Latest Records
Newest first across public DOJ and U.S. Attorney press releases.
12 June 2013
Wayne County Man Pleads Guilty to Selling Counterfeit Merchandise OnlineRead the Press Release
BUFFALO, N.Y.- U.S. Attorney William J. Hochul, Jr. announced today that Ryan Breen, 33, of Savannah, N.Y., pleaded guilty before U.S. District Judge Richard J. Arcara to trafficking in counterfeit goods involving the sale of unauthorized merchandise from the popular FX Network Television series "Sons of Anarchy." The charge carries a maximum penalty of 10 years in prison and a $2,000,000 fine.
According to Special Assistant U.S. Attorney Fauzia K Mattingly, who is handling the case, Breen was identified as the owner and operator of various websites which offered for sale over the Internet counterfeit t-shirts and goods using the Sons of Anarchy trademark without the permission of the Twentieth Century Fox Entertainment Group, the producer and exclusive owner of the Sons of Anarchy TV series. The defendant's websites were seized by federal agents as part of a nationwide crackdown aimed at combating intellectual property theft. Through his websites, Breen had sold over $75,000 worth of customized Sons of Anarchy clothes, hats, and other items that infringed the trademark of Fox.
Sentencing is scheduled for September 27, 2013 at 1:00 p.m. before Judge Arcara.
The plea is the result of an investigation by Special Agents of Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent-in-Charge James C. Spero.Washington State Man Sentenced to 24 Months in Prison for Attempting to Send Obscene Images to A MinorRead the Press Release
LAFAYETTE, La. – United States Attorney Stephanie A. Finley announced today that Michael David Honan, 59, of Gig Harbor, Wash., was sentenced to 24 months in prison by U.S. District Court Judge Richard T. Haik for attempting to send obscene materials to a minor. Honan is also required to complete three years of supervised release and pay a $4,000 fine. Honan pleaded guilty on Nov. 27, 2012.
According to the evidence presented at the guilty plea, Honan, who traveled to Houma, La., from Washington state for work, engaged in online communication from August 2011 to September 2011 with what he thought was a 14-year-old girl. It was in fact an undercover law enforcement officer. Honan admitted to sending obscene images of himself via webcam and directing who he thought was a 14-year-old girl to websites displaying pornography. Honan was arrested in a Houma hotel Sept. 16, 2011 while chatting online with an undercover officer.
Homeland Security Investigations, the Lafayette Police Department and the Houma Police Department investigated the case. Assistant U.S. Attorney Myers P. Namie prosecuted the case.This case is part of Project Safe Childhood, a U.S. Department of Justice launched nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorneys’ offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The U.S. Attorney’s Office and the U.S. Department of Homeland Security/Homeland Security Investigations/Immigration & Customs Enforcement (ICE) encourages the public to report suspected child predators and any suspicious activity through its toll-free hotline at (866) DHS-2ICE. Investigators are available at all hours to answer hotline calls. Tips or other information can also be submitted to ICE online at http://www.ice.gov/exec/forms/hsi-tips/tips.asp.
Virginia Doctor Indicted for Perjury in Orthofix InvestigationRead the Press Release
BOSTON – A Virginia woman was charged today with making a false declaration to a grand jury.
Ilene Terrell, 65, of Fredericksburg, Va., was indicted with making a false declaration to a grand jury.
The indictment alleges that Terrell, a podiatrist, and representatives of Orthofix, Inc., manipulated patient medical records to induce Medicare to pay for claims for Orthofix bone growth stimulator medical devices that did not meet Medicare’s payment guidelines. When Terrell was asked about these matters before the grand jury, she lied, claiming that she was not aware that any records had been manipulated. Bone growth stimulators are externally-worn medical devices that help regenerate bone cells and are used to assist the healing of broken bones. Medicare only pays for a bone growth stimulator if the medical supplier provides records demonstrating that fracture healing has ceased for three or more months. If the bone may heal on its own, Medicare will not pay for a stimulator, which can cost upwards of $4,000.
On numerous occasions, Terrell prescribed a stimulator for a patient where the claim would not have met Medicare’s guidelines. When this occurred, the Orthofix territory manager, Terrell, and an employee at Terrell’s direction often manipulated the patient’s medical records, making it appear as though the stimulator was not prescribed until three months had elapsed without healing, when in fact that was not true and Medicare should not have paid the claim. On some occasions, Terrell prescribed a stimulator for a patient and the patient’s bone healed within the prohibited three-month window. When that occurred, Terrell, an Orthofix representative, and an employee at Terrell’s direction deleted references in chart notes that the patient was using the stimulator and was healing, and they created a new, fictitious note at the end of the 90-day period stating that the bone was still broken and that a stimulator would be ordered. Terrell also created fictitious prescriptions to support the bogus claims.
On May 22, 2012, Terrell testified before the grand jury. She was asked several times if she was aware that patient records had been manipulated. Terrell lied to the grand jury, emphatically denying that she manipulated patient records or that she was even aware that anyone had done so. Terrell lied about other matters as well, including her communications with an Orthofix representative about the government’s investigation and her role in obstructing an audit performed by Orthofix when the company requested that she provide medical records related to claims for bone growth stimulators.
If convicted, Terrell faces a statutory maximum penalty of five years in prison, to be followed by three years of supervised release and a $250,000 fine on each count.
United States Attorney Carmen M. Ortiz and Susan J. Waddell, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General, Office of Investigations, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney David S. Schumacher of Ortiz’s Health Care Fraud Unit.
The details contained in the Indictment are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Upper Marlboro Man Pleads Guilty to TransportingRead the Press Release
Case Prosecuted by Maryland’s Child Exploitation Task Force;
Defendant Faces Minimum Federal Sentence of 10 Years For Taking Teenager to Sex Parties
Greenbelt, Maryland – Troy Walker, a/k/a ‘Caveman,” age 48, of Upper Marlboro, Maryland, pleaded guilty today to transporting a minor with the intent to engage in prostitution.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; and Chief Mark A. Magaw of the Prince George’s County Police Department.
“Maryland’s Child Exploitation Task Force investigates many cases involving juvenile prostitutes and pursues federal prosecution because of the lengthy sentences,” said U.S. Attorney Rod J. Rosenstein. “Anyone who transports a juvenile under the age of 18 to engage in prostitution faces a mandatory minimum sentence of ten years in federal prison.”
According to his plea agreement, Walker met a 17 year old girl in March of 2012 through a friend who worked at parties hosted by Walker. Walker asked the victim to work for him at a party he was hosting. Walker hosted parties through a company called Quest For Fire. These parties were advertised as sex parties or “gang bangs” on the internet. Interested individuals would text Walker at the cell phone number listed in the ad and Walker would text back the party’s location. Guests paid for entry to a residence which would allow them to engage in sexual acts with girls provided by Walker.
In August 2012, Walker rented an apartment for the victim and had her engage in sex acts with guests at his parties. The victim’s photo was also posted in ads for the parties on the internet. Walker provided transportation for the victim to the sex parties, which included transportation from Washington, D.C. to Maryland. According to the victim, Walker assaulted her several times.
The victim worked for Walker at the parties hosted in Prince George’s County from April 1 to September 15, 2012, while she was 17 years old.
As part of his plea agreement, Walker must register as a sex offender in the place where he resides, where he is an employee, and where he is a student, under the Sex Offender Registration and Notification Act (SORNA).
Walker faces a mandatory minimum sentence of 10 years in prison, and a maximum of life in prison, followed by up to lifetime supervised release. U.S. District Judge Peter J. Messitte scheduled sentencing for August 14, 2013.
The case was investigated by the FBI-led Maryland Child Exploitation Task Force (MCETF), which was created in 2010 to combat child prostitution, and includes members from10 state and federal law enforcement agencies. The Task Force coordinates with the National Center for Missing and Exploited Children and the Maryland State Police Child Recovery Unit to identify missing children being advertised online for prostitution.
MCETF partners with the Maryland Human Trafficking Task Force, formed in 2007 to discover and rescue victims of human trafficking while identifying and prosecuting offenders. Members include federal, state and local law enforcement, as well as victim service providers and local community members. For more information about the Maryland Human Trafficking Task Force, please visit www.justice.gov/usao/md/Human‑Trafficking/index.html.
United States Attorney Rod J. Rosenstein commended the FBI and Prince George’s County Police Department for their work in the investigation. Mr. Rosenstein thanked Special Assistant U.S. Attorney LisaMarie Freitas of the U.S. Justice Department, Criminal Division, Child Exploitation and Obscenity Section and Assistant U.S. Attorney Kristi O’Malley, who are prosecuting the case.
United States Attorney to Leave OfficeRead the Press Release
BATON ROUGE, LA – United States Attorney Donald J. Cazayoux, Jr. announced today that he will be relinquishing his post as United States Attorney for the Middle District of Louisiana effective July 1, 2013. After his resignation, he plans to join a private law practice in the Baton Rouge, Louisiana area.
“It has been an enormous privilege to serve the Middle District of Louisiana as its U.S. Attorney,” Cazayoux stated. “This office, with its wonderful women and men, represents the best of public service. Being part of our great justice system, with its many dedicated local, state and federal law enforcement personnel, has been an honor. While it is personally the right time to leave for my family and me, I do so with utmost humility and gratitude for this opportunity to serve, given to me by the President and the Attorney General, at the recommendation of Senator Landrieu.”
As U.S. Attorney, Cazayoux’s priorities have been protecting Americans from terrorism and threats to national security, combating violent crime, and fighting public corruption and fraud. Cazayoux has supervised the prosecution of financial, health care, and disaster fraud. Protecting the country’s vulnerable populations – children, the elderly, hate crime victims, and victims of human trafficking and exploitation – has also been a focus of Cazayoux.
Cazayoux joined District Attorney Hiller Moore and state and local law enforcement to curtail violent crime in the City of Baton Rouge through the Brave Initiative, a community-policing effort aimed to disrupt gang activity. The Organized Crime Drug Enforcement Task Force flourished during his tenure, with over ninety-eight defendants charged with drug trafficking offenses and over $1,455,000 in property and money seized in connection with these offenses.
The Health Care Strike Force, under Cazayoux’s leadership, indicted sixty-nine defendants for committing health care fraud offenses. Over $32,400,000 was ordered to be paid back to victims, including federal agencies.
Cazayoux oversaw the public corruption prosecution and conviction of several high-profile defendants. These include: Deputy Commissioner for the Louisiana Department of Insurance; Director of Governor’s Program on Abstinence; Program Manager for Governor’s Office of Safe and Drug Free Schools and Communities; Attorney for Municipal Police Employee’s Retirement System of Louisiana; Mayor of St. Gabriel and President of the National Conference of Black Mayors; Mayor of Port Allen; Mayor of White Castle; Mayor of New Roads; Port Allen Chief of Police; Port Allen City Council Member; and Baton Rouge City Court Clerk.
During his term, Cazayoux ensured that over $17,600,000 in criminal and civil collections were collected by the Civil Division and returned to victims of crimes, the United States Treasury and other federal agencies.
Cazayoux is also the Executive Director of the National Center for Disaster Fraud (“NCDF”), located in Baton Rouge, Louisiana. The National Center for Disaster Fraud currently coordinates disaster fraud prevention and investigations for all Presidential disaster declarations in the United States.
The Middle District of Louisiana is a nine-parish region that includes the following parishes: Ascension, East Baton Rouge, East Feliciana, Iberville, Livingston, Pointe Coupee, St. Helena, West Baton Rouge, and West Feliciana. The United States Attorney's Office is responsible for representing the federal government in virtually all of the litigation involving the United States in the Middle District of Louisiana, including all criminal prosecutions for violations of federal law, civil lawsuits against the government, and actions to collect judgments and restitution on behalf of victims and taxpayers.
Donald J. Cazayoux, Jr. is a native of New Roads, Louisiana. He earned his B.S. and M.A. from Louisiana State University and his J.D. from Georgetown University Law School in 1991. He was elected to the Louisiana House of Representatives from the 18th district in 1999 where he served until 2008. Cazayoux was elected to the U.S. House of Representatives, Louisiana’s 6th District, and served in Congress until January 2009. He was sworn in as the United States Attorney for the Middle District of Louisiana in June 2010.
U.S. Attorney's Office Donates 132 Phones to St. Landry Parish Sheriff's OfficeRead the Press Release
SHREVEPORT/LAFAYETTE, La. – United States Attorney Stephanie A. Finley announced today that 132 phones have been donated to the St. Landry Parish Sheriff’s Office, which has helped Sheriff Bobby J. Guidroz realize savings of more than $20,800 for his office.
“I am happy that the Sheriff’s Office is able to use these phones,” Finley said. “The residents we serve will see this technology used to increase law enforcement operations in the Western District of Louisiana. Anything that we can do to help our law enforcement partners, benefits the whole community.”
“The phones will be a useful tool at the new sheriff’s office complex,” Guidroz stated. “We hope to be in our new Law-Enforcement Complex by Christmas 2014, and having these new phones installed there will save us money and add a new dimension to our interoffice communications. I am grateful that U.S. Attorney Stephanie Finley has decided to donate this $20,800 cache of telephones to the St. Landry Parish Sheriff’s Office. The phones are speaker phones with alpha numeric display that shows a clock, calendar and call timer.”
Two Sentenced for Involvement in an International Criminal Network That Sexually Exploited ChildrenRead the Press Release
SHREVEPORT, La. – United States Attorney Stephanie A. Finley announced today that two additional defendants were sentenced on Tuesday by U.S. District Judge S. Maurice Hicks Jr. for their involvement in an international criminal network organized to sexually exploit children in connection with their participation in the Dreamboard child exploitation bulletin board.
Todd Stumpf, 61, of Buffalo, N.Y., was sentenced to 20 years in prison with five years of supervised release for engaging in a childhood exploitation enterprise. According to evidence presented at the guilty plea, Stumpf joined Dreamboard on Jan. 19, 2008. He posted 1,042 posts and many contained child pornography.William Jewell, 44, of Burbank, Ill., was sentenced to 20 years in prison with a lifetime of supervised release for conspiracy to distribute child pornography. According to evidence presented at the guilty plea, Jewell joined Dreamboard on May 8, 2010. During his time using the site, he posted 13 advertisements offering to distribute child pornography and five of the posts contained child pornography. He also posted six posts to another section of the site and some contained images of prepubescent children engaging in sexual activities.
Stumpf and Jewell were charged in an indictment unsealed on Aug. 3, 2011. The charges are the result of Operation Delego, an ongoing investigation launched in December 2009 that targeted individuals around the world for their participation in Dreamboard. Dreamboard was a members-only bulletin board that was created and operated to promote pedophilia and encourage the sexual abuse of very young children in an environment designed to avoid law enforcement detection.A total of 72 individuals, including Stumpf and Jewell, have been charged as a result of Operation Delego. To date, 57 of the 72 charged defendants have been arrested in the United States and abroad. Forty-seven individuals have pleaded guilty, and one was convicted after trial. Forty-six of the 48 individuals who have pleaded guilty or found guilty for their roles in the conspiracy have been sentenced to prison and have received sentences ranging between five years to life in prison. Three defendants have received life sentences, including one who was convicted at trial. Fifteen of the 72 charged individuals remain at large and are known only by their online identities. Efforts to identify and apprehend these individuals continue. Operation Delego represents the largest prosecution to date in the United States of individuals who participated in an online bulletin board conceived and operated for the sole purpose of promoting child sexual abuse, disseminating child pornography and evading law enforcement.
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 U.S. Attorneys’ offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The case is being prosecuted by Assistant U.S. Attorney John Luke Walker of the Western District of Louisiana and Trial Attorney Keith Becker of CEOS. The Criminal Division’s Office of International Affairs provided substantial assistance. The investigation was conducted by ICE-Homeland Security Investigations, the Child Exploitation Section of ICE’s Cyber Crime Center, CEOS, CEOS’s High Technology Investigative Unit and 35 ICE offices in the United States and 11 ICE attaches offices in 13 countries around the world, with assistance provided by numerous local and international law enforcement agencies across the United States and throughout the world.The investigation was part of Operation Predator, a nationwide ICE initiative to identify, investigate and arrest those who prey on children, including human traffickers, international sex tourists, Internet pornographers and foreign-national predators whose crimes make them deportable.
ICE encourages the public to report suspected child predators and any suspicious activity through its toll-free hotline at 1-866-DHS-2ICE. This hotline is staffed around the clock by investigators. Tips or other information can also be submitted to ICE online at http://www.ice.gov/exec/forms/hsi-tips/tips.asp. Tips may be reported anonymously.
Three Gang Members Plead Guilty in Dodge City Racketeering CaseRead the Press Release
WICHITA, KAN. –Three members of a Dodge City street gang charged in a federal racketeering case have pleaded guilty, U.S. Attorney Barry Grissom said today.
Angel Cerda, 27, Dodge City, Kan., pleaded guilty to one count of aiding and abetting attempted murder, which was a violent crime in aid of racketeering. He admitted he was involved in an Oct. 4, 2008, incident in which two people were shot.
Jesus Torres, 29, Dodge City, Kan., pleaded guilty to one count of aiding and abetting assault with a dangerous weapon, which was a violent crime in aid of racketeering. He admitted he was involved in an Aug. 27, 2011, incident in which two people were stabbed with knives.
Fabian Neave, 26, Dodge City, Kan., pleaded guilty to one count of racketeering conspiracy. He admitted that from 2008 to 2012 he acted as a principal conspirator with the gang, and he was involved in acts of robbery, attempted murder and drug trafficking.
In his plea, Angel Cerda admitted he was a Diablos Viejos (DV) gang member associated with the Norteno street gang when he accompanied two co-defendants in an attack at the home of a member of the rival Sureno gang. On Oct. 4, 2008, Cerda and two co-defendants gathered in a barn behind a house at 10770 Kettle Way near Dodge City, which was a hangout for the gang. Later that day, Cerda and the two co-defendants drove to the home of Abel Hernandez, a known Sureno gang member, and Rumalda Hipolito. Outside the home, Hernandez’s brother and others were drinking beer. One of the Nortenos began harassing them and shouting Norteno slogans. After someone threw a beer bottle at the Nortenos’ car, Cerda and the two co-defendants drove away.
Cerda and his associates obtained a firearm, an SKS or AK-47 style weapon, and returned to Hernandez’s house, parking in an alley half a block away. They approached the house on foot where co-defendant Gonzalo Ramirez discharged multiple rounds from the firearm. The gunshots hit the house, striking Abel Hernandez and Rumalda Hipolito. Hipolito suffered a gunshot wound to the arm. Hernandez suffered a gunshot wound to the leg. Investigators found 19 bullet holes in the house and recovered 20 shell casings at the scene. After the shooting, Cerda and the two co-defendants returned to the house on Kettle Way, where they hid the car in the barn. Dodge City police arrested Cerda there.
In his plea, Jesus Torres admitted that he was a member of the Diablos Viejos on Aug. 27, 2011, when he urged Norteno associates to join him in an assault on a group of people he mistakenly believed were members of the Surenos, a rival gang. The assault took place at 703 E. 9th Avenue in Dodge City. During the fight, two people were stabbed, Gabriel Rivera and Carlos Ramirez. Rivera’s injuries were life-threatening, requiring a life-flight to a Wichita hospital.
In his plea, Fabian Neave admitted he was a member of the Diablos Viejos and associated with the Norteno street gang. He admitted being involved in three incidents including taking part in the Aug. 27, 2011, assault at 703 E. 9th Ave., and possessing methamphetamine with intent to distribute on Dec. 27, 2011. In the third incident, on July 2, 2008, he and other Nortenos robbed Bryant Licon. During the robbery, Neave held a knife to Licon. He and two other Nortenos split the money from the robbery.
All three defendants admitted that robberies, assaults and other crimes were part of the way Norteno gang members built their reputations and kept their rivals at bay.
Cerda is set for sentencing Sept. 3. He faces a maximum penalty of 10 years and a fine up to $250,000.
Torres is set for sentencing Sept. 3. He faces a maximum penalty of 20 years and a fine up to $250,000.
Neave is set for sentencing Sept. 9. He faces a maximum penalty of 20 years and a fine up to $250,000.Grissom commended the Dodge City Police Department, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Ford County Sheriff’s Office, the Kansas Bureau of Investigation, Assistant Aaron Smith and Assistant U.S. Attorney Lanny Welch for their work on the case.
Third Person Charged in Relation to Financial Investigation and Multiple Area BusinessesRead the Press Release
CORPUS CHRISTI, Texas – Leroy Mitchan Jr., 33, of Corpus Christi, has been indicted as a result of the efforts of a multi-agency investigation into the structuring of financial transactions, United States Attorney Kenneth Magidson announced today.
Mitchan is the third person indicted as part of this structuring conspiracy. Kimberly Davis, 27, and Justin Colmenero, 30, both of Corpus Christi, were indicted last month.
This indictment, returned just moments ago, alleges the defendants conspired to structured more than $100,000 in cash deposit transactions over a 12-month period with a domestic financial institution in order to avoid the legal reporting requirements of the bank.
Mitchan was arrested upon the filing of a criminal complaint on May 31, 2013. At the time of his arrest, he was allegedly in possession of synthetic marijuana. He later appeared before U.S. Magistrate Judge Jason B. Libby for a detention hearing, at which time the government detailed searches that had been executed at four local businesses as well as Mitchan’s residence. A Drug Enforcement Administration (DEA) agent testified that agents located hydroponic marijuana, synthetic marijuana, hash and THC oil at Mitchan’s residence. Testimony further revealed that agents located a safe with approximately $360,000 and synthetic marijuana at Uncle Mike’s Rent To Own as well as six firearms, one of which was reported stolen, at Mr. Nice Guys Auto in Corpus Christi.
An agent with Internal Revenue Service – Criminal Investigation (IRS-CI) also testified at the hearing that the structuring conspiracy involved several transactions totaling more than $450,000.
Mitchan was permitted to remain on bond pending further criminal proceedings. If convicted, he faces up to 10 years in federal prison and a possible $500,000 fine.
The investigation leading to the criminal charges was conducted in Corpus Christi lead by IRS-CI, DEA and the Corpus Christi Police Department. The case is being prosecuted by Assistant United States Attorneys Hugo R. Martinez and Lance A. Watt.
An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.Test Prep Company Owner Who Was Extradited from Latvia Ordered to Pay $700,000 in Restitution for Stealing Questions from Medical Licensing ExamRead the Press Release
NEWARK, N.J. – One of the owners and operators of a Totowa, N.J., test preparation business, who was extradited from Latvia in October 2012, was ordered to pay $700,000 in restitution for her role in stealing “live” licensing examination questions from the National Board of Medical Examiners, U.S. Attorney Paul J. Fishman announced.
Egija Kuka, 40, who owned and operated Optima University with her former husband, co-defendant Eihab Suliman, 50, previously pleaded guilty before U.S. District Judge Stanley R. Chesler to two counts of an indictment charging her with mail and wire fraud and conspiracy to commit mail and wire fraud. Judge Chesler imposed the sentence, which also included eight months’ time served, in Newark federal court. Suliman remains a fugitive.
According to documents filed in this case and statements made in court:
Optima University was a test preparation business that provided courses designed to prepare students for the U.S. Medical Licensing Examination (USMLE), which is created and administered by the National Board of Medical Examiners (NBME), an independent, not-for-profit organization headquartered in Philadelphia.
The USMLE is used by medical licensing authorities throughout the United States to evaluate physicians seeking an initial license to practice medicine. The test assesses whether international medical school graduates are ready to enter accredited residency or fellowship programs in the United States. Medical school graduates – whether they graduated from a United States medical school or a foreign medical school – generally must complete at least some parts of the USMLE as a prerequisite to enter into residency training or receive a medical license. NBME goes to extensive lengths to keep test questions secure and examinees are advised that the test questions used in the USMLE are copyrighted and not to be distributed or reproduced.
Beginning in December 2007, Kuka and Suliman solicited potential Optima University students by guaranteeing that the students would pass the USMLE, even if the student had previously failed it. Kuka and Suliman also assured potential students that any tuition paid to Optima University would be “risk-free,” and that any student who did not pass the USMLE could retake the Optima course at no additional cost.
On Dec. 2, 2007, Kuka applied via the internet to take the USMLE in Milan, Italy, falsely stating that she had graduated from the University of Oradea, an accredited medical school in Romania, with a doctorate in medicine. On Dec. 18, 2007, Kuka submitted a “Certification of Identification Form” along with a copy of a fabricated diploma from University of Oradea’s medical school to enable her to take the exam and gain access to, steal and reproduce the live test questions.
Kuka took Steps 1 and 2 of the USMLE on April 7, 2008, and April 14, 2008, in Milan. Video surveillance from those test sessions show Kuka using a small digital video recording device to record the live test questions that were displayed on the computer monitor. On May 28, 2008, Kuka sat again for Step 1 of the USMLE examination.
On May 28, 2008, a search was conducted at Optima University and live test questions were found. These live test questions were used by Suliman and Kuka on practice examinations provided to Optima University students.
The indictment was returned in July 2011. Kuka had already fled to Latvia. In September 2011, U.S. authorities requested Kuka’s extradition pursuant to the extradition treaty between the United States and Latvia.
In addition ordering her to pay restitution to the National Board of Medical Examiners and sentencing her to time served, Judge Chesler sentenced Kuka to two years of supervised release.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford, with the investigation that led to today’s sentence. He also thanked the Office of International Affairs, Criminal Division, at DOJ and Officials in the Republic of Latvia for their assistance in this matter.The government is represented by Assistant U.S. Attorney Deborah J. Gannett of the U.S. Attorney’s Office Health Care and Government Fraud Unit.
13- 245Defense counsel: Peter Carter Esq., Assistant Public Defender’s Office, Newark
Suwanee Man Sentenced for Violating Tax LawsRead the Press Release
Sroufe Falsely Claimed $1.7 Million Tax Refund
ATLANTA – Donus R. Sroufe has been sentenced to over four years in prison for interfering with the administration of the revenue laws and for making a false claim for a $1.7 million tax refund.
“The defendant lied on his tax return and tried to defraud the U.S. Treasury out of $1.7 million,” said United States Attorney Sally Quillian Yates. “Fortunately, the IRS caught his fraudulent return before any taxpayer funds were paid out.”“This was a case of greed, deceit, manipulation and theft directed at the United States Department of Treasury and the American taxpayer,” stated Veronica Hyman-Pillot, Special Agent in Charge IRS Criminal Investigation. “The prison time received by Mr. Sroufe should serve as a strong warning that tough punishment awaits those who embark on a similar criminal path.”
According to United States Attorney Yates, the charges and other information presented in court: In March 2009, Sroufe filed a United States Individual Income Tax Return (Form 1040) for 2008, claiming a tax refund of $1.7 million. On the tax return, Sroufe falsely claimed: (1) to have received $2.5 million from a United States Treasury bond, and (2) that he had paid over $2.6 million in federal taxes. In fact, the $2.5 million bond was a fake and Mr. Sroufe had not paid any income taxes for 2008.
In April 2009, the Internal Revenue Service (IRS) notified Sroufe that his 2008 tax return was “frivolous” and warned him that he could face a penalty for filing a false return. Moreover, in June 2009, two IRS Special Agents met with Sroufe in person and notified him that the $2.5 million bond appeared to be a fictitious financial instrument.
Despite those warnings, in August 2009, Sroufe mailed an identical copy of the 2008 tax return to the United States Department of the Treasury, including a copy of the fake $2.5 million bond, and demanded a $1.7 million tax refund.On March 13, 2013, a jury found Sroufe guilty of interfering with the administration of the revenue laws and for making a false claim for a tax refund.
Today, Sroufe, 55, of Suwanee, Ga., was sentenced to four years, three months in prison to be followed by three years of supervised release, and ordered to pay a fine of $75,000.
This case was investigated by Special Agents of the Internal Revenue Service Criminal Investigation.
Assistant United States Attorneys Jeffrey W. Davis, Steven D. Grimberg, and Shanya J. Dingle prosecuted the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the HomePage for the U.S. Attorney’s Office for the Northern District of Georgia is www.justice.gov/usao/gan.
Sneads Man Convicted for Threatening to Use Biological Agents and Explosives Against Federal InstitutionRead the Press Release
TALLAHASSEE, FLORIDA – A Sneads resident was found guilty yesterday afternoon on three counts of conveying false and misleading information involving the unlawful use and threatened use of a weapon of mass destruction involving a biological agent and toxin, and a destructive device. Jamie Lee Wambles, 32, was also convicted of a fourth count of mailing threatening communications to a federal agent, involving the potential bombing of the Federal Courthouse in Tallahassee.
Evidence presented at trial revealed that on December 17, 2012, Wambles wrote his first threatening letter from a Jackson County jail facility to the Clerk’s Office at the Federal Courthouse in Tallahassee claiming it contained anthrax. This letter was received at the courthouse by court security officers. On December 18, 2012, Wambles wrote a second threatening letter to the Clerk’s Office at the same address with a white powder claiming it was anthrax. It turned out to be finely crushed Tylenol pills. He wrote a third threatening letter on December 20, 2012, to the same Federal Courthouse, this time claiming he would bomb the building unless his demands were met. Wambles was aggrieved over the shooting death of his pit bull during his state arrest and wanted the officers responsible to be investigated. Finally, on January 7, 2013, Wambles mailed a fourth letter to an FBI agent claiming he had the materials to bomb the Tallahassee Federal Courthouse if his concerns were not mollified.
Wambles faces up to five years in prison and a $250,000.00 fine on each of the first three counts, and up to ten years in prison and a $250,000 fine on the fourth count. The sentencing of Wambles is scheduled for August 29, 2013. Wambles is currently serving seven years in state prison on unrelated state firearm charges.
United States Attorney Pamela C. Marsh praised the efforts of the Federal Bureau of investigation and the United States Marshals Service who investigated this threat case.
The case was prosecuted by Assistant U.S. Attorney James Ustynoski.Smith County Man Sentenced for Dealing Meth in East TexasRead the Press Release
Department of Justice
Office of Public AffairsTYLER, Texas – A32-year-old Tyler, Texas man has been sentenced to federal prison for drug trafficking violations in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
Sipriano Relles pleaded guilty on Sep. 4, 2012, to possession with intent to distribute methamphetamine and was sentenced to 140 months in federal prison today by U.S. District Judge Michael H. Schneider. The court also imposed a $2,000 forfeiture judgment against Relles.
According to information presented in court, on Feb. 20, 2012, Relles was found in possession of approximately 66.9 grams of actual methamphetamine, which he intended to deliver to others in and around the Eastern District of Texas. A federal grand jury returned an indictment on Apr. 11, 2012, charging Relles with federal violations.
This case was investigated by the Drug Enforcement Administration and the Tyler Police Department and prosecuted by Assistant U.S. Attorney Bill Baldwin.
Shreveport Doctor Sentenced for Health Care FraudRead the Press Release
SHREVEPORT, La. – United States Attorney Stephanie A. Finley announced thatEdozie Chukwudinma Okereke, 57, of Shreveport, was sentenced Monday by U.S. District Judge S. Maurice Hicks Jr. to 21 months in federal prison with three years supervised release for health care fraud. Okereke was also ordered to pay $679,836 in restitution to Medicare.
According to evidence presented at the guilty plea, Okereke, who was the owner/operator of Family Foot and Ankle Clinic, was a doctor of podiatric medicine for patients at the Shreveport clinic, and he was responsible for making sure that the correct treatment was billed by accurately submitting claims for the treatments and services he performed. Starting in 2005, Okereke submitted billing codes for treatment not covered under Medicare. Okereke was providing routine foot care, such as toenail clipping, and then “upcoding” or submitting codes for services that Medicare would cover.
“The defendant’s scheme was designed to defraud a government program that provided medical services to the elderly and the disabled,” U.S. Attorney Finley stated. “His actions were detrimental to the program and ultimately hurt U.S. taxpayers. This office will continue to vigorously pursue charges against those who steal from these types of programs.”
The U.S. Department of Health and Human Services-Office of the Inspector General conducted the investigation. Assistant U.S. Attorney Cytheria D. Jernigan prosecuted the case.
Shiprock Man Sentenced to Eighty-One Months in Federal Prison for Conviction on Assault and Firearms ChargesRead the Press Release
ALBUQUERQUE – Raydell Billy, 22, an enrolled member of the Navajo Nation who resides in Shiprock, N.M., was sentenced yesterday afternoon to 81 months in federal prison followed by three years of supervised release for his conviction on assault and firearms charges.
Billy was arrested in Jan. 2013, on a criminal complaint charging him with assault and firearms offenses, and has been in federal custody since that time. Billy subsequently was indicted and charged with two counts of being a felon in possession of a firearm, assault with a dangerous weapon; and using a firearm during a crime of violence. Billy was charged with committing these offenses on the Navajo Indian Reservation in San Juan County, N.M., on Nov. 15, 2012 and Jan. 12, 2013.Billy pled guilty on March 12, 2013 to a felony information charging him with assault with a dangerous weapon and using a firearm in furtherance of a crime of violence. In entering his guilty plea, Billy admitted that on Jan. 12, 2013, he assaulted an individual with a .22 caliber Winchester rifle by pointing the rifle at the victim and pulling the trigger. Billy also admitted hitting the victim in the head with the butt-stock of the rifle.
This case was investigated by the Albuquerque and Farmington offices of the FBI and the Shiprock office of the Navajo Nation Division of Public Safety, and was prosecuted by Assistant U.S. Attorney Paul Mysliwiec.
Shakopee Man Pleads Guilty to Using Other People’s Food StampsRead the Press Release
MINNEAPOLIS—Earlier today in federal court in St. Paul, a 47-year-old Shakopee man pleaded guilty to using other people’s food stamps. Chin Son Kim specifically pleaded guilty to one count of food stamp fraud. Kim, who was charged on April 18, 2013, entered his plea before United States District Court Judge Paul A. Magnuson.
In his plea agreement, Kim admitted that between November 2010 and July 2012, he obtained Supplemental Nutrition and Assistance Program (“SNAP”) cards, commonly known as food stamps, from the true recipients of those benefits. To acquire the cards, he waited near a charity facility in St. Paul, as well as at other locations, and then approached people he thought might be in possession of them.
After obtaining a card, Kim would go to cooperating local markets, where he would use the card in an unauthorized manner. Typically, he would present the card to the grocer, who would swipe it through a food-stamp scanner, routinely noting a transaction of approximately $200. Kim would then receive cash, groceries, or store credit in that amount. Afterwards, he would return the card to its rightful owner, providing that person with cash in the amount of approximately half the transaction total. The loss to the SNAP program because of Kim’s action was approximately $29,816.
Each individual who receives SNAP benefits is issued an electronic benefit transfer (“EBT”) card, which contains a monthly allocated benefit amount that can be used at authorized retailers. The U.S. Department of Agriculture (“USDA”) reimburses those retailers for the benefit amounts redeemed. Only eligible food items may be acquired with food stamps, and some items, such as alcoholic beverages, tobacco products, and cell phone minutes are not eligible. Moreover, food stamps may not be redeemed for cash.
For his crime, Kim faces a potential maximum penalty of five years in federal prison. Judge Magnuson will determine his sentence at a future hearing, yet to be scheduled. This case is the result of an investigation by the USDA-Office of Inspector General, the Ramsey County Sheriff’s Office, and the St. Paul Police Department. It is being prosecuted by Assistant U.S. Attorney David P. Steinkamp.Sex offender sentenced to 15 years prison for child sexual exploitationRead the Press Release
Anchorage, Alaska - U.S. Attorney Karen L. Loeffler announced today that a Washington man was sentenced in federal court in Anchorage for advertising child pornography in Alaska.
Matthew Edward Shubart, 33, from Yakima, Washington, was sentenced yesterday by U.S. District Court Judge Timothy M. Burgess to 15 years in prison. Judge Burgess also ordered that upon release from prison Shubart will serve a lifetime term of supervised release, with specific conditions to register as a sex offender, to have no unsupervised contact with any person under the age of 18, and to participate in sex offender assessment and treatment.
According to Assistant U.S. Attorney Audrey Renschen, who prosecuted the case, Shubart used social networking and emails to advertise that he was seeking and offering to exchange, distribute and receive child pornography. Shubart admitted in his plea agreement that in 2012, he socially networked with a group of 109 members of an emailing group who traded child pornography. Shubart further admitted that on January 25, 2012, he emailed seven pictures of child pornography to an Alaska resident. Before sending the images to Alaska, Shubart remarked in his email, “I have some hidden camera pics....got lucky and got a cutie....wanna see? they were done by me, not off the internet....”
Over 800 images of child pornography were found on Shubart’s computer and email account. Several child victims who were identified in those images submitted letters describing the serious harms they had suffered as the result of being sexually exploited. Judge Burgess acknowledged those harms and the seriousness of child pornography crimes when he sentenced Shubart to the 15 year prison sentence and the supervised release for the rest of his life.
Ms. Loeffler commends Homeland Security Investigations for their extensive investigation of this case, and acknowledges the agencies persistent dedication to rescuing child victims from sexual exploitation, and pursuing the sexual predators that harm children.
Sex Offender Indicted for Producing Child Porn Overseas, Distributing Child Porn OnlineRead the Press Release
Project Safe Childhood
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a prior sex offender was indicted by a federal grand jury today for producing child pornography with five child victims in the Philippines and for distributing child pornography over the Internet.
Kenneth Gaylord Stokes, 68, a U.S. citizen who resided near the city of Cebu in the Philippines, was charged in a seven-count superseding indictment returned by a federal grand jury in Springfield, Mo. Today’s indictment replaces a federal indictment that was returned under seal on Nov. 7, 2012 and contains five additional counts of traveling overseas to engage in illicit sexual conduct (the production of child pornography).
The original indictment was unsealed on March 4, 2013, when Stokes was transported to the U.S. District Court in Springfield for his initial appearance. He has been in federal custody since his arrest on Dec. 3, 2012 and is being held without bond. Stokes has a prior conviction for the statutory rape of a 7-year-old child in the state of Washington.
According to court documents, a federal agent located a Craigslist advertisement offering photography services in the Philippines in July 2012. Given the nature of the advertisement, the agent suspected that Stokes was actually engaged in illegal activities involving child pornography. The agent later exchanged messages via e-mail in which Stokes allegedly asserted that he had married a Filipino woman to get to her daughter and that he had “no limits” in terms of his photography services.
On July 10 and July 26, 2012, according to court documents, Stokes sent the agent e-mails containing photographs of child pornography.
On Dec. 3, 2012 the agent met Stokes at his residence in the Philippines. Stokes, who allegedly told the agent that he sexually abused many prepubescent children, was arrested.
A forensic examination of Stokes’ computer is ongoing. In a motion filed with the court, the government asserts that the preliminary examination suggests that Stokes used child victims to produce a large quantity of movies and images of child pornography.
Today’s indictment maintains the original charges against Stokes, who was charged in the original indictment with two counts of distributing child pornography over the Internet to Greene County, Mo., on two separate occasions in July 2012.
Stokes is also now charged with five additional counts of traveling overseas to produce child pornography. Between Sept. 26, 2009, and Dec. 3, 2012, Stokes allegedly used five separate child victims (identified as Jane Doe #1, #2, #3, #4, and #5) to produce child pornography.
Under federal statutes, today’s charges carry a mandatory minimum penalty of 15 years in federal prison without parole for each count of distributing child pornography (due to Stokes’ prior sex offense), up to a sentence of 40 years in federal prison without parole for each count. Each of the five counts of traveling overseas to engage in illicit sexual conduct carries a maximum penalty of 60 years in federal prison without parole.
Dickinson cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney James J. Kelleher. It was investigated by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI).
Project Safe Childhood
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc . For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."Seattle Man Charged in Spokane Ethanol Plant Investment SchemeRead the Press Release
Spokane – Today, Michael C. Ormsby, United States Attorney for the Eastern District of Washington, announced that Robert J. Braun, age 53, originally of Spokane, and now residing in Seattle, appeared for an arraignment in United States District Court in Spokane. Braun is charged in a twenty-seven count indictment with multiple allegations of Wire Fraud and Securities Fraud. If convicted, Braun faces up to twenty years of incarceration and up to $5,000,000 in fines on the most serious charges.
According to the indictment, Braun raised approximately $1.5 million as part of a scheme to defraud more than 50 investors. The indictment alleges that Braun claimed that he was raising funds for an ethanol plant that would be built in Spokane County, and that investors could earn extraordinary returns. The indictment also alleges that Braun used various business names including S & B Energy, LLC, S & B Energy Spokane, LLC, Novahol Spokane, LLC, and Novahol Medical Lake, LLC. The indictment alleges further that Braun used investor funds for various unauthorized personal and living expenses, including mortgage payments for three homes that he owned and purchases at department and clothing stores. Braun also allegedly diverted investor funds towards a women's shoe store that he owned in Spokane. Between 2008 and 2012, Braun is alleged to have lulled investors into a false sense of security by telling them funding for the ethanol plant was imminent.
The investigation was conducted by the Federal Bureau of Investigation, the Washington State Department of Financial Institutions (DFI), and the Internal Revenue Service Criminal Investigation (IRS-CI). The case is being prosecuted by K. Jill Bolton, Assistant U.S. Attorney for the Eastern District of Washington and Special Assistant United States Attorney Robert Kondrat. Mr. Kondrat is an attorney with the Washington State Department of Financial Institutions, specially designated to handle securities fraud cases in federal court.
The charges contained in the indictment are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.
2:13-CR-00083-RHW
Roswell Man Pleads Guilty to Unlawful Possession of FirearmsRead the Press Release
ALBUQUERQUE – Harley Harkness, 40, of Roswell, N.M., pleaded guilty this afternoon in Las Cruces federal court to being a felon in possession of firearms. Harkness entered his guilty plea without the benefit of a plea agreement.
Harkness was arrested on March 13, 2013, on a criminal complaint charging him with unlawful possession of firearms and possession of a stolen firearm. According to the criminal complaint, Harkness committed these offenses on Jan. 13, 2013. At the time, Harkness was prohibited from possessing firearms or ammunition because he previously had been convicted of the following offenses in the 5th Judicial District Court for the State of New Mexico: residential burglary and tampering with evidence in Oct. 2001 and battery against a household member in Oct. 2003.
Court filings reflect that the federal charges against Harkness arose out of a domestic violence incident on Jan. 13, 2013. On that day, Roswell Police Department officers responded to a domestic violence call from Harkness’s wife who reported that Harkness hit her and pointed a firearm at her. When the officers executed a search warrant at the Harkness residence in Roswell, they found two loaded pistols and ammunition.
During today’s plea hearing, Harkness pled guilty to a felony information charging him with being a felon in possession of a firearm and admitted that he unlawfully possessed two pistols on Jan. 13, 2013, in Chaves County, N.M. At sentencing, which has yet to be scheduled, Harkness faces a maximum penalty of ten years in federal prison. Harkness remains in custody pending his sentencing hearing.
This case was investigated by the Roswell office of the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Roswell Police Department and is being prosecuted by Assistant U.S. Attorney Aaron O. Jordan of the U.S. Attorney’s Las Cruces Branch Office.
Rochester Man Sentenced for Bank FraudRead the Press Release
ROCHESTER, N.Y.-- U.S. Attorney William J. Hochul, Jr. announced today that Nathaniel Pounds, 57, of Rochester, N.Y., who was convicted of bank fraud was sentenced to 51 months in prison and five years of supervised release by U.S. District Judge David G. Larimer.
Assistant U.S. Attorneys Marisa J. Miller and Frank H. Sherman, who handled the case, stated that in September 2012, the defendant was serving a term of supervised release following a 2005 federal conviction for bank fraud. At that time, United States Probation officers discovered stolen and altered checks, forms of identification belonging to others and device making equipment in the defendant's possession. Pounds pleaded guilty to violating his supervised release and to a new bank fraud charge and was sentenced to a combined term of 51 months in prison. The defendant was also ordered to pay restitution in the amount of $16,236.58, in addition to the $114,853.67 in restitution outstanding from the 2005 conviction.
The sentencing is the culmination of an investigation on the part of Special Agents of the United States Postal Inspection Service, Boston Division, under the direction of Inspector in Charge Kevin Nyland; Officers of the United States Probation, under the direction of Chief United States Probation Officer Anthony San Giacomo; and members of the Monroe County Sheriff's Office, under the direction of Sheriff Patrick O'Flynn.Rochester Man Indicted for Making Bomb Threats against KodakRead the Press Release
ROCHESTER, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that a federal grand jury has returned a four count indictment charging Omer Fadhel Saleh Mohammed, 31, of Rochester, N.Y., with making false bomb threats. Each charge carries a maximum penalty of 10 years in prison, a fine of $250,000.00 or both.
Assistant U.S. Attorney Anthony M. Bruce, who is handling the case, stated that according to the indictment, on September 24, 2012, the defendant made three phone calls to 911 and told the operator that his acquaintances were terrorists and were going to blow up the Kodak Corporation. The indictment further alleges that Mohammed made a fourth call on January 24, 2013 claiming that an acquaintance had explosives hidden at a location in Rochester. The 911 calls resulted in emergency responses by the Rochester Police and Fire Departments and by Kodak security personnel, but searches failed to turn up any bombs or evidence that someone had attempted to plant a bomb at any of Kodak’s facilities.
Mohammed was arrested on February 4, 2013, based on a criminal complaint issued by Magistrate Judge Marian W. Payson and is currently in custody. No date has been set for his arraignment.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent unless and until proven guilty.
The indictment is the result of an investigation by the Federal Bureau of Investigation, under the direction of Acting Special Agent in Charge Richard M. Frankel.Redwood City Man Sentenced to More Than Nine Years in Prison for Selling MethamphetamineRead the Press Release
SAN FRANCISCO– Alfredo Contreras was sentenced yesterday to 9 years and 2 months in prison for selling methamphetamine, United States Attorney Melinda Haag announced.
Contreras pleaded guilty on March 26, 2013, to violating Title 21, United States Code, section 841(a)(1). According to the plea agreement, Contreras admitted to selling approximately one ounce of methamphetamine to an undercover San Francisco police officer on November 25, 2012. According to court pleadings filed by the government, Contreras had a long criminal history including prior convictions for crimes involving violence and drug trafficking.
Contreras, age 33, of Redwood City, was indicted by a federal grand jury on January 17, 2013, on a single count of violating 21 U.S.C. §§ 841(a)(1) and (b)(1)(B).
The sentence was handed down by The Honorable Richard Seeborg, U.S. District Court Judge. Judge Seeborg also sentenced the defendant to a four-year period of supervised release. The defendant has been in custody since his arrest on November 25, 2012, and will begin serving the sentence on immediately.
The prosecution is the result of an investigation by the San Francisco Police Department and the Department of Homeland Security, Homeland Security Investigations.
Prison inmate arraigned for charges related to alleged false tax refund claims of over $275,000Read the Press Release
Anchorage, Alaska - U.S. Attorney Karen L. Loeffler announced today that an Anchorage man was indicted for one count of conspiracy to defraud the government with respect to tax claims, 12 counts mail fraud, and five counts aggravated identity theft.
John Richard Koesterman, 49, of Anchorage, Alaska, was arraigned on June 11, 2013, in Anchorage after having been indicted by a federal grand jury on April 16, 2013. Koesterman plead not guilty at his arraignment and is currently scheduled for trial beginning August 19, 2013.
According to filings with the court, between July 2009 and May 2011, Koesterman and others conspired to defraud the United States by filing false tax returns in order to obtain fraudulent tax refunds. The conspirators obtained the names and identifying information of people, many of whom were inmates at correctional facilities, without the knowledge of these individuals. Using this information, the conspirators would prepare and file false income tax returns that reported fictitious wage and withholding information. Some of the returns also reported false dependent information. Each fraudulently filed false return claimed that the taxpayer was due a refund of thousands of dollars. The returns were mailed to the IRS from Anchorage, Alaska, and from Denver and Colorado Springs, Colorado. A total of 55 false returns claiming $275,127 in fraudulent refunds were filed. These returns used the identifying information of 28 people.According to the indictment, the false returns used the conspirator’s personal addresses and Treasury checks were mailed to these addresses. In the case of direct deposits, refunds went into accounts held in the name of a conspirator. In order to cash checks, in some instances, conspirators forged Power of Attorney documents. A total of $95,568 was fraudulently obtained from the U.S. Treasury as a result of the scheme.
The identity theft charges of the indictment are the result of Koesterman using, without lawful authority and in relation to mail fraud, the means of identification of three individuals used on false income tax returns.
Koesterman’s indictment contains a forfeiture allegation which stipulates that, upon conviction, Koesterman must forfeit $5,787.75 in currency seized from a bank account and $13,751 seized from a residence.
According to Assistant U.S. Attorney Retta-Rae Randall, if convicted, Koesterman faces up to 20 years in prison and a $250,000 fine. 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.
The Internal Revenue Service, Criminal Division, led the investigation of this case.
Pittsburgh Man Taken Away to Prison for Bank Fraud and Identity TheftRead the Press Release
PITTSBURGH, Pa. - A resident of Allegheny County has been sentenced in federal court to 12 months and one day incarceration for counts one through nine to run concurrently with count one, plus 5 years supervised release on his conviction of bank fraud and identity theft, United States Attorney David J. Hickton announced today.
United States District Judge Arthur J. Schwab imposed the sentence on Anthony Jose Marchionno, 29.
According to the information presented to the court, Marchionno used several means of stealing identities of others which he then used to pursue schemes to steal from victim's bank accounts, including producing counterfeit checks, impersonating account holders, and producing counterfeit identification documents such as a Pennsylvania photo ID card.
Marchionno agreed to be taken into federal custody immediately to begin serving his sentence.
Assistant United States Attorney Gregory C. Melucci prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended Inspectors from the United States Postal Inspection Service and Allegheny County Police, who as part of the Western Pennsylvania Financial Crimes Task Force (WPFCTF), conducted the investigation that led to the successful prosecution of Anthony Jose Marchionno. The WPFCTF was established as a collaborative, multi-agency effort to effectively combat financial crimes, including identity fraud, in Western Pennsylvania. Partnering in this effort are the United States Attorney's Office for the Western District of Pennsylvania, the United States Secret Service, the United States Postal Inspection Service, the Department of Homeland Security, the Allegheny County District Attorney's Office, the Allegheny County Police Department, the City of Pittsburgh Bureau of Police and the Pennsylvania State Police.
Pike Creek Man Sentenced to 220 Months in Prison for Drug Trafficking and Attempted Murder OffensesRead the Press Release
WILMINGTON, Del. – Charles M. Oberly, III, United States Attorney for the District of Delaware, announced today the sentencing of one man on narcotics trafficking and attempted murder convictions, and the separate conviction of that man’s brother for using Facebook to threaten to kill a government witness during the narcotics trafficking and attempted murder trial.
United States v. William Boney
William Boney, age 39, of Pike Creek, was sentenced to 220 months in prison today for conspiracy to possess with intent to distribute cocaine, in violation of Title 21, United States Code, Sections 841(a)(1) and (b)(1)(A), and 846; attempted murder by retaliating against an informant, in violation of Title 18, United States Code, Section 1513(a)(1)(B); and soliciting another person to retaliate against an informant by committing murder, in violation of Title 18, United States Code, Sections 1513(a)(1)(B) and 373. In January 2013, a federal jury returned guilty verdicts against Boney after a one-week trial.
According to statements made at the sentencing hearing and documents filed in court, Boney was initially arrested on November 7, 2010, for attempting to broker a cocaine deal worth approximately $217,000 at his residence. Boney, however, was released to cooperate with the DEA in ongoing drug investigations. While released, Boney discovered the identity of a confidential informant who assisted the DEA with the investigation of the November 7, 2010 drug deal. Boney then began to plot that informant’s murder.
Unbeknownst to Boney, DEA agents uncovered the plot before Boney could find a “hit man” to kill the confidential informant. DEA agents then had a second confidential informant pose as a would-be “hit man” who was willing to kill the first confidential informant. Boney met with the purported “hit man” three times between May 22, 2011 and July 3, 2011. During these meetings, Boney discussed the details of killing the confidential informant, instructing the “hit man” to kill the informant’s young child if the informant was not present when the “hit man” broke into the informant’s home. Boney proposed to pay the “hit man” by having him also conduct home invasion robberies of those whom Boney believed had large amounts of cash or drugs in their residences. Evidence submitted at trial also showed that Boney was a long-time drug dealer, with two prior convictions for trafficking in marijuana.
United States v. John Boney
John Francis Boney, Jr., age 35, of New Castle, pled guilty on June 4, 2013 to Interstate Transportation of Threats, after using Facebook to threaten to kill a government witness who was scheduled to testify at his brother, William Boney’s, federal narcotics trafficking and attempted murder trial. John Boney faces a maximum sentence of five years in prison, a $250,000 fine, and three years of supervised release. He is scheduled to be sentenced on September 18, 2013 by United States District Judge Sue L. Robinson, who presided over brother William Boney’s trial and sentenced William Boney to 220 months in prison earlier today.
According to statements made and documents filed in court, during a recorded prison phone call made in the weeks before his January 2013 narcotics trafficking and attempted murder trial, William Boney used an intermediary to inform his brother, John Boney, of the identity of a government witness whom William Boney believed would testify as a government witness during the trial.
John Boney attended the January 2013 trial of William Boney, which was held in the federal courthouse, in Wilmington. During the early days of the trial, John Boney learned that the government planned to call the witness identified by William Boney weeks earlier. On January 23, 2013, John Boney used a smartphone to post a message on Facebook threatening to kill the government witness who his brother, William Boney, had identified if that witness took the stand against William Boney.
On the morning of January 24, 2013, the government witness entered the federal building, but told court security officers that he would not report to Judge Sue L. Robinson’s courtroom to testify until he could speak with the federal agents involved in William Boney’s trial. The agents located the government witness on the lower level of the federal courthouse and learned that John Boney had posted a threat to kill the witness on Facebook the previous day.
The agents then responded to the courtroom in which the trial was occurring and removed John Boney from the audience. The agents also took custody of a smartphone that John Boney brought to the courthouse. On that phone, the agents found the Facebook message in which John Boney threatened to kill the government witness if that witness testified for the government. When confronted by the agents, John Boney admitted to posting the message.
Following the court proceedings, United States Attorney Oberly stated: ?The protection of witnesses who walk into federal courtrooms to aid in the pursuit of criminal justice, as well as the families of those witnesses, is of paramount concern, and accordingly should expect to be prosecuted.”
Drug Enforcement Administration Special Agent in Charge David G. Dongilli stated, “The sentence imposed by the court reflects the extreme seriousness of Mr. Boney’s efforts to kill a DEA confidential informant who was going to testify against him. I wish to thank all of the law enforcement agencies and prosecutors that, through their dedication and diligence successfully brought Mr. Boney to trial despite his efforts to subvert justice. DEA will not tolerate threats against witnesses and will continue to work closely with its law enforcement partners and prosecutors to investigate and prosecute individuals and organizations that threaten witnesses and their families.”
These cases were investigated by the Drug Enforcement Administration and were prosecuted by Assistant United States Attorneys Jamie M. McCall, Ilana Eisenstein and Edward J. McAndrew.Pennsylvania Man Charged with Mortgage FraudRead the Press Release
BOSTON – A Woodlyn, Pa., man was charged today with multiple counts of wire fraud in connection with a mortgage fraud scheme in which he recruited a straw buyer to purchase three condominiums in Dorchester, Mass., which ultimately went into foreclosure, causing a loss to the lenders of nearly $900,000.
Simon H. Aouad, 34, of Woodlyn, Pa., was indicted with conspiracy to commit wire fraud and four counts of wire fraud.According to the Indictment, in August 2007, Michael Lee purchased a three-family dwelling at 162 Quincy Street, in Dorchester, for $400,000. He immediately converted the dwelling to three condominiums, which allowed Lee to sell the units individually. At the request of Lee and another individual, Michael Hicks, Aouad recruited a “straw buyer” to purchase all three units for $1.11 million. The straw buyer provided his identifying information to Aouad who forwarded it to Hicks. Hicks used this information, such as his name, address, date of birth and Social Security number, to apply for mortgages for the purchase of the three units at 162 Quincy Street. In the loan applications, Hicks falsely represented the straw buyer’s assets and employment. Aouad also arranged for false income tax returns to be submitted with the fraudulent mortgage applications.
In 2010, Hicks was sentenced to 42 months in prison, followed by three years of supervised release and restitution after pleading guilty to wire fraud and money laundering. In 2011, Lee was sentenced to one year and one day in prison, followed by three years of supervised release and restitution after pleading guilty to wire fraud.
Aouad faces a statutory maximum penalty of 30 years in prison, to be followed by five years of supervised release and a $1 million fine on each count.
United States Attorney Carmen M. Ortiz, Steven Ricciardi, Special Agent in Charge of the U.S. Secret Service, Boston Field Office, and William Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston, made the announcement today. This case is being prosecuted by Assistant U.S. Attorney Sandra S. Bower of Ortiz’s Economic Crimes Unit.
The details contained in the Indictment are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Paintsville Doctor Sentenced to 75 Months for Pill ConspiracyRead the Press Release
LEXINGTON, KY - A former Paintsville, KY., doctor, who previously admitted that he unlawfully dispensed approximately 50,000 prescription pills to individuals in Eastern Kentucky, was sentenced today to 75 months in prison, to be followed by three years supervised release.
U.S. District Judge Amul Thapar sentenced 66-year-old Richard Albert for conspiring to distribute and dispense controlled substances. Albert also agreed to forfeit more $630,000, which represents proceeds from his conspiracy. Albert was also ordered to pay $100,000 in community restitution.
Albert admitted that, from January 2009 until February 2011, he wrote numerous fraudulent prescriptions to individuals without a legitimate medical purpose. He typically wrote prescriptions for 100 (10 milligram) Percocet pills in exchange for $200 cash. Court records indicate that Albert frequently wrote approximately 40 to 50 fraudulent prescriptions in a given day.
According to the plea agreement, Albert wrote prescriptions to people who visited his clinic, his private residence, and a closed chiropractor’s office in Johnson County. During these visits, Albert performed little to no examination before writing the prescriptions. Patients who returned to the clinic after their initial visits received prescriptions without visiting with Albert at all.
In many cases, Albert signed his name to blank prescriptions and had an office assistant fill out the actual prescription. He also back dated information into his medical files to cover up the scheme.
During the course of the conspiracy, Albert worked at Care More Pain Management; and after resigning from Care More, he opened his own pain clinic. Albert was employed by Care More Pain Management owners Tammy Cantrell, of Oil Springs, KY., and Shelby Lackey, of Williamsport, KY. They pleaded guilty in April to conspiracy to distribute and unlawfully dispense Oxycodone and maintaining a drug involved premise.
The investigation started in 2009 when investigators with the Kentucky Attorney General’s Office observed large congregations of people routinely lined up outside Care More’s pain clinic.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, Jack Conway, Kentucky Attorney General and Robert L. Corso, Special Agent in Charge, DEA, jointly announced the plea.
The investigation was conducted by the DEA, the Kentucky Attorney General’s Office and the Paintsville Police Department. Assistant U.S. Attorney Roger West represented the U.S. Attorney’s Office in this case.
PACT Act Now Fully EnforceableRead the Press Release
BUFFALO, N.Y. - U.S. Attorney William J. Hochul, Jr. and Alcohol, Tobacco, Firearms and Explosives New York Field Division Special Agent in Charge Joseph A. Anarumo announced today that after nearly three years of litigation, the lawsuit seeking to stop the federal law aimed at restricting the internet sales of cigarettes and sales to children has ended with the dismissal of several Native American cigarette retailers’ claims.
In June of 2010, Red Earth, LLC., d/b/a Seneca Smokeshop, and the Seneca Free Trade Association (“SFTA”), which represent over 140 Seneca owned smoke shops, sued the federal government to stop the enforcement of the new federal law, referred to as the PACT Act (Prevent All Cigarette Trafficking), just days before it was to go into effect. In July 2010, U.S. District Judge Richard J. Arcara issued a preliminary injunction preventing the United States from enforcing certain sections of the PACT Act relating to the collection of state taxes on cigarette sales and other state regulations. Judge Arcara upheld other portions of the PACT Act, including a ban on retailers using the United States Postal Service to mail cigarettes.
The Government and plaintiffs both appealed to the Second Circuit Court of Appeals which upheld Judge Arcara’s preliminary injunction and referred the case back to the district court for trial and the district court litigation continued. However, in April of this year, the SFTA discontinued its claims and asked that its lawsuit be dismissed. In addition, on June 7, 2013, Judge Arcara dismissed the remaining Red Earth claims pursuant to an agreement between the U.S. Attorney’s Office and Red Earth. The dismissal also vacated the earlier preliminary injunction which essentially means that the full scope of the PACT Act can now be enforced nationwide by the federal government.
The PACT Act litigation was handled by Assistant U.S. Attorney and Civil Division Chief Mary E. Fleming, Assistant U.S. Attorney Richard D. Kaufman, Special Assistant U.S. Attorneys Jeffrey A. Cohen and Matthew Myerson of the ATF Office of Chief Counsel and the Department of Justice’s Consumer Litigation Attorney Gerald Kell.
"With the end of this litigation, the federal government can now begin to enforce the full breadth and scope of the PACT Act and help insure that our nation’s children are protected from the sales of cigarettes to minors,” said U.S. Attorney Hochul. “The PACT Act will also allow for the proper tax revenues to be collected on the sales of cigarettes by each state, revenues which will be used to finance additional health programs to combat the devastating health effects felt by Americans due to the availability of cheap cigarettes.”
“The PACT Act was passed to combat interstate trafficking in untaxed tobacco which has been found to deprive governments of billions of tax dollars and to fund organized criminal activity,” said Alcohol, Tobacco, Firearms and Explosives Special Agent in Charge Joseph A. Anarumo. “We are pleased that the Government will finally be able to use this important legislative tool.”Owner of Las Americas Latin Market Pleads Guilty to Food Stamp FraudRead the Press Release
Tampa, Florida - United States Attorney Robert E. O'Neill announces that Carlos Chavez (46, Sarasota) pleaded guilty yesterday to theft of government funds in relation to a food stamp fraud scheme perpetrated at his convenience store, Las Americas Latin Market. Chavez faces a maximum penalty of 10 years in federal prison.
According to the plea agreement, Chavez has been the partial owner and operator of “More 4 Less Grocery Store Inc.,” a convenience store located at 560 N. Washington Boulevard in Sarasota. Over the years, this convenience store has done business as “More 4 Less Grocery Store” and, most recently, as “Las Americas Latin Market.”
Since August 2009, Las Americas has participated in the Supplemental Nutrition Assistance Program (“SNAP”), formerly known as the Food Stamp Program. SNAP was established by the United States Government to alleviate hunger and malnutrition among low and middle income families by increasing their food-purchasing power and ability. The U.S. Department of Agriculture is responsible for administering SNAP. Regulations mandate that retail businesses are prohibited from purchasing SNAP benefits in exchange for cash, a practice commonly known as “cash-back.”
Between February 1, 2010, and March 1, 2012, Chavez conducted numerous illegal “cash-back” transactions with SNAP recipients at Las Americas. Chavez collected a substantial fee for providing this cash-back service to SNAP recipients—typically 25% to 50% of the overall SNAP transaction. For example, if a SNAP recipient requested $50 cash back, Chavez would generally charge $100 to the recipient’s EBT card. When the $100 purchase was authorized, he would give the SNAP recipient $50 in cash and, within 48 hours, Las Americas would receive a $100 redemption from the Department of Agriculture. This illegal activity resulted in a loss of $735,886.00 in SNAP benefits to the U.S. Department of Agriculture.
In February 2011, law enforcement officials noticed that there were numerous suspicious SNAP transactions at Las Americas. For instance, Las Americas’ SNAP redemptions far exceeded those of similar convenience stores and even medium-size grocery stores in the immediate area. Also, between February 1, 2010, and March 1, 2012, Las Americas’ SNAP redemptions far exceeded state and national averages by 1,300%. After law enforcement executed a search warrant at Las Americas, SNAP redemptions at the store fell precipitously.
This case was investigated by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the U.S. Department of Agriculture, the Internal Revenue Service Criminal Investigation, and the Sarasota Police Department. It is being prosecuted by Assistant United States Attorney Simon Gaugush.
North Windham Man Sentenced to 17 Years in Prison for Producing and Distributing Child PornographyRead the Press Release
Deirdre M. Daly, Acting United States Attorney for the District of Connecticut, announced that HEATH TRAHAN, 39, formerly of North Windham, was sentenced today by United States District Judge Janet Bond Arterton in New Haven to 204 months of imprisonment, followed by 15 years of supervised release, for producing and distributing child pornography.
According to court documents and statements made in court, TRAHAN was arrested on October 14, 2011, after investigators determined that he had emailed images of child pornography to an individual in New Jersey. At the time of his arrest, investigators seized several computers, related components and a mobile phone. Forensic analysis of the seized phone determined that TRAHAN used it to take photographs of two minor children engaging in sexually explicit conduct. Examination of the seized computers also revealed approximately 500 images and 60 videos of child pornography, which had not been produced by TRAHAN.
TRAHAN has been detained since his arrest. On December 20, 2012, he pleaded guilty to one count of production of child pornography and one count of distribution of child pornography.
This matter was investigated by Homeland Security Investigations with the assistance of the Connecticut State Police. The case was prosecuted by Assistant United States Attorneys Neeraj N. Patel and Deborah R. Slater. Assistant United States Attorney Fabiana Pierre-Louis of the District of New Jersey has assisted in the investigation and prosecution of this matter.
This prosecution is part of the U.S. Department of Justice’s Project Safe Childhood Initiative, which is aimed at protecting children from sexual abuse and exploitation. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
To report cases of child exploitation, please visit www.cybertipline.com.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722 [email protected]North Dakota Man SentencedRead the Press Release
United States Attorney Brendan V. Johnson announced that a Bismarck, North Dakota man convicted of Conversion of Farm Service Agency Mortgaged Property was sentenced on June 12, 2013 by U.S. District Judge Roberto A. Lange.
Wroper Kosel, age 25, was sentenced to 12 months of probation, a $2,400 fine, and a $100 special assessment to the Federal Crime Victims Fund.
Kosel was indicted by a federal grand jury in November of 2012. The conviction stems from an incident that occurred in March of 2010 where the Defendant sold, without permission or notification to Farm Service Agency, nine head of cattle that were security for loans Kosel had with the Farm Service Agency, a division of the Department of Agriculture.
The investigation was conducted by the Office of Inspector General for the United States Department of Agriculture. The case was prosecuted by Assistant U.S. Attorney Mikal Hanson.
Nevada Man Involved in Multi-Kilogram Cocaine Trafficking Conspiracy Sentenced to 32 Years' ImprisonmentRead the Press Release
RICHMOND, Va. – Torry Von Zenon, 41, of Las Vegas, Nevada, was sentenced today to 384 months’ imprisonment for his role in a drug trafficking conspiracy involving several kilograms of cocaine.
Neil H. MacBride, United States Attorney for the Eastern District of Virginia; and Karl C. Colder, Special Agent in Charge for the Drug Enforcement Administration (DEA)’s Washington Division, made the announcement after the sentencing was announced by United States District Judge Henry E. Hudson.
According to evidence presented at trial, Zenon and others conspired together to broker a 100 kilogram cocaine transaction for a potential buyer in Baltimore, Maryland. The participants flew to Richmond, Virginia, and then traveled to Baltimore for a meeting scheduled to take place on January 27, 2012. The conspirators met at an apartment leased by Zenon and counted the approximately $1,499,377.00 in United States currency gathered by the proposed buyers. Soon after the money was counted, three co-defendants (Dion Williams, Torry Zenon, and Vincent Williams) were arrested in possession of the cash, two Royal Sovereign money counters, two handguns, and other items. As a result, the transaction was not consummated. Both Zenon and Vincent Williams were found guilty on January 24, 2013, of conspiracy to distribute five kilograms or more of cocaine following a jury trial.
As part of the same conspiracy, Hiram Alvarez and others coordinated a second drug transaction to take place in March 2012. Documents filed with the Court show that Alvarez contacted co-defendant Topeka Sam in February 2012, and advised that he (Alvarez) had a seller willing to supply approximately 50 kilograms of cocaine. Sam, in turn, located two buyers who were willing to pay $26,000 per kilogram of cocaine. To execute those transactions, Sam and another co-defendant travelled to Richmond, Virginia, on March 7, 2012, to meet with sellers at the Hooter’s Restaurant, located at 7912 West Broad Street, Richmond, Virginia. At Hooter’s, Sam met with three individuals who she believed to be the sellers. Sam and the proposed sellers travelled to a storage facility located at 9001 Brook Road, Glen Allen, Virginia, where she inspected an undercover “trap” vehicle designed to conceal and transport kilogram quantities of cocaine. Sam viewed approximately 50 kilograms of cocaine that were concealed in the vehicle. She agreed to purchase all 50 kilograms of cocaine, with 25 kilograms going to a buyer from Maryland, and another 25 kilograms going to a buyer from New York.
On March 8, 2012, Sam, co-defendant Percy Robinson, and another co-defendant met with the proposed sellers at an address in Randallstown, Maryland. At that location, Robinson negotiated his proposed purchase of 25 kilograms of cocaine and presented approximately $250,000 in United States currency to serve as partial payment for the cocaine purchase. Robinson agreed to meet with the sellers on the following day to present additional money to complete the drug transaction. Robinson left the address and was intercepted by law enforcement during a traffic stop, at which time he was in possession of approximately $255,360.Later on March 8, 2012, Sam and co-defendant Reginald Marshall met with the proposed sellers at the Randallstown, Maryland address to discuss Marshall’s proposed cocaine purchase. Marshall negotiated the transaction and presented approximately $80,000 in United States currency to serve as partial payment for the cocaine. Marshall and Sam left soon thereafter with the understanding that Marshall would gather more funds to complete the purchase. Later that same day, law enforcement officers intercepted Marshall and Sam during a traffic stop, at which time the two were in possession of approximately $89,074.
Finally, on April 24, 2012, Sam and Robinson travelled to Richmond, Virginia to meet with proposed sellers about another drug transaction. During that meeting, Robinson agreed to purchase another 30 kilograms of cocaine. Soon thereafter, both Sam and Robinson were arrested by law enforcement for their alleged role in the drug trafficking conspiracy.
To date, all of the arrested defendants have been convicted and sentenced:
- Hiram Alvarez pleaded guilty and was sentenced to 324 months’ imprisonment on March 24, 2013.
- Dion Levering Williams pleaded guilty and was sentenced to 252 months’ imprisonment on April 19, 2013.
- Vincent A. Williams was convicted at trial and was sentenced to 250 months’ imprisonment on April 26, 2013.
- Topeka Kimberly Sam pleaded guilty and was sentenced to 130 months’ imprisonment on January 11, 2013.
- Percy Robinson pleaded guilty and was sentenced to 130 months’ imprisonment on November 13, 2012.
- Reginald Marshall pleaded guilty and was sentenced to 120 months’ imprisonment on January 25, 2013.
- Susan Smallwood pleaded guilty and was sentenced to 57 months’ imprisonment on November 19, 2012.
The investigation was coordinated by the Drug Enforcement Administration, which received assistance from the Chesterfield County Police Department, Hanover Sheriff’s Office, Richmond Police Department, Virginia State Police, Virginia Commonwealth University Police Department, Baltimore County Police Department, Baltimore City Police Department, Maryland State Police Department, Colton Police Department, Maryland Transportation Authority Police, Maryland Transit Administration Police, Maryland Natural Resources Police, Chino Police Department, Riverside Police Department, San Bernardino City Police Department, Pine Hill Police Department, Portsmouth Sheriff’s Office, and Department of Homeland Security – Homeland Security Investigations. Assistant United States Attorneys Michael Gill, Jamie Mickelson, and Peter Duffey prosecuted the case on behalf of the United States.
A copy of this press release may be found on the website of the United States Attorney's Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on http://pacer.uspci.uscourts.gov.Millette Womack Pleads Guilty to Defrauding Gulf Coast Claims FacilityRead the Press Release
MILLETTE WOMACK, age 38, a resident of New Orleans, Louisiana, pled guilty in federal court today before U.S. District Judge Stanwood R. Duval to conspiracy to commit wire fraud relating to a fraudulent application she made to the Gulf Coast Claims Facility (GCCF) for financial assistance in the aftermath of the Deepwater Horizon oil spill in the Gulf of Mexico, 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 24, 2010, the GCCF received WOMACK’s online claim form seeking an emergency 6-month payment in the amount of $10,000, wherein WOMACK falsely stated she lost earnings as a result of the Deepwater Horizon oil spill. Documentation in support of WOMACK’s claim included copies of fraudulent earning statements indicating that prior to the oil spill, WOMACK had worked as a line cook at Don’s Seafood Hut Restaurant & Oyster Bar, when, in fact, she was never so employed. As a result of these false representations and documentation contained in the claim, the GCCF paid WOMACK approximately $13,100.00.
WOMACK faces a maximum term of imprisonment of five (5) years, a fine of $250,000.00 and three (3) years of supervised release following any term of imprisonment. Sentencing is set for September 18, 2013.
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 Federal Bureau of Investigation and prosecuted by Assistant United States Attorney Loan “Mimi” Nguyen.
(Download Factual Basis )
Middlebury Man Sentenced to Federal Prison for Participating in Illegal Campaign Contribution SchemeRead the Press Release
Deirdre M. Daly, Acting United States Attorney for the District of Connecticut, and Kimberly K. Mertz, Special Agent in Charge of the Federal Bureau of Investigation, announced that DAVID MOFFA, 53, of Middlebury, was sentenced today by United States District Judge Janet Bond Arterton in New Haven to 24 months of imprisonment, followed by one year of supervised release, for participating in a scheme to direct illegal contributions into the campaign of a candidate for the U.S. House of Representatives. MOFFA, who is a former President of the American Federation of State, County and Municipal Employees (AFSCME), was also ordered to pay a $5,000 fine.
According to court documents and statements made in court, in August 2011, the State of Connecticut applied for a court order enjoining Roll Your Own (“RYO”) smoke shops from continuing to operate without complying with state law governing tobacco manufacturers. RYO smoke shops are retail businesses that sell loose smoking tobacco and cigarette-rolling materials and offer customers the option of paying a “rental” fee to insert the loose tobacco and the rolling materials into a RYO machine, which is capable of rapidly rolling large quantities of cigarettes. Customers did not pay a tax on the RYO cigarettes when rolled by the RYO machines, in contrast to cigarettes purchased over-the-counter.
Paul Rogers and George Tirado co-owned Smoke House Tobacco, a RYO smoke shop with two locations in Waterbury. Fearing that the Connecticut General Assembly would enact legislation harmful to RYO smoke shop owners’ business interests during the 2012 legislative session, Rogers, Tirado, MOFFA, Harry Raymond “Ray” Soucy, Benjamin Hogan and others engaged in a scheme to direct conduit contributions into the campaign of Christopher Donovan, a candidate for the U.S. House of Representatives. At the time, Donovan was also the Speaker of the Connecticut House of Representatives. As part of the scheme, the co-conspirators recruited multiple individuals to serve as conduit contributors to the campaign. These individuals permitted checks to be written in their own names to the campaign, and certain conspirators reimbursed them with cash, thereby concealing the fact that RYO smoke shop owners were contributing to the campaign.
The investigation revealed that, on November 2, 2011, MOFFA, Rogers and another RYO smoke shop owner met at Smoke House Tobacco in Waterbury and MOFFA advised the other attendees that Soucy could help the RYO smoke shop owners prevent the enactment of harmful legislation. MOFFA then called Soucy and, shortly thereafter, Soucy arrived at Smoke House Tobacco and joined the meeting. Soucy stated that he was a “friend” of Donovan and could assist in arranging a meeting between RYO smoke shop owners and Donovan.
On November 30, 2011, MOFFA met with Soucy, Rogers and another RYO owner at Smoke House Tobacco. During the meeting, MOFFA discussed with the RYO smoke shop owners that they should make a $5,000 contribution to the Donovan for Congress campaign at a fundraising event to be held on December 8, 2011. MOFFA volunteered to serve as a conduit contributor in order conceal the fact that the RYO smoke shop owners were actually financing the contributions. On that date, MOFFA told the RYO smoke shop owners “You give me the money, I’ll give you a check.”
At a meeting at Smoke House Tobacco on December 8, 2011, Rogers and another RYO smoke shop owner provided MOFFA with $2,500 in U.S. currency. MOFFA then wrote a check for $2,500 in his wife’s name to Donovan for Congress and provided Soucy with his wife’s biographical information so that Soucy could fill in a contribution envelope provided by the campaign. Soucy, Rogers and the other shop owner then went to the fundraising event, where they delivered two $2,500 contributions, including the contribution in MOFFA’s wife’s name to the campaign. Following the event, MOFFA met the group for dinner.
On approximately January 31, 2012, the Donovan for Congress campaign submitted to the Federal Election Commission (“FEC”) a report of the campaign’s receipts and disbursements for the period October 1, 2011 through December 31, 2011. The report falsely reported that it had received a $2,500 contribution from MOFFA’s wife when, in fact, neither MOFFA nor his wife had made a contribution to the campaign.
On June 1, 2012, FBI special agents investigating this matter interviewed MOFFA. During the interview, MOFFA falsely stated that he did not receive any cash in exchange for writing the check to the Donovan for Congress campaign.
On November 2, 2012, MOFFA pleaded guilty to one count of conspiring to make false statements to the FEC and to impede the FEC’s enforcement of federal campaign finance laws.
Soucy, Rogers, Tirado, Hogan, Waterbury business owner Daniel Monteiro and Donovan for Congress campaign manager Joshua Nassi also pleaded guilty to charges related to this scheme and await sentencing. In addition, on May 21, 2013, a jury found Robert Braddock, Jr., the campaign’s finance director, guilty of one count of conspiring to make false statements to the FEC and to impede the function of the FEC, one count of accepting more than $10,000 in federal campaign contributions made by persons in the names of others and one count of causing a false report to be filed with the FEC. He also awaits sentencing.
This matter is being investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorneys Christopher M. Mattei and Eric J. Glover.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722 [email protected]Miami Resident Sentenced for Identity TheftRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Michael J. DePalma, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), announced today the sentencing of defendant Josue Faustin, 21, of Miami. United States District Judge William J. Zloch sentenced Faustin to 27 months in prison, to be followed by 3 years of supervised release. In addition, the defendant was ordered to pay restitution in the amount of $43,591.90.
Faustin engaged in a fraud scheme using stolen identities to file fraudulent tax returns. The tax returns falsely claimed refunds and requested that the refunds be direct-deposited into Netspend debit card accounts which Faustin had opened in the names of unwitting identity theft victims. Faustin subsequently went to various ATM machines in Coral Springs, Broward County, and withdrew funds from the Netspend debit card accounts.
According to documents filed with the court, on May 17, 2012, Faustin was observed by a Coral Springs police officer as he went to CVS and 7-11 stores, and bought pre-paid credit cards. After the purchases, Faustin went to ATM machines and withdrew money. After being pulled over for a traffic stop, Faustin was found in possession of bundles of cash totaling $5,881, 3 cell phones, 15 Netspend debit cards loaded with approximately $30,000 from tax refunds, and 4 newly purchased debit cards.
Mr. Ferrer commended the investigative efforts of IRS-CI. The case was prosecuted by Assistant United States Attorney Jennifer Keene.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Maxton Man Sentenced to 480 Months for Drug TraffickingRead the Press Release
RALEIGH - United States Attorney Thomas G. Walker announced that in federal court yesterday, Senior United States District Judge James C. Fox sentenced JAMES WILLIAM PAUL SANDERSON, 35, of Maxton, North Carolina, to 480 months imprisonment followed by 5 years supervised release.
On September 20, 2011, SANDERSON pled guilty to the distribution of 50 grams or more of cocaine base (crack) and a quantity of dihydrocodeinone (Percocet) in violation of Title 21, United States Code, Section 841(a)(1).
The evidence presented during SANDERSON’S sentencing hearing revealed that he was a significant trafficker who was responsible for the distribution of multiple kilograms of crack and powder cocaine. The evidence also established that SANDERSON frequently used and possessed firearms during his drug activities.
This case is part of an Organized Crime Drug Enforcement Task Force investigation and was conducted by the Bureau of Alcohol, Tobacco, Firearms, & Explosives, the North Carolina State Bureau of Investigation, and the Robeson County Sheriff’s Office.
Manhattan U.S. Attorney Files and Settles Civil Fraud Lawsuit Against Subcontractor for Violating the Federal Disadvantaged Business Enterprise RegulationsRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Barry Kluger, the Inspector General of the Metropolitan Transportation Authority (“MTA”), and Douglas Shoemaker, Regional Special Agent-in-Charge of the U.S. Department of Transportation, Office of the Inspector General (“USDOT-OIG”), announced today that the United States has filed and simultaneously settled a civil fraud lawsuit against a subcontractor, KLEINBERG ELECTRIC INC. (“KLEINBERG”), for engaging in fraudulent conduct designed to take advantage of the Disadvantaged Business Enterprise Program in order to secure a subcontract on a federally-funded project for the design and construction of the Fulton Street Transit Center Dey Street Concourse (the “Dey Street Project”). KLEINBERG caused the prime contractor of the Dey Street Project to falsely represent to the MTA that KLEINBERG paid hundreds of thousands of dollars to a disadvantaged business enterprise (“DBE”) to perform legitimate work on the contract when, in reality, the DBE did not perform a “commercially useful function,” as required by the program’s regulations, and instead received a commission for the fraudulent use of its DBE status. As part of the settlement, KLEINBERG admitted and accepted responsibility for violating the DBE regulations governing the Dey Street Project and agreed to pay $936,000. The settlement was approved yesterday in Manhattan federal court by U.S. District Judge P. Kevin Castel.
Manhattan U.S. Attorney Preet Bharara said: “Kleinberg Electric painted a veneer of legitimacy on a subcontract that did not comply with the Disadvantaged Business Enterprise Program, and in doing so, subverted the aim of helping qualified minority and women-owned businesses succeed. Today’s settlement will help to ensure that all contractors who receive federal funds, whether they are prime contractors or subcontractors, follow the law.”
MTA Inspector General Barry Kluger said: “The civil settlement announced today is the result of the joint efforts of the Office of the United States Attorney, my Office, and the USDOT-OIG to combat construction fraud and protect the integrity of the federal Disadvantaged Business Enterprise Program. Today’s announcement demonstrates our continued commitment to create and maintain a level playing field in which all qualified disadvantaged business enterprises have a fair and equal opportunity to bid for, receive, and participate in MTA projects. I wish to thank the United States Attorney for the Southern District of New York and his staff for their strong and sustained efforts and our continuing partnership.”
USDOT-OIG Regional Special Agent-in-Charge Douglas Shoemaker said: “The Disadvantaged Business Enterprise Program is a business assistance program of the USDOT which helps economically and socially disadvantaged small businesses compete in the marketplace. Disadvantaged Business Enterprise fraud harms the integrity of the program and adversely impacts law-abiding small business contractors trying to compete on a level playing field. Working with our federal, state, and local law enforcement and prosecutorial colleagues, we will vigorously pursue those who violate the law, and expose and shut down fraud schemes that adversely affect public trust and USDOT-assisted transit programs.”
Background on DBEs
In 1980, the USDOT issued regulations in connection with a program to increase the participation of minority and disadvantaged business enterprises in federally-funded public construction contracts. To become certified as a DBE, a company must be owned and controlled by socially and economically disadvantaged individuals; be an independent business whose viability does not depend on its relationship with other firms; employ its own work force and own equipment necessary to perform its work; and be able to meet its financial obligations.
Recipients of USDOT construction grants, such as the MTA, are required to establish a DBE program that sets goals for the percentage of a project’s work that should be awarded to DBEs (“DBE goals”). General contractors on construction projects must make good faith efforts to meet the relevant DBE goals. The MTA has established a DBE program and requires companies that are awarded public works contracts to meet certain DBE goals.
Under the USDOT regulations, general contractors can count funds paid to DBEs toward the attainment of the DBE goals only if the DBEs performed a “commercially useful function.” A DBE subcontractor performs a “commercially useful function” only when it is responsible for the execution of the work of the contract; it actually performs, manages, and supervises the work involved; and it furnishes the supervision, labor, and equipment necessary to perform its work.
A DBE does not perform a “commercially useful function” if “its role is limited to that of an extra participant in a transaction, contract, or project through which funds are passed in order to obtain the appearance of DBE participation.”
Kleinberg’s Fraud
According to the allegations in the complaint:
The MTA set the DBE participation goal for the Dey Street Project at 10 percent of the project (or approximately $12.7 million). KLEINBERG was hired as a subcontractor for the Dey Street Project by the prime contractor, Slattery Skanska (“Skanska”). KLEINBERG expressly represented to Skanska that it would contract with J&R Rey as a second-tier DBE subcontractor for $600,000 in order to help Skanska reach its DBE goal for the contract. Between September 2005 and April 2007, at least 34 monthly requisitions were submitted to the MTA for the Dey Street Project including certifications of progress towards meeting the contract’s DBE participation goal. Relying on representations from KLEINBERG, Skanska reported to the MTA that J&R Rey was performing legitimate work on the contract. In reality, KLEINBERG never intended for J&R Rey to perform any legitimate tasks on the contract and J&R Rey never in fact performed any work on the contract. Indeed, the President of J&R Rey confirmed to the MTA’s Office of Inspector General that J&R Rey never performed a commercially useful function on the Dey Street Project. Instead, KLEINBERG paid J&R Rey “commissions” for the sole purpose of fraudulently using J&R Rey’s DBE status to earn DBE credit for the prime contractor.
Under the settlement agreement, KLEINBERG admitted, acknowledged, and accepted responsibility for causing false certifications to be submitted to the MTA representing that J&R Rey performed certain work and received certain payments, when in fact, J&R Rey never performed any work and received a commission from KLEINBERG for the fraudulent use of its DBE status. KLEINBERG also agreed to pay the United States $936,000 in damages.
Mr. Bharara praised the work of the MTA Office of Inspector General and the USDOT office of Inspector General for their invaluable work on this case.
The case is being handled by the Office’s Civil Frauds Unit.
Assistant U.S. Attorneys Lara Eshkenazi, Mara Trager, and Ellen London are in charge of the case.
U.S. v. Kleinberg Electric Complaint
U.S. v. Kleinberg Electric Stipulation and Order of DismissalManchester Man Pleads Guilty to Drug and Gun ChargesRead the Press Release
CONCORD, NH – Raymond Negron, 32, of Manchester, pled guilty in United States District Court for the District of New Hampshire to four counts of unlawful distribution of oxycodone and cocaine, one count of unlawful possession with the intent to distribute oxycodone and cocaine, the sale of a firearm to a prohibited person, and possession of a firearm with an obliterated serial number, announced United States Attorney John P. Kacavas.
Beginning in December, 2011, law enforcement began an investigation into Negron’s suspected drug trafficking within the city of Manchester. During the course of the investigation, Negron sold quantities of oxycodone tablets and cocaine. During one of the drug sales, Negron also sold an individual assisting in the investigation a SKS 7.62 caliber rifle that had previously been stolen from a pawn shop in Miami, Florida, knowing the individual had a prior felony conviction.
On March 20, 2012, a search warrant was executed at Negron’s residence. Located in Negron’s residence were additional quantities of oxycodone tablets and cocaine, items used for packaging and distributing narcotics and a “sawed off” Mossberg 20 gauge bolt action shotgun which had an obliterated serial number.
Negron is scheduled to be sentenced on September 16, 2013. He is facing a maximum statutory sentence for each of the drug charges of twenty years, a maximum statutory sentence for the selling of the firearm and possessing an unregistered firearm of ten years and up to five years for possessing a firearm with an obliterated serial number.
The case was investigated by the United States Drug Enforcement Administration’s High Intensity Drug Trafficking Area Task Force, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the New Hampshire State Police, and the Manchester, New Hampshire Police Department. The case was prosecuted by Assistant United States Attorney Jennifer Cole Davis.Managing Partner of U.S. Broker-Dealer Charged<br /> in Manhattan Federal Court with Participating in Massive International Bribery SchemeRead the Press Release
A managing partner of a U.S. broker-dealer was arrested today on felony charges arising from a conspiracy to pay bribes to a senior official in Venezuela’s state economic development bank, Banco de Desarrollo Económico y Social de Venezuela (BANDES).
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Preet Bharara for the Southern District of New York, and Assistant Director-in-Charge George Venizelos of the FBI’s New York Office made the announcement.
Ernesto Lujan, 50, among others, allegedly arranged the bribe payments to Maria De Los Angeles Gonzalez De Hernandez at BANDES in exchange for her directing BANDES’s financial trading business to the Broker-Dealer. Lujan was arrested this morning in Wellington, Fla., where he resides, and was presented in federal court in West Palm Beach, Fla.
“The huge bribes Mr. Lujan and others allegedly paid funneled millions to his firm and into his own pockets,” said Acting Assistant Attorney General Raman. “Bribery corrupts markets, and this arrest – just the latest in the Department’s recent series of anti-corruption charges in various districts – is yet another demonstration that, at the end of the day, the real dividends bribe payers reap are criminal charges.”
“From his perch as managing partner Ernesto Lujan allegedly engaged in a bribery scheme designed to drum up foreign trading business for his firm,” said U.S. Attorney Bharara. “Along with his alleged cohorts, three of whom were arrested last month, he pocketed millions from the alleged scheme which was executed through kickbacks to a Venezuelan government official and through money laundering.”“As alleged, Lujan led a conspiracy to bribe a foreign government bank official to steer business to his firm,” said FBI Assistant Director-in-Charge Venizelos. “As previously alleged, much of this trading activity was conducted solely to generate fees for the firm. Lujan personally reaped millions in profits, and used Swiss bank accounts to conceal both the bribes and his own proceeds of the scheme.”
On May 3, 2013, Gonzalez, along with two employees of the Broker-Dealer, Tomas Alberto Clarke Bethancourt and Jose Alejandro Hurtado, were arrested on separate charges relating to this bribery scheme. On May 6, 2013, the government filed a civil forfeiture action in Manhattan federal court seeking the forfeiture of assets held in a number of bank accounts associated with the scheme, including several bank accounts located in Switzerland, and the forfeiture of several properties in the Miami area related to Hurtado that were purchased with his proceeds from the scheme. That same day, the court also issued seizure warrants for multiple bank accounts and a restraining order relating to those Miami properties.
In a separate action, the U.S. Securities and Exchange Commission (SEC) announced civil charges against Lujan.
According to the allegations in the criminal complaint unsealed today, and other documents filed in Manhattan federal court, Lujan, a managing partner of the Broker-Dealer, which was headquartered in New York City, was the branch manager of its Miami offices. In 2008, the Broker-Dealer established a group called the Global Markets Group, which included Lujan, Clarke and Hurtado, and which offered fixed income trading services to institutional clients. One of the Broker-Dealer’s clients was BANDES, which operated under the direction of the Venezuelan Ministry of Finance. The Venezuelan government had a majority ownership interest in BANDES and provided it with substantial funding. Gonzalez, a BANDES official, oversaw the development bank’s overseas trading activity. At her direction, BANDES conducted substantial trading through the Broker-Dealer. Most of the trades executed by the Broker-Dealer on behalf of BANDES involved fixed income investments for which the Broker-Dealer charged the bank a mark-up on purchases and a mark-down on sales.
From December 2008 through October 2010, Lujan, along with Clarke, Hurtado and Gonzalez, allegedly participated in a bribery scheme in which Gonzalez directed trading business she controlled at BANDES to the Broker-Dealer, and in return, agents and employees of the Broker-Dealer, including Lujan, split the revenue the Broker-Dealer generated from this trading business with Gonzalez. During this time period, the Broker-Dealer generated over $60 million in mark-ups and mark-downs from trades with BANDES. Agents and employees of the Broker-Dealer, including Lujan, Clarke and Hurtado, allegedly devised a split with Gonzalez of the commissions paid by BANDES to the Broker-Dealer.
Court records allege that to further conceal the scheme, the kickbacks to Gonzalez were often paid using intermediary corporations and offshore accounts that she held in Switzerland, among other places. For example, at least $9.5 million was transferred from the Broker-Dealer to a Swiss bank account controlled by Clarke, who in turn transferred at least $6.5 million to a Swiss bank account controlled by Lujan. Lujan then allegedly transferred at least $1.5 million of these proceeds to a Swiss bank account controlled by Gonzalez.
Lujan was charged with one count each of conspiracy to violate the Foreign Corrupt Practices Act (FCPA), violation of the FCPA, conspiracy to violate the Travel Act and violation of the Travel Act, which each carry a maximum penalty of five years in prison. He is also charged with conspiracy to commit money laundering and money laundering, which each carry a maximum penalty of 20 years in prison.
This ongoing investigation is being conducted by the FBI, with assistance from the SEC and the Justice Department’s Office of International Affairs. Assistant Chief James Koukios and Trial Attorneys Maria Gonzalez Calvet and Aisling O’Shea of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Harry A. Chernoff and Jason H. Cowley of the Southern District of New York’s Securities and Commodities Fraud Task Force are in charge of the prosecution.
Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.The charges contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Managing Partner of U.S. Broker-Dealer Charged in Manhattan Federal Court with Participating in Massive International Bribery SchemeRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Mythili Raman, the Acting Assistant Attorney General for the Criminal Division of the United States Department of Justice, and George Venizelos, the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), today announced the arrest of ERNESTO LUJAN (“LUJAN”), a managing partner of a U.S. broker-dealer (the “Broker-Dealer”), on felony charges arising from a conspiracy to pay bribes to Maria De Los Angeles Gonzalez De Hernandez (“Gonzalez”), a senior official in Venezuela’s state economic development bank, Banco de Desarrollo Económico y Social de Venezuela (“BANDES”). LUJAN, among others, allegedly arranged the bribe payments to Gonzalez in exchange for her directing BANDES’s financial trading business to the Broker-Dealer. LUJAN, 50, was arrested this morning in Wellington, Florida, where he resides and was presented in federal court in West Palm Beach, Florida.
On May 3, 2013, Gonzalez, along with two employees of the Broker-Dealer, Tomas Alberto Clarke Bethancourt (“Clarke”) and Jose Alejandro Hurtado (“Hurtado”) were arrested on separate charges relating to this bribery scheme. On May 6, 2013, the Government filed a civil forfeiture action in Manhattan federal court seeking the forfeiture of assets held in a number of bank accounts associated with the scheme, including several bank accounts located in Switzerland, and the forfeiture of several properties in the Miami, Florida, area related to Hurtado that were purchased with his proceeds from the scheme. That same day, the Court also issued seizure warrants for multiple bank accounts and a restraining order relating to those Miami properties.
Manhattan U.S. Attorney Preet Bharara stated: “From his perch as managing partner Ernesto Lujan allegedly engaged in a bribery scheme designed to drum up foreign trading business for his firm. Along with his alleged cohorts, three of whom were arrested last month, he pocketed millions from the alleged scheme which was executed through kickbacks to a Venezuelan government official and through money laundering.”
Acting Assistant Attorney General Mythili Raman said: “The huge bribes Mr. Lujan and others allegedly paid funneled millions to his firm and into his own pockets. Bribery corrupts markets, and this arrest – just the latest in the Department’s recent series of anti-corruption charges in various districts – is yet another demonstration that, at the end of the day, the real dividends bribe payors reap are criminal charges.”
FBI Assistant Director-in-Charge George Venizelos said: “As alleged, Lujan led a conspiracy to bribe a foreign government bank official to steer business to his firm. As previously alleged, much of this trading activity was conducted solely to generate fees for the firm. Lujan personally reaped millions in profits, and used Swiss bank accounts to conceal both the bribes and his own proceeds of the scheme.”
In a separate action, the U.S. Securities and Exchange Commission (“SEC”) announced civil charges against LUJAN.
According to the allegations in the Criminal Complaint unsealed today, and other documents filed in Manhattan federal court:
Background on the Broker-Dealer and BANDES
LUJAN, a managing partner of the Broker Dealer, which was headquartered in New York City, was the branch manager of its Miami offices. In 2008, the Broker-Dealer established a group called the Global Markets Group, which included LUJAN, Clarke and Hurtado, and which offered fixed income trading services to institutional clients. One of the Broker-Dealer’s clients was BANDES, which operated under the direction of the Venezuelan Ministry of Finance. The Venezuelan government had a majority ownership interest in BANDES and provided it with substantial funding. Gonzalez, a BANDES official, oversaw the development bank’s overseas trading activity. At her direction, BANDES conducted substantial trading through the Broker-Dealer. Most of the trades executed by the Broker-Dealer on behalf of BANDES involved fixed income investments for which the Broker-Dealer charged the bank a mark-up on purchases and a mark-down on sales.
The Bribery Scheme
From December 2008 through October 2010, LUJAN, along with Clarke, Hurtado, and Gonzalez, participated in a bribery scheme in which Gonzalez directed trading business she controlled at BANDES to the Broker-Dealer, and in return, agents and employees of the Broker-Dealer, including LUJAN, split the revenue the Broker-Dealer generated from this trading business with Gonzalez. During this time period, the Broker-Dealer generated over $60 million in mark-ups and mark-downs from trades with BANDES. Agents and employees of the Broker-Dealer, including LUJAN, Clarke and Hurtado, devised a split with Gonzalez of the commissions paid by BANDES to the Broker-Dealer.
To further conceal the scheme, the kickbacks to Gonzalez were often paid using intermediary corporations and offshore accounts that she held in Switzerland, among other places. For example, at least $9.5 million was transferred from the Broker-Dealer to a Swiss bank account controlled by Clarke, who in turn transferred at least $6.5 million to a Swiss bank account controlled by LUJAN. LUJAN then transferred at least $1.5 million of these proceeds to a Swiss bank account controlled by Gonzalez.
A chart containing the charges and maximum penalties LUJAN faces is attached below.
Mr. Bharara praised DOJ’s Criminal Division and the FBI for their work in the investigation. He also thanked the SEC for its assistance in this case and noted that the investigation is continuing.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant United States Attorneys Harry A. Chernoff and Jason H. Cowley, and Fraud Section Assistant Chief James Koukios and Trial Attorneys Maria Gonzalez Calvet and Aisling O’Shea are in charge of the prosecution. Assistant United States Attorney Carolina Fornos is also responsible for the forfeiture aspects of the case.
Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.
The charges contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
U.S. v. Ernesto Lujan Complaint
Click here to view chart(s)
Local Cook Heads to Prison for Soliciting A Child for SexRead the Press Release
CORPUS CHRISTI, Texas – Corpus Christi resident Daniel Ricardo Barrientos, 30, has been ordered to federal prison following his conviction of soliciting a child for sex through the Internet, United States Attorney Kenneth Magidson announced today. A Corpus Christi federal jury convicted Barrientos on March 7, 2013, after a two-day trial.
Today, Senior U.S. District Judge Hayden Head, who presided over the trial, handed Barrientos a 121-month sentence. At the hearing, Judge Head stated that the sentence imposed was necessary to protect the public. Barrientos will also be required to serve a term of 15 years of supervised release following completion of the prison term, during which time he will be required to comply with numerous conditions that restrict his access to children and the Internet. He must also register as a sex offender.
During his jury trial, the government called several witnesses detailing the offense. The jury learned that Barrientos, a cook at a local chain restaurant, had communicated via email, text and telephone conversations with an undercover officer of the Corpus Christi Police Department’s Internet Crimes Against Children Task Force (CCPD-ICAC). The officer had portrayed herself as a single mother of two daughters ages 12 and 14 who was interested in having her children engage in sexual acts with an adult to which Barrientos responded with his desire to perform various sexual acts with the children.
Barrientos has been in custody since his arrest on Dec. 7, 2012, where he will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
Homeland Security Investigations and CCPD-ICAC conducted the investigation in a joint effort to protect children from child predators.
This case, prosecuted by Assistant United States Attorney Lance Duke, was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to locate, apprehend and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."Leader of International, $200 Million Credit Card Fraud Scam Pleads GuiltyRead the Press Release
TRENTON, N.J. – A New York man has admitted his role in leading one of the largest credit card fraud schemes ever charged by the U.S. Department of Justice, U.S. Attorney Paul J. Fishman announced.
Tahir Lodhi, 53, of Hicksville, N.Y., pleaded guilty before U.S. District Judge Anne E. Thompson in Trenton federal court to an information charging him with one count of conspiracy to commit bank fraud.
“Today’s admission of guilt by Tahir Lodhi brings to justice a leader of one of the biggest credit card fraud schemes ever charged by the United States,” U.S. Attorney Fishman said. “This type of fraud increases the costs of doing business for every American consumer, every day. Lodhi hurt not only the credit card issuers, but everyone who pays increased interest rates and fees because of the money sucked out of the system by criminals.”
“The criminal enterprise under Mr. Lodhi’s direction took advantage of the system and the good faith of banks and credit lenders they defrauded to the tune of hundreds of millions of dollars,” Aaron T. Ford, FBI Special Agent in Charge, Newark, said. “In doing so, they took advantage of the American public and legitimate users of the banking industry so that they and their families could live a lavish lifestyle. Today’s plea is the result of the hard work of the men and women of the FBI and our partners at the U.S. Secret Service, U.S. Postal Inspectors and the U.S. Social Security Administration, as well as a significant partnership with the private sector. In today’s world, where more and more individuals seek the fast buck by trying to defraud hard-working Americans, the Newark office of the FBI remains committed and focused on combating fraud at all levels of society.”
According to documents filed in this case and statements made in Court:Lodhi directed the activities of a number of other conspirators in fabricating more than 7,000 false identities to obtain tens of thousands of credit cards. They doctored credit reports to pump up the spending and borrowing power associated with the cards. Lodhi and others then borrowed or spent as much as they could, based on the phony credit history, but did not repay the debts, causing more than $200 million in confirmed losses to businesses and financial institutions.
The scheme involved a three-step process in which the defendants would:
· “Make up” a false identity by creating fraudulent identification documents and a fraudulent credit profile with the major credit bureaus.
· “Pump up” the credit of the false identity by providing false information about that identity’s creditworthiness to the credit bureaus. Believing the furnished information to be accurate, the credit bureaus would incorporate this material into the false identity’s credit report, making it appear that the false identity had excellent credit.
· “Run up” large loans using the false identity. The higher the fraudulent credit score, the larger the loans that the defendants could obtain. These loans were never repaid, and Lodhi and his conspirators reaped the profits.The Sham Companies
The enormous size and scope of the criminal fraud enterprise required Lodhi and his conspirators to construct an elaborate network of false identities. Across the country, Lodhi and his conspirators maintained more than 1,800 “drop addresses,” including houses, apartments, and post office boxes, which they used as the mailing addresses of the false identities.
They created dozens of sham companies that did little or no legitimate business, obtained credit card terminals for the companies and then ran up charges on the fraudulent cards. To accept payments in the form of credit cards, a business must establish a merchant account with an entity known as a merchant processor. The merchant processor provides the business with equipment to process credit cards, receives payments from credit card companies for credit cards run at the business, and deposits those payments, minus a fee, into the business’ bank account. When the merchant processors shut down accounts operated by the conspirators for fraud, they would apply for new terminals and create new companies.
The sham companies also served as “furnishers,” providing the credit bureaus with false information about the credit history of numerous false identities of people who purportedly worked at or owned the companies.
Tradelines
Lodhi and his conspirators also used sophisticated methods – including a network of black-market businesses called “tradelines” providers – to commit fraud.
Tradelines come in two varieties: primary tradelines and authorized user tradelines. Primary tradelines are lines of credit in a credit history. If a credit card user has primary tradelines in good standing, it can have a significant impact on the user’s credit score, enabling the user to borrow more from credit card issuers. Lodhi and his conspirators, however, trafficked in fraudulent primary tradelines.
A second kind of tradeline is the “authorized user” tradeline, where a credit card holder adds another, so-called “authorized user,” to a credit card account. This raises the credit score of the authorized user, who inherits some of the primary user’s credit history.
Certain of Lodhi’s conspirators created and sold fake lines of credit for false identities made up by Lodhi and others. These fraudulent primary tradelines were then used to increase the credit limits on fraudulent cards, so that the conspirators could reap even larger profits. Lodhi and other conspirators used the authorized user tradelines to create new identities.
Complicit Businesses
Lodhi and his conspirators also relied upon complicit businesses, including several jewelry stores in the Jersey City, N.J., area, to extract money from the fraudulent cards. The complicit businesses would allow certain conspirators to conduct sham transactions on the phony cards and would then receive the proceeds from the credit card companies and split them with the other conspirators. These complicit businesses maintained multiple credit card merchant processing accounts at the same time. By operating dozens of accounts, these businesses furthered the conspiracy by allowing more fraudulent transactions to be processed before the merchant processors shut down the account. The proceeds from these merchant terminals were deposited into various business checking accounts, and the money was paid out to the owners of the complicit businesses, along with other conspirators.
Lavish SpendingThe conspiracy generated enormous profits for Lodhi and his conspirators – even though they spent millions of dollars sustaining the elaborate network of drop addresses and running credit reports on the thousands of false identities. Records of the New York and New Jersey Departments of Labor reveal that many of Lodhi’s conspirators had no reported legitimate employment in the last five years. Nonetheless, Lodhi and his conspirators used the proceeds of the criminal enterprise to buy luxury automobiles, electronics, spa treatments, expensive clothing and millions of dollars in gold. They also stockpiled large sums of cash. Law enforcement discovered approximately $70,000 in cash in the oven of one of Lodhi’s conspirators.
Lodhi’s conspirators also moved millions of dollars through accounts under their control, and wired millions of dollars overseas. An analysis of 169 bank accounts of the defendants, sham companies, and complicit businesses has identified $60 million dollars in proceeds that flowed through the accounts, much of it withdrawn in cash. The conspirators wired millions of dollars to Pakistan, India, the United Arab Emirates, Canada, Romania, China and Japan. Due to the massive scope of the conspiracy, which involved more than 25,000 fraudulent credit cards, loss calculations are ongoing. Final figures may grow beyond the present confirmed losses of more than $200 million.
The count to which Lodhi pleaded guilty is punishable by a maximum potential penalty of 30 years in prison and a fine of $1 million, or twice the gain or loss caused by the offense. Sentencing is scheduled for Oct. 1, 2013.
The investigation previously resulted in the arrest of 22 defendants and the seizure of more than $4 million in gold from jewelry stores in Jersey City.
U.S. Attorney Fishman praised special agents of the FBI’s Cyber Division, under the direction of Special Agent in Charge Aaron T. Ford, for the investigation leading to today’s guilty plea. He also thanked postal inspectors under the direction of Postal Inspector in Charge Marie L. Kelokates, the U.S. Secret Service, under the direction of Special Agent in Charge James Mottola, and the U.S. Social Security Administration for their roles in the investigation.
The government is represented by Assistant U.S. Attorneys Daniel V. Shapiro and Zach Intrater of the Economic Crimes Unit and Barbara Ward of the Asset Forfeiture Unit of the U.S. Attorney’s Office in Newark.
13-246
Defense counsel: Howard Simmons Esq., New York
Lodhi Information
Laredo Resident Get Max in Firearms CaseRead the Press Release
LAREDO, Texas – Elias Fidel Vega Jr., 22, of Laredo, has been sentenced to 10 years in federal prison for multiple firearms convictions, United States Attorney Kenneth Magidson announced today. Vega pleaded guilty Nov. 13, 2012.
Today, U.S. District Judge Diana Saldana handed Vega the statutory maximum sentence of 120 months on each of his three convictions - possession of firearms by a convicted felon, receipt or possession of unregistered firearms and illegal possession of a machine gun. Each sentence will run concurrent to each other for a total of 10 years in federal prison. Following completion of his prison term, Vega will also be required to serve three years of supervised release. Vega was also ordered to pay a $2,500 fine.
On April 14, 2012, the Laredo Police Department (LPD) received a report of a shooting on the 2600 block of Monterrey Ave. Upon arrival, officers learned about a possible drive-by shooting and found Elias F. Vega Sr. with a bullet wound to his back. Officers further noticed the property was equipped with video surveillance cameras and obtained a consent to search and permission to retrieve the recorded video discs. During the search, officers located large amounts of ammunition, an S&W .40 caliber pistol, an AK-47 assault rifle, $18,000 cash and other miscellaneous items.
Video footage showed Vega Jr. arriving at the house agitated and then leaving with a handgun - later determined to be an S&W .40 caliber pistol. Minutes later, footage revealed a confrontation between Vega Jr. and two individuals at the Vega property. The two individuals left the property and fired into a parked vehicle. Vega fired a .223 Bushmaster, as a fully automatic machine gun, as they departed striking Vega Sr. in the process.
LPD detectives interviewed Vega Jr. and others present during the confrontation prior to the shooting. Detectives inquired as to the whereabouts of the Bushmaster machine gun and Vega Jr. took them to the back area of the property and unearthed the Bushmaster from the backyard.
LPD detectives and agents with the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) determined Vega Jr. had been previously convicted in the 49th District Court in Webb County for evading arrest with a motor vehicle in 2010.
Further, LPD detectives and ATF agents did not find any registration records in the National Firearms Registration and Transfer Record to confirm registration of the Bushmaster .223 machine gun to Vega Jr.
ATF inspection and testing of the Bushmaster rifle and various parts revealed it had been altered and converted to fire as a fully automatic machine gun. During testing, the weapon automatically fired five rounds with a single function of the trigger.
The case was investigated by ATF and Laredo Police Department and prosecuted by Assistant U.S. Attorney Raul Guerra.
Justice Department Settles with New Jersey Bus Company <br /> over Unequal Treatment of Passengers with DisabilitiesRead the Press Release
The Justice Department announced today that it has reached a settlement with DeCamp Bus Lines Inc., a New Jersey transportation company, to ensure that bus transportation is provided on equal terms to people with disabilities.
The Civil Rights Division of the U.S. Department of Justice and the U.S. Attorney’s Office for the District of New Jersey determined that DeCamp Bus Lines violated the Americans with Disabilities Act (ADA) by requiring that passengers with disabilities provide 48 hours of advance notice to secure a wheelchair-accessible bus, even though passengers without disabilities did not have to provide any advance notice. The settlement agreement requires DeCamp to comply with all ADA requirements for accessible service, and not exclude persons with disabilities from its transportation services.
As part of compliance with the ADA, DeCamp will stop requiring that passengers with disabilities provide advance notice to secure an accessible bus and to ensure that no passenger with a disability is denied an accessible bus when the passenger does not provide advance notice. DeCamp will also no longer post, distribute or publish any written material that states that a passenger with a disability is required to provide advance notice to secure accessible transportation and train all employees and contractors on the requirements of the ADA.
“Individuals who use wheelchairs should be able to expect the same level of bus service from large operators that is provided to others,” said Eve L. Hill, Senior Counselor to the Assistant Attorney General of the Civil Rights Division. “The department is committed to ensuring that bus companies are complying with this requirement.”
“People with disabilities should not be forced to take needless action simply to use a bus service designed for everyone,” said U.S. Attorney for the District of New Jersey Paul J. Fishman. “With this settlement, the Justice Department ensures individuals riding DeCamp will receive correct information about their access to transportation, and that access will not be denied.”
Title III of the ADA prohibits discrimination against people with disabilities by public accommodations, including motorcoach companies. Since Oct. 29, 2012, the Department of Transportation’s regulations implementing the ADA require that all large, fixed-route motorcoach bus fleets be 100 percent accessible to individuals with disabilities, including individuals who use wheelchairs. Once a fleet is 100 percent accessible, the motorcoach bus company may no longer require advance notice to provide accessible service. The Department of Transportation’s regulations also require that such companies perform regular maintenance checks to ensure that wheelchair lifts work, train their employees on accessibility requirements and file annual accessibility reports with the Federal Motor Carrier Safety Administration of the U.S. Department of Transportation.
The United States was represented by Trial Attorneys David W. Knight and Michael Riess of Civil Rights Division, and Assistant U.S. Attorney Michael Campion of the U.S. Attorney’s Office for the District of New Jersey.
To find out more about the ADA, this settlement, or the obligations of public accommodations, call the Justice Department’s toll-free ADA information line at 800-514-0301 or 800-514-0383 (TDD), or access its ADA website at www.ada.gov. ADA complaints may be filed by email to [email protected].
Joshua Nettles Sentenced to over 8 Years in Prison for Receiving Images and Movies Depicting the Sexual Exploitation of ChildrenRead the Press Release
JOSHUA NETTLES, age 38, a resident of Covington, Louisiana, was sentenced today by the U.S. District Court Judge Martin L.C. Feldman to 97 months after previously pleading guilty to receiving and possessing images depicting the sexual victimization of children, announced U. S. Attorney Dana J. Boente. Further, after NETTLES is released from prison, he will be subject to 5 years of supervised release and will be required to register as a sex offender.
According to court documents, NETTLES sought out, downloaded, and saved digital images depicting the sexual exploitation of prepubescent minors, including images of victims younger than four years old. A forensic review of NETTLES’ computer revealed that he had downloaded and saved approximately 1409 files and 14 videos depicting the sexual victimization of these children.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab “resources.”
This case was investigated by special agents from the Federal Bureau of Investigation. The prosecution of this case was handled by Assistant United States Attorney Jordan Ginsberg.
Joplin Woman Indicted for $88,000 Fraud SchemeRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Joplin, Mo., woman was indicted by a federal grand jury today for embezzling more than $88,000 from her employer, Frank Fletcher Ford, in a wire fraud scheme.
Kathryn M. Stayton, 36, of Joplin, was charged with 10 counts of wire fraud in an indictment returned by a federal grand jury in Springfield, Mo.
Today’s indictment alleges that Stayton embezzled $88,000 between September 2009 and September 2011, while employed as a controller and managing the accounting department at Frank Fletcher Ford, part of the Ford Auto Group in Joplin.
As a controller, Stayton had access to the dealership’s blank disbursement check stock and was an approved signor of manual checks. The dealership’s policy requires two signatures on each manual check, regardless of amount. Stayton allegedly wrote 131 checks totaling approximately $46,664 from Fletcher Ford’s bank account to herself or her family members then deposited the checks in her own bank accounts. She attempted to disguise the nature of these transactions by forging the second required authorizing signature on the checks.
In addition, the indictment says, Stayton took cash payments totaling approximately $41,365 that were made to Fletcher Ford. She allegedly attempted to disguise the theft of the cash payments through fraudulent journal entries in Fletcher Ford’s accounting records.
The total amount of loss to Fletcher Ford for both unauthorized check payments and theft of cash was approximately $88,030.
Dickinson cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Gary Milligan. It was investigated by the U.S. Secret Service and the Joplin, Mo., Police Department.Johnstown Child Pornography Possessor Gets 4-Year Prison TermRead the Press Release
JOHNSTOWN, Pa. - A resident of Johnstown, Pa., has been sentenced in federal court to 48 months in prison, followed by 20 years supervised release, and was required to register as a convicted sex offender on his conviction of possession of child pornography, United States Attorney David J. Hickton announced today.
United States District Judge Kim R. Gibson imposed the sentence on Austin J. Correll, 32.
According to information presented to the court, on Jan. 24, 2011, Correll knowingly possessed pictures and videos in individual computer graphic files which were produced using minors engaging in sexually explicit conduct. The computer graphic files were shipped or transported in interstate or foreign commerce.
Assistant United States Attorney John J. Valkovci, Jr., prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended Homeland Security Investigations for the investigation leading to the successful prosecution of Correll.
Iowa Woman Charged with Distribution of A Controlled SubstanceRead the Press Release
United States Attorney Brendan V. Johnson announced that a Cushing, Iowa woman has been indicted by a federal grand jury.
Dana Hoover, a/k/a Dana Strawn, age 51, was indicted by a federal grand jury on May 15, 2013 for Distribution of a Controlled Substance. Hoover appeared before U.S. Magistrate Judge Mark A. Moreno on June 11, 2013, and pled not guilty to the Indictment.
The maximum penalty upon conviction is 20 years of imprisonment, a $1,000,000 fine, or both; a mandatory period of at least 3 years up to life on supervised release, an additional 2 years of supervised release upon revocation; and a mandatory $100 special assessment to the Federal Crime Victims Fund. Restitution may also be ordered.
The charge is merely an accusation, and Hoover is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Northern Plains Safe Trails Drug Enforcement Task Force and Assistant U.S. Attorney Kathryn N. Rich is prosecuting the case.
Hoover was remanded to the custody of the U.S. Marshals Service. A trial date has been set for July 30, 2013.
Iowa Company, Employees Indicted for Releasing Contaminated Water into Duenweg SewerRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Des Moines, Iowa, company and two of its employees were indicted by a federal grand jury today for releasing thousands of gallons of gasoline-contaminated water into the city sewer system of Duenweg, Mo.
Seneca Companies, Inc., a petroleum and hazardous materials handling company headquartered in Des Moines, along with company employees Robert Morrison, 31, of Cowgill, Mo., a maintenance technician, and Greg Gill, 50, of Overland Park, Kan., a maintenance technician supervisor, were charged in a two-count indictment returned by a federal grand jury in Springfield.
According to today’s indictment, Seneca agreed to repair a gasoline line at Casey’s General Store, 8084 E., 7th Street, in Duenweg. This gasoline line failure had allowed gasoline to accumulate into a containment sump on Casey’s property. Morrison and Gill were responsible for safely repairing Casey’s gasoline line failure and safely disposing of any hazardous material in conformity with state and federal regulations.
On Dec. 16, 2010 they allegedly pumped gasoline-contaminated water out of Casey=s containment sump and into the sewer system without a permit.
The defendants are charged with one count of violating the Resource Conservation and Recovery Act by unlawfully disposing of a hazardous substance and one count of violating the Clean Water Act by introducing a hazardous substance into a sewer system.
Dickinson cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Abram McGull II. It was investigated by the U.S. Environmental Protection Agency – Criminal Investigation Division, the Duenweg, Mo., Fire Department, the Joplin, Mo., Fire Department and the Missouri Department of Natural Resources.