colorado in Denver for over 1,600 websites that were illegally selling counterfeit or misbranded drugs purported to be brand name pharmaceuticals. The seizure of those sites was executed by the Food and Drug Administration’s Office of Criminal Investigations last week.
Many of these websites operated as a part of an online network of pharmaceutical sites, which falsely purported that its websites were legitimate online pharmacies. Many of these sites falsely claimed to be hosted in Canada, while others falsely claimed to be affiliated with major U.S. pharmacy retailers by using the names of those retailers in the website names. The organizers also used bogus licenses and certifications in an attempt to convince U.S. consumers to purchase drugs that the sites falsely advertised as “brand name” and “FDA Approved.” Drugs purchased from these sites proved not to be from Canada, and they were neither brand name drugs nor were they FDA approved. The shipments originated from either India or Singapore. The FDA’s Office of Criminal Investigations Cybercrime Investigations Unit banner is now displayed on all seized 1,677 websites to alert consumers that the sites were identified as engaging in illegal activity. Below is a list of three of the website names seized:
www.canadianhealthandcaremall.com
www.walgreens-store.com
www.c-v-s-pharmacy.comMedications offered and sold by these websites included the following: Avandaryl (a diabetes and heart drug), Celebrex (a non-steroidal anti-inflammatory product used to treat arthritis and to manage pain), Levitra and Viagra (erectile dysfunction drugs), and Clozapine (a severe schizophrenia medication).
“Ordering a prescription medication from a website that doesn’t require a prescription is dangerous,” said Colorado U.S. Attorney John Walsh. “That’s both because a doctor’s authorization and supervision is important, but also because overseas drug manufacturers may not be complying with FDA safety rules. The sites seized as a part of this important operation were selling drugs manufactured overseas without FDA supervision to people who didn’t necessarily have prescriptions, and who can’t be sure they are actually receiving the drug they thought they were ordering. Thanks to the hard work of the FDA Office of Criminal Investigations and the Assistant U.S. Attorneys from the District of Colorado, over 1,600 websites have been shut down ensuring that the public does not accidentally purchase a counterfeit or misbranded drug.”
“Protecting U.S. consumers is the agency’s top priority. We know that illegal online pharmacies put U.S. consumers’ health at risk,” said John Roth, Director of the FDA’s Office of Criminal Investigations. “While this is an ongoing battle in the United States and abroad, the agency nonetheless will not cease its criminal law enforcement and regulatory efforts and is pleased to participate in Operation Pangea to protect consumers and strengthen relationships with international partners who join the FDA in this fight.”
During Operation Pangea VI, the largest Internet-based action of its kind in the United States, the U.S. Attorney’s Office for the District of Colorado and the FDA targeted websites selling unapproved and potentially dangerous prescription medicines that could pose significant public health risks. These medicines should only be used with a valid prescription and under the supervision of a licensed health care provider. In addition, these online-purchased products bypass existing safety controls required by the FDA, and protections provided when used under a doctor’s care.
In addition to health-related risks, members of the public who used these websites also potentially exposed themselves to financial risks, including credit card fraud, identity theft or computer viruses. If you believe you have been a victim of these websites please visit www.fda.gov/oci.
The United States portion of this investigation was handled by the FDA’s Office of Criminal Investigations.
Assistant U.S. Attorneys Tonya Andrews, Ken Harmon and Judith Smith, chief of the Special Prosecutions Section, assisted in obtaining the seizure warrants.
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Buffalo Woman Indicted for Concealing a Person from ArrestRead the Press Release
BUFFALO, N.Y.--U.S. Attorney William J. Hochul, Jr. announced today that a federal grand jury in Buffalo has returned a one count indictment charging Amber Pawlak, 21, of Buffalo, N.Y., with concealing a person from arrest. The charge carries a maximum penalty of five years in prison, a fine of $250,000 or both.
Assistant U.S. Attorney Trini E. Ross, who is handling the case, stated that in January 2013, law enforcement officers were attempting to locate defendant Clifton Jackson in order to execute a federal arrest warrant. According to the indictment, on three occasions, Pawlak denied knowing the whereabouts of Clifton Jackson when in fact she did have contact with the defendant.
In April 2013, Clifton Jackson was charged in a 66-count indictment with conspiracy to unlawfully use Social Security numbers, filing of false tax returns in 2011, and aggravated identity theft.
The indictment is the culmination of an investigation on the part of Special Agents of the Internal Revenue Service - Criminal Investigation Division, under the direction of Special Agent- in-Charge Toni M. Weirauch, and the United States Postal Inspection Service under the direction of Kevin Niland, Inspector in Charge, Boston Division.
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.Buffalo Grandmother who Headed Family Drug Organization Pleads Guilty to Drug ConspiracyRead the Press Release
BUFFALO, N.Y.-- U.S. Attorney William J. Hochul, Jr. announced today that Theresa Anderson, 56, of Buffalo, N.Y. pleaded guilty to conspiracy to distribute and distribution of crack cocaine before U.S. District Court Judge, Richard J. Arcara. The charges carry a mandatory minimum penalty of 10 years in prison, a maximum of life and a $8,000,000 fine.
Assistant U.S. Attorney Melissa Marangola, who is handling the case, stated that between 2000 and February 2012, Anderson headed an illegal narcotics drug trafficking organization that controlled drug sales on Swinburne and Deshler Streets in the City of Buffalo. The defendant employed several family members to sell crack cocaine on a daily basis in the neighborhood. In order to monopolize narcotics sales in the area, the defendant threatened and intimidated rival narcotics traffickers and even purchased several homes in the area which were used for selling and storing the illegal narcotics.
"Just as Theresa Anderson and her family targeted and held a city neighborhood hostage, our Office, along with our law enforcement partners will continue to target any individual or groups of individuals who would consider similar behavior," said U.S. Attorney Hochul. "To the residents of all city neighborhoods, if you see something, please say something. By working together, law enforcement and community members can protect families and properties."
Anderson was arrested in February 2012 along with eight others: Steven Butler; Dion Anderson; Melvin Calhoun; Anquensha Hodge, a/k/a Anne Anderson; Wymiko Anderson, a/k/a Red; Toshia Hodge, a/k/a Toshia Anderson; Tajia Anderson, a/k/a Porkchop; and Leo Mellerson; all of Buffalo. Five of these are either children or grandchildren of Anderson. A sixth defendant is Anderson's husband and the two others are boyfriends of Andersons' daughters. Anderson is the fourth defendant to be convicted.
Sentencing is scheduled for October 8, 2013 at 12:30 p.m. before Judge Arcara.
The plea is the culmination of an investigation on the part of the Drug Enforcement Administration, under the direction of Brian R. Crowell, Special Agent in Charge, New York Field Division, the Buffalo Police Department, under the direction of Commissioner Daniel Derenda, and the New York State Police, under the direction of Major Michael Cerretto.Bricktown Gang Member Pleads GuiltyRead the Press Release
As Part of Plea Jarrell Williams Admits to Previously Unsolved Homicide
SYRACUSE, NEW YORK - United States Attorney Richard S. Hartunian announces that JARRELL WILLIAMS, age 22, of Syracuse, pled guilty today in U.S. District Court in Syracuse to an indictment which charged him and 13 others with conspiring to exploit their membership in the Bricktown Gang to engage in a pattern of racketeering activity which included multiple acts of murder, drug trafficking, and robbery. Eleven other defendants have already pled guilty and the charges against two others remain pending.
As part of his plea WILLIAMS admitted that the Bricktown Gang has operated within the City of Syracuse from at least 2000 through the present and that members of the Bricktown Gang: (1) maintain a specific geographic territory within the City of Syracuse in which only gang members can sell crack cocaine, cocaine and marijuana; (2) protect that exclusive crack distribution territory with violence if necessary; (3) obtain drugs from suppliers in New York City and elsewhere; (4) project a very violent attitude and respond to violence with violence in order to preserve their stature in the gang community; (5) on occasion use hand signs, wear blue colored bandanas and have tattoos, all of which are intended to signify their gang membership; (6) use criteria such as willingness to use violence, ability to sell drugs, and familial connections to determine membership; and (7) routinely carry and use firearms in connection with their gang activity.
WILLIAMS also admitted as part of his plea that he possessed handguns on a regular basis during the relevant time period. He also admitted that: (1) on September 4, 2007 he shot a rival gang member in the back in the 1000 block of Cannon Street; and (2) later that same evening he killed Anthony Ford and wounded a female victim in the head by firing several shots from a handgun at them. The Ford homicide was heretofore unsolved.
WILLIAMS is scheduled to be sentenced on October 30, 2013. He faces up to life imprisonment, a $250,000 fine, and up to five years of supervised release following any period of incarceration.
This prosecution resulted from a long-term investigation conducted by the Syracuse Gang Violence Task Force, which is comprised of agents and detectives from the following agencies: United States Department of Justice, Bureau of Alcohol, Tobacco, and Firearms (Syracuse Office), the Syracuse Police Department, the Onondaga County Sheriff's Department, the New York State Troopers, and the United States Marshals Service. The Onondaga County District Attorney’s Office also assisted in the investigation.
Further questions or inquiries may be directed to Assistant U.S. Attorney, John M. Katko, who is handling the case, at (315) 448-0672.
Bank and Pharmacy Robber Sentenced to 44 YearsRead the Press Release
Raynard Versatile Crowe, 31, formerly of Hazel Park was sentenced yesterday to 535 months in federal prison, following his conviction on March 21, 2013 by a jury in Detroit on charges of bank robbery, pharmacy robbery, using a firearm during a crime of violence, felon in possession of a firearm and conspiracy, U.S. Attorney Barbara L. McQuade announced.
McQuade was joined in the announcement by Special Agent in Charge Robert D. Foley, III of the Federal Bureau of Investigation (“FBI”).
The sentence was handed down by United States District Judge Arthur J. Tarnow.
The evidence presented at trial established that Crowe, on parole for assault with intent to rob while armed, conspired with six other people to commit bank robbery and pharmacy robbery with firearms during the Spring and Summer of 2011. The crew robbed the Grosse Pointe Woods branch of Citizens Bank on May 18, 2011 and Ferndale Pharmacy on July 11, 2011.U.S. Attorney McQuade said, “Violent criminals who use guns can expect to face long prison sentences. Armed robberies risk a loss of life that we cannot tolerate.”
FBI Special Agent in Charge Foley said, "Violent criminals who use guns to threaten lives during robberies and other crimes will face severe penalties for their illegal acts. The FBI is committed to working with it's law enforcement partners to ensure the safety of our communities."The case was investigated by Special Agents of the FBI, the Warren Police Department, the Ferndale Police Department and the Grosse Pointe Woods Department of Public Safety. It was prosecuted by Assistant United States Attorney Kenneth Chadwell.
Aryan Brotherhood of Texas Gang Member Sentenced in <br /> Houston to 150 Months in Prison for Role in Racketeering ConspiracyRead the Press Release
A member of the Aryan Brotherhood of Texas (ABT) was sentenced today to serve 150 months in prison for his role in the ABT’s criminal enterprise, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney Kenneth Magidson of the Southern District of Texas.
James Marshall Meldrum, aka “Dirty,” 40, of Dallas, was sentenced today by U.S. District Judge Sim Lake in the Southern District of Texas. In addition to his prison term, Meldrum was sentenced to serve five years of supervised release.
On Jan. 31, 2013, Meldrum pleaded guilty to one count of conspiracy to commit racketeering offenses (RICO).
According to court documents, Meldrum and other ABT gang members and associates agreed to commit multiple acts of murder, robbery, arson, kidnapping and narcotics trafficking on behalf of the ABT gang. Meldrum and numerous ABT gang members met on a regular basis at various locations throughout Texas to report on gang-related business, collect dues, commit disciplinary assaults against fellow gang members and discuss acts of violence against rival gang members, among other things.
Meldrum admitted to being an ABT gang member and to trafficking in methamphetamine, as well as to severely beating a subordinate gang member.
According to the superseding indictment, the ABT was established in the early 1980s within the Texas prison system. The gang modeled itself after and adopted many of the precepts and writings of the Aryan Brotherhood, a California-based prison gang that was formed in the California prison system during the 1960s. According to the superseding indictment, previously, the ABT was primarily concerned with the protection of white inmates and white supremacy/separatism. Over time, the ABT has expanded its criminal enterprise to include illegal activities for profit.
Court documents allege that the ABT enforced its rules and promoted discipline among its members, prospects and associates through murder, attempted murder, conspiracy to murder, arson, assault, robbery and threats against those who violate the rules or pose a threat to the enterprise. Members, and oftentimes associates, were required to follow the orders of higher-ranking members, often referred to as “direct orders.”
According to the superseding indictment, in order to be considered for ABT membership, a person must be sponsored by another gang member. Once sponsored, a prospective member must serve an unspecified term, during which he is referred to as a prospect, while his conduct is observed by the members of the ABT.
Meldrum is one of 36 defendants charged with conducting racketeering activity through the ABT criminal enterprise, among other charges.
This case is being investigated by a multi-agency task force consisting of the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Drug Enforcement Administration; FBI; U.S. Marshals Service; Federal Bureau of Prisons; U.S. Immigration and Customs Enforcement Homeland Security Investigations; Texas Rangers; Texas Department of Public Safety; Montgomery County, Texas, Sheriff’s Office; Houston Police Department-Gang Division; Texas Department of Criminal Justice – Office of Inspector General; Harris County, Texas, Sheriff’s Office; Tarrant County, Texas, Sheriff’s Office; Atascosa County, Texas, Sheriff’s Office; Orange County, Texas, Sheriff’s Office; Waller County, Texas, Sheriff’s Office; Alvin, Texas, Police Department; Carrollton, Texas, Police Department; Mesquite Texas, Police Department; Montgomery County District Attorney’s Office; and the Atascosa County District Attorney’s Office.The case is being prosecuted by the Criminal Division’s Organized Crime and Gang Section and the U.S. Attorney’s Office of the Southern District of Texas.
Aryan Brotherhood of Texas Gang Member Sentenced to 150 Months in Prison for Role in Racketeering ConspiracyRead the Press Release
HOUSTON – A member of the Aryan Brotherhood of Texas (ABT) was sentenced today to serve 150 months in prison for his role in the ABT’s criminal enterprise, announced United States Attorney Kenneth Magidson and Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division.
James Marshall Meldrum, aka “Dirty,” 40, of Dallas, was sentenced today by U.S. District Judge Sim Lake in the Southern District of Texas. In addition to his prison term, Meldrum was sentenced to serve five years of supervised release and was ordered to pay a $2000 fine.On Jan. 31, 2013, Meldrum pleaded guilty to one count of conspiracy to commit racketeering offenses.
According to court documents, Meldrum and other ABT gang members and associates agreed to commit multiple acts of murder, robbery, arson, kidnapping and narcotics trafficking on behalf of the ABT gang. Meldrum and numerous ABT gang members met on a regular basis at various locations throughout Texas to report on gang-related business, collect dues, commit disciplinary assaults against fellow gang members and discuss acts of violence against rival gang members, among other things.
Meldrum admitted to being an ABT gang member and to trafficking in methamphetamine and severely beating a subordinate gang member.
According to the superseding indictment, the ABT was established in the early 1980s within the Texas prison system. The gang modeled itself after and adopted many of the precepts and writings of the Aryan Brotherhood, a California-based prison gang that was formed in the California prison system during the 1960s. According to the superseding indictment, previously, the ABT was primarily concerned with the protection of white inmates and white supremacy/separatism. Over time, the ABT has expanded its criminal enterprise to include illegal activities for profit.
Court documents allege that the ABT enforced its rules and promoted discipline among its members, prospects and associates through murder, attempted murder, conspiracy to murder, arson, assault, robbery and threats against those who violate the rules or pose a threat to the enterprise. Members, and oftentimes associates, were required to follow the orders of higher-ranking members, often referred to as “direct orders.”
According to the superseding indictment, in order to be considered for ABT membership, a person must be sponsored by another gang member. Once sponsored, a prospective member must serve an unspecified term, during which he is referred to as a prospect, while his conduct is observed by the members of the ABT.
Meldrum is one of 36 defendants charged with conducting racketeering activity through the ABT criminal enterprise, among other charges.
This case is being investigated by a multi-agency task force consisting of the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Drug Enforcement Administration; FBI; U.S. Marshals Service; Federal Bureau of Prisons; Homeland Security Investigations; Texas Rangers; Texas Department of Public Safety; Montgomery County Sheriff’s Office; Houston Police Department-Gang Division; Texas Department of Criminal Justice – Office of Inspector General; sheriff’s offices in Harris, Tarrant, Atascosa, Orange and Waller Counties; police departments in Alvin, Carrollton and Mesquite Texas; as well as the Montgomery and Atascosa County District Attorney’s Offices.The case is being prosecuted by the U.S. Attorney’s Office of the Southern District of Texas and the Criminal Division’s Organized Crime and Gang Section.
Area Businessman Sentenced for Selling SpiceRead the Press Release
BOISE –William Oldenburg, 66, of Eagle, Idaho, was sentenced today in United States District Court to three years of probation for conspiracy to distribute a controlled substance analogue and conspiracy to structure transactions, U.S. AttorneyWendy J. Olson announced. U.S. District Judge Edward J. Lodge also ordered Oldenburg to forfeit $580,000, and pay a $5,000 fine. Additionally, Oldenburg will spend the next eight weekends in the Ada County Jail, to be followed by six months home detention, and 200 hours of community service. He pleaded guilty to the charge on March 25, 2013.
According to court documents, Oldenburg is the owner of Gary's Dream, LLC, which operates Boise Beverage and Tobacco and The Pit Stop Express. The businesses, commonly referred to as “head shops,” are engaged in the unlawful sale of drug paraphernalia to drug users and drug traffickers. Items of drug paraphernalia were typically sold at the businesses under the guise of “tobacco products,” or with claims of other “legitimate” uses. According to the indictment, Oldenburg referred to much of the drug paraphernalia as “smoking accessories,” to be used only to smoke tobacco. However, virtually all of the smoking devices sold by Oldenburg were commonly used to ingest marijuana, hashish, and/or other illegal drugs, not tobacco.
Oldenburg admitted that beginning on March 1, 2011, and continuing through May 10, 2012, he knowingly conspired with other persons to distribute and possess with intent to distribute at least 40 kilograms of a mixture and substance containing a detectable amount of AM-2201 and UR-144, Schedule I controlled substance analogues, knowing the substance was intended for human consumption. Oldenburg further admitted that between at least July 2011, and November 2012, he conspired with others to conduct a series of financial transactions involving the proceeds of the unlawful activity, in order to evade reporting requirements under federal law.
Co-defendant Donovan Johns, 38, of Meridian, Idaho, pleaded guilty on May 14, 2013, to conspiracy to sell, offer for sale, and transport drug paraphernalia and conspiracy to structure transactions. Sentencing is set for July 29, before Judge Lodge.
Oldenburg and Johns are among the 17 people charged last year as part of Operation Not for Human Consumption, which targeted illegal sales of drug paraphernalia and “spice” at 13 Treasure Valley businesses. According to search warrant affidavits, nine of the 13 businesses were openly selling “spice,” a substance that tested positive for AM-2201. The DEA has determined that AM-2201 is a controlled substance analogue. “Spice,” a synthetic form of cannabis, which is a psychoactive herbal and chemical product that, when consumed, mimics the effects of cannabis. In the spring of 2011, the Idaho Legislature criminalized the sale of “spice” under state law. In March of 2011, the Drug Enforcement Administration placed five synthetic cannabinoids into Schedule I of the Controlled Substances Act. It is against federal law to sell or offer for sale any paraphernalia that is primarily intended or designed for drug use, regardless of whether the seller advises their customers that the paraphernalia is for tobacco use only. The businesses are commonly referred to as “head shops.”
Operation Not for Human Consumption includes the cooperative law enforcement efforts of the Drug Enforcement Administration, Internal Revenue Service-Criminal Investigation, Bureau of Alcohol, Tobacco, Firearms and Explosives, Federal Bureau of Investigation, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), Boise Police Department, Ada County Sheriff's Office, Canyon County Sheriff's Office, Nampa Police Department, Meridian Police Department, and the Canyon County Prosecutor's Office. The U.S. Marshals Service and Idaho State Police provided assistance.
Acoma Pueblo Man Sentenced to Forty-One Months in Federal Prison for Child Sex Abuse ConvictionRead the Press Release
ALBUQUERQUE –Terrence Joseph Kie, 34, a member and resident of the Acoma Pueblo, N.M., was sentenced yesterday to 41 months in federal prison to be followed by seven years of supervised release for his child sexual abuse conviction. Kie also will be required to register as a sex offender when he completes his prison sentence.
Kie’s sentence was announced by U.S. Attorney Kenneth J. Gonzales, DuWayne W. Honahni, Sr., Special Agent in Charge of District IV of the BIA’s Office of Justice Services, and Chief Vincent Mariano of the Acoma Tribal Police Department.
Kie was charged with the child sex abuse in an indictment that was filed In Sept. 2012. He was arrested on Sept. 13, 2012, and has been in federal custody since that time. On Dec. 17, 2012, Kie pleaded guilty to abusive sexual contact with a child under the age of 12 and admitted that on Aug. 9, 2011, he had unlawful sexual contact with a nine-year-old child by placing his hand on the child’s clothed genitalia and touching the child’s clothed genitalia. Kie admitted that this unlawful conduct occurred on Acoma Pueblo.
The case was investigated by the Southern Pueblos Agency of the BIA’s Office of Justice Services and the Acoma Police Department, and was prosecuted by Assistant U.S. Attorney Niki Tapia-Brito.
<br /> El Departamento de Justicia Llega a un Acuerdo con Minorista Nacional para Solucionar Prácticas Injustas en el Empleo Relacionadas a Inmigración<br />Read the Press Release
WASHINGTON– El Departamento de Justicia anunció hoy que ha llegado a un acuerdo con Macy’s Retail Holdings y otras compañías de Macy (Macy’s) que resuelve los alegatos que la empresa violó la disposición contra la discriminación de la Ley de Inmigración y Nacionalidad (INA). Macy’s cuenta con aproximadamente 180.000 empleados en los Estados Unidos.
La investigación se inició sobre la base de varias llamadas a la línea directa del trabajador de la Oficina del Consejero Especial Para Prácticas Injustas en el Empleo Relacionadas a Inmigración (OSC) del Departamento de Justicia en lo que se refiere a las prácticas de empleo injustas relacionadas potencialmente con la inmigración. En base a esta investigación, el Departamento determinó que Macy’s está involucrado en prácticas documentales injustas contra empleados inmigrantes autorizados para trabajar durante el proceso de re-verificación de elegibilidad de empleo y que algunos empleados, en consecuencia, han sido afectados económicamente a través de la pérdida de su puesto de trabajo o de su antigüedad en el puesto. La disposición contra la discriminación de la INA prohíbe a los empleadores tratar a los trabajadores de manera diferente en el proceso de verificación o re-verificación de elegibilidad de empleo al exigir documentos adicionales o diferentes, o limitando la elección de documentos del trabajador, en base a un estado migratorio o a un origen nacional.
Según el acuerdo, Macy’s se compromete a revisar sus políticas y procedimientos de re-verificación de elegibilidad de empleo, y a capacitar a su personal de recursos humanos en todo el país en lo relativo a la disposición contra la discriminación de la INA. Macy’s también se compromete a pagar 175.000 dólares en multas civiles a los Estados Unidos, y a crear un fondo de devolución de 100.000 dólares para compensar a cualquier trabajador que haya perdido sus salarios o su antigüedad en el puesto como resultado de dichas prácticas. En virtud de este acuerdo, las prácticas de verificación de elegibilidad de empleo de Macy’s estarán sujetas a la supervisión del Departamento y deberán presentar sus informes correspondientes por un período de dos años.
"Los empleadores deben asegurarse de que están siguiendo los procedimientos correctos durante la re-verificación de autorización de empleo de los no-ciudadanos americanos ", dijo Gregory Friel, Asistente del Representante del Procurador de la Nación en la División de Derechos Civiles. "Dado el tamaño de su fuerza de trabajo, los empleadores nacionales están particularmente obligados a evaluar sus políticas y prácticas y a hacer uso de la asistencia técnica gratuita de la División para asegurar el cumplimiento de la disposición contra la discriminación de la INA."
OSC es responsable de hacer cumplir la disposición contra la discriminación de la INA. El caso fue manejado por Liza Zamd y Ronald Lee, abogados litigantes de la OSC. Para obtener más información acerca de la protección contra la discriminación en el empleo bajo las leyes de inmigración, llame a la línea directa del trabajador OSC, 1-800-255-7688 (1-800-237-2525, TTY para personas con problemas de audición), llame a la línea directa del empleador de la OSC, 1-800 -255-8155 (1-800-362-2735, TTY para personas con problemas de audición), inscríbase en un seminario gratuito en www.justice.gov/about/osc/webinars.php, escriba a [email protected] o visite la página web www.justice.gov/crt/about/osc.
15 Individuals Indicted for Drug TraffickingRead the Press Release
SAN JUAN, Puerto Rico – Yesterday a federal grand jury in the District of Puerto Rico returned an indictment against 15 defendants charged with conspiracy to possess with intent to distribute cocaine, announced Rosa Emilia Rodríguez-Vélez, United States Attorney for the District of Puerto Rico. The defendants used the United States Postal Service to send narcotics and money derived from the drug trafficking activities via air mail.
According to the indictment, the object of the conspiracy was to possess with intent to distribute cocaine in Puerto Rico for further distribution in the continental United States, specifically New York and Connecticut, for significant financial gain and profit. It was part of the manner and means of the conspiracy that the defendants and their associates would conceal kilogram quantities of controlled substances in different containers to include light bright toy boxes. The defendants and their associates would travel, or cause others to travel, from Puerto Rico to the continental United States, using commercial airlines carrying kilogram quantities of controlled substances hidden in suitcases.
The defendants are: Elving Madera-Rivera, aka “Binchi;” Francisco Colón-Soto, aka “Moyo;” José Oliveras, aka “Topo,” José Rivera-Ramírez, aka “Berto Risa,” Noel Acevedo-Rosado, aka “El Paramédico,” Raul Alemañy-Minguela; Eddie Bonilla-Bernard, aka “Bolillo;” Alexis Pinzon-Galindo, aka “Pinzon;” Agatha Casanova-Matias; Llamilet Seda-Ortiz, aka “La Gorda;” Dacmarie Dàvila-Marrero, aka “Dagma;” Juan Luis Cardona-Cruz; Wilson Martinez-Troche, aka “Chelope;” Mayra Enid Miranda-Casiano; and Shenary Torres-Morales.
According to the indictment, the defendants are facing a narcotics forfeiture allegation of one million dollars. The case is being prosecuted by Assistant U.S. Attorneys Carlos R. Cardona. If convicted, the defendants could face from 10 years up to life in prison.
“Drug trafficking organizations must be aggressively attacked and dismantled at every level,” said Rosa Emilia Rodríguez-Vélez, U.S. Attorney for the District of Puerto Rico. “Today we have stopped a criminal organization from bringing significant quantities of cocaine into our communities in the West side of Puerto Rico as well as into the continental United States. The result of this operation is nothing short of significant and it underscores what our citizens expect from law enforcement: keep drugs out of our neighborhoods.”
“This successful investigation is a great example of the results that are achieved when federal law enforcement, state, and the private sector work together in a combined effort. Transporting cocaine by mail, car, and airplanes or on foot leads to only one destination, prison,” said DEA Special Agent in Charge Vito S. Guarino. “We will not allow traffickers to turn our transportation routes and mail services into cocaine highways. As this case demonstrates it’s a dead end.”
USPIS
Indictments contain only charges and are not evidence of guilt. Defendants are presumed to be innocent until and unless proven guilty.
The defendants were the targets of a long-term Organized Crime Drug Enforcement Task Force (OCDEFT) investigation, responsible for importing cocaine and heroin into Puerto Rico. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
Wednesday 26 June 2013
Woodmere Man Pleads Guilty to Defrauding Investors of $62 Million in A Real Estate Ponzi SchemeRead the Press Release
Earlier today, Gershon Barkany pleaded guilty at the federal courthouse in Central Islip, New York, to wire fraud. The proceeding took place before United States Magistrate Judge Arlene R. Lindsay. When sentenced, Barkany faces up to 20 years in prison. As part of his plea agreement with the government, Barkany agreed to a $62 million money judgment payable to the United States.
The guilty plea was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office.
According to court filings and facts presented during the plea proceeding, between December 2009 and March 2013, Barkany induced seven investors to give him approximately $62 million by promising to use their money in “risk-free” deals to purchase, and then immediately re-sell at a profit, commercial real estate properties located in New York City and New Jersey. However, no such deals existed and the investors lost their entire investments.
In one instance, Barkany approached an investor he knew from the community and who placed his trust in the defendant. Barkany preyed on that trust to convince the investor to invest $46.5 million that was supposed to be used as a down payment to purchase an office building in Manhattan, a hotel in Atlantic City and properties in the Bronx and Queens. Barkany explained that he would find a buyer for those properties who would pay a higher price before the actual closing, resulting in a profit for Barkany and the investor. Barkany assured the investor that the real estate deals were risk free because if Barkany was unable to find a buyer before the closing, the owner of the properties would refund their monies. In fact, those real estate deals did not exist and the investment was not refunded.
On March 28, 2013, FBI special agents arrested Barkany. Shortly thereafter, two additional victims contacted the FBI and advised that they too had been defrauded by Barkany. As he had done with the other victims, Barkany induced those investors to give him approximately $7.5 million by promising to use their money in a “risk-free” deal to purchase, and then immediately re-sell at a profit, an office building located on 53rd Street in Manhattan. That deal also did not exist. In furtherance of that scheme, Barkany created fictitious documents, including a purchase agreement purportedly signed by the seller of the office building and an escrow agreement allegedly signed by a third-party escrow agent. Neither the seller of the property nor the third-party escrow agent signed or entered into those agreements. Barkany created those documents to deceive the victims.
As part of his Ponzi scheme, Barkany diverted some of the funds he received to pay investors whom he had defrauded earlier. The defendant also lost some of the funds in gambling and otherwise used the money for his own benefit.
“The defendant bilked investors out of funds that he led them to believe were to be invested in safe real estate deals. Instead, he was paying investors to keep his Ponzi scheme afloat and to gamble,” stated United States Attorney Lynch. “Barkany rolled the dice that his brazen greed and dishonesty would go unnoticed. That gamble did not pay off. Today’s conviction sends a clear message that this office is committed to vigorously investigating and prosecuting individuals who are responsible for committing financial crimes.”
FBI Assistant Director-in-Charge Venizelos stated, “Barkany has admitted to a multimillion-dollar real estate swindle where he convinced wealthy investors they were buying no-risk properties. Unbeknownst to his victims, what they were really buying were not brick-and-mortar buildings, but the smoke-and-mirror fantasy of Barkany’s fraudulent sales pitch.”
The government’s case is being prosecuted by Assistant United States Attorneys Christopher Caffarone and Diane Beckmann.
The Defendant
GERSHON BARKANY
Age: 29
Residence: Woodmere, NY