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Tuesday 19 March 2013
Retired Henderson Fireman Sentenced to Prison for Tax EvasionRead the Press Release
LAS VEGAS, Nev. – A retired Henderson fireman convicted by a jury in October of five counts of willful tax evasion and one count of filing a false and fictitious tax return, has been sentenced to 21 months in prison, three years of supervised release, and ordered to pay the IRS $177,310 in restitution, announced Daniel G. Bogden, United States Attorney for the District of Nevada.
Dwight C. Jackson, 53, of Henderson, was sentenced on March 18, 2013, by Senior U.S. District Judge Philip M. Pro. Jackson is released on a personal recognizance bond and must report to federal prison by July 24, 2013.
“If you knowingly cheat on your taxes, you will likely be convicted of a felony offense and will go to prison,” said U.S. Attorney Bogden. “Cheating on your taxes is never a smart option - no matter who you are, your income level, your employer, your profession or your place of business.”
From 2004 through 2008, Jackson was employed as a fireman with the City of Henderson and earned over $113,000 each year. The approximate federal income tax he owed for those years was between $22,000 and $29,000. Jackson willfully attempted to evade the federal taxes he owed by substantially understating his wages on his individual tax return, falsely claiming the earned income tax credit, untimely filing his returns for 2004 to 2006, submitting false W-4 forms with his employer claiming he was exempt from federal tax withholdings, and concealing his actual income from the IRS. For the year 2009, Jackson knowingly presented a false income tax return which contained a “corrected” W-2 form stating that he earned no wages in 2009 when he truth, he had earned $247,492 that year from the City of Henderson.
According to the evidence presented by the government at trial, Jackson carried out his scheme with the help of a southern California man, James Mattatall, whom he met at a sovereign citizen’s meeting in Las Vegas and whom prepared Jackson’s tax returns. Sovereign citizens take the position that they are answerable only to common law and are not subject to any statutes or proceedings at the federal, state or municipal levels. Sovereign citizens do not recognize U.S. currency and believe most forms of taxation are illegitimate.
“For all of us in public service, we are profoundly aware that our salaries come from taxes,” said Paul Camacho, Special Agent in Charge of IRS Criminal Investigation in Nevada. “It would be insulting to all the hard working Americans who paid these taxes for any of us to willfully evade paying our fair share. This sentence is a strong message to anyone who chooses satisfying greed over duty.”
The case was investigated by IRS Criminal Investigation and prosecuted by Assistant U.S. Attorney J. Gregory Damm.
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.
Rapid City Woman Pleads Guilty to Assault ChargeRead the Press Release
United States Attorney Brendan V. Johnson announced that Raylene C. Chips, a/k/a Raelene C. Chips, a/k/a Raelene C. Chipps, age 24, of Rapid City, South Dakota appeared before U.S. Magistrate Judge Mark A. Moreno on March 14, 2013, and pled guilty to a Superseding Information charging her with Simple Assault. The maximum penalty upon conviction is 6 months’ imprisonment, a $5,000 fine or both, and a period of supervised release of not more than 1 year.
The conviction stems from an incident on the 4th day of May, 2012 when Chips was riding in a car in Mission, South Dakota and the vehicle came upon two women walking along the road and stopped. Two occupants of the vehicle exited and confronted the victim. A fight ensued and Chipps joined in the assault. As a result, the victim sustained a broken jaw, among other injuries.
The investigation was conducted by the Rosebud Sioux Tribe Law Enforcement Services. The case is being prosecuted by Assistant U.S. Attorney Troy Morley.
A presentence investigation was ordered. A sentencing date has not been set. The Defendant was remanded to the custody of the U.S. Marshal pending sentencing.
Plymouth Man Pleads Guilty to Smuggling Thousands of Rounds of Ammunition to the UkraineRead the Press Release
MINNEAPOLIS—Earlier today in federal court, a 37-year-old Plymouth man pleaded guilty to smuggling ammunition from the United States to the Ukraine. Paul Kalash pleaded guilty to one count of smuggling goods from the United States. Kalash, who was charged on February 11, 2013, entered his plea before U.S. District Court Chief Judge Michael J. Davis.
On February 22, 2011, U.S. Custom and Border Protection (“CBP”) agents seized two packages shipped by Kalash to the Ukraine containing a firearm stock and 2,600 rounds of assorted ammunition. Packages seized on March 6 and 10, 2011, each contained 1,700 rounds of ammunition. And several packages seized on April 1, 2011, contained 2,850 rounds and 300 9-millimeter shell cases.
On March 7, 2011, CBP sent Kalash a notice of seizure, explaining that his packages were seized, and that a license was required to export ammunition. On April 3, 2011, Kalash responded and requested that the ammunition be returned to him. In his letter, Kalash argued that he was sending the items for the purpose of providing his friend with better marksmanship competition-grade ballistics.Following his receipt and acknowledgement of the letter, on May 6, 2011, CBP seized yet another package sent by Kalash containing 950 rounds of assorted ammunition. In addition, Kalash admitted that he shipped other packages to the Ukraine during this time period about which the government was not fully aware.
For his crime, Kalash faces a potential maximum penalty of ten years in federal prison. Judge Davis will determine his sentence at a future hearing, yet to be scheduled.
This case is the result of an investigation by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and CBP. It is being prosecuted by Assistant U.S. Attorney Charles J. Kovats.Parmalee Man Arraigned on Sexual Abuse ChargesRead the Press Release
United States Attorney Brendan V. Johnson announced that a superseding indictment for Aggravated Sexual Abuse of a Child, Abusive Sexual Contact of a Child, and Abusive Sexual Contact of a Child While Required to Register as a Sex Offender has been filed against a Parmalee, South Dakota man.
Randy Never Misses A Shot, age 48, was indicted by a federal grand jury on March 13, 2013. He appeared before U.S. Magistrate Judge Mark A. Moreno on March 15, 2013, and pled not guilty to the superseding indictment. The maximum penalty upon conviction is life imprisonment. The charges are merely accusations and Never Misses A Shot is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Federal Bureau of Investigation. Assistant U.S. Attorney Troy Morley is prosecuting the case. Never Misses A Shot was remanded to the custody of the U.S. Marshal. A trial date has not been set.
Newtown Man Sentenced to 20 Years in Federal Prison for Producing Child PornographyRead the Press Release
March 19, 2013David B. Fein, United States Attorney for the District of Connecticut, and Kimberly K. Mertz, Special Agent in Charge of the New Haven Division of the Federal Bureau of Investigation, announced that DAVID CSANADI, 36, of Newtown, was sentenced today by United States District Judge Janet Bond Arterton in New Haven to 240 months of imprisonment, followed by 15 years of supervised release, for producing child pornography.
According to court documents and statements made in court, in 2006 and 2007, CSANADI sexually abused three female children, videotaped the abuse and maintained the tapes at his home in Newtown. All three children were prepubescent minors under the age of 12 at the time of the abuse. One child was approximately 18 months old at the time of the abuse.
In addition to filming and maintaining video tapes of the sexual abuse that he inflicted on female children, CSANADI downloaded from the Internet and obtained other images and videos of child pornography on his home computer.
“Working with the FBI, the Connecticut Child Exploitation Task Force and our other law enforcement partners, the U.S. Attorney’s Office is committed to protecting children from sexual exploitation and removing sexual predators from the community,” stated U.S. Attorney Fein. “I commend the Newtown and Monroe Police Departments for their investigative efforts, and the Danbury State’s Attorney’s Office for the critical assistance it has provided to the investigation and prosecution of this heinous but important case.”
“The sexual abuse of children and production of child pornography are detestable crimes, and the harsh reality of it all is that those who commit these unspeakable crimes live and work among us,” stated Special Agent in Charge Mertz. “The Connecticut Child Exploitation Task Force’s devotion to identifying those who commit these monstrous crimes and to bringing them to justice remains, and always will remain, resolute.”
CSANADI has been detained since April 15, 2011, when he was arrested and charged with multiple state child sexual exploitation offenses.
On November 2, 2012, CSANADI pleaded guilty in federal court to one count of production of child pornography. In January 2013, he pleaded guilty in state court to the charges of sexual assault in first degree, illegal sexual contact with a minor and possession of child pornography. CSANADI is scheduled to be sentenced in state court next month.
This matter was investigated by the Federal Bureau of Investigation, Connecticut Child Exploitation Task Force, and the Newtown and Monroe Police Departments. The case was prosecuted by Assistant United States Attorneys Neeraj Patel and Krishna Patel.
The Connecticut Child Exploitation Task Force, which is housed at the main FBI office in New Haven, investigates crimes against children occurring over the Internet, and provides computer forensic review services for participating agencies. For more information about the Task Force, or to report child exploitation crimes, please contact the FBI at 203-777-6311.
This prosecution is part of the U.S. Department of Justice’s Project Safe Childhood Initiative, which is aimed at protecting children from sexual abuse and exploitation. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
To report cases of child exploitation, please visit www.cybertipline.com.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
[email protected]New Jersey Man Sentenced to 10 Years in Prison for Luring Teen to Pennsylvania, Downloading Images of Child Sex AbuseRead the Press Release
NEWARK, N.J. – A Sussex County, N.J., man was sentenced today to 120 months in prison for luring a teenage boy to Pennsylvania for illegal sexual activity, as well as downloading and receiving images on his home computer of children being sexually abused, U.S. Attorney Paul J. Fishman announced.
Robert Mucha, 58, of Newton, N.J., previously pleaded guilty before U.S. District Judge William H. Walls in Newark federal court to one count of enticing a minor to engage in criminal sexual activity and one count of receiving child pornography. Judge Walls imposed the sentence today in Newark federal court.
According to documents filed and statements made in court:In October 2010, Mucha convinced a teenage boy to travel from New Jersey to Pennsylvania to spend the day with him and then sleep over at Mucha’s apartment in Stroudsberg, Pa. After he was arrested in July 2012, Mucha admitted to sexual contact with the teenager.
Prior to his arrest, Mucha worked as a volunteer Emergency Medical Technician in Andover, N.J. He also previously taught band and Bugle Corps to teenagers in Belleville, N.J., and Lakewood, N.J.In addition to the prison term, Judge Walls sentenced Mucha to serve a lifetime of supervised release – during which his access to computers, the Internet and children will be restricted – and ordered him to pay $10,000 in restitution. Mucha is also required to register as a sex offender.
Today’s sentencing is part of Operation Holitna, an ongoing HSI-led investigation that originated in Boston. U.S. Attorney Fishman credited special agents of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI), under the direction of Special Agent in Charge Andrew M. McLees in Newark, with the investigation leading to sentencing. He also thanked the U.S. Attorney’s Office for the District of Massachusetts and the HSI Boston office.
HSI encourages the public to report suspected child predators and any suspicious activity through its toll-free hotline at 1-866-347-2423 or its online tip form at http://www.ice.gov/tips Both are staffed around the clock by investigators. Suspected child sexual exploitation or missing children may be reported to the National Center for Missing & Exploited Children at 1-800-843-5678 or http://www.cybertipline.com.
The government is represented by Assistant U.S. Attorney Andrew J. Bruck of the U.S. Attorney’s Office Criminal Division in Newark.
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Defense counsel: Assistant Federal Public Defender Carol Gillen Esq., NewarkMission Woman Indicted for Burglary and LarcenyRead the Press Release
United States Attorney Brendan V. Johnson announced that a Mission, South Dakota woman has been indicted by a federal grand jury for Second Degree Burglary and Larceny.
Monique Flood, age 20, was indicted by a federal grand jury on February 13, 2013. She appeared before U.S. Magistrate Judge Mark A. Moreno on March 15, 2013 and pled not guilty to the indictment. The maximum penalty upon conviction is up to 15 years’ in custody, a $250,000 fine, or both; 3 years of supervised release; and a $100 Special Assessment. Restitution may also be ordered.
The charge is merely an accusation and Flood is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Rosebud Sioux Tribe Law Enforcement Services. Assistant U.S. Attorney Timothy M. Maher is prosecuting the case.
Flood was released on bond pending trial. A trial date has been set for April 30, 2013.
Miami Man Convicted in $3.3 Million Identity Theft Tax Refund Fraud SchemeRead the Press Release
Defendant Filed Approximately 400 Fraudulent Tax Returns Seeking Refunds
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, José A. Gonzalez, Special Agent in Charge, Internal Revenue Service, Criminal Investigation Division (IRS-CID), Miami Field Office, and Rafael P. Hernandez, Jr., Chief, North Miami Beach Police Department, announced that a jury convicted Charlton Escarmant, 29, of Miami, of one count of conspiracy to submit false claims to the Internal Revenue Service, in violation of Title 18, United States Code, Section 287, one count of access device fraud, in violation of Title 18, United States Code, Section 1029(a)(3), and two counts of aggravated identity theft, in violation of Title 18, United States Code, Section 1028A(a)(1). Sentencing has been scheduled for June 17, 2013, before U.S. District Judge Lenard. At sentencing, he faces a possible statutory maximum sentence of 24 years in prison.
On October 5, 2012, Charlton Escarmant and co-conspirator Arthy Icart were charged in a five-count indictment for their participation in an identity theft tax refund scheme. According to testimony and evidence presented at trial, some of the personal identification information used by Escarmant and Icart to file fraudulent tax returns was stolen from Tallahassee Community College’s (TCC) financial aid office. In fact, more than 3,200 names found on a computer in Escarmant’s possession came from TCC.
To execute the scheme, Escarmant filed tax returns using the stolen identification information and also in his own name and created false W-2 forms with fictitious employer information. Escarmant’s W-2 form falsely claimed that he was a veterinarian at Central Broward Animal Hospital. In fact, however, Escarmant never worked at the Central Broward Animal Hospital.
At the time of their arrest, Escarmant and his co-conspirator unlawfully possessed approximately 22 pre-paid tax debit cards in the names of other individuals. In total, during the course of the scheme, the defendant and his co-conspirator submitted approximately 400 fraudulent tax returns to the Internal Revenue Service, seeking more than $3.3 million in tax refunds.
Co-conspirator Arthy Icart pled guilty on January 17, 2013 to charges of conspiracy to file fraudulent claims, access device fraud, and aggravated ID theft. Sentencing is scheduled for April 1, 2013 before U.S. District Judge Lenard.
Mr. Ferrer commended the investigative efforts of the Identity Theft Tax Refund Strike Force, with special commendation to the IRS-CI and the North Miami Beach Police Department. Mr. Ferrer also thanked the Tallahassee Community College for their cooperation during this investigation. The case is being prosecuted by Assistant U.S. Attorneys Michael B. Nadler and Elina Rubin-Smith.
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.
Mexican National Gets Five Years for Illegal Possession of FirearmRead the Press Release
WICHITA, KAN. – A Mexican national has been sentenced to more than five years in prison for illegal possession of firearms, U.S. Attorney Barry Grissom said today.
Guadalupe Burciaga-Alcantar, 39, lived in Wichita but is from Ojinaga, Mexico. He was arrested in October 2012 after a traffic stop by deputies of the Sedgwick County Sheriff’s Department in which two loaded handguns were recovered from a pickup truck Burciaga was driving. Burciaga admitted to the deputies the firearms were his.
Burciaga pleaded guilty in December to the charge of illegal alien in possession of a firearm. He was sentenced Monday by U.S. District Judge Monti L. Belot to 65 months in a U.S. prison to be followed by deportation to Mexico. The same federal statutes that prohibit felons from possessing firearms also prohibit persons unlawfully in the United States to possess firearms, Grissom said.
“The U.S. Attorney’s office in Kansas aggressively enforces laws that prohibit the unlawful possession of firearms,” Grissom said. “Whether they are felons or have no status in the U.S., if they possess firearms they should expect to be prosecuted and incarcerated.”
Grissom praised the Sedgwick County Sheriff’s office and Homeland Security’s Enforcement and Removal Operations for their investigation of the case and Assistant U.S. Attorney Brent Anderson for his prosecution.Maryland Resident Enters Plea to Drug ChargeRead 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 — A 34-year old Oxon Hill, Maryland, resident entered a plea of guilty on March 12, 2013, in United States District Court in Martinsburg before Magistrate Judge David J. Joel.
United States Attorney William J. Ihlenfeld, II announced that: RONALD PAUL LAWSON, JR., entered a plea of guilty to “Distribution of Cocaine Base within 1,000 Feet of Winchester Avenue Elementary School.” LAWSON, who is free on bond pending sentencing, faces at least 1 and up to 40 years imprisonment and a $2,000,000 fine.
This case was prosecuted by Assistant United States Attorney David J. Perri and former Assistant United States Attorney Thomas O. Mucklow and investigated by the Eastern Panhandle Drug & Violent Crimes Task Force. The Task Force consists of officers from the West Virginia State Police - Bureau of Criminal Investigation, the Martinsburg Police Department, the Berkeley County Sheriff’s Department, and the Jefferson County Sheriff’s Department.
Martinsburg Resident Enters Plea to Firearms ChargeRead 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 - A 26 year old Martinsburg, West Virginia, resident entered a plea of guilty on March 11, 2013, in United States District Court in Martinsburg before Magistrate Judge David J. Joel.
United States Attorney William J. Ihlenfeld, II, announced that: BRANDON LEE SPAUR entered a plea of guilty to “Possession of a Firearm by a Convicted Felon.” SPAUR, who is in custody pending sentencing, faces up to 10 years imprisonment and a $250,000 fine on this charge.
This case was prosecuted by Assistant United States Attorney Paul T. Camilletti and investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and 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.
Manhattan U.S. Attorney Announces Charges Against 37 Members of Nationwide Marijuana and Cigarette Distribution ConspiracyRead the Press Release
Illegally Distributed Nearly 44 Million Cigarettes, Which Resulted in Over $7 Million in Lost Tax Revenue
Preet Bharara, the United States Attorney for the Southern District of New York, and James T. Hayes, Jr., the Special Agent-in-Charge of the New York Field Office of the U.S. Immigration and Customs Enforcement’s (“ICE”) Homeland Security Investigations (“HSI”), announced today the unsealing of a three-count Indictment charging 37 members of a Chinese marijuana and contraband cigarette trafficking organization (the “Organization”) that operated throughout the United States. The Organization allegedly conspired to manufacture and distribute over $45 million worth of marijuana, and to illegally distribute nearly 44 million cigarettes, which resulted in over $7 million in lost tax revenue. Thirty-two members of the Organization were arrested this morning in New York, New Jersey, California, Tennessee, Alabama, and Rhode Island as part of a coordinated operation involving federal, state, and local law enforcement officers. The Indictment has been assigned to U.S. District Judge Miriam Goldman Cedarbaum; the 14 defendants arrested in New York and New Jersey will appear before Judge Cedarbaum this afternoon in Manhattan federal court. The remaining 18 defendants will appear before U.S. Magistrate Judges in the Eastern and Central Districts of California, the Northern District of Alabama, the Middle District of Tennessee, and the District of Rhode Island. One additional defendant is scheduled to surrender in Arkansas this afternoon, and four others are still at large.
Manhattan U.S. Attorney Preet Bharara said: “Today’s arrests deal a blow to an organization that allegedly conspired to manufacture multi-million dollar quantities of marijuana that they would then distribute, along with millions of contraband cigarettes, nationwide. Thanks to the coordinated efforts of federal, state, and local law enforcement around the country, this alleged supply chain has effectively been broken.”
ICE HSI Special Agent-in-Charge James T. Hayes, Jr., said: “This alleged drug trafficking organization was a highly organized network. These allegedly corrupt people were savvy in their alleged scheme to move hundreds of thousands of dollars and drugs throughout the United States. While some may mistakenly perceive smuggling and trafficking in narcotics as a path to a quick profit, these arrests demonstrate the serious consequences that await those who engage in the smuggling and sale of illegal drugs.”
As alleged in the Indictment and other court documents:
Since 2010, the defendants were part of a nationwide organization that produced and distributed marijuana, and distributed contraband cigarettes from California to various places throughout the U.S., including the New York City area. PAUL COONG LAY and his brother CHAN COONG LAY maintained a network of marijuana grow locations throughout California and elsewhere. For example, in October 2012, law enforcement executed a search warrant at one such location in Porterville, California – after observing PAUL and CHAN LAY visiting the premises – seizing more than 200 pounds of processed marijuana and approximately 185 live marijuana plants.
Marijuana grown by the LAY brothers, along with contraband cigarettes, were then shipped by tractor trailer from the Los Angeles region throughout the U.S., using a trucking company owned and operated by STEVEN QU and his wife YUN XING (the “Trucking Company”). QU’s trucks were followed by law enforcement to locations in Colorado, Tennessee, and New York, where they off-loaded hundreds of pounds of marijuana and/or cases of cigarettes. For example, in the New York area, law enforcement observed on numerous occasions WAI C. AU-YEUNG, RU XIANG MEI, and XIUZHEN LIN meet and unload QU’s trucks at a warehouse in Jersey City, New Jersey. AU-YEUNG, MEI, and LIN then transported the contraband to locations in Manhattan and Brooklyn, where it was distributed. During the course of the investigation, law enforcement seized in excess of 120 pounds of marijuana, 1,816 cartons of contraband cigarettes, and 545,860 counterfeit cigarette tax stamps from the New York arm of the Organization alone.
In the Tennessee area, law enforcement observed on various occasions DENISE RAGLAND and others unloading the trucks at a warehouse maintained by QU’s Trucking Company. Earlier this month, for example, law enforcement observed CHAN LAY – who had traveled from California to Tennessee to supervise the shipment – and OAKLEY SIMPSON, among others, unloading one of the Organization’s trucks. Law enforcement subsequently arrested SIMPSON, who was in possession of approximately 80 pounds of marijuana.
Money generated by the sale of the Organization’s marijuana and contraband cigarettes was also laundered by members of the Organization through a variety of means. For example, members regularly flew from New York and elsewhere to California carrying hundreds of thousands of dollars. In October 2011, for instance, law enforcement seized approximately $180,000 from WAI C. AU-YEUNG, XIUZHEN LIN, and HOA PHAN as they were about to board a flight from New York to California. Other members of the Organization shipped cash from the East Coast back to California using the trucks registered to QU’s Trucking Company. For example, in September 2012, law enforcement seized approximately $110,000 in cash from PAUL LAY, which was concealed in cardboard shipping boxes otherwise filled with lollipops.
Other members of the Organization laundered proceeds of the marijuana and cigarette operations through financial institutions. For example, in September 2012, law enforcement seized approximately $114,000 from TONGMIAO YAN. According to YAN, those funds belonged to JIA QIAO. A review of QIAO’s bank records, among other sources of information, revealed that QIAO and her husband, JAMES CHEN, have been laundering funds for the Organization through two entities that they control.
In conjunction with today’s arrests, law enforcement also seized the contents of 17 banks accounts used by the Organization to launder the proceeds of its marijuana and contraband cigarette distribution business, including accounts belonging to STEVEN QU’s Trucking Company and to the entities controlled by JAMES CHEN and JIA QIAO. Law enforcement also seized a number of vehicles, including four tractor trailers registered to the Trucking Company.
A chart containing the names, ages, residence information, charges against the defendants, and the maximum penalties they face, is attached.
Mr. Bharara praised the outstanding investigative work of ICE HSI. He also thanked the Nassau County Police Department, the Los Angeles Police Department, the U.S. Marshals, and the Internal Revenue Service – Criminal Investigations for their assistance in the case.
This case is being handled by the Office’s Narcotics Units. Assistant United States Attorneys Matthew L. Schwartz, Paul Monteleoni, and Eun Young Choi are in charge of the prosecution.
The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Click here to view chart(s)
U.S. v. Paul Coong Lay, et al. Indictment
Manhattan U.S. Attorney Announces Arrest of Florida Investment Adviser in Connection with $8 Million Securities Fraud SchemesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Richard T. Vignogna, the Acting Inspector-in-Charge of the New York Office of the U.S. Postal Inspection Service (“USPIS”), announced that CRAIG L. BERKMAN was arrested today for perpetrating two separate securities fraud schemes involving the purported sale of pre-Initial Public Offering (“IPO”) shares of Facebook, Inc. stock that neither he nor the entities he controlled owned. BERKMAN received a total of at least $8 million from these schemes – the majority of which he misappropriated for his own benefit. He was arrested at his home in Odessa, Florida, this morning, and is expected to be presented today in federal court in Tampa, Florida.
Manhattan U.S. Attorney Preet Bharara said: “As alleged, Craig Berkman seized on the interest in a highly coveted investment opportunity to swindle investors out of millions. With his arrest, this Office continues our work to identify the perpetrators of financial fraud, hold them accountable, and protect investors.”
USPIS Acting Inspector-in-Charge Richard T. Vignogna said: “Today's arrest of Mr. Berkman for allegedly using the popularity of the social networking site Facebook to defraud investors out of millions of dollars is an example of the investigative tenacity of Postal Inspectors to bring to justice anyone who uses the US Mail for fraud.”
In a separate action, the U.S. Securities and Exchange Commission (“SEC”) announced civil charges against Berkman.
According to a criminal complaint unsealed today in Manhattan federal court:
Beginning in December 2010, BERKMAN created Ventures Trust II, LLC, a Delaware private equity investment limited liability company that he also controlled. He falsely represented to investors that Ventures Trust II owned shares in Facebook, which at the time was privately held. Owning interests in Facebook stock was a particularly attractive opportunity for investors because of the expectation that it would soon go public through an IPO.
In reality, Ventures Trust II never had any interest in Facebook except for a small indirect interest through another investment fund (“Fund-1”). In early 2012, Fund-1 discovered that Ventures Trust II management had been showing investors a forged letter that purported to be from Fund-1’s lawyer, and which misrepresented Ventures Trust II’s true interest in Fund-1. As a result, Fund-1 terminated Ventures Trust II’s interest.
As recently as August 2012 – after Facebook’s IPO, when investors were beginning to try to redeem their investments – a lawyer acting on behalf of Ventures Trust II wrote to investors to reassure them that the company still owned Facebook stock through Fund-1, and insisted that Ventures Trust II “is not a Ponzi scheme.” Based on misrepresentations by BERKMAN and others, more than 50 investors sent approximately $5.5 million to various accounts in the name of Ventures Trust II, which were controlled by BERKMAN.
In a separate but related fraud, beginning in March 2012, BERKMAN created Face Off Acquisitions LLC, an entity that, according to its offering materials, was designed to acquire a New York-based LLC that already held more than 1 million pre-IPO shares of Facebook (“Fund-2”). BERKMAN told investors that the acquisition would cost approximately $40 to $50 million. He also falsely stated that a prominent billionaire investor had already committed to invest in Face Off, when in fact the billionaire investor had never heard of Face Off. BERKMAN obtained approximately $2.5 million from at least 14 Face Off investors, and then falsely told those investors that Face Off had successfully acquired Fund-2, although he had held only exploratory conversations with Fund-2 intermittently over a period of about two years.
The approximately $5.5 million BERKMAN acquired from the Ventures Trust II investors and the approximately $2.5 million that he acquired from the Face Off investors were subsequently transferred to his personal account. Instead of using the investor funds to acquire shares of Facebook, BERKMAN misappropriated a substantial portion of the money for his own benefit and the benefit of others. He transferred several million dollars of investor funds to lawyers representing him in bankruptcy proceedings, apparently to fund an altogether different settlement with his creditors.
BERKMAN, 71, was arrested at his home in Odessa, Florida. He is charged with two counts of securities fraud and two counts of wire fraud. He faces a maximum sentence of 20 years in prison on each of the four counts in the complaint. He also faces a fine of the greater of $5 million or twice the gross gain or gross loss from the offense on the securities fraud charges, as well as fines of lesser amounts on the wire fraud charges.
Mr. Bharara praised the work of the Criminal Investigators of the United States Attorney’s Office and the USPIS, which jointly investigated this case. He also thanked the SEC.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force, on which Mr. Bharara serves as a Co-Chair of the Securities and Commodities Fraud Working Group. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys John J. O’Donnell and Matthew L. Schwartz are in charge of the prosecution.
The charges contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
U.S. v. Craig Berkman Complaint
Madison Man Indicted on Counterfeit ChargesRead the Press Release
United States Attorney Brendan V. Johnson announced that a Madison, South Dakota man has been indicted by a federal grand jury for counterfeiting.
Adrian D. Logan, age 25, was indicted by a federal grand jury on March 6, 2013 for Dealing in Counterfeit U.S. Currency and Passing Counterfeit U.S. Currency. He appeared before U.S. Magistrate Judge John E. Simko on March 15, 2013 and pled not guilty to the indictment. The maximum penalty upon conviction is 20 years imprisonment and a $250,000 fine. The charge is merely an accusation and Logan is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Madison Police Department, the Sioux Falls Police Department, and the United States Secret Service. Assistant U.S. Attorney Jeffrey C. Clapper is prosecuting the case. Logan was remanded to the custody of the State of South Dakota. A trial date has not been set.
Lower Brule Woman Charged with Assaulting, Resisting and Impeding A Federal OfficerRead the Press Release
United States Attorney Brendan V. Johnson announced that a Lower Brule, South Dakota woman has been indicted by a federal grand jury.
Lauren LaRoche, age 24, was indicted by a federal grand jury on March 13, 2013 for Assaulting, Resisting and Impeding a Federal Officer. LaRoche appeared before U.S. Magistrate Judge Mark A. Moreno on March 14, 2013 and pled not guilty to the indictment. The maximum penalty upon conviction is 8 years of imprisonment, a $250,000 fine, or both; 3 years of supervised release and an additional 2 years of supervised release upon revocation. Restitution and a $100 special assessment may also be ordered. The charge is merely an accusation, and LaRoche is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Bureau of Indian Affairs and Assistant U.S. Attorney Meghan N. Dilges is prosecuting the case. LaRoche was remanded to the custody of the U.S. Marshal. A trial date has not been set.
Lower Brule Man Charged with Assault with A Dangerous WeaponRead the Press Release
United States Attorney Brendan V. Johnson announced that a Lower Brule, South Dakota man has been indicted by a federal grand jury.
Irvin Scott Yazzie, a/k/a Alex Yazzie, age 24, was indicted by a federal grand jury on March 13, 2013 for Assault with a Dangerous Weapon. Yazzie appeared before U.S. Magistrate Judge Mark A. Moreno on March 15, 2013 and pled not guilty to the indictment. The maximum penalty upon conviction is 10 years of imprisonment, a $250,000 fine, or both; 3 years of supervised release and an additional 2 years of supervised release upon revocation. Restitution and a $100 special assessment may also be ordered. The charge is merely an accusation, and Yazzie is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Bureau of Indian Affairs and Assistant U.S. Attorney Meghan N. Dilges is prosecuting the case. Yazzie was remanded to the custody of the U.S. Marshal. A trial date has not been set.
Loan Fraudster Sentenced to 160 Months in PrisonRead the Press Release
PHILADELPHIA - Allie Speight, 58, of Philadelphia, was sentenced today to 160 months in prison for a loan fraud scheme that included aggravated identity theft, bank fraud, wire fraud, and money laundering. Speight pleaded guilty on April 16, 2012 to orchestrating a scheme to induce others to obtain loans as straw borrowers in return for receiving a percentage of the loans. Co-defendant Jerome Manker received funds from the loans for construction and rehabilitation work that he never performed.
Speight and co-defendant Maurice Thomas would act as brokers, scouting for depressed properties and enticing others to purchase the properties by obtaining loans that were far in excess of the properties' values. Speight and Thomas used a mortgage broker in Pittsburgh to prepare and submit loan applications that contained false W-2 statements and pay stubs, mostly from the fictitious company of "Allied Construction and Development, Corp.," owned by Allie Speight. The mortgage broker, John Polosky, charged elsewhere, received payments from the loan proceeds outside of the payments identified in the HUD-1 settlement sheets for the loans. Speight and Thomas received at least 10-percent of the loan proceeds that they helped to broker. In many cases, Speight and Thomas allegedly created forged letters from the straw borrowers that directed title companies to send the proceeds to Fred A. Johnson, Jr., charged elsewhere, an accountant based in West Philadelphia. Johnson then laundered the loan proceeds by disbursing the monies to various bank accounts according to Speight's and Thomas' directions. By misdirecting the funds to Johnson, the lenders were not aware that the loan monies were ultimately disbursed to individuals not entitled to receive the funds, including Speight, Thomas, and members of Speight's family. More than $3 million in loans were obtained during the course of the conspiracy.
Speight was also charged with a scheme to obtain loans from Wachovia Bank using straw borrowers. Co-defendants Jerome Manker and Andrea McCrea, a former Wachovia employee, submitted loan applications that contained false documents. Over the course of three loans, Manker and McCrae obtained from Wachovia over $300,000 in loan proceeds. In July 2007, after McCrea was no longer working for Wachoiva, McCrea bribed another Wachovia employee to push a third Manker loan using a straw borrower.
In addition to the prison term - 24 months of which is a mandatory term for the aggravated identity theft - U.S. District Court Judge Juan R. Sanchez ordered Speight to pay restitution in the amount of $2,037,700, joint and severally with his co-defendants who have already been sentenced.
Maurice Thomas was sentenced to 78 months in prison; Jerome Manker was sentenced to 51 months in prison; Andrea McCrea was sentenced to 12 months and one day in prison.The case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service Criminal Investigation. It was prosecuted by Assistant United States Attorneys Daniel Velez and Christopher Diviny.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Loan Broker Pleads Guilty in Conspiracy to Fraudulently Obtain over $100 Million in SBA-backed LoansRead the Press Release
SBA Loan Underwriters Relied on False Representations by Borrowers and BrokersBaltimore, Maryland - Joon Park, a/k/a “Joon Pak,” and “Joon Paik,” age 43, of Falls Church, Virginia, pleaded guilty today to conspiracy to commit bank fraud, in connection with a scheme to fraudulently obtain business loans guaranteed by the Small Business Administration, with resulting losses of over $100 million. Joon Park and others were charged in a second superseding indictment that was returned by a federal grand jury on March 7, 2013.
The guilty plea and indictment were announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Small Business Administration Inspector General Peggy E. Gustafson; Postal Inspector in Charge Gary R. Barksdale of the U.S. Postal Inspection Service - Washington Division; and Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation.
“SBA underwriters approved $100 million in business loans brokered by Jade Capital based on fraudulent bank statements, checks, gift letters, resumes and tax returns that made it appear as if the borrowers had invested money in the businesses,” said U.S. Attorney Rod J. Rosenstein. “When borrowers and brokers submit false information and fraudulent documents, the underwriting process is defeated and the taxpayers bear the loss.”
“The scope of this audacious scheme to fraudulently secure SBA-backed loans is outrageous,” said Inspector General Peggy E. Gustafson. “The SBA OIG will relentlessly pursue individuals who falsify documents to obtain approval for loans designed to help hard-working Americans realize their dreams of opening a business or expanding their operations. The SBA OIG appreciates the leadership of the U.S. Attorney’s Office and its partnership with the FBI in bringing forth this plea agreement.”
According to his plea agreement, Joon Park and his brother, Loren Park, owned and operated Jade Capital, a loan brokerage company specializing in securing loans for individuals interested in purchasing or refinancing small businesses in the Mid-Atlantic area. According to the indictment, Joon and Loren Park and others under their direction encouraged prospective borrowers using the services of Jade Capital to apply for business loans through the SBA’s Section 7(a) program, which guaranteed 75% - 90% of qualified loans made by banks and other commercial lending institutions. Under this program, the principals of the small business seeking the loan were required to invest a certain amount of their own money, called an equity injection, before they qualified for a loan. The banks and other lending institutions making the loan bore the risk of payment default only up to the percentage of the loan not guaranteed by the SBA.
Joon Park admitted that from 2003 until October 2011, he and others under his direction, including Nick Park (no relation), Joo Hyuk “John” Lee, Sang Hyun Kim, and In Jung Ham, submitted SBA loan applications and supporting documentation to loan originators and underwriters on behalf of their clients that contained fraudulent documents, including: bank statements for borrowers that were altered to make it look like the borrowers had more cash to inject into the business they were buying than they in fact did; counterfeit cashier’s checks and fake gift letters that made it look like the borrowers had more assets at their disposal to use as down payments than they did; fabricated resumes that made it look like the borrowers had more experience running the businesses they sought to purchase than they did; fake tax returns that made it look like the borrowers had greater income than they did; phony interim financial statements that made other businesses the borrowers owned look more profitable than they were; and a number of other misrepresentations.
The Parks charged a loan brokerage fee to both the financial institutions and the borrowers for assembling and submitting loan application packages that resulted in the issuance of SBA-guaranteed loans. The fees charged to borrowers were hidden from the financial institutions underwriting the loans. The Parks also had undisclosed ownership interests in businesses involved in some of the transactions and received loan proceeds, unbeknownst to the lenders, in a number of transactions. In one instance, the Parks did not have an ownership interest in a company involved in a transaction but persuaded the seller to assign some of the loan proceeds to them and then converted those proceeds to their own personal use.
According to his plea agreement, Joon Park also worked with a settlement attorney to facilitate loan closings for deals that would otherwise fail to meet the lending parameters of the banks making the loans, by misrepresenting to the banks and to the SBA the true amount of money involved in the transactions and/or the true names of the parties taking part in the transactions. In addition to conducting fraudulent closings, this settlement attorney wired money to Jade Capital clients to make it appear as though they qualified for loans, when they did not, and received, at Joon Park’s direction, loan proceeds to repay those loans.
Joon Park faces a maximum penalty of 30 years in prison. As part of his plea agreement, Joon Park will be required to pay a money judgment of $91,449,700 and forfeit all the property involved in the offense. U.S. District Judge William D. Quarles, Jr. has scheduled sentencing for May 28, 2013 at 1:00 p.m.
Nick Park, a/k/a Nochol Park, age 46, of McLean, Virginia, was sentenced to 33 months in prison; and Joo Hyuk “John” Lee, age 39, of Richmond, Virginia, and Sang Hyun Kim, age 35, of Fairfax, Virginia, were each sentenced to three years in prison, for conspiracy to commit bank fraud. Kim’s wife, In Jung Ham, age 30, also of Fairfax, was sentenced to a year and a day in prison, for her role in the scheme. Judge Quarles ordered Lee to pay restitution of $1,900,325 and ordered Ham to pay restitution of $216,472.92. Lee, Kim and Ham were also ordered to forfeit the proceeds of the scheme and pay money judgments of $18,764,900, $13,432,000 and $15,725,000, respectively.
In addition to Joon Park, Loren Young Park and Jade Capital & Investments, who were charged previously, the second superseding indictment included two new defendants, Seung E. Oh, a/k/a Sandy Oh, age 44, of Great Falls, Virginia; and Seung Hyun Shin, a/k/a/ Phillip Shin, age 39, of Villanova, Pennsylvania. Oh is an attorney with offices in Annandale, Virginia and the owner operator of Washington Settlement Group, a title company located in Annandale. From 2004 through 2008, Shin was the owner and operator of Cosmopolitan Title and Settlements, LLC, a title company located in Rockville, Maryland. The indictment alleges that the defendants engaged in a conspiracy to commit bank fraud, bank fraud and money laundering, resulting in losses of more than $102 million.
The defendants face a maximum sentence of 30 years in prison for the bank fraud conspiracy and for each count of bank fraud; and 20 years in prison for each count of money laundering. Seung Hyun Shin had his initial appearance on March 18, 2013, and Seung E. Oh is scheduled to have her initial appearance on April 5, 2013, in U.S. District Court in Baltimore. Loren Park is believed to be in Korea.
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.
These law enforcement actions are part of President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
United States Attorney Rod J. Rosenstein thanked the SBA Office of Inspector General, U.S. Postal Inspection Service and FBI for their work in the investigation. Mr. Rosenstein praised Assistant U.S. Attorneys Leo J. Wise and Martin J. Clarke, who are prosecuting the case.
Lapwai Man Admits Illegally Possessing FirearmRead the Press Release
COEUR D’ALENE – Alex James Ellenwood, 24, of Lapwai, Idaho, pleaded guilty today in United States District Court in Coeur d’Alene to unlawful possession of a firearm, U.S. Attorney Wendy J. Olson announced.
According to the plea agreement, on September 5, 2012, Ellenwood was arrested at a Clearwater County campground on an outstanding warrant. During a search incident to the arrest, law enforcement found a Ruger .44 pistol in Ellenwood’s backpack. Ellenwood is prohibited from possessing firearms due to his 2008 federal conviction for assault with a deadly weapon, a felony punishable by a term of imprisonment exceeding one year. Ellenwood agreed to forfeit the firearm found in his possession.
The charge of unlawful possession of a firearm is punishable by up to ten years in prison, a maximum fine of $250,000, and up to three years of supervised release.
Ellenwood is scheduled to be sentenced on June 11, 2013, before Chief U.S. District Judge B. Lynn Winmill at the federal courthouse in Coeur d’Alene.
The case was investigated by Nez Perce Tribal Police, Clearwater County Sheriff’s Office, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Federal Bureau of Investigation.
The case was prosecuted as part of Idaho’s Project Safe Neighborhoods Program, which seeks to reduce gun violence in Idaho.
Justice Department Settles with Georgia School District to Re-Zone Schools and Ensure DesegregationRead the Press Release
The Department of Justice announced last week that it has entered into a settlement agreement with the McDuffie County Schools in Georgia to modify the zoning of the district’s elementary schools and ensure the school district complies with other obligations to desegregate its schools in the areas of student assignment, faculty recruiting and assignment and transportation.
The consent order, if approved by the court, requires the district to alter the elementary school zones in order to increase the number of African-American students in the de jure white school, where the enrollment has remained majority white and disproportionate to the racial composition of the district as a whole. The consent order also requires the district to eliminate racial disparities in how teachers and staff are assigned to the district’s schools and to engage in affirmative efforts to recruit African-American personnel. The consent order also contains provisions for student transfers, gifted and talented programs, discipline, transportation, and monitoring and reporting. Finally, the district will establish a diversity advisory council to evaluate and monitor the implementation of the zone changes and the district’s continued efforts toward desegregation. The consent order allows the district, upon demonstration of successful implementation of the provisions in the order, to move for unitary status on Dec. 15, 2015.
“We applaud the McDuffie County Schools for agreeing to take prompt voluntary corrective actions to ensure that it fully meets its desegregation obligations in three years,” said Jocelyn Samuels, Principal Deputy Assistant Attorney General for the Civil Rights Division. “The Civil Rights Division will continue to work to ensure that McDuffie and all school districts under federal desegregation orders fully eliminate the vestiges of segregation in their schools.”
Edward J. Tarver, U.S. Attorney for the Southern District of Georgia, said, “I admire the McDuffie County School District’s efforts in working to amicably resolve what were once highly contentious issues in our society. The United States Attorney’s Office will provide assistance to the School District and the Civil Rights Division to ensure continued compliance with this Consent Order.”
The enforcement of the Equal Protection Clause and Title IV of the Civil Rights Act of 1964 in school districts is a top priority of the Justice Department’s Civil Rights Division. Additional information about the Civil Rights Division of the Justice Department is available on its website at www.justice.gov/crt
Justice Department Settles Service Animal Case Against Connecticut SchoolRead the Press Release
March 19, 2013David B. Fein, United States Attorney for the District of Connecticut, today announced that The Learning Clinic, a private school in Brooklyn, Conn., has agreed to pay $35,000 as compensation to a family for denying a child access to the school with his service animal. The school also has agreed to train its employees and adopt new policies to ensure compliance with the provisions of the Americans with Disabilities Act (ADA).
The Learning Clinic is a private school in Brooklyn that offers educational and clinical services through residential boarding and day school programs. The settlement resolves a Department of Justice investigation into the school’s service animal policies and practices under the ADA and the Fair Housing Act (FHA). The Department of Justice initiated this investigation after the parents of a minor child attending the school alleged that the school discriminated against their child on the basis of disability by denying the child equal access to the school’s campus with his service dog. The school failed to provide reasonable modifications to permit the child to attend school accompanied by his service dog and to live with his service dog in his room on TLC’s campus.
Under Title III of the ADA, schools are places of public accommodation and must reasonably modify policies, practices, and procedures, to allow children with disabilities equal access to education, school services, and school facilities. In addition, the FHA prohibits discrimination in school housing based on race, color, religion, national origin, sex, disability, and familial status.
This matter was handled by Assistant United States Attorney Ndidi Moses of the District of Connecticut, with the assistance of the Disability Rights and Housing Sections of the U.S. Department of Justice Civil Rights Division.
Individuals who believe that they may have been victims of discrimination can file a complaint with the U.S. Attorney’s Office by calling 203-821-3700. Additional information about the ADA can be found at www.ada.gov, or by calling the Department’s toll-free information line at (800) 514-0301 or (800) 514-0383 (TDD).
Complaints about housing discrimination can also be made by phone to the Housing Discrimination Tip Line at 1-800-896-7743 or by email at [email protected].
More information about the Civil Rights Division and the laws it enforces is available at www.justice.gov/crt.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
[email protected]Jury Convicts Edmond Man of Transporting and Downloading Child PornRead the Press Release
Oklahoma City, Oklahoma – Late last week, JORY MICHAEL NANCE, 28, of Edmond, Oklahoma, was convicted by a jury of 57 out of 59 counts of transportation, receipt, and attempted receipt of child pornography, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma.
The jury convicted Nance of transporting child pornography across state lines as he traveled with his job as well as transferring child pornography to an undercover Edmond Police Department detective through peer-to-peer file sharing. The jury also convicted Nance of downloading and attempting to download child pornography through peer-to-peer file sharing.
Nance was charged in a Superseding Indictment returned by a federal grand jury on January 22, 2013. United States District Court Judge Joe Heaton will sentence Nance in approximately three months. For each count, he faces at least five years and up to 20 years in prison, a $250,000 fine, and 5 years to life supervised release. Upon release from prison, Nance will have to register as a sex offender.
This case was part of Project Safe Childhood, the flagship program in the Department of Justice’s National Strategy for Child Exploitation Prevention and Interdiction, and was the result of an investigation conducted by the Edmond Police Department and the Federal Bureau of Investigation. The case was prosecuted by Assistant U.S. Attorneys Brandon Hale and Chris M. Stephens.
Jeannette Man Charged with Possessing Sexually Explicit Images and Videos of ChildrenRead the Press Release
PITTSBURGH, Pa. - A Westmoreland County man has been indicted by a federal grand jury in Pittsburgh on a charge of possession of material depicting the sexual exploitation of a minor, United States Attorney David J. Hickton announced today.
The one-count indictment named Timothy Kelly, 38, as the sole defendant.
According to the indictment, on or about Feb. 11, 2013, Kelly possessed visual depictions, namely, videos and images in computer graphics files, the production of which involved the use of minors engaging in sexually explicit conduct.
The law provides for a maximum total sentence of 10 years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Jessica Lieber Smolar is prosecuting this case on behalf of the government.
The Greensburg Police Department and the Federal Bureau of Investigation 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.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Jason Bryan Martin Sentenced in U.S. District CourtRead the Press Release
The United States Attorney's Office announced that during a federal court session in Great Falls, on March 18, 2013, before U.S. District Judge Sam E. Haddon, JASON BRYAN MARTIN, a 29-year-old resident of Helena, appeared for sentencing. MARTIN was sentenced to a term of:
Prison: 12 months
Special Assessment: $100
Restitution: $10,051.46
Supervised Release: 3 years
MARTIN was sentenced in connection with his guilty plea to theft of government property.
In an Offer of Proof filed by Assistant U.S. Attorney Bryan R. Whittaker, the government stated it would have proved at trial the following:
From February 25, 2002, until September 16, 2005, MARTIN was enlisted in the United States military. He was discharged on September 16, 2005, under "Other than Honorable" conditions.
Just prior to his discharge from the military, MARTIN purchased fictitious DD-214 forms from a fellow solider at Miramar Air Force Base who was responsible for providing discharge documents. These fictitious DD-214 forms showed MARTIN's discharge status as "Honorable" rather than the correct discharge status of "Other than Honorable." MARTIN then created an ink stamp signature which he then used to authenticate the fictitious DD-214 forms.
On December 7, 2006, MARTIN fraudulently re-entered the military by submitting one of these fictitious DD-214 forms to the Montana Army National Guard which reflected his prior discharge status as "Honorable." Based upon the fraudulent DD-214 form, MARTIN was re-enlisted into the Montana Army National Guard. MARTIN admitted to investigators that he created and submitted the fraudulent form for the purpose of re-enlisting in the military.
Approximately one month later, MARTIN requested Montgomery GI Bill ("MGIB") educational benefits by submitting an Application For VA Education Benefits, VA Form 22-1990. Also in support of his application, MARTIN submitted a 1606 Educational Application Form and Notice of Basic Eligibility Form attesting to his eligibility in the military for education benefits. Based upon his fraudulent representations, MARTIN was awarded MGBI benefits.
MARTIN received regular monthly (except during the summer) benefit payments under MGIB from January 2007, until May 14, 2009. Based upon his fraudulent re-enlistment, MARTIN obtained more than $10,000 in education benefits which he was not entitled to receive.
Because there is no parole in the federal system, the "truth in sentencing" guidelines mandate that MARTIN will likely serve all of the time imposed by the court. In the federal system, MARTIN does have the opportunity to earn a sentence reduction for "good behavior." However, this reduction will not exceed 15% of the overall sentence.
The investigation was conducted by the U.S. Department of Veterans Affairs - Office of Inspector General.
Indictment Charging Three Luzerne County Residents for Firearms Straw Purchases, Unlawful Possession of Firearms and Cocaine Distribution UnsealedRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced that an indictment returned on March 12, 2013 charging three Luzerne County residents with their alleged roles in a conspiracy to make straw purchases of firearms and other firearms charges, including possession of a machine gun and distribution of cocaine was unsealed Monday following their arrest.
According to United States Attorney Peter J. Smith, Jovon Martin, age 31, of Kingston, was charged with conspiracy to make false statements in connection with the purchase of a firearm, prohibited possession of a firearm, possession of a machine gun in furtherance of drug distribution, possession of an illegal weapon (machine gun), possession of an unregistered weapon (machine gun) and possession with intent to deliver cocaine.
Christine Hanahan, age 30, also of Kingston, was charged with unlawful transfer of a firearm to a prohibited possessor. John Teslicko, age 50, of Larksville, was charged with conspiracy to make false statements in connection with the purchase of a firearm, false statements in connection with the purchase of a firearm, unlawful transfer of a firearm to a prohibited possessor and prohibited possession of a firearm. The offenses allegedly occurred between March 2012 and March 2013 in Luzerne County.
The straw purchase of a firearm is the unlawful use by individuals who are unable to purchase a firearm to utilize others who do not have a criminal record to make the purchase in their own name and then transfer the firearm to the prohibited possessor. The investigation also allegedly uncovered cocaine distribution closely related to the straw purchases.Martin, Hanahan and Teslicko were arraigned before Magistrate Judge Thomas Blewitt and Martin was ordered detained pending trial on May 20, 2013.
This case was the result of a joint investigation between the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Kingston Police Department.
Prosecution is assigned to Assistant United States Attorney Amy C. Phillips.Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilty is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
In this particular case, Martin faces a mandatory minimum of 30 years’ imprisonment.
The maximum penalty under the federal statute for Hanahan and Teslicko is 10 years’ imprisonment.
All three face a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
Indictment Charges Tax Preparer with Fraud SchemeRead the Press Release
PHILADELPHIA - Crystal Graham, 42, of Philadelphia, was charged today by indictment with filing false claims with the United States through federal income tax returns she prepared for clients, announced United States Attorney Zane David Memeger. According to the indictment, Graham created bogus wage statements and other false financial information which she placed on tax returns that she prepared for individuals for the purpose of obtaining tax refunds in the names of the filers. The refunds were based on the filer’s alleged entitlement to the First Time Home Buyer’s Credit and the Earned Income Tax Credit which are two tax credits that could result in a tax refund in 2008 even when the filer had little, if any, taxes withheld from income in that year.
According to the Indictment, Graham had her clients sign statements giving her the authority to deposit the clients’ refund checks into her savings account, or to have the refund checks placed on prepaid access devices. This gave Graham the ability to take a substantial portion of the fraudulent refunds before giving her clients the remainder.
If convicted, Graham faces a maximum possible statutory sentence of 55 years in prison, a fine of $2.75 million, a special assessment of $1,100, and three years of supervised release.The case was investigated by the Internal Revenue Service Criminal Investigation. It is being prosecuted by Assistant United States Attorney Floyd J. Miller.
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, 215-861-8525Huntsville Narcotic Treatment Center Agrees to Pay $95,000 PenaltyRead the Press Release
BIRMINGHAM – A Huntsville-area Methadone treatment center has agreed to pay the United States a $95,000 penalty for numerous record-keeping and inventory violations cited in a 2012 regulatory investigation, announced Acting U.S. Attorney John H. England III and Drug Enforcement Administration Assistant Special Agent in Charge Clay A. Morris.The settlement agreement between the U.S. Attorney for the Northern District of Alabama and Metro Treatment of Alabama, doing business as Huntsville Metro Treatment Center, was finalized Monday. The settlement was reached without any filings in U.S. District Court. With payment of the penalty, the government agrees to release Huntsville Metro Treatment Center from all civil liability for violations of record-keeping requirements established under the Controlled Substances Act.
"The $95,000 penalty in this matter represents the largest penalty ever collected in Alabama in a DEA drug diversion investigation," England said. "It is imperative that treatment centers which handle controlled substances keep clear and current records on the shipments and use of those narcotics so that they can be tracked and not diverted for illegal use in our communities," he said.
The Huntsville Metro Treatment Center is a facility registered with the DEA. It is one of several narcotic treatment centers in Alabama owned or operated by Colonial Management Group. The settlement agreement comes in response to allegations by the DEA that the Huntsville center failed to maintain complete and accurate records and inventories of controlled substances dispensed or received.
The violations cited in a DEA Scheduled Regulatory Investigation from March 26, 2012, to June 26, 2012, at the Huntsville center included its failure to account for about 3,423 dosage units of Methadone and failure to accurately complete required DEA forms on multiple shipments of Methadone. The DEA investigation also cited the center for not properly maintaining DEA forms and for a "general failure to maintain complete and accurate records."
The Huntsville center, as part of the settlement agreement, denies any intentional violation of regulations, but states it has altered several record-keeping procedures at the DEA's request.
Highland Woman Sentenced for Access Device FraudRead the Press Release
A Highland woman, convicted of Access Device Fraud, was sentenced in federal district court on March 19, 2013, to 3 years of home detention as a condition of a term of her sentence of 5 years of probation, ordered to pay $8,099.68 in restitution, and ordered to pay a special assessment of $100.00, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today.
On September 14, 2012, Christina Dawn Whittaker, 52, admitted to using the social security number and date of birth of another person, without that person’s knowledge or permission, to open two credit card accounts. The credit cards were opened and utilized to defraud multiple companies between October of 2011 and March of 2012.
The investigation was conducted by the United States Postal Inspection Service and is being prosecuted by Assistant United States Attorney Ranley R. Killian.
Hardin County Lawyer Sentenced for Bank FraudRead the Press Release
Department of Justice
Office of Public AffairsBEAUMONT, Texas – A 40-year-old Silsbee, Texas lawyer has been sentenced to federal prison for bank fraud in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
Matthew Taylor Morones pleaded guilty on Sep. 6, 2012 to bank fraud and was sentenced to 24 months in federal prison today by U.S. District Judge Ron Clark.
According to information presented in court, on Dec. 21, 2005, Morones was appointed as the receiver for the Indian Paintbrush Development (IPD). At that time, the organization had approximately $365,000 in its bank accounts, held at two different financial institutions. From May to July 2007, Morones used the money from IPD’s account to purchase six certificates of deposit (CDs) from Guaranty Bank totaling $365,000. On July 30, 2007, Morones obtained a $90,000 loan from Guaranty Bank, which was used to purchase a home. Morones used one of the CDs purchased with IPD’s money as collateral to obtain the loan. Morones was indicted by a federal grand jury on Mar. 21, 2012.
Morones has already paid back over $200,000.00. He was ordered today to pay the remaining restitution in the amount of $165,000.00.
This case was investigated by the Federal Bureau of Investigation and prosecuted by Assistant U.S. Attorney Christopher T. Tortorice.
Goodwin Announces Guilty Plea from Mingo Pill Mill OperatorRead the Press Release
CHARLESTON, W.Va. –U.S. Attorney Booth Goodwin today announced that a Williamson woman has pleaded guilty in connection with her role in operating a Mingo County pill mill. Myra Sue Miller, 49, of Williamson, Mingo County, W.Va., pleaded guilty in federal court in Charleston to misusing a Drug Enforcement Administration registration number that did not belong to her. Miller admitted that beginning on February 17, 2010 until February 19, 2010, she and other known individuals used the DEA registration number assigned to former Mingo County doctor William F. Ryckman to illegally distribute the painkiller hydrocodone, as well as the prescription drug alprazolam, also known as “Xanax.”
Miller was employed as the office manager at Ryckman’s principal medical practice formerly located in Williamson, W.Va. Miller admitted that on February 17, 2010, she faxed several blank “doctors lists” from Ryckman’s Williamson office to Dr. Ryckman who, at the time, was at his Pennsylvania residence.
“This pill mill did enormous harm across a wide swath of our state and beyond,” said U.S. Attorney Goodwin. “Every time we put a law-breaking doctor or clinic out of business, it’s a big step toward getting this problem under control.”
Ryckman previously admitted that he signed and faxed the list back to Miller and other known individuals who were at his Williamson office. Ryckman also previously admitted that under his authorization, the blank lists were then improperly used to prescribe controlled medications for individuals that he did not evaluate or see as patients.
Miller further admitted that during the scheme, she directed other known individuals to fill in the blank doctor’s list with information that included patients' names, dates of birth and prescription type, strength, and quantity. The improperly authorized lists were then faxed to local pharmacies in order to be filled and dispensed. Miller also admitted that while Dr. Ryckman was absent from his Williamson office on February 18 and 19, 2010, she accepted cash fees from known individuals who arrived at the office and then directed them to one of at least two pharmacies located in Mingo County, W.Va., to obtain prescription painkillers that included hydrocodone and Xanax.
William Ryckman, 66, was previously sentenced in March 2012 to six months in prison followed by one year of supervised release for conspiracy to misuse his Drug Enforcement Administration (DEA) registration number.
Miller faces up to four years in prison and a $250,000 fine when she is sentenced on June 18, 2013 by United States District Judge John T. Copenhaver, Jr.
The matter is being prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers in communities across the Southern District.
Assistant United States Attorney John Frail is in charge of the prosecution.Gerrardstown Resident Enters Plea 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 — A 22-year old Gerrardstown, West Virginia, resident entered a plea of guilty on March 13, 2013, in United States District Court in Martinsburg before Magistrate Judge David J. Joel.
United States Attorney William J. Ihlenfeld, II announced that: TONI LEE OLSHEFSKI-BEATTY entered a plea of guilty to “Theft of Government Funds.” From March 1, 2011, to March 1, 2012, OLSHEFSKI-BEATTY received, negotiated and converted to her own use $8,834 in benefits which were designated for a qualified recipient.
This case was prosecuted by Assistant United States Attorney Michael D. Stein and investigated by the United States Social Security Administration-Office of Inspector General.
Georgia Man Pleads Guilty to Sending Notice over the Internet Seeking to Produce and Receive Child PornographyRead the Press Release
Jacksonville, Florida - United States Attorney Robert E. O'Neill announced that Stephen Joseph Woods (34, Savannah, Georgia) has pleaded guilty to sending a notice over the Internet offering to produce and receive child pornography. Woods faces a mandatory minimum penalty of 15 years, up to 30 years in federal prison and a potential life term of supervised release. Woods has been in custody since his arrest on November 2, 2012. A sentencing hearing has not yet been set.
According to court documents, during October and November 2012, multiple law enforcement agencies including the Volusia County Sheriff’s Office (“VCSO”) and the St. Johns County Sheriff’s Office (“SJCSO”), conducted operations in which officers worked undercover on the Internet to target individuals seeking to have sex with minor children. On October 12, 2012, an undercover SJCSO detective, posing as the relative of a 14-year-old female, posted a notice on a bulletin board on a website. Woods responded to the notice by email. During the ensuing email conversation, Woods confirmed that the “child” was 14 years-old and suggested in substance that he (Woods) could teach the “child” about sex.
During the next two weeks, Woods and the undercover detective, who used the persona of the child, engaged in online conversations in which Woods indicated his desire to have sex with the child.On October 29, 2012, Woods and the “child” engaged in an online conversation and discussed a location for their meeting. They discussed meeting in St. Augustine on November 2, 2012. During the conversations, Woods offered several times to produce videos of the “child” engaged in sexually explicit conduct. On the evening of November 2, 2012, Woods arrived at the agreed upon motel in St. Augustine. Woods approached the undercover detective, whom he believed was the “child’s” relative, and asked the detective to have the “child” come outside. Woods was subsequently arrested.
This case was investigated by the St. Johns County Sheriff’s Office, the Clay County Sheriff’s Office, the Volusia County Sheriffs’ Office, the Bay County Sheriff’s Office, and the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney D. Rodney Brown.
It is another case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Fort Pierre Man Pleads Guilty to Possession of A Controlled SubstanceRead the Press Release
United States Attorney Brendan V. Johnson announced that Brent Flood, age 23, of Fort Pierre, South Dakota appeared before U.S. Magistrate Judge Mark A. Moreno on March 13, 2013 and pled guilty to the Superseding Information that charged him with Possession of a Controlled Substance. The maximum penalty upon conviction is 1 year of imprisonment, a $1,000 but not more than $100,000 fine, or both; 1 year of supervised release; an additional year of supervised release upon revocation and $25 special assessment to the Victim Assistance Fund. Restitution may also be imposed.
The charge stems from an incident on April 5, 2012 wherein Flood knowingly and intentionally possessed marijuana, a Schedule I controlled substance.
The investigation was conducted by the Northern Plains Safe Trails Drug Task Force and Assistant U.S. Attorney Kathryn N. Rich is prosecuting the case.
Flood was remanded to the custody of the U.S. Marshal pending sentencing which has been set for May 13, 2013.
Former Fugitive Sentenced on Conspiracy to Defraud the IRSRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and José A. Gonzalez, Special Agent in Charge, Internal Revenue Service, Criminal Investigation Division (IRS-CID), Miami Field Office, announce today’s sentencing of defendant Domingos Trofino, 64, on charges of conspiracy to defraud the IRS. Trofino was sentenced to 14 months in prison, which he has already served. Trofino was charged in a superseding indictment filed on October 13, 2000. He was extradited from Italy on August 10, 2012, and was detained pending trial since that time.
According to documents filed in court, during 1989, Trofino formed Compubras Export and Import Corporation (Compubras) in Miami, Florida. Compubras manufactured and sold electronics and computer hardware to customers in South Florida, Paraguay and Uruguay. As part of its business operations, Compubras maintained a dual set of records. One set of records accurately reflected its business activities. The second set of records was created to understate its actual income in an attempt to support a multi-year scheme to evade the payment of federal income taxes. The false set of records included false invoices that understated the true amount of Compubras’ sales and allowed the defendant and Compubras’ other shareholders to skim cash sales proceeds from Compubras without reporting the funds as income.
According to documents filed with the court, the IRS conducted an audit of Compubras, during which it received only with the false set of corporate records. After the IRS determined that it had been provided with fraudulent business records, a search warrant was obtained for the downtown Miami offices of Compubras and the personal residences of the defendant and other Compubras shareholders. Evidence seized during the execution of these search warrants confirmed the fraudulent nature of the previously produced business records.
Mr. Ferrer commended the investigative efforts of IRS-CID. This case is being prosecuted by Assistant U.S. Attorney Sean Cronin.
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.
Former East Bay Resident Sentenced for His Role in Tax Refund ScamRead the Press Release
SAN FRANCISCO – Clexton Ward was sentenced last week to 24 months in prison for conspiring to file false claims, United States Attorney Melinda Haag and Internal Revenue Service Criminal Investigation Special Agent in Jose M. Martinez, announced.
Ward pleaded guilty on August 22, 2012 to one count of Conspiracy to File False Claims. In pleading guilty, Ward acknowledged participating in a conspiracy to file false income tax returns electronically with the IRS. Ward admitted that, as part of the conspiracy, he gathered and supplied the names, personal identifying information and bank accounts that were used to file the false tax returns. Ward acknowledged that the false tax returns requested that the fraudulent refunds be deposited into various bank accounts controlled by either him or by his co-conspirators, and that he and his co-conspirators split the proceeds from the fraudulent refunds.
On April 17, 2012, Ward was charged with one count of Conspiracy to File False Claims. He is scheduled to begin his sentence on May 5, 2013.
Thomas Newman is the Assistant U.S. Attorney, who is prosecuting this case. The prosecution is the result of an investigation by the IRS, Criminal Investigation.
Former Credit Union Employee in Dickinson County Sentenced for Embezzling $85,000Read the Press Release
TOPEKA, KAN. – A former employee of a credit union in Dickinson County has been sentenced to two years probation for embezzling $85,000, U.S. Attorney Barry Grissom said today. She also was ordered to pay $85,000 in restitution.
Deborah A. Bomia, 46, Enterprise, Kan., pleaded guilty to one count of embezzlement. In her plea, she admitted the crime occurred from April 30, 2005, to Aug. 8, 2011, while she worked for Enterprise Credit Union in Enterprise, Kan.
Bomia kited checks between accounts in her name at Enterprise Credit Union, creating false and fictitious balances. The embezzlement involved making a large deposit toward the end of the month, which would be included in the general ledger, but the actual deposit would not be sent to the corporate checking account until around the middle of the next month. At the same time, another larger check would be drafted out of Bomia’s credit union checking account. The final deposit to the general ledger was recorded July 29, 2011, in the amount of $85,000. The money was never deposited to the credit union’s corporate account.
Grissom commended the FBI and Assistant U.S. Attorney Rich Hathaway and Assistant U.S. Attorney Christine Kenney for their work on the case.Florida Man Sentenced for Role in $30 Million Telemarketing Scam That Victimized over 22,000 PeopleRead the Press Release
Daniel L. Gregg, 40, of Boynton Beach, FL, was sentenced to 27 months in prison, 3 years supervised release, and ordered to pay a $375 file and a $100 special assessment fee, Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today. Gregg pled guilty to one count of conspiracy to commit mail fraud and wire fraud. The indictment alleged that Gregg and others were involved in a telemarketing scam under the names Universal Marketing Solutions and Creative Vacation Solutions. The fraudulent companies, which operated in Florida and bilked over 22,000 victims of $30 million dollars, victimized consumers in all fifty states, the District of Columbia and Puerto Rico, all ten Canadian provinces and the Northwest Territory of Canada. There were at least 54 victims in twenty eight (28) of the thirty eight (38) counties comprising the Southern District of Illinois.
The criminal indictment alleged that Gregg was employed by a Universal Marketing Solutions and Creative Vacation Solutions franchise office. Beginning in October 2007, and continuing through at least January 2010, telemarketers for Universal Marketing Solutions and Creative Vacation Solutions placed cold calls to timeshare owners and then falsely represented that their company had actual buyers for the owners’ timeshare property. Gregg solicited advanced fees of up to several thousand dollars from each victim in purported closing costs – fees they promised would be refunded to the owner once the closing on the property occurred. Many timeshare owners were told that their closings were scheduled within the next 60 to 90 days. Despite collecting fees from 22,000 victims, not a single timeshare unit was ever sold. Gregg and his co-conspirators simply pocketed the closing costs.
Approximately twenty-four others have been charged in connection with the Creative Vacation Solutions telemarketing scam. The company’s former chief executive, Jennifer Kirk, pled guilty to a criminal Information on June 30, 2011. She was sentenced on January 9, 2012 to over 16 years in prison and five years’ supervised release. More than a dozen others have also been sentenced, receiving prison terms that range from 1 to 14 years.
The prosecution follows an investigation by the St. Louis Field Office of the Chicago Division of the United States Postal Inspection Service, the Florida Attorney General’s Office, the Florida Department of Agriculture and Consumer Services, and the Boynton Beach Florida Police Department. The prosecution of the case was handled by Special Assistant U.S. Attorney Katherine Lewis and Assistant U.S. Attorney Bruce Reppert.
Federal Jury Finds Native Mob Gang Members Guilty of Attempted Murder, Racketeering, and Other ChargesTwenty-one of Twenty-five Indicted Gang Members Earlier Pleaded Guilty to RICO-related Charges, While Another Pleaded Guilty to MurderRead the Press Release
MINNEAPOLIS— Earlier today in federal court, a jury found three members of the Native Mob street gang guilty on a number of charges related to the gang’s criminal activity. Following a nearly two-month trial, the jury found Wakinyon Wakan McArthur, age 34, guilty on six counts, including racketeering; William Earl Morris, age 25, guilty on four counts; and Anthony Francis Cree, age 26, guilty on six counts, including racketeering and attempted murder (see attached chart for specific charges). On July 19, 2012, the defendants were charged in a superseding indictment.
Following today’s conviction, U.S. Attorney Todd Jones said, “The Native Mob has wreaked havoc on tribal and non-tribal communities across Minnesota and our region. Its members traffick in drugs and guns, using violence, intimidation, and in some instances, murder, against those who stand in their way. This case, brought against more than two dozen Native Mob members, including its leaders, exemplifies the broad reach and effectiveness of a federal RICO prosecution, which carries penalties of up to life in prison, in attacking violent criminal organizations. This investigation took several years and the cooperation of numerous local, state, federal, and tribal law enforcement agencies. Their hard work has made our communities safer."
The Native Mob is a regional criminal gang that originated in Minneapolis in the early 1990s. Members routinely engage in drug trafficking, assault, robbery, and murder. Membership is estimated at 200, with new members, including juveniles, regularly recruited from communities with large, male, Native American populations. Association with the gang is often signified by wearing red and black clothing or sporting gang-related tattoos. According to the 2011 National Gang Threat Assessment, the Native Mob is one of the largest and most violent American Indian gangs in the U.S. and is most active in Minnesota and Wisconsin.
The evidence presented at trial proved that since at least the mid-1990s, the named defendants and others have conspired to conduct criminal activity through an “enterprise,” namely, the Native Mob, in violation of the federal Racketeering Influenced and Corrupt Organizations Act (“RICO”). The primary objective of this “enterprise” is to preserve, protect, promote, and enhance the Native Mob’s power, territory, and financial gains.
To that end, gang members distribute illegal drugs, from crack cocaine to ecstasy. They also provide monetary support to other members, including those incarcerated; share with one another police reports, victim statements, and other case discovery; hinder or obstruct officials from identifying or apprehending those wanted by the law; and intimidate witnesses to Native Mob crimes. Moreover, they maintain and circulate firearms for gang use and commit acts of violence, including murder, against individuals associated with rival gangs.
On December 21, 2012, Shaun Michael Martinez, age 35, pleaded guilty to shooting and killing fellow gang member Jeremee Kraskey. Martinez, also known as Tinez, pleaded guilty to one count of murder resulting from the use and carrying of a firearm during and in relation to a crime of violence.
In his plea agreement, Martinez admitted that on February 26, 2011, he killed Kraskey to prevent him from offering law enforcement information about the Native Mob’s criminal activities, which were the subject of a joint federal-state investigation. Martinez specifically admitted that on February 26, 2011, he drove Kraskey to a residence in the 3500 block of 14th Avenue South in Minneapolis, where he shot Kraskey three times. Martinez further admitted his use of a firearm occurred during and in relation to a conspiracy to violate federal racketeering laws.
According to the evidence presented at trial, the defendants committed numerous overt acts as evidence of their “criminal enterprise”:
Immediately after the death of Kraskey, McArthur and others held an “emergency” Native Mob council meeting to discuss, among other things, Kraskey’s murder.
On March 4, 2010, McArthur, Cree, and others attempted to kill a man by shooting him three times with a .40-caliber handgun, the attack being in retaliation for the man’s supposed cooperation with law enforcement. At the time of the shooting, the man was holding his five-year-old daughter in his arms.
On July 10, 2010, McArthur and others attended a meeting to discuss killing enemies of the Native Mob, the transportation of firearms from northern Minnesota to Minneapolis, the storage and location of gang firearms, drug trafficking, collecting money for incarcerated Native Mob members, and the identity of persons believed to be cooperating with law enforcement against the Native Mob.
On March 7, 2010, in south Minneapolis, Native Mob members attempted to kill a Native Vice Lord gang member by shooting him in the neck.
On August 24, 2010, McArthur ordered members of the Native Mob a drive-by shooting of a rival gang member’s apartment in Bemidji.
On March 28, 2011, McArthur ordered members of the Native Mob to conduct a home invasion in Cass Lake.
For their crimes, the defendants who were tried and convicted in this case face a potential maximum sentence of between 20 years and life in federal prison. Since the federal justice system does not have parole, prison terms will be served virtually in their entirety behind bars. United States District Court Judge John R. Tunheim will determine their sentences at a future hearing, yet to be scheduled. See the attached chart for a list of other defendants and charges.
In addition to the defendants in this case, a number of Native Mob members have been prosecuted in related cases: Kenny Roberts and Corey Benjamin were convicted in 2010 of being armed career criminals in possession of firearms; Gordon Reese was convicted in 2007 of assault, methamphetamine trafficking, and possession of firearms, and he is serving a 30-year sentence; Rueben Crowfeather was convicted in 2008 of drug trafficking and has served his sentence; and Alden Fairbanks has pleaded guilty to racketeering conspiracy charges and is awaiting sentencing.This case was the result of a long-term, cross-jurisdictional investigation conducted by numerous local, state, federal, and tribal law enforcement officers dedicated to making Minnesota’s streets and communities safer. These agencies include representatives from the U.S. Bureau of Alcohol, Tobacco, Firearms & Explosives; the U.S. Drug Enforcement Administration; the U.S. Bureau of Indian Affairs; the FBI-funded Headwaters Safe Trails Task Force; the Paul Bunyan Drug Task Force; the Minnesota Department of Corrections; the Minnesota Bureau of Criminal Apprehension; the Carlton County Sheriff’s Office; the Mille Lacs Tribal Police Department; the Bemidji Police Department; and the Minneapolis Police Department. These investigators were assisted by those from—in alphabetical order—the Becker County Sheriff’s Office, the Beltrami County Sheriff’s Office, the Carlton County Attorney’s Office, the Cass County Attorney’s Office, the Cass County Sheriff’s Office, the Crow Wing County Sheriff’s Office, the Douglas County Sheriff’s Office of Wisconsin, the Duluth Police Department, the Fon du Lac Tribal Police Department, the Fridley Police Department, the Itasca County Sheriff’s Department, the Hennepin County Attorney’s Office, the Hennepin County Sheriff’s Office, the Hubbard County Sheriff’s Office, the Leech Lake Tribal Police Department, the LCO Reservation Police Department, the Lower Sioux Tribal Police Department, the Mahnomen County Sheriff’s Office, the Minnesota State Patrol, the Mille Lacs County Attorney’s Office, the Mille Lacs County Sheriff’s Office, the New Brighton Police Department, the North Central Drug Task Force, the Prior Lake Police Department, the Red Lake Tribal Police Department, the Redwood County Sheriff’s Office, Richfield Police Department, the Sherburne County Sheriff’s Office, the St. Paul Police Department, the U.S. Marshals Service, the Minneapolis Violent Offender Task Force, the Washington County Sheriff’s Office, and the White Earth Tribal Police Department.
This case was prosecuted by Assistant U.S. Attorneys Andrew R. Winter and Steven L. Schleicher.Chart
Federal Grand Jury in South Bend Returns IndictmentsRead the Press Release
FOR IMMEDIATE RELEASECONTACT: Mary L. Hatton
www.usdoj.gov/usao/inn/ Fax: (219) 852-2770
South Bend, IN—The United States Attorney's Office announced that a Grand Jury sitting in South Bend, Indiana, returned the following Indictments on March 13, 2013:
Christina Glen, 43, of LaPorte, Indiana, was charged in a five-count Indictment with one count theft of government property and four counts of wire fraud.These charges were filed as a result of an investigation by the Indiana Department of Workforce Development and the United States Department of Labor.This case has been assigned to and will be prosecuted by Assistant United States Attorney Barbara Z. Brook.
Francisco Perez, 32, of Gary, Indiana, and Gilberto Galindo-Lopez, age 32, of Los Angeles, California, were charged in a one-count Indictment with possession with the intent to distribute a controlled substance.These charges were filed as the result of an investigation by the Drug Enforcement Administration.This case has been assigned to and will be prosecuted by Assistant United States Attorney Frank E. Schaffer.
The United States Attorney's Office emphasized that an Indictment is merely an allegation and that all persons charged are presumed innocent until and unless proven guilty in court.
Emissions Inspectors at Vehicle Inspection Stations in Arlington, Texas, Sentenced for Falsifying Texas State Emissions Test ResultsRead the Press Release
DALLAS — Six residents of Arlington, Texas, who pleaded guilty to their respective roles in falsifying Texas state emissions tests at two state-certified inspections stations in Arlington, have been sentenced, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
“Everyone has a right to breathe clean air, free from excessive vehicle emissions,” said Ivan Vikin, Special Agent in Charge of EPA’s criminal enforcement program in Texas. “In order to protect the public from harmful air pollutants, governments must have accurate and honest vehicle emissions tests. The defendants generated thousands of fraudulent inspections and certificates and cynically lined their pockets as they thumbed their noses at our nation’s environmental laws. This is one of the largest vehicle emission fraud cases in the country and is an excellent example of government agencies working together to protect both the public and the environment.”
“I commend the excellent investigative work by the U.S. Environmental Protection Agency, Criminal Investigation Division; the Texas Department of Public Safety; and the Texas Commission on Environmental Quality,” said U.S. Attorney Saldaña. “As these convictions illustrate, this office, in partnership with these agencies, will aggressively prosecute those who deliberately ignore the nation’s Clean Air Act.”
The Clean Air Act authorizes the U.S. Environmental Protection Agency (EPA) to establish National Ambient Air Quality Standards (NAAQS) to protect the public health and welfare and to regulate emissions of hazardous air pollutants. Areas that exceed the NAAQS are known as “non-attainment areas.” Depending on the amount of pollution that exceeds the standards, areas are classified as marginal, moderate, serious, severe or extreme. The North Texas Region that includes Dallas and Tarrant counties, is classified as a “serious” non-attainment area by the EPA. Vehicles are required to pass annual inspections to ensure that their emissions do not exceed limits for hydrocarbons, nitrogen oxide and other compounds.
Nghiem Van Tran, 54, and Nghi Cong Tran, 32, who each pleaded guilty to one count of conspiracy to violate the Clean Air Act, were sentenced by U.S. District Judge Barbara M. G. Lynn to 15 months in federal prison. In addition, Nghiem Van Tran was ordered to pay a $5,000 fine.
Ngan Tien Tran, 29, pleaded guilty to one count of making a Clean Air Act false statement and was sentenced by Judge Lynn to 12 months in federal prison.
Dahn Cong Tran, 26, Bich Dong Ngo, 26, and Huy Ngoc Nguyen, 26, were each sentenced to 12 months of probation, following each of their guilty pleas to one count of making a Clean Air Act false statement. Judge Lynn ordered that Danh Cong Tran’s probation include eight months of home confinement.
According to documents filed in the case, the inspection stations, Mike’s Autocare, located on North Mesquite Street in Arlington and Tommy Tech, located on Peach Street in Arlington, performed approximately 7,656 fraudulent emissions tests between August 2009 and March 2011. The defendants circumvented the required emissions testing procedures by substituting vehicles that would pass the emissions test in place of vehicles that had previously failed or showed equipment malfunctions. In most instances, the vehicle needing an emissions test was not present at Mike’s or Tommy Tech when the emissions tests were conducted, and the defendants who conducted the fraudulent tests received the necessary identifying vehicle information from Nghiem Van Tran and Nghi Cong Tran via a text message or a handwritten slip of paper. The defendants generated fraudulent emissions certificates and transmitted fraudulent testing results to the Texas Information Management System (TIMS) database managed by the Texas Department of Public Safety.
The defendants demanded up to $80 for each fraudulent test, well above the state-mandated maximum charge of $39.75. Proceeds from the fraudulent emissions tests were deposited into a bank account for “Upland Investment,” which was controlled by Nghiem Van Tran.
Assistant U.S. Attorney Stephen P. Fahey prosecuted.
Ebensurg Woman Admits Assisting A Co-Conspirator Conceal Money from IRSRead the Press Release
JOHNSTOWN, Pa. - A resident of Ebensburg, Pa., pleaded guilty in federal court to a charge of conspiracy, United States Attorney David J. Hickton announced today.
Roxanne Lamer, 46, pleaded guilty to one count before United States District Judge Kim R. Gibson.
In connection with the guilty plea, from June 9, 2007, to April 15, 2008, Lamer conspired with others to defraud the United States by assisting a co-conspirator in concealing money from the Internal Revenue Service in order for the co-conspirator to avoid paying income tax.
Judge Gibson scheduled sentencing for Aug. 9, 2013, at 10:30 a.m. The law provides for a maximum total sentence of 5 years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Stephanie L. Haines is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation and the Internal Revenue Service Criminal Investigation conducted the investigation that led to the prosecution of Lamer.
Dustin Roy Gilpin Pleads Guilty in U.S. Federal CourtRead the Press Release
The United States Attorney's Office announced that during a federal court session in Missoula, on March 18, 2013, before U.S. District Judge Dana L. Christensen, DUSTIN ROY GILPIN, a 33-year-old resident of Kalispell, pled guilty to receipt of obscenity. Sentencing has been set for July 2, 2013. He is currently released on special conditions.
In an Offer of Proof filed by Assistant U.S. Attorney Cyndee L. Peterson, the government stated it would have proved at trial the following:
As part of an Internet Crimes Against Children Task Force investigation, a Madison County Deputy Sheriff determined an IP address in Kalispell was offering known child pornography files available for download via the Internet. The subscriber information for that IP address was GILPIN'S residence. The Flathead County Sheriff's Office obtained a search warrant for that residence.
On July 3, 2012, the warrant was served, and two generic desktop computers were seized and subsequently forensically examined.
On the first computer the examiner located image files which depict obscene matters of indecent character, specifically children engaged in sexual conduct. The examiner determined that some of the files were associated with the peer-to-peer file sharing program LimeWire. The examiner also determined the files were created between May 2012 and July 2012.
On the second computer the examiner located image files which depict obscene matters of indecent character, specifically children engaged in sexual conduct. The examiner determined these files were also associated with the peer-to-peer file sharing program LimeWire. The files were created between September 29, 2011, and March 13, 2012.
GILPIN faces possible penalties of 5 years in prison, a $250,000 fine and 3 years supervised release.
The investigation was a cooperative effort between the Internet Crimes Against Children (ICAC) Task Force, the Madison County Sheriff's Office, the Flathead County Sheriff's Office, and the Montana Division of Criminal Investigation.
Drug Dealer Sentenced to 77 Months in Federal PrisonRead the Press Release
EUGENE, Ore. – On March 19, 2013, Demarcos Montel Wright, 33, of Springfield, Oregon, was sentenced by U.S. District Court Chief Judge Ann Aiken to 77 months in federal prison for possession with intent to distribute crack cocaine and felon in possession of a firearm. Upon his release from prison, Wright will be on supervised release for three years.
On March 13, 2012, Springfield Police Department detectives executed a search warrant on Wright’s person and his residence in Springfield, Oregon. Wright had a small amount of crack cocaine on his person. At Wright’s residence detectives located approximately one ounce of crack cocaine, scales and three pistols. One pistol was stolen and another had an extended capacity magazine. Wright admitted that he was involved in distributing cocaine. Wright was previously a member of the Gangster Disciples gang.
This case was investigated by the Springfield Police Department, the Drug Enforcement Administration, the Bureau of Alcohol, Tobacco, Firearms and Explosives and was prosecuted by Assistant U.S. Attorney Jeffrey S. Sweet.
District Man Sentenced to Five Years in Prison for Stabbing A Man in the Neck-Defendant Used Screwdriver in the Attack-Read the Press Release
WASHINGTON - Alonzo Douglas Hebron, 53, of Washington, D.C., was sentenced today to five years in prison for stabbing a man in the neck with a screwdriver during an altercation in Northeast Washington, U.S. Attorney Ronald C. Machen Jr. announced.
Hebron pled guilty in January 2013 in the Superior Court of the District of Columbia to assault with a dangerous weapon. He was sentenced by the Honorable Patricia A. Broderick. Upon completion of his sentence, Hebron will be placed on three years of supervised release.
According to the government’s evidence, on Nov. 23, 2012, at approximately 2:45 p.m., the Metropolitan Police Department (MPD) was called to an apartment in the 1100 block of Queen Street NE, where officers found a man suffering from a stab wound to the neck area. Police determined that the victim, Hebron, and two others had been inside the apartment talking. At one point, Hebron had gotten into an altercation with the victim, escalating to the point that he stabbed the victim in the neck with a screwdriver.
The victim suffered massive bleeding from the wound and was transported to a hospital for emergency attention. Hebron fled the scene. The two eyewitnesses helped the police identify Hebron through the use of a photo-array and he was later arrested based on an arrest warrant.
In announcing today's sentence, U.S. Attorney Machen commended the work of the Metropolitan Police Department. He also expressed appreciation for the efforts of Assistant U.S. Attorney John C. Truong, who investigated and prosecuted the case.
13-102Deported Alien Sentenced to Time Served for Illegally Re-entering United StatesRead the Press Release
PITTSBURGH - An individual found in Coraopolis, Pa., has been sentenced in federal court to time served on his conviction of re-entry into the United States after deportation, United States Attorney David J. Hickton announced today.
United States District Judge Cathy Bissoon imposed the sentence on Mauro Zerecero-Soto, 24, formerly from Mexico.
According to the information presented to the court, Mauro Zerecero-Soto, an alien, was removed from the United States by U.S. Immigration and Customs Enforcement on April 5, 2011. Mauro Zerecero-Soto was found in Coraopolis on Jan. 4, 2013.
Assistant United States Attorney Paul E. Hull prosecuted this case on behalf of the government.
The U.S. Immigration and Customs Enforcement conducted the investigation leading to the indictment in this case.
Deported Alien Charged with Immigration ViolationRead the Press Release
PITTSBURGH, Pa. - An individual found in Adams Township, Butler County, Pa., has been indicted by a federal grand jury in Pittsburgh on a charge of re-entry into the United States after deportation, United States Attorney David J. Hickton announced today.
The one-count indictment named Marcio Martinez-Bustamante, 31, formerly from Honduras, as the sole defendant.
According to indictment, Marcio Martinez-Bustamante, an alien, was removed from the United States by United States Immigration and Customs Enforcement on Feb. 26, 2010 and January 26, 2011. Marcio Martinez-Bustamante was found on March 9, 2013, by the Adams Township Police Department during a traffic stop.
The law provides for a maximum total sentence of two years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Paul E. Hull is prosecuting this case on behalf of the government.
Immigration and Customs Enforcement conducted the investigation leading to the indictment in this case.
An indictment or information is an accusation. A defendant is presumed innocent unless and until proven guilty.
Creston Man Pleads Guilty to Bankruptcy Fraud SchemeRead the Press Release
United States Attorney Deborah R. Gilg announced that on March 19, 2013, Ross Boydston, age 57 of Creston, Nebraska, pleaded guilty to an Information charging him with bankruptcy fraud. Sentencing has been set for June 24, 2013, before United States District Court Judge John M. Gerrard. The maximum punishment for the offense is up to five years imprisonment and/or a $250,000.00 fine with any term of imprisonment to be followed by a term of supervised release of up to three years.
According to the Information, Boydston knowingly devised a scheme to defraud American Mortgage Company, (AMC), and, as part of the scheme, subsequently filed a Chapter 12 bankruptcy. The Information alleges that it was part of the scheme to defraud that Boydston sold livestock which had been pledged as collateral to American Mortgage Company without notifying AMC of the sales and without remitting the proceeds of the sales to AMC. It was a further part of the scheme to defraud that Boydston made material false statements, representations and omissions in his Chapter 12 bankruptcy case in an attempt to conceal the fact that he had transferred and sold the collateral without remitting the proceeds. Specifically, the Information alleges Boydston’s bankruptcy schedules failed to list all of the transfers and sales of pledged livestock collateral within the two years preceding the bankruptcy filing. The Information further alleges that, in order to further conceal the transfers and sales of livestock, Boydston attended the first meeting of creditors in his bankruptcy case and falsely testified that there had not been any sales of livestock in which the proceeds had not been turned over to the lien of AMC. Boydston admitted these allegations as part of his plea agreement with the United States.
“Concealing sales and transfers of assets in a bankruptcy proceeding is a crime that threatens the integrity of the bankruptcy process and public confidence in that process,” stated Nancy J. Gargula, United States Trustee for Nebraska, Missouri, and Arkansas (Region 13). “We are grateful to all of our law enforcement partners in this case, and, in particular, to U.S. Attorney Deborah Gilg for her commitment to pursuing those who commit bankruptcy fraud.” Region 13 of the U.S. Trustee Program is headquartered in Kansas City, with additional offices in Omaha, St. Louis, and Little Rock. The U.S. Trustee Program is the component of the Justice Department that protects the integrity of the bankruptcy system by overseeing case administration and litigating to enforce the bankruptcy laws.
The United States Trustee’s Office and members of the Nebraska Bankruptcy Fraud Working Group assisted the United States Attorney’s Office with the investigation of this matter.
Contractors Arrested for Fraud, Arson and Aggravated AssaultRead the Press Release
CAMDEN, N.J. – Two principals of a Pennsylvania construction company were arrested today in connection with an employee kickback scheme that occurred during a reconstruction project at the Ft. Dix military base in Burlington County, U.S. Attorney Paul J. Fishman announced today.
A federal grand jury returned a five-count Indictment on March 4, 2013, charging Leonard Santos, 66, of Yardley, Pa., and Alex Rabinovich, 57, of Richboro, Pa., with one count each of conspiracy to obtain kickbacks from public works employees; malicious destruction of a vehicle by fire; travel in interstate commerce to commit a crime of violence; conspiracy to accept kickbacks on federal projects; and conspiracy to commit false payroll records. Both men are expected to make their initial court appearances today before U.S. Magistrate Judge Anne Marie Donio in Camden federal court.
According documents filed in this case and statements made in court:
Between November 2009 and September 2010, Santos and Rabinovich operated Sands Mechanical Inc. as a subcontractor on the restoration and rehabilitation of the Marine Corps Reserve Training Center at Joint Base-McGuire-Dix-Lakehurst in Burlington County, N.J. Sands provided sheet metal, electrical and plumbing work. The general contractor was a company headquartered in Marriotsville, Md. Santos and Rabinovich demanded that select employees kickback a percentage of their weekly paychecks or face termination. Two Sands’ supervisors have already pleaded guilty to these charges: Richard Cottone (Santos’ son-in-law) pleaded guilty Dec. 11, 2012, and will be sentenced Oct. 10, 2013; Michael Featherston pleaded guilty Jan. 10, 2012 and will be sentenced Oct. 9, 2013.
In February 2010, the U.S. Department of Labor’s Wage and Hour Division (WHD) was tipped off that the Sands employees were not being paid the prevailing wage for Burlington County. Santos conceded that Sands failed to pay the proper prevailing wage to its employees and agreed to repay $80,000 to those deprived employees. Santos cut settlement checks to those employees who were owed back wages. However, Cottone and Featherston warned those employees not to cash their settlement checks. Instead, Cottone and Featherston took the employees to a nearby check cashing business, where many of these checks were then endorsed over to Cottone, who cashed them and returned the funds to Santos. Since these kickbacks were removed from employees’ checks, Santos and Rabinovich routinely submitted inaccurate weekly payroll forms that are required whenever the federal government subsidizes a construction project.
The general contractor’s site manager was routinely critical of the work performance of Sands’ employees, which, at times, necessitated that work be done over. The site manager was targeted by Santos, Cottone and others by having his truck torched in front of his residence at 4 a.m. on May 17, 2010. This tactic failed to warn off the site manager. On June 10, 2010 at 5 AM, while riding his bike, the site manager was intentionally run down by a car driven by Cottone’s nephew and two friends. The victim sustained multiple serious injuries.
The defendants are charged with providing kickbacks to a prime contractor to improperly obtain subcontracts on federally funded construction projects. Between November 2009 and January 2013, Santos and Rabinovich paid off a Philadelphia contractor’s representative to get “last looks” at other competitors’ bids. Santos accumulated a total of $46,200 in kickbacks owed for the 10 subcontracts awarded to Sands Mechanical. By the summer of 2012 he still owed about $15,000 in kickbacks. On two occasions, in November and December 2012, at the behest of Santos, Alex Rabinovich was recorded giving a total of $4,156 in cash to the contractor’s representative in payment of the kickbacks still due and owing.
The counts of conspiracy to demand kickbacks from employees on a federally subsidized project, conspiracy to provide kickbacks to a prime contractor and conspiracy to submit false payroll records each carry a maximum potential penalty of five years in prison and a $250,000 fine. The count of traveling in interstate commerce to commit a crime of violence is punishable by a maximum potential penalty of 20 years in prison; and the arson count is punishable by up to 20 years in prison, with a mandatory minimum of five years in prison.
Seven defendants have previously pled guilty to various charges ranging from collecting kickbacks, arson and aggravated assault.
Fishman credited special agents of the Department of Labor, Office of Labor Racketeering and Fraud Investigations, under the direction of Special Agent-in-Charge Robert Panella; the Department of Labor-Wage and Hour Division, under the direction of George Ference, regional administrator; Naval Criminal Investigative Service, under the direction of Special Agent in Charge Cheryl DiPrizio, Northeast field office; and the Air Force Office of Special investigations, under the direction of Special Agent Seth Neville, detachment commander, Joint Base McGuire-Dix-Lakehurst.
The government is represented by Senior Litigation Counsel V. Grady O’Malley of the U.S. Attorney’s Office Organized Crime\Gangs Unit in Newark.
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Santos, Leonard and Rabinovich, Alex Indictment
Colorado Man Indicted for Failure to AppearRead the Press Release
United States Attorney Brendan V. Johnson announced that a Colorado man was indicted by a federal grand jury for failing to appear in federal court on another matter pending against him.
Hoang C. Huynh, 47, was indicted on December 21, 2010, for Failure to Appear on a child support case. He appeared before U.S. Magistrate Judge Veronica L. Duffy on March 8, 2013 and pled not guilty to the indictment. The maximum penalty upon conviction is 2 years of imprisonment and/or a $250,000 fine. The charge is merely an accusation and Huynh is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Office of Inspector General, Health and Human Services. Assistant U.S. Attorney Sarah B. Collins is prosecuting the case. Huynh was remanded to the custody of the U.S. Marshal. A trial date has not been set.
Clarence Mumford, Jr. Becomes Twelfth to Plead Guilty in Teacher Test Taking ScandalRead the Press Release
Memphis, TN – Clarence Mumford, Jr., 29, of Memphis, TN, pled guilty today to aiding and abetting identification fraud in connection with the teacher certification cheating scam directed by ringleader Clarence Mumford, Sr., 59, of Memphis, announced United States Attorney for the Western District of Tennessee, Edward L. Stanton III. This plea, along with previous guilty pleas by Mumford, Sr.,; John Bowen, 64; Felippia Kellogg, 42; Jeryl Shaw, 40; Shantell Shaw, 40; Carlos Shaw, 38; Jacklyn McKinnie, 44; Steve Holmes, 54; all of Memphis; Valerie Humprey, 47, of Oakland, Tennessee; Carlo McClelland, 35, of Meridian, Mississippi; and Dante Dowers, 40, of Belle Glade, Florida; brings to twelve the total number of guilty pleas thus far in Mumford Sr.’s teacher certification cheating scam.
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The original indictment in the case, filed in July 2012, charged Mumford Sr. with orchestrating a scheme that began as early as 1995 to pay test-takers to take teacher certification examinations on behalf of teachers and hopeful teachers. In August, a superceding indictment charged Dowers, and Mumford Jr. And in September, a second superceding indictment charged 10 more individuals, including Samuel Campbell, 39, of Jackson, Mississippi; Darcel Gardner, 35, of Columbus, Mississippi; Holmes; Humphrey; McClelland; McKinnie; Jadice Moore, 30, of Port Gibson, Mississippi; Sarah Richard, 54, of Richland, Mississippi; Jeryl Shaw; and Kimberly Taylor, 36, of Charleston, Mississippi. Cedrick Wilson, 34, of Memphis, Tennessee, was charged in a separate indictment related to the scam in October 2012.
During the guilty plea hearing, Mumford, Jr. admitted that Bowen took a Principles of Learning and Teaching examination on Mumford, Jr.’s behalf in January 2008 at the University of Mississippi and that he subsequently obtained a professional teaching license from the Tennessee Department of Education based, in part, on the examination taken by Bowen. In addition to having this test taken by Bowen, Mumford, Jr. also admitted to taking examinations on behalf of others including Willie Knox, 55; Carlo McClelland; and Cedrick Wilsonn of Memphis, TN.
This investigation is being conducted by the Tennessee Bureau of Investigation and the United States Secret Service. Assistant U.S. Attorney John Fabian and Special Assistant U.S. Attorney Kirby May represent the government.