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Tuesday 19 March 2013
Child Molester Sentenced to 25 Years in Federal Prison for Documenting Sexual Abuse and Sending Photos to Other PedophilesRead the Press Release
RIVERSIDE, California – An Inland Empire man who molested at least three children, photographed the abuse and traded those images over the Internet with other pedophiles was sentenced this morning to 25 years in federal prison.
Peter Ruiz, 33, of San Bernardino, who was described by prosecutors in court papers as a “ruthless predator,” was sentenced by United States District Judge Virginia A. Phillips.
In 2009 and 2010, Ruiz repeatedly molested a boy who lived in an apartment near where Ruiz resided with his family. Ruiz documented the abuse with photographs and videos, which he distributed to pedophiles, sometimes in exchange for money. When authorities searched Ruiz’s computer on Halloween in 2010, they discovered more than 6,000 images and over 600 videos of child pornography, which included images of Ruiz molesting the then-12-year-old victim.
Ruiz pleaded guilty on October 23, 2012, to one count of production of child pornography.
In addition to the molestation of his neighbor, Ruiz also sexually abused two other boys, who were 9 and 10 when they were attacked. Ruiz groomed all of his victims with small gifts and access to video games, according to prosecutors.
“Ruiz sexually abused at least three children, nearly destroying them and their families in the process,” federal prosecutors wrote in a document filed in relation to today’s sentencing hearing.
Prosecutors wrote in their sentencing memo that Ruiz “appears to show no remorse for his crimes.” Ruiz maintains a “brazen and nonchalant attitude toward his abuse of children...bragg[ing] about these sexual exploits to a fellow inmate.” Ruiz developed a pattern of “grooming his victim[s], professing his love for them, and eventually intimidating them into keeping silent,” prosecutors wrote.
The case against Ruiz is the result of an investigation by the Federal Bureau of Investigation.
Release No. 13-038
Career Criminal Sentenced for Possessing A Semi-automatic PistolRead the Press Release
MINNEAPOLIS—Earlier today in federal court, a 43-year-old career criminal was sentenced for possessing a stolen .45-caliber, semi-automatic pistol. United States District Court Judge Joan N. Ericksen sentenced Michael Scott Canfield, of St. Paul, to 188 months in federal prison on one count of being a felon in possession of a firearm. He was also ordered to pay $1,000 in restitution concerning a related burglary. Canfield was indicted on July 11, 2012, and pleaded guilty on September 28, 2012.
In his plea agreement, Canfield admitted that on June 25, 2012, he was in possession of a Colt, .45-caliber handgun after having been previously convicted of one or more felonies. He also admitted that the handgun had traveled in interstate commerce prior to his possession of the weapon.
The investigation in this case indicated that on June 25, 2012, an Xcel Energy meter reader saw Canfield coming out of a house in Stillwater, Minnesota, carrying a firearm. Canfield claimed that “his” house had just been robbed. Canfield went to the back of the house, and the meter reader heard gunfire. The police responded to the scene and determined that Canfield had stolen several items from the house. They recovered two .45-caliber shell casings. The police later found Canfield’s get-away car with some of the stolen goods in it. Near the car was a Colt Commander, .45-caliber, semi-automatic pistol.
Because he was a felon, Canfield was prohibited under federal law from possessing a firearm at any time. His prior Ramsey County convictions included unauthorized use of a motor vehicle (1988), damage to property (1989), receiving stolen property (1991 and 1993), theft (1992 and 1994), and fleeing a peace officer (2006). In addition, Canfield was convicted of receiving stolen property in Kanebec County (1993), second-degree burglary in Sherburne County (1996), fleeing police in a motor vehicle in Dakota County (2006), two counts of first-degree burglary in Stearns County (2006), and recklessly endangering safety in St. Croix County, Wisconsin (2000).
Since at least three of Canfield’s prior offenses constituted crimes of violence, his sentence was subject to the federal Armed Career Criminal Act. That act mandates a minimum of 15 years in federal prison. And because the federal system does not have parole, offenders spend virtually their entire prison sentences behind bars.
This case was the result of an investigation by the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives and the Stillwater Police Department. The case was prosecuted by Assistant U.S. Attorney Thomas M. Hollenhorst.Cambria County Man Pleads Guilty to Conspriacy and Firearms ViolationsRead the Press Release
Prosecution is Part of Project Safe Neighborhoods Initiative
JOHNSTOWN, Pa. - A resident of Ebensburg, Pa., pleaded guilty in federal court to charges of conspiracy and violating federal firearms laws, United States Attorney David J. Hickton announced today.
David Eugene Lamer, 47, pleaded guilty to three counts 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 concealing money from the Internal Revenue Service in an effort to avoid paying income taxes. Also, on Sept. 2, 2010, Lamer possessed a FIE, Model Standard .38 caliber pistol, and on Sept. 3, 2010, Lamer possessed a Remington, Model 760, .30-06 caliber rifle, a Marlin, Model 1894, .357 caliber rifle, and a Savage/Stevens (Western Field) Model 30, 16 gauge shotgun. On Jan. 8, 1986, Lamer was convicted in Cambria Co., Pa., of burglary, which is a crime punishable by imprisonment for a term exceeding one year. Federal law prohibits persons who have been convicted of a crime punishable by a term of imprisonment exceeding one year from possessing firearms or ammunition.
Judge Gibson scheduled sentencing for Aug. 9, 2013, at 9:30 a.m. The law provides for a maximum total sentence of 25 years in prison, a fine of $750,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history 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.
According to Mr. Hickton, this case is being prosecuted as part of the Project Safe Neighborhoods initiative, a collaborative effort by federal, state, and local law enforcement, agencies, prosecutors and communities to prevent, deter and prosecute gun crime.
Cadena-Solis Sentenced for Reentry of Deported AlienRead the Press Release
BISMARCK – U.S. Attorney Timothy Q. Purdon announced that on March 19, 2013, Fermin Cadena-Solis, 49, of Municipio De Petalon, Queretaro, Mexico, pleaded guilty and was sentenced by U.S. District Judge Daniel L. Hovland on a charge of reentry of deported alien.
Judge Hovland sentenced Cadena-Solis to serve two years and nine months in federal prison. Cadena-Solis was ordered to pay a $100 special assessment to the Crime Victim’s Fund.
On Sept. 10, 2012 , Cadena-Solis was encountered by the Minot Police Department in Minot, N.D., while responding to a report of a fight near the Guest Lodge Motel. U.S. Border Patrol officials discovered that Cadena-Solis was a citizen of Mexico and in the United States illegally. Cadena-Solis had previously been deported from the United States eight times. He had been convicted of eight felonies in the United States from 1996 to 2008, including burglary in California state court in 2003.
The case was investigated by the U.S. Border Patrol and the Minot Police Department.
Assistant U.S. Attorney David Hagler prosecuted the case.
Baltimore Store Robber Exiled to over 12 Years in PrisonRead the Press Release
Robber Identified After Drinking a Red Slurpee Prior to the RobberyBaltimore, Maryland – U.S. District Judge Ellen L. Hollander sentenced Anthony Griffin, age 44, of Baltimore, today to 151 months in prison followed by three years of supervised release for robbery. Judge Hollander enhanced Griffin’s sentence upon finding that Griffin is a career offender based on four prior convictions for robbery related crimes. His federal sentence will be served concurrent to a 15 year state sentence Griffin is currently serving for a 2010 robbery conviction in Baltimore County.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; Baltimore City State’s Attorney Gregg L. Bernstein; and Baltimore Police Commissioner Anthony W. Batts.
According to his plea agreement, on February 5, 2007 Griffin selected several items at a lingerie store located at 1003 South Charles Street in Baltimore that he pretended to want to purchase. After the store owner placed the items in a bag, Griffin told her “this is a robbery” and demanded money from the register. The store owner placed approximately $200 in the bag with the items, and upon Griffin’s further demand, gave him her diamond engagement ring.
At this point, a customer entered the store. Griffin forced the store owner to tie the hands and feet of the customer with pantyhose, and then Griffin tied the owner’s hands and feet with pantyhose. A friend of the owner who was coming to meet her saw Griffin leave the store and suspecting something was wrong, alerted a nearby policeman who located the owner and customer. The owner told the policeman that the robber’s mouth was red, as if he had been drinking a red beverage. Griffin had discarded the Slurpee straw and cup at a nearby jewelry store soon before the robbery. A clerk at the nearby jewelry store identified Griffin in a photo lineup as the man who had drank and discarded the Slurpee at the jewelry store. DNA was recovered from the straw used by Griffin to drink the Slurpee. The lingerie store owner/victim also identified Griffin in a photo lineup.
United States Attorney Rod J. Rosenstein commended the FBI, Baltimore Police Department and Baltimore City State’s Attorney=s Office for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney Benjamin M. Block , who prosecuted the case.
Altoona Man Sentenced to Four Years Imprisonment for Mortgage FraudRead the Press Release
DES MOINES, IA – On March 18, 2013, Lane Anderson, age 38, was sentenced to four years imprisonment for conspiracy to commit bank fraud and wire fraud, announced United States Attorney Nicholas A. Klinefeldt. Chief United States District Judge James E. Gritzner also sentenced Anderson to five years supervised release following imprisonment.
From 2006 to 2008 Anderson, along with co-defendants Shannon Flickinger, Dave Mable, and Paul Kramer, executed a scheme to defraud lenders by using straw buyers and fraudulent loan applications to obtain inflated mortgage loans. Mable and Flickinger previously pled guilty and were sentenced. Kramer was found guilty after a joint jury trial with Anderson, and Kramer’s sentencing is currently set for Friday, April 12, 2013, at 1:30 p.m.
Anderson, Flickinger, and Mable owned and operated LDF Development (LDF) in Urbandale, Iowa. LDF purchased, renovated, and resold residential real estate, and initially acquired approximately thirty properties but struggled to renovate and resell the properties. LDF needed additional capital to continue to operate, but was saddled with properties and debt and could not obtain additional financing. Anderson, Flickinger, and Mable submitted thirteen fraudulent loan applications in Flickinger’s name when the true buyer was LDF. In an effort to qualify Flickinger for the loans, Anderson knowingly falsified Flickinger’s income and liabilities. When the applications were approved Kramer knowingly closed the fraudulent transactions at his closing company, Iowa Closing and Escrow. LDF and Flickinger were unable to keep up with the mortgage payments and the thirteen properties were eventually foreclosed upon. The scheme caused more than $600,000 in losses to the lenders.
This case was investigated by the Federal Bureau of Investigation, and was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
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Alleged Pharmacy Robbers IndictedRead the Press Release
Edward Schaeffer, 29, and William Webb, 50, both of Philadelphia, were charged today by Indictment with conspiracy, interference with interstate commerce by robbery, and brandishing a firearm during a crime of violence, announced United States Attorney Zane David Memeger. The indictment alleges that the defendants conspired to target approximately 19 pharmacies in order to steal prescription pharmaceuticals, including oxycontin, oxycodone, and percocet.
If convicted, the defendants face a maximum sentence of life imprisonment, five years of supervised release, a fine of up to $1.25 million, and a $500 special assessment. They face a mandatory 32 years in prison consecutive to any other sentence.This case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Philadelphia Police Department, Abington Twp. Police Department and Glenolden Borough Police Department. It is being prosecuted by Assistant United States Attorney Jennifer Chun Barry.
Click here to view the indictment
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Alden man sentenced for distrubution and receipt of child pornography; obstruction of justiceRead the Press Release
BUFFALO, N.Y.– U.S. Attorney William J. Hochul, Jr. announced today that Chad A. Salvatore, 40, of Alden, N.Y., who was convicted of distribution of child pornography, receipt of child pornography, and obstruction of justice, was sentenced to 20 years in prison and lifetime supervised release by Chief U.S. District Judge William M. Skretny.
Assistant U.S. Attorney Aaron J. Mango, who handled the case, stated that between December 2, 2010 and December 15, 2010, an agent with Immigration and Customs Enforcement, Homeland Security Investigations, downloaded graphic child pornography over the internet using a private peer-to-peer software program from a user who was later identified as the defendant. In addition, on December 15, 2010, Salvatore distributed child pornography to an FBI agent in Rochester, N.Y., as well as an agent with the Colorado Internet Crimes Against Children Task Force.
During the investigation, it was also determined that on June 1, 2010 and July 11, 2010, Salvatore received child pornography from other individuals via email. Following the defendant’s distribution of child pornography, a search warrant was conducted at his residence on December 17, 2010. The defendant was not present at the time of the search warrant, but subsequently admitted that after being made aware of the search warrant, he destroyed a digital media device by snapping it in half.
At the time of his arrest, it was revealed in court that the defendant was a foster parent to a young teenage child, despite having been convicted of molesting three children when Salvatore himself was a teenager.
"This case demonstrates the need for any social service agency that places children in home settings to have full access to the criminal history of the prospective care givers," said U.S. Attorney Hochul. "It also demonstrates that if you attempt to take advantage of, or in any way further the victimization of children, you will be prosecuted and could be sentenced to multiple years behind bars."
“This sentence should serve as a warning to those who are involved in any way with the distribution of child pornography," said James C. Spero, Special Agent in Charge for HSI Buffalo. "HSI will ensure this type of criminal activity is aggressively pursued and child predators are held accountable for their despicable behavior."
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.The sentencing is the culmination of an investigation on the part of Special Agents of Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of James C. Spero, Special Agent-In-Charge.
31 Individuals Indicted for Drug Trafficking in the Municipality of CanovanasRead the Press Release
Defendants facing a narcotics forfeiture allegation of one million dollars
SAN JUAN, PR – On March 7, 2013, a federal grand jury indicted 31 individuals as a result of an investigation led by the Drug Enforcement Administration (DEA) and the Puerto Rico Police Department (PRPD), announced today United States Attorney Rosa Emilia Rodríguez-Vélez.
The defendants are charged in a five-count indictment with conspiracy to possess with intent to distribute controlled substances within 1,000 feet of the real property comprising a public or private school and/or playground. The object of the conspiracy was to distribute “crack” (cocaine base), cocaine and marihuana at the San Isidro Ward, including but not limited to the drug points located at Monte Verde, Villa Hugo and Las Casitas sectors, and in other areas nearby within the Municipality of Canovanas, Puerto Rico, for significant financial gain and profit.
According to the indictment, from on or about the year 2007, the defendants conspired to purchase wholesale quantities of cocaine and marihuana in order to distribute the same in street quantity amounts in different areas of the Municipality of Canovanas. The main leader of the organization was Miguel Canales-Villalongo, aka “Buby,” “El Boss.” The other leaders were: José A. Rivera-Ayala, aka “Joito;” Luis M. De Jesús-López, aka “Willo;” Raymond E. Hiraldo-Figueroa; Juan C. Ortega-Rivera, aka “Kili” and Jorge Quiñonez-Osorio, aka “Jorgito.”According to the indictment, the 31 co-conspirators had many roles, in order to further the goals of the conspiracy. These were: six leaders; one enforcer; three runners; 21 sellers; drug processors, look-outs and facilitators.
The indictment alleges that, as part of the manner and means of the conspiracy, the co-conspirators would commit home invasions, robberies and other violent acts against residents of the San Isidro Ward in order to intimidate and make them abandon their homes. Afterwards, they would invade and take over those properties in order to use them for their drug trafficking activities. It was further part of the manner and means of the conspiracy that some members of the drug trafficking organization would routinely possess, carry, brandish and use firearms to protect themselves and their drug trafficking organization. Twelve members of the drug trafficking organization are facing one count for using and carrying firearms during and in relation to a drug trafficking crime.
“The efforts of the federal and state law enforcement agencies resulted in the dismantling of a violent criminal organization which held various communities hostage through its drug trafficking activities,” said Rosa Emilia Rodríguez-Vélez, U.S. Attorney for the District of Puerto Rico. “These arrests validate the Justice Department’s commitment to hold ruthless drug traffickers responsible for selling narcotics and promoting the rampant violence we are seeing in our communities.”
Pedro Janer, DEA Acting Special Agent in Charge for the Caribbean Division stated: “The joint efforts of the Drug Enforcement Administration, the Puerto Rico Police Department and the US Attorney’s Office, has led to the arrest of these violent drug dealers who do not have any respect for the life of innocent people.”
This case is being prosecuted by Assistant United States Attorney Alberto López-Rocafort.
If convicted, the defendants face a minimum of ten (10) years imprisonment and a maximum of life imprisonment, with fines of up to $10 million. Criminal indictments are only charges and not evidence of guilt. Defendants are presumed to be innocent until and unless proven guilty.
Monday 18 March 2013
Woman Sentenced Federally for Mailing Death Threats While Serving State SentenceRead the Press Release
POCATELLO – Linda Joyce Lakes, 54, of Pocatello, Idaho, was sentenced today to 12 months in prison followed by three years of supervised release for mailing threatening communications, U.S. Attorney Wendy J. Olson announced. U.S. District Judge Edward J. Lodge also imposed a no contact order with the victims. Lakes pleaded guilty to the charge in November 2012.
According to court records, from November 2010 to July 2012, Lakes wrote six letters in which she threatened to injure and kill a man from her past. At the time Lakes wrote the letters, she was incarcerated at the Pocatello Women’s Correctional Center. Lakes continued writing the letters even after being given a direct order to stop contacting the target of her letters. In the letters, Lakes counted down the days until she was to be released from prison and would be able to act out her threats. When interviewed by an agent of the Federal Bureau of Investigation, Lakes admitted writing and mailing the letters and said she wanted to kill the man when she wrote the letters. Later, Lakes wrote another letter in which she said she knew it was a federal offense to send threatening letters in the mail but did it anyway, because she “doesn’t care.”
The case was investigated by the Federal Bureau of Investigation, with assistance by the Idaho Department of Correction.
Weare Woman Sentenced to 13 Months in Federal Prison for Embezzling More Than $52,000 of Federal FundsRead the Press Release
CONCORD, NH –Heidi Lacerte, 48, of Weare, has been sentenced in United States District Court for the District of New Hampshire to 13 months in federal prison, three years of supervised release and ordered to pay $55,000 in restitution for embezzling Social Security Administration and Veterans Affairs benefits, announced United States Attorney John P. Kacavas.
Lacerte pleaded guilty in November of 2012. She admitted that while she was employed by the Office of Public Guardian (OPG) (a private non-profit corporation that provides guardianship and advocacy services to hundreds of legally incapacitated adults in New Hampshire, including those with developmental disabilities, mental illness, dementia and traumatic brain injury) she embezzled more than $52,000 of federal benefits that had been paid to OPG for the benefit of 23 individuals for whom OPG was guardian. Lacerte also admitted that she accomplished the embezzlement by: 1) having checks written to herself drawn against beneficiaries' funds; 2) having gift cards purchased using money from beneficiaries' accounts; and, 3) taking cash intended for beneficiaries' accounts, and then converting the proceeds for her own benefit, or for the benefit of others. Lacerte, who has been released on bail since being charged, was ordered to report to federal prison to start serving her sentence on April 12, 2013.
The case was investigated by the United States Department of Veterans Affairs, Office of Inspector General, Criminal Investigations Division, the United States Social Security Administration, Office of Inspector General, Office of Investigation, and the Concord, NH Police Department and was prosecuted by Assistant United States Attorney Arnold H. Huftalen.
Washington Man Sentenced for Gun ChargeRead the Press Release
BISMARCK– U.S. Attorney Timothy Q. Purdon announced that on March 18, 2013, Victor L. Fields, 47, Pasco, Wash., was sentenced by U.S. District Judge Daniel L. Hovland on a charge of possession of firearm and ammunition by a person convicted of domestic violence. Fields pleaded guilty to the charge on Dec. 18, 2012.
Judge Hovland sentenced Fields to serve one year and nine months in federal prison, to be followed by three years of supervised release. Fields was ordered to pay a $100 special assessment to the Crime Victim’s Fund.
On Sept. 15, 2011, Fields was involved in a fight with another male at the Knife River man camp near Williston, N.D. Fields possessed a loaded .357 pistol during the altercation. Fields was charged in Williams County Court with the misdemeanor crime of unlawfully carrying a loaded firearm. He was convicted and sentenced to serve 10 days in jail. Fields failed to report to serve his jail sentence and absconded to the state of Washington. He was arrested on the Federal warrant in September 2012 and returned to North Dakota to answer to the Federal charge.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms & Explosives and the Williams County Sheriff’s Department.
Assistant U.S. Attorney David Hagler prosecuted the case.
Two Plead Guilty to Money LaunderingRead the Press Release
Jackson, Miss - On Monday, March 18, 2013, Bridget Michelle Bland, 44, of Forest, and Willie Charles Rhodes, 54, of Brandon, pled guilty in U.S. District Court to money laundering the drug proceeds of Forest, Mississippi drug dealer, Jessie Hall, announced U.S. Attorney Gregory K. Davis. Bland also pled guilty to causing a business to file a false report to the Internal Revenue Service.
Bland and Rhodes will be sentenced on June 6, 2013. The maximum penalty for money laundering is 20 years in prison and a $500,000 fine. The maximum penalty for the IRS reporting violation is five years in prison and a $25,000 fine.
Three co-defendants in this case previously pled guilty to money laundering: Shannon Denise Hall, 41 of Forest, Sylvania Laranda Young, 41, currently of Jackson, and Jessie Hall, 39, of Forest. All five defendants participated in an extensive scheme to launder the drug proceeds of Jessie Hall through his business operating as Hall’s Trucking. Numerous assets were acquired through Hall’s drug trade and given the appearance of legitimate wealth through the business. Over $900,000 was found to have been laundered over a two year period.
The Internal Revenue Service Criminal Investigation Division and the Drug Enforcement Administration conducted the criminal investigation of the financial affairs leading to the current indictment. The Drug Enforcement Administration, in conjunction with officers from the Ridgeland Police Department, Jackson Police Department, Hinds County Sheriff’s Office, and the Mississippi Bureau of Narcotics, initially investigated the drug trafficking organization of Jessie Hall. The case was prosecuted by Assistant U.S. Attorney Darren LaMarca.###
If you believe you have been a victim of fraud from a person or an organization soliciting relief funds on behalf of storm victims, contact the National Center for Disaster Fraud toll free at:
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or e-mail it to:
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Two Narcotic Treatment Programs Face Financial PenaltiesRead the Press Release
Programs Allegedly Violated Inventory Provisions of the Controlled Substances Act
ATLANTA – New Horizons Treatment Center and Epiphany Center, Rome Inc. located in Rome, Ga., have agreed to civil settlements and will pay penalties to resolve allegations they violated inventory requirements of the Controlled Substances Act. Epiphany Center, Rome Inc. has also agreed to voluntarily surrender its DEA license.
“Narcotic treatment programs that distribute prescription drugs must maintain proper records of the drugs they distribute. By failing to keep an accurate count of their controlled substances inventories, these narcotic treatment programs created the potential that prescription drugs would be diverted to illegitimate uses,” said United States Attorney Sally Quillian Yates. “We are committed to detecting and stopping the diversion of controlled substances by enforcing the recordkeeping requirements of the Controlled Substances Act,” she said.
The government alleges that Epiphany Center, Rome Inc. failed to maintain a current, complete and accurate record of all controlled substances received, sold, delivered, or otherwise disposed of. Accountability audits conducted by the DEA revealed overages of methadone in 2011 and shortages of methadone in 2012. Significantly, the 2012 audit found a shortage of approximately 460,000 milligrams of methadone. The government also alleges that Epiphany Center failed to conduct its first biennial inventory of methadone, failed to conduct a biennial inventory in compliance with all applicable laws and regulations, failed to maintain a dispensing log, and failed to comply with all applicable laws and regulations regarding written orders for methadone.
The government alleges that New Horizons Treatment Center failed to maintain a current, complete and accurate record of all controlled substances received, sold, delivered, or otherwise disposed of. A 2011 accountability audit of New Horizons conducted by the DEA revealed overages of methadone liquid and buprenorphine and a shortage of methadone diskettes.
“The civil penalties set forth in this case are appropriate for the civil violations that these businesses engaged in,” said Harry S. Sommers, the Special Agent in Charge of the DEA Atlanta Field Division. “DEA is in the business of keeping the public safe by making sure that such establishments are playing by the rules which will make the diversion of controlled analgesics less likely.”
Both claims settled in these civil settlements are allegations only, and there has been no determination of liability. Epiphany Center has agreed to voluntarily surrender its DEA license and to pay $12,500 to resolve these allegations. New Horizons has agreed to pay $5,000 and to additional oversight from the DEA.
The Controlled Substances Act was enacted to ensure that controlled substances are properly regulated and to help prevent drug diversion. Thus, narcotic treatment programs that receive and dispense controlled substances are required to maintain complete and accurate inventories and records of all controlled substances that they purchase, receive, dispense, or destroy. In order to enforce the recordkeeping requirements of the Controlled Substances Act, the Act imposes civil penalties for refusing or negligently failing to maintain the records required by the Act.
These cases, which are unrelated, were investigated by Diversion Investigators from the Drug Enforcement Agency.
The civil settlements were reached by Assistant United States Attorneys Lena Amanti and Darcy Coty.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the HomePage for the U.S. Attorney’s Office for the Northern District of Georgia is www.justice.gov/usao/gan.
Suwannee County Man Pleads Guilty to Federal Charges of Failure to Register as Sex OffenderRead the Press Release
Jacksonville, Florida - United States Attorney Robert E. O’Neill announces today that Denny Junior Jenkins (41, Live Oak) has pleaded guilty to failing to register as sex offender in Florida after traveling from South Carolina. Jenkins faces up to 10 years in federal prison, and a potential lifetime term of supervised release. Jenkins has been in custody since February 15, 2013. A sentencing date has not yet been set.
According to court documents, on September 4, 1992, Jenkins was convicted in Suwannee County, Florida of two counts of attempted sexual battery upon a child under 12 years of age. Because of these convictions, Jenkins is required to register as a sex offender under Florida law for the remainder of his life. After being released from prison, Jenkins received and executed documents that advised him of this requirement.
According to court documents, in 2010, Jenkins moved to South Carolina and executed documents that advised, among other things, that if he moved to another state he must register as a sex offender in that state. In April 2012, Jenkins moved back to Florida and established residence in Suwannee County. He failed to register with the State of Florida under the Sex Offender Registration and Notification Act (SORNA). On February 15, 2013, he was arrested by deputies from the U.S. Marshals Service.
The Sex Offender Registration and Notification Act is part of the Adam Walsh Child Protection and Safety Act of 2006. The Adam Walsh Act also provides for the use of federal law enforcement resources, including the U.S. Marshals Service, to assist the states in locating and apprehending non-compliant sex offenders. This case was investigated by the United States Marshals Service, the Suwannee County Sheriff’s Office, and the Florida Department of Law Enforcement. It is being prosecuted by Assistant United States Attorney D. Rodney Brown.
It is another case 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."
Spencer Glenn Price 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, SPENCER GLENN PRICE, a 46-year-old resident of Great Falls, appeared for sentencing. PRICE was sentenced to a term of:
Prison: 232 months
Special Assessment: $100
Supervised Release: 4 years
PRICE was sentenced in connection with his guilty plea to possession with intent to distribute methamphetamine.
In an Offer of Proof filed by Assistant U.S. Attorney Jessica A. Betley, the government stated it would have proved at trial the following:
In July 2012, law enforcement learned PRICE was potentially involved in methamphetamine distribution around Great Falls. Law enforcement searched PRICE's home around that time and found numerous items of drug paraphernalia, as well as five empty small zip lock bags with a red die design commonly used for methamphetamine distribution.
Law enforcement returned to speak with PRICE a few days later. PRICE answered and told the officers he had recently gone out of state to purchase methamphetamine and he had four ounces of methamphetamine under the couch. Great Falls detectives found and seized cash, methamphetamine, empty sandwich bags with methamphetamine residue, and rolling paper.
PRICE agreed to speak further with detectives and said he began traveling in June to Spokane, Washington, to buy methamphetamine to bring back to Great Falls. Around June 1, 2012, he purchased a half ounce of methamphetamine for $600. Approximately two weeks later he purchased an additional one ounce of methamphetamine for $1200.00. Two weeks later, he purchased two ounces of methamphetamine for $2,400. On his most recent trip to Spokane, just a few days before, he purchased four ounces of methamphetamine for $4,800. PRICE had not yet sold the four ounces of methamphetamine.
Because there is no parole in the federal system, the "truth in sentencing" guidelines mandate that PRICE will likely serve all of the time imposed by the court. In the federal system, PRICE 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 Russell County Drug Task Force.
Shiprock Man Sentenced to Sixteen Years in Prison for Federal Child Sex Abuse ConvictionRead the Press Release
ALBUQUERQUE – Samuel Jackson, 56, an enrolled member of the Navajo Nation who resides in Shiprock, N.M., was sentenced this morning to 16 years in prison for his abusive sexual contact conviction. Jackson will be on supervised release for five years after he completes his prison sentence. He also will be required to register as a sex offender.
Jackson pled guilty to the abusive sexual contact charge on July 17, 2012. In entering his guilty plea, Jackson admitted sexually assaulting a Navajo child under the age of 16 years in a residence in Shiprock on Aug. 5, 2011. At the time of the offense and until his arrest in Jan. 2012, Jackson was employed as a back-up bus driver at Shiprock division of the Central Consolidated School District No. 22.
The case was investigated by the Farmington office of the FBI and the Shiprock Division of the Navajo Nation Department of Public Safety, and was prosecuted by Assistant U.S. Attorney Presiliano A. Torrez.
Security Contractors Plead Guilty in Virginia<br /> to Illegally Obtaining $31 Million from Contracts <br /> Intended for Disadvantaged Small BusinessesRead the Press Release
Executives at two Arlington, Va.-based businesses have pleaded guilty to fraudulently obtaining more than $31 million in government contract payments that should have gone to disadvantaged small businesses.
The guilty pleas were announced today by U.S. Attorney for the Eastern District of Virginia Neil H. MacBride, Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and NASA Inspector General Paul K. Martin.
“These executives used their knowledge and experience to abuse a program created to ensure minority small business owners could compete for government contracts,” said U.S. Attorney MacBride. “They not only illegally obtained millions from the United States, they also victimized legitimate minority owners who didn’t get the bids.”
“Keith Hedman and his co-conspirators fraudulently obtained valuable government contracts intended for minority-owned small businesses, and pocketed millions of dollars for themselves,” said Acting Assistant Attorney General Raman. “They abused an important government program, and will now face the consequences.”
“This investigation confirmed that these executives repeatedly took actions that gave them a fraudulent advantage in the contracting process,” said NASA Inspector General Martin. “I commend the outstanding efforts of our agents and our law enforcement partners involved in this case in protecting the integrity of the 8(a) program.”
According to court documents, Keith Hedman, 53, of Arlington, formed an Arlington-based security service consulting company in approximately 2001. Hedman formed the company, listed as Company A in court filings, with an African-American woman who was listed as its president and CEO to enable the company to participate in the Small Business Administration’s (SBA) Section 8(a) program, which enables certain small businesses to receive sole-source and competitive-bid contracts set aside for minority-owned and disadvantaged small businesses. In 2001, Hedman’s company received approval to participate in the 8(a) program on the basis of the African-American president and CEO’s listed role, but when she left the company in 2003, Hedman became its sole owner and the company was no longer 8(a)-eligible.
Hedman admitted that in 2003 he created a shell company, listed as Company B in court records, to ensure he could continue to gain access to 8(a) contracting preferences for which Company A was not qualified. Prior to applying for the shell company’s 8(a) status, Hedman selected an employee, Dawn Hamilton, 48, of Brownsville, Md., to serve as a figurehead owner based on her Portuguese heritage and history of social disadvantage, when in reality the new company would be managed by Hedman and senior leadership at Company A. To deceive the SBA, they falsely claimed that Hamilton formed and founded the company and that she was the only member of the company’s management. They continued to mislead the SBA through 2012, even lying to the SBA to overcome a protest filed by another company accusing Hedman’s former company and the shell company of being inappropriately affiliated.
From Company B’s creation through February 2012, Hedman – not Hamilton – exercised ultimate decision-making authority and control over the company by controlling its finances, allocation of personnel and government contracting activities. Hedman nonetheless maintained the impression that Hamilton was leading the company, including through forgeries of signatures by Hamilton to documents she had not seen or drafted. Hedman also retained ultimate control over the shell business’s bank accounts throughout its existence. In 2011, Hedman withdrew $1 million in cash from Company B’s accounts and gave the funds in cash to Hamilton and three other co-conspirators. In total, Hedman and Hamilton secured through the shell company more than $31 million in government contract payments, which generated more than $6 million in salary and payments for the conspirators that they were not entitled to receive.
In addition, Hedman admitted that he agreed to pay a $50,000 bribe through the shell business to a U.S. government contracting official for the official’s help in securing contracts for Company B.
Hedman and Hamilton pleaded guilty on March 13 and March 15, 2013, respectively, in U.S. District Court for the Eastern District of Virginia to major government fraud and face a maximum penalty of 10 years in prison and a multimillion-dollar fine for that charge. Hedman also pleaded guilty to conspiracy to commit bribery, which carries a maximum penalty of five years in prison. Hedman agreed to forfeit more than $6.3 million, and Hamilton agreed to forfeit more than $1.2 million. Hedman is scheduled to be sentenced on June 21, 2013, before U.S. District Judge Gerald Bruce Lee. Hamilton’s sentencing is scheduled for June 21, 2013, before U.S. District Judge T. S. Ellis, III.
In addition, the following individuals have also pleaded guilty to major fraud or conspiracy to commit major fraud:
• David George Lux, 62, of Springfield, Va., pleaded guilty today before U.S. District Judge Leonie M. Brinkema. Lux served as the chief financial officer at Company A from 2007 through February 2012 and performed work for Company B throughout that time while officially on Company A’s payroll. He is scheduled to be sentenced on June 14, 2013, by Judge Brinkema.
• Joseph Richards, 51, of Arlington, pleaded guilty on March 14, 2013, before U.S. District Judge Brinkema in the Eastern District of Virginia. Richards served as the chief operating officer and chief of staff for Company A from 2005 through 2008 and then vice president from 2010 through February 2012. He also served as Company B’s chief of staff from 2008 through 2010. According to court documents, Richards performed work for Company B throughout his time at both companies. He is scheduled to be sentenced on June 14, 2013, by Judge Brinkema.
• David Sanborn, 60, of Lexington, S.C., pleaded guilty on March 13, 2013, before U.S. District Judge Claude M. Hilton in the Eastern District of Virginia. Sanborn served as vice president at Company A from 2001 through 2009 and the company’s president from 2010 through February 2012. According to court documents, Sanborn performed work for Company B from its inception while on Company A’s payroll. He is scheduled to be sentenced on June 28, 2013, by Judge Hilton.
This case was investigated by the NASA Office of the Inspector General (OIG), the SBA OIG, the Defense Criminal Investigative Service, the General Services Administration OIG and the Department of Homeland Security OIG. Assistant U.S. Attorneys Chad Golder and Ryan Faulconer, a former Trial Attorney for the Criminal Division’s Fraud Section, are prosecuting the case on behalf of the United States.
Security Contractors Plead Guilty to Illegally Obtaining $31 Million from Contracts Intended for Disadvantaged Small BusinessesRead the Press Release
ALEXANDRIA, Va. – Executives at two Arlington-based businesses have pleaded guilty to fraudulently obtaining more than $31 million in government contract payments that should have gone to disadvantaged small businesses.
The guilty pleas were announced today by U.S. Attorney for the Eastern District of Virginia Neil H. MacBride, Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and NASA Inspector General Paul K. Martin.
“These executives used their knowledge and experience to abuse a program created to ensure minority small business owners could compete for government contracts,” said U.S. Attorney MacBride. “They not only illegally obtained millions from the United States, they also victimized legitimate minority owners who didn’t get the bids.”
“Keith Hedman and his co-conspirators fraudulently obtained valuable government contracts intended for minority-owned small businesses, and pocketed millions of dollars for themselves,” said Acting Assistant Attorney General Raman. “They abused an important government program, and will now face the consequences.”
“This investigation confirmed that these executives repeatedly took actions that gave them a fraudulent advantage in the contracting process,” said NASA Inspector General Martin. “I commend the outstanding efforts of our agents and our law enforcement partners involved in this case in protecting the integrity of the 8(a) program.”
According to court documents, Keith Hedman, 53, of Arlington, Va., formed an Arlington-based security service consulting company in approximately 2001. Hedman formed the company, listed as Company A in court filings, with an African-American woman who was listed as its president and CEO to enable the company to participate in the Small Business Administration’s (SBA) Section 8(a) program, which enables certain small businesses to receive sole-source and competitive-bid contracts set aside for minority-owned and disadvantaged small businesses. In 2001, Hedman’s company received approval to participate in the 8(a) program on the basis of the African-American president and CEO’s listed role, but when she left the company in 2003, Hedman became its sole owner and the company was no longer 8(a)-eligible.
Hedman admitted that in 2003 he created a shell company, listed as Company B in court records, to ensure he could continue to gain access to 8(a) contracting preferences for which Company A was not qualified. Prior to applying for the shell company’s 8(a) status, Hedman selected an employee, Dawn Hamilton, 48, of Brownsville, Md., to serve as a figurehead owner based on her Portuguese heritage and history of social disadvantage, when in reality the new company would be managed by Hedman and senior leadership at Company A. To deceive the SBA, they falsely claimed that Hamilton formed and founded the company and that she was the only member of the company’s management. They continued to mislead the SBA through 2012, even lying to the SBA to overcome a protest filed by another company accusing Hedman’s former company and the shell company of being inappropriately affiliated.
From Company B’s creation through February 2012, Hedman – not Hamilton – exercised ultimate decision-making authority and control over the company by controlling its finances, allocation of personnel and government contracting activities. Hedman nonetheless maintained the impression that Hamilton was leading the company, including through forgeries of signatures by Hamilton to documents she had not seen or drafted. Hedman also retained ultimate control over the shell business’s bank accounts throughout its existence. In 2011, Hedman withdrew $1 million in cash from Company B’s accounts and gave the funds in cash to Hamilton and three other co-conspirators. In total, Hedman and Hamilton secured through the shell company more than $31 million in government contract payments, which generated more than $6 million in salary and payments for the conspirators that they were not entitled to receive.
In addition, Hedman admitted that he agreed to pay a $50,000 bribe through the shell business to a U.S. government contracting official for the official’s help in securing contracts for Company B.
Hedman and Hamilton pleaded guilty on March 13 and March 15, 2013, respectively, in U.S. District Court for the Eastern District of Virginia to major government fraud and face a maximum penalty of 10 years in prison and a multimillion-dollar fine for that charge. Hedman also pleaded guilty to conspiracy to commit bribery, which carries a maximum penalty of five years in prison. Hedman agreed to forfeit more than $6.3 million, and Hamilton agreed to forfeit more than $1.2 million. Hedman is scheduled to be sentenced on June 21, 2013, before U.S. District Judge Gerald Bruce Lee. Hamilton’s sentencing is scheduled for June 21, 2013, before U.S. District Judge T. S. Ellis, III.
In addition, the following individuals have also pleaded guilty to major fraud or conspiracy to commit major fraud:
- David George Lux, 66, of Springfield, Va., pleaded guilty today before U.S. District Judge Leonie M. Brinkema. Lux served as the chief financial officer at Company A from 2007 through February 2012 and performed work for Company B throughout that time while officially on Company A’s payroll. He is scheduled to be sentenced on June 14, 2013, by Judge Brinkema.
- Joseph Richards, 51, of Arlington, Va., pleaded guilty on March 14, 2013, before U.S. District Judge Brinkema in the Eastern District of Virginia. Richards served as the chief operating officer and chief of staff for Company A from 2005 through 2008 and then vice president from 2010 through February 2012. He also served as Company B’s chief of staff from 2008 through 2010. According to court documents, Richards performed work for Company B throughout his time at both companies. He is scheduled to be sentenced on June 14, 2013, by Judge Brinkema.
- David Sanborn, 60, of Lexington, S.C., pleaded guilty on March 13, 2013, before U.S. District Judge Claude M. Hilton in the Eastern District of Virginia. Sanborn served as vice president at Company A from 2001 through 2009 and the company’s president from 2010 through February 2012. According to court documents, Sanborn performed work for Company B from its inception while on Company A’s payroll. He is scheduled to be sentenced on June 28, 2013, by Judge Hilton.
This case was investigated by the NASA Office of the Inspector General (OIG), the SBA OIG, the Defense Criminal Investigative Service, the General Services Administration OIG and the Department of Homeland Security OIG. Assistant U.S. Attorneys Chad Golder and Ryan Faulconer, a former Trial Attorney for the Criminal Division’s Fraud Section, are prosecuting the case on behalf of the United States.
A copy of this press release may be found on the website of the United States Attorney's Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.Philadelphia Man Sentenced for Defrauding the CityRead the Press Release
PHILADELPHIA - Barry Jones, 67, of Philadelphia, was sentenced today to 21 months in prison for devising and executing a scheme to defraud the City of Philadelphia out of more than $1.2 million. Jones, who was charged with one count of mail fraud, was the president of Mara Management Services Inc. (“Mara”) when he knowingly submitted false bills in connection with a series of computer services contracts that Mara had entered into with City agencies.
Between July 2004 and June 2008, Mara had contracts to provide computer programming, maintenance, and consulting services to multiple agencies, including the City’s revenue and water departments, and Community Behavioral Health (“CBH”), a charitable corporation contracted by the City to provide mental health and substance abuse services for Philadelphia County Medicaid recipients. Mara hired subcontractors to perform much of the work on these contracts, repeatedly overstating the number of hours that these subcontractors worked on the projects in order to get inflated monthly payments from the City’s agencies and CBH.Jones also overstated the number of hours that he was working on the contracted-for projects and between 2006 and 2008, he even sought and received compensation from the City for work by a subcontractor who had stopped working on the projects in 2005. In total, Jones caused the City to make payments to Mara totaling more than $5.9 million between January 1, 2005 and June 30, 2008, in connection with Mara’s contracts with the Revenue Department, the Water Department, and CBH. Jones admitted that he kept approximately $2.7 million for himself, which greatly exceeded the amount he was entitled to receive from the City.
In addition to the prison term, U.S. District Court Judge Robert F. Kelly ordered Jones to pay restitution in the amount of $1.2 million and ordered three years of supervised release.
The case was investigated by the United States Postal Inspection Service and the City of Philadelphia’s Office of the Inspector General. It was prosecuted by Assistant United States Attorney Mark B. Dubnoff.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Pendleton Man Sentenced to 21 Months in Federal Prison for Vehicular HomicideRead the Press Release
Vehicular Homicide Occurred on the Umatilla Indian ReservationPORTLAND, Ore. –Today, Roberto Medellin, 54, of Pendleton, was sentenced 21months in prison by U. S. District Judge Ancer L. Haggerty for vehicular homicide. On December 10, 2012, the defendant pled guilty to involuntary manslaughter. Judge Haggerty ordered the defendant to spend three years on supervised release after he is released from the Bureau of Prisons. As conditions of supervised release, the defendant must not possess or consume alcohol. Judge Haggerty ordered the defendant to surrender to the Bureau of Prisons on May 2, 2013.
“This case is another tragic reminder that drinking and driving kills,” stated U.S. Attorney Amanda Marshall. “Vehicular homicide is a serious crime with long lasting consequences for families and communities. My office will vigilantly prosecute these cases in Indian Country.”
According to the prosecutor’s statements in court, on May 14, 2012, on the Umatilla Indian Reservation, defendant Roberto Medellin was driving his jeep on a highway in which Misty Dawn Sheoships, a member of the White Mountain Apache Tribe, was a front seat passenger. Medellin’s vehicle went off the highway, crashed into a ditch, and Sheoships died as a result due to severe head and neck trauma. Witnesses called 911 to report the crash.
In a mirandized statement, Medellin said that he had been drinking earlier in the afternoon, prior to going out driving with Sheoships, and that he had fallen asleep at the wheel. He also said, in essence, that he knew he was too tired to continue driving and should have pulled over to rest. Medellin was taken to the hospital due to complaints of body stiffness and just under two hours following the crash, a hospital blood draw revealed that defendant’s blood alcohol content was still 0.096, which is in excess of the legal driving limit of 0.08.
The federal case was investigated by the Umatilla Tribal Police Department and the FBI’s office in Pendleton, Oregon. Assistant U. S. Attorney Craig Gabriel prosecuted the case.
Parkman Thompson SentencingRead the Press Release
BATON ROUGE, LA – United States Attorney Donald J. Cazayoux, Jr. announced today that SANDRA PARKMAN THOMPSON, 58, of New Orleans, Louisiana, was sentenced to 18 months in prison and ordered to pay $129,330 in restitution for her convictions on health care fraud and conspiracy to pay and receive illegal remunerations.
On August 21, 2012, THOMPSON was convicted after a jury trial on 13 counts of health care fraud and one count of conspiracy to pay and receive illegal remunerations. The convictions arose as a result of THOMPSON’s participation in a scheme to defraud involving the Baton Rouge-based company known as Lobdale Medical Services which was owned by Beatrice and Young Anyanwu. As part of the scheme to defraud, THOMPSON and others procured the names and personal information of Medicare beneficiaries in and around the New Orleans area and delivered these names to Dr. Anthony Jase, a co-defendant in the prosecution who currently is awaiting sentencing, who then signed false and fraudulent prescriptions for power wheelchairs and other durable medical equipment for which the Medicare beneficiaries had no medical need. THOMPSON subsequently delivered the fraudulent prescriptions to the Anyanwus, who submitted claims to Medicare through Lobdale Medical Services for the medically unnecessary equipment. The total billings to Medicare by Lobdale Medicare Services exceeded $1,000,000.
THOMPSON, along with the Anyanwus, also participated in a conspiracy to pay and receive illegal remuneration for the durable medical equipment billed by Lobdale. The Anyanwus paid THOMPSON and others a kickback for every claim for power wheelchairs and other durable medical equipment items that were submitted to, and paid by, Medicare. The kickback was based on a percentage of the reimbursement value of the equipment to the price of the particular item, thereby providing an incentive to recruit beneficiary claims for the most expensive models of durable medical equipment.
Dr. Anthony Stephen Jase pled guilty to the health care fraud scheme to defraud on October 31, 2012, and is awaiting sentencing. Beatrice and Young Anyanwu pled guilty to the health care fraud scheme to defraud as well as the illegal remuneration conspiracy on August 14, 2012, and were sentenced on February 1, 2013.
U.S. Attorney Donald J. Cazayoux, Jr., stated, “This is another victory for the good guys and the American taxpayers, as we attempt to stymie the attempts at pilfering our Medicare system.” “
Judge Brady called Parkman's actions ‘pure greed’ and this greed is what propels Medicare fraud in our community,” said Assistant Special Agent in Charge William Root. “Hopefully her sentence today sends an important message to others contemplating this type of fraud.”
The investigation of THOMPSON and AUGUSTUS was conducted by the Department of Health and Human Service, Office of Inspector General, the Federal Bureau of Investigation, and the Louisiana Department of Justice. The case was prosecuted by Assistant United States Attorneys Catherine M. Maraist, J. Christopher Dippel, Jr., and Reginald E. Jones.
Owner of ‘Davy Crockett’ Barge Sentenced to Prison for Clean Water Act Violations for Oil Spill on Columbia RiverRead the Press Release
Owner of Salvage Company was Informed of Oil on Barge and Failed to Act before Salvage; then Ignored Leaks, failing to Report them to Authorities
The Ellensburg, Washington man responsible for a $22 million oil clean up and salvage operation on the Columbia River was sentenced today to four months in prison, eight months of home detention, 100 hours of community service and three years of supervised release, announced U.S. Attorney Jenny A. Durkan. BRET A. SIMPSON, 53, the owner of Principle Metals, LLC, pleaded guilty in July 2012 to two criminal violations of the Clean Water Act; failing to report a discharge of oil, and unlawfully discharging oil into the Columbia River near Camas, Washington. At sentencing U.S. District Judge Benjamin H. Settle told him, “it has to be known that when you undertake a responsibility that has the potential to ruin an ecosystem you’re going to bear the consequences.”
“This defendant’s singular focus on maximizing his profits, at the expense of even minimal environmental safeguards, cost taxpayers millions of dollars,” said U.S. Attorney Jenny A. Durkan. “Mr. Simpson exhibited no regard for the likelihood that his misguided salvage efforts could, and in fact did, lead to an environmental emergency that was only partially averted by a massive federal and state response.”
With his guilty plea SIMPSON admitted that he was informed about oil left on the ‘Davy Crockett’ barge before salvage operations began. However, SIMPSON failed to have the oil removed before workers started cutting up the metal barge. When the first oil spill occurred in early December 2010, SIMPSON failed to notify authorities and failed to take adequate steps to monitor the vessel or protect it from natural forces and further structural damage. Subsequent spills in January 2011 led U.S. Coast Guard investigators to identify the ‘Davy Crockett’ as the source and initiate a federally funded cleanup effort. Ultimately the U.S. Coast Guard and state authorities spent eight months and approximately $22 million to clean up the spill and remove the derelict barge from the river.
“Today Mr. Simpson is being held accountable for his criminal acts,” said Rear Adm. Keith A. Taylor, Commander of the 13th Coast Guard District. “The next step is holding him accountable for the more than $22 million spent from the Oil Spill Liability Trust Fund during the extensive, Coast Guard led, multi-agency cleanup. We continue to work closely with the Department of Justice on all aspects of this case. The Coast Guard is committed to protecting the maritime environment of the Pacific Northwest and our nation. Actions like Mr. Simpson's will not be tolerated.”
“Paying a serious price for environmental crime is unfortunately not new for Defendant Simpson,” said Tyler Amon, Special Agent-in-Charge for the U.S. EPA’s Criminal Investigation Division in Seattle. “His negligence degraded the Columbia River, created a hazard to navigation and cost more than $22 million to clean up. His sentencing today should serve as notice to irresponsible vessel owners who doubt our resolve to vigorously pursue and prosecute environmental crimes.”
The M/V Davy Crockett is a former U.S. Navy ship that had been converted to a flat deck barge. SIMPSON’s company planned to cut the barge apart and sell the metal for scrap. SIMPSON assembled a crew to begin dismantling the M/V Davy Crockett at its place of moorage in the Columbia River in October 2010. He made no arrangements to remove the fuel oil and diesel fuel from the vessel before the scrapping operation began. On December 1, 2010, a member of the scrapping crew cut into a structural beam of the barge, and the ship began breaking apart and leaking oil. Neither SIMPSON nor anyone else with Principle Metals LLC notified authorities about the leak. The scrapping operation was halted.
SIMPSON initially addressed the oil release by ceasing all scrapping operations, procuring a boom to limit the release of oil into the Columbia River, and directing an employee to monitor vessel conditions. The employee monitored vessel conditions for approximately one week following the initial release before being relieved of his employment. SIMPSON took no further steps to monitor the ship, or the boom, and took no steps to protect the barge from further structural damage. On January 19, 2011, an accumulation of debris next to the barge forced it to move, and additional oil was released. The Coast Guard responded to the additional movement of the barge, and issued an administrative order for SIMPSON to remove any remaining visible oil from machinery spaces and deck tubes together with other salvage debris from the vessel. SIMPSON complied and authorities believed the barge no longer posed an environmental danger. However on January 27, 2011, additional oil was released from the vessel and state and federal authorities immediately responded in an effort to limit environmental damage.
Detailed timeline of the clean up and material removed from the water is available here: http://www.ecy.wa.gov/programs/spills/incidents/DavyCrockett/DavyCrockett.html
The case was investigated by the Environmental Protection Agency Criminal Investigation Division (EPA-CID), the U.S. Coast Guard, the U.S. Coast Guard Investigative Service, the Washington State Department of Ecology, and the Oregon Department of Environmental Quality. The case is being prosecuted by Assistant United States Attorney James Oesterle and Special Assistant United States Attorney Lieutenant Commander Marianne Gelakoska of the U.S. Coast Guard. Mr. Oesterle heads the U.S. Attorney’s Office working group on environmental crimes.
Owner of Concrete Company Sentenced to Prison for $3.7 Million Tax Evasion SchemeRead the Press Release
March 18, 2013David B. Fein, United States Attorney for the District of Connecticut, announced that DOUGLAS CARTELLI, also known as “Douglas Martin,” 42, of Killingworth, was sentenced today by Chief United States District Judge Alvin W. Thompson in Hartford to 40 months of imprisonment, followed by three years of supervised release, for engaging in an extensive tax evasion scheme.
According to court documents and statements made in court, since 1992, CARTELLI has owned and operated several Connecticut-based concrete companies including DMC Concrete Corp., Commercial Concrete Construction LLC, Commercial Concrete NE LLC and Commercial High Rise Concrete LLC. As part of a scheme to avoid withholding and paying employee taxes, CARTELLI routinely characterized his employees as “independent contractors.” After the U.S. Department of Labor and Internal Revenue Service began an investigation of DMC Concrete, CARTELLI continued to misclassify employees as independent contractors and took steps to make it more difficult for the Department of Labor and the IRS to monitor his companies’ payroll. CARTELLI used a convenience store in Middletown that provided him with cash so he, in turn, could pay his employees in cash, and the store owner was reimbursed by checks from CARTELLI’s business checking accounts. Between July 2004 and February 2008, the store owner received checks from CARTELLI totaling more than $1.15 million.
CARTELLI also convinced the owner of a Middletown liquor store to cash payroll checks for his employees. Each Friday from July 2005 to March 2006, Commercial Concrete NE wired payroll funds into the store’s business checking account. CARTELLI’s employees would go to the store, provide their payroll checks to the store owner and receive cash. The store owner would then return the payroll checks to CARTELLI. During this time period, the store owner withdrew more than $1.266 million in cash that CARTELLI had wired to the liquor store’s bank account.
Over the course of several years, CARTELLI attempted to thwart investigators and evade paying taxes and penalties by twice changing the name of his business and falsely representing to the IRS that he no longer owned the businesses, by writing business checks to his wife or to cash, and by using business checks to pay for numerous personal expenses, including credit card bills, personal real estate taxes and high-end renovations of his home.
The IRS has determined that CARTELLI’s under-reporting of employee wages and payroll taxes, his failure to withhold employment taxes and his failure to pay penalties related to this conduct has resulted in loss to the IRS of more than $3.45 million.
CARTELLI also failed to file personal income tax returns for the 2004 through 2007 tax years, during which he had total taxable income of approximately $959,936.25, resulting in loss to the IRS of $275,275.
Judge Thompson ordered CARTELLI to cooperate with the IRS to resolve his outstanding tax liability.
On March 21, 2011, CARTELLI waived his right to indictment and pleaded guilty to three counts of tax evasion.
This matter was investigated by the U.S. Department of Labor, Office of Inspector General, and the Internal Revenue Service – Criminal Investigation. The case was prosecuted by Assistant United States Attorneys Christopher W. Schmeisser and Sarah P. Karwan.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
[email protected]Old Saybrook Man Charged with Bank FraudRead the Press Release
March 18, 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, today announced that PAUL E. BRENNAN III, 44, formerly of Old Saybrook, has been charged by criminal complaint with bank fraud. BRENNAN, who is currently detained in state custody, appeared on March 15 before United States Magistrate Judge Joan G. Margolis in New Haven.
As alleged in the criminal complaint, from at least 2009 until at least 2011, BRENNAN engaged in a check fraud scheme through which he defrauded and attempted to defraud numerous financial institutions. During the course of the scheme, BRENNAN convinced individuals to cash checks for him using their bank accounts even though he knew that the checks were drawn on closed accounts or accounts with a zero balance and would be returned for nonpayment. BRENNAN also passed fraudulent checks at several check cashing businesses in Connecticut.
The charge of bank fraud carries a maximum term of imprisonment of 30 years.
U.S. Attorney Fein stressed that a complaint is only a charge and is not evidence of guilt. The defendant is entitled to have this matter presented to a grand jury and, in the event an indictment is returned, he is entitled to a trial at which it will be the Government’s burden to prove guilt beyond a reasonable doubt.
Citizens with information that may be helpful to the investigation are encouraged to contact FBI Special Agent Daniel S. Harkness at (860) 439-6107.
This matter is being investigated by the Federal Bureau of Investigation with assistance from the Old Saybrook Police Department. The case is being prosecuted by Special Assistant United States Attorney Kerry L. Quinn.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
[email protected]New York State Assemblyman William F. Boyland Charged with Mail Fraud for Defrauding New York StateRead the Press Release
A superseding indictment against New York State Assemblyman William F. Boyland, Jr. was filed today in the United States District Court for the Eastern District of New York, which added new charges of mail fraud in connection with a scheme to defraud New York State by submitting fraudulent vouchers for travel expense and per diem payments. The Superseding Indictment also includes the charges from the underlying indictment against Boyland, charging him with bribery and attempted Hobbs Act extortion for soliciting more than $250,000 in bribes and accepting thousands of dollars of bribe money in exchange for performing official acts for the bribe payers.1 The charges were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation (FBI), New York Field Office.
As charged in the Superseding Indictment, from January 2007 to December 2011, Boyland fraudulently submitted New York State Assembly Member Travel Vouchers (Vouchers) in which he falsely claimed to be in Albany on legislative business when he in fact was not in Albany. New York State records show that in reliance on Boyland’s fraudulent Vouchers, New York State paid Boyland tens of thousands of dollars in mileage expense and per diem payments.
For example, on some of the days on which Boyland falsely claimed that he was in Albany and thus entitled to mileage expense and per diem payments, Boyland was actually not in Albany and was instead in New York City meeting with individuals he believed to be out-of-state businessmen and real estate developers, but who actually were the undercover FBI agents from whom he solicited bribes. In addition, E-ZPass records associated with Boyland’s vehicle and New York State Assembly records reflect that Boyland was not in Albany on the days when he claimed on Vouchers to be there on legislative business. By falsely overstating the number of days in which he was in Albany for legislative business, Boyland fraudulently secured tens of thousands of dollars in taxpayer funds to which he was not entitled.
If convicted, Boyland faces a maximum sentence on each fraud charge of 20 years in prison, a $250,000 fine and restitution.
United States Attorney Lynch and Assistant Director-in-Charge Venizelos expressed their thanks to the New York State Comptroller’s Office for its assistance in this phase of the investigation.
The government's case is being prosecuted by Assistant United States Attorneys Robert Capers and Lan Nguyen.
The Defendant:
WILLIAM F. BOYLAND, JR.
Age: 42_____________________________
1 The charges contained in the superseding indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty.
New York Man Sentenced to 41 Months in Prison for Hacking AT&T’s ServersRead the Press Release
Stole E-mail Addresses and Personal Information Belonging to 120,000 Apple iPad 3G Subscribers; Disclosed Information to Internet Magazine
NEWARK, N.J. – The head of a self-described “security research” hacking group was sentenced today to 41 months in prison for breaching AT&T’s servers, stealing e-mail addresses and other personal information belonging to approximately 120,000 Apple iPad users, and disclosing that information to an Internet magazine, U.S. Attorney Paul J. Fishman announced.
Andrew Auernheimer, 27, of New York, was convicted Nov. 20, 2012, of both counts of a Superseding Indictment: Conspiracy to access AT&T’s servers without authorization and disclose that information to a reporter at Gawker magazine, and possession and transfer of means of identification for more than 120,000 iPad users. Auernheimer was tried before U.S. District Judge Susan D. Wigenton, who imposed the sentence today in Newark federal court. His co-conspirator, Daniel Spitler, 27, of San Francisco, Calif., previously pleaded guilty to the same charges and is awaiting sentencing.
“Andrew Auernheimer knew he was breaking the law when he and his partner hacked into AT&T’s servers and stole personal information from unsuspecting iPad users,” U.S. Attorney Fishman said. “When it became clear that he was in trouble, he concocted the fiction that he was trying to make the Internet more secure, and that all he did was walk in through an unlocked door. The jury didn’t buy it, and neither did the Court in imposing sentence upon him today.”“Auernheimer coordinated a self-serving cyber attack on a United States corporation and tens of thousands of innocent customers, in order to promote his business,” FBI Acting Special Agent in Charge David Velazquez said. “Immediately after the attack he attempted to hide all the evidence. Auernheimer's conviction and today's sentence signifies the continued and growing efforts of the U.S. Attorney's Office and the FBI in investigating and prosecuting computer hacking and intellectual property crimes.”
According to documents filed in this case and the evidence at trial:
The iPad is a touch-screen tablet computer, developed and marketed by Apple Computers Inc., which allows users to, among other things, access the Internet and send and receive electronic mail. Since its introduction in January 2010, AT&T has provided iPad users with Internet connectivity via AT&T’s 3G wireless network. During the registration process for subscribing to the network, a user is required to provide an e-mail address, billing address, and password.
Prior to mid-June 2010, AT&T automatically linked an iPad 3G user’s e-mail address to the Integrated Circuit Card Identifier (“ICC-ID”), a number unique to the user’s iPad, when he or she registered. Every time a user accessed the AT&T website, the ICC-ID was recognized and the e-mail address was automatically populated for faster, user-friendly access to the site. AT&T kept the ICC-IDs and associated e-mail addresses confidential.
At that time, when an iPad 3G communicated with AT&T’s website, its ICC-ID was automatically displayed in the Universal Resource Locator, or “URL,” of the AT&T website in plain text. Seeing this, and discovering that each ICC-ID was connected to an iPad 3G user e-mail address, hackers wrote a script termed the “iPad 3G Account Slurper” and deployed it against AT&T’s servers.The Account Slurper attacked AT&T’s servers for several days in early June 2010 and was designed to harvest as many ICC-ID/e-mail address pairings as possible. It worked by mimicking the behavior of an iPad 3G so that AT&T’s servers would be deceived into granting the Account Slurper access. Once deployed, the Account Slurper used a process known as a “brute force” against the servers, randomly guessing at ranges of ICC-IDs. An incorrect guess was met with no additional information, while a correct guess was rewarded with an ICC-ID/e-mail pairing for a specific, identifiable iPad 3G user.
From June 5, 2010, through June 9, 2010, the Account Slurper stole for its hacker-authors approximately 120,000 ICC-ID/e-mail address pairings for iPad 3G customers.
Immediately following the theft, the hacker-authors of the Account Slurper provided the stolen e-mail addresses and ICC-IDs to the website Gawker, which published the stolen information in redacted form, along with an article concerning the breach. The article indicated that the breach “exposed the most exclusive email list on the planet,” and named a number of famous individuals whose emails had been compromised, including Diane Sawyer, Harvey Weinstein, New York Mayor Michael Bloomberg, and then-White House Chief of Staff Rahm Emanuel. The article also stated that iPad users could be vulnerable to spam marketing and malicious hacking. A group calling itself “Goatse Security” was identified as obtaining the subscriber data.
Goatse Security is a so-called “security research” group, comprised of Internet hackers, to which both Spitler and Auernheimer belonged.
During the data breach, co-defendant Daniel Spitler and Auernheimer communicated with one another using Internet Relay Chat, an Internet instant messaging program. Those chats not only demonstrated that Spitler and Auernheimer were responsible for the data breach, but also that they conducted the breach to simultaneously damage AT&T and promote themselves and Goatse Security. As the data breach continued, so, too, did the discussions between Spitler, Auernheimer, and other Goatse Security members about the best way to take advantage of the breach and associated theft. On June 10, 2010, immediately after going public with the breach, Spitler and Auernheimer discussed destroying evidence of their crime.In addition to the prison term, Judge Wigenton sentenced Auernheimer to three years of supervised release and ordered him to pay restitution of $73,162.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Acting Special Agent in Charge David Velazquez in Newark, with the investigation leading to the charges. He also thanked special agents of the FBI, under the direction of Special Agent in Charge Valerie Parlave in Little Rock, Ark., and the U.S. Attorney’s Office for the Western District of Arkansas, under the direction of U.S. Attorney William Conner Eldridge.
The government is represented by Executive Assistant U.S. Attorney Michael Martinez and Assistant U.S. Attorney Zach Intrater of the Computer Hacking and Intellectual Property Section of the U.S. Attorney’s Office Economic Crimes Unit.
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Defense counsel: Tor Ekeland Esq., Brooklyn, N.Y.
Navajo Man Pleads Guilty to Assault and Gun ChargesRead the Press Release
PHOENIX – Lee Kinder Tso, 50, of Many Farms, Ariz. and a member of the Navajo Nation, pleaded guilty on March 15, 2013 in a federal district court in Phoenix, to assault with a dangerous weapon and brandishing a firearm during a crime of violence.
Tso had been charged with four counts of assault and four counts of using a firearm during a crime of violence. On Feb. 3, 2012, Tso used a rifle to shoot two victims on the Navajo Nation Indian Reservation, causing the victims serious physical injury. The victims were hospitalized with one victim being admitted for about two months.
A conviction for assault with a dangerous weapon carries a maximum penalty of 10 years in prison, a $250,000 fine, or both. A conviction for brandishing a firearm during a crime of violence carries a minimum of seven years in prison to life, consecutive to any other prison time imposed, a $250,000 fine, or both.
Sentencing is set before Judge Neil V. Wake on June 3, 2013.
The investigation in this case was conducted by the Federal Bureau of Investigation and the Navajo Nation Police Department. The prosecution is being handled by Jennifer E. Green, Assistant U.S. Attorney, District of Arizona, Phoenix.
CASE NUMBER: CR-12-8051-PCT-NVW
RELEASE NUMBER: 2013-022_TsoFor more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
Minneapolis Woman Sentenced for Attempted Sex Trafficking of A MinorRead the Press Release
MINNEAPOLIS—Earlier today in federal court, a 34-year-old Minneapolis woman was sentenced on one count of sex trafficking a minor. United States District Court Judge Ann D. Montgomery sentenced Kimberly Susan Latham to 132 months in federal prison. Latham was indicted on January 19, 2012, and pleaded guilty on May 4, 2012.
Following today’s sentencing, J. Chris Warrener, Special Agent in Charge of the FBI’s Minneapolis Field Office, the lead federal investigative agency on this case, said, “This case underscores the FBI’s continued commitment to stop crimes against children. Hopefully, this conviction and sentence will serve to deter similar criminal behavior.”
In her plea agreement, Latham admitted that in November of 2011, she met two young women, reportedly ages 17 and 18, and invited them to stay with her in her Minnetonka apartment. She then asked the 17-year-old minor to engage in commercial sex acts and used the apartment for that purpose. Latham also used the Internet and cell phones to advertise the services. Because of her sex trafficking activity, Latham admittedly received financial benefit.This case was the result of an investigation by the Federal Bureau of Investigation and the Minnetonka Police Department. It was prosecuted by Assistant U.S. Attorney David P. Steinkamp.
In 2012, Yuri Fedotov, the head of the United Nations’ Office on Drugs and Crime reported to those attending a U.N. General Assembly meeting that an estimated 2.4 million people worldwide are victims of human trafficking at any one time, with 80 percent of them being exploited as sex slaves. He also said approximately $32 billion is earned collectively every year by the criminals who operate human trafficking networks. The U.S. Department of Justice reports that an estimated 14,500 to 17,500 people are trafficked within the U.S. alone each year.
For more information, visit http://www.fbi.gov/about-us/investigate/civilrights/human_traffickingMiami Man Pleads Guilty in Identity Theft Tax Fraud SchemeRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Jose A. Gonzalez, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), Antonio J. Gomez, Acting Inspector in Charge, U.S. Postal Inspection Service, Miami Division, and Sergio Velazquez, Chief, Hialeah Police Department, announced that defendant Lineten Belizaire, 22, of Miami, pled guilty today for his role in a stolen identity tax refund scheme.
More specifically, Belizaire pled guilty to conspiracy to defraud the government with respect to claims, in violation of Title 18, United States Code, Section 286, and one count of aggravated identity theft, in violation of Title 18, United States Code, Section 1028A. Sentencing is scheduled for May 28, 2013 at 8:30 a.m. before U.S. District Judge Cecilia M. Altonaga. At sentencing, the defendant faces a possible statutory maximum sentence of up to 12 years in prison.
According to the plea documents, beginning in mid-2011 and 2012, Belizaire was involved in a scheme to use stolen personal identification information of others to file fraudulent and unauthorized tax returns claiming refunds on debit cards. Belizaire exchanged personal identification information of victims by text message for use in the tax refund fraud scheme. During a traffic stop conducted on January 31, 2012, law enforcement found notebooks and papers containing personal information on more than 1,000 victims and approximately 40 prepaid debit cards, including some of the identities exchanged by Belizaire. In addition, more than 80 fraudulent tax returns using stolen identifications were electronically filed from the IP address belonging to the defendant. The defendant was also observed on ATM video withdrawing money on multiple occasions from debit cards loaded with fraudulent tax refunds.
Mr. Ferrer commended the investigative efforts of the Identity Theft Tax Refund Strike Force, with special commendation to IRS-CI, U.S. Postal Inspection Service, and the Hialeah Police Department. The case is being prosecuted by Assistant U.S. Attorney Michael N. Berger.
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.
Mark Kness 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, MARK KNESS, a 54-year-old resident of Great Falls, appeared for sentencing. KNESS was sentenced to a term of:
Prison: 172 months
Special Assessment: $100
Supervised Release: 5 years
KNESS was sentenced in connection with his guilty plea to conspiracy to possess with intent to distribute methamphetamine.
In an Offer of Proof filed by Assistant U.S. Attorney Jessica A. Betley, the government stated it would have proved at trial the following:
In July 2012, detectives from the Great Falls Police Department became alerted to a potential methamphetamine distribution ring in Great Falls. Detectives believed the methamphetamine was being brought to Montana from somewhere near Spokane, Washington.
On September 6, 2012, police received information from an anonymous caller, who stated Linda Reynolds was dealing methamphetamine out of her apartment in Great Falls. Based on this information, police executed a search warrant at Reynolds' apartment. Law enforcement learned Reynolds obtained methamphetamine from Joe and Ann Wetzel, as well as KNESS.
According to Reynolds, KNESS brought his drug dealer, Louis Kanyid, to Reynolds's apartment in the winter of 2012. Kanyid regularly went by "Washington" in Great Falls, because he traveled from the state of Washington. Reynolds observed methamphetamine deals between KNESS and Kanyid, and KNESS would brag about how the methamphetamine was of great quality. KNESS also introduced Joe and Ann Wetzel to Kanyid in the summer of 2012. KNESS routinely met with Kanyid to obtain methamphetamine. He then sold the methamphetamine to Joe and Ann Wetzel, as well as other people throughout Great Falls. Law enforcement seized over 50 grams of actual (pure) methamphetamine in their investigation.
Reynolds, Kanyid, and Joe and Ann Wetzel pled guilty to federal charges.
Because there is no parole in the federal system, the "truth in sentencing" guidelines mandate that KNESS will likely serve all of the time imposed by the court. In the federal system, KNESS 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 Russell County Drug Task Force.
Manufacturer of Counterfeit Designer Handbags Sentenced to One Year in Federal Prison for Trafficking the Bogus ProductsRead the Press Release
LOS ANGELES – A Los Angeles woman was sentenced today to one year and one day in federal prison for trafficking in counterfeit handbags and wallets, including accessories bearing counterfeit marks belonging to Chanel, Gucci, Dolce & Gabbana, Fendi, Prada, and Versace.
Yeon Soon Lee, also known as Susie Lee, 55, who resides in the Koreatown District of Los Angeles, was sentenced today by United States District Judge George H. King.
Lee operated Anna Collection, a wholesale accessory distributor in the Fashion District in downtown Los Angeles. Lee attached emblems with counterfeit trademarks to generic bags and shipped them to retailers across the United States. After authorities executed a search warrant at Anna Collection in 2009 and seized more than 1,000 handbags and counterfeit emblems, Lee resumed operating her business in 2011. A second search in 2011 resulted in the seizure of additional goods and emblems.
During today’s sentencing hearing, Judge King said Lee had committed a “large-scale,” “serious offense.” Lee was a “clear recidivist,” who had shown “repeated disrespect for the law” by continuing to traffic in counterfeit goods after previously being convicted in state court (that conviction has been expunged) and being the subject of two search warrants, the judge said.
“The public has to know that these are not merely victimless crimes,” Judge King emphasized.
The case against Lee is the product of an investigation by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, U.S. Customs and Border Protection, and the Los Angeles County Sheriff's Department.
Release No. 13-037
Lincoln Woman Sentenced in Drug ConspiracyRead the Press Release
United States Attorney Deborah R. Gilg announced that on March 18, 2013, United States District Judge John M. Gerrard sentenced Teresa Liggins, 51, of Lincoln, Nebraska, to 21 years and 10 months in prison for her conviction for conspiracy to district over 280 grams of crack cocaine.
Liggins was indicted in May of 2012 and pled guilty on December 21, 2012. Liggins was involved in distributing small quantities of crack cocaine in the Lincoln area. She was previously sentenced, and is currently serving a sentence of 3 to 6 years, for attempted delivery of a controlled substance from the Lancaster County District Court. Judge Gerrard ordered that her federal sentence be served concurrently with the state sentence. Liggins was charged with conspiring with Diwancha Brown, who has also pled guilty and is awaiting sentencing.
This case was investigated by the Lincoln/Lancaster County Drug Task Force.
Kentucky Man Sentenced in Counterfeit Credit Card CaseRead the Press Release
TTOPEKA, KAN. – A Kentucky man has been sentenced to 10 months in federal prison to be followed by a year on supervised release after pleading guilty in a counterfeit credit card case, U.S. Attorney Barry Grissom said today.
Craig C. Harris, 38, Louisville, Kentucky, pleaded guilty to one count of unlawful possession of a device for making credit cards. In his plea, Harris admitted that the Kansas Highway Patrol stopped the car he was driving Oct. 29, 2012, in Wabaunsee County, Kan. A search of the car turned up a Custom Card System CCS2300 credit card embossing machine and 11 envelopes containing pre-paid Ready Debit Visa credit cards bearing the names of various individuals. In addition, investigators found four American Express Optima credits cards and one Union Bank Visa card, all bearing Harris’ name. The numbers on the cards were not legitimately issued to Harris.
Grissom commended the Kansas Highway Patrol, the FBI and Assistant U.S. Attorney Richard Hathaway for their work on the case.
Justice Department to Monitor Elections in South Carolina and Port Chester, New YorkRead the Press Release
The Justice Department announced today that it will monitor elections on March 19, 2013, in Beaufort, Berkeley, Charleston and Dorchester Counties, S.C., and in the village of Port Chester, N.Y. The monitoring will ensure compliance with the Voting Rights Act of 1965, which prohibits discrimination in the election process on the basis of race, color or membership in a minority language group. In addition, the act requires certain covered jurisdictions to provide language assistance during the election process. Port Chester is required to provide assistance in Spanish.
Under the Voting Rights Act, the Justice Department is authorized to ask the U.S. Office of Personnel Management (OPM) to send federal observers to jurisdictions that are certified by the attorney general or by a federal court order. Federal observers will be assigned to monitor polling place activities in Dorchester County based on the attorney general’s certification and in Port Chester based on a court order. The observers will watch and record activities during voting hours at polling locations in these jurisdictions, and Civil Rights Division attorneys will coordinate the federal activities and maintain contact with local election officials.
In addition, Justice Department personnel will monitor polling place activities in Beaufort, Berkeley, and Charleston Counties in South Carolina. Civil Rights Division attorneys will coordinate federal activities and maintain contact with local election officials.
In January 2008, a federal district court found that Port Chester’s at-large method of electing the village board of trustees violated the Voting Rights Act and prevented Hispanic voters from participating equally in the electoral process, resolving a lawsuit filed by the department’s Civil Rights Division and the U.S. Attorney’s Office for the Southern District of New York. In November 2009, the court ordered that a cumulative voting system be adopted to remedy this violation, and in December 2009, the department and the village entered into a consent decree, which was approved by the court. The consent decree includes an extensive voter education plan with education and training provisions to ensure that the voters in Port Chester are fully familiar with cumulative voting. The decree also requires that bilingual poll officials will be present at every polling place in Port Chester, and that all election-related materials must be translated into Spanish. The March 2013 election will be the second municipal election since the entry of the consent decree.
Each year, the Justice Department deploys hundreds of federal observers from OPM, as well as departmental staff, to monitor elections across the country. To file complaints about discriminatory voting practices, including acts of harassment or intimidation, voters may call the Voting Section of the Justice Department’s Civil Rights Division at 1-800-253-3931.
Visit www.justice.gov/crt/voting/index.php for more information about the Voting Rights Act and other federal voting laws.
Jury Finds Attorney Paul W. Bergrin Guilty on All Counts After Racketeering TrialRead the Press Release
NEWARK, N.J. – A jury has convicted attorney Paul W. Bergrin, 57, of Nutley, N.J., of all 23 counts on which he was tried, including conspiracy to murder a witness and other racketeering, cocaine and prostitution offenses. The verdict was announced today by New Jersey U.S. Attorney Paul J. Fishman.
The jury returned the verdict after two months of trial before U.S. District Judge Dennis M. Cavanaugh in Newark federal court.
“Bergrin’s conduct was a stunning violation of his role as an officer of the court and a betrayal of his roots as a member of law enforcement,” said U.S. Attorney Fishman. “Today, the jury returned the verdict compelled by the evidence and imposed the justice he deserved. We take no joy from his tragic fall, but I am extremely proud of the work done by those in my office and agents from the FBI, IRS and DEA that led to this just result.”
According to documents filed in this case and the evidence at trial:
Bergrin turned his law firm and related corporations into a racketeering enterprise, through which he conspired to tamper with witnesses, distribute cocaine and facilitate drug trafficking, prostitution and bribery, among other things. The government also proved Bergrin conspired to murder witnesses to protect the drug trafficking enterprise, one of whom was shot to death to prevent him from testifying in court.
At sentencing, currently scheduled for July 18, 2013, Bergrin faces a mandatory sentence of life in prison on each of the following counts: count three, violent crimes in aid of racketeering; count 12, conspiring to murder a federal witness to prevent his testimony at an official proceeding; and count 13, aiding and abetting the murder of a federal witness to prevent testimony at an official proceeding. He also faces a maximum term of life in prison on four other counts.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Acting Special Agent in Charge David Velazquez; Internal Revenue Service – Criminal Investigation, under the direction of Acting Special Agent in Charge Shantelle P. Kitchen; and the Drug Enforcement Administration’s New Jersey Division – under the direction of Acting Special Agent in Charge Robert G. Koval, with the investigation leading to the conviction.
The government is represented by John Gay, Deputy Chief of the U.S. Attorney’s Office Criminal Division; Assistant U.S. Attorney Joseph N. Minish of the office’s Organized Crime/Gangs Unit; and Steven Sanders of the office’s Appeals Division in Newark.13-125
Defense counsel: Pro se; Lawrence Lustberg Esq., Newark; Bruce Levy; Amanda Protess (standby)
Judge Sentences Tax Evader to Nearly 6 Years in PrisonRead the Press Release
PITTSBURGH, Pa. - A resident of Pittsburgh, Pa., has been sentenced in federal court to 70 months incarceration, three years of supervised release, and $6,000 fine on his conviction of tax evasion, United States Attorney David J. Hickton announced today.
United States District Judge Joy Flowers Conti imposed the sentence on Terrance L. Szymanski, of Pittsburgh, Pa.
According to information presented to the court, Szymanski operated a number of businesses in the names of others in order to evade both the payment and assessment of federal income tax. Szymanski's evasion resulted in a total tax loss to the United States of $2,432,161 spanning from 1997 to the present.
Assistant United States Attorney Michael A. Comber prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Internal Revenue Service - Criminal Investigation for the investigation leading to the successful prosecution of Terrance L. Szymanski.
Johnson - Pogue IndictmentRead the Press Release
BATON ROUGE, LA - United States Attorney Donald J. Cazayoux, Jr. announced today that a Federal Grand Jury returned an indictment charging GLENN KELLY JOHNSON, age 71, of Brookhaven, Mississippi, with conspiracy to use interstate facilities to carry on a bribery scheme, four counts of actually using telephones to promote his bribery scheme, and one count of making false statements to an agent of the Federal Bureau of Investigation who was investigating the scheme to bribe an employee of the Louisiana Department of Health and Hospitals, in violation of Title 18, United States Code, Sections 371, 1952(a)(3), and 1001(a)(2).
Also indicted was ALAN FORREST POGUE, a former employee of the Louisiana Department of Health and Hospitals, Office of Public Health, Center for Environmental Services, Onsite Wastewater Program (“OWP”). POGUE, a resident of Covington, Louisiana, age 52, was charged with one count of conspiracy to use interstate facilities to carry on a bribery scheme with JOHNSON. During the period 2008 through 2011, POGUE was employed as a Sanitation Program Coordinator (“Sanitarian”) for the OWP and his duties included inspection of residential and commercial septic tank systems. JOHNSON was a Denham Springs, Louisiana, licensed installer of individual sewage treatment systems (also known as “septic tanks”) during the period 2008 through 2011. JOHNSON operated a Denham Springs business known as Stafford Concrete.
According to the indictment, POGUE supplied JOHNSON with OWP lists of names of Louisiana citizens who were applying for permits to install individual sewage treatment systems. In return, JOHNSON made cash payments to POGUE. POGUE and JOHNSON used their office and personal cellular telephones to contact each other in order to arrange meetings where they could exchange septic tank applicant information for cash. Beginning sometime in or about May 2009, and continuing through June 2011, POGUE and JOHNSON met on a bi-weekly basis, approximately 100 times, for the purpose of exchanging septic tank applicant information for cash. According to the Indictment, JOHNSON paid POGUE approximately $50,000 during the period May 2009 through June 2011.
If convicted, JOHNSON and POGUE face up to five years imprisonment for Count One- conspiracy to use interstate facilities to promote a bribery scheme. JOHNSON also faces five years imprisonment for the conduct alleged in Counts Two through Five-unlawful use of telephones, and another five years for Count Six- making false statements to an FBI agent. POGUE faces a total of five years imprisonment and JOHNSON faces a total of 30 years imprisonment. Each defendant faces a fine up to $250,000 for each count on which they may be convicted, and forfeiture of all property, real or personal, which constitutes or is derived from proceeds traceable to the offenses charged as Counts One through Five of the Indictment, including but not limited to, at least $50,000, said amount being the proceeds obtained through bribery.
United States Attorney Cazayoux stated, “We will continue to be vigilant, along with our law enforcement partners, such as the FBI and Louisiana Inspector General in this case, for public corruption at any level of government. We cannot, and will not, tolerate situations, such as here, where a businessman seeks to gain an unfair advantage in the marketplace by bribing low-level public employees.”
Louisiana State Inspector General Stephen Street commented, “Rooting out corruption of this sort is the very reason OIG was created. Public officials taking bribes is absolutely intolerable. We will continue to relentlessly pursue those who abuse the public trust and hold them criminally accountable wherever possible. As always, we appreciate and value our partnership with Mr. Cazayoux and his staff.”
“Although public corruption in any context has no acceptable threshold, these acts affecting the environment and public health are particularly repugnant to the citizenry,” said Michael Anderson, FBI Special Agent-in-Charge.
The investigation of this matter was conducted by the Baton Rouge Resident Agency of the Federal Bureau of Investigation and the Louisiana Office of the Inspector General. The case is being prosecuted by Assistant United States Attorney Rene I. Salomon.
NOTE: An indictment is a determination by a grand jury that probable cause exists to believe that offenses have been committed by a defendant. The defendant is presumed innocent until and unless proven guilty at trial.
Georgia Tax Return Preparer Sentenced to PrisonRead the Press Release
Tyrone Thompson was sentenced today to 137 months in prison by U.S. District Judge Hugh Lawson in the Middle District of Georgia for conspiracy and filing fraudulent tax returns in order to receive tax refunds, to which the defendant was not entitled, the Justice Department and Internal Revenue Service (IRS) announced. In addition to Thompson, the scheme involved four others who had already been sentenced. Judge Lawson also ordered Thompson to pay $516,363 in restitution to the IRS. In October 2012, all five defendants pleaded guilty to filing a false claim for tax refunds. In addition, Thompson pleaded guilty to conspiracy to file false claims for tax refunds.
According to court documents, Thompson organized a scheme in which he prepared and filed fraudulent federal income tax returns using the names of other individuals. He included with the returns fictitious Schedules C reporting business income and losses and also claimed false First-Time Homebuyer Credits, in order to obtain tax refunds to which he and his co-defendants were not entitled. He directed fraudulently-obtained refunds to be deposited to his co-defendants’ bank accounts. The attempted tax refund fraud exceeded $400,000.
“Today’s lengthy jail sentence sends a strong message that those who would consider committing tax fraud should think carefully about the serious risks involved,” said Assistant Attorney General for the Justice Department’s Tax Division Kathryn Keneally. “As millions of honest, hard-working taxpayers prepare and file their tax returns, they should be assured that those who would shirk their civic duty or try to ‘game the system’ will be investigated by the IRS and, where appropriate, criminally prosecuted by the Department of Justice.”
“These folks are stealing from every good tax paying citizen, and we won’t tolerate it,” said U.S. Attorney for the Middle District of Georgia Michael J. Moore.
“Tyrone Thompson organized a scheme to file fraudulent tax returns using the identities of third parties in order to receive false refunds,” said Richard Weber, Chief, IRS Criminal Investigations. “Mr. Thompson cheated the government by filing false Schedule C and false First-Time Homebuyer Credit forms to increase the fraudulent tax refunds. IRS Criminal Investigation has made investigating refund fraud a top priority and we will vigorously pursue those who undermine the integrity of the U.S. tax system.”
Assistant Attorney General Keneally commended the efforts of Special Agents of IRS - Criminal Investigation, who investigated the case, and Trial Attorneys Charles Edgar and Alexander Effendi of the Tax Division, who prosecuted the case.
Georgia Tax Return Preparer Sentenced to PrisonRead the Press Release
Sentenced to More Than 11 Years in Prison for Preparing False Tax Returns Claiming Hundreds of Thousands of Dollars in RefundsWASHINGTON – Tyrone Thompson was sentenced today to 137 months in prison by U.S. District Judge Hugh Lawson in the Middle District of Georgia for conspiracy and filing fraudulent tax returns in order to receive tax refunds, to which the defendant was not entitled, the Justice Department and Internal Revenue Service (IRS) announced. In addition to Thompson, the scheme involved four others who had already been sentenced. Judge Lawson also ordered Thompson to pay $516,363 in restitution to the IRS. In October 2012, all five defendants pleaded guilty to filing a false claim for tax refunds. In addition, Thompson pleaded guilty to conspiracy to file false claims for tax refunds.
According to court documents, Thompson organized a scheme in which he prepared and filed fraudulent federal income tax returns using the names of other individuals. He included with the returns fictitious Schedules C reporting business income and losses and also claimed false First-Time Homebuyer Credits, in order to obtain tax refunds to which he and his co-defendants were not entitled. He directed fraudulently-obtained refunds to be deposited to his co-defendants’ bank accounts. The attempted tax refund fraud exceeded $400,000.
“Today’s lengthy jail sentence sends a strong message that those who would consider committing tax fraud should think carefully about the serious risks involved,” said Assistant Attorney General for the Justice Department’s Tax Division Kathryn Keneally. “As millions of honest, hard-working taxpayers prepare and file their tax returns, they should be assured that those who would shirk their civic duty or try to ‘game the system’ will be investigated by the IRS and, where appropriate, criminally prosecuted by the Department of Justice.”
“These folks are stealing from every good tax paying citizen, and we won’t tolerate it,” said U.S. Attorney for the Middle District of Georgia Michael J. Moore.
“Tyrone Thompson organized a scheme to file fraudulent tax returns using the identities of third parties in order to receive false refunds,” said Richard Weber, Chief, IRS Criminal Investigations. “Mr. Thompson cheated the government by filing false Schedule C and false First-Time Homebuyer Credit forms to increase the fraudulent tax refunds. IRS Criminal Investigation has made investigating refund fraud a top priority and we will vigorously pursue those who undermine the integrity of the U.S. tax system.”
Assistant Attorney General Keneally commended the efforts of Special Agents of IRS - Criminal Investigation, who investigated the case, and Trial Attorneys Charles Edgar and Alexander Effendi of the Tax Division, who prosecuted the case.
For additional information, please contact Sue McKinney, Public Affairs Specialist at (478) 621-2602.
Four Men Arrested for Distributing Bath Salts at Area CollegesRead the Press Release
NEWARK, N.J. – Three New Jersey men and one New York man have been arrested in connection with a scheme to allegedly distribute kilogram amounts a controlled substance commonly known as “bath salts,” U.S. Attorney Paul J. Fishman said today.
Kyle Jobes, 23, of East Brunswick, N.J., and Charles Knierim, 24, of Old Bridge, N.J., were arrested on March 14, 2013; Benjamin Caturano, 22, of New Brunswick, N.J., and Conor Healion, 22, of West Hempstead, N.Y. were arrested on March 15, 2013. All are charged in connection with their respective roles in a conspiracy to distribute Methylenedioxypryovalerone (“MDPV”) in New Jersey and New York. “Bath salts” is the street name for a family of designer drugs that have effects similar to amphetamine and cocaine. Their white and yellow crystals often resemble legal bath salts, like Epsom salts, but are chemically different.
The current investigation involved a package containing approximately two kilograms of MDPV that was intercepted by law enforcement. The package originated in the People’s Republic of China and was supposed to be shipped to an address in Old Bridge. Law enforcement removed the MDPV and replaced it was sham drugs that resembled bath salts. On March 14, 2013, law enforcement delivered the package to where it was addressed and watched over the next two days as Knierim, Jobes, Caturano, and Healion transferred the package amongst themselves. After their arrests, a number of the defendants admitted that they had distributed multiple kilograms of bath salts over the past year and that some of the drugs were sold at local college campuses, including Rutgers University and Monmouth University. As part of the investigation, agents of Immigration and Customs Enforcement-Homeland Security Investigations seized more than $90,000 in cash and two luxury automobiles obtained with proceeds from the drug conspiracy.
Knierim made his initial appearance before U.S. Magistrate Judge Michael A. Hammer in Newark federal court on March 15, 2013. Jobes, Caturano and Healion made their initial appearance before U.S. Magistrate Judge Falk in Newark federal court today.
U.S. Attorney Fishman credited special agents of the ICE-HSI, under the direction of Special Agent in Charge Andrew McLees, with the investigation leading to the arrests, assisted by inspectors of the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Maria Kelokates, and U.S. Customs and Border Protection, under the direction of Robert E. Perez, Director of CBP's New York Field Operations.
The Government is represented by Assistant U.S. Attorney Danielle M. Corcione of the U.S. Attorney’s General Crimes Unit in Newark, N.J.
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Defense counsel:
Jobes: Wanda Akin Esq., Newark
Caturano: Frank Arleo Esq., West Orange, N.J.
Healion: Ronald Kliegerman Esq., New YorkJobes, Kyle Complaint
Foster Man Sentenced to 13 Years in Federal Prison for Bank Robbery, Violation of Supervised ReleaseRead the Press Release
PROVIDENCE, R.I. – James W. Snoke, 49, of Foster, was sentenced today to 151 months in federal prison for robbing a Cranston bank while claiming to be armed with an explosive device in November 2011, announced United States Attorney Peter F. Neronha; Cranston Police Chief Colonel Marco Palombo, Jr.; Foster Police Chief Robert E. Coyne, Jr.; Colonel Steven G. O’DonnellSuperintendent of the Rhode Island State Police; and Richard Deslauriers, Special Agent in Charge of the FBI’s Boston Field Office.
At sentencing, U.S. District Court Judge William E. Smith also ordered Snoke to serve a consecutive sentence of six months in federal prison for violating the terms of his supervised release after he completed serving a 70 month federal prison sentence imposed in November 2004 for his role as getaway driver during a bank robbery in Providence in February 2004. Snoke was also ordered to serve one year of supervised release upon completion of his most recent prison sentence.
At the time of his guilty plea on May 30, 2012, Snoke admitted to the court that on November 18, 2011, he approached a teller in a Cranston branch office of BankRI demanding that he be given fifties and one hundred dollar bills and no dye packs, while threatening the teller by displaying a device he claimed was a bomb. A second teller was summonsed who placed a quantity of cash inside a black bag provided by Snoke. Snoke fled the bank with the bag which contained $2,365 in cash and the device he claimed was a bomb.
According to information presented to the court, Cranston Police provided a still photograph of the robber obtained from the bank’s surveillance system as part of their investigation to the Rhode Island Department of Corrections. A correctional officer identified the person in the photograph as James Snoke, a former inmate at the state prison.
On November 21, 2011, members of the Cranston Police Department, Foster Police Department and Rhode Island State Police executed a court authorized search of Snoke’s Foster residence. Several pieces of evidence were seized during the search. The next day, Rhode Island State Police located Snoke in East Providence and arrested him. He has been detained since his arrest.
United States Attorney Peter F. Neronha commended the collaboration between law enforcement from the Cranston and Foster Police Departments, Rhode Island State Police and the FBI which led to the arrest and successful prosecution of this defendant.
The case was prosecuted by Assistant U.S. Attorney Stephen G. Dambruch.
Contact: 401-709-5357
[email protected]Former Vice President at Prism Career Institute Sentenced to Two Years in Prison for Stealing More Than $400,000Read the Press Release
CAMDEN, N.J. – A former vice president of operations at Prism Career Institute, a private, post-secondary educational institution with campuses in Cherry Hill, N.J., Egg Harbor Township, N.J., and Pennsylvania, was sentenced today to 24 months in prison for stealing more than $400,000 from her employer between 2008 and 2011, U.S. Attorney Paul J. Fishman announced.
Diane Bowler, 53, of Sewell, N.J., previously pleaded guilty before U.S. District Judge Renée Marie Bumb to embezzling, stealing and obtaining by fraud money belonging to Prism Career Institute, which receives federal funds from the U.S. Department of Education. Judge Bumb imposed the sentence today in Camden federal court.
According to documents filed in this case and statements made in court:
Diane Bowler was a regional vice president of operations at Prism, authorized to make purchases on behalf of Prism with her personal credit cards and then submit the receipts of these purchases to Prism for reimbursement. Bowler admitted that she stole more than $400,000 from Prism by submitting fraudulent reimbursement requests for purchases of supplies, furniture, equipment, and other items that were never received by Prism. She falsified invoices by cutting and pasting new dates and invoice numbers onto prior receipts for purchases and by fraudulently creating invoices for certain vendors with which Prism no longer did business. Bowler would forge the signature of the CEO of Prism on reimbursement checks and in some instances signed the checks herself before depositing the money into her personal bank account.
In addition to the prison term, Judge Bumb sentenced Bowler to three years of supervised release and ordered her to pay $551,596 in restitution.
U.S. Attorney Fishman credited special agents of the FBI’s Resident Agency in Cherry
Hill, N.J., under the direction of Acting Special Agent in Charge John Brosnan; and special agents of the Department of Education - Office of the Inspector General, under the direction of Special Agent in Charge Brian Hickey, with the investigation leading to today’s sentence.
The government is represented by Assistant U.S. Attorney Matthew J. Skahill of the Special Prosecutions Division in Camden.
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Defense counsel: Richard Sparaco Esq., Cherry Hill, N.J.Former Suburban Chicago Police Chief ArrestedRead the Press Release
New Charges of Witness Tampering, Obstruction of Justice
SPRINGFIELD, Ill. – The former police chief for Country Club Hills, Ill., was arrested on Friday, Mar. 15, 2013, and was ordered to remain in custody pending a court hearing scheduled on Monday, Mar. 25, 2013, before U.S. Magistrate Judge Byron Cudmore. Regina R. Evans, 50, was charged by federal criminal complaint with conspiracy to commit witness tampering and obstruction of justice as well as one count each of witness tampering and obstruction of justice. Evans appeared before Judge Cudmore late Friday, Mar. 15.
Evans and her husband, Ronald W. Evans Jr., 45, were previously charged in a second superseding indictment returned by the grand jury on Feb. 2, 2013, in which both Regina and Ronald were charged with one count of conspiracy to commit wire fraud and three counts of wire fraud and two counts of money laundering. The indictment alleges the couple defrauded a grant program administered by the Illinois Department of Commerce and Economic Opportunity (DCEO.) The indictment alleges the couple fraudulently used the $1,250,000 awarded in 2009 under the Employment Opportunities Grant Program. The February 2013 indictment superseded an indictment returned in June 2012, which charged Ronald as well as his wife, who was initially indicted in April 2012, charged with mail fraud and two counts of money laundering.
The affidavit filed in support of the recent criminal complaint alleges that Evans directed a witness to give false testimony in the continuation of the investigation involving uncharged persons and offenses. According to the affidavit, as part of an ongoing grand jury investigation, and following the grand jury return of the superseding indictment in June 2012, investigators identified and obtained evidence of potential uncharged money laundering offenses related to bank and bank transaction records associated with an Evans bank account for We Are Our Brothers Keeper grant funds. Records revealed that between Nov. 1, 2009 and Dec. 31, 2009, a total of more than $90,000 in checks was allegedly issued to associates of the Evanses. More than $50,000 was allegedly cashed at the bank where a grant account was held and proceeds of a check to an associate were converted to cash and allegedly deposited back into an account controlled by the Evanses.
The affidavit details various testimony provided by a close associate of Regina Evans. The associate, identified as “Individual A” in the affidavit was interviewed by law enforcement at various times, beginning on Mar. 23, 2012, and testified before the grand jury in February 2013.
In early February 2013, “Individual A” was interviewed again and admitted that “A” did no training for the grant program and that at Regina Evans’ direction, checks were cashed and the money was returned to Evans. Further, the affidavit alleges that Regina instructed “Individual A” to tell investigators that “A” received the checks for teaching ‘soft skills’ classes and that “A” used the money to pay bills.
Assistant U.S. Attorney Timothy A. Bass is prosecuting the cases on behalf of the U.S. Attorney’s Office for the Central District of Illinois. The ongoing investigation is being conducted by participating agencies of the Central District of Illinois’ U.S. Attorney’s Office’s Public Corruption Task Force including the U.S. Postal Inspection Service, Chicago Division; the Internal Revenue Service Criminal Investigations; and the Illinois Secretary of State Office of Inspector General. The Illinois Department of Commerce and Economic Development is also cooperating in the investigation. Individuals who wish to provide information to law enforcement regarding matters of public corruption are urged to call the U.S. Attorney’s Office at 217-492-4450.
According to the second superseding indictment, at the time of the alleged fraud, from February 2009 to June 2010, Regina and Ronald Evans owned various for-profit and not-for-profit entities, including the Prime Time Group, Inc., the Regal Theater, LLC. and We Are Our Brother’s Keeper (WAOBK.) In February 2009, on behalf of WAOBK, Evans and her husband applied for grant funding offered under the Employment Opportunities Grant Program. The grant agreement provided for an estimated 40 project participants to focus on bricklaying and electrical pre-apprenticeship training and GED preparation, and a project location at the Regal Theater. In September 2009, DCEO disbursed the $1,250,000 award for the two-year period, beginning on June 1, 2009, and ending on May 31, 2011.
In fact, according to the indictment, both Regina and Ronald Evans well knew that little, if any, of the EOGP training would be or was completed. Instead, the indictment alleges that the defendants concealed their true financial status and that of their various business interests from DCEO and their intent to use a substantial portion of the grant funds shortly after their disbursement for repayment of indebtedness, including delinquent mortgage indebtedness for the Regal Theater.
If convicted, the offense of conspiracy to commit witness tampering and obstruction of justice carries a statutory penalty of up to five years in prison; for witness tampering the penalty is up to 20 years in prison; and for obstruction of justice, the penalty is up to 10 years in prison. If convicted of any of these charged offenses, the penalty is served consecutive to any sentence ordered for the underlying offense.
Members of the public are reminded that a complaint and indictment are merely accusations; the defendants are presumed innocent unless proven guilty.
Former Raleigh Real Estate Developer and Entrepreneur Pleads Guilty to Conspiring to Defraud Investors and BanksRead the Press Release
RALEIGH - United States Attorney Thomas G. Walker announces that today in federal court former real estate developer JAMES THOMAS WEBB, 52 of Miami, pled guilty to Conspiracy to Commit Bank and Wire Fraud before Chief United States District Judge James C. Dever, III.
The Indictment charges that between 2002 and 2006, WEBB operated various real estate companies, including Alpine Properties, LLC and Webb Builders, LLC for a profit. WEBB promised investors in multiple states quick, large, and safe financial gains by investing money with him. WEBB promised investors that he would use their money to purchase, renovate, and resell properties to first-time home buyers in various states, including North Carolina, Virginia, and Tennessee. WEBB caused investors to take out loans on properties that he and his companies had allegedly renovated.
The indictment further charges that despite alleged philanthropic and humanitarian objectives, that WEBB carried out a fraud upon both the investors who gave cash to WEBB, and the banks and lenders who WEBB caused to disburse loan proceeds. According to the indictment, WEBB conspired with former attorney, Amy Robinson, to falsify closing statements associated with the loan transactions. The Indictment charges that the closing statements falsified various facts, including the amount of money paid to WEBB on the transactions. WEBB is also alleged to have conspired with a former appraiser, Larry Max McDaniel, and his associate, Jackie Gale Weaver, to falsify appraisal reports that were given to banks and lenders in connection with investor loans. The appraisal reports are alleged to have falsely stated that McDaniel had physically viewed the properties, when in fact he had not. The indictment also alleges that the properties sold to investors and financed by banks were not always completed or in the condition represented in the appraisal reports.
During the course of the alleged scheme, the indictment charges that WEBB lived lavishly, residing in a multi-million dollar mansion, driving expensive vehicles including a Bentley, traveling extensively, and otherwise paying himself handsomely. WEBB is alleged to have abruptly left North Carolina for Florida in 2004, where he continued to market his services under new company names.
Based upon WEBB’s statements and representations to investors, various individuals collectively invested approximately $10 Million dollars with WEBB and his companies. Additionally, banks and lenders disbursed approximately $20 million in loans, leaving investors holding millions in debt. The indictment alleges that WEBB left various neighborhoods in North Carolina and Virginia blighted with boarded up and dilapidated homes, many of which were ultimately demolished as uninhabitable.
At the sentencing in this case, which the court has presently scheduled for July of 2013, WEBB faces a maximum term of imprisonment of 30 years and $1 Million in fines. WEBB may also be ordered to make restitution to the victims of the conspiracy.
As noted above, WEBB’s case relates to the pending cases against former closing attorney AMY ROBINSON, 35 of Rolesville, former real estate appraiser, JACKIE GALE WEAVER, 55, of West Hamlin, West Virginia, and former national appraisal instructor, LARRY MAX MCDANIEL, 70, of Vienna, West Virginia, who have each pleaded guilty to their roles in the scheme. ROBINSON faces up to five years in prison and a $250,000 fine on the charge of Conspiracy to Commit Mail, Wire, and Bank Fraud, in violation of Title 18, United States Code, Section 371. WEAVER faces up to five years in prison and a $250,000 fine for Conspiring to Make False Statements on Loans in violation of Title 18, United States Code, Section 371. MCDANIEL faces up to 30 years in prison and $1 Million fine for Making False Statements on Loans and Aiding and Abetting, in violation of Title 18, United States Code, Section 1014 and 2. The sentencings in the cases of ROBINSON, WEAVER, and MCDANIEL have also been scheduled for June of 2013.
If you believe that you are a victim in connection with the case against WEBB, ROBINSON, WEAVER, or MCDANIEL, please contact the Victim/Witness Coordinator for the United States Attorney’s Office at (919) 856-4003.
Investigation of this case was conducted by the Federal Bureau of Investigation, the United States Postal Inspection Service, the United States Department of Housing and Urban Development Office of the Inspector General, and the Federal Deposit Insurance Corporation Office of the Inspector General, with the assistance of the North Carolina Appraisal Board. Assistant United States Attorney William M. Gilmore is prosecuting the case.
Former Manager of Virginia Beach Mortgage Brokerage Firm Pleads Guilty to FraudRead the Press Release
NORFOLK, Va. – David Burrus, Jr., age 39, a former Virginia Beach resident now living in Burns, TN, pleaded guilty today in Norfolk federal court to conspiring to commit mail and wire fraud in conjunction with mortgage loans he obtained from 2005 through 2007.
Neil H. MacBride, United States Attorney for the Eastern District of Virginia, Royce Curtin, Special Agent in Charge of the FBI’s Norfolk Field Office, and Joseph Clarke, Special Agent in Charge of the Office of Inspector General, Department of Housing and Urban Development, Mid-Atlantic Region, made the announcement after Burrus entered a guilty plea to count one of the seven count pending indictment before Senior United States District Judge Robert G. Doumar. Burrus faces a maximum penalty of 30 years in prison when he is sentenced on July 8, 2013.
According to court documents, David Burrus, Jr., managed and ran a Virginia Beach branch office of a mortgage brokerage firm headquartered in Tennessee from 2003 through 2007. Burrus also co-owned a title and escrow company which conducted real estate closings for many of the loans originated by loan officers supervised by Burrus. Burrus also owned another entity, Southern Living Properties, which he used to receive monies from numerous fraudulent real estate transactions that he conducted.
From 2005 through 2007, Burrus sought and obtained numerous mortgage loans in both his and his spouse's names. In the course of these transactions, Burrus agreed to buy local properties for more than the sellers' listing prices, provided that the transactions were structured to ensure that any extra sales proceeds were paid to Southern Living Properties at the real estate closings. This ensured that, unbeknownst to the mortgage lenders, Burrus received a substantial portion of the loan proceeds when buying properties in his or his spouse's name.
To induce lenders to approve various requests for mortgage loans, Burrus also submitted false loan applications, forged and fictitious leases purporting to show his properties were generating rental income, and false Southern Living invoices billing property sellers for work and services that had never been performed. Burrus also made material misrepresentations to mortgage lenders about his and his spouse's income and liabilities, his rental income, and about his spouse's intent to occupy properties purchased as her primary residence.
Shortly before the crash of the real estate market, Burrus also sought to sell properties in his portfolio to his associates and offered to pay kickbacks to buyers to facilitate sales. Rhonda Wyland, age 44, of Virginia Beach and then a loan officer working for Burrus, agreed to purchase one such property in Portsmouth, VA, in exchange for a kickback of $140,000. Wyland also made false statements to obtain a mortgage loan to complete this transaction and, after receiving the $140,000 kickback, defaulted upon the loan. On December 12, 2012, Wyland pled guilty to a criminal information charging her with conspiracy to commit wire fraud. Wyland faces a maximum penalty of 5 years in prison when she is sentenced by Chief United States District Judge Rebecca Beach Smith on April 5, 2013.
As a result of his activities, Burrus obtained mortgage loans to purchase seventeen properties in Hampton Roads and then defaulted upon those loans. The known losses stemming from these loans are approximately $2,036,296.00.
This case was investigated by the FBI’s Norfolk Field Office and HUD's Office of Inspector General. Assistant United States Attorney Robert Krask is prosecuting the case on behalf of the United States.
A copy of this press release may be found on the website of the United States Attorney's Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.Former Jackson Attorney Clay Mccormack Indicted for Bank Fraud, Making False StatementsRead the Press Release
Jackson, TN – Clay McCormack, 49, of Jackson, TN, was indicted today by a federal grand jury for his role in a scheme to fraudulently obtain loan proceeds from federally insured mortgage lenders, announced U.S. Attorney Edward L. Stanton III.
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The indictment alleges that as early as October 2007, McCormack entered into a criminal conspiracy with James Lee Bishop, a local real estate investor. Bishop would recruit individuals or limited liability companies to purchase real property for the purpose of investment. While acting as the closing attorney for Teel, McCormack and Maroney, a law firm in Jackson, TN, McCormack would indicate on the HUD-1 reporting documentation that certain lenders were paid off via check as a result of the closing. He would then void those checks, or have others void the checks, within days and reissue the checks to Bishop.
This money was then used by Bishop to provide the funds at closing on behalf of the borrowers; and the paperwork would fraudulently reflect that the funds had actually been provided by the borrowers. McCormack would provide a letter to the new lender indicating that they were in first lien position on the property.
Counts one and two of the indictment allege that McCormack’s scheme defrauded Community Bank, 3200 North Highland Ave, Jackson, TN and FirstSouth Bank, 1862 Hwy. 45 Bypass, Jackson, TN. Counts three and four allege that he created false documentation and submitted it to the banks in furtherance of his crime.
McCormack faces up to 30 years in prison and a one million dollar fine for each of the two bank fraud counts; and up to five years in prison and a $250,000 fine for each of the two counts of making false statements. The government is also seeking a criminal forfeiture money judgment of $3,832,366.88 representing the amount involved in the two bank fraud charges.
This case was investigated by the FBI Memphis, Jackson Resident Agency and by the United States Postal Inspection Service. The case is being prosecuted by Assistant United States Attorney David Henry on behalf of the government.
The charges and allegations contained in the indictment are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Former HSCO Deputy Lands in Federal Prison for Scheme to Steal NarcoticsRead the Press Release
HOUSTON - Richard Bryan Nutt, 45, a former Harris County Sheriff’s Office (HSCO) deputy, has been sentenced to federal prison for conspiring with others to use his position as a law enforcement officer to steal drug loads from dealers and split the proceeds with others, United States Attorney Kenneth Magidson announced today. Nutt pleaded guilty Feb. 7, 2011.
Today, United States District Judge Vanessa Gilmore sentenced him to 46 months in prison to be followed by a one-year-term of supervised release. At sentencing, Judge Gilmore took into consideration that it was his first offense and that Nutt has more than 20 years in law enforcement and military service. At the hearing, Nutt apologized to the court and to his family.
In late 2010, the Houston Police Department (HPD) obtained information that members of law enforcement were robbing shipments of narcotics in Houston and subsequently initiated a sting operation. On Dec. 15, 2010, then Deputy Nutt met with his co-conspirators, at which time they learned a vehicle containing narcotics or narcotics proceeds would be driving through Houston. They agreed to stop the vehicle, a Chrysler Aspen SUV, with the assistance of Deputy Nutt. He was to conduct a traffic stop of the SUV, which was reportedly to be driven by a drug dealer from Mexico, and pretend to arrest the driver then release him while the co-defendants took the vehicle containing the drugs. The conspirators would then split the money from the sale of the drugs.
Later that day, Nutt, in full uniform and driving a silver pickup equipped with red and blue emergency lights, spotted and followed the Chrysler Aspen SUV as it drove into a parking lot of a Houston area shopping center. Once parked, the SUV driver, actually an undercover HPD officer, abandoned the SUV. A package thought to contain cocaine was then transferred from the SUV to a blue Nissan Altima. Nutt entered the vehicle as it drove off the lot and it was soon stopped by HPD officers. The package, which actually contained fake cocaine, was found and removed from under the passenger seat where Nutt sat. Nutt and his co-defendants were arrested by law enforcement officers and subsequently charged federally.
Others involved in the scheme have all pleaded guilty and also been sentenced to prison.
Nutt, previously released on bond, was allowed to continue on bond and voluntarily surrender to a U.S. Bureau of Prisons facility to be determined in the near future.
The investigation was conducted by the Internal Affairs and Narcotics Divisions of the Houston Police Department with the assistance of the FBI. The case was prosecuted by Assistant United States Attorney James McAlister.
Former Fund Manager Sentenced to 10 Years in Federal Prison in Investment Fraud Scheme That Cost Victims More Than $24 MillionRead the Press Release
LOS ANGELES – A former investment fund manager and radio personality who admitted bilking investors out of millions of dollars by falsely promising to purchase corporate bonds backed by the Troubled Asset Relief Program (TARP) was sentenced this afternoon to 120 months in federal prison.
John Farahi, 56, of Bel Air Estates, who operated the Beverly Hills-based New Point Financial Services, Inc. and had a regular radio show on KIRN-AM, was sentenced by United States District Judge Phillip S. Gutierrez. In addition to the 10-year prison term, Judge Gutierrez ordered Farahi to pay $24,366,617 in restitution to 59 victims.
Farahi pleaded guilty last June to four felony counts – mail fraud, loan fraud, selling unregistered securities and conspiracy to obstruct justice while collaborating with his corporate counsel to cover-up the fraud. In a plea agreement filed in United States District Court, Farahi acknowledged that the scheme caused losses of more than $7 million, but prosecutors successfully demonstrated that the actual losses were well over $24 million.
When he pleaded guilty, Farahi admitted that he engaged in a long-running scheme that defrauded victims by using their funds for a range of unauthorized purposes, including paying off prior investors and subsidizing options futures trading. Farahi also admitted that he drew down on personal lines of credit based upon false statements to federally insured banks, including Bank of America, Sun West Bank and U.S. Bank. Farahi also acknowledged that he violated federal securities laws by selling unregistered securities and failing to comply with the SEC’s rules and regulations for selling unregistered securities. Farahi further admitted that he conspired with his attorney to obstruct an SEC investigation by, among other things, altering documents that were turned over to the SEC and providing false and misleading testimony under oath to the SEC on three separate occasions.
Attorney David Tamman, 46, of Santa Monica, was found guilty following trial last year of 10 counts, including obstruction of justice, altering records in a federal investigation, and being an accessory after the fact to Farahi’s crimes. The evidence presented at the trial showed that Tamman conspired with Farahi to obstruct the SEC investigation into Farahi’s fraud scheme. Tamman, who was suspended from practicing law earlier this year by the California State Bar, served as outside counsel for Farahi’s investment company and was a partner at Nixon Peabody. Tamman is scheduled to be sentenced by Judge Gutierrez on May 20.
The case against Farahi and Tamman is the result of an investigation by the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) and the Federal Bureau of Investigation. The SEC provided substantial assistance during the investigation.
The SEC filed a federal civil complaint alleging violations of the federal securities laws against Farahi and others in January 2010. The lawsuit alleged that Farahi and others conducted an unregistered offering fraud aimed at Iranian-Americans in the Los Angeles area (see: http://www.sec.gov/news/press/2010/2010-3.htm). The SEC subsequently obtained a permanent injunction, as well as orders freezing Farahi’s and New Point’s assets and appointing a receiver over New Point Financial Services.
Release No. 13-036
Former Chairman and Ceo of West End Financial Advisors Sentenced in Manhattan Federal Court to 42 Months in Prison for Securities FraudRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that WILLIAM LANDBERG, former Chairman and Chief Executive Officer (“CEO”) of West End Financial Advisors, LLC (“West End”), was sentenced today to 42 months in prison in connection with an $8.7 million investment scheme. LANDBERG pled guilty in November 2011 to one count of securities fraud before U.S. District Judge Laura Taylor Swain, who also imposed today’s sentence.
According to the Information filed in Manhattan federal court:
West End was a boutique financial services firm located in New York, New York, specializing in alternative investment opportunities and traditional asset management for various types of clients, including institutions and high net worth individuals. West End served as the investment manager for various partnerships it established as investment vehicles or investment funds and raised money for them through the sale of limited partnership interests. In addition to serving as West End's Chairman, CEO, and Manager, LANDBERG also served as the Chairman of Sentinel Investment Management Corporation (“Sentinel”), an investment adviser registered with the U.S. Securities and Exchange Commission (the “SEC”) that shared office space with West End.
Among the funds managed by West End was the West End/Mercury Short Term Mortgage Fund LP (the “Hard Money Fund”). According to a private placement memorandum issued to investors by the Hard Money Fund (the “Hard Money Fund PPM”), its objective was to “achieve short term, high-yield interest income through the making, servicing, purchasing, selling and repurchasing, and purchasing and selling participation in, mortgage loans” (the “Mortgage Loans”). According to the Hard Money Fund PPM, the Hard Money Fund would sell mortgage loans on particular properties to MCC Funding, Inc. (“MCC Funding”), a wholly owned subsidiary of the Hard Money Fund. MCC Funding would purchase the Mortgage Loans using capital contributions made to MCC Funding by Hard Money Fund investors, as well as principal and interest advances it received from the New York branch of West LB AG (“West LB”), a bank headquartered in Germany. In return, West LB would receive the Mortgage Loans as collateral for the fund advances.
The Hard Money Fund PPM specifically stated that MCC Funding would use the proceeds from West LB “only to purchase Mortgage Loans from the [Hard Money] Fund and to satisfy reserve and fee obligations under the Credit and Security Agreement.” Instead, from January 2009 to April 2009, LANDBERG obtained three loan advances from West LB totaling $8.7 million – all purportedly for Hard Money Fund transactions – and diverted the funds to other uses, including for his own benefit. He also put some of the money into a separate fund managed by West End.
In addition to his prison term, LANDBERG, 61, of New York, New York, was sentenced to three years of supervised release, with 18 months on home confinement. He was also ordered to forfeit $8.7 million, which is the amount he misappropriated during the scheme, and pay $1.125 million in restitution.
Mr. Bharara praised the work of the Federal Bureau of Investigation and thanked the SEC for its assistance in the investigation.
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. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over
the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.StopFraud.gov.
Assistant United States Attorney Jenna Dabbs is in charge of the prosecution.