Latest Records
Newest first across public DOJ and U.S. Attorney press releases.
Monday 13 May 2013
Ringleader Sentenced to Seven Years in Teacher Certification Cheating ScamRead the Press Release
Memphis, TN – Clarence Mumford, Sr., 59, of Memphis, was sentenced to 84 months in federal prison and ordered to pay $167,338.84 in restitution after pleading guilty in February 2013 to aggravated identity theft and to conspiring to commit mail fraud, wire fraud, Social Security fraud and identity theft, announced United States Attorney Edward L. Stanton III. Mumford, Sr. was originally charged in July 2012 in a 45-count indictment alleging a conspiracy to violate the laws of the United States, mail fraud, wire fraud, social security fraud, aggravated identity theft and fraud in connection with identification documents. The original indictment was superseded twice, once in August 2012, and a second time in September 2012, ultimately resulting in a 63-count indictment charging Mumford, Sr. and twelve other individuals.
# # # #
"At a time when school administrators and teachers -- especially those in West Tennessee -- are working so hard, with fewer resources, to meet the challenge of improving our educational system, it is galling that Mumford thought he could get away with his brazen scheme,” said U.S. Attorney Stanton. “His sentence demonstrates that crimes against the integrity of our schools will not be tolerated. We were proud to work with the United States Secret Service, the Tennessee Bureau of Investigation and the Shelby County District Attorney General’s Office to bring Mumford to justice. Criminals like him have no place in our schools. Our school systems have enough challenges already."
Mumford, Sr. is the ninth defendant sentenced in the case. In April 2013, United States District Judge John T. Fowlkes sentenced John Bowen, 64, of Memphis, Tennessee; Dante Dowers, 41, of Belle Glade, Florida; Valerie Humphrey, 47, of Oakland, Tennessee; Felippia Kellogg, 42, of Memphis; Carlo McClelland, 35, of Meridian, Mississippi; Carlos Shaw, 38, of Memphis; Jeryl Shaw, 40, of Puyallup, Washington and Shantell Shaw, 41, of Memphis (wife of Jeryl Shaw but no relation to Carlos Shaw). All but Dowers, who was sentenced to six months of home confinement, have been sentenced to prison.
In February, during Mumford, Sr.’s guilty plea hearing, it was revealed that numerous individuals paid Mumford, Sr. to arrange for PRAXIS examinations to be taken on their behalf. Many were teaching under temporary licenses and needed the examinations passed to retain their
jobs. Others were attempting to obtain teaching jobs, or were teachers seeking additional endorsements on their licenses, in subjects such as guidance counseling. Twenty-six individuals who had one or more examinations arranged by Mumford were named at the February hearing. Of those, many obtained teaching licenses in Tennessee and Mississippi based on the examinations. Many, however, never obtained licenses. Sometimes Mumford’s test-takers did not show up or did not pass.
Two witnesses who testified today at Mumford’s sentencing hearing stated that they paid Mumford $3,000 and $6,000, respectively, but neither received valid scores after paying Mumford. Both received passing scores for examinations taken by Mumford’s test-takers, but Educational Testing Services (“ETS”) flagged the tests taken on behalf of both witnesses for handwriting irregularities. Mumford told both to get doctors’ notes to explain the handwriting irregularities. One did so, and one refused, but it did not work out for either of them. Nevertheless, Mumford did not repay any of the money they had given him.
Investigators began to unravel the ring after Bowen was caught at Arkansas State University taking a test in the morning in one person’s name and in the afternoon in a second person’s name. Proctors caught Bowen and two others who had taken morning and afternoon sessions in multiple names. ETS, which created and administered the PRAXIS examinations, investigated and reported the incident to the Tennessee Department of Education, which referred the case to the Tennessee Bureau of Investigation. The United States Secret Service later joined the investigation.
Sentencing documents filed in the case reveal that Mumford arranged for at least 100 examinations on behalf of 50 different individuals. Mumford made over $100,000 during the course of the scheme.
This investigation is being conducted by the Tennessee Bureau of Investigation and the United States Secret Service. Assistant U.S. Attorney John Fabian and Special Assistant U.S. Attorney Kirby May represent the government.
The charges and allegations contained in the indictment are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Rhode Island Tax Preparer Sentenced to Federal Prison for Violating Court Order Barring Him from Preparing Tax Returns and Tax EvasionRead the Press Release
PROVIDENCE, R.I. – Michael Brier, 50, owner of Refunds Now Inc., a tax preparation firm based in Providence, R.I., was sentenced on Friday to 27 months in federal prison for violating a federal judge’s order permanently barring him from preparing tax returns for others, and for underreporting more than $1.1 million dollars in income between 2004 and 2009, and failing to pay nearly $400,000 in federal taxes, announced United States Attorney Peter F. Neronha and William P. Offord, Special Agent in Charge of the Boston office of the Internal Revenue Service (IRS), Criminal Investigation.
At sentencing, U.S. District Court Chief Judge Mary M. Lisi also ordered Brier to serve 3 years of supervised release upon completion of his prison term and to pay back taxes to the IRS in the amount of $399, 424. Brier pleaded guilty on February 11, 2013, to one count of criminal contempt and one count of tax evasion.
In November 2010, the court entered a preliminary injunction against Brier and his employees after finding that at least 300 tax returns prepared by Brier and Refunds Now understated customers’ tax liabilities, and that Brier and his employees fabricated tax deductions and credits on the returns. Brier and his employees prepared approximately 24,000 federal income tax returns between 2003 and 2007. An IRS examination 350 of those returns determined that 92 percent of them required adjustments, resulting in a government-estimated loss of more than $1.1 million dollars in tax revenue.
On March 7, 2011, U.S. District Court Judge Mary M. Lisi permanently barred Michael Brier and his employees from preparing federal income tax returns for others.
On April 26, 2011, IRS Criminal Investigation agents executed a court-authorized search at Refunds Now and seized copies of tax returns prepared by Brier and several of his employees that were filed after the date of the permanent injunction.
At the time of his guilty plea, Brier admitted to the court that he underreported his taxable income to the IRS between 2004 and 2009 totaling $1,152,679, and that he underpaid $399,424 in taxes to the IRS.
The case was prosecuted by Assistant U.S. Attorney Richard B. Myrus.Brier has been ordered to self-surrender by June 4, 2013, to begin serving his prison sentence.
###
To assist the media and the public, a glossary of federal judicial terms and procedures is available at http://www.justice.gov/usao/justice101/Contact: 401-709-5357
[email protected]Rapid City Man Convicted on Assault ChargesRead the Press Release
United States Attorney Brendan V. Johnson announced that a Rapid City man, Richard Harris Bear Runner, was convicted on May 8, 2013 by a jury in federal court on charges of Assault with a Dangerous Weapon and Assault Resulting in Serious Bodily Injury.
Bear Runner, age 24, was indicted in November 2012 after an investigation conducted by the Bureau of Indian Affairs Office of Justice Services and the Oglala Sioux Tribe Department of Public Safety. The maximum penalty upon conviction is 10 years= imprisonment and/or a $250,000 fine.
Johnson said the charges relate to an incident occurring in September 2012 when Bear Runner assaulted a woman with a wooden stick that had a sharp hook on it, causing multiple cuts on her legs and back.
The case was prosecuted by Assistant U.S. Attorneys Sarah B. Collins and Wayne A. Venhuizen. A sentencing date has not been set.
Queens-Based Operator of 18 Chinese-Language Child Pornography Websites Pleads Guilty in Manhattan Federal CourtRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that YONG WANG, who operated 18 Chinese-language websites containing child pornography, pled guilty to advertising in connection with the sexual exploitation of children. WANG pled guilty Friday in Manhattan federal court before U.S. District Judge Paul G. Gardephe.
Manhattan U.S. Attorney Preet Bharara said: “Yong Wong made hundreds of thousands of dollars from a vast network of websites that he operated from the comfort and safety of his home while capitalizing on the sexual exploitation of children. But in fact he was not safe after all because the FBI infiltrated his network and caught up with him. This Office, along with our investigative partners, remains steadfast in our commitment to prosecute and punish those like Wang, who earn a living online at the expense of children’s well-being and innocence.”
According to the Indictment, other documents filed in Manhattan federal court, and statements made during WANG’s guilty plea proceeding:
WANG maintained 18 Chinese-language websites out of his apartment in Flushing, New York. Members could access numerous links to an extensive child pornography collection that included images and videos of children exposing their genitals, engaging in sexually explicit conduct with adults, and in sadistic and/or masochistic depictions. To access the websites, individuals had to purchase a “VIP membership” or accumulate a certain number of points. WANG charged customers $25 for a quarterly membership or $100 for a lifetime membership. Undercover FBI agents registered for a VIP membership with WANG and gained access to one of the websites which was titled - in Chinese - “Empire of the Young and Innocent Fragrances.” On the website, users were directed to different forums with links that were titled with descriptive names, such as “Young Young Empire,” “Young Girl Beauty Photos Military Region,” “Young Boy Movie Zone,” and “Exclusive Quality Young Girl Photos Set.” WANG made in excess of $700,000 in connection with his operation of these websites, which he forfeited as part of his plea agreement.
WANG, 28, of Flushing, New York, faces a maximum sentence of 30 years in prison and a mandatory minimum sentence of 15 years in prison. He is scheduled to be sentenced by Judge Gardephe on August 23, 2013 at 2:30 p.m.
Mr. Bharara praised the investigative work of the Federal Bureau of Investigation. He also thanked the Chinese Ministry of Public Security for their cooperation and assistance.
This case is being handled by the Office’s Complex Frauds Unit. Assistant U.S. Attorneys Rosemary Nidiry and Zachary Feingold are in charge of the prosecution.
Wang, Yong Indictment
Pittsburg Mother and Son Plead Guilty to Conspiring to File False ClaimsRead the Press Release
OAKLAND, Calif. – Tonya Gilard and Tierre Crummie pleaded guilty last week to conspiring to file false tax returns, United States Attorney Melinda Haag and Internal Revenue Service, Criminal Investigation, Special Agent in Charge José M. Martinez announced.
According to the plea agreements, in January 2009, Gilard and Crummie assisted in filing false federal income tax returns with the IRS. Gilard obtained the personal identifying information of others, including her son, Crummie, which she used to file false federal income tax returns. Gilard and Crummie also filed tax returns in their own names that falsely claimed entitlement to the first-time homebuyer’s credit.
In furtherance of the conspiracy, Crummie provided Gilard with individuals’ bank account information and e-mail addresses, while another person provided names to use on the false tax returns. On April 30, 2009, a search warrant was executed at the defendants’ residence where $69,800.10 was seized. The defendants admitted the seized money was proceeds from the false refund scheme.
In total, 91 false federal income tax returns were filed as part of this scheme and $688,687 in false refunds were issued by the IRS.
Gilard, 44 and Crummie, 24, both of Pittsburg, California, were indicted on August 8, 2012. They were charged with one count of conspiracy to file false claims. They pleaded guilty to the sole count in the indictment.
The maximum statutory penalty for conspiracy to file false claims, in violation of Title 18 U.S.C. § 286 is 10 years in prison and a $250,000 fine. However, any sentence following conviction would be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Thomas Newman is the Assistant U.S. Attorney who is prosecuting this case along with Special Assistant U.S. Attorney Charles Parker. The prosecution is the result of an investigation by the Internal Revenue Service, Criminal Investigation.
Organizer of International Securities Fraud Ring Sentenced to Prison for Using Hackers to Falsely Inflate Stock PricesRead the Press Release
TRENTON, N.J. – The central organizer of a worldwide conspiracy to manipulate stock prices through a “botnet” network of virus-controlled computers was sentenced today in Trenton federal court to 71 months in prison, New Jersey U.S. Attorney Paul J. Fishman announced.
Christopher Rad, 44, of Cedar Park, Texas, was previously convicted, following a 9-day jury trial, of six counts arising from the fraud scheme: conspiring to further securities fraud using spam; conspiring to transmit spam through unauthorized access to computers; and four counts of transmission of spam by unauthorized computers.
The sentence was imposed by U.S. District Judge Joel A. Pisano, who also presided over the trial.
“Christopher Rad’s use of hackers to drive his pump-and-dump scheme illustrates a trend toward the modern mechanization of old-school scams,” said U.S. Attorney Fishman. “Law enforcement is constantly anticipating and adapting as criminals operate in a more virtual – and more global – world. As a result, Rad will spend years in prison for manipulating our markets to steal his millions.”
According to documents filed in this case and statements made in court:
Rad conspired with stock promoters in a scheme to manipulate the price and volume of dozens of particular stocks, including stocks with ticker symbols RSUV, QRVS, VSHE, SVXA and ASIC, in order to later sell them at an artificially inflated price – a practice known as a “pump and dump” scheme. The scheme began as early as November 2007 and continued through February 2009.
As part of the scheme, Rad organized others to manipulate the stock prices. He sought out and engaged spammers, then sent them precise language to include in their spam campaigns.
The spammers included two individuals who distributed spam through botnets. To create a botnet, viruses were sent out to infect computers around the world, creating a virtual army of hijacked computers. The spammers then caused the botnets to distribute spam to promote the stocks Rad wanted to manipulate. Infected computers were found in New Jersey, Europe, Russia and elsewhere. The botnet was controlled from command and control servers located overseas, including in Russia and China.
Rad, who went by the alias “billy_sack,” communicated with the spammers by Skype, in most instances knowing them only by their aliases. During the 22-month conspiracy, Rad paid the spammers more than $1.4 million, making payments through e-Gold and money wires. Payments intended for a botnet operator in Russia were made through at least eight different countries. The wire instruction notations included false information such as payments for “Dell Monitors,” “touch panels” and “transportation services.”
Rad also agreed with others to engage in bad-faith purchases of RSUV to create the impression among spam recipients that there was active trading in the stock.
At the same time, hackers hacked into the brokerage accounts of third parties, liquidated the stocks in those accounts, then used the accounts to purchase shares of some of the stocks the scheme sought to manipulate. This increased the volume of shares being traded and created an impression that the stocks were worth purchasing.In all, Rad made approximately $2.8 million from his schemes.
In addition to the prison term, Judge Pisano sentenced Rad to serve five years of supervised release and ordered him to pay a $30,000 fine. Restitution will be determined at a later date.
Rad’s coconspirators, Doyle Scott Elliott and James Bragg, previously pleaded guilty to securities fraud and transmission of spam through falsely registered e-mail addresses. They await sentencing.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, with the investigation. He also thanked the U.S. Securities and Exchange Commission’s Division of Enforcement, led by Acting Director George Canellos.
The government is represented by Assistant U.S. Attorney Andrew S. Pak, of the Computer Hacking and Intellectual Property Section of the U.S. Attorney’s Office Economic Crimes Unit (ECU); Christopher J. Kelly, Deputy Chief of the ECU; and Erez Liebermann, Deputy Chief of the Office’s Criminal Division in Newark.
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’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
13-191Defense counsel: Francis Montenegro Esq., Austin, Texas
Omaha Man Sentenced to 6 years for Child PornographyRead the Press Release
United States Attorney Deborah R. Gilg announced that Michael L. Abraham, age 47 of Omaha, was sentenced in federal court in Omaha, Nebraska for receiving and distributing child pornography. The Honorable John M. Gerrard sentenced Abraham to the custody of the United States Bureau of Prisons for six (6) years. There is no parole in the federal system. After his release from prison Abraham will begin a seven (7) year term of supervised release and will be required to register as a sex offender.
The sentencing stemmed from an undercover investigation by officers of the Nebraska State Patrol and the FBI Cyber Crimes Task Force. Officers discovered child pornography being shared online from an IP address assigned to Abraham’s home. On September 21, 2012, a search warrant was obtained for Abraham’s computer. A forensic review of the computer media revealed over 100 videos and in excess of 50,000 images of child pornography and child erotica.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys= Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov
This matter was investigated by the Omaha FBI=s Cyber Crime Task Force (CCTF), of which the Nebraska State Patrol, is a partner. The Omaha CCTF is a multi-jurisdictional task force consisting of eleven federal, state and local law enforcement agencies from Nebraska and Iowa. The mission of the Omaha CCTF is to investigate and apprehend high technology criminals and to protect our communities by preventing high technology crime and national security threats involving computers and computer networks. The Omaha CCTF was established on the premise that the capabilities of law enforcement agencies to investigate computer and high technology related crimes are enhanced in a task force setting involving the sharing of resources and expertise.
Minneapolis Felon Pleads Guilty to Possessing A .44-caliber RevolverRead the Press Release
MINNEAPOLIS—Earlier today in federal court, a 28-year-old felon from Minneapolis pleaded guilty to possessing a .44-caliber revolver. Eugene Denzel Johnson pleaded guilty to one count of being a felon in possession of a firearm. Johnson, who was indicted on November 20, 2012, entered his plea before United States District Court Judge Ann D. Montgomery.
In his plea agreement, Johnson admitted that on September 5, 2012, he was riding in a vehicle that police attempted to stop following a traffic violation. Johnson admitted that he jumped out of the passenger side of the vehicle, with a gun tucked into his waistband, and ran. Officers spotted the gun when Johnson exited the vehicle and chased him. Johnson was apprehended nearby a short time later. Officers recovered the gun after they used a canine to trace the path Johnson had taken.
Because he is a felon, Johnson is prohibited under federal law from possessing firearms at any time. He was previously convicted in Hennepin County for first-degree aggravated robbery (2005 and 2010), in Ramsey County for theft of a motor vehicle (2003), and in Dakota County for criminal damage to property (2003).For his crime, Johnson faces a potential maximum penalty of ten years in federal prison. Judge Montgomery will determine his sentence at a future hearing, yet to be scheduled. This case is the result of an investigation by the Minneapolis Police Department and the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives. It is being prosecuted by Assistant U.S. Attorney Amber M. Brennan.
The case was charged under Project Exile Minneapolis. That law enforcement initiative was launched on July 22, 2010, as part of a city-wide effort to reduce gun violence. Through Project Exile, the Minneapolis Police Department and the ATF work together to apprehend serial criminals for violations of gun laws. The Hennepin County Attorney’s Office then teams up with the U.S. Attorney’s Office to determine where those offenders will most effectively be prosecuted – state or federal court. Those determinations are based on the offenders’ criminal histories and current charges, among other factors. To date, the U.S. Attorney’s Office has brought charges against almost two dozen serious habitual criminals through Project Exile Minneapolis.Michigan Woman Sentenced for Role in International Wire Fraud ConspiracyRead the Press Release
BUFFALO, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that Renee Britton, 25, of Taylor, Michigan, who was convicted of wire fraud for her participation in an international wire fraud ring, was sentenced to eight months of home detention and three years of probation by Chief U.S. District Court Judge William M. Skretny. Britton was also ordered to pay up to $26,736.95 in restitution to victims of the scheme.
Assistant U.S. Attorney Fauzia K. Mattingly, who handled the case, stated that Britton received payments from victims who had applied for loans over the Internet with seemingly legitimate financial lenders which were in fact virtual companies being operated by scammers in Canada. The victims were led to believe that once they paid an up-front fee to Britton and others, they would receive the loan proceeds. The victims never received the loans or a refund of their payments. To date, defrauded victims have lost more than $3.5 million to the loan scheme, and approximately 2,700 victims of the fraud have been identified by law enforcement. In total, 21 individuals have been arrested in connection with this fraud scheme, and the cases are pending before the U.S. District Court in Buffalo.
The sentencing is the result of an investigation by Special Agents of Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent in Charge, James C. Spero.Martinsburg Resident Enters Plea of Guilty to Drug ChargeRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-7725 ● Contact: Chris Zumpetta-Parr, Public Affairs SpecialistFollow us on Twitter @NDWVnews
MARTINSBURG, WEST VIRGINIA - A 32-year old Martinsburg resident entered a plea of guilty in United States District Court in Martinsburg before Judge Gina M. Groh.
United States Attorney William J. Ihlenfeld, II, announced that:
CARLOS EDWARD CAREY, age 32, of Martinsburg, entered a plea of guilty to “Distribution of Crack Cocaine within 1,000 feet of the Blue Ridge Community and Technical College.” CAREY, who is free on bond pending sentencing, faces at least 1 and up to 60 years imprisonment and a fine of $4,000,000, due to a prior felony drug conviction in the Northern District of West Virginia. This case was prosecuted by Assistant United States Attorney Jarod J. Douglas and investigated by the Eastern Panhandle Drug & Violent Crime Task Force, consisting of officers from the West Virginia State Police - Bureau of Criminal Investigation, the Martinsburg Police Department, and the Berkeley County Sheriff’s Department.
Man Who Recorded Girls with Hidden Camera Sentenced to 15 Years in Prison for Production of Child PornographyRead the Press Release
CAMDEN, N.J. – A Morris County, N.J., man was sentenced today to 180 months in prison for using hidden cameras to record young girls in his home, U.S. Attorney Paul J. Fishman announced.
Ronald Oshrin, 50, of Budd Lake, N.J., previously pleaded guilty before U.S. District Judge Joseph H. Rodriguez, to an Information charging him with one count of production of child pornography. Judge Rodriguez imposed the sentence today in Camden federal court.
According to documents filed in this case and statements made in court:
Oshrin admitted that between 2007 and April 2012, he installed hidden cameras in a bedroom and a bathroom of his home in order to record nine young girls in various states of undress. Oshrin edited the videos to produce still photographs and, during that time period, distributed the videos and the still photographs over the Internet. He also admitted to sexual contact with certain minors.
U.S. Attorney Fishman credited special agents of the FBI Newark Division’s Cyber Crime Task Force, under the direction of Special Agent in Charge Aaron T. Ford, and the Mount Olive Police Department, under the direction of Chief Mark Spitzer, for the investigation leading to the charge. He also thanked the Morris County Prosecutor’s Office for their role in the investigation.
In addition to the prison term, Judge Rodriguez sentenced Oshrin to 10 years of supervised release.The government is represented by Assistant U.S. Attorney Robert Frazer, Chief of the General Crimes Unit, and Assistant U.S. Attorney Elizabeth M. Harris of the U.S. Attorney’s Office General Crimes Unit in Newark.
13-190
Defense counsel: James Patton Esq., Livingston, N.J.Lebanon Trucking Company Owners Sentenced for $800,000 Scheme to Defraud Tracker MarineRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that that the owners of a Lebanon, Mo., trucking company have been sentenced for their roles in a conspiracy to defraud Tracker Marine, a Springfield, Mo.-based manufacturer of boats and trailers sold throughout North America.
James Keith Ivey, 53, and his wife, Melinda Kay Ivey, 43, both of Lebanon, were sentenced by U.S. District Judge Gary A. Fenner on Friday, May 10, 2013. James Ivey was sentenced to five years and 10 months in federal prison without parole. Melinda Ivey was sentenced to two years and six months in federal prison without parole. The Iveys are jointly and severally liable to pay $797,325 in restitution.
On Aug. 15, 2012 the Iveys were found guilty following a bench trial before U.S. District Judge Richard E. Dorr. The Iveys and co-defendant Paul Ray Hunting, 40, of Paso Robles, Calif., devised a scheme to defraud Tracker Marine, LLC, from January 2006 to April 2009, by inflating purchase orders and shipping invoices. During that time, the Iveys and Hunting caused more than 2,550 fraudulent invoices to be submitted to Tracker, which created a total loss of at least $797,325 to Tracker.
The Iveys owned and operated J&M Trucking, Inc., in Lebanon. Tracker contracted with J&M to transport boats and trailers to Tracker’s dealers located throughout North America. Hunting, formerly of Laclede County, Mo., was promoted to transportation manager for Tracker in 2006.
Hunting pleaded guilty to his role in both a wire fraud conspiracy and a money-laundering conspiracy as well as to failing to file an income tax return. Hunting, who was sentenced to one year and one day in federal prison, was ordered to pay $294,496 in restitution.
J&M’s compensation from Tracker was determined primarily by the distance its trucks traveled. Hunting caused Tracker to make payments to J&M in excess of the contract amount by listing an inflated and false number of billable miles on purchase orders. In exchange, James Ivey paid Hunting a portion of the revenue generated by the fraudulently increased billable miles, in cash. From 2006 to 2008, James Ivey paid Hunting a total of $265,775.
At the beginning of the scheme there was no set amount for Hunting’s increases to the billable miles on purchase orders. However, in April 2006, James Ivey and Hunting agreed on a set amount of 158 miles as being the amount Hunting would add to each purchase order, because when multiplied by the then-applicable reimbursement rate of $1.90 per mile, the result was an additional $300 per trip. This amount allowed for an even three-way split between Hunting, James Ivey and Melinda Ivey. The defendants continued the practice of inflating billable miles by 158 miles per trip, even after the reimbursement rate was increased to $2.10 per mile in January 2007.
However, J&M paid its drivers for the actual miles they drove, not the number of miles for which J&M invoiced Tracker.
In addition to the fraud conspiracy, James and Melinda Ivey were found guilty of a money-laundering conspiracy related to the cash payments to Hunting, which involved the proceeds of the mail and wire fraud conspiracy. Approximately every two weeks James Ivey, often accompanied by Melinda Ivey, met Hunting (usually in a parking lot in Lebanon) and paid Hunting his share of the proceeds generated from the fraudulent invoices, in cash. Hunting claimed some of those payments on his federal income tax return as income from a catering business, which was false. The Iveys claimed the payments represented a percentage of revenue generated by two trucks they claimed Hunting owned and was leasing to J&M, which was also false.
In addition to the fraud and money-laundering conspiracies, James and Melinda Ivey were convicted together in nine counts of wire fraud and James Ivey was convicted of 10 additional counts of wire fraud. The Iveys were each convicted of one count of making false statements to federal agents.
This case was prosecuted by Assistant U.S. Attorney Steven M. Mohlhenrich. It was investigated by the FBI and IRS-Criminal Investigation.
Las Vegas Physician Sentenced for Tax Evasion and Failing to File Income Tax ReturnsRead the Press Release
Robert David Forsyth, of Las Vegas, was sentenced late Friday in U.S. District Court in Las Vegas to 27 months in prison for income tax evasion and failing to file income tax returns, the Justice Department and the Internal Revenue Service (IRS) announced. He was also sentenced to 3 years of supervised release and ordered to pay $306,171. Forsyth was indicted in April 2012 and pleaded guilty to the indictment on April 22, 2013.
According to court documents, from 1999 through 2008, Forsyth worked as a physician and earned income from a variety of sources, including his medical practice, expert witness fees, and, beginning in 2002, Social Security benefits. Forsyth, however, failed to file an individual income tax return from 1999 through 2008. In fact, according to the indictment, Forsyth has not filed an income tax return since the 1994 tax year.
Court documents further established that instead of filing tax returns and paying his taxes, Forsyth, a Canadian citizen and U.S. permanent resident alien, closed all of his personal bank accounts and used a third party business to cash his paychecks. He made extensive use of cash including using cash to pay personal expenses in an effort to avoid detection. Throughout the years that Forsyth evaded payment of his taxes, he used income that he earned to fund his own lifestyle. Instead of paying the IRS, Forsyth spent money on gambling, luxury items, and hotel accommodations in San Jose, Calif., Costa Rica and Bangkok.
Assistant Attorney General Keneally commended the efforts of special agents from IRS-Criminal Investigation, who investigated the case, and Tax Division Trial Attorney Mark L. Williams, who prosecuted the case.
Lafayette Man Pleads Guilty to Possession of Child Pornography Containing Images of InfantsRead the Press Release
LAFAYETTE, La.: United States Attorney Stephanie A. Finley announced today that Ray Hatton III, 30, of Lafayette, pleaded guilty Tuesday before U. S. District Judge Richard T. Haik, to possessing child pornography involving some images of infants.
According to the evidence presented at the guilty plea, law enforcement authorities used computer surveillance software which detected the defendant downloading child pornography. He used the internet file sharing program Limewire to download the files. Limewire is an internet peer to peer site used to trade files among members and is regularly used to distribute child pornography. After obtaining a warrant, authorities searched his residence on March 8, 2012, and seized the defendant’s computer. Hatton was found to have downloaded 10 movies of child pornography. Some of the pornography depicted infants and very young children.
Hatton faces a minimum of five years to a maximum of 20 years incarceration, a $250,000 fine, and five years of supervised release. The Lafayette Police Department and the Department of Homeland Security conducted the investigation. Assistant U.S. Attorney John Luke Walker is prosecuting the case. Hatton was indicted Dec. 11, 2012.This case is part of Project Safe Childhood, a U.S. Department of Justice 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, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The U.S. Attorney’s Office and the U.S. Department of Homeland Security/Homeland Security Investigations/Immigration & Customs Enforcement (ICE) encourages the public to report suspected child predators and any suspicious activity through its toll-free hotline at (866) DHS-2ICE. Investigators are available at all hours to answer hotline calls. Tips or other information can also be submitted to ICE online at www.ice.gov/exec/forms/hsi-tips/tips.asp.
Kareem H. Wood Sentenced to Serve over 15 Years in Prison for Distribution of Crack CocaineRead the Press Release
GREENEVILLE, Tenn. – On May 13, 2013, Kareem Hussan Wood, 35, of Johnson City, Tenn., was sentenced to serve 188 months in prison, by the Honorable J. Ronnie Greer, U.S. District Judge. Upon his release from prison, he will be subject to supervised release under the supervision of the U.S. Probation Office for six years.
Wood pleaded guilty in December 2012 to distribution of crack cocaine. He faced a maximum statutory sentence of 30 years for the offense. Wood was the subject of an undercover investigation by the Johnson City Police Department into the distribution of crack cocaine, whereby he was recording selling crack cocaine on numerous occasions.
The Johnson City Police Department was responsible for the investigation leading to the indictment of Wood. Assistant U.S. Attorney J. Gregory Bowman represented the United States.
KC Employee Pleads Guilty to Fraud Scheme to Cheat Health Insurance ProgramRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Kansas City, Mo., employee pleaded guilty in federal court today to his role in a scheme in which hundreds of public employees defrauded their health insurance program of more than $300,000 by falsely claiming to have run marathons and competed in triathlons for cash incentives.
Matt Tholen, 29, of Kansas City, Mo., pleaded guilty before U.S. District Judge Gary A. Fenner to one count of wire fraud.
Tholen, who was employed by the city as an emergency medical technician, received health insurance coverage from Blue Cross/Blue Shield of Kansas City. As an insured, Tholen was eligible to participate in a wellness program offered by Blue Cross called Points to Blue. The program offered gift cards to Tholen and other insureds based upon entries made to the Points to Blue Web site, logging various exercise programs and diet programs completed by the insureds. Every 1,000 points earned translated to one dollar towards a gift card, up to a maximum of $250 annually for each insured. The more strenuous exercises earned more points.
Tholen admitted that he and other employees submitted false entries to the Points to Blue Web site, claiming they completed extremely strenuous activities in order to fraudulently obtain the maximum gift card of $250. To make even more money in this scheme, Tholen admitted, he and others submitted false entries for other employees and their eligible dependents, in exchange for receiving a portion of the fraudulent gift card proceeds.
Tholen made fraudulent Points to Blue submissions on behalf of 62 employees, resulting in 144 gift cards worth a total of $17,600. Among the fraudulent submissions, on Jan. 16, 2011 Tholen submitted an activity entry to Points to Blue stating that 5-year-old “TJ” had completed two marathons and two triathlons.
Under federal statutes, Tholen is subject to a sentence of up to 20 years 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 Assistant U.S. Attorney John E. Cowles. It was investigated by the U.S. Postal Inspection Service Task Force, U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI) and the Overland Park, Kan., Police Department.
Justice Department to Monitor Election in NebraskaRead the Press Release
The Justice Department announced today that the Civil Rights Division will monitor the election on May 14, 2013, in Douglas County, Neb. The monitoring will ensure compliance with the Voting Rights Act of 1965 and other federal voting rights statutes. The Voting Rights Act prohibits discrimination in the election process on the basis of race, color or membership in a minority language group.
Justice Department personnel will monitor polling place activities in Douglas County. A Civil Rights Division attorney will coordinate federal activities and maintain contact with local election officials.
Each year, the Justice Department deploys hundreds of federal observers from the Office of Personnel Management, as well as departmental staff, to monitor elections across the country. To file complaints about discriminatory voting practices, including acts of harassment or intimidation, voters may call the Voting Section of the Justice Department’s Civil Rights Division at 1-800-253-3931.
Visit www.justice.gov/crt/voting/index.php for more information about the Voting Rights Act and other federal voting laws.
Justice Department Files LawsuitAgainst Niagara County, New YorkRead the Press Release
The Department of Justice announced today the filing of a lawsuit against Niagara County, N.Y., alleging that Niagara County discriminated against Carisa Boddecker, a corrections officer with the Niagara County Sheriff’s Department, when it forced her to take a leave of absence during her pregnancy. According to the complaint, Niagara County’s actions were a violation of Title VII of the Civil Rights Act of 1964, as amended. Title VII is a federal statute that prohibits employment discrimination on the basis of sex, including pregnancy, as well as race, color, national origin and religion.
The suit, filed in the U.S. District Court for the Western District of New York in Buffalo, N.Y., alleges that Boddecker informed her employer of her pregnancy and requested an assignment with no inmate contact, as she was entitled to do under her employer’s pregnancy policy. However, according to the complaint, Niagara County failed to follow its own policy regarding assignments for pregnant corrections officers and also failed to provide the same accommodations to Boddecker that it had provided to corrections officers with other temporary medical disabilities. Instead, Niagara County placed Boddecker on an involuntary leave of absence and allowed her to return to work only after she filed a complaint of discrimination with the Equal Employment Opportunity Commission (EEOC). The United States’ complaint seeks a court order requiring Niagara County to develop and implement policies that would prevent its employees from being subjected to discrimination based upon sex. The United States also seeks monetary relief for Boddecker to compensate her for the damages she sustained as a result of the alleged discrimination.
Boddecker originally filed a charge of sex discrimination with the EEOC, whose Buffalo office investigated the matter, determined that there was reasonable cause to believe that discrimination had occurred, and referred the matter to the Department of Justice.
“Employers must provide pregnant women with the same accommodations they provide to employees who are not pregnant but who are similarly able or unable to work,” said Jocelyn Samuels, Principal Deputy Assistant Attorney General for the Civil Rights Division. “Women should not have to choose between their pregnancies and their jobs, and the Civil Rights Division will continue to vigorously enforce the right of pregnant employees to be free of discrimination in the workplace.”
The continued enforcement of Title VII is a priority of the Justice Department’s Civil Rights Division. Additional information about the Civil Rights Division of the Department of Justice is available on its website at www.usdoj.gov/crt .
Related Materials:
Niagara County Complaint
Jury Finds Mexican National Guilty of Cocaine and Heroin TraffickingRead the Press Release
CHARLOTTE, N.C. – On Friday, May 10, 2013, a Charlotte federal jury convicted Jorge Molina-Sanchez, 24, of Mexico, of conspiring to distribute cocaine and heroin throughout North Carolina and related charges, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. The jury returned the guilty verdict following a three-day trial which ended late Friday afternoon.
U.S. Attorney Tompkins is joined in making today’s announcement by Brock D. Nicholson, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) in Georgia and the Carolinas, and Sheriff Kevin L. Auten of Rowan County Sheriff’s Office (RCSO).
A federal criminal indictment filed in October 2012 charged Molina-Sanchez with conspiracy to distribute and to possess with intent to distribute at least five kilograms of cocaine and at least one kilogram of heroin, conspiracy to launder proceeds of drug trafficking, possession with intent to distribute cocaine, and possession of a firearm in furtherance of drug trafficking. He was found guilty of all charges.
According to filed documents, evidence presented at trial and witness testimony:
From in or about 2004 through 2011, Molina-Sanchez and his co-conspirators obtained hundreds of kilograms of cocaine from a supplier in California. The defendant and his co-conspirators transported the cocaine and redistributed it to other traffickers, who sold the cocaine throughout North Carolina. The street value of the cocaine was in excess of $30,000,000.
To avoid detection, Molina-Sanchez and his co-conspirators transported the cocaine and the drug proceeds hidden in compartments in vehicles. On one occasion, in March 2011, law enforcement found tens of thousands of dollars hidden in the air filter of a vehicle and in a void in the trunk of a car. In July 2011, law enforcement officers discovered and seized from a vehicle three kilograms of cocaine, a kilogram of heroin, and $138,460 in cash. Also in July 2011 while executing a search warrant, law enforcement discovered in Molina-Sanchez’s house a hand-drawn map of the location where the defendant’s sister had been stopped in Utah with eleven kilograms of cocaine in February 2011. Additional trial evidence included telephone conversations in September 2011, during which Molina-Sanchez asked a former co-conspirator to go to Las Vegas to inspect a vehicle and to transport cocaine back to North Carolina. When officers arrested Molina-Sanchez in October 2012, he was in possession of almost three ounces of cocaine, two handguns, and more than 100 rounds of ammunition.
Molina-Sanchez has been in local federal custody since he was arrested in October 2012 and will remain in custody until his sentencing date, which has not yet been set.
Molina-Sanchez faces a statutory mandatory minimum sentence of 15 years to life in prison, as well as a fine of up to $10,000,000, and at least five years of supervised release upon his release from prison. Federal sentences are served without the possibility of parole.
The case was investigated by HSI in Charlotte and RCSO, assisted by the Charlotte-Mecklenburg Police Department and its crime laboratory, the Iredell County Sheriff’s Office and its crime laboratory, and the North Carolina State Bureau of Investigation. The prosecution was handled by Assistant U.S. Attorney Steven R. Kaufman.
Judge Sentences Woman to Prison for Preparing False Income Tax ReturnRead the Press Release
Houston – Shirley M. Carrington has been ordered to prison following her conviction of willfully aiding and assisting in the preparation and presentation of a false U.S. Individual Income Tax Return, United States Attorney Kenneth Magidson announced today along with Lucy Cruz, special agent in charge of Internal Revenue Service - Criminal Investigation (IRS-CI). Carrington pleaded guilty Jan. 7, 2013.
Today, U.S. District Judge Vanessa Gilmore handed Carrington a sentence of 18 months in federal prison to be followed by one year of supervised release.
According to the written plea agreement filed in the record of the case, Carrington admitted she willfully prepared a false income tax return for a husband and wife that included a claim for losses from an alleged janitorial service sole proprietorship the taxpayers did not have. Carrington also admitted the return she prepared for the couple also claimed a false deduction for unreimbursed employee expenses and a false deduction for other miscellaneous deductions. Carrington admitted that the tax loss to the United States on the false tax return for which she pleaded guilty was $10,962.
Carrington further admitted in the plea agreement that the eight tax returns underlying the eight counts in the indictment in the case all claimed false losses from alleged janitorial sole proprietorships that none of the taxpayers had. Her relevant conduct, which is the total tax loss in the case, for purposes of sentencing was $199,472.
This matter was investigated by IRS Criminal Investigation and is being prosecuted by Assistant U.S. Attorney Charles J. Escher.
Judge Hands Down Multiple Sentences in Houston Area Ecstasy ConspiracyRead the Press Release
HOUSTON – Six Houston residents, convicted for their roles in a multi-drug conspiracy operating in and around the Houston area over the course of approximately two years, have been ordered to serve time in federal prison, United States Attorney Kenneth Magidson announced today.
A federal jury convicted Thuong Thomas-More Vo, 37, Steven Marshal Boehning, 33, and Hung Van Dang, 36, on Aug. 29, 2012, following eight days of trial and approximately 10 hours of deliberations. Nanthato Phetphongsy, 36, Tay Luangpanh, 39, and Sourivong Nanthavongdouangsy, 31, had previously entered pleas of guilty.
At the lengthy hearing that concluded late Friday, U.S. District Judge Lee H. Rosenthal handed Vo a sentence of 109 months, while Boehning and Dang will serve respective terms of 38 and 36 months in federal prison. Phetphongsy, Luangpanh and Nanthavongdouangsy were ordered to serve 102, 78 and three months in prison, respectively. In handing down the sentence, Judge Rosenthal called their actions a “sinister scheme.” With the exception of Nanthavongdouangsy, who received a two-year-term of supervised release, the remaining five were further ordered to serve three years of supervised release following completion of their prison sentences.
A total of 16 people were charged in two separate indictments in relation to this case. To date, all have been convicted and 13 have now been ordered to prison.
The investigation targeted a Vietnamese and Laotian drug trafficking organization operating in Houston. The group primarily distributed ecstasy, but was also involved in the distribution of cocaine and hydroponic marijuana. Vo, among others in this case, was affiliated with the Houston-based Asian gang, known as NCP or “Northside Chink Posse.”
At trial, the government presented evidence that Vo, Boehning and Dang dealt with a now deceased drug trafficker who supplied them with ecstasy. Vo, who has a prior federal ecstasy trafficking conviction, had served as the broker for that drug trafficker and introduced Boehning and Dang to him. Vo approved the quantities and prices of ecstasy sold to Boehning and Dang who would then sell the ecstasy to their clients.
Three others who also had dealings with the same ecstasy trafficker testified at trial and described the methods used by the dealer. Two, who contended they were customers, described where they would meet to conduct drug transactions with this dealer and testified as to the coded language they used over the telephone when speaking about drug trafficking. The third person stated he was the supplier and indicated he had provided thousands of ecstasy pills to the dealer during the course of this conspiracy.
An FBI agent provided additional testimony as to conversations that took place between the dealer and Vo, Boehning and Dang about their drug trafficking business.
At the time of their pleas, Phetphongsy and Luangpanh each admitted their involvement in the distribution of significant quantities of ecstasy in and around the Houston area.
The case was the result of a two-year Organized Crime Drug Enforcement Task Force investigation dubbed Operation Iron Hide, led by the FBI and assisted by the Houston Police Department. The case was prosecuted by Assistant United States Attorneys Robert Johnson and Rob Jones.
Idaho Businessman Sentenced to Prison for Tax EvasionRead the Press Release
Michael George Fitzpatrick, 51, of Hope, Idaho, was sentenced to 42 months in prison by U.S. District Judge Larry A. Burns, the Justice Department and Internal Revenue Service (IRS) announced today. Fitzpatrick was also ordered to serve three years super vised released and to pay just under $1.4 million in restitution to the IRS for unpaid individual and corporate federal income taxes.
Fitzpatrick was convicted of two counts of tax evasion in January 2013 by a Coeur d’Alene, Idaho, jury. A previous jury had convicted him in September 2012 on two counts of failure to file corporate income tax returns but was unable to reach verdicts on the tax evasion counts. Fitzpatrick was remanded into custody immediately after the second trial.
According to the indictment and evidence introduced at both trials, Fitzpatrick operated a business selling products which purported to help individuals eliminate credit card debt. During 2003 and 2004, gross sales from the business, operating under the names Dynamic Solutions Inc. (DSI) and North American Educational Services Inc. (NAES), exceeded $9 million. At trial the government proved the corporations failed to report $3.7 million and Fitzpatrick himself failed to report over $500,000 in income, resulting in a total tax loss of $1,397,762.
The evidence further established that Fitzpatrick last filed an individual income tax return in 1996. At trial, Fitzpatrick argued at length that the income tax laws did not apply to him. However, the evidence showed he expended significant time and expense to put all of his property in the names of nominees.
The evidence at trial also established Fitzpatrick sent over $5 million offshore to a bank located in the Dominican Republic. Fitzpatrick accessed this money through the use of a debit card and through wire transfers. During this two-year period Fitzpatrick used over $1 million of his money hidden offshore to buy real estate and to gamble in Las Vegas on nine separate trips to the Bellagio Casino. He also paid a contractor to build a schoolhouse for his kids in his backyard in Hope, Idaho.
“This case sends a strong message that those who defy our nation's tax laws will be investigated and prosecuted to the fullest extent of the law,” said Assistant Attorney General for the Justice Department’s Tax Division Kathryn Keneally. “The sentence imposed today demonstrates that anyone who attempts to evade taxes by hiding assets in offshore bank accounts faces significant time in prison for these crimes.”
“Paying taxes is a solemn obligation of citizenship,” said U.S. Attorney Wendy J. Olson. “Mr. Fitzpatrick’s conviction and sentence make clear that those who try to hide income or knowingly and falsely claim that the income tax laws do not apply to them will be prosecuted and ordered to pay. I commend the fine work of the Tax Division lawyers and the IRS criminal investigators in this case.”
“The license to run a business is not a license to avoid paying taxes,” said IRS Criminal Investigation Chief Richard Weber. “Today, Mr. Fitzpatrick has been held accountable for his actions of dodging his legal tax responsibilities to report all his income and pay his fair share of taxes. No one should doubt that IRS is committed to pursuing people hiding income offshore.”
Assistant Attorney General for the Justice Department’s Tax Division Kathryn Keneally and U.S. Attorney Olson thanked special agents from the Boise, Idaho, and Seattle offices of IRS Criminal Investigation, who investigated the case, and Tax Division Trial Attorneys Lori A. Hendrickson, Christopher P. O’Donnell, and Erin S. Mellen, who prosecuted the case with valuable support from the U.S. Attorney’s Offices in Boise and Coeur d’Alene.
Idaho Businessman Sentenced to Prison for Income Tax EvasionRead the Press Release
WASHINGTON – Michael George Fitzpatrick, 51, of Hope, Idaho, was sentenced to 42 months in prison by U.S. District Judge Larry A. Burns, the Justice Department and Internal Revenue Service (IRS) announced today. Fitzpatrick was also ordered to serve three years of supervised release and pay just under $1.4 million in restitution to the IRS for unpaid individual and corporate federal income taxes.
Fitzpatrick was convicted of two counts of tax evasion in January 2013 by a Coeur d’Alene, Idaho, jury. A previous jury had convicted him in September 2012 on two counts of failure to file corporate income tax returns but was unable to reach verdicts on the tax evasion counts. Fitzpatrick was remanded into custody immediately after the second trial.
According to the indictment and evidence introduced at both trials, Fitzpatrick operated a business selling products which purported to help individuals eliminate credit card debt. During 2003 and 2004, gross sales from the business, operating under the names Dynamic Solutions, Inc. (DSI) and North American Educational Services, Inc. (NAES), exceeded $9 million. At trial the government proved the corporations failed to report $3.7 million and Fitzpatrick himself failed to report over $500,000 in income, resulting in a total tax loss of $1,397,762.
The evidence further established that Fitzpatrick last filed an individual income tax return in 1996. At trial, Fitzpatrick argued at length that the income tax laws did not apply to him. However, the evidence showed he expended significant time and expense to put all of his property in the names of nominees.
The evidence at trial also established Fitzpatrick sent over $5 million offshore to a bank located in the Dominican Republic. Fitzpatrick accessed this money through the use of a debit card and through wire transfers. During this two-year period Fitzpatrick used over $1 million of his money hidden offshore to buy real estate and to gamble in Las Vegas on nine separate trips to the Bellagio Casino. He also paid a contractor to build a schoolhouse for his kids in his backyard in Hope, Idaho.
“This case sends a strong message that those who defy our nation's tax laws will be investigated and prosecuted to the fullest extent of the law,” said Assistant Attorney General for the Justice Department’s Tax Division Kathryn Keneally. “The sentence imposed today demonstrates that anyone who attempts to evade taxes by hiding assets in offshore bank accounts faces significant time in prison for these crimes.”
“Paying taxes is a solemn obligation of citizenship,” said United States Attorney Wendy Olson. “Mr. Fitzpatrick’s conviction and sentence make clear that those who try to hide income or knowingly and falsely claim that the income tax laws do not apply to them will be prosecuted and ordered to pay. I commend the fine work of the Tax Division lawyers and the IRS criminal investigators in this case.”
“The license to run a business is not a license to avoid paying taxes,” said Internal Revenue Service Criminal Investigation Chief Richard Weber. “Today, Mr. Fitzpatrick has been held accountable for his actions of dodging his legal tax responsibilities to report all his income and pay his fair share of taxes. No one should doubt that IRS is committed to pursuing people hiding income offshore.”
Assistant Attorney General for the Justice Department’s Tax Division Kathryn Keneally and U.S. Attorney Wendy J. Olson thanked special agents from the Boise, Idaho and Seattle, Washington offices of IRS Criminal Investigation, who investigated the case, and Tax Division Trial Attorneys Lori A. Hendrickson, Christopher P. O’Donnell, and Erin S. Mellen, who prosecuted the case with valuable support from the United States Attorney’s Offices in Boise and Coeur d’Alene.
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’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
Hudson County, N.J., Man Admits Paying Bribes for $3.5 Million Line of CreditRead the Press Release
TRENTON, N.J. – A Hudson County, N.J., man today admitted his role in paying bribes valued at $49,000 to a bank officer at Mariner’s Bank in Edgewater, N.J., to renew a $3.5 million line of credit, U.S. Attorney Paul J. Fishman announced.
Rolando Cribeiro, 49, of North Bergen, N.J., pleaded guilty before U.S. District Judge Peter G. Sheridan in Trenton federal court to an Information charging him with one count of bank bribery.
According to documents filed in this case and statements made in court:
Cribeiro was the owner of CP Building Corp., a/k/a C&P Floor Covering Inc., a/k/a C&P Building Enterprises, a/k/a Roly’s Carpet, a general contracting company located in West New York, N.J.
In 2008, Cribeiro was financially unqualified to renew a previously approved $3.5 million line of credit with Mariner’s Bank. Cribeiro made multiple payments to a bank officer who was assigned responsibility for Cribeiro’s line of credit. The corrupt payments were made in exchange for the bank officer renewing and continuing the line of credit. Cribeiro gave the bank officer a check for $6,500 and cash payments of approximately $5,000 and $3,500. Cribeiro also provided the bank officer with a rent-free apartment in Cribeiro’s apartment building in Newark, relieving the bank officer of approximately $35,000 in rent payments.
The bank bribery charge carries a maximum potential penalty of 30 years in prison and a maximum fine of $1 million. Sentencing is currently scheduled for Sept. 5, 2013.U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, and criminal investigators from the U.S. Attorney’s Office in Newark, with the continuing investigation leading to the guilty plea.
The government is represented by Assistant U.S. Attorney Zahid N. Quraishi of the U.S. Attorney’s Office Special Prosecutions Division in Newark.
13-189
Defense counsel: Arthur P. Zucker Esq., Hackensack, N.J.Cribeiro Information
High Ranking Gulf Cartel Member Sentenced in Washington, D.C., to 35 Years in Prison for Drug TraffickingRead the Press Release
Aurelio Cano Flores, a Mexican national and high ranking member of the Gulf Cartel, was sentenced today to serve 35 years in prison for conspiring to import multi-ton quantities of cocaine and marijuana into the United States, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and Administrator Michele M. Leonhart of the Drug Enforcement Administration (DEA).
Cano Flores, 40, aka “Yankee” and “Yeyo,” was sentenced by U.S. District Judge Barbara J. Rothstein in the District of Columbia. In addition to his prison term, Cano Flores was ordered to forfeit $15 billion in drug proceeds as part of a money judgment. At a post-trial hearing, the United States proved that from 2000 to 2010, the Gulf Cartel distributed in excess of 1.4 million kilograms of cocaine and 8,000 metric tons of marijuana. The money judgment represents the gross receipts of the Gulf Cartel’s drug sales into the United States from its principal distribution centers located along the U.S.-Mexico border.
“For over a decade, Aurelio Cano Flores worked with some of the most dangerous criminals in the world to import massive quantities of cocaine and marijuana into the United States,” said Acting Assistant Attorney General Raman. “As a leader of the Gulf Cartel, one of the most notorious criminal enterprises in Mexico or the United States, he endangered the lives of innocent people on both sides of the border. As a result of today’s sentencing, he will spend 35 years in federal prison as punishment for his crimes.”
“DEA and its partners use every law enforcement tool possible to bring to justice drug cartel leaders and facilitators who inflict damage on both sides of the border,” said DEA Administrator Leonhart. “Aurelio Cano-Flores used his position as a Mexican police officer to help one of the most violent and brutal drug trafficking organizations in the world bring vast amounts of drugs into the United States. Like many other cartel leaders, he posed a threat to the citizens of both the United States and Mexico. We are confident and pleased that justice was served today by the pronouncement of his lengthy U.S. prison sentence."
Following a trial that lasted over two weeks, Cano Flores was convicted by a federal jury on Feb. 26, 2013, of one count of conspiracy to distribute five kilograms or more of cocaine and 1,000 kilograms or more of marijuana, knowing and intending the substances would be unlawfully imported into the United States.
Cano Flores was one of 19 defendants charged in a superseding indictment on Nov. 4, 2010, with drug trafficking offenses. He was extradited to the United States from Mexico in August 2011 and was ordered detained in federal custody pending trial.
Evidence presented at trial included dozens of lawfully intercepted telephone conversations between Cano Flores and other leaders of the Gulf Cartel, as well as testimony from previously convicted Cartel members. According to the trial evidence, Cano Flores began working for the Gulf Cartel in approximately 2001, while he was serving as a police officer in Mexico. During his time as a police officer, Cano Flores recruited others into the Gulf Cartel, collected drug money and escorted large shipments of cartel drugs to the U.S. border.
Cano Flores ultimately rose through the ranks of the Gulf Cartel to become a major transporter of narcotics within Mexico to the U.S. border and became the Cartel’s top representative in the important border town of Los Guerra, Tamaulipas, Mexico. As the “plaza boss” for Los Guerra, Cano Flores oversaw the mass distribution of cocaine and marijuana into the United States on a daily basis. Testimony established that between 2000 and 2010, the Gulf Cartel grew from an organization of only 100 members controlling three border towns to an organization of 25,000 people controlling the drug trade over approximately half of Mexico. As established during the trial, the means and methods of this conspiracy included corruption, murder, kidnapping and intimidation.
The case was prosecuted by Trial Attorneys Darrin McCullough and Sean Torriente of the Criminal Division’s Narcotic and Dangerous Drug Section. The Criminal Division’s Office of International Affairs provided significant assistance in the provisional arrest and extradition of Cano Flores, and the Asset Forfeiture and Money Laundering Section provided assistance at sentencing. The investigation in this case was led by the DEA Houston Field Division’s Organized Crime Drug Enforcement Strike Force and the DEA Bilateral Investigation Unit. The case was part of the Organized Crime Drug Enforcement Task Force’s Operation “Day of Reckoning.”
Henderson Man Sentenced for Drug and Weapon ChargesRead the Press Release
RALEIGH - United States Attorney Thomas G. Walker announced today that Senior United States District Judge W. Earl Britt sentenced SHYZER MONQUEZ ORMOND, 22, of Henderson, North Carolina to 70 months imprisonment, followed by 5 years of supervised release for knowingly and intentionally possessing with the intent to distribute a quantity of marijuana, a Schedule I controlled substance, in violation of Title 21, United States Code, Section 841(a)(1), and knowingly and intentionally possessing a firearm in furtherance of a drug trafficking crime in violation of Title 18, United States Code, Section 924(c)(1)(A).
On December 3, 2012, ORMOND pled guilty to the charges listed above. According to the investigation, on April 13, 2012, ORMOND was in a car that was stopped by a Henderson Police Officer because a 911 caller had described a man with a gun pointed out of the car window. There were four men inside the car and the responding officer had each man exit the vehicle one at a time. ORMOND ran from the scene, but the officer caught him. During the struggle an officer noticed ORMOND had a gun. A further search of ORMOND discovered 12 prepackaged individual bags of marijuana in his pants pocket.
This case was part of the Project Safe Neighborhoods (PSN) initiative which encourages federal, state, and local agencies to cooperate in a unified “team effort” against gun crime, targeting repeat offenders who continually plague their communities.
Investigation of this case was conducted by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Henderson Police Department. Assistant United States Attorney, S. Katherine Burnette prosecuted the case.
Generic Drug Manufacturer Ranbaxy Pleads Guilty and Agrees to Pay $500 Million to Resolve False Claims Allegations, cGMP Violations and False Statements to the FDARead the Press Release
In the largest drug safety settlement to date with a generic drug manufacturer, Ranbaxy USA Inc. , a subsidiary of Indian generic pharmaceutical manufacturer Ranbaxy Laboratories Limited, pleaded guilty today to felony charges relating to the manufacture and distribution of certain adulterated drugs made at two of Ranbaxy’s manufacturing facilities in India, the Justice Department announced today. Ranbaxy also agreed to pay a criminal fine and forfeiture totaling $150 million and to settle civil claims under the False Claims Act and related State laws for $350 million.
The federal Food, Drug and Cosmetic Act (FDCA) prohibits the introduction or delivery for introduction into interstate commerce of any drug that is adulterated. Under the FDCA, a drug is adulterated if the methods used in, or the facilities or controls used for, its manufacturing, processing, packing, or holding do not conform to, or are not operated or administered in conformity with, current Good Manufacturing Practice (cGMP) regulations. This assures that a drug meets the requirements as to safety and has the identity and strength, and meets the quality and purity characteristics, which the drug purports or is represented to possess.
Ranbaxy USA pleaded guilty to three felony FDCA counts, and four felony counts of knowingly making material false statements to the FDA. The generic drugs at issue were manufactured at Ranbaxy’s facilities in Paonta Sahib and Dewas, India. Under the plea agreement, the company will pay a criminal fine of $130 million, and forfeit an additional $20 million.
“When companies sell adulterated drugs, they undermine the integrity of the FDA’s approval process and may cause patients to take drugs that are substandard, ineffective, or unsafe,” said Stuart F. Delery, Acting Assistant Attorney General for the Civil Division of the Department of Justice. “We will continue to work with our law enforcement partners to ensure that all manufacturers of drugs approved by the FDA for sale in the United States, both domestic and foreign, follow the FDA guidelines that protect all of us.”
“This is the largest false claims case ever prosecuted in the District of Maryland, and the nation’s largest financial penalty paid by a generic pharmaceutical company for FDCA violations,” said U.S. Attorney for the District of Maryland Rod J. Rosenstein. “The joint criminal and civil settlement, which reflects many years of work by FDA agents and federal prosecutors, holds Ranbaxy accountable for a pattern of violations and should improve the reliability of generic drugs manufactured in India by Ranbaxy.”
Ranbaxy USA admitted to introducing into interstate commerce certain batches of adulterated drugs that were produced at Paonta Sahib in 2005 and 2006, including Sotret, gabapentin, and ciprofloxacin. Sotret is Ranbaxy’s branded generic form of isotretinoin, a drug used to treat severe recalcitrant nodular acne; gabapentin is a drug used to treat epilepsy and nerve pain; ciprofloxacin is a broad-spectrum antibiotic. In a Statement of Facts filed along with the Information, Ranbaxy USA acknowledged that FDA’s inspection of the Paonta Sahib facility in 2006 found incomplete testing records and an inadequate program to assess the stability characteristics of drugs. “Stability” refers to how the quality of a drug varies with time under the influence of a variety of factors, such as temperature, humidity, and light. Such testing is used to determine appropriate storage conditions and expiration dates for the drug, as well as to detect any impurities in the drug.
Ranbaxy also acknowledged that the FDA’s 2006 and 2008 inspections of the Dewas facility found the same issues with incomplete testing records and an inadequate stability program, as well as significant cGMP deviations in the manufacture of certain active pharmaceutical ingredients and finished products. Ranbaxy USA also acknowledged that in 2003 and 2005 the company was informed of cGMP violations by consultants it hired to conduct audits at the Paonta Sahib and Dewas facilities. Those cGMP violations resulted in the introduction into interstate commerce of some adulterated drugs.
Ranbaxy USA further admitted to failing to timely file required reports known to FDA as “field alerts” for batches of Sotret and gabapentin that had failed certain tests. With respect to Sotret, Ranbaxy USA was aware in January 2003 that a batch of Sotret failed an accelerated dissolution stability test but continued to distribute the batch into the United States for another 13 months. With respect to gabapentin, Ranbaxy USA was aware at various times between June and August 2007 that certain batches of gabapentin were testing out-of-specification, had unknown impurities, and would not maintain their expected shelf life. Nevertheless, Ranbaxy USA did not notify FDA and institute a voluntary recall until October 2007.
Ranbaxy USA also admitted to making false, fictitious, and fraudulent statements to the FDA in Annual Reports filed in 2006 and 2007 regarding the dates of stability tests conducted on certain batches of Cefaclor, Cefadroxil, Amoxicillin, and Amoxicillin and Clavulanate Potassium, which were manufactured at the Dewas facility. Ranbaxy USA was found to have conducted stability testing of certain batches of these drugs weeks or months after the dates reported to FDA. In addition, instead of conducting some of the stability tests at prescribed intervals months apart, the tests were conducted on the same day or within a few days of each other. This practice resulted in unreliable test results regarding the shelf life of the drugs. Ranbaxy USA also acknowledged that drug samples waiting to be tested were stored for unknown periods of time in a refrigerator, which did not meet specified temperature and humidity ranges for an approved stability chamber, and that this was not disclosed to the FDA.
The criminal case is U.S. v. Ranbaxy USA, Inc., JFM-13-CR-0238 (D. Md.).
Under the civil settlement, Ranbaxy has agreed to pay an additional $350 million to resolve allegations that it caused false claims to be submitted to government health care programs between April 1, 2003, and September 16, 2010, for certain drugs manufactured at the Paonta Sahib and Dewas facilities. The United States contends that Ranbaxy manufactured, distributed, and sold drugs whose strength, purity, or quality differed from the drug’s specifications or that were not manufactured according to the FDA-approved formulation. The United States further contends that, as a result, Ranbaxy knowingly caused false claims for those drugs to be submitted to Medicaid, Medicare, TRICARE, the Federal Employees Health Benefits Program, the Department of Veterans Affairs, and the U.S. Agency for International Development (USAID), which administers the U.S. President’s Emergency Plan for AIDS Relief (PEPFAR).
The federal government’s share of the civil settlement amount is approximately $231.8 million, and the remaining $118.2 million will go to the states participating in the agreement.
The civil settlement resolves a lawsuit filed in U.S. District Court for the District of Maryland under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens to bring civil actions on behalf of the United States and share in any recovery. As part of today’s resolution, the whistleblower, Dinesh Thakur, a former Ranbaxy executive, will receive approximately $48.6 million from the federal share of the settlement amount. The case is U.S. ex rel. Thakur v. Ranbaxy Laboratories Limited, Case No. JFM-07-962 (D. Md.).
With the exception of the allegations to which Ranbaxy pleaded guilty in the Criminal Information, there has been no determination of liability as to the claims settled by the civil agreement.
Last year, FDA and Ranbaxy agreed to an injunction that prevents drugs produced at the Paonta Sahib and Dewas facilities from entering the U.S. market until the facilities have been brought into full compliance with the FDCA and its implementing regulations. Since September 16, 2008, when the FDA placed drugs from those facilities on an Import Alert, Ranbaxy has not imported drugs from those facilities into the U.S. In addition, the injunction requires Ranbaxy to review and verify data contained in Ranbaxy’s past drug applications to the FDA. United States v. Ranbaxy Laboratories, Ltd., et al. , Case No. JFM-12-250 (D. Md).
“The FDA expects that companies will comply with the cGMP requirements mandated by law so that consumers can be assured that their medical products are safe and pure,” said John Roth, director of the FDA’s Office of Criminal Investigations. “The investigation that led to this settlement uncovered evidence showing that certain lots of specific drugs produced at the Paonta Sahib facility were defective, in that their strength differed from, or their purity or quality fell below, that which they purported to possess. The FDA and its law enforcement partners will continue to aggressively pursue companies and their executives who erode public confidence in the quality and safety of medical products by distributing products that do not comply with the law.”
“I would like to express my appreciation for the exceptional work of our investigators and that of their FDA and Department of Justice partners,” said Michael G. Carroll, USAID Deputy Inspector General. “This settlement represents the culmination of years of investigative effort and signals our continuing commitment to the integrity of U.S. government systems and our determination to hold those who seek to defraud or mislead to account.”
The criminal case was prosecuted by the U.S. Attorney’s Office for the District of Maryland and the Civil Division’s Consumer Protection Branch. The civil settlement was negotiated by the U.S. Attorney’s Office for the District of Maryland and the Civil Division’s Commercial Litigation Branch. The case was investigated by agents from the FDA’s Office of Criminal Investigations and USAID’s Office of Inspector General. The FDA’s Office of Chief Counsel, HHS Office of Counsel to the Inspector General, Office of the General Counsel-CMS Division, and the National Association of Medicaid Fraud Control Units also provided assistance.
This criminal and civil resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover more than $10.3 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 are over $14.3 billion.
Related Materials:
Ranbaxy Settlement
Information
Attachment A
Attachment B
Attachment CGang Member Pleads Guilty in Dodge City Racketeering CaseRead the Press Release
WICHITA, KAN. – A member of a Dodge City street gang charged in a federal racketeering case has pleaded guilty, U.S. Attorney Barry Grissom said today.
Russell Worthey, 24, Dodge City, Kan., pleaded guilty to one count of conspiracy to commit racketeering and one count of possessing and discharging a firearm in a crime of violence. In his plea, Worthey admitted he was a member of the Norteno street gang when he was involved in the murder of Israel Peralta on June 8, 2009, in Dodge City. Worthey aided and abetted in the murder as well as an assault with deadly weapons upon the victims.
On the day of the murder, Worthey and co-defendant Anthony Wright were driving around Dodge City in Wright’s car. In a trailer park in the south part of town they ran across a group of Hispanic males at 201 E. McArtor, Lot 24. The males appeared to be members of a rival gang, the Surenos.
Later that day, Worthey, Wright and two other Nortenos went to the trailer park. Worthey was in the front passenger seat and Wright was driving. Two other Nortenos were riding in the back seat. When Wright parked the car, the two Nortenos in the back seat got out and ran toward the Hispanic males at Lot 24, with Worthey and Wright following. The two Nortenos in the lead fired at the men at Lot 24. Israel Peralta was struck several times by the gunfire and died from the injuries. Mariano Sorano also was struck by gunfire. The four Nortenos got back in their car and drove away from the scene.
In his plea, Worthey admitted that as a member of the Nortenos he was part of an ongoing criminal enterprise. The gang used murder, robbery, assault and the threat of violence to protect and expand its operations. He was one of 23 defendants indicted in May 2012 under a federal law called the RICO Act (Racketeering Influenced and Corrupt Organizations Act.
Worthey is set for sentencing July 29. He faces a maximum penalty of 20 years in federal prison and a fine up to $250,000 on the conspiracy charge, and a penalty of not less than 10 years and a fine up to $250,000 on the firearms charged.
Co-defendants who have pleaded guilty include:
– Jason Najera, who was sentenced to 10 years in federal prison.
– Humberto Ortiz, who was sentenced to 46 months.
– Jose Neave, who is set for sentencing July 8.
– Anthony Wright, who is set for sentencing July 8.Grissom commended the Dodge City Police Department, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Ford County Sheriff’s Office, the Kansas Bureau of Investigation, Assistant U.S. Attorney Lanny Welch and Assistant U.S. Attorney Aaron Smith for their work on the case.
Fridley Man Sentenced for Robbing Retail StoreRead the Press Release
MINNEAPOLIS—Earlier today in federal court, a 46-year-old Fridley man was sentenced for robbing a Discount Tobacco and Groceries retail store at 315 Osborne Road Northeast in Fridley. United States District Court Judge Joan N. Ericksen sentenced Steven Eugene Daniels to 160 months in prison on one count of interference with commerce by robbery pursuant to the Hobbs Act. Daniels was indicted on September 11, 2012, and pleaded guilty on November 27, 2012.
In his plea agreement, Daniels admitted that on June 14, 2012, he and another man, who was carrying a firearm, entered the Discount Tobacco and Groceries store in Fridley. Both men then forced the store clerk to open the cash register. Daniels stole money from the cash register before both robbers fled the store. Daniels was later apprehended.
The Hobbs Act, passed by Congress in 1946, provides for federal jurisdiction for cases involving violent, habitual criminals who commit armed robbery in businesses involved in interstate commerce.
This case was the result of an investigation by the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives and the Anoka County Police Department. It was prosecuted by Assistant U.S. Attorney Richard A. Newberry.Fort Dodge Woman to Federal Prison for Meth ConspiracyRead the Press Release
A woman who conspired to distribute methamphetamine was sentenced May 10, 2013, to ten years in federal prison.
Christina Fulkerson, 39, from Fort Dodge, Iowa, received the prison term after a January 25, 2013, guilty plea to one count of conspiracy to distribute methamphetamine and one count of possessing with intent to distribute methamphetamine.
At the guilty plea, Fulkerson admitted her involvement in a conspiracy from about 2011 through October 2012 that distributed more than 150 grams of actual (pure) methamphetamine in the Fort Dodge, Iowa, area. Fulkerson also admitted to distributing more than 19 grams of methamphetamine during four separate transactions with individuals cooperating with law enforcement. On October 1, 2012, law enforcement officers executed a search warrant at Fulkerson’s residence and seized over 30 grams of actual (pure) methamphetamine which Fulkerson admitted she planned to distribute to others. Fulkerson’s residence was within 1000 feet of a protected location, Holy Rosary School Park.
Fulkerson was sentenced in Sioux City by United States District Court Judge Mark W. Bennett. Fulkerson was sentenced to 120 months’ imprisonment. A special assessment of $200 was imposed. She must also serve a ten-year term of supervised release after the prison term. There is no parole in the federal system.
Fulkerson is being held in the United States Marshal’s custody until she can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Shawn S. Wehde and was investigated by the Iowa Department of Narcotics Enforcement, Fort Dodge Police Department, Webster County Sheriff’s Office, Clay County Sheriff’s Office, Story County Sheriff’s Office, and the Iowa Division of Criminal Investigation.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 12-3049.
Former Wichita Area Physician on Supervised Release Charged with Firearm ViolationRead the Press Release
WICHITA, KAN. – A former Wichita area physician who is serving time on supervised release for a drug conviction has been arrested and charged with a federal firearms violation, U.S. Attorney Barry Grissom said today.
Lawrence M. Simons, 57, Wichita, is charged with one count of unlawful possession of a firearm after a felony conviction. An investigator’s affidavit alleges that on April 17, 2013, Simons possessed a .32 caliber pistol that he gave to a bail bondsman as partial payment for bonding him out of jail.
In January, 2010, Simons, a former employee of the Schneider Medical Clinic in Haysville, Kan., was sentenced to 24 months in federal prison to be followed by three years on supervised release after he pleaded guilty to two counts of unlawfully distributing a controlled substance. In his plea, he admitted he prescribed fentanyl and that the prescriptions were not issued for a legitimate medical purpose or made in the usual course of medical practice because the person who received the prescription was not his patient.
An affidavit supporting the firearm charge alleges that in April 2013 an agent of the Bureau of Alcohol, Tobacco, Firearms and Explosives learned that Simons had given a pistol to Steven Woodin, proprietor of S&F Bail Bonds in Wichita. Simons owed Woodin for bonding him out of jail on a $25,000 bond in a Sedgwick County District Court case involving a charge of making a criminal threat.
Under federal law, convicted felons are prohibited from possessing firearms.
If convicted, Simons faces a maximum penalty of 10 years in federal prison and a fine up to $250,000. The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated. Assistant U.S. Attorney Alan Metzger is prosecuting.
In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.
Former Hedge Fund Co-Founder, Anthony Chiasson, Sentenced in Manhattan Federal Court to 78 Months in Prison for Insider TradingRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that ANTHONY CHIASSON, a former portfolio manager and co-founder of the hedge fund Level Global Investors (“Level Global”), was sentenced in Manhattan federal court to 78 months in prison for crimes stemming from his involvement in insider trading schemes that netted nearly $70 million in illegal profits for Level Global. CHIASSON and co-defendant Todd Newman, a former portfolio manager of Diamondback Capital Management (“Diamondback”), were convicted of securities fraud charges on December 17, 2012, following a six-week jury trial. At trial, CHIASSON was convicted of one count of conspiracy to commit securities fraud, and five counts of securities fraud. He was sentenced today by U.S. District Judge Richard J. Sullivan.
Manhattan U.S. Attorney Preet Bharara said: “With his sentence today, Anthony Chiasson chose to be part of a corrupt circle of friends that cheated the market to gain an unfair trading advantage, and for that, he lost his career, his reputation and now he has lost his liberty. Such catastrophic losses should deter those who would be tempted to break the law, but for those who are undeterred, we are not going away.”
According to the Superseding Indictment, other court documents, statements made in court, and the evidence presented at trial:
CHIASSON was part of a criminal club of portfolio managers and analysts who obtained material nonpublic information (“Inside Information”), directly and indirectly, from employees who worked at public companies. Specifically, CHIASSON’s research analyst, Sam Adondakis, together with research analysts at other investment firms – including Jesse Tortora, Jon Horvath and Danny Kuo – shared Inside Information with each other which they then provided to their portfolio managers.
For example, in 2008 and 2009, CHIASSON received Inside Information from Adondakis related to Dell’s quarterly earnings, which Adondakis had received from Newman’s analyst, Tortora, and Sandy Goyal, an analyst who worked at another firm. Goyal had a source inside Dell’s investor relations department who provided numerous updates on Dell’s earnings in advance of Dell’s earnings announcements for multiple quarters. CHIASSON traded on the Dell Inside Information in advance of its May 2008 and August 2008 quarterly earnings announcements, netting $58.5 million in illegal profits for his firm. Additionally, after CHIASSON received the Dell Inside Information from Adondakis in advance of the August 2008 Dell trade, he directed Adondakis to create a trading “template” which omitted the fact that the trade was based on inside information.
In 2009, CHIASSON also obtained inside information concerning NVIDIA Corporation’s earnings from Adondakis, who had obtained the information from analyst Danny Kuo, who worked at an investment firm in California. Adondakis passed specific numbers for NVIDIA’s gross margins to CHIASSON in the days leading up to the company’s earnings announcement of those numbers on May 7, 2009. CHIASSON’s trading in NVIDIA resulted in approximately $10 million in illegal trading profits for Level Global.
In addition to the prison term, Judge Sullivan sentenced CHIASSON, 39, of New York, New York, to one year of supervised release. CHIASSON was also ordered to pay a $5 million fine.
At trial, Newman, 48, of Needham, Massachusetts, was convicted of one count of conspiracy to commit securities fraud, and four counts of securities fraud. He was sentenced on May 2, 2013 to 54 months’ imprisonment.
Horvath, 43, and Kuo, 37, each pled guilty to one count of conspiracy to commit securities fraud and two counts of securities fraud in September 2012 and April 2012, respectively. Tortora, 35, Adondakis, 41, and Goyal, 40, each pled guilty to one count of conspiracy to commit securities fraud and one count of securities fraud in May 2011, April 2011, and June 2011, respectively. All five of these defendants await sentencing.
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.
Assistant U.S. Attorneys Antonia M. Apps, Richard C. Tarlowe, and John T. Zach are in charge of the prosecution.
Former Employee Pleads Guilty to Stealing $1,800 from DEARead the Press Release
PITTSBURGH, Pa. - A former employee of the Drug Enforcement Administration pleaded guilty in federal court to a charge of theft of government money, United States Attorney David J. Hickton announced today.
Holly A. Cook, 44, of Monongahela, Pa., pleaded guilty to one felony count before Senior United States District Judge Donetta W. Ambrose.
In connection with the guilty plea, the court was advised that in June 2012, Cook embezzled $1,800.00 in cash from the United States Drug Enforcement Administration, knowing that she was not entitled to this money.
Judge Ambrose scheduled sentencing for Sept. 10, 2013 at 10 a.m. The law provides for a maximum total sentence of not more than 10 years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
The court released Cook on a $10,000 unsecured bond pending sentencing.
Assistant United States Attorney Mary McKeen Houghton is prosecuting this case on behalf of the government.
The United States Department of Justice, Office of the Inspector General, conducted the investigation leading to the Information in this case.
Former Bend Area Bank Loan Officer Pleads Guilty to $2.6 Million FraudRead the Press Release
Case Relates to the Collapse of Desert Sun Development in Bend, OregonEUGENE, Ore. – Today, Jeffrey Sprague, 50, of Bend, Oregon, appeared before Chief U.S. District Court Judge Ann Aiken and pleaded guilty to conspiracy to make false statements to a financial institution, to commit wire fraud, and to commit bank fraud. The charge arose out of the collapse of Desert Sun Development (DSD), a development and construction company in Bend, Oregon. As part of his guilty plea, Sprague admitted that he caused his former employer, West Coast Bank, to lose more than $2.6 million on fraudulent loans.
According to court documents, Sprague, a loan officer at West Coast Bank at the time, falsified loan applications for DSD employees and others by fraudulently inflating their monthly income and falsely claiming that these homes were going to be the employees’ primary residences when he knew these homes were part of DSD’s flipping scheme. Sprague also knew that these loan files contained forged or scanned signatures and other material misrepresentations and omissions. West Coast Bank approved and funded the loans for DSD employees and others based on the loan applications Sprague falsified as well as the other documents that Sprague submitted to the bank that he knew were false.
Out of the DSD investigation, 13 individuals were charged in five indictments, and, with Sprague’s guilty plea, all 13 defendants have pled guilty. Sprague is scheduled to appear before Chief Judge Aiken for sentencing on September 3, 2013. Sentencing hearings for the co-defendants are scheduled for July 10 and July 31, 2013, before Chief Judge Aiken.
Conspiracy carries a maximum sentence of five years in prison and a $250,000 fine.
This case was investigated by the FBI, IRS-Criminal Investigations, and the Oregon Division of Finance and Corporate Securities. Assistant U.S. Attorney Scott E. Bradford is handling the prosecution of the case.
Florida Resident Sentenced to 10 Years on Drug Conspiracy ChargeRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-7725 ● Contact: Chris Zumpetta-Parr, Public Affairs SpecialistFollow us on Twitter @NDWVnews
WHEELING, WEST VIRGINIA - A 35-year old Deland, Florida, resident was sentenced on May 13, 2013, in United States District Court in Wheeling by Judge Frederick P. Stamp, Jr.
United States Attorney William J. Ihlenfeld, II, announced that: JAMIE L. JOYNER was sentenced to 120 months imprisonment to be followed by three years of supervised release. JOYNER entered a plea of guilty on January 3, 2013, to “Conspiracy to Distribute Schedule II Controlled Substances” from March of 2012 to September 12, 2012, for his role in Florida to West Virginia pill ring. In a joint investigation, involving the Marshall County Sheriff’s Department, the Moundsville Police Department, the DEA, United State Postal Service, and the West Virginia State Police, beginning in the spring of 2012, agents received information that an apartment in Marshall County was being used to distribute oxycodone pills being brought to West Virginia from Florida, typically via rental vehicles. The Court also ordered the forfeiture of $2,096 in drug proceeds.
This case was prosecuted by Assistant United States Attorney John C. Parr.
Fitchburg Man Sentenced for Possessing Child PornographyRead the Press Release
BOSTON – A Fitchburg man was sentenced today in U.S. District Court in Worcester for possessing child pornography.
Roy Parry, 49, was sentenced by U.S. District Judge Timothy S. Hillman to 10 years in prison, followed by 10 years of supervised release. In January 2013, Parry pleaded guilty to possession of child pornography.
In February 2009, Parry placed images containing child pornography in a peer-to-peer file sharing program and that led federal authorities to obtain a search warrant for his home and computer. The execution of that search warrant in May 2009 resulted in the seizure of thousands of images and hundreds of videos containing child pornography. Additionally, in October 2001, Parry had been previously convicted of possession of child pornography.
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. The case was prosecuted by Assistant U.S. Attorney Mark Grady and Ortiz’s Worcester Branch Office.
Federal Court in Georgia Shuts Down Tax Return PreparerRead the Press Release
A federal court permanently barred Larry J. Heath, a Cartersville, Ga., area tax preparer who operated Heath’s Income Tax, Heath & Hames Income Tax and Heath’s Income Tax II, from preparing tax returns for others, the Justice Department announced today. The civil injunction order, to which Heath agreed without admitting the allegations against him, was signed by Judge Harold L. Murphy of the U.S. District Court for the Northern District of Georgia. The government’s complaint in the injunction suit was brought against both Larry Heath and his brother, Andrew R. Heath. The case against Andrew Heath remains pending.
The government complaint alleged that Larry Heath and his businesses repeatedly prepared federal tax returns that unlawfully understated customers’ federal tax liabilities. The suit alleged that Larry Heath concocted bogus losses, expenses, education credits, business expenses and charitable contributions, which he falsely reported on his customers’ federal-income-tax returns.
The Internal Revenue Service (IRS) previously suspended Larry Heath’s IRS-issued electronic filing identification number (EFIN) because of the large number of erroneous returns he prepared, according to the complaint. Larry Heath then supposedly “sold” his business to two different women and used their EFINs to continue to file tax returns, the complaint alleged. The injunction applies to the businesses that were purportedly sold, Heath & Hames Income Tax and Heath’s Income Tax II.
Claiming bogus tax refunds is one of the IRS’s Dirty Dozen Tax Scams .
In the past decade, the Justice Department’s Tax Division has obtained injunctions against hundreds of tax fraud promoters and unscrupulous tax preparers. Information about these cases is available on the Justice Department website .
Related Materials:
Heath Injunction Order
Fargo Man Sentenced for Harboring Illegal AliensRead the Press Release
FARGO - U.S. Attorney Timothy Q. Purdon announced that on May 13, 2013, Garrett Glenn Setterholm of Fargo, N.D., was sentenced before U.S District Judge Ralph R. Erickson on a charge of harboring illegal aliens.
Setterholm, 29, pleaded guilty on Jan. 25, 2013, to harboring six or more workers who were not in the United States legally. Setterholm, who operated Setty Construction, a roofing company out of Fargo, N.D, located and hired the illegal workers online through Craig’s List. As part of their employment, Setterholm provided the illegally employed workers with apartments and transportation to and from the work sites. The incidents occurred between June and September of 2011 in the District of North Dakota and
Minnesota.Judge Erickson sentenced Setterholm to three months’ imprisonment to be followed by six months of home confinement. Setterholm was also ordered to pay an $80,000 forfeiture.
The case was investigated by Homeland Security Investigations.
Assistant U.S. Attorney Nick Chase prosecuted the case.
Elkins Man Pleads Guilty to Wire FraudRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-7725 ● Contact: Chris Zumpetta-Parr, Public Affairs SpecialistFollow us on Twitter @NDWVnews
Ten others appear for Pleas and Sentencings
CLARKSBURG, WEST VIRGINIA - United States Attorney William J. Ihlenfeld, II
announced that the following individuals recently appeared in Federal Court in Clarksburg.RICHARD MAURICE HADDIX, age 33, of Elkins, West Virginia, entered a plea of guilty to “Wire Fraud.” HADDIX was a broker for a transportation management firm and created 230 fictitious cash advances and caused $102,260 to be deposited into his personal bank account. As part of his plea agreement, HADDIX will make restitution in the amount of $102,260 to the victims of his crime. HADDIX, who is free on bond pending sentencing, faces up to 20 years imprisonment and a $250,000 fine. This case was prosecuted by Assistant United States Attorney Stephen D. Warner and investigated by the Elkins Police Department.
BETH ALLEVATO a/k/a “ROXIE”, age 40, of Clarksburg, was sentenced to 33 months imprisonment to be followed by six years of supervised release. ALLEVATO entered a plea of guilty on November 28, 2012, to “Distribution of Cocaine” on December 2, 2011, in Clarksburg. ALLEVATO was remanded to the custody of the United States Marshal pending designation to a Federal institution. The case was prosecuted by Criminal Chief Shawn A. Morgan and investigated by the Harrison County Drug Task Force consisting of officers from the Clarksburg Police Department, the Harrison County Sheriff’s Department and the Bridgeport Police Department.
ANTHONY CRIPPIN, age 29, of Morgantown, entered a plea of guilty to “Distribution of Heroin within 1,000 Feet of WVU.” CRIPPIN, who is in custody pending sentencing, faces a term of at least 1 and up to 40 years imprisonment and a $2,000,000 fine. This case was prosecuted by Assistant United States Attorney Andrew R. Cogar and investigated by the Mon Valley Drug Task Force and the West Virginia State Police. The task force consists of officers from Morgantown Police Department, the Monongalia County Sheriff’s Department, and the Drug Enforcement Administration.
JENNIFER KELLEY, age 28, of Morgantown, West Virginia, entered a plea of guilty to “Distribution of Cocaine Hydrochloride.” KELLEY, who is free on bond pending sentencing, faces up to 20 years imprisonment and a $1,000,000 fine. This case was prosecuted by Assistant United States Attorney Zelda E. Wesley and was investigated by the West Virginia State Police-Bureau of Criminal Investigations.
WILLIAM TRENT RICHARDSON, age 21, of French Creek, West Virginia, entered a plea of guilty to Maintaining a Drug-Involved Premise” from February 2 to September 13,
2012, to manufacture, store, distribute and use methamphetamine. RICHARDSON, who is free on bond pending sentencing, faces up to 20 years imprisonment and a $500,000 fine. This case was prosecuted by Assistant United States Attorney Stephen D. Warner and investigated by the West Virginia State Police.JOHN THOMAS CHINNICI, age 27; VICTOR AVILES, age 32 and ALEX TEJADA, age 31, former inmates at FCI Gilmer entered pleas of guilty to “Assault.” On June 30, 2011, CHINNICI, AVILES and TEJADA assaulted another inmate by punching, kicking and stabbing him eight times with prison-made knives. CHINNICI, AVILES and TEJADA were each sentenced to 12 months imprisonment and remanded to the custody of the United States Marshal. This case was prosecuted by Assistant United States Attorney Brandon S. Flower and was investigated by the Special Investigative Services Staff at FCI Gilmer.
BENJAMIN RAYMOND, age 36, and DRYDEN CRAVENS, age 45, inmates at USP Hazleton entered pleas of guilty to “Assault.” On November 10, 2012, RAYMOND and CRAVENS assaulted another inmate by stabbing them 6 times with prison-made knives. RAYMOND was sentenced to 24 months imprisonment to run consecutive to his current sentence of 300 months. CRAVENS was sentenced to 18 months imprisonment to run concurrent with his current sentence of 77 months. This case was prosecuted by Assistant United States Attorney Brandon S. Flower and was investigated by the Special Investigative Services Staff at USP Hazelton.
ZSA ZSA DEE FIELDS, age 45, of Detroit, Michigan, entered a plea of guilty to “Introduction of a Prohibited Object - Marijuana.” On December 17, 2011, FIELDS provided marijuana to an inmate at FCI Gilmer. FIELDS was sentenced to 18 months probation. The case was prosecuted by Assistant United States Attorney Brandon S. Flower and investigated by the Special Investigative Services at FCI Gilmer.
Eastern Shore Drug Distributor Pleads GuiltyRead the Press Release
Baltimore, Maryland - Austin Roberts, III, age 37, formerly of Elkridge, Maryland, pleaded guilty on May 10, 2013 to conspiring to distribute heroin, cocaine and cocaine base (crack cocaine). Roberts remains detained pending sentencing.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Karl C. Colder of the Drug Enforcement Administration - Washington Field Division; Colonel Marcus L. Brown, Superintendent of the Maryland State Police; Wicomico County Sheriff Michael A. Lewis; Salisbury Police Chief Barbara Duncan; Chief Michael Phillips of the Fruitland Police Department; U.S. Marshal Johnny Hughes; and Wicomico County State’s Attorney Matthew Maciarello.
According to his guilty plea, from 2007 until his arrest in December 2012, Roberts conspired to sell heroin and cocaine with Andrew Jackson, Maurice Hardy and others. Roberts distributed multiple kilograms of cocaine to Hardy on several occasions. For example, after a telephone call in which Hardy indicated that Roberts would be supplying him with seven kilograms of cocaine for $31,500 per kilogram, on May 12, 2011, Jackson, under Roberts’ direction, provided several kilograms of cocaine to Hardy. Subsequent to this meeting, law enforcement stopped Jackson’s vehicle and seized over $160,000 from a hidden compartment.
During the course of the conspiracy, Roberts distributed or directed the distribution of well over 50 kilograms of cocaine, a kilogram of heroin and a quantity of cocaine base.
For well over a year following his indictment on state and federal charges, Roberts eluded arrest. On July 19, 2011, an officer patrolling the New Jersey Turnpike stopped Roberts’ vehicle. Roberts provided a California license under the name John Nash. When the officer learned that the name was an alias for Roberts who was wanted, he requested back up. Roberts ran away as the officers continued to investigate his identity. In August 2012, a California Highway Patrol officer stopped Roberts’ vehicle and Roberts again escaped on foot. Officers seized $29,000 from a hidden compartment in the vehicle. Roberts was arrested in San Diego, California on December 4, 2012.
Roberts and the government have agreed that if the Court accepts the plea agreement Roberts will be sentenced to 19 years in prison. U.S. District Judge Ellen L. Hollander scheduled sentencing for August 9, 2013, at 2:00 p.m.
Andrew Jackson, age 39, of Baltimore, Maryland, Maurice Kenneth Hardy, age 37, of Nanticoke, Maryland, and Tereek Nutter, age 29, of Salisbury, Maryland, previously pleaded guilty to their participation in the drug conspiracy. Judge Hollander sentenced Jackson to 10 years in prison, Nutter to 151 months, and scheduled Hardy’s sentencing for May 14, 2013.
United States Attorney Rod J. Rosenstein commended the DEA, U.S. Marshals Service and the Wicomico County Narcotics Task Force, comprised of the Maryland State Police, Wicomico County Sheriff’s Office, Salisbury Police Department, Fruitland Police Department, and the Wicomico County State’s Attorney’s Office for their work in this investigation. Mr. Rosenstein thanked Assistant United States Attorney Joshua L. Kaul, who prosecuted this Organized Crime Drug Enforcement Task Force case.
Drug Kingpin Kaboni Savage and Sister Kidada Convicted of Arson MurdersRead the Press Release
PHILADELPHIA - A federal jury today found drug kingpin Kaboni Savage, 38, and his sister Kidada, 30, guilty of orchestrating the murders of a federal witness’ family and of conspiring to participate in a long-term, large-scale violent drug trafficking enterprise (RICO conspiracy). The Savages’ co-defendants, Robert Merritt, 32, and Steven Northington, 41, were also convicted of the Racketeering (RICO) conspiracy. Savage was convicted of 12 counts of murder in-aid-of racketeering. Kidada Savage was convicted of six counts of murder in-aid-of racketeering, all related to the firebombing murders of the Coleman family home on October 9, 2004. Kaboni and Kidada Savage were also convicted of conspiracy to commit murder in aid of racketeering, retaliating against a witness by murder, and of using fire to commit a felony (the Coleman murders).
Steven Northington was convicted of two counts of murder in-aid-of racketeering. Both he and Kaboni Savage are eligible for the death penalty. The penalty phase is scheduled to begin May 20, 2013.
Savage’s drug enterprise operated primarily in the North Philadelphia area from at least late 1997 to 2010. After Savage was indicted on drug charges in 2004, he ordered the murders of the family of government witness Eugene Coleman. Lamont Lewis, who has pleaded guilty, firebombed the Coleman family home on Savage’s orders which Kidada Savage relayed to Lewis.In addition to the murders of the six people inside the Coleman home, Savage was convicted of:
▸ the March 19, 1998, murder of Kenneth Lassiter, age 44, of Lansdale, PA, near the corner of 8th and Butler Streets in Philadelphia;
▸ the September 6, 2000 murder of Mansur “Shafiq”Abdullah, age 22, of 11th Street, Philadelphia. Abdullah was shot and his burned body was later recovered in the 4200 block of North Park Avenue, in Philadelphia;
▸ the September 13, 2001 murder of Carlton “Mohammed” Brown, age 27, of Darien Street, Philadelphia;
▸ the February 26, 2003 murder of Barry Parker, age 32, of Susquehanna Avenue, Philadelphia, by Kaboni Savage and Steven Northington, in the 3900 block of North Franklin Street, in Philadelphia;
▸ the March 14, 2003 murder of Tyrone Toliver, age 26, of Cherry Hill, NJ in the 3500 block of North Palmetto Street in Philadelphia; and
▸ the March 1, 2004 murder of Tybius Flowers, age 32, of K Street, by Kaboni Savage and Steven Northington, in the 3700 block of N. 8th Street in Philadelphia;
The RICO conspiracy count carries a maximum sentence of life in prison. Kidada Savage faces a mandatory life term for the murder charges.
The case was investigated by the Federal Bureau of Investigation, the Internal Revenue Service Criminal Investigation Division, the Philadelphia Police Department, and the Maple Shade, New Jersey Police Department. The United States Bureau of Prisons, the United States Marshals Service, and HIDTA (High Intensity Drug Trafficking Area) also assisted in the investigation. The case is being prosecuted by Assistant United States Attorneys David E. Troyer and John M. Gallagher and Trial Attorney Steve Mellin of the Criminal Division’s Capital Case Unit at the U.S. Department of Justice.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Drug Dealer Sentenced in Federal CourtRead the Press Release
MOBILE, Ala. - David McArthur Trotter, of Grand Bay, Alabama, was sentenced in federal court today as a result of his guilty plea to a federal indictment in August of 2011. Trotter pled guilty to two counts in the indictment charging conspiracy to possess with intent to distribute cocaine, and convicted felon in possession of a firearm. Senior United States District Court Judge Charles R. Butler, Jr., imposed the sentence this morning, ordering that Trotter serve 10 years in federal prison on each count, concurrently. Judge Butler ordered that Trotter serve 10 years on federal supervision following his release from imprisonment at the completion of the 10-year prison term. In addition, Trotter was ordered to pay $200 in special mandatory assessments, and a forfeiture judgement was entered as to a diamond-encrusted watch seized from Trotter at the time of his arrest.
The investigation was conducted by the Mobile County Sheriff’s Office and the Department of Homeland Security Investigations. It was prosecuted by Assistant United States Attorney Gloria A. Bedwell.
Detroit-Area Clinic Owner Sentenced to 40 Months in Prison for Role in $19 Million Health Care Fraud SchemeRead the Press Release
A Detroit-area adult day care center owner was sentenced today to serve 40 months in prison for billing for unnecessary psychotherapy services, or services that were not provided, as part of a health care fraud conspiracy which led to more than $19 million in fraudulent Medicare billings.
The sentence was announced by Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade; Special Agent in Charge Robert D. Foley III of the FBI’s Detroit Field Office; and Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Chicago Regional Office.
Checarol Robinson, 41, was sentenced by U.S. District Judge Nancy G. Edmunds in the Eastern District of Michigan. In addition to her prison term, Robinson was sentenced to serve two years of supervised release and was ordered to pay $599,438 in restitution, jointly and severally with her co-defendant, Louisa Thompson, who awaits sentencing following a guilty plea for her role in the scheme.
Robinson pleaded guilty on Aug. 2, 2012, to an indictment charging her with one count of conspiracy to commit health care fraud and three counts of health care fraud.According to Robinson’s admissions during her guilty plea proceeding, Robinson owned group homes where Medicare beneficiaries resided. In return for payments, Robinson provided these Medicare beneficiaries’ information to a fraudulent psychotherapy company – Caldwell Thompson Manor Inc. – owned by co-conspirator Thompson. That information was then used to bill Medicare for psychotherapy services that were not provided or were not medically necessary.
Robinson later owned and operated P&C Adult Day Center, which was incorporated in May 2010 and purported to provide psychotherapy services. Robinson admitted she falsely billed Medicare for individual and group therapy services that were not provided by P&C or were not medically necessary, using the Medicare beneficiaries from her group homes. Thompson, a licensed social worker and Robinson’s co-conspirator from the scheme at Caldwell Thompson, signed patient charts for psychotherapy services purportedly performed at P&C that were medically unnecessary or never performed.
According to court documents, a total of more than $19 million in false claims were submitted by the co-conspirators throughout the course of the conspiracy. Evidence presented at today’s sentencing demonstrated that Robinson was responsible for causing the submission of more than $2 million in fraudulent billings.
This case was prosecuted by Assistant Chiefs Gejaa T. Gobena and Catherine K. Dick of the Criminal Division’s Fraud Section, and Assistant U.S. Attorney for the Eastern District of Michigan Philip A. Ross. It 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 Eastern District of Michigan.
Since their inception in March 2007, strike force operations in nine locations have charged more than 1,480 defendants who collectively have falsely billed the Medicare program for more than $4.8 billion. In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are 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.
Detroit Man Who Sold Thousands of Oxycodone Pills Sentenced to Almost 16 Years in Federal PrisonRead the Press Release
Robert Smith sold more than 11,000 oxycodone tablets in and around Huntington
HUNTINGTON, W.Va. – A Detroit man who illegally sold thousands of powerful prescription painkillers in and around the Huntington area was sentenced on May 13 to 15 years and eight months in federal prison, announced United States Attorney Booth Goodwin. Robert Louis Smith, 40, of Detroit, previously pleaded guilty in February to distribution of oxycodone.
“Every time we put a law-breaking pill dealer out of business, it’s a big step toward getting this problem under control.” U.S. Attorney Booth Goodwin said, “I hope this conviction sends a clear message: There are consequences when you peddle poison in our communities."
On March 12, 2010, Smith met a confidential informant at a McDonald’s restaurant parking lot located on Hal Greer Boulevard in Huntington to complete a prearranged pill transaction. After arriving at the location, Smith entered the police informant’s vehicle and distributed 229 80-milligram oxycodone pills and 257 oxycodone 40-milligram oxycodone pills in exchange for cash that was contained in a white paper bag. Afterward, Smith returned to his vehicle with the bag containing the cash and drove out of the McDonald’s parking lot. A short time later, Smith’s vehicle was stopped by HPD officers. Police arrested Smith and recovered the bag of cash that he received from the pill transaction.
At sentencing, the Court found that Smith had distributed a total of 11,820 80-milligram oxycodone tablets. The Court also found that the oxycodone tablets were brought to the Huntington area and sold by the defendant between June 2009 and March 2010.
The Huntington Police Department and the Drug Enforcement Administration conducted the investigation. Assistant United States Attorney Joseph F. Adams handled the prosecution. The sentence was imposed by Chief United States District Judge Robert C. Chambers.
This case is being prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers in communities across the Southern District.
Detroit Area Home Health Agency Owner <br /> Sentenced to 60 Months for Role in <br /> $13 Million Health Care Fraud SchemeRead the Press Release
A Detroit-area home health care agency owner was sentenced today to 60 months in prison for causing the submission of over $1 million in false and fraudulent billing to Medicare as part of a $13.8 million health care fraud conspiracy.
The sentence was announced by Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade; Special Agent in Charge Robert D. Foley III of the FBI’s Detroit Field Office; and Special Agent in Charge Lamont Pugh, III of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Chicago Regional Office.
According to plea documents, Rehan Khan was an owner of Moonlite Home Care Inc. As the co-owner of Moonlite, Khan paid and directed the payment of sums to doctors to refer patients for home health care services to Moonlite that were not medically necessary and/or never rendered. Khan also worked as a physical therapy assistant for several home health agencies in the Detroit area, known as Physicians Choice Home Health Care LLC and First Care Home Health Care LLC. Khan paid and directed the payment of kickbacks to beneficiaries for Physicians Choice, First Care and Moonlite. The Medicare beneficiaries sometimes pre-signed forms and visit sheets that were later falsified to indicate that they had received home health services that they had never received. Other times, the Medicare beneficiaries’ signatures were forged on forms and visit sheets to indicate that they received home health services that they had never received.
Khan paid and directed the payment of various medical professionals, including nurses, physical therapists, and physical therapy assistants, to create fictitious patient files to document home health services purportedly provided by Moonlite that were never rendered. Khan also signed fictitious patient files purporting to have given physical therapy services at all three home health care agencies that were in fact never rendered.
From about January 2011 through about September 2011, Khan submitted or caused the submission of fraudulent claims by Moonlite, for which Medicare paid approximately $891,473. From about January 2009 through about September 2011, Medicare paid approximately $866,512 to Physicians Choice and First Care for fraudulent physical therapy claims based on falsified files and notes signed by Khan. In total, Khan was responsible for approximately $1,757,985 in false and fraudulent claims to Medicare.
This 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 Eastern District of Michigan. The case was prosecuted by Assistant Chief Catherine K. Dick of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Philip A. Ross of the Eastern District of Michigan.
Since their inception in March 2007, strike force operations in nine locations have charged more than 1,480 defendants who collectively have falsely billed the Medicare program for more than $4.8 billion. In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are 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.
Denver Attorney Indicted Along with Clients for Defrauding the IRSRead the Press Release
DENVER – Eva Melissa Sugar, age 59, of Denver, Colorado, Jerry Lynn Roberts, age 45, of Polk City, Florida, and Gregory Nathan Laurence, age 46, of Germantown, Tennessee, were indicted by a federal grand jury in Denver on May 8, 2013 for various charges related to obstructing and defrauding the Internal Revenue Service, the United States Attorney’s Office and IRS Criminal Investigation announced. The indictment was sealed pending the defendants’ first appearance in U.S. District Court. Sugar, a practicing attorney, appeared before a Magistrate Judge in U.S. District Court in Denver last Friday, May 10, 2013, where she was advised of her rights and the charges. Laurence was issued a summons to appear in U.S. District Court in Denver on May 29, 2013. Roberts is at large.
According to the indictment, Sugar and her co-conspirators both known and unknown to the Grand Jury conspired to defraud the United States for the purpose of impeding, impairing, obstructing, and defeating the lawful Government functions of the Internal Revenue Service. Sugar was a resident of Aurora, Colorado, and was self-employed as an attorney specializing in tax and other legal matters in Denver, Colorado. Sugar worked with Financial Fortress Associates (FFA) clients. FFA was an organization that promoted and advised its clients on schemes to avoid the payment of income and other federal taxes.
FFA promoted Pure Trust Organizations (“PTO”) and “private banking” using so-called Unincorporated Business Organizations (“UBOs”) and Banking Unincorporated Business Organizations (“BUBOs”) as vehicles to conceal business and personal income and asset ownership to avoid paying income, employment, and other federal taxes to the IRS. FFA held seminars and workshops around the country to promote its schemes, which individuals paid to attend. Sugar occasionally attended and spoke at FFA seminars. At those seminars, FFA’s promoters explained the schemes and provided referrals to their co-conspirators, including Sugar, who charged fees to execute the schemes for FFA clients. Generally, the FFA client either caused the understating of business gross receipts or overstated expenses for the FFA client’s legitimate business, thereby decreasing the business’s income.
Sugar provided various services to her clients, which as described, included establishing UBOs, applying for EINs for the UBOs, and opening associated BUBO bank accounts that her clients used to conceal assets and income and to avoid paying taxes to the IRS. Sugar generally was the trustee for the UBOs and had signatory authority for the bank accounts. To prevent the client’s name being associated with the BUBO account, Sugar and the client would identify a third party for the fictitious trust entity or account. That person would be given signatory authority but exercised no authority or control the fictitious trust entity and Sugar and her clients had signature stamps created for these individuals.
Roberts was a resident of Florida who worked for Roberts Enterprises, a family-owned fundraising business, and he was a client of FFA and Sugar. Beginning in November 1999 and continuing through April 2008, Roberts and Sugar, aiding and abetting each other, did corruptly endeavor to obstruct and impede the due administration of the Internal Revenue laws by setting up and using BUBO accounts as described in the above paragraphs. Furthermore, in 2008 Roberts attempted to influence, obstruct, and impede the due administration of justice, by making a variety of threats to Internal Revenue Service criminal investigators after the service of Grand Jury subpoenas relating to UBOs he controlled and other organizations.
Laurence was a resident of Tennessee and was a doctor who operated two businesses, Germantown Aesthetics, LP (“GA”) and Germantown Family Care & Obstetrics, LP (“GFCO”). Laurence was also a client of FFA and Sugar. Beginning in January 2002 and continuing through October 2008, Laurence and Sugar, aiding and abetting each other, did corruptly endeavor to obstruct and impede the due administration of the Internal Revenue laws by setting up and using BUBO accounts as described in the above paragraphs. In March 2008 continuing through January 2009, Laurence attempted to influence, obstruct, and impede the due administration of justice, in that, after contact by Internal Revenue Service criminal investigators and the service of Grand Jury subpoenas relating to GA and GFCO.
“As citizens, we all have an obligation to pay our taxes,” said U.S. Attorney John Walsh. “Hiding income on purpose to avoid paying taxes leads to criminal prosecutions and all the consequences that brings.”
“For those thinking about promoting or participating in fraudulent tax schemes should think twice, there is no secret formula that can eliminate a person's tax obligations.” said Stephen Boyd, Special Agent in Charge for IRS Criminal Investigation, Denver Field Office. “We owe it to every American taxpayer to identify and prosecute both those who evade their taxes and those who promote and assist them in evading their tax obligations through fraudulent tax schemes.”
Sugar was charged with one count of conspiracy to defraud the United States, one count of failing to file a tax return and two counts of obstructing of IRS laws. Roberts and Laurence were each charged one count of obstructing of IRS laws and one count of obstruction of justice. Conspiracy to defraud the United States carries a penalty of not more than 5 years in federal prison, and a fine of up to $250,000. Obstructing of IRS laws carries a penalty of not more than 3 years in federal prison, and a fine of up to $250,000. Failing to file a tax return carries a penalty of not more than 1 year in federal prison, and a fine of up to $100,000. Obstruction of justice carries a penalty of not more than 10 years in federal prison, and a fine of up to $250,000.
This case was investigated by agents with IRS Criminal Investigation. The case is being prosecuted by Assistant U.S. Attorneys Anna Edgar and Matthew Kirsch.
The charges contained in the indictment are allegations, and the defendants are presumed innocent unless and until proven guilty.
####
Dennison Man Sentenced to Nearly 22 Years in Prison for Child Pornography CrimesRead the Press Release
A Dennison man was sentenced to nearly 22 years in prison for crimes related to the production and distribution of child pornography, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
Vernon L. Kriner, Jr., 43, pleaded guilty earlier this year to child exploitation, possession of child pornography and two counts of receipt and distribution of visual depictions of children engaged in sexually explicit conduct.
U.S. District Judge Patricia A. Gaughan sentenced Kriner to 262 months in prison.
This case was prosecuted by Assistant United States Attorney Michael A. Sullivan following an investigation by the Federal Bureau of Investigation.
Denham Springs Man Sentenced to 30 Months in Prison for Attempted Possession of Child PornRead the Press Release
LAFAYETTE, La.: United States Attorney Stephanie A. Finley announced today that Brad Maruschak, 37, of Denham Springs, La., was sentenced to 30 months in prison by U.S. District Court Judge Richard T. Haik for attempted possession of child pornography. Maruschak is also required to complete five years of supervised release and register as a sex offender. Maruschak pleaded guilty on Dec. 17, 2012.
According to the evidence presented at the guilty plea, Maruschak contacted an individual who he thought was a 14-year-old girl in an online chat room in April 2010. The person chatting with Maruschak was in fact an undercover Louisiana State Police officer in Lafayette posing as a 14-year-old girl. From April to August, Maruschak took part in a series of sexually graphic communications and asked the 14-year-old girl for pictures.
“Unfortunately, the internet should not be the playground for predators. Child predators troll the internet looking for children so that they can lure them into abusive situations,” Finley said. “In this case, the defendant was apprehended before any children were abused. Hopefully, this case causes child predators to think twice before trying to connect to youths online. We will continue to prosecute these cases. The safety of the children in this community is a priority for the Western District.”The Louisiana State Police investigated the case, and Assistant U.S. Attorney Myers P. Namie 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.
The U.S. Attorney’s Office and the U.S. Department of Homeland Security/Homeland Security Investigations/Immigration & Customs Enforcement (ICE)
encourages the public to report suspected child predators and any suspicious activity through its toll-free hotline at (866) DHS-2ICE. Investigators are available at all hours to answer hotline calls. Tips or other information can also be submitted to ICE online at www.ice.gov/exec/forms/hsi-tips/tips.asp.Convicted Terrorist Sentenced to Life in Prison for Plotting to Kill Witnesses in His Terrorism TrialRead the Press Release
At a hearing today in federal court in the Eastern District of North Carolina, Hysen Sherifi, 29, of Raleigh, N.C., was sentenced by Senior U.S. District Judge W. Earl Britt to life in prison. Sherifi’s co-defendants, Shkumbin Sherifi, 23, and Nevine Aly Elshiekh, 48, were also sentenced to 36 months and 42 months in prison, respectively, both followed by three years of supervised release.
The sentences were announced by John Carlin, Acting Assistant Attorney General for National Security; Thomas G. Walter, U.S. Attorney for the Eastern District of North Carolina; and John Strong, Special Agent in Charge of the FBI Charlotte Division.
“Today, a convicted terrorist who plotted from his prison cell to behead federal agents and witnesses received the justice he deserved. As this sentence demonstrates, those who attempt to thwart the judicial process through violence will be prosecuted to the fullest extent of the law. I thank all those who worked to ensure that Hysen Sherifi’s original terrorist plans against U.S. military personnel and others were derailed, and that his subsequent murder-for-hire plot against those who testified against him was thwarted,” said John Carlin, Acting Assistant Attorney General for National Security.
U.S. Attorney Walker stated, “This case serves as an unfortunate reminder that we must remain ever vigilant in our efforts to detect violent extremists who seek to harm our people and property.”
“Hysen Sherifi, while in prison on a terrorism conviction, hatched a sinister murder for hire plot against the witnesses and FBI agents who helped convict him. The sentences handed down today send a clear message the FBI and our law enforcement partners will not tolerate attempts to thwart the judicial process,” said FBI Special Agent in Charge Strong.
On Nov. 8, 2012, Hysen Sherifi (Sherifi) was found guilty by a jury of all nine counts of the indictment filed against him. Sherifi was charged with plotting to kill six witnesses who had testified against him at his 2011 terrorism trial (United States v. Boyd, et al.). On Nov. 1, 2012, his co-conspirators, Shkumbin Sherifi and Nevine Aly Elshiekh, pleaded guilty to one count of conspiracy to commit murder-for-hire and each testified during the murder-for-hire trial of Sherifi.
After his October 2011 terrorism conviction, and while awaiting his sentencing for the same, Sherifi plotted to kill three FBI agents and three government informants who testified at his terrorism trial. Sherifi sought to kill these individuals as revenge for his conviction; to prevent their testimony at co-conspirator Anes Subasic’s upcoming trial; and to get a new trial for himself. Sherifi recruited his brother, Shkumbin Sherifi, and Elshiekh, a local school teacher to assist him in his plot. The Sherifis and Elshiekh then raised money to pay for the murders.
In January 2012, Elshiekh met with a government informant whom she believed to be the “middleman” for a hit man in order to discuss the murder plot and possible targets. Elshiekh then relayed that information to Sherifi during a jail visit. Sherifi specified that he wanted each target to be beheaded and photographed after the beheading. At a second meeting with the middleman, Elshiekh confirmed the identity of a government witness to be murdered and made a down payment. The conspirators then worked together to collect the remaining funds needed to pay for the first murder. After collecting the funds, the conspirators arranged another series of meetings with the middleman to pay for the murder and get photographic confirmation of the first murder. On Jan. 22, 2012, the conspirators were all arrested shortly after Shkumbin Sherifi accepted pictures from the supposed middleman, purporting to show a beheaded government witness.
On Feb. 21, 2012, a nine-count indictment was filed charging Sherifi, Shkumbin Sherifi, and Elshiekh with conspiracy and aiding and abetting in the attempt to use interstate commerce facilities in the commission of murder-for-hire; conspiracy and aiding and abetting in the attempt to kill another person with intent to retaliate against any person for testimony given by a witness in an official proceeding; and conspiracy and aiding and abetting in the attempt to kill another person with intent to prevent the attendance or testimony of any person in an official proceeding.
The investigation of this case was conducted by the FBI Resident Agencies in Raleigh and Wilmington, N.C., with the assistance of the New Hanover County, N.C., Sheriff’s Office.
The prosecution is being handled by Assistant U.S. Attorneys J. Frank Bradsher and Brian S. Meyers of the U.S. Attorney’s Office for the Eastern District of North Carolina, and Trial Attorney Matthew F. Blue of the Counterterrorism Section in the Justice Department’s National Security Division.Celina Pharmacist Sentenced in Federal CourtRead the Press Release
William Lester Donaldson, 53, of Celina, Tennessee was sentenced on May 10, 2013, by Chief United States District Judge William J. Haynes, Jr., to serve 15 months in prison, followed by 3 years of supervised release and a fine of $25,000 for possessing Hydrocodone with the intent to distribute, announced David Rivera, Acting U.S. Attorney for the Middle District of Tennessee.
Donaldson was a pharmacist in Celina, Tenn. and on five occasions, between August 13, 2010, and October 5, 2010, in various locations in the Middle Tennessee area, he advanced and sold Hydrocodone pills to individuals without a valid prescription. Donaldson’s conduct was captured by an in-store surveillance system, showing him removing previously prepared bottles from a drawer within the pharmacy and placing them in his pocket.
Donaldson was indicted on April 20, 2011, and pleaded guilty to five counts of illegally possessing and distributing Hydrocodone on November 13, 2012.
This investigation was conducted by the Celina Police Department, the 13th Judicial District Drug Task Force, the Tennessee Bureau of Investigation, the Drug Enforcement Administration, and Health and Human Services, Office of Inspector General. Assistant U.S. Attorney Lynne T. Ingram represented the government.