Latest Records
Newest first across public DOJ and U.S. Attorney press releases.
6 May 2013
Former Bookkeeper to Serve 24 Months in Prison and Pay over $1.8 Million in Restitution for Embezzlement and Tax EvasionRead the Press Release
Oklahoma City, Oklahoma – CAROLYN DAWSON, of Oklahoma City, was sentenced today to 24 months in prison for embezzling from her former employer, American Plant Products, and for evading federal payroll taxes, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma. In addition, Dawson was ordered to pay $1,843674.42 in restitution.
Until November of 2011, Dawson worked as the bookkeeper for American Plant Products, an Oklahoma City wholesaler of greenhouse and garden supplies. Her duties included maintaining payroll, preparing payroll tax returns, and paying withheld taxes to the IRS. According to a criminal information filed on December 18, 2012, Dawson defrauded the business by using interstate wire communications to pay personal credit card expenses from a business bank account, without the knowledge of the business or its owners. These payments took place from January of 2007 until November 25, 2011, when Dawson was terminated. The information also alleged that Dawson willfully evaded federal payroll taxes by failing to file a 2010 payroll tax return for the company, failing to make payroll withholding payments to the IRS, and altering the books and records of American Plant Products to conceal her failure to make withholding payments.
On January 3, 2013, Dawson pled guilty to both counts.
Today, Chief Judge Vicki Miles-LaGrange sentenced Dawson to 24 months in prison, to be followed by 3 years of supervised release. The sentence also requires her to pay $1,194,656.15 in restitution to American Plant Products and $649,018.27 to the Internal Revenue Service. The restitution to the IRS is based not only on her evasion of payroll taxes, but also on her failure to report the embezzled funds on her personal income tax returns.
This case was the result of an investigation conducted by the Federal Bureau of Investigation and IRS Criminal Investigation. The case was prosecuted by Assistant U.S. Attorney Scott E. Williams.
Reference is made to court filings for further information.
Federal Prison Terms Handed Down for Austin-Based Heroin Distribution OperationRead the Press Release
Thirteen defendants have received lengthy federal prison terms for their roles in an Austin-based heroin distribution operation announced United States Attorney Robert Pitman, Federal Bureau of Investigation Special Agent in Charge Armando Fernandez, Austin Police Chief Art Acevedo and Texas Department of Public Safety Director Steven C. McCraw.
On Friday, United States District Judge Sam Sparks handed down the following prison sentences: 69-year-old Jose Pardo of Austin and 67-year-old Michael Martinez of Austin – 360 months; 45-year-old Jorge Carrillo of Lockhart, TX – 188 months; 63-year-old Dionicio Sanchez of Austin – 135 months; 43-year-old David Sosa of Austin – 130 months; 46-year-old Amanda Pardo of Austin and 65-year-old Terry Ayers of Austin – 120 months; 63-year-old Alfredo Alvarez of Austin – 110 months; 32-year-old Chris Mier of Austin – 51 months; 26-year-old Tatiana Huang of Austin – 48 months; 46-year-old Kilpatrick Williams of Austin – 41 months; 25-year-old Leah Day of Austin and 36-year-old Jeffrey Finn of Shenandoah, TX – 12 months. In addition to the prison terms, Judge Sparks ordered that the following defendants pay fines: Amanda Pardo, $15,000; Jorge Carrillo, Tatiana Huang and Chris Meir, $6,000 each; and, Kilpatrick Williams, Leach Day and Jeffrey Finn, $3,600. Judge Sparks also ordered that all of the defendants be placed under supervised release for a period of five years after completing their respective prison terms.
Lucy Estrada, age 33, is scheduled to be sentenced on Friday. The alleged ringleader, Amado Pardo, passed away prior to trial.
Evidence presented in court revealed the defendants conspired from May 2011 until their arrests in June of 2012 to distribute more than 17 kilograms of heroin. Testimony also revealed that at least on one occasion, heroin was processed after business hours at the Pardo family-owned restaurant, Jovita’s, and that numerous drug transactions occurred right behind Jovita’s in co-defendant Amado Pardo’s house.“The sentencing of these traffickers is especially rewarding when you consider the longevity of the leaders participation in drug trafficking in the Austin area. These sentences ensure that the leadership of this trafficking group has been effectively dismantled,” stated FBI SAC Fernandez.
This case was investigated by the Federal Bureau of Investigation, Austin Police Department, Texas Department of Public Safety, Texas Department of Criminal Justice Office of the Inspector General, Drug Enforcement Administration and the Travis County Sheriff’s Office. This matter is being prosecuted by Assistant United States Attorneys Dan Guess and Elizabeth Cottingham.
Federal Guilty Plea from Cabell County Man Who Illegally Sold Oxycodone and Multiple FirearmsRead the Press Release
HUNTINGTON, W.Va. – A Cabell County man who illegally sold prescription painkillers and several firearms pleaded guilty today to federal charges, announced United States Attorney Booth Goodwin. Kenneth Lee Sergent, 40, of Huntington, entered a guilty plea to being a felon in possession of a firearm and distribution of oxycodone before Chief U.S. District Judge Robert Chambers.
On May 18, 2011, Sergent possessed and sold a .22 caliber revolver to a confidential informant working in cooperation with the Huntington Police Department in exchange for $50. The illegal firearm transaction took place at Sergent’s Huntington residence that was located at 914 27th Street. Sergent also sold the confidential informant two 30-milligram oxycodone pills in exchange for $60.
Sergent also illegally sold firearms to a confidential informant on June 5, 2011 and on August 21, 2011. The two firearms, both .38 caliber revolvers, were possessed and sold by Sergent in exchange for $300 and $125, respectively. Sergent was arrested by officers with the Huntington Police Department on March 21, 2012.Sergent was previously convicted in November 1990 in the Circuit Court of Cabell County, West Virginia of grand larceny. The defendant did not have his rights to possess a firearm restored.
Sergent faces up to 10 years in prison on Count One (firearm possession), up to 20 years in prison on Count Two (oxycodone distribution) and a $1,250,000 fine when he is sentenced on August 5, 2013.
The Huntington Police Department, the Drug Enforcement Administration (DEA) and the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) conducted the investigation. Assistant United States Attorney Joseph F. Adams is in charge of the prosecution.This case is being brought as part of Project Safe Neighborhoods. Project Safe Neighborhoods is a nationwide commitment to reduce gun crime in the United States by working with existing local programs that target gun crime.
This case is also being prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers in communities across the Southern District.
Erie Felon Admits Illegally Possessing FirearmRead the Press Release
ERIE, Pa - A former resident of Erie, Pennsylvania, pleaded guilty in federal court to a charge of violating federal firearms laws United States Attorney David J. Hickton announced today.
Damon Duane Amison, 21, pleaded guilty to one count before Senior United States District Judge Maurice B. Cohill, Jr.
In connection with the guilty plea, the court was advised that Amison possessed a firearm while being a convicted felon. The firearm was located by the Erie Police when they executed a search warrant of a residence on June 13, 2012.
Judge Cohill scheduled sentencing for August 12, 2013 at 11:00 a.m. The law provides for a total sentence of 10 years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the criminal history, if any, of the defendant.
Assistant United States Attorney Marshall J. Piccinini is prosecuting this case on behalf of the government.
The Erie Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives conducted the investigation that led to the prosecution of Amison.
Eagle Butte Man Sentenced for Possession of A Controlled SubstanceRead the Press Release
United States Attorney Brendan V. Johnson announced that Jason Garreau, age 26, of Eagle Butte, South Dakota, appeared before U.S. Magistrate Judge Mark A. Moreno on May 3, 2013, and pled guilty to a Superseding Information that charged him with Possession of a Controlled Substance. Garreau was sentenced to time served with no supervised release to follow, a $1,000 fine, and a $25 special assessment to the Federal Crime Victims Fund.
Garreau was indicted by a federal grand jury on January 15, 2013, for Possession of a Controlled Substance with Intent to Distribute. The charge stems from an incident on September 13, 2012, when Garreau was stopped in his vehicle by Cheyenne River Sioux Tribe law enforcement officers for speeding. During the stop, while Garreau was out of his vehicle, he dropped a clear bag from his pocket that held smaller bags containing a crystal-like substance. The substance was taken to the lab for analysis and tested positive for methamphetamine, with a total weight of 1.8 grams.
The investigation was conducted by Cheyenne River Sioux Tribe Law Enforcement and the Northern Plains Safe Trails Drug Enforcement Task Force. Assistant U.S. Attorney Kathryn N. Rich prosecuted the case.
Dentist SentencedRead the Press Release
Medicaid fraud nets prison term, fine and restitutionGREENSBORO, N.C. – Sassan Bassiri, DDS, age 46, has been sentenced to five months in prison followed by five months home confinement, announced Ripley Rand, United States Attorney for the Middle District of North Carolina.
Bassiri, of Pfafftown, North Carolina, practiced dentistry in King. His license to practice dentistry in North Carolina was revoked effective April 18, 2011.
Bassiri pleaded guilty on January 3, 2013, to three counts of health care fraud in connection with a scheme to defraud the North Carolina State Medicaid program. The fraudulent conduct included billing Medicaid for cast metal dentures when less expensive dentures were actually provided, and billing Medicaid for extensive oral examinations when the patient actually received non-billable or previously-reimbursed services.
Bassiri was sentenced on May 3, 2013, by United States District Judge N. Carlton Tilley, Jr., in federal court in Greensboro, North Carolina. Bassiri was also ordered to pay a $10,000.00 fine and $68,795.65 in restitution to the Medicaid program. He will be on supervised release for two years after the conclusion of his sentence.
The case was prosecuted by Assistant United States Attorney Robert Hamilton and Special Assistant United States Attorney and Assistant Attorney General Laura Lansford of the Medicaid Investigations Division of the North Carolina Attorney General’s Office. The case was investigated by the North Carolina Medicaid Investigations Division.
###Cobb County Man Who Sold Bomb to an Undercover Officer SentencedRead the Press Release
Defendant Manufactured an Improvised Explosive Device
ATLANTA - Mark Young was sentenced today to serve over five years in federal prison on charges of possessing a destructive device by United States District Judge Steven C. Jones.
"The recent tragedy in Boston underscores the havoc a homemade bomb can wreak,” said United States Attorney Sally Quillian Yates. “We are committed to aggressively prosecuting those who put the safety and security of our citizens at risk by constructing explosives devices.”
“ATF agents, working closely with our local law enforcement partners, arrested a violent individual who posed a significant danger to our community,” said ATF Special Agent in Charge Christopher Shaefer. “Through this cooperative effort, we were able to stop any potential harm to the citizens of Atlanta, Georgia.”
According to United States Attorney Yates, the charges and other information presented in court: On or about January 13, 2012, an undercover officer (UC) met with Young and received a sample of what Young referred to as homemade explosives. In the days leading up to this, the UC had received information that Young had manufactured his own “C-4,” which is a type of plastic explosive The UC called Young, who spoke in “code” over the phone and said he had made something he was willing to give the UC a free sample of. Young then met the UC in a mall parking lot and provided the UC with an unknown substance on a paper plate. Young described the substance as being capable of making an explosion that would be similar to a few “M-80’s going off.” Young added that the amount he gave to the UC could blow up a car if the UC used it as a “shape charge on the gas tank.”
In February 2012, Young told the UC that he had made a new batch of C4. Young sold the UC the new material through a middleman, and ATF chemists determined that it was an explosive. Next, on April 2, 2012, Young told the UC that he had made a new bomb. Young met the UC wearing a ballistic vest and had a .44 caliber Smith & Wesson revolver sitting on his lap. Young sold the UC the bomb for $750. He was then arrested, and the bomb was rendered safe. ATF determined that the bomb was in fact an IED (Improvised Explosive Device).
Young, 46, of Cobb County, Ga., was sentenced to five years, three months in prison to be followed by three years of supervised release. Young was convicted of these charges on February 27, 2013, after he pleaded guilty.
This case was investigated by Special Agents of the Bureau of Alcohol, Tobacco, Firearm and Explosives and members of the Atlanta Police Department.
Assistant United States Attorney Stephanie Gabay-Smith prosecuted the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the HomePage for the U.S. Attorney’s Office for the Northern District of Georgia is www.justice.gov/usao/gan.
Co-Owner of Los Angeles County Toy Company Sentenced to Federal Prison in Drug Money Laundering CaseRead the Press Release
LOS ANGELES – The owner of a San Fernando Valley jewelry store was charged today with receiving insider information from a senior partner with KPMG LLP and using that confidential information about
LOS ANGELES – A Diamond Bar woman, who along with her husband owns a Los Angeles-area toy wholesaler, was ordered today to serve a total of 14 months in custody for participating in an elaborate scheme known as a Black Market Peso Exchange, which is an underground money-transfer system that enables international drug trafficking organizations to launder narcotics proceeds.
Dan “Daisy” Xin Li, 44, co-owner of the Industry-based Woody Toys, Inc., was sentenced today to eight months in prison, to be followed by six months of home detention. At the conclusion of today’s hearing, Li was remanded into custody.
Li was sentenced by United States District Judge R. Gary Klausner, who this morning delayed the sentencing for Li’s husband – Jia “Gary” Hui Zhou, 44 – until January 6, 2014.
As part of their agreements with federal prosecutors, the couple forfeited to the federal government $2 million in proceeds that were derived from their money laundering scheme. Some of that money was previously seized by investigators, but most of the money to satisfy a forfeiture order – $1,982,641 – was paid last Wednesday.
Zhou and Li pleaded guilty in September to conspiring to structure currency transactions with a U.S. financial institution to avoid the filing of a Currency Transaction Report.
The scheme used “structured” cash deposits in the United States to launder illicit proceeds generated by drug trafficking organizations based in Mexico and Colombia. Structured deposits are cash deposits of $10,000 or less that are designed to avoid laws requiring all cash transactions over $10,000 to be reported to federal authorities. From 2005 through 2011, approximately $3 million in structured, out-of-state cash was deposited into Woody Toys’ bank accounts, according to court documents. During that same time, Woody Toys took in approximately $3 million in cash without filing the required federal documents.
As part of the Black Market Peso Exchange scheme alleged in this case, foreign toy retailers with Colombian and Mexican pesos would contact currency brokers to buy discounted U.S. dollars, which they used to purchase merchandise from Woody Toys. The dollars being “sold” were allegedly proceeds from illegal drug sales that had been deposited in the toy company’s accounts or delivered to the business. The Colombian or Mexican pesos the currency broker received from the foreign toy retailer were remitted to the drug trafficking organizations.
In a sentencing memo to the court, prosecutors described Woody Toys as “the last ‘spoke in the wheel,’ that cleaned illicit proceeds and enabled drug trafficking organizations to convert their dirty dollars into clean pesos.”
The case involving Woody Toys is the result of an investigation conducted by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), IRS-Criminal Investigation, and the multi-agency Southern California Drug Task Force, which is spearheaded by the Drug Enforcement Administration.
Previously in this case, Woody Toys, Inc. was sentenced in November to five years of probation after pleading guilty to money laundering conspiracy charges involving drug proceeds. The sentence prohibits the company from receiving payments of more than $2,000 in cash and the business may not receive cash from anyone who is not a customer. The company must also report the identity and contact information of all its customers. Finally, the business will be subject to unannounced examinations of its books and records.
The probe targeting Woody Toys began in November 2010 based on evidence uncovered during a similar investigation targeting another Los Angeles-area toy wholesaler called Angel Toys, whose owners also went to prison (see: http://www.justice.gov/archive/usao/cac/Pressroom/2012/021.html). Several former employees of Angel Toys subsequently went to work for Woody Toys.
Investigators say schemes of this kind benefit criminal organizations by giving them a means to launder illicit proceeds using international trade. The system also gives foreign retailers access to discounted U.S. currency, which enables the foreign retailers to avoid steep exchange rates and other fees. Finally, for the U.S.-based company, the scheme is a way to substantially increase sales volume and cash flow.
Release No. 13-064
City Woman Sentenced to 60 Months in Prison for Adoption ScamRead the Press Release
Oklahoma City, Oklahoma – SHELLY RENEE HENSON, 40, from Oklahoma City, was sentenced by United States District Judge Stephen P. Friot to serve 60 months in prison for mail fraud related to an adoption scam, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma. Judge Friot also ordered Henson to serve three years of supervised release upon release from prison and to pay $49,361.47 in restitution to the victims.
According to court filings and information from the plea and sentencing hearings, between July 2008 and June 2011, Henson defrauded at least five adoption agencies and adoption law firms. Henson also defrauded several prospective adoptive parents from throughout the United States, including Florida, Kansas, and Oklahoma. Henson would falsely pose as an expectant mother and then approach the adoption agencies and law firms claiming she wanted to place her purported unborn child for adoption. Throughout the course of her scams, Henson requested and received money for living expenses, including rent, utilities, food, and other personal items. When completing the “birth mother” applications, Henson often provided false information regarding her personal identification, the conception of a child, and the identity of the putative birth father. Henson also provided fraudulent medical documentation such as pregnancy verifications, sonograms, blood work, laboratory results, and other pregnancy-related medical records that she created or altered on her computer.
Henson often initiated contact with the prospective adoptive parents with whom she had been matched by the adoption agencies and law firms. On one occasion, Henson engaged in a lengthy relationship with the prospective adoptive mother, meeting on one occasion, and exchanging approximately 800 text messages over a five-month period. Henson continued to communicate with this prospective adoptive mother up to the day she had falsely claimed she was being induced in Oklahoma City, knowing that this family had traveled from Kansas to Oklahoma City to be present during the delivery. On at least two occasions, Henson requested the prospective adoptive mothers accompany her in the delivery room when she knew that there would not be a delivery. In fact, after her arrest, Henson admitted that she had previously undergone a tubal ligation procedure several years before committing the adoption fraud.
Henson was charged by indictment on August 21, 2012, with 18 counts of mail fraud, wire fraud, and misuse of a social security number. Henson pled guilty to mail fraud on January 7, 2013.
This case was investigated by the Federal Bureau of Investigation and was prosecuted by Assistant United States Attorney Charles Brown.
Cherokee County Armed Robbery Crew Arrested and Charged with Federal CrimesRead the Press Release
Department of Justice
Office of Public AffairsTYLER, Texas – Four Jacksonville, Texas men have been indicted and arrested in connection with a violent crime spree targeting area businesses in the Eastern District of Texas announced U.S. Attorney John M. Bales today.
Jonathan Roshard Brown, 21, Maurice Deshun Jones, 30, Willie Duane Rogers, 24, and Michael Dangelio Johnson, 25, were named in an 8-count indictment returned by a federal grand jury on Apr. 24, 2013. The defendants will be arraigned on Wednesday before U.S. Magistrate Judge Judith Guthrie.
The indictment alleges that beginning on Oct. 2, 2011, Brown, Jones, Rogers and Johnson conspired together to commit robbery, which unlawfully obstructed, delayed and affected commerce in violation of federal law. The defendants are specifically alleged to have committed four armed robberies in Jacksonville during this crime spree which began on Oct. 2, 2011 when Brown, Jones and Rogers stole $9,465 from the Wal-Mart Supercenter in Jacksonville. On May 25, 2012, Rogers and Jones were stopped for a traffic violation in Jacksonville. Rogers was arrested for driving without a valid driver license and Jones was arrested for being a felon in possession of a firearm. A loaded handgun was found protruding from underneath the front passenger seat of the vehicle. On Nov. 2, 1012, Brown, Jones and Rogers robbed the Razorback Grocery on Hwy 69 in Jacksonville. Brown brandished a handgun and demanded money from the owner. Razorback Grocery suffered a loss of approximately $16,000 in cash and $6,900 in Texas lottery tickets. On Nov. 16, 2012, Brown, Jones, Rogers and Johnson again robbed the owner of the Razorback Grocery while he was waiting int eh commercial drive-thru line at the Austin Bank on West Commerce Street in Jacksonville. During the robbery Brown fired a handgun, striking the victim. The bullet passed through the victim’s hand, throat and shoulder. The victim survived after being airlifted to a Tyler hospital. The defendants obtained an undetermined amount of cash from the victim’s vehicle. The armed robbery resulted in the closure of Razorback Grocery and the temporary closure of Austin Bank. On Nov. 23, 2012, Brown and jones attempted to rob the owner of the Fast Fuel on Hwy 69 in Jacksonville. The owner was able to strike Brown and flee. From Mar. 19 to Mar. 23, 2013, Rogers, through a series of telephone calls recorded by law enforcement, attempted to bribe a witness in the investigation by offering a payment in exchange for the witness recanting a statement to investigators.
Jones was arrested on May 5, 2013 near Bullard, Texas. Rogers was arrested on May 5, 2013 in Jacksonville. Brown and Johnson have been in state custody at the Cherokee County Jail on related charges.
The defendants are each charged with one count of Hobbs Act conspiracy. Jones is also charged with being a felon in possession of a firearm, two counts of Hobbs Act robbery, and one count of brandishing a firearm during a violent crime. Brown is also charged with three counts of Hobbs Act robbery and two counts of brandishing a firearm during a violent crime. Rogers is also charged with two counts of Hobbs Act robbery, two counts of brandishing a firearm during a violent crime, and one count of obstruction of a criminal investigation. Johnson is also charged with one count of Hobbs Act robbery and one count of brandishing a firearm during a violent crime. Under federal law, where there are multiple counts of brandishing a firearm in a crime of violence, the first conviction is punishable by a minimum of seven years in federal prison, and additional convictions are punishable by a minimum of 25 years in prison, and each sentence must be served consecutively to any other sentence. The Hobbs Act violations each carry a maximum of 20 years in federal prison. The felon in possession charge carries a term of up to 10 years in federal prison. The obstruction of justice charge is punishable by a term of up to five years in federal prison.
This case is being prosecuted as part of the Project Safe Neighborhoods Initiative. Project Safe Neighborhoods is aimed at reducing gun and gang violence, deterring illegal possession of guns, ammunition and body armor, and improving the safety of residents in the Eastern District of Texas. Participants in the initiative include community members and organizations as well as federal, state and local law enforcement agencies.
This case is being investigated by the FBI East Texas Gang Initiative and the Jacksonville Police Department with assistance from the Cherokee County District Attorney’s Office. This case is being prosecuted by Assistant U.S. Attorney Richard Moore.A grand jury indictment is not evidence of guilt and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Caregiver Pleads Guilty to FraudRead the Press Release
PORTLAND, Ore. – A caregiver who concealed the death of an elderly man in her care by burying his body, has pleaded guilty to the theft of more than $200,000 in Social Security retirement benefits paid on his behalf. Carel June Cody, 47, of Cottage Grove, pleaded guilty in federal court this morning to bank fraud, theft of government funds, and aggravated identity theft. Cody admitted stealing the benefits since 1996, forging the man’s signature on checks payable to herself, and lying to a federal agent to conceal the man’s death. Cody has remained in custody since her arrest in May 2012. Sentencing is scheduled for July 29, 2013, at 9:00 a.m.
According to documents filed by the government, Cody was the caregiver for John Arnold when he died sometime between 1994 and 1996. Instead of alerting authorities, Cody enlisted the help of others to bury his body on private property and conceal his death. Since that time, she has been stealing Arnold’s Social Security benefits. The investigation regarding the death of Mr. Arnold was conducted by the Douglas County Sheriff’s Office, and to date no charges have been brought against Cody related to the manner of Mr. Arnold’s death or the disposal of his body.
The plea agreement anticipates that Cody’s sentencing guideline range will be 21-27 months in prison, in addition to the 24-month mandatory prison sentence for aggravated identity theft. The government will be seeking the maximum sentence under the sentencing guidelines. The plea agreement also requires Cody to pay $203,528 in restitution including relinquishing her federal retirement account of approximately $36,000 to the government to be applied towards her restitution obligation.
Cody’s husband Ernest Cook pleaded guilty to receiving stolen property and is scheduled to be sentenced July 30, 2013, at 10:00 a.m.
The case was investigated by the Social Security Administration Office of Inspector General, Office of Investigations, the Douglas County Sheriff’s Office, and the Roseburg Police Department, and is being prosecuted by Special Assistant United States Attorney Helen L. Cooper, as part of a partnership venture between the Social Security Administration Office of General Counsel and the United States Attorney’s Office.
Business Owner Failed to Pay Withheld Employee Taxes to IRSRead the Press Release
ERIE, Pa. -A resident of Fairview, Pennsylvania, pleaded guilty in federal court to charges of violating federal income tax laws, United States Attorney David J. Hickton announced today.
Kevin Hanlon, 47, pleaded guilty to three counts before Senior United States District Judge Maurice B. Cohill, Jr.
In connection with the guilty plea, the court was advised that Hanlon failed to make payroll tax payments to the Internal Revenue Service on behalf of his employees at KH Express, LLC and CJT Logistics, Incorporated from 2005 through 2008. According to the Indictment, although payroll taxes (including income, medicare and social security taxes) had been withheld from employee pay, Hanlon failed to pay over to the IRS approximately $473,647.32 of the employee payroll taxes that had been withheld from 2005 through 2008.
Judge Cohill scheduled sentencing for August 12, 2013 at 2:30p.m. The law provides for a total sentence of 15 years in prison, a fine of$750,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offenses and the criminal history, if any, of the defendant.
Pending sentencing, the court continued Hanlon on bond.
Assistant United States Attorney Marshall J. Piccinini is prosecuting this case on behalf of the government.
The Internal Revenue Service, Criminal Investigation conducted the investigation that led to the prosecution of Hanlon.
Bismarck Man Sentenced for Sex Crime of Coercion & EnticementRead the Press Release
BISMARCK – U.S. Attorney Timothy Q. Purdon announced that on May 6, 2013, Aaron E. Masser, 29, Bismarck, N.D., was sentenced by U.S. District Judge Daniel L. Hovland on a charge of coercion and enticement. Masser pleaded guilty to the charge on Feb. 19, 2013.
Judge Hovland sentenced Masser to serve four years and nine months in federal prison, to be followed by five years of supervised release. Masser was ordered to pay a $100 special assessment to the Crime Victim’s Fund.
From June 2012 until August 2012, Masser communicated through Facebook and text messaging with someone he believed to be a 13-year-old female. The female was actually an undercover member of the Bismarck Police Department. Masser, through his communications, arranged a meeting with the juvenile in a Bismarck park to engage in sexual activity. When Masser arrived at the park to meet the juvenile, he was met by members of the Bismarck Police Department and agents from Homeland Security Investigations and was immediately placed under arrest.
This investigation was initiated by the North Dakota Internet Crimes Against Children Task Force and was a cooperative effort of Homeland Security Investigations and the Bismarck Police Department.
This case was brought as a 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 United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Assistant U.S. Attorney Gary Delorme prosecuted the case.
Bank Teller Charged with Embezzling Money from BankRead the Press Release
MINNEAPOLIS—Last week in federal court, a 64-year-old woman from the southeastern Minnesota community of Wykoff was charged with embezzling approximately $35,520 from the Security State Bank where she was employed as the head teller. On May 3, 2013, Cheryl Lynn Holzer was charged with one count of bank embezzlement.
Allegedly, between December 2010 and February 2012, Holzer took bundles of cash from the bank’s vault for her personal use. She worked at the bank, located in Wykoff.
If convicted, Holzer faces a potential maximum penalty of 30 years in prison. Any sentence will be determined by a federal district court judge. This case is the result of an investigation by the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney Thomas Calhoun-Lopez.
A defendant, of course, is presumed innocent until he or she pleads guilty or is proven guilty at trial.Ashton Pleads Gulty to Kidnapping Resulting in Death, Firearms Charge in Federal Court in St. GeorgeRead the Press Release
ST. GEORGE, UT – Paul Ashton, age 34, of St. George, Utah, pleaded guilty to kidnapping resulting in death – aiding and abetting and discharging a firearm – aiding and abetting in relation to a crime of violence Monday afternoon in federal court in St. George in connection with the October 2010 kidnapping and death of Bradley Eitner.
Ashton, who waived indictment, was charged in a two-count Felony Information unsealed Monday afternoon during court proceedings. The first count of the Information charged Ashton with aiding and abetting in the kidnapping resulting in death of Eitner on Oct. 31, 2010. The count alleged Ashton transported the victim from Utah to Arizona where he was killed. The second count alleged Ashton aided and abetted in the use and discharge of a firearm during the kidnapping. Eitner was 43 at the time of his death.
As a part of the plea agreement filed in court Monday afternoon, Ashton admitted that Eitner was at his home in St. George, along with another individual who was not involved in his criminal conduct. Eitner was asleep (passed out) on his couch, according to the plea agreement. Ashton admitted that he and the other individual lifted Eitner off the couch to carry him to Ashton’s truck. Ashton admitted he banged Eitner’s head against the frame of the door at least once. He also admitted placing Eitner in the back of the pick-up truck and slamming the tailgate against Eitner’s head at least once. Ashton and the other individual then drove around with Eitner in the back of the truck, according to the plea agreement.
Ashton admitted the other individual urged him to either take Eitner to a hospital or to the homeless shelter. Ashton admitted he told the other individual he was going to smash Eitner’s head with a rock and beat his head with a shovel. Ashton admitted stopping the pick-up truck, retrieving a rock, and striking Eitner in the head with the rock. Ashton then drove to the other individual’s house, dropped him off, and drove away with Eitner still in the back of the pick-up.
Ashton admitted that during the same night, he drove to the home of an accomplice and the two then drove Eitner to Arizona to a location in the desert with the intention of killing him. According to Ashton, they assisted the victim out of the truck in a secluded, remote location where Ashton’s accomplice shot him twice with a rifle. Ashton admitted that his accomplice pushed Eitner off an embankment and they left him there, hidden in a rock crevice.
Eitner’s body was discovered March 11, 2011, and an autopsy was performed March 14, 2011, by the Coconino County, Arizona, medical examiner. The medical examiner determined that the cause of Eitner’s death was blunt force head trauma and a single penetrating, gunshot wound of the head. The manner of death was homicide.
As a part of the plea agreement executed Monday, federal prosecutors agreed to recommend that the statutory mandatory minimum sentence of life in prison be imposed for the kidnapping resulting in death count of the Information. Prosecutors also agreed to recommend that the statutory minimum sentence of 10 years be imposed for the firearm count and that the sentence be served consecutive to the term of imprisonment for the first count. A sentencing date has not been scheduled.
The case is being prosecuted by the U.S. Attorney’s Office and investigated by the FBI.
Armed Robber Sentenced to 32 Years After Robbing the Same Store Twice and Firing His Gun at ClerkRead the Press Release
Tampa, Florida - U.S. District Judge Steven D. Merryday sentenced Tavis Toney today (24, Miami) to 32 years in federal prison for carrying and brandishing a firearm during a robbery of a convenience store, and for carrying, brandishing and discharging a firearm during a second robbery of the same convenience store. The court also ordered Toney to forfeit a Cobra .380 caliber semi-automatic pistol, which he used to commit the armed robberies. As part of his sentence, the court ordered Toney to pay restitution in the amount of $1,669, representing the proceeds of the criminal conduct, and damages caused to the robbed convenience store. Toney pleaded guilty on February 8, 2013.
According to court documents, on August 3, 2012, Toney and another individual robbed a BP Convenience Store/Kwik Pick Foods in Pasco County. They pointed firearms at the store clerks, and ordered all store customers on the ground. Toney and the other robber took $260 from a patron, and $750 from the store’s cash register before fleeing the scene. On August 7, 2012, Toney attempted to rob the same convenience store at gunpoint again. Wearing a hat/mask and gloves, and using the Cobra .380 caliber semi-automatic pistol, Toney ordered everyone in the store on the ground. A store clerk, who had also been robbed during the earlier robbery, managed to grab a revolver and shoot at Toney. Toney ducked, and shot at the store clerk as he ran out of the store, dropping his semi-automatic weapon as he fled.
This case was investigated by the Federal Bureau of Investigation, and the Pasco County Sheriff’s Office. It was prosecuted by Assistant United States Attorney Mark E. Bini.
Armed Career Criminal Exiled to 15 Years in PrisonRead the Press Release
Baltimore, Maryland - U.S. District Judge Ellen L. Hollander sentenced Samuel Sterling, age 35, of Baltimore, Maryland, today to 15 years in prison followed by three years of supervised release for being a felon in possession of a gun. Judge Hollander enhanced Sterling’s sentence upon finding that he is an armed career criminal based on three previous convictions for a drug offense and violent crime.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Steven L. Gerido of the Bureau of Alcohol, Tobacco, Firearms and Explosives - Baltimore Field Division; Baltimore City State’s Attorney Gregg L. Bernstein; and Baltimore Police Commissioner Anthony W. Batts.
According to his plea agreement, on April 9, 2012 Baltimore police detectives saw Sterling and an individual standing on a corner near the intersection of LaFayette and Port Streets in Baltimore, conducting what appeared to be a hand-to-hand drug transaction. When the detectives approached, Sterling ran away, throwing a gun to the ground. A short time later Sterling was taken into custody. A .32 caliber semi-automatic pistol and orange topped vials containing cocaine were subsequently seized. Sterling had previously been convicted of a felony and was prohibited from possessing a gun.
United States Attorney Rod J. Rosenstein commended the ATF, Baltimore Police Department and Baltimore City State’s Attorney's Office for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney Clinton J. Fuchs, who prosecuted the case.
Alleged Bonanno Associate Pleads Guilty to Narcotics Trafficking Crimes Carrying Sentence of 10 Years to LifeRead the Press Release
John Venizelos, also known as “John V,” “Big Man” and “John from Staten Island,” an alleged associate of the Bonanno organized crime family of La Cosa Nostra, pled guilty earlier today before U.S. Magistrate Judge Joan M. Azrack at the federal courthouse in Brooklyn to drug trafficking charges contained in a superseding indictment returned on April 3, 2013. When sentenced, Venizelos will face a statutory mandatory minimum ten-year sentence and a maximum of life imprisonment. Venizelos will also face a maximum fine of $10 million and will forfeit $148,480 and two firearms that federal agents seized from his residence.
The guilty plea was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and Brian R. Crowell, Special Agent-in-Charge of the Drug Enforcement Administration, New York (DEA).
According to the indictment and other court filings submitted by the government, Venizelos was a major Staten Island-based distributor of narcotics for a Canadian narcotics trafficking enterprise. Specifically, Venizelos was charged with narcotics and firearm-related offenses and witness tampering as a part of an indictment in which 10 members of a Montreal-based criminal enterprise that has connections with the Bonanno and Rizutto organized crime families and the Hell’s Angels have been charged with trafficking over $1 billion worth of marijuana and cocaine in the United States. Venizelos was charged with witness tampering in connection with his attempts to dissuade a co-conspirator from cooperating with law enforcement by, among other things, informing the co-conspirator about a $2 million “hit fund” set aside to murder or otherwise retaliate against any individuals who cooperated with the government.
During the course of the investigation, federal agents seized more than 80 kilograms of cocaine and approximately $10,000,000 in suspected drug proceeds. At the time of Venizelos’s arrest, agents discovered narcotics, multiple encrypted Blackberry devices, approximately $150,000 in drug proceeds, and multiple firearms in his residence – including a loaded semi-automatic handgun that had been stolen from a law enforcement officer. During the search of Venizelos’s residence, federal agents also discovered several handwritten letters addressed to Venizelos by an incarcerated associate of organized crime discussing a myriad of violent crimes committed by the author with, or on behalf of, Venizelos, including “a broad daylight kidnaping” and “torture” of an individual Venizelos suspected of stealing his drugs, threats of violence and vicious assaults against customers who owed Venizelos drug debts, and preventing a witness (through threats and intimidation) from positively identifying Venizelos for a crime that would have resulted in him serving “at least 7 years in jail.”
“Venizelos used violence and intimidation to protect his position as a major narcotics distributor. Those who challenged him were threatened, tortured, and beaten. Venizelos’s conviction underscores this Office’s strong commitment to prosecuting drug traffickers who flood our communities with narcotics, especially when those individuals have chosen a life of organized crime,” stated United States Attorney Lynch.” Ms. Lynch extended her grateful appreciation to the Drug Enforcement Administration, the New York Police Department, and New York State Police for their work on the case.
DEA Special Agent-in-Charge Crowell stated, “This is a significant guilty plea. Venizelos chose a life of crime and was involved with an international trafficking organization resulting in the seizure of stolen handguns, 80 kilograms of cocaine, and $10 million in drug cash. Venizelos had his hand in several crimes affecting our communities, and I commend our NYPD Detectives, NYSP Investigators, and Special Agents for their diligence in targeting those responsible for threatening our neighborhoods with drugs and violence.”
The government’s case is being prosecuted by Assistant United States Attorneys Steven L. Tiscione, Gina M. Parlovecchio, Amir H. Toossi, and Tanisha Payne.
The Defendant:
JOHN VENIZELOS
Age: 336 Georgia Residents Charged in Meth ConspiracyRead the Press Release
DUBLIN, GA – A federal indictment has charged six defendants with a conspiracy to manufacture methamphetamine. The indictment results from a joint investigation by the ATF and the Johnson County Sheriff’s Office (JCSO).
United States Attorney Edward Tarver said, “Investigations like these are the result of outstanding cooperation between federal, state and local law enforcement agencies. We are committed to bringing justice to those who profit from trafficking meth and other poison in our communities.”
If convicted of the drug conspiracy charge, each defendant faces a maximum statutory penalty of 20 years in prison and $1 million fine. The six defendants indicted on federal charges include:
James A. Willis, 31, Tennille, Georgia; April M. Johnson, 34, Wrightsville, Georgia; Jenna N. Waller, 28, Tennille, Georgia; Daniel L. Wittmer, 28, Wrightsville, Georgia; Krystal N. Wynn, 31, Wrightsville, Georgia; and, Justin H. Price, 23, Wrightsville, Georgia.
The JCSO and ATF arrested the defendants earlier this week. Initial court appearances were held on May 2 at the federal courthouse in Dublin.Mr. Tarver emphasized that the indictment is only an accusation and is not evidence of guilt. The defendants are entitled to a fair trial, during which, the Government bears the burden to prove guilt beyond a reasonable doubt.
Assistant United States Attorney Lamont A. Belk is prosecuting the case for the United States. For additional information, please contact First Assistant United States Attorney James D. Durham at (912) 201-2547.
5 May 2013
Ninth Member of Playboy Bloods Street Gang Convicted on Federal Racketeering, Murder, and Drug ChargesRead the Press Release
LAS VEGAS - - Following a month-long jury trial, Jacorey Taylor, aka “Mo-B,” 30, a member of the Playboy Bloods street gang, was convicted today of a racketeering conspiracy charge, murder in aid of the racketeering enterprise, use of a firearm during a crime of violence, conspiracy to distribute over 280 grams of crack cocaine, and two counts of possession with intent to distribute crack cocaine for conduct that included the retaliation murder of a man in November 2004, announced Daniel G. Bogden, United States Attorney for the District of Nevada and Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division.
Taylor was convicted of one count of engaging in a RICO conspiracy, one count of violent crime in aid of racketeering activity, one count of using a firearm during a crime of violence, one count of participating in a drug conspiracy, and two counts of possession of crack cocaine with the intent to distribute. He is the ninth of 10 gang members charged in federal court in 2008 to be convicted. The remaining defendant, Markette Tillman, 31, is scheduled for trial beginning on September 23, 2013.
Two Playboy Blood co-defendants were sentenced to 20 years each during Taylor’s trial. Steven Booth, 27, aka “Stevie-P,” and Reginald Dunlap, 30, aka “Bowlie,” were sentenced on April 9th and 10th , 2013, respectively, after pleading guilty to racketeering conspiracy charges that included aiding and abetting in murder in connection with the Playboy Bloods racketeering conspiracy.
According to court documents and evidence produced at trial, the Bloods is a nationally-known criminal street gang whose members engage in drug trafficking and acts of violence. The Playboy Bloods is a local “set” or affiliate of the Bloods, with local control and operation within the Las Vegas metropolitan area. Other Bloods sets within the Las Vegas metropolitan area include the Piru Bloods and the West Coast Bloods. A subset of the Playboy Bloods is Full Throttle Clique, a group made up of Playboy Bloods members who engage in acts of violence, including murder. According to evidence presented at trial, Taylor, Dunlap, and Booth were all members of the “Full Throttle Clique” of the Playboy Bloods. Taylor, along with other Playboy Bloods enterprise members, operated drug houses in the Sherman Gardens Annex (also known as “The Jets”) and the surrounding areas.
Taylor, along with co-defendants Reginald Dunlap and Steven Booth, was specifically convicted of participating in the murder of Billy Ray Thomas, who was shot multiple times in the back as he worked on a car in the parking lot of the Pecos Terrace Apartments located at 3555 E. Lake Mead Boulevard in Las Vegas while waiting to take his girlfriend to work on the morning of November 1, 2004. The defendants murdered Thomas in retaliation, mistakenly believing him to be a member of a rival street gang. According to evidence presented at trial, two car loads of Playboy Bloods members and associates, including Taylor, Dunlap, Booth and others, drove through known Crip neighborhoods searching for rivals to retaliate against for the murder of Quaza Burns, a leader of the Playboy Bloods. The victim, Billy Ray Thomas, had no gang affiliation.
Booth also admitted to participating in the murder on January 20, 2004, of Brian Wilcox, a security guard working in the Sherman Gardens Annex. Brian Wilcox was shot several times in the back while on duty.
Evidence produced at trial also showed that on March 21, 2002, Taylor, armed with an AR-15 style assault rifle and another man, armed with an handgun, entered the Klondike Casino in Henderson, Nevada, forced their way behind the casino cage, and robbed the casino of over $7,000 in currency.
United States Attorney Daniel G. Bogden commended the trial team and stated, “A federal jury today confirmed that Jacorey Taylor and other members of the Playboy Bloods sold drugs, committed robberies, intimidated security guards and other citizens and murdered innocent victims. It was only through the persistent hard work of the FBI and our local law enforcement partners, along with dedicated federal prosecutors from my office and the Department of Justice’s Organized Crime and Gang Section, that a previously unsolved murder was prosecuted and those gang members were brought to justice. The Sherman Gardens and the surrounding neighborhoods in Las Vegas are safer because of those efforts.”
Taylor has been in federal custody since 2008, and is scheduled to be sentenced on August 8, 2013, by Chief U.S. District Judge Robert C. Jones. Taylor faces up to 20 years on the racketeering conspiracy count, mandatory life in prison on the murder in aid of racketeering charge, up to life for using a firearm in furtherance of a violent crime, 20 years to life on the conspiracy to distribute crack cocaine and up to 30 years in prison for each count of possession with intent to distribute crack cocaine. In the federal system, there is no parole and by statute Taylor faces a mandatory sentence of life without parole for his murder conviction.
Taylor was the ninth member of the Playboy Bloods enterprise convicted of racketeering conspiracy charges.The eight other defendants who have been convicted and sentenced are:
Steven Booth, aka “Stevie-P,” 27, pleaded guilty to RICO conspiracy, and was sentenced to 20 years in prison on April 10, 2013; Reginald Dunlap, aka “Bowlie,” 30, pleaded guilty to RICO conspiracy, and was sentenced to 20 years in prison on April 9, 2013;
Demichael Burks, aka “Mikey P,” 29, pleaded guilty to RICO conspiracy, and was sentenced to 6½ years in prison on Dec. 3, 2010.
Anthony Mabry, aka “Akim Slim,” 43, pleaded guilty to RICO conspiracy and was sentenced to 14 years in prison on Oct. 20, 2010;
Delvin Ward, aka “D-Luv,” 37, pleaded guilty to RICO conspiracy and was sentenced to 11 years in prison on Sept. 17, 2010;
Terrence Thomas, aka “Seven,” 40, pleaded to drug conspiracy and was sentenced to 10 years in prison on June 16, 2010;
Sebastian Wigg, aka “Rock,” 36, pleaded to drug conspiracy and was sentenced to five years in prison on March 29, 2010; and
Fred Nix, aka “June P,” 36, pleaded to drug conspiracy and was sentenced to five years in prison on March 29, 2010.
The cases were investigated by the FBI’s Las Vegas Safe Streets Gang Task Force, which include officers from the North Las Vegas Police Department and Las Vegas Metropolitan Police Department, and prosecuted by Assistant United States Attorneys Nicholas D. Dickinson, and Phillip N. Smith, Jr., and Kevin L. Rosenberg, Trial Attorney with the U.S. Department of Justice Organized Crime and Gang Section.
3 May 2013
Week in Review – South BendRead the Press Release
FOR IMMEDIATE RELEASECONTACT: Mary Hatton
www.usdoj.gov/usao/inn/ CELL: (219) 314-9993
South Bend, Indiana —The United States Attorney’s Office announced the following activity in Federal Court:
COMPLAINT:
Nathan Demar Huey-Dingle, 31, of South Bend, Indiana, was charged by Complaint with sex trafficking by force, fraud and coercion and transporting across state lines for the purpose of engaging in prostitution.This case resulted from an investigation by members of the Indiana Internet Crimes Against Children Task Force, including the Federal Bureau of Investigation.This case has been assigned to and will be prosecuted by Assistant United States Attorney Jill Koster.
The United States Attorney's Office emphasized that a Complaint is merely an allegation and that all persons charged are presumed innocent until and unless proven guilty in court.
DISPOSITIONS:
Raymond Alger, 49, of Granger, Indiana, was sentenced by District Judge Robert Miller, Jr. to 27 months imprisonment, a $5000.00 fine and 5 years of supervised release after pleading guilty to the felony offense of possession of child pornography.This case was the result of an investigation by the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations.This case was prosecuted by Assistant United States Attorney John Maciejczyk.
Jeremy Dyer, 32, of Iroquois, Indiana, was sentenced by District Judge Robert Miller, Jr. to 48 months imprisonment and 1 year of supervised release after pleading guilty to the felony offense of use of a phone in the distribution of marijuana.This case was the result of an investigation by the Drug Enforcement Administration.This case was prosecuted by Assistant United States Attorney Frank Schaffer.
Karla Ruelas, 23, of South Bend, Indiana, was sentenced by District Judge Robert Miller, Jr. to 15 months imprisonment and 2 years of supervised release after pleading guilty to the felony offenses of conspiracy to harbor illegal aliens and mail fraud.According to documents filed by the government in this case, Ruelas admitted that she worked for Servicios Mi Tierra (SMT) in South Bend, Indiana.She was hired by Paulino Ascencion-Apolino to perform assorted services for members of the Hispanic community in the South Bend area, in part because she could speak Spanish as well as English.Among other things, she helped aliens of Hispanic descent who were in the United States in violation of immigration laws. Illegal aliens cannot register their motor vehicles with the Indiana Bureau of Motor Vehicles (BMV) because they cannot obtain a Social Security Number (SSN).Ruelas would generate an Employer Identification Number (EIN) as a substitute for an SSN and then use that EIN in the BMV registration process. As part of her duties at SMT, she would sign other peoples' names, both buyers and sellers, to vehicle titles and other paperwork without their permission.She would also change the vehicles' purchase price in order to reduce the amount of tax that SMT's customers would have to pay to the State of lndiana. This case was the result of an investigation by the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and United States Postal Service-Office of the Inspector General.This case was prosecuted by Assistant United States Attorney Kenneth Hays.
Richard Hodges, 69, of Michigan City, Indiana, was sentenced by District Judge Jon DeGuilio to 2 years of supervised release and $31,302.00 in restitution after pleading guilty to the felony offense of theft of Social Security Retirement Income Benefits.Hodges continued to collect his father’s monthly benefit payments after his father had passed away.This case was the result of an investigation by the Social Security Administration.This case was prosecuted by Assistant United States Attorney Barbara Brook.
Jeffrey Cripe, 38, of Elkhart, Indiana, was sentenced by District Judge Jon DeGuilio to 20 years imprisonment and 25 years of supervised release after pleading guilty to the felony offense of distribution of child pornography.According to documents filed by the government in this case, Cripe made child pornography available to be downloaded between January 2012 and July 2012.The material he made available included sadistic images of minors being sexually abused. Messages recovered from Cripe’s computer also indicated that he had approached numerousfemale minors between the ages of 12 and 16 years old online for a period over a year and a half,and enticed them into performing sexual acts and creating pornographic images of themselves for him. This case resulted from an investigation by members of the Indiana Internet Crimes Against Children Task Force, including the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and the Indiana State Police.This case was prosecuted by Assistant United States Attorney John Maciejczyk.
Eric Arnold, 40, of Macy, Indiana, was sentenced by District Judge Robert Miller, Jr. to 27 months imprisonment and 1 year of supervised release after pleading guilty to the felony offense of use of a communication facility to distribute marijuana.This case was the result of an investigation by the Drug Enforcement Administration. This case was prosecuted by Assistant United States Attorney Frank Schaffer.
Week in Review – HammondRead the Press Release
FOR IMMEDIATE RELEASECONTACT: Mary Hatton
www.usdoj.gov/usao/inn/ CELL: (219) 314-9993
Hammond, Indiana—The United States Attorney’s Office announced the following activity in Federal Court:
COMPLAINT:
Nathan Demar Huey-Dingle, 31, of South Bend, Indiana, was charged by Complaint with sex trafficking by force, fraud and coercion and transporting across state lines for the purpose of engaging in prostitution.This case resulted from an investigation by members of the Indiana Internet Crimes Against Children Task Force, including the Federal Bureau of Investigation.This case has been assigned to and will be prosecuted by Assistant United States Attorney Jill Koster.
PLEA:
Joshua Atwood, 29, of Crown Point, Indiana, pled guilty before Senior District Judge Rudy Lozano to the felony offense of possession of child pornography.This charge was filed as a result of an investigation by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations.This case is being prosecuted by Assistant United States Attorney Jill Koster.
Francisco Perez, 32, of Gary, Indiana, pled guilty before Magistrate Judge Christopher Nuechterlein to the felony offense of possession with the intent to distribute cocaine.Magistrate Nuechterlein is recommending that the district court accept the tendered guilty plea.Parties have 10 days in which to object to the magistrate judge’s recommendation.Sentencing has been set for 8/1/13.This charge was filed as a result of an investigation by the Drug Enforcement Administration.This case is being prosecuted by Assistant United States Attorney Frank Schaffer.
DISPOSITIONS:
Michael Hostetler, 29, of Portage, Indiana, was sentenced by District Judge Joseph Van Bokkelen to 96 months imprisonment, $2000.00 in restitution to each of two victims, a $5000.00 fine and 20 years of supervised release after pleading guilty to the felony offenses of receipt of child pornography and possession of child pornography.According to documents filed by the government in this case, a Michigan City Police Department officer using a computer connected to the Internet launched a publicly available peer-to-peer ("P2P") file sharing program from his office in the Michigan City Police Department. The officer browsed the shared directories and was able to download at least three images that depicted minors engaged in sexually explicit conduct. The IP address was identified as belonging to Hostetler.A search warrant was obtained authorizing a search of Hostetler’s residence where law enforcement found videos depicting minors engaging in sexually explicit conduct saved to a laptop computer belonging to Hostetler.This case resulted from an investigation by members of the Indiana Internet Crimes Against Children Task Force, including the Federal Bureau of Investigation, the Michigan City Police Department and the Indiana State Police.This case was prosecuted by Assistant United States Attorney Jill Koster.
Maria Sustaita, 50, of East Chicago, Indiana, was sentenced by District Judge Joseph Van Bokkelen to 24 months plus 12 days imprisonment, $6,836.14 in restitution and 1 year of supervised release after pleading guilty to the felony offenses of aggravated identity theft and obstruction of correspondence.According to documents filed by the government in this case, Sustaita added her name, or an alias, to the existing credit card accounts of victims without their knowledge; made purchases on these takeover credit accounts of the victims without their knowledge; opened new credit card accounts utilizing the personal identifying information of the victims without their knowledge;made personal purchases on these fraudulently opened credit cards without the knowledge of the victims; redirected U.S. mail from the address of the victims to her residence; and redirected the victims mail, as well as any other correspondence or packages associated with the fraudulently obtained credit cards. The victims were seniors - one victim was born in 1925 making him 87 years of age and the other victim was born in 1926 making her 86 years of age. The defendant entered the homes of these individuals with the express purpose of victimizing them based upon their age. This case was the result of an investigation by the United States Postal Service-Office of the Inspector General.This case was prosecuted by Assistant United States Attorney Toi Houston.
Jose Zambrano, 33, of Chicago, Illinois, a defendant in the case US v Vargas et al., was sentenced by Senior District Judge Rudy Lozano to 240 months imprisonment and 5 years of supervised release after pleading guilty to the felony offense of conspiracy to participate in racketeering activity.Zambrano, a member of the Latin Kings street gang, conspired to conduct and participate in the conduct of the enterprise through a pattern of racketeering activity consisting of multiple acts involving murder, robbery and narcotics trafficking. This case is being investigated by the Federal Bureau of Investigation , the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF); the Drug Enforcement Administration (DEA), U.S. Immigration and Customs Enforcement (ICE); the National Gang Targeting, Enforcement & Coordination Center (GangTECC); the National Gang Intelligence Center; the Chicago Police Department; the Griffith Police Department; the Hammond Police Department; the Highland Police Department; the Lake County, Indiana, HIDTA and the Houston, Texas Police Department. This case was prosecuted by Trial Attorney Joseph Cooley of the Department of Justice Criminal Division, Gang Unit, and Assistant United States Attorney David Nozick.
Marcus McCants, 35, of Sauk Village, Illinois, a defendant in the case US v Powell et al., was sentenced by Senior District Judge Rudy Lozano to 57 months imprisonment and 5 years of supervised release after pleading guilty to the felony offense of conspiracy to distribute one kilo or more of heroin.This case was the result of an investigation by the Drug Enforcement Administration.This case was prosecuted by Assistant United States Attorney Jennifer Chang-Adiga.
Week in Review – Fort WayneRead the Press Release
FOR IMMEDIATE RELEASECONTACT: Mary Hatton
www.usdoj.gov/usao/inn/ CELL: (219) 314-9993
Fort Wayne, Indiana—The United States Attorney’s Office announced the following activity in Federal Court:
DISPOSITION:
Mark Honer, 29, of Fort Wayne, Indiana, was sentenced by District Judge Theresa Springmann to 92 months imprisonment and 4 years of supervised release after pleading guilty to the felony offense of possession with the intent to distribute crack cocaine.According to documents filed by the government in this case, during the course of the investigation, crack cocaine was purchased from Honer and all were “controlled” drug transactions. This case was the result of an investigation by the Federal Bureau of Investigation and the Fort Wayne Police Department.This case was prosecuted by Assistant United States Attorney Lesley Miller Lowery.
Venice Man Pleads Guilty to Firearm OffenseRead the Press Release
On May 2, 2013, Justin J. Harper, a 24-year old Venice, Illinois, man pled guilty in federal district court, in East St. Louis, to unlawful possession of a firearm by a previously convicted felon, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today. Harper is scheduled for sentencing on August 5, 2013, at which time he faces a maximum potential sentence of 10 years’ in prison and a fine of up to $250,000, not more than 3 years’ of supervised release after his prison term, and a mandatory special assessment of $100. Harper also agreed to the forfeiture of the firearm.
Court proceedings revealed that on October 5, 2011, law enforcement officers executed a search warrant at the rear residence of a home in Venice, Illinois. As they entered the residence, Harper was seen exiting a rear bedroom. Upon searching this bedroom, officers observed and recovered a 9mm semi-automatic pistol on the floor protruding from underneath the bed.
This case was investigated the Bureau of Alcohol, Tobacco, Firearms and Explosives and is assigned to Assistant United States Attorney Daniel T. Kapsak for prosecution.
Union Leader, Malvin Bergeron, Charged with Stealing Union FundsRead the Press Release
MALVIN BERGERON, age 63, a resident of Jefferson Parish, was charged today in a one-count Bill of Information for embezzling assets of a local labor union in violation of Title 29, United States Code, Section 501(c), announced United States Attorney Dana J. Boente.
According to court records, BERGERON held the positions of President and Secretary Treasurer of the Graphic Communications Union Local 537M. Local 537M maintained a checking account with a local bank to hold the membership dues that were collected from the union members. As the union’s President, BERGERON was able to access the funds in the union account through checks. According to the Bill of Information, from on or about May 9, 2008 and continuing through on or about February 9, 2009, BERGERON embezzled $4,041.88 from the union account by writing, endorsing, and cashing checks made payable to him personally that were not authorized by the union’s bylaws.
If convicted, BERGERON face a maximum term of imprisonment of five years, a fine of $10,000 and three years of supervised release following any term of imprisonment.
U. S. Attorney Dana J. Boente reiterated that the bill of information is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt.
The case was investigated by the U.S. Department of Labor. The case is being prosecuted by Assistant U. S. Attorney Spiro G. Latsis.
(Download Bill of Information )
Two Defendants Charged in Theft from Seminole TribeRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Michael B. Steinbach, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, announced the return of a ten count indictment charging defendants Frank Excel Marley III, 39, of Miramar and Maria Hassun, 66, of Miami, with unjustly enriching themselves by stealing from the Seminole Tribe of Florida.
Specifically, both defendants are charged with one count of conspiring to commit mail and wire fraud; in violation of Title 18, U.S.C. § 1349, as well as nine counts of theft from an Indian Tribe, in violation of Title 18, U.S.C., §§ 1163 and 2.
According to the indictment, the defendants sought to enrich themselves unlawfully by defrauding the Seminole Tribe of Florida. The indictment states that from approximately October, 2006, through on or about March 3, 2011, the defendants did knowingly and willfully combine, conspire, confederate and agree to knowingly and with intent to defraud, devise and intend to devise a scheme and artifice to defraud and to obtain money from the Seminole Tribe of Florida, that is, approximately $1,033,605, by means of the United States mails and wire communications.
It is alleged that defendant Frank Excel Marley III, an attorney who was retained by the Seminole Tribe, proposed to the Tribe that they undertake a project to open radio stations at the Brighton and Big Cypress Reservations. It is further alleged that Marley retained outside law firms and vendors to assist in accomplishing the radio project and instructed co-defendant Maria Hassun, his administrative assistant, to increase the charges invoiced to the Tribe by inflating the amount of his billable hours and billing the Tribe for travel, conferences, phone calls and meetings that did not occur. The defendants submitted the monthly invoices by email, United States mail and fax to the Tribe for work purportedly done by the Marley Firm each month, which included inflated and falsified charges for the costs that had purportedly been incurred by third party consultants and law firms retained by Marley to assist him with the radio project and other matters on behalf of the Tribe.
If convicted, the defendants face a possible maximum statutory sentence of twenty years in prison for the conspiring to commit mail and wire fraud count and five years in prison for each count of theft from an Indian Tribe.
Mr. Ferrer commended the investigative efforts of the FBI and thanked the Seminole Tribe of Florida for their cooperation and assistance with the investigation. The case is being prosecuted by Assistant U.S. Attorney Neil Karadbil.
An indictment is only an accusation and a defendant is presumed innocent unless proven guilty.
Attachments: Indictment (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.
Truck Driver Appears in Federal Court on Drug ChargesRead the Press Release
-Nevada Highway Patrol Found Methamphetamine and Heroin in Truck During Traffic Stop-
RENO, Nev. – A Washington State man appeared before a federal magistrate judge this afternoon to answer federal drug distribution charges after a Nevada Highway Patrol Officer found 26 pounds of methamphetamine and six pounds of heroin in the tractor-trailer he was driving on U.S. Highway 6 in White Pine County, Nev., announced Daniel G. Bogden, United States Attorney for the District of Nevada.
Victor H. Orozco, 38, of Grandview, Wash., is charged in a two-count federal indictment dated May 1, 2013, with possession with intent to distribute methamphetamine and possession with intent to distribute heroin. He pleaded not guilty today before U.S. Magistrate Judge Valerie P. Cooke and was detained pending trial. If convicted on either count, he faces at least 10 years and a maximum of life in prison, and a $10 million fine.
Orozco, who was driving a tractor trailer containing watermelons, was pulled over by a Nevada Highway Patrol Officer on April 27, 2013, pursuant to a commercial vehicle inspection. Orozco consented to a search of the tractor trailer, and the Highway Patrol Officer discovered the methamphetamine and heroin wrapped in plastic under the sleeping compartment of the tractor in a large, black duffel bag.
This case is being prosecuted by Assistant U.S. Attorney James E. Keller, in coordination with White Pine County District Attorney Kelly Brown, and investigated by the Nevada Department of Public Safety, the Nevada Department of Investigations, and the United States Drug Enforcement Administration.
The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Trenton Resident Who Manufactured BombsSentenced Nine Years in PrisonRead the Press Release
A Trenton man was sentenced yesterday to nine years in prison for possessing explosives and making bombs, United States Attorney Barbara L. McQuade announced today.
McQuade was joined in the announcement by Acting Special Agent in Charge Daryl McCrary, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).
John Robert Kennedy 43, formerly of St. Joe, Indiana, was sentenced to 108 months in prison by United States District Judge John Corbett O'Meara and ordered to pay a $20,000 fine.
Kennedy was convicted following a three-week jury trial of Possession of a Destructive Device, Felon in Possession of a Destructive Device and Manufacture of a Destructive Device. Prior to trial he pleaded guilty to being a Felon in Possession of Ammunition and Explosives.
The evidence presented at trial showed that on April 28, 2011, defendant, disguising his voice in a foreign accent, made a telephonic bomb threat to Trenton High School. Defendant threatened that four bombs would be detonated in the school within the hour. The school was evacuated and searched. Later that evening a device was found in the parking lot area of the school by a teacher. On April 29, 2011, defendant detonated another device in the parking lot of an ACO hardware store in Trenton. Witnesses described an explosion with clouds of white smoke. Remnants of a destructive device were found and were determined by forensic experts to contain explosive materials. Defendant was identified as the suspect who placed the devices through the use of a Crime Stoppers announcement on local television. Kennedy was previously convicted of similar criminal charges involving explosives.
Kennedy has been in custody since his indictment in July 2011.The case was prosecuted by Assistant United States Attorney Susan Gillooly with the assistance of ATF, Detroit Field Division and the Trenton Police Department.
Three Men Involved in Illegal Sports Betting Ring Are SentencedRead the Press Release
The United States Attorney for the District of Connecticut today announced that three men involved in illegal sports bookmaking have been sentenced in Hartford federal court. Today, U.S. District Judge Vanessa L. Bryant sentenced ANTHONY SANTORO, also known as “Skinny,” 49, of Staten Island, N.Y., to eight months of imprisonment and three years of supervised release, and MICHAEL VITTI, also known as “Peewee,” 33, of Stamford, to 10 months of imprisonment and three years of supervised release. DANIEL DEGRUTTOLA, also known as “Dannyboy,” 33, of Stamford, was sentenced yesterday to three months of home confinement and three years of supervised release. In addition, SANTORO was ordered to forfeit $25,000, and VITTI and DEGRUTTOLA were each ordered to forfeit $100,000.
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 SANTORO, VITTI and DEGRUTTOLA 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.
SANTORO, VITTI and DEGRUTTOLA each previously 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.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722 [email protected]Third Defendant Pleads Guilty to Fraudulent Tax Refund SchemeRead the Press Release
Defendant and Co-Conspirators Used False Tax Identification Numbers to Seek more than $5 Million in Refunds
CHARLOTTE, N.C. – A Charlotte woman charged in a scheme to defraud the government by obtaining false and fraudulent income tax refunds pleaded guilty in U.S. District Court today, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina.
Jeannine Hammett, Special Agent in Charge of the Internal Revenue Service-Criminal Investigation Division joins U.S. Attorney Tompkins in making today’s announcement.
A criminal bill of indictment filed in December 2012, charged Ana Portillo, 42, of Charlotte (also known as Ana Portillo-Flores, Ana Flores-Portillo, Peladita Portillo or Lety Portillo), with one count of false claims conspiracy, for the filing of false tax returns seeking tax refunds based on fraudulently obtained Individual Taxpayer Identification Numbers (ITINs). According to court documents and today’s plea hearing, from in or about January 2012 and continuing to July 2012, Portillo and her co-conspirators agreed to defraud the U.S. Treasury Department by participating in a scheme to obtain false tax refunds. Court records show that the co-conspirators had obtained ITIN numbers for various individuals using Mexican birth certificates and other documents. The co-conspirators then used these ITIN numbers to prepare false federal tax returns seeking fraudulent refunds claiming false wage, income, and withholding information and claiming multiple dependents. According to court filings and court proceedings, part of the scheme was that the co-conspirators would rent apartments at complexes featuring centralized mailboxes and use addresses at the apartment complexes as the addresses on the fraudulent tax returns. Court documents indicate that the co-conspirators then caused the Treasury Department to mail the false tax refund checks to these specially chosen addresses.
According to the charging documents and information presented in court, at least 1,104 fraudulent tax returns have been associated with the conspiracy, claiming $5.1 million in refunds. Of this amount, the IRS issued refunds totaling approximately $1.6 million. Court records show that the co-conspirators would arrange for the refund checks to be cashed and would then deposit that cash into bank accounts or hold it in safety deposit boxes and wire it to Mexico.
Portillo entered her guilty plea before U.S. Magistrate Judge David S. Cayer. Her co-conspirators, Cathy Cisneros, 30, and Candida Figueroa, 42, both of Charlotte, previously pleaded guilty to one count of false claims conspiracy for the same scheme, in October and November 2012, respectively.
Portillo has been released on bond pending sentencing. Both Figueroa and Cisneros have been in local federal custody since August 2012. A sentencing date for Portillo and her co-conspirators has not been set. Each defendant faces a maximum prison term of 10 years, a $250,000 fine, or both.
The investigation was handled by IRS-Criminal Investigations Division with substantial assistance from the U.S. Postal Service. The prosecution is being handled for the government by Assistant U.S. Attorney Jenny Grus Sugar of the U.S. Attorney’s Office in Charlotte.
Texas Syndicate Prison Gang Members Sentenced Today for Their Roles in Conspiring to Engage in Racketeering Offenses Including Murder and Attempted MurderRead the Press Release
Two members of the Texas Syndicate prison gang, Adam Chavez and Alejandro Flores, were sentenced today by the Honorable Chief Judge Fred Biery, announced United States Attorney Robert Pitman.
Both defendants were named in a 2011 federal indictment that charged twenty-three members of the Texas Syndicate prison gang with multiple racketeering offenses that included murder, attempted murder, conspiracy to murder, and drug-trafficking.
Adam Chavez, pleaded guilty to conspiring to engage in racketeering. As part of his guilty plea Chavez admitted his role in July 2, 2011, the murder of PriscillaVidaurri, who was killed when she was struck by gunfire intended for her brother-in-law. Chavez and other members of the Texas Syndicate gang targeted a fellow member of the gang, but in a case of mistaken identity, shot at the brother of their intended target and in the process, killed Ms. Vidaurri and injured her husband. Neither Ms. Vidaurrri nor her husband had any connection to the gang. By his plea, Chavez also admitted to his role in the drug trafficking activities of the gang. Today, Chief Judge Biery sentenced Chavez to a 30 year prison sentence for his role in the conspiracy followed by a five year term of supervised release.
Alejandro Flores also pled guilty to conspiring to engage in racketeering. By his guilty plea, Flores admitted to having participated in a shooting of a San Antonio man on March 25, 2011, in which Flores and other members of the Texas Syndicate shot at a person they suspected was a rival gang member. As part of his guilty plea, Flores admitted his participation in a conspiracy to kill rival gang members. Today, Chief Judge Biery sentenced Flores to 10 years of imprisonment followed by a three year term of supervised release for his role in the conspiracy.
This case was prosecuted by Assistant United States Attorneys Joey Contreras and Karen Norris. This case was investigated by the Drug Enforcement Administration, who were assisted by the San Antonio Police Department, Bexar County Sheriff’s Office, Bureau of Alcohol, Tobacco, and Firearms, and the Texas Department of Pardons and Parole.
Texas Man Sentenced for Operating Phony Invoice SchemeRead the Press Release
MINNEAPOLIS-- Earlier today in federal court, a 43-year-old Texas man was sentenced in connection with the operation of a phony invoice scheme that defrauded an Eagan-based company out of more than $600,000. United States District Court Judge Patrick J. Schiltz sentenced Clayton Craig Hogeland, of Aurora, Texas, to 200 months in prison on five counts of mail fraud, two counts of conspiracy to commit mail fraud, two counts of conspiracy to commit money laundering, and three counts of tax evasion. Hogeland was indicted, along with two others, on March 17, 2010, and was convicted on December 6, 2011.
Judge Schiltz also found that Hogeland had obstructed justice by faking a life-threatening medical condition, which caused multiple delays to both his trial and sentencing hearing. Hogeland cited this condition in a motion seeking a reduction in his sentence. Judge Schiltz concluded that Hogeland faked this illness by ingesting high levels of potassium, and found that Hogeland’s conduct justified a substantial upward variance in his sentence. Judge Schiltz said that Hogeland’s actions reflected “an unfathomable dishonesty and audacious selfishness.”
The evidence presented at trial proved that from January 2003 through April 2005, Hogeland conspired with others, including Jeffrey Cole Bennett, to defraud Advantage Transportation, a freight transportation logistics provider headquartered in Eagan. Advantage contracts with customers who have freight to be transported as well as with trucking companies willing to move that freight. Hogeland was Advantage’s general manager, and in May of 2003, he hired his friend Bennett to be the sales manager for the company’s Tennessee office, where he remained employed through September of 2006. Bennett was also charged in the fraud case.Following today’s sentencing, Kelly R. Jackson, Special Agent in Charge of the Internal Revenue Service-Criminal Investigation’s St. Paul Field Office, said, “The IRS enforces the nation’s tax and money laundering laws, but also takes particular interest in cases where someone, for their own personal benefit, has taken what belonged to others. Today’s sentencing of Mr. Hogeland shows how seriously the courts take federal tax and money laundering crimes.”
Craig I. Goldberg, Acting Postal Inspector in Charge of the Denver Division, which also covers the Twin Cities, added, “Postal inspectors will continue to protect the integrity of the U.S. Postal Service and aggressively investigate those cases where the U.S. mails are used to defraud individuals or businesses of money and property.”
To perpetrate the fraud, Bennett submitted false invoices to Advantage for nonexistent goods and services from four shell companies he formed: Air Catering Solutions and Marketing, Inc. (ACS Marketing), American Logistics Advisors, LTL Development.com, and Transportation Marketing Concepts. Bennett formed three of those companies for the sole purpose of conducting the fraud scheme. Payment of the invoices was then approved by Hogeland, who also caused checks to be issued to the shell companies, knowing the invoices were fraudulent. Between January of 2003 and April of 2005, those payments totaled more than $390,000.
Bennett kept approximately $250,000 of that money for himself, while paying out about $140,000 in kickbacks to Clayton Hogeland. To conceal those kickbacks, Bennett made the payments via checks issued to Clayton Hogeland’s wife, Jennifer Hogeland, who endorsed and deposited the checks into the couple’s joint bank account. In addition, Clayton Hogeland and Bennett routed the proceeds of the phony invoice scheme through Bennett’s shell companies, knowing the transfers were designed to conceal the fact that the money was obtained by fraud.
While employed by Advantage, Clayton Hogeland also orchestrated a second scheme to run false “commission” payments through fictitious companies formed by two other co-conspirators. That scam occurred after Advantage began providing freight transportation services to an airline company in 2003. Carl Frey, one of the co-conspirators, was employed by the airline and was responsible for arranging contracts with over-the-road shipping companies. At the direction of Hogeland, Frey formed a company, Flite Time, which Hogeland falsely characterized as a consultant, to be paid commissions from Advantage for freight assigned by the airline.
As a result, between 2003 and 2005, Frey was paid more than $90,000 in false “commissions” from Advantage, and Clayton Hogeland received $22,000 of that money in the form of kickbacks. All but two of the kickback payments were made by checks issued to Jennifer Hogeland, who deposited the funds into the couple’s joint bank account. The remaining two checks were issued in Clayton Hogeland’s own name.In 2005, Hogeland and Frey became concerned that Frey’s name was being associated with
Flite Time. Therefore, Hogeland recruited a second co-conspirator, William Gregory Braswell, to form a company that would replace Flite Time. That company, Air Cargo Consultants, began receiving the commission payments in 2005. Between 2005 and 2006, more than $180,000 in false commissions were paid by Advantage to Air Cargo Consultants. Out of those funds, Clayton Hogeland and Frey received $30,000 each. Again, payments were made by checks issued to Jennifer Hogeland.
In addition, Clayton and Jennifer Hogeland failed to report to the Internal Revenue Service or pay taxes on the money obtained through the two fraud schemes during tax years 2003 through 2005. However, after learning that the IRS was conducting a criminal tax investigation, the Hogelands sought to cover up their willful tax evasion by filing amended tax returns for tax years 2003 and 2004.
For his part, Bennett also failed to report or pay to the Internal Revenue Service (“IRS”) taxes on the money he obtained through the fraud scheme during tax years 2004 and 2005. After learning that the IRS was conducting a criminal tax investigation, he, like the Hogelands, sought to cover up his willful tax evasion by filing amended tax returns that included the fraud income.
On November 13, 2012, Bennett was sentenced to 95 months in federal prison for his role in the scheme. In February 2012, Braswell and Frey were sentenced, each to three years of probation. On January 10, 2013, Jennifer Hogeland was sentenced to 15 months in prison on three counts of conspiracy to commit tax evasion.
This case was the result of an investigation by the U.S. Postal Inspection Service and the IRS-Criminal Investigation. It was prosecuted by Assistant U.S. Attorneys Tim Rank and Julie E. Allyn.
This law enforcement action is in part sponsored by the interagency Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. It includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch and, with state and local partners, investigates and prosecutes significant financial crimes, ensures just and effective punishment for those who perpetrate financial crimes, combats discrimination in the lending and financial markets, and recovers proceeds for victims of financial crimes.Swinomish Tribal Member Sentenced to 20 Years in Prison for Second Degree MurderRead the Press Release
An enrolled member of the Swinomish Indian Tribe was sentenced today in U.S. District Court in Seattle to 20 years in prison and five years of supervised release for second degree murder, announced U.S. Attorney Jenny A. Durkan. KEVIN S. O’LEARY, 55, a resident of the Lummi Reservation admitted that on June 7, 2012, he used a pillow to smother his common-law wife, Valerie Jefferson, who was a Lummi tribal member. O’LEARY then wrapped her body in a blanket and hid it under the bed. Law enforcement discovered Jefferson’s body five days later. At sentencing U.S. District Judge Robert S. Lasnik said, “This was an especially devastating domestic violence murder. The children lost their mother and grandmother. And the defendant’s actions after the death showed special callousness to those who loved Valerie Jefferson.”
According to the facts admitted in the plea agreement, O’LEARY and Jefferson had been arguing about an affair O’LEARY had had over a decade ago. After several hours of arguing, O’LEARY pushed Jefferson onto their bed, grabbed a pillow and held it tightly over her neck and pressed down until her body went limp and her eyes rolled up in her head. O’LEARY admits he killed Jefferson with malice aforethought, and wrapped the body in a blanket, and hid it under their bed. Both were enrolled tribal members and the murder was on Lummi tribal trust land, giving federal authorities jurisdiction in the case.
Speaking to the court Valerie Jefferson’s eldest daughter said, “We want him to know what he has taken from us. He’s taken away our mother and our father – he was the only father we knew….. My mom was a beautiful person. We hurt every day…. We are going to live in her honor the way she would have wanted us to be.”
Prosecutors noted that O’LEARY had previously caused the death of two other people writing to the court, “The defendant was convicted in 1981 with Negligent Homicide in Skagit County. In that case, the defendant was driving drunk when he missed a corner, and drove off the highway into a ravine. Two of his passengers were killed in the accident, including his girlfriend at the time. He received a 10-year sentence that was suspended, and he was placed on Probation.” Judge Lasnik noted that under today’s sentencing statutes, O’LEARY would have gotten far more prison time for that crime.
The case was investigated by Lummi Tribal police and the FBI. The case is being prosecuted by Assistant United States Attorney Jerrod Patterson.
Southern Oregon Conspirators Indicted in Scheme to Defraud Hundreds of VictimsRead the Press Release
MEDFORD, Ore. – Robert Powelson, 30, Eduardo Navarro, 24, Dallas Tedford, 32, Kayla Strange, 23, and Lana Marshall, 29, all of Medford, Oregon , were indicted by a federal grand jury. They were all charged with mail theft, aggravated identity theft, bank fraud and conspiracy to commit mail theft, and bank and mail fraud. The charges involve the theft of mail from over 800 victims from the Medford, Oregon area during a seven month period beginning in September 2012 and include a scheme for using the victim’s stolen personal identity to defraud banks and local businesses. Navarro and Tedford are currently in custody. Arrest warrants have been issued for Powelson, Strange, and Marshall and anyone with information about their whereabouts is requested to contact the Medford Police Department or their nearest law enforcement agency.
For more information, please see the attached Indictment Here
An indictment is only an accusation of a crime, and a defendant should be presumed innocent unless and until proven guilty. If convicted, the sentences range from maximum sentences of 5 to 30 years in prison, with a mandatory minimum sentence of two years for an aggravated identity theft conviction.
The U.S. Attorney’s Office is working with the U.S. Postal Inspection Service and the Medford Police Department in the investigation and prosecution of this case.
Somerset Man Admits Illegally Converting Social Security Benefits to His Own UseRead the Press Release
JOHNSTOWN, Pa. - A resident of Somerset, Pa., pleaded guilty in federal court in Johnstown to a charge of conversion of government funds, United States Attorney David J. Hickton announced today.
James E. Mimna, Jr., 56, pleaded guilty to the indictment before United States District Judge Kim R. Gibson.
In connection with the guilty plea, from Oct. 1, 2007, to Dec. 31, 2012, Mimna did receive and falsely convert to his own use $107,458.10, which represents 156 payments made to him by the Social Security Administration to which he was not entitled.
Judge Gibson scheduled sentencing for Oct. 17, 2013, at 10:30 a.m. The law provides for a maximum total sentence of 10 years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Stephanie L. Haines is prosecuting this case on behalf of the government.
The Social Security Administration, Office of Inspector General, conducted the investigation that led to the prosecution of Mimna.
Six Persons Charged with Unlawfully Operating A Marijuana Dispensary in Las VegasRead the Press Release
LAS VEGAS, Nev. – Federal charges were unsealed today against six individuals, including three Californians, for unlawfully operating a marijuana dispensary in Las Vegas and unlawfully distributing marijuana, announced Daniel G. Bogden, United States Attorney for the District of Nevada.
Randy Ruley Phillips, 42, of Las Vegas, Nev.; Jaclyn Mikie Sumarnkant, aka “Turtle,” 27, of Alhambra, Calif.; Quy Nguyen, aka “Gabe”, 28, of San Diego, Calif.; Randy Allen Kim, aka “Kevin,” 24, of Las Vegas, Nev.; Andrew Yim, 24, of Las Vegas, Nev.; and Michael Minh Quang Dinh, 37, of Garden Grove, Calif., are charged in an indictment dated April 23, 1013. The indictment was unsealed today at the initial court hearing for defendants Randy Phillips and Michael Dinh. Defendants Phillips, Nguyen, Kim, Yim, and Dinh have already made initial appearances in court and were released on personal recognizance bonds pending trial.
Each defendant is charged with conspiracy to distribute marijuana, conspiracy to distribute THC distribution of marijuana, conspiracy to possess with marijuana with the intent to distribute, possession of marijuana with the intent to distribute, conspiracy to possess THC with the intent to distribute, possession of THC with the intent to distribute, conspiracy to maintain drug-involved premises, and maintaining drug-involved premises. Defendants Sumarnkant, Nguyen, Kim, and Yim face additional distribution of marijuana charges.
According to the indictment, beginning on about July 27, 2011, and continuing to Sept. 25, 2012, the defendants maintained the Alternative Solutions Marijuana Dispensary located at 6985 W. Sahara Avenue, Suite 110, in Las Vegas, Nev. for the purpose of distributing marijuana and THC. Marijuana dispensaries are not recognized under Nevada law, and it is illegal to sell marijuana in Nevada.
If convicted, they face up to twenty years in prison and fines of up to $1,000,000.
The investigation is being conducted as part of the Organized Crime Drug Enforcement Task Force (OCDETF) and the Nevada High Intensity Drug Trafficking Area (HIDTA) program. The case is being prosecuted by Assistant U.S. Attorney Amber M. Craig.The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendants are presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Selby Man Sentenced for Fraudulently Accepting Payments from the Veterans' AdministrationRead the Press Release
United States Attorney Brendan V. Johnson announced that a Selby man convicted of Fraudulent Acceptance of Payments was sentenced on April 30, 2013, by U.S. Magistrate Veronica L. Duffy. Michael Kuehl, age 56, was sentenced to 2 years’ probation and ordered to pay $25 to the Federal Crime Victims Fund and $3,635.20 in restitution.
Between December 2011 and August 2012, Kuehl knowingly submitted applications for travel expenses he did not incur, resulting in payments to him for which he was not entitled. He pleaded guilty on May 1, 2013.
This case was investigated by the Department of Veterans’ Affairs, Office of Inspector General. Assistant U.S. Sarah B. Collins prosecuted the case.
San Francisco Man Charged with Failing to File Tax ReturnsRead the Press Release
SAN JOSE, Calif. – James P. Kleier was charged yesterday with three counts of failure to file a tax return, United States Attorney Melinda Haag and Internal Revenue Service, Criminal Investigation, Special Agent in Charge José M. Martinez announced.
According to the information, during 2008, 2009, and 2010, Kleier received gross income that included self-employment income in the amounts of $624,923, $476,088, and $200,734, respectively. He was required by law to file a federal income tax return with the IRS in 2008, 2009 and 2010, and willfully failed to do so.
Kleier, of San Francisco, is scheduled to make his initial appearance on June, 3, 2013, before Magistrate Judge Laurel Beeler.
The maximum statutory penalty for each count of failure to file a tax return, in violation of 26 U.S.C. § 7203 is one year imprisonment and a fine of $100,000. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant U.S. Attorney Thomas Newman and Special Assistant U.S. Attorney Charles Parker are prosecuting this case. The prosecution is the result of an investigation by the Internal Revenue Service, Criminal Investigation.
Please note, an information contains only allegations against an individual and, as with all defendants, Kleier must be presumed innocent unless and until proven guilty.
(Kleier Information )
Rockford Man Pleads Guilty to Illegally Possessing A FirearmRead the Press Release
ROCKFORD — A Rockford, Ill. man pleaded guilty today in federal court before U.S. District Judge Frederick J. Kapala to illegally possessing a firearm as a convicted felon. ROBERT J. GRAY, 34, admitted that on May 8, 2012, having previously been convicted of a felony, he possessed an SKS Norinco semi-automatic rifle with an obliterated serial number and sixteen rounds of ammunition at his home. In addition, Gray had approximately $372,993 in U.S. currency, six cell phones, a digital scale, a pocket scale, a heat sealer and bags, plastic grocery bags filled with rubber bands, and diamond jewelry at his home.
Gray is scheduled to be sentenced on Aug. 9, 2013, at 10:30 a.m. Gray faces a sentence of up to 10 years in prison, a fine of up to $250,000, and a term of supervised release of up to 3 years following his release from prison. The actual sentence will be determined by the United States District Court, guided by the advisory United States Sentencing Guidelines.
The defendant was originally charged in state court, and is now charged in federal court under tough federal firearms laws as part of the Project Safe Neighborhoods program. Project Safe Neighborhoods is an intensive, cooperative effort between local, state, and federal law enforcement to attack gun crimes. The cornerstone of the program is that every defendant committing an offense involving a gun will be reviewed for possible federal prosecution in order to obtain the harshest penalties for the worst offenders. Additional information about Project Safe Neighborhoods may be found at: psn.gov.
The guilty plea was announced by Gary S. Shapiro, United States Attorney for the Northern District of Illinois; W. Larry Ford, Special Agent-in-Charge of the Chicago Field Division of the Bureau of Alcohol, Tobacco, Firearms & Explosives; Cory B. Nelson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; Joseph Bruscato, Winnebago County State’s Attorney; and Richard Meyers, Winnebago County Sheriff.
The government is represented by Assistant U.S. Attorney Scott R. Paccagnini.
Plea Agreement
Queens Doctor Indicted for Illegal Distribution of OxycodoneRead the Press Release
Earlier today, an indictment was unsealed charging Queens doctor Gracia L. Mayard with illegal distribution of oxycodone, a highly-addictive prescription medicine used to treat severe pain.1 Mayard is scheduled to be arraigned at 3:00 p.m. today before United States District Judge Joseph F. Bianco, at the United States Courthouse in Central Islip, New York.
The indictment was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, Brian R. Crowell, Special Agent-in-Charge, Drug Enforcement Administration, New York, Thomas V. Dale, Commissioner, Nassau County Police Department, and Joseph A. D'Amico, Superintendent, New York State Police.
On March 20, 2013, as part of a federal and state prescription drug abuse initiative within the Eastern District of New York, Mayard was arrested by members of a DEA Tactical Diversion Squad, comprising DEA agents, Nassau County Police Department detectives, and New York State Police investigators, on charges of illegally distributing oxycodone between January 1, 2012 and March 15, 2013. Mayard has been in custody since his arrest.
According to court filings and records of the New York State Bureau of Narcotics Enforcement, during the first nine months of 2012, Mayard issued 2,953 oxycodone prescriptions for approximately 376,469 pills to numerous individuals without performing any meaningful medical examination and in exchange for cash. In some cases, Mayard allegedly issued the prescriptions without even meeting the purported patients. On February 6, 2013, members of the DEA Tactical Diversion Squad contacted Mayard concerning his prescription activity, at which time Mayard voluntarily surrendered his DEA registration that authorized him to prescribe controlled substances. However, as alleged in court filings, on February 28, 2013, Mayard nevertheless issued a prescription for oxycodone. On March 13, 2013, a pharmacist, in the presence of DEA agents, called Mayard about the prescription. During the call, Mayard confirmed that he had issued the prescription and provided his surrendered DEA registration number, all in an effort to persuade the pharmacist to fill the oxycodone prescription.
“Overdose deaths from prescription painkillers are now more frequent than those from heroin and cocaine combined – this is an epidemic,” stated United States Attorney Lynch. “The defendant looked at this epidemic and saw opportunity – not to save lives and heal suffering, but for personal profit. Rather than follow his oath to ‘do no harm,’ Mayard prescribed hundreds of thousands of highly addictive pills with complete disregard for where they would end up or who would take them.” Ms. Lynch expressed her grateful appreciation to the Drug Enforcement Administration, the Nassau County Police Department, and the New York State Police for their assistance in this investigation.
If convicted, the defendant faces a maximum sentence of 20 years’ imprisonment and a $1 million fine.
In January 2012, the United States Attorney’s Office for the Eastern District of New York and the DEA, in conjunction with the five District Attorneys in this jurisdiction, the Nassau and Suffolk County Police Departments, the New York City Police Department, and New York State Police, along with other key federal, state and local government partners, launched the Prescription Drug Initiative to mount a comprehensive response to what the U.S. Department of Health and Human Services’ Centers for Disease Control and Prevention has called an epidemic increase in the abuse of so-called opioid analgesics. So far, the Prescription Drug Initiative has brought over 120 federal and local criminal prosecutions, taken civil enforcement action against a pharmacy, removed prescription authority from numerous rogue doctors, and expanded information-sharing among enforcement agencies to better target and pursue drug traffickers. The Initiative also is involved in an extensive community outreach program to address the abuse of pharmaceuticals.
The government’s case is being prosecuted by Assistant United States Attorney Allen L. Bode.
The Defendant:
Name: GRACIA L. MAYARD
Age: 61_____________________________
1 The charges are merely allegations, and the defendant is presumed innocent unless and until proven guilty.
Principals of Bay Area Internet Services Company Sentenced for Mail Fraud and Money LaunderingRead the Press Release
SAN FRANCISCO– Roy Lin and John Lin were sentenced yesterday to 30 months and 20 months in prison, respectively, for their roles in operating a fraudulent billing scheme to place charges on customers’ telephone bills, United States Attorney Melinda Haag announced.
Roy Lin pleaded guilty on December 11, 2012, to one count of mail fraud and one count of money laundering. His brother, John Lin, pleaded guilty on December 11, 2012, to one count of mail fraud. According to the plea agreements, the Lins admitted to running INC21.com Corporation (INC21), including its affiliates GlobalYP, JumPage Solutions, and GoFaxer. INC21, based in San Francisco, provided Internet-based services and charged consumers for the services on the consumers’ local telephone bills, among other methods.
The Lin brothers fraudulently obtained access to bill for services on the consumers’ telephone bills by making false representations on applications. These applications were submitted to telephone companies in order to be approved to bill consumers in this manner. At sentencing, the Court found that through this scheme, INC21 and its affiliates collected revenues of between $2,500,000 and $7,000,000 from more than 250 victims.
Roy Lin, 43, and John Lin, 41, both of San Francisco, were indicted on March 27, 2012. Roy Lin and John Lin were each charged with conspiracy to commit mail fraud, six counts of mail fraud, and three counts of money laundering.
The sentence was handed down by U.S. District Court Judge William H. Alsup. Roy Lin was sentenced to 30 months in prison for one count of wire fraud and one count of money laundering, in violation of 18 U.S.C. § 1341 and 18 U.S.C. § 1957, respectively. John Lin was sentenced to 20 months in prison for wire fraud, in violation of 18 U.S.C. § 1341. Judge Alsup sentenced both defendants to a 3 year period of supervised release to follow their prison terms. Each defendant will begin serving his sentence on September 3, 2013.
Kyle Waldinger and Hallie Hoffman are the Assistant U.S. Attorneys who are prosecuting the case with the assistance of Rayneisha Booth and Elizabeth Garcia. The prosecution is the result of an investigation by the United States Postal Inspection Service and the Internal Revenue Service, Criminal Investigation.
Pittsburgh Man Sentenced to Six Years in Prison for ID Theft SchemeRead the Press Release
PITTSBURGH - A resident of Pittsburgh's North Side has been sentenced in federal court to 75 months incarceration on his conviction of conspiracy and aggravated identity theft, United States Attorney David J. Hickton announced today.
United States District Judge Arthur J. Schwab imposed the sentence on Joseph Dees, a/k/a Joseph Lee, a/k/a Jay Dees, 52.
According to the information presented to the court, Dees conspired with other persons to obtain stolen identities to obtain unauthorized American Express and Discover credit card account information which he and others used to purchase merchandise in stores in Pennsylvania and West Virginia.
Assistant United States Attorney Gregory C. Melucci prosecuted this case on behalf of the government.
Inspectors from the United States Postal Inspection Service along with agents from the United States Secret Service who, as part of the Western Pennsylvania Financial Crimes Task Force (WPFCTF), conducted the investigation that led to the successful prosecution of Joseph Dees. The WPFCTF was established as a collaborative, multi-agency effort to effectively combat financial crimes, including identity fraud, in Western Pennsylvania. Partnering in this effort are the United States Attorney's Office for the Western District of Pennsylvania, the United States Secret Service, the United States Postal Inspection Service, the Department of Homeland Security, the Allegheny County District Attorney's Office, the Allegheny County Police Department, the City of Pittsburgh Bureau of Police and the Pennsylvania State Police.
Peabody Tax Preparer Charged with FraudRead the Press Release
BOSTON – A Peabody tax preparer was charged today with fraud and other related charges.
Barry N. Ginsberg, 61, was charged with wire fraud, five counts of mail fraud, 11 counts of aiding a false tax return, and obstructing the Internal Revenue Service. The indictment alleges that Ginsberg owned and operated a payroll tax business that had a number of so-called “escrow” clients. The escrow clients not only had their payroll tax returns prepared by Ginsberg’s payroll tax business, but also sent money to Ginsberg’s business on a weekly basis, to be held in escrow, for the purpose of paying their payroll taxes to the IRS. It is alleged that instead of paying these monies to the Internal Revenue Service, Ginsberg used the money for other business or personal reasons. Furthermore, Ginsberg also caused false quarterly employment tax returns to be filed with the IRS and provided to his clients the false returns stating that the clients’ payroll taxes had been paid in full, when they had not.
The fraud charges carry a statutory maximum penalty of 20 years in prison, followed by three years of supervised release and a fine of $250,000 or twice the gross gain or loss from the crime, whichever is greater. The tax charges carry a statutory maximum penalty of three years in prison, followed by one year of supervised release and a fine of $250,000 or twice the gross gain or loss from the crime, whichever is greater.
United States Attorney Carmen M. Ortiz and William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Jeremy Sternberg of Ortiz’s Economic Crimes Unit.
The details contained in the Indictment are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Ozark Attorney Pleads Guilty to Failing to Pay TaxesRead the Press Release
SPRINGFIELD, Mo. - Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that an Ozark, Mo., attorney pleaded guilty in federal court today to willfully failing to pay both the payroll taxes he deducted from his employees’ paychecks and his personal income taxes.
Michael C. Stoffregen, 51, of Ozark, pleaded guilty before U.S. Magistrate Judge David P. Rush to one count of willfully failing to pay over his employees’ payroll taxes to the government and one count of willfully failing to file tax returns.
Stoffregen was the sole owner of The Disability and Elder Law Center (formerly the Law Offices of MC Stoffregen), located in Springfield, Mo. Stoffregen admitted that he deducted and withheld taxes from his employees’ paychecks (including federal income taxes and Social Security and Medicare taxes), but did not pay that money over to the IRS. Stoffregen failed to pay over $12,251 in employment taxes for the years 2009-2011.
Stoffregen also admitted that he willfully failed to file federal individual income tax returns for the years 2008-2011. Since the law office is an S-corporation, all profits (or net losses) are passed on to Stoffregen as the sole shareholder. According to the plea agreement, the law office had total gross profits during this time of $802,720.
Under federal statutes, Stoffregen is subject to a sentence of up to six years in federal prison without parole, plus a fine up to $35,000 and an order of restitution. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Patrick Carney. It was investigated by IRS-Criminal Investigation.
Owner of Gemstar Capital Group Private Equity Company Sentenced to 120 Months in Federal Prison for Role in $40 Million Ponzi SchemeRead the Press Release
Defendant Jeffrey J. Sykes Also Ordered to Pay Nearly $17 Million in Restitution
FORT WORTH, Texas — Jeffrey J. Sykes, 54, of San Bernadino County, California, was sentenced this morning by U.S. District Judge John McBryde to 120 months in federal prison and ordered to pay $16,867,037 in restitution, following his guilty plea in January to two counts of securities fraud stemming from a Ponzi scheme he ran. Sykes, who was the owner of Gemstar Capital Group, Inc. (Gemstar), a California-based private equity company, was ordered to surrender to the Bureau of Prisons by May 24, 2013. Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
According to documents filed in the case, Sykes owned and operated Gemstar out of Redlands, California. In 2006, Sykes and “M.K.,” of Westlake, Texas, met at a golf tournament. Sykes told M.K. that Gemstar was a venture capital company interested in investing in emerging growth companies and that Gemstar was looking to supplement its planned venture capital operations by engaging a brokerage firm to assist it in buying and selling U.S. Treasury Bills (T-Bills).
M.K. asked Sykes whether he could participate, and in April 2007, Sykes and M.K. entered into an agreement in which M.K. solicited investors to participate in the T-Bill trading program described by Sykes. The next month, M.K. formed a limited liability company, known as KCG, and began to solicit investors. Using information Sykes provided, M.K. secured approximately 37 investors who invested more than $20 million. M.K. sent the money, minus fees he withheld for himself, to Gemstar to be invested by Sykes. However, unbeknownst to the investors, neither KCG nor Gemstar was engaged in any T-Bill trading program at the time of M.K.’s solicitations.
In addition to the funds that M.K. raised, Sykes personally raised more than $20 million from investors by making representations about a T-Bill trading program that were materially false or omitted material facts. In fact, none of the money was invested in a T-Bill trading program. Instead, Sykes and M.K. used some of the money for personal expenses. Some of the money was invested in ventures that the investors were unaware of and had not given their consent to participate in. Some of the money was returned to investors, although in some cases, Sykes falsely claimed that the funds represented the return of capital and/or profits from the T-Bill trading program.
Although Sykes used some of the investments he received for personal expenses, to pay partners, and for other purposes, he held a large portion of the invested funds in low-risk money market accounts. Because a substantial portion of investor funds were held in these accounts, investors were able to recover some of their investments.
Accounting for payments made to investors during the course of the scheme and money returned to investors after the termination of the scheme, investors collectively lost approximately $16,867,037. This amount includes losses incurred by the investors solicited by M.K., whose funds he subsequently sent to Sykes after taking a fee for himself.
The two counts of securities fraud to which Sykes is pleading specifically stem from false Gemstar account statements that Sykes used to deceive investors about the value of their investments.
This prosecution is 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. Attorney’s 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 http://www.stopfraud.gov/.
The case was investigated by the U.S. Postal Inspection Service and the FBI.
Oakdale Man Sentenced in Connection to $7 Million Mortgage Fraud ScamRead the Press Release
MINNEAPOLIS—Yesterday in federal court, a 33-year-old Oakdale man was sentenced for his role in a mortgage fraud scheme that caused losses to lenders exceeding $7 million. On May 2, 2013, United States District Court Judge David S. Doty sentenced Bryan Joseph Lenton to three years of probation on one count of conspiracy to commit mortgage fraud through interstate wire. Lenton was indicted, along with two others, on December 7, 2010, and pleaded guilty on March 8, 2011. He cooperated with authorities in the prosecution of his co-defendant, John Anthony Spencer, and in the investigation and cooperation of James Hoffman, another mortgage fraud defendant currently serving a 78-month sentence.
In his plea agreement, Lenton, a real estate appraiser, admitted he provided appraisals for properties that falsely inflated market values in order to create a pool of funds to be split among him, his co-defendants, and straw buyers.
The scam, orchestrated by Spencer, involved brokering fraudulent loans that were used by recruited purchasers to buy residential real estate at inflated prices. The transactions generated proceeds that greatly exceeded what the sellers were content to accept as full payment for their properties. The excess money was split up among the buyers Spencer recruited as well as Spencer himself and accomplices he solicited in an effort to bring the transactions to fruition.
The properties included six single-family homes in north Minneapolis, five residential condominium units located on Fisk Avenue in St. Paul, four condo units located on Dayton
Avenue in St. Paul, a home in Albertville, Minnesota, and two investment properties located in north Minneapolis.
Spencer, a mortgage broker at Minnesota One Mortgage, agreed to assist the owner of a five-plex condominium unit on Fisk Street in St. Paul to sell those units. To that end, Spencer recruited Lenton to appraise each of the units at substantially more than the owner of the units was willing to accept as full payment for them. Spencer then recruited straw buyers to purchase the units with loan proceeds obtained via fraudulent loan applications prepared by Spencer and
Patrick Arthur Dols, another mortgage broker.
On October 31, 2011, Spencer, age 33, of Albertville, was sentenced to 125 months in prison on one count of conspiracy, ten counts of wire fraud, one count of bank fraud, and one count of money laundering. He was convicted on June 2, 2011, after a three-week jury trial.
On November 29, 2012, Dols, age 40, of Minneapolis, was sentenced to one year and one day in prison on one count of conspiracy. He pleaded guilty on March 1, 2011. In his plea agreement, Dols admitted that his role in the conspiracy was to take fraudulently drafted loan applications in the names of various straw buyers and find lenders willing to make mortgage loans based on the false information he was providing.
This case was the result of an investigation by the Internal Revenue Service-Criminal
Investigation. It was prosecuted by Assistant U.S. Attorney David J. MacLaughlin.
The U.S. Attorney’s Office wants to remind people to protect themselves from mortgage fraud. For more information, visit http://www.stopfraud.gov/protect-mortgage.html.New York State Assemblyman William F. Boyland Charged with Mail Fraud Conspiracy for Defrauding New York StateRead the Press Release
A second superseding indictment against New York State Assemblyman William F. Boyland, Jr. was filed today in the United States District Court for the Eastern District of New York. Boyland has served in the New York State Assembly representing the 55th District in Brooklyn since 2003. As alleged in the latest indictment, from July 2007 to September 2010, Boyland engaged in a scheme to defraud New York State by steering public funds to a Brooklyn-based non-profit organization (“Non-Profit A”) and then directing that a portion of those public funds be used to pay for community events promoting Boyland and on goods such as t-shirts imprinted with the slogan “Team Boyland” which were distributed at those events. 1
To conceal this scheme, Boyland allegedly directed members of his staff to instruct vendors involved in the community events to falsely list Non-Profit A, and not Boyland, as the purchaser on invoices for goods purchased for the events. A representative of Non-Profit A then submitted the fraudulent invoices to the New York State Office for the Aging (“NYSOFA”), which administered the public funds, without disclosing that these invoices were for events and goods promoting Boyland. In furtherance of the scheme, a representative of Non-Profit A also submitted Certification Forms to the NYSOFA that falsely stated, among other things, that the public funds would not be used for “partisan political activity,” and that Boyland had not and would not receive, either directly or indirectly, any financial benefit from Non-Profit A relating to the public funds.
The filing of the second superseding indictment was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office. Ms. Lynch expressed her grateful appreciation to the New York State Comptroller’s Office for its assistance in this phase of the investigation.
If convicted on the new mail fraud conspiracy, Boyland faces a maximum sentence of 20 years in prison, a $250,000 fine, and restitution.
The government’s case is being prosecuted by Assistant United States Attorneys Robert Capers and Lan Nguyen.
The Defendant:
WILLIAM F. BOYLAND, JR.
Age: 42_____________________________
1 The charges contained in the indictments are merely allegations, and the defendant is presumed innocent unless and until proven guilty.
New Bedford Drug Dealers Arraigned on Drug Trafficking IndictmentRead the Press Release
BOSTON – Three men, one from Bourne and two from New Bedford, were arraigned late yesterday on an indictment charging them with heroin distribution and related crimes.
Francisco Monteiro, 32, of Bourne, is charged with conspiracy to distribute over a kilogram of heroin and distribution of heroin; Manuel Lopes, 34, of New Bedford, is charged with conspiracy to distribute over a kilogram of heroin, distribution of heroin, and possession with intent to distribute heroin; and Harry Parsons, 25, of New Bedford, is charged in the indictment with conspiracy to distribute over a kilogram of heroin and distribution of heroin.
According to an affidavit previously filed in court, the government advised that Monteiro, a/k/a Cisco, Lopes, and a third man, now identified as Parsons, conspired to distribute over 100 grams of heroin. On February 15, 2013, Monteiro and Lopes arranged and facilitated the sale of almost 100 grams of heroin to a cooperating witness in New Bedford. The DEA recorded telephone calls to Monteiro in which he agreed to provide heroin to a cooperating witness. Monteiro and Lopes drove with the cooperating witness to Parsons’ address in New Bedford where the heroin sale was completed. Furthermore, Monteiro and Lopes further planned and arranged for the sale of an additional 50 grams of heroin to the cooperating witness that was to take place on February 25, 2013, although the sale was not completed.
During an earlier hearing, the government advised that when Lopes was arrested on March 1, 2013, agents seized approximately 7,500 packages of heroin from Lopes’ home, as well as several large packages of marijuana, brass knuckles, and a bullet-proof vest. When Monteiro was arrested at his home on March 1, 2013, agents recovered the recorded buy money from the February 25, 2013 attempted purchase of heroin, as well as a small quantity of heroin (consistent with the packaging found at Lopes’ residence).
Monteiro has prior convictions for drug distribution and unlawful possession of a firearm. Monteiro faces a mandatory minimum sentence of 20 years in prison, a maximum penalty of life in prison, a fine of $20 million, and a minimum of 10 years supervised release.
In 2003, Lopes was convicted in U.S. District Court in Boston for gun and drug trafficking and received a sentence of 130 months. Lopes is still on supervised release for those offenses. Lopes faces a maximum sentence of life in prison, a fine of $20 million, and a minimum of 10 years supervised release.
If convicted, Parsons faces a mandatory minimum sentence of 20 years in prison, a maximum penalty of life in prison, a fine of up to $20 million, and a minimum of 10 years supervised release.
United States Attorney Carmen M. Ortiz; John J. Arvanitis, Special Agent in Charge of the Drug Enforcement Administration, Boston Field Division; Colonel Timothy P. Alben, Superintendent of the Massachusetts State Police; C. Samuel Sutter; Bristol County District Attorney; Sherriff Thomas M. Hodgson of Bristol County; Bourne Police Chief Dennis R. Woodside; and Wareham Police Chief Richard M. Stanley made the announcement today.
This case is being prosecuted by Christopher Pohl in Ortiz’s Organized Crime Strike Force Unit.
Mount Holly Springs Man Pleads Guilty to Distributing Drug That Resulted in DeathRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced that a Mount Holly Springs man pled guilty in United States District Court in Harrisburg Thursday to distributing heroin that resulted in the death of a Carlisle area man.
According to United States Attorney Peter J. Smith, Derk Roberts, age 29, of Mount Holly Springs, pled guilty before Senior U.S. District Court Judge William W. Caldwell in Harrisburg to a charge of unlawfully distributing heroin in the Cumberland County area during the period of time beginning in January of 2010 until February 9, 2011. The heroin distributed by Roberts caused the death of Joshua Michael Hamman, age 27, of Carlisle.
The evidence presented in court established that on February 4, 2011 at approximately 3:25 p.m. a worker at the PPG glass manufacturing facility in South Middleton Township, Cumberland County, found Hamman unconscious on the floor of a bathroom stall in the locker room/bathroom of the plant. Hamman had injected heroin and passed out. Facility staff administered CPR to Hamman until EMS personnel arrived and transported him to the Carlisle Regional Medical Center. Hamman was admitted to the ICU where on February 8, 2011 Hamman was taken off of life support and subsequently died at 8:15 pm that day.
The Pennsylvania State Police and the Federal Bureau of Investigation conducted an investigation that established that Hamman had been in touch with Roberts the morning of February 4, 2011 via cell phone text messages. Hamman was asking the defendant if he could get heroin from Roberts later in the day. During the next few hours Hamman and Roberts exchanged text messages in which it was discussed that Roberts would be getting heroin in Maryland and would deliver it to Hamman at the PPG facility. At around 2:42 in the afternoon that day Roberts met Hamman in the PPG parking lot and provided him with several packets of heroin and then left. Hamman went back into work and into the bathroom stall where he injected the heroin and passed out. The autopsy determined that Hamman died as a result of opiate toxicity.
Roberts was later interviewed by agents with the FBI and state police and admitted that he in fact sold Hamman the heroin on February 4, 2011. Roberts admitted that he had been selling heroin for about a year before he sold the heroin that led to Hamman’s death.
Roberts entered into a plea agreement with the United States which, if accepted by the court, requires the court to impose a sentence of no less than 6 years nor more than 8 years imprisonment. Roberts also faces a fine of up to $1 million dollars and a supervised release term of no less than three years. A sentencing date has not been scheduled.
The matter was investigated by the Federal Bureau of Investigation, Pennsylvania States Police and the Cumberland County Drug Task Force.
The case was prosecuted by Assistant United States Attorney William A. Behe who is assigned to the Organized Crime Drug Enforcement Task Force.
Midland Man Arrested on Firearms ChargesRead the Press Release
Midland resident and land surveyor, Steven Leonard Prewit, was arrested Thursday, May 2, 2013, on a sealed criminal complaint charging Prewit with possession of unregistered firearms, announced United States Attorney Robert Pitman, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Dallas Field Office Special Agent in Charge Robert Champion and Federal Bureau of Investigation (FBI) Special Agent in Charge Mark Morgan.
Today, Prewit appeared before United States Magistrate Judge David Counts, in Midland, Texas, for his initial appearance, at which time, the complaint against Prewit was unsealed. The complaint alleges that Prewit was in possession of fully automatic firearms, improvised explosive devices and silencers which did not have the serial numbers or manufacturing markings required by law. Federal law requires that firearms, silencers and destructive devices be identified by a serial number. Federal law also requires that these items be registered with the ATF National Firearms Branch, which records the identity of the registered owner in the National Firearms Registration and Transfer Record. The complaint alleges that the fully automatic firearms, unmarked silencers and improvised explosive devices were not registered to Prewit in the National Firearms Registration and Transfer Record, as required by law. Prewit faces a sentence of up to ten years imprisonment on this charge.
He is scheduled to appear before the Honorable Judge Counts on Wednesday, May 8, 2013, for a preliminary and detention hearing. Prewit is being held without bond pending that hearing.
Assistant United States Attorneys LaTawn Warsaw and John Klassen are prosecuting this case on behalf of the Government.
A criminal complaint is merely a charge and should not be considered as evidence of guilt. The defendant is presumed innocent until proven guilty in a court of law.