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Tuesday 25 June 2013
Former HUD Director Sentenced on Fraud and Bribery ChargesRead the Press Release
St. Louis, MO - Former HUD director Lavern Charles Hester was sentenced to 18 months in prison and 2 years of supervised release.
According to court documents, Charles Hester was employed by HUD as Director of Multifamily in the St. Louis field office. He was responsible for approving and overseeing the FHA financing of multi-family properties. In June 2007, Donald Robinson and Crevonda Cramer purchased a HUD subsidized multi-family property known as Chevy Chase Apartments located in Mexico, MO, through a company New Beginnings Redevelopment II, LLC. Between June 2007 and December 2008, Hester accepted $38,000 in payments from Robinson and Cramer to facilitate Hester’s approval of a $1.5 million FHA insured refinancing of the mortgage on Chevy Chase Apartments, as well as the release of construction funds associated with the rehab of Chevy Chase.
CHARLES HESTER, Florissant, MO, pled guilty last September to one felony count of conspiracy to provide and accept an illegal gratuity. He appeared today for sentencing before United States District Judge John A. Ross.
Co-defendant Donald Robinson pled guilty to related charges and was sentenced today to six months in jail, plus six months home confinement.
This case was investigated by the U.S. Department of Housing and Urban Development, Office of the Inspector General. Assistant United States Attorney Stephen Casey is handling the case for the U.S. Attorney’s Office.Former Executive at Florida-Based Lender Processing Services Inc. Sentenced to Five Years in Prison for Role in Mortgage-Related Document Fraud SchemeRead the Press Release
A former executive of Lender Processing Services Inc. (LPS) – a publicly traded company based in Jacksonville, Fla. – was sentenced today to serve five years in prison for her participation in a six-year scheme to prepare and file more than 1 million fraudulently signed and notarized mortgage-related documents with property recorders’ offices throughout the United States, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney for the Middle District of Florida Robert E. O’Neill and Special Agent in Charge Michelle S. Klimtof the FBI Jacksonville Division.
Lorraine Brown, 56, of Alpharetta, Ga., was sentenced by Senior U.S. District Judge Henry Lee Adams Jr. in the Middle District of Florida. In addition to her prison term, Brown was sentenced to serve two years of supervised release and ordered to pay a fine of $15,000.On Nov. 20, 2012, Brown pleaded guilty to conspiracy to commit mail and wire fraud.“Lorraine Brown will spend five years in prison for her central role in a scheme to fraudulently execute thousands of mortgage-related documents while our nation’s housing market was at its most vulnerable point in generations,” said Acting Assistant Attorney General Raman. “The documents that were fraudulently produced under Brown’s direction were relied upon in court proceedings, including a significant number of foreclosure and bankruptcy matters. Today’s sentencing represents appropriate punishment for someone who sought to capitalize on the nation’s housing crisis.”
“Floridians were hard hit by the downturn in the real estate market,” said U.S. Attorney O’Neill. “We will continue to pursue individuals like Brown who took advantage of consumers for personal gain and contributed to the financial crisis. Prosecuting financial crimes remains a priority for our office.”
“The investigation of sophisticated mortgage and corporate fraud schemes continues to be a priority for the Federal Bureau of Investigation as such criminal activities have a significant economic impact on our community,” said Special Agent in Charge Klimt.
Brown was an executive at LPS and the chief executive of DocX LLC, which was a wholly-owned subsidiary of LPS, until it was closed down in early 2010. DocX’s main clients were residential mortgage servicers, which typically undertake certain actions for the owners of mortgage-backed promissory notes. Servicers hired DocX to, among other things, assist in creating and executing mortgage-related documents filed with recorders’ offices.
According to Brown’s plea agreement, employees of DocX, at the direction of Brown and others, began forging and falsifying signatures of authorized personnel on the mortgage-related documents that they had been hired to prepare and file with property recorders’ offices. Only specific personnel at DocX were authorized by clients to sign the documents, but the documents were fraudulently notarized as if actually executed by authorized DocX employees.
According to plea documents, Brown implemented these signing practices at DocX to enable DocX and Brown to generate greater profit. Specifically, DocX was able to create, execute and file larger volumes of documents using these signing and notarization practices. To further increase profits, DocX also hired temporary workers to act as authorized signers. These temporary employees worked for much lower costs and without the quality control represented by Brown to DocX’s clients. Some of these temporary workers were able to sign thousands of mortgage-related instruments a day. Between 2003 and 2009, DocX generated approximately $60 million in gross revenue.After these documents were falsely signed and fraudulently notarized, Brown authorized DocX employees to file and record them with local county property records offices across the country. Many of these documents were later relied upon in court proceedings, including property foreclosures and federal bankruptcy actions. Brown admitted she understood that property recorders, courts, title insurers and homeowners relied upon the documents as genuine.
This case is being prosecuted by Trial Attorney Ryan Rohlfsen and Assistant Chief Glenn S. Leon of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Mark B. Devereaux of the U.S. Attorney’s Office for the Middle District of Florida. This case was investigated by the FBI, with assistance from the state of Florida’s Department of Financial Services.
This case is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF), which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov
Former DOJ Attorney Sentenced to Ten Years ForAttempt to Entice A Minor to Engage in Criminal Sexual ActivityRead the Press Release
Karl Norman Gellert, 48, of Bellevue, Tennessee was sentenced Friday in U.S. District Court in Nashville to Attempt to Entice a Minor to Engage in Criminal Sexual Activity, announced David Rivera, Acting U.S. Attorney for the Middle District of Tennessee.
Chief Judge William Joseph Haynes, Jr. sentenced Gellert to 10 years of incarceration, to be followed by 20 years of supervised release during which time he will be required to register as a sex offender and participate in sex offender treatment, among other conditions.
“The U.S. Attorney’s office is committed to protecting our children who are powerless from protecting themselves from sexual predators,” said Acting U.S. Attorney David Rivera. “No one is above the law and no one gets a pass, we will pursue the evidence to wherever it leads.”
According to the plea agreement, in early April of 2012, Gellert communicated online with an undercover agent whom he believed to be an eleven year old girl who had never engaged in sexual activity with anyone. Gellert’s communication involved chess, his family, school, relationships, and sex. During multiple online conversations, he provided instructions on how to engage in sexual activities and transmitted images of himself engaging in such activity, as well as images of adult pornography, and a link to a website for sexual devices. He asked if she would be interested in engaging in sexual activity with him in person and encouraged her to engage in sexual activity in preparation for his visit. After communicating online numerous times with this individual whom he believed to be an eleven year old girl, he began also engaging in online discussions with whom he believed to be the child’s mother, but who was the same undercover agent. He also instructed the person whom he believed to be the child’s mother about what do to prepare this child for his sexual abuse of her. The communication continued through early June of 2012.
Prior to engaging in this illegal activity, Gellert had been an attorney with the Department of Justice in Washington, D.C. through 2009.
This matter was investigated by the Metropolitan Nashville Police Department, the Federal Bureau of Investigation, and the United States Attorney’s Offices for the Middle District of Tennessee and the Eastern District of Virginia. The United States was represented by Assistant U.S. Attorneys S. Carran Daughtrey and Alicia Yass.Florida Investment Fund Manager Pleads Guilty in Manhattan Federal Court in Connection with $13 Million Securities Fraud SchemeRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that CRAIG L. BERKMAN pled guilty today in Manhattan federal court to securities fraud and wire fraud in connection with a more than $13 million scheme to defraud investors through false ownership claims of stock in Facebook, Inc. (“Facebook”); Groupon, Inc. (“Groupon”); LinkedIn, Inc. (“LinkedIn”); and Zynga, Inc. (“Zynga”) before their respective initial public offerings, and in other private companies. BERKMAN was arrested in March 2013 in connection with the scheme, and pled guilty today before United States Magistrate Judge Kevin Nathaniel Fox.
Manhattan U.S. Attorney Preet Bharara stated: “Through various misrepresentations, Craig Berkman enticed investors with highly coveted investment opportunities, and then swindled them out of millions of dollars, using much of it for his personal benefit. Today’s guilty plea ensures that he will be held to account for his conduct.”
According to the charging instruments in this case and statements made in open court today at the plea proceeding:
From 2010 until his arrest in March 2013, BERKMAN served as the managing member of a series of limited liability companies, which he effectively controlled, including Face-Off Acquisitions, LLC; Assensus Capital, LLC; and several LLCs with variations of the words “Ventures Trust” in their names (the “Ventures Trust LLCs”). Beginning in about October 2010, BERKMAN and others offered investors the opportunity to purchase units of each of these LLCs. In doing so, BERKMAN misrepresented to investors that the LLCs either owned or would soon acquire pre-initial public offering shares in various technology companies, including Facebook, Groupon, LinkedIn, and Zynga. BERKMAN also misappropriated millions of dollars of investor funds for his own use and benefit.
The ways in which BERKMAN carried out his scheme often varied with each of the LLCs. In one instance, BERKMAN represented to investors that various Ventures Trust LLCs held large quantities of pre-IPO shares of Facebook, Groupon, LinkedIn, and Zynga. In fact, the Ventures Trust LLCs held no shares of Groupon, LinkedIn, or Zynga, and held only a small, indirect interest in pre-IPO Facebook shares. In another example, BERKMAN falsely told investors with Face-Off Acquisitions, LLC that their money would be used to purchase an existing special purpose vehicle, which already held a significant stake in Facebook. BERKMAN also misrepresented to Assensus Capital Investors, LLC investors that he would use their money to fund various start-ups, including technology, medical device, and energy companies, and that the investors’ funds would be partially secured by interests in pre-IPO Facebook stock. In fact, BERKMAN misappropriated most, if not all, of the investors’ money for his own use and benefit.
Ultimately, BERKMAN raised at least approximately $13.2 million in funds from more than 120 different investors, which he used for various unauthorized purposes. BERKMAN used approximately $6 million in stolen investor funds to pay off creditors in his personal bankruptcy, and in doing so, he misrepresented the source of those funds to the Bankruptcy Court. BERKMAN also used approximately $4.8 million of new investor money to pay off earlier investors, and spent approximately $1.6 million on legal fees, travel, other personal expenses, and in cash withdrawals, among other things.
BERKMAN, 71, of Odessa, Florida, pled guilty to one count of securities fraud and one count of wire fraud. He faces a maximum sentence of 20 years in prison on each count, a fine of the greater of $5 million or twice the gross gain or gross loss from the offense on the securities fraud charge, and a fine of a lesser amount on the wire fraud charge. In connection with his guilty plea, BERKMAN agreed to pay restitution to the victims of his offenses and consented to forfeit approximately $13.2 million. He will be sentenced before U.S. District Court Judge Shira A. Scheindlin on October 1, 2013.
Mr. Bharara praised the work of the Criminal Investigators of the U.S. Attorney’s Office and the United States Postal Inspection Service, which jointly investigated this case. He also thanked the U.S. Securities and Exchange Commission.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force, on which Mr. Bharara serves as a Co-Chair of the Securities and Commodities Fraud Working Group. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.StopFraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys John J. O’Donnell and Matthew L. Schwartz are in charge of the prosecution.
US v. Craig Berkman Information
Felon Sentenced to 4 Years in Prison for Possessing A FirearmRead the Press Release
JOHNSTOWN, Pa. - A resident of Johnstown, Pa., has been sentenced in federal court to 48 months in prison and three years supervised release on his conviction of violating federal firearms laws, United States Attorney David J. Hickton announced today.
United States District Judge Kim R. Gibson imposed the sentence on George A. Robinson, 22.
According to information presented to the court, on May 10, 2011, Robinson possessed a Taurus PT111 Millennium Pro 9mm pistol. On August 27, 2009, Robinson was convicted in Cambria Co., Pa., of criminal attempt burglary, which is a crime punishable by imprisonment for a term exceeding one year. Federal law prohibits persons who have been convicted of a crime punishable by a term of imprisonment exceeding one year from possessing firearms or ammunition.
Assistant U.S. Attorney Stephanie L. Haines prosecuted this case on behalf of the government.
According to Mr. Hickton, this case was prosecuted as part of Project Safe Neighborhoods initiative, a collaborative effort by federal, state and local law enforcement, agencies, prosecutors and communities to prevent, deter and prosecute gun crime.
Mr. Hickton commended the Laurel Highlands Resident Agency of the Federal Bureau of Investigation and the Johnstown Police Department for the investigation leading to the successful prosecution of Robinson.
Federal Jury Convicts Wethersfield Resident of Running Fraudulent Debt Elimination SchemeRead the Press Release
Deirdre M. Daly, Acting United States Attorney for the District of Connecticut, today announced that a federal jury in Hartford has found DEOWRAJ “DEO” BUDDHU, 70, formerly of Wethersfield, guilty of multiple charges related to his operation of a fraudulent debt elimination scheme. The trial before Chief United States District Judge Alvin W. Thompson began on June 5 and the jury returned its verdict this afternoon after deliberating for less than one hour.
“This defendant’s fictitious debt elimination scheme defrauded numerous struggling homeowners, many of whom were immigrants with little command of the English language,” stated Acting U.S. Attorney Daly. “He took thousands of dollars from his victims, knowing it would make their unsteady financial situation even worse, and used the funds to pay his own personal expenses. All distressed homeowners must steer clear of such schemes and seek legitimate assistance for financial difficulties. I want to thank IRS – Criminal Investigation and HUD-OIG for their work on this case, and our other law enforcement partners who are committed to prosecuting individuals who victimize individuals through financial fraud schemes.”
According to the evidence introduced during the trial and statements made during prior court proceedings, between February 2009 and June 2012, BUDDHU sold a debt elimination “program” to several vulnerable individuals through various businesses, including Paradise Consulting Service, Hema, Inc., and Secured Redemption. In exchange for substantial fees, BUDDHU told victims about a little-known government fund that could be used to pay off their mortgages and other debts. In fact, no such fund exists. BUDDHU advised victims to stop making payments on their mortgages and other debts, including property taxes. He also provided his victims with fictitious promissory notes, which he called “bonds,” as well as other frivolous documentation, which he told victims they could use to pay their debts. BUDDHU’s daughter, Sunita Buddhu, a licensed notary public, notarized documents provided to the victims as part of the program. Victims were directed to present the fraudulent promissory notes and other documentation to banks and other creditors.
By ceasing their mortgage payments and other obligations, BUDDHU’s victims ended up in foreclosure proceedings and are at risk of losing their homes and other assets.
BUDDHU also prepared and directed victims to file frivolous lawsuits, documents, motions, and other purported legal documents with the state courts in Connecticut and elsewhere.
The jury found BUDDHU guilty of six counts of mail fraud and seven counts of issuing, selling and presenting fictitious financial instruments. Chief Judge Thompson has scheduled sentencing for September 17, 2013, at which time BUDDHU faces a maximum term of imprisonment of 30 years on each count of mail fraud, and a maximum term of imprisonment of 25 years on each count of passing fraudulent financial instruments.
BUDDHU has been detained since his arrest on June 11, 2012.
On October 10, 2012, Sunita Buddhu, 43, pleaded guilty to one count of issuing, selling and presenting fictitious financial instruments. She has been detained since her arrest on June 13, 2012 and also awaits sentencing.
This matter was investigated by the Internal Revenue Service – Criminal Investigation and the U.S. Department of Housing and Urban Development – Office of Inspector General, with assistance from the Wethersfield Police Department.
The case is being prosecuted by Assistant United States Attorneys Lisa Perkins and Liam Brennan.
Today’s announcement is part of efforts underway by the President’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants.To report financial fraud crimes, and to learn more about the President’s Financial Fraud Enforcement Task Force, please visit www.stopfraud.gov.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
[email protected]Federal Jury Convicts Providence Man on Heroin TraffickingRead the Press Release
PROVIDENCE, R.I. –Cristian Jimenez, a/k/a Alacran, 32, of Providence, faces between ten years to life in federal prison at sentencing after a federal court jury on Monday convicted him of one count of conspiracy to possess and distribute heroin and three counts of possession and distribution of heroin, announced Unites States Attorney Peter F. Neronha, Richard DesLauriers, Special Agent in Charge of the FBI’s Boston Field Office; and John J. Arvanitis, Special Agent in Charge of the Drug Enforcement Administration’s New England Field Division.
Jimenez was one of eleven individuals identified by law enforcement as being members of a Dominican organization that trafficked heroin into Rhode Island. The other 10 individuals charged and arrested in this matter previously pled guilty in U.S. District Court in Providence.
The jury acquitted Jimenez of one count of possession of a firearm in furtherance of drug trafficking crimes.An investigation by the Federal Bureau of Investigation Safe Streets Gang Task Force, and the Drug Enforcement Administration Drug Task Force, Rhode Island State Police and local law enforcement officers assigned to the task forces resulted in the execution of federal search warrants and arrest warrants in May 2012 in Providence, Cranston, North Providence, Pawtucket, and West Warwick, R.I. More than three kilos of heroin, approximately 200 grams of cocaine, approximately $450,000 in cash, a substantial quantity of high-end jewelry, five firearms - four of them loaded, and twelve vehicles - several of which contained “hides” were seized by law enforcement.
According to the government’s evidence presented at trial, on numerous occasions Jimenez bought and sold significant quantities of heroin and directed the packaging and distribution of the drugs. The government’s evidence showed that Jimenez’s Providence residence was one of the primary locations used by the drug trafficking organization to package and distribute significant quantities of heroin.
Jimenez, who has been detained since his arrest on September 26, 2012, is scheduled to be sentenced by U.S. District Court Judge William E. Smith on September 13, 2013.
The case was prosecuted by Assistant U.S. Attorney Adi Goldstein and First Assistant U.S. Attorney Kenneth P. Madden.
The FBI’s Safe Streets Gang Task Force consists of agents and law enforcement officers from the FBI; Providence, Cranston and Woonsocket Police Departments and the Rhode Island National Guard.The DEA Drug Task Force consists of agents and law enforcement officers from the DEA, Rhode Island State Police, and the Cranston, East Providence, Pawtucket, Providence, Warwick, Newport, and Woonsocket Police Departments.
Agents from the U.S. Department of State Diplomatic Security Service and Internal Revenue Service Criminal Investigation also played significant roles in the investigation.
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To assist the media and the public, a glossary of federal judicial terms and procedures is available at http://www.justice.gov/usao/justice101/
Contact: 401-709-5357
[email protected]Federal Inmate Indicted in Pennsylvania for Murder of Correctional OfficerRead the Press Release
A federal grand jury in Scranton, Penn., returned an indictment today charging Jessie Con-Ui, a federal inmate, with the murder of federal corrections officer Eric Williams, the Justice Department announced.
Con-Ui, 36, was charged in U.S. District Court for the Middle District of Pennsylvania with one count of first degree murder, one count of first degree murder of a U.S. corrections officer and one count of possessing contraband in prison.
The indictment alleges that Con-Ui killed Williams on Feb. 25, 2013, in a premeditated attack at the Canaan Federal Correction Complex in Waymart, Penn. According to the indictment, Con-Ui stabbed Williams with a sharpened weapon and struck him repeatedly.
If convicted, Con-Ui faces a maximum penalty of death or life in prison.
The charges contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
The charges against Con-Ui resulted from an investigation by the FBI, with assistance from the Federal Bureau of Prisons. The case is being prosecuted by the Justice Department’s Criminal Division and the U.S. Attorney’s Office for the Middle District of Pennsylvania.
Federal Inmate Indicted in Pennsylvania for Murder of Correctional OfficerRead the Press Release
A federal grand jury in Scranton returned an indictment today charging Jessie Con-Ui, a federal inmate, with the murder of federal corrections officer Eric Williams, the Justice Department announced.
Con-Ui, 36, was charged in U.S. District Court in the Middle District of Pennsylvania with one count of first degree murder, one count of first degree murder of a U.S. corrections officer and one count of possessing contraband in prison.
The indictment alleges that Con-Ui killed Williams on Feb. 25, 2013, in a premeditated attack at the Canaan Federal Correction Complex in Waymart, Pennsylvania. According to the indictment, Con-Ui stabbed Williams with a sharpened weapon and struck him repeatedly.If convicted, Con-Ui faces a maximum penalty of death or life in prison.
The charges contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
The charges against Con-Ui resulted from an investigation by the FBI, with assistance from the Federal Bureau of Prisons. The case is being prosecuted by the Justice Department’s Criminal Division and the U.S. Attorney’s Office for the Middle District of Pennsylvania.
****Federal Grand Jury Indicts Man for Illegal Reentry into the United StatesRead the Press Release
Francesco Gulino was arrested in April in Raleigh Co. on drug charges
CHARLESTON, W. Va. – An Italian national was indicted on June 25 by a federal grand jury sitting in Charleston on a federal charge, announced United States Attorney Booth Goodwin. Francesco Gulino, also known as “Frank Gulino,” 43, of Italy, was indicted for reentry of an illegal alien. Gulino was previously convicted in May 2009 in the Court of Common Pleas, Cuyahoga County, Ohio of attempted felonious assault. Gulino was later deported on or about April 20, 2011.
On April 20, 2013, Gulino was arrested by police in Raleigh County, W.Va., for possession with intent to deliver a controlled substance. Gulino had not obtained approval of the Secretary of Homeland Security to reapply for admission to the United States.
Gulino faces up to 20 years in prison if he is convicted.
The U.S. Immigration and Customs Enforcement conducted the investigation. Assistant United States Attorney Erik S. Goes is handling the prosecution.
This case is being prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers in communities across the Southern District.
Note:The charge contained in the indictment is merely an accusation, and the defendant is presumed innocent unless and until proven guilty.
Click here to view a copy of the indictment
Father and Son Indicted on Federal Charges in Bribery Scheme to Obtain Taxicab Business Licenses-Charges Follow Undercover Investigation-Read the Press Release
WASHINGTON – Anthony C. Y. Cheng, Sr., and his son, Anthony R. Cheng, Jr., were indicted by a federal grand jury today on charges stemming from a scheme to bribe public officials to illegally obtain licenses and generate business opportunities for multi-vehicle taxicab companies, announced U.S. Attorney Ronald C. Machen Jr. and Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office.
Cheng, 65, and his son, 39, were indicted by a grand jury in the U.S. District Court for the District of Columbia. Both were indicted on one count each of conspiracy to commit bribery and payment of a bribe to a public official. Anthony Cheng Jr. also was indicted on a second count of payment of a bribe to a public official. The conspiracy charge carries a statutory maximum of five years in prison and financial penalties. The bribery charge carries a statutory maximum of 10 years of incarceration as well as financial penalties.
According to the indictment, Anthony Cheng Sr. is the owner of businesses, including Tony Cheng’s Mongolian Restaurant, in the Chinatown area of Washington, D.C. Anthony Cheng Jr. owned a bus company that provided interstate transportation to the public.
The indictment alleges that the Chengs conspired from November 2010 through June 2011 to obtain licenses for multi-vehicle taxicab companies. At the time, a legislatively mandated moratorium was in place prohibiting the issuance of any new business licenses to operate new taxicab companies, taxicab associations and limousine businesses.
The Chengs allegedly sought to circumvent the moratorium by using falsified backdated corporate documents representing that their taxicab companies had been in existence since 2009. According to the indictment, they attempted to carry out their scheme by approaching, among others, a person described in the indictment as “Public Official Number One,” a public official who at the time chaired the District of Columbia Taxicab Commission. They also approached a person they believed was an official with the District of Columbia Department of Consumer and Regulatory Affairs, described in the indictment as “Public Official Number Two;” unbeknownst to them, the indictment states, this person actually was an undercover FBI Special Agent.
During meetings in early 2011, “Public Official Number One” told the Chengs about the moratorium, the indictment alleges. The Chengs, meanwhile, agreed to pay “Public Official Number One” 10 percent of profits from their business endeavors, the indictment states. They allegedly collected and forwarded to “Public Official Number One” applications to corruptly obtain licenses for multi-cab companies. Anthony Cheng Jr. provided “Public Official Number One” with backdated paperwork, and Anthony Cheng Sr. provided him with $1,500 in cash to obtain the licenses, the indictment alleges.
The indictment alleges that Cheng Jr. met in March 2011 with “Public Official Number Two” and provided him with $250 in cash in return for backdated certificates of occupancy for two multi-vehicle taxicab companies.
The Chengs obtained two licenses for multi-cab companies – named Green Top Cab and ECO CAB Company - but never opened the businesses.
“Today’s indictment charges Tony Cheng and his son with paying cash bribes to two different government officials,” said U.S. Attorney Machen. “We cannot tolerate the culture of pay-to-play in the District of Columbia. This prosecution demonstrates our commitment to holding accountable the businessmen who entice public officials to violate the public trust.”
“Bribery and kickbacks, such as those alleged in today’s indictments, have no place in our government,” said Assistant Director in Charge Parlave. “We will continue to diligently work to protect the integrity of our government by pursuing those who seek to violate the system through such corruption.”
An indictment is merely a formal charge that a defendant has committed a violation of criminal laws and every defendant is presumed innocent until, and unless, proven guilty.
In announcing the charges, U.S. Attorney Machen and Assistant Director in Charge Parlave commended the efforts of those who worked on the case from the FBI’s Washington Field Office. They also commended the work of Assistant U.S. Attorneys Lionel André and Loyaan A. Egal, who are prosecuting the case.
13-226Essex County, N.J., Woman Who Scammed Credit Card Numbers to Buy Luxury Items Sentenced to Seven Years in Federal PrisonRead the Press Release
TRENTON, N.J. – An Essex County, N.J., woman who admitted using stolen credit card numbers to purchase $133,000 worth of high-end merchandise was sentenced today to 84 months in prison, U.S. Attorney Paul J. Fishman announced.
Melody Macken, 50, of Irvington, N.J., previously pleaded guilty before U.S. District Judge Joel A. Pisano to an indictment charging her with unlawfully using credit card numbers issued to others without their authorization. Judge Pisano imposed the sentence today in Trenton federal court.
According to documents filed in this case and statements made in court:
From February 2010 through November 2011, Macken acquired stolen credit card account numbers by calling retailers and store customers and claiming to be a store employee. Using the stolen credit card numbers and other personal identification information, she purchased items such as mattresses, appliances, electronics, luxury apparel, accessories and shoes – with a total value of more than $133,000.
In calculating Macken’s sentence, the court took into account a previous conviction and Macken’s alleged activities since her guilty plea in this case. While out on bail, Macken allegedly violated the conditions of her federal pretrial release by committing a new crime, following the same scheme, just months after entering her guilty plea. As a result, her bail was revoked and she was remanded into the custody of the U.S. Marshals pending today’s sentencing. She remains in federal custody.
In addition to the prison term, Judge Pisano sentenced Macken to serve three years of supervised release and ordered her to pay $147,592 to victim retailers.U.S. Attorney Fishman credited postal inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates, with the investigation.
The government is represented by Assistant U.S. Attorney Shirley U. Emehelu of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
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Defense counsel: David Oakley and Mark Anderl Esqs., Perth Amboy, N.J.East Windsor Gun Store Employee Pleads GuiltyRead the Press Release
Deirdre M. Daly, Acting United States Attorney for the District of Connecticut, today announced that KRYSTOPHER DIBELLA, 25, of West Suffield, pleaded guilty yesterday before United States Magistrate Judge Holly B. Fitzsimmons in Bridgeport to one count of aiding and abetting the failure to make a proper entry on an ATF Form 4473, a form that must be completed by individuals who purchase firearms from federally-licensed firearms dealers.
According to court documents and statements made in court, from approximately 2008 to August 2012, DIBELLA was employed at Riverview Gun Sales, which used to be a federally-licensed firearms dealer in East Windsor. On several occasions during his employment at Riverview Gun Sales, DIBELLA transferred firearms to individuals who failed to respond to certain questions on the ATF Form 4473.
The charge against DIBELLA stems from a sale that occurred on March 15, 2010. On that date, DIBELLA failed to have a purchaser of a firearm, who was a non-immigrant alien, answer a question on the form regarding United States citizenship.Judge Fitzsimmons has scheduled sentencing for September 16, 2013, at which time DIBELLA faces a maximum penalty of one year of imprisonment, five years of probation and a $100,000 fine. The parties have agreed to recommend a sentence of three years of probation. As part of this agreement, DIBELLA will not apply for a Federal Firearms License (FFL) or to be a responsible party for an FFL for the entire probationary term.
This matter is being investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and is being prosecuted by Assistant United States Attorney Robert M. Spector.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
[email protected]Dansville Man Sentenced for Enticing ChildRead the Press Release
ROCHESTER, N.Y.-- U.S. Attorney William J. Hochul, Jr. announced today that William F. Chappell, 43, of Dansville, N.Y., who was convicted of enticing a minor to engage in illegal sexual activity, was sentenced to 14 years in prison and 10 years of supervised release by U.S. District Judge David G. Larimer.
Assistant U.S. Attorney Marisa J. Miller, who handled the case, stated that between March 2009 and May 2009, Chappell enticed a child under the age of 18 to engage in sexual activity. The defendant utilized a cellular phone and, through a series of text messages and exchanges, persuaded the child to engage in sexual activity. At Chappell's request, the child took sexually explicit photographs and sent them to the defendant. Chappell knew that the child was not yet 18 years old when he communicated with and enticed the child.
The sentencing is the culmination of an investigation on the part of Special Agents of the Department of Homeland Security, under the direction of Special Agent in Charge James C. Spero, and Officers of the Dansville Police Department, under the direction of Chief Charles Perkins.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.Clearwater Man Sentenced to 15 Years in Federal Prison for Possession of A FirearmRead the Press Release
Tampa, FL - United States District Court Judge Elizabeth A. Kovachevich today sentenced Martez Jamar Cook (28, Clearwater) to 15 years in prison for possession of a firearm by a convicted felon. Cook pleaded guilty on March 4, 2013.
According to the criminal indictment and testimony in court, on April 26, 2012, Cook sold a Chinese made Norinco SKS 7.62 rifle, along with numerous rounds of 7.62 ammunition, to an undercover police officer in Clearwater. Included in the sale were an extended capacity magazine and ammunition.
This case was investigated by agents of the United States Bureau of Alcohol, Tobacco, Firearms, and Explosives, with the assistance of the Largo Police Department. It was prosecuted by Assistant United States Attorney Jay L. Hoffer.
It is another case prosecuted as a part of the Department of Justice’s “Project Safe Neighborhoods” program - a nationwide, gun-violence reduction strategy. United States Attorney Robert E. O’Neill, along with Julie Torres, Special Agent in Charge, ATF, is coordinating the Project Safe Neighborhoods effort here in the Middle District of Florida in cooperation with federal, state, and local law enforcement officials.
Charleston Man Sentenced to Federal Prison for Illegal Firearm PossessionRead the Press Release
CHARLESTON, W.Va. – A Charleston man who illegally possessed a firearm was sentenced on June 25 to one year and three months in federal prison, announced U.S. Attorney Booth Goodwin. Clyde Anderson, Jr., also known as “Smokey,” 33, previously pleaded guilty in March to possession of a firearm by an unlawful user of a controlled substance. On January 4, 2013, members of the Charleston Police Department’s Special Enforcement Unit observed Anderson enter a vehicle outside of Shar’s Bar, located on Charleston’s West Side. A short time later, Anderson exited the vehicle. Police officers patrolling the area conducted a traffic stop on the vehicle. During a search of the vehicle, police found crack cocaine.
Following the search, police approached Anderson to question his involvement. Police ordered Anderson to get on the ground after he made an attempt to flee. As the defendant made his way to the ground, a firearm fell out of his waistband. Anderson was placed under arrest.
Anderson told police that he had been using crack cocaine on or about the time of his arrest.
The investigation was conducted by the Charleston Police Department’s Special Enforcement Unit. Assistant United States Attorney Haley Bunn handled the prosecution. The sentence was imposed by United States District Judge John T. Copenhaver, Jr.
This case was brought as part of Project Safe Neighborhoods. Project Safe Neighborhoods is a nationwide commitment to reduce gun crime in the United States by networking existing local programs targeting gun crime.
Charleston Man Sentenced to 18 Years in Federal Prison for Selling Crack CocaineRead the Press Release
BLUEFIELD, W.Va. – A Charleston man was sentenced on June 25 to 18 years in federal prison for distribution of crack cocaine, announced U.S. Attorney Booth Goodwin. James T. Washington, 35, of Charleston, previously pleaded guilty in November 2012. The sentence was handed down by Senior United States District Judge David A. Faber in federal court in Bluefield. On July 31, 2012, Washington sold .69 grams of crack cocaine to a confidential informant working with the Metropolitan Drug Enforcement Network Team (MDENT) in exchange for $100. The illegal transaction took place in Charleston. Also, on August 7, 2012, Washington met an informant at a predetermined location in Charleston and sold the informant 1.01 grams of crack cocaine in exchange for $200.
On August 12, 2012, officers conducted a traffic stop of a vehicle that was occupied by Washington and an associate. During the traffic stop, a police dog gave a positive indication of the presence of drugs. Police searched the vehicle and found 241 grams of crack cocaine hidden inside of the center console. Washington had obtained the crack cocaine the previous day and admitted that he intended to sell it.
The investigation was conducted by MDENT. Assistant United States Attorney Monica D. Coleman handled the prosecution.
Bloomington Man Sentenced to Life in Federal Prison for Conspiring to Distribute Controlled SubstancesRead the Press Release
MINNEAPOLIS— Earlier today in federal court, Eric Michelle Hunter, age 41, of Bloomington, was sentenced to life in federal prison for conspiring to distribute heroin, cocaine, and other controlled substances. United States District Court Judge Ann D. Montgomery specifically ordered Hunter to serve concurrent life sentences for conspiracy to distribute controlled substances and possession with intent to distribute heroin and BZP and a consecutive life sentence for aiding and abetting the carrying and using of a machine gun during and in relation to a drug trafficking crime, as well as a consecutive five-year sentence for aiding and abetting the carrying and using of a handgun during and in relation to a drug trafficking crime.
He was also ordered to serve concurrent 240-month sentences for witness tampering, being a felon in possession of a firearm, and aiding and abetting the distribution of controlled substances. Because the federal criminal justice system does not use parole, Hunter will remain in federal prison for the rest of his life.
Following the sentencing, U.S. Attorney B. Todd Jones said, “The sentence imposed in this case reflects both the culpability of this defendant and our continuing effort to protect our community from the most violent armed drug dealers. We will remain steadfast in our focus on the ‘worst of the worst’ when it comes to drug and gun prosecutions.”
Hunter was indicted on December 10, 2012, and convicted on February 22, 2013, following a jury trial. The evidence presented at that trial proved that from September 14, 2011, through July 24, 2012, Hunter conspired with others to distribute controlled substances, primarily heroin. On five occasions, Hunter aided and abetted the distribution of controlled substances, including heroin and benzylpiperazine, commonly known as BZP. He also conspired to distribute numerous other controlled substances, including two designer drugs with the street names “Foxy” and “Ivory Wave.”
Moreover, on May 2, 2012, Hunter aided and abetted the using and carrying of a .357-caliber, semi-automatic pistol, and on May 22, 2012, he aided and abetted using and carrying an AA Arms, nine-millimeter machine gun. Because Hunter is a convicted felon, he is prohibited under federal law from possessing firearms at any time. He was convicted in Mississippi of grand larceny in 1990, possession of cocaine in 1994, felon in possession of a deadly weapon in 1994, and intimidation and assault on a law enforcement officer in 1995. In addition, he was convicted in federal court in the District of Minnesota in 1998 for possession with intent to distribute crack cocaine.
On March 26, 2013, co-defendant Rikki Lee Gilow, age 20, also of Bloomington, was sentenced to 60 months on one count of conspiracy. In her plea agreement, Gilow admitted conspiring with Hunter and Jerry Anthony Harvey, age 39, of Minneapolis, to distribute controlled substances. In addition, Gilow admitted assisting Hunter in unknowingly selling two firearms to a government agent in connection with two separate drug transactions.
On April 9, 2013, Harvey pleaded guilty to one count of aiding and abetting the distribution of heroin. No sentencing date has yet been scheduled for Harvey.
This case was the result of an investigation by the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives and the Dakota County Drug Task Force. It was prosecuted by Assistant U.S. Attorneys Thomas M. Hollenhorst and Julie E. Allyn.Bloomfield Hills Resident Sentenced to Three YearsOn Insurance Fraud and Investment Fraud ChargesRead the Press Release
A Bloomfield Hills resident was sentenced in federal district court late yesterday on charges of defrauding an insurance company and, in a separate case, investment fraud, United States Attorney Barbara L. McQuade announced.
McQuade was joined in the announcement by Special Agent in Charge Daryl McCray, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and Special Agent in Charge Robert D. Foley, III, Federal Bureau of Investigation.
Patrick D. Winter, age 54, of Bloomfield Hills, Michigan, was sentenced by U.S. District Judge Arthur Tarnow to serve a sentence of 3 years imprisonment on charges of mail and wire fraud.
Evidence presented during the August 21, 2012 guilty plea, and at yesterday’s sentencing, established that Winter, as the manager of D.K.E., Inc., which owned a commercial office building at 21751 W. Nine Mile Road in Southfield, Michigan, caused a false, inflated and fraudulent claim to be submitted to the Secura Insurance Company, stemming from a fire that substantially damaged that building on October 4-5, 2004.
According to documents submitted to the Court by the defense, Winter intended to inflate the insurance claim by as much as $232,521. Secura did not pay the nearly $1 million claim, which is the subject of civil litigation in Oakland County.
In a separate case, Winter was sentenced for soliciting over $645,500 from a 60-year-old Nevada woman between July 2008 and August 2010, convincing her to liquidate her entire life savings, and give the proceeds to him. He falsely promised to invest the money in a real estate development which would pay high returns. Winter flew to Nevada, met with the victim, and earned her trust, in part, by showing her a picture of his large family (the defendant has nine children). He corresponded with her about personal bankruptcy and about letting her home go into foreclosure, all the while soliciting tens of thousands of dollars more from her. Winter used the money for personal expenses. The victim lost her house and was forced to live with her parents.
United States Attorney McQuade commended the investigations of the Southfield Fire Department, the Bureau of Alcohol, Tobacco and Firearms, and the Federal Bureau of Investigation for bringing this case to a successful conclusion.
.Barceloneta Contractor Israel Quintna-Luciano Pleads Guilty to BriberyRead the Press Release
SAN JUAN, P.R. – Today, Israel Quintana-Luciano, a former contractor with the Municipality of Barceloneta pled guilty to a one count Information charging federal program bribery before the Magistrate Judge Camille Vélez-Rive, announced Rosa Emilia Rodríguez-Vélez, United States Attorney for the District of Puerto Rico. At sentencing, set for November 13 at 9:30 am, the defendant faces a maximum term of imprisonment of ten (10) years, a supervised release term of not more than three (3) years and a $250,000 fine.
On or about January 19, 2012, Quintana met with the planning director of the Municipality of Barceloneta and during lunch provided him with a Christmas card with a small envelope inside which contained $5,000 in cash. The purpose of the payment was to expedite contract payments by the Municipality of Barceloneta and ensure continued work with the Municipality of Barceloneta for Cidra Excavation, which at the time had several contracts with the Municipality. During this time, included the year prior, the Municipality of Barceloneta received over $1,000,000 in federal funds.
“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. “Contractors who provide public officials with illegal payments contribute to undermining the public trust in local government and the services it provides to its constituents.”
This case is being prosecuted by Senior Litigation Counsel, Charles R. Walsh and was investigated by the FBI.
Austin Doctor Charged with Defrauding Medicare of $2 Million in Less Than Two MonthsRead the Press Release
HOUSTON - Dr. Dennis B. Barson Jr., 40, and his medical clinic administrator, Dario Juarez, 53, have been charged in a 20-count indictment alleging a conspiracy to defraud Medicare of $2.1 million in less than two months, United States Attorney Kenneth Magidson announced today.
The indictment, returned under seal on June 19, 2013, alleges the fraudulent billing was for rectal sensation tests and electromyogram (EMG) studies of the anal or urethral sphincter which were never performed. The indictment also charges Barson, of Austin, and Juarez, of Beeville, with health care fraud for filing false claims with Medicare for medical procedures which were never performed.
Barson was arrested this morning, at which time the indictment was unsealed. He is expected to make his initial appearance today before a U.S. magistrate judge in Austin. Juarez is already in custody serving time for practicing medicine without a license.
According to the allegations in the indictment, Barson was the only practicing doctor at a medical clinic located at 8470 Gulf Freeway in Houston. It was Juarez, however, who allegedly represented himself either to be a doctor or a physician’s assistant and was the one who actually saw patients, according to the indictment. It is alleged that Barson and Juarez caused Medicare to be billed for procedures on 429 patients in just two months. Barson and Juarez also allegedly billed Medicare for seeing more than 100 patients on 13 different days, including a high of 156 patients on July 13, 2009.
Each of the 19 health care fraud counts and the conspiracy charge carries a maximum penalty of 10 years in a federal prison and a $250,000 fine, upon conviction.
The criminal charges are the result of a joint investigation conducted by agents of the FBI, the Department of Health and Human Services-Office of Inspector General and the Medicaid Fraud Control Unit of the Texas Attorney General's Office. This case will be prosecuted by Assistant United States Attorney Al Balboni and Special Assistant United States Attorney Adrienne Frazior.
A defendant is presumed innocent unless and until convicted through due process of law.###
Arden Hills Man Pleads Guilty to Conspiring to Distribute 11 Pounds of MethamphetamineRead the Press Release
MINNEAPOLIS—Earlier today in federal court, a 35-year-old Arden Hills man pleaded guilty to distributing approximately 11 pounds of methamphetamine. Marcelino Garcia pleaded guilty to one count of conspiracy to distribute 500 or more grams of methamphetamine. Garcia, who was indicted on March 20, 2013, entered his plea before United States District Court Judge John R. Tunheim.
In his plea agreement, Garcia, also known as Moreno Marcelino Garcia and Marcelino Garcia-Moreno, admitted that on March 15, 2013, he made arrangements to sell approximately 11 pounds of methamphetamine to an undercover federal agent at a Target parking lot in Shoreview. Garcia also admitted that during the subsequent execution of a search warrant at his residence, authorities seized a nine-millimeter, semi-automatic pistol and five additional pounds of methamphetamine. According to a law enforcement affidavit filed in the case, authorities learned about Garcia during routine narcotics’ investigations in the Twin Cities.
For his crime, Garcia faces a potential maximum penalty of life in prison. Judge Tunheim will determine his sentence at a future hearing, yet to be scheduled. This case is the result of an investigation by the Twin Cities Safe Streets Violent Gang Task Force, which is led by the Federal Bureau of Investigation and includes the Minneapolis Police Department. The task force’s mission is to investigate and target the most violent gangs operating in the Twin Cities or those gangs engaged in the large-scale trafficking of illegal drugs. The case is being prosecuted by Assistant United States Attorney Julie E. Allyn.
To learn more about the harmful effects of methamphetamine, visit http://www.justice.gov/dea/pr/multimedia-library/publications/drug_of_abuse.pdf#page=48.Allentown Man Charged with Making False Statements to HUDRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced the filing of a Criminal Information today against David Unterberg, age 52, of Allentown, Pennsylvania, alleging that he made false reports and statements to the Department of Housing and Urban Development (HUD).
According to United States Attorney Peter J. Smith, the Criminal Information alleges that between May and December 2010, Unterberg submitted invoices seeking and receiving reimbursement for expenses and wages related to two conferences that he falsely claimed to have attended which were paid for by HUD funds. At the time, Unterberg was the owner of a firm known as Community Programs Incorporated (CP), which provided services to the Borough of Tamaqua, Schuylkill County, in connection with a federal Community Development Block Grant (CDBG).
The case was investigated by the U.S. Department of Housing & Urban Development, Office of Inspector General, and the Pennsylvania Department of the Auditor General. Prosecution is assigned to Assistant United States Attorney John Gurganus.
Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilty is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
In this case, the maximum penalty under the federal statute is one-year of imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
Monday 24 June 2013
Woman Pleads Guilty to Defrauding Lowe’s Stores by Fraudulently Obtaining Gift Card CreditRead the Press Release
Baltimore, Maryland - Lucerte “Lisa” Abellard, age 35, of Dobbs Ferry, New York, pleaded guilty today to conspiracy to commit wire fraud in connection with a scheme to defraud Lowe’s stores.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Acting Special Agent in Charge Lisa Quinn of the United States Secret Service – Baltimore Field Office.
According to her plea agreement, Abellard called employees at Lowe’s stores around the United States, pretending to be from the “IT department” at Lowe’s headquarters, telling the Lowe’s employee that she received a report there were problems with a register at the Lowe’s store. She would then ask the employee to run a series of diagnostics on the register, often pretending to be able to see the tests remotely. The purported diagnostics ended with a “test” transaction that put a credit on a Lowe’s gift card – usually about $3,000 to $4,000. In reality, this “test” transaction put a credit onto a Lowe’s card possessed by Abellard or her co-conspirators. Abellard was usually successful in deceiving employees into believing she was calling from Lowe’s IT department because she was very familiar with Lowe’s internal procedures and systems – including the names of systems and databases routinely accessed by Lowe’s employees.
Abellard received a portion of value on the gift card she fraudulently credited from the co-conspirators to whom she sold the cards. After obtaining the fraudulent credit, Abellard would contact the co-conspirator that had paid her for the card, advise that person of the credit and that the card needed to be used quickly before Lowe’s detected the fraud. Phone records connect Abellard and her co-conspirators to the fraudulently obtained gift cards, and confirm that Abellard made most or all of the fraud calls to Lowe’s stores.
The total loss to Lowe’s as a result of the scheme was more than $250,000. The government contends that Abellard was the leader of the scheme and will offer evidence to prove that at sentencing
Abellard faces a maximum sentence of 20 years in prison and a fine of $250,000. U.S. District Judge Ellen L. Hollander scheduled his sentencing for September 26, 2013, at 10:00 a.m.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
United States Attorney Rod J. Rosenstein thanked the U.S. Secret Service for its work in the investigation. Mr. Rosenstein praised Assistant U.S. Attorney Justin S. Herring, who is prosecuting the case.
Winner Man Sentenced for Prohibited Person in Possession of A FirearmRead the Press Release
United States Attorney Brendan V. Johnson announced that a Winner, South Dakota man convicted of Prohibited Person in Possession of a Firearm was sentenced on June 24, 2013 by U.S. District Judge Roberto A. Lange.
Joshua Felix, age 39, was sentenced to 4 months in custody, 4 months of home confinement, and $100 to the Federal Crime Victims Fund.
Felix was indicted by a federal grand jury on January 16, 2013 and pled guilty to the charge on April 2, 2013.
Felix was convicted of domestic violence simple assault on June 15, 2004 in Tripp County. Due to that previous domestic violence conviction, Felix was prohibited from possessing firearms by operation of federal law. On March 15, 2012, Tripp County law enforcement was investigating a disturbance and found Felix to be in possession of a rifle.
The investigation was conducted by the Tripp County Sheriff’s Office and the Rosebud Sioux Tribe Law Enforcement Services. The case was prosecuted by Assistant U.S. Attorney Tim Maher.
Felix was remanded to the custody of the U.S. Marshals Service.
U.S. Restrains 1909 Pablo Picasso Painting Valued at $11.5 MillionRead the Press Release
The Department of Justice today restrained the 1909 Pablo Picasso painting “Compotier et tasse” – estimated to be worth $11.5 million – on behalf of the Italian government, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney Preet Bharara of the Southern District of New York; and U.S. Immigration and Customs Enforcement (ICE) Director John Morton.
The restraining order was obtained in response to an official request by the government of Italy, pursuant to the treaty between the United States of America and the Italian Republic on Mutual Legal Assistance in Criminal Matters for assistance in connection with its ongoing criminal investigation and prosecution of Gabriella Amati. Amati and her late husband, Angelo Maj, were charged by the Italian Public Prosecutors’ Office in Milan with embezzlement and fraudulent bankruptcy offenses under Italian law, and Italian prosecutors have obtained a restraining order for the Picasso painting in connection with the criminal proceeding.
According to documents filed in the Italian criminal proceeding, Amati and Maj, in collaboration with a public official of the city of Naples, Italy, employed various schemes to misappropriate tax receipts collected for Naples by companies the couple controlled. In addition, the Italian prosecutors alleged that Amati and Maj orchestrated a number of schemes to embezzle Naples’ tax revenue, including the use of fraudulent service contracts, forged accounting records, inflated operational expenses and fraudulently claimed refunds to Naples taxpayers, all to justify transfers to the couple’s own bank accounts of the taxes that were collected for the city, resulting in a loss of approximately 33 million Euros ($44 million) to Naples.
On May 21, 2013, ICE Homeland Security Investigations (HSI) special agents in New York located and recovered the painting, which was being offered for private sale in the amount of $11.5 million.
An application to enforce the Italian restraining order was filed on June 21, 2013, in the U.S. District Court for the Southern District of New York, seeking to restrain the Picasso painting belonging to Amati and Maj and located in New York City. U.S. District Judge Victor Marrero granted the U.S. government’s application and issued a restraining order prohibiting the removal, sale or disposition of the Picasso painting from the court’s jurisdiction. The United States is working in close cooperation with the Italian Public Prosecutors’ Office in Milan and the Justice Department’s Attaché in Rome to forfeit the painting in an effort to repatriate the Picasso to Italy.
“Restraining this Picasso painting is yet another example of the Justice Department’s close partnership with law enforcement around the world,” said Acting Assistant Attorney General Raman. “Our asset forfeiture section is committed to finding and securing every last penny of criminal proceeds and putting those ill-gotten proceeds back in the hands of victims, regardless of where they reside.”“We are pleased to have played a role in securing this valuable work of art by the celebrated artist, Pablo Picasso, on behalf of the Italian government,” said U.S. Attorney Bharara. “Our commitment to ‘taking the profit out of crime’ transcends national boundaries and is the operating principle of our asset forfeiture program.”
“Restraining this valuable artwork is an effort to help recover some of the estimated $44 million that this couple stole from the tax-paying citizens of Naples,” said Director Morton. “We are very pleased that our investigation has led to the recovery of this painting that is so significant to the Italian people. This is an example of the fine work of our HSI cultural repatriation special agents. We will continue our efforts to return stolen antiquities to their rightful owners.”
The U.S. enforcement of the Italian order is being handled by Assistant Deputy Chief Jack de Kluiver and Trial Attorney Jennifer Wallis of Criminal Division’s Asset Forfeiture and Money Laundering Section and Asset Forfeiture Unit Chief Sharon Cohen Levin and Assistant U.S. Attorney Christine Magdo of the U.S. Attorney’s Office for the Southern District of New York, ICE HSI New York and Rome, and the Criminal Division’s Office of International Affairs. In Italy, the case is being handled by the Italian Public Prosecutor’s Office in Milan, and investigated by the Guardia di Finanza police service.
U.S. Attorney Sarah R. Saldana Welcomes Congressional Delegation from the Republic of MexicoRead the Press Release
DALLAS — U.S. Attorney Sarah R. Saldaña of the Northern District of Texas welcomed several members of the Republic of Mexico’s Congressional Delegation this morning as they began a two-day visit to North Texas. This morning, before the opening session, U.S. Attorney Saldaña, Senator Arely Gómez Gonzàlez, Congresswoman Karina Labastida Sotelo and Congressman Jorge Sotomayer Chàvez spoke to several representatives from the media.
U.S. Attorney Saldaña said, “We are greatly privileged to welcome the Mexican Congressional Delegation to North Texas. We’re honored that as they transition to an accusatorial system of justice, similar to ours, they are interested in learning more about our system. We certainly look forward to a productive dialogue and exchange of ideas with our important neighbors and friends.”
In June 2008, Mexico amended its constitution to require that by June 2016, federal and state governments implement oral trials with full rights of confrontation. The judiciary committees from both the Mexican Senate and House of Representatives requested assistance from the U.S. in discussing procedures, outlined in proposed bills, which will be applicable to the states as well as the Mexican federal government.
Following introductions this morning, the Congressional Delegation participated in a round-table panel discussion on the American Accusatory System. Panelists from the Northern District of Texas included U.S. District Judges, U.S. Magistrate Judges, the Chief of U.S. Probation and Parole and the U.S. Federal Public Defender. Later, the delegation met with various executives from federal, state and local law enforcement where topics such as agency cooperation, task forces and evidentiary chain of custody were discussed. Representatives from Senator John Cornyn’s office and Senator Ted Cruz’s office also participated.
Following this morning’s sessions, the Congressional Delegation attended presentations on the responsibilities of the U.S. Attorney’s Office, including prosecuting organized crime and money laundering cases. The delegation visited a U.S. Magistrate Court for various hearings and then travelled to Dallas Police Department Headquarters where they met with senior staff and toured the facility.
On the second day of their visit to North Texas, the Delegation will observe state court proceedings and meet with the Dallas County District Attorney and state prosecutors. When they return to the federal courthouse, they will meet with the U.S. Federal Public Defender and staff, the Chief of U.S. Probation and Pretrial Services and U.S. District and Magistrate Judges. Their visit will conclude late tomorrow with another meeting with U.S. Attorney Saldaña.
Two Jackson County Men Charged with Methamphetamine ConspiracyRead the Press Release
Two Elkville, Illinois, residents were indicted on June 20, 2013, in an indictment, charging conspiracy to manufacture methamphetamine, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today.
On June 24, 2013, Charles L. Scott, a/k/a “Boomer,” 42, was arraigned in United States District Court in Benton on the indictment. The indictment alleges that the offense occurred between March 2012 and March 2013 in Jackson and Perry Counties. Scott is currently being held without bond pending a June 27, 2013, detention hearing. Co-defendant Charles E. Witherspoon, a/k/a “Spoon,” 61, is scheduled to make his initial appearance in federal court on June 25, 2013. The case is set for jury trial on August 26, 2013.
An indictment is a formal charge against a defendant. Under the law, a defendant is presumed to be innocent of a charge until proved guilty beyond a reasonable doubt to the satisfaction of a jury.
If convicted, Scott and Witherspoon each face a term in prison of up to 20 years, a $1,000,000 fine, and 3 years of supervised release.
The ongoing investigation is being conducted by the Jackson County Sheriff’s Office, Perry County Sheriff’s Office, Murphysboro Police Department, Pinckneyville Police Department, DuQuoin Police Department, and Illinois State Police Methamphetamine Response Team.
The case is being prosecuted by Assistant United States Attorney Amanda A. Robertson.
Twenty-Fourth Defendant Pleads Guilty in Mahattan Federal Court in Connection with LIRR Disability Fraud SchemeRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that STEVEN GAGLIANO, a former Long Island Railroad signalman, pled guilty today to charges related to the allegedly massive fraud scheme in which Long Island Rail Road (“LIRR”) workers claimed to be disabled upon early retirement so that they could receive disability benefits to which they were not entitled. GAGLIANO pled guilty in Manhattan federal court before U.S. Magistrate Judge Andrew J. Peck. He is the 24th defendant to plead guilty in the case, which alleges a pervasive pattern of fraudulent disability claims being filed with the U.S. Railroad Retirement Board (“RRB”) by retiring LIRR employees.
According to the Complaint, the Superseding Indictments, the Superseding Informations, and statements made in other public filings and court proceedings:
The RRB is an independent U.S. agency that administers benefit programs, including disability benefits, for the nation’s railroad workers and their families. A unique LIRR contract allowed employees to retire at the relatively young age of 50 – the age of eligibility has since changed to 55 – if they had been employed by the LIRR for at least 20 years. Eligible employees are entitled to receive an LIRR pension, which is a portion of the full retirement payment for which they are eligible at 65. In addition, at full retirement age (between age 60 and age 65 depending on years of service), they are eligible to receive an RRB retirement pension. For LIRR workers who retired at 50 with only an LIRR pension, they would receive less than their prior salary and substantially lower pension payments than those to which they would be entitled at full retirement age. However, LIRR employees who retired and claimed disability could receive a disability payment from the RRB on top of their LIRR pension, regardless of age. A retiree’s LIRR pension, in combination with RRB disability payments, can be roughly equivalent to the base salary earned during his or her career.
Hundreds of LIRR employees have allegedly exploited the overlap between the LIRR pension and the RRB disability program by pre-planning the date on which they would falsely declare themselves disabled so that it would coincide with their projected retirement date. These false statements, made under penalty of prosecution in disability applications, allowed LIRR employees to retire as early as age 50 with an LIRR pension, supplemented by the fraudulently obtained RRB disability annuity. From 1995 through 2011, more than 75% of LIRR employees stopped working and began receiving RRB disability benefits, whereas during this same period, only 25% of retiring Metro-North employees stopped working and began receiving RRB disability benefits. During the period 2004 through 2008, only three doctors were responsible for approximately 86% of the disability claims submitted by LIRR retirees. Of these, one has died and one, Dr. Peter J. Ajemian, has pled guilty and admitted that he declared “large numbers of Long Island Railroad employees” to be disabled even though they were not disabled and could have continued working in their railroad jobs. Dr. Ajemian was sentenced in May 2013 to eight years in prison.
GAGLIANO, 55, of North Babylon, New York, pled guilty to one count of conspiracy to commit mail fraud, wire fraud, and health care fraud; one count of conspiracy to defraud the United States and the RRB; one count of health care fraud; and one count of wire fraud. He faces a maximum sentence of 55 years in prison, and has agreed to make restitution to the RRB in the amount of $242,466.73.
Thirty-two people have been charged in connection with the LIRR disability fraud scheme, 24 of whom have now pled guilty. Of the 24 defendants that have pled guilty, two have been sentenced. The charges against the remaining defendants are merely allegations and they are all presumed innocent unless and until proven guilty.
Mr. Bharara praised the work of the RRB Office of the Inspector General, the Federal Bureau Investigation, and the Office of the Inspector General of the Metropolitan Transportation Authority for their outstanding work in the investigation, which he noted is ongoing. He also acknowledged the previous investigation conducted by the New York State Attorney General’s Office into these pension fraud issues.
The case is being handled by the Office’s Complex Frauds Unit. Assistant U.S. Attorneys Justin Weddle, Nicole Friedlander, and Daniel Tehrani are in charge of the prosecution.
US v. Lesniewski, et al S14 Indictment
Tenth and Eleventh Gang Members Plead Guilty in Dodge City Racketeering CaseRead the Press Release
WICHITA, KAN. – Two members of a Dodge City street gang have entered guilty pleas, becoming the tenth and eleventh defendants to plead guilty in a federal racketeering case, U.S. Attorney Barry Grissom said today.
Joshua Flores, 25, Dodge City, Kan., pleaded guilty to one count of brandishing a firearm in a crime of violence. Hernan Quezada, 20, Dodge City, Kan., pleaded guilty to one count of assault with a dangerous weapon, which was a violent crime in aid of racketeering.
In his plea, Joshua Flores admitted that he was a member of the Los Carnales Chingones street gang affiliated with the Norteno street gang on June 8, 2009, when he and other gang members who were armed with firearms robbed a victim named Isidro Raleas-Velasquez and other persons.
The victims were at their home at 1005 Avenue E in Dodge City when Flores and three other men affiliated with the Nortenos broke into their residence armed with firearms. One of the Nortenos grabbed a victim, struck him in the head with a firearm and took him into another room. Flores joined the other Nortenos in going through the house looking for other residents to rob. The other Norteno beat the victim he took into the other room. During the robbery, Raelas-Velasquez was struck with a firearm in the head, causing a large laceration. After the robbery, Flores and the other Norteno gang members divided up the proceeds of the robbery.
In his plea, Hernan Quezada admitted he was a member of the Diablos Viejos (DV) street gang affiliated with the Norteno street gang when on Feb. 5, 2012, he assaulted a victim named Reyes Bocanegra. Quezada was at 1200 Avenue I in Dodge City when he got into a fight with Bocanegra’s brother, Oscar. The fight was soon joined by Reyes Bocanegra, aiding his brother, and two other DV gang members, aiding Quezada. Quezada struck Reyes Bocanegra in the head with a bottle, causing a laceration to the top of his head.
Flores and Quezada admitted that robberies, assaults and other crimes were part of the way Norteno gang members built their reputations and kept their rivals at bay.
Flores is set for sentencing Sept. 9. He faces a penalty of not less than seven years in federal prison and a fine up to $250,000. Quezada is set for sentencing Sept. 13 He faces a maximum penalty of 20 years in federal prison and a fine up to $250,000.
Grissom commended the Dodge City Police Department, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Ford County Sheriff’s Office, the Kansas Bureau of Investigation, Assistant Aaron Smith and Assistant U.S. Attorney Lanny Welch for their work on the case.
Statement of Attorney General Eric Holder on the Supreme Court Decision in Fisher v. University of TexasRead the Press Release
Attorney General Eric Holder today issued the following statement regarding the Supreme Court’s decision in Fisher v. University of Texas.
“I am pleased that the Supreme Court has followed longstanding precedent that recognizes the compelling governmental interest in ensuring diversity in higher education. The educational benefits of diversity are critically important to the future of this nation. As the Court has repeatedly recognized, diverse student enrollment promotes understanding, helps to break down racial stereotypes, enables students to better understand people of different races, and prepares all students to succeed in, and eventually lead, an increasingly diverse workforce and society. Business leaders have long emphasized the importance of a qualified, diverse workforce to their success in a global economy. And the federal government, in particular, has a vital interest in drawing its personnel, including its military leaders, from a well-qualified and diverse pool of university graduates of all backgrounds who have the perspective and understanding necessary to govern and defend this great country.
“The University of Texas’s implementation of its admissions program will now be reevaluated by the lower courts. The Department is committed to working with colleges and universities around the country to find ways to promote educational diversity that are consistent with the law.”
St. Lucie County Man Indicted for Internet Transportation and Receipt of Child PornographyRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Kenneth Mascara, Sheriff, St. Lucie County Sheriff’s Office (SLCSO), announce the indictment of defendant Joshua Adams Bagala, of Port Saint Lucie, on child pornography charges. Bagala was arraigned on June 20, 2013, before U.S. Magistrate Judge Frank J. Lynch, Jr., in Ft. Pierce and is detained pending trial.
The two-count indictment charges Bagala with transportation of child pornography via the internet, in violation of Title 18, United States Code, Section 2252(a)(1), and receipt of child pornography via the internet, in violation of Title 18, United States Code, Section 2252(a)(2). If convicted, Bagala faces a mandatory minimum sentence of five years in prison and a maximum sentence of 20 years in prison on each count. Bagala will also be required to register as a sex offender in any jurisdiction in which he lives, works, or attends school.
On April 16, 2013, a Nebraska State Patrol sergeant was conducting an online undercover investigation in a chat room. The officer, who was posing as a 14 year old girl, was contacted by a user with the screen name of “death_by_eskimo.” The user asked the undercover whether the undercover liked underage sex films and suggested that they use an instant messaging service to communicate. Thereafter, the user of the “death_by_eskimo” screen name sent two child pornography videos to the undercover officer. Upon further investigation, the IP address for “death_by_eskimo” was traced to Bagala’s residence in Florida.
On April 26, 2013, members of the South Florida ICAC Task Force executed a state search warrant at Bagala’s residence in Port St. Lucie. A forensic examination of the Bagala’s computer revealed several thousand videos and photographs of child pornography.
Mr. Ferrer commended the investigative efforts of the St. Lucie County Sheriff’s Office and the South Florida Internet Crimes against Children (ICAC) Task Force for their work on this case. The case is being prosecuted by Assistant U.S. Attorney Carmen Lineberger.
An indictment is only an accusation and a defendant is presumed innocent until proven guilty.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
St. Johns County Man Sentenced to More Than 15 Years in Prison in Methamphetamine CaseRead the Press Release
Jacksonville, FL - U.S. District Judge Marcia Morales Howard today sentenced Frank Higginbotham (36, Hastings, Florida) to 15 years and 10 months in federal prison for conspiracy to manufacture methamphetamine and distribution of methamphetamine. The court also ordered Higginbotham to serve 8 years of supervised release after his from prison. A jury found Higginbotham guilty of the offenses on February 21, 2013.
According to court documents, Higginbotham manufactured and sold methamphetamine at various locations in St. Johns County. During the conspiracy, methamphetamine users gave Higginbotham boxes of medication containing pseudoephedrine in exchange for methamphetamine. Pseudoephedrine, which is an ingredient in many cold and allergy medications, is the primary ingredient needed to manufacture methamphetamine. On February 13, 2012, Higginbotham sold methamphetamine to an undercover Drug Enforcement Administration (DEA) agent. Higginbotham had previously served three years in state prison for trafficking in methamphetamine.
This case was investigated by the Drug Enforcement Administration and the St. Johns County Sheriff’s Office. It was prosecuted by Assistant United States Attorney Arnold B. Corsmeier.
Six Shelby County Residents Guilty of Federal Gun/Drug ViolationsRead the Press Release
Department of Justice
Office of Public AffairsBEAUMONT, Texas – Six Center, Texas residents have pleaded guilty to gun and drug violations in the Eastern District of Texas, announced U.S. Attorney John M. Bales today. The plea hearings were held today before U.S. Magistrate Judge Keith F. Giblin.
Lakeva Shillette Hill, a/k/a Sugar Momma, 35, pleaded guilty to conspiracy to possess with intent to distribute a controlled substance and being a felon in possession of a firearm. Hill faces up to 10 years in federal prison.
Lester Earl Pitts, 48, pleaded guilty to providing a firearm to a drug trafficker and providing a firearm to a felon. Hill faces up to 10 years in federal prison.
Vincent Jermaine Lathan, a/k/a Reed Cartwright, 36, pleaded guilty to conspiracy to possess with intent to distribute a controlled substance. Lathan faces up to 20 years in federal prison.
Cornelius Vansharles Gray, 36, pleaded guilty to conspiracy to possess with intent to distribute a controlled substance. Gray faces up to five years in federal prison.
Anthony Gene Chumbley, 46, pleaded guilty to being a felon in possession of a firearm. Chumbley faces up to 10 years in federal prison.
Andrae Demarkqudell Pegues, a/k/a Mark, 33, pleaded guilty to making a false statement to the ATF. Pegues faces up to five years in federal prison.
According to information presented in court, from February 2011 to January 2013, Pitts was a certified peace officer employed as a deputy for the Shelby County Sheriff’s Office. During that time, Pitts associated with Hill, Pegues, Chumbley, and Gray.
In May 2010, Pitts purchased a 9mm semi-automatic pistol which he provided to Pegues even though he knew Pegues was a convicted felon having been convicted of a drug trafficking charge in the Eastern District of Texas in 2000. Convicted felons are prohibited from owning or possessing firearms or ammunition.
On May 9, 2010, Pegues was arrested in possession of the firearm. The next day, Pitts filed a false burglary report with the Shelby County Sheriff’s Office, stating that the firearm had been stolen from his vehicle. Pitts instructed Pegues to conceal from law enforcement that Pitts had provided the firearm to Pegues. On June 4, 2010, Pegues lied to the ATF about how he obtained the firearm.
On Feb. 26, 2012, Pitts purchased a semi-automatic pistol for Hill although he knew Hill was actively committing drug trafficking crimes and was a convicted felon having been found guilty of distribution of cocaine in Louisiana in 1998.
On July 1, 2012, Pitts provided a .40 caliber semiautomatic pistol to Gray although he knew Gray was actively committing drug trafficking crimes.
On Dec. 31, 2012, Pitts loaned a shotgun to Chumbley, knowing that Chumbley was a convicted felon. Chumbley was convicted of delivery of a controlled substance in Cherokee County, Texas, in 1993; and delivery of a controlled substance in Cherokee County, Texas, in 1990.
The defendants were indicted by a federal grand jury on Apr. 17, 2013 and arrested on Apr. 18, 2013. Sentencing dates have not been set.This case is being investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives, the Texas Department of Public Safety, the Center Police Department, and the Shelby County Sheriff’s Office and prosecuted by Assistant U.S. Attorney John B. Ross.
Sarcoxie Man Sentenced for Illegal Financial Transactions in Scheme to Sell Cooking Oil Stolen from RestaurantsRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a Sarcoxie, Mo., man has been sentenced in federal court for structuring financial transactions in order to evade federal reporting requirements as part of a scheme to sell stolen cooking oil that was intended for recycling.
Jesse Arnold, 46, of Sarcoxie, was sentenced by U.S. District Judge Dean Whipple on Friday, June 21, 2013 to one year and one day in federal prison without parole. Arnold must also forfeit to the government $207,817 that was seized from his business bank account.
Arnold, who pleaded guilty on Dec. 18, 2012, operated 4 States Grease Company, a collection facility for spent cooking oil, located in Sarcoxie. Spent cooking oil is the byproduct of either vegetable or animal fat oil used by restaurants. The oil can be repurposed for use as biodegradable diesel fuel and animal food products, and therefore has value in the open market. Because of this value, restaurants will contract with companies to sell their spent cooking oil and allow the companies to take it and recycle it.
Arnold directed 4 States from 2009 to November 2011. He admitted that he had reason to believe he was buying spent cooking oil that had been stolen by various drivers. These drivers obtained the stolen cooking oil from businesses in Missouri, Kansas, Oklahoma, and Arkansas. The drivers sold the spent cooking oil to Arnold under circumstances that would have caused a reasonable person to know that it had been stolen. Arnold and 4 States then sold the spent cooking oil to Brooks Grease Service, and had it transported to Brooks’s factory in Tulsa for processing.
During this time, in order to avoid federal reporting requirements that could bring unwanted scrutiny to 4 States, Arnold deliberately and knowingly structured withdrawals from his business checking account. Arnold withdrew some or most of the money in order to purchase the stolen spent cooking oil. Arnold made numerous withdrawals on consecutive days that were individually less than $10,000, but which totaled more than $10,000 when added together.
Under federal law, banks must file a currency transaction report for any financial transaction over $10,000. The crime of structuring occurs when a person, in order to knowingly avoid the financial institution from filing a currency transaction report, breaks up the transaction into smaller components that are less than $10,000.
All of the cash withdrawals from Jan. 1, 2009, to Sept. 30, 2011, were done by checks written to “Cash” and signed by Arnold. Many of the cash withdrawals were done on successive banking days and were for $9,000 for each withdrawal. There were no single cash withdrawals over $10,000. The parties have stipulated that the most readily provable amount that Arnold was responsible for structuring was $243,000.
This case was prosecuted by Assistant U.S. Attorney Randall D. Eggert. It was investigated by IRS-Criminal Investigations, the Kansas City, Mo., Police Department, the Missouri State Highway Patrol the Crawford County, Kan., Sheriff’s Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives.Rosebud Man Sentenced for Third Degree Burglary and Aiding and AbettingRead the Press Release
United States Attorney Brendan V. Johnson announced that a Rosebud, South Dakota man convicted of Third Degree Burglary and Aiding and Abetting was sentenced on June 24, 2013 by U.S. District Judge Roberto A. Lange.
Justin Lee Gabriel, age 21, was sentenced to 21 months in custody, 2 years of supervised release, $2,600 in restitution, and $100 to the Federal Crime Victims Fund.
Gabriel was indicted by a federal grand jury on December 11, 2012 and pled guilty to the charge on February 6, 2013.
The conviction stems from an incident that took place on September 6, 2012, when Gabriel broke in to the Prairie Hills Square golf course and took U.S. currency from the business.
The investigation was conducted by the Rosebud Sioux Tribe Law Enforcement Services. The case was prosecuted by Assistant U.S. Attorney Tim Maher.
Gabriel was remanded to the custody of the U.S. Marshals.
Rosebud Man Sentenced for Interstate Transportation of A Stolen Motor VehicleRead the Press Release
United States Attorney Brendan V. Johnson announced that a Rosebud, South Dakota man convicted of Interstate Transportation of a Stolen Motor Vehicle was sentenced on June 24, 2013 by U.S. District Judge Roberto A. Lange.
Alec Arapahoe, age 20, was sentenced to 9 months in custody, 18 months of supervised release, $6,419.48 in restitution, and $100 to the Federal Crime Victims Fund.
Arapahoe was indicted by a federal grand jury on August 22, 2011 and pled guilty to the charge on April 2, 2013.
The conviction stems from an incident that took place on July 3, 2011, when Arapahoe stole a pickup truck from Colorado and drove the vehicle from Colorado to South Dakota and onto the Rosebud Sioux Indian Reservation.
The investigation was conducted by the Rosebud Sioux Tribe Law Enforcement Services. The case was prosecuted by Assistant U.S. Attorney Tim Maher.
Arapahoe was remanded to the custody of the U.S. Marshals.
Rosebud Man Sentenced for Assaulting A Tribal OfficerRead the Press Release
United States Attorney Brendan V. Johnson announced that a Rosebud, South Dakota man convicted of Assault on a Federal Officer was sentenced on June 21, 2013 by Chief Judge Jeffrey L. Viken, United States District Court.
Jess Raymond Young, age 36, was sentenced to 30 months’ imprisonment, 2 years’ supervised release, and ordered to pay $100 to the Federal Crime Victims Fund.
On November 21, 2012, while in custody at the Oglala Sioux Tribal Jail in Pine Ridge, Young shoved a correctional officer against the wall and bit her multiple times. He pled guilty on March 21, 2013.
This case was investigated by the Bureau of Indian Affairs Office of Justice Services and the Oglala Sioux Tribe Department of Public Safety. Assistant U.S. Sarah B. Collins prosecuted the case.
Rosebud Man Sentenced for Assaulting A Tribal OfficerRead the Press Release
United States Attorney Brendan V. Johnson announced that a Rosebud, South Dakota man convicted of Assault on a Federal Officer was sentenced on June 21, 2013 by Chief Judge Jeffrey L. Viken, United States District Court.
Jess Raymond Young, age 36, was sentenced to 30 months’ imprisonment, 2 years’ supervised release, and ordered to pay $100 to the Federal Crime Victims Fund.
On November 21, 2012, while in custody at the Oglala Sioux Tribal Jail in Pine Ridge, Young shoved a correctional officer against the wall and bit her multiple times. He pled guilty on March 21, 2013.
This case was investigated by the Bureau of Indian Affairs Office of Justice Services and the Oglala Sioux Tribe Department of Public Safety. Assistant U.S. Sarah B. Collins prosecuted the case.
Rosebud Man Sentenced for Assault with A Dangerous WeaponRead the Press Release
United States Attorney Brendan V. Johnson announced that a Rosebud, South Dakota man convicted of Assault with a Dangerous Weapon was sentenced on June 24, 2013 by U.S. District Judge Roberto A. Lange.
Mitchell Stoneman, age 22, was sentenced to 36 months in custody, 2 years of supervised release, $4,445 in restitution, and $100 to the Federal Crime Victims Fund.
Stoneman was indicted by a federal grand jury on November 15, 2013 and pled guilty to the charge on April 8, 2013.
The conviction stems from an incident that took place on October 11, 2012, when Stoneman assaulted the victim with a bat and rock, with intent to do bodily harm to the victim.
The investigation was conducted by the Rosebud Sioux Tribe Law Enforcement Services. The case was prosecuted by Assistant U.S. Attorney Tim Maher.
Stoneman was remanded to the custody of the U.S. Marshals.
Roseau Man Sentenced for Operating a Continuing Criminal Enterprise in Operation ‘Noah’s Ark’Read the Press Release
FARGO – First Assistant U.S. Attorney Lynn Jordheim announced that Noah Bergland of Roseau, Minn. was sentenced before U.S. District Judge Ralph R. Erickson on June 24, 2013, to charges of operating a continuing criminal enterprise and money laundering conspiracy. Bergland pleaded guilty to the charges on July 10, 2012.
Judge Erickson sentenced Bergland to 10 years’ imprisonment to be followed by three years of supervised release. Bergland was ordered to pay a $200 special assessment to the Crime Victim’s Fund and to forfeit $250,000 to the United States.
Operation Noah’s Ark was an Organized Crime Drug Enforcement Task Force (OCDETF) investigation that revealed an organization that brought cocaine, heroin, marijuana and ecstasy from the Twin Cities to various cities in North Dakota and Minnesota.
The areas of North Dakota where the organization distributed these drugs were Fargo, Grand Forks and Williston. The cities in Minnesota included Minneapolis, St. Paul, Alexandria, Thief River Falls and East Grand Forks. To date, there have been 30 defendants charged as part of this investigation on drug conspiracy and money laundering charges. Additional defendants that have been sentenced in this case include:
Brian Warren Briggs - Grand Forks, ND – Conspiracy to Distribute Controlled Substances and Money Laundering Conspiracy – 180 months (15 years) Anthony Ancona – Albuquerque, NM - Conspiracy to Distribute Controlled Substances – 120 months (10 years) Nicholas William Michael – Grand Forks, ND - Conspiracy to Distribute Controlled Substances – 96 months (8 years) Jacob Brian Skadsem – Fargo, ND - Conspiracy to Distribute Controlled Substances and Money Laundering Conspiracy – 74 months (6 years, 2 months) Vary Rattanasithy – Blaine, MN – Conspiracy to Distribute Controlled Substances and Money Laundering Conspiracy– 72 months (6 years) Andrew Michael Luehring – Fargo, ND - Conspiracy to Distribute Controlled Substances – 70 months (5 years, 10 months) Riley Kevin Wald – Fargo, ND – Conspiracy to Distribute Controlled Substances - 60 months Andrew Frank Przekwas – Roseau, MN - Conspiracy to Distribute Controlled Substances and Money Laundering Conspiracy – 48 months (4 years) Peter Philip Basting – Grand Forks, ND - Conspiracy to Distribute Controlled Substances – 48 months (4 years) Beau Ed Vasas – Spooner, WI - Conspiracy to Distribute Controlled Substances – 46 months (3 years, 8 months) Rachel Renee Dahl – Roseau, MN - Conspiracy to Distribute Controlled Substances – 36 months (3 years) Bryan Keith Cameron – Detroit Lakes, MN - Conspiracy to Distribute Controlled Substances and Money Laundering Conspiracy– 30 months (2 years, 6 months) James Robert Nord – Fargo, ND - Conspiracy to Distribute Controlled Substances (30 months (2 years, 6 months) Joel Garcia – Minneapolis, MN - Conspiracy to Distribute Controlled Substances – 30 months (2 years, 6 months) Chad Thomas Whitney – Grand Forks, ND - Conspiracy to Distribute Controlled Substances – 30 months (2 years, 6 months) Tony Joe Galle – East Grand Forks, MN - Conspiracy to Distribute Controlled
Substances – 27 months (2 years, 6 months) Kevin Ryan Magnuson – Fargo, ND - Conspiracy to Distribute Controlled Substances – 20 months (1 year, 8 months) Jamie Beth Johnston – Robbinsdale, MN - Conspiracy to Distribute Controlled Substances – 18 months (1 year, 6 months) Christopher Lee Webb – Burnsville, MN - Conspiracy to Distribute Controlled Substances – 15 months (1 year, 3 months) Alexandra Evelius – Minneapolis, MN – Conspiracy to Distribute Controlled Substances – 6 months and supervised release for 3 years Andrew Richard Block – Grand Forks, ND - Conspiracy to Distribute Controlled Substances – 6 months and 3 years of supervised probation Tara Lynn Lawrence – Minneapolis, MN – Conspiracy to Distribute Controlled Substances – 12 months electronic home monitoring with 3 years of supervised probation Clinton James Rooney – St. Paul, MN - Conspiracy to Distribute Controlled Substances – supervised probation for 3 years Timothy Michael Ploen – Edina, MN - Conspiracy to Distribute Controlled Substances – 6 months half-way house and supervised probation for 3 years Grant Kristjan Thorfinnson – Grand Forks, ND - Conspiracy to Distribute Controlled Substances – supervised probation for 2 years Additional defendants that have pleaded guilty for their role in the drug conspiracy and await sentencing are: Adam Wayne Nehk – Moorhead, MN – sentencing scheduled for July 18, 2013 Showin Keon Davis – Golden Valley, MN – sentencing scheduled for July 29, 2013 Markie Ann Plutowski – Grand Forks, MN – sentencing scheduled for July 29, 2013 Justin Michael Aaberg – Alexandria, MN – sentencing scheduled for September 23, 2013Operation Noah’s Ark was an investigation lead by Homeland Security Investigations (HIS), Internal Revenue Service-Criminal Investigation (IRS-CI), North Dakota Bureau of Criminal Investigations and the Grand Forks Police Department. Assisting agencies are the Drug Enforcement Administration (DEA) – Fargo Resident Office, Minnesota Bureau of Criminal Apprehension, and North Dakota Parole and Probation.
"This investigation is a terrific example of how federal, state and local law enforcement were able to work closely together to successfully dismantle a major narcotics smuggling organization," said Michael Feinberg, special agent in charge of HSI St. Paul, which covers North Dakota. "HSI will continue to utilize its broad authorities to target those individuals that pose direct threats to our communities."
“The role of Internal Revenue Service Criminal Investigation in narcotics investigations is to follow the money so we can financially disrupt and dismantle major drug trafficking organizations such as Operation Noah’s Ark. Today's sentencing of Noah Bergland and previously sentenced co-conspirators again emphasizes that the IRS-CI and the U.S. Attorney’s office will continue their aggressive pursuit of those who launder illegal drug profits,” said Kelly R. Jackson, IRS-CI, Special Agent in Charge, St. Paul Field Office. “IRS-CI is committed to unraveling complex financial transactions and money laundering schemes where individuals attempt to conceal the true source of their money.”
Assistant U.S. Attorney Chris Myers prosecuted the cases.
Rogue River Man Sentenced to 25 Years in Federal Prison for Sexually Abusing MinorsRead the Press Release
Rogue River Man with Prior Conviction for Sex Crime, Sentenced for Transporting Two Minor Girls to California and Committing Sexual AssaultMEDFORD, Ore. – Today, Senior U.S. District Judge Owen M. Panner sentenced James Robert Powell, 50, of Rogue River, Oregon, to 25 years in federal prison for crimes relating to his sexual assault of two minors.
After receiving allegations that Powell had molested minors, law enforcement officials learned that Powell used his friendship with a woman to obtain her permission in March 2012 to take her two daughters, ages 15 and 13, from Rogue River, Oregon to Brookings, Oregon, purportedly to help Powell sell merchandise at a local fair. The investigation disclosed that Powell instead took the girls to a beach house he had rented in Smith River, California. Once there, Powell provided alcohol to the minors, got them drunk, and sexually abused both of them over a two day period. Powell also secretly recorded the girls while they were naked. He instructed the girls that upon their return, to lie to their mother about where they had been over the weekend.
On June 29, 2012, a federal grand jury returned an indictment against Powell, charging him with various offenses relating to his sexual assault of the minors. Powell pleaded guilty on January 22, 2013 to transportation with intent to engage in criminal sexual activity with a minor, and using a minor to produce a visual depiction of sexually explicit conduct. Powell has been in federal custody since he was arrested in April 2012.
Powell has a prior conviction in 1994 for assault with intent to commit rape and verbal threats to kill (U.S. Department of the Army, Fort Leavenworth, KS). Powell served five years in a military prison and received a General Court Martial.
Today, Senior U.S. District Judge Owen Panner sentenced Powell to serve 25 years in federal prison, and ordered that Powell be on supervised release for the rest of his life. U.S. Attorney Amanda Marshall applauded Judge Panner’s sentence, commenting that, “This 25-year sentence sends a clear message to other sex offenders like Powell. If you sexually abuse a child, we will find you, we will prosecute you, and you will be locked up for a very long time. We will continue to do everything in our power to remove these predators from society and prevent them from victimizing others.”
This case was investigated by the FBI, Grants Pass Police Department, and Southern Oregon High-Tech Crimes Task Force, and was prosecuted by Assistant U. S. Attorney Judith Harper.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Rochester Man Sentenced for Stealing Interstate Shipment from RailcarRead the Press Release
ROCHESTER, N.Y.-- U.S. Attorney William J. Hochul, Jr. announced today that Anthony Toscano, 48, of Rochester, N.Y., who was convicted of conspiracy to steal an interstate shipment and theft of an interstate shipment, was sentenced to 18 months in prison and ordered to pay $4,669.26 in restitution by U.S. District Judge Charles J. Siragusa.
Assistant U.S. Attorney Brett A. Harvey, who handled the case, stated that on June 30, 2009, Toscano, along with co-conspirators Richard E. Riedman, Anthony Russell and Timothy Stone, stole more than 16 gross tons of scrap steel from a railcar at a CSXT rail yard in Batavia, N.Y. The defendants used a logging truck to remove 17 gross-ton bales of processed, high-grade scrap steel from the railcar.
Toscano and the other defendants were apprehended by members of the Genesee County Sheriff's Office in the logging truck and a pick-up truck as they left the scene of the theft. The bales were in the process of being shipped to a steel mill in Pennsylvania when they were stolen. Toscano, Riedman, Russell, and Stone were convicted after a two-week jury trial before Judge Siragusa in September 2012.
Defendants Stone and Russell will be sentenced by Judge Siragusa on July 9, 2013, and July 31, 2013, respectively. Riedman is scheduled to be sentenced by Judge Siragusa on September 16, 2013.
The sentencing is the culmination of an investigation on the part of Special Agents of the Federal Bureau of Investigation, under the direction of Acting Special Agent in Charge Richard M. Frankel and the Genesee County Sheriff's Department, under the direction of Gary Maha.Rice County Woman Pleads Guilty in Cattle FraudRead the Press Release
WICHITA, KAN. – A Rice County woman has pleaded guilty in connection with a cattle fraud scheme, U.S. Attorney Barry Grissom said today.
Carrie L. Frederick, 37, Sterling, Kan., pleaded guilty to three counts of wire fraud. In her plea, she admitted she embezzled money while she worked for Sellers Farms, Inc., a livestock feeding operation in Lyons, Kan. She caused money to be sent from Sellers Farms’ accounts to Golden Belt Feeders, Inc., of St. John, Kan., to pay debts she owed from trading cattle when she worked for Golden Belt. There were three transactions of embezzled funds totaling more than $211,000.
Sentencing is set for Sept. 11. She faces a maximum penalty of 30 years in federal prison and a fine up to $1 million on each count. Grissom commended the FBI and Assistant U.S. Attorney Lanny Welch for their work on the case.
Rapper Fat Joe Sentenced to Four Months in Prison for Failing to File Income Tax Returns on over $3.3 in Taxable IncomeRead the Press Release
NEWARK, N.J. – Joseph Cartagena, the rapper popularly known as “Fat Joe,” was sentenced to four months in prison for failing to file tax returns with the IRS, U.S. Attorney Paul J. Fishman announced.
Cartagena, 42, of Miami Beach, Fla., previously pleaded guilty before U.S. Magistrate Judge Cathy L. Waldor to Counts One and Two of a four-count information charging him with failing to file a tax return for tax years 2007 to 2010. Those two counts correlate to tax years 2007 and 2008. Under the terms of the plea agreement, however, the tax loss for all four years, including 2009 and 2010, was taken into account for sentencing.
According to documents filed in this case and statements made in court:Cartagena received income for his musical performances as well as royalties on the sales of his music. These monies came from three different sources: Terror Squad Production Inc. (Terror Squad), Miramar Music Touring Inc. (Miramar), and FJTS Corp. Cartagena owned Terror Squad and Miramar, both of which are corporations based in Somerville, N.J.
Cartagena admitted he received gross income in excess of $1.18 million in 2007, in excess of $1.28 million in 2008, in excess of $265,000 in 2009, and in excess of $630,000 in 2010. The total tax loss to the government was $718,038.
In addition to the prison term, Judge Waldor sentenced Cartagena to one year of supervised release and fined him $15,000. He must report by Aug. 26, 2013, to begin serving his sentence.
U.S. Attorney Fishman credited special agents with IRS-Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen, with the investigation leading to today’s sentence.
The case is being prosecuted by Assistant U.S. Attorney Joseph Mack of the U.S. Attorney’s Healthcare and Government Fraud Unit.
12-266Defense counsel: Jeffrey Lichtman Esq., New York
RAM Guilty PleaRead the Press Release
BATON ROUGE, LA - United States Attorney Donald J. Cazayoux, Jr. announced today the felony convictions of a wastewater brokerage firm and its two owners in connection with a wide ranging and ongoing federal and state investigation into corruption and fraud surrounding federal environmental laws.
RAM ENVIRONMENTAL SERVICES, INC., an entity incorporated in the State of Louisiana and doing business in Morgan City, Louisiana; RAYMOND MARCEL, JR., age 60, of Berwick, Louisiana; and CYRIL D. ROBICHEAUX, age 53, of Morgan City, Louisiana, each pleaded guilty today before U.S. District Judge James J. Brady to Bills of Information charging them with a conspiracy to defraud the U.S. Environmental Protection Agency and to violate the Safe Drinking Water Act.
As a result of their guilty pleas, MARCEL and ROBICHEAUX each face up to five years imprisonment, a $250,000 fine, a term of supervised release following imprisonment up to three years, and restitution. As part of its plea agreement, RAM has agreed to be sentenced to a three year term of probation, a $50,000 fine, and restitution as determined by the Court.
During today’s hearings, the defendants admitted that, in 2011 and 2012, they conspired with themselves and others to illegally discharge industrial wastewater at locations in Belle River, Louisiana, and Baton Rouge, Louisiana, and to otherwise obstruct the enforcement of the federal environmental laws through kickbacks, the creation and use of false documents, and other fraudulent means.
With regard to the Baton Rouge conduct, the defendants admitted that, in September 2012, they and others caused the illegal disposal of industrial wastewater at a site in Baton Rouge, Louisiana, and concealed such activity through the creation and use of false documents. The defendants admitted further that they undertook such fraudulent activity with the owner of the Baton Rouge site and further schemed with the site owner to lie to investigators regarding the disposals.
With regard to the Belle River conduct, the defendants admitted that, during 2011 and 2012, they paid over $22,000 in kickbacks to Michael J. Vaughn, the Operations Manager of FAS Environmental Services, a transportation and disposal company, in exchange for illegally using FAS’s injection well in Belle River to dispose of over 380,000 gallons of industrial wastewater. As part of the scheme, the defendants admitted that they and their fellow conspirators created and used over 100 false documents, including manifests and work orders, in addition to submitting false reports to regulators in Baton Rouge. Such false and fraudulent documents were designed to conceal the scheme from federal and state government officials, as well as the defendants’ unsuspecting clients.
U.S. Attorney Cazayoux stated, “Today’s convictions mark a continuation of this office’s long track record of holding to account those who violate federal criminal environmental laws. Our area is blessed to have a robust and largely law-abiding industrial presence. Unfortunately, there are some who seek economic benefit by refusing to adhere to federal environmental and safety laws. The people of this district can be assured that this office, together with our federal, state, and local partners, will continue to aggressively pursue such violators.”
“One of EPA’s primary missions is to ensure that federal laws protecting human health and the environment are enforced fairly and effectively,” said Ivan Vikin, Special Agent-in-Charge of EPA’s criminal enforcement program in Louisiana. “Violators who cause the submission of false information undermine the government’s efforts to protect the public and the environment. These illegal actions cannot and will not be tolerated. EPA and its partner agencies will vigorously pursue those who place the public at potential risk.”
“This case should serve notice that DEQ and its partners will continue to aggressively prosecute any company or individual who chooses to skirt state and federal regulations by avoiding the costs of handling, treating or disposing wastewater properly and legally,” said DEQ Secretary Peggy Hatch. “DEQ is proud of the collaborative work undertaken by the investigators to halt these illegal practices and bring the perpetrators to justice.”
Today’s charges were preceded by Vaughn, the former FAS Operations Manager, pleading guilty on May 29, 2013, to a Bill of Information charging him with conspiracy to defraud the U.S. Environmental Protection Agency and to violate the Safe Drinking Water Act, in violation of Title 18, United States Code, Section 371, making false statements within the jurisdiction of the federal government, in violation of Title 18, United States Code, Section 1001, and forfeiture. FAS ownership was unaware of the scheme involving the FAS injection well, which resulted in the misuse of FAS resources. FAS has cooperated fully throughout the investigation.
The sentencing dates for RAM, MARCEL, ROBICHEAUX, and Vaughn have not yet been set.
This ongoing investigation is being conducted by this office, the Criminal Investigation Division of the U.S. Environmental Protection Agency, and the Criminal Investigation Division of the Louisiana Department of Environmental Quality. The case is being prosecuted by Assistant United States Attorney Corey R. Amundson who serves as the Senior Deputy Chief of the Criminal Division.
Plummer Man Sentenced for Aiding Transportation of Stolen GoodsRead the Press Release
Ordered to Pay More Than $581,000 in Restitution to Stimson Lumber
COEUR D’ALENE – Trevor Mokry, 33, of Plummer, Idaho, was sentenced today in United States District Court in Coeur d’Alene for aiding the transportation of stolen goods, U.S. Attorney Wendy J. Olson announced. U.S. District Judge Edward J. Lodge sentenced Mokry to 18 months in federal prison and three years of supervised release. He was also ordered to pay $581,445.24 in restitution to the victim. He pleaded guilty to the charge on April 23, 2012.
According to court records, between June 2007 and June 2011, Mokry aided and abetted the unlawful transportation of stolen lumber while employed by Stimson Lumber Company of Plummer. According to the plea agreement, Mokry worked in the lumber yard and was responsible for loading and unloading trucks. He admitted that he entered into an unauthorized “mill direct” sales arrangement with a business located in Spokane, Washington, which involved the business' driver traveling from Spokane to Plummer to pick up lumber and then returning to Spokane. Mokry loaded the truck and received a check from the driver for the lumber. According to the plea agreement, Mokry sold Stimson's lumber to the Spokane business without the Stimson Lumber’s permission or knowledge and never paid Stimson for the lumber. Mokry admitted that he was paid $581,445.24 for the lumber.
The case was investigated by the Federal Bureau of Investigation.
Phoenix Man Sentenced to over 3 Years in Prison for Stalking A Woman in MarylandRead the Press Release
Baltimore, Maryland - U.S. District Judge Ellen L. Hollander sentenced David Charles Richards, age 49, of Phoenix, Arizona, today to 42 months in prison, followed by three years of supervised release, for stalking a woman in Maryland. As part of his sentence, Judge Hollander ordered that Richards have no contact with the victim or her family.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation.
“David Charles Richards violated the federal law against stalking, by using the internet to engage in a course of conduct that was intended to and did place a person in reasonable fear of death or serious bodily injury,” said U.S. Attorney Rod J. Rosenstein.
According to Richards’ guilty plea, from December 2006 through November 2011, Richards used the internet, telephone, electronic mail and the U.S. mail to stalk a woman in Maryland, including threatening to kill the woman. Richards and the woman had a prior romantic relationship, which the woman described as both troubled and violent.
According to Richards’ plea agreement, after not having any contact with the victim for almost 15 years, in June 2006, Richards contacted the victim’s sister telling her that he still loved the victim but wanted to hurt her. Beginning in July 2006, and during each subsequent year, the victim sought and was granted protective orders forbidding Richards to contact her. On December 11, 2006, the victim discovered that a website had been created in her name, which included a countdown clock to the expiration of the protective order the victim had taken out against Richards and other threatening material. In March of 2008, Richards attempted to purchase a firearm in Arizona, but failed to disclose that he was subject to a protective order. He was denied purchase of a firearm by ATF due to his prohibited person status. In December 2009, Richards mailed a threatening note, along with torn and shredded pieces of the protective orders that had been served upon him, to the victim’s home. Through January 2010, Richards left the victim at least eight voicemails totaling one hour and 40 minutes in length. Richards continued to post threats on websites directed at the victim, including as recently as November 2011. Richards’ long campaign of harassment and threats placed the victim in fear of death and serious harm.
United States Attorney Rod J. Rosenstein praised the FBI agents in Baltimore and Phoenix for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys Rachel M. Yasser and Kristi N. O’Malley, who prosecuted the case.
Owner of Medical Supply Company Sentenced to Prison for His Role in Million-dollar Power Wheelchair ScamsRead the Press Release
United States Attorney Laura E. Duffy announced that Jose Melendez, the owner and operator of Oceanside Medical Services, was sentenced to 18 months in prison today for his involvement in a health care fraud conspiracy that resulted in over $1 million in false claims to the Medicare trust fund. Melendez was also ordered to pay $593,429.81 in restitution, and will be on supervised release for three years after completing his custodial sentence.
The scheme involved the sale of fraudulent power wheelchair prescriptions in order to fraudulently obtain Medicare reimbursement for power wheelchairs that patients did not need and, in some cases, did not want. Two of Melendez’s co-conspirators, Dr. Irving Schwartz and Gloria Hernandez, traveled to El Centro, California in search of elderly Medicare patients. Dr. Schwartz wrote fraudulent prescriptions for the patients to obtain power wheelchairs, even though the patients did not need the equipment and could walk without assistance, and collected a $300 cash kickback in exchange for each power wheelchair prescription. Hernandez then sold the fraudulent power wheelchair prescriptions to Melendez, charging him $1,000 per fraudulent prescription.
Melendez, in turn, sold some of the power wheelchair prescriptions to other co-conspirators, charging an additional mark-up on each prescription. As the last step in the scheme, Melendez and his co-conspirators submitted the fraudulent prescriptions to Medicare for reimbursement, billing up to $5,865 for each power wheelchair. All told, Dr. Schwartz wrote at least 186 fraudulent power wheelchair prescriptions for Medicare beneficiaries in exchange for more than $55,000 in bribes and kickbacks. Melendez, the owner and operator of Oceanside Medical Services, purchased these 186 fraudulent prescriptions and used them to submit over $830,000 in false claims to Medicare. Co-conspirators Aristeo and Laura Tavares, who were charged in a separate case, submitted more than $250,000 in false Medicare claims based on Dr. Schwartz’s fraudulent prescriptions.
United States Attorney Duffy reiterated that combating health care fraud is a top priority of the Department of Justice. “Anyone attempting to defraud Medicare – whether a doctor, medical equipment supplier, or patient recruiter – will be prosecuted to the fullest extent of the law, and should understand that the prognosis includes a substantial prison sentence, like the one imposed today.” United States Attorney Duffy thanked the Federal Bureau of Investigation and Department of Health and Human Services, Office of Inspector General, for their diligence and perseverance in breaking up this health care fraud conspiracy.
Dr. Schwartz is scheduled to be sentenced on August 19, 2013, before Judge Huff. On March 27, 2013, Aristeo and Laura Tavares were sentenced to time served (1 day in custody), and ordered to pay $182,860.77 in restitution to the Medicare trust fund. Hernandez was sentenced today to 6 months home confinement, and ordered to pay $160,000 in restitution to Medicare.
DEFENDANT CRIMINAL CASE NO. 12cr2599-H Jose Melendez SUMMARY OF CHARGESCount 1: Conspiracy to Pay and Receive Health Care Kickbacks and Defraud -Title 18, United States Code, Section 371; Maximum Penalty: Five years in custody; $250,000 fine; 3 year of supervised release; and mandatory restitution.
INVESTIGATING AGENCIESFederal Bureau of Investigation
Department of Health and Human Services, Office of Inspector GeneralOswego County Man Sentenced in Listed Chemical CaseRead the Press Release
SYRACUSE, NEW YORK – Cy D. Rayder, age 29, of Williamstown, New York, was sentenced today by the Hon. Frederick J. Scullen to a term of thirty-six months imprisonment for his guilty plea to possessing and distributing a listed chemical, pseudoephedrine, knowing it was intended to be used to manufacture methamphetamine. Between September and December, 2011, Rayder purchased pseudoephedrine pills from pharmacies in Oswego, Oneida, and Jefferson counties, which pills he provided to another individual who, in turn, used the pills to manufacture methamphetamine. In return for the pills, Rayder received finished product methamphetamine, which he ingested. Eventually, Rayder learned how to manufacture methamphetamine himself, and thereafter used the pills he purchased to manufacture methamphetamine. Rayder knew there were restrictions on the sale of pseudoephedrine, and that the sales were documented by the pharmacies, so, to avoid scrutiny, Rayder on occasion purchased pseudoephedrine from different stores on the same day. On fourteen separate occasions between September and December of 2011, Rayder purchased pseudoephedrine pills with an aggregate weight of 33.6 grams of pseudoephedrine from Oswego, Oneida, and Jefferson county pharmacies, knowing at all times the pills he purchased were intended to be used in, and were in fact used in the manufacture of methamphetamine.
After he finishes his sentence of incarceration, Rayder will thereafter be placed on supervised release for a period of three years. Rayder was also ordered to pay a special assessment of $100.
The Rayder case was investigated by the New York State Police and the Syracuse Drug Enforcement Agency.
The case was prosecuted by Assistant U.S. Attorney Carl G. Eurenius, who can be reached at 448-0672.