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Monday 8 April 2013
Coeur D'Alene Man Pleads Not Guilty to Federal Child Exploitation and Obscenity ChargesRead the Press Release
BOISE – Jeremy E. Durkin, 35, of Coeur d’Alene, Idaho, pleaded not guilty in federal court today to charges related to allegations of child exploitation and obscenity, U.S. Attorney Wendy J. Olson announced. A federal grand jury in Boise indicted Durkin on March 13, 2013, on one count of using a facility of interstate commerce to entice a minor to engage in criminal sexual activity; one count of transferring obscene material to a minor; and one count of receiving sexually explicit images of a minor under the age of 16 years. The indictment alleges that the offenses occurred between December 2009 and July 2010.
The indictment alleges that Durkin was previously convicted in Kootenai County, Idaho, of sexual abuse of a child under age 16. Durkin was a registered sex offender at the time of the new allegations. He is currently an inmate at the Idaho Department of Correction.
The new federal crimes are punishable by up to life in prison.
A trial is set for May 21, 2013, before U.S. District Judge Edward J. Lodge at the federal courthouse in Boise.
The case was investigated by the Federal Bureau of Investigation and the Idaho Department of Correction.
An indictment is a means of charging a person with criminal activity. It is not evidence. The person is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab “resources.”
Citizen of Honduras Who Illegally Reentered U.S. After Deportation Is SentencedRead the Press Release
David B. Fein, United States Attorney for the District of Connecticut, announced that RAMON MATAMORO-MEJIA, also known as Ramon Majano-Guzman, 34, a citizen of Honduras last residing in Norwalk, was sentenced today by Senior United States District Judge Warren W. Eginton in Bridgeport to 10 months of imprisonment for illegally reentering the United States after he was deported.
According to court documents and statements made in court, MATAMORO-MEJIA was deported from the U.S. to his native Honduras in February 2002 after he had served a prison sentence in California for attempted murder. He returned to the U.S., was prosecuted in federal court for illegally reentering the U.S., and was deported to Honduras in June 2003. MATAMORO-MEJIA again illegally reentered the U.S. and was deported a third time in July 2007.
MATAMORO-MEJIA again illegally reentered the U.S. in 2011 and, in October 2012, was arrested by the Norwalk Police Department and charged with third-degree assault, disorderly conduct, illegal use of a fake gun, threatening, interfering/resisting arrest, breach of peace and criminal trespass.
On February 7, 2013, MATAMORO-MEJIA pleaded guilty to one count of illegal reentry of a removed alien.
This matter was investigated by U.S. Immigration and Customs Enforcement, Enforcement and Removal Operations. The case was prosecuted by Assistant United States Attorney Deborah R. Slater.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
[email protected]Chinese Business Executive Convicted for Illegal Trade in Rhino HornRead the Press Release
Shusen Wei, 45, a citizen of China, pleaded guilty Friday in Miami federal court to charges stemming from his involvement in the smuggling of a carved rhinoceros horn from the United States to China, announced Wifredo A, Ferrer, U.S. Attorney for the Southern District of Florida, Ignacia S. Moreno, Assistant Attorney General for the Environment & Natural Resources Division, and William C. Woody, Chief of the U.S. Fish & Wildlife Service’s Office of Law Enforcement.
Wei entered his guilty plea before U.S. District Judge Cecilia M. Altonaga, who scheduled sentencing for April 29, 2013. Wei faces a possible term in prison of up to 10 years on the single count filed against him, a fine of up to $250,000, and a term of supervised release of up to three years.
According to documents filed in Court, Wei traveled from China to Miami, Fla., in January 2013, to attend the Original Miami Beach Antique Show. While attending the show, he roomed with another Chinese national who was later arrested for smuggling of rhinoceros horns from the United States to China. In pleading guilty, Wei admitted that he paid commissions to this other individual to purchase objects made of rhino horn in the United States and smuggle them to China and that he knew that this individual was engaged in the smuggling of protected species of wildlife, including rhinoceros horn and elephant ivory. Wei also knew that this individual had paid bribes to Chinese customs officials to assist in his smuggling. Special Agents with the U.S. Fish & Wildlife Service learned that Wei had previously purchased libation cups made from carved rhinoceros horns from this same individual. One of those items was sold at a U.S. auction house for $242,500. This and other photographs of carved rhinoceros horns were found on Wei’s cell phone.
Rhinoceros are an herbivore species of prehistoric origin and one of the largest remaining mega-fauna on earth. They have no known predators other than humans. All species of rhinoceros are protected under United States and international law, and all black rhinoceros species are endangered. Since 1976, trade in rhinoceros horn has been regulated under the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), a treaty signed by 178 countries around the world to protect fish, wildlife and plants that are or may become imperiled due to the demands of international markets. Nevertheless, the demand for rhinoceros horn and black market prices have skyrocketed in recent years due to the value that some cultures have placed on ornamental carvings, good luck charms or alleged medicinal purposes, leading to a decimation of the global rhinoceros population. As a result, rhino populations have declined by more than 90 percent since 1970. South Africa, for example, has witnessed a rapid escalation in poaching of live animals, rising from 13 in 2007 to 668 in 2012.
Mr. Ferrer commended the investigative efforts of the Special Agents of the U.S. Fish & Wildlife Service and thanked the U.S. Attorneys Offices in the Eastern District of New York and the District of New Jersey for their assistance. The case is part of “Operation Crash” (named for the term used to describe a herd of rhinoceros) which is an ongoing multi-agency effort to detect, deter, and prosecute those engaged in the illegal killing of rhinoceros and the unlawful trafficking of rhinoceros horns. This matter is being prosecuted by Assistant U.S. Attorney Thomas Watts-FitzGerald and Richard A. Udell, a Senior Counsel with the Environmental Crimes Section of the U.S. Department of Justice.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Broward County Resident Convicted in Tax Refund Fraud Scheme Using Stolen IdentitiesRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and José A. Gonzalez, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), announced that yesterday a jury convicted Lee Ervin Dale, 30, of Fort Lauderdale, for his participation in a tax refund scheme using stolen identities to convert government monies to his own use, and to make and present false, fictitious and fraudulent claims to the IRS. More specifically, Dale was convicted of two counts of converting government funds to his own use (income tax refund checks), six counts of making and presenting false claims to the IRS (presenting income tax returns for refunds), and two counts of aggravated identity theft.
Sentencing has been scheduled for June 17, 2013, at 9:00 A.M. before U.S. District Judge Kathleen M. Williams. At sentencing, the defendant faces a statutory maximum sentence of up to 10 years in prison on each count of theft of government funds, up to 5 years in prison on each count of making and presenting a false claim to the government, and two years consecutive to the other sentences on the aggravated identity theft charges.
According to testimony and evidence presented at trial, 291 handwritten tax returns claiming more than $2 million in refunds were filed between 2006 and 2009 using stolen identities and listing the Dale’s P.O. Box address. Although the IRS was able to prevent refund checks from being issued on most of these claims, approximately $195,000 in refund checks were mailed to Dale’s P.O. Box. Several of these checks were deposited directly into bank accounts bearing both Dale’s name and the identity theft victim’s name. Other checks were cashed at a check cashing store in Oakland Park, Florida, in exchange for cash and money orders that the Defendant then deposited into his own accounts.
Mr. Ferrer thanked the agents at IRS-CI for their work on this case. The case is being prosecuted by Assistant U.S. Attorneys Laurie E. Rucoba and Jared Strauss.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Brooklyn Doctor Convicted in $77 Million Medicare Fraud SchemeRead the Press Release
Gustave Drivas, M.D., a medical doctor and resident of Staten Island, was convicted today of two felony counts for his role in a $77 million Medicare fraud scheme. The jury’s verdict followed an eight-week long trial in United States District Court in Brooklyn, New York, before the Honorable Nina Gershon. The conviction was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and Mythili Raman, Acting Assistant Attorney General of the United States for the Department of Justice.
The evidence at trial showed that Drivas, a medical doctor licensed in the State of New York, knowingly authorized his coconspirators at a medical clinic in Brooklyn, New York, to use his Medicare billing number to charge Medicare for more than $20 million in medical procedures and services that were never performed. In return he received more than $500,000 for his role in the scheme. The evidence established that Drivas was a “no show” doctor, who almost never visited the clinic. The evidence also showed that the medical clinic paid cash kickbacks to Medicare beneficiaries and used the beneficiaries’ names to bill Medicare for more than $77 million in services that were medically unnecessary and never provided.
The government’s investigation included the use of a court-ordered audio/video recording device hidden in a room at the clinic, in which the conspirators paid cash kickbacks to corrupt Medicare beneficiaries. The conspirators were recorded paying approximately $500,000 in cash kickbacks during a period of approximately six weeks from April to June 2010. This room was marked “PRIVATE” and featured a Soviet-era poster of a woman with a finger to her lips and the words “Don’t Gossip” in Russian. The purpose of the kickbacks was to induce the beneficiaries to receive unnecessary medical services or to stay silent when services not provided to the patients were billed to Medicare.
To generate the large amounts of cash needed to pay the patients, the conspirators used a network of external money launderers. The owners and operators of the clinic wrote clinic checks to numerous shell companies that were controlled by money launderers. These checks did not represent payment for any legitimate service at, or for, the medical clinics. Rather, the checks were written to launder the medical clinics’ fraudulently obtained Medicare proceeds. Two of the external money launderers, Anatoly Kraiter and Larisa Shelabadova, pleaded guilty prior to trial. Irina Shelikhova and her son Maksim Shelikhov, who directed the money laundering operation from inside the clinic, also pleaded guilty prior to trial to conspiracy to commit money laundering.
Drivas was convicted today of health care fraud conspiracy and health care fraud. He was acquitted of kickback conspiracy. At sentencing before U.S. District Judge Nina Gershon of the Eastern District of New York, scheduled for July 9, 2013, Drivas faces a maximum penalty of 20 years in prison. Drivas also faces mandatory restitution to be paid jointly and severally with his co-defendants of up to $50 million, and a fine of up to $100 million.
This is the 13th conviction in this case. Prior to trial, 12 defendants pleaded guilty. At trial, Alexander Zaretser, 32, Vladimir Kornev, 53, and Yelena Galper, 40, were acquitted.
“Gustave Drivas sold his license and his ethics for cold, hard cash, and was the linchpin in a scheme that defrauded the Medicare system of millions. Medicare fraud weakens a vitally important program which millions of our citizens rely upon. We will continue to be vigilant in bringing those who seek to steal from Medicare to justice,” stated United States Attorney Lynch. Ms. Lynch thanked the Federal Bureau of Investigation and Health and Human Services for their hard work in connection with this investigation that led to the defendant’s arrest and conviction.
The case was brought together with the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section. The Medicare Fraud Strike Force operations are part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative announced in May 2009, between the Department of Justice and Health and Human Services to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,480 defendants who have collectively billed the Medicare program for more than $4.8 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
The government’s case is being prosecuted by Trial Attorney Sarah M. Hall of the Criminal Division’s Fraud Section, and Assistant U.S. Attorneys William C. Campos and Shannon C. Jones.
The Defendant:
Gustave Drivas, M.D.
Age: 50Bonesteel Man Sentenced for Sexual Abuse and Sexual Contact with A MinorRead the Press Release
United States Attorney Brendan V. Johnson announced that a Bonesteel, South Dakota man convicted of one count of Sexual Abuse of a Minor and one count of Sexual Contact with a Minor was sentenced on April 8, 2013 by U.S. District Judge Roberto A. Lange.
Robert Prue, age 34, was sentenced to 17 years in custody, 5 years of supervised release, and a $100 special assessment to the Victim Assistance Fund.
Prue was indicted by a federal grand jury on January 18, 2012, and pled guilty to the charge on February 6, 2013.
The convictions stem from incidents that took place between June 22, 2011, and September 22, 2011 when Prue had sexual contact with a minor victim.
The investigation was conducted by the Federal Bureau of Investigation and Rosebud Sioux Tribe Law Enforcement Services. The case was prosecuted by Assistant U.S. Attorney Timothy M. Maher.
Prue was remanded to the custody of the U.S. Marshal.
Baltimore Immigration Judge Participates in Naturalization CeremonyRead the Press Release
BALTIMORE --Immigration Judge Phillip T. Williams from the Executive Office for Immigration Review, Baltimore Immigration Court, delivered the keynote speech and administered the oath of allegiance to approximately 75 candidates during a naturalization ceremony at the George H. Fallon Federal Building in Baltimore, Md., on April 5, 2013. The Baltimore District Office of U.S. Citizenship and Immigration Services, Department of Homeland Security, hosted the ceremony.
Biographical Information
Attorney General Janet Reno appointed Judge Williams in March 1995. Judge Williams received a bachelor of arts degree in 1978 from Temple University, a master of arts degree in 1981 from Howard University, and a juris doctorate in 1986 from Howard University School of Law. From 1997 to 2008, he was an assistant chief immigration judge. From 1995 to 1997, he served as an immigration judge in New York. From 1987 to 1995, Judge Williams was an attorney with Maggio & Kattar in Washington, D.C. From 1984 to 1986, he worked as a District of Columbia pre-trial services officer. Judge Williams is a member of the District of Columbia and Pennsylvania Bars.
- EOIR -
The Executive Office for Immigration Review (EOIR) is an agency within the Department of Justice. Under delegated authority from the Attorney General, immigration judges and the Board of Immigration Appeals interpret and adjudicate immigration cases according to United States immigration laws. EOIR’s immigration judges conduct administrative court proceedings in immigration courts located throughout the nation. They determine whether foreign-born individuals—whom the Department of Homeland Security charges with violating immigration law—should be ordered removed from the United States or should be granted relief from removal and be permitted to remain in this country. The Board of Immigration Appeals primarily reviews appeals of decisions by immigration judges. EOIR’s Office of the Chief Administrative Hearing Officer adjudicates immigration-related employment cases. EOIR is committed to ensuring fairness in all of the cases it adjudicates.
Executive Office for Immigration ReviewAir Duct Company and Its Owner Sentenced for Selling Diluted Pesticide with Forged LabelsRead the Press Release
LAS VEGAS, Nev. – A Las Vegas air duct company and its owner/president were sentenced today to fines and probation for making false statements to federal investigators and for manufacturing and selling thousands of gallons of misbranded and diluted pesticide between 2005 and 2010,announced Daniel G. Bogden, United States Attorney for the District of Nevada. A company engineer was also sentenced for his role in the offense.
“The defendants knowingly produced and sold a misbranded pesticide, misleading their customers and potentially endangering the public,” said U.S. Attorney Bogden. “We are committed to the prosecution of this type of federal crime and the significant risk it poses to human health.”
DPL Enterprises Inc. (dba Air Care Indoor Quality Specialists), located at 3868 East Post Road, was sentenced to two years of probation and ordered to pay an $80,000 fine. The company must also establish within 30 days a plan to assure that it is operating in full compliance of all environmental and occupational safety regulations. It pleaded guilty in December 2012 to one felony count of making a materially false statement and two misdemeanor counts of misbranding of a pesticide.
Richard Papaleo, 75, of Las Vegas, Nev., the company’s president and owner, was sentenced to two years of probation and ordered to pay a $15,000 fine. Papaleo pleaded guilty in December to one felony count of making a materially false statement and two misdemeanor counts of misbranding of a pesticide.
Michael Stanovich, 67, of Henderson, Nev., an engineer who worked at the company since 1991, was sentenced to one year of probation. Stanovich pleaded guilty in December 2012 to two misdemeanor counts of misbranding of a pesticide.
According to the court records, Air Care was in the business of manufacturing and selling air duct cleaning equipment, filters and various chemical compounds, and it also ran its own air duct cleaning and repair operation. Air Care purchased and sold to its customers a disinfectant pesticide known as Sporicidin. Air Care diluted it with 10 times the amount of water, and sold the fake Sporicidin with a forged label that claimed that it could kill various organisms, including HIV, Avian Flu, Salmonella, Staph and MRSA. Neither the diluted pesticide nor the label was approved by the EPA as required. Air Care and Papaleo had been warned by the maker of Sporicidin as far back as 1998 that the company must obtain EPA approval for its label and that misbranding was “illegal.” Air Care admitted to selling approximately 6,312 gallons of the misbranded and diluted pesticide between 2005 and 2010.
"When people purchase a product, they expect it to be genuine and that it will do what it's supposed to do," said Jay M. Green, Special Agent in Charge of EPA's criminal program in Nevada. "Not only did the defendants dilute and repackage a legitimate product, the product in this case was a disinfectant often used in hospitals and posed a significant risk to human health. Anyone who knowingly misuses a pesticide is committing a crime and like any other violator, he or she will be prosecuted."
The government’s investigation was initiated after EPA received complaints from the maker of Sporicidin. EPA made an undercover purchase of the fake Sporicidin sold by Air Care, and EPA’s National Enforcement Investigations Center (NEIC) laboratory in Colorado found that it was diluted with water even though the fake label made by Air Care claimed it contained the original strength of the active ingredient. When federal agents from the FBI and from EPA’s Criminal Investigations Division questioned Papaleo about whether his company was selling the diluted chemical, he denied it.
EPA regulates pesticides under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), which makes it a crime manufacture a pesticide in the United States without first being registered with the EPA and obtaining from the EPA a manufacturer establishment number. Approved labels must be affixed to any container of the pesticide that is distributed or sold. A pesticide is deemed “misbranded” if among other things the labeling is false or misleading. Misbranding pesticides is a misdemeanor offense.
The case was investigated by EPA’s Criminal Investigation Division with assistance from the FBI. The case was prosecuted by Assistant U.S. Attorney Kathryn C. Newman and Richard A. Udell, a Senior Trial Attorney with the Environmental Crimes Section of the U.S. Department of Justice.Addison Seafood Company and Its Owner Resolve Civil and Criminal Charges of Mislabeling Frozen Fish and ShrimpRead the Press Release
CHICAGO — An Addison seafood distributor and its owner have agreed to resolve civil and criminal charges for mislabeling certain products by substituting cheaper fish for more expensive fish and misstating the weight of shrimp to charge customers more for a lesser quantity, federal officials announced today. GOURMET EXPRESS MARKETING, INC., and its president and owner, PATRICK A. BRUNO, agreed to a permanent injunction in settling a civil lawsuit and Bruno has agreed to plead guilty to a criminal misdemeanor charge, admitting that he mislabeled and sold swai as “catfish,” and perch as “red snapper” or “pacific snapper,” and also packaged shrimp in an ice glaze that added to its weight.
The mislabeling has not resulted in any known illnesses or danger to public health, officials said.
U.S. District Judge Edmond Chang signed a consent decree today after the government filed a civil lawsuit against Bruno and Gourmet Express, alleging violations of the Federal Food, Drug, and Cosmetic Act. The decree enjoins the defendants from committing any future violations, requires the hiring of an independent expert at the company’s expense to ensure compliance with the agreement and federal laws, and provides for civil damages of $5,000 a day and $10,000 for each shipment in the event violations occur.
Also today, Bruno, 71, of Addison, was charged in a criminal information with a misdemeanor violation of the Federal Food, Drug, and Cosmetic Act for mislabeling Gourmet Express’ products. Through his attorney, Bruno has authorized the government to disclose that he will plead guilty to the criminal charge. He will be arraigned at a later date in U.S. District Court.
“Customers who purchase seafood products are entitled to know they got what they paid for,” said Gary S. Shapiro, United States Attorney for the Northern District of Illinois. “Proper labeling is necessary to protect consumers and we stand ready to take action against food distributors who violate federal food laws and regulations.”
Mr. Shapiro announced today’s action with Scott MacIntire, district director of the FDA’s Chicago District Office, and John P. Stich, Acting Special Agent-in-Charge of the FDA’s Office of Criminal Investigations.
According to court documents, Gourmet Express purchases, processes and repacks frozen seafood and sells its products to retailers and wholesalers in Illinois and other states. The Food and Drug Administration issued a warning letter to the defendants in February 2010 after inspections in 2009 found that they misrepresented the weight of frozen shrimp after adding an ice glaze to the products, and mislabeled perch as “red snapper,” or “pacific snapper.” Subsequent inspections in March and April 2010 documented continuing and additional violations.
The FDA tested samples of the defendants’ frozen cooked shrimp during some inspections in 2009 and 2010 to evaluate the net weight stated on the product labels. The tests revealed that the actual weight of the products was, respectively, 21.5 and 14.4 percent under the labeled weight. The FDA tested DNA samples to determine the true species of the fish.
The criminal case alleges that between 2007 and 2010, Bruno knew that seafood sold he was mislabeled and that the packages of frozen shrimp overstated the weight of that ice-glazed product. The FDA violation carries a maximum penalty of a year in prison and a $100,000 fine.
The civil consent decree requires Gourmet Express and Bruno to hire a qualified independent expert who will develop and implement a written plan for the receipt, processing, packing, labeling, and distribution of seafood to ensure that product labeling is accurate and the products are what they purport to be. Bruno must regularly certify to the FDA that the defendants are in compliance with the plan, and the defendants must pay for future FDA inspections to evaluate compliance. After five years of continuous compliance, Gourmet Express and Bruno may ask a judge to end the consent decree.
The government is being represented by Assistant U.S. Attorneys Donald Lorenzen and Kaarina Salovaara.
In a criminal case, 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. In a civil case, the government must prove its allegations by a preponderance of the evidence.
Bruno Information
Gourmet Express Consent Decree
Gourmet Express Complaint
Friday 5 April 2013
Wyoming Man Indicted for Assaulting A Federal OfficerRead the Press Release
United States Attorney Christopher A. Crofts announced today that Corey James Hill, a 19 year old Eastern Shoshone tribal member of the Wind River Indian Reservation, appeared in Federal Court after having been indicted in a one count Indictment charging him with assaulting and resisting a federal officer. The charge carries a maximum penalty of twenty years imprisonment and a fine of not more than $250,000.00. This case is being investigated by the Bureau of Indian Affairs and the Federal Bureau of Investigation.
An indictment is only an accusation. In every criminal case, the accused is presumed to be innocent until proven guilty, and the government always has the burden of proving guilt at trial beyond a reasonable doubt.Wilmington Man Sentenced for Drug Trafficking & Firearm ViolationsRead the Press Release
New Bern - United States Attorney Thomas G. Walker announced that in federal court today United States District Judge Louise W. Flanagan, sentenced LEANDER HANDS, 37, of Wilmington, North Carolina, to 300 months imprisonment and 5 years of supervised release.
On January 16, 2013, HANDS pled guilty to possession with the intent to distribute a quantity of heroin, distribution of a quantity of heroin and aiding and abetting same, and possession of a firearm in furtherance of a drug trafficking crime.
On February 15, 2011, New Hanover County Sheriff’s Detectives made an undercover purchase of heroin near an apartment complex in Wilmington, North Carolina. The detectives developed information that HANDS supplied the heroin to the person who was arrested by law enforcement.
Narcotics detectives stopped an automobile driven by HANDS in the area of the drug transaction. During a search of HANDS and the automobile, law enforcement found quantities of heroin and crack cocaine and $1,200 which included undercover funds used to purchase the heroin.
Following HANDS arrest, detectives searched a Taylor Holmes Apartment that was associated with HANDS. They found an additional 250 bags of heroin in a child’s bedroom. In the master bedroom closet, detectives found a safe containing more than $16,000, a bullet proof vest and a handgun. Detectives also found a stolen handgun in a bedroom drawer.
This case was brought as a part of an Organized Crime Drug Enforcement Task Force (OCDETF) Operation entitled WoofPack, investigating importers and multi-level distributors of heroin, cocaine, crack cocaine and gang activity associated with this distribution. So far 32 persons have been sentenced in federal court as a part of this operation.
Investigation of this OCDETF case is being conducted by the Federal Bureau of Investigations (Safe Streets Task Force); the Bureau of Alcohol, Tobacco, and Firearms and Explosives; the North Carolina State Bureau of Investigations; the Wilmington Police Department; the New Hanover County Sheriff’s Office and the Greenville Police Department. Special Assistant United States Attorney Timothy Severo represents the government. Mr. Severo is a prosecutor with the New Hanover District Attorney’s Office. District Attorney Ben David has assigned him to the United States Attorney’s office to prosecute federal Organized Crime Drug Enforcement Task Force criminal matters.
Whitehall Woman Pleads Guilty to Using Stolen Identities to Commit Benefits FraudRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
COLUMBUS – Audrey Costar, 46, of Whitehall, Ohio pleaded guilty in U.S. District Court to using 50 stolen identities to file for unemployment benefits in eight states over three years, netting her almost $80,000.
Carter M. Stewart, U.S. Attorney for the Southern District of Ohio, James Vanderberg, Special Agent-in-Charge of the U.S. Department of Labor Office of Labor Racketeering and Fraud Investigations, Mark Porter, Special Agent in Charge, U.S. Secret Service and Elias Papoulias, Resident Agent in Charge, Social Security Administration Office of Inspector General announced the pleas entered today before U.S. Magistrate Judge Mark Abel.
According to court documents, Costar used 50 stolen identities to electronically file false unemployment insurance claims in Alaska, Minnesota, Montana, Arizona, Utah, Ohio, Colorado and Pennsylvania between February 2009 and December 2012. She collected approximately $78,674 using the scheme.
Costar was also collecting Social Security benefits in her own name at the time. Earnings made through the identity theft scheme were not reported to the Social Security Administration which resulted in her receiving approximately $7,906.78 in benefits to which she was not entitled.
Costar pleaded guilty to two counts of theft of government funds, each punishable by up to ten years in prison, and two counts of aggravated identity theft. Each count of aggravated identity theft is punishable by a mandatory two-year sentence to be served consecutive to any other time served.
The court will conduct a pre-sentence investigation before determining the sentence and schedule a date for sentencing.
U.S. Attorney Stewart commended the investigation by Department of Labor, Secret Service agents and Social Security Administration inspectors general, and Financial Crimes Chief Brenda S. Shoemaker, who is representing the United States in this case.
Week in Review – South BendRead the Press Release
FOR IMMEDIATE RELEASECONTACT: Mary Hatton
www.usdoj.gov/usao/inn/ CELL: (219) 314-9993
South Bend, Indiana—The United States Attorney’s Office announced the following activity in Federal Court:
PLEAS:
Kevin Howell, 46, of Michigan City, Indiana, pled guilty before Magistrate Judge Christopher Nuechterlein to the felony offense of possession with the intent to distribute crack cocaine.Magistrate Nuechterlein is recommending that the district court accept the tendered guilty plea.Parties have 10 days in which to object to the magistrate judge’s recommendation. Sentencing has been set for 7/17/13.These charges were filed as a result of an investigation by the Drug Enforcement Administration Task Force.This case is being prosecuted by Assistant United States Attorney Frank Schaffer.
If convicted in court, any specific sentence to be imposed will be determined by the judge after a consideration of federal sentencing statutes and the Federal Sentencing Guidelines.
DISPOSITIONS:
Brian Newman, 46, of Michigan City, Indiana, was sentenced by District Judge Jon DeGuilio to 360 months imprisonment and 20 years of supervised release after pleading guilty to the felony offense of enticement of a minor to engage in sexually explicit conduct.According to documents filed by the government in this case, Newman admitted that in April 2012 he contacted a 16 year old female on Facebook who resided in New York.He told her in a Facebook chat that a male she knew as Mark had hacked into her iPad and had video of her dressing in her room.He told her she could get the videos back if she would Skype with him.He asked her to engage in sexually explicit conduct and then e-mail the photos to him.Pursuant to a federal search warrant, law enforcement discovered numerous photos that the girl had sent to Newman’s e-mail account.This case resulted from an investigation by members of the Indiana Internet Crimes Against Children Task Force, including the Federal Bureau of Investigation, the Michigan City Police Department, the Mound, Minnesota Police Department, the Cary, North Carolina Police Department and the New York State Police.This case was prosecuted by Assistant United States Attorney John Maciejczyk.
Week in Review – HammondRead the Press Release
FOR IMMEDIATE RELEASECONTACT: Mary Hatton
www.usdoj.gov/usao/inn/ CELL: (219) 314-9993
Hammond, Indiana—The United States Attorney’s Office announced the following activity in Federal Court:
DISPOSITION:
Leon Thomas, 38, of Chesterton, Indiana, was sentenced by District Judge Jon DeGuilio to 24 months imprisonment, $25,216.00 in restitution and 1 year of supervised release after pleading guilty to the felony offense of aggravated identity theft.According to documents filed by the government in this case, f rom June 2009 through July 2010, while employed at a manufacturing company in Michigan City, Indiana, Thomas applied for unemployment insurance benefits and extended unemployment benefits using the identity of his brother by using his social security number and date of birth. While working for the company he unlawfully received unemployment insurance benefit payments that consisted of federal and state money. When asked on the weekly claim voucher whether he was working, Thomas answered no, when in truth he was working and receiving a paycheck.Thomas unlawfully received a total of $11,590 in Federal funds as well as $13,626 in State funds for the unemployment benefits. This case was the result of an investigation by the Department of Labor.This case was prosecuted by Assistant United States Attorney Barbara Brook.
Week in Review – Fort WayneRead the Press Release
FOR IMMEDIATE RELEASECONTACT: Mary Hatton
www.usdoj.gov/usao/inn/ CELL: (219) 314-9993
Fort Wayne, Indiana—The United States Attorney’s Office announced the following activity in Federal Court:
PLEAS:
Ku-La Lwin, 18, of Fort Wayne, Indiana, pled guilty before Magistrate Judge Roger Cosbey to the felony offense of receipt and possession of a non-registered firearm.Magistrate Cosbey is recommending that the district court accept the tendered guilty plea.Parties have 10 days in which to object to the magistrate judge’s recommendation. This charge was filed as a result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives.This case is being prosecuted by Assistant United States Attorney Tina Nommay.
Leonard Riley, 21, of Fort Wayne, Indiana, pled guilty before Magistrate Judge Roger Cosbey to the felony offense of possession of a firearm by a convicted felon.Magistrate Cosbey is recommending that the district court accept the tendered guilty plea.Parties have 10 days in which to object to the magistrate judge’s recommendation. This charge was filed as a result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Fort Wayne Police Department.This case is being prosecuted by Assistant United States Attorney Lovita Morris King.
James Rogers, 28, of Fort Wayne, Indiana, pled guilty before Magistrate Judge Roger Cosbey to the felony offense of possession of a firearm by a convicted felon.Magistrate Cosbey is recommending that the district court accept the tendered guilty plea.Parties have 10 days in which to object to the magistrate judge’s recommendation. These charges were filed as a result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Fort Wayne Police Department.This case is being prosecuted by Assistant United States Attorney Lovita Morris King.
If convicted in court, any specific sentence to be imposed will be determined by the judge after a consideration of federal sentencing statutes and the Federal Sentencing Guidelines.
Wallingford Man Sentenced to Federal Prison for Trading Child PornographyRead the Press Release
David B. Fein, United States Attorney for the District of Connecticut, today announced that PETER C. JOHNS, 39, of Wallingford, was sentenced yesterday by United States District Judge Robert N. Chatigny in Hartford to 24 months of imprisonment, followed by 10 years of supervised release, for trading child pornography on the Internet.
According to court documents and statements made in court, on November 24, 2010, a detective assigned to the Richmond (Va.) Field Office of the Federal Bureau of Investigation and acting in an undercover capacity logged into a publicly available Internet file sharing program and downloaded several images and videos of child pornography from a shared directory maintained by JOHNS.
On March 25, 2011, JOHNS was arrested at his residence. On that date, law enforcement agents also seized his computer and related components. Forensic analysis of the seized computer and components revealed that JOHNS used the Internet to trade thousands of images and videos of child pornography. Included in his collection of child pornography were images of children under the age of 12 engaged in sexually explicit conduct, and images of children engaging in sadistic or masochistic conduct.
JOHNS has been released on bond under electronic monitoring by the U.S. Probation Office since shortly after his arrest. On January 7, 2013, he pleaded guilty to one count of receipt and distribution of child pornography.
This matter was investigated by the Federal Bureau of Investigation and the Connecticut Child Exploitation Task Force, which includes federal, state and local law enforcement agencies. The Connecticut State Police and Wallingford Police Department provided assistance to the investigation. The case was prosecuted by Assistant United States Attorney Sarala V. Nagala.
The Connecticut Child Exploitation Task Force, which is housed at the main FBI office in New Haven, investigates crimes against children occurring over the Internet, and provides computer forensic review services for participating agencies. For more information about the Task Force, or to report child exploitation crimes, please contact the FBI at 203-777-6311.
This prosecution is part of the U.S. Department of Justice’s Project Safe Childhood Initiative, which is aimed at protecting children from sexual abuse and exploitation. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
To report cases of child exploitation, please visit www.cybertipline.com.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
[email protected]Virginia Settlement Attorney Pleads Guilty in Conspiracy to Fraudulently Obtain over $100 Million in SBA-backed LoansRead the Press Release
Attorney Used Her Law Firm and Settlement Company to Facilitate Fraudulent Loan ClosingsBaltimore, Maryland - Seung E. Oh, a/k/a Sandy Oh, age 44, of Great Falls, Virginia, pleaded guilty today to conspiracy to commit bank fraud and money laundering, in connection with a scheme to fraudulently obtain business loans guaranteed by the Small Business Administration, with resulting losses of over $100 million.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Small Business Administration Inspector General Peggy E. Gustafson; Postal Inspector in Charge Gary R. Barksdale of the U.S. Postal Inspection Service - Washington Division; and Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation.
According to her plea agreement, Oh is an attorney with offices in Annandale, Virginia and the owner operator of Washington Settlement Group (WSG), a title company located in Annandale. In about 1998, Oh met Joon Park and his brother, Loren Park, who owned and operated Jade Capital, a loan brokerage company. Oh knew that Jade Capital specialized in securing loans for individuals interested in purchasing and refinancing small businesses in the Mid-Atlantic area, some of which were settled through Oh’s law firm and WSG. Oh knew that the Parks encouraged prospective borrowers using the services of Jade Capital to apply for business loans through the SBA’s Section 7(a) program, which guaranteed 75% - 90% of qualified loans made by banks and other commercial lending institutions. Under this program, the principals of the small business seeking the loan were required to invest a certain amount of their own money, called an equity injection, before they qualified for a loan. The banks and other lending institutions making the loan bore the risk of payment default only up to the percentage of the loan not guaranteed by the SBA.
Over the course of Oh’s relationship with Joon and Loren Park, and to foster more business with their company, Oh agreed to use her settlement company and law firm to facilitate loan closings for deals that would otherwise fail to meet the lending parameters of the banks making the loans, including banks authorized to lend under SBA’s Section 7(a) program. Oh helped the Parks misrepresent to the banks and to the SBA the true amount of money involved in the transactions and/or the true names of the parties taking part in the transactions.
To accomplish this, Oh sometimes agreed to “netting” a transaction, whereby the Parks would negotiate a sale price with the seller that was less than the price listed on the sales contract submitted to the bank, and/or they would increase the loan by the amount needed for the down payment. In so doing, they reduced the amount of money that the buyer actually had to inject into the deal and concealed that the buyer did not have sufficient equity to qualify for the loan. To conceal these arrangements, Oh completed the settlement sheets as if the buyer had made the required cash injection and the seller had received the full contract price.
Another way that Oh helped to facilitate the loan closing for Jade Capital was when she “fronted” the buyer’s cash injection. Oh temporarily loaned part of the buyer’s up-front payment by taking other people’s money out of the escrow accounts of either her law firm or her title company. Joon and Loren Park then paid back the fronted money after the settlement, usually from their share of the proceeds from that deal or a later one. As with the “netting” scheme, the settlement sheets and all other related documents for the “fronted” deal would falsely reflect that the buyer injected his own money into the transaction in accordance with the agreed upon financing terms established by the lending institution.
Oh faces a maximum penalty of 30 years in prison for the bank fraud conspiracy; and a maximum of 20 years in prison for money laundering. As part of her plea agreement, Oh will be required to pay a money judgment of $11,832,000 and forfeit all the property involved in the offense. U.S. District Judge William D. Quarles, Jr. has scheduled sentencing for July 9, 2013 at 1:00 p.m.
Joon Park, a/k/a “Joon Pak,” and “Joon Paik,” age 43, of Falls Church, Virginia, pleaded guilty and is scheduled to be sentenced on May 28, 2013 at 1:00 p.m. Nick Park, a/k/a Nochol Park, age 46, of McLean, Virginia, was sentenced to 33 months in prison; and Joo Hyuk “John” Lee, age 39, of Richmond, Virginia, and Sang Hyun Kim, age 35, of Fairfax, Virginia, were each sentenced to three years in prison, for conspiracy to commit bank fraud. Kim’s wife, In Jung Ham, age 30, also of Fairfax, was sentenced to a year and a day in prison, for her role in the scheme. Judge Quarles ordered Lee to pay restitution of $1,900,325 and ordered Ham to pay restitution of $216,472.92. Lee, Kim and Ham were also ordered to forfeit the proceeds of the scheme and pay money judgments of $18,764,900, $13,432,000 and $15,725,000, respectively.
This law enforcement action is part of President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
United States Attorney Rod J. Rosenstein thanked the SBA Office of Inspector General, U.S. Postal Inspection Service and FBI for their work in the investigation. Mr. Rosenstein praised Assistant U.S. Attorneys Leo J. Wise and Martin J. Clarke, who are prosecuting the case.
Virginia Man Sentenced for Firearm OffenseRead the Press Release
King Malone, Jr., a 51-year old man, from Hampton, VA, was sentenced on April 5, 2013, in district court in East St. Louis, on one count of unlawful possession of a firearm by a previously convicted felon, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today.
Malone, Jr. was sentenced to 12 months in prison, two years of supervised release, fined $200 and ordered to pay $100 special assessment. Malone, Jr., who had previously pled guilty, admitted ownership of a semi-automatic weapon recovered in a vehicle driven by him on January 7, 2011, during a law enforcement traffic stop, knowing that he was a convicted felon and that it was illegal for him to have a firearm.
The investigation was conducted by the Bureau of Alcohol, Tobacco Firearms and Explosives, and the Illinois State Police.
This was prosecuted by Assistant United States Attorney Daniel T. Kapsak.
U.S. Attorney and Head of IRS Newark Field Office Remind Taxpayers Filing Deadline Is NearRead the Press Release
NEWARK, N.J. – As the April 15 deadline for filing taxes approaches, U.S. Attorney Paul J. Fishman and Shantelle P. Kitchen IRS-Criminal Investigations Acting Special Agent in Charge, Newark Field Office, are reminding taxpayers to accurately and completely fill out their returns and make sure they file them on time.
“Tax evasion is a felony, punishable by prison time and heavy fines and penalties,” U.S. Attorney Fishman said. “It’s important for the public to take time to carefully prepare their returns and make sure they file them – or seek a filing extension – before the deadline.”
“The prosecution of individuals who intentionally conceal income and evade taxes is a vital element in maintaining public confidence in our tax system,” Acting SAC Kitchen said. “Year round efforts of IRS-Criminal Investigation are directed at that portion of Americans who willfully and intentionally violate their legal duty to voluntarily file lawful and accurate tax returns.”
U.S. Attorney Fishman and Acting SAC Kitchen said taxpayers who are hiring someone else to prepare their returns for them should ensure they are working with reputable tax return preparers.
“Be careful when choosing someone else to prepare your taxes,” U.S. Attorney Fishman said. “Even if someone else prepares your return, you are ultimately responsible for all the information on it. Make sure you review your return, and never sign a blank form.”
“While the vast majority of return preparers are professional, honest and provide a valuable service to their clients, there are some who are not,” Acting SAC Kitchen said, noting the recent case of a Hudson County tax preparer who pleaded guilty Feb. 1, 2013, to filing false returns and tax evasion:
Elijah Washington Jr., of Jersey City, N.J., owned and operated a tax preparation business – Elijah’s Professional Tax Service – in Jersey City, where he prepared tax returns for tax years 2005 through 2008. He admitted that he fabricated various items to obtain larger refunds for clients, including tuition and fees deductions, child tax credits, charitable contributions and job expenses. He also failed to report his own income on the money he earned from the tax preparation business.
Tax evasion is a felony, punishable by up to five years in prison and a $250,000 fine. Other tax cases prosecuted recently by the U.S. Attorney’s office in New Jersey include:
Nicholas Papanier Sr., 57, of Sewell, N.J., pleaded guilty on March 22, 2013, to one count of tax evasion. Between 2006 and 2009, Papanier owned Nellie’s Provisions, a meat distribution company that provided all of the meat for Primo Hoagies franchises and other independent restaurants. In 2006, 2007 and 2008, Papanier persuaded Primo Hoagies franchise owners to buy Thumann’s deli products from Nellie’s Provisions, often paying for them in cash. He took a significant amount of the cash paid to Nellie’s Provisions and deposited it into his personal bank accounts. Papanier admitted that he did not report the diverted cash to the IRS and only reported Form W-2 wages, interest and dividend income, and property tax information. By omitting all of the diverted cash, he failed to disclose and report a significant portion of this income on his tax returns, causing those tax returns to substantially understate the amount of income he received.
Rakesh Chitkara, 60, of Marlboro, N.J., pleaded guilty March 21, 2013, to making and subscribing to a 2007 federal income tax return to the IRS that he did not believe to be true. Chitkara admitted that he had a financial interest in at least two financial accounts at UBS AG in Zurich, Switzerland, and that he knowingly failed to disclose these accounts, and income from these accounts, on his personal tax returns for five years.
Joseph Gallagher, 69, of Rutherford, N.J., a tax preparer and disbarred New Jersey lawyer, was sentenced on March 20, 2013, to 36 months in prison for submitting false tax returns or failing to file returns for five years, resulting in a tax loss to the government of more than $1.1 million.
“IRS-Criminal Investigation is committed to working with the United States Attorney’s Office in the investigation and prosecution of tax crimes,” Acting SAC Kitchen said. “We should not expect the honest taxpayer to foot the bill for those who hide income from the IRS.”IRS-Criminal Investigation is the law enforcement side of the IRS. IRS Special Agents investigate potential violations of the Internal Revenue Code and related financial crimes in a manner that fosters confidence in the tax system and compliance with the law.
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Two Rapid City Men Indicted for Possession with Intent to Distribute A Controlled SubstanceRead the Press Release
United States Attorney Brendan V. Johnson announced that two 23-year-old men have been indicted by a federal grand jury for Possession with Intent to Distribute a Controlled Substance.
Kenneth Morales-Scott, Jr., and Cayleb Louis Young from Rapid City, South Dakota were indicted by a federal grand jury on March 13, 2013. They appeared before U.S. Magistrate Judge Veronica L. Duffy on April 1, 2013 and pled not guilty to the indictment. The maximum penalty upon conviction is 5 years of custody, a $250,000 fine, or both; 2 years of supervised release; and a $100 Special Assessment. Restitution may also be ordered.
The charge is merely an accusation and Morales-Scott, Jr., and Young are presumed innocent until and unless proven guilty. The investigation is being conducted by the Northern Plains Safe Trails Drug Enforcement Task Force. Assistant U.S. Attorney Jay Miller is prosecuting the case.
Morales-Scott, Jr., and Young were released on bond pending trial. A trial date has not been set.
Sturgis Man Pleads Guilty to Illegal Reentry After DeportationRead the Press Release
United States Attorney Brendan V. Johnson announced that Carlos Jimenez-Burgos, age 28, of Sturgis, South Dakota appeared before U.S. Magistrate Judge Veronica L. Duffy on April 2, 2013 and pled guilty to Illegal Reentry After Deportation. The maximum penalty upon conviction is 2 years' imprisonment and/or a $250,000 fine.
In February 2013, after being arrested in Sturgis on a traffic offense, Jimenez-Burgos was found to be illegally living in the United States, having previously been deported. The investigation was conducted by the Bureau of Immigration and Customs Enforcement. The case is being prosecuted by Assistant U.S. Attorney Eric Kelderman.
A presentence investigation was ordered and a sentencing date will be scheduled. The defendant was remanded to the custody of the U.S Marshal pending sentencing.
Springfield Men Sentenced for Stolen Check Fraud SchemeRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that two Springfield, Mo., men have been sentenced in federal court for their roles in a conspiracy to alter stolen checks and pass them at various retailers in the Springfield area.
Maurice Suton Anton Sayles, also known as “Ish” Washington, and his twin brother, Martinus Antuan Sayles, both 36 and both of Springfield, were each sentenced by U.S. District Judge Greg Kays on Wednesday, April 3, 2013 to seven years and one month in federal prison without parole. The court also ordered Maurice Sayles to pay $3,303 in restitution; Martinus must pay at least $1,838 in restitution.
Maurice Sayles, who admitted that he was the leader of the criminal conspiracy that involved at least five participants, pleaded guilty on Oct. 11, 2012. Martinus Sayles pleaded guilty to his role in the conspiracy on Aug. 27, 2012.
Martinus Sayles acquired stolen checks from an unidentified person in the Kansas City, Mo., area. Martinus and Maurice Sayles then altered the checks by cutting out digits from the routing and account numbers, and replacing them with other digits using glue and a hammer. They passed the forged checks at various retailers throughout the Springfield area and recruited others to pass the forged checks for them.
Sometimes the Sayles brothers and those they recruited used false identification to pass the forged checks. Maurice Sayles created the false identifications using a label maker to alter the existing identification card or driver’s license of the individual passing the check to match the name of the account holder on the check. The Sayles brothers, with the assistance of others they recruited, returned the merchandise they purchased for a cash refund.
Many times, the Sayles brothers facilitated their return of the merchandise by altering the purchase receipts to appear as though the purchase had occurred more than 10 days before the return. This was done to circumvent the 10-day return policy most stores had in place, which required customers paying by check to wait at least 10 days before returning merchandise in order to ensure the check had cleared before a refund was issued.
This case was prosecuted by Assistant U.S. Attorney Randall D. Eggert. It was investigated by the Springfield, Mo., Police Department and the U.S. Secret Service.
Sioux Falls Man Convicted in Child Sex Trafficking CaseRead the Press Release
United States Attorney Brendan V. Johnson announced that a Sioux Falls, South Dakota man has been found guilty on two counts of Sex Trafficking of a Child. Emmanuel William Nyuon, age 34, was convicted by a federal jury for Sex Trafficking of a Child by Force, Fraud, or Coercion and Conspiracy to Engage in Sex Trafficking of a Child.
Following a four-day trial, the jury returned the guilty verdict after a short deliberation. These charges carry a mandatory minimum of 15 years in prison up to a maximum of life and/or a $250,000 fine. Nyuon was indicted by a federal grand jury in February 2012 on these sex trafficking charges.
“Many South Dakotans are shocked to learn that human trafficking and child prostitution exists within our borders, but the victims are here, often hiding in plain sight. We will continue working with victim advocates and law enforcement agencies to aggressively pursue these criminals who prey upon vulnerable children,” said U.S. Attorney Johnson.
In the spring of 2011, the Sioux Falls Police Department (SFPD) Street Crimes Unit began investigating a criminal organization operating in and around Sioux Falls. Witnesses identified several individuals they claimed had been selling narcotics and prostitutes, which included Emmanuel Nyuon. In January of 2012, the SFPD requested federal assistance, and a team consisting of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, the Federal Bureau of Investigation, the SFPD, and the South Dakota Division of Criminal Investigation began investigating the case.
Assistant U.S. Attorneys Kevin Koliner and Jeff Clapper prosecuted the case. A presentence investigation was ordered, and a sentencing date has not been set. The defendant was remanded to the custody of the U.S. Marshal.
Sesser Man Pleads Guilty to Firearm and Controlled Substance OffenseRead the Press Release
On April 5, 2013, Robert Olguin, a forty-seven year old Sesser, Illinois, man pled guilty in federal district court, in East St. Louis, to unlawful possession of a firearm by an unlawful user of a controlled substance, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today. Olguin is scheduled for sentencing on July 29, 2013, at which time he faces a maximum potential sentence of 10 years’ in prison and a fine of up to $250,000, not more than 3 years’ of supervised release after his prison term, and a mandatory special assessment of $100. Olguin also agreed to the forfeiture of the firearm.
Court proceedings revealed that on October 18, 2012, law enforcement officers on motorcycle patrol running radar checks along I-64 near Mascoutah, clocked a vehicle driven by Olguin at 82 mph in a 65 mph zone. An officer executed a traffic stop and smelled the odor of marijuana coming from the vehicle as he approached. The officer searched the vehicle recovering marijuana and a loaded rifle. Olguin admitted ownership of the firearm and his intent to smoke the marijuana recovered in the car.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Illinois State Police.
This case is assigned to Assistant United States Attorney Daniel T. Kapsak for prosecution.
Rosebud Man Indicted for Abusive Sexual ContactRead the Press Release
United States Attorney Brendan V. Johnson announced that a Rosebud, South Dakota man has been indicted by a federal grand jury for Abusive Sexual Contact.
Laun Leroy McCloskey, age 19, was indicted by a federal grand jury on April 2, 2013. He appeared before U.S. Magistrate Judge Mark A. Moreno on April 4, 2013 and pled not guilty to the indictment. The maximum penalty upon conviction is up to life in custody, a $250,000 fine, or both; life of supervised release; and a $100 Special Assessment. Restitution may also be ordered.
The charge is merely an accusation and McCloskey is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Federal Bureau of Investigation and Rosebud Sioux Tribe Law Enforcement Services. Assistant U.S. Attorney Timothy M. Maher is prosecuting the case.
McCloskey was remanded to the custody of the U.S. Marshal pending trial on May 14, 2013.
Reehahlio Carroll Pleads Guilty to Murdering Catholic Nun During Commission of a Burglary on the Navajo ReservationRead the Press Release
Plea Agreement Requires Forty Year Prison SentenceALBUQUERQUE – Reehahlio Carroll, 21, an enrolled member of the Navajo Nation from Navajo, N.M., pleaded guilty this morning to a second degree murder charge under an agreement that requires him to serve a 40 year federal prison sentence. Carroll’s guilty plea was announced by U.S. Attorney Kenneth J. Gonzales, Special Agent in Charge Carol K.O. Lee of the Albuquerque Division of the FBI, and John Billison, Director of the Navajo Nation Division of Public Safety.
Carroll was arrested in Nov. 2009, based on federal charges arising out of the murder of Sister Marguerite Bartz of the Order of the Sisters of the Blessed Sacrament, which is part of the Diocese of Gallup, N.M. The murder occurred on Nov. 1, 2009, during the burglary of Sister Bartz’s home on the Saint Berard Mission which is located on the Navajo Indian Reservation. Proceedings in the case were delayed by protracted competency proceedings resulting in a judicial finding that Carroll was competent to stand trial.
In announcing today’s guilty plea, U.S. Attorney Gonzales said, “No one, especially one who had dedicated her life to the service of others, should have to endure the brutal and terrifying death that Sister Marguerite Bartz suffered at the hands of Reehahlio Carroll. Although Carroll’s guilty plea cannot atone for the loss of Sister Marguerite’s life, I hope that it can bring a measure of solace to her biological family and her spiritual family as well as the community she chose to serve.”
Sister Bartz’s body was discovered in a pool of blood in the bedroom of her ransacked home, a double-wide trailer located next to the church, on the evening of Nov. 1, 2009, by a nun who was concerned about Sister Bartz’s failure to show up for mass in the Diocese’s church in Sawmill, Ariz. Today, Carroll pled guilty to a felony information charging him with the second degree murder of Sister Bartz. During his plea hearing, Carroll admitted that he killed Sister Bartz at approximately midnight on Nov. 1, 2009, after he broke into a trailer home on the grounds of the Catholic Church in Navajo for the purpose of stealing cash or items that he could readily sell for cash.
According to court records, after Carroll broke a window to gain access to Sister Bartz’s trailer, he rummaged through drawers and cabinets searching for cash and items of value that he could sell for cash or trade for drugs or alcohol. Carroll found a flashlight in a room that he used for illumination as he continued searching for items to steal. When Carroll encountered Sister Bartz in one of the bedrooms and she attempted to defend herself by hitting him with a slipper, he brutally murdered her by beating her repeatedly with a flashlight and then, in an attempt to silence her, strangling her with a t-shirt. The pathologist who performed the autopsy concluded that the cause of death was multiple blunt force head trauma and ligature strangulation.
Carroll was arrested on tribal charges on Nov. 5, 2009, after law enforcement officers learned that he had been observed driving a car that was reported stolen from the Mission’s grounds. Following his arrest, Carroll provided a detailed confession in which he admitted murdering Sister Bartz while burglarizing her home. Carroll remained in tribal custody until he was arrested on federal charges on Nov. 10, 2009. Carroll remains detained pending his sentencing hearing, which has yet to be scheduled.
“The successful investigation and prosecution of this crime would not have been possible without the hard work and collaborative efforts of the Albuquerque FBI and our law enforcement partners,” said FBI Special Agent in Charge Lee. “Outstanding detective work by FBI Special Agents, the FBI's Evidence Response Team, Navajo Nation Tribal Authorities and the New Mexico State Police resulted in a solid case against the defendant. We hope this guilty plea brings some closure to the victim's family, which endured a great deal of personal grief as a result of this senseless crime. The FBI takes its role in protecting tribal communities seriously. We will continue to work closely with our tribal partners and the U.S. Attorney's Office to ensure the safety and security of the reservations and pueblos in New Mexico.”
“Sister Marguerite Bartz spent the last decade of her life serving the Navajo people, and her death was a tremendous loss to the community she loved and served as a teacher, companion, spiritual advisor and advocate,” said Director Billison of the Navajo Nation Division of Public Safety. “I commend the tribal officers and criminal investigators who worked with the FBI to investigate this heinous crime and who are dedicated to ensuring the safety and welfare of the Navajo people.”
This case was investigated by the Gallup office of the FBI and the Crownpoint office of the Navajo Nation Division of Public Safety, with assistance from the New Mexico State Police. Assistant U.S. Attorneys Presiliano A. Torrez and Paul H. Spiers are prosecuting the case.
Real Estate Developer, Entrepreneur Convicted of Wire FraudRead the Press Release
BOSTON - A Weston real estate developer and entrepreneur, who was apprehended in Cyprus nearly eight months after he was indicted on federal criminal charges, was convicted yesterday of wire fraud in connection with his defrauding several individuals in 2008.
After a jury trial, Paul John McMann, 54, was convicted of three counts of wire fraud. United States District Judge Rya W. Zobel scheduled sentencing for June 27, 2013.
In October and November of 2008, McMann purchased various fraudulent bank documents, including “Proof of Funds” letters on Bank of America and Wachovia Bank letterhead purporting to show that McMann and his company, Commonwealth Albanian Hydro Ventures, Inc. (CAHV), held accounts in those banks containing large sums of money. McMann used these and other fraudulent documents, including a phony letter of credit purporting to come from Wachovia Bank, as part of fraudulent scheme to obtain money and other consideration from various individuals in the Boston area and elsewhere. Specifically, McMann utilized the fraudulent documents to secure at least $450,000 in loans, as well as to convince a creditor to whom McMann owed over $1.6 million, to hold off on foreclosing on various properties McMann had developed.
The indictment was returned on November 10, 2010, but McMann, after being informed by the United States Secret Service of the pending charges against him, remained at-large, outside the United States, until he was detained on July 10, 2011, in Cyprus. He has been held pending trial.
The statutory maximum penalty is up to 20 years in prison to be followed by three years of supervised release and a fine of up to $250,000 or twice the amount of loss inflicted by his fraud, whichever is greater, on each count of wire fraud.
United States Attorney Carmen M. Ortiz, Steven Ricciardi, Special Agent in Charge of the United States Secret Service, Richard DesLauriers, Special Agent in Charge of the Federal Bureau of Investigation - Boston Field Division and United States Marshal John Gibbons made the announcement today. The case is being prosecuted by Assistant U.S. Attorneys Vassili Thomadakis and Ryan M. DiSantis of Ortiz’s Economic Crimes Unit.
Individuals who believe that they may have been a victim of McMann, should contact the United States Attorney’s Office at: [email protected].
Reading Woman Gets 342 Months for Drug-Debt KidnappingRead the Press Release
PHILADELPHIA - Grace Marie Perez-Jimenez, 27, of Reading, PA, was sentenced today to 28.5 years in prison for kidnapping a 14 year-old child for ransom over a drug debt. In 2011, Perez sold "crack" cocaine to a Reading resident. On November 3, 2011, after the drug customer failed to pay her $500, Perez abducted the customer's 14-year old child, as the child walked home from school in Reading, Pennsylvania. Inside the car, Perez physically assaulted the 14-year old victim, threatening to kill the child by saying, for example, “you see this right here (referring to the gun), if I don't get my money you may not be going home to mom.” The victim was then blindfolded and handcuffed to a chair. Reading Police assisted the kidnapping victim's mother to arrange a ransom drop. Perez's co-defendant, Samantha Conrad, was captured on a video recording retrieving the first drop of pre-recorded ransom money. After the first $500 ransom payment, Perez drove to Philadelphia, along with the minor child, in Perez's gold Mitsubishi and used the $500 to buy "PCP" to later sell in Reading. Perez demanded more money and a second ransom drop was placed in the mailbox of Perez's mother.
Finally, after the second ransom payment and hours of psychological torture, the child was released with the threat that Perez would kill the 14 year old victim and the family if anyone was told the identity of the kidnappers. Perez pleaded guilty on July 12, 2012 to conspiracy to kidnap, kidnapping, conspiracy to distribute phencyclidine ("PCP"), possession with intent to distribute phencyclidine ("PCP"), collection of extension of credit by extortionate means, possession of a firearm in furtherance of a crime of violence, and one count of possession of a firearm by a convicted felon.
In addition to the prison term, U.S. District Court Judge James Knoll Gardner ordered Perez to pay a $5,000 fine, a $700 special assessment, and ordered five years of supervised release.
This case was investigated by the Federal Bureau of Investigation, the Reading Police Department, and the Berks County District Attorney's Office. It was prosecuted by Assistant U.S. Attorney Jessica Natali.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Raleigh Drug Dealer SentencedRead the Press Release
Raleigh - United States Attorney Thomas G. Walker announced that in federal court yesterday United States District Judge Louise W. Flanagan sentenced DARRIN HOWARD MERRITT, 48, of Raleigh,North Carolina, to 151 months imprisonment followed by 3 years supervised release.
A Federal Grand Jury returned a Criminal Indictment on June 20, 2012, charging MERRITT with violations of federal narcotics laws. MERRITT entered a guilty plea on September 11, 2012, to distributing a quantity of crack cocaine.
According to evidence presented in Court, on May 31 and June 9, 2011, MERRITT distributed crack cocaine in Raleigh, North Carolina. Upon further investigation, it was learned that MERRITT was responsible for possessing and selling over 102 grams of cocaine and 10 grams of crack cocaine.
Investigation of this case was conducted by the Raleigh-Durham Safe Streets Taskforce. Members of the Raleigh-Durham Safe Streets Taskforce include: Federal Bureau of Investigation, Raleigh Police Department, NC Alcohol Law Enforcement, NC Highway Patrol, Durham Police Department, Durham County Sheriff’s Office, Cary Police Department, Garner Police Department, and NC Department of Probation and Parole.
The federal prosecution was handled by Special Assistant United States Attorney Shawn Evans and Assistant United States Attorney Denise Walker. Mr. Evans is a prosecutor with the Wake County District Attorney’s Office. Wake County District Attorney Colon Willoughby has assigned Mr. Evans to the United States Attorney’s Office to prosecute federal Organized Crime Drug Enforcement Task Force criminal matters. His assignment to the United States Attorney’s Office has been made possible by grants funded by the Governor’s Crime Commission.
Pawtucket Man Sentenced to 14 Years in Federal Prison for Trafficking Heroin from VenezuelaRead the Press Release
PROVIDENCE, R.I. – Carlos Gonzalez, 42, of Pawtucket, R.I., was sentenced today to 168 months in federal prison for possession with the intent to distribute one kilo or more of heroin, announced United States Attorney Peter F. Neronha. Gonzalez was arrested by federal agents in January 2012, shortly after he accepted delivery of a parcel which had contained a large quantity of heroin stashed inside a pair of flat screened monitors shipped from Venezuela to his Pawtucket residence.At sentencing, U.S. District Court Judge William E. Smith also ordered Gonzalez to serve five years of supervised release upon completion of his prison term. Gonzalez pleaded guilty on August 30, 2012, to possession with the intent to distribute one kilogram or more of heroin.
According to information presented to the court, on January 20, 2012, Customs and Border Protection (CBP) agents in Miami selected the parcel for intensive exam based on anomalies observed when x-rayed. A certified drug dog also alerted to the package. Agents opened the package and discovered two flat screen monitors which emitted a strong chemical odor. One of the monitors was opened to reveal a light brown substance which field tested positive for heroin.
The parcel was re-packaged to its original state for a possible controlled delivery to Gonzalez at his Pawtucket residence. CBP agents forwarded the parcel to Homeland Security Investigations agents in Rhode Island who removed the heroin from the package and replaced it with a representative sample of heroin.
According to information presented to the court, on January 26, 2012, an undercover U.S. Postal Inspection Service agent delivered the parcel to Gonzalez at his residence. Gonzalez acknowledged to the agent that he was expecting the package, then signed for it and accepted delivery. A short time later, as he attempted to drive away from the area, Gonzalez was detained in a traffic stop and was returned to the apartment by uniformed Rhode Island State Troopers. He was not in possession of the subject parcel when he was stopped. After Gonzalez was returned to his residence, agents searched the apartment and recovered the package containing the flat screen monitors.
The suspect heroin was tested at the DEA Regional Laboratory in New York. It tested positive for 1.322 kilograms of heroin.The case was prosecuted by Assistant U.S. Attorney Gerard B. Sullivan.
Contact: 401-709-5357
[email protected]Pamlico County Drug Trafficker Sentenced in Operation “NO QUARTER”Read the Press Release
NEW BERN - United States Attorney Thomas G. Walker announced that in federal court today United States District Judge Louise W. Flanagan sentenced KEVIN CORNELIOUS DAVIS, 44, of Bayboro, North Carolina to 131 months imprisonment followed by 5 years supervised release. DAVIS was also ordered to pay a $5000 fine.
DAVIS was arrested on July 4, 2011, after more than 12 kilograms of cocaine being transported from Arizona were seized in Pamlico County. DAVIS was one of the intended recipients of the cocaine. The investigation revealed that from 2006 until his arrest, DAVIS was responsible for distributing approximately 83 kilograms of cocaine. DAVIS was subject to an enhanced sentence based on his status as a career offender.
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, $1.5 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 prosecution was handled by Special Assistant United States Attorney Glenn Perry. Mr. Perry is a prosecutor with the Pitt County District Attorney's Office. District Attorney Kimberly Robb has assigned Mr. Perry to the United States Attorney's Office to prosecute federal Organized Crime Drug Enforcement Task Force criminal matters. His assignment to the United States Attorney's Office has been made possible by grants funded by the Governor's Crime Commission.
Oxford Man Sentenced to Eight Years in Prison for Illegal Gun PossessionRead the Press Release
Joseph White, 46, of Oxford, Pennsylvania was sentenced today to eight years in prison by the Honorable Stewart Dalzell for possession of a firearm by a convicted felon. During the evening of April 12, 2012, Pennsylvania State Police were called to White’s home in Oxford for a domestic disturbance. Prior to this date, White was convicted in Pennsylvania on several felony charges including drug trafficking and receiving stolen property. When the troopers arrived that night, they found White in possession of a loaded .44 caliber revolver and a loaded shotgun and placed White under arrest. The troopers later returned to his home with a search warrant and seized 91 additional firearms, including a machine gun, a sawed-off shotgun, parts to a rocket launcher, and a large quantity of ammunition. White pleaded guilty January 7, 2013.
In addition to the prison term, White was ordered to pay a $1,500 fine, a $100 special assessment, and was ordered to complete three years of supervised release.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Pennsylvania State Police. It was prosecuted by Assistant United States Attorney Robert J. Livermore.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Narcotics Trafficker Sentenced to More Than 11 Years in Federal PrisonRead the Press Release
David B. Fein, United States Attorney for the District of Connecticut, today announced that ADRIAN PINZON-GALLARDO, also known as “The Mexican,” 27, a citizen of Mexico last residing in Bloomfield, Conn., was sentenced yesterday by United States District Judge Vanessa L. Bryant in Hartford to 135 months of imprisonment, followed by five years of supervised release, for trafficking heroin and cocaine. PINZON-GALLARDO also was ordered to pay a $50,000 fine.
According to court documents and statements made in court, in early 2011, the Drug Enforcement Administration in New Haven received information from the Connecticut State Police that an individual was selling substantial quantities of heroin from a residence at 28 Maltby Place in New Haven. Following a series of controlled purchases of heroin from that individual, the DEA New Haven Task Force initiated a court-authorized wiretap investigation. During the course of the wiretap investigation, it was determined that PINZON-GALLARDO was supplying large quantities of heroin and cocaine to several individuals in Connecticut, including drug distributors in New Haven.
On September 2, 2011, DEA personnel from both New Haven and Providence, R.I.., with the assistance of the Connecticut State Police, tracked PINZON-GALLARDO’s vehicle as it traveled from Connecticut to Providence where it was believed from wire intercepts that PINZON-GALLARDO intended to conduct a narcotics transaction. In Providence, the surveillance team observed PINZON-GALLARDO and an associate meet and then travel to a storage facility in Pawtucket, R.I. At the facility, PINZON-GALLARDO and his associate entered an open storage unit with several other individuals and closed the door. A short time later, PINZON-GALLARDO’s associate returned to the vehicle, retrieved a black backpack and walked back to the storage unit. PINZON-GALLARDO and his associate then returned to their vehicle and departed. After driving to Boston, PINZON-GALLARDO and his associate drove a circuitous route back to Connecticut when their vehicle was stopped by Connecticut State Police on Interstate 84 after it crossed the Connecticut border. A search of the car revealed three bricks of heroin, weighing a total of approximately 736 grams of heroin, and approximately $14,000 in cash.
A subsequent search of the storage unit in Rhode Island revealed approximately eight kilograms of heroin, including three kilograms that were contained within a black backpack similar to the one that PINZON-GALLARDO’s associate had been seen carrying into the facility, approximately two kilograms of cocaine and approximately $35,000 in cash.
U.S. Attorney Fein noted that one kilogram of heroin can produce approximately 50,000 single-dosage unit bags of heroin.
PINZON GALLARDO has been detained since his arrest on September 2, 2011. On October 5, 2012, he pleaded guilty to one count of conspiracy to distribute, and to possess with intent to distribute, one kilogram or more of heroin.
This matter has been investigated by the DEA New Haven Task Force, which includes participants from the New Haven, Meriden, Hamden, West Haven, Branford and Ansonia Police Departments, and the United States Marshals Service. The New Britain Police Department substantially assisted the investigation.
This case is being prosecuted by Assistant United States Attorney S. Dave Vatti.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
[email protected]Mission Man Pleads Guilty to Assaulting A Federal OfficerRead the Press Release
United States Attorney Brendan V. Johnson announced that Grover Brave, age 33, of Mission, South Dakota appeared before U.S. Magistrate Judge Mark A. Moreno on April 2, 2013 and pled guilty to Assaulting a Federal Officer. The maximum penalty upon conviction is 1 year in custody, a $100,000 fine, or both; 1 year of supervised release; and a $25 special assessment.
The conviction stems from an incident that took place on January 15, 2013, when Brave struggled with officers while being escorted to a holding cell and attempted to head butt the officer.
The investigation was conducted by the Rosebud Sioux Tribe Law Enforcement Services. The case is being prosecuted by Assistant U.S. Attorney Marie H. Ruettgers.
A presentence investigation was ordered and a sentencing date was set for June 21, 2013. The defendant was released from custody pending sentencing.
Middlesex County, N.J., Man Sentenced to 60 Months in Prison for Distributing Videos of Child Sexual AbuseRead the Press Release
TRENTON, N.J. – A Middlesex County, N.J., man was sentenced today to 60 months in prison for distributing images and videos of child sexual abuse over the Internet, U.S. Attorney Paul J. Fishman announced.
Jacob Rios, 25, of Old Bridge Township, N.J., previously pleaded guilty before U.S. District Judge Peter G. Sheridan to an Information charging him with one count of distribution of child pornography. Judge Sheridan imposed the sentence today in Trenton federal court.According to documents filed in this case and statements made in court:
Rios admitted distributing child pornography between March 3, 2011, and July 11, 2011, using a peer-to-peer network. Rios created accounts on the network through which he downloaded pictures and videos of child pornography. He placed those pictures and videos into the shared directory of his peer-to-peer accounts and shared them with other users.
In addition to the prison term, Judge Sheridan sentenced Rios to 10 years of supervised release. Rios agreed to forfeit the laptop and hard drives that he used to commit the offense. He must also register as a sex offender.
U.S. Attorney Fishman credited special agents of the FBI’s Cyber Crimes Squad, under the direction of Acting Special Agent in Charge David Velazquez in Newark, for the investigation leading to today’s sentence.
The government is represented by Assistant U.S. Attorney Rahul Agarwal of the U.S. Attorney’s Office General Crimes Unit in Newark.13-156
Defense counsel: Darren M. Gelber Esq., Woodbridge, N.J.Miami-Based Health Care Clinic and Its Owners and Operators Sentenced for $50 Million Fraud SchemeRead the Press Release
The owners and operators of Biscayne Milieu, a Miami-based mental-health clinic, and the clinic itself were sentenced today for their participation in a Medicare fraud scheme involving the submission of more than $50 million in fraudulent billings to Medicare, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; Michael B. Steinbach, Special Agent in Charge of the FBI’s Miami Field Office; and Special Agent in Charge Christopher B. Dennis of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Office of Investigations Miami Office.
Antonio Macli, 73, Jorge Macli, 41 and Sandra Huarte, 49, all of Miami, and Biscayne Milieu were sentenced by U.S. District Judge Robert N. Scola Jr. in the Southern District of Florida. Antonio Macli was sentenced to serve 360 months in prison; Jorge Macli was sentenced to serve 300 months in prison; and Huarte was sentenced to serve 262 months in prison. In addition, Biscayne Milieu, the corporate entity these defendants controlled, was sentenced to one year of probation. In addition to their prison terms, Antonio Macli, Jorge Macli and Huarte were each sentenced to serve three years of supervised release. Restitution payments for each of the defendants will be determined on April 25, 2013.
The defendants were each convicted on Aug. 24, 2012, of conspiracy to commit health care fraud, at least one substantive count of health care fraud, and conspiracy to offer and pay kickbacks following a two-month jury trial. Antonio and Jorge Macli and Huarte were also each convicted of conspiracy to commit money laundering and substantive money laundering counts at trial.
According to the evidence at trial, Biscayne Milieu was a closely held, family-run fraudulent clinic that was owned by Antonio Macli and his son Jorge Macli. Antonio Macli’s daughter Sandra Huarte was an executive at the clinic. Together the defendants created and oversaw a scheme in which they, along with their co-defendants, submitted over $50 million in false and fraudulent claims to Medicare through Biscayne Milieu, which purportedly operated a partial hospitalization program (PHP) – a form of intensive treatment for severe mental illness. Instead, the defendants devised a scheme in which they paid patient recruiters to refer ineligible Medicare beneficiaries to Biscayne Milieu for services that were never provided or that were not reimbursable under applicable Medicare rules. Many of the patients admitted to Biscayne Milieu that they were not eligible for PHP treatment because they were chronic substance abusers, suffered from dementia and would not benefit from group therapy, or were not mentally ill and were procuring false diagnoses of mental illness in order to obtain exemptions from the civics portion of the U.S. citizenship application.
The evidence at trial further showed that Antonio and Jorge Macli and Huarte collectively paid patient recruiters more than $1 million in illegal kickbacks to recruit Medicare patients who were ineligible for PHP treatment. Biscayne Milieu then billed Medicare for tens of millions of dollars in PHP treatments for these patients. Antonio and Jorge Macli and Huarte also hired doctors, therapists and other health care professionals to further their massive illegal scheme. Along with co-conspirators working at their direction, they created falsified medical records intended to conceal their Medicare fraud and phony “case manger” contracts in an attempt to hide their extensive illegal kickbacks.
Antonio Macli was the initiator of the fraud scheme, enlisted his son and daughter to participate in it and had primary control over the clinic’s bank accounts that received money stolen from Medicare that was then used to pay illegal kickbacks.
Jorge Macli was most responsible for the clinic’s day-to-day operations and took steps, on a daily basis, to conceal and further the fraud, including deflecting complaints from patients and staff and paying bribes to patients in exchange for their silence.
Huarte oversaw both the kickback payments and the Medicare billings for the clinic. Huarte ensured that Biscayne Milieu’s fraudulent claims could pass scrutiny by Medicare by creating fraudulent paperwork and medical files, and soliciting other employees to do the same, so that these false claims were paid.
Evidence further revealed that Antonio and Jorge Macli and Sandra Huarte engaged in a sophisticated scheme to use a series of ostensibly legitimate corporations to conceal and launder Biscayne Milieu’s fraudulent profits.
Various owners, doctors, managers, therapists, patient brokers and other employees of Biscayne Milieu have also been charged with various health care fraud, kickback, money laundering and other offenses in two indictments unsealed in September 2011 and May 2012. Biscayne Milieu, its owners, and more than 25 of the individual defendants charged in these cases have pleaded guilty or have been convicted at trial.
The case is being prosecuted by Assistant U.S. Attorneys for the Southern District of Florida Michael Davis, Marlene Rodriguez and James V. Hayes. Hayes was formerly a Trial Attorney in the Criminal Division’s Fraud Section. The case was investigated by the FBI with the assistance of HHS-OIG, and was brought by the U.S. Attorney’s Office for the Southern District of Florida in coordination with the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,480 defendants who have collectively billed the Medicare program for more than $4.8 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to www.stopmedicarefraud.gov.
Miami-Based Health Care Clinic and Its Owners and Operators Sentenced for $50 Million Fraud SchemeRead the Press Release
The owners and operators of Biscayne Milieu, a Miami-based mental-health clinic, and the clinic itself were sentenced today for their participation in a Medicare fraud scheme involving the submission of more than $50 million in fraudulent billings to Medicare, announced U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; Michael B. Steinbach, Special Agent in Charge of the FBI’s Miami Field Office; and Special Agent in Charge Christopher B. Dennis of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Office of Investigations Miami Office.
Antonio Macli, 73, Jorge Macli, 41 and Sandra Huarte, 49, all of Miami, and Biscayne Milieu were sentenced by U.S. District Judge Robert N. Scola Jr. in the Southern District of Florida. Antonio Macli was sentenced to serve 360 months in prison; Jorge Macli was sentenced to serve 300 months in prison; and Huarte was sentenced to serve 262 months in prison. In addition, Biscayne Milieu, the corporate entity these defendants controlled, was sentenced to one year of probation. In addition to their prison terms, Antonio Macli, Jorge Macli and Huarte were each sentenced to serve three years of supervised release. Restitution payments for each of the defendants will be determined on April 25, 2013.
The defendants were each convicted on Aug. 24, 2012, of conspiracy to commit health care fraud, at least one substantive count of health care fraud, and conspiracy to offer and pay kickbacks following a two-month jury trial. Antonio and Jorge Macli and Huarte were also each convicted of conspiracy to commit money laundering and substantive money laundering counts at trial.
According to the evidence at trial, Biscayne Milieu was a closely held, family-run fraudulent clinic that was owned by Antonio Macli and his son Jorge Macli. Antonio Macli’s daughter Sandra Huarte was an executive at the clinic. Together the defendants created and oversaw a scheme in which they, along with their co-defendants, submitted over $50 million in false and fraudulent claims to Medicare through Biscayne Milieu, which purportedly operated a partial hospitalization program (PHP) – a form of intensive treatment for severe mental illness. Instead, the defendants devised a scheme in which they paid patient recruiters to refer ineligible Medicare beneficiaries to Biscayne Milieu for services that were never provided or that were not reimbursable under applicable Medicare rules. Many of the patients admitted to Biscayne Milieu that they were not eligible for PHP treatment because they were chronic substance abusers, suffered from dementia and would not benefit from group therapy, or were not mentally ill and were procuring false diagnoses of mental illness in order to obtain exemptions from the civics portion of the U.S. citizenship application.
The evidence at trial further showed that Antonio and Jorge Macli and Huarte collectively paid patient recruiters more than $1 million in illegal kickbacks to recruit Medicare patients who were ineligible for PHP treatment. Biscayne Milieu then billed Medicare for tens of millions of dollars in PHP treatments for these patients. Antonio and Jorge Macli and Huarte also hired doctors, therapists and other health care professionals to further their massive illegal scheme. Along with co-conspirators working at their direction, they created falsified medical records intended to conceal their Medicare fraud and phony “case manger” contracts in an attempt to hide their extensive illegal kickbacks.
Antonio Macli was the initiator of the fraud scheme, enlisted his son and daughter to participate in it and had primary control over the clinic’s bank accounts that received money stolen from Medicare that was then used to pay illegal kickbacks.
Jorge Macli was most responsible for the clinic’s day-to-day operations and took steps, on a daily basis, to conceal and further the fraud, including deflecting complaints from patients and staff and paying bribes to patients in exchange for their silence.
Huarte oversaw both the kickback payments and the Medicare billings for the clinic. Huarte ensured that Biscayne Milieu’s fraudulent claims could pass scrutiny by Medicare by creating fraudulent paperwork and medical files, and soliciting other employees to do the same, so that these false claims were paid.
Evidence further revealed that Antonio and Jorge Macli and Sandra Huarte engaged in a sophisticated scheme to use a series of ostensibly legitimate corporations to conceal and launder Biscayne Milieu’s fraudulent profits.
Various owners, doctors, managers, therapists, patient brokers and other employees of Biscayne Milieu have also been charged with various health care fraud, kickback, money laundering and other offenses in two indictments unsealed in September 2011 and May 2012. Biscayne Milieu, its owners, and more than 25 of the individual defendants charged in these cases have pleaded guilty or have been convicted at trial.
The case is being prosecuted by Assistant U.S. Attorneys for the Southern District of Florida Michael Davis, Marlene Rodriguez and James V. Hayes. Hayes was formerly a Trial Attorney in the Criminal Division’s Fraud Section. The case was investigated by the FBI with the assistance of HHS-OIG, and was brought by the U.S. Attorney’s Office for the Southern District of Florida in coordination with the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,480 defendants who have collectively billed the Medicare program for more than $4.8 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to www.stopmedicarefraud.gov.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Manhattan U.S. Attorney Announces Arrests of Drug Kingpin Jose Americo Bubo Na Tchuto, the Former Head of the Guinea-Bissau Navy, and Six Others for Narcotics Trafficking OffensesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Michele M. Leonhart, the Administrator of the United States Drug Enforcement Administration (“DEA”) announced that five defendants – JOSE AMERICO BUBO NA TCHUTO, the former head of the Guinea-Bissau navy; MANUEL MAMADI MANE; SALIU SISSE; PAPIS DJEME; and TCHAMY YALA – arrived in the Southern District of New York on April 4, 2013. In a related action, RAFAEL ANTONIO GARAVITO-GARCIA and GUSTAVO PEREZ-GARCIA, both Colombian nationals, were arrested in Colombia today pursuant to Interpol Red Notices. MANE, SISSE, GARAVITO-GARCIA, and PEREZ-GARCIA are charged with conspiring to engage in narco-terrorism; conspiring to import narcotics into the United States; and conspiring to provide aid to the Fuerzas Armadas Revolucionarios de Colombia (the “FARC”), a South American paramilitary group long designated by the United States as a Foreign Terrorist Organization (“FTO”), by storing FARC-owned cocaine in West Africa. MANE, SISSE, and GARAVITO-GARCIA are also charged with conspiring to sell weapons, including surface-to-air missiles, to be used to protect FARC cocaine processing operations in Colombia against U.S. military forces. NA TCHUTO, DJEME, and YALA face charges of conspiring to import narcotics into the United States. NA TCHUTO has been designated a drug kingpin by the U.S. Treasury Department. The five defendants in New York were presented in U.S. Magistrate Court today.
On April 4, 2013, the Drug Enforcement Administration’s (DEA) Special Operations Division (SOD), Bilateral Investigative Unit (BIU) Narco-Terrorism Group (NTG), working in conjunction with the DEA Lisbon Country Office and the DEA Bogota Country Office concluded a long-standing undercover operation conducted in Guinea-Bissau and elsewhere. The operation consisted of two separate undercover investigations. During the first part of the operation, NA TCHUTO, DJEME, and YALA were arrested on April 2 by the DEA Foreign-deployed Advisory Support Team (FAST) and the NTG off the coast of West Africa while onboard a vessel under DEA control in international waters. During the second part of the operation, MANE and SISSE were apprehended on April 4 in a West African Country and transferred thereafter to the custody of the United States. NA TCHUTO, DJEME, YALA, MANE, and SISSE were transported to New York for prosecution. GARAVITO-GARCIA and PEREZ-GARCIA remain in Colombia pending extradition to the United States.
Manhattan U.S. Attorney Preet Bharara said: “The narco-terrorism conspiracy alleged in these indictments shows the danger that can grow unchecked in far away places where unfortunate circumstances can allow narcotics traffickers and terrorism supporters to transact unseen at great risk to the United States and its interests. The link between narcotics traffickers and terrorists, their financers and supporters, needs to be broken wherever it is found. But thanks to the extraordinary efforts of our DEA partners, who have for years attacked the narco-terrorism threat, this conspiracy was thwarted and we can claim yet another victory in our unrelenting campaign against those who would harm Americans and American interests abroad.”
DEA Administrator Michele Leonhart said: “These DEA arrests are significant victories against terrorism and international drug trafficking. Alleged narco-terrorists such as these, who traffic drugs in West Africa and elsewhere, are some of the world’s most violent and brutal criminals. They have no respect for borders, and no regard for either the rule of law or who they harm as a result of their criminal endeavors. These cases further illustrate frightening links between global drug trafficking and the financing of terror networks. Thanks to the skilled work and bravery of our agents and law enforcement partners, these criminals will face accountability in a U.S. court for their heinous deeds.”
According to the Indictments against MANE, SISSE, GARAVITO-GARCIA, and PEREZ-GARCIA unsealed today:
Beginning in the summer of 2012, the defendants communicated with confidential sources (the “CSs”) working with the DEA who purported to be representatives and/or associates of the FARC. The communications occurred by telephone, over e-mail, and in a series of audio-recorded and videotaped meetings over several months in Guinea-Bissau.
During meetings in Guinea-Bissau beginning in June 2012, and continuing through at least mid-November 2012, MANE, SISSE, GARAVITO-GARCIA, and PEREZ-GARCIA agreed to receive and store multi-ton shipments of FARC-owned cocaine in Guinea-Bissau. The defendants agreed to receive the cocaine off the coast of Guinea-Bissau, and to store the cocaine in storage houses there pending its eventual shipment to the United States, where it would be sold for the financial benefit of the FARC. The defendants further agreed that a portion of the cocaine would be used to pay Guinea-Bissau government officials for providing safe passage for the cocaine through Guinea-Bissau.
Also during those meetings, MANE, SISSE, and GARAVITO-GARCIA agreed to arrange to purchase weapons for the FARC, including surface-to-air missiles, by importing them into Guinea-Bissau for the nominal use of the Guinea-Bissau military.
For example, on June 30, 2012, during a recorded meeting in Guinea Bissau with the CSs, MANE, SISSE, and GARAVITO-GARCIA agreed to assist in the distribution of FARC cocaine by facilitating the shipment of cocaine to Guinea Bissau inside loads of military uniforms, and by establishing a front company in Guinea Bissau to export the cocaine from Guinea Bissau to the United States. In addition, MANE agreed to assist in obtaining weapons for the FARC. On or about July 3, 2012, during another recorded meeting in Guinea Bissau, MANE, SISSE, and GARAVITO-GARCIA met with the Confidential Sources and a Guinea Bissau military representative and discussed the benefits of using Guinea Bissau as a transshipment point for cocaine obtained in South America and destined for the United States, the process for offloading the cocaine once it arrived in Guinea Bissau, and the nature of the weapons to be supplied to the FARC to combat American forces in Colombia, including surface-to-air missiles and AK-47 assault rifles with grenade launchers.
On August 31, 2012, during a recorded meeting in Bogota, Colombia, GARAVITO-GARCIA and PEREZ-GARCIA agreed to facilitate the receipt of approximately 4,000 kilograms of cocaine from the FARC in Guinea Bissau, approximately 500 kilograms of which would later be sent to customers in the United States and Canada. During a recorded meeting in Guinea Bissau with MANE and SISSE that took place on November 13, 2012, a Guinea Bissau military official advised one of the CSs that the weapons transaction could be executed once the FARC brought money to Guinea Bissau and that the anti-aircraft missiles to be sold to the FARC could be used against United States helicopters operating in Colombia.
According to the Indictment against NA TCHUTO, DJEME, and YALA also unsealed today:
Beginning in the summer of 2012, the three defendants engaged in a series of recorded meetings in Guinea-Bissau with confidential sources (the “CSs”) working with the DEA who purported to be representatives and/or associates of South American-based narcotics traffickers.
In an early meeting in which the defendants discussed the shipment of ton-quantities of cocaine from South America to Guinea Bissau by sea, NA TCHUTO noted that the Guinea Bissau government was weak in light of the recent coup d’etat and that it was therefore a good time for the proposed cocaine transaction. In further meetings, NA TCHUTO, DJEME, and YALA agreed to assist the CSs by receiving a two-ton load of cocaine that would be transported to Guinea-Bissau by boat and stored in a warehouse for distribution to Europe and the United States. For example, on November 17, 2012, NA TCHUTO, DJEME, and YALA met with two of the CSs in Guinea- Bissau and discussed importing 1,000 kilograms of cocaine into the United States. Also during the meeting, NA TCHUTO offered to utilize a company that NA TCHUTO owned to facilitate the shipment of cocaine out of Guinea-Bissau. In a previous meeting, NA TCHUTO stated that his fee would be $1,000,000 per 1,000 kilograms of cocaine received in Guinea Bissau.
MANE, SISSE, GARAVITO-GARCIA, and PEREZ-GARCIA have each been charged with one count of conspiracy to engage in narco-terrorism (Count One), one count of conspiracy to distribute five kilograms or more of cocaine, knowing or intending that the cocaine would be imported into the United States (Count Two), and one count of conspiracy to provide material support and resources to an FTO (Count Three). MANE, SISSE and GARAVITO-GARCIA are also charged with one count of conspiracy to acquire and transfer anti-aircraft missiles (Count Four). Counts One, Two, and Four each carry a maximum potential penalty of life in prison, and Count Three carries a maximum potential penalty of 15 years in prison. MANE and SISSE are next scheduled to appear before U.S. District Judge Jed Rakoff on April 9, 2013 at 11:30 a.m.
NA TCHUTO, DJEME, and YALA have each been charged with one count of conspiring to distribute five kilograms or more of cocaine, knowing or intending that the cocaine would be imported into the United States. The charge carries a maximum potential sentence of life in prison. NA TCHUTO, DJEME, and YALA are next scheduled to appear before U.S. District Judge Richard Berman on April 15, 2013 at 11:00 a.m.
The arrests and transfers of the defendants were the result of the close cooperative efforts of the United States Attorney’s Office for the Southern District of New York, DEA’s SOD and FAST, the DEA Lisbon Country Office, the DEA Bogota Country Office, the U.S. Department of Justice Office of International Affairs, and the U.S. State Department.
This prosecution is being handled by the Office's Terrorism and International Narcotics Unit. Assistant United States Attorneys Aimee Hector and Glen Kopp are in charge of the prosecution.
The charges contained in the Indictments are merely accusations and the defendants are presumed innocent unless and until proven guilty.
U.S. v. Na Tchuto et al Indictment
U.S. v. Mane and Sisse Indictment
U.S. v. Garavito-Garcia and Perez-Garcia IndictmentManhattan U.S. Attorney and FBI Assistant Director-In-Charge Announce Charges Against Gambino Crime Family Associate for His Alleged Participation in 1990 Murder of Suspected InformantRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and George Venizelos, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of an Indictment charging DANIEL FAMA, an alleged Associate of the Gambino Organized Crime Family of La Cosa Nostra (the “Gambino Organized Crime Family”), with the 1990 murder of a suspected informant, Eddie Garofalo. FAMA was taken into custody yesterday, and was presented and arraigned in Manhattan federal court this afternoon before United States Magistrate Judge Kevin Nathaniel Fox. U.S. District Judge Andrew L. Carter, Jr. has been assigned to this case.
Manhattan U.S. Attorney Preet Bharara said: “More than two decades since Daniel Fama allegedly killed a suspected government informant, he has finally been arrested. Any attack against someone working with, or suspected of working with, law enforcement will be strongly answered, and no matter how long it takes we will bring alleged criminals to justice.”
FBI Assistant Director-in-Charge George Venizelos said: “The charges announced today allege once again that mob families are willing to commit murder to enforce the oath of Omerta. A person suspected of cooperation was gunned down at his doorstep to silence him. The charges also demonstrate the resolve of agents and prosecutors to fulfill their oath to enforce the law and see justice done.”
According to the allegations in the Indictment unsealed today in Manhattan federal court and other court documents:
The Gambino Organized Crime Family is a criminal organization whose members and associates engaged in numerous acts of violence, including murder. The head of the family is known as the “Boss,” and he is typically assisted by an “Underboss.” At all times relevant to the charges in the Indictment, John Gotti, Sr., was the Boss and Salvatore Gravano, a/k/a “Sammy the Bull,” was the Underboss of the Gambino Organized Crime Family.
The Gambino Organized Crime Family operates through groups of individuals known as “crews” and “regimes.” Each crew consists of “made” members, sometimes known as “Soldiers,” “wiseguys,” “friends of ours,” and “good fellows.” Soldiers are aided in their criminal endeavors by other trusted individuals, known as “Associates,” who sometimes are referred to as “connected” or identified as “with” a Soldier. Associates participate in the various activities of the crew and its members.
In 1990, Gravano ordered Associate FAMA and others to murder Eddie Garofalo for, among other things, purportedly cooperating with a law enforcement investigation into the Gambino Organized Crime Family. On August 8, 1990, FAMA and others shot and killed the Garofalo in front of his Brooklyn, New York, home.
FAMA, 48, of Staten Island, New York, is charged with killing a person with the intent to prevent that person from communicating to a law enforcement officer information related to the commission of a federal offense. The charge carries a mandatory term of life in prison.
Mr. Bharara praised the investigative work of the FBI.
The prosecution is being handled by the Office’s Organized Crime Unit. Assistant United States Attorneys Harris Fischman and Jason Masimore are in charge of the prosecution.
The charges contained in the Indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
U.S. v. Daniel Fama, et al. Indictment
Man with Domestic Violence Conviction Sentenced to 18 Months in Federal Prison for Unlawfully Possessing FirearmsRead the Press Release
LAS VEGAS - - A man who was convicted in December 2012 of unlawfully possessing firearms because he had been previously convicted of a domestic violence offense, was sentenced today to 18 months in prison and three years of supervised release, announced Daniel G. Bogden, United States Attorney for the District of Nevada.
Isaiah Aljavar-Martell Perkins, 21, of North Las Vegas, was sentenced by Senior U.S. District Judge Lloyd D. George. Perkins was convicted by a jury on Dec. 13, 2012, of two counts of prohibited person in possession of a firearm.
“Under federal law, you are prohibited from possessing a firearm if you are a felon or a fugitive, if you use or are addicted to controlled substances, if you have been adjudicated as a mental defective, if you are unlawfully in the United States, if you have been dishonorably discharged from the military, if you are subject to a domestic violence restraining order, or if you have been convicted of a misdemeanor domestic violence offense,” said U.S. Attorney Bogden. “These are all felony crimes, and we are committed to prosecuting persons who violate these laws.”
According to the court records and evidence introduced at trial, on Jan. 29, 2012, Perkins was pulled over by a Las Vegas Metropolitan Police Department (Metro) officer for a traffic violation and a .40 caliber handgun was found under the driver’s seat where Perkins had been sitting. On July 11, 2012, Perkins was found to be in possession of another .40 caliber handgun that was discovered in the glove box of a vehicle he was driving. Perkins had been convicted of misdemeanor domestic battery in the North Las Vegas Municipal Court on March 3, 2011, and was prohibited under federal law from possessing the firearms.
The case was brought under DOJ’s Project Safe Neighborhoods (PSN) initiative, a nationwide commitment to reduce gun and gang crime in America.
The case was investigated by the Las Vegas Metropolitan Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives, and prosecuted by Assistant U.S. Attorneys Phillip N. Smith, Jr. and Cristina Silva.Lazaro Carbajal-aviles Indicted for Illegal ReentryRead the Press Release
LAZARO CARBAJAL-AVILES, age 41, a citizen of Mexico, was charged in a one-count indictment by a Federal Grand Jury today illegal reentry by an alien previously removed, announced U.S. Attorney Dana J. Boente.
According to the indictment, on or about February 27, 2013, CARBAJAL, an alien who had previously been removed from the United States, was found in the United States, within the Eastern District of Louisiana, without having obtained consent from the Secretary of the Department of Homeland Security to reapply for admission to the United States.
If convicted, CARBAJAL, who was convicted of a felony prior to his previous removal, faces a maximum term of imprisonment of 10 years, a fine of $250,000 and 3 years of supervised release following any term of imprisonment.
U. S. Attorney Boente reiterated that the indictment is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt.
This case was investigated by United States Immigration and Customs Enforcement, Homeland Security Investigations with the assistance of the Louisiana State Police and the Louisiana Department of Wildlife and Fisheries. The prosecution is being handled by Special Assistant United States Attorney Robert Weir.(Download Indictment )
Landover Felon Exiled to 10 Years in Prison for Illegal Possession of A GunRead the Press Release
Greenbelt, Maryland - U.S. District Judge Roger W. Titus sentenced Derek Lamarr Gaines, age 25, of Landover, Maryland, today to 10 years in prison followed by three years of supervised release for being a felon in possession of a firearm.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Steven L. Gerido of the Bureau of Alcohol, Tobacco, Firearms and Explosives - Baltimore Field Division; Chief Buddy Robshaw of the Cheverly Police Department; and Colonel Marcus L. Brown, Superintendent of the Maryland State Police.
According to Gaines’ plea agreement, on August 12, 2011, Gaines was seated in the back seat passenger side of a vehicle being driven by Jonathan Jerome Winston, with a third person in the front passenger seat. A law enforcement officer pulled the vehicle over for a traffic stop and detected the odor of phencyclidine (PCP) coming from the rear passenger compartment. The officer ordered Gaines out of the vehicle. As Gaines stepped out of the car he ran away, throwing a handgun that was in his waistband. Officers arrested Gaines and recovered a 9mm semi-automatic handgun with one bullet in the chamber and an extended magazine containing 29 rounds of ammunition; a vial of PCP; and a black ski mask.
When Gaines ran away, the front seat passenger also tried to flee and Winston attempted to drive away. Both were caught by police and placed under arrest. A black ski mask was recovered from Winston’s pocket. A search of the vehicle recovered two additional guns - a 9mm semi-automatic handgun and a .45 caliber machine gun with a 12.5 inch magazine loaded with 38 rounds of .45 caliber ammunition; and a third black ski mask.
Additional investigation revealed that the two 9mm firearms were previously reported stolen.
Jonathan Jerome Winston, age 23, of Washington, D.C., pleaded guilty and was sentenced to 71 months in prison.
United States Attorney Rod J. Rosenstein commended the ATF, Cheverly Police Department, and the Maryland State Police for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney William D. Moomau, who prosecuted the case.
Jackson Woman Pleads Guilty to Stolen Identity Refund FraudRead the Press Release
Jackson, Miss – Ladonna Cooper, 30, of Jackson, pled guilty in federal court today to conspiring to defraud the United States, announced U.S. Attorney Gregory K. Davis, Resident Agent in Charge Allen Bryant of the U.S. Secret Service, and Acting Special Agent in Charge Damon Rowe of Internal Revenue Service Criminal Investigation.
Cooper, a former employee of the Mississippi Department of Corrections, admitted to conspiring to defraud the government by stealing personal identifying information, including names and social security numbers, from the Central Mississippi Correctional Facility located in Rankin County. The information was then used by others to file false tax returns with the Internal Revenue Service. The tax returns claimed that the tax payers were owed a refund. Those refunds were then electronically deposited into various bank accounts in Mississippi belonging to Cooper’s co-conspirators.
Cooper will be sentenced on July 18, 2013 and faces a maximum penalty of ten years in prison and a $250,000 fine.
This case was investigated by the U.S. Secret Service and Internal Revenue Service Criminal Investigation with assistance from the Mississippi Attorney General’s Office, the Mississippi Department of Corrections and the Mississippi Department of Revenue.If you believe you have been a victim of fraud from a person or an organization soliciting relief funds on behalf of storm victims, contact the National Center for Disaster Fraud toll free at:
(866) 720-5721
You can also fax information to:
(225) 334-4707
or e-mail it to:
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International Credit Card Trafficker Sentenced to 88 Months in PrisonRead the Press Release
Vladislav Anatolievich Horohorin, aka “BadB,” was sentenced today to serve 88 months in prison for trafficking in millions of stolen credit and debit cards and for his role in the theft of more than $9 million dollars from an Atlanta-based credit card processor.
The sentence was announced by Acting Assistant Attorney General Mythili Raman of the Justice Department's Criminal Division, U.S. Attorney for the District of Columbia Ronald C. Machen Jr., U.S. Attorney for the Northern District of Georgia Sally Quillian Yates, U.S. Secret Service Assistant Director for Investigations David J. O’Connor and Special Agent in Charge Mark F. Giuliano of the FBI’s Atlanta Field Office.
Horohorin, 30, a citizen of Russia, Israel and Ukraine, was sentenced by U.S. District Judge Ellen S. Huvelle in the District of Columbia. In addition to his prison term, Horohorin was ordered to pay $125,739 in restitution and sentenced to two years of supervised release.
Horohorin was indicted by a federal grand jury in the District of Columbia in November 2009 on charges of access device fraud and aggravated identity theft. In a separate investigation, a federal grand jury in the Northern District of Georgia returned a superseding indictment against Horohorin in August 2010, charging him with conspiracy to commit wire fraud, wire fraud and access device fraud. In August 2010, French law enforcement authorities, working with the U.S. Secret Service, identified Horohorin in Nice, France, and arrested him as he was attempting to board a flight to return to Moscow. Horohorin was extradited to the United States on June 6, 2012. After Horohorin’s arrival in the United States, the two cases pending against him were consolidated in Washington, D.C.
On Oct. 25, 2012, Horohorin pleaded guilty to two counts of access device fraud as well as conspiracy to commit wire fraud.
According to Horohorin’s plea agreement, he used online criminal forums to sell stolen credit and debit card information, known as “dumps,” to online purchasers around the world. Horohorin, using the online name “BadB,” advertised the availability of stolen credit and debit card information through these online forums and directed purchasers to create accounts at “dumps.name,” a fully-automated dumps vending website operated by Horohorin and hosted outside the United States. At the time of his arrest, Horohorin possessed more than 2.5 million stolen credit and debit card numbers.
Horohorin admitted that he was one of the lead cashers in an elaborate scheme in which counterfeit payroll debit cards were used to withdraw more than $9 million from ATMs around the world. Hackers broke into the computers of a credit card processor located in the Atlanta area, stole debit card account numbers and raised the balances and withdrawal limits on those accounts while distributing the account numbers and PIN codes to cashers, like Horohorin. Horohorin, and those he recruited, used one of the stolen account numbers to withdraw more than $125,000 from ATMs in and around Moscow.The District of Columbia case is being prosecuted by Trial Attorneys Ethan Arenson, Carol Sipperly and Corbin Weiss of the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS). Weiss also serves as a Special Assistant U.S. Attorney for the District of Columbia. The District of Columbia case was investigated by the U.S. Secret Service. Key assistance was provided by the French Police Nationale Aux Frontiers and the Netherlands Police Agency National Crime Squad High Tech Crime Unit. The FBI Atlanta field office provided information helpful to the investigation.
The Northern District of Georgia case is being prosecuted by Assistant U.S. Attorneys Nick Oldham and Lawrence R. Sommerfeld of the Northern District of Georgia, and Trial Attorney Sipperly of CCIPS. The Atlanta case was investigated by the FBI. Assistance was provided by numerous law enforcement partners. The U.S. Secret Service provided information helpful to the investigation.
The Criminal Division’s Office of International Affairs handled Horohorin’s extradition from France.
International Credit Card Trafficker Sentenced to 88 Months in PrisonRead the Press Release
WASHINGTON – Vladislav Anatolievich Horohorin, aka “BadB,” was sentenced today to 88 months in prison for trafficking in millions of stolen credit and debit cards and for his role in the theft of more than $9 million from an Atlanta-based credit card processor.
The sentence was announced by Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney for the District of Columbia Ronald C. Machen Jr., U.S. Attorney for the Northern District of Georgia Sally Quillian Yates, U.S. Secret Service Assistant Director for Investigations David J. O’Connor and Special Agent in Charge Mark F. Giuliano of the FBI’s Atlanta Field Office.
Horohorin, 30, a citizen of Russia, Israel and Ukraine, was sentenced by U.S. District Judge Ellen S. Huvelle in the District of Columbia. In addition to his prison term, Horohorin was ordered to pay $125,739 in restitution and sentenced to two years of supervised release.
Horohorin was indicted by a federal grand jury in the District of Columbia in November 2009 on charges of access device fraud and aggravated identity theft. In a separate investigation, a federal grand jury in the Northern District of Georgia returned a superseding indictment against Horohorin in August 2010, charging him with conspiracy to commit wire fraud, wire fraud and access device fraud.
In August 2010, French law enforcement authorities, working with the U.S. Secret Service, identified Horohorin in Nice, France, and arrested him as he was attempting to board a flight to return to Moscow. Horohorin was extradited to the United States on June 6, 2012. After Horohorin’s arrival in the United States, the two cases pending against him were consolidated in Washington, D.C.
On Oct. 25, 2012, Horohorin pleaded guilty to two counts of access device fraud as well as conspiracy to commit wire fraud.
According to Horohorin’s plea agreement, he used online criminal forums to sell stolen credit and debit card information, known as “dumps,” to online purchasers around the world. Horohorin, using the online name “BadB,” advertised the availability of stolen credit and debit card information through these online forums and directed purchasers to create accounts at “dumps.name,” a fully-automated dumps vending website operated by Horohorin and hosted outside the United States. At the time of his arrest, Horohorin possessed more than 2.5 million stolen credit and debit card numbers.
Horohorin admitted that he was one of the lead cashers in an elaborate scheme in which counterfeit payroll debit cards were used to withdraw more than $9 million from ATMs around the world. Hackers broke into the computers of a credit card processor located in the Atlanta area, stole debit card account numbers and raised the balances and withdrawal limits on those accounts while distributing the account numbers and PIN codes to cashers, like Horohorin. Horohorin, and those he recruited, used one of the stolen account numbers to withdraw more than $125,000 from ATMs in and around Moscow.
The District of Columbia case is being prosecuted by Trial Attorneys Ethan Arenson, Carol Sipperly and Corbin Weiss of the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS). Weiss also serves as a Special Assistant U.S. Attorney for the District of Columbia. The District of Columbia case was investigated by the U.S. Secret Service. Key assistance was provided by the French Police Nationale Aux Frontiers and the Netherlands Police Agency National Crime Squad High Tech Crime Unit. The FBI Atlanta field office provided information helpful to the investigation.
The Northern District of Georgia case is being prosecuted by Assistant U.S. Attorneys Nick Oldham and Lawrence R. Sommerfeld of the Northern District of Georgia, and Trial Attorney Sipperly of CCIPS. The Atlanta case was investigated by the FBI. Assistance was provided by numerous law enforcement partners. The U.S. Secret Service provided information helpful to the investigation.
The Criminal Division’s Office of International Affairs handled Horohorin’s extradition from France.
13-122Halifax County Drug Trafficker SentencedRead the Press Release
NEW BERN - United States Attorney Thomas G. Walker announced that in federal court today United States District Judge Louise W. Flanagan sentenced CECIL KURRENTHES RANSOM, 33, to 85 months imprisonment followed by 3 years supervised release.
On October 3, 2012, RANSOM pled guilty to an Indictment charging him with possession of a firearm and ammunition by a convicted felon.
The investigation began when the Halifax County Sheriff’s Office used an informant to make two controlled purchases of marijuana from RANSOM from his house in Roanoke Rapids, N.C., in January and February 2012. On February 10, 2012, the Halifax County Sheriff’s Office executed a search warrant at RANSOM’S house and found a loaded shotgun, a small amount of marijuana, digital scales, .40 caliber ammunition, marijuana seeds and suitcases containing marijuana remnants. It was determined that RANSOM was responsible for the distribution of over 6 kilograms of marijuana. RANSOM was prohibited from possessing firearms and ammunition due to his prior felony convictions for selling cocaine and possession of a firearm by a convicted felon.
The investigation of this case was conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Halifax County Sheriff’s Office.
The federal prosecution was handled by Special Assistant United States Attorney Glenn Perry. Mr. Perry is a prosecutor with the Pitt County District Attorney's Office. Pitt County District Attorney Kimberly Robb has assigned Mr. Perry to the United States Attorney's Office to prosecute federal Organized Crime Drug Enforcement Task Force criminal matters. The assignment to the United States Attorney's Office has been made possible by grants funded by the Governor's Crime Commission.
Gallatin County Man Charged with Illegally Possessing FirearmsRead the Press Release
Frederick J. Zirkelbach, 48, of Ridgeway, Illinois, was arraigned today in United States District Court in Benton on an indictment charging him with being a felon in possession of a firearm, announced Stephen R. Wigginton, United States Attorney for the Southern District of Illinois. The indictment, returned by a Federal Grand Jury on April 2nd, alleged that Zirkelbach was found to be in possession of 14 firearms on March 9, 2013. Prior to that date, Zirkelbach had been convicted of two felony offenses, making it illegal under federal law for him to possess firearms or ammunition.
An indictment is a formal charge against a defendant. Under the law, a defendant is presumed to be innocent of a charge until proved guilty beyond a reasonable doubt to the satisfaction of a jury.
If convicted, Zirkelbach faces up to 10 years’ imprisonment, a $250,000 fine, and 3 years of supervised release to follow his incarceration. The firearms he illegally possessed are also subject to forfeiture to the United States.
Zirkelbach was ordered held without bond and was remanded to the custody of the United States Marshal to await further proceedings.
The case was investigated by the Carmi office of the Southern Illinois Drug Task Force and the Illinois State Police with the assistance of the Bureau of Alcohol, Tobacco, and Firearms and the Gallatin County State’s Attorney’s Office.
The case is being prosecuted by Assistant United States Attorney James M. Cutchin.
Four Former Executives of Lufthansa Subsidiary Bizjet Charged with Foreign BriberyRead the Press Release
Charges were unsealed today against four former executives of BizJet International Sales and Support Inc., the U.S.-based subsidiary of Lufthansa Technik AG, which provides aircraft maintenance, repair and overhaul (MRO) services, for their alleged participation in a scheme to pay bribes to government officials in Latin America, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and Assistant Director in Charge Valerie Parlave of the FBI’s Washington Field Office.
According to the charges, Bernd Kowalewski, the former president and chief executive officer of BizJet, Jald Jensen, the former sales manager at BizJet, Peter DuBois, the former vice president of sales and marketing at BizJet, and Neal Uhl, the former vice president of finance at BizJet, paid bribes to officials employed by the Mexican Policia Federal Preventiva, the Mexican Coordinacion General de Transportes Aereos Presidenciales, the air fleet for the Gobierno del Estado de Sinaloa in Mexico, the air fleet for the Estado De Roraima in Brazil, and the Republica de Panama Autoridad Aeronautica Civil in exchange for those officials’ assistance in securing contracts for BizJet to perform MRO services.
Kowalewski and Jensen were charged by indictment filed in U.S. District Court for the Northern District of Oklahoma on Jan. 5, 2012, with conspiring to violate the Foreign Corrupt Practices Act (FCPA) and to launder money, as well as substantive charges of violating the FCPA and money laundering. The two defendants are believed to remain abroad.
DuBois and Uhl pleaded guilty on Jan. 5, 2012, to criminal informations, and their pleas were unsealed today. DuBois pleaded guilty to one count of conspiracy to violate the FCPA and one count of violating the FCPA. Uhl pleaded guilty to one count of conspiracy to violate the FCPA. Both defendants were sentenced today by U.S. District Judge Gregory K. Frizzell in the Northern District of Oklahoma. DuBois’s sentence was reduced from a sentencing guidelines range of 108 to 120 months in prison to probation and eight months home detention based on his cooperation in the government’s investigation. Uhl’s sentence was similarly reduced for cooperation from a guidelines range of 60 months in prison to probation and eight months home detention.
“The charges announced today allege a conspiracy by senior executives at BizJet to win contracts in Latin American countries through bribery and illegal tactics,” said Acting Assistant Attorney General Raman. “Former BizJet executives, including the former president and chief executive officer, allegedly authorized and caused hundreds of thousands of dollars to be paid directly and indirectly to ranking military officials in various foreign countries, and two former executives have pleaded guilty for their roles in the conspiracy. These charges reflect our continued commitment to holding individuals accountable for violations of the FCPA, including, as in this instance, after entering into a deferred prosecution agreement with their employer.”
“Business executives have a responsibility to act appropriately in order to maintain a fair and competitive international market,” said FBI Assistant Director in Charge Parlave. “The unsealing of these bribery charges, and today’s sentencing, demonstrate that the FBI is committed to curbing corruption and will pursue all those who try to advance their businesses through bribery.”
The charges allege that the defendants, in many instances, paid bribes directly to foreign officials in Mexico, Panama and Brazil for assistance in securing contracts. In other instances, the defendants allegedly funneled bribes through a shell company owned and operated by Jensen. The shell company, Avionica International & Associates Inc., allegedly operated under the pretense of providing aircraft maintenance brokerage services but in reality laundered money related to BizJet’s bribery scheme. Avionica was located at Jensen’s personal residence in Van Nuys, Calif., and Jensen was the only officer, director and employee.
The charges announced today follow the announcement on March 14, 2012, of a deferred prosecution agreement with BizJet and an $11.8 million monetary penalty to resolve charges related to the corrupt conduct. That agreement acknowledged BizJet’s voluntary disclosure, extraordinary cooperation and extensive remediation in this case.
The conspiracy to commit violations of the FCPA count carries a maximum penalty of five years in prison and a fine of the greater of $250,000 or twice the value gained or lost. The FCPA counts each carry a maximum penalty of five years in prison and a fine of the greater of $100,000 or twice the value gained or lost. The conspiracy to commit money laundering count carries a maximum penalty of 20 years in prison and a fine of the greater of $500,000 or twice the value of the property involved in the transaction. The money laundering counts each carry a maximum penalty of 10 years in prison and a fine of the greater of $500,000 or twice the value of the property involved in the transaction.
An indictment is merely an accusation, and defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.
The case is being prosecuted by Trial Attorneys Daniel S. Kahn and Stephen J. Spiegelhalter of the Criminal Division’s Fraud Section. Assistant U.S. Attorney Kevin Leitch from the Northern District of Oklahoma has provided assistance in the case. The department has also worked closely with its law enforcement counterparts in Mexico and Panama in this matter and is grateful for their assistance. The case is being investigated by FBI agents who are part of the Washington Field Office’s dedicated FCPA squad.
Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.
Former Payroll Service Provider Sentenced for Tax EvasionRead the Press Release
MINNEAPOLIS—Yesterday in federal court, a former payroll service provider was sentenced for failing to pay to the Internal Revenue Service (“IRS”) employment taxes received from his clients. On April 4, 2013, United States District Court Judge John R. Tunheim sentenced Mohamed Abdi to time served (approximately three months) on one count of tax evasion. He also was ordered to pay approximately $77,000 in restitution. Abdi was indicted on April 9, 2012, and pleaded guilty on January 3, 2013.
From January 1, 2005, through June 2007, Abdi was the sole owner of Siham Solutions, Inc., which provided payroll services to clients in Minnesota. These services included paying federal income and employment taxes that were withheld from the employees of Siham’s clients. In his plea agreement, Abdi acknowledged that from the first quarter of 2005 through the second quarter of 2007, he received between $80,000 and $200,000 in employment taxes from his clients, which he, in turn, was to pay to the IRS. Instead, however, Abdi used the money for his own purposes.
This case was the result of an investigation by the IRS-Criminal Investigations. It was prosecuted by Assistant U.S. Attorney Michael L. Cheever.Per U.S. Department of Justice policy, the U.S. Attorney’s Office is not allowed to provide the age and city of residence for defendants charged in criminal tax cases.
Former Officer of Closed Ellijay Bank SentencedRead the Press Release
GAINESVILLE, Ga. - Former bank vice president Adam Teague was sentenced today to serve over five years in federal prison for conspiring to defraud Appalachian Community Bank.
“Bank fraud is a critical problem throughout the United States, but it has hit Georgia especially hard,” said United States Attorney Sally Quillian Yates. “Our state has led the nation in bank failures since 2008, with 85 banks failing - including this one. This bank was robbed from the inside, not by a bandit carrying a gun, but a bank officer carrying a pen.”
Mark F. Giuliano, Special Agent in Charge, FBI Atlanta Field Office, stated: “Today’s sentencing of Mr. Teague should serve as a stark reminder to others that such greed based criminal behavior as seen in this case comes with a cost. Understanding the potential impact on the banking institution itself, the FBI will continue to dedicate extensive investigative resources toward addressing bank fraud in its many and varied forms.”
Jon T. Rymer, Inspector General for the Federal Deposit Insurance Corporation (FDIC) said, “The Federal Deposit Insurance Corporation (FDIC) Office of Inspector General is pleased to join our law enforcement colleagues in announcing the sentence of this former bank official for his role in a complex bank fraud perpetrated through the failed Appalachian Community Bank. It is especially important to investigate and prosecute cases where trusted insiders abuse their positions to cause harm to the institution and undermine the integrity of the financial services industry as a whole. We are committed to preventing and addressing such threats to the safety and soundness of FDIC-insured banks throughout the country.”
“Teague contributed to the failure of TARP-applicant Appalachian Community Bank by fraudulently masking the bank’s true financial condition while enriching himself,” said Christy Romero, Special Inspector General for TARP (SIGTARP). “Driven by greed and risky behavior, Teague engaged in an ‘extend and pretend’ scheme using the proceeds of new bank loans to hide past-due loans. He also hid the bank’s growing inventory of foreclosed property by directing the bank to finance sales of the properties to buyers including two Teague-controlled shell companies, GPH (“God Please Help”) Investments and PHL (“Please Help Lord”) Investments. SIGTARP and our law enforcement partners will root-out fraud related to TARP, hold fraudsters accountable, and bring justice to American taxpayers.”
Steve Linick, Inspector General Federal Housing Finance Agency said, “Protecting the integrity of the Federal Home Loan Bank system is critical to our nation’s economic recovery and we along with our law enforcement partners will aggressively pursue anyone seeking to take advantage of that system.”
According to United States Attorney Yates, the charges and other information presented in court, Teague was Senior Vice President of Appalachian Community Bank, which was headquartered in Ellijay, Ga. Due to its poor financial condition, Appalachian was forced to close on March 19, 2010, and the FDIC was appointed as receiver. The investigation of Appalachian’s loan transactions uncovered extensive fraudulent activity in which Teague was involved:
Concealment of Past-Due Loans
In an attempt to prevent the FDIC from discovering certain past-due loans on Appalachian’s books, between June 2008 and August 2009, Teague and unindicted coconspirator T.N, arranged a number of sham real estate transactions and caused the bank to make approximately $7 million in fraudulent loans to unindicted coconspirator M.L. Teague and M.L. intended to make it appear as if M.L. had purchased certain properties from Appalachian’s foreclosure inventory and was making regular monthly payments on the new mortgages.
Panama City Beach Condominiums
In April 2009, Teague and unindicted coconspirator T.N., used shell corporations to purchase two condominiums in Panama City Beach, Fla. and caused Appalachian to finance them at a total cost of approximately $566,000. Approximately two months later, the two refinanced their mortgages and pocketed more than $875,000 which they then used to pay other personal debts, make monthly loan payments on the refinanced mortgages, pay condominium fees, and purchase new furniture for their condominiums.
GPH Investments, LLC. and PHL Investments LLC
In August 2009, Teague and unindicted coconspirator T.N. created two shell companies: GPH Investments, LLC. and PHL Investments, LLC. GPH is an acronym for “God Please Help,” and PHL is an acronym for “Please Help Lord.” Teague and T.N. then engaged in a sham real estate transaction designed to make it appear as if GPH had purchased 11 residential properties from Appalachian’s foreclosure inventory for a total of approximately $3.7 million.
Teague and T.N. then caused Appalachian to loan GPH 90 percent of the purchase price and caused GPH to represent at closing that it was paying the other 10 percent of the purchase price out of its own funds, even though the two of them knew that to be untrue. The 10 percent down payment, closing costs, and monthly interest payments on this loan were all paid out of the proceeds from a $500,000 line of credit that Teague and unindicted coconspirator T.N. fraudulently caused Appalachian to extend to PHL.
Soak Creek Preserve Partners Land Flips
Teague and three other individuals owned Soak Creek Preserve Partners, LLC (Soak Creek), a Georgia limited liability company formed for the sole purpose of engaging land flips, that is, buying real estate and immediately reselling it at a higher price. Specifically, Soak Creek was formed to purchase and resell two adjoining tracts of land in Tennessee. One tract consisted of approximately 5,043 acres and the other tract consisted of approximately 2,160 acres. Before Soak Creek purchased either tract, Teague and his partners made arrangements to resell both tracts to an investment group from Texas.
Teague then caused Appalachian to make three separate $100,000 loans to unindicted coconspirator B.H. under false pretenses between March 7, and September 4, 2007. Teague knew that B.H. was a silent partner in Soak Creek. He also knew that in obtaining these loans from the bank, B.H. was acting as a straw borrower for Soak Creek. And Teague also knew that Soak Creek intended to use the proceeds of these loans as down payments on the 5,043 acres and the 2,160 acres. But Teague did not disclose any of these facts to Appalachian Community Bank. In fact, he actively hid his involvement in at least one of these loan transactions by altering the bank’s records to make it appear that someone else had acted as the loan officer. By not disclosing to Appalachian’s loan committee that he had a personal financial interest in these transactions, Teague violated the bank’s conflict-of-interest policy.
To finance Soak Creek’s purchase of the 5,043 acres, on April 20, 2007, Teague caused Appalachian to wire transfer approximately $7.2 million of the bank’s money to the escrow account of the Tennessee law firm that handled the loan closing. He did not record this wire transfer in the bank’s books and records. At the time of this transfer, Soak Creek’s account at Appalachian had a zero balance. Therefore, this wire transfer caused Soak Creek’s account to be overdrawn by approximately $7.2 million. The amount of this overdraft exceeded Teague’s lending authority at the bank.
On April 24, 2007, Soak Creek flipped the 5,043 acres to the Texas investment group for approximately $9.3 million, thereby realizing a same-day profit of approximately $2 million.
To finance Soak Creek’s purchase of the 2,160 acres, on September 28, 2007, Teague caused Appalachian to wire transfer approximately $3 million of the bank’s money to the escrow account of the Tennessee law firm that handled the loan closing. He also did not record this wire transfer in Appalachian’s books and records. At the time of this wire transfer, there was only four dollars in Soak Creek’s account at the bank. The wire transfer caused Soak Creek’s account to be overdrawn by approximately $3 million. The amount of this overdraft exceeded Teague’s lending authority at the bank.
On September 28, 2007, Soak Creek flipped the 2,160 acres to the Texas investment group for approximately $3.7 million, thereby realizing a same-day profit of approximately $500,000.
Teague, 39, of Ellijay, was convicted on these charges on August 22, 2012, after he pleaded guilty. United States District Judge Richard W. Story sentenced him to five years, ten months in prison to be followed by five years of supervised release. Teague was also ordered to forfeit $5,840,517.98, which is equal to the amount of the illegal proceeds he obtained as a result of the conspiracy, as well as all of the real property that he purchased with the proceeds of the conspiracy.
This case was investigated by Special Agents of the Federal Bureau of Investigation, the Federal Deposit Insurance Corporation, Office of Inspector General, the Department of Treasury, Special Inspector General - Troubled Asset Relief Program, and the Federal Housing Finance Agency, Office of Inspector General.
Assistant United States Attorneys Russell Phillips and Mike Brown prosecuted the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the HomePage for the U.S. Attorney’s Office for the Northern District of Georgia is www.justice.gov/usao/gan.