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17 May 2013
Federal Jury Convicts Clay County Man for Dealing MethamphetamineRead the Press Release
Late WV State Police members Corporal Marshall Bailey and Trooper Eric Workman played pivotal role in building case against known meth dealer
CHARLESTON, W.Va. – A Clay County man faces a mandatory minimum of 20 years in prison after a federal jury sitting in Charleston convicted him on May 16 of methamphetamine distribution, announced U.S. Attorney Booth Goodwin. Raymond Hersman, 47, of Wallback, Clay County, W.Va., was found guilty of possession with intent to distribute 50 grams or more of methamphetamine. Hersman was charged in a one-count superseding indictment in April.
U.S. Attorney Booth Goodwin said, “This is perhaps the last investigation on which the late Trooper Eric Workman and the late Corporal Marshall Bailey worked. The work of these heroes paid off yet again with another bad guy behind bars. It's also worth noting that this is National Police Week--a time to honor all of our men and women in uniform for their sacrifices and to honor those who, like Corporal Bailey and Trooper Workman, made the ultimate sacrifice to keep our communities safe.”
Evidence at trial proved that on September 22, 2012, Hersman possessed and intended to distribute approximately 400 grams of actual methamphetamine near Gauley Bridge in Fayette County.
According to evidence revealed during the three-day trial, law enforcement agents began investigating Hersman’s suspected meth distribution scheme in and around Clay County in August 2012. At the time, agents were aided in the investigation by West Virginia State Troopers Cpl. Marshall Bailey and Trooper Eric Workman. Troopers Bailey and Workman, both of whom patrolled the Clay County area, provided essential details to fellow law enforcement agents which outlined Hersman’s methamphetamine operation in August 2012. The information provided by Bailey and Workman assisted the investigation and culminated with the conviction of Hersman yesterday.
Cpl. Marshall Bailey and Trooper Eric Workman were shot and killed in the line of duty following a traffic stop near Clay County in late August 2012.
Hersman was previously convicted in April 1993 in the United States District Court for the Southern District of West Virginia of conspiracy to distribute methamphetamine and possession with intent to distribute methamphetamine.
Hersman faces a mandatory minimum sentence of 20 years in prison when he is sentenced.
The West Virginia State Police, the Drug Enforcement Administration (DEA), and the Metropolitan Drug Enforcement Network Team (MDENT) conducted the investigation. Assistant United States Attorneys Monica D. Coleman and John Frail handled the prosecution.
Click here to listen to an audio clip provided by U.S. Attorney Booth Goodwin
Eight Killeen Residents Arrested in Connection with Cocaine Distribution OperationRead the Press Release
Federal, state and local authorities have arrested eight individuals in connection with a cocaine distribution operation based in Killeen, Texas, announced United States Attorney Robert Pitman, Federal Bureau of Investigation San Antonio Division Special Agent in Charge Armando Fernandez and Killeen Police Chief Dennis M. Baldwin.
A two-count federal grand jury indictment, returned on Tuesday and unsealed today, charges 31–year-old Cornelius Tywarren Wilson, 29-year-old Christopher Andrew Wilson, 38-year-old Jamel Azar Singleton and 30–year-old Jason Eugene Jackson with one count of conspiracy to possess with intent to distribute cocaine and one count of conspiracy to possess with intent to distribute “crack” cocaine. Bryant Keith Presley, age 28, and Katrie Deshone Simpson, age 30, are also charged in the crack cocaine conspiracy count while 38–year-old Michael Anthony Mango is also charged in the cocaine conspiracy count. The indictment alleges that the defendants have been involved in the cocaine distribution operation since October 2012.
Authorities arrested the indicted defendants yesterday without incident. An eighth individual who was arrested yesterday, 26-year-old Walter Chambers, is charged by criminal complaint with conspiracy to possess with intent to distribute cocaine. According to the affidavit, Chamber’s arrest occurred subsequent to the execution of a search warrant in an apartment in Killeen. During the search, authorities recovered cocaine, crack cocaine and a handgun.
Each charge calls for between five and 40 years in federal prison and a maximum $2 million fine upon conviction. The defendants remain in federal custody pending a detention hearing scheduled for 2:00pm on Tuesday before United States Magistrate Judge Jeffrey C. Manske.
This case resulted from an investigation by the Federal Bureau of Investigation (FBI) together with the Drug Enforcement Administration and the Killeen Police Department. Assistant United States Attorney Sean Condron is prosecuting this case on behalf of the Government.
An indictment is merely a charge and should not be considered as evidence of guilt. The defendants are presumed innocent until proven guilty in a court of law.
Edgemont Man Pleads Guilty to Making False Unemployment ClaimsRead the Press Release
United States Attorney Brendan V. Johnson announced that Terry M. Beard, age 46, of Edgemont, South Dakota appeared before U.S. Magistrate Judge Veronica L. Duffy, on May 8, 2013, and pled guilty to False Claim. The maximum penalty upon conviction is 5 years of imprisonment and a $250,000 fine.
Beard was indicted on July 24, 2012 for receiving unemployment insurance benefit payments from the U.S. Railroad Retirement Board when he knew he was not entitled to them.
The investigation was conducted by the U.S. Railroad Retirement Board-Office of Inspector General. The case is being prosecuted by Assistant U.S. Attorney Wayne Venhuizen.
A presentence investigation was ordered and a sentencing date will be set. The defendant was released on bond pending sentencing.
Early, Iowa Woman Convicted of Methamphetamine ConspiracyRead the Press Release
A woman who conspired to manufacture and distribute methamphetamine was convicted by a jury May 16, 2013, after a three-day trial in federal court in Sioux City.
Shirley Schmitt, 54, from Early, Iowa, was convicted of one count of conspiracy to manufacture and distribute methamphetamine and one count of possession of pseudoephedrine with intent to manufacture methamphetamine. The verdict was returned following about three hours of jury deliberations.
The evidence at trial showed that Schmitt conspired to manufacture and distribute 50 grams or more of actual (pure) methamphetamine from 2010 through July 2012. According to pseudoephedrine purchase logs obtained in the investigation, starting in July 2010 Schmitt acquired (by purchase or other means) at least 98 grams of pseudoephedrine for the manufacture of methamphetamine. Schmitt also had others obtain at least 400 grams of pseudoephedrine and other items for her to manufacture methamphetamine in exchange for methamphetamine. On June 28, 2012, Schmitt received pseudoephedrine from an undercover law enforcement officer and agreed to manufacture methamphetamine for the officer.
Sentencing before United States District Court Judge Donald E. O’Brien will be set after a presentence report is prepared. Schmitt remains free on bond previously set pending sentencing. On the conspiracy conviction, Schmitt faces a mandatory minimum sentence of 10 years’ imprisonment and a possible maximum sentence of life imprisonment, a $10,000,000 fine, a special assessment of $100, and five years up to life of supervised release following any imprisonment. On the possession of pseudoephedrine conviction Schmitt faces a possible maximum sentence of 20 years’ imprisonment, a $250,000 fine, a special assessment of $100, and up to three years of supervised release.
The case is being prosecuted by Assistant United States Attorney Shawn S. Wehde and was investigated by the Iowa Division of Narcotics Enforcement, Sac County Sheriff’s Office, Buena Vista County Sheriff’s Office, Storm Lake Police Department and Iowa Division of Criminal Investigations.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 12-4076.
Eagle Butte Man Sentenced for Assault Resulting in Serious Bodily InjuryRead the Press Release
United States Attorney Brendan V. Johnson announced that an Eagle Butte, South Dakota man convicted of Assault Resulting in Serious Bodily Injury was sentenced on May 14, 2013 by U.S. District Judge Roberto A. Lange.
Isiah Mesteth, age 23, was sentenced to 72 months of imprisonment; 2 years of supervised release; and a $100 special assessment to the Federal Crime Victims Fund.
Mesteth was indicted by a federal grand jury on September 18, 2012 and pled guilty to the above offense on February 5, 2013.
The charge stems from an incident wherein Mesteth, on October 4, 2011, assaulted his significant other during an argument. Mesteth hit and kicked her in the face and body several times, causing her nose and lips to bleed, as well as bruising and swelling to her face and arms. He also sexually assaulted her in a manner that caused extreme physical pain.
The investigation was conducted by the Cheyenne River Sioux Tribe Law Enforcement Division and the Federal Bureau of Investigation. Assistant U.S. Attorney Kathryn N. Rich prosecuted the case.
Mesteth was immediately turned over to the custody of the U.S. Marshals Service.
Eagle Butte Man Pleads Guilty to Sexual AbuseRead the Press Release
United States Attorney Brendan V. Johnson announced that Frank Hill, age 38, of Eagle Butte, South Dakota appeared before U.S. District Judge Roberto A. Lange on May 14, 2013 and pled guilty to Sexual Abuse of a Person Incapable of Consenting.
The maximum penalty upon conviction is up to life in custody, a $250,000 fine, or both; at least 5 years and up to life of supervised release, and $100 assessment to the Federal Crime Victims Fund.
The conviction arose from Hill’s sexual assault in November of 2009 of an adult female victim.
The investigation was conducted by the Cheyenne River Sioux Tribe Law Enforcement Division. The case is being prosecuted by Assistant U.S. Attorney Mikal Hanson.
A presentence investigation was ordered, and a sentencing date was set for August 8, 2013. Hill will report to the U.S. Marshals Service on May 21, 2013.
Eagle Butte Man Indicted for AssaultRead the Press Release
United States Attorney Brendan V. Johnson announced that an Eagle Butte, South Dakota man has been indicted by a federal grand jury for Assault with a Dangerous Weapon and Assault Resulting in Serious Bodily Injury and aiding and abetting both assaults with two other co-defendants.
Martin Garreau, a/k/a Damion Yellow Earrings, age 19, was indicted by a federal grand jury on April 12, 2013. He appeared before U.S. Magistrate Judge Mark A. Moreno on May 15, 2013 and pled not guilty to the indictment. The maximum penalty upon conviction is 10 years in custody, a $250,000 fine, or both; 3 years of supervised release; and a $100 special assessment on each count. Restitution may also be ordered.
The charges relate to an alleged incident in which Garreau is accused of assaulting an Eagle Butte man in November 2012 with glass bottles that resulted in serious injury to the victim. The charges are merely accusations, and Garreau is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Cheyenne River Sioux Tribe Law Enforcement Division. Assistant U.S. Attorney Mikal Hanson is prosecuting the case.
Garreau was remanded to the custody of the U.S. Marshal. A trial date has not been set.
Dupree Man Pleads Guilty to Burglary and AssaultRead the Press Release
United States Attorney Brendan V. Johnson announced that William Vandervier, age 26, of Dupree, South Dakota appeared before U.S. District Judge Roberto A. Lange on May 15, 2013 and pled guilty to the Superseding Information that charged him with First Degree Burglary and Simple Assault.
The maximum penalty upon conviction for First Degree Burglary is 25 years of custody, a $250,000 fine, or both; up to 5 years of supervised release; a $100 special assessment; and the Court could order restitution to the victim. The maximum penalty for Simple Assault is 6 months of custody and a $5,000 fine, or both; and a $10 special assessment.
The conviction arose from an incident that occurred in November of 2011 in Dupree, when Vandervier unlawfully entered an occupied structure at night and assaulted an adult female victim with whom he had a previous relationship.
The investigation was conducted by the Cheyenne River Sioux Tribe Law Enforcement Division. The case is being prosecuted by Assistant U.S. Attorney Mikal Hanson.
A presentence investigation was ordered and a sentencing date was set for August 5, 2013. The defendant was remanded to the custody of the U.S. Marshals Service pending sentencing.
District Man Sentenced to 39 ½-Year Prison Term in 2011 Slaying in Northeast WashingtonDefendant Came to Ex-Girlfriend’s House with Gun, Killed Her Brother and Shot at Her FatherRead the Press Release
WASHINGTON – Brandon Andrews, 31, of Washington, D.C., was sentenced today to 39 ½ years of incarceration on charges stemming from the killing of a man in Northeast Washington, U.S. Attorney Ronald C. Machen Jr. announced.
Andrews was found guilty in February 2013 by a jury in the Superior Court of the District of Columbia of second-degree murder in the slaying of his ex-girlfriend’s brother, Leonard Bigelow, 43. The jury also found him guilty of a charge of assault with a deadly weapon for shooting at Mr. Bigelow’s father; threats to injure, for threatening his ex-girlfriend, and related weapons offenses. He was sentenced by the Honorable Robert E. Morin.
According to the government’s evidence, Andrews and Mr. Bigelow’s sister dated for approximately 10 months. However, on Aug. 22, 2011, she ended the relationship after Andrews threatened her while they were driving through the District of Columbia.
After the break-up, Andrews repeatedly tried to call and sent text messages to his ex-girlfriend, but she did not respond. Many of the defendant’s text messages included profanity, threats and demands that she answer him. Andrews also went by the Bigelow family home repeatedly, though he was uninvited and unwelcome.
On Aug. 23, 2011, for example, Mr. Bigelow was with his sister at their home when Andrews came by. Andrews and Mr. Bigelow argued when Mr. Bigelow informed Andrews that he was unwelcome and that his sister did not want to talk to him. Andrews’s ex-girlfriend became so concerned about his behavior that she sought a protective order from the Court the following day to keep Andrews away from her and her family.
On Aug. 25, 2011, Andrews demanded his clothing via text messages. The following day, the ex-girlfriend dropped off the clothes on a street corner near a homeless center in the 400 block of Second Street NW, where Andrews stood and resided. She did not give them to Andrews directly because she feared him. Later that day, Andrews sent text messages claiming that the clothes were taken by others before he could retrieve them. He also used profanity and threatened her property and her safety.
On the evening of Aug. 26, 2011, Andrews called and texted his ex-girlfriend multiple times, but she did not respond. Then, Andrews called her home. Mr. Bigelow answered the phone and told Andrews that his sister did not want to see him or speak to him. Andrews declared that he was coming to the home at approximately 10 p.m. Mr. Bigelow said that he would be there.
Andrews arrived about 10:45 p.m. with a loaded semi-automatic pistol in his pocket. He emerged from an alley and into the 1300 block of Emerald Street NE, and walked toward the house. Mr. Bigelow, his sister, and his father saw Andrews coming. Mr. Bigelow went onto the front porch with his father, while his sister called 911. Andrews stopped in front of the house and, without a word, shot at Mr. Bigelow and his father twice. He struck Mr. Bigelow with a bullet in the chest. Andrews then walked back the way he came. Mr. Bigelow collapsed and died that night from the gunshot wound.
On Aug. 27, 2011, law enforcement located Andrews at the corner of Fifth and F Streets NW. When he was arrested, he told the police that he had a gun in his pocket. The police found in his pocket the loaded.25 caliber semi-automatic pistol used to kill Mr. Bigelow.
At trial, Andrews claimed self-defense and alleged, among other claims, that at the time of the shooting Mr. Bigelow charged at him with some type of weapon in his hand. The government strongly disputed Andrews’ claim. According to the government’s evidence, Mr. Bigelow did not have a weapon and did not approach Andrews.
In announcing the sentence, U.S. Attorney Machen commended the work of the detectives and officers of the Criminal Investigations Division and the First District of the Metropolitan Police Department, and the FBI Fugitive Task Force. He also expressed appreciation to those who worked on the case from the U.S. Attorney’s Office, including Assistant U.S. Attorney Steven Snyder, who secured the indictment in the case, Criminal Investigator John Marsh, Victim Witness Advocate Marcia Rinker, Victim Witness Specialist Katina Adams-Washington, Leif Hickling of the Litigation Technology Unit, and Paralegal Specialist Marian Russell. Finally, he praised the efforts of Assistant U.S. Attorney Shana L. Fulton who tried the case.
13-174District Man and Woman Sentenced to Prison Terms for Their Roles in Killing of 18-Year-Old Latisha FrazierVictim’s Body Was Left in A Dumpster, Never Found; Two Defendants Are Among Seven People Convicted in CaseRead the Press Release
WASHINGTON – Cinthya Proctor, 21, and Laurence Hassan, 24, were sentenced today to prison terms for second-degree murder and other charges in the August 2010 kidnapping and murder of 18-year-old Latisha Frazier, announced U.S. Attorney Ronald C. Machen Jr.
Proctor was sentenced to 21 years of incarceration on charges of second-degree murder, kidnapping and conspiracy to commit evidence tampering. Hassan was sentenced to an 18-year prison term for second-degree murder and kidnapping. Both defendants, of Washington, D.C., were sentenced in the Superior Court of the District of Columbia by the Honorable William M. Jackson. Upon completion of their prison terms, they will be placed on five years of supervised release.
Proctor, who pled guilty in July 2011, and Hassan, who pled guilty in October 2011, are among six defendants who have pled guilty to charges related to the killing. A seventh defendant was found guilty by a jury last month of first-degree felony murder and other charges.
According to the government’s evidence, Proctor and Hassan were part of a group of six young men and women who took part in the murder of Ms. Frazier.
Ms. Frazier vanished on Aug. 2, 2010. For months, her family relentlessly sought to find her, passing out flyers and contacting local news stations to publicize her disappearance. In late January 2011, one witness finally stepped forward and contacted the Metropolitan Police Department, revealing the truth of Ms. Frazier’s whereabouts.
On the day of her disappearance, the government’s evidence showed, Ms. Frazier had been brutally murdered by the group of six men and women (ages 16 to 23), all of whom she believed to be her friends. The group had suspected - with little evidence - that Ms. Frazier had stolen about $900 from one of the men, Johnnie Sweet. He recruited others and exacted a plan of revenge in which they would call her over to an apartment where they claimed to be socializing.
When Ms. Frazier arrived at the apartment in the 1700 block of Trenton Place SE, the group took her to a small bedroom where Sweet and others punched, kicked, and stomped her all over her body. Ignoring her pleas for them to stop, they bound her in duct tape, taped a pillowcase over her head so she could not scream, and shoved her in a small, dark closet. When she screamed and moaned, one of the members of the group placed her in a sleeper hold to “put her to sleep.” Later, the group discovered that she had died.
Upon learning that Ms. Frazier had died, Proctor took part in a discussion about what to do with her body. The initial plan was to dismember the body, put it in a container, and dispose of it in a park. The next day, Proctor joined in an attempt to dismember the body in a bathtub. But she became physically ill and went to a hospital before the body was removed from the apartment. That evening, Ms. Frazier’s body was thrown into a dumpster, and it is now believed to be somewhere in one or two landfills in rural Virginia.
In addition to Proctor and Hassan, those pleading guilty include Brian Gaither, 25, who was sentenced in April 2013 to a 32-year prison term after pleading guilty to first-degree murder; Anneka Nelson, 18, who pled guilty to second-degree murder and kidnapping; Lanee Bell, 19, who pled guilty to kidnapping, and Antoine McCullough, 27, who pled guilty to conspiracy to commit evidence tampering. Except for Gaither, the other defendants are awaiting sentencing.
Sweet, 19, was found guilty by a jury on April 30, 2013, of first-degree felony murder with aggravating circumstances; first-degree premeditated murder with aggravating circumstances; kidnapping, and tampering with physical evidence. The Honorable Russell F. Canan scheduled sentencing for July 11, 2013. Sweet faces a mandatory minimum of 30 years and a maximum of 60 years of incarceration.
In announcing today’s sentences, U.S. Attorney Machen praised the work of those who investigated the case for the Metropolitan Police Department (MPD), including detectives from the Major Case/Cold Case Squad and the Seventh District.
They also expressed appreciation for the efforts of those who handled the case for the U.S. Attorney’s Office, including Larry Grasso of the Criminal Intelligence Unit, Victim/Witness Advocate Marcia Rinker, and Paralegal Specialists Kwasi Fields, Phaylyn Hunt, and Angela Lawrence. Finally, they thanked Assistant U.S. Attorneys Christopher R. Kavanaugh and Melinda Williams, who prosecuted the case.
13-175Defendant Pleads Guilty to Armored Truck RobberyRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Michael B. Steinbach, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, and John E. Brooks, Chief, Sunrise Police Department, announced today the guilty plea of defendant Christopher Ferguson, 40, of Plantation, in connection with an armored truck robbery resulting in the theft of $280,000 and a shootout outside the Space Coast Credit Union in Sunrise, Florida.
More specifically, Ferguson pled guilty to the Hobbs Act, in violation of Title 18, United States Code, Section 1951(a). Sentencing has been scheduled for July 29, 2013 at 1:15 p.m. before U.S. District Judge William P. Dimitrouleas. At sentencing, Ferguson faces a maximum statutory sentence of up to twenty (20) years in prison on the robbery count, as well as up to three (3) years of supervised release, up to a $250,000 fine, and mandatory restitution.
As alleged in the Indictment and statements made in court, on January 17, 2013, a Brinks armored truck arrived at the Space Coast Credit Union in Sunrise, Florida to make a delivery of United States currency. As the Brinks courier exited the truck and approached the front door of the bank, two masked subjects exited a stolen white Honda that was parked at the bank. Both subjects thereafter ran toward the courier, one of whom was pointing what appeared to be a handgun directly at the guard. One subject ordered the Brink’s courier to the ground and the courier put his hands up and laid down on the ground. At that point, one robber tried unsuccessfully to take the courier’s firearm while the other subject grabbed a bag belonging to Brinks and destined for delivery to the credit union, which contained approximately $280,000. Moments later, both subjects ran back to the stolen Honda. This entire robbery was recorded on bank surveillance video.
Furthermore, according to statements made in court, as the subjects entered the Honda, the Brinks driver and the courier who had just been robbed, discharged their firearms multiple times at the subjects and their white Honda as they fled the scene. Ultimately, numerous rounds struck and penetrated their vehicle, which exited the bank parking lot. Law enforcement responded to the location of the abandoned Honda and observed that the vehicle had sustained damage from multiple gun shots. A subsequent search of the stolen vehicle revealed the presence of blood located on the driver’s seat and floorboard area. Law enforcement swabbed the blood and submitted the unknown DNA to the FBI Laboratory. Ultimately, the unknown DNA sample was identified as belonging to Christopher Ferguson.
The second robber remains at large. If anyone has information about the whereabouts of the second individual or this investigation, contact the Miami FBI at 305-944-9101.
Mr. Ferrer commended the investigative efforts of the FBI, the Sunrise Police Department, the South Florida Violent Crime Fugitive Task Force and the Broward County Sheriff’s Office. This case is being handled by Assistant U.S. Attorneys Marc Anton and Mark Dispoto.
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.
Davenport Man Sentenced to Thirty Years in Prison After Federal Drug ConvictionRead the Press Release
DAVENPORT, IA - On May 17, 2013, Roscoe Chambers, age 41, from Davenport, Iowa, was sentenced by United States District Court Stephanie M. Rose to 360 months imprisonment, after a jury found him guilty of two counts of distribution of crack cocaine and one count of possession with the intent to distribute crack cocaine, announced United States Attorney Nicholas A. Klinefeldt. Chambers was also ordered to serve eight years of supervised release after release from prison, and to pay $100 towards the Crime Victims Fund.
On June 23, 2012 and June 24, 2012, law enforcement officers conducted two controlled purchases of crack cocaine from Chambers in a Davenport, Iowa, parking lot. On June 23rd, Chambers also expressed interest in purchasing two handguns. Based on these controlled purchases and other investigations, the Davenport, Iowa, Police Department conducted a search of Chambers’ Davenport apartment. From this apartment, officers seized over 70 additional grams of crack cocaine, cash and other items consistent with drug distribution. On January 10, 2013, a jury found Chambers guilty of two counts of distribution of crack cocaine and one count of possession with the intent to distribute. At sentencing, Chambers was found to be a career offender based on two prior convictions for crimes of violence.
This case was investigated by the Drug Enforcement Administration, the Iowa State Patrol, Division of Narcotics Enforcement, and the Davenport Police Department. The case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
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Connie M. Knight Sentenced to 57 Months in Prison for Id Fraud and Impersonating an Osha Official in Wake of Gulf Oil SpillRead the Press Release
CONNIE M. KNIGHT, 47, previously of Belle Chasse, La., was sentenced to serve 57 months in prison in New Orleans federal court late yesterday for providing fraudulent hazardous waste safety training in the wake of the Deepwater Horizon explosion and spill, announced Ignacia S. Moreno, Assistant Attorney General of the Justice Department’s Environment and Natural Resources Division, and Dana Boente, U.S. Attorney for the Eastern District of Louisiana. In addition, KNIGHT was ordered to pay victim restitution in the amount of $25,300.
“On the heels of the largest environmental disaster in U.S. history, KNIGHT illegally profited from a community already suffering from the impacts of the oil spill by impersonating a federal official and raising false hopes for employment. For that she is being held accountable to the fullest extent of the law,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division. “The Department of Justice is committed to environmental justice and will vigorously prosecute those who victimize vulnerable communities.”
“KNIGHT took advantage of an environmental disaster and the resulting vulnerabilities of an immigrant community,” said U.S. Attorney Boente. “Her callous crime focused on her financial gain, ignoring the potential harm to the restoration of the Louisiana coastal region.”
On Jan. 24, 2013, KNIGHT pleaded guilty to three felony criminal charges and one misdemeanor criminal charge for creating false identification documents and impersonating a federal official. Court documents explained how, in the wake of the Deepwater Horizon oil spill, KNIGHT impersonated a high-ranking Occupational Safety and Health Administration (OSHA) hazardous waste safety instructor and inspector in order to collect money from individuals who hoped to work on the cleanup effort that followed the spill. KNIGHT created and used multiple false federal identifications to bolster her credibility as an OSHA employee and to convince attendees, who were primarily from the Southeast Asian fishing community, that she could ensure them lucrative employment cleaning the spill. In reality, KNIGHT did not have any connection to OSHA, to the cleanup effort, nor did she have training in hazardous waste safety.
Daniel R. Petrole, Deputy Inspector General for the U.S. Department of Labor’s Office of Inspector General stated, “Today’s sentencing sends a strong message to those who would intentionally engage in fraudulent activity that compromises the integrity of the Department of Labor’s OSHA program.”
“The defendant not only defrauded people who were desperate for jobs, but also created a risk that poorly trained workers could expose both themselves and the public to hazardous waste that was improperly handled or cleaned up,” said Cynthia Giles, Assistant Administrator for EPA’s Office of Enforcement and Compliance Assurance.
KNIGHT claimed her classes satisfied the various safety requirements that all individuals were to complete in order to be employed at a Deepwater Horizon hazardous waste cleanup site. Her fraudulent classes, however, lasted as little as two hours, while the legitimate certifications would take at least six days of classroom training followed by three days of on-site training. At least some attendees later gained access to hazardous waste cleanup sites based on the fraudulent certifications created by KNIGHT.
“OSHA will not tolerate fraudulent training or unscrupulous activity when workers' health and lives may be at stake,” said Assistant Secretary of Labor for Occupational Safety and Health Dr. David Michaels. “Inadequate training jeopardizes the safety and health of workers cleaning up hazardous waste sites.”
At the sentencing, Federal District Court Judge Lance Africk considered statements from victims who recounted how KNIGHT targeted the Southeast Asian fishing communities in southern Louisiana, many of whom did not speak or read English. Court documents explained that because many shrimp grounds were closed from the time of the spill through late 2010, Gulf fishermen had to seek other means of employment. To gain access to these fishermen and their families, KNIGHT convinced young bilingual individuals from Southern Louisiana, who believed her to be an OSHA trainer, that she could be a source of employment for their struggling communities. She then used those individuals to publicize her trainings throughout the Vietnamese, Cambodian and Laotian neighborhoods.
According to court documents, KNIGHT required each attendee to pay between $150 and $300 cash to enter a class, and there were at least 950 victims in the Eastern District of Louisiana. After a short presentation in English, KNIGHT would provide false completion certifications and tell attendees to ready their vessels for BP cleanup work, which she claimed would be coming any day.
This case was investigated by the U.S. Department of Labor Office of Inspector General and the U.S. Environmental Protection Agency Criminal Investigation Division, with assistance from the Occupational Safety and Health Administration, the FBI, investigators from the Florida Fish and Wildlife Conservation Commission and the Plaquemines Parish, La., Sheriff’s office.
The case was prosecuted by Patrick M. Duggan of the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division and Emily K. Greenfield of the U.S. Attorney’s Office for the Eastern District of Louisiana.
Columbus Man Pleads Guilty to Tweeting Threats Against President of the United StatesRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
COLUMBUS – Daniel L. Temple, 36, of Columbus pleaded guilty in United States District Court to one count of threatening the President of the United States.
Carter M. Stewart, U.S. Attorney for the Southern District of Ohio and Mark Porter, Special Agent in Charge, U.S. Secret Service, announced the plea entered today before U.S. Magistrate Judge Norah McCann King.
According to court documents, on March 24, 2013, the Columbus office of the U.S. Secret Service received a notification that an individual had posted messages on the internet site Twitter.com in which the individual had repeatedly indicated they intended to kill the President of the United States. The notification detailed that the threats were posted via two separate addresses.
Secret Service agents responded to one of the residential addresses which was in Westerville, Ohio and spoke with Temple’s parents. Secret Service agents also went to Temple’s residence in Columbus and spoke with him. Temple told them that he had posted all of the messages which threatened to kill the President out of a sense of frustration with the current political climate.
Temple’s crime is punishable by a sentence ranging from probation to five years in prison. The court will conduct a pre-sentence investigation before determining the sentence and schedule a date for sentencing. Temple will remain on bond until sentencing.
U.S. Attorney Stewart commended the investigation by Secret Service agents, and Assistant U.S. Attorney Michael Hunter, who is representing the United States in this case.
Carbondale Man Pleads Guilty to Illegally Possessing A FirearmRead the Press Release
On May 9, 2013, Andre V. Scott, of Carbondale, IL, plead guilty in United States District Court in Benton to an indictment charging him with being a felon in possession of a firearm, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today.
Facts revealed at the time of Scott’s plea that, on November 29, 2012, Scott was involved in a dispute in Carbondale. During the dispute, Scott retrieved a Charter Arms, .38 special revolver and threatened multiple persons with the gun. Scott is prohibited from possessing firearms based on a prior felony conviction for Unlawful Possession of a Controlled Substance. Scott is currently being held without bond pending an August 22, 2013, sentencing date. At that time, he faces a penalty of up to 10 years in prison, up to 3 years’ supervised release following any prison sentence, and a fine of up to $250,000. The firearm Scott illegally possessed is also subject to forfeiture to the United States.
The investigation was conducted by the Carbondale Police Department and the Bureau of Alcohol, Tobacco, Firearms, and Explosives.
The case is assigned to Assistant United States Attorney Amanda A. Robertson for prosecution.
Bar Club Operators Sentenced in South Beach “B-Girls” Private Clubs SchemeRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Michael B. Steinbach, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, Alysa D. Erichs, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI), Miami Field Office, and Raymond A. Martinez, Chief, Miami Beach Police Department, announced the sentences of two individuals who were convicted of various fraud charges in connection with the South Beach “B-Girls” fraud scheme.
U.S. District Judge Robert M. Scola sentenced Albert Takhalov, 31, of Sunny Isles Beach, to 12 years in prison, and Isaac Feldman, 51, of Sunny Isles Beach, to 8 years and 4 months in prison. A third defendant convicted at trial, Stanislav Pavlenko, 41, of Aventura, is scheduled to be sentenced on May 31, 2013.
Takhalov, Feldman, and Pavlenko were convicted on December 20, 2012, of conspiracy to commit wire fraud, in violation of Title 18, United States Code, Section 1349; and conspiracy to commit money laundering, in violation of Title 18, United States Code, Section 1956 (h). Pavlenko and Takhalov were also convicted of various substantive wire fraud counts, in violation of Title 18, United States Code, Section 1343. Additionally, Takhlaov was convicted of conspiracy to defraud the U.S. Department of Homeland Security and U.S. Customs and Border Protection, in violation of Title 18, United States Code, Section 371. Kristina Takhalov pled guilty in the middle of trial to substantive wire fraud counts. Siavash Zargari, 48, of Miami Beach was acquitted. Last year, a total of nineteen defendants were charged in this fraud conspiracy. Thirteen defendants pled guilty before trial. One defendant, Andrejs Romanovs, remains a fugitive.
According to evidence presented at trial, the defendants were the organizers and investors in a criminal organization, which owned and operated numerous private clubs in South Beach. The organization brought Eastern European women into the United States illegally to work as “Bar Girls” or “B-Girls,” to lure out-of town businessmen and tourists from legitimate South Beach clubs to the defendants’ private clubs.
According to testimony and other evidence presented at trial, the defendants would charge the victims exorbitant prices for bottles of alcohol in as many as six private clubs. After the victims were either drugged without their knowledge or too intoxicated to understand what was happening, the B-Girls would order bottles of wine or champagne, make unauthorized charges on the victims’ credit cards and sometimes even forge the victims’ signatures. In order to pay the B-Girls who were illegally working, the defendants set up shell companies to conceal profits and salary payments from their criminal enterprise.
Mr. Ferrer commended the investigative efforts of the FBI, the Miami Beach Police Department, and ICE’s Homeland Security Investigations. The case was prosecuted by Assistant U.S. Attorneys Richard D. Gregorie and Michael Thakur and Department of Justice Trial Attorney Clay Porter.
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.
Army National Guard Captain Charged for Alleged Role in Bribery and Wire Fraud Scheme and Two Former Soldiers Sentenced for Their Roles in a Related SchemeRead the Press Release
A Texas Army National Guard captain has been charged for his alleged role in a bribery and wire fraud scheme and two former soldiers in the Texas Army National Guard were sentenced for their roles in a separate scheme to defraud the National Guard Bureau and its contractor, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division.
These cases arose from an investigation concerning allegations that former and current soldiers and military and civilian contract recruiters in the San Antonio and Houston areas engaged in a wide-ranging scheme to obtain fraudulent recruiting referral bonuses. To date, 11 people have been charged in this ongoing investigation, including yesterday’s 17-count indictment of Fabian Barrera, 46, of Schertz, Texas, a Captain in the Army National Guard accused of personally obtaining more than $185,500 in fraudulent recruiting bonuses. Barrera made his initial appearance on May 16, 2013, in the U.S. District Court for the District of Maryland, before U.S. Magistrate Judge Jillyn K. Schulze. The public is reminded that an indictment is merely a charge and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
According to court documents, in approximately September 2005, the National Guard Bureau entered into a contract with Document and Packaging Broker, Inc., to administer the Guard Recruiting Assistance Program (G-RAP), which was designed to offer monetary incentives to soldiers who referred others to join the U.S. military. To participate in the G-RAP, an eligible soldier needed to establish an online recruiting assistant (RA) account. Through these recruiting programs, a participating soldier could receive up to $3,000 in bonus payments for every person he or she referred to serve in the U.S. military.
Barrera, an RA in the G-RAP between approximately December 2005 and February 2012, is alleged to have paid Army National Guard recruiters for the names and Social Security numbers of potential soldiers and used this information to claim that he was responsible for referring dozens of potential soldiers to join the military, though he allegedly did not recruit any of those people. As a result, Barrera is accused of receiving more than approximately $185,000 in fraudulent recruiting bonuses, and the indictment alleges that Barrera paid various recruiters in the form of checks and cash payments.
Former Staff Sergeant Jermaine Britt, 39, of Richmond, Texas, was sentenced today to 30 months in prison by Chief U.S. District Judge Biery for his role in obtaining $86,500 in fraudulent bonus payments. According to court documents, Britt served as a recruiter in the Houston area from approximately November 2006 until November 2012. He conspired with former Specialist Stephanie Heller, 37, of Wharton, Texas, who was an RA in the G-RAP and claimed approximately $44,500 in fraudulent bonuses through her account. Heller made approximately $19,750 in bribe payments to Britt, who served as a recruiter in the Houston area from approximately November 2006 until November 2012. Heller also made a $1,000 bribe payment to another recruiter in exchange for Britt and that recruiter providing the personal information of potential soldiers. In addition to accepting bribes from Heller, Britt worked with at least two other RAs to claim fraudulent bonus payments and accepted a total of $23,750 in bribe payments in exchange for providing the personal information of potential soldiers.
Britt also admitted that he obstructed justice by coaching Heller to make false statements to federal agents. In September of 2012, Heller recorded two conversations with Britt. In those conversations, Britt told Heller how she could provide false stories to federal agents to innocently explain incriminating conduct, such as large cash withdrawals from her bank account, her receipt of emails from Britt in which Britt provided the personal identifiers of potential soldiers, and her use of Britt’s military computer to make referrals under her RA account.
Britt pleaded guilty to conspiracy to commit bribery and wire fraud, bribery, and obstruction of justice on Nov. 9, 2012. Heller pleaded guilty to conspiracy to commit bribery and wire fraud and bribery on Oct. 4, 2012. Heller was also sentenced today to five years’ probation, and her cooperation was instrumental in the case against Britt.
These cases are being prosecuted by Trial Attorneys Edward J. Loya Jr., Brian A. Lichter, and Sean F. Mulryne of the Criminal Division’s Public Integrity Section. These cases are being investigated by agents from the San Antonio Fraud Resident Agency of the Major Procurement Fraud Unit, U.S. Army CID, and from the San Antonio Field Office of the Internal Revenue Service Criminal Investigation.
Arizona Man Sentenced for Failure to Pay Child SupportRead the Press Release
United States Attorney Brendan V. Johnson announced that a Laveen, Arizona man charged with Failure to Pay Legal Child Support was sentenced on May 13, 2013 by U.S. District Court Judge Karen E. Schreier.
Ray Young, age 49, was sentenced to 8 months’ home confinement, 5 years of probation, a $100.00 special assessment to the Federal Crime Victims Fund, and child support restitution in the amount of $14,542.98.
Young was indicted for failing to pay over $13,199.00 past due child support by a federal grand jury on April 4, 2012. He was ordered by the Arizona Superior Court, Maricopa County, AZ, to pay $117.00 per month for his minor child, commencing February 1, 2005. At the time of indictment, he had not made a child support payment since March of 2009, and the total arrearage amount was $13,199.98. He pled guilty to the charge on May 13, 2013.
This case was investigated the Department of Health and Human Services, Office of Inspector General. Assistant U.S. Attorney Thomas J. Wright prosecuted the case.
Arizona Man Indicted in Boise Federal Court on Twenty-six Counts of Wire FraudRead the Press Release
Allegedly Embezzled Approximately $449,643 from Click Sales, Inc.
BOISE – Christopher Myers, 37, of Cave Creek, Arizona, was indicted today by a federal grand jury in Boise on 26 counts of wire fraud, U.S. Attorney Wendy J. Olson announced. An initial court appearance is set for May 20 at 10:00 a.m. MDT, before U.S. Magistrate Judge Larry M. Boyle at the federal courthouse in Boise.
According to the indictment, Myers was employed as the comptroller for Click Sales, Inc., from 2006 through November 2011. Click Sales, Inc. operated a Boise-based internet business that facilitated payments between retailers and consumers. It received payments from consumers for the purchase price of goods and services, kept a portion of the purchase price as commission, and remitted the remainder to the retailers by checks and wire transfers. Some of Click Sales’ retailer-clients failed to timely cash these checks. As the comptroller, Myers was responsible for maintaining a spreadsheet listing these “issued but uncashed” checks.
The indictment alleges that beginning in August 2008, Myers began wire transferring funds from the company’s bank account to his personal bank accounts. These funds belonged to Click Sales and corresponded to the funds set aside for “issued but uncashed” checks to retailer-clients. In total, Myers allegedly wired approximately $449,643 of Click Sales’ funds to his personal bank accounts. According to the indictment, he used these funds to make personal expenditures, including mortgage payments, and to subsidize his personal investment and retirement accounts.
Each count of wire fraud is punishable by up to 20 years in prison, a maximum fine of $250,000 or twice the gain or loss from the offense, and up to three years of supervised release.
The case was investigated by the Boise Police Department and the Federal Bureau of Investigation.
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.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
Alabama Women Receives Four Years in Prison in A Stolen Identity Refund Fraud SchemeRead the Press Release
Montgomery, Alabama - Larreka Jackson was sentenced to 48 months in prison for her role in a multi-million dollar conspiracy to use stolen identities to obtain tax refunds, announced George L. Beck, U.S. Attorney for the Middle District of Alabama. Jackson was also ordered to pay restitution in the amount of $721,519.12. In January 2013, Jackson pleaded guilty to one count of conspiracy to file false claims and to one count of aggravated identity theft.
On August 15, 2012, a federal grand jury in Montgomery returned a 25-count indictment charging Larreka Jackson for conspiring to file false tax returns using stolen identities, filing false claims, wire fraud and aggravated identity theft. According to court documents, Jackson and Chiquanta Davis operated a tax preparation business called It’s Tax Time in Montgomery, Ala. Jackson and Davis used It’s Tax Time as a front to file false tax returns using stolen identities. Jackson and Davis unlawfully obtained the names and Social Security numbers of actual persons and filed false tax returns using those names. Jackson directed the fraudulent tax refund to bank accounts controlled by her and her co-conspirators.
Chiquanta Davis was previously sentenced to 66 months in prison for her role in the conspiracy.
The case was investigated by special agents of IRS - Criminal Investigation. Trial Attorneys Jason H. Poole and Michael Boteler of the Justice Department’s Tax Division and Assistant U.S. Attorney Todd Brown are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found at justice.gov/tax.
PRESS CONTACT: Clark Morris
Email: [email protected]
Telephone: (334) 551-1755
Fax: (334) 223-7617Alabama Woman Receives Four Years in Prison in Stolen Identity Refund Fraud SchemeRead the Press Release
Larreka Jackson was sentenced yesterday to 48 months in prison for her role in a multi-million dollar conspiracy to use stolen identities to obtain tax refunds, the Department of Justice and the Internal Revenue Service (IRS) announced today. Jackson was also ordered to pay restitution in the amount of $721,519.12. In January 2013, Jackson pleaded guilty to one count of conspiracy to file false claims and one count of aggravated identity theft.
On Aug. 15, 2012, a federal grand jury in Montgomery, Ala., returned a 25-count indictment charging Larreka Jackson with conspiring to file false tax returns using stolen identities, filing false claims, wire fraud and aggravated identity theft. According to court documents, Jackson and Chiquanta Davis operated a tax preparation business called It’s Tax Time in Montgomery, Ala. Jackson and Davis used It’s Tax Time as a front to file false tax returns using stolen identities. Jackson and Davis unlawfully obtained the names and Social Security numbers of actual persons and filed false tax returns using those names. Jackson directed the fraudulent tax refund to bank accounts controlled by her and her co-conspirators.
Chiquanta Davis was previously sentenced to 66 months in prison for her role in the conspiracy.
The case was investigated by special agents of IRS - Criminal Investigation. Trial Attorneys Jason H. Poole and Michael Boteler of the Justice Department’s Tax Division and Assistant U.S. Attorney Todd Brown are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found at www.justice.gov/tax.
Adrian Resident Pleads Guilty to Health Care Fraudand Filing A False Tax ReturnRead the Press Release
The operator of a human resource company pleaded guilty to health care fraud and filing a false tax return, announced U.S. Attorney Barbara McQuade.
Ms. McQuade was joined in the announcement with Special Agent in Charge Erick Martinez of the Internal Revenue Service Criminal Investigation (IRS-CI) Detroit Field Office and Special Agent in Charge Robert D. Foley III of the FBI’s Detroit Field Office.
Jason Syrek, age 39, of Adrian pleaded guilty before United States District Judge Paul D. Borman on May 15, 2013.
According to court records, between May 2008 and December 2010, Syrek engaged in health care fraud and tax fraud while operating CAS Resources of Adrian, Michigan. CAS Resources provided outsourcing of human resource services, such as payroll, taxes and employee benefits administration, including health care coverage.CAS collected $1.75 million in premiums from client companies in November and December 2010, an amount due to Blue Cross Blue Shield of Michigan (BCBSM), but never paid by Syrek. He admitted diverting these funds for personal use.
According to the plea agreement, in January, 2011, Syrek as the Director of CAS Resources filed a Form 941 for 2010: Employer’s Quarterly Federal Tax return for the third quarter. The Form 941 was filed with the IRS and stated that CAS Resources paid $1,862,902 in payroll taxes. Syrek knew he had diverted these funds for his own personal use and only paid $633,332 in payroll taxes. In addition to the third quarter Form 941 for 2010, Syrek filed approximately 7 other Form 941s with the IRS which he did not pay. In total, from 2010 through 2011, Syrek’s tax due is $13.4 million.
Syrek used the money to buy beachfront properties, several cars, a boat and investment properties. In order to pay his debt, Syrek will forfeit his homes, beach properties in Florida, 2009 32.5’ Sea Ray Boat and cars to include a 2008 Ferrari F430 and 2008 Porsche Boxster.
“Fraud schemes like this one may involve sophisticated methods, but they are nothing more than stealing. This defendant robbed health care programs and taxpayers for his personal benefit,” McQuade said.
“Syrek’s conduct was egregious in that he effectively stole funds that were withheld on behalf of employees,” said Erick Martinez. “His actions cost the government $13.4 million dollars in tax loss alone.”"Those who commit health care fraud and other related crimes will face severe penalties for their illegal acts,” stated FBI Special Agent in Charge Foley. “The FBI is committed to working with the IRS and other agencies to bring these individuals to justice."
Sentencing is scheduled for August 13, 2013. Syrek faces a maximum sentence of 87 months imprisonment under the terms of the plea agreement which was taken under advisement by the court, and a fine of up to $250,000. In addition, Syrek has agreed to pay restitution in the amount of $1,754,922.98 to BCBSM and $13,405,212 to the IRS.
This case is being prosecuted by Assistant United States Attorneys Sarah Resnick Cohen and Linda Aouate and investigated by special agents of the IRS Criminal Investigation and the FBI.
16 May 2013
Wakpala Man Sentenced for Possession with Intent to Distribute A Controlled SubstanceRead the Press Release
United States Attorney Brendan V. Johnson announced that a Wakpala, South Dakota man convicted of Possession with Intent to Distribute a Controlled Substance was sentenced on May 13, 2013 by U.S. District Judge Charles B. Kornmann.
Dustin Swimmer, age 27, was sentenced to 37 months of imprisonment, 3 years of supervised release, and a $100 special assessment to the Federal Crime Victims Fund.
Swimmer was indicted by a federal grand jury on February 14, 2012. He pled guilty to a Superseding Information on January 3, 2013. The charge stems from an incident in 2011 in which Swimmer knowingly and intentionally possessed methamphetamine, a Schedule II controlled substance, and assisted in its distribution.
The investigation was conducted by the Northern Plains Safe Trails Drug Enforcement Task Force. Assistant U.S. Attorney Kathryn N. Rich prosecuted the case.
Swimmer was immediately turned over to the custody of the U.S. Marshals Service.
USP-Marion Inmate Sentenced for Possessing A Weapon in PrisonRead the Press Release
Lamar Elmer Smith, 32, an inmate at the United States Penitentiary at Marion, Illinois, was sentenced to an additional prison term of 24 months today in United States District Court in Benton for possessing a weapon in that prison, announced Stephen R. Wigginton, United States Attorney for the Southern District of Illinois. Smith was charged in an indictment by a Federal Grand Jury with possessing a 7 inch long piece of sharpened metal, which appeared to be constructed from fence material and resembled an ice pick. The offense occurred on August 16, 2012. Smith pled guilty to the charge on January 31, 2013.
At the time he possessed the weapon, Smith was serving a 211 month sentence imposed in the Eastern District of Missouri for conspiring to distribute cocaine and possessing a firearm during a drug trafficking crime. The 24 month term of imprisonment was imposed consecutively to that sentence.
In addition to the term of imprisonment, Smith was ordered to pay the United States fines and special assessments totaling $200 and was placed on a 3 year term of supervised release to follow his incarceration.
The case was investigated by the Federal Bureau of Investigation with the assistance of the Federal Bureau of Prisons.
The case was prosecuted by Assistant United States Attorney James M. Cutchin.
Two New Orleans Men Indicted in Heroin ConspiracyRead the Press Release
TERRENCE TYLER, age 23, and TARELL STEVENSON, age 36, both of New Orleans, Louisiana, were charged today in an eight-count indictment by a Federal Grand Jury with distribution of heroin, conspiracy, and related firearms charges, announced U. S. Attorney Dana Boente.
According to the indictment, TYLER and STEVENSON conspired to distribute one hundred (100) grams or more of heroin, from November 2012 to present. The indictment also charges TYLER with possessing marijuana with the intent to distribute it, and with possessing a firearm in furtherance of a drug trafficking crime.
With respect to the heroin charges, TYLER faces a maximum term of imprisonment of forty (40) years, a fine of $5,000,000, and four (4) years of supervised release following any term of imprisonment. If convicted of the firearm charge, TYLER faces an additional term of imprisonment of five (5) years.
STEVENSON faces a maximum term of imprisonment of life, a fine of $8,000,000, and eight (8) 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.
The case is being investigated by the Drug Enforcement Administration and prosecuted by Special Assistant United States Attorney Michael B. Redmann.
(Download Indictment )
Two Men Plead Guilty to Robbing the First State Bank of Bigfork in KelliherRead the Press Release
MINNEAPOLIS—Earlier today in federal court in St. Paul, a 20-year-old Bemidji man pleaded guilty to the December 10, 2012, armed robbery of the First State Bank of Bigfork, which is located in Kelliher, Minnesota. Travis Michael Burns specifically pleaded guilty to one count of aiding and abetting armed bank robbery. Burns, who was indicted on January 16, 2013, along with a co-defendant, entered his plea before United States District Court Judge Donovan W. Frank.
In his plea agreement, Burns admitted that on December 10, 2012, he drove Cody Lowell Troy, age 20, of Mizpah, to the bank for the purpose of robbing it. Burns also admitted waiting in the vehicle while Troy went inside the bank and then driving away again after Troy ran from the bank and got back in the vehicle.
According to a law enforcement affidavit filed in the case, Troy reportedly wore a white protective containment suit, a “Halloween” movie-style mask, Nike Air Jordan shoes, and black gloves during the robbery. Approaching a bank teller, he placed a black backpack on the counter, pointed the shotgun in the teller’s direction, and then pumped the gun. The teller immediately placed money in the backpack, which Troy grabbed before fleeing the premises.On December 12, 2012, police arrested Troy in Bemidji on an outstanding Itasca County warrant for failure to appear in connection with a prior felony. At that time, officers located a red pickup that matched the description of the vehicle two witnesses spotted in the vicinity of the Kelliher bank and driving away from the bank immediately following the December 10, 2012, robbery.
During the subsequent execution of a search warrant at the Bemidji apartment where Burns lived and Troy was staying, authorities seized shotgun shells, a hacksaw, and a loaded sawed-off shotgun, as well as the sawed-off gun stock and barrel. They also recovered a white protective containment suit, black gloves, Nike Air Jordan shoes, and a “Halloween” movie-style mask. The backpack used in the robbery and some money from the bank were recovered in Burns’ bedroom.
On May 14, 2013, Troy pleaded guilty to one count of brandishing a firearm during a crime of violence. In his plea agreement, he admitted robbing the bank while brandishing a 12-gauge, sawed-off shotgun that had a partially obliterated serial number. He stole approximately $3,738.
For his crime, Troy faces a mandatory minimum sentence of ten years in federal prison. Burns faces a potential maximum penalty of twenty- five years in federal prison. Judge Frank will determine their sentences at future hearings, yet to be scheduled.
This case was investigated by the Federal Bureau of Investigation, the Beltrami County Sheriff’s Office, the Headwaters Safe Trails Task Force, and the Minnesota Bureau of Criminal Apprehension. It is being prosecuted by Assistant U.S. Attorneys Manda M. Sertich and Kevin S. Ueland.Two Members of Drug Conspiracy Connected to Mexican Cartel Convicted Following Seven Day TrialRead the Press Release
Two men investigated as part of a wide ranging international drug conspiracy were convicted today in U.S. District Court in Seattle on federal charges related to their drug distribution, announced U.S. Attorney Jenny A. Durkan. RAUL ANCHONDO, 29, was convicted of Conspiracy to Distribute Controlled Substances, Conspiracy to Possess Firearms in Furtherance of Drug Trafficking Crimes & Crimes of Violence, and Possession of Firearms in Furtherance of a Drug Trafficking Crime. RICHARD ANTHONY ORTIZ, 33, was convicted of Conspiracy to Distribute Controlled Substances and Possession of Heroin with Intent to Distribute. The jury deliberated about five hours following the seven day trial. ANCHONDO faces a mandatory minimum 15 years in prison and up to life in prison and ORTIZ faces a mandatory minimum ten years in prison and up to life in prison. They are to be sentenced by U.S. District Judge Robert S. Lasnik on September 27, 2013.
The men were arrested in March 2012, following a lengthy investigation of the drug trafficking ring. According to records filed in the case, during the investigation, agents seized multiple kilos of heroin, pounds of methamphetamine, and more than a dozen firearms, including military-style assault rifles which were bound for cartel members in Mexico. During the course of the investigation, federal agents were able to interdict a shipment of a dozen weapons to Mexico, preventing high powered firearms from crossing the border. In all, 34 people have been charged in the case and the conspiracy leaders in the U.S., Cristian Berrelleza-Verduzco, Victor Berrelleza-Verduzco, and Ivan Berrelleza-Verduzco have all pleaded guilty and will be sentenced in September 2013.
According to testimony at trial, ANCHONDO ran a stash house for drugs and bulk cash in Arizona, and later became a courier, bringing multi-pound loads of methamphetamine and kilos of heroin up to Western Washington in hidden compartments of various load vehicles. The compartments would be loaded with cash for the return trip – as much as $100,000 to $300,000 headed back to Mexico. ANCHONDO helped pack and ship the drugs – the packages were wrapped in a distinctive way with the initials of the drug leaders in Mexico responsible for the load noted on the packaging. At the direction of the conspiracy leaders, members of the conspiracy slept with firearms at their sides to protect the drugs and the cash. ANCHONDO also received two high powered weapons for shipment to Mexico, and used other firearms during the course of the conspiracy. ORTIZ was a kilo quantity distributor of heroin in Western Washington, making calls to arrange drug deliveries even as he was leaving the office of his state community corrections officer. Nearly 500 telephone calls on cell phones associated with ORTIZ tie him to the Washington leaders of the drug conspiracy.
This was an Organized Crime and Drug Enforcement Task Force (OCDETF) investigation, providing supplemental federal funding to the federal and state agencies involved. The case was investigated by the ICE’s Homeland Security Investigations, the Bureau of Alcohol, Tobacco and Firearms (ATF), the Drug Enforcement Administration (DEA), the Lake Stevens Police Department, the Snohomish Police Department, Washington State Patrol, the Snohomish Regional Drug Task Force and the Seattle Police Department.
The case is being prosecuted by Assistant United States Attorneys Vince Lombardi and John McNeil.
Three Sentenced in Connection with Odessa-Based Firearms Straw Purchasing and Trafficking InvestigationRead the Press Release
In Midland today, sentences were handed down to three individuals, including former Odessa, TX, residents Miguel and Michelle Compean and Odessa resident Brian Connell, for their roles in a firearms straw purchasing and trafficking investigation announced United States Attorney Robert Pitman and Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Dallas Field Office Special Agent in Charge Robert Champion.
United States District Judge Robert A. Junell sentenced 28-year-old Brian Connell to 60 months in federal prison followed by three years of supervised release. On February 25, 2013, Connell pleaded guilty to one count of conspiracy to smuggle goods from the United States and one count of giving a false statement to a federal official.
Judge Junell also sentenced Greenville, TX, residents 33–year-old Miguel Angel Compean, and his wife, 27-year-old Michelle Compean to 121 months in federal prison and 60 months probation, respectively. On February 11, 2013, Miguel Compean pleaded guilty to one count of conspiracy to smuggle goods from the United States, one count of making a false statement in the acquisition of a firearm and one count of aggravated identity theft. On February 20, 2013, Michelle Compean pleaded guilty to one count of making a false statement in the acquisition of a firearm.
By pleading guilty, the defendants admitted to participating in a scheme which involved surreptitiously purchasing approximately 100 firearms, including AK-47 style rifles and pistols, from various firearms dealers in Odessa, Fort Worth, Dallas, Brenham and Mesquite, TX, in order to smuggle them from the United States into Mexico during a 13-month period beginning in December 2011. Miguel Compean admittedly purchased firearms for himself by using a relative’s name, date of birth and social security number. Compean also admitted to recruiting his wife, Michelle, and Brian Connell to purchase firearms on his behalf and paying Connell $300 for each firearm that Connell straw purchased and gave to Compean. Michelle Compean and Brian Connell both admitted to making false statements on ATF Form 4473 at the time of a firearm purchase claiming to be the actual buyer.
This case was investigated by ATF agents. Assistant United States Attorney Will Tatum prosecuted this case on behalf of the Government.
Three Henderson, Kentucky Residents Face Federal Charges in Multiple Henderson and Daviess County Bank RobberiesRead the Press Release
– Ten banks and one convenience store robbed during a nearly three year period
BOWLING GREEN, Ky. – The federal grand jury meeting in Bowling Green, Kentucky this week charged three Henderson County, Kentucky residents with multiple counts of bank robbery and brandishing a firearm during a crime of violence, announced David J. Hale, United States Attorney for the Western District of Kentucky.
Weston Neel Hurd, age 39, of Henderson, Kentucky was charged with robbing two banks located in Owensboro, Kentucky and one bank located in Henderson, Kentucky between August 6, 2012 and December 28, 2012. Specifically, Hurd is alleged to have brandished a firearm during the robbery of the First Security Bank, located on Frederica Street, in Owensboro, of $1,131 on December 28, 2012. Further, according to the indictment, Hurd, through force, violence and intimidation allegedly robbed the Ohio Valley Financial Group, in Henderson, Kentucky of $2,651 on August 6, 2012 and that Hurd robbed the Kentucky Telco Federal Credit Union, located in Owensboro, of $2,878 on October 2, 2012.
If convicted at trial, Hurd faces no more than 20 years for counts one and two, no more than 25 years for county three, and no less than seven years to life for count 4, for a combined total of 72 years in prison including life, a $250,000 fine for each count, and five years of supervised release. Hurd is being held in the Daviess County Detention Center.
This case is being prosecuted by Assistant United States Attorney Daniel P. Kinnicutt, and is being investigated by the Federal Bureau of Investigation (FBI), the Owensboro Police Department and Henderson Police Department.
Meiesha R. Sharp, 23, of Henderson, Kentucky was charged in a four count federal grand jury indictment with robbing a convenience store and a bank, both located in Henderson, Kentucky and with brandishing a firearm, specifically an AMT, Model Backup, .380 caliber pistol, during a crime of violence. According to the indictment, Sharp robbed the Kangaroo Express store, located in Henderson, on June 25, 2012 and robbed the Fifth Third Bank, located in Henderson, of $29,068.95 on June 29, 2012, and on both occasions did assault and put in jeopardy the life of another person by the use of a dangerous weapon, that is a firearm.
If convicted at trial, Sharp faces 77 years and up to including life in prison, a fine of $1,000,000 and no more than five years of supervised release for each charge. Sharp remains in the Henderson County Detention Center.
This case is being prosecuted by Special Assistant United States Attorney Micah Reyner and is being investigated by the Federal Bureau of Investigation (FBI) and the Henderson Police Department.
James A. Morris, 53, of Henderson, Kentucky was charged with robbing five banks in Henderson, and one bank in Webster County, Kentucky between July 23, 2010 and January 17, 2013. An additional charge of money laundering was added in the Superseding Indictment. According to the indictment, Morris, through force, violence and intimidation, allegedly robbed; Green River Credit Union located in Henderson, on January 17, 2013; Independence Bank located in Henderson, on August 22, 2012; Bank of Henderson, on August 22, 2012; Green River Credit Union, in Henderson, on July11, 2012; U.S. Bank, in Henderson, on May 24, 2011; and Integra Bank, in Poole, Kentucky, on July 23, 2010.
If convicted at trial, Morris faces no more than 20 years in prison for each count for a combined maximum of 140 years, a $250,000 fine for each count for a combined maximum of $1,750,000, and supervised release for a period of three years. Morris remains in custody awaiting arraignment on the new charge.
This case is being prosecuted by Assistant United States Attorney Joshua Judd and is being investigated by the Federal Bureau of Investigation (FBI).
The indictment of a person by a Grand Jury is an accusation only and that person is presumed innocent until and unless proven guilty.
Thirty-three Defendants Charged in Staged Automobile Accident SchemeRead the Press Release
92 defendants have been charged to date in Operation Sledgehammer I-VI
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Michael B. Steinbach, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, Michael J. DePalma, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), Jeff Atwater, Florida Chief Financial Officer, and Dave Aronberg, State Attorney, Office of the State Attorney for Palm Beach County, announced the unsealing of a federal indictment and three separate criminal Informations charging thirty-three (33) defendants, including doctors, licensed professionals and clinic owners, for their participation in a massive staged automobile accident scheme based in Palm Beach and Miami-Dade Counties, Florida. Of the 33 defendants charged, 26 were arrested or are expected to surrender. Four of the defendants are known to have fled to Cuba, with an additional three of the defendants have not been located at this time and are considered fugitives.
The charges announced today are the culmination of a three-year joint federal and state law enforcement investigation, dubbed Operation Sledgehammer, into a series of chiropractic clinics that were allegedly involved in staged accidents and filing false insurance claims. Starting with Operation Sledgehammer I in June 2011 and including the defendants charged today in Operation Sledgehammer VI, 92 defendants have been charged for their participation in this automobile insurance fraud scheme. Of those 92 defendants, 56 have been charged federally by the U.S. Attorney’s Office, resulting in court-ordered restitution of more than $5 million to the defrauded insurance companies. Thirty-six defendants have been charged by the Palm Beach County State Attorney’s Office.
Operation Sledgehammer VI, announced today, has resulted in a Second Superseding Indictment and three separate criminal Informations charging 33 defendants. The Second Superseding Indictment charges 30 individuals, including ring leaders Vladimir Lopez and Lazaro Vigoa Mauri, with conspiracy to commit and substantive mail fraud (Counts 1–91), conspiracy to commit and substantive money laundering (Counts 92-153), and conspiracy to and actual structuring of financial transactions (Counts 154-183). The indictment also seeks the forfeiture of proceeds of the fraud, including $714,621 in currency, and any real or personal property derived from the fraud. Attached is a list of all defendants charged in the Second Superseding Indictment, including their names, ages, and cities of residence. In addition, defendants Lawrence Schechtman, 45, Parkland, Olinda Rodriguez, 39, West Palm Beach, and Iris Roca, 41, of Davie, were charged in three separate Informations for their participation in staged accident fraud schemes. These three defendants will be surrendering to the court.
U.S. Attorney Wifredo A, Ferrer stated, “Staged accident automobile insurance fraud is not a victimless crime. Rather, it affects every driver in Florida, as fraud inevitably causes our insurance rates to rise. Worse still, staged accidents make our streets more dangerous and distract police from answering legitimate distress calls. We hope that this continued operation will send a message to those who seek to line their pockets through fraud. Together with our federal and state law enforcement, regulatory and private industry partners, we will find you, we will prosecute you, we will take away your ill-gotten money, and you will face substantial prison time.”
“If you get upset about your car insurance premiums going up, this crime is one of the reasons why,” said William J. Maddalena, Assistant Special Agent in Charge of FBI Miami. “Every time an insurance payout is made for a staged accident in Florida, we all feel the pain in the pocketbook. The FBI and our partners with the Greater Palm Beach Health Care Fraud Task Force will continue to use all investigative techniques to bring to justice those responsible for this type of fraud.”
“Consistently, law-breakers try to hide their crimes by laundering their ill-gotten gains and by structuring financial transactions to avoid detection by law enforcement. Today’s indictment reflects the futility of that strategy,” said IRS-CI Acting Special Agent in Charge Michael J. DePalma. “By following the money trail, IRS-CI agents will continue to aggressively target these defendants’ finances and their freedom.”
“These staged accidents are the lifeblood of Personal Injury Protection (PIP) fraud, which has cast a shadow over Florida’s roads,” Florida Chief Financial Officer Jeff Atwater said. “Every Florida family is negatively affected by these fake crashes in the form of high auto insurance premiums. I am proud of the collaborative efforts across local, state and federal agencies to put these criminals behind bars.”
According to the charging documents, between approximately October 2006 and December 2012, the defendants staged automobile accidents and thereafter caused the submission of false insurance claims through chiropractic clinics they controlled. To execute the scheme, the true owners of the chiropractic clinics allegedly recruited individuals, who had the medical or chiropractic licenses required by the state to open a clinic, to act as “nominee owners” of the clinics. The defendants also recruited individuals, whom they referred to as “Perro” and “Perra,” to participate in the accidents, and others to help the clinics launder the insurance proceeds. The defendants also hired complicit chiropractors and therapists who prescribed and billed for unnecessary treatments and/or for services that had not been rendered. Thereafter, complicit clinic employees prepared and submitted claims to the automobile insurance companies for payment for these unnecessary or non-rendered services. Twenty-one clinics participated in this scheme. A list of these clinics is attached to this release.
If convicted, the defendants face the following possible maximum statutory sentences: 20 years in prison for conspiracy to commit mail fraud, substantive mail fraud, and conspiracy to commit money laundering; 20 years for each count of substantive money laundering; 5 years for conspiracy to structure financial transactions, and 10 years for structuring financial transactions involving more than $100,000 in one year. Restitution to the victims of the offenses is mandatory.
Mr. Ferrer commended the efforts of the FBI, IRS-CI, the Florida Department of Insurance Fraud, the Palm Beach County State Attorney’s Office, and the Greater Palm Beach County Health Care Fraud Task Force for their outstanding work in this case. Mr. Ferrer also recognized the National Insurance Crime Bureau (NICB) for its collaboration and assistance in this investigation. Mr. Ferrer thanked the U.S. Marshal’s Service and Customs and Border Protection for their assistance in today’s arrests. The federal cases are being prosecuted by Assistant U.S. Attorney A. Marie Villafaña and the state cases are being prosecuted by the Palm Beach County State Attorney’s Office.
An indictment or Information is only an accusation and a defendant is presumed innocent until proven guilty.
Attachments: Operation Sledgehammer Defendant List (PDF)
Operation Sledgehammer Clinics List (PDF)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.
Texas Man Sentenced for Distributing "Bath Salts"Read the Press Release
ROCHESTER, N.Y. - U.S. Attorney William J. Hochul, Jr. announced today that Dung Lam Le, 27, of Dallas, Texas, who was convicted of conspiracy to distribute 4-methyl-N-ethylcathinone, a controlled substance analogue, more popularly known as “4-MEC” or “bath salts,” was sentenced to 44 months in prison by U.S. District Judge Frank P. Geraci.
Assistant U.S. Attorney Douglas E. Gregory, who handled the case, stated that agents from the Drug Enforcement Administration, acting in an undercover capacity, were able to purchase significant quantities of the controlled substance analogue by communicating with the defendant via e-mail and on-line. Agents seized over one kilogram of 4-methyl-N-ethylcathinone, which had been sent by Le to a co-conspirator in the Rochester area.
The Drug Enforcement Administration, along with many local law enforcement agencies, have increased efforts over the last year to combat the importation, distribution, and use of designer drugs known as “bath salts”, which have a similar chemical structure to “methcathinone”, a Schedule I controlled substance. “Bath salts” are synthetic stimulants that have no real value as a bath salt or other bath product. Their only known purpose is to be consumed by humans as a recreational drug. Users of “bath salts” typically snort the drug in powder form or ingest the drug in pill form, but some users have been known to smoke it, or inject the drug intravenously. The drug has proven to affect users in a variety of ways, but users typically experience highs similar to those experienced after ingesting MDMA or “ecstasy”, and stimulants like cocaine and methamphetamine (euphoria and increased energy). Companies located in China and India are principally responsible for manufacturing and exporting “bath salts” to the United States. Shippers of “bath salts” typically mislabel the product to evade detection by law enforcement, and sell the drugs via the Internet to distributors around the world, including in the United States. Distributors in the United States then sell the drugs online, through traditional distribution methods or by retail distribution at convenience stores, gas stations, and “head shops” (retail stores specializing in drug paraphernalia) in packets labeled “bath salts.” “Bath salts” have been shown to have a number of adverse and largely unpredictable effects, which include psychotic episodes, delusions, panic attacks, increased heart rate, chest pain, agitation, dizziness, nausea and vomiting.The sentencing is the result of an investigation by Special Agents of the Drug Enforcement Administration, under the direction of Brian R. Crowell, Special Agent in Charge, New York Field Division.
Statement Regarding Inspector General Report on the Handling of Former <br /> Known or Suspected Terrorists Admitted into the Federal Witness Security ProgramRead the Press Release
For more than 40 years, the federal Witness Security (WitSec) Program has enabled the government to bring to justice the most dangerous criminals by providing critical protection for witnesses fearing for their safety. Over the last two decades, it has been a key tool in thwarting planned attacks and prosecuting those responsible for some of the worst acts of terrorism in American history, including the 1993 World Trade Center bombing, the 1995 bombing of the Alfred P. Murrah Federal Building in Oklahoma City and the 2009 New York City subway suicide-bomb plot. No terrorism-linked witness has ever committed an act of terrorism after entering the program.
The number of former known or suspected terrorists ever admitted into the WitSec Program represents a fraction of one percent of the total WitSec population, and the vast majority were admitted into the program prior to Sept. 11, 2001. To date, the FBI has not identified a national security threat tied to the participation of terrorism-linked witnesses in the WitSec program.
All WitSec participants undergo careful vetting before being admitted into the program, including a complete psychological evaluation and consideration of the witness’s value to the underlying prosecution, the nature of the threat against the witness and the potential risk to the relocation community. Witnesses are admitted only if relevant federal law enforcement officials have determined that the witness is suitable for the program and the need to admit the witness outweighs any potential risk to the public. Those officials include: the FBI or other sponsoring law enforcement agency investigating the underlying criminal conduct; the U.S. Attorney for the district prosecuting the underlying criminal conduct; the U.S. Marshals Service (USMS), which protects witnesses who require a change of identity and relocation services; and the Department’s Office of Enforcement Operations (OEO), which oversees the WitSec Program.
The Justice Department agrees with the Inspector General’s audit report that the WitSec Program’s requirements for admitting and monitoring participants needed to be enhanced for terrorism-linked witnesses. In May 2012, the Justice Department developed and implemented formal protocols that the Inspector General recognized as a “significant milestone.” These enhancements, which have been in effect for a year, include:
• Complete information sharing between USMS, OEO, FBI, the Terrorist Screening Center (TSC) and the National Joint Terrorism Task Force (NJTTF)
• A highly restrictive travel policy that prohibits without exception WitSec participants with a Watchlist status of “No Fly” from traveling on commercial flights
• Consultation with the Justice Department’s National Security Division whenever a terrorism-linked witness is admitted into the WitSec Program
• Close coordination with the Department of Homeland Security in cases involving foreign nationals
The Justice Department has completed action on 15 of the 16 recommendations made in the Inspector General’s report. The sole remaining recommendation requires the Department to perform a manual review of all 18,000-plus case files of WitSec Program participants dating back to the 1970s. The department has thus far completed its review of nearly 20 years of records.
Related Materials:
ODAG Public Response to OIG WitSec Interim Audit Report
State Representative Tyrone Brooks, Sr. Indicted on Fraud and Tax ChargesRead the Press Release
Defendant Charged With Misappropriating Almost $1 Million in Charitable Donations
ATLANTA - A federal grand jury has indicted Tyrone Brooks, Sr. on charges that he misappropriated almost $1 million in charitable funds from Universal Humanities, a charity he founded in 1990, and the Georgia Association of Black Elected Officials (GABEO).
“This is a disappointing day. Representative Brooks has done much good in his life, both as a state legislator and civil rights leader," said United States Attorney Sally Quillian Yates. "But the indictment charges that over many years, Representative Brooks misappropriated nearly one million dollars in charitable donations intended to provide literacy training in underserved communities, and from GABEO – the organization for which he has served as president since 1993. Sadly, by diverting these funds to his own use, Representative Brooks deprived those most in need of critical assistance.”
Mark F. Giuliano, Special Agent in Charge, FBI Atlanta Field Office, stated: “While the FBI continues to make public corruption matters its number one priority within its criminal branch, we do so with a clear commitment to the rule of law. Today’s federal grand jury indictment reflects the commitment of the FBI and its law enforcement partners to follow the facts of these investigations wherever they lead us.”
“Mr. Brooks exploited two charitable organizations for his own personal financial gain which came at the expense of the intended beneficiaries of the charitable donations. IRS Criminal Investigation is committed to investigating individuals who use charitable organizations for their personal gain,” stated Veronica Hyman-Pillot, Special Agent in Charge, IRS Criminal Investigation. “Mr. Brooks defrauded not only the donors but also the American taxpayer by evading his tax obligations. Tax compliance should and must be equally shared among all Americans.”
Brooks, 67, of Atlanta, Ga., was charged by a federal grand jury in a 30-count indictment that includes charges of mail, wire and tax fraud. The indictment charges that, from the mid-1990s through 2012, Brooks solicited contributions from individuals and corporate donors to combat illiteracy and fund other charitable causes, but then used the money to pay personal expenses for himself and his family. The indictment was returned today, and Brooks will appear for arraignment on a date set by the Court.
According to the Indictment: Universal Humanities SchemeThe indictment charges two fraud schemes, the first involving a tax-exempt charity, Universal Humanities, Inc., that Brooks established in the early 1990s. From at least 1995 through 2012, Brooks solicited contributions for Universal Humanities from corporate and individual donors purportedly to combat illiteracy in disadvantaged communities in Georgia and across the southeastern United States, eventually raising more than $780,000. Donors included the Coca-Cola Company ($400,000), Georgia Pacific Company ($140,000), Northside Hospital ($240,000), and others who gave smaller amounts. Brooks made specific false representations in his written solicitations about the work that Universal Humanities was doing to combat illiteracy and how the donated funds would be used, claiming that Universal Humanities had established literacy programs and was conducting workshops and tutoring and mentoring students. He also falsely claimed that Universal Humanities utilized a staff and operated under the direction of a board of directors.
The indictment alleges that in reality, Brooks did not use the donations to promote and address literacy in Georgia or elsewhere, or to retain a staff, occupy office space, fund workshops, hire instructors, or conduct programs attended by students. Instead, Brooks used the money to pay personal expenses for himself and members of his family, including home repairs, furniture, lawn service, life insurance, entertainment, personal credit card expenses, utility bills, food and clothing, dry cleaning, electronic equipment, jewelry, and payments on personal loans, among other personal expenses.
Brooks generally accomplished the diversion of funds by depositing the solicited donations into a bank account he established in the name of Universal Humanities, then almost immediately transferring the funds to a personal account, from which he paid personal expenses. At times, Brooks paid personal expenses directly from the Universal Humanities account.
More specifically, the indictment alleges that:
- Contrary to Brooks’ representations to donors, Universal Humanities never had a functioning board of directors. The individuals listed on the solicitations and incorporation documents were unaware that Brooks had identified them as Universal Humanities board members, and most had never even heard of the organization;
- Brooks represented in a 1999 solicitation that Universal Humanities had been “so successful” in Georgia that it was expanding its programs to other states in the Southeast, and expected to have a projected budget of $500,000. In truth, Universal Humanities did not have an operational literacy program inside or outside of Georgia, nor did it have a projected budget of $500,000;
- Brooks represented in a 2010 solicitation that Universal Humanities’ literacy program, which Brooks called “Visions of Literacy,” consisted of a host of “outlets” created to increase literacy and included activities such as seminars, workshops, tutoring, mentoring, and rallies. Brooks further claimed that Universal Humanities and its “staff ha[d] over 40 years’ experience in assisting U.S. communities through a variety of efforts,” and that 10,000 people would be the direct beneficiaries of the literacy program. In truth, Universal Humanities and Brooks did not operate a functional literacy program, host the literacy activities described in the solicitation, or have a staff;
- Brooks represented in a 2011 solicitation that the Visions of Literacy program conducted monthly workshops, seminars, and advocacy outreach activities, and that the solicited funds would be used to hire retired teachers and administrators as “educational consultants” to gain “targeted results.” Instead, Brooks spent the funds donated in response to this solicitation on payments for a personal credit card charges, personal loan payments, utility bills, and a $500 check to a family member as a Christmas gift;
- Unbeknownst to GABEO, Brooks represented in a 2011 solicitation that GABEO was a “sister organization” to Universal Humanities and that GABEO was committed to the “growth and advancement of Universal Humanities.” Brooks falsely claimed that GABEO members spoke in public forums to implement and promote Universal Humanities’ programs; that GABEO members taught at Universal Humanities meetings and classes “alongside” Universal Humanities community organizers; and that GABEO members served on the Universal Humanities’ board of directors, steering committee, fundraising committee, and program management committees, though the purported committees were nonexistent; and
- Brooks submitted a form to the IRS under oath claiming that Universal Humanities incurred expenses of $62,652 for printing, postage, and publications in 2007; $67,601 for “commemorative events” in 2008; and $53,184 for charitable contributions, fundraising, and conferences in 2009. Just one year before, Brooks had submitted the same form under oath claiming that for the same years, Universal Humanities incurred expenses of only $8,900 for each of those years and had generated income of over $50,000.
As a result of Brooks’ misappropriation of donated funds, the intended beneficiaries of the funds did not receive the needed literacy training or assistance.
GABEO Scheme
A second related scheme charged in the indictment alleges that Brooks also diverted charitable donations he solicited on behalf of GABEO and used much of the money to pay personal expenses for himself and his family. GABEO is an organization of state, county, and municipal elected officials that promotes voter registration, crime prevention, literacy and economic empowerment initiatives.
The indictment alleges that Brooks solicited contributions to GABEO from corporations, organizations and individuals. When Brooks was elected as GABEO’s President in 1993, the organization already maintained an official bank account at a local bank. This account was administered by GABEO’s Treasurer, and disbursements required two signatures by GABEO Board members. In December 1997, Brooks secretly opened a second GABEO bank account at a different bank. Brooks set himself up as the sole signatory on this account, and had the account statements sent to his address rather than the address of the GABEO Treasurer. Brooks then deposited the donations he solicited on behalf of GABEO into this undisclosed account, and used much of these funds to pay personal expenses for himself and his relatives.
Between 2002 and 2012, businesses, civic, religious groups and individuals contributed approximately $300,000 to GABEO through Brooks, which he then deposited into the undisclosed GABEO account. The indictment alleges that Brooks misappropriated donations he solicited on behalf of GABEO from corporations, local teacher unions, small business owners, and individual donors – all of whom relied on Brooks’ assurances that the contributions were intended to further GABEO’s community activities. The GABEO Board was unaware of this activity and did not approve these transactions. In fact, the indictment alleges that after Brooks began diverting donations, members of GABEO’s Board of Directors noted the organization’s apparent loss of most of its corporate donations.
The indictment charges that Brooks misappropriated the GABEO funds in much the same manner as the Universal Humanities funds. The indictment alleges that generally, Brooks deposited funds he solicited on behalf of GABEO into the undisclosed GABEO account, then transferred the funds to his personal account, from which he paid his personal expenses. While Brooks utilized some of the GABEO donations to pay expenses related to GABEO’s annual meetings, he utilized much of the GABEO funds for personal expenses.
More specifically, the indictment charges that:- During the time that Brooks acted as GABEO’s President, a variety of charitable groups, companies and individuals made donations to GABEO through Brooks. These donors relied on Brooks’ representations that GABEO would use the contributions to defray the costs of the organization’s annual meetings and convention, and to support GABEO’s programs;
- Brooks made specific false representations to donors about how the solicited funds would be used, claiming that the funds would be used to cover the expenses of annual GABEO meetings, support GABEO crime prevention and child hunger initiatives, voter registration, felon rehabilitation initiatives, and literacy programs. Donors included Coca Cola ($96,500), Georgia Power ($37,000), the International Brotherhood of Teamsters ($36,000), and others;
- Additionally, a professional organization of teachers contributed to GABEO through Brooks, relying on his assurances that the funds would go to support GABEO’s annual meetings and convention. An Atlanta law firm gave to GABEO through Brooks based on his representation that the funds would help fund a children’s school and GABEO’s annual convention. A bank contributed to GABEO through Brooks based upon his representations that the funds would be used by GABEO to construct a commemorative marker at Moore’s Ford Bridge. Instead, Brooks deposited these funds into the undisclosed GABEO account that he controlled and then transferred the money to pay to his personal account, ultimately using most of the contributions to pay personal expenses; and
- In November 2011, and May 2012, without the knowledge and consent of GABEO’s Board of Directors, Brooks obtained bank loans on behalf of GABEO. Brooks told the bank that GABEO intended to use the proceeds of both loans for “Citizenship Education Get Out the Vote” initiatives. Relying on Brooks’ representations, the bank approved both loans and issued the proceeds to Brooks. Brooks subsequently used much of the funds to pay personal expenses rather than for GABEO’s education and voter registration programs as he claimed in the loan applications.
By misappropriating GABEO donations for his personal use, Brooks benefitted himself at the expense of both GABEO and the communities most in need of the literacy, crime prevention and voter registration programs for which the funds were intended.
False Tax Returns Charges
Finally, the indictment charges that Brooks substantially underreported his income to the IRS for the years 2007 through 2011. Despite Brooks’ charged misappropriation of hundreds of thousands in donations to Universal Humanities and GABEO, his tax returns for the years between 2008 through 2011 falsely reported income of only approximately $35,000 annually.
Overview of the Charges
The indictment charges 30 counts of mail, wire and tax fraud. The mail and wire fraud charges carry a maximum sentence of 20 years in prison and a fine of up to $250,000. The tax charges carry a maximum sentence of three years and a fine of up to $100,000. It is important to note that the sentences imposed may not approach the statutory maximum sentences, as the Court will consider the United States Sentencing Guidelines, which are not binding but provide appropriate sentencing ranges for most offenders.
This case is being investigated by Special Agents of the Federal Bureau of Investigation and Internal Revenue Service.
Assistant United States Attorneys Kurt R. Erskine, Richard S. Moultrie, Jr. and Kamal Ghali are prosecuting the case.
Members of the public are reminded that the indictment contains only allegations. A defendant is presumed innocent of the charges and it will be the government's burden to prove a defendant's guilt beyond a reasonable doubt at trial.
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.
Brooks Indictment
Stafford Springs Man Charged with Defrauding U.S. VeteransRead the Press Release
Deirdre M. Daly, Acting United States Attorney for the District of Connecticut, today announced that JOHN J. SIMON, JR., also known as “Buzzy Simon,” 66, of Stafford Springs, was arrested yesterday on a federal criminal complaint charging him with mail fraud.
As alleged in the criminal complaint, beginning in approximately 2009, SIMON, a Vietnam War veteran, defrauded several U.S. military veterans of thousands of dollars by representing that he would assist his victims in obtaining or increasing their VA benefits. SIMON represented to certain victims that the money would be used to hire an attorney to do research and other work in furtherance of their claims. These and other representations were false.
After his arrest, SIMON appeared before U.S. Magistrate Judge Donna F. Martinez in Hartford and was released on a $50,000 bond.
The charge of mail fraud carries a maximum term of imprisonment of 20 years.
Acting U.S. Attorney Daly stressed that a complaint is only a charge and is not evidence of guilt. Charges are only allegations, and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This matter is being investigated by the U.S. Department of Veterans Affairs, Office of Inspector General, Criminal Investigations Division and the Internal Revenue Service – Criminal Investigation. The case is being prosecuted by Assistant United States Attorney Peter S. Jongbloed.
Citizens who have information that may be helpful to this investigation are encouraged to call 973-297-3317.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722 [email protected]St. Paul Felon Pleads Guilty to Possessing .22-caliber Revolver and MethamphetamineRead the Press Release
MINNEAPOLIS—Earlier today in federal court, a 25-year-old St. Paul felon pleaded guilty to possessing a .22-caliber revolver and methamphetamine. Christopher Lee Rousseau specifically pleaded guilty to one count of being an armed career criminal in possession of a firearm. Rousseau, who was indicted on January 15, 2013, entered his plea before United States District Court Judge Patrick J. Schiltz.
In his plea agreement, Rousseau admitted that on December 3, 2012, he possessed the revolver, which was hidden along with several wrapped baggies of methamphetamine in the center console of the GMC Jimmy he was driving. Rousseau also admitted that he intended to distribute the methamphetamine, and that he carried the revolver in furtherance of his drug trafficking.
Because he is a felon, Rousseau is prohibited under federal law from possessing a firearm or ammunition at any time. His prior convictions in Ramsey County include aiding and abetting second-degree burglary (2010) and fleeing police in a motor vehicle (2011). In addition, Rousseau was convicted in Pine County for fleeing police in a motor vehicle (2007) and, in Dakota County, for third-degree burglary (2010).Because those convictions constituted crimes of violence, Rousseau is now subject to the federal Armed Career Criminal Act. That act mandates a minimum of 15 years in prison for anyone subsequently convicted in federal court for being a felon in possession of a firearm or ammunition. Judge Schiltz will determine Rousseau’s sentence at a future hearing, yet to be scheduled.
A law enforcement affidavit filed in the current case states that at approximately 12:30 a.m. on December 3, 2012, officers stopped Rousseau for a traffic violation near the intersection of U.S. Highway 61 and Warner Road. He was then arrested for driving after cancellation of his license. During a search of Rousseau’s person, police found some ammunition and $385. A search of the vehicle led to the recovery of the gun and the methamphetamine.
This case is the result of an investigation by the St. Paul Police Department and the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives. It is being prosecuted by Assistant U.S. Attorney Lola Velazquez-Aguilu.St. Louis Parks Division Deputy Commissioner and Chief of Park Rangers Indicted on Fraud ChargesRead the Press Release
St. Louis, MO -JOSEPH VACCA, Deputy Commissioner of the St. Louis Parks Division, and THOMAS STRITZEL, Chief of the St. Louis Park Rangers, were indicted by a federal grand jury late Wednesday on fraud charges alleging that they defrauded the City of St. Louis of approximately one-half million dollars by submitting false and sham invoices purportedly for materials and services supplied to the Parks Division. They are expected to turn themselves in to authorities this week.
The indictment alleges that from January 1, 2005, to on or about December 31, 2012, Vacca and Stritzel embezzled funds of the City of St. Louis based upon the submission of sham and false invoices, which included false charges of approximately $464,722. They used the funds for their own personal use, including lease payments on personal vehicles, fuel costs, the payment of personal credit card charges and other personal living expenses unrelated to the legitimate operations of the St. Louis Parks Division.
According to the indictment, Vacca and Stritzel set up a sham company called Dynamic Management and then funneled city funds received through the submission of false and sham invoices to Dynamic Management’s bank account. Vacca and Stritzel then used those fraudulently obtained funds for their own personal use, including for the leasing of personal vehicles, the payment of fuel costs and the payment of personal credit card charges."Taxpayers were slapped in the face when roughly half a million dollars was allegedly embezzled from City of St. Louis funds allocated to the Parks Department," said Special Agent in Charge Dean C. Bryant of the FBI St. Louis Division. "The cooperation from the City of St. Louis enabled the FBI to uncover the multiple fraudulent schemes."
As is always the case, charges set forth in an indictment are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.
If convicted, each of these charges carries a maximum penalty of 20 years in prison and/or fines up to $250,000. In determining the actual sentences, a Judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
This case was investigated by the Federal Bureau of Investigation and the St. Louis Metropolitan Police Department. Assistant United States Attorney Hal Goldsmith is handling the case for the U.S. Attorney's Office.St. Charles County Man Indicted Involving Investment Fraud SchemeRead the Press Release
St. Louis, MO - MICHAEL KITCHEN, St. Peters, MO, was indicted on federal fraud charges for conducting an investment fraud scheme during 2008 and 2009. He is expected to appear in federal court later this week.
According to the indictment, Kitchen marketed a "verification of funds" financial opportunity to a number of investors and took in approximately $500,000. Kitchen told investors' their money was safe and, if placed in a verification of funds transaction, would earn more than 1000% annualized return. However, Kitchen is alleged to have failed to protect or place investors' funds. To the contrary, the indictment alleges Kitchen simply spent investors' money on business and personal expenses over several years.
Kitchen was indicted by a federal grand jury late Wednesday on three felony counts of wire fraud for devising this fraud scheme and two counts of money laundering for using its proceeds to purchase two automobiles.
If convicted, each count of wire fraud carries a maximum penalty of 20 years in prison and/or fines up to $250,000. The money laundering counts carry maximum penalties of 10 years in prison and/or fines up to $250,000. Restitution must be ordered for any victims.
This case was investigated by the U.S. Postal Inspection Service and the FBI in cooperation for the Office of Securities Enforcement - Missouri Secretary of State's Office, which is currently prosecuting a civil enforcement action against Kitchen. Assistant United States Attorney Tom Albus is handling the case for the U.S. Attorney’s Office.
As is always the case, charges set forth in an indictment are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.
Shahid Sindhu Khan Sentenced in U.S. District CourtRead the Press Release
The United States Attorney's Office announced that during a federal court session in Missoula, on May 14, 2013, before U.S. District Judge Dana L. Christensen, SHAHID SINDHU KHAN, a 39-year-old resident of Othello, Washington, was sentenced to a term of:
Prison: 18 months
Special Assessment: $100
Supervised Release: 4 years
KHAN was sentenced in connection with his guilty plea to conspiracy to distribute cocaine.
In an Offer of Proof filed by Assistant U.S. Attorney Tara L. Elliott, the government stated it would have proved at trial the following:
On August 23, 2012, a Confidential Informant (CI) was scheduled to purchase cocaine from KHAN and Ijaz Khan Sindhu in Missoula. Prior to arriving in Montana, KHAN and Sindhu were stopped by Idaho police officers and it was later discovered that they had 10 ounces of cocaine in their car.
The CI would have testified that he purchased cocaine from Sindhu on numerous occasions between January and August of 2012, and usually purchased approximately 9 ounces of cocaine at a time. He would have further testified that KHAN was with Sindhu on at least 4 or 5 of those occasions and at least once KHAN took the money from the CI for the cocaine.
Sindhu pled guilty to federal charges.
Because there is no parole in the federal system, the "truth in sentencing" guidelines mandate that KHAN will likely serve all of the time imposed by the court. In the federal system, KHAN does have the opportunity to earn a sentence reduction for "good behavior." However, this reduction will not exceed 15% of the overall sentence.
The investigation was conducted by the Federal Bureau of Investigation.
Seneca Falls Woman Pleads Guilty to FraudRead the Press Release
ROCHESTER, N.Y.-- U.S. Attorney William J. Hochul, Jr. announced today that Mary Brainard, 60, of Seneca Falls, N.Y., pleaded guilty before U.S. District Judge Frank P. Geraci, to wire fraud affecting a financial institution. The charge carries a maximum penalty of 30 years in prison, a fine of $1,000,000 or both.
Assistant U.S. Attorney John J. Field, who handled the case, stated that Mary Brainard and her husband, Calvin Brainard, an attorney, owned and operated BMC Capital, a mortgage brokerage business in Seneca Falls. Through BMC Capital, the Brainards brokered mortgage refinancing loans for various clients. Calvin Brainard acted as the settlement agent for the lending banks, and received the refinancing loan proceeds into his attorney trust account.
The loan proceeds were supposed to be used to pay off the client's original mortgage loan, but on multiple occasions, Mary Brainard accessed Calvin's attorney trust account and diverted the money to a different account that she controlled. Mary Brainard then used the client money for her own purposes, including to repay monies that she had previously stolen from other clients. To try to cover up her scheme, Mary Brainard created false bank records and other documents. In total, Mary Brainard stole at least $400,000 from at least 10 individuals in 2009 and 2010.
Charges against Calvin Brainard are still pending.
The plea is the culmination of an investigation on the part of Special Agents of the Federal Bureau of Investigation, under the direction of Acting Special Agent in Charge Richard M. Frankel.
Sentencing is scheduled for September 11, at 2:30 p.m. before Judge Geraci.
Scranton Man Sentenced for Online Enticement of MinorRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced that a 46-year-old Scranton resident was sentenced today by Senior U.S. District Court Judge A. Richard Caputo in Scranton to 70 months in prison for attempting to entice a minor to engage in illegal sexual conduct.
According to United States Attorney Peter J. Smith, the defendant Lewis John Davies previously admitted to using a computer to attempt to persuade a minor to engage in sexual acts with him during April-June 2008.
Davies was indicted by a federal grand jury in June 2008, as a result of an investigation by the Federal Bureau of Investigation and the Scranton Police Department.
Judge Caputo also ordered Davies to serve six years on supervised release after serving his prison sentence, pay a $100 special assessment, and forfeit several computer hard drives that were seized by agents during the investigation.
Davies was also ordered to undergo sex offender treatment and to comply with sex offender registration and notification requirements.
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 internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
The case was prosecuted by Assistant U.S. Attorney Francis P. Sempa.
Schaltre SentencingRead the Press Release
BATON ROUGE, LA – United States Attorney Donald J. Cazayoux, Jr. announced today that TIMOTHY R. SCHLATRE, 35, of Denham Springs has been sentenced for his creation and execution of a scheme to defraud life insurance companies, including New York Life and Lincoln Financial. District Court Judge James J. Brady sentenced SCHLATRE for his convictions of mail fraud and money laundering. SCHLATRE was sentenced to the Bureau of Prisons to serve a term of 57 months imprisonment and pay restitution of $1,424,931.12 to the victims of his offenses. SCHLATRE was ordered to repay fraudulently obtained commissions of $908,098.17 to New York Life and $516,832.95 to Lincoln Financial. He also was sentenced to a term of 2 years supervised release and ordered to pay a special assessment of $200. Additionally, Judge Brady ordered SCHLATRE to forfeit the gross proceeds of his crimes, including a Cadillac Escalade and $1,424,931.12.
Along with SCHLATRE, the United States Attorney has also charged and convicted JASON PAUL AUSTIN, 32, of Walker, JODI MARIE AUSTIN, 34, of Walker, RICKY J. AUSTIN, 49, of Denham Springs, JIMMY O. CASSELS, 33, of Denham Springs, TODD D. CUMMINGS, 34, of Walker, and DENA A. GAUDET, 33, of Denham Springs; each has been convicted of Conspiracy to Commit Mail Fraud. Each of Schlatre’s co-conspirators, except for Ricky J. Austin, has already been sentenced to a term of probation.
The Bill of Information to which SCHLATRE pled guilty and was sentenced alleges that SCHLATRE used his position as a life insurance agent for New York Life and Lincoln Financial to devise a scheme to defraud the insurers for the purpose of fraudulently obtaining commission payments. SCHLATRE executed the fraud by selling life insurance policies based on false statements and representations. Specifically, SCHLATRE recruited individuals and persuaded them to submit false information to the companies regarding the applicant’s net worth and annual income, thereby defrauding New York Life and Lincoln Financial into approving the policies and issuing the commission payments to SCHLATRE to which he was not entitled. Because the policy values were so large, the applicants could not afford to make the premium payments. In order to accomplish his scheme, SCHLATRE further agreed to provide the premium payments on behalf of the applicants. This process, known as “rebating,” was prohibited by both company’s policies as well as state law. In order to conceal the fact that he was the source of the premiums, SCHLATRE deposited money directly into the individual applicant’s bank account. SCHLATRE further misrepresented the source of the premium payments by falsely declaring that he was not paying or allowing the rebating of any premiums.
SCHLATRE was sentenced for defrauding New York Life and Lincoln Financial into issuing life insurance policies in excess of $100 million dollars. This resulted in the receipt of commissions to which he was not entitled of approximately $1,424,931.12.
United States Attorney Donald J. Cazayoux, Jr. stated, “Today, the ringleader of this insurance scheme which caused a loss of almost of one and a half million dollars has received a fair and just sentence. Further, I applaud the outstanding investigative efforts of the state and federal agents which have resulted in seven federal convictions in this case.”
“This investigation should be a clear reminder that federal law enforcement's reach into white collar crime extends beyond traditional health care, investment and corporate fraud to bring those responsible to justice,” stated FBI Special Agent-in-Charge Michael J. Anderson.
“People who conspire to create elaborate insurance fraud schemes run a very high risk of prosecution,” stated Damon Rowe, Acting Special Agent-in-Charge, IRS Criminal Investigation. “IRS is committed to working diligently with the Department of Justice to dismantle these organizations.”
Louisiana State Inspector General Stephen Street stated, “Hopefully this sends a message that there is a price to be paid for engaging in fraud schemes. Mr. Schlatre did so, and will now be held accountable.”
The investigation of this matter was conducted by the Federal Bureau of Investigation, the Internal Revenue Service - Criminal Investigation, and the Louisiana Office of Inspector General. The Louisiana Department of Insurance assisted in the investigation. The case was prosecuted by Assistant United States Attorneys Rene I. Salomon and Jay Thompson.
Sanjoy Bhattacharya Sentenced for Defrauding the Louisiana Road Home ProgramRead the Press Release
SANJOY BHATTACHARYA, age 56, a resident of New Orleans, was sentenced today in federal court by U. S. District Judge Carl J. Barbier to serve three years probation and pay a $15,000 fine, after pleading guilty to one count of making false statements to an agency of the United States, announced U. S. Attorney Dana J. Boente.
According to court documents, on or about September 21, 2007, BHATTACHARYA applied for funds from the Louisiana Road Home Program claiming his primary residence at the time of Hurricane Katrina was at 2436-38 Joseph Street, New Orleans, a property he knew was leased to and inhabited by his tenants at the time of the storm. As a result of his false statements in the application, BHATTACHARYA received approximately $84,423 from the United States Department of Housing and Urban Development, which he paid back to the government in February 2013.
The case was investigated by agents with the U. S. Department of Housing and Urban Development, Office of Inspector General. The case was prosecuted by Assistant United States Attorney Julia K. Evans.
Sanford Brothers Arrested for Conspiring to Steal Government PropertyRead the Press Release
Orlando, Florida - United States Attorney Robert E. O'Neill announces the arrests of Husein Kermali (37) and Sikandar Kermali (33), both from Sanford, Florida, for conspiring to steal government property. If convicted, both men face up to five years in federal prison.
According to the criminal complaint, while employed in the United States Army Active Guard Reserve, co-conspirator Sebastian Stewart Oyegun II, made unauthorized purchases of high-end engineering equipment, computer equipment and power tools. Oyegun charged the goods to the United States Army, and shipped the goods to various addresses. The purchases were made over the Internet using the General Services Administration (GSA) Advantage System website. The site is an ordering mechanism whereby government agencies or contractors can order items from vendors. Oyegun manipulated the purchasing system by fraudulently creating a phony user ID and password, providing phony points of contact and fake approving officials, and adding multiple shipping addresses. Most of the stolen goods were shipped to Oyegun's residence or a warehouse in Sanford, controlled by the Kermali brothers. In furtherance of the conspiracy, the Kermalis would select items they wanted from the GSA Advantage System website and e-mail their requests to Oyegun, paying him a fraction of the advertised price.
After the U.S. Army uncovered the scheme, Oyegun began cooperating with the FBI and participated in a number of controlled meetings with the Kermalis. On at least three occasions, Oyegun delivered stolen goods to the Kermalis at their Sanford warehouse in his U.S. Army Combat Uniform.
The Kermalis requested Surefire weapon sights, EOTech Holographic tactical weapon sights, and Trijicon gun sights from Oyegun and asked him if he could send items to Dubai. Sikandar Kermali also asked Oyegun for armor piecing ammunition and sent Oyegun a text message asking for more "war stuff."
Oyegun pleaded guilty for his role in this case. His sentencing hearing is scheduled for May 28, 2013, before U.S. District Judge Charlene Honeywell.
A criminal complaint is merely a formal charge that a defendant has committed a violation of the federal criminal laws, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by the Federal Bureau of Investigation, the Army Criminal Investigative Command, the General Services Administration, Office of Inspector General, and the Department of Commerce, Office of Export Enforcement. It will be prosecuted by Assistant United States Attorney Daniel W. Eckhart.
Rochester Men Indicted for Mail Fraud Software SchemeRead the Press Release
ROCHESTER, N.Y.--U.S. Attorney William J. Hochul, Jr. announced today that a federal grand jury in Rochester has returned a three-count indictment charging Brian Wergin, 31, and Bohdan “Don” Luzecky, 45, both of Rochester, N.Y., with conspiracy to commit mail fraud and mail fraud. The charges each carry a maximum penalty of 20 years in prison, a fine of $250,000 or both.
Assistant U.S. Attorney Marisa J. Miller, who is handling the case, stated that according to the indictment, the defendants placed false and fraudulent orders for free copies of replacement Intuit software, including TurboTax and Quicken, while employed by Sutherland Global Services. After receiving the software at addresses in Rochester, N.Y. and Atlanta, GA, the defendants sold the software online, including on eBay, to customers throughout the United States. The defendants then kept the proceeds for themselves.
The Indictment is the culmination of an investigation on the part of Inspectors of the United States Postal Inspection Service, under the direction of Inspector in Charge Kevin Niland, Boston Division, and Special Agents of the Federal Bureau of Investigation, under the direction of Acting Special Agent in Charge Richard M. Frankel.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
Richmond Man Convicted of Armed RobberyRead the Press Release
NEWPORT NEWS, Va. –Marcellus Edward Cheatham, III, 27, of Richmond, Va., was convicted today by a federal jury of brandishing a firearm during a crime of violence and being a felon in possession of ammunition. On the first day of trial, Tuesday, May 14, 2013, Cheatham pled guilty to robbing a Walgreens pharmacy, and possessing Oxycodone stolen in the robbery, with the intention of distributing or selling it. He proceeded to trial on the remaining charges.
Neil H. MacBride, United States Attorney for the Eastern District of Virginia, Carl J. Vasilko, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives’ (ATF) Washington Field Division, and, Thomas Townsend Hampton Police Chief, made the announcement after the verdict was accepted by United States District Judge Henry C. Morgan, Jr.
Marcellus was indicted on November 15, 2012 on charges of robbery, felon in possession of a firearm and brandishing a firearm in relation to the robbery. A superseding indictment was returned in March 11, 2013, adding charges of felon in possession of ammunition and possession with intent to distribute Oxycodone.
According to court records, and evidence at trial, Cheatham planned and carried out the robbery of the Walgreens store at 919 W Mercury Boulevard in Hampton on August 21, 2012, after driving from Richmond to Hampton to commit the robbery. Cheatham entered the Walgreens, approached a pharmacist, and threw a demand note at him. When the pharmacist bent over to pick the demand note up Cheatham jumped over the counter and, brandishing a firearm, told the pharmacist to give him all his Percocet which is a brand of Oxycodone. After obtaining Percocet in a bag, Cheatham walked out of the pharmacy and returned to his residence in Richmond. Fingerprints found at the scene linked Cheatham to the crime. Agents executed a search warrant at Cheatham’s residence a few days later and recovered bottles of Percocet taken in the robbery.
This case was investigated by the ATF’s Washington Field Division and the Hampton Police Division. Managing Assistant United States Attorney Howard J. Zlotnick and Special Assistant United States Attorney Rebecca A. Staton from the Criminal Division’s Gang Unit prosecuted the case on behalf of the United States.
A copy of this press release may be found on the website of the United States Attorney's Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.Raleigh Co. Pedophile with Hundreds of Pictures, Videos of Child Pornography Sentenced to 5 Years in Federal PrisonRead the Press Release
Third pedophile sentenced this week in Southern District of W.Va.
BECKLEY, W.Va. – A 21-year-old Raleigh County pedophile who collected hundreds of images of child pornography was sentenced today to five years in federal prison followed by a lifetime of supervised release. Steven Russell Helton, of Beaver, Raleigh County, W.Va., previously pleaded guilty to child pornography charges in January. Helton’s sentencing was handed down today by United States District Judge Irene C. Berger in Beckley.
On December 29, 2010, Helton possessed on his computer more than 600 pictures and videos of children having sex or performing sexual acts. Helton is the third defendant to be sentenced on child pornography charges this week in the United States District Court for the Southern District of West Virginia.
In similar federal court cases this week, Tracey E. Cooper, 38, of Giles, Kanawha County, W.Va., was sentenced on Tuesday to three years in prison followed by 15 years of supervised release for possessing more than 600 images of child pornography and trading the images with other pedophiles over the Internet. Also, 54-year-old Charleston pedophile Jonathan Douglas Layne was sentenced on Wednesday to 10 years in federal prison on child pornography charges. Layne similarly collected more than 600 pictures and videos of children having sex or performing sexual acts.
Since January 2012, twenty-two defendants have been convicted as part of U.S. Attorney Goodwin’s ongoing initiative to combat child sexual exploitation and abuse in the Southern District of West Virginia. Twenty-one defendants have been sentenced to a total of more than 95 years (1153 months, to be exact) in federal prison. The remaining defendant currently awaits sentencing.
The West Virginia State Police Internet Crimes Against Children Task Force and the Federal Bureau of Investigation West Virginia Cyber Crimes Task Force conducted the investigation. Assistant United States Attorney Lisa Johnston handled the prosecution.
Princeton, N.J., Youth Soccer Coach Arrested, Charged with Possessing Images of Sexually Exploited ChildrenRead the Press Release
TRENTON, N.J. – A Princeton, N.J., youth soccer coach was arrested today after law enforcement officers searching his home allegedly discovered compromising, sexual movies of minor boys, U.S. Attorney Paul J. Fishman announced.
Jorge A. Roman, 48, is charged by criminal complaint with one count of possessing images of child pornography. Roman appeared this afternoon before U.S. Magistrate Judge Douglas E. Arpert in Trenton federal court and was detained pending satisfaction of his bail conditions.
According to the criminal complaint filed today:
During a period lasting approximately five years, Roman ordered – on more than 40 occasions – films exploiting nude, minor boys that were marketed as “naturist films from around the world.” The orders included DVDs, photo CDs and downloadable links.
The count with which Roman is charged carries a maximum potential penalty of 10 years in prison and a $250,000 fine.U.S. Attorney Fishman credited postal inspectors, under the direction of Postal Inspector in Charge Maria L. Kelokates, with the investigation leading to today’s arrest.
The government is represented by Special Assistant U.S. Attorney Joseph Muoio of the U.S. Attorney’s Office in Trenton.
The charge and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
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Defense counsel: Assistant Federal Public Defender Lisa Van Hoeck
Roman Complaint
Oregon Man Indicted for Alleged Role in $50 Million Securities Fraud SchemeRead the Press Release
An Oregon man has been charged with allegedly orchestrating a $50 million securities fraud scheme, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney Laura E. Duffy of the Southern District of California.
Bradley Holcom, 55, of Canby, Ore., was arrested Tuesday following his indictment in U.S. District Court for the Southern District of California. The indictment, which was filed on May 9, 2013, and unsealed late yesterday, charges Holcom with eight counts of mail fraud, four counts of wire fraud and one count of securities fraud.
According to the indictment, Holcom made false statements to investors in connection with the sale of approximately $50 million worth of promissory notes that he sold to more than 150 investors located throughout the United States from at least 2004 through 2010. The indictment alleges that Holcom solicited investors to provide funds for the development of raw land for commercial and residential purposes through an investment program he operated called the Trust Deed Investment Program. Holcom allegedly falsely told investors who purchased notes through the Trust Deed Investment Program that they would receive a lien on a specific piece of property he was developing and that the lien would be in first position, which would allow investors to directly foreclose on the underlying development property if Holcom was unable to repay the principal due under the notes.
Despite his statements to investors, Holcom allegedly never provided investors with a lien on the property he was purportedly developing and instead conveyed to investors a lesser interest that did not allow investors to directly foreclose on the property to protect their investment. In addition, the indictment alleges that while Holcom promised investors that their purported lien would be in first position, Holcom solicited investments for properties that he knew were already encumbered by first position liens.
According to the indictment, Holcom also allegedly sold properties that were supposedly serving as the security for investors without informing investors that the property they had financed for development was gone.
The indictment alleges that by approximately 2008, Holcom’s financial condition had seriously deteriorated, but he continued to solicit investors for new funds by making misrepresentations about his true financial condition and the manner in which he was using investor money.The maximum penalty for each wire fraud and mail fraud count is 20 years in prison. The count of securities fraud carries a maximum penalty of 25 years in prison.
The charges contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
This case was brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.StopFraud.gov .
This case was investigated by the FBI’s Phoenix Division – Yuma Resident Agency. The case is being prosecuted by Trial Attorney Henry P. Van Dyck and Deputy Chief Daniel Braun of the Criminal Division’s Fraud Section, and by Assistant U.S. Attorney Stephen Clark of the U.S. Attorney’s Office for the Southern District of California. The department recognizes the substantial assistance of the U.S. Securities and Exchange Commission.Oney Joseph Baker Pleads Guilty in U.S. Federal CourtRead the Press Release
The United States Attorney's Office announced that during a federal court session in Great Falls, on May 16, 2013, before U.S. Magistrate Judge, ONEY JOSEPH BAKER, a 39-year-old resident of Great Falls, pled guilty to being a felon-in-possession of firearms and an armed career criminal. Sentencing has been set for August 16, 2013. He is currently detained.
In an Offer of Proof filed by Assistant U.S. Attorney Jessica A. Betley, the government stated it would have proved at trial the following:
On August 17, 1999, BAKER was sentenced in U.S. District Court to 51 months imprisonment after a jury found him guilty of conspiracy to distribute a controlled substance, possession with intent to distribute a controlled substance, and distribution of a controlled substance. The sentence of imprisonment was to be followed by three years of supervised release, wherein the court ordered BAKER to not own or possess a firearm.
On October 30, 2002, the Montana Eight Judicial District Court in Cascade County sentenced BAKER for the crime of felony criminal possession of dangerous drugs. Specifically, the court sentenced BAKER to three years to the Department of Corrections, and ordered Baker to not own, possess, or be in control of any firearms or deadly weapons.
On April 27, 2007, the Montana Eighth Judicial District Court in Cascade County sentenced BAKER for three felony convictions: assault with a weapon, theft, and robbery. The three convictions were from different cases, however, they were resolved in one global plea agreement and sentencing. The court sentenced BAKER to ten years imprisonment at the Montana State Prison. It also specifically ordered that he "shall not own, possess, or be in control of any firearms or deadly weapons."
On July 8, 2012, around 3:09 pm, Great Falls police officers were dispatched to Bobo's Casino for a report of an armed robbery. Officers arrived at Bobo's and spoke with an employee of the casino. The employee said she had been throwing trash away when a man entered the casino through the east side door. She turned toward the man and he pointed a small black handgun at her head. The man, described as a Native American male, approximately 5'9" and 160 pounds, yelled, "give me the money, bitch!" The employee emptied the money in her apron, which contained approximately $300 to $400 dollars in cash. The man became upset and said, "that's, not all there is, bitch!" The employee opened the cash register. The register contained only loose change and the man tossed the register in anger once he saw it did not contain any cash. He ran out of the same east side door, got into a green minivan, and drove off at a high rate of speed.
The manager of Bobo's Casino arrived shortly thereafter and pulled up the surveillance video of the time of the robbery. Officers observed that the robbery took place exactly as the employee had described. Detectives then began to investigate the robbery, and numerous tips were called in to the police department.
The next day a concerned citizen called the police and stated there was a suspicious green minivan parked on the street that he had not seen the previous evening. Officers responded to the report of the suspicious car. They believed the parked minivan matched the description of the minivan used in the robbery. After again viewing the surveillance video, the officers found the minivan in the video was clearly the minivan parked on the street.
Numerous other tips continued to be reported. The tips and further investigation indicated that BAKER had robbed the casino.
On July 18, 2012, law enforcement observed BAKER leave a house carrying a dark colored piece of rolling luggage and a blue duffel bag. BAKER was with two other individuals. Law enforcement began to follow the car once BAKER drove away. At one point, BAKER tried to conceal the car by driving into an alley. A Deputy U.S. Marshal turned on his top lights and siren to initiate a traffic stop and the car immediately fled at a high rate of speed through neighborhood streets.
The car stopped at an apartment complex and all three people fled on foot. Police caught the other individuals, but BAKER had fled through the neighborhoods. Law enforcement yelled at BAKER to stop running and he refused to stop. BAKER dropped the duffel bag near a garage as he ran. A neighbor recovered the duffel bag and provided it to police. Three detectives finally apprehended BAKER who had to be held down by all three men.
Detectives searched the duffel bag they recovered from BAKER, as well as the vehicle. The detectives recovered a Lorcin, model L380, .380 caliber semi-automatic pistol from the front passenger seat floorboard. This pistol had been in BAKER's possession, and it contained seven rounds of .380 caliber ammunition, including one round that was in the chamber. A search of the duffel bag revealed a fully loaded Mossberg, model 500A, 12 gauge pump action shotgun. Law enforcement seized five rounds of 12 gauge ammunition from the shotgun. Detectives also found 25 rounds of 20 gauge ammunition and 18 rounds of .380 caliber ammunition in the duffel bag.
BAKER faces possible penalties of a mandatory minimum of 15 years to life in prison, a $250,000 fine, and 5 years supervised release.
The investigation was a cooperative effort between the Great Falls Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
New York Man Sentenced to Federal Prison for Role in Illegal Sports Betting RingRead the Press Release
The United States Attorney for the District of Connecticut today announced that MITCHELL ENGELSON, 63, of New York, N.Y., was sentenced yesterday by United States District Judge Vanessa L. Bryant in Hartford to 15 months of imprisonment, followed by three years of supervised release, for his involvement in an illegal sports bookmaking operation. ENGELSON also was ordered to forfeit $15,000 and pay a $5,000 fine.
According to court documents and statements made in court, after a long-term investigation led by the FBI Fairfield County Organized Crime Task Force, the Internal Revenue Service – Criminal Investigation and the Stamford Police Department, 20 individuals were charged with various offenses related to their involvement in an illegal Internet sports bookmaking operation and illegal card gambling clubs in Stamford and Hamden. The investigation, which included the use of court-authorized wiretaps, revealed that ENGELSON and others were involved in a large-scale sports bookmaking operation in which gamblers placed bets with offshore Internet sports-gambling websites, particularly www.44wager.com based in Costa Rica.
FBI analysis of the sports-betting web site utilized by the co-defendants has determined that the total gross revenues of the Stamford-based gambling operation were nearly $1.7 million from October 2010 to June 2011.
On February 13, 2013, ENGELSON pleaded guilty to one count of operating an illegal gambling business.
This matter is being investigated by the FBI Fairfield County Organized Crime Task Force, the Internal Revenue Service – Criminal Investigation, the Stamford Police Department, the Bridgeport Police Department and the Connecticut State Police. This case is being prosecuted by Assistant United States Attorneys Hal Chen and Peter Jongbloed.
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