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15 August 2013
Polish Citizen Charged in Federal Court with Illegal Reentry into the United States and Aggravated Idenity TheftRead the Press Release
James L. Santelle, United States Attorney for the Eastern District of Wisconsin, announced today that a federal grand jury has returned an indictment charging Adam Nowak (age 40), a Polish citizen, with Illegal Reentry by a Previously Deported Alien, in violation of 8 U.S.C. § 1326(a), and Aggravated Identity Theft, in violation of 18 U.S.C. § 1028A(a). If convicted on the illegal reentry charge, Nowak faces a maximum of ten years in prison and a $250,000.00 fine. If convicted of aggravated identity theft, Nowak faces mandatory sentence of two years imprisonment. As an illegal alien, Nowak also faces deportation.
The indictment alleges that Nowak, who was previously deported from the United States in 2001 following felony convictions for document fraud, was found in Sheboygan, Wisconsin, on April 17, 2013. According to a criminal complaint filed in this case, Nowak was arrested by Sheboygan Police Officers for drunk driving after he drove a semi tractor-trailer down a footpath along the boardwalk area of the South Pier tourist district in Sheboygan.
The complaint also alleges that Nowak presented himself to police using the false name “Joseph Trzos,” and had in his possession an Arizona driver’s license in the name of “Joseph Trzos.” The complaint further alleges that this individual was determined to be Adam Nowak, a previously deported alien without permission to be in the United States, through fingerprint analysis.
The case was investigated by the Sheboygan Police Department and the United States Immigration and Customs Enforcement, Homeland Security Investigations. The case is being prosecuted by Assistant U.S. Attorney Benjamin W. Proctor.
An indictment is only a charge and not evidence of guilt. A defendant is presumed innocent and is entitled to a fair trial at which the government must prove his guilt beyond a reasonable doubt.
Philadelphia Man Charged in Cooking Oil TheftRead the Press Release
An indictment was unsealed today charging Bernard Corbin, 46, of Philadelphia, PA, with conspiracy to transport stolen property in interstate commerce and transportation of stolen property in interstate commerce, announced United States Attorney Zane David Memeger. The indictment charges that in 2012 Corbin used a company named Simply Green to steal large quantities of used cooking oil.
If convicted the defendant faces a maximum possible sentence of fifteen years imprisonment, three years supervised release, a $500,000 fine, and a $200 special assessment.
The case was investigated by the Federal Bureau of Investigation, the Ridley Township Police Department, the Bensalem Police Department, the Hilltown Police Department, the Newtown Square Police Department, the Marple Township Police Department, the Philadelphia Police Department, and the Media Police Department, and is being prosecuted by Assistant United States Attorney David L. Axelrod.
Click here to view the indictment
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Patrick Shane O’Ferrall Sentenced to 120 Months for Possessing Child PornographyRead the Press Release
GREENEVILLE, Tenn. – Patrick Shane O’Ferrall of Piney Flats, Tenn., was sentenced to a statutory maximum sentence of 120 months in prison, by the Honorable Leon Jordan, U.S. District Judge. Upon his release from prison, O’Ferrall will be subject to supervised release under the supervision of the U.S. Probation Office for the remainder of his life. O’Ferrall was also ordered to pay restitution to a victim, whose image was among the child pornography depictions.
The investigation of O’Ferrall began when, following his arrest for domestic assault, his spouse discovered pornographic images of young children on CDs among his belongings. Thereafter, officers seized computers, CDs and DVDs from O’Ferrall’s residence. A forensic examination of the seized computer and discs revealed over 3,500 images containing child pornography and DVDs containing videos of young children engaged in sexual acts.
Law enforcement agencies participating in the joint investigation which led to indictment and subsequent conviction of O’Ferrall included the Sullivan County Sheriff’s Department and Federal Bureau of Investigation. Assistant U.S. Attorney J. Gregory Bowman represented the United States.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Operators of Louisiana Home Health Company Sentenced <br /> for $17.1 Million Health Care Fraud SchemeRead the Press Release
The owner of South Louisiana Home Health Care Inc. and the director of nursing for the Louisiana home health agency were sentenced today for their roles in a Medicare fraud scheme involving the payment of kickbacks and the falsification of documents.
Acting Assistant Attorney General Mythili Raman of the Criminal Division; Acting U.S. Attorney Walt Green of the Middle District of Louisiana; Special Agent in Charge Mike Fields of the Dallas Region of the HHS Office of the Inspector General (HHS-OIG); Special Agent in Charge Michael Anderson of the FBI’s New Orleans Division; and Louisiana State Attorney General James Buddy Caldwell made the announcement.
Louis T. Age Jr., 64, owned and operated South Louisiana Home Health Care and operated this company along with his former wife, Verna Age, 60, who served as the company’s director of nursing. Louis Age and Verna Age, both of Slidell, La., were sentenced today by U.S. District Judge James J. Brady of the Middle District of Louisiana to 180 months and 60 months in prison, respectively, and ordered to forfeit $9.2 million and pay $17.1 in restitution.After a jury trial in March 2013, Louis Age and Verna Age each were convicted of one count of conspiracy to commit health care fraud, and Louis Age also was convicted of one count of conspiracy to defraud the United States and to pay or receive illegal health care kickbacks. Verna Age previously was convicted of one count of conspiracy to defraud the United States and to pay or receive illegal health care kickbacks after a jury trial in October 2012.
According to evidence presented at trial, Louis Age and Verna Age paid kickbacks to patient recruiters to obtain Medicare beneficiary information. Nurses, including registered nurse Verna Age, then falsified qualification documents to make it appear that these beneficiaries qualified for home health services. The evidence also showed that Louis Age hired and paid kickbacks to medical doctors to sign fraudulent referrals and certifications for home health services that were not medically necessary. Louis Age and Verna Age then used the Medicare beneficiary information and false documents to bill Medicare for the medically unnecessary home health services. From 2005 through 2011, Medicare paid South Louisiana Home Health Care approximately $17.1 million based on these fraudulent home health care claims.
This case was investigated by the FBI, HHS-OIG and Medicaid Fraud Control Unit of the Louisiana State Attorney General’s Office and was brought as part of the Medicare Fraud Strike Force, under supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Middle District of Louisiana. The case was prosecuted by Trial Attorneys David M. Maria and Abigail B. Taylor of the Fraud Section, with assistance from Trial Attorney Arunabha Bhoumik.Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,500 defendants who have collectively billed the Medicare program for more than $5 billion. In addition, HHS’s Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to www.stopmedicarefraud.gov.
Operators of Louisiana Home Health Company SentencedRead the Press Release
WASHINGTON – The owner of South Louisiana Home Health Care Inc. and the director of nursing for the Louisiana home health agency were sentenced today for their roles in a Medicare fraud scheme involving the payment of kickbacks and the falsification of documents.
Acting Assistant Attorney General Mythili Raman of the Criminal Division; Acting U.S. Attorney Walt Green of the Middle District of Louisiana; Special Agent in Charge Mike Fields of the Dallas Region of the HHS Office of the Inspector General (HHS-OIG); Special Agent in Charge Michael Anderson of the FBI’s New Orleans Division; and Louisiana State Attorney General James Buddy Caldwell made the announcement.
Louis T. Age Jr., 64, owned and operated South Louisiana Home Health Care and operated this company along with his former wife, Verna Age, 60, who served as the company’s director of nursing. Louis Age and Verna Age, both of Slidell, La., were sentenced today by U.S. District Judge James J. Brady of the Middle District of Louisiana to 180 months and 60 months in prison, respectively, and ordered to forfeit $9.2 million and pay $17.1 in restitution.
After a jury trial in March 2013, Louis Age and Verna Age each were convicted of one count of conspiracy to commit health care fraud, and Louis Age also was convicted of one count of conspiracy to defraud the United States and to pay or receive illegal health care kickbacks. Verna Age previously was convicted of one count of conspiracy to defraud the United States and to pay or receive illegal health care kickbacks after a jury trial in October 2012.
According to evidence presented at trial, Louis Age and Verna Age paid kickbacks to patient recruiters to obtain Medicare beneficiary information. Nurses, including registered nurse Verna Age, then falsified qualification documents to make it appear that these beneficiaries qualified for home health services. The evidence also showed that Louis Age hired and paid kickbacks to medical doctors to sign fraudulent referrals and certifications for home health services that were not medically necessary. Louis Age and Verna Age then used the Medicare beneficiary information and false documents to bill Medicare for the medically unnecessary home health services. From 2005 through 2011, Medicare paid South Louisiana Home Health Care approximately $17.1 million based on these fraudulent home health care claims.
This case was investigated by the FBI, HHS-OIG and Medicaid Fraud Control Unit of the Louisiana State Attorney General’s Office and was brought as part of the Medicare Fraud Strike Force, under supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Middle District of Louisiana. The case was prosecuted by Trial Attorneys David M. Maria and Abigail B. Taylor of the Fraud Section, with assistance from Trial Attorney Arunabha Bhoumik. Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,500 defendants who have collectively billed the Medicare program for more than $5 billion. In addition, HHS’s Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to www.stopmedicarefraud.gov.
Oklahoma City Doctor Pays $60,000 to Settle Civil Penalty Claims Involving Violations of Controlled Substances ActRead the Press Release
Oklahoma City, Oklahoma -- William D. Jones, M.D., who practices in Oklahoma City, Oklahoma, has agreed to pay $60,000 to the United States to settle civil penalty claims stemming from allegations that he violated the Controlled Substances Act, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma.
The Controlled Substances Act, 21 U.S.C. Sections 801 et seq. (“CSA”), was passed by Congress to combat the illegal distribution and abuse of controlled substances, including prescription medications. The CSA is enforced by the Drug Enforcement Administration's (DEA) Office of Diversion Control, with a mission to prevent, detect, and investigate the diversion of controlled pharmaceuticals and listed chemicals from legitimate sources while ensuring an adequate and uninterrupted supply for legitimate medical, commercial, and scientific needs. Under the CSA, medical providers registered with the DEA who purchase, distribute, dispense, transfer, or sell controlled substances must comply with inventory and documentation requirements. Regulations promulgated under the CSA require that each DEA registrant, maintain complete and accurate records of each substance manufactured, received, sold, delivered, dispensed or otherwise disposed of by the registrant. These requirements play a vital role in ensuring the appropriate handling, accounting, and distribution of controlled substances. Violations of the record-keeping requirements subject DEA registrants to civil monetary penalties.
The United States alleged that from January 1, 2009, through July 1, 2013, Dr. Jones ordered and received 5,550 dosage units of Schedule III and IV controlled substances under his DEA registration number, but failed to keep the records required by the CSA. It was also alleged that Dr. Jones dispensed controlled substances to individuals not for a legitimate medical purpose and not in the usual course of his medical practice.
In order to resolve the civil penalty claims by the United States, Dr. Jones agreed to pay $60,000 to the government. In reaching this settlement, Dr. Jones did not admit liability, and the government did not make any concession regarding the legitimacy of the claims. The agreement allows the parties to avoid the delay, expense, inconvenience, and uncertainty involved in litigating the case.
This case was investigated by the Drug Enforcement Administration’s Office of Diversion Control and was prosecuted by Assistant United States Attorney Ronald R. Gallegos.
Nine Indicted in Alleged Heroin Distribution Organization Operating in Maryland, Delaware, Pennsylvania and New YorkRead the Press Release
U.S. Attorney Warns of Dramatic Spike in Maryland Deaths by Heroin Overdose
Baltimore, Maryland - A federal grand jury has indicted nine individuals in connection with a heroin distribution ring that allegedly operated in Cecil County, Maryland, Delaware, Pennsylvania and New York. The indictment was returned on August 7, 2013.
The indictment and search warrant affidavits were unsealed today upon the arrests of the defendants and the execution of eight search warrants of residences and vehicles associated with the defendants in Maryland, Delaware, Pennsylvania, and New York. Approximately 100 agents and officers from 11 law enforcement agencies assisted in today’s arrests and search warrants.
The indictment arose from a joint investigation by the Drug Enforcement Administration - Baltimore Field Office, Wilmington, Delaware Resident Office, New York Division, Philadelphia Field Division, Santo Domingo country office and Mexico City country office; the Cecil County Drug Task Force (“CCDTF”), comprised of the Elkton Police Department, Cecil County Sheriff’s Office, Maryland State Police and the Cecil County State’s Attorney’s Office; the Delaware State Police; and the Philadelphia Police Department.
The following defendants are charged with conspiracy to distribute heroin and were arrested today:
Luis Lugo-Santiago, a/k/a “Papi,” and “Andres Galvez,” age 38, of New York, New York; Orlando Nunez de Leon, a/k/a “Alberto Ando,” age 36, of New York; Jorge Ayala-Pizzaro, Jr., a/k/a “Black Pa,” and “Black Pop,” age 23, of Philadelphia; Veroni Chavarria Cubero, a/k/a “Vero,” age 30, of Philadelphia; Maria Paulino Perez, a/k/a “Nena,” age 40, of Philadelphia; Abel Nunez-Reyes, age 29, of Philadelphia; and
Rachine Huron Garnett, a/k/a “Sheen,” “Red,” “Ray,” and “Blockhead, age 37, of
Elkton, Maryland.
Two defendants are still being sought.The indictment was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Assistant Special Agent in Charge Gary Tuggle of the Drug Enforcement Administration, Baltimore District Office; Special Agent in Charge David G. Dongilli, Philadelphia Division of the DEA; Cecil County Sheriff Barry A. Janney, Sr.; Chief Matthew Donnelly of the Elkton Police Department; Colonel Marcus L. Brown, Superintendent of the Maryland State Police; Cecil County State’s Attorney Ellis Rollins; and Colonel Nathaniel McQueen, Jr. of the Delaware State Police.
“Heroin is one of the leading causes of death in Maryland; with the recent spike from 245 overdose deaths in 2011 to 378 in 2012, more people die of heroin than murder,” said U.S. Attorney Rod J. Rosenstein. “Heroin dealers are selling death and despair.”
According to the indictment and affidavits filed in support of the search warrants, Lugo is a Dominican native living in New York, who is alleged to be running a heroin mill in the Bronx, New York. The organization allegedly processes between one and two kilograms of heroin per week for retail sale. Lugo has a number of customers in the Maryland and Delaware areas, including Rachine Garnett. Court documents allege that Jorge Ayala-Pizzaro and Veronica Cubero, who are in a romantic relationship, are the main couriers for the Lugo organization and Nunez de Leon packages heroin for the organization. According to court documents, Garnett often traveled to Philadelphia to provide Ayala-Pizzaro with cash and to obtain heroin. Garnett and Ayala-Pizzaro often exchanged vehicles during these meetings, and it is alleged that the money and drugs were hidden in mechanized hidden compartments, called “traps,” in the vehicles. The investigation included hundreds of intercepted telephone calls and text messages in which the defendants are alleged to discuss drug business, often using coded language.
The defendants face a maximum sentence of life in prison. Ayala-Pizzaro, Cubero, Perez, Nunez-Reyes and Garnett each had an initial appearance today in U.S. District Court in Baltimore. Lugo-Santiago had his initial appearance in the U.S. District Court in New Jersey and Nunez de Leon had his initial appearance in U.S. District Court for the Southern District of New York. Perez is scheduled to have her initial appearance on Friday in U.S. District Court in Baltimore. All the defendants were detained.
An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
United States Attorney Rod J. Rosenstein praised the DEA, Cecil County Drug Task Force, and Delaware State Police for their work in the investigation. Mr. Rosenstein also recognized the U.S. Attorney’s Offices in the District of Delaware, Southern District of New York and the Eastern District of Pennsylvania, the Office of the Special Narcotics Prosecutor for the City of New York and the New York Police Department for their assistance. Mr. Rosenstein thanked Assistant United States Attorneys Kenneth S. Clark and James G. Warwick, who are prosecuting this Organized Crime Drug Enforcement Task Force case.
New Jersey Man Sentenced to 18 Years for Scamming NunsRead the Press Release
PHILADELPHIA - Adriano Sotomayor, 55, of Margate, New Jersey, was sentenced today to 18 years in prison for 17 counts of wire fraud in connection with a scheme to defraud members of the Dominican Sisters of the Rosary of Fatima (“Sisters of Fatima”), and others, out of more than $1 million. Sotomayor carried out his fraud scheme between May 2009 and February 2012. He was indicted on November 15, 2011 and went on the run. He was captured by the FBI Fugitive Squad in Las Vegas, Nevada, on February 27, 2012 and pleaded guilty to his fraud scheme on February 22, 2013.
Sotomayor launched his scheme by causing an elderly nun to believe that she had been named in a will as the beneficiary of an estate estimated at approximately $2.1 million. In order to lure the elderly nun into this scheme, the defendant caused his victim to believe that the man who notified her about the will was a Catholic priest from New Jersey, and the testator was one of his parishioners. Sotomayor fraudulently induced the elderly nun to begin sending money to him in Atlantic City, New Jersey, by telling her that she needed to pay taxes, processing fees, and various legal fees associated with the fictitious will. He went on to target other victims in Levittown and Philadelphia who initially sent money to him on the elderly nun’s behalf. Sotomayor caused at least 50 victims to send a total of at least $1.3 million from Pennsylvania and elsewhere to him in New Jersey over a two year period. The defendant received wire transfers at the Trump Plaza Hotel and Casino, the Showboat Hotel and Casino, and Bally’s Park Place, among other places.
In addition to the prison term, U.S. District Court Judge Eduardo C. Robreno ordered restitution in the amount of $1,506,533, three years of supervised release, and a $1,700 special assessment.
The case was investigated by the Federal Bureau of Investigation and was prosecuted by Assistant United States Attorney Karen M. Klotz.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Nebraska Man Sentenced on Assault ChargeRead the Press Release
United States Attorney Brendan V. Johnson announced that a Winnebago, Nebraska, man convicted of Assault by Striking, Beating and Wounding was sentenced on August 13, 2013, by U.S. Magistrate Judge Mark A. Moreno.
Lawrence Bassette, age 28, was sentenced to 6 months of imprisonment and a $10 special assessment to the Federal Crime Victims Fund.
Bassette was indicted by a federal grand jury in March of 2013. He pled guilty to an Information on August 13, 2013, immediately prior to sentencing.
The conviction stems from an incident on January 30, 2013, when Bassette assaulted the victim at the Lower Brule jail, where both of them were prisoners. The victim and Bassette were arguing and began to fight, during which time Bassette stuck his finger into the victim’s eye and put the victim into a headlock. When the victim tried to break the headlock, Bassette threw the victim onto the ground, causing him to hit his head on the concrete.
The victim sustained a laceration to the top of his head, as well as injury to his eye.
The investigation was conducted by the Bureau of Indian Affairs, Lower Brule Agency. Assistant U.S. Attorney Troy Morley prosecuted the case.
Bassette was immediately turned over to the custody of the U.S. Marshals Service.Murdo Man Convicted of Possession of Firearm by A Prohibited PersonRead the Press Release
United States Attorney Brendan V. Johnson announced that Shaun Sporrer, age 41, of Murdo, South Dakota, appeared before U.S. District Judge Roberto A. Lange on August 13, 2013, and pled guilty to the Indictment that charged him with Possession of a Firearm by a Prohibited Person.
The maximum penalty upon conviction is 10 years in custody, a $250,000 fine, or both; 3 years of supervised release; and a $100 assessment to the Federal Crime Victims Fund.
The charge stems from an incident on March 1, 2013, when Sporrer pulled a revolver on a neighbor. Since he was previously convicted of a domestic violence offense, Sporrer is prohibited from owning firearms.
The investigation was conducted by the Jones County Sheriff’s Office; the Bureau of Alcohol, Tobacco, Firearms and Explosives; and the Northern Plains Safe Trails Drug Enforcement Task Force. The case is being prosecuted by Assistant U.S. Attorney Jay Miller.
A presentence investigation was ordered, and a sentencing date was set for November 4, 2013.
Sporrer was remanded to the custody of the U.S. Marshals Service pending sentencing.Mingo County Judge Arrested for Framing Romantic Rival, Rigging Grand JuryRead the Press Release
Mingo County Commissioner Arrested for Extortion in Separate Case
CHARLESTON, W.Va. – Mingo County Circuit Judge Michael Thornsbury and County Commissioner David Baisden have been arrested on separate federal criminal charges, U.S. Attorney Booth Goodwin announced today. Thornsbury is charged with conspiring to have a romantic rival illegally arrested and manipulating a state grand jury to pursue criminal charges against the same romantic rival. Baisden is charged with using his office to illegally extort a discount from a Mingo County tire store. The charges against the officials are separate and were revealed in two different federal grand jury indictments unsealed today. This press release reflects allegations made in those indictments.
The Indictment of Judge Thornsbury
Judge Thornsbury is charged with conspiring to violate the constitutional rights of a victim identified as “R.W.,” who was the husband of Thornsbury’s secretary. In early 2008, the indictment alleges, Thornsbury began a romantic relationship with his secretary, identified as “K.W.,” which she broke off in June of that year. After K.W. ended the relationship, Thornsbury instructed a co-conspirator to plant illegal drugs underneath R.W.’s pickup truck and then arranged for police to stop R.W. and search for the drugs. The co-conspirator tasked with planting the drugs backed out of the plan at the last minute, thwarting Thornsbury’s scheme.
Thornsbury then tried a different approach, the indictment alleges. R.W. worked at a coal preparation plant, where newly mined coal was processed before shipping. One of the plant’s functions was to remove scrap metal that had fallen into the coal during mining. Thornsbury learned that R.W.’s supervisors had given him permission to salvage scrap items, including drill bits, that were found amid coal at the plant, which were simply discarded if R.W. did not collect them.
Thornsbury secretly instructed a West Virginia state trooper to file a criminal complaint that falsely alleged R.W. was stealing the scrap material from his employer. The trooper resisted, telling Thornsbury that R.W. was allowed to salvage the scrap, but ultimately yielded to Thornsbury’s demands, filing a false criminal complaint that led to R.W.’s arrest for grand larceny in December 2008.
In January 2009, a new Mingo County grand jury was empanelled, and Thornsbury decided to use it to pursue his campaign against R.W. As the county’s sole circuit judge, Thornsbury was empowered to choose the foreperson of the new grand jury. He selected Jarrod Fletcher, Mingo County’s Director of Homeland Security and Emergency Management, with whom Thornsbury co-owned a commercial real estate business and a wine shop.
By installing Fletcher as grand jury foreperson, Thornsbury was able to secretly co-opt the grand jury’s authority and use it to victimize R.W. In January 2009, Thornsbury created a set of purported grand jury subpoenas that ordered various local companies, including R.W.’s employer, to surrender private documents concerning R.W. He had Fletcher sign these purported subpoenas and send them out in the name of the grand jury. Thornsbury planned to ultimately use the grand jury to charge R.W. criminally.
In March 2009, one of the recipients of Thornsbury’s so-called subpoenas, identified in the indictment as “DBC, Inc.,” asked for more time to respond. Thornsbury entered a court order denying that request, without disclosing that he himself had ghostwritten the subpoena or that he was disqualified from any participation in the criminal case against R.W.Most of the companies targeted by Thornsbury’s subpoenas handed over the documents demanded, believing that the subpoenas were legitimate. DBC, Inc., however, waged a legal battle against the subpoena it received and eventually discovered the deep business ties between Thornsbury and Fletcher. When DBC, Inc., publicly revealed those ties in a court filing, Thornsbury was forced to abandon his plan to use the grand jury against R.W.
Several years later, in 2012, R.W. was involved in an argument outside a convenience store with two other men. One of the men took a swing at R.W., and the other one drew a gun. The police were called, and the two other men were charged with assault.
Nearly a month after the altercation, however, the charges against the two other men were dismissed and R.W. was charged with assault and battery. Thornsbury, through a messenger, told the county prosecutor to ensure that R.W. received a sentence of six months’ confinement, an extraordinarily harsh punishment even if R.W. had been guilty. Prosecutors in turn offered R.W. a plea agreement that would have confined him for six months. R.W. refused it, and on the eve of trial, the prosecutor dismissed the case, stating that after reviewing the evidence against R.W., he believed the prosecution was not in the interest of justice.
The indictment charges Thornsbury with conspiring to violate R.W.’s right against unreasonable arrest, guaranteed by the Fourth Amendment to the U.S. Constitution, and his right not to be deprived of his liberty without due process of law, guaranteed by the Fourteenth Amendment. The indictment also charges that Thornsbury conspired against the companies targeted by the purported grand jury subpoena, specifically, against their Fourteenth Amendment right not to be deprived of their property without due process of law.Thornsbury, 57, has served as Mingo County’s sole circuit judge since 1997.
The Indictment Against County Commissioner Baisden
County Commissioner David Baisden is charged with attempted extortion against Appalachian Tire. According to the indictment against him, in June 2009, Baisden demanded that Appalachian Tire sell him a set of tires for his personal automobile at a special discounted price available only for government vehicles. When Appalachian Tire refused, Baisden threatened to cut off Appalachian’s county business if he did not get the discount. At the time, Baisden was the Mingo County Commission’s purchasing agent, giving him authority to choose where the county bought tires, and the commission bought thousands of dollars’ worth of tires from Appalachian every year.
Despite the threat, Appalachian refused to give Baisden the special price he demanded. In retaliation, Baisden terminated the commission’s business relationship with Appalachian Tire and switched to a different tire supplier. Since June 2009, Appalachian Tire has lost tens of thousands of dollars in business as a result of Baisden’s reprisal.
Baisden, 66, has been a member of the Mingo County Commission since 2009. Prior to his election as a county commissioner, he was Mingo County’s assessor.
The Federal Bureau of Investigation and the West Virginia State Police are conducting the investigation.
Counsel to the United States Attorney Steven Ruby is in charge of the prosecution.
An indictment is merely an accusation and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Click here to view a copy of the Thornsbury indictment
Click here to view a copy of the Baisden indictment
Michigan Physical Therapist and Home Health Agency Owner Pleads Guilty for Role in Medicare Fraud SchemeRead the Press Release
A greater Detroit-area physical therapist who was also an owner of a home health agency pleaded guilty yesterday for his role in a $22 million home health care fraud scheme.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade, Special Agent in Charge Robert D. Foley III of the FBI’s Detroit Field Office, Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Chicago Regional Office, and Special Agent in Charge Erick Martinez of Internal Revenue Service Criminal Investigation made the announcement.Hemal Bhagat, 32, of Troy, Mich., pleaded guilty on Aug. 14, 2013, before U.S. District Judge Bernard A. Friedman in the Eastern District of Michigan to one count of conspiracy to commit health care fraud. At sentencing, scheduled for Nov. 12, 2013, Bhagat faces a maximum penalty of 10 years in prison and a $250,000 fine.
According to information contained in plea documents, Bhagat admitted that from approximately May 2009 through October 2011, he conspired with others to commit health care fraud through billing Medicare for home health care services that were not actually rendered and/or not medically necessary. A licensed physical therapist, Bhagat began working in June 2009 for Troy-based Prestige Home Health Services Inc., a home health agency owned by alleged co-conspirators. In approximately August 2009, he and other co-conspirators became owners of Royal Home Health Care Inc., a home health agency also located in Troy.
Bhagat admitted that his co-conspirators at Prestige and Royal paid kickbacks to patient recruiters to obtain the information of Medicare beneficiaries, which the co-conspirators then used to bill Medicare for services that were not provided to these beneficiaries and/or were not medically necessary. He and his co-conspirators then created fictitious therapy files appearing to document physical therapy services provided to Medicare beneficiaries, when in fact no such services had been provided and/or were not medically necessary. Bhagat’s role in creating the fictitious therapy files was to sign documents – including physical therapy evaluations, supervisory patient visits, and patient discharge forms – indicating that he and others had provided physical therapy services to particular Medicare beneficiaries, when in fact they had not. Bhagat admitted to knowing that the documents he falsified would be used to support false claims to Medicare by his co-conspirators at Prestige and Royal. He submitted or caused the submission of claims to Medicare for services that were not medically necessary and/or not provided, which in turn caused Medicare to pay approximately $4,767,359.03.This case was investigated by the FBI, HHS-OIG and IRS Criminal Investigation and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan. This case is being prosecuted by Trial Attorney Niall M. O’Donnell, Deputy Chief Charles E. Duross, and Trial Attorney James McDonald of the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,500 defendants who have collectively billed the Medicare program for more than $5 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
Member of Romania Based Internet Fraud Ring Indicted for Wire Fraud for Scheme Falsely Advertising and Selling Boats and Vehicles on the InternetRead the Press Release
A member of a scheme to scam prospective purchasers of cars, boats, and RVs by using false internet postings and fake payment processing programs was arrested in New York on July 22, 2013, when he tried to enter the U.S. from Romania, announced U.S. Attorney Jenny A. Durkan. JUAN CARLOS DE LA CRUZ PIOTE, 47, a native of Spain, and his co-schemers opened multiple bank accounts in the Western District of Washington, which were used to accept funds from victims who thought they were using a secure payment method to purchase vehicles advertised on the internet. In fact, the advertised vehicles – luxury cars, boats, or RVs – were never delivered, and the money was quickly wired out of the country or withdrawn from the accounts as cash. DE LA CRUZ PIOTE will be transported to the Western District of Washington for arraignment on the indictment returned on August 14, 2013.
According to records filed in the case, DE LA CRUZ PIOTE and other co-schemers opened multiple bank accounts using various foreign passports and identities. The conspirators set up the accounts with business names such as GMC AUTOS, LLC, CARS CONSULTANTS, LLC, AUTO FINANCIAL, LLC and MGA ENGINES, LLC. The conspirators would advertise various luxury cars, boats, and recreational vehicles on the internet on legitimate websites such as Craig’s List or Autotrader.com. The conspirators would correspond with potential purchasers using false names. When the purchaser was interested in buying one of the luxury vehicles, the schemers would have them wire funds to one of the business bank accounts claiming it was an “escrow account,” that would hold the funds until the purchaser received the vehicle. The conspirators would create counterfeit PayPal paperwork and web pages, or would have the victims make the payment through a service they created and called “Amazon Payments” – but the service was in no way associated with Amazon.com. The use of these names was a way to lull the purchasers into thinking they were dealing with a legitimate online seller.
The indictment alleges that between February and August of 2011, the conspirators took in more than $940,000, and from one bank account alone quickly made multiple withdrawals totaling more than $100,000.
One member of the ring has already pleaded guilty to wire fraud. In September 2012, Emilian Madalin Nita was sentenced to 42 months in prison.
The charges contained in the indictment are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.
The cases were investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) and the FBI. The case is being prosecuted by Assistant United States Attorney David Reese Jennings.
Mattawan Man Indicted for Child Exploitation and Other Related ChargesRead the Press Release
GRAND RAPIDS, MICHIGAN – A federal grand jury indicted James Alfred Beckman, Jr., of Mattawan, Michigan for a number of charges including Sexual Exploitation of a Child, Attempted Coercion and Enticement of a Child, and Receipt of Child Pornography. The grand jury alleges in the indictment that Beckman committed these offenses between November of 2011 and September of 2012. If convicted of these charges, Beckman faces up to life imprisonment.
The charges are the result of a joint investigation by the Federal Bureau of Investigation (FBI) and the Michigan State Police (MSP), and this case is part of Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. The U.S. Attorney's Office, county prosecutor's offices, the Internet Crimes Against Children task force (ICAC), federal, state, and local law enforcement are working closely together to locate, apprehend, and prosecute individuals who exploit children. The partners in Project Safe Childhood work to educate local communities about the dangers of online child exploitation, and to teach children how to protect themselves. For more information about Project Safe Childhood, please visit the following web site: www.projectsafechildhood.gov. Individuals with information or concerns about possible child exploitation should contact local law enforcement officials.
The charges in the indictment are only allegations and are not evidence of guilt. The defendant is presumed innocent unless and until proven guilty, and the government has the burden of proving his guilt beyond a reasonable doubt.
END
Maryland Man Sentenced to Prison for Selling Stolen Motorcycles and TractorsRead the Press Release
PITTSBURGH, Pa. - A Maryland resident has been sentenced in federal court to 27 months imprisonment, to be followed by three years of supervised release, on his conviction of conspiracy to transport stolen motor vehicles across state lines, United States Attorney David J. Hickton announced today.
United States District Judge Terrence F. McVerry imposed the sentence on Rodney D. Deminds, Jr., 24, of Belcamp, Md.
According to information presented to the court, on at least 14 occasions between July of 2011 and April of 2012, Deminds, along with Harvey Leemore, Collin D. Powell and Trea C. Powell, and at least one other individual, traveled from Baltimore to various retail dealerships in Pennsylvania and Virginia for the purpose of stealing motorcycles and tractors from those retail dealerships. After stealing these items, the thieves took the items back to Baltimore and sold them. The items were stolen from retail dealerships located in Gibsonia, Ebensburg, Gaines and Altoona, Pa., and in Purcellville, Va. The value of the stolen items exceeded $200,000.
Assistant United States Attorney Shaun E. Sweeney prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Pennsylvania State Police, Western Pennsylvania Auto Theft Task Force, the Federal Bureau of Investigation, and detectives from Harford County, Maryland, for the investigation leading to the successful prosecution of Deminds.
Man Arrested for Child Sexual Exploitation ChargesRead the Press Release
SAN JUAN, Puerto Rico — On Friday, August 9, 2013, Javier Negrón-Arce, 47, was arrested at his place of residence after an HSI investigation, which stemmed from a referral from the Puerto Rico Police Department’s Sexual Crimes Division, and revealed that he allegedly transported a 16-year-old minor identified as Jane Doe with the intent to engage in sexual criminal conduct, announced Rosa Emilia Rodríguez-Vélez, United States Attorney for the District of Puerto Rico. This arrest followed an investigation from U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) special agents, and officers assigned to the Puerto Rico Crimes Against Children Task Force (PRCACTF).
According to the criminal complaint, on Jan. 16, Negrón-Arce, drove Jane Doe to a local motel and sexually abused her against her will. The charging document further alleges that during the sexual act Negrón-Arce restrained Jane Doe’s hands using physical force.
Today, Negrón-Arce appeared before U.S. Magistrate Sylvia Carreño for his detention hearing and was ordered to remain at the Metropolitan Detention Center in Guaynabo to wait for the outcome of his case.
If convicted, the defendant faces a sentence of 10 years to life in prison. The case is being prosecuted by Assistant U.S. Attorney Julia M. Meconiates.“Evidence that adults are taking children to motels for the purpose of committing sexual abuse is on the rise. In Puerto Rico, Federal authorities have enhanced jurisdiction to investigate sex abuse crimes involving children; that is to say that, because of our unique commonwealth status, we can prosecute crimes federally that in the rest of the 50 states would be solely local crimes,” said United States Attorney for the District of Puerto Rico, Rosa Emilia Rodríguez-Vélez. “The USAO for the District of Puerto Rico is committed to taking full advantage of this enhanced jurisdiction in order to protect your children. I urge the public to be on the lookout for children being transported anywhere within Puerto Rico for the purpose of engaging in any sexual activity to contact the Federal authorities directly.”
“Predators who victimize innocent children for selfish gratification must know that we will not rest until they are brought to justice, regardless of where they live,” said Ángel M. Meléndez, special agent in charge HSI San Juan. “Words cannot describe the harm that these crimes inflict on children.”
In response to the need for an island-wide approach to fighting the escalation of predatory crimes against children, HSI San Juan partnered with members of local, state and federal law enforcement, as well as local and state government officials and community leaders, to form PRCACTF in June 2011.
Through PRCACTF, local, state and federal law enforcement agencies work together with local and state government agencies to effectively pool their resources to jointly investigate all crimes against children in Puerto Rico. Through the task force, law enforcement officers are encouraged to share evidence, ideas, and investigative and forensic tools to ensure the most successful prosecutions possible. As such, PRCACTF allows law enforcement to speak with one unified voice in defense of the children of Puerto Rico.
Suspected child sexual exploitation or missing children may be reported to the National Center for Missing & Exploited Children, an Operation Predator partner, via its toll-free 24-hour hotline, 1-800-843-5678.
MS-13 Leader Sentenced for Multiple Racketeering OffensesRead the Press Release
Jose Armando Bran, aka “Pantro,” was sentenced today to serve two consecutive life sentences for his role in a murder and maiming that he ordered while he was an MS-13 gang leader in Richmond, Va.
The sentencing was announced by Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney Neil H. MacBride of the Eastern District of Virginia; Special Agent in Charge Jeffrey C. Mazanec of the FBI’s Richmond Field Office; Special Agent in Charge John P. Torres of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) in Washington; Richmond Commonwealth Attorney Michael Herring; Chesterfield Commonwealth Attorney Billy Davenport; Chief Ray J. Tarasovic of the Richmond Police Department; and Col. Thierry G. Dupuis of the Chesterfield County Police Department.Bran, 30, of Richmond, was sentenced by Senior U.S. District Judge Robert E. Payne in the Eastern District of Virginia.
On May 20, 2013, Bran was found guilty of two counts of conspiracy to commit murder, murder, maiming and use of a firearm during a crime of violence resulting in death.
According to evidence presented at trial, Bran was responsible for orchestrating the gangland-style execution of Osbin Hernandez-Gonzalez. Bran, who served as the leader of MS-13’s Sailors Locos Salvatrucha clique in Richmond, suspected that Hernandez-Gonzalez had violated MS-13 rules by aiding a rival gang. Based upon this suspicion, Bran created a ruse to lure Hernandez-Gonzalez to the “Pony Pasture” area on the banks of the James River. Bran ordered MS-13 associate Karen San Jose to contact Hernandez-Gonzalez and convince him to gather with other MS-13 members. Bran also enlisted the help of two juveniles, Luis Cabello and Jeremy Soto, who were tasked with actually carrying out the murder of Hernandez-Gonzalez. Finally, to ensure the murder was carried out, Bran instructed MS-13 member Michael Arevalo, aka “Reptile,” to accompany the juveniles on the “mission” and to ensure the juveniles completed the murder, which Arevalo did.
Evidence at trial also showed that in approximately January 2012, Bran was told that an individual with the initials F.A. was supplying information about the Richmond Sailors Clique to a rival gang. A plan was developed to have MS-13 associate Justin Amador kill F.A. to both punish the supposed informant and test Amador’s loyalty.On Jan. 14, 2012, Bran directed that the plan be carried out. Sometime that evening, Giovanny Torres, along with Amador, Mario Molina and Marvin De Leon, drove the victim to a nightclub in Richmond. They left after 45 minutes, telling the victim that they were all going to commit a burglary. They drove to the vicinity of the 3800 block of Terminal Avenue in Richmond, and De Leon and Amador got out of the car. After a signal from Torres, De Leon grabbed the victim, pulled his sweatshirt over his head and held him while Amador stabbed the victim at least 14 times. The victim escaped and fled to a nearby residence while the others drove away. As a result of the attack, the victim lost a portion of one lung.
The other members and associates of the MS-13 Sailors Locos Salvatrucha clique in Richmond that have been convicted include the following individuals:
• On Jan. 23, 2013, Arevalo pleaded guilty in federal court. He was sentenced on July 25, 2013, to serve life in prison plus 10 years.
• On March 15, 2013, San Jose pleaded guilty in federal court. On July 23, 2013, she was sentenced to serve 20 years in prison.
• Cabello was charged as an adult by the Richmond Commonwealth Attorney’s Office, and on Jan. 25, 2012, he was found guilty by a jury. On June 24, 2013, Cabello was sentenced to serve 34 years in prison.
• Soto was charged as an adult by the Richmond Commonwealth Attorney’s Office and pleaded guilty on July 31, 2012. On July 19, 2013, Soto was sentenced to serve 18 years in prison.
• On Aug. 15, 2012, Molina pleaded guilty in federal court. On Dec. 12, 2013, he was sentenced to serve 293 months in prison.
• On June 29, 2012, Torres pleaded guilty in federal court. On March 14, 2013, he was sentenced to serve 235 months in prison.
• On May 10, 2012, De Leon pleaded guilty in federal court. On July 23, 2013, he was sentenced to serve 235 months in prison.
• On June 18, 2012, Amador pleaded guilty in federal court. On July 25, 2013, he was sentenced to serve 235 months in prison.
• Jose Mancia-Martinez, aka “Ready,” was charged as an adult in Chesterfield County Circuit Court. On Jan. 9, 2013, he was found guilty by a jury of forcible rape. On July 17, 2013, he was sentenced to serve 20 years in prison.
This case was investigated by the FBI, HSI, the Richmond Police Department and the Chesterfield County Police Department. Assistant U.S. Attorney Roderick C. Young of the Eastern District of Virginia and Trial Attorney Andrew L. Creighton of the Criminal Division’s Organized Crime and Gang Section prosecuted the case on behalf of the United States.
Lynn Tax Preparer Sentenced to Federal Prison for Identity Theft and Tax FraudRead the Press Release
BOSTON – A Lynn man was sentenced today in U.S. District Court in Boston for identity theft and tax fraud committed while operating a tax return preparation business.
Roosevelt Fernandez, 33, was sentenced by U.S. District Judge Douglas P. Woodlock to 42 months in prison, and ordered to pay $116,679 in restitution to the Internal Revenue Service. On Jan. 16, 2013, Fernandez pleaded guilty to a 13-count superseding information charging him with aiding and assisting in the preparation of false income tax returns and identity theft.
Fernandez held himself out as an experienced tax return preparer operating a business called H&T Multi Services in Lynn, Mass. On numerous occasions, Fernandez inserted false and fabricated information into his clients’ income tax returns. This information included wholly fictitious and fraudulently inflated claims relating to deductions and credits. In addition, Fernandez omitted the names and personal identifying information of dependent children from their actual parents’ income tax returns, and then charged other clients $500 or more to add those dependents to their income tax returns in order to generate larger tax refunds.United States Attorney Carmen M. Ortiz, Assistant Attorney General Kathryn Keneally of the Department of Justice Tax Division, and Acting Special Agent in Charge John Collins of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today. The case was prosecuted by Assistant United States Attorney Lori Holik of Ortiz’s Economic Crimes Unit and Trial Attorney Sean R. Delaney of the Tax Division.
Long Island Fisherman and Fish Dealer Plead Guilty to Wire Fraud and Records FalsificationRead the Press Release
The operator of the dragger F/V Norseman and an associated fish dealer pleaded guilty Thursday in federal court in Central Islip, N.Y., to federal violations stemming from their role in systematically underreporting fluke (summer flounder) that was being harvested as part of the federal Research Set-Aside Program, the Justice Department’s Environment and Natural Resources Division announced.
Charles Wertz Jr., a commercial fisherman from East Meadow, N.Y., pleaded guilty to one count of wire fraud and two counts of falsification of federal records for knowingly submitting 137 falsified dealer reports from May 2009 through December 2011, and 70 falsified fishing logs, known as fishing vessel trip reports (FVTRs), from May 2011 through December 2011, as part of a scheme to defraud the United States of overharvested and underreported fluke. The fish dealer, C&C Ocean Fishery Ltd., pleaded guilty to one count of wire fraud and three counts of falsification of federal records for its participation in the scheme, which included aiding and abetting the submission of falsified dealer reports and FVTRs.
As part of the plea deal, the defendants agreed to pay between $480,000 and $516,000 in combined fines and forfeitures. The defendants also agreed to multiple sentence conditions, including relinquishment of federal fishing permits, a ban on participation in the Research Seat-Aside Program, divestiture of any interest in the F/V Norseman, and shutting down the company, C&C Ocean Fishery Ltd. The court will hear sentencing recommendations at a hearing set for Nov. 22, 2013.
“Protecting the integrity of the Research Set Aside program supports the goal of ensuring sustainable fisheries for future generations,” said Robert G. Dreher, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “When individuals like the defendant willfully defraud the government in order to turn a larger profit for themselves they are also cheating their fellow fishermen who choose to play by the rules. Today’s plea demonstrates that we will hold those who break the rules accountable and make sure that this valuable resource remains available to everyone.”“Our office takes these violations very seriously,” said Logan Gregory, Special Agent in Charge of the National Oceanic and Atmospheric Administration (NOAA) Office of Law Enforcement's Northeast Division. “This type of illegal activity has a ripple effect on seafood markets and impacts fishing communities by driving down the price of fluke which reduces the potential profits of fishermen and dealers who abide by the regulations. We hope the outcome of this case deters others from coming up with similar schemes to circumvent federal fisheries laws and regulations and from gaining an unfair advantage over those who comply with the regulations.”
Under NOAA regulations, all of the Norseman’s catch had to be reported to NOAA on FVTRs. During the years 2009, 2010, and 2011, the Norseman principally targeted fluke. However, on multiple occasions the vessel exceeded its relevant federal and New York State quotas for fluke for 137 trips, totaling 86,080 pounds of fluke worth approximately $200,000.
In order to cover up the illegal fluke harvesting, the operators of the Norseman falsified the FVTRs that were submitted to NOAA. For each of the 137 trips, a false FVTR was submitted. During 2009 and 2010, another individual submitted the false FVTRs, but by May 2, 2011, Mr. Wertz was falsifying and submitting the FVTRs himself. The defendants were aware that the FVTRs were utilized by NOAA as part of the administration of its statutory-mandated fisheries management program.C&C Ocean was not only aware of the false Norseman FVTRs, but it aided and abetted the perpetration of the FVTR scheme through its preparation of federal dealer reports. As a federal dealer, C&C Ocean was required to prepare and submit federal dealer reports to NOAA. The dealer reports include information such as date of landing, port of landing, catch vessel, corresponding FVTR numbers, commercial grade, species, price, and weight. In order to cover up the overharvesting that occurred on the water, C&C Ocean’s dealer report had to match the catch data that was submitted on the corresponding FVTR. In other words, if the FVTR falsely underreported the Norseman’s catch of fluke, then the scheme would likely be detected unless the corresponding dealer report was similarly falsified. Both defendants prepared and submitted false dealer reports for each of the trips set forth in the table.
The defendants electronically submitted the 137 false dealer reports from Wertz’s desktop computer in New York, through an out-of-state internet server, to NOAA’s Regional Fisheries Administrator in Gloucester, Mass.
The case was investigated by agents of NOAA’s National Marine Fisheries Service, with assistance from the New York State Department of Environmental Conservation Police. The case is being prosecuted by Christopher L. Hale of the Justice Department’s Environmental Crimes Section, Environment and Natural Resources Division.Related Materials:
Wertz Plea Agreement
C&C Plea AgreementLocal Police Department Recovers Proceeds from Dismantling Major Internet Gambling OperationRead the Press Release
Department of Justice
Office of Public AffairsPLANO, Texas – The federal government provided nearly $5 million in proceeds to the Plano Police Department after their joint efforts dismantled a major internet gambling operation, announced U.S. Attorney John M. Bales and IRS Criminal Investigation Acting Special Agent in Charge Madie Branch today.
The Plano Police Department was presented a check in the amount of $4,753,841.40 at an asset sharing ceremony today at the Plano Police Department. The check presentation was made by U.S. Attorney Bales and Acting SAC Branch.
The Plano Police Department began an investigation in 2006 in which an undercover police detective developed a betting relationship with a bookmaker. The bookmaker was part of a larger organization operating an offshore sports book that utilized toll free telephone numbers and the Internet as a means of accepting sports wagers from bettors located throughout the United States. Further investigation revealed the illegal gambling organization originated in North Texas and had operated the offshore Internet sports book utilizing a corporate identity, global Internet Corporation (GIC), incorporated in Willemstad Curacao Netherlands Antilles, since September 2002.
The investigation identified 18 individuals who conspired to illegally accept wagers on college and professional sporting events through approximately 25 Internet websites hosted in Curacao, Netherlands Antilles. The defendants provided bettors with a personal login code and password to facilitate the placement of wagers through the websites and to disguise their identities. Bettors were then directed to specific websites or to toll free numbers operated by the websites where the bettors placed wagers on sporting events.
On March 3 and 4, 2011, law enforcement officers executed 32 federal search warrants at residences, offices and safe-deposit boxes belonging to defendants. During the course of the investigation, 47 seizure warrants were also served seizing numerous bank and investment accounts, automobiles, businesses, and real properties. The investigation disclosed that this illegal Internet wagering organization generated in excess of $5.4 billion in gross wagers resulting in approximately $200 million in illegal earnings to the defendants from January 2007 to February 2011.
All 18 defendants have pleaded guilty to various criminal violations including money laundering, illegal gambling, structuring and tax violations related to income derived from their illegal gambling enterprise. To date, in excess of $10 million has been forfeited to the U.S. Government. In addition to forfeiture of money and assets and court ordered fines, the defendants were sentenced as follows:
Albert Sydney Reed, Jr., 57, of Southlake, Texas, was convicted of prohibition of illegal gambling business and sentenced to 12 months and 1 day in federal prison.
Curtis Wayne Higgins, 45, of Proper, Texas, was convicted of engaging in monetary transactions in property derived from illegal gambling and sentenced to 5 years of probation.
David Mullins, 48, of Coppell, Texas, was convicted of engaging in monetary transactions in property derived from illegal gambling and sentenced to 5 years of probation.
Dean Hartley Maddox, 69, of Houston, was convicted of willful failure to file a tax return and sentenced to 18 months of probation.
Carl Francis, 71, of Dallas, was convicted of prohibition of illegal gambling business and was sentenced to 3 years of probation, 6 months home confinement and 200 hours of community service.
Andrew Harris McElroy, 44, of Dallas, was convicted of engaging in monetary transactions in property derived from illegal gambling and sentenced to 3 years of probation.
Steven Arnold Bell, 58, of Arlington, Texas, was convicted of prohibition of illegal gambling business and sentenced to 2 years of probation and 6 months home detention.
Neil Marcus Gerson, 51, of Frisco, Texas, was convicted of prohibition of illegal gambling business and sentenced to 2 years of probation.
Robert Primm, 71, of Fort Worth, was convicted of a violation of willful failure to file a tax return and sentenced to 6 months of probation.
Charles Albert Brawner, 66, of McKinney, Texas, was convicted of engaging in monetary transactions in property derived from illegal gambling and sentenced to 5 years of probation.
Adam John Brady, 36, of Irving, Texas, was convicted of prohibition of illegal gambling business and sentenced to 2 years of probation.
William Craig Robertson, 42, of Rockwall, Texas, was convicted of prohibition of illegal gambling business and sentenced to 3 years of probation.
Thomas Applegate, 45, of Carrollton, Texas pleaded guilty to prohibition of illegal gambling business and is awaiting sentencing.
William Michael Christopher, 56, of Fort Worth, pleaded guilty to prohibition of illegal gambling business and is awaiting sentencing.
Larry Dean Coralli, 78, of Addison, Texas, pleaded guilty to prohibition of illegal gambling business and is awaiting sentencing.
Brent Lee Coralli, 48, of Plano, Texas, pleaded guilty to prohibition of illegal gambling business and is awaiting sentencing.
Robert Roy Hodges, 71, of Dallas, pleaded guilty to prohibition of illegal gambling business and is awaiting sentencing.
Gregg Richard Merkow, 49, of Plano, Texas, pleaded guilty to prohibition of illegal gambling business and is awaiting sentencing.
“Taking away the assets from these illegal organizations hits criminals where it hurts the most – it deprives them of their profits,” said Madie Branch, Acting Special Agent in Charge of IRS Criminal Investigation. “Today, we are transferring those seized profits from the criminals and giving them back to the communities.”
This case was prosecuted by Assistant U. S. Attorney Milton A. Stover and the investigation was led by the Internal Revenue Service Criminal Investigation and Plano Police Department. Additional agencies that assisted in the investigation and will be receiving proceeds at a later date include: Dallas Police Department, Denton County District Attorney’s Office, Flower Mound Police Department, Fort Worth Police Department, Arlington Police Department, Midlothian Police Department, Desoto Police Department, and Southlake Police Department.Leader of Drug and Money Laundering Conspiracy Receives 20 Years in Federal PrisonRead the Press Release
BOSTON – The leader of an organized crime group was sentenced to 20 years in federal prison for drug trafficking and money laundering after a multi-year FBI task force investigation into illegal activity in Boston’s Chinatown.
John Willis, 42, of Dorchester, also known by his Chinese nickname “Bac Guai John” (White Devil John), was sentenced by United States District Court Judge Joseph L. Tauro. He pleaded guilty in March to conspiracy to distribute oxycodone and money laundering conspiracy. Judge Tauro also imposed a criminal forfeiture money judgment of $2 million. Willis, along with 12 others, was first charged in 2011 for leading an organization which spanned Massachusetts, Florida, New York, Rhode Island, South Carolina and elsewhere. The organization trafficked hundreds of thousands of oxycodone pills and generated over $4 million in proceeds.
The FBI’s Organized Crime Task Force led a long-term investigation into drug-trafficking, illegal gambling, extortion, prostitution, and other criminal activity in Boston’s Chinatown and elsewhere. The investigation included a seven month, court-authorized wire surveillance of cell phones, including the phones of five of the defendants associated with the conspiracy. The investigation has resulted in the seizure of over $480,000 in cash, a 38-foot speed boat, numerous luxury vehicles, 13 firearms and approximately 12,000 oxycodone pills. Investigators also uncovered extensive evidence of illegal gambling and prostitution as well as the use of extortionate threats to collect loans to gamblers and others.
“Twenty years in federal prison is well-deserved for Mr. Willis, a career criminal and the mastermind behind this organization,” said U.S. Attorney Carmen M. Ortiz. “Not only did this investigation expose a world of illegal gambling, prostitution, and extortion, but also revealed a significant Oxycodone distribution operation. This case significantly disrupted the flow of this highly-addictive, dangerous heroin substitute which has been responsible for numerous deaths in Massachusetts.”
“Mr. Willis and his associates are an example of the opportunistic nature of organized crime groups whose members share a common bond of victimizing their communities through drug dealing, illegal gambling, extortion and exploitation of women in their quest for illegal profits,” said Vincent Lisi, Special Agent in Charge of the FBI’s Boston Division. “The methodical nature and duration of this investigation reflects the focus of the Boston Organized Crime Task Force, which is composed of the Massachusetts State Police, Medford, Boston, and Quincy Police Departments, Massachusetts Department of Corrections and IRS-CID, to secure justice for the victims and to make the community safer.”
The following were also convicted of the drug-trafficking conspiracy and, in the cases of some defendants, money laundering conspiracy: Kevin Baranowski, 41, of Boston, sentenced to 80 months; Peter Melendez, 50, of Sunrise, Fla., sentenced to 160 months; Colby Deering, 41, of Quincy, sentenced to 60 months; Brian Bowes, 42, of Sunrise, Fla., sentenced to 57 months. Bridget Welty, 40, of Boston, was convicted of structuring, and was sentenced to a year of supervised release. Anh Nguyen, 28, of Boston, was convicted of witness tampering, and sentenced to a year of probation. Brant Welty, 39, of Boston, and Aibun Eng, 38, of Quincy, both convicted of drug conspiracy, are scheduled to be sentenced on Sept. 18. Michael Clemente, 29, of Sunrise, Fla., also convicted of drug conspiracy, is scheduled for sentencing on Oct. 1.
Willis has a long history of involvement in organized crime. He was involved with several others who were charged in this investigation. In one case, the following defendants were convicted of operating an illegal gambling business, which had been based at 17-23 Beach Street in Chinatown since 2010. Minh Cam Luong, a/k/a Ming Jai, 46, Hin Pau, 45, and Judy Huyen Truong, 41, of Quincy; Jian Ming Chen, 38, of Brighton; Elburke Lamson, 47, of Chelsea; and Tan Ngo, 54, of Waltham. Luong and Pau also were convicted of conspiring to use and/or using extortionate means, including threats or actual use of violence, to collect debts, including debts owed to the illegal gambling business.
Luong, was sentenced to 84 months; Pau, 96 months; Chen, one year and one day; Lamson, six months; Ngo,18 months; and Truong, time served and seven months supervised release. Finally, Chien Van Tran, 43, of Malden, whose case is pending, is charged with operating an illegal gambling business and extortion conspiracy.
According to an FBI affidavit filed with the court, Luong and Ngo were both members of Chinatown’s Ping On gang in the late 1980s and early 1990s, when the Ping On gang was vying for control of crime in Chinatown. Both were convicted and have served federal prison sentences on charges including heroin trafficking. Willis, also involved in the Ping On gang, was a follower of Ngo.
In another case arising from this investigation, Wei Xing Chen, 50, of Cambridge, was convicted of possession with intent to distribute benzylpiperazine (BZP), also known as ecstasy, and conspiracy to distribute BZP. In addition, Chen and Xiaohong Xue, 41, of Cambridge, were convicted of conspiring to induce travel to engage in prostitution. Chen also was convicted of money laundering conspiracy. Chen, who operated brothels in Cambridge and Boston, was sentenced to 70 months while Xue was sentenced to two years of probation, including six months of home detention.
Willis and several of his co-defendants frequented Chen’s brothels and Luong’s gambling den. Employees of Luong’s gambling business frequented Chen’s brothels. Some of Luong’s employees associated with Willis. Willis also served as an enforcer for Chen.
In a final case arising from this investigation, brothers Stanley Gonsalves, 34, of Sandwich, and Joshua Gonsalves, 33, of Dennisport, have been charged with distribution and conspiracy to possess with intent to distribute oxycodone. Both defendants are detained pending trial.
U.S. Attorney Ortiz and FBI Special Agent in Charge Lisi made the announcement today. The case was investigated by the FBI’s Organized Crime Task Force which includes IRS Criminal Investigation, Massachusetts State Police, Massachusetts Department of Correction, and Quincy, Medford and Boston Police Departments. Assistance was also received from the DEA, ICE Homeland Security Investigations, Cambridge Police Department, New York City Police Department, Broward County (Fla.) Sheriff’s Office and the Ridgeland and Dillon Police Departments in South Carolina. The case was prosecuted by Assistant U.S. Attorneys Timothy E. Moran and Richard L. Hoffman of Ortiz's Strike Force Unit.
Kentucky Resident Charged with Tax Evasion and Other Tax Fraud ChargesRead the Press Release
WASHINGTON, DC - Kathryn Keneally, Assistant Attorney General of the Justice Department’s Tax Division, and Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, jointly announced today that James S. Faller II, of Russell Springs, KY., was indicted by a federal grand jury in Bowling Green, KY. Faller, a consultant and private investigator, is charged in an eleven count indictment with obstructing the internal revenue laws, evading his individual income taxes, making and subscribing to a false form that he filed with the Internal Revenue Service (IRS) and failing to file his individual income tax returns.
The indictment, returned on Wednesday, alleges that Faller obstructed the IRS’s ability to collect payment of a substantial penalty he owed to the government and the IRS’s ability to identify his income from 2006 through 2009. According to the indictment, Faller evaded the payment of a $216,000 penalty related to unpaid employment taxes of Call Center Communications Inc., of which Faller was the president. In addition, Faller was charged with evading his individual income taxes from 2006 through 2009. He allegedly failed to report more than $960,000 of income during this four-year period and committed various affirmative acts of evasion.
Faller faces a maximum punishment of three years in prison for the charge of obstructing the internal revenue laws; five years for each count of evading his individual income taxes; three years for making and subscribing to a false form that he filed with the IRS; and one year for each count of failing to file his individual income tax returns. He faces a maximum fine of $100,000 on each count of failing to file his income tax returns and $250,000 for each of the other counts. An indictment merely alleges that a crime has been committed, and a defendant is presumed innocent until proven guilty beyond a reasonable doubt.
The case resulted from an investigation by special agents of the IRS - Criminal Investigation. Tax Division Trial Attorney Thomas Voracek and Assistant U.S. Attorney Lee Gentry are prosecuting the case.
Justice Department Files Lawsuit in Delaware Against Regal Contractors, LLC, Et Al., to Enforce the Employment Rights of Air Force Reserve MemberRead the Press Release
WILMINGTON, Del. — The Justice Department and U.S. Attorney for the District of Delaware Charles M. Oberly III announced today the filing of a lawsuit alleging that Regal Contractors LLC, Regal Builders LLC and Noble Pond Homes willfully violated the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) by terminating U.S. Air Force Reserve Member Lon Fluman following his return from required military training with his reserve unit.
Fluman is a Senior Airman with the U.S. Air Force Reserve serving with the 712th Aircraft Maintenance Squadron at Dover Air Force Base. According to the complaint, filed in the U.S. District Court for Delaware, Fluman was scheduled for reserve military duty to begin on Sept. 3, 2012 but was rescheduled on short notice to start one day later. Subsequently, Fluman served weekend reserve duty in early December of 2012. Following his second duty, the defendants terminated Fluman from his position as a maintenance technician. Although Fluman satisfied USERRA’s notification requirements before departing for his military leaves, according to the complaint, the defendants terminated Fluman anyway, claiming the notice provided was not sufficient.
USERRA explicitly protects the rights of members of the uniformed services to retain their employment following absences due to military service obligations. “Congress enacted USERRA to protect our men and women in uniform from experiencing this kind of injustice,” said Jocelyn Samuels, Acting Assistant Attorney General for the Civil Rights Division. “The Justice Department is committed to vigorously enforcing federal laws that protect the employment rights of our servicemembers.”
“Members of the Air Force Reserve sacrifice time away from their jobs to serve their country,” said U.S. Attorney Oberly. “USERRA ensures that they are not discriminated against and that their employment rights are protected.”
This case stems from a referral by the U.S. Department of Labor following an investigation by the Department of Labor’s Veterans’ Employment and Training Service. The case is being handled by the Civil Rights Division and the U.S. Attorney’s Office for the District of Delaware, who work collaboratively with the Department of Labor to protect the jobs and benefits of National Guard and Reserve servicemembers upon their return to civilian life.
Additional information about USERRA can be found on the Justice Department website: www.servicemembers.gov and www.usdoj.gov/crt/emp, as well as on the Labor Department’s website at www.dol.gov/vets/programs/userra/main.htm.
Fluman Complaint
Judge Sentences Bucketlist Bandit to 135 Months in PrisonRead the Press Release
ERIE, Pa. - A former resident of Pensacola, Florida, has been sentenced in federal court to 135 months in prison and ordered to make restitution to the banks involved on his conviction of bank robbery, United States Attorney David J. Hickton announced today.
Chief United States District Judge Sean M. McLaughlin imposed the sentence on Michael Eugene Brewster, 54.
According to information presented to the court, between June 21, 2012 and September 10, 2012, Brewster robbed eleven banks across the nation. In the course of the bank robbery spree Brewster used a similar method of operation and entered each bank, without being disguised, wore similar clothes, carried a dark leather notebook, presented demand notes containing similar threatening language to each of the victim tellers, and left the scene driving a 2009 black SUV, which Brewster had stolen in Pensacola, Florida. In his last bank robbery in Erie, Pennsylvania, on September 10, 2012, Brewster entered the Huntington National Bank, located at 2185 West 12th Street and presented a demand note, claiming that he had a gun and that the teller had one minute to comply. Brewster then claimed to the teller that he had cancer and did not care what happened. Brewster obtained bank proceeds and fled the area in a black SUV. Bank surveillance images and images from area surveillance cameras clearly depicted Brewster and the vehicle he used. Comparing the Erie Huntington Bank surveillance photographs with those from the ten other bank robberies that had occurred throughout the United States confirmed that each robbery had been committed by the same person. On September 12, 2012, the FBI received a tip that the bank robber depicted in the surveillance photographs was Brewster. A review of Brewster's Florida driver's license confirmed Brewster's identity as the bank robber. In addition, evidence disclosed that an arrest warrant had been issued for Brewster alleging that he had stolen a black Chevy Captiva SUV in Pensacola, Florida on June 11, 2012. Once Brewster's identity had been established in the Erie, Pennsylvania robbery, the FBI and law enforcement partners in the jurisdictions of the other ten bank robberies confirmed his identity in those cases as well.
Brewster entered the Chase Bank at 5250 Wadsworth Boulevard in Arvada, Colorado on June 21, 2012, the Chase Bank at 1484 South Milton Road in Flagstaff, Arizona on June 27, 2012; and the Ireland Bank at 486 Yellowstone Avenue in Pocatello, Idaho on July 6, 2012, and obtained federally insured funds after presented a threatening note demanding money. In Roy, Utah on July 6, 2012, Brewster entered the Wells Fargo Bank located at 5603 South 1900 West, and obtained money after presenting a threatening demand note claiming that he had only four months to live. In Winston-Salem, North Carolina on July 20, 1012, Brewster entered a Bank of America at 1209
Silas Creek Parkway and presented a threatening demand note indicating that he had nothing to lose and threatening to come back after the teller if any silent alarm was activated. Brewster obtained no money from the Wells Fargo Bank. Then, at the Regions Bank at 360 West State Road 436 in Altamonte Springs, Florida on July 27, 2012, the BB&T bank at 2120 Gunbarrel Road in Chattanooga, Tennessee on August 3, 2012; the PNC bank at 2217 West Market Street in Bloomington, Illinois on August 17, 2012; the Lamdmark bank at 202 North Stadium Boulevard in Colombia, Missouri on August 29, 2012; and the Lindell bank at 4521 Highway K in O'Fallon, Missouri on August 30, 2012, Brewster obtained money after presenting threatening demand notes, including a claim that he was armed with a gun.On September 13, 2012, a police officer with the Roland Police Department in Roland, Oklahoma conducted a traffic stop of a black, 2009, Chevy Captiva vehicle and identified Brewster as the driver and sole occupant. A fake Utah license plate had been affixed to the vehicle. A computer check of Brewster's name revealed Brewster's outstanding arrest warrant in Pensacola, Florida for allegedly stealing the Chevy Captiva vehicle. Brewster was then taken into custody and was found to be in possession of money from the Erie, Pennsylvania Huntington bank robbery. Among other items located in the Captiva vehicle was a handgun, money from the Erie, Pennsylvania Huntington Bank robbery, the clothing worn by Brewster in the bank robberies as depicted in the surveillance photographs, and the leather notebook carried by Brewster into the banks he robbed. Brewster was then arrested on the Erie, Pennsylvania arrest warrant and he was returned to the Western District of Pennsylvania to face federal prosecution.
Prior to imposing sentence, Judge McLaughlin commented on the fact that Brewster's claim of a terminal disease was untrue and stated that, "The impetus for the crimes was simply greed, not grief."
Assistant United States Attorney Marshall J. Piccinini prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Federal Bureau of Investigation in each of the jurisdictions, the Erie Bureau of Police, the Arvada Police Department, the Flagstaff Police Department, the Pocatello Police Department, the Roy City Police Department, the Winston-Salem Police Department, the Altamonte Springs Police Department, the Chattanooga Police Department, the Bloomington Police Department, the Columbia Police Department, the O'Fallon Police Department and the Roland Police Department for the investigations leading to the successful prosecution of Brewster.
Iranian National Sentenced in Manhattan Federal Court to 30 Months in Prison for Conspiring to Export Satellite Technology from the United States to IranRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, George Venizelos, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), James T. Hayes, Jr., the Special Agent-in-Charge of the New York Field Office of U.S. Immigration and Customs Enforcement’s (“ICE”) Homeland Security Investigations (“HSI”), Kenneth Siegler, the Resident Agent-in-Charge of the New York Office of the Defense Criminal Investigative Service (“DCIS”), Sidney Simon, the Special Agent-in-Charge of the U.S. Commerce Department, Bureau of Industry and Security’s Office of Export Enforcement New York Field Office (“OEE”), and Robert E. Perez, Director of New York Field Operations for U. S. Customs and Border Protection (CBP), announced that SEYED AMIN GHORASHI SARVESTANI, an Iranian national, was sentenced yesterday in Manhattan federal court to 30 months in prison for conspiring to export goods, including satellite technology and hardware, from the United States to Iran, in violation the International Emergency Economic Powers Act. GHORASHI was arrested on October 3, 2012, and pled guilty on May 8, 2013 before U.S. District Judge Paul G. Gardephe, who also imposed yesterday’s sentence.
According to the Complaint, the Information to which GHORASHI pled guilty, and statements made during the plea proceeding:
GHORASHI, an Iranian national, was an owner of, and served as a managing director and director of, two related companies based in the United Arab Emirates. In that capacity, he worked with others to export electronic equipment used for satellite communications and data transfer, as well as other goods, from the United States to Iran, without the requisite approval from the U.S. Department of Treasury, Office of Foreign Assets Control.
GHORASHI and others conspired to acquire satellite technology and hardware from a supplier based in the United States, for shipment to Iran. To conceal the true destination of the goods from the U.S. supplier, GHORASHI and his co-conspirators arranged for the items to be shipped first to the United Arab Emirates and subsequently shipped to Iran.
Mr. Bharara praised the investigative work of the New York Offices of the FBI, ICE-HSI, DCIS, and OEE. Mr. Bharara also thanked CBP for their assistance.
In addition to the prison term, GHORASHI, 46, was ordered to pay a $100,000 fine and to forfeit $54,000. Judge Gardephe also ordered him to pay a $100 special assessment.
This case is being handled by the Office’s Terrorism and International Narcotics Unit. Assistant U.S. Attorney Rachel P. Kovner is in charge of the prosecution.
Hunting and Fishing Guide Guilty of Federal Wildlife ViolationRead the Press Release
Department of Justice
Office of Public Affairs“Gar Guy” admits that he transported alligator killed in violation of state and federal law
BEAUMONT, Texas – A 49-year-old Kennard, Texas, hunting and fishing guide has pleaded guilty to transporting an alligator that he knew had been shot in violation of state and federal wildlife laws, announced U.S. Attorney John M. Bales today.
Steve Barclay, 49, pleaded guilty on Aug. 13, 2013, before U.S. Magistrate Keith F. Giblin to the felony offense of transporting wildlife taken in violation of federal law. Barclay admitted that on May 8th, 16th, and 20th of 2008 he witnessed John A. McCall, a client for whom he was providing guide services, shoot and kill a total of three alligators even though Barclay knew that Texas law limits hunters to one alligator per hunter per season. Barclay admitted that he transported the alligator killed on May 20th in Leon County to Sportsman’s Memory taxidermy shop in Grapeland, Texas.
The Endangered Species Act prohibits the taking of any threatened species of fish or wildlife in violation of any federal or state regulation pertaining to such species. Alligators are listed as a threatened species pursuant to the Endangered Species Act. The Lacy Act prohibits the transport, receipt, or acquisition of any wildlife taken, possessed, or transported in violation of any law, treaty, or regulation of the United States.
Although Barclay is facing up to 5 years in federal prison and a $250,000.00 fine, his plea agreement with the government, subject to approval by the court, calls for a $5,000 fine and three years’ probation.This case was investigated by the U.S. Fish and Wildlife Service, Office of Law Enforcement, Houston, and the Texas Parks and Wildlife Department, Criminal Investigations Division, and prosecuted by Assistant U.S. Attorney Jim Noble.
The mission of the U.S. Fish and Wildlife Service is working with others to conserve, protect, and enhance fish, wildlife, plants, and their habitats for the continuing benefit of the American people. It is both a leader and trusted partner in fish and wildlife conservation, known for its scientific excellence, stewardship of lands and natural resources, dedicated professionals, and commitment to public service. For more information on its work and the people who make it happen, visit www.fws.gov. Connect with its Facebook page at www.facebook.com/usfws, follow its tweets at www.twitter.com/usfwshq, watch its YouTube Channel at https://www.youtube.com/usfws and download photos from its Flickr page at http://www.flickr.com/photos/usfwshq.
Heroin and Methamphetamine Trafficking Group IndictedRead the Press Release
LAREDO, Texas – Eleven members of a heroin and methamphetamine trafficking group have been arrested throughout the Southern District of Texas and elsewhere for their involvement in a large-scale drug conspiracy, United States Attorney Kenneth Magidson announced today.
The indictment, returned under seal July 23, 2013, alleges the group was responsible for smuggling heroin and methamphetamine from Mexico into the United States at ports of entry from San Diego, Calif., to Brownsville. Authorities allegedly intercepted shipments of drugs totaling 131 kilograms of heroin and 31 kilograms of methamphetamine. The drugs were transported utilizing private vehicles and were seized at the ports of entry or border checkpoints, according to the indictment.
Arrested today were Luis Daniel Aguilar, 22, Eduardo Aguilar-Vera, 37, Juan Trevino, 23, and Jose Librado Sanchez-Guerra, 29, all of Laredo; Edgar Loera, 30, and Antonio De Jesus Mejia-Contreras, 23, both of Mira Loma, Calif.; Clementina Aguilar-Castillo, 29, and Ericka Pina, 37, both of Corpus Christi; Eduardo Segura, 22, of Tucson, Ariz.; Leticia Corona, 37, of Dallas; and Miguel Angel Vives-Macias, 34, of San Antonio. The indictment remains as to those charged but not as yet in custody. Some will or have already made their initial appearances in federal court in the jurisdiction where they were arrested. Those taken into custody in Laredo are expected to make their initial appearances tomorrow morning.
All defendants are charged with conspiracy to import and possession with intent to distribute controlled substances and face up to 10 years in federal prison and a possible $10 million fine, upon conviction. Aguilar, Loera, Aguilar-Vera and Trevino are also charged with conspiracy to launder monetary instruments. If convicted, they face a sentence of up to 20 years and a maximum $500,000 fine. The substantive counts of heroin and/or methamphetamine trafficking carry varying terms of federal imprisonment up to a possibility of life depending upon the amount of drugs involved.
The Organized Crime Drug Enforcement Task Force investigation was conducted by Homeland Security Investigations, Drug Enforcement Administration and the Texas Department of Public Safety. This case is being prosecuted by Assistant United States Attorney José Angel Moreno.
An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.Government Contractor in Huntsville Pleads Guilty in $14 Million Fraud SchemeRead the Press Release
BIRMINGHAM – A federal government contractor in Huntsville pleaded guilty today in federal court to charges related to a scheme to defraud the government of nearly $14 million in contract payments over six years.JOSEPH SHANE TERRY, 40, of Meridianville, Ala., and sole owner of Government Technical Services, entered his plea before U.S. District Judge R. David Proctor to charges of wire fraud, false statements to the Small Business Administration, false statements on loan applications, and money laundering. As part of his plea agreement, Terry is to forfeit a minimum of $1 million to the government as proceeds of illegal activity. No sentencing date has been set.
U.S. Attorney Joyce White Vance; Internal Revenue Service, Criminal Investigation, Special Agent in Charge Veronica Hyman-Pillot; Department of the Army, Criminal Investigation Command Special Agent in Charge James Wallis; Department of Defense, Defense Criminal Investigative Service Special Agent in Charge John F. Khin; and Small Business Administration Inspector General Peggy E. Gustafson announced the plea.
"This case was the result of a four-year investigation involving multiple federal investigative agencies," Vance said. "Fraud against the government costs every taxpayer and harms communities, such as Huntsville, whose economy relies heavily on the defense industry. We are committed to investigating and prosecuting fraud by defense contractors against the United States," she said.
According to Terry's plea agreement, he carried out his scheme to defraud the government as follows:
In 2003, Terry applied for and obtained a small disadvantaged or minority-owned business status from the SBA by submitting fraudulent tax returns. In order to maintain that status, Terry also submitted false tax returns to the SBA for each year from 2004 through 2008. Having the special status with the SBA enabled GTS to bid on and win government contracts specifically set aside for small disadvantaged businesses.
Terry submitted personal and corporate returns to the SBA for the tax years 2002 through 2007 to show he was current on filing his taxes, but he had never filed the returns with the IRS.
Terry's wire fraud scheme culminated in GTS obtaining a $961,551 contract in September 2006 to install metal roofing on three buildings at Fort Polk, La. In order to obtain authorization to start work on this contract, GTS submitted forged performance and payment bonds and a power of attorney from a Mississippi bond company and its parent surety company in Louisiana. GTS won the contract, but was terminated in April 2008 for failing to perform the work and for providing fraudulent bonds. In all, Terry employed the scheme to fraudulently obtain more than $14 million in government contracts.
Terry pleaded guilty to five wire fraud counts that involved separate electronic fund transfers totaling more than $500,000. The money was transferred from the Defense Finance and Accounting Service in Indiana, an agency of the Department of Defense, to a bank account of Terry's in Huntsville in 2007. The five transfers were all payments to GTS on the Fort Polk roofing contract.
Terry also pleaded guilty to three counts of mortgage fraud in the Madison County area by inducing banks to make mortgage loans totaling $480,000 based on his false tax returns and other false financial documents.
The money laundering that Terry pleaded guilty to is related to one of the false statements he made on a loan application. Terry admitted that in 2008 he induced his then-girlfriend to apply for a loan and supplied documents falsely claiming that GTS employed her. Terry admitted to money laundering for using the fraudulently obtained loan proceeds for his own purposes.
The normal statute of limitations on fraud against the United States is five years. However, certain charges in this indictment were prosecuted under the Wartime Suspension of Limitations Act, which operates to suspend the statute of limitations for crimes involving fraud against the Government during a time when the United States is at war or there is an Authorization for Use of Military Force in effect, such as for Afghanistan and Iraq. This case represents the first time that this suspension statute has been used in this district.
Terry faces a maximum penalty of 30 years in prison and a $1 million fine.
IRS, Criminal Investigations; U.S. Army Criminal Investigation Command; SBA, Office of Inspector General; and Department of Defense, Defense Criminal Investigative Service, investigated the case. Assistant U.S. Attorneys David Estes and Jennifer Murnahan are prosecuting the case.
Fourteen-year Sentence for Darke County Man Convicted of Receipt and Possession of Child PornographyRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
Richard Trepanier, 40, of Gettysburg, Ohio was sentenced to 168 months in prison for receiving and possessing child pornography in a case that began with an undercover investigation by Australian law enforcement.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, and Kevin R. Cornelius, Special Agent in Charge, Federal Bureau of Investigation (FBI), announced the sentence handed down today by U.S. District Judge Thomas M. Rose.
Following a six-day trial, a jury convicted Trepanier on April 16, 2013 of one count of receipt of child pornography and one count of possession of child pornography.
Trepanier, using the name “Wingman66”, contacted an Australian Federal Police undercover officer patrolling the internet in February 2008 and offered him images of child pornography. The Australian authorities tracked the user name to Trepanier and sent the information to the FBI’s office in Cincinnati.
FBI agents interviewed Trepanier who consented to a search of his computer by the Miami Valley Regional Computer Forensics Laboratory. Their analysis identified approximately 56 images of child pornography and evidence that Trepanier was trading child pornography.
“This case demonstrates the international cooperation that is necessary to protect children from exploitation,” U.S. Attorney Stewart said.
“These series [of images] were created not only within the United States (Washington, North Carolina, Florida, and Georgia), but they were also created abroad (France, England, Denmark, Germany, Paraguay, and Belgium),” Dayton Branch Chief Laura Clemmens and Assistant U.S. Attorney Christy Muncy wrote in a memorandum filed with the court prior to sentencing. “This simple fact highlights the heartbreaking reality of the child pornography industry: it knows no borders.”
Trepanier was also sentenced to serve ten years under court supervision after completing his prison sentence. While under court supervision, he must register as a sex offender anywhere he lives, works or goes to school.
This case was brought as part of Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the U.S. Attorneys Offices, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov/.
U.S. Attorney Stewart commended the cooperative investigation by the agencies involved, as well as Clemmens and Muncy, who prosecuted the case.
Former Top Officers of Vitesse Semiconductor Corporation Plead Guilty in Manhattan Federal Court to Conspiring to Obstruct an Impending Federal InvestigationRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that LOUIS TOMASETTA, the founder and former CEO of Vitesse Semiconductor Corporation (“Vitesse”), a publicly-traded company, and EUGENE HOVANEC, the former Chief Financial Officer and Vice President of Vitesse, pled guilty in Manhattan federal court to conspiring to destroy, alter, or falsify records relating to Vitesse’s April and October 2001 stock option grants with the intent to obstruct a contemplated investigation by the U.S. Securities and Exchange Commission (“SEC”). TOMASETTA and HOVANEC pled guilty before U.S. District Judge Jed S. Rakoff to a one-count Superseding Information, which was filed today.
Manhattan U.S. Attorney Preet Bharara said: “With today’s guilty pleas, Louis Tomasetta and Eugene Hovanec answer as felons for their attempts to use their positions of power to obstruct an investigation they expected the SEC to conduct into their company’s accounting practices. As this case demonstrates, we will not hesitate to reach into corporate board rooms and executives suites to shine a light on corrupt practices.”
According to the Superseding Information, evidence in prior court proceedings, and statements made during today’s guilty plea proceeding:
During 2001 to 2006, Vitesse’s Board of Directors, specifically the Compensation Committee of the Board (the “Compensation Committee”), administered shareholder approved stock options plans (the “Plans”) and had the authority under the Plans to grant stock option awards. Vitesse’s public filings for the 2001 to 2005 year-end period indicated that the exercise price of all stock options was at least equal to the fair market value of Vitesse’s stock price on the date of the grant. During this time period, TOMASETTA, HOVANEC, and others, generally initiated and oversaw the option grant process.
Controversy Concerning the April and October 2001 Option Grants
In November 2005, Yatin Mody (“Mody”), then Vitesse’s Chief Financial Officer, contacted Vitesse’s then-outside law firm (“Law Firm-1”) concerning a press inquiry about Vitesse’s stock option practices. After reviewing documents related to stock option grants in April 2001 and October 2001, Law Firm-1 advised Mody and TOMASETTA that it had concerns about those option grants, and specifically concern about whether Vitesse had properly accounted for these option grants. For example, Vitesse’s April 12, 2001 Compensation Committee meeting minutes memorialized option grants with an exercise price at the April 6, 2001 closing price of Vitesse’s stock, which was lower than the April 12 closing price. These minutes raised a question about whether the options were in fact granted on the day of the meeting (April 12) or on the earlier date (April 6), and potentially affected the accounting treatment of the options in a way that would require adjustments to Vitesse’s financial reports. Similarly, the Compensation Committee meeting minutes from October 25, 2001 memorialized option grants with an exercise price at the October 2, 2001 closing price, which was lower than the October 25 closing price.
In late November 2005, after discussions with TOMASETTA and HOVANEC, Mody created minutes of the Compensation Committee meetings allegedly held on April 6, 2001 and October 2, 2001. Mody then provided copies of these minutes to Law Firm-1, and specifically advised Law Firm-1 that they were prepared in November 2005 to reflect what had actually occurred at those meetings.
Tomasetta and Hovanec Alter and Fabricate Records Regarding the 2001 Option Grants
On March 18, 2006, the Wall Street Journal published an article that raised questions about stock option practices at various companies, including Vitesse. Following the article, Law Firm-1 raised concerns to Vitesse’s directors and management, including TOMASETTA and HOVANEC, about Vitesse’s option grants and specifically, about the fact that Compensation Committee minutes had been created years after the fact. Law Firm-1 informed TOMASETTA and HOVANEC that because of the Wall Street Journal article, there was a significant possibility of an SEC investigation into Vitesse’s option practices and disclosures.
At a meeting on April 11, 2006, Law Firm-1 also advised Vitesse’s directors and management, including TOMASETTA and HOVANEC, that Mody’s after-the-fact creation of Compensation Committee meeting minutes raised questions about whether the meetings had actually occurred. That same day, Vitesse’s Audit Committee retained a law firm (“Law Firm-2”) to conduct an independent investigation into Vitesse’s stock option grants. Law Firm-2 requested that Vitesse provide it with access to the computer used by the Vitesse employee who was responsible for actually typing the minutes of the Compensation Committee meetings when they occurred (the “Assistant’s Computer”).
With an understanding that Law Firm-2 would access the Assistant’s Computer, on April 12, 2006, TOMASETTA, HOVANEC, and Mody created documents that purported to be minutes of meetings of Vitesse’s Compensation Committee on April 6, 2001 and October 2, 2001, authorizing option grants at those meetings. After creating these documents, they transferred electronic copies of the documents containing the two recently created sets of minutes to the Assistant’s Computer and, in an effort to make it appear that the minutes were created at an earlier time, TOMASETTA, HOVANEC, and Mody reset the computer’s internal clock to backdate the creation date of these purported minutes. TOMASETTA and HOVANEC engaged in this action to obstruct Law Firm-2’s internal investigation, knowing that there was likely to be an SEC investigation of Vitesse’s option grant practices and disclosures.
TOMASETTA, 64, Ojai, California, and HOVANEC, 61, Westlake Village, California, each pled guilty to one count of conspiracy to destroy, alter, or falsify records in contemplation of a federal investigation, which carries a maximum term of five years in prison.
Yatin Mody, 50, of Westlake Village, California, pled guilty in December 2010, before U.S. District Judge John G. Koeltl, to an Information charging him with securities fraud, making false entries in the financial records of a corporation, and conspiracy pursuant to a cooperation agreement with the Government. He awaits sentencing.
Mr. Bharara praised the investigative work of the U.S. Postal Inspection Service and the Criminal Investigators of the U.S. Attorney’s Office, which jointly investigated this case. He also thanked the SEC for its assistance.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force, on which U.S. Attorney Bharara serves as a Co-Chair of the Securities and Commodities Fraud Working Group. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.StopFraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys John J. O’Donnell, Katherine R. Goldstein and David I. Miller are in charge of the prosecution.
U.S. v. Eugene Hovanec & Louis Tomasetta S2 Superseding Information
Former Studio Assistant to Jasper Johns Charged in Manhattan Federal Court with $6.5 Million Scheme to Sell Stolen Johns WorksRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and George Venizelos, the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), today announced the unsealing of an Indictment charging JAMES MEYER, a former assistant to artist Jasper Johns, with selling 22 works that he stole from Johns’ studio in Sharon, Connecticut. MEYER was arrested yesterday morning at his home in Salisbury, Connecticut, and appeared in federal court in Hartford that afternoon.
Manhattan U.S. Attorney Preet Bharara said: “As alleged, James Meyer is the latest in a long line of thieves who sought to make millions through a fraud on the art world. Meyer, a former assistant to artist Jasper Johns, allegedly stole and resold a number of pieces he was charged with maintaining. His arrest underscores our commitment to exposing deception in this lucrative industry and holding fraudsters to account.”
FBI Assistant Director-in-Charge George Venizelos said: “As alleged, James Meyer exploited his position of trust to steal repeatedly from his long-time employer. That his employer is a renowned American artist only made the crime more lucrative. To convert the artworks to cash, Meyer allegedly engaged in a serial scheme to deceive the buyers of the art and the gallery through which they bought it.”
According to the allegations in the Indictment unsealed yesterday in Manhattan federal court:
JAMES MEYER was a studio assistant for Johns for over 25 years, and was responsible for, among other things, maintaining a studio file drawer containing pieces of art that were not yet completed by Johns and not authorized by Johns to be placed in the art market.
Between September 2006 and February 2012, MEYER removed 22 individual pieces of art from the studio file drawer he was responsible for maintaining, and from elsewhere in Johns’ studio, and transported those pieces from the studio in Sharon to an art gallery located in Manhattan for the purpose of selling those works without the knowledge or permission of Johns. MEYER represented both to the owner of the gallery (the “Gallery Owner”) and to potential purchasers that these pieces had been given to him as gifts by Johns when, in fact, that was not true.
As part of his scheme to defraud, MEYER provided sworn, notarized certifications both to the Gallery Owner and to buyers stating that each piece was an authentic Johns work, that the art had been given to him directly by Johns, that he was the rightful owner of the piece, and that he had the right to sell that particular work. In addition, MEYER conditioned the sale of each of these works on the signed agreement by the purchaser that the art would be kept private for at least eight years, during which time the piece would not be loaned, exhibited, or re-sold.
MEYER also created fictitious inventory numbers for these pieces to give the impression that they were finished works that were authorized by Johns to be sold in the art market. Additionally, and to facilitate certain sales, MEYER created fake pages that he thereafter inserted into a ledger book of registered pieces of art maintained at Johns’ studio, and which he subsequently photographed, to give additional assurances to prospective buyers about the provenance, or history of ownership, of a particular piece.
During the course of his almost six-year scheme, the Gallery Owner sold 22 works of art on MEYER’s behalf for a total of approximately $6.5 million, of which $3.4 million was remitted directly to MEYER in sales proceeds.
MEYER, 51, of Salisbury, Connecticut, is charged with one count of interstate transportation of stolen property, which carries a maximum sentence of 10 years in prison, and one count of wire fraud, which carries a maximum sentence of 20 years in prison. U.S. District Judge Alvin K. Hellerstein is assigned to the case.
Mr. Bharara praised the FBI for its outstanding work in the investigation.
This case is being handled by the Office’s Complex Frauds Unit. Assistant U.S. Attorney Christopher D. Frey is in charge of the prosecution.
The charges contained in the Indictment are merely accusations and the defendant is presumed innocent unless and until proven guilty.
U.S. v. James Meyer Indictment
Former Sales Manager Pleads Guilty in Manhattan Federal Court to Multi-Million Dollar Scheme That Targeted Debt-Ridden ConsumersRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that DENIS KURLYAND, the former Vice President of Sales for Mission Settlement Agency (“Mission”), pled guilty to fraud charges for his role in a multi-million dollar scheme that victimized more than 1,200 debt-ridden individuals across the country. KURLYAND, who was charged in May 2013, pled guilty today in Manhattan federal court before U.S. District Judge Paul G. Gardephe. He is the third defendant to plead guilty in the case.
According to the allegations contained in the Indictment against Mission, KURLYAND, and two other Mission employees and its owner, other documents filed in Manhattan federal court, and statements made at related court proceedings:
Mission offered “debt settlement” services to financially disadvantaged individuals who were struggling or unable to pay their credit card debts. Like other purported debt settlement providers, Mission held itself out as a company that could successfully negotiate to lower the overall debt its customers owed to credit card companies and banks.
The defendants targeted financially disadvantaged individuals known to be struggling to pay credit card debt and reached out to them through telemarketing and mail solicitations. Thereafter, Mission’s sales representatives typically spoke to the prospective customers on the phone, describing Mission’s work and its ability to renegotiate debt.
From 2009 through May 2013, the defendants systematically exploited and defrauded over 1,200 financially disadvantaged individuals across the country who were struggling to pay their credit card debts. They tricked people into paying Mission for purported debt settlement services by lying to prospective customers about the agency’s ability to help settle their debts, the fees that Mission charged, and its purported affiliation with the federal government. In connection with the scheme, Mission received over $6.6 million in fees. For more than 1,200 of its customers, Mission took fees totaling nearly $2.2 million and has never paid a penny to the customers’ creditors.
KURLYAND served as Mission’s Vice President of Sales from 2009 through 2012. In that capacity, he provided instructions to Mission’s sales representatives, who in turn lied to prospective customers about the agency’s fees to induce them to become customers of Mission. KURLYAND also helped arrange for solicitation letters to be sent on Mission’s behalf to prospective customers that falsely suggested that the agency was acting on behalf of or in connection with a federal governmental program. The letter included an image of the Great Seal of the United States and indicated that it was coming from the “Reduction Plan Administrator” of the purported “Office of Disbursement.”
KURLYAND, 30, of Brooklyn, New York, pled guilty to one count of conspiracy to commit mail and wire fraud, one count of mail fraud, and one count of wire fraud. He faces a maximum sentence of 60 years in prison. KURLYAND is scheduled to be sentenced by Judge Gardephe on December 20, 2013 at 2:30 p.m. As part of his guilty plea, KURLYAND agreed to forfeit $2,196,522 to the United States.
Mission and six individuals – including KURLYAND and Mission’s owner, Michael Levitis – were charged in connection with the scheme. Defendants Felix Lemberskiy and Zakhir Shirinov pled guilty to Informations in April 2013 in connection with this case. The charges against the remaining defendants are merely allegations, and they are all presumed innocent unless and until proven guilty.
Mr. Bharara praised the investigative work of the United State Postal Inspection Service. He also thanked the Consumer Financial Protection Bureau for referring this case to this Office and for their assistance in this matter.
The prosecution of this case is being handled by the Office’s Complex Frauds Unit. Assistant United States Attorneys Nicole W. Friedlander and Edward A. Imperatore are in charge of the prosecution. Assistant United States Attorney Carolina A. Fornos of the Office’s Asset Forfeiture Unit is responsible for the forfeiture aspects of the case.
U.S. v. Mission Settlement Agency, et al. Indictment
Former Member of Liberty City Seven Charged in Federal Court for Drug DistributionRead the Press Release
Fort Myers, Florida - Acting United States Attorney A. Lee Bentley, III announces the arrest of Burson J. Augustin (29, Fort Myers) for distribution of cocaine. If convicted, Augustin faces a maximum penalty of 20 years in federal prison and a fine of up to $1million. Augustin was charged by criminal complaint on August 15, 2013.
According to the complaint, on August 7, 2013, Augustin sold approximately 29 grams of cocaine to a confidential informant working with the Lee County Sheriff’s Office for $1,200. The complaint also states that Augustin was previously arrested as a member of the Liberty City Seven, in 2006, for conspiracy and providing material support to terrorism related to a plot to blow up the Sears Tower in Chicago. For that offense, he was convicted and sentenced to six years in federal prison, followed by ten years of supervised release. At the time of this offense, Augustin was on supervised release. He was released from prison on September 21, 2012. A criminal complaint is merely a formal charge that a defendant has committed a violation of the federal criminal laws, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by the Lee County Sheriff's Office and the Federal Bureau of Investigation. It will be prosecuted by Assistant United States Attorney Jeffrey F. Michelland.
(Download Factual Basis )
Former Lawyer Sentenced to Prison for Obstruction of JusticeRead the Press Release
Albany, New York – David A. Ehrlich, 38, of Cohoes, was sentenced today to be imprisoned for 12 months and 1 day upon his conviction for obstruction of justice, announced United States Attorney Richard S. Hartunian and Special Agent-in-Charge Andrew W. Vale of the Albany Division of the Federal Bureau of Investigation. Ehrlich, a former lawyer, pled guilty in March to obstructing justice in United States v. Joseph P. Brown, a criminal appeal before the United States Court of Appeals for the Second Circuit. Ehrlich admitted that he was paid $7500 to handle the Brown appeal, but prepared and provided to Brown’s wife a brief Ehrlich falsely represented had been filed, and later prepared and provided to Brown’s wife a document, dated May 13, 2008, that Ehrlich falsely represented to be the written decision of the Second Circuit Court of Appeals denying Brown's appeal.
Because no brief was filed, the Court of Appeals dismissed the appeal. When Brown found out he had been denied his right to pursue an appeal by Ehrlich's conduct, Brown prepared and filed motions for relief. There was litigation in both the U.S. District Court for the Northern District of New York and the Court of Appeals, and Brown was permitted to pursue his appeal. On January 12, 2010, the Court of Appeals actually decided Brown’s appeal, ordering a limited remand to the District Court to strike a special condition of Brown's supervised release, but otherwise affirming Brown's sentence. Meanwhile, the Albany Division of the Federal Bureau of Investigation conducted a thorough investigation into what had happened, revealing that Ehrlich had falsified the Court of Appeals decision and resulting in the charges in this case.
Ehrlich was directed to report on October 1st to the facility designated by the Bureau of Prisons to begin serving his term of imprisonment. When that is completed, Ehrlich will be on supervised release for 1 year. The sentence included restitution in the total amount of $8900, which Ehrlich had provided in advance of sentencing (comprised of the $7500 paid by the Browns and $1400 paid by two other clients whose cases were encompassed by Count 2 of the Indictment). In imposing the sentence, Chief U.S. District Judge Gary L. Sharpe cited the need for deterrence and the importance of maintaining public respect for our system of justice.
On April 22, 2010, Ehrlich was disbarred in New York by the Supreme Court, Appellate Division, Third Department, for professional misconduct, including “attempting to mislead and deceive his clients about the status of their cases and falsifying court documents.” Ehrlich also was disbarred by Florida, Massachusetts, and the U.S. Supreme Court.
First Assistant United States Attorney Grant Jaquith prosecuted the federal criminal case, and said: “The proper functioning of the system of laws that is the cornerstone of our democracy depends on the candor and ethics of our lawyers. Every lawyer knows that no case, client, or fee, no advantage in litigation, and no escape from a mistake or predicament justifies compromising your integrity. David Ehrlich’s falsification of a decision of the Court of Appeals victimized his clients and struck at the heart of the process for the fair administration of justice.” United States Attorney Hartunian thanked the Albany Division of the Federal Bureau of Investigation, the Committee on Professional Standards for the Third Judicial Department of the Appellate Division of the Supreme Court for the State of New York, and The Lawyers’ Fund for Client Protection of the State of New York for their vigilance and outstanding work to address Ehrlich’s conduct and restore fairness for his clients.
FBI Albany Special Agent in Charge Andrew W. Vale said "The FBI will continue to work with the United States Attorney's Office and our local partners to bring justice to those who seek to disregard and disrespect the very system to which they are pledged to honor and advance. Today's sentencing demonstrates that such disrespect of the judicial system will not be tolerated."
Former Carteret High School Vice Principal Sentenced to 37 Months in Prison for Possession of Child PornographyRead the Press Release
TRENTON, N.J. - A Rahway, N.J., man who was the vice principal at Carteret High School was sentenced today to 37 months in prison for possessing child pornography, U.S. Attorney Paul J. Fishman announced.
Nicholas Sysock, 54, previously pleaded guilty before U.S. District Judge Mary L. Cooper to an information charging him with one count of possession of child pornography. Judge Cooper imposed the sentence today in Trenton federal court.
According to documents filed in this case and statements made in court:Between May 2008 and March 2011, Sysock purchased from a company in Canada numerous DVDs that contained video recordings of child pornography. During a search of Sysock’s residence in October 2012, federal investigators found these DVDs and also found printed images featuring naked children. Sysock was arrested the same day. At the time of his arrest, Sysock was the vice principal of Carteret High School.
In addition to the prison term, Judge Cooper sentenced Sysock to five years of supervised release, with monitored computer use, mental health treatment and restrictions on contact with children.
U.S. Attorney Fishman praised inspectors with the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates, for the investigation leading to today’s sentence.
The government is represented by Assistant U.S. Attorney David M. Eskew of the U.S. Attorney’s Office General Crimes Unit in Newark.
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Defense counsel: Carol Gillen Esq., Assistant Federal Public Defender, Newark
Florida Woman Found Guilty in Telemarketing ScamRead the Press Release
Jury Deliberates Less Than One Hour Before Returning Verdict
Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today that a jury sitting in Federal District Court in East St. Louis found Kathryn G. Garten, 51, of Orlando, Florida, guilty of conspiracy to commit mail and wire fraud in connection with a nation-wide telemarketing scheme which defrauded persons throughout the United States and Canada, including victims in seven counties in the Southern District of Illinois.
“I believe the swiftness of this verdict was, in part, due to the outrageous and flagrant nature of the scheme Ms. Garten participated in to bilk consumers out of their hard-earned cash.” said United States Attorney Wigginton. “I will continue to prosecute these cases of scammers preying on consumers, and continue to warn consumers that unsolicited offers for items or services which seem too good to be true should be ignored.”
This prosecution, one of many in the Southern District of Illinois, follows an investigation by the Midwest Region Office of the Federal trade Commission and the St. Louis Field Office of the Chicago Division of the United States Postal Service. Essentially, the case involved telemarketers falsely representing to consumers that buyers for the consumers’ time-share properties had been located. The time-share owners were enticed to pay fees to complete the sales, when, in fact, no sale had ever occurred. The case was prosecuted by Assistant United States Attorney Nathan Stump and Special Assistant United States Attorney Theresa Dawson.
Sentencing for Garten was set for November 19, 2013. The Court stated that the trial proved that Garten was a “facile dissembler” and found that she was a danger to the community, thus Garten’s bond was revoked and she was remanded to the custody of the United States Marshal. At sentencing, Garten faces a maximum possible sentence of 25 years in prison, as well as a maximum $250,000.00 fine.
Federal Jury Finds Charlotte Man Guilty of Sex Trafficking of A MinorRead the Press Release
CHARLOTTE, N.C. – A federal jury handed down a guilty verdict late on Wednesday, August 14, 2013, for a Charlotte man charged with sex trafficking of a minor, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Juan Brandon Gray-Sommerville, 23, of Charlotte was charged on April 16, 2013, with one count of knowingly obtaining, harboring, providing and transporting a minor to engage in prostitution.
John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division and Chief Rodney D. Monroe, of the Charlotte-Mecklenburg Police Department (CMPD) join U.S. Attorney Tompkins in making today’s announcement.
According to filed court documents and testimony presented during the two-day trial, the minor female met Gray-Sommerville through social media in early March 2012. Shortly thereafter, the defendant began exchanging text messages with the minor, encouraging her to meet him. According to court records, on March 13, 2012, Gray-Sommerville and his girlfriend travelled to a town outside of Charlotte to pick up the minor in front of her school. According to trial testimony, the three of them drove back to Charlotte and checked into a motel. Trial testimony established that the defendant took pictures of the minor at the motel and created an online advertisement on Backpage.com to recruit clients to engage in sex acts with her. Court records indicate that the defendant drove the minor to have sex for money with two clients. According to court documents and witness testimony, law enforcement located the minor when they responded her 9-1-1 call, after Gray-Sommerville abandoned her fearing police detection. Court records indicate that during the investigation, an FBI computer forensic examiner found on Gray-Sommerville’s computer the picture of the minor the defendant posted on Backpage.com. Investigators also recovered text messages the defendant had exchanged with the minor using his cell phone.
In making today’s announcement U.S. Attorney Tompkins stated, “Gray-Sommerville prayed upon a vulnerable young girl and exploited her in the worst possible way. Sex trafficking is a reprehensible crime that dehumanizes victims and strips them of their dignity. My Office will continue to work closely with our law enforcement partners to identify and prosecute sex traffickers who profit from prostituting minors.”
“The defendant lured a young girl away from her family with promises of money, but instead sold her as a sex slave. It is inconceivable that someone would sexually exploit a child for financial gain, but it does happen and the FBI will aggressively pursue those who victimize our children,” said John A. Strong, Special Agent in Charge of the Charlotte Division of the FBI.
“The verdict sends a loud message that these type of disgraceful offenses against children will not be tolerated in our community. We will continue to work with our federal partners in our efforts to protect children,” said Chief Monroe, Charlotte Mecklenburg Police Department.
Gray-Sommerville has been in local federal custody since April 2013. At sentencing, he faces a mandatory minimum term of 10 years and a maximum of life in prison and a $250,000 fine. A sentencing date has not been set yet.
The investigation of the case was handled by the FBI assisted by CMPD. The prosecution of the case is handled by Assistant U.S. Attorney Kimlani Ford, of the U.S. Attorney’s office in Charlotte.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Federal Jury Convicts Block Burners of Drug Trafficking, Robbery and MurderRead the Press Release
GRAND RAPIDS, MICHIGAN – Four Lansing men were convicted of drug trafficking, armed robbery and first degree murder in U.S. District court in Grand Rapids late Wednesday afternoon, announced U.S. Attorney Patrick A. Miles, Jr. The men—Charles Kunta Lewis, age 36, Wallee Abdullazeem Al-Din, age 24, his brother, Mustafa Al-Din, age 25, and Ralphael Crenshaw, age 24, were tried by a jury before U.S. District Judge Robert J. Jonker. After a two-week trial, the jury convicted the defendants of conspiring to commit drug trafficking crimes and robbery, and using a firearm during and in relation to a drug trafficking crime resulting in murder. The four defendants were found guilty of abducting and murdering Lansing resident Shayla Johnson, age 19, in an effort to obtain drugs. This charge carries a maximum term of life in prison.
Evidence at trial established that the defendants were members and associates of a violent Lansing street gang known as the Block Burners. The prosecution’s evidence demonstrated that during one six-week span in the summer of 2010, the defendants were involved in a violent pattern of robbing and at times beating victims for drugs, money and other valuable items. Their violent conduct culminated in the kidnaping and first degree murder of Shayla Johnson. The defendants wrongly believed Shayla Johnson had access to a large amount of marijuana plants. The defendants planned to kidnap her in order to compel her to disclose the location of the marijuana plants. Acting on their plan the defendants entered her home, forced her from her bedroom, and brutally shoved her into the trunk of a vehicle. When Ms. Johnson fought back, she was fatally shot multiple times with an assault rifle.
In the fall of 2010, the Ingham County Prosecutors Office sought the assistance of the U.S. Attorney’s Office in the prosecution of the matter because of serious concerns over allegations of obstruction and intimidation by gang members. The decision was made to transfer the case to federal court for prosecution. The case was investigated by the Lansing Police Department, the Meridian Township Police Department and the Bureau of Alcohol, Tobacco and Firearms.
This case was prosecuted by Assistant U.S. Attorneys Timothy P. VerHey and Brian K. Delaney. No sentencing date has yet been announced.
END
Federal Indictment Charges 18 Defendants in Eastern Oregon Cockfighting RingRead the Press Release
PORTLAND, Ore. – A federal grand jury has indicted 18 defendants on various charges in connection with a cockfighting operation in Irrigon, Morrow County, Oregon, involving ten “derbies” occurring from April 1, 2012, through May 19, 2013.
Arrests on the charges occurred today at various sites in Oregon and Washington. Those arrested in Oregon are scheduled to appear for arraignment before a federal magistrate judge in Portland on Friday, August 16, 2013, at 1:30 p.m. Those arrested in Washington will appear for arraignment before a federal magistrate judge in Yakima, Washington.
Six individuals are charged with operating an illegal gambling business:
- John Wesley Walker, 67, of Irrigon;
- Irina Walker (aka Irina Kreuger), 60, of Irrigon;
- Mario Perez (aka El Cuba), 62, of Hermiston, Oregon;
- David Sanchez, 29, of Irrigon;
- Jose Luis Virgen Ramirez, 48, of Hermiston; and
- Aurelia Garcia Mendoza, 33, of Irrigon.
These six persons are also charged, along with 12 others, with conspiracy to violate the Animal Welfare Act by conducting unlawful animal fighting ventures on ten occasions. The additional defendants are:
- Apolinar Munoz Gutierrez (aka Polo), 37, of Irrigon;
- Cecilio Mendoza Magana, 63, of Kennewick, Washington;
- Mauro Gonzalez Pulido (aka Cala), 47, of Zillah, Washington;
- Ruben Saltos Godina (aka Chino), 42, of Moxee, Washington;
- Arturo Olmedo Silva (aka El Havolin, Cepillo), 45, of Hermiston;
- Eduardo Cisneros (aka Mariachi), 27, of Sunnyside, Washington;
- Eulalio Delamora Anguiano (aka Lalo), 44 of Moxee, Washington;
- Francisco Javier Vega (aka Sergio Gonzalez Manzano), 39, of Plymouth, Washington;
- Oscar Acosta Navarrete, 46, of Prosser, Washington;
- Antonio Dominguez Robles (aka Tono, Memo), 37, of Pasco, Washington;
- Gerardo Gomez Castillo (aka Aguilo), 54, of Wapato, Washington; and
- Valente Piedra Magana, 38, of Union Gap, Washington.
“Cockfighting is illegal under federal law and under the laws of all 50 states,” Amanda Marshall, United States Attorney for the District of Oregon, stated. “Besides being a barbaric practice, cockfighting jeopardizes public health and safety and facilitates the commission of other criminal acts,” she added.
Each of the charged offenses – illegal gambling (one count), unlawful animal fighting venture (ten counts), and conspiracy (one count) – carries a maximum sentence of five years in prison and a fine of $250,000. The indictment also alleges that, upon conviction of illegal gambling, defendants John Wesley Walker and Irina Walker are subject to the forfeiture of their real property and buildings used in the gambling business, located on Depot Lane in Irrigon, Morrow County, Oregon.
A copy of the 12-count indictment is attached. An indictment is a charging instrument only, and all defendants are presumed innocent unless and until found guilty beyond a reasonable doubt.
The case was investigated by the Office of Inspector General, U.S. Department of Agriculture, with assistance from the Drug Enforcement Administration, the Oregon State Police, the Washington State Gaming Commission, and the Blue Mountain (Oregon) Narcotics Team. The case is being prosecuted in Oregon by Assistant U. S. Attorney Stephen F. Peifer.
For more information, please see the attached Indictment Here
Federal Grand Jury in Fort Wayne Returns IndictmentsRead the Press Release
FOR IMMEDIATE RELEASECONTACT: Mary Hatton
www.usdoj.gov/usao/inn/ CELL: (219) 314-9993
FortWayne,Indiana - TheUnited States Attorney's Office announced that a Grand Jury sitting in Fort Wayne, Indiana, returned the following Indictments on June 26, 2013:
Phillip Biddle, 36, of Kendallville, Indiana, is charged in a single count Indictment with knowingly possessing visual depictions of minor(s) engaged in sexually explicit conduct on or aboutJune15,2012.TheIndictmentalsoseekstheforfeitureofacomputerandaharddrive. Thischargewasfiledasaresultof aninvestigationbytheInternetCrimesAgainstChildren (ICAC)TaskForce.Thiscasehasbeenassigned toandwillbeprosecutedbyAssistantUnited States Attorney Lesley J. Miller Lowery.
Keith Kinney, 51, of Fort Wayne, Indiana, is charged in a single countIndictmentwith knowingly possessing visual depictions of minor(s) engaged in sexually explicit conduct on or aboutJuly11,2012.TheIndictmentalsoseekstheforfeitureofacomputerandaharddrive. Thischargewasfiledasaresultof aninvestigationbytheInternetCrimesAgainstChildren (ICAC)TaskForce.Thiscasehasbeenassigned toandwillbeprosecutedbyAssistantUnited States Attorney Lesley J. Miller Lowery.
TheUnitedStatesAttorney'sOfficeemphasizedthatanIndictmentismerelyanallegation and that all persons charged are presumed innocent until and unless proven guilty in court.
If convicted in court, any specific sentence to be imposed willbedetermined by the judge after a consideration of federal sentencing statutes and the Federal Sentencing Guidelines.
Federal Escapee Allegedly Involved InRead the Press Release
The Robbery Of Dunmore Bank Charged
The United States Attorney’s Office for the Middle District of Pennsylvania announced the filing of a criminal Information in U.S. District Court in Scranton Wednesday charging Romeal Price, age 36, of Brooklyn, New York, with escape and bank robbery.
According to United States Attorney Peter J. Smith, the Information charges that while completing his remaining few months of a 15-year federal prison sentence from 2001, Price escaped from the Catholic Social Services Residential Reentry Center on June 18, 2013. It is alleged that following his escape, Price robbed the Pennstar Bank, 1230 O’Neill Highway, Dunmore, Pennsylvania, of approximately $11,000 on June 28, 2013. Following the robbery, Price fled to New York City. On July 17, 2013, deputies of the United States Marshals Service arrested Price in a New York City apartment without incident.
The case was investigated by the United States Marshals Service, the Federal Bureau of Investigation, and the Dunmore Police Department. The case is being prosecuted by Assistant U.S. Attorney John Gurganus.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilty is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
In this case, the maximum penalty under the federal statute is 25 years’ imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
Facebook Predator Sentenced to 15 YearsRead the Press Release
A 33-year-old New Baltimore man was sentenced on Wednesday to 15 years in federal prison for producing child pornography by using Facebook to entice boys to send him nude pictures of themselves, U.S. Attorney Barbara L. McQuade announced today.
Joining McQuade in the announcement was FBI Special Agent in Charge Robert D. Foley, III.
On August 17, 2012, Gregory Austin, age 33, of New Baltimore, Michigan, was charged with three counts of production of child pornography for manipulating young boys, through Facebook, to create pornographic pictures of themselves.
In March of 2012, Austin was arrested by the Roseville Police Department, in the parking lot an elementary school, for illegally purchasing Vicodin. The arrest led to an investigation that discovered images of child pornography on Austin’s cellular phone. Further investigation revealed that Austin created an on-line persona, through Facebook, of a young woman named “Julie”. Through “Julie” and her Facebook page, Austin convinced numerous minor boys, including former students, to photograph their genital and pubic area and send him the images. In total, 133 images, depicting mostly young boys in various states of dress and undress, were found on Austin’s phone and computer.
Yesterday, United States District Judge Arthur J. Tarnow sentenced Austin to 15 years in federal prison for his crimes. In making his decision, Judge Tarnow cited that Austin had committed a serious crime that required a severe punishment. Austin was also placed on five years of supervised release.
According to McQuade, "Parents and teens should be aware that predators use social media to manipulate victims. This defendant tricked young boys into sending him nude pictures of themselves. You need to be careful when communicating online because you never know who really is on the other end of a digital message."
The Roseville Police Department along with the Federal Bureau of Investigation’s Southeast Michigan Crimes Against Children Task Force participated in the investigation and prosecution of this case. This case was brought as part of the U.S. Attorney’s Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation through the Internet.
East Texas Women Sentenced for Trafficking MethamphetamineRead the Press Release
Department of Justice
Office of Public AffairsTYLER, Texas – Two East Texas women were sentenced to federal prison today for drug trafficking violations in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
Stacie Serenko, 29, of Tyler, Texas pleaded guilty on Feb. 7, 2013 to possession with intent to distribute methamphetamine and was sentenced to 70 months in federal prison today by U.S. District Judge Leonard E. Davis.
Jennifer Northcutt, 42, of Mineola, Texas, pleaded guilty on Feb. 5, 2013, to possession with intent to distribute methamphetamine and was sentenced to 60 months in federal prison today by Judge Davis.
According to information presented in court, on Aug. 21, 2010, Serenko and Northcutt both found in possession of methamphetamine which they intended to distribute to others. Serenko admitted to being in possession of more than 5 grams of methamphetamine. Northcutt admitted to possessing at least 17 grams of methamphetamine and a firearm.
Another defendant, Billie Earl Johnson, is set for trial on Oct. 8, 2013.
This case is being investigated by the U.S. Drug enforcement Administration and the Mineola Police Department and prosecuted by Assistant U.S. Attorney Bill Baldwin.
Eagle Butte Man Sentenced for Simple AssaultRead the Press Release
United States Attorney Brendan V. Johnson announced that John Maynard, a 51-year-old non-Indian man from Eagle Butte, South Dakota, pled guilty to Simple Assault and was sentenced on August 13, 2013, by U.S. Magistrate Judge Mark A. Moreno.
Maynard was sentenced to 6 months in custody and a $10 assessment to the Federal Crime Victims Fund.
The conviction relates to a July 2013 incident in which Maynard committed a simple assault upon a Native American woman by hitting her with a closed fist at her residence in Eagle Butte.
The investigation was conducted by the Cheyenne River Sioux Tribe Law Enforcement Division and the Ziebach County Sheriff’s Office. Assistant U.S. Attorney Mikal Hanson prosecuted the case.
Maynard was remanded to the custody of the U.S. Marshals Service to begin serving his sentence.Eagle Butte Man Sentenced for Assaulting A Man in A BarRead the Press Release
United States Attorney Brendan V. Johnson announced that Bevan Ray Bordeaux, a 26-year-old man from Eagle Butte, South Dakota, pled guilty to two charges of Assault by Striking, Beating and Wounding and was sentenced on August 12, 2013, by U.S. Magistrate Judge Mark A. Moreno.
Bordeaux was sentenced to one year of custody, $79.20 in restitution, and a $20 assessment to the Federal Crime Victims Fund.
The conviction arose from an incident on December 28, 2012, when the Defendant’s wife got into a verbal argument with the victim at an Eagle Butte bar. The Defendant then approached the victim and joined in the argument, which escalated and resulted in Bordeaux striking the victim and knocking him to the floor. Following the initial assault, Bordeaux unlawfully struck the victim a second time when he was on the floor of the bar.
The investigation was conducted by the Cheyenne River Sioux Tribe Law Enforcement Division. Assistant U.S. Attorney Mikal Hanson prosecuted the case.
Bordeaux was remanded to the custody of the U.S. Marshals Service to begin serving his sentence.Doctor Brothers Jose and Carlos Lopez Diaz Sentenced for Health Care FraudRead the Press Release
SAN JUAN, P.R. – Yesterday and today, doctor brothers José and Carlos López-Díaz were sentenced to 121 months and 36 months and one day of imprisonment respectively, and three years of supervised release for their participation in a conspiracy to commit health care fraud, announced United States Attorney for the District of Puerto Rico, Rosa Emilia Rodríguez-Vélez. U.S. District Court Judge Francisco A. Besosa imposed the sentences and ordered José López-Díaz to be committed immediately to the Metropolitan Detention Center while Carlos López-Díaz was allowed to voluntary surrender upon designation by the Bureau of Prisons.
Doctor José López-Díaz and his brother Doctor Carlos López-Díaz were arrested on September 1, 2011, after a Federal grand jury returned 20-count indictment for conspiracy to commit health care fraud and a forfeiture allegation of $727,729.16. The investigation was lead by the Department of Health and Human Services, Office of the Inspector General (HHS-OIG), with the collaboration of the United States Secret Service (USSS). They were found guilty by a jury of their peers on June 13, 2012.
According to the indictment, José Lopez-Díaz a general practitioner licensed to practice medicine in Puerto Rico, was billing for Medicare services not rendered. The services billed and not rendered included: billing Medicare for 10,231 claims for medical treatment allegedly provided to Medicare patients at Guaynabo Medical Mall’s Emergency Room, even though he had never worked at such institution and never saw the patients; billing of Medicare code 53085, known as “Drainage Perineal Urinary Extravasation”, a procedure which was allegedly performed by José López-Díaz on female patients, when this procedure can only be performed on male patients. José Lopez-Díaz never provided medical treatment to the Medicare beneficiaries whose identities he used in order to bill Medicare.
Over the period of time referred to in the Indictment, José Lopez-Díaz fraudulently billed Medicare for $3,591,298.90 and received the amount of $727,729.16 in Medicare reimbursements. He was also ordered to pay the amount of $1,028,691.55 in restitution and a Special Monetary Assessment of $3,400.
Doctor Carlos López-Díaz is a licensed dentist in Puerto Rico and the brother of José Lopez-Díaz. Over the course of the health care fraud scheme, Carlos López-Díaz conspired with his brother to defraud Medicare and provided him with names and Medicare beneficiary numbers of patients treated by Carlos López-Díaz at his dental clinic in order for his brother to bill Medicare for services not rendered to those patients.
“We are pleased with the sentences of these two defendants,” said United States Attorney, Rosa Emilia Rodríguez-Vélez. “These demonstrate that we will not tolerate criminals who engage in fraudulent schemes which deplete the Medicare program of funds which are destined for our elderly population in order to enrich themselves. “May these sentences serve as an example for the medical community in Puerto Rico of what could be the consequences they can face if they defraud the Medicare program.”“We are proud to be a part of the federal team that brought these defendants to justice for defrauding the Medicare program and exploiting the elderly,” said Thomas O’Donnell, Special Agent in Charge of the Office of Inspector General’s New York Regional Office which also covers Puerto Rico. “Arresting owners and providers, freezing their assets and prosecuting them to the fullest extent possible, are some of the tools that the federal government has available, and will be utilized to remove these individuals from participating in the Medicare program.”
HHS-OIG, USSS and the FBI, the investigative agencies received substantial collaboration from the Special Investigative & Compliance Units from Medical Card System Inc., Triple-S Salud, Medicare y Mucho Màs and Preferred Medicare Choice.
The case was prosecuted by Assistant U.S. Attorney Ernesto López-Soltero and Special Assistant U.S. Attorney Wallace A. Bustelo.
Department of Justice Reaches Agreement to Improve Conditions at St. Tammany Parish Jail in LouisianaRead the Press Release
The Justice Department announced today that it has entered into a comprehensive agreement with the Parish of St. Tammany, La., and the St. Tammany Parish Sheriff to correct conditions of confinement at the St. Tammany Parish Jail and to ensure that improvements made since the Department’s investigation will be maintained. The St. Tammany Parish Jail is located in Covington, La., and houses approximately 1,000 adult male and female prisoners. The jail is staffed by approximately 225 sworn law enforcement officers and civilian employees.
The agreement outlines significant remedial measures to address deficiencies in correctional mental health care and suicide prevention. Under the terms of the agreement, St. Tammany will work to ensure that prisoners are safe and receive care and services necessary to meet their constitutional rights. The agreement underscores the Parish’s obligation to protect prisoners the substantial risk of serious harm.
“We commend Sheriff Jack Strain, St. Tammany Parish President Patricia Brister, and other St. Tammany officials for their willingness to work aggressively to address the problems identified during the course of our investigation,” said Jocelyn Samuels, Acting Assistant Attorney General, Civil Rights Division. “Based on the productive relationship we have established to date, we expect to continue to work cooperatively with St. Tammany to improve conditions of confinement at this facility.”
In April 2011, the Justice Department initiated its investigation of the St. Tammany Jail under the Civil Rights of Institutionalized Persons Act (CRIPA). The Department issued its findings in July 2012, concluding that certain conditions at St. Tammany violated prisoners’ constitutional rights to adequate mental health care, including adequate suicide prevention.
Today’s agreement comprehensively addresses the department's findings through an in-depth focus on the systemic problems that caused the unconstitutional conditions at the jail. The agreement also builds on improvements made by St. Tammany during the department’s investigation, most notably the removal of small booking cages that had been used for the confinement of suicidal prisoners and the construction of a specialized housing unit to manage and monitor prisoners in mental health crisis. The agreement requires:
- Improved screening and assessments of prisoners with serious mental health needs.
- Adequate and timely mental health treatment for prisoners, including group or individual therapy services, better monitoring when medication is administered to prisoners and follow-up and crisis services.
- Improved suicide precautions.
- Enhanced staff training on mental health and suicide prevention.
- The collection and tracking of data to identify triggers and trends involving suicide and self-injurious behavior, with the goal of preventing or reducing further incidents.
- The appointment of an independent auditor, jointly selected by St. Tammany and the department, with expertise in the areas covered by this agreement. As part of overseeing the implementation of the agreement, the independent auditor will periodically inspect the facility for compliance and provide technical assistance to St. Tammany staff.
CRIPA authorizes the Attorney General to investigate conditions of confinement in certain institutions owned or operated by, or on behalf of, state and local governments. In addition to adult and juvenile correctional facilities, these institutions include psychiatric hospitals, nursing homes and residential facilities serving persons with developmental disabilities. CRIPA’s focus is on systemic deficiencies rather than individual, isolated problems. Please visit http://www.justice.gov/crt to learn more about CRIPA and other laws enforced by the Justice Department’s Civil Rights Division
The investigation of the St. Tammany Parish Jail was conducted by Corey M. Sanders, Trial Attorney in the Special Litigation Section of the Civil Rights Division.
Related Material:
Findings Letter: http://www.justice.gov/crt/about/spl/documents/tammany_findings_7-12-12.pdf
Defendant Sentenced for Receipt of Child PornographyRead the Press Release
Michael J. Moore, United States Attorney for the Middle District of Georgia, announced that
Josh Ensley, age 52, of Tucker, Georgia, was sentenced today by the Honorable Charles A. Pannell, Jr., United States District Judge, in Atlanta, Georgia, for receipt of child pornography. Judge Pannell sentenced Mr. Ensley to 180 months imprisonment, to be followed by supervised release for life, and mandatory registration as a sex offender.Mr. Ensley entered a plea of guilty on May 16, 2013 to Count One of an Indictment charging him with Receipt of Child Pornography. In entering a plea of guilty, Mr. Ensley admitted that between September 18, 2008, and March 20, 2011, he ordered and received DVDs containing visual depictions of minors engaged in sexually explicit conduct which had been shipped to him in interstate commerce. He also admitted that on October 25, 2012, he possessed additional material on his computer which contained visual depictions of minors engaged in sexually explicit conduct which had been obtained by him over the internet. Some of the visual depictions possessed by Mr. Ensley depicted minors who were younger than twelve (12) years old. Mr. Ensley was an employee of a school in Dekalb County, Georgia, which had students under the age of eighteen (18) years, and he further acknowledged that on October 25, 2012, he possessed videos that he had produced which depicted minor students of the school using the restroom. He admitted surreptitiously placing video cameras in the boys’ and girls’ restrooms at the school and videotaping students’ genitals without their knowledge or consent.
“Our child pornography laws are on the books to protect our children from people like Mr. Ensley. Every time he viewed one of his DVDs containing child pornography, he re-victimized these children. This case reminds us that we, as parents and educators and anyone else caring for children, must be mindful of those who prey on them,” said U.S. Attorney Michael Moore.The case was investigated by the United States Postal Inspection Service, Atlanta Division, and prosecuted by Assistant United States Attorneys Paul C. McCommon III and Robert D. McCullers.
Inquiries regarding the case should be directed to Sue McKinney, Public Affairs Specialist, United States Attorney's Office at (478) 621-2602.
David H. Brooks, Founder and Former Chief Executive Officer of DHB Industries, Inc., Sentenced to 17 Years in Prison for Insider Trading, Fraud, Lying to Auditors and Obstruction of JusticeRead the Press Release
Earlier today, in Central Islip, New York, the former Chief Executive Officer of a Long Island-based supplier of body armor to the U.S. military and law enforcement agencies was sentenced to 17 years in prison for his leadership role in a $200 million fraud and obstruction of justice case, to be followed by five years of supervised release. DHB Industries, Inc. founder David H. Brooks, who was convicted in September 2010 on 14 counts of conspiracy, mail and wire fraud, securities fraud, obstruction of justice, and lying to auditors and subsequently pleaded guilty to conspiracy to defraud the IRS and filing false income tax returns, was also ordered to pay a fine of $8.7 million, and to forfeit approximately $65 million in illegally-gained profits to the United States. The court will determine the amount Brooks must pay in restitution to the victims of his fraud scheme within 90 days. The sentence was imposed by United States District Judge Joanna Seybert.
The sentence was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI); and Richard Weber, Chief, Criminal Investigation, Internal Revenue Service (IRS).
“DHB Industries made body armor that protected the men and women of the U.S. military, who risk their lives to keep us safe. To David Brooks, it was merely a vehicle for plunder and a means to feed his own greed. Brooks fancied himself a master of the sport of kings. In reality, he was a selfish man who looted his company, defrauded his investors, lied to the SEC and the investing public, and sought to profit through insider trading right before the collapse of his house of cards. And he demonstrated time and time again that he believes he is above the law. Today, David Brooks learned otherwise,” stated United States Attorney Lynch. “Thanks to the hard work and dedication of law enforcement, the investing public can rest easier knowing that for the next 17 years, Brooks will not be able to lie, cheat and steal from anyone else.” Ms. Lynch thanked the FBI and IRS for leading the investigation and the Defense Criminal Investigative Service for its assistance in the case.
FBI Assistant Director-in-Charge Venizelos stated, “David Brooks repeatedly stole from his company, stole from investors, lied to auditors and regulators, and traded on inside information. He did all this to finance an obscenely lavish lifestyle paid for by his victims. Today’s sentencing is the justice the government has been seeking.”
“Tax fraud was integral to sustaining Brooks’s securities fraud schemes and fueling his lust for money,” stated IRS Chief, Criminal Investigation Weber. “Brooks falsified his income tax returns in order to prevent law enforcement from discovering that he was looting DHB. IRS-CI will turn over every stone to find where criminals are hiding and spending their illegal proceeds. This case should send a message to those who feel that they can commit fraud and evade taxes -- their consuming greed will always leave a money trail.”
During an eight-month trial, the government’s evidence proved that Brooks and others conspired to loot DHB for personal gain. Brooks concealed his control of a related company in order to funnel more than ten million dollars from DHB to support a thoroughbred horse-racing business. Brooks also falsely inflated inventory at a DHB subsidiary to artificially boost reported profits, and then lied to auditors in an effort to cover up the schemes.
Although Brooks was initially released on bail conditions requiring that he account for and repatriate all foreign assets, he was re-arrested and bail was revoked in January 2010 after the government discovered that Brooks had concealed millions of dollars in accounts in the tax haven principality of San Marino as well as in London, England. He has remained in custody ever since. During his trial, Brooks smuggled prescription pills into the courtroom, created a fake e-mail that his attorney tried to use to cross examine a government witness, and then disobeyed a court order to produce evidence of the email’s authenticity prompting the court to hold him in contempt.
Unauthorized and Undisclosed Compensation
Brooks stole more than $6 million from DHB’s coffers to finance a horse-racing business that had no relationship to DHB’s business and to finance a lavish lifestyle that included corporate-paid trips to exotic locations, the purchase of a luxury car and an armor-plated vehicle, personal jewelry, plastic surgery for his wife, a burial plot for his mother, a plasma television for his son’s bedroom, country club bills, $40,000 leather bound invitations for his son’s Bar Mitzvah and a $101,000 belt buckle encrusted with diamonds, sapphires and rubies. To cover up his theft, Brooks created, and directed others to create, fictitious documents and misclassified these personal expenses as business expenses on DHB’s books and records. In yet another scheme, Brooks scalped tickets to sporting events and concerts that DHB paid for and then kept more than $300,000 that he generated from selling the company’s tickets.
The Related Party Scheme
Brooks also concealed the related party status of Tactical Armor Products (TAP), a company supposedly run independently of DHB by Brooks’ wife, but in fact wholly controlled by Brooks. Through this scheme, Brooks siphoned more than $10 million out of DHB to pay for obsolete body armor plates sold by TAP. The profits from these concealed related party transactions were used to pay for more than $16 million in Brooks’s personal horse racing business, jewelry and cash investments. To conceal the scheme and deceive auditors and investors, Brooks created fraudulent multi-million dollar transactions and doctored internal DHB documents.
The Accounting Frauds
Brooks also engaged in accounting fraud schemes designed to increase the net income and profits that DHB reported in its press releases and filings with the Securities and Exchange Commission (SEC) by falsely inflating the value of DHB’s existing inventory, adding non-existent inventory to the company’s books and records, and fraudulently reclassifying expenses.
Lying to Auditors and Obstruction of Justice
Brooks attempted to cover up several of the schemes by obstructing the SEC’s investigation. Brooks and others submitted false reports to the SEC during an investigation of DHB’s executive compensation and related party schemes that began in March 2003; Brooks lied to DHB’s independent auditors about the inventory inflation fraud; and when auditors tried to look at the phony inventory, Brooks falsely claimed that it had been destroyed in a hurricane. Brooks later admitted that the supposed inventory never actually existed.
Insider Trading
In November 2004, several days after DHB filed a financial report with the SEC and sent shareholders a statement containing many of the same misrepresentations and omissions described above, Brooks sold more than $69 million of DHB stock. In December 2004, he sold an additional $116 million in stock knowing that that DHB’s stock price of $20 per share had been artificially-inflated through his many and varied schemes. After those insider sales, DHB stock plummeted to pennies per share and the company was de-listed from the American Stock Exchange.
The government’s case was prosecuted by Assistant United States Attorneys Richard Lunger, Christopher Ott, Christopher Caffarone, James Knapp, Kathleen Nandan, Laura Mantell, Bonni Perlin and Mary Dickman.
This prosecution was the result of efforts by President Barack Obama’s Financial Fraud Enforcement Task Force (FFETF), which was created in November 2009 to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ Offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions, and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants. For more information on the task force, visit http://www.StopFraud.gov.
The Defendant: DAVID H. BROOKS
Age: 58
Old Westbury, New YorkCommercial Fisherman Indicted for Alteration of Objects to Obstruct a Federal Investigation and Making False StatementsRead the Press Release
TPANAMA CITY, FLORIDA– Thomas Zachary Breeding, 29, of Panama City, Florida, has been charged by a federal grand jury with the alteration or falsification of an object to obstruct a federal investigation and two counts of making false statements to agents of the National Oceanic and Atmospheric Administration, announced United States Attorney Pamela C. Marsh, Northern District of Florida.
The indictment alleges that, on or about January 18, 2012, Breeding knowingly altered the GPS device on his fishing vessel to impede, obstruct, and influence an investigation conducted by the NOAA into his activities in The Edges Closed Area. The Edges is an area of the Gulf of Mexico closed annually to commercial and recreational fishing from January 1 to April 30 to protect the spawning season for gag grouper. Gag grouper, like other shallow and deep water groupers, red snapper and tilefish are extremely valuable and economically important species to both commercial and recreational fishermen and are managed under the Gulf of Mexico Individual Fishing Quota program.
The indictment further alleges Breeding made two false statements to NOAA. On or about January 18, 2012, Breeding is alleged to have falsely told NOAA that he was fishing in The Edges Closed Area by accident because the GPS device and plotter on his fishing vessel were inaccurate, when he knew that he intended to fish in The Edges Closed Area. Then, on or about April 4, 2012, Breeding is alleged to have falsely told NOAA that he did not alter the GPS device on his fishing vessel to cover up his intentional entry into The Edges Closed Area, when defendant’s purpose in altering the GPS and plotter on his fishing vessel was to conceal his intentional entry into The Edges Closed Area to fish.
Count One of the indictment charges Breeding with the alteration or falsification of an object to obstruct a federal investigation. If convicted on this count, Breeding faces a term of imprisonment of not more than twenty (20) years, a period of supervised release of up to five (5) years, a fine of up to $250,000, and a $100 special monetary assessment. Counts Two and Three of the indictment charge Breeding with making false statements. If convicted on these counts, Breeding faces a term of imprisonment of not more than five (5) years imprisonment, a fine of up to $250,000, a period of supervised release of up to three (3) years, and a $100 special monetary assessment on each count.
Breeding appeared today for his initial appearance and arraignment at the United States District Court in Panama City, Florida. Breeding pled not guilty to the charges and his trial was scheduled for October 21, 2013 before United States District Judge Richard Smoak.
The indictment results from an investigation by agents of NOAA, and is being prosecuted by Assistant U.S. Attorney Gayle Littleton.
An indictment is merely an allegation by a grand jury that a defendant has committed a violation of federal criminal law and is not evidence of guilt. All defendants are presumed innocent and entitled to a fair trial, during which it will be the government’s burden to prove guilt beyond a reasonable doubt at trial in a court of law.