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Monday 6 May 2013
Ventura County Man Who Profited More Than $1 Million Through Illegal Insider Stock Trades Based on Information Obtained from Former Partner at KPMG Agrees to Plead Guilty to Federal Conspiracy ChargeRead the Press Release
LOS ANGELES – The owner of a San Fernando Valley jewelry store was charged today with receiving insider information from a senior partner with KPMG LLP and using that confidential information about KPMG’s clients to make illegal stock trades that generated well over $1 million in illicit profits.
Bryan Shaw, 52, of Lake Sherwood, California, was charged this morning in United States District Court with one count of conspiracy. In a plea agreement also filed this morning, Shaw agreed to plead guilty to the felony offense and admitted that he plotted with the former KPMG partner to commit securities fraud. As part of the agreement with federal prosecutors, Shaw agreed to disgorge approximately $1,271,787 in illegal stock trading profits.
Shaw is expected to make his initial appearance later this week in United States District Court.
In a criminal information and plea agreement filed this morning by federal prosecutors, Shaw admitted that he conspired with former KPMG senior partner Scott London to violate federal securities laws by using insider information to make illegal stock transactions in publicly traded companies.
London, 50, of Agoura Hills, was charged last month in a criminal complaint with one count of conspiracy to commit securities fraud. London is scheduled to be arraigned in the case in United States District Court on May 17.
“These two men were close friends who shared dinners, concerts, sporting events and secret information that brought profits to each of them,” said United States Attorney André Birotte Jr. “London provided, and Shaw was all too happy to use,
proprietary information that should have remained confidential. These men broke ethical rules and criminal laws for the sole purpose of lining their pockets with illegal profits.”Bill L. Lewis, the Assistant Director in Charge of the FBI’s Los Angeles Field Office, stated: “The FBI is committed to investigating allegations of insider trading and will hold violators accountable to ensure the public playing field is even and fair. We will continue to work with our partners to identify securities fraud so that investors maintain a high level of confidence in the marketplace.”
The documents filed in the case against Shaw, as well as the 24-page affidavit in support of the criminal complaint in London’s case, outline how London provided Shaw with confidential information about KPMG clients, and how Shaw used this information to make trades that generated the illegal proceeds.
London was a senior partner at KPMG who supervised hundreds of accounting professionals at the firm and personally handled audits for major KPMG clients, including Herbalife Ltd. and Skechers USA, Inc. As a result of his position, London had access to confidential information about KPMG’s clients before that information was disclosed to the public.
In February 2013, Shaw began to cooperate with the government’s investigation. London’s alleged criminal conduct continued until March, when he was recorded in telephone conversations passing highly sensitive and confidential information to Shaw regarding upcoming earnings announcements for KPMG clients Herbalife, Ltd. and Deckers Outdoor Corporation.
During the course of the scheme, London, in some instances, called Shaw two to three days before press releases were issued for KPMG clients and read confidential information from the draft releases to Shaw, according to court documents. London allegedly also disclosed to Shaw confidential information about impending mergers concerning KPMG clients before that information was made public. At times, London even discussed with Shaw how to structure Shaw’s purchases of the stock in certain companies in order to protect them from being discovered.
Shaw admits in his plea agreement that he gave London more than $60,000 in cash in exchange for confidential information about KPMG’s clients, typically meeting with London near Shaw’s Encino jewelry store to give him bags containing stacks of $100 bills. Shaw also admits in his plea agreement that he gave London a $12,000 Rolex Daytona Cosmograph watch, as well as jewelry and concert tickets, in exchange for the confidential information.
The criminal complaint against London details recorded conversations between Shaw and London in February 2013 in which London disclosed information about earnings announcement for Herbalife and Deckers. The complaint further details that on two occasions, acting at the direction of the FBI, Shaw met with London and gave him cash as payment for confidential information about KPMG clients.
The federal charge of conspiracy to commit securities fraud carries a statutory maximum penalty of five years in prison, and a fine of $250,000 or twice the gross gain or loss from the offense.
The criminal complaint naming London contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until proven guilty in court.
The criminal investigation in this case was conducted by the Federal Bureau of Investigation.
In a separate action filed last month, the U.S. Securities and Exchange Commission filed a civil lawsuit against London and Shaw (see: http://www.sec.gov/litigation/litreleases/2013/lr22670.htm).
Release No. 13-063
Two Members of A Pickpocket Crew Plead Guilty ToRead the Press Release
Baltimore, Maryland – Crystal Barner, age 28, and Maureen Brown Little, age 39, both of Baltimore, pleaded guilty today to a scheme in which the conspirators stole wallets from women’s purses, removed the cash, credit cards and driver’s licenses and used the credit cards to make purchases at nearby stores.
The guilty pleas were announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Acting Special Agent in Charge Lisa Quinn of the United States Secret Service – Baltimore Field Office; Colonel Michael Kundrat, Chief of the Maryland Transportation Authority Police; Chief James W. Johnson of the Baltimore County Police Department; and Commissioner Anthony W. Batts of the Baltimore Police Department.
According to their plea agreements, beginning in May 2007, the women were part of a scheme to defraud financial institutions by stealing credit cards from the wallets and purses of unsuspecting individuals, then using the stolen credit cards to make purchases. Specifically, the leader of the group, who was experienced at pickpocketing wallets, would wait in women’s restrooms and steal the wallets of women who hung their purses on the hooks in the stalls. Often, one of the other co-conspirators would create a distraction in an adjacent stall, such as asking for toilet paper, so that the victim would be looking away from her purse. Barner sometimes served as a “lookout” for the leader. Often the leader was able to remove cash and credit cards and return the wallet to the victim’s purse without the victim seeing or suspecting the theft.
Barner and Little, who each participated in the scheme until her arrest in 2012, received stolen credit cards from the leader. The conspirators took the cards to nearby retail stores and used each card until it began to be declined. The conspirators purchased items for their personal use, as well as gift cards or high end merchandise that the leader of the scheme would direct them to buy and would then resell. Barner and Little engaged in the scheme on a regular basis, knew that the credit cards were stolen and knew that other members of the conspiracy were conducting fraudulent transactions as well.
During the course of the conspiracy, Barner and Little obtained goods, services and extensions of credit of between $30,000 and $70,000, and caused losses to or used the identities of between 10 and 50 financial institutions, businesses and individuals.
The defendants each face a maximum sentence of 30 years in prison for bank fraud conspiracy and a mandatory sentence of two years in prison, consecutive to any other sentence imposed, for aggravated identity theft. U.S. District Judge Marvin J. Garbis has scheduled sentencing for Barner on August 2, 2013 and for Little on July 26, 2013.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
United States Attorney Rod J. Rosenstein thanked the U.S. Secret Service, Maryland Transportation Authority Police, Baltimore County Police Department and Baltimore City Police Department for their work in the investigation. Mr. Rosenstein praised Assistant U.S. Attorney Tamera L. Fine, who is prosecuting the case.
Three District Men Plead Guilty to Charges in Deadly 2009 Gun Battle in Northeast Washington-Two Killed, Including A 15-Year-Old Innocent Bystander; Three Others Wounded-Read the Press Release
WASHINGTON – Three men, all from Washington, D.C., pled guilty today to charges stemming from a gun battle in Northeast Washington in which two people were killed, including a 15-year-old innocent bystander, U.S. Attorney Ronald C. Machen Jr. announced.
Sequarn Tibbs, 21, Antonio Barnes, 21, and Earl Jackson, 20, entered the pleas on the day their trial was to begin in the Superior Court of the District of Columbia. Each defendant pled guilty to two counts of voluntary manslaughter, one count of conspiracy to commit assault with a dangerous weapon, one count of assault with a dangerous weapon, and one count of carrying a pistol without a license. The Honorable Herbert B. Dixon, Jr., scheduled sentencing for Tibbs for Aug. 16, 2013. Barnes is to be sentenced on June 28, 2013, and Jackson on July 10, 2013. All three remain in custody. The men face a statutory maximum of 30 years in prison for each of the manslaughter counts and 25 additional years for the other offenses.
According to the government’s evidence, the three defendants were part of a group, known as “Young Savage,” associated with the 37th Street/37th Place neighborhood of Southeast Washington. The violence came after the discovery on Oct. 12, 2009 that a burglary took place in the home of Jackson’s mother, located in the Clay Terrace area of Northeast Washington. A .38-caliber revolver, belonging to a juvenile co-conspirator, was stolen during the burglary.
Late Oct. 12, 2009 and early Oct. 13, 2009, Jackson, Barnes, and others, including Tibbs’s brother, Daquan Tibbs, 18, decided that Clay Terrace residents were responsible for the burglary. The group decided to travel to the home of Jackson’s mother in Clay Terrace to identify and find the people responsible and get the property back - with force, if necessary.
They rode to Clay Terrace in a taxicab, while armed with a .45-caliber semi-automatic pistol, a .40-caliber pistol and a .9-mm pistol. Once there, they decided to confront Clay Terrace individuals who were outside in the neighborhood. They demanded the .38-caliber revolver, and, although no money had been determined to be taken, they also asked for money.
A male from the Clay Terrace group advised that they did not know who was responsible for the theft, but opined that it was probably a “young’un.” Later, an older Clay Terrace resident came to the Jacksons’ house, and asked about the situation. This person also speculated it was probably “one of the little young’uns,” and left. The older man later came back and returned the gun, not saying where he got it. He said that he did not know anything about the missing money.
Sequarn Tibbs, meanwhile, joined the group in Clay Terrace. Throughout the day, several members of the group smoked marijuana. At one point, Jackson and the juvenile co-conspirator discussed whether they should wait until school was over to see if they could find the “young’uns” responsible for the theft/burglary.
Shortly before 4 p.m. on Oct. 13, 2009, the defendants and others in the group left the house. The group took their guns with them, which included a .45-caliber pistol, a .40-caliber pistol, a .38-caliber revolver, and a .9-mm pistol. They headed to a courtyard known in Clay Terrace as “Briscoe Court,” in the 300 block of 53rd Street NE. A gun battle soon began, with Sequarn Tibbs firing the first shot. During the gunfire, Daquan Tibbs was shot to death by a weapon fired by the juvenile co-conspirator. A 15-year-old boy, Davonta Artis – an innocent bystander – was shot and also killed. Three others were wounded.
In August of 2010, all three defendants learned that warrants had been issued for their arrests, and they fled the Washington, D.C. area to avoid being apprehended. Tibbs was captured on Sept. 21, 2010 in New York. On March 14, 2011, Barnes was arrested on an unrelated matter in Gwinnett County, Ga., but he used a false name to avoid apprehension in this case. He was bailed out of jail before law enforcement learned his true identity. However, on Jan. 13, 2012, he and Jackson were arrested in North Carolina.
In announcing the pleas, U.S. Attorney Machen commended the work of the detectives, officers and mobile crime scene technicians who investigated the case for the Metropolitan Police Department. He acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including former Assistant U.S. Attorneys Sean Tonolli, J.P. Cooney, Sharad Khandelwal and Heather Carlton; Paralegal Specialists Kendra Johnson, Alesha Matthews-Yette, Kwasi Fields, Kelly Blakeney, Sharon Newman, Fern Rhedrick and Marian Russell; Litigation Technology Specialist Joshua Ellen; Victim/Witness Advocates Marcia Rinker and Katina Adams-Washington, and Investigative Analysts Larry Grasso, Zachary McMenamin, Durand Odom, and John Marsh. Finally he praised the work of Assistant U.S. Attorneys Reagan Taylor and Deborah Sines, who are prosecuting the matter.
13-157The Executive Office for Immigration Review Swears in Five Immigration JudgesRead the Press Release
FALLS CHURCH, Va. – The Executive Office for Immigration Review (EOIR) today announced the investiture of five immigration judges. Chief Immigration Judge Brian M. O’Leary presided over the investiture during a ceremony held at EOIR’s headquarters on May 3, 2013.
After a thorough application process, Attorney General Eric Holder appointed Timothy R. Everett, J. Traci Hong, Amy T. Lee, Elizabeth H. McGrail and John C. Odell to their new positions. “EOIR is committed to continuing to apply its resources toward its primary mission,” said O’Leary. “The arrival of these five professionals brings our immigration judge corps to nearly 260, all of whom will work to help mitigate EOIR’s pending caseload.”
Biographical information follows.
Timothy R. Everett, Immigration Judge, Los Angeles Immigration Court
Attorney General Eric Holder appointed Judge Everett in April 2013. Judge Everett received a bachelor of arts degree in 1980 from Louisiana State University; a master of arts degree and a juris doctorate in 1986 from Tulane University and Tulane University Law School respectively; and a master of studies in environmental law in 2000 from Vermont Law School. From March 2009 to April 2013, Judge Everett served as an assistant chief counsel, Department of Homeland Security, U.S. Immigration and Customs Enforcement, Los Angeles. From January 2000 to March 2009, he was a solo practitioner in Los Angeles. During that time from March 2000 to December 2000, he was an interim directing attorney for the Central American Resource Center in Los Angeles. From August 1999 to December 1999, Judge Everett worked as a legal intern at the National Wildlife Foundation in Washington, D.C. From May 1996 to August 1998, he was a solo practitioner in Los Angeles. From May 1991 to May 1996, Judge Everett served as a directing attorney of the Domestic Legal Department at El Rescate Legal Services in Los Angeles. From April 1990 to May 1991, he was a staff attorney at Ayuda Legal Services in Washington, D.C. From 1989 to 1990, he served as an associate attorney at the Law Office of William Van Wyke in Washington, D.C. Judge Everett is a member of the State Bar of California and the Florida Bar.
J. Traci Hong, Immigration Judge, Los Angeles Immigration Court
Attorney General Eric Holder appointed Judge Hong in April 2013. Judge Hong received a bachelor of arts degree in 1992 from The University of Texas at Austin and a juris doctorate in 1995 from The University of Texas School of Law. From February 2011 to April 2013, she served as a senior policy advisor for the Department of Homeland Security, Office for Civil Rights and Civil Liberties in Washington, D.C. From March 2007 to January 2011, Judge Hong served as counsel for the U.S. House of Representatives, Committee on the Judiciary, Subcommittee on Immigration, Citizenship, Refugees, Border Security, and International Law. From June 2003 to March 2007, she worked for the Asian American Justice Center in Washington, D.C. as an immigration staff attorney and the immigration program director. From January 2000 to May 2003, Judge Hong was a staff attorney for the American Immigration Law Foundation in Washington, D.C. From August 1995 to December 1999, she practiced immigration law with the law firm of Tidwell Swaim & Associates, P.C., in Dallas. Judge Hong is a member of the State Bar of Texas.
Amy T. Lee, Immigration Judge, Los Angeles Immigration Court
Attorney General Eric Holder appointed Judge Lee in April 2013. Judge Lee received a bachelor of arts degree in 1992 from Stanford University; a juris doctorate in 1995 from University of the Pacific, McGeorge School of Law; and a master of public administration in 2001 from California State University, East Bay. From February 2008 to April 2013, she was an attorney with Fallon, Bixby, Cheng & Lee, Inc. in San Francisco. From January 2006 to February 2008, Judge Lee was an attorney with the Law Offices of David M. Lederman in Antioch, Calif. From January 2005 to December 2005, she was a solo practitioner in Oakland, Calif. From January 2001 to January 2005, Judge Lee served as senior corporate counsel for PeopleSoft, Inc. From September 1995 to December 2000, she served as an assistant district counsel for the Department of Justice, U.S. Immigration and Naturalization Service, in San Francisco. Judge Lee is a member of the State Bar of California.
Elizabeth H. McGrail, Immigration Judge, Los Angeles Immigration Court
Attorney General Eric Holder appointed Judge McGrail in April 2013. Judge McGrail received a bachelor of arts degree in 1985 from Vanderbilt University and a juris doctorate in 1989 from the College of William and Mary, Marshall-Wythe School of Law. From 2008 to April 2013, she served as legal director at Capital Area Immigrants’ Rights Coalition (CAIR Coalition) in Washington, D.C. From 2007 to 2008, Judge McGrail served as an of counsel for the Law Office of Richard S. Bromberg in Washington, D.C. From 2005 to 2007, she served as the detention project director and legal consultant for CAIR Coalition. From 1994 to 2005, Judge McGrail was a solo practitioner in Washington, D.C. From 1991 to 1994, she was an associate at Wasserman, Mancini & Chang in Washington, D.C. From 1989 to 1990, Judge McGrail was an associate at Brown & Wood in New York. Judge McGrail is a member of the District of Columbia Bar.
John C. Odell, Immigration Judge, Tacoma Immigration Court
Attorney General Eric Holder appointed Judge Odell in April 2013. Judge Odell received a bachelor of science degree in 1983 from the United States Coast Guard Academy and a juris doctorate in 1994 from the Seattle University School of Law. From October 2007 to April 2013, he served as an assistant chief counsel, Department of Homeland Security, U.S. Immigration and Customs Enforcement, in Seattle, Wash., where, from December 2008 to December 2010, he served as a special assistant U.S. attorney. From 1997 to 2007, Judge Odell served in the U.S. Coast Guard where he held various legal positions, including staff judge advocate, 13th Coast Guard District, Seattle, and Coast Guard Academy, New London, Conn.; military judge, U.S. Coast Guard; senior defense counsel, Naval Legal Services Office, Bremerton, Wash.; and assistant legal officer, 13th Coast Guard District. Judge Odell is a member of the Washington State Bar.
- EOIR -
The Executive Office for Immigration Review (EOIR) is an agency within the Department of Justice. Under delegated authority from the Attorney General, immigration judges and the Board of Immigration Appeals interpret and adjudicate immigration cases according to United States immigration laws. EOIR’s immigration judges conduct administrative court proceedings in immigration courts located throughout the nation. They determine whether foreign-born individuals—whom the Department of Homeland Security charges with violating immigration law—should be ordered removed from the United States or should be granted relief from removal and be permitted to remain in this country. The Board of Immigration Appeals primarily reviews appeals of decisions by immigration judges. EOIR’s Office of the Chief Administrative Hearing Officer adjudicates immigration-related employment cases. EOIR is committed to ensuring fairness in all of the cases it adjudicates.
Executive Office for Immigration ReviewTaiwanese Father and Son Arrested for Allegedly Violating US Laws to Prevent Proliferation of Weapons of Mass DestructionRead the Press Release
CHICAGO — A resident of Taiwan, who the U.S. government has linked to the supply of weapons machinery to North Korea, and his son, who resides in suburban Chicago, are facing federal charges here for allegedly conspiring to violate U.S. laws designed to thwart the proliferation of weapons of mass destruction, federal law enforcement officials announced today. HSIEN TAI TSAI, also known as “Alex Tsai,” who is believed to reside in Taiwan, was arrested last Wednesday in Tallinn, Estonia, while his son, YUEH-HSUN Tsai, also known as “Gary Tsai,” who is from Taiwan and is a legal permanent resident in the U.S., was arrested the same day at his home in Glenview, Ill.
Gary Tsai, 36, was ordered held in custody pending a detention hearing at 1:30 p.m. today before Magistrate Judge Susan Cox in U.S. District Court in Chicago. Alex Tsai, 67, remains in custody in Estonia pending proceedings to extradite him to the United States.
Both men were charged in Federal Court in Chicago with three identical offenses in separate complaints that were filed previously and unsealed following their arrests. Each was charged with one count of conspiring to defraud the United States in its enforcement of laws and regulations prohibiting the proliferation of weapons of mass destruction, one count of conspiracy to violate the International Emergency Economic Powers Act (IEEPA) by conspiring to evade the restrictions imposed on Alex Tsai and two of his companies by the U.S. Treasury Department, and one count of money laundering.
The arrests and charges were announced by Gary S. Shapiro, United States Attorney for the Northern District of Illinois; Cory B. Nelson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; Gary Hartwig, Special Agent-in-Charge of Homeland Security Investigations in Chicago; and Ronald B. Orzel, Special Agent-in-Charge of the U.S. Department of Commerce, Bureau of Industry and Security, Office of Export Enforcement, Chicago Field Office. The Justice Department’s National Security Division and Office of International Affairs assisted with the investigation. U.S. officials thanked the Estonian Internal Security Service and the Estonian Prosecutor’s Office for their cooperation.
According to both complaint affidavits, agents have been investigating Alex and Gary Tsai, as well as Individual A (a Taiwanese associate of Alex Tsai), and a network of companies engaged in the export of U.S. origin goods and machinery that could be used to produce weapons of mass destruction. Alex and Gary Tsai and Individual A are associated with at least three companies based in Taiwan – Global Interface Company, Inc., Trans Merits Co., Ltd., and Trans Multi Mechanics Co., Ltd. – that have purchased and then exported, and attempted to purchase and then export, from the United States machinery used to fabricate metals and other materials with a high degree of precision.
On Jan. 16, 2009, under Executive Order 13382, which sanctions proliferators of weapons of mass destruction and their supporters, the Treasury Department’s Office of Foreign Assets Control (OFAC) designated Alex Tsai, Global Interface, and Trans Merits as proliferators of weapons of mass destruction, isolating them from the U.S. financial and commercial systems and prohibiting any person or company in the United States from knowingly engaging in any transaction or dealing with Alex Tsai and the two Taiwanese companies.
In announcing the January 2009 OFAC order, the Treasury Department said that Alex Tsai was designated for providing, or attempting to provide, financial, technological, or other support for, or goods or services in support of the Korea Mining Development Trading Corporation (KOMID), which was designated as a proliferator by President George W. Bush in June 2005. The Treasury Department asserted that Alex Tsai “has been supplying goods with weapons production capabilities to KOMID and its subordinates since the late 1990s, and he has been involved in shipping items to North Korea that could be used to support North Korea’s advanced weapons program.” The Treasury Department further said that Global Interface was designated “for being owned or controlled by Tsai,” who is a shareholder of the company and acts as its president. Tsai is also the general manager of Trans Merits Co. Ltd., which was designated for being a subsidiary owned or controlled by Global Interface Company Inc. http://www.treasury.gov/press-center/press-releases/Pages/hp1359.aspx
After the OFAC designations, Alex and Gary Tsai and Individual A allegedly continued to conduct business together, but attempted to hide Alex Tsai’s and Trans Merit’s involvement in those transactions by conducting business under different company names, including Trans Multi Mechanics. For example, by August 2009 – approximately 8 months after the OFAC designations – Alex and Gary Tsai, Individual A and others allegedly began using Trans Multi Mechanics to purchase and export machinery on behalf of Trans Merits and Alex Tsai. Specifically, the charges allege that in September 2009 they purchased a Bryant center hole grinder from a U.S. company based in suburban Chicago, and exported it to Taiwan using the company Trans Multi Mechanics. A Bryant center hole grinder is a machine tool used to grind a center hole, with precisely smooth sides, through the length of a material.
The charges further allege that by at least September 2009, Gary Tsai had formed a machine tool company named Factory Direct Machine Tools, in Glenview, Ill., which was in the business of importing and exporting machine tools, parts, and other items to and from the United States. However, the charges allege that Alex Tsai and Trans Merits were active partners in Factory Direct Machine Tools, in some instances procuring the goods for import to the United States for Factory Direct Machine Tool customers.
Violating IEEPA carries a maximum penalty of 20 years in prison and a $1 million fine; money laundering carries a maximum penalty of 20 years in prison and a $500,000 fine; and conspiracy to defraud the United States carries a maximum penalty of five years in prison and a $250,000 fine. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines. The government is being represented by Assistant U.S. Attorneys Patrick Pope and Brian Hayes.
The public is reminded that a complaint is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Alex Tsai Complaint
Gary Tsai ComplaintState Senator from Brooklyn Charged with Embezzlement and Obstruction of JusticeRead the Press Release
An indictment was unsealed this morning in federal court in Brooklyn charging New York State Senator John Sampson with two counts of embezzlement, five counts of obstruction of justice and two counts of making false statements to the Federal Bureau of Investigation.1 Since 1997, Sampson has served in the New York State Senate (the “Senate”) representing the 19th Senate District in southeastern Brooklyn. From June 2009 to December 2012, Sampson was the leader of the Democratic Conference of the Senate. From January 2011 to December 2012, Sampson was also the Senate Minority Leader. Sampson has also served as the chairman of the Senate Ethics Committee and the Senate Judiciary Committee. Sampson will be arraigned later today before United States Magistrate Judge Viktor V. Pohorelsky at the U.S. Courthouse, 225 Cadman Plaza East, Brooklyn, New York.
The indictment 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 (“FBI”), New York Field Office.
“The voters of New York State rightfully expect their elected officials to represent the voters’ interests, not to trade on their positions of power to line their own pockets,” stated United States Attorney Lynch. “As charged in the indictment, for years, Senator John Sampson abused his position of public trust to steal from New Yorkers suffering from home foreclosure and from the very county he was elected to represent. But the former Senate ethics leader didn’t stop there. Senator Sampson allegedly stole that money to fund his own ambition to become Brooklyn’s top state prosecutor, then engaged in an elaborate obstruction scheme to hide his illegal conduct, going so far as to counsel lies and the hiding of evidence.” United States Attorney Lynch thanked the FBI and the Federal Deposit Insurance Corporation Office of the Inspector General for their investigative efforts, as well as the Public Integrity Section and the Office of the Inspector General of the Department of Justice for their assistance in this case.
FBI Assistant Director-in-Charge Venizelos stated, “Today John Sampson has been added to the list of recently indicted New York elected officials. We could view this as an achievement for the FBI and federal prosecutors. But we share what may well be the concern of many New Yorkers that ‘incumbent’ and ‘defendant’ cannot be accepted as interchangeable. Elected officials are referred to as ‘public servants,’ and that should not be confused with ‘self-serving.’ The people of New York have a right to demand, at a bare minimum, that their elected representatives obey the law.”
I. The Embezzlement Scheme
As charged in the indictment, Sampson is an attorney licensed to practice law in the State of New York, and his law practice has included legal work involving the sale of foreclosed properties. Beginning in the late 1990’s, Sampson served as a court-appointed referee for foreclosure proceedings conducted by the Kings County Supreme Court. As referee, Sampson controlled escrow accounts holding proceeds of foreclosure sales of Brooklyn properties. Between 1998 and 2008, Sampson embezzled approximately $440,000 in surplus funds from the foreclosure sales of four Brooklyn properties. The prior owners of the Brooklyn properties, and other parties with a lawful interest, had a right to receive the funds embezzled by Sampson. Sampson indicated that he had illegally diverted the stolen funds to pay expenses arising from his unsuccessful run for Kings County District Attorney in 2005.
As alleged in the indictment, in July 2006, Sampson asked an associate who worked in the real estate industry (the “Associate”) for $188,500. The Associate agreed and, at Sampson’s direction, provided him with these funds in the form of three bank checks payable to third parties (the “Associate Transaction”). Sampson characterized the Associate Transaction to the Associate as a loan that he would repay, the proceeds of which he would use to cover the tracks of his embezzlement before it was uncovered. However, Sampson took this “loan” without written documentation or any rate of interest. Sampson never repaid the Associate. Further, Sampson concealed the Associate Transaction by lying on his Senate financial disclosure forms, falsely claiming that he had incurred no liabilities in excess of $5,000 or gifts or income in excess of $1,000.
The indictment further alleges that Sampson used a portion of the Associate Transaction funds to pay back some of the money he embezzled from two of the escrow accounts. However, Sampson never repaid any of the approximately $160,000 he stole from the two escrow accounts that are the subject of the embezzlement charges in the indictment.
II. John Sampson’s Obstruction of Justice
In the summer of 2011, the United States Attorney’s Office for the Eastern District of New York (the “USAO”) filed bank and wire fraud charges against the Associate in relation to a mortgage fraud scheme (the “Mortgage Fraud Case”). As charged in the indictment, after the Associate’s arrest, Sampson engaged in a multifaceted scheme to obstruct justice, so as to prevent the Associate from cooperating with law enforcement authorities and disclosing Sampson’s criminal conduct. Evidence of Sampson’s obstructive conduct includes intercepted phone calls from Sampson’s cellular telephone.
A. John Sampson’s Use of a USAO Employee to Obstruct Justice
According to the indictment, Sampson attempted to obtain confidential, nonpublic information regarding the Mortgage Fraud Case. Soon after the Associate’s arrest, Sampson informed the Associate that he knew an individual who, at that time, was an administrative employee in the USAO (the “Employee”). Sampson told the Associate that he could persuade the Employee to give inside information that would assist the Associate’s defense in the Mortgage Fraud Case.
As alleged in the indictment, Sampson then asked the Employee to determine whether the USAO was conducting a criminal investigation of Sampson and whether certain mortgage fraud defendants were cooperating with the government’s investigation. Sampson told the Associate that he was attempting to determine the identities of cooperating witnesses in the Mortgage Fraud Case, and that if they were able to identify those witnesses, Sampson could arrange to “take them out.”
According to the indictment, when the Associate asked Sampson about his efforts to use the Employee to obtain information about the Mortgage Fraud Case, Sampson was reluctant to discuss those illegal efforts over the telephone. For example, while meeting with the Associate in November 2011, Sampson stated, “I can’t talk on the phone . . . . From now on, our conversation is, ‘I don’t have no contacts, you don’t know nothing.’ When we talk, that’s how we talk.”
The indictment alleges that FBI agents later confronted the Employee concerning his contacts with Sampson. Immediately thereafter, agents searched the Employee’s office and located a slip of paper which contained the handwritten names of several individuals who were defendants in proceedings related to the Mortgage Fraud Case. The Employee was then suspended and subsequently terminated from his employment at the USAO.
B. John Sampson’s Witness and Evidence Tampering
As charged in the indictment, Sampson also obstructed justice by directing the Associate to withhold evidence regarding the Associate Transaction from the government. During a meeting on February 22, 2012, the Associate told Sampson that the federal government had subpoenaed the Associate’s business records, including a check register page that documented the Associate Transaction (the “Check Register Page”). Before disclosing the Check Register Page to the government, the Associate showed it to Sampson. At that time, Sampson took possession of the Check Register Page, examined it, and stated, “That’s a problem . . . I mean for me.”
Sampson instructed the Associate not to disclose the Check Register Page to the government. When the Associate stated that it might be a problem to withhold the document from the government, Sampson told the Associate to claim that the Associate did not maintain all of the Associate’s records. Sampson instructed, “Don’t say you don’t have it. Just say you don’t know. I don’t want you to lie, just say you don’t know.”
In addition, Sampson told the Associate to remove other items from the business records the Associate provided to the government, to make it appear as though the Associate’s records were incomplete. Sampson counseled the Associate to falsely claim that the Associate Transaction was payment for legal work Sampson had performed. Later during this conversation, Sampson instructed the Associate that, if the government asked whether the Associate ever loaned Sampson money, the Associate should say “No.” Sampson also suggested that, alternatively, the Associate could falsely claim that the Associate “forgave” the Associate Transaction “loan.” Sampson kept the Check Register Page during and after this meeting, and never returned it to the Associate.
III. John Sampson’s False Statements to the FBI
On July 27, 2012, FBI Special Agents interviewed Sampson outside his Brooklyn residence. When shown a copy of the Check Register Page, which he had taken from the Associate on February 22, 2012, Sampson stated that the document “didn’t ring a bell,” that he “didn’t have a recollection from it,” and that he did not recall seeing it previously. Sampson admitted that he had asked the Employee for information on the Mortgage Fraud Case, but claimed that he only requested public information from the Employee, such as the name of the judge assigned to the Mortgage Fraud Case. When asked why he would request public information from an employee of the USAO, when Sampson himself was an attorney, Sampson stated that he was not “good” with computers. At the conclusion of the interview, the agents advised Sampson that he had lied to federal agents, which constituted a federal crime. When asked whether he wished to revise his statement, Sampson stated, “Not everything I told you was false.”
If convicted, Sampson faces up to 10 years of imprisonment for each embezzlement charge, up to 10 years of imprisonment for a charge of obstruction of justice under 18 U.S.C. § 1503(a), up to 20 years of imprisonment for each of the remaining four charges related to obstruction of justice, and up to 5 years of imprisonment for each false statement charge, as well as restitution, forfeiture, and fines.
The government’s case is being prosecuted by Assistant United States Attorneys Daniel Spector, Paul Tuchmann, and Alexander Solomon.
The Defendant:
JOHN L. SAMPSON
Age: 47
Residence: Brooklyn, New York_____________________________
1The charges contained in the indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty.
Singer and Actress Lauryn Hill Sentenced to Prison for Failing to File Tax Returns for More Than $2.3 Million in IncomeRead the Press Release
NEWARK, N.J. – Lauryn N. Hill, the Grammy-winning singer and actress, was sentenced today to three months in prison and three months of home confinement with electronic monitoring for not reporting more than $2.3 million in income by intentionally failing to file tax returns for five years, U.S. Attorney Paul J. Fishman announced.
Hill, 37, of South Orange, N.J., previously pleaded guilty to an Information charging her with three counts of failing to file tax returns with the IRS. The sentence was imposed by U.S. Magistrate Judge Madeline Cox Arleo in Newark federal court.
According to documents filed in this case and statements made in court:
In addition to being an entertainer, Hill owned and operated four sub-chapter S corporations, and her primary source of income was royalties from the recording and film industries. During 2005, 2006 and 2007, Hill received more than $1.8 Million in income from those sources, but didn’t file her tax returns for those years.Although Hill pleaded guilty to charges specifically related to those tax years, her sentence also takes into account additional income and tax losses for 2008 and 2009 – when she also failed to file federal returns – along with her outstanding tax liability to the state of New Jersey, for a total income of approximately $2.3 million and total tax loss of approximately $1,006,517.
In addition to the prison term and home confinement, Judge Arleo sentenced Hill to serve a year of supervised release and ordered her to pay a $60,000 fine in addition to her restitution to the IRS. Judge Arleo also ordered Hill to fully cooperate with the IRS, including payment of outstanding interest and penalties on her tax obligations.U.S. Attorney Fishman credited special agents with IRS-Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen, with the investigation.
The government is represented by Assistant U.S. Attorney Sandra L. Moser of the U.S.
Defense counsel: Nathan J. Hochman Esq., Santa Monica, Calif.
Attorney’s Office Special Prosecutions Division in Newark.
13-181Shiprock Man Pleads Guilty to Aiding and Abetting an Armed Robbery on the Navajo Indian ReservationRead the Press Release
ALBUQUERQUE – Nielson McKensley, 49, an enrolled member of the Navajo Nation who resides in Shiprock, N.M., pleaded guilty this morning to an indictment charging him with aiding and abetting an armed robbery in Indian Country. Under the terms of his plea agreement, McKensley will be sentenced to a term of 46 to 57 months in prison.
McKensley was arrested on Nov. 13, 2012, on a criminal complaint charging him with being an accomplice to an armed robbery of a residence in Shiprock on Oct. 26, 2012. He subsequently was indicted on that same charge.
According to court records, McKensley agreed to assist Randy Coolidge, 46, rob the residence of an acquaintance (victim) in the early hours of Oct. 27, 2012, by driving Coolidge to the residence and helping him with the robbery. After putting duct tape over his face to conceal his identity, Coolidge approached the residence armed with a pistol. As Coolidge tried to push his way into the residence, the victim attempted to take the pistol away from Coolidge. As the two men fought over the pistol, the pistol discharged and Coolidge was shot in the chest and stomach. Coolidge subsequently died of his wounds. The victim then realized that another man (McKensley), whose face also was covered with black duct tape and who was armed with a steel pipe, was standing by his door. After attempting unsuccessfully to drag Coolidge from the residence, McKensley left Coolidge behind and drove away. Officers initiated the investigation leading to McKensley’s arrest after Coolidge’s body was found shortly thereafter.
During today’s plea hearing, McKensley admitted driving Coolidge to the victim’s residence knowing that Coolidge intended to take items of value from the victim by force and violence. McKensley also admitted that he intended to help Coolidge rob the victim.
McKensley has been in federal custody since his arrest and remains detained pending his sentencing hearing, which has yet to be scheduled.
This case was investigated by Albuquerque and Farmington offices of the FBI and the Shiprock office of the Navajo Nation Division of Public Safety, and is being prosecuted by Assistant U.S. Attorney Mark T. Baker.
Serial Bank Robber Pleads Guilty to Multiple HoldupsRead the Press Release
MINNEAPOLIS— Earlier today in federal court in St. Paul, a 49-year-old Minneapolis man, previously dubbed by law enforcement as “the man-in-black bank robber,” pleaded guilty to five bank robberies that occurred in Minnesota between March 9, 2011, and January 3, 2012. In entering his plea, Mark Edward Wetsch also admitted responsibility for 25 additional bank robberies that occurred in 2011. Previously, on April 22, 2013, he pleaded guilty to one count of armed bank robbery, which occurred on January 3, 2012, in Brewster, Minnesota. He entered his plea today before United States District Court Judge Susan Richard Nelson.
Pursuant to a plea agreement, Wetsch pled guilty to robbing five banks, in each case admitting that he wore a black mask and brandished a firearm believed to be real. Wetsch stole $9,350 from the First National Bank in Hastings on December 27, 2011; $3,634 from the Wells Federal Bank in St. Peter on December 22, 2011; $3,801 from the Premier Bank in Albertville on November 9, 2011; $9,445 from the Merchants Bank in Hampton on May 13, 2011; and $3,050 from the United Educators Credit Union in Eden Prairie on April 26, 2011. In addition to the 6 bank robberies for which Wetsch pled guilty, Wetsch admitted taking a total of more than $110,000 in the 31 bank robberies that he committed in 2011.Those additional robberies include—
December 29, 2011 Glenwood State Bank of Alexandria $3,200 stolen
December 20, 2011 Franklin Bank of Minneapolis 2,350 stolen
December 14, 2011 M&I Bank of St. Paul 1,645 stolen
December 7, 2011 Premier Bank of Bloomington 850 stolen
December 5, 2011 US Bank of Hopkins 3,106 stolen
November 30, 2011 Central Bank of Minneapolis 803 stolen
November 22, 2011 Bremer Bank of Minneapolis 2,907 stolen
November 13, 2011 TCF Bank of Arden Hills 4,900 stolen
November 9, 2011 Richfield Bloomington Credit Union attempted robbery
November 4, 2011 First National Bank of Lakes, Richfield 8,823 stolen
November 1, 2011 Paragon Bank of Shakopee 1,444 stolen
October 22, 2011 Prior Lake State Bank, Prior Lake 7,200 stolen
June 13, 2011 First National Bank of Minnesota of
Gaylord 6,946 stolen
June 3, 2011 Sherburne State Bank, Clear Lake 3,000 stolen
April 26, 2011 Wells Fargo Bank, Faribault 2,225 stolen
April 26, 2011 Richfield Bloomington Credit Union attempted robbery
April 14, 2011 US Federal Credit Union of Northfield 5,280 stolen
April 11, 2011 Sterling State Bank of Savage 1,885 stolen
March 9, 2011 Klein Bank of Cologne 11,400 stolen
March 7, 2011 Bremer Bank of Minneapolis 2,030 stolen
February 17, 2011 First National Bank of Orono 4,000 stolen
February 10, 2011 United Educators Credit Union of
Columbia Heights 1,500 stolen
February 9, 2011 US Bank of St. Paul 1,000 stolen
February 4, 2011 Central Bank of Minneapolis 1,056 stolen
January 11, 2011 Bremer Bank of Minneapolis 6,000 stolen
Wetsch remains in custody. Pursuant to the plea agreement, the government is seeking a prison sentence of 14 years. Since the federal criminal justice system does not have parole, defendants serve virtually their entire sentence behind bars. Judge Nelson will determine Wetsch’s actual sentence at a future hearing, not yet scheduled.This case is the result of an investigation by the Federal Bureau of Investigation and the police departments of Alexandria, Bloomington, Columbia Heights, Eden Prairie, Faribault, Gaylord, Hastings, Hopkins, Minneapolis, Northfield, Orono, Prior Lake, Richfield, Savage, St. Paul, St. Peter, and Shakopee; the sheriff offices of Carver, Dakota, Hennepin, Ramsey, Nicollet, Nobles, Sibley, and Wright counties, with assistance from the Minnesota State Patrol. The case is being prosecuted by Assistant U.S. Attorneys Deidre Y. Aanstad and Kevin S. Ueland.
Rare Glass Bottle Returned to Wistar InstituteRead the Press Release
WILMINGTON, Del. – Charles M. Oberly, III, United States Attorney for the District of Delaware, and Edward J. Hanko, Special Agent in Charge, Philadelphia Field Division, Federal Bureau of Investigation (FBI), announced today the return of a rare glass bottle to the Wistar Institute in Philadelphia, Pennsylvania. The bottle was made at the first successful glass factory in the American Colonies, established by Caspar Wistar near Alloway, New Jersey, in 1739. The bottle bears the initials of Richard Wistar, the eldest son of Caspar Wistar. It is one of only two known existing Caspar Wistar bottles with the “RW” seal. Caspar Wistar's bottles were made of impure green glass using a formula in use since the Middle Ages. Wistar’s bottles were designed to resemble popular European bottles of the day.
The bottle was granted to the Wistar Institute by General Isaac J. Wistar, great nephew of Caspar Wistar, in 1905. The bottle was taken from the Wistar collection without permission after 1958. Thereafter, the bottle was purchased and sold on several occasions, without actual knowledge that it was stolen. In 2011, the bottle was discovered in a museum exhibit, on loan from its purported owner. The purported owner ultimately agreed to its return to the Wistar Institute. The Caspar Wistar bottle is pictured below.
United States Attorney Charles M. Oberly, III said, “The return of this rare bottle to the Wistar Institute is the result of the joint efforts of this office and the FBI Art Crime Team. I commend all parties for their efforts in producing this positive outcome. Artifacts like this glass bottle are an important part of American history. Unfortunately, this bottle was stolen and entered the stream of commerce. I am pleased it can be returned to its rightful owner.”This matter was investigated by David L. Hall, Assistant United States Attorney, Special Prosecutor, FBI Art Crime Team. For further information Assistant United States Attorney David L. Hall at (302) 573-6277.
Pittsburgh Man Sentenced to Prison for Scheme That Defrauded Sellers, ShippersRead the Press Release
PITTSBURGH, Pa. - On Friday, May 3, a Pittsburgh man was sentenced in federal court to 24 months imprisonment, to be followed by three years of supervised release, on his conviction of mail fraud, United States Attorney David J. Hickton announced today.
United States District Judge Arthur J. Schwab imposed the sentence on Ronald B. Halpern, 67.
According to information presented to the court, Halpern operated a business known as A & R Services, Inc., from his apartment. On behalf of A & R Services, Halpern negotiated the purchase, sale, and delivery of linens, sports-related merchandise, and novelty items. During the period April 2007 through September 2007, Halpern and others devised and executed a scheme to defraud manufacturers, wholesale distributors, customers and interstate shipping companies of money and property totaling in excess of $700,000. Halpern's fraud scheme included obtaining merchandise for resale on A & R Services behalf by applying for extensions of credit from the various manufacturers, wholesalers, and shipping companies based on false financial information. Halpern had no intention of paying for the merchandise or its shipment after receipt.
In addition to the sentence of imprisonment, Halpern was ordered to pay restitution to 13 victims in the total amount of $709,655.21.
Assistant United States Attorney Carolyn J. Bloch prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Federal Bureau of Investigation and the Office of the United States Trustee for the investigation leading to the successful prosecution of Halpern.
Pedophile Sentenced to 14 Years in Federal Prison on Child Porn ConvictionRead the Press Release
Andrew Oldaker collected more than 600 pictures and videos of child pornography
HUNTINGTON, W.Va. – A Parkersburg pedophile who possessed hundreds of pictures and videos of child pornography was sentenced today to 14 years in federal prison followed by a lifetime of supervised release, announced U.S. Attorney Booth Goodwin. Andrew Tracy Oldaker, 37, of Parkersburg, W.Va., previously pleaded guilty to the child pornography charges in December 2012.
U.S. Attorney Booth Goodwin said, “Pedophiles like Mr. Oldaker are logging into the Internet to steal the innocence of children. It’s absolutely despicable and it’s infuriating.”
Goodwin continued, “I will continue to spare no effort to make sure that the perpetrators who exploit children are brought to justice.”
Oldaker collected more than 600 pictures and videos of children having sex or performing sexual acts. The child pornography was found on Oldaker’s computer after he downloaded it from the Internet. Oldaker used the peer-to-peer file sharing program Frostwire to download, receive, and share the child pornography.
Oldaker was previously convicted in August 1999 in the Circuit Court of Barbour County, West Virginia of first degree sexual abuse.
The Federal Bureau of Investigation West Virginia Cyber Crimes Task Force, the Nitro Police Department, the Parkersburg Police Department, the Kanawha County Sheriff’s Department and the Charleston Police Department conducted the investigation. Assistant United States Attorney Lisa Johnston handled the prosecution. The sentence was handed down by Chief United States District Judge Robert C. Chambers in Huntington.
Since January 2012, twenty-two defendants have been convicted as part of U.S. Attorney Goodwin’s ongoing initiative to combat child sexual exploitation and abuse in the Southern District of West Virginia. Sixteen defendants have been sentenced to a total of more than 51 years (819 months, to be exact) in federal prison. The remaining six defendants currently await sentencing.
Patient Recruiter of Miami Home Health Company <br /> Sentenced to 37 Months in Prison for Role in $20 Million Health Care Fraud SchemeRead the Press Release
A patient recruiter for a Miami health care company was sentenced today to serve 37 months in prison for his participation in a $20 million Medicare fraud scheme, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; Michael B. Steinbach, Special Agent in Charge of the FBI’s Miami Field Office; and Special Agent in Charge Christopher B. Dennis of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Office of Investigations Miami Office.
Manuel Lozano, 65, was sentenced by U.S. District Judge Joan A. Lenard in the Southern District of Florida. In addition to his prison term, Lozano was sentenced to serve two years of supervised release and ordered to pay $1,851,000 in restitution, jointly and severally with co-conspirators.
In February 2013, Lozano pleaded guilty to one count of conspiracy to receive health care kickbacks.
According to court documents, Lozano was a patient recruiter who worked for Serendipity Home Health, a Miami home health care agency that purported to provide home health and therapy services to Medicare beneficiaries.
According to court documents, from approximately April 2007 through March 2009, Lozano recruited patients for Serendipity, and in doing so he solicited and received kickbacks and bribes from the owners and operators of Serendipity in return for allowing the company to bill the Medicare program on behalf of the patients he recruited. These Medicare beneficiaries were billed for home health care and therapy services that were medically unnecessary and/or not provided.
From approximately January 2006 through March 2009, Serendipity submitted approximately $20 million in claims for home health services that were not medically necessary and/or not provided, and Medicare paid approximately $14 million for these fraudulent claims. As a result of Lozano’s participation in the illegal scheme, the Medicare program was fraudulently billed more than $1 million but less than $2.5 million for purported home health care services.
In a related case, on June 21, 2012, Ariel Rodriguez and Reynaldo Navarro, the owners and operators of Serendipity, were sentenced to 73 and 74 months in prison, respectively, and ordered to pay $14 million in restitution and severally with each other and their co-defendants, Melissa Rodriguez and Ysel Salado. Ariel and Melissa Rodriguez, Navarro and Salada each pleaded guilty in March 2012 to one count conspiracy to commit health care fraud.
This case is being prosecuted by Assistant Chief Joseph S. Beemsterboer of the Criminal Division’s Fraud Section. The case was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,480 defendants who have collectively billed the Medicare program for more than $4.8 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
Olathe Man Pleads Guilty to Possessing More Than 12,000 Child Porn ImagesRead the Press Release
KANSAS CITY, KAN. – A man from Olathe, Kan., has pleaded guilty to possessing child pornography, U.S. Attorney Barry Grissom said today.
James Christmas, 45, Olathe, Kan., pleaded guilty to one count of possessing child pornography. In his plea, he admitted he possessed more than 12,000 images and 26 videos of child pornography on computer media. The investigation began in September 2010 when his estranged wife told the Olathe Police Department that she found child pornography on computer media belonging to Christmas. Investigators obtained a search warrant and found the images. The National Center for Missing and Exploited Children identified more than 1,300 images of known child victims living outside of Kansas in Christmas’ collection,
Sentencing is set for Aug. 12. Christmas faces a maximum penalty of 10 years in federal prison and a fine up to $250,000. Grissom commended the Olathe Police Department and Assistant U.S. Attorney Kim Martin for their work on the case.
North Oaks Couple Sentenced for Health-Care FraudRead the Press Release
MINNEAPOLIS—Earlier today in federal court in Minneapolis, a North Oaks couple was sentenced for committing health-care fraud, specifically making false statements to garner, county, state, and federal benefits and assistance for their disabled children. James N. Hood, age 69, was sentenced to 42 months in federal prison and ordered to pay a $200,000 fine on one count of mail fraud, one count of health care fraud, and one count of theft of public money. His wife, Cynthia Marsalis Hood, age 55, was ordered to serve three years of probation and pay a $300,000 fine on one count of mail fraud and one count of making a false statement for use in determining rights to Social Security benefits. The couple was also ordered to pay restitution in the total amount of $483,312.82 to the agencies victimized by this crime. The Hoods were charged on October 1, 2012, and pleaded guilty on October 24, 2012.
In sentencing the couple, U.S. District Court Judge Joan N. Ericksen reiterated that this was not a victimless crime. She said these programs were meant for people in financial need, and because of the wrongdoing of the Hoods and other fraudsters, these programs could become at risk. She also said that the couple clearly knew right from wrong and took this action for their own personal gain.Following today’s sentencing, Daniel Seymour, Resident Agent in Charge of the Social Security Administration-Office of Inspector General’s (“SSA-OIG”) St. Paul Office, said, “SSA-OIG worked with federal, state, and local law enforcement partners to bring the investigation of James and Cynthia Hood to a successful conclusion. That investigation revealed that the Hoods, despite owning more than $10 million in investments, property and more, stole more than $80,000 in Supplemental Security Income (“SSI”) payments from the federal government. SSI provides a base-level, safety net income for uninsured aged, blind, or disabled individuals with very limited income or resources. The successful prosecution of this case demonstrates what can be accomplished when law enforcement partners work together to combat fraud, waste, and abuse of taxpayer dollars. SSA-OIG is gratified to see this case brought to justice, and is committed to continuing to protect SSA programs from fraud.”
The court documents on file in this case provide that during a five-year period, from January 2006 to April 2011, the couple stole approximately $400,000 in state and federal Medicaid money in addition to the $80,000 in Social Security benefits noted above. To that end, James Hood prepared false federal income tax returns that Cynthia Hood joined him in signing. Those returns were the basis of subsequent benefit applications. In addition, the couple offered false information in the benefit applications themselves, during related in-person interviews, and through income-update forms.
“Our publicly funded programs are meant to serve those in need and every dollar stolen is a dollar taken from a struggling family. Today’s sentencings send a clear message that fraud, waste, and abuse of public funds is not a victimless crime and will not be tolerated in Minnesota,” said Minnesota Department of Human Services Inspector General Jerry Kerber. “Today’s sentencings are the result of an on-going collaborative effort between federal, state, and county governments to fight fraud and abuse in health care and together we will continue to enforce the integrity of public programs.”
Following Hurricane Katrina in 2005, the Hood family, residents of New Orleans at the time, visited several states and eventually decided that Minnesota provided a high quality of life and the best health care and educational resources for their disabled children. After they moved to Minnesota, they applied for a variety of aid on behalf of those children, including, but not limited to federal Social Security supplemental income benefits, State Medical Assistance, Cost-Effective Health Insurance, and Community Alternatives for Disabled Individuals. They also obtained medical insurance assistance from Louisiana.
Eligibility for many benefit programs is based on the applicant’s disabilities and, for children, the parents’ income and resources as well as their financial contributions. To receive Social Security Supplemental Security Income benefits, for example, a single applicant cannot own more than $2,000 in income and assets, excluding a house and vehicle. To secure benefits for themselves, the Hoods falsified government documents and lied to government officials.Lamont Pugh III, Special Agent in Charge of the U.S. Department of Health and Human Services-Office of Inspector General for the region that includes Minnesota, said of the case, “The Hoods seem to have forgotten that Medicaid exists for the country’s most needy citizens, not to enrich those who have achieved financial security. We will continue to work with our federal, state, and local law enforcement partners to ensure that these health care dollars are protected, and criminals who would defraud taxpayers are held accountable.”
During all times relevant to this case, James Hood was the sole heir to family estates and held substantial stock in AT&T, General Electric, and Exxon Mobil, among other companies. His dividend income totaled as much as $156,000 in a given year. He also maintained more than 65 bank accounts, which netted up to $183,000 in interest income annually. Moreover, he owned Iowa farmland and received farm-related payments from the U.S. Department of Agriculture’s Farm Service Agency as well as the State of Iowa. In 2005, the farm yielded Hood income of $187,910.98, but no farm-related values or incomes were reported in his benefit applications or income updates. Likewise, he failed to disclose significant financial gifts received from family trusts. During much of this time, James Hood also served as a professor at Tulane University.
Yet, in 2005, the couple applied for Medical Assistance and, in their application, listed only James Hood’s teaching salary and a small amount of dividend income. Moreover, when they applied for health insurance assistance, they failed to disclose that they were simultaneously seeking and receiving insurance assistance from the State of Louisiana.
In addition, Cynthia Hood repeatedly made false statements to the SSA in support of her children’s continued eligibility for Social Security Supplemental Security Income. Specifically, in 2006, she stated that her husband lived in Louisiana. She falsely reported that she did not own any homes, vehicles, stocks, bonds, or property. And she reported that she only had one bank account with a balance of $1,400. In fact, at the time, Cynthia Hood held at least 16 bank accounts jointly with James Hood. Later, she reported to the SSA that her Minnesota household only consisted of herself and her three children, claiming her husband lived in Iowa. In truth, her husband was living with her and financially supported the household.
In 2007, the couple submitted a renewal application with the Minnesota Health Care Program, which stated that James Hood was on unpaid leave from Tulane. In that document, the only income indicated was the children’s Social Security disability benefits. Similar statements were also made thereafter.
Ramsey County Attorney John Choi said, “I am grateful for the hard work that my staff put into investigating and confirming the facts of this case prior to handing it onto the U.S. Attorney’s Office. We take fraud very seriously and are especially thankful for the cooperative working relationship with the (Minnesota) Department of Human Services in this investigation.”
This case was the result of an investigation by the SSA-OIG, the U.S. Department of Health and Human Services’ Office of Inspector General, the Minnesota Department of Human Services’ Office of Inspector General, and the Ramsey County Attorney’s Office. It was prosecuted by Assistant U.S. Attorney Laura M. Provinzino.Niagara Falls Man Sentenced on Drug ChargesRead the Press Release
BUFFALO, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that Wally Reynolds, 37, of Niagara Falls, N.Y., who was convicted of conspiring to possess and distribute more than 100 kilograms of marijuana, was sentenced to 60 months in prison by U.S. District Judge Richard J. Arcara.
Assistant U.S. Attorney Mary Catherine Baumgarten, who handled the case, stated that between June 2004 and February 2010, the defendant managed and supervised other individuals in distributing marijuana that was imported from Canada into the United States. During the execution of a search warrant at Reynolds’ residence, law enforcement officers recovered marijuana and drug paraphernalia. At that time, the defendant told officers that he was laid off from his former employment with the City of Niagara Falls and made money by selling marijuana.
The sentencing is the culmination of an investigation on the part of Special Agents of Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of James C. Spero, with the assistance of other U.S. and Canadian members of the Border Enforcement Security Task Force.
New York Immigration Judge Participates in Naturalization CeremonyRead the Press Release
NEW YORK -- Immigration Judge Terry Bain from the Executive Office for Immigration Review, New York Immigration Court, delivered the keynote speech and administered the oath of allegiance to approximately 150 candidates during a naturalization ceremony at 26 Federal Plaza in New York on May 3, 2013. The New York District Office of U.S. Citizenship and Immigration Services, Department of Homeland Security, hosted the ceremony.
Biographical Information
Attorney General Janet Reno appointed Judge Bain in February 1994. Judge Bain received a bachelor of arts degree in 1973 from George Washington University, and a juris doctorate in 1980 from Brooklyn Law School. From 1986 to 1994, she worked as an attorney for Whitman, Breed, Abbott & Morgan in New York. From 1981 to 1986, she worked in private practice with Barst & Mukamal in New York. Judge Bain is a member of the New York State Bar.
- EOIR -
The Executive Office for Immigration Review (EOIR) is an agency within the Department of Justice. Under delegated authority from the Attorney General, immigration judges and the Board of Immigration Appeals interpret and adjudicate immigration cases according to United States immigration laws. EOIR’s immigration judges conduct administrative court proceedings in immigration courts located throughout the nation. They determine whether foreign-born individuals—whom the Department of Homeland Security charges with violating immigration law—should be ordered removed from the United States or should be granted relief from removal and be permitted to remain in this country. The Board of Immigration Appeals primarily reviews appeals of decisions by immigration judges. EOIR’s Office of the Chief Administrative Hearing Officer adjudicates immigration-related employment cases. EOIR is committed to ensuring fairness in all of the cases it adjudicates.
Executive Office for Immigration ReviewMission Man Sentenced on Firearm ConvictionRead the Press Release
United States Attorney Brendan V. Johnson announced that a Mission, South Dakota, man convicted of Felon in Possession of a Firearm was sentenced on May 6, 2013, by U.S. District Judge Roberto A. Lange. Gary Joe Emery, age 27, was sentenced to 5 months in custody, 5 months of supervised release, and $100 to the Federal Crime Victims Fund.
Emery was indicted by a federal grand jury on September 19, 2012, and pled guilty to the charge on February 6, 2013.
On April 13, 2009, Emery was convicted of a felony in United States District Court – District of South Dakota. On June 10, 2012, Emery possessed a firearm at his residence in Todd County, South Dakota.
The investigation was conducted by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and Rosebud Sioux Tribe Law Enforcement Services. The case was prosecuted by Assistant U.S. Attorney Marie H. Ruettgers.
Emery was remanded to the custody of the U.S. Marshal.
Michael D. Brumfield Indicted for Possession with Intent to Distribute CocaineRead the Press Release
MICHAEL D. BRUMFIELD, age 45, a resident of Hammond, Louisiana, was charged in a one-count indictment filed May 3, 2013 for possession with intent to distribute cocaine, a Schedule II narcotic drug controlled substance, announced U. S. Attorney Dana J. Boente. The defendant was arrested this morning.
According to court records, on or about April 10, 2013, BRUMFIELD did knowingly and intentionally possess with the intent to distribute a quantity of cocaine hydrochloride.
If convicted, BRUMFIELD faces a maximum term of imprisonment of twenty years, a $1,000,000 fine, three years of supervised release following any term of imprisonment, and a $100 special assessment.
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.
The case was investigated by the Hammond Police Department and the Drug Enforcement Administration Task Force. The case is being prosecuted by Assistant U. S. Attorney Julia K. Evans.
(Download Indictment )
Martin Woman Sentenced for Distribution of MorphineRead the Press Release
United States Attorney Brendan V. Johnson announced that a Martin woman convicted of Distribution of a Controlled Substance was sentenced on April 29, 2013, by Chief Judge Jeffrey L. Viken, U.S. District Court. Tillie Dawn Dubray, age 43, was sentenced to 1 year of probation, a $250 fine, and a $100 special assessment to the Federal Crime Victims Fund.
On January 31, 2012, Dubray illegally distributed morphine in Martin, South DakotaDubray pleaded guilty to the charge on November 29, 2012.
This case was investigated by the Bureau of Indian Affairs, Office of Justice Services, the Oglala Sioux Tribe Department of Public Safety, the Northern Plains Safe Trails Drug Enforcement Task Force, and the Federal Bureau of Investigation. Assistant U.S. Attorney Ted L. McBride prosecuted the case.
Martin Man Sentenced for Conspiracy to Distribute A Controlled SubstanceRead the Press Release
United States Attorney Brendan V. Johnson announced that a Martin man convicted of conspiracy to distribute a controlled substance was sentenced on April 16, 2013, by Chief U.S. District Judge Jeffrey L. Viken. Grover Lee Horned Antelope, age 40, was sentenced to 60 months’ imprisonment, 4 years' supervised release, and a $100 special assessment to the Federal Crime Victims Fund.
In October 2008, Horned Antelope conspired to distribute one pound of marijuana on the Pine Ridge Indian Reservation. Horned Antelope pleaded guilty to the charge on December 3, 2012.
This case was investigated by the Federal Bureau of Investigation and the Northern Plains Safe Trails Drug Enforcement Task Force. Assistant U.S. Attorney Ted L. McBride prosecuted the case.
Horned Antelope remains in the custody of the U.S. Marshal.
Manhattan U.S. Attorney and U.S. Immigration and Customs Director Announce Return to Mongolia of Tyrannosaurus Bataar SkeletonRead the Press Release
Preet Bharara, United States Attorney for the Southern District of New York, and John Morton, Director of the U.S. Immigration and Customs Enforcement (“ICE”), announced today the return to the Mongolian government of a nearly complete Tyrannosaurus bataar skeleton (the “Bataar”) that was unlawfully taken from Mongolia.
Manhattan U.S. Attorney Preet Bharara stated: “Almost one year ago this Tyrannosaurus bataar was offered for sale at a New York City auction for over $1,000,000, but as we now know, that attempted sale was part of a criminal scheme. And now, one year later, we are very pleased to have played a pivotal role in returning Mongolia’s million dollar baby. Of course, that million dollar price tag – as high as it is – doesn’t begin to describe the true value of an ancient artifact that is part of the fabric of a country’s natural history and cultural heritage –
priceless. And we are prouder still to be playing a key role in returning almost a score more fossils to the people of Mongolia in the near future.”
ICE Director John Morton stated: “This is one of the most important repatriations of fossils in recent years. We cannot allow the greed of a few looters and schemers to trump the cultural interests of an entire nation. Through this case, HSI special agents have once again proven themselves to be the leading federal law enforcement experts in the investigation and forfeiture of stolen foreign art, antiquities and relics. Because of the collaborative effort between ICE-HSI and the U.S. Attorney’s Office, we undo a great wrong by returning this priceless dinosaur skeleton to the people of Mongolia.”
According to the civil forfeiture and criminal Complaints, the Information, plea agreement, and other court documents filed in Manhattan federal court:
The Tyrannosaurus bataar, indigenous to what is now Mongolia, was a dinosaur from the late Cretaceous period, approximately 70 million years ago. It was first discovered in 1946 during a joint Soviet-Mongolian expedition to the Gobi Desert in the Mongolian Ömnögovi Province. Mongolian law enacted in 1924 declares dinosaur fossils to be the property of the Government of Mongolia, and criminalizes their export from the country.
On March 27, 2010, the Bataar skeleton was imported into the United States from Great Britain. The customs importation documents contained several false statements. First, the country of origin of the Bataar skeleton was erroneously listed as Great Britain when, according to several paleontologists, Tyrannosaurus bataars have only been recovered in Mongolia. In addition, the Bataar skeleton was substantially undervalued on the importation documents. The customs importation forms listed its value as $15,000, in contrast to the $950,000 - $1,500,000 price listed in a 2012 auction catalog, and the actual auction sale price of $1,052,500. Finally, the Bataar skeleton was incorrectly described on the customs importation documents as two large rough fossil reptile heads, six boxes of broken fossil bones, three rough fossil reptiles, one fossil lizard, three rough fossil reptiles, and one fossil reptile skull.
Texas-based Heritage Auctions, Inc., offered for sale the Bataar skeleton at an auction conducted in New York City. Prior to the sale, the Government of Mongolia sought, and was granted, a Temporary Restraining Order prohibiting the auctioning, sale, release or transfer of the Tyrannosaurus Bataar Skeleton by a Texas State District Judge. Notwithstanding the state court order, Heritage Auctions completed the auction and the Tyrannosaurus Bataar Skeleton sold for over $1 million. However, the sale was contingent upon the outcome of any court proceedings instituted on behalf of the Mongolian Government.
On May 22, 2012, the President of Mongolia, Tsakhia Elbegdorj sent a letter to the United States Attorney’s Office for the Southern District of New York formally requesting the Office’s “assistance in preserving Mongolia’s cultural heritage in this rare national treasure by . . . seeking forfeiture of . . . the Tyrannosaurus bataar skeleton.”
On June 5, 2012, at the request of the President of Mongolia, several paleontologists specializing in Tyrannosaurus bataars examined the Bataar skeleton and concluded that it is in fact a Tyrannosaurus bataar skeleton that was unearthed from the western Gobi Desert in Mongolia between 1995 and 2005. Shortly thereafter, on June 18, 2012, the United States Attorney’s Office filed a civil action seeking the forfeiture of the Bataar skeleton and the District Court issued a warrant authorizing ICE’s Homeland Security Investigations (HSI) to seize the Bataar skeleton.
On September 24, 2012, the United States Attorney’s Office filed an amended civil forfeiture Complaint which included the original paleontological reports as well as additional reports from those same paleontologists and other paleontologists. The additional reports definitively state that given the particularized coloring of the bones of the Bataar skeleton there is no doubt that the Bataar skeleton came from Mongolia.
On October 17, 2012, Eric Prokopi, the importer of the Bataar skeleton was arrested on one count of conspiracy to smuggle illegal goods, possess stolen property, and make false statements, one count of smuggling goods into the United States, and one count of interstate sale and receipt of stolen goods. The charges stemmed from Prokopi’s illegal importation of the Bataar and other dinosaur fossils into the United States. Shortly after his arrest, on December 27, 2012, Prokopi pled guilty to engaging in a scheme to illegally import the fossilized remains of numerous dinosaurs that had been taken out of their native countries illegally and smuggled into the United States. As part of his plea agreement, Prokopi consented to the forfeiture of the Bataar skeleton. Prokopi also agreed to forfeit a second nearly complete Tyrannosaurus bataar skeleton, a Saurolophus skeleton, and an Oviraptor skeleton, all of which had been in his possession but have since been recovered by the U.S. Attorney’s Office. He further agreed to forfeit his interest in a third Tyrannosaurus bataar skeleton which was located in Great Britain.
On February 14, 2013, U.S. District Judge P. Kevin Castel entered a judgment forfeiting the Bataar skeleton to the United States of America for its return to Mongolia.
Mr. Bharara praised the investigative work of ICE-HSI. He also thanked Mongolian authorities for their assistance in the case.
The President of Mongolia, Tsakhia Elbegdorj, stated: “I join the people of Mongolia in thanking the special agents of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations units in New York, Florida, California, Ohio and Wyoming for their exceptional work and expertise and for their cooperation with the Mongolian State Investigation and Criminal Investigation Authorities. I am deeply grateful to the office of the U.S. Attorney for the Southern District of New York for their wise leadership and legal expertise in this overall effort. I also commend the Society of Vertebrate Paleontology, lawyers, judges and volunteers for their role in this case. Our two countries are separated by many miles, but share a passion for justice and a commitment to putting an end to illegal smuggling.”
The forfeiture action was handled by the Asset Forfeiture Unit of the U.S. Attorney’s Office. Assistant U.S. Attorneys Sharon Cohen Levin and Martin S. Bell were in charge of the litigation. The criminal case was handled by the Complex Frauds Unit. Martin S. Bell was in charge of the prosecution.
Leesburg Man Arrested for Conspiracy to Distribute Oxycodone Resulting in DeathRead the Press Release
ALEXANDRIA, Va. – George Washington Crane, V, 47, of Leesburg, Va., was arrested on Friday, and made his initial appearance in court today, on charges of conspiracy to distribute Oxycodone resulting in the 2010 death of a young Loudoun County man.
Neil H. MacBride, United States Attorney for the Eastern District of Virginia; Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office; and Michael L. Chapman, Sheriff of Loudon County, made the announcement after Crane’s initial appearance today before United States Magistrate Judge T. Rawles Jones, Jr.
Crane faces a mandatory minimum sentence of twenty years and a maximum penalty of life imprisonment, if convicted.
According to court documents and proceedings held today, Crane allegedly purchased Oxycodone from sources in Washington, D.C. from 2006 through 2012. According to the affidavit filed in support of the criminal complaint, Crane primarily distributed that Oxycodone to individuals in Western Loudoun County, Va.
On August 8, 2010, a 20 year old Loudoun County man died from an Oxycodone overdose at his home. This young man had left a drug rehabilitation facility just one day earlier. The criminal complaint alleges that Crane sold the Oxycodone, through an intermediary, that ultimately resulted in the victim’s death from overdose.
The investigation is being conducted by FBI’s Washington Field Office and the Loudoun County Sherriff’s Office. Assistant United States Attorney Adam B. Schwartz is prosecuting the case on behalf of the United States.
Criminal complaints are only charges and not evidence of guilt. A defendant is presumed to be innocent until and unless proven guilty.
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.
# # #Kyle Woman Pleads Guilty to Conspiracy to Distribute MarijuanaRead the Press Release
United States Attorney Brendan V. Johnson announced that Stephanie Standing Soldier, age 37, of Kyle, South Dakota, appeared before U.S. Magistrate Judge Veronica L. Duffy on April 30, 2013, and pleaded guilty to conspiracy to distribute a controlled substance. The Magistrate Judge is expected to recommend Standing Soldier’s plea be accepted by the District Court. The penalty upon conviction is a minimum of 5 years up to 40 years’ imprisonment and/or a $5,000,000 fine.
The charge relates to Standing Soldier conspiring with others to distribute at least 100 kilograms or more of marijuana in South Dakota between 2008 and 2012. The investigation was conducted by the Federal Bureau of Investigation, Northern Plains Safe Trails Drug Enforcement Task Force, South Dakota Division of Criminal Investigation, and the Bureau of Indian Affairs, Office of Justice Services. The case is being prosecuted by Assistant United States Attorney Ted L. McBride.
The defendant was released on bond pending acceptance of this plea and sentencing.
Justice Department to Monitor Elections in Mississippi and South CarolinaRead the Press Release
The Justice Department announced today that it will monitor elections on May 7, 2013, in the towns of Clarksdale, Como and Ruleville, Miss., and in Charleston County, S.C., to ensure compliance with the Voting Rights Act of 1965. The Voting Rights Act prohibits discrimination in the election process on the basis of race, color or membership in a minority language group.
Under the Voting Rights Act, the Justice Department is authorized to ask the U.S. Office of Personnel Management (OPM) to send federal observers to jurisdictions that are certified by the attorney general or by a federal court order. Federal observers will be assigned to monitor polling place activities in Clarksdale, Como and Ruleville based on the attorney general’s certification. The observers will watch and record activities during voting hours at polling locations, and Civil Rights Division attorneys will coordinate the federal activities and maintain contact with local election officials.
In addition, Justice Department personnel will monitor polling place activities in Charleston County. A Civil Rights Division attorney will coordinate federal activities and maintain contact with local election officials.
Each year, the Justice Department deploys hundreds of federal observers from OPM, as well as departmental staff, to monitor elections across the country. To file complaints about discriminatory voting practices, including acts of harassment or intimidation, voters may call the Voting Section of the Justice Department’s Civil Rights Division at 1-800-253-3931.
Visit www.justice.gov/crt/voting/index.php for more information about the Voting Rights Act and other federal voting laws.
Jimmy Rollins Sentenced to 300 Months in Prison for Production of Child PornographyRead the Press Release
CHATTANOOGA, Tenn. – Jimmy Rollins, 45, of Palmer, Tenn., was sentenced to serve 300 months in federal prison, five years supervised release and a $100 special assessment, by the Honorable Harry S. Mattice, Jr., U.S. District Judge. Rollins pleaded guilty in February 2013 to production of child pornography.
In February 2012, an undercover investigation by the Winchester Police Department identified Rollins as a person who used the internet to traffic in pornographic images of children. A search of his home in May 2012 revealed equipment used in the production of child pornography and multiple photographic images and videos of Rollins engaged in sexual activity with a known minor. All the child pornographic scenes were set in a bedroom that can be recognized as belonging to Rollins. Rollins had been previously convicted in 1994 of two counts of statutory rape in the Criminal Circuit Court of Grundy County, Tenn.
The indictment and subsequent conviction of Rollins was the result of an investigation conducted by the Winchester Police Department, Tennessee Bureau of Investigation and Federal Bureau of Investigation. Assistant U.S. Attorney John P. MacCoon represented the United States.
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 U.S. 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 www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Jefferson City Woman Pleads Guilty to Attempted Jail EscapeRead the Press Release
JEFFERSON CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Jefferson City, Mo., woman pleaded guilty in federal court today to her role in a conspiracy to help an inmate at the Morgan County jail in an unsuccessful escape attempt.
Amanda Leigh Lesh, 35, of Jefferson City, pleaded guilty before U.S. Magistrate Judge Matt J. Whitworth to the charge contained in a Dec. 13, 2012 federal indictment.
By pleading guilty today, Lesh admitted that she smuggled a hacksaw blade into the cell shared by Mitchell Atterberry, who was being held in the jail on federal charges related to distributing methamphetamine. Atterberry’s cellmate, Steven Pyykola of Springfield, was also part of the escape attempt. Pyykola was convicted of three state murder charges and is serving three consecutive life sentences without parole.
Sheriff’s deputies received a tip on Nov. 14, 2012 and searched Atterberry’s cell. They found that the window had been damaged. The metal support beam had been cut most of the way through. They also found a 10-inch saw blade in the mat on the top bunk of the cell and a smaller two-inch saw blade that appeared to have broken off the larger blade.
Authorities reviewed telephone calls that Atterberry and Pyykola made to Lesh, in which they asked her to purchase saw blades and deliver them to the jail underneath their second story window. Atterberry and Pyykola would then slide a string out of a hole that had been made in the window to the ground where Lesh would tie on the items and they would pull them up and in through the window. Lesh also made references to picking up the two after the escape and buying them clothes to wear.
On Nov. 13, 2012, Atterberry told Lesh in a recorded telephone conversation that they “worked on it late last night, couldn’t get it done” and in a later call that day said they hoped to get it done “by tonight.” The next day, authorities received the tip about the escape plans.
Under federal statutes, Lesh is subject to a sentence of up to five years in federal prison without parole, plus a fine up to $250,000. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Special Assistant U.S. Attorney Steven R. Berry. It was investigated by the Morgan County, Mo., Sheriff’s Department, the U.S. Marshal’s Service and the DEA.
Four Defendants Sentenced to Prison Terms Between Five and 10 Years in Three Investment Fraud SchemesRead the Press Release
CHICAGO — Four defendants who swindled investors out of millions of dollars in three separate Ponzi fraud schemes were each sentenced to federal prison terms between 5 and 10 years and ordered to pay full restitution to their victims. The cases demonstrate that federal law enforcement agencies continue to safeguard investors from individuals who solicit, obtain and use other people’s money illegally. Two of the three cases resulted from investigations by law enforcement agencies and financial market regulators. One defendant reported himself to investigators as his fraud scheme was collapsing.
The defendants and their sentences last week in U.S. District Court were:
MICHAEL MORAWSKI, 56, of Sleepy Hollow, was sentenced to 10 years in prison, and his co-defendant, FRANK CONSTANT, 59, of West Dundee, was sentenced to 7½ years in prison, and both were ordered to pay more than $18 million in restitution for defrauding 267 victims;
JAMES BRANDOLINO, 44, formerly of Joliet and Chicago, was sentenced to just under nine years in prison and ordered to pay more than $3.8 million in restitution for defrauding more than 50 investors; and
CHRISTOPHER VARLESI, 54, of Chicago, was sentenced to five years in prison and ordered to pay $638,227 in restitution for defrauding approximately 15 investors.
In each case, many of the victims lost their life savings, including retirement money and college funds, as well as suffered emotional hardship. Each of the defendants benefitted personally, as well as used some investors’ funds to pay back earlier investors to keep their fraud schemes from collapsing.
United States v. Morawski and Constant
Morawski pleaded guilty to two counts of mail fraud in September 2012 and was sentenced to 10 years in prison by U.S. District Judge Gary Feinerman, who imposed the sentence last Tuesday. Constant pleaded guilty to one count of wire fraud and was sentenced to 90 months in prison by Judge Feinerman on Thursday. Both men were ordered to pay $18,211,547 in restitution and to begin serving their sentences on July 15, 2013.
“Mr. Morawski must be punished for the lies and fraud he perpetrated and the way in which he conducted business when it became clear that things were not going well. At the time when people get into situations when businesses go south, it is at that time there has to be the most deterrence,” Judge Feinerman said.
In sentencing Constant, the judge said: “The sentence should send a signal to people in positions of trust that truth has to be told in good time and bad. It’s important to investors to know when thing go well, but what Constant did was deprive the investors of full information to make an informed choice.”
Between 2006 and 2010, Morawski and Constant fraudulently obtained approximately $21 million and caused 267 investors to lose more than $18 million. After forming a real estate investment company, Michael Franks, LLC, in Palatine, and several related businesses, they misused the money they raised for their own benefit and to make Ponzi-type payments to earlier investors.
Michael Franks offered investors passive ownership in multi-family residential properties, including apartment buildings in Illinois, Texas and Alabama. Morawski and Constant offered two types of investments to the public: one was an investment in acquiring, improving and operating specific apartment complexes for a period of three to five years, and investors were typically told they would earn between seven and nine percent interest annually, and potentially more upon the sale of the property; the second was an investment in real estatebased “funds” that would provide an interest in various properties backed by promissory notes, often offering an annual interest payment of between 8 and 30 percent per year.
Certain real estate projects undertaken by Michael Franks performed poorly and failed to generate enough revenue to meet operating expenses. The defendants began transferring funds from various investments to support poorly-performing projects and to pay earlier investors, without disclosing this information. At the same time, they misused investor funds to pay employees, to make commission payments to individuals who raised new funds, and to pay themselves, as well as to make payments for Constant’s company car and country club payments, and to extend loans to friends of Morawski, who pocketed nearly $1 million for himself.
The government was represented by Assistant U.S. Attorney Sunil Harjani. The investigation was conducted by the FBI.
United States v. Brandol
Brandolino pleaded guilty to mail fraud in August 2011 and was sentenced to 107 months in prison and ordered to pay $3,865,484 in restitution by U.S. District Judge Elaine Bucklo, who imposed the sentenced last Thursday. Brandolino has been in custody since January 2011 when he turned himself in after a seven-year investment fraud scheme in which he swindled more than 50 investors out of $3.75 million. He agreed to being ordered to pay additional restitution of $128,576 to managed account holders who suffered trading losses.
Between 2003 and January 2011, Brandolino solicited approximately $4.8 million from about 60 investors, many of them family and friends. He lured investors with promises of healthy returns and principal safety, and he fabricated account statements showing steady gains, convincing investors to keep their money with him and to invest additional funds.
Of the funds he fraudulently obtained, Brandolino lost approximately $850,000 through unsuccessful futures trading and used approximately $1.4 million to pay principal and purported profit returns to existing pool participants, including more than $300,000 he paid to investors in excess of their investments. He also misappropriated more than $2 million for himself and used the money to purchase such items as a luxury BMW, a Rolex watch, and a piano.
Brandolino held various National Futures Association registrations in the commodities brokerage business, with exchange floor trading privileges at the Chicago Board of Trade, now part of the CME Group. He was also a principal of several commodities trading businesses, including Brandolino Investment Group, Lloyd Lewis Capital, Inc., Falcon Trading Group, Inc., and Falcon Capital Partners LLC.
The government was represented by Assistant U.S. Attorney Samuel B. Cole. The investigation was conducted by the FBI and the U.S. Postal Inspection Service. The Commodity Futures Trading Commission assisted in the investigation.
United States v. Varlesi
Varlesi pleaded guilty to wire fraud in December 2012 and was ordered to surrender on June 17, 2013, by U.S. District Judge Ruben Castillo, who imposed the five-year sentence last Wednesday. Varlesi engaged in a Ponzi scheme while purporting to operate a company called Gold Coast Futures and Forex, an investment trading pool. Between July 2008 and January 2012, he fraudulently obtained more than $1.5 million from approximately 18 investors, including friends, friends of friends, and family members. Neither Varlesi nor Gold Coast held any license or registration related to trading securities or commodities or operating a commodity trading pool.
Varlesi misappropriated a substantial portion of investor funds for his own benefit, including misusing more than $120,000 to pay for a year’s rent for an apartment in the Trump International Hotel & Tower in Chicago, as well as to make Ponzi-type payments to other investors.
Trading only a small portion of the money he received from investors, Varlesi made false representations about using clients’ money to trade gold, commodity futures, and foreign currency, the expected return on their investments, and the security of their money. He concealed the scheme by creating and distributing false account statements, and also told clients that their investments were guaranteed to be profitable, with no risk of losing principal. He provided promissory notes to certain investors, falsely promising to return the entire principal amount of their investment, as well as guaranteed interest ranging between 5 to 7.5 percent per month.
The government was represented by Assistant U.S. Attorney Sarah E. Streicker. The investigation was conducted by the FBI and the Illinois Securities Department. The Commodity Futures Trading Commission assisted in the investigation.
The sentences were announced by Gary S. Shapiro, United States Attorney for the Northern District of Illinois; Cory B. Nelson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; and Pete Zegarac, Inspector-in-Charge of the U.S. Postal Inspection Service in Chicago.
The investigations fall under the umbrella of the Financial Fraud Enforcement Task Force, which includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring 5 to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information on the task force, visit: StopFraud.gov.
Former Maryland National Guard Employee at Aberdeen Proving Ground Sentenced to Prison for Fraud Scheme with Losses of over $107,000Read the Press Release
Baltimore, Maryland - U.S. District Judge Richard D. Bennett sentenced Lynn Carol Williams, age 56, of Middle River, Maryland today to six months in prison, followed by six months of home detention with electronic monitoring as part of three years of supervised release, for wire fraud in connection with a scheme to misuse the Freestate Challenge Academy corporate purchasing card, causing losses of more than $107,000. Freestate Challenge Academy is a Maryland National Guard program located at Aberdeen Proving Ground. Judge Bennett also ordered Williams to pay restitution of $107,493.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; Special Agent in Charge Robert Craig of the Defense Criminal Investigative Service - Mid-Atlantic Field Office and Chief Chip Honan of the Aberdeen Proving Ground Police Department.
According to her plea agreement, from October 2007, through February 2011, Williams worked as an administrative aide at Freestate Challenge Academy, located at Aberdeen Proving Ground. Williams was authorized to use the Academy’s corporate credit card to make purchases for the Academy, and was required to prepare a monthly expense report, which included the purchasing card billing statement, original receipts, copies of the approved requisition forms, and a log of activity on the purchasing card. Once her supervisor approved the expense report, it was forwarded to the State of Maryland Military Department, which paid the account balance on the corporate purchasing card.Williams admitted that from February 2008, through October 2010, she used the corporate credit card to buy gift cards and to purchase items over the internet for her personal use. For example, on May 18, 2010, Williams used the corporate credit card to purchase six gift cards, which she then used to pay for two airline tickets for her and a friend to travel to Los Angeles, California. To conceal her fraud, Williams prepared false logs of the card activity and used her work computer to prepare fictitious receipts, to give the impression she was using the card to make legitimate purchases on behalf of the program, such as for office supplies, snacks for program participants and other legitimate items.
United States Attorney Rod J. Rosenstein praised the FBI, Defense Criminal Investigative Service and Aberdeen Proving Ground Police for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Joyce K. McDonald, who prosecuted the case.Former Hillsborough County Real Estate Director Sentenced for Mortgage FraudRead the Press Release
Tampa, Florida - U.S. District Judge Elizabeth A. Kovachevich sentenced Anthony Haynes (54, Seffner) today to one year and one day of imprisonment on two counts of wire fraud in connection with a fraudulent mortgage scheme. A restitution and forfeiture money judgment order was also entered in the amount of $940,498, the total proceeds of the fraud. Haynes pleaded guilty on January 13, 2013.
According to the plea agreement, Haynes, who was employed as the real estate services director for Hillsborough County Board of County Commissioners, made material misrepresentations in connection with loan applications and closing documents for two personal mortgages. The mortgages were for his purchase of nine land lots located in Tennessee. The mortgages were funded by interstate wires from a federally insured bank, and the closing was conducted by mail.
This case was investigated by Federal Bureau of Investigation. It will be prosecuted by Assistant United States Attorney Kelley C. Howard-Allen.
Former Drug Cartel Member Convicted of Drug Trafficking Conspiracy and Money LaunderingRead the Press Release
WILMINGTON, Del. – Charles M. Oberly, III, United States Attorney for the District of Delaware, announced today that Miguel A. Lavenant, age 38, of San Diego, California, was convicted by a federal jury of conspiring to distribute and to possess with the intent to distribute five (5) kilograms or more of cocaine. The jury also convicted Lavenant of three counts of money laundering. For his convictions, Lavenant faces a maximum sentence of life imprisonment, with a mandatory minimum sentence of ten years imprisonment. Sentencing is scheduled for August 16, 2013, at 1:00 p.m.
At trial, the United States established that Lavenant shipped over 50 kilograms of cocaine from San Diego to the East Coast. Some of the cocaine for which Lavenant was responsible was later distributed in the State of Delaware. Lavenant’s customers on the East Coast, including in Delaware, paid for their cocaine by making large-scale cash deposits into different bank accounts that Lavenant controlled.
Lavenant is a former enforcer and drug smuggler for the Arellano-Felix Organization (“AFO”) – a drug trafficking cartel based in Tijuana, Mexico. He was featured prominently in a National Geographic Documentary, “Tijuana Drug Lords,” in which he discussed his role in the AFO.
Regarding the convictions, United States Attorney Oberly said, “I commend the DEA offices in Delaware and San Diego, Homeland Security Investigations, the Internal Revenue Service Criminal Investigative Division, the Wilmington Police Department, the Newark (DE) Police Department, and the California Department of Justice for their collaborative efforts in dismantling a major drug source whose cocaine made it to the streets of Wilmington. This investigation shows our Office’s commitment to prosecute drug dealers who have a negative impact on Delaware, regardless of where they reside.”
The case was investigated by the Drug Enforcement Administration, Department of Homeland Security – Homeland Security Investigations, and the Internal Revenue Service Criminal Investigative Division. The case was prosecuted by Assistant United States Attorneys Robert F. Kravetz and Jennifer L. Hall.
Former CEO of Newport News Investment Firm Convicted of FraudRead the Press Release
NEWPORT NEWS, Va. – Jeffrey A. Martinovich, 46, of Norfolk, Va., was convicted today by a federal jury for his involvement in fraud related to the mismanagement of a Newport News-based hedge fund. Specifically, he was convicted of conspiracy to commit mail and wire fraud, four counts of wire fraud, five counts of mail fraud, and seven counts of unlawful monetary transactions.
Neil H. MacBride, United States Attorney for the Eastern District of Virginia; Tom Kelly, Special Agent in Charge of the Internal Revenue Service Criminal Investigation’s Washington, D.C., Field Office; and Royce E. Curtin, Special Agent in Charge of the FBI’s Norfolk Field Office, made the announcement today after the verdict was accepted by United States District Judge Robert G. Doumar. Martinovich faces a maximum penalty of 20 years in prison for each conviction when he is sentenced on August 7, 2013.
“As a hedge fund manager, Martinovich promised investors that he would act in their best interest in managing their hard earned money,” said U.S. Attorney MacBride. “Instead, Martinovich acted solely in his own self-interest and engaged in financial sleight of hand to fraudulently maximize his management fees. His conviction should send a strong message that fraudsters who violate the trust of the investing public will be brought to justice.”
Martinovich was indicted on October 10, 2012, on 26 charges of mail fraud, wire fraud, unlawful monetary transactions, and bankruptcy fraud. According to court records and evidence at trial, Martinovich was the CEO of MICG Investment, LLC, an investment firm based in Newport News, Virginia. In 2007, Martinovich started three hedge funds through MICG and began seeking investments. Acting on behalf of MICG, Martinovich purchased approximately two million shares of a privately traded solar energy company for the MICG Venture Strategies, LLC hedge fund. At the end of each calendar year, in order to calculate the management and incentive fees he had earned as hedge fund manager, Martinovich needed to obtain an estimate of the value of the solar company shares held by Venture Strategies. Because the solar company was not publicly traded, MICG was required to seek an independent, external, valuation of the company’s worth when calculating the management and incentive fees to be paid.
In 2008, under the guise of seeking an independent valuation, Martinovich and others fraudulently inflated the value of the solar company to falsely indicate an increase in the overall value of the hedge fund. Martinovich then used this fraudulent, unsupported, and inflated value of the solar company to convince new investors to invest in Venture Strategies, as well as to pay himself greater fees. The solar company eventually declared bankruptcy, resulting in serious financial problems for many Venture Strategies investors who had collectively invested over 1.5 million dollars.
This case was investigated by the Internal Revenue Service Criminal Investigations Division and the Federal Bureau of Investigation, with the assistance of the U.S. Securities and Exchange Commission, the Financial Industry Regulatory Authority, and the Virginia State Corporation Commission. Assistant United States Attorneys Brian J. Samuels and V. Kathleen Dougherty prosecuted this 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.
# # #Former Bookkeeper to Serve 24 Months in Prison and Pay over $1.8 Million in Restitution for Embezzlement and Tax EvasionRead the Press Release
Oklahoma City, Oklahoma – CAROLYN DAWSON, of Oklahoma City, was sentenced today to 24 months in prison for embezzling from her former employer, American Plant Products, and for evading federal payroll taxes, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma. In addition, Dawson was ordered to pay $1,843674.42 in restitution.
Until November of 2011, Dawson worked as the bookkeeper for American Plant Products, an Oklahoma City wholesaler of greenhouse and garden supplies. Her duties included maintaining payroll, preparing payroll tax returns, and paying withheld taxes to the IRS. According to a criminal information filed on December 18, 2012, Dawson defrauded the business by using interstate wire communications to pay personal credit card expenses from a business bank account, without the knowledge of the business or its owners. These payments took place from January of 2007 until November 25, 2011, when Dawson was terminated. The information also alleged that Dawson willfully evaded federal payroll taxes by failing to file a 2010 payroll tax return for the company, failing to make payroll withholding payments to the IRS, and altering the books and records of American Plant Products to conceal her failure to make withholding payments.
On January 3, 2013, Dawson pled guilty to both counts.
Today, Chief Judge Vicki Miles-LaGrange sentenced Dawson to 24 months in prison, to be followed by 3 years of supervised release. The sentence also requires her to pay $1,194,656.15 in restitution to American Plant Products and $649,018.27 to the Internal Revenue Service. The restitution to the IRS is based not only on her evasion of payroll taxes, but also on her failure to report the embezzled funds on her personal income tax returns.
This case was the result of an investigation conducted by the Federal Bureau of Investigation and IRS Criminal Investigation. The case was prosecuted by Assistant U.S. Attorney Scott E. Williams.
Reference is made to court filings for further information.
Federal Prison Terms Handed Down for Austin-Based Heroin Distribution OperationRead the Press Release
Thirteen defendants have received lengthy federal prison terms for their roles in an Austin-based heroin distribution operation announced United States Attorney Robert Pitman, Federal Bureau of Investigation Special Agent in Charge Armando Fernandez, Austin Police Chief Art Acevedo and Texas Department of Public Safety Director Steven C. McCraw.
On Friday, United States District Judge Sam Sparks handed down the following prison sentences: 69-year-old Jose Pardo of Austin and 67-year-old Michael Martinez of Austin – 360 months; 45-year-old Jorge Carrillo of Lockhart, TX – 188 months; 63-year-old Dionicio Sanchez of Austin – 135 months; 43-year-old David Sosa of Austin – 130 months; 46-year-old Amanda Pardo of Austin and 65-year-old Terry Ayers of Austin – 120 months; 63-year-old Alfredo Alvarez of Austin – 110 months; 32-year-old Chris Mier of Austin – 51 months; 26-year-old Tatiana Huang of Austin – 48 months; 46-year-old Kilpatrick Williams of Austin – 41 months; 25-year-old Leah Day of Austin and 36-year-old Jeffrey Finn of Shenandoah, TX – 12 months. In addition to the prison terms, Judge Sparks ordered that the following defendants pay fines: Amanda Pardo, $15,000; Jorge Carrillo, Tatiana Huang and Chris Meir, $6,000 each; and, Kilpatrick Williams, Leach Day and Jeffrey Finn, $3,600. Judge Sparks also ordered that all of the defendants be placed under supervised release for a period of five years after completing their respective prison terms.
Lucy Estrada, age 33, is scheduled to be sentenced on Friday. The alleged ringleader, Amado Pardo, passed away prior to trial.
Evidence presented in court revealed the defendants conspired from May 2011 until their arrests in June of 2012 to distribute more than 17 kilograms of heroin. Testimony also revealed that at least on one occasion, heroin was processed after business hours at the Pardo family-owned restaurant, Jovita’s, and that numerous drug transactions occurred right behind Jovita’s in co-defendant Amado Pardo’s house.“The sentencing of these traffickers is especially rewarding when you consider the longevity of the leaders participation in drug trafficking in the Austin area. These sentences ensure that the leadership of this trafficking group has been effectively dismantled,” stated FBI SAC Fernandez.
This case was investigated by the Federal Bureau of Investigation, Austin Police Department, Texas Department of Public Safety, Texas Department of Criminal Justice Office of the Inspector General, Drug Enforcement Administration and the Travis County Sheriff’s Office. This matter is being prosecuted by Assistant United States Attorneys Dan Guess and Elizabeth Cottingham.
Federal Guilty Plea from Cabell County Man Who Illegally Sold Oxycodone and Multiple FirearmsRead the Press Release
HUNTINGTON, W.Va. – A Cabell County man who illegally sold prescription painkillers and several firearms pleaded guilty today to federal charges, announced United States Attorney Booth Goodwin. Kenneth Lee Sergent, 40, of Huntington, entered a guilty plea to being a felon in possession of a firearm and distribution of oxycodone before Chief U.S. District Judge Robert Chambers.
On May 18, 2011, Sergent possessed and sold a .22 caliber revolver to a confidential informant working in cooperation with the Huntington Police Department in exchange for $50. The illegal firearm transaction took place at Sergent’s Huntington residence that was located at 914 27th Street. Sergent also sold the confidential informant two 30-milligram oxycodone pills in exchange for $60.
Sergent also illegally sold firearms to a confidential informant on June 5, 2011 and on August 21, 2011. The two firearms, both .38 caliber revolvers, were possessed and sold by Sergent in exchange for $300 and $125, respectively. Sergent was arrested by officers with the Huntington Police Department on March 21, 2012.Sergent was previously convicted in November 1990 in the Circuit Court of Cabell County, West Virginia of grand larceny. The defendant did not have his rights to possess a firearm restored.
Sergent faces up to 10 years in prison on Count One (firearm possession), up to 20 years in prison on Count Two (oxycodone distribution) and a $1,250,000 fine when he is sentenced on August 5, 2013.
The Huntington Police Department, the Drug Enforcement Administration (DEA) and the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) conducted the investigation. Assistant United States Attorney Joseph F. Adams is in charge of the prosecution.This case is being brought as part of Project Safe Neighborhoods. Project Safe Neighborhoods is a nationwide commitment to reduce gun crime in the United States by working with existing local programs that target gun crime.
This case is also 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.
Erie Felon Admits Illegally Possessing FirearmRead the Press Release
ERIE, Pa - A former resident of Erie, Pennsylvania, pleaded guilty in federal court to a charge of violating federal firearms laws United States Attorney David J. Hickton announced today.
Damon Duane Amison, 21, pleaded guilty to one count before Senior United States District Judge Maurice B. Cohill, Jr.
In connection with the guilty plea, the court was advised that Amison possessed a firearm while being a convicted felon. The firearm was located by the Erie Police when they executed a search warrant of a residence on June 13, 2012.
Judge Cohill scheduled sentencing for August 12, 2013 at 11:00 a.m. The law provides for a total sentence of 10 years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the criminal history, if any, of the defendant.
Assistant United States Attorney Marshall J. Piccinini is prosecuting this case on behalf of the government.
The Erie Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives conducted the investigation that led to the prosecution of Amison.
Eagle Butte Man Sentenced for Possession of A Controlled SubstanceRead the Press Release
United States Attorney Brendan V. Johnson announced that Jason Garreau, age 26, of Eagle Butte, South Dakota, appeared before U.S. Magistrate Judge Mark A. Moreno on May 3, 2013, and pled guilty to a Superseding Information that charged him with Possession of a Controlled Substance. Garreau was sentenced to time served with no supervised release to follow, a $1,000 fine, and a $25 special assessment to the Federal Crime Victims Fund.
Garreau was indicted by a federal grand jury on January 15, 2013, for Possession of a Controlled Substance with Intent to Distribute. The charge stems from an incident on September 13, 2012, when Garreau was stopped in his vehicle by Cheyenne River Sioux Tribe law enforcement officers for speeding. During the stop, while Garreau was out of his vehicle, he dropped a clear bag from his pocket that held smaller bags containing a crystal-like substance. The substance was taken to the lab for analysis and tested positive for methamphetamine, with a total weight of 1.8 grams.
The investigation was conducted by Cheyenne River Sioux Tribe Law Enforcement and the Northern Plains Safe Trails Drug Enforcement Task Force. Assistant U.S. Attorney Kathryn N. Rich prosecuted the case.
Dentist SentencedRead the Press Release
Medicaid fraud nets prison term, fine and restitutionGREENSBORO, N.C. – Sassan Bassiri, DDS, age 46, has been sentenced to five months in prison followed by five months home confinement, announced Ripley Rand, United States Attorney for the Middle District of North Carolina.
Bassiri, of Pfafftown, North Carolina, practiced dentistry in King. His license to practice dentistry in North Carolina was revoked effective April 18, 2011.
Bassiri pleaded guilty on January 3, 2013, to three counts of health care fraud in connection with a scheme to defraud the North Carolina State Medicaid program. The fraudulent conduct included billing Medicaid for cast metal dentures when less expensive dentures were actually provided, and billing Medicaid for extensive oral examinations when the patient actually received non-billable or previously-reimbursed services.
Bassiri was sentenced on May 3, 2013, by United States District Judge N. Carlton Tilley, Jr., in federal court in Greensboro, North Carolina. Bassiri was also ordered to pay a $10,000.00 fine and $68,795.65 in restitution to the Medicaid program. He will be on supervised release for two years after the conclusion of his sentence.
The case was prosecuted by Assistant United States Attorney Robert Hamilton and Special Assistant United States Attorney and Assistant Attorney General Laura Lansford of the Medicaid Investigations Division of the North Carolina Attorney General’s Office. The case was investigated by the North Carolina Medicaid Investigations Division.
###Cobb County Man Who Sold Bomb to an Undercover Officer SentencedRead the Press Release
Defendant Manufactured an Improvised Explosive Device
ATLANTA - Mark Young was sentenced today to serve over five years in federal prison on charges of possessing a destructive device by United States District Judge Steven C. Jones.
"The recent tragedy in Boston underscores the havoc a homemade bomb can wreak,” said United States Attorney Sally Quillian Yates. “We are committed to aggressively prosecuting those who put the safety and security of our citizens at risk by constructing explosives devices.”
“ATF agents, working closely with our local law enforcement partners, arrested a violent individual who posed a significant danger to our community,” said ATF Special Agent in Charge Christopher Shaefer. “Through this cooperative effort, we were able to stop any potential harm to the citizens of Atlanta, Georgia.”
According to United States Attorney Yates, the charges and other information presented in court: On or about January 13, 2012, an undercover officer (UC) met with Young and received a sample of what Young referred to as homemade explosives. In the days leading up to this, the UC had received information that Young had manufactured his own “C-4,” which is a type of plastic explosive The UC called Young, who spoke in “code” over the phone and said he had made something he was willing to give the UC a free sample of. Young then met the UC in a mall parking lot and provided the UC with an unknown substance on a paper plate. Young described the substance as being capable of making an explosion that would be similar to a few “M-80’s going off.” Young added that the amount he gave to the UC could blow up a car if the UC used it as a “shape charge on the gas tank.”
In February 2012, Young told the UC that he had made a new batch of C4. Young sold the UC the new material through a middleman, and ATF chemists determined that it was an explosive. Next, on April 2, 2012, Young told the UC that he had made a new bomb. Young met the UC wearing a ballistic vest and had a .44 caliber Smith & Wesson revolver sitting on his lap. Young sold the UC the bomb for $750. He was then arrested, and the bomb was rendered safe. ATF determined that the bomb was in fact an IED (Improvised Explosive Device).
Young, 46, of Cobb County, Ga., was sentenced to five years, three months in prison to be followed by three years of supervised release. Young was convicted of these charges on February 27, 2013, after he pleaded guilty.
This case was investigated by Special Agents of the Bureau of Alcohol, Tobacco, Firearm and Explosives and members of the Atlanta Police Department.
Assistant United States Attorney Stephanie Gabay-Smith 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.
Co-Owner of Los Angeles County Toy Company Sentenced to Federal Prison in Drug Money Laundering CaseRead the Press Release
LOS ANGELES – The owner of a San Fernando Valley jewelry store was charged today with receiving insider information from a senior partner with KPMG LLP and using that confidential information about
LOS ANGELES – A Diamond Bar woman, who along with her husband owns a Los Angeles-area toy wholesaler, was ordered today to serve a total of 14 months in custody for participating in an elaborate scheme known as a Black Market Peso Exchange, which is an underground money-transfer system that enables international drug trafficking organizations to launder narcotics proceeds.
Dan “Daisy” Xin Li, 44, co-owner of the Industry-based Woody Toys, Inc., was sentenced today to eight months in prison, to be followed by six months of home detention. At the conclusion of today’s hearing, Li was remanded into custody.
Li was sentenced by United States District Judge R. Gary Klausner, who this morning delayed the sentencing for Li’s husband – Jia “Gary” Hui Zhou, 44 – until January 6, 2014.
As part of their agreements with federal prosecutors, the couple forfeited to the federal government $2 million in proceeds that were derived from their money laundering scheme. Some of that money was previously seized by investigators, but most of the money to satisfy a forfeiture order – $1,982,641 – was paid last Wednesday.
Zhou and Li pleaded guilty in September to conspiring to structure currency transactions with a U.S. financial institution to avoid the filing of a Currency Transaction Report.
The scheme used “structured” cash deposits in the United States to launder illicit proceeds generated by drug trafficking organizations based in Mexico and Colombia. Structured deposits are cash deposits of $10,000 or less that are designed to avoid laws requiring all cash transactions over $10,000 to be reported to federal authorities. From 2005 through 2011, approximately $3 million in structured, out-of-state cash was deposited into Woody Toys’ bank accounts, according to court documents. During that same time, Woody Toys took in approximately $3 million in cash without filing the required federal documents.
As part of the Black Market Peso Exchange scheme alleged in this case, foreign toy retailers with Colombian and Mexican pesos would contact currency brokers to buy discounted U.S. dollars, which they used to purchase merchandise from Woody Toys. The dollars being “sold” were allegedly proceeds from illegal drug sales that had been deposited in the toy company’s accounts or delivered to the business. The Colombian or Mexican pesos the currency broker received from the foreign toy retailer were remitted to the drug trafficking organizations.
In a sentencing memo to the court, prosecutors described Woody Toys as “the last ‘spoke in the wheel,’ that cleaned illicit proceeds and enabled drug trafficking organizations to convert their dirty dollars into clean pesos.”
The case involving Woody Toys is the result of an investigation conducted by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), IRS-Criminal Investigation, and the multi-agency Southern California Drug Task Force, which is spearheaded by the Drug Enforcement Administration.
Previously in this case, Woody Toys, Inc. was sentenced in November to five years of probation after pleading guilty to money laundering conspiracy charges involving drug proceeds. The sentence prohibits the company from receiving payments of more than $2,000 in cash and the business may not receive cash from anyone who is not a customer. The company must also report the identity and contact information of all its customers. Finally, the business will be subject to unannounced examinations of its books and records.
The probe targeting Woody Toys began in November 2010 based on evidence uncovered during a similar investigation targeting another Los Angeles-area toy wholesaler called Angel Toys, whose owners also went to prison (see: http://www.justice.gov/archive/usao/cac/Pressroom/2012/021.html). Several former employees of Angel Toys subsequently went to work for Woody Toys.
Investigators say schemes of this kind benefit criminal organizations by giving them a means to launder illicit proceeds using international trade. The system also gives foreign retailers access to discounted U.S. currency, which enables the foreign retailers to avoid steep exchange rates and other fees. Finally, for the U.S.-based company, the scheme is a way to substantially increase sales volume and cash flow.
Release No. 13-064
City Woman Sentenced to 60 Months in Prison for Adoption ScamRead the Press Release
Oklahoma City, Oklahoma – SHELLY RENEE HENSON, 40, from Oklahoma City, was sentenced by United States District Judge Stephen P. Friot to serve 60 months in prison for mail fraud related to an adoption scam, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma. Judge Friot also ordered Henson to serve three years of supervised release upon release from prison and to pay $49,361.47 in restitution to the victims.
According to court filings and information from the plea and sentencing hearings, between July 2008 and June 2011, Henson defrauded at least five adoption agencies and adoption law firms. Henson also defrauded several prospective adoptive parents from throughout the United States, including Florida, Kansas, and Oklahoma. Henson would falsely pose as an expectant mother and then approach the adoption agencies and law firms claiming she wanted to place her purported unborn child for adoption. Throughout the course of her scams, Henson requested and received money for living expenses, including rent, utilities, food, and other personal items. When completing the “birth mother” applications, Henson often provided false information regarding her personal identification, the conception of a child, and the identity of the putative birth father. Henson also provided fraudulent medical documentation such as pregnancy verifications, sonograms, blood work, laboratory results, and other pregnancy-related medical records that she created or altered on her computer.
Henson often initiated contact with the prospective adoptive parents with whom she had been matched by the adoption agencies and law firms. On one occasion, Henson engaged in a lengthy relationship with the prospective adoptive mother, meeting on one occasion, and exchanging approximately 800 text messages over a five-month period. Henson continued to communicate with this prospective adoptive mother up to the day she had falsely claimed she was being induced in Oklahoma City, knowing that this family had traveled from Kansas to Oklahoma City to be present during the delivery. On at least two occasions, Henson requested the prospective adoptive mothers accompany her in the delivery room when she knew that there would not be a delivery. In fact, after her arrest, Henson admitted that she had previously undergone a tubal ligation procedure several years before committing the adoption fraud.
Henson was charged by indictment on August 21, 2012, with 18 counts of mail fraud, wire fraud, and misuse of a social security number. Henson pled guilty to mail fraud on January 7, 2013.
This case was investigated by the Federal Bureau of Investigation and was prosecuted by Assistant United States Attorney Charles Brown.
Cherokee County Armed Robbery Crew Arrested and Charged with Federal CrimesRead the Press Release
Department of Justice
Office of Public AffairsTYLER, Texas – Four Jacksonville, Texas men have been indicted and arrested in connection with a violent crime spree targeting area businesses in the Eastern District of Texas announced U.S. Attorney John M. Bales today.
Jonathan Roshard Brown, 21, Maurice Deshun Jones, 30, Willie Duane Rogers, 24, and Michael Dangelio Johnson, 25, were named in an 8-count indictment returned by a federal grand jury on Apr. 24, 2013. The defendants will be arraigned on Wednesday before U.S. Magistrate Judge Judith Guthrie.
The indictment alleges that beginning on Oct. 2, 2011, Brown, Jones, Rogers and Johnson conspired together to commit robbery, which unlawfully obstructed, delayed and affected commerce in violation of federal law. The defendants are specifically alleged to have committed four armed robberies in Jacksonville during this crime spree which began on Oct. 2, 2011 when Brown, Jones and Rogers stole $9,465 from the Wal-Mart Supercenter in Jacksonville. On May 25, 2012, Rogers and Jones were stopped for a traffic violation in Jacksonville. Rogers was arrested for driving without a valid driver license and Jones was arrested for being a felon in possession of a firearm. A loaded handgun was found protruding from underneath the front passenger seat of the vehicle. On Nov. 2, 1012, Brown, Jones and Rogers robbed the Razorback Grocery on Hwy 69 in Jacksonville. Brown brandished a handgun and demanded money from the owner. Razorback Grocery suffered a loss of approximately $16,000 in cash and $6,900 in Texas lottery tickets. On Nov. 16, 2012, Brown, Jones, Rogers and Johnson again robbed the owner of the Razorback Grocery while he was waiting int eh commercial drive-thru line at the Austin Bank on West Commerce Street in Jacksonville. During the robbery Brown fired a handgun, striking the victim. The bullet passed through the victim’s hand, throat and shoulder. The victim survived after being airlifted to a Tyler hospital. The defendants obtained an undetermined amount of cash from the victim’s vehicle. The armed robbery resulted in the closure of Razorback Grocery and the temporary closure of Austin Bank. On Nov. 23, 2012, Brown and jones attempted to rob the owner of the Fast Fuel on Hwy 69 in Jacksonville. The owner was able to strike Brown and flee. From Mar. 19 to Mar. 23, 2013, Rogers, through a series of telephone calls recorded by law enforcement, attempted to bribe a witness in the investigation by offering a payment in exchange for the witness recanting a statement to investigators.
Jones was arrested on May 5, 2013 near Bullard, Texas. Rogers was arrested on May 5, 2013 in Jacksonville. Brown and Johnson have been in state custody at the Cherokee County Jail on related charges.
The defendants are each charged with one count of Hobbs Act conspiracy. Jones is also charged with being a felon in possession of a firearm, two counts of Hobbs Act robbery, and one count of brandishing a firearm during a violent crime. Brown is also charged with three counts of Hobbs Act robbery and two counts of brandishing a firearm during a violent crime. Rogers is also charged with two counts of Hobbs Act robbery, two counts of brandishing a firearm during a violent crime, and one count of obstruction of a criminal investigation. Johnson is also charged with one count of Hobbs Act robbery and one count of brandishing a firearm during a violent crime. Under federal law, where there are multiple counts of brandishing a firearm in a crime of violence, the first conviction is punishable by a minimum of seven years in federal prison, and additional convictions are punishable by a minimum of 25 years in prison, and each sentence must be served consecutively to any other sentence. The Hobbs Act violations each carry a maximum of 20 years in federal prison. The felon in possession charge carries a term of up to 10 years in federal prison. The obstruction of justice charge is punishable by a term of up to five years in federal prison.
This case is being prosecuted as part of the Project Safe Neighborhoods Initiative. Project Safe Neighborhoods is aimed at reducing gun and gang violence, deterring illegal possession of guns, ammunition and body armor, and improving the safety of residents in the Eastern District of Texas. Participants in the initiative include community members and organizations as well as federal, state and local law enforcement agencies.
This case is being investigated by the FBI East Texas Gang Initiative and the Jacksonville Police Department with assistance from the Cherokee County District Attorney’s Office. This case is being prosecuted by Assistant U.S. Attorney Richard Moore.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.
Caregiver Pleads Guilty to FraudRead the Press Release
PORTLAND, Ore. – A caregiver who concealed the death of an elderly man in her care by burying his body, has pleaded guilty to the theft of more than $200,000 in Social Security retirement benefits paid on his behalf. Carel June Cody, 47, of Cottage Grove, pleaded guilty in federal court this morning to bank fraud, theft of government funds, and aggravated identity theft. Cody admitted stealing the benefits since 1996, forging the man’s signature on checks payable to herself, and lying to a federal agent to conceal the man’s death. Cody has remained in custody since her arrest in May 2012. Sentencing is scheduled for July 29, 2013, at 9:00 a.m.
According to documents filed by the government, Cody was the caregiver for John Arnold when he died sometime between 1994 and 1996. Instead of alerting authorities, Cody enlisted the help of others to bury his body on private property and conceal his death. Since that time, she has been stealing Arnold’s Social Security benefits. The investigation regarding the death of Mr. Arnold was conducted by the Douglas County Sheriff’s Office, and to date no charges have been brought against Cody related to the manner of Mr. Arnold’s death or the disposal of his body.
The plea agreement anticipates that Cody’s sentencing guideline range will be 21-27 months in prison, in addition to the 24-month mandatory prison sentence for aggravated identity theft. The government will be seeking the maximum sentence under the sentencing guidelines. The plea agreement also requires Cody to pay $203,528 in restitution including relinquishing her federal retirement account of approximately $36,000 to the government to be applied towards her restitution obligation.
Cody’s husband Ernest Cook pleaded guilty to receiving stolen property and is scheduled to be sentenced July 30, 2013, at 10:00 a.m.
The case was investigated by the Social Security Administration Office of Inspector General, Office of Investigations, the Douglas County Sheriff’s Office, and the Roseburg Police Department, and is being prosecuted by Special Assistant United States Attorney Helen L. Cooper, as part of a partnership venture between the Social Security Administration Office of General Counsel and the United States Attorney’s Office.
Business Owner Failed to Pay Withheld Employee Taxes to IRSRead the Press Release
ERIE, Pa. -A resident of Fairview, Pennsylvania, pleaded guilty in federal court to charges of violating federal income tax laws, United States Attorney David J. Hickton announced today.
Kevin Hanlon, 47, pleaded guilty to three counts before Senior United States District Judge Maurice B. Cohill, Jr.
In connection with the guilty plea, the court was advised that Hanlon failed to make payroll tax payments to the Internal Revenue Service on behalf of his employees at KH Express, LLC and CJT Logistics, Incorporated from 2005 through 2008. According to the Indictment, although payroll taxes (including income, medicare and social security taxes) had been withheld from employee pay, Hanlon failed to pay over to the IRS approximately $473,647.32 of the employee payroll taxes that had been withheld from 2005 through 2008.
Judge Cohill scheduled sentencing for August 12, 2013 at 2:30p.m. The law provides for a total sentence of 15 years in prison, a fine of$750,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offenses and the criminal history, if any, of the defendant.
Pending sentencing, the court continued Hanlon on bond.
Assistant United States Attorney Marshall J. Piccinini is prosecuting this case on behalf of the government.
The Internal Revenue Service, Criminal Investigation conducted the investigation that led to the prosecution of Hanlon.
Bismarck Man Sentenced for Sex Crime of Coercion & EnticementRead the Press Release
BISMARCK – U.S. Attorney Timothy Q. Purdon announced that on May 6, 2013, Aaron E. Masser, 29, Bismarck, N.D., was sentenced by U.S. District Judge Daniel L. Hovland on a charge of coercion and enticement. Masser pleaded guilty to the charge on Feb. 19, 2013.
Judge Hovland sentenced Masser to serve four years and nine months in federal prison, to be followed by five years of supervised release. Masser was ordered to pay a $100 special assessment to the Crime Victim’s Fund.
From June 2012 until August 2012, Masser communicated through Facebook and text messaging with someone he believed to be a 13-year-old female. The female was actually an undercover member of the Bismarck Police Department. Masser, through his communications, arranged a meeting with the juvenile in a Bismarck park to engage in sexual activity. When Masser arrived at the park to meet the juvenile, he was met by members of the Bismarck Police Department and agents from Homeland Security Investigations and was immediately placed under arrest.
This investigation was initiated by the North Dakota Internet Crimes Against Children Task Force and was a cooperative effort of Homeland Security Investigations and the Bismarck Police Department.
This case was brought as a 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.
Assistant U.S. Attorney Gary Delorme prosecuted the case.
Bank Teller Charged with Embezzling Money from BankRead the Press Release
MINNEAPOLIS—Last week in federal court, a 64-year-old woman from the southeastern Minnesota community of Wykoff was charged with embezzling approximately $35,520 from the Security State Bank where she was employed as the head teller. On May 3, 2013, Cheryl Lynn Holzer was charged with one count of bank embezzlement.
Allegedly, between December 2010 and February 2012, Holzer took bundles of cash from the bank’s vault for her personal use. She worked at the bank, located in Wykoff.
If convicted, Holzer faces a potential maximum penalty of 30 years in prison. Any sentence will be determined by a federal district court judge. This case is the result of an investigation by the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney Thomas Calhoun-Lopez.
A defendant, of course, is presumed innocent until he or she pleads guilty or is proven guilty at trial.Ashton Pleads Gulty to Kidnapping Resulting in Death, Firearms Charge in Federal Court in St. GeorgeRead the Press Release
ST. GEORGE, UT – Paul Ashton, age 34, of St. George, Utah, pleaded guilty to kidnapping resulting in death – aiding and abetting and discharging a firearm – aiding and abetting in relation to a crime of violence Monday afternoon in federal court in St. George in connection with the October 2010 kidnapping and death of Bradley Eitner.
Ashton, who waived indictment, was charged in a two-count Felony Information unsealed Monday afternoon during court proceedings. The first count of the Information charged Ashton with aiding and abetting in the kidnapping resulting in death of Eitner on Oct. 31, 2010. The count alleged Ashton transported the victim from Utah to Arizona where he was killed. The second count alleged Ashton aided and abetted in the use and discharge of a firearm during the kidnapping. Eitner was 43 at the time of his death.
As a part of the plea agreement filed in court Monday afternoon, Ashton admitted that Eitner was at his home in St. George, along with another individual who was not involved in his criminal conduct. Eitner was asleep (passed out) on his couch, according to the plea agreement. Ashton admitted that he and the other individual lifted Eitner off the couch to carry him to Ashton’s truck. Ashton admitted he banged Eitner’s head against the frame of the door at least once. He also admitted placing Eitner in the back of the pick-up truck and slamming the tailgate against Eitner’s head at least once. Ashton and the other individual then drove around with Eitner in the back of the truck, according to the plea agreement.
Ashton admitted the other individual urged him to either take Eitner to a hospital or to the homeless shelter. Ashton admitted he told the other individual he was going to smash Eitner’s head with a rock and beat his head with a shovel. Ashton admitted stopping the pick-up truck, retrieving a rock, and striking Eitner in the head with the rock. Ashton then drove to the other individual’s house, dropped him off, and drove away with Eitner still in the back of the pick-up.
Ashton admitted that during the same night, he drove to the home of an accomplice and the two then drove Eitner to Arizona to a location in the desert with the intention of killing him. According to Ashton, they assisted the victim out of the truck in a secluded, remote location where Ashton’s accomplice shot him twice with a rifle. Ashton admitted that his accomplice pushed Eitner off an embankment and they left him there, hidden in a rock crevice.
Eitner’s body was discovered March 11, 2011, and an autopsy was performed March 14, 2011, by the Coconino County, Arizona, medical examiner. The medical examiner determined that the cause of Eitner’s death was blunt force head trauma and a single penetrating, gunshot wound of the head. The manner of death was homicide.
As a part of the plea agreement executed Monday, federal prosecutors agreed to recommend that the statutory mandatory minimum sentence of life in prison be imposed for the kidnapping resulting in death count of the Information. Prosecutors also agreed to recommend that the statutory minimum sentence of 10 years be imposed for the firearm count and that the sentence be served consecutive to the term of imprisonment for the first count. A sentencing date has not been scheduled.
The case is being prosecuted by the U.S. Attorney’s Office and investigated by the FBI.
Armed Robber Sentenced to 32 Years After Robbing the Same Store Twice and Firing His Gun at ClerkRead the Press Release
Tampa, Florida - U.S. District Judge Steven D. Merryday sentenced Tavis Toney today (24, Miami) to 32 years in federal prison for carrying and brandishing a firearm during a robbery of a convenience store, and for carrying, brandishing and discharging a firearm during a second robbery of the same convenience store. The court also ordered Toney to forfeit a Cobra .380 caliber semi-automatic pistol, which he used to commit the armed robberies. As part of his sentence, the court ordered Toney to pay restitution in the amount of $1,669, representing the proceeds of the criminal conduct, and damages caused to the robbed convenience store. Toney pleaded guilty on February 8, 2013.
According to court documents, on August 3, 2012, Toney and another individual robbed a BP Convenience Store/Kwik Pick Foods in Pasco County. They pointed firearms at the store clerks, and ordered all store customers on the ground. Toney and the other robber took $260 from a patron, and $750 from the store’s cash register before fleeing the scene. On August 7, 2012, Toney attempted to rob the same convenience store at gunpoint again. Wearing a hat/mask and gloves, and using the Cobra .380 caliber semi-automatic pistol, Toney ordered everyone in the store on the ground. A store clerk, who had also been robbed during the earlier robbery, managed to grab a revolver and shoot at Toney. Toney ducked, and shot at the store clerk as he ran out of the store, dropping his semi-automatic weapon as he fled.
This case was investigated by the Federal Bureau of Investigation, and the Pasco County Sheriff’s Office. It was prosecuted by Assistant United States Attorney Mark E. Bini.
Armed Career Criminal Exiled to 15 Years in PrisonRead the Press Release
Baltimore, Maryland - U.S. District Judge Ellen L. Hollander sentenced Samuel Sterling, age 35, of Baltimore, Maryland, today to 15 years in prison followed by three years of supervised release for being a felon in possession of a gun. Judge Hollander enhanced Sterling’s sentence upon finding that he is an armed career criminal based on three previous convictions for a drug offense and violent crime.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Steven L. Gerido of the Bureau of Alcohol, Tobacco, Firearms and Explosives - Baltimore Field Division; Baltimore City State’s Attorney Gregg L. Bernstein; and Baltimore Police Commissioner Anthony W. Batts.
According to his plea agreement, on April 9, 2012 Baltimore police detectives saw Sterling and an individual standing on a corner near the intersection of LaFayette and Port Streets in Baltimore, conducting what appeared to be a hand-to-hand drug transaction. When the detectives approached, Sterling ran away, throwing a gun to the ground. A short time later Sterling was taken into custody. A .32 caliber semi-automatic pistol and orange topped vials containing cocaine were subsequently seized. Sterling had previously been convicted of a felony and was prohibited from possessing a gun.
United States Attorney Rod J. Rosenstein commended the ATF, Baltimore Police Department and Baltimore City State’s Attorney's Office for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney Clinton J. Fuchs, who prosecuted the case.
Alleged Bonanno Associate Pleads Guilty to Narcotics Trafficking Crimes Carrying Sentence of 10 Years to LifeRead the Press Release
John Venizelos, also known as “John V,” “Big Man” and “John from Staten Island,” an alleged associate of the Bonanno organized crime family of La Cosa Nostra, pled guilty earlier today before U.S. Magistrate Judge Joan M. Azrack at the federal courthouse in Brooklyn to drug trafficking charges contained in a superseding indictment returned on April 3, 2013. When sentenced, Venizelos will face a statutory mandatory minimum ten-year sentence and a maximum of life imprisonment. Venizelos will also face a maximum fine of $10 million and will forfeit $148,480 and two firearms that federal agents seized from his residence.
The guilty plea was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and Brian R. Crowell, Special Agent-in-Charge of the Drug Enforcement Administration, New York (DEA).
According to the indictment and other court filings submitted by the government, Venizelos was a major Staten Island-based distributor of narcotics for a Canadian narcotics trafficking enterprise. Specifically, Venizelos was charged with narcotics and firearm-related offenses and witness tampering as a part of an indictment in which 10 members of a Montreal-based criminal enterprise that has connections with the Bonanno and Rizutto organized crime families and the Hell’s Angels have been charged with trafficking over $1 billion worth of marijuana and cocaine in the United States. Venizelos was charged with witness tampering in connection with his attempts to dissuade a co-conspirator from cooperating with law enforcement by, among other things, informing the co-conspirator about a $2 million “hit fund” set aside to murder or otherwise retaliate against any individuals who cooperated with the government.
During the course of the investigation, federal agents seized more than 80 kilograms of cocaine and approximately $10,000,000 in suspected drug proceeds. At the time of Venizelos’s arrest, agents discovered narcotics, multiple encrypted Blackberry devices, approximately $150,000 in drug proceeds, and multiple firearms in his residence – including a loaded semi-automatic handgun that had been stolen from a law enforcement officer. During the search of Venizelos’s residence, federal agents also discovered several handwritten letters addressed to Venizelos by an incarcerated associate of organized crime discussing a myriad of violent crimes committed by the author with, or on behalf of, Venizelos, including “a broad daylight kidnaping” and “torture” of an individual Venizelos suspected of stealing his drugs, threats of violence and vicious assaults against customers who owed Venizelos drug debts, and preventing a witness (through threats and intimidation) from positively identifying Venizelos for a crime that would have resulted in him serving “at least 7 years in jail.”
“Venizelos used violence and intimidation to protect his position as a major narcotics distributor. Those who challenged him were threatened, tortured, and beaten. Venizelos’s conviction underscores this Office’s strong commitment to prosecuting drug traffickers who flood our communities with narcotics, especially when those individuals have chosen a life of organized crime,” stated United States Attorney Lynch.” Ms. Lynch extended her grateful appreciation to the Drug Enforcement Administration, the New York Police Department, and New York State Police for their work on the case.
DEA Special Agent-in-Charge Crowell stated, “This is a significant guilty plea. Venizelos chose a life of crime and was involved with an international trafficking organization resulting in the seizure of stolen handguns, 80 kilograms of cocaine, and $10 million in drug cash. Venizelos had his hand in several crimes affecting our communities, and I commend our NYPD Detectives, NYSP Investigators, and Special Agents for their diligence in targeting those responsible for threatening our neighborhoods with drugs and violence.”
The government’s case is being prosecuted by Assistant United States Attorneys Steven L. Tiscione, Gina M. Parlovecchio, Amir H. Toossi, and Tanisha Payne.
The Defendant:
JOHN VENIZELOS
Age: 33