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31 July 2013
Oregon Man Sentenced to 20 Years in Federal PrisonRead the Press Release
Linn County Man Admits to being an Armed Career Criminal and Shooting Two Men with a Short Barreled Shotgun during a Drug DealEUGENE, Ore. – Karl David Bowman, Jr., 36, of Linn County, Oregon, appeared before U. S. District Court Chief Judge Ann Aiken in Eugene today and pled guilty to being an armed career criminal. Bowman admitted shooting two men at Cheadle Lake Park on June 16, 2012, with a short-barreled shotgun loaded with birdshot while attempting to rob them of drugs, money, and their car. The men received serious but non-life threatening injuries.
After accepting the guilty plea, Chief Judge Aiken sentenced Bowman to 20 years in prison and five years of post-prison supervision following his release. Chief Judge Aiken sentenced Bowman as an armed career criminal because he possessed the shotgun after being previously convicted of two robberies, a residential burglary, and delivery of methamphetamine.
According to court documents and statements made in court, Bowman and an accomplice met two men near Cheadle Lake in Lebanon, Oregon, to conduct a drug deal. Bowman carried a short-barreled shotgun as he walked up to the car to conduct the deal and pointed the barrel of the weapon at the driver’s head and toward the passenger. When Bowman demanded they get out of the car and give him money, drugs and the car keys, the driver tried to accelerate and Bowman shot both men. The driver was wounded in the neck and shoulder, and the passenger was wounded in the left thigh.
Linn County Sheriff deputies and Lebanon police officers arrested Bowman and his accomplice as they attempted to leave the shooting scene. Police recovered the abandoned weapon and also found drug paraphernalia and stolen property in Bowman’s vehicle. At the time of his arrest, Bowman was wanted for identification theft, forgery, theft, illegal possession of weapons, failure to appear, trespassing and traffic crimes in Oregon and Washington. He had been released from the Oregon Department of Corrections on September 8, 2011.
The defendant’s guilty plea in federal court is the result of a global settlement, whereby the 240 months in federal prison are part of a plea agreement with the U. S. Attorney’s Office, District of Oregon, Clackamas County District Attorney, Linn County District Attorney, King County Prosecuting Attorney, Lewis County Prosecuting Attorney, and Longview City Prosecuting Attorney. As part of the overall agreement, Bowman agreed that he will pay restitution to his victim in King County, Washington.
This case was investigated by the U.S. Bureau of Alcohol, Tobacco and Firearm, Oregon
State Police, Linn County Sheriff’s Office, and the Lebanon Police Department. Assistant U.S. Attorney Frank R. Papagni, Jr., with the assistance of Linn County Deputy District Attorney Coleen Cerda, prosecuted the case.
Ohio Man Sentenced to Federal Prison for Role in Nationwide Counterfeit Identification and Check RingRead the Press Release
CONCORD, N.H. –Omar K. Patterson, 43, of Cleveland Ohio has been sentenced in United States District Court for the District of New Hampshire to 36 months in prison for wire fraud, announced United States Attorney John P. Kacavas.
Between December 2009 and August 2011, Patterson travelled across the country with others cashing payroll checks at the customer service desks of Wal-Mart stores knowing the payroll checks were counterfeit. The counterfeit checks were payable to actual persons whose identities Patterson and his co-conspirators had misappropriated. Patterson facilitated the transactions by presenting counterfeit driver’s licenses with his photograph but listing the names of the payees of the checks on them. The scheme involved the negotiation of hundreds of counterfeit checks and resulted in actual losses of several hundred thousand dollars.
Patterson was arrested on August 23, 2011, when the Tilton, New Hampshire, police stopped his rental vehicle for investigation as it was leaving a local retail mall. The vehicle was found to contain counterfeiting equipment, hundreds of counterfeit checks and fake identifications.
This case was investigated by the United States Secret Service and the Tilton, New Hampshire Police Department. The case is being prosecuted by Assistant U.S. Attorney Bill Morse.
Nurse Pleads Guilty to Fraudulently Acquiring A Controlled SubstanceRead the Press Release
MINNEAPOLIS—Earlier today in federal court, a 38-year-old Madelia nurse pleaded guilty to fraudulently acquiring a controlled substance, namely oxycodone, while employed at an inpatient health care facility. Tess Marie Johnson pleaded guilty to one count of obtaining a controlled substance by fraud. Johnson, who was indicted on May 21, 2013, entered her plea before United States District Court Judge Patrick J. Schiltz.
In her plea agreement, Johnson admitted that in October 2012, she obtained for her own use Percocet tablets that had been intended for patients. Specifically, she removed the Percocet, which is oxycodone, that was intended for patients and replaced it with Tylenol tablets.
For her crime, Johnson faces a potential maximum penalty of four years in prison. Judge Schiltz will determine her sentence at a future hearing, yet to be scheduled. This case is the result of an investigation by the U.S. Drug Enforcement Administration and the Mankato Police Department. It is being prosecuted by Assistant U.S. Attorney Nicole A. Engisch.New Jersey Woman to Enter Guilty Plea in an Interstate ConspiracyRead the Press Release
Involving Bank Fraud, Money Laundering And Drug Manufacturing
ChargesThe United States Attorney’s Office for the Middle District of Pennsylvania announced that Evelyn Ugalde, age 37, of Hopatcong, New Jersey, has agreed to plead guilty to conspiracy to commit bank fraud.
The felony Information filed against Ugalde in U.S. District Court in Scranton charges that she engaged in a conspiracy involving nominees selling their credit in exchange for cash payments. Ugalde’s role in the alleged conspiracy involved the preparation, execution, and submission of a false mortgage application to IndyMac Bank for a mortgage in the amount of $216,000. In exchange for the use of her name and credit, Ugalde allegedly received cash payments. The property falsely mortgaged is located in Gilbert, Monroe County, Pennsylvania. The plea agreement is subject to the Court’s approval.
Ugalde’s co-conspirators are charged in a superseding indictment filed on June 26, 2012. They include Carlos Guerra-Lescay, age 51, Eileen Mesa, age 36, Ernesto Huerta Martin, age 51, Jose Frias, age 43, all from Newark, NJ, Vivian Cruz, age 49, and Antonio Figueredo, age 41, both from Easton, PA, and Osleivy Gomez, age 34, North Bergen, NJ. The superseding indictment alleges that the defendants engaged in a scheme to acquire properties with false financial information submitted to multiple financial institutions.
The properties, located in the Brodheadsville and Gilbert area of Monroe County, as well as in New Jersey, were then used to facilitate an indoor marijuana growing operation. Search warrants executed by the Pennsylvania State Police at three of the properties in August 2011 uncovered an alleged large-scale indoor marijuana grow operation.
This case was investigated by the Drug Enforcement Administration, the Department of the Treasury - Internal Revenue Service, and the Pennsylvania State Police. Prosecution has been assigned to Assistant United States Attorney Michelle Olshefski.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilty is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
In this case, the maximum penalty under the federal statute is five years’ imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
Morgantown Resident Sentenced to More than Six Years Imprisonment on Firearms ConvictionRead the Press Release
CLARKSBURG, WEST VIRGINIA - United States Attorney William J. Ihlenfeld, II announced that the following individuals recently appeared in Federal Court in Clarksburg.
SAMAD MADIR HARVEY a/k/a “WES,” age 30, of Morgantown, was sentenced to
77 months imprisonment to be followed by three years of supervised release. HARVEY was convicted on April 18, 2013, by a Clarksburg jury on one count of “Felon in Possession of a Firearm.” HARVEY was remanded to the custody of the United States Marshal pending designation to a Federal institution. This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Morgantown Police Department.DANNY POSTON, age 24, of Pittsburgh, Pennsylvania, was sentenced to 70 months imprisonment to be followed by eight years of supervised release for “Possession with Intent to Distribute in Excess of 28 Grams of Cocaine Base within 1,000 Feet of Monticello Avenue Playground” on June 2, 2011. POSTON was remanded to the custody of the United States Marshal pending designation to a Federal institution. This case was investigated by the Harrison County Drug Task Force consisting of officers from the Clarksburg Police Department, the Harrison County Sheriff’s Department and the Bridgeport Police Department
The HARVEY and POSTON cases were prosecuted by Assistant United States
Attorney Zelda E. Wesley.TROY ANTJUAN CLAYTON a/k/a “NY” a/k/a “PASTOR,” age 29, of Clarksburg, was sentenced to 77 months imprisonment to be followed by six years of supervised release. CLAYTON entered pleas of guilty on April 8, 2013, to one count of “Conspiracy to Distribute More than 28 Grams of Crack Cocaine”, six counts of “Distribution of Crack Cocaine within
1,000 Feet of a Protected Location,” one count of “Maintaining a Drug-Involved Premise” to store, distribute and use crack cocaine, and one count of “Distribution of Crack Cocaine.” CLAYTON was remanded to the custody of the United States Marshal pending designation to a Federal institution.TAMMY KENNEDY, age 46, of Clarksburg, was sentenced to 30 months imprisonment to be followed by six years of supervised release for the “Distribution of Crack Cocaine within
1,000 Feet of Glen Elk City Park” on June 21, 2012. KENNEDY was remanded to the custody of the United States Marshal pending designation to a Federal institution.The CLAYTON and KENNEDY cases were prosecuted by Criminal Chief Shawn A. Morgan and investigated by the Harrison County Drug Task Force consisting of officers from the Clarksburg Police Department, the Harrison County Sheriff’s Department and the Bridgeport Police Department.
KHALLID CARTER, age 23, entered a plea of guilty to “Assault of a Correctional Officer Causing Injury” on October 30, 2012, when CARTER assaulted three correctional officers during an incident in the Special Housing Unit. CARTER was sentenced to 36 months imprisonment to run consecutive with his current 120-month sentence.
NATHANIEL TARVER, age 24, entered a plea of guilty to “Possession of a Prohibited Object” on October 10, 2012, when TARVER was found to be in possession of homemade weapon. TARVER was sentenced to twelve months imprisonment to run consecutive to his current 261-month sentence.
JEFFREY DUBLIN, age 45, entered a plea of guilty to “Possession of a Prohibited Object” on July 28, 2012,when DUBLIN was found to be in possession of marijuana. DUBLIN was sentenced to two months imprisonment to run consecutive to his current 96-month sentence.
The CARTER, TARVER and DUBLIN cases were prosecuted by Assistant United States Attorney Brandon S. Flower and investigated by the Special Investigative Services Unit at USP Hazleton.
JOHN HARLOW, age 46, of Clarksburg, was sentenced to 57 months imprisonment to be followed by three years of supervised release for “Possession of a Firearm by a Convicted Felon.” HARLOW was remanded to the custody of the United States Marshal pending designation to a Federal institution. This case was prosecuted by Criminal Chief Shawn A. Morgan and investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Mobridge Man Charged with Failure to Register as A Sex OffenderRead the Press Release
United States Attorney Brendan V. Johnson announced that a Mobridge, South Dakota, man has been indicted by a federal grand jury.
Brandon James Noisy Hawk, age 31, was indicted on July 17, 2013, for failing to register as a sex offender. Noisy Hawk appeared before U.S. Magistrate Judge William D. Gerdes on July 25, 2013, and pled not guilty to the Indictment.
The maximum penalty upon conviction of the charge is 10 years imprisonment, a $250,000 fine, or both, 5 years up to life of supervised release, and a $100 special assessment to the Federal Crime Victims Fund. Restitution may also be ordered.
The charge is merely an accusation, and Noisy Hawk is presumed innocent until and unless proven guilty.
The investigation is being conducted by the U.S. Marshals Service. Assistant U.S. Attorney Troy R. Morley is prosecuting the case.
Noisy Hawk was remanded to the custody of the U.S. Marshals Service. A trial date has not been set.
Mobridge Man Charged with Failure to Register as A Sex OffenderRead the Press Release
United States Attorney Brendan V. Johnson announced that a Mobridge, South Dakota, man has been indicted by a federal grand jury.
Brandon James Noisy Hawk, age 31, was indicted on July 17, 2013, for failing to register as a sex offender. Noisy Hawk appeared before U.S. Magistrate Judge William D. Gerdes on July 25, 2013, and pled not guilty to the Indictment.
The maximum penalty upon conviction of the charge is 10 years imprisonment, a $250,000 fine, or both, 5 years up to life of supervised release, and a $100 special assessment to the Federal Crime Victims Fund. Restitution may also be ordered.
The charge is merely an accusation, and Noisy Hawk is presumed innocent until and unless proven guilty.
The investigation is being conducted by the U.S. Marshals Service. Assistant U.S. Attorney Troy R. Morley is prosecuting the case.
Noisy Hawk was remanded to the custody of the U.S. Marshals Service. A trial date has not been set.
Michigan Man Sentenced to 165 Years <br /> for Child Sex Tourism OffensesRead the Press Release
A former Michigan resident was sentenced today in Miami to 165 years in prison, followed by a lifetime of supervised release, for child sex tourism offenses, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, U.S. Immigration and Customs Enforcement (ICE) Deputy Director Daniel Ragsdale, and Special Agent in Charge Alysa D. Erichs of the ICE Homeland Security Investigation’s (HSI) Miami Office.
Matthew Andrew Carter, 68, aka “William Charles Harcourt” and “Bill Carter,” formerly of Brighton, Mich., was sentenced by U.S. District Judge Joan A. Lenard of the Southern District of Florida. On Feb. 28, 2013, a jury found Carter guilty of five counts of traveling in foreign commerce from the United States to Haiti for the purpose of engaging in illicit sexual conduct with children and one count of attempting to do so.
“For 15 years, Matthew Carter, under the guise of serving as an international humanitarian, sexually abused more than 50 Haitian children,” said Acting Assistant Attorney General Raman. “He held himself out as a savior to vulnerable children in Haiti, but in fact cruelly forced those children to choose between poverty and submitting to repeated sexual abuse. Child sex tourism is a heinous crime, and today's sentence demonstrates our commitment to bringing the weight of justice on anyone who seeks to exploit our most vulnerable citizens, wherever they reside.”
“Today’s sentence brings to a close a horrific chapter in the lives of these victims,” said U.S. Attorney Ferrer. “While nothing can ever undo the abuse these victims endured throughout the years, we hope that today’s sentence restores them with some sense of confidence and trust, and satisfaction that justice has been served.”
“Crimes against children are some of the most heinous our agency investigates,” said ICE Deputy Director Daniel Ragsdale. “It is even more despicable that Mr. Carter used his position of trust to abuse children who relied on him for care. Today’s sentence should serve as notice to other child predators. We will find you, arrest you and make sure that you are prosecuted to the fullest extent of the law.”
According to court documents and evidence presented at trial, from 1995 to 2011, Carter resided at and operated the Morning Star Center near Port-au-Prince, Haiti, prior to his arrest on May 8, 2011. The Morning Star Center was a residential facility that provided shelter, food, clothing and school tuition to Haitian children. The children who lived at the Morning Star Center were from impoverished families that could not feed, educate or otherwise support their children. The evidence at trial showed that Carter specifically targeted children in need and preyed on their vulnerability. Between 1995 and 2011, Carter frequently traveled between the United States and Haiti in order to raise funds from churches and donors for the continued operation of the center. Carter sexually and physically abused the children in his care and custody at the center during this period of time. According to court documents and evidence presented at trial, Carter used force to get these children to comply with his sexual demands and required the children to participate in sexual acts in order to receive food, remain at the center and/or continue to receive school tuition payments.
At trial, 16 Haitian victims who resided at the Morning Star Center between 1995 and 2011 testified. Additionally, four witnesses testified that they were sexually abused by Carter in London during the 1970s. Carter previously was charged with and acquitted of charges related to the sexual abuse of children in London, Cairo and Winter Haven, Fla.
The case was investigated by HSI Miami, HSI Country Attaché Santo Domingo, Dominican Republic, and the HSI Santo Domingo Transnational Criminal Investigative Unit. Substantial assistance was provided by the U.S. Secret Service Miami field office; Haitian National Police Brigade for the Protection of Minors; Haitian Social Services; Ministry of the Interior for Haiti; Bureau of Diplomatic Security, Regional Security Office for the U.S. Embassy in Port-au-Prince; Consular Section of the U.S. Embassy in Port-au-Prince; London Metropolitan Police Service; FBI’s Washington, Boston and Miami Field Offices; ICE-HSI Attaché’s Offices in London and Cairo; U.S. Coast Guard; and U.S. Citizenship and Immigration Service in Port-au-Prince.
The case was prosecuted by Trial Attorney Bonnie L. Kane of the Criminal Division’s Child Exploitation and Obscenity Section and Assistant U.S. Attorney Maria K. Medetis of the Southern District of Florida.
Michigan Man Sentenced to 165 Years for Child Sex Tourism OffensesRead the Press Release
A former Michigan resident was sentenced today in Miami to 165 years in prison, followed by a lifetime of supervised release, for child sex tourism offenses, announced U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Immigration and Customs Enforcement (ICE) Deputy Director Daniel Ragsdale, and Special Agent in Charge Alysa D. Erichs of the ICE Homeland Security Investigation’s (HSI) Miami Office.
Matthew Andrew Carter, 68, aka “William Charles Harcourt” and “Bill Carter,” formerly of Brighton, Mich., was sentenced by U.S. District Judge Joan A. Lenard of the Southern District of Florida. On Feb. 28, 2013, a jury found Carter guilty of five counts of traveling in foreign commerce from the United States to Haiti for the purpose of engaging in illicit sexual conduct with children and one count of attempting to do so.
“Today’s sentence brings to a close a horrific chapter in the lives of these victims,” said U.S. Attorney Ferrer. “While nothing can ever undo the abuse these victims endured throughout the years, we hope that today’s sentence restores them with some sense of confidence and trust, and satisfaction that justice has been served.”
“For 15 years, Matthew Carter, under the guise of serving as an international humanitarian, sexually abused more than 50 Haitian children,” said Acting Assistant Attorney General Raman. “He held himself out as a savior to vulnerable children in Haiti, but in fact cruelly forced those children to choose between poverty and submitting to repeated sexual abuse. Child sex tourism is a heinous crime, and today's sentence demonstrates our commitment to bringing the weight of justice on anyone who seeks to exploit our most vulnerable citizens, wherever they reside.”
“Crimes against children are some of the most heinous our agency investigates,” said ICE Deputy Director Daniel Ragsdale. “It is even more despicable that Mr. Carter used his position of trust to abuse children who relied on him for care. Today’s sentence should serve as notice to other child predators. We will find you, arrest you and make sure that you are prosecuted to the fullest extent of the law.”
According to court documents and evidence presented at trial, from 1995 to 2011, Carter resided at and operated the Morning Star Center near Port-au-Prince, Haiti, prior to his arrest on May 8, 2011. The Morning Star Center was a residential facility that provided shelter, food, clothing and school tuition to Haitian children. The children who lived at the Morning Star Center were from impoverished families that could not feed, educate or otherwise support their children. The evidence at trial showed that Carter specifically targeted children in need and preyed on their vulnerability. Between 1995 and 2011, Carter frequently traveled between the United States and Haiti in order to raise funds from churches and donors for the continued operation of the center. Carter sexually and physically abused the children in his care and custody at the center during this period of time. According to court documents and evidence presented at trial, Carter used force to get these children to comply with his sexual demands and required the children to participate in sexual acts in order to receive food, remain at the center and/or continue to receive school tuition payments.
At trial, 16 Haitian victims who resided at the Morning Star Center between 1995 and 2011 testified. Additionally, four witnesses testified that they were sexually abused by Carter in London during the 1970s. Carter previously was charged with and acquitted of charges related to the sexual abuse of children in London, Cairo and Winter Haven, Fla.
The case was investigated by HSI Miami, HSI Country Attaché Santo Domingo, Dominican Republic, and the HSI Santo Domingo Transnational Criminal Investigative Unit. Substantial assistance was provided by the U.S. Secret Service Miami field office; Haitian National Police Brigade for the Protection of Minors; Haitian Social Services; Ministry of the Interior for Haiti; Bureau of Diplomatic Security, Regional Security Office for the U.S. Embassy in Port-au-Prince; Consular Section of the U.S. Embassy in Port-au-Prince; London Metropolitan Police Service; FBI’s Washington, Boston and Miami Field Offices; ICE-HSI Attaché’s Offices in London and Cairo; U.S. Coast Guard; and U.S. Citizenship and Immigration Service in Port-au-Prince.
The case was prosecuted by Assistant U.S. Attorney Maria K. Medetis of the Southern District of Florida and Trial Attorney Bonnie L. Kane of the Criminal Division’s Child Exploitation and Obscenity Section.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Melbourne Man Convicted of Firearm and Drug OffensesRead the Press Release
Orlando, Florida - Acting United States Attorney A. Lee Bentley, III announces that a federal jury today found Lander Carlton McLoyd (39, Melbourne) guilty of possession with intent to distribute cocaine base and marijuana, possession of a firearm in furtherance of a drug trafficking crime, and possession of a firearm by a convicted felon. McLoyd faces a mandatory minimum sentence of 15 years, up to a maximum penalty of life in federal prison. His sentencing hearing is scheduled for October 2013. McLoyd was indicted on January 30, 2013.
According to evidence presented at trial, a confidential source working at the direction of law enforcement purchased cocaine base from McLoyd's residence in Melbourne, on two separate occasions. A search warrant was executed at the residence on October 12, 2012. During the execution of that search warrant, investigators found, among other things, cocaine base, marijuana, and three loaded firearms. McLoyd has a prior federal felony conviction for conspiracy and possession with intent to distribute cocaine base, as well as prior state felony convictions for vehicular homicide, cocaine possession, and uttering a forged instrument. Due to his prior federal conviction, he is facing enhanced penalties at sentencing.
This case was investigated by the Melbourne Police Department, the Drug Enforcement Administration, the Bureau of Alcohol, Tobacco, Firearms, and Explosives, and the Florida Department of Law Enforcement. It is being prosecuted by Assistant United States Attorney Roger B. Handberg.
McLaughlin Man Charged with Burglary and AssaultRead the Press Release
United States Attorney Brendan V. Johnson announced that a McLaughlin, South Dakota, man has been indicted by a federal grand jury.
Lehi James Demarrias, Sr., age 31, was indicted on July 23, 2013, for Burglary, Assault With a Dangerous Weapon, and Assault Resulting in Serious Bodily Injury. Demarrias appeared before U.S. Magistrate Judge William D. Gerdes on July 26, 2013, and pled not guilty to the Indictment.
The maximum penalty upon conviction of the burglary charge is 25 years of imprisonment. The maximum penalty upon conviction on each of the assault charges is 10 years of imprisonment. All counts include a $250,000 fine, or both; 3 years of supervised release, an additional 2 years of supervised release upon revocation; and a mandatory $100 special assessment to the Federal Crime Victims Fund. Restitution may also be ordered.
The charges are merely accusations, and Demarrias is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Bureau of Indian Affairs, Standing Rock Agency. Assistant U.S. Attorney Troy R. Morley is prosecuting the case.
Demarrias was remanded to the custody of the U.S. Marshals Service. A trial date has not been set.
McLaughlin Man Charged with AssaultRead the Press Release
United States Attorney Brendan V. Johnson announced that a McLaughlin, South Dakota, man has been indicted by a federal grand jury.
Arnold Schott, age 79, was indicted on July 17, 2013, for Assault By Striking, Beating and Wounding. Schott appeared before U.S. Magistrate Judge William D. Gerdes on July 25, 2013, and pled not guilty to the Indictment.
The maximum penalty upon conviction of the charge is 6 months imprisonment, a $5,000 fine, or both, up to 5 years of probation, and a $10 special assessment to the Federal Crime Victims Fund. Restitution may also be ordered.
The charges are merely accusations, and Schott is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Bureau of Indian Affairs, Standing Rock Agency. Special Assistant U.S. Attorney Grant Walker is prosecuting the case.
Schott was released on bond. A trial date has not been set.
Massillon Man Accused of Embezzling $442,000 from ClientsRead the Press Release
A criminal information was charging a Massillon man with bank embezzlement and false returns related to a scheme in which he defrauded four clients out of $442,072, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
The information alleges that David Lee Cheviron, 61,was a financial consultant at First Merit Bank, Huntington Bank, and JP Morgan Chase Bank between 2006 and 2010, during which time he embezzled the money from the clients.
Cheviron converted the money for his own personal use. Cheviron also failed to report the funds he received from the schemes on his federal tax returns, according to the information.
If convicted, the defendant’s sentence will be determined by the court after review of factors unique to this case, including the defendant’s prior criminal record, if any, his role in the offense, and the characteristics of the violation. In all cases the sentences will not exceed the statutory maximum and in most cases it will be less than the maximum.
This case is being prosecuted by Assistant United States Attorney Vasile C. Katsaros, following an investigation by the Federal Bureau of Investigation and the Internal Revenue Service.
An information is only a charge and is not evidence of guilt. The Defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
#####Lyons Man Pleads Guilty to Producing Child PornographyRead the Press Release
GRAND RAPIDS, MICHIGAN – Floyd Andrew Brown, Jr., 35, of Lyons, Michigan pleaded guilty before the Hon. Ellen Carmody, U.S. Magistrate Judge, to two counts of producing child pornography, U.S. Attorney Patrick A. Miles, Jr. announced today. Brown faces a minimum of 15 years and a maximum of 60 years of imprisonment, and he will be required to serve a term of supervised release after his prison term has been completed. Brown will also be required to register as a sexual offender.
Brown admitted at the plea hearing that he had sexually abused young girls and had produced child pornography videos and images at his home in Ionia County. He also admitted that on other occasions, he had used and attempted to use other minor females to create child pornography. Finally, Brown admitted to possessing child pornography images at various times in November and December 2012. Brown was ultimately taken into custody in December 2012, and he remains in custody pending sentencing.
This case is part of Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. The U.S. Attorney's Office, county prosecutor's offices, the Internet Crimes Against Children task force (ICAC), federal, state, and local law enforcement are working closely together to locate, apprehend, and prosecute individuals who exploit children. The partners in Project Safe Childhood work to educate local communities about the dangers of online child exploitation, and to teach children how to protect themselves.
For more information about Project Safe Childhood, please visit the following web site: www.projectsafechildhood.gov. Individuals with information or concerns about possible child exploitation should contact local law enforcement officials.The Department of Homeland Security, Homeland Security Investigations (HSI) and the
Michigan State Police (MSP) investigated the case. Assistant U.S. Attorney Sean M. Lewis prosecuted the case.
END
Lenexa Man Charged with Child ExploitationRead the Press Release
Human Trafficking Rescue Project
Operation Guardian Angel
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Lenexa, Kan., man was charged in federal court today with attempting to pay for illicit sex with a 12-year-old child after being caught in an undercover sting operation.
Guardian Angel is an undercover law enforcement operation targeting the demand for child sex trafficking in the Kansas City metro area by targeting the customers of child prostitution and prosecuting the alleged violators under the Trafficking Victims Protection Act.
John J. McCarthy, 24, of Lenexa, was charged in a federal criminal complaint filed in the U.S. District Court in Kansas City, Mo. McCarthy, who remains in custody, is expected to appear in court on Thursday, Aug. 1, 2013.
According to an affidavit filed in support of the federal criminal complaint, McCarthy contacted a person whom he believed to be the mother of two children but who was actually an undercover Kansas City police detective. After initially making contact through a social Web site, McCarthy began communicating by e-mail and texting.
McCarthy told the undercover detective that he would love to teach her two daughters how to satisfy a man, the affidavit says, and that a mom watching and joining in with her daughters is a big fantasy of his. Beginning on July 24, 2013, the undercover detective began exchanging numerous text messages with McCarthy over several days and he allegedly asked if he could meet the mother and her daughters. She responded that she would rather meet him first without the girls.
On July 29, 2013, the undercover detective met McCarthy at a public location. She described her daughters as 16 and 12 years old. McCarthy allegedly said that the 12-year-old was the one that he wanted first, and began to describe the sexual acts he intended to do with her. The undercover detective said that she had to get something in return for all of this and he allegedly agreed to pay $50. McCarthy told her that he would like to do this soon, the affidavit says, maybe as soon as the next day.
McCarthy sent the undercover detective a text message the next day, July 30, 2013, according to the affidavit, saying he was free for the night and did not have to work in the evening. They arranged for a time to meet, and at approximately 6:36 p.m., McCarthy called and said that he was in the area. The undercover detective directed him to an apartment. Once McCarthy entered the apartment, he allegedly showed the undercover detective the lubrication that he brought for use with the 12-year-old. McCarthy gave her $60, the affidavit says. She reiterated to McCarthy the sexual acts – including oral and vaginal sex – that he previously said he intended on performing on and with the 12-year-old, to which he allegedly responded affirmatively.
The undercover detective told McCarthy the girl was in the bedroom and that he could enter. As McCarthy opened the door and walked into the bedroom he was placed under arrest by Kansas City police officers.
Dickinson cautioned that the charge contained in this complaint is simply an accusation, and not evidence of guilt. Evidence supporting the charge 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 Patrick D. Daly. It was investigated by the Kansas City, Mo., Police Department in conjunction with the Human Trafficking Rescue Project.Laredo Jury Convicts Three in “Operation El Patron”Read the Press Release
LAREDO, Texas – Three drug and money laundering co-conspirators have been found guilty of charges resulting from a long-term Organized Crime Drug Enforcement Task Force (OCDETF) investigation, United States Attorney Kenneth Magidson announced today. The jury returned its verdicts following a seven-day trial and more than five hours of deliberation.
Enrique Mendez, of Laredo, Carlos Javier Flores Sr. and his son Carlos Javier Flores Jr., both of Zapata, engaged in a conspiracy to distribute bulk quantities of cocaine from Texas to Georgia and returned drug proceeds to Laredo and into Mexico. During the course of the investigation that led the convictions, agents seized more than $7.5 million in drug proceeds and more than 450 kilograms of cocaine. Agents also seized a drug ledger that attributes the movement/distribution of approximately 12,500 kilograms of cocaine and $41. 9 million in drug proceeds by these and other co-conspirators.
The trial began July 22 and finished late yesterday and included more than 20 government witnesses. Mendez was found guilty of drug conspiracy, money laundering conspiracy and four substantive counts of laundering U.S. currency in amounts ranging from $200,468 to $999,465. Flores Sr. and Jr. were both found guilty of drug conspiracy, while Flores Sr. was also found guilty of a substantive count of possession of a controlled substance in excess of five kilograms of cocaine. Mendez and Flores Sr., who each have prior felony drug convictions, are facing a mandatory minimum of 20 years and a maximum of life imprisonment without parole as well as a $20 million fine. Flores Jr. is facing a mandatory minimum punishment of 10 years and up to life as well as a $10 million fine.
To date, 25 other co-conspirators have been convicted and sentenced as part of this investigation. Seven other co-conspirators identified in this investigation are scheduled for sentencing later this year.
The charges and resulting convictions are the result of OCDETF operation dubbed Operation El Patron involving Homeland Security Investigations, Internal Revenue Service – Criminal Investigation and the Drug Enforcement Administration. Agencies who assisted in the arrests and other aspects of the investigation included the Webb County District Attorney’s Office, U.S. Marshals Service, U.S. Border Patrol, Webb County Sheriff’s Office, Laredo Police Department and the Texas Department of Public Safety. Assistant U.S. Attorneys Graciela Rodriguez Lindberg and Sanjeev Bhasker prosecuted the case.
Kevin Michael Cruz Sentenced to More Than Nine Years in Federal Prison in on Methamphetamine and Gun ChargesRead the Press Release
United States Attorney ALICIA A.G. LIMTIACO, U.S. Attorney for the Districts of Guam and the Northern Mariana Islands (NMI),announced today that defendant KEVIN MICHAEL CRUZ was sentenced by Chief Judge Frances Tydingco-Gatewood in the United States District Court, to one hundred and eleven (111) months imprisonment for the offenses of Conspiracy to Distribute Methamphetamine Hydrochloride and Use of a Firearm During a Crime of Violence. After defendant serves his term of imprisonment, he will be placed on supervised release for three (3) years for the conspiracy count, followed by five (5) years for the firearm offense. He is also required to perform community service, pay a $200 special assessment fee, and attend a substance abuse program.
On September 4, 2012, local and federal Marshals were searching for fugitive KEVIN MICHAEL CRUZ who was wanted for a warrant of arrest. Marshals discovered CRUZ hiding in a motel room at the Palm Ridge Inn in Barrigada Guam. CRUZ was armed with a .9 millimeter Encom America handgun, nine rounds of ammunition, a .22 caliber Savage shotgun, a M-84 stun grenade, and a detonator. He was also in possession of methamphetamine hydrochloride. CRUZ admitted that he used the firearm, which he referred to as a “machine gun,” to protect his drug distribution business.
U.S. Attorney Limtiaco states “Firearms and drugs is a potentially deadly combination. Armed drug dealers present a huge risk to innocent civilians and law enforcement officers. Those who use firearms to protect their illegal activities must know that they will face long prison sentences.” U.S. Attorney Limtiaco also states “Methamphetamine has been linked to an increase in violent crimes and results in devastating effects to individuals and to the community. Those who engage in the criminal importation, receipt and sale of this illegal drug will be prosecuted and face severe penalties.”
U.S. Attorney Limtiaco noted that this prosecution is part of the U.S. Department of Justice’s Project Safe Neighborhood (PSN) Initiative, a nationwide commitment to aggressively prosecute defendants who engage in drug distribution, gang involvement and violent crime.
U.S. Attorney Limtiaco commends the investigative efforts of the Marshals with the United States Marshals Service and the Superior Court of Guam, as well as Special Agents Darren Massin and Aaron Joseph with the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).
Justice Department Shuts Down Indiana Tax PreparerRead the Press Release
The Justice Department announced that yesterday, a federal district judge in Indianapolis permanently barred Cynthia Hawk, who operates Gain Tax Services, from preparing federal income tax returns for others. Hawk consented to the entry of this injunction.
The government’s complaint alleged that Hawk prepared at least 1,501 returns from 2009 through 2012, and that returns Hawk prepared claimed refunds at an unusually high percentage, ranging from 96 to 99 percent during these years. The government alleged that Hawk failed to comply with due-diligence requirements imposed by federal law on tax preparers who claim the earned income tax credit (EITC) on customers’ income tax returns. Because Hawk failed to comply with these due-diligence requirements, in 2011 she was penalized by the Internal Revenue Service (IRS) . When the IRS performed a follow-up investigation in 2012, as it routinely does, the complaint alleged that it again found ongoing failures and fraudulent claims by Hawk.
The complaint also alleged that Hawk claimed education credits on her customers’ tax returns, when the customers did not actually have any qualifying education expenses. Hawk also allegedly falsified customers’ income in order to claim the maximum EITC for them.
The complaint alleged that Hawk’s repeated conduct of preparing returns that understated her customers’ liabilities based on bogus credits or fabricated income or deductions was sufficient for the court to prohibit her from preparing federal tax returns.
In the past decade the Justice Department’s Tax Division has obtained injunctions against hundreds of tax-return preparers and tax-fraud promoters. Information about these cases is available on the Justice Department website.
Related Materials:
United States v. Cynthia E. Hawk
Complaint for Permanent Injunction and Other Equitable Relief (PDF)
Order of Permanent Injunction (PDF)Indictment: Texas Man Sponsored Dog FightingRead the Press Release
KANSAS CITY, KAN. – A Texas man has been indicted on a federal charge of sponsoring dog fighting, U.S. Attorney Barry Grissom said today.
Vertrick Jordan, 47, Tyler, Texas, is charged with one count of conspiracy to engage in an animal fighting venture. The indictment alleges that Jordan conspired with two other men to engage in animal fighting. The men are Pete Davis, Jr., and Melvin L. Robinson, who are scheduled for sentencing Sept. 9 after pleading guilty to a federal charge of transporting animals for participation in an animal fighting venture.
The indictment alleges Jordan and the others conspired to: – Acquire, breed and train pit bull dogs for the purpose of entering them in dog fights.
– Operate unlicensed kennels for pit bull dogs.
– Communicate between Kansas and Texas for the purpose of sponsoring dog fights.
– Collect forfeit fees from participants in dog fights.
– Sponsor and conduct illegal gambling and bookmaking activities as part of dog fights.
– Deny adequate and humane medical treatment to dogs injured and wounded in dog fights.
– Inhumanely abandon and destroy pit bull dogs who were severely injured in dog fights.The indictment alleges that on March 23, 2013, Davis and Robinson left a motel where they were staying in Tyler, Texas, with a pit bull dog belonging to Robinson, and drove to Jordan’s residence in Tyler. They planned to enter the dog in an animal fighting venture. The animal fighting venture was a “two dog card” and a “grand championship” match in which each dog was required to have won four previous fights to qualify for the grand championship match. Jordan permitted a pit for dog fighting to be constructed on his property. Investigators observed two trophies next to the pit. Jordan maintained approximately ten pit bull dogs on his property for the purpose of breeding them and selling them.
If convicted, Jordan faces a maximum penalty of five years in federal prison and a fine up to $250,000.The following agencies contributed to the investigation: The FBI, the Kansas City (KS) Police Department, the Harrison County (MO) Sheriff's Department, the Missouri State Highway Patrol, the Texas Department of Public Safety - Narcotics and Highway Patrol, East Texas HIDTA, the FBI Dallas Division - East Texas Resident Agencies, the American Society for the Prevention of Cruelty to Animals, the Texas Parks and Wildlife Department - Game Wardens, the Texas Department of Criminal Justice - OIG, the Lindale Police Department, the Smith County Sheriff’s Office, the Dallas Police Department and the Dallas County Sheriff’s Office and the American Society for the Prevention of Cruelty To Animals. Assistant U.S. Attorney Tris Hunt is prosecuting.
OTHER INDICTMENTS
Sudhir Dodda, 37, Allen, Texas, and Preetham Kodiripaka, 38, Allen, Texas, are charged with one count of conspiracy to commit visa fraud; four counts of making false statements on immigration documents, and one count of commercial carrier fraud and conspiracy to commit foreign labor contracting fraud. In addition, Kodiripaka is charged with 15 counts of mail fraud.The indictment alleges Dodda and Kodiripaka, co-owners of INEK Technologies, LLC in Overland Park, Kan., made false statements on documents they submitted in order to obtain H-1B specialty work visas for a dozen foreign workers. The crimes are alleged to have occurred at various times from October 2004 to the present in Johnson County, Kan.
Upon conviction, the crimes carry the following penalties: Conspiracy: A maximum penalty of five years in federal prison and a fine up to $250,000.
Making false statements on immigration documents: A maximum penalty of 10 years and a fine up to $250,000 on each count.
Commercial carrier fraud and conspiracy to commit foreign labor contracting fraud: A maximum penalty of 20 years and a fine up to $250,000.
Mail fraud: A maximum penalty of 20 years and a fine up to $250,000 on each count.The U.S. Department of Labor - Office of the Inspector General, Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) and the Internal Revenue Service investigated. Assistant U.S. Attorney Chris Oakley is prosecuting.
Ian Sean Cahir, 40, Shawnee, Kan., is charged with three counts of misuse of a Social Security number and three counts of aggravated identity theft. The crimes are alleged to have occurred in August 2010 and January 2011 in Shawnee, Kan.
The indictment alleges Cahir used his six-year-old son’s Social Security number.
If convicted, he faces a maximum penalty of five years in federal prison without parole and a fine up to $250,000 on each count of misusing a Social Security number; and a mandatory two years to run consecutively to the underlying sentence on each count of aggravated identity theft. The Social Security Administration - Office of Inspector General investigated. Assistant U.S. Attorney Brent Anderson is prosecuting.
Jose Magana-Garcia, 42, a citizen of Mexico, is charged with unlawfully re-entering the United States after being deported. He was found July 23, 2013, in Sedgwick County, Kan.
If convicted, he faces a maximum penalty of two years in federal prison and a fine up to $250,000. ICE’s Enforcement Removal Operations investigated. Assistant U.S. Attorney Brent Anderson is prosecuting.
Luis Zamarripa-Favela, 34, a citizen of Mexico, is charged with unlawfully re-entering the United States after being deported. He was found July 23, 2013, in Sedgwick County, Kan.
If convicted, he faces a maximum penalty of two years in federal prison and a fine up to $250,000. ICE’s Enforcement Removal Operations investigated. Assistant U.S. Attorney Brent Anderson is prosecuting.
Martin Martinez-Perez, 39, a citizen of Mexico, is charged with unlawfully re-entering the United States after being deported. He was found July 26, 2013, in Sedgwick County, Kan.
If convicted, he faces a maximum penalty of two years in federal prison and a fine up to $250,000. ICE’s Enforcement Removal Operations investigated. Assistant U.S. Attorney Brent Anderson is prosecuting.
Joel M. Lopez, 32, Wichita, Kan., is charged with one count of unlawful possession of a firearm after a felony conviction. The crime is alleged to have occurred July 30, 2013, in Sedgwick County, Kan.
If convicted, he faces a maximum penalty of 10 years in federal prison and a fine up to $250,000. The Wichita Police Department investigated. Special Assistant U.S. Attorney Michelle Jacobs is prosecuting.
In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.
Huntsville Man Indicted on Child Pornography ChargesRead the Press Release
BIRMINGHAM -- A federal grand jury late Tuesday indicted a Huntsville man on child pornography charges, announced U.S. Attorney Joyce White Vance and Alabama Bureau of Investigation Chief Neil Tew.
An indictment filed in U.S. District Court charges RICKY ALAN KLEMMER, 60, with distributing, receiving and possessing child pornography.
Count One charges that Klemmer used a computer to distribute child pornography over the Internet between February and June in Madison County. Count Two charges that he received child pornography by computer between November 2011 and July 2013, and Count Three charges Klemmer with possessing child pornography between May and July this year.
The maximum penalty for both distributing child pornography and receiving child pornography is 20 years in prison and a $250,000 fine. Those charges carry a minimum sentence of five years in prison. Possessing child pornography carries a maximum sentence of 10 years in prison and a $250,000 fine.
The ABI investigated the case. Assistant U.S. Attorney Chinelo Diké-Minor is prosecuting the case.
The public is reminded that an indictment contains only charges. It will be the government's responsibility to prove guilt beyond a reasonable doubt at trial.
Hazard Woman Pleads Guilty to Illegally Structuring Bank DepositsRead the Press Release
LONDON, KY - Lois Elaine Smith, 53, of Hazard, KY., pleaded guilty today to charges of currency structuring.
In her guilty plea, Smith admitted she intentionally structured cash deposits, in increments of just under $10,000, into an account at the Peoples Bank and Trust in Perry County. Smith acknowledged that she structured the deposits in this manner to prevent the bank from filing a currency transaction report with the federal government.
Under federal law, financial institutions, such as banks, are required to report to the federal government any currency deposit, withdrawal, or exchange that is over $10,000. It is a violation of federal law to intentionally structure cash transactions to avoid these reporting requirements.
Smith was indicted by a grand jury in February of 2013.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, and Christopher A. Henry, Special Agent in Charge, Nashville Field Division, Internal Revenue Service, jointly made the announcement.
The investigation was conducted by the IRS, Northern Kentucky Financial Crimes Task Force. The U.S. Attorney’s Office was represented in the case by Assistant U.S. Attorneys Jordi De Llano and Robert K. McBride.
Smith is currently scheduled to appear before U.S. District Judge Gregory Van Tatenhove for sentencing, in London, on November 21, 2013, at 1:30 p.m. Smith faces a maximum prison sentence of five years. However, any sentence following conviction would be imposed by the Court after consideration of the U.S. Sentencing Guidelines and the federal statutes governing the imposition of sentences.
Former Washington, D.C. Accountant Pleads Guilty to Tax FraudRead the Press Release
The Justice Department and Internal Revenue Service (IRS) announced today that John T. Hoang, of Woodbridge, Va., pleaded guilty in federal district court in Washington, D.C., to willfully aiding and assisting in the preparation of false income tax returns for tax year 2004.
According to court documents and statements made in court, Hoang was a certified public accountant (CPA) and an attorney. From January 2005 through April 2007, Hoang operated John T. Hoang CPA, a tax return preparation business and was one of two partners who owned Tax-Smart Technology Services. Hoang operated John T. Hoang CPA and Tax-Smart from various locations in the District of Columbia and Fairfax, Va.
In his capacity as a tax return preparer, Hoang prepared and supervised the preparation of client tax returns to be filed with the IRS and various state taxing authorities. For the tax years 2004, 2005 and 2006, Hoang prepared hundreds of Forms 1040 (U.S. Individual Income Tax Returns) and earned substantial income from his tax preparation activities. Hoang further received, through John T. Hoang CPA and Tax-Smart, a substantial portion of the refunds issued by the IRS to his clients. Despite earning revenue through his businesses of approximately $1 million in 2004; $2 million in 2005; and $3 million in 2006, Hoang failed to file any federal income tax returns or pay any federal income taxes for himself or his businesses.
Hoang admitted that he prepared and caused the preparation of false and fraudulent 2004, 2005 and 2006 Forms 1040 for his clients. When preparing these false Forms 1040 and related schedules for his clients, Hoang created wholly fictitious business income and expenses for what purported to be a technology licensing business. The false information resulted in the client-taxpayers reporting fake losses from the business activity and receiving either larger refunds than they were entitled to or a decrease in the amount of taxes due. Hoang admitted that the tax loss caused by some of the false returns he prepared was greater than $30,000 per return and that he prepared at least 24 such false returns for the 2004 through 2006 tax years.
As part of the plea agreement, Hoang admitted that the total tax loss caused by his criminal conduct is greater than $1.5 million.
United States District Judge Richard J. Leon, who is presiding over the matter, set a sentencing date of Nov. 06, 2013. Hoang faces a maximum sentence of six years in prison and a $500,000 fine.
The case was investigated by IRS-Criminal Investigation and is being prosecuted by Trial Attorneys Jorge Almonte and Jeffrey B. Bender of the Justice Department’s Tax Division.
Former Real Estate Developer and his Long-Time Girlfriend Convicted of 25 Counts for Tax Evasion SchemeRead the Press Release
A former western Washington real estate developer and his long-time girlfriend were convicted today in U.S. District Court in Seattle of 25 counts of tax evasion and false statements related to their scheme to avoid paying taxes on more than $23 million in income, announced U.S. Attorney Jenny A. Durkan. WINSTON BONTRAGER, 64, and PAULINE ANDERSON, 65, were indicted in March 2012, and have been in federal custody since June 2012. The jury deliberated about 3 days following a four week long jury trial. Jurors convicted the two on all counts presented by prosecutors. U.S. District Judge Richard A. Jones scheduled sentencing for November 22, 2013.
For WINSTON BONTRAGER, it is a second conviction for tax crimes and third federal criminal conviction. BONTRAGER was previously convicted in 1983 for bank fraud and in 1994 for defrauding the Oregon Public Employees Retirement System and the IRS of over $687,000. In 1994 he was sentenced to 40 months in prison. Some of the convictions returned today are for BONTRAGER’s false statements surrounding his failure to pay more than $687,000 in restitution from his prior conviction. During the trial prosecutors detailed how BONTRAGER and ANDERSON filed false tax returns from 2004-2009, failing to report more than $23 million in income and failing to pay more than $2.7 million in taxes. Over $10 million was moved into foreign bank accounts in PAULINE ANDERSON’s name, and virtually all of the couples’ assets were put in ANDERSON’s name in order to hide it from the IRS and those seeking to enforce BONTRAGER’s restitution obligation and collect delinquent taxes. At the same time that the couple paid little in income taxes, they purchased a luxury condominium in Bellevue and spent approximately $500,000 on an extensive remodel. They owned a $325,000 wine collection, a $1.2 million home in Southern California, a 6.7 carat diamond ring, a Bentley worth $186,000, and they spent over $3.4 million in credit card purchases, including travel, cosmetic surgery, cosmetic dentistry, restaurants, and clothing and shoes.
Prosecutors told the jury the case was about “fraud, deceit, and evasion,” and they urged jurors to “follow the money” to see how BONTRAGER and ANDERSON made millions of dollars but refused to pay a single dime for BONTRAGER’s restitution obligation, delinquent taxes, or in income tax. Prosecutors described various development deals in Vancouver, Washington where BONTRAGER made millions of dollars, in some instances defrauding business partners as well as the IRS.
The tax crimes of conviction are each punishable by between three to five years in prison, and the false statement convictions are also punishable by up to five years in prison. BONTRAGER was convicted of nine tax counts and eight counts of making false statements. ANDERSON was convicted of 11 tax counts.
The case was investigated by the Internal Revenue Service Criminal Investigation. The case was prosecuted by Assistant United States Attorneys Carl Blackstone and Aravind Swaminathan.
Former Network Engineer Indicted by A Federal Grand Jury in Connection with Million-dollar Computer System DamageRead the Press Release
CHARLESTON – A former network engineer at Charleston-based EnerVest Operating was indicted by a federal grand jury sitting in Charleston on Tuesday for allegedly causing extensive damage to the company’s computer system in June 2012, announced U.S. Attorney Booth Goodwin. Ricky Joe Mitchell, 34, of Mableton, GA, was charged with recklessly damaging a protected computer. The alleged damage led to widespread computer network issues and resulted in more than $1 million in losses to EnerVest.
The indictment alleges that on June 26, 2012, Mitchell, who knowingly accessed a protected computer without authorization, erased backup information, and disabled a data replication process designed to transmit backup data that was stored in Houston, Texas. Mitchell is also alleged to have deleted all of the company’s phone system accounts, extensions, and accounting data.
As a result of the alleged acts, employees at EnerVest Operating were unable to fully communicate or conduct business operations from approximately June 26, 2012 through July 27, 2012.
Mitchell faces up to 15 years in prison and a $500,000 fine if convicted.
The U.S. Secret Service conducted the investigation. United States Attorney Goodwin is handling the prosecution.
U.S. Attorney Booth Goodwin announced the Business Protection Initiative in November 2010. Business protection is a primary initiative of the U.S. Attorney’s Office that focuses on prosecuting individuals who defraud West Virginia businesses.
Note: The charge contained in the indictment is merely an accusation, and the defendant is presumed innocent unless and until proven guilty
Click here to view a copy of the indictment
Former Manager of Virginia Beach Mortgage Brokerage Sentenced to 66 Months in JailRead the Press Release
NORFOLK, Va. – David Burrus, Jr., age 40, of Burns, TN, was sentenced today to 66 months in prison, followed by a five year term of supervised release, for conspiring to commit wire and mail fraud. Burrus was also ordered to pay restitution of $241,779.26.
Neil H. MacBride, United States Attorney for the Eastern District of Virginia, Royce Curtin, Special Agent in Charge of the FBI’s Norfolk Field Office, and Joseph Clarke, Special Agent in Charge of the Office of Inspector General, Department of Housing and Urban Development, Mid-Atlantic Region, made the announcement after sentencing by Senior United States District Judge Robert G. Doumar.
Burrus pleaded guilty on March 18, 2013 to count one of the indictment pending against him. According to court documents, Burrus managed and ran a Virginia Beach branch office of a mortgage brokerage firm headquartered in Tennessee from 2003 through 2007. Burrus also co-owned a title and escrow company which conducted real estate closings for many of the loans originated by loan officers supervised by Burrus. Burrus also owned another entity, Southern Living Properties, which he used to receive monies from fraudulent real estate transactions that he conducted.From 2005 through 2007, Burrus sought and obtained numerous mortgage loans in both his and his spouse's names. In the course of these transactions, Burrus agreed to buy local properties for more than the sellers' listing price, provided that the transactions were structured to ensure that any extra sales proceeds were paid to Southern Living Properties at the real estate closings. This ensured that, unbeknownst to the mortgage lenders, Burrus received a substantial portion of the loan proceeds when buying properties in his or his spouse's name.
To induce lenders to approve various requests for mortgage loans, Burrus also submitted false loan applications, fictitious leases purporting to show his properties were generating rental income, and false Southern Living invoices billing property sellers for work and services that had never been performed. Burrus also made material misrepresentations to mortgage lenders about his and his spouse's income and liabilities, his rental income, and about his spouse's intent to occupy properties purchased as her primary residence.
Shortly before the crash of the real estate market, Burrus also sought to sell properties in his portfolio to his associates and offered to pay kickbacks to buyers to facilitate sales. Rhonda Wyland, age 44, of Virginia Beach and then a loan officer working for Burrus, agreed to purchase one such property in Portsmouth, VA, in exchange for a kickback of $140,000. Wyland also made false statements to obtain a mortgage loan to complete this transaction and, after receiving the $140,000 kickback, defaulted upon the loan. On December 12, 2012, Wyland pled guilty to a criminal information charging her with conspiracy to commit wire fraud. On April 5, 2013, Chief United States District Judge Rebecca Beach Smith sentenced Wyland to serve six months in jail and six months of home confinement.
As a result of his activities, Burrus obtained mortgage loans to purchase seventeen properties in Hampton Roads and then defaulted upon those loans. The known losses stemming from these loans are approximately $2,036,296.00.
This case was investigated by the FBI’s Norfolk Field Office and HUD's Office of Inspector General. Assistant United States Attorney Robert Krask prosecuted the case on behalf of the United States.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.
Former CEO/Owner of Home Health Care Provider Sentenced to Prison for Falsifying Records Involving A Federal Audit-Audit Involved Medicaid/Medicare Payments-Read the Press Release
WASHINGTON – Jeannette N. Awasum, the former owner of a health care provider, was sentenced today to eight months of incarceration on a federal charge stemming from falsifying records in connection with a U.S. Department of Health and Human Services audit.
The sentence was announced by U.S. Attorney Ronald C. Machen Jr., Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office, and Nicholas DiGiulio, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General (HHS - OIG) for the region including the District of Columbia.
Awasum, 49, of Germantown, Md., pled guilty in April 2013 in the U.S. District Court for the District of Columbia to a charge of falsification of records in connection with a federal investigation. She was sentenced by the Honorable Richard J. Leon. Upon completion of her prison term, Awasum will be placed on two years of supervised release. Four months of that time will be on home detention. She also was ordered to perform 500 hours of community service.
According to a statement of offense, signed by the defendant as well as the government, in early June 2010, Awasum, the Chief Executive Officer and owner of Tri State Home Health and Equipment Service, was informed that the U.S. Department of Health and Human Services requested the physician-signed plans of care for 130 of its patients. These plans of care are what authorize providers like Tri State to provide home healthcare services to Medicare and D.C. Medicaid beneficiaries.
Awasum knew that Tri State lacked plans of care for 62 of these 130 patients. Tri State received approximately $1,879,853 from Medicare and D.C. Medicaid for treating these 62 patients during the period for which plans of care were missing. Awasum directed her employees to fraudulently create plans of care for the services that these 62 patients received, making it appear as if the documents had been created prior to the services being provided. In total, the employees created 81 plans of care for these 62 patients.
Awasum instructed one of her employees to take the 81 fabricated forms to a doctor whom Awasum knew never examined these patients. Despite the fact that this doctor never examined these patients, he signed the plans of care in June 2010, making it appear as if he authorized these 62 patients receiving home healthcare services prior to the time that Tri State provided these services. The employee, at Awasum’s directions, placed the fraudulent 81 plans of care in Tri State’s file so that the forms would be present when the U.S. Department of Health and Human Services audited the services provided to these 62 patients.
In announcing the sentence, U.S. Attorney Machen, Assistant Director in Charge Parlave, and Special Agent in Charge DiGiulio commended the efforts of those who investigated the case from the FBI’s Washington Field Office and the Office of the Inspector General of the U.S. Department of Health and Human Services. They also praised those who worked on the case from the U.S. Attorney’s Office, including Legal Assistant Donna Galindo, former Assistant U.S. Attorney Courtney G. Saleski, and Assistant U.S. Attorney Matt Graves, who prosecuted the matter.
13-271Five Arrested for Methamphetamine Manufacturing in Vero BeachRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Mark R. Trouville, Special Agent in Charge, Drug Enforcement Administration (DEA), Miami Field Division, and Deryl Loar, Sheriff, Indian River County Sheriff’s Office, announce the arrest of five Vero Beach residents: Edward McElhenny, 50, Clinton Story, 30, Paul Richardson, 27, Angela Story, 32, and Kelly McCartney, 36. The five defendants made their initial appearance yesterday before U.S. Magistrate Judge Frank J. Lynch, Jr. in Ft. Pierce and were detained pending trial. A pre-trial detention hearing has been set for Thursday, August 1, 2013.
The criminal complaint charges the five defendants with conspiracy to manufacture, distribute and possess with intent to distribute a controlled substance, over fifty (50) grams of methamphetamine in violation of Title 21, United States Code, Section 841 (a) (1) and (b)(1)(A)(viii); all in violation of Title 21, United States Code, Section 846. If convicted, the defendants face a mandatory minimum of ten years in prison, and a possible maximum sentence of life, followed by five years of supervised release, and up to $10 million in fines.
According to the criminal complaint, during the third week of April 2013, the Indian River County Sheriff’s Office (IRCSO), Multi-Agency Criminal Enforcement (MACE) Unit conducted an investigation, which led to the execution of a search warrant. On May 9, 2013, members of the DEA-Clandestine Laboratory Enforcement Team (CLET) executed a state search warrant at 1913 22nd Avenue, Vero Beach, Florida (residence). At the time of entry, Clinton Story, Edward McElhenny, Paul Richardson and Angela Story were at the residence and were detained. Clinton Story, Angela Story, and Paul Richardson admitted to purchasing pseudoephedrine, knowing it was for the manufacture of methamphetamine.
Edward McElhenny admitted that he has manufactured methamphetamine in the past. The DEA CLET team members searched the home and surrounding property. A search of the residence led to the discovery of pre-cursor chemicals and laboratory equipment which were utilized in and comprised a fully operational methamphetamine laboratory. A fingerprint specialist processed the scene and physical evidence, and discovered the fingerprints of Clinton Story, Edward McElhenny, and Kelly Maureen McCartney. McCartney admitted that she visited 1913 22nd Avenue on multiple occasions, and was aware of the methamphetamine manufacturing and use that took place at the residence. She also acknowledged that she purchased pseudoephedrine packets on multiple occasions with the knowledge that it was being used to manufacture methamphetamine.
Mr. Ferrer commended the investigative efforts of the DEA and the Indian River County Sheriff’s Office for their work on this case. The case is being prosecuted by Assistant U.S. Attorney Carmen Lineberger.
A criminal complaint is only an accusation and a defendant is presumed innocent until proven guilty.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Federal Grand Jury Indicts Man in Connection with Alleged Diesel Fuel Theft at Military FacilityRead the Press Release
Thousands of dollars’ worth of diesel fuel allegedly stolen from W.Va. Guard facility in Red House
CHARLESTON – A federal grand jury sitting in Charleston indicted a Red House man on Tuesday in connection with an alleged theft scheme that took thousands of dollars’ worth of diesel fuel from a military facility located in Putnam County, announced U.S. Attorney Booth Goodwin. Charles Raymond Franklin, 59, of Red House, W.Va., was charged in a three-count indictment with conspiracy to steal and receive public property and conspiring to receive stolen government property.
The indictment alleges that on February 15, 2013, Franklin knowingly received approximately 196 gallons of diesel fuel that was stolen from the West Virginia National Guard’s Combined Support Maintenance Shop located in Red House.
The Naval Special Warfare Command (NSW), a component of the U.S. Navy, contracted with the West Virginia National Guard to run its Operational Stock (Ops Stock) program that stored and maintained equipment for naval operations at the facility in Red House. The heavy equipment that was maintained by the Guard as part of the Ops Stock program used diesel fuel.
The indictment further alleges that on February 19, 2013, Franklin received approximately 194 gallons of diesel fuel that was also stolen from the facility in Red House. Franklin allegedly purchased the stolen diesel fuel at a greatly discounted rate from an individual known to the grand jury.
Franklin faces up to five years on the receiving stolen property charge and up to 10 years in prison on each charge of conspiring to receive stolen government property, if convicted. Franklin also faces a $250,000 fine on each count.
The investigation was conducted by the FBI. Assistant United States Attorney Blaire Malkin is in charge of the prosecution.
Note: The charges contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty
Click here to view a copy of the indictment
Ex-ceo of Imperial Valley Hospital Pleads Guilty to Fraud and EmbezzlementRead the Press Release
Richard Mendoza, the former Chief Executive Officer (“CEO”) of Pioneers Memorial Healthcare District (“PMHD”) in Brawley, California, pled guilty today to embezzling more than $90,000 from the Imperial Valley Hospital.
According to court documents, Mendoza served as CEO of PMHD from October 2001, until his termination in November 2011. Mendoza’s embezzlement activity was initially discovered by the Imperial Valley hospital in the fall of 2011, during an annual audit of expenses and disbursements. The FBI subsequently initiated an investigation that uncovered the extent of Mendoza’s embezzlement activity. According to court documents, while CEO, Mendoza submitted more than 30 fraudulent reimbursement requests for trainings, seminars and conferences that he never attended. As set forth in his plea agreement, Mendoza filled out registration forms indicating that he had paid for this training with his personal credit card, when in fact he had not. To conceal the fact that he had not actually paid for the conferences, Mendoza took advantage of his position as the hospital’s top executive and directed employees in PMHD’s Accounts Payable Department to reimburse his personal credit card account based only on these fraudulent registration forms (and without any additional proof of payment).
At the time he submitted each false reimbursement request, Mendoza knew that he had not registered for the medical conferences, was not planning to attend the medical conferences, and had not used his personal credit card to pay for the attendant registration costs. To the contrary, Mendoza would often be seen around the hospital on the dates he was supposedly attending these out-of-town conferences. For example, on one occasion Mendoza submitted a fraudulent reimbursement request for a medical conference in New York City, but instead attended a PMHD Board of Directors meeting in Brawley on the date of the conference. As part of his plea agreement, Mendoza agreed to pay more than $90,000 in restitution to the hospital.
United States Attorney Laura E. Duffy praised the hard work of the agents from the Federal Bureau of Investigation and emphasized her support for financial crime prosecutions: “Mr. Mendoza violated the trust of his employer and the people he served in the community. Today’s guilty plea is yet another example of our commitment to investigate and prosecute those who illegally use their position of trust to unlawfully enrich themselves.”
FBI Special Agent in Charge, Daphne Hearn, commented, “Today’s plea agreement is a direct result of the commitment and teamwork between the FBI and the U.S. Attorney’s Office to hold those accountable who use their position of trust to unjustly line their own pockets.”
Mendoza is scheduled to be sentenced on October 25, 2013, at 8:30 a.m. before U.S. District Judge John A. Houston.
DEFENDANT Case Number: 13cr2716-JAH Richard Mendoza SUMMARY OF CHARGESMail fraud, in violation of Title 18, United States Code, Section 1341 - Maximum penalties: 20 years in prison, $250,000 fine, term of supervised release of three years, restitution, forfeiture, and $100 special assessment.
INVESTIGATING AGENCYFederal Bureau of Investigation
Elmira Man Indicted on Gun ChargeRead the Press Release
ROCHESTER, N.Y.--U.S. Attorney William J. Hochul, Jr. announced today that a federal grand jury in Rochester has returned a single-count indictment charging Marques Cayne, 30, of Elmira, N.Y., with being an armed career criminal in possession of firearms and ammunition. The charge carries a mandatory minimum sentence of 15 years in prison, a maximum of life, a fine of $250,000.00, or both.
Assistant U.S. Attorney Charles E. Moynihan, who is handling the case, stated that according to the indictment, the defendant possessed two loaded semi-automatic handguns on January 4, 2013. Members of the New York State Department of Corrections and Community Supervision went to the defendant’s residence in Elmira to conduct a compliance check on the defendant, who was on parole supervision at the time. While there, officers, assisted by members of the Elmira Police Department, discovered the two handguns in the defendant’s bedroom.
The indictment is the culmination of an investigation on the part of Special Agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Resident Agent in Charge, Rochester Field Office, Scott Heagney, and Resident Agent in Charge, Buffalo Field Office, Francis J. Christiano, members of the Elmira Police Department, under the direction of Chief Michael Robertson, and members of the New York State Department of Corrections and Community Supervision.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
Eight Linked to Fraudulent Mortgage Brokerage in Ventura County That Generated Millions in Sales Arrested in Federal CaseRead the Press Release
VENTURA, California – Federal and local authorities this morning arrested eight individuals linked to a mortgage fraud scheme that filed loan applications on behalf of lower-income, primarily Spanish-speaking individuals, generating substantial loan fees and commissions and causing lending institutions to suffer millions of dollars in losses when homes went into foreclosure.
This morning’s arrests are the result of a grand jury indictment that charges the eight defendants in a conspiracy to commit bank fraud and wire fraud. The investigation, which was started by the Ventura County District Attorney’s Office, determined that members of the scheme generated dozens of mortgage loans for unqualified borrowers. The indictment specifically outlines a series of allegedly fraudulent loans worth more than $11 million.The federal investigation that resulted in the indictment unsealed this morning was conducted by the Federal Bureau of Investigation; the Federal Housing Finance Agency, Office of Inspector General; the U.S. Department of Housing and Urban Development, Office of the Inspector General; and the United States Secret Service.
The indictment details a scheme led by Camarillo resident Jose Garcia and run out of an Oxnard-based company called New Concepts Home Loans (NCHL), where members of the alleged conspiracy prepared mortgage applications that contained false information about borrowers’ income, employment and assets. As part of the scheme, according to the indictment, Jose Garcia’s wife and others obtained bogus “CPA letters” from tax preparers that falsely stated the mortgage applicants were engaged in a particular business.
The defendants in these cases generated huge commissions and fees through the mortgage application process – typically at least $10,000 per mortgage.
The victim lenders who suffered losses as a result of the alleged scheme include Washington Mutual Bank, Wells Fargo Bank, Countrywide Bank, IndyMac Bank, SunTrust Bank, World Savings Bank and JPMorgan Chase Bank.
“Jose Garcia and his cohorts are alleged to have lured unsophisticated borrowers with promises of putting them into homes they clearly could not afford,” said United States Attorney André Birotte Jr. “But this American dream quickly turned into a nightmare for these borrowers when they realized they could not afford their new homes. All the while, real estate professionals like Jose Garcia reaped huge profits from the fraudulent loans that they brokered.”District Attorney Gregory D. Totten stated: “These arrests for serious federal crimes illustrate the tenacity of state and federal law enforcement to continue our years-long effort to bring to justice those who perpetrated real estate fraud-based crimes against unsuspecting, often monolingual, victims in our communities.”
FBI Assistant Director in Charge Bill L. Lewis commented: “Mr. Garcia allegedly directed his workforce, including unlicensed individuals acting as realtors, to peddle the dream of home ownership in the poorest neighborhoods of Oxnard, where they easily found people eager to buy. This case and others were made based on the cooperative relationship among federal and local investigators working as a team to combat mortgage fraud in Ventura County.”The indictment charges:
Jose “Joe” Bautista Garcia, 46, of Camarillo, a real estate broker who in addition to NCHL owned Century 21 Premier Realty, who allegedly directed agents to go door-to-door and “cold call” unqualified borrowers in Ventura County;
Lucy Ann Garcia, Jose Garcia’s wife, 46, also of Camarillo, who co-owned NCHL;
Jose Fernando Murguia, 47, of Oxnard, a loan officer at NCHL;
Sesilia Garcia, one of Jose Garcia’s sisters, 30, of Oxnard, a loan officer at NCHL;
Lili Ayala Hernandez, 41, of Oxnard, a loan officer at NCHL;
Lidubina “Lido” Mendoza Perez, 41, of Moreno Valley, a loan officer who worked at NCHL’s office in Bakersfield;
Gregg Scott Quinn, 40, of Camarillo, a loan officer at NCHL; and
Cesar Rodriguez Azamar, 36, of Santa Paula, an employee of NCHL.
All of the defendants in this case face a statutory maximum sentence of 30 years in prison if they are convicted of the conspiracy count in the indictment.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.The defendants arrested today will begin making their initial court appearances this afternoon in United States District Court in Los Angeles.
The investigation was conducted by the Federal Bureau of Investigation; the Ventura County District Attorney’s Bureau of Investigation; the Federal Housing Finance Agency, Office of Inspector General; the U.S. Department of Housing and Urban Development, Office of the Inspector General; and the United States Secret Service.
Release No. 13-098
Eagle Man Sentenced to over 17 Years in Prison for Theft from Retirement PlansRead the Press Release
Hutcheson Must Pay Fraud Victims More Than $5.3 Million in Restitution
BOISE – A federal judge this afternoon sentenced Matthew D. Hutcheson, 41, of Eagle, Idaho, to 210 months in prison, U.S. Attorney Wendy J. Olson announced. On April 15, 2013, a jury convicted Hutcheson of 17 counts of wire fraud. U.S. District Judge William Fremming Nielsen also ordered Hutcheson to serve three years of supervised release and pay $5,307,688 in restitution to the victims.
Hutcheson is a former trustee and fiduciary for the G Fiduciary Retirement Income Security Plan (the “G Fid Plan”) and the Retirement Security Plan & Trust (the “RSPT”). During the eight day trial, the government presented evidence that beginning in 2010, Hutcheson perpetrated schemes to defraud the G Fid and RSPT plans, and misappropriated over $5 million of plan assets.
The jury heard evidence that from January 2010 through December 2010, Hutcheson misappropriated just over $2 million of G Fid Plan assets for his personal use. On 12 occasions, Hutcheson directed the G Fid Plan record-keeper to wire transfer plan assets from the G Fid Plan account at Charles Schwab to bank accounts he controlled and to other bank accounts for his personal benefit. Hutcheson used these assets to extensively renovate his personal residence, including installing a pool, to repay personal loans, to purchase luxury automobiles, motorcycles, all-terrain vehicles, and a tractor, and for other personal expenses. When G Fid Plan clients, plan record-keepers, and others requested information about the location and status of the plan assets, Hutcheson misrepresented that they were safely invested.
The jury also heard evidence that in December 2010, Hutcheson misappropriated approximately $3,276,000 of RSPT Plan assets to pursue the purchase of the Tamarack Resort in Donnelly, Idaho, on behalf of a limited liability corporation he controlled, called Green Valley Holdings, LLC. In December 2010, Hutcheson directed the RSPT Plan record-keeper to wire transfer approximately $3 million from the RSPT Plan to an escrow account for the benefit of Green Valley Holdings, LLC. Hutcheson directed the RSPT Plan record-keeper to describe the transaction in plan records as an investment in a fixed income bank note. In reality, Hutcheson used the $3 million to purchase a bank note secured by a majority interest in the Osprey Meadows Golf Course and Lodge at the Tamarack Resort in the name of Green Valley Holdings, not the RSPT Plan. Hutcheson later obtained a $425,000 cash loan from a private lender in Virginia using the same bank note as collateral, and placing the lender above other creditors in case of default. When the RSPT Plan auditor questioned Hutcheson about the investment, Hutcheson told the auditor there was no plan investment in a fixed income bank note, and that he had “loaned” the money from the RSPT Plan to Green Valley Holdings. Hutcheson produced purported loan documents to the auditor, but they were fraudulent and forged. In addition, in December of 2010, Hutcheson directed the RSPT Plan record-keeper to wire transfer $275,000 from the RSPT Plan to a bank account he controlled. Hutcheson transferred $250,000 of this money to an escrow account at US Bank to demonstrate to the Tamarack Corporation's creditors that Green Valley Holding had the financial means to purchase the resort. Later, Hutcheson spent the money for personal purposes.
After approximately three hours of deliberation, the jury found Hutcheson guilty on all counts.
In announcing today’s sentence, Judge Nielsen made specific findings that Hutcheson defrauded more than 250 individual victims, used sophisticated means to commit his offenses, abused a position of private trust as a fiduciary and trustee for the plans, and willfully obstructed justice by committing perjury at trial and offering a fraudulent document into evidence.
“Mr. Hutcheson’s criminal conduct had many aggravating factors that required the firm sentenced imposed by the Court today,” said Olson. “Mr. Hutcheson placed his own personal interests and greed above the clients’ whose retirement interests he pledged to safeguard. This office will continue to take pension fraud very seriously and hold accountable those who seek personal gain from others’ hard work through fraud and deceit. I commend the federal law enforcement officers who conducted the thorough investigation and Assistant United States Attorney Ray Patricco for his outstanding prosecution of this case.”
“The defendant’s despicable conduct jeopardized the financial security of workers covered by these pension plans,” said Assistant Secretary of Labor for Employee Benefits Security Phyllis C. Borzi. “He funded a life of luxury at the expense of hundreds of people who were just trying to save for retirement. This case is indicative of our close and continued partnership with fellow federal agencies to vigorously pursue those who abuse their positions of trust and commit crimes against employee benefit plan participants.”
“Matthew Hutcheson willfully defrauded more than 250 individual investors and abused his position as trustee of their retirement plans to divert $5.3 million for his personal use,” said FBI Salt Lake City Special Agent in Charge Mary Rook. “The FBI and its law enforcement partners are committed to investigating and prosecuting those who fund a luxurious lifestyle at the expense of hard-working, trusting investors. Some victims in these types of cases have their life savings tied up in fraudulent investments and never fully recover. We encourage the public to remain vigilant—check your investments; ask your investment manager hard questions; and report suspected fraud to the FBI.”
The case was investigated by the United States Department of Labor, Employee Benefits Security Administration, and 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.
Eagle Butte Man Charged with Assault by Striking, Beating and WoundingRead the Press Release
United States Attorney Brendan V. Johnson announced that an Eagle Butte, South Dakota, man has been charged by Information with Assault by Striking, Beating and Wounding.
John Maynard, age 50, appeared before U.S. Magistrate Judge Mark A. Moreno on July 26, 2013, and pled not guilty to the charge.
The maximum penalty upon conviction is up to 1 year of custody, a $100,000 fine, or both; 1 year of supervised release; and $25 to the Federal Crime Victims Fund. Restitution may also be ordered.
The charge relates to an alleged incident in July 2013 when Maynard struck the victim with a closed fist. The charge is merely an accusation and Maynard is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Cheyenne River Sioux Tribe Law Enforcement Services. Assistant U.S. Attorney Mikal Hanson is prosecuting the case.
Maynard was remanded to the custody of the U.S. Marshals Service pending trial. The trial has been set for September 24, 2013.
District Man Pleads Guilty to Second-Degree Murder, Admits Setting Victim on Fire-Attack Took Place in June 2013 in Southeast Washington-Read the Press Release
WASHINGTON – Shawn Lewis, 41, of Washington D.C., pled guilty today to a charge of second-degree murder for killing a man in June 2013 by setting him on fire at an apartment building in Southeast Washington, U.S. Attorney Ronald C. Machen Jr. announced.
Lewis pled guilty in the Superior Court of the District of Columbia. Under terms of the plea agreement, the parties each agreed to recommend a sentence between 16 years and 24 years in prison. The Honorable Russell F. Canan scheduled sentencing for Oct. 18, 2013.
According to the government’s evidence, at about 6:25 p.m. on June 28, 2013, Lewis returned to the apartment building where he was living in the 1600 block of 21st Place SE. He then went to the back porch of the building, holding a lit piece of newspaper and a container of ignitable liquid. Lewis threw the liquid on the victim, Douglas Farley, 38, who was on the back porch. He ignited the liquid with the lit newspaper, engulfing Mr. Farley in flames. Lewis was arrested on the scene at about 9:25 that evening.
Mr. Farley was taken to the Washington Hospital Center, where he died on July 3, 2013. A post-mortem examination determined that Mr. Farley died as a result of complications from thermal and inhalation injuries sustained by the flames.
In announcing the plea, U.S. Attorney Machen praised the work of the detectives, officers, and crime scene technicians who investigated the case for the Metropolitan Police Department. He also commended the efforts of those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialist Debra Joyner, Victim/Witness Advocate Jennifer Clark, and Intelligence Specialist Sharon Johnson. Finally, he recognized the efforts of Assistant U.S. Attorneys Philip Selden, Kathryn Rakoczy, and Jonathan Kravis, who investigated and prosecuted the case.
13-269Deported Alien Charged with Illegally Re-entering U.S.Read the Press Release
PITTSBURGH, Pa. - An illegal alien found in Pittsburgh has been indicted by a federal grand jury in Pittsburgh on a charge of re-entry into the United States after deportation, United States Attorney David J. Hickton announced today.
The one-count indictment named Luis Alberto Alvarez-Arguello, a/k/a Rosalio Martinez-Alvarez, a/k/a Rosalio Alvarez-Martinez, a/k/a Mario Martinez-Contreras, 28, a native of Mexico, as the sole defendant.
According to indictment, Luis Alberto Alvarez-Arguello, an alien, was formally removed from the United States by United States Immigration and Customs Enforcement on Jan. 14, 2011 and June 13, 2011. Luis Alberto Alvarez-Arguello was found to be illegally present in Pittsburgh on July 19, 2013, by the Port Authority Police.
The law provides for a maximum total sentence of two years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant. Defendant has been placed on detention.
Assistant United States Attorney Paul E. Hull is prosecuting this case on behalf of the government.
The U.S. Immigration and Customs Enforcement and the Port Authority Police conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Cape Coral Man Fined $4,000 for Speeding in Manatee ZoneRead the Press Release
Fort Myers, Florida - U.S. Magistrate Judge Douglas N. Frazier sentenced Juergen H. Kreuzer (52, Cape Coral) yesterday to a fine of $4,000 for operating a vessel at 55 miles per hour in a posted and marked 25 mile per hour manatee protection zone. Kreuzer was operating his vessel on the Caloosahatchee River, near Shell Point. He pleaded guilty on July 16, 2013.
According to court documents, Kreuzer had seven prior convictions for manatee zone speeding violations. Kreuzer operates All Around Boats - a business in Cape Coral that is engaged in boat rentals, and fishing and boat tours.
This case was investigated by the U.S. Fish and Wildlife Service, Office of Law Enforcement. It was prosecuted by Assistant United States Attorney Jeffrey F. Michelland.
Cantarero-Sanchez Sentenced for Conspiracy to Transport Illegal AlienRead the Press Release
BISMARCK – U.S. Attorney Timothy Q. Purdon announced that on July 31, 2013, Darwin Cantarero-Sanchez, 26, of Honduras, was sentenced by U.S. District Judge Patrick A. Conmy on a charge of conspiracy to transport illegal alien and a charge of improper entry by an alien. Cantarero-Sanchez pleaded guilty to the charges on May 7, 2013.
Judge Conmy sentenced Cantarero-Sanchez to serve one year and one day in federal prison on the charge of conspiracy to transport illegal alien and 117 days to serve concurrently on the charge of improper entry by an alien. Cantarero-Sanchez was ordered to pay a $110 special assessment to the Crime Victim’s Fund.
On April 6, 2013, at approximately 1:30 a.m., Cantarero-Sanchez and seven other individuals were apprehended approximately one half-mile south of the Sherwood, North Dakota, Port of Entry. All eight individuals had just illegally crossed the border into the United States without having been inspected or admitted by an immigration official.
Two of the subjects stated that they had paid Cantarero-Sanchez to smuggle them into the United States from Montreal, Quebec, Canada, to the Sherwood Port of Entry. Cantarero-Sanchez then led the group around the port of entry crossing and illegally into the United States.
The case was investigated by the United States Border Patrol (Portal and Bottineau), the Renville County Sheriff’s Department, the Bottineau County Sheriff’s Department, the Sherwood Police Department and the Royal Canadian Mounted Police.
Assistant U.S. Attorney David Hagler prosecuted the case.
Canadaigua Man Sentenced on Tax ChargesRead the Press Release
Rochester, N.Y.-- U.S. Attorney William J. Hochul, Jr. announced today that Richard Williams, of Canandaigua, N.Y., who was convicted of attempting to evade income tax for the year 2010, was sentenced to three years probation and ordered to pay $123,638 in restitution to the Internal Revenue Service by U.S. District Judge Charles J. Siragusa.
Assistant U.S. Attorney Bradley E. Tyler, who handled the case, stated that the defendant was the owner and sole proprietor of Richard’s Paving. For the year 2010, Williams failed to report employee wages to the IRS by providing false Social Security Numbers (SSN’s) to various customers and by directing all of his customers to write checks to him personally. The defendant then cashed the checks at the customer’s bank instead of depositing the checks into a business bank account and provided false SSN’s to the banks.
This law enforcement action is part of President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
The sentencing is the culmination of an investigation on the part of Special Agents of the Internal Revenue Service, Criminal Investigation Division, under the direction of under the direction of Toni M. Weirauch, Special Agent in Charge.Cable TV Operator Pleads Guilty to Wire and Mail FraudRead the Press Release
The Defendant Unlawfully Retransmitted Satellite TV Programming To Over 550 Customers
BRYSON CITY, N.C. – A cable TV operator pleaded guilty today before U.S. Magistrate Judge Dennis L. Howell to wire fraud and mail fraud charges for fraudulently acquiring and unlawfully rebroadcasting DIRECTV satellite television programming to the customers of Highlands Cable Group, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina.
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 the criminal indictment filed in April 2013, Ninian Ulysses Bond, II, 60, of Highlands, N.C., was the owner and principal operator of Highlands Cable Group, a company engaged in the business of providing cable TV programming to customers in Macon County, N.C. According to the indictment, from July 2002 to December 13, 2011, Bond devised and executed a fraudulent scheme to establish and maintain multiple DIRECTV residential and commercial lodging subscriber accounts for the purpose of fraudulently acquiring DIRECTV satellite TV systems. The fraudulent scheme enabled Bond to acquire and maintain over 30 DIRECTV integrated satellite receiver units and DIRECTV satellite access cards required to decode DIRECTV’s satellite TV signals. According to the indictment and today’s plea hearing, Bond used the fraudulently-acquired DIRECTV equipment to unlawfully retransmit DIRECTV’s satellite television signals to Highlands Cable Group’s subscribers. Court records show that as of December 2011, Highlands Cable Group had more than 550 customers.
According to court documents and court proceedings, Bond paid DIRECTV less than $500 per month to maintain the fraudulent DIRECTV subscriber accounts. Court records indicate that Bond received monthly payments from Highlands Cable Group’s subscribers who had been receiving DIRECTV’s TV programming. According to court records, the fraudulently-acquired DIRECTV television programming that was rebroadcast to Highlands Cable Group’s subscribers was valued at over $45,000 per month, and enabled Bonds and Highlands Cable Group to unfairly compete against other local cable TV companies. At the plea hearing, the government stated that the loss attributable to the fraudulent scheme is estimated at $4.5 million.
The defendant has been released on bond since May 2013. The wire fraud and mail fraud charge each carry a maximum of 20 years in prison and a $250,000 fine. A sentencing date has not been set yet.
The investigation was handled by the Federal Bureau of Investigation. This prosecution was handled by Assistant U.S. Attorneys Tom O’Malley and Ben Bain-Creed of the U.S. Attorney’s Office in Charlotte.
Bossier City Man Sentenced for Running an Internet Gambling OperationRead the Press Release
SHREVEPORT, La. –United States Attorney Stephanie A. Finley announced today thatTerry Lee Doty Jr., 34, of Bossier City, La., was sentenced by U.S. District Judge S. Maurice Hicks Jr., to three years of probation and was ordered to pay a $50,000 fine for operating an illegal internet sports gambling site.
Doty pleaded guilty in April 2013, to one count of transmission of wagering information, a federal felony offense. According to FBI testimony presented at the guilty plea, Doty was the local administrator for an internet sports gambling site based in Costa Rica. Doty had approximately 280 clients placing sports bets with him, one of which was an undercover FBI agent.
“Sports gambling on internet websites is no different than bookmaking operations run by traditional ‘pay phone’ bookies,” Finley stated. “Gambling on sporting events is strictly regulated, but unregulated internet sports books preclude any meaningful control of gambling and avoid compliance with the law. That is why it is important that we enforce federal gambling laws.”
The Federal Bureau of Investigation and the Louisiana State Police conducted the investigation. Special Assistant U.S. Attorney William J. Flanagan prosecuted the case.
Bernalillo, N.M., Woman Pleads Guilty to Defrauding Wal-Mart and Other Major RetailersRead the Press Release
ALBUQUERQUE – Veronica Benavidez, 38, of Bernalillo, N.M., pleaded guilty this morning to a federal wire fraud charge under a plea agreement with the U.S. Attorney’s Office.
During her plea hearing, Benavidez entered a guilty plea to a felony information charging her with wire fraud. The information alleged that from Jan. 2010 through Dec. 2010, Benavidez engaged in a scheme to defraud major retailers, primarily Wal-Mart stores located throughout the country and outside of New Mexico, by falsely claiming that she purchased merchandise from the stores which was mistakenly sent to other customers. Benavidez then requested and obtained refunds for merchandise that she had not purchased and to which she was not entitled. To perpetuate the scheme, Benavidez requested refunds in her own name and several others and requested that the refunds be sent to various locations in New Mexico, including Albuquerque and Rio Rancho, in the form of MoneyGram wire transfers and Wal-Mart pre-paid money cards. As a result of Benavidez’s illegal scheme, retailers transferred approximately $12,599.58 to Benavidez in New Mexico.
In her plea agreement, Benavidez admitted perpetuating the scheme described in the felony information. She also admitted using cell phones to contact the stores to fraudulently claim refunds. More specifically, Benavidez admitted using cell phones to make 26 calls to 26 stores between Jan. 12, 2010 and Dec. 31, 2010, and receiving approximately $12,599.58 in fraudulent refunds.
At sentencing, Benavidez faces a maximum possible sentence of 20 years in prison and a $250,000 fine. The plea agreement requires that Benavidez make full restitution to the victims of her criminal conduct, which is estimated at $39,331.70. Benavidez’s sentencing date has yet to be scheduled.
This case was investigated by the Albuquerque office of the FBI and is being prosecuted by Assistant U.S. Attorney Mary L. Higgins.
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Attorney Charged with Participating in Extensive Insurance Fraud ConspiracyRead the Press Release
Deirdre M. Daly, Acting United States Attorney for the District of Connecticut, and Kimberly K. Mertz, Special Agent in Charge of the New Haven Division of the Federal Bureau of Investigation, announced that a federal grand jury in New Haven has returned a nine-count indictment charging attorney JOSEPH P. HADDAD, 65, of Orange, with federal offenses related to his participation in an extensive insurance fraud scheme.
The indictment was returned on July 25, 2013 and was unsealed today. HADDAD appeared this afternoon before United States Magistrate Judge Holly B. Fitzsimmons in Bridgeport, entered a plea of not guilty and was released on a $150,000 bond.
This matter stems from “Operation Running Man,” a 14-month undercover fraud investigation headed by the Federal Bureau of Investigation. The investigation included the use of recordings of an undercover special agent meeting with HADDAD, various doctors and chiropractors in relation to auto-accident personal injury litigation.
As alleged in the indictment, HADDAD, a Bridgeport-based personal injury attorney, conspired with chiropractors and others to defraud several insurance companies by exaggerating the auto accident injuries of HADDAD’s clients, and the cost of their medical care, to justify larger monetary settlements with the insurance companies. As part of the scheme, the co-conspirators fabricated medical records, prescribed unnecessary pain medication, performed unnecessary chiropractic treatment, ordered and billed for diagnostic tests of questionable medical value, and overstated injuries or permanent partial disabilities that were allegedly caused by the accidents.
“This kind of blatant fraud drives up the cost of insurance for all people,” stated Acting U.S. Attorney Daly. “With the help of the FBI, the U.S. Attorney’s Office is committed to uncovering these schemes and prosecuting those who are the most responsible, especially corrupt attorneys and doctors who drive these schemes and profit the most in direct violation of their professional oaths.”
“The level of detail and orchestration alleged in this conspiracy to defraud automobile insurance companies is wrought with unadulterated greed and avarice,” stated FBI Special Agent in Charge Mertz. “As an attorney, Mr. Haddad is an officer of the court and, therefore, privileged and entrusted with upholding its laws and ethical canons. Instead, because of his selfish actions, Mr. Haddad is now a defendant in federal court and faced with some very serious charges.”
The indictment alleges that, between December 2006 and February 2010, HADDAD conspired in the scheme with Francisco R. Carbone, who had been licensed to practice medicine until his license was revoked by the State of Connecticut in March 2005, and with Dr. Mark Kirshner, who owned and operated two chiropractor offices in Bridgeport and one in Stamford.
As part of the scheme, it is alleged that HADDAD would pay “runners” to locate and deliver to him clients for his personal injury practice. Because state law barred attorneys from hiring runners in personal injury cases, HADDAD attempted to hide this practice by paying the runners in cash. Dr. Kirshner regularly met with HADDAD to provide him with thousands of dollars in cash and, in return, HADDAD reimbursed Kirshner with checks written from his business account. HADDAD often included on the checks false memo lines suggesting that the checks were for medical expenses incurred by his clients. During the course of the conspiracy, it is alleged that Kirshner gave HADDAD more than $100,000 in cash. HADDAD also paid runners with checks directly from his client trust account, often disguising these payments as “independent investigative services.”
The indictment further alleges that HADDAD regularly instructed clients to see Carbone for purported medical treatment, even though HADDAD was aware that Carbone had lost his medical license. Carbone provided HADDAD’s clients with prescription pain medication, even if the medication was not needed and, in reports, fabricated the clients’ injuries, medical conditions and permanent partial disability ratings. In multiple instances, Carbone did no medical examination at all. Carbone billed the victim insurance carriers in his name or in the name of another physician for services he allegedly rendered, and provided prescriptions, bills, medical reports and final reports to HADDAD, who submitted the documents to the victim carriers to support requests for settlement.
It is further alleged that HADDAD referred clients to Dr. Kirshner’s Bridgeport chiropractor offices, which operated under the name Health First Medical, P.C., and that Kirshner often permitted HADDAD to influence the course of patients’ medical treatments by acquiescing to HADDAD’s instructions that a patient receive more treatment and diagnostic tests despite the questionable need for both. Kirshner and other chiropractors at Health First, including Jennifer Netter, established a protocol to treat patients in HADDAD’s cases for six months, regardless of medical need, and would not resolve treatment of patients unless instructed to do so by HADDAD. Netter and others at Health First often falsified medical records by indicating that they had examined the patients when they had not, and by misrepresenting that patients’ pain complaints and other symptoms continued. After the six-month period, each patient would receive a permanent partial disability rating, regardless of the permanence of the medical condition. If a patient had received a permanency rating for a prior accident, the protocol was to give a higher or different disability rating for the present accident.
Kirshner also owned a diagnostic testing company, Midas Medical LLC, and instructed his employees to conduct Nerve Conduction Velocity (NCV) tests whenever a patient’s symptoms could potentially implicate testing, even though he knew the test results would not change the course of treatment. It is alleged that HADDAD and Kirshner arranged for Carbone to order the tests, believing that, if ordered by a doctor, the tests would be given greater weight by the victim insurance companies and increase the likelihood of higher settlement payments. It is further alleged that HADDAD summoned at least one chiropractor to his office so that Kirshner could explain that the chiropractor would receive a kickback of several hundred dollars for each referral of HADDAD’s clients for NCV testing. Kirshner’s office would provide to HADDAD a bill of approximately $2,000 for each NCV test, and HADDAD would submit the bills to the victim carriers as part of settlement discussions.
As disclosed during today’s court proceeding, more than 10 insurance carriers lost a total of approximately $2.5 million as a result of this fraud scheme.
The indictment charges HADDAD with one count of conspiracy to commit mail fraud and eight counts of mail fraud. If convicted, HADDAD faces a maximum term of imprisonment of 20 years on each count.
Carbone, Kirshner, Netter, two other chiropractors and a licensed doctor of osteopathic medicine have pleaded guilty to charges stemming from this scheme. Each awaits sentencing.
As to HADDAD, Acting U.S. Attorney Daly stressed that an indictment is not evidence of guilt. Charges are only allegations, and each defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This matter is being investigated by the Federal Bureau of Investigation, with the assistance of the National Insurance Crime Bureau, the Metropolitan Property and Casualty Insurance’s Special Investigation Unit and the Travelers Insurance Company.
The case is being prosecuted by Assistant United States Attorneys Christopher W. Schmeisser and Robert M. Spector.
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(203) 821-3722 [email protected]Attleboro Business Man Sentenced for Falsifying Results of Harzardous Material TestingRead the Press Release
BOSTON – The owner of a North Attleboro company that tests compressed gas cylinders was sentenced today in U.S. District Court in Worcester for falsifying the re-testing of thousands of cylinders.
Aaron Beauchesne, 37, of Attleboro Falls, was sentenced by U.S. District Judge F. Dennis Saylor IV to six months home confinement, followed by two years of probation and $77,953 in restitution. In May 2013, Beauchesne pleaded guilty to failing to test and falsifying the results of almost 6,000 compressed gas cylinders for numerous customers in the South Shore area.
Beauchesne was the sole owner of Beauchesne Fire Equipment which tested and certified fire extinguishers and other compressed gas cylinders, such as oxygen tanks, for public and private customers. Under the Federal Hazardous Materials Transportation Law, cylinders used to transport compressed gasses must be requalified periodically to determine the structural integrity of the cylinders and to identify dangerous or nonperforming cylinders. Beauchesne Fire Equipment was certified by the U.S. Department of Transportation as an approved requalification facility for retesting and requalifying compressed gas cylinders. Throughout 2011 and continuing through early 2012, Beauchesne frequently failed to conduct hydrostatic testing and/or instructed employees to forego the testing on thousands of compressed gas cylinders.
United States Attorney Carmen M. Ortiz and Theodore L. Doherty III, Special Agent in Charge of the U.S. Department of Transportation, Office of the Inspector General, Office of Investigations, made the announcement today. The case was prosecuted by Assistant U.S. Attorney S. Theodore Merritt of Ortiz’s Public Corruption Unit.
$956,590 Settlement with UPMC Resolves False Claims Act AllegationsRead the Press Release
PITTSBURGH, Pa. - The University of Pittsburgh Medical Center (“UPMC”) and a related joint venture, UPMC VNA Home Health (“UPMC Home Health”), have agreed to pay the United States $956,590 to settle False Claims Act allegations, United States Attorney David J. Hickton announced today.
The settlement results from a self disclosure by UPMC to the United States Attorney’s Office concerning referrals for home health services made from UPMC hospitals to UPMC Home Health. Based on information provided by UPMC, the United States alleged that it had civil claims against UPMC and UPMC Home Health resulting from Medicare billings for home health services that were not supported by a documented face-to-face encounter with a physician or authorized non-physician practitioner, as required by Medicare rules and regulations. The settlement resolves the matter without the filing of litigation.
This matter was investigated by the Office of Inspector General of the Department of Health and Human Services and the United States Attorney’s Office for the Western District of Pennsylvania. Assistant United States Attorney David Lew handled this matter on behalf of the United States.
30 July 2013
Wyeth Pharmaceuticals Agrees to Pay $490.9 Million for Marketing the Prescription Drug Rapamune for Unapproved UsesRead the Press Release
Wyeth Pharmaceuticals Inc., a pharmaceutical company acquired by Pfizer, Inc. in 2009, has agreed to pay $490.9 million to resolve its criminal and civil liability arising from the unlawful marketing of the prescription drug Rapamune for uses not approved as safe and effective by the U.S. Food and Drug Administration (FDA), the Justice Department announced today. Rapamune is an “immunosuppressive” drug that prevents the body’s immune system from rejecting a transplanted organ.
“FDA’s drug approval process ensures companies market their products for uses proven safe and effective,” said Stuart F. Delery, Acting Assistant Attorney General for the Justice Department’s Civil Division. “We will hold accountable those who put patients’ health at risk in pursuit of financial gain.”
The Federal Food, Drug and Cosmetic Act (FDCA) requires a company such as Wyeth to specify the intended uses of a product in its new drug application to the FDA. Once approved, a drug may not be introduced into interstate commerce for unapproved or “off-label” uses until the company receives FDA approval for the new intended uses. In 1999, Wyeth received approval from the FDA for Rapamune use in renal (kidney) transplant patients. However, the information alleges, Wyeth trained its national Rapamune sales force to promote the use of the drug in non-renal transplant patients. Wyeth provided the sales force with training materials regarding non-renal transplant use and trained them on how to use these materials in presentations to transplant physicians. Then, Wyeth encouraged sales force members, through financial incentives, to target all transplant patient populations to increase Rapamune sales.
“The FDA approves drugs for certain uses after lengthy clinical trials,” said Sanford Coats, U.S. Attorney for the Western District of Oklahoma. “Compliance with these approved uses is important to protect patient safety, and drug companies must only market and promote their drugs for FDA-approved uses. The FDA approved Rapamune for limited use in renal transplants and required the label to include a warning against certain uses. Yet, Wyeth trained its sales force to promote Rapamune for off-label uses not approved by the FDA, including ex-renal uses, and even paid bonuses to incentivize those sales. This was a systemic, corporate effort to seek profit over safety. Companies that ignore compliance with FDA regulations will face criminal prosecution and stiff penalties.”
Wyeth has pleaded guilty to a criminal information charging it with a misbranding violation under the FDCA. The resolution includes a criminal fine and forfeiture totaling $233.5 million. Under a plea agreement, which has been accepted by the U.S. District Court in Oklahoma City, Wyeth has agreed to pay a criminal fine of $157.58 million and forfeit assets of $76 million.
The resolution also includes civil settlements with the federal government and the states totaling $257.4 million. Wyeth has agreed to settle its potential civil liability in connection with its off-label marketing of Rapamune. The government alleged that Wyeth violated the False Claims Act, from 1998 through 2009, by promoting Rapamune for unapproved uses, some of which were not medically accepted indications and, therefore, were not covered by Medicare, Medicaid and other federal health care programs. These unapproved uses included non-renal transplants, conversion use (switching a patient from another immunosuppressant to Rapamune) and using Rapamune in combination with other immunosuppressive agents not listed on the label. The government alleged that this conduct resulted in the submission of false claims to government health care programs. Of the amounts to resolve the civil claims, Wyeth will pay $230,112,596 to the federal government and $27,287,404 to the states.
“Wyeth’s conduct put profits ahead of the health and safety of a highly vulnerable patient population dependent on life-sustaining therapy,” said Antoinette V. Henry, Special Agent in Charge, Metro-Washington Field Office, FDA Office of Criminal Investigations. “FDA OCI is committed to working with the Department of Justice and our law enforcement counterparts to protect public health.”
Pfizer is currently subject to a Corporate Integrity Agreement (CIA) with the Department of Health and Human Services’ Office of Inspector General that it entered in connection with another matter in 2009, shortly before acquiring Wyeth. The CIA covers former Wyeth employees who now perform sales and marketing functions at Pfizer. Under the CIA, Pfizer is subject to exclusion from federal health care programs, including Medicare and Medicaid, for a material breach of the CIA, and the company is subject to monetary penalties for less significant breaches.
“We are committed to enforcing the laws protecting public health, taxpayers and government health programs, and to promoting effective compliance programs,” said Daniel R. Levinson, Inspector General, Department of Health and Human Services. “Our integrity agreement with Pfizer, which acquired Wyeth, includes required risk assessments, a confidential disclosure program, and auditing and monitoring to help prospectively identify improper marketing.”
The civil settlement resolves two lawsuits pending in federal court in the Western District of Oklahoma under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens to bring civil actions on behalf of the government and share in any recovery. The first action was filed by a former Rapamune sales representative, Marlene Sandler, and a pharmacist, Scott Paris. The second action was filed by a former Rapamune sales representative, Mark Campbell. The whistleblowers’ share of the civil settlement has not been resolved.
"The success obtained in this case is an excellent example of how we address the threats to our nation’s health care system; the importance of the public reporting of fraud, waste, or abuse; and the significant results that can be obtained through multiple agencies cooperating in investigations,” said James E. Finch, Special Agent in Charge of the Oklahoma City Division of the FBI.
The criminal case was handled by the U.S. Attorney’s Office for the Western District of Oklahoma (USAO) and the Justice Department’s Civil Division, Consumer Protection Branch. The civil settlement was handled by USAO and the Justice Department’s Civil Division, Commercial Litigation Branch. The Department of Health and Human Services’ (HHS) Office of Counsel to the Inspector General; the HHS Office of General Counsel, Center for Medicare and Medicaid Services; the FDA’s Office of Chief Counsel; and the National Association of Medicaid Fraud Control Units. These matters were investigated by the FBI; the FDA’s Office of Criminal Investigation; HHS’ Office of Inspector General, Office of Investigations and Office of Audit Services; the Defense Criminal Investigative Service; the Office of Personnel Management’s Office of Inspector General and Office of Audit Services; the Department of Veterans’ Affairs’ Office of Inspector General; and TRICARE Program Integrity.
Except for conduct admitted in connection with the criminal plea, the claims settled by the civil agreement are allegations only, and there has been no determination of civil liability. The civil lawsuits are captioned United States ex rel. Sandler et al v. Wyeth Pharmaceuticals, Inc., Case No. 05-6609 (E.D. Pa.) and United States ex rel. Campbell v. Wyeth, Inc., Case No. 07-00051 (W.D. Okla.).
Wyeth Pharmaceuticals Agrees to Pay $490.9 Million for Marketing the Prescription Drug Rapamune for Unapproved UsesRead the Press Release
Oklahoma City – Wyeth Pharmaceuticals, Inc., a pharmaceutical company acquired by Pfizer, Inc. in 2009, has agreed to pay $490.9 million to resolve its criminal and civil liability arising from the unlawful marketing of the prescription drug Rapamune for uses not approved as safe and effective by the U.S. Food and Drug Administration (FDA), the Justice Department announced today. Rapamune is an "immunosuppressive" drug that prevents the body’s immune system from rejecting a transplanted organ.
"The FDA approves drugs for certain uses after lengthy clinical trials," said Sanford Coats, U.S. Attorney for the Western District of Oklahoma. "Compliance with these approved uses is important to protect patient safety, and drug companies must only market and promote their drugs for FDA-approved uses. The FDA approved Rapamune for limited use in renal transplants and required the label to include a warning against certain uses. Yet, Wyeth trained its sales force to promote Rapamune for off-label uses not approved by the FDA, including ex-renal uses, and even paid bonuses to incentivize those sales. This was a systemic, corporate effort to seek profit over safety. Companies that ignore compliance with FDA regulations will face criminal prosecution and stiff penalties."
"FDA’s drug approval process ensures companies market their products for uses proven safe and effective," said Stuart F. Delery, Acting Assistant Attorney General for the Justice Department’s Civil Division. "We will hold accountable those who put patients’ health at risk in pursuit of financial gain."
The Federal Food, Drug and Cosmetic Act (FDCA) requires a company such as Wyeth to specify the intended uses of a product in its new drug application to the FDA. Once approved, a drug may not be introduced into interstate commerce for unapproved or "off-label" uses until the company receives FDA approval for the new intended uses. In 1999, Wyeth received approval from the FDA for Rapamune use in renal (kidney) transplant patients. However, the information alleges, Wyeth trained its national Rapamune sales force to promote the use of the drug in non-renal transplant patients. Wyeth provided the sales force with training materials regarding non-renal transplant use and trained them on how to use these materials in presentations to transplant physicians. Then, Wyeth encouraged sales force members, through financial incentives, to target all transplant patient populations to increase Rapamune sales.
Wyeth has pled guilty to a criminal information charging it with a misbranding violation under the FDCA. The resolution includes a criminal fine and forfeiture totaling $233.5 million. Under a plea agreement, which has been accepted by the U.S. District Court in Oklahoma City, Wyeth has agreed to pay a criminal fine of $157.58 million and forfeit assets of $76 million.
The resolution also includes civil settlements with the federal government and the states totaling $257.4 million. Wyeth has agreed to settle its potential civil liability in connection with its off-label marketing of Rapamune. The government alleged that Wyeth violated the False Claims Act, from 1998 through 2009, by promoting Rapamune for unapproved uses, some of which were not medically accepted indications and, therefore, were not covered by Medicare, Medicaid and other federal health care programs. These unapproved uses included non-renal transplants, conversion use (switching a patient from another immunosuppressant to Rapamune) and using Rapamune in combination with other immunosuppressive agents not listed on the label. The government alleged that this conduct resulted in the submission of false claims to government health care programs. Of the amounts to resolve the civil claims, Wyeth will pay $230,112,596 to the federal government and $27,287,404 to the states.
"Wyeth’s conduct put profits ahead of the health and safety of a highly vulnerable patient population dependent on life-sustaining therapy," said Antoinette V. Henry, Special Agent in Charge, Metro-Washington Field Office, FDA Office of Criminal Investigations. "FDA OCI is committed to working with the Department of Justice and our law enforcement counterparts to protect public health."
Pfizer is currently subject to a Corporate Integrity Agreement (CIA) with the Department of Health and Human Services’ Office of Inspector General that it entered in connection with another matter in 2009, shortly before acquiring Wyeth. The CIA covers former Wyeth employees who now perform sales and marketing functions at Pfizer. Under the CIA, Pfizer is subject to exclusion from federal health care programs, including Medicare and Medicaid, for a material breach of the CIA, and the company is subject to monetary penalties for less significant breaches.
"We are committed to enforcing the laws protecting public health, taxpayers and government health programs, and to promoting effective compliance programs," said Daniel R. Levinson, Inspector General, Department of Health and Human Services. "Our integrity agreement with Pfizer, which acquired Wyeth, includes required risk assessments, a confidential disclosure program, and auditing and monitoring to help prospectively identify improper marketing."
The civil settlement resolves two lawsuits pending in federal court in the Western District of Oklahoma under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens to bring civil actions on behalf of the government and share in any recovery. The first action was filed by a former Rapamune sales representative, Marlene Sandler, and a pharmacist, Scott Paris. The second action was filed by a former Rapamune sales representative, Mark Campbell. The whistleblowers’ share of the civil settlement has not been resolved.
"The success obtained in this case is an excellent example of how we address the threats to our nation’s Health Care System; the importance of the public reporting of fraud, waste, or abuse; and the significant results that can be obtained through multiple agencies cooperating in investigations," said James E. Finch, Special Agent in Charge of the Oklahoma City Division of the Federal Bureau of Investigation.
The criminal case was handled by the U.S. Attorney’s Office for the Western District of Oklahoma (USAO) and the Justice Department’s Civil Division, Consumer Protection Branch. The civil settlement was handled by USAO and the Justice Department’s Civil Division, Commercial Litigation Branch. The Department of Health and Human Services’ (HHS) Office of Counsel to the Inspector General; the HHS Office of General Counsel, Center for Medicare and Medicaid Services; the FDA’s Office of Chief Counsel; and the National Association of Medicaid Fraud Control Units. These matters were investigated by the Federal Bureau of Investigation; the FDA’s Office of Criminal Investigation; HHS’ Office of Inspector General, Office of Investigations and Office of Audit Services’ the Defense Criminal Investigative Service; the Office of Personnel Management’s Office of Inspector General and Office of Audit Services; the Department of Veterans’ Affairs’ Office of Inspector General; and TRICARE Program Integrity.
Except for conduct admitted in connection with the criminal plea, the claims settled by the civil agreement are allegations only, and there has been no determination of civil liability. The civil lawsuits are captioned United States ex rel. Sandler et al v. Wyeth Pharmaceuticals, Inc., Case No. 05-6609 (E.D. Pa.) and United States ex rel. Campbell v. Wyeth, Inc., Case No. 07-00051 (W.D. Okla.). Pfizer cooperated with the government’s investigation.
This case was prosecuted by United States Attorney Sanford C. Coats and Assistant U.S. Attorneys Vicki Zemp Behenna and H. Lee Schmidt.
Woodinville, Washington Company and Owner Plead Guilty to Violating Arms Export Control Act and Wire FraudRead the Press Release
to Taiwan
A Woodinville, Washington based company and its owner pleaded guilty today in U.S. District Court in Seattle to violating the Arms Export Control Act and wire fraud, announced U.S. Attorney Jenny A. Durkan. The company, PRECISION IMAGE CORPORATION, is operated by owner, CHIH-KWANG HWA, out of his Woodinville home. HWA obtained contracts to supply circuit boards to the U.S. Navy, by falsely claiming the boards would be manufactured in the United States. Instead HWA illegally sent restricted information to a company in Taiwan for the boards to be manufactured there. The company faces a fine of up to $1,000,000 and HWA faces up to 20 years in prison when sentenced by U. S. District Judge James. L. Robart on October 28, 2013.
“Our national security depends upon protecting our military systems and their specifications. Going ‘on the cheap,’ gave this defendant an unfair advantage over other suppliers and risked our security,” said U.S. Attorney Jenny A. Durkan. “Protecting our military technical data and enforcing our export restrictions are critical priorities of the U.S. Attorney’s Office.”
According to the charging information and the plea agreements in the case, between 2009 and 2011, HWA obtained contracts worth $180,034 to supply circuit boards to the U.S. Navy. The Navy supplied technical data to PRECISION IMAGE that contained the technical specifications for the circuit boards. This technical data was designated on the United States Munitions List, International Traffic in Arms Regulations. As a result, this technical data could not legally be transmitted outside the United States without a license from the U.S. State Department. CHIH-KWANG HWA knew about this restriction at the time he received the technical data from the Navy. HWA did not get the appropriate licenses, and sent the restricted data to the Taiwan manufacturer. One of the transmissions occurred in September 2011, and the Taiwanese manufactured circuit boards were later provided to the Navy. In addition, many of the contracts awarded to HWA were set aside for companies that promised to manufacture the boards in the United States. HWA falsely represented to the Navy in connection with these contracts that the boards were being manufactured in the United States, when instead they were being manufactured in Taiwan.
“U.S. export controls are in place to keep sensitive technology from falling into the hands of our nation's enemies,” said Brad Bench, special agent in charge of HSI Seattle. “One of HSI's highest priorities is to prevent illicit procurement networks, terrorist groups, and hostile nations from illegally obtaining military items and controlled dual-use technology.”
Under the terms of the plea agreement, prosecutors will recommend the company pay a $300,000 fine and HWA serve a sentence within the anticipated guidelines range of 15-21 months in prison. Judge Robart is free to accept or reject these recommendations at the time of sentencing.
The case was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and the Naval Criminal Investigative Service. The case is being prosecuted by Assistant United States Attorneys Todd Greenberg and Thomas Woods.
Press contact for the U.S. Attorney’s Office is Emily Langlie at (206) 553-4110 or [email protected].Woman Sentenced for Stealing Dead Father's Social Security BenefitsRead the Press Release
PHILADELPHIA - Sophia Beltz, 55, of Philadelphia, PA was sentenced today to nine months in prison for the theft of $172,133 in government funds. Beltz stole Social Security Administration Retirement Insurance Benefits intended for her father who had died in February 1997. Beltz carried out her fraud scheme until it was discovered in August 2012. She pleaded guilty on April 30, 2013. U.S. District Court Judge Legrome D. Davis noted that Beltz collected the funds every month for over 15 years which amounted to approximately 180 fraudulently collected checks.
In addition to the prison term, Beltz must pay restitution to the Social Security Administration in the amount of $172,133 and she must serve three years of supervised release following her prison term.
The case was investigated by the Social Security Administration, Office of Inspector General and was prosecuted by Special Assistant United States Attorney Amanda R. Reinitz.UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Weslaco Man Sentenced for Carjacking Woman and Four ChildrenRead the Press Release
McALLEN, Texas - Luis Armando Garza Jr., 31, of Weslaco, has been ordered to prison following his conviction for carjacking and use of a firearm during a crime of violence, United States Attorney Kenneth Magidson announced today. Garza pleaded guilty Feb. 27, 2013.
Today, U.S. District Judge Micaela Alvarez sentenced Garza to 139 months in federal prison followed by five years of supervised release and ordered restitution to the victims.
The conviction stems from Garza’s armed carjacking of a minivan from a woman and four children on Nov. 25, 2012. The evidence presented during the hearing today showed that a Mexican National offered to pay Garza $2,000 to steal a vehicle he could take to Mexico. Once the Mexican National provided him with the handgun, Garza approached a minivan while it was parked at a Weslaco convenience store. Without warning, Garza pointed the weapon at the owner while demanding she and the children, ranging from 12 to 15 years of age, exit the vehicle. Once they complied with his demands, Garza stole the family vehicle.
In handing down the sentences, Judge Alvarez noted the tremendous amount of harm he had inflicted by pointing his weapon at a mother and her terrified children. She referenced the financial and emotional distress the victims continue to suffer from the Garza’s crime. Moreover, Judge Alvarez expressed her concern for the deliberate manner in which the defendant committed the offense as well as his lengthy and violent criminal history.
Garza will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
This case was investigated by the FBI with assistance from the Weslaco Police Department. The case is being prosecuted by Assistant United States Attorney Grady J. Leupold.
Waterloo Man Pleads Guilty to Robbing Bank and Assaulting A CustomerRead the Press Release
A man who robbed the Farmer’s Savings Bank in Frederika, Iowa, and pistol whipped a bank customer during the robbery, pled guilty today in federal court in Cedar Rapids.
Steven Vandewalker, 38, from Waterloo, Iowa, was convicted of one count of bank robbery and using a dangerous weapon to assault another person during the course of the robbery.
In a plea agreement, Vandewalker admitted he entered the Farmer’s Savings Bank in Frederika around 12:30 p.m. on October 23, 2012, carrying a handgun. Vandewalker was wearing a baseball cap and a mask covering the bottom of his face. After entering the bank, Vandewalker went into an office where a bank employee and a customer were talking and yelled at the two to get on the floor. Vandewalker then hit the customer in the face with the handgun, causing the customer to fall to the floor. Vandewalker then went behind the teller counter and had a teller give him cash from the drawers and the bank safe. Vandewalker then fled the bank with more than $36,000. On October 26, 2012, officers searched Vandewalker’s home in Waterloo, finding $26,000 in cash and a handgun.
Sentencing before United States District Court Chief Judge Linda R. Reade will be set after a presentence report is prepared. Vandewalker remains detained pending sentencing. Vandewalker faces a possible maximum sentence of 25 years’ imprisonment, a $250,000 fine, a $100 special assessment, and 5 years of supervised release following any imprisonment.
The case is being prosecuted by Assistant United States Attorney Anthony Morfitt and was investigated by the Iowa Division of Criminal Investigation, the Bremer County Sheriff’s Office, the Buchanan County Sheriff’s Office, the Waterloo Police Department, and the Federal Bureau of Investigation.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 13-2010.