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16 July 2013
Crawford County Woman Pleads Guilty to Theft of Government FundsRead the Press Release
KANSAS CITY, KAN. – A Crawford County woman has pleaded guilty to receiving more than $45,000 in federal aid she did not qualify to receive, U.S. Attorney Barry Grissom said today.
Jody Gayle Simmons, 48, Arma, Kan., pleaded guilty to one count of theft of government funds. In her plea, she admitted to fraudulently receiving a total of $45,046 from the Social Security Administration's Supplemental Security Income program, the U.S. Department of Agriculture's food stamp program, the Temporary Assistance for Needy Families program funded by the U.S. Department of Health and Human Services, and a one-time stimulus payment made to her pursuant to the American Recovery and Reinvestment Act of 2009.
In her plea, she admitted to falsely reporting that her husband moved out of their residence so that his income would not disqualify her from receiving assistance.
Sentencing is set for November 6, 2013, at 1:30 p.m. She faces a maximum penalty of 10 years in federal prison and a fine up to $250,000. Grissom commended the Social Security Administration – Office of the Inspector General, and Special Assistant U.S. Attorney Trey Alford for their work on the case.
Cordell Veterinarian to Serve Year in Prison and Pay over $892,000 in Restitution for Making False Statements to Defraud BankRead the Press Release
Oklahoma City, Oklahoma – Today, DAVID L. STURGEON, 63, from Cordell, Oklahoma, was sentenced by United States District Judge Joe Heaton to serve 12 months and one day in federal prison for making false statements to defraud the Bank of Cordell, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma. In addition, Judge Heaton ordered that Sturgeon serve five years of supervised release upon his release from prison and pay $892,854.15 in restitution to two bank victims.
Sturgeon is a large animal veterinarian who operates the Washita Veterinarian Clinic and lives in Cordell, Oklahoma. Sturgeon also bought and sold cattle as a manager partner of 20/20 Cattle and Consulting L.L.C and S&D Cattle L.L.C. According to an Information filed on February 21, 2013, from December 2007 through December 2008, Sturgeon secured several loans based on a revolving line of credit extended by Bank of Cordell. Under the loan agreements, loan advances were to be used by Sturgeon for the purchase of cattle which served as collateral for the loan funds advanced. Proceeds from the sale of the cattle were to be used by Sturgeon to pay off the loans owed to Bank of Cordell. During this same time, Sturgeon had two commodities trading accounts with R.J. O’Brien, a commodities firm located in Chicago, Illinois ("RJO"), that he used to make trades in agricultural commodities.
In 2008, RJO required Sturgeon to make certain deposits in his trading accounts to meet margin calls. During the plea hearing today, Surgeon admitted that on August 6, 2008, he represented to the Bank of Cordell that he needed a loan advance of $36,000 to purchase 70 head of cattle for the purpose of influencing the Bank of Cordell to advance him the loan. However, Sturgeon admitted that the loan was not used to purchase cattle and his statements were falsely made so he could fraudulently divert loan funds to make margin calls on the two RJO commodities accounts.
Sturgeon was charged on February 21, 2013. He pled guilty on March 7, 2013. At the sentencing hearing today, Judge Heaton took into account relevant conduct to the offense of conviction and ordered that restitution of $599,364.29 be paid to Bank of Cordell and $293,489.86 to Farm Credit Bank. Sturgeon is to report to the Bureau of Prisons on August 19, 2013, to begin serving his prison sentence.
This case was investigated by the Federal Bureau of Investigation and was prosecuted by Assistant U.S. Attorneys Ross N. Lillard, III, and Robert J. Troester.
Cliffton Man Sentenced to Prison for Making Threats Against Fruita Oil Refinery and Conveying False InformationRead the Press Release
DENVER – Michael Leroy Schonlau, age 37, of Clifton, Colorado, was sentenced yesterday by Chief U.S. District Court Judge Marcia K. Krieger to serve 15 months for willfully making a threat and maliciously conveying false information, and for being a felon in possession of a firearm, U.S. Attorney John Walsh and FBI Denver Special Agent in Charge Thomas Ravenelle announced. Chief Judge Krieger was presiding over the sentencing hearing in U.S. District Court in Grand Junction. Following his prison sentence, Schonlau was ordered to serve 3 years on supervised release. The defendant appeared at the sentencing hearing on bond, and was ordered to report to a Bureau of Prisons facility within 15 days of designation.
Schonlau was indicted by a federal grand jury in Denver on August 21, 2012. He pled guilty before Chief Judge Krieger on April 1, 2013. He was sentenced on July 15, 2013.
According to the stipulated facts contained in the defendant’s plea agreement, on August 5, 2012, at approximately 4:00 p.m., the defendant called the Federal Bureau of Investigation (FBI) using his cellular telephone. It was determined that the defendant was located at an area known as the Gilsonite Refinery in Fruita, Colorado, at the time of the call, though he refused to directly identify his whereabouts.
Schonlau stated that he was in possession of an explosive device which was connected to a 200 million gallon propane tank on the property, and he had his hand on a “Dead Man’s Switch.” He indicated he could see all around him, and that he would detonate the tank if anyone came near. He further indicated that he had already told his family that he would not be coming home.
Police quarantined the area because of the possible explosion. The major highway through Fruita, Highway 6 & 50, and surrounding roads were closed, businesses and homes were evacuated, and the Union Pacific Railroad was shut down for approximately two hours during this threat event.
After telephone calls with an FBI negotiator, the defendant was eventually persuaded to leave the refinery. Police moved into the area of the refinery and the Grand Junction Bomb Squad searched extensively for explosives. None were found. Law enforcement surveilled the defendant has he left in a green truck, and they stopped him after he left the refinery. The officer conducting the traffic stop found an unloaded Ruger Single Six revolver underneath the front passenger seat of the vehicle. The defendant was previously convicted of Felony Theft in May 2004, and thus was prohibited from possessing a firearm.
It was eventually determined the defendant did not possess the materials necessary to carry out his threat to detonate explosives at the refinery. The site contained several large propane tanks and other explosive substances, and the defendant had brought with him two barbeque-sized propane tanks, which he left at the refinery. However, no detonation or explosives device was found, meaning he had no way of igniting any flammable substance.
“Thanks to the FBI, and the FBI’s hostage negotiator, the defendant was located, identified, and apprehended,” said U.S. Attorney John Walsh. “Schonlau’s prison sentence is just as his actions closed down most of Fruita for several hours.”
This case was investigated by the Federal Bureau of Investigation (FBI), the Mesa County Sheriff’s Office, the Mesa County Bomb Squad, and the Fruita Police Department.
Schonlau was prosecuted by Assistant U.S. Attorney Michelle Heldmyer.
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Career Criminal Facing at Least 20 Years in Prison on Federal Firearm ChargesRead the Press Release
Ocala, Florida - Acting United States Attorney A. Lee Bentley, III announces that Ellis Michael Cook (37, Gainesville) pleaded guilty today to two counts of possessing a firearm and ammunition by a prohibited person (convicted felon - armed career criminal) and possessing a firearm in furtherance of a drug trafficking crime. Cook faces a mandatory minimum sentence of 20 years in federal prison, up to a maximum penalty of life in federal prison for the offenses. A sentencing date has not yet been set.
According to the facts presented in the change of plea hearing, on January 30, 2013, at approximately 12:30 a.m., a deputy with the Marion County Sheriff's Office observed Cook driving a stolen motorcycle in the parking lot of an Ocala convenience store. When confronted about the stolen motorcycle, Cook ran from the deputy and discarded a backpack that had been in his possession. After being apprehended by the deputy, Cook warned the deputy that there was a firearm in the backpack. A subsequent search of Cook's backpack revealed a loaded .45 caliber pistol, assorted ammunition, 42.9 grams of methamphetamine, heroin, ecstasy pills, marijuana and drug paraphernalia.
Cook has an extensive criminal record that includes prior convictions for burglary, possession of cocaine with intent to sell, and trafficking in cocaine. As such, Cook qualifies for enhanced federal penalties as both an Armed Career Criminal and Career Offender.
This case was investigated by the Marion County Sheriff's Office, the Florida Department of Law Enforcement (FDLE) and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). It is being prosecuted by Assistant United States Attorney Robert E. Bodnar, Jr.
Canal Fulton Man Indicted on Two Counts of Inducing A Minor to Engage in Sexually Explicit ConductRead the Press Release
A Canal Fulton man was indicted on two counts of inducing a minor to engage in sexually explicit conduct, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
William P. Lacey, aka “Ponch,” age 54, on two occasions in February 2013, did persuade, induce, entice and coerce a minor to engage in sexually explicit conduct for the purpose of producing a visual depiction of the conduct, according to the indictment.
The case was prosecuted by Assistant United States Attorney Linda Barr following an investigation by the Federal Bureau of Investigation’s Safe Streets Task for and the Summit County Sheriff’s Office.
If convicted, the defendant’s sentence will be determined by the court after review of factors unique to this case, including each defendant’s prior criminal record (if any), his role in the offenses and the characteristics of the violations. In all cases, the sentences will not exceed the statutory maximum and in most cases they will be less than the maximum.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
California Truck Driver Pleads Guilty to Meat Theft ScamRead the Press Release
United States Attorney Deborah R. Gilg announced that Artak Medjbarian of Sherman Oaks, California pled guilty to conspiring with others to attempt to steal $163,000 worth of beef products from a Nebraska Beef facility in Omaha, Nebraska. Medjbarian, age 33, was charged in May 2012 by a federal grand jury in a scheme with others to steal loads of meat cargo, by pretending to be the legitimate freight haulers to whom authority to transport the loads had been given. The Indictment specifically charged a conspiracy to commit wire fraud and to engage in the interstate transportation of stolen property.
The Indictment alleged that Medjbarian used the identity of a legitimate trucking company in Arizona to bid on hauling a load of meat from Nebraska Beef to California. Due to discrepancies with respect to the documentation forwarded by unknown co-conspirators on Medjbarian’s behalf, the freight brokers contacted the owners of the true Lopez Trucking, and determined that Lopez Trucking did not have trucks operating under their authority in the State of Nebraska on January 27, 2012, the day Medjbarian showed up at Nebraska Beef pretending to have the transport authority of Lopez Trucking. The Omaha Police were contacted and Medjbarian was initially arrested on local charges.
The guilty plea was entered before the Honorable Laurie Smith Camp. Judge Smith Camp set the sentencing of this matter for October 7, 2013. Medjbarian is detained pending sentencing. Medjbarian faces a maximum penalty of up to five years in prison on the conspiracy conviction.
In addition to the Omaha Police Department, the case was also investigated by the Nebraska State Patrol and by the Federal Bureau of Investigation.California Economist Sentenced in Manhattan Federal Court to Four Years in Prison for Evading over $1.5 Million in Taxes Due to IRSRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that DAVID GILMARTIN, a Ph.D. economist, was sentenced today in Manhattan federal court to four years in prison for failing to file tax returns since 1989, evading payment of his taxes, and obstructing attempts by the Internal Revenue Service (“IRS”) and the State of New York to assess and collect his personal income taxes. GILMARTIN was convicted of tax evasion and mail-fraud charges in January 2013, after a one-week jury trial before U.S. District Judge Miriam Cedarbaum, who imposed today’s sentence.
Manhattan U.S. Attorney Preet Bharara said: “For more than 20 years, David Gilmartin thumbed his nose at the government, failing to pay his taxes and ignoring repeated warnings to do so. Everyone must pay their fair share of taxes, and those like Gilmartin who do not, will be punished.”
According to the indictment and evidence introduced at GILMARTIN’s trial:
GILMARTIN, who holds a Ph.D. in economics, willfully failed to file income tax returns and pay income taxes on over $1.7 million in consulting income from 1989 through 2010. He justified his failure to pay taxes by claiming that he could not identify a provision in the tax code that made him liable for the payment of income taxes. Despite numerous IRS notices, meetings, and letters, and despite GILMARTIN’s friends telling him that he would go to jail, GILMARTIN refused to file his tax returns or pay his income taxes.
GILMARTIN evaded his taxes by providing a false social security number to one employer, and by providing false withholding forms to employers that claimed that he was exempt from taxes, to keep his employers from withholding taxes from his paychecks. In order to prevent the IRS from assessing and collecting his taxes, from 1995 through 2002, GILMARTIN paid nearly $500,000 from his paychecks directly to his banks for credit card purchases and payments on a line of credit, rather than deposit them in a bank account that he knew the IRS would try to levy. From 2008 until his arrest, GILMARTIN cashed over $338,000 in paychecks rather than deposit them into a bank account, also to prevent the IRS from collecting his taxes.
As a result of his evasion efforts, GILMARTIN owes more than $1.5 million in income taxes and interest to the IRS, and more than $99,000 to the State of New York.
In addition to the prison term, Judge Cedarbaum also sentenced GILMARTIN, 69, of Phelan, California, to three years of supervised release. GILMARTIN was also ordered to pay $1.67 million in restitution, and $2,500 in the costs of prosecution.
Mr. Bharara thanked the Internal Revenue Service-Criminal Investigation and the Tax Division of the Department of Justice for their work on this case.
This case is being prosecuted by the Office’s Complex Frauds Unit. Assistant U.S. Attorney Stanley J. Okula, Jr. and DOJ Tax Division Assistant Chief Nanette L. Davis are in charge of the prosecution.
Brooklyn Money Launderer Senteced to 37 Months in Prison in Connection with $77 Million Medicare Fraud SchemeRead the Press Release
BROOKLYN, NY – Earlier today, Anatoly Kraiter, 35, of Brooklyn, New York, was sentenced today to 37 months in prison for his role as a money launderer for a $77 million Medicare fraud scheme. In addition to the prison term, U.S. District Judge Nina Gershon of the Eastern District of New York sentenced Kraiter to three years of supervised release and ordered him to forfeit $100,000. Kraiter’s surrender date is September 16, 2013.
The sentence was announced by U.S. Attorney for the Eastern District of New York Loretta E. Lynch; Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI); and Special Agent-in-Charge Thomas O’Donnell of the HHS Office of Inspector General (HHS-OIG).
Kraiter pleaded guilty on July 24, 2012 to one count of conspiracy to commit money laundering. Including Kraiter, 13 individuals were convicted in this case, either through guilty plea or trial conviction.
According to court documents, from 2008 to 2010, Kraiter opened and operated numerous shell companies and bank accounts through which he laundered the proceeds of health care fraud from Brooklyn clinic SZS Medical Care PLLC (“SZS Medical”). The owners and operators of SZS Medical, along with closely related medical clinics Bay Medical Care PC and SVS Wellcare Medical PLLC (collectively, “the Bay Medical clinics”) committed a $77 million Medicare fraud from 2005 to 2010. According to court documents, the Bay Medical clinics submitted more than $77 million in claims to Medicare, seeking reimbursement for a wide variety of fraudulent medical services and procedures, including physician office visits, physical therapy and diagnostic tests.
The government’s investigation included the use of a court-ordered audio/video recording device hidden in a room at the clinic, in which the conspirators paid cash kickbacks to corrupt Medicare beneficiaries. The conspirators were recorded paying approximately $500,000 in cash kickbacks during a period of approximately six weeks from April to June 2010. This room was marked “PRIVATE” and featured a Soviet-era poster of a woman with a finger to her lips and the words “Don’t Gossip” in Russian. The purpose of the kickbacks was to induce the beneficiaries to receive unnecessary medical services or to stay silent when services not provided to the patients were billed to Medicare.
To generate the large amounts of cash needed to pay the patients, the conspirators used a network of external money launderers, including Kraiter. According to court documents, Kraiter conspired with others to accept checks from the Bay Medical clinics, which were made payable to various shell companies Kraiter and his co-conspirators controlled. These checks did not represent payment for any legitimate service, but rather were written to launder the Bay Medical clinics’ fraudulently obtained health care proceeds. Kraiter admitted at his change of plea hearing that he deposited such checks into bank accounts he controlled, intending these transactions to hide and disguise the fact that these funds were proceeds of a crime. He admitted that he knew these funds were proceeds of health care fraud.
According to court documents, Kraiter and his co-conspirators negotiated and cashed these checks and provided the cash back to the owners and operators of the Bay Medical clinics. Such cash was then diverted to the personal use of the owners and operators of the Bay Medical clinics, and used to pay illegal cash kickbacks to the Bay Medical clinics’ purported patients.
This case is being prosecuted by Trial Attorney Sarah M. Hall of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Shannon Jones and William Campos of the Eastern District of New York. The case was investigated by the FBI and HHS.
The case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of New York. The Medicare Fraud Strike Force operations are part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,500 defendants who have collectively billed the Medicare program for more than $5 billion. In addition, HHS’s Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
Boca Raton Resident Convicted of Filing False Tax Returns, Access Device Fraud, and Aggravated Identity TheftRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Assistant Attorney General Kathryn Keneally of the Justice Department’s Tax Division, Michael J. DePalma, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), and Michael B. Steinbach, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, announce that Harvey Zitron, of Boca Raton, was convicted by a federal grand jury on all ten counts charged in the indictment.
According to the indictment, Zitron was charged with filing fraudulent IRS United States Individual Income Tax Returns, Forms 1040, for 2004 and 2005 (Counts 1 and 2), and Amended Individual Income Tax Returns, Forms 1040X for 2003, 2004 and 2005 (Counts 3-5), all in violation of Title 26, United States Code, Section 7206(1). In addition, he was charged with three counts of access device fraud, in violation of Title 18, United States Code, Section 1029(a)(2) (Counts 6, 8 and 10), and two counts of aggravated identity theft, in violation of Title 18 United States Code, Section 1028A(a)(1) (Counts 7 and 9). The trial was held before the Honorable Robert N. Scola, U.S. District Court Judge. Sentencing is set for October 8, 2013.
According to the evidence presented at trial, Zitron used companies to write checks to friends or acquaintances who cashed the checks and returned the cash to Zitron. Zitron then failed to declare this income on his tax returns. He also opened credit card accounts in the names of his son and ex-wife, and charged more than $1,000 in a single year on those accounts without their authorization or knowledge.
Zitron faces a maximum sentence of three years for each count of tax fraud, ten years for each count of access device fraud, and two consecutive years for each count of aggravated identity theft.
Mr. Ferrer commended the investigative efforts of the IRS-CI and the FBI. This case was prosecuted by Assistant U.S. Attorney Harry Wallace and Department of Justice Tax Division Attorney Kevin J. Lombardi.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Belleville Man Sentenced to over 10 Years in Prison for Receipt and Possession of Child PornographyRead the Press Release
Joseph Millard, 50, of Belleville, Illinois, was sentenced in the United States District Court to 121 months in prison for Receipt and Possession of Child Pornography, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today. Millard was also ordered to pay $10,000 in restitution to the victims of his offenses and a fine in the amount of $10,000. Following his prison sentence, Millard will be on federal supervised release for 10 years and will also be required to register as a sex offender for the remainder of his life.
Court documents establish that in January 2012, during an undercover Internet investigation, agents from the Illinois Attorney General High Tech Crimes Bureau determined that Millard was offering for download child pornography files using a peer-to-peer file sharing network. Agents obtained and executed a search warrant for Millard’s residence, during which Millard was interviewed and admitted that he had been downloading child pornography from the Internet for approximately 10 years. During a forensic examination of Millard’s computers, agents recovered numerous video and image files containing child pornography that Millard had downloaded from the Internet.
This case is part of Project Safe Childhood, a nationwide initiative launched in 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab “resources.”
The investigation was conducted by the Illinois Attorney General High Tech Crimes Bureau. The case was prosecuted by Assistant United States Attorney Ali Summers.
Behavioral Analyst Pleads Guilty to Health Care FraudRead the Press Release
NASHVILLE, Tenn. – July 16, 2013 - Jenny Lynn Hall, formerly known as Jenny Lynn Unterstein, 37, of Smithville, Tenn., pleaded guilty yesterday in U.S. District Court, to health care fraud, announced David Rivera, Acting U.S. Attorney for the Middle District of Tennessee.
Hall was a licensed and board-certified behavioral analyst with a Ph.D. in applied behavioral analysis and provided services to individuals with mental, behavioral or developmental disabilities. At the plea hearing, Hall admitted to creating false documents and forging signatures in 2009 and 2010 to obtain payment from Medicaid for behavioral analysis services that she never provided.
Hall will be sentenced by U.S. District Court Chief Judge William Haynes on October 7, 2013. She faces a maximum penalty of 10 years in prison and a $250,000 fine, as well as forfeiture of proceeds derived from the fraud.
This investigation was conducted by agents of the Department of Health and Human Services Office of Inspector General and the Tennessee Bureau of Investigation. The case is being prosecuted by Assistant United States Attorney William F. Abely.Ashland, Ohio, Trio Indicted for Labor Trafficking and Other CrimesRead the Press Release
A five-count indictment was filed charging three people from Ashland, Ohio, with engaging in a labor trafficking conspiracy and related crimes for holding a woman with cognitive disabilities and her child against their will and forcing the woman to perform manual labor for them, law enforcement officials said today.
According to the indictment, Jordie L. Callahan, 26, Jessica L. Hunt, 31, and Dezerah L. Silsby, 21, used a combination of violence, threats, sexual assaults, humiliation and monitoring to establish and continue a pattern of domination and control over their victims, identified only as S.E. and her child B.E. A fourth person, Daniel K. Brown, 33, of Ashland, was charged in a criminal information filed today with one count of conspiracy.
The conspiracy between Callahan, Hunt, Silsby and Brown took place between August 2010 and October 2012. The object of the conspiracy included holding S.E. in a condition of forced labor and involuntary servitude; obtaining S.E.’s and B.E.’s public assistance benefits; and intentionally causing painful injuries to S.E. so they could use the narcotic pain medications she was prescribed.
According to court documents, the defendants’ tactics included beating S.E., threats of beatings to S.E. and B.E., taunting and threatening the victims with pit bulls and snakes, causing the victims to sleep in unsafe and unsanitary conditions, restricting S.E. and B.E.’s access to the bathroom, preventing them from eating regular and suitable meals and forcing S.E. to eat dog food and crawl on the floor while wearing a dog collar.
Callahan and Hunt recruited S.E. and B.E. to live with them in their two-bedroom apartment in Ashland, knowing that S.E. has a cognitive disability and that S.E. and B.E. received monthly public assistance payments.
According to the indictment, in or around September 2010, Callahan and Hunt forced S.E. to have her and B.E.’s public assistance benefits issued on a debit card rather than paper check. They then took control of the card, forced S.E. to give them the PIN and used the card for their own benefit and the benefit of their family and friends.
On multiple occasions between August 2010 and October 2012, Callahan and Hunt threatened S.E. and B.E. with serious physical harm, including death, if S.E. did not clean up the apartment, care for their numerous pit bull dogs, snakes and other reptiles, purchase items at the store and perform other labor and services. On one occasion, Callahan pointed a firearm at S.E.’s head and threatened to kill her if she did not perform the labor and services he and other conspirators commanded. Callahan also forced S.E. on multiple occasions to engage in sex acts with him and threatened that he and Hunt would kill S.E. if she told anyone about the forced sexual acts .
In August 2011, Silsby, at the direction of Callahan and Hunt, smashed S.E.’s hand with a rock with such force that S.E. needed to go to the hospital emergency room. In December 2011, Callahan and Hunt injured S.E.’s back with such force that she needed medical treatment. In March 2012, Callahan kicked S.E. in the hip with such force that she needed medical treatment. After each incident, Callahan and Hunt forced S.E. to give them the narcotic pain pills and prescriptions for the medication as stated in the indictment.
Callahan and Hunt used a video camera to monitor S.E. and B.E.’s activities and conversations in the apartment. They often forced S.E. to walk to the store to buy groceries, cigarettes, dog food and other items for Callahan, Hunt and Hunt’s four sons and to pay for these purchases with her public assistance card. They allotted S.E. only a brief time period to complete the shopping and warned her that she was not allowed to speak with anyone while she was out. They frequently required B.E. to remain with them at the apartment while S.E. was out and threatened physical harm to B.E. and S.E. if S.E. broke any of their rules.
The indictment also states that Callahan and Hunt threatened to contact Ashland County Job and Family Services and have B.E. taken away if S.E. purchased any items at the store other than those they ordered or if she told anyone about their unlawful conduct.
In June 2011, after S.E. and B.E. had attempted to flee the apartment, Callahan and Hunt ordered Brown and Silsby to find S.E. and B.E. and bring them back to the apartment. Brown and Silsby lured S.E. and B.E. into their vehicle by promising to take them to Dairy Queen, only to drive them afterwards back to the apartment.
On multiple occasions, Callahan and Brown locked S.E. and B.E. in a room with a window that was nailed shut and a door that had been locked from the outside according to court documents.
As stated in the indictment, in October 2011, Callahan and Hunt forced S.E. to hit her child while they recorded a video, and threatened to inflict much greater physical harm on both S.E. and B.E. if S.E. did not comply. One month later, Callahan and Hunt again forced S.E. to strike B.E. while they captured a video recording of the staged incident on Callahan’s cell phone. Callahan and Hunt repeatedly threatened have B.E. taken away by showing the videos to authorities in order to secure S.E.’s compliance to the conspirators’ commands.
Callahan, Hunt and Silsby face one count each of the following: conspiracy; forced labor; theft of government benefits; and acquiring a controlled substance by deception. Callahan and Hunt face an additional charge of tampering with a witness.
The case is being prosecuted by Assistant U.S. Attorneys Chelsea Rice and Thomas E. Getz and Trial Attorney Victor Boutros of the Civil Rights Division’s Human Trafficking Prosecution Unit, following an investigation by the FBI and Ashland Police Department, with assistance from the Ashland County Prosecutor’s Office.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Albuquerque Man Sentenced to Fifteen Years for Hobbs Act Robberies and Unlawful Possession of a FirearmRead the Press Release
ALBUQUERQUE – Alfonso Lezine, 40, of Albuquerque, N.M., was sentenced this afternoon to 15 years in federal prison followed by three years of supervised release for robbing four Albuquerque-area businesses and being a felon in possession of a firearm, announced U.S. Attorney Kenneth J. Gonzales, Thomas G. Atteberry, Special Agent in Charge of the Phoenix Division of the Bureau of Alcohol, Tobacco, Firearms and Explosives, and Chief Ray Schultz of the Albuquerque Police Department.
Lezine was arrested in Aug. 2012, on a six-count indictment charging him with four counts of violating the Hobbs Act by robbing businesses engaged in interstate commerce; one count of using a firearm during a crime of violence; and one count of being a felon in possession of a firearm. The indictment alleged that Lezine committed four commercial robberies in Albuquerque between Oct. 2011 and March 2012.
On April 16, 2013, Lezine pleaded guilty to Counts 1, 3, 4 and 5 of the indictment, each of which charged him with a Hobbs Act robbery, and Count 6, which charged him with unlawful possession of a firearm. In entering his guilty plea, Lezine admitted robbing the following Albuquerque businesses: (1) the Family Dollar, located at 2001 2nd Street NW, on Oct. 15, 2011; (2) the same Family Dollar on March 6, 2012; (3) the Allied Cash Advance, located at 3821 Menaul NE, on March 20, 2012; and (4) the Family Dollar, located at 9550 Sage Road SW, on March 14, 2012. Lezine also admitted that he unlawfully possessed a firearm on March 20, 2012. According to court records, Lezine was prohibited from possessing firearms and ammunition because he previously had been convicted of residential burglary and a Hobbs Act robbery and using a firearm in relation to a crime of violence in California.
This case was brought as part of a federal anti-violence initiative that targets “the worst of the worst” offenders for federal prosecution. Under this anti-violence initiative, the U.S. Attorney’s Office and federal law enforcement agencies work with New Mexico’s District Attorneys and state, local and tribal law enforcement agencies to target violent or repeat offenders for federal prosecution with the goal of removing repeat offenders from communities in New Mexico for as long as possible.This case was investigated by the Albuquerque office of the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Albuquerque Police Department, with assistance from the District Attorney’s Office for the Second Judicial District of the State of New Mexico, and was prosecuted by Assistant U.S. Attorney Jon K. Stanford.
Additional Indictments in Operation Black WidowRead the Press Release
United States Attorney Brendan V. Johnson announced that two Watertown, South Dakota, men have been indicted by a federal grand jury for their involvement in a drug conspiracy that is part of Operation Black Widow.
In May of 2013, ten individuals were arrested and indicted as part of Operation Black Widow, an extensive multi-year investigation into a wide variety of alleged criminal activity, including illegal gun and drug trafficking.
William Patrick Holmes, age 42, and Todd Karl Bramer, age 46, were indicted by a federal grand jury on July 9, 2013, for conspiracy to distribute 100 kilograms or more of marijuana. They appeared before U.S. Magistrate Judge John E. Simko on July 11, 2013, and pled not guilty to the indictment.
If convicted, the two face a mandatory minimum of 5 years and a maximum of 40 years in custody. The charge is merely an accusation and both men are presumed innocent until and unless proven guilty.
The previously filed indictment that charged six individuals with conspiracy to distribute 50 grams or more of methamphetamine was superseded to add the marijuana conspiracy count. Two of the methamphetamine conspiracy defendants, Eric Allen Block and Patricio Rodriguez Pena, were also charged with Holmes and Bramer in the marijuana conspiracy.
The investigation is being led by the U.S. Bureau of Alcohol, Tobacco, Firearms & Explosives, with assistance from the Watertown Police Department, the Codington County Sheriff, the SD Division of Criminal Investigation, and the Drug Enforcement Administration.
Both Holmes and Bramer were released on bond pending trial.
15 July 2013
Wichita Man Pleads Guilty to Filing False Tax ReturnsRead the Press Release
WICHITA, KAN. – A Wichita man has pleaded guilty to using stolen identities to file false tax returns, U.S. Attorney Barry Grissom said today.
Anthony Hopkins, 40, Wichita, Kan., pleaded guilty to one count of conspiracy to submit false tax claims. In his plea, he admitted to fraudulently collecting income tax refunds based on false tax returns. Hopkins prepared and filed tax returns knowing the claims were false and that he had no authority to file the claims or to collect the refunds. The tax returns were created using the identities of victims and the tax information forming the basis for the refunds were entirely false. The income tax refunds were deposited to pre-paid debit cards in the names of the victims whose identities were stolen. The cards were delivered to Hopkins.
Hopkins is set for sentencing Oct. 3. Co-defendant Ashley Allen, 24, Wichita, Kan., pleaded guilty to the same count. She is set for sentencing July 29. Each of them faces a maximum penalty of 10 years in federal prison and a fine up to $250,000. Grissom commended the Internal Revenue Service and Assistant U.S. Attorney Aaron Smith for their work on the case.
Washburn Man Sentenced to Ten Years in Prison for Unlawful Possession of A Pipe BombRead the Press Release
A man who possessed a pipe bomb during an attempted theft was sentenced today to ten years in federal prison.
David Risse, 39, from Washburn, Iowa, received the prison term after an April 11, 2013, guilty plea to one count of possession of an unregistered firearm.
The evidence in the case showed that on November 10, 2012, deputies from the Black Hawk County Sheriff’s Office responded to a report of a larceny in progress in Elk Run Heights, Iowa. Risse was observed attempting to steal and load a riding lawn mower onto a trailer. Risse ran off when deputies arrived. After Risse was apprehended, he was placed in handcuffs for transport to jail. As Risse was about to be put in the squad car, he removed a pipe bomb from his waist band and threw it on the ground. The pipe bomb, a metal tube capped at both ends with a fuse hanging out of it, was filled with gun powder and capable of being detonated. Risse had previously been convicted of numerous offenses, including assault with injury, assault domestic abuse, possession of marijuana with intent to deliver, two burglaries, six thefts, and three convictions for operating while intoxicated.
Risse was sentenced in Cedar Rapids by United States District Court Chief Judge Linda R. Reade. Risse was sentenced to the legal maximum of ten years’ imprisonment. A special assessment of $100 was imposed. He must also serve a three-year term of supervised release after the prison term. There is no parole in the federal system.
Risse is being held in the United States Marshal’s custody until he can be transported to a federal prison.
This case was prosecuted as part of Project Safe Neighborhoods, a cooperative local, state and federal program aimed at the enhanced prosecution of gun crimes. The case was prosecuted by Assistant United States Attorney Daniel C. Tvedt and investigated by the Black Hawk County Sheriff’s Office and the Bureau of Alcohol, Tobacco, and Firearms.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is CR 13-2004.
Valmeyer Man Sentenced to 151 Months in Prison for Child PornographyRead the Press Release
A Valmeyer man was sentenced in federal district court on July 15, 2013, for Distribution of Child Pornography (Count 1) and Possession of Child Pornography (Count 2), the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today. Alan L. Mitchell, 52, of Valmeyer, Illinois, was sentenced to 151 months’ imprisonment, to be followed by a five year term of supervised release. Mitchell was ordered to pay $3,000 in restitution to one of the victims depicted in his collection of child pornography, and the forfeiture of the computers used to commit the charged offenses was ordered.
Mitchell pled guilty to the charges on March 28, 2013.
As is indicated in a graphic factual stipulation filed at the time of defendant’s guilty plea, on September 6, 2012, an undercover agent assigned to the United States Secret Service Southern Illinois Cybercrime Unit searched a peer-to-peer file sharing network and was able to download child pornography movies from Mitchell’s computer. Officers next obtained a federal search warrant for Mitchell’s Valmeyer home and executed it on October 23, 2012. Mitchell, who resided in the basement of the home, made a voluntary statement to investigating agents. He indicated that he had been knowingly and intentionally downloading child pornography for the last year or two from a peer to peer network, and that he realized he was also sharing child pornography with other users.
Forensic review of a Seagate 320 GB hard disk drive revealed approximately 162 video files and 18 still images which contained child pornography. Forensic review of a Western Digital 160 Gigabyte laptop revealed approximately 205 video files and 50 still images which contained child pornography. Forensic review of a Fujitsu laptop revealed approximately four images of child pornography. A Toshiba 60 GB hard drive revealed two video files and three still images of child pornography. Mitchell’s collection included files which depicted penetration of minors who appeared to be under the age of five. There were also images that depicted bondage.
“The movies possessed by Mitchell are, in essence, crime scene photos depicting the rape and sexual assault of child victims,” said United States Attorney Wigginton. “I commend the dedicated efforts of the law enforcement officers who must regularly subject themselves to this depraved material as they search computers with immense storage capacity for evidence.”
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab “resources.”
The case was investigated by the United States Secret Service Southern Illinois Cybercrime Unit. The case was prosecuted by Assistant United States Attorney Suzanne M. Garrison.
U.S. Trustee Program Announces Settlement with CitiGroup Inc. Protecting Consumers’ Personal Information in Bankruptcy CasesRead the Press Release
Nationwide Agreement Requires Citigroup to Protect Personal Information of Nearly 150,000 Consumers
WASHINGTON — The U.S. Trustee Program (USTP) today announced the unsealing of a settlement with Citigroup Inc. (Citi) that protects the personal information of nearly 150,000 consumers in 85 jurisdictions around the country. Citi agreed to redact proofs of claim filed in bankruptcy cases nationwide in which the personal information of consumer debtors and third parties, including Social Security numbers and birthdates, had not been properly redacted as required by the bankruptcy rules. Citi also agreed to notify all affected consumers and offer them one year of free credit monitoring. An independent auditor appointed under the settlement is reviewing the accuracy of the correction process.
The settlement, approved by the U.S. Bankruptcy Court for the Southern District of New York on March 13, 2012, had been sealed to prevent potential wrongdoers from learning of the breach and seeking to victimize the affected consumers. On July 11, 2013, the bankruptcy court granted the parties’ motion to unseal the proceedings.
“Under this unprecedented settlement, nearly 150,000 consumers whose personal information was placed at risk through no fault of their own have received notice of the improper disclosure and can further protect their information through free credit monitoring,” stated Clifford J. White III, Director of the Executive Office for U.S. Trustees. “Creditors in bankruptcy cases have a legal duty to protect certain personal information of their customers. This settlement should remind all major financial institutions and other creditors that violations cannot be tolerated.”
The settlement resolved the objection of the U.S. Trustee for Region 2, Tracy Hope Davis, to a motion Citi filed under seal in September 2011. Citi’s motion disclosed that between 2007 and 2011 its subsidiaries, including CitiMortgage Inc., Citibank N.A. and CitiFinancial Inc., filed proofs of claim in thousands of consumer bankruptcy cases seeking payment of amounts alleged to be owed by debtors. In April 2011, Citi discovered that certain personal information that should have been redacted under bankruptcy court rules, including consumers’ Social Security numbers and birth dates, had not been properly redacted.
The U.S. Trustee agreed that the information should be redacted, but objected to Citi’s motion because it did not disclose the nationwide scope of the breach. In addition, Citi did not propose a verifiable solution to correct the problem or provide assurance that the matter would be made public and the seal lifted once the information was redacted and affected consumers received notice.
On March 13, 2012, the bankruptcy court approved the settlement calling for the redaction and electronic filing of replacement claims at Citi’s expense. The settlement also included specific consumer protections, including: assurance that the original claims would not be overwritten or altered in the replacement process; notification to the affected debtors and third parties that their personal information was not properly redacted and of its correction; and an offer of one year of free credit monitoring.
Under the settlement, the court also appointed an independent auditor to review and file certifications with the court confirming that Citi’s investigation to determine the scope of the breach was adequate, that Citi filed properly redacted claims and did not overwrite or replace the original claims in the process, and that Citi’s policies and procedures for future filings are reasonably calculated to prevent recurrence of the redaction error.
On July 19, 2012, Citi certified to the bankruptcy court the successful redaction and replacement of the filings in the Southern District of New York. During that process, Citi discovered additional redaction issues and, in accordance with the settlement, filed a plan of corrective action expanding the scope of the settlement to include the redaction of approximately 50,000 additional bankruptcy filings.
Courts in 60 other jurisdictions served by the USTP have entered the settlement under seal and accepted the redacted replacement filings. Courts in the remaining jurisdictions handled the correction of the filings according to their local rules and orders, and Citi is otherwise following the terms of the settlement in those jurisdictions.
On June 4, 2013, the independent auditor certified to the U.S. Bankruptcy Court for the Southern District of New York and the 60 other participating courts that Citi had mailed letters notifying affected consumers of the privacy breach, its correction and the availability of one year of free credit monitoring at Citi’s expense. The independent auditor is reviewing Citi’s redaction and replacement process and is expected to issue its certification on that process by the end of the year.
Consumer debtors who believe they were affected may contact Citigroup Customer Service at 1-866-613-5636.
The U.S. Trustee Program is the component of the Justice Department that protects the integrity of the bankruptcy system by overseeing case administration and litigating to enforce the bankruptcy laws.
The settlement is filed in In re Matter of Citi Replacement Filings, No. 11-00405 (Bankr. S.D.N.Y.).
Contact:Jane Limprecht, Public Information Officer
Executive Office for U.S. Trustees
(202) 305-7411Settlement Agreement (Stipulation and Order) [PDF - 1.07 MB]
Two Topeka Men Plead Guilty in Separate Firearms CasesRead the Press Release
TOPEKA, KAN. – Two Topeka men have pleaded guilty in unrelated federal firearms cases, U.S. Attorney Barry Grissom said today.
Matthew L. Hoag, 22, Topeka, Kan., pleaded guilty to one count of unlawful possession of a firearm after a felony conviction. In his plea, he admitted that officers of the Topeka Police Department encountered him on March 21, 2013, after being called to a report of shots fired. Hoag was riding in the back seat of a car officers stopped in the 1100 block of SW Lincoln. They found him in possession of a .380 caliber handgun. At the time, Hoag was prohibited from possessing a firearm because he had been convicted in June 2010 in Jackson County District Court on a charge of possession of methamphetamine.
Tyrone J. Lewis, Sr., 34, Topeka, Kan., pleaded guilty on one count of unlawful possession of ammunition after a felony conviction. In his plea, he admitted that on Jan. 19, 2013, he called the Topeka Police Department to report that people were chasing him in a vehicle. When officers arrived in the 1600 block of SW Topeka they found Lewis in the intersection jumping back and forth as if he were avoiding multiple football tackles. Believing him to be under the influence of a narcotic, they placed him under arrest. They found four .45 caliber bullets in a plastic bag in his possession. At the time, he was prohibited from possessing ammunition because of prior felony convictions in Shawnee County District Court for aggravated robbery and attempted criminal possession of a firearm.
In both cases, sentencing is set for Nov. 5. Both defendants face a maximum penalty of 10 years in federal prison and a fine up to $250,000.
Grissom commended the Topeka Police Department, the Bureau of Alcohol, Tobacco, Firearms and Explosives and Assistant U.S. Attorney Richard Hathaway for their work on the cases.
Tokio Man Pleads Guilty to Abusive Sexual ContactRead the Press Release
FARGO – U.S. Attorney Timothy Q. Purdon announced that on July 15, 2013, Jerome Louis Blackbird, Jr., of Tokio, N.D., pleaded guilty before U.S. District Judge Ralph R. Erickson to a charge of abusive sexual contact.
Blackbird, Jr., 56, pleaded guilty to engaging in sexual contact, over the clothing, with a minor female child. The incidents occurred between 2007 through 2009 on the Spirit Lake Indian Reservation.
The charge of abusive sexual contact carries a statutory maximum penalty of four years’ imprisonment.
The case was investigated by the Federal Bureau of Investigation.
Sentencing for Blackbird, Jr. has been scheduled for Wednesday, Oct. 2, 2013, at 9:00 a.m. in Fargo.
Assistant U.S. Attorney Janice M. Morley is prosecuting the case.
The Gallup Organization Agrees to Pay $10.5 Million to Settle Allegations That It Improperly Inflated Contract Prices and Engaged in Prohibited Employment Negotiations with Fema OfficialRead the Press Release
The Justice Department announced today that the Gallup Organization has agreed to pay $10.5 million to settle allegations that it violated the False Claims Act and the Procurement Integrity Act for conduct involving several of its federal government contracts and subcontracts. Gallup is a polling and market research firm headquartered in Washington, D.C.
The settlement announced today resolves allegations in a complaint filed by the United States in November 2012. The United States’ complaint alleged that Gallup knowingly overstated its true estimated labor hours in proposals to the U.S. Mint and State Department for contracts and task orders that were to be awarded without competition. Because of Gallup’s conduct, the complaint alleged, the two federal agencies awarded Gallup contracts and task orders at falsely inflated prices. The settlement also resolves allegations that Gallup engaged in improper employment negotiations with a then Federal Emergency Management Agency (FEMA) official, Timothy Cannon, in order to obtain a FEMA subcontract at an inflated price and additional FEMA funding after the subcontract had been awarded.
“Contractors must be honest and straightforward in their contract proposals to the government,” said Stuart F. Delery, Acting Assistant Attorney General for the Civil Division of the Department of Justice. “We will pursue contractors that seek to take advantage of the government by providing estimates that do not reflect their best judgment, or by offering employment to federal officials who have a conflict of interest. This type of misconduct results in inflated contract prices and undermines the integrity of the government’s contracting process.”
Separately, in April 2013, Cannon agreed to pay $40,000 to the United States to resolve allegations that he violated the Procurement Integrity Act by improperly negotiating for and accepting an offer of employment from Gallup while being personally and substantially involved in Gallup’s subcontract with FEMA. In related criminal proceedings, on January 15, 2013, Cannon pled guilty to a violation of 18 U.S.C. § 208, a federal conflict of interest statute, and was subsequently sentenced to probation.
“This case exposed a cozy arrangement between a contractor and a government employee where nobody was looking out for the American taxpayer,” said Ronald C. Machen Jr., U.S. Attorney for the District of Columbia. “With this settlement, we have held the contractor accountable for overbilling the government and returned $10.5 million to the federal treasury. This significant corporate settlement and the related criminal prosecution should send a clear message that contractors and government officials alike must operate with honor and integrity.”
The False Claims Act allegations against Gallup were originally brought in a lawsuit filed under the whistleblower provisions of the Act by Michael Lindley, Gallup’s former Director of Client Services. The False Claims Act prohibits the submission of false claims for government money or property and allows the United States to recover treble damages and penalties for a violation. Under the Act’s whistleblower provisions, a private party may file suit on behalf of the United States and share in any recovery. The United States may elect to intervene and take over the case, as it did here. As a result of the settlement with Gallup, Lindley will receive $1,929,363 as his share of the government’s recovery.
The settlement announced today is part of a global civil, criminal, and administrative resolution involving the Department of Justice’s Civil Division, the U.S. Attorney’s Office for the District of Columbia, and the United States Department of Homeland Security (DHS). After the United States’ civil complaint was filed, DHS, the parent organization of FEMA, suspended Gallup from government contracting. In contemplation of resolving the criminal and civil investigations, Gallup recently entered into an Administrative Agreement with DHS, under which Gallup agreed to enhance its corporate compliance and ethics programs. As a result, DHS lifted the suspension of Gallup. Contemporaneous with the civil settlement, Gallup has entered into a Non-Prosecution Agreement with the U.S. Attorney’s Office for the District of Columbia related to the FEMA conflict of interest allegations, in which Gallup has further agreed to strengthen its corporate compliance and ethics programs and to pay a penalty of $50,000.
The criminal investigation was conducted by the FBI and the Inspectors General for DHS and the General Services Administration (GSA).
The Deputy Inspector General for the Department of State, Harold W. Geisel, said, “We are very pleased with the successful resolution of this case, and I commend the dedication of our OIG investigators in these complicated investigations. Our efforts should reinforce our commitment to American taxpayers to recover funds from contractors who have unlawfully claimed them.”
P. Brian Crane, Assistant Inspector General for Investigations, Treasury Office of Inspector General, would like to thank the U.S. Department of Justice and all agents involved in this case, and states that his office is committed to investigating contract fraud within Treasury’s bureaus, and is pleased with the outcome of this investigation.
"We are vigilant to protect taxpayers from contractors who overcharge the government," said GSA Inspector General Brian D. Miller.
The claims asserted in the government’s complaint are allegations only and there has been no determination of liability. The case is United States ex rel. Lindley v. The Gallup Organization, No-09-cv-01985 (D.D.C.).
Related Materials:
Complaint
Settlement AgreementThe Gallup Organization Agrees to Pay $10.5 Million to Settle Allegations That It Improperly Inflated Contract Prices and Engaged in Prohibited Employment Negotiations with FEMA OfficialFEMA Official Also Settles with the United StatesRead the Press Release
WASHINGTON – The Justice Department announced today that the Gallup Organization has agreed to pay $10.5 million to settle allegations that it violated the False Claims Act and the Procurement Integrity Act for conduct involving several of its federal government contracts and subcontracts. Gallup is a polling and market research firm headquartered in Washington, D.C.
The settlement announced today resolves allegations in a complaint filed by the United States in November 2012. The United States’ complaint alleged that Gallup knowingly overstated its true estimated labor hours in proposals to the U.S. Mint and State Department for contracts and task orders that were to be awarded without competition. Because of Gallup’s conduct, the complaint alleged, the two federal agencies awarded Gallup contracts and task orders at falsely inflated prices. The settlement also resolves allegations that Gallup engaged in improper employment negotiations with a then Federal Emergency Management Agency (FEMA) official, Timothy Cannon, in order to obtain a FEMA subcontract at an inflated price and additional FEMA funding after the subcontract had been awarded.
“Contractors must be honest and straightforward in their contract proposals to the government,” said Stuart F. Delery, Acting Assistant Attorney General for the Civil Division of the Department of Justice. “We will pursue contractors that seek to take advantage of the government by providing estimates that do not reflect their best judgment, or by offering employment to federal officials who have a conflict of interest. This type of misconduct results in inflated contract prices and undermines the integrity of the government’s contracting process.”
Separately, in April 2013, Cannon agreed to pay $40,000 to the United States to resolve allegations that he violated the Procurement Integrity Act by improperly negotiating for and accepting an offer of employment from Gallup while being personally and substantially involved in Gallup’s subcontract with FEMA. In related criminal proceedings, on Jan. 15, 2013, Cannon pled guilty to a violation of 18 U.S.C. § 208, a federal conflict of interest statute, and was subsequently sentenced to probation.
“This case exposed a cozy arrangement between a contractor and a government employee where nobody was looking out for the American taxpayer,” said Ronald C. Machen Jr., U.S. Attorney for the District of Columbia. “With this settlement, we have held the contractor accountable for overbilling the government and returned $10.5 million to the federal treasury. This significant corporate settlement and the related criminal prosecution should send a clear message that contractors and government officials alike must operate with honor and integrity.”
The False Claims Act allegations against Gallup were originally brought in a lawsuit filed under the whistleblower provisions of the Act by Michael Lindley, Gallup’s former Director of Client Services. The False Claims Act prohibits the submission of false claims for government money or property and allows the United States to recover treble damages and penalties for a violation. Under the Act’s whistleblower provisions, a private party may file suit on behalf of the United States and share in any recovery. The United States may elect to intervene and take over the case, as it did here. As a result of the settlement with Gallup, Lindley will receive $1,929,363 as his share of the government’s recovery.
The settlement announced today is part of a global civil, criminal, and administrative resolution involving the Department of Justice’s Civil Division, the U.S. Attorney’s Office for the District of Columbia, and the United States Department of Homeland Security (DHS). After the United States’ civil complaint was filed, DHS, the parent organization of FEMA, suspended Gallup from government contracting. In contemplation of resolving the criminal and civil investigations, Gallup recently entered into an Administrative Agreement with DHS, under which Gallup agreed to enhance its corporate compliance and ethics programs. As a result, DHS lifted the suspension of Gallup. Contemporaneous with the civil settlement, Gallup has entered into a Non-Prosecution Agreement with the U.S. Attorney’s Office for the District of Columbia related to the FEMA conflict of interest allegations, in which Gallup has further agreed to strengthen its corporate compliance and ethics programs and to pay a penalty of $50,000.
The criminal investigation was conducted by the FBI and the Inspectors General for DHS and the General Services Administration (GSA).
The Deputy Inspector General for the Department of State, Harold W. Geisel, said, “We are very pleased with the successful resolution of this case, and I commend the dedication of our OIG investigators in these complicated investigations. Our efforts should reinforce our commitment to American taxpayers to recover funds from contractors who have unlawfully claimed them.”
P. Brian Crane, Assistant Inspector General for Investigations, Treasury Office of Inspector General, would like to thank the U.S. Department of Justice and all agents involved in this case, and states that his office is committed to investigating contract fraud within Treasury’s bureaus, and is pleased with the outcome of this investigation.
"We are vigilant to protect taxpayers from contractors who overcharge the government," said GSA Inspector General Brian D. Miller.
The claims asserted in the government’s complaint are allegations only and there has been no determination of liability. The case is United States ex rel. Lindley v. The Gallup Organization, No-09-cv-01985 (D.D.C.).
13-244St. Michael Woman Pleads Guilty to Felony Child Abuse and Witness TamperingRead the Press Release
FARGO – U.S. Attorney Timothy Q. Purdon announced that on July 15, 2013, Hope Louise Tomahawk Whiteshield, 32, of St. Michael, N.D., pleaded guilty before U.S. District Judge Ralph R. Erickson to one charge of felony child abuse, which caused the death of a young child, and one charge of witness tampering.
The incidents occurred in June of 2013 on the Spirit Lake Indian reservation.
In Fargo, U.S. Attorney Timothy Q. Purdon said, “The guilty pleas entered today by Hope Whiteshield are an important step in securing justice for the victims in this case. The North Dakota U.S. Attorney’s Office remains committed to protecting the children of Spirit Lake and all the Reservations in North Dakota and the primary way we serve that commitment is through the prosecution and conviction of those like Hope Whiteshield who commit crimes against children.”
Each charge carries a maximum penalty of 20 years’ imprisonment.
Under the terms of the Plea Agreement that was filed in this case, the United States will be recommending a total sentence of 30 years’ imprisonment on the two felony charges and the defendant has agreed not to seek a sentence of less than 25 years imprisonment.
The case was investigated by the Federal Bureau of Investigation and the Bureau of Indian Affairs.
Sentencing for Whiteshield will be scheduled at a later date.
Assistant U.S. Attorneys Janice M. Morley and Megan A. Healy are prosecuting the case.
Springfield Firm Pleads Guilty to Importing Thousands of Products with Counterfeit Safety Labels, Must Forfeit Lamps Worth $1.8 MillionRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Springfield, Mo., company pleaded guilty in federal court today to importing thousands of lamps from its manufacturer in China bearing counterfeit safety certification labels.
GuildMaster, Inc., represented in court by company president Stephen Crowder, pleaded guilty before U.S. Magistrate Judge David P. Rush to the felony offense of trafficking in goods with counterfeit marks. GuildMaster is a manufacturer and importer of furniture, lighting, accessories and wall art.
“This prosecution sends the important message that companies importing goods from overseas may not gain a competitive advantage over those that play by the rules, by cutting corners when it comes to safety or intellectual property rights,” Dickinson said.
Under the terms of today’s binding plea agreement, GuildMaster must forfeit to the government 5,585 lamps that were seized by U.S. Customs and Border Protection, valued at approximately $1,831,918. GuildMaster will be placed on a five-year term of probation. U. S. Customs and Border Protection will not impose penalties, but will apply the full amount of the $43,786 in cost bonds previously posted by GuildMaster to defray the government’s expenses in storing the lamps.
In December 2011, U.S. Customs and Border Protection discovered that lamps imported by GuildMaster bore counterfeit UL (Underwriters Laboratories) labels. UL is an independent product safety certification organization accredited for safety testing by the Occupational Safety and Health Administration (OSHA). For lamps meeting UL safety requirements, manufacturers are authorized to affix labels bearing the words “Portable Luminaire” and featuring the UL mark. The use of this “Portable Luminaire” label with the UL mark is the manufacturer’s representation and advertisement to the public that the lamp as a whole was certified by UL as meeting UL’s safety requirements.
Federal agents began to intercept and seize shipments of GuildMaster lamps bearing counterfeit UL labels. Between Jan. 10 and March 21, 2012 agents seized 10 shipments originating from Dongguan, China, bound for GuildMaster in Springfield. They also executed a search and seizure warrant at GuildMaster’s business office and warehouse in Springfield. The 11 seizures contained an approximate total of 5,018 lamps bearing the counterfeit “Portable Luminaire” labels with UL marks. Also, in three seizures a total of approximately 567 lamps were seized that were affixed with genuine but unauthorized “Portable Luminaire” labels bearing the UL Mark, which had been provided by UL to another company for its exclusive use and were not authorized for GuildMaster’s use.
GuildMaster was founded in Springfield in 1982. GuildMaster, which was formerly a client of UL, stopped producing its own lamps in 2005. At that time GuildMaster relocated its warehouse and closed its production facility in Springfield. Since 2005, GuildMaster has purchased lamps manufactured in China and imported them into the United States under the GuildMaster label.
GuildMaster established a Hong Kong-based trading company, Westway Enterprises Pvt. Limited, as a wholly-owned subsidiary in 2001. In May 2011, MeiHao Times Trading Co. Ltd. (located in Shenzhen, China) was established as a wholly-owned subsidiary of Westway to broker sales with Dongguan factories. This was required by Chinese law before GuildMaster could establish a mainland Chinese factory as a subsidiary.
Dongguan Yangming Hardware Crafts Limited was a manufacturer of lamps located in Dongguan City, Guangdong, China. In April 2009 GuildMaster (through Westway) began paying rent on the Dongguan factory. On Nov. 22, 2010 GuildMaster (through Westway) signed a formal three-year lease for the factory. On Oct. 11, 2011 GuildMaster (through Westway and MeiHao Times Trading Co.) purchased Dongguan Yangming Hardware Crafts Limited, including its name and export license, and operated a factory entity at that location.
According to today’s plea agreement, GuildMaster maintains that none of its agents or employees had personal knowledge that they violated U. S. laws by importing the lamps. However, GuildMaster acknowledges that the knowledge and actions of Westway employees and agents are attributed to GuildMaster because Westway was GuildMaster’s wholly-owned subsidiary. GuildMaster also acknowledges that the knowledge and actions of Dongguan employees and agents are attributed to GuildMaster because Dongguan was a wholly-owned subsidiary of MeiHao Times Trading Co. Ltd., which was a wholly-owned subsidiary of Westway.
UL certification was an important issue in the importation of electrical appliances into the United States, and Westway tracked whether each of the vendors from which it purchased lamps and components was UL certified. As of December 2009, Westway personnel knew the Dongguan factory was not UL-certified.
Before the federal seizures, GuildMaster did not inspect lamps coming from China to ascertain the authenticity of the “Portable Luminaire” certification marks placed upon the lamps. GuildMaster acknowledges that had it inspected the lamps it would have seen counterfeit and unauthorized UL marks.
This case is being prosecuted by Assistant U.S. Attorneys Steven M. Mohlhenrich and Cynthia J. Hyde. It was investigated by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI).South Carolina Man Sentenced to 75 Months in Prison for Transporting Stolen Weapons into New JerseyRead the Press Release
Cache Included Military-Style Assault Rifles, Handguns and Shotgun
NEWARK, N.J. – A South Carolina man was sentenced today to 75 months in prison for his role in transporting into New Jersey 22 firearms that were stolen from gun shops in Tennessee and North Carolina, U.S. Attorney Paul J. Fishman announced.
Bassir Baxter, 40, of Columbia, S.C., previously pleaded guilty before U.S. District Judge Susan D. Wigenton to an information charging him with one count of transporting stolen firearms in interstate commerce. Judge Wigenton imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
On March 7, 2012, Baxter, Cedric Reddick, 20, and, Reddick’s father, Bevan Holston, 41, of Columbia, S.C., drove from South Carolina to the apartment of Terrell James, 23, of Newark, to illegally sell firearms. All four were charged by Complaint with transporting stolen firearms in interstate commerce.
Baxter, Reddick and Holston entered the apartment, where there were approximately 10 other individuals, and displayed firearms on the floor for the potential buyers. In total, 22 guns were recovered, including semi-automatic handguns and military-style assault rifles. Twenty had been stolen March 1, 2012, from a gun shop in Bristol, Tenn. Two of the guns had been stolen Feb.16, 2012, from a gun shop in Boone, N.C. Police arrested James and Baxter inside the apartment. Reddick and Holston were arrested after jumping to a rooftop from the kitchen window. Holston was sentenced in May 2013 to 10 years in prison. James was sentenced last week to six months in prison. Reddick is scheduled to be sentenced July 23, 2013.
In addition to the prison term, Judge Wigenton sentenced Baxter to two years of supervised release.
U.S. Attorney Fishman credited special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Thomas J. Cannon; special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark; the Essex County Prosecutor's Office, under the direction of Acting Prosecutor Carolyn A. Murray; and the Newark Police Department, under the direction of Director Samuel DeMaio and Police Chief Sheilah Coley, with the investigation leading to today’s sentence.The government is represented by Assistant U.S. Attorney José R. Almonte of the U.S. Attorney's Office Narcotics/OCDETF Unit.
13-284Defense counsel: Thomas Ashley Esq., Newark
Sioux Falls Man Sentenced to 30 Years for Child Sex TraffickingRead the Press Release
United States Attorney Brendan V. Johnson announced that a Sioux Falls, South Dakota, man convicted of two counts of Sex Trafficking of a Child has been sentenced to 30 years in prison.
Emmanuel William Nyuon, age 34, appeared before U.S. District Judge Karen E. Schreier today and was sentenced to 360 months on each of the two counts of Sex Trafficking of a Child by Force, Fraud, or Coercion and Conspiracy to Engage in Sex Trafficking of a Child, with the sentences to run concurrently. Nyuon was also sentenced to 10 years supervised release, a $5,000 fine, and a $200 special assessment. A federal jury found Nyuon guilty of these charges on April 5, 2013.
“The sentence handed down today to Emmanuel Nyuon amplifies our message to commercial sex traffickers. Do not set up shop in South Dakota,” said U. S. Attorney Johnson. “With nine convictions, two life sentences, and others being sent away for decades, we have a prosecution rate that sends a clear and critical message that human trafficking will be not tolerated.”In the spring of 2011, the Sioux Falls Police Department (SFPD) Street Crimes Unit began investigating a criminal organization operating in and around Sioux Falls. Witnesses identified several individuals they claimed had been selling narcotics and prostitutes, which included Emmanuel Nyuon. In January of 2012, the SFPD requested federal assistance, and a team consisting of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, the Federal Bureau of Investigation, the SFPD, and the South Dakota Division of Criminal Investigation began investigating the case.
Johnson also added, “I want to recognize the law enforcement agencies that were involved in this investigation. No one entity can address this problem, and our partnerships are critical as we weed out traffickers in our state.” Johnson recently announced the formation of a Human Trafficking Task Force in South Dakota that will be comprised of law enforcement partners on the federal, state, and local levels.
Assistant U.S. Attorneys Kevin Koliner and Jeff Clapper prosecuted the case. Nyuon was remanded to the custody of the U.S. Marshal to begin serving his sentence.This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by 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 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.
Savannnah Contractor Charged with Mail Fraud and Making False Statements in Meth House Cleanup SchemeRead the Press Release
Jackson, TN – Douglas Earl McCasland, 45, of Savannah, TN, was indicted today on 10 counts of mail fraud, and three counts of making false statements regarding the proper remediation of houses where methamphetamines have been produced, announced U.S. Attorney Edward L. Stanton III.
The indictment alleges that McCasland was certified by the State of Tennessee as a Methamphetamine Remediation Contractor and operated a business known as Haz-Tech. Under state law, all harmful residues resulting from the manufacture of methamphetamine must be removed from a house before it can be re-inhabited, and a Certified Meth Lab (CML) Industrial Hygienist must test the home to determine if it is free of harmful residue.
McCasland was not a CML Industrial Hygienist but created or directed the creation of Certificates of Fitness for properties upon which his company had performed remediation work, even after being previously warned against doing so by the Tennessee Department of Environment and Conservation. These certificates were mailed to County Registrars of Deeds and law enforcement offices for the purpose of releasing these properties from quarantine.
The indictment lists at least nine properties in Shelby, Dyer, Hardin, Carroll, Humphries, and Coffee counties in West and Middle Tennessee where McCasland is alleged to have improperly certified the homes as being safe for habitation.
If convicted, he faces up to 20 years in prison and a fine of up to a $250,000 for each count of mail fraud, and up to five years in prison and a fine of up to $250,000 for each count of making false statements.
“It is well known that any building where methamphetamines have been manufactured is a dangerously toxic place unless and until it is properly cleaned and tested,” said U.S. Attorney Stanton. “As the indictment alleges, Mr. McCasland’s fraudulent actions, risked the health and safety of the individuals who moved into contaminated homes, all so that he could profit financially.”
This case is being investigated by the Environmental Protection Agency and the United States Postal Inspection Service. Assistant United States Attorney Vic Ivy is representing the government.# # # #
The charges and allegations contained in the indictment are merely accusations, and the defendants are considered innocent unless and until proven guilty.Rosebud Man Charged and Sentenced for Assault by Striking, Beating, and Wounding and Simple AssaultRead the Press Release
United States Attorney Brendan V. Johnson announced that a Mission, South Dakota, man convicted of assault charges has pled guilty and was sentenced on July 12, 2013, by U.S. Magistrate Judge Mark A. Moreno.
Kenneth Black Wolf, age 24, was sentenced to 12 months’ probation for Assault by Striking, Beating and Wounding, and 6 months’ probation for Simple Assault. He was also ordered to pay $20 to the Federal Crime Victims Fund.
The conviction stems from an incident that took place on January 28, 2013, when Black Wolf struck and bit the victim’s nose during an altercation.
The investigation was conducted by the Rosebud Sioux Tribe Law Enforcement Services. The case was prosecuted by Assistant U.S. Attorney Marie H. Ruettgers. Black Wolf was released.Rochester Man Sentenced on Drug ChargesRead the Press Release
ROCHESTER, N.Y. - U.S. Attorney William J. Hochul, Jr. announced that Joseph Schmidt, 31, of Rochester, N.Y., who was convicted of conspiracy to distribute 700 to 1,000 kilograms of marijuana, was sentenced to 97 months in prison by U.S. District Judge Charles J. Siragusa.
Assistant U.S. Attorney Douglas E. Gregory, who is handling the case, stated that the defendant and six co-defendants were arrested in January 2013. Schmidt the other defendants distributed significant quantities of marijuana which was obtained from various sources, including the Akwesasne Mohawk Indian Reservation in the Northern District of New York. The defendant also maintained sophisticated indoor marijuana grow operations at 48 Crystal Valley Overlook, in Henrietta, N.Y., and 598 Culver Parkway, in Rochester, both of which were searched by police in July 2011. Schmidt will forfeit the Henrietta home, as well as cash proceeds and nine firearms. Schmidt is the first defendant to be sentenced for his role in the drug conspiracy.
The sentencing is the culmination of an investigation on the part of special agents of the Drug Enforcement Administration, under the direction of Brian R. Crowell, Special Agent in Charge, New York Field Division, and investigators with the Rochester Police Department, under the direction of Chief James Shepard, along with members of the Greater Rochester Area Narcotics Enforcement Team (GRANET), under the direction of Lt. Gerald Smith of the Rochester Police Department.Red Lake Woman Charged with MurderRead the Press Release
MINNEAPOLIS—Last week in federal court in Bemidji, a 25-year-old Red Lake woman made her initial appearance in connection with the murder of Byron James Lussier. On July 11, 2013, Alison Ann Brown was charged via a criminal complaint with one count of murder, following her arrest. She remains in custody.
According to a law enforcement affidavit filed in the case, at approximately 4:22 a.m. July 4, 2013, officers were called to Lussier’s residence on a report that he was stabbed. When they arrived, officers found the 51-year-old victim lying on the floor with multiple stab wounds. He was taken to the Red Lake Hospital where he was pronounced dead. Witnesses told officers that Brown and Lussier got into an argument, and that Brown stabbed Lussier with a kitchen knife. After being separated from Lussier, Brown then fled the scene on foot.
If convicted, Brown faces a potential maximum penalty of life in prison. Any sentence will be determined by a federal district court judge. This case is the result of an investigation by the Red Lake Tribal Police Department and the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney Clifford B. Wardlaw.Because the Red Lake Indian Reservation is a federal-jurisdiction reservation, some of the crimes that occur there are investigated by the FBI in conjunction with the Red Lake Tribal Police Department. Those cases are prosecuted by the U.S. Attorney’s Office.
A defendant, of course, is presumed innocent until he or she pleads guilty or is proven guilty at trial.Rapid City Man Sentenced for Failing to Register as A Sex OffenderRead the Press Release
United States Attorney Brendan V. Johnson announced that a Rapid City, South Dakota, man convicted of Failure to Register as a Sex Offender was sentenced on July 10, 2013, by Chief Judge Jeffrey L. Viken, U.S. District Court.
Flute was immediately turned over to the custody of the U.S. Marshal.
Wilbur Toledo Flute, age 39, was sentenced to 12 months and one day of imprisonment, 5 years of supervised release, and ordered to pay $100 to the Federal Crime Victims Fund.
Flute was indicted for Failure to Register as a Sex Offender by a federal grand jury on March 19, 2013. From November 28, 2012, to February 27, 2013, Flute failed to update his sexual offender registration as required. He pled guilty to the charge on April 12, 2013.
This case was investigated by the U.S. Marshals Service. Assistant U.S. Attorney Eric Kelderman prosecuted the case.
Providence Man Sentenced to Federal Prison for Passing Counterfeit MoneyRead the Press Release
PROVIDENCE, R.I. – Russell Yates, 42, of Providence, was sentenced on Friday to 30 months in federal prison for possessing and passing counterfeit money, announced United States Attorney Peter F. Neronha and Brian S. Deck, Acting Resident Agent in Charge of the Providence Office of the U.S. Secret Service.
At sentencing, U.S. District Court Judge William E. Smith also ordered Yates to serve 3 years of supervised releases upon completion of his prison term. Yates pleaded guilty on March 14, 2013, to two counts of possessing and passing counterfeit Federal Reserve Notes and one count of possession of counterfeit Federal Reserve Notes.
According to information presented to the court, the general manager of a Providence hotel contacted the U.S. Secret Service on February 23, 2010, to report that a counterfeit $100 bill had been passed by a guest registered at the hotel. U.S. Secret Service agents examined the $100 bill and determined that it had been printed on an altered genuine $5 bill paper – often referred to as “bleach” counterfeit.
According to information presented to the court, when U.S. Secret Service agents responded to a room registered by Yates, they were allowed to enter the room to search for additional currency. Yates turned over a significant amount of cash he had stored in his pants pocket. An examination by U.S. Secret Service agents of the cash revealed five additional counterfeit $100 bills that were the same as the counterfeit $100 bill passed to the hotel front desk, each bearing the same serial number, and three counterfeit $50 bills. In addition, the agents seized items used in the manufacturing of counterfeit currency, including two all-in-one scanner/printers, a laptop computer, paint brushes with dried green/black ink, latex gloves and masks, metal cookie sheets and aluminum foil, and a can of an oven cleaning agent.
Through further investigation, federal agents learned that three days earlier, employees at a take-out restaurant in Providence reported receipt of $150 in counterfeit $10 and $50 bills to the Providence Police. Review of video surveillance used by the store showed Yates and others he was associated with making several purchases at the store. The $50 bill had the same serial number a genuine $50 bill and of counterfeit bills seized from Yates at the time of his arrest at the hotel.
At sentencing, the court noted that Yates has spent nearly his entire adult life incarcerated, having been waived by the courts to adult status at age seventeen. Yates was previously convicted of racketeering, inciting a riot while incarcerated at the ACI, larceny and robbery. Yates most recent release from state prison occurred six months prior to his arrest by federal agents on counterfeiting charges.
The case was prosecuted by Assistant U.S. Attorney Gerard B. Sullivan.###
To assist the media and the public, a glossary of federal judicial terms and procedures is available at http://www.justice.gov/usao/justice101/
Contact: 401-709-5357
[email protected]Providence Barber Shop Manager Pleads Guilty to Embezzling More Than $230,000 in Federal Tax RefundsRead the Press Release
PROVIDENCE, R.I. – Leticia Gonzalez, 40, of Providence, pleaded guilty in U.S. District Court in Providence on Friday to embezzling more than $230,000 from stolen federal tax checks she deposited into a business account she manages at a Providence barber shop, announced United States Attorney Peter F. Neronha, Phil Hall, Acting Special Agent in Charge of the Boston office of the Internal Revenue Service Criminal Investigation, and Brian S. Deck, Acting Resident Agent in Charge of the Providence Office of the U.S. Secret Service.
Appearing before U.S. District Court Judge John J. McConnell, Jr., Ms. Gonzalez pleaded guilty to one count of theft of government property, admitting that between April 2011 and May 2012, she deposited thirty-eight United States Treasury checks totaling more than $200,000 into the barber shop account. In addition, Gonzalez admitted that at least four electronic tax refunds in the names of third parties were deposited into bank accounts she controlled. The total amount of Treasury funds fraudulently converted by Ms. Gonzalez is approximately $231,065.
According to information presented to the court, an analysis of the bank account revealed that approximately $128,000 in cash was withdrawn from the account during the same period. In addition numerous purchases were made at various retail establishments in the Providence area.
According to information presented to the court, an Internal Revenue Service (IRS) agent examined a random sample of ten tax returns associated with the refund checks; all ten were determined to be associated with fraudulent income tax returns, using false W-2 information and the names and social security numbers of people living in Puerto Rico. The IRS agent contacted each of the employers listed on the Forms W-2, and in every instance the employer confirmed that the listed person never worked at their company.
Gonzalez is scheduled to be sentenced on October 2, 2013. Theft of government property is punishable by up to 10 years in federal prison; 3 years of supervised release and a fine of up to $250,000.
The case is being prosecuted by Assistant U.S. Attorney John P. McAdams.
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To assist the media and the public, a glossary of federal judicial terms and procedures is available at http://www.justice.gov/usao/justice101/
Contact: 401-709-5357
[email protected]Omaha Man Sentenced in Crack ConspiracyRead the Press Release
United States Attorney Deborah R. Gilg announced that Diwancha Brown, 39, formerly of Omaha, Nebraska, was sentenced today in Lincoln, Nebraska, to 21 years and 10 months in prison by United States District Judge John M. Gerrard, for Conspiracy to distribute over 280 grams of cocaine base (crack cocaine). After completion of his prison sentence, Mr. Brown will serve a 5 year term of supervised release.
Brown sold crack cocaine from apartments in the near south are of Lincoln with, among others, his co-defendant, Teresa Liggins, from early 2011 to approximately May of 2012.
This case was investigated by the Lincoln Police Department.
Ocean County, N.J., Man Sentenced to 78 Months in Prison for Possession of Child PornographyRead the Press Release
TRENTON, N.J. – An Ocean County, N.J., man was sentenced today to 78 months in prison for possessing child pornography on his computer and an external hard drive, including images of children being sexually abused, U.S. Attorney Paul J. Fishman announced.
William A. Burrows, 60, of Lacey, N.J., previously pleaded guilty before U.S. District Judge Michael A. Shipp to an information charging him with possession of child pornography. Judge Shipp imposed the sentence today in Trenton federal court.
According to documents filed in this case and statements made in court:Burrows admitted that from March 2011 to April 2012, he downloaded videos and images of child pornography. On or about April 12, 2012, law enforcement officers executed a search warrant at Burrows’ home and seized a desktop computer and external hard drive, which contained more than 600 images of child pornography, including images of prepubescent minors and sadistic or violent conduct involving minors.
U.S. Attorney Fishman credited special agents of the FBI Child Exploitation Task Force, under the direction of Special Agent in Charge Aaron T. Ford in Newark; and the Ocean County Prosecutor’s Office, under the direction of Prosecutor Joseph D. Coronato, with the investigation leading to today’s sentence.
In addition to the prison term, Judge Shipp sentenced Burrows to five years of supervised release, fined him $12,500, and ordered payment of $10,000 in restitution. He also ordered restricted contact with minors, computer-use monitoring and required Burrows to register as a sex offender.
The government is represented by Special Assistant U.S. Attorney Joseph Muoio of the U.S. Attorney's Trenton Office.
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Defense counsel: John S. Furlong Esq. West Trenton, N.J.
Ocala Man Arrested for Manufacturing Machine Guns and Firearm SilencersRead the Press Release
Ocala, Florida - Acting United States Attorney A. Lee Bentley, III announces the arrest today of Charles Robert Lester (48, Ocala) on charges of possession of firearms and ammunition by an unlawful user of a controlled substance; unlawful possession and transfer of machine guns; and unlawful possession and transfer of unlicensed machine guns and firearm silencers. Each of these offenses carries a maximum penalty of 10 years in federal prison.
According to court documents, on June 24, 2013, Lester’s family contacted local authorities because of threats he had made to kill them. When detectives with the Marion County Sheriff’s Office responded to Lester’s Ocala residence, they found Lester with a concealed .22 caliber handgun in his pocket and a .40 caliber handgun in a holster on his hip. The holstered gun had been illegally modified to fire as a fully-automatic weapon. After obtaining a search warrant for the residence, agents subsequently recovered five additional firearms that had been illegally converted into machine guns; two firearm silencers; numerous rounds of ammunition; and assorted drug paraphernalia. None of the fully automatic weapons or firearm silencers had ever been registered with the Bureau of Alcohol, Tobacco, Firearms and Explosives, (ATF) as required by federal law. Lester’s family members told authorities that Lester had been building and selling the illegal firearms over the Internet.
A criminal complaint is merely an allegation that a defendant has committed a violation of the federal criminal laws, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by the Marion County Sheriff’s Office and ATF. It will be prosecuted by Assistant United States Attorney Robert E. Bodnar, Jr.
It is another case prosecuted as a part of the Department of Justice’s “Project Safe Neighborhoods” program - a nationwide, gun-violence reduction strategy. Acting United States Attorney A. Lee Bentley, III, along with Julie Torres, Special Agent in Charge, ATF, is coordinating the Project Safe Neighborhoods effort here in the Middle District of Florida in cooperation with federal, state, and local law enforcement officials.
North Carolina Used Oil Recycling Business and Owner Plead Guilty to Unlawful Handling of PCB-Contaminated Used Oiland Other CrimesRead the Press Release
Benjamin Franklin Pass, 60, and P&W Waste Oil Services Inc. of Wilmington, N.C., pleaded guilty today in federal court in the Eastern District of North Carolina for violations of the Toxic Substances Control Act, as well as for making false statements and failing to pay several years of taxes, announced the Department of Justice’s Environment and Natural Resources Division and the U.S. Attorney’s Office for the Eastern District of North Carolina. The defendants admitted to, among other things, the unlawful handling of a toxic substance that resulted in widespread contamination.
The P&W facility in Leland, N.C., included a tank farm consisting of multiple tanks ranging from 20,000 gallons to 500,000 gallons. The facility is located approximately 500 feet to the east of the Cape Fear River and a federally recognized wetland.
As part of its business operations, P&W transported, processed and marketed used oil contaminated with polychlorinated biphenyls (PCBs). P&W received the used oil from small and large companies, such as automotive service stations, transformer repair companies and marinas. P&W also conducted tank cleaning and waste removal.
According to the charges filed in federal court in Raleigh, N.C., and information stated in open court, the defendants knowingly failed to comply with regulations covering PCB-contaminated used oil by unlawfully transporting, storing and disposing of used oil contaminated with PCBs. Specifically, in July 2009, an employee transported waste oil containing fluid from five PCB transformers from a site in Wallace, S.C., to the P&W facility. The investigation revealed that the waste oil was contaminated with PCB concentrations in excess of 500 parts per million.
“Enforcing our environmental laws is essential to protecting the health of North Carolina’s residents and their natural resources,” said Robert G. Dreher, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “PCBs are well known to pose substantial risks to human health and the environment and must be handled responsibly and lawfully. We will continue to vigorously prosecute those who ignore the laws Congress enacted in order to protect the people and the environment from coming into contact with this toxic substance.”
“This disregard of environmental protections resulted in significant contamination,” said U.S. Attorney for the Eastern District of North Carolina Thomas G. Walker. “The defendant’s conduct placed an economic burden on the United States and an unreasonable risk to the health and safety of the citizens of North Carolina.”
Despite knowledge of the investigation into the defendants’ illegal handling of PCB-contaminated used oil, Pass and an employee of P&W (at Pass’ direction) continued to unlawfully dilute the contaminated used oil. The mishandling of the PCB-contaminated used oil resulted in the wide-spread contamination at the site and other sites, resulting in millions of dollars in cleanup costs.
PCBs pose such an unreasonable risk of injury to human health and the environment that effective Jan. 1, 1978, Congress banned the production of PCBs and mandated that no person may distribute in commerce, or use any PCBs other than in a totally enclosed manner, and directed the U.S. Environmental Protection Agency (EPA) to promulgate rules phasing out the manufacture of PCBs and regulating their disposal.
As part of the plea agreements, Pass agreed to pay $538,587, plus interest, in restitution to the Internal Revenue Service. P&W agreed to pay restitution in the amount of $19 million as compensation to Colonial Oil and International Paper for the costs associated with the storage and proper disposal of PCB-contaminated used oil as well as any monetary losses associated with the illegal handling, storage and transportation of toxic substances. P&W also agreed to a five-year term of probation and to take remedial action to address the environmental contamination at its facility in eastern North Carolina and other leased property in eastern North Carolina, including but not limited to, the proper treatment and/or disposal of PCB-contaminated waste oil.
Currently, efforts are underway to clean up the contamination at P&W’s facility in Leland, N.C., which has been designated a Superfund site by the EPA. Superfund is the name given to the federal environmental program established to clean up the nation’s uncontrolled hazardous waste sites.
“The license to run a business is not a license to avoid paying taxes,” said Richard Weber, Chief, Internal Revenue Service (IRS) Criminal Investigation. “IRS Criminal Investigation provides financial investigative expertise in our work with our law enforcement partners. As today’s announcement shows, our skills support a wide range of investigations. Pass’ plea demonstrates the strength of our collective efforts to enforce the law and ensure public trust.”
“The defendant's failure to notify EPA of the presence and intentional dilution of PCB-contaminated fuel oil not only posed a risk to public health and the environment, but also demonstrated the level of disregard for the laws that were designed to protect us.” said Maureen O'Mara, Special Agent in Charge of Environmental Protection Agency’s (EPA) criminal enforcement office in Atlanta. “Today’s guilty plea sends a clear message that the government will prosecute those who recklessly endanger the health of our communities and environment by ignoring the law.”
The defendants entered their plea before U.S. District Judge James C. Dever III of the Eastern District of North Carolina.
U.S. Attorney Walker and Acting Assistant Attorney General Dreher praised the efforts of the EPA’s Criminal Investigation Division and the IRS’s Office of Criminal Investigations and the U.S. Coast Guard’s Criminal Investigative Services for their diligent work in the investigation of this matter. Assistant U.S. Attorney Banumathi Rangarajan of the Eastern District of North Carolina and Trial Attorney Shennie Patel of the Justice Department’s Environmental Crimes Section of the Environment and Natural Resources Division are the prosecutors in charge of the case.Norman Dentist Pays $40,000 to Resolve Claims of Improperly Issuing Prescriptions for Controlled SubstancesRead the Press Release
Oklahoma City, Oklahoma -- Ronald L. Williams, D.D.S., who practices in Norman, Oklahoma, has agreed to pay $40,000 to the United States to settle allegations that he issued prescriptions to individuals for controlled substances that were not for a legitimate medical purpose and not in the ordinary course of professional practice, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma.
The United States alleged that from May 19, 2010, and May 18, 2012, Dr. Williams issued prescriptions for controlled substances to individuals without performing physical examinations and without having an established dentist/patient relationship. In reaching this settlement, Dr. Williams did not admit liability, and the government did not make any concession regarding the legitimacy of the claims. The agreement allows the parties to avoid the delay, expense, inconvenience, and uncertainty involved in litigating the case.
This case was investigated by the Drug Enforcement Administration’s Office of Diversion Control and was prosecuted by Assistant United States Attorney Ronald R. Gallegos.
New London Man Sentenced to 48 Months in Prison for Illegally Possessing FirearmRead the Press Release
Deirdre M. Daly, Acting United States Attorney for the District of Connecticut, announced that ROBERT CABANBAN JR., 23, of New London, was sentenced today by United States District Judge Stefan R. Underhill in Bridgeport to 48 months of imprisonment, followed by three years of supervised release, for illegally possessing a firearm.
According to court documents and statements made in court, on two occasions in September 2012, CABANBAN sold heroin to an individual at his Maple Avenue apartment. On September 26, 2012, members of the New London Police Department executed a state search warrant at CABANBAN’s residence and seized approximately 12 grams of heroin, narcotics packaging materials and a loaded, .380 caliber semi-automatic pistol. CABANBAN arrived home during the search and attempted to flee. He was apprehended a short time later and a search of his person revealed $6,220 in cash.
CABANBAN’s criminal history includes state felony convictions for possession with intent to sell narcotics and burglary in the third degree.
CABANBAN has been detained on state charges since his arrest on September 26, 2012. On April 22, 2013, he pleaded guilty to one count of possession of a firearm by a previously convicted felon.
This matter was investigated by the New London Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives. The case was prosecuted by Assistant United States Attorneys Sarah P. Karwan and Alina Reynolds.
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(203) 821-3722 [email protected]Navajo Nation Human Rights Commission and Civil Rights Division Indian Working Group Create Communication BridgeRead the Press Release
Today marked the establishment of a memorandum of understanding (MOU) between the Navajo Nation Human Rights Commission and the Civil Rights Division’s Indian Working Group (IWG). The MOU will establish a communication process that will ensure that civil rights violations are brought to the IWG when the civil rights of a member of the Navajo Nation is violated.
The commission was established as an entity of the Navajo Nation government to operate as a clearinghouse entity to address discriminatory actions against citizens of the Navajo Nation. The commission works to ensure that Navajo citizens are free from discrimination and are free to enjoy basic human rights and fundamental freedoms. The commission is authorized to receive reports of discriminatory and racially motivated acts perpetrated against citizens of the Navajo Nation and refer such incidents to the proper authorities.
The IWG is a part of the Justice Department’s Civil Rights Division and is comprised of members from throughout the Civil Rights Division. The mission and purpose of the IWG is to assist the Civil Rights Division in its law enforcement duties and responsibilities toward Native Americans. The IWG works to identify issues that affect Native Americans and to refer, coordinate, support and monitor enforcement and outreach activities involving Native Americans.
The MOU evolved from discussions on May 25, 2012 between the commission, Albert Sanchez, Program Analyst for the New Mexico Equal Employment Opportunity Commission (NMEEOC), and Albert Baltazar, Special Counsel of the Civil Rights Division regarding civil rights violations in border towns surrounding the Navajo Nation.
The MOU promotes and encourages enforcement of federal civil rights laws by increasing communication between the Commission and IWG. The MOU outlines procedures and provides guidance to the Commission and IWG in sharing information about civil rights issues affecting citizens of the Navajo Nation.
“This MOU will assist the Commission by streamlining and expediting information between agencies to resolve civil rights violations that are not afforded the same investigative measures that non-indigenous victims receive. This MOU will be that stepping stone toward resolving issues that this Commission has had difficulty with pursuing in the border towns surrounding the Navajo Nation” said Commissioner Darden, chairperson of the Commission.
“This MOU between the Navajo Nation Human Rights Commission and the Indian Working Group establishes a strong mechanism to assist the Civil Rights Division to address civil rights issues involving citizens of the Navajo Nation, “ said Eve Hill, Senior Counselor to the Assistant Attorney General for Civil Rights. “For far too long Native Americans have experienced discrimination and injustice, and the federal government can and must stop such discrimination.”
“With the MOU approved by both the Navajo Nation and U.S. civil rights office, the Navajo Human Rights Office now looks forward to working on common strategy to address race discrimination against Navajo citizens,” said Leonard Gorman, Executive Director of the Office of Navajo Nation Human Rights Commission.
A copy of the signed MOU may be viewed at http://www.justice.gov/crt/publications/mouiwg.pdf
Morristown Dentist Indicted for TennCare FraudRead the Press Release
GREENEVILLE, Tenn. – On Jul. 9, 2013, a federal grand jury in Greeneville returned an indictment against Gary Dean Stump, D.M.D., 57, of Bean Station, Tenn., charging him with health care fraud for submitting false claims to TennCare’s program for dental services to children, TennDent.
Stump appeared in court on Jul. 15, 2013 before U.S. Magistrate Judge Dennis H. Inman and pleaded not guilty. He was released pending trial, which has been set for Sept. 16, 2013, in U.S. District Court, in Greeneville, Tennessee, before the Honorable R. Leon Jordan, U.S. District Court Judge.
According to the indictment on file with the U.S. District Court, Stump, a dentist practicing in Morristown, Tenn., submitted false claims to TennCare’s TennDent program between August 2011 and August 2012. TennCare is the State of Tennessee’s Medicaid health care benefit program for the indigent. TennCare contracts with Delta Dental to manage TennCare’s dental benefits for TennCare recipients under the age of 21 through a program called TennDent. Under TennDent, children can receive comprehensive dental services as medically necessary from participating dentists. The dentists then submit claims to Delta Dental for reimbursement for the services provided.
The indictment alleges that Stump submitted false claims to TennDent for nitrous oxide analgesia, making false notations on patient treatment records that the analgesia had been provided when it had not. Stump is also alleged to have submitted false claims for reimbursement for other dental services and procedures not provided, including crowns, root canals, and dentures. Stump received approximately $11,000 in reimbursement to which he was not entitled.
If convicted, Stump faces a term of 20 years in prison on each of the 18 counts as well as fines of up to $250,000 on each count and three years of supervised release.
This indictment is the result of an investigation by the Tennessee Bureau of Investigation’s Medicaid Fraud Control Unit. Assistant U.S. Attorney Neil Smith will represent the United States.
Members of the public are reminded that an indictment constitutes only charges and that every person is presumed innocent until their guilt has been proven beyond a reasonable doubt.
Morristown Dentist Indicted for TennCare FraudRead the Press Release
GREENEVILLE, Tenn. – On Jul. 9, 2013, a federal grand jury in Greeneville returned an indictment against Gary Dean Stump, D.M.D., 57, of Bean Station, Tenn., charging him with health care fraud for submitting false claims to TennCare’s program for dental services to children, TennDent.
Stump appeared in court on Jul. 15, 2013 before U.S. Magistrate Judge Dennis H. Inman and pleaded not guilty. He was released pending trial, which has been set for Sept. 16, 2013, in U.S. District Court, in Greeneville, Tennessee, before the Honorable R. Leon Jordan, U.S. District Court Judge.
According to the indictment on file with the U.S. District Court, Stump, a dentist practicing in Morristown, Tenn., submitted false claims to TennCare’s TennDent program between August 2011 and August 2012. TennCare is the State of Tennessee’s Medicaid health care benefit program for the indigent. TennCare contracts with Delta Dental to manage TennCare’s dental benefits for TennCare recipients under the age of 21 through a program called TennDent. Under TennDent, children can receive comprehensive dental services as medically necessary from participating dentists. The dentists then submit claims to Delta Dental for reimbursement for the services provided.
The indictment alleges that Stump submitted false claims to TennDent for nitrous oxide analgesia, making false notations on patient treatment records that the analgesia had been provided when it had not. Stump is also alleged to have submitted false claims for reimbursement for other dental services and procedures not provided, including crowns, root canals, and dentures. Stump received approximately $11,000 in reimbursement to which he was not entitled.
If convicted, Stump faces a term of 20 years in prison on each of the 18 counts as well as fines of up to $250,000 on each count and three years of supervised release.
This indictment is the result of an investigation by the Tennessee Bureau of Investigation’s Medicaid Fraud Control Unit. Assistant U.S. Attorney Neil Smith will represent the United States.
Members of the public are reminded that an indictment constitutes only charges and that every person is presumed innocent until their guilt has been proven beyond a reasonable doubt.
Miami Woman Sentenced in Identity Theft Tax Refund Fraud SchemeRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Michael J. DePalma, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), Tom Caul, Acting Special Agent in Charge, Social Security Administration, Office of Inspector General (SSA-OIG), and Steven Steinberg, Chief, Aventura Police Department, announced today that Natoya Mashea Handy, 30, of Miami, was sentenced for her participation in a tax refund scheme using stolen identities to convert government monies for her own use. Handy was sentenced to 51 months in prison to be followed by two years of supervised release. A restitution hearing was also ordered but will be determined at a later hearing.
On April 12, 2013, Handy was convicted by a jury of one count of access device fraud in violation of Title 18, United States Code, Section 1029(a)(3), and five counts of aggravated identity theft in violation of Title 18, United States Code, Section 1028A, in connection with an identity theft tax refund fraud scheme.
According to testimony and evidence presented at trial, on or about April 5, 2012, the defendant was found with at least fifteen (15) social security numbers, names, and dates of birth belonging to persons who were formerly or presently incarcerated by the state of Florida. The trial testimony and evidence further showed that fraudulent tax returns were filed for tax year 2011 for seventeen (17) of the individuals whose social security numbers the defendant possessed. Each of these fraudulent tax returns fraudulently claimed entitlement to a refund, amounting to thousands of dollars in fraud.
Mr. Ferrer commended the investigative efforts of the Identity Theft Tax Refund Strike Force, with special commendation to the City of Aventura Police Department, the City of Miami Gardens Police Department, and IRS-CI, with assistance from the SSA-OIG. The case is being prosecuted by Assistant U.S. Attorneys Alexandra Hui and Amanda Perwin.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Members of Robbery Crew Receive Lengthy Prison SentencesRead the Press Release
Orlando, Florida - Acting United States Attorney A. Lee Bentley, III announces that U.S. District Judge Gregory A. Presnell today sentenced Jimmy Anthony Montgomery, Jr. (25, Deland) to 15 years in federal prison for a drug trafficking conspiracy and possession of a firearm in furtherance of a drug trafficking offense. The court also sentenced Brandon Terrance Blanks (25, Deland) to 11 years’ imprisonment for the same charges. Montgomery pleaded guilty on March 25, 2013. Blanks pleaded guilty on March 26, 2013.
According to court documents, Blanks, Montgomery, Dexter Eugene Mims, and Genesis Mark Chappelle all conspired to commit an armed drug robbery. During the course of the planning, they met several times with an undercover agent to make arrangements to carry out the robbery. During a subsequent search of a house where the individuals gathered, on the morning prior to executing the robbery, agents found two assault-style rifles and two handguns, which the individuals had planned to use in the crime.
On May 20, 2013, Chappelle was sentenced to 17 years in prison and Mims was sentenced to 10 years’ imprisonment, for their respective roles in the crime.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives. It was prosecuted by Assistant United States Attorney Vincent S. Chiu.
Member of the Scripps Media Family Sentenced to Nine Years in Prison for Stealing Millions from FamilyRead the Press Release
Financial Advisor Also Sentenced to Prison for His Role in the Scheme
PHILADELPHIA – A member of the Scripps Media family was sentenced today to 108 months in prison for embezzling $3.6 million from members of his family to fund his lavish lifestyle, New Jersey U.S. Attorney Paul J. Fishman announced.
Michael Scripps, 36, of Detroit, was convicted by a jury on April 12, 2013, following a one and a half week trial before U.S. District Judge Legrome D. Davis. Scripps was convicted of all seven counts of wire fraud charged in the indictment on which he was tried. Also sentenced today was Richard Gleeson, 37, formerly a Merrill Lynch financial advisor in Media, Pa., who previously pleaded guilty to two counts of wire fraud for his participation in the scheme and testified at the Scripps trial. Judge Davis sentenced Gleeson to a year and a day in prison.
The case was prosecuted in Philadelphia by Assistant U.S. Attorneys from the U.S. Attorney’s Office for the Eastern District of Pennsylvania, supervised by the U.S. Attorney’s Office for the District of New Jersey as the former office was recused from the case. Judge Davis imposed the sentence today in Philadelphia federal court.
According to documents filed in this case and the evidence at trial:
From November 2001 through October 2006, Michael Scripps persuaded his uncle and mother to transfer millions of dollars in trust funds to the Merrill Lynch Trust Co. and brokerage firm. With the assistance of Gleeson, Scripps used fraudulent authorizations to transfer his uncle’s and mother’s money to his own account at Merrill Lynch, resulting in $2.9 million in losses. Scripps also fraudulently transferred $727,500 from the refinancing of the victims’ Michigan home to another bank account belonging to Scripps.
The jury heard testimony that Scripps used some of the ill-gotten gains to lead a playboy lifestyle, including by purchasing expensive jewelry. He bought Tiffany earrings, a diamond ring and a Cartier necklace. He also used some of the stolen money to purchase a car for his girlfriend, four properties in New Orleans and for luxury travel across the U.S.
In addition to the prison term, Judge Davis sentenced Scripps to serve three years of supervised release and ordered him to pay $3,634,019 in restitution. Judge Davis also sentenced Gleeson to serve three years of supervised release.
U.S. Attorney Fishman credited special agents of the Philadelphia FBI, Newtown Square Resident Agency, under the direction of Special Agent in Charge Edward J. Hanko, with the investigation leading to today’s sentence.
The government is represented by Assistant U.S. Attorneys Terri Marinari and L.C. Wright of the U.S. Attorney’s Office for the Eastern District of Pennsylvania.
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Defense counsel: Mark Durant Esq., Philadelphia; Paul W. Broschay Esq. and Michael R. Dezsi Esq., DetroitMassachusetts Man Charged with Selling Counterfeit Semiconductors Intended for Use on Nuclear SubmarinesRead the Press Release
Peter Picone, 40, of Methuen, Mass., has been charged with importing counterfeit semiconductors from China for sale in the United States.
The charges were announced today by Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; Acting U.S. Attorney for the District of Connecticut Deirdre M. Daly; Special Agent in Charge Bruce Foucart of U.S. Immigration and Customs Enforcement (ICE) - Homeland Security Investigations (HSI) in Boston; Acting Special Agent in Charge of Defense Criminal Investigative Service (DCIS) Northeast Field Office Craig W. Rupert; and Special Agent in Charge of the Naval Criminal Investigative Service (NCIS) Northeast Field Office Cheryl A. DiPrizio.
The eight-count indictment charges Picone with conspiring to traffic in counterfeit goods, conspiring to traffic in counterfeit military goods, trafficking in counterfeit goods, conspiring to commit wire fraud, wire fraud and conspiring to commit money laundering. The indictment was returned by a federal grand jury in New Haven on June 25, 2013, and was unsealed today.
The indictment charges that from February 2007 through April 2012, Picone, through two companies he owned and operated, Tytronix Inc. and Epic International Electronics, purchased counterfeit semiconductors from sources in Hong Kong and China. According to the indictment, Picone made false representations about the semiconductors and sold them to customers throughout the United States, including companies believed by Picone to be defense contractors in Connecticut and Florida. Certain semiconductors sold by Picone were intended for use on nuclear submarines.
“By allegedly purchasing and reselling counterfeit semiconductors for military applications, Peter Picone put personal gain above the safety and well-being of dedicated U.S. servicemen and women,” said Acting Assistant Attorney General Raman. “As charged in the indictment, Picone went to great lengths to conceal the true origin of counterfeit semiconductors in order to sell the devices as seemingly legitimate and reliable components for use in nuclear submarines and other complex machinery. The charges unsealed today demonstrate our steadfast commitment to working with our law enforcement partners to prosecute counterfeiters and others who risk the security of the men and women of the U.S. military.”
“Counterfeit semiconductors pose a serious health and safety risk to consumers and end-users, and an even greater threat to the safety of the men and women of our armed services when they are sold for use in the military,” said Acting U.S. Attorney Daly. “We will prosecute these types of cases to the fullest extent of the law.”
“Today’s charges demonstrate the continued commitment of the Defense Criminal Investigative Service and our peer agencies to protect the Department of Defense’s supply chain from being infiltrated and compromised with inferior components,” said DCIS Northeast Field Office Acting Special Agent in Charge Rupert. “Safeguarding our warfighters and ensuring their equipment functions at the absolute highest levels is vital to our nation’s defense and readiness. Detecting and dismantling the operations of suppliers who choose to make a profit by supplying counterfeit or inferior products is a DCIS priority. I applaud the agents and prosecutors who worked tirelessly to bring about this result.”
“Trafficking in counterfeit sensitive technologies is an extremely dangerous practice on several fronts. Not only are there significant risks associated with the transportation of this faulty equipment, but our own American servicemembers are also put in harm’s way when they encounter substandard equipment,” said ICE-HSI Special Agent in Charge Foucart. “One of HSI's top enforcement priorities is protecting the integrity of U.S. military products and other sensitive technology.”
“Counterfeit semiconductors represent a serious threat to the safety of our military service members and raise national security concerns,” said NCIS Special Agent in Charge DiPrizio. “The introduction of defective equipment into the military supply chain can result in product failure, property damage and even serious bodily injury, including death. Some of these counterfeit devices can also be preprogrammed with malicious code and enable computer network intrusion. NCIS has worked closely with our law enforcement partners at DCIS and ICE-HSI in identifying unscrupulous suppliers and bringing them to justice.”
Picone was arraigned before U.S. Magistrate Judge Donna F. Martinez of the District of Connecticut in Hartford, Conn., and was released on bond. Trial is scheduled for Sept. 9, 2013, before U.S. District Judge Alvin W. Thompson in Hartford.
If convicted of conspiracy to traffic in counterfeit goods, Picone faces a maximum penalty of five years in prison. If convicted of conspiracy to traffic in counterfeit military goods, Picone faces a maximum term of 20 years in prison. If convicted of trafficking in counterfeit goods, Picone faces a maximum term of 10 years in prison. If convicted of conspiracy to commit wire fraud, or wire fraud, Picone faces a maximum penalty of 20 years in prison. If convicted of conspiracy to commit money laundering, Picone faces a maximum term of 20 years in prison.
The indictment also seeks forfeiture of proceeds from illicit trafficking in counterfeit goods and wire fraud as well as the seizure of the goods and any property involved in the money laundering conspiracy.
The charges and allegations contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
The case was jointly investigated by HSI, DCIS and NCIS. The case is being prosecuted by Assistant U.S. Attorney Edward Chang of the District of Connecticut and Trial Attorneys Kendra Ervin and Carol Sipperly of the Criminal Division’s Computer Crime and Intellectual Property Section. Trial Attorney Kristen M. Warden of the Criminal Division’s Asset Forfeiture and Money Laundering Section is assisting with the forfeiture aspects of the case.
The enforcement action announced today is one of many efforts being undertaken by the Department of Justice Task Force on Intellectual Property (IP Task Force). Attorney General Eric Holder created the IP Task Force to combat the growing number of domestic and international intellectual property crimes, protect the health and safety of American consumers, and safeguard the nation’s economic security against those who seek to profit illegally from American creativity, innovation, and hard work. The IP Task Force seeks to strengthen intellectual property rights protection through heightened criminal and civil enforcement, greater coordination among federal, state, and local law enforcement partners, and increased focus on international enforcement efforts, including reinforcing relationships with key foreign partners and U.S. industry leaders. To learn more about the IP Task Force, go to www.justice.gov/dag/iptaskforce/.
Manderson Man Sentenced for Stolen Vehicle ChargeRead the Press Release
United States Attorney Brendan V. Johnson announced that a Manderson, South Dakota, man convicted of Interstate Transportation of Stolen Motor Vehicle was sentenced on July 10, 2013, by Chief Judge Jeffrey L. Viken, U.S. District Court.
Clayton J. Fire Thunder, age 28, was sentenced to time served, one year of supervised release, and ordered to pay $100 to the Federal Crime Victims Fund.
Fire Thunder was indicted for Larceny and Interstate Transportation of a Stolen Motor Vehicle by a federal grand jury on March 20, 2012, and pled guilty to the second charge on March 13, 2013.
The conviction stems from an incident on January 13, 2012, at White Clay, Nebraska, wherein Fire Thunder stole a pickup truck and led police units on a chase around the Pine Ridge Indian Reservation before being cornered by the police.
This case was investigated by the Bureau of Indian Affairs, Office of Justice Services, and the Oglala Sioux Tribe Department of Public Safety. Assistant U.S. Attorney Eric Kelderman prosecuted the case.
Manchester, N.H. Woman Sentenced to 10 Years for Obtaining U.S. Citizenship Unlawfully by Concealing Her Role in GenocideSentenced to 10 Years for Concealing Her Personal Participation in the 1994 Rwandan GenocideRead the Press Release
CONCORD, N.H. - A Manchester, N.H. woman was sentenced today by a federal judge in New Hampshire for two counts of procuring citizenship unlawfully. This is the first such conviction in the nation based on concealing one’s personal participation in Rwandan genocide.
District Court Judge Stephen J. McAuliffe sentenced Beatrice Munyenyezi, 43, to 10 years in prison, the maximum sentence for the charge of procuring citizenship unlawfully. She also faces removal proceedings after serving the sentence imposed by the court. Judge McAuliffe also stripped Munyenyezi of her U.S. citizenship on the day of her conviction.
Munyenyezi was charged in June 2010 and later convicted in March 2012, by a federal jury in N.H. who found that she had obtained her U.S. citizenship unlawfully, after fleeing her home country of Rwanda, by misrepresenting material facts to U.S. Immigration authorities.
Judge McAuliffe stated in court, “She has stolen the highly prized status of U.S. citizenship,” and “The defendant was not a mere spectator; the defendant personally participated in the killing of men, women and children, merely because they were called Tutsi.” He also stated, “This is the most egregious violation of [the statute] that one can imagine.”
Testimony during the 12-day trial revealed that Munyenyezi concealed her role in the 1994 Rwandan genocide, including her involvement in the MRND (National Republican Movement for Democracy and Development), the political party in power before and during the genocide, and its youth wing, the Interahamwe. The Interahamwe ran a militia that played a key role in the genocide. Evidence at trial demonstrated that Munyenyezi, as a member of the Interahamwe, participated in and aided and abetted persecution and murder of Tutsi people during the 1994 genocide. Several witnesses testified to Munyenyezi’s staffing of a notorious roadblock outside of her home during the course of the genocide, where she checked identification of passers-by and decided who would be allowed to pass, and who would be detained pending their almost certain death. The evidence demonstrated that Munyenyezi misrepresented these facts in order to obtain immigration and naturalization benefits, and was ineligible to become a citizen because her participation in genocide and murder precluded her from U.S. citizenship.
United States Attorney Carmen M. Ortiz said, “Today’s sentence should send a clear message to those involved in human rights violations that the United States will not protect those who take advantage of our accepting borders. I want to thank the tireless efforts of the prosecution team and investigators in this case, who have worked doggedly to ensure that justice is served.”
“Today’s sentencing clearly demonstrates that this nation will never be a safe haven for human rights violators and war criminals,” said Bruce M. Foucart, Special Agent in Charge of HSI Boston. “After a stellar collaborative investigation and prosecution by HSI special agents and our partners at the U.S. Attorney's Office for the District of Massachusetts, Munyenyezi will be held accountable for disguising her role as a participant in the Rwandan genocide. I am hopeful that this case will send a message to others like Munyenyezi: HSI will never allow our country to be a place where individuals seeking to distance themselves from their pasts can hide or evade detection.”Homeland Security Investigations investigated the case with the assistance of the Department of State Diplomatic Security Service. The case was prosecuted by Special Assistant U.S. Attorneys Aloke Chakravarty and John Capin from Ortiz’s Anti-Terrorism Unit in the District of Massachusetts.
Los Angeles Man Sent to Federal Prison for Soliciting A Child for SexRead the Press Release
CORPUS CHRISTI, Texas – Jeffrey Todd Howard, 34, of Los Angeles, Calif., has been ordered to prison following his conviction of soliciting a child for sex through the Internet, United States Attorney Kenneth Magidson announced today. Howard was convicted after a two-day bench trial before Senior U.S. District Judge John D. Rainey on April 4, 2013.
Today, Judge Rainey handed Howard a total sentence of 120 months in federal prison. Howard will also be required to serve a term of 10 years of supervised release following completion of the prison term during which time he will be required to comply with numerous conditions of release designed to limit his contact with children.
During trial, the government called several witnesses detailing the offense. The court learned that in February 2012, a concerned citizen reported disturbing online communications with a person she had met online. During those communications, Howard offered to pay the citizen to obtain children so he could have sex with them. An undercover detective with the Corpus Christi Police Department’s Internet Crimes Against Children Task Force (CCPD-ICAC) instructed the citizen to provide Howard with an email of her “friend” who might be able to help him obtain children for sex.Howard emailed the undercover officer and began a month long series of communications ending in late March 2012. During the course of those communications, Howard discussed his desire to engage in criminal sexual acts with the officer’s 11 and 14-year-old daughters. Howard discussed how the officer should prepare her daughters in advance of his sexual encounter with them. Howard also sent pictures of his genitals to be shown to the daughters to increase their sexual interest in him.
Homeland Security Investigations (HSI) assisted in the investigation and discovered Howard had expressed an interest in sexually assaulting children with other women in the past. After his arrest in Los Angeles in November 2012, his phone was examined and determined to contain more than 1300 images which indicated a sexual interest in children.
Howard testified during his trial and admitted he had been sexually interested in children for two years but denied any intention to act on those desires.
Howard will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
CCPD-ICAC and HSI investigated.
This case, prosecuted by Assistant United States Attorney Lance Duke, was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to locate, apprehend and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Local Man Sentenced to 10 Years on Sex Trafficking ChargesRead the Press Release
St. Louis, MO – St. Louis, MO - Carl Mathews was sentenced to 120 months in prison on charges involving the sex trafficking of two area women by force and intimidation.
According to statements made in court during his plea, between 2010 and October 2012, Carl Mathews conspired with others to force the two women to engage in prostitution in the St. Louis metropolitan area. The defendant arranged for one of the women to work in a local hotel. One of the women was told that she needed to help support the household by applying for state and federally-regulated food-stamp benefits and by having sex for money. Their food-stamp identification (EBT) cards were kept from them to deprive them of food and drink as a method of control, and they were sometimes provided the drug MDMA and clothing in preparation for the commercial sex dates.
CARL MATHEWS, Breckenridge Hills, MO, pled guilty in March to one felony count of conspiracy to commit sex trafficking by force, fraud or coercion, and appeared today for sentencing before United States District Judge Henry Autrey.Co-defendant Carla Mathews, also of Breckenridge Hills, is facing trial on one felony count of conspiracy to commit sex trafficking by force, fraud or coercion, and two felony counts of sex trafficking by force, fraud or coercion.
This case was investigated by the Federal Bureau of Investigation, the U.S. Department of Agriculture Office of Investigations and the Breckenridge Hills Police Department. Assistant United States Attorney Noelle Collins is handling the case for the U.S. Attorney's Office.
As is always the case, charges set forth in an indictment are merely accusations and do not constitute proof of guilt. Defendant Carla Mathews is presumed to be innocent unless and until proven guilty.