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11 June 2013
Goodwin Unveils Report and Recommendations on Safe SchoolsRead the Press Release
U.S. Attorney also debuts video for young people on the dangers of prescription drug abuse
CHARLESTON, W.Va. – United States Attorney Booth Goodwin today unveiled a comprehensive report and a set of recommendations resulting from the Summit on West Virginia Safe Schools that was held in February. The report was officially announced during the West Virginia Department of Education Office of Healthy Schools 2013 KidStrong Conference held today at theCharleston Civic Center.
Goodwin convened the statewide Summit on Feb 6, 2013. It brought together educators, law enforcement professionals, parents, mental health professionals, government officials and students to exchange ideas and develop practical steps to prevent and prepare for school violence.
U.S. Attorney Booth Goodwin said, “Last December’s horrific mass murder at Sandy Hook Elementary School in Newtown, Connecticut, was an unthinkable national tragedy. It was also an urgent call to action on the issue of school safety.”
“This report summarizes the Summit’s most critical lessons. It begins with an immediate agenda for West Virginia safe schools: ten things that we must get to work on right now if we want to make our schools safer,” Goodwin said.
“We owe it to our children and our educators to do everything in our power to keep our schools safe. Anything less is unacceptable,” Goodwin continued.
The report features an agenda of ten items for preparedness and response that should be implemented as soon as possible: 1) Establish a single, locked point of entry for every school, where a school official can see and identify would-be visitors before they enter. 2) Install classroom doors that lock quickly from inside the classroom – or keep doors locked all the time. 3) Install emergency buttons that sound a school-wide alarm and automatically call the police. 4) Explore the use of shatter-resistant materials on glass windows and door panels in schools (a requirement that the West Virginia School Building Authority recently adopted for all new schools built in the state). 5) Establish a Prevention Resource Officer Corps to place more law enforcement officers---including retired police officers and military veterans---in schools as prevention resource officers. 6) Bring together local police and educators to develop closer ties between law enforcement and schools. 7) Conduct active-shooter drills in every school at least annually, with full participation from law enforcement. 8) Develop a statewide program to identify potentially violent students early and intervene immediately. 9) Introduce a proven anti-bullying program in every school. 10) Implement a communication system to immediately disseminate information about violent or disruptive incidents to parents, other schools and child care facilities.
The report also features a section that focuses on preventing violence. The report’s prevention strategies include developing a concerted effort to address bullying; identifying and intervening with troubled children early; placing a greater emphasis on school climate; developing a system to comprehensively collect information about students with behavior issues; and expanding the number and role of school counselors and prevention resource officers.
In addition to unveiling the school safety report, Goodwin debuted a newly created video on prescription drug abuse. The video, developed through a partnership between the U.S. Attorney’s Office for the Southern District of West Virginia and the Huntington Police Department, and funded by a grant from the West Virginia Division of Justice and Community Services, is designed as an educational tool for young people to illustrate the harmful effects of abusing prescription drugs.
Click here to view the Report and Recommendations on West Virginia Safe Schools
Gang Member Pleads Guilty to Nuestra Familia RICO ChargesRead the Press Release
OAKLAND – United States Attorney Melinda Haag announced the guilty plea of Elias Gonzalez in a Nuestra Familia racketeering case.
Elias Gonzalez, a/k/a “Hammer”, 30, of Mabton, Washington, pleaded guilty on June 7, 2013, to conspiring to conduct the affairs of a racketeering enterprise, Nuestra Familia, in violation of Title 18, United States Code, Section 1962(d). According to court documents, Nuestra Familia is a violent Latino prison gang based within the California and Federal prison systems whose members exert control over street-level Norteño gang members engaged in drug trafficking and violent crime.
In his guilty plea, Gonzalez admitted that since 2005, he was a member of a Norteño gang in Yakima, Washington, and operated under the direction of members of Nuestra Familia in the Northern District of California. As part of his participation in the racketeering conspiracy, Gonzalez moved portions of the proceeds of his drug trafficking to Nuestra Familia members’ prison accounts. Gonzalez admitted that the racketeering conspiracy involved acts of violence, including assault and murder, against rival gang members and others who defied or betrayed Nuestra Familia, such as individuals who cooperated with law enforcement. The maximum penalties for his crimes include life in prison and $250,000 in fines.
This case is part of Operation Red Dawn, an investigation targeting members and associates of Nuestra Familia,. Operation Red Dawn is an investigation by the FBI’s Safe Streets East Bay Task Force, the Oakland Police Department, the Red Bluff Police Department, the Campbell Police Department, the San Jose Police Department, the Livermore Police Department, and the Special Services Unit of the California Department of Corrections and Rehabilitation. The case is being prosecuted by the Strike Force and Violent Crimes Unit of the United States Attorney’s Office.
Gonzalez is the third of the eleven defendants in this case to plead guilty. On April 5, 2013, Peter Cuen, a/k/a “Mijo,” and Peggy Larez also pleaded guilty to conspiring to conduct the affairs of Nuestra Familia, in violation of Title 18, United States Code, Section 1962(d). Cuen pleaded guilty to an additional charge of possession of a firearm in furtherance of that conspiracy, in violation of Title 18, United States Code, Section 924(c). Sentencing for Cuen and Larez is scheduled for August 22, 2013, while sentencing for Gonzalez is scheduled for September 19, 2013.
Franklin Troy Caplette Sentenced in U.S. District CourtRead the Press Release
The United States Attorney's Office announced that during a federal court session in Great Falls, on June 10, 2013, before Chief U.S. District Judge Dana L. Christensen, FRANKLIN TROY CAPLETTE, a 28-year-old resident of Havre, was sentenced to a term of:
Prison: 62 months
Special Assessment: $100
Supervised Release: 4 years
CAPLETTE was sentenced in connection with his guilty plea to possession with intent to distribute methamphetamine.
In an Offer of Proof filed by Assistant U.S. Attorney Jessica A. Betley, the government stated it would have proved at trial the following:
CAPLETTE had been known throughout the Rocky Boy's and Havre communities to be a source of methamphetamine for the past several years. Law enforcement began their investigation into CAPLETTE in 2010.
Several witnesses would have testified that they purchased methamphetamine numerous times from CAPLETTE between 2010 and August 2012.
Because there is no parole in the federal system, the "truth in sentencing" guidelines mandate that CAPLETTE will likely serve all of the time imposed by the court. In the federal system, CAPLETTE does have the opportunity to earn a sentence reduction for "good behavior." However, this reduction will not exceed 15% of the overall sentence.
The investigation was conducted by the Havre Police Department.
Former VA Hospital Federal Credit Union President Pleads Guilty to an Information Charging EmbezzlementRead the Press Release
Little Rock - Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas, and Brian T. Marr, Special Agent in Charge of the United States Secret Service Little Rock Field Office, announced the waiver of Indictment and a plea of guilty by Former VA Hospital Federal Credit Union President Karen York, age 45, to a federal Information charging credit union embezzlement.
At the change of plea hearing, the defendant admitted that she engaged in a check kiting scheme and made false deposit entries to her account, and subsequently, falsified records to hide the fact that funds were missing from the VA Hospital Federal Credit Union. The defendant also admitted to using VA Hospital Federal Credit Union funds for an unauthorized pay increase and unreimbursed health insurance. An audit from December 2000 through June 2012 determined a fraud loss of $62,513.09 attributed to the defendant, but the defendant repaid a portion of that loss on the day she was suspended. The parties agreed that the defendant owes restitution in the amount of $43,940.59.
The statutory penalty for credit union embezzlement, in violation of 18 U.S.C. § 657, is not more than 30 years incarceration in the Bureau of Prisons with a possible fine of up to $1,000,000, and not more than 5 years supervised release.
The investigation was conducted by the United States Secret Service.
(York Information )
Former U.S. Corrections Officer Sentenced for Theft of Government PropertyRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced that a former correctional officer at the United States Penitentiary-Lewisburg was sentenced today in Williamsport by U.S. District Court Judge Christopher C. Conner to 12 months’ probation for the theft of government property. The Court ordered restitution in the amount of $1,545.76, which represented the cost of the materials.
According to United States Attorney Peter J. Smith, a criminal Information was filed in January 2013 charging Fred Hagenbuch, age 52, of Danville, with theft of government property. The property stolen was from the Federal Corrections Complex at Allenwood and included electrical conduit, fence post, and mesh fencing. At the time of the theft in December 2010, Hagenbuch was employed as a Senior Officer Specialist at the Lewisburg Penitentiary.
Hagenbuch pleaded guilty in February 2013.
The case was investigated by the U.S. Department of Justice’s Office of the Inspector General. The case was prosecuted by Assistant U.S. Attorney William Simmers.
Former Suburban Police Chief and Husband Charged with Hiding Business Income and $500,000 from State Grant in False Tax ReturnsRead the Press Release
CHICAGO — REGINA EVANS and her husband, RONALD EVANS, the former police chief and the former inspector general, respectively, of suburban Country Club Hills, were each charged today with three counts of filing false federal income tax returns for allegedly failing to report all of their income during calendar years 2007-09. They were charged in a felony information filed today in U.S. District Court in Chicago.
Regina Evans’ attorney has authorized the government to disclose that she will be pleading guilty to the tax charges after the government files a request to transfer the case against her to the Central District of Illinois in Springfield for disposition. Regina Evans, 50, who was Country Club Hills police chief from 2009 to 2011, and Ronald Evans, 46, are scheduled to appear in U.S. District Court in Springfield on June 18.
The defendants were charged with failing to report all of their income in 2009, when they allegedly converted to personal income more than $500,000 of a $1.25 million state grant. They also allegedly failed to report all of their income in 2007, 2008, and 2009 from Prime Time Limousine, a Chicago transportation and security services company that they jointly owned and operated.
According to the charging document, Regina Evans founded and ran an organization called We Are Our Brother’s Keeper that, in 2009, received a $1.25 million employment opportunities grant from the Illinois Department of Commerce and Economic Opportunity to provide pre-apprenticeship educational and vocational training for people employed in building trades, such as bricklayers and electricians. The couple allegedly used more than $500,000 for non-grant-related personal purposes, making that money personal income.
On their federal income tax return for 2009, the couple stated that Prime Time’s gross receipts were approximately $150,000, knowing that its gross receipts totaled more than $201,297. They also allegedly stated that they did not have any other income, knowing that they had converted at least $500,000 in grant money.
In 2007, the defendants allegedly filed a false tax return by reporting Prime Time’s gross receipts were approximately $205,290, when the business actually had gross receipts totaling more than $360,649, and they allegedly filed a false 2008 tax return stating Prime Time’s gross receipts were approximately $150,630, when it actually had gross receipts of more than $291,414.
The charges were announced today by Gary S. Shapiro, United States Attorney for the Northern District of Illinois, and James C. Lee, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division in Chicago. The Chicago Office of the Federal Bureau of Investigation participated in the investigation.
Filing a false federal income tax return carries a maximum penalty of three years in prison and a $250,000 fine. In addition, a defendant convicted of tax offenses faces mandatory costs of prosecution and remains civilly liable to the government for any and all back taxes, as well as a potential civil fraud penalty of up to 75 percent of the underpayment plus interest. If convicted, the Court must determine a reasonable sentence to be imposed under federal statutes and the advisory United States Sentencing Guidelines.
The government is being represented by Assistant U.S. Attorney Joel Hammerman.
The public is reminded that an information contains only charges and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Information
Former IRS Worker Sentenced for Extortion and Tax FraudRead the Press Release
PHILADELPHIA - Former Internal Revenue Service employee Patricia Fountain, 36, of Philadelphia, was sentenced today to 19 years in prison for a series of tax refund schemes that defrauded the U.S. Government. Fountain was convicted on March 13, 2013, along with co-defendants Larry Ishmael, and Calvin Johnson, Jr., also of Philadelphia, who are awaiting sentencing. A federal jury found each of the three defendants guilty of multiple counts of both conspiracy and filing false claims/tax returns to the IRS. For abusing her public office, Fountain was also found guilty of extortion under color of official right. Collectively, the defendants’ schemes cost the IRS well over $3 million. U.S. District Court Judge Stewart Dalzell also ordered Fountain to pay restitution in the amount of $1.7 million, a $1,300 special assessment, and ordered three years of supervised release.
“Our system of government is based upon a tax system which requires truthful disclosure by taxpayers of the amounts due to the IRS,” said Memeger. “When individuals defraud the system to avoid their obligation to pay taxes or steal money from the United States Treasury, the rest of the tax paying public bears the cost. Today’s sentence sends a strong message to deter this type of criminal behavior. We will continue to prosecute tax cheats to the fullest extent of the law, particularly those government employees who abuse the public trust and tarnish the reputation of honest and hard-working federal employees.”
“Federal employees must not use their positions of public trust for private gain, especially those employees who are entrusted with the fair and honest administration of our Nation’s tax laws,” said J. Russell George, the Treasury Inspector General for Tax Administration. “In safeguarding the integrity of the Federal system of tax administration, TIGTA will vigorously investigate allegations of corruption and ensure that those responsible for misconduct are held accountable.”
“At the IRS, protecting taxpayer money is a matter we take extremely seriously,” said Internal Revenue Service Criminal Investigation Special Agent-in-Charge Akeia Conner. “The defendants who perpetrated this scheme systematically defrauded the government and the taxpaying public. Today's sentencing of Patricia Fountain and prior sentencings of her co-defendants Calvin Johnson Sr., William S. Martin, and Andre Bruce demonstrates our unwavering commitment to protecting the interests of law-abiding taxpayers.”
Each of the defendants solicited claimants whose personal information the defendants used to file false tax returns claiming the Telephone Excise Tax Refund (TETR) in 2007 and the First Time Homebuyer Credit in 2009. Fountain also claimed the TETR by filing false tax returns for herself and for Ishmael, and used one of the claimant’s information to file a false tax return in 2008. Fountain also filed false claims claiming the American Opportunity Tax Credit between 2010 and 2012. Johnson, Jr. also used claimants’ information to file false tax returns in 2012, including while he was being supervised on pretrial release in this case.For each of the schemes, the defendants charged claimants a cash fee. With respect to her TETR scheme, which Fountain engineered using inside information from the IRS, Fountain warned that she would “red flag” those claimants who received a refund without paying her $400 fee. She then filed amended returns for certain claimants whom she believed had not paid the fee, causing the IRS to demand repayment from them. Fountain and Ishmael pooled their cash fees for their mutual use, including an $11,299 down payment on a Mercedes Benz R350, which Fountain structured by paying $9,900 in cash and charging the rest to a credit card.
Johnson’s sentencing hearing is scheduled for June 18, 2013 and Ishmael’s sentencing hearing is scheduled for July 26, 2013. Pending sentencing, Ishmael and Johnson Jr. are being detained in federal custody. Judge Dalzell previously sentenced co-defendants Andre Bruce, Howard Chilsom, William Martin, and Calvin Johnson, Sr. in April 2013.
The case was investigated by the Treasury Inspector General for Tax Administration and IRS Criminal Investigation. It is being prosecuted by Assistant United States Attorney Joe Khan and Department of Justice, Tax Division Trial Attorney Tiwana L. Wright.UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Former Hertford County, N.C., Chief Deputy Pleads Guilty for Assault on InmateRead the Press Release
The Justice Department announced today that Timothy Lassiter, the former chief deputy of the Hertford County, N.C., Sheriff’s Office, pleaded guilty today in federal court in Elizabeth City, N.C., to violating the civil rights of an inmate during a court appearance.
According to information presented to the court, on June 12, 2012, the inmate created a verbal disturbance during a court appearance. After removing the inmate from the courtroom, Lassiter repeatedly and unjustifiably punched the inmate in his face and body at a time when the inmate was handcuffed and posed no threat to law enforcement. The inmate was injured as a result of the assault.
“The Civil Rights Division of the Department of Justice works to ensure that no law enforcement officer abuses his power to assault a person in his custody,” said Deputy Assistant Attorney General for Civil Rights Roy L. Austin Jr. “This assault by a sheriff’s deputy which started in a courtroom – the very place where the constitutional rights of all Americans, including those accused of crimes, are applied and enforced on a daily basis. This plea demonstrates that the department will vigorously defend the integrity of our legal system.”
U.S. Attorney for the Eastern District of North Carolina Thomas G. Walker stated, “This deputy’s deliberate abuse of authority undermines the efforts of the vast majority of law enforcement officers who honor their oath to uphold the law.”
“Every citizen has the right to expect law enforcement officers to act legally and in accordance with the Constitution. Former Chief Deputy Timothy Lassiter's actions were inexcusable. The charges against him should serve as a reminder that no one is above the law,” said John Strong, the Special Agent in Charge of the Charlotte Division of the FBI.
Lassiter pleaded guilty to one count of deprivation of rights under color of law. He faces a statutory maximum sentence of 10 years in prison. A sentencing hearing has been scheduled for Sept. 9, 2013.
This case was investigated by the FBI and prosecuted by Civil Rights Division Trial Attorney Betsy Biffl and Assistant U.S. Attorney for the Eastern District of North Carolina Toby Lathan.
Former Congressman Richard G. Renzi Convicted of <br /> Extortion and Bribery in Illegal Federal Land SwapRead the Press Release
A former U.S. Congressman and a real-estate investor were convicted today by a federal jury in Tucson, Ariz., of conspiring together to extort and bribe individuals seeking a federal land exchange, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney John Leonardo of the District of Arizona and Special Agent in Charge Douglas F. Price of the FBI’s Phoenix Division.
Richard G. Renzi, 55, of Burke, Va., was found guilty of 17 felony offenses including conspiracy, honest services wire fraud, extortion under color of official right, racketeering, money laundering and making false statements to insurance regulators.
James W. Sandlin, 62, of Sherman, Texas, was found guilty of 13 felony offenses including conspiracy, honest services wire fraud, extortion under color of official right and money laundering.
Sentencing is set before U. S. District Judge David C. Bury on Aug. 19, 2013.
“Former Congressman Renzi’s streak of criminal activity was a betrayal of the public trust and abuse of the political process,” said Acting Assistant Attorney General Raman. “After years of misconduct as a businessman, political candidate and member of Congress, Mr. Renzi now faces the consequences for breaking the laws that he took an oath to support and defend.”
“Our democracy is undermined whenever our elected officials misuse the power entrusted to them by the voters to serve their own private interests rather than in the service of the public interest,” said U.S. Attorney Leonardo. “The jury’s verdict reinforces the fundamental principle that our society is governed by the rule of law, and that no citizen, including the most influential and powerful among us, is above the law.”
“Today's conviction is a culmination of the investigative efforts of the FBI and IRS-Criminal Investigation over a period of several years,” said FBI Special Agent in Charge Price. “Public corruption is one of the top criminal priorities of the FBI, and it is imperative that elected public officials be held accountable to uphold the public's trust. The FBI remains committed to this criminal priority in combating public corruption at all levels.”
According to evidence at trial, Renzi, then a member of Congress from Arizona’s 1st Congressional District, promised in 2005 to use his legislative influence to profit from a federal land exchange that involved property owned by Sandlin, a real-estate investor.
At the time, Sandlin owed Renzi $700,000 in future payments from their business dealings, and Renzi threatened a proponent of the land exchange that he would not support it unless they purchased Sandlin’s property in Cochise County, Ariz. When that individual refused, Renzi promised a second proponent of a land exchange that he would support the exchange if they purchased Sandlin’s property. According to an agreement reached in May 2005, Sandlin was paid $1 million in earnest money, out of which he paid $200,000 to Renzi. Just before Sandlin received the $1.6 million balance owed on the exchange, he paid an additional $533,000 to Renzi.
Evidence at trial further showed that from 2001 to 2003, Renzi engaged in insurance fraud by diverting his clients’ insurance premiums to fund his first campaign for Congress, and he provided false statements to various state regulators who were investigating his activities.
Renzi was indicted in February 2008, and in October 2008, Renzi moved to dismiss the indictment under his rights as a member of Congress under the Speech or Debate Clause. The court denied his motion in February 2010, and Renzi pursued an interlocutory appeal. After Renzi’s appeal was unsuccessful, trial was set for May 2013.
Honest services wire fraud, extortion under color of official right, concealment money laundering and racketeering each carry maximum penalties of 20 years in prison. Conspiracy carries a maximum penalty of five years in prison, and making false statements to insurance regulators and transactional money laundering each carry maximum penalties of 10 years in prison.
This case was investigated by the FBI and the Internal Revenue Service – Criminal Investigation. The prosecution was handled by Trial Attorneys David Harbach and Sean Mulryne of the Department of Justice’s Public Integrity Section and Assistant U.S. Attorneys Gary Restaino and James Knapp of the District of Arizona.
Former Congressman Richard G. Renzi Convicted of Extortion and Bribery in Illegal Federal Land SwapRead the Press Release
Office of the United States Attorney, John S. Leonardo
District of Arizona
CRM
(202) 514-2007
TTY (866) 544-5309
WWW.JUSTICE.GOVWASHINGTON – A former U.S. Congressman and a real-estate investor were convicted today by a federal jury in Tucson, Ariz., of conspiring together to extort and bribe individuals seeking a federal land exchange, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney John Leonardo of the District of Arizona.
Richard G. Renzi, 55, of Burke, Va., was found guilty of 17 felony offenses including conspiracy, honest services wire fraud, extortion under color of official right, racketeering, money laundering and making false statements to insurance regulators.
James W. Sandlin, 62, of Sherman, Texas, was found guilty of 13 felony offenses including conspiracy, honest services wire fraud, extortion under color of official right and money laundering.
Sentencing is set before U. S. District Judge David C. Bury on August 19, 2013.
“Former Congressman Renzi’s streak of criminal activity was a betrayal of the public trust and abuse of the political process,” said Acting Assistant Attorney General Raman. “After years of misconduct as a businessman, political candidate and member of Congress, Mr. Renzi now faces the consequences for breaking the laws that he took an oath to support and defend.”
U.S. Attorney John Leonardo stated, “Our democracy is undermined whenever our elected officials misuse the power entrusted to them by the voters to serve their own private interests rather than in the service of the public interest. The jury’s verdict reinforces the fundamental principle that our society is governed by the rule of law, and that no citizen, including the most influential and powerful among us, is above the law.”
FBI Special Agent in Charge Douglas G. Price stated, “Today’s conviction is a culmination of the investigative efforts of the FBI and IRS-Criminal Investigation over a period of several years. Public corruption is one of the top criminal priorities of the FBI, and it is imperative that elected public officials be held accountable to uphold the public’s trust. The FBI remains committed to this criminal priority in combating public corruption at all levels.”
According to evidence at trial, Renzi, then a member of Congress from Arizona’s 1st Congressional District, promised in 2005 to use his legislative influence to profit from a federal land exchange that involved property owned by Sandlin, a real-estate investor.At the time, Sandlin owed Renzi $700,000 in future payments from their business dealings, and Renzi threatened a proponent of the land exchange that he would not support it unless they purchased Sandlin’s property in Cochise County, Ariz. When that individual refused, Renzi promised a second proponent of a land exchange that he would support the exchange if they purchased Sandlin’s property. According to an agreement reached in May 2005, Sandlin was paid $1 million in earnest money, out of which he paid $200,000 to Renzi. Just before Sandlin received the $1.6 million balance owed on the exchange, he paid an additional $533,000 to Renzi.
Evidence at trial further showed that from 2001 to 2003, Renzi engaged in insurance fraud by diverting his clients’ insurance premiums to fund his first campaign for Congress, and he provided false statements to various state regulators who were investigating his activities.
Renzi was indicted in February 2008, and in October 2008, Renzi moved to dismiss the indictment under his rights as a member of Congress under the Speech or Debate Clause. The court denied his motion in February 2010, and Renzi pursued an interlocutory appeal. After Renzi’s appeal was unsuccessful, trial was set for May 2013.
Honest services wire fraud, extortion under color of official right, concealment money laundering and racketeering each carry maximum penalties of 20 years in prison. Conspiracy carries a maximum penalty of five years in prison, and making false statements to insurance regulators and transactional money laundering each carry maximum penalties of 10 years in prison.
This case was investigated by the FBI and the Internal Revenue Service – Criminal Investigation. The prosecution was handled by Assistant U.S. Attorneys Gary Restaino and James Knapp of the District of Arizona and Trial Attorneys David Harbach and Sean Mulryne of the Department of Justice’s Public Integrity Section.
Former Chief Executive of Mortgage Servicing Company <br /> Pleads Guilty to Bank Fraud for Scheme <br /> to Withhold Funds from Wells Fargo BankRead the Press Release
The former president and chief executive officer of U.S. Mortgage, a loan servicing company in Nevada, pleaded guilty today for his role in a scheme to defraud Wells Fargo Bank out of more than $8 million.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney Daniel G. Bogden of the District of Nevada made the announcement after the plea was accepted by U.S. District Judge Andrew P. Gordon.
Earl Gross, 75, of Las Vegas, pleaded guilty to one count of bank fraud. Gross faces a maximum penalty of 30 years in prison when he is sentenced on Sept. 19, 2013. Gross has agreed to forfeit $8,440,439 pursuant to his plea agreement.
According to plea documents, Wells Fargo Bank contracted with U.S. Mortgage to service pools of residential mortgage loans held by investors in mortgage-backed securities. Under the agreement, Gross and U.S. Mortgage were obligated to collect from the borrowers the monthly payments that the borrowers made toward their mortgage obligations and forward these proceeds to Wells Fargo Bank. In the event that a borrower paid off the loan – usually by selling the mortgaged property – U.S. Mortgage was obligated to remit to Wells Fargo Bank the full payoff amount. U.S. Mortgage agreed to provide Wells Fargo Bank with monthly reports, which described the status of the loans, such as the balance, principal and interest, and payment status and received servicing fees for each loan it serviced.
According to the indictment, from 2004 to 2009, Gross and U.S. Mortgage withheld more than $8 million in loan payoffs that were due Wells Fargo Bank by submitting to the bank reports stating that numerous borrowers were continuing to make monthly payments when in fact they had paid off the loans in full. Rather than remit to Wells Fargo Bank the full payoff amount, Mr. Gross and U.S. Mortgage forwarded only what the borrowers’ monthly payment would have been and retained the difference in U.S. Mortgage’s bank account. To deceive Wells Fargo Bank about the status of paid off loans, Mr. Gross and U.S. Mortgage created fake amortization schedules indicating that borrowers who had sold and paid off homes were continuing to make monthly payments. In addition to withholding loan payoff amounts to which he was not entitled, Mr. Gross charged Wells Fargo Bank fees to service mortgage loans that had been paid off.
The case was investigated by the FBI. This case is being prosecuted by Brian R. Young and Charles La Bella of the Criminal Division’s Fraud Section, with assistance from Roberto Iraola of the Office of International Affairs and the United States Attorney’s Office for the District of Nevada.
Today’s guilty plea was a result of efforts by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.StopFraud.gov.
East St. Louis Man Sentenced for Illegally Possessing A FirearmRead the Press Release
ReSean Ridgel, a 25-year old East St. Louis, Illinois resident, was sentenced in the United States District Court on June 10, 2013, to 46 months in federal prison for illegally possessing a firearm, Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced.
According to court documents, Ridgel pled guilty to being a felon in possession of a firearm and possessing an unregistered firearm, commonly referred to as a sawed-off shotgun, in February 2011 after having been convicted of retail theft. Having considered these facts and Ridgel’s multiple prior criminal convictions, the Court sentenced Ridgel to 46-months in federal prison. There is no parole in the federal prison system. In addition to the prison sentence, Ridgel must serve 3 years of supervised release following imprisonment. According to United States Attorney Stephen R. Wigginton, “My office remains committed to prosecuting criminals who illegally arm themselves. We will continue to protect our communities from unauthorized gun possession. A sentence such as Ridgel’s serves to exemplify that unwavering commitment.”
This case was investigated by the East St. Louis Police Department and the Bureau of Alcohol, Tobacco, Firearms, and Explosives. Assistant United States Attorney Monica A. Stump prosecuted the offense.
Doctor Convicted of Running Pill Mill and Contributing to A DeathRead the Press Release
PHILADELPHIA – A federal jury, today, found Dr. Norman Werther, 74, of Ft. Washington, PA, guilty of more than 300 counts, including distribution of a controlled substance resulting in death. In addition to the charge of distribution resulting in death, the jury found Werther guilty of 184 counts of illegally distributing oxycodone, 116 counts of money laundering, six counts of conspiracy to distribute controlled substances, and one count of maintaining a drug-involved premises. Werther faces a mandatory 20 years and maximum sentence of life in prison. A sentencing hearing has not yet been scheduled. Werther remains free on bail until Friday, June 14, 2013.
Werther was part of a multi-million dollar drug conspiracy involving illegal prescriptions, phony patients, and multiple drug trafficking organizations. At the time, Werther was a Montgomery County physician, running a physical therapy and rehabilitation practice in Willow Grove. He conspired with six separate groups of drug dealers.
“Dr. Werther turned his back on his professional code of ethics, becoming nothing more than a common drug pusher,” said First Assistant U.S. Attorney Louis Lappen. “He is the antithesis of a physician. The sentence mandated for his crimes should ensure that he will never again be free to harm another human being.”
“Drug diversion is a growing epidemic in our society made worse by the professional people who turn their backs on their ethics to line their pockets at great risk to others,” said DEA Special Agent-in-Charge David G. Dongilli. “We will continue our diligent efforts to crackdown on this growing problem.”
“The diversion of dangerous prescription drugs is a public health epidemic and a serious problem,” said Special Agent-in-Charge Nick DiGiulio with Health and Human Services Office of Inspector General in Philadelphia. “We work with our partners to dismantle these lethal drug trafficking organizations and to bring physicians like Dr. Werther to justice.”
Werther worked with drug traffickers who recruited large numbers of pseudo-patients. Werther set aside a specific block of time each business day to see the pseudo-patients recruited by Ronald Campbell, Anthony DiPasquale, Angel DuPrey, Kyle Jones, and William Stukes. With the help of Werther’s office staff, those “patients” were transported to Werther’s medical office, at 301 Davisville Road in Willow Grove, PA, for cursory examinations. The “patients” paid an office visit fee, usually $150, by cash, check, or money order, and Werther wrote prescriptions for them to obtain oxycodone-based drugs without there being a legitimate medical purpose for the prescription and outside the usual course of professional practice. The “patients” were then driven to various pharmacies, including Northeast Pharmacy, to have their prescriptions filled. The drugs were then turned over to the drug dealers so their organizations could sell the narcotics to numerous drug dealers who resold the drugs on the street.
In September 2010, Werther knowingly dispensed approximately 150 pills containing 30 milligrams each of oxycodone, and 30 pills containing 15 milligrams each of oxycodone, to Nathaniel Backes for no legitimate medical purpose and Nathaniel Backes’ death resulted from the use of that substance.
The drug conspiracy involving Dr. Werther operated between February 2009 and August 2011 and resulted in the illegal distribution of more than 700,000 pills containing oxycodone. At least one of the drug trafficking organizations working with Werther trafficked pills valued at more than $5 million that Werther illegally prescribed.
The crimes of conspiracy, distribution of controlled substance, possession with intent to distribute, and money laundering each carry a maximum possible sentence of 20 years in prison.This case was investigated by the Drug Enforcement Administration, the U.S. Department of Health and Human Services Office of Inspector General, the Federal Bureau of Investigation, and the Internal Revenue Service Criminal Investigations with assistance from the Bureau of Alcohol, Tobacco, Firearms, and Explosives, the Philadelphia Police Department, the North Coventry Police Department, the Upper Moreland Police Department, and the Montgomery Township Police. It is being prosecuted by Assistant United States Attorneys Nancy Beam Winter and Jason Bologna.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525District Man Sentenced to More Than Nine Years in Prison for 2012 Bank Robbery in Northeast Washington-Defendant Arrested Shortly After the Crime-Read the Press Release
WASHINGTON – John Morris, 64, of Washington, D.C., was sentenced today to a prison term of nine years and seven months on a charge of bank robbery while armed, announced U.S. Attorney Ronald C. Machen Jr., Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office, and Cathy L. Lanier, Chief of the Metropolitan Police Department (MPD).
Morris entered a plea of nolo contendere in April 2013 in the U.S. District Court for the District of Columbia. Under a nolo contendere plea, a defendant is convicted of the offense, accepts responsibility, and agrees that the government could prove him guilty beyond a reasonable doubt. However, the defendant in such a plea does not admit to the facts of the case. The Honorable Richard W. Roberts sentenced Morris today. Upon completion of his prison term, Morris will be placed on five years of supervised release.
According to the government’s evidence, just before noon on March 22, 2012, Morris walked into a TD Bank in the 1200 block of First Street NE. He was wearing a black jacket, black pants, black shoes, sunglasses and a cap. He demanded money from two bank tellers, claiming that he had a bomb. The tellers turned over about $3,700. Morris left a bag behind, which he claimed had the bomb, and warned that he could remotely control its detonation.
Two officers with the Metropolitan Police Department were in the area at the time of the robbery, and they quickly spotted Morris across the street from the bank. A third MPD officer arrived on the scene, and Morris told him, “Yeah, I did it. It’s rough out here.” Morris, who at the time of his arrest was wearing a black jacket, black pants, black shoes, sunglasses and a cap, also could be seen clearly on video surveillance photographs of the robbery.
The stolen money was recovered after the robbery. Morris’s bomb threat led to an emergency response that included the evacuation of the bank and the block surrounding the bank. The bag left inside the bank contained an alarm clock.
In announcing the sentence, U.S. Attorney Machen, Assistant Director in Charge Parlave and Chief Lanier thanked those who investigated the case from the MPD and FBI’s Washington Field Office, including the FBI/MPD Violent Crimes Task Force. They also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Stephanie Brooker, former Chief of the Asset Forfeiture and Money Laundering Section, and Paralegal Specialist Jeannette Litz. Finally, they expressed appreciation to Assistant U.S. Attorney Catherine K. Connelly, who prosecuted the matter.
13-202Defendants Face Possible Life in Prison for Drug Conspiracy and Firearms PossessionRead the Press Release
TULSA, Okla. — United States Attorney Danny C. Williams Sr. announced the return of a superseding indictment against four men by a Federal Grand Jury on June 10, 2013. The charges include drug conspiracy, distribution of methamphetamine, and firearms possession.
Harold Edward Staples, III, 59, his son, Christopher Dean Staples, 29, Buel Dean Hamilton, 61, all of Tulsa, and T.J. Cain, 41, of Stillwell are charged with conspiring to distribute more than 50 grams of pure methamphetamine. Harold Staples is also accused of firearms violations including illegal possession of machine guns, possession of unregistered silencers and a sawed-off rifle, and possession of firearms in furtherance of a drug trafficking crime.
The defendants would face a mandatory minimum ten years imprisonment up to a maximum of life imprisonment if convicted. Harold Staples would face additional charges with a minimum of 25 years imprisonment up to a maximum of life imprisonment. Defendants would face the entry of a criminal forfeiture money judgment representing proceeds obtained as a result of the conspiracy and the forfeiture of four parcels of real property and over one hundred firearms, including machine guns, silencers and assault rifles.
After the superseding indictment was returned, the U.S. Government was made aware that Harold Staples died on the same day. The U.S. Government will continue its prosecution against the remaining defendants.
A Grand Jury Indictment is one method of charging a defendant with alleged violations of Federal Law, which must be proven in a court of law beyond a reasonable doubt to overcome a defendants’ presumption of innocence.
Criminal Indicted for Illegal Re-entry After DeportationRead the Press Release
MINNEAPOLIS—Earlier today in federal court, a 42-year-old Mexican national was indicted for entering the United States illegally after previously being deported as a criminal. Leopoldo Rivera-Leal was specifically charged with one count of illegal re-entry after deportation.
The indictment alleges that on May 7, 2013, Rivera-Leal was found in the U.S. after being deported to Mexico in 2005, following a 1991 Texas conviction for first-degree burglary. On May 7, 2013, Rivera-Leal was turned over to U.S. Immigration and Customs Enforcement (“ICE”) by Steele County officials after he had finished serving a state sentence for drug possession.
If convicted of the federal charges now levied against him, Rivera-Leal will face a potential maximum penalty of 20 years in federal prison, followed by deportation. Any sentence would be determined by a federal district court judge.
This case is the result of an investigation by ICE’s Enforcement and Removal Operations. It is being prosecuted by Assistant U.S. Attorney Andrew Dunne.An indictment is a determination by a grand jury that there is probable cause to believe that offenses have been committed by a defendant. A defendant, of course, is presumed innocent until he or she pleads guilty or is proven guilty at trial.
Corwin Dallas Four Star Pleads Guilty in U.S. Federal CourtRead the Press Release
The United States Attorney's Office announced that during a federal court session in
Great Falls, on June 10, 2013, before U.S. Magistrate Judge Keith Strong, CORWIN DALLAS FOUR STAR, a 19-year-old resident of Wolf Point and an enrolled member of a federally-recognized tribe, pled guilty to sexual abuse. Sentencing has been set for September 26, 2013. He is currently detained.
In an Offer of Proof filed by Assistant U.S. Attorney Laura B. Weiss, the government stated it would have proved at trial the following:
In the early morning hours of March 4, 2012, FOUR STAR got on top of the victim as she was sleeping and choked her to the point that she lost consciousness. He then sexually abused her. When the victim regained consciousness, she started screaming and trying to push him off. FOUR STAR held her arms down and punched her in the face.
The offense occurred within the exterior boundaries of the Fort Peck Indian Reservation.
FOUR STAR faces possible penalties of life in prison, a $250,000 fine and lifetime supervision..
The investigation was a cooperative effort between the Federal Bureau of Investigation and the Fort Peck Tribes Criminal Investigation Division.
Commercial Marijuana Stores in Long Beach, Antelope Valley and Portions of Los Angeles Targeted with Warning Letters and Asset Forfeiture Lawsuits Filed by U.S. Department of JusticeRead the Press Release
LOS ANGELES – The latest federal enforcement actions against the commercial marijuana industry in California came today as federal authorities moved against 103 illegal marijuana stores across Los Angeles County.
Out of the 103 storefronts targeted today, federal authorities sent warning letters to 28 stores in Long Beach, 71 in Los Angeles, and four in the Antelope Valley. Two of the stores in Long Beach are housed in buildings that are the subject of asset forfeiture lawsuits that were filed today in United States District Court.
Today’s federal actions involve all known marijuana stores in the City of Long Beach; the City of Lancaster; the high desert community of Pearblossom; and the parts of Los Angeles served by the Newton, Rampart and Harbor divisions of the Los Angeles Police Department.
In federal court this afternoon, prosecutors filed two asset forfeiture lawsuits against properties in Long Beach where marijuana stores are currently operating. The two civil asset forfeiture complaints state: “Under federal law, the distribution of marijuana (a Schedule I controlled substance under Title 21) is prohibited except under very limited circumstances not applicable here. The government further alleges on information and belief that the operation of a marijuana store on the defendant property was not (and is not) permitted under California law.”
The forfeiture lawsuits allege that the owners of the properties knowingly allowed commercial marijuana stores – and, in one case, a commercial grow – to operate. The buildings in Long Beach named in the asset forfeiture lawsuits currently house:
The Healing Tree Holistic Association (in a store which, in 2011, operated under the name Royalty Collective) and a related indoor marijuana cultivation facility in a strip mall at 3721 East Anaheim Street, which have been the subject of at least five state search warrants over the past two years; and
Naples Wellness Center at 5750 East 2ND Street, which has received at least 15 administrative citations from the City of Long Beach over the past 15 months, and in April was the subject of two state search warrants executed by the Long Beach Police Department.
In February 2012, Long Beach enacted an ordinance banning marijuana stores in the city.
In conjunction with the filing of the asset forfeiture complaints, the United States Attorney’s Office today mailed out letters to the property owners and operators of 26 additional marijuana stores that are either currently operating or were recently closed in Long Beach. The warning letters give the operators and landlords 14 days to come into compliance with federal law or risk potential civil or criminal actions.
“Marijuana dispensaries have posed significant challenges to the City of Long Beach. We always welcome the opportunity to partner with federal authorities in an effort to address these illegal operations that affect the quality of life in our community,” said Long Beach Police Chief Jim McDonnell.
In addition to the marijuana stores in Long Beach, federal prosecutors sent warning letters to three pot shops in Pearblossom, one in Lancaster and 71 in Los Angeles. The areas in Los Angeles that were targeted are served by three LAPD divisions: Newton, which serves portions of South Los Angeles and downtown; Rampart, which serves areas west and northwest of downtown; and Harbor, which serves San Pedro, Wilmington and Harbor Gateway.
Today’s enforcement actions in Los Angeles County follow similar actions across the seven-county Central District of California. Starting in October 2011, prosecutors began filing asset forfeiture lawsuits and sending letters to marijuana operations in selected areas in the Central District of California (see, for example: http://www.justice.gov/usao/cac/Pressroom/2013/053.html).
With the lawsuits filed this morning, the United States Attorney’s Office has filed a total of 32 asset forfeiture complaints against properties housing illegal marijuana operations in the district. Twenty-three of those actions have been resolved with the closure of the marijuana stores and consent decrees. In some cases, consent decrees required property owners to disgorge rent payments made by a marijuana store operator, and in all cases the consent decrees required the property owners to agree, among other things, that they would no longer rent to people associated with illegal marijuana operations or the property would be subject to an immediate forfeiture to the government.
Including today’s efforts in Long Beach, Los Angeles and the Antelope Valley, federal enforcement actions – asset forfeiture lawsuits, warning letters and related activity – have now targeted more than 625 illegal marijuana businesses in the Central District of California. The majority of those businesses previously targeted are now closed, are the subject of eviction proceedings by landlords, or have been the subject of additional federal enforcement actions.
In October 2011, the four United States Attorneys in California announced the coordinated enforcement actions targeting illegal marijuana cultivation and trafficking (see: http://www.justice.gov/usao/cac/Pressroom/2011/144a.html).
As part of this project, the United States Attorney’s Office is working with the Drug Enforcement Administration and IRS - Criminal Investigation. Today’s enforcement actions involved the cooperation of the Los Angeles District Attorney’s Office.
Release No. 13-080
Colorado U.S. Attorney's Office Participated in Settlement Where Walgreens Agrees to Pay A Record $80 Million for Civil Penalties Under the Controlled Substances ActRead the Press Release
DENVER -- Walgreens Corporation (Walgreens), the nation’s largest drug store chain, has agreed to pay $80 million in civil penalties for violations of the Controlled Substances Act, resolving an investigation in which the United States Attorney’s Office for the District of Colorado and the DEA’s Denver Field Division participated. The agreement was announced by the United States Attorney’s Office for the Southern District of Florida. The United States Attorney’s Offices in the Eastern District of Michigan and the Eastern District of New York participated as well. The details of the nationwide resolution, announced by the Southern District of Florida U.S. Attorney’s Office, are below.
The Colorado U.S. Attorney’s Office along with DEA’s Denver Field Division identified over 1,600 violations of the Controlled Substances Act at Walgreens stores located in Colorado. The majority of these violations were found at Walgreens stores located in Canon City and Pueblo. The investigation uncovered instances of Walgreens stores filling fraudulent prescriptions; filling prescriptions written by a physician with an expired DEA registration; filling prescriptions lacking an address and/or DEA registration number, in violation of DEA regulations; and dispensing controlled substances to customers without a prescription. The investigation also uncovered hundreds of examples of inaccurate or incomplete recordkeeping for controlled substances at Walgreens stores located throughout Colorado. Such inaccurate or incomplete recordkeeping violates the Controlled Substances Act.“Stores that sell controlled substances must keep careful track of their inventory,” said U.S. Attorney John Walsh. “Those that don’t, like Walgreens in this case, face severe penalties, like the record $80 million penalty announced today.”
Accurate and efficient record-keeping and administrative procedures are critical for the safe dispensing and use of pharmaceutical drugs. As this case shows, DEA will ensure that DEA registrants adhere to the law to protect public health and safety, or face the consequences for failing to do so,” said Barbra Roach, Special Agent in Charge of the DEA’s Denver Division.
PRESS RELEASE FROM THE SOUTHERN DISTRICT OF FLORIDA
For more information contact Alicia Valle at 305-961-9001Walgreens Agrees to Pay a Record Settlement of $80 Million for Civil Penalties Under the Controlled Substances Act
Largest Fine Paid by a DEA Registrant
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Mark R. Trouville, Special Agent in Charge, Drug Enforcement Administration (DEA), Miami Field Division, announced that Walgreens Corporation (Walgreens), the nation’s largest drug store chain, has agreed to pay $80 million in civil penalties, resolving the DEA’s administrative actions and the United States Attorney’s Office’s civil penalty investigation regarding the Walgreens Jupiter Distribution Center and six Walgreens retail pharmacies (collectively “Registrants”) in Florida. The settlement further resolves open civil investigations in the District of Colorado, Eastern District of Michigan, and Eastern District of New York, as well as civil investigations by DEA field offices nationwide, pursuant to the Controlled Substances Act (the Act).
The settlement, the largest in DEA history, resolves allegations that the Registrants committed an unprecedented number of record-keeping and dispensing violations under the Act. According to documents filed in the underlying administrative actions, the Registrants negligently allowed controlled substances listed in Schedules II – V of the Act, such as oxycodone and other prescription pain killers, to be diverted for abuse and illegal black market sales.
According to the most recent report from the U.S. Center for Disease Control and Prevention, prescription drug overdose deaths exceeded motor vehicle deaths and deaths from illegal street drugs, such as cocaine, heroin, and amphetamines in 2009. Oxycodone is a powerful addictive narcotic that is one of the most abused prescription medications in Florida and throughout the United States. Walgreens’ Distribution Center in Jupiter, Florida was the largest supplier of oxycodone to retail pharmacies in the State of Florida.
U.S. Attorney Wifredo A. Ferrer stated, “Prescription drug abuse is a tremendous problem in Florida and throughout the country. Every day, individuals die from prescription drug overdoses. The record-keeping requirements of the Controlled Substances Act and DEA regulations are designed to prevent prescription pain killers, like oxycodone, from ending up on our streets. For this reason, we cannot allow pharmacies to circumvent their regulatory record-keeping and dispensing obligations.”
DEA Special Agent in Charge Mark R. Trouville stated, “National pharmaceutical chains are not exempt from following the law. This settlement sends out a clear message that all DEA registrants will be held accountable when they violate the law and threaten public health and safety. The DEA will continue its efforts to work with our registrants and our law enforcement partners to combat pharmaceutical drug abuse and diversion in Florida.”
The settlement agreement covers conduct that was the subject of DEA’s administrative actions and the U.S. Attorney’s Office civil penalty investigation. More specifically, the settlement covers allegations against Walgreens’ Jupiter Distribution Center and six Walgreens’ retail pharmacies. First, the Jupiter Distribution Center failed to comply with DEA regulations that required it to report to the DEA suspicious prescription drug orders that it received from Walgreens’ retail pharmacies. Walgreens’ alleged failure to sufficiently report suspicious orders was a systematic practice that resulted in at least tens of thousands of violations and allowed Walgreens’ retail pharmacies to order and receive at least three times the Florida average for drugs such as oxycodone.
Second, the six retail pharmacies in Florida that received the suspicious drug shipments from the Jupiter Distribution Center, in turn, filled customer prescriptions that they knew or should have known were not for legitimate medical use. In addition, these retail pharmacies and others elsewhere in the United States failed to properly identify and mark, as required by DEA regulations, hardcopy controlled substance prescriptions that were outsourced to a “central fill” pharmacy for filling. Without Walgreens’ retail pharmacies identifying these outsourced prescriptions, DEA could not accurately determine which prescriptions were filled from the retail pharmacies’ own drug supplies and which prescriptions were filled by a “central fill.” Consequently, DEA could not determine the accuracy of the retail pharmacies’ drug records. The DEA’s administrative actions demonstrated millions of violations of this type.
In addition to the $80 million civil penalty for the above violations, the settlement revokes the Registrants’ ability to distribute or dispense controlled substances listed in Schedules II – V for two years, ending in 2014. As part of the settlement, Walgreens admitted that it failed to uphold its obligations as a DEA registrant regarding the above-described conduct. Furthermore, Walgreens has agreed to create a Department of Pharmaceutical Integrity to ensure regulatory compliance and prevent the diversion of controlled substances. Walgreens has also agreed to enhance its training and compliance programs, and to no longer monetarily or otherwise compensate its pharmacists based on the volume of prescriptions filled.
Since 2009, the DEA, along with its federal, state, and local counterparts, have partnered to combat the prescription drug abuse epidemic that has plagued Florida, culminating in Operation Pill Nation I and II and Operation Oxy Alley. These investigations have resulted in charges against more than 172 individuals, including 51 doctors and 24 clinic/pharmacy owners, the seizure of approximately 2.5 million dosage units of controlled substances, approximately $16.6 million, real property, and exotic cars. In addition, approximately 42 doctors and 11 pharmacies have lost their DEA registrations through the issuance of Immediate Suspension Orders. As well, approximately 192 doctors and 68 pharmacies have voluntarily surrendered their DEA registrations following an official visit from the DEA. Lastly, DEA has also taken action against seven other Florida-based distributors.
This investigation was conducted by the DEA’s Miami Field Office and the U.S. Attorney’s Office for the Southern District of Florida, with the assistance of DEA’s Office of Chief Counsel.
Mr. Ferrer thanked U.S. Attorney for the District of Colorado, John Walsh, U.S. Attorney for the Eastern District of Michigan, Barbara L. McQuade, and U.S. Attorney for the Eastern District of New York, Loretta E. Lynch, for their cooperation in this case. Mr. Ferrer also commended the investigative work of the DEA’s Miami Field Office, as well as its DEA counterparts throughout the country for their work and assistance in this matter.
The civil penalty case was investigated and negotiated by Assistant U.S. Attorney Franklin Monsour of the U.S. Attorney’s Office for the Southern District of Florida. The administrative case was principally negotiated by Lee Reeves, Associate Chief Counsel for DEA’s Diversion and Regulatory Litigation Section, and also by Scott Lawson, who acted as lead trial counsel for the DEA in the administrative actions.
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 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 www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
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Cleveland Man Sentenced to 12 Years in Prison for Leading Ring That Obtained Blank Prescriptions, Forged Them and Sold the PainkillersRead the Press Release
A Cleveland man was sentenced to 12 years in prison for leading a ring that obtained blank prescription pads that were used to fraudulently obtain thousands of prescription painkiller pills, law enforcement officials announced today.
Louis Eppinger, 53, led a conspiracy that forged prescriptions for Oxycontin and Percocet pills, hired people to have them filled at pharmacies throughout the region, then sold the pills on the street, according to court documents. He previously pleaded guilty to conspiracy to possess with intent to distribute Oxycodone, health care fraud and aggravated identity theft.
“We have seen a huge increase in prescription drug abuse in Ohio, and this case demonstrates the lengths people will go to defraud and profit from pills,” said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio. “Instead of dealers shipping in drugs from South America, we now have people forging prescriptions.”
“The abuse of illicitly obtained prescription drugs is reaching epidemic proportions, surpassing that of marijuana, cocaine and heroin combined,” said Stephen Anthony, Special Agent in Charge of the Federal Bureau of Investigation’s Cleveland office. “Dismantling illicit drug diversion networks such as the organization charged in this investigation will remain a top FBI priority.”
Besides Eppinger, six other people have pleaded guilty to related crimes. They are: Patricia Arnold, age 61, of Cleveland; Anthony H. Perry, age 42, of East Cleveland; Elizabeth A. Davis, age 40, of East Cleveland; James Byrge, age 62, of Cleveland; Judy Burrows, age 25, of Cleveland, and Brittany N. Glass, age 22, of Cleveland.
Between 2011 and 2012, Eppinger, Arnold, Glass, Perry, Davis, Burrows and Byrge engaged in a conspiracy to possess with intent to distribute oxycodone, according to court documents.
Eppinger obtained blank prescription paper from an unknown source and DEA numbers of various physicians located in Northern Ohio for the purposes of passing fraudulent prescriptions for Oxycontin and/or Percocet, both of which contain oxycodone, according to court documents.
Eppinger provided the blank prescription paper to Arnold, who forged the prescriptions. Eppinger then provided the fraudulent prescriptions to Glass, Perry and Davis, who served as “walkers” and attempted to pass the prescriptions at pharmacies in Northeast Ohio, including several in Cleveland as well as locations in Shaker Heights, Willoughby and Garfield Heights, according to court documents.
Glass, Perry and Davis then gave the pills to Eppinger, who paid them for passing the fraudulent prescriptions. Eppinger then sold the pills or provided them on consignment to Burrows, Burge and others, according to court documents.
Eppinger pleaded guilty to health care fraud for defrauding the Ohio Medicaid program by billing more $21,098 for prescription painkillers to which he was not entitled, according to the indictment. He was ordered to repay that amount in restitution.
Eppinger also used the identities of two people in relation to a felony, resulting the in the aggravated identity theft convictions.
The case is being handled by Assistant United States Attorneys Michael L. Collyer and Michelle M. Baeppler following investigation by the FBI’s Cleveland office, with assistance from the Cleveland Police Department, West Shore Enforcement Bureau, Ohio High Intensity Drug Trafficking Area and Ohio Attorney General’s Office.
Chinese Citizen Sentenced to 12 Years in Prison for Cyber-Theft and Piracy of over $100 Million in Sensitive Software and Proprietary DataRead the Press Release
WILMINGTON, Del. – Xiang Li, age 36, of Chengdu, China, was sentenced to 12 years in prison today for conspiracy to commit wire fraud and criminal copyright infringement based on cyber-theft and online piracy of over $100 million worth of sensitive, industrial-grade software and confidential data stolen from the internal server of a cleared defense contractor. Li will be deported to China pending his release from prison.
According to statements made at the sentencing hearing and documents filed in court, in December 2009, the U.S. Department of Homeland Security, Homeland Security Investigations, identified a website located at www.crack99.com that was advertising thousands of software titles at a fraction of their retail value. The investigation revealed that Xiang Li operated this website and a series of other websites that sold pirated, industrial-grade software in which the access and copy controls had been “cracked,” or circumvented.
Between April 2008 and June 2011, Xiang Li engaged in over 700 transactions through which he distributed over $100 million pirated software to over 400 customers located in at least 28 states and over 60 foreign countries. These software products were owned by approximately 200 different American software manufacturers, ranging from large corporations to small businesses. Xiang Li also sold 20 gigabytes of confidential and proprietary data obtained from the internal computer network of at least one “cleared defense contractor.”
The tightly controlled and very valuable software products that Xiang Li sold and distributed online are industrial-grade, digital tools used to design myriad products essential to the daily life, health and safety of the public, and to U.S. national security. For example, the software is used in a wide range of applications including aerospace simulation and design, defense, electronics, energy, engineering, explosive simulation, intelligence gathering, manufacturing, mining, space exploration, mathematics, storm water management, explosive simulation, and manufacturing plant design.
Xiang Li’s customers included those in embargoed countries in the Middle East, employees of foreign governments, and federal government employees and contractors holding security clearances in the United States. More than one-third of the unlawful purchases were made by individuals within the United States, including small business owners, government contractors, students, inventors, and engineers. For instance, Xiang Li sold twelve cracked software programs worth over $1.2 million to Cosburn Wedderburn, who was then a NASA electronics engineer working at NASA’s Goddard Space Flight Center, in Greenbelt, Maryland. Wedderburn uploaded this cracked software to a NASA computer network and used it to perform on a side contract he negotiated to design a thermal simulation project for China-based Huawei Technologies, Inc.
Xiang Li also sold ten cracked software programs worth over $600,000 to Dr. Wronald Best, the “Chief Scientist” of a Kentucky-based government contractor that services the U.S. and foreign militaries and law enforcement with a variety of applications such as radio transmissions, radar usage, microwave technology, and vacuum tubes used in military helicopters. Dr. Best used the cracked software to design components for Patriot missiles and the radar systems of the “Marine One” Presidential helicopter and the Army’s Black Hawk helicopter.
Between January 2010 and June 2011, undercover agents made a series of purchases of pirated software worth hundreds of thousands of dollars from Xiang Li’s CRACK99 website. The investigation culminated in a face-to-face meeting between Xiang Li and undercover agents on the Island of Saipan, in June 2011. Xiang Li agreed to travel from China to Saipan to deliver pirated software, design packaging, and 20 gigabytes of proprietary data from a U.S. software company (a cleared defense contractor) to undercover agents posing as would-be co-conspirators willing to assist Li with distribution of counterfeit software in the United States. The undercover agents arrested Xiang Li on June 7, 2011, after he delivered the stolen intellectual property to them at a Saipan hotel. Xiang Li was transported to the District of Delaware, where he has remained in custody since June 2011.
The investigation revealed that Xiang Li was part of a larger cybercrime organization based in China. Through emails sent to various customers, Xiang Li described himself as being part of “an international organization created to crack” software. When another customer asked Li who cracked the software, Li replied: “Experts crack, Chinese people Sorry can not reveal more.”
The investigation revealed that Chinese and Russian software “crackers” loosely organize into “Fan Groups” and crack software by disabling the access/dissemination controls. The “Fan Groups” then make the hacked software available on web forums or other online portals. “Middle men,” such as Xiang Li, obtain the cracked software from forums, websites, and file transfer protocol sites. These “middle men” operate websites that advertise the sale of cracked software products and distribute that software through the Internet. The “middle men” specialize in, and guide customers through, the complex technical installation process. Without “middle men” like Xiang Li, complex, industrial-grade software that has been cracked is often inoperable and non-transferable.This case is being investigated by the United States Department of Homeland Security, Homeland Security Investigations, and the Defense Criminal Investigative Service. This case is being prosecuted by Assistant United States Attorneys David L. Hall and Edward J. McAndrew.
Burgaw Man Sentenced for Receipt of Child PornographyRead the Press Release
WILMINGTON - United States Attorney Thomas G. Walker announced that in federal court today, PAUL JOSEPH SCHMURA, JR., 49, of Burgaw, North Carolina, was sentenced by Senior United States District Court Judge James C. Fox to 121 months imprisonment followed by a lifetime of supervised release.
On February 19, 2013, SCHMURA pled guilty to one count of receipt of child pornography in violation of Title 18, United States Code, Section 2252(a)(2).
In February 2012, an undercover agent with the North Carolina State Bureau of Investigation initiated an online investigation related to the distribution of child pornography. The undercover agent identified a computer sharing known Child Pornography and captured the Internet Protocol (IP) address of the host computer. The IP address allowed law enforcement to identify a specific computer which led to the identification of SCHMURA. A search of SCHMURA’S residence on February 27, 2012 led to the seizure of several computers, external hard drives, and media storage devices containing at least 14,678 images of child pornography.
This case is part of the Project Safe Childhood initiative, a national program aimed at ensuring that criminals exploiting children are effectively prosecuted by making full use of all available law enforcement resources at every level. For more information about this important national initiative, go to www.projectsafechildhood.gov.
Investigation of this case was conducted by the Federal Bureau of Investigation and the North Carolina State Bureau of Investigation. Assistant United States Attorney Ethan A. Ontjes prosecuted this case for the United States.
Bridgeport Resident Arrested Pursuant to Federal IndictmentRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-7725 ● Contact: Chris Zumpetta-Parr, Public Affairs SpecialistFollow us on Twitter @NDWVnews
WHEELING, WEST VIRGINIA — A 33 year old Bridgeport, Ohio, resident was arrested today pursuant to an Indictment returned by a Federal Grand Jury.
According to United States Attorney William J. Ihlenfeld, II, MICHAEL RUNYON was named in a one-count Indictment charging him with “Failure to Update Sex Offender Registration.” The Indictment alleges that from January of 2013 to May of 2013, RUNYON knowingly failed to update a registration pursuant to the Sex Offender Notification Act. If convicted, RUNYON faces up to 10 years imprisonment and a $250,000 fine. This case will be prosecuted by Assistant United States Attorney David J. Perri and was investigated by the United States Marshals Service.
All of the charges contained in the above-referenced indictments are merely accusations and not evidence of guilt, and each defendant is presumed innocent until and unless proven guilty.
Billie Joe Bullshields Sentenced in U.S. District CourtRead the Press Release
The United States Attorney's Office announced that during a federal court session in Great Falls, on June 11, 2013, before Chief U.S. District Judge Dana L. Christensen, BILLIE JOE BULLSHIELDS, a 29-year-old resident of Browning, was sentenced to a term of:
Prison: 48 months
Special Assessment: $100
Supervised Release: 4 years
BULLSHIELDS was sentenced in connection with his guilty plea to distribution of methamphetamine.
In an Offer of Proof filed by Assistant U.S. Attorney Jessica A. Betley, the government stated it would have proved at trial the following:
Beginning in November 2010, Louis Romero, Henry Lopez, and X.X., facilitated the distribution of methamphetamine to Browning, which is within the exterior boundaries of the Blackfeet Indian Reservation. Z.Z. and a confidential informant (CI) assisted Romero, Lopez, and X.X., by transporting the methamphetamine to Browning. The CI made his first trip to Browning in approximately January 2011, and continued to make trips to Browning for several months to sell methamphetamine.
Z.Z. and his mother normally picked the CI up at the train station. Z.Z.'s mother assisted the CI in setting up his narcotics shop in her house. On the CI's first trip to Browning, the CI, Z.Z., and Z.Z.'s mother sold approximately a half pound of methamphetamine from Z.Z.'s mother's house. On another trip, a quarter pound of methamphetamine was sold.
Due to the success of selling methamphetamine in Browning, Z.Z. and the CI were also recruited to sell methamphetamine to numerous people in Great Falls. The CI rewarded Z.Z.'s mother's help in selling methamphetamine by buying her a new Ford Explorer, as well as providing her with groceries and living expenses. During this time, BULLSHIELDS also became involved in purchasing methamphetamine from the CI. BULLSHIELDS resold the methamphetamine she purchased from the CI for profit.
The CI met Deanna Wells during the CI's third trip to Browning. Wells accompanied the CI to Great Falls to sell more methamphetamine. They received a large amount of cash during this trip. The CI and Wells regularly deposited cash received from drug deals for cashier's checks, and mailed the checks back to Romero, Lopez, and X.X.
During April 2011, the CI, Z.Z., BULLSHIELDS, and Wells purchased and distributed approximately one pound of methamphetamine throughout Browning and Great Falls. At one point, the CI and Wells drove to Great Falls and rented a motel room where they sold methamphetamine. Shortly thereafter, at the beginning of May, the CI possessed almost two pounds of methamphetamine which the CI began to sell out of Z.Z.'s mother's house. Z.Z. purchased some of this methamphetamine. Z.Z. and BULLSHIELDS regularly purchased the methamphetamine in larger quantities to break down into smaller quantities to re-sell around town. The CI, Wells, BULLSHIELDS, and Z.Z. finished business in Browning and headed to Great Falls with the remaining methamphetamine. BULLSHIELDS took a backpack of methamphetamine into a motel, while the CI and Z.Z. remained outside.
Z.Z. and the CI were ultimately arrested in the parking lot of the motel. Police stopped and found Z.Z. attempting to hide methamphetamine under a nearby car. Police then seized over 50 grams of pure (actual) methamphetamine. After Z.Z. and the CI were arrested, Wells and BULLSHIELDS returned to the hotel room where they retrieved the additional hidden methamphetamine.
From November 2010 until May 2011, BULLSHIELDS distributed 50 or more grams of a substance containing a detectable amount of methamphetamine.
Because there is no parole in the federal system, the "truth in sentencing" guidelines mandate that BULLSHIELDS will likely serve all of the time imposed by the court. In the federal system, BULLSHIELDS does have the opportunity to earn a sentence reduction for "good behavior." However, this reduction will not exceed 15% of the overall sentence.
The investigation was conducted by the Montana Regional Violent Crimes Task Force.
Big Spring, Texas, Man Pleads Guilty in Federal Court to Federal Child Pornography OffenseRead the Press Release
ABILENE, Texas — Aaron Charles Lustfeldt, 27, of Big Spring, Texas, appeared today in federal court, before U.S. Magistrate Judge E. Scott Frost, and pleaded guilty to one count of receipt of child pornography. He faces a maximum statutory penalty of not less than five years or more than 20 years in federal prison, a $250,000 fine and a lifetime of supervised release. A sentencing date was not set. Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
According to documents filed in the case, on February 1, 2013, the Big Spring Police Department was dispatched to Comanche Trail Park in Big Spring regarding a male exposing himself to children in the play area. Officers located Lustfeldt, who admitted being in the park, but denied doing anything inappropriate, stating that he was not supposed to be at the park because he was a registered sex offender. Later, as part of their investigation, officers located images of child pornography on his cell phone, and Lustfeldt eventually admitted that he had received and downloaded images from the Internet onto his cell phone.
The case was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”
The case is being investigated by U.S. Immigrations and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and the Big Spring Police Department. Assistant U.S. Attorney Justin Cunningham, of the U.S. Attorney’s Office in Lubbock, Texas, is in charge of the prosecution.
Batavia Man Pleads Guilty to Child Pornography ChargeRead the Press Release
BUFFALO, N.Y. - U.S. Attorney William J. Hochul, Jr. announced today that Jeffrey Wawrzyniak, 40, of Batavia, N.Y., pleaded guilty before U.S. Magistrate Judge Leslie G. Foschio to possession of child pornography. The charge carries a maximum penalty of 15 years in prison, a fine of $250,000 or both.
Assistant U.S. Attorney Russell T. Ippolito, Jr., who is handling the case, stated that during the execution of a search warrant at the defendant’s home in Batavia, law enforcement officers recovered more than 750 graphic files of child pornography and four and four video files. The search warrant was obtained after law enforcement officers, using an undercover computer with peer to peer software, downloaded several image files of child pornography from Wawrzyniak’s computer.
The case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The plea is the culmination of an investigation on the part of Special Agents of Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent-In-Charge James C. Spero.
A sentencing date has not been scheduled.August Trial Date Set for Two Charged with Robbing Three Smoke Shops in MayRead the Press Release
SALT LAKE CITY – A four-day jury trial has been scheduled for August for two individuals charged in connection with three smoke shop robberies in West Valley City and Midvale in May.
Dean Salvidor Sainsbury, age 25, of Taylorsville and Kenedi Francis Sarafolean, age 22, of Murray, were indicted by a federal grand jury on three counts of robbery, including a May 10, 2013, robbery of the One Stop Smoke Shop located at 4645 South 4000 West in West Valley City; a May 11, 2013, robbery of Smokey’s Discount Cigarettes located at 3500 South 3630 West in West Valley City; and a May 13, 2013, robbery of Smokeland, located at 7948 South State Street in Midvale.
The indictment, returned by a grand jury in May, also alleges that a firearm was brandished during each of the robberies. Sainsbury and Sarafolean, who have previous felony convictions, also are charged with illegally possessing a firearm.
The case is being investigated by the FBI-sponsored Valley Police Alliance Safe Streets Task Force.
Indictments are not findings of guilt. Individuals charged in indictments are presumed innocent unless or until proven guilty in court. Sainsbury and Sarafolean are in federal custody and have entered not guilty pleas to the charges. The trial begins Aug. 12, 2013, in U.S. District Judge Dale A. Kimball’s courtroom.
The potential maximum penalty for each of the three robbery counts (violations of the federal Hobbs Act) is up to 20 years in prison. Possessing a firearm following a felony conviction carries a potential penalty of 10 years. The first count of brandishing a firearm during a crime of violence carries a minimum-mandatory sentence of seven years. Each subsequent conviction is an additional 25 years. The minimum-mandatory sentences run consecutive (stack) and are imposed in addition to any sentences imposed for other counts of conviction.
Arrests Bust Prescription Narcotics Drug Dealers Based in ConwayRead the Press Release
Little Rock - Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas and William J. Bryant, Assistant Special Agent in Charge of the Little Rock District Office of the Drug Enforcement Administration (DEA), announced the arrests today of eight individuals on a federal indictment charging with conspiracy to distribute and possession with intent to distribute unregulated prescription pills and controlled substances.
The Indictment alleges that seven individuals, Brian Fletcher, age 28; Jeremy Burton, age 28; Heather Gooden Story, age 27; Stephanie Hagie, age 28; Michael Young, age 27; all of Conway; Jason Hobby, age 31 of North Little Rock; and Frankie Drennan, age 49, of Little Rock conspired to distribute prescription narcotics and each, on various dates, possessed with the intent to distribute varying quantities of different prescription narcotics. Also arrested today on a federal Complaint was Burnett Smith, age 45, of Conway, Arkansas.
The arrests are the result of an investigation that began in 2011 with the DEA, in cooperation with Conway Police Department Narcotics unit, identifying Jeremy Burton and other co-conspirators involved in unregulated prescription pill and controlled substances distribution in Faulkner, Pulaski, White, and Van Buren Counties in Central Arkansas. During the investigation, members of the conspiracy engaged in the unauthorized distribution of Schedule II narcotics including, Oxycodone (Roxycodone), Oxymorphone (Opana) and Hydromorphone (Dilauded). The arrests today were coordinated by agents of DEA with the Conway Police Department, Faulkner County Sheriff's Office, United States Marshal Service, 20th Judicial District Prosecuting Attorney's Office, University of Central Arkansas Police Department, and the Arkansas National Guard Counter Drug Unit.
Numerous search and seizure warrants were executed in conjunction with the arrests. The investigation has thus far resulted in the seizure of four firearms of varying calibers, assorted ammunition, undetermined amount of money, a variety of pharmaceutical narcotics, paraphernalia associated with distribution such as scales, packaging, pill cutters, and syringes.
The case was investigated by special agents from the DEA, as well as officers and personnel from the following agencies: Conway Police Department, Faulkner County Sheriff's Office, United States Marshal Service, 20th Judicial District Prosecuting Attorney's Office, University of Central Arkansas Police Department, and the Arkansas National Guard Counter Drug Unit. This case is being prosecuted by Assistant United States Attorney Anne Gardner.
An indictment contains only allegations. Each defendant is presumed innocent unless and until proven guilty. The charges set forth in a Complaint are merely allegations. A federal Grand Jury will decide whether to indict on these charges. The defendant is presumed innocent until proven guilty.
(Indictment )
(Complaint Affidavit )
Andover Business Owner Pleads Guilty to ObstructionRead the Press Release
BOSTON – An Andover man was convicted today for obstructing a grand jury investigation.
Kamlesh Patel, 48, of Andover pleaded guilty before United States District Judge George A. O’Toole, Jr. to obstruction by destruction and alteration of documents in connection with a grand jury investigation.
Patel received a grand jury subpoena for records relating to his business dealings with another company and claims that this other company was a service-disabled veteran owned and operated business. Patel was aware that he had documents on his computer that were responsive to the subpoena and that were relevant to the pending investigation. Patel nonetheless deleted documents on his computer that were responsive to the grand jury subpoena.
Sentencing is scheduled for September 12, 2013 at 2:30 p.m. Patel faces a statutory maximum penalty of 20 years in prison, followed by three years of supervised release and a fine of $250,000 or twice the gross gain or loss from the crime, whichever is greater.
United States Attorney Carmen M. Ortiz; Jeffrey G. Hughes, Special Agent in Charge of the U.S. Department of Veterans Affairs, Office of Inspector General, Northeast Field Office; Luis A. Hernandez, Special Agent in Charge of the General Services Administration, Office of Inspector General, Office of Investigations; Michael D. Conner, Resident Agent in Charge of U.S. Army Criminal Investigation Command, Boston Fraud Resident Agency; Aaron Collins, Special Agent in Charge of the U.S. Small Business Administration, Office of Inspector General; Robert Panella, Special Agent in Charge of the U.S. Department of Labor, Office of Inspector General, Labor Racketeering & Fraud Investigations, made the announcement today. The case is being prosecuted by Assistant U.S. Attorneys Sara Miron Bloom and William Bloomer of Ortiz’s Office
10 June 2013
Woman Sentenced to Almost 3 Years in Federal Prison for Selling Prescription Painkillers in HuntingtonRead the Press Release
HUNTINGTON, W.Va. – U.S. Attorney Booth Goodwin today announced that a Huntington woman was sentenced to two years and nine months in federal prison for selling powerful prescription painkiller pills to a police informant. Shena Rena Turner, 26, previously pleaded guilty in March to distribution of oxycodone. On November 19, 2012, Turner agreed to sell 100 30-milligram oxycodone tablets to a confidential informant working at the direction of the Drug Enforcement Administration (DEA). Turner received a total of 77 30-milligram oxycodone pills from an associate that she later distributed to the police informant in exchange for $2,800. Turner was arrested by DEA agents on February 4, 2013.
Turner told law enforcement agents that between the summer of 2012 until November 2012, she distributed a total of 300 30-milligram oxycodone pills.
The DEA and the Huntington Police Department conducted the investigation. Assistant United States Attorney Joseph F. Adams handled the prosecution. The sentence was imposed by Chief United States District Judge Robert C. Chambers.
This case was prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers in communities across the Southern District.
Williamson County Man Sentenced to Twenty Four Years on Methamphetamine Conspiracy ChargeRead the Press Release
On June 5, 2013, Steven A. Smith, 33, of Johnston City, Illinois, was sentenced in United States District Court in Benton on an indictment charging conspiracy to manufacture methamphetamine, Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced.
Smith, who had previously pled guilty to the methamphetamine charge, was sentenced to 288 months’ imprisonment, 10 years’ supervised release, and was fined $300. The offense occurred between 2010 and January 2012, in Williamson, Jackson, and Franklin Counties. Evidence at the plea and sentencing hearings established that Smith was involved with others in the manufacture of methamphetamine. During the conspiracy, Smith participated in numerous methamphetamine “cooks” and was involved in stealing anhydrous ammonia and obtaining pseudoephedrine pills for the purpose of manufacturing methamphetamine. At sentencing, the district court determined that Smith was responsible for the manufacture of 960 grams of methamphetamine. Smith received an enhanced sentence based on his classification as a Career Offender.
The ongoing investigation is being conducted by the Drug Enforcement Administration, Jackson County Sheriff’s Office, Murphysboro Police Department, Marion Police Department, Williamson County Sheriff’s Office, Illinois State Police, and Mt. Vernon Police Department.
The case was assigned to Assistant United States Attorney Amanda A. Robertson for prosecution.
Wanblee Man Pleads Guilty to Conspiracy to Distribute A Controlled SubstanceRead the Press Release
United States Attorney Brendan V. Johnson announced that Tyson Red Elk, age 23, of Wanblee, South Dakota appeared before U.S. Magistrate Judge Veronica L. Duffy on May 30, 2013 and pled guilty to Conspiracy to Distribute a Controlled Substance. The maximum penalty upon conviction is 5 years of imprisonment and/or a $250,000 fine.
Between January 2012 and continuing to July 24, 2012, Red Elk conspired to distribute marijuana in South Dakota.
The investigation was conducted by the Bureau of Indian Affairs Office of Justice Services, and the Oglala Sioux Tribe Department of Public Safety, Northern Plains Safe Trails Drug Enforcement Task Force, and Federal Bureau of Investigation. The case is being prosecuted by Assistant U.S. Attorney Ted McBride.
A presentence investigation was ordered and a sentencing date was set for September 27, 2013. The defendant was remanded to the custody of the U.S. Marshal pending sentencing.
Two Romanian Citizens Involved in Phishing Scheme Sentenced to Federal PrisonRead 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 two Romanian citizens were sentenced today by United States District Judge Janet C. Hall in New Haven for participating in an extensive Internet “phishing” scheme. BOGDAN BOCEANU, 30, was sentenced to 80 months of imprisonment, and ANDREI BOLOVAN, 29, was sentenced to 27 months of imprisonment.
A phishing scheme uses the Internet to target large numbers of unwary individuals, using fraud and deceit to obtain private personal and financial information such as names, addresses, bank account numbers, credit card numbers and Social Security numbers. Phishing schemes often work by sending out large numbers of counterfeit e-mail messages that are made to appear as if they originated from legitimate banks, financial institutions or other companies. The fraudulent email messages ask individuals to click on a hyperlink contained in the email message, which would take the individual to a counterfeit site on the Internet that purports to be the Internet site of the particular bank, financial institution or company. At the counterfeit Internet site, the individual is then asked to enter information such as the individual’s name, address and credit or debit card numbers.
According to court documents and statements made in court, in June 2005 a resident of Madison, Conn., contacted the FBI in New Haven about a suspicious email that she had received that purported to be from Connecticut-based People’s Bank. The email stated that the recipient’s online banking access profile had been locked and instructed the recipient to click on a link to a web page where the recipient could enter information to “unlock” his or her profile. The web page appeared to originate from People’s Bank, but, as the investigation revealed, was actually hosted on a compromised computer in Minnesota. Any personal identifying and financial information provided by the individual would be sent by email to individuals in Romania, or to a “collector” account, which was an email account used to receive and collect the information obtained through phishing.
BOCEANU, BOLOVAN and others were part of a loose-knit conspiracy of individuals from Craiova, Romania, and neighboring areas that shared files, tools, and stolen information obtained through phishing. The co-conspirators used and shared a number of collector accounts, which contained thousands of email messages that contained credit or debit card numbers, expiration dates, CVV codes, PIN numbers, and other personal identification information such as names, addresses, telephone numbers, dates of birth, and Social Security numbers. The co-conspirators then used the personal and financial information to access bank accounts and lines of credit and to withdraw funds without authorization, often from ATMs in Romania.
The investigation revealed that BOCEANU was a prolific trafficker of stolen information. He exchanged with a co-conspirator emails that contained numerous credit card numbers that had been obtained through the scheme, and received from another co-conspirator credit card numbers, account user names and passwords, as well as other identifying information of numerous victims. More than 12,000 credit or debit card numbers were found in BOCEANU’s email accounts between 2004 and 2009. BOCEANU also purchased a machine used to encode stolen account information on magnetic strips on credit and debit cards.
BOLOVAN was involved in the phishing conspiracy from 2004 through 2007, buying and selling stolen information, harvesting email addresses and spamming. Analysis of BOLOVAN’s email accounts revealed more than 1,200 stolen credit or debit card numbers.
In addition to People’s Bank, financial institutions and companies targeted by the defendants included Citibank, Capital One, Bank of America, JPMorgan Chase & Co., Comerica Bank, Regions Bank, LaSalle Bank, U.S. Bank, Wells Fargo & Co., eBay and PayPal.
This seven-year investigation has resulted in criminal charges against 19 Romanian citizens. On January 18, 2007, a grand jury in New Haven returned an indictment charging seven defendants with various offenses stemming from this scheme. On November 10, 2010, a grand jury returned a second superseding indictment charging an additional 12 defendants, including BOCEANU and BOLOVAN.
The first three defendants to face charges were extradited from Bulgaria, Croatia and Canada. BOCEANU, BOLOVAN and six other defendants were extradited from Romania following the ratification in 2010 of an amended treaty on mutual legal assistance between Romania and the United States.
On December 5, 2012, BOLOVAN pleaded guilty to one count of conspiracy to commit fraud in connection with access devices. On December 11, 2012, a jury found BOCEANU guilty of the same charge, as well as one count of conspiracy to commit bank fraud.
This matter is being investigated by the Federal Bureau of Investigation in New Haven, Conn.
Acting U.S. Attorney Daly and Special Agent in Charge Mertz also acknowledged the critical assistance provided by the U.S. Department of Justice Office of International Affairs, the FBI Legal Attaché in Bucharest, Interpol, the Romanian National Police and the United States Marshals Service.
The case is being prosecuted by Assistant United States Attorneys Edward Chang and Sarala Nagala.
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(203) 821-3722 [email protected]Two Detroit Teenagers Plead GuiltyFor Their Roles in Armed RobberiesRead the Press Release
The collaboration of local, state, and federal law enforcement under the Detroit One program is beginning to show dividends with the investigation, arrests, and now convictions stemming from a string of armed robberies that occurred in the east side of Detroit and surrounding cities last winter, United States Attorney Barbara L. McQuade announced.
Last week, Jesse Dismukes Jr., 18, of Detroit, admitted his role in two of these robberies when he pleaded guilty on to two counts of Robbery Affecting Interstate Commerce and two Counts of Using or Carrying a Firearm During and in Relation to a Federal Crime of Violence. The charges stem from armed robberies of a Radio Shack store in Eastpointe on December 1, 2012, and an AT&T store in Warren on January 26, 2013. Dismukes used an AK-47 to steal cellular telephones at gunpoint.
A few weeks earlier, on May 2, 2013, David Lamont Holland, 19, of Detroit, also admitted responsibility for his role in the armed robbery of the Radio Shack in Eastpointe, as well as his role in another armed robbery of a T-Mobile store in Detroit on December 7, 2012.The pleas were entered before U.S. District Judge Lawrence P. Zatkoff. Both individuals are in custody awaiting sentencing. Dismukes and Holland each face mandatory minimum sentences of 32 years in custody.
Earlier this year, a multi-agency task force, including representatives of the Federal Bureau of Investigation; Bureau of Alcohol, Tobacco, Firearms and Explosives; Homeland Security Investigations; Detroit Police Department; Michigan State Police; Wayne County Sheriff’s Office; Michigan Department of Corrections; and other local police departments, began investigating the string of armed robberies involving cellular telephone and electronic stores in Detroit, Warren, Eastpointe, and Highland Park, which occurred in December 2012 through January 2013. Through effective collaboration, this task force was able to identify numerous suspects and charge nine individuals in federal court.
“Detroit One is bringing together law enforcement agencies to identify and prosecute dangerous criminals and get them off the streets,” McQuade said. “Violent, armed robbers like these defendants endanger lives and are not welcome in our neighborhoods.”
FBI Special Agent in Charge Robert D. Foley, III stated, "These convictions send a strong message that dangerous criminals who carry out acts of violence, will face severe penalties for their crimes. The FBI is committed to the Detroit One initiative and to ensuring the safety of citizens."
Detroit One is a collaborative effort launched in March between law enforcement and the community to reduce homicide and other violent crime in Detroit. By working collaboratively, local, state, and federal law enforcement is striving to maximize its ability to identify and arrest the persons and groups initiating the violence in Detroit. These convictions are some of the tangible and significant results of this joint effort.
Texas Man Charged and Sentenced for Conversion of Public Money, Property or RecordsRead the Press Release
United States Attorney Brendan V. Johnson announced that a Waco, Texas man convicted of Conversion of Public Money, Property or Records has pled guilty to the charges and was sentenced on June 7, 2013 by U.S. Magistrate Judge Mark A. Moreno.
William Linthicum, age 23, was sentenced to $2,700 in restitution ($700 to the Bureau of Indian Affairs (BIA) and $2,000 to the Rosebud Sioux Tribe Forestry/Fire Program), a $2,000 fine and a special assessment of $25 to the Federal Crime Victims Fund.
The conviction stems from an incident that took place on July 31, 2012 when Linthicum used a BIA computer and vehicle for personal use by persuading BIA Firefighting management that he was investigating wild fires on the Rosebud Indian Reservation.
The investigation was conducted by the Federal Bureau of Investigation and the Rosebud Sioux Tribe Law Enforcement Services. The case was prosecuted by Assistant U.S. Attorney Marie H. Ruettgers. Linthicum was released.
Snyder Man Sentenced for Tax FraudRead the Press Release
BUFFALO, N.Y.-- U.S. Attorney William J. Hochul, Jr. announced today that John J. Barden, III, 55, of Snyder, N.Y., who was convicted of failing to pay employment taxes, was sentenced to time-served with three months of home detention and two years of supervised release by Chief U.S. District Court Judge William M. Skretny. Barden was also ordered to pay restitution in the amount of $75,568.74 to the Internal Revenue Service.
The sentencing is the culmination of an investigation on the part of Special Agents of the Internal Revenue Service, Criminal Investigations, under the direction of Special Agent-In-Charge, Toni M. Weirauch.
Assistant U.S. Attorney Edward H. White, who handled the case, stated that for the years 2005 through 2009, Barden falsely classified the wages of his employees at Double Down Transport, Inc. as payments for per diem, fuel advances, and reimbursements for tolls, permits, repairs, and maintenance. As a result, the defendant avoided paying a total of $75,568.74 in employment taxes.Six Methamphetamine Traffickers Sentenced in Operation "No Quarter"Read the Press Release
RALEIGH - United States Attorney Thomas G. Walker announced that in federal court today Chief United States District Judge James C. Dever III sentenced ISMAEL PARRILLA, 32, of Long Beach, California, to 180 months of imprisonment; LUIS GUTIERREZ RODRIGUEZ, 40, of Houston, Texas, to 162 months of imprisonment; HUMBERTO GARCIA, 26, San Pedro, California, to 100 months of imprisonment; GUILLERMO VILLARREAL SICAIROS, 30, of Culican, Mexico, to 156 months imprisonment; KATHERINE LASSWELL, 31, of Phoenix, Arizona, to 84 months imprisonment; and ELIZABETH VILLANUEVA, 44, of Tempe, Arizona, to 72 months imprisonment. Each defendant will be under 5 years of supervised release upon their release from the Bureau of Prisons. PARRILLA, RODRIGUEZ, GARCIA, and SICAIROS previously hadpled guilty to conspiracy to distribute and possess with the intent to distribute 500 grams or more of a substance or mixture containing a detectible amount of methamphetamine. LASSWELL and VILLANUEVA previously had pled guilty to possession with the intent to distribute 500 grams or more of a substance or mixture containing a detectible amount of methamphetamine and aiding and abetting.
PARRILLA, RODRIGUEZ, and GARCIA facilitated the delivery of 4.1 kilograms of methamphetamine to Greenville, North Carolina. The methamphetamine was delivered to Greenville from California on June 22, 2012, by codefendant Christina Capers whose sentencing hearing is pending. Law enforcement officers intercepted the car driven by Capers and found the methamphetamine stashed in a hidden compartment in the rear door of the car.
SICAIROS facilitated two deliveries of methamphetamine to eastern North Carolina from Mexico. On April 1, 2012, law enforcement officers intercepted a car in Greenville that had 5.4 kilograms of methamphetamine hidden in the front bumper. On May 4, 2012, SICAIROS, LASSWELL, and VILLANUEVA were arrested in Kinston, North Carolina, after law enforcement officers found 1.9 kilograms of methamphetamine hidden in a clothes dryer in the SUV driven by VILLANUEVA and occupied by LASSWELL.
The Organized Crime Drug Enforcement Task Force (OCDETF) Operation "No Quarter" was designed to attack the infrastructure of the Mexican Drug Trafficking Organizations (DTO), including those of the Los Zetas, La Familia, Gulf and Sinaloa drug cartels, operating not only in the Eastern District of North Carolina, but throughout North Carolina, the United States and Mexico. These DTO's are responsible for the importation of large quantities of cocaine, marijuana, heroin, and methamphetamine into the United States, as well as the related remittance of illegal drug proceeds back into Mexico.
The investigation spanned ten years and five North Carolina counties. As part of the investigation, over 100 individuals have been charged by indictment or criminal information in the Eastern District of North Carolina and state courts. In addition, $2.2 million in U.S. Currency, 127 kilograms of cocaine with a street value of $3.8 million dollars, 41 pounds of crystal methamphetamine with a street value of $650,000, 160 pounds of marijuana with a street value of $170,000, 32 grams of heroin, 35 firearms and 35 real properties valued at $1.5 million were seized by law enforcement authorities.
Investigation of this case was conducted by the Drug Enforcement Administration (DEA) - Raleigh and Greensboro Resident Offices, the New York Field Division and numerous other DEA offices in the United States and Mexico; the Internal Revenue Service - Criminal Investigation Division; the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) - Raleigh and Wilmington offices; the United States Marshals Service; the United States Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI) - Raleigh and Tampa, Florida offices; the North Carolina State Bureau of Investigation; the North Carolina National Guard; the North Carolina State Highway Patrol; the Greenville Police Department; the Pitt County Sheriff's Office; the Pamlico County Sheriff's Office; the Lenoir County Sheriff's Office; the Craven County Sheriff's Office; the Carteret County Sheriff's Office; the Beaufort County Sheriff's Office; the New Bern Police Department, the Wayne County Sheriff's Office; the Person County Sheriff's Office; the Farmville Police Department; the Goldsboro Police Department; the Rocky Mount Police Department; the Burlington Police Department, the Alamance County Sheriff's Office, and the Wilson Police Department.
The federal prosecutions were handled by Special Assistant United States Attorneys Glenn Perry and Augustus Willis, IV. Mr. Perry is a prosecutor with the Pitt County District Attorney’s Office. Mr. Willis is a prosecutor with the Craven, Carteret and Pamlico Counties District Attorney’s Office. District Attorneys Kimberly Robb and Scott Thomas have assigned Mr. Perry and Mr. Willis to the United States Attorney’s Office to prosecute federal Organized Crime Drug Enforcement Task Force criminal matters. Their assignments to the United States Attorney’s Office have been made possible by grants funded by the Governor’s Crime Commission.
Six Former USP Hazelton Inmates Sentenced on Assault ChargeRead the Press Release
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CLARKSBURG, WEST VIRGINIA - Six former inmates at the United States Penitentiary at Hazelton, West Virginia, were sentenced in United States District Court in Clarksburg by Judge Irene M. Keeley.
United States Attorney William J. Ihlenfeld, II announced that:
ANTHONY YOUNG, age 35 and CARLTON ROBINSON, age 35, were each sentenced to 120 months imprisonment; LEO HACKETT, age 36, was sentenced to 70 months imprisonment; ANTOINE GILES, age 32 and DASHEAN BRADLEY, age 36, were sentenced to 60 months imprisonment; and, DEMETRIUS PALMER, age 31, was sentenced to 37 months imprisonment
YOUNG, ROBINSON, HACKETT, BRADLEY and PALMER entered pleas of guilty to “Conspiracy to Commit an Assault on Another Inmate.” YOUNG, ROBINSON and BRADLEY, as well as GILES entered pleas of guilty to “Assault Resulting in Serious Bodily Injury.” YOUNG and HACKETT also entered pleas of guilty to “Providing a False Statement.”
On October 14, 2006, YOUNG, ROBINSON, HACKETT, GILES, BRADLEY and PALMER attacked another inmate at USP Hazelton. YOUNG assaulted the victim and held him as GILES and BRADLEY stabbed him multiple times. The victim died from his wounds.
The case was prosecuted by Assistant United States Attorney Brandon S. Flower and was investigated by the Federal Bureau of Investigation and the Special Investigative Services Unit at USP Hazleton.
Shanera Washington-sylve Charged with Financial Aid FraudRead the Press Release
SHANERA WASHINGTON-SYLVE, age 46, a resident of Marrero, Louisiana, was charged in a one-count bill of information filed today for financial aid fraud, announced U. S. Attorney Dana J. Boente.
According to the Bill of Information, WASHINGTON-SYLVE submitted or caused to be submitted false Free Application for Federal Student Aid (“FAFSA”) forms, on behalf of her daughter for the 2009 through 2013 academic years, falsely stating that she was “single”. As a result of WASHINGTON-SYLVE’s false statements in the applications, her daughter fraudulently received approximately $23,196 in Federal Pell Grants from the United States Department of Education, an agency and department of the United States.
If convicted, WASHINGTON-SYLVE faces a maximum term of imprisonment of five years, a $20,000 fine, three years of supervised release following any term of imprisonment, and a $100 special assessment.
The case was investigated by the U.S. Department of Education, Office of Inspector General. The case is being prosecuted by Assistant U. S. Attorney Julia K. Evans.
U. S. Attorney Boente reiterated that the Bill of Information is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt.
(Download Bill of Information )
Selfridge Man Sentenced for Assault with a Dangerous WeaponRead the Press Release
BISMARCK – U.S. Attorney Timothy Q. Purdon announced that on June 10, 2013, Curtis D. Jochim, 26, Selfridge, N.D., was sentenced by U.S. District Judge Daniel L. Hovland on a charge of assault with a dangerous weapon. Jochim pleaded guilty to the charge on March 18, 2013.
Judge Hovland sentenced Jochim to serve one year and nine months in federal prison, to be followed by three years of supervised release. Jochim was ordered to pay a $100 special assessment to the Crime Victim’s Fund.
On July 5, 2012, Jochim assaulted a man using his teeth, a hammer and a broom. The man required medical attention for his injuries.
The case was investigated by the Bureau of Indian Affairs – Standing Rock Agency and the Federal Bureau of Investigation.
Assistant U.S. Attorney Gary Delorme prosecuted the case.
Second Carbon County Woman Sentenced to Prison for Federal Cocaine Trafficking ChargesRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced that a second woman from Carbon County was sentenced today by Senior United States District Judge Edwin M. Kosik to serve 40 months in prison on the charge of conspiracy to distribute cocaine.
According to United States Attorney Peter J. Smith, Victoria Ann Argott, age 34, of Lansford, Carbon County, previously admitted to participating in a conspiracy to distribute crack cocaine and powder cocaine in the Carbon County area between January 2011 and December 2012.
In addition to the prison term, Senior Judge Kosik also ordered that Argott be supervised by a probation officer for four years following her prison sentence.
Previously, Bonnie Vosburgh, age 22, of Nesquehoning, Carbon County, was sentenced to 60 months in prison after entering a guilty plea and admitting to participating in the same cocaine trafficking conspiracy.
The investigation was conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Nesquehoning and Lansford Police Departments in Carbon County.
The case was prosecuted by Assistant United States Attorney Robert J. O’Hara.
****San Felipe Pueblo Man Sentenced to Three Years in Federal Prison for Child Abuse ConvictionRead the Press Release
ALBUQUERQUE – Robert Chavarillo, 33, a member and resident of San Felipe Pueblo, N.M., was sentenced this afternoon to three years in federal prison followed by a year of supervised release for his child abuse conviction. His girlfriend, Janaca Yatsattie, 29, also a San Felipe Pueblo member, was sentenced to three years of probation for her conviction for misprision of a felony.
In May 2012, Chavarillo and Yatsattie were charged in a two-count indictment alleging (1) assault resulting in serious bodily injury and (2) child abuse. The charges against the couple were the result of an investigation that was initiated after a San Felipe Pueblo social worker contacted federal authorities to make a child abuse referral. The investigation revealed that, in Dec. 2011, Chavarillo abused a child by burning the child in the groin area because the child wet the bed, and that Yatsittie was aware of the abuse but did not act to stop the abuse or report it to the authorities. According to court filings, Chavarillo initially told law enforcement that burning a child’s groin was part of a traditional Native American ceremony but other evidence in the case contradicted his claim.
Chavarillo pleaded guilty in Dec. 2012, to Count 2 of the indictment, charging him with child abuse, and admitted he endangered a child’s health by burning the child in the groin area. On that same day, Yatsittie entered a guilty plea to a felony information charging her with misprision of a felony and admitted knowing that Chavarillo committed a felony but failing to report it to proper authorities. Both admitted that their unlawful acts occurred in the San Felipe Indian Reservation.
This case was investigated by the Southern Pueblos Agency of the BIA’s Office of Justice Services and the Albuquerque Division of the FBI, and was prosecuted by Assistant U.S. Attorney Kyle T. Nayback.
Rosebud Man Sentenced for Escape from CustodyRead the Press Release
United States Attorney Brendan V. Johnson announced that a Rosebud, South Dakota man convicted of Escape from Custody was sentenced on June 7, 2013 by Chief Judge Jeffrey L. Viken, U.S. District Court.
Justin Lee Gabriel, age 21, was sentenced to 12 months of imprisonment and ordered to pay $100 to the Federal Crime Victims Fund.
Gabriel was indicted for Escape from Custody by a federal grand jury on September 25, 2012. On August 18, 2012 Gabriel left the Community Alternatives of the Black Hills and did not return. Gabriel pled guilty on January 28, 2013.
This case was investigated by the U.S. Marshals Service. Gabriel was immediately turned over to the custody of the U.S. Marshal.
Rochester Man Charged with Sale of Counterfeit Postage StampsRead the Press Release
BUFFALO, N.Y.-- U.S. Attorney William J. Hochul, Jr. announced today that Alcides Marcelino, a/k/a "Amigo" was arraigned before United States Magistrate Judge Jeremiah J. McCarthy after an indictment was unsealed charging him with 3 counts of Possession and Sale of Counterfeit Postage Stamps. The charge carries a maximum term of imprisonment of 5 years and a fine of $250,000, or both.
The indictment alleges Marcelino sold counterfeit Lady Liberty and U.S. Flag forever postage stamps on multiple occasions between early Summer 2010 and July 19, 2011. The investigation began when the main postal facility in Buffalo discovered multiple letters with the counterfeit stamps affixed. Further investigation revealed the stamps were allegedly being sold at several small, retail grocery locations in the Buffalo area. The evidence was presented to the Grand Jury by Assistant U.S. Attorney Robert C. Moscati, who will handle the trial of the case.
The investigation was conducted by the United States Postal Inspection Service, Boston Division, under the direction of Inspector in Charge Kevin M. Niland, the Federal Bureau of Investigation under the direction of Special Agent in Charge Richard M. Frankel, and the Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge James C. Spero.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
Rapid City Man Indicted for Distribution of A Controlled SubstanceRead the Press Release
United States Attorney Brendan V. Johnson announced that a Rapid City, South Dakota man was indicted by a federal grand jury for Distribution of a Controlled Substance and Possession of a Firearm in Furtherance of a Drug Trafficking Crime.
Jay Paul Gallego, age 27, was indicted on January 23, 2013 for distribution of cocaine and methamphetamine, and possession of firearms in furtherance of the drug trafficking crime of methamphetamine. He appeared before U.S. Magistrate Judge Veronica L. Duffy on May 17, 2013 and pled not guilty to the indictment.
The maximum penalty upon conviction is up to life imprisonment and/or $1,000,000 fine. The charge is merely an accusation and Gallego is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Northern Plains Safe Trails Task Force, Federal Bureau of Investigation, and Rapid City Police Department. Special Assistant U.S. Attorney Laura A. Shattuck is prosecuting the case.
Gallego was remanded to the custody of the U.S. Marshal. A trial date has been set for July 23, 2013.
President of New Jersey Clinical Laboratory, Six Salesmen Admit Bribing Doctors for More Than $100 Million in Test ReferralsRead the Press Release
NEWARK, N.J. – The president of Parsippany, N.J.-based Biodiagnostic Laboratory Services LLC (BLS), three BLS employees and three associates admitted today to a conspiracy in which millions of dollars in bribes were paid to physicians over a number of years in exchange for blood sample referrals worth more than $100 million to the company, U.S. Attorney Paul J. Fishman announced.
Each of the seven defendants – David Nicoll, 39, of Mountain Lakes, N.J.; Scott Nicoll, 32, of Wayne, N.J.; Cliff Antell, 38, of Rumson, N.J.; Luke Chicco, 40, of Garden City, N.Y.; Doug Hurley, 33, of Hillsborough, N.J.; Kevin Kerekes, 47, of Florham Park, N.J.; and Craig Nordman, 34, of Whippany, N.J. – pleaded guilty to an information charging him with one count of conspiracy to violate the Anti-Kickback Statute and the Federal Travel Act and one count of money laundering. The defendants entered their guilty pleas before U.S. District Judge Stanley R. Chesler in Newark federal court.
“Today seven men, including the president of a diagnostic lab, admitted to a conspiracy making more than $100 million in illegal income from business brought through bribes,” said U.S. Attorney Fishman. “Individual greed has no place in a treatment plan, and people seeking medical help deserve to know a doctor’s recommendations are based on professional expertise, not illicit profits. Today is an important step, but we aren’t finished holding criminals responsible for this conspiracy, or who break the law to put profits over patients.”
“Health care fraud is a serious crime which impacts all Americans either directly or indirectly, by inflating costs in the health care system,” said Newark FBI Special Agent in Charge Aaron T. Ford. “In this day and age when health care is a daily topic of discussion, the Newark office of the FBI remains dedicated and committed to combating fraud throughout the health care system. This investigation and these pleas entered today represent a tremendous effort by law enforcement to stem the tide of pay to play in health care in New Jersey.”
“Financial inducements, little more than bribes, must never interfere with proper medical care,” said Tom O’Donnell, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services region including New Jersey. “We will tirelessly pursue criminals greedily manipulating public health care programs serving vulnerable Americans.”
According to documents filed in this case and statements made in court:
On April 9, 2013, federal agents arrested BLS president and part owner, David Nicoll; Scott Nicoll, a senior BLS employee and David Nicoll’s brother; and Nordman, a BLS employee and the CEO of Advantech Sales LLC – an entity used by BLS to make illegal payments. They were then charged by federal complaint with the bribery conspiracy, along with the BLS company and New Jersey physician Frank Santangelo, 43, of Boonton, N.J. The charges against BLS and Santangelo remain pending.
Hurley, also a BLS employee, and associates Antell, Chicco and Kerekes, surrendered today to the FBI.
The conspiracy made millions in illegal profits between 2006 and April of 2013. During their guilty pleas, David and Scott Nicoll admitted that BLS made substantially more than $100 million from Medicare and private insurance companies – just from bills related to blood specimens sent to BLS by bribed doctors.
Statements during today’s pleas also detailed the means through which BLS paid doctors millions of dollars – in cash or under the guise of sham lease, service, and consulting agreements through an elaborate network of shell entities used for that purpose. The defendants also admitted that one component of the bribery scheme was to pay some doctors a fee per test to induce them to increase their ordering of certain tests.
In one text message conversation between Santangelo and David Nicoll detailed in filed documents, Santangelo stated that he and another doctor had “put our heads together and added a significant amount of testing. . .The testing is 90% legit.” The documents allege Santangelo planned to send $1 million per month in blood testing referrals to BLS by increasing the number of blood tests being ordered, including medically unnecessary tests.
Those who pleaded guilty today each face a maximum potential penalty of five years in prison and a $250,000 fine on the bribery conspiracy charge and 20 years in prison and a $500,000 fine on the money laundering charge, or twice the gross gain or loss from the offense. In addition, David and Scott Nicoll have agreed to forfeit $50 million and $25 million to the United States, respectively. The other five defendants will forfeit amounts ranging between $800,000 and $1.3 million. Sentencing for all seven defendants is scheduled for Sept. 11, 2013.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Ford; U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge O’Donnell; IRS–Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen, and the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Maria Kelokates, with the ongoing investigation leading to today’s guilty pleas.
The government is represented by Senior Litigation Counsel Andrew Leven and Deputy Chief Jacob T. Elberg of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark, as well as Assistant U.S. Attorney Barbara Ward of the office’s Asset Forfeiture and Money Laundering Unit.
The charges and allegations against Santangelo and BLS are merely accusations, and the defendants are considered innocent unless and until proven guilty.
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Defense counsel: David Nicoll: John C. Whipple Esq., Chatham, N.J.
Scott Nicoll: Timothy M. Donohue Esq., West Orange, N.J.
Cliff Antell: Robert A. Weir Esq., Red Bank, N.J.
Luke Chicco: Robert J. Anello Esq., New York
Doug Hurley: Michael Baldassare Esq., Newark
Kevin Kerekes: Nace Naumoski Esq., Roseland and Alan Bowman Esq., Newark
Craig Nordman: Timothy R. Anderson Esq., Red BankNicoll, David Information
Nicoll, Scott Information
Antell, Cliff Information
Chicco, Luke Information
Hurley, Doug Information
Kerekes, Kevin Information
Nordman, Craig InformationPresident of New Jersey Clinical Laboratory, Six Salesmen Admit Bribing Doctors for More Than $100 Million in Test ReferralsRead the Press Release
NEWARK, N.J. – The president of Parsippany, N.J.-based Biodiagnostic Laboratory Services LLC (BLS), three BLS employees and three associates admitted today to a conspiracy in which millions of dollars in bribes were paid to physicians over a number of years in exchange for blood sample referrals worth more than $100 million to the company, U.S. Attorney Paul J. Fishman announced.
Each of the seven defendants – David Nicoll, 39, of Mountain Lakes, N.J.; Scott Nicoll, 32, of Wayne, N.J.; Cliff Antell, 38, of Rumson, N.J.; Luke Chicco, 40, of Garden City, N.Y.; Doug Hurley, 33, of Hillsborough, N.J.; Kevin Kerekes, 47, of Florham Park, N.J.; and Craig Nordman, 34, of Whippany, N.J. – pleaded guilty to an information charging him with one count of conspiracy to violate the Anti-Kickback Statute and the Federal Travel Act and one count of money laundering. The defendants entered their guilty pleas before U.S. District Judge Stanley R. Chesler in Newark federal court.
“Today seven men, including the president of a diagnostic lab, admitted to a conspiracy making more than $100 million in illegal income from business brought through bribes,” said U.S. Attorney Fishman. “Individual greed has no place in a treatment plan, and people seeking medical help deserve to know a doctor’s recommendations are based on professional expertise, not illicit profits. Today is an important step, but we aren’t finished holding criminals responsible for this conspiracy, or who break the law to put profits over patients.”
“Health care fraud is a serious crime which impacts all Americans either directly or indirectly, by inflating costs in the health care system,” said Newark FBI Special Agent in Charge Aaron T. Ford. “In this day and age when health care is a daily topic of discussion, the Newark office of the FBI remains dedicated and committed to combating fraud throughout the health care system. This investigation and these pleas entered today represent a tremendous effort by law enforcement to stem the tide of pay to play in health care in New Jersey.”
“Financial inducements, little more than bribes, must never interfere with proper medical care,” said Tom O’Donnell, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services region including New Jersey. “We will tirelessly pursue criminals greedily manipulating public health care programs serving vulnerable Americans.”
According to documents filed in this case and statements made in court:
On April 9, 2013, federal agents arrested BLS president and part owner, David Nicoll; Scott Nicoll, a senior BLS employee and David Nicoll’s brother; and Nordman, a BLS employee and the CEO of Advantech Sales LLC – an entity used by BLS to make illegal payments. They were then charged by federal complaint with the bribery conspiracy, along with the BLS company and New Jersey physician Frank Santangelo, 43, of Boonton, N.J. The charges against BLS and Santangelo remain pending.
Hurley, also a BLS employee, and associates Antell, Chicco and Kerekes, surrendered today to the FBI.
The conspiracy made millions in illegal profits between 2006 and April of 2013. During their guilty pleas, David and Scott Nicoll admitted that BLS made substantially more than $100 million from Medicare and private insurance companies – just from bills related to blood specimens sent to BLS by bribed doctors.
Statements during today’s pleas also detailed the means through which BLS paid doctors millions of dollars – in cash or under the guise of sham lease, service, and consulting agreements through an elaborate network of shell entities used for that purpose. The defendants also admitted that one component of the bribery scheme was to pay some doctors a fee per test to induce them to increase their ordering of certain tests.
In one text message conversation between Santangelo and David Nicoll detailed in filed documents, Santangelo stated that he and another doctor had “put our heads together and added a significant amount of testing. . .The testing is 90% legit.” The documents allege Santangelo planned to send $1 million per month in blood testing referrals to BLS by increasing the number of blood tests being ordered, including medically unnecessary tests.
Those who pleaded guilty today each face a maximum potential penalty of five years in prison and a $250,000 fine on the bribery conspiracy charge and 20 years in prison and a $500,000 fine on the money laundering charge, or twice the gross gain or loss from the offense. In addition, David and Scott Nicoll have agreed to forfeit $50 million and $25 million to the United States, respectively. The other five defendants will forfeit amounts ranging between $800,000 and $1.3 million. Sentencing for all seven defendants is scheduled for Sept. 11, 2013.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Ford; U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge O’Donnell; IRS–Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen, and the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Maria Kelokates, with the ongoing investigation leading to today’s guilty pleas.
The government is represented by Senior Litigation Counsel Andrew Leven and Deputy Chief Jacob T. Elberg of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark, as well as Assistant U.S. Attorney Barbara Ward of the office’s Asset Forfeiture and Money Laundering Unit.
The charges and allegations against Santangelo and BLS are merely accusations, and the defendants are considered innocent unless and until proven guilty.
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Defense counsel: David Nicoll: John C. Whipple Esq., Chatham, N.J.
Scott Nicoll: Timothy M. Donohue Esq., West Orange, N.J.
Cliff Antell: Robert A. Weir Esq., Red Bank, N.J.
Luke Chicco: Robert J. Anello Esq., New York
Doug Hurley: Michael Baldassare Esq., Newark
Kevin Kerekes: Nace Naumoski Esq., Roseland and Alan Bowman Esq., Newark
Craig Nordman: Timothy R. Anderson Esq., Red BankNicoll, David Information
Nicoll, Scott Information
Antell, Cliff Information
Chicco, Luke Information
Hurley, Doug Information
Kerekes, Kevin Information
Nordman, Craig InformationPotomac Man Convicted of Conspiring to Illegally Provide Satellite Services to IranRead the Press Release
Greenbelt, Maryland - A federal jury has convicted Nader Modanlo, a/k/a Nader Modanlou, a/k/a Nader Modanlu, age 52, of Potomac, Maryland, a naturalized U.S. citizen born in Iran, of charges arising from a conspiracy to illegally provide satellite related services to Iran in violation of the International Emergency Economic Powers Act, money laundering and obstruction of bankruptcy proceedings. As a result of the conspiracy, an Iranian earth observation satellite equipped with a camera was launched into space from Russia on October 27, 2005. The launch was the first-ever Iranian satellite put into orbit.
The jury verdict was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge William Winter of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); Special Agent in Charge Thomas J. Kelly of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office; and Special Agent in Charge Robert Craig of the Defense Criminal Investigative Service, Mid-Atlantic Field Office.
“Nader Modanlo violated the law by helping Iran launch communications satellites,” said U.S. Attorney Rod J. Rosenstein. “The Iran Trade Embargo prohibits Americans from supplying goods, technology and services to Iran directly or indirectly.”
“This conviction is the result of a complex, decade long HSI investigation that spanned multiple countries and involved close partnership with the U.S. Attorney’s Office for the District of Maryland, the Defense Criminal Investigative Service and the Internal Revenue Service,” said HSI Special Agent in Charge in Baltimore William Winter. “This investigation shows that HSI special agents will tenaciously pursue those who attempt to illegally export sensitive technologies and threaten the security of the United States by willfully violating our customs laws.”
“The Defense Criminal Investigative Service (DCIS), the criminal investigative arm of the Office of the Inspector General, Department of Defense, is committed to pursuing cases involving the illegal transfer of critical U.S. Defense Department-related technologies throughout the world,” said Robert E. Craig, Jr., Special Agent in Charge of the DCIS Mid-Atlantic Field Office. “Along with our law enforcement partners and as demonstrated in this case, DCIS is diligently pursuing individuals and companies that willingly break the law and unnecessarily place the safety of America's warfighters and all Americans at risk.”
“IRS Criminal Investigation is committed to following the money trail across the globe and will not be deterred by the use of front companies and sophisticated financial transactions that hide the real ownership of the proceeds of criminal activity,” said Thomas J. Kelly, Special Agent in Charge, IRS Criminal Investigation, Washington DC Field Office. “Today’s verdict is a reminder that IRS Criminal Investigation along with our domestic and international law enforcement partners will continue our vigilant pursuit of criminal conspiracies.”
The President of the United States issued an Executive Order in 1995 imposing a trade embargo against Iran, after finding that Iran’s policies and actions posed a threat to the national security of the United States. Under the embargo, the Department of the Treasury, through the Office of Foreign Assets Control, issued the Iranian Transactions Regulations, which prohibited the export, re-export, sale or supply, directly or indirectly, by a U.S. citizen, of goods, technology or services to Iran or the Government of Iran, without prior governmental authorization.
According to evidence presented at the six week trial, Modanlo was a mechanical engineer who received science and engineering degrees from George Washington University. Modanlo represented that he was an internationally-recognized expert on strategic policy and finances affecting the space-based telecommunications industry, and that he managed space and science programs for the Department of Defense, NASA and the industry.
Trial evidence showed that from January 2000 through November 27, 2007, Modanlo and others concocted a scheme to evade the Iran trade embargo to conceal Iranian involvement in prohibited activities and transactions. Beginning in 1992, Modanlo was the principal owner, chairman and president of Final Analysis, Inc. (FAI) in Maryland. Beginning in 1994, FAI contracted with POLYOT, an aerospace enterprise company owned by the government of the Russian Federation, to launch FAI telecommunications satellites. Between 1995 through 2000, FAI and POLYOT launched a satellite purchased by FAI, and designed, constructed and launched a second satellite, both from Plesetsk, Russia. Modanlo and other FAI personnel met with POLYOT officials as part of that relationship. As required by law, Modanlo obtained U.S. export licenses in order to export and launch the telecommunications satellites and other equipment from Russia.
In November 2001, Modanlo established New York Satellite Industries, LLC, (NYSI) after creditors filed a petition to place FAI into involuntary bankruptcy. NYSI purchased FAI’s assets and Modanlo served as chairman and managing member of NYSI, using his home address as NYSI’s business address.
Beginning in 2000, Modanlo brokered an agreement between POLYOT and Iran to construct and launch a satellite. Between the summer of 2001 and December 2001, Modanlo engaged in numerous meetings with POLYOT officials to broker Iran’s satellite program. In December 2001, several Iranian officials, including Sirous Naseri, a former Iranian Amabassador to Switzerland, went to Switzerland to express interest in “investing” in NYSI by interposing a Swiss company, because “the U.S. ha[d] sanctions in place against Iran,” and direct investment would therefore be “problematic.” Naseri, Reza Heidari, Mohammad Modares and Modanlo then went to Switzerland in April 2002 to work out the details of forming Prospect Telecom in order to conceal Iranian participation as an investor/lender in Modanlo’s satellite telecommunications activities. Between April and June 2002, Heidari, Mohammad Modares and Abdol Mehrdad established Prospect Telecom and opened a bank account in Switzerland in the name of Prospect Telecom.
Heidari, Modares, and Mehrdad then caused $10 million to be wired from Prospect Telecom’s bank account overseas to Modanlo’s NYSI account in Bowie, Maryland, in consideration for Modanlo’s assistance to Iran and the Iranians in brokering the satellite agreement with Russia, and for NYSI providing telecommunications services in support of that agreement. Modanlo had agreed that NYSI would assist in obtaining telecommunications service provider licenses for the owners of Prospect Telecom and for the benefit of the Islamic Republic of Iran.
In October 2005, as a result of the efforts of Modanlo and his conspirators, POLYOT launched Iran’s first-ever satellite, a remote sensing and telecommunications satellite from Russia.
From 2005 to 2007, Modanlo made false statements and concealed information about the creation and ownership of Prospect Telecom during bankruptcy proceedings, including that Modanlo and co-conspirators had arranged for the formation of Prospect telecom to conceal Iranian involvement.
Modanlo faces a maximum sentence of five years in prison for the conspiracy; 10 years in prison on each of two counts of violating the Iran Trade Embargo, 20 years on money laundering related to the transfer of the $10 million from Switzerland to the defendant’s NYSI bank account, 10 years for each of five subsequent money-laundering transactions, which disbursed most of the $10 million; and 20 years in prison for obstruction of a bankruptcy proceeding. The jury was unable to reach a verdict on one count of violating the Iran Trade Embargo. U.S. District Judge Peter J. Messitte scheduled sentencing for September 11, 2013. The government also seeks the forfeiture of $10 million, which is the proceeds of the offense.
The other defendants charged in the indictment, Hamid Malmirian, age 53; Reza Heidari, age 52; Mohammad Modares, age 44; Abdol Reza Mehrdad, age 43; and Sirous Naseri, age 55, all Iranian nationals, remain at large.
United States Attorney Rod J. Rosenstein praised the HSI Baltimore, DCIS and IRS - Criminal Investigation for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys David I. Salem and Stuart Berman, who are prosecuting the case.
Pine Ridge Man Found Guilty of AssaultRead the Press Release
United States Attorney Brendan V. Johnson announced that William Clifford, age 24, of Pine Ridge, South Dakota was found guilty by a federal jury on May 17, 2013 of Assault Resulting in Serious Bodily Injury and Simple Assault. Co-defendant King Martinez, age 23, of Wounded Knee, was acquitted of the charges.
On October 23, 2012, Clifford and Martinez were indicted for Assault with a Dangerous Weapon and Assault Resulting in Serious Bodily Injury alleged to have occurred at Pine Ridge on October 16, 2012.
The case was investigated by the Bureau of Indian Affairs Office of Justice Services and the Oglala Sioux Tribe Department of Public Safety. Special Assistant U.S. Attorney Laura Shattuck prosecuted the case.
Clifford was remanded to the custody of the U.S. Marshal pending sentencing.
Oglala Woman Sentenced for Possessing A Stolen FirearmRead the Press Release
United States Attorney Brendan V. Johnson announced that an Oglala, South Dakota woman convicted of Possession of a Stolen Firearm was sentenced on June 7, 2013 by Chief Judge Jeffrey L. Viken, U.S. District Court.
Larena Pipe on Head, age 27, was sentenced to 8 months of imprisonment, 3 years’ supervised release and ordered to pay $100 to the Federal Crime Victims Fund.
In October 2012, Pipe on Head stole a Colt .45 caliber handgun from a man she met at a bar in Rapid City. She pled guilty on January 29, 2013.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Rapid City Police Department. Assistant U.S. Eric Kelderman prosecuted the case.