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Friday 31 May 2013
U.S. Attorney Announces Lufkin ProsecutorRead the Press Release
Department of Justice
Office of Public AffairsLUFKIN, Texas – U.S. Attorney John M. Bales announced the hiring of federal prosecutor assigned to the Lufkin office of the United States Attorney for the Eastern District of Texas.
Assistant U.S. Attorney Lauren Gaston was administered the Oath of Office by U.S. Magistrate Judge Zack Hawthorn, today before a small crowd of friends, family, and government officials at the Ward R. Burke United States Courthouse .
Gaston was born and raised in Nacogdoches, Texas and is a graduate of the Downtown Magnet Law High School in Wichita, Kansas, Stephen F. Austin State University and the Texas Tech School of Law. Gaston began her career as a lawyer as an Assistant District Attorney with the Dallas County District Attorney’s Office in 2005. As an ADA, she was assigned to the family violence courts, but also worked in the general misdemeanor courts, the intake/grand jury division and general trial courts before being moved to the Child Abuse Division. In 2010, Gaston accepted a position with the Nacogdoches County District Attorney’s Office handling a variety of felony criminal cases, juvenile matters and appellate matters.
Gaston joins the Lufkin office where she will prosecute a wide range of federal crimes including drug trafficking, white collar crime, immigration matters, violent crimes and child pornography.
The Eastern District of Texas is comprised of 43 counties stretching from the Gulf of Mexico to the Oklahoma/Texas border. There are 6 staffed offices located in Beaumont, Lufkin, Tyler, Texarkana, Plano and Sherman with a total of 52 federal prosecutors.Two Virginia Businessmen Sentenced for Illegally Reimbursing Campaign ContributionsRead the Press Release
William P. Danielczyk Jr. was sentenced today to 28 months in prison and ordered to pay a $50,000 fine for illegally reimbursing $186,600 in contributions to the Senate and Presidential campaign committees of a candidate for federal office and then obstructing the subsequent law enforcement investigation.
Acting Assistant Attorney General Mythili Raman of the Criminal Division, U.S. Attorney Neil H. MacBride of the Eastern District of Virginia and Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office, made the announcement after sentencing by U.S. District Judge James C. Cacheris in the Eastern District of Virginia.
On Feb. 26, 2013, Danielczyk, 51, and Eugene R. Biagi, 78, both of Oakton, Va., pleaded guilty to making illegal conduit campaign contributions. Biagi was sentenced to two years’ supervised probation for his role in Danielczyk’s scheme.
According to court records, Danielczyk was the chairman of Galen Capital Corporation and Biagi served as the corporation’s secretary. In September 2006, Danielczyk co-hosted a fundraiser for a candidate’s campaign for the U.S. Senate and in March 2007 he co-hosted a fundraiser for the same candidate’s 2008 campaign for the President of the United States.
Danielczyk admitted that he recruited individuals, including Biagi and other corporate employees, to serve as “straw donors” to the campaigns, assuring the donors that they would be reimbursed for their contributions. Danielczyk’s assistant collected the contributions, and Danielczyk and Biagi then reimbursed the straw donors for their contributions using Galen Capital Corporation’s corporate funds.
Biagi admitted that he disguised the nature of the reimbursement payments by falsely identifying the purpose of the reimbursement checks on the memorandum line of the check itself and by issuing the checks for amounts slightly larger than the campaign contributions. As part of the obstruction scheme, Danielczyk directed the creation of back-dated letters addressed to individual contributors, which falsely characterized the reimbursement payments to them as “consulting fees.” One set of the letters contained a check for $1,500 in order to further the charade that the reimbursement checks were consulting fees. Biagi furthered the scheme by, among other means, signing the back-dated letters and the checks, thereby supporting Danielczyk’s aims at covering up the true conduct and obstructing the investigations focused on the reimbursement scheme.
Danielczyk and Biagi admitted they used corporate funds to reimburse a total of $186,600 to the two campaigns. The campaigns unwittingly reported them as lawful contributions from the individual “straw donors.”
This case was investigated by the FBI’s Washington Field Office. Assistant U.S. Attorneys Mark D. Lytle and Timothy D. Belevetz from the U.S. Attorney’s Office for the Eastern District of Virginia and Trial Attorney Eric L. Gibson of the Criminal Division’s Public Integrity Section prosecuted the case on behalf of the United States.
Two Virginia Businessmen Sentenced for Illegally Reimbursing Campaign ContributionsRead the Press Release
ALEXANDRIA, Va. –William P. Danielczyk Jr. was sentenced today to 28 months in prison and ordered to pay a $50,000 fine for illegally reimbursing $186,600 in contributions to the Senate and Presidential campaign committees of a candidate for federal office and then obstructing the subsequent law enforcement investigation.
U.S. Attorney Neil H. MacBride of the Eastern District of Virginia, Acting Assistant Attorney General Mythili Raman of the Criminal Division, and Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office made the announcement after sentencing by U.S. District Judge James C. Cacheris in the Eastern District of Virginia.
On Feb. 26, 2013, Danielczyk, 51, and Eugene R. Biagi, 78, both of Oakton, Va., pleaded guilty to making illegal conduit campaign contributions. Biagi was sentenced to two years’ supervised probation for his role in Danielczyk’s scheme.
According to court records, Danielczyk was the chairman of Galen Capital Corporation, and Biagi served as the corporation’s secretary. In September 2006, Danielczyk co-hosted a fundraiser for a candidate’s campaign for the U.S. Senate and in March 2007 he co-hosted a fundraiser for the same candidate’s 2008 campaign for the President of the United States.
Danielczyk admitted that he recruited individuals, including Biagi and other corporate employees, to serve as “straw donors” to the campaigns, assuring the donors that they would be reimbursed for their contributions. Danielczyk’s assistant collected the contributions, and Danielczyk and Biagi then reimbursed the straw donors for their contributions using Galen Capital Corporation’s corporate funds.
Biagi admitted that he disguised the nature of the reimbursement payments by falsely identifying the purpose of the reimbursement checks on the memorandum line of the check itself and by issuing the checks for amounts slightly larger than the campaign contributions. As part of the obstruction scheme, Danielczyk directed the creation of back-dated letters addressed to individual contributors, which falsely characterized the reimbursement payments to them as “consulting fees.” One set of the letters contained a check for $1,500 in order to further the charade that the reimbursement checks were consulting fees. Biagi furthered the scheme by, among other means, signing the back-dated letters and the checks, thereby supporting Danielczyk’s aims at covering up the true conduct and obstructing the investigations focused on the reimbursement scheme.
Danielczyk and Biagi admitted they used corporate funds to reimburse a total of $186,600 to the two campaigns. The campaigns unwittingly reported them as lawful contributions from the individual “straw donors.”
This case was investigated by the FBI’s Washington Field Office. Assistant U.S. Attorneys Mark D. Lytle and Timothy D. Belevetz from the U.S. Attorney’s Office for the Eastern District of Virginia and Trial Attorney Eric L. Gibson of the Criminal Division’s Public Integrity Section prosecuted the case on behalf of the United States.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.
Two Men Arrested for Extortion in Local Gambling OperationRead the Press Release
BUFFALO, N.Y.--U.S. Attorney William J. Hochul, Jr. announced today that Eric Battistoni, 71, of Cheektowaga, N.Y., and Thi Nguyen, 38, of West Seneca, N.Y., were arrested and charged by criminal complaint with using extortion to collect gambling debts. The charges carry a maximum penalty of 20 years in prison, a fine of $250,000 or both.
Assistant U.S. Attorney Michael McCabe, who is handling the case, stated that according to complaint, Nguyen and Battistoni were members of a gambling ring involving bets on sporting events. The defendants recently demanded payment of an outstanding gambling debt from a Buffalo man who owed $24,000 stemming from losses on 2012 professional sporting events. On May 15, 2013, Nguyen and Battisoni met with the man at a coffee shop on Bailey Avenue and William Street in Buffalo where they demanded payments of $300 a week until the debt was settled. Battistoni threatened violence if payments were not made.
The complaint is the result of a joint investigation on the part of the Federal Bureau of Investigation, under the direction of Acting Special Agent in Charge Richard M. Frankel and the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Resident Agent in Charge Frank Christiano.
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.Two Indicted for Arson and Mail FraudRead the Press Release
Steven Mellides, 51, of Massapequa, New York, and John Fisher, 34, of Mt. Juliet, Tennessee, were
indicted by a federal grand jury on May 15, 2013, and were each charged with four counts relating to their
participation in the intentional burning of a newly constructed single family house in Mt. Juliet, Tenn.,
announced David Rivera, Acting U.S. Attorney for the Middle District of Tennessee.The indictment was unsealed yesterday after both defendants were arrested. The indictment charges
each defendant with conspiring to commit, and committing, mail fraud and arson.
“This case illustrates the U.S. Attorney’s Office commitment to prosecuting both violent crime and
white collar crime,” said Acting United States Attorney David Rivera. “We will continue working diligently with our local and state partners to bring to justice those who seek to enrich themselves by putting innocent people in harm’s way.”“These arrests indicate the collaborative effort by federal, state and local authorities” said Jeff Fulton,
Special Agent in Charge, ATF, Nashville Field Division. “Arson is a a crime of violence that places innocent
people’s lives and property in harm’s way.”According to the indictment, Mellides owned a residence in Mt. Juliet, Tennessee, and had multiple
conversations with Fisher and at least one other individual regarding intentionally burning the house. Those conversations culminated with Fisher intentionally setting fire to the house on December 12, 2009. After the house was destroyed by fire, Mellides told State Farm Insurance that he did not know how the fire started and did not ask anyone to set the fire, and caused multiple checks to be mailed from State Farm to pay for the damage to the house.If convicted, the defendants each face up to twenty years in prison and a $250,000 fine, as well as
forfeiture of property derived from or used in violation the offenses charged.The case was investigated by agents with the Bureau of Alcohol, Tobacco, Firearms and Explosives, the
Bomb and Arson Section of the Tennessee Department of Commerce and Insurance, and the Mt. Juliet Police Department. The United States is represented by Assistant U.S. Attorney Scarlett M. Singleton.An indictment is merely an accusation and is not evidence of guilt. Defendants are presumed innocent
unless and until proven guilty in a court of law.Timber Lake Man Sentenced for Disorderly ConductRead the Press Release
United States Attorney Brendan V. Johnson announced that Brent Biegler, age 32, of Timber Lake, South Dakota pled guilty to a charge of Disorderly Conduct and was sentenced on May 29, 2013 by U.S. Magistrate Judge Mark A. Moreno.
Biegler was ordered to pay a $500 fine and a $5 assessment to the Federal Crime Victims Fund.
The conviction arose from an incident in September 2012 when Biegler intentionally caused serious public inconvenience and annoyance to a Timber Lake woman.
The investigation was conducted by the by the Federal Bureau of Investigation and the Cheyenne River Sioux Tribe Law Enforcement Division. Assistant U.S. Attorney Mikal Hanson prosecuted the case.
Three-time Felon Exiled to 16 Years in Prison for Violent Armed RobberyRead the Press Release
Pistol Whipped a Store Clerk During the Robbery
Baltimore, Maryland - U.S. District Judge J. Frederick Motz sentenced Reginald Lloyd, age 40, of Washington, D.C., today to 16 years in prison followed by five years of supervised release for armed robbery, using and brandishing a gun during a crime of violence, and being a felon in possession of a firearm.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Steven L. Gerido of the Bureau of Alcohol, Tobacco, Firearms and Explosives - Baltimore Field Division; and Chief Mark A. Magaw of the Prince George’s County Police Department.
According to the evidence presented at Lloyd’s three day trial, on September 7, 2011, Lloyd and an unidentified accomplice entered a store in Forestville, Maryland, wearing black masks and carrying guns. Lloyd ordered an employee at gunpoint to open the cash register, while the accomplice ordered two other employees at gunpoint to the back of the store. Lloyd stole approximately $964 from the cash register, then ordered the employee to open the safe below the cash register. When the employee replied that he could not open the safe, Lloyd pistol-whipped the employee, grabbed the keys and attempted to open the safe himself. Unsuccessful in opening the safe, Lloyd struck the employee in the face with the gun, then sprayed the employee in the face with mace. Lloyd and his accomplice then left the store.
Witnesses testified that during the robbery, one of the employees called 911, described the getaway vehicle and requested an ambulance for the employee who had been injured. About ten minutes later, Prince George’s County Police officers saw a vehicle matching the description of the getaway car and conducted a traffic stop. As the officers got out of their car, the vehicle took off speeding down Marlboro Pike toward Washington, D.C. The pavement was wet and the vehicle hydroplaned, crossing the road into a gas station. A woman was standing next to her car pumping gas, when the vehicle crashed into the back of her car. When police arrived, Lloyd, the only occupant of the vehicle, was arrested. Police recovered a loaded .45 caliber handgun, pepper spray, approximately $867 in cash and receipts from the store, a black mask and a black and white bandana. The black mask contained a DNA profile consistent with Lloyd’s.
United States Attorney Rod J. Rosenstein commended the ATF and Prince George’s County Police Department for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys Steven E. Swaney and Christen A. Sproule, who prosecuted the case.
Statement of United States Attorney Peter Smith Concerning the Decision of the United States Court of Appeals for the Third Circuit in the Case OfRead the Press Release
United States Of America V. Anthony Munchak And Robert CordaroToday the Court of Appeals affirmed the convictions of former Lackawanna County Commissioners Cordaro and Munchak. The Court also upheld the enhancement of Munchak’s sentence for obstruction of justice. The Court rejected Cordaro’s arguments that the indictment failed to allege essential elements and that the government had conducted an improper cross examination of the defendant at trial.
The government’s position is and always has been, that the only improper conduct here was that of Cordaro and Munchak while they were public officials.The Court remanded a portion of the case to the District Court to resolve a question concerning part of the restitution Cordaro was ordered to pay. We are reviewing the Court’s Order to determine the government’s response.
The investigation and prosecution were conducted with skill and dedication by a team of agents from the FBI and IRS-Criminal Investigations and Assistant United States Attorneys Lorna Graham, Bruce Brandler and William Houser, assisted by Criminal Division Chief Christian Fisanick and Criminal Division Appeals Chief Stephen Cerutti.
Overall the verdict of the jury, the sentences and the judgments of the Courts constitute a strong condemnation of the corrupt abuse of power by Munchak and Cordaro. Hopefully they will serve as a strong and lasting warning to others.
****Starr County Man Sentenced for East Texas Drug TraffickingRead the Press Release
Department of Justice
Office of Public AffairsBEAUMONT, Texas – A 42-year-old Roma, Texas, man has been sentenced to federal prison for drug trafficking violations in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
David Bazan pleaded guilty on Feb. 12, 2013, to conspiracy to possess with intent to distribute five kilograms or more of cocaine and was sentenced to 360 months in federal prison today by U.S. District Judge Thad Heartfield. The court also imposed a $25 million money judgment against Bazan.
According to information presented in court, on Jan. 25, 2011, law enforcement officers stopped a vehicle on IH-10 in Beaumont pursuant to undercover information indicating the vehicle would be trafficking drugs. A search of the vehicle revealed 31.91 kilograms of cocaine. Further investigation revealed David Bazan, leader of the Bazan drug trafficking organization, was responsible for the shipment. Bazan received thousands of kilograms of cocaine from leaders of the Gulf Cartel for the past decade and then distributed those drugs throughout the United States. Bazan was indicted by a federal grand jury on Dec. 14, 2011.
This case was investigated by the Drug Enforcement Administration, the Internal Revenue Service, the Beaumont Police Department, and the Jefferson County Sheriff’s Office, and prosecuted by Assistant U.S. Attorney John Craft.
St. Francis Man Sentenced for Failure to Register as A Sex OffenderRead the Press Release
United States Attorney Brendan V. Johnson announced that a St. Francis, South Dakota man convicted of Failure to Register as a Sex Offender was sentenced on May 29, 2013 by U.S. District Judge Roberto A. Lange.
Patrick Black Spotted Horse, age 23, was sentenced to 10 months in custody, 5 years of supervised release, and $100 to the Federal Crime Victims Fund.
Black Spotted Horse was indicted by a federal grand jury on January 16, 2013 and pled guilty to the charge on April 16, 2013.
The Defendant was convicted of Sexual Abuse of a Minor on December 7, 2009. The Court sentenced Black Spotted Horse to 40 months’ imprisonment, 5 years of supervised release and also ordered that he must register as a sex offender. On October 12, 2012, Black Spotted Horse began his term of supervised release but eventually absconded from a treatment facility and did not properly register as a sex offender. On December 22, 2012, Black Spotted Horse was arrested on the Rosebud Sioux Indian Reservation.
The investigation was conducted by the U.S. Marshal Service. The case was prosecuted by Assistant U.S. Attorney Tim Maher.
Black Spotted Horse was remanded to the custody of the U.S. Marshal.
South Dakota Is A National Leader in Indian Country WorkRead the Press Release
United States Attorney Brendan V. Johnson announced the release of a Department of Justice report to Congress entitled Indian Country Investigations and Prosecutions. The report focuses on law enforcement efforts in Indian country and was a requirement of the Tribal Law and Order Act of 2010.
The report indicated that South Dakota is a national leader in the work performed in Indian country. U.S. Attorney Johnson served as Chairman of the Justice Department’s Native American Issues Subcommittee from 2009-2013. In that capacity, he testified before the Senate Committee on Indian Affairs on Sept. 22, 2011 at a hearing entitled “Tribal Law and Order Act One Year Later: Have We Improved Public Safety and Justice Throughout Indian Country?” Johnson highlighted the progress being made in South Dakota and nationwide, and those efforts are reflected in the report.
On the national level, the report shows a 54 percent increase in Indian Country criminal prosecutions from 2009-2012. During that same time period, the Justice Department saw a significant reduction in the number of criminal cases from Indian Country that were declined. The most common reasons for declination were insufficient evidence and referral to another prosecuting authority.
South Dakota has been a national leader in increased prosecutions and decreased declinations. Over the last four years, the U.S. Attorney’s Office in South Dakota has seen an increase in prosecutions of 131% on Rosebud and 82% on Pine Ridge, South Dakota’s largest reservations. The report also reveals that the number of declined cases in South Dakota fell from 164 in CY 2011 to 114 in CY 2012.
U.S. Attorney Johnson attributes much of the success to a new relationship with tribes in South Dakota and across the country. “Four years ago many were skeptical that we could significantly improve public safety on South Dakota’s reservations. Those people were wrong. This report to Congress reveals that we have significantly increased prosecutions and are working closely with tribal and federal law enforcement to make tribal communities a safer place to live. There is still much work to be done, but there is no question we have found the right path and are making progress,” said Johnson.
Since 2009, the U.S. Attorney’s Office in South Dakota has undertaken an unprecedented effort to improve public safety on the reservations. The implementation of the Community Prosecution Strategy (CPS) in 2010 was initiated by U.S. Attorney Johnson as an effort to help restore public safety in South Dakota tribal communities. The CPS remains a work in progress, and some of the highlights to date include:
• The Community Prosecution Pilot Program implemented at Pine Ridge has proven to be successful in a number of areas. Through committed outreach efforts, such as public meetings and forums to address public safety matters, relationships have improved with the Oglala Sioux Tribe (OST) Attorney General’s Office, tribal officials, and law enforcement. As a direct result of the pilot program, the U.S. Attorney’s office communicates regularly with the OST Attorney General’s Office concerning prosecutions of mutual interest, and how best to prosecute offenders over whom both entities have jurisdiction.
• Successfully wrote and submitted a proposal for the creation of a special domestic violence prosecutor on the Standing Rock Reservation. A landmark Memorandum of Understanding was signed July 10, 2012 between the Standing Rock Sioux Tribe, the U.S. Attorney’s Office in South Dakota, and the U.S. Attorney’s Office in North Dakota. The agreement authorized the hiring of a Special Assistant United States Attorney to pursue prosecutions in federal and tribal courts that involve violence against women cases, including domestic violence, dating violence, sexual assault, and stalking. The new prosecutor has been appointed and will have authority to pursue those cases in federal court in both South Dakota and North Dakota, and also the Standing Rock tribal court.
• Initiated a program to encourage tribal, state, and local law enforcement officers to obtain Special Law Enforcement Commissions (SLECs). Through an agreement with the BIA, the U.S. Attorney’s Office has the primary responsibility for providing the SLEC training. Law enforcement members possessing SLECs have broader authority to enforce federal criminal laws in tribal communities. An Assistant U.S. Attorney from South Dakota was selected to be part of the National SLEC Task Force that was charged with rewriting the SLEC curriculum and format of the examination. The exam is given around the country, and the Task Force worked in conjunction with the BIA on this project.
• Continues a strong relationship with BIA leadership. In early 2012, U.S. Attorney Johnson spent two days in Washington working with the law enforcement director of the BIA to discuss staffing and personnel issues. It was also announced in 2012 that the Rosebud Reservation was selected as the second reservation in South Dakota to receive the High Priority Performance Goals Program through the BIA. This program has increased the number of law enforcement officers on the Rosebud Reservation.
• Active participation in the monthly Multi-Disciplinary Team (MDT) meetings. The MDT meetings provide a roundtable format for BIA and tribal law enforcement, mental health counselors, IHS nurse practitioners, social services, FBI, and Tribal CASA, to discuss violence against children investigations. These meetings serve as an opportunity to identify challenges and discuss improvement efforts.
• Host an annual conference on victim advocacy. The two-state conference is co-sponsored by the District of South Dakota and District of North Dakota; the BIA Office of Justice Services; and the Department of Justice Office for Victims of Crime. The purpose of the conference is to provide culturally appropriate training to anyone who works with Native American victims of crime. *Due to sequestration conference not authorized to be held in 2013.
• U.S. Attorney Johnson has been actively involved with the South Dakota Domestic Violence Coordinating Committee (SDDVCC). The SDDVCC was formed in 2012 and is an organization led by the South Dakota Coalition Ending Domestic & Sexual Violence and the South Dakota Network Against Family Violence and Sexual Assault. The organization includes law enforcement leaders from the state, federal, and tribal levels and is designed to protect and represent the interests of survivors of domestic and sexual assault. The SDVCC selected Johnson as their Prosecutor of the Year for 2013.
The Indian Country Investigations and Prosecutions report shows a new era of partnership between the federal government and American Indian tribes, including an unprecedented level of collaboration with tribal law enforcement. The increase in collaboration and communication strengthens the bond of trust between federal and tribal investigators, prosecutors, and other personnel in both federal and tribal criminal justice systems.
Read the entire report at www.justice.gov/tribal.
Read about the Justice Department’s efforts to increase public safety in Indian County at http://www.justice.gov/tribal/accomplishments.html
Smith County Woman Arrested for Student Aid Fraud and Witness TamperingRead the Press Release
Department of Justice
Office of Public AffairsTYLER, Texas – A 31-year-old Flint, Texas woman has been arrested on federal charges in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
Mindy Ritch was charged in a complaint on May 30, 2013, with student financial aid fraud and tampering with a witness. Ritch went before U.S. Magistrate Judge Judith K. Guthrie for an initial appearance today.
If convicted, Ritch faces up to five years in federal prison for the fraud charge and up to 20 years for tampering with a witness.This case is being investigated by the U.S. Department of Education – Office of Inspector General, U.S. Secret Service, U.S. Postal Inspection Service, and the Tyler Junior College Police Department. Assistant U.S. Attorney Nathaniel C. Kummerfeld is prosecuting this case.
A grand jury indictment is not evidence of guilt. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Seattle Man Prosecuted for “Tuba Man” Killing as a Juvenile, Gets Six Year Prison Term for Illegal Gun PossessionRead the Press Release
A Seattle man, who was prosecuted as a juvenile in connection with the high profile beating death of a street musician, was sentenced today in U.S. District Court in Seattle to six years in prison and three years of supervised release for being a felon in possession of a firearm, announced U.S. Attorney Jenny A. Durkan. WILLIAM CHAMBERS, 20, also known as ‘Billy Chambers’, was arrested in October 2012, barely two weeks after he had been released from serving a 21 month prison sentence for attempted assault. CHAMBERS was arrested following a car prowl in Burien, Washington, where he and his co-conspirators stole a Bushmaster assault rifle. CHAMBERS, who is prohibited from possessing firearms, had the gun in the trunk of his car when he was stopped. At sentencing U.S. District Judge Robert S. Lasnik urged CHAMBERS to use the prison time and the federal supervision to turn his life around and be an example for other young people. “This is your last best chance. Please take advantage of it,” the Judge said.
“We must work to end the street culture that thrives on guns. Too many lives have been harmed,” said U.S. Attorney Jenny A. Durkan. “Getting guns out of the hands of felons and other prohibited persons is a top priority for our office.”
According to records filed in the case, CHAMBERS pleaded guilty to being a felon in possession of a firearm on February 28, 2013. He is prohibited from possessing firearms because of previous convictions as a juvenile and an adult. CHAMBERS was convicted of manslaughter as a juvenile for the October 2008 death of Edward McMichael known as the “Tuba Man”. Chambers was sentenced to 15 to 36 weeks of incarceration. In 2010, CHAMBERS was sentenced to eight months in prison for robbing a man in downtown Seattle using a fake gun. In October 2011, CHAMBERS intentionally ran another driver off the road and pleaded guilty to attempted assault and hit and run. He was sentenced to 21 months in prison and was released just 15 days before he was arrested in this case for illegal firearms possession. CHAMBERS was taken into custody about 20 minutes after a neighbor reported seeing the men stealing an item from the trunk of a car in her neighbor’s driveway. CHAMBERS admitted to police that the house and car were targeted because he believed the residents had guns. The Bushmaster .223 caliber assault rifle that CHAMBERS possessed had an extended magazine containing 30 rounds and is a particularly deadly and dangerous weapon. The firearm had been reported stolen in a burglary in July 2010.
The case was investigated by the King County Sheriff’s Department and was prosecuted by Special Assistant United States Attorney Stephen Hobbs. Mr. Hobbs is a Senior Deputy King County Prosecutor specially designated to prosecute firearms cases in federal court.
Rosebud Man Charged with Abusive Sexual ContactRead the Press Release
United States Attorney Brendan V. Johnson announced that Sonny Gray Grass, age 52, of Rosebud, South Dakota appeared before U.S. District Judge Roberto A. Lange on May 29, 2013 and pled guilty to Abusive Sexual Contact.
The maximum penalty upon conviction is life in custody, a $250,000 fine, or both; life of supervised release; and $100 to the Federal Crime Victims Fund.
The conviction stems from an incident that took place between April 24th and April 28th, 2008 when Gray Grass had sexual contact with the minor victim.
The investigation was conducted by the Federal Bureau of Investigation and the Rosebud Sioux Tribe Law Enforcement Services. The case is being prosecuted by Assistant U.S. Attorney Marie H. Ruettgers.
A presentence investigation was ordered and a sentencing date was set for August 19, 2013. The defendant was remanded to the custody of the U.S. Marshal pending sentencing.
Rockville, Md., Property Purchased with Nigerian Corruption Proceeds Forfeited Through Justice Department’s Kleptocracy InitiativeRead the Press Release
A forfeiture judgment was executed today against real property with an estimated value of more than $700,000 in Rockville, Md., that had been purchased with corruption proceeds traceable to Diepreye Solomon Peter Alamieyeseigha, a former Governor of Bayelsa State, Nigeria, announced Acting Assistant Attorney General Mythili Raman of the Criminal Division and U.S. Immigration and Customs Enforcement (ICE) Director John Morton.
“Foreign officials who think they can use the United States as a stash-house are sorely mistaken,” said Acting Assistant Attorney General Raman. “Through the Kleptocracy Initiative, we stand with the victims of foreign official corruption as we seek to forfeit the proceeds of corrupt leaders’ illegal activities.”
“This investigation was initiated by ICE’s Homeland Security Investigations (HSI) Asset Identification & Removal Group (AIRG) in Baltimore, in an effort to recover the criminal proceeds from Diepreye Solomon Peter Alamieyeseigha’s assets, whose shell companies were convicted of money laundering offenses in Nigeria,” said ICE Director Morton. “HSI’s AIRG will continue working with the Department of Justice to seek to recover illicit proceeds gained through foreign corruption and to protect the U.S. financial system from being utilized by criminals.”
Alamieyeseigha, aka DSP, was the elected governor of oil-producing Bayelsa State in Nigeria from 1999 until his impeachment in 2005. As alleged in the U.S. forfeiture complaint, DSP’s official salary for this entire period was approximately $81,000, and his declared income from all sources during the period was approximately $248,000. Nevertheless, while governor, DSP accumulated millions of dollars’ worth of property located around the world through corruption and other illegal activities. The complaint alleges that DSP acquired the Rockville property during his first term as governor of Bayelsa State with funds obtained through corruption, abuse of office, money laundering and other violations of Nigerian and U.S. law. Title to the property was transferred to Solomon & Peters, Ltd., a shell corporation controlled by DSP and on whose behalf the former governor entered a guilty plea to money laundering in Nigeria in 2007.
On May 24, 2013, U.S. District Court Judge Roger W. Titus of the District of Maryland granted a motion for a default judgment filed by the Criminal Division’s Asset Forfeiture and Money Laundering Section and issued a final decree of forfeiture. The order extinguishes all prior title and authorizes forfeiture to the United States of the private residence located in Rockville, Maryland, estimated to be worth more than $700,000 and allows the United States to liquidate the property in accordance with federal law. In a related action in the District of Massachusetts, the Department of Justice and ICE Homeland Security Investigations successfully forfeited approximately $400,000 from an investment account traceable to DSP.
Both actions were brought under the Justice Department’s Kleptocracy Asset Recovery Initiative announced by the Attorney General in 2010. Through this initiative, the Department of Justice, along with federal law enforcement agencies, seeks to identify and forfeit the proceeds of foreign official corruption, and where possible and appropriate return those corruption proceeds for the benefit of the people of the nations harmed by the corruption.
The case was investigated by the HSI’s Asset Identification & Removal Group (AIRG) in Baltimore. The case was prosecuted by Assistant Deputy Chief Daniel H. Claman and Trial Attorney Tracy Mann of the Criminal Division’s Asset Forfeiture and Money Laundering Section, with assistance from the U.S. Attorney’s Office of the District of Maryland.
Individuals with information about possible proceeds of foreign corruption in the United States, or funds laundered through institutions in the United States, should contact Homeland Security Investigations or other federal law enforcement, or send an email to [email protected].
Real Estate Developer Pleads Guilty to Mortgage Fraud ConspiracyRead the Press Release
TAMPA, FL - United States Attorney Robert E. O'Neill announces that Joseph Daniele (42, Tampa) pleaded guilty this week to conspiracy to commit wire fraud affecting a financial institution. Daniele faces a maximum penalty of thirty years in federal prison. Daniele’s three co-conspirators, also real estate professionals, previously pleaded guilty for their roles in the conspiracy. Misty Rudd, a realtor, Michael Jordan, a mortgage broker, and Adam Ort, the owner of a title company owner, are currently awaiting sentencing.
According to the plea agreements, Daniele moved from Ohio to Florida in 2002. Directly and through a series of companies, he bought numerous houses, primarily in Pinellas County, for the purpose of “flipping” them. “Flipping” is generally a practice whereby property is bought and then sold for more than the amount for which the purchaser acquired it. In total, the conspiracy involved approximately 400 mortgage transactions.
Rudd helped Daniele to flip the properties by soliciting investors to buy the houses. As a part of the scheme, Rudd and others claimed that these "investments" would require no money from investors to buy the houses. In reality, to obtain these loans, the lenders required the borrowers to contribute money toward the transactions. In the documents submitted to the lenders, the banks were told that the borrowers were paying the down payments and funds-to-close. In fact, the conspirators concealed the actual source of the money from the banks. In some cases, the borrower's contribution was netted out of the transaction. That is, it was taken out of the money the seller (Daniele or his companies) was supposed to receive. This required the direct involvement of the title agents closing the loans. Most of the loans were closed by title companies run by Ort. In other cases, the borrower's contribution was paid by a check from one of Daniele's companies. Frequently, the borrower's contribution came from a company called Premiere Financial, a company run by Ort and Jordan. Premiere Financial would fund the borrower’s contribution and then, on the seller’s side of the transaction, the money would be paid back to Premiere Financial, along with a small fee. This concealed the fact, from lenders, that the borrower had not made a financial contribution to the deal.
In addition, mortgage brokers, including Jordan, facilitated the scheme by adding false information to the mortgage loan applications. Applications were falsified to make the borrowers appear to have the financial ability to make the down payment and qualify for loans which they could not really afford.
This case was investigated by FBI. It is being prosecuted by Assistant United States Attorney Thomas N. Palermo.
President Obama Adds International Drug “Kingpin” to OFAC ListRead the Press Release
BOSTON - Today President Barack Obama identified Mihael Karner as a Specially Designated Narcotics Trafficker, or “drug kingpin,” for purposes of sanctions under the Foreign Narcotics Kingpin Designation Act (the “Kingpin Act”).
This announcement, along with the identification of five other foreign persons and organizations, is only the 15th Presidential determination under the Kingpin Act since June 2000. Karner’s designation is based on evidence that, since 2000, Karner has run a global distribution network for anabolic steroids that has sold millions of steroid dosages worldwide, including to thousands of customers in the United States.
The Kingpin Act is administered by the U.S. Department of Treasury’s Office of Foreign Asset Control (“OFAC”). It is designed to bring financial pressure against high-level foreign drug traffickers, terrorists, and related organizations by blocking their interactions with the U.S. financial system. Other recent Kingpin Act designations have included Mexican cartel members and related corporate entities, and persons and entities related to Syria and Iran. Today’s action against Karner generally bars U.S. persons and companies from conducting financial or commercial transactions with Karner, and freezes any assets Karner may have that are within U.S. jurisdiction.
The six drug kingpin designations announced today were recommended to the President through an interagency consultation process among the Departments of Treasury, State, Defense, Justice, and the Central Intelligence Agency. Although not required by the Kingpin statute, the Department of Homeland Security and the Office of the Director of National Intelligence were also consulted.
Karner, a Slovenian national, and two co-conspirators, Alenka Karner and Matevz Karner, were indicted in March 2010 on charges of conspiracy to launder money, conspiracy to distribute controlled substances, and conspiracy to import controlled substances to the United States. Based on allegations in the unsealed indictment and in extradition paperwork submitted to the Federal Republic of Austria in June 2011, beginning in about 2000, Karner set up a network of hundreds of web sites and numerous corporate shells to facilitate selling anabolic steroids to customers in any country. Karner sourced precursor chemicals for his products from Southeast Asia, among other places, after which the steroids were assembled and packaged in a factory in Eastern Europe. As internet orders were received, Karner shipped the steroids in bulk to “remailers” in the United Kingdom, Italy, Greece and elsewhere, who repackaged the drugs as individual orders and mailed them out. Through this method Karner was able to disguise the true geographical origins of the drugs.
It is alleged that since 2000, through the use of a constantly shifting network of web sites, Karner shipped tens of thousands of anabolic steroid dosages to thousands of customers in the United States, including to customers in Massachusetts. Nationwide, these customers came from all walks of life, including amateur athletes, weight lifters, people recovering from injuries, doctors and others.
Karner allegedly laundered the proceeds of his steroid trafficking using bank accounts in Austria, Bulgaria and elsewhere, and through the use of internet-based payment processors in France, Iceland, Germany and Luxembourg. Karner and his co-conspirators hid the true ownership of his web sites and accounts by setting up corporate shells in Gibraltar, Panama, Liechtenstein, Dominica, Hong Kong, the Seychelles, and elsewhere. Much of the activity was run out of a post office box based in Klagenfurt, Austria, near the Slovenian border. According to the indictment, Karner has received over $50,000,000 in illicit proceeds from his trafficking activities. Karner has also used drug trafficking profits to buy, among other things, a ski lodge in the Austrian Alps, beachfront lots in Croatia, substantial real property in Ljubljana, Slovenia, and a yacht moored on the Croatian coast.
Karner is presently a fugitive. Based on a formal extradition request from the United States, in December 2011 Karner was arrested at his ski lodge in Austria and detained by Austrian authorities. In March 2012, U.S. Marshals were sent to Vienna, Austria, to take custody of Karner and a co-conspirator with whom he had been arrested, but at the last moment an Austrian court stayed extradition. After being allowed to pay 1,250,000 Euros (about $1,630,000) in bail, Karner fled across the border to Slovenia, where he now resides and continues to operate.
Karner has been the subject of prior European investigations, including efforts undertaken by the Italian Carabinieri in 2003 and the Austrian State Police in 2005.
If convicted on the U.S. charges, Karner faces up to 20 years in prison on the charge of conspiring to launder money, to be followed by three years of supervised release and a fine of $500,000 or twice the value of the property involved in the offense. On the charges of conspiracy to distribute and import controlled substances, Karner faces up to 10 years in prison, up to three years of supervised release and a fine of up to $500,000.United States Attorney Carmen M. Ortiz, John J. Arvanitis, Special Agent in Charge of the Drug Enforcement Administration - Boston Field Office and John Gibbons, U.S. Marshal for the District of Massachusetts made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Andrew E. Lelling of Ortiz’s Economic Crimes Unit.
The details contained in the indictment and extradition paperwork are allegations. The defendant is presumed innocent unless proven guilty beyond a reasonable doubt in a court of law.
Pine Ridge Woman Indicted for Stealing CashRead the Press Release
United States Attorney Brendan V. Johnson announced that a Pine Ridge, South Dakota woman has been indicted by a federal grand jury for allegedly stealing over $1,000 in cash from another female at Pine Ridge on January 1, 2012.
Rose Cottier, age 58, was indicted by a federal grand jury on May 21, 2013 for larceny. Cottier appeared before U.S. Magistrate Judge Veronica L. Duffy on May 24, 2013, and pled not guilty to the indictment.
The maximum penalty upon conviction is 5 years of imprisonment and a $250,000 fine. The charge is merely an accusation and Cottier is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Bureau of Indian Affairs, Office of Justice Services, and the Oglala Sioux Tribe Department of Public Safety. Assistant U.S. Attorney Wayne Venhuizen is prosecuting the case.
Cottier was released on bond pending trial. A trial date has been set for July 30, 2013.
Pine Ridge Woman Charged with Second Degree MurderRead the Press Release
United States Attorney Brendan V. Johnson announced that a Pine Ridge, South Dakota woman has been indicted by a federal grand jury for allegedly killing her grandson at Pine Ridge on April 29, 2013.
Cheryl Jealous of Him, age 50, was indicted by a federal grand jury on May 21, 2013 for second degree murder and felony child abuse and neglect. Jealous of Him appeared before U.S. Magistrate Judge Veronica L. Duffy on May 24, 2013 and pled not guilty to the indictment.
The maximum penalty upon conviction is life imprisonment and a $250,000 fine. The charges are merely accusations and Jealous of Him is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Federal Bureau of Investigation, the Bureau of Indian Affairs, Office of Justice Services, and the Oglala Sioux Tribe Department of Public Safety. Assistant U.S. Attorney Sarah Collins is prosecuting the case.
Jealous of Him was remanded to the custody of the U.S. Marshal. A trial date has been set for July 30, 2013.
Pine Ridge Man Indicted for AssaultRead the Press Release
United States Attorney Brendan V. Johnson announced that a Pine Ridge, South Dakota man has been indicted by a federal grand jury for allegedly using a wooden board to assault a female at Pine Ridge on March 14, 2013.
Gordon Pourier, age 18, was indicted by a federal grand jury on May 21, 2013 for assault with a dangerous weapon and assault resulting in serious bodily injury. Pourier appeared before U.S. Magistrate Judge Veronica L. Duffy on May 24, 2013 and pled not guilty to the indictment.
The maximum penalty upon conviction is 10 years of imprisonment and a $250,000 fine. The charges are merely accusations and Pourier is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Bureau of Indian Affairs, Office of Justice Services, and the Oglala Sioux Tribe Department of Public Safety. Assistant U.S. Attorney Wayne Venhuizen is prosecuting the case.
Pourier was remanded to the custody of the U.S. Marshal. A trial date has been set for July 30, 2013.
Parkland Memorial Hospital Pays Nearly $1.4 Million to Resolve Allegations It Submitted Improper Physical Medicine and Rehabilitation ClaimsRead the Press Release
DALLAS - Dallas County Hospital District d/b/a Parkland Health and Hospital System (Parkland) settled allegations it violated the civil False Claims Act and Texas Medicaid Fraud Prevention Act, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas. The U.S. and Texas contend Parkland caused unallowable and “upcoded” physician consultations and other services to be submitted to Medicare and Texas Medicaid for certain physical medicine and rehabilitation (PMR) related items and services between 2007 and 2011. Parkland fully cooperated with the investigation, and by settling, did not admit any wrong-doing or liability.
When patients are admitted to a hospital, specialists, like PMR physicians, often consult with the attending physician on a variety of issues. At teaching hospitals, faculty physicians may bill for the supervision of residents, if present for the key or critical portions of the services. In both cases such consults, if medically appropriate, are reimbursed by Medicare and Texas Medicaid. The United States and Texas based their investigation on allegations that Parkland submitted or caused the submission of false and fraudulent PMR claims, and false statements in support of such claims, to the Medicare and Texas Medicaid programs between 2007 and 2011 for: (1) consultations that were never requested by a patient’s treating physicians and/or lacked medical necessity; (2) services related to the inappropriate supervision of residents and/or lacked medical necessity; (3) up-coded and inflated evaluation and management services; (4) inpatient rehabilitation stays that did not meet billing requirements; and (5) other unreimbursable costs.
The U.S. and Texas initiated the investigation in response to a March 2010 whistleblower suit brought by Lien Kyri, M.D., a former resident in the PM&R department, UTSW Medical Center at Dallas. Under the False Claims Act and Texas Medicaid Fraud Prevention Act, private individuals may bring actions alleging fraud on behalf of the U.S. and Texas and collect a share of any proceeds recovered by the suit. Dr. Kyri may receive up to 30% of the recovery under the settlement. U.S. Attorney Saldaña praised the efforts of the Office of Inspector General of the U.S. Department of Health and Human Services (OIG) and the Texas Medicaid Fraud Control Unit. U.S. Attorney Saldaña also noted “this settlement demonstrates the Northern District of Texas, and the entire Department, remain committed to investigating allegations of health care fraud, regardless of provider or affiliation.” “Any time false claims are submitted for payment, the nation’s taxpayers and health insurance programs suffer,” said Special Agent in Charge Mike Fields of the OIG’s Dallas Regional Office. “Our agents will continue working to identify providers who manipulate the system to grab precious Medicare and Medicaid dollars to which they are not entitled.”
In addition to paying nearly $1.4 million, Parkland agreed to enter into with the OIG a five-year corporate integrity agreement (CIA) in exchange for release of the agency’s administrative remedies. The CIA requires Parkland to enact and report to the OIG its compliance with billing rules, but also will monitor Parkland to ensure patients receive appropriate care.
The case was handled by Assistant U.S. Attorney Sean McKenna and Assistant Texas Attorney General Paula Juba. The case is captioned United States ex rel. Kyri v. Dallas County Hospital District d/b/a Parkland Health and Hospital System, et al.; Civil Action No. 3:10-cv-0487-D (N.D. Tex.).
Owners of Murfreesboro Ambulance Service Found Guilty of 42 Counts of Conspiracy, Medicare Fraud, Wire Fraud, and Aggravated Identity TheftRead the Press Release
Woody Medlock, Sr., 69, and his wife, Kathy Medlock, 57, of Murfreesboro, Tennessee, former owners of Murfreesboro Ambulance Service, were convicted by a jury on charges of conspiracy, Medicare fraud, wire fraud, and aggravated identity theft, announced David Rivera, Acting U.S. Attorney for the Middle District of Tennessee. A third defendant, Woody (“Bubba”) Medlock, Jr., was acquitted of similar charges.
According to the evidence presented at trial and the indictment, from approximately 1996 through September 2008, the Medlocks conspired and engaged in a scheme to defraud Medicare and Medicaid by submitting claims for payment for the transportation of patients who were not qualified to receive ambulance transportation. Evidence at trial showed that the Medlocks submitted or caused to be submitted, through Murfreesboro Ambulance Service, fraudulent claims totaling more than $1,600,000, to Medicare and Medicaid for reimbursement of ambulance transports of patients to and from dialysis treatments.
Testimony at trial further showed that these fraudulent claims falsely represented that patients were on stretchers when the patients were actually transported in the front seat of the ambulance or in the captain’s chair/jump seat in the back of the ambulance and were not on stretchers. Fraudulent claims also stated that patients were transported individually when in fact, two patients had been transported simultaneously in one ambulance.
Both defendants were convicted of two counts of aggravated identity theft for using the names and Medicare numbers of patients without lawful authority in submitting claims. Kathy Medlock was also convicted of an additional count of aggravated identity theft for use of a doctor’s name in forging and submitting multiple medical necessity forms as part of a Medicare audit.
“This case represents another example that this office will hold individuals accountable when they steal from health care programs intended to help the elderly and the most needy citizens,” said David Rivera, Acting United States Attorney. “This office, along with our law enforcement partners at the Department of Health and Human Services, the Federal Bureau of Investigation, and the Tennessee Bureau of Investigation, will relentlessly pursue those who choose to defraud the Medicare and Medicaid programs.”
“The Medlocks were running a tax-payer funded taxi service disguised as an ambulance company,” said Derrick L. Jackson, Special Agent in Charge at the U.S. Department of Health and Human Services, Office of Inspector General. “The flow of Medicare money has been shut off to this husband and wife team.”
"Today's verdict validates the FBI's commitment to investigate those who take advantage of our health care system and defraud the American public," said A. Todd McCall, Special Agent in Charge of the Federal Bureau of Investigation Memphis Division. "We will continue to work tirelessly with our law enforcement partners and the U.S. Attorney's Office to investigate and prosecute those who commit health care fraud."
The Medlocks face up to 20 years in prison, plus an additional mandatory two years, for aggravated identity theft and a $250,000 fine. Any sentence following conviction will be imposed by the Court after consideration of the U.S. Sentencing Guidelines and applicable federal statutes.This case was investigated by the United States Department of Health and Human Services - Office of Inspector General, the FBI and the Tennessee Bureau of Investigation. The United States is represented by Assistant United States Attorney Sandra G. Moses, Special Assistant United States Attorney James S. Seaman, and Assistant United States Attorney Christopher C. Sabis.
North Dakota Man Pleads Guilty to Assault with A Dangerous WeaponRead the Press Release
United States Attorney Brendan V. Johnson announced that Andrew Kills Crow, age 21, of New Town, North Dakota appeared before U.S. District Judge Charles B. Kornmann on May 28, 2013 and pled guilty to Counts 15 and 17 of the Superseding Indictment that each charged him with Assault with a Dangerous Weapon.
For each count, the maximum penalty upon conviction is 10 years of imprisonment, a $250,000 fine, or both; 3 years of supervised release and an additional 2 years of supervised release upon revocation; and a mandatory $100 special assessment to the Federal Crime Victims Fund. Restitution may also be ordered.
The charges stem from an incident in late December 2011, wherein a trailer in Mobridge was burglarized and a large quantity of cocaine and methamphetamine and several thousand dollars in cash was stolen. Several burglary “suspects” were taken to a remote location by Kills Crow and others. Once there, the victims were assaulted with shod feet and hit with firearms. The victims denied knowing anything about the thefts. The real burglars were later apprehended.
The investigation was conducted by the Northern Plains Safe Trails Drug Enforcement Task Force. Assistant U.S. Attorney Kathryn N. Rich is prosecuting the case.
Kills Crow was remanded to the custody of the U.S. Marshals Service pending sentencing, which has not been set.
North Carolina Businessman Pleads Guilty to Tax FraudRead the Press Release
William Robert Hupman Jr., pleaded guilty today to corruptly endeavoring to obstruct or impede the due administration of the internal revenue laws, the Justice Department and the Internal Revenue Service (IRS) announced today.
According to court documents, Hupman managed and controlled Security Concepts LLC, a security alarm company based in Mebane, N.C. Instead of receiving a salary from Security Concepts, Hupman received income by using a Security Concepts debit card to pay his expenses. Despite receiving over $770,000 in such fees between 2007 and 2011, Hupman has not filed an individual income tax return since tax year 2006.
In addition to his failure to comply with his personal income tax responsibilities, Hupman also failed to comply with his employment tax responsibilities at Security Concepts. As the person who managed and controlled Security Concepts, Hupman was responsible for withholding employment taxes and paying them over to the IRS on a periodic basis. Despite the fact that employment taxes were withheld from the wages of Security Concepts employees, Security Concepts has not paid employment taxes and filed the required tax form since the third quarter of 2009. Hupman neither paid over employment taxes nor filed the required tax form for the fourth quarter of 2009 and each of the quarters in 2010 and 2011. He also has not paid the federal unemployment taxes owed or filed the required tax form for years 2009, 2010, or 2011.
Hupman faces a maximum of three years in prison, one year of supervised release and a maximum fine of $250,000. Sentencing is scheduled for Aug. 29, 2013.Kathryn Keneally, Assistant Attorney General of the Justice Department?s Tax Division, thanked Special Agents of IRS - Criminal Investigation, who investigated the case, and Tax Division Trial Attorneys Todd Ellinwood and Kevin Lombardi for prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found at www.justice.gov/tax.North Carolina Businessman Pleads Guilty to Tax FraudRead the Press Release
WASHINGTON –William Robert Hupman Jr., pleaded guilty today to corruptly endeavoring to obstruct or impede the due administration of the internal revenue laws, the Justice Department and the Internal Revenue Service (IRS) announced today.
According to court documents, Hupman managed and controlled Security Concepts LLC, a security alarm company based in Mebane, N.C. Instead of receiving a salary from Security Concepts, Hupman received income by using a Security Concepts debit card to pay his expenses. Despite receiving over $770,000 in such fees between 2007 and 2011, Hupman has not filed an individual income tax return since tax year 2006.
In addition to his failure to comply with his personal income tax responsibilities, Hupman also failed to comply with his employment tax responsibilities at Security Concepts. As the person who managed and controlled Security Concepts, Hupman was responsible for withholding employment taxes and paying them over to the IRS on a periodic basis. Despite the fact that employment taxes were withheald from the wages of Security Concepts employees, Security Concepts has not paid employment taxes and filed the required tax form since the third quarter of 2009. Hupman neither paid over employment taxes nor filed the required tax form for the fourth quarter of 2009 and each of the quarters in 2010 and 2011. He also has not paid the federal unemployment taxes owed or filed the required tax form for years 2009, 2010, or 2011.
Hupman faces a maximum of three years in prison, one year of supervised release and a maximum fine of $250,000. Sentencing is scheduled for Aug. 29, 2013.
Kathryn Keneally, Assistant Attorney General of the Justice Department’s Tax Division, thanked Special Agents of IRS - Criminal Investigation, who investigated the case, and Tax Division Trial Attorneys Todd Ellinwood and Kevin Lombardi for prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found at www.justice.gov/tax.
New Mexico Man Indicted for Failure to Pay Child SupportRead the Press Release
United States Attorney Brendan V. Johnson announced that an Albuquerque, New Mexico man has been indicted by a federal grand jury for Failure to Pay Legal Child Support.
Clarence H. Cadotte, age 36, was indicted by a federal grand jury on March 6, 2013 for failing to pay $27,109.00 in past due child support. He appeared before U.S. Magistrate Judge William D. Gerdes on May 23, 2013 and pled not guilty to the indictment.
The maximum penalty upon conviction is two years imprisonment; a $250,000.00 fine; one year supervised release; one additional year upon revocation; a $100.00 assessment fee to the Federal Crime Victims Fund; and child support restitution amount owing at the time of sentencing.
The charge is merely an accusation and Cadotte is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Department of Health and Human Services, Office of Inspector General. Assistant U.S. Attorney Thomas J. Wright is prosecuting the case.
Cadotte was released on bond pending trial. A trial date has been set for July 30, 2013.
Mount Vernon Woman Sentenced for Theft of Government FundsRead the Press Release
A Mount Vernon woman, Mary Barnett-Johnson, 51, convicted of Theft of Government Funds in February of this year, was sentenced in United States District Court on May 31, 2013, to five years of probation and was also ordered to pay $85,353.00 in restitution, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today.
Barnett-Johnson was charged in an indictment on December 11, 2012, by a Federal Grand Jury sitting in East St. Louis, Illinois. At her plea, on February 22, 2013, Barnett- Johnson admitted that she had fraudulently continued to receive and use her deceased mother’s social security benefits knowing that she was not entitled to receive or use those funds for her own personal benefit. Barnett-Johnson admitted that she received $85,353.00 in social security payments from August of 2003 through September of 2011 that were intended for her mother, who died in 2003.
The investigation was conducted by the Social Security Administration’s Office of Inspector General and is being prosecuted by Assistant United States Attorney Ranley R. Killian.
Money Courier for Large Guatemalan Drug Ring Sentenced to over 13 Years in PrisonRead the Press Release
Greenbelt, Maryland - U.S. District Judge Alexander Williams, Jr. sentenced Nery Gustavo Ramos-Duarte, age 52, of Chiquimula, Guatemala, today to 160 months in prison followed by five years of supervised release for conspiring to distribute and import five kilograms or more of cocaine, commit money laundering, and smuggle bulk cash.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Thomas J. Kelly of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office; Special Agent in Charge Karl C. Colder of the Drug Enforcement Administration - Washington Field Division; and Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation.
According to evidence presented at the five day trial, Duarte was a money courier for a large international organization that imported cocaine into the United States from Guatemala and smuggled the proceeds back to Guatemala. Duarte was a trusted member of the organization who could speak directly with its leader in Guatemala, and helped the leader collect drug debts.
On September 25, 2003, Duarte was stopped while driving in Arkansas. Law enforcement seized $1,168,000 in cash wrapped in bundles from a secret compartment in his vehicle.
In 2005, Duarte picked up drug money from a co-conspirator in Connecticut to take to the ringleader in Guatemala. Later in 2005, Duarte took a Mercedes-Benz from another member of the conspiracy as payment for a drug debt to the ringleader.
Trial testimony showed that Duarte was responsible for the distribution of over 150 kilograms of cocaine in the course of the conspiracy.
United States Attorney Rod J. Rosenstein commended the IRS-CI, DEA, and FBI for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys Peter M. Nothstein, Andrea L. Smith, and Bonnie S. Greenberg, who prosecuted case.
Mexican Woman Sentenced for Bank Larceny and Mexican Man Sentenced for Bank Larceny and Illegal Reentry After DeportationRead the Press Release
United States Attorney Brendan V. Johnson announced that a man and a woman from Mexico convicted of Bank Larceny were sentenced on May 29, 2013 by U.S. District Judge Roberto A. Lange.
Ismael Espinoza Ortiz, a/k/a Misael Sereseres Ortega, age 38, was sentenced to 84 months of imprisonment and a $100 special assessment to the Federal Crime Victims Fund.
Alejandra Corral Madrid, age 26, was sentenced to time served and a $100 special assessment to the Federal Crime Victims Fund. They were also ordered to pay $2,070 in restitution to BankWest, as well as restitution to several other victims in other pending criminal matters as part of the plea agreement.
Ortiz and Madrid were indicted by a federal grand jury on November 15, 2012. The charge stems from an incident on November 5, 2012 wherein Ortiz and Madrid entered the BankWest branch office in Pierre, and Ortiz handed the bank teller small bills and requested the teller change the bills into larger ones. Madrid stood next to Ortiz at the teller window and witnessed the interaction. While the teller walked several feet from her station to use a bill counting machine, Ortiz reached his left hand under the glass and stole property and money belonging BankWest in the amount of $2,070. After taking the property and money belonging to BankWest, Ortiz and Madrid exited the bank and fled Pierre. They were arrested later that day in Campbell County, South Dakota.
Ortiz was also sentenced to 84 months of imprisonment and $100 to the Federal Crime Victims Fund for his conviction of Illegal Reentry after Deportation. That sentence is to be served concurrently with his above sentence.
That charge stems from incidents wherein Ortiz had previously been ordered to deport from the United States on two prior occasions. At no time since his initial deportation in 1996, has Ortiz requested or been granted permission to reenter the United States.
The investigation was conducted by the Federal Bureau of Investigation and the Immigration and Customs Enforcement. Assistant U.S. Attorney Meghan N. Dilges prosecuted the case.
Ortiz and Madrid were immediately turned over to the custody of the U.S. Marshals Service.
McLaughlin Man Pleads Guilty to Assault with Intent to Commit MurderRead the Press Release
United States Attorney Brendan V. Johnson announced that Ross Dean Farrell, age 21, of McLaughlin, South Dakota appeared before U.S. District Judge Charles B. Kornmann on May 28, 2013 and pled guilty to Count I of the Indictment that charged him with Assault With Intent to Commit Murder.
The maximum penalty upon conviction is 20 years of imprisonment, a $250,000 fine, or both, 3 years of supervised release and an additional 2 years of supervised release upon revocation. Restitution and a $100 special assessment to the Federal Crime Victims Fund may also be ordered.
The charge stems from an incident wherein the Defendant was socializing with the victim and others in the basement of his home. At some point, the victim went to sleep on a mattress on the floor. The Defendant, outraged by a perceived slight he had received from either the victim or another person, found the victim and pulled him off the mattress onto the cement floor. The Defendant then proceeded to repeatedly stomp the victim on the head and face, with shod feet.
At the time of the attack, the Defendant intended to kill the victim, as shown by the severity of the attack. As a result of the attack, the victim was required to be hospitalized, had numerous emergency surgeries, and was placed into a medically induced coma. Injuries sustained include severe head trauma.
The investigation was conducted by the Bureau of Indian Affairs, Standing Rock Agency and Assistant U.S. Attorney Troy R. Morley is prosecuting the case.
Farrell was remanded to the custody of the U.S. Marshals Service pending sentencing, which has been set for September 9, 2013.
Lower Brule Man Sentenced for Assaulting, Resisting and Impeding A Federal OfficerRead the Press Release
United States Attorney Brendan V. Johnson announced that a Lower Brule, South Dakota man convicted of Assaulting, Resisting and Impeding a Federal Officer was sentenced on May 29, 2013 by U.S. District Judge Roberto A. Lange.
Elmer LaRoche, age 26, was sentenced to 12 months and 1 day of imprisonment, 2 years of supervised release, and a $100 special assessment to the Federal Crime Victims Fund.
LaRoche was indicted by a federal grand jury on December 11, 2012. The charge stems from an incident on or about the 1st day of November, 2012, wherein LaRoche was at a home in Lower Brule, intoxicated, and refused to leave. A tribal court order had been posted on the door regarding no intoxicated persons were to enter the house. An officer was dispatched to the residence, and during the arrest LaRoche resisted and struggled with the officer causing physical contact. LaRoche struck the officer in the head with a metal can.
The investigation was conducted by the Bureau of Indian Affairs and Assistant U.S. Attorney Meghan N. Dilges prosecuted the case.
LaRoche was immediately turned over to the custody of the U.S. Marshals Service.
Louisville Residents Charged in Multiple Count Indictment in Drug Trafficking ConspiracyRead the Press Release
LOUISVILLE, Ky. – Members of an alleged drug trafficking organization operating out of Jefferson County, Kentucky were arraigned in U.S. District court this week on multiple charges including distribution of cocaine and heroin, announced David J. Hale, United States Attorney for the Western District of Kentucky.
According to the May 22, 2013, grand jury indictment, unsealed yesterday, 14 defendants from the Louisville area participated in a conspiracy beginning in April, 2011, lasting until April 30, 2013, to possess and distribute large quantities of cocaine and heroin. Defendant Anthony D. Smith a/k/a “Blackjack” had previously been convicted of a felony in Jefferson County Circuit Court. Smith, Charles A. Reed and Eric Dryden were previously charged in U.S. District Court on May 1, 2013 in a criminal felony complaint. According to an affidavit attached to the complaint, the defendants operated their alleged drug trafficking operation from 2415 Ralph Avenue and 10112 McNeely Lake Drive, both located in Jefferson County, Kentucky. On April 30, 2013, Smith is alleged to have provided law enforcement with 10 kilograms of cocaine in a controlled purchase. A search warrant executed at the two residences resulted in the seizure of six handguns, cocaine, drug paraphernalia, and U.S. currency.
Arrested and facing various charges in the 16-count indictment were Smith, Reed, Dryden, Monica J. Smith, William R. Smith a/k/a “Ray Ray”, Kendrick C. Brown a/k/a “Stacks”, Joyce Vickie Smith, Joseph Whitfield, Clark Brown, Kinte Brown, Deon Crumes, Mike Miller, Melvin Young a/k/a “Dead”, and Andre L. Oneal.
If convicted at trial, defendants face penalties from no less than five years in federal prison per count and up to 20 years per count, three years and up to ten years of supervised release per count, and fines ranging from $10,000 to $1,000,000 per count. The defendants are in the custody of the U.S. Marshals Service.
This case is being prosecuted by J. Scott Davis and is being investigated by the Federal Bureau of Investigation (FBI), the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the Drug Enforcement Administration (DEA), Louisville Metro Police Department, and Shively Police Department.
The indictment of a person by a Grand Jury is an accusation
only and that person is presumed innocent until and unless
proven guilty.Long Island Man Sentenced to More Than 9 Years on Federal Child Pornography ChargesRead the Press Release
Orlando, Florida - U.S. District Judge Charlene Edwards Honeywell yesterday sentenced Andrew Beasley (30, Patchogue, NY) to 9 years and 7 months in federal prison for receiving and possessing child pornography. He is also required to register as a sex offender and serve a 10-year term of supervision, following his release from prison. The court also ordered Beasley to forfeit his computer equipment. He pleaded guilty on January 29, 2013.
According to court documents, Beasley used a Peer to Peer directory to download images and movies of children being sexually abused and exploited. Law enforcement officers conducted a forensic examination of his computers and hard drives and found that Beasley amassed more than 6,400 images and 265 videos depicting children being sexually abused and exploited. Some of these images also contained bestiality and bondage.
This case was investigated by the Brevard County Sheriff’s Office and U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI). It was prosecuted by Special Assistant United States Attorney Myrna Amelia Mesa.
This is another case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc for more information about internet safety education.
Leicester Man Pleads Guilty to Child Exploitation ChargesRead the Press Release
BOSTON – A Leicester man was convicted today of eight child exploitation charges.
Jason Clark, 31, Leicester, pleaded guilty before U.S. District Judge Richard G. Stearns to five counts of sexual exploitation of a child, and one count each of distribution of child pornography, transportation of child pornography, and possession of child pornography.
Between October 2010 and October 2011, Clark used a six-year-old minor to produce child pornography, disseminated child pornography on the internet by trading it with other child pornography collectors and by posting it to websites, and possessed child pornography.
Sentencing is scheduled for August 30, 2013. According to the plea agreement, Clark faces between 15 and 30 years in prison, to be followed by 10 years of supervised release and up to a $2 million fine.
United States Attorney Carmen M. Ortiz; Mark G. Mastroianni, Hampden County District Attorney; and Colonel Timothy P. Alben, Superintendent of the Massachusetts State Police made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Alex J. Grant of Ortiz’s Springfield Branch Unit.
Last Defendant Sentenced for Transporting 5,615.5 Pounds of Marijuana from Edinburg, Texas to Louisville, KentuckyRead the Press Release
LOUISVILLE, Ky. The last defendant charged in a conspiracy to sell marijuana transported from Edinburg, Texas to Jefferson County, Kentucky was sentenced in United States District Court this week by Senior Judge Charles R. Simpson III, to 70 months in prison followed by 5 years of supervised release announced David J. Hale, United States Attorney for the Western District of Kentucky.
Luis Salcido-Guzman, was among nine defendants indicted by a federal grand jury meeting in Louisville, on January 19, 2011. Five of the defendants received prison sentences for their role in the conspiracy. Two pleaded guilty to the charges, three were convicted by a federal jury in United States District Court and charges against four defendants were dismissed.
According to information presented in court, around December 15, 2010, the defendants conspired with one another to deliver, by tractor trailer, 5,615.5 pounds of marijuana from Edinburg, Texas, to a warehouse at 1214 Outer Loop, located in Louisville, Kentucky.
Defendant Heraclio Ramos-Gonzalez pleaded guilty and was sentenced on February 2, 2013, to 65 months in prison followed by three years of supervised release. Heriberto Salcedo-Diaz was convicted at trial of counts one and two and was sentenced on January 23, 2013, to 151 months in prison. Defendant Juan Landeros-Sandoval was convicted at trial on counts one and three and was sentenced on January 23, 2013 to 240 months in prison followed by ten years of supervised release. Alfredo Carrillo-Alvardo, a/k/a Alfredo Carrillo-Alvarado was convicted at trial on counts one and three and was sentenced on January 23, 2013 to 121 months in prison and was the only United States citizen.
This case was prosecuted by Assistant United States Attorney Robert B. Bonar and was investigated by Louisville Metro Police Department.
Justice Department Signs Agreement with the City of West Columbia, S.C. to Ensure Civic Access for People with DisabilitiesRead the Press Release
The Justice Department today announced an agreement with the City of West Columbia, S.C., to improve access to all aspects of civic life for persons with disabilities. The agreement was reached under Project Civic Access (PCA), the department’s wide-ranging initiative to ensure that cities, towns and counties throughout the country comply with the Americans with Disabilities Act (ADA).
“The ADA is a passport to our nation’s cities for people with disabilities. This agreement ensures that all people have access to West Columbia’s parks and other programs, services and activities,” said Eve L. Hill, Senior Counselor to the Assistant Attorney General of the Civil Rights Division. “Access to our cities is a basic civil right and the ADA is shaping the way our country and its people think inclusively about themselves and people with disabilities.”
As part of the PCA initiative, department staff, including investigators and architects, survey local government facilities, services and programs across the country. The purpose of the surveying is to identify modifications needed in order for a city to comply with the ADA requirements. The agreements address the steps each community must take to improve access.
Under the agreement announced today, West Columbia will take important steps to improve access for people with disabilities, such as:
• Physically modifying facilities surveyed by the department so that parking, routes into buildings, entrances, service areas and counters, restrooms, public telephones and drinking fountains are accessible to people with disabilities;
• Surveying the city’s other facilities and programs and making modifications where necessary to achieve compliance with ADA requirements;
• Complying with the ADA’s architectural accessibility requirements when the city builds or alters its buildings and outdoor facilities;
• Posting, publishing and distributing notices to inform members of the public of the provisions of the ADA and their applicability to the city’s programs, services and activities;
• Officially recognizing Relay South Carolina telephone service as a key means of communicating with individuals who are deaf, are hard-of-hearing, or have speech impairments and training staff in using the relay service for telephone communications;
• Developing a method for providing information for interested persons with disabilities concerning the existence and location of the city’s accessible services, activities and programs;
• Posting an online policy that its web pages will be accessible, creating a process for implementation and ensuring that all new and modified web pages are accessible; and
• Implementing a comprehensive plan to improve the accessibility of sidewalks and curb cuts throughout the city.Today’s agreement was reached under Title II of the ADA, which prohibits discrimination against individuals with disabilities by state and local governments. The agreement requires the remediation actions to be completed within 3 years. The department will actively monitor compliance with the agreement throughout this timeframe.
People interested in finding out more about the ADA, today’s agreement with the city of West Columbia, the Project Civic Access initiative, or the ADA Best Practices Tool Kit for state and local governments may access the ADA Web page at www.ada.gov or call the toll-free ADA Information Line at (800) 514-0301 or (800) 514-0383 (TTY).Related Materials:
Settlement Agreement
Justice Department Reaches Agreement with California <br /> Water Agency on Bailout Under the Voting Rights ActRead the Press Release
The Justice Department announced that it has reached an agreement with the Yuba County Water Agency, a special district in California, that, if approved by the court, will allow for the district to bail out from its status as a “covered jurisdiction” under the special provisions of the Voting Rights Act, and thereby exempt the agency from the preclearance requirements of Section 5 of the Voting Rights Act. The agency covers Yuba County, Calif., which is a jurisdiction subject to Section 5. The agreement is in the form of a consent decree filed today in the U.S. District Court for the District of Columbia.
Under Section 5 of the Voting Rights Act, certain covered jurisdictions, determined according to Section 4 of the act, are required to seek preclearance for any changes in voting qualifications, standards, practices or procedures from the U.S. District Court for the District of Columbia, or from the Attorney General, prior to their implementation. Section 4 of the act provides that a covered jurisdiction may seek to “bail out,” or remove itself from such coverage, and therefore be exempted from the preclearance requirements, by seeking a declaratory judgment before a three-judge panel in U.S. District Court for the District of Columbia. A bailout judgment can be issued only if the court determines that the jurisdiction meets certain eligibility requirements for bailout contained in the statute, including a 10-year record of nondiscrimination in voting-related actions. The act also provides that the Attorney General can consent to entry of a judgment of bailout only if, based upon investigation, the Attorney General is satisfied that the jurisdiction meets the eligibility requirements.
The Yuba County Water Agency filed its bailout action in the U.S. District Court for the District of Columbia on March 19, 2013. Agency officials had contacted the Attorney General prior to filing its action, indicating that the agency was interested in seeking a bailout. The agency provided the Justice Department with substantial information, and the department conducted an investigation to determine the agency’s eligibility. Based on that investigation, the department is satisfied that the agency meets the Voting Rights Act’s requirements for bailout.
“In this case, the department carefully evaluated the information provided by the agency, and conducted its own investigation, which has satisfied us that the agency is eligible for bailout,” said Deputy Assistant Attorney General for the Civil Rights Division Matthew Colangelo. “We appreciate the agency’s cooperation in the resolution of this matter.”The consent decree details the legal and factual basis for a bailout determination and, if approved, will grant the agency’s request. The court will retain jurisdiction of the action for 10 years and can reopen the action upon the motion of the attorney general or any aggrieved person alleging conduct by the agency that would have originally precluded the agency from bailing out if it had occurred during the 10 year period preceding entry of the consent decree.
Information about bailout, the Voting Rights Act and other federal voting laws is available on the Department of Justice website at www.justice.gov/crt/voting. Complaints may be reported to the Voting Section of the Justice Department’s Civil Rights Division at 1-800-253-3931.Justice Department Finds Pennsylvania State Prison’s <br /> Use of Solitary Confinement Violates Rights of Prisoners Under the Constitution and Americans with Disabilities ActRead the Press Release
Today, the Justice Department issued a findings letter detailing the results of its investigation into the use of solitary confinement on prisoners with serious mental illness at the Pennsylvania State Correctional Institution at Cresson in Cambria County, Pa. The department found that Cresson’s use of long-term and extreme forms of solitary confinement on prisoners with serious mental illness, many of whom also have intellectual disabilities, violates their rights under the Eighth Amendment to the U.S. Constitution and under the Americans with Disabilities Act (ADA).
Though the Pennsylvania Department of Corrections now intends to close Cresson, many of the prison’s problematic policies and practices relating to the use of solitary confinement appear indicative of what is occurring statewide. For this reason, in its findings letter, the department also notified the governor that the department is expanding the investigation to include all prisons in the Pennsylvania Department of Corrections to determine whether these other prisons also engage in the unlawful use of prolonged and extreme isolation of prisoners with serious mental illness and intellectual disabilities. Secretary John Wetzel and his staff at the Department of Corrections have fully cooperated during the course of this investigation and the department looks forward to working collaboratively with them in the coming months.
In addition to finding that Cresson routinely resorts to locking prisoners with serious mental illness in their cells for 22 to 23 hours a day, for months or even years at a time, the department also found that Cresson often denies these prisoners basic necessities and subjects them to harsh and punitive conditions, including excessive uses of force. The department concluded that Cresson’s misuse of solitary confinement on prisoners with serious mental illness leads to serious harms, including mental decompensation, clinical depression, psychosis, self-mutilation, and suicide.
The department also found that Cresson came to rely on solitary confinement as a means of warehousing many of its prisoners with serious mental illness because of deficiencies relating to its mental health program. Those systemic deficiencies include a disorganized and fragmented mental health program, marginalization of mental health staff, and disciplinary procedures that result in the punishment of disability-related behaviors and the placement of actively psychotic prisoners into harsh solitary confinement. The department also found an oversight system that does not analyze suicides and other critical data.
“We found that Cresson often permitted its prisoners with serious mental illness or intellectual disabilities to simply languish, decompensate, and harm themselves in solitary confinement for months or years on end under harsh conditions in violation of the Constitution,” said Roy L. Austin Jr., Deputy Assistant Attorney General for the Civil Rights Division. “These practices have serious public safety consequences because many of these individuals are returned to the community. We look forward to continuing to work collaboratively with the Department of Corrections during the expanded investigation to bring an end to these practices.”
“The findings in this case are disturbing and expose a serious disregard for the health and safety of prisoners with serious mental illness,” said David J. Hickton, U.S. Attorney for the Western District of Pennsylvania. “We are dedicated to ensuring that prisoners throughout the Commonwealth are treated humanely and receive the appropriate mental health treatment in an effort to enhance their successful reintegration into the community upon release.”
The department initiated this investigation in December 2011 under the Civil Rights of Institutionalized Persons Act (CRIPA), which prohibits a pattern or practice of deprivation of constitutional rights of individuals confined to state or local government-run correctional facilities. During the course of the investigation, the department made additional findings under the ADA. The investigation also provided information to the department that justified an expanded investigation under CRIPA and the ADA.
The expanded investigation will focus on allegations that prisons throughout the Pennsylvania Department of Corrections subject prisoners with serious mental illness and intellectual disabilities to prolonged periods of isolation under conditions similar to those found at Cresson. Through this investigation the department will seek to determine whether the other prisons in the Commonwealth engage in a pattern or practice of the inappropriate use of prolonged isolation on prisoners with serious mental illness and intellectual disabilities in violation of the Constitution and federal law.
This investigation was conducted by attorneys with the Special Litigation Section of the Justice Department’s Civil Rights Division and the U.S. Attorney’s Office for the Western District of Pennsylvania. The Civil Rights Division and the U.S. Attorney’s Office will be partnering again to conduct the expanded statewide investigation. Additional information about the Civil Rights Division is available on its website at www.justice.gov/crt.
Jury Finds Ferriday Drug Traffickers Guilty of Meth Conspiracy ChargesRead the Press Release
ALEXANDRIA, La. – United States Attorney Stephanie A. Finley announced today that a jury found Maurice T. Smith, 33, and Chavo T. Thomas, 30, both of Ferriday, La., guilty for conspiracy to possess with the intent to distribute methamphetamine. United States Chief District Judge Dee D. Drell presided over the trial. Both defendants face mandatory life sentences.
The trial started Tuesday and ended today with the jury returning the guilty verdict after deliberating for an hour and 20 minutes. The jury found that Smith and Thomas conspired with others to travel to California in October 2011 to buy methamphetamine. The defendants were arrested in Brookhaven, Miss., while traveling on a train with 2 pounds of pure methamphetamine intended to be sold in Ferriday.
“We commend the work of the law enforcement agencies who investigated this case,” Finley stated. “They were able to stop this shipment of illegal drugs before it could be sold in the Western District of Louisiana. I also want to thank the prosecutors who tried this case. My office will continue to prosecute these types of cases to the fullest extent of the law.”Smith and Thomas were arrested as part of an Organized Crime Drug Enforcement Task Force (OCDETF) Operation “Delta Blues” investigation. The FBI-Central Louisiana Safe Streets Task Force, which is composed of the Louisiana State Police, Louisiana Department of Probation and Parole, Rapides Parish Sheriff’s Office and the Alexandria Police Department, participated in the investigation. The U.S. Marshals and the Concordia Parish Sheriff’s Office also participated in the investigation. The Southwest Mississippi Narcotics Task Force, Brookhaven (Mississippi) Police Department and the Lincoln County (Mississippi) Sheriff’s Office assisted in the defendants’ arrest.
The OCDETF program is a joint federal, state and local cooperative approach to combat drug trafficking and is the nation’s primary tool for disrupting and dismantling major drug trafficking organizations, targeting national and regional level drug trafficking organizations, and coordinating the necessary law enforcement entities and resources to disrupt or dismantle the targeted criminal organization and seize their assets.
Assistant U.S. Attorneys James G. Cowles Jr. and Seth Reeg prosecuted the case.Indictment Charges Five Men with Kidnapping Meriden Residents, Robbing Fairfield Jewelry StoreRead the Press Release
Deirdre M. Daly, Acting United States Attorney for the District of Connecticut, today announced that a federal grand jury sitting in Bridgeport has returned a 13-count indictment charging TIMOTHY FORBES, 31, of Allentown, Pa.; WILLIAM DAVIS, 25, of Allentown; JEFFREY HOUSTON, 26, of Allentown; CHRISTOPHER GAY, 27, of Bronx, N.Y., and KASAM HENNIX, 39, of Easton, Pa. with kidnapping four Meriden residents and robbing a Fairfield jewelry store of millions of dollars in merchandise in April. The indictment was returned yesterday.
As alleged in previously filed court documents, at approximately 9:00 p.m. on April 11, at least four men wearing masks and gloves, two of whom were armed with handguns, broke into an apartment on Gravel Street in Meriden, Conn., bound four victims with duct tape and covered their heads with pillowcases, towels and jackets. Three of the perpetrators then forced two of the victims into a victim’s vehicle and drove to Lenox Jewelers in Fairfield, Conn., where the two victims worked. At the store, the perpetrators stole jewelry, watches and loose diamonds valued at between four and five million dollars. They then fled in the victim’s car, leaving the two victims bound inside the store.
The indictment charges each of the five defendants with one count of conspiracy to commit kidnapping, four counts of kidnapping, one count of conspiracy to interfere with commerce through robbery, two counts of interference with commerce through robbery, two counts of interference with commerce by threats and violence, and three counts of use of a firearm during and in relation to a crime of violence.
DAVIS, HOUSTON, GAY and HENNIX have been detained since their arrests on May 22, and FORBES has been detained since his arrest on state charges earlier this month.
The indictment also seeks the forfeiture of gemstones, jewelry, watches and more than $127,000 in cash seized from DAVIS, GAY and HOUSTON on May 22, as well as HOUSTON’s vehicle.
If convicted, the defendants face a maximum term of imprisonment of life on each of the kidnapping charges, a maximum term of imprisonment of 20 years on each of the interference with commerce charges, and a consecutive term of imprisonment of seven years on each charge of using a firearm during the crime.
The case has been assigned to United States District Judge Robert N. Chatigny in Hartford.
Acting U.S. Attorney Daly stressed that an indictment is not evidence of guilt. Charges are only allegations, and each defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This matter is being investigated by the United States Marshals Service, Federal Bureau of Investigation, Fairfield Police Department and Meriden Police Department. Acting U.S. Attorney Daly also acknowledged the assistance provided by the U.S. Marshals Service and FBI in New York and Pennsylvania; the York, Allentown and Bethlehem Police Departments in Pennsylvania, and the U.S. Attorney’s Office for the Eastern District of Pennsylvania.
This case is being prosecuted by Assistant United States Attorneys Tracy Lee Dayton and Douglas P. Morabito.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
[email protected]Idaho Man Sentenced to 8 Years in Prison for Transporting Child Pornography Aboard A Cruise ShipRead the Press Release
Orlando, Florida - U.S. District Judge John Antoon, II yesterday sentenced Gary Lee Reed (47, Blackfoot, Idaho), to 8 years in federal prison for transporting child pornography. Reed pleaded guilty to the charge on February 28, 2013.
According to court documents, Customs and Border Protection (CBP) Officers discovered thousands of images and videos of child pornography on Reed's laptop computer during a secondary inspection of his luggage. At the time of the inspection, Reed was returning to Port Canaveral, Florida, aboard a cruise ship that had recently sailed to the Bahamas.
This case was investigated by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and U.S. Customs and Border Protection. It was prosecuted by Assistant United States Attorney Daniel W. Eckhart.
It is another case brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Harlan, Iowa Resident Sentenced to 120 Months for Manufacturing MethamphetamineRead the Press Release
COUNCIL BLUFFS, IA - On May 30, 2013, Jon Monte Rodacker, a 48 year old resident of Harlan, Iowa, was sentenced by United States District Court Senior Judge Robert Pratt to 120 months imprisonment for manufacturing methamphetamine. Judge Pratt also ordered Rodacker to serve a five year term of supervised release following incarceration. On September 5, 2012, Rodacker pled guilty to a charge of manufacturing 50 grams or more of methamphetamine. The charge was the result of an investigation conducted by several law enforcement agencies into the manufacturing of methamphetamine in rural areas in and around Shelby County, Iowa. The investigation revealed that Rodacker was actively producing methamphetamine from as early as July of 2009, up to March 6, 2012, using pseudoephedrine pills purchased in Iowa and Nebraska.
The investigation was conducted by the Shelby County Sheriff’s Office, the Harlan, Iowa Police Department, Iowa State Fire Marshal, the Iowa Division of Narcotics Enforcement and Bureau of Alcohol, Tobacco, Firearms and Explosives. The case was prosecuted by the U. S. Attorney’s Office for the Southern District of Iowa.
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Former Wichita Investment Advisor Sentenced on Wire Fraud ChargesRead the Press Release
WICHITA, KAN. – A former Wichita investment advisor has been sentenced to 63 months in federal prison after pleading guilty to stealing money he pretended to be investing for clients, U.S. Attorney Barry Grissom said today. He was ordered to pay more than $2.2 million in restitution.
Eric Burns, 44, Wichita, Kan., pleaded guilty to five counts of wire fraud. In his plea, he admitted he arranged for electronic transactions to take place as part of a scheme to defraud clients.
The transactions included the following:
The transfer of $70,000 on Aug. 20, 2008, from Boston to New York City.
The transfer of $25,000 on July 7, 2010, from Boston to Wichita.
The transfer of $12,000 on Aug. 13, 2010, from Boston to Wichita.
The transfer of $150,000 on Aug. 26, 2010, from Boston to Wichita.
The transfer of $130,000 on June 7, 2011, from Boston to Wichita.On Nov. 8, 2011, the Office of the Kansas Securities Commissioner suspended Burns’ registration as an investment advisor after receiving a complaint that he misappropriated client funds.
Grissom commended the FBI, the Office of the Kansas Securities Commissioner, Assistant U.S. Attorney Debra Barnett and Assistant U.S. Attorney Tanya Treadway for their work on the case.
Former Student Pleads Guilty to Making False 911 Call Concerning Alleged Gunman at UVA-WiseJanuary 23, 2013, Phone Call Led to Campus Lock DownRead the Press Release
ABINGDON, VIRGINIA – Bryant Alexander Hairston, 20, of Martinsville, Virginia, pled guilty today, in the United States District Court for the Western District of Virginia, in Abingdon, to one count of making false statements in a matter within the jurisdiction of the Executive Branch of the United States and one count of making false statements under oath.
On January 23, 2013, Hairston told a 911 dispatcher there was a gunman on the campus of the University of Virginia’s College at Wise (“UVa-Wise”) who was trying to get into one of the dormitories. Hairston told the dispatcher that the man had a pistol. The campus was placed on lock down and law enforcement officers from various agencies responded to the scene. Armed officers went door to door through the dormitory searching for the alleged gunman. While the search was ongoing, Hairston made statements indicating he was happy that he had saved the lives of his fellow students. Officers became suspicious of Hairston and questioned him. After some time, Hairston admitted he had made up the story about a gunman because he wanted to look like a hero.
“When Mr. Hairston falsely claimed to have seen a gunman on the campus of UVa-Wise, he instigated an immediate emergency response and caused significant stress among his fellow students and their families,” United States Attorney Timothy J. Heaphy said today. “Upon hearing of his despicable lie, students barricaded themselves in rooms and parents worried their children would become victims of another mass shooting. Hairston created a highly charged and dangerous situation for law enforcement and others. His false report reignited the fear that lingers in our district, which has experienced the awful reality of campus violence in our recent past. Our aggressive pursuit of this case demonstrates our desire to hold accountable those who make false reports to law enforcement."
United States District Judge James P. Jones scheduled the sentencing hearing for September 9, 2013, at the Federal Courthouse in Abingdon. As part of the plea agreement reached in the case, Hairston will make restitution of over $4,000.00 (four thousand dollars) to reimburse the various law enforcement and counseling agencies for their costs in responding to the 911 call and dealing with traumatized students.
The investigation of the case was conducted by the police departments of UVa-Wise, Pound, and Wise; the Wise County Sheriff’s Office; the Virginia State Police; and the Bristol Office of the Federal Bureau of Investigation. Assistant United States Attorney Randy Ramseyer is prosecuting the case for the United States.
Former President of Southbury Synagogue Admits Embezzling More Than $500,000Read the Press Release
Deirdre M. Daly, Acting United States Attorney for the District of Connecticut, announced that JODI CHURCHILL, 45, of Orange, waived her right to indictment and pleaded guilty today before United States Magistrate Judge Donna F. Martinez in Hartford to one count of mail fraud stemming from her embezzlement of more than $500,000 from a Southbury synagogue.
According to court documents and statements made in court, beginning in November 2010, while serving as the vice president of the Beth El Synagogue in Southbury, CHURCHILL began embezzling funds from the synagogue. In June 2011, CHURCHILL became president of the synagogue and used her new position to open a checking account and a money market account in the name of the synagogue. CHURCHILL was the only signatory on the accounts. Initially, CHURCHILL opened the accounts using the synagogue’s business address in Southbury, but in 2011, she directed the bank to change the mailing address on the accounts to her residence in Orange. Thereafter, all bank statements for accounts were mailed to CHURCHILL’s home address.
Between June 2011 and December 2011, CHURCHILL deposited bank checks totaling more than $300,000 into the accounts. The checks reflected the proceeds of certificates of deposit held by the synagogue that had matured at other financial institutions.
The investigation has revealed that CHURCHILL made more than 60 unauthorized ATM and over-the-counter withdrawals of synagogue funds in amounts ranging from $200 to $5,000. CHURCHILL used embezzled funds to pay school-related expenses for her children, expenses for leasing a horse used by one of her children, vehicle expenses, airline tickets and hotel expenses for personal travel. She also provided stolen funds to a relative.
During the course of this scheme, CHURCHILL embezzled more than $500,000 in synagogue funds.
CHURCHILL is scheduled to be sentenced by United States District Judge Robert N. Chatigny on September 5, 2013, at which time CHURCHILL faces a maximum term of imprisonment of 20 years.
This matter is being investigated by the United States Secret Service and is being prosecuted by Assistant United States Attorney Christopher W. Schmeisser.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
[email protected]Former Pediatric Nurse Sentenced to Seven Years in Prison for Distribution and Receipt of Child PornographyRead the Press Release
A former pediatric intensive care nurse from Portland’s Oregon Health & Science University, Doernbecher Children’s Hospital, was sentenced today in U.S. District Court in Tacoma to seven years in prison and ten years of supervised release for distribution and receipt of child pornography, and possession of child pornography, announced U.S. Attorney Jenny A. Durkan. BRYAN W. CORBITT, 44, of Washougal, Washington, was arrested on February 16, 2012, following an investigation by ICE’s Homeland Security Investigations (HSI). CORBITT had been sharing sexually explicit images of children over the Internet via a file-sharing program on his computer. Two of the people he chose to share images with were undercover law enforcement agents, each of whom observed thousands of images of child pornography available for sharing on CORBITT’s computer. At sentencing U.S. District Judge Ronald B. Leighton said, “These are serious crimes. These children are victimized, and in your spare time, you persisted in victimizing them in your own way. That’s reprehensible.”
“This defendant betrayed the trust of the medical profession and the children and families he cared for in the pediatric intensive care unit,” said U.S. Attorney Jenny A. Durkan. “He tried unsuccessfully to hide his crime from law enforcement and from his own family. It is fully appropriate that as part of his supervised release he will have to undergo sex offender treatment.”
According to records filed in the case, CORBITT had used “wiping” software on his computer in an effort to hide his interest in child pornography. Nevertheless, a forensic examination of the computer found 65 image files of child pornography from the allocated space of Defendant’s computer, and another 400 or so images of child pornography from the unallocated space. The forensic examination also revealed that CORBITT used a separate media storage device to store additional images and videos of child pornography. That device has not been located. CORBITT had images of young boys with catheters inserted into their penises mixed in among his collection of child pornography, images that were clearly taken in a hospital setting like the one where he worked for ten years. Many of the parents who contacted the case agent after news of CORBITT’s arrest were grieving their children’s deaths; many were parents of severely disabled children. To learn that CORBITT had been arrested and charged with crimes involving the sexual exploitation of innocent victims caused additional anguish.
“It's always disheartening when we arrest someone who was in a position of trust for possession of child pornography,” said Brad Bench, special agent in charge of HSI Seattle. “This case is particularly egregious because the defendant, as a pediatric nurse, had a fundamental duty to protect children, but instead he chose to exploit them through his consumption of Internet child pornography. Every day, HSI special agents work tirelessly to seek justice on behalf of child sex abuse victims by tracking down consumers and producers of child pornography.”
The case was investigated by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI). The case is being prosecuted by Assistant United States Attorney Marci Ellsworth.
Former Narcotics Task Force Officer Charged with Embezzling Seized MoneyRead the Press Release
BIRMINGHAM – Federal prosecutors have charged the former commander of the West Alabama Narcotics Task Force with stealing at least $125,000 from suspected drug proceeds seized by the multi-agency task force, announced U.S. Attorney Joyce White Vance and FBI Special Agent in Charge Richard D. Schwein Jr.
The U.S. Attorney’s Office late Thursday filed a one-count information in U.S. District Court charging JEFFREY LYNN SNYDER, 55, of Carrollton, with the theft from a program that received more than $10,000 in federal benefits within a one-year period. The U.S. Attorney’s Office also filed a plea agreement with Snyder in which he agrees to enter a guilty plea to the charge. According to the plea agreement, Snyder embezzled the money between June 2010 and June 2012, when he left the task force.
“Most law-enforcement officers serve their communities bravely and honorably each and every day,” Vance said. “Unfortunately, this defendant violated his oath, the law and the public trust he had been granted. That cannot be tolerated. The public must be able to trust its law enforcement officers.”
“Mr. Snyder tarnished the badge he wore and violated the trust of the people of West Alabama,” Schwein said. “This case demonstrates our commitment to enforce the law and hold individuals accountable, regardless of rank, position, or status. Fortunately, this is an isolated incident, and we should recognize the efforts of law enforcement officers throughout the region who continue to risk their lives on a daily basis so that the public can be safe,” he said.
The West Alabama Narcotics Task Force is staffed with officers from the Tuscaloosa Police Department, Tuscaloosa County Sheriff’s Office, Northport Police Department and University of Alabama Police Department. It is tasked to investigate all drug crimes in Tuscaloosa County.Snyder was a 29-year member of the Tuscaloosa Police Department, retiring as a captain in December 2012. He was detailed to the narcotics task force in 1989 and became its commander in June 2002, according to his plea agreement.
Task force members periodically seized money suspected to be proceeds of illegal drug transactions and turned the money in to Snyder, who was responsible for depositing the money into bank accounts while condemnation proceedings were pursued through court, according to the plea agreement. Snyder was entrusted to receive the seized money, log it in task force ledger books and deposit it in task force bank accounts.
Snyder began embezzling from the seized funds no later than June 2010. He executed his scheme “by pocketing some or all of the funds seized during various arrests, and then failing to correctly account for those funds,” the plea agreement states.
The agreement between the government and Snyder is a “binding plea agreement” in which both sides agree to an 18-month prison sentence, but the court must still approve the agreement.
The FBI investigated the case, with assistance from the West Alabama Narcotics Task Force. Assistant U.S. Attorney Henry Cornelius is prosecuting the case.
Former Employee of Atlantic County, N.J., Timeshare Consulting Firm Admits Conspiring to Defraud Timeshare OwnersRead the Press Release
CAMDEN, N.J. – A former employee of The Vacation Ownership Group LLC of Pleasantville, N.J., admitted to conspiring to defraud owners of timeshare properties by offering phony consulting services, U.S. Attorney Paul J. Fishman announced.
Joseph Saxon, 39, of Brigantine, N.J., pleaded guilty today before U.S. District Court Judge Noel L. Hillman in Camden federal court to a superseding information charging him with one count of conspiracy to commit mail and wire fraud. Saxon was previously indicted on this charge.According to documents filed in this case and statements made in court:
The Vacation Ownership Group, a/k/a VO Group LLC, had offices in Mays Landing, N.J., and Egg Harbor Township, N.J., and claimed to offer to owners of timeshares consulting services that included cancelling, purchasing and upgrading the timeshares.
In 2010, Saxon started working at the VO Group and was trained by VO Group co-owner Adam Lacerda to call customers using prepared scripts. The defendant called customers and gave them the false impression that he was working for a bank or lending institution. After hearing Saxon’s false representations, some customers sent checks to the VO Group. For example, Saxon falsely told one victim that Saxon was working with the bank that held the victim’s timeshare mortgage and that the bank wanted to settle the loan for a fraction of the price. The victim then mailed a check for $5,925 to the VO Group. Saxon admitted causing more than $120,000 in losses.
On Jan. 23, 2013, co-owners Adam Lacerda, Ashley Lacerda and other members of the VO Group were charged in a superseding indictment with conspiracy to commit mail and wire fraud and other charges. Additional members of the VO Group were also charged by criminal complaint in April 2012. To date, 12 members of the VO Group have pleaded guilty to conspiring to commit mail fraud and wire fraud. As for the Lacerdas and other defendants who have not been convicted in this case, the charges and allegations against them are merely accusations and they are considered innocent unless and until proven guilty.
The mail and wire fraud conspiracy charge to which Saxon pleaded guilty is punishable by a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gain or loss caused by the offense. Sentencing is scheduled for Sept. 20, 2013.
U.S. Attorney Fishman credited special agents from the FBI’s Atlantic City Resident Agency, under the direction of Special Agent in Charge Aaron T. Ford in Newark; and special agents from the Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, under the direction of Special Agent in Charge Robert Panella, New York Region, for their roles in the investigation leading to the guilty pleas. He also thanked the N.J. Department of Labor, Benefit Payment Control Unit, for its assistance.
The government is represented by Assistant U.S. Attorneys Alyson M. Oswald and R. David Walk, Jr. of the U.S. Attorney’s Office Criminal Division in Camden.
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Defense counsel: David S. Rudenstein Esq., Philadelphia
Saxon, Joseph Superseding Information
Former Bank Officer Admits Accepting Bribes in Connection with Financial TransactionsRead the Press Release
CAMDEN, N.J. – A former bank officer today admitted his role in soliciting and accepting bribes in connection with financial transactions, U.S. Attorney Paul J. Fishman announced.
Jose Dominguez, 46, of Newark, N.J., pleaded guilty to an Information charging him with soliciting and accepting bribes as a bank officer in excess of $1,000. Dominguez solicited and accepted corrupt payments of $55,529, intending to be influenced and rewarded in connection with a bank transaction. He entered his guilty plea before U.S. District Judge Noel L. Hillman in Camden federal court.According to documents filed in this case and statements made in court:
From January 1988 to February 2007, Dominguez was employed as a loan officer at Spencer Savings Bank in Elmwood Park, New Jersey. In 2003, Dominguez was contacted by a bank customer because the customer wanted to refinance some loans with Spencer Savings Bank and wanted to do so without paying significant prepayment penalty fees. Dominguez advised the customer that if the customer made corrupt payments to Dominguez, as the loan officer, the customer could obtain a lower interest rate without paying a prepayment penalty to Spencer Savings Bank.
Between August 2003 and December 2003, Dominguez accepted $55,529.57 in corrupt payments from the customer to influence the requested loan modification. Dominguez also admitted to accepting additional bribes from other bank customers in the amounts of $4,500 and $5,000, respectively.
The bank bribery charge to which Dominguez pleaded guilty carries a maximum potential penalty of 30 years in prison and a $1 million fine. Dominguez also previously pleaded guilty on May 23, 2012, to conspiracy to commit bank fraud, bank fraud, and bank bribery as a Spencer Savings loan officer in connection with a separate case. Sentencing related to the charges from both cases is currently scheduled for Sept. 19, 2013.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, with the investigation leading to the guilty pleas.
The government is represented by Assistant U.S. Attorneys Zahid N. Quraishi and Vikas Khanna of the U.S. Attorney’s Office Special Prosecutions Division in Newark.
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Defense counsel: Thomas Young Esq. Assistant Federal Public Defender, CamdenDominguez, Jose Information
For-Profit School in Texas to Pay United States up to $2.5 Million for Allegedly Submitting False Claims for Federal Student Financial AidRead the Press Release
American Commercial Colleges Inc. (ACC) has agreed to pay the United States up to $2.5 million, plus interest, to resolve allegations that it violated the civil False Claims Act by falsely certifying that it complied with certain eligibility requirements of the federal student aid programs, the Justice Department announced today.
To maintain eligibility to participate in federal student aid programs authorized by Title IV of the Higher Education Act of 1965, for-profit colleges such as ACC must obtain no more than ninety percent of their annual revenues from Title IV student aid programs. At least ten percent of their revenues must come from other sources, such as payments from students using their own funds or private loans independent of Title IV. Congress enacted this “90/10 Rule” based on the belief that quality schools should be able to attract at least a portion of their funding from private sources, and not rely solely upon the Federal Government. The civil settlement resolves allegations that ACC violated the False Claims Act when it orchestrated certain short-term private student loans that ACC repaid with federal Title IV funds to artificially inflate the amount of private funding ACC counted for purposes of the 90/10 Rule. The short-term loans at issue in this case were not sought or obtained by students on their own; rather, the United States contends ACC orchestrated the loans for the sole purpose of manipulating its 90/10 Rule calculations.
“American taxpayers have a right to expect federal student aid to be used as intended by Congress -- to help students obtain a quality education from an eligible institution,” said Stuart F. Delery, Acting Assistant Attorney General for the Department of Justice’s Civil Division. “The Department of Justice is committed to making sure that for-profit colleges play by the rules and that Title IV funds are used as intended.”
Under the False Claims Act settlement, ACC, a privately-owned college operating several campuses in Texas, will pay the United States $1 million, plus interest, over five years, and could be obligated to pay an additional $1.5 million under the terms of the agreement.“Misuse of taxpayers’ dollars cannot be tolerated – not only for the sake of taxpayers, but especially in the case of innocent individuals who seek to improve their lives through a quality education,” said U.S. Attorney for the Northern District of Texas Sarah R. Saldaña.
Today’s settlement resolves allegations brought by Shawn Clark and Juan Delgado, former directors of ACC campuses in Odessa and Abilene, respectively, under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private citizens with knowledge of fraud against the government to bring an action on behalf of the United States and to share in any recovery. Messrs. Clark and Delgado will receive $170,000 of the $1 million fixed portion of the government’s recovery, and would receive an additional $255,000 if ACC becomes obligated to pay the maximum $1.5 million contingent portion of the settlement.
This case was handled by the Civil Division of the Department of Justice, the U.S. Attorney’s Office for the Northern District of Texas; and the Department of Education’s Office of Inspector General and Office of General Counsel.
The lawsuit is captioned United States ex rel. Clark, et al., v. American Commercial Colleges, Inc., No. 5:10-cv-00129 (N.D. Tex.). The claims settled by this agreement are allegations only, and there has been no determination of liability.