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Monday 20 May 2013
Wise, Virginia, Attorney Pleads Guilty to Four FeloniesRead the Press Release
ABINGDON, VIRGINIA – Attorney Stuart Collins, 42, of Wise, Va., pled guilty today, in the United States District Court for the Western District of Virginia, in Abingdon, to four felony counts of obtaining controlled substances by fraud.
The plea agreement provides that a significant variance above the guideline range is appropriate based on the conduct underlying the offenses which are being dismissed pursuant to the agreement – including Collins’ attempts to obstruct the investigation of his illicit drug activity. If the Court accepts the plea agreement, Collins will be sentenced to imprisonment for a term of 20 months, a sentence higher than the otherwise applicable guidelines range of imprisonment for these crimes.
“The guilty pleas entered today demonstrate that no person is above the law,” United States Attorney Timothy J. Heaphy said today. “The 20 month sentence of imprisonment called for in this plea agreement reflects the United States Attorney’s Office insistence that Collins’s obstructive conduct be taken into account in determining an appropriate punishment.”
United States District Judge James P. Jones scheduled the sentencing hearing for September 10, 2013, at the Federal Courthouse in Abingdon.
The investigation of the case was conducted by the Bristol Office of the Federal Bureau of Investigation with the assistance of the Virginia State Police, Southwest Regional Drug Task Force, Wise County Sheriff’s Office and Wise Police Department. Assistant United States Attorneys Jennifer Bockhorst, Donald Wolthuis and Randy Ramseyer prosecuted the case for the United States.
Virginia Investment Firm Officer Sent to Prison in<br /> KPMG Tax Shelter CaseRead the Press Release
Michael Parker, of Baltimore, Md., who was the chief operating officer of TransCapital Corporation, a tax-advantaged investments company based in Northern Virginia, was sentenced yesterday to 54 months in prison by U.S. District Judge Sandra S. Beckwith in Cincinnati, Ohio, the Justice Department and Internal Revenue Service (IRS) announced. In addition, Parker was sentenced to serve three years of supervised release after his release from prison. In December 2009, Parker pleaded guilty to one count of conspiracy to defraud the United States for his role in KPMG’s promotion, marketing, and implementation of a tax shelter product known as SLOTS.
According to the plea agreement and statements made during trial and related proceedings before U.S. District Judge Sandra S. Beckwith in Cincinnati, Ohio, Parker admitted to conspiring with others to defraud the IRS with regard to tax shelter transactions. Parker, a CPA and an attorney, acted as the Chief Operating Officer of TransCapital Corporation during the alleged conspiracy. Parker testified at the trial of an accountant who was a tax partner at KPMG, LLC, at its Tysons Corner, Va., office, and an attorney for TransCapital, both of whom were acquitted of conspiracy charges after a four-week jury trial.
According to the plea agreement, trial testimony and other statements, from 1998 through 2006, Parker and others marketed and implemented a tax shelter to KPMG clients called the Sale Leaseback of Tenant Improvements Strategy (SLOTS). The SLOTS shelter enabled client corporations to claim tax deductions totaling more than $240 million on corporate income tax returns filed with the IRS. During 2002 through 2004, the IRS audited three U.S. corporations that had claimed losses generated by SLOTS transactions, including The Kroger Company. Parker identified Kroger as the Fortune 500 corporation that did the largest SLOTS tax shelter transaction, and which claimed over $178 million in loss deductions, causing over $64 million in tax loss to the IRS. Parker admitted that he and the others conspired to impede and impair the IRS by making false and misleading statements to IRS agents and attorneys during these audits, including the Kroger audit. Additionally, Parker admitted that he and others concealed certain aspects of the tax shelter transaction from SLOTS clients, including Kroger, for the purpose of impeding and impairing the IRS. Parker further acknowledged that the SLOTS tax shelter and related transactions were themselves nothing more than devices to disguise and conceal mere financing transactions.
Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division, thanked the U.S. Attorney’s Office for the Southern District of Ohio for their assistance in this case, and also thanked the IRS-Criminal Investigation agents who investigated the case, as well as Tax Division Attorneys John E. Sullivan, Richard M. Rolwing, and Alexander Robbins who prosecuted the case.
Additional information about the Tax Division and its enforcement efforts may be found at http://www.usdoj.gov/tax.
Two Topeka Men Plead Guilty in Separate Armed RobberiesRead the Press Release
TOPEKA, KAN. – Two Topeka men have pleaded guilty to federal charges in separate armed robberies, U.S. Attorney Barry Grissom said today.
Johnnie Lee McCall, 28, Topeka, Kan., pleaded guilty to one count of aiding and abetting commercial robbery and one count of aiding and abetting brandishing a firearm in connection with a March 1, 2013, robbery at a Little Caesars Pizza.
Jordan Christopher Lucas, 26, Topeka, pleaded guilty to one count of commercial robbery and one count of brandishing a firearm in connection with a Feb. 27, 2013 robbery at Baskin Robbins, 4400 S.W. 21st in Topeka.
In his plea, McCall admitted that on March 1, 2013, he was riding in an automobile with co-defendant Alonzo Lax and others when he gave Lax a firearm and directed him to rob the Little Caesars Pizza at 2620 S.W. 6th Street, Suite B, in Topeka. Lax entered the restaurant brandishing the firearm. After taking money from the clerks, Lax got back in the car and the men fled the scene. The men later divided up the money from the restaurant.
Police later recovered the handgun, cash and clothing from the robbery.
McCall is set for sentencing Aug. 19. Both parties have agreed to recommend a sentence of 180 months in federal prison.
Lucas is set for sentencing Sept. 3. He faces a maximum penalty of 20 years in federal prison and a fine up to $250,000 on the robbery charge, and a penalty of not less than seven years and a fine up to $250,000 on the firearm charge.
Co-defendants in the case include:
Alonzo Lax, 26, Topeka, who pleaded guilty to robbery and brandishing a firearm during the robbery at Little Caesars. He is set for sentencing Aug. 13.
David Wigfall, 27, Topeka, who is awaiting trial.Grissom commended the Topeka Police Department, the FBI and Assistant U.S. Attorney Jared Maag for their work on the case.
In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.
Two Pakistani Nationals Extradited to District of Columbia to Face Charges Involving Illegal Pharmaceutical ShipmentsDefendants Allegedly Shipped Nearly $780,000 of Drugs into U.S.Read the Press Release
WASHINGTON – Two Pakistani nationals have been extradited to the United States to face charges alleging that they operated Internet sites that illegally shipped pharmaceuticals from Pakistan and the United Kingdom to customers in the United States.
Sheikh Waseem Ul Haq, 40, and Tahir Saeed, 51, are accused of operating Internet sites that, since late 2005, illegally shipped $2 million of pharmaceuticals from Pakistan and the United Kingdom to customers worldwide, including nearly $780,000 in sales to U.S. purchasers.
The defendants, who were arrested in London last fall, have been arraigned in the U.S. District Court for the District of Columbia. They were brought to the District of Columbia by the U.S. Marshals Service. Ul Haq had his first court appearance today. Saeed was arraigned on April 18, 2013. Both remain in custody pending further proceedings.
The developments were announced by Ronald C. Machen Jr., U.S. Attorney for the District of Columbia; Acting Assistant Attorney General Stuart F. Delery of the Department of Justice’s Civil Division; Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office; Antoinette V. Henry, Special Agent in Charge of the Metro Washington Field Office of the U.S. Food and Drug Administration’s Office of Criminal Investigations; Gary R. Barksdale, Inspector in Charge, Washington Division, U.S. Postal Inspection Service, and Karl C. Colder, Special Agent in Charge of the Washington Division Office of the Drug Enforcement Administration.
The defendants were indicted Nov. 6, 2012, following a presentation of evidence by the U.S. Attorney’s Office for the District of Columbia, working in conjunction with the Department of Justice’s Consumer Protection Branch. The 48-count indictment charges the defendants with conspiracy to import controlled substance pharmaceuticals into the United States; conspiracy to distribute controlled substance pharmaceuticals; conspiracy to introduce misbranded pharmaceuticals into interstate commerce; importation and distribution of controlled substance pharmaceuticals; introduction into interstate commerce of misbranded drugs, and conspiracy to commit international money laundering. It also includes a forfeiture allegation seeking all proceeds that can be traced to the scheme.
If convicted, the defendants face up to 20 years in prison for each of the two counts involving the conspiracy to import and distribute controlled substances, as well as up to 20 years for the conspiracy to commit international money laundering. They face a maximum penalty of five years for conspiracy to introduce misbranded pharmaceuticals into interstate commerce, and additional time if convicted of the other charges.
According to the indictment, the defendants and others owned, operated and conducted business as Waseem Enterprises and Harry’s Enterprises, wholesale pharmaceutical companies that were located in Pakistan. The businesses were used to unlawfully distribute a wide variety of controlled substances and prescription drugs through Internet sites. The defendants and others also advertised their companies on Internet sites to generate business.
Ul Haq and Saeed directed U.S. customers to submit payments via Western Union to numerous individuals in Karachi, Pakistan, in order to conceal the fact that the funds were going to Ul Haq and Saeed. As alleged in the indictment, the defendants admitted in e-mails that they paid bribes to Pakistani customs officials to facilitate shipment of the drugs out of Pakistan, and warned that U.S. customers bore the risk of interception by U.S. customs officials. The indictment alleges that the defendants packaged the drug shipments in ways which reduced the likelihood of interdiction by customs inspectors and told customers that, despite the packaging, some of the shipments might not get through.
The drugs shipped into the United States included methylphenidate (sold as Ritalin); various anabolic steroids; alprazolam (sold as Xanax); diazepam (sold as Valium), lorazepam (sold as Ativan), clonazepam (sold as Klonapin) and other controlled and non-controlled substances.
The strict statutes and regulations for pharmaceuticals – allegedly bypassed in this case by the defendants’ conduct -- are designed to protect consumers from adulterated, contaminated, and counterfeit drugs, and assure that medically necessary drugs are dispensed by licensed pharmacists who are filling legitimately issued prescriptions by licensed physicians.
In early October 2012, a law enforcement task force investigating the case learned that the defendants would be traveling from Pakistan to northern Europe. With the assistance of Interpol and law enforcement agents in Germany and the United Kingdom, the defendants were tracked from Germany to London. With coordination from the U.S. Department of Justice’s Office of International Affairs, U.S. authorities lodged provisional arrest warrants for the defendants in the United Kingdom.
The defendants were arrested by the London Metropolitan Police Service Fugitive Squad at a hotel near Heathrow Airport on October 19, 2012. They subsequently were presented to Westminster Magistrate’s Court in London and ordered held pending extradition to the United States. On March 25, 2013, the United Kingdom Minister of State issued extradition orders for both defendants, which became final when neither defendant appealed.
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“These defendants are accused of taking part in an international conspiracy to sell and ship unregulated pharmaceuticals to American consumers, without any doctors involved,” said U.S. Attorney Machen. “The extradition of these Pakistani nationals demonstrates our commitment to aggressively investigating and prosecuting those who are intent on shipping unregulated and potentially dangerous drugs into the United States.”
“The illegal sale of prescription drugs by Internet pharmacies operating around the world presents a serious threat to public health and safety,” said Assistant Director in Charge Parlave. “Together with our federal, state, local and international law enforcement partners, the FBI will continue to diligently investigate the fraudulent sale of controlled prescription drugs to protect our citizens from this danger.”
“The FDA will aggressively pursue those who offer drugs for sale over the Internet that are of unknown safety and efficacy, bypassing FDA’s regulatory authority and placing citizens at risk," said Antoinette V. Henry, Metro Washington OCI Field Office.
An indictment is merely a formal charge that a defendant has committed a violation of criminal laws and every defendant is presumed innocent until, and unless, proven guilty.
This investigation was sponsored and supported by the Department of Justice’s Organized Crime Drug Enforcement Task Force. The case was investigated by the FBI’s Washington Field Office; the FDA’s Office of Criminal Investigations; the U.S. Postal Inspection Service, and the Drug Enforcement Administration. The U.S. Marshals Service provided assistance. It is being prosecuted by Assistant U.S. Attorney John P. Dominguez and Linda I. Marks, Senior Litigation Counsel for the Department of Justice’s Consumer Protection Branch, who coordinated the investigation and presented the evidence to the grand jury.
13-176Two Men Sentenced to Prison for Marijuana and Gun OffensesRead the Press Release
DAVENPORT, IA – On May 17, 2013, Colin Peter Thompson, age 21, of Ames, Iowa, and Lee Marvin Weekly, age 21, of Clarence, Iowa, were sentenced to 3 months and 18 months imprisonment, respectively, for conspiring to distribute marijuana, for disposing of a firearm to a drug user, and for possessing a firearm as a drug user, announced United States Attorney Nicholas A. Klinefeldt. United States District Judge Stephanie M. Rose also sentenced both Thompson and Weekly to three years of supervised release following their imprisonment.
Thompson and Weekly conspired to distribute marijuana in Iowa City in July 2012. Thompson gave money to Weekly to purchase marijuana; Weekly purchased and distributed marijuana; and Thompson and Weekly split the profits. Thompson also purchased an AR-15 semiautomatic assault rifle with drug proceeds and then provided the rifle to Weekly, knowing that Weekly was a regular user of marijuana.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Iowa City Police Department, and was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
(Download Press Release )
Two Individuals Arrested for Child PornographyRead the Press Release
SAN JUAN, Puerto Rico — Today, physical education teacher Rigel Colón-Cruzado was arrested for Coercion and Enticement of a minor following an investigation by the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and the Puerto Rico Crimes Against Children Task Force (PRCACTF), announced Rosa Emilia Rodríguez-Vélez, United States Attorney for the District of Puerto Rico.
According to the criminal complaint and affidavit authorized on May 17, 2013 by US Magistrate Judge Marcos López, on April 29, 2013, agents received information regarding an adult male physical education teacher at a middle school that was engaging in sexually explicit conversations with a 12 year-old female minor. During the course of the investigation, agents learned that the minor victim was Colón-Cruzado’s 7th grade student.
In a separate investigation, Bayamón Correction Officer Ángel Marrero-Hernàndez was arrested on Friday, May 17 for coercion and enticement of a minor to engage in sexual activity. The investigation revealed that Marrero-Hernàndez used a Samsung Galaxy Note cellular phone to access applications, including “kik” and Facebook, to conduct sexually explicit conversations with a 15-year old female. During these conversations Marrero-Hernàndez sent nude images of himself and requested nude images of the minor victim in return.
“We want to let the public know that these defendants will face serious consequences for their actions. Our office will continue to vigorously prosecute this type of criminal activity to the fullest extent of the law. We want the community to know that the U.S. Attorney’s Office and the Department of Justice, along with our federal, state and local partners, are committed to protecting children from these sexual predators,” said United States Attorney for the District of Puerto Rico, Rosa Emilia Rodríguez-Vélez.
“These cases reveal the disturbing truth that some adults will go to great lengths to sexually exploit minors,” said Ángel Meléndez, special agent in charge of HSI San Juan. “In less than five months HSI San Juan has arrested 18 individuals on child exploitation charges which include possession, distribution and production of child pornography as well as the sexual enticement of minors—this is simply alarming. HSI will continue working with our local, state and federal partners to identify and arrest those who exploit our children and ensure they are prosecuted for their heinous crimes.”
Both defendants were brought before U.S. Magistrate Judge Sylvia Carreño-Coll for their initial appearance, whereupon they were ordered temporarily detained in the Metropolitan Detention Center in Guaynabo awaiting the outcome of their cases. If convicted, they face a mandatory minimum sentence of 10 years incarceration and a possible maximum statutory sentence of life incarceration. The cases are being prosecuted by Assistant U.S. Attorneys Julia Meconiates and Luke Cass.
In response to the need for an island-wide approach to fighting the escalation of predatory crimes against children, HSI San Juan partnered with members of local, state and federal law enforcement, as well as local and state government officials and community leaders, to form PRCACTF in June 2011.
Through PRCACTF, local, state and federal law enforcement agencies work together with local and state government agencies to effectively pool their resources to jointly investigate all crimes against children in Puerto Rico. Through the task force, law enforcement officers are encouraged to share evidence, ideas, and investigative and forensic tools to ensure the most successful prosecutions possible. As such, PRCACTF allows law enforcement to speak with one unified voice in defense of the children of Puerto Rico.
Suspected child sexual exploitation or missing children may be reported to the National Center for Missing & Exploited Children, an Operation Predator partner, via its toll-free 24-hour hotline, 1-800-843-5678.
Two Alabama Real Estate Investors and Their Company Sentenced for Their Roles inBid-Rigging and Mail Fraud Conspiracies Involving Real Estate Purchased at Public Foreclosure AuctionsRead the Press Release
Two Alabama real estate investors and their company were sentenced today in U.S. District Court for the Southern District of Alabama in Mobile, for their participation in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in southern Alabama, the Department of Justice announced.
Robert M. Brannon, of Laurel, Miss., and his son, Jason R. Brannon, of Mobile, Ala., were each sentenced to serve 20 months in prison for their participation in the conspiracies. The Brannons and their Mobile-based company, J&R Properties LLC, were ordered to pay $21,983 in restitution to the victims of the crime.
“Today’s sentences send a strong message that the Antitrust Division will continue to hold individuals and companies accountable for their anticompetitive conduct,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “Whether on a local, national or international scale, bid rigging and fraud subvert the competitive process and the division will remain vigilant in vigorously pursuing those who violate the antitrust laws for their own financial enrichment.”
On Dec. 12, 2012, the Brannons and their company, pleaded guilty to an indictment originally returned on June 28, 2012, in the U.S. District Court for the Southern District of Alabama, charging each of them with one count of bid rigging and one count of conspiracy to commit mail fraud. According to court documents, the Brannons and their company conspired with others not to bid against one another at public real estate foreclosure auctions in southern Alabama. After a designated bidder bought a property at a public auction, which typically takes place at the county courthouse, the conspirators would generally hold a secret, second auction, at which each participant would bid the amount above the public auction price he or she was willing to pay. The highest bidder at the secret, second auction won the property.
The indictment also charged the Brannons and their company with conspiring to use the U.S. mail to carry out a fraudulent scheme to acquire title to rigged foreclosure properties sold at public auctions at artificially suppressed prices; to make payoffs to and to receive payoffs from co-conspirators; and to cause financial institutions, homeowners and others with a legal interest in rigged foreclosure properties to receive less than the competitive price for the properties. The indictment charged the Brannons and their company with participating in the bid-rigging and mail fraud conspiracies from as early as October 2004 until at least August 2007.“The success of this investigation represents the FBI’s staunch commitment to target and investigate those who are willing to abuse and exploit illegal advantages during this legal process for personal gain at the expense of suffering citizens and businesses,” said Stephen E. Richardson, Special Agent in Charge of the FBI’s Mobile Division.
A total of eight individuals and two companies have pleaded guilty in the U.S. District Court for the Southern District of Alabama, in connection with this investigation. The sentences announced today resulted from an ongoing investigation conducted by the Antitrust Division and the FBI’s Mobile Office, with the assistance of the U.S. Attorney’s Office for the Southern District of Alabama. Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258 or visit www.justice.gov/atr/contact/newcase.html¬.
Today’s charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.StopFraud.gov.
Topeka Man Pleads Guilty to Firearm ChargeRead the Press Release
TOPEKA, KAN. – A Topeka man has pleaded guilty to a federal firearm charge, U.S. Attorney Barry Grissom said today.
Taron Alonzo Huggins, 24,Topeka, Kan., pleaded guilty to one count of unlawful possession of a firearm after a felony conviction. In his plea, he admitted that the investigation began Jan. 25, 2013, when the Topeka Police Department received a report of a shooting in central Topeka.
Hours after the shooting, police attempted to stop a car carrying Huggins and another man, Michael Whitfield. The vehicle eluded officers by going the wrong way on an off-ramp to Interstate 70. Shortly after officers discontinued the pursuit they were called to an accident at the off ramp involving the car Huggins and Whitfield had occupied.
Officers learned that a .45 caliber pistol had been discarded from the car and left near the scene of the accident. They recovered the gun and arrested Huggins at a restaurant near where the accident occurred. Huggins was prohibited by federal law from possessing a firearm because of a prior felony conviction.
Whitfield was charged separately in Shawnee County District Court.
Huggins is set for sentencing Aug. 19. He faces a penalty of not less than 15 years in federal prison. Grissom commended the Topeka Police Department, the FBI and the Bureau of Alcohol, Tobacco, Firearms and Explosives and Assistant U.S. Attorney Jared Maag for their work on the case.
Three Mexican Brothers Plead Guilty to International Sex TraffickingRead the Press Release
Earlier today, at the federal courthouse in Brooklyn, New York, Benito Lopez- Perez, Anastasio Romero-Perez and Jose Gabino Barrientos-Perez, brothers and citizens of Mexico, pled guilty to sex trafficking charges. According to the 25-count indictment and other court filings, the defendants were charged with sex trafficking, interstate prostitution, alien smuggling and money laundering offenses, involving victims as young as 14 years old.
The pleas were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and James T. Hayes, Jr., Special Agent-in-Charge, U.S. Immigration and Customs Enforcement, Homeland Security Investigations (HSI), New York.
The defendants were extradited from Mexico in December 2012, as part of the Office’s comprehensive anti-trafficking program, which has to date indicted 52 defendants in sex trafficking cases and rescued over 100 victims, including 17 minors. At the court proceeding today before United States District Judge Carol B. Amon, each defendant pled guilty to a sex trafficking charge that carries a mandatory minimum sentence of 10 years in prison, with a maximum sentence of life in prison. As part of their agreement with the government, two of the defendants, Benito Lopez-Perez and Anastasio Romero-Perez, stipulated that they would not advocate for a sentence less than 188 months in prison.
As alleged in affidavits submitted in connection with the extradition proceedings, Benito Lopez-Perez (“Lopez-Perez”), Jose Gabino Barrientos-Perez (“Barrientos-Perez”) and Anastasio Romero-Perez (“Romero Perez”), are brothers from Tenancingo in Tlaxcala, Mexico. Between January 2003 and August 2010, as part of a family-based organization, the defendants smuggled three young Mexican women, identified in the court documents as Jane Doe 1, Jane Doe 2 and Jane Doe 3, from Mexico to the United States, and then forced them to work as prostitutes in New York City and elsewhere. The defendants recruited and enticed the victims when they were just 14 and 15 years old and living in Mexico. After forcing one victim into prostitution by forcibly raping her, and luring the remaining victims into intimate relationships through false promises of romance and marriage, the defendants forced the victims to work for the defendants as prostitutes, initially in Mexico. The defendants beat and sexually assaulted the victims to compel them to work and punish them for not earning enough money, and the victims were required to turn over all of their earnings to the defendants. The defendants also threatened violence against the victims’ family members to prevent the victims from running away.
In July 2005, Lopez-Perez, Barrientos-Perez and Romero-Perez began smuggling the victims into the United States illegally to work as prostitutes. The defendants housed the victims in New York City. Each day, the victims were driven to locations throughout New York City to engage in prostitution. The three defendants worked together, frequently relying on each other to watch over the victims when any of the brothers returned to Mexico.
After the victims arrived in the United States, the defendants directed them to send the money they earned from prostitution to the defendants’ family members in Mexico. At the defendants’ direction, the victims went to various wire transfer service companies in New York City on a regular basis and sent sums of money ranging from a few hundred to a few thousand dollars to the defendants’ family members in Mexico. The defendants also directed the victims to use fake names when sending the money.
“The defendants not only pretended to embody these young victims’ dreams of romance and security, but also used violence to recruit a victim, all for the purpose of selling the victims into a nightmare of sexual slavery. The trafficking of innocent women and girls for sex is one of the most heinous crimes that we prosecute. This case, and our Office’s comprehensive anti-trafficking program, again demonstrate our resolve to investigate and prosecute those who would profit from exploitation of others,” stated U.S. Attorney Lynch.
“Today’s guilty pleas bring an end to the horrors these traffickers committed against their innocent victims,” said HSI Special Agent in Charge Hayes. “HSI will continue to devote all necessary resources, domestic and foreign, to vigorously target and prosecute members of sex trafficking organizations who prey on the innocence and trust of young women and children in order to enslave them for profit.”
The government’s case is being prosecuted by Assistant United States Attorneys Elizabeth Geddes, Licha Nyiendo and Erik Paulsen.
The Defendants:
BENITO LOPEZ-PEREZ
Age: 34ANASTASIO ROMERO-PEREZ
Age: 40JOSE GABINO BARRIENTO-PEREZ
Age: 52Three Involved in Ventura County-Based ‘Ad-Toppers’ Ponzi Scheme That Cost Victims over $27 Million Sentenced to Federal Prison TermsRead the Press Release
LOS ANGELES – Three Ventura residents were sentenced today to federal prison – with one defendant being ordered to serve more than 17 years – for their roles in an investment scheme that victimized hundreds of investors across the United States and caused losses of more than $27 million.
The three defendants – two brothers and woman, all of whom share a house in Ventura – fraudulently raised money by telling victim-investors that funds would be used to purchase Ad Toppers, a video device that can be placed on ATMs or vending machines and used to display advertisements.
The defendants sentenced today were:
Alan G. Flesher, 65, the leader of the scheme, who was sentenced to 210 months in federal prison;Wayne D. Flesher, 62, Alan’s brother, who was sentenced to 72 months in prison; and
Nancy Carol Khalial, 65, who was sentenced to 48 months in prison.
All three were sentenced by United States District Judge Terry J. Hatter Jr., who also ordered the defendants collectively to pay $27,377,470 in restitution.
All three defendants pleaded guilty last July to 17 counts of mail fraud and admitted that they used Oxnard companies called Unlimited Cash, Inc. (UCI) and Douglas Network Enterprises, Inc. (DNE) to run the Ponzi scheme. The defendants told victims that UCI would sell ATM machines and “Ad Toppers” – computer monitors capable of displaying video advertisements – and DNE would place the devices in commercial locations that would generate income. Victims were told they would earn income from ATM transaction fees and advertisement revenue generated by Ad Toppers which would show ads for companies such as Coca-Cola, Gold’s Gym and Paramount Pictures. Even though the scheme took in approximately $41 million from approximately 790 victim-investors from approximately 2001 to 2005, the defendants did not place most of the ATMs and Ad Toppers sold to investors.
“In other words, defendants sold nonexistent ATMs and Ad Toppers and paid the later investors with the funds from the earlier investors,” prosecutors wrote in court documents filed in relation to today’s sentencings.
The defendants used the majority of investor funds to pay personal expenses and to continue operating the fraudulent scheme by paying personal salaries, sales commissions and by making Ponzi-style payments.
This investigation was conducted by the FBI and the United States Postal Inspection Service, which received assistance from the Securities Exchange Commission.
Release No. 13-072
Three Former Child Day Care Center Owners Sentenced in Manhattan Federal Court for Participating in Bribery SchemeRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that LIUDMILA UMAROV, ELLA SCHVARZMAN, and RIMMA VOLOVNICK, former child day care center owners, were sentenced in Manhattan federal court for their roles in a bribery scheme. UMAROV, SCHVARZMAN, and VOLOVNICK each pled guilty pursuant to cooperation agreements to paying bribes to New York City officials in exchange for those officials taking official action to benefit day care centers in Brooklyn, New York. UMAROV was sentenced today by U.S. District Judge John F. Keenan to three years of probation. SCHVARZMAN was sentenced on May 14, 2013, by U.S. District Judge Thomas P. Griesa to three years of probation, and VOLOVNICK was sentenced on April 9, 2013, by U.S. District Judge Shira A. Scheindlin to two years of probation.
According to the Complaint that charged UMAROV and VOLOVNICK, the Informations to which UMAROV, SCHVARZMAN, and VOLOVNICK pled guilty, and statements made in Manhattan federal court during the guilty plea proceedings:
New York City has a day care subsidy program (“Day Care Subsidy Program”) whereby low-income families are eligible to receive day care subsidies. The City administers these child care subsidies in various ways, including through contracts with regulated day care centers and through “vouchers” paid to day care centers in which children of low-income parents are enrolled.
UMAROV, SCHVARZMAN, and VOLOVNICK are each former child day care center owners in Brooklyn, New York, who collectively paid more than $100,000 in bribes to City officials to help the three defendants steal from the Day Care Subsidy Program. Each of the defendants admitted to paying bribes to officials in exchange for, among other things, providing identification information of children that were eligible for the Day Care Subsidy Program but did not attend day care. This identification information was used by the defendants to seek reimbursement from the City for providing day care services to those children, even though those children did not in fact attend day care. Each of the defendants also admitted to paying bribes to officials in return for those officials overlooking health code violations at their day care centers.
In addition to probation, Judge Keenan also ordered UMAROV, 66, of Brooklyn, New York, to pay forfeiture in the amount of $100,000 and a $600 special assessment fee. Judge Griesa ordered SCHVARZMAN 46, of Brooklyn, New York, to forfeit $25,000 and imposed a $400 special assessment fee. Judge Scheindlin ordered VOLOVNICK, 57, of Brooklyn, New York, to forfeit $25,000 and imposed a $500 special assessment fee.
Mr. Bharara praised the investigative work of the New York City Department of Investigation (“DOI”).
UMAROV’s, SCHVARZMAN’s, and VOLOVNICK’s convictions are part of “Operation Pay Care,” a joint investigation led by the U.S. Attorney’s Office for the Southern District of New York and DOI. To date, 14 defendants – six City employees and eight day care owners – have been convicted as part of Operation Pay Care. Of the convicted defendants, six City officials have been sentenced: Leonid Gutnik, a former Job Opportunity Specialist/Child Care Specialist for the New York City Human Resources Administration (“HRA”), received 40 months in prison; Aurora Villareal, the former Borough Manager for Brooklyn and Staten Island Group Child Care Programs at the New York City Department of Health and Mental Hygeine (“DOHMH”) received four years in prison; New York City Fire Department (“FDNY”) Supervising Inspector Carlos Montoya received 30 months in prison; and Emile Nekhala, a former employee at DOHMH, received two years in prison. Mariya Rapoport, a former employee at HRA, and Carolyn Eason, a former employee at DOHMH, both pled guilty pursuant to cooperation agreements and were sentenced to terms of probation. Including Umarov, Schvartzman, and Volovnick, a total of seven day care operators have been sentenced – Lyudmila Grushko received nine months in prison, Inna Malinskaya received seven months in prison, Yana Krugly received six months in prison, and Grigoriy Sankin received three years of probation.
This case is being handled by the Office's Public Corruption Unit. Assistant U.S. Attorneys Harris Fischman, Michael Bosworth, and Brent Wible are in charge of the prosecution.
U.S. v. Liudmila Umarov Information
U.S. v. Ella Schvarzman Information
U.S. v. Rima Volovnic InformationTaylor County, Kentucky Man Sentenced to 110 Years in Prison for Production and Possession of Child PornographyRead the Press Release
– Victims were under five years of age
BOWLING GREEN, Ky. – A Taylor County, Kentucky man was sentenced in United States District Court, before Chief District Judge Joseph H. McKinley Jr., to 110 years in prison, followed by a lifetime of supervised release, for violating federal child pornography laws, announced David J. Hale, United States Attorney for the Western District of Kentucky.
Tony Edwin Davis, 50, of Campbellsville, Kentucky pleaded guilty on February 5, 2013, to a 15 count federal grand jury indictment that charged him with production and possession of child pornography. According to court records, between December 18, 2009 and November 28, 2010, on 14 occasions, Davis knowingly enticed and coerced two girls under five years of age, to engage in sexually explicit conduct for the purpose of producing a visual depiction. Davis also pleaded guilty to one count of knowingly possessing child pornography on or about May 20, 2012.
“Today’s sentence of 110 years in a federal prison without parole should send a stark message. We are committed to fighting child exploitation and to holding accountable those who would prey upon and harm young children,” stated U.S. Attorney Hale. “I am grateful for the collaborative work of the Taylor County Sherriff’s Department, the Campbellsville Police Department and the FBI. The Campbellsville community is a safer place.”
“Davis victimized the most innocent members of our community in a horrific manner as shown by the sentence in this case,” said Perrye K. Turner, Special Agent in Charge of the FBI in Kentucky. "The production of Child Pornography is activity that the FBI aggressively investigates. We work together with our state, local, and other federal law enforcement partners through Project Safe Childhood to help stop it.”
According to an affidavit filed by an FBI special agent in support of a criminal complaint against Davis, the FBI was contacted by the Taylor County Sheriff’s Office and Campbellsville, Kentucky Police Department on August 10, 2012, when a cell phone, formerly in the possession of the defendant, was found to have images of child pornography.
This case was prosecuted by Assistant U. S. Attorney A. Spencer McKiness and was investigated by the FBI, the Taylor County Sheriff’s Department and the Campbellsville Police Department.
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."
St. Francis Man Charged with Failure to Register as A Sex OffenderRead the Press Release
United States Attorney Brendan V. Johnson announced that a St. Francis, South Dakota man has been indicted by a federal grand jury for Failure to Register as a Sex Offender.
Koty Arcoren, age 21, was indicted by a federal grand jury on May 15, 2013. He appeared before U.S. Magistrate Judge Mark A. Moreno on May 20, 2013 and pled not guilty to the indictment. The maximum penalty upon conviction is up to 10 years’ in custody, a $250,000 fine, or both; life of supervised release; and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The charge is merely an accusation and Arcoren is presumed innocent until and unless proven guilty.
The investigation is being conducted by the U.S. Marshal Service. Assistant U.S. Attorney Tim Maher is prosecuting the case.
Arcoren was remanded to the custody of the U.S. Marshal pending trial. A trial date has not been set.
Roscoe Man Pleads Guilty to Transporting Child PornographyRead the Press Release
ROCKFORD — A Roscoe, Ill. man pleaded guilty today in federal court to two counts of transporting child pornography via the internet. In pleading guilty, JASON NICOSON, 35, admitted before U.S. District Court Judge Frederick J. Kapala that in December 2011 and January 2012, he used the internet to transport images and videos contained multiple visual depictions of minors engaging in sexually explicit conduct. Nicoson’s sentencing hearing is scheduled for Sept. 6, 2013, at 2:30 p.m.
Nicoson faces a mandatory minimum sentence of 5 years and a maximum of 20 years in prison, a term of supervised release following imprisonment of at least 5 years and up to life, and a fine of up to $250,000 on each count. The Court must impose a reasonable sentence guided by the advisory United States Sentencing Guidelines.
The sentencing was announced by Gary S. Shapiro, United States Attorney for the Northern District of Illinois, and Cory B. Nelson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation. The Illinois State Police and the Illinois Internet Crimes Against Children Taskforce assisted in the investigation.
The government is being represented by Assistant U.S. Attorney Michael D. Love.
Plea Agreement
Retired Chicago Police Officer Sentenced to 18 Years in Prison for Role in Violent Drug Distribution ConspiracyRead the Press Release
CHICAGO — A retired Chicago police officer was sentenced today to 18 years in federal prison for his lengthy participation in a drug-trafficking conspiracy that involved the distribution of hundreds of kilograms of cocaine, murder, violent kidnappings, robberies, home invasions, and obstruction of justice. The defendant, GLENN LEWELLEN, a Chicago police officer from 1986 until he resigned in 2003, was one of five co-defendants who were convicted following a two-month trial in late 2011 and early 2012. There was no allegation that Lewellen participated in any murders.
Lewellen, 57, formerly of Chicago, Las Vegas, and south suburban Frankfort, was taken into custody following his conviction on Jan. 31, 2012. He faced a maximum sentence of life and a mandatory minimum of 10 years in prison. The government sought a sentence of 30 years from U.S. District Judge Joan Gottschall, who, in imposing the sentence, said that public interest in general deterrence and respect for the law, as well as the seriousness of Lewellen’s crimes, called for the 18-year sentence, even though she did not believe that he posed any risk of personal recidivism. The jury that convicted Lewellen of a narcotics distribution conspiracy did not reach a verdict on whether he also participated in a racketeering (RICO) conspiracy, and the government today dismissed that count because it would not have added any time to Lewellen’s sentence.
The evidence at trial showed that from 1998 to 2006, after he had retired, Lewellen, together with brothers Hector and Jorge Uriarte and others, participated in the drug conspiracy with Saul Rodriguez, who Lewellen had arrested in 1996 and enlisted as a Chicago police informant while allowing him to continue buying, selling and stealing cocaine. Lewellen personally participated in violent kidnappings and robberies of drugs and money, and obstructed justice by providing information to his cohorts and interfering with criminal investigations into their activities.
“Lewellen decided that he could make more money breaking his oath and the law than he could by serving and protecting,” the government argued in a sentencing memo. He “ruthlessly kidnapped victim after victim at gunpoint, restrained them, and threatened them until cocaine or money was provided to secure their release.”
A total of 11 defendants were charged in the case. Rodriguez and three co-defendants pleaded guilty and testified as government witnesses at the trial of Lewellen and four codefendants. The case began when Rodriguez and others were arrested in April 2009 after they conspired to steal hundreds of kilograms of purported cocaine from a warehouse in southwest suburban Channahon as part of an undercover sting operation.
Rodriguez is awaiting sentencing and is expected to receive 30 to 40 years in prison under the terms of his plea agreement. Jorge Urirate was sentenced to 60 years in prison; Hector Uriarte received 50 years in prison, and trial defendants, Tony Sparkman and Robert Cardena, received 42 years and 10 years, respectively.
Lewellen’s sentence was announced by Gary S. Shapiro, United States Attorney for the Northern District of Illinois; Jack Riley, Special Agent-in-Charge of the Chicago Field Division of the Drug Enforcement Administration, and James C. Lee, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division in Chicago. The investigation was conducted under the umbrella of the Organized Crime Drug Enforcement Task Force (OCDETF).
The government is represented by Assistant U.S. Attorneys Terra Reynolds, Steven Block and Tiffany Tracy.
Palm Beach Gardens Man Sentenced for Committing Five Bank Robberies During 2012 Holiday SeasonRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Michael B. Steinbach, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, announced today’s sentencing of Crispian Carl Sprague, 38, formerly of Palm Beach Gardens. U.S. District Judge Kenneth A. Marra sentenced Sprague to 66 months in prison, to be followed by three years of supervised release, for five bank robberies he committed between November 21, 2012 and January 3, 2013. Judge Marra also ordered Sprague to pay $11,620 in restitution.
As Sprague admitted in his guilty plea, on the day before Thanksgiving, November 21, 2012, Sprague robbed the BB&T Bank in Palm Beach Gardens. Sprague approached a teller and handed her a note that demanded money and implied that he had a weapon. The teller handed Sprague the money. A few days later, on December 4, 2012, Sprague robbed the JP Morgan Chase Bank in Palm Beach Gardens. During this robbery, Sprague approached a teller and handed her a note that read: “This is a Robbery open your Drawer[.] Give me all your 100's and 50's[.] Nobody will be hurt[.] I am armed[.]” The teller handed Sprague the money. On December 20, 2012, Sprague robbed the JP Morgan Chase Bank in Jupiter, Florida. Sprague handed the teller a note that demanded money and stated that he was armed. Again, the teller complied and handed Sprague some money. On Christmas Eve, Sprague robbed the JP Morgan Chase Bank in Lake Worth, Florida. Sprague handed the teller a note demanding money and stating that he was armed. The teller complied and gave Sprague the money. On January 3, 2013, Sprague entered the TD Bank in Juno Beach, Florida. Sprague entered the bank, approached the teller, and handed the teller a note that stated: “This is a Robbery[.] No Dye Packs No Alarms[.] 100's, 50's, 20's ONLY[.] I AM ARMED[.]” The teller gave Sprague bank-owned funds.
On January 8, 2013, the note used by Sprague during the January 3, 2013 TD Bank robbery was processed by a CSI/Certified Latent Fingerprint Examiner and a partial print was located on the top area of the note. The fingerprint was subsequently positively identified as that of Crispian Carl Sprague. On January 10, 2013, Sprague was arrested at his residence.
Mr. Ferrer commended the investigative efforts of the FBI. Mr. Ferrer also thanked the Palm Beach Sheriff’s Office, West Palm Beach Police Department, Juno Beach Police Department, and Palm Beach Gardens Police Department. The case was prosecuted by Assistant U.S. Attorney A. Marie Villafaña.
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.
Oregon Penitentiary Inmate Sentenced in Federal Court for Series of Crimes Against Law Enforcement PersonnelRead the Press Release
Portland, Ore. - An inmate of the Oregon State Penitentiary, Andrew Laud Barnett, 32, today received an additional 80-month federal sentence for a series of crimes against law enforcement personnel occurring from 2008 through 2012. U.S. District Judge Marco A. Hernandez ordered that 63 months be served consecutively to the prison term Barnett is currently serving in Oregon state custody.
In January 2008, while serving earlier state sentences for assaulting sheriffs’ deputies in Washington and Marion counties, Barnett mailed a threatening letter to Washington County Sheriff Rob Gordon and three of his deputies. The letter was in retaliation for Barnett’s earlier assault prosecution and contained explicit threats of sexual assault, injury and death against the officers.
In August 2011, while awaiting federal court proceedings in the 2008 case, Barnett assaulted a deputy sheriff at the Multnomah County Detention Center. Barnett threw a container of human urine and feces in the face of the deputy.
In April 2012, while awaiting trial in both the 2008 and 2011 cases, Barnett mailed a threatening letter addressed to his federal prosecutor, Assistant United States Attorney Stephen F. Peifer. The envelope contained a white powder that Barnett represented was anthrax. A receptionist at the U.S. Attorney’s Office opened the letter in the course of her duties and inhaled the powder. Hazardous materials personnel and paramedics came to the U.S. Courthouse to investigate and care for the victim. The substance was later determined to be a penicillin-based antibiotic that had been ground into a powder.
In addition to the 2007 assaults against the deputies, Barnett has prior felony convictions for third-degree robbery, first-degree burglary and vehicle theft in 2000, delivery of a controlled substance in 2004, and assault of a corrections officer in 2004.
Barnett currently has a projected release date of May 2015 after serving his sentence on conviction of the state cases. Therefore, the 63-month portion of his new federal sentences will not commence until his state sentences end.
The federal cases were investigated by the Federal Bureau of Investigation, the U.S. Marshal’s Service, and the U.S. Postal Inspection Service.
Ontario County Man Charged with Transportation of a Minor with Intent to Engage in Sexual ActivityRead the Press Release
BUFFALO, N.Y. – U.S. Attorney William J. Hochul, Jr. announced today that David Allen Vickers, 49, of Stanley, N.Y., was arrested and charged by criminal complaint with transportation of a minor with intent to engage in sexual activity. The charge carries a mandatory minimum penalty of 10 years in prison, a maximum of life, and a fine of $250,000.
Assistant U.S. Attorney Aaron J. Mango, who is handling the case, stated that according to the complaint, from 2000 to 2004, the defendant, an over-the-road truck driver, took a minor victim on trips to New Jersey, Pennsylvania and Canada, and engaged in sexual activity with the minor. During an initial appearance this morning before U.S. Magistrate Judge H. Kenneth Schroeder, Vickers pleaded not guilty. The defendant will remain in custody pending a detention hearing on May 20, 2013 at 11 a.m.
If you are aware of any children that have had contact with the defendant, or, if you are now an adult and had contact with the defendant when you were a minor, please call the U.S. Attorney’s Office at 1-800-320-0682 and leave a message with your contact information.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The arrest was the culmination of an investigation on the part of Special Agents of the Federal Bureau of Investigation, under the direction of Richard M. Frankel, Acting Special Agent in Charge, Special Agents of the U.S. Secret Service, under the direction of Tracy Gast, Special Agent in Charge, and Detectives of the Batavia Police Department, under the direction of Police Chief, Shawn Heubusch.The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
New Iberia Woman Sentenced to 26 Months in Prison for IRS Refund SchemeRead the Press Release
LAFAYETTE, La. – United States Attorney Stephanie A. Finley announced today that Veta Thompson, 40, of New Iberia, La., was sentenced on May 17, 2013 by U.S. District Judge Elizabeth E. Foote, to 26 months in prison with one year supervised release for filing claims with the IRS and receiving tax refunds she was not owed. Judge Foote also ordered her to pay $77,349.09 in restitution to the IRS.
According to evidence presented during the guilty plea, Thompson contacted the IRS on Jan. 15, 2008 and asked how overpayments were handled. From Jan. 15, 2008 until April 29, 2010, she submitted 386 payments to the IRS totaling $12,825,992.33. During the time she submitted the payments, she was aware of the fact that she had no tax liability and that no money was owed to her by the IRS. Thompson’s bank rejected her payments to the IRS because her account was closed or because of insufficient funds. Prior to the IRS becoming aware that the payments were drawn from closed or insufficient fund accounts, the IRS issued nine refund checks totaling $77,349.09. They were mailed to her home and were used for gambling related expenses.
“This defendant fraudulently obtained money that she was not entitled to receive,” Finley said. “Her dishonest conduct has resulted in significant jail time. This office will continue to prosecute those who abuse and violate the tax laws.”
The IRS conducted the investigation. Assistant U.S. Attorney Kelly P. Uebinger prosecuted the case.
New Haven Man Sentenced to More Than Eight Years in Federal Prison for Distributing CrackRead the Press Release
Deirdre M. Daly, Acting United States Attorney for the District of Connecticut, today announced that RODNEY SNAPE, 32, of New Haven, was sentenced on Friday, May 17, by United States District Judge Janet Bond Arterton in New Haven to 105 months of imprisonment, followed by three years of supervised release, for distributing crack cocaine.
According to court documents and statements made in court, this matter stems from an FBI New Haven Safe Streets Task Force investigation into drug trafficking and associated violence in the Hill area of New Haven. From October to December 2012, an individual working with law enforcement made four purchases of a total of approximately 52 grams of crack cocaine from SNAPE.
On February 19, 2013, SNAPE pleaded guilty to one count of possession with intent to distribute cocaine base (“crack”).
SNAPE was incarcerated at the New Haven Correctional Center while awaiting sentencing. On March 7, 2013, a corrections officer conducting a search of SNAPE’s cell found a jar containing marijuana, a wristwatch that functioned as a cellular telephone and a Bluetooth earpiece. SNAPE was arrested on state marijuana possession charges, which are pending.
This matter is being investigated by the FBI New Haven Safe Streets Task Force, including the New Haven, Milford and Hamden Police Departments, and the Connecticut Department of Correction. The case is being prosecuted by Assistant United States Attorneys Anthony E. Kaplan and H. Gordon Hall.
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[email protected]Museum Guard Sentenced to Eight Years in Prison for Receiving and Possessing Child PornographyRead the Press Release
HUNTSVILLE – A federal judge today sentenced a former museum security guard to more than eight years in prison for receiving and possessing child pornography, announced U.S. Attorney Joyce White Vance and U.S. Postal Inspector R. Frank Dyer.
U.S. District Judge C. Lynwood Smith Jr. sentenced LOYD JEFFREY HITT, 53, of Center Point, on one count of receiving child pornography between May 2009 and October 2012, and on one count of possessing child pornography within that same time period. Hitt pleaded guilty to the charges in February. Judge Smith sentenced Hitt to 97 months in prison on each count, with the sentences to run concurrently.
According to court records, Hitt made a series of purchases of videos and photographs through the mail beginning in 2009, and also received images of child pornography over the Internet. Hitt had the mail orders shipped to his long-time workplace, the Birmingham Museum of Art. The videos and photographs contained pornographic images of underage boys, some younger than 14.
The U.S. Postal Inspection Service investigated the case. Assistant U.S. Attorneys Ryan K. Buchanan and Laura Hodge prosecuted the case.
Methamphetamine Dealer Sentenced to 168 Months in PrisonRead the Press Release
SAN FRANCISCO – Rogelio Corral and Jose Efrain-Gonzalez were sentenced on May 16, 2013, to 14 years and 5 years, respectively, in prison for drug trafficking, United States Attorney Melinda Haag announced.
Corral and Efrain-Gonzalez pleaded guilty on February 21 and 28, 2013, respectively, to violations of 21 U.S.C. section 841(a)(1) and (b)(1)(A)(viii), pursuant to plea agreements with the government. According to the plea agreements, Corral admitted that he supplied two pounds of methamphetamine for a drug deal in Redwood City on July 16, 2012 and Efrain-Gonzalez admitted that he participated in that deal. That deal was the culmination of a six-month sting operation conducted by the San Mateo County Narcotics Task Force in conjunction with the United States Drug Enforcement Administration.
Corral, 33, of Fremont, California, and Efrain-Gonzalez, 35, of Redwood City, California, were indicted by a federal grand jury on July 19, 2012. Both were charged with two counts of possession of methamphetamine with the intent to distribute, arising out of their participation in two drug deals – one on July 16, 2012 and one on May 31, 2012 – with an undercover police officer posing as a fellow drug dealer looking to purchase drugs.
The sentences were handed down by U.S. District Court Judge Jeffery S. White, and also include a five year period of supervised release. Both defendants were remanded to the Bureau of Prisons to begin serving their respective sentences immediately.
Memphis Man Receives over 76 Years in Prison for Carjacking, Assaulting Federal Officers, and Firearms ViolationsRead the Press Release
Memphis, TN – United States Attorney Edward L. Stanton III announced that on Friday, May 17, 2013, United States District Judge Thomas B. Russell sentenced Christopher John Clark, 35, to a total sentence of 919 months, or over 76 years, in prison, followed by five years of supervised release. There is no parole in the federal system.
# # # #
On March 18, 2008, a federal grand jury returned a 12 count indictment charging Clark with multiple criminal acts, including carjacking, assault, and firearms violations. On November 8, 2012, after a four-day jury trial, Clark was convicted on all 12 felony counts, including interstate transportation of a stolen motor vehicle, being a fugitive in possession of a firearm, being a previously convicted felon in possession of a firearm, three counts of carjacking, three counts of assaulting federal officers, and three counts of carrying and using a firearm during a crime of violence.
According to evidence presented at trial, in September 2006, Clark fled to Memphis in a stolen BMW to avoid prosecution in Alabama. Once in Memphis, Clark committed multiple armed carjackings, committed a home invasion robbery threatening two people at gunpoint, and repeatedly swerved at officers as he led them on a lengthy high speed chase through the streets of Memphis, driving off from his final carjacking with the victim’s mother in the front seat of the car. The evidence against Clark included video footage of the chase, shot by a news crew in a helicopter, during which Clark assaulted multiple law enforcement officers with a vehicle, carjacked an automobile with a passenger inside, attempted to escape in the automobile, and when surrounded by police, pointed a gun at an officer and then attempted to escape on foot.
The case was investigated by Detective Milton Gonzales with the Memphis Police Department. The case was prosecuted by Assistant United States Attorney Jennifer Lawrence Webber on behalf of the government.
This case was part of the Project Safe Neighborhoods (PSN) initiative, which encourages federal, state, and local agencies to cooperate in a unified “team effort” against gun crime, targeting repeat offenders who continually plague their communities.McPherson County Man Sentenced to 260 Years for Producing Child PornographyRead the Press Release
WICHITA, KAN. – A man from McPherson County, Kan., has been sentenced to 260 years in federal prison for using a 9-year-old child to produce child pornography, U.S. Attorney Barry Grissom said today.
Philip Andra Grigsby, 50, Marquette, Kan., pleaded guilty as charged to eight counts of sexual exploitation of a child, one count of possession of child pornography and one count of unlawful possession of a firearm after a felony conviction.
“I want this sentence to send a message,” said U.S. Attorney Barry Grissom. “The fight against child sexual exploitation and abuse is a top priority for our office.”
Grigsby initially was charged in a criminal complaint filed in July 2012 in U.S. District Court in Wichita. The complaint stated the investigation began in Australia earlier that year when an Australian man was arrested by police in that country. Evidence in that case showed the man had received child pornography over the Internet from other men, including Grigsby in Kansas.
Investigators found email messages sent by Grigsby to the Australian, including attachments with images of child pornography. The name of a middle school was visible on a certificate in one of the photos, which helped investigators identify the location and identity of the victim. Investigators obtained other evidence when they served search warrants at Grigsby’s home. Forensic analysis of the digital media revealed hundreds of still photos and five movies showing the sexual exploitation of the minor victim, as well as other images of child pornography and evidence the defendant used a Web cam to broadcast the abuse to other offenders.
Grissom commended the FBI, the Australian Federal Police, the Marquette Police Department, the Bureau of Alcohol, Tobacco, Firearms and Explosives and Assistant U.S. Attorney Jason Hart for their work on the case.
McHenry Man Arrested for Allegedly Threatening US Embassy Officials in Serbia and Serbians in Chicago over Visa DisputeRead the Press Release
CHICAGO – RUSSELL K. GORDON, 48, of rural McHenry, Ill., was arrested at his home Saturday night by special agents of the U.S. State Department Diplomatic Security Service (DSS) and the Federal Bureau of Investigation for allegedly making threatening communications to kill State Department officials, including the U.S. Ambassador in Serbia, as well as Serbians in Chicago, apparently due to a visa dispute involving his wife in Serbia. Gordon is scheduled to have his initial court appearance at 2:30 p.m. today before U.S. Magistrate Judge Susan Cox in the Dirksen Federal Courthouse in Chicago.
According to a criminal complaint affidavit, Gordon, a U.S. citizen, lived in Serbia from 1996 to November 2012, and married a Serbian woman who had a child whose father was a Serbian national. In September 2012, Serbian courts awarded custody of the child to the biological father.
Starting in February 2013, Gordon allegedly sent threatening or intimidating text messages to a U.S. Embassy consular assistant in Belgrade, Serbia. On April 15, and again on May 12, the FBI in Chicago received an email, purportedly from Gordon, at a publicly available email account that allegedly was consistent with his prior threatening messages, which are detailed in the complaint affidavit. Last Friday, Gordon’s wife went to the U.S. Embassy in Belgrade to request a visa for entry into the U.S., and told embassy officials that Gordon had developed detailed plans to shoot Serbian citizens in Chicago, including diplomats at places he believed Serbians routinely congregated. On Saturday, Gordon’s wife told the consulate chief at the U.S. Embassy in Belgrade that Gordon was enraged upon learning that his wife would receive only a two-week guest visa, and that he was going to kill the U.S. Ambassador, his wife, their two daughters and another State Department employee.
The arrest and charge were announced today by Gary S. Shapiro, United States Attorney for the Northern District of Illinois; Cornell Chasten, Special Agent-in-Charge of the DSS Field Office in Chicago; and Cory B. Nelson, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation. DSS Offices in Belgrade and Washington, D.C. provided significant assistance in the investigation. The McHenry Police Department, the McHenry County Sheriff’s Office and the Kane County Bomb Squad assisted in Gordon’s arrest on Saturday and with the execution of a search warrant at his home on Friday.
If convicted, Gordon faces a maximum penalty of five years in prison and a $250,000 fine. The Government is being represented by Assistant U.S. Attorney William Ridgway.
The public is reminded that a complaint is not evidence of guilt and that the defendant is presumed innocent and entitled to fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Complaint
Manhattan U.S. Attorney and FBI Assistant Director-In-Charge Announce Criminal Complaint Against Three New York-Based University Researchers for Conspiring to Receive Bribes from A Chinese Company and A Chinese Government-Supported Research InstituteRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and George Venizelos, the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), announced today the filing of charges against YUDONG ZHU, XING YANG, and YE LI, three researchers who worked on improving MRI technology at a university in New York, New York, but who also had undisclosed affiliations with a Chinese company performing the same type of research. The research at the university was funded by a multi-million dollar federal grant from the National Institutes of Health. The defendants are each charged with one count of commercial bribery in connection with a conspiracy to receive payments from the Chinese company and a Chinese government-supported research institution in exchange for providing non-public information about research they conducted at the university. ZHU is also charged with lying about conflicts of interest in connection with the federal research grant. ZHU and YANG were arrested at their residences in New York yesterday, and LI is believed to have flown to China before charges were brought. ZHU and YANG will be presented later today in Manhattan federal court before U.S. Magistrate Judge Sarah Netburn.
Manhattan U.S. Attorney Preet Bharara said: “As alleged, this is a case of inviting and paying for foxes in the henhouse. These defendants allegedly colluded with representatives from a Chinese governmental entity and a direct competitor of the university for which they worked to illegally acquire NIH-funded research for the benefit of those entities, as described in the complaint. The defendants also allegedly deceived the university and others about their professional allegiances to competing Chinese interests. The acquisition of federally funded research for the benefit of these Chinese entities is a serious crime and will not be tolerated by this Office.”
FBI Assistant Director-in-Charge George Venizelos said: “As alleged, while in the United States, these defendants conducted important research partially funded by the federal government to advance important MRI technology. Instead of working exclusively for a New York research institution, the defendants took bribes to acquire research for the benefit of both a Chinese competitor and a Chinese government institution. Protecting our nation’s technology and intellectual property against these types of thefts remains one of the FBI’s top priorities.”
According to the allegations in the Complaint unsealed today in Manhattan federal court:
In 2008, a university research medical center located in New York, New York (the “University”) hired ZHU, an accomplished researcher and innovator in the field of magnetic resonance imaging (“MRI”) technology, to teach and conduct research related to innovations in MRI technology. ZHU came to the University, in large part, to use a specific University laboratory that possessed highly specialized equipment to test MRI innovations.
In 2010, ZHU caused the University to apply for and receive a grant from the National Institutes of Health (“NIH”) that provided millions of dollars in funding over a five-year period for ZHU’s research relating to improving the imaging capability of MRI equipment (the “NIH Grant”). After ZHU started his research pursuant to the NIH Grant, he arranged for YANG and LI to move to New York from China to work with him in 2011 and 2012, respectively.
While working for the University, ZHU, YANG, and LI each had undisclosed affiliations with United Imaging Healthcare (“United Imaging”), a Chinese medical imaging company, and the Shenzen Institute of Advanced Technology (“SIAT”), a Chinese government-sponsored research institute. When ZHU arranged for YANG and LI to work with him at the University, ZHU also arranged for them to receive certain financial benefits from a co-conspirator (“CC-1”) who was an executive with United Imaging and who was also affiliated with SIAT. For example, ZHU arranged for CC-1 to pay for YANG’s tuition at a graduate school in New York, New York that was affiliated with the University, and LI’s rental apartment. CC-1 also paid for YANG and LI’s travel between China and New York while they worked at the University.
In addition, the University recently discovered that during their employment at the University, ZHU, YANG, and LI each maintained an e-mail address that included the domain “united-imaging.com”. The University also obtained a United Imaging employee registration for LI, which included his signature dated September 27, 2012. ZHU, YANG, and LI concealed from, and failed to disclose, these payments from and relationships with competing research entities in China.
YANG has stated that while working on the NIH Grant at the University, he also shared with individuals at United Imaging the research results from his and ZHU’s work at the University that was conducted pursuant to the NIH Grant. Through an examination of University e-mail accounts, the University learned that from August 2011 through January 2013, individuals with e-mail addresses that included the “united-imaging.com” domain corresponded with ZHU and YANG regarding issues related to MRI equipment prototypes, experiments, and project updates. These e-mails were sent to and/or from accounts including ZHU’s personal Gmail account, his United Imaging email address, and YANG’s Hotmail account.
ZHU also had other material conflicts of interest that he concealed from the University. ZHU owned a patent related to MRI technology, the value of which would be directly impacted by his NIH Grant research. In addition, at the same time that he was leading the research for the NIH Grant, ZHU, along with CC-1, was leading a similar research project in China related to MRI technology that was funded by a grant from the Chinese government. ZHU and CC-1 were also part of the same research team at SIAT. The 2011-2012 annual report for a certain division of SIAT included photographs of ZHU and CC-1 as members of its MRI Research Team. In financial interest disclosure forms that the University required ZHU to complete in connection with the NIH Grant, ZHU failed to disclose, and falsely answered, questions regarding these outside affiliations and financial conflicts of interest.
ZHU, 44, of Scarsdale, New York, YANG, 31, of Hartsdale, New York, and LI, 31, of Hartsdale, New York, are each charged with one count of commercial bribery conspiracy, which carries a maximum sentence of five years in prison.
ZHU is also charged with one count of falsification of records in connection with the NIH grant, which carries a maximum sentence of 20 years in prison.
Mr. Bharara praised the outstanding investigative work of the FBI.
The prosecution of this case is being handled by the Office’s Complex Frauds Unit. Assistant United States Attorneys Christian Everdell and Zachary Feingold are in charge of the prosecution.
The charges contained in the Complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
U.S. v. Zhu, Yudong et al. Complaint
Man Sentenced to 57 Months for Loan Modification Scam Causing Scores to Lose Their HomesRead the Press Release
United States Attorney Laura E. Duffy announced that Christian Hidalgo of Chula Vista was sentenced today to 57 months of custody by District Court Judge William Q. Hayes for a mortgage loan-modification scheme that cheated over 120 people out of over $670,000, and resulted in the loss of many homes to foreclosure. Hidalgo was also ordered to pay full restitution to all of his victims.
Between approximately March 2009 and October 2011, Hidalgo falsely told victims facing foreclosure that he could lower their mortgage payments. Hildalgo made these false claims through a variety of business entities based in San Diego and Chula Vista, California, including: "Expo Enterprises," "United Housing," "Community Housing Agency," "National Resource Services," "Retro Management," "My Community Outreach," and "Nuestra Communidad Services."
In order to carry out his fraud, Hidalgo sent hundreds of solicitation letters in which he falsely represented that these businesses were affiliated with the U.S. Department of Housing and Urban Development ("HUD"), and its Home Affordable Modification Program ("HAMP"). The letters would direct the recipients to contact one of Hidalgo's business entities by telephone, or obtain information from one of the websites he had created to advertise his services. Hidalgo targeted low-income persons in Southern California with Hispanic surnames by obtaining marketing leads with this specific criteria.
When the victims responded to the solicitation letters, Hidalgo or one of his employees would promise to provide relief under the HAMP program, despite having no connection with this government program. Hidalgo and his employees would then falsely represent that they would negotiate a modified mortgage payment on behalf of the victims with the victims' respective lenders. In exchange, the victims were instructed to send mortgage payments directly to one of Hidalgo's business entities instead of their lenders.
Although Hidalgo and his employees promised the victims that their payments would be held untouched in an impound account, and ultimately sent to the victims' lenders at the end of negotiations, none of the money was forwarded. Sadly, this often resulted in the foreclosure of the victims' homes as a result of the lenders' failure to receive mortgage payments. For his part, Hidalgo spent the victim funds in a variety of ways, including purchasing a BMW, diamond rings, a large-screen television, and firearms. All of these items, were seized by the United States and forfeited as part of Hidalgo's sentence. The items will be sold at auction, with proceeds going to the victims.
Hidalgo's scheme was discovered after Special Agents from the United States Postal Inspection Service of the Downtown San Diego Station received over 750 undeliverable solicitation letters in April 2011 sent by Hidalgo and associates. The solicitation letters appeared to offer loan modification services and a free consultation regarding HAMP, or another HUD home-loan restructure program. Because the letters bore non-existent or incorrect return addresses, Postal Inspection agents began investigating the legitimacy of the offered services. In conjunction with the HUD Office of the Inspector General, agents interviewed hundreds of victims, conducted various searches, and seized property purchased with proceeds obtained pursuant to Hidalgo's fraudulent scheme.
United States Attorney Duffy added, "We are grateful for he vigilant efforts of the U.S. Postal Inspection Service and HUD-OIG in discovering this dreadful practice of targeting vulnerable victims in the Latino community who merely sought assistance to maintain their homes. Although many have suffered economically in the last few years, those in dire straits should not be targeted in their time of need. We hope that the sentence imposed in this case, and the restitution ordered, can bring some relief to the victims and serve as a strong deterrent to others conducting fraudulent home-loan modification scams that the consequences of your illegal conduct will be severe."
DEFENDANT Case Number: 12CR1658-WQH Christian Hidalgo SUMMARY OF CHARGES
Count 2Counts 7
Title 18, United States Code, Section 1341, 2 (mail fraud, aiding
and abetting) Maximum penalty: 20 years of custody; $1,000,000
Fine
AGENCIES
Title 18, United States Code, Section 1957 (money laundering)
Maximum penalty: 10 years of custody; $250,000 FineUnited States Postal Inspection Service ("USPIS")
United States Department of Housing and Urban Development, Office of the Inspector
General ("HUD-OIG")An indictment itself is not evidence that the defendants committed the crimes charged. The defendants are presumed innocent until the Government meets its burden in court of proving guilt beyond a reasonable doubt.
Man Sentenced for Impeding and Intimidating ProescutorRead the Press Release
A Minnesota man who interfered with a federal prosecutor while engaged in his official duties was sentenced on May 16, 2013, in federal court in Davenport.
Timothy Demuth, age 51, from Plymouth, Minnesota, was sentenced by United States District Court Judge John A. Jarvey to serve a one-year term of probation. Demuth was also ordered to perform 200 hours of community service; was fined $2000; and was ordered to pay a special assessment of $25.
At the sentencing hearing, Demuth apologized for his actions, including for making physical contact with the Southern District of Iowa (SDIA) Assistant United States Attorney (AUSA) who prosecuted Demuth’s son, Scott Demuth, in SDIA criminal case number 09-CR-00117. Demuth admitted previously that following the sentencing of his son, on February 14, 2011, he bumped shoulders with the AUSA, and then intentionally stepped directly in front of the AUSA, thereby opposing, impeding, intimidating, and interfering with the AUSA as the AUSA attempted to exit the courtroom.
Demuth and his wife both told the court at Demuth’s sentencing hearing that Demuth had not intended to make physical contact with the AUSA. However, the AUSA who prosecuted Demuth’s son described for the court Demuth’s actions in intentionally bumping and “squaring off” against the AUSA.In sentencing Demuth, Judge Jarvey found the AUSA’s description of the incident to be more credible. The court noted that the offense went to the “integrity of the judicial system,” and that all participants in the criminal justice process, including judges, attorneys, and other court officers, needed to know that they could do their jobs without intimidation. The court stated the offense was therefore “very serious” and could not be excused because Scott Demuth’s sentencing was stressful to the family.
The case was prosecuted by Northern District of Iowa Assistant United States Attorney Richard L. Murphy and was investigated by the United States Marshals Service.
Court file information is available at https://ecf.iasd.uscourts.gov/cgi-bin/login.pl. The case file number is 12-CR-00105.
MS-13 Leader, Jose Bran, A.k.a., "Pantro," Convicted of Multiple Raceteering Offenses for Role in 2011 Murder and 2012 StabbingRead the Press Release
RICHMOND, Va. – Jose Armando Bran, also known as “Pantro,” 30, of Richmond, Va., was convicted today by a federal jury on murder and maiming in aid of racketeering, among other charges.
Neil H. MacBride, United States Attorney for the Eastern District of Virginia; Mythili Raman, Acting Assistant Attorney General for the Justice Department’s Criminal Division; Jeffrey C. Mazanec, Special Agent in Charge of the FBI’s Richmond Field Office; John P. Torres, Special Agent in Charge for U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) in Washington; and Michael Herring, Richmond Commonwealth Attorney, made the announcement after the verdict was accepted by Senior United States District Judge Robert E. Payne.
Branfaces a maximum penalty of life in prison when he is sentenced on August 15, 2013.
“Nothing can bring back the life that was brutally taken on July 24, 2011, but with today’s verdict, those MS-13 members who murdered, and later stabbed, in the name of their gang have been brought to justice,” said U.S. Attorney Neil H. MacBride. “My office has made the investigation and prosecution of transnational street gang La Mara Salvatrucha Thirteen a top priority. We have successfully prosecuted MS-13 for the last decade and as this verdict makes clear, we remain fully committed to holding accountable any and all MS-13 members who violate the law. Whether it is juvenile sex trafficking in Northern Virginia or vicious gang initiation murders in Richmond, we will aggressively continue our efforts to prosecute and eradicate MS-13 from the Eastern District of Virginia.”
"Today's conviction of Jose Bran is a prime example of the FBI's commitment to disrupt and dismantle violent criminal gangs in the Commonwealth of Virginia,” said Special Agent in Charge Mazanec. We thank the City of Richmond Police Department and Homeland Security Investigations, and our other law enforcement partners who have dedicated their efforts to the common cause of eradicating MS-13 from our neighborhoods."
“MS-13 is a violent transnational gang that poses a significant threat to public safety,” said Special Agent in Charge Torres. Today’s verdict holds Jose Bran accountable for his role in the crimes of murder and attempted murder in the Richmond area. HSI is committed to working with our law enforcement partners in combating dangerous criminal organizations. ”
Bran was indicted on August 7, 2012, by a federal grand jury. The Government charged Bran with racketeering and firearms offenses to include: two counts of conspiracy to commit murder, murder, maiming, and use of a firearm during a crime of violence resulting in death. According to court records and evidence adduced at trial, Bran was responsible for orchestrating a gangland style execution of victim Osbin Hernandez-Gonzalez. Bran, who served as the leader of MS-13’s Sailors Locos Salvatrucha clique in Richmond, Virginia, suspected that Hernandez-Gonzalez had violated MS-13 rules by aiding a rival gang. Based upon this suspicion, Bran created a ruse to lure Hernandez-Gonzalez to the “Pony Pasture” area on the banks of the James River. Specifically, Bran ordered that MS-13 associate Karen San Jose contact Hernandez-Gonzalez and convince him to gather with other MS-13 members. Bran also enlisted the help of two juveniles who were tasked with actually carrying out the murder of Hernandez-Gonzalez. Finally, to ensure the murder was carried out, Bran instructed MS-13 member Michael Arevalo, also known as “Reptile,” to accompany the juveniles on the “mission” and to ensure the juveniles completed the murder, which Arevalo did.
San Jose and Arevalo previously pleaded guilty for their roles in the murder. Arevalo is scheduled to be sentenced on July 25, 2013, and San Jose is scheduled to be sentenced on June 20, 2013. Arevalo faces a maximum of life imprisonment and San Jose faces a maximum of 20 years’ imprisonment.
In or around January of 2012, Bran was told that an individual with the initials F.A. was supplying information about the Richmond Sailors Set to a rival gang. Bran also came to suspect the loyalty of MS-13 associate Justin Amador. A plan was developed to have Justin Amador kill F.A. to punish the supposed-informant and thereby also test Amador’s loyalty.On January 14, 2012, Bran directed that the plan be carried out. Sometime that evening Giovanny Torres, along with Justin Amador, Mario Molina, and Marvin De Leon, drove the victim to a nightclub in Richmond. They left after forty-five minutes, telling the victim that they were all going to go commit a burglary. They drove to the vicinity of the 3800 block of Terminal Avenue in Richmond, Virginia. After they arrived, the victim, De Leon and Justin Amador got out of the car. After a signal from Torres, De Leon grabbed the victim, pulled the victim’s sweatshirt over his head and held him while Justin Amador stabbed the victim at least 14 times. The victim escaped and fled to a nearby residence while the others drove away. The victim lost a portion of one lung as a result of the attack.
De Leon, Molina, Amador and Torres previously pleaded guilty for their roles in the stabbing. Molina was sentenced to 293 months’ imprisonment. Torres was sentenced to 235 months’ imprisonment. De Leon and Amador’s sentencing hearings have not been set.
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.
This case was investigated by the Federal Bureau of Investigation, Homeland Security Investigations and the Richmond Police Department Assistant United States Attorney Roderick C. Young and Trial Attorney Andrew L. Creighton of the Department of Justice’s Organized Crime and Gang Section are prosecuting the case on behalf of the United States.Lockport Man Pleads Guilty to Drug Conspiracy ChargeRead the Press Release
BUFFALO, N.Y.--U.S. Attorney William J. Hochul, Jr. announced today that Eric Williams, 34, of Lockport, N.Y., pleaded guilty before U.S. District Judge William M. Skretny to conspiracy to possess with intent to distribute, and the distribution of, cocaine. The charge carries a mandatory minimum penalty of five years in prison, a maximum of 40 years, a $5,000,000 fine, or both.
Assistant U.S. Attorney Mary Catherine Baumgarten, who is handling the case, stated that on August 17, 2010, members of the Niagara County Drug Task Force and the Drug Enforcement Administration executed a search warrant at the defendant's residence on Chestnut Street in Lockport. Although Williams was destroying cocaine when law enforcement officers forcibly entered the residence, officers still seized approximately 436 grams of cocaine and drug paraphernalia, sophisticated surveillance equipment, and $8,614 in US currency.
Williams was arrested along with 22 others in August of 2010 for narcotics trafficking. He is the 16th defendant to be convicted.
The plea is the result of an investigation by the Drug Enforcement Administration, under the direction of Special Agent in Charge Brian R. Crowell, New York Field Division, the Federal Bureau of Investigation, under the direction of Acting Special Agent in Charge Richard M. Frankel, Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent in Charge James C. Spero, the Niagara County Drug Task Force, under the direction of Sheriff James Votour, and the Niagara Frontier Transportation Authority Transit Police, under the direction of Chief George Gast.
Sentencing is scheduled for September 10, 2013, before Judge Skretny.Lincoln Man Sentenced for Conspiracy to Distribute Cocaine and MarijuanaRead the Press Release
United States Attorney Deborah R. Gilg announced that on May 20, 2013, Corbin Joseph Ryan, age 24 of Lincoln, was sentenced to ten years, (120 months), in prison for his involvement in a conspiracy to distribute cocaine and marijuana in the Lincoln area between March of 2009 and September of 2012. Following the prison term, Ryan will serve five years on supervised release. He was also ordered to forfeit $628.00 to the United States. Ryan will serve his federal prison term concurrently with the remainder of a 9-14 year prison term imposed in Lancaster County District Court on May 9, 2013, for two counts of distribution of cocaine and one count of possession with intent to distribute cocaine.
Ryan agreed to be held responsible for the distribution of at least 5 kilograms (11 pounds) of cocaine and at least 80 kilograms (176 pounds) of marijuana. In August and September of 2012, an undercover narcotics officer made three purchases of cocaine from Ryan in quantities ranging from 1/8 ounce to 3/8 ounce. On September 18, 2012, Ryan was arrested and admitted that he had been selling cocaine for a year. A search warrant was executed at his Lincoln residence. During the search, officers found approximately one ounce of cocaine, 1 ¼ ounces of marijuana, a scale, packaging materials, and $628.00 in cash.
The matter was investigated by the Lincoln/Lancaster County Narcotics Task Force, which includes officers of the Lincoln Police Department, the Lancaster County Sheriffs Department, the Federal Bureau of Investigation, (FBI), and the University of Nebraska-Lincoln Police Department.
Laurel Man Sentenced to 20 Years in Prison for Producing Child PornographyRead the Press Release
Greenbelt, Maryland – Chief U.S. District Judge Deborah K. Chasanow sentenced Frank Alan Klukosky, age 43, of Laurel, Maryland, today to 20 years in prison, followed by lifetime supervised release, for producing child pornography. Chief Judge Chasanow also ordered that upon his release from prison Klukosky 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).
The sentence 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; Chief Richard McLaughlin of the Laurel Police Department; Howard County Police Chief William McMahon; and Stephen Niemczak Special Agent in Charge of the Department of Health and Human Services, Office of the Inspector General (HHS-OIG), Office of Investigations, Computer Forensics and Investigative Research Branch.
According to Klukosky’s plea agreement, in June 2012, a federal probation officer discovered images and videos of child pornography on the cell phone of a registered sex offender on federal probation. Further investigation revealed that on June 24, 2012 Klukosky drove to the registered sex offender’s home in Laurel with an SD card that contained at least 120 images and six videos of child pornography. Klukosky then helped the registered sex offender load those images and videos onto his computer and cell phone.
On October 23, 2012 the FBI executed a search warrant at Klukosky’s home and seized video cameras, key fob cameras, computers, an external hard drive and other computer accessories. The external hard drive contained approximately 2,000 images and 16 videos of child pornography, including 11 videos depicting a 13 year old girl in a bathroom. The videos were taken with hidden key fob cameras. The videos were recorded on at least 10 occasions and depict the victim in stages of undress. In at least one of the videos, Klukosky is recorded while setting up or taking down the camera.
The case was investigated by the FBI-led Maryland Child Exploitation Task Force (MCETF), created in 2010 to combat child prostitution, with members from 10 state and federal law enforcement agencies. The Task Force coordinates with the National Center for Missing and Exploited Children and the Maryland State Police Child Recovery Unit to identify missing children being advertised online for prostitution.
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, the Laurel and Howard County Police Departments and HHS-OIG for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Kristi O’Malley, who prosecuted the case.
Laurel Man Sentenced to 20 Years in Prison for Producing Child PornographyRead the Press Release
Secretly Recorded a 13 Year Old Girl in a Bathroom
Greenbelt, Maryland – Chief U.S. District Judge Deborah K. Chasanow sentenced Frank Alan Klukosky, age 43, of Laurel, Maryland, today to 20 years in prison, followed by lifetime supervised release, for producing child pornography. Chief Judge Chasanow also ordered that upon his release from prison Klukosky 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).
The sentence 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; Chief Richard McLaughlin of the Laurel Police Department; Howard County Police Chief William McMahon; and Stephen Niemczak Special Agent in Charge of the Department of Health and Human Services, Office of the Inspector General (HHS-OIG), Office of Investigations, Computer Forensics and Investigative Research Branch.
According to Klukosky’s plea agreement, in June 2012, a federal probation officer discovered images and videos of child pornography on the cell phone of a registered sex offender on federal probation. Further investigation revealed that on June 24, 2012 Klukosky drove to the registered sex offender’s home in Laurel with an SD card that contained at least 120 images and six videos of child pornography. Klukosky then helped the registered sex offender load those images and videos onto his computer and cell phone.
On October 23, 2012 the FBI executed a search warrant at Klukosky’s home and seized video cameras, key fob cameras, computers, an external hard drive and other computer accessories. The external hard drive contained approximately 2,000 images and 16 videos of child pornography, including 11 videos depicting a 13 year old girl in a bathroom. The videos were taken with hidden key fob cameras. The videos were recorded on at least 10 occasions and depict the victim in stages of undress. In at least one of the videos, Klukosky is recorded while setting up or taking down the camera.
The case was investigated by the FBI-led Maryland Child Exploitation Task Force (MCETF), created in 2010 to combat child prostitution, with members from 10 state and federal law enforcement agencies. The Task Force coordinates with the National Center for Missing and Exploited Children and the Maryland State Police Child Recovery Unit to identify missing children being advertised online for prostitution.
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, the Laurel and Howard County Police Departments and HHS-OIG for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Kristi O’Malley, who prosecuted the case.
Justice Department Reaches Settlement with Cinemark<br /> Holdings Inc. and Rave Holdings LLC Movie TheatersRead the Press Release
The Department of Justice announced today that it has reached a settlement with Cinemark Holdings Inc. and Rave Holdings LLC (Rave Cinemas) that requires Cinemark to divest movie theaters in Kentucky, New Jersey and Texas, in order to proceed with its $220 million acquisition of Rave Cinemas movie theaters. In addition, Cinemark’s chairman is required to divest Movie Tavern Inc., which operates theaters in Ft. Worth and Denton, Texas, that compete with Rave Cinemas. The department said that the original deal is likely to lead to higher ticket prices for moviegoers and that the divestitures of theaters in Louisville, Ky., southern New Jersey, Fort Worth, and Denton or Hickory Creek, Texas, will preserve competition in those areas, benefitting consumers.
The department’s Antitrust Division and the state of Texas filed a civil lawsuit today in U.S. District Court in Washington, D.C., to block the proposed acquisition. At the same time, the department and the state of Texas filed a proposed settlement that requires the divestitures. If approved by the court, the settlement would resolve the lawsuit and the department’s and the state of Texas’ concerns about the competitive harm to consumers that would result from the acquisition.
“Cinemark’s proposed acquisition of Rave Cinemas would likely reduce competition among theaters showing first-run, commercial movies in the affected areas of Kentucky, New Jersey and Texas, causing moviegoers to pay higher ticket prices,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “The divestitures required by the department and the state of Texas will ensure that competition among movie theaters in the affected areas is preserved.”
According to the complaint, the movie theaters compete on multiple dimensions to attract moviegoers, such as the quality of the viewing experience, sound systems, largest screens, best picture clarity, best seating, and quality of food and drinks. More than 1 billion movie tickets were sold in the United States in 2012, with total box office revenue reaching about $9.7 billion.
The department said that Cinemark and Rave Cinemas are each other’s most significant competitor in the area in and around Voorhees-Somerdale, N.J., and in the eastern portion of Louisville, Ky., and that Rave Cinemas and Movie Tavern are each other’s most significant competitor in the western portion of Fort Worth, Texas. In the area in and around Denton, Texas, all three companies presently operate theatres. In markets in which Movie Tavern and Rave Cinemas currently compete, the department said that Cinemark’s chairman, Lee Roy Mitchell, would have an ability and financial incentive to dampen competition once Rave Cinemas was acquired by Cinemark.
The proposed acquisition would likely reduce price competition among Cinemark, Rave Cinemas and Movie Tavern in the affected markets. The complaint states that if no longer motivated to compete, Cinemark, Rave Cinemas and Movie Tavern would also have less incentive to maintain, upgrade and renovate their theaters, to improve those theaters’ amenities and services and to license the most popular movies, reducing the quality of the viewing experience for the moviegoer.
The requirement to divest three movie theaters in the locations where Cinemark and Rave Cinemas are currently each other’s closest competitor and to require Mitchell to divest Movie Tavern and its 16 theaters will alleviate the competitive harm to moviegoers from this transaction.
Cinemark, a Plano, Texas-based company, owns and operates 298 theaters with a total of 3,916 screens in 39 states. Its U.S. box office revenues were approximately $1 billion in 2012.
Rave Cinemas, a Dallas-based company, owns and operates 35 movie theaters with a total of 518 screens in 12 states. Its U.S. box office revenues were approximately $169 million in 2012.
Movie Tavern, also a Dallas-based company, owns and operates 16 movie theaters with a total of 130 screens in seven states. Its U.S. box office revenues were approximately $31 million in 2012. Movie Tavern is owned by Alder Wood Partners L.P., a Dallas-based limited partnership controlled by Mitchell and his wife.
As required by the Tunney Act, the proposed settlement and the department’s competitive impact statement will be published in the Federal Register. Any person may submit written comments concerning the proposed settlement during a 60-day comment period to John R. Read, Chief, Litigation III Section, Antitrust Division, U.S. Department of Justice, 450 5th Street, N.W., Suite 4000, Washington, D.C. 20530 (telephone: 202-307-0468). At the conclusion of the 60-day comment period, the U.S. District Court for the District of Columbia may enter the proposed consent decree upon finding that it serves the public interest.
Jicarilla Apache Man Pleads Guilty to Federal Drug Trafficking ChargesRead the Press Release
ALBUQUERQUE – Jordan Vigil, 27, a member of the Jicarilla Apache Nation who resides in Dulce, N.M., pleaded guilty this morning to a two-count indictment charging him with possession of marijuana with intent to distribute, and possession of psilocin (mushrooms) with intent to distribute. Vigil entered his guilty plea without the benefit of any plea agreement.
Vigil was arrested on Jan. 18, 2013, following the filing of the indictment on Jan. 10, 2013. The indictment alleges that Vigil was in possession of distribution amounts of marijuana and psilocin on March 10, 2012, in Rio Arriba County. This morning, Vigil entered a guilty plea to the indictment.
At sentencing, Vigil faces a maximum penalty of five years in prison on the marijuana charge and twenty years on the psilocin charge. His sentencing hearing has yet to be scheduled.
The case was investigated by the Farmington office of the FBI and the Jicarilla Apache Tribal Police Department, and is being prosecuted by Assistant U.S. Attorney Elaine Y. Ramirez.
Idaho Contractor Indicted on Federal Charges of Conspiracy, Money Laundering, Obstruction of Justice, Wire, and Tax FraudRead the Press Release
Government Seeking Forfeiture of Over $9 Million from Treasure Valley Woman
BOISE – U.S. Attorney Wendy J. Olson and Assistant Attorney General for the Tax Division Kathryn Keneally announced today that a federal grand jury in Boise returned a 42-page Superseding Indictment this week that charges Elaine Martin, 66, of Meridian, Idaho, with making false statements, conspiracy, wire fraud, mail fraud, and obstruction of justice. It also seeks forfeiture of over $9 million as the proceeds of the alleged crimes. Darrell Swigert, 67, of Boise, Idaho, is charged with obstructing and conspiring to obstruct a federal criminal proceeding.
Martin was the president and majority stockholder of Marcon, Inc., a Treasure Valley construction company. Swigert was a minority shareholder. An earlier indictment that charged only Martin, filed on March 13, 2013, was unsealed by the court today. A court date has not been set.
The Superseding Indictment charges Martin with four counts of making and subscribing a false tax return, two counts of conspiracy, five counts of wire fraud, one count of making a false statement, five counts of mail fraud, four counts of interstate transportation of property taken by fraud, one count of conspiracy to commit money laundering, one count of conspiracy to obstruct justice, and one count of obstructing justice.
The Superseding Indictment alleges that as early as 2000, and continuing through January 2012, Martin took steps to lower her personal net worth, such as acquiring, holding and transferring assets into the names of nominees. According to the Superseding Indictment, this and other alleged conduct enabled Martin to successfully apply for and be admitted into the U.S. Small Business Administration (SBA) 8(a) Program. The Superseding Indictment alleges that Martin’s actions also allowed Marcon to fraudulently maintain its certification with the U.S. Department of Transportation’s Disadvantaged Business Enterprise (DBE) Program, in the states of Idaho and Utah. The SBA 8(a) Program and DBE Program are designed to help economically and socially disadvantaged business compete in the marketplace. Both programs require applicants to show that their personal net worth is below a certain statutory threshold. The Superseding Indictment alleges that Martin remained in control of her assets while appearing to meet the personal net worth requirements of both programs.
According to the Superseding Indictment, Martin also caused false and fraudulent tax returns to be filed for herself and Marcon, Inc., which did not report all of the income received by Martin or the company. These false returns were allegedly submitted in support of Marcon’s applications to the SBA 8(a) Program and DBE Programs for Idaho and Utah, along with allegedly false personal financial statements. According to the Superseding Indictment, Martin caused the financial books and records for Marcon to be false by purposefully omitting, deleting, altering or mis-categorizing entries. The Superseding Indictment further alleges that Martin concealed her role or relationship in other business entities that dealt with Marcon, Inc.
While a participant in the SBA 8(a) Program, the Superseding Indictment alleges that Martin sought to conceal withdrawals of capital that exceeded the SBA 8(a) Program limits by executing loans with her family members and with entities that she controlled.
The Superseding Indictment charges that Marcon received more than $2.5 million in government contracts based on the company’s fraudulently obtained SBA 8(a) status. The Superseding Indictment further alleges that Marcon received more than $6 million in government contracts based on the company’s fraudulently obtained DBE status in the states of Idaho and Utah.
Both Martin and Swigert are charged with conspiracy to obstruct justice by fabricating documents and making false statements that sought to conceal the true nature, source, and extent of property belonging to Martin. According to the Superseding Indictment, Martin and Swigert fabricated a loan document and document that purported to memorialize a gift in order to impede a civil audit by the IRS and criminal investigation by the IRS and U.S. Attorney’s Office. Swigert is also charged with a second count of obstruction of justice based on allegedly false statements that he made to conceal the nature, source, and extent of property belonging to Martin.
The government seeks forfeiture of $9,237,722.10, which represents the proceeds that Martin obtained as a result of the alleged offenses.
“Those who seek federal contracts and seek to benefit from federal funds have a solemn obligation to deal honestly and openly with the federal government,” said Olson. “This office will continue to work side-by-side with its federal program partners to ensure that fraud is thoroughly investigated and, where appropriate, vigorously prosecuted.”
“The 8(a) Business Development Program is designed to help small, disadvantaged businesses compete in the marketplace and offers significant benefits to eligible small businesses,” said Inspector General Peggy E. Gustafson of the Small Business Administration. “Preferences for federal contract awards must not be given to persons who lie in order to claim eligibility. I want to thank the U.S. Attorney's Office and our law enforcement partners for their commitment to seek justice on behalf of the American taxpayer.”
“Those who commit tax fraud and fraudulently benefit from government programs are cheating honest taxpayers. IRS-Criminal Investigations will work diligently with our law enforcement partners to ensure that those who engage in these illegal activities are vigorously investigated and brought to justice,” said Stephen Boyd, IRS Criminal Investigation Special Agent-in-Charge for the State of Idaho.
“The Disadvantaged Business Enterprise (DBE) Program is a business assistance program of the U.S. Department of Transportation (DOT) which helps economically and socially disadvantaged small businesses compete in the marketplace. DBE fraud harms the integrity of the program and adversely impacts law-abiding, small business contractors trying to compete on a level playing field,” said William Swallow, regional Special Agent-in-Charge of the DOT’s Office of Inspector General. “Working with our Federal, State, and local law enforcement and prosecutorial colleagues, we will vigorously pursue those who violate the law, and expose and shut down fraud schemes that adversely affect public trust and DOT-assisted highway programs.”
Each charge of making and subscribing a false return, as charged in counts one through four, is punishable by up to three years in prison, a maximum fine of $250,000, and up to three years of supervised release. The charge of conspiracy, as charged in counts five, twelve, and23, is punishable by up to five years in prison, a maximum fine of $250,000, and up to three years of supervised release. Each count of wire fraud, as charged in counts six through ten, is punishable by up to 20 years in prison, a maximum fine of $250,000, and up to five years of supervised release. The charge of making a false statement, as charged in count 11, is punishable by up to two years in prison, a maximum fine of $250,000, and up to one year of supervised release. Each charge of mail fraud, as charged in counts 13 through 16, is punishable by up to 20 years in prison, a maximum fine of $250,000, and up to five years of supervised release. Each charge of interstate transportation of property taken by fraud, as charged in counts 18 through 21, is punishable by up to 10 years in prison, a maximum fine of $250,000, and up to three years of supervised release. The charge of conspiracy to commit money laundering, as charged in count 22 is punishable by up to 20 years in prison, a maximum fine of $250,000, and up to three years of supervised release. The charges of conspiracy to obstruct justice, count 23, and obstruction of justice, counts 24 and 25, are each punishable by up to five years in prison, a maximum fine of $250,000, and up to three years of supervised release.
The case is being investigated by the Internal Revenue Service-Criminal Investigation, the Federal Bureau of Investigation, the Office of Inspector General for the U.S. Small Business Administration, and the Office of Inspector General for the U.S. Department of Transportation.
Today's announcement is part of an effort by President Obama's Financial Fraud Enforcement Task Force (FFETF), created in November 2009, to combat financial fraud crimes by waging aggressive, coordinated and proactive investigations and prosecutions. With more than 20 federal agencies, 94 U.S. attorneys' offices and state and local partners, the task force is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
An indictment is a means of charging a person with criminal activity. It is not evidence. The person is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Grand Island Man Sentenced to 14 Years Imprisonment for Conspiracy to Distribute Methamphetamine and CocaineRead the Press Release
United States Attorney Deborah R. Gilg announced that the Honorable John M. Gerrard, U.S. District Court Judge, sentenced Jaime Francisco Barraza to 14 years imprisonment, to be followed by 5 years of supervised release, and he was ordered to pay a $100 special assessment, following his conviction for conspiracy to distribute methamphetamine and cocaine.
Between 2004 and 2010, Barraza was responsible for the distribution of more than 1,100 grams of actual methamphetamine, more than 11,000 grams of a mixture of methamphetamine, and more than 800 grams of a mixture of cocaine. It was noted at the sentencing hearing that the 14 year sentence was warranted by the amount of drugs and the length of time of Barraza’s dealings. Barraza pled guilty on January 30, 2013.
The Central Nebraska Drug and Safe Streets Task Force was responsible for the investigation of this case.Gallup Man Sentenced to Twenty-Five Months in Federal Prison for Assault Arising from Domestic Violence IncidentRead the Press Release
ALBUQUERQUE –Derek Yabeny, 27, an enrolled member of the Navajo Nation who resides in Gallup, N.M., was sentenced this morning to 25 months in prison followed by three years of supervised release for his assault conviction. Yabeny also was ordered to participate in domestic violence counseling and counseling for substance abuse.
Yabeny was arrested on a criminal complaint in Oct. 2012, and has been in custody since that time. He subsequently was indicted and charged with assault resulting in serious bodily injury, and abandonment or abuse of a child. According to the criminal complaint, on Oct. 7, 2012, Yabeny assaulted his girlfriend, who is the mother of his two-year old toddler. At the time of the assault, the victim was carrying her infant daughter. The victim sustained two orbital fractures as a result of the assault.
On Feb. 19, 2013, Yabeny entered a guilty plea to Count one of the indictment. Yabeny admitted assaulting the victim, a Navajo woman, by striking her with his fists and causing her to suffer serious bodily injury. The assault occurred on the grounds of the Shiprock Fair, which are located on the Navajo Indian Reservation, on Oct. 7, 2012.
As required by the terms of the plea agreement, Count 2 of the indictment, the child abuse charge, was dismissed after Yabeny was sentenced.
The case was investigated by the Albuquerque office of the FBI and the Shiprock office of the Navajo Nation Division of Public Safety, and was prosecuted by Special Assistant U.S. Attorney David M. Adams.
This case was brought pursuant to the Tribal Special Assistant U.S. Attorney (Tribal SAUSA) Pilot Project which is sponsored by the Justice Department’s Office on Violence Against Women, and seeks to train tribal prosecutors in federal law, procedure and investigative techniques to increase the likelihood that every viable violent offense against Native women is prosecuted in either federal court or tribal court, or both. The Tribal SAUSA Pilot Project was largely driven by input gathered from annual tribal consultations on violence against women, and is another step in the Justice Department's on-going efforts to increase engagement, coordination and action on public safety in tribal communities.
Four Charged in Methamphetamine Deal Near the HoustonianRead the Press Release
HOUSTON – Four men have been charged with conspiracy to possess and possession with the intent to distribute methamphetamine, United States Attorney Kenneth Magidson announced today along with Javier Peña, special agent in charge of the Drug Enforcement Administration (DEA). Roberto Carlos Garza, 23, and Alexander Chavez, 34, both of Rio Grande City, and Luis Angel Mendoza-Estrella, 26, and Loya-Plancarte, 22, both of Morelia, Michoacan, Mexico, were arrested Saturday after an incident near the Houstonian Hotel on North Post Oak Lane in Houston.
On May 17, 2013, a confidential source met with Garza and Chavez and allegedly negotiated the delivery of 22 pounds of methamphetamine. The criminal complaint, filed today, alleges the source was to deliver $15,000 per pound upon delivery of the methamphetamine at a parking lot near the Houstonian Hotel.
At approximately 12:58 p.m. the next day, according to the complaint, DEA agents observed a gray Honda CR-V arrive at the location driven by Chavez with Garza riding as a passenger. The Honda was allegedly followed by a gray Toyota Tundra driven by Mendoza-Estrella with Loya-Plancarte in the passenger seat. The Tundra parked, then allegedly backed out of the parking spot and drove around the lot slowly with Mendoza-Estrella and Loya-Plancarte allegedly observing other vehicles in the lot.
The criminal complaint alleges that after the source approached the Honda, met with Chavez and observed the methamphetamine, agents attempted to execute the arrest of the four men. Identifying themselves as law enforcement officers, agents ordered them out of the vehicles. Mendoza-Estrella and Loya-Plancarte each complied and agents took them into custody without incident.
However, Chavez allegedly attempted to flee, according to the allegations. He drove the Honda in reverse and struck another vehicle, then drove forward and accelerated rapidly towards two agents who were on foot, according to the complaint. One of the agents fired toward Chavez in an effort to stop him from hitting the agent with the vehicle.
Chavez was allegedly hit and the vehicle veered to the side and eventually came to a stop. Garza was taken into custody and Chavez was treated at the scene until an ambulance arrived and transported him to a hospital.
Agents subsequently found and seized three plastic containers containing a white crystalline substance believed to be methamphetamine from the rear area of the Honda, according to the complaint. The substance allegedly weighed approximately 15 pounds.
With the exception of Chavez, the three men made their initial appearance in federal court this afternoon and were temporarily detained pending further criminal proceedings. Mendoza-Estrella and Loya-Plancarte will have a detention hearing on Wed. May 22, at 10:00 a.m. before U.S. Magistrate Judge Nancy Johnson. Garza will appear in court tomorrow at 10:00 a.m. before Judge Johnson for a counsel determination hearing.
If convicted, each faces at least 10 years and up to life in prison as well as a possible $10 million fine.
The case is being investigation by the DEA with the assistance of the Harris County Sheriff’s Office. Assistant United States Attorney Rob Jones is prosecuting.
Former Dallas Securities Broker Sentenced in Oklahoma to 84 Months in Prison for Role in Stock Manipulation SchemeRead the Press Release
WASHINGTON - A former stock broker was sentenced to prison today for his role in an extensive pump-and-dump stock manipulation scheme, announced Acting Assistant Attorney General Mythili Raman of the Justice Department's Criminal Division , U.S. Attorney Danny C. Williams Sr. of the Northern District of Oklahoma, Special Agent in Charge James E. Finch of the FBI's Oklahoma City Division and Internal Revenue Service-Criminal Investigation (IRS-CI) Chief Richard Weber.
Joshua Wayne Lankford, 39, of Dallas, was sentenced by U.S. District Judge James H. Payne in the Northern District of Oklahoma to serve 84 months in prison. In addition to his prison term, Lankford was ordered to forfeit $250,000. Proceeds from forfeited assets will be used to partially restitute victims.
On Dec. 10, 2012, Lankford pleaded guilty to one count of money laundering.
"Mr. Lankford and his co-conspirators took advantage of innocent investors to the tune of millions of dollars, pumping and dumping penny stocks without regard to anything but their wallets," said Acting Assistant Attorney General Raman. "As this case shows, stockbrokers and other professionals will be punished if they break the law. Lankford now faces substantial time in prison for his manipulation scheme."
"The U.S. Attorney's Office and the Department of Justice are committed to identifying and prosecuting criminals who defraud investors and steal their savings," said U.S. Attorney Williams. "Pump and dump schemes like these have a devastating financial impact on the victims and undermine public confidence in our nation's financial system."
According to court documents and evidence presented at the 2010 trial, Lankford and his co-defendants manipulated the stocks of three companies: Deep Rock Oil & Gas Inc. and Global Beverage Solutions Inc., formerly known as Pacific Peak Investments, both of Tulsa, Okla., and National Storm Management Group Inc. of Glen Ellyn, Ill. The defendants devised and engaged in a scheme to defraud investors known as a "pump and dump," in which they manipulated publicly traded penny stocks. A penny stock is a common stock that trades for less than $5 per share in the over the counter market, rather than on national exchanges. Lankford and his co-defendants executed the scheme by obtaining a majority of the free-trading shares of stock of the company they intended to manipulate, using fraudulent and deceptive means to acquire the stock and/or remove the trading restrictions on the shares they obtained.
"Stock manipulation and securities fraud are high investigative priorities of the FBI," said FBI Special Agent in Charge Finch. "This case is the result of a lengthy investigation which involved outstanding cooperation between the FBI, IRS Criminal Investigations, and the SEC. The FBI will continue to work with our law enforcement partners to protect investors and bring those who commit these types of fraud to justice."
"Using fraud and deception to jeopardize the financial markets and launder funds are not victimless crimes," said IRS-CI Chief Weber. "Mr. Lankford and his co-defendants thought they latched onto a clever scheme to reap a vast wealth of illegal profits. Today, justice has been served. IRS-CI works in close alliance with our law enforcement partners, and together we will hold those who engage in similar conduct accountable."
According to court records, Lankford and other conspirators "parked" their shares with various nominees, such as friends, relatives or other entities that they owned and controlled. Subsequently, they engaged in coordinated trading in order to create the appearance of an emerging market for these stocks, after which they conducted massive promotional campaigns in which unsolicited fax and email "blasts" were sent to millions of recipients. According to evidence presented at the 2010 trial, these blasts touted the respective stocks without accurately disclosing who was paying for the promotions, omitted that the defendants intended to sell their shares, and induced unsuspecting legitimate investors to purchase stock in the companies. The defendants and their nominees obtained significant profits by selling large amounts of shares after they had artificially inflated the stock price. For each of the three manipulated stocks, the conspirators' sell-off caused declines of the stock price and left legitimate investors holding stock of significantly reduced value.
According to Lankford's guilty plea, he laundered $250,000 in proceeds derived from the stock manipulation scheme.
Evidence presented in the 2010 trial showed that the overall scheme resulted in illegal proceeds of more than $43 million from more than 17,000 investor victims.
Lankford was originally charged in a 24-count indictment unsealed on Feb. 10, 2009, against five defendants. Prior to trial, Lankford fled to Costa Rica, where he remained until he was extradited to the United States in May 2012. James Reskin, 54, of Louisville, Ky., was sentenced today to serve five years of probation for his role in the scheme. Co-defendants George David Gordon and Richard Clark, were convicted by a federal jury in May 2010 for their roles in the scheme. Gordon was sentenced to serve 188 months in prison, and Clark was sentenced to serve 151 months in prison. The fifth defendant, Dean Sheptycki, remains a fugitive.
The case is being prosecuted by Trial Attorneys Andrew Warren and Kevin Muhlendorf of the Criminal Division's Fraud Section and Assistant U.S. Attorney Catherine Depew for the Northern District of Oklahoma. The case is being investigated by IRS-CI and the FBI. The department wishes to thank the Securities and Exchange Commission, which referred the matter for prosecution. The department also wishes to thank the Criminal Division's Office of International Affairs, the U.S. Department of State and the U.S. Marshals Service for their work in securing Lankford's extradition.
This case is part of efforts underway by President Obama's Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys' offices and state and local partners, it's the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.Former Chief Investment Officer of Construction Supply Company Convicted on All Counts by Jury in Bank Fraud SchemeRead the Press Release
Earlier today, following three weeks of trial, a federal jury in Brooklyn, New York, returned a guilty verdict against Rodney Watts, the former Chief Investment Officer of GDC Acquisitions, LLC (“GDC”), on charges of bank fraud, false statements and conspiracy to commit bank fraud. Watts also served as the Chief Financial Officer of GDC at one time. These charges arose out of the defendant’s scheme to defraud Amalgamated Bank, GDC’s asset-based lender, of $21 million in fraudulent loans. When sentenced by United States District Judge Kiyo A. Matsumoto, the defendant faces a maximum sentence of 30 years’ imprisonment on the most serious charge. Watts’s co-defendant, Courtney Dupree, was convicted by a federal jury in December 2011, on the same charges. Dupree, who served as GDC’s Chief Executive Officer, is also awaiting sentencing.
The government has already won two appeals before the Second Circuit in the case. In one appeal, the government successfully defended its seizure of over $633,000 that Watts sought released to pay for his defense attorneys; that appeal was dismissed after a jury in the trial of Dupree determined that the funds were criminal proceeds. In the other appeal, the government successfully appealed a decision relating to evidence that Dupree committed a crime while out on bail.
The verdict was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York.
GDC, based in Long Island City, Queens, is a holding company that owns various subsidiaries, including JDC Lighting, a lighting distributor; Unalite Electric and Lighting, a lighting maintenance company; and Hudson Bay Environments Group, a furniture distributor. The evidence included the testimony of GDC’s former Chief Financial Officer and two GDC accountants, all three of whom had previously pleaded guilty to fraud charges arising from the scheme. At trial, the government proved defendant Rodney Watts and others gave Amalgamated Bank false financial information for GDC in which they had fraudulently inflated the company’s accounts receivable in order to obtain initially, and then maintain, credit lines totaling approximately $21 million. The evidence proved that the conspirators inflated the accounts receivable by a variety of means, including by recording in the corporate books fake sales that had never taken place. For example, the defendant represented to Amalgamated Bank in writing in November 2009 that GDC had $25.2 million in accounts receivable when, in fact, it had only approximately $9 million. In addition, the defendant and others defrauded Amalgamated Bank by causing GDC to acquire a company covertly, contrary to the terms of their loan agreement, and by concealing the acquisition from the bank. The defendant and others also sought to obtain an additional loan from C3 Capital, a mezzanine lender based in Kansas City, Missouri, based on GDC’s fraudulent books. According to the trial testimony, the scheme unraveled when one of the accountants turned himself into the FBI and cooperated in the government’s investigation in an undercover capacity for approximately two months.
“Using books and records that were no more than fairy tales, the defendant fleeced Amalgamated Bank of 21 million dollars. The jury saw through his creative writing and web of lies, and he will now be held to account for his crimes,” stated United States Attorney Lynch. “No matter their wealth, influence, or position, fraudsters can expect to be investigated and prosecuted to the full extent of the law.”
Ms. Lynch extended her grateful appreciation to the Federal Bureau of Investigation and the Postal Inspection Service, the agencies responsible for leading the government’s criminal investigation.
The government’s case is being prosecuted by Assistant United States Attorneys Michael L. Yaeger, Catherine M. Mirabile, David C. Woll and Brian Morris.
The case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency 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. For more information on the task force, visit www.stopfraud.gov.
The Defendants:
COURTNEY DUPREE
Age: 41RODNEY WATTS
Age: 39Felon Admits Illegally Possessing PistolRead the Press Release
PITTSBURGH, Pa. - A Pittsburgh resident pleaded guilty in federal court to a charge of violating federal firearms laws, United States Attorney David J. Hickton announced today.
Jaamayl Crosby, 27, pleaded guilty to one count before Senior United States District Judge Alan N. Bloch.
In connection with the guilty plea, the court was advised that on or about Sept. 14, 2012, Crosby, being a convicted felon, illegally possessed a Walther, Model PK380, .380 ACP caliber pistol. Federal law prohibits anyone who has been convicted of a crime punishable by a term of imprisonment exceeding one year to possess a firearm.
Judge Bloch scheduled sentencing for Aug. 22, 2013 at 12:30 p.m. The law provides for a total sentence of 10 years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the criminal history, if any, of the defendant.
Assistant United States Attorney Charles A. Eberle is prosecuting this case on behalf of the government.
The Bureau of Alcohol, Tobacco, Firearms and Explosives and the Pittsburgh Bureau of Police conducted the investigation that led to the prosecution of Jaamayl Crosby.
Federal Jury Convicts Tyler James Schaeffer on Firearms ChargesRead the Press Release
Convictions linked to a series of robberies and drug trafficking
KNOXVILLE, Tenn. – On May 17, 2013, following a three-day trial in U.S. District Court, Knoxville, Tenn., a jury convicted Tyler James Schaeffer, 22, of Seymour, Tenn., of three counts of brandishing a firearm during and in relation to three robberies of businesses engaged in interstate commerce (Hobbs Act robbery) and possession of a firearm in furtherance of a methylone trafficking conspiracy.
Schaeffer’s sentencing is set for 10:00 a.m., October 9, 2013, in U.S. District Court in Knoxville, Tenn. He faces a sentence of at least 82 years and up to life on the firearms convictions, and up to an additional 160 years in prison on the robbery and drug trafficking convictions. There is no parole in the federal system.
These latest convictions stem from a series of armed robberies in Knox, Sevier, and Blount Counties, between July 26, 2010 and September 14, 2012. Schaeffer previously pleaded guilty to all of the robberies, a total of seven, as well as the methylone trafficking conspiracy. Those pleas were accepted by the Honorable Thomas A. Varlan, Chief U.S. District Judge, on April 30, 2013. Chief Judge Varlan also presided over Schaeffer’s trial.
Schaeffer brandished a knife in at least two of the robberies, and firearms in four of the robberies. Based on the proof available at the time of trial, the United States pursued firearms charges in connection with three of the seven robberies, as well as the methylone trafficking conspiracy. The jury convicted Schaeffer of each of those four firearms-related counts.
Jerel Bray-Sean Johnson, 20, of Knoxville, Tenn., and Rodney James Ruffin, 22, of Sevierville, Tenn., previously pleaded guilty to related robbery, drug trafficking and firearms charges, and did not go to trial with Schaeffer.
According to evidence presented at trial, Schaeffer brandished handguns when he robbed local stores, restaurants, and drug traffickers, including a revolver he obtained on the black market. Evidence detailed how Schaeffer obtained the black market revolver; how he used it in connection with two robberies and a methylone conspiracy; and ultimately, how the revolver was discarded in a south Knoxville storm drain days after an automobile collision involving Schaeffer on September 16, 2012. The Federal Bureau of Investigation (FBI) and the Knoxville Police Department (KPD) recovered the firearm on April 9, 2013, just over a month before trial was to commence. The evidence also included testimony about Schaeffer’s trafficking of methylone on the University of Tennessee (UT) campus following the UT/Florida football game on September 15, 2012, while armed with the revolver. Methylone, a Schedule I controlled substance, is a “party” drug sometimes referred to as “Molly.” Schaeffer took the stand and testified that he used “fake” guns in the robberies and denied ever using the revolver recovered from the storm drain.
Law enforcement agencies participating in the joint investigation which led to indictment and subsequent conviction of Tyler James Schaeffer included the FBI’s Safe Streets Task Force, KPD, Office of District Attorney General James B. Dunn, Tennessee Highway Patrol, Knox County Sheriff’s Office, Sevier County Sheriff’s Office, Sevierville Police Department, Blount County Sheriff’s Office, and Alcoa Police Department. Assistant U.S. Attorneys Kelly A. Norris and Tracy L. Stone represented the United States at trial.
Following sentencing on October 9, 2013, Schaeffer will be returned to Sevier County authorities to stand trial for a deadly automobile collision which occurred on September 16, 2012, as well as a burglary charge.
Federal Inmate Pleads Guilty to Escaping from Renewal CenterRead the Press Release
PITTSBURGH, Pa. – A Pittsburgh resident pleaded guilty to escaping from federal custody while serving a prison sentence, United States Attorney David J. Hickton announced today.
Tyrenzo Morton, 23, pled guilty before United States District Judge Alan N. Bloch.
On December 23, 2012, Morton escaped from federal custody at Renewal, Inc., in Pittsburgh, Pennsylvania, where he was serving the remaining portion of a federal prison sentence.
Sentencing is scheduled to occur on Aug. 22, 2013, at 11:30 a.m. The law provides for a maximum total sentence of up to five years in prison, a fine of up to $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, if any, of the defendant.
Assistant United States Attorney Craig W. Haller is prosecuting this case on behalf of the United States.
The United States Marshals Service and the Pittsburgh Bureau of Police investigated this case leading to the capture and conviction of Morton.
Fayette Co. Pill Dealer Pleads Guilty to Federal Drug ChargesRead the Press Release
Police found 17 firearms, hundreds of marijuana plants at defendant’s residence
CHARLESTON, W.Va. – A Fayette County pill dealer who sold approximately 250 powerful prescription painkillers over a two-year period pleaded guilty today to federal drug charges, announced U.S. Attorney Booth Goodwin. Vernon Peters III, 35, of Kincaid, Fayette County, W.Va., pleaded guilty today in federal court in Charleston to distribution of oxycodone. On March 20, 2012, Peters sold three 30-milligram oxycodone tablets to a police informant. The pill transaction occurred at the defendant’s Fayette County residence.
On March 19, 2012, members of the West Virginia State Police seized approximately 17 firearms and 236 marijuana plants from the defendant’s residence. A number of firearms at the residence were located in close proximity to the marijuana plants.
In total, Peters illegally sold approximately 250 30-milligram oxycodone pills in and around Fayette County.
Peters faces up to 20 years in prison and a $1 million fine when he is sentenced on August 22, 2013 by United States District Judge John T. Copenhaver, Jr.
The West Virginia State Police 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.
Executive Arrested for Child PornographyRead the Press Release
SAN JUAN, Puerto Rico —U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) special agents, and officers assigned to the Puerto Rico Crimes Against Children Task Force (PRCACTF) arrested Reinaldo Díaz-Camacho, aka “Rei Díaz”, 48, from Moca, PR, an executive at Pfizer Pharmaceutical, for production of child pornography, announced Rosa Emilia Rodríguez-Vélez, United States Attorney for the District of Puerto Rico.
On May 6, 2013, Homeland Security Investigations (HSI), San Juan, Puerto Rico, Cyber Crimes Group (CCG) received information from the Puerto Rico Police Department (PRPD), Sexual Crimes Division (SCD) in Fajardo, PR regarding an adult male who was engaging in sexually explicit conversations with a 16 year-old male minor via Facebook.
On that same date, the victim’s mother was interviewed by HSI Agents. During the interview, she explained that earlier in the day she had seen a sexually explicit conversation between her son and Díaz-Camacho on the minor’s cell phone. The forensic examination of the minor’s cell phone revealed the presence of sexually explicit images. The minor had received sexually explicit images from Díaz-Camacho via Facebook and text messages.
After receiving consent from John Doe’s mother, an ICE-HSI Special Agent assumed the identity of the minor on Facebook and continued the conversation with Díaz-Camacho. During the conversation via Facebook, Díaz-Camacho requested that the minor victim send him nude images of himself.
Diaz-Camacho was brought before U.S. Magistrate Bruce McGiverin for his initial appearance, whereupon he was ordered temporarily detained in the Metropolitan Detention Center in Guaynabo awaiting the outcome of his case. If convicted, he faces a mandatory minimum sentence of 15 years incarceration and a possible maximum statutory sentence of 30 years incarceration. The case is being prosecuted by Assistant U.S. Attorney Marshal D. Morgan.
“The U.S. Department of Justice, through its Project Safe Childhood, will continue prosecuting sexual predators of minors,” said United States Attorney for the District of Puerto Rico, Rosa Emilia Rodríguez-Vélez. “The US Attorney’s Office, along with law enforcement agencies in Puerto Rico, will continue to track down these criminals, arrest them and bring them to justice,” said US Attorney Rosa Emilia Rodríguez-Vélez.
“At HSI, we have always said that the parents are the first line of defense in protecting our children from online predators,” said Ángel Meléndez, special agent in charge of HSI San Juan. “If it had not been for the proactive approach of this mother, this minor could still be a victim of this unscrupulous man. Child predators should take note that HSI will not rest until we identify you, arrest you and prosecute you.”
In response to the need for an island-wide approach to fighting the escalation of predatory crimes against children, HSI San Juan partnered with members of local, state and federal law enforcement, as well as local and state government officials and community leaders, to form PRCACTF in June 2011.Through PRCACTF, local, state and federal law enforcement agencies work together with local and state government agencies to effectively pool their resources to jointly investigate all crimes against children in Puerto Rico. Through the task force, law enforcement officers are encouraged to share evidence, ideas, and investigative and forensic tools to ensure the most successful prosecutions possible. As such, PRCACTF allows law enforcement to speak with one unified voice in defense of the children of Puerto Rico.
Suspected child sexual exploitation or missing children may be reported to the National Center for Missing & Exploited Children, an Operation Predator partner, via its toll-free 24-hour hotline, 1-800-843-5678.
Eighth Individual Sentenced in Connection with Costa Rica-Based Business Opportunity Fraud VenturesRead the Press Release
Sean Rosales, a dual United States and Costa Rican citizen, was sentenced today in connection with a series of business opportunity fraud ventures based in Costa Rica, the Justice Department and the U.S. Postal Inspection Service announced today. Rosales was sentenced by U.S. District Court Judge Ursula M. Ungaro in Miami to 97 months in prison and 5 years supervised release. Rosales was also ordered to pay more than $7.3 million in restitution.
On March 20, Rosales pled guilty to one count of an indictment pending against him, charging conspiracy to commit mail and wire fraud. Rosales was arrested in Chicago, Illinois late last year following his indictment by a federal grand jury in Miami on Nov. 29, 2011. The indictment alleged that Rosales and his co-conspirators purported to sell beverage and greeting card business opportunities, including assistance in establishing, maintaining and operating such businesses. The charges form part of the government’s continued nationwide crackdown on business opportunity fraud.
Prior to Rosales’ sentencing today, eleven other individuals were charged in connection with business opportunity fraud ventures based in Costa Rica. Rosales is the eighth of those individuals to be convicted and sentenced in the United States.
“Many Americans dream of owning and operating their own small business, but fraud schemes such as the one perpetrated by this defendant can turn that dream into a nightmare,” said Stuart F. Delery, Acting Assistant Attorney General for the Justice Department’s Civil Division. “The Department of Justice will continue to be aggressive in prosecuting those who take advantage of innocent, hardworking Americans through business opportunity fraud.”
Beginning in May 2005, Rosales and his coconspirators fraudulently induced purchasers in the United States to buy business opportunities in USA Beverages Inc., Twin Peaks Gourmet Coffee Inc., Cards-R-Us Inc., Premier Cards Inc., The Coffee Man Inc., and Powerbrands Distributing Company. The business opportunities cost thousands of dollars each, and most purchasers paid at least $10,000. Each company operated for several months, and after one company closed, the next opened. The various companies used bank accounts, office space and other services in the Southern District of Florida and elsewhere.
Rosales, using aliases, participated in a conspiracy that used various means to make it appear to potential purchasers that the businesses were located entirely in the United States. In reality, Rosales operated out of Costa Rica to fraudulently induce potential purchasers in the United States to buy the purported business opportunities.
The companies made numerous false statements to potential purchasers of the business opportunities, including that purchasers would likely earn substantial profits; that prior purchasers of the business opportunities were earning substantial profits; that purchasers would sell a guaranteed minimum amount of merchandise, such as greeting cards and beverages; and that the business opportunity worked with locators familiar with the potential purchaser’s area who would secure or had already secured high-traffic locations for the potential purchaser’s merchandise stands. Potential purchasers also were falsely told that the profits of some of the companies were based in part on the profits of the business opportunity purchasers, thus creating the false impression that the companies had a stake in the purchasers’ success and in finding good locations.
The companies employed various types of sales representatives, including fronters, closers and references. A fronter spoke to potential purchasers when the prospective purchasers initially contacted the company in response to an advertisement. A closer subsequently spoke to potential purchasers to finalize deals. References spoke to potential purchasers about the financial success they purportedly had experienced since purchasing one of the business opportunities. The companies also employed locators, who were typically characterized by the sales representatives as third parties who worked with the companies to find high-traffic locations for the prospective purchaser's merchandise display racks.
Rosales, using aliases, was a fronter for USA Beverages, a fronter and reference for Twin Peaks, a fronter and reference for Cards-R-Us, a fronter, locator and reference for Premier Cards, a locator for Coffee Man, and a locator for Powerbrands.
Each of the companies was registered as a corporation and rented office space to make it appear to potential purchasers that its operations were fully in the United States. USA Beverages was registered as a Florida and New Mexico corporation and rented office space in Las Cruces, N.M. Twin Peaks was registered as a Florida and Colorado corporation and rented office space in Fort Collins, Colo., and Cards-R-Us was registered as a Nevada corporation and rented office space in Reno, Nev. Premier Cards was registered as a Colorado and Pennsylvania corporation and rented office space in Philadelphia, and The Coffee Man was registered as a Colorado corporation and rented office space in Denver. Powerbrands was registered as a Wisconsin corporation and rented office space in Glendale, Wisconsin and Palm Beach Gardens, Fla.
“Fraudulent business opportunity sellers must realize that financial fraud victimizing Americans will be prosecuted vigorously, even if the fraudsters conduct their operations from abroad,” said Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida. “Increased international law enforcement cooperation eliminates safe havens for those who seek to cheat Americans from overseas.”“The success of this investigation shows that the U.S. Postal Inspection Service is committed to working with the Department of Justice and our law enforcement partners, both foreign and domestically, to protect Americans from the predatory nature of business opportunity frauds,” said Ronald Verrochio, U.S. Postal Inspector in Charge, Miami Division.
Acting Assistant Attorney General Delery commended the investigative efforts of the Postal Inspection Service. The case was being prosecuted by Assistant Director Jeffrey Steger and trial attorney Alan Phelps with the U.S. Department of Justice Consumer Protection Branch.
Eighth Individual Sentenced in Connection with Costa Rica-Based Business Opportunity Fraud VenturesRead the Press Release
Operation Had Connections to Florida, New Mexico, Colorado, Nevada, Wisconsin and Pennsylvania
Sean Rosales, a dual United States and Costa Rican citizen, was sentenced today in connection with a series of business opportunity fraud ventures based in Costa Rica, the Justice Department and the U.S. Postal Inspection Service announced today. Rosales was sentenced by U.S. District Court Judge Ursula M. Ungaro in Miami to 97 months in prison and 5 years supervised release. Rosales was also ordered to pay more than $7.3 million in restitution.
On March 20, Rosales pled guilty to one count of an indictment pending against him, charging conspiracy to commit mail and wire fraud. Rosales was arrested in Chicago, Illinois late last year following his indictment by a federal grand jury in Miami on Nov. 29, 2011. The indictment alleged that Rosales and his co-conspirators purported to sell beverage and greeting card business opportunities, including assistance in establishing, maintaining and operating such businesses. The charges form part of the government’s continued nationwide crackdown on business opportunity fraud.
Prior to Rosales’ sentencing today, eleven other individuals were charged in connection with business opportunity fraud ventures based in Costa Rica. Rosales is the eighth of those individuals to be convicted and sentenced in the United States.
“Fraudulent business opportunity sellers must realize that financial fraud victimizing Americans will be prosecuted vigorously, even if the fraudsters conduct their operations from abroad,” said Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida. “Increased international law enforcement cooperation eliminates safe havens for those who seek to cheat Americans from overseas.”
“Many Americans dream of owning and operating their own small business, but fraud schemes such as the one perpetrated by this defendant can turn that dream into a nightmare,” said Stuart F. Delery, Acting Assistant Attorney General for the Justice Department’s Civil Division. “The Department of Justice will continue to be aggressive in prosecuting those who take advantage of innocent, hardworking Americans through business opportunity fraud.”
Beginning in May 2005, Rosales and his coconspirators fraudulently induced purchasers in the United States to buy business opportunities in USA Beverages Inc., Twin Peaks Gourmet Coffee Inc., Cards-R-Us Inc., Premier Cards Inc., The Coffee Man Inc., and Powerbrands Distributing Company. The business opportunities cost thousands of dollars each, and most purchasers paid at least $10,000. Each company operated for several months, and after one company closed, the next opened. The various companies used bank accounts, office space and other services in the Southern District of Florida and elsewhere.
Rosales, using aliases, participated in a conspiracy that used various means to make it appear to potential purchasers that the businesses were located entirely in the United States. In reality, Rosales operated out of Costa Rica to fraudulently induce potential purchasers in the United States to buy the purported business opportunities.
The companies made numerous false statements to potential purchasers of the business opportunities, including that purchasers would likely earn substantial profits; that prior purchasers of the business opportunities were earning substantial profits; that purchasers would sell a guaranteed minimum amount of merchandise, such as greeting cards and beverages; and that the business opportunity worked with locators familiar with the potential purchaser’s area who would secure or had already secured high-traffic locations for the potential purchaser’s merchandise stands. Potential purchasers also were falsely told that the profits of some of the companies were based in part on the profits of the business opportunity purchasers, thus creating the false impression that the companies had a stake in the purchasers’ success and in finding good locations.
The companies employed various types of sales representatives, including fronters, closers and references. A fronter spoke to potential purchasers when the prospective purchasers initially contacted the company in response to an advertisement. A closer subsequently spoke to potential purchasers to finalize deals. References spoke to potential purchasers about the financial success they purportedly had experienced since purchasing one of the business opportunities. The companies also employed locators, who were typically characterized by the sales representatives as third parties who worked with the companies to find high-traffic locations for the prospective purchaser's merchandise display racks.
Rosales, using aliases, was a fronter for USA Beverages, a fronter and reference for Twin Peaks, a fronter and reference for Cards-R-Us, a fronter, locator and reference for Premier Cards, a locator for Coffee Man, and a locator for Powerbrands.
Each of the companies was registered as a corporation and rented office space to make it appear to potential purchasers that its operations were fully in the United States. USA Beverages was registered as a Florida and New Mexico corporation and rented office space in Las Cruces, N.M. Twin Peaks was registered as a Florida and Colorado corporation and rented office space in Fort Collins, Colo., and Cards-R-Us was registered as a Nevada corporation and rented office space in Reno, Nev. Premier Cards was registered as a Colorado and Pennsylvania corporation and rented office space in Philadelphia, and The Coffee Man was registered as a Colorado corporation and rented office space in Denver. Powerbrands was registered as a Wisconsin corporation and rented office space in Glendale, Wisconsin and Palm Beach Gardens, Fla.
“The success of this investigation shows that the U.S. Postal Inspection Service is committed to working with the Department of Justice and our law enforcement partners, both foreign and domestically, to protect Americans from the predatory nature of business opportunity frauds,” said Ronald Verrochio, U.S. Postal Inspector in Charge, Miami Division.
Acting Assistant Attorney General Delery commended the investigative efforts of the Postal Inspection Service. The case was being prosecuted by Assistant Director Jeffrey Steger and trial attorney Alan Phelps with the U.S. Department of Justice Consumer Protection Branch.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
East St. Louis Man Sentenced for Firearm OffenseRead the Press Release
Akai J. Aikens, 29, of East Saint Louis, IL, was sentenced on May 20, 2013, in federal district court, in East St. Louis, IL, on one count of unlawful possession of a firearm by a previously convicted felon, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today.
Aikens was sentenced to 48 months’ in prison, three years supervised release, and ordered to pay a $100 special assessment. Aikens pled guilty on December 11, 2012. He also agreed to forfeit the firearm. The charges stem from an October 5, 2012, incident when a law enforcement officer on patrol in East St. Louis, observed a vehicle traveling with numerous objects hanging from the review mirror, obstructing the driver’s view. The officer attempted to stop the vehicle, when it abruptly swerved into a bar and car wash parking lot. Aikens exited the car from the passenger side, running behind the car wash. After repeated demands by the officer for him to return and threats to release a canine, Aikens emerged from behind the building. The canine was released to search the area, locating a Glock Model 22c.40 caliber semi-automatic pistol behind the car wash moments later.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Illinois State Police Department and prosecuted by Assistant United States Attorney Daniel T. Kapsak.
East St. Louis Man Sentenced for Firearm OffenseRead the Press Release
Joseph L. Edwards, 26, of East St. Louis, IL, was sentenced in federal district court on May 20, 2013, in East St. Louis, IL, to 30 months’ in prison, to be followed by three years’ supervised release, a $100 special assessment, and a $100 fine, for unlawful possession of a firearm by a previously convicted felon, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today.
At his plea, Edwards admitted that on October 25, 2011, he possessed a firearm and ammunition after having been previously convicted on August 21, 2009, of a state felony offense. Court proceedings revealed that law enforcement officials recovered one Smith and Wesson, .38 Special Caliber, five-shot revolver and four .38 special cartridges at his residence in East St. Louis, Illinois, after investigating an anonymous tip regarding the firing of guns at the home.
This case resulted from the efforts of the WAVE (Working Against Violent Elements) Task Force, which focuses its efforts on combating violent crime in East St. Louis, Washington Park, and surrounding communities. The WAVE Task Force receives financial support through the Department of Justice’s Project Safe Neighborhoods (PSN) initiative, a nationwide federal program which endeavors to address gun-related violence.
This investigation was conducted by the WAVE Task Force, and the Federal Bureau of Investigation. This case was prosecuted by Assistant United States Attorney Daniel T. Kapsak.