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Friday 24 May 2013
McLaughlin Man Pleads Guilty to Assault ChargesRead the Press Release
United States Attorney Brendan V. Johnson announced that Roman Evans Weasel, Sr., age 39, of McLaughlin, South Dakota appeared before U.S. District Judge Charles B. Kornmann on May 20, 2013 and pled guilty to a Superseding Information that charged him with Assault With a Dangerous Weapon and Domestic Assault by a Habitual Offender.
Each charge carries a maximum penalty of 10 years’ custody, a $250,000 fine or both, and a period of supervised release of 3 years. There is a $100 assessment to the Federal Crime Victims Fund and restitution may also be ordered.
The conviction stems from an incident during the early morning hours of March 5, 2012 when Weasel was at his home in McLaughlin. The victim, who was in a previous relationship with Weasel, came to his home and found Weasel and another person lying in bed together. Weasel saw the victim, became enraged and began to assault the victim with his fists and a knife he kept in his bedroom. As a result of the assault, the victim sustained multiple stab wounds and a broken nose. Weasel had previously been convicted on two or more occasions for assaults against intimate partners.
The investigation was conducted by the Bureau of Indian Affairs, Standing Rock Agency. The case is being prosecuted by Assistant U.S. Attorney Troy R. Morley.
A presentence investigation was ordered, and a sentencing date was set for September 9, 2013. The Defendant was remanded to the custody of the U.S. Marshal pending sentencing.
Maryland Man and WomanRead the Press Release
Plead Guilty to Pandering Charge
-Two Admit Luring Young Woman Into Prostitution-
WASHINGTON - Amina Hamid 20, and Charles Mayberry, 19, both of Oxon Hill, Md., pled guilty today to a charge of pandering, U.S. Attorney Ronald C. Machen Jr. announced.
Both defendants pled guilty in the Superior Court of the District of Columbia. The Honorable Robert I. Richter scheduled sentencing for July 19, 2013. They face a statutory maximum of five years in prison on the charge.
According to the government’s factual proffer at today’s plea hearing, in early 2013, Mayberry lured a young woman into working for him and Hamid by telling her that prostitutes who worked for him earned up to $1,000 per day. Thereafter, Hamid set up an ad on a website in which she advertised the young woman as “. . . the girl u can use like a toy.”
Hamid used her own cellphone number in the ad and handled calls from potential customers. Then she and Mayberry drove the young woman to agreed-upon locations with the customer. Hamid told her what to charge for various sex acts. The young woman turned over the proceeds to Hamid and Mayberry, who then gave her a share.
On May 10, 2013, an undercover police officer, posing as an interested customer, texted Hamid’s cell phone and made arrangements to meet the young woman at a hotel room on New York Avenue NE. Hamid and Mayberry delivered her to the hotel, where they waited for her to return with the money. When the undercover officer gave a pre-arranged signal, an arrest team moved in and arrested Hamid, Mayberry and the young woman.
In announcing today’s plea, U.S. Attorney Machen praised the work of the FBI/Metropolitan Police Department Joint Task Force on Human Trafficking, which investigated the case. He also commended the efforts of those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialist Jason Manuel and Victim/Witness Advocate Tracey Hawkins. Finally, U.S. Attorney Machen commended Assistant U.S. Attorney Peter V. Taylor, who investigated and prosecuted this case.
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Maryland Leader of Guatemalan Drug Ring Sentenced to 15 Years in PrisonRead the Press Release
Greenbelt, Maryland – Chief U.S. District Judge Deborah K. Chasanow sentenced Edwin Galvez-Berganza, age 30, of Hyattsville, Maryland, today to 15 years in prison followed by five years of supervised release for conspiring to distribute cocaine.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge William Winter of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); Special Agent in Charge Karl C. Colder of the Drug Enforcement Administration - Washington Field Division; and Chief J. Thomas Manger of the Montgomery County Police Department .
“This sentence is a great example of HSI’s mission to identify international drug traffickers and disrupt and dismantle their criminal operations in the United States,” said ICE Homeland Security Investigations Special Agent in Charge in Baltimore William Winter. “Let there be no mistake, drug trafficking organizations are reaching right here into our homes and communities in Maryland and HSI remains committed to working with our federal, state and local law enforcement partners to combat these criminal organizations that want to profit from poisoning our children and destroying our way of life.”
According to his guilty plea, from 2005 to 2009 Berganza was a leader of a cocaine trafficking ring. Cocaine was flown from Guatemala to the United States, driven to Connecticut and then hidden in trailer hitches and driven from Connecticut to Berganza and his co-conspirators in Maryland. Each trailer hitch contained 3.5 kilograms of cocaine, which Berganza and his co-conspirators removed with a saw. Berganza also received cocaine that was hidden in candy. Berganza distributed the cocaine to co-conspirators and others.
In November 2006, law enforcement officers arrested two conspirators as they were transporting approximately 20 kilograms of cocaine from Connecticut to Berganza in Maryland. Two days later, Berganza fled the United States to Guatemala to avoid arrest. While in Guatemala, Berganza continued to ship packages of cocaine from Guatemala to Silver Spring, Maryland.
Berganza is responsible for the distribution of more than 150 kilograms of cocaine.
Six defendants have pleaded guilty and been sentenced to up to 10 years in prison.
United States Attorney Rod J. Rosenstein commended the HSI Baltimore, Montgomery County Police Department and DEA for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys Mara Zusman Greenberg and James A. Crowell, who prosecuted this Organized Crime Enforcement Drug Task Force case.
Manhattan U.S. Attorney Announces Extradition of Richard Ammar Chichakli on Money Laundering, Wire Fraud, and Conspiracy ChargesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, today announced that RICHARD AMMAR CHICHAKLI, an associate of the convicted international arms dealer Viktor Bout, was extradited from Australia on charges that he allegedly conspired with Bout and others to violate the International Emergency Economic Powers Act (“IEEPA”) by attempting to purchase two aircraft from companies located in the United States, in violation of economic sanctions that prohibited such financial transactions. CHICHAKLI is also charged with money laundering conspiracy, wire fraud conspiracy, and six separate counts of wire fraud in connection with the attempted aircraft purchases. CHICHAKLI, a citizen of Syria and the United States, was arrested by Australian authorities on January 9, 2013, at the request of the United States. He will appear before U.S. Magistrate Judge Sarah Netburn for presentment and arraignment on May 25, 2013.
Manhattan U.S. Attorney Preet Bharara said: “As alleged, Richard Chichakli and Viktor Bout had common cause – the purchase of aircraft in violation of international sanctions against them for their involvement in facilitating arms delivery to some of the world’s most lethal combat zones. With his extradition today to face charges for his flagrant violation of international sanctions and other crimes, he will now face the same American justice Viktor Bout did.”
According to the Superseding Indictment previously filed in Manhattan federal court and other court documents:
CHICHAKLI was a close associate of Viktor Bout since the mid-1990s. Bout is currently serving a 25-year prison term as a result of his November 2011 conviction in the Southern District for conspiring to sell millions of dollars of weapons to the Fuerzas Armadas Revolucionarias de Colombia (the “FARC”), a designated foreign terrorist organization based in Colombia. Prior to his arrest on those charges in March 2008, in Thailand, and since the 1990s, Bout was an international weapons trafficker. He carried out his massive weapons-trafficking business by assembling a fleet of cargo airplanes capable of transporting weapons and military equipment to various parts of the world, including Africa, South America, and the Middle East. CHICHAKLI assisted Bout in the operations and financial management of his network of aircraft companies.
The arms Bout sold or brokered have fueled conflicts and supported regimes in Afghanistan, Angola, the Democratic Republic of the Congo, Liberia, Rwanda, Sierra Leone and Sudan. As a result of Bout’s role in pouring arms into these international conflicts, his relationship with CHICHAKLI, and Bout and CHICHAKLI’s close relationship with former Liberian President Charles Taylor, both Bout and CHICHAKLI have been the subject of United Nations Security Council (“UNSC”) sanctions restricting their travel and their ability to conduct business around the world. In addition, more than 25 companies affiliated with Bout and CHICHAKLI have been listed by the UNSC as subject to similar restrictions concerning their assets and financial transactions.
In 2004, consistent with the sanctions previously adopted by the UNSC concerning Liberia, the President of the United States issued an executive order prohibiting any transactions or dealings within the United States by individuals affiliated with former President Taylor. Accordingly, the U.S. Department of Treasury, pursuant to its authority under IEEPA, prohibited Bout from conducting any business in the U.S. In 2005, that prohibition was extended to CHICHAKLI.
The United Nations and IEEPA sanctions encumbered CHICHAKLI’s and Bout’s efforts to conduct business within their existing corporate structures. Accordingly, CHICHAKLI and Bout took steps to form new companies, and to register these companies in the names of other individuals in order to create the false appearance that they had no affiliation with them.
One such company – Samar Airlines – was created in 2004, right after the majority of United Nations and IEEPA sanctions became effective. CHICHAKLI and Bout were personally involved in the operational and business affairs and decisions of Samar Airlines, though they held out other individuals as being the officers of the company. In 2007, in violation of the IEEPA sanctions to which they were subject at the time, CHICHAKLI and Bout, acting through Samar Airlines, contracted to purchase two Boeing aircraft from companies located in the United States.
In connection with the purchase of these aircraft and related services, CHICHAKLI and Bout electronically transferred more than $1.7 million through banks in New York and into bank accounts located in the United States. They did so through a number of front companies, the assets of which were also owned and controlled by Bout, in order to evade the UNSC’s sanctions regime and IEEPA prohibitions. Upon the discovery that CHICHAKLI was connected to Samar Airlines, the U.S. Treasury Department blocked the funds that had been transferred into the bank accounts of the U.S. aviation companies.
The Superseding Indictment charges CHICHAKLI with nine separate offenses:
- Count One: Conspiracy to violate the International Emergency Economic Powers Act;
- Count Two: Money laundering conspiracy;
- Count Three: Wire fraud conspiracy; and
- Counts Four through Nine: Wire fraud.
If convicted, CHICHAKLI faces a maximum sentence of 20 years in prison on each of the nine counts. The case is assigned to U.S. District Judge William H. Pauley, III.
Mr. Bharara praised the outstanding investigative efforts of the DEA and thanked the Australian Federal Police, the Victoria State Police, the Australian Attorney General’s Department, the U.S. Department of Justice Office of International Affairs, the U.S. Department of State, and Interpol for their assistance in this matter.
The case is being handled by the Terrorism and International Narcotics Unit. Assistant United States Attorneys Jenna M. Dabbs and Christian R. Everdell are in charge of the prosecution.
The charges contained in the Indictment are merely accusations and the defendant is presumed innocent unless and until proven guilty.
U.S. v. Richard Ammar Chichakli S2 Indictment
Man Charged with Arson for Fire at Children’s Autism FacilityRead the Press Release
LAS VEGAS, Nev. – Federal felony charges have been filed against a Las Vegas man for attempting to destroy a local children’s autism learning facility by fire and explosive devices, announced Daniel G. Bogden, United States Attorney for the District of Nevada.
Samuel Powers, 24, is charged in an indictment dated May 22, 2013, with one count of arson and one count of possession of unregistered firearms (Molotov cocktails). Powers was arrested by federal authorities yesterday, and today made his initial appearance before Magistrate Judge Carl W. Hoffman who accepted the defendant’s plea of not guilty to both counts of the indictment. Powers was ordered detained as a flight risk and danger to the community pending his trial, set for July 23, 2013, before U.S. District Judge Gloria M. Navarro.
The indictment alleges that on April 15, 2013, Powers damaged and attempted to destroy by means of fire and explosive materials an autism facility located at 7055 Windy Street in Las Vegas, and possessed unregistered Molotov cocktails.
If convicted, Powers faces five to 20 years on the arson charge and up to 10 years on the unregistered firearms charge, as well as fines of up to $250,000 on each charge.
This case is being investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Las Vegas Metropolitan Police Department, and the Clark County Fire Department, and prosecuted by Assistant U.S. Attorney Christina M. Brown.
The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Lower Brule Woman Charged with AssaultRead the Press Release
United States Attorney Brendan V. Johnson announced that a Lower Brule, South Dakota, woman has been indicted by a federal grand jury.
Monica Quilt, age 41, was indicted by a federal grand jury on May 15, 2013, for Assault With a Dangerous Weapon and Assault Resulting in Serious Bodily Injury. Quilt appeared before U.S. Magistrate Judge Mark A. Moreno on May 24, 2013, and pled not guilty to the indictment. The maximum penalty on each count upon conviction is 10 years of imprisonment, a $250,000 fine, or both. The charges are merely accusations, and Quilt is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Bureau of Indian Affairs, Lower Brule Agency, and Assistant U.S. Attorney Meghan N. Dilges is prosecuting the case. Quilt was remanded to the custody of the U.S. Marshal’s Service. A trial date has not yet been set.
Little Eagle Man Pleads Guilty to Child Abuse ChargeRead the Press Release
United States Attorney Brendan V. Johnson announced that Tyson J. Keepseagle, age 26, of Little Eagle, South Dakota appeared before U.S. District Judge Charles B. Kornmann on May 20, 2013 and pled guilty to Count I of the Indictment that charged him with Child Abuse.
The maximum penalty upon conviction is 15 years’ custody, a $250,000 fine or both, and a period of supervised release of 3 years. There is a $100 assessment to the Federal Crime Victims Fund and restitution may also be ordered.
The conviction stems from an incident on or around March 2, 2012 when Keepseagle was living with the victim’s mother in Little Eagle. Keepseagle was downstairs with the children, and when the victim’s mother went downstairs she saw Keepseagle holding down the victim, one hand covering her mouth and his other hand containing a fist full of the child’s hair. The victim’s mother immediately leapt on Keepseagle to get him off the victim, and Keepseagle then pinned the victim’s mother on the ground and began punching her.
The investigation was conducted by the Bureau of Indian Affairs, Standing Rock Agency. The case is being prosecuted by Assistant U.S. Attorney Troy R. Morley.
A presentence investigation was ordered, and a sentencing date was set for September 9, 2013. The Defendant was remanded to the custody of the U.S. Marshal pending sentencing.
Little Eagle Man Pleads Guilty to Assault ChargesRead the Press Release
United States Attorney Brendan V. Johnson announced that Ira Weasel, age 32, of Little Eagle, South Dakota appeared before United States District Judge Charles B. Kornmann on May 20, 2013 and pled guilty to an Indictment that charged him with Assault Resulting in Serious Bodily Injury.
The charge carries a maximum penalty of 10 years’ custody, a $250,000 fine or both, 3 years supervised release, and a $100 assessment to the Federal Crime Victims Fund. Restitution may also be ordered.
The conviction stems from an incident on December 24, 2012 when Weasel was socializing at his sister’s home in Little Eagle. Also present was the victim, among others. At some point during the evening, Weasel and the victim got into a verbal altercation, at which time Weasel rushed the victim, pinned her against a wall and began to strangle her. The victim lost consciousness and her body went limp. Weasel released his grasp causing the victim to fall face first onto the floor, where she began to convulse and remained unconscious for several minutes.
The investigation was conducted by the Bureau of Indian Affairs, Standing Rock Agency. The case is being prosecuted by Assistant U.S. Attorney Troy R. Morley.
A presentence investigation was ordered and a sentencing date was set for September 9, 2013. The Defendant was remanded to the custody of the U.S. Marshal pending sentencing.
Lawrence Non-Profit Settles to Resolve Allegations of Federal Grant FraudRead the Press Release
BOSTON – A Lawrence-based non-profit agency, funded largely by federal government grants, has entered into a settlement agreement to resolve allegations that several of its employees, including its former executive director, were paid for work on federal grants that was never done.
Specifically, the Greater Lawrence Community Action Council (GLCAC) applied for, and received, grants from the United States Department of Education to pay a program director and a program case manager to work on a full-time basis. In reality, the GLCAC program director and program case manager were simultaneously holding down part-time, paid positions with the Massachusetts Society for the Prevention of Cruelty to Children, where they worked during normal GLCAC hours. In addition, GLCAC was responsible for claims to the Department of Education for the indirect costs of paying GLCAC’s facilities manager to work on a full-time basis, when in fact, during warm weather months, the facilities manager was golfing one or more afternoons per week during normal GLCAC working hours.
GLCAC also submitted, or caused to be submitted, claims to the U.S. Department of Health and Human Services for the costs of paying its former executive director’s salary for working on a full-time basis, when in fact the former executive director worked only approximately 50 percent of the time that GLCAC claimed.
In the settlement, GLCAC does not dispute the government’s allegations.
“Non-profit agencies perform important work in our communities, oftentimes using public monies. Agencies receiving taxpayers’ dollars are expected to have a sense of integrity and to utilize funds for the actual purposes for which they are intended," said United States Attorney Carmen M. Ortiz. "Federal grant funds have become increasingly competitive in this fiscal climate. Communities suffer when funds are used inappropriately to subsidize employee moonlighting or recreational activities.”
“I am proud of the work of OIG Special Agents and our law enforcement colleagues whose efforts led to today's action,” said Brian Hickey, Special Agent in Charge of the U.S. Department of Education Office of Inspector General's Northeast Regional Office. “We will continue to work with our partners to protect the integrity of Federal education dollars.”
The total settlement amount is $80,282. GLCAC will receive a credit of $57,282 for amounts previously paid to the Department of Health and Human Services pursuant to an administrative audit finding.
Today’s settlement with GLCAC resolves a lawsuit filed by former GLCAC employee Ruth Tarbox under the qui tam, or whistleblower provisions, of the False Claims Act. Under the False Claims Act, private citizens can bring suit on behalf of the United States and share in any recovery. Ms. Tarbox will receive $11,500 as her share of the government’s recovery. The government commends Ms. Tarbox for bringing to light the allegations resolved in the settlement.
U.S. Attorney Ortiz and Brian Hickey, Special Agent in Charge, U.S. Department of Education, Office of Inspector General, Northeast Region, announced the resolution of this matter today. This matter was investigated by Ortiz’s Financial Litigation Unit and the Boston Office of the Inspector General for the Department of Education. It was handled by Assistant United States Attorney Gregg Shapiro of Ortiz’s Civil Division.
This case is docketed as United States ex rel. Tarbox v. Greater Lawrence Community Action Council, Inc., and Philip F. Laverriere, Sr., No. 11cv12334-DPW (D. Mass.).
To report waste, fraud, abuse or misconduct concerning federal programs, please visit the website for the Office of the Inspector General (OIG) for the various entities: Department of Justice, U.S. Health and Human Services, Department of Education, Department of Homeland Security, Social Security Administration and U.S. Housing and Urban Development.
Las Vegas Fraudster Facing Federal Charges for Multi-Million Dollar Telemarketing OperationRead the Press Release
On May 22, 2013, Michael Patrick Sullivan, Jr., 37, of Las Vegas, Nevada, was charged in a federal indictment with conspiracy to commit wire fraud and mail fraud, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today. If convicted, Sullivan is subject to a term of imprisonment of up to 25 years, a fine of $250,000 and five years of supervised release.
The charge arose out of a telemarketing scam which operated in Las Vegas, Nevada, which the indictment alleged bilked over 3,000 victims of approximately 10 million dollars. Consumers were victimized in all fifty states, the District of Columbia and Puerto Rico, all ten Canadian provinces and the Northwest Territory of Canada, as well as Australia, Israel and the United Kingdom. There were at least twelve (12) victims in nine (9) of the thirty-eight (38) counties comprising the Southern District of Illinois. The indictment alleges that the scheme operated from December 5, 2006, until January 24, 2012.
The indictment alleges that Sullivan owned a telemarketing company, Vacation Max, which operated a timeshare resale scam. The company purported to be a Georgia corporation located in Delaware, but actually operated in Las Vegas, Nevada. The indictment alleges that the company falsely represented that they had found corporate buyers interested in acquiring blocks of timeshare units including the consumer's timeshare unit for purported business and tax purposes. The company solicited fees of up to several thousand dollars from each timeshare owner in purported pre-paid closing costs and related expenses. The indictment alleges that the purported sales did not occur and that Vacation Max did not successfully sell any consumer’s timeshare interest except a relatively small number at “firesale” prices.
This case is one of several cases recently prosecuted by the U.S. Attorney's Office for the Southern District of Illinois relating to timeshare resale fraud.
The prosecution of the case is being handled by Assistant U.S. Attorneys Bruce E. Reppert and Nathan D. Stump.
An indictment is a formal charge against a defendant. Under the law, a defendant is presumed to be innocent of a charge until proven guilty beyond a reasonable doubt to the satisfaction of a jury.
Largo Man Sentenced to More Than 12 Years in Prison for Child Pornography OffensesRead the Press Release
Tampa, Florida - U.S. District Judge Virginia M. Hernandez Covington sentenced David Lee Franklin (62, Largo) yesterday to twelve years and seven months in federal prison for transportation, receipt, and possession of child pornography. The court also ordered Franklin to forfeit computers, hard drives, and assorted CDs and DVDs that were involved in the offenses. Franklin pleaded guilty on February 26, 2013.
According to court documents, an undercover detective downloaded multiple image and video files depicting child pornography from Franklin over several months beginning in November 2011. On June 13, 2012, law enforcement officers executed a search warrant at Franklin's residence. Franklin agreed to an interview and confessed to downloading and viewing child pornography. Also at the time of the search, the officers observed that Franklin was downloading child pornography via the internet. The officers seized Franklin's computers and related equipment. Subsequent forensics review found that they contained several thousand images and videos of child pornography.This case was investigated by the Federal Bureau of Investigation, the Pinellas County Sheriff’s Office, the Largo Police Department, and the Florida Department of Law Enforcement as part of the FBI's Violent Crimes Against Children Task Force. It was prosecuted by Assistant United States Attorney Joseph W. Swanson.
It is another case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, 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."
Joyce Tatsey Spoonhunter Found Guilty in U.S. Federal CourtRead the Press Release
The United States Attorney's Office announced that on May 22, 2013, in Great Falls, after a federal district court trial before Chief U.S. District Judge Dana L. Christensen, JOYCE TATSEY SPOONHUNTER, a 56-year-old resident of Browning, was found guilty of three counts of wire fraud. Sentencing is set for August 28, 2013. She is currently released on special conditions.
At trial, the following evidence and testimony was presented to the jury.
The North American Indian Days is a time for celebration on the Blackfeet Indian Reservation. Friends gather, eat, enjoy the warm summer days, and vendors attend to display their skills and products in order to generate income off the attendees. A tremendous amount of money is generated during the celebration.
SPOONHUNTER used her position in the Blackfeet Tribe to steal money from individuals who tried to reserve spots for vendor sites at the North American Indian Days. When the vendors arrived, their spots had not been reserved, and their payments to SPOONHUNTER had not been turned over to the Tribe. As a result, vendors were required to double-pay or move their reserved spots to an undesirable location at the North American Indian Days. Payments made to individuals other than SPOONHUNTER had no problem.
The amount SPOONHUNTER is accountable for was approximately $8,000.
Assistant U.S. Attorney Ryan G. Weldon prosecuted the case for the United States.
SPOONHUNTER faces, for each count, possible penalties of 20 years in prison, a $250,000 fine, and 3 years supervised release.
The investigation was conducted by the Federal Bureau of Investigation and the Blackfeet Internal Affairs.
Jerayr Rostamian and His Company Sentenced for Structuring Financial Transactions to Avoid Reporting Requirements and Conspiracy to Commit Money LaunderingRead the Press Release
Dana J. Boente, U. S. Attorney; Michael Anderson, Special Agent in Charge, Federal Bureau of Investigation; Mike Fields, Department of Health and Human Services, Office of Inspector General; Fred Duhy, Louisiana Department of Justice’s Medicaid Fraud Control Unit, and Gabriel Grchan, Special Agent in Charge, Internal Revenue Service-Criminal Investigation announced today that JERAYR ROSTAMIAN, age 50, from Northridge, California, was sentenced today to 40 months incarceration and fined $250,000 by U. S. District Judge Lance M. Africk after previously pleading guilty to structuring monetary transactions to avoid reporting requirements. In addition to the term of imprisonment, Judge Africk ordered that ROSTAMIAN be placed on three years of supervised release following his term of imprisonment, during which time the defendant will be under federal supervision and risks an additional term of imprisonment should he violate any terms of his supervised release. The corporation ROSTAMIAN owned, MED-TECH TECHNOLOGIES, INC., was sentenced today to five years probation and restitution in the amount of $3,722,480 to be paid to Medicare and Medicaid. MED-TECH TECHNOLOGIES, INC. previously plead guilty to a conspiracy to commit money laundering. Additionally, Judge Africk ordered MED-TECH’s assets forfeited.
According to court documents, MED-TECH participated in a criminal organization for the purpose of fraudulently billing Medicare and Medicaid. Recruiters found patients to bring to a series of medical clinics located in the greater New Orleans area for medical tests that were not performed and not medically necessary. The clinics' patients were moved between the various clinics and repeatedly perform the same unnecessary tests. The patients received prescriptions for drugs, usually narcotics, for their cooperation, and the recruiters were provided cash and prescription drugs for their services.
Once Medicare and Medicaid paid the clinics, MED-TECH TECHNOLOGIES, INC., engaged in a series of financial transactions designed to disguise the fact that the money had been obtained unlawfully and to hide the funds from Medicare and Medicaid. In particular, the clinics regularly and routinely purchased used medical equipment from MED-TECH. The prices the clinics paid for the used medical equipment was significantly more than the value of the medical equipment. Often brand new medical equipment could have been purchased for much less than the medical clinics paid MED-TECH for the used equipment. The clinic owners also paid exorbitant repair fees to MED-TECH, supposedly to repair the outdated equipment. For example, the clinics paid MED-TECH over $165,000 for an outdated machine that was worth less than $5,000. In total, MED-TECH laundered approximately $3.7 million for the clinics between January 2009 and April 2011.
After the fraudulent funds from the Louisiana-based clinics were deposited into bank accounts, ROSTAMIAN withdrew much of the funds in cash, in amounts just below the threshold that would trigger the bank to file a report with the government. ROSTAMIAN’S structured cash withdraws of the money he received from the clinics were designed to avoid federal transaction reporting requirements, in violation of federal law.
“This case should serve as a reminder that the New Orleans-based health care fraud law enforcement team will expand its reach well beyond the Louisiana borders, as necessary, to bring those individuals who defraud Medicare and Louisiana Medicaid to justice,” stated Michael Anderson, Special Agent in Charge, Federal Bureau of Investigation.
“IRS Criminal Investigation is committed to unraveling complex financial transactions and money laundering schemes,” stated IRS Special Agent in Charge Gabriel Grchan of the New Orleans Field Office. “There is a price to be paid for engaging in fraud schemes and Mr. Rostamian will now be held accountable for his actions.”
“Today's guilty pleas are part of an ongoing effort by HAS-OIL and our federal law enforcement partners to bring to justice those who prey on our elderly for financial gain. Our highly trained and motivated HAS-OIL special agents are combining cutting-edge fraud detection and analysis technology with old fashioned police work to protect and preserve the Medicare program,” added Mike Fields, Special Agent in Charge, Department of Health and Human Services, Office of Inspector General.
Louisiana Attorney General Buddy Caldwell said, “This aggressive multi-agency effort has dismantled a significant health care fraud operation and sends a clear message to those who rob taxpayer dollars and exploit vulnerable residents that depend on Medicaid and Medicare for care.”
ROSTAMIAN and MED-TECH are the most recent defendants in the scheme to be sentenced. Eleven individuals and six corporations have already pleaded guilty to various parts of this scheme, which resulted in approximately $21,885,000 in fraudulent Medicare and Medicaid billings.
The investigation was conducted by Special Agents of the Federal Bureau of Investigation; the U. S. Department of Health and Human Services, Office of Inspector General; the Louisiana Department of Justice, Medicaid Fraud Control Unit and the Internal Revenue Service-Criminal Investigation. The case was prosecuted by Assistant U. S. Attorneys Patrice Harris Sullivan, Jordan Ginsberg and G. Dall Kammer.
ISTA Pharmaceuticals, Inc. Plead Guilty to Federal Felony Charges; Will Pay $33.5 Million to Resolve Criminal lLability and False Claims Act AllegationsRead the Press Release
BUFFALO - U.S. Attorney William J. Hochul, Jr. announced today that pharmaceutical company ISTA Pharmaceuticals, Inc. pleaded guilty to conspiracy to introduce a misbranded drug into interstate commerce and conspiracy to pay illegal remuneration in violation of the Federal Anti-Kickback Statute before U.S. District Court Judge Richard J. Arcara. The guilty pleas are part of a global settlement with the United States in which ISTA agreed to pay $33.5 million to resolve criminal and civil liability arising from its marketing, distribution and sale of its drug Xibrom, one of the largest settlements ever in the Western District of New York.
According to Assistant U.S. Attorney MaryEllen Kresse, who handled the case, ISTA conspired to illegally introduce a misbranded drug, Xibrom, into interstate commerce. Under the Food, Drug and Cosmetic Act (FDCA), it is illegal for a drug company to introduce into interstate commerce any drug that the company intends will be used for uses not approved by the Food and Drug Administration (FDA). Xibrom is an ophthalmic, nonsteroidal, anti-inflammatory drug that was approved by FDA to treat pain and inflammation following cataract surgery. In order to expand sales of Xibrom outside of its approved use, ISTA conspired to introduce misbranded Xibrom into interstate commerce.
"Today's resolution sends a clear message that pharmaceutical companies cannot put profit ahead of people, by disregarding laws designed to protect the health of the American public," said United States Attorney William J. Hochul, Jr.
Between 2005 and 2010, some ISTA employees promoted Xibrom for unapproved new uses, including the use of Xibrom following Lasik and glaucoma surgeries, and for the treatment and prevention of cystoid macular edema. Continuing medical education programs were used to promote Xibrom for uses that were not approved by the FDA as safe and effective, and post-operative instruction sheets for unapproved uses were paid for by some company employees and provided to physicians. The evidence also showed that ISTA employees were told by management, in an effort to avoid detection, not to memorialize in writing certain interactions with physicians regarding unapproved new uses, and not to leave certain printed materials in physicians' offices relating to unapproved new uses.
In addition, ISTA pleaded guilty to conspiracy to offer and pay remuneration to physicians in order to induce those physicians to prescribe Xibrom, in violation of the federal Anti-Kickback Statute. Under the law, it is illegal to offer or pay remuneration, directly or indirectly, overtly or covertly, in cash or in kind, to physicians to induce them to refer individuals to pharmacies for the dispensing of drugs, for which payments are made in whole or in part under a Federal health care program. In this matter, certain ISTA employees, with the knowledge and at the direction of ISTA, offered and provided physicians with free Vitrase, another ISTA product, with the intent to induce such physicians to refer individuals to pharmacies for the dispensing of the drug Xibrom. In addition, ISTA provided other illegal remuneration, including a monetary payment to sponsor an event of a non-profit group associated with a particular physician, a golf outing, a wine-tasting event, paid consulting or speaker arrangements, and honoraria for participation in advisory meetings which were intended to be marketing opportunities, with the intent to induce physicians to refer individuals to pharmacies for the dispensing of the drug Xibrom.
U.S. Attorney Hochul further stated, "The fact that ISTA offered doctors illegal inducements - such as a wine tasting, golf outing, and payments to attend what were in essence marketing sessions - makes the company's illegal conduct particularly deserving of the hefty penalty ISTA has agreed to pay."
Under the terms of the plea agreement, ISTA will pay a total of $18.5 million, including a criminal fine of $16,125,000 for the conspiracy to introduce misbranded Xibrom into interstate commerce, $500,000 for the conspiracy to violate the Anti-Kickback Statute, and $1,850,000 in asset forfeiture associated with the misbranding charge.
ISTA also entered into a civil settlement agreement, under which, according to Assistant U.S. Attorney Kathleen A. Lynch, the company agreed to pay $15 million to the federal government and to individual states in order to resolve claims arising from its marketing of Xibrom. ISTA's conduct caused false claims to be submitted to government health care programs. The civil settlement resolved allegations that ISTA promoted the sale and use of Xibrom for certain uses that were not FDA-approved and not covered by the Federal health care programs. The United States further alleged that ISTA's violations of the Anti-Kickback Statute resulted in false claims being submitted to federal health care programs. The federal share of the civil settlement is $14,609,746.16, and the state Medicaid share of the civil settlement is $390,253.84. The civil settlement resolves two lawsuits filed in the Western District of New York under the whistle blower provisions of the False Claims Act. Such provisions permit private parties to file suit on behalf of the United States for false claims and obtain a portion of the government's recovery.
Except as admitted in the plea agreement, the claims settled by the civil settlement agreement are allegations only, and there has been no determination of liability as to those claims. In addition to the criminal fines and asset forfeiture, ISTA's parent company, Bausch+Lomb, Inc., which acquired ISTA in June 2012, has agreed to maintain a Compliance and Ethics Program. Upon conviction for the criminal charges described above, ISTA will face mandatory exclusion from Federal health care programs.
Assistant U.S. Attorneys MaryEllen Kresse and Kathleen A. Lynch, who handled the Criminal and Civil aspects of the case respectively, stated that "the civil and criminal penalties imposed today fully redressed the misconduct engaged in by ISTA prior to its acquisition by Bausch + Lomb, Inc."
ISTA Pharmaceuticals Inc. Pleads Guilty to Federal Felony Charges; Will Pay $33.5 Million to Resolve Criminal Liability and False Claims Act AllegationsRead the Press Release
Pharmaceutical company ISTA Pharmaceuticals, Inc. pled guilty earlier today to conspiracy to introduce a misbranded drug into interstate commerce and conspiracy to pay illegal remuneration in violation of the Federal Anti-Kickback Statute, the Justice Department announced today. U.S. District Court Judge Richard J. Arcara accepted ISTA's guilty pleas. The guilty pleas are part of a global settlement with the United States in which ISTA agreed to pay $33.5 million to resolve criminal and civil liability arising from its marketing, distribution and sale of its drug Xibrom.ISTA pled guilty in the Western District of New York to criminal charges that the company conspired to illegally introduce a misbranded drug, Xibrom, into interstate commerce. Under the Food, Drug and Cosmetic Act (FDCA), it is illegal for a drug company to introduce into interstate commerce any drug that the company intends will be used for uses not approved by the Food and Drug Administration (FDA). Xibrom is an ophthalmic, nonsteroidal, anti-inflammatory drug that was approved by FDA to treat pain and inflammation following cataract surgery. In order to expand sales of Xibrom outside of its approved use, ISTA conspired to introduce misbranded Xibrom into interstate commerce.
Between 2005 and 2010, some ISTA employees promoted Xibrom for unapproved new uses, including the use of Xibrom following Lasik and glaucoma surgeries, and for the treatment and prevention of cystoid macular edema. The evidence showed that continuing medical education programs were used to promote Xibrom for uses that were not approved by the FDA as safe and effective, and that post-operative instruction sheets for unapproved uses were paid for by some company employees and provided to physicians. These activities are evidence of intended uses unapproved by FDA, which rendered the drug misbranded under the FDCA.
ISTA pled guilty to a felony based on evidence that some ISTA employees were told by management not to memorialize in writing certain interactions with physicians regarding unapproved new uses, and not to leave certain printed materials in physicians' offices relating to unapproved new uses. These instructions were given in order to avoid having their conduct relating to unapproved new uses being detected by others. ISTA agreed that this conduct represented an intent to defraud under the law.
In addition, ISTA pled guilty to a conspiracy to knowingly and willfully offering or paying remuneration to physicians in order to induce those physicians to prescribe Xibrom, in violation of the federal Anti-Kickback Statute. Under the law, it is illegal to offer or pay remuneration, directly or indirectly, overtly or covertly, in cash or in kind, to physicians to induce them to refer individuals to pharmacies for the dispensing of drugs, for which payments are made in whole or in part under a Federal health care program. In this matter, certain ISTA employees, with the knowledge and at the direction of ISTA, offered and provided physicians with free Vitrase, another ISTA product, with the intent to induce such physicians to refer individuals to pharmacies for the dispensing of the drug Xibrom. In addition, ISTA provided other illegal remuneration, including a monetary payment to sponsor an event of a non-profit group associated with a particular physician, a golf outing, a wine-tasting event, paid consulting or speaker arrangements, and honoraria for participation in advisory meetings which were intended to be marketing opportunities, with the intent to induce physicians to refer individuals to pharmacies for the dispensing of the drug Xibrom.
Under the terms of the plea agreement, ISTA will pay a total of $18.5 million, including a criminal fine of $16,125,000 for the conspiracy to introduce misbranded Xibrom into interstate commerce, $500,000 for the conspiracy to violate the Anti-Kickback Statute, and $1,850,000 in asset forfeiture associated with the misbranding charge.
ISTA also entered into a civil settlement agreement under which it agreed to pay $15 million to the federal government and states to resolve claims arising from its marketing of Xibrom, which caused false claims to be submitted to government health care programs. The civil settlement resolved allegations that ISTA promoted the sale and use of Xibrom for certain uses that were not FDA-approved and not covered by the Federal health care programs, including prevention and treatment of cystoid macular edema, treatment of pain and inflammation associated with non-cataract eye surgery, and treatment of glaucoma. The United States further alleged that ISTA's violations of the Anti-Kickback Statute resulted in false claims being submitted to federal health care programs. The federal share of the civil settlement is $14,609,746.16, and the state Medicaid share of the civil settlement is $390,253.84. Except as admitted in the plea agreement, the claims settled by the civil settlement agreement are allegations only, and there has been no determination of liability as to those claims.
"As today's global resolution demonstrates, the Department of Justice is committed to making sure that pharmaceutical companies play by the rules," said Stuart F. Delery, Acting Assistant Attorney General for the Civil Division. "Health care fraud in any form undermines the integrity of our health care system and can drive up costs for all of us."
"Today's resolution sends a clear message that pharmaceutical companies cannot put profit ahead of people, by disregarding laws designed to protect the health of the American public," said United States Attorney William J. Hochul, Jr. "The fact that ISTA offered doctors illegal inducements - such as a wine tasting, golf outing, and payments to attend what were in essence marketing sessions - makes the company's illegal conduct particularly deserving of the hefty penalty ISTA has agreed to pay."
"It is especially concerning when companies actively take steps to conceal improper conduct which may jeopardize public health," said Antoinette V. Henry, Special Agent in Charge, Metro-Washington Field Office, FDA Office of Criminal Investigations. "We will continue to work tirelessly with the Department of Justice and our law enforcement counterparts to uncover such conduct."
In addition to the criminal fines and asset forfeiture, ISTA's parent company, Bausch+Lomb, Incorporated (B+L), has agreed to maintain a Compliance and Ethics Program. B+L has agreed that it will maintain policies and procedures that: (1) prohibit the involvement of sales and marketing personnel and others on the businesses' commercial team in the final decision-making process with respect to educational grants in the United States, while also ensuring that the educational programming is focused on objective scientific and educational activities and discourse; (2) require sales agents to discuss only those product uses that are consistent with what is indicated on the product's approved package labeling and to forward requests for information regarding uses of B+L's products not approved by FDA to a Medical Affairs Professional; and (3) prohibit the company from engaging in any conduct that violates the Anti-Kickback Statute, including the offering or paying of any remuneration to any person to induce such person to prescribe any drug for which payment may be made in whole or in part under a Federal health care program. The Program also requires that B+L's President of Global Pharmaceuticals conduct an annual review of the effectiveness of B+L's Program as it relates to the marketing, promotion, and sale of prescription pharmaceutical products, and certify that to the best of his or her knowledge, the Program was effective in preventing violations of Federal health care program requirements and the FDCA regarding sales, marketing, and promotion of B+L's prescription pharmaceutical products.
The civil settlement resolves two lawsuits filed under the whistleblower provisions of the False Claims Act, which permit private parties to file suit on behalf of the United States for false claims and obtain a portion of the government's recovery. The civil lawsuits were filed in the Western District of New York and are captioned United States ex rel. Keith Schenker v. ISTA Pharmaceuticals, Inc. and United States, et al., ex rel. DJ PARTNERSHIP 2011, LLP v. ISTA Pharmaceuticals, Inc. As part of today's resolution, Mr. Schenker will receive approximately $2.5 million from the federal share of the civil recovery.
Upon conviction for the criminal charges described above, ISTA will face mandatory exclusion from Federal healthcare programs. Exclusion will mean that on the effective date of the exclusion, any ISTA labeled drugs in ISTA's possession would no longer be reimbursable by Medicare, Medicaid, or other Federal healthcare programs. In June 2012, B+L acquired ISTA. Simultaneous with the False Claims Act settlement and the entry of the plea, the U.S. Department of Health and Human Services' Office of Inspector General, ISTA, and B+L will enter into a Divestiture Agreement under which ISTA agrees to be excluded for 15 years, effective six months after the date of the settlement. Under the terms of the Divestiture Agreement, ISTA will transfer all assets to B+L or a B+L subsidiary and will stop shipping ISTA labeled drugs within six months of the Divestiture Agreement. Six months after the effective date of the Divestiture Agreement, all ISTA labeled drugs in the possession of ISTA or B+L will no longer be reimbursable by Medicare, Medicaid, and other Federal healthcare programs. Those ISTA labeled drugs in the stream of commerce at that time will continue to be reimbursable.
"We agreed to enter into this Divestiture Agreement based on the facts of this case, including that B+L did not have a corporate relationship with ISTA during the improper conduct," said Daniel R. Levinson, Inspector General of the U.S. Department of Health and Human Services. "In addition, B+L acquired ISTA more than a year after the improper conduct ended, and B+L did not hire any of ISTA's executives or senior management."
The criminal case was prosecuted by Assistant Director Jeffrey Steger of the Consumer Protection Branch of the Civil Division of the Department of Justice and Assistant United States Attorney MaryEllen Kresse of the Office of the U.S. Attorney for the Western District of New York. They were assisted by Associate Chief Counsel Kelsey Schaefer of the Food and Drug Division, Office of General Counsel, Department of Health and Human Services. The case was investigated by the Food and Drug Administration's Office of Criminal Investigations and Health and Human Services Office of Inspector General. The civil settlement was handled by Trial Attorneys Colin Huntley and Benjamin Young of the Commercial Litigation Branch of the Civil Division of the Department of Justice and Assistant United States Attorney Kathleen Lynch of the Office of the U.S. Attorney for the Western District of New York.
This resolution is part of the government's emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover more than $10.4 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department's total recoveries in False Claims Act cases since January 2009 are over $14.3 billion.
German Rolando Vicente-Sapon Sentenced to Serve 15 Years in Prison for Transporting A Minor Across the Mexican Border for Unlawful Sexual ActivityRead the Press Release
Vicente had faced a 10-year mandatory minimum
CHATTANOOGA, Tenn. – On Thursday, May 23, 2013, German Rolando Vicente-Sapon, 41, of Guatemala, was sentenced by the Honorable Curtis Collier, U.S. District Judge, to serve 188 months in federal prison.
Following a three-day trial, a jury convicted Vicente-Sapon in November 2012 for transporting a minor across the Mexican border for unlawful sexual activity and two additional smuggling charges, also involving the minor who was an alien from Guatemala. According to proof presented at trial, the victim was 16 years old and facing an arranged marriage in Guatemala when Vicente-Sapon, who was then in his thirties, offered to help her come to the United States for a better life. Testimony showed that Vicente-Sapon paid $2000 for others to smuggle her to Chattanooga, Tenn. Once she arrived, he coerced her into having sexual relations with him and she relented, believing she had no other choice.
During the sentencing hearing, Vicente-Sapon claimed that he had fallen in love with the girl, a statement that Judge Collier found unbelievable.
Agencies involved in this investigation included Homeland Security Investigations and the Federal Bureau of Investigation. Jay Woods, Assistant United States Attorney, represented the United States.
Former St. Thomas Business Partners Sentenced to 6 Months in Prison in Tax SchemeRead the Press Release
St. Thomas, USVI – District Court Chief Judge Curtis V. Gomez on May 16, 2013 sentenced business
owners Joseph Thomas Edge and his wife, Laura A. Edge, to six months in prison for attempting to evade
or defeat tax, to be followed by six months of supervised release, announced Ronald W. Sharpe, United
States Attorney for the District of the Virgin Islands, and Michael J. DePalma, Acting Special
Agent-in-Charge, Internal Revenue Service, Criminal Investigation Division (IRS-CI). Gomez also
ordered the Edges to pay restitution in the amount of $271,674 to the Virgin Islands Bureau of Internal
Revenue.Joseph and Laura Edge pleaded guilty on December 12, 2012, to attempting to evade or defeat tax
in violation of Virgin Islands law for the 2004 tax year. The Edges were part owners and operating
partners of Aqua Adventures, a company located on St Thomas that provided water tours. According to
the plea agreement, during the years, 2002 through 2006, the Edges attempted to evade a large part of the
tax due and owing to the IRB by concealing their earned income. They concealed their income by
causing personal debts to be paid through Aqua Adventures, and failing to report to IRB cash payments
the company received from selling merchandise.The case was investigated by IRS-CI, with assistance from IRB Criminal Investigation
Division. The case was prosecuted by Assistant United States Attorney Kelly Lake.Former Key West Bank Officer Pleads Guilty to Disclosing A Federal Grand Jury Subpoena with the Intent to Obstruct A Judicial ProceedingRead the Press Release
Tampa, Florida - United States Attorney Robert E. O'Neill announces that Karen Galo (33, Key West) pleaded guilty yesterday to unlawfully disclosing a federal grand jury subpoena to a third party with the intent to obstruct a judicial proceeding. Galo faces a maximum penalty of 5 years in federal prison.
According to the plea agreement, on October 9, 2008, Galo, in her capacity as an officer of Key West Bank, received two federal grand jury subpoenas related to an investigation into mortgage fraud and money laundering. Galo knew the subject of the grand jury subpoenas. After receiving the grand jury subpoenas at the bank, Galo contacted the subject and sent him the subpoenas by fax. Galo disclosed the subpoenas to the subject with the intent to obstruct the investigation being conducted in Tampa. Included with the grand jury subpoenas served on the bank was a warning letter notifying Galo that it is a federal crime to disclose a federal grand jury subpoena received by a financial institution. Galo included the letter in the fax sent to the subject, along with the two subpoenas. Two days after the subject received the grand jury subpoenas, he fled the United States.
This case was investigated by the U.S. Department of Homeland Security, Homeland Security Investigations. It is being prosecuted by Assistant United States Attorney Simon Gaugush.
Former Employee of Assisted Living Center Sentenced to 37 Months in Prison for FraudRead the Press Release
Oklahoma City, Oklahoma – Yesterday, JAMES LESTER HAUSAM, JR., 29, of Oklahoma City, Oklahoma, was sentenced to serve 37 months in prison in connection with a scheme to steal money from a resident at a metro retirement home, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma.
In 2010, Hausam worked at an assisted-living center in Bethany, Oklahoma. There, he became friends with Monica Michelle Brown, who also worked at the center. Hausam befriended a ninety-six-old resident at the center, fraudulently gained access to the resident’s bank account, and stole more than $250,000 belonging to him. Hausam used online banking to write checks to themselves from the resident’s account, forged the resident’s signature on blank checks, and purchased personal items through a PayPal account they set up in the resident’s name.
On September 11, 2012, Hausam was charged in a one-count Information with conspiracy to commit mail fraud and to make and possess forged securities. The Information alleged that, from January through June of 2011, Hausam and Brown conspired to steal tens of thousands of dollars for their personal benefit from a bank account belonging to the assisted-living center resident, without his permission. On September 25, 2012, Hausam pled guilty to the conspiracy count. Hausam admitted that he asked the victim in 2010 for money to help with bills; the resident gave Hausam a $1,000 check and a few blank checks. Hausam later started accessing the resident’s bank account online and writing checks from that account. Hausam admitted he also forged the resident’s name on a blank check that the resident had given him. At the plea hearing, Hausam admitted that he used the funds for his personal benefit, but never told the ninety-six-old resident that he and Brown were writing checks for thousands of dollars from the account.
At yesterday’s sentencing, United States District Judge Robin J. Cauthron sentenced Hausam to serve 37 months in federal prison, followed by three years of supervised release. Hausam was also ordered to pay restitution to the victim in the amount of $249,653.38. Hausam was remanded to the custody of the U.S. Marshal to begin service of his sentence.
The alleged conspirator, Monica Michelle Brown (a/k/a Monica Agee), 40, from Oklahoma City, was indicted by a federal grand jury on November 7, 2012, and charged with conspiracy to defraud, mail fraud, and forgery of checks. If convicted, Brown faces up to 20 years in prison and a $250,000 fine. The public is reminded that the indictment is merely an accusation and that Brown is presumed innocent unless and until proven guilty.
Brown has not been arrested and remains a fugitive. Anyone with information on her whereabouts should contact the Federal Bureau of Investigation at 405-290-7770.
These cases are the result of an investigation conducted by the Federal Bureau of Investigation and the Bethany Police Department. The cases are being prosecuted by Assistant United States Attorney Chris M. Stephens.
Executives, Borrower Convicted in Massive Fraud Scheme That Led to Collapse of Bank of the CommonwealthRead the Press Release
NORFOLK, Va. – Following a multi-week trial, three top executives and a favored borrower have been convicted by a federal jury in Norfolk, Va. Accused of masking non-performing assets at the Bank of the Commonwealth for their own personal benefit and to the detriment of the Bank, this long-running scheme contributed to the failure of the Bank in 2011, costing the Federal Deposit Insurance Corporation (FDIC) an estimated $268 million.
Neil H. MacBride, United States Attorney for the Eastern District of Virginia; Royce E. Curtin, Special Agent in Charge of the FBI’s Norfolk Field Office; Thomas J. Kelly, Special Agent in Charge of the Internal Revenue Service Criminal Investigation’s Washington, D.C., Field Office (IRS-CI); Christy L. Romero, Special Inspector General for the Troubled Asset Relief Program (SIGTARP); Jon T. Rymer, Inspector General of the Federal Deposit Insurance Corporation (FDIC-OIG); and Mark Bialek, Inspector General of the Board of Governors of the Federal Reserve System and Consumer Financial Protection Bureau (FRB-CFPB OIG) made the announcement.
“The brazen greed and dishonesty of these four defendants toppled one of Virginia’s largest financial institutions and intensified the impact of the 2008 financial crisis on the public during the height of the fiscal storm,” said U.S. Attorney Neil H. MacBride. “Today’s verdict sends a clear message to top executives and insiders in the financial services industry that those entrusted with the health of our financial institutions will be held accountable when they violate that trust.”“Today, those responsible for the corruption leading to one of the biggest bank failures in Virginia history impacting our Hampton Roads community were held accountable,” said FBI Special Agent In Charge Royce E. Curtin. “The extensive two year investigation led by FBI Norfolk Division, in conjunction with IRS, SIGTARP, FDIC-OIG, and FRB-CFPB OIG, identified and unraveled a criminal enterprise conducting complex fraudulent financial transactions. This case reflects the FBI and its partners' commitment to protect our communities by aggressively investigating and bringing to justice individuals exploiting their influence or position for personal gain.”
“Today's conviction is a reminder that IRS Criminal Investigation is committed to unraveling complex financial transactions of individuals who scheme to defraud U.S taxpayers,” said Thomas J. Kelly, Special Agent in Charge, IRS Criminal Investigation, Washington DC Field Office. “We will continue to work with our law enforcement partners to protect the integrity of our financial system.”
"Today's verdict shows that the same rules apply to bank executives as to any other citizen, and the verdict should stand as a warning to anyone engaged in fraud related to TARP; you will be held accountable and brought to justice for your crimes," said Christy Romero, Special Inspector General for TARP (SIGTARP). "Edward Woodard and other senior executives at Bank of the Commonwealth and their network of co-conspirators cultivated a culture of deceit and corruption at the bank, exchanging personal favors and lining their pockets while defrauding customers, shareholders, and federal regulators and driving the bank into the ground. The selfishness required to engage in such a fraud with the expectation that taxpayers and members of the community would clean up the mess is both legally and morally offensive. I would like to commend U.S. Attorney MacBride and the Assistant U.S. Attorneys for their exceptional work prosecuting the case."
“The Federal Deposit Insurance Corporation (FDIC) Office of Inspector General is pleased to join our law enforcement colleagues in bringing these individuals to justice,” said FDIC Inspector General Jon T. Rymer. “We applaud the efforts of the U.S. Attorney’s Office, its staff, and the special agents who worked this lengthy, complex investigation and trial. We especially appreciate the willingness of the Eastern District of Virginia to devote the time and resources needed to bring this case to trial. This case involves the largest bank failure in the Commonwealth of Virginia—one that caused more than $268 million in losses to the FDIC’s Deposit Insurance Fund and harmed people and businesses in the Tidewater, Virginia community. We are particularly concerned when individuals occupying positions of trust in a bank abuse their positions, conspire with others, and engage in criminal activities. We will continue to pursue such offenders in the interest of maintaining the integrity of our nation's banks and protecting the Deposit Insurance Fund.”
“Our office is committed to bringing to justice bank executives who engage in illegal activities that undermine the public trust,” said Mark Bialek, Inspector General of the Board of Governors of the Federal Reserve System and the Consumer Financial Protection Bureau. “We will continue to work with our law enforcement partners to vigorously pursue wrongdoers whose fraudulent actions materially impact the Federal Reserve Board’s supervision program.”
Edward J. Woodard, 70, served as the Bank’s chief executive officer and chairman of the board for more than three decades until he was forced to step down as chairman and ultimately retire from the Bank in December 2010, was convicted of conspiracy to commit bank fraud, bank fraud, false entry in a bank record, unlawful participation in a loan, and false statement to a financial institution. He is scheduled to be sentenced on Sept. 26, 2013. Each charge carries a maximum penalty of 30 years in prison.
Stephen G. Fields, 49, served as an executive vice president and commercial loan officer until he was terminated in December 2010. Fields was convicted of conspiracy to commit bank fraud, false entry in a bank record, false statement to a financial institution, and misapplication of bank funds. He is scheduled to be sentenced on Sept. 16, 2013. Each charge carries a maximum penalty of 30 years in prison.
Troy Brandon Woodard, 36, the son of CEO Edward Woodard, was employed by a wholly-owned subsidiary of the Bank as a vice president and mortgage loan specialist until he was terminated in January 2011. Brandon Woodard was convicted of conspiracy to commit bank fraud and unlawful participation in a loan. He is scheduled to be sentenced on Sept. 30, 2013. Each charge carries a maximum penalty of 30 years in prison.
Dwight A. Etheridge, 48, a favored borrower, owned and operated a residential and commercial development company, as well as an employment staffing company. Etheridge was convicted of conspiracy to commit bank fraud, misapplication of bank funds, and false statement to a financial institution. He is scheduled to be sentenced on September 18, 2013. Each charge carries a maximum penalty of 30 years in prison.
According to the evidence adduced at trial, in 2006, leaders at the Bank of the Commonwealth began an aggressive expansion to take the Bank beyond its traditional focus area of Norfolk and Virginia Beach to include branches in northeastern North Carolina and the Outer Banks. By December 2009, the Bank’s assets reached approximately $1.3 billion. These assets were built largely through brokered deposits. Brokered deposits are a financial tool that allows investors to pool their money and receive higher rates of return. Because of the high-volatility of these deposits, an institution must remain well-capitalized to accept and renew brokered deposits.
Evidence showed that many of the Bank’s loans were funded and administered without regard to industry standards or the Bank’s own internal controls. By 2008, the volume of the Bank’s troubled loans and foreclosed real estate soared. From 2008 through 2011, Bank insiders – Edward Woodard and Fields – masked the Bank’s true financial condition out of fear that the Bank’s declining health would negatively impact investor and customer confidence and affect the Bank’s ability to accept and renew brokered deposits.
To fraudulently hide the Bank’s troubled assets, these Bank insiders overdrew demand deposit accounts to make loan payments, used funds from related entities – at times without authorization from the borrower – to make loan payments, used change-in-terms agreements to make loans appear current, and extended new loans or additional principal on existing loans to cover payment shortfalls.
In addition, the evidence showed that Bank insiders also provided preferential financing to troubled borrowers to purchase Bank-owned properties. The troubled borrowers were already having difficulty making payments on their existing loans; however, the financing allowed the Bank to convert a non-earning asset into an earning asset, and the troubled borrowers obtained cash at closing to make payments on their other loans at the Bank or for their own personal purposes. The troubled borrowers purchased or attempted to purchase property owned by Bank insiders and Brandon Woodard. These real estate loans were fraudulently funded by the Bank.
The evidence also established that in late 2008, Edward J. Woodard caused the Bank to pay approximately $100,000 in fraudulent invoices purportedly for the Bank’s Suffolk branch when in fact they were for renovations at the personal residence of Troy Brandon Woodard.
In November 2008, the Bank of the Commonwealth submitted to the Federal Reserve, an application requesting approximately $28 million from the Troubled Asset Relief Program (TARP). Based on its regulator's concerns about the health of the Bank, the Federal Reserve later requested that the Bank withdraw its TARP application, which the Bank did.
From 2008 up to its closing in 2011, the Bank lost nearly $115 million. It is estimated that the Bank’s failure cost the federal government, through the deposit insurance fund, approximately $268 million.
Simon Hounslow, 48, served as an executive vice president and chief lending officer until the Bank closed in September 2011. Hounslow was acquitted of all charges.
The investigation was conducted by the FBI’s Norfolk Field Office, IRS-CI, SIGTARP, FDIC-OIG, and FRB-CFPB OIG. Assistant United States Attorneys Melissa E. O’Boyle, Katherine Lee Martin, and Uzo Asonye are prosecuting the case on behalf of the United States.
The investigation has been coordinated by the Virginia Financial and Securities Fraud Task Force, an unprecedented partnership between criminal investigators and civil regulators to investigate and prosecute complex financial fraud cases in the nation and in Virginia. The task force is an investigative arm of the President’s Financial Fraud Enforcement Task Force, an interagency national task force.
President Obama established the Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
A copy of this press release may be found on the website of the United States Attorney's Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.Early Man Pleads Guilty to Meth ConspiracyRead the Press Release
A man who conspired to manufacture and distribute methamphetamine pled guilty May 23, 2013, in federal court in Sioux City.
David Robley, 52, from Early, Iowa, were convicted of conspiring to manufacture and distribute methamphetamine.
At the plea hearing, Robley admitted his involvement in a conspiracy from about 2010 through January 2013 that manufactured and distributed more than 50 grams of actual (pure) methamphetamine. According to pseudoephedrine purchase logs obtained in the investigation, starting in January 2010 through December 2012, Robley acquired at least 102.24 grams of pseudoephedrine for the manufacture of methamphetamine.
Sentencing before United States District Court Judge Mark W. Bennett will be set after a presentence report is prepared. Robley was taken into custody by the United States Marshal after the guilty plea and will remain in custody pending sentencing. Robley faces a mandatory minimum sentence of 10 years’ imprisonment and a possible maximum sentence of life imprisonment, a $10,000,000 fine, a special assessment of $100, and five years up to life of supervised release following any imprisonment.
The case is being prosecuted by Assistant United States Attorney Shawn S. Wehde and was investigated by the Iowa Division of Narcotics Enforcement and the Clay County Sheriff’s Office.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 13-4007.
Eagle Butte Man Indicted for Assault and Failure to Register as A Sex OffenderRead the Press Release
United States Attorney Brendan V. Johnson announced that an Eagle Butte, South Dakota man has been indicted by a federal grand jury for Assault with a Dangerous Weapon, Assault Resulting in Serious Bodily Injury and Failure to Register as a Sex Offender.
Chad Two Hearts, age 19, was indicted by a federal grand jury on May 20, 2013. He appeared before U.S. Magistrate Judge Mark A. Moreno on May 20, 2013 and pled not guilty to the indictments.
The maximum penalty upon conviction of Assault with a Dangerous Weapon and Assault Resulting in Serious Bodily Injury is 10 years in custody, a $250,000, or both; 3 years of supervised release; and a $100 special assessment on each count. Restitution may also be ordered.
The maximum penalty upon conviction of Failure to Register as a Sex Offender is 5 years in custody, a $250,000 fine, or both; at least 5 years of supervised release; and a $100 Special Assessment. Restitution may also be ordered.
The Assault charges relate to an alleged incident in which Two Hearts is accused of assaulting a Swiftbird man in July 2012 with a wooden board or club. The assault resulted in serious injury to the victim. The Failure to Register as a Sex Offender charge relates to Two Hearts’ alleged failure to register and update a registration between April 2008 and April 2012, as required under the Sex Offender Registration and Notification Act after being convicted of a sex offense.
The charges are merely accusations, and Two Hearts is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Federal Bureau of Investigation and the Cheyenne River Sioux Tribe Law Enforcement Division. Assistant U.S. Attorney Mikal Hanson is prosecuting the case.
Two Hearts was remanded to the custody of the U.S. Marshal. A trial date has not been set.
Eagle Butte Man Charged with AssaultRead the Press Release
United States Attorney Brendan V. Johnson announced that an Eagle Butte, South Dakota, man has been indicted by a federal grand jury for Assault Resulting in Serious Bodily Injury.
Stanley Morrison, age 32, was indicted by a federal grand jury on May 15, 2013. He appeared before US Magistrate Judge Mark A. Moreno on May 23, 2013, and pled not guilty to the indictment. The maximum penalty upon conviction is 10 years in custody, a $250,000, or both.
The charge relates to an alleged incident that occurred in January of 2013 in which Morrison is accused of assaulting a Cherry Creek man and that the assault resulted in serious injury to the victim. The charge is merely an accusation, and Morrison is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Cheyenne River Sioux Tribe Law Enforcement Division. Assistant US Attorney Mikal Hanson is prosecuting the case.
Morrison was released on bond pending trial. A trial date has not yet been set.
Dupree Woman Charged with Child Abuse and NeglectRead the Press Release
United States Attorney Brendan V. Johnson announced that a Dupree, South Dakota woman has been indicted by a federal grand jury.
Alisa Knight, age 29, was indicted by a federal grand jury on May 15, 2013 for Child Abuse and Neglect. Knight appeared before U.S. Magistrate Judge Mark A. Moreno on May 22, 2013 and pled not guilty to the Indictment.
The maximum penalty on each count upon conviction is 15 years of imprisonment, a $250,000 fine, or both; 3 years of supervised release and an additional 2 years of supervised release upon revocation. Restitution and a $100 special assessment to the Federal Crime Victims Fund may also be ordered.
The charges are merely accusations, and Knight is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Federal Bureau of Investigation and Assistant U.S. Attorney Troy R. Morley is prosecuting the case.
Knight was remanded to the custody of the U.S. Marshals Service. A trial date has not been set.
Disability Doctor Peter J. Ajemian Sentenced in Manhattan Federal Court to Eight Years in Prison for His Role in LIRR Fraud SchemeRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that PETER J. AJEMIAN, a Board-certified orthopedist, was sentenced today in Manhattan federal court to eight years in prison for his role in the alleged massive fraud scheme in which Long Island Railroad (“LIRR”) workers claimed to be disabled upon early retirement so that they could receive disability benefits to which they were not entitled. Between the late 1990s and 2008, AJEMIAN recommended that at least 734 retiring LIRR employees receive disability benefits, and was responsible for treating nearly half of all LIRR employees who retired and received disability benefits in one four-year period. AJEMIAN pled guilty in January 2013 to one count of conspiracy to commit mail fraud, wire fraud, and health care fraud, and one count of health care fraud before U.S. District Judge Victor Marrero, who also imposed today’s sentence.
Manhattan U.S. Attorney Preet Bharara stated: “Today Dr. Ajemian begins to pay the price for being a key facilitator of a massive disability fraud on the LIRR, that he admitted resulted in losses of millions of dollars. This Office will continue to pursue those who participated in this scheme to abuse LIRR’s disability system and gain benefits to which they were not entitled.”
According to the Complaint, the Superseding Indictments, the Superseding Informations, and statements made in other public filings and in court:
The Railroad Retirement Board (“RRB”) is an independent U.S. agency that administers benefit programs, including disability benefits, for the nation’s railroad workers and their families. A unique LIRR contract allowed employees to retire at the relatively young age of 50 – the age of eligibility has since changed to 55 – if they had been employed by the LIRR for at least 20 years. Eligible employees are entitled to receive an LIRR pension, which is a portion of the full retirement payment for which they are eligible at 65. In addition, at full retirement age (between age 60 and age 65 depending on years of service) they are eligible to receive an RRB retirement pension. For LIRR workers who retired at 50 with only an LIRR pension, they would receive less than their prior salary and substantially lower pension payments than those to which they would be entitled at full retirement age. However, LIRR employees who retired and claimed disability could receive a disability payment from the RRB on top of their LIRR pension, regardless of age. A retiree’s LIRR pension, in combination with RRB disability payments, can be roughly equivalent to the base salary earned during his or her career.
Hundreds of LIRR employees have allegedly exploited the overlap between the LIRR pension and the RRB disability program by pre-planning the date on which they would falsely declare themselves disabled so that it would coincide with their projected retirement date. These false statements, made under penalty of prosecution in disability applications, allowed LIRR employees to retire as early as age 50 with an LIRR pension, supplemented by the fraudulently obtained RRB disability annuity. From 1995 through 2011, more than 75% of LIRR employees stopped working and began receiving RRB disability benefits, whereas during this same period, only 25% of retiring Metro-North employees stopped working and began receiving RRB disability benefits.
AJEMIAN is a Board-certified orthopedist who was instrumental in helping LIRR retirees receive disability benefits to which they were not entitled. Between the late 1990s and 2008, he declared over 94% of the LIRR employees he saw as patients disabled. As part of the massive fraud scheme, AJEMIAN prepared false documentation purporting to show the LIRR employees’ steady decline toward disability exactly at the time they pre-planned their retirement. He then provided to those LIRR employees a narrative for submission to the RRB that claimed they should receive a disability annuity. These medical narratives were completely fabricated or grossly exaggerated so that AJEMIAN could recommend a set of restrictions that, if legitimate, would render it impossible for the LIRR employees to continue performing their jobs. Many of the purportedly “objective” findings from the tests he conducted showed nothing more than normal degenerative changes one would expect to see in patients within the relevant age bracket.
AJEMIAN received approximately $800 to $1,200, often in cash, for these fraudulent assessments and narratives, as well as millions of dollars in health insurance payments for unnecessary medical treatments and fees for preparing fraudulent medical support for the claimed disabilities. Of approximately 453 LIRR annuitants studied, AJEMIAN received approximately $2.5 million in related payments from patients and insurance companies. In turn, those patients have received over $90 million in RRB disability benefit payments. In his plea agreement, Ajemian stipulated that the total intended losses from his fraud were between $100 and $200 million, and that the actual losses suffered by victims to date total $116.5 million.
In addition to his prison term, AJEMIAN, 63, of Oyster Bay Cove, New York was also sentenced to three years of supervised release. He has also agreed to forfeit $116.5 million and pay $116.5 million in restitution, and was ordered to pay a $200 special assessment.
In sentencing AJEMIAN, Judge Marrero said, “Putting all of these circumstances together conveys the gravity of Dr. Ajemian's criminal conduct in its grittiest perspective. Dr. Ajemian corrupted the license publicly granted to him to practice medicine, and betrayed the public trust embodied in that privilege. By his fraudulent actions, he not only distorted his professional duties, but flipped the physician's medical function on its head and made health care a mockery. In the cases encompassed by the charged conspiracy, Dr. Ajemian generally treated not ill employees, but fit ones. He provided physician's services not to restore these patients to good health, or prevent sickness, but to turn able-bodied employees into fully-pensioned annuitants falsely afflicted by certified lifetime disabilities.”
Thirty-two people have been charged in connection with the LIRR disability fraud scheme, 23 of whom have now pled guilty. The charges against the remaining defendants are merely allegations and they are all presumed innocent unless and until proven guilty.
Mr. Bharara praised the RRB-OIG, the FBI, and the MTA-OIG for their outstanding work in the investigation, which he noted is ongoing. He also acknowledged the previous investigation conducted by the New York State Attorney General’s Office into these pension fraud issues.
The Office’s Complex Frauds Unit is handling the case. Assistant U.S. Attorneys Justin Weddle, Daniel Tehrani, and Nicole Friedlander are in charge of the prosecution.
Customer Service Representative Indicted for Conspiracy to Issue Fraudulently Obtained Florida Driver Licenses and Aggravated Identity TheftRead the Press Release
Orlando, Florida - United States Attorney Robert E. O'Neill announces the return of an indictment charging Walter Brown (41, Kissimmee) with one count of conspiracy to knowingly and without lawful authority produce identification documents and nine counts of aggravated identity theft. If convicted, Brown faces up to 15 years in federal prison for the conspiracy charge and two years in federal prison for each count of aggravated identity theft charge.
According to the indictment, Brown was a Customer Service Representative in the Office of the Osceola County Tax Collector. Brown’s primary duty was to issue driver licenses and identification cards. Court documents show that in his capacity as a Customer Service Representative, Brown issued at least 200 Florida driver licenses and identification cards individuals who may not be legally entitled to the documents. In some instances, Brown fraudulently issued driver licenses and identification cards in multiple identities to the same person.
The Osceola County Tax Collector’s Office reported Brown to law enforcement after internal controls revealed suspicious activity involving his issuance of Florida State driver licenses and identification cards. The Tax Collector’s Office cooperated fully in the investigation. Brown was terminated from his employment.
An indictment is merely a formal charge 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 U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, the U.S. Department of State Diplomatic Security Services, and the Florida Highway Patrol’s Bureau of Criminal Investigations and Intelligence. It is being prosecuted by Special Assistant United States Attorney Myrna Amelia Mesa.
Curtiss-Wright Controls Paid $1.35 Million to Resolve Allegations of Overcharging on Government ContractsRead the Press Release
BOSTON - The United States Attorney for the District of Massachusetts announced today that Curtiss-Wright Controls, Inc. (Curtiss-Wright), a defense contracting company based in Littleton, has paid $1.35 million to resolve civil claims related to alleged overcharges on two government contracts to provide parts for the Army’s line of Bradley Fighting Vehicles.
The government alleged that those overcharges violated the Truth in Negotiation Act (TINA). The investigation of the overcharges resulted from Defense Contract Audit Agency audits which indicated that Curtiss-Wright had failed to provide the Army with current, accurate and complete data concerning the parts it was using to fulfill the two Army contracts.
Pursuant to a settlement agreement, Curtiss-Wright paid $1.35 million to resolve the government’s civil allegations and has also implemented new procedures to help ensure timely and complete disclosure of cost and pricing information, so as to prevent similar TINA violations in the future. Curtiss-Wright has not admitted liability or wrongdoing in connection with the settlement.
“This office will continue to do everything in its power to ensure that companies who are paid under federal contract play by the rules and provide the pricing data that the law requires. Taxpayers are entitled to know that their money is being spent for legitimate governmental purposes,” said U.S. Attorney Carmen M. Ortiz.
U.S. Attorney Ortiz and Michael D. Conner, Special Agent in Charge of the U.S. Army Criminal Investigation Command, Boston Fraud Branch Office, made the announcement today. The investigation and settlement were handled by Assistant U.S. Attorneys Sonya Rao, Jennifer Cardello, and Patrick Callahan.Canton Man with Murder Conviction Faces Federal Charges for Having Six FirearmsRead the Press Release
A Canton man with a prior murder conviction was faces federal firearms charges after authorities found him with six firearms, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
Torrey T. Gross, age 39,was indicted on one count of being a felon in possession of a firearm.
"It is profoundly troubling that a man with this criminal backgroud was able to get his hands on these fireams," Dettelbach said. "We will continue to use all the tools at our disposal to keep firearms from those who are forbidden from possessing them."
Gross was arrested on April 17, 2013, by Metro Narcotics, FBI Safe Streets Task Force and the Canton Police Department SWAT team during an execution of a Stark County Common Pleas Court Search Warrant. The search warrant yielded an S.K.S. semiautomtic rifle, a Ruger SR40C pistol, a Smith & Wesson Bodyguard 380 pistol, a Glock 17 pistol, a Glock 21, .45-caliber pistol, a Smith & Wesson, model 22A-1 .22-caliber pistol and various ammunition, according to the indictment.
Gross is forbidden from possessing firearms or ammunition because of a 1997 conviction for muder in Oakland County, Michigan, according to the indictment.
If convicted, Gross’ sentence will be determined by the Court after review of factors unique to this case, including his prior criminal record, if any, his role in the offenses and the unique characteristics of the violations. In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
The case is being prosecuted by Assistant U.S. Attorney Teresa Dirksen.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government's burden to prove guilt beyond a reasonable doubt.
Cambria County Man Indicted on Firearms ViolationsRead the Press Release
Prosecution is part of Project Safe Neighborhoods Initiative
JOHNSTOWN, Pa. - On May 23, 2013, a resident of Johnstown, Pa., was indicted by a federal grand jury in Pittsburgh on a charge of violating federal firearms laws, United States Attorney David J. Hickton announced today.
The one-count indictment named Montez Ricardo Holland, 51.
According to the indictment presented to the court, on Jan. 4, 2013, Holland possessed a Sturm, Ruger & Company, Model P95DC, 9 mm semi-automatic pistol. On Apr. 27, 1998 , Holland was convicted in Lycoming County, Pa., of a drug trafficking crime, which is a crime punishable by imprisonment for a term exceeding one year. Federal law prohibits persons who have been convicted of a crime punishable by a term of imprisonment exceeding one year from possessing firearms or ammunition.
The law provides for a maximum total sentence of 10 years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history of the defendant.
Assistant U.S. Attorney Stephanie L. Haines is prosecuting this case on behalf of the government.
The Laurel Highlands Resident Agency of the Federal Bureau of Investigation and the Cambria County Drug Task Force conducted the investigation leading to the indictment in this case.
According to Mr. Hickton, Holland is being prosecuted as part of Project Safe Neighborhoods, a collaborative effort by federal, state and local law enforcement agencies, prosecutors and communities to prevent, deter and prosecute gun crime.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Calvert County Man Pleads Guilty to Transporting Child PornographyRead the Press Release
Greenbelt, Maryland – David Dobbs, age 55, of Port Republic, Maryland, pleaded guilty today to transporting child pornography.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; and Colonel Marcus L. Brown, Superintendent of the Maryland State Police.
According to the plea agreement, on two occasions in 2010, Dobbs used a file sharing program to make his files of child pornography available to undercover law enforcement officers, who downloaded a total of 16 videos and five images of children engaged in sexually explicit conduct. On September 13, 2010, in addition to providing the officer access to the file sharing program, Dobbs engaged in a chat with the undercover officer, telling the officer that he liked “girls around seven years old and up.”
On April 13, 2012, Dobbs was interviewed in connection with another investigation and admitted to using a file sharing program and that he used a particular screen name when he chatted with the undercover officer. A search warrant was executed at Dobb’s residence and law enforcement seized a laptop computer and an SD card that was damaged and appeared to have been pierced with a blunt instrument. Child pornography was recovered from the computer and the SD card, including images of prepubescent children engaging in sexually explicit conduct.
As part of his plea agreement, Dobbs must register as a sex offender in the place where he resides, where he is an employee, and where he is a student, under the Sex Offender Registration and Notification Act (SORNA).
Dobbs faces a minimum mandatory sentence of five years in prison and a maximum of 20 years in prison. As part of his plea agreement, Dobbs and the government will recommend to the Court that a sentence of 90 months in prison, followed by a period of supervised release, is the appropriate disposition of the case. U.S. District Judge Peter J. Messitte has scheduled sentencing for July 25, 2013 at 9:30 a.m.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the "resources" tab on the left of the page.
United States Attorney Rod J. Rosenstein commended the FBI and Maryland State Police for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Kristi N. O’Malley, who prosecuted the case.
Black Hawk Man Pleads Guilty to Embezzlement from the South Dakota Army National GuardRead the Press Release
United States Attorney Brendan V. Johnson announced that Dennis Mallow, age 47, of Black Hawk, South Dakota appeared before U.S. Magistrate Judge Veronica L. Duffy on May 14, 2013 and pled guilty to Theft of Government Property. The maximum penalty upon conviction is 10 years of imprisonment and a $250,000 fine.
The charge relates to Mallow embezzling toolboxes, tools, equipment, gear, and other property, having a value in excess of $30,000, from the South Dakota Army National Guard between October 1, 2009 and September 7, 2012.
The investigation was conducted by the Federal Bureau of Investigation and the South Dakota Army National Guard. The case is being prosecuted by Assistant U.S. Attorney Wayne Venhuizen.
A presentence investigation was ordered and a sentencing date will be set. The defendant was released on bond pending sentencing.
Arrests Made in Conjunction with Benchmark InvestigationRead the Press Release
KNOXVILLE, Tenn. - On Thursday, May 23, 2013, four individuals were taken into custody by federal agents in conjunction with an investigation involving Benchmark Capital, Inc. Brian Murphy, Paulynn Wright, and Dona Rector were arrested Thursday morning by federal agents. Tiffiny Thompson voluntarily surrendered to authorities after being informed that charges has been filed against her. Murphy and Thompson pleaded not guilty during their arraignment before U.S. Magistrate Judge H. Bruce Guyton. The arraignment of Wright and Rector has been scheduled for May 24, 2013 at 10:00 am. All four were released pending trial, which will be scheduled at a status conference on June 4, 2013.
Charges against these four individuals are contained in a superseding indictment returned by a federal grand jury on May 21, 2013. Murphy, Thompson and Wright are charged with conspiracy to commit mail and wire fraud and money laundering. Rector is charged with conspiracy to commit wire fraud. The superseding indictment also contains additional charges against Joyce Allen and Kay Thomas, who were initially indicted in July 2012.
The money laundering conspiracy charge carries a maximum sentence of 20 years in prison. The maximum sentence for the fraud conspiracy charge is 30 years in prison.
The indictment alleges that Benchmark Capital, Inc. was engaged in an elaborate scheme that lured investors, many of whom were elderly, into investing their retirement savings and the equity in their homes in phony annuity investments. According to the indictment, more than $42.6 million was invested in the Benchmark scheme, resulting in a net loss of more than $18 million to investors. The scheme unraveled early last year, following the suicide of Charles Candler in March 2012.
This indictment is the result of an investigation by the Internal Revenue Service, U.S. Postal Inspection Service, and Federal Bureau of Investigation. Assistant U. S. Attorney Frank M. Dale, Jr. is representing 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
Ames Man Pleads Guilty to Conspiracy to Distribute HeroinRead the Press Release
DES MOINES, IOWA B On May 23, 2013, Jared Michael Bielenberg, age 23, of Ames, Iowa, pled guilty before United States District Court Judge Stephanie M. Rose to one count of conspiracy to distribute heroin announced United States Attorney Nicholas A. Klinefeldt. According to a written plea agreement, from around January 2010 through July 2011, Bienberg participated in the distribution of at least sixty (60) grams of heroin in and around the Ames area.
Under the plea agreement, Bielenberg faces a sentence of five (5) years’ imprisonment. Judge Rose scheduled sentencing for August 30, 2013, at the U.S. Courthouse in Des Moines, IA.
The investigation was conducted by the Mid-Iowa Drug Task Force, the Ames, Iowa, Police Department, the Story County Sheriff’s Office and the Drug Enforcement Administration, and the case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa. #
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42 Individuals Indicted and Arrested for Bank FraudRead the Press Release
The intended loss amounts to approximately $1,205,834.15
SAN JUAN, P.R. –On May 22, 2013, a federal grand jury indicted 42 individuals as a result of an investigation led by the Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HIS), United States Postal Inspection Service (USPIS), the Puerto Rico Police Department (PRPD) and the Puerto Rico Treasury Department, announced today Rosa Emilia Rodríguez-Vélez, United States Attorney for the District of Puerto Rico. The defendants are charged with conspiracy to commit bank fraud, bank fraud, aggravated identity theft and one count of a forfeiture allegation of $580,089.51.
From in or about May 2010 through September 2011, the defendants herein, and others known and unknown to the Grand Jury, did knowingly and willfully conspire and agree with each other to commit an offense against the United States, that is, devising a scheme and artifice to defraud Banco Popular de Puerto Rico (BPPR), Banco Santander de Puerto Rico (BSPR), First Bank, Scotiabank, Banco Bilbao Vizcaya Argentaria (BBVA) and Doral Bank; financial institutions whose deposits were insured by the Federal Deposit Insurance Corporation [FDIC], and to obtain moneys, funds, credits, assets, securities and other property owned by, or under the custody or control of said financial institution, all by means of false and fraudulent pretenses, representations, and promises relating to a material fact.
The USPIS and ICE-HSI conducted a Bank Fraud investigation involving approximately 42 individuals from the Humacao, Puerto Rico area. Since 2010, the organization headed by an individual named Kelvin García-Oquendo engaged in bank fraud, causing losses to several financial institutions in approximately $580,089.51. The intended loss amounts to approximately $1,205,834.15.
According to the indictment, the organization had individuals performing different roles in furtherance of the conspiracy, such as: 1) leaders and organizers; 2) recruiters; 3) facilitators who would either open bank accounts or lend existing bank accounts for the deposit of false and fraudulent checks; 4) purchasers who would use ATM cards of the facilitators to purchase Money Gram Money Orders and Postal Money Orders with the proceeds of the bank fraud scheme; and 5) cashers who would go to different post offices to cash the money orders purchased by others.
Throughout the course of the conspiracy, Kelvin García-Oquendo, Luis Luzunariz-Cruz, and Ramón López-García acted as leaders for the criminal organization. The leaders would create the false and fraudulent checks, determine the amounts to be deposited, and the funds to be withdrawn from the bank accounts in which the false checks had been deposited. Often times, said defendants did other roles, such as recruiting individuals, purchasing and cashing money orders.
At different times in the conspiracy, García-Oquendo, Luzunariz-Cruz, López-García, Georgie García-Oquendo, Joel Bezares-Cruz, Oscar Díaz-Maldonado, David Mestre-Cuadrado, Ernesto J. Bravo-Rivera, Jonathan Sierra-Cotto, Ángel L. Crespo, Carlos Delgado-Gómez, Alvin Rivera, Ruperto Rijos-Pérez, José Sànchez-Díaz, María Del Carmen García acted as recruiters of facilitators, purchasers and cashers for the conspiracy.Codefendants López-García, Alejandro Rodríguez-Arce, Bezares-Cruz, Díaz-Maldonado, Ernesto J. Bravo-Rivera, Crespo, Delgado-Gómez, Rijos-Pérez, Marie Grillasca-Batistini, Edwin Murillo-Rivera, Mayleen Oquendo-García, Yinairy Medina-Castro, Sonia Rivera-Velàzquez, Idalia Santana-Alamo, Gabriel Ramos-Ríos, Héctor Barbosa-Vellón, Jorge M. Agosto, Misha Rodríguez-Lazu, Héctor E. Rivera-Ortiz, Félix Delgado-Vàzquez, Brenda I. Ortiz-Echevarría, Ángel L. Serrano-Valentin, Edgardo Santana-Castro, Ramón Santiago-Matos, William Agosto Díaz, Melitza Naveira-Sanabria, García, Alfonso Capestany, Kenny Quiñones-Vàzquez, Luis Ramos-Pacheco,acted as facilitators for the conspiracy. Their tasks were: (1) open bank accounts and/or lend existing bank accounts for the deposit of false and fraudulent checks, (2) provide account information used to create the false and fraudulent checks, and (3) lend their ATM cards to others for the purchase of money orders with the proceeds of the bank fraud scheme.
Other codefendants known and unknown to the Grand Jury acted as purchasers by using their own and/or borrowed ATM cards to purchase money orders at Money Gram centers and US Postal Service stations with the illegal proceeds of the bank fraud scheme. The cashers for the conspiracy converted to cash Money Gram and Postal money orders that had been purchased with the illegal proceeds of the bank fraud scheme.
The seven defendants that are facing eight counts of aggravated identity theft are: Kelvin García-Oquendo, Luzunaris-Cruz, Sànchez-Díaz, Georgie García-Oquendo, Raul Marte-Colón, López-García and Delgado-Gómez. These defendants, aiding and abetting each other, knowingly transfer, possess and use the name, bank account number and information, as well as the automatic teller machine (ATM) personal identification number (PIN) belonging to another person for purposes of retrieving from said bank accounts funds which were the proceeds of the bank fraud scheme.
“The egregious behavior of those who would exploit our banking system for personal and criminal gain will not be tolerated. We remain committed to investigating and apprehending those who cheat the system,” said US Attorney Rosa Emilia Rodríguez-Vélez. “We are committed to ensuring the integrity of the banking system and to prosecuting those who would undermine it for their personal gain.”
“These arrests are a reflection of the success that comes when federal, state and local law enforcement agencies work together to target criminal organizations and individuals in Puerto Rico,” said Ángel Meléndez, special agent in charge of HSI San Juan. “At HSI, we follow the money trail to identify, disrupt and dismantle the most complicated financial schemes and seize criminal assets. We will continue to aggressively investigate fraudulent financial schemes that put in jeopardy the integrity of our financial system and are often a gateway to further criminal activity.”
“United States Postal Inspectors will continue to aggressively investigate criminals who use the USPS and its products for illegal gain. We are committed to working with our law enforcement partners to investigate and bring to justice those who commit these types of offense.” Maria Kelokates, Inspector in Charge Newark Division, San Juan Field Office.The case is being prosecuted by Assistant United States Attorney Héctor Ramírez-Carbó. Defendants are facing a maximum term of imprisonment of 30 years and fines not to exceed $1,000,000.00. Those defendants charged with aggravated identity theft are facing a mandatory minimum sentence of two years of incarceration consecutive to whatever sentence it’s imposed for the bank fraud charges.
Criminal indictments are only charges and not evidence of guilt. A defendant is presumed to be innocent until and unless proven guilty.
Thursday 23 May 2013
Youngstown Man Charged with Threatening the President and First LadyRead the Press Release
A federal grand jury returned a two-count indictment charging a Youngstown man with making threats against the President and First Lady of the United States, Steven M. Dettelbach, United States Attorney for the Northern District of Ohio,.
Frederick Watt, age 33 is accused of making the threats by telephone to Trumbull County 911 operators in Warren, Ohio on March 24, 2013.
If convicted, Watts’ sentence will be determined by the Court after review of factors unique to this case, including his prior criminal record, if any, his role in the offenses and the unique characteristics of the violations. In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
The case is being prosecuted by Assistant U.S. Attorney Nancy Kelley following an investigation by the United States Secret Service.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government's burden to prove guilt beyond a reasonable doubt.
Wheat Ridge Doctor Pleads Guilty for the Illegal Distribution of Oxycodone and Knowingly Engaging in A Monetary Transaction Using Property Derived from Proceeds of Unlawful ActivityRead the Press Release
DENVER – Dr. Kevin R. Clemmer, age 59, of Evergreen, Colorado, pled guilty today before U.S. District Court Judge Robert E. Blackburn to illegally distributing Oxycodone, a Scheduled II Controlled Substance, and engaging in a monetary transaction in property criminally derived from proceeds of a specified unlawful activity, U.S. Attorney John Walsh, DEA Rocky Mountain Division Special Agent in Charge Barbra Roach and IRS Criminal Investigation Special Agent in Charge Stephen Boyd announced today. Clemmer appeared at the hearing free on bond. Judge Blackburn is scheduled to sentence Clemmer on September 19, 2013 at 10:00 a.m. Clemmer and several co-defendants were indicted on May 16, 2011.
Co-defendant Tina Sheldon, one of Clemmer’s staff assistants, received a sentence of time served and 3 years of supervised release. Defendant Noah Ziegler, who assisted in distributing the Oxycodone, received a sentence of 3 years’ probation. The remaining defendant, Angela Lee, who also helped distribute the Oxycodone, received a sentence of time served and 3 years of supervised release.
According to court records, including the stipulated facts contained in the plea agreement, the underlying investigation in this case began on April 1, 2009, and went through September 17, 2010. Clemmer knowingly and intentionally distributed and dispensed oxycodone, a scheduled II controlled substance, outside the scope of professional practice and not for legitimate medical purposes. During the course of the investigation the defendant did distribute by prescription oxycodone to an undercover officer as well as two co-defendants.
On September 2, 2010, the defendant did prescribe oxycodone to one individual. On September 3, 2010, that individual died. The cause of death is listed as an accidental aspiration of gastric contents associated with oxycodone toxicity. The prescription written by the defendant (with numerous pills missing) was found at the scene of the death, as well as other oxycodone pills which were not prescribed by the defendant. The defendant’s prescription helped contribute to the death of this individual. The death, however, was not a charged offense as part of this investigation or indictment.
On May 20, 2010, the defendant met with an undercover officer. The undercover officer described minimal pain management needs and symptoms which did not require, as part of the scope of professional practice, the prescription of oxycodone. However, the defendant did prescribe 120 pills of 15 milligram oxycodone to the undercover officer after a very limited medical screen and evaluation.
On May 29, 2010, the defendant did purchase a 1999 Lincoln Continental, using cash which was derived from the illegal distribution of a schedule II controlled substance. The monetary transaction, which did affect interstate commerce, was for a value greater than $10,000.
As part of the plea agreement, the defendant agreed not to contest the seizure of a building, currency, funds from bank accounts, two vehicles and gold and silver coins, totaling over $300,000 in ill-gotten proceeds from Clemmer’s criminal scheme.
“Regrettably, unscrupulous doctors in our community are prescribing powerful pain medications not for medical purposes, but for their own personal financial gain, heedless of the addiction and personal ruin they are inflicting on their patients,” said U.S. Attorney John Walsh. “When doctors overprescribe these drugs, they place the public in danger. All too often, accidental overdose deaths are the result, as in this tragic case.”
“The diversion of pharmaceutical drugs has become an epidemic in America,” said DEA Special Agent in Charge Barbra Roach. “The conviction of Dr. Clemmer serves notice to other medical professionals that, regardless of one’s professional status, the illegal distribution of prescription drugs makes one a drug trafficker subject to DEA investigation and federal prosecution.”
“IRS – Criminal Investigation (IRS-CI) is committed to fighting to stop doctors from over prescribing prescription drugs in conjunction with our law enforcement partners,” said Stephen Boyd, Special Agent in Charge of IRS – Criminal Investigation, Denver Field Office. “IRS-CI has the financial investigators and expertise to disrupt these doctors and their organizations to deprive them of their illicit gains.”
As a result of the plea to knowingly and intentionally distributed, dispensed, and possessed with intent to distribute Oxycodone, a Schedule II controlled substance, Clemmer faces not more than 20 years in federal prison, and up to a $1,000,000 fine. As a result of the plea of engaging in monetary transaction affecting interstate commerce, Clemmer faces not more than 10 years in prison, and a fine of up to $1,000,000.
This case was investigated by the Drug Enforcement Administration (DEA) Tactical Diversion Squad and the Internal Revenue Service (IRS) Criminal Investigation, Denver Field Office.
The defendants are being prosecuted by Assistant U.S. Attorney Zachary Phillips with assistance from Assistant U.S. Attorneys Jim Russell and Tonya Andrews with the Asset Forfeiture Unit.
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Wheat Ridge Doctor and Others Indicted for Conspiracy and Illegal Distribution of Prescription MedicationRead the Press Release
“Today the U.S. Attorney’s Office took action against two doctors responsible for illegally prescribing powerful pain killers for non-medical purposes. Overdose deaths were involved in both cases. The first doctor, Kevin Clemmer, pled guilty to illegally distributing Oxycodone and money laundering. A second doctor, Joseph Ferrara, was indicted and arrested on Conspiracy and illegally distributing prescription medication. These actions are part of an ongoing U.S. Attorney and federal law enforcement emphasis on combating “pill mills” throughout the state of Colorado, in conjunction with the Colorado Attorney General’s Office and state and local law enforcement.”
John Walsh, U.S. Attorney, District of Colorado
WHEAT RIDGE DOCTOR AND OTHERS INDICTED FOR CONSPIRACY AND ILLEGAL DISTRIBUTION OF PRESCRIPTION MEDICATION
Dr. Ferrara faces Bankruptcy Fraud charges and he and his co-defendants also charged with Money Laundering
DENVER – Dr. Joseph Ferrara and five others were indicted by a federal grand jury in Denver this week on charges related to the illegal distribution of prescription medication and money laundering, U.S. Attorney John Walsh, DEA Special Agent in Charge Barbra Roach and IRS Criminal Investigation Special Agent in Charge Stephen Boyd announced. Ferrara had a medical practice in Wheat Ridge and in Dillon. At least one patient who received drugs from Ferrara died as a result. Ferrara and Keith Schwartz were arrested this morning in Summit County. Karyne Smith, Karen Plaia and Melissa Toothman were arrested in Metro Denver. All of these defendants made initial appearances in U.S. District Court in Denver this afternoon, where they were advised of the charged pending against them as well as their rights. Lauren Schwartz is out of state, and is in the process of arranging her surrender.
According to the indictment, beginning on May of 2011, and continuing until February of 2013, defendants Dr. Joseph Ferrara, of Dillon, Colorado, in conjunction with co-conspirators Keith Schwartz, Lauren Schwartz, Karen Plaia, Karyn Smith, Melissa Toothman and others known and unknown to the Grand Jury, knowingly conspired and agreed to work interdependently to dispense and distribute, or facilitate the dispensing and distribution of controlled substances to patients at times and in circumstances outside the usual course of professional medical practice, and for a purpose other than legitimate medical purpose, with death resulting from the use of the controlled substances.
During the course of the scheme, Dr. Ferrara allegedly prescribed drugs such as: oxycodone, morphine, methadone, oxymorphone, hydromorphone, hydrocodone, amphetamines, carisoprodol, alprazolam, clonazepam, lorazepam, triazolam, and zolpidem tartrate to patients without determining a sufficient medical necessity for the prescription of these controlled substances. In concert with his co-conspirators, the doctor dispensed and distributed these drugs to patients in quantities and dosages that would allow patients to abuse, misuse, and become addicted to them, while failing to adequately address the misuse and abuse of the prescribed controlled substances by patients.
Dr. Ferrara and his co-conspirators, worked interdependently to obtain payment for services rendered outside the course of usual professional practice by taking cash, checks, and credit cards from those he distributed to. Insurance was not accepted. The dispensing and distribution of controlled substances to patients were in such high quantities, in such combinations, and at such levels that retail pharmaceutical outlets called the Drug Enforcement Administration to report suspicious prescribing practices.
Further, the indictment alleges that the defendants and co-conspirators did knowingly conduct and conceal the true nature of their financial transactions, concealing proceeds to facilitate, promote and expand the drug distribution operation for financial gain, using the concealed proceeds from the unlawful sale and distribution of the narcotics and related activities to acquire personal assets. In one instance Dr. Ferrara engaged in a cash purchase of a 2010 Honda Crosstour.
Beginning on December 13, 2010, and continuing through March 26,2012, Ferrara devised, intended to devise, and participated in a scheme to defraud the Bankruptcy Court, and his creditors in relation to a bankruptcy proceeding by taking a variety of steps to conceal his ownership and control of substantial assets from the Bankruptcy Court, the Chapter 7 trustee, and his creditors.
The indictment includes an asset forfeiture allegation, which states: As a result of the foregoing offenses, the defendants shall forfeit to the United States any and all property, real or personal, constituting or derived from any proceeds obtained directly or indirectly as a result of the violations and any and all property used or intended to be used in an y manner or part to commit and to facilitate the commission of the criminal violations, including but not limited to a money judgment in the amount of proceeds obtained as a result of the foregoing offenses, for which the defendants are joint and severally liable.
Ferrara is charged with one count Conspiracy to distribute and dispense controlled substances resulting in the death of an individual (punishable by not less than 20 years to life); six counts of Distribution and Dispensing of a controlled Substance and Aiding and Abetting the same (punishable up to 20 years per count); one count Distribution and Dispensing of a Controlled Substance and Aiding and Abetting the same resulting in the death of an individual (punishable by not less than 20 years to life); four counts Use of a Telephone to Facilitate Drug Crime (punishable up to 4 years per count); two counts of Conspiracy to Commit Money Laundering (punishable up to 20 years per count); twenty seven counts of Money Laundering (punishable up to 20 years per count); and four counts of Bankruptcy Fraud (punishable up to 5 years per count). Ferrara’s co-defendants face a variety of the charges listed above.
“The illegal distribution of prescription narcotics is becoming an epidemic,” said U.S. Attorney John Walsh. “Doctors who are improperly prescribing medication outside the scope of their practice for profit should be put on notice that they will face criminal penalties.”
“Prescription drug misuse and abuse is a rapidly growing problem leading to addiction, suffering, and even death for many people,” said DEA Special Agent in Charge Barbra Roach. “While the vast majority of doctors offer healing and compassionate care to their patients, there remain some who violate their oath and the law. DEA and our law enforcement partners will continue to identify, investigate, and prosecute doctors and other medical professionals who abuse their trust and power by engaging in criminal drug trafficking of prescription drugs.”
“Prescription drug abuse is a serious problem and IRS Criminal Investigation is committed to investigate along with our law enforcement partners those individuals that are responsible for the illegal distribution of prescription medicines and deprive them of their ill-gotten gains,” said Stephen Boyd, Special Agent in Charge of IRS Criminal Investigation, Denver Field Office.
This case was investigated by the Drug Enforcement Administration and the IRS Criminal Investigations.
The defendants are being prosecuted by Assistant U.S. Attorney M.J. Menendez and Special Assistant U.S. Attorney Alison Goldenberg.
The charges contained in the indictment are allegations, and the defendants are presumed innocent unless and until proven guilty.
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Waylon Ronald Burns Sentenced in U.S. District CourtRead the Press Release
The United States Attorney's Office announced that during a federal court session in Billings, on May 23, 2013, before U.S. District Judge Donald W. Molloy, WAYLON RONALD BURNS, a 35-year-old resident of Lame Deer and an enrolled member of the Northern Cheyenne Tribe, was sentenced to a term of:
Prison: 188 months
Special Assessment: $100
Supervised Release: 20 years
BURNS was sentenced in connection with his guilty plea to attempted aggravated sexual abuse.
In an Offer of Proof filed by Assistant U.S. Attorney Lori Harper Suek, the government stated it would have proved at trial the following:
On August 4, 2012, the victim and some friends were drinking and driving around Lame Deer. At some point, BURNS joined them. BURNS started acting weird and aggressive and everyone but the victim got out of the car. The victim and BURNS eventually drove to the rodeo grounds. BURNS physically assaulted the victim and then raped her.
When interviewed, BURNS admitted that he had sex with the victim, but claimed it was consensual.
Because there is no parole in the federal system, the "truth in sentencing" guidelines mandate that BURNS will likely serve all of the time imposed by the court. In the federal system, BURNS does have the opportunity to earn a sentence reduction for "good behavior." However, this reduction will not exceed 15% of the overall sentence.
The investigation was conducted by the Bureau of Indian Affairs.
Warrensburg Man Indicted for Child PornRead the Press Release
Project Safe Childhood
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a Warrensburg, Mo., man has been indicted by a federal grand jury for attempting to distribute child pornography over the Internet.
Jonathan R. Gilbert, 24, of Warrensburg, was charged in a three-count indictment returned by a federal grand jury in Kansas City, Mo., on Tuesday, May 21, 2013.
The federal indictment alleges that Gilbert attempted to distribute child pornography over the Internet on Sept. 14, 2011. Gilbert is also charged with receiving child pornography over the Internet on Oct. 9, 2011 and with possessing child pornography on Oct. 20, 2011.
Dickinson cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Joseph M. Marquez. It was investigated by the FBI Cyber Crimes Task Force.
Project Safe Childhood
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc . For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."Wamblee Tonka Rowland Sentenced in U.S. District CourtRead the Press Release
The United States Attorney's Office announced that during a federal court session in Billings, on May 23, 2013, before U.S. District Judge Donald W. Molloy, WAMBLEE TONKA ROWLAND, a 34-year-old resident of Lame Deer and an enrolled member of the Northern Cheyenne Tribe, was sentenced to a term of:
Prison: 24 months
Special Assessment: $100
Supervised Release: 3 years
ROWLAND was sentenced in connection with his guilty plea to assault with a dangerous weapon.
In an Offer of Proof filed by Assistant U.S. Attorney Lori Harper Suek, the government stated it would have proved at trial the following:
On July 16, 2012, the victim was at her home in Lame Deer, which is within the boundaries of the Northern Cheyenne Indian Reservation. ROWLAND and the victim got into a verbal argument that escalated to the point where ROWLAND threw rocks at her. ROWLAND threatened to kill the victim and told her that he was going to get his gun. ROWLAND then walked to his house, in the same neighborhood, and retrieved a shot gun. He loaded the gun with shells, walked toward the victim, and confronted her with the gun. He cocked the gun and pointed it at her. The victim retreated into her residence but, once inside, remembered that her children were outside and went back out to retrieve her kids. The victim was afraid that ROWLAND would shoot her in front of her kids.
ROWLAND's common law wife was outside of ROWLAND's house and witnessed the altercation with the victim. She tried to calm ROWLAND down, but ROWLAND's response was to point the gun at her. When interviewed, though, ROWLAND's common-law wife said that she was not afraid because the gun was not operational and she believed that she could calm ROWLAND down.
The police were called by neighbors who also witnessed the altercation. ROWLAND retreated into his house, hid the shotgun, and then hid under a table. He was arrested while trying to hide. He had shells in his pocket. The shot gun was seized.
Law enforcement test fired the shotgun and confirmed that it is operational.
Because there is no parole in the federal system, the "truth in sentencing" guidelines mandate that ROWLAND will likely serve all of the time imposed by the court. In the federal system, ROWLAND does have the opportunity to earn a sentence reduction for "good behavior." However, this reduction will not exceed 15% of the overall sentence.
The investigation was a cooperative effort between the Federal Bureau of Investigation and the Bureau of Indian Affairs.
Two Convicted by New Jersey Federal Jury for Scheme to Rob Drug Dealers and Sell Their CocaineRead the Press Release
CAMDEN, N.J. – Two men who plotted to rob a drug stash house in order to sell the stolen cocaine were convicted today by a federal jury in New Jersey of crimes related to the scheme, U.S. Attorney Paul J. Fishman announced.
Ralph Dennis, 35, and Terrance Hardee, a/k/a “Fat Cat,” 36, both of Philadelphia, were each convicted of one count of conspiracy to commit robbery and one count of conspiracy to possess more than 5 kilograms of cocaine with intent to distribute. Dennis was also found guilty of using and carrying a firearm during a crime of violence. The jury returned the verdict on the second day of deliberations following an approximately three-week trial before U.S. District Judge Joseph E. Irenas in Camden federal court.
According to the evidence at trial:
In June and July of 2012, Dennis and Hardee engaged in the planning of a gunpoint drug stash house robbery. They prepared to steal multiple kilograms of cocaine from the drug dealers at the location, then sell it themselves to make a profit.
During the investigation, Dennis was recorded discussing his willingness to kill anyone they found inside the house as they were robbing it. Hardee was recorded talking about his role – tying the house’s occupants up with zip ties.
Special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) arrested the pair when they showed up in Maple Shade, N.J., on July 16, 2012, to head to the robbery location, Dennis carrying a gun. Dennis and Hardee also brought gloves, and zip ties were found in the car they drove to Maple Shade.
At sentencing, the defendants face a maximum potential penalty of 20 years in prison on the robbery conspiracy charge and a mandatory minimum penalty of 10 years and a maximum of life in prison on the cocaine distribution charge. Additionally, Dennis faces a mandatory minimum of five years in prison – consecutive to the sentence imposed for the robbery conspiracy – and a maximum of life in prison for the gun offense. Each count also carries a maximum $250,000 fine. A sentencing date has not yet been set.
U.S. Attorney Fishman credited ATF special agents in Cherry Hill, N.J., under the direction of Special Agent in Charge Thomas J. Cannon, with the investigation leading to today’s convictions.
The government is represented by Assistant U.S. Attorneys Jacqueline M. Carle and Matthew T. Smith of the U.S. Attorney’s Office Criminal Division in Camden.
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Defense counsel:Ralph Dennis: Assistant Federal Public Defenders Thomas Young & Christopher O’Malley Esqs., Camden
Terrance Hardee: David Rudenstein, Esq., PhiladelphiaTwenty-One People Arrested in Huntsville-based Drug-Trafficking ConspiracyRead the Press Release
NOTE: Release has been updated since press conference. There is also one correction included – Christopher David "Chris Wheeler" Sanders is from Decatur and Christopher Ike "Coota" Okafor is from Huntsville. Please note the motion to dismiss that is attached. Defendant Trevor Marchel Young is to be dismissed from the indictment. Please see links:
Cortez Carr et al Indictment
Motion to Dismiss Young - FiledHUNTSVILLE – Federal agents and members of a Madison and Morgan County drug task force today arrested 21 people charged as members of a drug-trafficking conspiracy operating out of Huntsville since at least 2010, announced U.S. Attorney Joyce White Vance, FBI Special Agent in Charge Richard D. Schwein Jr. and Madison-Morgan County High Intensity Drug-Trafficking Area Task Force Commander, Sgt. Dewayne McCarver.
The defendants are part of overlapping drug rings, one distributing powder and crack cocaine and the other, marijuana, in Madison County, according to a 34-count indictment unsealed following today's arrests. Twenty of the defendants were arrested in North Alabama and one defendant turned himself in in Atlanta. Authorities continue to pursue a 22nd defendant, known as "Renay."
Brothers CORTEZ DEAUNDRA "Tez" CARR, 33, and TYRIS TERVILLE "Black" CARR, 38, both of Huntsville, are charged in the cocaine and the marijuana conspiracies. The multi-agency investigation, begun early in 2010, identifies Cortez Carr as the leader of the illegal drug distribution rings.
"This investigation has successfully taken down a major cocaine- and marijuana-trafficking organization operating in Northern Alabama," Vance said. "This is a sterling example of how federal, state and local law enforcement, working together, are able to successfully dismantle narcotics smuggling organizations and reduce the availability of illegal drugs on the streets," Vance said.
"Today's arrests dismantle a narcotics operation that spread from Atlanta to Birmingham, as well as from Huntsville and Decatur to Gadsden," Schwein said. "This type of investigation and enforcement activity between the agencies involved shows when numerous agencies work together, as they did in this case, it has a significant impact and can help to restore an entire neighborhood. The law abiding citizens who live in the areas targeted in this morning's investigations have their neighborhood back."
"This is a perfect example of the impact that can be made when agencies work together," McCarver said. "This case will have a lasting positive impact on the cities of Huntsville, Madison and Decatur, by removing a major drug-trafficking operation from this area. I am proud to have worked with all of the agencies involved."
Cortez Carr is charged, individually, with separate counts of possessing with intent to distribute powder cocaine and crack cocaine, and with possessing a firearm – a Bryco Arms 9mm pistol and a FEG .45-caliber pistol – in furtherance of a drug-trafficking crime, all on March 15, 2010. Cortez Carr also is charged, individually, with six counts of distributing more than 28 grams of crack cocaine and one count of distributing more than 280 grams of crack on various dates between August 2012 and December 2012.
Cortez Carr is charged, along with his brother, Tyris Carr, and their cousin, LACARL CARR, 37, of Huntsville, with possessing with intent to distribute more than 500 grams of cocaine in Madison County on Jan. 14. LaCarl Carr faces one count of possessing a firearm – a derringer .38-caliber – in furtherance of cocaine trafficking on that date.Along with various other defendants in the conspiracy, Cortez Carr is charged with three counts of using a telephone, in November 2012 and December 2012, to further the marijuana conspiracy. He faces 13 counts, with various other defendants, of using a telephone between December 2012 and January 2013, to further the cocaine conspiracy.
Of the 22 defendants charged in the April 24 indictment returned by a federal grand jury in Birmingham, 20 are from Huntsville. Along with the Carrs they are: brothers TOMMY "Roland" CHILDS III, 51, and ERIC DEWAYNE "Twin" or "Look-a-like" CHILDS, 42; CHRISTOPHER IKE "Coota" OKAFOR, 29; COREY TODD "Black Boy" THOMPSON, 25; GREGORY LAVAR "Greedy G" HAMPTON, 35; MICHAEL WAYNE BURTON, 45; TRAVIS SANITAL WASHINGTON, 31; DEONTA LAJUAN TURNER, 30; TERRENCE LAVELLE "Wolf" MELTON, 36; JOHN EARNEST MOORE JR. 27; CHARLES COLVIN COPELAND, 44; CORNELIUS ANTONIO CARTER, 30; FREDERICK LEE MAPLES, 46; MONICA CHAMPALER TONEY, 35; DARRAL DEMETRIAS WALTER, 38; KEENAN JERMAINE SHEPHARD, 33; and an unidentified defendant, referred to in the indictment as FNU "Renay" LNU, age unavailable.
The two defendants from outside Huntsville are: QUINCY TYWY ELLINGTON, 36, of Atlanta, and CHRISTOPHER DAVID "Chris Wheeler" SANDERS, 33; of Decatur.
The three Carrs, Eric and Tommy Childs, Sanders, Thompson, Hampton, Burton, Washington, Ellington, Turner, Melton, Moore, Copeland, Carter, Young, Maples, Toney and Walter are charged in Count One of the indictment with the conspiracy to possess and distribute more than 280 grams of crack cocaine on March 15, 2010.
Cortez and Tyris Carr, Melton, Shephard, Okafor and Renay are charged in Count Two with the conspiracy to possess and distribute marijuana.
Okafor, individually, is charged with possessing with intent to distribute marijuana, and with possessing a firearm – a Beretta .22 LR pistol – in the furtherance of the drug-trafficking crime, on Feb. 7. He also is charged with being a felon in possession of a firearm.
Conspiring to possess and distribute more than 280 grams of crack cocaine carries a maximum penalty of life in prison and a $4 million fine. Conspiracy to possess and distribute marijuana carries a maximum penalty of five years in prison and a $250,000 fine. Possessing with intent to distribute more than 500 grams of cocaine carries a minimum mandatory prison sentence of five years and a maximum sentence of 40 years in prison and a $5 million fine. Possessing a firearm in furtherance of a drug-trafficking crime carries a minimum mandatory sentence of five years in prison, which must be served consecutively to any other sentence imposed for the crime.
The FBI, Madison-Morgan County HIDTA Task Force, Huntsville, Madison and Decatur police departments, Alabama Alcoholic Beverage Control Board, Alabama Department of Public Safety, federal Drug Enforcement Administration, and Madison County and Morgan County sheriff's departments and district attorneys' offices investigated the case. Assistant U.S. Attorney Terence O'Rourke is prosecuting the case.
The public is reminded that an indictment contains only charges. Defendants are presumed innocent and it is the government's obligation to prove guilt beyond a reasonable doubt at trial.
Twelve Defendants Sentenced for Murder/Marijuana Grow House ConspiracyRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Michael B. Steinbach, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, Michael J. DePalma, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), and J.D. Patterson, Director, Miami-Dade Police Department, announced the sentencings of defendants Derrick Santiesteban, of Miami, Juan Felipe Castañeda, of Miami, Alexander Santiesteban, of Miami, German Silvestro, of Miami, David Silva, of Miami, Francisco Javier Diaz, of Miami-Dade, Alejandro Pimentel, of Miami, John Villalonga, of Miami-Dade, Raul Fabian Ramirez, Jr., of Miami, Yadira Santiesteban, of Miami, Dayana Castellanos, of Miami, and Estrella J. Mijares, of Miami, before U.S. District Judge K. Michael Moore.
According to court documents, the defendants operated an extensive network of hydroponic marijuana grow houses throughout South Florida. In 2009, a large quantity of marijuana belonging to the organization was stolen. Members of the organization set out to find the people responsible for the theft. On June 28, 2009, Derrick Santiesteban, Gilberto Santiesteban, Jr., Norge Manduley, and Juan Felipe Castañeda kidnapped the individual who they thought was responsible for the theft of the marijuana. During the abduction, the individual was shot and killed.
Derrick Santiesteban was sentenced to life in prison on charges of drug, money laundering, and kidnapping with death resulting.
Juan Felipe Castañeda was sentenced to 360 months in prison, to be followed by 5 years of supervised release, on charges of conspiracy to possess with the intent to distribute marijuana.
Alexander Santiesteban was sentenced to 262 months in prison, to be followed by 5 years of supervised release, on charges of conspiracy to possess one thousand (1,000) or more marijuana plants with the intent to distribute and conspiracy to commit money laundering.
German Silvestro was sentenced to 144 months in prison, to be followed by 5 years of supervised release. David Silva, Francisco Javier Diaz, Alejandro Pimentel, and John Villalonga were each sentenced to 120 months in prison, to be followed by 5 years of supervised release. Raul Fabian Ramirez, Jr. was sentenced to 46 months in prison, to be followed by 2 years of supervised release. Each of these defendants previously pled guilty to Count 1 of the indictment, charging them with conspiracy to possess 1,000 or more marijuana plants with the intent to distribute.
Yadira Santiesteban was sentenced to 70 months in prison, to be followed by 3 years of supervised release. Dayana Castellanos was sentenced to 37 months in prison, to be followed by 2 years of supervised release. Estrella J. Mijares was sentenced to 37 months in prison, to be followed by 1 year of supervised release. Each of these defendants pled guilty to one count of conspiracy to commit money laundering.
In addition, the following individuals previously pled guilty and are awaiting sentencing:
Gilberto Santiesteban, Jr., of Miami, previously pled guilty to conspiracy to possess with the intent to distribute marijuana, conspiracy to commit money laundering, and conspiracy to commit kidnapping (Counts 1, 2, and 3). Sentencing is scheduled for July 18, 2013 at 2:00 p.m. before U.S. District Judge K. Michael Moore. At sentencing, the defendant faces a minimum mandatory term of 10 years in prison, and a maximum term of up to life imprisonment for Count 1; a maximum term of 20 years in prison for Count 2; and a maximum term of up to life in prison for Count 3.
Darvis Santiesteban, of Miami, previously pled guilty to Counts 1 and 2 of the indictment. Count 1 charged him with conspiracy to possess one thousand (1,000) or more marijuana plants with the intent to distribute and Count 2 charged him with conspiracy to commit money laundering. Sentencing is scheduled for July 18, 2013 at 2:00 p.m. before U.S. District Judge K. Michael Moore. At sentencing, the defendant faces a minimum mandatory term of 10 years in prison, and a maximum term of up to life imprisonment on Count 1; and a maximum term of 20 years in prison on Count 2.
Gilberto Santiesteban, Sr., of Miami, previously pled guilty to Count 1 of the indictment charging him with conspiracy to possess 1,000 or more marijuana plants with the intent to distribute. Sentencing is scheduled for July 18, 2013 at 2:00 p.m. before U.S. District Judge K. Michael Moore. At sentencing, the defendant faces a minimum mandatory sentence of 10 years in prison, and a possible maximum term of up to life in prison.
Norge Manduley, of Hialeah, was convicted at trial of one count of conspiracy to possess less than one hundred (100) marijuana plants with the intent to distribute. Sentencing is scheduled for July 30, 2013 before U.S. District Judge K. Michael Moore. At sentencing, Manduley faces a statutory maximum sentence of up to 20 years imprisonment.
Mr. Ferrer commended the investigative efforts of the FBI, IRS-CI, and Miami-Dade Police Department. The case is being prosecuted by Assistant U.S. Attorneys William Athas and Pat Sullivan.
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.
Truth or Consequences Couple Arrested on Federal Prescription Drug Trafficking ChargesRead the Press Release
ALBUQUERQUE – Michael Capps, 52, and his wife Roberta Capps, 52, both of Truth or Consequences, N.M., appeared in Las Cruces federal court this morning on criminal complaints charging them with conspiracy and the unlawful distribution of the prescription painkillers Oxymorphone and Oxycontin. Roberta Capps waived a preliminary hearing and entered a not guilty plea to the charges against her before being released on conditions of release pending trial. Michael Capps remains in custody pending a preliminary hearing and a detention hearing scheduled for May 29, 2013.
Michael and Roberta Capps were arrested on May 21, 2013, on criminal complaints alleging that they unlawfully distributed quantities of Oxycontin and Oxymorphone to a DEA confidential source on three occasions between Dec. 10, 2012 and Jan. 15, 2013. The complaints allege that Michael and Roberta Capps sold 30 10mg pills of Oxycontin to the confidential source for $340 on Dec. 10, 2012, at the couple’s residence in Truth or Consequences.
According to the complaints, on Dec. 18, 2012, Roberta Capps allegedly sold 60 15mg pills of Oxycontin and five 10mg pills of Oxycontin to the confidential source for $950. During the transaction, Roberta Capps allegedly stated that Michael Capps had obtained the pills from a pharmacy and was aware of the transaction between her and the confidential source.
On Jan. 15, 2013, Roberta Capps allegedly sold 48 10mg pills of Oxycontin, five 60mg pills of Oxycontin and 60 20mg pills of Oxymorphone to the confidential source in Truth or Consequences. During a recorded conversation, Roberta Capps allegedly stated that Michael Capps had obtained the Oxymorphone and she had obtained the Oxycontin that she sold to the confidential source. Roberta Capps also allegedly acknowledged knowing that it was a felony offense to sell the pills.
If convicted of the offenses charged in the criminal complaints, Michael and Roberta Capps each face a maximum penalty of 20 years in prison. Charges in criminal complaints are merely accusations and all defendants are presumed innocent unless found guilty beyond a reasonable doubt.
These cases were investigated by the Las Cruces office of the DEA and the Truth or Consequences Police Department and are being prosecuted by Assistant U.S. Attorney Amanda L. Gould of the U.S. Attorney’s Las Cruces Branch Office.
Trumbull Resident Sentenced to Federal Prison for Fraud OffensesRead the Press Release
Deirdre M. Daly, Acting United States Attorney for the District of Connecticut, announced that ANGELINA VELASQUEZ, 46, of Trumbull, was sentenced today by United States District Judge Janet C. Hall in New Haven to 15 months of imprisonment, followed by three years of supervised release, for two fraud offenses.
According to court documents and statements made in court, VELASQUEZ was employed as the payroll and human resources coordinator for a victim company. From approximately September 2007 to November 2009, VELASQUEZ manipulated her employer’s payroll system and caused the company to generate approximately 350 unauthorized payroll checks, totaling approximately $247,570, in the names of 87 different employees at the company. She then intercepted the checks before delivery to the employees, forged their signatures on the back of the checks, deposited and cashed the checks at two banks and used the proceeds for her own personal use.
In addition, VELASQUEZ assisted individuals by preparing and submitting personal income tax returns. In 2009, she defrauded an individual out of her tax refund of $5,146.
On February 28, 2013, VELASQUEZ pleaded guilty to one count of bank fraud.
This matter was investigated by the Shelton Police Department, the United States Secret Service, and the Connecticut Financial Crimes Task Force, which includes federal, state and local law enforcement agencies. The case was prosecuted by Assistant United States Attorney Neeraj N. Patel.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
[email protected]Three Defendants Plead Guilty to Participating in Ambush Murder and Attempted Murder of Ice Agents in MexicoRead the Press Release
Julian Zapata Espinoza, also known as “Piolin,” 32, pleaded guilty today to the murder of U.S. Immigration and Customs Enforcement (ICE) Special Agent Jaime Zapata and the attempted murder of ICE Special Agent Victor Avila in Mexico. The court also unsealed today the guilty pleas of three other defendants on related murder, attempted murder, racketeering and accessory charges.
The guilty pleas, in the U.S. District Court for the District of Columbia, were announced by Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney for the District of Columbia Ronald C. Machen Jr.; Assistant Director Ronald T. Hosko of the FBI Criminal Investigative Division; and ICE Director John Morton.
As set forth in court filings, on Feb. 15, 2011, Espinoza, a commander in Los Zetas Cartel, a heavily armed Mexican narco-trafficking cartel and transnational criminal organization, attempted to hijack Special Agent Zapata’s and Special Agent Avila’s armored government vehicle as the agents were driving on Highway 57 in San Luis Potosi. Two armed Zetas hit squads, or “estacas,” forced the agents off the road and surrounded their vehicle. Espinoza, the leader of the attack, ordered the agents to exit their vehicle. When the agents refused and attempted to identify themselves as American diplomats from the U.S. Embassy, the hit squad members fired weapons near and into the vehicle, striking both agents. Estaca members continued to fire at the vehicle as the agents attempted to escape by driving away. Special Agent Zapata died as a result of the gunshot wounds he suffered during the attack, and Special Agent Avila was seriously injured.On April 19, 2011, Espinoza was indicted by a federal grand jury in the District of Columbia on multiple counts pertaining to the murder of ICE Special Agent Zapata and the attempted murder of ICE Special Agent Avila and, on Dec. 20, 2011, was extradited from Mexico to the United States. This morning, the defendant entered a guilty plea before Chief Judge Royce C. Lamberth to the murder of Special Agent Zapata, an officer and employee of the United States, and the attempted murder of Special Agent Avila, an officer and employee of the United States.
In addition to the announcing the guilty plea of Espinoza, prosecutors also announced related guilty pleas by three other defendants. Ruben Dario Venegas Rivera, also known as “Catracho,” 25, pleaded guilty on Aug. 1, 2011, to federal charges concerning the murder of Special Agent Zapata and attempted murder of Special Agent Avila. Jose Ismael Nava Villagran, also known as “Cacho,” 30, pleaded guilty on Jan. 4, 2012, also to federal charges concerning the murder and attempted murder of the ICE agents. Francisco Carbajal Flores, also known as “Dalmata,” 38, pleaded guilty on Jan. 10, 2012, to conspiracy to conduct the affairs of an enterprise through a pattern of racketeering activity and to being an accessory after the fact to the murder and attempted murder of the ICE agents.
As part of their guilty pleas, Espinoza, Rivera and Villagran admitted to being members of a Los Zetas hit squad and to participating directly in the Feb. 15, 2011, ambush of the two Special Agents. The fourth defendant, Flores, acknowledged assisting Zetas members after the Feb. 15 attack.
All four defendants face a maximum sentence of life in prison. No sentencing date has been set for the defendants.
“Special Agent Zapata died for his country in a senseless and brutal attack, and Special Agent Avila was grievously wounded in the same ambush by members of Los Zetas Cartel,” said Acting Assistant Attorney General Raman. “Both men are American heroes who dedicated themselves to protecting the United States, only to be attacked by vicious thugs. I hope that today’s announcement of guilty pleas by the Cartel members directly responsible for the attack brings some measure of justice to the victims and their families. A team of dedicated prosecutors and investigators has worked day and night to identify and hold these defendants accountable. Our work is far from over, and we will continue to devote our full resources and work with our law enforcement partners here and abroad to investigate and prosecute those responsible.”
“The deadly ambush of two highly dedicated and courageous American law enforcement officers by the Los Zetas drug cartel demanded an intense, dedicated and forceful response,” said U.S. Attorney Machen. “The message to any criminal who dares to commit an act of violence against a U.S. law enforcement officer serving in a foreign land is unmistakable - if you commit such a heinous crime, we will not forget, we will not falter, and we will not rest until you are brought to justice. Our work in this critical case will continue until all of those who participated in the murder of Special Agent Zapata and attempted murder of Special Agent Avila are held accountable.”
“With the assistance of our law enforcement partners, assailants responsible for murdering Agent Zapata and wounding Agent Avila have been brought to justice,” said FBI Assistant Director Hosko. “While there is nothing we can do to change what happened that fateful day in Mexico, let it be known that an attack against any federal agent serving his or her country is an attack on all federal agents and as such remains a priority for the FBI until those responsible are brought to justice.”
“Today’s announcement is a very important milestone in the effort to see that justice is served in the murder of ICE Special Agent Zapata and the attempted murder of ICE Special Agent Victor Avila,” said ICE Director Morton. “Both men were trying to make the world a safer place, and today’s result is a very welcome step to honor their service and sacrifice.”
This case is being investigated by the FBI, with substantial assistance from ICE, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Drug Enforcement Administration, the Customs and Border Protection, the Diplomatic Security Service and the U.S. Marshals Service.
The case is being prosecuted by the Organized Crime and Gang Section and the Narcotic and Dangerous Drug Section of the Justice Department’s Criminal Division and the U.S. Attorney’s Office for the District of Columbia. The Office of International Affairs of the Justice Department’s Criminal Division provided substantial assistance.Three Defendants Plead Guilty to Participating in Ambush Murder and Attempted Murder of ICE Agents in MexicoFourth Defendant Pleads Guilty as Accessory After the Fact to AmbushRead the Press Release
WASHINGTON – Julian Zapata Espinoza, also known as “Piolin,” 32, pleaded guilty today to the murder of U.S. Immigration and Customs Enforcement (ICE) Special Agent Jaime Zapata and the attempted murder of ICE Special Agent Victor Avila in Mexico. The court also unsealed today the guilty pleas of three other defendants on related murder, attempted murder, racketeering and accessory charges.
The guilty pleas, in the U.S. District Court for the District of Columbia, were announced by Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney for the District of Columbia Ronald C. Machen Jr.; Assistant Director Ronald T. Hosko of the FBI Criminal Investigative Division; and ICE Director John Morton.
As set forth in court filings, on Feb. 15, 2011, Espinoza, a commander in Los Zetas Cartel, a heavily armed Mexican narco-trafficking cartel and transnational criminal organization, attempted to hijack Special Agent Zapata’s and Special Agent Avila’s armored government vehicle as the agents were driving on Highway 57 in San Luis Potosi. Two armed Zetas hit squads, or “estacas,” forced the agents off the road and surrounded their vehicle. Espinoza, the leader of the attack, ordered the agents to exit their vehicle. When the agents refused and attempted to identify themselves as American diplomats from the U.S. Embassy, the hit squad members fired weapons near and into the vehicle, striking both agents. Estaca members continued to fire at the vehicle as the agents attempted to escape by driving away. Special Agent Zapata died as a result of the gunshot wounds he suffered during the attack, and Special Agent Avila was seriously injured.
On April 19, 2011, Espinoza was indicted by a federal grand jury in the District of Columbia on multiple counts pertaining to the murder of ICE Special Agent Zapata and the attempted murder of ICE Special Agent Avila and, on Dec. 20, 2011, was extradited from Mexico to the United States. This morning, the defendant entered a guilty plea before Chief Judge Royce C. Lamberth to the murder of Special Agent Zapata, an officer and employee of the United States, and the attempted murder of Special Agent Avila, an officer and employee of the United States.
In addition to the announcing the guilty plea of Espinoza, prosecutors also announced related guilty pleas by three other defendants. Ruben Dario Venegas Rivera, also known as “Catracho,” 25, pleaded guilty on Aug. 1, 2011, to federal charges concerning the murder of Special Agent Zapata and attempted murder of Special Agent Avila. Jose Ismael Nava Villagran, also known as “Cacho,” 30, pleaded guilty on Jan. 4, 2012, also to federal charges concerning the murder and attempted murder of the ICE agents. Francisco Carbajal Flores, also known as “Dalmata,” 38, pleaded guilty on Jan. 10, 2012, to conspiracy to conduct the affairs of an enterprise through a pattern of racketeering activity and to being an accessory after the fact to the murder and attempted murder of the ICE agents.
As part of their guilty pleas, Espinoza, Rivera and Villagran admitted to being members of a Los Zetas hit squad and to participating directly in the Feb. 15, 2011, ambush of the two Special Agents. The fourth defendant, Flores, acknowledged assisting Zetas members after the Feb. 15 attack.
All four defendants face a maximum sentence of life in prison. No sentencing date has been set for the defendants.
“Special Agent Zapata died for his country in a senseless and brutal attack, and Special Agent Avila was grievously wounded in the same ambush by members of Los Zetas Cartel,” said Acting Assistant Attorney General Raman. “Both men are American heroes who dedicated themselves to protecting the United States, only to be attacked by vicious thugs. I hope that today’s announcement of guilty pleas by the Cartel members directly responsible for the attack brings some measure of justice to the victims and their families. A team of dedicated prosecutors and investigators has worked day and night to identify and hold these defendants accountable. Our work is far from over, and we will continue to devote our full resources and work with our law enforcement partners here and abroad to investigate and prosecute those responsible.”
“The deadly ambush of two highly dedicated and courageous American law enforcement officers by the Los Zetas drug cartel demanded an intense, dedicated and forceful response,” said U.S. Attorney Machen. “The message to any criminal who dares to commit an act of violence against a U.S. law enforcement officer serving in a foreign land is unmistakable - if you commit such a heinous crime, we will not forget, we will not falter, and we will not rest until you are brought to justice. Our work in this critical case will continue until all of those who participated in the murder of Special Agent Zapata and attempted murder of Special Agent Avila are held accountable.”
“With the assistance of our law enforcement partners, assailants responsible for murdering Agent Zapata and wounding Agent Avila have been brought to justice,” said FBI Assistant Director Hosko. “While there is nothing we can do to change what happened that fateful day in Mexico, let it be known that an attack against any federal agent serving his or her country is an attack on all federal agents and as such remains a priority for the FBI until those responsible are brought to justice.”
“Today’s announcement is a very important milestone in the effort to see that justice is served in the murder of ICE Special Agent Zapata and the attempted murder of ICE Special Agent Victor Avila,” said ICE Director Morton. “Both men were trying to make the world a safer place, and today’s result is a very welcome step to honor their service and sacrifice.”
This case is being investigated by the FBI, with substantial assistance from ICE, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Drug Enforcement Administration, the Customs and Border Protection, the Diplomatic Security Service and the U.S. Marshals Service.
The case is being prosecuted by the Organized Crime and Gang Section and the Narcotic and Dangerous Drug Section of the Justice Department’s Criminal Division and the U.S. Attorney’s Office for the District of Columbia. The Office of International Affairs of the Justice Department’s Criminal Division provided substantial assistance.
13-182The United States Sues Reunion Mortgage and its Owner, President, and Designated Broker under the False Claims ActRead the Press Release
SAN FRANCISCO – The United States filed a civil complaint against Reunion Mortgage and its Owner, President and Designated Broker, David Thayer, under the False Claims Act, 31 U.S.C. §§ 3729-3733, United States Attorney Melinda Haag announced. The complaint seeks treble damages and civil penalties in connection with Reunion Mortgage’s participation in the Federal Housing Administration’s (“FHA”) Direct Endorsement Lender Program.
The complaint alleges that Reunion Mortgage and Thayer approved twelve loans and falsely certified that the loans met the U.S. Housing and Urban Development’s (“HUD”) requirements and were eligible for FHA insurance. The complaint further alleges that Reunion Mortgage and Thayer knew that the company’s underwriters routinely failed to perform basic due diligence, failed to verify information in the loan file that bore directly on the borrower’s ability to make payments on the mortgage, and repeatedly certified mortgage loans that contained serious defects and departures from HUD’s underwriting standards. The twelve loans defaulted and FHA paid more than $1.63 million in insurance claims as a result.
U.S. Attorney Melinda Haag said: “As alleged, Reunion Mortgage and David Thayer turned out bad loans and lied about their compliance with HUD requirements. This Office will continue its work to hold the perpetrators of mortgage fraud accountable.”
Ila C. Deiss is the Assistant U.S. Attorney who is handling the case with the assistance of Financial Fraud Investigator Michael Zehr, Contract Paralegal Sarah Oldridge, and HUD Forensic Auditor Seda Mangassarian. The case is the result of an investigation by HUD’s Office of the Inspector General’s Civil Fraud Division, and is part of HUD's High Default Lender Initiative.
(Reunion Complaint )
Tax Preparer Convicted of Running Tax Fraud SchemeRead the Press Release
PHILADELPHIA - A federal jury, yesterday, returned guilty verdicts against Adekunle Adetayo Adeolu, a/k/a "Archie," 48, of Maryland, in a tax fraud conspiracy that involved phony claims for tax credits. Co-defendant Olugboyega Fisher, a/k/a "Remi Fisher, 47, a Nigerian national, pleaded guilty June 5, 2012. U.S. District Court Judge Mitchell S. Goldberg scheduled a sentencing hearing for September 10, 2013. Fisher will be sentenced on July 10, 2013. Adeolu faces an advisory sentencing guideline range of at least 27 to 33 months in prison; Fisher faces an advisory sentencing range of at least 15 to 21 months. Both defendants may also be ordered to make restitution to the IRS.
Adeolu partly owned, managed, and operated Adeolu & Okojie, Inc., a tax service business located at 124 S. 52nd Street, Philadelphia, Pennsylvania. He employed approximately 14 people, including Fisher who worked as a tax preparer. In addition to the conspiracy count, the defendant was found guilty of two counts of aiding and abetting the preparation of materially false tax returns.
The evidence presented at trial showed that between 2005 and 2008, when a client owed federal taxes, Adeolu and Fisher would sell that person the name and social security number of an individual in order to claim that person as a dependent and/or falsely claiming on their clients’ behalf an earned income tax credit, a child tax credit, and an additional tax credit. The jury also found that Adeolu willfully aided and assisted in the preparation of U.S. Individual Income Tax Returns that were fraudulent in that they represented that the taxpayers were entitled to claim dependents and tax credits that the defendant knew the taxpayers were not entitled to claim.
The case was investigated by the Internal Revenue Service Criminal Investigations and is being prosecuted by Assistant United States Attorney Jose Arteaga.UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Summers Co. Pill Dealer Pleads Guilty to Federal Drug ChargesRead the Press Release
BECKLEY, W.Va. – A Summers County pill dealer pleaded guilty today in federal court to drug charges, announced U.S. Attorney Booth Goodwin. Michael Harshaw Jr., 36, of Hinton, Summers County, W.Va., pleaded guilty in federal court in Beckley to distribution of oxycodone. On October 3, 2012, Harshaw sold five oxycodone tablets to an individual cooperating with law enforcement authorities. The pill transaction occurred at Harshaw’s Summers County residence.
Harshaw faces up to 20 years in prison and a $1 million fine when he is sentenced on October 10, 2013 by United States District Judge Irene C. Berger.
The West Virginia State Police Bureau of Criminal Investigations conducted the investigation. Assistant United States Attorney John File is in charge of the prosecution.
This case is being prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers in communities across the Southern District.