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Wednesday 20 March 2013
Hickory, N.C. Man Charged with Methamphetamine Trafficking Near an Elementary School and Gun Related OffensesRead the Press Release
CHARLOTTE, N.C. – A Hickory, N.C. man has been charged with methamphetamine trafficking near an elementary school and gun related offenses announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina.
U.S. Attorney Tompkins is joined in making today’s announcement by Brock D. Nicholson, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) in Georgia and the Carolinas; Greg McLeod, Director of the North Carolina State Bureau of Investigation; and Sheriff Coy Reid, of the Catawba County Sheriff’s Office.
A federal grand jury sitting in Charlotte returned a seven-count criminal indictment against Gary Carroll, 57, of Hickory, on Tuesday, March 19, 2013. According to allegations contained in the indictment, beginning in 2010 and through March 2013, Carroll did knowingly conspire to distribute and to possess with intent to distribute methamphetamine. According to the indictment and filed court documents, Carroll was involved in a drug trafficking conspiracy that involved more than 500 grams of methamphetamine. According to a filed criminal complaint, upon execution of a search warrant at Carroll’s residence in January 2013, law enforcement recovered 67 grams of methamphetamine, other drug paraphernalia, cash, four firearms – including an assault rifle – and a large quantity of ammunition and ammunition magazines. The indictment, criminal complaint, and court proceedings allege that Carroll’s trafficking activities took place from, among other places, his home, which is within 1,000 feet of a public elementary school.
Carroll is charged with one count of conspiracy to distribute and to possess with intent to distribute at least 500 grams of methamphetamine, which carries a mandatory minimum of 10 years and a maximum of life in prison and a $10 million fine; one count of possession with intent to distribute methamphetamine which carries a maximum of 20 years in prison and a $1 million fine; one count of possession with intent to distribute methamphetamine within 1,000 feet of a public elementary school which carries a maximum of 40 years in prison and a $2 million fine; one count of possession with intent to distribute at least 50 grams of methamphetamine which carries a minimum of five years and a maximum of 40 years in prison and a $5 million fine; one count of possession with intent to distribute at least 50 grams of methamphetamine within 1,000 feet of a public elementary school which carries a minimum of five years and a maximum of 80 years in prison and a $10 million fine; one count of possession of firearms in furtherance of drug trafficking which carries a minimum of five years and a maximum of 80 years in prison and a $10 million fine; and, possession of firearms after conviction for domestic violence offense which carries a minimum of 10 years and a maximum of life in prison and a $250,000 fine.
Carroll was arrested in February 2013 and has been released on bond. The charges contained in the indictment are allegations. The defendant is presumed innocent unless and until proven guilty beyond reasonable doubt in a court of law.
The investigation was handled by ICE-HSI, SBI, and CCSO. The case was prosecuted by Assistant U.S. Attorney Steven R. Kaufman of the U.S. Attorney’s Office in Charlotte.
Grand Jury for the District of NebraskaRead the Press Release
United States Attorney Deborah R. Gilg announced the federal Grand Jury for the District of Nebraska has returned 15 indictments charging 16 defendants. Indictments are charging documents that contain one or more individual counts that are merely accusations, and every defendant is presumed innocent unless and until proven guilty.
* Kelsey Allen, age 38, of Orchard, Nebraska, is charged in a two count indictment. Count I alleges that on or about August 22, 2012, the defendant distributed a mixture or substance containing a detectable amount of methamphetamine. The maximum possible penalty includes imprisonment of up to 20 years, a $1 million fine, a 5 year term of supervised release and a $100 special assessment. Count II alleges that on or about January 23, 2013, the defendant possessed with intent to distribute a mixture or substance containing a detectable amount of methamphetamine. The maximum possible penalty includes imprisonment of up to 20 years, a $1 million fine, a 5 year term of supervised release and a $100 special assessment.* Juan Avalos, age 24, and Jose Avalos, age 27, both of Omaha, are charged in a three count indictment. Count I alleges that on or about February 1, 2013, the defendants possessed with intent to distribute 50 grams or more of actual methamphetamine. The maximum possible penalty includes imprisonment of not less than 10 years and up to life, a $10 million fine, a 5 year term of supervised release and a $100 special assessment. Count II alleges that on or about February 1, 2013, Juan Avalos was in possession of a firearm, to wit: a Davis Industries .380 caliber firearm after having been convicted of a felony. The maximum possible penalty includes imprisonment of 10 years, a $250,000 fine, a 3 year term of supervised release and a $100 special assessment. Count III alleges that on or about February 1, 2013, Jose Avalos was in possession of a firearm, to wit, an SCCY model CPX-1 9 mm handgun, knowing or having reasonable cause to believe that the firearm was stolen. The maximum possible penalty includes imprisonment of 10 years, a $250,000 fine, a 3 year term of supervised release and a $100 special assessment.
* Johnnie B. Davis, Jr., age 33, of Omaha, is charged with being a felon in possession of a firearm, to wit: a Mossberg 500A shotgun, on or about January 1, 2013. The maximum possible penalty includes imprisonment of 10 years, a $250,000 fine, a 3 year term of supervised release and a $100 special assessment.
* Jose Gonsalez-Lopez, age 37, is charged in a three count indictment. Count I alleges that beginning on or about November 26, 2012, and continuing to on or about March 7, 2013, the defendant conspired with others to distribute and possess with intent to distribute 50 grams or more of actual methamphetamine. The maximum possible penalty includes imprisonment of not less than 10 years and up to life years, a $10 million fine, a 5 year term of supervised release and a $100 special assessment. Counts II and III allege that on or about November 29, and on or about December 4, 2012, the defendant distributed 5 grams or more of actual methamphetamine. The maximum possible penalty for each count includes imprisonment of not less than 5 years and up to 40 years, a $5 million fine, a 5 year term of supervised release and a $100 special assessment.
* Carlos Juan-Castaneda, age 35, of Omaha, is charged with illegal reentry into the United States on or about February 27, 2013, after deportation or removal. The maximum possible penalty if convicted includes imprisonment of 2 years, a $250,000 fine, 1 year of supervised release, and a $100 special assessment.
* John L. Main, age 61, of Omaha, is charged in a two-count indictment. Count I alleges that on or about August 6, 2008, Main filed a false Income Tax Return for calendar year 2006 by reporting gross receipts or sales during 2006 for his business, Main Concrete and Construction, to be $765,249 when in fact the sales were determined to be approximately $1,266,706. The maximum possible penalty includes imprisonment of 3 years, a $100,000 fine, 1 year of supervised release, and a $100 special assessment. Count II of the indictment alleges that on or about August 6, 2008, Main filed a false Income Tax Return for calendar year 2007 by reporting gross receipts or sales during 2007 for his business, Main Concrete and Construction, to be $534,892 when in fact the sales were determined to be approximately $925,045. The maximum possible penalty includes imprisonment of 3 years, a $100,000 fine, 1 year of supervised release, and a $100 special assessment.
* Miguel Martell-Rios, age 35, of Omaha, is charged with illegal reentry into the United States on or about March 6, 2013, after deportation or removal. The maximum possible penalty if convicted includes imprisonment of 2 years, a $250,000 fine, 1 year of supervised release, and a $100 special assessment.
* Thomas L. Payton, age 28, of Omaha, a drug user, is charged with being in possession of a firearm, to wit: a Russian Armory, Model SKS, 7.62mm Rifle, on or about January 15, 2013. The maximum possible penalty includes imprisonment of 10 years, a $250,000 fine, a 3 year term of supervised release and a $100 special assessment.
* Jose Picon-Hernandez, age 41, of Omaha, is charged with illegal reentry into the United States on or about February 17, 2013, after deportation or removal. The maximum possible penalty if convicted includes imprisonment of 2 years, a $250,000 fine, 1 year of supervised release, and a $100 special assessment.
* Daniel Ramirez-Rodriguez is charged in a three-count Indictment. Count I of the Indictment charges Ramirez-Rodriguez with misuse of a Social Security Number on or about September 4, 2012. The maximum penalty for this count includes imprisonment of 5 years, a fine of $250,000, followed by a term of supervised release of 3 years, and a special assessment of $100. Count II of the Indictment alleges on or about September 4, 2012, Ramirez-Rodriguez made a false statement and claimed to be a United States citizen with the intent to receive Federal and State benefits and to be employed in the United States. The maximum possible penalty for this count includes imprisonment of 5 years, a $250,000 fine, 3 years of supervised release, and a $100 special assessment. Count III charges that on or about September 4, 2012, Ramirez-Rodriguez misused a Social Security Card knowing that said document was not issued lawfully for his use. The maximum possible penalty for this count includes imprisonment of 5 years, a $250,000 fine, 3 years of supervised release, and a $100 special assessment.
* Larry Redwing, age 59, of Niobrara, Nebraska, is charged with possession of methamphetamine within the boundaries of the Santee Sioux Indian Reservation on or about February 11, 2012. The maximum possible penalty includes imprisonment of not more than 1 year, a $100,000 fine, a 1 year term of supervised release, and a $100 special assessment.
* Jesus Acosta Robles, age 48, of Omaha, is charged with bank robbery of the Wells Fargo Bank, 4650 South 24th Street, Omaha, Nebraska, on or about August 13, 2012. The maximum possible penalty, if convicted, includes 20 years imprisonment, a fine of $250,000, a 3 year term of supervised release, and a $100 special assessment.
* Leonel Torres-Garcia, age 40, of Emerson, Nebraska, is charged with illegal reentry into the United States on or about March 5, 2013, following deportation as an aggravated felon. The maximum possible penalty if convicted includes imprisonment of 20 years, a $250,000 fine, 3 years of supervised release, and a $100 special assessment.
* Skye Lynn Van Dyne, age 18, is charged with making a false statement to the Federal Bureau of Investigation on or about December 9, 2012. The maximum penalty for this count includes imprisonment of 5 years, a fine of $250,000, a 3 year term of supervised release, and a $100 special assessment.
* Luis Vasquez-Ramos, age 32, of Kearney, Nebraska, is charged with illegal reentry into the United States on or about February 13, 2013, after deportation or removal. The maximum possible penalty if convicted includes imprisonment of 2 years, a $250,000 fine, 1 year of supervised release, and a $100 special assessment.Forty-four Individuals Indicted in Health Care Fraud and Drug Distribution SchemeRead the Press Release
Seven Doctors, Four Pharmacists, Three Home Health Agency Owners Among Those Indicted
Forty-Four individuals have been charged in a health care fraud and drug distribution scheme, U.S. Attorney Barbara L. McQuade announced today.
McQuade was joined in the announcement by Special Agent in Charge Robert L. Corso of the Drug Enforcement Administration, Special Agent in Charge Robert D. Foley III, of the Federal Bureau of Investigation, Acting Special Agent in Charge Gilbert Salinas of the Bureau of Alcohol, Firearms, and Explosives, Lamont Pugh, Special Agent in Charge of the Inspector General of the Department of Health and Human Services, Acting Special Agent in Charge William Hayes of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, Special Agent in Charge Erick Martinez of the Internal Revenue Service, Criminal Investigation, Detroit Police Chief Chester Logan, and Portsmouth, Ohio, Police Chief Robert Ware, II.
The 13-count superseding indictment charges 44 new defendants with a drug conspiracy involving prescription drug controlled substances such as OxyContin, Opana, Vicodin and other drugs. Health care fraud charges were filed against 32 of the defendants, while three defendants were charged with money laundering and three defendants were charged with being felons in possession of firearms.
The superseding indictment alleges that Sardar Ashrafkhan, Deepak Kumar, John Check and David Vezzossi, owners of home health agencies, would provide kickbacks, bribes, and other illegal benefits to physicians to induce them to write prescriptions for patients with Medicare, Medicaid, and private insurance. Patients were recruited into the scheme by patient recruiters or “marketers,” who would pay kickbacks and bribes to patients in exchange for the patients’ permitting the pharmacies and physicians to bill their insurance for medications and services that were medically unnecessary and/or never provided. During this conspiracy, prescriptions were presented to the Sav-Max (pharmacist Ahab Elmadhoun), Sav-Mart (pharmacist Waleed Yaghmour), Atrium (pharmacist Krina Patel and manager Sanjay Patel), or Caremax (pharmacist Jayshriben Gandhi and manager Guarang Gandhi) Pharmacies for filling. The medical professionals and health care agency owners would then bill the relevant insurers for services supposedly provided to the patients, without regard to the medical necessity of those prescriptions and services. Some of the pharmacists would bill insurers, including Medicare, Medicaid, and private insurers, for dispensing the medications, despite the fact that the medications were medically unnecessary and, in many cases, never provided. Other times, the pharmacists accepted cash from the recruiters for filling and dispensing medications.
The indictment further alleges a conspiracy to distribute controlled substances by the health care owners, physicians, pharmacies, and recruiters to facilitate the submission of false claims to Medicare, Medicaid, and private insurers. The home health care owners paid physicians associated with the scheme kickbacks in exchange for prescriptions for controlled substances for their patients which were filled at the respective pharmacies. The controlled substances involved included the Schedule II drug oxycodone (Oxycontin), the Schedule III drug hydrocodone (Vicodin, Lortab) the Schedule IV drug alprazolam (Xanax), and the Schedule V drug cough syrup with codeine.
The indictment further alleges illegal money laundering by pharmacists Waleed Yaghmour and Ahab Elmadhoun, and also by home health agency owner Sardar Ashrafkhan, a.k.a. “Dr. Khan.” The indictment further alleges individual charges of felon in possession of a firearm against marketers Toney Taylor and Troy Ivory, and home health agency owner John Stephen Check.
The 44 new defendants named in the 13-count indictment were pharmacists Krina Patel, 35, of Shelby Twp.; and office manager Sanjay Patel, 39, of Shelby Twp., Jayshriben Gandhi, 43, of Canton; and office manager Guarang Gandhi, 39, of Canton, pharmacist Ahab Elmadhoun, 40, of Canton; pharmacist Waleed Yaghmour, 46, of Dearborn; physicians Adelfo Pamatmat, 67, of Farmington Hills, physician John Geralt, 84, of Beverly Hills, physician Malik Dababneh, 53, of Oxford, physician Paul Kelly, 76, of Bath, physician Ravi Iyer, 42, of Novi, physician Muhammad Ahmed, 65, of Ypsilanti, physician assistant Timothy Spencer, 64, of Inkster, Wayne State Medical School graduate Javar Myatt-Jones, a.k.a. “Dr. Jones,” 33, of Chicago, foreign medical student Faraj Ghabag, 33, of Oregon, OH, home health agency owners Sardar Ashrafkhan, a.k.a. “Dr. Khan,” 55, of Warren, home health agency owner Deepak Kumar, 45, of Washington Twp., and his assistant Mohammad Mian, 44, of Oak Park, home health agency owner John Stephen Check, 53, of Dearborn Heights, and business partner co-owner David Vezzossi, 52, of West Bloomfield, marketer Frederick Till Jackson Sr., a.k.a. “Big Fred,” 52, of Detroit, marketer Tiffany Walker, a.k.a. “Mary Reed,” 45, of Detroit, Sierra Walker, a.k.a. “Tosha,” 25, of Detroit, marketer Toney Taylor, 44, of Detroit, marketer Jimmy Foster, 35, of Detroit, marketer James Blake, 32, of Sterling Heights, marketer Troy Ivory, 47, of Warren, marketer Jackie Renee Ivory, 32, of Ecorse, marketer Eric Hester, 40, of Ionia, marketer Felicia Jackson, 27, of Eastpointe, marketer Ayesha McCray, 30, of Detroit, marketer Jamall Gibson, 30, of Eastpointe, couriers Alfornia Johnson, a.k.a. “Con,” a.k.a “Alex,” a.k.a. “ShiCon,” 34, of Detroit, Phillip Burnett, a.k.a. “Frank,” a.k.a “Frank Burns,” 33, of Detroit, Ronnie Moses, a.k.a. “Red,” 23, of Detroit, Corey Williams, a.k.a. “CoCo,” 44, of Detroit, William Ashley Smith, a.k.a. “Cash,” of Portsmouth, OH, Robert Scott Dials, 25, of Portsmouth, OH, Cherish Lewis, 26, of Wheelersburg, OH, distributors Willie David Jackson, a.k.a. “Lil’ Dave,” 24, of Eastpointe, Lance Hatten, 29, of Columbus, OH, Josh Barnes, 33, of Wheelersburg, OH, Nathan Reed, a.k.a. “Reed,” 31, of Portsmouth, OH, and electronic transfer nominee Garland Holman, 30, of Detroit.
“The merger of health care fraud and drug trafficking is a disturbing trend that is not only robbing taxpayers, but also fueling addictions to prescription drugs,” McQuade said. “Prescription drug abuse has become a national epidemic, with more Americans dying from overdoses than from gunshot wounds.”
Robert L. Corso, Special Agent in Charge of DEA's Detroit Field Division stated, "Confronting the illegal diversion and abuse of controlled pharmaceuticals is a top priority of DEA and our law enforcement partners. The indictment alleges that this drug distribution organization includes members of the medical profession who abused their positions of trust and endangered the lives of countless people for pure profit. This was done by illegally distributing opiate painkillers and other controlled prescription medications throughout southeast Michigan and stretching to the southern reaches of Ohio. This investigation makes it clear that the DEA and our partners in law enforcement will continue to investigate and bring to justice those individuals that are responsible for the illegal distribution of prescription medicines."
FBI Special Agent in Charge Foley stated, "These arrests are the result of countless hours of hard work by the FBI and its law enforcement partners. We remain dedicated to pursuing and prosecuting any individuals who illegally exploit the health care system for their own personal gains.”
Acting ATF Special Agent in Charge Gil Salinas stated. “The combined law enforcement intelligence and resources were crucial in addressing this criminal element and in making our communities safer. ATF continues to pursue the those who continually endanger our communities. I commend the outstanding collaboration of our Violent Crime Task Force and our local, state, and federal law enforcement partners in undertaking this sweeping investigation.”
Special Agent in Charge Erick Martinez, Internal Revenue Service Criminal Investigation added that these crimes committed by doctors and pharmacists were worse than many typical schemes. “These illegal activities are done primarily to make money and once the money is in the hands of the suspects, it’s hard for them to deny their involvement.”
"The public rightfully expects that doctors will uphold professional standards rather than exploit patients for personal gain" said Lamont Pugh III, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General's region including Michigan. "Working closely with our law enforcement partners, we will investigate and bring to justice those who harm the Medicare program and taxpayers by fraudulently submitting claims related to illegal diversion and/or distribution of addictive drugs."
Detroit Police Chief Logan stated, "The investigation of this case exemplifies the strong teamwork between the men and women of the Detroit Police Department and our state and federal law enforcement partners, along with members of the Portsmouth, Ohio Police Department. Having the United States Attorney’s Office prosecute this criminal case will be sending a strong message to those who choose to break the law. Together we will make a difference.”
Police Chief Robert Ware stated, “Portsmouth is along a corridor of U.S. Route 23 better known as the drug pipeline. The flow of drugs from Detroit to Portsmouth and to neighboring cities such as Huntington, West Virginia has changed lives and communities forever. Behind the scenes are some very dedicated, hardworking Officers, Deputies, State Troopers, Federal Agents and Prosecutors working together to bring justice to those poisoning our communities. What you have before you today is the culmination of some of those joint efforts to curb the flow of illegal drugs into our neighborhoods.”
Of the ten defendants charged in the earlier indictment, all have been convicted by pleas over the last year. Those defendants included Detroit and Ohio residents. Several have been sentenced already and others are due to be sentenced in the near future.
The investigation in this case was handled by the Drug Enforcement Administration, the Federal Bureau of Investigation, the Bureau of Alcohol Firearms and Explosives, Detroit Police Dept., Portsmouth, Ohio, Police Dept., Scioto County Sheriff’s Office, the Internal Revenue Service Criminal Investigation, the U.S. Immigration and Custom’s Enforcement’s Department of Homeland Security Investigations, the Department of Health and Human Services Office of Inspector General, and the Detroit Violent Crimes Task Force and Michigan State Police. The case is being prosecuted by Assistant U.S. Attorneys Terrence R. Haugabook, Michael Martin, and Wayne F. Pratt. They will be assisted by Assistant U.S. Attorneys Jonathan Grey and Gjon Juncaj of the Forfeiture Section.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Former Saltville Rescue Squad President SentencedRead the Press Release
ABINGDON, VIRGINIA -- The former president of the Saltville Rescue Squad was sentenced today in the United States District Court for the Western District of Virginia in Abingdon on healthcare fraud charges.
Following a jury trial last September, Eddie Wayne Louthian Sr., 60, of Saltville, Va., was found guilty on one count of conspiracy to commit healthcare fraud, one count of healthcare fraud, four counts of making false statements in relation to a healthcare matter and one count of making a false statement to a federal grand jury.
Today in District Court he was sentenced to 48 months in Federal prison and three years of supervised release thereafter.
“Mr. Louthian used the Saltville Rescue Squad as a vehicle to defraud the Medicare program,” said United States Attorney Timothy J. Heaphy. “A jury found him guilty to fraudulently billing Medicare for unnecessary services, acts for which he was now been justly punished. This office will continue to root out health care fraud, which drives up costs to consumers.”
“Not only did Mr. Louthian defraud the Medicare system of hundreds of thousands of dollars, he also robbed from seniors in need of medical care. Fraud like his inevitably drives prices up for medical services, which all of us end up paying for,” said Virginia Attorney General Ken Cuccinelli.
Monica Hicks, a member of the rescue squad also charged in the scheme, previously pleaded guilty to one count of conspiracy to commit healthcare fraud.
Following evidence presented by Virginia Assistant Attorneys General and Special Assistant United States Attorneys Janine Myatt and Vaso Doubles, a jury found that Louthian and Hicks conspired to fraudulently bill Medicare and Anthem Blue Cross Blue Shield for non-emergency ambulance services for Medicare eligible patients.In order to receive Medicare reimbursements for non-emergency ambulance transports patients must be bed-confined or otherwise in such a medical condition that ambulance transport is necessary. The jury found that the defendant was obtaining reimbursement for transporting patients that did not qualify for non-emergency transport.
The jury found that between December 6, 2005 and September 17, 2011, the defendant fraudulently billed Medicare approximately $1,650,000 and fraudulently received approximately $750,000 in reimbursements for Medicare ambulance transports.
In addition, the jury found that between December 20, 2005 and September 3, 2011, the defendant fraudulently billed Anthem approximately $1,000,000 and fraudulently received approximately $130,000 in reimbursements for ambulance transports.
The defendant was also found guilty of submitting fraudulent trip sheets and Certificates of Medical Necessity forms for billing purposes and made false statements before a Federal Grand Jury.
The District Court also imposed a money judgment against Louthian for $907,521, the full amount of the fraud. The court also forfeited assets associated with Louthian, including
bank accounts, vehicles, real estate, and an ambulance service, in partial satisfaction of the money judgment. The court will determine the interest of other persons in these assets at a later hearing.The investigation of the case was conducted by the Department of Health and Human Services Office of the Inspector General, the Virginia Office of the Attorney General’s Medicaid Fraud Control Unit and the Internal Revenue Service Criminal Investigation. Janine Myatt and Vaso Doubles prosecuted the case for the United States.
Former Hedge Fund Manager Recently Arrested in Italy After Being on Run for Five Years Named in Grand Jury Indictment That Alleges Market Manipulation Scam That Caused $200 Million in LossesRead the Press Release
LOS ANGELES – A German national who managed a series of hedge funds based in the Cayman Islands has been indicted on federal fraud charges alleging that he oversaw a stock manipulation scheme designed to “pump up” the reported returns of his hedge funds, while self-dealing for his own benefit to the detriment of the funds, in a fraud that caused investors to loss approximately $200 million.
Florian Wilhelm Jürgen Homm, 53, was named in a 10-count indictment that was returned late Tuesday afternoon by a federal grand jury in Los Angeles.
The indictment specifically charges Homm with one count of conspiracy to commit securities fraud, eight counts of securities fraud and one count of wire fraud. The indictment also contains a forfeiture allegation that would cause Homm, if he is convicted of any of the 10 counts in the indictment, to forfeit to the United States “any and all property, real and personal, which constitutes or is derived from proceeds traceable to” any crime to which he is found guilty.
Homm is currently in custody in Italy after being arrested on March 8 at the Uffizi Gallery in Florence. Homm was arrested pursuant to the United States’ request for his provisional arrest pending extradition, based on a criminal complaint relating to the alleged fraud that had been filed by federal prosecutors in Los Angeles. The indictment filed yesterday in Los Angeles replaces the criminal complaint as the charging document.
Homm was the founder and chief investment officer of Absolute Capital Management Holdings Limited, a Cayman Islands-based investment advisor that managed eight hedge funds from 2004 until September 2007. As part of the alleged scheme, Homm bragged to investors that Absolute Capital was named overall winner for 2006 of the European Hedge Fund Group, by the publication Hedge Fund Review.Court documents filed in United States District Court in Los Angeles – specifically, the indictment and the affidavit in support of the criminal complaint – allege that Homm directed the hedge funds to buy billions of shares of thinly traded, United States-based “penny stocks.” Homm caused most of the purchases of penny stocks to be made through Hunter World Markets, Inc., a broker-dealer in Los Angeles that Homm co-owned. Homm, who at the time of the alleged scheme resided in Palma de Majorca, Spain, also allegedly obtained shares of the penny stock companies through various businesses he controlled.
After the hedge funds invested hundreds of millions of dollars in the illiquid penny stocks, Homm’s co-conspirators used a secret instant messaging system to avoid the scrutiny of regulators and caused the hedge funds to trade the stocks among themselves in “cross-trades” made through the Los Angeles-based broker dealer. The cross-trades served to increase the trading prices of the previously illiquid stocks and, in turn, to boost the net asset values and apparent performance of the hedge funds, in a practice called “portfolio pumping.” This apparent performance improvement at the hedge funds generated additional fees for Homm and Absolute Capital. It also boosted Absolute Capital’s stock price on the London Stock Exchange, Alternative Investment Market, from which Homm profited by selling shares. As part of the stock manipulation scheme, Homm and others also allegedly sold their own shares of the penny stocks to the hedge funds managed by Homm.
The indictment alleges that Homm and several co-conspirators who have not been indicted at this time “fraudulently manipulated these stocks to inflate and/or artificially prop up their prices to exaggerate the purported profitability of the hedge funds holding them.
“This enabled the co-conspirators to sell their own shares of the penny stocks at the inflated prices to the hedge funds. The stock price inflation also served to fraudulently overstate the performance of the hedge funds which, in turn, generated substantial performance fees and other compensation for defendant Homm and his co-conspirators,” according to the indictment.
Folllowing allegations made by a “whistleblower” in 2006, Homm dumped tens of millions of dollars worth of his own shares in Absolute Capital and resigned from the firm in the middle of the night on September 18, 2007. The scheme allegedly netted Homm and his co-schemers more than $53 million via trades made through Hunter World Markets alone.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty in court.
Each charge of conspiracy to commit securities fraud and securities fraud carry a statutory maximum penalty of 25 years in federal prison. The wire fraud count carries a maximum penalty of 20 years in prison.
The case against Homm is the product of an ongoing investigation by the Federal Bureau of Investigation. Agents in the FBI’s Los Angeles Field Office worked with the FBI’s Legal Attaché Office in Rome and its sub-office in Milan, where agents worked collaboratively with Italian authorities, to secure the apprehension of Homm. The U.S. Department of Justice Attaché in Rome provided substantial assistance.
The Securities and Exchange Commission provided assistance to the FBI’s investigation.Two years ago, the United States Securities and Exchange Commission filed a civil lawsuit in Los Angeles federal court against Homm and four other defendants, alleging a microcap stock manipulation scheme as part of “portfolio pumping” plot to increase the value of Absolute Capital (see: http://www.sec.gov/litigation/litreleases/2011/lr21865.htm).
Homm recently published a book that was translated into English under the title, Rogue Financier: The Adventures of an Estranged Capitalist.
Release No. 13-039
Former Employee of Santa Ana Star Casino Pleads Guilty to Embezzling Money from the CasinoRead the Press Release
Wife Pleads Guilty to Participating in Husband’s Embezzlement SchemeALBUQUERQUE – John Hoffman, 42, of Rio Rancho, N.M., entered a guilty plea this morning to the felony offense of theft by an employee of a Indian gaming establishment. His wife and accomplice, Michelle Fischer, 42, entered a guilty plea to the misdemeanor offense of theft from an Indian gaming establishment. The guilty pleas were announced by U.S. Attorney Kenneth J. Gonzales and Police Chief Harry Betz of the Santa Ana Tribal Police Department.
Hoffman pled guilty to a felony information charging him with embezzling money belonging to the Santa Ana Star Casino, which is operated by Santa Ana Pueblo, from Dec. 2010 to Aug. 2011. At the time, Hoffman was employed in the Marketing Department of the Santa Ana Star Casino. In entering his guilty plea, Hoffman admitted that, during the period covered by the information, he abused his position at the Santa Ana Star Casino by gaining access to active and inactive “Player’s Club” cards and adding money and credits to the cards without proper basis or authority. Hoffman further admitted that he then gave the cards to Fischer knowing that she intended to distribute the cards to others who would use the cards to gamble and who would give Hoffman and Fischer a percentage of their winnings.
Fischer pled guilty to a misdemeanor information charging her with theft of money belonging to the Santa Ana Star Casino. In entering her guilty plea, Fischer admitted obtaining “Player’s Club” cards to which she was not entitled from a casino employee, and giving the cards to others who used the cards to gamble with the understanding that Fischer would receive a percentage of their winnings. Fischer also admitted that she also used some of the cards to gamble knowing that she was not entitled to do so and for the purpose of obtaining a financial benefit.
Hoffman and Fischer were both released on conditions of release pending their sentencing hearings, which have yet to be scheduled. At sentencing, Hoffman faces a maximum penalty of 20 years in prison and Fischer faces a maximum penalty of one year in prison. Hoffman and Fischer will be required to make restitution to Santa Ana Star Casino in the amount for which the Court determined each to be responsible.
These cases were investigated by the Santa Ana Tribal Police Department and are being prosecuted by Assistant U.S. Attorney Kyle T. Nayback.
Former El Paso County Deputy Sheriff Pleads Guilty as Part of Ponzi SchemeRead the Press Release
DENVER – David N. Hawkins, age 43, of Colorado Springs, Colorado, pled guilty late last week before U.S. District Court Judge Robert E. Blackburn to one count of wire fraud and one count of money laundering, the United States Attorney’s Office, the Federal Bureau of Investigation, and IRS – Criminal Investigation announced. Hawkins, who is free on bond, is scheduled to be sentenced by Judge Blackburn on June 7, 2013 at 11:00 a.m.
Hawkins was originally charged by Information on January 2, 2013. He waived his right to be charged by Indictment. According to the facts contained in the Information as well as the stipulated facts contained in the plea agreement, Hawkins was employed as a deputy sheriff for the El Paso County, Colorado Sheriff's Office. In 2006 Hawkins attended training courses on how to trade profitably in foreign currencies and the exchanges of foreign currencies (hereinafter, the "FOREX" or "foreign currency exchange" markets). He also attempted to self-educate himself concerning trading in the FOREX markets.
From in or about November 2009, when Hawkins obtained his first FOREX trading client, and continuing through early December 2011, he obtained in excess of $1.2 million from his colleagues at the El Paso County Sheriff’s Office, other law enforcement officers in El Paso County, and their respective friends and relatives for the purpose of trading these funds in the FOREX markets on their behalf. He had approximately 73 investors, most investors using personal savings or retirement funds accumulated over the years as their source of the investment funds. Estimated losses to investors collectively total approximately $215,643.
Hawkins made several false representations to investors, including investors would be guaranteed a return of 10% per month (or 120% per annum). These representations were false and at no time were the investments ever profitable.
Over time Hawkins removed investor funds from FOREX trading accounts into bank accounts he controlled. He would then use these funds either for his own personal expenses, for personal investments unrelated to FOREX investments, or to fund payments to those of his investors who requested to withdraw their principal investments. At one point, he used investor funds toward the purchase of two personal automobiles and mid- 2011 he used in excess of $150,000 in investor funds to purchase franchises and to set up operations for two semi-professional indoor arena football teams, one located in Danville, Illinois and the other in Mesquite, Texas. The teams never became operational.
“Ponzi schemes have taken the hard earned money of all too many Americans in the last few years,” said U.S. Attorney John Walsh. “In this case, a Deputy Sheriff took money meant for investment, and spent it on a variety of things, including personal items, giving no thought to the financial damage he is causing the colleagues, family and friends who trusted him. He will now face the consequences of his crimes.”
“If it sounds too good to be true it probably is. People should diligently check out claims of unusually high rates of return before investing. Don't become a victim of an investment scam", said Stephen Boyd, Special Agent in Charge, IRS Criminal Investigation, Denver Field Office.
“Working with our partners, the FBI is committed to investigating complex white collar crimes, especially when someone in a position of trust misuses that position to exploit innocent investors,” said FBI Denver Acting Special Agent in Charge Steve Olson.
Hawkins faces one count of wire fraud which carries a penalty of not more than 20 years in federal prison and a fine of up to $250,000. He also faces one count of money laundering which carries a penalty of not more than 10 years in federal prison and a fine of up to $250,000.
This case was investigated by the Federal Bureau of Investigation (FBI), and Internal Revenue Service – Criminal Investigation (IRS-CI).
The case is being prosecuted by Assistant U.S. Attorney Kenneth Harmon.
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Former Baptist Minister Sentenced to 12 Years ImprisonmentRead the Press Release
FOR IMMEDIATE RELEASECONTACT: Mary Hatton
www.usdoj.gov/usao/inn/ FAX (219) 852-2770
Hammond, Indiana - United States Attorney David Capp announced that Jack Allen Schaap, 55, of Crete, Illinois, was sentenced by Senior District Judge Rudy Lozano to 144 months imprisonment and 5 years of supervised release after pleading guilty to the felony offense of transportation of a minor with the intent to engage in criminal sexual activity.
According to documents filed by the government in this case, Schaap, as the Pastor of Hammond Baptist Church, Superintendent of its schools and a trusted advisor to the victim and her family, involved himself with counseling the victim, a then-16 year old church member who had been identified by an administrator at the school as vulnerable.Once their sessions began, Schaap met with her for longer durations and with increasing frequency over time, beginning with a few hours per week in April and May 2012, to semi-weekly in June and then daily or several times a day in July.Schaap encourage the victim to view him as not just her Pastor but also as her friend and finally, love interest.Schaap’s phone records revealed that in one month’s time he and the victim spoke on the phone or texted one another approximately 662 times.He also arranged to have the victim transported to Illinois and to Michigan so they could spend extended periods of time alone together.The government recovered photos taken at his property in Illinois and inside a cabin in Michigan which depicted Schaap and the victim in intimate poses.
This case resulted from an investigation by members of the Indiana Internet Crimes Against Children Task Force, including the Federal Bureau of Investigation, the Indiana State Police and the Lake County Sheriff’s Department.This case was prosecuted by Assistant United States Attorneys Jill Koster and Susan Collins.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by 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
Federal Jury Convicts Vallejo Woman of Bankruptcy and Mortgage Fraud SchemeRead the Press Release
SAN JOSE, CA— A federal jury convicted Vallejo resident Myra Holmes yesterday of one count of Bankruptcy Fraud, one count of Bank Fraud, and three counts of Making a False Statement to a Bank, United States Attorney Melinda Haag announced. The guilty verdict followed a three-week trial before U.S. District Court Judge Edward J. Davila. The jury acquitted Myra Holmes on two other false statement counts.
Evidence at trial showed that Holmes, 55, enriched herself by knowingly receiving from her father his half-interest in a Vallejo residence in which she lived. Holmes knew at the time she received this property that her father had previously declared bankruptcy and that as a result his half-interest in the Vallejo property now belonged to his Chapter 7 bankruptcy estate. Holmes took this half-interest in the Vallejo property without paying anything to the bankruptcy estate and also without notifying or obtaining the permission of the United States Bankruptcy Court or the bankruptcy trustee. After Holmes received her father’s half-interest in the Vallejo property, she drained the equity from the property through a fraudulent refinancing mortgage loan application. The jury found that Holmes falsely told World Savings Bank in her refinancing mortgage applications: (1) that she earned $15,000 a month; (2) that she had a bank account balance of $15,000; and (3) that she was not a party to a lawsuit. Evidence at trial showed that Holmes knew at the time she filed her refinancing mortgage applications that she was overstating her monthly income and account balance, and also knew that the bankruptcy trustee had recently filed a lawsuit against her seeking to recover the bankruptcy estate’s half-interest in the Vallejo property.
As a result of her bankruptcy fraud and mortgage fraud, Holmes received approximately $147,000 directly and arranged for personal debts to be paid (including her debts to Neiman Marcus, Lord & Taylor, Macy’s and Spiegel). By the end of April 2006, Holmes had spent on personal expenses (including gambling and shopping) all of the approximately $147,000 that she had fraudulently received as a result of the November 2005 refinancing of the Vallejo property. To date, Holmes has not repaid the bankruptcy estate for the funds she took out of the Vallejo property in the November 2005 refinancing.
Holmes is scheduled to be sentenced on July 1, 2013, before Judge Davila in San Jose. Judge Davila ordered that Holmes remain out of custody pending sentencing on a co-signed $50,000 release bond.
The maximum statutory penalty for 18 U.S.C. § 152(5) - Bankruptcy Fraud/Concealment of Assets - is five years' imprisonment, a $250,000 fine and restitution. The maximum statutory penalty for 18 U.S.C. § 1344 - Bank Fraud, and 18 U.S.C. 1014 - Making a False Statement to a Bank - is 30 years' imprisonment, a $1,000,000 fine and restitution. 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 Joseph Fazioli and Assistant U.S. Attorney Grant Fondo are prosecuting the case with the assistance of Paralegal Specialist Lakisha Holliman and Legal Assistants Laurie Worthen and Kamille Singh. This prosecution is the result of a multi-year investigation by the Federal Bureau of Investigation.
Federal Jury Convicts Albuquerque Man for Unlawfully Possessing A FirearmRead the Press Release
Prior Felon Brandished Pistol at 17-Year-Old and Threatened to Kill HerALBUQUERQUE – A federal jury returned a guilty verdict this morning against Christian Alexander Sangiovanni, 32, of Albuquerque, N.M., for being a felon in possession of firearms and ammunition after a two-day trial, announced U.S. Attorney Kenneth J. Gonzales, 2nd Judicial District Attorney Kari E. Brandenburg, and Thomas G. Atteberry, Special Agent in Charge of the Phoenix Division of the Bureau of Alcohol, Tobacco, Firearms, and Explosives.
Sangiovanni was arrested in Aug. 2012, on an indictment charging him with being a felon in possession of a firearm and ammunition. The indictment alleged that Sangiovanni unlawfully possessed a firearm and ammunition on April 25, 2010, in Bernalillo County, N.M. At the time, Sangiovanni was prohibited from possessing firearms or ammunition because he previously had been convicted of the following three felony offenses in the 12th Judicial District Court for the State of New Mexico: embezzlement in 2000; sexual exploitation of children in 2001; battery on a police officer in 2003. He also previously had been convicted of possession of heroin with intent to distribute in the 4th Judicial District Court for the State of New Mexico in Guadalupe County in 2005.
According to the evidence at trial, on April 25, 2010, a 17-year-old high school student encountered Sangiovanni, an acquaintance she knew through a mutual friend, at a convenience store in the Northeast Heights of Albuquerque while running an errand for her mother. When the teenager parked her car, Sangiovanni got into the front passenger seat. After yanking the car keys out of the ignition and slapping a cellphone out of the teenager’s hand to prevent her from calling for help, Sangiovanni pulled a firearm out, brandished the weapon at the teenager, and threatened her against getting out of the car. During the encounter, Sangiovanni told the teenager that, “I have no problem blasting both of us right now, you first, then me.” After a time, Sangiovanni permitted the teenager to enter the store, make her purchase and return home.
Later that night, Sangiovanni sent the teenager an E-mail in which he threatened her against telling anyone about the violent encounter. Thereafter, Sangiovanni E-mailed the teenager photographs of himself holding a pistol to his head. On April 26, 2010, the teenager and her mother contacted the police and reported Sangiovanni’s threats against the teenager and provided the E-mails containing the threats and photographs of Sangiovanni holding the pistol to his head.
On May 3, 2010, after Sangiovanni continued to send threatening E-mails to the teenager, officers executed an arrest and search operation at a residence where Sangiovanni was staying. After arresting Sangiovanni on state charges, the officers found a Smith & Wesson, model 459, 9mm pistol with an extended magazine that contained rounds of ammunition. The pistol subsequently was identified by the teenager as the weapon that Sangiovanni brandished at her on April 25, 2010.
The jury deliberated approximately three hours before returning a guilty verdict.
Sangiovanni has been in federal custody since his arrest and remains detained pending his sentencing hearing, which has not yet been scheduled. Sangiovanni faces a maximum sentence of ten years in prison unless the court determines that he is an armed career criminal. In that event, Sangiovanni faces a mandatory minimum sentence of 15 years in prison.
U.S. Attorney Kenneth J. Gonzales said that the case was prosecuted as part of a federal anti-violence initiative that targets “the worst of the worst” offenders for federal prosecution. Under this anti-violence initiative, the U.S. Attorney’s Office and federal law enforcement agencies work with New Mexico’s District Attorneys and state, local and tribal law enforcement agencies to target violent or repeat offenders for federal prosecution with the goal of removing repeat offenders from communities in New Mexico for as long as possible.
District Attorney Kari E. Brandenburg added, “Our partnership with the U. S. Attorney’s Office is integral to reducing the violence in Bernalillo County. It is imperative to remove armed felons from our community.”
Today’s guilty verdict puts a violent offender back behind bars and off the streets. Anytime we can prevent a violent felon from possessing a firearm, our families and communities are safer,” stated ATF Special Agent in Charge, Thomas G. Atteberry. “I want to commend the leadership of U.S. Attorney Kenneth J. Gonzales and his prosecution team in pursuing federal firearms charges against Sangiovanni.” Mr. Atteberry also recognized the efforts of the dedicated ATF agents and the Albuquerque Police Department officers who perfected this criminal case.
The case was investigated by the Albuquerque office of the Bureau of Alcohol, Tobacco, Firearms, and Explosives with assistance from the 2nd Judicial District Attorney’s Office and the Albuquerque Police Department, and is being prosecuted by Assistant U.S. Attorneys Norman Cairns and Adam S. Rowley.
Federal Charges Filed Against 13 Men as A Result of ATF Undercover Investigation in Kansas City, Kan.Read the Press Release
KANSAS CITY, KAN. – Thirteen men have been charged with federal firearms violations, drug trafficking or other crimes as a result of an ATF undercover investigation in Kansas City, Kan., U.S. Attorney Barry Grissom and ATF Special Agent In Charge Marino Vidoli announced today.
In addition, four other defendants were charged in state district court in Wyandotte County as a result of the investigation.
Investigators seized 46 firearms as well as cocaine, crack, methamphetamine, marijuana, prescription drugs and more than $17,500 in cash.
Seven defendants named in grand jury indictments that have been unsealed so far are:
Filiberto Avalos, 27, ten counts of unlawful possession of a firearm by an alien unlawfully in the United States, ten counts of unlawful possession of a firearm after a felony conviction, one count of distributing cocaine and five counts of distributing methamphetamine.
Marty D. Baskin, 30, one count of unlawful possession of ammunition after a felony conviction.
Rene A. Espinoza, 27, one count of unlawful possession of a firearm by an alien unlawfully in the United States.
Antonio Campos Morales, 30, one count of unlawful possession of a firearm by an alien unlawfully in the United States.
Michael Wuellner, Jr., 27, one count of conspiracy to possess with intent to distribute methamphetamine, one count of distributing cocaine, four counts of unlawfully possessing a firearm after a felony conviction and three counts of distributing methamphetamine,
Jerrade D. Wilhelm, 19, one count of conspiracy to possess with intent to distribute methamphetamine, three counts of distributing cocaine, eight counts of unlawfully possessing a firearm after a felony conviction and two counts of distributing methamphetamine,
Randall J. Chapman, 43, one count of conspiracy to possess with intent to distribute crack cocaine and 13 counts of distributing crack cocaine.Names of six other defendants have not been released.
Upon conviction, the crimes carry the following penalties:
Possession of a firearm by an alien unlawfully in the United States: A maximum penalty of 10 years in federal prison and a fine up to $250,000.
Unlawful possession of a firearm or ammunition after a felony conviction: A maximum penalty of 10 years in federal prison and a fine up to $250,000.
Distributing cocaine: A maximum penalty of 20 years and a fine up to $1 million.
Distributing methamphetamine: Not less than five years and not more than 40 years and a fine up to $5 million.
Unlawful possession of a firearm not registered in the National Firearms Registration and Transfer Record: A maximum penalty of 10 years and a fine up to $250,000.
Conspiracy to possess with intent to distribute methamphetamine: Not less than 10 years and not more than life and a fine up to $10 million.
Conspiracy to possess with intent to distribute crack cocaine: A maximum penalty of 20 years and a fine up to $5 million.
The ATF, the DEA, the Kansas City, Kan., Police Department and the Wyandotte County District Attorney’s Office investigated. Assisting with arrests were Homeland Security Investigations and the U.S. Marshals Service. Assistant U.S. Attorney Terra Morehead and Assistant U.S. Attorney Trent Krug are prosecuting.In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.
Fayetteville Man Sentenced for Drug DistributionRead the Press Release
RALEIGH - United States Attorney Thomas G. Walker announced that in federal court today Chief United States District Judge James C. Dever III sentenced MAJOR RAY BROWN, 30, to 132 months imprisonment, followed by 3 years supervised release.
A Federal Grand Jury returned a six-count Criminal Indictment on April 24, 2012. On December 10, 2012, BROWN pled guilty to Distribution of a Quantity of Cocaine Base (Crack), in violation of Title 21, United States Code, Section 841(a), and to Possession of a Firearm in Furtherance of a Drug Trafficking Crime, in violation of Title 18, United States Code, Section 924(c)(1)(A)(iii).
According to the investigation, BROWN trafficked crack/cocaine and firearms in Fayetteville from at least August 2010 to December 2011. On several occasions within this period of time, BROWN sold crack/cocaine and firearms to confidential informants working under the direction of law enforcement.
The first controlled purchase of a firearm and crack/cocaine from BROWN was conducted on August 9, 2010, less than one week after BROWN attended a Project Safe Neighborhoods (PSN) “Call-In” in Fayetteville. At the Call-In, BROWN and other felony probationers were educated on federal firearms laws and warned of the consequences of their actions should they continue to engage in crimes involving drugs, firearms, or violence. Offenders in attendance were also encouraged to become productive members of their communities, and were provided with information regarding job training and educational opportunities, housing, and public assistance.
This case was part of the Project Safe Neighborhoods initiative, which encourages federal, state, and local agencies to cooperate in a unified “team effort” against gun crime, targeting repeat offenders who continually plague their communities.
Investigation of this case was conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Fayetteville Police Department, and the Cumberland County Sheriff’s Office. Assistant United States Attorney Toby Lathan represented the government.
Family Medicine Clinic in Harker Heights Settles False Claims Matter for $430,000Read the Press Release
United States Attorney Robert Pitman announced that in Waco, Dr. Bola Elemuren, a family practitioner d/b/a the Family Medicine Clinic (FMC) in Harker Heights, TX, along with her husband and office manager, John Ogunmuyiwa, have agreed to pay $430,000 to settle allegations of federal False Claims Act/Health Care Fraud violations involving the submission of false claims for payment to the TRICARE, Medicare and Medicaid programs.
The settlement agreement resolves allegations that, from 2003 to 2008, these defendants knowingly overcharged TRICARE for automated laboratory tests that diagnose the cause of vaginitis/bacterial vaginosis. The automated laboratory test at issue is a single procedure that must be billed under an inclusive billing code at a pre-determined rate. The agreement settles the claim that defendants “unbundled” and inflated their charges by separately billing the test under multiple CPT codes, at a higher total cost to the TRICARE program. The United States asserted that the unbundled claims defendants submitted made it appear, falsely, as if they had performed more than one test and, as a result, were entitled to more than one payment from the government.
The settlement agreement also resolves allegations that, from 2008 to 2012, the defendants knowingly billed TRICARE, Medicare, and Medicaid for diagnostic x-rays performed by unqualified and improperly trained personnel.
Following the United States’ investigation, the defendants agreed to settle the case for $430,000 without litigation. The settlement agreement is not an admission of liability by Dr. Elemuren, Ogunmuyiwa or FMC.
This matter was investigated by agents with the Department of Defense Criminal Investigative Service. Assistant United States Attorney John LoCurto handled the matter for the Government.
TRICARE is a federally funded statutory medical benefits program for military personnel, their spouses, and their dependents. Medicare is a federally funded program that covers the cost of medical care for individuals who are eligible based on their age, disability, or affliction with end-stage renal disease. Medicaid covers the cost of medical care for eligible low income individuals. The federal and state governments jointly fund the Medicaid program.Erie Man Pleads Guilty to Child Exploitation and Firearm OffensesRead the Press Release
ERIE, Pa. - A former resident of Erie, Pennsylvania, pleaded guilty in federal court to charges of violating federal firearms laws and laws relating to the sexual exploitation of children, United States Attorney David J. Hickton announced today.
Douglas E. Melter, 32, 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 Melter attempted to induce a woman to procure a minor for Melter to sexually abuse and photograph naked. Melter also possessed computer images depicting minors engaging in sexually explicit conduct and possessed a firearm after having been convicted of multiple felonies.
Sentencing will be scheduled at a later date. The law provides for a total sentence of life 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.
Assistant United States Attorney Christian A. Trabold is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation, the Pennsylvania State Police and the Erie Police Department conducted the investigation that led to the prosecution of Melter.
Launched in February 2006, Project Safe Childhood is a nationwide initiative designed to protect children from online exploitation and abuse. Led by the U.S. Attorneys' Offices, 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 identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Eagle Pass Contractor Enters Guilty Plea in Connection with Maverick County Bribery, Kickback and Bid-rigging SchemeRead the Press Release
In Del Rio, Texas, Eduardo De La Garza, owner of Rio Bravo Construction in Eagle Pass, faces up to ten years in federal prison after pleading guilty this morning to paying a bribe to an agent of an organization receiving federal funds in connection with an alleged bribery, kickback and bid-rigging scheme in Maverick County announced United States Attorney Robert Pitman and FBI Special Agent in Charge Armando Fernandez.
Appearing before United States Magistrate Judge Victor Garcia, De La Garza admitted that in May 2011, he submitted a $19,800 bid to Maverick County to construct a concrete pad at the intersection of Winsor Avenue and Bianca Road in Precinct 4. DeLaGarza further admitted that he has never constructed the pad even though he received two checks from Maverick County--a $9,900 check to commence work and then $9,900 check for the completion of the concrete pad. Furthermore, DeLaGarza admitted that he made a cash payment to an employee working in the Maverick County Auditor’s Office for each check he received. According to court records, both checks were issued to De La Garza without undergoing the appropriate internal review process by Maverick County.
DeLaGarza remains on bond pending sentencing which has yet to be scheduled.
This ongoing investigation is being conducted by the Federal Bureau of Investigation and the Texas Department of Public Safety. Individuals who have first-hand information about corruption, fraud, or bribery related to Maverick County are urged to contact the FBI at (210) 225-6741. Assistant United States Attorney Michael Galdo is prosecuting this case on behalf of the Government.
In 2010 and 2011, Maverick County received hundreds of thousands of federal dollars as part of Operation Stonegarden, a federal grant program that provides funding to state, local, and tribal law enforcement agencies to enhance their capabilities to jointly secure U.S. borders and territories.
Dual U.S.-Costa Rican Citizen Pleads Guilty in Connection with <br /> Costa Rica-based Business Opportunity Fraud VenturesRead the Press Release
Sean Rosales pleaded guilty in Miami federal court to one count of an indictment pending against him, charging conspiracy to commit mail and wire fraud, the Justice Department and the U.S. Postal Inspection Service announced today.
Rosales, a dual United States and Costa Rican citizen charged in connection with the operation of a series of fraudulent business opportunities, was arrested in Chicago late last year following his indictment by a federal grand jury in Miami on Nov. 29, 2011. Rosales was arrested based on charges that he and his co-conspirators purported to sell beverage and greeting card business opportunities, including assistance in establishing, maintaining and operating such businesses. The indictment is part of the government’s continued nationwide crackdown on business opportunity fraud.
Eleven other individuals have been charged in connection with business opportunity fraud ventures based in Costa Rica. Rosales is the eighth of those individuals to be convicted in the United States.
“The Department of Justice is committed to cracking down on financial fraud, including business opportunity fraud schemes,” said Stuart F. Delery, Principal Deputy Assistant Attorney General for the Justice Department’s Civil Division. “That is why we will continue to prosecute those who would deprive innocent, hardworking Americans of their hard-earned money by offering phony business opportunities.”
Beginning in May 2005, Rosales and his coconspirators fraudulently induced purchasers in the United States to buy business opportunities in USA Beverages Inc., Twin Peaks Gourmet Coffee Inc., Cards-R-Us Inc., Premier Cards Inc., The Coffee Man Inc. and Powerbrands Distributing Company. The business opportunities cost thousands of dollars each, and most purchasers paid at least $10,000. Each company operated for several months, and after one company closed, the next opened. The various companies used bank accounts, office space and other services in the Southern District of Florida and elsewhere.
Rosales, using aliases, participated in a conspiracy that used various means to make it appear to potential purchasers that the businesses were located entirely in the United States. In reality, Rosales operated out of Costa Rica to fraudulently induce potential purchasers in the United States to buy the purported business opportunities.
The companies made numerous false statements to potential purchasers of the business opportunities, including that purchasers would likely earn substantial profits; that prior purchasers of the business opportunities were earning substantial profits; that purchasers would sell a guaranteed minimum amount of merchandise, such as greeting cards and beverages; and that the business opportunity worked with locators familiar with the potential purchaser’s area who would secure or had already secured high-traffic locations for the potential purchaser’s merchandise stands. Potential purchasers also were falsely told that the profits of some of the companies were based in part on the profits of the business opportunity purchasers, thus creating the false impression that the companies had a stake in the purchasers’ success and in finding good locations.
The companies employed various types of sales representatives, including fronters, closers, and references. A fronter spoke to potential purchasers when the prospective purchasers initially contacted the company in response to an advertisement. A closer subsequently spoke to potential purchasers to finalize deals. References spoke to potential purchasers about the financial success they purportedly had experienced since purchasing one of the business opportunities. The companies also employed locators, who were typically characterized by the sales representatives as third parties who worked with the companies to find high-traffic locations for the prospective purchaser's merchandise display racks.
Rosales, using aliases, was a fronter for USA Beverages, a fronter and reference for Twin Peaks, a fronter and reference for Cards-R-Us, a fronter, locator and reference for Premier Cards, a locator for Coffee Man, and a locator for Powerbrands.
Each of the companies was registered as a corporation and rented office space to make it appear to potential purchasers that its operations were fully in the United States. USA Beverages was registered as a Florida and New Mexico corporation and rented office space in Las Cruces, N.M. Twin Peaks was registered as a Florida and Colorado corporation and rented office space in Fort Collins, Colo., and Cards-R-Us was registered as a Nevada corporation and rented office space in Reno, Nev. Premier Cards was registered as a Colorado and Pennsylvania corporation and rented office space in Philadelphia, and The Coffee Man was registered as a Colorado corporation and rented office space in Denver. Powerbrands was registered as a Wisconsin corporation and rented office space in Glendale, Wisconsin and Palm Beach Gardens, Fla.
“Fraudulent business opportunity sellers must realize that financial fraud victimizing Americans will be prosecuted vigorously, even if the schemers conduct their fraudulent operations from abroad,” said Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida. “Increased international law enforcement cooperation eliminates safe havens for those who cheat American citizens from overseas.”
“ The success of this investigation shows that the U.S. Postal Inspection Service is committed to working with the Department of Justice and our law enforcement partners, both foreign and domestically, to protect the American consumer from the predatory nature of business opportunity schemes ,” said Tony Gomez, Acting U.S. Postal Inspector in Charge in Miami.
Principal Deputy Assistant Attorney General Delery commended the investigative efforts of the Postal Inspection Service. The case is being prosecuted by Assistant Director Jeffrey Steger and trial attorney Alan Phelps with the U.S. Department of Justice Consumer Protection Branch.
Dual U.S. Costa Rican Citizen Pleads Guilty in Connection with Costa Rica-Based Business Opportunity Fraud VenturesRead the Press Release
Operation Had Connections to Florida, New Mexico, Colorado, Nevada, Wisconsin and Pennsylvania
Sean Rosales pleaded guilty in Miami federal court to one count of an indictment pending against him, charging conspiracy to commit mail and wire fraud, the Justice Department and the U.S. Postal Inspection Service announced today.
Rosales, a dual United States and Costa Rican citizen charged in connection with the operation of a series of fraudulent business opportunities, was arrested in Chicago late last year following his indictment by a federal grand jury in Miami on Nov. 29, 2011. Rosales was arrested based on charges that he and his co-conspirators purported to sell beverage and greeting card business opportunities, including assistance in establishing, maintaining and operating such businesses. The indictment is part of the government’s continued nationwide crackdown on business opportunity fraud.
Eleven other individuals have been charged in connection with business opportunity fraud ventures based in Costa Rica. Rosales is the eighth of those individuals to be convicted in the United States.
“Fraudulent business opportunity sellers must realize that financial fraud victimizing Americans will be prosecuted vigorously, even if the schemers conduct their fraudulent operations from abroad,” said Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida. “Increased international law enforcement cooperation eliminates safe havens for those who cheat American citizens from overseas.”
“The Department of Justice is committed to cracking down on financial fraud, including business opportunity fraud schemes,” said Stuart F. Delery, Principal Deputy Assistant Attorney General for the Justice Department’s Civil Division. “That is why we will continue to prosecute those who would deprive innocent, hardworking Americans of their hard-earned money by offering phony business opportunities.”
Beginning in May 2005, Rosales and his coconspirators fraudulently induced purchasers in the United States to buy business opportunities in USA Beverages Inc., Twin Peaks Gourmet Coffee Inc., Cards-R-Us Inc., Premier Cards Inc., The Coffee Man Inc. and Powerbrands Distributing Company. The business opportunities cost thousands of dollars each, and most purchasers paid at least $10,000. Each company operated for several months, and after one company closed, the next opened. The various companies used bank accounts, office space and other services in the Southern District of Florida and elsewhere.
Rosales, using aliases, participated in a conspiracy that used various means to make it appear to potential purchasers that the businesses were located entirely in the United States. In reality, Rosales operated out of Costa Rica to fraudulently induce potential purchasers in the United States to buy the purported business opportunities.
The companies made numerous false statements to potential purchasers of the business opportunities, including that purchasers would likely earn substantial profits; that prior purchasers of the business opportunities were earning substantial profits; that purchasers would sell a guaranteed minimum amount of merchandise, such as greeting cards and beverages; and that the business opportunity worked with locators familiar with the potential purchaser’s area who would secure or had already secured high-traffic locations for the potential purchaser’s merchandise stands. Potential purchasers also were falsely told that the profits of some of the companies were based in part on the profits of the business opportunity purchasers, thus creating the false impression that the companies had a stake in the purchasers’ success and in finding good locations.
The companies employed various types of sales representatives, including fronters, closers, and references. A fronter spoke to potential purchasers when the prospective purchasers initially contacted the company in response to an advertisement. A closer subsequently spoke to potential purchasers to finalize deals. References spoke to potential purchasers about the financial success they purportedly had experienced since purchasing one of the business opportunities. The companies also employed locators, who were typically characterized by the sales representatives as third parties who worked with the companies to find high-traffic locations for the prospective purchaser's merchandise display racks.
Rosales, using aliases, was a fronter for USA Beverages, a fronter and reference for Twin Peaks, a fronter and reference for Cards-R-Us, a fronter, locator and reference for Premier Cards, a locator for Coffee Man, and a locator for Powerbrands.
Each of the companies was registered as a corporation and rented office space to make it appear to potential purchasers that its operations were fully in the United States. USA Beverages was registered as a Florida and New Mexico corporation and rented office space in Las Cruces, N.M. Twin Peaks was registered as a Florida and Colorado corporation and rented office space in Fort Collins, Colo., and Cards-R-Us was registered as a Nevada corporation and rented office space in Reno, Nev. Premier Cards was registered as a Colorado and Pennsylvania corporation and rented office space in Philadelphia, and The Coffee Man was registered as a Colorado corporation and rented office space in Denver. Powerbrands was registered as a Wisconsin corporation and rented office space in Glendale, Wisconsin and Palm Beach Gardens, Fla.
“The success of this investigation shows that the U.S. Postal Inspection Service is committed to working with the Department of Justice and our law enforcement partners, both foreign and domestically, to protect the American consumer from the predatory nature of business opportunity schemes,” said Tony Gomez, Acting U.S. Postal Inspector in Charge in Miami.
Principal Deputy Assistant Attorney General Delery commended the investigative efforts of the Postal Inspection Service. The case is being prosecuted by Assistant Director Jeffrey Steger and trial attorney Alan Phelps with the U.S. Department of Justice Consumer Protection Branch.
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.
Disbarred New Jersey Attorney Sentenced to Three Years in Prison for Failing to Report Tax Preparation IncomeRead the Press Release
Evasion Resulted in Tax Loss of More Than $1 Million
CAMDEN, N.J. – A tax preparer and disbarred New Jersey lawyer was sentenced today to 36 months in prison for submitting false tax returns or failing to file returns for five years, resulting in a tax loss to the government of more than $1.1 million, U.S. Attorney Paul J. Fishman announced.
Joseph Gallagher, 69, of Rutherford, N.J., previously pleaded guilty before U.S. District Judge Noel L. Hillman to an Information charging him with one count of tax evasion. Judge Hillman imposed the sentence today in Camden federal court.According to documents filed in this case and statements made in court:
For at least five years, Gallagher used a consulting company – established at Gallagher’s direction and purportedly operated by another person – to evade income taxes by having his income from working as a tax preparer deposited into the company’s bank account. Gallagher filed income tax returns with the IRS, failing to report $590,513, $600,157 and $682,373 for the calendar years 2004, 2005 and 2006, respectively. Gallagher failed to file any income tax return at all for calendar years 2007 and 2008, failing to report $715,694 and $770,445 for those years. In total, Gallagher admitted failing to report $3,359,182 in taxable income to the IRS, resulting in a tax loss to the government of $1,198,196.
In addition to the prison term, Judge Hillman sentenced Gallagher to two years of supervised release and ordered him to pay a $60,000 fine. He is also required to pay his more than $1 million in outstanding taxes to the IRS, plus interest and penalties.
U.S. Attorney Fishman credited special agents of IRS – Criminal Investigation, under the direction of Acting Special Agent in Charge Shantelle P. Kitchen, with the investigation that resulted in today’s sentence.
The government is represented by Jacob T. Elberg, Deputy Chief of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark.
13-128Defense counsel: Brian Neary Esq., Hackensack, N.J.
Cordova Man Sentenced to 12 Years Following $700,000 Income Tax Fraud, Identity Theft SchemeRead the Press Release
Memphis, TN – Jeremy Lasane, 25, of Cordova, TN, was sentenced today to 12 years in prison for stealing government funds through the filing of false income tax returns and identity theft, announced Edward L. Stanton III, United States Attorney for the Western District of Tennessee.
# # # #
According to the indictment and information revealed at sentencing, between September 4, 2009 and October 28, 2011, Lasane and other individuals obtained the names, dates of birth, and Social Security numbers of individuals without their knowledge or consent, and thereafter filed taxes claiming refunds using this information. He and others then opened bank accounts and directed the U.S. Department of Treasury tax refunds associated with the false tax returns to be electronically deposited into these accounts.
Lasane paid individuals to obtain the victims’ personal identifiers and used this information to electronically file more than 240 false tax returns. This criminal behavior enabled him to fraudulently obtain over $700,000 during the scheme. The investigation revealed that during his scheme, Lasane spent large sums of money at Tunica casinos and bought several luxury vehicles, including a Maserati and Mercedes-Benz. These vehicles were forfeited to the United States Government.
Chief District Judge Jon P. McCalla ordered Lasane to pay restitution in the amount of $791,616 and further ordered him to serve three years of supervised release. There is no parole in the federal system.
The case was investigated by the United States Secret Service and IRS-Criminal Investigative Division. The case was prosecuted by Assistant United States Attorney Stephen Hall on behalf of the government.Columbia Man Sentenced for Illegal FirearmRead the Press Release
JEFFERSON CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Columbia, Mo., man was sentenced in federal court today for illegally possessing a firearm.
James Douglas Cheek, 31, of Columbia, was sentenced by U.S. District Judge Beth Phillips to five years and three months in federal prison without parole.
On Oct. 4, 2012, Cheek pleaded guilty to being a felon in possession of a firearm. Cheek admitted that he was in possession of an FEG .45-caliber pistol on March 13, 2012. Law enforcement officers found Cheek, apparently asleep, sitting in the driver’s seat of a reported suspicious vehicle that was parked partially in a convenience store’s parking lot and partially in a yard. Cheek was arrested on outstanding warrants and officers found the loaded pistol on the driver’s side floor board of the car.
Under federal law, it is illegal for anyone who has been convicted of a felony to be in possession of any firearm or ammunition. Cheek has prior felony convictions for assault, unlawful use of a weapon and leaving the scene of a motor vehicle accident.
This case is being prosecuted by Supervisory Assistant U.S. Attorney Lawrence E. Miller. It was investigated by the Boone County, Mo., Sheriff’s Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives.Citizen of Jamaica Sentenced to Federal Prison for Passport Fraud and Identity Theft OffensesRead the Press Release
March 20, 2013David B. Fein, United States Attorney for the District of Connecticut, announced that TASHIANY MARTIN, 38, was sentenced today by Senior United States District Judge Warren W. Eginton in Bridgeport to two years and one day of imprisonment. On December 20, 2012, a jury found MARTIN guilty of one count of making false statements in a passport application and one count of aggravated identity theft.
According to the evidence introduced during the trial, in 2002, MARTIN, a citizen of Jamaica, obtained a New York driver’s license and a New York birth certificate by using the name of a former friend. In 2008, MARTIN used those documents to apply for a United States passport at the Connecticut Passport Agency in Norwalk.
The evidence at trial further revealed that MARTIN also used her friend’s identity in 2002 when she successfully applied for and obtained a U.S. passport and, in 2003, when she successfully applied for and obtained a job as a licensed practical nurse at a Rochester, N.Y. nursing home. MARTIN’s friend was a licensed practical nurse, but MARTIN was not.
MARTIN has been detained since her arrest on January 17, 2012. She faces deportation proceedings after she serves her prison term.
This matter was investigated by the United States Department of State, Bureau of Diplomatic Security. The case was prosecuted by Assistant United States Attorneys Henry Kopel and Ray Miller.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
[email protected]Champlin Felon Sentenced for Possessing FirearmsRead the Press Release
MINNEAPOLIS— Earlier today in federal court, a 21-year-old Champlin felon was sentenced for possessing a nine-millimeter pistol and a .44-caliber revolver. United States District Court Chief Judge Michael J. Davis sentenced Deandre Franklin to 60 months in federal prison on one count of being a felon in possession of a firearm. Franklin was indicted on July 23, 2012, and pleaded guilty on November 13, 2012.
In his plea agreement, Franklin admitted that on January 2, 2012, he traveled with two women to Bill’s Gun Shop in Robbinsdale. The women purchased .44-caliber ammunition, nine-millimeter ammunition, and ammunition magazines. Minneapolis police later stopped their car in north Minneapolis and found two firearms in the vehicle, a Glock, nine-millimeter pistol and a Charter Arms, .44-caliber revolver. One of the guns was found on Franklin and the other was discovered under his seat.
Because he is a felon, Franklin is prohibited under federal law from possessing firearms at any time. He was previously convicted of second-degree drug possession in Hennepin County in 2011.This case was the result of an investigation conducted by the Safe Streets Task Force. Safe Streets is a FBI-sponsored task force that focuses on combating violent street crime as well as gang and drug trafficking offenses. The case was prosecuted by Assistant U.S. Attorney LeeAnn K. Bell.
Bradford Man Sentenced to 150 Months in Jail for ArsonRead the Press Release
ERIE, Pa. - A former resident of Bradford, Pennsylvania, has been sentenced in federal court to 150 months in jail and ordered to make restitution in the amount of$2,887.42 on his conviction of violating federal arson laws, United States Attorney David J. Hickton announced today.
United States District Judge Sean J. McLaughlin imposed the sentence on Damon Leroy Kayes, 43.
According to information presented to the court, Kayes damaged Players Downtown bar at 12 Mechanic Street, Bradford, Pennsylvania by throwing a lit Molotov cocktail at the front door of the establishment, which at the time was crowded with patrons.
Prior to imposing sentence, Judge McLaughlin stated that Kayes had a serious criminal history involving multiple violent offenses. Judge McLaughlin also noted the serious risk of harm to the bar's patrons that Kayes entirely disregarded.
Assistant United States Attorney Christian A. Trabold prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Bureau of Alcohol, Tobacco, Firearms and Explosives and the City of Bradford Police Department for the investigation leading to the successful prosecution of Kayes.
Bergen County, N.J., Man Sentenced to 54 Months in Prison for Conspiring to Defraud Investors of $1 Million Through Bogus InvestmentsRead the Press Release
NEWARK, N.J. – The former New Jersey-based operator of Suarez Investment and Development LLC was sentenced today to 54 months in prison for his role in a conspiracy that bilked victims out of $1 million through fraudulent investment schemes, U.S. Attorney Paul J. Fishman announced.
Joseph Suarez, 48, of Woodcliff Lake, N.J., previously pleaded guilty before U.S. District Judge William J. Martini to an Information charging him with one count of conspiracy to commit wire fraud. Judge Martini imposed the sentence today in Newark federal court.According to documents filed in this case and statements made in court:
Suarez conspired with others, including Katherine Ferro, 38, of Port St. Lucie, Fla., a disbarred attorney, to commit wire fraud by inducing their victims to invest a total of $1 million dollars into various fraudulent schemes. Suarez admitted he convinced an individual to invest more than $300,000 in connection with certain business ventures, including a credit card factoring scheme. Credit card factoring is a form of accounts receivable where businesses can receive cash in advance of future credit card receipts.
Suarez also admitted that he and Ferro convinced an individual to invest approximately $222,000 in a plan to purchase D2 diesel fuel from foreign sources and resell the fuel at a profit. Suarez admitted that, contrary to the representations he and Ferro made regarding how the funds would be used, nearly all of the $222,000 wired into Ferro’s attorney trust account was depleted by transferring large amounts into other accounts for their personal use.
Suarez and Ferro also used false representations to convince additional victims to invest approximately $500,000 in the D2 diesel fuel purchase and sale plan. Ferro executed a written escrow agreement with several of these additional victims, which stated, among other things, that the investment would remain in Ferro’s attorney trust account for the duration of the investment period. Days after the victims wired the $500,000 investment into accounts controlled by Suarez and Ferro, Ferro transferred substantially all of the funds into other accounts.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Acting Special Agent in Charge David Velazquez; and IRS – Criminal Investigation, under the direction of Acting Special Agent in Charge Shantelle P. Kitchen, for the investigation leading to today’s sentence. He also thanked the U.S. Securities and Exchange Commission’s New York Regional Office, under the leadership of Director Andrew Calamari; and the Bergen County Prosecutor’s Office, under the direction of John L. Molinelli, for their assistance.In addition to the prison term, Judge Martini sentenced Suarez to serve two years of supervised release. Suarez will also be required to pay restitution in an amount to be determined.
Ferro pleaded guilty in March 2012 to wire fraud and awaits sentencing.The government is represented by Assistant U.S. Attorney Mala Ahuja Harker of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF), which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
13-129Defense counsel: Curtis LaForge Esq., Saddle Brook, N.J.
Bergen County, N.J., Man Admits Downloading Images and Videos of Child Sexual AbuseRead the Press Release
NEWARK, N.J. – A Bergen County, N.J., man today admitted knowingly receiving over the Internet images and videos of child sexual abuse, U.S. Attorney Paul J. Fishman announced.
Joseph Anthony Amari, 81, of Fair Lawn, N.J., pleaded guilty before U.S. District Judge Katharine S. Hayden in Newark federal court to Count One of an Indictment charging him with receipt of child pornography.
Amari, who was initially federally charged by complaint in 2009, is currently serving a sentence in state prison following a separate state conviction for endangering the welfare of two minors. The court stayed the federal prosecution pending the resolution of the state charges.
Amari admitted during his guilty plea that he used peer-to-peer file-sharing software to download images and videos in February 2007 of children being sexually abused.
Amari faces a mandatory minimum penalty of five years in prison and a maximum potential penalty of 20 years, as well as a $250,000 fine. Sentencing is currently scheduled for May 13, 2013.
U.S. Attorney Fishman credited the FBI Cyber Crimes Task Force in New Jersey, under
the direction of Acting Special Agent in Charge David Velazquez in Newark, with the investigation leading to today’s plea. He also thanked the Bergen County Prosecutor’s Office, under the direction of Prosecutor John L. Molinelli, and the Fair Lawn Police Department,
under the direction of Chief of Police Erik Rose.The government is represented by Assistant U.S. Attorneys Jane H. Yoon and Shirley U. Emehelu of the U.S. Attorney’s Office Criminal Division in Newark.
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Defense counsel: Chester Keller, Esq., Newark, N.J.
Amari Indictment
Bennington Man SentencedRead the Press Release
Used USDA Inspection Legend Fraudulently
Albany, New York — CRAIG ACTON, age 44, of Bennington Vermont, was sentenced today by Chief United States District Judge Gary L. Sharpe to 2 years of probation and 50 hours of community service for his fraudulent use of a United States Department of Agriculture inspection legend on meat products that he sold commercially, announced United States Attorney Richard S. Hartunian. ACTON previously entered a guilty plea on August 23, 2012.
Between January and June of 2011, in Greene County and elsewhere in New York, ACTON purchased meat products commercially, repackaged that meat using the “USDA” inspection legend stamp of another company, and then resold the meat commercially without authorization. ACTON intended to mislead the consumers who purchased his product into believing that his product was properly inspected.
United States Attorney Hartunian praised the outstanding efforts of the Department of Agriculture’s Office of Inspector General and Food Safety Inspection Service in this investigation. He stated, “The public relies on the integrity of our food supply, and my office will aggressively prosecute anyone who fraudulently subverts the USDA’s important food safety regulations.”
This case was investigated by the United States Department of Agriculture’s Office of Inspector General and Food Safety Inspection Service .
Anti-Government Movement Member Sentenced to over Eight Years in Prison for Conspiracy and Money Laundering CrimesRead the Press Release
LAS VEGAS, Nev. – A member of an anti-government movement known as the “Sovereign Movement,” was sentenced today to 98 months in prison followed by three years of supervised release, and ordered to forfeit $1.29 million in assets and pay $95,782 in restitution for his conviction on conspiracy and money laundering crimes, announced Daniel G. Bogden, United States Attorney for the District of Nevada.
Shawn Rice, 50, of Seligman, Ariz., was sentenced by U.S. District Judge James C. Mahan. Rice was convicted by a jury in July 2012 of one count of conspiracy to commit money laundering, 13 counts of money laundering, and four counts of failure to appear.
“Persons who commit financial crimes victimize organizations, government and the public,” said U.S. Attorney Bogden. “Our office and our federal partners will work jointly with local and state law enforcement to ensure that these persons are caught and prosecuted.”
“The FBI deserves a lot of credit for bringing this case to fruition,” said Paul Camacho, Special Agent in Charge of IRS Criminal Investigation for Nevada. “There was an element of greed to Mr. Rice’s crimes. As with most cases we see, it is greed that gets people in trouble.”
According to the evidence introduced at trial, from about March 2008 to March 2009, Rice and co-defendant Samuel Davis, 57, of Council, Idaho, laundered approximately $1.3 million of monies that they thought were from the theft and forgery of stolen official bank checks. Rice and Davis laundered the monies through a nominee trust account controlled by Davis and through an account of a purported religious organization controlled by Rice. Davis and Rice took approximately $74,000 and $22,000, respectively, in fees for their money laundering services.
Rice and Davis were originally charged in March 2009. Rice failed to make required court appearances in the case on March 8 and March 9, 2010, and was a fugitive for almost two years before he was re-arrested in December 2011.
Davis pleaded guilty and was sentenced in October 2011 to 57 months in prison. Davis failed to self-report to federal prison, and was arrested in August 2012 in Stanley, South Dakota. Davis was charged and convicted of violating his conditions of release and failing to self-surrender, and sentenced to an additional eight months in prison, consecutive to the 57 months imposed in October 2011.
Davis and Rice are heavily involved in the “Sovereign Movement,” an extreme anti-government organization whose members attempt to disrupt and overthrow government and other forms of authority by using “paper terrorism” tactics, intimidation and harassment, and violence. Members believe they do not have to pay taxes and believe the federal government deceived Americans into obtaining social security cards, driver’s licenses, car registrations, and wedding licenses, etc., and that if these contracts are revoked; persons are “sovereign citizens.” Members of the sovereign movement also believe that U.S. currency is invalid. They widely use fictitious financial instruments such as fraudulent money orders, personal checks, and sight drafts, and participate in “redemption” schemes where the fictitious financial instruments are used to pay creditors. Davis is a national leader of the movement, traveling nationwide to teach different theories and ideologies of the movement. Rice allegedly claims that he is a lawyer and Rabbi, and uses his law school education and businesses to promote his sovereign ideas and to gain credibility in the community.
The case was investigated by the FBI-led Nevada Joint Terrorism Task Force, which also includes ATF, Henderson Police Department, IRS Criminal Investigation, Las Vegas Metropolitan Police Department, Nevada Department of Public Safety, North Las Vegas Police Department, and other federal, state and local law enforcement agencies in Nevada, Council, Idaho, and Flagstaff and Seligman, Arizona.
The case is being prosecuted by Assistant U.S. Attorneys J. Gregory Damm and Nicholas D. Dickinson.
Today's announcement is part of efforts underway by President Obama's Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys' offices and state and local partners, it's the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
Alleged Al-Qaeda Operative Charged in New York for Terrorism Offenses Against Americans OverseasRead the Press Release
BROOKLYN, N.Y. – A six-count indictment was unsealed today in United States District Court for the Eastern District of New York charging Ibrahim Suleiman Adnan Adam Harun, also known as “Spin Ghul,” with conspiracy to murder American military personnel in Afghanistan, conspiracy to bomb American diplomatic facilities in Nigeria, conspiracy to provide material support to al-Qaeda, providing material support to al-Qaeda, and related firearms and explosives counts.1 The indictment was returned under seal by a federal grand jury sitting in Brooklyn, New York on February 21, 2012, and relates to Harun’s alleged activities in Afghanistan, Pakistan, and Africa beginning in 2001.
The charges were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; John Carlin, Acting Assistant Attorney General for National Security; George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office; and Raymond W. Kelly, Commissioner, New York City Police Department.
According to court documents, Harun, who was born in Saudi Arabia but claims citizenship in Niger, was extradited from Italy to the United States on October 4, 2012, and arraigned in a sealed proceeding in federal court in Brooklyn, New York on October 5, 2012. The case is scheduled for a public status conference before United States District Judge Edward R. Korman at the United States Courthouse, 225 Cadman Plaza East, Brooklyn, N.Y, on March 22, 2013 at 2:30 p.m.
Harun is charged with crimes related to his alleged terrorist activities on behalf of al-Qaeda beginning in 2001. According to the indictment and other court documents, beginning in 2001, the defendant traveled from Saudi Arabia to Afghanistan with the intent to fight violent jihad. He arrived in Afghanistan shortly before the September 11, 2001 attacks. He then joined al-Qaeda, received military-type training at al-Qaeda training camps, and ultimately fought against United States and Coalition forces in Afghanistan with an al-Qaeda fighting group based in Pakistan. According to the indictment, Harun allegedly attempted to kill United States military personnel in Afghanistan between 2002 and 2003. In 2003, in Pakistan, Harun received further al-Qaeda training and traveled to Africa with the intent to conduct attacks on United States diplomatic facilities in Nigeria. While in Nigeria, Harun allegedly conspired with others to bomb such facilities.
According to the indictment and other documents, after the arrest of a co-conspirator, the defendant traveled to Libya, en route to Europe, but was apprehended in early 2005. The defendant then remained in Libyan custody until June 2011, when he was released by the Libyan government. He was then arrested by Italian authorities after assaulting officers on board a refugee ship bound for Italy. As noted, the defendant was indicted in the United States on February 21, 2012, and charged with (1) conspiring to murder United States nationals; (2) conspiring to bomb United States government facilities; (3) conspiring to provide material support to al-Qaeda; (4) providing material support to al-Qaeda; (5) using firearms in furtherance of crimes of violence; and (6) using explosives in furtherance of one or more felonies.
On July 5, 2012, the Naples Court of Appeals found the defendant extraditable to face the charges in the indictment pending against him in U.S. federal court, pursuant to the bilateral extradition treaty between the United States and Italy. On September 14, 2012, the Italian Minister of Justice ordered the defendant extradited. Federal agents took the defendant into custody in Italy on October 4, 2012, and he arrived in the United States on that same day.
If convicted of all the charges in the indictment, Harun faces a maximum possible sentence of life in prison.
“As alleged in the indictment, the defendant was a prototype al-Qaeda operative, trained by al-Qaeda in terrorist tradecraft, deployed to fight American servicemen, and dispatched to commit terrorist attacks throughout the world,” said United States Attorney Lynch. “Whether they try to attack our servicemen on the battlefield, or scheme to kill our diplomats and citizens in embassies abroad, terrorists will find no refuge. The United States will use every tool at our disposal to protect our nation’s security and stop terrorist attacks before they happen.” Ms. Lynch expressed her gratitude to the law enforcement personnel who took part in the investigation, including Department of Defense Army investigators. She also thanked the Italian Ministry of Justice, the Prosecutor’s Office in Palermo, Italy, and other Italian police authorities in their support of the investigation and extradition of the defendant.
“The indictment unsealed today seeks to hold accountable an alleged al-Qaeda operative who targeted U.S. personnel and diplomatic facilities across two continents. His arrest and extradition to the United States are important milestones in our ongoing counterterrorism efforts. I thank the many agents, analysts and prosecutors who brought about this significant case,” said Acting Assistant Attorney General for National Security Carlin.
FBI Assistant Director-in-Charge Venizelos said, “Vowing allegiance to al-Qaeda and training to commit violent jihad are not the worst of Harun’s alleged crimes. The allegations include actually attacking U.S troops and plotting to use explosives to kill U.S. diplomats. As alleged, Harun not only intended to, but did commit acts of terrorism against Americans. Now he is subject to the American justice system. We remain committed to protecting the safety of Americans and our national security.”
Police Commissioner Kelly said, “As more al-Qaeda operatives continue to be flushed from hiding, the NYPD remains vigilant to the fact that terrorists have repeatedly since 9/11 plotted to kill more Americans. We are determined not to let that happen. I want to commend our federal partners and the U.S. Attorney in the prosecution of this important case.”
The government’s case is being prosecuted by Assistant United States Attorneys David Bitkower, Shreve Ariail and Amanda Hector of the United States Attorney’s Office for the Eastern District of New York. Assistance was provided by Alamdar Hamdani, Joseph Kaster, and Annamartine Salick of the Counterterrorism Section of the Justice Department’s National Security Division, and by William Nardini of the Justice Department’s Office of International Affairs.
The Defendant:
IBRAHIM SULEIMAN ADNAN ADAM HARUN, also known as “Spin Ghul”
Age: 43_____________________________
1 The charges contained in the indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty.
Albuquerque Man Arraigned on Federal Child Pornography ChargesRead the Press Release
ALBUQUERQUE – William Winzenburg, Jr., 27, of Albuquerque, N.M., was arraigned this morning on an indictment charging him with child pornography offenses.
During this morning’s proceedings, Winzenburg entered a not guilty plea to the fourcount indictment which charges him with two counts of receiving visual depictions of minors engaged in sexually explicit conduct and two counts of possession of a visual depiction of minors engaged in sexually explicit conduct. According to the indictment, Winzenburg received child pornography in Nov. 2012, and possessed child pornography in Feb. 2013. The four offenses allegedly occurred in Bernalillo County.
Winzenburg was arrested on Feb. 7, 2013 on a criminal complaint filed by the FBI based on an investigation initiated by the Bernalillo County Sheriff’s Office (BCSO) in Nov. 2013, after receiving information from the National Center for Missing and Exploited Children that that a specific IP address was being used to receive child pornography. According to the criminal complaint, after the investigation revealed that the IP address was subscribed to Winzenburg, on Feb. 7, 2013, the FBI and BCSO executed a search warrant at Wenzenburg’s residence and seized computers and computer-related media which allegedly contained child pornography.
Winzenburg has been in federal custody since his arrest and remains detained pending trial, which has yet to be scheduled.
If convicted, Winzenburg faces a maximum penalty of not less than 15 years or more than 40 years in prison on each of the two receipt of child pornography charges. If convicted on the possession of child pornography charges, Winzenburg faces a maximum penalty of not less than 10 years or more than 20 years in prison. The sentencing exposure on the child pornography charges is enhanced as a result of Winzenburg’s prior sexual abuse conviction.
The case was investigated by the FBI, BCSO and the New Mexico Regional Computer Forensic Laboratory, and is being prosecuted by Assistant U.S. Attorney Charlyn E. Rees. It was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice (DOJ) to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and DOJ’s Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/.
The Operation also was brought as a part of the New Mexico Internet Crimes Against Children (ICAC) Task Force’s mission, which is to locate, track, and capture Internet child sexual predators and Internet child pornographers in New Mexico. There are 64 federal, state and local law enforcement agencies associated with the ICAC Task Force, which is funded by a grant administered by the New Mexico Attorney General’s Office. Anyone with information relating to suspected child predators and suspected child abuse is encouraged to contact federal or local law enforcement.
Charges in indictments and criminal complaints are merely accusations. All criminal defendants are presumed innocent unless proven guilty beyond a reasonable doubt.
10 Linked to Network of Marijuana Grow Houses Across Three Southland Counties Arrested on Federal Drug Trafficking ChargesRead the Press Release
RIVERSIDE, California – Federal and state authorities this morning arrested 10 defendants charged in a federal criminal complaint that accuses them of participating in a wide-ranging drug conspiracy that operating marijuana grow houses across Los Angeles, Riverside and San Bernardino counties.
As part of the investigation led by the Drug Enforcement Administration, authorities this morning arrested 10 out of 11 people named in the complaint and executed search warrants at 26 locations – which includes 15 grow houses – stretching from Arcadia to Corona to Fontana. One defendant remains a fugitive who is being sought by authorities. During this morning’s operation, authorities seized more than $250,000 in cash, seven guns (including an assault rifle) and more than 8,000 marijuana plants.
A 124-page affidavit in support of the criminal complaint outlines an investigation into a narcotics trafficking ring allegedly led by Arcadia resident Raymond Lam. The drug trafficking organization purchased or leased single-family residences, which were converted to indoor farms with the sole purpose of growing marijuana. Each house contained industrial-size marijuana growing operations that contained, on average, 1,000 to 2,000 marijuana plants.
The marijuana grow houses exhibited identical arrangements that included specific types of hydroponic growing equipment and stolen electricity obtained through sophisticated bypasses of utility meters. After the marijuana was harvested, it was sold throughout California and across the United States. Previously during the two-year investigation, authorities shut down 15 grow houses and seized nearly 15,000 marijuana plants, nearly 1,000 pounds of harvested marijuana and four firearms.
The 11 defendants named in the criminal complaint filed in United States District Court in Riverside are charged with conspiracy to manufacture, to distribute, and to possess with intent to distribute marijuana. The 10 defendants arrested this morning are:
Raymond A. Lam, who also used the name “Nam A. Lam,” 42, of Arcadia, accused of being the overall leader of the drug trafficking organization and overseeing the acquisition of residences that were converted into full-scale, industrial-type marijuana grows;Simon Lam, 32, of Arcadia, a top lieutenant to Raymond Lam;
Ken Ho, also known as “Ken Lam,” 33, of Arcadia, a top lieutenant to Raymond Lam;
San S. Voong, also known as “Chen Sheng Wang,” 35, of Arcadia, another top lieutenant to Raymond Lam;
Phieu Tran, 35, of El Monte;
Augustine Bazan Camacho, 41, of Pomona, allegedly a veteran “plant tender” who was responsible for maintaining many of the grow houses;
Thanh Van Phu, 33, of El Monte;
Luc Kai Phoung, who is also known as “Wong Fong,” “Al Fong “ and “Na Na,” 50, of Rosemead, who allegedly built the electrical and utility meter by-pass systems used at the grow houses;
Steven Huytu Lam, 52, of Walnut; and
Li Ya Si, 42, of Temple City.
These 10 defendants are expected to make their initial court appearances this afternoon in federal court in Riverside.
The final defendant named in the criminal complaint – Andy Tran, who used several aliases, including “Long Kim Tank,” 39, of Monterey Park, and allegedly was a top lieutenant to Raymond Lam – is a fugitive currently being sought by authorities.
The criminal complaint outlines several seizures made during the investigation. For example, special agents with the DEA and officers with the Riverside County Sheriff’s Department executed a search warrant on Cedar Creek Road in Eastvale on February 10, 2012, when they discovered a residence that had been completely converted into a sophisticated marijuana grow house. Inside the residence, investigators found Camacho hiding under a hydroponic bin on the second floor of the residence. During the search, they seized more than 1,800 marijuana plants and more than 50 pounds of processed marijuana. There was a sophisticated electrical bypass system that was used to divert from the meter the electricity used to power the ballasts and lights to grow the marijuana plants.
In another search in Eastvale, this one on a residence on Bluebell Street in November 2012, authorities discovered that the entire residence had been converted into industrial-sized marijuana grow with 857 marijuana plants. Approximately 43 pounds of marijuana were found inside the residence.
Two months ago, during a search of a residence on Village Meadow in Riverside, authorities discovered another industrial-sized marijuana grow that had 576 marijuana plants.
During this morning’s takedown, search warrants were executed at locations in Eastvale, Corona, Fontana, Riverside, Rancho Cucamonga, Chino, Diamond Bar, El Monte, Arcadia, Los Angeles (90015), Monterey Park, Walnut and Temple City.
A criminal complaint contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty in court.
The narcotics conspiracy charge in the indictment carries a statutory maximum penalty of life – and a mandatory minimum sentence of 10 years – in federal prison.
The investigation into drug trafficking organization allegedly run by Raymond Lam was conducted by the Drug Enforcement Administration, the Riverside County Sheriff’s Department and the San Bernardino County Sheriff’s Department.
The following agencies provided substantial assistance during this morning’s takedown: the Riverside Police Department; the El Monte Police Department; the Fontana Police Department; the Chino Police Department; IRS - Criminal Investigation; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Los Angeles County Sheriff’s Department; the United States Marshals Service; U.S. Immigration and Customs Enforcement’s Homeland Security Investigations; the Federal Bureau of Investigation; the Los Angeles Police Department; and the Arcadia Police Department.
Release No. 13-040
Tuesday 19 March 2013
Two Plead Guilty in Trenton, N.J., Narcotics RingRead the Press Release
TRENTON, N.J. – A Mercer County, N.J., man today admitted his role in a conspiracy to distribute oxycodone pain pills, U.S. Attorney Paul J. Fishman announced. An Atlantic City, N.J., man also admitted to engaging in related drug transactions by obtaining oxycodone pills and to being a felon in possession of a firearm.
Giuseppe A. Scordato, 47, of Hamilton, N.J, pleaded guilty to an Information charging him with one count of conspiracy to distribute and possess with intent to distribute oxycodone. Eugene Brown, 71, of Atlantic City, NJ, also pleaded guilty to an Information charging him with one count of distribution of oxycodone and one count of being a felon in possession of a firearm. Scordato and Brown entered their guilty pleas before U.S. District Judge Michael A. Shipp in Trenton federal court.
According to documents filed in this case and statements made in court:
Between November 2011 and July 2012, Scordato obtained oxycodone-based prescription pain pills from Joseph A. “JoJo” Giorgianni, Mary Manfredo and Charles Hall III from a restaurant on Martin Luther King Boulevard in Trenton (“JoJo’s Steakhouse”) and a clubhouse located next door to JoJo’s Steakhouse (“Giorgianni’s Clubhouse”). He would sell those pills and remit the proceeds to Giorgianni and Manfredo at JoJo’s Steakhouse in exchange for a portion of the proceeds from those sales.Eugene Brown admitted to engaging in related drug transactions. On May 12, 2012, Brown traveled from Atlantic City to Trenton to provide Endocet® pills, an oxycodone-based pain pill, to Charles Hall III in exchange for payment. Brown also admitted to previously giving Endocet® pills to Hall in Atlantic City and Camden, N.J. Brown, who previously had been convicted of a felony, admitted to possessing a .22 caliber semi-automatic pistol on July 20, 2012.
The drug conspiracy and distribution charges are punishable by a maximum potential penalty of 20 years in prison and a $1 million fine. The offense of being a felon in possession of a firearm is punishable by 10 years in prison and a $250,000 fine. Sentencing for Scordato is scheduled for June 25, 2013, and for Brown, June 26, 2013.
U.S. Attorney Fishman credited special agents of the FBI’s Trenton Resident Agency, Newark Field Office, under the direction of Acting Special Agent in Charge David Velazquez, for the investigation leading to today’s guilty pleas.
The government is represented by Assistant U.S. Attorneys Eric W. Moran and Matthew J. Skahill of the U.S. Attorney’s Office Special Prosecutions Division in Trenton and Camden, respectively.
13-127
Defense counsel:
Scordato: Scott Krasny Esq., West Trenton, N.J.
Brown: Bruce Throckmorton Esq., TrentonScordato, Giuseppe Information
Brown, Eugene InformationTwo Co-Conspirators Sentenced for Mortgage Fraud SchemeRead the Press Release
DENVER – Michael Jacoby, age 44, of Castle Rock, Colorado, and Derek Zar, age 30, of Commerce City, Colorado, were sentenced last Friday by visiting U.S. District Court Judge Kathryn H. Vratil to serve 108 months in prison and 63 months in prison respectively, for a mortgage fraud scheme, the U.S. Attorney’s Office, the Federal Bureau of Investigation, and IRS-Criminal Investigation announced. Following his 108-month prison sentence, Jacoby was ordered to spend 5 years on supervised release and pay $2,979,712 in restitution. Following his 63-month sentence, Zar was ordered to spend 3 years on supervised release and pay $1,417,902 in restitution.
Michael Jacoby, Derek Zar and co-conspirator Susanne Zar were found guilty by a jury on August 30, 2012. The guilty verdicts were the result of a four-week trial. Susanne Zar is scheduled to be sentenced on July 2, 2013. All were indicted by a federal grand jury in Denver on September 27, 2010. A superseding indictment was filed on September 15, 2011.
According to the indictments and testimony at trial, between January 2005 and continuing through September 2006, in the State and District of Colorado, the defendants, knowingly devised and intended to devise a scheme to defraud various financial institutions and other commercial lenders that funded residential mortgages, and to obtain moneys, funds, and other property owned by and under the custody and control of those financial institutions and commercial lenders by means of materially false and fraudulent pretenses and representations. In furtherance of the scheme, one or more of the defendants participated in real estate transactions involving 18 properties located in Colorado.
It was part of the scheme that Derek Zar and a co-defendant bought homes at purported discounted rates because they paid cash. Jacoby often lent them the cash for these initial purchases and was then was paid back with interest. Furthermore, Jacoby acted as the realtor for the sales. Derek Zar and a co-defendant usually bought the homes through limited liability companies they owned and operated and then resold these homes within a very short time period to themselves as individuals at inflated prices financed by mortgage loans. Additionally, Susanne Zar often refinanced the homes with mortgage loans based on an inflated value. Sometimes the inflated value was supported by false documentation showing a higher initial purchase price than the actual initial purchase price. The defendants also prepared and submitted and caused to be prepared and submitted applications for loans which contained various materially false and fraudulent representations.
It was further part of the scheme for the co-defendants to cause to be submitted false appraisals for some of the properties. Jacoby usually recommended an appraiser to the mortgage broker for the loan approval. He supplied the appraiser with inflated values of comparable homes or omitted information concerning the home sales so the appraiser would overvalue the current home. At closing, through a grant program, the defendants funneled money back to the home buyer who was one of the defendants. They concealed from the lenders and other parties associated with the transactions that the home buyer was receiving a kickback for buying the home.
“As the financial crisis of 2008 showed, mortgage fraud harms all Americans, not just banks and homeowners,” said U.S. Attorney John Walsh. “In this case, two people who scammed the system of millions ended up spending years in federal prison.”
“Mortgage fraud undermines public confidence in achieving the American dream and jeopardizes the well-being and stability of our financial institutions,” said FBI Denver Acting Special Agent in Charge Steve Olson. “The sentences announced today redress some of the damage caused by these defendants. The FBI will continue to work diligently to identify and investigate those who perpetrate these types of schemes.”
“Mortgage fraud directly threatens the financial health of the communities in which we live; IRS CI will work diligently with our law enforcement partners to insure mortgage fraud is vigorously investigated and individuals are brought to justice,” said Stephen Boyd, Special Agent in Charge, IRS Criminal Investigation, Denver Field Office.
The case was investigated by special agents with the Federal Bureau of Investigation and IRS-Criminal Investigation.
The case was prosecuted by Assistant U.S. Attorneys Suneeta Hazra and Jamie Mendelson.
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Trio Charged in Armed RobberyRead the Press Release
PHILADELPHIA - Three Philadelphia men are charged with conspiracy and Hobbs Acts robbery in a superseding indictment filed yesterday, announced United States Attorney Zane David Memeger. Marcus Jones, 23, Jonte King, 22, and Maleek Brown, 22, are charged with planning and carrying out the March 14, 2012 armed robbery of the Peralta Grocery Store, located at 6935 Dicks Avenue, Philadelphia. According to the indictment, Brown acted as the getaway driver while Jones and King, brandishing firearms, robbed the store. The indictment further charges Jones and King with the March 24, 2012 armed robbery of the Golden Kingdom II Restaurant, located at 7100 Elmwood Avenue, Philadelphia. The indictment further charges Jones with the March 22, 2012 armed robbery of Aya’s Pizza, located at 7144 Elmwood Avenue, in Philadelphia.
If convicted of all charges, Jones faces a mandatory 57 years in prison up to life; King faces a mandatory 32 years in prison, up to life; Brown faces a mandatory seven years in prison up to life. Each defendant also faces possible fines, mandatory special assessments, and supervised release.
The case was investigated by the Federal Bureau of Investigation and the Philadelphia Police Department. It is being prosecuted by Assistant United States Attorney Jennifer Chun Barry.
Click here to view the indictment
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Timber Lake Man Charged with AssaultRead the Press Release
United States Attorney Brendan V. Johnson announced that a Timber Lake, South Dakota man has been charged by Information with Assault by Striking, Beating and Wounding.
Brent Biegler, age 32, was charged by Information on March 7, 2013. He appeared before U.S. Magistrate Mark A. Moreno on March 14, 2013 and pled not guilty to the Information. The maximum penalty upon conviction is 6 months in custody, a $5,000 fine, or both; restitution; and a $10 special assessment.
The charge relates to an allegation that Biegler assaulted a Timber Lake woman on September 15, 2012. The charge is merely an accusation, and Biegler is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Federal Bureau of Investigation and the Cheyenne River Sioux Tribe Law Enforcement Division. Assistant U.S. Attorney Mikal Hanson is prosecuting the case. Biegler was released on bond pending trial. A trial date has not been set.
Three Sentenced in Gift Card SchemeRead the Press Release
LYNCHBURG, VIRGINIA -- A former route driver for a shredding company, and two other associates, were sentenced today in the United States District Court for the Western District of Virginia in Lynchburg on fraud charges.
Mark Allen Mobley, 33, of Concord, Va., Sean Patrick Mixon, 40, of Lynchburg, Va., and Spencer Glenn Payne, 23, of Gladys, Va., all previously pled guilty to one count of credit card fraud for the unauthorized use of gift cards.
According to evidence presented by Assistant United States Attorney Daniel Bubar, while working on his shred route, Mobley would steal discarded but still active gift cards from the shred bins he was hired to empty at an area mail fulfillment company. He then either used these cards for his personal use or gave them to Mixon and Payne, who both accepted the gift cards knowing they were stolen.
In all, Mobley was responsible for intended financial losses in excess of $120,000. Payne caused financial losses of at least $40,000 and Mixon caused financial losses of at least $29,000. Today in District Court, Mobley was sentenced to 21 months incarceration, Payne was sentenced to six months incarceration and Mixon was sentenced to five years of supervised probation.
The investigation of the case was conducted by the United States Secret Service and the Campbell County Sheriff’s Office. Assistant United States Attorney Daniel Bubar prosecuted the case for the United States.
Thirteen Individuals Indicted in Health Care Fraud and Drug Distribution SchemeRead the Press Release
Five Doctors, Four Pharmacists, and Home Health Agency Owner among those indicted in follow-up to the Babubhai Patel case
Thirteen individuals have been charged in a large-scale health care fraud and drug distribution scheme, United States Attorney Barbara L. McQuade announced today.
McQuade was joined in the announcement by Special Agent in Charge Robert L. Corso of the Drug Enforcement Administration, Special Agent in Charge Robert D. Foley III, of the Federal Bureau of Investigation, and Lamont Pugh, Special Agent in Charge of the Inspector General of the Department of Health and Human Services.
The superseding indictment, unsealed yesterday, adds 13 new defendants and new charges to a 2011 indictment, which charged Canton Pharmacist Babubhai ‘Bob” Patel with overseeing a massive health care fraud and drug distribution ring at more than 20 pharmacies that he owned and controlled in metro-Detroit.
The 13 new defendants named in the superseding indictment include five doctors, four pharmacists, and a home health agency owner: pharmacist Mehul Patel, 34, of Canton; pharmacist Pradeep Pandya, 49, of Grand Blanc; pharmacist Vikas Sharma, 34, of Windsor; pharmacist Mukesh Khunt, 33, of Toronto; physicians Richard Utarnachitt, 71; of Clinton Township, physician Ruben Benito, 72; of Madison Heights, physician Javaid Bashir, 59, of Jackson, physician Carl Fowler, 60; of West Bloomfield, physician Rajat Daniel, 47; of West Bloomfield, home health agency owner Vinod Patel, 40; of Canton, business associate Atul Patel, 31, of Canton; marketer Anthony Macklin, a.k.a. “Jimbo,” of Detroit; and marketer
Michael Thoran, a.k.a. “Ace,” also of Detroit.The 21-count superseding indictment charges that Babubhai Patel was the owner and controller of approximately 26 Michigan pharmacies. The indictment alleges that Babubhai Patel would offer and provide kickbacks, bribes, and other illegal benefits to physicians to induce those physicians to write prescriptions for patients with Medicare, Medicaid, and private insurance. Patel would also direct that those prescriptions be presented to one of the Patel Pharmacies for billing. In exchange for their kickbacks and inducements, the physicians would write prescriptions for the patients, and bill the relevant insurers for services supposedly provided to the patients, without regard to the medical necessity of those prescriptions and services. The physicians would direct the patients to fill their prescriptions at one of the Patel Pharmacies, where Babubhai Patel and his pharmacists would bill insurers, including Medicare, Medicaid, and private insurers, for dispensing the medications, despite the fact that the medications were medically unnecessary and, in many cases, never provided. Patients were recruited into the scheme by patient recruiters or “marketers,” who would pay kickbacks and bribes to patients in exchange for the patients’ permitting the Patel Pharmacies and the physicians associated with Patel to bill their insurance for medications and services that were medically unnecessary and/or never provided.
The indictment further alleges a conspiracy to distribute controlled substances at the Patel pharmacies to facilitate the submission of false and fraudulent claims to Medicare, Medicaid, and private insurers. According to the indictment, Babubhai Patel and his associates paid physicians kickbacks for prescriptions for controlled substances for their patients, and directed those patients to fill the prescriptions at a Patel Pharmacy. The controlled substances included the Schedule II drug oxycodone (Oxycontin), the Schedule III drug hydrocodone (Vicodin, Lortab) the Schedule IV drug alprazolam (Xanax), and the Schedule V drug cough syrup with codeine. According to the indictment, prescriptions for these drugs were written outside the course of legitimate medical practice. Babubhai Patel and his pharmacists would then dispense the controlled drugs to patients without medical necessity. The distribution of controlled substances in this manner was intended, in part, as a kickback to the patients for agreeing to enable their insurance cards to be billed for medications purportedly dispensed at the Patel Pharmacies. The indictment also alleges that Babubhai Patel and his pharmacists dispensed controlled substances outside the scope of legitimate medical practice to patient recruiters or “marketers,” as a kickback for their efforts in to recruit patients into the scheme.
In addition to his pharmacies, the indictment alleges that Babubhai Patel had an ownership interest in a home health agency managed by his brother, Vinod Patel. The indictment alleges that Vinod Patel, Babubhai Patel, and others bribed physicians and other referral sources for referrals to that home health agency, and then billed the Medicare program for home health services that were medically unnecessary and never provided.
Of the 26 defendants originally charged in the indictment, six, including Babubhai Patel and four pharmacists, were convicted at a trial last summer. Fifteen additional defendants, including six pharmacists and two doctors, have pleaded guilty in the case. The five remaining defendants whose charges were renewed in the superseding indictment are set for trial on June 10, 2013. On February 1, 2013, Babubhai Patel was sentenced to 17 years imprisonment by U.S. District Judge Arthur J. Tarnow.
“Taxpayers fund Medicare and Medicaid to provide health care for needy citizens,” McQuade said. “We hope that doctors and pharmacists will take note that if they exploit these programs for personal profit, they will face serious consequences.”
Robert L. Corso, Special Agent in Charge of DEA's Detroit Field Division stated, "Confronting the illegal diversion and abuse of controlled pharmaceuticals is a top priority of DEA and our law enforcement partners. Today's indictments, particularly of the medical professionals are significant. It is alleged that these individuals abused their positions of trust and endangered the lives of countless people by illegally distributing opiate painkillers and depressants throughout southeast Michigan. This investigation makes it clear that the DEA and our partners in law enforcement will continue to investigate and bring to justice those individuals that are responsible for the illegal distribution of prescription medicines."
FBI Special Agent Foley stated, "Dishonest health care providers and pharmacists who exploit Medicare and Medicaid through fraudulent billing and other schemes will be held accountable for their crimes. The FBI remains committed to investigating this type of fraud and bringing those who abuse the system to justice."
“Schemes involving the illegal diversion and/or distribution of controlled substances go hand and hand with the fraudulent billing of Medicare and other health care programs” said Lamont Pugh III, Special Agent in Charge of the U.S. Department of Health & Human Services, Office of Inspector General – Chicago Regional Office. “The OIG and our law enforcement partners are acutely aware of the potential for those who commit health care fraud to utilize this blended approach when seeking to line their pockets with tax payer dollars. The indictments and arrests announced today illustrate our combined commitment and effort to protect the safety and well-being of the public and as well as the health care programs they rely upon.”
The investigation in this case was handled by the Drug Enforcement Administration, the Federal Bureau of Investigation, and the Department of Health and Human Services Office of Inspector General. The case is being prosecuted by Assistant U.S. Attorneys John K. Neal and Wayne F. Pratt.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Texarkana Teen Sentenced for Bank RobberyRead the Press Release
Department of Justice
Office of Public AffairsTEXARKANA, Texas – A 19-year-old Texarkana, Texas man has been sentenced to federal prison for bank robbery in the Eastern District of Texas, announced U.S. Attorney John M. Bales.
Temetrius Manning pleaded guilty on Oct. 30, 2012, to bank robbery and was sentenced to 84 months in federal prison today by U.S. District Judge Michael H. Schneider. Manning was also ordered to pay restitution in the amount of $3,490.99.According to information presented in court, on Aug. 27, 2012, Manning entered the Wells Fargo Bank in Texarkana, Texas, and presented a threatening note to a bank teller demanding money. Manning then fled the bank with the money before being apprehended shortly after. Manning admitted to the charges following his arrest. He was indicted by a federal grand jury on Sep. 12, 2012 and charged with bank robbery.
This case was investigated by the FBI and the Texarkana, Texas Police Department and prosecuted by Assistant U.S. Attorney Nathaniel C. Kummerfeld.
Tampa Woman Sentenced to More Than 9 Years in Federal Prison for Tax Fraud and Identity FraudRead the Press Release
Tampa, Florida - U.S. District Judge James D. Whittemore yesterday sentenced Iris Locklear to nine years and seven months in federal prison for mail fraud. Locklear was also ordered to pay restitution in the amount of $249,686.02, and to serve three years of supervised release, following her release from prison. As part of her sentence, the court also entered a money judgment in the amount of $8,373.29, the proceeds of the offense. Locklear pleaded guilty on December 13, 2012.
According to court documents, between January 2006 and August 2011, Locklear used the mails to execute a scheme to defraud the U.S. Treasury and a number of individual victims. The superseding indictment alleged that Locklear misappropriated others' identifying information and conducted fraudulent financial transactions to enrich herself.
This case was investigated by the Internal Revenue Service Criminal Investigation and the United States Postal Inspection Service. It was prosecuted by Assistant United States Attorney Robert T. Monk.
(Download Factual Basis )
Tampa Man Sentenced to 15 Years in Federal Prison for Tax Fraud and Identity TheftRead the Press Release
Tampa, FL - U.S. District Judge James D. Whittemore sentenced Russell B. Simmons, Jr. yesterday to 15 years in federal prison for defrauding the Internal Revenue Service and for aggravated identity theft. The court also ordered Simmons to forfeit a 2005 Bentley, more than $100,000 in jewelry, $25,000 cash, and more than $118,000 worth of fraudulently obtained tax refunds, which are traceable proceeds of the offense.
Simmons pleaded guilty to one count of wire fraud and one count of aggravated identity theft on December 11, 2012.
According to court documents, starting in the summer of 2011, investigators learned that Simmons was engaging in tax fraud at his business, Simmons Auto Sales. Simmons was selling vehicles in exchange for United States Treasury checks obtained from the filing of fraudulent federal income tax returns. The fraudulently obtained Treasury checks that Simmons received were for a much higher value than the sales price of the vehicles sold. Simmons negotiated the checks and laundered the proceeds through his business accounts. The investigation also revealed that Simmons filed fraudulent tax returns from his computer located at his business, and maintained a ledger that contained numerous personal identifiers associated with the fraudulent filings. On or about July 28, 2011, surveillance video captured Simmons using a pre-paid debit card at a Wal-Mart. Simmons used the card to conduct a transaction totaling $2,050.04, including the purchase of four $500.00 money orders. Investigators learned that on or about July 22, 2011, a tax refund in the amount of $9,997.00 was loaded onto the card. Simmons was also captured on video on or about July 27, 2011, using the same card to withdraw cash at an ATM in Gibsonton.
On or about August 7, 2011, Simmons was captured on video at a Wal-Mart store in Brandon. He made a total purchase of $11,500, including twenty-one $500.00 money orders and two $400.00 money orders. He also withdrew $200.00 in cash. Simmons utilized seven different debit cards. Each of the seven pre-paid debit cards were loaded with funds derived from the filing of fraudulent tax returns in names other than Simmons'. The fraudulently obtained tax refunds loaded onto cards totaled $76,088.20. The money orders from Wal-Mart were paid for with debit cards that were loaded with fraudulent tax refunds. When Simmons negotiated the money orders at the bank, he made them payable to Simmons Auto Sales and endorsed them with his name.
Law enforcement officials interviewed several individuals whose names appeared on the prepaid cards used by Simmons. Each of the victims stated that they did not know Russell Simmons and did not give him permission to use their identity.
In total, the Internal Revenue Service confirmed that Simmons filed approximately 120 false returns, with refunds totaling $1,176,787 for the 2010 tax year. These fraudulent filings were accepted by the IRS and resulted in the payment of refunds. Investigators further determined that Simmons made or attempted to make additional false claims with the IRS that were rejected, with refunds totaling more than $3 million. Records obtained from TurboTax show that returns filed from the IP addresses assigned to Simmons' residence and business transmitted or attempted to transmit federal income tax returns that claimed and attempted to claim approximately $8.9 million in fraudulent refunds.
This case was investigated by the U.S. Secret Service, the Internal Revenue Service Criminal Investigation, and the Tampa Police Department. It was prosecuted by Assistant United States Attorney Mandy Riedel.
This case was brought as part of Operation Rainmaker, an initiative dedicated to combating the growing problem of identity theft and the fraudulent filing of electronic tax claims. This initiative is coordinated and implemented with the cooperation of the U.S. Attorney’s Office, Middle District of Florida, U.S. Secret Service, U.S. Postal Inspection Service, Internal Revenue Service Criminal Investigation Division, Federal Bureau of Investigation, and Tampa Police Department.
Talbot County Attorney Indicted in Real Estate Investment Fraud Scheme with over $747,000 in LossesRead the Press Release
Baltimore, Maryland – A federal grand jury has indicted Aaron G. Seltzer, age 36, of Trappe, Maryland, on nine counts of wire fraud in connection with a scheme in which he converted funds intended for real estate investments to his personal use. The indictment was returned on March 14, 2013, and unsealed today upon Seltzer’s arrest.
The indictment was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge William Winter of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); and Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation.
According to the nine count indictment, Seltzer was a licensed Maryland attorney who handled real estate transactions and maintained an office in Crofton, Maryland. The indictment charges that from January 2008, through 2010, Seltzer offered victims fraudulent investment opportunities then diverted the money intended for the investments for his own benefit. The indictment alleges that Seltzer obtained a total of $747,860 through eight fraudulent transactions and seeks forfeiture of that amount as the proceeds of the scheme.
For example, Seltzer offered to sell an investor 45% of an Anne Arundel County real estate company, claiming that he owned 100% of the stock, assets and liabilities of the company, when in fact, he did not. The investor sent a total of $92,000 to Seltzer, which Seltzer allegedly used for his own benefit. During the summer of 2009, Seltzer contacted a lawyer in New York and represented that a client of Seltzer’s was seeking a business loan. According to the indictment, Seltzer proposed that the loan be secured by a mortgage on three commercial properties located in Virginia, purportedly owned by Seltzer’s client. The New York attorney assembled a group of investors to fund the loan. Seltzer presented the attorney with a fraudulent promissory note, which Seltzer falsely claimed was signed by a representative of his client. Seltzer further falsely represented that he had conducted the closing for the loan and presented the attorney with fabricated closing documents. On behalf of the investors, the attorney wired Seltzer $497,527 to fund the loan, which Seltzer allegedly diverted to his own benefit.
Seltzer faces a maximum sentence of 20 years in prison on each of the nine counts of wire fraud. Seltzer is scheduled to have his initial appearance at 3:45 p.m. today in U.S. District Court in Baltimore.
An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
Today's announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
United States Attorney Rod J. Rosenstein praised HSI Baltimore, and the FBI and for their work in the investigation and recognized the Maryland Attorney Grievance Commission for its assistance. Mr. Rosenstein thanked Assistant U.S. Attorney Leo J. Wise, who is prosecuting the case.
Staff Sergeant Pleads Guilty in Army Finance Office MisconductRead the Press Release
RALEIGH - United States Attorney Thomas G. Walker announced that in federal court today JASON BEGANY, 31, of Erwin, North Carolina, pled guilty before United States District Judge Terrence W. Boyle to converting property of another that came into his possession as a result of his employment with a department of the United States, and aiding and abetting another, all in violation of Title 18, United States Code, Sections 654 and 2.
United States Attorney Thomas G. Walker reflected, “Public corruption such as this defendant’s criminal conduct undermine our nation’s reconstruction efforts overseas and dishonors the sacrifice our military makes every day.”
According to the Criminal Information filed on February 5, 2013, and information provided in open court today, BEGANY, a Staff Sergeant in the United States Army and deployed with the 82nd Finance Battalion to Kabul, Afghanistan, was the Non-Commissioned Officer in Charge of the Camp Eggers Finance Office. Working in his position in the Finance Office, he, along with Sergeants Edwin Vando and Juan Lamboy-Rivera (both of whom previously pled guilty to the same offense), were responsible for ensuring that authorized contract payments were made to vendors, such as Abdul Wasi Faqiri Company, Ltd. who provided a variety of military apparel and equipment.
In May, 2009, a representative from Abdul Wasi Faqiri Company, Ltd., contacted the Camp Eggers Finance Office regarding a possible overpayment of $1,297,959.31. BEGANY, Vando, Lamboy-Rivera, and an interpreter were tasked with reviewing the contract to determine if an overpayment had been made. BEGANY, Vando, Lamboy-Rivera and the interpreter determined that there was not an overpayment but thereafter devised a plan to steal the money. BEGANY, through the interpreter, contacted the vendor, claimed that an overpayment had been made, and directed the vendor to wire the money to a specific bank account. The bank account was set up by the interpreter to facilitate the theft. The interpreter then withdrew approximately $500,000 from the account, met Vando at the gates to Camp Eggers, and gave approximately $400,000 to Vando. Vando concealed the money in a backpack and gave the money to BEGANY. BEGANY¸ Vando and Lamboy-Rivera shared the money. They purchased rugs and shipped some of the rugs to the United States.
BEGANY’s commanding officer became aware of the theft and reported it to authorities. An investigation ensued and on June 13, 2009, law enforcement recovered $297,680 from BEGANY. Law enforcement also recovered money orders from Vando and Lamboy-Rivera as well as the rugs purchased with the money. In addition, law enforcement recovered $897,960 from the interpreter.
At sentencing set for the Court’s June 17th, 2013, term of Court, BEGANY faces up to 10 years imprisonment followed by up to three years supervised release and a fine of up to $250,000.
Vando and Lamboy-Rivera have also been charged and are currently awaiting sentencing.
Defense Criminal Investigative Service (DCIS) Special Agent in Charge John F. Khin, Southeast Field Office, commented, "By giving in to greed and dishonesty, SSG Begany tarnished the professional reputation and prestige of the US Armed Forces, while taking advantage of the very Afghan citizens whose trust we were trying to gain. Resulting from a lengthy and exhaustive investigation, this guilty plea reinforces that DCIS agents' relentless pursuit of violators, through multiple resources and partnerships, has proven highly effective in recovering precious American taxpayer dollars stolen or diverted through fraud and corruption."
Investigation of this case was conducted by the Defense Criminal Investigative Service; the United States Department of Army - Criminal Investigation Command, Major Procurement Fraud Unit; and the Federal Bureau of Investigation. Assistant United States Attorney Banumathi Rangarajan prosecuted the case.
Smock, Pa., Postal Officer Charged with Misappropriating Funds, Stealing from MailRead the Press Release
PITTSBURGH, Pa. - Jennifer M. Soltis of Smock, Pa., has been indicted by a federal grand jury in Pittsburgh on charges of misappropriation of postal funds and theft of mail by a postal officer and employee, United States Attorney David J. Hickton announced today.
The two-count indictment named Soltis, 38, as the sole defendant.
According to the indictment, from Oct. 8, 2012 to January 9, 2013, Soltis, while employed as the Acting Officer in Charge with the United States Postal Service at the Smock, Pa., post office, converted to her own use postal money orders, stamps and cash having a total value of $5,729.65. The indictment also charges that on or about Dec. 9, 2012, Soltis embezzled a Walmart gift card from an item of mail.
The law provides for a maximum total sentence of 15 years in prison, a fine of $500,000, 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 United States Attorney Mary McKeen Houghton is prosecuting this case on behalf of the United States.
The United States Postal Service, Office of Inspector General, conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Six Individuals Sentenced in Federal CourtRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Chris Zumpetta-Parr, Public Affairs SpecialistMARTINSBURG, WEST VIRGINIA - Six individuals were sentenced on March 18,
2013, in United States District Court in Martinsburg by Judge Gina M. Groh.United States Attorney William J. Ihlenfeld, II, announced that:
ERIC LAMONT DAVIS, age 44, of Martinsburg, was sentenced to 92 months imprisonment to be followed by three years of supervised release. DAVIS entered a plea of guilty on October 2, 2012, to “Possession with Intent to Distribute Crack Cocaine.” DAVIS was remanded to the custody of the United States Marshal pending designation to a Federal institution.
JENNY DAVIS, age 34, of Martinsburg, was sentenced to 70 months imprisonment to be followed by six years of supervised release. DAVIS entered a plea of guilty on October 1,
2012, to “Distribution of Crack Cocaine within 1,000 Feet of a School” in Martinsburg. DAVIS was remanded to the custody of the United States Marshal pending designation to a Federal institution.SABRINA DEHAVEN, age 30, of Martinsburg, was sentenced to 37 months imprisonment to be followed by three years of supervised release. DEHAVEN entered a plea of guilty on October 1, 2012, to “Possession with Intent to Distribute Cocaine.” DEHAVEN was remanded to the custody of the United States Marshal pending designation to a Federal institution.
This case was prosecuted by Assistant United States Attorney Jarod J. Douglas and former Assistant United States Attorney Thomas O. Mucklow and investigated by the Eastern Panhandle Drug & Violent Crime Task Force, consisting of officers from the West Virginia State Police - Bureau of Criminal Investigation, the Martinsburg Police Department, and the Berkeley County Sheriff’s Department.
DOMINGO HERNANDEZ-HERNANDEZ, age 29, of Winchester, Virginia, was sentenced to 63 months imprisonment to be followed by three years of supervised release. HERNANDEZ-HERNANDEZ entered a plea of guilty on August 6, 2012, to four counts of “Distribution of Cocaine” and one count of “Possession with Intent to Distribute Cocaine.” HERNANDEZ-HERNANDEZ was remanded to the custody of the United States Marshal pending designation to a Federal institution.
This case was prosecuted by Assistant United States Attorney Paul T. Camilletti and former Assistant United States Attorney Thomas O. Mucklow and investigated by the Eastern Panhandle Drug & Violent Crime Task Force, consisting of officers from the West Virginia State Police - Bureau of Criminal Investigation, the Martinsburg Police Department, and the Berkeley County Sheriff’s Department.
DANIEL LEE MASON, age 30, of Martinsburg, was sentenced to 13 months imprisonment to be followed by three years of supervised release. MASON entered a plea of guilty on October 24, 2012, to “Possession and Transfer of Stolen Firearms” on May 26, 2011, when MASON pawned two firearms and sold a firearm, all of which had been stolen. MASON was remanded to the custody of the United States Marshal pending designation to a Federal institution.
This was prosecuted by Assistant United States Attorney Robert H. McWilliams and investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Jefferson County Sheriff’s Department.
JUAN MARRON-CERDA, age 32, was sentenced to 4 months and 9 days imprisonment. MARRON-CERDA entered a plea of guilty on February 15, 2013, to “Unlawful Reentry into the United States” without Consent from the Department of Homeland Security after having previously been deported. MARRON-CERDA was remanded to the custody of the United States Marshal pending deportation.
This case was prosecuted by Assistant United States Attorney Paul T. Camilletti and was investigated by US Immigration and Customs Enforcement, Homeland Security Investigations (ICE/HSI).
San Anselmo Contractor Pleads Guilty to Tax FraudRead the Press Release
SAN FRANCISCO, Calif. – John Kieran Hynes pleaded guilty last week to filing a false tax return, United States Attorney Melinda Haag and IRS-CI Special Agent in Charge Jose M. Martinez, announced.
According to court documents, during 2005, Hynes was the owner of Newtown Construction. Hynes admitted that when he received check payments for contracted construction services rendered during the 2005 tax year, he would either deposit the entire check into his business bank account, cash the entire amount of the check, or cash a portion of the check and deposit the remainder of the check into his business account. The amount Hynes received back in cash when he deposited only a portion of the check was called a “less-cash withdrawal.”
Hynes’ bookkeeper relied on the deposited amounts shown on his monthly bank statements to determine his gross business receipts in 2005. Hynes intentionally did not tell his bookkeeper about the less-cash withdrawals to prevent his bookkeeper from including the less-cash withdrawal amounts among the gross receipts that the bookkeeper tracked in the company accounting records.
In order to file his 2005 tax return, Hynes provided his tax return preparer with the company accounting records prepared by his bookkeeper. Hynes knew those accounting records understated the gross receipts earned under the name Newtown Construction because the gross receipts recorded did not include the less-cash withdrawals.
On his 2005 tax return, Hynes knowingly failed to report additional gross receipts of $214,595 earned by Newtown Construction which resulted in a tax loss to the United States of $66,524.
On June 21, 2012, Hynes, 45, of San Anselmo, California, was charged with four counts of filing a false tax return. According to the plea agreement, he pleaded guilty to one count.
The maximum statutory penalty for each count of making and subscribing to a false income tax return, in violation of Title 26, U.S.C § 7206(1) is three years in prison and a fine of $250,000. 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.
Special Assistant United States Attorney Charles Parker and Assistant United States Attorney Thomas Moore are prosecuting this case. The prosecution is the result of an investigation by the Internal Revenue Service, Criminal Investigation.
Rutherford County Sheriff’s Deputy Arrested Forcocaine TraffickingRead the Press Release
Complaint Alleges Armed Deputy Arranged Purchase Of Seven Kilograms of Cocaine
Luis Reynaldo Parra Flores, 35, of Murfreesboro, Tennessee, a deputy with the Rutherford County Sheriff’s Department, was charged in a federal complaint in Nashville yesterday, with conspiring to distribute more than five kilograms of cocaine, announced Jerry E. Martin, U.S. Attorney for the Middle District of Tennessee.
According to the affidavit in support of the complaint, on March 13, 2013, agents with the Drug Enforcement Administration (DEA) intercepted a courier who arrived at the Nashville International Airport with seven kilograms of cocaine in his luggage. Federal agents and Metro Nashville drug detectives conducted an undercover operation to identify the individuals who planned to receive the cocaine. The affidavit alleges that Flores met with the cooperator and attempted to take delivery of the cocaine. After he did so, federal agents placed him under arrest and found that he was carrying a firearm and a badge identifying him as a Rutherford County Sheriff’s Deputy.
“The actions of a few corrupt law enforcement officers harms the reputation of the many dedicated men and women who wear the badge with honor,” said U.S. Attorney Jerry E. Martin. “We will always pursue those few who choose to dishonor their badge and will bring them to justice.”
“Flores failed the citizens of Rutherford County and the dedicated employees of the Rutherford County Sheriff’s Office and violated their trust,” said Rutherford County Sheriff Robert Arnold. “We have a black eye and a bruised jaw. I am ashamed of his actions and I apologize to the citizens of Rutherford County. He has tarnished his badge and ruined the trust the citizens placed in him. His employment was immediately terminated and his badge has been destroyed and will never be worn again.”
If convicted, Flores faces a sentence of ten years to life in prison and a $10 million fine.
The case was investigated by the DEA, the 20th Judicial District Drug Task Force and the Metropolitan Nashville Police Department. Assistant United States Attorney Alex Little is representing the government.
A criminal complaint is merely an accusation and is not evidence of guilt. Defendants are presumed innocent unless and until proven guilty in a court of law.
Rosebud Man Pleads Guilty to Assault ChargeRead the Press Release
United States Attorney Brendan V. Johnson announced that Jesse Young, age 36, of Rosebud, South Dakota appeared before U.S. Magistrate Judge Mark A. Moreno on March 15, 2013 and pled guilty to Assaulting, Resisting, or Impeding Certain Officers. The maximum penalty upon conviction is 1 year in custody, a $100,000 fine, or both; 1 year of supervised release; and a $25 special assessment.
The conviction stems from an incident that took place on May 29, 2012, when the victim was escorting Young to a restraint chair. Young was non-compliant and spat at the victim, hitting the victim with saliva on his face and ear.
The investigation was conducted by the Rosebud Sioux Tribe Law Enforcement Services. The case is being prosecuted by Assistant U.S. Attorney Marie H. Ruettgers.
A presentence investigation was ordered and a sentencing date has not been set. The defendant was remanded to the custody of the U.S. Marshal pending sentencing.
Rodriguez-Garza Sentenced for Reentry of Deported AlienRead the Press Release
BISMARCK– U.S. Attorney Timothy Q. Purdon announced that on March 19, 2013, Adan Rodriguez-Garza, 40, of Salinas Hidalgo, Mexico, pleaded guilty and was sentenced by U.S. District Judge Daniel L. Hovland on a charge of reentry of deported alien.
Judge Hovland sentenced Rodriguez-Garza to serve one year and one day in federal prison.
On Jan. 8, 2013, Rodriguez-Garza was a passenger in a vehicle involved in a traffic accident in Williams County, N.D. U.S. Border Patrol officials discovered that Rodriguez-Garza was a citizen of Mexico and in the United States illegally. Rodriguez-Garza had been convicted of aggravated assault in Texas state court on Jan. 8, 1997, and was deported from the United States on Jan. 15, 1997.
The case was investigated by the U.S. Border Patrol and the N.D. Highway Patrol.
Assistant U.S. Attorney David Hagler prosecuted the case.
Rockford Man Charged with Fraud Involving Fictitious Money Orders Exceeding $500,000Read the Press Release
ROCKFORD — A Rockford, Ill. man was indicted by a federal grand jury today for producing and passing fictitious money orders. BRADLEY SHERMAN HAMPTON, 53, was charged with nine counts of fraudulently producing and passing fictitious financial instruments that appeared to be issued under the authority of the United States Department of the Treasury. The nine fictitious money orders, totaling $547,578, were dated between July 15, 2009 and Oct. 14, 2009.
Hampton is scheduled to appear at the Federal Courthouse in Rockford on Friday, March 22, 2013, at 11:00 a.m., for arraignment. The arraignment will be conducted by United States Magistrate Judge P. Michael Mahoney.
The indictment was announced today by Gary S. Shapiro, United States Attorney for the Northern District of Illinois; Frank Benedetto, Special Agent-in-Charge of the Chicago Field Office of the U.S. Secret Service, Department of Homeland Security; and Cory B. Nelson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.
Members of the public are reminded that a criminal indictment contains only charges and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt of the defendant beyond a reasonable doubt.
The government is represented by Assistant U.S. Attorney Michael D. Love.
Indictment
Rochester Man Sentenced for Swindling $11 Million from InvestorsRead the Press Release
MINNEAPOLIS—Yesterday in federal court, a 35-year-old Rochester man was sentenced for swindling more than $11 million through an investment scam. On March 18, 2013, United States District Court Judge Ann D. Montgomery sentenced Jason Michael Meyer to 60 months in federal prison on one count of wire fraud and one count of money laundering. Meyer was charged on August 21, 2012, and pleaded guilty on September 18, 2012.
In his plea agreement, Meyer admitted that he started an investment company, 3 Hooligans Investment Properties, LLC (3 Hooligans), in 2007. Meyer then represented that he was an experienced investor and began soliciting people to invest their money with 3 Hooligans. He promised his clients both significant and rapid returns for their investments, with little or no risk. He deposited their money into a bank account he opened at Wells Fargo. Instead of investing their money, however, Meyer often used the funds to pay for his personal expenses, including payments on his house in Rochester, family vacations, and car payments on his wife’s BMW. To continue the scheme, Meyer found new clients and used their money to pay previous clients.Until the fraudulent scheme was discovered in 2010, Meyer participated in approximately 30 transactions of money laundering and 30 transactions of wire fraud, which together, resulted in losses exceeding $11 million.
This case was the result of an investigation by the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigations. The case was prosecuted by Assistant U.S. Attorney Laura M. Provinzino.
The U.S. Attorney’s Office wants to remind people to protect themselves from investment fraud. For more information, visit http://www.stopfraud.gov/protect-securities.html.Rhode Island Man Sentenced to 18 Months in Prison for Narcotics OffenseRead the Press Release
March 19, 2013David B. Fein, United States Attorney for the District of Connecticut, announced that EDWARD PREZIOSO, also known as “Wu Loc,” 25, of Westerly, R.I., was sentenced today by Senior United States District Judge Warren W. Eginton in Bridgeport to 18 months of imprisonment, followed by one year of supervised release. On December 14, 2012, PREZIOSO pleaded guilty to one count of using a telephone to facilitate a narcotics felony.
According to court documents and statements made in court, this matter stems from an investigation conducted by the FBI New Haven Safe Streets Task Force, the New Haven Police Department and the Connecticut State Police into drug distribution and related violence allegedly being committed by members and associates of the Grape Street Crips in New Haven.
On February 6, 2012, PREZIOSO was intercepted over a court-authorized wiretap discussing the acquisition and distribution of crack cocaine with a co-defendant in New Haven.
On April 9, 2012, a grand jury returned an indictment charging 18 individuals, including PREZIOSO, with narcotics distribution offenses stemming from this investigation. To date, nine of the defendants have pleaded guilty. The other nine defendants are detained while awaiting trial.
With respect to the defendants awaiting trial, U.S. Attorney Fein stressed that an indictment is not evidence of guilt. Charges are only allegations, and each defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This case was being investigated by the FBI’s New Haven Safe Streets Task Force, which includes officers from the New Haven, Hamden and Milford Police Departments, and the State of Connecticut Department of Correction. The investigation was significantly assisted by the Connecticut State Police, the United States Marshals Service and the Westerly (R.I.) Police Department.
The investigation was funded in significant part by the United States Attorney’s Office Organized Crime Drug Enforcement Task Force and supported by the Office’s Project Safe Neighborhoods and Anti-Gang programs.
This case is being prosecuted by Assistant United States Attorneys Anthony Kaplan and Gordon Hall.
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U.S. ATTORNEY'S OFFICE
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