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20 June 2013
Four Charged in Multi-Million Dollar Ponzi SchemeRead the Press Release
MOBILE, AL - United States Attorney Kenyen R. Brown announces today that Yaman Sencan, David Petersen, Stephen Merry and Timothy Durkin were indicted on May 29, 2013 for the roles in a multi-million dollar Ponzi scheme. The indictment was unsealed today.
The indictment charges that the defendants conspired to operate a nationwide Ponzi scheme, with several victim investors in Mobile and Baldwin County, Alabama. According to the indictment, the defendants falsely represented to the investors, among other things, that: they had developed a high speed, computerized arbitrage trading system that was designed to take of advantage of, and profit from, stock price differentials among different markets; a billionaire real estate mogul in New York financially backed the system; there was little, if any, risk of losing money in the arbitrage system; any trading losses, in the rare event they occurred, would be capped at $5,000; and they could withdraw their principal and earned income at any time.
In actuality, although the real estate developer had a prior business relationship with one of the defendants, he did not financially support, nor was he associated with, the defendants’ purported investment system. Further, the funds were not invested as promised. In fact, once the investors wired their funds to participate in the investment system, they were quickly diverted by the defendants to make Ponzi payments to other investors or converted to their personal use. Despite that, each week the defendants sent account statements to the investors falsely representing that their funds were being invested and that they were recognizing a continual profit regardless of market conditions. At one point, many investors unexpectedly requested the return of their funds. In response, the defendants repeatedly stalled these requests by claiming that the funds could not be returned until a purported sale of the system to another investment group could be completed. To this date, no such sale has been finalized, and no investors have received the return of their funds.
All defendants are charged with one count of conspiracy to commit securities and wire fraud, under 18 U.S.C. § 371, one count of substantive securities fraud, under 15 U.S.C. § 77q, and 18 counts of wire fraud, under 18 U.S.C. § 1343. The maximum terms of imprisonment for these charges range from five to 20 years.
The indictment also includes a forfeiture notice seeking a $4.9 million money judgment against the defendants, which represents the total amount of funds invested in the Ponzi scheme.
The case is being investigated by the Federal Bureau of Investigation and the Alabama Securities Commission. Assistant United States Attorneys Adam W. Overstreet and Gregory A. Bordenkircker and will prosecute the case for the United States. As in all criminal cases, the indictment is a determination by a grand jury that there is probable cause to believe that offenses have been committed by the defendants. The defendants, of course, are presumed innocent until and unless they are proven guilty at trial.
Former Union Officers Sentenced to PrisonRead the Press Release
A former President and Secretary-Treasurer of Communication Workers Local 84555 in Webberville have been sentenced to prison for embezzling union funds, United States Attorney Barbara L. McQuade announced today.
McQuade was joined in the announcement by District Director Ian Burg, Office of Labor-Management Standards of the United States Department of Labor.
U.S. District Judge Gershwin A. Drain sentenced former union President James Killingsworth, 40, of Webberville, and Billie Jo Killingsworth, 42, of Williamston, to six months’ imprisonment restitution of $19,197.02. Judge Drain emphasized that the money had been embezzled from the defendants’ fellow union members. The defendants were married at the time of the offense, but have since divorced.
Both defendants pleaded guilty on February 21, 2013. As part of their plea agreements, they admitted that between January 30, 2008 and June 21, 2010 they had cooperated in embezzling the money by making cash withdrawals from the local’s bank account and using it for their personal expenses.
“Labor union officials who steal from the workers they are entrusted to represent will be held accountable for their actions,” McQuade said.
The case was investigated by the Office of Labor-Management Standards of the United States Department of Labor.
Former Lt. Governor’s Sentence Increased to 108 MonthsRead the Press Release
Saipan, MP – United States Attorney ALICIA A.G. LIMTIACO, U.S. Attorney for the Districts of Guam and the Northern Mariana Islands (NMI), announced that on June 12, 2013, following a successful appeal by the United States, Timothy P. Villagomez, former Lieutenant Governor of the Commonwealth of the Northern Mariana Islands, was re-sentenced to a term of imprisonment of 108 months on corruption charges. Mr. Villagomez had initially been sentenced to 87 months in prison.
The bribery and fraud charges related to the purchase by the Commonwealth Utilities Corporation of a chemical -- at a 400% mark-up -- from companies owned by Mr. Villagomez’s sister and brother-in- law, co-defendants James and Joaquina Santos. The scheme resulted in a loss of $346,125 and extended over ten years, beginning when Mr. Villagomez was executive director of the utility, and lasting through
2007, when he was Lieutenant Governor of the CNMI, exercising de facto control over the utility. The sentence is the result of a guilty verdict returned on April 24, 2009, after a 19-day jury trial. Mr. Villagomez received an original sentence of 87 months. He unsuccessfully appealed his conviction. The United States cross-appealed, arguing that his sentencing range should be enhanced because the offense involved corruption by an elected public official or other public official in a high-level decision-making position. The Court of Appeals agreed and remanded the case to the district court for re- sentencing. On remand the district court applied the enhancement and increased Mr. Villagomez’s sentence to 108 months. Upon completion of his term of imprisonment, the defendant will be subject to a three-year term of supervised release.Mr. Villagomez, along with his co-defendants, is jointly and severally liable for restitution in the amount of $346,125, which is to be paid to the Commonwealth Utilities Corporation. The case was prosecuted by Assistant U.S. Attorney Eric O’Malley and First Assistant U.S. Attorney Jeff Strand and investigated by the Federal Bureau of Investigation. The CNMI Office of the Public Auditor assisted in the investigation. Assistant U.S. Attorney Ross Naughton handled the re-sentencing.
Former Jasper County Official Sentenced for Document FraudRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that the former public administrator of Jasper County, Mo., was sentenced in federal court today for document fraud, which was part of a scheme in which she illegally obtained federal benefits for her public wards.
Rita Frances Hunter, 60, of Joplin, Mo., was sentenced by U.S. District Judge Dean Whipple to 12 months and a day in federal prison without parole. The court also ordered Hunter to pay $120,000 in restitution to the Department of Health and Human Services. Hunter must report on Aug. 1, 2013 to begin serving her prison sentence.
“This elected official betrayed the public trust and defrauded the government,” Dickinson said. “The citizens of Jasper County deserve to have honest public servants who fulfill their civic obligations lawfully, and in this case, they deserved better.”
Hunter, who pleaded guilty to document fraud on Nov. 6, 2012, was the elected Public Administrator for Jasper County from Jan. 1, 2005, to Dec. 31, 2008.
Hunter admitted that her scheme involved a total fraud of $70,000 to $120,000. Hunter directed her employees to submit materially false Medicaid applications for wards of the state who were under the custody of the Public Administrator=s office. These applications falsely stated that the wards had assets below the $1,000 threshold to be eligible to receive Medicaid benefits, when in fact, the wards had more than $1,000 in assets.
Hunter specifically pleaded guilty to directing her staff to prepare a fraudulent Medicaid eligibility statement for a ward identified only as T.V. Hunter knew the statement, which was submitted to Missouri Health Net on Aug. 6, 2008, contained false information. The written statement in the document indicated that T.V. had a total bank account balance of $827.27, when in fact, T.V. had funds totaling $6,919. This false statement was made on this document to ensure that T.V. would meet the monetary threshold (no more than $1,000) imposed by Medicaid, and was material to Medicaid’s determination that T.V. was eligible for Medicaid benefits.
Hunter caused this statement to be stamped with her signature verifying that it was true, when in fact it was false. Hunter instructed her employees to fabricate T.V.’s bank statements to ensure T.V. would qualify for Medicaid benefits, when she was, in fact, not eligible.
The court also considered additional criminal conduct in which Hunter engaged in calculating today’s sentence.
This case was prosecuted by Assistant U.S. Attorney Randall D. Eggert. It was investigated by the U.S. Department of Health and Human Services, the U.S. Social Security Administration, the FBI, the Missouri State Highway Patrol and the Missouri Department of Social Services Legal Investigation Section.
Former Boxing Champ Indicted for Robbing Six Banks in the East BayRead the Press Release
OAKLAND, Calif. - A federal grand jury in Oakland indicted James Quindale Page today with six counts of bank robbery, announced United States Attorney Melinda Haag.
The indictment alleges that James Quindale Page, 42, of Pittsburg, robbed the following banks:
Date
Bank
Location
Amount Stolen
3/6/2013
Chase Bank
1510 Palos Verdes Mall, Walnut Creek
$1,856
3/12/2013
Wells Fargo
4767 Hopyard Road, Pleasanton
$670
5/29/2013
Bank of America
2545 Main Street, Oakley
$1,507
6/3/2013
Chase
5747 Christie Avenue, Emeryville
$7,033
6/7/2013
US Bank
3636 Lone Tree Way, Antioch
$1,280
6/8/2013
Wells Fargo
3525 Mount Diablo Boulevard, Lafayette
$5,450
Page was arrested on June 10, 2013, and made his initial appearance in federal court in Oakland on June 13, 2013. Page is currently in custody. His next scheduled appearance is at 9:30 a.m. on June 27, 2013, for arraignment on the indictment before U.S. Magistrate Judge Donna M. Ryu.
The maximum statutory penalty for each count of bank robbery in violation of 18 U.S.C. § 2113(a) is 20 years in prison. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Brian C. Lewis is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Janice Pagsanjan. The prosecution is the result of an investigation by the FBI, the Walnut Creek Police Department, the Pleasanton Police Department, the Antioch Police Department, the Oakley Police Department, the Emeryville Police Department, and the Lafayette Police Department.
Please note, an indictment contains only allegations against an individual and, as with all defendants, Page must be presumed innocent unless and until proven guilty.
(Page Complaint )
(Page Indictment )
Former Background Investigator for Federal Government Pleads Guilty to Making A False StatementRead the Press Release
WASHINGTON – Ramon S. Davila, 59, a former background investigator under contract with the U.S. Office of Personnel Management (OPM), pled guilty today to a charge stemming from his falsification of work on background investigations of federal employees and contractors, announced U.S. Attorney Ronald C. Machen Jr. and Patrick E. McFarland, Inspector General for the Office of Personnel Management.
Davila, of Fredericksted, St. Croix, U.S. Virgin Islands, pled guilty in the U.S. District Court for the District of Columbia to making a false statement. The Honorable Chief Judge Royce C. Lamberth scheduled sentencing for Sept. 3, 2013, before Judge Amy Berman Jackson. The charge carries a statutory penalty of up to five years in prison and a fine of up to $250,000. As part of his plea agreement, Davila must pay $79,468 in restitution to the federal government.
According to a statement of offense submitted to the Court, Davila worked for three contractors that did federal background investigations on behalf of OPM’s Federal Investigative Services.
Between August 2006 and August 2007, in multiple Reports of Investigations on background investigations, Davila represented that he had interviewed a source or reviewed a record regarding the subject of the background investigation. In fact, he had not conducted the interviews or obtained the records of interest. His reports were utilized and relied upon by the agencies requesting the background investigations to determine whether the subjects were suitable for positions having access to classified information, for positions impacting national security, or for receiving or retaining security clearances.
Davila’s false representations have required Federal Investigative Services to reopen and rework numerous background investigations that were assigned to him during the time period of his falsifications, at an estimated cost of at least $79,468 to the U.S. government.
Federal Investigative Services has a robust integrity assurance program which utilizes a variety of methods to ensure the accuracy of reported information. The falsification of investigative case work by the defendant was detected through the program.
This is one of numerous cases prosecuted by the U.S. Attorney’s Office for the District of Columbia in the last four years involving false representations by background investigators and record checkers working on federal background investigations. In addition to Davila, 15 other background investigators and two record checkers have been convicted of charges.
Federal Investigative Services, through its workforce of approximately 7,600, including 6,100 field investigators, is responsible for conducting background investigations for numerous federal agencies and their contractors, on individuals either employed by or seeking employment with those agencies or contractors. Federal Investigative Services conducted more than 2.1 million investigations during the 2012 fiscal year. More than 770,000 of these investigations involved applicants for access or continued access to classified information.
In performing background investigations, the investigators conduct interviews of individuals who have information about the person who is the subject of the review. In addition, the investigators seek out, obtain, and review documentary evidence, such as employment records, to verify and corroborate information provided by either the subject of the background investigation or by persons interviewed during the investigation. After conducting interviews and obtaining documentary evidence, the investigators prepare a Report of Investigation containing the results of the interviews and document reviews, and electronically submit the material to OPM in Washington, D.C. OPM then provides a copy of the investigative file to the requesting agency, which can use the information to determine an individual’s eligibility for employment or a security clearance.
In announcing the plea, U.S. Attorney Machen and Inspector General McFarland praised the efforts of Special Agents Nunzio Orlando, OPM, Office of the Inspector General, and Philip Kroop and David Newcomer, OPM, Federal Investigative Services. Mr. Machen and Mr. McFarland also acknowledged the work of Paralegal Specialist Diane Hayes, Assistant U.S. Attorneys Ellen Chubin Epstein and Maia L. Miller, and former Assistant U.S. Attorney Mary Chris Dobbie, who investigated and prosecuted this matter.
13-217Florida Man, George W. Potter, Indicted for Distribution of Child PornographyRead the Press Release
GEORGE W. POTTER, 27, of Navarre, Florida, was indicted by a federal grand jury today for crimes involving the sexual exploitation of children, announced U. S. Attorney Dana J. Boente.
POTTER was charged in an Indictment for Distribution of Child Pornography. According to today’s indictment, on January 6, 2012, POTTER distributed images of child pornography through the use of a computer.
If convicted, POTTER faces a mandatory minimum penalty of five years and a maximum penalty of twenty years, followed by up to a lifetime term of supervised release, and a $250,000 fine. In addition, POTTER will likely be required to register as a sex offender.
U. S. Attorney Boente reiterated that the Indictment is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
This case was investigated by special agents from the U. S. Department of Homeland Security, HSI. The prosecution of this case is being handled by Project Safe Childhood Coordinator and Strike Force Chief, Assistant U. S. Attorney Brian M. Klebba.
Florida Man Convicted on All 11 Counts Related to Scheme to Defraud Navy Federal Credit UnionRead the Press Release
ALEXANDRIA, Va. – Michael Wellington Logan, 52, of Clermont, Fl., was convicted late yesterday by a federal jury on all 11 counts with which he was charged including conspiracy, wire fraud, and money laundering.
Neil H. MacBride, United States Attorney for the Eastern District of Virginia, Valerie Parlave, Assistant Director of FBI’s Washington Field Office, made the announcement after the jury's verdict was accepted by United States District Judge Liam O’Grady.
Logan faces a maximum penalty of thirty years on each count of conspiracy and wire fraud, and ten years on each money laundering count when he is sentenced on September 20, 2013.
Logan was indicted on March 27, 2013, by a federal grand jury in Alexandria, Va. According to court records and evidence adduced at trial, Logan engaged in a brazen scheme to defraud the Navy Federal Credit Union (“NFCU”) in Vienna, Va. Logan worked with co-conspirator Theodric Delur Bingham, 42, of Snellville, Ga., to found a company doing business as “Cash Money Brothers, LLC” to convince unwitting borrowers to apply for loans to obtain purchase mortgages. In advance of the loans from NFCU, Logan filed quit claim deeds to make it appear that borrowers already owned the properties, in order to apply for secondary equity loans instead of purchase mortgage loans, which have stricter requirements. After submitting false membership applications to NFCU, Logan and Bingham also paid NFCU insider Duane Gerarda Nixon, 40, of Dumfries, Va., to push false loan applications to fund the loans. After Logan and Bingham convinced borrowers to turn over loan proceeds, rather than use them to pay the mortgages on the investment properties as promised, Logan used the proceeds to personally enrich himself. In other instances, following approval of the fraudulent loan applications, Logan and his co-conspirators would direct the loaned funds into the Cash Money Brothers’ account without the knowledge of the investment property owners and convert those funds to their own personal use. As a result of the scheme, NFCU lost more than $476,000. Bingham and Nixon had previously been convicted and await sentencing.
This case was investigated by the FBI’s Washington Field Office. Assistant United States Attorneys Alexander T. H. Nguyen and Lindsay A. Kelly are prosecuting the case on behalf of the United States.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.Federal Jury in Rhode Island Convicts Indiana Man in Black Money ScamRead the Press Release
PROVIDENCE, R.I. – A federal court jury in Providence, R.I., on Wednesday convicted Alvin Pennue, 32, of Indianapolis, Ind., with passing altered United States currency on two occasions and inducing a victim to transport $5,000 from Massachusetts to Rhode Island as part of a Black money scam, announced United States Attorney Peter F. Neronha and Brian S. Deck, Acting Resident Agent in Charge of the Providence Office of the United States Secret Service.
Black money scams are schemes to defraud whereby individuals attempt to obtain money from a victim by persuading that person that large quantities of banknote-sized paper are really U.S. currency that has been dyed black, typically to avoid detection by customs agents. The victim is persuaded, with the prospect of sharing in the proceeds, to supply real currency to purchase supplies and otherwise facilitate a chemical transformation that will remove the black dye covering the supposedly genuine currency. In reality, except for a few genuine currency bills used to advance the scheme, the black money is usually black construction paper.
The government’s evidence, presented to the jury during two days of testimony, showed that during October 2011, Alvin Pennue, through another person, passed to an undercover U.S. Secret Service agent two blackened U.S. $100 bills and passed to a victim two blackened $20 bills. Mr. Pennue persuaded the victim to withdraw $5,000 in $100 bills from his bank account in Massachusetts on October 21, 2011, and to bring that money to Providence to invest in the black money scam.
At the time of his arrest on October 28, 2011, Mr. Pennue and a second person were in possession of a black suitcase containing supplies used to facilitate a black money scam. Mr. Pennue was also in possession of over $2,700, including twenty-three $100 bills.
Alvin Pennue was convicted of two counts of passing altered obligations of the United States and one count of interstate transportation of stolen property - inducing a victim to transport U.S. currency in interstate commerce as part of a scheme to defraud.
Passing altered currency is punishable by up to 20 years in federal prison; up to 5 years supervised release; and up to a $250,000 fine. Inducing interstate transportation of money for fraud is punishable by up to 10 years in federal prison; up to 3 years of supervised release; and up to a $250,000 fine.
Pennue, who was detained following the verdict, is scheduled to be sentenced by U.S. District Court Judge John J. McConnell, Jr. on September 4, 2013.
Arrests warrants have been issued for two co-defendants in this matter, Saah Johnson, 36, of Fall River, Mass., and Anthony Chadheen, 35, of Providence.
The case was prosecuted by Assistant U.S. Attorney Richard W. Rose and Special Assistant U.S. Attorney Benjamin S. Towbin.
The Bureau of Alcohol, Tobacco, Firearms and Explosives, the Providence Police Department, and the Rhode Island State Fire Marshal’s Office assisted the U.S. Secret Service in the investigation of this matter.
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To assist the media and the public, a glossary of federal judicial terms and procedures is available at http://www.justice.gov/usao/justice101/Contact: 401-709-5357
[email protected]Fabio Noel-Rodriguez Sentenced in U.S. District CourtRead the Press Release
The United States Attorney's Office announced that during a federal court session in Billings, on June 19, 2013, before U.S. District Judge Sam E. Haddon, FABIO NOEL-RODRIGUEZ, age 37, was sentenced to a term of:
Prison: 148 months
Special Assessment: $ 100
Supervised Release: 5 years
NOEL-RODRIGUEZ was sentenced in connection with his guilty plea to possession with the intent to distribute methamphetamine.
In an Offer of Proof filed by Assistant U.S. Attorney Jessica T. Fehr, the government stated it would have proved at trial the following:
On the evening of January 24, 2011, the Yellowstone County Sheriff's Office (YCSO) received a phone call from a desk clerk at a hotel in Lockwood. The desk clerk told law enforcement that a man and woman had just checked into the motel using a stolen driver's license. In a twist of fate, only possible in a state like Montana, the desk clerk was a friend of the woman whose identification was stolen earlier on the same day and recognized the license immediately when it was presented by the female upon check in.
Deputies were sent to the motel and spoke with the desk clerk. The desk clerk provided law enforcement with a copy of the Wyoming ID card used for check-in. The desk clerk also provided law enforcement with a copy of the room registration receipt that showed the vehicle listed as belonging to the male and female that rented the room. The vehicle was listed as having a Florida license plate.
A deputy went to the parking lot and drove through it looking for a Florida license plate. As he approached the rear of the motel the deputy saw a vehicle with a Florida license plate beginning to leave the motel parking lot. There were no other vehicles in the motel parking lot with a Florida license plate. The vehicle was pulled over.
The driver of the car was identified as NOEL-RODRIGUEZ. The passenger was identified as Michelle Steinfeldt. NOEL-RODRIGUEZ was arrested for driving without a driver's license. The car was secured and later a drug sniffing K9 was run around the car. The dog alerted for the odor of narcotics. A search warrant was obtained for the vehicle. Law enforcement found four cellular telephones, two packages containing 266.4 grams of pure methamphetamine, $3,909 in cash, a digital scale with methamphetamine residue, ziploc bags, and a lap top. The cash, the drugs and the digital scale were found in a hidden, false compartment in the vehicle.
Steinfeldt pled guilty to federal charges and has been sentenced.
Because there is no parole in the federal system, the "truth in sentencing" guidelines mandate that NOEL-RODRIGUEZ will likely serve all of the time imposed by the court. In the federal system, NOEL-RODRIGUEZ does have the opportunity to earn a sentence reduction for "good behavior." However, this reduction will not exceed 15% of the overall sentence.
The investigation was conducted by the Billings Big Sky Safe Streets Task Force.
Employee Pleads Guilty to Theft of Government PropertyRead the Press Release
Misused Her Government Credit Card to Purchase Personal Items
Greenbelt, Maryland – Mary Michelle Thompson, age 42, of Glen Burnie, Maryland, pleaded guilty today to theft of government property in connection with her misuse of her government credit card.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Elton Malone, Special Agent in Charge of the Department of Health and Human Services, Office of the Inspector General (HHS-OIG), Office of Investigations, Special Investigations Branch.
According to her plea agreement, between January 2010 and February 2012, Thompson was an employee of the Department of Health and Human Services (HHS) and was authorized to use a government credit card to purchase items for official use in her office or by HHS employees in their work.
Thompson admitted that beginning no later than January 2010, she began to buy personal items that were not needed or used for the operations of her office at HHS and were not delivered to or used by HHS personnel. These items included electronics, sporting goods and gift cards to retailers. The total value of the purchases was over $16,000.
In June 2012, an HHS auditor asked Thompson to provide copies of documents supporting some of the purchases made with her government credit card. Thompson submitted forged vendor invoices altered to reflect fictitious legitimate purchases in the amounts of her unauthorized expenditures. When confronted with the discrepancies between her documentation and the documentation obtained directly from the vendors, Thompson claimed that she did not recall receiving or ordering the items. Thompson resigned from HHS shortly thereafter.
A search of her residence on December 18, 2012, recovered many of the person items purchased with her government credit card including a 32GB iPod Touch and iPod accessories, a Blackberry Playbook, a Bose headset, roller skates, pool cues and shoes. The serial number on the iPod Touch recovered from Thompson’s residence matched the serial number on the invoice obtained directly from Apple which showed that it was purchased with Thompson’s government credit card.
Thompson faces a maximum sentence of 10 years in prison and a fine of $250,000. U.S. District Judge Alexander Williams, Jr. has scheduled sentencing for October 2, 2013.
United States Attorney Rod J. Rosenstein praised the HHS-OIG Special Investigations Branch for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Hollis R. Weisman, who is prosecuting the case.
According to the indictment, the Smiths also caused more than $1 million, which had been transferred from Platinum One to their bank accounts and to casinos on their behalf, to be falsely recorded in Capitol Contractors’ books and records as corporate expenses paid for subcontractors, and concealed this fact from their tax preparer. As a result, the indictment alleges that their tax preparer prepared corporate tax returns for Capitol Contractors which falsely overstated the company’s expenses, and prepared personal income taxes for the Smiths which falsely understated their taxable income, thereby falsely understating the amount of taxes owed to the IRS.
The defendants face a maximum sentence of five years in prison for the conspiracy; and three years in prison for making and subscribing a false tax return and for aiding and assisting in the preparation of false tax returns. Vernon J. Smith III also faces a maximum of 20 years in prison for each count of wire fraud. No court appearance has been scheduled.
An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
Anthony Wright, age 42, of Bowie, Maryland, pleaded guilty on June 18, 2013, to his role in the scheme and is scheduled to be sentenced on September 30, 2013.
United States Attorney Rod J. Rosenstein praised the SBA Office of Inspector General; Defense Criminal Investigative Service; IRS Criminal Investigation; and the GSA Office of Inspector General for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney Gregory R. Bockin and Trial Attorney Kenneth C. Vert of the U.S. Department of Justice Tax Division, who are prosecuting the case.
Eleven Face Federal Charges in Metroplex Prostitution RingRead the Press Release
Department of Justice
Office of Public AffairsPLANO, Texas – Eleven individuals have been indicted in connection with a prostitution ring operating in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
A seven-count indictment was returned by a federal grand jury on June 12, 2013, charging eleven individuals in the illegal enterprise. The indictment specifically charges one count of conspiracy to use interstate facility to promote, manage, establish, carry on and facilitate unlawful activity; four counts of use of interstate facility to promote, manage, establish, carry on, and facilitate unlawful activity; and two counts of bribery concerning programs receiving federal funds. Those named in the indictment include:
*Quyen Thuc Ha, aka Tony Ha, 53, of Richardson, Texas; *Yu Lin Chang, aka Rica, aka Jennifer, 37, of Plano, Texas; *Kim Sey Lau, aka John Wang, aka Tony, 56, of Dallas; Lai Iong Chiu, aka Mindy, aka Winnie, aka Wendy, aka Li Yan Zhou, 46, of Plano, Texas; Xia Xu, aka Coco, 46, of Dallas; *Yu Qian, aka Maggie, 45, of Flower Mound, Texas; *Li Meng Shank, 42, of Plano; Prapatson Verhotz, 46, of Garland, Texas; *Tin Min Lo, aka Gordon, 51, of Coppell, Texas; *Michael Gene Jones, 64, of Georgetown, Texas; and
*Jia-Her Hwang, aka Jack, 65, of Richardson.According to court documents, Ha is the owner of nine businesses located in Plano, Dallas, and Hurst, Texas, which are identified as massage parlors. The indictment alleges that the massage parlors actually operate as places of prostitution, or brothels. Ha is accused of conspiring with the other defendants to use the massage parlors to facilitate prostitution. As part of the conspiracy, apartments and homes were rented in Missouri, Oklahoma and Texas; brothel locations were advertised on internet sites and in a local newspaper; and prostitutes were transported from locations including California, Nevada, and Georgia to engage in sexual activity for a fee. Ha is also alleged to have paid bribes to two local police detectives working in an undercover capacity in exchange for their assistance in keeping the brothels open and operating free from law enforcement detection.
Arrest warrants were executed on June 17, 2013, and those defendants arrested made initial appearances on June 18, 2013, before U.S. Magistrate Judge Amos Mazzant in Sherman.
If convicted of the conspiracy charge, the defendants each face up to five years in federal prison. The use of interstate facility charges also carry a maximum penalty of five years in federal prison and the bribery charges carry a maximum penalty of 10 years in federal prison.
This case is being investigated by the Federal Bureau of Investigation, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigation (HSI) and ICE’s Enforcement and Removal Operations (ERO), U.S. Department of State’s Diplomatic Security Service, the Plano Police Department, the Dallas Police Department, the Collin County District Attorney’s Office and the Texas Attorney General’s Office. This case is being prosecuted by Assistant U.S. Attorney Mandy Griffith.
A grand jury indictment is not evidence of guilt and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
District Man Found Guilty of 2010 Murder of His Mother and Assault on His Younger Brother-Jury Rejects Defendant’s Insanity Defense-Read the Press Release
WASHINGTON - Christopher Martin, 28, of Washington, D.C., was found guilty by a jury today of charges stemming from the May 2010 murder of his mother and a subsequent attack on his brother, U.S. Attorney Ronald C. Machen Jr. announced.
Martin was found guilty, following a trial in the Superior Court of the District of Columbia, of charges of second-degree murder while armed, assault with a deadly weapon, and simple assault. The Honorable Ronna L. Beck scheduled sentencing for Aug. 30, 2013.
According to the government’s evidence, on May 20, 2010, Martin’s younger brother, Demetrius Martin, escaped from a second-floor window of a home in the 4200 block of Fourth Street SE. He alerted a neighbor that he had been beaten by his brother, Christopher, who had also stabbed their mother. When police finally gained entry to the locked apartment, they found the body of Patricia Ann Martin, 58, in an advanced stage of decomposition spurred on by the heat in the apartment and the fact that the defendant had covered her with multiple blankets.
Upon entering the apartment, it became apparent that Martin had attempted to conceal his crime from discovery by covering his mother’s body with cleanser and dryer sheets and using odor-eating gels, and various perfumes, room deodorizers and bleach to cover her scent. Later that day, when Martin was arrested, police discovered that he had a long, deep gash to the palm of his hand, consistent with his hand having slid down the blade of a knife.
At trial, the defendant proceeded on an insanity defense, calling experts to establish that because of mental illness, he lacked the substantial capacity to conform his conduct to the requirements of the law or lacked a substantial capacity to recognize the wrongfulness of his conduct. The government countered with experts to establish that, although the defendant does have a diagnosed mental illness (schizo-affective disorder), there was no evidence that his criminal conduct resulted from his mental illness. The jury found Martin guilty of all charges and rejected the defense of insanity.
In announcing the verdict, U.S. Attorney Machen commended the efforts of those who investigated the case for the Metropolitan Police Department (MPD). He also extended his appreciation to Victim/Witness Advocate Marcia Rinker; Paralegal Specialists Alesha Matthews Yette, Sandra Lane, Fern Rhedrick and Benjamin Kagan-Guthrie, and Litigation Technology Specialists Jeanie Latimore-Brown, Kimberly Smith, and Paul Howell. He also expressed thanks for the assistance provided by Patricia A. Riley, Special Counsel to the U.S. Attorney, Michael Ambrosino, Special Counsel for DNA and Forensic Evidence Litigation, and Assistant U.S. Attorney Colleen Kennedy. Finally, he praised the work of Assistant U.S. Attorney Vinet Bryant, who indicted the case and prosecuted the case at trial.
13-218Denver Man Indicted on Charges of Distribution of Child PornographyRead the Press Release
DENVER – Michael Keith Forrester, age 40, of Denver, Colorado, was indicted by a federal grand jury in Denver this week on five counts of distribution of child pornography, United States Attorney John Walsh and FBI Denver Special Agent in Charge Thomas Ravenelle announced. Forrester made his initial appearance in U.S. District Court in Denver this afternoon before a U.S. Magistrate Judge where he was advised of his rights and the charges pending against. He is next due in court on Tuesday, June 25, 2013 at 10:00 a.m. for arraignment and a detention hearing.
According to the indictment, on five separate dates between October 19, 2009 and October 29, 2010, Forrester knowingly distributed and attempted to distribute child pornography that has been shipped and transported in and affecting interstate and foreign commerce by any means, including by computer.
If convicted, Forrester faces not less than 5 years and not more than 20 years imprisonment and up to a $250,000 fine per count for each of the five counts. He also faces not less than 5 years and not more than life on supervised release. The indictment also contains an asset forfeiture allegation where if convicted of any of the violations alleged in the indictment, Forrester shall forfeit to the United States any and all of the defendant’s right, title and interest in any property, real or personal, used or intended to be used to commit or to promote the commission of such offense or any property traceable to the crime.
This case is being investigated by the Federal Bureau of Investigation.
Forrester is being prosecuted by Assistant U.S. Attorney Valeria Spencer.
The charges contained in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty.
This case was brought as part of Project Safe Childhood (PSC), a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, PSC marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about PSC, please visit http://www.justice.gov/psc/ For more information about Internet safety education, please visit http://www.justice.gov/psc/resources.html and click on the tab "resources."
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Daytona Beach Man Sentenced to over 19 Years in Prison for Being A Felon in Possession of A FirearmRead the Press Release
Orlando, Florida - U.S. District Judge Charlene E. Honeywell today sentenced Antwan Derell Jackson (26, Daytona Beach) to 19 years and seven months in federal prison for being a felon in possession of a firearm. Jackson was found guilty following a bench trial on March 28, 2013.
According to court documents and testimony presented at trial, Jackson was arrested after Volusia County Sheriff's Office (VCSO) deputies conducted a traffic stop on a vehicle in which he was riding. The occupants of the vehicle, including Jackson, attempted to flee, but Jackson was apprehended. During a subsequent search of the vehicle, the deputies found a loaded .380 caliber handgun. Based upon Jackson's extensive criminal history, he qualified as an Armed Career Criminal and was subject to enhanced penalties.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms & Explosives and the Volusia County Sheriff's Office. It was prosecuted by Assistant United States Attorneys Vincent S. Chiu and James D. Mandolfo.
This is another case prosecuted as a part of the Department of Justice’s “Project Safe Neighborhoods” program - a nationwide, gun-violence reduction strategy. United States Attorney Robert E. O’Neill, along with Julie Torres, Special Agent in Charge, ATF, is coordinating the Project Safe Neighborhoods effort here in the Middle District of Florida in cooperation with federal, state, and local law enforcement officials.
Coweta County Man Sentenced for Illegally Obtaining Federal Contracts Reserved for Military VeteransRead the Press Release
NEWNAN, Ga. – Arthur W. Singleton has been sentenced to two years in prison for fraudulently obtaining several government construction contracts reserved for veterans with service-related disabilities.
“Driven by greed, Mr. Singleton took advantage of a service-disabled veteran of the Vietnam War to gain over a million of dollars in federal contracts,” said United States Attorney Sally Quillian Yates. “The defendant’s fraud deprived genuine disabled veteran-owned businesses of the chance to obtain these federal contracts.”
“The United States Department of Agriculture (USDA), Office of Inspector General (OIG), remains diligent in investigating matters such as these that defraud both the department and the taxpayer,” said Karen Citizen-Wilcox, Special Agent-in-Charge, USDA-OIG.
“Aggressive investigative efforts through effective partnerships among several law enforcement agencies were key in bringing this defendant to justice,” said Special Agent in Charge John F. Khin, Southeast Field Office, Defense Criminal Investigative Service. “This sentencing should serve as a deterrent to others who intend to take advantage of disabled military veterans and defraud the Federal Government.”
“These contracts are supposed to go to genuine service-disabled veteran-owned small businesses,” said Inspector General Peggy E. Gustafson of the Small Business Administration. “Federal contracts should never be awarded to persons who commit fraud to claim eligibility for contracts set-aside for our nation’s heroes. I want to thank the U.S. Attorney’s Office and our law enforcement partners for their commitment to seek justice on behalf of the American taxpayer.”
“The Department of Veterans Affairs Office of Inspector General vigorously investigates individuals who fraudulently obtain non-competitive contracts specifically set aside for veterans with service-connected disabilities,” stated Special Agent in Charge Quentin G. Aucoin.
According to United States Attorney Yates, the charges and other information presented in court: Singleton owned a construction firm named “Singleton Enterprises” and had over 30 years of experience in the construction industry. In 2007, Singleton approached a Vietnam veteran (who was bedridden from surgeries related to his combat injuries) and advocated creating a business that would exploit the veteran’s disabled status to obtain federal government contracts that were reserved exclusively for companies owned and run by service-disabled veterans. When the veteran agreed to the scheme, Singleton formed two companies using the veteran’s name.
From September 2007 to September 2008, Singleton entered into contracts with the Department of Veterans Affairs, the Department of Agriculture, the United States Coast Guard, and the United States Army Corps of Engineers to perform construction work around the country. Singleton used the veteran’s status to bid on these contracts, knowing that he was ineligible for the contracts – given that the veteran performed no work for either company, did not have an ownership stake, and did not control the management or daily operations of either business. In total, Singleton received over $1.5 million dollars from the fraudulently-obtained contracts.
Singleton, 63, of Coweta County, Ga., was sentenced to two years in prison to be followed by two years of supervised release, and ordered to pay restitution in the amount of $181,000. On April 15, 2013, Singleton pleaded guilty to one count of making false documents.
This case was investigated by Special Agents of the Small Business Administration, Office of Inspector General - Investigations; the United States Department of Defense, Defense Criminal Investigative Service; the United States Department of Agriculture, Office of Inspector General; the United States Department of Veterans Affairs, Office of Inspector General; and the United States Department of Homeland Security, Office of the Inspector General.
Assistant United States Attorneys Jeffrey W. Davis, Glenn Baker, and Shanya Dingle prosecuted the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the HomePage for the U.S. Attorney’s Office for the Northern District of Georgia is www.justice.gov/usao/gan.
Coweta County Man Pleads Guilty to Defrauding Local and International Victims in Internet SchemeRead the Press Release
NEWNAN, Ga. – Randolph Wayne Hill has pleaded guilty to charges of wire fraud and money laundering arising out of various fraud schemes he operated over the Internet involving the supply of chemicals used in farming and other industries.
“This defendant used the Internet to steal hundreds of thousands of dollars from small businesses both here in Georgia and abroad,” said United States Attorney Sally Quillian Yates. “As today’s conviction demonstrates, it is a priority of this office to detect and aggressively prosecute fraudsters who use the Internet to target victims in our district and elsewhere.”
According to United States Attorney Yates, the charges and other information presented in court: In March and April 2008, Hill falsely advertised on the Internet through his company, Hill Resources, LLC, that he was able to deliver multiple tons of various chemicals to customers throughout the world. On or about March 15, 2008, Hill misrepresented that he was ready to ship over 120 tons of a fertilizer chemical from the United States to a collective of farmers in Suriname, even though he had no such supplier of the chemical in the United States. In reliance on Hill’s promise, the individual acting on behalf of the farmers paid Hill over $60,000.
On or about April 15, 2008, Hill misrepresented that he would supply a company operating in Cartersville, Ga., with over 160 tons of a chemical used in fireproofing fabrics, even though he had no such supplier of the chemical. In reliance on Hill’s promise, the company in Cartersville paid Hill almost $200,000.
Hill never delivered any product to either business, nor returned the money. Hill repaid another customer with $25,000 of the money from the company in Cartersville. Hill kept the rest of the money for his personal use.
Hill, 71, of Newnan, Ga., could receive a maximum sentence of 20 years in prison and a fine of up to $250,000 on each count. However, in determining the actual sentence, the Court will consider the United States Sentencing Guidelines, which are not binding but provide appropriate sentencing ranges for most offenders.
Sentencing is scheduled for September 4, 2013, at 10:00 a.m. before United States District Judge Timothy C. Batten.
This case was investigated by Special Agents of the Federal Bureau of Investigation and the Coweta County Sheriff’s Department.Assistant United States Attorney Laurel Boatright is prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the HomePage for the U.S. Attorney’s Office for the Northern District of Georgia is www.justice.gov/usao/gan.
Coon Rapids Man Sentenced for Shipping Firearms to LiberiaRead the Press Release
MINNEAPOLIS—Earlier today in federal court, a 38-year-old Coon Rapids man was sentenced for transporting firearms to his home country of Liberia. United States District Court Judge Ann D. Montgomery sentenced McHarding Degan Galimah to 30 months in prison on one count of smuggling firearms from the United States to Liberia. Galimah was indicted on August 22, 2012, and convicted on February 14, 2013.
The evidence presented at trial proved that Galimah purchased 12 firearms from a federally licensed firearms dealer, including seven Hi-Point, nine-millimeter handguns. In November 2010 and July 2011, he exported those weapons to Liberia and then made several trips to that country to take possession of the firearms for resale at a profit. At no time did he possess a license to transport the firearms, as required by federal law. Moreover, federal regulations prohibit the export of firearms to Liberia.
This case was the result of an investigation by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives. It was prosecuted by Assistant U.S. Attorney Andrew Dunne.Convicted Felon Sentenced to over 18 Years in Prison for Possessing A FirearmRead the Press Release
AUGUSTA, Ga. – Demetrius L. McKinney, 33, of Augusta, Georgia, was sentenced today by United States District Judge J. Randal Hall, to 18 years 9 months in prison for possessing a handgun as a convicted felon. He was also sentenced to serve 5 years of supervised release upon his release from prison.
Evidence presented during the guilty plea and sentencing hearings revealed that in May 2012, McKinney possessed a loaded firearm in the glove-compartment of a car. McKinney said he had the gun “for protection.” Prior to possessing the gun McKinney had been convicted of Burglary, two serious drug offenses, and an Aggravated Assault, making him an “armed career criminal” under federal law and subjecting him to a minimum mandatory sentence of 15 years.
During the sentencing hearing the evidence revealed that McKinney committed a number of his prior felonies while on bond, parole, or probation in the state judicial system. The Court cited McKinney’s complete lack of respect for the law, high likelihood of recidivism, and clear record of an inability to abide by release conditions, as factors contributing to the lengthy prison term.
The case was investigated by Georgia State Patrol, and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). The case was prosecuted under Project Ceasefire, a joint federal, state and local firearms initiative involving the U.S. Attorney’s Office, ATF and various local police departments.
United States Attorney Edward Tarver said: “Through Project Ceasefire, the United States Attorney’s Office will continue to vigorously enforce federal firearms laws. Project Ceasefire has proven to be an effective tool in the Department of Justice’s efforts to rid the streets of dangerous felons who carry guns. Felons who possess firearms can expect to be returned to prison, and serve federal time without the possibility of parole. ”
Assistant U.S. Attorney Lamont A. Belk prosecuted the case on behalf of the United States. For additional information, please contact First Assistant United States Attorney James D. Durham at (912) 201-2547.
Clayton, New York - Man indicted for making false statements, possession and use of an altered Merchant Marine License, fraud in connection with identification documents, and aggravated Identity theft.Read the Press Release
Richard S. Hartunian, United States Attorney for the Northern District of New York, announced today that Mark Anselm, 37, of Clayton, N.Y., was indicted by a federal grand jury on twelve counts for making false statements to Coast Guard and Department of Homeland Security officials (counts 1-3), possession and use of an altered Merchant Marine License (counts 4-7), fraud in connection with identification documents (count 8), and aggravated Identity theft (counts 9-12), in violation of 18 U.S.C. §§ 1001, 2197, 1028(a)(6) and 1028A. If convicted, Anselm faces a maximum possible penalty of fifty-three years in prison and a three million dollar fine.
Anselm is charged with having held himself out to federal officials, to various marina owners, and to other potential employers as a licensed commercial ship pilot when in fact he possesses no such license. He is charged with having repeatedly presented a falsified merchant marine license that Anselm altered to substitute his name. On June 19, 2012 Anselm piloted a commercial tug boat on Lake Ontario which he grounded. A follow-up investigation revealed numerous instances of Anselm holding himself out as a licensed commercial merchant marine captain.
An Indictment is a mere allegation of wrongdoing. All individuals are presumed innocent until and unless convicted beyond a reasonable doubt in a court of law.
This case was investigated by Special Agents of the Coast Guard and Department of Homeland Security. Prosecution is being handled by Assistant United States Attorney Craig A. Benedict. Mr. Benedict may be contacted for questions regarding this case at 315-448-0726.
Canton Businessman Sentenced to Prison for Violating the Clean Air ActRead the Press Release
GRAND RAPIDS, MICHIGAN – Anthony Michael Davis, 34, of Canton, Michigan, was sentenced to 12 months in prison for violating the federal Clean Air Act, U.S. Attorney Patrick Miles announced today. U.S. District Judge Robert Holmes Bell also ordered Davis to pay $168,029.59 in restitution to the U.S. Environmental Protection Agency (“EPA”) and serve two years of supervised release following his release from prison.
Davis purchased a former paper mill in Otsego, Michigan to salvage valuable scrap material from a powerhouse building containing large boilers and turbines. Davis knew that asbestos-containing insulation was present in the powerhouse because certain insulation carried warning labels stating: “Hazardous Substance Asbestos.” A representative of the former owner of the Otsego paper mill also warned Davis of the asbestos in the powerhouse and recommended an asbestos inspection before removing anything from the structure. Despite those warnings, and in an effort to cut costs, Davis failed to conduct a thorough asbestos inspection. Additionally, he paid laborers to scrap materials from the powerhouse without following basic rules of asbestos removal, such as wetting the asbestos with water prior to its removal until it is collected and contained for proper disposal. The salvage operation resulted in the release of a significant quantity of asbestos-containing insulation onto multiple floors of the building, which was open to the outside environment.
At sentencing, the court stated that the defendant’s offense was “serious” and that his actions endangered the health of those who live and work near the paper mill in Otsego. The court also found troubling the defendant’s misrepresentations to state investigators when he initially claimed that he did not know he was dealing with asbestos in the powerhouse.
U.S. Attorney Miles said, “Davis exposed his workers and the public to dangerous asbestos fibers that have been shown to cause serious illnesses like lung cancer and other serious respiratory diseases. Some of his workers wore their dirty clothes and shoes into their homes, potentially exposing their family to the dangers presented by the inhalation of asbestos fibers. The court’s sentence should send a clear message to those who seek increased profits at the expense of the environment and the health and safety of others.”
“Exposure to asbestos can be fatal. Its unsafe and illegal disposal endangers human health and can seriously harm the environment,” said Randall Ashe, Special Agent in Charge of EPA’s criminal enforcement program in Michigan. “The defendant failed to comply with regulations that would have shown the extent to which the building contained asbestos-contaminated material. This case should serve notice that EPA and its partner agencies will prosecute those who ‘cut corners’ by avoiding the costs of handling or disposing of asbestos properly.”
The case was investigated by the EPA Criminal Investigation Division and the Michigan Department of Natural Resources Environmental Investigation Section. Assistant U.S. Attorney Christopher O’Connor prosecuted the case on behalf of the United States.The investigation of this case was the result of a confidential tip. If Michigan residents suspect a possible violation of environmental laws or regulations, they are encouraged to call the U.S. EPA hotline at 1-800-621-8431, or submit a tip on the Internet at www.epa.gov/tips.
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Businessman Pleads Guilty to Violating Campaign Finance Law, Admits Disguising Source of More Than $150,000 in ContributionsActivities Took Place over Nine-Year Period, Involved Federal and Local CampaignsRead the Press Release
WASHINGTON – Lee A. Calhoun, an executive for a Washington, D.C.-based company, pled guilty today to a federal charge stemming from a scheme in which he and others helped disguise the actual source of more than $150,000 in campaign contributions.
The guilty plea was announced by U.S. Attorney Ronald C. Machen Jr., Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office, and Thomas J. Kelly, Special Agent in Charge of the Washington Field Office of the Internal Revenue Service-Criminal Investigation (IRS-CI).
Calhoun, 65, of Silver Spring, Md., pled guilty in the U.S. District Court for the District of Columbia to one count of knowingly and willfully permitting the name of one or more persons to be used to make campaign contributions in the name of another person and aiding and abetting campaign contributions to be made in the name of another. The Honorable Colleen Kollar-Kotelly scheduled a status hearing for Sept. 26, 2013. The misdemeanor charge carries a statutory maximum of one year of imprisonment and financial penalties. As part of the plea agreement, Calhoun agreed to cooperate in the continuing investigation.
According to a statement of offense, signed by the defendant as well as the government, during the relevant time period of the offense, Calhoun worked for a company in the District of Columbia that provided accounting, management consulting, and tax services. He served as a principal in the management and consulting division since 2000.
The statement of offense refers to the company as “Company A.” It also refers to “Executive A” as the company’s Chairman, Chief Executive Officer and majority owner.
Beginning as early as June 2002 and continuing until in or about June 2011, according to the statement of offense, Calhoun used his name and the names of his relatives to disguise campaign contributions made by “Executive A” and “Company A” to federal, District of Columbia, and other political campaign committees and political action committees.
Calhoun admitted that he knowingly and willfully permitted both his and others’ names to be used to conceal the true source of these contributions at the direction of “Executive A” and others acting at the behest of “Executive A.” Calhoun knew that he would be reimbursed for the contributions, directly and indirectly by “Executive A” and “Company A.”
“Today’s guilty plea reveals how a D.C. accounting firm was converted into an assembly line for illegal campaign contributions,” said U.S. Attorney Machen. “For a decade, the firm and its CEO made illegal campaign contributions through straw donors to an array of federal and D.C. politicians. The firm used a special accounting system to keep track of the thousands and thousands of dollars it was plowing into political campaigns. This prosecution demonstrates the depth of our commitment to investigate and uproot criminal schemes intended to hide illegal campaign contributions – schemes that if left unchecked can threaten the very integrity of our democratic process.”
“Today, Mr. Calhoun admitted his role in evading campaign finance laws by purposefully hiding the true source of more than $150,000 provided to political campaigns,” said Assistant Director in Charge Parlave. “Together with our law enforcement partners, the FBI will continue to work to ensure that all those who participate in corrupt election schemes that elude fair electoral processes are held accountable for their actions.”
During the calendar years 2002 through 2011, according to the statement of offense, Calhoun caused at least $79,400 in federal political contributions from “Executive A” and “Company A” to be made in his name and the names of his relatives, including contributions to political action committees and the campaign committees of candidates who were running for President of the United States, the U.S. Senate, and the U.S. House of Representatives.
Through this scheme, “Executive A,” “Company A,” Calhoun, and others caused various campaigns and political action committees to file reports with the Federal Election Commission that did not reveal the true source of the unlawful campaign contributions.
Additionally, according to the statement of offense, during calendar years 2002 through 2011, Calhoun caused at least $76,600 in District of Columbia political contributions from “Executive A” and “Company A” to be made in his name and the names of his relatives. These included contributions to the campaign committees of candidates running for Mayor and the Council of the District of Columbia, among other elected offices.
According to the statement of offense, Calhoun also made political contributions in his name and the names of family members for local and state political candidates and campaigns in other states, localities, and U.S. territories for which “Executive A” caused “Company A” to reimburse him.
Also according to the statement of offense, Calhoun’s illegal campaign contribution reimbursements were inaccurately referred to in Company A’s financial records as “advances” or “advances on bonus.”
In announcing the plea, U.S. Attorney Machen, Assistant Director in Charge Parlave, and Special Agent in Charge Kelly commended those who investigated the case from the FBI’s Washington Field Office and IRS-CI.
They also expressed appreciation to those who worked on the case from the U.S. Attorney’s Office, including Assistant U.S. Attorneys Jonathan W. Haray, Ellen Chubin Epstein, Lionel André, Jonathan Hooks and Ted L. Radway; former Assistant U.S. Attorney Mary Chris Dobbie; Criminal Investigator Matthew Kutz, and Paralegal Specialists Anne Riopelle, Shanna Hays, Krishawn Graham, Lenisse Edloe, Nicole Wattelet, Corinne Laxman, and Angela Lawrence. Finally, they thanked Assistant U.S. Attorneys Loyaan A. Egal and Ephraim (Fry) Wernick, who are prosecuting the case.
13-216Brimley Felon Sentenced for Possession of Firearms on Bay Mills ReservationRead the Press Release
MARQUETTE, MICHIGAN – Patricia Marie Sawasky, 46, of Brimley, Michigan, was sentenced to 24 months in federal prison for being a felon in possession of firearms, U.S. Attorney Patrick A. Miles, Jr. announced today. In addition to the prison term, U.S. District Judge R. Allan Edgar ordered Sawasky to serve two years of supervised release following her release from prison, and to pay a $100 special assessment. Sawasky had pled guilty in February.
The investigation into Sawasky’s activities stemmed from the execution of a search warrant at a residence Sawasky occasionally occupied with her boyfriend. In the process of being taken into custody on an outstanding state arrest warrant, Sawasky assaulted a tribal officer. During the execution of the search, eleven firearms were located in the residence, some in a gun cabinet and others in the master bedroom. The firearms included a .50 caliber revolver. Sawasky, who had been previously convicted of a felony drug offense in Michigan, admitted that she had handled the .50 caliber revolver and had ready access to the other firearms in the residence.
The Bay Mills Indian Community Tribal Police, the Chippewa County Sheriff Department, and the Federal Bureau of Investigation investigated the case. Assistant U.S. Attorney Paul D. Lochner prosecuted the case.
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Birmingham Man Sentenced to One Year in Prison for Tweeting Threat Against PresidentRead the Press Release
HUNTSVILLE – U.S. District Judge C. Lynwood Smith Jr. today sentenced a Birmingham man to one year in prison for threatening the life of President Barack Obama on the social network Twitter, announced U.S. Attorney Joyce White Vance and U.S. Secret Service Acting Special Agent in Charge Jeffrey Anderson.
JARVIS BRITTON, 26, pleaded guilty in March to tweeting threats against the president in September. Judge Smith had ruled in February that Britton was competent to stand trial. After Britton completes his prison term, he must serve three years of supervised release.
A federal grand jury indicted Britton in September for knowingly threatening to kill, kidnap or inflict bodily harm on the president by tweeting the message, "Let's kill the president. F.E.A.R.," on Sept. 14.
The Secret Service investigated the case. Assistant U.S. Attorneys Joseph P. Montminy and Daniel J. Fortune prosecuted the case.
Ball Man Sentenced for Growing/Selling MarijuanaRead the Press Release
ALEXANDRIA, La. – United States Attorney Stephanie A. Finley announced today that Sidney Earl Wheeler III, 33, of Ball, La., was sentenced by U.S. District Judge Dee D. Drell to 24 months in prison and four years supervised release for manufacture and possession with intent to distribute marijuana.
According to evidence presented at the guilty plea, authorities received an anonymous tip that someone in a Ball, La., residence might be growing marijuana plants in a building behind a home. After conducting surveillance of the residence and obtaining a search warrant, authorities discovered two hidden rooms in the building behind the house on June 7, 2012. The rooms contained marijuana plants in various growth stages as well as equipment and materials used to cultivate marijuana. Inside the house, hydrocodone, an AK-47 and ammunition were found. Authorities found more than 100 marijuana plants on the property. At the time of the search, Wheeler was found in the building and was arrested. Wheeler pleaded guilty March 4, 2013."This defendant’s drug production and distribution operation was a violation of the law,” Finley stated. “This illegal activity was uncovered thanks to the help of a concerned citizen and investigators who cared about this community. We hope this serves as a deterrent to those who try to profit from illegal drug production.”
The Louisiana State Police and the FBI-Central Louisiana Gang Safe Streets Task Force conducted the investigation. Assistant U.S. Attorney Allison D. Bushnell prosecuted the case.
Austell Man Sentenced to over 17 Years for Receiving Child PornographyRead the Press Release
AUGUSTA, GA – Starke Allen Hawkins, 60, of Austell, Georgia was sentenced on June 19, 2013 by United States District Court J. Randal Hall to 17½ years in prison, followed by 20 years of supervised release, for receiving child pornography. Hawkins will be required to register as a sex offender. At the conclusion of the sentencing, Hawkins was returned to the custody of the United States Marshal Service to serve his sentence.
According to the evidence presented at Hawkins’ plea and sentencing hearings, in April 2012, a computer storage device, later determined to be that of Hawkins, contained approximately 100 images of child pornography depicting prepubescent children engaged in sexual acts. The device also reflected online chats of a highly sexual nature between Hawkins and at least one minor. When interviewed by an Federal Bureau of Investigation agent, Hawkins admitted that he had downloaded and viewed child pornography images, and had shared images with a minor female. Hawkins’ computer and storage media were found to contain over 530 still images and at least 3 video images of child pornography. At the sentencing hearing, Hawkins admitted to having a serious problem and hoped to get treatment while in prison.
United States Attorney Edward J. Tarver stated, “The exchange of images depicting the sexual exploitation of innocent children is a serious and heinous crime. The abuse to these young victims continued every time the Defendant viewed these images and shared them with others. There is no higher priority within the Department of Justice than the protection of our Nation’s children. There should be no doubt that the United States Attorney’s Office will prosecute those who facilitate and create a market for the violent sexual assault of children.”
This case was brought as part of Project Safe Childhood, a U.S. Department of Justice initiative designed to protect children from online exploitation and abuse. 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 identify and rescue victims.
The case was the result of an investigation conducted by the Federal Bureau of Investigation. Assistant U.S. Attorney Nancy Greenwood prosecuted the case. For additional information, please contact First Assistant United States Attorney James D. Durham at (912) 201-2547.Armed Bank Robber Pleads Guilty to Robbing Mechanics Bank in Pinole, CaliforniaRead the Press Release
OAKLAND – Gary Casdell Fite, II, pleaded guilty in federal court yesterday to armed bank robbery and brandishing a firearm in furtherance of that crime, announced United States Attorney Melinda Haag.
In pleading guilty, Fite admitted to robbing the Mechanics Bank on Pinole Valley Boulevard in Pinole, Calif., on March 1, 2013. According to the plea agreement, Fite jumped over the teller counter and demanded money from two victim tellers. While demanding money, Fite pointed his loaded gun at the head of one of the tellers. Fite stole $3,292 from the bank.
Fite, 23, of Oakland, was indicted by a federal Grand Jury on March 28, 2013. He was charged with armed bank robbery, in violation of 18 U.S.C. § 2113(a) and (d), and brandishing a firearm during and in relation to a crime of violence, in violation of 18 U.S.C. § 924(c)(1)(A)(ii). Under the plea agreement, Fite pleaded guilty to both counts. Co-defendant and getaway driver Regina Dean, 37, of Antioch, pleaded guilty on May 15, 2013, to aiding and abetting the armed robbery, without a plea agreement.
Fite is currently in federal custody. His sentencing hearing is scheduled for September 4, 2013, before U.S. District Court Judge Phyllis J. Hamilton. Dean’s sentencing hearing is scheduled for August 21, 2013. The maximum sentence for armed bank robbery is 25 years in prison, and the maximum sentence for brandishing a firearm during and in relation to a crime of violence is life in prison, with a minimum sentence of 7 years. However, any sentence will 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.
Brian C. Lewis is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Janice Pagsanjan. The prosecution is the result of an investigation by the FBI.
Anthony O. Calabrese III Sentenced to Nine Years in Prison for BribesRead the Press Release
Anthony O. Calabrese III was sentenced to nine years in prison and ordered to pay more than $200,000 for his role in a series of bribery schemes involving Jimmy Dimora, Frank Russo, J. Kevin Kelley and others uncovered as part of the Cuyahoga County corruption investigation, federal law enforcement officials said.
“Anthony Calabrese misused his status as an attorney to facilitate bribes and foster corruption,” said Stephen D. Anthony, Special Agent in Charge of the Federal Bureau of Investigation’s Cleveland Office. “Today's sentence reflects the fact that Calabrese was deeply involved in a variety of bribery schemes involving a school district, a halfway house and the infamous trip to Las Vegas, just to name a few.”
“His criminal conduct spanned his entire legal career,” Assistant U.S. Attorney Antoinette Bacon said in court.
Calabrese, 40, of Chagrin Falls, Ohio, previously pleaded guilty to 18 counts which detail improper payments of nearly $550,000. The counts include racketeering; conspiracy to commit mail fraud and honest services fraud; Hobbs Act conspiracy; bribery concerning programs receiving federal funds; conspiracy to commit mail fraud and mail fraud.
U.S. District Judge Sara Lioi sentenced Calabrese to 108 months in prison and ordered him to pay $132,041 in restitution -- $120,970 to Cuyahoga County and $11,071 to Parma schools. Calabrese has already forfeited $74,450
The racketeering charge involves conduct that took place between 2001 and 2009 in which Calabrese gave things of value to public officials and their designees in return for public officials taking and promising to take official action that benefitted Calabrese, Law Firm 1 (where Calabrese was an associate and partner), their clients and designees, according court documents.
Specifically, Calabrese participated in a scheme in which he and Cuyahoga County employee J. Kevin Kelley helped obtain tax exempt status for the property leased by Alternatives Agency around January 2004, according to court documents.
In September 2004, after a tax refund check was issued to Alternatives Agency for $144,216.26, Calabrese instructed Alternative Agency to issue a check to Business 45 for $72,000 and classify the expense as consulting, despite Calabrese knowing that Business 45 performed no consulting services for Alternatives Agency to justify the expense, according to the indictment.
Business 45, in turn, issued checks payable to Calabrese for $31,500 and J. Kevin Kelley Consulting, LLC, for $35,500. Business 45 kept the remaining $5,000, according to the indictment.
In another scheme, Calabrese lobbied Kelley (a member of the Parma School Board) and other members of the Parma School Board in January 2005 to contract with Business 9 to serve as project manager for a renovation project. Business 9 was a construction company that specialized in stone and brick masonry and was a client of Law Firm 1, according to court documents.
In September 2005, the Parma School Board, with Kelley voting in favor, awarded a contract worth $1.8 million to Business 9, according to court documents.
Calabrese and Kelley arranged for Business 9 to hire The Eagle Group, a consulting company formed by Daniel P. Gallagher. In August 2009, Business 9 sent a check for $15,000 to Eagle. Gallagher then paid a portion of that money to Kelley and Kevin Payne, according to court documents.
Other conduct detailed in court documents includes Calabrese, Kelley, Brian Schuman, former Cuyahoga County Auditor Frank P. Russo and former Cuyahoga County Commissioner James C. Dimora conspiring to increase the funding for Alternatives Agency.
In or around January 2008, Calabrese, who served as legal counsel for Alternatives Agency, instructed Schuman, an employee of Alternatives Agency, to increase Kelley’s monthly consulting fee by $2,000 for four months for the purpose of funding expenses associated with a Las Vegas trip for Dimora, Russo and Public Employee 55, according to court documents.
In or around 2003, Prudoff began receiving payments from Alternatives Agency on a monthly basis, purportedly for consulting work. When BE39 informed Calabrese that Alternatives Agency received no work product from Prudoff, Calabrese told BE39 that Prudoff was consulting on a Lorain expansion project, according to court documents.
BE39 questioned why Alternatives Agency was paying Prudoff, since he was the Community Development Director for Lorain and it would be within his job requirements to assist companies such as Alternatives Agency, who were interested in developing facilities in Lorain. Calabrese insisted that BE39 continue to cause Alternatives to pay Prudoff, according to court documents.
Calabrese did not inform the Alternatives board about the payments for consultants on a Lorain expansion project and the board did not approve payments to any such consultant, according to court documents.
In or around June 2005, Calabrese told BE39 that Prudoff had some issues arise and Prudoff’s monthly payment should be issued to Relative 2, who was related to Prudoff’s girlfriend, according to court documents.
In or around July 2005, Calabrese and Prudoff assisted Relative 2 in forming Business 46. On or about July 25, 2005, Alternatives Agency began issuing checks to Business 46 for approximately $4,000 on a monthly basis, according to court documents.
Prudoff provided favorable consideration to Calabrese and his designees on business matter unrelated to Alternatives Agency, in return and in exchange for the consulting fees that Calabrese caused Prudoff and Business 46 to receive from Alternatives, according to court documents.
In another case, Business 43 was incorporated in the State of Ohio in March 2005 and Calabrese’s relative (Relative 1) was the registered agent for the company. Calabrese caused Alternatives to engage Business 43's services but concealed from Alternatives his relative’s relationship to Business 43 and did not disclose to them that Relative 1 performed little or no work for Alternatives to justify the fees paid, according to court documents.
In or around 2002, Calabrese influence Alternatives to hire A.C. Sinagra and Associates. In January 2006, A.C. Sinagra and Associated entered into a contract setting a monthly consulting fee at approximately $1,500, according to court documents.
In March 2006, Calabrese and Sinagra agreed that Calabrese would cause Alternatives to increase its payments to A.C. Sinagra and Associates, and Sinagra would use the additional funds to pay persons or entities identified by Calabrese in the amounts Calabrese designated, according to court documents.
Calabrese first suggested Sinagra make consulting payments to Relative 1 through Business 43. He later asked Sinagra to pay Calabrese through Burlwood Holdings, an LLC formed in 2004 and controlled by Calabrese, according to court documents.
Calabrese also asked Sinagra to pay Relative 2 and Sinagra agreed to both requests. Sinagra performed no legitimate work for Alternatives to justify the increase in his fee, according to court documents.
In May 2006, Alternatives increased Sinagra’s monthly fee from $1,500 to approximately $6,000. In May 2006, A.C. Sinagra Company issued a check to Relative 2 for $2,000 and Berlwood Holdings (sic) for $2,000. This continued through November 2007, according to court documents.
In sum, from Calabrese caused Alternatives to make payments to Prudoff and Relative 2 between July 2003 and March 2006 totaling approximately $144,000, according to court documents.
Calabrese caused Alternatives to make payments to Business 43 between March 2005 and March 2006 totaling approximately $12,950, according to court documents.
Calabrese caused Alternatives to make payments to A.C. Sinagra and Associates between January 2002 and November 2007 totaling approximately $190,500, according to court documents.
Calabrese caused Alternatives to make payments to J. Kevin Kelley Consulting between October 2004 and August 2008 totaling approximately $201,473, according to court documents.
Regarding Count 9, Relative 1's brother was Attorney 6. Attorney 7 was Calabrese’s relative and formerly related to Relative 1. On or about Feb. 2, 2009, Calabrese told BE39 that Calabrese and Attorney 7 had met with Attorney 6. Calabrese asked BE39 to meet with Attorney 6, according to the indictment.
BE39 met with Attorney 6 on Feb. 2, 2009. Attorney 6 told BE39 that Calabrese and Attorney 7 wanted Attorney 6 to meet with BE39 to go over the script, according to court documents.
Attorney 6 instructed BE39 that if anyone questioned BE39 about Relative 1, BE39 should say that BE40 and BE39 hired Relative 1 to work out of her home to help with the Lorain expansion, which Calabrese and BE39 knew was not true, according to court documents.
This case was prosecuted by Assistant U.S. Attorneys Antoinette T. Bacon and Nancy L. Kelley. The investigation was conducted by the Cleveland office of the Federal Bureau of Investigation and the Internal Revenue Service.24 Laredoans Indicted on Drug and Money Laundering ChargesRead the Press Release
LAREDO, Texas – Two Indictments, alleging conspiracy to possess with intent to distribute heroin, cocaine and methamphetamine as well as money laundering charges, have been partially unsealed following the arrest of 25 individuals, United States Attorney Kenneth Magidson announced today along with Special Agent in Charge Javier Peña of the Drug Enforcement Administration and Special Agent in Charge Armando Fernandez of the FBI’s San Antonio Division.
During law enforcement actions this morning, agents arrested a total of 24 Laredo residents. Those include Juan Pablo Contreras, 37, Carlos Contreras, 33, Modesto Moises Ramirez, 43, Arnulfo Ramos-Valdez Jr., 42, Julio Jesus Rangel, 30, Ana Rosa Contreras, 31, Martin Contreras Jr., 25, Steve Contreras, 35, Victor Contreras, 22, Guadalupe Mario Contreras, 51, Abraham Xavier Becerra, 29, Jorge Alberto Guerra, 40, Eufrosina Lopez, 41,Yvonne Hernandez, 42, Orlando G. Ibarra, 32, Raul Victoriano Rojas, 40, Luis Manuel Salinas, 46, Leopoldo Arviso, 26, Christopher O’Bryant, 25, Eduardo Santa Cruz, 32, and Guadalupe Bedarte, 29.Jaime Tomas Hernandez-Rocha, 45, Pablo Contreras Jr., 41, and Mario Alberto Rodriguez, 26, all of Laredo, are also charged but were already in custody. Also charged and arrested today was Richard Cruz Rodriguez Jr., 46, of San Antonio.
The indictment alleges some of those charged are members and associates of the Texas Mexican Mafia prison gang. The indictments, returned under seal on June 11, 2013 and partially unsealed following the arrests today, remain sealed as to those charged but not in custody.
“Today, DEA and our law enforcement counterparts issued a substantial blow to the Texas Mexican Mafia Laredo Chapter, allegedly one of the strongest Mexican-based cocaine trafficking organizations operating in Texas,” said Peña. “The DEA will continue to assault these types of alleged drug trafficking organizations if they are suspected of brazenly distributing illegal controlled substances throughout our communities.”
“These arrests today should send a clear message to the Texas Mexican Mafia, and other suspected criminal organizations, that law enforcement will not tolerate their alleged violent acts and trafficking of dangerous drugs in our community, added Fernandez.”
The joint investigation began in 2009 and identified some of the defendants as members of the Mexican Mafia distributing cocaine, heroin and methamphetamine, according to the indictment. Additional defendants were also allegedly associated with the Mexican Mafia and participated in the conspiracy, doing so under the group’s protection. The indictment indicates the distribution of heroin and methamphetamine was organized mainly by Juan Pablo Contreras and Carlos Contreras to other alleged members and associates of the Mexican Mafia and included distribution to locations such as San Antonio, Austin and Corpus Christi. The investigation also uncovered evidence of the gang’s money laundering activities, part of which revealed efforts to smuggle drug proceeds back to the sources of the drugs in Mexico, according to the indictment.
The charges are the result of an Organized Crime Drug Enforcement Task Force (OCDETF) investigation named “Operation X3,” which was conducted by agents of the FBI, Drug Enforcement Administration, Homeland Security Investigations and Internal Revenue Service-Criminal Investigation. They were assisted at different times by the United States Marshals Service, police departments in Laredo, Austin and San Marcos, Customs and Border Protection, Texas Department of Public Safety - Criminal Investigations Division and the LaSalle and Karnes County Sheriff’s Offices.
Assistant United States Attorneys James Hepburn and Andy Guardiola are prosecuting the cases.
An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.16 Count Drug Trafficking Indictment ReturnedRead the Press Release
WILMINGTON, Del. – David C. Weiss, Acting United States Attorney for the District of Delaware, announced today that ten men were indicted by a federal grand jury on drug trafficking charges, including conspiracy to distribute heroin, crack cocaine, cocaine, and marijuana, in violation of Title 21, United States Code, Sections 841(a)(1) and 846. The sixteen-count indictment was partially unsealed yesterday.
The charged defendants include Qiydaar Miller, age 33 from Wilmington, Albari Malik Johnson, age 37 from Wilmington, Tamir Collins, age 32 from Wilmington, Keenan Williams, age 55 from Wilmington, Walter Thomas, age 51 from Wilmington, Ibrahim Sesay, age 37 from Wilmington, Andre Cephas, age 42 from Ellendale, Harry Coverdale, age 35 from Wilmington, Corey Pendergrass, age 33 from Wilmington, and Daqwan Riley, age 20 from Wilmington. If convicted of any of the remaining offenses, the defendants charged in those offenses could face either a mandatory minimum sentence of at least five years of imprisonment, and up to forty years in prison, in addition to fines, and supervised release, or up to twenty years in prison, in addition to fines, and supervised release, depending on the amount of drug charged in the offense.
The Indictment alleges that the conspiracy to distribute controlled substances existed between March 2012 and June 2013. Moreover, the prosecution presented information during detention hearings held yesterday in federal court that the defendants were part of a drug-trafficking organization that distributed drugs throughout Wilmington, Delaware, including a residence located at 30th and Madison Streets, which served as the group’s base of operations.
The Indictment and arrests of these individuals was the product of a long-term investigation into the drug-trafficking organization, led by the Federal Bureau of Investigation, the Bureau of Alcohol, Tobacco, Firearms, and Explosives, the Wilmington Police Department and the State of Delaware Department of Corrections Division of Probation and Parole. Critical support for the investigation and arrests was provided by Delaware State Police, Delaware Division of Gaming Enforcement, New Castle County Police Department, United States Marshals Service, and the United States Department of Agriculture.
Acting United States Attorney David C. Weiss thanked the federal, state, and local law enforcement agencies for their participation in this investigation, and stated, “The defendants are charged with participating in a conspiracy to distribute substantial quantities of illegal drugs in the city of Wilmington. We are determined to pursue these charges to the fullest extent of the law, and we will continue the investigation into others who had joined with the charged defendants in trafficking illegal drugs here in Delaware.”
The charges in the Indictment are only allegations and the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.
The case is being prosecuted by Assistant United States Attorneys Jamie M. McCall and Ilana Eisenstein, District of Delaware. For further information, please contact AUSA McCall at 302-573-6079 or AUSA Eisenstein at 302-573-6082.
19 June 2013
Youngstown Man Indicted for Production of Child PornographyRead the Press Release
A federal grand jury returned a four-count indictment charging Christopher Cavna, age 26, of Youngstown, Ohio, with producing, distributing and receiving child pornography, Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
The indictment charges that on or about May 19, 2013, Cavna knowingly permitted a minor to engage in sexually explicit conduct for the purpose of producing a visual depiction of such conduct, and such visual depiction was produced using materials that had been mailed, shipped, and transported in interstate or foreign commerce by any means, including by computer.
The indictment also charges that on or about May 20, 2013, Cavna knowingly permitted a different minor to engage in sexually explicit conduct for the purpose of producing a visual depiction of such conduct, and such visual depiction was produced using materials that had been mailed, shipped, and transported in interstate or foreign commerce by any means, including by computer.
The indictment also charges that on or about May 20, 2013, Cavna knowingly distributed two computer image files, each containing a visual depiction of a real minor engaged in sexually explicit conduct. The indictment also charges that from on or about October 12, 2011 though October 28, 2012, Cavna knowingly received and distributed numerous computer files, which files contained visual depictions of real minors, other than those previously mentioned, engaged in sexually explicit conduct.
If convicted, the defendant’s sentence will be determined by the court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violation. In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
This case is being prosecuted by Assistant United States Attorney Michael A. Sullivan.
The case was investigated by the Youngstown office of the Federal Bureau of Investigation, the Mahoning County Violent Crimes Task Force and the Ohio Adult Parole Authority.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Yakima Drug Trafficker Sentenced to Ten Years in Federal PrisonRead the Press Release
Spokane – Today, Michael C. Ormsby, United States Attorney for the Eastern District of Washington, announced that Jose Antonio Naranjo-Lozano, age 24, of Yakima, Washington, was sentenced today after being convicted of Conspiracy to Distribute Methamphetamine. United States District Judge Edward F. Shea sentenced Naranjo-Lozano to a ten year term of imprisonment, to be followed by a five year term of court supervision following release from Federal prison.
In July 2012, a complaint was filed alleging that Naranjo-Lozano and a codefendant had attempted to sell five pounds of methamphetamine to undercover DEA agents. As detailed in the complaint, Naranjo-Lozano and the codefendant arrived at the location for the drug sale with the bulk of the methamphetamine hidden in an electrically operated secret compartment located in their vehicle. Naranjo-Lozano later pled guilty to one count of conspiracy to distribute over 500 grams of a substance containing methamphetamine.
Michael C. Ormsby said, "This case involved a significant amount of methamphetamine that the Defendant intended to distribute on the streets of Yakima. The seriousness of this crime is reflected by the ten year sentenced imposed by the judge. The DEA is committed to continue its aggressive investigative efforts to keep methamphetamine and other dangerous illegal drugs off the streets. The United States Attorney's Office in the Eastern District of Washington is similarly committed to aggressively prosecute such crimes. "
The investigation of this case was conducted by the Drug Enforcement Administration. This case was prosecuted by Benjamin D. Seal, an Assistant United States Attorney for the Eastern District of Washington.
Wyoming Co. Man Indicted by Federal Grand Jury on Illegal Prescription Painkiller Distribution and Firearm Possession ChargesRead the Press Release
CHARLESTON, W.Va. – A Wyoming County man was indicted on June 18 by a federal grand jury sitting in Huntington in connection with illegal prescription painkiller distribution and firearm possession offenses, U.S. Attorney Booth Goodwin announced. According to a 10-count indictment, Delbert Lester, 55, of McGraws, Wyoming Co., W.Va., allegedly sold oxycodone on eight separate occasions beginning on January 1, 2011 until May 4, 2013, near McGraws, W.Va. The indictment also alleges that on May 9, 2013, Lester possessed oxycodone with intent to distribute. Lester also allegedly possessed two loaded .22 caliber pistols in furtherance of a drug trafficking crime on May 9, 2013.
Lester faces up to 20 years in prison on each drug charge and up to five years in prison on the firearm charge if convicted.
The investigation was conducted by the Southern Regional Drug and Violent Crime Task Force. Assistant United States Attorney Haley Bunn is in charge of the prosecution.
This case is being prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers in communities across the Southern District.
The case is also being brought as part of Project Safe Neighborhoods. Project Safe Neighborhoods is a nationwide commitment to reduce gun crime in the United States by networking existing local programs targeting gun crime.
Note: The charges contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Click here to view a copy of the indictment
Woman Sentenced to Six Months Incarceration for Helping Her Husband Defraud BanksRead the Press Release
PITTSBURGH, Pa. - A resident of Allegheny County, Pennsylvania, has been sentenced in federal court to six months incarceration at a community confinement center, plus five years supervised release on her conviction of charge of bank fraud conspiracy, United States Attorney David J. Hickton announced today.
United States District Judge Joy Flowers Conti imposed the sentence on Beth B. Baker, 62, of Sewickley Heights, Pennsylvania.
According to the information presented to the court, Beth B. Baker conspired with her husband, David F. Baker, to defraud J.P. Morgan and Washington Mutual Bank in false mortgage applications in 2005 and 2007 regarding their purchase of a $2.5 million dollar condominium in Sarasota, Florida.
Judge Conti stated that mortgage fraud is a serious crime, and that Baker made material misrepresentations on loan applications in order to purchase an expensive condominium in Florida.
Assistant United States Attorney Gregory C. Melucci prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Internal Revenue Service, Criminal Investigation, for the investigation leading to the successful prosecution of Beth B. Baker.
Us Seeks to Shut Down Texas Tax Preparer Whose Customers Work Overseas for Defense ContractorsRead the Press Release
WASHINGTON – The United States sued a Southlake, Texas woman last night, seeking to bar her from preparing federal tax returns for others, the Justice Department announced today. The civil injunction suit was filed against Karena Mondrianh in U.S. District Court for the Northern District of Texas.
The government complaint alleges that Mondrianh prepares fraudulent tax returns that understate customers' taxable income by inventing – sometimes without the customer's knowledge – false business expenses and by falsely claiming that a customer's income is exempt from tax. The suit alleges that most of Mondrianh's customers work overseas for defense contractors.
The complaint further alleges that Mondrianh has provided false information to the Internal Revenue Service (IRS) in improper attempts to delay IRS audits of customers. She allegedly urged one customer to lie to an IRS agent in order to prevent an IRS audit.
Return preparer fraud is one of the IRS's Dirty Dozen Tax Scams for 2013. In the past decade, the Justice Department's Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department website at www.justice.gov/tax.
Related Documents:
United States v. Karena Mondrianh, etc.
Complaint for Permanent Injunction
(PDF document)Portable Document Format (PDF) files may be viewed with a free copy of Adobe Acrobat Reader
Accessibility InformationU.S. Seeks to Shut Down Texas Tax Preparer Whose Customers Work Overseas for Defense ContractorsRead the Press Release
The United States sued a Southlake, Texas woman last night, seeking to bar her from preparing federal tax returns for others, the Justice Department announced today. The civil injunction suit was filed against Karena Mondrianh in U.S. District Court for the Northern District of Texas.
The government complaint alleges that Mondrianh prepares fraudulent tax returns that understate customers’ taxable income by inventing – sometimes without the customer’s knowledge – false business expenses and by falsely claiming that a customer’s income is exempt from tax. The suit alleges that most of Mondrianh’s customers work overseas for defense contractors.
The complaint further alleges that Mondrianh has provided false information to the Internal Revenue Service (IRS) in improper attempts to delay IRS audits of customers. She allegedly urged one customer to lie to an IRS agent in order to prevent an IRS audit.
Return preparer fraud is one of the IRS’s Dirty Dozen Tax Scams for 2013. In the past decade, the Justice Department’s Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department website at www.justice.gov/tax.
Two Individuals Indicted on Firearms and Drugs ChargesRead the Press Release
Tampa, Florida - United States Attorney Robert E. O'Neill announces the return by a grand jury of an indictment charging David P. Lawrence (26, Bradenton) and Mark Alan Finehout (37, Sarasota) each with being a felon in possession of a firearm. Lawrence is also charged with possessing with intent to distribute 5 grams or more of methamphetamine. If convicted of the firearms offense, Finehout faces a maximum penalty of 10 years in federal prison. Due to his prior criminal history, Lawrence faces a mandatory minimum of 15 years, up to life imprisonment for the firearms offense. For the narcotics offense, Lawrence faces a mandatory minimum of 10 years in federal prison. The indictment also notifies the individuals that the United States intends to forfeit the firearms and ammunition they are charged with possessing, and any narcotics proceeds related to the charges against Lawrence.
According to the indictment, Lawrence and Finehout, who are both previously convicted felons, are each charged with possessing a .40 caliber Taurus pistol on April 17, 2013. Lawrence is also charged with possessing an SKS rifle on April 18, 2013, and possessing with the intent to distribute 5 grams or more of methamphetamine on April 19, 2013.
An indictment is merely a formal charge that a defendant has committed a violation of the federal criminal laws, and every defendant is presumed innocent unless, and until, proven guilty.
This case was jointly investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the Sarasota County Sheriff’s Office, and the Manatee County Sheriff’s Office. It will be prosecuted by Assistant United States Attorney Mark E. Bini.It is another case prosecuted as a part of the Department of Justice’s “Project Safe Neighborhoods” program - a nationwide, gun-violence reduction strategy. United States Attorney Robert E. O’Neill, along with Julie Torres, Special Agent in Charge, ATF, is coordinating the Project Safe Neighborhoods effort here in the Middle District of Florida in cooperation with federal, state, and local law enforcement officials.
Three Defendants Plead Guilty in Manhattan Federal Court to Charges Related to Their Roles in the CityTime Fraud SchemeRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that LARISA MEDZON, ANNA MAKOVETSKAYA, and SVETLANA MAZER pled guilty today to various felony offenses in connection with their roles in facilitating a fraud, kickback, and money laundering scheme that targeted the City of New York’s CityTime information technology project. In connection with their pleas, the defendants agreed to forfeit their interests in over $27 million in cash held in 91 bank accounts and five safe deposit boxes, as well as four real properties worth over $4 million, all of which constitute crime proceeds. MEDZON, MAKOVETSKAYA, and SVETLANA MAZER pled guilty in Manhattan federal court before U.S. District Judge George B. Daniels.
Manhattan U.S. Attorney Preet Bharara said: “Through lies and subversion, each of these three defendants served as highly paid enablers of an epic fraud against the City of New York. And with their pleas today and multi-million dollar forfeitures, they will be stripped of their ill-gotten gains and potentially their liberty. Thanks to the efforts of prosecutors from this Office and our partners at the Department of Investigation, the City recouped more than $500 million that was lost to the CityTime fraud, and we continue to hold the perpetrators of this brazen scheme to account.”
According to the criminal Informations filed earlier today in Manhattan federal court, and as alleged in the Superseding Indictment in United States v. Mark Mazer et al., (the “Mazer Indictment”), and other public filings in the case:
The CityTime project was a City initiative intended to modernize timekeeping and payroll systems across City agencies. In 2000, Science Applications International Corporation (“SAIC”) became the lead contractor on CityTime. Beginning in 2003, SAIC appointed Gerard Denault as Program Manager for CityTime. At Denault’s behest, SAIC hired Technodyne LLC (“Technodyne”) as a “single source” subcontractor on the CityTime project. In exchange for agreeing to steer work to Technodyne, Denault and Carl Bell, SAIC’s Chief Systems Engineer in the New York office of SAIC, began receiving kickbacks from Technodyne via its principals, Reddy Allen and Padma Allen, which were laundered through affiliates of Technodyne located in India.
Beginning in 2005, Mark Mazer, who had been retained by the City to help manage the CityTime project, began demanding and obtaining a separate kickback stream via two subcontractors of Technodyne to which he steered work: D.A. Solutions, run by Mark Mazer’s uncle, Dimitry Aronshtein, and Prime View, run by Victor Natanzon. As a result of the scheme, Denault and Bell obtained approximately $15 million in kickbacks and Mark Mazer obtained approximately $30 million in kickbacks. Technodyne also obtained over $325 million in revenue from the scheme. Denault, Mark Mazer, Padma Allen, Reddy Allen, and the Allens’ company, Technodyne, among others, worked together to defraud the City by causing it to overpay for the CityTime project in order to increase their illicit profits from the scheme. The fraudulent scheme helped cause the cost of the CityTime project to balloon from under $100 million to a final cost of close to $700 million.
Mark Mazer and Aronshtein, among others, helped launder millions of dollars in proceeds of the fraud and kickback scheme by routing the funds through shell companies controlled by Mark Mazer’s relatives MEDZON, MAKOVETSKAYA, and SVETLANA MAZER, and by causing millions of dollars in proceeds to be routed through other companies and offshore accounts located in Latvia, among other means. MEDZON, Mark Mazer’s mother, withdrew over $200,000 in cash derived from the scheme through hundreds of ATM transactions that were designed to evade currency transaction reporting requirements, while MAKOVETSKAYA, Mark Mazer’s cousin, lied to employees of a federally-insured bank so that the bank would agree to open up accounts in the name of a shell company that was used to facilitate the scheme. SVETLANA MAZER, Mark Mazer’s wife, also attempted to obstruct the Government’s investigation of the CityTime scheme by omitting her role in controlling shell companies used to facilitate the scheme from sworn disclosures she submitted to the City.
MEDZON, 68, of Forest Hills, New York, pled guilty to intentionally structuring cash transactions to avoid currency reporting requirements, which carries a maximum potential penalty of five years in prison. MAKOVETSKAYA, 42, of Forest Hills, New York, pled guilty to conspiracy to make false statements to a bank, which carries a maximum potential penalty of five years in prison. SVETLANA MAZER, 47, of Manhasset, New York, pled guilty to obstruction of justice, which carries a maximum potential penalty of 20 years in prison. In connection with their pleas, the defendants agreed to entry of preliminary orders of forfeiture forfeiting their interests in a total of over $27 million in cash held in 91 bank accounts and five safe deposit boxes, and in four real properties worth more than $4 million, derived from the scheme.
Today’s pleas follow several other developments in the case, including: (1) guilty pleas by Carl Bell and Victor Natanzon, who are cooperating with the Government’s investigation; (2) the Office’s entry into a deferred prosecution agreement with SAIC, in which SAIC agreed to forfeit over $500 million, cooperate with the Government’s investigation, and accept responsibility for illegal conduct by its employees on the CityTime project; (3) the Office’s forfeiture of several million dollars in cash and property seized from Padma Allen and Reddy Allen after they fled the country to avoid prosecution; and (4) the return of approximately $500 million in forfeited funds to the City and its agencies.
Mr. Bharara praised the New York City Department of Investigation (“DOI”) for its outstanding work in this investigation, specifically the efforts of Commissioner Rose Gill Hearn and teams led by Chief of Investigations John Kantor, Deputy Commissioner for Legal Affairs Marjorie Landa, and Associate Commissioner Yuval Hibshoosh.
The charges against the remaining defendants in the Mazer Indictment, including Denault, Mark Mazer, Aronshtein, Padma Allen, Reddy Allen, and Technodyne, are merely allegations, and they are presumed innocent unless and until proven guilty.
This case is being handled by the Office’s Public Corruption Unit. Assistant U.S. Attorneys Howard S. Master and Andrew D. Goldstein are in charge of the investigation.
U.S. v. Svetlana Mazer S4 Information
U.S. v. Larisa Medzon S3 Information
U.S. v. Anna Makovetskaya S5 InformationTexas Man Sentenced to 188 Months in Prison for Attempting to Produce Child PornographyRead the Press Release
LAFAYETTE, La. – United States Attorney Stephanie A. Finley announced today that Emery Weyland Graham, 43, of Longview, Texas, was sentenced by U.S. District Judge Elizabeth E. Foote to 188 months in prison for attempting to produce child pornography. Graham is also required to complete 10 years of supervised release and register as a sex offender. Graham pleaded guilty on Feb. 19, 2013.
According to the evidence presented at the guilty plea, the Youngsville Police Department received a complaint on Sept. 13, 2011 from a mother that her daughter had been sent sexually explicit messages by a 41-year-old man using a cell phone. Police confiscated the phone, and an undercover officer posed as the 13-year old girl, through texts, to continue communication with Graham. Graham sent sexually explicit messages about sexual acts that he wanted to perform on the girl and asked the girl to send him sexually explicit images of herself. He instructed the minor on how to take the pictures and provided details of the images he wanted. Graham was arrested on Oct. 5, 2011.
“Prosecuting internet predators is a top priority for the U.S. Attorney’s Office,” Finley stated. “This sentence should send the message that there are serious consequences for attempting to exploit children. Predators who seek to rob the innocence of children will be prosecuted to the fullest extent of the law.”Homeland Security Investigations, Youngsville Police Department, and the Louisiana State Police investigated the case with assistance from the Texas Rangers. Assistant U.S. Attorney Myers P. Namie prosecuted the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The 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 and to the FBI at tips.fbi.gov. Tips may be submitted anonymously.
Ten Drug Traffickers Charged in Oxycodone Distribution RingRead the Press Release
More Than 25 Defendants Face Tribal And State Drug Charges
ASHEVILLE, N.C. – A criminal indictment charging seven defendants with drug trafficking conspiracy and related charges was unsealed today in U.S. District court, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. The federal indictment was returned by a grand jury sitting in Asheville on June 4, 2013, and remained sealed until today, following yesterday’s arrests of the named defendants by law enforcement.
U.S. Attorney Tompkins is joined in making today’s announcement by Harry S. Sommers, Special Agent in Charge of the Atlanta Field Division of the Drug Enforcement Administration (DEA), which oversees the Charlotte District Office; Jason O’Neal, Deputy Associate Director of the Bureau of Indian Affairs, Division of Drug Enforcement; Wayne L. Dixie, Special Agent in Charge of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Charlotte Field Division; Chief Ben Reed of the Cherokee Indian Police Department; Sheriff Curtis Cochran of the Swain County Sheriff’s Office; Sheriff Mickey Anderson of the Graham County Sheriff’s Office; Sheriff Greg Christopher of the Haywood County Sheriff’s Office; and Sheriff Jimmy Ashe of the Jackson County Sheriff’s Office.
The indictment is the result of a large scale two-year joint federal, tribal and state investigation targeting the distribution of narcotics, with a focus on prescription drugs, on and around the Cherokee Indian Reservation.
The defendants named in the indictment are charged with one count of conspiracy to possess with intent to distribute controlled substances, including oxycodone, cocaine, marijuana and alprazolam. According to the indictment, the alleged conduct took place between January 2007 and December 2012 in Swain and Jackson Counties. Those charged are:
• Jackie Lee Rattler, 54, of Cherokee, N.C.
• Jacob Hunter Rattler, 21, of Cherokee.
• Evan Thomas Norris, Jr., 54, of Robbinsville, N.C.
• Taryn Krista Elizabeth Toineeta Rattler, 25, of Cherokee.
• Timothy Leroy Rattler, 50, of Cherokee.
• Justina Nacole Rattler, 31, of Cherokee.
• Mark Allen Winstead, 26, of Cherokee.
Jackie Lee Rattler also faces six additional counts of possession with intent to distribute controlled substances, and one count of being a controlled substance user in possession of firearms. Jacob Hunter Rattler is also charged with one additional count of possession with intent to distribute a controlled substance.
The indictment includes a notice of forfeiture, which gives notice that the defendants must forfeit to the United States all of the property and currency involved in the offenses charged in the indictment, and all property and currency which are proceeds of such offenses, including approximately $48,900 in cash, 44 firearms, three vehicles and two Harley Davidson motorcycles seized during the course of the investigation.
Six of the seven defendants charged in the indictment are in custody. Taryn Rattler remains a fugitive. Those arrested will remain in custody pending their detention hearings, which have been scheduled for Friday, June 21, 2013. Each drug offense carries a maximum prison term of 20 years, a $1 million fine, or both. The user of narcotics in possession of firearms offense carries a maximum prison term of 10 years, a $250,000 fine, or both.
The charges contained in the indictment are allegations. The defendants are presumed innocent unless and until they proven guilty beyond a reasonable doubt in a court of law.
Tribal and state law enforcement officers have arrested and charged more than 25 defendants on tribal and state drug offenses.
Those facing tribal drug charges are: Deborah Smith, Charles Taylor, Austin Gunter, Humberto Corral, Deanna Smith (not arrested), Kevin Smith, Shenna Crowe, Lisa Toineeta, Sam Thompson, Mike Walkingstick (not arrested), Annie Cucumber, Robert Tramper, Ashley Keel (not arrested), Chadwick Feather, Walter Bradley, Thomas Rickman, Victoria Cucumber (not arrested), Delores Cabrera, Sally Bryson, Raymond Whitecotton, Rachel Taylor and Regan Parton.
Those facing state drug charges are: Alea Ohmart, James Murphy, Ceegee Bird (not arrested), Clyde Taylor, Rogelio Cabrera, Eric Dossett, Anthony Dossett (not arrested), Frankie Dyer and Christin Hodgins (Not arresged).
U.S. Attorney Tompkins thanked all the law enforcement agencies involved in this investigation for their continued cooperation and assistance. The prosecution for the case is handled by Special Assistant U.S. Attorney John Pritchard, of the U.S. Attorney’s Office in Asheville.
Statement of Manhattan U.S. Attorney Preet Bharara on the Guilty Pleas of Larisa Medzon, Anna Makovetskaya, and Svetlana Mazer to Charges Related to Their Roles in the Citytime Fraud SchemeRead the Press Release
“Through lies and subversion, each of these three defendants served as highly paid enablers of an epic fraud against the City of New York. And with their pleas today and multi-million dollar forfeitures, they will be stripped of their ill-gotten gains and potentially their liberty. Thanks to the efforts of prosecutors from this Office and our partners at the Department of Investigation, the City recouped more than $500 million that was lost to the CityTime fraud, and we continue to hold the perpetrators of this brazen scheme to account.”
Sixteen Arrested in Alleged Heroin Trafficking ConspiracyRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
COLUMBUS – A yearlong investigation into an alleged heroin trafficking organization in central Ohio has resulted in the arrests of 16 people, the seizure of more than 11 kilograms of heroin, three firearms, and more than $115,000 in cash.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, Robert Corso, Special Agent in Charge, Drug Enforcement Administration, Franklin County Sheriff Zach Scott and Columbus Police Chief Kim Jacobs announced the arrests today.
Investigators made the arrests between June 10 and today based on federal complaints. Each defendant has been charged with conspiracy to possess with intent to distribute heroin, a crime punishable by at least five and up to 40 years in prison. All defendants have appeared before a U.S. Magistrate Judge who ordered them held without bond until trial. Eight search warrants have also been executed since June 10 as part of the investigation.
U.S. Attorney Stewart said the investigation by DEA, the Franklin County Sheriff’s Office, Columbus Police and the DEA Southwest Border Task Force is continuing.
Stewart commended Assistant U.S. Attorneys Michael Hunter and Kevin Kelley who are representing the United States in this case.
Charges contained in a complaint are allegations. All defendants should be presumed innocent until and unless proven guilty in court.
A list of those charged is below.
DEFENDANTS ARRESTED IN JUNE 2013 HEROIN INVESTIGATION
Name AGE ADDRESS
Alonso Ernesto TORRES MONTANO 25 Grove City
Luis Alberto TORRES MONTANO 30 Grove City
Santiago Manuel AZDEITIA 21 Columbus
Ivon Itzel TRUJILLO CERVANTES 30 Grove City
Johana Yazmin DIAZ LOPEZ 25 Columbus
Jose Enrique ESPARZA CASTILLO 24 Columbus
Victor GARCIA, aka “EL NEGRO” 25 Columbus
Francisco Fuentes ESTRADA, aka “EL GALLO” 34 Columbus
Primitivo BUENROSTO, aka “JOAQUIN” 60 Columbus
Jose Luis DIAZ 39 Columbus
Janeth ARVIZU VALDERRAMA 26 Columbus
Andy Abel DIAZ LOPEZ 19 Columbus
Juan Carlos PEREZ LEON, aka “CARLOS” 24 Fairfield
Juan M. BERMUDEZ DELGADO 28 Columbus
Oscar JURADO 23 Columbus
Lonnie GARCIA GOMEZ 19 ColumbusSewickley Heights Man Sentenced to Prison for False Mortgage ApplicationsRead the Press Release
PITTSBURGH, Pa. - An Allegheny County man has been sentenced in federal court to 18 months incarceration plus five years supervised release on his conviction of charge of bank fraud conspiracy, United States Attorney David J. Hickton announced today.
United States District Judge Joy Flowers Conti imposed the sentence on David F. Baker III, 62, of Sewickley Heights, Pa.
According to the information presented to the court, David F. Baker, III, conspired to defraud J.P. Morgan and Washington Mutual Bank in false mortgage applications in 2005 and 2007 on a $2.5 million condominium in Sarasota, Fla.
Judge Conti stated that mortgage fraud is a serious crime, and that Baker made material misrepresentations on loan applications in order to purchase an expensive condominium in Florida.
Assistant United States Attorney Gregory C. Melucci prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Internal Revenue Service, Criminal Investigation, for the investigation leading to the successful prosecution of David F. Baker, III.
Settlement with Ash Grove Cement Company to Reduce Thousands of Tons of Air EmissionsRead the Press Release
Ash Grove Cement Company has agreed to pay a $2.5 million penalty and invest approximately $30 million in pollution control technology at its nine Portland cement manufacturing plants to resolve alleged violations of the Clean Air Act, announced the Department of Justice and the U.S. Environmental Protection Agency (EPA).
Today’s agreement will reduce more than 17,000 tons of harmful nitrogen oxides (NOx) and sulfur dioxide (SO2) pollution each year across plants located in Foreman, Ark.; Inkom, Idaho; Chanute, Kan.; Clancy, Mont.; Louisville, Neb.; Durkee, Ore.; Leamington, Utah; Seattle, Wash.; and Midlothian, Texas.
“This significant settlement will achieve substantial reductions in air pollution from Ash Grove’s Portland cement manufacturing facilities and benefit the health of communities across the nation,” said Acting Assistant Attorney General Robert G. Dreher. “The agreement reflects the Justice Department’s ongoing commitment to protecting public health and the environment through enforcement of the nation’s Clean Air Act.”
“Today’s settlement will reduce air pollution that can harm human health and contribute to acid rain, haze, and smog,” said Cynthia Giles, Assistant Administrator for EPA’s Office of Enforcement and Compliance Assurance. “The new stringent limits on emissions will lead to less pollution and better air quality for communities across the country.”
In addition, Ash Grove has agreed to spend $750,000 to mitigate the effects of past excess emissions from several of its facilities.
The settlement requires Ash Grove to meet stringent emission limits and install and continuously operate modern technology to reduce NOx, SO2, and particulate matter (PM). Ash Grove is required to reduce NOx emissions at nine kilns, some of which will have the lowest emission limits of any retrofit control system in the country. In addition, modern pollution controls must be installed on every kiln to reduce PM emissions, and on several kilns to reduce SO2 emissions.
In addition, at its Texas facility, Ash Grove will shut down two older, inefficient kilns, while a third will be replaced with a cleaner, newly reconstructed kiln.
Ash Grove will also spend $750,000 on a project to replace old diesel truck engines at its facilities in Kansas, Arkansas, and Texas, which are estimated to reduce smog-forming nitrogen oxides by approximately 27 tons per year.
The settlement is part of EPA’s national enforcement initiative to control harmful air pollution from the largest sources of emissions, including portland cement manufacturing facilities. This is also the first settlement with a cement manufacturer that requires injunctive relief and emission limits for PM. SO2 and NOx, two key pollutants emitted from cement plants, can harm human health and are significant contributors to acid rain, smog, and haze. These pollutants are converted in the air into fine particles of particulate matter that can cause severe respiratory and cardiovascular impacts, and premature death.
Eight states and one local agency have joined the United States in the settlement, including: Arkansas, Idaho, Kansas, Montana, Nebraska, Oregon, Utah, Washington, and the Puget Sound Clean Air Agency.
The settlement was lodged today in the U.S. District Court for the District of Kansas and is subject to a 30-day public comment period and final court approval. It will be available for viewing at www.justice.gov/enrd/Consent_Decrees.html.
More information about this settlement: www.epa.gov/enforcement/air/cases/ashgrove.html
More about EPA’s National Enforcement Initiatives: http://www.epa.gov/compliance/data/planning/initiatives/index.html
Second Former Carter's Executive Pleads Guilty to Multi-Million Dollar Insider Trading ConspiracyRead the Press Release
Defendant Tipped Former Co-Worker Between 2009 And 2010
ATLANTA – Richard T. Posey pleaded guilty today to conspiracy to commit securities fraud in connection with a multi-million dollar insider trading conspiracy involving Carter’s stock.
“Corporate insiders who disclose company secrets are the enablers who make illegal insider trading possible,” said United States Attorney Sally Quillian Yates. “Insider trading undermines faith in the nation’s stock markets. Public company executives and employees should be on notice that when it comes to material, non-public information, they are required to play by the same rules as everyone else.”
Mark F. Giuliano, Special Agent in Charge, FBI Atlanta Field Office, stated: “Today’s guilty plea holds this defendant accountable for his criminal actions and makes it clear that corporate executives are not exempt from the rule of law. The FBI asks that anyone with information regarding such criminal activity to contact their nearest FBI field office.”
According to United States Attorney Yates, the charges and other information presented in court: Posey, 52, of Duluth, Ga., was employed as a Vice President of Operations for various Carter’s brands and divisions, and later as Vice President of Operations for the company’s wholesale sales business from in or about July 2002 until his termination in January 2013.
Carter’s is a publicly-traded company registered with the U.S. Securities and Exchange Commission (“SEC”), and its stock is listed on the New York Stock Exchange under the ticker symbol “CRI.” Carter’s is obligated to report its financial results in annual and quarterly filings with the SEC, so that members of the public can make informed investment decisions.
From approximately April 2009 through July 2010, while employed by Carter’s, Posey disclosed inside information about Carter’s upcoming earnings releases and other developments to Eric M. Martin, the company’s former head of investor relations, for the purpose of making illegal insider trades and tipping others. Martin, who was convicted on December 18, 2012, of tipping a former Wall Street analyst identified as “Cooperator Number 1” during Martin’s employment with Carter’s between 2005 and 2009, repeatedly bought and sold Carter’s stock based on the inside information provided by Posey between 2009 and 2010, and Martin also continued to tip Cooperator Number 1 and others.
For example, Posey tipped Martin in advance of Carter’s October 27, 2009, announcement that it was conducting an internal investigation into accounting problems and would be delaying its earnings release for the third quarter of 2009. Almost immediately after Posey tipped Martin, on Friday, October 23, 2009, Martin sold his entire position in Carter’s stock, over 35,000 shares valued at approximately $1 million. Later that morning, Martin passed the tip during a telephone call to an individual identified in the Criminal Information as “Portfolio Manager Number 1,” an employee of a prominent New York hedge fund identified in the Criminal Information as “Hedge Fund Number 1.” While still on the telephone with Martin, Portfolio Manager Number 1 ordered the sale of Hedge Fund Number 1’s entire position in Carter’s stock, 300,000 shares valued at nearly $9 million. The very next trading day, Monday, October 26th, Martin tipped Cooperator Number 1 during a telephone call. Immediately after the call ended, Cooperator Number 1 sold his entire position in Carter’s stock -- 15,000 shares valued at over $400,000 -- and bought November 30th put options, thereby betting on Carter’s stock price to decline significantly. The next morning, Tuesday, October 27th, Carter’s shocked the market with the news of its internal investigation and earnings delay, and its stock price fell over 20% in one day. The internal investigation ultimately resulted in a multi-year financial restatement by Carter’s, criminal indictments of two of its former top executives for securities fraud and related offenses, and three SEC enforcement actions.
Posey disclosed this and other inside information to Martin in exchange for reciprocal stock tips about other public companies to which Martin had access, for future networking opportunities, and for friendship. Posey did so over the phone, at dinners, during drinks, and on the golf course.
Posey also traded in Carter’s stock for his own benefit on the basis of inside information about Carter’s earnings releases during his employment with the company. Between mid-2005 and late 2009, Posey traded thousands of shares of Carter’s stock during company-wide trading blackout periods that preceded approximately 14 quarterly or annual earnings releases, even though company policies prohibited company insiders from trading in Carter’s stock at those times. Posey did so without obtaining approval for the trades from Carter’s Chief Financial Officer, which company policies required Posey and a select group of key personnel to do, given their regular access to and receipt of material, non-public information. Posey’s blackout trading resulted in illegal profits and losses avoided in the amount of approximately $50,000.
Posey was convicted of tipping his former co-worker about Carter’s quarterly and annual financial results and other material, non-public information in advance of the public announcement of the information, beginning shortly after the company terminated Eric M. Martin at the end of March 2009, and continuing through July 2010. He pleaded guilty to a Criminal Information charging one count of Conspiracy to Commit Securities Fraud. He has agreed that he is responsible for illegal insider trading gains and losses avoided resulting from the conspiracy, his own trading, and relevant conduct between $2.5 million and $7 million, and has agreed to pay at least $800,000 in restitution to Carter’s, which represents the approximate amount of legal fees Carter’s has incurred to date in connection with the government’s insider trading investigation. Posey could receive a maximum sentence of five years in prison and a fine of up to $250,000. In determining the actual sentence, the Court will consider the United States Sentencing Guidelines, which are not binding, but provide appropriate sentencing ranges for most offenders.
In a separate case, a federal grand jury indicted Eric M. Martin on November 7, 2012, on one count of conspiracy, seven counts of securities fraud, and three counts of wire fraud in connection with an insider trading conspiracy from early 2005 to March 2009 and his own blackout trading while working for Carter’s. Martin pleaded guilty to one count of conspiracy on December 18, 2012. A sentencing date has not yet been set for either case. Both cases are assigned to United States District Judge Richard W. Story.
This law enforcement action is part of President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
This case is being investigated by the FBI. The Atlanta Regional Office of the SEC has conducted a separate investigation of possible civil violations of the U.S. securities laws, and on August 22, 2012, the SEC filed a civil enforcement action against Martin for insider trading. That case is pending.
Assistant United States Attorney David M. Chaiken is prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the HomePage for the U.S. Attorney’s Office for the Northern District of Georgia is www.justice.gov/usao/gan.
Scandia Man Indicted for Stealing Survivor Benefits from the U.S. Department of Veterans AffairsRead the Press Release
MINNEAPOLIS—Earlier today in federal court, a 49-year-old Scandia man was indicted for stealing more than $92,000 in survivor benefits from the United States Department of Veterans Affairs (“VA”). Dean Boraas was specifically charged with one count of theft of government funds.
The indictment alleges that from September 1, 2005, to May 30, 2010, Boraas stole and converted for his personal use $92,152 in survivor benefits to which he knew he was not entitled. The benefits were assigned to his mother, who passed away. However, the VA was not made known of that fact. As a result, the funds continued to be paid into a joint bank account held in the names of Boraas and his mother.
If convicted, Boraas faces a potential maximum penalty of ten years in federal prison. Any sentence would be determined by a federal district court judge. This case is the result of an investigation by the VA-Office of Inspector General. It is being prosecuted by Assistant U.S. Attorney Clifford B. Wardlaw.An indictment is a determination by a grand jury that there is probable cause to believe that offenses have been committed by a defendant. A defendant, of course, is presumed innocent until he or she pleads guilty or is proven guilty at trial.
San Luis Valley Man Sentenced to Nine Years in Federal Prison for Being A Felon in Possession of A FirearmRead the Press Release
DENVER – Lawrence Rolland Thiel, of San Luis, Colorado, was sentenced this month by U.S. District Court Judge William J. Martinez to serve 110 months (just over 9 years) in federal prison for possession of a firearm by a previously convicted felon, United States Attorney John Walsh and ATF Denver Special Agent in Charge Andrew Traver announced. After serving his sentence, Judge Martinez ordered Thiel to spend 3 years on supervised release. Thiel, who appeared at the hearing in custody, was remanded.
Thiel was indicted by a federal grand jury on October 1, 2012. He pled guilty before Judge Martinez on February 11, 2013. He was sentenced on June 4, 2013.
According to court records, beginning on August 11, 2012, Thiel drove past a home at a high rate of speed and fired a small black pistol in the direction of the house. The house belonged to a man who was involved in a foreclosure proceeding against Thiel’s home. While police were still investigating the initial crime, Thiel was identified as running a woman and her three children off the road while they were driving. He also pointed a small black pistol at them.
Having obtained an arrest warrant for Thiel, on August 20, 2012, a police officer observed Thiel driving the same truck involved with the two earlier crimes. Police pulled over Thiel’s vehicle. Thiel was driving, and his ex-wife, who he lived with sporadically, occupied the passenger seat. Thiel was placed under arrest. After being taken to Costilla County Jail, Thiel consented to a lawful search of his vehicle. During the search, officers discovered a Ruger P95DC 9mm pistol. A subsequent search of Thiel's home, pursuant to a search warrant, uncovered a Savage Arms Model 24C Series P, over/under shotgun/rifle. The serial number of this weapon had been obliterated.
Prior to the execution of the search warrant, Thiel’s ex-wife initially made claims that the firearms were hers. However, after the searches turned up the second firearm and pictures of Thiel shooting and posing with the pistol dating back to April of 2012, Thiel’s ex-wife admitted that Thiel had asked her to purchase them for him, and that they were his.
Thiel has a criminal history dating back to 1981. Among convictions for other minor crimes, Thiel has at least ten felony convictions from jurisdictions across Colorado and California. This is Thiel’s first conviction for a federal crime.
This case was investigated by the ATF and the San Luis Police Department.
Thiel was prosecuted by Assistant U.S. Attorney Kurt Bohn.
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Rosebud Man Charged with Possession of Child PornographyRead the Press Release
United States Attorney Brendan V. Johnson announced that a Rosebud, South Dakota man has been indicted by a federal grand jury for Possession of Child Pornography.
Jeremy Gunhammer, age 20, was indicted by a federal grand jury on June 12, 2013. He appeared before U.S. Magistrate Judge Mark A. Moreno on June 19, 2013 and pled not guilty to the indictment. The maximum penalty upon conviction is up to 10 years in custody, a $250,000 fine, or both; life of supervised release; and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The charge is merely an accusation and Gunhammer is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Federal Bureau of Investigation, South Dakota Division of Criminal Investigation, South Dakota Internet Crimes Against Children Task Force, Rosebud Sioux Tribe Law Enforcement Services, Bureau of Indian Affairs, Pennington County Sheriff’s Office, Rapid City Police Department, Sioux Falls Police Department and the U.S. Marshals Service.
U.S. Attorney Brendan Johnson and Assistant U.S. Attorneys Tim Maher and Sarah Collins are prosecuting the case.
Gunhammer was released to a third party custodian pending trial. A trial date has not been set.
Renton Man Pleads Guilty to Wire Fraud in Connection with Fake Chihuly Glass SalesRead the Press Release
A 35-year-old Renton, Washington man pleaded guilty today in U.S. District Court in Seattle to wire fraud in connection with his scheme to advertise and sell fake Chihuly artwork, announced U.S. Attorney Jenny A. Durkan. MICHAEL LITTLE admits he bought various pieces of generic glasswork and artwork over the internet and falsely claimed to buyers that it was authentic Dale Chihuly work. LITTLE made at least $40,000 selling the fakes. LITTLE will be sentenced by U.S. District Judge Robert S. Lasnik on October 4, 2013.
According to records in the case, between 2011 and April 2013, LITTLE offered for sale or sold various pieces of glass art and paintings that he represented were the original work of Dale Chihuly. LITTLE marketed the works via eBay. The artworks bore a signature that appeared to be Chihuly’s and LITTLE provided paperwork that he said authenticated the pieces as the work of Dale Chihuly. However, an expert in Chihuly’s work examined the pieces at the request of a number of the purchasers and determined they were fakes. The papers that were supposed to authenticate the works were forged. LITTLE told various stories to potential buyers about how he had acquired the Chihuly work, including that his family had purchased the pieces after winning the Lotto.
Wire fraud is punishable by up to 20 years in prison and a $250,000 fine.
The case was investigated by Seattle-Tacoma Border Enforcement Security Task Force (BEST Seattle), led by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI). BEST Seattle is comprised of members from HSI; U.S. Customs and Border Protection’s Office of Field Operations; the U.S. Secret Service; the U.S. Coast Guard Investigative Service; the FBI; the U.S. Postal Inspection Service; and the Port of Seattle Police Department. BEST Seattle investigates smuggling and related crimes and combats criminal organizations seeking to exploit vulnerabilities at the Seattle and Tacoma seaports and adjacent waterways.
The case is being prosecuted by Assistant United States Attorney Matthew Diggs.
Purported Environmental Product Inventor and Developer Pleads Guilty in $5 Million Dollar Fraud SchemeRead the Press Release
Earlier today, Theodore Sweeten, the president of Symtech International, Inc. (“Symtech”), pleaded guilty to a charge of wire fraud before United States District Judge Nicholas G. Garaufis at the federal courthouse in Brooklyn, New York. When sentenced, Sweeten faces a maximum sentence of twenty years’ imprisonment.
The guilty plea was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office.
Sweeten, who claimed he developed and patented the “Clean Air Valve,” among other environmental products, admitted at his guilty plea that he defrauded an investor of $5 million by lying to him about his expertise in their joint venture agreement. The indictment charged Sweeten, and two others, with inducing the victim to make the investment in order to “lease” a credit line of $100 million, which in turn would enable him to generate millions of dollars in profit through special investment programs.1 In furtherance of that scheme, the indictment alleges that the defendants falsely represented that the victim’s funds would be held in an attorney escrow account pending confirmation of the posting of $100 million in the leased-funds account. In fact, they simply distributed the victim’s $5 million among themselves and falsely represented that a $100 million account had been created at HSBC by sending the victim fabricated bank documents on HSBC letterhead.
“Theodore Sweeten defrauded an investor of his hard-earned savings through fanciful tales about his investment and environmental expertise, but the only expertise Sweeten truly had was being a con man,” stated United States Attorney Lynch. “This Office, together with our law enforcement colleagues, will vigorously pursue those who prey on unsuspecting investors.” Ms. Lynch expressed her appreciation to the Federal Bureau of Investigation, the agency responsible for leading the government’s investigation.
The government’s case is being prosecuted by Assistant United States Attorneys Winston M. Paes and Marcia M. Henry.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
The Defendant: THEODORE SWEETEN
Age: 60
Residence: Ashland, Oregon_____________________________
1 The charges against the co-defendants are merely allegations, and they are presumed innocent unless and until proven guilty.