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Monday 17 June 2013
Manhattan U.S. Attorney Announces Proposed Settlement Agreement in Pension Benefits Class Action Lawsuit Against the City of New YorkRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that the United States Attorney’s Office and the City of New York (the “City”) have entered into a settlement agreement (the “Proposed Settlement Agreement”) that, if approved by the Court, would resolve the issues raised in the class action lawsuit brought under the Uniformed Services Employment and Reemployment Rights Act of 1994 (“USERRA”) alleging unlawful calculation of the pensionable earnings of New York City Police Department (“NYPD”) officers who have performed active military service since September 11, 2001.
Manhattan U.S. Attorney Preet Bharara said: “The Proposed Settlement Agreement is an important step forward in the process of ensuring that the brave men and women who unselfishly serve both their city and their country receive the pensions they have earned, will earn, and to which they are entitled. Under the law, these dedicated public servants should not be penalized with a reduction in pension benefits for fulfilling a service to their nation. This Office believes that the Proposed Settlement Agreement achieves the best possible result not only for NYPD officers, but for all employees of the City who have chosen or may in the future choose to devote themselves to military service, and we commend the City for reaching an agreement.”
According to the Amended Complaint filed in Manhattan federal court:
The United States filed the class action lawsuit on August 2, 2012 against the City, the NYPD, and the New York City Police Pension Fund on behalf of all current and retired NYPD officers who have performed active military service since September 11, 2001, or who will do so in the future. The suit alleges that the City unlawfully calculates the pensionable earnings of NYPD officers called to active military duty by relying exclusively on their base pay rate, instead of including the overtime or night shift differential compensation they would have earned had they not been on active military duty, as required by USERRA. As a result, service members are being deprived of pension benefits they would have been reasonably likely to receive, but for their military service.
The lawsuit came in the form of an amended Complaint to three separate lawsuits previously filed by the U.S. Attorney’s Office on behalf of David Goodman, Michael Doherty, and Robert Black, three NYPD officers who were called to active military service during the time they worked for the NYPD, and whose pension benefits were unlawfully calculated. In the course of discovery in these matters, the Government learned that approximately 1,500 officers were called to active military service since September 11, 2001. The United States then moved to amend Goodman’s complaint to raise allegations on behalf of a class of similarly situated individuals. On July 30, 2012, The Honorable Richard J. Sullivan ruled that Goodman could amend his complaint to assert a class action lawsuit against the City.
In addition to the NYPD, the Proposed Settlement Agreement encompasses all municipal workers who have performed active military service since September 11, 2011. The Proposed Settlement Agreement provides the following relief:
- All retired NYPD officers who are members of the proposed class will receive the past pension benefits that they are entitled to under USERRA, as well as have their future pension benefit payments adjusted to reflect any increase that results from the recalculation.
- All active NYPD officers who have been, or will be, called to active military service will have their future pensionable earnings calculated in accordance with USERRA, and can request in writing to have their past pensionable earnings recalculated.
- The City will implement the terms of the Proposed Settlement Agreement in all of the City’s other retirement systems so that every qualified municipal worker will have his or her pensionable earnings appropriately calculated under the law.
The Court must approve the Proposed Settlement Agreement in order for it to take effect.
The Proposed Settlement Agreement has been filed with the Court as part of the plaintiffs’ motion requesting that the Court conditionally certify a class of relevant retired NYPD officers; approve the Proposed Settlement Agreement and the forms of class notice to be sent to the NYPD Class Members notifying them of the settlement and of their other rights with respect to the class action; and set a date for a hearing on the fairness of the Proposed Settlement Agreement.
The Proposed Settlement Agreement can be found on the website of the United States Attorney for the Southern District of New York at http://www.justice.gov/usao/nys/pressreleases/June13/USERRASettlementAgreement.php. More information can also be obtained by calling the civil rights hotline number at (212) 637-0840, or e-mailing [email protected].
This case is being handled by the Office’s Civil Rights Unit. Assistant United States Attorneys Tara M. La Morte and Arastu K. Chaudhury are in charge of the case.
Goodman et al. v. City of New York et al. Settlement Agreement
Man Pleads Guilty to Stealing FirearmsRead the Press Release
NEW BERN - United States Attorney Thomas G. Walker announced that in federal court today that WILLIAM DAVID DEVANE 30, of Maryland (formerly of Fayetteville, North Carolina) pled guilty before United States District Judge Louise W. Flanagan to Theft of firearms from a Federal Firearms Licensee in violation of Title 18, United States Code, Sections 922(u) and 924 and Possession of stolen firearms in violation of Title 18, United States Code, Sections 922(j) and 924.
According to the investigation, DEVANE broke into the Guns Plus business located in Spring Lake, North Carolina and stole 15 firearms in addition to ammunition, magazines, and scopes. Officers responded to the scene and found DEVANE lying on top of a moving van parked near the gun store and the stolen firearms were located nearby.
DEVANE faces a maximum sentence of 20 years imprisonment along with a total of 3 years of supervised release at his sentencing scheduled for October 2, 2013 in New Bern.
Investigation of this case was conducted by the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), the Cumberland County Sheriff’s Office, and the Spring Lake Police Department. Assistant United States Attorney S. Katherine Burnette prosecuted the case.
Man Indicted for Aggravated Sexual AbuseRead the Press Release
United States Attorney Brendan V. Johnson announced that a man has been indicted by a federal grand jury for allegedly engaging in and attempting to engage in a sexual act with a female child between January 2007 and December 2008 near Kyle, South Dakota.
Charles Anaya, age 42, was indicted by a federal grand jury on May 21, 2013 for aggravated sexual abuse. Anaya appeared before U.S. Magistrate Judge Veronica L. Duffy on June 12, 2013 and pled not guilty to the indictment.
The maximum penalty upon conviction is up to life imprisonment and a $250,000 fine. The charge is merely an accusation and Anaya is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Federal Bureau of Investigation. Assistant U. S. Attorney Wayne Venhuizen is prosecuting the case.
Anaya was remanded to the custody of the U.S. Marshal. A trial date has been set for August 20, 2013.
Long Island Man Convicted in $2 Million Extortion SchemeRead the Press Release
Earlier today, at the federal courthouse in Central Islip, New York, a jury convicted the defendant Daniel Sheehan of attempting to extort Home Depot, the national home-improvement chain, and using a destructive device, specifically a pipe bomb, in furtherance of the extortion plot. Sheehan faces a 30-year mandatory minimum sentence for planting the pipe bomb at a Huntington, New York, Home Depot store in October 2012, in furtherance of the extortion plot. Sentencing is scheduled before United States District Judge Denis R. Hurley on October 2, 2013.
The conviction was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office.
The evidence at trial established that in mid-October, 2012, Sheehan, a former Home Depot employee, sent an anonymous letter to the Home Depot store in Huntington, warning that a bomb had been placed in the store’s lighting department as a demonstration of his ability to place a bomb in the store without detection and demanded $2 million. Then, in a second letter, Sheehan warned that if Home Depot did not pay the extortion demand, Sheehan would shut down all of Home Depot’s Long Island stores on Black Friday, the day after Thanksgiving, by detonating three pipe bombs, each armed with a pound of roofing nails, in three separate Home Depot locations. On October 15, 2012, law enforcement authorities located a functional pipe bomb inside of a light fixture box on a shelf in the lighting department of the Huntington Home Depot. Bomb technicians from the Suffolk County Police Department moved the pipe bomb from a shelf to an area that could withstand the blast from a potential detonation, and they rendered the bomb harmless through a controlled render safe procedure.
On November 7, 2012, after an intensive federal, state and local law enforcement investigation, Sheehan was identified as the sender of the anonymous letters and arrested. At that time, agents seized from Sheehan the cellular phone he used to make two extortion calls to Home Depot.
“Though motivated by greed, not political ideology, this crime was an attempt to commit an act of terrorism, pure and simple. The swift, round the clock efforts of many law enforcement officers and agents put an end to the defendant’s plot to hold the people of our community for ransom,” stated United States Attorney Lynch. Ms. Lynch expressed her grateful appreciation to the Federal Bureau of Investigation, Suffolk County District Attorney’s Office, the Suffolk County Police Department, the Nassau County Police Department, and the Suffolk County Probation Department for their invaluable cooperation and assistance in the investigation.
The government’s case was tried by Assistant United States Attorney Lara Treinis Gatz.
The Defendant:
DANIEL SHEEHAN
Age: 50
Residence: Deer Park, New YorkLexington Man Convicted of Distributing Cocaine in Central KentuckyRead the Press Release
LEXINGTON, KY - Ramiro Ozuna Guerrero, 45, of Lexington, KY., was convicted Friday afternoon by a federal jury of conspiring to distribute 5 kilograms or more of cocaine.
The jury returned the verdict after a 2-day trial. The evidence established that Ozuna-Guerrero acted as a courier for a central Kentucky cocaine trafficking organization. The evidence also established that on July 24, 2012, Ozuna-Guerrero departed Lexington for Mexico, where he obtained over 5 kilograms of cocaine. Ozuna-Guerrero returned to Lexington on July 29, 2012, and provided the cocaine to Valentin Garcia-Ruiz.
On July 29, 2012, law enforcement arrested several participants in the conspiracy, including Ozuna-Guerrero, Garcia-Ruiz and Mario Sanchez Sr. Law enforcement also executed several search warrants which resulted in the recovery of over 1.5 kilograms of cocaine, 3 firearms, and $210,000, the monetary equivalent of 7-8 kilograms of cocaine.
Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky, Robert L. Corso, Special Agent in Charge, Drug Enforcement Administration (DEA), and Rodney Brewer, Commissioner, Kentucky State Police (KSP), jointly made the announcement today.
The investigation was conducted by the DEA, KSP, and the Lexington Division of Police. The United States was represented in the trial by Assistant United States Attorney Robert M. Duncan, Jr.
Ozuna-Guerrero is currently scheduled to appear for sentencing before Senior District Judge Joseph M. Hood, in Lexington, on September 16, 2013, at 10:30 a.m. Ozuna-Guerrero faces a minimum prison sentence of 10 years and maximum prison sentence of Life. However, his sentence will be imposed by the court after consideration of the United States Sentencing Guidelines and the federal statute governing the imposition of sentences.
Keshena, Wisconsin Man Sentenced to Eight Months in Prison for BurglaryRead the Press Release
United States Attorney James L. Santelle announced that Robert V. Julius, (age: 22) of Keshena, located on the Menominee Indian Reservation, in the State of Wisconsin, was sentenced on June 4, 2013, in United States District Court, Green Bay Division, to eight months of imprisonment, followed by three years on supervised release. The sentence was the result of a guilty plea by Julius on March 15, 2013, to a federal indictment charging him with burglary of a dwelling.
On May 7, 2012, Julius, entered the residence of another without permission. He took two flat screen televisions, and other items which totaled approximately $1,200.00.
The case was investigated by the Menominee Tribal Police Department, the Menominee County Sheriff’s Department, and the Federal Bureau of Investigation. The case was prosecuted by Assistant United States Attorney Benjamin L. Whittemore.
# # # #Justice Department to Monitor Election in AlabamaRead the Press Release
The Justice Department announced today that it will monitor the municipal election on June 18, 2013, in the city of Evergreen, Ala., to ensure compliance with the Voting Rights Act of 1965. The Voting Rights Act prohibits discrimination in the election process on the basis of race, color or membership in a minority language group.
Under the Voting Rights Act, the department is authorized to ask the U.S. Office of Personnel Management (OPM) to send federal observers to jurisdictions that are certified by the Attorney General or by a federal court order. Federal observers will be assigned to monitor polling place activities in Evergreen based on the Attorney General’s certification. The observers will watch and record activities during voting hours at polling locations, and Civil Rights Division attorneys will coordinate the federal activities and maintain contact with local election officials.
Each year, the department deploys hundreds of federal observers from OPM, as well as departmental staff, to monitor elections across the country. To file complaints about discriminatory voting practices, including acts of harassment or intimidation, voters may call the Voting Section of the Civil Rights Division at 1-800-253-3931.
Visit www.justice.gov/crt/voting/index.php for more information about the Voting Rights Act and other federal voting laws.Iyanbito, N.M., Man Pleads Guilty to Federal Assault ChargeRead the Press Release
ALBUQUERQUE – Mika-Jon Lowley, 23, an enrolled member of the Navajo Nation who resides in Iyanbito, N.M., pleaded guilty this morning to a federal assault charge under a plea agreement with the U.S. Attorney’s Office.
Lowley was arrested on Sept. 20, 2012, based on a criminal complaint charging him with assault resulting in serious bodily injury. Lowley subsequently was indicted and charged with (1) assault resulting in serious bodily injury; (2) assault with a dangerous weapon, and (3) robbery in Indian country. According to the indictment, Lowley committed the offenses on March 12, 2012, in McKinley County, N.M., on the Navajo Indian Reservation.
During today’s proceedings, Lowley entered a guilty plea to Count 2, charging him with assault with a dangerous weapon. Lowley admitted that on the night of March 12, 2012, he walked up to a couple in the parking lot of Fire Rock Casino, pulled out a BB gun and demanded money. He further admitted that, when the couple did not immediately comply with his demand, Lowley shot the man in the face with the BB gun.
Lowley has been in federal custody since his arrest and remains detained pending his sentencing hearing, which has yet to be scheduled. At sentencing, Lowley faces a maximum penalty of ten years in prison followed by a term of supervised release to be determined by the court.
This case was investigated by the Gallup office of the FBI and the Crownpoint office of the Navajo Nation Division of Public Safety and is being prosecuted by Assistant U.S. Attorney Mark T. Baker.
Iowa Man Sentenced for Commercial Sex TraffickingRead the Press Release
United States Attorney Brendan V. Johnson announced that a Hull, Iowa man convicted of commercial sex trafficking was sentenced on June 17, 2013 by U.S. District Judge Karen E. Schreier.
Ronald Bonestroo, age 59, was sentenced to 10 years in custody, 5 years of supervised release, and $100 to the Federal Crime Victims Fund.
Bonestroo was indicted by a federal grand jury on March 2, 2011. On November 8, 2011 he was convicted by a federal jury on the charge of commercial sex trafficking.
The conviction stems from an incident that took place on February 10, 2011 when Bonestroo replied to an online advertisement posted by undercover police officers. Bonestroo arranged to pay for sex with what he believed would be two 14-year-old girls in Sioux Falls. He was arrested after he arrived at the undercover location. After a one-day trial, a federal jury found Bonestroo guilty of commercial sex trafficking.
On January 4, 2012, U.S. District Judge Karen E. Schreier issued an Order Granting Defendant’s Motion for Judgment of Acquittal and released Bonestroo from custody. The Government appealed that decision to the Eighth Circuit Court of Appeals. On January 7, 2013 the Eighth Circuit Court of Appeals entered a Judgment reversing the U.S. District Court’s Judgment of Acquittal and reinstated Bonestroo’s conviction.
The investigation was conducted by the U.S. Immigration and Customs Enforcement's Homeland Security Investigations, the South Dakota Internet Crimes Against Children Task Force, the South Dakota Division of Criminal Investigation, the Minnehaha County Sheriff's Office, and the Sioux Falls Police Department. Assistant U.S. Attorney Jeffrey C. Clapper prosecuted the case. Bonestroo was remanded to the custody of the U.S. Marshal.
This case was brought as part of Project Safe Childhood (PSC), 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 U.S. Attorney offices and the Justice Department’s Criminal Division, Child Exploitation and Obscenity Section, PSC marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims. For more information about PSC, please visit www.projectsafechildhood.gov.
Investment Fund Owner and Operator Agrees to Plead Guilty to Defrauding Investors of Approximately $6 MillionRead the Press Release
CHARLOTTE, N.C. – An investment fund owner and operator that defrauded investors of approximately $6 million has agreed to plead guilty to securities fraud charges filed today, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. A criminal bill of information filed in U.S. District Court charged James Alexander Shepherd, 58, of Vass, N.C. with one count of securities fraud. Shepherd has agreed to plead guilty to the charge.
Joining U.S. Attorney Tompkins in making today’s announcement is John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division.
According to filed court documents and court proceedings, beginning in 2006 and through the spring of 2013, Shepherd defrauded over 100 investors in Union County and elsewhere of approximately $6 million. Court documents indicate that Shepherd perpetrated the fraud by promising his victims returns on their investments in funds Shepherd owned and controlled, including “The Shepherd Major Play Option Fund, L.P.” (the “Major Play Fund”) and the “Shepherd’s Model Hedge Fund” (the “Hedge Fund”). In addition, Shepherd had some individual investors that invested their money independent of any particular investment vehicle. Court records show that in about 2006 and unbeknownst to his investors, Shepherd began misappropriating investor money from the Major Play Fund. Shepherd used the misappropriated funds for other purposes, including to pay investors of his hedge fund, to trade in his personal accounts, and to fund the operations of Shepherd’s newsletter which offered investment news and advice to thousands of subscribers. According to court records, Shepherd also used the money to fund his personal lifestyle. Documents indicate that Shepherd built a $2 million residence in Vass, N.C. and used investor money to make mortgage payments on the residence.
According to court records, Shepherd never informed his investors of the misappropriations. To conceal his fraudulent conduct, Shepherd sent to investors certified financial statements for the Major Play fund, accompanied by an Independent Auditor’s Report which assured the investors that an independent audit on the fund had been conducted in compliance with the rules of the U.S. Commodities Futures Trading Commission (“CFTC”). The false financial statements also misrepresented to investor victims the financial condition of the fund. For example, in December 31, 2012, Shepherd represented in a fraudulent statement that the fund had a $6,041,850 cash balance, when in reality the fund had less than $100,000 at the time.
According to filed documents, Shepherd was able to obtain the Independent Auditor’s Report each year by tricking the accountant who provided it. According to common practice at the time, the accountant would send a letter of inquiry to the bank the fund held its account, requesting the fund’s cash balance. On each occasion, the accountant sent the inquiry letter to the bank's P.O. Box address provided by Shepherd and to the attention of “Charles Fisher,” who was purportedly working at the bank. In each instance, records show that the accountant would then receive a letter or fax confirmation from “Charles Fisher” verifying the Major Play Fund’s bank balance, as well as a copy of the bank statement confirming the cash balance of the fund. In reality, court documents indicate, Charles Fisher was a fictitious bank employee. Shepherd would forge the name Fisher on a fake bank letter and send forged bank statements with fake balances. Shepherd generated the fraudulent bank statements using a version of Adobe Acrobat that enabled him to type false numbers over true bank statements. Shepherd also controlled the P.O. Box the accountant’s letters were mailed to and controlled the fax number that supposedly belonged to Charles Fisher at the bank.
According to court records, Shepherd’s scheme was uncovered when in March 2013 the accountant insisted on verifying the cash balance of fund’s bank account electronically, through the audit confirmation website www.confirmation.com, which is now the commonly used method of verification by accountants. Shepherd delayed and then refused to give the accountant authority to utilize the website to verify the cash balance of the Major Play Fund, court records show. On March 26, 2013, the accountant notified the National Futures Association (NFA) that his audit opinion could no longer be relied upon.
“For seven years Shepherd used his investment fund as his personal piggy bank and repeatedly lied to his investors who trusted him with their savings. This is not the case of a single bad investment. Shepherd used his investors’ money to fund his failing investment funds and his personal lifestyle, and prolonged the fraudulent scheme through trickery and lies. Prosecuting investment schemes is a priority for this office and we will continue to go after those who make false promises and steal people’s hard-earned money,” says U.S. Attorney Tompkins.
“James Shepherd went to great lengths to conceal his criminal scheme, even creating phantom bank employees in order to fool the auditors tracking his accounts. The FBI and our law enforcement partners will keep exposing those responsible for these crimes as long as innocent people are cheated out of their hard earned money,” said John A. Strong, Special Agent in Charge of the Charlotte Division of the FBI.
The bill of information filed against Shepherd includes a notice of forfeiture, which gives notice that the defendant must forfeit to the United States all of the property involved in the offenses charged in the information, and all property which is proceeds of such offenses.
Shepherd’s initial appearance and plea hearing have not been set yet by the Court. At sentencing, Shepherd faces a maximum of 20 years in prison and a $5 million fine. As part of his plea agreement, Shepherd has agreed to pay full restitution to his victims, the amount of which will be determined by the Court at sentencing.
In a related action, today the CFTC also filed a civil enforcement action against Shepherd.
The case was investigated by the FBI. U.S. Attorney Tompkins also acknowledges the invaluable assistance provided in this case by CFTC and NFA. The prosecution is handled by Assistant United States Attorney Kurt Meyers, of the U.S. Attorney’s Office in Charlotte.
Idaho Falls Man Sentenced for Possessing Hundreds of Images of Child PornographyRead the Press Release
POCATELLO – James R. Brown, 50, of Idaho Falls, Idaho, was sentenced today in United States District Court in Pocatello to 78 months in prison followed by ten years of supervised release for possession of sexually explicit images of minors, U.S. Attorney Wendy J. Olson announced. Chief U.S. District Judge B. Lynn Winmill also ordered Brown to forfeit the computer equipment used in the offense. Brown pleaded guilty to the offense on March 27, 2013.
According to the plea agreement, Brown admitted that on August 15, 2012, he possessed a laptop computer with more than 600 sexually explicit images of minors. Forensic analysis of the computer confirmed that many of the images depicted sexual activity between adults and children under the age of 12. When interviewed by special agents of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, Brown admitted to possessing “thousands” of images of sexually explicit conduct, approximately half of which he estimated were images of minor children.
Authorities were alerted to Brown’s illegal activities in April 2011, when the Federal Bureau of Investigation learned that Brown’s e-mail account had been used to send an image of child pornography to another person. An investigation led authorities to suspect the illegal activity was being conducted using the computer network of Brown’s employer. Once notified, the company undertook an internal investigation and cooperated fully with the federal investigation. Brown’s employment was terminated in conjunction with his confession to the authorities.
The case was investigated by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), with assistance from the Federal Bureau of Investigation.
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.”
Husband and Wife Plead Guilty in Magic Valley “Spice” CaseRead the Press Release
POCATELLO – Shyloh Becker, 29, of Tigard, Oregon, is the second defendant to plead guilty in Idaho as a result of last summer’s nationwide law enforcement effort called Operation Log Jam, U.S. Attorney Wendy J. Olson announced. Becker pleaded guilty to a superseding information charging her with one count of aiding and abetting in a monetary transaction in property derived from specified unlawful activity.
Co-defendant and husband Joshua P. Becker, 33, also of Tigard, pleaded guilty on May 30, 2013, to conspiracy to launder money.
According to the plea agreement, between March 1, 2011, and June 25, 2012, Joshua Becker owned and operated A & J Distribution with other individuals, including co-defendant Allen W. Nagel. During this time, A & J Distribution distributed brands of smokeable material for further sale, commonly referred to as “spice,” under the “Hayze” label. This material contained a Schedule I controlled substance analogue. Becker admitted that he knew the material was intended for human consumption. Becker and Nagel received money from the sale of the material and engaged in monetary transactions using the funds derived from the sales. The transactions, some in excess of $10,000, included transfers, withdrawals, and deposits through a Twin Falls bank. According to the plea agreement, the total funds involved in the monetary transactions derived from the specific unlawful activity are not more than $400,000.
According to the plea agreement, Shyloh Becker admitted that she aided and abetted her husband in setting up and monitoring the bank account.
The charge of conspiracy to launder money is punishable by up to 20 years in prison, a maximum fine of $500,000, and up to five years of supervised release.
The charge of aiding and abetting in a monetary transaction in property derived from a specified unlawful activity is punishable by up to 10 years in prison, a maximum fine of $250,000, and up to three years of supervised release.
Chief U.S. District Judge B. Lynn Winmill is scheduled to sentence Joshua Becker on August 12, 2013, in Pocatello, and Shyloh Becker on September 4, 2013, in Boise.
The Beckers are two of the six people indicted by a federal grand jury in Pocatello on August 28, 2012, on charges of conspiracy to distribute a controlled substance analogue. Three co-defendants, Allen W. Nagel, 44, Gary E. Nagel, 45, and Josh Cserepes, 27, of Twin Falls, Idaho, are scheduled to enter guilty pleas to related charges on June 26.
Fourteen search warrants were executed in July 2012 by law enforcement agencies at 11 locations in Twin Falls County, and three locations in Tigard, Oregon, and Vancouver, Washington. Five individuals were arrested following their indictment in July 2012, on federal charges of conspiracy to distribute a controlled substance analogue. The warrants were related to a nationwide law enforcement action against the synthetic designer drug industry responsible for the production and sale of dangerous and deadly drugs that are often marketed as bath salts, “spice,” incense, or plant food, which are prohibited under the federal controlled substance analogue statute.
The joint investigation of the Organized Crime and Drug Enforcement Task Force (OCDETF), is led by the Drug Enforcement Administration in conjunction with Twin Falls City Police Department, Twin Falls County Sheriff's Office, U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI), Internal Revenue Service-Criminal Investigation, U.S. Customs and Border Patrol, U.S. Postal Inspection Service, Bureau of Alcohol, Tobacco, Firearms and Explosives, Idaho State Police, Ada County Sheriff's Office, Nampa City Police Department, Meridian City Police Department, Gooding County Sheriff's Office, Cassia County Sheriff's Office, and Minidoka County Sheriff's Office.
The OCDETF program is a federal multi-agency, multi-jurisdictional task force that supplies supplemental federal funding to federal and state agencies involved in the identification, investigation, and prosecution of major drug trafficking organizations.
Huntington Woman Enters Federal Guilty Plea in Connection with Heroin Distribution SchemeRead the Press Release
HUNTINGTON, W.Va. – A 30-year-old woman pleaded guilty on June 17 in connection with a heroin distribution scheme, announced U.S. Attorney Booth Goodwin. Ashlei Steinbrecher, of Huntington, pleaded guilty to aiding and abetting the distribution of heroin.
Steinbrecher’s co-conspirator, Alvaro F. Jaime, Jr., 29, of Chesapeake, Ohio, previously pleaded guilty earlier this month to aiding and abetting the distribution of heroin.
On January 23, 2013, Steinbrecher arranged a heroin transaction between Jaime and with what determined to be a DEA agent working undercover. Jaime and Steinbrecher met the undercover DEA agent at a predetermined location in Chesapeake, Ohio. Jaime, who at the time indicated that he did not have enough heroin to complete the transaction, directed Steinbrecher and the undercover DEA agent to a second location in Huntington where they met another heroin source of supply. After arriving in Huntington, Jaime met the heroin source of supply in the parking lot of a Huntington area restaurant. The source of supply handed approximately four grams of heroin to Jaime. Afterward, Jaime gave the heroin to an undercover DEA agent in exchange for $600. Steinbrecher received $200 in pre-recorded U.S. currency as payment for arranging the transaction. The transaction was recorded by law enforcement authorities using audio and video surveillance.
Steinbrecher arranged another heroin transaction on January 29, 2013. During the transaction, Steinbrecher obtained approximately four grams of heroin from her source of supply in exchange for $670 in pre-recorded funds provided by law enforcement authorities working undercover. Steinbrecher received $100 for her role in the transaction.
Steinbrecher also purchased approximately two grams of heroin from the same source of supply in exchange for $350 in February 2013. The February 2013 heroin transaction was also controlled by undercover DEA agents.
Steinbrecher faces up to 20 years in prison and a $1 million fine when she is sentenced on September 16, 2013 by Chief United States District Judge Robert C. Chambers.
Jaime faces up to 20 years in prison and a $1 million fine when he is sentenced in August.
The DEA and Huntington Police Department conducted the investigation. Assistant United States Attorney Gregory McVey is in charge of the prosecutions.
Huntington Crack Cocaine Dealer Enters Guilty Plea on Federal Drug ChargesRead the Press Release
Michael Lashawn Johnson admits distributing nearly 2 kilos of crack cocaine
HUNTINGTON, W.Va. – A Huntington man faces a mandatory minimum of 10 years in federal prison after pleading guilty on June 17 to drug distribution charges, announced U.S. Attorney Booth Goodwin. Michael Lashawn Johnson, also known as “Spank,” 34, pleaded guilty in federal court in Huntington to conspiracy to distribute 280 grams or more of crack cocaine.
Johnson sold crack cocaine during a conspiracy that began as early as 2006. During the scheme, Johnson obtained crack cocaine or powder cocaine from Columbus and brought it back to Huntington to sell. Johnson was a frequent source of supply of crack cocaine to other drug dealers in and around Huntington.
On December 6, 2010, Johnson’s vehicle was stopped along State Route 104 by members of the Ohio State Highway Patrol. During the traffic stop, an Ohio Highway Patrol police dog led a search of the defendant’s vehicle. The vehicle search yielded $33,000 in cash. On April 13, 2011, members of the Huntington Drug and Violent Crime Task Force used a confidential informant to conduct a controlled purchase of crack cocaine from Johnson. The defendant later sold the police informant 10.9 grams of crack cocaine in exchange for $700. On February 7, 2013, an arrest warrant was issued for Johnson. Members of the Huntington Drug Task Force arrested Johnson at his Huntington residence. The defendant was in possession of crack cocaine at the time of his arrest. Police also found items consistent with the production of crack cocaine inside of Johnson’s residence, along with a .40 caliber semi-automatic pistol.
The Ohio State Highway Patrol conducted a traffic stop of the defendant’s vehicle on April 29, 2006, in Jackson County, Ohio. Ohio law enforcement authorities found 515 grams of cocaine inside of Johnson’s vehicle during the traffic stop. Johnson and an associate were later convicted of a felony drug violation in the state of Ohio.
In total, Johnson is responsible for distributing approximately two kilograms of crack cocaine.
Johnson faces a mandatory minimum of 10 years and up to life in federal prison when he is sentenced on September 16, 2013 by Chief United States District Judge Robert C. Chambers.This case was investigated by the Huntington Violent Crimes and Drug Task Force. Assistant United States Attorney Gregory McVey is in charge of the prosecution.
Hui "Judy" Wang Sentenced for Wire Fraud in Connection with a $2 Million Advance Fee SchemeRead the Press Release
Defendant Bilked Customers who Sought Venture Capital FundingPORTLAND, Ore. – Hui “Judy” Wang, 46, of Laguna Niguel, California, was sentenced today to 41 months in prison by U.S. District Court Judge Ancer L. Haggerty following her guilty plea to one count of wire fraud related to an advance fee scheme. Wang was also ordered to pay restitution to the victims in the full amount of $2 million.
“People who lie to cheat others out of their hard earned money in fraud schemes such as this will be prosecuted to the full extent of the law,” said U.S. Attorney Amanda Marshall. Marshall thanked the Internal Revenue Service for their investigative efforts.
In 2007 a Vancouver business owner sought venture capital for his technology-based start-up company. He found Wang and her business, Grand Capital Financial, through her internet website, advertising the business as a real estate investment trust and financial lender. He approached Wang for her assistance in finding venture capital for his company. Wang promised him that she could secure up to $200 million for his business, but told the victim that he first had to deposit $2 million into her account for a period of 30 days in order to prove to the potential financiers that the business was operational and solvent. If the funding was secured, the deposit would be considered as an advance on her fee. Wang’s contract provided that she would return the $2 million deposit if she could not secure the promised funding within 30 days.
Over the following few months, the victim contacted potential lenders, and eventually a Portland resident agreed to provide a short-term loan of $2 million to the victim so he could pursue additional venture capital through Wang. The money was thereafter wired from Oregon to California.
As soon as the money was deposited into Wang’s account, she began to spend it. She paid off two personal mortgage loans, purchased a residence in Texas, bought two vehicles, and paid numerous personal expenses. When the 30-day window ended and no venture capital was secured, the victim asked for his money back consistent with the contract. Wang repeatedly lied, stating that funding was still being worked out, that she still had all the money, and would return it if she couldn’t secure the funding in the short term. No venture funding ever materialized. All subsequent efforts to recover the money have failed, and the victims have lost the entire advance fee given to Wang.
“Trust in the people you do business with is such an essential part of our economy, and Ms. Wang took advantage of her victim’s trust in her to satisfy her own greed,” said Kenneth J. Hines, Special Agent in Charge of IRS Criminal Investigation in the Pacific Northwest. “The 41‑month prison sentence handed down today in this case is a clear message to fraudsters that the IRS will bring the skills of its financial investigators to the task of following the money and holding the guilty accountable.”
This investigation was conducted by the Internal Revenue Service, Criminal Investigation. This case was prosecuted by Assistant U.S. Attorney Scott Erik Asphaug.
Hidalgo Resident Gets Federal Prison Time for Buying Firearms for Gulf Cartel MembersRead the Press Release
McALLEN, Texas - Ricardo Cantu Jr., 32, of Hidalgo, Texas, will be serving a 2½-year prison term for making false statements and representations on the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) form 4473, United States Attorney Kenneth Magidson announced today. Cantu pleaded guilty June 23, 2011, for making false statements with respect to information required to be kept in the records of federally licensed firearms dealers.
Today, Chief United States District Judge Ricardo H. Hinojosa sentenced Cantu to 30 months imprisonment to be followed by a three-year-term of supervised release. Judge Hinojosa took into consideration that the defendant repeatedly changed his story as to the events that happened which resulted in the sentence ultimately imposed today.
The investigation into Cantu began on July 6, 2010, when ATF and Homeland Security Investigation (HSI) agents responded to the Hidalgo Port of Entry in reference to two firearms and 6,300 rounds of ammunition being smuggled into Mexico by Andrei Antonio Torres-Vazquez. The two firearms were found to have been purchased that same day by Cantu. He was contacted and interviewed and admitted he had been hired by members of the Gulf Cartel to straw purchase firearms for their criminal organization to take into Mexico.
Previously released on bond, Cantu was allowed to remain on bond pending the issuance of an order to surrender to a U.S. Bureau of Prisons facility to be designated in the near future.
In the separate but related case, Torres-Vazquez pleaded guilty on Aug. 25, 2010, and was sentenced to 37 months in prison on Nov. 8, 2010.
The investigation was conducted by ATF and HSI. The case was prosecuted by Assistant United States Attorney Steven Schammel.
Goodman Et Al. V. City of New York Et Al. Settlement AgreementRead the Press Release
Goodman et al. v. City of New York et al. Settlement Agreement
Gang Member Is Ninth to Plead Guilty in Dodge City Racketeering CaseRead the Press Release
WICHITA, KAN. – A Dodge City man has pleaded guilty to aiding and abetting attempted murder in connection with a federal racketeering case, U.S. Attorney Barry Grissom said today.
Enrique Gobin, 23, Dodge City, pleaded guilty to one count of aiding and abetting attempted murder, which was a violent crime in aid of racketeering. In his plea, he admitted that on March 30, 2011, he was involved in the attempted murder of a Sureno gang member.
On the day of the crime, Gobin was with two fellow members of the Diablos Viejos gang – Jesus Sanchez and Andrew Gusman – and an LCC gang member named Alfonso Banda-Hernandez. All four of them were affiliated with the Nortenos street gang. At the east Love’s convenience store in Dodge City they encountered George Gonzalez, who was a known member of the rival Sureno gang. The two sides exchanged gang signs and slurs.
The Nortenos left the store and divided themselves into two cars. Gobin and Sanchez were in one car, with Gobin driving. They returned to the area of the store and pursued a car in which Gonzalez was riding. Near 1602 6th Ave., Gonzalez got out of his car and ran up an alley toward his girlfriend’s residence. Sanchez fired at least two shots from a .40 caliber handgun at Gonzalez without hitting him.
Later, when officers of the Dodge City Police Department conducted a search of Gobin’s home, they found the gun used to shoot at Gonzalez.
In his plea, Gobin admitted that robberies, assaults and other crimes were part of the way Norteno gang members built their reputations and kept their rivals at bay.
Sentencing is set for Sept. 3. Gobin was one of 23 Norteno members to be indicted in May 2012. It was only the second time a federal RICO Act indictment (Racketeer Influenced and Corrupt Organizations Act) had been filed in Kansas. Gobin is the ninth defendant in the case to enter a guilty plea.
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.
French Prosecutors Determine there are no Grounds to Appeal Mastro Extradition RulingRead the Press Release
French authorities have informed the United States that under French law, there are no grounds to appeal the June 5, 2013 ruling by the French Court of Appeal of Chambery, near Lyon, France, denying the extradition of MICHAEL R. MASTRO, 88, and LINDA A. MASTRO, 63. This concludes the French extradition proceedings in this case.
On October 24, 2012, MICHAEL and LINDA MASTRO, were arrested in France based on a criminal warrant from the Western District of Washington. On November 4, 2012, a federal grand jury in Seattle returned a Superseding indictment charging the MASTROS with a variety of bankruptcy fraud crimes and multiple counts of money laundering. At the request of the United States, French authorities began extradition proceedings in late-December 2012. The MASTROS subsequently contested extradition.
During the extradition proceedings, the French Court requested assurances that if extradited to the United States, the MASTROS would serve no time in jail. The French Court’s request was based on concerns about the health and age of the MASTROS. To address the French Court’s concerns, the United States agreed that if convicted, prosecutors would recommend no more than two years in custody for either of the MASTROS. Prosecutors further assured the French Court that if convicted, the MASTROS would have access to medically appropriate care through the U.S. Bureau of Prisons. In its June 5, 2013 ruling, the French Court decided that these assurances were insufficient and denied extradition.The United States requested that French authorities appeal the order denying extradition. However, French authorities advised that there are limited grounds for appeal in extradition matters in France. Because the French prosecutor in consultation with the French Justice Ministry determined that there were no grounds for a successful appeal, the French authorities made the decision not to appeal the French Court’s ruling.
MICHAEL R. MASTRO and LINDA A. MASTRO have a continuing obligation to return to the United States to resolve all civil and criminal matters.
The millions of dollars in assets seized from the MASTROS in France, and currently in the custody of the FBI in the United States, are unaffected by the French Court’s ruling.Former Vice President of the Wine Tasting Network Indicted for $900,000 FraudRead the Press Release
SAN FRANCISCO - A federal indictment charging Martin Christopher Edwards with twenty-three counts of mail fraud, wire fraud, and money laundering was unsealed this morning in federal court, announced United States Attorney Melinda Haag.
Edwards, 48, of Napa, California, was indicted by a federal grand jury on May 30, 2013. According to the Indictment, Edwards, the former Vice President and General Manager of The Wine Tasting Network (WTN), is alleged to have created a fictitious entity, Dufrane Compliance Trust, that purported to provide tax compliance services to WTN. In his role at WTN, Edwards allegedly created fraudulent invoices and directed WTN to make multiple payments to Dufrane Compliance Trust between May 2010 and approximately October 2012, totaling approximately $900,000. Edwards allegedly deposited these funds into an account he controlled and withdrew them for his own personal use, including the purchase of a BMW.
Edwards failed to appear at his initial appearance this morning in U.S. District Court in San Francisco. Therefore, Edwards is currently considered a fugitive. If anyone has information on Edwards’ whereabouts, please call the San Francisco field office of the FBI at (415) 553-7400.
The maximum statutory penalty for each count of mail fraud and wire fraud, in violation of Title 18, United States Code, Sections 1341 and 1343, respectively, is 20 years’ imprisonment and a fine of $250,000 or twice the gross gain or loss from the offense, plus restitution. The maximum statutory penalty for each count of money laundering, in violation of Title 18, United States Code, Section 1957, is 10 years’ imprisonment and a fine of $250,000 or twice the gross gain or loss from the offense, plus restitution. However, any sentence following conviction would be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Katherine B. Dowling and Arvon Perteet are the Assistant U.S. Attorneys who are prosecuting the case with the assistance of Rawaty Yim and Hector Lopez. The prosecution is the result of a two month investigation by the Federal Bureau of Investigation.
Please note, an indictment contains only allegations against an individual and, as with all defendants, Edwards must be presumed innocent unless and until proven guilty.
(Edwards Indictment )
(Edwards Photograph)
Former University Professor Charged in California with Engaging in Sexual Conduct with Minors and Producing Child PornographyRead the Press Release
Walter Lee Williams, a former university professor, has been indicted for allegedly engaging in sexual conduct with minors and producing child pornography, Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and Assistant Director Ronald T. Hosko of the FBI Criminal Investigative Division announced today.
Today, the FBI added Williams to its “Ten Most Wanted Fugitives” list, making him the 500th addition to the list.
Williams was charged in an indictment unsealed on Friday, June 14, 2013, in U.S. District Court in the Central District of California. The indictment, which was filed on April 30, 2013, charges Williams with one count of producing child pornography, one count of traveling for the purpose of engaging in illicit sexual conduct with a minor and two counts of engaging in illicit sexual conduct in foreign places.
The indictment alleges Williams traveled from Los Angeles to the Philippines in January 2011 to engage in sex acts with two 14-year-old boys he met online in 2010. Prior to his travel, Williams allegedly engaged in sexual activity via Internet webcam sessions with these boys and expressed a desire to visit them in the Philippines to have sex. While in the Philippines, he allegedly engaged in sex acts with both boys and produced sexually explicit photos of one of the boys. Williams fled the Los Angeles area approximately one week after returning from the Philippines.Williams is a 64-year-old White male. He is 5’9”, weighs approximately 180 pounds and has grayish-brown hair and brown eyes. Williams has previously resided in Palm Springs, Calif., and he was affiliated with a religious organization known as the Buddhist Universal Association in Los Angeles. Williams has an extensive history of travel throughout the Southeast Asia region, specifically the Philippines. He has reportedly resided in Indonesia, Polynesia and Thailand. Williams is also alleged to have owned property in Thailand. He may also travel to Mexico and Peru.
The FBI is offering a reward of up to $100,000 for information leading directly to the arrest of this subject, the newest addition to the “Ten Most Wanted Fugitives” list. This is an ongoing investigation.
Trial Attorneys Michael Grant and Herbrina Sanders from the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) are prosecuting this case. The FBI Los Angeles field office is investigating the case.
The charges contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ offices and 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.
Former Shelby County Couple Indicted for Health Care Fraud ViolationsRead the Press Release
Department of Justice
Office of Public AffairsBEAUMONT, Texas – A Center, Texas, couple now living in Elgin, Texas, has been indicted and charged with health care fraud violations in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
Bill Harvill, 59, and his wife, Cathy Harvill, 56, were indicted by a federal grand jury on Mar. 27, 2013, and charged with theft of government money. They were arrested on June 7, 2013, in Elgin, Texas, and appeared before U.S. Magistrate Zachary J. Hawthorn today for an initial appearance.
According to the indictment, from January 2007 to June 2010, the Harvills submitted false and fraudulent claims to Medicare and Medicaid in order to receive more than $624,000 from the Department of Health and Human Services.
If convicted, the Harvills each face up to10 years in federal prison.The Medicare Program (Medicare) is a health care benefit program which provides benefits to persons who are over the age of sixty-five and some persons under the age of sixty-five who are blind or disabled. The Texas Medical Assistance Program (Medicaid) is a health care benefit program, jointly funded by the State of Texas and the federal government, and helps pay for reasonable and necessary medical procedures and services provided to individuals who are deemed eligible under state low-income programs.
This case is being investigated by U.S. Department of Health and Human Services – Office of the Inspector General (HHS-OIG) and the Texas Office of the Attorney General – Medicaid Fraud Control Unit (OAG-MFCU). Assistant U.S. Attorney Nathaniel C. Kummerfeld is prosecuting this case.
A grand jury indictment is not evidence of guilt. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a cour
Former Part-Owner of Litigation Funding Company Admits Defrauding Business Partners in $869,492 Kickback ConspiracyRead the Press Release
NEWARK, N.J. – The former part-owner and underwriter for New York-based litigation funding company The Law Funder LLC, admitted today in Newark federal court to participating in a secret kickback scheme that defrauded his former business partners of approximately $869,492, U.S. Attorney Paul J. Fishman announced.
Mathew Sheldon, 39, of New York, pleaded guilty today before U.S. District Judge Dennis M. Cavanaugh to a superseding information charging him with conspiracy to commit wire fraud through the deprivation of honest services.
According to documents filed in this case and statements in court:
The Law Funder, which extends loans to plaintiffs in pending civil litigation, did business with Montclair Funding Group LLC (“MFG”) – at one time headquartered in Union City, N.J. – and its owner Rory Donadio, 43, of New York. MFG was a broker between plaintiffs seeking advances against potential recoveries in pending litigation and private entities such as Law Funder. In exchange for a broker’s fee, MFG would, among other things, gather necessary information and documents in support of funding opportunities so Law Funder could evaluate whether to fund a case and for how much. Sheldon was a 25 percent owner in Law Funder and supervised the underwriting process for the company.
Sheldon admitted that from approximately February 2005 through July 2009, he conspired with Donadio to design and execute a secret kickback scheme. Sheldon would offer certain of Law Funder’s investment opportunities to MFG in exchange for personally receiving a portion of each broker’s commission Law Funder paid MFG. Sheldon and Donadio agreed to conceal their fee-splitting arrangement from Law Funder and Sheldon’s three partners. The kickback scheme resulted in approximately $869,492 in fraudulent payments to Sheldon, which were paid by wire transfer and other means.
Sheldon also admitted that he and Donadio concealed the scheme by, among other methods, using code such as “Giants” or the letter “G” in records referring to related transactions. He acknowledged he regularly communicated with Donadio to identify the coded transactions and calculate the amount payable to Sheldon pursuant to the kickback scheme.
The conspiracy count to which Sheldon pleaded guilty carries a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gross amount of pecuniary gain or loss resulting from the offense. Sentencing is scheduled for Oct. 7, 2013.
Donadio also has pleaded guilty in connection with the scheme and awaits sentencing.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, and inspectors of the United States Postal Inspection Service, Newark Division, under the direction of Maria L. Kelokates, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorneys Joseph B. Shumofsky, Mala Ahuja Harker and Jenny Kramer of the U.S. Attorney’s Office Economic Crimes Unit, and Evan Weitz of the office’s Asset Forfeiture and Money Laundering Unit.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.stopfraud.gov.13-251
Defense counsel: Assistant Federal Public Defender Patrick N. McMahon Esq.Sheldon Superseding Information
Former Officer of National Prearranged Services, Inc. and Lincoln Memorial Life Insurance Company Sharon Nekol Province Pleads Guilty to Fraud ChargesRead the Press Release
St. Louis, MO - SHARON NEKOL PROVINCE pled guilty today before United States District Judge Jean C. Hamilton to participating in a fraudulent scheme involving the sale of prearranged funeral contracts and the misappropriation of insurance premiums that were intended to fund those contracts. Province faces up to three years in prison for her role in one of the largest frauds ever prosecuted in the Eastern District of Missouri.
According to court documents, beginning as early as 1992 and continuing until 2008, National Prearranged Services, Inc. (“NPS”) sold prearranged funeral contracts in several states, including Missouri, Illinois and Ohio. During that time, insurance companies affiliated with NPS issued life insurance policies related to those prearranged funeral contacts. As part of the contracts, the total price for funeral services and merchandise for an individual was agreed upon, and that price would remain constant regardless of when the funeral services and merchandise would be needed. Customers entering into prearranged funeral contracts would usually pay a single sum of money up-front to NPS either directly or through a funeral home that was also a party to the contract. NPS represented to individual customers, funeral homes and state regulators that funds paid by customers under the prearranged funeral contracts would be kept in a secure trust or insurance policy as required under state law.Court documents disclose, however, that NPS made use of funds paid by customers in ways that were inconsistent both with its prior and continuing representations and with the applicable state laws and regulations. Instead, NPS operated as a fraudulent Ponzi-like scheme, where customer funds were neither kept safe in bank trusts or insurance policies but instead were utilized for unauthorized purposes and the personal enrichment of NPS’ officers and others. In turn, new business became the source of funding for funerals that prior customers had previously paid for in advance.
Province, who started out as an administrative secretary, rose to hold at various times the corporate offices of President, Vice-President and Secretary of NPS and Vice-President of its affiliate Lincoln Memorial Life Insurance Company. Although Province held these titles during the course of her employment with these companies, she did not hold primary decision-making authority over the operations of those businesses. At different times Province’s duties included: notary work; signing authorizations; hiring and firing personnel; reconciling bank accounts; writing checks; making wire transfers and conveying procedures and operations from corporate officers or legal counsel to employees and contractors of the various companies.
Province pled guilty to six counts of mail fraud, wire fraud and misappropriation of insurance premiums. Province admitted that she was aware that there was a high probability that she was participating in a fraudulent scheme, but she deliberately shut her eyes to the falsity of the representations that NPS made to customers, funeral homes and state regulators. Province admitted to taking deliberate actions to avoid learning of the fraudulent nature of the scheme, while at the same time acting in furtherance of it.
Province will be sentenced November 7, 2013. Province’s co-defendants, James Douglas Cassity, Brent Douglas Cassity, Randall K. Sutton, Howard A. Wittner and David R. Wulf, are scheduled for trial starting on August 5, 2013.
Province’s case was investigated by the Federal Bureau of Investigation, Internal Revenue Service Criminal Investigation and the Postal Inspection Service. Assistant United States Attorneys Steven Muchnick, Charles Birmingham and Richard Finneran are handling the case for the U.S. Attorney’s Office.Former Employee of Timeshare Consulting Firm Pleads Guilty to Fraud Conspiracy and Unemployment FraudRead the Press Release
CAMDEN, N.J. – A former employee of The Vacation Ownership Group LLC admitted today to conspiring to defraud owners of timeshare properties, U.S. Attorney Paul J. Fishman announced.
Ryan E. Bird, a/k/a “Chris Jackson,” a/k/a “Matthew Bross,” 35, of Clementon, N.J., pleaded guilty before U.S. District Court Judge Noel L. Hillman in Camden federal court to an information charging him with one count of conspiracy to commit mail and wire fraud and one count of wire fraud.
According to documents filed in this case and statements made in court:The Vacation Ownership Group, a/k/a VO Group LLC (VO Group), purported to offer consulting services to owners of timeshares, including timeshare cancellation services. In April 2010, Bird started working at the VO Group and was trained by Adam Lacerda and VO Group managers to call customers using prepared scripts. Bird would call customers and give them the false impression that he was working for a bank or lending institution. Bird then would falsely represent that the VO Group could pay off the customers’ timeshares or have their timeshares cancelled. After hearing Bird’s false representations, some customers sent checks to the VO Group. Bird admitted to causing more than $200,000 in losses.
Bird also admitted to devising a separate scheme to defraud the N.J. Department of Labor by collecting unemployment compensation benefits while working at the VO Group. Bird pleaded guilty to a count charging him with applying for and collecting $18,104 in unemployment compensation benefits to which he was not entitled.
On Jan. 23, 2013, other members of the VO Group were charged in a Superseding Indictment with conspiracy to commit mail and wire fraud and other charges. Additional members of the VO Group were also charged by criminal complaint in April 2012. To date, 13 members of the VO Group, including Bird, have pleaded guilty to conspiring to commit mail fraud and wire fraud. As for the Lacerdas and other defendants who have not been convicted in this case, the charges and allegations against them are merely accusations and they are considered innocent unless and until proven guilty.
The mail and wire fraud conspiracy charge to which Bird pleaded guilty is punishable by a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gain or loss caused by the offense. The wire fraud charged is punishable by a maximum of 20 years in prison and a $250,000 fine, or twice the gain or loss caused by the offense. Sentencing is scheduled for Oct. 3, 2013.
U.S. Attorney Fishman credited special agents from the FBI’s Atlantic City Resident
Agency, under the direction of Special Agent in Charge Aaron T. Ford in Newark; and special
agents from the Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, under the direction of Special Agent in Charge Robert Panella, New York Region, for their roles in the investigation leading to these guilty pleas. He also thanked the N.J. Department of Labor, Benefit Payment Control Unit, for its assistance.The government is represented by Assistant U.S. Attorneys Alyson M. Oswald and R. David Walk, Jr. of the U.S. Attorney’s Office Criminal Division in Camden.
13-253
Defense counsel: Richard Coughlin Esq., Assistant Federal Public Defender, Camden, N.J.
Bird Information
Former Credit Union Teller Sentenced for Embezzling from Customer AccountsRead the Press Release
POCATELLO – Virginia Mecham, 40, of Ammon, Idaho, was sentenced today in federal court in Pocatello to two months in prison, followed by two months of home detention for embezzlement by a credit union employee, U.S. Attorney Wendy J. Olson announced. Chief U.S. District Judge B. Lynn Winmill also ordered Mecham to serve three years of supervised release and pay restitution of $23,625. She pleaded guilty to an information on February 8, 2013.
According to the plea agreement, in August 2011, customers of Westmark Credit Union in Idaho Falls, Idaho, contacted the credit union to inquire about unauthorized withdrawals from their accounts. An examination of the questionable transactions determined they were all handled by Mecham, a credit union teller. During an interview with bank officials, Mecham admitted embezzling the money and admitted that she spent it on various personal expenses.
The case was investigated by the Federal Bureau of Investigation.
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.
Former Country Club Hills Police Chief Pleads Guilty to $1.25 Million Fraud SchemeRead the Press Release
SPRINGFIELD, Ill. – Former Country Club Hills, Ill., police chief Regina R. Evans, 50, today pled guilty to charges of fraud related to a $1.25 million state grant awarded in 2009 to We Are Our Brother’s Keeper, a not-for-profit program that Evans owned with her husband, Ronald W. Evans, Jr.
A status hearing in the case against Ronald Evans, 46, former inspector general of the Country Club Hills police department, is scheduled tomorrow morning, in federal court in Springfield. Trial for Ronald Evans is currently scheduled to begin on Jul. 9, 2013.
Regina Evans appeared this afternoon before U.S. District Judge Sue E. Myerscough and entered an open plea of guilty to the following charges: conspiracy to commit wire fraud and money laundering (one count); wire fraud (three counts); and money laundering (seven counts.) There is no plea agreement between the government and Evans. Sentencing in this matter has been scheduled on Oct. 15, 2013.
In court documents and during today’s hearing, Regina Evans admitted that she and her husband owned various for-profit and not-for-profit entities, including the Prime Time Group, Inc., the Regal Theater, LLC., and We Are Our Brother’s Keeper (WAOBK.) In February 2009, on behalf of WAOBK, Evans and her husband applied for grant funding offered under the Employment Opportunities Grant Program and administered by the Illinois Department of Commerce and Economic Opportunity (DCEO.) In September 2009, DCEO disbursed the $1,250,000 award for the two-year period, beginning on June 1, 2009, and ending on May 31, 2011. The grant agreement provided for an estimated 40 participants to receive bricklaying and electrical pre-apprenticeship training and GED preparation, at the Regal Theater, another entity owned by the Evanses. In fact, Regina Evans admitted that little, if any, of the training proposed in the grant agreement, was ever completed.
Instead, Evans admitted that she concealed her true financial status and that of her various business interests from DCEO and her intent to use a substantial portion of the grant funds shortly after their disbursement for repayment of indebtedness, including delinquent mortgage indebtedness for the Regal Theater. Within six months of the grant disbursement, Evans admitted that the $1.25 million was deposited into six separate accounts at the same financial institution, including $500,000 or more which was converted to the personal use and benefit of Evans and businesses she owned, including The Prime Time Group, Inc. and The Regal Theater, LLC, and to the use and benefit of Evans’s family members, friends and associates.
In a separate but related case, trial is scheduled to begin on Sept. 3, 2013 for Regina Evans and her brother, Ricky McCoy. Evans and McCoy, 52, of Chicago, are charged with obstruction of justice, witness tampering, and conspiracy to obstruct justice and witness tampering, related to the ongoing investigation of the alleged fraudulent use of grant funds. In addition, McCoy is charged with three counts of money laundering. According to the indictment, McCoy served as the executive director of We Are Our Brother’s Keeper. The indictment alleges that on Nov. 12, 2009, a check in the amount of $16,249 was issued to McCoy, cashed, and the check’s proceeds deposited into a bank account controlled by the Evanses.
Following a hearing this morning, trial has been scheduled for Sept. 10, 2013, for Jeri L. Wright, 47, of Hazel Crest, Ill., charged with money laundering (two counts), making false statements to federal law enforcement officers (two counts), and giving false testimony before a grand jury (seven counts), related to the investigation of the alleged fraudulent use of grant funds.
Wright allegedly received three checks in November 2009, totaling approximately $28,000, purporting to be for work related to the grant; approximately $20,000 of the proceeds of the checks was allegedly deposited back into accounts controlled by the Evanses. The indictment further alleges that Wright made false statements to federal law enforcement officers when she was interviewed on various occasions in 2012, and that on Nov. 7, 2012, Wright made materially false statements to the grand jury.
Assistant U.S. Attorney Timothy A. Bass is prosecuting the case on behalf of the U.S. Attorney’s Office for the Central District of Illinois. The ongoing investigation is being conducted by participating agencies of the Central District of Illinois’ U.S. Attorney’s Office’s Public Corruption Task Force including the U.S. Postal Inspection Service, Chicago Division; the Internal Revenue Service Criminal Investigations; and, the Illinois Secretary of State Office of Inspector General. The Illinois Department of Commerce and Economic Development is also cooperating in the investigation. Individuals who wish to provide information to law enforcement regarding matters of public corruption are urged to call the U.S. Attorney’s Office at 217-492-4450.
The maximum statutory penalty for each count of the various offenses charged is as follows: conspiracy to commit wire fraud and money laundering – up to five years in prison; wire fraud - up to 20 years in prison; money laundering - up to 20 years in prison; obstruction of justice – up to 10 years in prison; witness tampering – up to 20 years in prison; conspiracy to obstruct justice and witness tampering – up to five years in prison; making a false statement to a federal law enforcement officer – up to five years in prison; providing false testimony before a grand jury – up to five years in prison.
If convicted in the obstruction case against her, Regina Evans faces additional penalties of up to 10 years in prison to be served consecutive to any sentence ordered for the underlying offenses because the offenses were allegedly committed while the defendant was on pre-trial release.
On Mar. 29, 2013, U.S. Magistrate Judge Byron Cudmore ordered that Evans be detained pending trial and her bond was revoked. Following today’s hearing, Evans was remanded to the custody of the U.S. Marshals Service.
Members of the public are reminded that an indictment is merely an accusation; the defendants whose cases remain pending are presumed innocent unless proven guilty.
Former CEO of Las Vegas Company Convicted of Securities FraudRead the Press Release
Richard A. Bailey, 57, of Las Vegas, Nevada has been convicted of securities fraud involving the willful distribution of unregistered shares in Gateway Distributors, Ltd., United States Attorney André Birotte Jr. announced today. Following a three-day trial in federal district court in Los Angeles, on June 13, 2013 a jury returned a unanimous verdict finding Bailey had violated the securities laws in April and May 2004.
According to evidence presented at trial, Bailey, the former CEO and Chief Operating Officer of Gateway Distributors Ltd., a publicly-traded company whose main business involved the sale of nutritional supplements, paid over $1 million dollars worth of the corporation’s stock to Stephen Owens during a two-month period in 2004 as purported consulting fees for services provided by Owens. Shortly thereafter, Owens liquidated the shares and wired hundreds of thousands of dollars to escrow accounts where Gateway was purchasing a resort in Utah and an office building in Las Vegas. Prosecutors charged that the stock payments to Owens were a sham and violated the securities laws because they were not paid to Owens for bona fide services he actually performed and were paid instead with the illegal intention of raising capital for the corporation.
At trial, the government presented evidence that the company’s financials were in trouble in 2004 and that the large stock distributions to Owens, which were immediately liquidated for the benefit of the company, were used as a means to raise capital for the company in a manner that violated the securities laws.
The case results from an investigation by the Federal Bureau of Investigation and the United States Internal Revenue Service - Criminal Investigation Division. Bailey is scheduled to be sentenced on September 23, 2013 by United States District Judge Otis D. Wright II.
Release No. 13-081
Former Business Manager Sentenced to 18-Month Prison Term for Stealing More Than $730,000 from D.C. Law Firm-Defendant Issued Unauthorized Checks, Paid Himself Excessive Salary-Read the Press Release
WASHINGTON – William B. McNichols, 48, who handled accounting and other financial matters for a Washington, D.C. law firm, was sentenced today to an 18-month prison term for embezzling more than $730,000, announced U.S. Attorney Ronald C. Machen Jr. and Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office.
McNichols, of Colchester, Conn., pled guilty in March 2013 to one count of mail fraud. He was sentenced by the Honorable Robert L. Wilkins of the U.S. District Court for the District of Columbia. Upon completion of his prison term, McNichols will be placed on three years of supervised release. As part of his plea agreement, he agreed to pay $732,863 in restitution to the law firm. He also is subject to a forfeiture judgment.
According to evidence presented to the Court by Assistant U.S. Attorney Sherri L. Schornstein, McNichols worked from May 2001 until March 2011 as the finance/business manager of Trister, Ross, Schadler and Gold, PLLP, a law firm. From approximately December 2007 until the summer of 2010, McNichols also performed accounting services for an affiliated company, the Ross Yoon Agency, which was based at the law firm.
Beginning in August 2004 and continuing until March 2011, McNichols embezzled about $631,736 from Trister Ross and about $101,127 from the Ross Yoon Agency. He obtained the money from Trister Ross by issuing excessive salary payments to himself and by issuing checks to pay personal credit card bills and other personal expenses. He obtained the money from the Ross Yoon Agency by issuing unauthorized checks to himself. He used the U.S. mail to send the unauthorized checks to his credit card companies and other companies.
In announcing the sentence, U.S. Attorney Machen and Assistant Director in Charge Parlave praised those who investigated the case for the FBI’s Washington Field Office. They also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialist Donna Galindo, Assistant U.S. Attorney Anthony Saler, who assisted with forfeiture issues, and Assistant U.S. Attorney Sherri L. Schornstein, who prosecuted the case.
13-214Former Agency Employee, Joplin Men Indicted for Fraud Related to Tornado BenefitsRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a former employee of an agency that administered disaster relief funds was among three former Joplin, Mo., residents who were indicted by a federal grand jury for their roles in a wire fraud conspiracy following the May 22, 2011 tornado.
Herlana L. Latham, 31, and Christopher L. Smith, 36, both of Memphis, Tenn., and John L. Williams, 30, of Cairo, Ill., were charged in a three-count indictment returned under seal by a federal grand jury in Springfield on Tuesday, June 11, 2013. The indictment was unsealed and made public following the arrests of Smith and Williams on Friday, June 14, 2013.
According to the federal indictment, Latham was employed by the Economic Security Corporation of Southwest Area in Joplin. The not-for-profit corporation administered a rental assistance program, the Missouri Housing Trust Fund Disaster Relief Program. This program disbursed funds to landlords who rented to clients who had been displaced by natural disasters, including the May 22, 2011 tornado that struck Joplin. It was a part of Latham’s duties to process applications for those funds.
Latham allegedly submitted fraudulent applications for rental assistance for payments to co-conspirators, including Smith and Williams (her boyfriend), who were not the landlords or property managers of Economic Security Corporation clients. Latham verified false landlord information on the application forms, the indictment says, which resulted in the Economic Security Corporation issuing rental assistance checks to the purported landlords.
Williams allegedly assisted Latham by ensuring that the other co-conspirators provided Latham with the proceeds of the fraud. Williams either accompanied co-conspirators when they went to cash their rental assistance checks, and collected the money at that time, the indictment says, or he collected the money at a later time.
The indictment cites a series of fraudulent financial transactions in June and July 2012 that involved five specific checks, ranging from $1,050 to $2,000.
In addition to the conspiracy, all three defendants are charged together in two counts of wire fraud.
Dickinson cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Steven M. Mohlhenrich. It was investigated by the Missouri State Highway Patrol.
Disaster Fraud Hotline
Anyone with information about disaster fraud related to the Joplin tornado should call the National Center for Disaster Fraud hotline at 866-720-5721, the Joplin Police Department at 417-623-3131, or the FBI’s Joplin office at 417-206-5700.
Florida Man Sentenced for Counterfeit Razor BladesRead the Press Release
Receives 30 Month Sentence
GRAND RAPIDS, MICHIGAN – Jeffrey Steven Telsey, 56, of Delray Beach, Florida, was sentenced for conspiring to traffic in counterfeit Gillette razorblades, announced U.S. Attorney Patrick A. Miles, Jr. U.S. District Judge Janet T. Neff sentenced the defendant to 30 months custody followed by three years of supervised release. Telsey was ordered to pay $400,506.17 in restitution and a $25,000 fine. In sentencing Telsey, Judge Neff characterized the trafficking of counterfeit merchandise as a quintessential white collar crime that is a serious offense against the public. Judge Neff expressed a desire to send a strong message of deterrence.
Along those lines, U.S. Attorney Miles noted, “Much of our nation’s value in the global economy is derived from intellectual property – ideas, brands, innovations, and creations. We must vigilantly protect those properties. Would be criminals should know that they face prosecution and serious criminal penalties when they steal from companies and the public by committing fraud through counterfeit and pirated goods.”
In January 2008, Homeland Security Investigations (HSI) learned that counterfeit Gillette Mach3 razor refills were being distributed through Meijer Stores. Officials from Meijer Stores and Proctor and Gamble (P&G), the owners of the Gillette brand, immediately cooperated with HSI. HSI coordinated a series of controlled purchases of counterfeit razorblades from Telsey, who operated a business called JCA Enterprises (JCA). At the same time, Meijer Stores conducted a company-wide recall of the Gillette razorblades to confiscate the counterfeit product.
JCA was a “diverter” business and collected odd and leftover lots of health and beauty care products for resale to wholesalers and large retail outlets. Mixed in with JCA’s legitimate business was the trafficking of counterfeit razorblades. U.S. Attorney Miles stated, “Trafficking in counterfeit products undermines the public trust. The public expectation of quality and value in brand names can be easily dashed by one bad experience.”
In November 2009, HSI executed a search warrant on JCA located in Boca Raton, Florida, and seized approximately 27,000 units of counterfeit Gillette-branded razors were identified and seized, valued at approximately $425,000 MSRP. On the same day the search warrant was executed, HSI agents seized Telsey’s business bank account which contained $400,506.17. In March 2010, HSI discovered that Telsey continued to sell counterfeit merchandise to other distributors supplying other national and regional retailers.
After a lengthy investigation, HSI determined that Telsey obtained the counterfeit merchandise from an importer in New Jersey. The importer, in turn, obtained the counterfeit razorblades from manufacturers in China. The volume of counterfeit razorblades is estimated to be in the millions of dollars. P&G advised that it is committed to the highest quality products and only manufactures its Gillette razorblades in facilities in Boston, Massachusetts, and Berlin, Germany. P&G reports that sales of counterfeit Gillette razorblades have decreased substantially since HSI’s investigation of Telsey.
“Counterfeit goods cost American brand holders billions of dollars on an annual basis,” said William Hayes, acting special agent in charge for HSI Detroit. “The unfortunate reality is that these losses are then passed on to the end user: you and me. HSI will continue to work collaboratively with our law enforcement partners to aggressively target individuals and groups involved in the trafficking of counterfeit goods.”
This case was investigated by Homeland Security Investigations. Prosecution of the case is assigned to Daniel Y. Mekaru, Assistant United States Attorney.
END
Federal Jury Convicts Father and Two Sons of Conspiracy to Distribute Oxycodone and Money LaunderingRead the Press Release
Jackie Mize Organized Doctor-Shopping Trips to Florida from Claiborne County
KNOXVILLE, Tenn. - Following a five-day trial in U.S. District Court, Knoxville, Tenn., a jury convicted Jackie, Kelvin and James Mize of Harrogate, Tenn., of conspiring to distribute oxycodone and launder the proceeds of the drug distribution.
Sentencing is set for Jackie Mize at 2:00 p.m., on Nov. 13, 2013. Kelvin and James Mize are set for Nov. 14, 2013, at 11:00 a.m. and 2:00 p.m., respectively, in U.S. District Court in Knoxville. All three face a sentence of up to 20 years in prison. The jury also ordered the forfeiture of a parcel of real estate in Harrogate, Tenn., and ordered them to pay a $3,000,000 money judgment to the United States.
Evidence presented at trial demonstrated that Jackie Mize, his two sons, Kelvin and James Mize, and other relatives and friends regularly traveled in groups to Ft. Lauderdale and St. Petersburg, Fla., to obtain prescriptions for oxycodone and other controlled substances. Jackie Mize was the organizer of the trips and paid all of the expenses of his coconspirators. The individuals involved would go to various pain clinics, obtain multiple prescriptions for these controlled substances and have them filled at pharmacies in Florida. Jackie Mize retained half of all of the pills in exchange for sponsoring the doctor-shopping trips. The conspiracy lasted for a year and a half, during which the members of this conspiracy obtained tens of thousands of pills which were sold in and around Claiborne County, Tenn The $3,000,000 money judgment ordered by the jury represents the street value of the pills sold by this organization. Mize and his sons sold pills from a “farm house” owned by Mize in Harrogate on a regular basis, which was ordered forfeited by the jury.
William C. Killian, U.S. Attorney for the Eastern District of Tennessee said, “Federal law enforcement agencies will continue to work closely with our local partners to address drug trafficking problems. We were pleased to assist local authorities in Claiborne County to take down a significant oxycodone trafficking ring.”
Law enforcement agencies participating in the joint investigation which led to the indictment and subsequent conviction of the Mizes included the Drug Enforcement Administration, Internal Revenue Service-Criminal Investigations, and Eighth Judicial Drug Task Force. Assistant U.S. Attorneys David C. Jennings and Zachary C. Bolitho represented the United States at trial.
Everett Aircraft Maintenance Company Agrees to Pay $275,000 and Implement Enhanced Compliance PoliciesRead the Press Release
An aircraft maintenance company in Everett, Washington, has agreed to settle two federal civil penalty claims brought by the U.S. Attorney’s Office on behalf of the Federal Aviation Administration (FAA). Based on its investigation, the FAA contends that from 2006-2009 Aviation Technical Services (ATS) violated FAA regulations – and thus created potential safety issues – by not following proper procedures for replacing fuselage skins and not using proper cradles to support the aircraft during maintenance work on over 40 Southwest Airline Boeing 737s.
Pursuant to the terms of the settlement, ATS has agreed to pay the government $275,000 and implement policies specifically designed to promote compliance with FAA regulations through improved quality control, engineering oversight of maintenance, safety management, and voluntary reporting of safety issues.
“The FAA’s mission is to promote safe air travel and protect our country’s passengers, and their safety regulations must be honored,” said U.S. Attorney Jenny A. Durkan. “Monitoring and enforcing compliance with FAA regulations is critical to this mission. I applaud the FAA’s efforts.”
ATS is one of the largest third-party aircraft maintenance companies in North America. As part of today’s settlement, ATS does not admit liability or agree to the government’s characterization of its conduct.
Government agencies supporting and/or participating in the successful resolution of this matter include: FAA Office of Chief Counsel; FAA Northwest Mountain Region Office of Regional Counsel; and the Office of Inspector General of the Department of Transportation.
Eagle Butte Man Pleads Guilty to Possession with Intent to Distribute A Controlled SubstanceRead the Press Release
United States Attorney Brendan V. Johnson announced that Phillip LaBatte, age 24, of Eagle Butte, South Dakota appeared before U.S. District Judge Roberto A. Lange on June 13, 2013 and pled guilty to Count III of the Indictment that charged him with Possession with Intent to Distribute a Controlled Substance.
The maximum penalty upon conviction is 5 years of imprisonment, a $250,000 fine, or both; 2 years of supervised release and an additional 2 years of supervised release upon revocation. Restitution and a $100 special assessment to the Federal Crime Victims Fund may also be ordered.
The charge stems from the investigation of burglaries in Eagle Butte, where a Cheyenne River Sioux Tribe detective learned that several juveniles committed the burglaries. Based on the investigation, the detective obtained a tribal search warrant for LaBatte’s residence. When law enforcement executed the search warrant they found at least 250 grams, but less than 1 kilogram, of marijuana along with a scale, rolling papers, and a grinder.
The investigation was conducted by the Cheyenne River Sioux Tribe Law Enforcement Division and the Northern Plains Safe Trails Drug Enforcement Task Force. Assistant U.S. Attorney Kathryn N. Rich prosecuted the case.
LaBatte was remanded to the custody of the U.S. Marshals Service pending sentencing which has been set for August 29, 2013.
Eagle Butte Man Charged with Distribution of A Controlled SubstanceRead the Press Release
United States Attorney Brendan V. Johnson announced that an Eagle Butte, South Dakota man has been indicted by a federal grand jury.
Sylvan Charles Brown, age 30, was indicted by a federal grand jury on March 13, 2013 for Distribution of a Controlled Substance. Brown appeared before U.S. Magistrate Judge Mark A. Moreno on June 13, 2013 and pled not guilty to the Indictment.
The maximum penalty upon conviction is 40 years of imprisonment, a $2,000,000 fine, or both; a mandatory period of at least 6 years of supervised release, an additional 4 years of supervised release upon revocation; and a mandatory $100 special assessment to the Federal Crime Victims Fund. Restitution may also be ordered.
The charge is merely an accusation, and Brown is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Northern Plains Safe Trails Drug Enforcement Task Force. Assistant U.S. Attorney Kathryn N. Rich is prosecuting the case.
Brown was remanded to the custody of the U.S. Marshals Service. A trial date has not been set.
Dubuque Man Pleads Guilty to Distributing Heroin Resulting in Overdose DeathRead the Press Release
A man who sold heroin to a person who overdosed and died from using the heroin pled guilty on June 13, 2013, in federal court in Cedar Rapids.
Alvin Stanley Briggs, Jr., age 50, from Dubuque, Iowa, was convicted of distribution of heroin resulting in death. At the plea hearing, Briggs admitted that on July 3, 2013, he sold $100 worth of heroin to an individual identified as S.R., and that S.R. died as a result of using that heroin.
Sentencing before United States District Court Chief Judge Linda R. Reade will be set after a presentence report is prepared. Briggs remains in custody of the United States Marshal pending sentencing. Briggs faces a mandatory minimum sentence of 20 years’ imprisonment and a possible maximum sentence of life imprisonment, a $1,000,000 fine, $100 in special assessments, and up to a lifetime term of supervised release following any imprisonment.
The case is being prosecuted by Assistant United States Attorney Dan Chatham and was investigated by the Platteville, Wisconsin, Police Department, and the Dubuque, Iowa, Drug Task Force.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 2:13-CR-01004-LRR.
Douglasville Man Sentenced for Sex TraffickingRead the Press Release
Defendant Prostituted 17-Year-Old Girls in Metro Atlanta and Montgomery, Ala.
ATLANTA - Demario Hillmon was sentenced today to 10 years in federal prison on charges of sex trafficking of a minor and transporting a minor across state lines for prostitution.
“This case is another example of a successful investigation and prosecution of a man who took advantage of vulnerable young girls by making false promises to lure them into prostitution,” said United States Attorney Sally Quillian Yates.
“Today’s sentencing is the result of the great partnership HSI has with law enforcement in Georgia in our unyielding resolve to bring sex traffickers to justice,” said Brock D. Nicholson, Special Agent in Charge of HSI Atlanta. “Trafficking children for sex is one the most deplorable crimes our HSI special agents investigate. My agency is committed to protecting those who cannot protect themselves.”
“Working with our local and federal law enforcement counterparts to investigate child sex trafficking and bring those responsible for exploiting children to justice is a priority for the GBI,” said Vernon Keenan, GBI Director.
“I would like to commend U.S. Attorney Sally Yates, her staff, and all the law enforcement partners for the investigations, apprehension and conviction of this most dangerous person in our society,” said DeKalb County Police Chief Cedric L. Alexander.
“The successful outcome of this case would not have been possible without the cooperation of all local, state and federal agencies involved in the investigation and prosecution of this case. This is another shining example of how well law enforcement in Georgia work together to protect our citizens,” said Billy Grogan, Chief of Police for the City of Dunwoody.
According to United States Attorney Yates, the charges and other information presented in court: Hillmon met young girls on “Tagged.com,” a social networking website, and on “Backpage.com,” an adult escort website. Hillmon enticed the victims to engage in prostitution by false promises of money and gifts. He then advertised the girls on internet websites and arranged for men to engage in commercial sex acts with them in and around metro Atlanta, and in Montgomery, Ala. Hillmon kept most of the money for himself.
Law enforcement officers discovered Hillmon’s sex trafficking after the family of one of the 17-year-old girls reported her as a runaway. Hapeville Police Department officers, with the assistance of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and the Georgia Bureau of Investigation, located the girl. In the process, the investigators uncovered Hillmon’s sex trafficking operation, and also identified and recovered another 17-year-old victim.Hillmon, 30, of Douglasville, Ga., was sentenced by United States District Judge Julie E. Carnes to 10 years in prison to be followed by 10 years of supervised release. Hillmon was convicted of these charges on April 8, 2013, upon his plea of guilty.
This case was investigated by Special Agents of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, Georgia Bureau of Investigation, and Detectives of the Hapeville Police Department, Dunwoody Police Department, and DeKalb County Police Department.
Assistant United States Attorney Katherine M. Hoffer prosecuted the case.
This case was brought as part of Project Safe Childhood. In February 2006, the Attorney General launched Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the United States Attorney’s Offices around the country, Project Safe Childhood marshals federal, state and local resources to apprehend and prosecute individuals who exploit children. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the HomePage for the U.S. Attorney’s Office for the Northern District of Georgia is www.justice.gov/usao/gan.
Debt Collection Agency Executive Pleads Guilty to Bank Bribery ChargeRead the Press Release
Deirdre M. Daly, Acting United States Attorney for the District of Connecticut, announced that PATRICK PINTO, 44, of Bohemia, N.Y., waived his right to indictment and pleaded guilty today before United States District Judge Stefan R. Underhill in Bridgeport to one count of conspiring to commit bank bribery while he was an executive of Oxford Collection Agency.
According to court documents and statements made in court, Oxford Collection Agency (“Oxford”) was a private financial services company that engaged in accounts receivables management, primarily debt collecting, with offices in New York, Pennsylvania and Florida. Between 2007 and 2011, Oxford executives engaged in a multi-year scheme to defraud its lender, Connecticut-based Webster Bank, as well as its investors, clients and the commercial debtors that Oxford collected from. Oxford’s victims lost more than $12 million as a result of this scheme.
The investigation also revealed that Oxford sometimes obtained and retained business with its banking clients by paying bribes and kickbacks to bank officials. As part of the scheme, PINTO, a Vice President of Oxford, and other Oxford executives made monthly payments of between $2,500 and $3,500, which were hidden in cigar boxes, to an Assistant Vice President of U.S. Bank in Ohio.
U.S. Bank and Webster Bank received funds through the U.S. Department of the Treasury Troubled Asset Relief Program (TARP).
Judge Underhill has scheduled sentencing for September 9, 2013, at which time PINTO faces a maximum term of imprisonment of five years and a fine of up to $250,000.
PINTO has been released on a $50,000 bond since his arrest on December 7, 2012.
In May 2012, Richard Pinto, Oxford Collection Agency’s Chairman of the Board, and his son, Peter Pinto, Oxford’s President and Chief Executive Officer, each pleaded guilty to one count of conspiracy to commit wire fraud, bank fraud, and money laundering and one count of wire fraud stemming from this scheme. In December 2012, Oxford Vice-President of Finance and Chief Financial Officer Randall Silver, Executive Vice President Charles Harris, and Chief Operations Officer Carlos Novelli, also pleaded guilty to various charges.
On January 30, 2013, Richard Pinto, who is now deceased, was sentenced to 60 months of imprisonment. The other defendants await sentencing.
PATRICK PINTO is the son of the late Richard Pinto.
This matter is being investigated by the Internal Revenue Service – Criminal Investigation, the Federal Bureau of Investigation, the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), and the Connecticut Securities, Commodities, and Investor Fraud Task Force. The case is being prosecuted by Assistant U.S. Attorney Liam Brennan and Special U.S. Attorney John McReynolds.
In December 2010, the U.S. Attorney’s Office and several law enforcement and regulatory partners announced the formation of the Connecticut Securities, Commodities, and Investor Fraud Task Force, which is investigating matters relating to insider trading, market manipulation, Ponzi schemes, investor fraud, financial statement fraud, violations of the Foreign Corrupt Practices Act, and embezzlement. The task force includes representatives from the U.S. Attorney’s Office; Federal Bureau of Investigation; Internal Revenue Service-Criminal Investigation; U.S. Secret Service; U.S. Postal Inspection Service; U.S. Department of Justice’s Criminal Division, Fraud Section and Antitrust Division; U.S. Securities and Exchange Commission (SEC); U.S. Commodity Futures Trading Commission (CFTC); Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP); Office of the Chief State’s Attorney; State of Connecticut Department of Banking; Greenwich Police Department and Stamford Police Department.
Citizens are encouraged to report any financial fraud schemes by calling, toll-free, 855-236-9740 or by sending an e-mail to [email protected].
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.
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]Charleston Man Pleads Guilty to Federal Crack Cocaine DistributionRead the Press Release
CHARLESTON, W.Va. – A Charleston man who sold crack cocaine to a police informant pleaded guilty on June 17 to federal drug charges, announced U.S. Attorney Booth Goodwin. Calvin Lee Boswell, also known as “Boo” and “Big Boy,” 23, pleaded guilty to seven counts of distribution of crack cocaine. On three separate occasions in October 2011, Boswell sold crack cocaine to a confidential informant working in cooperation with the Special Enforcement Unit of the Charleston Police Department.
Additionally, Boswell sold crack cocaine to a confidential informant working for the Metropolitan Drug Enforcement Network Team (MDENT) on November 26, 2012. The defendant also completed three crack cocaine transactions in December 2012. The crack cocaine transactions were completed in and around Charleston.
Boswell faces up to 20 years in prison and a $1 million fine on each count when he is sentenced on September 17, 2013 by United States District Judge John T. Copenhaver, Jr.
This case was investigated by the Special Enforcement Unit of the Charleston Police Department and MDENT. Assistant United States Attorney Joshua Hanks is in charge of the prosecution.
Cedar Rapids Man Sentenced to Nine Years for Possessing Child PornographyRead the Press Release
A man who possessed child pornography was sentenced June 13, 2013, to nine years in federal prison.
James Sumner, age 50, from Cedar Rapids, received the sentence after a March 15, 2013, jury verdict finding him guilty of three counts of possession of child pornography.Sumner was sentenced in Cedar Rapids by United States District Court Chief Judge Linda R. Reade. Sumner was sentenced to 108 months’ imprisonment. A special assessment of $300 was imposed, and Sumner must also serve a ten-year term of supervised release. He must comply with all sex offender registration and public notification requirements.
This case was prosecuted by Assistant United States Attorney Mark Tremmel and was investigated by the Cedar Rapids Police Department.
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.”
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is CR 12-92.
Cape Cod Man Sentenced for Filing A False Tax Return for His Debt Collection BusinessRead the Press Release
BOSTON – A Cape Cod man was sentenced today for filing a false tax return.
William Burr, 48, of Cataumet, Mass., was sentenced by U.S. District Judge Douglas P. Woodlock to one year and one day in prison, to be followed by one year of supervised release. Burr was also ordered to pay $101,327 in restitution to the Internal Revenue Service. In January 2013, Burr pleaded guilty to filing a false tax return.
Burr was a 50% owner of a debt collection business. During 2003, the business operated under the names Pilgrim Financial LLC and Excel Acquisitions, LLC. Between January 1 and December 31, 2003, the gross receipts earned by the business totaled $726,226, but Burr did not provide his tax preparer with information necessary to determine a correct gross receipts figure for the business. Consequently, in April 2008, Burr filed a federal partnership tax return for the year 2003, falsely reporting that the gross receipts or sales of the business in 2003 were $246,731. By filing the false return, Burr evaded the payment of approximately $101,327 in taxes.
United States Attorney Carmen M. Ortiz and William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today. The case was prosecuted by Assistant U.S. Attorney Kristina E. Barclay of Ortiz’s Pubic Corruption and Special Prosecutions Unit.
Cannonball Woman Sentenced for Two Counts of Involuntary ManslaughterRead the Press Release
BISMARCK – U.S. Attorney Timothy Q. Purdon announced that on June 17, 2013, Barbara Iron Hawk, 28, Cannonball, N.D., was sentenced by U.S. District Judge Daniel L. Hovland on two counts of involuntary manslaughter. Iron Hawk pleaded guilty to the charges on March 15, 2013.
Judge Hovland sentenced Iron Hawk to serve four years on each count to run consecutively for a total of eight years to serve in federal prison. Judge Hovland imposed a sentence greater than suggested by the Federal Sentencing Guidelines, indicating in court that this sentence was imposed because he believed the seriousness of Iron Hawk’s criminal history was underrepresented in the sentencing guideline range calculation. Judge Hovland noted that Iron Hawk’s tribal criminal history included in excess of 20 prior criminal violations involving the use of alcohol. Iron Hawk will be on supervised release for three years following the term of imprisonment. Iron Hawk was ordered to pay a $200 special assessment to the Crime Victim’s Fund and $130,146.38 in restitution.
On Nov. 8, 2012, Iron Hawk was operating a motor vehicle on N.D. Highway 24 between Cannonball and Solen, while she was intoxicated. The vehicle nearly entered the ditch on the right side of the road, but Iron Hawk over-corrected, causing the vehicle to cross the road and enter the opposite ditch, where the vehicle flipped multiple times. Two passengers in the vehicle died as a result of the injuries they sustained in the crash.
The case was investigated by the Bureau of Indian Affairs – Standing Rock Agency and the North Dakota Highway Patrol.
Assistant U.S. Attorney Gary Delorme prosecuted the case.
Cannonball Man Sentenced for Domestic Assault by a Habitual OffenderRead the Press Release
BISMARCK – U.S. Attorney Timothy Q. Purdon announced that on June 17, 2013, Ira Plenty Chief, 26, Cannonball, N.D., was sentenced by U.S. District Judge Daniel L. Hovland on a charge of domestic assault by a habitual offender. Plenty Chief pleaded guilty to the charge on March 25, 2013.
Judge Hovland sentenced Plenty Chief to serve two years and six months in federal prison, to be followed by three years of supervised release. Plenty Chief was ordered to pay a $100 special assessment to the Crime Victim’s Fund.
On July 14, 2012, Plenty Chief assaulted a woman by striking her in the face, which resulted in injuries to her eye and nose. Her injuries required medical attention. At the time, Plenty Chief had two convictions for domestic violence offenses in Standing Rock Tribal Court.
The case was investigated by the Federal Bureau of Investigation and the Bureau of Indian Affairs – Standing Rock Agency, with the assistance of the Standing Rock Tribal Prosecutor’s Office and the Standing Rock Tribal Court.
Assistant U.S. Attorney Gary Delorme prosecuted the case.
California Man Charged with Use of Interstate Facilities to Transmit Information About A MinorRead the Press Release
United States Attorney Brendan V. Johnson announced that Thomas Tatar, age 27, of Banning, California appeared before U.S. District Judge Roberto A. Lange on June 13, 2013 and pled guilty to Use of Interstate Facilities to Transmit Information about a Minor. The maximum penalty upon conviction is 5 years in custody, a $250,000 fine, or both; life of supervised release; and $100 to the Federal Crime Victims Fund.
The conviction stems from incidents that took place between March 27, 2012 and May 15, 2012, when Tatar, who was living in California, had multiple communications with a minor girl from South Dakota. The conversations took place over the internet and affected interstate commerce. Despite knowing that the victim was a minor, Tatar exchanged information with her, including phone numbers, names, and email addresses for the purpose of engaging in a relationship with her and soliciting child pornography from her. The Defendant made repeat requests that the minor photograph herself or video herself and produce material depicting a minor engaging in sexually explicit conduct or child pornography.
The investigation was conducted by the Federal Bureau of Investigation, the South Dakota Division of Criminal Investigation, and the Riverside County District Attorney’s Office of California. The case is being prosecuted by Assistant U.S. Attorney Tim Maher.
A presentence investigation was ordered and a sentencing date was set for September 10, 2013. The defendant was remanded to the custody of the U.S. Marshal pending sentencing.
Bond County Man Ordered to Serve Ten Year Federal Sentence for Possession of Child Pornography After He Completes State Court SentenceRead the Press Release
A Bond County man convicted of possession of child pornography was sentenced to ten years in federal prison on June 17, 2013, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today. Daniel Allen Neer, age 38, formerly of Mulberry Grove, Illinois, was ordered to serve the statutory maximum ten year sentence consecutively to an undischarged six year sentence he is serving based upon his 2012 conviction in Bond County, Illinois, for Aggravated Criminal Sexual Abuse of a Victim Between the age of 13 and 16. The federal case is based upon conduct which occurred in May, 2011, and the State of Illinois case was based upon criminal acts that occurred in 2010.
Following release from his federal sentence of imprisonment, Neer will serve a lifetime term of supervised release and will be required to register as a sex offender. Neer stipulated to the entry of an order requiring him to pay $1,000 in restitution to two of the victims depicted in his collection of child pornography.
The investigation started in May, 2011, when the Federal Bureau of Investigation learned that Neer had a collection of child pornography as it was conducting an investigation of other individuals in the area who were sexually exploiting minors. On May 13, 2011, an individual with actual authority over the desktop computer in defendant’s home gave authorities permission to seize and search it. On May 20, 2011, the FBI contacted defendant at his employer’s place of business in Moline, Illinois, and seized a laptop computer from him. In total, the computers contained thirty-five images of child pornography. Neer pleaded guilty to the charges on March 8, 2013.
“We are pleased that this dangerous child sex offender received a consecutive sentence, rather than the concurrent sentence he requested. We aggressively pursue and bring to justice child sex offenders and those individuals who seek to exploit children,” United States Attorney Stephen R. Wigginton said.
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.”
The case was investigated by the Federal Bureau of Investigation, Springfield Division, which operates a task force dedicated to investigating cybercrimes. The case was prosecuted by Assistant United States Attorney Suzanne M. Garrison.
Bergen County, N.J., Man Admits Giving Corrupt Payments to Dismiss Pending State Criminal ChargesRead the Press Release
NEWARK, N.J. – A Bergen County, N.J., man admitted today that he agreed to give a $10,000 corrupt payment to personnel at the Passaic County Prosecutor’s Office to dismiss criminal charges that were pending against him, U.S. Attorney Paul J. Fishman announced.
Mahmud Hammad, 36, of Rutherford, N.J., pleaded guilty before U.S. District Judge Dennis M. Cavanaugh to an information charging him with knowingly and corruptly offering, giving and agreeing to give a corrupt payment to influence and reward Passaic County Prosecutor’s Office personnel.
According to documents filed in this case and statements in court:
From May 2012 to August 2012, Hammad was a defendant in a criminal case that was pending before the Passaic County Superior Court and was being prosecuted by the Passaic County Prosecutor’s Office. On July 27, 2012, and August 8, 2012, Hammad met with an FBI undercover agent who purported to have access to authorities at the Passaic County Prosecutor’s Office. During these meetings, which were recorded by the undercover agent, Hammad agreed to pay $10,000 to personnel at the Passaic County Prosecutor’s office to have his pending criminal case dismissed. No one at the Passaic County Prosecutor’s Office was involved in the corrupt activity discussed during these meetings. During the meetings, Hammad also gave the undercover agent $1,500 cash as a “good faith” payment.
The count to which Hammad pleaded guilty is punishable by a maximum potential penalty of 10 years in prison and a $250,000 fine. Sentencing is scheduled for Oct. 7, 2013.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford, Newark, for the investigation leading to today’s guilty plea.
The Government is represented by Assistant U.S. Attorney Barbara Llanes of the Special Prosecutions Division in Newark.13-252
Hammad Information
Armed Drug Dealer Sentenced in Federal CourtRead the Press Release
MOBILE, Ala. - Michael Lazane French, 33, of Mobile, was sentenced today in federal court on drug and gun charges. French entered a guilty plea to possession with intent to distribute cocaine and using, carrying and possessing a firearm in relation to and in furtherance of a drug trafficking felony in Decemcer of 2012, and Judge Callie V.S. Granade imposed a sentence of 90 months imprisonment this afternoon.
The judge sentenced French to 30 months on the drug charge, to run consecutive to 60 months on the gun charge, for a total term of imprisonment of 90 months. When French is released from prison, he will serve a total of five years under supervised release. He was ordered to pay $200 in mandatory special assessments, but no fine was imposed.
This case was investigated by the Mobile Police Department, and the Bureau of Alcohol, Tobacco, Firearms, and Explosives. It was prosecuted by Gloria Bedwell in the United States Attorney’s Office in Mobile.
Allen Man Charged with First Degree Murder and Felony Child Abuse and NeglectRead the Press Release
United States Attorney Brendan V. Johnson announced that an Allen, South Dakota man was indicted by a federal grand jury for allegedly killing an eleven-month old boy by fracturing his skull and for abusing two other young children.
Michael Dean Dubray, 30, was indicted on June 11, 2013, for First Degree Murder and Felony Child Abuse and Neglect. He appeared before U.S. Magistrate Judge Veronica L. Duffy on June 12, 2013 and pled not guilty to the indictment. The penalty upon conviction is mandatory life imprisonment and/or a $250,000 fine.
The charges are merely an accusation and Dubray is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Bureau of Indian Affairs Office of Justice Services, the Federal Bureau of Investigation, and the Oglala Sioux Tribe Department of Public Safety. Assistant U.S. Attorney Sarah B. Collins is prosecuting the case.
Dubray was released on bond pending trial. A trial date has not been set.
Sunday 16 June 2013
Former Chicago Alderman and Nebraska Executive Among Three Convicted After Federal Bribery Conspiracy TrialRead the Press Release
CHICAGO — A former Chicago alderman, the head of a $1 billion Nebraska-based prescription medication provider, and another man were convicted today of conspiracy to commit bribery of a fictitious public official to purportedly obtain business from the Los Angeles County hospital system after a two-week trial. A federal jury deliberated approximately several hours today before returning guilty verdicts against all three defendants.
The defendants, AMBROSIO MEDRANO, 59, of Chicago; JAMES BARTA, 71, of Fremont, Neb.; and GUSTAVO BUENROSTRO, 50, of Arlington Heights, were each convicted of the single count against them. They each face a maximum penalty of five years in prison and a $250,000 fine. They remain free on bond pending sentencing, which U.S. District Judge John J. Tharp, Jr., scheduled for 1p.m. on Sept. 24.
According to the trial evidence, which included numerous audio and video recordings of conversations with the defendants, Medrano introduced an undercover FBI agent, who was posing as a purchasing agent, to Barta, the president of family-owned Sav-Rx, and Buenrostro, an associate of Barta and a former Sav-Rx employee. Barta, Buenrostro, and Medrano allegedly agreed to bribe the undercover agent and the fictitious Los Angeles County hospital official — with Barta handing a $6,500 check to the undercover agent on June 22, 2012 — to do business with Sav-Rx, a Fremont, Neb.-based national provider of managed care prescription medication services.
Between December 2011 and March 2012, Medrano, Buenrostro, and a cooperating witness discussed the scheme, resulting in a meeting attended by those three, Barta, and the undercover agent at a Chicago restaurant on March 21. During the meeting, Barta discussed Sav-Rx’s business, including a contract with Cook County. The undercover agent explained a kickback arrangement for him and the fictitious Los Angeles County hospital official, if they were to succeed in expanding Sav-Rx’s services into the Los Angeles County hospital system. Barta replied that the arrangement was okay with him. In subsequent conversations, Medrano allegedly assured the cooperating witness and undercover agent that Barta and Buenrostro wanted to do a deal with the agent and were willing to provide an initial $10,000 payment in good faith.
The same group of individuals met again on May 9 at a Chicago restaurant and continued discussing steering Sav-Rx’s services to Los Angeles County, including using Medrano and Buenrostro to be the minority participants in a contract, with Barta endorsing that idea. Barta directed Buenrostro to do research on Los Angeles County and paid the lunch bill. The undercover agent said that the fictitious hospital official was not going to take any action until there was an agreement and the official saw some money. “We understand that and that’s not the problem,” Barta replied.
On June 22, 2012, Barta, Buenrostro, and Medrano met with the undercover agent at a restaurant in Omaha. The undercover agent explained that half of the good faith money they had been discussing was for his role in brokering the contract and half was for the fictitious Los Angeles County official. The undercover agent assured Barta that the good faith payment would be refunded if Sav-Rx did not obtain a contract from the hospital system. After further discussion about the indirect manner that Barta’s payment would be funneled to the fictitious official, Barta wrote a check on a Sav-Rx operations account, payable to the undercover agent for $6,500, and gave it to the undercover agent.
The guilty verdict was announced today by Gary S. Shapiro, United States Attorney for the Northern District of Illinois, and Cory B. Nelson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.
The government is being represented by Assistant U.S. Attorneys Christopher J. Stetler and Steven Grimes.
Butler County Man SentencedTo 18+ Years for Producing Child PornRead the Press Release
WICHITA, KAN. - An Augusta, Kan., man who posed online as a teenage boy to entice middle school girls to make sexually explicit videos was sentenced Monday to 220 months in federal prison, U.S. Attorney Barry Grissom said.
Kristopher K. Sims, 30, Augusta, Kan., pleaded guilty to one count of producing child pornography. In his plea, Sims admitted that on Nov. 20, 2012, he made a recording of a 12-year-old girl engaging in a sexual act. Sims was in Kansas and the girl was in New York. He used his computer to engage in a video chat with her, which he recorded.
Sims first met the victim when she was 11 years old via Facebook. He posed as a boy who was 15 or 16 years old. Over a period of months, he communicated with her in chats and video messaging. He persuaded her to engage in sexual acts, which he captured in live video feeds from her computer.
Grissom commended the Augusta Police Department, the Wichita Police Department’s Crimes Against Children Task Force, Homeland Security Investigations and Assistant U.S. Attorney Jason Hart for their work on the case.