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1 July 2013
Hotel Financier Pleads Guilty to Conspiring to Bribe A Bank Loan OfficerRead the Press Release
ATLANTA - Guy Mitchell has pleaded guilty to a charge of conspiring to commit bank fraud and to pay bribes to an officer of a financial institution.
“Mitchell used millions of improperly obtained loan proceeds to fund a lavish lifestyle,” said United States Attorney Sally Quillian Yates. “His actions corrupted the lending process and jeopardized the safety and soundness of Integrity Bank, which failed and was taken over by the FDIC. Today, Mitchell’s plea of guilty brings this bank fraud investigation and prosecution to a just conclusion.”
“The Federal Deposit Insurance Corporation Office of Inspector General is pleased to join our law enforcement colleagues in announcing Mr. Mitchell’s guilty plea,” said Jason Moran, Special Agent in Charge, FDIC Atlanta Region. “When major borrowers conspire with bank insiders to engage in fraudulent activities that contribute to institution failures, all parties must be brought to justice. The FDIC OIG is committed to ensuring the safety and soundness of banks throughout the country and protecting the Deposit Insurance Fund against such criminal behavior.”
According to United States Attorney Yates, the charges and other information presented in court: Mitchell borrowed more than $40 million from the now-failed Integrity Bank in 2005 and 2006, allegedly to finance his interests in various hotels around the country. One of these loans was to acquire and renovate the Casa Madrona Hotel, a luxury property overlooking the water in Sausalito, California. During that time, Mitchell was bribing Douglas Ballard, a former loan officer at Integrity, with hundreds of thousands of dollars. Although Mitchell did use some of the money he received from Integrity for hotel purposes, he never performed any renovations on the Casa Madrona. Instead, he used loan draws to buy a private island in the Bahamas, to travel by private jet, and to pay for Miami Heat tickets, fancy jewelry, expensive cars, and a mansion in Coconut Grove. Mitchell, the bank’s largest borrower, eventually defaulted on his loans, contributing to Integrity Bank’s failure.
Douglas Ballard previously pleaded guilty to conspiracy and tax evasion. Additionally, Todd Foster, another Integrity employee, pleaded guilty to securities fraud.
Mitchell, 53, of Miami, Fl., could receive a maximum sentence of 5 years in prison and a fine of up to $250,000, or twice the greater of the gain or loss. In determining the actual sentence, the Court will consider the United States Sentencing Guidelines, which are not binding but provide appropriate sentencing ranges for most offenders.
Sentencing is scheduled for October 10, 2013, at 10:00 a.m. before United States District Judge Julie E. Carnes.
This case is being investigated by the Federal Bureau of Investigation and the Federal Deposit Insurance Corporation, Office of Inspector General.
Assistant United States Attorneys Douglas W. Gilfillan and Christopher C. Bly are prosecuting the case.
Today’s announcement 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 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.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the HomePage for the U.S. Attorney’s Office for the Northern District of Georgia is www.justice.gov/usao/gan.
Highlands Ranch Man Found Guilty of Human Trafficking and Other OffensesRead the Press Release
DENVER – Kizzy Kalu, age 49, of Highlands Ranch, was found guilty today of 89 counts of mail fraud, visa fraud, human trafficking and money laundering by a federal jury, the U.S. Attorney’s Office for the District of Colorado announced. The four week jury trial was before Chief U.S. District Court Judge Marcia S. Krieger. The jury deliberated for approximately a day and a half before reaching its verdicts. Kalu was found not guilty of 6 counts. Kalu, who was in custody during the trial, was remanded into custody following the reading of the verdict. The defendant is scheduled to be sentenced by Chief Judge Krieger on September 23, 2013 at 9:00 a.m.
Prior to trial, co-defendant, Philip Langerman, age 78, of McDonough, Georgia, pled guilty for his role in the criminal scheme. A sentencing date has not yet been scheduled for Langerman.
Kalu was indicted by a federal grand jury in Denver on March 1, 2012. A superseding indictment was obtained on February 12, 2013. The jury trial started on June 3, 2013. Kalu was found guilty of a vast majority of counts today, July 1, 2013.
According to the indictment and evidence presented at trial, Kalu and Langerman were involved in a scheme making false representations to foreign nationals, to the State of Colorado, to the United States of America, and others for the purpose of obtaining money. Kalu and Langerman provided false information to the U.S. government to obtain the apparent lawful presence in the U.S. of foreign nationals. The foreign nationals then worked for nursing homes and other long-term care facilities. Those facilities paid Kalu’s company, Foreign Healthcare Professionals Group, for the hours the foreign nationals worked. Kalu retained approximately 40% of the money earned from the labor of the foreign nationals.
Among the false information provided to the U.S. government was that the foreign nationals would be employed by Adam University as nurse instructor supervisors (which were considered “specialty occupations” under U.S. immigration law and regulations) and earn more than the prevailing wage so as not to undermine the wages of U.S. workers. Adam University existed largely in name only and had no genuine need for nurse instructor supervisors. The foreign nationals were granted H-1B visas based on fraudulent representations permitting them to be employed as nurse instructors/supervisors by the largely nonexistent Adam University. Rather than working in specialty occupations, the foreign nationals worked as nurses earning below the prevailing wage.
Kalu also made false representations to the foreign nationals, including that they would have full time work available in Colorado. Upon their arrival, they learned that they would have to interview for positions and would not be employed by Adam University in a clinical setting. Some were unable to find full time work. Some learned that Kalu would not allow them to travel freely. Kalu threatened to cause their deportation if the foreign nationals did not provide him their labor and services. As Kalu’s scheme evolved, Kalu directed that the foreign nationals find work on their own and be paid directly by the healthcare facilities. However, Kalu demanded that the foreign nationals pay him between $800 to $1,200 a month or face deportation. Kalu threatened to notify the U.S. Department of Homeland Security and have their visas canceled if they did not pay him the money he demanded. Kalu used debt to help keep the foreign nationals with him. Many had gone deeply into debt to pay him for assistance in obtaining the visas. In addition, Kalu required the foreign nationals to sign employment contracts that provided they would owe Kalu $25,000 if they left his employment.
Kalu was convicted of 19 counts of commercial carrier/mail fraud, which carries a penalty of not more than 20 years in federal prison, per count. He was convicted of 3 counts of visa fraud, which carries a penalty of not more than 10 years in federal prison, per count. He was convicted of 9 counts of trafficking in forced labor, which carries a penalty of not more than 20 years in federal prison, per count. He was found guilty of 13 counts of forced labor, which carries a penalty of not more than 20 years per count. He was found guilty of 15 counts of encouraging and inducing aliens to enter the U.S., which carries a penalty of not more than 10 years in prison, per count. Kalu was convicted of 30 counts of money laundering, which carries a penalty of not more than 20 years in prison per count. Each of the 89 counts also carries a fine of up to $250,000.
“We don’t tolerate lying to the United States,” said First Assistant U.S. Attorney Bob Troyer. “And we don’t tolerate victimizing laborers and cheating folks out of their hard-earned money. Today’s guilty verdict on 89 criminal counts confirms these simple truths, and it comes as a direct result of the determination and skill of the prosecution team and the talented agents from the State Department’s Diplomatic Security Service, ICE Homeland Security Investigations, and the U.S. Department of Labor’s Office of the Inspector General, Office of Labor Racketeering and Fraud Investigations.”
“Today’s verdict reflects Diplomatic Service’s commitment to aggressively protect U.S. borders and the integrity of our travel document and labor laws,” said Michael Bayer, Special Agent in Charge of the Department of State’s Diplomatic Security Service. “Diplomatic Security is committed to working with the U.S. Attorney’s Office, DHS-HSI, and other Law Enforcement Agencies around the world to investigate allegations of Passport and visa fraud, trafficking in humans, forced labor and other associated offenses, and to bring those who commit these crimes to justice.”
“Homeland Security Investigations aggressively investigates human trafficking, which is modern-day slavery,” said Kumar Kibble, special agent in charge of HSI in Denver. “These human traffickers use force, fraud and coercion to obtain free or cheap labor from their victims so the traffickers can maximize their profits.”
This case was investigated by the Department of State’s Diplomatic Security Service, ICE Homeland Security Investigations, and the U.S. Department of Labor’s Office of the Inspector General, Office of Labor Racketeering and Fraud Investigations. Further critical support was provided by U.S. Citizenship and Immigration Services, Office of Fraud Detection and National Security and the Douglas County Sheriff’s Office.
Kalu was prosecuted by Special Assistant U.S. Attorney Beth Gibson and Assistant U.S. Attorney Robert Brown.
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Haughton Man Sentenced to 10 Years in Prison for Possessing Child PornographyRead the Press Release
SHREVEPORT, La. – U.S. Attorney Stephanie A. Finley announced today that John James William Bonacci Sr., 70, of Haughton, La., was sentenced before U.S. District Judge Elizabeth E. Foote to 10 years in prison and a lifetime of supervised release for possessing child pornography.
According to court documents, authorities searched Bonacci’s home on Feb. 17, 2012 in connection with a child molestation complaint. Before a search of his home was conducted, Bonacci admitted to viewing pornography for many years. Authorities found more than 1,100 videos and 90 photographs depicting child pornography. Some of the videos contained images of children under 12 years of age and some had children as young as one year. Bonacci pleaded guilty on Oct. 29, 2012.
The FBI, the Northwest Louisiana Internet Crimes Against Children Task Force, Bossier Parish District Attorney’s Office and the Bossier Parish Sheriff’s Office investigated the case. Assistant U.S. Attorney Earl M. Campbell prosecuted the case.
This case is part of Project Safe Childhood, a U.S. Department of Justice launched nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. 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.
Tips or other information can also be submitted to the FBI at tips.fbi.gov. Tips may be submitted anonymously. The Shreveport FBI office number is (318) 861-1890.
Former Treasurer of Aldie Fire Department Pleads Guilty to Federal Charge for Embezzling over $600,000Read the Press Release
ALEXANDRIA, Va. – Jerry Keith Cromer, Jr., 79, of Gainesville, Va., pleaded guilty today to theft from an organization receiving federal funds.
Neil H. MacBride, United States Attorney for the Eastern District of Virginia; Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office; and Colonel W. Steven Flaherty, Virginia State Police Superintendent, made the announcement after the plea was accepted by United States District Judge Gerald Bruce Lee.
Cromer faces a maximum penalty of ten years in prison, a $250,000 fine, and full restitution when he is sentenced on October 11, 2013.
According to the statement of facts filed with the plea agreement, Cromer served as treasurer of the Aldie Volunteer Fire Department from 1995 through 2012. The members of the fire department elected Cromer to this post. In the statement of facts, Cromer admitted that from 2000 to 2012 he intentionally embezzled and converted to his own use approximately $645,000 that belonged to the Aldie Volunteer Fire Department. He used these fire department funds to satisfy his personal mortgage payments, pay personal credit card bills, repair his automobile, and for other personal expenditures. In addition to local community donations, the Aldie Volunteer Fire Department receives funding from Loudoun County and the federal government.
This case was investigated by the Federal Bureau of Investigation’s Washington Field Office and the Virginia State Police. Assistant United States Attorney Mark D. Lytle is prosecuting the case on behalf of the United States.
The FBI encourages anyone with information regarding similar allegations of fraud or corruption to call the FBI’s Northern Virginia Public Corruption tip line at (703) 686-6225.
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.Former Technology Company Insiders Sentenced in Manhattan Federal Court for Insider TradingRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that MARK ANTHONY LONGORIA, a former employee of Advanced Micro Devices (“AMD”) and a consultant for the expert networking firm Primary Global Research (“PGR”), and WALTER SHIMOON, a former employee of Flextronics International, Ltd. (“Flextronics”) and also a consultant for PGR, were each sentenced today to time served plus two years of supervised release for their participation in insider trading schemes during which they provided material, nonpublic information (“Inside Information”) obtained from their employers to certain PGR clients who were money managers. In addition, SHIMOON also provided Inside Information to John Kinnucan, who operated a research firm and then provided the information to certain money managers.
LONGORIA pled guilty pursuant to a cooperation agreement in June 2011 to one count of conspiracy to commit securities fraud, one count of conspiracy to commit wire fraud, one count of securities fraud, and one count of false statements. SHIMOON pled guilty pursuant to a cooperation agreement in July 2011 to two counts of conspiracy to commit securities and wire fraud and one count of securities fraud. LONGORIA and SHIMOON were sentenced today in Manhattan federal court by U.S. District Judge Jed S. Rakoff.
According to the Informations and statements made during the defendants’ plea proceedings and sentencings:
From 2007 and 2010, LONGORIA worked as a supply chain manager at AMD, a company that produced microprocessor chips. While employed at AMD, LONGORIA engaged in consultation calls with PGR employees and clients. For two quarters in 2009, he provided top line revenue and gross margin information for AMD during some of these calls. Throughout the period, he also routinely provided average sales prices and product sales figures for all of the company’s product lines. For example, between July 2008 and November 2009, LONGORIA provided AMD Inside Information to a hedge fund located in New York, New York (the “New York Hedge Fund”), that executed securities transactions, based in whole or in part, on LONGORIA’s information. The New York Hedge Fund earned approximately $2 million in profits using LONGORIA’s information. In 2006, in connection with a separate but related scheme, LONGORIA also provided confidential business information concerning the business of Western Digital to PGR employees and its clients in his capacity as a PGR consultant.
From 2008 to 2010, SHIMOON worked as a Director of Business Development at Flextronics, a technology company that designed, engineered and manufactured electronics products. During that time, SHIMOON obtained confidential information, including Inside Information, concerning Flextronics; customers of Flextronics, including Apple, Inc. (“Apple”); and suppliers of Flextronics, including OmniVision Technologies, Inc. (“OVTI”). SHIMOON then provided this information to employees and clients of PGR and to Kinnucan. For example, SHIMOON provided Inside Information concerning OVTI’s revenues to an employee of a hedge fund located in White Plains, New York. The hedge fund subsequently executed securities transactions in OVTI and earned profits of over $750,000. On another occasion, SHIMOON disclosed to Kinnucan, and, separately, to a cooperating witness who claimed to represent a PGR client, that Apple would be launching a new iPhone in 2010 that would contain two cameras. The cameras would give iPhone users the ability to videoconference, which was a significant enhancement over prior generations of the iPhone. SHIMOON knew that disclosure of this and other information violated fiduciary duties he owed to Flextronics, and/or violated non-disclosure agreements executed between Flextronics and Apple. PGR paid SHIMOON approximately $18,000 for the consultation services he provided to PGR clients from mid-2008 to 2010, and Kinnucan paid SHIMOON approximately $27,500 for providing confidential information, including Inside Information.
In addition to the terms of supervised release imposed, LONGORIA, 46, of Round Rock, Texas, was sentenced to forfeiture of $170,000, and a $400 special assessment. SHIMOON, 41, of San Diego, California, was also sentenced to forfeiture of $45,500, and a $300 special assessment.
Mr. Bharara praised the investigative work of the Federal Bureau of Investigation. He also thanked the U.S. Securities and Exchange Commission.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force, on which Mr. Bharara serves as a Co-Chair of the Securities and Commodities Fraud Working Group. 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.
The cases are being handled by the Office's Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Antonia M. Apps and Katherine Goldstein are in charge of the prosecutions.
Former Ripley Police Officer Pleads Guilty to Possession of Child PornographyRead the Press Release
George Michael Puskas II admits having sexual relationship with a minor
CHARLESTON, W.Va. – A 31-year-old former police officer pleaded guilty today to possession of child pornography, announced U.S. Attorney Booth Goodwin. George Michael Puskas II, of Ripley, entered into a guilty plea in federal court in Charleston.
Puskas established a sexual relationship with a then 16-year-old minor in March 2010. At the time of the relationship, Puskas produced images and a video of the minor having sex or performing sex acts. Puskas produced a video of child pornography using a police department-issued digital camera. Puskas also used a cellphone to create images of child pornography. On September 7, 2011, Puskas possessed between 10 and 150 images of child pornography.
Puskas was employed as a police officer with the Ripley Police Department from June 2008 until May 2012. The defendant was an officer with the department at the time of the child pornography violation. Puskas resigned from the Ripley Police Department in May 2012.
U.S. Attorney Booth Goodwin said, “Mr. Puskas swore an oath to protect and serve the community. He obviously failed to uphold that oath. Pedophiles like Mr. Puskas must be held accountable when they commit disgraceful crimes like this one.”
On April 6, 2012, the West Virginia Internet Crimes Against Children Task Force executed a federal search warrant and seized a computer, a flash drive, and other items that Puskas used to produce child pornography. Puskas told police that he produced and possessed images of child pornography.
Puskas also told police that he maintained a relationship with the minor up until the time the individual turned 18 years old. On September 14, 2011, Puskas sent the individual an image that showed the two of them having sex.
Puskas faces up to 10 years in prison and a $250,000 fine when he is sentenced on October 1, 2013 by United States District Judge John T. Copenhaver, Jr.
The West Virginia Internet Crimes Against Children Task Force conducted the investigation. Assistant United States Attorney Lisa Johnston is in charge of the prosecution.
This case was brought as part of U.S. Attorney Goodwin’s ongoing initiative to combat child sexual exploitation and abuse in the Southern District of West Virginia.
Former President of San Diego Customs Brokers Association Sentenced to 37 Months in Prison for Evading Import Taxes on $100 Million in Foreign-Made GoodsFraudulently Imported Goods Included Chinese-made Clothing, Cigarettes and Salmonella-Infected ProduceRead the Press Release
United States Attorney Laura E. Duffy announced that a San Diego businessman and his corporation were sentenced today for their roles in a long-running conspiracy to evade customs duties.
United States District Judge Michael M. Anello sentenced Gerardo Chavez to serve 37 months in prison and his corporation, International Trade Consultants, LLC, to serve 5 years of probation. In addition, Judge Anello ordered that Chavez forfeit real property in Tecate, California, where Chavez maintained his corporate offices. Judge Anello also ordered Chavez to appear for a future restitution hearing, at which Chavez could be ordered to pay millions of dollars in compensation to state and federal taxing authorities.
According to court filings, Chavez was the President of the San Diego Customs Brokers Association, a trade group for licensed professionals in the import-export field. Between 2007 and his arrest in 2012, Chavez and his companies supervised numerous shipments of commercial goods while coordinating one-half billion dollars in trade between merchants in the United States and other countries. Ultimately, Chavez was apprehended after a four month-long wiretap investigation led by special agents with Immigration and Customs Enforcement’s Homeland Security Investigations and assisted by specialized international trade experts and officers from United States Customs and Border Protection. Prior to sentencing, Chavez cancelled his individual, local and national Customs licenses, effectively ending his career as a customs broker.
According to court documents, Chavez’s scheme focused on purchasing large, commercial quantities of foreign-made goods and importing them without paying import taxes, also known as Customs duties. Wholesalers in the United States would procure commercial shipments of, among other things, Chinese-made apparel and Indian-made cigarettes, and arrange for them to be shipped by ocean container to the Port of Long Beach, California. Before the goods entered the United States, conspirators acting at Chavez=s direction would prepare paperwork and database entries indicating that the goods were not intended to enter the commerce of the United States, but instead would be “transshipped” “in-bond” to another country, such as Mexico. By claiming that the goods would not enter the commerce of the United States but instead were just passing through to another country, Chavez and his conspirators tricked Customs officials into believing that no customs duties were owed on the merchandise.
Then, instead of completing the in-bond transshipment, Chavez and his conspirators would hire truck drivers to haul the shipments to warehouses throughout Southern California. Chavez and his conspirators then generated fraudulent paperwork to cover up the scheme. As the conspirators had now effectively imported the goods tax-free, they could in turn sell more merchandise at cheaper pricesCand reap greater profitsCthan their law-abiding competitors, including domestic American manufacturers of the same goods.
According to court filings, Chavez played a crucial role in the scheme, allowing others to use his lucrative customs license as the authority under which commercial shipments fraudulently entered the United States. While delegating much of the day-to-day operations to employees and contractors, Chavez provided crucial support to the conspiracy, advising on how to best deceive federal officers—and even volunteering to erase evidence from conspirators’ computers. Over the course of his scheme, Chavez helped his clients evade at least $18 million in import taxes on more than $100 million in fraudulently imported foreign goods. In addition, Chavez’s coconspirators—using Chavez’s license, expertise and logistical support—succeeded in importing adulterated Mexican food products, as well as produce infected with Salmonella Agona, a disease-causing and potentially life-threatening bacteria.
Chavez’s 37-month sentence also marks the latest in a string of Customs-related prosecutions pursued by the U.S. Attorney’s Office. Chavez’s sentencing came a little more than three weeks after a federal jury returned guilty verdicts on all counts pursued against one of Chavez’s conspirators, Sunil Mirwani and his Los Angeles-based company, M Trade, Inc. Mirwani owned approximately $30 million in Chinese-made textiles that Chavez helped fraudulently import into the United States. During that trial, some of Chavez’s former coconspirators testified under oath about Chavez’s fraudulent methods, noting that one of his contractors had access to equipment capable of forging certain official marks used by United States Customs and Border Protection.
United States Attorney Duffy said: "Our system of international trade relies on the honesty and integrity of all participants; and perhaps most of all, of customs brokers, to ensure that applicable taxes are paid, and that hazardous materials do not cross our country’s borders. Gerardo Chavez abused the trust this country instilled in him, endangering public health and stealing from the United States treasury at a time when we could ill afford it—all for his personal, fraudulent, gain.”
“Today’s sentencing illustrates the importance of DHS components working seamlessly to prevent criminals from exploiting the commercial trade corridor in the San Diego-Tijuana region,” said Derek Benner, special agent in charge for HSI in San Diego. “HSI will continue to prioritize investigations involving suspected Customs fraud in an effort to maintain the highest degree of integrity in cross border trade.”
“CBP is charged with protecting the revenue of the United States. This case demonstrates our commitment to that mission and the importance of working with our federal partners,” said Pete Flores, CBP director of field operations for San Diego. “Joint efforts such as this are crucial to maintaining our nation’s economic security and competitiveness.”
Lisa Malinowski, Special Agent in Charge, U.S. Food and Drug Administration's Office of Criminal Investigations, Los Angeles Field Office, said: “Today’s sentencing demonstrates OCI’s commitment to investigating and holding accountable those who conspire to import adulterated and potentially life-threatening products to the unsuspecting public. OCI will continue to join with our law enforcement counterparts to pursue those who place consumer’s health at risk for financial gain.”
DEFENDANTS Case Number: 12CR3137-MMA Gerard Chavez
International Trade Consultants, LLC SUMMARY OF CHARGESChavez: Count 1: Conspiracy to Defraud the United States and to Commit Offenses against the
United States, in violation of Title 18, United States Code, Section 371.Counts 2-3: Bringing in Goods by Means of False Statements, in violation of Title 18, United
States Code, Section 542.Count 57: Laundering of Monetary Instruments, in violation of Title 18, United States Code, Section 1956(a)(2)(A) and (h).
International Trade Consultants, LLC
INVESTIGATING AGENCIES
Count 1: Conspiracy to Defraud the United States and to Commit Offenses againstImmigration and Customs Enforcement’s Homeland Security Investigations
United States Customs and Border Protection
Internal Revenue Service – Criminal Investigations
Food and Drug Administration
Alcohol and Tobacco Tax and Trade BureauFormer N.J. Turnpike Authority Manager Charged with Stealing More Than $120,000Read the Press Release
NEWARK, N.J. – A former claims manager for the N.J. Turnpike Authority was arrested today for allegedly stealing more than $120,000 from the authority, U.S. Attorney Paul J. Fishman announced.
Gerardo Blasi, 54, of Clifton, N.J., was arrested by special agents of the FBI and charged by complaint with mail fraud and defrauding a state agency that receives federal funds. He is scheduled to make his initial appearance later today before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court.
According to the complaint:
Blasi was a claims manager at the N.J. Turnpike Authority, responsible for negotiating and collecting payments from insurance companies whose insured drivers caused damage to the Turnpike. From April 2011 to June 2013, Blasi allegedly stole more than $120,000 from the authority in several ways, including instructing insurance companies to issue checks payable to fraudulent repair companies. When the checks were mailed to Blasi at the authority, he would arrange to have them cashed and keep a portion of the money for himself.
The fraud count with which Blasi is charged carries a maximum potential penalty of up to 20 years in prison and a $250,000 fine. The theft from a state agency count is punishable by a maximum potential penalty of up to 10 years in prison and a $250,000 fine.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford, with the investigation leading to today’s charges. He also thanked the N.J. Turnpike Authority for its cooperation in the investigation.
The government is represented by Assistant U.S. Attorney David L. Foster of the office’s Special Prosecutions Division in Newark.
The charges and allegations contained in the complaint are merely accusations, and the defendant is considered innocent unless and until proven guilty.
13-275
Blasi Complaint
Former Massachusetts Attorney Charged with Recording Fraudulent Federal Tax Lien Releases and with Bank FraudRead the Press Release
BOSTON – A Braintree man was charged in an indictment unsealed today with tax and bank fraud violations, primarily for recording and attempting to record false and fraudulent federal tax lien releases on properties he owned, and attempting to obtain a bank loan by fraud.
John C. McBride, 64, formerly of Marblehead and Edgartown, was charged in an Indictment with endeavoring to obstruct and impede the due administration of the internal revenue laws, and bank fraud.
The indictment alleges that McBride, a Massachusetts attorney from 1974 to 2007, owned residences in Marblehead and Edgartown, both of which had federal tax liens placed on them by the IRS to secure tax assessments of more than $650,000. The indictment alleges that in early 2008, in connection with his obtaining a $288,000 loan secured by the Marblehead property, McBride caused six false, forged, and fraudulent Certificates of Federal Tax Lien Release to be recorded against that property, knowing that they were in fact false, forged and fraudulent, and not issued by the IRS.
In March 2008, it is alleged that McBride attempted, unsuccessfully, to record two such fraudulent Certificates of Federal Tax Lien Releases against his Edgartown property. Finally, the indictment alleges that McBride attempted to obtain a $387,000 reverse mortgage loan from Bank of America in 2011, to be secured by the Edgartown property. In connection with that loan application, it is alleged that McBride provided false information concerning the liens on that property and about the status of his bankruptcy proceeding, and also caused to be recorded a fraudulent and unauthorized Discharge of Mortgage which purported to discharge a mortgage on the Edgartown property in an amount greater than $700,000. The indictment asserts that Bank of America discovered the fraudulent Discharge before the loan closed, and no funds were disbursed to McBride.
The statutory maximum sentence for the tax offense is three years in prison, followed by one year of supervised release and a $250,000 fine. The statutory maximum sentence for the bank fraud offense is 30 years in prison, to be followed by five years of supervised release and a $1 million fine.
United States Attorney Carmen M. Ortiz; Kevin J. McGlynn, Special Agent in Charge of the U.S. Treasury Inspector General for Tax Administration, Office of Investigations, New York Field Office; William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston; and Richard DesLauriers, Special Agent in Charge of the Federal Bureau of Investigation, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Mark J. Balthazard of Ortiz’s Economic Crimes Unit. The U.S. Attorney’s Office also received assistance from the U.S. Trustee’s Office in Boston.
The details contained in the Indictment are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Former Investment Adviser Charged for Fraud That Caused over $3 Million in LossesRead the Press Release
BOSTON - A Plymouth man was charged today in connection with an investment fraud that caused retired clients over $3 million in losses.
Jeffrey A. Liskov, 42, was charged in an Information with investment adviser fraud.
It is alleged that from November 2008 through August 2010, Liskov defrauded retired advisory clients. In 2008, despite sustaining large personal losses in risky, highly volatile foreign currency exchange trading, Liskov is alleged to have begun advising retired clients with conservative investment goals to allow him to engage in such trading with a portion of their retirement money. Liskov received significant performance fees for conducting this volatile trading on behalf of clients based on short-term gains, without regard to the long-term performance of his trading in the clients’ accounts.
In late 2009, after sustaining large trading losses for long-time clients, Liskov started liquidating securities in the brokerage accounts of these clients and investing the proceeds in foreign currency exchange trading without the clients’ knowledge or authorization. In order to fund these investments behind his clients’ backs, Liskov used white-out correction fluid and other methods to create fraudulent documents that allowed him to open new foreign currency exchange trading accounts and/or to transfer funds from client brokerage accounts to foreign currency exchange trading accounts. This allowed Liskov to secretly engage in additional foreign currency exchange trading on behalf of long-time clients for whom he had already lost significant amounts of money – additional trading from which, in some instances, Liskov was able to pocket large performance fees. The trading Liskov engaged in with the funds from this fraud caused over $3 million in losses to the long-time clients, but garnered Liskov over $200,000 in performance fees.
The statutory maximum offense for investment adviser fraud is five years in prison, followed by three years of supervised release, a $250,000, and restitution.
United States Attorney Carmen M. Ortiz and Richard DesLauriers, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. US Attorney Ortiz expressed appreciation for the significant assistance her office received from the US Securities and Exchange Commission, and also acknowledged the cooperation of the United States Commodity Futures Trading Commission. The case is being prosecuted by Assistant U.S. Attorney Ryan M. DiSantis of Ortiz’s Economic Crimes Unit.
The details contained in the Information are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Former Chief & President of Remington, Virginia Fire Department Indicted Separately for Fraud, EmbezzlementRead the Press Release
ALEXANDRIA, Va. – Douglas G. “Bo” Taylor, age 52, of Remington, Va., the former Chief of the Remington Volunteer Fire & Rescue Department (“RVFD”), was charged in an eight-count indictment by a federal grand jury on allegations related to theft from a program receiving federal funds, wire fraud and filing false individual income tax returns, according to charges unsealed today. In a separate indictment, William Joseph Stuart, age 52, of Bealton, Va., the former President of the RVFD, was also charged with theft from a program receiving federal funds, according to a one-count indictment made public yesterday.
Neil H. MacBride, United States Attorney for the Eastern District of Virginia; Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office; and Thomas J. Kelly, Special Agent in Charge, Washington, D.C. Field Office, IRS-Criminal Investigation, made the announcement today after the indictment of Taylor was unsealed. Taylor is scheduled to make his initial appearance later this afternoon in the United States District Court for the Eastern District of Virginia. Stuart is expected to appear in the same Court on Friday, August 2, 2013, for his arraignment.
Taylor faces a maximum penalty on the two theft charges of ten years in prison, and twenty years in prison for each of the four wire fraud charges. These charges carry a maximum fine of $250,000 and full restitution. Finally, for each of the two charges alleging the filing of false income tax returns, Taylor faces a maximum penalty of three years in prison, a $100,000 fine, and full restitution. Stuart faces a maximum penalty on the single theft count of ten years in prison, $250,000 fine, and full restitution.
According to the indictment, Taylor served as the Chief of the RVFD from 1994 through 2011, during a time when the RVFD fire station underwent major renovations and reconstruction with funding, in significant part, from the U.S. Department of Agriculture. The indictment alleges that Taylor, a licensed master electrician, offered to do some of the renovations at the fire station and only seek reimbursement for his out of pocket expenses. As the charges allege, Taylor then submitted false invoices which contained charges for materials Taylor did not purchase and charges for labor that, at times, was never performed or were inflated from the hours that were actually performed. Taylor is also accused of using a Prince William County Public Schools System (“PWCS”) credit card to purchase some of the materials used at the fire station project (and elsewhere). In total, the indictment alleges that Taylor defrauded the RVFD of more than $90,000 and the PWCS of approximately $60,000. Finally, Taylor is accused of not disclosing the money he fraudulently obtained from the RVFD and winnings from the Virginia lottery on two individual income tax returns filed with the IRS.
A separate indictment alleges that during 2008 and 2009, Stuart embezzled approximately $40,000 from the RVFD financial accounts where he had signature authority.
This case was investigated by the Federal Bureau of Investigation’s Washington Field Office and the Internal Revenue Service, Criminal Investigation. Assistant United States Attorney Mark D. Lytle is prosecuting the case on behalf of the United States.
Any person who believes they may have information regarding public corruption in the Northern Virginia area is encouraged to call the FBI’s Northern Virginia Public Corruption Hotline at 703-686-6225.
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.Florida Resident Pleads Guilty to Role in $90 Million Pharmaceutical Theft from Connecticut WarehouseRead the Press Release
Deirdre M. Daly, Acting United States Attorney for the District of Connecticut, and Kimberly K. Mertz, Special Agent in Charge of the New Haven Division of the Federal Bureau of Investigation, announced that AMED VILLA, 48, a citizen of Cuba last residing in Miami, Fla., pleaded guilty today to federal charges stemming from his participation in the theft of approximately $90 million in pharmaceuticals from a warehouse in Enfield, Conn., and $8 million in cigarettes from a warehouse in Illinois.
“The Eli Lilly theft is reportedly the largest in Connecticut history, and I commend the FBI in New Haven and the Enfield Police Department, as well as our counterparts in the Central District of Illinois and other jurisdictions, for their cooperative investigative efforts in dismantling a prolific cargo theft ring,” stated Acting U.S. Attorney Daly.
“Today’s guilty plea is the result of a most exhaustive and far-reaching investigation, highlighted by exemplary teamwork among our federal, state and local partners,” stated FBI Special Agent in Charge Mertz. “Complex investigations involving multiple agencies and jurisdictions are often difficult because they require an especially organized and coordinated effort in order to bring those responsible for crimes to justice. The tremendous investigative and prosecutive effort in this matter is evident by Villa’s guilty plea.”
According to court documents and statements made in court, between January and March 2010, VILLA and others conspired to steal pharmaceuticals from the Eli Lilly Company warehouse and storage facility in Enfield, Conn. The investigation revealed that, in early 2010, members of the conspiracy traveled from the Miami area to Connecticut to gather information about the warehouse facility and the surrounding area. Shortly before the theft, VILLA and another individual drove from Florida to Flushing, N.Y., where they purchased tools needed to break into the warehouse facility, and then traveled to Connecticut.
In the evening of March 13, 2010, VILLA and others traveled in a tractor trailer to the parking lot of the Eli Lilly warehouse facility, dropped off a ladder and left. Later that evening, VILLA and a co-conspirator carried the ladder to the facility, checked for security in the front area, climbed onto the roof, used the tools to cut a hole in the facility roof, dropped down into the facility and disabled the alarm system. Thereafter, VILLA and others loaded approximately 53 pallets of pharmaceuticals into the tractor trailer, which they had backed up to the loading dock of the facility.
The pallets of pharmaceuticals included thousands of boxes Zyprexa, Cymbalta, Prozac, Gemzar and other medicines, valued at approximately $90 million.
Once the conspirators returned to Miami, they packed the pharmaceuticals into moving boxes and stored them in self-storage units in the Miami area.
As part of the investigation, on October 14, 2011, law enforcement authorities searched a storage facility in Florida and recovered pharmaceuticals that had been stolen from the Enfield warehouse.VILLA also pleaded guilty to a federal theft charge from the Central District of Illinois, admitting that, on January 24, 2010, he and others stole approximately 3,512 cases of cigarettes and a cargo trailer from a warehouse in East Peoria, Ill. During this theft, the warehouse was accessed by a hole cut in the roof and the security system was bypassed. A ladder and tools were discovered near the hole in the roof. In addition, a water bottle was recovered from the floor inside the warehouse. Analysis of DNA found on the water bottle revealed that the DNA profile was consistent with VILLA. The DNA profile also matched DNA recovered during the investigation of the Eli Lilly warehouse theft.
VILLA pleaded guilty to one count of conspiracy to commit theft from an interstate shipment and two counts of theft from an interstate shipment. When he is sentenced, VILLA faces a maximum term of imprisonment of 25 years.
VILLA has been detained since his arrest on May 3, 2012.
The investigation of the Enfield warehouse theft was led by the FBI in New Haven and the Enfield Police Department, with the assistance of several other United States Attorney’s Offices and federal, state and local law enforcement agencies that have been investigating large-scale thefts of pharmaceuticals and other products. The investigation of the warehouse theft in East Peoria was led by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the East Peoria Police Department.
This case is being prosecuted in the District of Connecticut by Assistant U.S. Attorney Anastasia E. King, with the assistance of Assistant U.S. Attorney K. Tate Chambers of the Central District of Illinois.
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(203) 821-3722 [email protected]First Cousins from La Plant Charged with IncestRead the Press Release
United States Attorney Brendan V. Johnson announced that a woman and a man from La Plant, South Dakota have been indicted by a federal grand jury for two counts of Incest.
Nicholas White Eagle, age 26, and Fawn Lynn Scott, age 20, were indicted by a federal grand jury on June 12, 2013. White Eagle and Scott appeared before U.S. Magistrate Judge Mark A. Moreno on June 25 and 27, 2013 and pled not guilty to the indictment.
The maximum penalty upon conviction is up to 5 years in custody, a $250,000 fine, or both; 3 years of supervised release; and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The charges stem from incidents that occurred in April 2011 and February 2013 in La Plant. The charges are merely accusations and White Eagle and Scott are presumed innocent until and unless proven guilty.
The investigation is being conducted by the Cheyenne River Sioux Tribe Law Enforcement Services. Assistant U.S. Attorney Mikal Hanson is prosecuting the case.
White Eagle and Scott were released to third party custodians pending trial. A trial date has not been set.
Final Defendant Sentenced in Puerto Rican Identity Theft RingRead the Press Release
Department of Justice
July 01, 20131
Office of Public AffairsSHERMAN, Texas – A 33-year-old Houston man has been sentenced for his role in a Puerto Rican identity theft ring operating in the Eastern District of Texas, announced U.S. Attorney John M. Bales.
Luigi Montes pleaded guilty in July 2012 to conspiracy to submit false statements to the U.S. Postal Service and false claims to the Internal Revenue Service and was sentenced to 60 months in federal prison on June 28, 2013, by U.S. District Judge Marcia Crone. Montes was ordered to pay restitution in the amount of $50,381 to the Internal Revenue Service.According to information presented in court, Luigi admitted that he and his co-conspirators used false identities to obtain private mail boxes (PMBs) in East Texas and elsewhere and prepare false tax returns in the names of Puerto Rican citizens who had not authorized the tax returns listing the PMBs as locations for the fraudulent tax refund checks to be mailed. A federal indictment was returned in Mar. 15, 2012 charging Luigi and five others in the scheme.
Lupe Mendoza, 31, of Houston, was sentenced to 15 months in federal prison on Apr. 15, 2013 for conspiracy to make a false statement to the U.S. Postal Service and ordered to pay restitution to the IRS in the amount of $31,270. Tania Estafania Aguilar Gomez, 25, of Dallas, was sentenced to 10 months in federal prison on Feb. 15, 2013 and ordered to pay restitution of $22,268 to the IRS. Rosalba Gomez, 47, of Dallas, was sentenced to five months in federal prison on Feb. 15, 2013. David Gomez, 22, of Omaha, Nebraska, was sentenced to 16 months in federal prison on Nov. 29, 2012. Joana Gomez, 50, of Balch Springs, Texas, was sentenced to five months in federal prison on Aug. 21, 2012.
This case was investigated by the U.S. Postal Inspection Service and the Internal Revenue Service Criminal Investigation and prosecuted by Assistant U.S. Attorney J. Andrew Williams.
Federal Inmate Pleads Guilty to Possessing ContrabandRead the Press Release
JOHNSTOWN, Pa. - An inmate of FCI Loretto pleaded guilty in federal court to a charge of possession of contraband in prison, United States Attorney David J. Hickton announced today.
Lonnie Johnston, 31, pleaded guilty to one count before United States District Judge Kim R. Gibson.
In connection with the guilty plea, the court was advised that on Oct. 31, 2012, Inmate Johnston possessed heroin and marijuana .
Judge Gibson scheduled sentencing for Oct. 31, 2013, at 9:30 a.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 of the defendant.
Assistant United States Attorney John J. Valkovci, Jr., is prosecuting this case on behalf of the government.
The Laurel Highlands Resident Agency of the Federal Bureau of Investigation and the Special Investigative Staff at the Federal Correctional Institution at Loretto conducted the investigation that led to the prosecution of Johnston.
Executives from Miami-Area Mental Health Care Hospital Convicted for Participating in $70 Million Medicare Fraud SchemeRead the Press Release
A federal jury Friday convicted four individuals for their participation in a Medicare fraud scheme involving nearly $70 million in fraudulent billings by Hollywood Pavilion (HP), a mental health care hospital.
Friday’s verdict was announced by U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; Special Agent in Charge Michael B. Steinbach of the FBI’s Miami Field Office; and Special Agent in Charge Christopher B. Dennis of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Office of Investigations Miami Office.
Karen Kallen-Zury, 59, of Lighthouse Point, Fla., and Daisy Miller, 44, of Hollywood, Fla., were each found guilty of one count of conspiracy to commit wire fraud and health care fraud, five substantive counts of wire fraud and two substantive counts of health care fraud. Michele Petrie, 64, of Ft. Lauderdale, Fla., was found guilty of one count of conspiracy to commit wire fraud and health care fraud and three substantive counts of wire fraud. Kallen-Zury, Miller, Petrie and a fourth defendant, Christian Coloma, 49, of Miami Beach, Fla., were also convicted of one count of conspiracy to pay bribes in connection with Medicare, with Kallen-Zury and Coloma also each being convicted on five substantive counts of paying bribes.
“The defendants participated in a massive scheme that attempted to defraud the United States of approximately $70 million by taking advantage of Medicare beneficiaries,” said Acting Assistant Attorney General Raman. “By paying bribes to a network of patient recruiters and falsifying documents, the defendants created the illusion of providing intensive psychiatric care to qualifying patients, when in reality they provided no care of substance. The verdict illustrates the success of the inter-agency Medicare Fraud Strike Force, which is dedicated to stamping out Medicare fraud.”
The defendants were charged in an indictment returned on Oct. 2, 2012. Evidence at trial demonstrated that the defendants and their co-conspirators caused the submission of false and fraudulent claims to Medicare through HP, a state-licensed psychiatric hospital located in Hollywood that purportedly provided, among other things, inpatient psychiatric care and intensive outpatient psychiatric care. The defendants paid illegal bribes and kickbacks to patient brokers in order to obtain Medicare beneficiaries as patients at HP who did not qualify for psychiatric treatment. The defendants then submitted claims to Medicare for those patients who were procured through bribes and kickbacks.
Karen Kallen-Zury, the CEO and registered agent of HP, attempted to conceal the payment of bribes and kickbacks by creating false documents to make it appear as if legitimate services were being rendered.
Evidence at trial established that Miller, the clinical director of HP’s inpatient facility, and Petrie, the head of HP’s intensive outpatient program, facilitated the payment of bribes to patient recruiters and oversaw the fraudulent admissions and treatment of unqualified patients.
Trial evidence also demonstrated that Coloma, the director of physical therapy for an entity associated with HP, facilitated the payment of bribes and kickbacks, and he supervised the creation of false documents to conceal the bribery scheme.
From at least 2003 through at least August 2012, HP billed Medicare nearly $70 million for services that were not properly rendered, for patients that did not qualify for the services being billed and for claims for patients who were procured through bribes and kickbacks.
The criminal case is being prosecuted by Trial Attorneys Robert A. Zink, Andrew H. Warren and Anne McNamara of the Criminal Division’s Fraud Section. The case was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,500 defendants who have collectively billed the Medicare program for more than $5 billion. In addition, HHS’s Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
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.
Executive Sentenced to 21 Months in Prison for Participation in Securities Kickback SchemeRead the Press Release
BOSTON - A Cleveland man was sentenced in federal court today for using kickbacks in order to trigger investments in a thinly-traded stock.
Muhammad (M.J.) Shaheed, 45, was sentenced by U.S. District Judge Douglas P. Woodlock to 21 months in prison to be followed by two years of supervised release and forfeiture of $30,000. In February 2013, Shaheed pleaded guilty to mail and wire fraud arising out his participation in an undercover FBI operation. Shaheed admitted to paying secret kickbacks to an investment fund representative in exchange for having the investment fund buy stock in a publicly-traded company, Augrid Global Holdings Corporation, of which Shaheed was Chief Executive Officer. The kickbacks were concealed through the use of sham consulting agreements and other fraudulent documents. What Shaheed did not know was that the purported investment fund representative was actually an undercover agent.
The conviction and sentence followed a year-long investigation focusing on preventing fraud in the micro-cap stock markets. Microcap companies are small publicly traded companies whose stock often trades at pennies a share. Fraud in the microcap markets is of increasing concern to regulators as such markets have proven to be fertile grounds for fraud and abuse. This is, in part, because accurate information about microcap stocks may be difficult for the average investor to find, since many microcap companies do not file financial reports with the SEC.
Shaheed is one of 15 defendants charged criminally with having participated in the undercover operation. Nine of those charged have now pleaded guilty and two were convicted after a jury trial.
The Securities and Exchange Commission, which conducted a parallel civil investigation alongside the FBI undercover operation, cooperated with criminal authorities throughout the course of the investigation and prosecution.
U.S. Attorney Carmen M. Ortiz and Richard DesLauriers, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. The case is being prosecuted by Assistant U.S. Attorneys Sarah E. Walters and Vassili Thomadakis of Ortiz’s Economic Crimes Unit.This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
Essex County, N.J., Man Convicted on Weapons ChargesRead the Press Release
NEWARK, N.J. – An Essex County, N.J., man, charged in connection with a year-long investigation by the FBI Safe Streets Task Force that led to the confiscation of 45 guns from the streets of Newark, East Orange and Irvington, was convicted on weapons charges, U.S. Attorney Paul J. Fishman announced today.
Randy Andrew, 36, of Irvington, N.J., was convicted by a federal jury of one count each of trafficking firearms and conspiracy to traffic firearms and three counts of possession of a firearm by a convicted felon after a one-week trial before U.S. District Judge William Walls in Newark federal court.According to documents filed in this case and the evidence at trial:
Andrew and seven others (all of whom have since pleaded guilty) were arrested in 2011 on charges of trafficking in firearms without a license. For more than one year the FBI Safe Streets Task Force led an operation to recover firearms in an effort to stem gun violence and take weapons off the streets of Newark and surrounding areas. Agents directed and supervised a “sting operation,” using a confidential informant to purchase firearms from illegal gun brokers and dealers. The operation yielded 45 illicit firearms, including several assault rifles, machine pistols, shotguns and semi-automatic handguns.
Andrew was selling firearms out of a laundromat in Irvington. On five separate occasions between May and July 2010, he met with the informant to discuss the purchase of assault weapons. On May 10, May 19 and June 9, 2010, Andrew sold firearms to the informant. On June 1 and July 12, 2010, he attempted to sell assault weapons to the informant, but his supplier could not provide the guns.
Andrew represented himself pro se after the first day of trial, assisted by defense counsel. The trafficking and conspiracy charges on which Andrew was convicted are punishable by a maximum potential penalty of five years in prison and the felon in possession charges are punishable by up to 10 years in prison. Sentencing is scheduled for Sept. 3, 2013.
U.S. Attorney Fishman credited the FBI special agents and local detectives and investigators from the FBI’s Safe Streets Task Force, which operates under the direction of FBI Special Agent in Charge Aaron T. Ford in Newark, with the investigation that led to the guilty verdict. The Safe Streets Task Force comprises the FBI, the Essex County Prosecutor’s Office, the Essex County Sheriff’s Office, the Essex County Corrections Department, and the Newark, East Orange and Jersey City Police Departments.The government is represented by Assistant U.S. Attorneys Adam N. Subervi and Amy D. Luria of the U.S. Attorney’s Office Criminal Division.
13-274Defense counsel: Paul Casteleiro Esq., Hoboken, N.J.
Essex County, N.J., Man Convicted on Weapons ChargesRead the Press Release
NEWARK, N.J. – An Essex County, N.J., man, charged in connection with a year-long investigation by the FBI Safe Streets Task Force that led to the confiscation of 45 guns from the streets of Newark, East Orange and Irvington, was convicted on weapons charges, U.S. Attorney Paul J. Fishman announced today.
Randy Andrew, 36, of Irvington, N.J., was convicted by a federal jury of one count each of trafficking firearms and conspiracy to traffic firearms and three counts of possession of a firearm by a convicted felon after a one-week trial before U.S. District Judge William Walls in Newark federal court.According to documents filed in this case and the evidence at trial:
Andrew and seven others (all of whom have since pleaded guilty) were arrested in 2011 on charges of trafficking in firearms without a license. For more than one year the FBI Safe Streets Task Force led an operation to recover firearms in an effort to stem gun violence and take weapons off the streets of Newark and surrounding areas. Agents directed and supervised a “sting operation,” using a confidential informant to purchase firearms from illegal gun brokers and dealers. The operation yielded 45 illicit firearms, including several assault rifles, machine pistols, shotguns and semi-automatic handguns.
Andrew was selling firearms out of a laundromat in Irvington. On five separate occasions between May and July 2010, he met with the informant to discuss the purchase of assault weapons. On May 10, May 19 and June 9, 2010, Andrew sold firearms to the informant. On June 1 and July 12, 2010, he attempted to sell assault weapons to the informant, but his supplier could not provide the guns.
Andrew represented himself pro se after the first day of trial, assisted by defense counsel. The trafficking and conspiracy charges on which Andrew was convicted are punishable by a maximum potential penalty of five years in prison and the felon in possession charges are punishable by up to 10 years in prison. Sentencing is scheduled for Sept. 3, 2013.
U.S. Attorney Fishman credited the FBI special agents and local detectives and investigators from the FBI’s Safe Streets Task Force, which operates under the direction of FBI Special Agent in Charge Aaron T. Ford in Newark, with the investigation that led to the guilty verdict. The Safe Streets Task Force comprises the FBI, the Essex County Prosecutor’s Office, the Essex County Sheriff’s Office, the Essex County Corrections Department, and the Newark, East Orange and Jersey City Police Departments.The government is represented by Assistant U.S. Attorneys Adam N. Subervi and Amy D. Luria of the U.S. Attorney’s Office Criminal Division.
13-274Defense counsel: Paul Casteleiro Esq., Hoboken, N.J.
Discharge of A Firearm During Spotsylvania Robbery Results in A Ten Year SentenceRead the Press Release
RICHMOND, Va. – Travis Burley, 26, of Richmond, Va., was sentenced today to 120 months in prison, followed by two years of supervised release, for using, carrying, brandishing, and discharging a firearm during and in relation to a drug trafficking offense.
Neil H. MacBride, United States Attorney for the Eastern District of Virginia; and Carl Vasilko, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives, Washington Field office, made the announcement after sentencing by United States District Judge John A. Gibney.
A jury found Burley guilty on April 25, 2013, after a two day trial. According to evidence at trial, on July 11, 2012, Burley met with a Spotsylvania-area man to purchase four ounces of high grade marijuana at the Spotsylvania Town Center Mall, near the Costco store. Upon arrival, Burley got into the passenger seat of the victim’s car, placed a loaded handgun to the victim’s head and demanded the drugs. A struggle ensued and the handgun discharged, hitting both the victim and the defendant.
The investigation was conducted by the Richmond Office of the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Spotsylvania County Sheriff’s Office. Mr. MacBride and Special Agent Vasilko wish to acknowledge the significant assistance provided by the offices of Spotsylvania County Commonwealth’s Attorney, William F. Neely, and Spotsylvania County Sheriff, Roger L. Harris, during the federal phase of this investigation. This case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives. Assistant United States Attorneys Brian Hood and Erik S. Siebert prosecuted the case on behalf of the United States.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.Detroit Man Sentenced to More Than 3 Years in Prison on Federal Drug Possession ChargeRead the Press Release
HUNTINGTON, W.Va. – A Detroit drug dealer who stored firearms, illegal narcotics and cash at his Huntington residence in October 2011 was sentenced on July 1 to three years and one month in prison, announced U.S. Attorney Booth Goodwin. Dwjuan Strickland, also known as “Freak” and “Mitch,” 37, of Detroit, previously pleaded guilty in April to possession with intent to distribute heroin and crack cocaine. On October 14, 2011, members of the Huntington Violent Crime and Drug Task Force conducted a search of the defendant’s 24th Street residence in Huntington, which he shared at the time with convicted felon Lawanna D. Hamlin. During the execution of the search warrant, law enforcement seized items that included 9.52 grams of crack cocaine, .45 grams of heroin, three digital scales, two .40 caliber pistols, and approximately $577 cash.
Prior to executing a search warrant on the defendant’s residence, law enforcement agents conducted several controlled heroin buys from Strickland and Hamlin.
Hamlin, 34, of Huntington, was previously sentenced in July 2012 to 2½ years in federal prison for her role in a heroin distribution scheme led by Strickland.
The Huntington Violent Crime and Drug Task Force conducted the investigation. Assistant United States Attorney Gregory McVey handled the prosecution. The sentence was imposed by Chief United States District Judge Robert C. Chambers.
This case was brought as part of Project Safe Neighborhoods. Project Safe Neighborhoods is a nationwide commitment to reduce gun crime in the United States by networking existing local programs targeting gun crime.
Couple from Malaysia Sentenced for Importing IceRead the Press Release
On Thursday, June 27, 2013, Kalidhasdsan Magalingam and Kaali Chellathura were sentenced to
51 months incarceration for their part in importing 961.3 grams net weight of methamphetamine hydrochloride of 98% purity — ice. The penalty generally brings a mandatory 10 years of incarceration, but the defendants qualified for the “safety valve” because this was their first offense and they were merely couriers. They are married, both citizens of Malaysia. They traveled to Hong Kong, received the ice, which was hidden in special shoes and a bra, and attempted to carry it through the airport on September 13, 2012. They were stopped and searched after presenting their passports.The investigation was conducted by the Department of Homeland Security, Homeland Security Investigations. The case was prosecuted by Assistant U.S. Attorney Karon V. Johnson.
Charleston Man with More Than $20,000 Cash, Half-kilo of Cocaine Pleads Guilty to Federal Drug ChargeRead the Press Release
CHARLESTON, W.Va. – A Charleston man who possessed a total of more than $20,000 in cash and nearly a half-kilogram of cocaine inside of his residence entered a guilty plea today to a federal drug charge. Jason McGhee, 35, pleaded guilty to possession with intent to distribute cocaine. On April 24, 2013, a confidential informant working with the Metropolitan Drug Enforcement Network Team (MDENT) arranged to purchase cocaine from McGhee. The police informant later arrived at McGhee’s residence and gave the defendant $2400 in pre-recorded buy money to fulfill a previous drug debt. A short time later, McGhee handed the informant five ounces of suspected cocaine. Afterward, the informant submitted the suspected cocaine to law enforcement agents. The suspected cocaine was field tested by law enforcement and proved to be 146 grams of cocaine.
Following the controlled drug transaction between McGhee and the informant, police executed a search warrant on the defendant’s residence. During the search, officers found the $2400 in pre-recorded currency that was used during the controlled drug transaction, along with an additional $17,800 in cash, two sets of digital scales and approximately 499 grams of cocaine.
In total, McGhee is responsible for distributing a total of at least two kilograms but less than 3.5 kilograms of cocaine.
McGhee faces up to 20 years in prison and a $1 million fine when he is sentenced on October 16, 2013 by United States District Judge Thomas E. Johnston.
The investigation was conducted by MDENT and the Drug Enforcement Administration (DEA). Assistant United States Attorney Monica D. Coleman is in charge of the prosecution.
Cabool Man Pleads Guilty to Enticing a Minor for Illicit SexRead the Press Release
Project Safe Childhood
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Cabool, Mo., man pleaded guilty in federal court today to enticing a 14-year-old girl to engage in illicit sex.
Scott Dwayne Baker, 45, of Cabool, pleaded guilty before U.S. Magistrate Judge David P. Rush to the charge contained in a Feb. 28, 2013 federal indictment.
By pleading guilty today, Baker admitted that he sent a series of sexually suggestive texts, including a sexually graphic photo, to the cell phone of a 14-year-old victim. The victim had received numerous text messages of a sexual nature from Baker. On Feb. 2, 2013 a Missouri State Highway Patrol trooper assumed the victim’s identity and began communicating with Baker via cell phone text messages.
On Feb. 3, 2013 the undercover officer continued a lengthy text message conversation with Baker during the Super Bowl. After sending sexually explicit messages and a pornographic image of himself to the victim’s cell phone, Baker began making arrangements to meet with the victim. Baker believed the victim would skip school and be at home alone on the following day, Feb. 4, 2013. Baker was asked to bring a Dr. Pepper and a candy bar for the child victim.
When he arrived at the victim’s home at about noon, bringing the Dr. Pepper and candy bar, he was arrested by officers of the Missouri State Highway Patrol.
Under federal statutes, Baker is subject to a mandatory minimum sentence of 10 years in federal prison without parole, up to a sentence of life in federal prison without parole, plus a fine up to $250,000. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Supervisory Assistant U.S. Attorney Michael S. Oliver. It was investigated by the Missouri State Highway Patrol, the Southwest Missouri Cyber Crimes Task Force and the FBI.
Project Safe Childhood
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc . For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."Bulgarian National Charged in Largest Identity Theft Ring of Its Time Extradited to Face Indictment in New JerseyRead the Press Release
NEWARK, N.J. – Aleksi Kolarov, 30, will appear in Newark federal court today after being extradited from Paraguay to face U.S. charges he participated in the Shadowcrew forum, an online marketplace for hacking and identity theft that was the largest of its kind when dismantled by the Department of Justice and the U.S. Secret Service in 2004, New Jersey U.S. Attorney Paul J. Fishman announced.
A Bulgarian national, Kolarov evaded capture until June 14, 2011, when Paraguayan law enforcement authorities arrested him at a hotel in Asunción, Paraguay. He was found in possession of hundreds of thousands of dollars in various currencies, counterfeit payment cards and electronic implements to re-encode cards. He has been incarcerated by Paraguayan authorities since that time relating to that conduct.
The U.S. indictment charges Kolarov with one count each of conspiracy, transferring false identification documents and offering access devices without authorization. He arrived in the United States on Friday, June 28, 2013, escorted by U.S. Marshals, and was held in federal custody over the weekend. He is scheduled to appear later today before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court.
“Aleksi Kolorov is charged with conspiring in the most notorious online cybercrime marketplace of its time, selling the means to steal money and identities to other criminals,” U.S. Attorney Fishman said. “This extradition shows that hiding behind computers and borders does not deter us. It is vital that law enforcement work internationally to bring cybercriminals to justice, no matter how long it takes.”
“The arrest and extradition of Aleksi Kolarov to the United States demonstrates the outstanding investigative abilities and steadfast commitment of the Secret Service to protect our nation’s financial infrastructure from unlawful acts committed by cyber-criminals on our homeland,” said Special Agent in Charge James Mottola of the U.S. Secret Service, Newark Field Office. “The successful apprehension of suspects is due to the superior efforts our special agents and participating members of the electronic crimes task forces which include federal, state and local law enforcement agencies, private industry and academia.”
According to the indictment:
Shadowcrew.com was an illegal online marketplace that trafficked in at least 1.5 million stolen credit and bank card numbers and caused more than $4 million in losses to the institutions issuing the cards.
Kolarov, along with the other 18 individuals charged in the indictment, participated in the international conspiracy to operate the Shadowcrew site. As part of the organization, Kolarov served as a vendor, using the site to sell illicit merchandise and services to other members. At one time, Shadowcrew.com had approximately 4,000 members dedicated to facilitating malicious computer hacking and the dissemination of stolen credit card, debit card and bank account numbers and counterfeit identification documents, such as drivers’ licenses, passports and Social Security cards. The conspiracy to commit this activity, often referred to as “carding,” facilitated the use of account numbers and counterfeit identity documents to steal identities and defraud banks and retailers.
Of the 19 international participants charged in the indictment, only three remain at large.
If convicted, Kolarov faces a maximum potential penalty of five years in prison on the conspiracy count, 15 years in prison on the identification documents count and 10 years in prison on the access device count. Each count also carries a maximum $250,000 fine, or twice the gross amount of pecuniary gain or loss resulting from the offense.
U.S. Attorney Fishman credited the U.S. Secret Service, under the direction of Special Agent in Charge Mottola, with the investigation leading to the charges. He also noted the valuable contributions of the Computer Crimes and Intellectual Property Section and Office of International Affairs in the Department of Justice’s Criminal Division and thanked the U.S. Marshals Service for facilitating the extradition. U.S. Attorney Fishman also praised the Paraguayan authorities for their vital role.
The government is represented by Assistant U.S. Attorney Erez Liebermann, Deputy Chief of the U.S. Attorney’s Office Criminal Division.
The charges and allegations contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
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Kolarov Indictment
Buffalo Man Sentenced for Drug TraffickingRead the Press Release
BUFFALO, N.Y. - U.S. Attorney William J. Hochul, Jr. announced today that David Long, 32, of Buffalo, N.Y., who was convicted of conspiracy to possess with intent to distribute 500 grams or more of cocaine, was sentenced to eight years in prison and four years supervised release by U.S. District Judge Richard J. Arcara.
Assistant United States Attorney Mary Clare Kane, who handled the case, stated that the defendant was intercepted over New York State wiretaps, on numerous occasions, arranging to acquire and purchase cocaine from Wallace Peace and other defendants. Search warrants executed during the investigation resulted in the seizure of 17 firearms, more than five kilograms of cocaine powder and in excess of 200 grams of crack cocaine.
Long was arrested along with 30 other defendants in July 2008. To date, 25 have been convicted.
The sentencing is the culmination of an investigation on the part of Special Agents of the Drug Enforcement Administration, under the direction of Brian R. Crowell, Special Agent in Charge, New York Region; Special Agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Francis J. Christiano, Resident Agent in Charge; and Special Agents of the Buffalo Police Department, under the direction of Commissioner Daniel Derenda.Blairsville Resident Admits Participating in Heroin Trafficking ConspiracyRead the Press Release
Johnstown, Pa. - A resident of Blairsville, Pa., pleaded guilty in federal court to a charge of violating federal narcotics laws, United States Attorney David J. Hickton announced today.
Stacey Simms, 29, pleaded guilty to one count before United States District Judge Kim R. Gibson.
In connection with the guilty plea, from the spring of 2011 to May 15, 2012, Simms, along with co-defendants, conspired to distribute and possess with intent to distribute heroin.
Judge Gibson scheduled sentencing for Dec. 3, 2013, at 10:00 a.m. The law provides for a maximum total sentence of 20 years in prison and a fine of $1,000,000, 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 U.S. Attorney Stephanie L. Haines is prosecuting this case on behalf of the government.
The Laurel Highlands Resident Agency of the Federal Bureau of Investigation, the Pennsylvania State Police and the Indiana Police Department conducted the investigation that led to the prosecution of Simms. Other agencies participating in this investigation included the Pennsylvania Attorney General’s Office, the Cambria County Drug Task Force, the Cambria County Sheriff’s Department, the Cambria County District Attorney’s Office, the Indiana County Drug Task Force, and the Indiana County District Attorney’s Office.
Blackfoot Man Charged with Abusive Sexual Contact with A ChildRead the Press Release
United States Attorney Brendan V. Johnson announced that a Blackfoot, South Dakota man has been indicted by a federal grand jury for Abusive Sexual Contact with a Child.
Ta-Sunka-hinz Thunder Hawk, a/k/a Hinzi Thunder Hawk, age 18, was indicted by a federal grand jury on June 5, 2013. He appeared before U.S. Magistrate Judge Mark A. Moreno on June 26, 2013 and pled not guilty to the indictment.
The maximum penalty upon conviction is up to life in custody, a $250,000 fine, or both; at least 5 years and up to life of supervised release; and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The charge relates to an alleged incident in Blackfoot where Thunder Hawk had sexual contact with a child under the age of 12. The charge is merely an accusation and Thunder Hawk is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Federal Bureau of investigation and the Cheyenne River Sioux Tribe Law Enforcement Services. Assistant U.S. Attorney Mikal Hanson is prosecuting the case.
Thunder Hawk was released to a third party custodian pending trial. A trial date has not been set.
Birmingham Man Sentenced to Nearly 12 Years in Prison for Armed Pharmacy RobberiesRead the Press Release
Birmingham Man Sentenced to Nearly 12 Years in Prison for Armed Pharmacy Robberies
BIRMINGHAM – A federal judge today sentenced a Birmingham man to nearly 12 years in prison for armed robberies at two pharmacies in the Birmingham metro area, announced U.S. Attorney Joyce White Vance and FBI Special Agent in Charge Richard D. Schwein Jr.
U.S. District Judge Abdul K. Kallon sentenced STERLING EDWARDS, 20, to four years and nine months in prison for the Oct. 13, 2011, armed robbery of Campbell’s Pharmacy on Veterans Memorial Drive in Adamsville, and the March 13, 2012, armed robbery of Helena Hometown Pharmacy on Shelby County 17 in Helena. Kallon sentenced Edwards to an additional seven years in prison for brandishing a gun during the Helena robbery. Brandishing a weapon during a crime of violence carries a mandatory seven-year prison sentence that must be served consecutively to any other sentence imposed for the crime. Edwards pleaded guilty to the crimes in February.
“This defendant, and co-defendants in this case, all endangered innocent people in their violent quest to steal prescription narcotics, which are the most abused substances in our country,” Vance said. “Violent criminals like this must be taken off our streets.”
“Violent criminals who use guns to threaten lives during robberies and other crimes can expect to be held accountable for their illegal acts,” Schwein said. “The FBI is committed to working with its law enforcement partners to ensure the safety of our communities.”
Edwards, his uncle, Willie Edwards, 39, also of Birmingham, and Anthony Young, 21, of Hueytown, were all charged in a November indictment. Sterling Edwards and Young were both charged in the Helena pharmacy robbery. Willie Edwards and Young were both charged in a July 30, 2011, armed robbery of Moore’s Pharmacy on Ensley Avenue in Birmingham.
Willie Edwards pleaded guilty to the Ensley pharmacy robbery and to brandishing a gun in that robbery. He was sentenced to 20 years and one month in prison. Young’s case has been continued.
According to court documents, Sterling Edwards entered Campbell’s Pharmacy in Adamsville on the morning of Oct. 13, 2011, along with his uncle. Both men pulled guns, demanded money and drugs and threatened to kill the four employees, including the pharmacist, if they did not comply.
In the Helena pharmacy robbery, Sterling Edwards entered the store on the morning of March 13, 2012, with Young, and both brandished weapons, according to court records. Sterling Edwards ordered the pharmacist to open the cash register and to get drugs containing the narcotic pain-killer, Oxycontin. The robbers ordered the pharmacy employees to lie on the floor and threatened to kill them if they got up, according to court documents.
The FBI and Birmingham Police Department investigated the case. Assistant U.S. Attorney Joseph P. Montminy and Robin B. Mark are prosecuting the case.
Birmingham Man Sentenced to Nearly 12 Years in Prison for Armed Pharmacy RobberiesRead the Press Release
BIRMINGHAM – A federal judge today sentenced a Birmingham man to nearly 12 years in prison for armed robberies at two pharmacies in the Birmingham metro area, announced U.S. Attorney Joyce White Vance and FBI Special Agent in Charge Richard D. Schwein Jr.
U.S. District Judge Abdul K. Kallon sentenced STERLING EDWARDS, 20, to four years and nine months in prison for the Oct. 13, 2011, armed robbery of Campbell’s Pharmacy on Veterans Memorial Drive in Adamsville, and the March 13, 2012, armed robbery of Helena Hometown Pharmacy on Shelby County 17 in Helena. Kallon sentenced Edwards to an additional seven years in prison for brandishing a gun during the Helena robbery. Brandishing a weapon during a crime of violence carries a mandatory seven-year prison sentence that must be served consecutively to any other sentence imposed for the crime. Edwards pleaded guilty to the crimes in February.
“This defendant, and co-defendants in this case, all endangered innocent people in their violent quest to steal prescription narcotics, which are the most abused substances in our country,” Vance said. “Violent criminals like this must be taken off our streets.”
“Violent criminals who use guns to threaten lives during robberies and other crimes can expect to be held accountable for their illegal acts,” Schwein said. “The FBI is committed to working with its law enforcement partners to ensure the safety of our communities.”
Edwards, his uncle, Willie Edwards, 39, also of Birmingham, and Anthony Young, 21, of Hueytown, were all charged in a November indictment. Sterling Edwards and Young were both charged in the Helena pharmacy robbery. Willie Edwards and Young were both charged in a July 30, 2011, armed robbery of Moore’s Pharmacy on Ensley Avenue in Birmingham.
Willie Edwards pleaded guilty to the Ensley pharmacy robbery and to brandishing a gun in that robbery. He was sentenced to 20 years and one month in prison. Young’s case has been continued.
According to court documents, Sterling Edwards entered Campbell’s Pharmacy in Adamsville on the morning of Oct. 13, 2011, along with his uncle. Both men pulled guns, demanded money and drugs and threatened to kill the four employees, including the pharmacist, if they did not comply.
In the Helena pharmacy robbery, Sterling Edwards entered the store on the morning of March 13, 2012, with Young, and both brandished weapons, according to court records. Sterling Edwards ordered the pharmacist to open the cash register and to get drugs containing the narcotic pain-killer, Oxycontin. The robbers ordered the pharmacy employees to lie on the floor and threatened to kill them if they got up, according to court documents.
The FBI and Birmingham Police Department investigated the case. Assistant U.S. Attorney Joseph P. Montminy and Robin B. Mark are prosecuting the case.
Annandale Accountant Convicted of Tax Fraud and Making False Statements to the GovernmentRead the Press Release
ALEXANDRIA, Va. – Mohammad T. Al-Suqi, 54, of Annandale, Va., was convicted today by a federal jury of nineteen counts of aiding the preparation of a false income tax return, two counts of filing his own false income tax returns, and one count of making false statements to federal agents.
Neil H. MacBride, United States Attorney for the Eastern District of Virginia, and Thomas J. Kelly, Special Agent in Charge, Washington, D.C. Field Office, IRS-Criminal Investigation, made the announcement after the verdict was accepted by United States District Judge James C. Cacheris.
Al-Suqi was indicted by a federal grand jury on April 25, 2013. He faces a maximum penalty of three years in prison on each of the tax counts and five years in prison on the false statements count when he is sentenced on October 4, 2013.
According to court records and evidence at trial, the defendant owned and operated the tax preparation businesses Ideal Accounting Solution and Mass Accounting and Tax Corp. in Falls Church, Va. For the tax years 2007 through 2010, the defendant prepared and filed, on behalf of his taxpayer clients, federal income tax returns that contained materially false and fraudulent information, including false itemized deductions on Schedule A and fraudulent education credits on Form 8863, all of which resulted in large federal income tax refunds for the taxpayers. For his part, the defendant received fees of between $100 and $250 per return and prepared thousands of federal income tax returns during the relevant time period.
As part of the government’s investigation, the defendant also prepared a fraudulent tax return in 2011 for an undercover IRS agent posing as a taxpayer. The episode, which was recorded by the undercover agent and presented to the jury at trial, showed the defendant falsifying expenses and deductions in order to produce an income tax refund and indicating that his success as a tax preparer was associated with his ability to manufacture large refunds for his clients.
The defendant also included false and fraudulent expenses and credits on his own 2008 and 2009 federal income tax returns. In 2013, after the IRS revoked his ability to file electronic tax returns, the defendant continued to prepare and electronically file tax returns using an electronic filing number assigned to his wife, and the defendant lied to IRS agents when he was questioned about the activities.
This case was investigated by IRS Criminal Investigation. Assistant United States Attorneys Jasmine Yoon, Charles Connolly, and Paul Nathanson are prosecuting the case on behalf of the United States.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.10th Street Gang Member Sentenced on RICO ChargeRead the Press Release
BUFFALO, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that Michael Hernandez, 24, of Buffalo, N.Y., who was convicted of Racketeering Influenced Corrupt Organizations (RICO) Conspiracy, was sentenced to 57 months in prison by U.S. District Judge Richard J. Arcara.
Assistant U.S. Attorney Joseph M. Tripi, who is handling the case, stated that from 2000 to 2010, the defendant was a member of the 10th Street Gang, a criminal enterprise engaged in racketeering activity. As a part of his involvement in the 10th Street Gang, Hernandez arranged the sale of a .38 caliber handgun and an AR-15 semi-automatic rifle between 10th Street Gang members. In addition, along with other members and associates of the gang, Hernandez conspired to distribute cocaine, crack cocaine, and other controlled substances on the West Side of Buffalo, New York as a part of the affairs of the 10th Street Gang.
The sentencing is the culmination of an investigation on the part of the Federal Bureau of Investigation, under the direction of Richard M. Frankel, Acting Special Agent in Charge, the New York State Police, under the direction of Major Michael Cerretto, and the Buffalo Police Department, under the direction of Commissioner Daniel Derenda.
29 June 2013
Patient in Sexual Predator Unit Charged with Producing Child PornRead the Press Release
WICHITA, KAN. – A registered sex offender has been charged with producing child pornography while he was committed to a sexual predator unit at Larned State Hospital, U.S. Attorney Barry Grissom said today.
Christopher M. Case, 33, has been charged with two counts of producing child pornography and two counts of sending obscene material to a child. The indictment makes the following allegations:
– From Dec. 1, 2011, to Dec. 28, 2011, Case enticed a 15-year-old child to engage in a sexual act for the purpose of making a video to be transmitted on the Internet.
– From Dec. 24, 2011, to Jan. 23, 2012, Case enticed a 13-year-old child to engage in a sexual act for the purpose of making a video to be transmitted on the Internet.
– On Dec. 29, 2011, Case sent a video of himself masturbating to the 13-year-old victim.
– On Dec. 31, 2011, Case sent a video of himself masturbating to the 13-year-old victim.At the time of the crimes, Case was a registered sex offender. He was convicted in Saline County, Kan., in May 2003 on a charge of attempted aggravated indecent solicitation of a child.
If convicted on the federal charges, he faces a penalty of not less than 25 years in federal prison and a fine up to $250,000 on each of the charges of producing child pornography; and a penalty of not less than 10 years and a fine up to $250,000 on each of the charges of sending obscene material to a child. The Wichita Police Department’s Internet Crimes Against Children Task Force and the Kansas Attorney General’s office investigated. Assistant U.S. Attorney Jason Hart and Steve Karrer of the Kansas Attorney General’s Office are prosecuting.
OTHER INDICTMENTS
Rigoberto Avalos-Mendez, 26, Kennewick, Wash., is charged with possession with intent to distribute approximately three kilograms of cocaine. The crime is alleged to have occurred May 31, 2013, in Thomas County, Kan.
If convicted, he faces a penalty of not less than five years and not more than 40 years in federal prison and a fine up to $2 million. The Drug Enforcement Administration investigated. Special Assistant U.S. Attorney Michelle Jacobs is prosecuting.
Vicente Trevino-Hernandez, 46, a citizen of Mexico, is charged unlawfully re-entering the United States after being deported. He was found June 6, 2013, in Arkansas City, Kan.
If convicted, he faces a maximum penalty of two years in federal prison without parole and a fine up to $250,000. ICE’s Homeland Security Investigations investigated. Assistant U.S. Attorney Brent Anderson is prosecuting.
Jonathan Valdez, 25, Garden City, Kan., is charged with one count of possession with intent to distribute cocaine and one count of unlawful possession of a firearm in furtherance of drug trafficking. The crimes are alleged to have occurred March 16, 2013, in Finney County, Kan.
If convicted, he faces a maximum penalty of 20 years in federal prison and a fine up to $1 million on the drug charge; and a penalty of not less than five years and a fine up to $250,000 on the firearm charge. The Finney County Sheriff’s Office investigated. Special Assistant U.S. Attorney Michelle Jacobs is prosecuting.
Gerald Beasley, 58, Andover, Kan., is charged with unlawful possession of a firearm after a felony conviction. The crime is alleged to have occurred June 12, 2013, in Wichita, Kan.
If convicted, he faces a maximum penalty of 10 years in federal prison and a fine up to $250,000. Agencies taking part in the investigation include the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Drug Enforcement Administration, the Wichita Police Department, the Sedgwick County Sheriff’s Office, the Internal Revenue Service Task Force and the Sedgwick County District Attorney’s Office. Assistant U.S. Attorney Debra Barnett is prosecuting.
Noel Soto-Arrieta, a citizen of Mexico, is charged with three counts of counterfeiting false documents, five counts of aggravated identity theft, two counts of counterfeiting a Social Security card, and one count of unlawful re-entry after deportation. He was found June 6, 2012, in Sedgwick County, Kan.
If convicted, he faces a maximum penalty of 15 years in federal prison without parole and a fine up to $250,000 on each count of counterfeiting false documents; a mandatory two years to be served consecutively to other sentences and a fine up to $250,000 on each count of aggravated identity theft; a maximum penalty of five years and a fine up to $250,000 on each count of counterfeiting a Social Security number; and a maximum penalty of two years and a fine up to $250,000 on the re-entry charge. ICE’s Homeland Security Investigations investigated. Assistant U.S. Attorney Brent Anderson is prosecuting.
Raymond Hernandez-Cordova, a citizen of Mexico, is charged with one count of possession of false documents, four counts of aggravated identity theft; one count of making a false statement on an I-9 Employment Eligibility Verification form; one count of misusing a Social Security number; one count of producing a false document; and one count of unlawfully re-entering the United States after being deported. He was found June 10, 2013, in Wichita, Kan.
If convicted, he faces a maximum penalty of 10 years in federal prison without parole and a fine up to $250,000 on the charge of possessing false documents; a mandatory two years to run consecutively to other sentences on other counts and a fine up to $250,000 on each count of aggravated identity theft; a maximum penalty of five years and a fine up to $250,000 on the count of making a false statement on an I-9 form and the same penalty on the count of misusing a Social Security number; a maximum penalty of 15 years and a fine up to $250,000 on the charge of producing false identification documents; and a maximum penalty of two years and a fine up to $250,000 on the re-entry charge. The Kansas Department of Revenue investigated. Assistant U.S. Attorney Brent Anderson is prosecuting.
Josephina Barrasa-Chairez, 39, a citizen of Mexico, is charged with possessing false documents. The crime is alleged to have occurred June 11, 2013, in Lyon County, Kan.
If convicted, she faces a maximum penalty of 15 years in federal prison and a fine up to $250,000. ICE’s Homeland Security Investigations investigated. Assistant U.S. Attorney Brent Anderson is prosecuting. The Social Security Administration - OIG investigated.
Lester Ray Nichols, 72, Leavenworth, Kan., is charged with failing to register as required by the Sex Offender Registration and Notification Act. The crime is alleged to have occurred Nov. 9, 2012.
If convicted, he faces a maximum penalty of 10 years in federal prison and a fine up to $250,000. The FBI investigated. Assistant U.S. Attorney Jason Hart is prosecuting.
Juan Carlos Frayre, 25, Wichita, Kan., is charged with two counts of unlawful possession of a firearm by a user of controlled substances, two counts of unlawful possession of a firearm after being convicted of a misdemeanor crime of domestic violence, two counts of unlawful possession of ammunition by a user of controlled substances, two counts of unlawful possession of ammunition after being convicted of a misdemeanor crime of domestic violence, and two counts of possession with intent to distribute methamphetamine. The crimes are alleged to have occurred in April and May 2013, in Sedgwick County, Kan.
If convicted, he faces a maximum penalty of 10 years and a fine up to $250,000 on each of eight counts; and a penalty of not less than five years and not more than 40 years and a fine up to $5 million on each of two counts. The Wichita Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives investigated. Assistant U.S. Attorney Mona Furst is prosecuting.
Steven J. Denson, 27, is charged with one count of unlawful possession of a firearm after a felony conviction. The crime is alleged to have occurred Feb. 27, 2013, in Sedgwick County, Kan.
If convicted, he faces a maximum penalty of 10 years and a fine up to $250,000. The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated. Assistant U.S. Attorney Matt Treaster is prosecuting.
In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.
28 June 2013
Wounded Knee Man Charged with Sexual Abuse of A MinorRead the Press Release
United States Attorney Brendan V. Johnson announced that a Wounded Knee, South Dakota man has been indicted by a federal grand jury for Sexual Abuse of a Minor.
Berdell Shot, age 29, was indicted by a federal grand jury on September 19, 2012. He appeared before U.S. Magistrate Judge Mark A. Moreno on June 25, 2013 and pled not guilty to the indictment. The maximum penalty upon conviction is up to 15 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 Shot is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Rosebud Sioux Tribe Law Enforcement Services. Assistant U.S. Attorney Tim Maher is prosecuting the case.
Shot was remanded to the custody of the U.S. Marshals pending trial. A trial date has been set for August 13, 2013.
West Point Resident Pleads Guilty to Assisting Individuals in Filing False Tax ReturnsRead the Press Release
SALT LAKE CITY – Gina D. Salayandia, age 45, of West Point, Utah, pleaded guilty this week in federal court to assisting as many as 15 individuals in filing false federal tax returns using exemptions and credits they were not legally entitled to claim. The individual returns were filed for the years 2006 through 2011.
Salayandia has been a self-employed tax return preparer since at least 1999. Her business is based in Hooper, Utah.
Salayandia, who waived indictment, was charged with one count of aiding and assisting in the filing of false tax returns in a Felony Information filed in April. She pleaded guilty to the charge Wednesday before U.S. Magistrate Judge Dustin Pead.
As a part of the plea agreement, Salayandia admitted that on about Jan. 21, 2011, an individual identified as M.M. in court documents approached her to prepare her 2010 tax returns. Salayandia admitted that while she was preparing M.M.’s tax return, she informed her that her tax situation would improve through exemptions and credits if she claimed certain additional dependents on her tax return. Salayandia admitted she knew that M.M. was not legally entitled to claim additional dependents. She also admitted knowing that M. M. was not entitled to claim the child tax credit for additional dependents because they were not U.S. citizens, U.S. nationals, or residents of the United States. She admitted knowing that she assisted in preparing falsely stated tax exemptions and credits on the tax form knowing it was not legal under Internal Revenue code.
She stipulated in the plea agreement that the total tax loss in scheme is $211,600.
Sentencing in the case is set for Sept. 4, 2013, before U.S. District Judge Clark Waddoups. The potential maximum penalty for the conviction is three years in prison, a fine of $250,000, and a one-year term of supervised release.
Week in Review – South BendRead the Press Release
FOR IMMEDIATE RELEASECONTACT: Mary Hatton
www.usdoj.gov/usao/inn/ CELL: (219) 314-9993
South Bend, Indiana —The United States Attorney’s Office announced the following activity in Federal Court:
PLEA:
Jonathan Parahams, Jr., 35, of South Bend, Indiana, pled guilty before Magistrate Judge Christopher A Nuechterlein to the felony offense of conspiracy to defraud the United States Department of the Treasury. Magistrate Nuechterlein is recommending that the district court accept the tendered guilty plea.Parties have 10 days in which to object to the magistrate judge’s recommendation. Sentencing set for 10/3/2013 before District Judge Jon E DeGuilio. This charge was filed as a result of an investigation by the Internal Revenue Service.This case is being prosecuted by Assistant United States Attorney Frank Schaffer.
If convicted in court, any specific sentence to be imposed will be determined by the judge after a consideration of federal sentencing statutes and the Federal Sentencing Guidelines.
DISPOSITIONS:
Jaleen McGee, 20, of South Bend, Indiana, a defendant of the case US. v Shaw, et al., was sentenced by Judge Robert L. Miller, Jr to 87 months imprisonment and 4 years of supervised release after pleading guilty to the felony offense of racketeering.According to documents filed, McGee was a member of the “Cash Out Boyz,” a gang in South Bend, Indiana. The gang was involved in a pattern of criminal activity including drug trafficking and use of firearms, robberies and intimidation.McGee was arrested carrying marijuana for distribution and was involved in the shooting and robbery of a fellow Cash Out Boyz member.This case was the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Federal Bureau of Investigation and the South Bend Police Department. This case was prosecuted by Assistant United States Attorney Donald Schmid.
Wilbur Crawford, 21, of South Bend, Indiana, a defendant in the case US v Shaw, et al., was sentenced by District Judge Robert L. Miller, Jr to 79 months imprisonment and 4 years of supervised release after pleading guilty to the felony offense of carrying a firearm during a drug trafficking crime/crime of violence.According to documents filed by the government in this case, Crawford was involved in a home invasion in which a man was shot and a pound of marijuana was stolen. This case was the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives.This case was prosecuted by Assistant United States Attorney Donald Schmid.
Omar Lewis, 34, of Michigan City, Indiana, was sentenced by District Judge Jon E. DeGuilio to 151 months imprisonment and 3 years of supervised release after pleading guilty to the felony offense of knowingly and intentionally possessing with the intent to distribute a mixture or substance containing a detectable amount of cocaine base (“Crack”).According to documents filed by the government in this case, Lewis sold crack cocaine in the LaPorte area in 2011.This case was the result of an investigation by the Drug Enforcement Agency.This case was prosecuted by Assistant United States Attorney William Grimmer.
Harry Kiste, 56, of Elkhart, Indiana, was sentenced by District Judge Jon E. DeGuilio to 5 years supervised probation, 10 months location monitoring on home detention and a $500 fine after pleading guilty to the felony offense of failing to register as a sex offender.According to documents filed by the government in this case, Kiste was convicted for attempted criminal sexual conduct in 1996.This case was the result of an investigation by the United States Marshal’s Service.This case was prosecuted by Assistant United States Attorney John Maciejczyk.
Week in Review – HammondRead the Press Release
FOR IMMEDIATE RELEASECONTACT: Mary Hatton
www.usdoj.gov/usao/inn/ CELL: (219) 314-9993
Hammond, Indiana - The United States Attorney’s Office announced the following activity in Federal Court:
PLEAS:
Michael Delgado, 21, of Hammond, Indiana, pled guilty before Chief Judge Philip Simon to the felony offense of possession of a firearm by a convicted felon.Sentencing has been set for 10/3/13.This charge was filed as a result of an investigation by Bureau of Alcohol, Tobacco, Firearms and Explosives HIDTA Task Force and the Lake County Police Department.This case is being prosecuted by Assistant United States Attorney Nicholas Padilla.
Matthew Jasek, 30, of Schererville, Indiana, pled guilty before Magistrate Judge Paul Cherry to the felony offense of possession of child pornography.Magistrate Cherry is recommending that the district court accept the tendered guilty plea.Parties have 10 days in which to object to the magistrate judge’s recommendation. This charge was filed as a result of an investigation by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations. This case is being prosecuted by Assistant United States Attorney Thomas McGrath.
Nalon Edmonds, 21, of Gary, Indiana, pled guilty before Chief Judge Philip Simon to the felony offense of being an unlawful user of marijuana in possession of a firearm.Sentencing has been set for 9/24/13.This charge was filed as a result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Indiana University Northwest Police Department.This case is being prosecuted by Assistant United States Attorney Nicholas Padilla.
Deanbra Martin, 23, of Gary, Indiana, pled guilty before Chief Judge Philip Simon to the felony offense of possession of a firearm and ammunition by a convicted felon.Sentencing has been set for 9/17/13.This charge was filed as a result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Michigan City Police Department.This case is being prosecuted by Assistant United States Attorney Joshua Kolar.
If convicted in court, any specific sentence to be imposed will be determined by the judge after a consideration of federal sentencing statutes and the Federal Sentencing Guidelines.
DISPOSITIONS:
Joseph Gilman, 23, and Derek Muilenburg, 25, of Demotte, Indiana and defendants in the case US v Humphrey et al., were sentenced by Senior District Judge Rudy Lozano.Both Gilman and Muilenburg were sentenced to 46 months imprisonment and 3 years of supervised release after pleading guilty to the felony offense of conspiracy to possess with the intent to distribute heroin. This case was the result of an investigation by the Drug Enforcement Administration.This case was prosecuted by Assistant United States Attorney Jennifer Chang-Adiga.
Nicole Smith, 31, of Hammond, Indiana, was sentenced by Magistrate Judge Andrew Rodovich to 1 year of probation after pleading guilty to the felony misdemeanor of theft of government property.According to documents filed by the government in this case, Smith admitted that during the 2008-2009 academic school year at Purdue University-Calumet she submitted an application to receive federal funds for student aid and failed to report additional income received from Action for Children, which provides financial assistance for childcare for families living in the state of Illinois.This case was the result of an investigation by the United States Postal Service-Office of the Inspector General.This case was prosecuted by Assistant United States Attorney Toi Houston.
Ronald Slusser, 49, and Joseph Kumstar, 42, both of Crown Point, Indiana, defendants in the case US v Kabella et al., were sentenced by Senior District Judge James Moody on June 27, 2013.Slusser was sentenced to 70 months imprisonment and 1year of supervised release after pleading guilty to the felony offenses of conspiracy to provide false information to a Federal Firearms Licensee, conspiracy to defraud the FDA, making false statements on a tax return and laundering/structuring of monetary instruments.Slusser was also ordered to pay $198,817.71 in restitution to the IRS for tax years 2005-2010.Kumstar was sentenced to 57 months imprisonment and 1 year of supervised release after pleading guilty to the felony offenses of conspiracy to provide false information to a Federal Firearms Licensee, conspiracy to defraud the FDA and making false statements on a tax return.Kumstar was ordered to pay $22,612.62 in restitution to the IRS for tax years 2005-2009.According to documents filed by the government in this case, Slusser, while a patrol officer with the Lake County Sheriff’s Department, and Kumstar, while the Deputy Chief for the Lake County Sheriffs Department, conspired to obtain restricted firearms and defraud the FDA in order to retain restricted laser sites.The conspiracy involved the trafficking of between 25-99 firearms.This case was the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Food and Drug Administration, the Internal Revenue Service and the Department of Defense Criminal Investigation Service.This case was prosecuted by Assistant United States Attorney Philip Benson.
Nancy Stofko, 37, of Crown Point, Indiana, was sentenced by Senior District Judge James Moody to 21 months imprisonment, 3 years of supervised release and restitution to the victim in the amount of $572,173.09 after pleading guilty to the felony offense of wire fraud.According to documents filed by the government in this case, Stofko admitted that while employed as an office manager at the Complete Valve Repair Services, Inc. she wrote checks and used the company credit cards to make hundreds of unauthorized purchases for her personal use and benefit. This case was the result of an investigation by the United States Secret Service.This case was prosecuted by Assistant United States Attorney Randall Stewart.
Week in Review – Fort WayneRead the Press Release
FOR IMMEDIATE RELEASECONTACT: Mary Hatton
www.usdoj.gov/usao/inn/ CELL: (219) 314-9993
Fort Wayne, Indiana —The United States Attorney’s Office announced the following activity in Federal Court:
DISPOSITIONS:
Joseph Brewington, 24, of Fort Wayne, Indiana, was sentenced by District Judge Theresa L. Springmann to 36 months imprisonment and 2 years supervised release after pleading guilty to the felony offense of knowingly maintaining a premise for the purpose of distributing marijuana.This case was the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives.This case was prosecuted by Assistant United States Attorney Anthony Gellar.
Jermorris Sewell, 30, of Fort Wayne, Indiana, was sentenced by District Judge Theresa L. Springmann to serve 110 months imprisonment and 8 years supervised release after pleading guilty to the felony offense of knowingly or intentionally conspiring to distribute and possess with the intent to distribute controlled substances.This case was the result of an investigation by the Federal Bureau of Investigation and the Internal Revenue Service.This case was prosecuted by Assistant United States Attorney Anthony Gellar
United States and Tennessee Reach Agreement with King Pharmaceuticals LLC to Resolve Allegations of Clean Air Act ViolationsRead the Press Release
King Pharmaceuticals LLC (King) will pay $2.2 million and take measures to comply with the Clean Air Act to resolve alleged violations of the Clean Air Act (CAA) at its pharmaceutical manufacturing facility located in Bristol, Tenn., announced the Department of Justice, the U.S. Environmental Protection Agency (EPA), and the Tennessee Department of Environment and Conservation (TDEC).
From the $2.2 million civil penalty, $1.1 million will be paid to the United States and $1.1 million will be paid to TDEC. From TDEC’s $1.1 million penalty, $650,000 will be applied to a TDEC state project for homeowners. The settlement also requires the facility to demonstrate compliance with CAA National Emission Standards for Pharmaceuticals Production (PharmaMACT regulations) and to apply for a Title V permit. The PharmaMACT regulations impose “Maximum Achievable Control Technology” (MACT) standards, which are industry-specific measures that must be implemented to control hazardous air pollutants in order to prevent harm to human health or the environment.
The TDEC state project calls for implementation of a program dedicated to providing financial assistance to low-to-moderate income homeowners in making improvements to residential housing focused on weatherization, insulation and energy efficiency. This project will focus on the reduction of energy usage and decreasing emissions associated with the generation of electricity or use of fossil fuels in home heating. TDEC plans to use existing local programs in the Bristol area to identify and channel assistance to eligible homeowners.“This settlement will protect public health and the environment by requiring additional hazardous air pollution controls at the pharmaceutical facility in Bristol,” said Robert G. Dreher, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “This significant civil penalty should send a strong signal to the pharmaceutical industry regarding our commitment to enforce PharmaMACT.”
“Upholding the public health benefits of the Clean Air Act is a critical responsibility of EPA,” said Beverly H. Banister, Acting Deputy Regional Administrator of EPA’s Southeastern office. “This settlement will result in better management practices that will ultimately lead to greater protection of public health and the environment for the citizens of Bristol.”
“The Tennessee Department of Environment and Conservation is pleased the proposed settlement could be reached in this litigation to address air emissions and permitting requirements, and that the facility will move forward to meet those requirements,” said TDEC Commissioner Bob Martineau. “Additionally, the state project included in the settlement will promote emission reductions by reducing the energy needs of low-income residents in the area.”
King began pharmaceutical manufacturing operations at the Bristol facility in 1993. King was acquired by Pfizer Inc. in 2011, becoming a wholly owned subsidiary of Pfizer. On May 29, 2013, UPM Pharmaceuticals announced that it will acquire the Bristol facility. The sale of the facility will not affect the injunctive relief required by the settlement. The alleged violations were discovered during a May 2006 inspection and subsequent investigation by EPA and TDEC. The United States and the state of Tennessee jointly brought the complaint.
The Department of Justice filed the complaint and lodged the consent decree contemporaneously on behalf of EPA in the U.S. District Court for the Eastern District of Tennessee today. Notice of the lodging of the consent decree will appear in the Federal Register allowing for a 30-day public comment period before the consent decree can be entered by the court as a final judgment. It is available on the Justice Department website at www.usdoj.gov/enrd/Consent_Decrees.html.
United States Reaches Agreement with Philadelphia Food Warehouse Accused of Holding Food in Filthy ConditionsRead the Press Release
Since the United States of America’s filing of a civil Complaint on May 29, 2013, against Philadelphia food warehouse New Rich City Trading Corporation, its president and owner, Ms. Xiaoping Sun, and its manager, Mr. Si Yan Chuen, the parties have entered into a Consent Decree to resolve allegations that the defendants held food under insanitary conditions, in violation of the Food Drug and Cosmetic Act. United States Attorney Zane David Memeger announced today that the resolution was accepted by the United States District Court.
The Complaint alleged that United States Food and Drug Administration (“FDA”) inspections of the facility established that food stored by the defendants was adulterated because the food had been held under insanitary conditions whereby it may have become contaminated with filth. The insanitary conditions and filth included the widespread presence of animals such as rodents, birds, cats, and dogs, as well as the animals’ feces and urine, throughout the facility, including on and around articles of food. The Food Drug and Cosmetic Act prohibits companies and individuals from causing articles of food to become “adulterated” while held for sale after shipment of one or more of their components in interstate commerce.
The Consent Decree resolves the allegations in the Complaint, and requires defendants to:
- Immediately implement a sanitation control program developed by an expert, which will be subject to FDA approval.
- Recall and destroy adulterated food.
- Undergo periodic audit inspections by an independent auditor who shall report findings to the FDA.
The Consent Decree prohibits defendants from committing future violations of the Act. Any future violations could result in a shutdown of the facility and/or monetary penalties.
“This consent decree advances the Department of Justice’s and the FDA’s goal of ensuring the safety and integrity of our food supplies,” said United States Attorney Zane David Memeger. “We are pleased to have reached a resolution with the defendants that calls for prompt corrective measures, as well as the implementation of forward-looking procedures designed to ensure future compliance.”
This case was handled by Assistant United States Attorney Stacey L. B. Smith, together with David Sullivan, Trial Attorney from the United States Department of Justice, Consumer Protection Branch. The matter was investigated by the United States Food and Drug Administration, with legal assistance provided by Scott Kaplan, FDA Associate Chief CounselClick here to view the indictment
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Tucson Man Found Guilty in Real Estate Investment Fraud SchemeRead the Press Release
TUCSON, Ariz. – Dino Sisneros, 42, of Tucson, Ariz., after a trial of thirteen days, was found guilty as charged by a federal jury on June 25, 2013. The charges against the defendant included three counts of wire fraud and two counts of transactional money laundering greater than $10,000. The case was tried before U.S. District Judge Cindy K. Jorgenson who will sentence Sisneros on Sept. 5, 2013.
The evidence presented at trial demonstrated that Sisneros orchestrated a real estate investment fraud scheme between 2006 – 2008 during which Sisneros misled investors by promising them high rates of return in exchange for their money which he said would be used to invest in real estate. However, instead of investing in real estate, he used large portions of his victims’ money for his own personal use, including paying for a ski trip to Colorado; paying a $7,900 hotel bill in Santa Monica, Calif.; car payments for a Cadillac Escalade, Cadillac CTS, two Nissan 350-Z’s, a Nissan Altima, and a Ford Expedition. The evidence further demonstrated that Sisneros used victim commingled funds toward his own rent payments so he could live in a multimillion dollar, 4-story home with an elevator. Sisneros received more than $900,000 from his victims but failed to pay his victims in return for their investments as he had promised.
A conviction for each count of wire fraud carries a maximum penalty of 20 years, a $250,000 fine or both. A conviction for each count of transactional money laundering greater than $10,000 carries a maximum penalty of 10 years, a $250,000 fine or both.
The investigation in this case was conducted by the Internal Revenue Service, Criminal Investigation. The prosecution was handled by Jonathan Granoff and Cory Picton, Assistant U.S. Attorneys, District of Arizona, Tucson.
CASE NUMBER: CR-12-0174-TUC-CKJ(CRP)
RELEASE NUMBER: 2013-049_SisnerosFor more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az
Trustee Pleads Guilty in Federal Court to Tax EvasionRead the Press Release
Agrees to Pay More Than $200,000 in Restitution
LUBBOCK, Texas — Randy Lynn White appeared in federal court in Lubbock, Texas, today, before U.S. District Judge Sam R. Cummings, and pleaded guilty to an Information charging one count of tax evasion, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas. He faces a maximum statutory penalty of five years in federal prison and a $250,000 fine. According to the terms of the plea agreement filed in the case, White agrees to pay the amount of the tax loss, $211,165, in restitution. He will remain on personal recognizance bond; a sentencing date was not set.
According to the factual resume filed in the case, White admits that he intentionally and willfully did not file required tax returns for 2007, 2008 and 2009 in order to evade the payment of taxes due and owing to the U.S. White agrees that as a result of this criminal conduct, the tax loss to the U.S. for those years is $211,165.
White, according to the factual resume, was the sole trustee of the Frank F. McMordie Jr Family Trust, f/b/o Frank F. McMordie III (the “Trust”). According to the factual resume, White admits that he derived substantial benefits and income from the Trust, both in administration fees from the Trust paid to him, and in monies he took from the Trust for his personal use. White had absolute control over the Trust’s assets, which consisted primarily of a large ranch in the Texas Panhandle that produced mineral interests. White paid himself excessive administrative fees and spent most of the Trust’s remaining money on extravagant personal expenditures, such as making his personal house payments, and buying motorcycles, diamond and gold jewelry and cars.
The factual resume goes on to state that White attempted to conceal his extravagant expenditures by paying a relatively small amount of the Trust’s income to the Trust’s beneficiary, Frank F. McMordie III, who resided in Mexico. White also admits that as part of his scheme to evade taxes, he disguised many of the funds that he diverted from the Trust’s bank account to his personal use by placing false business notations on the checks, falsely claiming that the expenditures were for business purposes. These checks falsely indicated that he was using the funds to operate what he designated as the “south” ranch. He falsely indicated that he was using the money for ranch operating expenses, such as cattle vaccines, loading chutes, cattle guards, trailers for the south ranch, fencing, and south ranch payroll, when, in fact, the Trust did not operate any ranch whatsoever.
The case is being investigated by Internal Revenue Service Criminal Investigation. Assistant U.S. Attorney Paulina Jacobo is in charge of the prosecution.
Three York City Men Indicted for Drug TraffickingRead the Press Release
The United States Attorney's Office for the Middle District Pennsylvania announced that a federal grand jury in Harrisburg return an indictment Wednesday charging three men with drug trafficking in York City.
According to United States Attorney Peter J. Smith, the indictment resulted from a two-year investigation by the Pennsylvania State Police and the York County Drug Task Force, conducted with the assistance of the Federal Bureau of Investigation. In that investigation, hundreds of purchases of heroin, cocaine, and crack cocaine were made from dozens of individuals some of whom were affiliated with the Latin Kings street gang. That local investigation resulted in the arrest of dozens of individuals in a sweep that began on February 6, 2013, in York County. The present indictments arose from this investigation.
The United States Attorney’s Office has indicted the following individuals for drug trafficking: Hector Rengifo, age 40; Carlos Ortaga, age unknown; Jose Cartagena, Age 35; all of York.
Previously, a grand jury indicted eight individuals affiliated with the Latin Kings for their role in the larger drug trafficking conspiracy. Those individuals include: August Ranalli, age 31; Marcus Garcia, age 26; David Ramsey, age 31; Antonio Navaro-Garcia, age 21; Brandon Jones, age 24; Michael Enriquez, age 28; Daniel Pacheco-Morales, age 41; and Carlos Martinez-Villalongo, age 36. All of the defendants are from York, Pennsylvania.
Prosecution is assigned to Assistant United States Attorney Michael A. Consiglio and Special Assistant United States Attorney David Sunday from the York County District Attorney’s Office.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilty is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
In these particular cases, the maximum penalty under the federal statute is 20 years imprisonment for the defendants and a term of supervised release following imprisonment and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
* * * *Sterling Business Owner Sentenced for Claiming to Be Minority, Service-Disabled Veteran Operated BusinessRead the Press Release
BOSTON – A Sterling, Mass. man was sentenced yesterday in United States District Court in Worcester for conspiring to defraud the Small Business Administration and other government contractors by falsely representing that his business was a minority and service-disabled veteran-owned and operated business.
Tyrone Jones, 48, was sentenced by U.S. District Judge Timothy S. Hillman to one year and one day in prison, to be followed by two years of supervised release. Jones was also ordered to forfeit $399,000. In August 2012, Jones pleaded guilty to conspiracy to commit wire fraud.
Jones and his co-conspirators submitted false statements to the Small Business Administration and other government agencies, in order to get federal government contract awards that were set aside for or preferentially awarded to disadvantaged minority and service-disabled veteran-owned and operated businesses. The submissions falsely represented that their company was owned and managed by a minority and service-disabled veteran who purportedly managed the daily operations of the business
“We take very seriously the abuse of a program that is designed to give hope and opportunity to service-disabled veterans by giving them the chance to own and operate their own businesses and to favorably compete for government contracts,” said U.S. Attorney Carmen M. Ortiz. “The fraud here aimed at usurping benefits that are intended to assist service-disabled veterans and to honor their service to our country.”
"Investigating SDVOSB program fraud is one of VA OIG's priorities because this crime deprives eligible disabled veteran-owned small businesses from receiving financial opportunities intended by this set-aside program. The VA OIG, along with our law enforcement partners, will continue this fight against SDVOSB fraud on behalf of our Nation's heroes,” said George Opfer, Inspector General for the Department of Veterans Affairs.
“These kinds of lies cause real harm to Federal programs and procurement,” said U.S. General Services Administration Inspector General Brian D. Miller.
“Federal contracts should never be awarded to persons who commit fraud or claim eligibility for contracts set-aside for our nation’s service-disabled veterans,” said Inspector General Peggy E. Gustafson of the Small Business Administration. “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.”
U.S. Attorney Ortiz; Jeffrey Hughes, Special Agent in Charge of the U.S. Department of Veterans Affairs, Office of Inspector General, Northeast Field Office; Luis A. Hernandez, Special Agent in Charge of the U.S. General Services Administration, Office of Inspector General, Office of Investigations; Michael D. Conner, Special Agent in Charge of the U.S. Army Criminal Investigation Command, Hartford Fraud Resident Agency; Inspector General Peggy E. Gustafson of the U.S. Small Business Administration, Office of the Inspector General; and Robert L. Panella, Special Agent in Charge of the U.S. Department of Labor, Office of Inspector General, Labor Racketeering and Fraud Investigations, New York Regional Office, made the announcement today. The case was prosecuted by Assistant U.S. Attorney Sara Miron Bloom of Ortiz’s office.
Statement of Attorney General Eric Holder <br /> on the Implementation of the Supreme Court’s Decision<br /> in United States v. WindsorRead the Press Release
Attorney General Eric Holder today issued the following statement regarding the United States Office of Personnel Management (OPM) guidance to Federal agencies. On June 26, 2013, the Supreme Court issued a landmark decision in United States v. Windsor, holding Section 3 of the Defense of Marriage Act, known as DOMA, unconstitutional. As a result of this decision, the Federal government will now be able to extend benefits to Federal employees and annuitants who have legally married a spouse of the same sex.
“Today’s announcement represents a historic step toward equality for all American families. The Supreme Court ruled this week that Americans in same-sex marriages are entitled to equal protection and equal treatment under the law. By extending health insurance and other important benefits to federal employees and their families, regardless of whether they are in same-sex or opposite-sex marriages, the Obama Administration is making real the promise of this important decision.
“These initial changes in federal benefits will make a meaningful, positive difference in the lives of many. But this is only the beginning. As the President directed, the Department of Justice will continue to coordinate with other federal agencies to implement this ruling as swiftly and smoothly as possible. I look forward to sharing additional information as it becomes available. We will never stop fighting to ensure equality, opportunity, and – above all – justice for everyone in this country.”
St. Paul Felon Indicted for Possessing Nine-millimeter Pistol, Distributing Crack CocaineRead the Press Release
MINNEAPOLIS—A federal indictment unsealed yesterday charges a 25-year-old felon from St. Paul with possessing several firearms as well as distributing crack cocaine. The indictment, which was filed on June 18, 2013, charges Paris Cedrell Neal with two counts of being a felon in possession of a firearm, one count of distribution of crack cocaine, and one count of using and carrying firearms during and in relation to a drug-trafficking crime. The indictment was unsealed following Neal’s initial appearance in federal court.
The indictment alleges that on December 4, 2012, Neal distributed crack cocaine while in possession of several firearms, including a 7.65-millimeter, semi-automatic pistol; a 10.35-millimeter revolver with no serial number; a .44-caliber, semi-automatic rifle; and a .22-caliber, semi-automatic rifle. In addition, the indictment alleges that on November 29, 2012, Neal possessed a nine-millimeter, semi-automatic pistol.
Because he is a felon, Neal is prohibited under federal law from possessing a firearm at any time. Neal was previously convicted in Hennepin County for second-degree assault (2005), two counts of theft of a motor vehicle (2008), and second-degree burglary (2011).If convicted, Neal faces a potential maximum penalty of 20 years in prison on the crack cocaine distribution count, ten years on each felon in possession count, and life on the using and carrying firearms count. Any sentence will be determined by a federal district court judge.
This case is the result of an investigation by the United States Bureau of Alcohol, Tobacco, Firearms and Explosives. It is being prosecuted by Assistant U.S. Attorney Thomas M. Hollenhorst.An indictment is a determination by a grand jury that there is probable cause to believe that offenses have been committed by a defendant. A defendant, of course, is presumed innocent until he or she pleads guilty or is proven guilty at trial.
St. Francis Man Charged with Assault with A Dangerous WeaponRead the Press Release
United States Attorney Brendan V. Johnson announced that Orson Black Spotted Horse, age 49, of St. Francis, South Dakota appeared before U.S. District Judge Roberto A. Lange on June 25, 2013 and pled guilty to Assault with a Dangerous Weapon. The maximum penalty upon conviction is 10 years in custody, a $250,000 fine, or both; 3 years of supervised release; and $100 to the Federal Crime Victims Fund.
The conviction stems from an incident that took place on September 3, 2012, when Black Spotted Horse hit the victim in the head with a metal pipe.
The investigation was conducted by the Rosebud Sioux Tribe Law Enforcement Services. The case is being prosecuted by Assistant U.S. Attorney Tim Maher.
A presentence investigation was ordered and a sentencing date was set for September 16, 2013. The defendant was remanded to the custody of the U.S. Marshal pending sentencing.
Shawneetown Man Pleads Guilty to Methamphetamine and Ammunition OffensesRead the Press Release
On June 26, 2013, Michael A. Lovell, 37, of Shawneetown, IL, plead guilty in United States District Court in Benton to a three-count indictment charging him with conspiracy to manufacture methamphetamine, possession of methamphetamine-making materials, and being a felon in possession of ammunition, Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced.
The methamphetamine offenses occurred between August 2010 and August 7, 2012, in Saline and Johnson Counties. The ammunition offense occurred on May 16, 2011, in Saline County. Lovell is currently being held without bond pending an October 17, 2013, sentencing hearing. At that time, he faces a penalty of up to 20 years in prison, followed by 3 years supervised release, and a fine of $1,000,000.
The investigation was conducted by the Southern Illinois Drug Task Force, Johnson County Sheriff’s Office, Vienna Police Department, Saline County Sheriff’s Office, Illinois State Police Methamphetamine Response Team, and the Bureau of Alcohol, Tobacco, Firearms, and Explosives.
The case is assigned to Assistant United States Attorney Amanda A. Robertson for prosecution.
Security Contractor Sentenced to Four Years in Prison <br /> for Role as Figurehead Owner in $31 Million Small Business Fraud SchemeRead the Press Release
The chief executive officer of a Virginia-based security contracting firm was sentenced today to serve four years in prison for serving as a figurehead owner of a front company created to obtain more than $31 million intended for disadvantaged small businesses through the Small Business Administration’s (SBA) Section 8(a) program, which allows qualified small businesses to receive sole-source and competitive-bid contracts set aside for minority-owned and disadvantaged small businesses.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney Neil H. MacBride of the Eastern District of Virginia; National Aeronautics and Space Administration (NASA) Inspector General Paul K. Martin; SBA Inspector General Peggy E. Gustafson; Defense Criminal Investigative Service (DCIS) Special Agent in Charge of Mid-Atlantic Field Office Robert E. Craig; General Services Administration (GSA) Inspector General Brian D. Miller; and Department of Homeland Security (DHS) Deputy Inspector General Charles K. Edwards made the announcement after the sentencing today.
Dawn Hamilton, 48, of Brownsville, Md., was sentenced by U.S. District Judge T. S. Ellis III in the Eastern District of Virginia. In addition to her prison term, Hamilton was sentenced to serve three years of supervised release and ordered to forfeit approximately $1,232,145 and pay an additional fine of $1 million. On March 15, 2013, Hamilton pleaded guilty to major government fraud.According to court documents, in approximately 2011, Keith Hedman, 53, of Arlington, Va., formed Company A, which was approved to participate in the 8(a) program based on the 8(a) eligibility of its listed president and CEO, an African-American female. When the listed president and CEO left Company A in 2003, Hedman became its sole owner, and the company was no longer 8(a)-eligible.
In 2003, Hedman created Company B, another Arlington-based security contractor, to ensure that he could continue to gain access to 8(a) contracting preferences for which Company A was no longer qualified. Prior to applying for Company B’s 8(a) status, Hedman selected Hamilton, a Company A employee at the time, to serve as a figurehead owner based on her Portuguese heritage and history of social disadvantage. In reality, the new company was managed by Hedman and Company A senior leadership, in violation of 8(a) rules and regulations. To deceive the SBA, the co-conspirators falsely claimed that Hamilton formed and founded the company and that she was the only member of the company’s management. Based on those misrepresentations, Company B obtained 8(a) status in 2004.
From 2004 through February 2012, Hedman – not Hamilton – impermissibly exercised ultimate decision-making authority and control over Company B by directing its finances and allocation of personnel and government contracting activities. Hedman nonetheless maintained the impression that Hamilton was leading the company, including through forgeries of Hamilton’s signatures on documents she had not drafted or seen. Hamilton signed annual reviews and other documents submitted to the SBA that falsely claimed, among other things, that she controlled Company B. Hedman also retained ultimate control over the shell business’s bank accounts throughout its existence. In 2010, Hedman withdrew $1 million in cash from Company B’s accounts and gave the funds in cash to Hamilton and three other conspirators. In 2011, Hedman approached Hamilton’s brother about starting another shell company to continue the scheme. The trio submitted another fraudulent application to the SBA, but it was rejected.
In total, the scheme netted government contracts valued at more than $153 million, from which Company B obtained more than $31 million in contract payments. The various conspirators netted more than $6.1 million that they were not entitled to receive from those payments. Seven other defendants have pleaded guilty in the scheme.
This case is being investigated by NASA Office of the Inspector General, the SBA-OIG, DCIS-OIG, GSA-OIG and DHS-OIG, with assistance from the Defense Contract Audit Agency. Assistant U.S. Attorneys Chad Golder and Ryan Faulconer, a former Trial Attorney for the Criminal Division’s Fraud Section, are prosecuting the case on behalf of the United States.
Security Contractor Sentenced to 48 Months for Role as Figurehead Owner in $31 Million Disadvantaged Small Business Fraud SchemeRead the Press Release
ALEXANDRIA, Va. – The chief executive officer of a Virginia-based security contracting firm was sentenced today to serve 48 months in prison for serving as a figurehead owner of a front company created to obtain more than $31 million intended for disadvantaged small businesses through the Small Business Administration’s (SBA) Section 8(a) program, which allows qualified small businesses to receive sole-source and competitive-bid contracts set aside for minority-owned and disadvantaged small businesses.
United States Attorney Neil H. MacBride of the Eastern District of Virginia; Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; National Aeronautics and Space Administration (NASA) Inspector General Paul K. Martin; SBA Inspector General Peggy E. Gustafson; Defense Criminal Investigative Service (DCIS) Special Agent in Charge of Mid-Atlantic Field Office Robert E. Craig; General Services Administration (GSA) Inspector General Brian D. Miller; and Department of Homeland Security (DHS) Deputy Inspector General Charles K. Edwards made the announcement after the sentencing today.
Dawn Hamilton, 48, of Brownsville, Md., was sentenced by U.S. District Judge Gerald Bruce Lee in the Eastern District of Virginia. In addition to her prison term, Hamilton was sentenced to serve three years of supervised release and ordered to forfeit approximately $1.2 million and additionally ordered to pay a fine of $1 million. On March 15, 2013, Hamilton pleaded guilty to major government fraud.According to court documents, in approximately 2011, Keith Hedman, 53, of Arlington, Va., formed Company A, which was approved to participate in the 8(a) program based on the 8(a) eligibility of its listed president and CEO, an African-American female. When the listed president and CEO left Company A in 2003, Hedman became its sole owner, and the company was no longer 8(a)-eligible.
In 2003, Hedman created Company B, another Arlington-based security contractor, to ensure that he could continue to gain access to 8(a) contracting preferences for which Company A was no longer qualified. Prior to applying for Company B’s 8(a) status, Hedman selected Hamilton, a Company A employee at that time, to serve as a figurehead owner based on her Portuguese heritage and history of social disadvantage. In reality, the new company was managed by Hedman and Company A senior leadership in violation of 8(a) rules and regulations. To deceive the SBA, the co-conspirators falsely claimed that Hamilton formed and founded the company and that she was the only member of the company’s management. Based on those misrepresentations, Company B obtained 8(a) status in 2004.
From 2004 through February 2012, Hedman – not Hamilton – impermissibly exercised ultimate decision-making authority and control over Company B by directing its finances, allocation of personnel and government contracting activities. Hedman nonetheless maintained the impression that Hamilton was leading the company, including through forgeries of signatures of Hamilton to documents she had not seen or drafted. Hamilton signed annual reviews and other documents submitted to the SBA that falsely claimed, among other things, that she controlled Company B. Hedman also retained ultimate control over the shell business’s bank accounts throughout its existence. In 2010, Hedman withdrew $1 million in cash from Company B’s accounts and gave the funds in cash to Hamilton and three other conspirators. In 2011, Hedman approached Hamilton’s brother about starting another shell company to continue the scheme. The trio submitted another fraudulent application to the SBA, but it was rejected.
In total, the scheme netted government contracts valued at more than $153 million, from which Company B obtained more than $31 million in contract payments. The various conspirators netted more than $6.1 million that they were not entitled to receive from those payments. Seven other defendants have pleaded guilty in the scheme.
This case is being investigated by NASA Office of the Inspector General, the SBA-OIG, DCIS-OIG, GSA-OIG and DHS-OIG, with assistance from the Defense Contract Audit Agency. Assistant U.S. Attorneys Chad Golder and Ryan Faulconer, a former Trial Attorney for the Criminal Division’s Fraud Section, are prosecuting the case on behalf of the United States.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.