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26 July 2013
Cherry Creek Man Sentenced for Sexually Assaulting A Female MinorRead the Press Release
United States Attorney Brendan V. Johnson announced that a Cherry Creek, South Dakota, man convicted of Sexual Contact with a Minor was sentenced on July 25, 2013, by U.S. District Judge Roberto A. Lange.
The investigation was conducted by the Federal Bureau of Investigation and the Cheyenne River Sioux Tribe Law Enforcement Division. The case was prosecuted by Assistant U.S. Attorney Mikal Hanson.
Scott Ray Marrowbone, age 37, was sentenced to 24 months in custody, five years of supervised release, and a $100 special assessment to the Federal Crime Victims Fund. He must also register as a sex offender.
Marrowbone was indicted by a federal grand jury on October 16, 2012. He pled guilty to Count II of the Indictment—Sexual Contact with a Minor—on January 25, 2013.
The conviction arose from an incident that occurred between May 2005 and October 2007 when Marrowbone sexually assaulted a female minor near Eagle Butte.
California Man Sentenced to 5½ Years in Prison for Nevada Mortgage Fraud SchemeRead the Press Release
LAS VEGAS, Nev. – A California man who orchestrated a double escrow mortgage fraud scheme involving eight houses in the Las Vegas, Nev. area, has been sentenced to 5½ years in federal prison, three years of supervised release, and ordered to pay over $3.5 million in restitution, announced Daniel G. Bogden, United States Attorney for the District of Nevada.
George Anderson, 55, of Copperopolis, Calif., was sentenced on Thursday, July 25, 2013, by Senior U.S. District Judge Roger L. Hunt. Anderson was indicted in March 2011 and pleaded guilty in April 2013 to one count of conspiracy to commit wire fraud.
“During the mid- to late 2000’s, thousands of fraudulent residential mortgage transactions in Nevada caused financial hardships for many innocent homeowners and hundreds of millions of dollars of loss to financial institutions and investors,” said U.S. Attorney Bogden. “We made this type of fraud a priority and through the end of 2012, had prosecuted 213 persons, most of who were convicted and sent to prison.”
According to the plea agreement, in about 2005, Anderson solicited four straw buyers to buy seven houses in Henderson, Nev. and one house in Las Vegas, with the understanding that Anderson would control the houses and later re-sell them at a profit. Anderson solicited a co-defendant, Andrew Swan, 38, of Heyworth, Ill., to buy the houses from the straw buyers at inflated prices in exchange for Swan receiving a portion of the profit from each sale. Swan then recruited a relative to purchase several of the homes again at further inflated prices. False information was submitted to the lenders and to the escrow company in order to receive the loans and to cause disbursement of the loan proceeds to Swan’s company, Creative Capital Group, and Anderson’s company, Anderson Financial Group. Approximately $54,000 to $86,000 from the sale of each home was dispersed to Creative Capital Group; approximately $67,000 to $164,000 from the sale of each home was dispersed to Anderson Financial Group; and approximately $19,000 to $69,000 was dispersed to each original straw buyer. The majority of the mortgage payments for the homes were not paid and the homes went into foreclosure. At least 16 mortgage loans totaling approximately $6.5 million were obtained as part of the conspiracy to defraud, and the financial institutions suffered a loss of approximately $3.5 million.
The co-defendant Swan also pleaded guilty, and was sentenced in June to 30 months in prison and ordered to pay $3.5 million in restitution.
Anderson and Swan are currently released on bond and must self-report to federal prison by Oct. 25, 2013, and Aug. 16, 2013, respectively.
The case was investigated by the FBI and prosecuted by Assistant U.S. Attorneys Sarah E. Griswold and Brian Pugh.
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.
Box Elder Man Indicted for Burglary at Ellsworth Air Force BaseRead the Press Release
United States Attorney Brendan V. Johnson announced that a Box Elder, South Dakota, man has been indicted by a federal grand jury for allegedly burglarizing a building at Ellsworth Air Force Base on March 2, 2013.
Corey Roney, age 18, was indicted on July 23, 2013, for third degree burglary, destruction of government property, and larceny. Roney appeared before U.S. Magistrate Judge Veronica L. Duffy on July 25, 2013, and pled not guilty to the indictment.
The maximum penalty upon conviction is 5 years of imprisonment and a $250,000 fine. The charges are merely accusations and Roney is presumed innocent until and unless proven guilty.
The investigation is being conducted by the United States Air Force. Assistant U.S. Attorney Wayne Venhuizen is prosecuting the case.
Roney was released on bond pending trial. A trial date has not been set.Belcourt Man Pleads Guilty to Assaulting Federal OfficerRead the Press Release
BISMARCK – U.S. Attorney Timothy Q. Purdon announced that on July 26, 2013, Cameron J. Gooden, 18, Belcourt, N.D., pleaded guilty in U.S. District Court to a charge of assaulting and resisting a federal officer.
On Dec. 24, 2012, a correctional officer at the Turtle Mountain Correctional Facility in Belcourt attempted to remove Gooden from the shower area to return him to his cell. When the officer attempted to enter the shower area, Gooden slammed a metal shower door on the officer pinning him between the door and the metal frame, causing the officer to sustain a rib fracture.
The charge of assaulting and resisting a federal officer carries a statutory maximum penalty of 20 years in federal prison and a $250,000 fine.
The case was investigated by Bureau of Indian Affairs – Turtle Mountain Agency.
Sentencing for Gooden has been scheduled for Oct. 18, 2013, in U.S. District Court in Bismarck,, N.D., at 1:15 p.m.
Assistant U.S. Attorney Brandi Sasse Russell is prosecuting the case.
Bay Area Man Sentenced to 25 Years in Prison for Methamphetamine and Weapons ChargesRead the Press Release
SAN FRANCISCO - Arnoldo Sanchez Farias was sentenced on Tuesday to 25 years in prison for methamphetamine trafficking and possession of a firearm in furtherance of a drug crime, announced U.S. Attorney Melinda Haag.
Sanchez Farais, most recently of Richmond, Calif., pleaded guilty on May 7, 2013, to one count of possessing 50 grams or more of methamphetamine with intent to distribute, in violation of 21 U.S.C. § 841(a)(1) and (b)(1)(A)(viii), and one count of possessing a firearm in furtherance of a drug trafficking crime, in violation of Title 18 U.S.C § 924(c).
According to the plea agreement, on August 9, 2011, Sanchez Farias had nearly 50 pounds of methamphetamine, packaged in individual one-pound bags, hidden in a tool chest in his apartment in Richmond, Calif., as well as seven firearms. Among the weapons were three 9mm pistols, a .357 magnum revolver, two shotguns, and an SKS assault rifle. The weapons were located in Sanchez Farias’ bedroom, including a loaded pistol on his bedside table. Sanchez Farias admitted possessing these weapons in the event a rival drug dealer, drug customer, supplier, or other person sought to rob or harm him.
Sanchez Farias was indicted by the Grand Jury on September 8, 2011.
The sentence was handed down by The Honorable Richard Seeborg, U.S. District Court Judge. Judge Seeborg also sentenced Sanchez Farias to a 10-year period of supervised release and ordered that he forfeit the firearms and approximately $16,000 in cash that agents and officers found with the methamphetamine and the weapons. The defendant has been in custody since August 9, 2011 and will begin serving the sentence immediately.
This case is being prosecuted by Assistant U.S. Attorney Kevin Barry with the assistance of Assistant U.S. Attorney David Countryman and Erica Doerr. The prosecution is the result of a joint investigation by the California Bureau of Narcotics Enforcement, the West Contra Costa Narcotics Enforcement Team, and ICE Homeland Security Investigations.
(Farias Indictment )
Arlington, Texas, Man Fined $10,000 for Role in Conspiracy to Obstruct Justice by Attempting to Influence A Federal JudgeRead the Press Release
FORT WORTH, Texas — At a sentencing hearing held this morning in federal court in Fort Worth, an Arlington, Texas, man, Shani Shehu, 42, was sentenced by U.S. District Judge John McBryde to a two-year term of probation and fined $10,000, following his guilty plea in April 2013 to an information charging one count of conspiracy to obstruct justice by attempting to influence a federal judge. Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
According to documents filed in the case, from early February 2012 to mid-May 2012, Shehu conspired with Halid Amer, 42, formerly of Grand Prairie, Texas, to obstruct justice in an effort to unlawfully obtain a probated sentence for Amer. Amer had pleaded guilty in January 2012 to his role in a mortgage fraud conspiracy and at the time, was awaiting sentencing by U.S. District Judge Jorge A. Solis, in Dallas.
On February 4, 2012, according to the plea documents, Shehu arranged for Amer to meet with a man from Arlington who could put Amer in touch with someone who knew Judge Solis. At the meeting, Amer told the man that he was willing to pay a cash bribe to Judge Solis in return for a guarantee of a probated sentence. This man, however, advised law enforcement of the plans and the FBI arranged for an undercover agent to meet with Shehu and Amer. During an April meeting, Amer expressed concern that if he were caught making a bribe, he could make matters worse for himself. Then, in a meeting one week later, Shehu expressed concern that he believed that they might be working with an undercover law enforcement agent and wanted to receive assurances that they were not. On May 18, 2012, during a meeting with the undercover agent, Amer and Shehu continued negotiating the amount, method and timing of the payment of the cash bribe to Judge Solis.
On June 26, 2012, after the government learned of Amir’s plan to give a cash bribe to the judge in return for a probated sentence, the Court granted the government’s motion to revoke Amir’s bond. Amer is currently serving a 41-month federal prison sentence in Federal Correctional Institute (FCI) Memphis on the mortgage fraud conviction. The conspiracy case against Amir was transferred to the Western District of Tennessee, where he has pleaded guilty and been sentenced on the offense.
The case was investigated by the FBI. Assistant U.S. Attorney Jay Weimer prosecuted.
25 July 2013
Zuhair Hamed and Jihad Hamad Plead Guilty to Conspiracy to Commit BriberyRead the Press Release
ZUHAIR HAMED, age 51, and JIHAD HATEM HAMAD, age 27, both residents of Gretna, Louisiana, pleaded guilty today to one count of Conspiracy to Bribe an Agent of Local Government in Connection with a Program Receiving Federal Funds in a one-count Superseding Bill of Information, announced U. S. Attorney Dana J. Boente. Mr. Boente commended the Police Chief of the City of Harahan for reporting to law enforcement the facts which led to the opening of the investigation, and for cooperating in the investigation.
According to court documents, JIHAD HAMAD was the owner and operator of Harahan Cheap Smokes, a gas station and convenience store located in Harahan, Louisiana. HAMAD was seeking a permit allowing the sale of wine and hard liquor at his store. ZUHAIR HAMED assisted the efforts of JIHAD HAMAD to obtain the liquor permit. The police chief of the City of Harahan repeatedly stated that he would oppose the issuance of such permit because the convenience store was located within 300 feet of a church, a prohibited distance under Louisiana law and Harahan city ordinance.
According to court documents, in March 2012, JIHAD HAMAD told the police chief that his father was a very wealthy man who would be willing to make a contribution to the police chief’s political campaign in exchange for approval of a permit to sell wine and hard liquor at the convenience store. The police chief stated that he thought he knew HAMAD’s father, who had owned a convenience store on Martin Luther King Boulevard in New Orleans. HAMAD agreed that ZUHAIR HAMED, in fact, was his father. However, the two men were not related.
According to court documents, the police chief considered the offer to provide him with campaign contributions in return for the liquor permit to be an attempt to bribe him. Therefore, the police chief reported the matter to the Federal Bureau of Investigation, which initiated an investigation of the matter.
ZUHAIR HAMED then met several times with the police chief, discussed the liquor permit, and offered payments in cash, by blank money order, or by business checks payable to the police chief’s campaign. In May and June of 2012, JIHAD HAMAD gave ZUHAIR HAMED $3,000 to be used to make payments to the police chief. ZUHAIR HAMED then paid the police chief a total of $3,000 in two payments, one in cash, and one by means of a check drawn on the account of a business related to ZUHAIR HAMED’s family member, on which check the payee was blank. He also agreed to make additional payments to the police chief in the future. JIHAD HAMAD joined the last meeting held between the police chief and ZUHAIR HAMED, at which the two defendants discussed the financial losses being suffered because wine and hard liquor could not be sold at Harahan Cheap Smokes.
ZUHAIR HAMED and JIHAD HATEM HAMAD each face a maximum term of imprisonment of five years, a fine of $250,000 and three years of supervised release following any term of imprisonment on their pleas of guilty. Sentencing is set for October 31, 2013 at 2:00 p.m.
The case was investigated by the Federal Bureau of Investigation and the United States Attorney’s Office.
The case is being prosecuted by Executive Assistant U. S. Attorney Eileen Gleason.
(Download Factual Basis - Hamed )
(Download Factual Basis - Hamad )
Watervliet Man Gets Eight Years in Prison for Child PornRead the Press Release
GRAND RAPIDS, MICHIGAN – David Alan Inman, 51, of Watervliet, Michigan was sentenced on Wednesday, July 24, 2013, to 96 months (eight years) in federal prison for receipt of child pornography videos, U.S. Attorney Patrick A. Miles, Jr. announced today. In addition to the prison term, U.S. District Judge Janet T. Neff imposed a 10-year term of supervised release that will commence once Inman is released from imprisonment. Inman will also be required to register as a sexual offender.
The case stemmed from an online investigation that took place in late 2009. During that investigation, members of law enforcement learned that an individual, later identified as Inman, had made numerous items of child pornography available for download on the Internet. Agents ultimately executed two search warrants at Inman’s home and recovered a number of computers that contained a substantial collection of child pornography. Inman confessed to downloading child pornography images and videos from the Internet, and he further admitted to sharing child pornography with others via the Internet.
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.
The Federal Bureau of Investigation (FBI) and the Berrien County Sheriff's Department investigated the case. Assistant U.S. Attorney Sean M. Lewis prosecuted the case.
END
Waterloo Woman Found Guilty TO Conspiracy to Distribute HeroinRead the Press Release
April Tillman, 47, from Waterloo, was convicted of conspiracy to distribute heroin by a jury on July 24, 2013, after a three-day trial in federal court in Cedar Rapids.
The evidence at trial showed that from between about January 2007 and August 2012, Tillman was involved in a conspiracy with others in the Waterloo area to distribute at least 1,000 grams of heroin. Tillman assisted the conspiracy by obtaining heroin from Chicago, Illinois, and distributing it in Waterloo.
Sentencing before United States District Court Chief Judge Linda R. Reade will be set for a future date. Tillman was taken into custody by the United States Marshal after the verdict was returned and will remain in custody pending sentencing. Tillman faces a mandatory minimum sentence of 20 years’ imprisonment and a possible maximum sentence of life imprisonment, up tp a $20,000,000 fine, $100 in special assessments, and at least ten years of supervised release following any imprisonment.
The case is being prosecuted by Special Assistant United States Attorney Lisa C. Williams and was investigated by Organized Crime Drug Enforcement Task Force (OCDETF) program of the United States Department of Justice through a cooperative effort of the Cedar Rapids Drug Enforcement Administration (DEA) Task Force, Tri-County Drug Task Force, Homeland Security Investigations, Internal Revenue Service, and Federal Bureau of Investigation. The Cedar Rapids DEA Task Force consists of the DEA; Linn County Sheriff's Office; Cedar Rapids Police Department; Marion Police Department; Iowa Division of Narcotics Enforcement and the Sixth Judicial District Department of Correctional Services. The Tri-County Drug Task Force consists of the Waterloo Police Department; Cedar Falls Police Department; Waverly Police Department; Bremer County Sheriff’s Office; Black Hawk County Sheriff’s Office; LaPorte City Police Department; Evansdale Police Department; Hudson Police Department; and Federal Bureau of Investigation.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 12-2024 (14).
Virginia Man Sentenced to 50 Months in Prison for Traveling to the District of ColumbiaTo Have Sex with Under-Aged ChildRead the Press Release
WASHINGTON – George Ronald Marion, 67, of Fairfax Station, Va., was sentenced today to 50 months in prison for traveling interstate to engage in illicit sexual conduct with a minor and possessing child pornography, announced U.S. Attorney Ronald C. Machen Jr., Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office, and Cathy L. Lanier, Chief of the Metropolitan Police Department (MPD).
Marion, a retired Army officer, pled guilty to the charges in February 2013 in the U.S. District Court for the District of Columbia. He was sentenced by the Honorable Ellen S. Huvelle. Upon completion of his prison term, Marion will be placed on 10 years of supervised release. During that time, he must abide by a number of conditions, including registering as a sex offender, getting sex offender treatment, and following limits on computer/Internet usage and contact with minors. Judge Huvelle also ordered Marion to pay a $3,000 fine.
According to the government’s evidence, between Nov. 28, 2012, and Dec. 8, 2012, Marion communicated online, by text message, and by telephone with an individual regarding Marion’s interest in engaging in sexual contact with an underage girl. Marion and the individual planned to meet on Dec. 8, 2012, to engage in such sexual activity.
The individual actually was acting under law enforcement supervision, working with the FBI’s Child Exploitation Task Force. On Dec. 8, 2012, Marion traveled from Virginia to the prearranged meeting location in Washington, D.C., where he was arrested. Following Marion’s arrest, law enforcement conducted a search of Marion’s residence and found approximately seven videos and 16 images of child pornography on his computer and electronic storage devices.
This case was brought as part of the Department of Justice's Project Safe Childhood initiative and investigated by the FBI's Child Exploitation Task Force, which includes members of the FBI's Washington Field Office and MPD. In February 2006, the Attorney General created Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the U.S. Attorney's Offices, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
In announcing the sentence, U.S. Attorney Machen, Assistant Director in Charge Parlave and Chief Lanier praised the MPD Detectives and Special Agents of the FBI Child Exploitation Task Force. They also praised the work of Assistant U.S. Attorney Catherine K. Connelly and Paralegal Specialist Toni Donato of the Asset Forfeiture and Money Laundering Section. Finally, they commended Assistant U.S. Attorney Cassidy Kesler Pinegar, who prosecuted the case.
13-259Union City Man Pleads Guilty to Drugs and Weapons ChargesRead the Press Release
OAKLAND - Ruben Reynoso pleaded guilty in federal court in Oakland yesterday to four counts of possession with intent to distribute and distribution of methamphetamine and cocaine, and being an alien in possession of ammunition, United States Attorney Melinda Haag announced.
In pleading guilty, Reynoso admitted that in October of 2012 and again in January of 2013, he sold 17 grams methamphetamine out of his residence located on the 600 block of E Street in Union City, California. He further admitted that on the date of his arrest, April 4, 2013, he possessed with the intent to distribute additional methamphetamine and cocaine. Reynoso also admitted to possessing a Lorcin L380 .380 caliber pistol, with a loaded magazine as well as additional .380 caliber ammunition. The pistol was found under the bed in his bedroom and the additional ammunition was found in the closet of the same room in his residence in Union City. Finally, Reynoso admitted that he is an alien, illegally and unlawfully in the United States.
Reynoso, 40 years old, a Mexican citizen, was indicted by a federal Grand Jury on April 18, 2013. He was charged with four counts of possession with intent to distribute and distribution of methamphetamine and cocaine, and being an alien in possession of ammunition, in violation of 21 U.S.C. § 841(a)(1), (b)(1)(B)(viii), (b)(1)(C), and 18 U.S.C. § 922(g)(5)(A). Under the plea agreement, Reynoso pleaded guilty to all counts.
Reynoso has been in continuous federal custody since April 4, 2013.
The sentencing of Reynoso is scheduled for October 16, 2013, before The Honorable Phyllis J. Hamilton, U.S. District Court Judge, in Oakland. The maximum statutory penalty for the violations are as follows:
For each count of violation of 21 U.S.C. § 841(a)(1) and (b)(1)(B)(viii): a. Maximum prison term 40 years b. Minimum mandatory prison term 5 years c. Maximum fine $5,000,000 d. Maximum supervised release term Life e. Minimum supervised release term 4 years
For a violation of 21 U.S.C. § 841(a)(1) and (b)(1)(C): a. Maximum prison term 20 years b. Maximum fine $1,000,000 c. Maximum supervised release term Life d. Minimum supervised release term 3 years
For a violation of 18 U.S.C. § 922(g)(5)(A): a. Maximum prison term 10 years b. Maximum fine $250,000 c. Maximum supervised release term 3 yearsAny sentence following conviction, however, is imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
The prosecution is the result of a ten-month investigation by Homeland Security Investigations and the Southern Alameda County Major Crimes Task Force.
Two Richland County Women Sentenced on Methamphetamine Related ChargesRead the Press Release
Two Richland County women were sentenced today to federal prison terms on methamphetamine related charges, Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today.
Libby J. French, 49, of Claremont, IL, was sentenced to 87 months in prison, to four years supervised release following her imprisonment, and fined $300. French had previously pleaded guilty to a two count federal indictment. Count 1 charged that from on or about July 2009, until on or about September 2012, in Richland County, and elsewhere, Libby French and others conspired to manufacture more than 50 grams of methamphetamine. Count 2 charged that from on or about July 2009, until on or about September 2012, in Richland County, Libby French did knowingly maintain a place, namely his residence in Claremont, Illinois, for the purpose of manufacturing methamphetamine. Libby French’s husband, Ronald French, was previously sentenced to 135 months in prison. Her son, Zachary French, was previously sentenced to 108 months in prison. They were convicted of similar offenses.
Debra J. Harms, 41, of Olney, IL, was sentenced to 97 months in prison, to four years supervised release, and fined $300. Harms previously pleaded guilty to one count in a federal indictment. Count 1 charged that from February 2011, until on or about October 2012, in Richland County and Edwards County, Harms conspired with others to manufacture more than 50 grams of methamphetamine.
The investigations were conducted by the Richland County Sheriff’s Office.
The cases are being handled by Assistant United States Attorney George Norwood.
Two Plead Guilty in Interstate Drug Ring Operating Jefferson CountyRead the Press Release
PITTSBURGH, Pa. - A resident of Hiawatha, Iowa and a resident of Kersey, Pa., pleaded guilty in federal court to a charge of violating federal narcotics laws, United States Attorney David J. Hickton announced today.
Joshua Shaffer, 35, of Hiawatha, Iowa, and Joe Cesa, 26, of Kersey, Pa., pleaded guilty to one count before United States District Judge David S. Cercone.
In connection with the guilty plea, the court was advised that between February 2010 and September 2011, a conspiracy to distribute 10,000 oxycodone tablets and two pounds of methamphetamine existed in Jefferson County in Northwestern Pennsylvania and surrounding counties. Shaffer was the source-of-supply for the conspiracy, sending methamphetamine and oxycodone to Pennsylvania from his Florida home, utilizing couriers traveling by car and mailed packages.
Shaffer generally sold the oxycodone tablets for up to $25 each, and the methamphetamine wholesaled for $5600 an ounce. The pills would then be sold to drug addicts for $35 or $40 apiece, and the methamphetamine would be packaged for individual use and sold. The retail, or "street" value for the drugs Shaffer brought to Pennsylvania exceeded $500,000. Oxycodone is a highly-addictive narcotic drug that is frequently abused in Western Pennsylvania.
Cesa was a street seller of oxycodone provided to him by Shaffer or one of the other seven co-defendants. Seven of the nine defendants charged in the indictment have now pleaded guilty, with the two remaining defendants scheduled to go to trial in November.
Judge Cercone scheduled sentencing for Dec. 13, 2013 at 10:30 a.m for Cesa, and at 11 a.m. for Shaffer. The law provides for a total sentence of up to 20 years in. prison and a fine not to exceed $1,000,000 for Cesa, and not less than 10 years and up to life in prison and a fine not to exceed $10,000,000 for Shaffer. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the criminal history, if any, of the defendant.
Assistant United States Attorney Gregory J. Nescott is prosecuting this case on behalf of the government.
The United States Postal Inspection Service and the Pennsylvania State Police conducted the investigation that led to the prosecution of Joshua Shaffer and Joe Cesa. The Jefferson County District Attorney's Office also assisted in a related investigation targeting other oxycodone distributors.
Two Florida Residents Indicted on Charges of Schemingto Defraud and Threaten Spanish-Speaking ConsumersRead the Press Release
A grand jury in the Southern District of Florida issued an indictment for two individuals on charges of conspiracy, fraud and extortion alleging they operated a series of fraudulent businesses targeting Spanish-speaking consumers, the Justice Department and the U.S. Postal Inspection Service (USPIS) announced today. The indictment charges Daniel Carrasco, 54, and Federico Martin Gioja, 45, both of Miramar, Fla., with incorporating, owning and operating Florida companies that used telemarketers in a phone room in Argentina to extract money from consumers, using lies and extortion.Carrasco and Gioja were charged by criminal complaint and arrested on June 26, 2013. They have remained incarcerated since that time. Carrasco and Gioja, and a third individual, Romino Tasso, also were named in a civil suit filed by the Justice Department. In the civil case, the Justice Department requested that the court issue an injunction, and, subsequently, Judge Cecilia Altonaga issued a temporary restraining order barring further lies to consumers and freezing the assets of Carrasco, Gioja, Tasso and companies under their control.
“We will use every tool at our disposal, including asset freezes, injunctive relief and criminal prosecution, against companies that lie to, extort, threaten and defraud consumers,” said Stuart F. Delery, Acting Assistant Attorney General for the Justice Department’s Civil Division. “Protecting Americans from fraud continues to be a top priority for the Department of Justice.”
According to the civil complaint and the affidavit filed in support of the criminal complaint, the case resulted from a referral by Spanish-language television station, Univision. Companies belonging to Carrasco and Gioja are alleged to have falsely claimed an affiliation with Univision and purported to sell products such as vitamins, lotions, medical insurance and English-language training products. However, the companies frequently did not deliver products ordered by consumers. Since the companies allegedly did not have many of the products they promised to send to consumers, consumers received other products instead. Then, according to the indictment, after consumers refused delivery of the companies’ shipments, the Argentinian phone room telemarketers called and falsely threatened consumers with arrest, deportation or fines on their gas and electric bills.
U.S. Attorney for the Southern District of Florida Wifredo A. Ferrer stated, “These defendants specifically targeted Spanish-speaking victims, pretending to be affiliated with Univision, to sell their products from their phone room in Argentina, when in fact, they had absolutely no connection to Univision, and their companies did not deliver the products consumers ordered. “We are committed to investigating and prosecuting such fraudsters, both domestic and international, whose schemes defraud consumers.”According to the criminal and civil complaints, Carrasco and Gioja routinely changed the names of the companies under which they did business to evade consumer complaints, regulators and law enforcement. Allegedly, a variety of state agencies contacted the businesses regarding their illicit practices. Those working with Carrasco and Gioja, in emails cited in the affidavit in support of arrest, referred to these companies tainted by complaints as “burnt.” Rather than changing the “burnt” companies’ practices, Carrasco and Gioja allegedly incorporated new companies and started the same illegal practices again.
The alleged fraud first came to light when the Spanish language network Univision informed the USPIS that they believed a company was involved in a fraud scheme in which it misrepresented its affiliation with the network. Subsequently, the USPIS investigated the case, submitted the affidavit in support of the criminal complaint and arrested the defendants.
“Postal inspectors will continue to investigate cases involving fraud against consumers and will vigorously pursue those individuals who use the mail to further their criminal schemes,” said Ronald Verrochio, U.S. Postal Inspector in Charge in Miami.
Acting Assistant Attorney General Delery commended the Postal Inspection Service for their investigative efforts and thanked the U.S. Attorney’s Office for the Southern District of Florida for their contributions to the civil case. The criminal case is being prosecuted by Assistant Director Richard Goldberg with the Department of Justice’s Consumer Protection Branch.
Two Florida Residents Indicted on Charges of Scheming to Defraud and Threaten Spanish-Speaking ConsumersRead the Press Release
A grand jury in the Southern District of Florida issued an indictment for two individuals on charges of conspiracy, fraud and extortion alleging they operated a series of fraudulent businesses targeting Spanish-speaking consumers, the Justice Department and the U.S. Postal Inspection Service (USPIS) announced today. The indictment charges Daniel Carrasco, 54, and Federico Martin Gioja, 45, both of Miramar, Fla., with incorporating, owning and operating Florida companies that used telemarketers in a phone room in Argentina to extract money from consumers, using lies and extortion.
Carrasco and Gioja were charged by criminal complaint and arrested on June 26, 2013. They have remained incarcerated since that time. Carrasco and Gioja, and a third individual, Romino Tasso, also were named in a civil suit filed by the Justice Department. In the civil case, the Justice Department requested that the court issue an injunction, and, subsequently, Judge Cecilia Altonaga issued a temporary restraining order barring further lies to consumers and freezing the assets of Carrasco, Gioja, Tasso and companies under their control.
U.S. Attorney for the Southern District of Florida Wifredo A. Ferrer stated, “These defendants specifically targeted Spanish-speaking victims, pretending to be affiliated with Univision, to sell their products from their phone room in Argentina, when in fact, they had absolutely no connection to Univision, and their companies did not deliver the products consumers ordered. “We are committed to investigating and prosecuting such fraudsters, both domestic and international, whose schemes defraud consumers.”
“We will use every tool at our disposal, including asset freezes, injunctive relief and criminal prosecution, against companies that lie to, extort, threaten and defraud consumers,” said Stuart F. Delery, Acting Assistant Attorney General for the Justice Department’s Civil Division. “Protecting Americans from fraud continues to be a top priority for the Department of Justice.”
According to the civil complaint and the affidavit filed in support of the criminal complaint, the case resulted from a referral by Spanish-language television station, Univision. Companies belonging to Carrasco and Gioja are alleged to have falsely claimed an affiliation with Univision and purported to sell products such as vitamins, lotions, medical insurance and English-language training products. However, the companies frequently did not deliver products ordered by consumers. Since the companies allegedly did not have many of the products they promised to send to consumers, consumers received other products instead. Then, according to the indictment, after consumers refused delivery of the companies’ shipments, the Argentinian phone room telemarketers called and falsely threatened consumers with arrest, deportation or fines on their gas and electric bills.
According to the criminal and civil complaints, Carrasco and Gioja routinely changed the names of the companies under which they did business to evade consumer complaints, regulators and law enforcement. Allegedly, a variety of state agencies contacted the businesses regarding their illicit practices. Those working with Carrasco and Gioja, in emails cited in the affidavit in support of arrest, referred to these companies tainted by complaints as “burnt.” Rather than changing the “burnt” companies’ practices, Carrasco and Gioja allegedly incorporated new companies and started the same illegal practices again.
The alleged fraud first came to light when the Spanish language network Univision informed the USPIS that they believed a company was involved in a fraud scheme in which it misrepresented its affiliation with the network. Subsequently, the USPIS investigated the case, submitted the affidavit in support of the criminal complaint and arrested the defendants.
“Postal inspectors will continue to investigate cases involving fraud against consumers and will vigorously pursue those individuals who use the mail to further their criminal schemes,” said Ronald Verrochio, U.S. Postal Inspector in Charge in Miami.
Acting Assistant Attorney General Delery commended the Postal Inspection Service for their investigative efforts and thanked the U.S. Attorney’s Office for the Southern District of Florida for their contributions to the civil case. The criminal case is being prosecuted by Assistant Director Richard Goldberg with the Department of Justice’s Consumer Protection Branch.
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.
Two Alleged Members of Yonkers Narcotics Ring Are Charged in White Plains Federal CourtRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, George Venizelos, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), Charles Gardner, the Commissioner of the Yonkers Police Department, and Joseph A. D’Amico, the Superintendent of the New York State Police, announced the arrest of two alleged members of a narcotics trafficking ring centered in and around Hoover Road in Yonkers, New York. Defendants THOMAS J. SUPPA and JOSEPH KOPPE were arrested yesterday and presented in White Plains federal court today before United States Magistrate Judge Paul E. Davison, who ordered that SUPPA be detained and KOPPE be released on bail upon meeting bail conditions.
Manhattan U.S. Attorney Preet Bharara stated: “These arrests underscore the commitment of this Office to eliminating the scourge of drug trafficking and its attendant harms from Yonkers and communities throughout the Southern District of New York. Together with our partners in state and local law enforcement, we will continue to work to improve the safety of our streets and the quality of life for our citizens.”
FBI Assistant Director-in-Charge George Venizelos stated: “As alleged, Suppa and Koppe were members of a narcotics ring that distributed large amounts of cocaine to Yonkers, damaging the fabric of a city. The FBI remains committed to working with our partners in law enforcement to eradicate this epidemic.”
Yonkers Police Commissioner Charles Gardner stated: "Individuals who choose to deal in the narcotics trade in our city will be targeted and vigorously prosecuted. These arrests are another example of our continued success working together with our federal partners to address criminal activity in our neighborhoods. I would like to thank U.S. Attorney Preet Bharara and his office along with the Federal Bureau of Investigation for their support and assistance in this investigation."
New York State Police Superintendent Joseph A. D'Amico stated: "With the arrests of these two drug traffickers, the streets of Yonkers are a safer place. Drugs and the crime and violence they cause will never be tolerated. I thank the U.S. Attorney's Office, Yonkers Police Department and the Federal Bureau of Investigation for their continued partnerships."
According to the allegations in two criminal Complaints unsealed today in White Plains federal court:
From at least January 2012 and up to and including July 17, 2013, SUPPA and KOPPE conspired together and with others to distribute crack and powder cocaine in and around Hoover Road in Yonkers. In furtherance of the conspiracy, SUPPA is alleged to have personally sold crack cocaine to an undercover law enforcement officer on or about May 6, 2013 and July 17, 2013. KOPPE is alleged to have sold crack cocaine and powder cocaine to the same undercover officer on or about June 27, 2013.
SUPPA, 30, has been charged with one count of distributing more than 280 grams of a mixture or substance containing crack cocaine, in violation of 21 U.S.C. §§ 812, 841(a), and 841(b)(1)(A), and one count of conspiracy to commit the same, in violation of 21 U.S.C. § 846. Both offenses, upon conviction, carry a maximum prison sentence of life and a mandatory minimum sentence of 10 years.
KOPPE, 32, has been charged with one count of distributing more than 28 grams of a mixture or substance containing crack cocaine, in violation of 21 U.S.C. §§ 812, 841(a), and 841(b)(1)(B), and one count of conspiracy to do the same, in violation of 21 U.S.C. § 846. Both offenses carry, upon conviction, a maximum prison sentence of 40 years and a mandatory minimum sentence of 5 years.
Mr. Bharara praised the FBI, the Yonkers Police Department, the New York State Police and the Westchester County District Attorney’s Office for their work in this investigation.
The prosecution is being overseen by the Office’s White Plains Unit. Assistant United States Attorneys Daniel Filor and Scott A. Hartman are in charge of the prosecution.
The charges contained in the Complaints are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
KOPPE COMPLAINT
SuppaThomas.ComplaintTopeka Man Indicted on Charge of Sex Trafficking of A ChildRead the Press Release
TOPEKA, KAN. – A Topeka man has been indicted on federal charges of sex trafficking of a child, U.S. Attorney Barry Grissom said today.
Dominique Emanuel Tyson, 23, Topeka, Kan., is charged with one count of sex trafficking of a child and one count of producing child pornography. The indictment alleges Tyson enticed a minor child to engage in a commercial sex act. It also alleges he enticed the child to engage in a sexual act for the purpose of producing child pornography. The crimes are alleged to have occurred June 9 and June 11, 2013, in Shawnee County, Kan.
If convicted, he faces a penalty of not less than 10 years and not more than life on the charge of the sex trafficking of a child, and a penalty of not less than 15 years and not more than life and a fine up to $250,000 on the charge of producing child pornography.
The Topeka Police Department and the FBI investigated. Assistant U.S. Attorney Christine Kenney is prosecuting.
OTHER INDICTMENTS
Arrick Warren, 28, Kansas City, Mo., is charged with one count of conspiracy to possess with intent to distribute crack cocaine, two counts of distributing crack cocaine within 1,000 feet of Bethany Park in Kansas City, Kan., one count of possession with intent to distribute crack cocaine within 1,000 feet of Bethany Park in Kansas City, Kan., one count of maintaining a residence in furtherance of drug trafficking at 1026 Reynolds Ave., which is within 1,000 feet of Bethany Park in Kansas City, Kan., one count of carrying a firearm in furtherance of drug trafficking, one count of unlawful possession of a firearm after a felony conviction, and two counts of using a telephone in furtherance of drug trafficking. The crimes are alleged to have occurred at various times in 2012 and 2013 in Kansas City, Kan.Upon conviction the crimes carry the following penalties: Conspiracy to distribute crack cocaine: Not less than five years and not more than 40 years in federal prison and a fine up to $5 million.
Distributing crack cocaine within 1,000 feet of a playground: A maximum penalty of 40 years and a fine up to $2 million on each count.
Possession with intent to distribute crack cocaine within 1,000 feet of a playground: Not less than five years and not more than 80 years and a fine up to $10 million.
Maintaining a residence in furtherance of drug trafficking: A maximum penalty of 20 years and a fine up to $500,000.
Unlawful possession of a firearm in furtherance of drug trafficking: Not less than five years and not more than life and a fine up to $250,000.
Unlawful possession of a firearm after a felony conviction: A maximum penalty of 10 years and a fine up to $250,000.
Using a telephone in furtherance of drug trafficking: A maximum penalty of four years and a fine up to $30,000 on each count.The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated. Special Assistant U.S. Attorney Erin Tomasic is prosecuting.
John Moffat, 52, who is being held in the Russell County Jail, and Carter Moffat, 26, who is being held in the Russell County Jail, are charged with one count of possession with intent to distribute methamphetamine. The crimes are alleged to have occurred June 26, 2013, in Russell County, Kan.If convicted, they face a penalty of not less than 10 years and not more than life and a fine up to $10 million. The Drug Enforcement Administration investigated. Assistant U.S. Attorney Duston Slinkard is prosecuting.
Kalun James Purucker, 22, who is being held in the Saline County Jail, is charged with one count of unlawful possession of a firearm after a felony conviction. The crime is alleged to have occurred April 9, 2013, in Saline County, Kan.
If convicted, he faces a maximum penalty of 10 years in federal prison and a fine up to $250,000. The Bureau of Alcohol, Tobacco, Firearms and Explosives Investigated. Assistant U.S. Attorney Duston Slinkard is prosecuting.
Joshua M. Y. Valdivia, 25, who is currently in federal custody, is charged with one count of unlawful possession of a firearm after a felony conviction. The crime is alleged to have occurred June 13, 2013, in Shawnee County, Kan.
If convicted, he faces a maximum penalty of 10 years in federal prison and a fine up to $250,000. The Bureau of Alcohol, Tobacco, Firearms and Explosives Investigated. Assistant U.S. Attorney Duston Slinkard is prosecuting.
Troy A. Kurti, 20, who is in custody in the Shawnee County Jail, is charged with is charged with one count of unlawful possession of a firearm after a felony conviction. The crime is alleged to have occurred July 15, 2013, in Shawnee County, Kan.
If convicted, he faces a maximum penalty of 10 years in federal prison and a fine up to $250,000. The Bureau of Alcohol, Tobacco, Firearms and Explosives Investigated. Assistant U.S. Attorney Duston Slinkard is prosecuting.
In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.
Tonawanda Man Indicted for Selling Deadly Heroin Cocktail that Resulted in the Death of a Local ManRead the Press Release
BUFFALO, N.Y.--U.S. Attorney William J. Hochul, Jr. announced today that a grand jury has handed down a 10 count indictment charging Peter N. Militello, 32, of Tonawanda, N.Y., with possession with intent to distribute and distribution of heroin and crack cocaine. The charges carry a mandatory minimum penalty of 20 years in prison, a maximum of life, a fine of $1,000,000 or both.
Assistant U.S. Attorney Eric M. Opanga, who is handling the case, stated that according to the indictment, between January 25 2010 and June 6, 2013, the defendant sold heroin and crack cocaine on several occasions in the City of Buffalo. On May 23, 2013, Militello sold a heroin and fentanyl mixture to an individual residing in Buffalo. Several hours later, the man was found dead in his residence by a family member. An autopsy performed on the man found that he died as a result of acute intoxication from the heroin and fentanyl mixture.
"This is the first prosecution involving this deadly mixture of heroin and fentanyl," said U.S. Attorney Hochul. "Our Office in collaboration with our law enforcement partners at every level, have joined together to warn the public of the deadly consequences of this emerging threat. The community needs to know the dangers of this mixture which can result in death in mere minutes after it enters the body. Let this case serve as a warning to anybody who engages in the trafficking of any illegal narcotics that we will vigorously track you down and bring you to justice."The indictment is the result of an investigation on the part of the Drug Enforcement Administration, under the direction of Brian R. Crowell, Special Agent in Charge, New York Field Division, and the Cheektowaga Police Department, under the direction of Chief David Zack.
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.Three New Jersey Men Sentenced to Prison or Probation for Stealing $1.4 Million from New York-Based Defense ContractorRead the Press Release
Employees’ Pensions & Life Insurance Policies Looted
TRENTON, N.J. – A former insurance agent for a New York-based defense contractor and his two friends were sentenced today to prison terms or probation for stealing $1.4 million from the company, U.S. Attorney Paul J. Fishman announced.
Daniel Tumminia, 51, of Millstone, N.J., and Michael Feuer, 49, of Freehold, N.J., were each sentenced to one year in prison; Dennis Mannarino, 46, of Manalapan, N.J., was sentenced to three years of probation.
All three defendants previously pleaded guilty before U.S. District Judge Joel A. Pisano to separate informations charging them with conspiracy to commit wire fraud. Judge Pisano imposed the sentences today in Trenton federal court.
According to documents filed in this case and statements made in court: Fastener Dimensions (Fastener) was a New York-based manufacturer and distributor of aircraft, aerospace, and military components and hardware. Tumminia was an insurance agent for Massachusetts Mutual Life Insurance Co. (MassMutual) who represented Fastener and its president as an agent for MassMutual, handling all pension and profit sharing accounts and life insurance policies for Fastener’s employees.From July 2004 through August 2010, Tumminia and his two friends – Feuer, a practicing attorney from 1990 through 2001 and the owner of Cypress Lawn Care, a landscaping company in New Jersey; and Mannarino, the owner of J&D Italian Specialty Meats, delicatessens located in New Jersey and New York – enriched themselves by diverting life insurance premium payments and pension and profit sharing checks belonging to Fastener’s employees into bank accounts that they controlled. In April 2008, Feuer incorporated and listed himself as the registered agent and officer of MassMutual Contracting Corp., a limited liability company that never performed any services for Fastener or any other clients, but was created by Feuer and Tumminia solely to falsely represent to Fastener that it was the real MassMutual. Feuer and Tumminia deposited $574,279 from Fastener into the MassMutual Contracting Corp. bank account.
Tumminia, Feuer and Mannarino conducted 133 transactions, including interstate wire transfers, totaling $1,437,542, in deposits into bank accounts that they controlled. They then used the diverted funds for personal expenditures, including rent, cable, and utility and grocery bills.
As part of their guilty pleas, Tumminia, Feuer, and Mannarino have agreed to make full restitution for all losses resulting from their crimes to the employees of Fastener Dimensions. Tumminia has agreed to forfeit $1,198,278 to the United States. Feuer has agreed to forfeit $115,963 and Mannarino has agreed to forfeit $10,000.
In addition to the prison terms, Judge Pisano sentenced Tumminia and Feuer sentenced to two years of supervised release.U.S. Attorney Fishman credited special agents of the FBI working out of the Red Bank resident agency, under the direction of Special Agent in Charge Aaron T. Ford, with the investigation leading to today’s sentences.
The government is represented by Assistant U.S. Attorney Aaron Mendelsohn of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.stopfraud.gov.
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Defense counsel: Tumminia: Jeffrey Tomei Esq., New York, and Denise Kalland Esq., West Palm Beach, Fla.
Feuer: Louis Klieger Esq., New York
Mannarino: Arthur Aidala Esq., New YorkSpringfield Woman Pleads Guilty to $1.3 Million Mail Fraud Related to Distributing K2Read the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Springfield, Mo., woman pleaded guilty in federal court today to her role in a $1.3 million mail fraud conspiracy related to distributing at least 188 kilograms of synthetic marijuana, commonly referred to as K2.
Victoria A. Butchee, also known as Victoria A. Wohlin, 28, of Springfield, waived her right to a grand jury and pleaded guilty before U.S. Magistrate Judge David P. Rush to a federal information. As a result, the federal criminal complaint filed against Butchee on June 25, 2013, will be dismissed.
Butchee admitted that she participated in a conspiracy between March 1, 2011, and June 24, 2013, to defraud the Food and Drug Administration and to defraud the public by falsely representing that a number of synthetic cannabinoid products were “incense” or “potpourri” and “not for human consumption.” In reality, Butchee admitted, these substances contained compounds that were intended for human consumption as a drug.
Butchee manufactured and distributed synthetic cannabinoids. Based upon the invoices, ledgers, and product seizures by law enforcement, this conspiracy was responsible for the manufacture and/or distribution of at least 188.14038 kilograms of synthetic cannabinoid products.
Under the terms of the plea agreement, Butchee must forfeit to the government $1,354,034, which represents the total amount of money involved in the conspiracy, $31,580 that was seized by law enforcement officers, and four rifles and a shotgun that were seized by law enforcement officers.
Today’s plea agreement cites a number of transactions in which materials used to manufacture and distribute synthetic cannabinoids were shipped via UPS or FedEx to members of the conspiracy – including controlled substance analogues (synthetic chemical compounds similar to THC, the psychoactive ingredient in marijuana), green leafy substances which served as carrier media, labels that were affixed to packages of “Donkey Punch,” “Jolly Grape Giant,” “South of the Tracks,” “Baby Face,” “Scarface,” “Hillbilly Hay,” and other synthetic cannabinoid products, and foil and plastic packaging bags.
Under federal statutes, Butchee is subject to a sentence of up to 20 years in federal prison without parole, plus a fine up to $250,000. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Supervisory Assistant U.S. Attorney Michael S. Oliver. It was investigated by the Springfield, Mo., Police Department, the Missouri State Highway Patrol, IRS-Criminal Investigation and the U.S. Postal Inspection Service.Spine Surgeon Arrested on Charges He Performed Unnecessary Surgeries and Billed Health Insurance ProgramsRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
CINCINNATI – Federal and state health care fraud investigators arrested Abubakar Atiq Durrani, 44, Mason, Ohio today based on a federal complaint alleging that he convinced patients to undergo medically unnecessary spinal surgeries then billed private and public healthcare benefit programs millions of dollars for the fraudulent services.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, Ohio Attorney General Mike DeWine, Lamont Pugh III, Special Agent in Charge, U.S. Department of Health and Human Services Office of Inspector General, Kevin R. Cornelius, Special Agent in Charge, Federal Bureau of Investigation Cincinnati Field Office (FBI), Robert Corso, Special Agent in Charge, Drug Enforcement Administration (DEA) and Bret Flinn, Resident Agent in Charge, Defense Criminal Investigation Service (DCIS) announced the arrest.
Durrani owns a private practice called the Center for Advanced Spine Technologies (CAST) with offices in Evendale and Florence, Kentucky.
The complaint charges Durrani with one count of health care fraud and one count of making false statements in health care matters. Health care fraud is punishable by up to 20 years in prison. The crime of making false statements in health care matters is punishable by up to five years in prison.
Durrani will appear before U.S. Magistrate Judge Stephanie Bowman in Cincinnati at 1:30 today.
Stewart commended the cooperative investigation by agents and officers of the agencies named above, along with the Ohio Medical Board and Kentucky Medical Board, and Assistant U.S. Attorneys Timothy Mangan and Emily Glatfelter, who are representing the United States in the case.
Anyone suspecting health care fraud, waste or abuse can report it by calling the U.S. Department of Health and Human Services, Office of Inspector General at 800-447-8477. To learn more about health care fraud prevention and enforcement go to www.stopmedicarefraud.gov. Ohioans can report suspected instances of health care fraud to Attorney General DeWine’s office by calling 1-800-282-0515.
A criminal complaint 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.
Somalian Sentenced to Federal Prison for Making False Statements During A Terrorism InvestigationRead the Press Release
In San Antonio this morning, 29-year-old Abdullahi Omar Fidse, a citizen of Somalia, was sentenced to eight years in federal prison after admitting to making false statements under penalty of perjury during a terrorism investigation announced United States Attorney Robert Pitman, Federal Bureau of Investigation Special Agent In Charge Armando Fernandez, San Antonio Division and Acting Special Agent in Charge Vincent Iglio, Homeland Security Investigations (HSI) in San Antonio.
“This prosecution demonstrates the vigilance of the federal government in detecting and disabling individuals who seek to enter the country illegally with the purpose of doing harm. We will continue to be aggressive in protecting our borders and seeking severe punishment for those who violate our laws,” stated U.S. Attorney Robert Pitman.
According to court records, on June 24, 2008, Fidse and 25-year-old Deka Abdalla Sheikh, who was serving as Fidse’s English interpreter, arrived at the Hidalgo, TX, Port of Entry without any identification and claimed asylum based upon Fidse’s father being murdered by “al-Qaida” in the father’s store in Mogadishu, Somalia, while in the presence of Fidse. Fidse was placed in an Immigration Detention Facility located in Pearsall, Texas, while his asylum claim was investigated.
Recorded conversations between Fidse and Sheikh during Fidse’s detention revealed that prior to arriving in Hidalgo, the defendants admittedly planned to provide false testimony to authorities about how they first met, that they were married and that they had lived together for three years. Furthermore, they discussed hand signals to be used to communicate during hearings in an effort to ensure that their individual testimony would match.
Fidse’s stories changed over the course of his detention, including who was responsible for his father’s death. Fidse initially told Customs and Border Protection officers that al-Qaida killed his father while they lived in Somalia. He subsequently told an Immigration Court judge that the Islamic Courts were responsible for his father’s death. In truth, his father had died of natural causes years before and Fidse actually had lived in Kenya since he was in grade school. Because of Fidse’s credibility and his inability to get his story straight on who killed his father, on March 31, 2009, the Immigration Court denied Fidse’s asylum request. He remained in the detention facility since he is a Somali national and travel documents could not be obtained from that country.
The previously mentioned recordings also revealed discussions Fidse had with an undercover source in which Fidse professed his support for violent, radical Jihad; the killing of non-Muslims; and, his adoration for Osama Bin Laden. While still in custody, Fidse also made recorded comments that he purchased an armed vehicle and weapons to be used by terrorists. Fidse told an undercover source how he bought a vehicle and armed it for an al-Shabaab squad and that the vehicle was ultimately destroyed while fighting the Ethiopian defense forces supporting the Somalia Transitional Government. Fidse also told the undercover source that, “We are terrorists.”
Fidse initially denied making the recorded statements when interviewed by federal investigators and furthermore, refused to provide them with more specifics about the armed vehicle. However, on December 5, 2012, Fidse pleaded guilty to one count of conspiracy to obstruct an immigration proceeding and one count of conspiracy to make a false statement during a terrorism investigation. Today, Fidse received four years imprisonment for each count to run consecutively. On September 20, 2012, Sheikh pleaded guilty to one count of conspiracy to make a false statement in a terrorism investigation. By pleading guilty, Sheikh admitted that she and Fidse conspired to provide false information to authorities to gain entrance into the United States as well as provide false information to authorities concerning support for terrorist organizations. Yesterday, Judge Biery sentenced her to five years probation.
“This case demonstrates the Joint Terrorism Task Force's commitment to protecting the U.S. from individuals who seek to do us harm by gaining entry to the U.S. through deception, manipulation and violation of the law,” stated FBI Special Agent in Charge Armando Fernandez.
“Homeland Security Investigations’ (HSI) unique law enforcement authorities provide the tools essential to investigating a wide variety of criminal violations and immigration offenses. These authorities proved to be a critical advantage in building a case against Abdullahi Omar Fidse,” said HSI Acting Special Agent in Charge Vincent Iglio. “HSI will continue to use it’s vast investigative enforcement authorities to help prosecute those who threaten our national security or provide support to those who intend to do harm against our citizens.”
This case was investigated by agents with the Joint Terrorism Task Force, Federal Bureau of Investigation (FBI), Homeland Security Investigations (HSI), U.S. Border Patrol, and the Department of Homeland Security Citizenship and Immigration Services (CIS) and Detention and Removal Operations (DRO). Assistant United States Attorney Mark Roomberg prosecuted this case on behalf of the government.
Slidell Man, Christopher Buelle, Pleads Guilty to Conspiracy to Commit Import Violations and for Violating Fda Laws by Mislabelling and Distributing Bath Salts and Synthetic Marijuana and Attempting to Violate the Controlled Substances ActRead the Press Release
CHRISTOPHER BUELLE, age 25, a resident of Slidell, pled guilty in federal court today before U. S. District Judge Mary Ann Vial Lemmon to a two-count superseding bill of information charging him with conspiring to commit import violations and to violate the Food, Drug and Cosmetic Act by mislabeling and distributing bath salts and synthetic marijuana and attempting to possess with intent to distribute marijuana, announced
U. S. Attorney Dana J. Boente.According to court documents, beginning in the first half of 2010 and continuing through about December 2011, BUELLE conspired with co-defendants, Cody Beaudette, Christopher Buelle, and C Square, L.L.C., a Slidell-based company, which BUELLE co-owned with Beaudette, to knowingly receive, buy, and sell bath salts and synthetic marijuana imported into the United States from China contrary to law, specifically causing the introduction and delivery of drugs that are adulterated and misbranded under Federal law. C Square, L.L.C.’s brands included “ZeRo GrAviTy”, “iAroma”, and “Primo,” among others. BUELLE also admitted to attempting to possess with intent to distribute 495 grams of marijuana in Slidell.
For each count, BUELLE faces a maximum statutory penalty of five (5) years imprisonment, followed by a term of supervised release of up to three (3) years, and a $250,000.00 fine. Sentencing has been scheduled for October 31, 2013 at 2:00 P.M.
The case was investigated by U. S. Immigration and Customs Enforcement (ICE) - Homeland Security Investigations and the U. S. Food and Drug Administration (FDA) - Office of Criminal Investigations with the assistance of the St. Tammany Parish Sheriff’s Office and the Slidell Police Department. The case was prosecuted by Special Assistant U. S. Attorney Robert Weir.
(Download Factual Basis )
Shrewsbury Man Sentenced for Sex TourismRead the Press Release
BOSTON – A Shrewsbury man was sentenced today in U.S. District Court in Worcester for traveling to the Dominican Republic to engage in sexual conduct with a minor.
Conrad Gallant was sentenced to 100 months in prison, followed by 10 years of supervised release, including requiring no unsupervised contact with minors. Upon release, Gallant will be required to register as a sex offender for any place he works, resides or is a student. In April 2013, Gallant pleaded guilty to engaging in illicit sexual conduct in foreign places and travel with intent to engage in illicit sexual conduct.
In February 2011, Gallant traveled to the Dominican Republic and had sexual relations in his apartment with a 14-year-old girl he knew was underage. Gallant returned to the Dominican Republic four times over the course of a year to engage in sexual relations with the underage victim, giving her money, a laptop computer, and jewelry. Additionally, on these trips, Gallant took photographs of her while she was nude and engaging in sexual acts, and brought those images back to the United States.
In February 2012, the National Tourist Police of the Dominican Republic learned that Gallant had engaged in sexual relations with the then 15-year-old victim. The victim was forensically interviewed by a medical professional and she confirmed that Gallant engaged in sex with her. She provided agents with a cell phone containing images of Gallant naked, including an image of Gallant and the victim engaged in sexual activity. The victim disclosed that Gallant had promised her certain items and money to take her mother to the doctor, which he never gave her. Additionally, the victim stated that Gallant forced her to have sex with him a couple times when she was unwilling. The victim also informed investigators that Gallant asked her to bring him other minor girls to have sex with and that this happened on two occasions. Gallant paid both of these minors $100.
In March 2012, during a federal search warrant executed at Gallant’s Shrewsbury address, agents recovered images of him and the victim engaged in sexually explicit conduct. There was also a close-up of the victim’s genitalia displayed in a sexually explicit manner. During a second federal search warrant, executed at Gallant’s apartment in the Dominican Republic, agents seized a laptop containing numerous images of child pornography, including images of Gallant engaging in sexual conduct with the victim.
United States Attorney Carmen M. Ortiz; Bruce Foucart, Special Agent in Charge of U.S. Immigration and Customs Enforcement's Homeland Security Investigations in Boston; Worcester County District Attorney Joseph Early; Colonel Timothy Alben, Superintendent of the Massachusetts State Police; and Chief James Hester, Jr. of the Shrewsbury Police Department, made the announcement today. The case is being prosecuted by Assistant U.S. Attorneys Michael I. Yoon, Stacy Dawson Belf, and Eve Piemonte Stacey of Ortiz's Major Crimes Unit.The U.S. Attorney’s Office would like to extend its appreciation to HSI’s attaché in Santo Domingo, the Dominican Tourist Police (Politur), Dominican prosecutors in Higuey and Santo Domingo, Dominican Migration and HSI's Santo Domingo Transnational Criminal Investigative Unit members for their assistance and cooperation.
This case was brought as part of Project Safe Childhood, a nationwide initiative designed by the Department of Justice in 2006, to protect children from exploitation and abuse. Led by the U.S. Attorneys' Offices, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov/.
Sherman-Dixie Concrete Industries, Inc. to Pay $664,000To Settle False Claims Act AllegationsRead the Press Release
Sherman-Dixie Concrete Industries, Inc. has agreed to pay the United States $664,581.23 to settle False Claims Act allegations, announced David Rivera, Acting United States Attorney for the Middle District of Tennessee.
The settlement resolves allegations that Sherman-Dixie submitted false claims for payment to the United States for products that did not meet required specifications. These products included concrete end walls and catch basins that are typically used in and adjacent to roadway construction.
The United States alleged that Sherman-Dixie submitted these claims after repeatedly certifying that its products were in reasonable compliance and were produced pursuant to applicable procedures. The investigation found however, that many of the products did not meet specifications as they related to the strength and placement of rebar within the pre-cast products. Although Sherman-Dixie provided these products for projects primarily administered by the Tennessee Department of Transportation, a substantial portion of the funding for these projects was provided by the United States through the Federal Highway Administration, an agency within the U.S. Department of Transportation (“DOT”).
“Enforcement of the False Claims Act remains a top priority of the Department of Justice and this office,” said Acting U.S. Attorney David Rivera. “This enforcement effort extends to all attempts to procure funds from the United States and its agencies by false pretenses. The U.S. Attorney’s Office for the Middle District of Tennessee will continue to devote the resources necessary to vigorously protect taxpayers’ interests and aggressively pursue fraud, waste, and abuse.”
“The settlement announced today sends a strong message to those that would seek to substitute inferior products in transportation-related projects,” said DOT- OIG Regional Special Agent- in- Charge Marlies Gonzalez. “We will leave no stone unturned to ensure the safety of the nation’s transportation system. DOT- OIG remains committed to working with our law enforcement and prosecutorial colleagues, and other federal and state partners to prevent and detect waste, fraud, and abuse.”
The federal investigation corroborated conduct originally discovered by the Tennessee Department of Transportation. An efficient and thorough investigation allowed a resolution to be achieved without filing a complaint, conserving judicial resources and government funds. In addition to the monetary payment, Sherman-Dixie has entered into a monitoring agreement with the U.S. Department of Transportation, Federal Highway Administration. This monitoring agreement will require Sherman-Dixie to take certain compliance measures to reduce the likelihood of future violations of the False Claims Act and other procurement regulations.
This matter was investigated by the U.S. Department of Transportation, the FBI and the United States Attorney’s Office for the Middle District of Tennessee. The United States was represented by Assistant U.S. Attorney Christopher C. Sabis.Seven Individuals Charged with Stolen Identity Refund FraudRead the Press Release
Jackson, Miss – Gregory K. Davis, U.S. Attorney for the Southern District of Mississippi, Gabriel Grchan, Special Agent in Charge of IRS Criminal Investigation, Allen Bryant, Resident Agent in Charge, U.S. Secret Service, and Keith Morris, Inspector in Charge, U. S. Postal Inspection Service, announced recent indictments against seven individuals for stolen identity refund fraud.
Stolen identity refund fraud occurs when a person, without permission, uses a legitimate taxpayer’s identity to fraudulently file a tax return and claim a refund. This tax fraud tops the Internal Revenue Service’s list Dirty Dozen Tax Scams for 2013.*
Alicia Haslett, 30, of Jackson, Rickey McDuffey, 36, of Jackson, and Johnny Coleman, 54, of Jackson, are charged in a seven-count indictment with conspiracy, theft of government funds, and aggravated identity theft. The indictment alleges over $270,000 was stolen from the government as a result of this conspiracy.
Christopher Johnson, 31, of Hattiesburg, is charged in a twelve-count indictment with conspiracy, theft of government funds, and aggravated identity theft.
Eric Sutton is charged in a fifteen-count indictment with conspiracy, theft of government funds, and aggravated identity theft.
Erica Porter, 30, of Jackson, and Obadiah Herring, 36, of Terry, are charged in a sixteen-count indictment with conspiracy, theft of government funds, and aggravated identity theft.
Over the past seven months, 16 defendants have been indicted on charges related to stolen identity refund fraud. Multiple co-conspirators have been identified and charged related to the theft and use of identifying information from a local prison and also from a hospital facility. The stolen identities were used in the preparation and filing of fraudulent income tax returns.
Marietta Harris is a return preparer allegedly related to many of these schemes. Harris has been charged with Identity Theft, Conspiracy, and Theft of Public Funds. Co-Conspirators, Ladonna Cooper, Tony Jones, Nikki Thomas, Shekeila Jones, and S’ade Tyler have all entered guilty pleas to related charges. Co-conspirator Ciara Gooden has entered a guilty pea related to charges of Identity Theft and Theft of Public Funds.
Marietta Harris is also charged in an identity theft scheme along with Pamlia Johnson and Diandra Thomas. Harris, Johnson and Thomas have all entered not guilty pleas and are awaiting trial.
“Identity theft is a serious crime which exploits some of the most vulnerable members of our community. When combined with tax refund fraud, it threatens the financial security of our citizens,” said Gregory Davis, U.S. Attorney for the Southern District of Mississippi. “This office will continue to work with the Internal Revenue Service, United States Secret Service, and
U.S. Postal Inspection Service to prosecute those who cause harm to the U.S. taxpayers and those persons whose identities are is stolen.”
“In recent months, 16 defendants have been indicted on charges related to identity theft in the Southern District of Mississippi,” stated Gabriel Grchan, IRS Special Agent in Charge of the
New Orleans Field Office. “These indictments are just the beginning of our pursuit of those who defraud the American taxpayer.”
“U.S. Postal Inspectors are responsible for protecting the sanctity of the nation's mail system. We remain resolute in our investigative efforts to bring those to justice who are responsible for fraudulently utilizing the U.S. Mail system in the furtherance of their schemes.
Make no mistake, those who choose this path will not get away with it,” said Keith Morris, Inspector in Charge, Atlanta Division.
These cases are investigated by the Jackson ID Theft Task Force which includes IRS
Criminal Investigation, U.S. Secret Service and U.S. Postal Inspection Service. They are handled by the Economic Crimes Unit of the United States Attorney’s Office. Assistant U.S. Attorneys
Scott Gilbert and Pat Lemon are in charge of the prosecutions.
If you believe that you or someone you know may have had a tax return filed under your name as the result of identity theft, please visit www.IRS.gov, call 1-800-829-1040 or visit your local IRS office for further information.
The public is reminded that the charges contained in an indictment are merely accusations and the defendants are presumed innocent unless and until proven guilty.
*For an IRS press release on Dirty Dozen Tax Scams go to: http://www.irs.gov/uac/Newsroom/IRSReleases- the-Dirty-Dozen-Tax-Scams-for-2013
###If you believe you have been a victim of fraud from a person or an organization soliciting relief funds on behalf of storm victims, contact the National Center for Disaster Fraud toll free at:
(866) 720-5721
You can also fax information to:
(225) 334-4707
or e-mail it to:
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Sarasota County Heroin Dealer Sentenced to 20 Years in Federal PrisonRead the Press Release
Tampa, Florida - U.S. District Judge Richard A. Lazzara today sentenced Arlin Troncoso-Pena (33, Sarasota) to 20 years in federal prison for conspiracy to possess with intent to distribute, and to distribute, 100 grams or more of heroin. The court also ordered Troncoso-Pena to forfeit $3,005, proceeds of the offense. Troncoso-Pena pleaded guilty on March 29, 2013.
According to his plea agreement, in October 2010, Troncoso-Pena arranged for two females to travel from Boston to Florida with heroin. After Troncoso-Pena picked up the two females at the train station in Osceola County, his vehicle was stopped by law enforcement. One of the women in Troncoso-Pena's vehicle possessed heroin weighing approximately 150 grams.
In 2012, law enforcement authorities in Sarasota County learned that Troncoso-Pena was selling heroin as part of a conspiracy. In May 2012, law enforcement purchased a total of approximately 40 grams of heroin, after arranging the sales through Troncoso-Pena. In June 2012, during the execution of search warrant at a residence used by members of the conspiracy, approximately 35 grams of heroin and more than $5,000 were recovered. On that same date, Troncoso-Pena was arrested and found to be in possession of $3,005.
This case was investigated by U.S. Immigration and Customs Enforcement's Homeland Security Investigations, the Sarasota County Sheriff's Office, the Sarasota Police Department, the Osceola County Investigative Bureau, and U.S. Immigration and Customs Enforcement's (ICE) Enforcement and Removal Operations (ERO). It was prosecuted by Assistant United States Attorney Joseph W. Swanson.
San Jose Man Charged with Selling Millions of Dollars of Stolen and Counterfeit Cisco MerchandiseRead the Press Release
SAN JOSE, Calif. – Cuong Cao Dang, a/k/a Calvin Dang, was arrested this morning after a federal grand jury indictment charging him with conspiracy to commit mail fraud, six substantive counts of mail fraud, and money laundering, United States Attorney Melinda Haag and IRS-CI Special Agent in Charge José M. Martinez, announced.
According to an indictment filed yesterday and unsealed this afternoon, Dang owned and operated San Jose-based Network Genesis, Inc., a company that bought and resold used Cisco equipment. Dang also owned The Dang’s Investment, Inc. (TDI), a business dedicated to managing residential and commercial real estate. According to the indictment, from January 2006 through January 2013, Dang bought counterfeit or stolen Cisco merchandise from Cisco employees and resold that merchandise to Network Genesis customers, after altering the external serial numbers to make the items more difficult to trace. To further cover his tracks, Dang had his customers send payment to proxies, who deposited the money into their own bank accounts before funneling it back to Dang. The indictment alleges that Network Genesis had over $37 million in sales revenue from 2006 through the end of 2012.
Dang is also charged with forfeiture allegations. Upon conviction of any of the offenses in the indictment, Dang faces potential forfeiture of all property from the illegal conduct, including:
- 11 commercial and residential real properties, all located in San Jose;
- Five luxury automobiles;
- All funds in bank accounts held at Wells Fargo Bank and JP Morgan Chase;
- All funds in four ScholarShare College Savings Plan accounts Dang set up for each of his four children; and
- Cisco Equipment that was seized during the execution of search warrants at Network Genesis on January 23, 2013.
Dang was arrested early this morning at his home in San Jose, and made his initial appearance in federal court in San Jose, before The Honorable Howard R. Lloyd, United States Magistrate Judge. He is currently detained pending further bail proceedings. The defendant's next scheduled appearance is at 1:30 pm tomorrow for I.D. of counsel Judge Lloyd.
The maximum penalty for each count of conspiracy to commit mail fraud, in violation of Title 18, United States Code, Section 1349, is 20 years imprisonment, a fine of $250,000, or twice the gross gain or gross loss from the offense, and restitution to the victim. The maximum penalty for mail fraud, in violation 18 U.S.C § 1341, is 20 years imprisonment, a fine of $250,000 (or twice the gross gain/loss), and restitution. The maximum penalty for each count of engaging in monetary transactions using criminally derived property, in violation of 18 U.S.C § 1957, is 10 years in prison, and a fine of $250,000, or twice the amount of the criminally-derived property involved in the transaction. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Please note, an indictment contains only allegations against an individual and, as with all defendants, Dang must be presumed innocent unless and until proven guilty beyond a reasonable doubt.
Assistant United States Attorney David Callaway is prosecuting the case, with the assistance Elise Etter. The prosecution is the result of an investigation by the Internal Revenue Service, Criminal Investigation.
(Calvin Dang indictment)
Salisbury, N.C. Man Sentenced to Prison for Operating A $2 Million Ponzi Scheme and for Failing to Appear in CourtRead the Press Release
Defendant Did Not Show Up For His January 2013 Sentencing Hearing
CHARLOTTE, N.C. –U.S. District Judge Robert J. Conrad, Jr. sentenced a Salisbury man to 121 months in prison for operating a Ponzi scheme that defrauded his victims of more than $2 million and for failing to appear in court for his previously scheduled sentencing hearing on that case, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina.
John Knox Bridges, 52, of Salisbury, was also ordered to serve three years under court supervision following his prison term, and to pay $1,534,536.70 as restitution to his victims.
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, and Jeannine A. Hammett, Special Agent in Charge of the Internal Revenue Service - Criminal Investigation Division (IRS-CI).
According to filed court documents and court proceedings, from 2004 to 2010 Bridges engaged in a series of schemes to defraud individual investors and charitable organizations by soliciting his victims to invest in a fictitious company, “Logan Investments.” Court documents show that Bridges made false representations to his investors, including that their money would be invested in a private oil company in Texas and that the company was building a pipeline to transport liquid petroleum across the U.S. Court records indicate that Bridges further misrepresented to his victims that their money would be deposited into the oil company’s account and be used for construction expenses. To further the fraudulent scheme, Bridges told the victim investors that he would provide them with quarterly dividends while the pipeline was being constructed. In reality, none of the representations Bridges made to the victims were true. Information contained in court documents indicates that Bridges deposited the money in his own personal bank account, and used the money to fund personal trips abroad and to pay for his personal living expenses.
According to filed documents and statements made in court, Bridges made payments to some existing investors using funds contributed by new investors, typical of a “Ponzi” scheme. To cover his fraud and to induce individuals to further invest in his fictitious company, Bridges regularly sent investors bogus profit and loss statements from Logan Investments, which falsely showed positive returns. In reality, Bridges generated those fictitious statements from his home computer and were entirely false.
Court records show that in 2008 Bridges solicited a charitable organization known as “L.F.” to invest $350,000 in a fictitious company, which Bridges falsely represented as an oil and gas company identified as Ligon-Johnson. Among the misrepresentations made to “L.F.” was that the investment guaranteed returns of approximately 9.75 percent. Instead of investing the money, Bridges used the funds to settle a civil lawsuit filed against him personally, court records show. According to court documents, in early 2009 Bridges received an additional $250,000 from the same charitable organization to invest in a start-up company. Bridges falsely represented that the start-up would “turn a profit of 30% in 6 months,” records indicate. Instead of investing the money in the start-up company, Bridges fraudulently placed the investment funds in his name.
According to filed documents, in the summer of 2009 “L.F.” became suspicious of Bridges’ actions. In an attempt to conceal and prolong the scheme, Bridges wired $600,000 to “L.F.” from a second charitable organization known as “T.M.,” according to court documents. Also, in an effort to further induce additional investment funds, Bridges lied to current and additional investors by fraudulently telling them that his computer had been hacked and $600,000 was emptied out of his personal bank account.
In total, court records show, Bridges obtained approximately $2 million from the victims of the Ponzi scheme. In February 2012, Bridges pleaded guilty to one count of securities fraud and one count of money laundering.
“Today, a greedy con artist got the punishment he deserved,” said U.S. Attorney Tompkins. “This was not a case of a good investment gone bad. Bridges stole money from his investors and used it for trips and personal expenses, while he continued to tell lie after lie to cover his fraud. Potential investors should do their homework before they invest their hard earned money and question promises of large investment returns. Don’t let a con man with a good sales pitch rob you of your precious nest egg,” Tompkins added.
“The FBI is committed to vigorously pursuing scammers who commit financial crimes and rob unsuspecting investors of their savings. This case sends a clear message that criminals who run these illicit investment schemes will face severe penalties for their fraud,” said FBI Charlotte Special Agent in Charge, John A. Strong.
IRS-CI Special Agent in Charge Jeannine Hammett stated, “Promoters of Ponzi schemes prey upon trusting investors and then steal their hard earned money. John Knox Bridges did that in order to finance his lifestyle. Investors should be wary that programs promising unbelievable returns on investment should be looked at carefully.Judge Conrad also sentenced Bridges today to 18 months in prison on criminal contempt charges for failing to appear at his first sentencing hearing, to be served concurrently. According to court records, despite knowing the date and time he was due to appear in federal court, Bridges did not show up for the sentencing, causing the court to issue a bench warrant for his arrest. According to court documents, the following day Bridges’ vehicle was located in Salisbury at the parking lot of a church. Court records also indicate that when law enforcement arrived at the church, Bridges armed with a shotgun had barricaded himself in the church’s women’s bathroom. Law enforcement convinced Bridges to surrender and the defendant was subsequently arrested. Bridges pleaded guilty on July 23, 2013 to criminal contempt charges in connection with that incident.
In announcing today’s sentence Judge Conrad described the defendant as having “a history of ongoing predatory behavior,” noting that Bridges’ “primary motivation was to fund a lavish lifestyle.”
In addition to providing for restitution to victims, federal law also provides for forfeiture of proceeds of crime. Accordingly, Judge Conrad sentenced Bridges to forfeit certain properties, including numerous pieces of art. The U.S. Attorney’s Office will request that the proceeds from the liquidation of any finally forfeited assets be paid to victims.
Bridges has been in federal custody since he was arrested in January 2013 after he failed to appear at the sentencing hearing. He will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.
The investigation was handled by the FBI and IRS-CI. The prosecution was handled by Assistant U.S. Attorney Maria Vento of the U.S. Attorney’s Office in Charlotte.
Russian National Pleads Guilty in $1 Million Trading Account Hack, Securities Fraud SchemeRead the Press Release
NEWARK, N.J. – A Russian national living in New York admitted today that he conspired with others to hack into retail brokerage accounts and execute sham trades, U.S. Attorney Paul J. Fishman announced.
Petr Murmylyuk, 33, of Brooklyn, N.Y., pleaded guilty before U.S. District Judge Esther Salas in Newark federal court to an information charging him with conspiracy to commit securities fraud.
According to documents filed in the case and statements made in court:
Murmylyuk admitted that he participated in a conspiracy to steal from online trading accounts at Scottrade, E*Trade, Fidelity, Schwab and other brokerage firms. Members of the conspiracy first gained unauthorized access to the online accounts of brokerage firm customers. The conspirators then used stolen identities to open additional accounts – referred to in the Information as “Profit Accounts” – at other brokerage houses. They then caused the victims’ accounts to make unprofitable and illogical securities trades with the Profit Accounts, leading to losses in the victims’ accounts and gains in the Profit Accounts. One version of the fraud involved causing the victims’ accounts to sell options contracts to the Profit Accounts, then to purchase the same contracts back minutes later for many times the price.
The members of the conspiracy recruited foreign nationals visiting, studying, and living in the United States to open bank accounts into which illegal proceeds could be deposited. The conspirators then caused the proceeds of the sham trades to be transferred from the Profit Accounts into those accounts, where the stolen money could be withdrawn. The scheme caused combined losses to Scottrade, E*Trade, Fidelity, Schwab and other affected brokerage firms of approximately $1 million.
The charge to which Murmylyuk pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is currently scheduled for Nov. 12, 2013.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford; Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent in Charge Andrew McLees; and IRS – Criminal Investigations, New York Field Office, under the direction of Special Agent in Charge Toni M. Weirauch, with the investigation leading to today’s guilty plea. He also thanked the U.S. Securities and Exchange Commission’s Philadelphia Regional Office, under the leadership of its Regional Director Daniel M. Hawke, and the Justice Department’s Computer Crime and Intellectual Property Section for their assistance in the investigation, as well as the Manhattan District Attorney’s Office, under the direction of District Attorney Cyrus R. Vance Jr., for its contributions and cooperation in coordinating the parallel investigations.
The government is represented by Assistant U.S. Attorney Christopher J. Kelly, Deputy Chief of the Economic Crimes Unit in Newark.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.stopfraud.gov.
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Defense counsel: Bradley L. Henry Esq., New YorkMurmylyuk Information
Rochester Woman Pleads Guilty to Defrauding Elderly Couple Out of $840,000Read the Press Release
MINNEAPOLIS—Earlier today in federal court, a 61-year-old Rochester woman pleaded guilty to defrauding an elderly couple out of more than $840,000. Carolyn Jean Cassar pleaded guilty to one count of wire fraud. Cassar, who was charged in a superseding indictment on July 23, 2013, entered her plea before United States District Court Judge Joan N. Ericksen.
In her plea agreement, Cassar admitted that from May 2006 through September 2012, she executed a scheme to obtain money through false and fraudulent pretenses. Cassar specifically admitted that she induced an elderly couple to provide her with money by falsely representing that she needed the funds to travel to Washington, D.C., to attend to the affairs of her recently deceased daughter. She also falsely represented that she needed money to travel to Italy to, among other things, prosecute a former business agent who had defrauded her. In addition, Cassar told the elderly couple that she expected to receive an inheritance from her father’s estate, which she would use to repay the funds loaned her. To support her false representations, Cassar provided the fraud victims with airline itineraries for her flights to Italy.Cassar actually used the funds she took from the elderly couple to (1) vacation in Europe with her son and others; (2) take design professionals to Italy to study its architecture in preparation for designing a home for herself; (3) pay an architect to draw plans for a villa-style house; and (4) to pay for interior design services.
For her crime, Cassar faces a potential maximum penalty of 20 years in prison. Judge Ericksen will determine her sentence at a future hearing, yet to be scheduled. This case is the result of an investigation by the Federal Bureau of Investigation and the Rochester Police Department. It is being prosecuted by Assistant U.S. Attorneys Katharine T. Buzicky, Tracy L. Perzel, and Kimberly A. Svendsen.Reston Man Pleads Guilty to Producing Child Pornography & Failure to Appear After Fleeing DistrictRead the Press Release
ALEXANDRIA, Va. – Alex Ernesto Calderon Velasquez, 27, of Reston, Va., pleaded guilty today to two counts of production of child pornography and one count of failing to appear in court as required.
Neil H. MacBride, United States Attorney for the Eastern District of Virginia, Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office; and Lt. Colonel Edwin C. Roessler, Jr., Acting Fairfax County Chief of Police, made the announcement after the plea was accepted by United States District Judge Anthony J. Trenga.
Calderon Velasquez pleaded guilty to a two-count criminal information charging production of child pornography and faces a maximum penalty of 30 years in prison on each count when he is sentenced on October 25, 2013. He also pleaded guilty to an indictment charging him with failure to appear while on pretrial release and faces a separate maximum of ten years of imprisonment on that charge.
“Defendant Velasquez is a cyber-predator-plain and simple,” said U.S. Attorney Neil H. MacBride. “Using the internet, Velasquez targeted and victimized vulnerable juveniles. The protection of our children is amongst our highest priorities and we will vigorously prosecute all those that endanger our youth. I would also like to commend our law enforcement partners for apprehending Velasquez after he fled our jurisdiction during the pendency of his case.”
“This case demonstrates the danger of an individual who grooms children online and lures them into sending images that can never be erased,” said Assistant Director in Charge Parlave. “Along with our partners, the FBI is committed to apprehending individuals who sexually exploit minors and we will continue to diligently work together to identify these predators and their victims.”
Lt. Colonel Roessler stated, “protecting the greatest asset of our communities, our youth, is a priority and crimes such as these shall not be tolerated. We are grateful our law enforcement partnership has protected our community through the justice system."
According to a statement of facts filed with the plea agreement and other court documents, Calderon Velasquez used his computer to communicate with a 14-year-old girl in Texas, referred to as Minor A. In about September 2012, Calderon Velasquez sexually groomed and then extorted the victim to strip and engage in sexual activity over Skype chats, which Calderon Velasquez recorded and kept on his computer along with other child pornography. Separately, from about September 2011 through about October 2011, Calderon Velasquez also persuaded and enticed another victim, Minor B, in Arizona to engage in sexually explicit conduct for the purposes of producing video recordings, which the defendant then stored on his laptop computer in the Eastern District of Virginia.
Originally, Calderon Velasquez was scheduled to plead guilty to production of child pornography on May 24, 2013. On the morning of his guilty plea hearing, however, Calderon Velasquez fled. That morning, law enforcement officers discovered the remains of his cut ankle bracelet in Vienna, Virginia. He was later captured on June 7, 2013, in San Antonio, Texas.
This case was investigated by the FBI Washington Field Office’s Child Exploitation Task Force, the Fairfax County Police Department, and the Harris County Constable’s Office in Texas. Assistant United States Attorneys Alexander T.H. Nguyen and Jay V. Prabhu are prosecuting 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.Repeat Offender gets 14 Years for Distributing Crack while ArmedRead the Press Release
A repeat felon who had been out of prison less than six months when he returned to drug dealing, was sentenced today to 14 years in prison, announced U.S. Attorney Jenny A. Durkan. CEDRIC JACKSON, 35, was prosecuted as part of a federal “hotspot” initiative designed to target drug and gun crime in the Kent Valley region of Western Washington. Between August and October 2012, JACKSON supplied cocaine that was purchased by undercover officers on six different occasions. When search warrants were executed on JACKSON’s home, officers found cocaine, cash, and four firearms. At sentencing, U.S. District Judge Thomas S. Zilly said, “You have a long history of convictions. You have been a career criminal in the true sense of the word. But you have so much talent – you could do so many things if you stayed away from drugs and guns.”
CEDRIC JACKSON was released from federal prison in March 2012, and within months returned to manufacturing and distributing crack cocaine. When officers searched his home, they found a loaded Taurus .357 Magnum revolver under his bed, and three guns in a cooler in the garage: a Glock 9mm handgun loaded with a 30 round magazine, a loaded Intratec 9mm handgun, and a revolver. CEDRIC JACKSON has more than a dozen prior convictions including assault, robbery, burglary, drug possession, and bank fraud.
In asking for the 14 year prison sentence, prosecutors wrote to the court, “A significant term of imprisonment is warranted in this case to protect the public from further crimes of defendant Cedric Jackson. As the criminal history outlined above makes clear, from the time he was 18 to the present, the defendant has engaged in a repeated pattern of criminal activity, including violent crimes and unlawful firearm possession. Of most concern, the timeline above demonstrates clearly that the defendant engages in new criminal conduct as soon as he is released from custody.”
In all, 33 people were prosecuted as part of “Operation Down in the Valley,” the hotspot initiative targeting gang violence, drugs, and gun sales in the Kent, Renton, and Tukwila areas. The initiative took nearly 14 pounds of methamphetamine off the street as well as cocaine, heroin, and prescription narcotics. This three month initiative is the second hotspot initiative in the Seattle area. It followed the successful focus on White Center in 2011.
The hotspot initiative was led by the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF) and ICE’s Homeland Security Investigation. The police departments and agencies involved include the Valley Gang Unit (including officers from Kent, Renton, the Port of Seattle, Tukwila, King County Metro, and the Department of Corrections), the Seattle Police Department, the FBI, and the Washington State Liquor Control Board.
The case was prosecuted by Assistant United States Attorney Justin Arnold.
Remaining Defendants in Foreign Worker Fraud Scheme SentencedRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania, announced that the remaining two defendants in a foreign worker fraud scheme were sentenced today in Scranton before U.S. District Court Judge A. Richard Caputo.
Sudheer Bandi, age 45 and Ram Challa, age 44, both received sentences of time served. They were ordered to serve two years of supervised release and forfeit $1.9 million. Both were residing in Wilkes-Barre, Pennsylvania.
According to United States Attorney Peter J. Smith, beginning in 2007, Bandi, Challa, and others engaged in a visa fraud and money laundering scheme by falsifying documentation required to obtain H-1B visas and establishing “shell” companies to give the appearance that they were operating legitimate computer programming businesses.
Through the course of the scheme, checks were issued from bank accounts held by shell companies and deposited into accounts in the name of JMR Technologies, Inc. The transfers created an appearance of revenue for JMR Technologies, Inc., and a portion of the monies were paid to Challa and Bandi using checks that appeared to be paychecks issued by JMR Technologies, Inc. Because Challa and Bandi appeared to have working full-time at JMR Technologies, Inc., they were able to defraud the foreign labor certification program and maintain their H-1B visas.
The H-1B Specialty Occupation Program assists employers in competing in the global market by allowing them to access highly qualified individuals to work in special occupations on a temporary basis. In order to obtain such a visa the employer must comply with strict regulations and obtain approval from various government agencies. In this matter, members of the conspiracy provided false and fraudulent information to government agencies in order to obtain H-1B work visas for themselves and other individuals. In effect, members of the conspiracy who had obtained H-1B Specialty Occupation visas and who were reported to be working as computer programmers and technicians were instead working a gas station clerks in the Wilkes-Barre, Pennsylvania area.
Bandi and Challa were charged in November 2009 and pleaded guilty December 2009. Others charged in relation to this scheme include the following:
Ranga Junuthula, age 43, of Montvale, New Jersey, was charged in April 2010 and pleaded guilty to conspiracy to commit both visa fraud and money laundering. Junuthula was sentenced in October 2010, to 14 months’ imprisonment, $5,000 fine and three years of supervised release. Junuthula was ordered to forfeit $1,900,000.
Ramana Bandreddi, age 43, of Herdon, Virginia, was charged in July 2012 and pleaded guilty to aiding and abetting the giving of false statements in naturalization, citizenship, or registry of aliens. Bandreddi was sentenced in January 2012, to one year probation and a $3,500 fine. Bandreddi was also ordered to forfeit $14,025.
Krishna Koteru, age 44, of Parlin, New Jersey, was charged in July 2012 and pleaded guilty to aiding and abetting the giving of false statements in naturalization, citizenship, or registry of aliens. Koteru was sentenced in January 2012, to one year probation and a $3,000 fine. Koteru was also ordered to forfeit $21,865.68.
Ravi Kumar Nakirikanti, age 40, of Malvern, Pennsylvania, was charged in July 2012 and pleaded guilty to conspiracy provide false statements in naturalization, citizenship or registry of aliens. Nakirikanti was sentenced in March 2013, to one year probation and a $3,000 fine. Nakirikanti was also ordered to forfeit $122,340.
Venkat Varkala Reddy, age 42, of Edison, New Jersey, was charged in July 2012 and pleaded guilty to conspiracy to commit visa fraud. Reddy was sentenced in February 2013, to one year probation and a $2,000 fine. Reddy was also ordered to forfeit $1,496.
Raja Voggu, age 43, of Devon, Pennsylvania, was charged in June 2012 and pleaded guilty to conspiracy provide false statements in naturalization, citizenship or registry of aliens. Voggu was sentenced in December 2012, to one year probation. Voggu was also ordered to forfeit $28,563.54.
The cases were investigated by the Homeland Security Investigations (HSI) Immigration and Customs Enforcement (ICE), the U.S. Department of Labor-Office of Labor Racketeering and Fraud Investigations and the U.S. Citizenship and Immigration Services-Office of Fraud Detection and National Security with the assistance of the Pennsylvania State Police. The cases were prosecuted by Assistant United States Attorney Todd K. Hinkley.Rapid City Man Guilty of Possessing A Stolen GunRead the Press Release
United States Attorney Brendan V. Johnson announced that Sheldon LaPointe, 37, of Rapid City, South Dakota, appeared before Chief Judge Jeffrey L. Viken, U.S. District Court, on July 24, 2013, and pled guilty to a charge of Possession of a Stolen Firearm.
The maximum penalty upon conviction is 10 years’ imprisonment and/or a $250,000 fine.
In October 2012, at Rapid City, LaPointe was given a stolen .45 caliber handgun. The person that gave LaPointe the handgun had informed him it was stolen, and from whom. LaPointe proceeded to hide the gun inside a residence, where it was later retrieved by police.The investigation was conducted by Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Rapid City Police Department. The case is being prosecuted by Assistant U.S. Attorney Eric Kelderman.
A presentence investigation was ordered and a sentencing date will be set. The defendant was remanded to the custody of the U.S. Marshal pending sentencing.
Precious Metals Dealer Pleads Guilty to Federal Tax ChargeRead the Press Release
Defendant Was a Choir Teacher at Cross Timbers Middle School in Grapevine, Texas
DALLAS — Joel Anderson appeared in federal court this morning, before U.S. District Judge Reed C. O’Connor, and pleaded guilty to an information that charges one count of willfully making and subscribing a false income tax return. Anderson faces a statutory maximum penalty of three years in federal prison, a $250,000 fine and restitution – including all taxes, interest and penalties owed to the U.S. Sentencing is set for November 21, 2013, before Judge O’Connor. Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
According to the factual resume filed in the case, Anderson, a Dallas resident, owned Richardson Gold & Silver Exchange and Frisco Gold & Silver Exchange.
Anderson willfully and substantially underreported his income, which he derived from these businesses, for tax years 2008 through 2010, according to the factual resume. During those tax years, the factual resume goes on to state, Anderson deposited checks into his personal bank account from the sale of precious metals totaling more than $1 million, but did not report this income on his personal or corporate returns.
According to the plea agreement filed in the case, Anderson’s offense, including relevant conduct, resulted in a $194,273 tax loss to the U.S.
The case is being investigated by Internal Revenue Service – Criminal Investigation. Assistant U.S. Attorney Joseph M. Revesz is in charge of the prosecution.
Police Officer Pleads Guilty to Laundering Drug MoneyRead the Press Release
PITTSBURGH, Pa. - A former police officer with the District of Columbia, pleaded guilty in federal court to a charge of violating federal money laundering laws, United States Attorney David J. Hickton announced today.
Jared K. Weinberg, 28, formerly from Maryland, pleaded guilty to one count before United States District Judge David S. Cercone.
In connection with the guilty plea, the court was advised that Weinberg participated in an 11-year-long conspiracy to launder drug money for California native Damon Collins.
Judge Cercone scheduled sentencing for Dec. 13, 2013 at 11:30 a.m. The law provides for a maximum total sentence of 20 years in prison, a fine of $500,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the criminal history, if any, of the defendant.
Pending sentencing, the court continued Weinberg on bond.
Assistant United States Attorney Ross E. Lenhardt is prosecuting this case on behalf of the government.
The Drug Enforcement Administration and the Internal Revenue Service-Criminal Investigation conducted the investigation that led to the prosecution of Jared Weinberg.
Philadelphia Man Charged with Social Security FraudRead the Press Release
Angel Garcia, a/k/a “Angel Ramos,” 56, of Philadelphia, PA was charged today by Information with one count of theft of government funds, in connection with his alleged scheme to collect Social Security Administration Supplemental Security Income benefits to which he was not entitled, announced United States Attorney Zane David Memeger. According to the information, the defendant applied for and received benefit payments from the Social Security Administration under one Social Security number while working under a second Social Security number. The information alleges that his conduct resulted in a loss to the government of approximately $106,566.60.
If convicted, the defendant faces a maximum possible sentence of 10 years imprisonment; 3 years of supervised release; a $250,000 fine; restitution of $106,566.60; and a $100 special assessment.The case was investigated by the Social Security Administration – Office of Inspector General, and is being prosecuted by Special Assistant United States Attorney Amanda R. Reinitz.
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UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Ohio Man with Loaded Pistol and Prescription Pills Pleads Guilty to Federal ChargeRead the Press Release
BECKLEY, W.Va. – An Ohio man who possessed a loaded pistol and powerful prescription pain pills in January 2013 pleaded guilty today to a federal charge, announced U.S. Attorney Booth Goodwin. Thomas William Dyer, Jr., 56, of Bloomingburg, Ohio, entered a guilty plea to carrying a firearm during and in relation to a drug trafficking crime before U.S. District Judge Irene C. Berger. On January 20, Dyer possessed a loaded .38 caliber pistol and oxycodone pills at a residence located near New Richmond, Wyoming County, W.Va.
Dyer was arrested following a controlled drug buy that took place in and around New Richmond. During a search, police also found a total of six firearms and 130 oxycodone pills at a residence located near New Richmond.
Dyer faces a mandatory minimum of five years and up to life in prison when he is sentenced on November 14, 2013.
The Southern Regional Drug and Violent Crime Task Force conducted the investigation. Assistant United States Attorney Joshua Hanks is in charge of the prosecution.
This case is being prosecuted as part of Project Safe Neighborhoods. Project Safe Neighborhoods is a nationwide commitment to reduce gun crime in the United States by networking existing local programs targeting gun crime.
This case is also being prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers in communities across the Southern District.
Ocala Felon Sentenced to 15 Years in Federal Prison for Possession of A Firearm and AmmunitionRead the Press Release
Ocala, Florida - Senior United States District Judge Wm. Terrell Hodges today sentenced Roberto Jesus Acosta (54, Cuba) to 15 years in federal prison for possession of a firearm and ammunition affecting interstate commerce by a convicted felon. Acosta pleaded guilty on April 24, 2013.
According to court documents, members of the Ocala Police Department executed a search warrant at Acosta's apartment on February 2, 2013, after learning that Acosta had just purchased a 50-round box of ammunition at a local retailer. Video footage from the business showed Acosta buying the box of .25 caliber ammunition earlier that day. During the search of the apartment, officers recovered the box of ammunition, a .25 caliber handgun and three other rounds of ammunition. The box of ammunition had been hidden inside of an air conditioning unit. When interviewed by the officers, Acosta admitted that he had purchased the box of ammunition "for a neighbor."
Acosta has prior state convictions for manslaughter, burglary, aggravated assault and possession of a firearm by a convicted felon. As a previously convicted felon, he is prohibited from possessing firearms or ammunition under federal law. Furthermore, because Acosta's prior criminal record included several crimes of violence, he qualified for enhanced sentencing as an Armed Career Criminal under federal law.
This case jointly was investigated by the Ocala Police Department and the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF). It was prosecuted by Assistant United States Attorney Robert E. Bodnar, Jr.
This is another case prosecuted as a part of the Department of Justice’s “Project Safe Neighborhoods” program - a nationwide, gun-violence reduction strategy. Acting United States Attorney A. Lee Bentley, III, along with Julie Torres, Special Agent in Charge, ATF, is coordinating the Project Safe Neighborhoods effort here in the Middle District of Florida in cooperation with federal, state, and local law enforcement officials.
New Orleans Man, Dominique Adams, Sentenced to 73 Months for Drug, Gun, and Escape ChargesRead the Press Release
DOMINIQUE ADAMS, age 23, a resident of New Orleans, Louisiana, was sentenced today in federal court by U.S. District Judge Jane Triche Milazzo to 73 months imprisonment for possession with intent to distribute cocaine base, possession of a firearm during a drug trafficking violation, and escape from custody of an officer, announced U.S. Attorney Dana J. Boente. In addition to the term of imprisonment, Judge Milazzo imposed 5 years of supervised release following the term of imprisonment, during which time the defendant will be under federal supervision and risks an additional term of imprisonment should he violate any terms of his supervised release.
ADAMS was sentenced to concurrent terms of 13 months for his drug and escape counts and 60 months consecutive for the possession of the firearm during the drug trafficking offense.
The investigation was conducted by the Federal Bureau of Alcohol, Tobacco, Firearms and Explosives. The prosecution was handled by Assistant U.S. Attorney Tony Gordon Sanders.
Navajo Woman Pleads Guilty to Robbing Sonic Drive-In in Shiprock in November 2012Read the Press Release
ALBUQUERQUE – Jerrileta Singer, 32, an enrolled member of the Navajo Nation who resides in Shiprock, N.M., pleaded guilty this morning to committing a robbery in Indian Country under a plea agreement with the U.S. Attorney’s Office.
Singer and her co-defendant, Eddie Shirley, 28, a Navajo man from Shiprock, were charged in Dec. 2012, with the armed robbery of a Sonic Drive-In Restaurant in Shiprock on Nov. 30, 2012. The two were then indicted and charged with (1) robbery, and (2) using and brandishing a firearm during and in relation to a crime of violence.
During today’s plea hearing, Singer pleaded guilty to the robbery charge and admitted her role in robbing four individuals in the restaurant by use of force, violence and intimidation and taking money belonging to the restaurant. At sentencing, Singer faces a maximum of 15 years in prison.
Shirley, Singer’s co-defendant, entered a guilty plea on June 25, 2013, to Count 2 of the indictment and admitted using a firearm to rob the Sonic Drive-In in Shiprock on Nov. 30, 2012. Shirley has been in federal custody since his arrest and remains detained pending his sentencing hearing, which is scheduled for September 23, 2013. Under the terms of his plea agreement, Shirley will be sentenced to not less than seven years in prison.
This case was investigated by Farmington office of the FBI and the Shiprock office of the Navajo Nation Division of Public Safety, and is being prosecuted by Assistant U.S. Attorney Novaline D. Wilson.
Monterio Wiggins Sentenced After Pleading Guilty to Violations of the Racketeer Influenced Corrupt Organization Act, the Federal Gun Control and Controlled Substances ActsRead the Press Release
MONTERIO WIGGINS, age 22, of Gretna, Louisiana was sentenced today before U.S. District Judge Lance M. Africk after pleading guilty to Violations of the Racketeer Influenced Corrupt Organization Act, the Federal Gun Control and Controlled Substances Acts
The Court sentenced MONTERIO WIGGINS, to 360 months imprisonment and ten (10) years of supervised release. Monterio Wiggins pled guilty to Count 1: Conspiracy to violate the Racketeer Influence and Corrupt Organizations Act (“RICO), in violation of Title 18, United States Code, Section 1962(d); Count 2: Conspiracy to Distribute and Possess with Intent to Distribute over 280 grams of Cocaine Base (“crack”), in violation of Title 21, United States Code, Sections 841(a)(1), 841(b)(1)(A), and 846; and Count 5: Conspiracy to Possess Firearms, in violation of Title 18, United States Code, Section 924(o). As part of the RICO Conspiracy, Monterio Wiggins admitted that both he and other Murder Squad members participated in the murder of Mr. Reginald Francois on April 1, 2010. Specifically, both Dane Carson and Wiggins shot Mr. Reginald Francois.
This case arose out of a joint investigation by FBI , ATF, and the Jefferson Parish Sheriff’s Office. This investigation targeted an area which exhibited a disproportionate amount of violent crimes and narcotics trafficking. During the course of the investigation, specific individuals were identified as the main perpetrators of many of the violent acts and much of the narcotics distribution. Federal and local law enforcement officers interviewed witnesses, confidential informants, as well as state defendants, relative to the targeted individuals. It was revealed that a group of individuals operated in various areas of Harvey Louisiana, specifically the neighborhoods known as Scottsdale and Haydel. This group controlled these areas for their narcotics distribution activities through violence and through threats of violence, to include murder, attempted murder, obstruction and assaults. They were referred to as the Harvey Hustlers and/or Murder Squad.
The “Murder Squad,” or “MS,” was a faction of the Harvey Hustlers composed primarily of individuals residing in the Harvey, Louisiana area of Jefferson Parish, Louisiana. While they primarily operated on the Westbank of Jefferson Parish, members conducted business in other parts of the Eastern District of Louisiana. The “Harvey Hustlers” also referred to as “HH” originated in the Harvey area in the mid-1980s. Members of the organization “hustled” meaning they distributed illegal narcotics. The original goal of the Harvey Hustlers was to make money from sales of illegal narcotics.
The case was investigated by the Bureau of Alcohol, Tobacco and Firearms, Federal Bureau of Investigation and the Jefferson Parish Sheriff’s Office. The case was being prosecuted by Assistant United States Attorneys Duane A. Evans and Bill McSherry.
Monroe Construction Company and Six Co-conspirators Indicted for Government Contract FraudRead the Press Release
Government Alleges the Defendants Lied to Obtain Over $87 Million in Federally Funded Construction Contracts and Used Nominee Bank Account to Conceal the Fraud
CHARLOTTE, N.C. – A criminal indictment charging a Monroe-based construction company, its president and owner and his co-conspirators with government procurement fraud was returned by a grand jury today in U.S. District Court, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina.
The 29-count indictment charges Boggs Paving Inc., Carl Andrew Boggs, III, (a/k/a Drew Boggs), 49, of Waxhaw, N.C., Kevin Hicks, 42, of Monroe, N.C., Greg Miller, 59, of Matthews, N.C., Greg Tucker, 40, of Oakboro, N.C., John Cuthbertson (a/k/a Styx Cuthbertson), 68, of Monroe, and Styx Cuthbertson Trucking Company, Inc., of Wingate, N.C., with conspiracy to defraud the United States Department of Transportation (“USDOT”), conspiracy to commit wire fraud, conspiracy to commit mail fraud, money laundering conspiracy, money laundering and wire fraud for a scheme which lasted over 10 years and involved over $87 million in government contracts. All the defendants except Greg Tucker are also charged with mail fraud.
Marlies T. Gonzalez, Special Agent in Charge, U.S. Department of Transportation, Office of Inspector General (DOT-OIG), Region IV; John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division; and Jeannine A. Hammett, Special Agent in Charge of the Internal Revenue Service - Criminal Investigation Division (IRS-CI), join U.S. Attorney Tompkins in making today’s announcement.
According to allegations contained in the indictment, beginning in 2003 and through the present, Boggs Paving, Inc. (“Boggs Paving”) fraudulently obtained federally and state funded construction contracts by falsely certifying that a disadvantaged business enterprise (“DBE”) or a small business enterprise (“SBE”) would perform and be paid for portion of the work on such contracts. USDOT’s DBE program provides a vehicle for increasing the participation of disadvantaged business enterprises in federally funded transportation-related projects. The indictment alleges that Styx Cuthbertson Trucking Company, Inc. (“Styx”), a road construction hauler based in Monroe, N.C., owned by Styx Cuthbertson, was a certified DBE and SBE used by the defendants as a “pass through” entity to obtain such contracts.
To create the illusion that Styx was doing and being paid for the necessary work, the indictment alleges that, among other things, the conspirators ran payments through a nominee bank account in Styx’s name, but funneled checks back to Boggs Paving and its affiliates, which were not DBEs or SBEs, but were doing the actual work. The indictment further alleges that each time a deposit was made into the nominee account as supposed payment for construction work performed by Styx, a Boggs Paving employee would immediately cut a check from that Styx nominee account to the Boggs entity or another firm that had actually performed the work. In return, according to allegations contained in the indictment, Styx Cuthbertson received a kickback for allowing his name and DBE status to be used by Boggs Paving.
The indictment further alleges that the defendants took careful steps to conceal their fraud. For example, according to allegations contained in the indictment, the defendants made false and misleading statements to both the North and South Carolina Department of Transportation on DBE applications, renewal statements and certifications. The indictment alleges that the defendants submitted bids purporting to be from Styx when in fact they were from Boggs Paving. The indictment also alleges that the defendants further tried to conceal the fraud by using magnetic decals bearing the “Styx” company logo to cover the “Boggs” logo on company trucks to create the appearance that Styx was the company performing the work. The indictment alleges that Boggs Paving also performed numerous clerical functions in Styx’s name including creating quotes on Styx letterhead for construction contracts; drafting fraudulent contracts between Boggs Paving and Styx for subcontract work purportedly performed by Styx; creating invoices for work supposedly done by Styx; and giving Styx Cuthbertson pre-prepared documents (including quotes, contracts and DBE reports) for his signature.
The indictment alleges that from June 2004 through the present, Boggs Paving was the prime contractor on 35 federally-funded contracts, and was a subcontractor for two additional contracts, worth more than $87.6 million. Boggs paving claimed DBE credits of approximately $3.7 million on these contracts for payments purportedly made to Styx. Styx only received payments of approximately $375,432 for actual work on these contracts, all according to the indictment.
The conspiracy charge carries a maximum of five years in prison. Each wire and mail fraud count carries a maximum of 20 years in prison. The money laundering conspiracy charge carries a maximum of 20 years in prison. The money laundering charge carries a maximum of 10 years in prison. Each of the charges also carries a $250,000 fine.
The defendants’ initial appearances in federal court have been set for August 20, 2013.
The charges contained in the indictment are allegations. The defendants are presumed innocent unless and until they have been proven guilty beyond a reasonable doubt in a court of law.
The investigation of the case was handled by USDOT, FBI and IRS. The case is being prosecuted by Assistant United States Attorney Jenny Sugar of the U.S. Attorney’s Office in Charlotte.
Monroe Construction Company and Six Co-conspirators Indicted for Government Contract FraudRead the Press Release
Government Alleges the Defendants Lied to Obtain Over $87 Million in Federally Funded Construction Contracts and Used Nominee Bank Account to Conceal the Fraud
CHARLOTTE, N.C. – A criminal indictment charging a Monroe-based construction company, its president and owner and his co-conspirators with government procurement fraud was returned by a grand jury today in U.S. District Court, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina.
The 29-count indictment charges Boggs Paving Inc., Carl Andrew Boggs, III, (a/k/a Drew Boggs), 49, of Waxhaw, N.C., Kevin Hicks, 42, of Monroe, N.C., Greg Miller, 59, of Matthews, N.C., Greg Tucker, 40, of Oakboro, N.C., John Cuthbertson (a/k/a Styx Cuthbertson), 68, of Monroe, and Styx Cuthbertson Trucking Company, Inc., of Wingate, N.C., with conspiracy to defraud the United States Department of Transportation (“USDOT”), conspiracy to commit wire fraud, conspiracy to commit mail fraud, money laundering conspiracy, money laundering and wire fraud for a scheme which lasted over 10 years and involved over $87 million in government contracts. All the defendants except Greg Tucker are also charged with mail fraud.
Marlies T. Gonzalez, Special Agent in Charge, U.S. Department of Transportation, Office of Inspector General (DOT-OIG), Region IV; John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division; and Jeannine A. Hammett, Special Agent in Charge of the Internal Revenue Service - Criminal Investigation Division (IRS-CI), join U.S. Attorney Tompkins in making today’s announcement.
According to allegations contained in the indictment, beginning in 2003 and through the present, Boggs Paving, Inc. (“Boggs Paving”) fraudulently obtained federally and state funded construction contracts by falsely certifying that a disadvantaged business enterprise (“DBE”) or a small business enterprise (“SBE”) would perform and be paid for portion of the work on such contracts. USDOT’s DBE program provides a vehicle for increasing the participation of disadvantaged business enterprises in federally funded transportation-related projects. The indictment alleges that Styx Cuthbertson Trucking Company, Inc. (“Styx”), a road construction hauler based in Monroe, N.C., owned by Styx Cuthbertson, was a certified DBE and SBE used by the defendants as a “pass through” entity to obtain such contracts.
To create the illusion that Styx was doing and being paid for the necessary work, the indictment alleges that, among other things, the conspirators ran payments through a nominee bank account in Styx’s name, but funneled checks back to Boggs Paving and its affiliates, which were not DBEs or SBEs, but were doing the actual work. The indictment further alleges that each time a deposit was made into the nominee account as supposed payment for construction work performed by Styx, a Boggs Paving employee would immediately cut a check from that Styx nominee account to the Boggs entity or another firm that had actually performed the work. In return, according to allegations contained in the indictment, Styx Cuthbertson received a kickback for allowing his name and DBE status to be used by Boggs Paving.
The indictment further alleges that the defendants took careful steps to conceal their fraud. For example, according to allegations contained in the indictment, the defendants made false and misleading statements to both the North and South Carolina Department of Transportation on DBE applications, renewal statements and certifications. The indictment alleges that the defendants submitted bids purporting to be from Styx when in fact they were from Boggs Paving. The indictment also alleges that the defendants further tried to conceal the fraud by using magnetic decals bearing the “Styx” company logo to cover the “Boggs” logo on company trucks to create the appearance that Styx was the company performing the work. The indictment alleges that Boggs Paving also performed numerous clerical functions in Styx’s name including creating quotes on Styx letterhead for construction contracts; drafting fraudulent contracts between Boggs Paving and Styx for subcontract work purportedly performed by Styx; creating invoices for work supposedly done by Styx; and giving Styx Cuthbertson pre-prepared documents (including quotes, contracts and DBE reports) for his signature.
The indictment alleges that from June 2004 through the present, Boggs Paving was the prime contractor on 35 federally-funded contracts, and was a subcontractor for two additional contracts, worth more than $87.6 million. Boggs paving claimed DBE credits of approximately $3.7 million on these contracts for payments purportedly made to Styx. Styx only received payments of approximately $375,432 for actual work on these contracts, all according to the indictment.
The conspiracy charge carries a maximum of five years in prison. Each wire and mail fraud count carries a maximum of 20 years in prison. The money laundering conspiracy charge carries a maximum of 20 years in prison. The money laundering charge carries a maximum of 10 years in prison. Each of the charges also carries a $250,000 fine.
The defendants’ initial appearances in federal court have been set for August 20, 2013.
The charges contained in the indictment are allegations. The defendants are presumed innocent unless and until they have been proven guilty beyond a reasonable doubt in a court of law.
The investigation of the case was handled by USDOT, FBI and IRS. The case is being prosecuted by Assistant United States Attorney Jenny Sugar of the U.S. Attorney’s Office in Charlotte.
Mescalero Apache Man Sentenced to Thirty Months for Federal Child Sexual Abuse ConvictionRead the Press Release
ALBUQUERQUE – Nathaniel Chee, Jr., 53, a member and resident of the Mescalero Apache Nation, was sentenced yesterday afternoon to 30 months in prison followed by five years of supervised release for his abusive sexual contact conviction. Chee will be required to register as a sex offender when he completes his prison sentence.
Chee was arrested on July 25, 2012, based on a criminal complaint alleging that he sexually abused a child between the age of 12 and 16 years. He has been in federal custody since that time. On Nov. 28, 2012, Chee pleaded guilty to a felony information charging him with abusive sexual contact. In entering his guilty plea, Chee admitted sexually abusing a child on Nov. 11, 2009, on the Mescalero Apache Indian Reservation.
This case was investigated by the Mescalero Agency of the BIA’s Office of Justice Services and is being prosecuted by Assistant U.S. Attorney Aaron O. Jordan of the U.S. Attorney’s Las Cruces Branch Office.
The case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice (DOJ) to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and DOJ’s Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/.
Marrero Woman, Shanera Washington-sylve, Pleads Guilty to Charges Related to Financial Aid FraudRead the Press Release
SHANERA WASHINGTON-SYLVE, age 46, a resident of Marrero, Louisiana, pled guilty in federal court today before U.S. District Judge Lance M. Africk to one count of financial aid fraud, announced U. S. Attorney Dana J. Boente.
According to court documents, WASHINGTON-SYLVE submitted or caused to be submitted false Free Application for Federal Student Aid (“FAFSA”) forms, on behalf of her daughter for the 2009 through 2013 academic years, falsely stating that she was “single.” As a result of WASHINGTON-SYLVE’s false statements in the applications, her daughter fraudulently received approximately $23,196 in Federal Pell Grants from the United States Department of Education, an agency and department of the United States.
WASHINGTON-SYLVE faces a maximum term of imprisonment of five years, a $20,000 fine, and three years of supervised release following imprisonment. Sentencing is set for October 24, 2013 at 2:00 PM.
The case was investigated by the U.S. Department of Education, Office of Inspector General, and prosecuted by Assistant U. S. Attorney Julia K. Evans.(Download Factual Basis )
Manhattan U.S. Attorney and FBI Assistant Director-In-Charge Announce Insider Trading Charges Against Four SAC Capital Management Companies and SAC Portfolio ManagerRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and George Venizelos, the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of insider trading charges against four companies – S.A.C. CAPITAL ADVISORS, L.P. (“SAC Capital LP”), S.A.C. CAPITAL ADVISORS, LLC (“SAC Capital LLC”), CR INTRINSIC INVESTORS, LLC (“CR Intrinsic”), and SIGMA CAPITAL MANAGEMENT, LLC (“Sigma Capital”), collectively (the “SAC Companies”). The SAC Companies are responsible for the management of a group of affiliated hedge funds, collectively (the “SAC Hedge Fund” or “SAC”). Charges were also unsealed today against RICHARD LEE, a portfolio manager employed by SAC Capital LP, who focused on “special situations” like mergers and acquisitions, private equity buy-outs, and corporate restructurings in publicly-traded companies across various industry sectors. LEE pled guilty on July 23, 2013, before U.S. District Judge Paul G. Gardephe, to conspiracy and securities fraud charges in connection with his work at SAC Capital LP.
The SAC Companies are charged with criminal responsibility for insider trading offenses. These alleged offenses were committed by numerous employees, occurred over the span of more than a decade, and involved the securities of more than 20 publicly-traded companies across multiple sectors of the economy. It is charged that the acts of these employees were made possible by institutional practices that encouraged the widespread solicitation and use of material, non-public information (“Inside Information”). This activity allegedly resulted in hundreds of millions of dollars in illegal profits and avoided losses at the expense of members of the investing public. The SAC Companies are expected to be arraigned on the charges on tomorrow at 10:00 a.m. before U.S. District Judge Laura Taylor Swain.
Manhattan U.S. Attorney Preet Bharara said: “A company reaps what it sows, and as alleged, S.A.C. seeded itself with corrupt traders, empowered to engage in criminal acts by a culture that looked the other way despite red flags all around. S.A.C. deliberately encouraged the no-holds-barred pursuit of an ‘edge’ that literally carried it over the edge into corporate criminality. Companies, like individuals, need to be held to account and need to be deterred from becoming dens of corruption. To all those who run companies and value their enterprises, but pay attention only to the money their employees make and not how they make it, today’s indictment hopefully gets your attention.”
FBI Assistant Director-in-Charge George Venizelos said: “Our aim all along has been to root out the wrongdoers, and send a message to anyone else inclined to break the law. If your information ‘edge’ is inside information, you can’t trade on it.”
According to the allegations in the five-count Indictment and the criminal Information to which LEE pled guilty, both of which were unsealed today in Manhattan federal court:
The SAC Hedge Fund operated as a collection of dozens of individual trading portfolios that covered nearly every trading sector of the economy. Each portfolio was headed up by a portfolio manager (“PM”), and supported by one or more research analysts (“RA”). SAC PMs had substantial discretion in managing the investments in their own portfolios, and were required by the SAC Companies to share the investment recommendations in which they had the greatest confidence with the owner of the SAC Companies (the “SAC Owner”). The SAC Owner managed the largest trading portfolio at SAC.
From 1999 through at least 2010, numerous employees of the SAC Companies obtained and traded on Inside Information, or recommended trades based on such information to SAC PMs or the SAC Owner. To date, eight SAC Company PMs and RAs have been charged and/or convicted in insider trading cases involving the SAC Hedge Fund, including LEE, who was charged and pled guilty earlier this week.
The systematic insider trading engaged in by SAC PMs and RAs was the predictable and foreseeable result of an institutional failure. The SAC business culture encouraged and tolerated the relentless pursuit of an information “edge,” with no meaningful commitment to ensuring that such an “edge” came from legitimate research and not Inside Information.
As charged in the Indictment, these institutional failings fell into three main categories:
First, the SAC Companies focused on recruiting SAC PMs and SAC RAs who had proven networks of public company contacts. The SAC Companies, however, did not make any corresponding effort to ensure that prospective SAC PMs and SAC RAs did not use these contacts to obtain illegal Inside Information. For example, in a November 16, 2008, e-mail forwarded to the SAC Owner, an SAC PM candidate in the industrial sector was recommended in part because he had “a house in the Hamptons with the CFO” of a Fortune 100 industrial sector company. In another instance, the SAC Companies hired LEE despite a warning to the SAC Owner from LEE’s prior employer, that LEE had been a member of an insider trading group at that hedge fund. LEE ultimately traded on Inside Information in the $1.25 billion “special situations” SAC portfolio he jointly managed with a second SAC PM.
Second, employees of the SAC Companies were financially rewarded for recommending to the SAC Owner “high conviction” trading ideas, in which the SAC PM had an “edge” over other investors. In many cases, the employees were not questioned when making trading recommendations that appeared to be based on Inside Information. On numerous occasions, the SAC Owner failed to follow up with SAC employees who were promoting trading sourced to an “edge” from a contact at a public company or with similar language suggesting potential insider trading. On one occasion, the SAC Owner participated in a discussion with his employees on the topic of confidential information the SAC employees had said that they learned during a paid consultation session from a clinical investigator for a drug trial. During the discussion with his employees, the SAC Owner, a sophisticated trader with over three decades of experience, never questioned whether the drug trial data constituted Inside Information. In addition, the SAC Owner and SAC Companies cultivated an environment that emphasized not discussing Inside Information openly rather than not seeking or trading on it in the first place.
Third, the SAC Companies employed limited compliance measures designed to detect or prevent insider trading by SAC PMs or SAC RAs. They failed to routinely monitor employee e-mails for indications of insider trading until late 2009, even though SAC’s head of compliance had recommended such monitoring to SAC management four years earlier. Indeed, despite numerous documented cases of insider trading at SAC – established by, among other things, guilty pleas of six former SAC PMs and RAs, each predicated upon repeated insider trading over substantial periods of time – SAC’s compliance department contemporaneously identified only a single instance of suspected insider trading by its employees. In that one case, the SAC Companies permitted those involved to continue working at SAC and failed to report the conduct to regulators or law enforcement.
In addition to the Indictment, today the Government filed a civil forfeiture action (the “Forfeiture Complaint”) in Manhattan federal court, seeking the forfeiture of assets held by investment funds to which the SAC Companies served as investment advisors, assets held by affiliated investment funds, and assets held by the SAC Companies themselves. The Forfeiture Complaint alleges that the SAC Companies engaged in money laundering by commingling the illegal profits from insider trading with other assets, using the profits to promote additional insider trading, and transferring the profits with the assistance of financial institutions.
The SAC Companies are charged together in Count One of the Indictment with wire fraud, and each of the four SAC Companies is charged separately in Counts Two through Five with securities fraud. Each of the SAC Companies faces a maximum fine, for the securities fraud charges, of the greater of $25 million, or twice the gross gain or loss derived from the offense on each charge.
The criminal Information unsealed today, to which RICHARD LEE pled guilty earlier this week, charges LEE with one count of conspiracy and one count of securities fraud in connection with insider trading between April 2009 through 2010, while he was employed by SAC Capital LP. LEE faces a maximum penalty of 20 years in prison for the securities fraud charge and five years in prison for the conspiracy charge. He also faces a maximum fine of $5 million for the securities fraud charge and $250,000 or twice the gross gain or loss derived from the offense on the conspiracy charge.
Of the seven other SAC Company portfolio managers and research analysts previously charged in insider trading cases involving the SAC Hedge Fund, five have pled guilty and await sentencing. They include:
- Jon Horvath, who pled guilty on September 28, 2012;
- Wes Wang, who pled guilty on July 13, 2012;
- Donald Longueuil, who pled guilty on April 28, 2011;
- Noah Freeman, who pled guilty on February 7, 2011; and
- Richard Choo-Beng Lee, who pled guilty on October 13, 2009
Charges are still pending against the remaining two defendants previously charged in connection with SAC, Michael Steinberg and Mathew Martoma, who are presumed innocent unless and until proven guilty.
Mr. Bharara praised the efforts of the FBI and also thanked the U.S. Securities and Exchange Commission for its assistance in the investigation. He added that the investigation is continuing.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force, on which Mr. Bharara serves as a Co-Chair of the Securities and Commodities Fraud Working Group. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.StopFraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Arlo Devlin-Brown, Antonia M. Apps and John T. Zach are in charge of the prosecution, and Assistant U.S. Attorney Micah Smith is responsible for the forfeiture aspects of the case.
The charges contained in the Indictment are merely accusations and the defendants are presumed innocent unless and until proven guilty.
SAC Indictment (Stamped)
SAC Capital Complaint - 13 Civ 5182
Lee, Richard InformationManhattan U.S. Attorney and FBI Assistant Director-In-Charge Announce Charges Against Russian National for Hacking Nasdaq ServersRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and George Venizelos, the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of an indictment against a Russian hacker, ALEKSANDR KALININ, a/k/a “Grig,” a/k/a “g,” a/k/a “tempo,” for hacking certain computer servers used by the NASDAQ Stock Market (“NASDAQ”). In a separate indictment also unsealed today, KALININ and another Russian hacker, NIKOLAY NASENKOV, were charged with an international scheme to steal bank account information by hacking U.S.-based financial institutions and then using the stolen account information to withdraw millions of dollars from the victims’ bank accounts. KALININ has also been charged in a separate indictment unsealed in federal court in Newark, New Jersey. KALININ and NASENKOV remain at large.
Manhattan U.S. Attorney Preet Bharara said: “As today’s allegations make clear, cyber criminals are determined to prey not only on individual bank accounts, but on the financial system itself. But would-be cyber thieves should take note: Because of the close and growing collaboration between the U.S. government and the private sector on issues of cyber security, our ability to unmask and prosecute the anonymous perpetrators of cyber crimes – wherever they may be located – has never been stronger.”
FBI Assistant Director-in-Charge George Venizelos said: “As alleged, Kalinin infiltrated NASDAQ’s servers, allowing for the manipulation and theft of sensitive data. In a series of separate schemes, Kalinin and Nasenkov stole hundreds of thousands of bank account numbers, PIN numbers, and other code to withdraw millions of dollars from victim accounts. Today, their password has expired.”
According to the allegations in the Indictments unsealed today in Manhattan federal court:
The NASDAQ Hack
From November 2008 through October 2010, KALININ hacked various computer servers used by the NASDAQ to conduct its business operations. During the course of the hack, KALININ installed on certain NASDAQ servers malicious software, or malware, which enabled him and others to surreptitiously access the infected NASDAQ servers and execute commands on those servers, including commands to delete, change or steal data. The infected servers did not include the trading platform that allows NASDAQ customers to buy and sell securities.
The Citibank and PNC Bank Hacks
From December 2005 through November 2008, KALININ and NASENKOV allegedly stole bank account information from financial institutions through computer hacking. KALININ, NASENKOV, and their co-conspirators then used that account data to access the bank accounts of thousands of individual victims without authorization and without those victims’ knowledge, resulting in the theft of millions of dollars from those accounts.
The defendants fraudulently obtained bank account numbers, customer identification numbers (a unique number embossed or printed on the front of an ATM card), card verification values (a security feature which helps authenticate an ATM card), and personal identification numbers (PINs) for victims’ accounts at financial institutions, including Citibank and PNC Bank, through computer hacking and other techniques. As part of the scheme, the defendants and their co-conspirators then encoded the stolen account data onto the magnetic strips of blank plastic ATM cards so that those ATM cards could be used to access individual victims’ bank accounts through ATMs. The ATM cards were then used, along with the stolen account PINs, to access individual victims’ accounts through ATMs located around the world, including in the United States, Estonia, Canada, Great Britain, Russia, and Turkey, and to withdraw from those accounts millions of dollars.
In January 2006, the PINs for hundreds of customer accounts were compromised as a result of a cyber attack launched against PNC Bank’s online banking website. NASENKOV allegedly supplied stolen account information, including PINs, from the compromised bank accounts to co-conspirators who, in turn, used the stolen account information to encode blank ATM cards and withdraw approximately $1.3 million from victims’ accounts.
In 2007, KALININ allegedly placed malware on a computer network that processed ATM transactions for Citibank and other financial institutions. The malware recorded data passing over the network and exported it to an outside computer. Using this malicious computer code, KALININ stole bank account information for approximately 500,000 bank accounts, including approximately 100,000 Citibank accounts. The stolen account information was used to create ATM cards that in turn were used to withdraw approximately $2.9 million from Citibank customers’ accounts.
In 2008, NASENKOV allegedly used a computer program to mount an attack against Citibank’s online banking website that resulted in the theft of account information for more than 300,000 accounts. The stolen account information was used to create ATM cards that in turn were used to withdraw approximately $3.6 million from the compromised accounts.
KALININ, 26, of St. Petersburg, Russia, is charged with one count of computer hacking in connection with the NASDAQ hack, which carries a maximum sentence of 10 years in prison. In connection with the scheme to steal bank account information, KALININ is charged with one count of conspiracy to commit bank fraud, which carries a maximum sentence of 30 years in prison; four counts of bank fraud, each of which carries a maximum sentence of 30 years in prison; one count of conspiracy to commit access device fraud, which carries a maximum sentence of 7 ½ years in prison; one count of aggravated identity theft, which carries a mandatory sentence of 2 years in prison; and one count of conspiracy to commit computer intrusion, which carries a maximum sentence of 5 years in prison.
NASENKOV, 31, of St. Petersburg, Russia, is charged with one count of conspiracy to commit bank fraud, which carries a maximum sentence of 30 years in prison; four counts of bank fraud, each of which carries a maximum sentence of 30 years in prison; one count of conspiracy to commit access device fraud, which carries a maximum sentence of 7 ½ years in prison; one count of computer intrusion to obtain information, which carries a maximum sentence of 5 years in prison; one count of computer intrusion to further fraud, which carries a maximum sentence of 5 years in prison; one count of aggravated identity theft, which carries a mandatory sentence of 2 years in prison; one count of conspiracy to commit money laundering, which carries a maximum sentence of 20 years in prison; and one count of conspiracy to commit computer intrusion, which carries a maximum sentence of 5 years in prison.
Mr. Bharara praised the outstanding investigative work of the FBI. In addition, Mr. Bharara thanked NASDAQ, Citibank, and PNC Bank for their cooperation and assistance in the investigations. Mr. Bharara also thanked the Department of Justice’s Computer Crime and Intellectual Property Section for their support.
The prosecution of this case is being handled by the Office’s Complex Frauds Unit. Assistant United States Attorneys Thomas G.A. Brown, Sarah Lai, Joseph Facciponti, and James J. Pastore, Jr., are in charge of the prosecution.
The charges contained in the Indictments are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
U.S. v. Aleksandr Kalinin Indictment
U.S. v. Nikolay Nasenkov and Aleksandr Kalinin S1 IndictmentMan Who Entered U.S. Illegally Charged with Sex Trafficking and StalkingRead the Press Release
NEWARK, N.J. – A man who entered the United States from Honduras illegally appeared today in federal court on charges of sex trafficking and stalking, U.S. Attorney Paul J. Fishman announced.
Hermen Zuniga Castro, 30, a/k/a “Helmer Zuniga,” “Herman Zuniga,” and “Helmer Mendoza,” of Honduras, was charged by criminal complaint for attempted sex trafficking and stalking. He appeared in the Middle District of Pennsylvania on July 11, 2013, where he was arrested by U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HIS) following his release from the custody of the Bureau of Prisons after being incarcerated for illegal entry after deportation. He appeared before U.S. Magistrate Judge Michael Hammer in Newark federal court.
According to documents filed in this case and statements made in court:In June 2007, Zuniga began stalking and threatening the victim – identified in court papers only as “E.M.,” – while they were both living in Honduras. In November 2007, E.M. left Honduras and was smuggled into the United States by Zuniga, fearing he would kill her family, including her son. For the next two years, Zuniga forced the victim to work as a housekeeper and as a prostitute in Texas. During this time, Zuniga also terrorized the victim by repeatedly raping, beating, and threatening her. Zuniga told the victim that his ultimate plan was to take her to Houston to work as a prostitute. In October 2009, Zuniga branded the victim by carving the letter “H” into the left side of her abdomen with a knife.
The victim was finally rescued in November 2009, when Zuniga Castro was arrested for a traffic violation in Cleburne, Texas, and subsequently charged with illegal re-entry in the Northern District of Texas. He was sentenced to 14 months in prison and in February 2011 was deported to Honduras.
Shortly after arriving back in Honduras, Zuniga contacted the victim’s family and eventually obtained the victim’s telephone number in the United States. On one occasion, the victim received a telephone call from her mother with Zuniga standing next to her mother, threatening to kill the victim if she did not answer his telephone calls. Soon afterward, the victim began received threatening telephone calls from Zuniga on a daily basis. During the calls, he would threaten to come to the United States, transport the victim to Houston, where he would force her to earn money for him by becoming a prostitute.
In September 2011, Zuniga told the victim that he was en route to New Jersey from Honduras to get her. Early on the morning of Oct. 11, 2011, Zuniga called the victim and told her that he was at Newark Penn Station. He was apprehended by federal agents and arrested.
The count of attempted sex trafficking is punishable by a maximum statutory penalty of life in prison and a mandatory minimum statutory penalty of 15 years in prison. It also carries a maximum fine of $250,000 and a mandatory minimum term of five years of supervised release. The maximum penalty for stalking is five years in prison and a mandatory minimum term of three years of supervised release.
U.S. Attorney Fishman credited special agents of U.S. Immigration and Customs Enforcement (ICE) Homeland Securities Investigations, under the direction of Special Agent in Charge Andrew M. McLees, with the investigation leading to today’s charges. Zuniga Castro was ordered detained.The government is represented by Assistant U.S. Attorneys Shana W. Chen of the Economic Crimes Unit and Elizabeth M. Harris of the OC/Gangs Unit in Newark.
The charges and allegations contained in the complaints are merely accusations and the defendant is considered innocent unless and until proven guilty.
13-312
Zuniga Complaint