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Wednesday 26 June 2013
Maplewood Man Sentenced for Placing Craigslist Ad to Kill Maplewood Police OfficersRead the Press Release
St. Louis, MO - William Lawrence was sentenced to 72 months in prison for placing a $1 million bounty on Craigslist for the death of any Maplewood Police officer.
According to court documents, on February 6, 2012, Maplewood Police Department officers responded a neighborhood disturbance. During the course of the investigation, officers determined that one of the parties to the disturbance, William Lawrence, was the subject of an outstanding warrant. Lawrence was arrested on the outstanding warrant, and because he was combative during the course of the arrest, officers conducted a protective sweep of the apartment. The search revealed materials and paraphernalia consistent with a marijuana cultivation operation, a shotgun with no serial number and a .22 caliber rifle. These firearms were seized and Lawrence was transported to jail.
On several occasions following his release from custody, Lawrence contacted the Maplewood Police Department by telephone and in person to demanded the return of his firearms. On each occasion, he was advised that the guns were being retained as evidence and would not be returned. On March 1, 2012, Maplewood Police received a telephone call from an officer with a neighboring police department who advised that he had located an advertisement on craigslist.com that purported to offer money in exchange for the murder of Maplewood police officers. Charter Communications Law Enforcement Response Team later confirmed that the IP address from which the threatening advertisement had been placed was associated with William Lawrence.
WILLIAM LAWRENCE previously pled guilty to using the internet in furtherance of murder for hire. He appeared today for sentencing before United States District Judge Carol E. Jackson.
This case was investigated by the Maplewood Police Department.
Man Sentenced to Prison for Distributing Child PornographyRead the Press Release
PHOENIX, Ariz. – On June 24, 2013, Lee David Shropshire, 35, of Mesa, Arizona, who pleaded guilty on March 20, 2013, to one count of Distribution of Child Pornography, was sentenced by U.S. District Judge G. Murray Snowto 170 months in prison, followed by a lifetime term of supervised release. He is also required to register as a sex offender in compliance with federal, state and local laws.
In January 2010, the Immigration and Customs Enforcement Cyber Crimes Center received information from the Australian Federal Police that an individual residing in Arizona was distributing child pornography via a Peer to Peer website. Through their investigation agents identified the individual as Lee David Shropshire. In September 2010, agents conducted an interview with Shropshire during which he admitted to having images of child pornography on his computer and distributing these images on the Peer to Peer website. In total, Special Agents found over 10,000 images and approximately 636 video files containing child pornography.
The prosecution was handled by Melissa Karlen, Assistant U.S. Attorney, District of Arizona, Phoenix.
CASE NUMBER: CR-12-0838-PHX-GMS
RELEASE NUMBER: 2013-048_ShropshireFor more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
Man Charged with Theft of Government BenefitsRead the Press Release
Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, announced today that a federal grand jury returned an indictment charging Ronald Newnham, age 68, of Canton, with theft of government benefits.
The indictment charges that between on or about November 27, 2004, and on or about July 26, 2011, Newnham wilfully and knowingly stole and converted to his own use, death pension benefits issued by the Department of Veterans Affairs. Newnham caused the funds to be transferred from the beneficiary’s account to his bank account for his own personal benefit.
If convicted, the defendant’s sentence will be determined by the court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violation. In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
This case is being prosecuted by Assistant United States Attorney M. Kendra Klump, following an investigation by the Cleveland Resident Agency of the Department of Veterans Affairs Office of Inspector General.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Long Island Resident Pleads Guilty to Attempting to Provide Material Support to Al-Qaeda AffiliateRead the Press Release
A complaint and information were unsealed in federal court yesterday afternoon charging Justin Kaliebe, an American citizen and resident of Babylon and Bay Shore, New York, with attempting to travel to Yemen in order to join the foreign terrorist organization, al-Qaeda in the Arabian Peninsula (“AQAP”), also known as Ansar al-Sharia (“AAS”). On February 8, 2013, Kaliebe pled guilty before United States Magistrate Judge A. Kathleen Tomlinson to both counts of the information, charging him with attempting to provide material support to terrorists, in violation of 18 U.S.C. § 2339A(a), and attempting to provide material support to a designated foreign terrorist organization, AQAP/AAS, in violation of 18 U.S.C. § 2339B(a)(1). Thereafter, on March 5, 2013, United States District Judge Arthur D. Spatt reviewed and accepted Kaliebe’s guilty plea. A status conference is scheduled for June 26, 2013 at 3:00 p.m. at the United States Courthouse in Central Islip, New York, when Judge Spatt is expected to set a sentencing date. Kaliebe faces a maximum sentence of 30 years in prison when he is sentenced by Judge Spatt.
The charges were 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 (FBI), New York Field Office; and Raymond W. Kelly, Commissioner, New York City Police Department (NYPD).
According to the court filings, Kaliebe attempted to travel from the United States to Yemen for the purpose of joining AQAP/AAS and waging violent “jihad.” During numerous meetings and recorded conversations and email correspondence with undercover law enforcement officers, Kaliebe explained that he had been searching for an opportunity to travel abroad and fight jihad for two years – long before Kaliebe first approached the undercover officers about his plans to join a terrorist group. Kaliebe repeatedly expressed his desire to travel to Yemen in order to join AQAP/AAS and to help carry out its violent extremist agenda. Kaliebe also demonstrated extensive knowledge of terrorist organizations, including AQAP/AAS and al-Qaeda, and current and former leaders of those terrorist organizations. For example, Kaliebe referenced, and at times quoted, Anwar al-Awlaki, a member and leader of AQAP, as well as Omar Abdel Rahman (the “Blind Sheik”), Ayman al-Zawahiri (the current leader of al-Qaeda), and Usama Bin Laden. Further, Kaliebe demonstrated detailed knowledge of various terrorist attacks that were carried out by AQAP/AAS in Yemen, as well as other attacks carried out by al-Qaeda around the world.
According to the court filings, during a recorded conversation that took place on June 4, 2012, Kaliebe observed that “the crime that they would charge people like us with” was conspiracy “to kill, maim and kidnap in foreign countries,” a reference to a federal criminal statute that has previously been used to charge other individuals who departed or attempted to depart the United States in order to fight jihad abroad. Later during that same conversation, Kaliebe stated that, once he arrived in Yemen, he expected to fight the “Yemeni army” and “those who are fighting against the Sharia of Allah . . . whether it’s the U.S. drones or the, their puppets, in the Yemeni army . . . or, who knows, if American agents or whatever, U.S. Special Forces . . . who they got over there.” When asked if he was afraid to die, Kaliebe responded “I wanna . . . . It’s what anyone would want, any believer would want.” During another recorded conversation, which took place on July 9, 2012, Kaliebe stated that he had been inspired by several sheiks, including “Sheik Usama,” “who showed how he could bring an entire nation to its knees.”
According to the court filings, beginning in approximately July 2012, Kaliebe saved money to finance his travel to Yemen, which he then used to apply for and purchase a United States passport, and to purchase an airline ticket to Oman, from where he intended to travel by land to Yemen. During a recorded meeting on July 30, 2012, Kaliebe stated explicitly that he was saving money “as a means to go to Yemen to fight jihad.”
On December 26, 2012, Kaliebe sent an email in which he swore his loyalty to the leaders of AQAP and al-Qaeda, respectively, writing, “I pledge my loyalty, allegiance and fidelity to the Mujahedeen of Al-Qaa'idah in the Arabian Peninsula and its leaders, Shaykh Abu Baseer Nasir Al-Wuhayshi and Shaykh Ayman Al-Zawahiri, hafidhahum Allah! May Allah accept this from me and may he allow me to fight in his cause til the day that I leave this dunya.”
According to court filings, on January 18, 2013 Kaliebe reaffirmed his commitment to jihad, telling an NYPD Intelligence Division undercover officer, in a recorded conversation, that he understood “there’s a way out, but for me, the only way out is [martyrdom].” Additionally, Kaliebe paid homage to several terrorist leaders, telling the undercover law enforcement officer that:
[My] standard is Abu Dujana. [M]y standard is Abu Mus’ab Al-Zarqawi. My standard is Sheik Anwar Al-Awlaki and Sheik Usama, both who bore witness to the truth for their blood.
Finally, Kaliebe stated, “Oh Allah, please allow me, please allow me and my brother [ ] to fight jihad in your cause oh Allah. Oh Allah, please give us one of the two victories, victory on the ground or victory through [martyrdom.]”
On January 21, 2013, Kaliebe’s efforts culminated in an attempt to board a flight to Muscat, Oman at John F. Kennedy Airport in Queens, New York. He was arrested at the airport by members of the FBI’s Joint Terrorism Task Force and the NYPD Intelligence Division. Thereafter, on February 8, 2013, Kaliebe waived indictment and pled guilty to attempting to provide material support to AQAP/AAS and attempting to provide material support to terrorists.
The government’s investigation is on-going.
“Kaliebe attempted to turn his back on his country and align with radical terrorists. His goal was to travel overseas to wage violent jihad against Yemeni and U.S. forces opposed to al-Qaeda. Firmly committed to this plan, he found both inspiration and guidance in the online teachings of al-Qaeda leaders, including Usama Bin Laden. While the Internet has made worlds of knowledge available to all, unfortunately it is also used as a platform for al-Qaeda and other terrorist groups to spread their poisonous propaganda. Terrorists continue to exploit this free and open medium to persuade United States citizens and others to carry out attacks, both here and abroad. We must and will use every tool to identify and disrupt potential attackers before they strike,” stated United States Attorney Lynch. United States Attorney Lynch thanked the Port Authority of New York and New Jersey Police for their assistance in this investigation.
FBI Assistant Director-in-Charge Venizelos stated, “Kaliebe was equipped to travel overseas and fight jihad abroad. He set the wheels in motion – convinced of his well-thought-out plan – but didn’t get very far. The FBI, along with our law enforcement partners, will seek out those who pledge allegiance to terrorists and terrorist organizations throughout the world, and we will continue to work together to disrupt their evil plans.”
NYPD Commissioner Kelly stated, “The NYPD is concerned about the continuing interest of some young Americans in violent jihad and their identification with terrorist organizations like AQAP. That is why the NYPD Intelligence Division continues to track individuals allegedly evincing support for terrorism, and, that is why we worked in close cooperation with the JTTF to apprehend this suspect.”
The government’s case is being prosecuted by Assistant United States Attorney John J. Durham, Seth D. DuCharme, and Sean C. Flynn, with assistance provided by Trial Attorney Kelli Andrews of the Counterterrorism Section of the Department of Justice.
The Defendant
JUSTIN KALIEBE
Age: 18Kevin Tyler Pleads to Drug Conspiracy ChargeRead the Press Release
KEVIN TYLER, age 36, a resident of New Orleans, Louisiana, pleaded guilty today to one count of conspiracy to possess with intent to distribute
5 kilograms or more of cocaine hydrochloride before the Honorable Stanwood Duval, Jr., announced U.S. Attorney Dana J. Boente.According to the court record, TYLER’s charges stem from a Drug Enforcement Administration 2009 investigation of an illegal drug distributor named WILLIAM STEVENSON. During the course of the investigation, agents learned that STEVENSON conspired with several others to obtain wholesale supplies of heroin and STEVENSON also conspired with MARK ROSS, TYLER, and others to acquire quantities of cocaine hydrochloride. In August 2009, TYLER was the source of a kilogram of cocaine hydrochloride for STEVENSON’s cousin. Earlier in 2009, TYLER arranged for another of STEVENSON’s drug associates, ALVIN BARNES, and two other men to conduct a multiple kilogram cocaine deal at a house in Spring, Texas. Texas law enforcement intervened before the deal could take place and confiscated almost $400,000 from the house. Of the money confiscated, $100,000 was STEVENSON’s that he had given to BARNES to purchase 4 kilograms of cocaine hydrochloride.
TYLER was the last defendant to be adjudicated guilty in this multi-defendant case having been a fugitive from his initial indictment on November 5, 2010 until August 2012. TYLER is scheduled to be sentenced on October 2, 2013. He faces a mandatory minimum of 10 years to life imprisonment on the conspiracy charge.
The case was investigated by DEA in collaboration with the Gulf Coast High Intensity Drug Trafficking Task Force (HIDTA) and the Organized Crime Drug Enforcement Task Force (OCDETF). OCDETF is an important program which targets the most significant drug trafficking organizations within the United States, as well as those outside of the United States borders that impact drug trafficking within the United States.
Also assisting in the enforcement operations were the Louisiana State Police, Jefferson Parish Sheriff’s Office, Kenner Police Department, and St. Tammany Parish Sheriff’s Office, the Federal Bureau of Investigation, the Pasadena, Texas Police Department, and the Harris County Texas Sheriff’s Office.
(Download Factual Basis )
KC Man Sentenced to 24 Years for Meth ConspiracyRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Kansas City, Mo., man was sentenced in federal court today for his role in a conspiracy to distribute methamphetamine.
Simon Heredia-Torres, 35, was sentenced by U.S. District Judge Gary A. Fenner to 24 years and four months in federal prison without parole. The court also ordered Heredia-Torres to forfeit to the United States $75,000, which represents the proceeds of his illegal drug trafficking.
On May 14, 2012 Heredia-Torres pleaded guilty to participating in a conspiracy to distribute 500 grams or more of methamphetamine from Feb. 1, 2006 to May 31, 2010.
Heredia-Torres admitted that he made several trips out of state to pick up methamphetamine for distribution in the Kansas City metropolitan area. In July 2007, for example, Heredia-Torres contacted others in the Phoenix, Ariz. area and picked up multiple pounds of methamphetamine. He later returned to Arizona, where he picked up more pounds of methamphetamine to bring back to the Kansas City area. Heredia-Torres admitted that he made these types of trips two to three times a month, and that he usually delivered two to four pounds of methamphetamine to different people in different locations on the return trips.
Heredia-Torres also admitted that he transported pounds of methamphetamine from Kansas City, Kan. He obtained the methamphetamine directly from a source in Kansas City, Kan., who brought it up from Mexico.
This case is being prosecuted by Assistant U.S. Attorney Rudolph R. Rhodes, IV. It was investigated by the Lee’s Summit, Mo., Police Department, the Kansas City, Mo., Police Department, the Independence Mo., Police Department, the U.S. Drug Enforcement Administration, the U.S. Secret Service and the North Kansas City, Mo., Police Department with assistance from the Bureau of Alcohol, Tobacco, Firearms, and Explosives and U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI).Justin Carlton Whitman Sentenced in U.S. District CourtRead the Press Release
The United States Attorney's Office announced that during a federal court session in Billings, on June 26, 2013, before U.S. District Judge Donald W. Molloy, JUSTIN CARLTON WHITMAN, a 31-year-old resident of Billings, was sentenced to a term of:
Prison: 77 months
Special Assessment: $100
Supervised Release: 3 years
WHITMAN was sentenced in connection with his guilty plea to possession with intent to distribute and distribution of methamphetamine.
In an Offer of Proof filed by Assistant U.S. Attorney Jessica T. Fehr, the government stated it would have proved at trial the following:
In October of 2010, the FBI Big Sky Safe Streets Task Force (BSSSTF) received information about a large scale methamphetamine distribution organization operating in Yellowstone County.
In the spring of 2011, Eastern Montana HIDTA agents began performing electronic surveillance on Carlos Menjivar, an individual living in Billings. Investigators discovered that Menjivar began supplying the larger organization in late 2010 with methamphetamine.
During the investigation law enforcement learned that WHITMAN, a/k/a "Pounder", was a methamphetamine distributor for Menjivar from August of 2011 until about December of 2011.
WHITMAN was interviewed by law enforcement and admitted to selling methamphetamine for Menjivar. WHITMAN was normally provided with one or two ounces at a time. WHITMAN estimated he received meth from Menjivar five or six times in total. WHITMAN also admitted to having received meth from Menjivar's wife, Dawn Menjivar.
WHITMAN admitted to receiving at least 49 grams of methamphetamine but less than 50 grams of methamphetamine from the Menjivars during the course of the conspiracy. WHITMAN admitted he possessed the methamphetamine he received from the Menjivars
Carlos and Dawn Menijivar both pled guilty to federal charges.
Because there is no parole in the federal system, the "truth in sentencing" guidelines mandate that WHITMAN will likely serve all of the time imposed by the court. In the federal system, WHITMAN does have the opportunity to earn a sentence reduction for "good behavior." However, this reduction will not exceed 15% of the overall sentence.
The investigation was conducted by the Billings Big Sky Safe Streets Task Force.
Justice Department Statement on the Request to Hong Kong for Edward Snowden’s Provisional ArrestRead the Press Release
“The U.S. is disappointed and disagrees with the determination by Hong Kong authorities not to honor the U.S. request for the arrest of the fugitive, Edward J. Snowden.
“The request for the fugitive’s arrest for purposes of his extradition complied with all of the requirements of the US/Hong Kong Surrender Agreement. At no point, in all of our discussions through Friday, did the authorities in Hong Kong raise any issues regarding the sufficiency of the U.S.'s provisional arrest request. In light of this, we find their decision to be particularly troubling.
“Throughout this event, U.S. Department of Justice authorities have been in continual contact with their Hong Kong counterparts starting on June 10, 2013 when we learned that Snowden was in Hong Kong.
“We have had repeated communications with our Hong Kong counterparts at senior levels.
“Attorney General Eric Holder placed a phone call on June 19th EDT, with his counterpart, Hong Kong Secretary for Justice Rimsky Yuen, stressing the importance of the matter and urging Hong Kong to honor our request for Snowden’s arrest.
“There have been repeated engagements by the U.S. Department of State and U.S. Consulate General in Hong Kong.
“There have been repeated engagements by the FBI with their law enforcement counterparts.
“And finally, there have been continual communications by the Criminal Division’s Office of International Affairs with counterparts at HKSAR’s Department of Justice, International Law Division and Mutual Legal Assistance Unit.”
BACKGROUND TIMELINE INFORMATION
• On June 14, 2013, the fugitive, Edward J. Snowden, was charged by complaint in the ED VA with violations of:
o 18 U.S.C. § 793(d) (Unauthorized Disclosure of National Defense Information);
o 18 U.S.C. § 798(a)(3) (Unauthorized Disclosure of Classified Communication
Intelligence); and
o 18 U.S.C. § 641 (Theft of Government Property).• On that same date, a warrant was issued for his arrest.
• On June 15, 2013, the United States requested pursuant to the US/HK Surrender Agreement that HKSAR authorities provisionally arrest the fugitive for purposes of extradition.
• The U.S. request complied with all aspects of the treaty in force between the United States and the HKSAR – containing all documents and information required for HKSAR to provisionally arrest Snowden.
• June 17, 2013, Hong Kong authorities acknowledged receipt of our request. Despite repeated inquiries, Hong Kong authorities did not respond with any requests for additional information or documents, stating only that the matter was “under review” and refusing to elaborate;
• On June 21, 2013, Hong Kong authorities requested additional information concerning the U.S. charges and evidence. The U.S. had been in communication with the Hong Kong authorities about their inquiries.
• U.S. authorities were in the process of responding to the request when we learned that Hong Kong authorities had allowed the fugitive to leave Hong Kong.
• On June 23, 2013, Hong Kong authorities notified the U.S. that they had found our request insufficient and had allowed the fugitive to leave Hong Kong without acting on or request.
Judge Sentences Federal Inmate to Extra Prison Time for Possessing Cigarettes and Cell PhonesRead the Press Release
ERIE, Pa. - An inmate at the McKean Federal Correctional Institution in Bradford, Pennsylvania pleaded guilty and was sentenced in federal court to two months incarceration on his conviction for possession of contraband in prison, United States Attorney David J. Hickton announced today.
Chief United States District Judge Sean J. McLaughlin imposed the sentence on Leray Lanier, 26. The sentence was imposed to run consecutively to the sentence Lanier is currently serving.
According to information presented to the court on January 11, 2013, Lanier was in possession of contraband, namely cell phones and cigarettes.
Assistant United States Attorney Christian A. Trabold prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended Officers of the McKean Federal Correctional Institution for the investigation leading to the successful prosecution of Lanier.
Joint Local, State and Federal Synthetic Drug Round-Up Leads to the Arrest of 30 Defendants Charged with Selling "Spice" and "Bath Salts"Read the Press Release
CHARLOTTE, N.C. – Three separate criminal indictments and a criminal complaint charging 30 men and women with conspiracy to distribute and to possess with intent to distribute synthetic drugs and related charges have been unsealed in U.S. District Court, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina.
The indictments and criminal complaint are the result of joint local, state and federal investigations into head shops operating in Mecklenburg, Buncombe, Henderson, Transylvania and Mitchell Counties. According to filed court documents and court proceedings, the head shops sold synthetic drugs, such as synthetic marijuana, commonly referred to as “K2” or “Spice” and/or synthetic cathinones, commonly referred to as “Bath Salts.”
The federal indictments and the criminal complaint remained sealed until the named defendants were arrested by law enforcement over a two-day period. (A list of each defendant’s individual charges and penalties is attached).
“Masking synthetic drugs with creative names and deceptive packaging does not change the fact that these substances are illegal, highly addictive and potentially deadly to those who use them. Whether such drugs are sold in Asheville, Spruce Pine or Charlotte, let it be known that the law enforcement community stands united in the fight against these harmful chemicals that wreak havoc in our communities and pose serious health risks, particularly among young people,” said U.S. Attorney Tompkins.
Harry S. Sommers, the Special Agent in Charge of the DEA Atlanta Field Division stated, “The rise of synthetic drug use in the United States alone has reached epidemic proportions and has resulted in a sustained rise in emergency room visits, deaths, and violence among teens and young adults. DEA and its law enforcement partners will continue to attack this issue aggressively. Many thanks to the joint efforts by all law enforcement personnel involved.”
“The sale of synthetic drugs has become a growing epidemic nationwide,” said Brock D. Nicholson, Special Agent in Charge of Homeland Security Investigations Atlanta, which oversees offices in North Carolina, South Carolina and Georgia. “These drugs are made from a variety of dangerous chemical compounds that are not meant for human consumption. These arrests send a clear message to synthetic drug distributors that HSI and our law enforcement partners will utilize every resource available to ensure these activities are thwarted.”
A criminal complaint charged the owners of High Life Smoke Shops and their co-conspirators with conspiracy to distribute and to possess with intent to distribute a quantity of a mixture and substance containing a detectable amount of synthetic cathinones. According to filed court documents, from the Spring of 2012 through the present, the co-conspirators sold synthetic marijuana and bath salts at six head shops throughout Charlotte and surrounding areas. The synthetic drugs were sold under brand names such as “Blue Kush, “Zombie Matter,” “Demon Free Ritual Sachet,” “Sonic Zero” and “Red Dragon.” At least two of the co-conspirators owned “Dark Matter, Inc.,” a company that manufactured synthetic substances containing “alpha-PVP,” which is a banned substance. Those drugs were labeled “Zumos,” “Velocity” and “Xantopia” and were marketed as dietary supplements sold at the head shops and over the internet, court records indicate. The defendants are:
• Sonia Sudhir Thaker, 35, of Charlotte.
• Imran Yaseen, 45, of Mooresville, N.C.
• Gautam Savla, 33, of Charlotte.
• Jeffrey B. Davies, II, 34, of Charlotte.
• Poojan Patel, 28, of Charlotte.
Court documents show that the drug conspirators stored and distributed the synthetic drugs from two Charlotte-area warehouses. Court records indicate that along with the illegal drugs, the co-conspirators stored at the warehouses other drug paraphernalia, such as glass pipes, which were also sold at the head shops.
“We have to protect our community, especially our youth, from being exposed to synthetic drugs in any way possible,” said Chief Rodney Monroe, Charlotte-Mecklenburg Police Department. “With regional operations, we’re sending a strong message that illegal activities like these will not be tolerated and thereby jeopardizing the well-being of our citizens.”
A criminal indictment charged the owner of the Octopus Garden Smoke Shops, seven store managers and seven employees with conspiracy to distribute and to possess with intent to distribute a quantity of a mixture and substance containing a detectable amount of synthetic marijuana and related charges. According to the indictment, the alleged conduct occurred between September 2011 and December 2012 in Buncombe, Henderson and Transylvania counties. The synthetic marijuana was sold at Octopus Gardens’ seven locations under brand names such as “Mind Eraser”, Caution-Chronic 20x”, “Crippler”, “Dead and Berry’d”, “Krypt Twilight Zone”, “Black Rain”, “Vesuvius”, “Bizzaro”, “Tales from the Krypt”, “Voo Doo Child”, “Zeus Gods of Aroma”, “F.U.B.A.R”, “7H Kush”, “O.G. Kush”, “O.G. Kush II”, “Avalanche”, “Hades”, “Gro-Hi”, “Poseiden”. “Head Hunter”, “Be Marley”, “Armageddon”, and “Defcon 5.” The named defendants are:
• Gregory Scott Casey, age 38, of Asheville, N.C.
• James Scott Covington, Jr., age 28, of Asheville.
• Patricia Davis, age 54, of Asheville.
• Richard William Delalio, Jr., age 31, of Asheville.
• George Coleman Freiberg, age 32, of Arden, N.C.
• Kristi Diane Key, age 41, of Asheville.
• Peter Andrew Kunza, age 26, of Weaverville, N.C.
• Gerald William Locklear, age 60, of Asheville.
• Muriel Annette Ring, age 32, of Maggie Valley, N.C.
• Zachary Adam Shuford, age 33, of East Flat Rock, N.C.
• Sidney David Tureff, age 85, of Asheville.
• Jeffery Shane Vendernick, age 44, of Asheville.
• Jessica Michelle Webb, age 27, of Candler, N.C.
• Timothy Gary Wilson, age 30, of Asheville.
All defendants except Delalio and Ring are also charged with selling or offering to sell drug paraphernalia, such as glass pipes, intended for use in inhaling a controlled substance. Casey and Locklear are also charged with money laundering. During the course of the investigation law enforcement seized over $700,000 in cash and 247 ounces of silver, four vehicles and drug paraphernalia. The indictment includes a notice of forfeiture, which gives notice that the defendants must forfeit to the United States all of the property, currency and monetary instruments involved in the offenses charged in the indictment, and all property, currency and monetary instruments which are proceeds of such offenses.
“We hope by pursuing these cases as well as the new synthetic drug law that will go into effect on July 1, 2013, we will be able to curtail the sale of these very dangerous substances,” stated Buncombe County Sheriff Van Duncan.
“I would like to commend all the agencies involved for their tireless work and cooperative efforts in disrupting the flow of synthetic drugs into the streets of Western North Carolina,” said Henderson County Sheriff Charles S. McDonald. “Anyone wishing to establish a ‘head shop’ or similar type of business should not look to Henderson County as a community where they will be welcome or overlooked by law enforcement,” Sheriff McDonald added.
“Synthetic marijuana has been a problem we have dealt with for some time. It has caused many problems for its users in Transylvania County. I appreciate the partnership we have enjoyed with HSI and the US Attorney's Office during this investigation. The results of this investigation demonstrate the success that great partnerships can bring and these results will make a big impact in Transylvania County,” said Transylvania County Sheriff David Mahoney.
The investigation into Octopus Garden was handled by the Department of Homeland Security (HSI), the Drug Enforcement Administration (DEA), the Henderson County Sheriff’s Office, the Buncombe County Sheriff’s Office, the Transylvania County Sheriff’s Office, the Buncombe County Anti-Crime Task Force, and the Transylvania County Narcotics Task Force.
A separate criminal indictment charged seven defendants with conspiracy to distribute and to possess with intent to distribute a quantity of a mixture and substance containing a detectable amount of synthetic cathinones and related charges. According to that indictment, the alleged conduct occurred in Mitchell and Mecklenburg Counties from July 2012 to May 2013. The Bath Salts were sold at Pandora’s Dreams head shop in Spruce Pine, N.C., under brand names such as “White Water Rapids”, “Snowman”, “Super Glass Cleaner”, “Anti Monkey Butt Powder”, “Dragon”, and “Bushman’s Repellant.” The named defendants are:
• Matt Davis, age 32, of Charlotte.
• Kelly Higgins, age 24, of Burnsville, N.C.
• John Newberry, age 40, of Spruce Pine, N.C.
• Albert Tomes, age 41, of Bakersville, N.C.
• Tina Tomes, age 43, of Bakersville.
• Kevin Vickers, age 22, of Bakersville.
• Lori Watts, age 46, of Spruce Pine.
Newberry, Watts, Albert Tomes and Tina Tomes are also charged with selling or offering to sell drug paraphernalia, such as glass pipes, intended for use in inhaling a controlled substance. Matt Davis and Tina Tomes are also charged with money laundering. The indictment includes a notice of forfeiture, which gives notice that the defendants must forfeit to the United States all of the property, currency and monetary instruments involved in the offenses charged in the indictment, and all property, currency and monetary instruments which are proceeds of such offenses, including over $45,000 in cash, a vehicle, and a firearm seized during the course of the investigation.
Mitchell County Sheriff Donald Street said, “I am very thankful for the assistance from the federal authorities on closing down these head shops. Our local head shop was creating a real nightmare for our county and was destroying many people’s lives along the way. The arrest of the individuals involved in these businesses will hopefully show them and others the consequences of selling these very dangerous substances. This investigation is perfect example of what can be accomplished when local, state and federal authorities work together to solve problems in our local communities.”
“Synthetic cathinones (bath salts) and synthetic cannabinoids are two of the most widely abused drugs in Yancey County. My office has seen a large increase in the number of users of these controlled substances over the past couple of years. I feel like this is directly related to the fact that these drugs were very easy to obtain in both Mitchell and Buncombe Counties. Also, typically users of these controlled substances had the impression that these substances were ‘legal’ to purchase and possess. I would like to thank everyone for their assistance in this investigation,” said Yancey County Sheriff Gary Banks.
The investigation into Pandora’s Dreams was handled by the DEA, the Mitchell County Sheriff’s Office, the Yancey County Sheriff’s Office and the Spruce Pine Police Department.
The third indictment filed in the Western District charged Scott Baddock, age 47, of Inman, S.C.; Isam Jaradat, age 40, of Mars Hill, N.C.; and Hermant Sahney, age 53, of Fletcher, N.C. with conspiracy to distribute and to possess with intent to distribute a quantity of a mixture and substance containing a detectable amount of synthetic cathinones and a quantity of a mixture and substance containing a detectable amount of synthetic marijuana. According to that indictment, the alleged conduct occurred in Buncombe and Henderson Counties between June 2012 and January 2013. The “Bath Salts” were sold at the Just Like That Smoke Shop in Weaverville, N.C. and elsewhere, under brand names such as “Snake Eyes”, “Eight Ballz”, “White Girl”, “White Angel”, “Ivory Wave Bath Salts”, Tran Quility Bath Salts”, “Diamond Dust”, “Loco Motion Bath Salts” and “Bang Bath Salts”. The “K2” was sold at Just Like That Smoke Shop and elsewhere, under brand names such as “Cool Beanz”, “Krypt”, “Purple Diesel Hydro”, “Nugz Hipnotic”, “Spectacular”, “Zero Gravity”, “Hydro Purple Haze”, “Mr. Nice”, “Zombie Breath”, “Super Kush”, “Mr. Kush”, “7H Hydro”, “Posh”, “K2 Super Kush”, “Route 69 Cherry”, “One Love”, “Smoke XXX”, “Woodstock”, “Platinum”, “Donkey”, “7H Kush 100% High”, “Diablo”, “Pure Evil”, “F.U.B.A.R.”, “Pure Fire”, and “Nightmare”.
Baddock and Jaradat are also charged with offering to sell drug paraphernalia, such as glass pipes, intended for use in inhaling a controlled substance. The indictment includes a notice of forfeiture, which gives notice that the defendants must forfeit to the United States all of the property, currency and monetary instruments involved in the offenses charged in the indictment, and all property, currency and monetary instruments which are proceeds of such offenses, including over $36,000 in cash, a vehicle, drug paraphernalia and three firearms seized during the course of the investigation.
The investigation was handled by HSI, the Buncombe County Anti-Crime Task Force, the Buncombe County Sheriff’s Office and the Henderson County Sheriff’s Office.
The defendants are scheduled to have initial appearances today in U.S. District Court in Charlotte. The charges contained in the indictments are allegations. The defendants are presumed innocent unless and until they proven guilty beyond a reasonable doubt in a court of law.
U.S. Attorney Tompkins thanked all the law enforcement agencies involved for their continued cooperation and assistance. The prosecution for the case is handled by Assistant U.S. Attorneys Dana Washington, Thomas Kent and Elizabeth Greene, of the U.S. Attorney’s Office in the Western District of North Carolina.
James Wade Campbell Sentenced to Serve 240 Months in Prison for Manufacturing MethamphetamineRead the Press Release
GREENEVILLE, Tenn. – James Wade Campbell, 32, of Elizabethton, Tenn., was sentenced on June 26, 2013, by the Honorable J. Ronnie Greer, U.S. District Court Judge, to serve 240 months in federal prison. Following the prison sentence he will be subject to eight years of supervised release, under the supervision of the U.S. Probation Office. There is no parole in the federal system.
Campbell and Amber Layne Markland, 33, also of Elizabethton, Tenn., were indicted in September 2012 and both later pleaded guilty conspiring to manufacture five to 50 grams of methamphetamine. The charges initiated from the investigation of a fire and injuries sustained by Campbell caused by a methamphetamine laboratory at an Elizabethton apartment in September 2011. In February 2012, both Campbell and Markland were arrested on state charges when a second methamphetamine laboratory and components were discovered at a different apartment in Elizabethton where they were manufacturing methamphetamine.
In May 2013, Markland was sentenced by Judge Greer to serve 130 months in federal prison, followed by four years of supervised release. Campbell received an enhanced sentence in this case due to his classification as a career offender because of his lengthy criminal history, which included at least two prior felony convictions of either a crime of violence or a controlled substance offense.
U.S. Attorney Bill Killian commended the investigative efforts of the law enforcement agencies who handled this investigation. “Manufacturing methamphetamine is inherently dangerous and places our communities at risk due to fires and explosions that can result from “shake and bake” labs. The punishment that these individuals receive sends a strong message that this office will continue to aggressively prosecute people who manufacture methamphetamine and, by doing so, create a substantial risk of harm to the lives of people in the community.”
Agencies involved in this investigation included the Elizabethton Police Department, Tennessee Methamphetamine and Prescription Drug Task Force, and Drug Enforcement Administration. Assistant U.S. Attorney Suzanne Kerney-Quillen represented the United States.
Informational: Federal Court ArraignmentsRead the Press Release
The United States Attorney's Office announced that during a federal court session in Missoula, on June 25, 2013, before U.S. Magistrate Judge Jeremiah C. Lynch, the following individuals were arraigned:
JERRI ROWHER McCUBBINS, age 61, and SHAWN ANTHONY FERNANDEZ, age 48, residents of Butte, appeared on charges of conspiracy to possess with intent to distribute methamphetamine and possession with intent to distribute methamphetamine. McCUBBINS is currently released on special conditions and FERNANDEZ is currently detained. If convicted of these charges, they each face possible penalties of a mandatory minimum of 5 years and could be sentenced to 40 years, a $5,000,000 fine, and 4 years supervised release. Assistant U.S. Attorney Paulette L. Stewart is the prosecutor for the United States. The investigation was a cooperative effort between the U.S. Department of Homeland Security - Homeland Security Investigations and the Butte-Silverbow Law Enforcement Agency.
The defendants pled not guilty to the charges.
The charge, an indictment, information or complaint, is merely an accusation and all persons named as defendants are presumed innocent until proven guilty. A pre-trial conference and a trial date will be set and the United States will be required to prove the allegations set forth in the indictment beyond a reasonable doubt.
Illegal Alien Indicted for Unlawful Gun PossessionRead the Press Release
POCATELLO - Rigoberto Torres-Perez, 30, of Dubois, Idaho, and a Mexican national, was indicted yesterday by a federal grand jury in Pocatello for unlawful possession of a firearm, U.S. Attorney Wendy J. Olson announced.
The indictment alleges that on November 4, 2012, Torres-Perez, previously convicted of possession of dangerous drugs in 2006, and an alien illegally in the United States, unlawfully possessed a Hi-Point, 9 millimeter pistol with an obliterated serial number. The charge of unlawful possession of a firearm is punishable by up to 10 years in prison, a maximum fine of $250,000, and up to three years of supervised release.
An indictment is a means of charging a person with criminal activity. It is not evidence. The person is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
The case is being investigated by Homeland Security Investigations and the Bureau of Alcohol, Tobacco, Firearms, and Explosives. The case is being prosecuted as part of Idaho’s Project Safe Neighborhoods Program, which seeks to reduce gun violence in Idaho.
Hollygrove Gang Member, Theron Golston, Pleads Guilty to Federal Rico, Drug, and Murder ChargesRead the Press Release
THERON GOLSTON, aka “Thema”, 23 years old, a resident of New Orleans, pled guilty today in federal court to various federal violations stemming from a multi-count second superseding indictment which charged him and several of his associates with participating in violent drug gang that operated in the Hollygrove area of the City of New Orleans.
GOLSTON agreed to plead guilty to the following counts; RICO conspiracy, conspiracy to distribute crack cocaine, conspiracy to use firearms in furtherance of drug trafficking crimes and crimes of violence and with the murder of Eula May Ivey in aid of racketeering.
GOLSTON’s plea of guilty was entered in accordance with the terms of a plea agreement which specifies the defendant is to receive a term of life imprisonment. The Court may accept or reject the specified sentence at the time of sentencing.
According to the second superseding indictment, the above listed defendants were members and associates in fact of the criminal enterprise that operated in an area of the city that historically encompassed the Hollygrove area of New Orleans, Louisiana. The boundaries of the area include South Carrollton Avenue, Earhart Boulevard, Interstate 10, and the Jefferson Parish line.
GOLSTON is the fifth defendant in this case to plead guilty.
Co-defendant Carey Jones, aka “Bean”, also pled guilty to a life sentence for his participation in the RICO conspiracy, two separate non-fatal shootings, and for his participation in the murder of Ms. Eula May Ivey.
Co-defendant Bernell Williams, aka “Bussy”, pled guilty to participating in the RICO conspiracy, drug conspiracy, gun conspiracy, and to his involvement in two separate non-fatal shootings. He will face a sentence of 25 to 30 years in prison.
Co-defendant Ryan Carroll, aka “Ronnie Boo”, pled guilty to participating in the RICO conspiracy and to discharging a firearm during a drug trafficking crime and a crime of violence. He faces a sentence of 10 years to life.
Co-defendant China Stewart, aka “Ms. China”, pled guilty to possession with the intent to distribute crack cocaine and will face a sentence of not more than five years.
The remaining defendants, Tyronne Stevenson, aka “Duke”; Norman Ratcliff, aka “Turk”; Mark Glenn; and Walter Conley, aka “Ike Neezy”, are scheduled to stand trial on September 23, 2013. All are presumed innocent until proven guilty at trial.
U. S. Attorney Dana J. Boente stated that “these long sentences are a clear example of what lies ahead for those who continue to commit acts of violence in this City. We are starting to see the results of the strong cases resulting from the newly formed Multi-Agency Gang Unit (“MAG Unit”). These pleas and sentences should put all, including gang members, on notice that the MAG Unit has the ability, the tools, and the knowledge to completely dismantle an entire criminal enterprise. The federal government, in partnership with local law enforcement, will continue to develop these cases in order to combat violent crime.”
The Multi-Agency Gang Unit is an N.O.P.D. led division which includes federal agents from A.T.F., D.E.A., F.B.I., and the U.S. Marshal’s Service, as well as participants from the Orleans Parish Sheriff’s Office, The Louisiana State Police, State Probation and Parole, and the New Orleans District Attorney’s Office.
The case was investigated by agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives. The case is being prosecuted by Assistant United States Maurice E. Landrieu, Jr.
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Hartford Man Pleads Guilty to Federal Gun ChargeRead the Press Release
Deirdre Daly, Acting United States Attorney for the District of Connecticut, announced that OBED FRANCO, also known as “Obie,” 23, of Hartford, pleaded guilty today before United States District Judge Janet C. Hall in New Haven to one count of possession of a firearm in furtherance of a drug trafficking crime.
According to court documents and statements made in court, FRANCO was a member of a drug trafficking organization that sold heroin in the Hartford area. One of FRANCO’s heroin customers held a Connecticut pistol permit. On five occasions between February 2011 and May 2011, FRANCO and others drove the drug customer to a federally-licensed firearms dealer in East Hartford and picked out a total of eight guns for the customer to purchase. FRANCO and his other co-conspirators, including Wilson Morillo, then provided the customer with money to complete the purchases. After purchasing the firearms and leaving the store, FRANCO and his co-conspirators gave the drug customer heroin and cash in exchange for the firearms.
In May 2011, FRANCO also purchased a firearm from another heroin customer in exchange for cash and heroin.
Judge Hall has scheduled sentencing for September 18, 2013, at which time FRANCO faces a mandatory minimum term of imprisonment of five years and a maximum term of life imprisonment.
FRANCO has been detained on unrelated state charges since June 15, 2011.
On May 28, 2013, Morillo pleaded guilty to one count of possession of a firearm in furtherance of a drug trafficking crime. He also is detained while awaiting sentencing.
This matter was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Hartford Police Department. The case is being prosecuted by Assistant United States Attorney Jonathan S. Freimann and Special Assistant United States Attorney Natasha Dye.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
[email protected]Harrison County Man and Woman Sentenced for Drug ViolationsRead the Press Release
Department of Justice
Office of Public AffairsMARSHALL, Texas – A Karnack, Texas man and woman have been sentenced to federal prison for drug trafficking violations in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
Gregory Scott Covey, 42, pleaded guilty on Aug. 8, 2012, to possession of pseudoephedrine with intent to manufacture methamphetamine and was sentenced to 110 months in federal prison today by U.S. District Judge Rodney Gilstrap.
Christine Francis Sirmans, 45, pleaded guilty on Aug. 7, 2012, to possession of pseudoephedrine with intent to manufacture methamphetamine and was sentenced to 54 months in federal prison today by Judge Gilstrap.
According to information presented in court, from Mar. 21, 2010 to Sep. 3, 2010, Covey purchased cold pills containing pseudoephedrine at stores in Marshall, Texas, at least 32 times. From Oct. 12, 2008 to Nov. 16, 2010, Sirmans purchased cold pills containing pseudoephedrine at stores in Marshall and Carthage, Texas, at least 74 times. The cold pills were purchased to be used in the manufacture of methamphetamine. An 839-count federal indicted was returned on Feb. 1, 2012, charging Covey and Sirmans and 15 other co-defendants with federal drug crimes. Of those defendants, 16 have been convicted.
This case is being investigated by the Texas Department of Public Safety and the Harrison County Sheriff’s Office and prosecuted by Assistant U.S. Attorney Allen Hurst.
Guilford Podiatrist Pleads Guilty to Medicare FraudRead the Press Release
Deirdre M. Daly, Acting United States Attorney for the District of Connecticut, announced that RICHARD SOKOLOFF, 70, of Guilford, waived his right to indictment and pleaded guilty today before United States District Judge Janet Bond Arterton in New Haven to one count of health care fraud.
According to court documents and statements made in court, SOKOLOFF was a podiatrist with a practice at 652 Boston Post Road in Guilford. Between July 2008 and February 2012, SOKOLOFF engaged in a health care fraud scheme by submitting claims to Medicare for avulsion of nail plate services which were not rendered. An avulsion of nail plate service, or “nail avulsion,” is a surgical procedure to treat ingrown toenails. The procedure involves the surgical separation and removal of all or part of a toenail from the tip of the nail back to the base of the nail. Pursuant to relevant Medicare policies, the procedure is required to be performed using injectable anesthesia unless the patient is devoid of sensation or there are other extenuating circumstances. Injectable anesthesia is necessary to perform a partial or full nail avulsion to avoid causing extreme pain to the patient.
The investigation revealed that SOKOLOFF commonly provided only “routine foot care” services to his Medicare patients, such as simply trimming or clipping their toenails, but he regularly submitted claims to Medicare as if he had performed nail avulsion surgical procedures. Routine foot care is typically not a payable service under relevant Medicare regulations except in limited circumstances for patients with certain systemic conditions or other significant medical issues. SOKOLOFF also did not use an injectable anesthetic while supposedly providing nail avulsion services.
When Medicare requested that SOKOLOFF provide documentation to substantiate his nail avulsion services, SOKOLOFF created and back-dated patient progress notes to make it appear that the avulsion of nail plate services had been performed when, in fact, they had not been performed.
SOKOLOFF was paid more than $200,000 by Medicare for nail avulsion services that had not been performed.
Judge Arterton has scheduled sentencing for October 3, 2013, at which time SOKOLOFF faces a maximum term of imprisonment of 10 years and a fine of up to $250,000.
As part of the resolution of this matter, SOKOLOFF has agreed to a 10-year exclusion from all federal health care programs.
This investigation was conducted by special agents from the Office of Inspector General for the Department of Health and Human Services and the Federal Bureau of Investigation. The case is being prosecuted by Assistant United States Attorney Richard M. Molot and Auditor Kevin Saunders.
Acting U.S. Attorney Daly encourages individuals who suspect health care fraud to report it by calling the Health Care Fraud Task Force at (203) 777-6311 or. 1-800-HHS-TIPS.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
[email protected]General Electric to Pay over $6.5 Million to Resolve Claims of Submitting False Claims Act AllegationsRead the Press Release
LOS ANGELES – General Electric Aviation Systems (GEAS) has agreed to pay $6.58 million to settle allegations that it submitted false claims in connection with multiple Department of Defense contracts, the Justice Department announced today. GEAS, headquartered in Ohio, manufactures and sells integrated systems and components for commercial, corporate, military and marine aircraft. The company operates a manufacturing facility in Santa Ana, California, where certain parts for military aircraft are fabricated and where the conduct at issue in this case took place.
GEAS contracted to manufacture and deliver to the Navy external fuel tanks (EFTs) for use on the F/A-18 Hornet strike fighter jet. GEAS manufactured the EFTs at its Santa Ana plant, which it acquired when it purchased another aerospace company in 2007. In March 2008, a GEAS-manufactured EFT failed government testing, which led to a multi-year investigation by the California offices of the Defense Contract Management Agency, the Defense Contract Audit Agency, the Defense Criminal Investigative Service and the Navy Criminal Investigative Service. As a result of that investigation, the United States alleged that GEAS knowingly failed to comply with contract specifications and failed to undertake proper quality control procedures in connection with 641 EFTs it delivered to the Navy between June 2005 and February 2008.
Most of the settlement announced today – $6.25 million – relates to the EFTs manufactured in Southern California.
“Defense contractors agree to provide the government with a quality product, and in doing so, they promise to follow strict manufacturing and testing protocols to ensure that our military receives only the best equipment,” said André Birotte Jr., the U.S. Attorney for the Central District of California. “In this case, some of the hardware sold to the government did not meet quality-control standards, and that failure could have put our service members at risk. This multimillion dollar settlement is designed to ensure that General Electric Aviation Systems does not engage in this type of misconduct in the future, and this case should serve as a warning to any government contractor who thinks it can cut corners.”
In addition, the settlement resolves allegations that, between June 2010 and June 2011, GEAS knew that it falsely represented to another government contractor that GEAS had performed a complete inspection of 228 drag beams to be used on Army UH-60 Blackhawk helicopters, and that those 228 drag beams conformed to all contract specifications. These parts were also manufactured in Santa Ana.
“This case demonstrates the Department of Justice’s commitment to ensure that our military receives quality products to perform the important mission of protecting and defending our country,” said Stuart F. Delery, Acting Assistant Attorney General for the Civil Division. “The department will aggressively pursue those who put that mission at risk.”
Allegations about GEAS’s misconduct at the Santa Ana facility were included in a lawsuit filed by former GEAS Santa Ana employee Jeffrey Adler under the qui tam or whistleblower provisions of the False Claims Act, which permit private individuals called “relators” to bring lawsuits for false claims on behalf of the United States, and to receive a portion of the proceeds of any settlement or judgment. Mr. Adler’s share of the settlement has not yet been determined.
This settlement was the result of a coordinated effort by the Department of Justice, Civil Division, Commercial Litigation Branch; the U.S. Attorney’s Office for the Central District of California; the U.S. Attorney’s Office for the Southern District of Ohio; the Defense Contract Management Agency; the Defense Contract Audit Agency; the Defense Criminal Investigative Service; and the Navy Criminal Investigative Service in investigating and resolving the allegations.
The qui tam lawsuit, filed in the U.S. District Court for the Southern District of Ohio, is captioned United States ex rel. Adler v. General Electric Aviation Services (1-CV-00313). The claims resolved by the settlement are allegations only and do not constitute a determination of liability.
Release No. 13-088
General Electric Aviation Systems to Pay<br /> U.S. $6.58 Million to Resolve False Claims Act AllegationsRead the Press Release
General Electric Aviation Systems (GEAS) has agreed to pay $6.58 million to settle allegations that it submitted false claims in connection with multiple Department of Defense contracts, the Justice Department announced today. GEAS, headquartered in Ohio, manufactures and sells integrated systems and components for commercial, corporate, military and marine aircraft.
“This case demonstrates the Department of Justice’s commitment to ensure that our military receives quality products to perform the important mission of protecting and defending our country,” said Stuart F. Delery, Acting Assistant Attorney General for the Civil Division. “The department will aggressively pursue those who put that mission at risk.”
GEAS contracted to manufacture and deliver to the Navy external fuel tanks (EFTs) for use on the F/A-18 Hornet strike fighter jet. GEAS manufactured the EFTs at its plant in Santa Ana, California. In March 2008, a GEAS-manufactured EFT failed government testing, which led to a multi-year investigation by the local California offices of the Defense Contract Management Agency, the Defense Contract Audit Agency, the Defense Criminal Investigative Service and the Navy Criminal Investigative Service. As a result of that investigation, the United States alleged that GEAS knowingly failed to comply with contract specifications and failed to undertake proper quality control procedures in connection with 641 EFTs it delivered to the Navy between June 2005 and February 2008.
In addition, the settlement resolves allegations that, between June 2010 and June 2011, GEAS knew that it falsely represented to another government contractor that GEAS had performed a complete inspection of 228 drag beams to be used on Army UH-60 Blackhawk helicopters, and that those 228 drag beams conformed to all contract specifications.
“Defense contractors agree to provide the government with a quality product, and in doing so, they promise to follow strict manufacturing and testing protocols to ensure that our military receives only the best equipment,” said André Birotte Jr., U.S. Attorney for the Central District of California. “In this case, some of the hardware sold to the government did not meet quality-control standards, and that failure could have put our service members at risk. This multimillion dollar settlement is designed to ensure that General Electric Aviation Systems does not engage in this type of misconduct in the future, and this case should serve as a warning to any government contractor who thinks it can cut corners.”
Carter Stewart, U.S. Attorney for the Southern District of Ohio, added, “We are determined to protect the integrity of the system that provides goods and services to the men and women who serve in the armed forces. The False Claims Act is an effective and powerful tool to help us carry out our mission.”
Allegations about GEAS’s misconduct at the Santa Ana facility were included in a lawsuit filed by former GEAS Santa Ana employee Jeffrey Adler under the qui tam or whistleblower provisions of the False Claims Act, which permit private individuals called “relators” to bring lawsuits for false claims on behalf of the United States, and to receive a portion of the proceeds of any settlement or judgment. Mr. Adler’s share of the settlement has not yet been determined.
This settlement was the result of a coordinated effort by the Department of Justice, Civil Division, Commercial Litigation Branch; the U.S. Attorney’s Office for the Central District of California; the U.S. Attorney’s Office for the Southern District of Ohio; the Defense Contract Management Agency; the Defense Contract Audit Agency; the Defense Criminal Investigative Service; and the Navy Criminal Investigative Service in investigating and resolving the allegations.
The qui tam lawsuit, filed in the U.S. District Court for the Southern District of Ohio, is captioned United States ex rel. Adler v. General Electric Aviation Services (1-CV-00313). The claims resolved by the settlement are allegations only and do not constitute a determination of liability.
Fultondale Woman Pleads Guilty to Stealing from ATMs She ServicedRead the Press Release
BIRMINGHAM – A Fultondale woman pleaded guilty today in federal court to stealing money from an ATM at Children’s of Alabama while she worked as an ATM service technician, announced U.S. Attorney Joyce White Vance and U.S. Secret Service Acting Special Agent in Charge Jeffrey L. Anderson.
KELLY FUCHS, 26, entered her plea to bank larceny before U.S. District Judge Karon O. Bowdre. Fuchs was employed with Loomis armored-car service as an ATM service technician between late 2012 and early 2013 when she stole from ATMs around the Birmingham metro area, according to court documents.
As part of her plea agreement with the government, Fuchs consents to forfeit $47,000 to the government as proceeds of illegal activity, and to pay $47,000 in restitution to Loomis Armored.
According to the indictment and plea agreement, Fuchs stole from eight ATMs. The ATM locations and the amount stolen were: Children’s of Alabama, $6,000; Children’s of Alabama, $5,000; Montclair Road, Birmingham, $10,000; Medical Center East, $4,000; Culver Road, Mountain Brook, $10,000; Odum Road, Gardendale, $6,000; Martin Street, Pell City, $2,000; and Ashville Road, Leeds, $4,000.
The maximum sentence for bank larceny is 10 years in prison and a $250,000 fine.
The U.S. Secret Service and the Birmingham Police Department investigated this case, which Assistant U.S. Attorney Davis A. Barlow is prosecuting.
Fourteen Individuals Charged with Conspiracy to Distribute A Controlled Substance in Major Utah Spice CaseRead the Press Release
Utah case is a part of Project Synergy, a nationwide initiative
targeting synthetic drug trafficking organizationsST. GEORGE, UT – A federal complaint unsealed Wednesday morning in St. George, Utah, charges 14 individuals in St. George and Salt Lake City with conspiracy to distribute spice. The charges arise from an investigation that started in December when Illinois officials discovered packets of spice which appeared to be shipped from St. George to Illinois smoke shops. The charges were announced at a press conference Wednesday afternoon in St. George.
The Utah case is a part of “Project Synergy,” a nationwide enforcement operation targeting designer drug trafficking organizations. Nationwide, more than 300 federal and state search warrants and 150 arrest warrants were executed Wednesday morning with enforcement actions in 33 states. These series of enforcement actions included retailers, wholesalers, and manufacturers. Project Synergy was coordinated by DEA’s Special Operations Division working with the DEA Office of Diversion Control. The national initiative includes cases led by DEA, U.S. Customs and Border Protection, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI); IRS-Criminal Investigation; and the FBI.
In addition to the complaint in the Utah case, 43 seizure warrants and one civil forfeiture complaint were filed this week. Law enforcement officers executed 21 search warrants. Agencies involved in the Utah investigation include DEA, IRS-Criminal Investigation, HSI, BLM, the Washington County Drug Task Force, the Washington County Sheriff’s Office, the St. George Police Department, and the Hurricane Police Department.
Illinois officers, conducting a Spice investigation connected to a chain of smoke shops, contacted DEA agents in St. George when searches executed as a part of their investigation turned up 9,644 packets of Spice which appeared to have been shipped to Illinois from St. George. The Spice packets were marketed under brands called “Gods of Spice” and “Blue Heaven.”
Based on the information from Illinois officials, federal, state, and local law enforcement agencies in the St. George area launched an investigation. According to the complaint, the investigation shows that beginning in about March 2011, a group of co-conspirators in St. George and Salt Lake City began manufacturing large amounts of illegal Spice in Washington County and distributing it primarily to smoke shops around the United States using commercial couriers such as FedEx and UPS. These smoke shops, in turn, sell the Spice to individual customers. As an example, according to the complaint, the Illinois investigation showed that illegal Spice comprised about 90 percent of the smoke shops’ sales. It also showed that the smoke shops were obtaining nearly all of their Spice from the Washington County organization.
Since April 1, 2011, the Utah co-conspirators have distributed roughly 2,652 pounds of finished Spice product.
Independent of the investigation launched by the information from Illinois, HSI agents seized two packages of Spice chemicals coming into the country to co-conspirators in the case, including a shipment from China.“Often, when we talk about drug investigations in Utah, we are talking about drugs that are manufactured and shipped into Utah from other countries. Today’s complaint alleges co-conspirators in St. George, Utah, were involved in the manufacturing and distribution of drugs that were then shipped to states around the country,” U.S. Attorney David B. Barlow said today. “These synthetic drugs are illegal and dangerous. Those who use them have no idea what they are putting into their body or what chemicals have been used to manufacture them. The availability of these drugs, often sold in false and misleading packaging, makes them more dangerous. Those who use them may believe that if they can purchase them at a store or online, they must be legal and safe. They are neither, and those who manufacture or distribute these drugs in Utah will face prosecution.”
Charged in the complaint are Brian Merrill, age 27; Joshua Davis, age 37; Buck Andersen, age 33; Joseph Givogre, age 42; Gary Jolley, age 58; Alicia Brandom, age 31; Curtis McOsker, age 40; Malin Pavelka, age 34; Jennifer Barlow, age 22; and Richard Lewis, age 61; all of the St. George area. Defendants in the complaint from the Salt Lake City area are David Flores, age 32; James Hardwick, age 27; David Carter, age unknown; and Becky Young, age 36."Today DEA and our partners cut the head off of the snake. By decimating this massive drug distribution ring in St. George, we have stopped a constant flow of Spice to retailers in over 20 cities across the United States," said DEA Rocky Mountain Division Special Agent in Charge Barbra Roach.
“What hasn’t changed since Al Capone and Mickey Cohen is the effectiveness of IRS Criminal in relentlessly following the money trail to topple criminal enterprises. In this case, our financial sleuthing showed over $12 million in alleged proceeds deposited in and transferred between various accounts,” said Paul Camacho, Special Agent in Charge of the IRS Las Vegas Field Office.
“This is another major blow to an illicit industry that masquerades as being safe and legal,” said Kumar Kibble, Special Agent in Charge of HSI Denver, who oversees Utah investigations. “HSI is committed to working with our law enforcement partners to bring the synthetic drug industry to its knees.”The complaint alleges Merrill, Davis, Andersen, Flores, Hardwick, Givogre, and Jolley were the organizational leaders. Among other things, they obtained the raw chemicals and materials, employed other people, organized the distribution of the finished products, and laundered money. The complaint alleges the other individuals were employed by the leaders or otherwise assisted in the manufacturing and distribution of Spice and in laundering money.
According to the complaint, the leaders of this alleged drug-trafficking organization used corporations registered in Utah and Nevada which gave legitimacy to business transactions such as renting warehouses, shipping packages, receiving wire transfers, and depositing and withdrawing cash. Eight corporations are referenced in the complaint, including GOS Distributing, LLC; BH Wholesale; PFM Wholesale; DVS Wholesale; GRS Distributing; Zodiac Mortgage; Zodiac Companies Corp.; and Bad Habitz. Various defendants, including Davis, Merrill, Andersen, Givogre, Jolley, Flores, and Hardwick are listed as operators of the corporations.
According to the complaint, investigators learned that Spice was being manufactured at a warehouse in Hurricane. In late March, the Washington County Drug Task Force executed a search warrant at a residence in Santa Clara. Merrill signed the rental agreement for the residence, which was occupied by McOsker and Brandom. Inside the residence, officers found several items which they believe co-conspirators were utilizing to manufacture Spice, including four 50-gallon barrels of Ethanol 200, a binding agent; more than 300 kilograms of Damiana, a plant material; and seven bags containing white powder believed to be Spice chemicals.
In the days following the search of the residence in Santa Clara, the complaint alleges Davis and Merrill began removing large amounts of documents and other material from the Hurricane warehouse. Law enforcement officers followed Davis to the Washington County Landfill where they were able to recover evidence of the conspiracy to distribute Spice, including Gods of Spice packaging, bottles of flavoring, an operating agreement for Gods of Spice showing Andersen, Flores, and Davis as each 33 percent owners; hundreds of invoices; payroll summaries; and customer invoices.
The complaint outlines investigative tools used during the investigation to track the activities of the alleged co-conspirators, including business records seized through trash collections; monitoring of package shipments; surveillance; and search warrants. For example, from July 2012 through October 2012, the complaint alleges Davis, Andersen, and Merrill shipped hundreds of FedEx packages to smoke shops located in California, Florida, Iowa, Idaho, Illinois, Maine, Michigan, North Carolina, Nevada, New York, Oklahoma, Virginia, and Washington using company names GOS, PFM, and BHW. During the same time period, Jolley, using Zodiac Company, sent hundreds of packages to smoke shops in Alabama, Florida, Georgia, Illinois, Maine, Minnesota, Missouri, North Carolina, and Washington.
The complaint alleges that Merrill, Davis, and Andersen have deposited more than $5,640,728 in suspected drug proceeds into bank accounts under their control from April 2011 through March 2013. Hardwick and Flores have deposited more than $3,556,615 in suspected drug proceeds into bank accounts under their control from April 2011 through March 2013, the complaint alleges. Jolley, who the complaint identifies as a redistributor for Merrill, Davis, and Andersen, has deposited more than $2,418,263 in suspected drug proceeds in bank accounts under his control.
The potential maximum penalty for a conviction of conspiracy to distribute a controlled substance is 20 years in federal prison. Initial appearances for defendants arrested in St. George will be at 1:30 p.m. Thursday.
Complaints are not findings of guilt. Individuals charged in complaints are presumed innocent unless or until proven guilty in court.
(In addition to the PIO contacts listed above, questions for IRS-CI can be directed to Supervisory Special Agent Jared Halper at 801-318-6634. The HSI media contact is Andrew Munoz who can be reached at 206-442-1450.)
Four Richland County Men Recently Sentenced on Methamphetamine Related ChargesRead the Press Release
Four Richland County, IL, men were recently sentenced to federal prison on methamphetamine related charges, Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today.
Zachary H. French, 24, of Claremont, IL, was sentenced on June 24, 2013. Zachary French was sentenced to 108 months in prison, 4 years supervised release, and was fined $200. Zachary French had previously pleaded guilty to two counts in a federal indictment. Count 1 charged that from on or about July 2009, until on or about September 2012, in Richland County, Zachary French and others conspired to manufacture more than 50 grams of methamphetamine. Count 3 charged that July 6, 2009, to on or about July 8, 2012, in Richland County, Zachary French possessed pseudoephedrine, knowing and having reasonable cause to believe that the pseudoephedrine would be used to manufacture methamphetamine.
Bryan Alan Hanson, 49, of Parkersburg, IL, was sentenced on June 6, 2013. Hanson was sentenced to 180 months in prison, 3 years supervised release, and was fined $200. Hanson previously pleaded guilty to two counts in a federal indictment. Count 1 charged that on January 26, 2012, in Richland County, Hanson knowingly and intentionally manufactured methamphetamine. Count 3 charged that from April 2010, to on or about January 26, 2012, in Richland County, Hanson possessed pseudoephedrine, knowing and having reasonable cause to believe that the pseudoephedrine would be used to manufacture methamphetamine.
Warren Michael Morris, 33, of West Salem, IL, was sentenced on May 16, 2013. Morris was sentenced to 188 months in prison, 4 years supervised release, and was fined $200. Morris previously pleaded guilty to a federal indictment which charged that from February 2011, until on or about October 2012, in Richland County and Edwards County, Morris conspired to manufacture more than 50 grams of methamphetamine.
Ronald L. French, 55, or Claremont, IL, was sentenced on May 16, 2013. Ronald French was sentenced to 135 months in prison, 4 years supervised release, and was fined $200. Ronald French previously pleaded guilty to two counts charging that from on or about July 2009, until on or about September 2012, in Richland County, and elsewhere, French and others conspired to manufacture more than 50 grams of methamphetamine and that from on or about July 2009, until on or about September 2012, in Richland County, Ronald French did knowingly maintain a place, his residence in Claremont, Illinois, for the purpose of manufacturing methamphetamine.
The investigation on all these cases was conducted by the Richland County Sheriff’s Office.
The cases were handled by Assistant United States Attorney George Norwood.
Four Pittsburgh-area Men Charged with Violating Federal Firearms and Narcotics LawsRead the Press Release
PITTSBURGH - Four Pittsburgh residents have been indicted by a federal grand jury in Pittsburgh on charges of violating federal firearm and narcotics laws, United States Attorney David J. Hickton announced today.
The five-count superseding indictment, returned on June 25, named Faheem Jackson, 21, Anthony Lemon, 23, Roy Lemon, 25, and Dewan Valentine, 21, as defendants.
According to the superseding indictment presented to the court, the defendants participated in a conspiracy to distribute one kilogram or more of heroin from August 2011 to April 2012. The indictment also alleges that the defendants participated in a conspiracy to possess firearms in furtherance of that drug trafficking activity, and that Jackson and Valentine on various dates between September 2011 and April 2012 possessed specific firearms in furtherance of their drug trafficking activity.
The law provides for a maximum total sentence of up to life in prison, a fine of $10,750,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Brendan T. Conway is prosecuting this case on behalf of the government.
The Greater Pittsburgh Safe Streets Task Force consisting of Pittsburgh Bureau of Police, Allegheny County Sheriff's Office, Wilkinsburg Police Department, Allegheny County Police Dept., Oakdale Police Dept, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Drug Enforcement Administration and the Federal Bureau of Investigation conducted the investigation leading to the superseding indictment in this case.
A superseding indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Four Charged with Defrauding More Than 17,000 VictimsIn National Health Care Benefits SchemeRead the Press Release
57-Count Indictment Alleges Over $28 Million Fraud
Bart Sidney Posey, Sr., 46, and Angela Slavey Posey, 46, both of Springfield, Tennessee; William M. Worthy, II, 50, of Isle of Palms, South Carolina; and Richard Hall Bachman, 65, of Austin, Texas, were indicted by a federal grand jury in Nashville, Tennessee on June 26, 2013 for their roles in a national health care scheme that defrauded more than 17,000 victims of more than $28 million in health benefit plan premiums, announced David Rivera, Acting United States Attorney for the Middle District of Tennessee. The defendants face a 57- count indictment, which alleges an extensive national health insurance fraud scheme that includes charges of conspiracy, wire and mail fraud, embezzlement from a health care benefit plan, and money laundering.
Bart and Angela Posey were the owners and operators of Smart Data Solutions, LLC and other related entities, operating out of Springfield, Tennessee. Richard Bachman was a business associate of Bart and Angela Posey and Vice-President of Smart Data Solutions. William Worthy promoted himself as an insurance consultant and representative of Beema/Serve America, a foreign insurance entity.
The indictment alleges that Serve America, a “shell” company, was promoted as the underwriter for insurance policies sold to the public, however, the company was not licensed to operate in any state. Smart Data Solutions LLC, operated as the benefits administrator for Serve America and related entities. In 2010, Smart Data and its related entities were seized and liquidated by the State of Tennessee after the Davidson County Chancery Court found that these entities were acting as an unlicensed insurance company and posed a significant hazard to the public.
The indictment alleges that at various times and through various business entities, from January 2008 through July 2010, the defendants conspired and engaged in schemes to defraud persons seeking health care insurance. The defendants purported to provide health care coverage but instead operated in a manner to purposely evade state and federal regulations. They collectively operated as unlicensed, unregulated and fraudulent insurance companies, collected more than $28 million in premiums for health care coverage, and then denied or unjustly rejected legitimate claims submitted by participants.
The indictment also alleges that the defendants embezzled funds from the premiums paid by the participants that were intended to be used to pay eligible health care claims. The majority of the claims were not paid and during the scheme, the defendants diverted more than $5.4 million in premiums for their personal use.
“It is a priority of the U.S. Attorney’s Office to pursue those who demonstrate a willingness to steal from individuals who are at the most vulnerable period of their lives-a time when they need health care coverage,” said Acting U.S. Attorney David Rivera. “The magnitude of this fraud and the vast number of victims left in its wake is astounding. Even though the scheme is extensive and complicated, this indictment should serve as notice that we and our law enforcement partners will dedicate the necessary resources to meticulously dismantle such criminal enterprises and see that justice is properly served.”
“The U.S. Postal Inspection Service, working with our law enforcement partners and the U.S. Attorney's office, will aggressively pursue those who utilize the U.S. Mails to defraud innocent victims and bring them to justice,” said B.K. Morris, Inspector in Charge, Atlanta Division.“Confronting those who commit fraud and use criminal schemes to take advantage of innocent victims is a priority for the FBI, especially when it involves the health care of our community,” said A. Todd McCall, Special Agent in Charge of the Memphis Division of the Federal Bureau of Investigation. “The indictment announced today illustrate the combined commitment and effort of the FBI and our law enforcement partners to protect the safety and well-being of the public as well as the health care products they rely upon.”
"Theft of employee benefit assets jeopardizes the health security of workers,” said Isabel Colon, Regional Director of EBSA's Atlanta Regional Office. “This case reaffirms the Labor Department's commitment to protect workers' benefits by identifying criminal activity wherever and whenever it occurs. This investigation was part of the U.S. Department of Labor’s Health Benefits Security Project, which focuses on egregious and corrupt health arrangements and seeks to identify potential criminal violations and to assist the victims of crimes related to employee health benefits.”
"Honest and law abiding citizens are fed up with the likes of those who use deceit and fraud to line their pockets with other people's money," said Christopher A. Henry, Special Agent in Charge of the IRS-Criminal Investigation. "Those individuals who engage in this type of financial fraud should know they will not go undetected and will be held accountable."
“Today’s indictments demonstrate the OIG’s commitment to investigating health care fraud schemes involving employee benefit plans. We will continue to work with the U.S. Attorney’s Office and our law enforcement partners to investigate these types of schemes,” said Richard Walker, the Special Agent-in-Charge of the Atlanta Regional Office of the U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations.
If convicted, the defendants face up to 20 years in prison on the wire and mail fraud counts; 10 years in prison on the health care embezzlement and money laundering counts; and five years in prison on the conspiracy counts; and a $250,000 fine per count. Any sentence following conviction will be imposed by the Court after consideration of the U.S. Sentencing Guidelines and applicable federal statutes.
This case is being investigated by the United States Postal Inspection Service, the Federal Bureau of Investigation, the United States Department of Labor Employee Benefits Security Administration - Office of Inspector General, the United States Secret Service, the Internal Revenue Service - Criminal Investigation, and the State of Tennessee Office of the Attorney General. The United States is represented by Assistant United States Attorneys Sandra G. Moses and John K. Webb.
An indictment is merely an allegation and is not evidence of guilt. All defendants are presumed innocent unless and until proven guilty at trial at which, the government would bear the burden of proof beyond a reasonable doubt as to each count of the indictment.
Former State Lawmaker Pleads Guilty to Social Security FraudRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a former state legislator from Sugar Creek, Mo., pleaded guilty in federal court today to receiving Social Security disability payments while serving in the Missouri Legislature.
Raymond E. Salva, 65, of Sugar Creek, pleaded guilty before U.S. District Judge Dean Whipple to the charge of theft of government money.
Salva began working as a Missouri state representative in January 2003 and held that office through December 2010. While he was earning more than $30,000 a year for his work in the legislature, Salva received $58,816 in disability payments to which he was not entitled.
Salva admitted that he intentionally failed to report and concealed his earnings and work activity as a state legislator. Salva admitted today that he deliberately closed his eyes to what would otherwise have been obvious to him. He was not merely negligent, careless or mistaken as to whether he was eligible to receive Social Security disability payments, Salva admitted. Rather, he took deliberate actions to avoid confirming the high probability of wrongdoing in this case.
The Social Security Administration approved Salva’s application for disability insurance benefits in February 2000. Salva claimed he was disabled and unable to work due to a neck injury sustained in a farm accident. In May 2003, approximately five months after Salva began his first term as a state representative, the Social Security Administration conducted a continuing disability review in order to determine whether Salva remained eligible to receive disability payments. As part of that review, Salva completed a form in which he affirmed that he was not able to return to work and that he had not done any work since being disabled.
In October 2003, SSA determined that Salva’s disability was continuing based on a review of his records and the information he provided. In making this determination, SSA relied, in part, on the defendant’s false claim that he had not worked since he became disabled. SSA sent a letter to Salva informing him of this decision and reminding him to report any work activity, regardless of the amount of earnings. SSA continued to pay Salva disability benefits, not knowing that he was working at a substantial gainful activity level.
In December 2004, SSA discovered that earnings had been posted to Salva’s record and sent him a letter asking about his work activity. Salva responded that he had conferred with an SSA representative, who told him that public service would not affect his disability benefits. Salva admitted today that this statement was false and that he did not confer with an SSA representative who told him that working as a legislator was in some way exempted.
On March 16, 2008, the Social Security Administration sent Salva a letter notifying him of the overpayment he accrued from January 2004 through February 2008. The letter stated that Salva received benefit payments that he was not due. The Social Security Administration sent Salva a billing statement on Sept. 4, 2008.
Salva appealed the overpayment decision and testified before an Administrative Law Judge at two administrative hearings. Salva admitted today that a number of his statements during those hearings were false, including claims that he did not receive disability payments in some months. On April 11, 2011 the Administrative Law Judge issued a decision finding Salva at fault in causing the overpayment.
Under the terms of today’s plea agreement, Salva must pay $58,816 in restitution to the Social Security Administration prior to his sentencing hearing. Salva is subject to a sentence of up to 10 years in federal prison without parole, plus a fine up to $250,000. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Special Assistant U.S. Attorneys Trey Alford and Kate Hoey. It was investigated by the Social Security Administration Office of Inspector General, Office of Investigations.Former Pontiac City Council Member Sentenced to PrisonRead the Press Release
Former Pontiac City Councilman, Everett Seay, was sentenced today to 26 months in prison for accepting bribes, announced United States Attorney Barbara L. McQuade.
Joining in the announcement was Robert D. Foley, III, Special Agent in Charge of the Detroit Division of the Federal Bureau of Investigation.
Seay, 61, of Pontiac, was also ordered to forfeit $10,800 to the United States. The sentence was imposed by in U.S. District Judge Bernard A. Friedman.
According to court documents, beginning in May 2008, Everett Seay met repeatedly with “J.B.,” a person who purported to be a drug dealer from Chicago, who was seeking the assistance of members of the Pontiac City Council to obtain a “regulated use” ordinance to open a business to buy and sell gold for the purpose of laundering drug proceeds. Unknown to Seay, J.B. was actually an FBI agent acting in an undercover capacity. During several meetings, Seay solicited and accepted bribe payments from J.B. for his assistance in getting the ordinance passed. Between July and December 2008, Seay received $10,800 in bribe payments from J.B.
United States Attorney Barbara L. McQuade said, ““Public officials who take bribes not only betray the people they serve, but they also erode trust in government.”
Special Agent in Charge Robert D. Foley stated “"Those who are fortunate enough to serve in positions of public trust are expected to act with honesty and United States Attorney’s Office Eastern District of Michigan Barbara L. McQuade United States Attorney integrity at all times. The FBI is committed to holding individuals accountable for acts of bribery and other abuses."
The case was investigated by agents of the Federal Bureau of Investigation and prosecuted by Assistant United States Attorney Sheldon Light.
Former Owner of Local Durable Medical Equipment Company Is Sentenced to 35 Months in Federal Prison for Defrauding Medicare and MedicaidRead the Press Release
Kingsway Medical Systems, Inc. was Located in Desoto and Richardson, Texas
DALLAS — Philip Odoemena, 60, the former owner/operator of Kingsway Medical Systems, Inc., (Kingsway) was sentenced today by U.S. District Judge Barbara M. G. Lynn to 35 months in federal prison and ordered to pay $483,995 in restitution, following his guilty plea in September 2012 to one count of health care fraud. Odoemena has been in custody since his arrest in early May 2012. Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
According to documents filed in the case, from February 2005 to May 2012, Odoemena owned and operated Kingsway, a durable medical equipment (DME) company that was first located in Desoto, Texas, and then in Richardson, Texas. He was approved by both Medicare and Texas Medicaid to provide durable medical equipment, including wheelchairs and accessories, adult incontinence supplies and enteral nutrition supplies (tube feeding) to Medicare beneficiaries and Medicaid clients.
Odoemena admitted that from May 2007 through March 2012, he ran a scheme to defraud Medicare and Medicaid by submitting fraudulent claims that falsely represented that legitimate and qualifying supplies were provided and that falsely represented the medical necessity of the supplies. In one instance, for example, he billed Medicaid $870 for tube feeding supplies for a Medicaid client, when, in fact, he merely provided that client an oral nutritional supplement. Medicaid paid Kingsway $826 for that claim — funds that Odoemena used for his own personal benefit.
The case was investigated by the FBI, the U.S. Department of Health and Human Services - Office of Inspector General and the Texas Attorney General’s Medicaid Fraud Control Unit. To learn more health care fraud, please visit: http://stopmedicarefraud.gov.
The case was prosecuted by Special Assistant U.S. Attorney Brian W. Portugal and Assistant U.S. Attorney Katherine E. Pfeifle.
Former Mississippi Corrections Officer Sentenced for Orchestrating Assault on InmateRead the Press Release
Kenny McLaughlin, 35, a corrections officer at the Stone County Regional Correctional Facility in Stone County, Miss., was sentenced today to serve one year in federal prison and ordered to pay restitution of $6,000 for ordering the beating of an inmate at the detention facility in violation of federal civil rights laws.McLaughlin pleaded guilty on Mar. 29, 2013 to willfully violating the civil rights of persons in his custody. According to court documents filed in connection with his guilty plea, on May 12, 2008, McLaughlin, while working as a corrections officer, ordered an inmate to arrange an unwarranted assault on another inmate. As a result of McLaughlin’s order, the victim was assaulted by two fellow inmates in a shower area. McLaughlin was aware of the assault as it happened but did not notify any other officer or medical personnel of the assault. The victim suffered cuts to his face, bruises to his chest and fractured ribs.
“This sentence demonstrates that assaults on inmates whether by corrections officers personally or orchestrated by corrections officers undermine the rule of law and will not be tolerated,” said Deputy Assistant Attorney General Roy L. Austin Jr. of the Department of Justice’s Civil Rights Division. “The Justice Department is committed to prosecuting law enforcement officers who violate the constitutional rights of individuals in their custody.”
“Every citizen has the right to expect law enforcement officers to act legally and in accordance with the United States Constitution. Former Corrections Officer McLaughlin’s actions were inexcusable and should serve as a reminder that no one is above the law,” said U. S. Attorney for the Southern District of Mississippi Gregory K. Davis.
This case was investigated by the Gulfport Resident Agency of the Jackson Division of the FBI and is being prosecuted by Assistant U.S. Attorney Glenda R. Haynes of the U.S. Attorney’s Office for the Southern District of Mississippi and Trial Attorney Dana Mulhauser of the Civil Rights Division of the Department of Justice
Former Erie Man Sentenced to Prison for Failing to Register as A Sex OffenderRead the Press Release
ERIE, Pa. - A former resident of Erie, Pennsylvania, has been sentenced in federal court to 21 months in jail on his conviction of failure to register under the Sex Offender Registration and Notification Act, United States Attorney David J. Hickton announced today.
Chief United States District Judge Sean J. McLaughlin imposed the sentence on Gregory Lamont Crosby, 40.
According to information presented to the court, Crosby, upon moving to Pennsylvania from New York, knowingly failed to update his registration as required by the Sex Offender Registration and Notification Act.
Prior to imposing sentence, Judge McLaughlin commented on Crosby's lengthy criminal history which includes multiple probation and parole revocations.
Assistant United States Attorney Christian A. Trabold prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the United States Marshals Service for the investigation leading to the successful prosecution of Crosby.
Former Dublin Resident Indicted in $10 Million Real Estate ScamRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
COLUMBUS -- A federal grand jury has indicted Haider Zafar, 35, formerly of Dublin, Ohio, in connection with a $10 million fraud scheme involving false representations about investments in Pakistani real estate.
Carter M. Stewart, United States Attorney for the Southern District of Ohio and Kathy A. Enstrom, Acting Special Agent in Charge, Internal Revenue Service (IRS), Criminal Investigation, Cincinnati Field Office announced the indictment that was returned yesterday.
The indictment charges Zafar, who now lives in south Florida, with 118 counts of wire fraud, 13 counts of money laundering, one count of filing a false federal income tax return, and three counts of willfully failing to file a federal income tax return with the IRS.
The indictment alleges that Zafar made representations that his mother’s brother was a high ranking official in the Pakistani government, and that he and members of his family in Pakistan had knowledge of real estate that the government of Pakistan planned to acquire from private citizen-owners for purposes of building infrastructure and military facilities. Zafar stated he could purchase the real estate and sell it to the government of Pakistan for a significant profit. Individuals could invest money towards the purchase of the real estate, and would share the profits from such transactions.
Zafar allegedly instructed an individual to wire transfer money to an Ohio bank account in his name for the purchase real estate.
Zafar allegedly told that individual that he would receive the return of his money and a profit by wire transfer. Zafar subsequently then told this individual that the proceeds of the Pakistani real estate transaction totaled approximately $90,000,000, that this money was being held in Pakistan, and that the proceeds could not be transferred by wire to a bank account in the United States because Zafar was prohibited from transferring funds to the United States.
Between January 4, 2008 and February 25, 2010, Zafar allegedly caused this individual and two businesses owned by this individual and/or relatives and associates of this individual to wire transfer $10,115,000 to Zafar.
Instead of buying real estate in Pakistan, Zafar allegedly used the funds from the fraud scheme to buy multiple luxury automobiles, including a 2009 Mercedes-Benz roadster, three 2009 Mercedes-Benz sedans, a 2009 Aston-Martin DB9 convertible, a 2009 Maserati Gran Turismo, a 2009 Aston-Martin Vantage roadster, a 2010 Lamborghini LP560 Spyder, a 2009 Rolls Royce Phantom convertible, two Rolex watches, a Cartier watch, a Bulgari watch band, and several pieces of jewelry, including a loose diamond and two rings, among other items.
In addition, Zafar allegedly filed a fraudulent 2007 federal income tax return with the IRS which reported taxable income of zero, whereas Zafar allegedly omitted reporting approximately $221,500 in taxable income. Also, for each of the 2008 through 2010 income tax years, Zafar willfully failed to file a federal income tax return with the IRS. Zafar allegedly received $4,976,000 in gross income in 2008, $4,519,000 in gross income in 2009 and $620,000 in gross income in 2010.
IRS Special Agents arrested Zafar at Port Columbus Airport on May 25. He has been in custody since his arrest.
An indictment is merely an accusation. All defendants are presumed innocent until and unless proven guilty.
Wire fraud is punishable by up to 20 years in prison and a fine of $250,000. Money laundering is punishable by up to 10 years in prison and a fine of $250,000. Filing a false income tax return with the IRS is punishable by up to three years in prison and a fine of $250,000. Willfully failing to file an income tax return with the IRS is punishable by up to one year in prison and a fine of $25,000.
The indictment also contains a forfeiture allegation which calls for a money judgment in the amount of $10,115,000 and the forfeiture of numerous pieces of jewelry.
"Real estate investment fraud is like a 'house of cards.' The underlying structure can fall apart at any time and leave many investors in financial ruin," said Kathy A. Enstrom, Acting Special Agent in Charge, IRS, Criminal Investigation.
U.S. Attorney Stewart acknowledged the investigation by special agents of IRS-Criminal Investigation and the assistance of the FBI office in Miami, Florida as well as Assistant United States Attorney Dale Williams who is representing the United States in this case.
# # #Former Corrections Officer Convicted of Federal Civil Rights Offenses and Obstruction of Justice for Beating Death of an Inmate at Ventress Correctional FacilityRead the Press Release
Montgomery, Alabama - Michael Smith, 38, a former corrections officer of the Alabama Department of Corrections and resident of Lee County, was convicted by a federal jury in the United States District Court for the Middle District of Alabama of two civil rights violations and five obstruction of justice-related violations in connection with the beating death of former inmate Rocrast Mack, United States Attorney George L. Beck, Jr., announced today.
On August 4, 2010, Smith, a lieutenant with supervisory authority over other officers on his shift, repeatedly beat Mack with a baton and stomped on Mack’s head while Mack was restrained and could not fight back. Mack died from his injuries the next day at a Montgomery, Alabama, hospital. The incident occurred at Ventress Correctional Facility in Clayton, Alabama. The jury found that Mack’s death resulted from the assaults and that Smith obstructed justice by trying to cover up the assaults. After Smith was found guilty, U.S. District Judge Myron H. Thompson remanded Smith to jail pending his sentencing.
Two former corrections officers have already pleaded guilty for their role in the assaults. Scottie Glenn pleaded guilty on November 18, 2011, to one count of violating the civil rights of Mack for his role in the beating incident and to one count of conspiring with other corrections officers to cover up the beatings. Matthew Davidson pleaded guilty on January 15, 2013, to two civil rights violations and one count of conspiring with other officers to cover up the beatings. Both Davidson and Glenn are scheduled to be sentenced on July 30, 2013. A third former corrections officer, Joseph Sanders, is scheduled for trial on July 8, 2013.
Smith’s sentencing hearing before U.S. District Judge Myron H. Thompson is yet to be scheduled. Smith faces a maximum potential penalty of life in prison.
“The majority of our correction officers are dedicated to protecting and serving the public. Sadly, Smith was not so dedicated,” said U.S. Attorney for the Middle District of Alabama, George L. Beck, Jr. “Smith savagely beat and stomped a restrained man. There is no excuse for such behavior. I hope that the verdict handed down today brings some sense of justice to the victim’s family and reinforces the notion that no one is above the law.”
“This investigation represents the FBI’s unwavering commitment to protect all citizens from those who violate and abuse their positions of trust,” stated Stephen F. Richardson, FBI Special Agent in Charge, Mobile Division. “Public servants are bound by their oath to serve and protect our communities and any violation of a person’s civil rights will be met with severe consequences.”
This case was investigated by the Federal Bureau of Investigation, in partnership with the Alabama Bureau of Investigation, and was prosecuted by Assistant U.S. Attorney Jerusha T. Adams of the U.S. Attorney’s Office for the Middle District of Alabama and Trial Attorney Patricia Sumner of the U.S. Department of Justice’s Civil Rights Division.
PRESS CONTACT: Clark Morris
Email: [email protected]
Telephone: (334) 551-1755
Fax: (334) 223-7617Former Closing Attorney Sentenced to Two Year in Prison for Wire Fraud in Mortgage Loan SchemeRead the Press Release
BIRMINGHAM – U.S. District Judge Karon O. Bowdre today sentenced a former Birmingham real estate lawyer to two years in prison for wire fraud in connection with a mortgage fraud scheme that exceeded $1 million, announced U.S. Attorney Joyce White Vance.
KELVIN LEONARD DAVIS, 42, pleaded guilty in February to four counts of wire fraud for knowingly submitting false mortgage documents and statements to various lenders in order to obtain approval for mortgage loans. At the time of the fraudulent transactions, from October 2007 to January 2012, Davis served as the closing attorney on each of the fraudulent loan transactions.
As part of Davis' plea agreement with the government, he agreed to forfeit $269,335 to the government as proceeds of the illegal activity. Judge Bowdre ordered that forfeiture as part of Davis' sentence.
According to the plea agreement, Davis carried out his fraud as follows:
He submitted false statements with loan documents in order to obtain approval for mortgage loans that would, otherwise, not have been approved. In many instances, Davis, while serving as closing attorney, would use his trust account to provide money to the borrower when a mortgage loan was closing. Davis would recover the money by subtracting the amount he provided from the proceeds he issued to the seller. Davis also would assess the seller a fee, ranging from $1,000 to $6,000, and make checks for the fee payable to Peaceful Valley Homes, a corporation he had formed. Total losses to the various lenders as a result of Davis' fraud exceeded $1 million.
The FBI and the Department of Housing and Urban Development, Office of Inspector General, investigated the case. Assistant U.S. Attorney Robin Beardsley Mark prosecuted the case.
Former Closing Attorney Sentenced to Two Year in Prison for Wire Fraud in Mortgage Loan SchemeRead the Press Release
BIRMINGHAM – U.S. District Judge Karon O. Bowdre today sentenced a former Birmingham real estate lawyer to two years in prison for wire fraud in connection with a mortgage fraud scheme that exceeded $1 million, announced U.S. Attorney Joyce White Vance.
KELVIN LEONARD DAVIS, 42, pleaded guilty in February to four counts of wire fraud for knowingly submitting false mortgage documents and statements to various lenders in order to obtain approval for mortgage loans. At the time of the fraudulent transactions, from October 2007 to January 2012, Davis served as the closing attorney on each of the fraudulent loan transactions.
As part of Davis’ plea agreement with the government, he agreed to forfeit $269,335 to the government as proceeds of the illegal activity. Judge Bowdre ordered that forfeiture as part of Davis’ sentence.
According to the plea agreement, Davis carried out his fraud as follows:
He submitted false statements with loan documents in order to obtain approval for mortgage loans that would, otherwise, not have been approved. In many instances, Davis, while serving as closing attorney, would use his trust account to provide money to the borrower when a mortgage loan was closing. Davis would recover the money by subtracting the amount he provided from the proceeds he issued to the seller. Davis also would assess the seller a fee, ranging from $1,000 to $6,000, and make checks for the fee payable to Peaceful Valley Homes, a corporation he had formed. Total losses to the various lenders as a result of Davis’ fraud exceeded $1 million.
The FBI and the Department of Housing and Urban Development, Office of Inspector General, investigated the case. Assistant U.S. Attorney Robin Beardsley Mark prosecuted the case.
Former Alabama Corrections Officer Convicted of Federal Civil Rights Offenses and Obstruction of Justice for Beating Death of an InmateRead the Press Release
The Justice Department announced that yesterday a federal jury convicted Michael Smith, 38, a former corrections officer of the Alabama Department of Corrections, of two civil rights violations and five obstruction of justice-related violations in connection with the beating death of former inmate Rocrast Mack.
The incident occurred at Ventress Correctional Facility in Clayton, Ala., on Aug.4, 2010, and at the time of the incident, Smith was a lieutenant with supervisory authority over other officers on his shift. The jury convicted Smith of assaulting Mack with a baton in an office in the prison and of assaulting Mack again several minutes later in the medical unit by repeatedly stomping on Mack’s head. Mack died the following day in a Montgomery, Ala., hospital.
Scottie Glenn, another former corrections officer at Ventress, pleaded guilty on Nov.18, 2011, in U.S. District Court for the Middle District of Alabama to one count of violating the civil rights of Mack for his role in the incident and to one count of conspiring with other corrections officers to cover up the beatings. Matthew Davidson, another former corrections officer, pleaded guilty on Jan. 15, 2013, to two civil rights violations and one count of conspiring with other officers to cover up the beatings.
Smith was remanded to the custody of the U.S. Marshals Service pending sentencing. The sentencing hearing is yet to be scheduled. Smith faces a maximum potential penalty of life in prison.
"The jury found that defendant Smith, a high ranking official at Ventress Prison, violently caused the death of an inmate entrusted to his care,” said Deputy Assistant Attorney General for the Civil Rights Division Roy L. Austin Jr. “Through its verdict, the jury has vindicated the principle, enforced by the Department of Justice, that no person is above the law. We hope that today’s verdict brings some measure of solace to the family of Rocrast Mack.”
This case was investigated by the Mobile, Ala., Division of the FBI, in partnership with the Alabama Bureau of Investigation, and was prosecuted by Trial Attorney Patricia Sumner of the Justice Department’s Civil Rights Division and Assistant U.S. Attorney Jerusha Adams of the U.S. Attorney’s Office for the Middle District of Alabama.Federal Grand Jury in Fort Wayne Returns IndictmentRead the Press Release
Fort Wayne, INCThe United States Attorney's Office announced that a Grand Jury sitting in Fort Wayne, Indiana, returned the following Indictment on June 26, 2013:
Darnell Bontempo, 30, of Fort Wayne, Indiana was charged in a single count Indictment with being a violent felon in possession of body armor on or about May 31, 2013. This charge was filed as a result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Northeast Indiana Federal Bank Robbery Task Force. This case has been assigned to and will be prosecuted by Assistant United States Attorney Lesley J. Miller Lowery.
The United States Attorney's Office emphasized that an Indictment is merely an allegation 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 will be determined by the judge after a consideration of federal sentencing statutes and the Federal Sentencing Guidelines.
##END##Federal Escapee Sentenced for Drug Trafficking; Other ChargesRead the Press Release
ROCHESTER, N.Y.-- U.S. Attorney William J. Hochul, Jr. announced today that Joseph Mitchell, 36, of Rochester, N.Y., who was convicted of conspiracy to possess with intent to distribute and to distribute five kilograms or more of cocaine and 280 grams or more of cocaine base, possession of a firearm in furtherance of a drug trafficking crime, money laundering conspiracy and escape, was sentenced to 300 months in prison by U.S. District Judge Frank P. Geraci, Jr.
Assistant U.S. Attorney Jennifer Noto, who handled the case, stated that the Joseph Mitchell participated in a drug trafficking conspiracy along with his two younger brothers, Jamar and Jerrod Mitchell. According to the government’s investigation, between 2008 and March 2011, the defendant was responsible for the large scale distribution of significant quantities of cocaine and cocaine base in the Rochester and Elmira, N.Y. areas. Several search warrants executed at the time of the defendant’s arrest led to the recovery of over $500,000 in cash that had been secreted in a hidden trap in the base of a fish tank at Joseph Mitchell's residence, as well as a loaded handgun.
Joseph Mitchell was ordered detained pending trial on his narcotics charges. Thereafter, Mitchell orchestrated an elaborate jail escape, which involved multiple individuals and the smuggling of contraband into the Monroe County Jail, including a cellular telephone and saw blades that were secreted inside the binding of a bible. Mitchell utilized the saw blades to cut the jail bars on the window of his cell and ultimately escaped with another inmate, Eddie Palmer, by breaking the exterior window and jumping to the ground.
Law enforcement captured Mitchell approximately one week after his escape in the area of Sodus, Wayne County. The individuals who assisted Mitchell in his escape were also arrested and convicted federally, including Eddie Palmer, Lakesia Binion, and Mathias Smith.
In sentencing the defendant to 25 years in prison, Judge Geraci referred to Joseph Mitchell a "drug kingpin," who "poisoned the community" with large amounts cocaine. Judge Geraci also admonished the defendant for involving his two younger siblings in his drug trafficking activities. Jerrod and Jamar Mitchell are schedule to be sentenced on July 2, 2013. Palmer, who has been convicted of assisting in the escape, will be sentenced on July 9, 2013.
The sentencing is the culmination of an investigation on the part of Special Agents of the Drug Enforcement Agency, under the direction of Special Agent in Charge Brian R. Crowell, New York Field Division, officers of the Rochester Police Department, under the direction of Chief James Sheppard, the United States Marshals Service, under the direction Marshal Charles Salina and investigators of the Monroe County Sheriff's Office under the direction of Sheriff Patrick O'Flynn.Executive Director of Non-Profit Pleads Guilty to Wire Fraud, Admits Using More Than $200,000 in Grants for Personal Use- Used Money Meant for Youth Programs for Gambling, Other Personal Expenses-Read the Press Release
WASHINGTON - Keely E. Thompson Jr., 47, executive director of Keely’s District Boxing and Youth Center, pled guilty today to a federal charge of wire fraud stemming from a scheme in which he spent District of Columbia and private grant funds, meant for youth programs and activities, on personal goods, entertainment, and services.
The guilty plea was announced by U.S. Attorney Ronald C. Machen Jr., Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office, and Charles J. Willoughby, Inspector General for the District of Columbia.
Thompson, of Accokeek, Md., entered the plea in the U.S. District Court for the District of Columbia. The Honorable Emmet G. Sullivan scheduled sentencing for Oct. 9, 2013. The charge carries a statutory maximum of 20 years in prison as well as financial penalties. Under federal sentencing guidelines, the parties have agreed that the applicable range for the offense is a prison term of 27 to 33 months and a fine between $6,000 and $60,000. The plea agreement calls for Thompson to pay $205,000 in restitution to the entities that granted the misspent funds. It also calls for the forfeiture of a money judgment in the amount of at least $205,000.
According to a statement of offense, signed by the defendant as well as the government, Keely’s District Boxing and Youth Center was a non-profit organization based at locations in Northwest and Northeast Washington. The operations were funded with grant money. The funds were to be used to carry out the boxing program’s mission of promoting youth development.
Thompson admitted improperly using $205,000 in funds. The spending included $105,000 for gambling at a casino in Atlantic City, N.J. and on a cruise ship; $50,000 for meals at restaurants, purchases at grocery stores, concerts, speeding tickets and clothing, and an additional $50,000 on other unauthorized expenditures.
“Keely Thompson squandered tax dollars, meant to help children, at the casino,” said U.S. Attorney Machen. “He lied to secure public and charitable funds that he stole for his own frivolous entertainment. This case echoes the message we have delivered time and time again - criminals who rob the taxpayers to satisfy their own greed will be pursued and prosecuted to the fullest extent of the law.”
“Today, Mr. Thompson admitted to taking money meant to improve the lives of youth in the District of Columbia and instead using it to finance his own lifestyle,” said Assistant Director in Charge Parlave. “Such corrupt behavior is unacceptable, and those who commit such acts will be held accountable."
Thompson was arrested in November 2010 and has been free on personal recognizance while the case remained pending. In November 2012, a federal grand jury returned an indictment charging him and his wife, Bianca Thompson, the non-profit’s deputy director, with wire fraud and other offenses. The plea agreement in Keely Thompson’s case calls for the indictment against Bianca Thompson to be dismissed at the time of his sentencing.
In announcing the plea, U.S. Attorney Machen, Assistant Director in Charge Parlave, and Inspector General Willoughby commended the efforts of those who worked on the case from the FBI’s Washington Field Office and the District of Columbia Inspector General’s Office. They also expressed appreciation for those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialists Nicole Wattelet, Krishawn Graham and Diane Hayes, and Victim/Witness Advocate Yvonne Bryant, and Jelahn Stewart, Chief of the Victim Witness Assistance Unit. Finally, they praised the work of Assistant U.S. Attorneys Seth B. Waxman and Lionel André, who are prosecuting the case.
13-229East St. Louis Woman Sentenced for Cocaine DistributionRead the Press Release
Shannan C. Lynch, 44, of East Saint Louis, IL, was sentenced on June 26, 2013, in federal district court, in East St. Louis, on one count of possession with intent to distribute cocaine, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today.
Lynch was sentenced to 18 months in prison. When she completes her prison sentence, she will then be placed on supervised release for three years. Lynch, who previously pled guilty on February 27, 2013, to possessing 6 ounces of cocaine in East St. Louis on November 30, 2011. At her change of plea hearing in February, Lynch admitted that she had intended to sell the cocaine which police seized from inside Lynch’s shirt. Police also seized a digital scale from Lynch.
A co-defendant of Lynch, Lucille G. Brim, was sentenced on June 19, 2013, to 57 months in prison for the same offense.
The investigation which resulted in Lynch’s conviction was conducted by the Metropolitan Enforcement Group of Southwestern Illinois, the St. Clair County Sheriff’s Office, and the Drug Enforcement Administration.
The case was prosecuted by Assistant United States Attorney Robert L. Garrison.
Disbarred Canadian Attorney Pleads Guilty to Unclaimed Funds Fraud Scheme in CincinnatiRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
CINCINNATI – L. Gino Boggia, 63, of Quebec, Canada pleaded guilty in U.S. District Court to engaging in a scheme to defraud a local bank in connection with dormant bank account funds.
Carter M. Stewart, United States Attorney for the Southern District of Ohio and Kevin R. Cornelius, Special Agent in Charge, Federal Bureau of Investigation Cincinnati Field Office (FBI) announced the plea entered today before Chief U.S. District Judge Susan Dlott.
According to court documents, Boggia is a disbarred Canadian attorney who engaged in two related fraud schemes in the Southern District of Ohio to attempt to fraudulently acquire funds of dormant, unclaimed bank accounts that have been escheated (turned over) to the state of Ohio by financial institutions.
In the first scheme in May 2003, Boggiafalsely claimed to represent the account holder who was hospital-bound and in urgent need of surgery with life-threatening injuries. Further investigation found that the client Boggia claimed to represent had died 20 years earlier. In the second scheme Boggiafalsely claimed to represent a creditor of the account holder who was seeking to obtain a judgment against the account holder.
Like the first scheme, the attempted fraud was discovered before any funds were paid out. The amount of dormant account funds Boggia fraudulently attempted to obtain in this second scheme, which included the amount the dormant funds plus claimed accrued interest over several years, totaled $1,310, 670.06.
Boggia was indicted in Cincinnati in 2007. He was extradited from Canada earlier this year following completion of a sentence there on similar charges.
Boggia pleaded guilty to one count of bank fraud. The plea agreement includes an agreed-to sentence of 60 months incarceration. The agreed sentence also proposes to resolve a pending supervised release violation arising out of Boggia’s prior federal conviction in 2001 for a similar fraud in the Southern District of California. Boggia also agrees to pay restitution of $247,159.25 representing the loss caused by Boggia’s conduct in a similar scheme in Pennsylvania. The court will review the plea agreement before making a decision on whether or not to accept the terms.
U.S. Attorney Stewart commended the investigation by the FBI and Senior Litigation Counsel Anne Porter, who is representing the United States in the case.
Dancing Bull Fischer Pleads Guilty to Second Degree Murder and Assault with Intent to Commit MurderRead the Press Release
United States Attorney Brendan V. Johnson announced that Dancing Bull Fischer, age 24, of Wagner, South Dakota appeared before U.S. District Judge Karen E. Schreier on June 26, 2013 and pled guilty to the charges of Second Degree Murder and Assault with Intent to Commit Murder.
The maximum penalty upon conviction is life imprisonment, a $250,000 fine, or both; 5 years of supervised release; and $100 to the Federal Crime Victims Fund.
The conviction stems from an incident that took place on November 27, 2012 when Dancing Bull Fischer shot Anthony Fischer, Sr. at close range killing him, and also shot and wounded Dominic Fischer while at a house party in the Wagner area.
The investigation was conducted by the Yankton Sioux Tribe Law Enforcement Services, Bureau of Indian Affairs Law Enforcement Services, the South Dakota Division of Criminal Investigation, and the Federal Bureau of Investigation. The case is being prosecuted by Assistant U.S. Attorney Thomas J. Wright.
A presentence investigation was ordered and a sentencing date has been set for September 23, 2013. The defendant remains in the custody of the U.S. Marshal pending sentencing.
Dallas Man Who Trafficked in Counterfeit Pharmaceutical Drugs Is Sentenced to 37 Months in Federal Prison and Ordered to Pay $633,000 in RestitutionRead the Press Release
DALLAS — Charles Anthony Jones, 48, of Dallas, was sentenced today by U.S. District Judge Barbara M. G. Lynn to 37 months in federal prison and ordered to pay $633,019 in restitution to Pfizer, Bayer and Eli Lilly for trafficking in counterfeit pharmaceutical drugs. Specifically, Jones pleaded guilty in November 2012 to one count of aiding and abetting the trafficking of counterfeit goods. Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
According to plea papers filed in the case, on March 2, 2012, an undercover police officer texted Jones and asked Jones if he could meet him the following week in the neighborhood of a hotel in Irving, Texas. (Jones had previously sold the undercover officer pharmaceutical drugs to treat erectile dysfunction.) On March 6, 2012, the officer texted Jones and arranged a meeting to purchase a 30-count bottle of “Cialis” the following day for $150. The next day, Jones delivered a bottle marked “Cialis” that contained 30 20mg tablets to the undercover officer in exchange for $150. The bottle was marked with what appeared to be the genuine Cialis trademark and the bottle was clearly marked “PRESCRIPTION ONLY MEDICINE.”
Jones has been in custody since his arrest on August 22, 2012, on an indictment alleging that he and other unnamed individuals imported pharmaceutical drug products and packaging that bore the trademarks of certain prescription pharmaceuticals used to treat erectile dysfunction without the drug manufacturer’s authorization, and then resold the drugs to the public using the Internet to facilitate the sales. Jones was never licensed by the FDA or the Texas Health and Human Services Commission to distribute pharmaceutical drugs.
The investigation was conducted by the Food and Drug Administration (FDA) Office of Criminal Investigations (FDA-OCI) and the Irving Police Department. Assistant U.S. Attorney Jason Schall was in charge of the prosecution.
Dallas Man Sentenced to 60 Months in Federal Prison for Possessing Child PornographyRead the Press Release
FORT WORTH, Texas — Robert A. Steffens, 60, of Dallas, was sentenced today by U.S. District Judge Terry R. Means to 60 months in federal prison, following his guilty plea in November 2012 to one count of possession of child pornography. Judge Means ordered that Steffens surrender to the Bureau of Prisons on July 22, 2013. Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
According to documents filed in the case, last summer, a laptop computer containing child pornography was turned in to the Fort Worth Police Department. It was determined that the laptop belonged to Steffens. Pursuant to a search warrant, the contents of the laptop were searched and child pornography was found.
In late August 2012, after being contacted by law enforcement, Steffens met with an officer at the Fort Worth Police Department and brought another laptop computer and external drive with him to the meeting. After obtaining a state search warrant for both, a forensic examination revealed both items contained child pornography. Steffens admitted that he had sought out child pornography on the Internet using search terms. He also admitted that he had deleted the images on the laptop and the external drive before bringing them in to the officer.
The case was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”
The investigation was conducted by the Fort Worth Police Department, with assistance from U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI).
Assistant U.S. Attorney Aisha Saleem prosecuted.
Cleveland Heights Man Sentenced to 30 Years in Prison for Bank RobberiesRead the Press Release
A Cleveland Heights man was sentenced to 30 years in priso for seven counts bank robberies and attempting an eighth last year said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, and Stephen D. Anthony, Special Agent in Charge of the Federal Bureau of Investigation’s Cleveland office.
Kevin Walcott, age 40, previously plead guilty to the seven counts of bank robbery and one count of attempted bank robbery. He got nearly $13,000 from the robberies on the East Side of Cleveland, according to court documents.
“This defendant robbed more than a half-dozen banks during a month-long spree,” Dettelbach said. “Each of these incidents put people at risk.”
Anthony said: “The valuable partnership between the public, local law enforcement and the FBI helped put a stop to this string of bank robberies. The FBI commends the attentive citizens that assisted in bringing Kevin Walcott to justice.”
The robberies (all in 2012) are as follows:
Oct. 26: Dollar Bank, 2200 Warrensville Center Road, University Heights, $2,470.
Nov. 1: Ohio Savings Bank, 2066 Lee Road, Cleveland Heights, $690.
Nov. 2: PNC Bank, 10900 Lorain Road, Cleveland, $2,194.
Nov. 5: Citizens Bank, 5710 Mayfield Road, Lyndhurst, $1,021.
Nov. 8: Key Bank, 911 East 185th Street, Cleveland, $3,660.
Nov. 13: Huntington Bank, 920 East 185th Street, Cleveland, $800.
Nov. 15: Huntington Bank, 20601 Fairmount Blvd., Shaker Heights, $2,069.
Attempted: Nov 21: PNC Bank, 20711 Chagrin Blvd. Shaker Heights.
Walcott was arrested shortly after the attempted robbery of PNC Bank. According to court documents, Shaker Heights police found a handwritten note on him that read, in part: “I have a Gun and a Police Radio If I SEE Police or hear the ALARM you Die First If I don’t make it out you Die First Give me all your 100.00 Both Drawer’s 50.00 20.00 I sEE Bait MonEY 10.00 you Die.”
This case was prosecuted by Assistant United States Attorneys Margaret A. Sweeney and Phillip J. Tripi, following investigation by the Federal Bureau of Investigation and Shaker Heights Police Department.
Carlos Danilo Menjivar-Rojas Sentenced in U.S. District CourtRead the Press Release
The United States Attorney's Office announced that during a federal court session in Billings, on June 26, 2013, before U.S. District Judge Donald W. Molloy, CARLOS DANILO MENJIVAR-ROJAS, a 37-year-old resident of Riverton, Wyoming, was sentenced to a term of:
Prison: 168 months
Special Assessment: $100
Supervised Release: 5 years
MENIJIVAR-ROJAS was sentenced in connection with his guilty plea to conspiracy to possess with the intent to distribute methamphetamine.
In an Offer of Proof filed by Assistant U.S. Attorney Jessica T. Fehr, the government stated it would have proved at trial the following:
In the spring of 2011, Eastern Montana HIDTA agents began performing electronic surveillance on MENIJIVAR-ROJAS (a/k/a "Chico"), an El Salvador National living in Billings. MENIJIVAR-ROJAS previously resided in northern California.
In June of 2011, MENIJIVAR-ROJAS was arrested for immigration violations. In early August of 2011, MENIJIVAR-ROJAS posted a bond to be released from ICE custody and returned to Billings.
In May of 2011, law enforcement learned the identity of several individuals that were distributing methamphetamine for MENIJIVAR-ROJAS. One individual interviewed by law enforcement admitted to selling methamphetamine for MENIJIVAR-ROJAS for three or four months. This individual saw MENIJIVAR-ROJAS with 8 or 9 pounds of methamphetamine in coffee cans in the back of his black Cadillac. MENIJIVAR-ROJAS charged the individual $1,200 for an ounce of methamphetamine. Additional witnesses linked MENIJIVAR-ROJAS to the distribution of numerous pounds of methamphetamine. Law enforcement corroborated the information about the individuals distributing for MENIJIVAR-ROJAS through searches of cellular telephones, recorded jail calls, and controlled purchases of methamphetamine.
When MENIJIVAR-ROJAS was arrested for immigration violations, his wife Dawn Menjivar and Armando Hernandez-Vaca continued to distribute methamphetamine to his sources and to collect drug debts on his behalf. Between the time of his arrest and the time of his release, MENIJIVAR-ROJAS was in daily contact with Dawn Menjivar. MENIJIVAR-ROJAS was giving Dawn Menjivar directions on who to collect money from, as well as who to "deal with."
Law enforcement learned through the investigation that MENIJIVAR-ROJAS distributed methamphetamine in Billings from May 2010 until late January of 2012. The conspiracy involved over 500 grams of methamphetamine.
Dawn Menijivar and Hernandez-Vaca pled guilty to federal charges.
Because there is no parole in the federal system, the "truth in sentencing" guidelines mandate that MENIJIVAR-ROJAS will likely serve all of the time imposed by the court. In the federal system, MENIJIVAR-ROJAS does have the opportunity to earn a sentence reduction for "good behavior." However, this reduction will not exceed 15% of the overall sentence.
The investigation was conducted by the Billings Big Sky Safe Streets Task Force.
Buffalo Man Pleads Guilty to Drug Conspiracy ChargeRead the Press Release
BUFFALO, N.Y.-- U.S. Attorney William J. Hochul, Jr. announced today that Juan Montanez, 47, of Buffalo, NY., pleaded guilty before U.S. District Chief Judge Richard J. Arcara, to conspiracy to distribute, and to possess with intent to distribute, heroin and cocaine. The charge carries a maximum penalty of 20 years in prison, a $1,000,000 fine, or both.
Assistant U.S. Attorney Mary Catherine Baumgarten, who is handling the case, stated that Montanez was one of three defendants arrested on March 6, 2012 after law enforcement officers executed a search warrant at a residence in Buffalo. Officers seized heroin, cocaine, ammunition, and drug paraphernalia.
Defendant Erick Joel Reyes Barretto was convicted of conspiracy to possess with intent to distribute heroin and cocaine and was sentenced to 60 months in prison in April 2013. Pascual Giovanny Navarro Gonzalez is scheduled to go to trial on August 6, 2013.
The sentencing is the culmination of an investigation on the part of Drug Enforcement Administration, under the direction of Special Agent in Charge Brian R. Crowell, New York Field Division, the Erie County Sheriff’s Department, under the direction of Sheriff Timothy Howard, and the Ohio State Highway Patrol, under the direction of Colonel John Born.
Sentencing is scheduled for October 4, 2013 at 1:00 p.m. before Judge Skretny.Beaver Falls Man Facing Child Pornography ChargesRead the Press Release
PITTSBURGH - A resident of Beaver Falls, Pa., has been indicted by a federal grand jury in Pittsburgh on charges of distribution and possession of material depicting the sexual exploitation of a minor, United States Attorney David J. Hickton announced today.
The three-count indictment, returned on June 25, named Darren Johnson, 43, as the sole defendant.
According to the indictment, on or about March 22, 2013 and March 28, 2013, Johnson knowingly distributed visual depictions of minors engaged in sexually explicit conduct by computer. The indictment also alleges that, on or about April 26, 2013, Johnson possessed visual depictions, namely, images and videos in computer graphics files, the production of which involved the use of minors engaging in sexually explicit conduct.
The law provides for a total sentence of not less than five years and not more than 30 years in prison, a fine of $500,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Amy L. Johnston is prosecuting this case on behalf of the government.
The Pennsylvania Office of Attorney General and the Federal Bureau of Investigation conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Barceloneta Contractor Carlos Bolet Alvarez Pleads Guilty to Misprision of FelonyRead the Press Release
SAN JUAN, P.R. – Today, Carlos Bolet Álvarez, a former contractor with the Municipality of Barceloneta pled guilty to a one count Information charging misprision of a felony before the Magistrate Judge Silvia Carreño-Coll, announced Rosa Emilia Rodríguez-Vélez, United States Attorney for the District of Puerto Rico. As a result of the failure to report an extortion of payment to the Mayor of Barceloneta the defendant could face up to 3 years in prison and a $250,000 fine. The sentencing was scheduled for October 25, 2013 at 9:30 am.
From May 2011 through June 2011, Bolet had contracts in place for the rental of heavy equipment with the Municipality of Barceloneta and therefore was under an obligation to report any bribes, kickbacks or illegal payments that were made. From on or about May 16, 2011 and continuing through June 10, 2011, Bolet, having knowledge of the actual commission of a felony cognizable by a court of the United States, specifically, an extortion payment of $40,000 solicited at the urging of the Mayor of the Municipality from Bolet, by actual or threatened use of fear and under the color of official right in violation of 18 U.S.C. §1951, knowing he was under an obligation to report the same, accepted further payments from the Municipality of Barceloneta pursuant to said contract involving federal funds and did not report the payment to some judge or other law enforcement authority.
“We will continue to prosecute public officials and contractors whose conduct undermines the public's trust in federal, state and municipal government,” said US Attorney Rosa Emilia Rodríguez-Vélez. “Moreover, this case serves as an important reminder that even the failure to report a bribe may subject officials and contractors to criminal prosecution.”This case is being prosecuted by Senior Litigation Counsel, Charles R. Walsh and was investigated by the FBI.
Atlanta Tax Return Preparer Sentenced for Filing False Tax ReturnsRead the Press Release
Defendant Filed False Tax Returns Claiming Over $1.2 Million in Bogus Refunds
ATLANTA – Eugene Gibbons was sentenced today to serve over three years in federal prison for filing false tax returns that claimed over $1.2 million in fraudulent refunds.
“This defendant’s persistence in filing fraudulent tax returns despite knowing the consequences does not compare to the persistence of law enforcement in seeing through his lies and requiring him to face justice for his fraud,” said United States Attorney Sally Quillian Yates.
“At the IRS, protecting taxpayer money is a matter we take extremely serious,” stated Veronica Hyman-Pillot, Special Agent in Charge, IRS Criminal Investigation. “An integral part of the agency’s mission involves detecting and catching fraudulent refund claims. We identified and investigated the filing of false tax returns submitted by Eugene Gibbons, and as a result of his actions, he will serve time in jail.”
According to United States Attorney Yates, the charges and other information presented in court: Gibbons prepared fraudulent federal income tax returns at a tax preparation business named C&M Tax Service from 2002 through 2009. On the tax returns, Gibbons claimed fraudulent deductions, expenses, and credits, which resulted in his clients receiving fraudulent refunds. Gibbons then received monetary fees from those clients who he helped obtain fraudulent refunds. In total, Gibbons prepared tax returns claiming over $1.2 million in false and fraudulent refunds.
Gibbons admitted that he started filing fraudulent tax returns shortly after he was released from prison where he was serving a sentence for a previous conviction for filing false federal tax returns.
Gibbons, 65, of Atlanta, Ga., was sentenced today by United States District Judge Willis B. Hunt, Jr. to three years, six months in prison to be followed by two years of supervised release. He was also ordered to pay $1,286,486.50 in restitution to the United States Treasury. Gibbons pleaded guilty on July 31, 2012, to two counts of aiding and abetting in the preparation of false tax returns.
This case is being investigated by Special Agents of the Internal Revenue Service Criminal Investigation.
Assistant United States Attorneys Thomas J. Krepp and Steven D. Grimberg are prosecuting the case.
For further information please contact the U.S. Attorney’s Public Information Office at [email protected] or (404) 581-6016. The Internet address for the HomePage for the U.S. Attorney’s Office for the Northern District of Georgia is www.justice.gov/usao/gan.
Another Pharmacist at Grapevine Drug Mart Is Sentenced on Income Tax Evasion ConvictionRead the Press Release
FORT WORTH, Texas — Joseph Moss has been sentenced to one year and one day in federal prison and ordered to pay a $3000 fine and $51,150 in restitution following his guilty plea in January 2013 to one count of income tax evasion, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
Moss, according to the factual resume filed in the case, is a licensed pharmacist who worked as a pharmacist for Grapevine Drug Mart, a family-owned and operated pharmacy in Grapevine, Texas. He received quarterly and weekly payments of income drawn on Grapevine Drug Mart’s business bank accounts. The quarterly payments were generally received three to five times per year and varied in amounts ranging from $20,000 to $100,000. Each of the quarterly payments were made payable to Moss enterprises, a dba Moss established, and deposited into Moss Enterprises’ business bank account. The weekly payments were much smaller in amount and were made payable to Moss via check. From October 2006 through December 2008, Moss cashed these weekly checks made payable to himself and thus not reported on his income tax return.
The factual resume further states that in October 2009, Moss timely filed his federal income tax return but attempted to evade the amount of federal income tax he owed by failing to report approximately $159,450 that he had received from Grapevine Drug Mart for the 2008 tax year. As a result, Moss had an additional tax due and owing of $58,554 for the 2008 tax year.
Joseph Moss’s father, Norvell Moss, was sentenced last month to 18 months in federal prison for the same offense. He was ordered to pay a $30,000 fine and an additional $8,277 in restitution to go along with the more than $94,000 he had paid prior to sentencing.
According to the public court record, two other defendants affiliated with Grapevine Drug Mart were recently convicted in the Northern District for tax-related felony offenses. Larry Lake, also a Colleyville resident and a part-owner of Grapevine Drug Mart, was convicted by a federal jury in Fort Worth in February 2013 on concealment of assets (bankruptcy fraud) and three counts of tax evasion. His son, Travis Lake, who managed Grapevine Drug Mart, pleaded guilty that same month to an indictment charging three counts of fraud and false statements in connection with tax returns he filed for tax years 2006, 2007 and 2008. Both Larry Lake and Travis Lake are scheduled to be sentenced in mid-July 2013.
The cases were investigated by Internal Revenue Service Criminal Investigation. Assistant U.S. Attorney Brian Poe and Tax Division Trial Attorney Robert A. Kemins are in charge of the prosecutions.
$20+ Million ‘Black Market Peso Exchange’ Scheme Sends Several to PrisonRead the Press Release
HOUSTON – One of the leaders and several members of an organization that laundered more than $20 million through “shell” business bank accounts has now been ordered to federal prison, United States Attorney Kenneth Magidson announced today along with Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division.
Enrique Morales, 43, of Houston and Guadalajara, Mexico, pleaded guilty to conspiracy to commit money laundering and conspiracy to operate an unlicensed money transmitting business earlier this year as did Willie Whitehurst, 45, Fulton Smith, 41, and Anthony Foster, 47, all from Houston and money couriers for the organization. Sarah Combs, 49, of Dickinson, pleaded guilty to conspiracy to operate an unlicensed money transmitting business.
Today, U.S. District Judge U.S. District Judge Lee H. Rosenthal, who accepted the guilty pleas, sentenced Morales, determined to be a leader in the conspiracy, to 188 months in prison. Foster received a sentence of 121 months, while Smith and Combs received total prison terms of 30 and 24 months, respectively. Whitehurst is scheduled to be sentenced on August 26.
In August 2012, a federal grand jury in Houston indicted the five defendants for their parts in a large “Black Market Peso Exchange” scheme. From October 2009 to September 2011, the defendants placed U.S. currency gained through the sale of drugs in U.S. cities into bank accounts held in the name of the organization’s “shell” companies. The money then was transferred to different accounts in the U.S. and in Mexico. In exchange, pesos were transferred back to accounts owned by the organization’s clients.
Smith, Combs and Foster were permitted to remain on bond and voluntarily surrender to a U.S. Bureau of Prisons facility to be determined in the near future.
Morales will remain in custody.
The case was investigated by the Drug Enforcement Administration and Internal Revenue Service – Criminal Investigation. Assistant United States Attorney Ted Imperato of the Southern District of Texas and Trial Attorney Keith Liddle of the Money Laundering and Bank Integrity Unit of the Criminal Division’s Asset Forfeiture and Money Laundering Section are prosecuting the case.