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Friday 3 May 2013
Federal Court in California Shuts Down Tax PreparerRead the Press Release
A federal court in Los Angeles has entered an order permanently barring Simon Jenkins from preparing federal income tax returns and other tax-related documents for others, the Justice Department announced today. Jenkins, who operated under the business name “Jenkins Tax Service” in Gardena , Calif., consented to the civil injunction order, which was signed by U.S. District Judge Dean D. Pregerson.
The government complaint, filed on Feb. 1, 2013, alleged that Jenkins engaged in a pattern of claiming false deductions, false credits, false expenses, and false claims for refunds on behalf of his customers for the tax years 2004 through 2008, causing the government to incur a tax loss of $238,024 for those years.
In addition to barring Jenkins from preparing tax returns, Judge Pregerson also required Jenkins to contact his customers and inform them of the entry of the Permanent Injunction within thirty days.
As noted in the complaint, in a prior related criminal proceeding, Jenkins pleaded guilty to one count of aiding and assisting in the preparation and presentation of false income tax returns. According to the plea agreement, filed in the criminal case on June 15, 2011, Jenkins agreed to enter into a binding civil injunction, barring him for life from aiding or assisting in the preparation of federal income tax returns for anyone other than himself and his legal spouse, and barring him from representing persons before the Internal Revenue Service.
In the past decade the Justice Department’s Tax Division has obtained injunctions against hundreds of tax-return preparers and tax-fraud promoters. Information about these cases is available on the Justice Department website .
Related Materials:
United States v. Simon Jenkins
Complaint for Permanent Injunction and Other Relief (PDF)
Stipulated Order of Permanent Injunction (PDF)East St. Louis Man Sentenced for Firearm OffenseRead the Press Release
Corey A. Cotton, 33, of East Saint Louis, IL, was sentenced on May 2, 2013, in federal district court, in East St. Louis, on one count of unlawful possession of a firearm by a previously convicted felon, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today.
Cotton was sentenced to 71 months in prison, three years’ supervised release, a $100 special assessment, and a $200 fine. Cotton, who previously pled guilty on December 14, 2012, also agreed to the forfeiture of the firearm. The charges stem from a September 27, 2011, incident when law enforcement officials attempted to conduct a traffic stop on Cotton in East St. Louis. Initially, Cotton sped off. After coming to a stop several blocks away, he exited the vehicle, fleeing from officers on foot. While running from officers, Cotton discarded a firearm in a wooded area, which was recovered by pursuing officials.
This case was investigated by the Federal Bureau of Investigation and was prosecuted by Assistant United States Attorney Daniel T. Kapsak.
Detroit Man Pleads Guilty in Heroin Trafficking SchemeRead the Press Release
JOHNSTOWN, Pa. - A resident of Detroit, Mich., pleaded guilty in federal court to a charge of violating federal narcotics laws, United States Attorney David J. Hickton announced today.
Chivon Buttrom, 32, pleaded guilty to one count before United States District Judge Kim R. Gibson.
In connection with the guilty plea, from the spring of 2011 to May 15, 2012, Buttrom, along with co-defendants, conspired to distribute and possess with intent to distribute heroin.
Judge Gibson scheduled sentencing for Oct. 23, 2013, at 10:30 a.m. The law provides for a maximum total sentence of 20 years in prison and a fine of $1,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Stephanie L. Haines is prosecuting this case on behalf of the government.
The Laurel Highlands Resident Agency of the Federal Bureau of Investigation, the Pennsylvania State Police and the Indiana Police Department conducted the investigation that led to the prosecution of Buttrom. Other agencies participating in this investigation included the Pennsylvania Attorney General’s Office, the Cambria County Drug Task Force, the Cambria County Sheriff’s Department, the Cambria County District Attorney’s Office, the Indiana County Drug Task Force, and the Indiana County District Attorney’s Office.
Denver Strip Club DJ Sentenced to Prison for Possession of Child PornographyRead the Press Release
DENVER – Walden Allen Schmidt, age 46, of Denver, Colorado, was sentenced yesterday by U.S. District Court Judge Robert E. Blackburn to serve 97 months (over 8 years) in federal prison for possession of child pornography, U.S. Attorney John Walsh and FBI Denver Acting Special Agent in Charge Steven Olson announced. Judge Blackburn ordered Schmidt to serve 10 years on supervised release at the conclusion of his prison sentence. He was also ordered to pay $5,000 to victims of his crimes. Schmidt appeared at the sentencing hearing free on bond, but was remanded into custody at the hearing’s conclusion.
On April 9, 2012, Schmidt was indicted by a federal grand jury in Denver on child exploitation charges. On December 20, 2012, he pled guilty to possession of child pornography. He was sentenced on Thursday, May 2, 2013.
According to court records, including the stipulated facts contained in the plea agreement, Schmidt obtained over 13, 000 images of child pornography using peer-to-peer file-sharing software. He also distributed child pornography to an undercover FBI agent. Schmidt worked as a DJ at a local strip club.
“People from all walks of life have been caught possessing child pornography,” said U.S. Attorney John Walsh. “Regardless of their station in life, if they exploit children they will be held accountable.”
“The nation’s children are our most vulnerable victims,” said FBI Denver Acting Special Agent in Charge Steven Olson. “The FBI remains committed to working with our state and local law enforcement partners and the United States Attorney’s Office to aggressively investigate all cases involving the sexual exploitation of children.”
This case was investigated by the Federal Bureau of Investigation (FBI). The case was prosecuted by Assistant U.S. Attorney Ryan Bergsieker.
This case was brought as part of Project Safe Childhood (PSC), a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, PSC marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about PSC, please visit http://www.justice.gov/psc/ For more information about Internet safety education, please visit http://www.justice.gov/psc/resources.html and click on the tab "resources."
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Danville Man Convicted of Conspiracy to Commit MoneyRead the Press Release
Laundering And Harboring, Transporting, And Employing Illegal Aliens
The United States Attorney’s Office for the Middle District of Pennsylvania, announced that Wally Nguyen, age 48, of Danville was convicted yesterday in federal court for conspiracy to commit money laundering and to harbor, transport, and employ illegal aliens, as well as separate counts of transporting illegal aliens, harboring illegal aliens, and aiding and abetting the unlawful employment of illegal aliens. The offenses of conviction were committed from January 2004 through January 2008.
The jury also returned a special verdict ordering Wally Nguyen to forfeit $50,000 to the United States, as well as two properties located in Danville that were used to facilitate the crimes.
The indictment charged that Wally Nguyen engaged in a conspiracy whereby his conduct acted to promote and conceal the profits of the underlying criminal activity. That underlying criminal activity involved the operation of a temporary employment agency known as “H&T” which recruited, employed, transported, and harbored an illegal work force. “H&T” provided hundreds of illegal temporary employees to various businesses throughout the Middle District of Pennsylvania over a period of several years. In furtherance of the conspiracy, Nguyen knowingly provided housing and transportation for the illegal workers and paid the illegal work force in cash on a weekly basis. H also engaged in a scheme to defraud the Commonwealth of Pennsylvania and the United States Government of revenue. The scheme included the filing of false Pennsylvania tax documents and the avoidance of reporting requirements.
Wally Nguyen faces a statutory maximum term of 25 years and fines in the amount of $750,000. A sentencing date has not been scheduled.
The charges resulted from a joint investigation by the U.S. Immigration and Custom Enforcement’s (ICE) Homeland Security Investigations (HSI), United States Department of Labor, United States Department of Health and Human Services - Office of the Inspector General, and the Pennsylvania State Police.
The case was prosecuted by Assistant United States Attorney Michelle Olshefski.
Curtis Keith Tichenor Found Guilty in U.S. Federal CourtRead the Press Release
The United States Attorney's Office announced that on May 2, 2013, in Missoula, after a federal district court trial before Chief U.S. District Judge Dana L. Christensen, CURTIS KEITH TICHENOR, a 52-year-old resident of Helena, was found guilty of robbery, possessing and brandishing a firearm in furtherance of a crime of violence, and being a felon in possession of a firearm. Sentencing is set for August 7, 2013. He is currently detained.
At trial, the following evidence and testimony was presented to the jury.
On the morning of July 14, 2012, TICHENOR robbed the Silver Dollar Bar in Missoula. He entered the bar wearing a blue coat and a mask. He pointed a handgun at the bartender and demanded all of the money from the till. The bartender complied with TICHENOR's demand and gave him approximately $4,775.
TICHENOR left the bar and got into his blue Camaro, which was parked in an alley to the Southwest of the Silver Dollar. His girlfriend was a passenger in the car and TICHENOR told her he had just committed a robbery. He threw the gun, mask, and money into her lap. TICHENOR left Missoula by way of the Orange Street on-ramp and drove west toward Spokane on Interstate 90. Several miles outside of Missoula, he pulled over and hid the coat and mask under some bushes alongside the road.
After he hid the coat and mask, TICHENOR and his girlfriend traveled to Spokane, where they stayed for a few days. TICHENOR used money from the robbery to buy methamphetamine and heroin, which both he and his girlfriend used while they stayed at a hotel in Spokane. After spending a few days in Spokane, TICHENOR and his girlfriend returned to Helena, where both of them lived at that time.
When he got back to Helena, TICHENOR hid the remaining robbery proceeds at his brother's residence. After TICHENOR got arrested in Helena on July 23, 2012, he asked his brother to retrieve the money, give some to his girlfriend, and put some on his books at the Helena jail.
On July 23, 2012, TICHENOR and his girlfriend were arrested outside a hotel in Helena. TICHENOR was in possession of a firearm, which witnesses identified as the same gun used during the robbery of the Silver Dollar Bar nine days earlier.
In late October 2012, information on TICHENOR was provided information to law enforcement officers about the robbery in Missoula. Based on that information, the officers were able to find the coat and mask that TICHENOR had hidden after the robbery along I-90 west of Missoula. The bartender from the Silver Dollar Bar identified the coat and mask as the items worn by the perpetrator of the robbery. The bartender also identified the gun seized from TICHENOR following his arrest in Helena on July 23, 2012, as the gun used during the robbery. The firearm was a entury Arms, model P-64, 9 mm handgun.
Assistant U.S. Attorney Timothy J. Racicot prosecuted the case for the United States.
TICHENOR faces possible penalties of 20 years in prison, a $250,000 fine and 5 years supervised release on the robbery count; a mandatory minimum of 7 years to life in prison, a $250,000 fine, and 5 years supervision consecutive to other sentences on other counts for the possessing and brandishing a firearm in furtherance of a crime of violence count; and 10 years in prison, a $250,000 fine and 3 years supervised release on the felon in possession of a firearm count.
The investigation was a cooperative effort between the Missoula Police Department, the Helena Police Department, the Lewis & Clark County Sheriff's Office, and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Businessmen Convicted in Securities Fraud SchemeRead the Press Release
BOSTON – The chief executive officer of California-based Vida Life International, Ltd., and a self-described financing consultant to small and emerging companies were convicted today for their role in a securities fraud scheme.
John C. Jordan, 62, of Cameron Park, California, and James Prange, 62, of Greenbush, Wisconsin, were convicted following an eight-day jury trial. Jordan was convicted of conspiracy to commit securities fraud, four counts of wire fraud, and mail fraud. Prange was convicted of three counts of conspiracy to commit securities fraud and eight counts of wire fraud for his role in transactions involving Vida Life and two other publicly- traded companies, China Wi-Max Communications, Inc., and the Small Business Company, Inc. U.S. District Court Judge Nathaniel M. Gorton scheduled sentencing for August 8, 2013.
Last month, executives of those companies pleaded guilty to conspiracy to commit security fraud for their roles in the scheme. Steven Berman, 50, of Hillsboro, Ohio was the chief executive officer of China Wi-Max; Karen Person, 62, of Las Vegas, Nevada, was the chief executive officer of the Small Business Company, Inc.; and Richard Kranitz, 69, of Grafton, Wisconsin, was a board member and lawyer for China Wi-Max.
The defendants were convicted for their roles in a conspiracy to pay secret kickbacks to an investment fund representative in exchange for having the investment fund buy stock in publicly-traded companies that traded on the over-the-counter securities market. The kickbacks were concealed through the use of sham consulting agreements and other fraudulent documents. What the defendants did not know was that the purported investment fund representative was actually an undercover agent with the Federal Bureau of Investigation.
The convictions followed a year-long investigation focusing on preventing fraud in the micro-cap stock markets. Microcap companies are small publicly-traded companies whose stock often trades at pennies a share. Fraud in the microcap markets is of increasing concern to regulators as such markets have proven to be fertile grounds for fraud and abuse. This is, in part, because accurate information about microcap stocks may be difficult for the average investor to find, since many microcap companies do not file financial reports with the SEC.
“It matters not whether the stock is trading at pennies per share or hundreds of dollars. Fraud is fraud and will be stringently regulated by federal authorities,” said United States Attorney Carmen M. Ortiz. “We will continue to work with our counterparts to identify and prosecute individuals engaged in schemes with the aim to manipulate the securities market and defraud investors.”
“Boston FBI agents initiated an undercover operation purposefully aimed at identifying corporate insiders engaged in the illegal manipulation of stock prices,” said Richard DesLauriers, Special Agent in Charge of the FBI’s Boston Division. “These convictions send a message that no one who is engaged in illegal activity while participating in the markets, including CEO’s, traders, fund managers, equities analysts, lawyers and publicists, is exempt from justice. The FBI’s use of undercover operations and other investigative tools to protect the integrity and transparency of financial markets will continue. During these difficult economic times, now, more than ever, the well-being of the global economy rests on the diligent enforcement of laws designed to ensure the fair and orderly operation of the capital markets.”
The statutory maximum penalties for the securities fraud conspiracy charges are 25 years in prison, followed by three years of supervised release and a $250,000 fine and the statutory maximum penalties for mail and wire fraud are 20 years in prison, followed by three years of supervised release and a $250,000 fine.The Securities and Exchange Commission, which conducted a parallel civil investigation alongside the FBI undercover operation, cooperated with criminal authorities in bringing these charges, and charges against 10 other defendants who participated in the kickback scheme. Six of the defendants have already pleaded guilty to charges arising out of their involvement in the scheme. The Financial Industry Regulatory Authority (“FINRA”) provided assistance with the trial.
United States Attorney Carmen M. Ortiz and Richard DesLauriers, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, announced the conviction today. The case was prosecuted by Assistant U.S. Attorneys Sarah E. Walters, Stephen E. Frank, and Vassili Thomadakis of Ortiz’s Economic Crimes Unit.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
Brooksville Woman Admits Defrauding State and Federal Assistance ProgramsRead the Press Release
COVINGTON, KY - A Brooksville, KY., woman admitted in federal court she concealed information from federal authorities, for several years, in order to fraudulently obtain state and federal benefits.
Patty Jo Ruf, 42, pleaded guilty Thursday to one count of Supplemental Security Income (SSI) fraud.
Ruf admitted she intentionally concealed her true living arrangement from agents with the Social Security Administration (SSA) in order to collect SSI and Medicaid benefits, on behalf of her children, in amounts greater than she was entitled to receive.
According to the plea agreement, Ruf repeatedly told agents she had separated from her husband and was not sharing living expenses. In reality, Ruf lived with her husband and received financial support from him. Had SSA agents been aware of the true living arrangement, the eligibility of Ruf’s children would have been greatly reduced. The fraud spanned from November 1999 until December 2010.
SSI is an income assistance program designed to provide financial assistance to elderly and disabled individuals who meet the program’s eligibility requirements. Kentuckians who are eligible for SSI also qualify for benefits under the Medicaid Program.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, and Guy P. Fallen, Special Agent in Charge, Social Security Administration, Office of Inspector General, jointly announced the guilty plea.
The investigation was conducted by the SSA, Office of Inspector General. Assistant U.S. Attorney Chris Nasson represents the U.S. Attorney’s Office in this case.
Sentencing for the defendant is scheduled for September 19, 2013. Supplemental Security Income fraud carries a maximum of five years in prison. However, the court must consider the U.S. Sentencing Guidelines and the federal statutes before imposing a sentence.
Attorney General Eric Holder to Participate in Quintet Meeting of Attorneys GeneralRead the Press Release
Attorney General Eric Holder is traveling to Auckland, New Zealand, for the Fifth Annual Meeting of the Quintet of Attorneys General of the United States, the United Kingdom, Canada, Australia and New Zealand. The central theme of the Quintet meeting will be strategies for combatting sexual violence against women and children. The Attorneys General will be exchanging best practices for domestic investigations and prosecutions of these serious crimes, as well as working to improve their joint response to transnational sexual violence, including in the contexts of human trafficking, online child pornography and armed conflicts.
“The Quintet of Attorneys General is one of our most important channels for enhancing cooperation with key allies in the fight against terrorism and transnational crime,” said Attorney General Holder. “One of my highest priorities as Attorney General has been to work to prevent and to punish sexual violence against women and children. I greatly value this opportunity to meet with my counterparts from the United Kingdom, Canada, Australia and New Zealand – countries with which we share both common values and a common legal tradition – to discuss how we can improve our cooperation, with each other and with countries around the world, in the vital effort to fight sexual violence against women and children.”
Under the leadership of Attorney General Holder, the Justice Department has made significant strides in punishing and preventing sexual violence as well as assisting victims of sexual violence, including through the Sexual Assault Forensic Examination Protocol (SAFE), the Sexual Assault Backlog Initiative, the Defending Childhood Initiative, the expanded Project Safe Childhood as well as the Global Alliance Against Child Sexual Abuse Online. Fifty countries now participate in the Global Alliance Against Child Sexual Abuse Online which Attorney General Holder co-founded with European Union Commissioner Cecilia Malmstrom in 2012.
The Quintet will also focus on other forms of violent crime, including gun violence, as well as on victims’ rights and on the use of technology in prosecutions. In addition, experts will report on the Quintet’s ongoing collaboration against cybercrime and on the use of asset forfeiture to halt the financing of criminal and terrorist groups.
The goal of the Quintet meetings is to seek practical steps that can be taken to improve the abilities of the five countries to investigate and prosecute criminal and terrorist activity. Themes of prior Quintet meetings have included: the use of national security information in terrorism prosecutions; improving mutual legal assistance to fight cybercrime; strategies for countering violent extremism; and cross-jurisdiction actions against organized crime groups.
The U.S. Strategy to Combat Transnational Organized Crime specifically references the importance of supporting multilateral senior law enforcement exchanges to promote the sharing of criminal intelligence and enhance cooperation, such as the Quintet of Attorneys-General and the Strategic Alliance Group, established with the United Kingdom, Canada, New Zealand and Australia. Prior meetings of the Quintet have taken place in the United Kingdom, the United States, Australia and Canada.
On his return trip from New Zealand, Attorney General Holder will meet with U.S. Navy Admiral Samuel J. Locklear III, Commander of the U.S. Pacific Command (PACOM), and other officials to review ongoing law enforcement collaboration between the Department of Justice and PACOM, and to plan future cooperation in the region. The Attorney General and Admiral Locklear will continue their discussions on how they are working collaboratively to counter terrorism, transnational crime and narcotics trafficking in the Pacific region.
Armed Career Criminal Sentenced to 15 Years for Federal Firearms ViolationsRead the Press Release
BOSTON – A former Mattapan man was sentenced today in federal court for being a felon in possession of a firearm.
Aylis Dryden, 27, was sentenced by U.S. District Judge Richard G. Stearns to 15 years in prison, followed by three years of supervised release. In January 2013, Dryden pleaded guilty to being a felon in possession of a firearm and ammunition in violation of federal gun laws.
At approximately 8:00 p.m. on April 7, 2010, four Boston Police officers were on routine patrol in an unmarked cruiser in the vicinity of the Heath Street housing development in Jamaica Plain when they observed a large group of people gathered, drinking from open containers of alcohol. The officers observed Dryden act suspiciously and make adjustments to his center front waistband, prompting one of the officers to ask Dryden if he was carrying a gun in his waistband. Although Dryden initially denied having a gun, he inadvertently revealed it when he lifted his shirt at the officers’ request. Ultimately, officers seized the gun as he attempted to flee. Dryden, a previously convicted felon, was arrested and transported in a cruiser, where the officers found additional ammunition.
United States Attorney Carmen M. Ortiz and Eugenio A. Marquez, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms & Explosives, Boston Field Office, and Boston Police Commissioner Ed Davis, made the announcement today. The case was prosecuted by Assistant U.S. Attorneys Michelle L. Dineen Jerrett and Lisa Asiaf Schlatz of Ortiz’s Health Care Fraud Unit.
Algerian National Extradited from Thailand to Face Federal Cybercrime Charges in Atlanta for “SpyEye” VirusRead the Press Release
ATLANTA –Hamza Bendelladj, an Algerian national also known as “Bx1,” will be arraigned on Federal cybercrime charges for his role in developing, marketing, distributing, and operating the malicious computer virus “SpyEye.”
“No violence or coercion was used to accomplish this scheme, just a computer and an Internet connection,” said United States Attorney Sally Quillian Yates. “Bendelladj’s alleged criminal reach extended across international borders, directly into victims’ homes. In a cyber-netherworld, he allegedly commercialized the wholesale theft of financial and personal information through this virus which he sold to other cybercriminals. Cybercriminals take note; we will find you. This arrest and extradition demonstrates our determination to bring you to justice.”“Hamza Bendelladj has been extradited to the United States to face charges of controlling and selling a nefarious computer virus designed to pry into computers and extract personal financial information,” said Acting Assistant Attorney General Mythili Raman. “The indictment charges Bendelladj and his co-conspirators with operating servers designed to control the personal computers of unsuspecting individuals and aggressively marketing their virus to other international cybercriminals intent on stealing sensitive information. The extradition of Bendelladj to face charges in the United States demonstrates our steadfast determination to bring cybercriminals to justice, no matter where they operate.”
“The FBI has expanded its international partnerships to allow for such extraditions of criminals who know no borders,” stated Mark F. Giuliano, Special Agent in Charge, FBI Atlanta Field Office. “The federal indictment and extradition of Bendelladj should send a very clear message to those international cybercriminals who feel safe behind their computers in foreign lands that they are, in fact, within reach.”
Bendelladj, 24, was indicted by a Federal grand jury in Atlanta, GA. on December 20, 2011. The 23-count indictment charges him with one count of conspiring to commit wire and bank fraud, ten counts of wire fraud, one count of conspiracy to commit computer fraud, and 11 counts of computer fraud. Bendelladj was apprehended at Suvarnabhumi Airport in Bangkok, Thailand, on January 5, 2013, while he was in transit from Malaysia to Egypt. The indictment was unsealed on May 1, 2013. Bendelladj was extradited from Thailand to the United States on May 2, 2013, and will be arraigned in United States District Court before United States Magistrate Judge Janet F. King.According to court documents, the SpyEye virus is malicious computer code or “malware,” which is designed to automate the theft of confidential personal and financial information, such as online banking credentials, credit card information, usernames, passwords, PINs and other personally identifying information. The SpyEye virus facilitates this theft of information by secretly infecting victims’ computers, enabling cybercriminals to remotely control the computers through command and control (C&C) servers. Once a computer is infected and under the cybercriminals’ control, a victim’s personal and financial information can be surreptitiously collected using techniques such as “web injects,” which allow cybercriminals to alter the display of web pages in the victim’s browser in order to trick them into divulging personal information related to their financial accounts. The financial data is then transmitted to the cybercriminals’ C&C servers, where criminals use it to steal money from the victims’ financial accounts.
The indictment alleges that from 2009 to 2011, Bendelladj and others developed, marketed and sold various versions of the SpyEye virus and component parts on the Internet and allowed cybercriminals to customize their purchases to include tailor-made methods of obtaining victims’ personal and financial information. Bendelladj allegedly advertised the SpyEye virus on Internet forums devoted to cybercrime and other criminal activities. In addition, Bendelladj allegedly operated C&C servers, including a server located in the Northern District of Georgia, which controlled computers infected with the SpyEye virus. One of the files on Bendelladj’s C&C server in the Northern District of Georgia allegedly contained information from approximately 253 unique financial institutions.
If convicted, Bendelladj faces a maximum sentence of up to 30 years in prison for conspiracy to commit wire and bank fraud; up to 20 years for each wire fraud count; up to five years for conspiracy to commit computer fraud; up to five or ten years for each count of computer fraud; and fines of up to $14 million dollars.
Members of the public are reminded that the indictment contains only allegations. A defendant is presumed innocent of the charges, and it will be the government’s burden to prove a defendant’s guilt beyond a reasonable doubt at trial.
This case is being investigated by Special Agents of the Federal Bureau of Investigation.
Special Assistant United States Attorney Nicholas Oldham and Assistant United States Attorney Scott Ferber of the Northern District of Georgia, and Trial Attorney Carol Sipperly of the Criminal Division’s Computer Crime and Intellectual Property Section are prosecuting the case. Valuable assistance was provided by the Criminal Division’s Office of International Affairs, which worked with its international counterparts to effect the extradition.
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.
Adventist Health Pays United States and State of California $14.1 Million to Resolve False Claims Act AllegationsRead the Press Release
Adventist Health System/West, dba Adventist Health, and its affiliated hospital White Memorial Medical Center have agreed to pay the United States and the state of California $14.1 million to settle claims that they violated the False Claims Act, the Justice Department announced today. Adventist Health is headquartered in Roseville, Calif., in the Eastern District of California, and operates 19 hospitals and over 150 clinics in California, Hawaii, Oregon and Washington. White Memorial Medical Center is a teaching hospital located in Los Angeles.
The settlement announced today resolves allegations that Adventist Health improperly compensated physicians who referred patients to the White Memorial facility by transferring assets, including medical and non-medical supplies and inventory, at less than fair market value. Additionally, Defendant White Memorial paid referring physicians compensation that the United States contended was above fair market value to provide teaching services at its family practice residency program. The United States alleged that these payments violated the Anti-Kickback Act and Stark Statute, and by extension, the False Claims Act. Approximately $11.5 million of the settlement will be paid to the U.S. Government, most of which will benefit the Medicare Trust Fund. The remaining $2.6 million will be paid to California’s Department of Health Care Services.
The Anti-Kickback Act prohibits offering, paying, soliciting or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid and/or other federally-funded programs. The Stark Statute prohibits a hospital from submitting claims for patient referrals made by a physician with whom the hospital has an improper financial arrangement. Both the Anti-Kickback Act and Stark Statute are intended to ensure that a physician’s medical judgment is not compromised by improper financial incentives and is instead based on the best interests of the patient.
“Kickbacks and other unlawful financial arrangements cost taxpayer dollars and undermine the integrity of medical judgments,” said Stuart F. Delery, the Acting Assistant Attorney General for the Civil Division. “The Department of Justice is committed to making sure that physician referrals do not involve payments made in violation of federal law.”
“The setttement announced today underscores one of the key purposes of the Stark and Anti-Kickback laws – to ensure that the judgment exercised by health care providers is based on legitimate patient needs and is not influenced by illegal payments,” said Benjamin B. Wagner, U.S. Attorney for the Eastern District of California.
“Payouts made by hospitals and clinics – as the government alleged in this case – raise substantial concerns about physician independence and objectivity,” said Ivan Negroni, Special Agent in Charge of the Office of Inspector General, U.S. Department of Health and Human Services San Francisco region. “Taxpayers and vulnerable patients rightfully expect such payments to be investigated and pursued.”
The settlement announced today resolves a lawsuit filed in the Eastern District of California under the qui tam, or whistleblower, provisions of the False Claims Act. These provisions allow private citizens to bring civil actions on behalf of the United States and share in any recovery. The whistleblowers in this case will collectively receive $2,839,219 of the recovery. The lawsuit is captioned U.S. ex rel. Hector Luque et al. v. Adventist Health et al. No. 2:08CV1271 (E.D. Cal.).
As part of the settlement, White Memorial has entered into a comprehensive five-year Corporate Integrity Agreement with the Office of Inspector General of the U.S. Department of Health and Human Services to ensure its continued compliance with federal health care benefit program requirements.
This resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover more than $10.3 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 are over $14.2 billion.
This case was handled by the United States Attorney’s Office for the Eastern District of California, the Justice Department’s Civil Division, and the Office of Inspector General of the Department of Health and Human Services. The claims settled by this agreement are allegations only, and there has been no determination of liability.
Thursday 2 May 2013
Witness Tampering and Drug Trafficking Lands Houston Man in Federal Prison for 28 YearsRead the Press Release
BROWNSVILLE, Texas – Julian Luna-Nieto, 44, has been handed a significant federal sentence for methamphetamine trafficking as well as conspiring to tamper with witnesses by using intimidation and threats, United States Attorney Kenneth Magidson announced today. Luna-Nieto, a legal permanent resident from Houston, pleaded guilty Sept., 21, 2012, admitting he used intimidation and threats with the intent to influence and prevent testimony in an official proceeding.
Today, U.S. District Judge Andrew S. Hanen, who accepted the guilty plea, handed Luna-Nieto a 28-year federal prison term for each of the two charges which will be served concurrently. In considering the sentence, Judge Hanen noted the threats he made and that he was the leader of the group involved in smuggling very pure methamphetamine.
On Feb. 16, 2012, Luna-Nieto was a passenger in a vehicle that attempted entry into the U.S. through the Gateway International Bridge in Brownsville, Texas. Approximately 12.62 kilograms (27.7 pounds) of crystalized methamphetamine was found hidden in the vehicle. Luna-Nieto admitted he received the loaded vehicle in Mexico and arranged to transport the narcotics to Houston.
While in custody and after being indicted on the narcotics charges, Luna-Nieto coordinated with other inmates to prepare a threat letter against a cooperating witness in an attempt to influence the witness’s testimony. That letter was intercepted by the U.S. Marshals Service. The investigation revealed another threat letter against another cooperating witness with the intent to influence that second witness’s testimony.
The investigation was conducted by Customs and Border Protection, Homeland Security Investigations and the U.S. Marshals Service. Assistant United States Attorney Joseph Leonard is prosecuting the case.
Wilmington Man Sentenced for Multiple Robberies - Alan JohnsonRead the Press Release
RALEIGH- United States Attorney Thomas G. Walker announced that in federal court yesterday ALAN JOHNSON, 23, was sentenced by United States District Chief Judge Terrence W. Boyle to 608 months imprisonment; 5 years supervised release, and was ordered to pay an $800.00 special assessment.
On January 8, 2013, JOHNSON was found guilty by a jury of Possession with Intent to Distribute a Quantity of Marijuana and Carrying a Firearm in Furtherance of a Drug Trafficking Crime for an offense that occurred on July 10, 2011. JOHNSON was also found guilty of Conspiracy to Rob a Business Engaged in Interstate Commerce, Robbery of a Business in Interstate Commerce and Carrying a Firearm in Furtherance of a Crime of Violence for an offense that occurred on July 21, 2011. He had previously pled guilty to Possession of a Firearm by a Felon for an offense that occurred on August 26, 2011.
On July 10, 2011, JOHNSON and others broke into the home of a man in Wilmington, North Carolina attempting to rob him of drugs and money. During the course of the home invasion, the victim was pistol whipped when he denied having marijuana. After relenting and giving the defendants a quantity of marijuana, JOHNSON demanded to know where the rest of the drugs were. When the victim was adamant that he had given up all the narcotics he had in his possession, JOHNSON shot the victim four times. The victim was able to run out of his home and escape.
On July 21, 2011, JOHNSON and two other men entered Able Auto Insurance Agency in Wilmington, North Carolina. The subjects held employees and customers at gunpoint while demanding the businesses’ money. After robbing the business of approximately $5,700, the men fled in a car.
During the course of the investigation into these two events, investigators interviewed co-defendants who confessed to their roles in the robberies. Those statements led law enforcement to a Dollar General store where JOHNSON and his co-defendants bought sunglasses to wear immediately prior to the Able Auto Insurance Agency Robbery. Upon arrest, JOHNSON was found in possession of a firearm. He was questioned about the two incidents and confessed to his participation in the robberies.
Investigation of this case was conducted by the Wilmington Police Department and the Bureau of Alcohol, Tobacco, Firearms, and Explosives. Special Assistant United States Attorney Charity Wilson is serving as prosecutor for the government.
Ms. Wilson is a prosecutor with the New Hanover County District Attorney's Office. District Attorney Ben David has assigned her to the United States Attorney's Office to prosecute federal Project Safe Neighborhood cases and other violent crime cases.
Wessington Springs Man Sentenced for Firearm OffenseRead the Press Release
United States Attorney Brendan V. Johnson announced that a Wessington Springs, South Dakota, man convicted of Possession of a Firearm by a Prohibited Person was sentenced on May 1, 2013, by U.S. District Judge Roberto A. Lange. Jonathan Tyrrell, age 54, was sentenced to 12 months and one day of imprisonment to be followed by 18 months of supervised release, a $2,000 fine, and a $100 special assessment to the Federal Crime Victims Fund.
Tyrrell was indicted for the above offense by a federal grand jury on October 10, 2012, and pled guilty to the charge on February 12, 2013. The charge stems from an incident that took place on December 15, 2011, when Tyrrell was stopped by the Jerauld County Sheriff. Methamphetamine, marijuana, and four firearms were found in his vehicle. Tyrrell tested positive for use of controlled substances.
The investigation was conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant U.S. Attorney Kathryn N. Rich prosecuted the case.
Tyrrell was immediately turned over to the custody of the U.S. Marshal's Service.
Virginia Teen, Charged as Adult, Sentenced for Church ArsonRead the Press Release
Jean-Claude Bridges pleaded guilty earlier this year to deliberately setting a church on fire and was sentenced this morning in the U.S. District Court for the Western District of Virginia in Danville, Va. Bridges was sentenced to serve two years in prison, two years of supervised release and ordered to pay $141,773.68 in restitution .
Bridges, 18, of Henry County, Va., pleaded guilty to one count of destroying a religious property by fire. Prior to his guilty plea, the court granted a government motion to transfer Bridges to adult status for criminal prosecution. The defendant was 17-years-old when the criminal conduct occurred.
“The freedom to practice the religion that we choose in a safe environment without being subjected to hateful acts is among our nation’s most cherished rights,” said Roy L. Austin, Jr., Deputy Assistant Attorney General of the Justice Department’s Civil Rights Division. “Anyone who violates this right will be prosecuted to the fullest extent of the law.”
“Mr. Bridges’ racial bias led him to commit the dangerous crime of arson,” United States Attorney Timothy J. Heaphy said today. “When he set fire to the New Holy Deliverance Outreach Ministry, he endangered neighbors and first responders. This act of prejudice offended the entire community. This office will protect the civil rights of everyone and vigorously prosecute crimes like that committed by Mr. Bridges. Racism has no place in Axton or anywhere else in the Western District of Virginia.”
According to filings in the case, on May 20, 2012, at approximately 1:20 a.m., Bridges and another juvenile intentionally set fire to New Holy Deliverance Outreach Ministry, a church with a predominantly African American congregation, located in Axton, Va. In pleading guilty to this offense, Bridges admitted that he burned down New Holy Deliverance Outreach Ministry because of the race, color and ethnic characteristics of its congregants.
The investigation of the case was conducted by the Henry County Department of Public Safety, the Henry County Sheriff’s Office and the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant U.S. Attorney Thomas Cullen, assisted by Trial Attorney Christopher Lomax of the Department of Justice’s Civil Rights Division, will prosecute the case for the United States.
Virginia Teen Charged as Adult, Sentenced for Church ArsonRead the Press Release
DANVILLE – Jean Claude Bridges pleaded guilty earlier this year to deliberately setting a church on fire and was sentenced this morning in the United States District Court for the Western District of Virginia in Danville. Bridges was sentenced to serve two years in prison, two years of supervised release and ordered to pay $141,773.68 in restitution.
Bridges, 18, of Henry County, Va., pleaded guilty to one count of destroying a religious property by fire. Prior to his guilty plea, the court granted a government motion to transfer Bridges to adult status for criminal prosecution. The defendant was 17-years-old when the criminal conduct occurred.
“Mr. Bridges’ racial bias led him to commit the dangerous crime of arson,” United States Attorney Timothy J. Heaphy said today. “When he set fire to the New Holy Deliverance Outreach Ministry, he endangered neighbors and first responders. This act of prejudice offended the entire community. This office will protect the civil rights of everyone and vigorously prosecute crimes like that committed by Mr. Bridges. Racism has no place in Axton or anywhere else in the Western District of Virginia.”
“The freedom to practice the religion that we choose in a safe environment without being subjected to hateful acts is among our nation’s most cherished rights,” said Roy L. Austin, Jr., Deputy Assistant Attorney General of the Justice Department’s Civil Rights Division. “Anyone who violates this right will be prosecuted to the fullest extent of the law.”
According to filings in the case, on May 20, 2012, at approximately 1:20 a.m., Bridges and another juvenile intentionally set fire to New Holy Deliverance Outreach Ministry, a church with a predominantly African American congregation, located in Axton, Va. In pleading guilty to this offense, Bridges admitted that he burned down New Holy Deliverance Outreach Ministry because of the race, color and ethnic characteristics of its congregants.
The investigation of the case was conducted by the Henry County Department of Public Safety, the Henry County Sheriff’s Office and the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant U.S. Attorney Thomas Cullen, assisted by Trial Attorney Christopher Lomax of the Department of Justice’s Civil Rights Division, will prosecute the case for the United States.
Violent Drug Dealers Arrested for Drug Trafficking in New BedfordRead the Press Release
BOSTON – A complaint was unsealed today charging two men, one from Bourne and the other from New Bedford, with narcotics trafficking. The complaint resulted from the efforts of federal, state and local authorities to reduce violence and drug trafficking in the New Bedford area.
Francisco Monteiro, a/k/a Cisco, 32, of Bourne, is charged with conspiracy to distribute heroin and Junior Lopes, 34, of New Bedford, is charged with conspiracy to distribute heroin. U.S. District Court Magistrate Judge Jennifer C. Boal scheduled an initial appearance for June 4, 2013. The maximum penalty under the statute is a mandatory minimum sentence of 20 years and up to life in prison, a minimum of 10 years supervised release and a fine of up to $20 million.
According to court documents, Monteiro and Lopes are charged with conspiring to distribute over 100 grams of heroin. It is alleged that on February 15, 2013, Monteiro and Lopes arranged and facilitated the sale of almost 100 grams of heroin to a cooperating witness in New Bedford. The DEA recorded telephone calls to Monteiro in which he agreed to provide heroin to a cooperating witness. Monteiro and Lopes then drove with the cooperating witness to an address in New Bedford where the heroin sale was completed. Furthermore, Monteiro and Lopes planned and arranged for the sale of an additional 50 grams of heroin to the cooperating witness that was to take place on February 25, 2013, although the sale was not completed.As detailed in the complaint, Monteiro and Lopes have extensive criminal histories of violent crimes, including armed robberies of other drug dealers to obtain money to fund their drug dealing activities. Monteiro has prior convictions for drug distribution and unlawful possession of a firearm. In 2003, Lopes was convicted in U.S. District Court in Boston for gun and drug trafficking and received a sentence of 130 months in prison and is currently on supervised release for those offenses.
United States Attorney Carmen M. Ortiz; John J. Arvanitis, Special Agent in Charge of the Drug Enforcement Administration, Boston Field Division; Colonel Timothy P. Alben, Superintendent of the Massachusetts State Police; C. Samuel Sutter; Bristol County District Attorney; Sherriff Thomas M. Hodgson of Bristol County; Chief Dennis R. Woodside of the Bourne Police Department; and Chief Richard M. Stanley of the Wareham Police Department, made the announcement today.
This case is being prosecuted by Christopher Pohl of Ortiz’s Organized Crime Strike Force Unit.
United States Files False Claims Act Lawsuit <br /> Against the Largest For-Profit Hospice Chain in the United StatesRead the Press Release
The United States has filed suit against Chemed Corporation and various wholly owned hospice subsidiaries, including Vitas Hospice Services LLC and Vitas Healthcare Corporation, alleging false Medicare billings for hospice services, the Justice Department announced today. Vitas is the largest for-profit hospice chain in the United States and provides hospice services to patients in 18 states (Alabama, California, Colorado, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Kansas, Michigan, Missouri, New Jersey, Ohio, Pennsylvania, Texas, Virginia and Wisconsin) and the District of Columbia. Chemed, which is based in Cincinnati, Ohio and also owns Roto-Rooter Group Inc., a national drain cleaning and plumbing service company, acquired Vitas in 2004.
The Medicare hospice benefit is available for patients who elect palliative treatment (medical care focused on providing patients with relief from pain and stress) for a terminal illness, and have a life expectancy of six months or less if their disease runs its normal course. When a Medicare patient receives hospice services, that individual no longer receives services designed to cure his or her illness. Medicare reimburses for different levels of hospice care, including continuous home care, also called crisis care, which is available for patients who are experiencing acute medical symptoms resulting in a brief period of crisis. Crisis care is available when a patient’s acute medical symptoms require the immediate and short-term provision of skilled nursing services in order to keep the patient at home. The reimbursement rate for crisis care services is the highest daily rate a hospice can bill Medicare, and hospices are paid hundreds of dollars more on a daily basis for each patient they certify as having received crisis care services rather than routine hospice services.
The government’s complaint alleges that Chemed and Vitas Hospice knowingly submitted or caused the submission of false claims to Medicare for crisis care services that were not necessary, not actually provided, or not performed in accordance with Medicare requirements. According to the complaint, the companies set goals for the number of crisis care days that were to be billed to Medicare. The companies also allegedly used aggressive marketing tactics and pressured staff to increase the numbers of crisis care claims submitted to Medicare, without regard to whether the services were appropriate or were actually being provided. For example, the complaint contends that Vitas billed three straight days of crisis care for a patient, even though the patient’s medical records do not indicate that the patient required crisis care and, indeed, reflect that the patient was playing bingo part of the time.
In addition, the government’s complaint alleges that Chemed and Vitas knowingly submitted or caused the submission of false claims for hospice care for patients who were not terminally ill. The companies allegedly paid bonuses to staff based on the number of patients enrolled in the program and based on patients who were admitted for longer lengths of stay, and took adverse employment actions against marketing representatives who did not meet monthly hospice admissions goals. According to the Complaint, these business practices resulted in the admission of patients who were not eligible for hospice care. As an example, the Complaint alleges that Vitas admitted a patient to hospice who showed no signs of a terminal condition and was described in Vitas’ own records as, “very healthy given her age.”
As a result of the conduct alleged in the complaint, the government contends that Chemed and Vitas violated the False Claims Act and misspent tens of millions of taxpayer dollars from the Medicare program.
“The Medicare hospice benefit is intended to provide patients nearing the end of life with pain management and other palliative care to make them as comfortable as possible,” said Stuart F. Delery, Acting Assistant Attorney General for the Civil Division. “Too often, however, we hear reports of companies that abuse this critical service by using aggressive marketing tactics to push patients into services they don’t need in order to get higher reimbursements from the government. The Department of Justice will take swift action to protect taxpayer dollars and make sure that Medicare benefits are available to those who truly need them.”
The United States’ suit is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover more than $10.3 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 are over $14.2 billion.
This matter was investigated by the Commercial Litigation Branch of the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Western District of Missouri, the U.S. Attorney’s Office for the Northern District of Texas the U.S. Attorney’s Office for the Central District of California, and the Department of Health and Human Services’ Office of Inspector General. The claims asserted against Chemed and Vitas are allegations only, and there has been no determination of liability.
The lawsuit is captioned United States v. Vitas Hospice Services LLC, et al. (W.D. Mo.).
United States Attorney Brendan Johnson Issues 2012 Annual ReportRead the Press Release
United States Attorney Brendan V. Johnson announced the release of the 2012 Annual Report for the District of South Dakota. The report highlights the work and accomplishments of the U.S. Attorney’s Office for calendar year 2012.
An area of increased emphasis in 2012 was human trafficking. There has been a concerted effort with law enforcement partners to identify these crimes and to aggressively prosecute the offenders engaged in both the supply and demand side of commercial sex trafficking. The annual report outlines the successful work on some key cases.
Additionally, the report highlights the work in other high priority areas, such as ongoing efforts to make tribal communities safer. Over the past four years, these efforts have led to a 131% increase in prosecutions on the Rosebud Sioux Indian reservation and an increase of 82% on Pine Ridge.
“I’m proud to work with a staff of dedicated professionals who are committed to delivering justice, prosecuting criminals, and making our state a safer place to live,” said Johnson. “The accomplishments summarized in this report are the result of the hard work of my staff and the federal, state and local agencies that are vital to our joint success.”
The report also highlights the enhanced community outreach efforts, progress in the areas of victim’s rights and advocacy, and a description of the work performed by the Civil and Appellate Divisions.
Tyler Levi Smith Sentenced in U.S. District CourtRead the Press Release
The United States Attorney's Office announced that during a federal court session in Billings, on May 2, 2013, before U.S. District Judge Richard F. Cebull, TYLER LEVI SMITH, a 31-year-old resident of Billings, appeared for sentencing. SMITH was sentenced to a term of:
Prison: 57 months
Special Assessment: $100
Supervised Release: 3 years
SMITH was sentenced in connection with his guilty plea to being a felon-in-possession of a firearm.
In an Offer of Proof filed by Assistant U.S. Attorneys Marcia K. Hurd and Mark S. Smith, the government stated it would have proved at trial the following:
In 2004, SMITH was convicted of felony drug offenses and as a result he was prohibited from possessing firearms.
On March 8, 2012, SMITH was found passed out in a car parked in a parking lot in Billings. The car was running and SMITH was passed out in the back seat with vomit on him with his head resting on a case of beer. On the front passenger floor board in plain view was a silver semi automatic pistol. Law enforcement was unable to rouse SMITH and had to use a tool to open the door. After they opened the door and woke SMITH, they found out that he was on probation and contacted his state probation officer. SMITH was arrested for DUI and found to have a BAC of .139. The pistol, a Bryco Arms model Jennings Nine 9mm, and two magazines and ammunition were seized. The gun belonged to SMITH's cousin.
The cousin had earlier text discussions with SMITH about SMITH purchasing the gun from him. The cousin had a party at his residence on the evening of March 7 and into the early morning hours of March 8 and SMITH was at the party. The cousin was showing the gun around and then put it in a drawer in his kitchen while SMITH was watching. The next day, the cousin found that the gun and the magazines were missing.
When questioned, SMITH claimed that he didn't know how the gun got in his car.
Because there is no parole in the federal system, the "truth in sentencing" guidelines mandate that SMITH will likely serve all of the time imposed by the court. In the federal system, SMITH does have the opportunity to earn a sentence reduction for "good behavior." However, this reduction will not exceed 15% of the overall sentence.
The investigation was conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Two Toledo Men Charged with Violating the Clean Air ActRead the Press Release
Two Toledo men were charged with violations of the Clean Air Act and regulations involving the removal and disposal of asbestos-containing material, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
Charged are John Mayer, age 52, and Timothy Bayes, age 32.
“These defendants are accused of ignoring laws and regulations that are in place to protect the public,” Dettelbach said. “Protecting the environment, including the air we breathe, is a priority of my office and the Justice Department.”
The indictment alleges that between September 2010 and December 2010, Mayer directed individuals to remove asbestos-containing insulation from boilers, duct work and pipes in a former manufacturing facility in Toledo, Ohio, in order that Mayer could sell the scrap metal from those items. This work was performed in violation of the federal Clean Air Act regulations regarding asbestos abatement, according to the indictment.
It is alleged that the asbestos-containing insulation was not wetted at any time during the removal process; the City of Toledo, Division of Environmental Services, was not notified prior to the work commencing; and, that there was not on site a person trained in the provisions of the federal asbestos regulations.
Bayes, at Mayer’s direction, dumped approximately 82 garbage bags of the asbestos-containing insulation at various locations throughout Toledo in violation of the requirement that such material be disposed at a site operated in accordance with federal law, according to the indictment.
If convicted, each defendant’s sentence will be determined by the court after review of factors unique to each case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
The investigating agencies in this case are the U.S. EPA Criminal Investigation Division, the Ohio Bureau of Criminal Identification and Investigation, and the Ohio Environmental Protection Agency, all members of the Northwest Ohio Environmental Crimes Task Force. The case is being handled by Assistant United States Attorney Thomas A. Karol and Special Assistant United States Attorney James J. Cha.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Two Former Employees of Clinical Laboratory Admit Roles in Multimillion-Dollar Cash-For-Referral SchemeRead the Press Release
Former Biodiagnostic Laboratory Services LLC Sales Reps Acknowledge Bribing Physicians
NEWARK, N.J. – Two former sales representatives of Biodiagnostic Laboratory Services LLC (BLS) admitted today to conspiring with others to bribe doctors to refer patient blood samples to BLS, U.S. Attorney Paul J. Fishman announced.
Peter Breihof, 42, of Nutley, N.J., and William Dailey, 41, of Wall, N.J., both pleaded guilty before U.S. District Judge Stanley R. Chesler to Informations charging them with conspiracy to violate the Anti-Kickback Statute and the Federal Travel Act.
According to documents filed in this case and statements made in court:
On April 9, 2013, federal agents arrested BLS president and part-owner, David Nicoll, 39, of Mountain Lakes, N.J.; Scott Nicoll, 32, of Wayne, N.J., a senior BLS employee and David Nicoll’s brother; and Craig Nordman, 34, of Whippany, N.J., a BLS employee and the CEO of Advantech Sales LLC – an entity allegedly used by BLS to make illegal payments. They were charged with participating in a long-running scheme to bribe doctors to refer patient blood samples to BLS and order unnecessary tests, resulting in tens of millions of dollars in profit for the company. The Complaint noted that two former BLS employees – Breihof and Dailey – had agreed to plead guilty and had cooperated in the investigation.
Between 2006 and 2013, BLS, headquartered in Parsippany, N.J., and entities it funded paid millions of dollars to physicians to induce them to refer patient blood samples to BLS. From these referrals, BLS received tens of millions of dollars from private health insurance companies and Medicare. Numerous physicians were bribed under the guise of lease, service, and/or consulting agreements. Under the lease and service agreements, between 2006 and 2009, physicians were frequently paid thousands of dollars a month by BLS for space in medical offices that BLS did not need or actually use and to perform routine blood drawing services that had little real dollar value. Breihof and Dailey admitted today to using phony lease and service agreements to bribe physicians to send their patients’ blood samples to BLS. Breihof and Dailey also admitted that they paid various physicians a fee per test on behalf of BLS in order to induce those physicians to order more of the blood tests than they otherwise would have.
Breihof and Dailey each face a maximum potential penalty of five years in prison. Each count also carries a maximum $250,000 fine, or twice the gross gain or loss from the offense. In addition, Breihof has agreed to forfeit $1,179,556, and Dailey has agreed to forfeit $558,405. Sentencing for both defendants is scheduled for Sept. 19, 2013.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford; U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Tom O’Donnell; IRS–Criminal Investigation, under the direction of Acting Special Agent in Charge Shantelle P. Kitchen, and the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Maria Kelokates, with the investigation leading to today’s guilty pleas.
The government is represented by Senior Litigation Counsel Andrew Leven, Assistant U.S. Attorney Melissa Jampol, and Deputy Chief Jacob T. Elberg of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark, as well as Assistant U.S. Attorney Barbara Ward of the office’s Asset Forfeiture and Money Laundering Unit.
The charges and allegations against the other defendants are merely accusations and they are presumed innocent unless and until proven guilty.13-182
Defense counsel:
Breihof: Henry Klingeman Esq., Newark
Dailey: Kevin G. Walsh Esq., NewarkBreihof, Peter Information
Dailey, William InformationTwo Eagle Pass Residents Enter Guilty Pleas in Connection with Maverick County Bribery, Kickback and Bid-Rigging SchemeRead the Press Release
Maverick County Precinct One Commissioner Eliaz Maldonado and Maverick County Probation Officer and general contractor Javier Gonzalez each face up to ten years in federal prison and up to a $250,000 fine after pleading guilty this morning to a bribery charge in connection with an alleged bribery, kickback and bid-rigging scheme that caused a loss to Maverick County of thousands of dollars announced United States Attorney Robert Pitman and FBI Special Agent in Charge Armando Fernandez.
Appearing before United States Magistrate Judge Victor Garcia in Del Rio, Maldonado, age 52, pleaded guilty to one count of receiving a bribe. According to court records, in 2010 and 2011, Maldonado, through his employees, admitted to manipulating the bidding process to guarantee that contractors he chose would be awarded Maverick County construction contracts. Those contractors deposited the checks issued to them by Maverick County and then made cash payments to Maldonado. The private contractors submitted inflated bids to Maverick County in order for there to be sufficient funds to perform the construction work, make a profit, and pay the bribe to Maldonado. The contracts in total involved more than $100,000 of county funds and Maldonado received a payment between $500 and $3,500 at least twelve times during the scheme.
Gonzalez, age 42, pleaded guilty to one count of paying a bribe. By pleading guilty, Gonzalez admitted that in 2010 and 2011, he entered into a scheme with different Maverick County officials whereby he would be guaranteed county construction contracts in return for paying money to the official whose precinct the construction work was supposed to be performed in. According to court documents, after Gonzalez was selected to do the work, he would be paid via checks issued by Maverick County. Gonzalez would deposit or cash the checks, then give the officials thousands of dollars from the money Maverick County had paid him. The contracts Maverick County awarded Gonzalez involved more than $400,000 of county funds in 2010 and 2011 combined. The total loss to Maverick County as a result of Gonzalez’ actions was approximately $156,000.
Both Maldonado and Gonzalez were admonished in court that in addition to any imprisonment or fine, they could each be ordered to pay restitution at the time of sentencing.
Maldonado and Gonzalez each remain on bond pending sentencing scheduled for October 7, 2013 before United States District Judge Alia Moses.
To date, nine individuals are awaiting sentencing after pleading guilty to charges stemming from this investigation being conducted by the Federal Bureau of Investigation and the Texas Department of Public Safety. Charges against five individuals are still pending.
Persons who have first-hand information about corruption, fraud, or bribery related to Maverick County are urged to contact the FBI at (210) 225-6741.
Assistant United States Attorney Michael Galdo is prosecuting this case on behalf of the Government.
Topeka Man Indicted on Drug, Gun ChargesRead the Press Release
TOPEKA, KAN. – A Topeka man has been indicted on drug trafficking and gun charges, U.S. Attorney Barry Grissom said today.
Michael Richard Rupp, 27, Topeka, Kan., is charged with two counts of possession with intent to distribute methamphetamine, one count of possession of a firearm in furtherance of drug trafficking and one count of unlawful possession of a firearm after a felony conviction. The crimes are alleged to have occurred in 2012 and 2013 in Shawnee County, Kan.
Upon conviction, the crimes carry the following penalties:
Possession with intent to distribute methamphetamine: A maximum penalty of 20 years and a fine up to $1 million on each count.
Possession of a firearm in furtherance of drug trafficking: Not less than five years and a maximum penalty of $250,000.
Unlawful possession of a firearm after a felony conviction: A maximum penalty of 10 years and a fine up to $250,000.The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated. Assistant U.S. Attorney Randy Hendershot is prosecuting.
Ryan M. Hawley, 24, Winfield, Kan., is charged with one count of unlawful possession of ammunition after a felony conviction. The crime is alleged to have occurred Nov. 14, 2012, in Shawnee County, Kan.
If convicted, he faces a maximum penalty of 10 years in federal prison and a fine up to $250,000. The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated. Assistant U.S. Attorney Richard Hathaway is prosecuting.
Tyrone J. Lewis, Sr., 33, Topeka, Kan., is charged with one count of unlawful possession of ammunition after a felony conviction. The crime is alleged to have occurred Jan. 19, 2013, in Shawnee County, Kan.
If convicted, he faces a maximum penalty of 10 years in federal prison and a fine up to $250,000. The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated. Assistant U.S. Attorney Richard Hathaway is prosecuting.
Bilal Keys, 43, Topeka, Kan., is charged with unlawful possession of a firearm after felony convictions. The crime is alleged to have occurred March 22, 2013, in Shawnee County, Kan.
If convicted, he faces a maximum penalty of 10 years in federal prison and a fine up to $250,000. The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated. Assistant U.S. Attorney Mike Warner is prosecuting.
In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.
Toledo Orthodontist Accused of Failing to Pay $187,000 in TaxesRead the Press Release
An indictment was filed charging Stuart Duchon, age 65, of Toledo, Ohio, with failing to collect and pay over employees’ portion of FICA taxes, as well as the employees’ withholding federal income taxes, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
Duchon owned and operated an orthodontist practice in Toledo and from 2007 to 2011, he failed to collect and pay to the Internal Revenue Service approximately $187,000 for the federal taxes withheld from his employees wages, according to the indictment.
If convicted, the defendant’s sentence will be determined by the court after review of factors unique to each case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
The investigating agency in this case is the Internal Revenue Service. The case is being handled by Assistant United States Attorney Thomas A. Karol.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Three Members of International Cyber Fraud Ring Extradited from Romania to the United StatesRead the Press Release
Romanian nationals Cristea Mircea, Ion Pieptea, and Nicolae Simion will make their first appearance before United States District Judge Edward R. Korman later today following their extradition to the United States from Romania. The defendants are charged with participating in a sophisticated multimillion dollar cyber fraud scheme that targeted consumers on U.S.-based Internet marketplace websites such as eBay.com. Their extradition followed a coordinated international takedown in December 2012, during which law enforcement officials in Romania, the Czech Republic, the United Kingdom, and Canada, acting at the request of the United States, arrested six Romanian nationals, including Mircea, Pieptea and Simion.1 The Bucharest Appeals Court ordered the extraditions of Mircea, Pieptea, and Simion on February 2, 2013. The defendants were subsequently transported to the Eastern District of New York and arraigned on March 27, 2013.
The extraditions were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and George C. Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office
As alleged in the indictment, the defendants and their coconspirators saturated Internet marketplace websites, such as eBay.com, Cars.com, AutoTrader.com, and CycleTrader.com, with detailed advertisements for cars, motorcycles, boats, and other high-value items generally priced in the $10,000 to $45,000 range. Unbeknownst to the buyers, however, the merchandise did not exist. The so-called sellers corresponded with the victim buyers by email, sending fraudulent certificates of title and other information designed to lure the victims into parting with their money. Sometimes, they pretended to sell cars from nonexistent auto dealerships in the United States and even created phony websites for these fictitious dealerships.
The indictment further describes how, after the purported sellers reached an agreement with the victim buyers, they would often email them invoices purporting to be from Amazon Payments, PayPal, or other online payment services, with wire transfer instructions. However, these invoices were also fraudulent – the members of the conspiracy used counterfeit service marks in designing the invoices so that they would appear identical to communications from legitimate payment services. The fraudulent invoices directed the buyers to send money to American bank accounts that had been opened by foreign nationals in the United States, known as “arrows.” Finally, the “arrows” would collect the illicit proceeds and send them to the defendants in Europe by wire transfer and other methods. For example, the “arrows” forwarded defendant Pieptea $18,000 cash in fraud proceeds hidden inside hollowed-out audio speakers.
According to court filings, the defendants and their coconspirators allegedly defrauded their victims of at least $2 million during the course of the conspiracy. Notwithstanding the scope of the fraud, however, one of the coconspirators boasted, in a recorded conversation, that “criminals will not be extradited from Romania to the U.S.A. . . . it will never happen.”
Each defendant is charged with conspiracy to commit substantives offenses against the United States, wire fraud, and money laundering. The defendants face a maximum sentence of 20 years’ imprisonment on each count of conviction.
“These three defendants allegedly reached across the globe to defraud Americans, pretending to be legitimate online vendors and payment providers. In reality, they were con men with a computer. The defendants’ extraditions to the United States should make clear that our efforts to protect Internet consumers do not stop at our borders,” stated United States Attorney Lynch. “Thanks to our strong international partnerships, the notion that cybercriminals will never be extradited to the United States is merely a criminal’s fantasy.” Ms. Lynch extended her grateful appreciation to the FBI for its assistance.
The Romanian government, particularly the Ministry of Justice, the Romanian Internal Intelligence Service, and the Directorate for Combating Organized Crime, provided significant assistance and support during the investigation, arrest, and extradition of the defendants. The Department of Justice’s Office of International Affairs worked with its counterparts in Romania to effect the extraditions, and the U.S. Marshals Service coordinated and transported the defendants to the United States.
The government’s case is being prosecuted by Assistant United States Attorneys Cristina Posa, Nadia Shihata. and Claire Kedeshian, and Trial Attorney Carol Sipperly of the Criminal Division’s Computer Crimes and Intellectual Property Section.
The Defendants:
CRISTEA MIRCEA
Age: 30
RomanianION PIEPTEA
Age: 36
RomanianNICOLAE SIMION
Age: 37
Romanian_____________________________
1 The charges against the defendants are merely allegations, and the defendants are presumed innocent unless and until proven guilty.
Tax Preparer, Laura A. Diggs, Sentenced for Making False Statements on Tax Returns and Assisting in the Preparation of False Tax DocumentsRead the Press Release
LAURA A. DIGGS, age 41, a resident of Paulina, Louisiana, was sentenced today by U.S. District Judge Carl J. Barbier to five years probation with the first six months to be served in home confinement for one count of false statements on tax returns and one count of assisting in the preparation of false tax documents, announced U.S. Attorney Dana J. Boente. Judge Barbier also imposed a $6,000 fine and a $200 special assessment. DIGGS has made full restitution to the Internal Revenue Service of $343,526.00.
According to court documents, from approximately 2003 through the present, DIGGS, was engaged in the business of preparing and filing income tax returns at her business, Diggs Tax Service, which was located in Luling, Louisiana. From 2007 through 2009, according to the factual basis, DIGGS prepared and filed false income tax returns for her customers, which contained false Schedule A deductions, resulted in inflated refunds for her customers to which they were not entitled.
Additionally, according to the factual basis, in the years 2007, 2008, and 2009, DIGGS signed her own taxes that falsely under-reported the business income she had received. In total, DIGGS failed to report approximately $766,761 in gross income, to which there is a total tax liability of $210,233.
The case was being investigated by agents from the Internal Revenue Service Criminal Investigation Division.
The case is being prosecuted by Assistant U. S. Attorney Matt Chester.
Statement of Manhattan U.S. Attorney Preet Bharara on the Convictions of Xing Wu Pan and Jia HouRead the Press Release
“As the jury found, Jia Hou and Oliver Pan stuck a knife into the heart of New York City’s campaign finance law by violating the prohibition against illegal campaign contributions, all to corruptly advantage the campaign of a candidate for city-wide office. Cases like this give the people of New York yet another reason to be troubled by the electoral process, and they have a right to demand fair, open, and honest elections untainted by cynical subversion of campaign finance laws. With these convictions, it is our hope that some measure of the public’s confidence can be restored. We will continue our efforts to stamp out public corruption wherever we find it. We thank the jury for their time and service, and the outstanding prosecutors who so ably tried this case.”
Xing Wu Pan and Jia Hou Verdict Statment - U.S. Attorney Bharara Audio 5.2.2013
St. Petersburg Store Clerk Convicted in Food Stamp Fraud ConspiracyRead the Press Release
Tampa, Florida - United States Attorney Robert E. O'Neill announces that a federal jury yesterday found Isam Nasser (30) guilty of one count of conspiracy to defraud the United States and to commit wire fraud, five counts of wire fraud, and five counts of food stamp fraud. The conspiracy charge carries a maximum penalty of five years in federal prison, the wire fraud charges each carry a maximum penalty of twenty years in federal prison, and each food stamp fraud charge carries a maximum penalty of one year in federal prison. Nasser will be sentenced on July 10, 2013.
According to evidence presented at trial, Mehdi Babul owned and operated Hungry Baba, LLC ("Hungry Baba") convenience store located in St. Petersburg, Florida. Nasser was a clerk at Hungry Baba. During the time frame of the conspiracy, Hungry Baba was a participant in the Supplemental Nutrition Assistance Program (SNAP) administered by the United States Department of Agriculture ("USDA"), formerly known as the Food Stamp Program.
From November 2008, through April 2010, Babul, Nasser, and others conspired and schemed to cheat SNAP by purchasing SNAP benefits from Hungry Baba customers in exchange for cash, minus a fee of approximately 50% of the total amount charged to the individual recipient’s SNAP account. This is an illegal practice known as “discounting” or “cash-back.” According to testimony introduced at trial, the estimated loss to the USDA caused by the conspirators was more than $350,000.
On March 1, 2013, Mehdi Babul pleaded guilty to one count of conspiracy to defraud the United States and to commit wire fraud. He will be sentenced on May 20, 2013.
This case was investigated by the United States Secret Service, the United States Department of Agriculture - Office of the Inspector General, the Florida Department of Law Enforcement, and the St. Petersburg Police Department. It is being prosecuted by Assistant United States Attorney Matthew J. Mueller.
St. Francis Woman Charged and Sentenced for Simple Assault and Child AbuseRead the Press Release
United States Attorney Brendan V. Johnson announced that a St. Francis, South Dakota, woman convicted of Simple Assault and Child Abuse has pled guilty to the charges and was sentenced on April 29, 2013, by U.S. District Judge Roberto A. Lange. Rita Runs Above, age 35, was sentenced to 132 days in custody, with credit for time served; 6 months of supervised release; and $110 to the Federal Crime Victims Fund.
During the time frame of March 1, 2012, and July 15, 2012, Runs Above provided alcohol to the victim, physically assaulted the victim, and placed the victim in a situation where the victim was threatened with substantial harm by another.
On August 22, 2012, Runs Above struck the victim several times as the victim was trying to leave a residence.
The investigation was conducted by Rosebud Sioux Tribe Law Enforcement Services. The case was prosecuted by Assistant U.S. Attorney Marie H. Ruettgers.
Runs Above was released from custody.
St. Francis Man Sentenced for AssaultRead the Press Release
United States Attorney Brendan V. Johnson announced that a St. Francis, South Dakota, man convicted of Assault with a Dangerous Weapon was sentenced on May 1, 2013, by U.S. District Judge Roberto A. Lange. Darius Two Eagle, age 21, was sentenced to 36 months in custody, 2 years of supervised release, and $100 to the Federal Crime Victims Fund.
Two Eagle was indicted by a federal grand jury on November 15, 2012, and pled guilty to the charge on February 5, 2013.
The conviction stems from an incident that took place on October 11, 2012, when Two Eagle assaulted the victim with a bat and rock, with intent to do bodily harm to the victim.
The investigation was conducted by Rosebud Sioux Tribe Law Enforcement Services. The case was prosecuted by Assistant U.S. Attorney Timothy M. Maher.
Two Eagle was remanded to the custody of the U.S. Marshal.
Six arrested for Drug Conspiracy involving Heroin and Methamphetamin and for Money Laundering, five additional defendants still at largeRead the Press Release
Anchorage, Alaska - U.S. Attorney Karen L. Loeffler announced today that on April 16, 2013, a federal Grand Jury in Alaska returned a 36-count indictment against 11 individuals for their involvement in a drug conspiracy involving the distribution of heroin and methamphetamine in Alaska and the Eastern District of California, along with money laundering, and conspiracy to launder proceeds of the unlawful distribution of controlled substances.
This case is related to the recently announced, “Operation Gideon IV”, a Bureau of Alcohol, Tobacco, Firearms and Explosives multi-layered initiative designed to target and remove violent criminals who illegally traffic and possess firearms and to dismantle criminal organizations operating in Stockton, California.
Those indicted include:- Phillip Dixon Jr., AKA “Cheddar”, 28, of Manteca, CA;
- George Little, AKA “Nino”, 23, of Stockton, CA;
- Gloria Sarinana, 27, of Stockton, CA;
- Justin Fisher, 28, of Stockton, CA;
- Kyle Wislon, 24, of Chugiak, AK;
- Marcos Diaz, 25, of Stockton, CA;
- Norris Drummond, JR., 21, of Stockton, CA;
- Cesar Serna, 23, of Stockton, CA;
- Anthony Mixon, AKA “Ray”, 19, of Stockton, CA; and,
- Harry Hawkins III, AKA “Paulie”, 33, of Stockton, CA.
Special Agents of Bureau of Alcohol, Tobacco, Firearms and Explosives, IRS Criminal Investigation, the Drug Enforcement Agency, Homeland Security Investigations, and the California Highway Patrol have arrested Dixon, Little, Hawkins, Sarinana, Fisher, and Wilson. Wilson and Little were in Anchorage, Alaska. The other four defendants currently in custody were arrested in Stockton, California.
According to the indictment, between April 2012 and April 2013, Dixon, Diaz, Hawkins, Mixon, Serna, Little, Drummond, and Wilson, distributed heroin in Alaska. Between November 2012 and March 2013, Dixon, Drummond, and Little distributed methamphetamine in Alaska. In December 2012, Dixon distributed methamphetamine in Alaska and in the Eastern District of California.
The indictment further alleges that Dixon, Fisher, Sarinana, Serna, Diaz, Mixon, and Drummond conspired with one another to launder the proceeds of the drug sales in an attempt to conceal and disguise the nature, source, ownership, and control of the funds, and that they in fact laundered money in connection with transfers of money from Alaska to the Eastern District of California, knowing that the money represented the proceeds of drug sales.
The case is being investigated under the purview of the Organized Crime and Drug Enforcement Task Force which is made up of personnel from the U.S. Attorney’s Office, Federal Bureau of Investigation, Drug Enforcement Administration, the Bureau of Alcohol, Tobacco, Firearms and Explosives, Homeland Security Investigations, Internal Revenue Service–Criminal Investigation, U.S. Marshals Service, U.S. Postal Inspection Service, U.S. Coast Guard, and the Anchorage Police Department.
According to Assistant U.S. Attorney Stephan Collins, Lead Organized Crime and Drug Enforcement Task Force Attorney for the District of Alaska, who presented the case to the grand jury, if convicted, the defendants face a mandatory minimum sentence of ten years prison for the drug conspiracy charge and a potential maximum of life imprisonment and a maximum sentence of 20 years imprisonment for the money laundering charges. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offense and the prior criminal history of the defendant.
An indictment is only a charge and is not evidence of guilt. A defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
Seven Wichitans Charged with Mortgage FraudRead the Press Release
WICHITA, KAN. – Seven people in Wichita have been charged in a federal mortgage fraud case, U.S. Attorney Barry Grissom said today.
An indictment unsealed here today alleges the scheme involved straw buyers and straw sellers, false loan applications and false supporting documentation submitted to lenders. Victims of the fraud included numerous banks, the Federal Housing Administration, the Federal Deposit Insurance Corporation (FDIC), the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac).
The following defendants were named in the indictment:
Manjur Alam, 45, Wichita, Kan., who is charged with one count of conspiracy, six counts of wire fraud, one count of bank fraud, one count of making a false statement to the Department of Housing and Urban Development and one count of money laundering.
Janice Young, 26, Wichita, Kan., who is charged with one count of conspiracy, one count of wire fraud and one count of making a false statement to HUD.
Bruce Dykes, 44, Wichita, Kan., who is charged with one count of conspiracy and two counts of wire fraud,
Christopher Ginyard, 27, Wichita, Kan., who is charged with one count of conspiracy and one count of wire fraud,
Henry Pearson, Sr., Wichita, Kan., who is charged with one count of conspiracy and one count of wire fraud.
Henry Pearson, Jr., 28, Wichita, Kan., who is charged with one count of conspiracy and one count of bank fraud.
Steven Pelz, who is charged with one count of conspiracy and one count of wire fraud.The indictment alleges that Alam, whose realtor license had been suspended and who was on probation for a federal conviction, was the leader of the conspiracy. He used straw sellers to purchase homes and flip the properties to straw buyers. He recruited sellers from his homeland of Bangladesh. He lured the straw sellers with promises of quick and easy profits, while he recruited straw buyers with the prospect of using the houses as investments while promising them kickbacks.
The indictment also alleges:
– Alam guided each straw buyer through the purchase process, acting as the buyer and seller agent, even though his realtor license was suspended. He falsely represented his wife as the realtor.
– The defendants were unqualified to receive mortgage loans for the homes they bought and each of them made false statements in their loan applications.
– Alam caused false Verification of Employment information and false Verification of Rent information on straw buyers to be submitted to lenders.
– None of the straw buyers used the homes as their primary residence although each indicated in loan applications that the homes would be a primary residence.
– Alam and the straw buyers submitted false invoices for repairs to title companies for property improvements.
– The proceeds from the fraudulently obtained loans resulted in losses to lenders of more than $221,000.Upon conviction the crimes carry the following penalties:
Conspiracy: A maximum penalty of 20 years in federal prison and a fine up to $250,000.
Wire fraud: A maximum penalty of 20 years and a fine up to $250,000 on each count.
Bank fraud: A maximum penalty of 30 years and a fine up to $250,000.
Making a false statement: A maximum penalty of five years and a fine up to $250,000.
Money laundering: A maximum penalty of 10 years and a fine up to $250,000.Investigating agencies included the Internal Revenue Service, Housing and Urban Development - OIG, and the Federal Housing Financing Agency - OIG. Assistant U.S. Attorney Aaron Smith is prosecuting.
In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct
Sentences for April 29, 2013Read the Press Release
Donald George Cornelius, 30, of Russell, Massachusetts, was sentenced by Federal District Court Judge Alan B. Johnson on April 29, 2013, for conspiracy to possess with intent to distribute, and to distributing marijuana. Cornelius was arrested in Cheyenne, Wyoming. He received 36 months of imprisonment, to be followed by two years of supervised release and was ordered to pay a $100.00 special assessment and a $200.00 fine. This case was investigated by the Wyoming Division of Criminal Investigation.
Anthony Swift, 56, of Chicopee, Massachusetts, was sentenced by Federal District Court Judge Alan B. Johnson on April 29, 2013, for conspiracy to possess with intent to distribute, and to distributing marijuana. Swift was arrested in Cheyenne, Wyoming. He received 18 months of imprisonment, to be followed by two years of supervised release and was ordered to pay a $100.00 special assessment and a $200.00 fine. This case was investigated by the Wyoming Division of Criminal Investigation.
Saranac Lake Man Pleads to Reciept of Child PornographyRead the Press Release
ROCHESTER, N.Y.-- U.S. Attorney William J. hochul, Jr. announced today that Michael Bombard, 24, of Saranac Lake, N.Y., pleaded guilty before U.S. District Judge Charles J. Siragusa, to receipt of child pornography. The charge carries a mandatory minimum penalty of five years in prison, a maximum penalty of 20 years and a fine of $250,000.
Assistant U.S. Attorney Tiffany H. Lee, who is handling the case, stated that between August and September 2011, Bombard engaged in sexually explicit chats with a 14 year old female he met online. The defendant requested that the girl send him sexually explicit images of herself. At the time he received the images, Bombard knew that the images constituted child pornography.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The plea is the culmination of an investigation on the part of the Federal Bureau of Investigation's Cyber Task Force, under the direction of Richard M. Frankel, Acting Special Agent in Charge.
Sentencing is scheduled for August 19, 2013 at 3:00 p.m. before Judge Siragusa.
Saranac Lake Man Pleads to Reciept of Child PornographyRead the Press Release
ROCHESTER, N.Y.-- U.S. Attorney William J. hochul, Jr. announced today that Michael Bombard, 24, of Saranac Lake, N.Y., pleaded guilty before U.S. District Judge Charles J. Siragusa, to receipt of child pornography. The charge carries a mandatory minimum penalty of five years in prison, a maximum penalty of 20 years and a fine of $250,000.
Assistant U.S. Attorney Tiffany H. Lee, who is handling the case, stated that between August and September 2011, Bombard engaged in sexually explicit chats with a 14 year old female he met online. The defendant requested that the girl send him sexually explicit images of herself. At the time he received the images, Bombard knew that the images constituted child pornography.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The plea is the culmination of an investigation on the part of the Federal Bureau of Investigation's Cyber Task Force, under the direction of Richard M. Frankel, Acting Special Agent in Charge.
Sentencing is scheduled for August 19, 2013 at 3:00 p.m. before Judge Siragusa.
Richmond Man Convicted of Attempted Armed Home Invasion Robbery of Drug DealerRead the Press Release
RICHMOND, Va. – Robert Lee Pernell, 42, of Richmond, Va., was convicted today by a federal jury of conspiracy to interfere with commerce by robbery, attempt to interfere with commerce by robbery and use, carry, brandish and discharge a firearm in furtherance of the attempted robbery.
Neil H. MacBride, United States Attorney for the Eastern District of Virginia, and Carl Vasilko, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms, and Explosives, made the announcement after the verdict was accepted by United States District Judge Robert E. Payne.Pernell faces a mandatory minimum term of 10 years of incarceration and a maximum penalty of life imprisonment when he is sentenced on July 25, 2013.
According to the evidence presented at trial, Pernell and another man, both armed with firearms, ambushed a man and woman as they returned home late at night to their Smoketree South residence, in Chesterfield, Virginia. The couple attempted to flee into the house, but one of the assailants jammed the barrel of a shotgun in the doorway, preventing it from closing. A struggle ensued just inside the doorway. The man was pushed out into the yard and one of the assailants shot a firearm at him. As this was happening, the woman fled for the back of the house and grabbed a pistol from the bedroom. Pernell, armed with a shotgun, pursued the woman and as he entered the bedroom fired the shotgun he was carrying. The woman fired the pistol she had grabbed, shooting Pernell in the arm. Pernell and his accomplice fled the house. Fearing for her life, the woman hid in the bedroom closet until the Chesterfield County Police arrived. A subsequent search of the house resulted in the discovery of approximately 116 grams of crack cocaine and over $125,000 in cash that belonged to the residents. The male victim and another male resident of the house subsequently pleaded guilty to drug trafficking charges.
This case was investigated by the Chesterfield County Police Department and the ATF. Assistant United States Attorney Olivia L. Norman is prosecuting the case on behalf of the United States.
A copy of this press release may be found on the website of the United States Attorney's Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.Rapid City Man Sentenced for Sexual AbuseRead the Press Release
United States Attorney Brendan V. Johnson announced that a Rapid City man convicted of Aggravated Sexual Abuse was sentenced on April 29, 2013, by Chief Judge Jeffrey L. Viken, United States District Court. Faron Ben Cheyenne, age 27, was sentenced to 114 months’ imprisonment and 5 years’ supervised release and ordered to pay $100 to the Federal Crime Victims fund.
In July 2011, near Wounded Knee, Cheyenne sexually abused a 16-year-old girl. He pleaded guilty on November 29, 2012.
This case was investigated by the Bureau of Indian Affairs, Office of Justice Services and the Oglala Sioux Tribe Department of Public Safety. Assistant U.S. Attorney Sarah B. Collins prosecuted the case.
Rapid City Man Sentenced for Failing to Update Sexual Offender RegistrationRead the Press Release
United States Attorney Brendan V. Johnson announced that a Rapid City man convicted of Failure to Register was sentenced on April 29, 2013, by Chief Judge Jeffrey L. Viken, United States District Court. Donald Morris Kills Warrior, age 36, was sentenced to 15 months’ imprisonment and 5 years’ supervised release and ordered to pay $100 to the Federal Crime Victims Fund.
Kills Warrior failed to update his sexual offender registration as required from August 10, 2012, to October 18, 2012. He pleaded guilty on January 15, 2013.
This case was investigated by the U.S. Marshal’s Service. Assistant U.S. Attorney Sarah B. Collins prosecuted the case.
Ramiro Nava-delgadillo Indicted for Illegal ReentryRead the Press Release
RAMIRO NAVA-DELGADILLO, age 33, a citizen of Mexico, was charged in a one-count indictment by a Federal Grand Jury today with illegal reentry by an alien previously removed, announced U.S. Attorney Dana J. Boente.
According to the indictment, on or about April 10, 2013, NAVA, an alien who had previously been removed from the United States, was found in the United States, within the Eastern District of Louisiana, without having obtained consent from the Secretary of the Department of Homeland Security to reapply for admission to the United States.
If convicted, NAVA, who was convicted of a felony prior to his previous removal, faces a maximum term of imprisonment of ten years, a fine of $250,000.00 and three years of supervised release following any term of imprisonment.
U. S. Attorney Boente reiterated that the indictment is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt.
This case was investigated by United States Immigration and Customs Enforcement, Enforcement and Removal Operations (ICE). The prosecution is being handled by Special Assistant United States Attorney Robert Weir.
(Download Indictment )
Pierre Wilbourn Pleads Guilty to Charges Related to Filing Fraudulent Claims for Oil Spill CompensationRead the Press Release
PIERRE WILBOURN, age 40, a resident of Kenner, Louisiana, pled guilty in federal court today before U.S. District Judge Carl J. Barbier to one count of conspiracy to commit mail fraud relating to a fraudulent application he made or caused to be made to the Gulf Coast Claims Facility (GCCF) for financial assistance during the aftermath of the Deepwater Horizon oil spill, announced U.S. Attorney Dana J. Boente.
According to court documents, the GCCF made disaster assistance money available to individuals and businesses affected by the oil spill resulting from the Deepwater Horizon explosion. The GCCF required individuals to verify loss of income. On October 4, 2010, WILBOURN applied for disaster assistance funds, representing that he was operating a commercial fishing business before the oil spill. However, WILBOURN had never worked as a commercial fisherman and he submitted or caused to be submitted false documentation to establish his false earnings. Based on WILBOURN’s fraudulent application, WILBOURN received approximately $20,000 to which he was not entitled.
Upon sentencing, scheduled for August 8, 2013, WILBOURN faces a maximum term of imprisonment of five years, a $250,000 fine, and three years of supervised release following imprisonment.
This case was brought as part of this District’s partnership with the National Center for Disaster Fraud (NCDF), a nationwide initiative to protect available funds and assistance for those victims of both natural and man-made disasters such as hurricanes, floods, tornadoes and the recent Gulf oil spill. If you have knowledge of fraud, waste, abuse, or allegations of mismanagement involving disaster relief operations, you can contact the NCDF by either calling the hotline at (866) 720-5721, faxing (225) 334-4707, emailing at [email protected] or in writing to National Center for Disaster Fraud, Baton Rouge, LA 70821-4909.
The case was investigated by the U.S. Postal Inspection Service and the U.S. Secret Service. The prosecution is being handled by Assistant U. S. Attorney Julia K. Evans.
(Download Factual Basis )
Operator of San Fernando Valley Medical Clinics Sentenced to 14 Years in Federal Prison for Illegally Distributing OxycodoneRead the Press Release
SANTA ANA, California – A woman who operated four medical clinics in Reseda and Northridge was sentenced today to 14 years in federal prison for distributing the powerful and widely abused prescription narcotic oxycodone.
Anush Davtyan, 53, of Encino, was sentenced by United States District Judge David O. Carter after she pleaded guilty last September to one count of conspiracy to distribute oxycodone and possess with intent to distribute oxycodone.
In a plea agreement filed with the court, Davtyan admitted that she and her common-law husband operated four clinics where people could purchase oxycodone prescriptions for cash following a medical exam.
Oxycodone is sold under brand names such as Oxycontin, Percocet and Percodan.
Cappers brought customers to one of the clinics to obtain prescriptions for oxycodone. Those prescriptions were filled, and the drugs were brought back to Davtyan’s clinic and were diverted to a dealer for later sale on the street.
Davtyan admitted that she had bribed pharmacists to fill the large number of oxycodone prescriptions generated by her clinics. In one exchange recorded by investigators, Davtyan and her husband brought a pharmacist flowers and cognac to a pharmacist and then explained to the pharmacist how the prescriptions would be filled and how the pharmacist would get paid for filling prescriptions that came from her clinics.
During the execution of search warrants on September 1, 2011, federal agents found 1,116 pills in Davtyan’s Encino home and another 7,589 pills in her Mercedes parked in her garage.
Davtyan’s co-defendant and common-law husband, Armen Ayrappetyan, remains a fugitive and is believed to be residing in Russia.
The oxycodone distribution case against Davtyan was investigated by the Federal Bureau of Investigation; the Drug Enforcement Administration; IRS - Criminal Investigation; the United States Department of Health and Human Services, Office of Inspector General; the California Department of Justice; the Los Angeles County Sheriff’s Department; the Los Angeles County Health Authority Law Enforcement Task Force (HALT); the California Medical Board; the Simi Valley Police Department; and the Ventura County Sheriff’s Department.
Release No. 13-062
Omaha Man Sentenced for Possessing a FirearmRead the Press Release
United States Attorney Deborah R. Gilg announced that on May 2, 2013, Craig Grimes, age 36 of Omaha, was sentenced to 4 years, 8 months in prison for possessing a firearm in Omaha on March 15, 2012, after having previously been convicted of a felony offense. Following the prison term, Grimes will serve three years on supervised release.
On January 21, 2011, Grimes was convicted of conspiracy to distribute marijuana in the Federal District Court of New Mexico. A term of his supervised release from that conviction authorized the United States Probation office, with or without the assistance of law enforcement, to search his residence. On March 15, 2012, officers of the Omaha Police Department and United States Probation office searched Grimes’ residence. A Rossi .357 caliber revolver was found under Mr. Grimes’ bed that contained his DNA.
Federal law makes it a felony for anyone who has been convicted of a felony offense to possess a firearm.
Newport News Man Pleads Guilty to Robbery ChargesRead the Press Release
NEWPORT NEWS, Va. – Ronald W. Carr, 38, of Newport News, Va., pleaded guilty today to twenty-eight counts of robbery without a plea agreement.
Neil H. MacBride, U. S. Attorney for the Eastern District of Virginia and Carl J. Vasilko, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Washington Field Division, made the announcement after the plea was accepted by United States District Judge Henry C. Morgan.
Carr was charged in an indictment returned on January 16, 2013, with twenty-eight counts of robbery. Carr faces a maximum penalty of 20 years in prison on each of the robbery charges when he is sentenced on September 11, 2013, in Norfolk.
In a statement of facts filed during the plea hearing, Carr admitted to robbing the following stores and restaurants between December 18, 2010 and December 27, 2012: Advance Auto Parts, Auto Zone, Bojangles', Captain D’s, Dollar General, Family Dollar, KFC, and Long John Silver’s. The stores were located in York County, Hampton and Newport News, Va. In some instances, the same franchise was robbed, but in different locations. During the robberies, Carr possessed, brandished and pointed a firearm at store employees and demanded money.
The investigation of this case was led by the ATF’s Washington Field Division, with the assistance of the York County Sheriff’s Office, Newport News Police Department and the Hampton Police Division. Assistant United States Attorney Robert E. Bradenham, II is prosecuting the case on behalf of the United States.
A copy of this press release may be found on the website of the United States Attorney's Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.New York Man Sentenced to 21 Months in Prison for Transporting Oxycodone Trafficking CashRead the Press Release
David B. Fein, United States Attorney for the District of Connecticut, announced that EMMANUEL BABE, also known as “Manny,” 40, of Mount Kisco, N.Y., was sentenced today by United States District Judge Janet C. Hall in New Haven to 21 months of imprisonment, followed by two years of supervised release, for transporting cash proceeds of an oxycodone trafficking ring.
This matter stems from “Operation Blue Coast,” an investigation headed by the Drug Enforcement Administration’s Bridgeport High Intensity Drug Trafficking Area Task Force into the large-scale trafficking of oxycodone pills from Florida to Connecticut. The investigation revealed that an individual regularly purchased oxycodone from suppliers in Florida, transported the oxycodone to Connecticut by commercial airline or automobile, and sold the pills for profit to various Connecticut-based narcotics dealers. He then transported the proceeds of his oxycodone sales from Connecticut to Florida, either by having a courier drive the money or by using commercial airline flights.
In early 2011, the Florida narcotics trafficker hired BABE to drive large amounts of U.S. currency from New York or Connecticut to Florida. BABE eventually learned that the money he was transporting were the proceeds of the narcotics trafficker’s oxycodone sales in Connecticut. BABE, who was paid approximately $750 for each trip, transported at least $150,000 in cash to Florida in an effort to disguise the source of the funds.
BABE has been detained since his arrest on September 13, 2011. On February 6, 2013, he pleaded guilty to one count of conspiracy to commit money laundering.
Twenty individuals, including two law enforcement officers and three Transportation Security Agency officers, have been charged as a result of this investigation.
This matter is being investigated by the Drug Enforcement Administration’s Bridgeport High Intensity Drug Trafficking Area Task Force, which includes personnel from the Connecticut State Police and the Bridgeport, Milford, Norwalk, Stamford and Westport Police Departments; the Drug Enforcement Administration in Florida and the U.S. Department of Homeland Security Office of Inspector General. In addition, the U.S. Marshals Service and the Greenwich, Monroe, Danbury and Waterbury Police Departments have assisted the investigation.
U.S. Attorney Fein also acknowledged the cooperation of the Westchester County Department of Public Safety and the Florida Highway Patrol, and the substantial assistance provided by the United States Attorney’s Office for the Southern District of Florida.
This case is being prosecuted in the District of Connecticut by Assistant United States Attorneys Rahul Kale and Tracy Lee Dayton.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
[email protected]New Jersey Man Sentenced to Eight-Year Prison Term for Possession of Child PornographyRead the Press Release
WASHINGTON – Gregory Loreng, 45, of Fanwood, N.J., has been sentenced to an eight-year prison term on charges of possession of child pornography, announced U.S. Attorney Ronald C. Machen Jr., Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office, and Cathy L. Lanier, Chief of the Metropolitan Police Department (MPD).
Loreng pled guilty to two counts of possession of child pornography in November 2012 in the U.S. District Court for the District of Columbia. He was sentenced on May 1, 2013 by the Honorable John D. Bates. Upon completion of his prison term, Loreng will be placed on 10 years of supervised release. He also must register as a sex offender for 15 years following his release.
According to the government's evidence, on April 23, 2012, Loreng contacted a man who he believed to be the father of an under-aged girl, using a social network site frequented by individuals who have a sexual interest in children. That man turned out to be an undercover officer with the FBI's Child Exploitation Task Force. Over the next few days, Loreng engaged in online conversations with the undercover officer. During this period, Loreng sent the officer multiple images of child pornography, including videos of adult men engaged in sexual acts with children.
Upon execution of a search warrant on the defendant’s residence in New Jersey, members of the FBI’s Child Exploitation Task Force recovered devices containing numerous additional videos and images of child pornography.
This case was brought as part of the Department of Justice's Project Safe Childhood initiative and investigated by the FBI's Child Exploitation Task Force, which includes members of the FBI's Washington Field Office and MPD. In February 2006, the Attorney General created Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the U.S. Attorney's Offices, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
In announcing the sentence, U.S. Attorney Machen, Assistant Director Parlave and Chief Lanier praised the work of the MPD Detectives and Special Agents of the FBI Child Exploitation Task Force. They also commended the efforts of Assistant U.S. Attorney Ari Redbord, who prosecuted the case.
13-156New Haven Attorney Involved in Mortgage Fraud Scheme Sentenced to 21 Months in PrisonRead the Press Release
David B. Fein, United States Attorney for the District of Connecticut, announced that DAVID KINNEY, 54, of Woodbridge, was sentenced today by Senior United States District Judge Alfred V. Covello in Hartford to 21 months of imprisonment, followed by two years of supervised release, for participating in a mortgage fraud scheme and for making false statements to federal law enforcement.
According to court documents and statements made in court, KINNEY, a New Haven-based attorney, participated in a mortgage fraud conspiracy in 2006 and 2007 by acting as the settlement agent in connection with fraudulent real estate transactions in New London County. As part of the scheme, KINNEY submitted, or caused to be submitted, materially false HUD-l settlement statements to lenders. In certain cases, KINNEY released a disbursement check before he had received the down payment listed on the HUD-1.
On November 5, 2007, in connection with the investigation of this matter, FBI special agents served KINNEY a subpoena at his New Haven office. On that date, KINNEY told agents that he had never given anyone a closing check prior to receiving the down payment money in connection with real estate closings that he handled when, in fact, he had done so on multiple occasions.
As part of his sentence, Judge Covello ordered KINNEY to pay restitution in the amount $507,155.24 and to forfeit $65,749.59.
On November 9, 2011, KINNEY pleaded guilty to one count of conspiracy and one count of making a false statement.
This case was investigated by the Federal Bureau of Investigation and the U.S. Department of Housing and Urban Development, Office of Inspector General. The case is being prosecuted by Assistant United States Attorneys Michael S. McGarry and David T. Huang.
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.
To report financial fraud crimes, and to learn more about the President’s Financial Fraud Enforcement Task Force, please visit www.stopfraud.gov.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
[email protected]Moses Lake Businessman Sentenced to Federal Prison for Failing to Report $2.6 Million in IncomeRead the Press Release
Spokane - Michael C. Ormsby, United States Attorney for the Eastern District of Washington, announced that J. Scott Vrieling, age 50, of Moses Lake, Washington, was sentenced today after having been convicted of four counts of failing to file federal income tax returns for the years 2004 through 2007. United States District Court Judge Robert H. Whaley, Jr. sentenced Vrieling to a 24-month term of imprisonment and a one-year term of court supervision following release from federal prison. Judge Whaley ordered Vrieling to pay $939,258 to the IRS for unpaid taxes, to file all delinquent income tax returns, and to pay penalties and interest in an amount to be determined by the IRS. Judge Whaley also ordered Vrieling to pay a fine in the amount of $100,000, the cost of prosecution in the amount of $14,269, and special penalty assessments in the amount of $100. Vrieling was taken into custody by the U.S. Marshal Service at the conclusion of today's sentencing hearing.
According to court records, Vrieling is the owner of Vrieling Financial located in Moses Lake, Washington. He is an independent insurance agent licensed to sell employee benefits, health insurance, and other insurance products.
By way of a four-count indictment that was returned by the grand jury in April, 2011, Vrieling was charged with four counts of failing to file federal income tax returns. Following a four-day jury trial in October, 2012, Vrieling was convicted on all counts. Evidence at trial established that Vrieling received over $2.6 million in gross income during the years 2004 through 2007. The evidence also established that Vrieling failed to file federal tax returns reporting this income and that he owed $956,258 in taxes.
Michael C. Ormsby said, "The United States Attorney's Office for the Eastern District of Washington aggressively investigates and prosecutes tax crimes. The privilege of living in the United States carries certain responsibilities, one of which is the payment of federal taxes. Everyone must pay their fair share and there are significant consequences for those who chose to cheat the system."
"There are people out there who willfully defy the tax laws based on false ideas and beliefs," said Tamera D. Cantu, Assistant Special Agent in Charge of IRS Criminal Investigation in Seattle. "Today's sentencing proves again that not fulfilling your tax obligations doesn't make them go away, it just puts you at risk of penalties, prosecution, and prison."
The investigation was conducted by the Internal Revenue Service, Criminal Investigation. The case was prosecuted by George J.C. Jacobs, III, an Assistant United States Attorney for the Eastern District of Washington.
11-CR-0057-RHW
Mobridge Man Charged with Escape from CustodyRead the Press Release
United States Attorney Brendan V. Johnson announced that a Mobridge, South Dakota, man has been indicted by a federal grand jury for allegedly escaping from the custody of the Bureau of Prisons while at the Community Alternatives of the Black Hills on April 10, 2013.
Gaylen Paul Sampson, a/k/a Thurman Paul Sampson, age 38, was indicted by a federal grand jury on April 16, 2013, for Escape from Custody. Sampson appeared before U.S. Magistrate Judge John E. Simko on April 24, 2013, and pleaded not guilty to the indictment. The maximum penalty upon conviction is 5 years of imprisonment and a $250,000 fine. The charge is merely an accusation, and Sampson is presumed innocent until and unless proven guilty.
The investigation is being conducted by the U.S. Marshal’s Service. Assistant U.S. Attorney Wayne Venhuizen is prosecuting the case. Sampson was remanded to the custody of the U.S. Marshal. A trial date has been set for July 2, 2013.