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15 July 2013
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to information presented to the court, an analysis of the bank account revealed that approximately $128,000 in cash was withdrawn from the account during the same period.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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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.
Licensed Gun Dealer in Jersey County Sentenced for Knowingly Selling Guns to A Drug UserRead the Press Release
Jerseyville resident John L. (“Jay”) Jones, II, 33, was sentenced in federal district for selling firearms to someone he knew to be a regular user of cocaine, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced. Jones was ordered to serve a combined sentence of 6 months home confinement followed by 12 months of incarceration and 2 years supervised following incarceration. Jones was also fined $1,000 and ordered to pay a $100 special assessment fee.
In March 2013, Jones pled guilty to a one-count Information charging that in May of 2010, Jones sold five firearms to another person, knowing and having reasonable cause to believe that the purchaser was an unlawful user of a controlled substance. Jones was formerly the operator of Discount House, Inc. – a federal firearms licensee (FFL) in Jersey County, Illinois – and was working in that capacity when he illegally sold the firearms.
This case was investigated by agents of the United States Department of Justice, Bureau of Alcohol, Tobacco, Firearms, and Explosives, working in concert with agents of the Federal Bureau of Investigation, the Internal Revenue Service, officers of the Jersey County Sheriff’s Department, and the Illinois State Police. Assistant United States Attorney Nathan D. Stump prosecuted the case.
Las Cruces Men Plead Guilty to Federal Methamphetamine Trafficking ChargesRead the Press Release
ALBUQUERQUE – Mark Anthony Harriman, 45, and Agustin Abascal, 27, both of Las Cruces, N.M., pleaded guilty earlier today to methamphetamine trafficking charges in the Las Cruces federal court, announced U.S. Attorney Kenneth J. Gonzales, Joseph M. Arabit, Special Agent in Charge, El Paso Division of the DEA, Bobby Holden, Special Agent in Charge of the Las Cruces/Doña Ana County Metro Narcotics Agency, and Chief Robert W. Shilling of the New Mexico State Police.
In mid-April 2013, Harriman and Abascal were arrested on a criminal complaint alleging that they conspired to distribute methamphetamine and did distribute methamphetamine in Doña Ana County, N.M., between Nov. 2012 and March 2013. According to the criminal complaint, Harriman and Abascal sold quantities of methamphetamine to a New Mexico State Police officer who was working in an undercover capacity and an informant on several occasions during that period.
Today, Harriman entered a guilty plea to a felony information charging him with possessing methamphetamine with intent to distribute between Feb. 2013 through March 2013, and unlawfully possessing firearms and ammunition on March15, 2013. Harriman was prohibited from possessing firearms and ammunition because he previously had been convicted of attempted assault in the first degree in Honolulu, Hawaii. In his plea agreement, Harriman admitted that between Feb. 26, 2013 and March 14, 2013, he obtained methamphetamine from California and distributed it in Las Cruces. Harriman further admitted that when he was arrested on state charges on March 15, 2013, he was traveling from California with approximately two ounces of methamphetamine.
Under the terms of his plea agreement, Harriman will be sentenced to 20 years in federal prison. Harriman also will be required to forfeit nine firearms, more than 1000 rounds of ammunition, a 2002 Mitsubishi Mirage and $13,940 in cash.
During today’s proceedings, Abascal entered a guilty plea to a felony information charging him with distribution of methamphetamine. In his plea agreement, Abascal admitted selling methamphetamine on five occasions between Nov. 1, 2012 and March 7, 2013, to a person whom he later learned was an undercover officer. At sentencing, Abascal faces a sentence of not less than ten years and not more than life in prison.
Both men have been in federal custody since their arrests and remain detained pending their sentencing hearings, which have yet to be scheduled.
This case was investigated by the Las Cruces office of the DEA, the Las Cruces/Doña Ana County Metro Narcotics Agency, and the New Mexico State Police and is being prosecuted by Assistant U.S. Attorney Renee L. Camacho of the U.S. Attorney’s Las Cruces Branch Office.
Kentucky Man Sentenced in Extortion SchemeRead the Press Release
United States Attorney Brendan V. Johnson announced that a Middlesboro, Kentucky, man was sentenced for extortion on July 15, 2013, by U.S. District Judge Karen E. Schreier.
Justin Howard, age 25, was sentenced to 21 months in custody, followed by 1 year of supervised release, and ordered to pay restitution in the amount of $53,625.25.
Howard was indicted by a federal grand jury on September 11, 2012, for extortion. He pled guilty to the offense on April 22, 2013.
From August 2011 to July 2012, Howard made telephone calls and sent written messages to a South Dakota man in which Howard threatened to reveal information about the victim’s sexuality unless the victim paid money to Howard. In response to the threats, the victim sent numerous payments to Howard, totaling $53,625.25.The victim reported the crime to law enforcement, resulting in Howard’s arrest.
This case was investigated by the Minnehaha County Sheriff’s Office and the Federal Bureau of Investigation. U.S. Attorney Brendan V. Johnson and Assistant U.S. Attorney John E. Haak prosecuted the case.
Howard was immediately turned over to the custody of the U.S. Marshal.Kadoka Man Indicted for Burglary, Destruction of Government Property and TheftRead the Press Release
United States Attorney Brendan V. Johnson announced that a Kadoka, South Dakota, man has been indicted by a federal grand jury for allegedly unlawfully entering the Indian Health Service Clinic at Wanblee and stealing prescription pills on July 5, 2013.
Lynn Standing Bear, age 20, was indicted by a federal grand jury on July 9, 2013, for Third Degree Burglary, Destruction of Government Property and Theft in Connection with Health Care.
Standing Bear appeared before U.S. Magistrate Judge Veronica L. Duffy on July 10, 2013, and pled not guilty to the indictment. The maximum penalty upon conviction is 10 years' imprisonment and a $250,000 fine.
The charges are merely accusations and Standing Bear is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Bureau of Indian Affairs, Office of Justice Services, the Oglala Sioux Tribe Department of Public Safety and the Department of Health and Human Services, Office of Inspector General. Assistant U.S. Attorney Eric Kelderman is prosecuting the case.
Standing Bear was remanded to the custody of the U.S. Marshal. A trial date has been set for September 17, 2013.KC Man Sentenced to 20 Years for Illegal FirearmsRead the Press Release
Project Ceasefire
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Kansas City, Mo., man was sentenced in federal court today for illegally possessing firearms.
Jason L. Robbins, 33, of Kansas City, was sentenced by U.S. District Judge Greg Kays to 20 years in federal prison without parole.
On Nov. 29, 2012 Robbins was convicted at trial of two counts of being a felon in possession of a firearm and two counts of possessing a stolen firearm. The court today sentenced Robbins to the maximum penalty of 10 years on each count of being a felon in possession of a firearm, and ordered those terms to be served consecutively.
On Aug. 19, 2009, Kansas City police officers were dispatched on a domestic violence disturbance where a party was armed with a firearm. According to court records, Robbins broke into his ex-girlfriend’s home and held a gun to her 9-year-old son’s head. He then took her hostage and threatened to kill her in front of her son. She testified during the trial that Robbins put the gun in her mouth so hard it split her tooth “down the middle.” She also testified that Robbins struck her twice with the gun “in the back of the head, and once on the side.” Robbins placed a gun to her head and forced her to go with him, dragging her out of the home against her will. On the street they encountered a neighbor who attempted to intervene, and Robbins threatened him with the gun as well.
When Robbins saw the police officers approaching he ran and the officers pursued him, apprehending him after a brief foot chase. A police dog located a Hi-Point semi-automatic 9mm pistol along the path where Robbins had fled. The firearm had been reported as stolen from a victim’s home earlier that day.
On May 16, 2010, Kansas City police officers observed a vehicle that they believed to be stolen. As the officers approached the car, Robbins, who had previously been seated in the driver’s seat, began running away from the officers. An officer chased Robbins and saw him pull a black handgun from his waistband and throw it on the sidewalk. Robbins was immediately placed under arrest. The handgun, a Taurus .45-caliber pistol, was loaded with nine live rounds of ammunition.
Investigators later learned that the firearm was stolen in a residential burglary on April 28, 2010, in which numerous firearms were taken.
Under federal law, it is illegal for anyone who has been convicted of a felony to be in possession of any firearm or ammunition. Robbins has prior felony convictions for non-support, tampering with a motor vehicle and resisting arrest.
This case was prosecuted by Special Assistant U.S. Attorneys Jalilah Otto and Stacey Perkins-Rock and Assistant U.S. Attorney David DeTar Newbert. It was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Kansas City, Mo., Police Department.
Project Ceasefire
Project Ceasefire, launched in October 1999, is a cooperative initiative by federal and local law enforcement and the Kansas City Crime Commission that targets for federal prosecution persons who unlawfully use or possess firearms.Justice Department Statement on the Trayvon Martin-George Zimmerman CaseRead the Press Release
"As the Department first acknowledged last year, we have an open investigation into the death of Trayvon Martin. The Department of Justice's Criminal Section of the Civil Rights Division, the United States Attorney's Office for the Middle District of Florida, and the Federal Bureau of Investigation continue to evaluate the evidence generated during the federal investigation, as well as the evidence and testimony from the state trial. Experienced federal prosecutors will determine whether the evidence reveals a prosecutable violation of any of the limited federal criminal civil rights statutes within our jurisdiction, and whether federal prosecution is appropriate in accordance with the Department's policy governing successive federal prosecution following a state trial.”
Joseph Collins, Principal Attorney for Former Commodities Firm Refco, Sentenced in Manhattan Federal Court to One Year and One Day in Prison for Securities FraudRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that JOSEPH P. COLLINS, formerly the principal outside attorney for the now defunct financial services company, Refco Group Inc. (“Refco”), was sentenced today in Manhattan federal court to one year and one day in prison for conspiracy, securities fraud, filing false statements with the SEC, and wire fraud, in connection with his role in the fraud underlying the collapse of Refco. The accounting fraud at Refco, once the nation’s largest independent commodities firm, cost investors and lenders more than $2.4 billion in losses. COLLINS was convicted in November 2012, after a four-week jury trial before Chief U.S. District Judge Loretta A. Preska, who imposed today’s sentence.
Manhattan U.S. Attorney Preet Bharara stated: “Joseph Collins was a lawyer deeply and corruptly enmeshed in coordinating and concealing the massive accounting fraud that ultimately led to Refco’s collapse. By aiding and abetting the commodities firm’s executives, Collins not only shirked his duties as an officer of the court and violated the ethical obligations of his profession – he broke the law.”
According to the Superseding Indictment filed in Manhattan federal court, other court documents, and the evidence presented at trial:
In August 2004 Thomas H. Lee Partners, L.P., purchased a majority interest in Refco through a $2.4 billion leveraged buyout (“LBO”) transaction. The buyout was financed with
approximately $500 million in cash from Thomas H. Lee Partners, $600 million in notes that Refco sold to private investors, and approximately $800 million borrowed from a syndicate of banks. In August 2005, Refco conducted an initial public offering (“IPO”) of its stock, which was then listed on the New York Stock Exchange. Both the LBO and the IPO were constructed and orchestrated in the context of a massive fraud scheme engineered by Phillip R. Bennett, former Chief Executive Officer and 50% owner of Refco, and others, with the knowing assistance of COLLINS. Only months after the IPO, Refco went into bankruptcy and its stock was delisted from the New York Stock Exchange.
During the relevant time period, COLLINS, then a partner at the law firm Mayer, Brown, Rowe & Maw LLP, was the primary outside counsel for Refco and Bennett. COLLINS participated in, among other things, Bennett’s scheme to falsify Refco's financial statements by hiding from Refco’s investors and auditors an enormous debt owed to Refco by a holding company partially owned by Bennett. This debt had ballooned to more than $1 billion by January 2004. On at least 17 different occasions from February 2000 through October 2005, COLLINS, and lawyers at his firm working at his direction, drafted documents that arranged for the routing – through various third parties – of more than $5.5 billion in loans from Refco to Bennett’s company. As COLLINS knew, the loans were made shortly before, and reversed shortly after, Refco’s fiscal year-ends and quarter-ends. During those brief periods, Bennett used the loans to pay down the debt his company owed to Refco, only to have the debt return once these “round-trip” loan transactions were reversed. These loans had the effect of concealing the size of Refco’s related-party debt by making it appear that the debt owed by Bennett’s company was significantly smaller than it really was.
COLLINS falsely represented to Thomas H. Lee Partners and others that all material contracts and related-party transactions had been disclosed, knowing that was untrue. In fact, documents relating to the round-trip loan transactions, including documents in which Refco guaranteed to third parties the performance of Bennett’s company – in amounts totaling billions of dollars – were never provided to Thomas H. Lee Partners. COLLINS also made affirmative misrepresentations and drafted contract terms that misled others into believing that Bennett’s holding company owed Refco no more than approximately $108 million, which COLLINS knowingly and falsely misrepresented would be repaid by the time the LBO transaction closed. In fact, COLLINS knew that Bennett’s holding company actually owed Refco at least $1 billion and that, even after the LBO, it would continue to owe Refco at least $300 million.
COLLINS also agreed with Bennett to conceal the terms of a 2002 agreement giving the Austrian bank BAWAG an approximately 47% economic interest in Refco, and further agreed to conceal Bennett’s plan to buy out BAWAG’s interest by using more than $500 million from the proceeds of the LBO. COLLINS directed others not to disclose information relating to Bennett’s buyout of BAWAG’s interest, and lied to Thomas H. Lee Partners by representing that all material contracts and related-party transactions concerning Refco had been disclosed, knowing full well that these agreements and arrangements had not been disclosed. To that end, COLLINS created fraudulent corporate documents for Refco that he provided to Thomas H. Lee Partners in order to conceal from the firm BAWAG’s true economic interest in Refco and Refco’s true financial condition.
In addition to the prison term, Chief Judge Preska sentenced COLLINS, 62, of Winnetka, Illinois, to two years of supervised release. COLLINS was originally found guilty in 2009 on charges of conspiracy to commit securities fraud, wire fraud, bank fraud, and money laundering, but that conviction was reversed by the United States Court of Appeals for the Second Circuit in January 2012.
To date, several former executives of Refco have been convicted for their participation in the $2.4 billion fraud described above:
- Bennett, 64, of Gladstone, New Jersey, pled guilty in February 2008 to all 20 charges filed against him. He was sentenced on July 3, 2008, to 16 years in prison by U.S. District Judge Naomi Reice Buchwald;
- Tone N. Grant, 69, of Chicago, Illinois – one of the former owners of Refco – was convicted at trial in April 2008 on all five counts in the Indictment against him. Grant was sentenced on August 7, 2008, to 10 years in prison by Judge Buchwald;
- Robert C. Trosten, 44, of Sarasota, Florida – the former Chief Financial Officer of Refco – pled guilty in February 2008 before Judge Buchwald to five counts charged against him in the Indictment against him. Trosten has not yet been sentenced; and
- Santo C. Maggio, formerly of Naples, Florida – the former Executive Vice President of Refco and the former President and Chief Executive Officer of Refco Securities LLC, a Refco subsidiary – pled guilty in December 2007 before U.S. Magistrate Judge Ronald L. Ellis to a four-count Information. Maggio died last year before being sentenced.
Mr. Bharara praised the work of the United States Postal Inspection Service and the Criminal Investigators of the United States Attorney’s Office, which jointly investigated this case. He also thanked the Securities and Exchange Commission and the Commodity Futures Trading Commission for their assistance in the case.
Assistant United States Attorneys Harry A. Chernoff, Michael A. Levy, and Edward A. Imperatore are in charge of the prosecution.
Jesse Shaderic Wall, Jr. Sentenced in U.S. District CourtRead the Press Release
The United States Attorney's Office announced that during a federal court session in Missoula, on July 12, 2013, before Chief U.S. District Judge Dana L. Christensen, JESSE SHADERIC WALL, Jr., a 66-year-old resident of Kalispell, was sentenced to a term of:
Probation: 5 years
Special Assessment: $100
Restitution: $201,305.85
WALL was sentenced in connection with his guilty plea to wire fraud.
In an Offer of Proof filed by Assistant U.S. Attorney Timothy J. Racicot, the government stated it would have proved at trial the following:
At the time of the crimes referenced in the Indictment, WALL was a CPA in the Kalispell area. Beginning in 2008, WALL made material misrepresentations to RBM Lumber Company to induce the company to invest $350,000 with him. One RBM executive explained to law enforcement that WALL was the company's accountant and that he offered to invest some of RBM's money in mediums that would produce a higher rate of return than RBM could get from a bank. RBM agreed and began providing WALL with various sums of money at various times. According to the RBM representative, WALL created a Nevada corporation called Milestone Innovations, Inc., and the money that RBM provided WALL was invested on behalf of that Nevada entity.
WALL used the money he obtained from RBM on his struggling business, as opposed to depositing it into any interest-bearing investments. RBM's expectation was that the money would be readily available should the company need it and WALL was not given authority to tie the funds up for any extended period of time. But in February 2011, when RBM asked WALL to return the money, he was unable to do so. He told RBM that the money was invested in real estate, which was not true. In reality, WALL had spent the RBM money but was hoping to sell his house in the coming months and planned to use the proceeds from that sale to pay RBM. WALL did repay $190,000 to RBM in June 2011.
WALL was interviewed by a Secret Service agent on December 29, 2011. During the interview, WALL expressed a desire to pay RBM back, but also said he "perhaps did say something misleading to them," to induce them to part with their money.
Count I of the Indictment involved a check that WALL wrote on July 1, 2009, from a Wells Fargo Bank account in the name of Milestone Innovations, Inc., for $12,500. The check was written to "Jesse S. WALL, CPA PC," and deposited into WALL's business account at West One Bank. That deposit caused a wire communication in interstate commerce between Wells Fargo Bank in Montana and a federal reserve bank outside Montana.
The investigation was conducted by the U.S. Secret Service.
Jason Pleau to Plead Guilty as Charged in Federal IndictmentRead the Press Release
PROVIDENCE, R.I. – According to a signed Plea Agreement filed today in U.S. District Court in Providence, Jason W. Pleau, 35, will plead guilty as charged by way of a federal indictment for the robbery and murder of Woonsocket gas station manager David Main. It is alleged that Pleau robbed and shot Mr. Main on September 20, 2010, as he attempted to enter a Woonsocket bank to deposit receipts belonging to the gas station that he managed.
As required by the United States Attorneys’ Manual, the Attorney General has approved the filing of a Plea Agreement in this matter and the withdrawal of the Notice of Intent to Seek a Sentence of Death against the defendant: http://www.justice.gov/usao/eousa/foia_reading_room/usam/title9/10mcrm.htm#9-10.150
According to the court filing, Mr. Pleau will plead guilty as charged by way of an indictment returned on December 14, 2010, to conspiracy to commit Hobbs Act robbery; Hobbs Act robbery; and carrying, using, and discharging a firearm during and in relation to a federal crime of violence, death resulting.
An indictment is merely an allegation 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.
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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]Indianapolis Attorney Pleads Guilty to Defrauding Clients of More Than $4.5 MillionRead the Press Release
INDIANAPOLIS – Indianapolis attorney William F. Conour today entered an open plea of guilty to an information that alleged that he has defrauded more than 25 clients of more than $4.5 million since 1999. Conour, 66, pleaded guilty during a hearing before Chief U.S. District Judge Richard L. Young in Indianapolis. Sentencing has been scheduled for Oct. 17, 2013.
Conour has been in the custody of the U.S. Marshals Service since his bond was revoked on June 27, 2013. At that time, Judge Young granted the government’s motion to revoke bond after finding that Conour had breached the conditions of his bond when he dissipated assets without prior consent by the government.
The plea was announced by Jim Lewis, U.S. Attorney for the Central District of Illinois, and Robert A. Jones, Special Agent in Charge, FBI, Indianapolis Division.
Conour was initially charged with fraud in a criminal complaint filed on Apr. 27, 2012. An information was filed on Aug. 14, 2012. According to the information, Conour devoted most of his law practice to representing clients who had suffered serious injuries or death caused by construction site accidents, automobile collisions, and accidents resulting in traumatic brain injury.
The information, to which Conour plead guilty, alleged that Conour engaged in a scheme to defraud his clients from 1999 through April 2012. As part of the scheme, Conour kept a majority of his clients’ settlement proceeds for his own use and benefit. Conour did not deposit the full amount of client settlements into client ‘trust’ accounts; instead, Conour funded the trusts on a yearly basis with funds only sufficient to enable the client to receive monthly payments for a year. Further, Conour used newly obtained settlement funds to pay old settlements and debts.
The U.S. Attorney’s Office for the Southern District of Indiana has been recused in this matter. The U.S. Attorney General appointed the Central District of Illinois to handle the case prosecution. The government’s case is being prosecuted by Assistant U.S. Attorney Jason M. Bohm, Central District of Illinois, Urbana Division.
The Federal Bureau of Investigation, with assistance provided by the Indiana State Police, is conducting the investigation.
The offense of wire fraud carries a maximum statutory penalty of 20 years in prison and a fine of up to $250,000. The defendant may also be ordered to pay full restitution to victims of the offense.
Husband and Wife Sentenced for Participating in Conspiracy to Manufacture MethmaphetamineRead the Press Release
GREENEVILLE, Tenn. -- Richie Barnett, 47 and Ruth Barnett, 44, of Erwin, Tenn., were sentenced on August 5, 2013, by the Honorable J. Ronnie Greer, U.S. District Judge, for their roles in a methamphetamine manufacturing conspiracy. Richie Barnett was sentenced to serve 135 months in prison and Ruth Barnett was sentenced to serve 120 months in prison. Both Barnetts pleaded guilty to a November 2012 federal indictment charging them with conspiracy to manufacture methamphetamine.
The Barnetts conspired to manufacture methamphetamine using a “shake-and-bake” process. Richie Barnett was the primary methamphetamine cook. He admitted to cooking methamphetamine over 40 times. Both individuals obtained equipment and precursors used in the manufacture process. Each Barnett received a sentencing enhancement for an infant child being placed at risk of harm as the result of being present at their residence while a portion of a methamphetamine manufacturing process was taking place.
The indictment and subsequent convictions of the Barnetts were the results of an ongoing and collaborative investigation conducted by the Unicoi County Sheriff’s Department, Erwin Police Department, Washington County Sheriff’s Department, First Judicial District Drug Task Force, Tennessee Bureau of Investigation, and Drug Enforcement Administration. Assistant U.S. Attorney J. Christian Lampe represented the United States.
U.S. Attorney Bill Killian commended the hard work and joint cooperation of the law enforcement agencies who worked on the investigation. “I appreciate the diligent efforts by all agencies involved to bring this and related conspiracies to an end. They are to be commended for their dedication to combatting the many harmful effects that methamphetamine has on our communities.”
Gang Member Is Thirteenth to Plead Guilty in Dodge City Racketeering CaseRead the Press Release
WICHITA, KAN. – A Dodge City gang member has pleaded guilty to conspiring to commit assaults with dangerous weapons in connection with a federal racketeering case, U.S. Attorney Barry Grissom said today.
Alfonso Banda-Hernandez, 21, Dodge City, Kan., pleaded guilty to two counts of conspiracy to commit assaults with dangerous weapons, which were violent crimes in aid of racketeering. In his plea, he admitted he was a member of the Los Carnales Chingones gang affiliated with the Norteno gang on March 30, 2011, when he conspired to commit an assault with a firearm against George Gonzalez; and in April 2010 when he conspired to commit an assault with a beer bottle against a member of a rival gang.
In his plea, Banda-Hernandez admitted that on March 30, 2011, he and three other Norteno gang members encountered a Sureno gang member named George Gonzalez at a Love’s convenience store in Dodge City. Banda-Hernandez and the other Nortenos began throwing gang signs at Gonzalez and attempting to start a fight. Later that day, they again encountered Gonzalez and chased his car. One of the Nortenos fired shots at Gonzalez’s car.
Banda-Hernandez also admitted that in April 2010 he was with other Norenos when they encountered a member of the rival Sureno street gang in an alley in Dodge City. During a fight, one of the Nortenos used a beer bottle to strike a Sureno gang member in the head, injuring him.
Sentencing is set for Sept. 30. He faces a maximum penalty of three years in federal prison and a fine up to $250,000 on each count.
Banda-Hernandez was one of 23 Norteno members indicted in May 2012. It was only the second time a federal RICO Act indictment (Racketeer Influenced and Corrupt Organizations Act) had been filed in Kansas. Banda-Hernandez is the thirteenth defendant in the case to enter a guilty plea.
Grissom commended the Dodge City Police Department, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Ford County Sheriff’s Office, the Kansas Bureau of Investigation, Assistant U.S. Attorney Lanny Welch and Assistant U.S. Attorney Aaron Smith for their work on the case.
Former Scituate Resident Pleads Guilty to Possessing and Distributing Child PornographyRead the Press Release
PROVIDENCE, R.I. – Robert Brown, Jr., 42, formerly of Scituate, pleaded guilty in federal court in Providence today to possessing nearly 2,300 images and more than 30 videos depicting child pornography involving prepubescent children, announced United States Attorney Peter F. Neronha and Vincent B. Lisi, Special Agent in Charge of the Boston Field Office of the FBI.
Appearing before U.S. District Court Judge John J. McConnell, Jr., Brown pleaded guilty as charged in a federal indictment returned in December 2012 to three counts of distribution of child pornography and one count of possession of child pornography. No plea agreement was filed in this matter.
According to information presented to the court, beginning in September 2009, an undercover FBI agent from the San Diego Division logged on to online file sharing programs often used for the sharing of child pornography. The agent was friended by Brown and was permitted by the defendant to access his files. On at least three occasions, the FBI agent accessed Brown’s files and downloaded files containing images and videos depicting child pornography.
The investigation revealed that Brown was accessing and sharing the files from an Internet address subscribed to him at his Scituate residence. In May 2010, FBI agents executed a court authorized search of Brown’s residence and seized three laptop computers, 19 hard drives and portable digital storage memory cards, computer disks and thumb drives, a web camera and a digital camera.
A forensic examination by the National Center for Missing and Exploited Children of the items seized revealed 2,297 images and 32 videos containing images of known children identified in 80 series depicting child pornography.Brown, who is currently free on unsecured bond, is scheduled to be sentenced on October 23, 2013. At sentencing, Brown faces statutory penalties of a minimum mandatory 5 years and up to 20 years in federal prison followed by a mandatory 5 years of supervised release for distribution of child pornography; and up to 10 years in prison followed by a mandatory 5 years of supervised release for possession of child pornography.
The case was prosecuted by Assistant U.S. Attorney John P. McAdams.
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]Former Marion, Virginia Police Chief Pleads Guilty to Drug Conspiracy ChargeRead the Press Release
ABINGDON, VIRGINIA -- - United States Attorney Timothy J. Heaphy announced today that the former Chief of Police in Marion, Virginia pled guilty today in the United States District Court for the Western District of Virginia in Abingdon to a charge involving the distribution of methamphetamine, cocaine, oxycodone and hydrocodone.
Michael Dean Roberts, a.k.a., “Fireball”, age 54, of Saltville, Va., entered a plea of guilty to a one-count Information charging conspiracy to distribute methamphetamine, cocaine, oxycodone and hydrocodone. Roberts faces a potential maximum sentence of up to 20 years imprisonment and a potential fine of $1,000,000.
According to evidence presented at the guilty plea hearing by Assistant United States Attorney Zachary Lee, Roberts was involved in the distribution of cocaine, methamphetamine, oxycodone and hydrocodone between 2006 and June 2013, all while employed as the Chief of Police of the Marion, Virginia Police Department. As part of a joint investigation by the Bureau of Alcohol, Tobacco, Firearms, and Explosives, the Federal Bureau of Investigation, the Drug Enforcement Administration, the Virginia State Police, and the Washington County Sheriff’s Department, law enforcement officers utilized a confidential informant to obtain hydrocodone pills from Roberts on three separate occasions in May and June of 2013.
The investigation determined that Roberts was involved in the distribution of at least 7,331 hydrocodone pills, 365 grams of methamphetamine, and small amounts of cocaine and oxycodone. The investigation further determined that Roberts used his position as chief of police to obtain some of these drugs from the Marion Police Department evidence room.
Sentencing has been set for October 9, 2013 in the United States District Court for the Western District of Virginia in Abingdon.
The investigation of the case was conducted by the Bureau of Alcohol, Tobacco, Firearms, and Explosives, the Federal Bureau of Investigation, the Virginia State Police, the Drug Enforcement Administration, and the Washington County Sheriff’s Department. Assistant United States Attorney Zachary Lee is prosecuting the case for the United States.
Former Kent, Washington Attorney Pleads Guilty to Child Pornography OffensesRead the Press Release
A family law attorney who previously practiced in Kent, Washington, pleaded guilty today in U.S. District Court in Seattle to production of child pornography, receipt of child pornography and possession of child pornography, announced U.S. Attorney Jenny A. Durkan. DAVID SCOTT ENGLE, 49, of Maple Valley, Washington was arrested in November 2012. ENGLE, who both volunteered in and ran a business involving youth baseball, has been incarcerated since his arrest. ENGLE faces a mandatory minimum term of imprisonment of fifteen years when he is sentenced by U.S. District Judge James L. Robart on October 21, 2013.
According to records filed in the case, ENGLE came to the attention of law enforcement following the investigation of an international movie production company that operated a website offering DVDs and streaming videos for sale. The materials depicted young boys in sexually explicit activity. Between 2005 and 2011, ENGLE purchased 184 different items from the website. The international movie production company was put out of business when agents seized its inventory and records. The company and the owners of the company are being prosecuted for child exploitation offenses, including the production and distribution of child pornography.
After law enforcement executed a search warrant on ENGLE’s home and storage locker in November 2012, they discovered more than 500 videos of ENGLE sexually molesting a young boy under the age of 16. Law enforcement later discovered additional evidence of ENGLE sexually molesting another young boy, also under the age of 16. ENGLE is being separately prosecuted for those offenses by the King County Prosecutor’s Office. Following forensic examination of a number of computers, DVDs, thumb drives, and floppy disks, investigators determined that ENGLE was in possession of tens of thousands of images of child pornography, and thousands of videos of child pornography.The case is being investigated by the U.S. Postal Inspection Service and is being prosecuted by Assistant United States Attorney Marci Ellsworth.
Press contact for the U.S. Attorney’s Office is Thomas Bates at (206) 553-7970 or [email protected].
Former Hazelton Man Pleads Guilty to Sexually Exploiting Two ChildrenRead the Press Release
BOISE – Michael Brian Clair, 33, formerly of Hazelton, Idaho and Parker, Arizona, pleaded guilty today in United States District Court in Boise to sexual exploitation of children by production of sexually explicit images of minors, U.S. Attorney Wendy J. Olson announced. U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) agents arrested Clair at a home near Hazelton on February 22, 2013. He had been residing there for approximately two months.
According to his plea agreement, Clair came to the attention of law enforcement on October 28, 2012, when he responded to an advertisement posted on the Internet by an HSI Agent in New Orleans. While conversing via email with the agent, Clair made several statements about having inappropriate sexual contact with a 4-year-old female and discussed trading sexually explicit images. During today’s plea hearing, Clair admitted that between July 2012 and January 2013, he coerced two prepubescent minors to engage in sexually explicit conduct, for the purpose of producing visual depictions of that conduct, and transported those images from Arizona to Idaho in late December. Clair also admitted distributing child pornography to others via the Internet, including to a sex offender in Queensland, Australia.
The charge of sexual exploitation of children by producing sexually explicit images of minors is punishable by from 15 to 30 years in prison, a maximum fine of $250,000, and a minimum term of five years up to lifetime supervised release. The government is seeking forfeiture of the computer equipment used in the offense.
Sentencing is set is set for October 7, 2013, before U.S. District Judge Edward J. Lodge at the federal courthouse in Boise.
“Those who victimize children by producing and distributing images of children being sexually abused will be identified, investigated and prosecuted,” said Olson. “Today’s guilty plea sends the strong message that local, state and federal agencies will work together in an efficient and coordinated manner to bring these predators to justice.”
“It wasn’t enough for Clair to abuse two children, he shared his exploitation with predators around the world,” said Brad Bench, special agent in charge of HSI Seattle, who oversees Idaho investigations. “HSI places a high priority on combating this despicable crime, not only to identify and rescue child victims, but to stop their re-victimization by individuals who view and distribute Internet child pornography.”
U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigation (HSI) agents from Idaho, Louisiana, Washington, and Arizona investigated the case, with assistance from the Boise Police Department, Idaho State Police, Jerome County Sheriff’s Office and the Idaho Department of Health and Welfare.
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, visit www.usdoj.gov/psc. For more information about internet safety education, visit www.usdoj.gov/psc and click on the tab “resources.”
Federal Grand Jury Indicts Oregon and Pennsylvania Men for Allegedly Defrauding New Mexico-Based Company Defendants Charged with Defrauding Kinesio USA LLC of Approximately $4.3 MillionRead the Press Release
ALBUQUERQUE – A federal grand jury sitting in Albuquerque, N.M., has returned a 38-count indictment charging Johannes Jarvis, 40, of Portland, Ore., and John Hope, 65, of Huntingdon Valley, Pa., with conspiracy, wire fraud and money laundering charges, announced U.S. Attorney Kenneth J. Gonzales, Carol K.O. Lee, Special Agent in Charge of the Albuquerque Division of the FBI, and Dawn Mertz, Special Agent in Charge of the Phoenix Field Office of IRS Criminal Investigation.
The indictment charges Jarvis and Hope with a wire fraud conspiracy count, 21 counts of wire fraud and 16 counts of money laundering. The indictment alleges that from late 2007 through April 2010, Jarvis and Hope conspired to defraud Kinesio USA LLC, a New Mexico Company that sells therapeutic elastic tape and related products, and its related company, Kinesio Holding Corporation (together, “Kinesio”), of approximately $4.3 million, at least $1.2 million of which Jarvis and Hope retained as profits.
At all times relevant to the indictment, Jarvis was the Director of Marketing for Kinesio and Hope owned a printing business that operated in China that had been hired to produce marketing materials for Kinesio. According to the indictment, in late 2007 or early 2008, Kinesio directed Jarvis to locate a new manufacturer for its therapeutic elastic tape and Jarvis allegedly suggested searching for a manufacturer in China. Thereafter, Jarvis allegedly reported that he had located a suitable manufacturer in China but that Kinesio would have to work through a broker to coordinate the business relationship. In April 2008, Jarvis and Hope allegedly incorporated Grace International (HK) Limited (“Grace International”) in Hong Kong, of which they were the sole owners. Thereafter, Jarvis allegedly represented to Kinesio that Grace International would broker the relationship between Kinesio and the tape manufacturer while concealing Jarvis’s and Hope’s ownership of and involvement in the company.
The indictment alleges that relying on Jarvis’s misrepresentations, Kinesio entered into a contract with Grace International pursuant to which Kinesio paid Grace International more than $4.3 million for therapeutic elastic tape between July 2008 and Jan. 2010. It further alleges that Jarvis and Hope defrauded Kinesio by having Grace International charge Kinesio a significant undisclosed markup above the manufacturer’s price for the tape, and that Jarvis and Hope shared the profits generated by the markup.
The indictment alleges that Jarvis and Hope facilitated 16 wire transfers of money, ranging from $23,490.00 to $657,120.00, from Kinesio to Grace International between July 2008 and Jan. 2010, in addition to other wire communications that were transited to perpetuate their unlawful scheme to defraud Kinesio. It also charges Jarvis and Hope with laundering the proceeds of their unlawful scheme by depositing the money into various bank accounts. The indictment also seeks forfeiture of assets which constitute or are derived from the unlawful scheme, including residences in Portland, Ore. and Huntingdon Valley, Pa., and a money judgment against Jarvis and Hope in the amount of $1,270,075.99.
If convicted, Jarvis and Hope each face a maximum possible penalty of 20 years in prison and a $250,000 fine on the wire fraud conspiracy and each of the 16 wire fraud charges. Each also faces a maximum possible penalty of ten years in prison and a fine of either $250,000 or twice the amount involved for each of the 16 money laundering charges.
Jarvis and Hope will be summoned to appear in federal court in Albuquerque to be arraigned on the indictment on Aug. 8, 2013. Charges in indictments are merely accusations. Defendants are presumed innocent unless found guilty beyond a reasonable doubt in a court of law.
This case was investigated by the Albuquerque office of the FBI and IRS Criminal Investigation in Albuquerque and is being prosecuted by Assistant U.S. Attorney C. Paige Messec.
- Indictment
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Fayette County Man Sentenced to Prison for Drug Law ViolationsRead the Press Release
PITTSBURGH, Pa. - A resident of Connellsville, Pa., has been sentenced in federal court to 18 months imprisonment followed by eight years supervised release on his conviction of conspiracy and violating federal narcotics laws, United States Attorney David J. Hickton announced today.
Senior United States District Judge Maurice B. Cohill imposed the sentence on William Joseph Colbert, 37.
According to information presented to the court, from Aug. 25, 2012, and continuing thereafter to Aug. 27, 2012, Colbert conspired with others to distribute 28 grams or more of crack cocaine, a Schedule II controlled substance and distributed it on Aug. 27, 2012.
Assistant United States Attorney James T. Kitchen prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Federal Bureau of Investigation for the investigation leading to the successful prosecution of Colbert.
Embezzlement of Government Property and Aggravated Identity TheftRead the Press Release
Michael J. Moore, United States Attorney for the Middle District of Georgia, announced the sentencing of Dontreal Jenkins, age 31, and Trevayne Jones, age 37, both residents of Albany, Georgia, on July 11, 2013, before the Honorable W. Louis Sands, United States District Judge for the Middle District of Georgia.
On January 11, 2013, a jury found Mr. Jenkins and Mr. Jones guilty of Conspiracy to Embezzle Public Monies, Embezzlement of Government Property, and Aggravated Identity Theft. In addition, Mr. Jenkins was found guilty of Mail and Wire Fraud Conspiracy and Mr. Jones was found guilty of Misleading Statements.
Judge Sands sentenced Mr. Jenkins and Mr. Jones to each serve one hundred thirty-three (133) months imprisonment, followed by three (3) years supervised release, a $400.00 mandatory assessment fee, and restitution in the amount of $713,000.00 to the victim. In addition, Mr. Jenkins was ordered to pay restitution in the amount of $335,693.00 to the U.S. Department of Education.
Court records revealed that Mr. Jenkins and Mr. Jones both participated in a scheme to steal and cash United States Treasury checks. In addition, they committed identity theft by unlawfully using the names and signatures of the intended payees without the permission of the payee.
“My office will continue to use the necessary resources to prosecute individuals who steal from the taxpayers,” said U.S. Attorney Michael Moore. “When these defendants stole from our student aid program, they didn’t just take money, they threatened the dreams of deserving students.”
“Federal student aid exists so that individuals can pursue and make their dream of a higher education a reality. As the law enforcement arm of the U.S. Department of Education, ensuring that those who steal student aid or game the system for their own selfish purposes are stopped and held accountable for their criminal actions is a big part of our mission,” said Yessyka Santana, Special Agent in Charge of the U.S. Department of Education Office of Inspector General's Southern Regional Office. "That’s why I’m proud of the work of OIG special agents and our law enforcement colleagues for holding these individuals accountable for their criminal actions.”
The case was investigated by the United States Secret Service and the United States Department of Education, Office of Inspector General. The case was prosecuted by Assistant United States Attorney Jim Crane.
Inquiries regarding the case should be directed to Sue McKinney, Public Affairs Specialist, United States Attorney's Office at (478) 621-2602.
Dominican National Sentenced for Cocaine TraffickingRead the Press Release
ROCHESTER, N.Y.-- U.S. Attorney William J. Hochul, Jr. announced today that Jose Nunez-Donastor, a/k/a Jesus Perez, a/k/a Rafael Torres Rivera, a/k/a Guineo, a/k/a Gineo, 33, who was convicted of conspiracy to possess with intent to distribute and distribution of 500 grams or more of cocaine, was sentenced to 108 months in prison by U.S. District Judge Charles J. Siragusa.
Assistant U.S. Attorney Robert A. Marangola, who handled the case, stated that Nunez-Donastor and other members of the conspiracy were responsible for the distribution of significant quantities of cocaine and crack cocaine throughout the Rochester area, transported by vehicle from Pennsylvania. This investigation involved court-authorized wire taps and resulted in the federal arrest of 10 defendants between May and October 2012. To date, all the defendants have been convicted. Nunez-Donastor is an illegal alien who will likely be deported to the Dominican Republic after he serves his prison sentence.
The sentencing is the culmination of an investigation on the part of Special Agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Scott Heagney, Investigators of the Rochester Police Department, under the direction of Chief James Sheppard, and the Monroe County District Attorney's Office, under the direction of Sandra Doorly.Cumberland County Child Sex Trafficker Pleads GuiltyRead the Press Release
RALEIGH - United States Attorney Thomas G. Walker announced that in federal court today CHRISTOPHER JASON WILLIAMS, 33, of Fayetteville, North Carolina pleaded guilty before Chief United States District Judge James C. Dever, III, to two counts of Sex Trafficking of Children, in violation of Title 18, United States Code Section 1591.
U.S. Attorney Thomas G. Walker stated, “Sex Trafficking, particularly of children, will not be tolerated in our community, and the U.S. Attorney’s Office will continue to work with our partners in law enforcement to ensure that individuals who commit these crimes are found and convicted.”
WILLIAMS’ crimes were first uncovered in January of this year when a young girl reported to police that she and another child had been held against their will by the defendant and forced to perform sex acts for money. At the time of the report, she had been able to escape but was fearful for her friend, who remained in WILLIAMS’ custody. Detectives with the Fayetteville Police Department responded to WILLIAMS’ apartment and eventually located the second victim locked in his attic crawl space.
Upon interviewing the girls, detectives learned that WILLIAMS had kept them captive for weeks and months, respectively, beating them and threatening to kill them and their family members if they attempted to escape. During this time, WILLIAMS posted partialy nude photographs of the girls on various websites, advertising them for sex. Men were directed to WILLIAMS’ apartment, where the girls were forced to have sex with them for money. WILLIAMS forced both girls to have sex with him. He also made them perform sexual acts on him while recording it on video.
Once WILLIAMS was arrested, a forensic examination of his cell phone revealed hundreds of images of child pornography, many of which depicted the girls and were created by the defendant himself.
At sentencing, WILLIAMS faces not less than 10 years nor more than life imprisonment along with a fine of up to $250,000 and up to a lifetime of supervised release.
This case was part of the Project Safe Childhood initiative, a national program aimed at ensuring that criminals exploiting children are effectively prosecuted by making full use of all available law enforcement resources at every level. For more information about this important national project, Project Safe Childhood, go to www.projectsafechildhood.gov.
Investigation of this case was conducted by the Fayetteville Police Department. Assistant United States Attorney Leslie Cooley is prosecuting the case for the United States.
Connellsville Woman Charged with Producing Then Distributing Sexually Explicit Images of A MinorRead the Press Release
PITTSBURGH, Pa. - A Fayette County woman has been indicted by a federal grand jury in Pittsburgh on charges of production and distribution of material depicting the sexual exploitation of a minor, United States Attorney David J. Hickton announced today.
The six-count indictment, returned on July 9 and unsealed today following her arrest, named Lisa A. Renze, 48, of Connellsville, Pa., as the sole defendant.
According to the indictment, on or about Jan. 30, 2010, in the Western District of Pennsylvania, Renze employed, used, persuaded, induced, enticed, and coerced a minor to engage in sexually explicit conduct for the purpose of producing a visual depiction of such conduct. The indictment further alleges that on or about Jan. 31, 2010, Feb. 16, 2010, March 28, 2010, May 26, 2010, and Nov. 12, 2010, Renze distributed images depicting the sexual exploitation of a minor, to an individual located in Jeannette, Pa.
The law provides for a maximum total sentence of 130 years in prison, a fine of $1.5 million, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Carolyn J. Bloch is prosecuting this case on behalf of the government.
The United States Department of Homeland Security, Immigration and Customs Enforcement conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
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.justice.gov/psc.
Child Abductor Sentenced to 120 Years on Child Exploitation ChargesRead the Press Release
Cape Girardeau, MO: JEFFREY D. SHELTON, Poplar Bluff, MO, was sentenced to 120 years imprisonment on three felony charges, including attempted production of child pornography, production of child pornography and possession of child pornography. He appeared Monday, July 15th, before U.S. District Judge Stephen N. Limbaugh, Jr. in Cape Girardeau.
At the time of his guilty plea, Shelton admitted that on the morning of October 24, 2012, he fled his Poplar Bluff residence with a five year old child he had abducted several hours earlier and left his cellular phone in the residence. Prior to fleeing, Shelton physically assaulted his girlfriend. A neighbor witnessed Shelton assaulting his girlfriend on the carport and called the police. After Shelton fled, the girlfriend turned Shelton’s cell phone over to police upon their arrival.
The examination of Shelton’s cell phone revealed content related to the five year old female. Shelton used the phone to produce numerous videos of the child engaged in sexually explicit conduct. The videos were produced at Shelton’s Poplar Bluff residence on October 24, 2012, in Butler County. The examiner also discovered additional visual depictions involving another child victim, a ten-year-old female. Shelton attempted to produce visual depictions of the ten year old engaged in sexually explicit conduct in October 2012, while traveling from a town in Butler County to a location in Ripley County. During the offenses, Shelton threatened both child victims with serious bodily injury.
Shelton also admitted that on October 24, 2012, he possessed a hard drive that contained more than 200 graphic image files of children engaged in sexually explicit conduct. The laptop containing the hard drive was found in his vehicle when he was arrested by authorities in Poplar Bluff.
Finally, in August 1990, Shelton appeared at an Army Court-Martial in Fort Hood, Texas, and was found guilty of rape of a child under sixteen years of age.
The Missouri State Highway Patrol, the Poplar Bluff Police Department, the Ripley and Butler County Sheriff’s Departments, the Dexter Police Department, the Federal Bureau of Investigation and the Butler County Prosecutor’s Office are commended for their efforts to jointly investigate this case. Assistant United States Attorney Abbie Crites-Leoni handled the prosecution for the Government.
Charleroi Man Sentenced to 70 Months in Prison for Possessing Images and Videos of Children Being Sexually ExploitedRead the Press Release
PITTSBURGH, Pa. - A Washington County man has been sentenced in federal court to 70 months imprisonment, to be followed by 15 years supervised release, on his conviction of possession of material depicting the sexual exploitation of a minor, United States Attorney David J. Hickton announced today.
Senior United States District Judge Donetta W. Ambrose imposed the sentence on Kevin Zajack, 47, of Charleroi, Pa.
According to information presented to the court, on or about May 3, 2011, Zajack possessed visual depictions, namely, images and videos in computer graphics files, the production of which involved the use of minors engaging in sexually explicit conduct.
Prior to imposing sentence, Judge Ambrose emphasized that the crime to which the defendant pled guilty is a crime of violence with real victims. She agreed with the defendant's statement that he hoped others involved with child pornography will learn from his example.
Assistant United States Attorney Jessica Lieber Smolar prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Department of Homeland Security Investigations, Immigration and Customs Enforcement, Homeland Security Investigations for the investigation leading to the successful prosecution of Zajack.
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.justice.gov/psc.
Cedar Rapids Man Pleads Guilty to Failing to Forward Taxes He Withheld from His Employees' PaychecksRead the Press Release
A man who withheld federal taxes from his employees’ paychecks but did not forward the money to the Internal Revenue Service (“IRS”) pled guilty today in federal court in Cedar Rapids.
Eric Holub, 45, from Cedar Rapids, Iowa, was convicted of one count of failing to pay over to the IRS money he had withheld from his employees’ paychecks for federal employment taxes.
In a plea agreement, Holub admitted he was an owner of Premier Security, a private security business previously located in Cedar Rapids, and had served as the president and treasurer of the business from 2003 through 2011. Holub admitted that from January 2008 through December 2009, he was responsible for withholding income taxes and Federal Insurance Contributions Act (“FICA”) taxes from the pay of Premier Security employees and was responsible for forwarding those withholdings to the IRS. Holub admitted that, for six calendar quarters in 2008 and 2009, he failed to forward the money he withheld from his employees’ pay to the IRS, even though he knew he was required to do so. In the plea agreement, Holub further admitted he also failed to pay to the IRS other taxes owed by Premier Security from 2008 through 2011. In total, Holub admitted to failing to send to the IRS approximately $400,000 in taxes owed by Premier Security.
“IRS Criminal Investigation realizes the detrimental consequences of employment tax evasion. It results in the loss of tax revenue to the United States government and the possible loss of future social security or Medicare benefits for the employees,” said Sybil Smith, Special Agent in Charge of IRS Criminal Investigation.Sentencing before United States District Court Chief Judge Linda R. Reade will be set after a presentence report is prepared. Holub remains free on conditions previously set by the District Court pending sentencing. Holub faces a possible maximum sentence of five years’ imprisonment, a $250,000 fine, a $100 special assessment, and one year of supervised release following any imprisonment.
-more- The case is being prosecuted by Assistant United States Attorney Anthony Morfitt and was investigated by Internal Revenue Service Criminal Investigation.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 13-32.
Canadian Man Pleads Guilty to Conspiracy to Import EcstasyRead the Press Release
BUFFALO, N.Y.--U.S. Attorney William J. Hochul, Jr. announced today that Richard Dixon, 35, of Toronto, Ontario, pleaded guilty before U.S. District Richard J. Arcara to conspiracy to import Ecstasy pills containing 3,4-Methylenedioxypyrovalerone, commonly referred to as “Bath Salts,” and N-Benzylpiperazine [BZP] into the United States from Canada. The charge carries a maximum penalty of 20 years in prison, a $1,000,000 fine, or both.
Assistant U.S. Attorney Mary Catherine Baumgarten, who is handling the case, stated that on September 17, 2012, Dixon was observed by Customs and Border Protection officers wandering around the CBP administration building at the Lewiston Bridge Port of Entry in Lewiston, N.Y. toward the I-190 Northbound. During the subsequent investigation, law enforcement officers found seven duct-taped bundles wrapped in clothing which contained approximately 34,000 Ecstasy pills. The pills, which were found inside a bag belonging to the defendant, were destined for the Atlanta, Georgia area.
The plea is the result of an investigation by Immigration and Customs Enforcement, Homeland Security Investigations, under the direction Special Agent in Charge James C. Spero and Customs and Border Protection, under the direction of James Engleman, Director of Field Operations.
Sentencing is scheduled for October 28, 2013 at 1:00 p.m. before Judge Arcara.Camden Man Sentenced to 135 Months in Prison for Scheme to Steal Checks from U.S. MailRead the Press Release
CAMDEN, N.J. – A Camden man was sentenced today to 135 months in prison for his role in a scheme in which he and others stole business checks from the U.S. Mail in New Jersey and Connecticut, altered them, and cashed them, U.S. Attorney Paul J. Fishman announced.
Ibn Muhammad, 35, previously pleaded guilty before U.S. District Judge Jerome B. Simandle to an information charging him with one count of bank fraud and one count of theft of mail. Judge Simandle imposed the sentence today in Camden federal court.
According to documents filed in this case and statements made in court:
Muhammad and others stole checks from curbside U.S. mailboxes in business industrial parks in Burlington, Camden, and Gloucester counties in New Jersey. Muhammad and his conspirators (including Michael A. Ingalls Jr., 35, of Camden) would then recruit a conspirator to cash the stolen checks. Once they identified a person to cash the check, Muhammad and Ingalls would then alter the stolen checks so that the name of the “payee” of the check would match the name of the recruited check casher. Muhammad, Ingalls and the check casher would then travel to a bank where the check casher would cash the check.
Muhammad, Ingalls and their conspirators cashed or attempted to cash more than 100 stolen and altered business checks worth more than $600,000. The scheme resulted in a total loss of more than $300,000 to the victim banks.
Ingalls pleaded guilty May 23, 2013, before Judge Simandle to conspiracy to commit bank fraud and possession of stolen mail. He is scheduled to be sentenced on Sept. 5, 2013. One of Ingalls’ and Muhammad’s conspirators, Andrew Fortune, 62, of Camden, was arrested March 11, 2013, on a criminal complaint and charged with conspiracy to commit bank fraud for his role in the fraudulent scheme. His case is pending.
In addition to the prison term, Judge Simandle sentenced Muhammad to five years of supervised release. Restitution will be determined at a hearing on Sept. 16, 2013.
U.S. Attorney Fishman credited inspectors from the U.S. Postal Inspection Service, Philadelphia Division, under the direction of Acting Inspector in Charge Jean Wright, and troopers from the N.J., State Police, under the direction of Col. Rick Fuentes, for the investigation leading to today's sentence.
The government is represented by Assistant U.S. Attorneys Matthew T. Smith and Jason M. Richardson of the U.S. Attorney’s Office Criminal Division in Camden.
13-286Defense counsel: Lisa Evans Lewis Esq., Assistant Federal Public Defender, Camden
California Man, Martin Vellozzi, Charged with Creating and Selling Fake Mercedes-benz Automotive EquipmentRead the Press Release
MARTIN VELLOZZI, age 56, of Rancho Palos Verdes, California, was charged today in a one-count Bill of Information with mail fraud for his role in creating and selling non-authentic Merceds-Benz diagnostic equipment, announced United States Attorney Dana J. Boente.
According to the Bill of Information, VELLOZZI owned a LMV Industries, which offered technical information and support for Mercedes-Benz automobiles. Between about 2005 and July 2012, VELLOZZI also produced and sold unauthorized and non-authentic versions of the Mercedes-Benz Star Diagnostic System (SDS), a hand-held computer containing proprietary, confidential software. Such diagnostic devices are used by mechanics to identify problems with and assure the safety of motor vehicles employing electronic control systems. By selling non-authentic, unauthorized SDS that bore Mercedes-Benz logos and trademarks, VELLOZZI represented that the SDS he was selling were authentic and authorized by Daimler AG, when, in fact, they were not. The “real” SDS sold for between $8,300 and $22,000 each; VELLOZZI sold the non-authentic SDS, which contained Mercedes-Benz logos and trademarks, for approximately $6,000. The fake devices VELLOZZI sold were manufactured by companies located in Durham, North Carolina and Harahan, Louisiana. On some occasions, when one of the fake SDS units VELLOZZI sold would break, the Harahan-based company would provide fixes or “patches” directly to the customer. VELLOZZI also used cracking software, called “keygens” to “unlock” SDS software and make it work on his unauthorized SDS.
If convicted, VELLOZZI faces a maximum term of imprisonment of twenty (20) years, followed by up to three (3) years of supervised release, and a $250,000 fine.
(Download Bill of Information )
Cal State San Marcos Student Sentenced for Rigging Campus ElectionsRead the Press Release
Former Cal State San Marcos student Matthew Weaver of Huntington Beach was sentenced today to one year in prison for stealing the identities and passwords of more than 700 fellow students so he could rig campus elections and win the presidency.
Weaver pleaded guilty in March to wire fraud, unauthorized access of a computer and identity theft. He admitted that he used small electronic devices known as keyloggers that record a computer user's keystrokes to steal 745 student passwords. He then used many of those stolen identities to snoop in email and Facebook accounts, and to cast about 630 votes for himself and for friends who also were on the ballot.
During the hearing, U.S. District Judge Larry A. Burns said he was troubled most by the fact that Weaver – even after his arrest - attempted to frame other CSU-SM students for the election irregularities and even solicited news media coverage, contending he’d been framed.
Falsely blaming others when Weaver knew he was responsible for the crime is “the phenomenal misjudgment I just can’t get around,” the judge told Weaver. “That’s what bothers me more than the original rigging” of the election.
Judge Burns noted that the original crime might have been perceived as less egregious – even a youthful prank - except for the cover up. “He’s on fire for this crime and then he pours gasoline on it” with similar bad behavior, the judge said.
“Weaver ran roughshod over the privacy rights of hundreds of people so that he could indulge his vanity,” said U.S. Attorney Laura Duffy. “If privacy is to mean anything in a digital age, it has to be protected. A 12-month sentence adequately warns men and women like Weaver that they cannot hide from the consequences of their actions behind youth or privilege. Everyone’s rights matter – not just theirs.”
Weaver cast many of the votes from a computer located on campus. According to court records, Weaver was exposed during the final hour of the student body election, when network administrators noticed unusual voting activity associated with a computer in Academic Hall 204. The administrators were able to determine that the user, later identified as Weaver, was cutting and pasting student usernames and passwords from an Excel spreadsheet into the VOTE system and then cast those students’ votes.
Shortly after the election closed at 5 p.m., CSU-SM network administrators asked CSU-SM police officer Brian McCauley to go to the suspicious computer in Academic Hall 204. There, Officer McCauley found Weaver sitting at the computer and noted that Weaver was using the only computer in the lab whose screen was not visible to the rest of the room.
Weaver, after seeing McCauley, who was in uniform, began shutting down the campus computer. McCauley and Weaver then had a short conversation, during which Weaver said he was working on a school project, but refused to provide details. McCauley then arrested Weaver and seized his bag, which contained six keyloggers as well as other evidence of the crimes.
Weaver’s supporters have described his crime as a prank.
But in a sentencing memorandum, prosecutors dismissed that characterization, saying Weaver was fully aware of the serious ramifications of his crime and was motivated by ego and greed. In fact, a search of Weaver’s laptop showed queries like “jail time for keylogger” and “how to rig an election.”
“He wanted power through the $300,000 budget and respect through his status as CSU-SM’s student body president. But he did not want to earn it, he wanted to steal it,” prosecutor Sabrina Feve wrote in a sentencing memorandum.
“Weaver determinedly and repeatedly spied on his classmates, stole their passwords, read their secrets, and usurped their votes – and he did it with his eyes wide open,” the memorandum said. “Weaver actually researched the legality of his scheme beforehand…and then, when he knew it was completely illegal, he researched how to blame someone else.”
In fact, Weaver should have had a special appreciation for the rights of fellow students to express themselves through voting. Weaver was one of the leaders of a publication called Koala San Marcos and, when CSU-SM students protested in October 2011 against some of its content, he got the ACLU to represent the group against CSU-SM.
“Ironically, at or around the time the ACLU was defending Weaver’s freedom of thought and expression, he was actively planning to defraud other students of their ability to vote and, a just a few months later, chilling their freedom of thought and expression by logging their keystrokes and snooping through their email and Facebook accounts,” Feve wrote in the sentencing memorandum.
DEFENDANTS Criminal Case No. 13CR0821-LAB Matthew Weaver SUMMARY OF CHARGESWire Fraud, in violation of 18 U.S.C. § 1343 (Count 1); Maximum penalties: 20 years imprisonment and $250,000 fine
Unauthorized Access of a Computer, in violation of 18 U.S.C. § 1030(a)(2) and
(c)(3)(B)(ii) (Count 2)
Maximum penalties: 5 years imprisonment and $250,000 fineIdentity Theft, in violation of 18 U.S.C. § 1028(a)(7) (Count 3)
PARTICIPATING AGENCIES
Maximum penalties: 5 years imprisonment and $250,000 fineFederal Bureau of Investigation
Cal State University San Marcos Police DepartmentBurnsville Man Sentenced in Connection to Trevor Cook Ponzi SchemeRead the Press Release
MINNEAPOLIS— Earlier today in federal court, United States District Court Chief Judge Michael J. Davis sentenced a 75-year-old Burnsville man in connection to the multi-million-dollar Ponzi scheme orchestrated by Trevor Cook.
Patrick Kiley was sentenced to 240 months in federal prison on 12 counts of wire and mail fraud, one count of conspiracy to commit mail and wire fraud, and two counts of money laundering. Because the federal criminal justice system does not have parole, Kiley will spend virtually his entire sentence behind bars. Kiley and his co-defendants, who have been already sentenced, were also solely and jointly ordered to pay $155,359,411.77 in restitution to the victims of their fraud scheme. Kiley was charged in a second superseding indictment on February 22, 2012, and was convicted on June 12, 2012, after a nearly two-month trial.
On January 3, 2013, Jason Bo-Alan Beckman, age 43, of Plymouth, was sentenced to 360 months in federal prison, on 17 counts of wire and mail fraud, two counts of conspiracy to commit mail and wire fraud, four counts of money laundering, two counts of filing a false tax return, and one count of tax evasion. Gerald Joseph Durand, age 62, of Faribault, was sentenced to 240 months on 12 counts of wire and mail fraud, one count of conspiracy to commit mail and wire fraud, and two counts of money laundering, two counts of concealing a material fact from the U.S., and three counts of filing a false tax return.
Christopher Pettengill, age 56, also of Plymouth, was sentenced to 90 months in federal prison on one count of securities fraud, one count of conspiracy to commit wire fraud, and one count of money laundering.The evidence presented at trial proved that between 2005 and November of 2009, the defendants, along with Cook, defrauded investors by soliciting them to invest money in a foreign currency trading program that they alleged would earn a double-digit rate of return, typically between 10.5 and 12 percent annually, with little or no risk. They also claimed investor assets would be held in a segregated account and could be withdrawn at any time. Those representations were false.
The defendants and Cook made the investment offers through entities known as Universal Brokerage Services or bearing the acronym “UBS.” (The UBS entities had no legitimate affiliation to the global provider of financial services UBS, AG.) Cook operated the currency program through various foreign currency trading firms, including but not limited to one in Chicago and another in Switzerland.
To induce investors, the defendants and Cook, directly or through others, made false representations regarding the performance, safety, and liquidity of the currency program. They also omitted material information concerning their own backgrounds and qualifications as well as the backgrounds and qualifications of those working for them.
Once investments were made, some investors received UBS account statements that indicated that the currency program was performing as promised, while others received checks for “returns on their investments.” Both the statements and checks, however, were actually produced by the co-conspirators, the purpose being to lull investors or encourage them to make additional investments. At the same time, most investors received nothing from the true custodians of their funds.
Although some investment funds were invested in foreign currency trading, most of that trading was high risk in nature, often resulting in significant losses, none of which was disclosed to investors. Moreover, the co-conspirators concealed that the currency trading firm in Switzerland was in dire financial condition and, instead, continued to solicit investor assets to be sent to that trading firm. Co-conspirators also concealed from investors their own concerns about Cook’s operation of the currency program and alleged illegalities relative to the currency program.
In 2007, when UBS, AG, filed a trademark infringement lawsuit against Cook, Durand, Kiley, and others, the defendants began operating their scheme under other names, including but not limited to those identified by the terms “Oxford” and “Universal Brokerage FX.” They then continued to solicit investors for the currency program, utilizing telemarketing, media spots, and seminars in which they repeated the false representations noted above. Kiley, a Christian radio host, solicited investors for the scam through his radio talk show, which was carried on more than 200 stations across the country. On those programs, he regularly warned listeners to avoid financial ruin by giving their life savings to his company for investment.
Between 2005 and July 2009, the defendants, Cook, and others secured approximately $194 million in investments for the currency program. Of that amount, only about $109 million was actually sent to currency trading firms. About $52 million was paid to investors in the form of lulling payments, and approximately $30 million was diverted to fund the business and personal expenses of the defendants, Cook, and others.
In August of 2010, Cook was sentenced to 300 months in federal prison for his role in the scam. On July 18, 2011, Jon Jason Greco pleaded guilty to two counts of making false statements to federal agents, specifically lying about assets he had concealed relative to this scam. He was sentenced to ten months in prison for his crimes.
This case was the result of an investigation by the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigation, with cooperation from the U.S. Securities and Exchange Commission and the Commodities Futures Trading Commission. It was prosecuted by Assistant U.S. Attorneys Tracy L. Perzel and David J. MacLaughlin.
Proceeds from the Cook fraud scheme are the subject of an ongoing investigation and recovery efforts led by the law firm Carlson, Caspers, Vandenburg, and Lindquist, through a previous appointment by Judge Davis.
This law enforcement action is in part sponsored by the interagency Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated, and proactive effort in investigating and prosecuting financial crimes. It includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch and, with state and local partners, will investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.Buffalo Man Pleads Guilty to Food Stamp FraudRead the Press Release
BUFFALO, N.Y.-- U.S. Attorney William J. Hochul, Jr. announced today that Tofeek Albanna, 36, Buffalo, N.Y., pleaded guilty before U.S. District Judge Richard J. Arcara, to food stamp fraud. The charge carries a maximum penalty of 20 years in prison, a fine of $250,000, or both.
Assistant U.S. Attorney Robert C. Moscati, who is handling the case, stated that the defendant conducted illegal electronic food stamp transactions at his store, LA Fashion, in Lackawanna, N.Y. Albanna exchanged food stamp benefits for cash. The defendant also permitted the purchase of prohibited items in exchange for food stamp benefits. Over the course of a 16 month period, Albanna obtained approximately $73,400 in fraudulent food stamp benefits from the U.S. Department of Agriculture.
Sentencing is scheduled for October 19, 2013, at 1:30 p.m. before Judge Arcara.
The plea was the culmination of an investigation on the part of Special Agents of the United States Department of Agriculture, Office of Inspector General; Special Agents of the Federal Bureau of Investigation under the direction of Acting Special Agent in Charge Richard M. Frankel; Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent in Charge James C. Spero; and the New York State Police, Special Investigations Unit, under the direction of Lieutenant Joseph Scioli.Boise Man Sentenced in Aryan Knights Meth InvestigationRead the Press Release
BOISE – Jose Silva, 31, of Boise, Idaho, was sentenced today to 52 months in prison followed by three years of supervised release for distribution of methamphetamine, U.S. Attorney Wendy J. Olson announced. Silva appeared today before U.S. District Judge Edward J. Lodge at the federal courthouse in Boise. He pleaded guilty to the charge on March 6, 2013.
According to the plea agreement, Silva admitted that on January 10, 2012, he sold one-quarter ounce of methamphetamine to a confidential informant for $450. Forensic analysis of the methamphetamine by the Drug Enforcement Administration (DEA) laboratory determined the substance contained more than four grams of actual methamphetamine.
Silva is one of 23 people charged as a result of a long-term investigation by the Treasure Valley Metro Violent Crimes Task Force. The investigation began when the task force focused on illegal drug distribution by the “Aryan Knights,” a gang active in prison and on the streets throughout Idaho. Through the investigation, law enforcement agents identified Aryan Knights gang members who were trafficking methamphetamine, as well as associates of the gang who were the source of that methamphetamine. The 23 defendants have all pleaded guilty, 19 have been sentenced, and four are awaiting sentencing.
The Treasure Valley Metro Violent Crimes Task Force is comprised of federal, state and local agencies, including the Federal Bureau of Investigation, Bureau of Alcohol, Tobacco, Firearms and Explosives, Boise Police Department, Ada County Sheriff’s Office, Caldwell Police Department, Nampa Police Department, Meridian Police Department, Canyon County Sheriff’s Office, and the Idaho Department of Corrections. The Organized Crime and Drug Enforcement Task Force (OCDETF) also contributed to the investigation, including the cooperative law enforcement efforts of the Federal Bureau of Investigation, Drug Enforcement Administration, Bureau of Alcohol, Tobacco, Firearms and Explosives, U. S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), Internal Revenue Service-Criminal Investigation, and U.S. Marshals Service.
Silva was prosecuted by the Special Assistant U.S. Attorney hired by the Treasure Valley Partnership and the State of Idaho to address gang crimes. The Treasure Valley Partnership is comprised of a group of elected officials in southwest Idaho dedicated to regional coordination, cooperation, and collaboration on creating coherent regional growth. For more information, visit treasurevalleypartners.org.