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Monday 18 March 2013
Former CalPERS CEO and Former Placement Agent Indicted for Conspiracy and FraudRead the Press Release
SAN FRANCISCO - A federal grand jury in San Francisco indicted Alfred J. Villalobos, of Reno, Nevada, and Federico R. Buenrostro, Jr., aka Fred Buenrostro, of Sacramento, California, on charges of conspiracy to defraud the United States, engaging in a false scheme against the United States, and conspiracy to commit mail fraud and wire fraud, United States Attorney Melinda Haag announced. Mr. Buenrostro was also charged in the same indictment with making a false statement to the United States and obstruction of justice.
According to the indictment, Mr. Villalobos, age 69, and Mr. Buenrostro, age 64, conspired to create and transmit fraudulent documents in connection with a $3 billion investment by the California Public Employee Retirement System (“CalPERS”) into funds managed by Apollo Global Management (“Apollo”), a private equity firm based in New York City.
ARVCO Capital Research LLC (“ARVCO”), a financial services firm founded and managed by Mr. Villalobos, acted as a placement agent in helping Apollo to secure these investments by CalPERS. In each instance, Apollo required ARVCO to obtain an Investor Disclosure letter from CalPERS prior to paying ARVCO any fees for its efforts in securing CalPERS’ investments into Apollo-managed funds, citing, among other reasons, Apollo’s obligations under the securities laws.
After CalPERS’ legal and investment offices declined to sign a certain Investor Disclosure letter documenting ARVCO’s legal relationship with Apollo, Mr. Villalobos and Mr. Buenrostro conspired to create a series of fraudulent Investor Disclosure letters that were transmitted to Apollo. Apollo paid ARVCO a total of approximately $14 million dollars in fees after receiving the fraudulent letters.
ARVCO transmitted the last fraudulent Investor Disclosure letter in June 2008, a few weeks before Mr. Buenrostro retired from CalPERS. On July 1, 2008, Mr. Villalobos hired Mr. Buenrostro to work for ARVCO. When civil and later criminal investigations were opened into the operations of ARVCO and its role as a placement agent in connection with CalPERS’ investments in Apollo-managed funds, both defendants made false statements to, and concealed information from, the SEC, the USPIS, and the FBI, about the authenticity of the Investor Disclosure letters in order to defeat and obstruct the lawful functions of those agencies.
Mr. Villalobos and Mr. Buenrostro made their initial appearance in federal court in San Francisco on March 18, 2013, and are currently out on bond. Mr. Buenrostro’s next scheduled appearance is Monday, March 25, 2013, at 9:30 a.m., for identification of counsel and review of the terms of his bond. Mr. Villalobos’ next scheduled appearance is April 9, 2013, at 9:30 a.m., for review of the terms of his bond. Both defendants are scheduled to appear before in District Court on May 8, 2013, at 2:00 p.m., before Judge Breyer.
The maximum statutory penalty for conspiracy to commit mail fraud and wire fraud is 20 years imprisonment, $250,000 fine or twice the amount of gain or loss, whichever is greater, three years of supervised release, and a $100 special assessment. The maximum penalty for each count of conspiracy to defraud the United States, false scheme against the United States, false statement to the United States, and obstruction of justice is five years of imprisonment, $250,000 fine or twice the amount of gain or loss, whichever is greater, three years of supervised release, and a $100 special assessment. Restitution may also be ordered as to each of the five counts. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Timothy J. Lucey is the Assistant United States Attorney who is prosecuting the case with the assistance of Laurie Worthen and Maryam Beros. The prosecution is the result of a two-and-a half year investigation by the United States Postal Inspection Service and the Federal Bureau of Investigation, with substantial assistance from the Los Angeles Regional Office of the Securities and Exchange Commission as well as the United States Secret Service.
Please note, an indictment contains only allegations against an individual and, as with all defendants, Mr. Villalobos and Mr. Buenrostro must be presumed innocent unless and until proven guilty.
(CalPERS Indictment )
Former Business Manager Pleads Guilty to Stealing More Than $730,000 from D.C. Law Firm-Defendant Issued Unauthorized Checks, Paid Himself Excessive Salary-Read the Press Release
WASHINGTON – William B. McNichols, 48, who handled accounting and other financial matters for a Washington, D.C. law firm, pled guilty today to one count of mail fraud in the embezzlement of more than $730,000, announced U.S. Attorney Ronald C. Machen Jr. and Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office.
McNichols, of Colchester, Conn., pled guilty in the U.S. District Court for the District of Columbia. The Honorable Robert L. Wilkins scheduled sentencing for June 17, 2013. The charge carries a statutory maximum of 20 years in prison, a potential fine, and other penalties. Under federal sentencing guidelines, McNichols faces a likely range of 27 to 33 months in prison and a fine of $6,000 to $60,000. As part of his plea agreement, he has agreed to pay $732,863 in restitution to the law firm. He also is subject to a forfeiture judgment.
According to evidence presented to the Court by Assistant U.S. Attorney Sherri L. Schornstein, McNichols worked from May 2001 until March 2011 as the finance/business manager of Trister, Ross, Schadler and Gold, PLLP, a law firm. From approximately December 2007 until the summer of 2010, McNichols also performed accounting services for an affiliated company, the Ross Yoon Agency, which was based at the law firm.
Beginning in August 2004 and continuing until March 2011, McNichols embezzled about $631,736 from Trister Ross and about $101,127 from the Ross Yoon Agency. He obtained the money from Trister Ross by issuing excessive salary payments to himself and by issuing checks to pay personal credit card bills and other personal expenses. He obtained the money from the Ross Yoon Agency by issuing unauthorized checks to himself. He used the U.S. mail to send the unauthorized checks to his credit card companies and other companies.
In announcing the plea, U.S. Attorney Machen and Assistant Director in Charge Parlave praised those who investigated the case for the FBI’s Washington Field Office. They also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialist Donna Galindo, Assistant U.S. Attorney Anthony Saler, who assisted with forfeiture issues, and Assistant U.S. Attorney Sherri L. Schornstein, who is prosecuting the case.
13-101Felon with Active Criminal History Sentenced to 77 Months in Prison for Possessing GunRead the Press Release
PITTSBURGH, Pa. - A resident of Pittsburgh, Pa., has been sentenced in federal court to 77 months imprisonment followed by three years supervised release on his conviction of violating federal firearms laws, United States Attorney David J. Hickton announced today.
Senior United States District Judge Donetta W. Ambrose imposed the sentence on Akeem Abdul Caldwell, 27. Caldwell was found guilty by a jury on December 5, 2012, of the crime of possession of a firearm by a convicted felon.
According to Assistant United States Attorney Charles A. Eberle, who prosecuted the case, the evidence presented at trial established that on Jan. 24, 2012, Caldwell, being a convicted felon, illegally possessed a Norinco, Model 1911A1, .45 caliber pistol. Federal law prohibits anyone who has been convicted of a crime punishable by a term of imprisonment exceeding one year to possess a firearm.
According to information presented to the Court at sentencing, Caldwell's involvement in criminal activities began at age 14 and progressed to the robbery of a pizza delivery driver at age 17. In January 2005, at age 18, Caldwell was convicted in the Court of Common Pleas of Allegheny County of violating Pennsylvania's firearms law when he was found in possession of a sawed-off shotgun despite being a person prohibited from possessing a firearm. In early December 2005, at age 19, Caldwell was convicted in the Court of Common Pleas of Allegheny County of the crime of possession with the intent to deliver 73 stamp bags of heroin found in his pocket by the Pittsburgh Police. Also in early December 2005, Caldwell was convicted in federal court of possession of a firearm by a convicted felon, when on Sept. 14, 2005, the police found him in possession of a 9mm caliber handgun that was loaded with eight rounds of ammunition and one round in the gun's firing chamber. Caldwell was then convicted in federal court in 2008 for the crime of escape when, after being released from federal prison to a halfway house, he walked out of the halfway house and never returned.
U.S. Attorney Hickton commended the Pittsburgh Bureau of Police and the Bureau of Alcohol, Tobacco, Firearms and Explosives for the investigation leading to the successful prosecution of Caldwell. This case was prosecuted under Project Safe Neighborhoods, a collaborative effort by federal, state and local law enforcement agencies, prosecutors and communities to prevent, deter and prosecute gun crime.
FEMA Contractor Admits Illegally Accepting Gratuity from Victim of Hurricane IreneRead the Press Release
NEWARK, N.J. – A Texas woman working as a contractor for the Federal Emergency Management Agency (“FEMA”) admitted today that she demanded and received an illegal gratuity from a New Jersey resident who had applied for FEMA assistance for property damaged by Hurricane Irene, U.S. Attorney Paul J. Fishman announced.
Tara Fannin-Mark, a/k/a Tara Mark, 44, of Houston, Texas, pleaded guilty before U.S. District Judge Jose L. Linares in Newark federal court to an Information charging her with one count of receipt of an illegal gratuity by a public official.
According to documents filed in this case and statements made in court:
Fannin-Mark was employed as an inspector by a company that had entered into a contract with FEMA to inspect property belonging to individuals who sought FEMA assistance for damage caused by natural disasters. Fannin-Mark was assigned to conduct inspections of houses and other property of New Jersey residents who had applied for FEMA disaster assistance for damage caused by Hurricane Irene, which struck New Jersey in August 2011.
On Oct. 26, 2011, after a person listed in the information as a “Cooperating Witness” had initiated a request for FEMA disaster assistance, Fannin-Mark conducted an inspection at the Cooperating Witness’s residence in Essex County, N.J. On Oct. 31, 2011, having been informed that the Cooperating Witness had received a $2,313 disaster assistance check from FEMA, Fannin-Mark told the Cooperating Witness that Fannin-Mark needed $230 of the FEMA payment. Fannin-Mark received the $230 illegal gratuity from the Cooperating Witness in early November 2011.
The count to which Fannin-Mark pleaded guilty is punishable by a maximum potential penalty of two years in prison. Sentencing is scheduled for July 9, 2013.
U.S. Attorney Fishman credited the Department of Homeland Security, Office of Inspector General, under the direction of Special Agent in Charge Gregory Null, with the investigation leading to today’s guilty plea.The government is represented by Senior Litigation Counsel J Fortier Imbert of the U.S. Attorney’s Office Special Prosecutions Division Newark.
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Defense counsel: André Ligon Esq., Houston, TexasFannin-Mark, Tara Information
FBI Provides New Information Regarding the 1990 Isabella Stewart Gardner Museum Art HeistInformation Sought from Those in Philadelphia and Connecticut Who May Have Knowledge of the Art’s LocationRead the Press Release
Boston, MASS: The FBI, along with Boston’s Isabella Stewart Gardner Museum, and the United States Attorney’s Office for the District of Massachusetts, released new information about one of the largest property crimes in U.S. history, the art theft from the museum more than two decades ago. The FBI is appealing to the public for help in what is one of the FBI’s Top Ten Art Crimes.
The FBI believes it has determined where the stolen art was transported in the years after the theft and that it knows the identity of the thieves, Richard DesLauriers, Special Agent in Charge of the FBI’s Boston office, revealed for the first time in the 23 year investigation. “The FBI believes with a high degree of confidence in the years after the theft the art was transported to Connecticut and the Philadelphia region and some of the art was taken to Philadelphia where it was offered for sale by those responsible for the theft.” DesLauriers added, “With that same confidence we have identified the thieves who are members of a criminal organization with a base in the mid-Atlantic states and New England.” After the attempted sale, which took place approximately a decade ago, the FBI’s knowledge of the art’s whereabouts is limited.
Information is being sought from those who possess, or know the whereabouts of, the 13 stolen works of art, including rare paintings by Rembrandt and Vermeer, by publicizing new details about the case and continuing to highlight the $5 million reward for the return of the art. Although the FBI does not know where the art is currently located, the FBI is continuing its search, both in and beyond the Connecticut and Philadelphia areas. “With this announcement, we want to widen the ‘aperture of awareness’ of this crime, to the reach the American public and others around the world,” said DesLauriers.
Anthony Amore, the museum’s chief of security, noted that the reward is for “information that leads directly to the recovery of all of our items in good condition.” He further explained, “You don’t have to hand us the paintings to be eligible for the reward. We hope that through this media campaign people will see how earnest we are in our attempts to pay this reward and make our institution whole. We simply want to recover our paintings and move forward. Today marks 23 years since the robbery. It’s time for these paintings to come home.”
“The investigation into the Gardner Museum theft has been an active and aggressive effort, with law enforcement following leads and tracking down potential sources of information around the globe. Over the past three years, I have visited the museum several times, and each time I entered the Dutch Room and saw the empty frames, I was reminded of the enormous impact of this theft. I do remain optimistic that one day soon the paintings will be returned to their rightful place in the Fenway, as Mrs. Gardner intended,” said U.S. Attorney Carmen M. Ortiz. “As we have said in the past, the U.S. Attorney’s Office will consider the possibility of immunity from criminal prosecution for information that leads to the return of the paintings based on the set of facts and circumstances brought to our attention. Our primary goal is, and always has been, to have the paintings returned.”
To recover stolen items and prosecute art and cultural property crime, the FBI has a specialized Art Crime Team of 14 Special Agents supported by special trial attorneys. The team investigates theft, fraud, looting and trafficking across state and international lines with estimated losses running as high as $6 billion annually. The FBI also runs the National Stolen Art File, a computerized index of stolen art and cultural properties that is used as a reference by law enforcement agencies worldwide.
The FBI stressed that anyone with information about the artwork may contact the FBI at 1-800-CALL FBI (1-800-225-5324) or the museum directly or through a third party, said Special Agent Geoffrey Kelly, who is the lead investigator for the theft and a member of the art crime team, “In the past, people who realize they are in possession of stolen art have returned the art in a variety of ways, including through third parties, attorneys and anonymously leaving items in churches or at police stations.” Tips may also be submitted online at https://tips.fbi.gov.
The publicity campaign announced today includes a dedicated FBI website on the Gardner Museum theft, video postings on FBI social media sites, publicity on digital billboards in Philadelphia region, and a podcast. To view and listen to these items, link to the FBI’s new website about the theft: www.FBI.gov/gardner.
Eastlake Man Sentenced to 27 Months in Prison, Ordered to Pay $1 MillionRead the Press Release
An Eastlake man was sentenced to more than two years in prison and ordered to pay $1 million for his role in a fraud against St. Paul Croatian Federal Credit Union, said Steven M. Dettelbach.
Marko Nikoli, age 35, pleaded guilty last year to two counts of bank fraud and one count of money laundering.
U.S. District Judge Christopher A. Boyko sentenced Nikoli to 27 months in prison.
SPCFCU, located in Eastlake, was placed into conservatorship by the National Credit Union Administration on April 23, 2010. One week later, the NCUA liquidated SPFCFU and discontinued its operations after determining the credit union was insolvent. At that time, SPCFCU served about 5,400 members and was believed to have assets of approximated $239 million.
This case is being prosecuted by Assistant U.S. Attorneys Bridget M. Brennan and Justin Herdman following an investigation by the Cleveland office of the Federal Bureau of Investigation and the Internal Revenue Service, Criminal Investigation Division.
Employee Sentenced to over 4 Years in Prison for Stealing from Non-Profit Organization and up to 72 of Its Disabled ClientsRead the Press Release
Stole Over $166,000 During Six Years
Greenbelt, Maryland - U.S. District Judge Alexander Williams Jr. sentenced Penny Parker Green, age 34, of Bowie, Maryland, today to 54 months in prison, followed by three years of supervised release, in connection with a scheme to steal over $166,000 from the ARC of Prince George’s County, which provides in-home support, daycare and employment services for people with intellectual and developmental disabilities and their families. Judge Williams ordered that Green pay restitution of $166,137, and forfeit two laptops, three desktop computers, a printer, XBOX, Wii, Playstation 3 and four HDTVs obtained as a result of the scheme.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge David Beach of the United States Secret Service – Washington Field Office; and Chief Mark A. Magaw of the Prince George's County Police Department.
Green was employed by the ARC of Prince George’s County and according to her plea agreement, from November 2006 to February 2012, Green stole $166,137 from ARC and up to 72 group home residents. Green used her ARC corporate credit card to: purchase airfare to Aruba, an island tour and a sunset sail; install custom closets in her home; and purchase computers, electronics, furniture and other merchandise and services. Green also directed other employees to withdraw cash from individual residents’ bank accounts for her personal use. Finally, Green stole petty cash that was intended for the benefit of individual residents to purchase items for herself. Green concealed the thefts by submitting paperwork that falsely described the expenditures, and then debited individual residents’ accounts for the purchases.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
United States Attorney Rod J. Rosenstein thanked the U.S. Secret Service and Prince George's County Police Department for their work in the investigation. Mr. Rosenstein praised Assistant U.S. Attorney Christen A. Sproule, who prosecuted the case.
Downey Man Who Participated in Tax Fraud and Identity Theft Scheme Sentenced to 54 Months in Federal PrisonRead the Press Release
LOS ANGELES – A Downey man who cashed tax refund checks that were issued based on false tax returns and fraudulently obtained more than $1.3 million was sentenced today to 54 months in federal prison.
William Gomez-Corzo, 52, who also used the name “William Perez,” was sentenced this afternoon by United States District Judge Christina A. Snyder, who ordered the defendant to pay $1,320,566 in restitution to the IRS.
Gomez-Corzo pleaded guilty to one count of theft of public money for his role in a scheme that defrauded the IRS of millions of dollars by filing false income tax returns. As part of the scheme, Gomez-Corzo and his associates used the names and social security numbers of residents of Puerto Rico to file more than 1,000 false federal income tax returns seeking tax refunds based on the earned income credit. Gomez-Corzo and his co-conspirators used false out-of-state drivers licenses to open private mail boxes to receive the tax refund checks.
Gomez-Corzo also pleaded guilty to one count of aggravated identity theft for using an identity stolen from a dead man to obtain a United States passport. The 54-month sentence included a mandatory two-year term for the identity theft charge.
The investigation of Ortega was conducted by IRS - Criminal Investigation, the United States Secret Service and the United States Postal Inspection Service.
Release No. 13-035
Derry Woman Pleads Guilty in Heroin Distribution ConspiracyRead the Press Release
Johnstown, Pa. - A resident of Derry, Pa., pleaded guilty in federal court to a charge of violating federal narcotics laws, United States Attorney David J. Hickton announced today.
Holly Thomas, 21, pleaded guilty to one count before United States District Judge Kim R. Gibson.
In connection with the guilty plea, from the spring of 2011 to May 15, 2012, Thomas, along with co-defendants, conspired to distribute and possess with intent to distribute heroin.
Judge Gibson scheduled sentencing for Aug. 6, 2013, at 10:30 a.m. The law provides for a maximum total sentence of 20 years in prison and a fine of $1,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Stephanie L. Haines is prosecuting this case on behalf of the government.
The Laurel Highlands Resident Agency of the Federal Bureau of Investigation, the Pennsylvania State Police and the Indiana Police Department conducted the investigation that led to the prosecution of Thomas. Other agencies participating in this investigation included the Pennsylvania Attorney General’s Office, the Cambria County Drug Task Force, the Cambria County Sheriff’s Department, the Cambria County District Attorney’s Office, the Indiana County Drug Task Force, and the Indiana County District Attorney’s Office.
Citizen of Turkey Sentenced to 59 Months in Federal Prison for Role in Atm “skimming” SchemeRead the Press Release
March 18, 2013David B. Fein, United States Attorney for the District of Connecticut, announced that MEHMET AYDIN, 42, a citizen of Turkey last residing in Miller Place, N.Y., was sentenced today by United States District Judge Janet Bond Arterton in New Haven to 59 months of imprisonment for his participation in an ATM skimming scheme across southern New England.
According to court documents and statements made in court, between February 2011 and July 2011, AYDIN, Ahmet Cilek, Gabriella Graham and others conspired to install “skimming” devices on automated teller machines (“ATMs”) at 11 banks and one credit union in Connecticut, Massachusetts and Rhode Island. The devices were able to capture the information encoded on the magnetic strips of bank cards used by ATM customers. The co-conspirators also placed devices on the ATMs that contained hidden pinhole cameras, which recorded the personal identification numbers that bank customers keyed into the ATMs to gain access to their accounts. The co-conspirators used the stolen information captured by the skimming devices and pinhole cameras to create counterfeit bank cards that allowed them to withdraw funds from the customers’ accounts.
As a result of this scheme, approximately 500 bank accounts were victimized and financial institutions have suffered losses of approximately $336,057.64. As part of his sentence, AYDIN was ordered to make full restitution, jointly and severally with his co-defendants.
AYDIN has been detained since his arrest on November 2, 2011. On April 12, 2012, he pleaded guilty to one count of conspiracy to commit bank fraud and one count of aggravated identity theft.
Cilek and Graham also pleaded guilty. On June 14, 2012, Graham was sentenced to 45 months of imprisonment. Cilek awaits sentencing.
This investigation has been conducted by the Connecticut Financial Crimes Task Force, which includes members of the United States Secret Service, United States Postal Inspection Service, United States Department of State, Bureau of Diplomatic Security, Internal Revenue Service – Criminal Investigation, Connecticut State Police, and the Greenwich, Hartford, Stamford, Shelton and Stratford Police Departments. U.S. Attorney Fein specifically recognized the efforts of the Greenwich Police Department, Darien Police Department, U.S. Citizenship and Immigration Service’s Office of Fraud Detection and National Security, and U.S. Secret Service in Boston and Providence for their assistance in the investigation and prosecution of this matter.
This case is being prosecuted by Assistant U.S. Attorney Douglas P. Morabito.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
[email protected]Chief Scientist of Government Contractor Sentenced to One Year in Prison for Conspiring to Obtain Pirated Software from Chinese and Russian CybercriminalsRead the Press Release
WILMINGTON, Del. – Dr. Wronald Best, age 55, of Owensboro, Kentucky, was sentenced to one year in prison today for conspiracy to commit criminal copyright infringement, in which Best obtained over $2.3 million in stolen software from Chinese and Russian cybercriminals. Best also was sentenced to three years of supervised release, which will commence following his prison term.
Investigation of China-based Cybercriminal Leads to Identification of Dr. Wronald Best
According to statements made at today’s hearing and documents filed in court, the U.S. Department of Homeland Security, Homeland Security Investigations, identified a China-based website located at www.crack99.com that was advertising thousands of pirated software titles at a fraction of their retail value. The investigation revealed that this website was operated by Xiang Li, age 36, of Chengdu, China, who used the website to distribute pirated or cracked software to customers all over the world, including the United States. Software is “cracked” when its digital license files and access control features have been disabled or circumvented.
The HSI investigation revealed that between April 2008 to June 2011, Xiang Li engaged in over 500 transactions, in which he distributed approximately 550 different copyrighted software titles to at least 325 purchasers located in at least 28 states and over 60 foreign countries. These software products were owned by approximately 200 different manufacturers and were worth over $100 million. The software is used in a wide range of applications including defense, engineering, manufacturing, space exploration, aerospace simulation and design, mathematics, and explosive simulation. More than one-third of the unlawful purchases were made by individuals within the United States, including small business owners, government contractors, students, inventors, and engineers.
Between January 2010 and June 2011, undercover agents made a series of purchases of pirated software worth hundreds of thousands of dollars from Xiang Li’s CRACK99 website. The investigation culminated in a face-to-face meeting between Xiang Li and undercover agents on the Island of Saipan, in June 2011. Xiang Li had agreed to travel from China to Saipan to deliver pirated software, design packaging, and 20 gigabytes of proprietary data obtained from an internal computer server of a U.S. software company to undercover agents posing as U.S. businessmen. In addition, Xiang Li and the undercover agents were meeting to discuss a plan to distribute pirated software to small businesses in the United States. The undercover agents arrested Xiang Li on June 7, 2011, after he delivered the stolen intellectual property to them at a Saipan hotel. Xiang Li was transported to the District of Delaware, where he has remained in custody since June 2011.
On January 7, 2013, Xiang Li pled guilty to conspiracy to commit criminal copyright infringement and wire fraud in the United States District Court for the District of Delaware. Li is scheduled to be sentenced by United States District Judge Leonard P. Stark on May 3, 2013.
Dr. Wronald Best Conspires with International Cybercriminals to Commit IP Theft
During the investigation, agents learned that Dr. Wronald Best was one of CRACK99’s top customers in 2008 and 2009. As the investigation shifted focus to Best’s activities, agents learned that between September 2008 and May 2011, Best conspired with Xiang Li and other computer software crackers located in China and Russia to obtain and utilize unauthorized copies of industrial-grade software in the performance of government contracts for the military and law enforcement sectors. At the time, Best held the position of “Chief Scientist” at MPD, Inc., a Kentucky-based government contractor that services the U.S. and foreign militaries and law enforcement agencies.
The HSI investigation revealed that Best communicated electronically with approximately 35 different computer code crackers and obtained over 60 pirated software applications from Chinese and Russian sources. He paid over $6,000 to obtain pirated software worth over $2.3 million. Best told special agents that he used that cracked software to conduct computer simulations on components MPD, Inc. was designing for use in military helicopters, including the Black Hawk helicopter and the presidential helicopter fleet, commonly referred to as “Marine One.” Other projects on which Best used cracked software included designing Patriot missile components, police radars and breath analysis equipment widely used by American police departments.
The investigation also confirmed that Best was more than a customer of Chinese and Russian cybercriminals. Best also used his position as Chief Scientist” for a government contractor to obtain trial licenses to use various software applications, which he then provided to cybercriminals for cracking and future dissemination. He also provided these international software pirates with instructions on how to disable the security devices in certain software.
Following the sentencing hearing, United States Attorney Charles M. Oberly, III, stated: “Each year, American companies lose intellectual property valued in the billions of dollars to international cybercriminals engaged in rampant digital theft. Mr. Best’s offenses are aggravated by the fact that he used pirated software obtained from these thieves to design parts for our military and law enforcement personnel. The successful prosecution of this conspiracy ring proves that neither the international cybercriminal behind a computer in China nor his customers behind computers in America are beyond the reach of U.S. law enforcement.”
“Dr. Best betrayed our country and those who are sworn to protect it, by conspiring with international cyber thieves who believed they could remain anonymous in cyberspace. They were wrong,” said John P. Kelleghan, special agent in charge of Homeland Security Investigations in Philadelphia. “HSI and our law enforcement partners will continue to ensure that those who commit these crimes, no matter where they reside, are held accountable for their actions.”
This case is being investigated by the United States Department of Homeland Security, Homeland Security Investigations, and the Defense Criminal Investigative Service. This case is being prosecuted by Assistant United States Attorneys David L. Hall and Edward J. McAndrew.
Bucks County Man Pleads Guilty to Gun ChargesRead the Press Release
PHILADELPHIA - David Manilla, 51, of Worcester, PA, pleaded guilty today to possession of firearms by a convicted felon. Manilla was found to be in possession of multiple firearms and ammunition when police investigated the November 2010 shooting death of a hunter. Manilla, who fired the fatal shot, was prohibited from possessing any weapons because of his conviction on aggravated assault for the 1985 beating of another man.
U.S. District Court Judge Jan E. DuBois scheduled a sentencing hearing for June 27, 2013. Manilla faces a maximum statutory sentence of 10 years in prison, a fine of up to $250,000, three years of supervised release, and a $100 special assessment.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives, and is being prosecuted by Assistant United States Attorney Joseph LaBar.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Birmingham Man Pleads Guilty to Tweeted Threat Against PresidentRead the Press Release
BIRMINGHAM – A Birmingham man pleaded guilty today in federal court to threatening the life of President Barack Obama on the social network Twitter, announced Acting U.S. Attorney John H. England III and U.S. Secret Service Special Agent in Charge Roy Sexton.
JARVIS BRITTON, 25, entered his plea before U.S. District Judge C. Lynwood Smith Jr. The judge in February ruled Britton competent to stand trial. Britton’s sentencing is scheduled June 20.
“Any threat made on the life of the president of the United States is a serious matter that will be prosecuted,” England said.
A federal grand jury indicted Britton in September for knowingly threatening to kill, kidnap or inflict bodily harm on the president by tweeting the message, “Let’s kill the president. F.E.A.R.,” on Sept. 14.
The Secret Service investigated the case, which Assistant U.S. Attorneys Joseph P. Montminy and Daniel J. Fortune are prosecuting.
Baltimore Immigration Judge Participates in Naturalization CeremonyRead the Press Release
BALTIMORE --Immigration Judge Elizabeth A. Kessler from the Executive Office for Immigration Review, Baltimore Immigration Court, delivered the keynote speech and administered the oath of allegiance to approximately 75 candidates during a naturalization ceremony at the George H. Fallon Federal Building in Baltimore, Md., on March 15, 2013. The Baltimore District Office of U.S. Citizenship and Immigration Services, Department of Homeland Security, hosted the ceremony.
Biographical Information
Attorney General Alberto Gonzales appointed Judge Kessler in January 2006. Judge Kessler received a bachelor of arts degree in 1987 from Columbia University, a master of arts degree in 1992 from Yale Graduate School, and a juris doctorate in 1992 from Yale Law School. From 2003 to 2006, she served as a deputy associate attorney general at the Department of Justice (DOJ). She previously served as a deputy general counsel for the U.S. Department of Energy. From 1997 to 1999, Judge Kessler served as general counsel, U.S. Senate Judiciary Committee, Subcommittee on Immigration in Washington, D.C. From 1995 to 1997, she served as counsel, U.S. Senate Judiciary Committee. From 1993 to 1994, Judge Kessler was an attorney, Civil Division, Appellate Staff, at DOJ and a Bristow Fellow, Office of the Solicitor General. From 1992 to 1993, she served as a law clerk with Judge Richard J. Cardamone, U.S. Court of Appeals for the 2nd Circuit. Judge Kessler is a member of the Maryland State and District of Columbia Bars.
- EOIR -
The Executive Office for Immigration Review (EOIR) is an agency within the Department of Justice. Under delegated authority from the Attorney General, immigration judges and the Board of Immigration Appeals interpret and adjudicate immigration cases according to United States immigration laws. EOIR’s immigration judges conduct administrative court proceedings in immigration courts located throughout the nation. They determine whether foreign-born individuals—whom the Department of Homeland Security charges with violating immigration law—should be ordered removed from the United States or should be granted relief from removal and be permitted to remain in this country. The Board of Immigration Appeals primarily reviews appeals of decisions by immigration judges. EOIR’s Office of the Chief Administrative Hearing Officer adjudicates immigration-related employment cases. EOIR is committed to ensuring fairness in all of the cases it adjudicates.
Executive Office for Immigration ReviewAtlanta Man Admits His Role in Operating an Interstate Juvenile Sex Trafficking EnterpriseRead the Press Release
ALEXANDRIA, Va. – Joshua Jacquis Dumas, aka “Hitman,” 21, of Atlanta, Ga., pleaded guilty to running a commercial sex business that prostituted multiple juvenile girls in Herndon, Va., and other locations throughout Virginia, Maryland, North and South Carolina, Georgia, and Florida. The leader of the venture, Edwin Barcus, Jr., pleaded guilty one week ago to founding and leading a child exploitation enterprise.
Neil H. MacBride, United States Attorney for the Eastern District of Virginia; Virginia Attorney General Kenneth Cuccinelli, II; Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office; and Lt. Colonel James A. Morris, Acting Fairfax County Chief of Police, made the announcement after the plea was accepted by United States District Judge Leonie M. Brinkema.
Dumas pleaded guilty to engaging in a child exploitation enterprise and faces a mandatory minimum of 20 years and a maximum of life in prison when he is sentenced on June 7, 2013.
“Joshua Dumas was a leader in a prostitution ring that profited from selling the bodies of young girls,” said U.S. Attorney MacBride. “He’s facing at least 20 years in prison for these vile crimes, and we hope other pimps are getting the message that sex trafficking children is not good for business.”
“Dumas recruited, intimidated, and exploited these young girls, selling these children into a life of sexual slavery, keeping them drugged to make them compliant, and making money off it,” said Attorney General Cuccinelli. “We will do everything in our power to stop sex traffickers like Dumas and Barcus from victimizing the most vulnerable among us, and we will put them away for as long as we can.”
“In today’s plea, Joshua Dumas admitted his role in a commercial sex business that preyed upon young girls and lured them into prostitution through deception and intimidation,” said Assistant Director in Charge Parlave. “Along with our law enforcement partners, the FBI is committed to apprehending these predators and ensuring they receive the justice they deserve.”
Dumas admitted that he played an important role in Barcus’s enterprise, serving as a manager and helping recruit juvenile girls to prostitute for the venture. He and others expressed a romantic interest in a particular girl, and then they tried to make prostituting seem glamorous. Sometimes, if a girl refused to work for their enterprise, members of the enterprise would steal her money. Members of the conspiracy carried a semi-automatic pistol for purposes of intimidation and protection.
Dumas admitted that he came to Virginia at the behest of Barcus because of the substantial profits in Virginia. Dumas had been prostituting two girls in Georgia, but he transported these girls via Greyhound bus so that they could prostitute in Herndon, Va. The girls were given narcotics to keep them compliant. Dumas admitted that the enterprise also used a juvenile boy to run errands and do counter-surveillance against the police.
Daily, the enterprise posted multiple advertisements on Backpage.com, and sometimes within minutes customers would call. Law enforcement recovered multiple “throwaway” cell phones that customers would call to arrange a “date” with the girls. Customers were then told which hotel to visit but not the room number, which allowed the members of the conspiracy the opportunity to observe the customer and ensure he was not an undercover detective. Once they believed the customer was not a policeman, they would call or text the customer with the room number.
Customers were charged at least $80 for 15 minutes of sex, $100 for 30 minutes, and $200 for 60 minutes. The girls were also instructed to charge more for “extras” and were encouraged to always try to get more money from the customers. The girls generally made at least $500 per day and sometimes made $3,000 per day. The girls were required to give all of their money to Barcus, Dumas, or other members of the enterprise. Some of the money was used to purchase narcotics, such as marijuana, “Molly,” which were given to the girls to induce them to continue prostituting.
This case was investigated by the FBI’s Washington Field Office and the Fairfax County Police Department, with assistance from the Northern Virginia Human Trafficking Task Force. Assistant United States Attorney Michael J. Frank and Virginia Assistant Attorney General and Special Assistant United States Attorney Marc J. Birnbaum are prosecuting the case on behalf of the United States.
Founded in 2004, the Northern Virginia Human Trafficking Task Force is a collaboration of federal, state, and local law enforcement agencies – along with nongovernmental organizations – dedicated to combating human trafficking and related crimes.
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.
Friday 15 March 2013
Week in Review – South BendRead the Press Release
FOR IMMEDIATE RELEASECONTACT: Mary L. Hatton
www.usdoj.gov/usao/inn/ Fax: (219) 852-2770
South Bend, Indiana -- The United States Attorney’s Office announced the following activity in Federal Court:
PLEAS:
Marquis Broadway, 19, of South Bend, Indiana, pled guilty before District Judge Jon DeGuilio to the felony offenses of carjacking and brandishing a firearm during a crime of violence.Sentencing has been set for 6/27/13.These charges were filed as a result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Federal Bureau of Investigation and the South Bend Police Department.This case is being prosecuted by Assistant United States Attorney Donald Schmid.
If convicted in court, any specific sentence to be imposed will be determined by the judge after a consideration of federal sentencing statutes and the Federal Sentencing Guidelines.
Week in Review – HammondRead the Press Release
FOR IMMEDIATE RELEASECONTACT: Mary Hatton
www.usdoj.gov/usao/inn/ FAX (219) 852-2770
Hammond, Indiana - The United States Attorney’s Office announced the following activity in Federal Court:
PLEAS:
Willie Flowers, 31, of Gary, Indiana, pled guilty before Magistrate Judge Paul Cherry to the felony offense of possession of a firearm by a convicted felon.Magistrate Cherry is recommending that the district court accept the tendered guilty plea.Parties have 10 days in which to object to the magistrate judge’s recommendation. These charges were filed as a result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the East Chicago Police Department. This case is being prosecuted by Assistant United States Attorney Joshua Kolar.
Kenneth Myers, 21, of Monticello, Indiana, pled guilty before Senior District Judge Rudy Lozano to the felony offense of possession of a firearm by a convicted felon.Sentencing has been set for 6/6/13.These charges were filed as a result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives.This case is being prosecuted by Assistant United States Attorney Dean Lanter.
If convicted in court, any specific sentence to be imposed will be determined by the judge after a consideration of federal sentencing statutes and the Federal Sentencing Guidelines.
Week in Review – Fort WayneRead the Press Release
FOR IMMEDIATE RELEASECONTACT: Mary Hatton
www.usdoj.gov/usao/inn/ FAX (219) 852-2770
Fort Wayne, Indiana- The United States Attorney’s Office announced the following activity in Federal Court:
DISPOSITIONS:
Michael Scott, 28, of Fort Wayne, Indiana, was sentenced by District Judge Theresa Springmann to 60 months imprisonment and 2 years of supervised release after pleading guilty to the felony offense of use of a firearm during a drug trafficking crime.This case was the result of an investigation by the Drug Enforcement Administration, the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Fort Wayne Police Department Gang Unit.This case was prosecuted by Assistant United States Attorney Lovita Morris King.
Jeremiah Thompson, 29, of Fort Wayne, Indiana, was sentenced by District Judge Theresa Springmann to 30 months imprisonment and 2 years of supervised release after pleading guilty to the felony offenses of maintaining a place for the purpose of distributing heroin and possession of a firearm by a convicted felon.This case was the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Fort Wayne Police Department.This case was prosecuted by Assistant United States Attorney Anthony Geller.
Charles Martin, 30, of Fort Wayne, Indiana, was sentenced by District Judge Theresa Springmann to 36 months imprisonment and 2 years of supervised release after pleading guilty to the felony offense of possession of a firearm by a convicted felon.According to documents filed by the government in this case, Martin has a prior conviction for carrying a handgun without a license, receiving stolen auto parts and identity deception.This case was the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Fort Wayne Police Department.This case was prosecuted by Assistant United States Attorney Tina Nommay.
Rachel McMillan, 40, of Hamilton, Indiana, a defendant in the case US v Rivera et al., was sentenced by District Judge Theresa Springmann to 51 months imprisonment and 2 years of supervised release after pleading guilty to the felony offense of conspiracy to possess with the intent to distribute methamphetamine and heroin.According to
documents filed by the government in this case, Rivera was stopped for a traffic violation. The officer making the stop retrieved his drug dog which alerted to the presence of narcotic odor.The truck was subsequently impounded.A state search warrant was obtained to search the truck.Officers located drugs hidden in the truck’s front axle.McMillan then contacted law enforcement to retrieve the impounded truck by presenting what appeared to be a fraudulent power of attorney signed by Rivera.Officers found that McMillan had an expired driver’s license and, after observing her driving the truck, arrested her for the driving offense.McMillan admitted during an interview after her arrest to involvement with Rivera’s transporting a drug shipment to northern Indiana.This case was the result of an investigation by the Drug Enforcement Administration, the Indiana State Police, the Fort Wayne Police Department, the IMAGE Drug Task Force and the Steuben County Sheriff’s Department.This case was prosecuted by Assistant United States Attorney Anthony Geller.
United States to Accept Concurrent Jurisdiction over White Earth Reservation in MinnesotaRead the Press Release
The Department of Justice has granted a request by the White Earth Nation for the United States to assume concurrent criminal jurisdiction on the 1,300 square mile White Earth reservation in northern Minnesota, Deputy Attorney General James M. Cole announced today.
The decision was the first action of its kind under the landmark Tribal Law and Order Act of 2010 (TLOA), which granted the Justice Department discretion to accept concurrent federal jurisdiction to prosecute major crimes within areas of Indian country that are also subject to state criminal jurisdiction under Public Law 280. Public Law 280 is the 1953 law that mandated the transfer of federal law enforcement jurisdiction for certain tribes to six states, including Minnesota. The decision, relayed yesterday in a letter to the tribe signed by Deputy Attorney General Cole, will take effect on June 1, 2013. Tribal, state, and county prosecutors and law enforcement agencies will also continue to have criminal jurisdiction on the reservation.
“Our goal in granting this request is to strengthen public safety and security for the people of White Earth,” said Deputy Attorney General Cole. “We look forward to partnering with the tribe and our state and local counterparts to support White Earth in ensuring justice on the reservation.”
“The public safety challenges facing our tribal communities are serious and complex,” said U.S. Attorney for the District of Minnesota B. Todd Jones. “The United States Attorney’s Office will continue working closely and collaboratively with our tribal and local partners towards our common goal – improving public safety. It is our hope that with the additional jurisdiction, our Office will be able to support our tribal and county partners for the benefit of all communities.”
The Department of Justice already has jurisdiction to prosecute crimes such as drug trafficking and financial crimes wherever they occur in the United States – including on the White Earth reservation. The change announced today will expand this existing jurisdiction on the reservation to allow federal prosecution of major crimes such as murder, rape, felony assault and felony child abuse.
The decision followed careful consideration of the request and information provided by the White Earth Nation, as well as by the Justice Department’s Office of Tribal Justice, the Executive Office for United States Attorneys, the U.S. Attorney's Office for the District of Minnesota, the FBI, the U.S. District Court, state and local law enforcement partners and other sources.
Two Medicare Beneficiaries Found Guilty of Soliciting Kickbacks in Home Health Care CaseRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Michael B. Steinbach, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, Antonio J. Gomez, Postal Inspector In Charge of the U.S. Postal Inspection Service, and Christopher B. Dennis, Special Agent in Charge, U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG), inform that a federal jury found Defendants Rene Suarez-Basanta, 67 years of age, and Marta Gonzalez, also 67 years of age, guilty of charges related to Medicare fraud.
The conviction of the defendants stemmed from the investigation of Safe Home Health Care, Inc., a home health agency in Miami that was offering and paying kickbacks to obtain beneficiaries to serve as patients for home health services, mostly physical therapy. Conspirators at the agency used the beneficiary information to bill Medicare. Defendants Suarez-Basanta and Gonzalez were convicted of conspiring to pay and receive kickbacks. Defendant Gonzalez was also convicted of two additional counts for soliciting and accepting kickbacks in exchange for serving as a patient of Safe Home Health Care, Inc. and having her parents serve as patients of Safe Home. In addition to be patients recruiters, Suarez-Basanta and Gonzalez are Medicare beneficiaries.
In total, nine defendants have been convicted of paying and receiving health care kickbacks in this investigation. Defendants Suarez-Basanta and Gonzalez are scheduled to be sentenced on May 25, 2013, at 10:00 a.m., before United States District Judge Ursula Ungaro, in Miami.
Mr. Ferrer commended the investigative efforts of the Federal Bureau of Investigation, U.S. Postal Inspection Service and the Office of the Inspector General for the Department of Health and Human Services. The case was prosecuted by Assistant U.S. Attorney Eric Morales.
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.
Two Martinsburg Residents Sentenced on Drug ChargesRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Chris Zumpetta-Parr, Public Affairs SpecialistMARTINSBURG, WEST VIRGINIA - Two Martinsburg residents were sentenced on
March 14, 2013, in United States District Court in Martinsburg by Judge Gina M. Groh.United States Attorney William J. Ihlenfeld, II, announced that:
REBECCA FOWLER FAIRCLOTH, age 52, of Martinsburg, was sentenced to 57 months imprisonment to be followed by six years of supervised release. FAIRCLOTH entered a plea of guilty on October 11, 2012, to Distribution of Crack Cocaine on April 29, 2011. FAIRCLOTH was remanded to the custody of the United States Marshal pending designation to a Federal institution.
MELISSA JO NIECE, age 46, of Martinsburg, was sentenced to 18 months imprisonment to be followed by six years of supervised release. NIECE entered a plea of guilty on October 11, 2012, to Distribution of Crack Cocaine within 1,000 Feet of Winchester Avenue School on October 4, 2010. NIECE, who is free on bond, will self-report to the designated Federal institution on April 15, 2013.
This case was prosecuted by Assistant United States Attorney Stephen D. Warner and former Assistant United States Attorney Thomas O. Mucklow and investigated by the Eastern Panhandle Drug & Violent Crime Task Force, consisting of officers from the West Virginia State Police - Bureau of Criminal Investigation, the Martinsburg Police Department, and the Berkeley County Sheriff’s Department.
Two California Men Charged in Boston with Computer Hacking in Connection with Gift Card Fraud SchemeRead the Press Release
Two California men have been charged in an indictment unsealed today in Boston with remotely hacking into merchants’ computerized cash registers in order to obtain fraudulent gift cards, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Carmen M. Ortiz for the District of Massachusetts and Resident Agent in Charge Holly Fraumeni of the U.S. Secret Service (USSS) Manchester, N.H. Office
Shahin Abdollahi, aka “Sean Holdt,” 46, of Lake Elsinore, Calif., and Jeffrey Thomas Wilkinson, 35, of Rialto, Calif., were both charged with one count of conspiracy to commit computer intrusion and wire fraud, and one count of wire fraud.
According to the indictment, Abdollahi owned Subway franchises in Southern California from 2005 to 2008, and later operated a California company called “POS Doctor,” which sold and installed point-of-sale (POS) computer systems to Subway restaurant franchises around the country. POS systems are a type of computerized checkout register that allows merchants to manage customer purchases made by credit, debit and gift cards.The indictment alleges that beginning in approximately 2011, Abdollahi and Wilkinson conspired to remotely hack into POS systems in Subway restaurant franchises around the country. According to the indictment, members of the conspiracy hacked into at least 13 Subway POS systems that Abdollahi sold through POS Doctor and fraudulently added at least $40,000 in value to Subway gift cards. Abdollahi and Wilkinson allegedly used the fraudulent gift cards to make purchases at Subway, and Wilkinson also allegedly sold fraudulent gift cards to others using eBay and Craigslist.
The case was investigated by the USSS and is being prosecuted by Trial Attorney Mona Sedky of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Adam J. Bookbinder of the District of Massachusetts.
The charges contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Two California Men Charged with Gift Card Fraud SchemeRead the Press Release
BOSTON – In an indictment unsealed late yesterday, two California men have been charged with remotely hacking into the computerized cash registers of a number of Subway restaurants in order to fraudulently obtain gift cards.
On March 6, Shahin Abdollahi (aka Sean Holdt), 46, of Lake Elsinore, Calif., and Jeffrey Thomas Wilkinson, 35, of Rialto, Calif., were both charged with one count of conspiracy to commit computer intrusion and wire fraud, and one count of wire fraud.
According to the indictment, Abdollahi owned Subway franchises in Southern California from 2005 to 2008, and later operated a California company called “POS Doctor,” which sold and installed point-of-sale (POS) computer systems to Subway restaurant franchises around the country. POS systems are a type of computerized checkout register that allows merchants to manage customer purchases made by credit, debit and gift cards.The indictment alleges that beginning in approximately 2011, Abdollahi and Wilkinson conspired to remotely hack into POS systems in Subway restaurant franchises around the country. According to the indictment, members of the conspiracy hacked into at least 13 Subway POS systems that Abdollahi sold through POS Doctor and fraudulently added at least $40,000 in value to Subway gift cards. Abdollahi and Wilkinson allegedly used the fraudulent gift cards to make purchases at Subway, and Wilkinson also allegedly sold fraudulent gift cards to others using eBay and Craigslist.
The statutory maximum penalty is 20 years in prison to be followed by up to three years of supervised release. Abdollahi is scheduled to have his initial appearance on March 27 at 3:00 p.m.
United States Attorney Carmen M. Ortiz; Acting Assistant Attorney General Mythili Raman; and Resident Agent in Charge Holly Fraumeni, of the United States Secret Service in Manchester, N.H., made the announcement today. The case is being prosecuted by Assistant United States Attorney Adam J. Bookbinder and Mona Sedky, a trial attorney with the Department of Justice’s Computer Crime & Intellectual Property Section.
The charges contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Two Brothers charged with defrauding the department of veterans affairsRead the Press Release
ROCHESTER, N.Y.--U.S. Attorney William J. Hochul, Jr. announced today that Raymond Testa, 60, of Rochester, N.Y., and Gerald Testa, 55, of Ontario, N.Y., were arrested and charged by criminal complaint with major fraud against the United States. The charge carries a maximum penalty of 10 years in prison, a $1,000,000 fine or both.
Assistant U.S. Attorney Craig R. Gestring, who is handling the case, stated that according to the complaint, the defendants own and operate Testa Construction Inc. Starting in approximately 2008, the brothers started a second business and represented it to be a Service-Disabled Veteran Owned Small Business, when in fact it was not. In order to qualify as a Service-Disabled Veteran Owned Small Business, one must be a veteran with a service connected disability. The complaint further alleges that the defendants applied for and received government contracts from the Department of Veteran Affairs, which were set aside for the Service-Disabled Veteran Owned Small Business program, totaling approximately $13,000,000, funding that they would not otherwise be entitled to.
"These defendants stand accused of pretending to be disabled service veterans," said U.S. Attorney Hochul. "In doing so, the defendants deprived other small business owners of financial opportunities which the Service-Disabled Veteran Owned Small Business program is specifically designed to assist."
The complaint is the culmination of an investigation by Special Agents from the United States Department of Veterans Affairs - Office of Inspector General, under the direction of Special Agent In Charge Jeffrey G. Hughes, and Special Agents from the Federal Bureau of Investigation, under the direction of Special Agent in Charge Christopher M. Piehota.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
Tonawanda man sentenced on child pornography chargesRead the Press Release
BUFFALO, N.Y.--U.S. Attorney William J. Hochul, Jr. announced today that Andrew Ortman, 40, of Tonawanda, N.Y., who was convicted of distribution of child pornography, was sentenced to 10 years in prison and 20 years supervised release by U.S. District Court Judge Richard J. Arcara.
Assistant U.S. Attorney Russell T. Ippolito, Jr., who handled the case, stated that on October 22, 2011, law enforcement officers using an undercover computer downloaded eight video files from Ortman's computer that contained child pornography. Officers then obtained a search warrant for the defendant's home and seized his computer. A forensic examination determined that Ortman possessed, received and distributed in excess of 600 images and videos of child pornography.
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.
State Parolee Sentenced for Possession of Sawed-off Shotgun on Sault Tribe ReservationRead the Press Release
MARQUETTE, MICHIGAN – Shawn Marshall Brewer, 23, of St. Ignace, Michigan, was sentenced to 48 months in federal prison for being a felon in possession of a firearm, U.S. Attorney Patrick A. Miles, Jr. announced today. In addition to the prison term, U.S. District Judge Robert Holmes Bell ordered Brewer to serve three years of supervised release following his release from prison, and to pay a $100 special assessment. Brewer had pleaded guilty to the charge last November 8.Brewer, a convicted felon on parole after a 2009 conviction for unlawfully driving away a motor vehicle, was visited by his parole officer and law enforcement in August 2011. During this visit, Brewer was found in possession of a sawed-off 16 gauge shotgun, along with 38 knives, swords, a hatchet, a throwing star, and 16-gauge shotgun ammunition. The shotgun barrel had been cut down to just over 15 inches in length, and the shoulder stock had been replaced with a homemade pistol grip.
The Sault Sainte Marie Tribal Police, the Michigan State Police, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Federal Bureau of Investigation investigated the case. Assistant U.S. Attorney Paul D. Lochner prosecuted the case.
END
Southern Illinois Residents Face Prison Terms for Methamphetamine ConspiracyRead the Press Release
Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced that three Southern Illinois residents were recently sentenced as a result of their participation in conspiracies to manufacture methamphetamine.
On March 7, 2013, Bret A. Crunk, 42, of Anna, IL, was sentenced in United States District Court in Benton on a one-count indictment charging conspiracy to manufacture methamphetamine. Crunk was sentenced to 120 months in prison, 8 years of supervised release, and fined $600. The offense occurred between 2010, and March 12, 2012, in Union, Jackson, and Saline Counties. Evidence at the plea and sentencing hearings established that Crunk was involved with others in the manufacture of methamphetamine. During the conspiracy, Crunk obtained over 195 grams of pseudoephedrine for the purpose of manufacturing methamphetamine. One co-defendant has previously been sentenced for his involvement in the methamphetamine conspiracy and one co-defendant has pled guilty and is awaiting sentencing. This ongoing investigation is being conducted by the Union County Sheriff’s Office, Jackson County Sheriff’s Office, Murphysboro Police Department, and Drug Enforcement Administration. The Union County State’s Attorney’s Office also assisted during the investigation.
On March 7, 2013, Emma J. York, a/k/a Emma J. Melton, 36, of Annapolis, IL, was also sentenced in United States District Court in Benton on a one-count indictment charging conspiracy to manufacture methamphetamine. York was sentenced to 188 months in prison, 8 years of supervised release, and fined $600. This offense occurred between July, 2011, and August 12, 2012, in Crawford, Jasper, Randolph, and Jackson Counties. Evidence at the plea and sentencing hearings established that York was involved with others in the manufacture of methamphetamine. During the conspiracy, York participated in numerous methamphetamine “cooks” and also obtained over 98 grams of pseudoephedrine for the purpose of manufacturing methamphetamine. York received an enhanced sentence based on her classification as a Career Offender. This investigation was conducted by the Jackson County Sheriff’s Office, Crawford County Sheriff’s Office, Randolph County Sheriff’s Office, Murphysboro Police Department, Robinson Police Department and Drug Enforcement Administration. The Montgomery County Sheriff’s Office also assisted in the investigation.
Additionally, on March 7, 2013, Jason S. Thorne, 32, of Marion, IL, was sentenced in United States District Court in Benton on a one-count indictment charging conspiracy to manufacture methamphetamine. Thorne was sentenced to 156 months in prison, 3 years of supervised release, and fined $300. The district judge ordered the federal sentence to run consecutive to a state sentence that Thorne is currently serving. The offense occurred between 2009 and 2011 in Williamson County. Evidence at the plea and sentencing hearings established that Thorne was involved with others in the manufacture of methamphetamine. During the conspiracy, Thorne participated in methamphetamine “cooks” and also obtained over 45 grams of pseudoephedrine for the purpose of manufacturing methamphetamine. Thorne received an enhanced sentence based on his classification as a Career Offender. This investigation was conducted by the Jackson County Sheriff’s Office, Williamson County Sheriff’s Office, Marion Police Department, Murphysboro Police Department, and Drug Enforcement Administration.
All three cases are being prosecuted by Assistant United States Attorney Amanda A. Robertson.
Rochester man pleads guilty in copyright infringement caseRead the Press Release
ROCHESTER, N.Y.-- U.S. Attorney William J. Hochul, Jr. announced today that Eugene DeBerger, 60, of Rochester, N.Y., pleaded guilty to infringement of copyright for purposes of private financial gain before U.S. District Judge Frank P. Geraci, Jr. The charge carries a maximum penalty of five years in prison and a fine of $250,000.
Assistant U.S. Attorney Tiffany H. Lee, who is handling the case, stated that between January 2007 and August 2010, DeBerger bought legal copies of copyright protected DVD movies and burned copies on his home computer. The defendant then sold them online for $3.99 a piece. During the time period, DeBerger sold over 7000 DVDs.
The plea is the culmination of an investigation on the part of the Special Agents from Federal Bureau of Investigation, under the direction of Christopher M. Piehota, Special Agent in Charge.
Sentencing is scheduled for May 29, 2013, at 3pm before Judge Geraci.Renz Held Without Bond in Federal CaseRead the Press Release
Syracuse, New York —United States Magistrate Judge Andrew T. Baxter ordered that David Renz be held without bond pending the resolution of charges that he received and possessed child pornography, announced United States Attorney Richard S. Hartunian. When Renz was arrested on these charges on January 9, 2013, he had no criminal history, and he was released on a number of conditions including electronic monitoring.
On March 14, 2013, just after 7:00 p.m., Renz tampered with the electronic monitoring system he was required to wear as part of his conditions of release. His tampering prevented any alerts to the United States Probation Office until approximately 11:30 p.m., when the Probation Office received an alert indirectly that there had been no motion by the device for a period of time.
At approximately 12:32 a.m., the United States Probation Office was notified that Renz had been arrested in connection with a kidnapping, murder, and rape in Clay, New York.
“My office is working with the Onondaga County District Attorney to make sure that the person who committed these horrific crimes is prosecuted to the fullest extent of the law,” said Hartunian.
Randolph Woman Sentenced for Mortgage FraudRead the Press Release
BOSTON – A Randolph woman was sentenced late yesterday for using a stolen identity to sign fraudulent mortgage loan documents.
Allison Gates, 50, was sentenced by U.S. District Judge George A. O’Toole to six months in prison, followed by two years of supervised release and ordered to pay $1.2 million in restitution to the mortgage lenders. In July 2012, Gates pleaded guilty to seven counts of wire fraud and four counts of identity fraud. She has been ordered to self-surrender to the Bureau of Prisons before April 15.Gates was solicited by co-defendant Peterson Cherimond to pose as the buyer for the purchase of four residential properties in Halifax, Brockton, and Worcester. For each of the four properties, Gates was paid approximately $3,000 to use a stolen identification to execute mortgage loan closing papers. Gates was paid a total of approximately $12,000.
In July 2012, Cherimond pleaded guilty to nine counts of wire fraud and three counts of money laundering, and pleaded guilty to four additional counts of wire fraud, seven counts of identity fraud and two counts of aggravated identity theft in October 2012. Sentencing is scheduled for April 11, 2013.
In February 2013, co-defendant Judy Bonas was also sentenced to six months in prison, followed by two years of supervised release, and ordered to pay $936,000 in restitution. In April 2012, Bonas pleaded guilty to six counts of wire fraud and three counts of identity fraud for playing a similar role in the fraud scheme. Bonas has been ordered to self-surrender to the Bureau of Prisons before April 22, 2013.
United States Attorney Carmen M. Ortiz, Kevin Niland, Inspector in Charge of the U.S. Postal Inspection Service, and William Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today. The case was prosecuted by Assistant U.S. Attorneys Victor A. Wild of Ortiz’s Economic Crimes Unit and Brian Pérez-Daple of Ortiz’s Civil Division.Owner of Leading San Diego Catering Service Sentenced for Role in Tax Evasion SchemeRead the Press Release
United States Attorney Laura E. Duffy announced that today Robert Peltier, one of the two principal owners and operators of Ranch Catering (dba "Ranch Events"), was ordered to pay $222,822 in restitution for committing tax evasion stemming from the operation of his business. United States District Judge Janis L. Sammartino also sentenced the defendant to serve six months home incarceration and six months home detention.
According to its website, Ranch Catering is one of San Diego’s "leading catering specialists, managing many exciting and unique venues and some of the largest Special Events in America." As detailed in charging documents, Peltier - while operating the catering business in 2003 - deposited proceeds from the business into accounts located at two different banks. When it came time to prepare his tax returns, Peltier provided his tax preparer with the deposits from only one of the two banks. As a result, he failed to declare $419,000 in catering income to the IRS. By concealing this income, Peltier caused Ranch Catering to evade paying $112,824 in taxes due and owing.
As revealed during his sentencing hearing, Robert Peltier was ordered to pay $221,792 in back taxes, penalties and interest on the taxes evaded. In addition, his son Jason Peltier (who is a co-owner of the business) entered into a separate civil settlement with the IRS requiring him to pay an additional $505,435 in back taxes, penalties and interest.
United States Attorney Duffy commented: “Given the difficult economic situation facing this country, it is imperative that we do not allow individuals to evade their duty to shoulder a fair share of the tax burden. Otherwise, honest citizens end up paying more than their rightful share."
“As hard-working citizens are sitting down to prepare their tax returns, it is imperative that IRS Criminal Investigation (CI) remain vigilant in our pursuit of those taxpayers who fail to report all of their income,” commented N. Dawn Mertz, Acting Special Agent in Charge for IRS CI Los Angeles Field Office. “Today’s sentencing of Robert Peltier should serve as a deterrent to those contemplating filing a false tax return.”
DEFENDANT Criminal Case No. 12cr3126-JLS Robert Peltier Jamul, California SUMMARY OF CHARGESCount 1: Title 26, United States Code, Section 7201 - Tax Evasion
INVESTIGATING AGENCYInternal Revenue Service - Criminal Investigation
Note / Opinion / EditorialRead the Press Release
NOTE:
The attached opinion / editorial, personally prepared and written by Central District of Illinois U.S. Attorney Jim Lewis and Federal Public Defender Jonathan E. Hawley, commemorates the 50th anniversary on March 18, 2013, of the U.S. Supreme Court’s decision in Gideon v. Wainright, that secured the right to counsel for indigent criminal defendants.
Please consider using the remarks as a ‘Letter to the Editor,’ as a separate ‘Op-Ed’ item, or for follow up in any manner your entity determines is appropriate.
For further discussion of this issue, U.S. Attorney Lewis is available by contacting 217-492-4450; Federal Public Defender Jonathan E. Hawley may be reached at 309-671-7891.
Thank you,
Sharon J. Paul
Public Information Officer
U.S. Attorney’s Office
Central District of Illinois
217-492-4450OPINION / EDITORIAL
In March 1963, fifty years ago, the United States Supreme Court decided Gideon v. Wainwright, holding that every defendant who faces a serious criminal charge has the right to an attorney, and that this attorney will be at government expense if the defendant cannot afford one. This was a landmark decision for all of us who believe in fair trials, and we, as the United States Attorney and the Federal Public Defender for the Central District of Illinois, wish to acknowledge and celebrate this historic and memorable decision.
Before Gideon, people went to trial all too often without an attorney to stand with them. It wasn't fair. It wasn't just. It did not live up to our purposes and ideals.
Our Constitution's Preamble speaks truly, saying that we should establish justice. In the Gideon decision, the Supreme Court spoke truly, saying that "lawyers in criminal courts are necessities, not luxuries." In an earlier case, the Supreme Court spoke truly, saying that the prosecutor's goal “in a criminal prosecution is not that it shall win a case, but that justice shall be done." We believe that our justice system has to do its best to get it right the first time, because there is so much at stake for the individual and the community.
How are we doing, fifty years after Gideon? Our system is certainly much better, but we should not declare that the work is done. All too often, attorneys for indigent defendants do not have the funds and resources to handle the large caseloads. We need to fulfill our promise, and we can do so. We can establish model standards and expectations for public defense, we can look at our systems and see if there is fully effective representation, and we can strengthen our justice system whenever it does not fully serve its purpose: fair trials and just results.
Let us all celebrate this Supreme Court decision. And let us ensure that we meet its challenge, its promise and its purpose: equal justice under law.
James A. Lewis
U.S. Attorney, Central District of IllinoisJonathan E. Hawley
Federal Public Defender, Central District of IllinoisMonmouth County, N.J., Man Sentenced to 71 Months in Prison for Defrauding 16 People of $1.2 MillionRead the Press Release
TRENTON, N.J. — A Monmouth County, N.J., man was sentenced today to 71 months in prison for defrauding 16 victims, including friends and family, of $1.2 million in an investment fraud scheme, U.S. Attorney Paul J. Fishman announced.
Brian McCahery, 45, of Bradley Beach, N.J., previously pleaded guilty before U.S. District Judge Anne E. Thompson in Trenton federal court to an Information charging him with engaging in a monetary transaction in excess of $10,000, using proceeds from wire fraud. Judge Thompson imposed the sentence today in Trenton federal court.
According to documents filed in this case and statements made in court:McCahery was an employee of a “day trading” company in Matawan, N. J., which provided computer terminals, capital and other business services to “day traders,” who traded shares of public companies for profit.
From Jan. 9, 2009 through March 14, 2011, McCahery carried out a scheme to defraud investors of $1.2 million in cash, checks or wires, money which he obtained through false representations and promises. McCahery used the name of the day-trading company to promise a high rate of return on initial investments. He promised the investments would be used to purchase short-term equity funds and, in some instances, Initial Public Offerings. The investors provided him funds directly by wire, check, or cash, which were deposited in bank accounts in the name of McCahery or his spouse. McCahery used most of these funds for personal expenditures or to pay “lulling” payments to the victims to extend the life of the scheme.
McCahery communicated via phone, e-mail, and in person with the investors and falsely informed them where their money was being invested, and the value of their investment accounts. In fact, such investment accounts for the most part were never created. McCahery modified a software program he obtained at the company to allow investors to log on and check the balance of their purported investment accounts. There, they would see false figures indicating their money had been invested in a particular account and was increasing in value.
In addition to the prison term, Judge Thompson sentenced McCahery to three years of supervised release with restrictions, including a bar on fiduciary positions and management or access to other people’s money, and ordered restitution to the 16 victims of $1.19 million as well as forfeiture of $63,000.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Acting Special Agent in Charge David Velazquez, and IRS – Criminal Investigation, under the direction of Acting Special Agent in Charge Shantelle P. Kitchen, with the investigation that resulted in today’s sentencing.
The government is represented by Assistant U.S. Attorney John E. Clabby of the U.S. Attorney’s Office Criminal Division in Trenton.
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Defense counsel: Antonio Martinez Esq., Trenton, NJ
Medical Director for Miami-Based Health Care Clinic Sentenced to 144 Months in Prison for Role in $50 Million Medicare Fraud SchemeRead the Press Release
A former medical director for Biscayne Milieu, a Miami-based mental-health clinic, was sentenced today to serve 144 months in prison for his role in a fraud scheme involving the submission of more than $50 million in fraudulent billings to Medicare, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; Michael B. Steinbach, Special Agent in Charge of the FBI’s Miami Field Office; and Special Agent in Charge Christopher B. Dennis of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Office of Investigations Miami Office.
Dr. Gary Kushner, 72, of Plantation, Fla., was sentenced by U.S. District Judge Robert N. Scola Jr. in the Southern District of Florida. In addition to the prison term, Kushner was ordered to serve three years of supervised release.
Kushner was convicted on Aug. 28, 2012, of one count of conspiracy to commit health care fraud and one substantive count of health care fraud, following a two-month jury trial.According to the evidence at trial, Kushner and his co-conspirators caused the submission of over $50 million dollars in false and fraudulent claims to Medicare through Biscayne Milieu, which purportedly operated a partial hospitalization program (PHP) – a form of intensive treatment for severe mental illness. Instead of providing legitimate PHP services, the defendants devised a scheme in which they paid patient recruiters to refer ineligible Medicare beneficiaries to Biscayne Milieu for services that were never provided or were not properly reimbursable by Medicare. Many of the patients admitted to Biscayne Milieu were not eligible for PHP because they were chronic substance abusers, suffered from severe dementia and would not benefit from group therapy, or had no mental health diagnosis but were seeking exemptions for their U.S. citizenship applications.
The evidence at trial further showed that, as Biscayne Milieu’s medical director, Kushner authorized the treatment of patients that he knew were ineligible for PHP treatment. Biscayne Milieu then billed Medicare for millions of dollars in PHP treatments for these patients under Kushner’s name. Evidence further revealed that Kushner would often conduct cursory examinations lasting only minutes before authorizing such fraudulent billings.
Various owners, doctors, managers, therapists, patient brokers and other employees of Biscayne Milieu have also been charged with various health care fraud, kickback, money laundering and other offenses in two indictments unsealed in September 2011 and May 2012. Biscayne Milieu, its owners and more than 25 of the individual defendants charged in these cases have pleaded guilty or have been convicted at trial. Antonio and Jorge Macli and Sandra Huarte – the owners and operators of Biscayne Milieu – were each convicted at trial of various offenses and are scheduled for sentencing in April 2013.
This case is being prosecuted by Assistant U.S. Attorneys Michael Davis, Marlene Rodriguez and James V. Hayes of the U.S. Attorney’s Office for the Southern District of Florida; James V. Hayes was formerly a Trial Attorney in the Criminal Division’s Fraud Section. The case was investigated by the FBI with the assistance of HHS-OIG, and was brought by the U.S. Attorney’s Office for the Southern District of Florida in coordination with the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,480 defendants who have collectively billed the Medicare program for more than $4.8 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to www.stopmedicarefraud.gov.
Medical Director for Miami-Based Health Care Clinic Sentenced to 144 Months in Prison for Role in $50 Million Medicare Fraud SchemeRead the Press Release
Wifredo A. Ferrer, United States Attorney of the Southern District of Florida, Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; Michael B. Steinbach, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, and Christopher B. Dennis, Special Agent in Charge, U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Office of Investigations Miami Office announced that a former medical director for Biscayne Milieu, a Miami-based mental-health clinic, was sentenced today to serve 144 months in prison for his role in a fraud scheme involving the submission of more than $50 million in fraudulent billings to Medicare.
Dr. Gary Kushner, 72, of Plantation, Fla., was sentenced by U.S. District Judge Robert N. Scola Jr. in the Southern District of Florida. In addition to the prison term, Kushner was ordered to serve three years of supervised release.
Kushner was convicted on Aug. 24, 2012, of one count of conspiracy to commit health care fraud and one substantive count of health care fraud, following a two-month jury trial.
According to the evidence at trial, Kushner and his co-conspirators caused the submission of over $50 million dollars in false and fraudulent claims to Medicare through Biscayne Milieu, which purportedly operated a partial hospitalization program (PHP) – a form of intensive treatment for severe mental illness. Instead of providing legitimate PHP services, the defendants devised a scheme in which they paid patient recruiters to refer ineligible Medicare beneficiaries to Biscayne Milieu for services that were never provided or were not properly reimbursable by Medicare. Many of the patients admitted to Biscayne Milieu were not eligible for PHP because they were chronic substance abusers, suffered from severe dementia and would not benefit from group therapy, or had no mental health diagnosis but were seeking exemptions for their U.S. citizenship applications.
The evidence at trial further showed that, as Biscayne Milieu’s medical director, Kushner authorized the treatment of patients that he knew were ineligible for PHP treatment. Biscayne Milieu then billed Medicare for millions of dollars in PHP treatments for these patients under Kushner’s name. Evidence further revealed that Kushner would often conduct cursory examinations lasting only minutes before authorizing such fraudulent billings.
Various owners, doctors, managers, therapists, patient brokers and other employees of Biscayne Milieu have also been charged with various health care fraud, kickback, money laundering and other offenses in two indictments unsealed in September 2011 and May 2012. Biscayne Milieu, its owners and more than 25 of the individual defendants charged in these cases have pleaded guilty or have been convicted at trial. Antonio and Jorge Macli and Sandra Huarte – the owners and operators of Biscayne Milieu – were each convicted at trial of various offenses and are scheduled for sentencing in April 2013.
Mr. Ferrer commended the investigative efforts of the Federal Bureau of Investigation and the Office of the Inspector General for the Department of Health and Human Services in coordination with the Medicare Fraud Strike Force. The case was prosecuted by Assistant U.S. Attorneys Michael Davis, Marlene Rodriguez and James V. Hayes.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,480 defendants who have collectively billed the Medicare program for more than $4.8 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to www.stopmedicarefraud.gov.
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.
Mechanicsburg Man Charged with Tax EvasionRead the Press Release
The United States Attorney's Office for the Middle District of Pennsylvania announced that Thomas C. Holloway, age 46, of Mechanicsburg, Pennsylvania, was charged today with attempted income tax evasion for 2008.
A plea agreement was filed at the same time as the Information. In it, Holloway agreed to plead guilty to the offense and pay $80,000 in restitution to the IRS.
According to United States Attorney Peter J. Smith, Holloway previously was employed by Spherion (an IT firm based in Mechanicsburg and formerly known as Intellimark and Technisource) between 2001 and 2009 and embezzled company funds which were not reported on his income tax returns. Holloway previously was charged by local authorities with theft by deception in connection with the embezzlements and was sentenced in 2010 in state court to probation and ordered to pay $125,000 in restitution to Spherion. The current tax charges allege that the tax loss to the IRS was $80,000 for the years 2003-2009.
The case was investigated by the Criminal Investigation Division of the IRS and is assigned to Senior Litigation Counsel Bruce Brandler for prosecution.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentencing following a finding of guilty is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
In this particular case, the maximum penalty under the federal statute is five years' imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
Mayfield Heights Woman Charged with Embezzling More Than $650,000Read the Press Release
A one-count criminal information was filed today charging Willoughby Hills woman with embezzling more than $650,000 in federal funds, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
Theresa E. Medsker, age 51, is accused of embezzling approximately $654,192 in federal funds while working as the bookkeeper for the Schnurmann House in Mayfield Heights, Ohio. Schnurmann House is a non-profit, inter-denominational housing community consisting of 198 apartments for individuals age 62 and over that receives a substantial portion of its funding from the United States Department of Housing and Urban Development.
“This defendant was in a position of trust, and the charge lays out behavior that is a clear violation of that trust,” Dettelbach said. “This office will continue to hold accountable those that would betray the public’s confidence, in whatever form.”
The information charges that from on or about December 28, 2005 through on or about January 10, 2012, Medsker controlled Schnurmann House's bank accounts, and issued fraudulent checks from these accounts to herself. Because all of the Schnurmann House checks required two signatures, one from the executive director and one from the administrative assistant, Medsker forged the signature of the executive director on the checks and presented them to the administrative assistant, who signed them believing that the executive director had already approved the checks, according to the information.
Then, Medsker cashed and deposited the Schnurmann House checks into her personal bank accounts. In order to conceal her theft of funds from the Schnurmann House, Medsker altered and falsified the Schnurmann House’s monthly bank statements by physically cutting and pasting vendor checks on top of the checks she wrote to herself, and making counterfeit copies of the bank statements, according to the information.
Medsker then submitted the altered bank statements to the executive director and the board as Schnurmann House’s official financial records, according to the information.
Over the course of the fraud, Medsker deposited approximately 300 Schnurmann House checks made payable to her into her personal accounts totaling approximately $654,192, according to the information.
If convicted, Medsker’s sentence will be determined by the court after review of factors unique to this case, including defendant’s prior criminal record, if any, defendant’s role in the offense, and the characteristics of the violation. The sentence will not exceed the statutory maximum and will likely be less than the maximum statutory period of incarceration.This case is being prosecuted by Assistant United States Attorney Mark S. Bennett, following an investigation by the Cleveland Office of the United States Department of Housing and Urban Development, Office of Inspector General, and the City of Mayfield Heights Police Department.
An information is only a charge and is not evidence of guilt. Defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Maryland Man Sentenced to 18 Years in Prison for 2011 Murder at Northwest Washington Restaurant-Defendant Shot Victim Without Provocation-Read the Press Release
WASHINGTON – Alexis Pineda, 26, of Suitland, Md., was sentenced today to 18 years in prison on a charge stemming from the killing last year of a patron at a restaurant in Northwest Washington, announced U.S. Attorney Ronald C. Machen Jr.
Pineda pled guilty in October 2012, in the Superior Court of the District of Columbia, to a charge of second-degree murder while armed. His friend, Jaime Cruz, 31, of Lanham, Md., pled guilty that month to obstructing justice in the case. Cruz was sentenced on Oct. 19, 2012, to three years of incarceration.
The Honorable Robert E. Morin sentenced Pineda. Upon completion of his prison term, Pineda will be subject to five years of supervised release. However, he will be deported to his native country of El Salvador at that time due to his other earlier conviction for an illegal re-entry charge in the U.S. District Court for the District of Columbia.
According to the government’s evidence, Pineda, Cruz and another friend went to the El Sauce Restaurant, in the 1200 block of Eleventh Street NW, at about 2:30 a.m. on March 27, 2011. Pineda encountered the victim, Jose Manuel Hernandez-Romero, 24, inside the restaurant. Then, without provocation, he shot Mr. Hernandez-Romero one time in the chest with a revolver.
Immediately afterward, other patrons tackled Pineda outside the restaurant and wrestled the revolver away from him. Cruz tried to pry Pineda from the other patrons and threatened to shoot them unless they released him. Cruz also assaulted one of the patrons who held Pineda. Pineda repeatedly screamed, “I’ll kill him.” Despite the threats and assault, the patrons bravely continued to hold Pineda until the police arrived and arrested him.
In announcing the sentence, U.S. Attorney Machen commended the work of the detectives and officers of the Criminal Investigations Division and the Third District of the Metropolitan Police Department, as well as U.S. Immigration and Customs Enforcement of the Department of Homeland Security. He also expressed appreciation to those who worked on the case from the U.S. Attorney’s Office, including Victim Witness Advocates Christina Principe and Melissa Milam, Paralegal Specialists Marian Russell and Meridith McGarrity. Finally, U.S. Attorney Machen praised Assistant U.S. Attorneys Shana Fulton, David Saybolt and Alan Boyd, who prosecuted the case.
13-100Man Sentenced for Possession of Stolen Firearm on Hannahville ReservationRead the Press Release
MARQUETTE, MICHIGAN – Marco Antonio Arteaga, 20, of Wilson, Michigan, was sentenced to 24 months in federal prison for possession of a stolen firearm, U.S. Attorney Patrick A. Miles, Jr. announced today. In addition to the prison term, U.S. District Judge Robert Holmes Bell ordered Arteaga to serve three years of supervised release following his release from prison, and to pay a $100 special assessment. Arteaga pled guilty to the charge last October.The investigation into Arteaga’s activities stemmed from an unrelated assault in which a 12 year-old child had a gun pointed at his head. Through the course of the investigation, it was discovered that the gun used in that incident, as well as other guns, had been stolen from a residence on the Hannahville reservation. One of the stolen firearms was found in Arteaga’s house underneath his mattress. Arteaga ultimately admitted to concealing two of the firearms that had been stolen in his residence.
The Hannahville Indian Community Tribal Police, the Federal Bureau of Investigation, the Upper Peninsula Substance Enforcement Team, and the Menominee County Sheriff Department investigated the case. Assistant U.S. Attorney Paul D. Lochner prosecuted the case..
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Madison Illinois Man Pleads Guilty to Conspiracy, Wire Fraud, and Identity Theft in Multi-State Auto Theft SchemeRead the Press Release
Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today that on March 15, 2013, Gordon D. Caldwell, 46, of Madison, Illinois, pled guilty in federal court to Conspiracy to Possess and Pass Counterfeit Securities, Wire Fraud, and Aggravated Identity Theft, as charged in three-count information. Caldwell faces a mandatory minimum sentence of two years for Aggravated Identity Theft and could be sentenced up to 27 years of imprisonment. Caldwell also faces a fine of up to $500,000.00, a period of supervised release of up to three years and the payment of a $300.00 special assessment. Caldwell will also be required to pay approximately $100,000.00 in restitution when he is sentenced on June 21, 2013, at 1:30 p.m. in United States District Court in East St. Louis, Illinois.
“The significance of this prosecution rests not only with the conviction of Caldwell, who had crossed state lines and police jurisdictions to defraud citizens in eight counties in two states, but also with the outstanding team work that included multiple law enforcement and prosecutors’ offices from Illinois and Missouri working together to reach this result,” said United States Attorney Wigginton. “With federal and state agencies working together, the focus will not be on where you do the crime, instead, the focus is going to be where you’re going to do the time.”
During his plea, Caldwell admitted that from April of 2011 to August of 2012 he had schemed and conspired with others to use counterfeit cashier’s checks of financial institutions to defraud individuals in both Illinois and Missouri who had listed their vehicles for sale in various media sources. Caldwell admitted that he would go to the seller’s house or location the vehicle was held for sale, and while using false identification, he would give the counterfeit cashier’s check to the seller. Caldwell also admitted that on two occasions, he used the fraudulently obtained vehicle titles to take out vehicle loans.
The investigation was conducted by the Metro East Auto Theft Task Force with the assistance of the Madison County Sheriff’s Office; the Granite City, Madison, Glen Carbon, Maryville, Effingham, Decatur and South Roxana Police Departments in Illinois; the Jefferson, and Boone County Sheriff’s Offices; the St. Charles County Sheriff’s Department and the St. Peters, St. Louis County and Arnold Police Departments in Missouri. Assistance was also given by the state’s attorneys’ offices in Madison, Macon, Effingham and Morgan Counties in Illinois, as well as prosecutors in Jefferson, St. Charles, St. Louis, and Boone Counties in Missouri. The case is being prosecuted by Assistant United States Attorney Ranley R. Killian.
Local Real Estate Professionals Sentenced for Wire FraudRead the Press Release
Geoffrey Montani and Kenneth Jones Sentenced for Submitting Fraudulent Mortgage Loan ApplicationsPORTLAND, Ore. – Geoffrey Montani, 36, and Kenneth Jones, 50, both of Portland, Oregon, were sentenced to 15 months in prison in separate hearings following their convictions for wire fraud in connection with a mortgage fraud scheme. Montani was sentenced by the Honorable Robert E. Jones on Friday March 15, 2013. Jones was sentenced by the Honorable Anna J. Brown on Thursday, March 7, 2013. In addition to the prison sentence, each was ordered to pay restitution in an amount exceeding $1.4 million dollars
In mid-2005 through April 2007, Montani and Jones bought and resold (“flipped”) houses in the Portland metropolitan area. Rather than sell these houses to real buyers in arms-length negotiations, the defendants, in 37 separate transactions, knowingly sold the houses to straw-buyers provided by another member of the scheme, Marty Folwick. Folwick was convicted in 2008 and sentenced to 63 months in prison.
The scheme, in essence, worked as follows: Montani and Jones purchased residential houses in the Portland area with money provided by Montani’s father, Stephen Montani, and other “hard money” investors. In some cases, remodeling was done on the house after purchase. Rather than listing the house for resale through a realtor or other traditional means, Montani and Jones contacted Folwick, told him they had a property for sale at a set price and solicited him to produce a straw-buyer for the property in exchange for a kickback following closing. These straw-buyers had no intent to live in the property or pay the monthly mortgage, but they allowed (or were duped into allowing) their name and credit score to be used on the mortgage application, on the false promise that they would become successful real estate investors. Once a straw-buyer was identified, a mortgage application was prepared by Montani and Jones or their associates for the straw-buyer to sign. Montani and Jones knew that each application contained false information and would be submitted to a lender for approval based on the false information in the application. In a number of cases, Montani and Jones created false supporting documentation for inclusion with the application. Once the mortgage loan was approved, the property was sold to the straw-buyer; thereafter Montani and Jones paid off the hard money loan and divided the significant profits between themselves and others. In every case, the property subsequently fell into foreclosure, causing losses to the mortgage lender. The losses on the 37 properties identified by the government for prosecution totaled $1.9 million dollars.
U. S. Attorney for the District of Oregon Amanda Marshall said, “Mortgage fraud committed during the housing bubble of 2005-2008 continues to impact the livability of our community. These convictions demonstrate that the Department of Justice remains committed to investigating and prosecuting those who are responsible for the damage done to our neighborhoods and financial institutions.”
The investigation was initiated by the Portland office of the Federal Bureau of Investigation. The case was prosecuted by Assistant U.S. Attorney Scott Erik Asphaug.
Local Man Pleads Guilty to Sex Trafficking ChargesRead the Press Release
St. Louis, MO - Carl Mathews pled guilty to charges involving the sex trafficking of two area women by force and intimidation.
According to statements made in court during today's plea, between 2010 and October 2012, Carl Mathews conspired with others to force the two women to engage in prostitution in the St. Louis metropolitan area. The defendant arranged for one of the women to work in a local hotel. One of the women was told that she needed to help support the household by applying for state and federally-regulated food-stamp benefits and by having sex for money. Their food-stamp identification (EBT) cards were kept from them to deprive them of food and drink as a method of control, and they were sometimes provided the drug MDMA and clothing in preparation for the commercial sex dates.
CARL MATHEWS, Breckenridge Hills, MO, pled guilty to one felony count of conspiracy to commit sex trafficking by force, fraud or coercion, before United States District Judge Henry Autrey. Sentencing has been set for June 12, 2013.Co-defendant Carla Mathews, also of Breckenridge Hills, is facing trial on one felony count of conspiracy to commit sex trafficking by force, fraud or coercion, and two felony counts of sex trafficking by force, fraud or coercion.
The conspiracy charge carries a maximum penalty of life in prison; each count of sex trafficking by force, fraud or coercion carries a penalty range of fifteen years to life in prison and/or fines up to $250,000. In determining the actual sentences, a Judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
This case was investigated by the Federal Bureau of Investigation, the U.S. Department of Agriculture Office of Investigations, and the Breckenridge Hills Police Department. Assistant United States Attorney Noelle Collins is handling the case for the U.S. Attorney's Office.
As is always the case, charges set forth in an indictment are merely accusations and do not constitute proof of guilt. Defendant Carla Mathews is presumed to be innocent unless and until proven guilty.
Lawyer Pleads Guilty to Involvement in Massive No-Fault Automobile Insurance Fraud SchemeRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that SOL NAIMARK, an attorney, pled guilty to his role in two separate conspiracies to defraud private insurance companies under New York’s no-fault automobile insurance law, including one charge related to the largest single no-fault automobile insurance fraud scheme ever charged. NAIMARK pled guilty yesterday before U.S. District Judge J. Paul Oetken. Recently, ALEXANDER SANDLER, an owner and controller of several fraudulent no-fault clinics, GREGORY MIKHALOV, an owner and controller of medical clinics, LYNDA TADDER, a manager at a no-fault clinic, and CHAD GREENSHNER, a licensed chiropractor, also pled guilty to conspiracy to commit mail fraud and health care fraud in connection with the scheme before Judge Oetken.
The five defendants were arrested in February 2012, along with 31 others, and charged with conspiracy to commit mail fraud and health care fraud in connection with a systemic scheme to defraud private insurance companies of more than $279 million under New York’s no-fault automobile insurance law. Some of the defendants were also charged with racketeering and money laundering. A total of 10 defendants, including one licensed doctor, have now pled guilty. NAIMARK also pled guilty to a separate conspiracy to commit health care fraud.
Manhattan U.S. Attorney Preet Bharara said: “Sol Naimark actively solicited clients for whom he could churn out bogus lawsuits as part of a multi-million dollar insurance fraud scheme. It is particularly egregious when an attorney uses his license to perpetrate a fraud.”
According to the Superseding Information and other publicly filed information in the case, and the defendants’ statements in open court:
Under New York State Law, every vehicle registered in New York State is required to have no-fault automobile insurance, which enables the driver and passengers of a registered and insured vehicle to obtain benefits of up to $50,000 per person for injuries sustained in an automobile accident, regardless of fault, (the “No-Fault Law”). The No-Fault Law requires prompt payment for medical treatment, thereby obviating the need for claimants to file personal injury lawsuits in order to be reimbursed. Under the No-Fault Law, patients can assign their right to reimbursement from an insurance company to others, including medical clinics that provide treatment for their injuries. New York State Law also requires that all medical clinics in the State be incorporated, owned, operated, and/or controlled by a licensed medical practitioner in order to be eligible for reimbursement under the No-Fault Law. Insurance companies will not honor claims for medical treatments from a medical clinic that is not actually owned, operated, and controlled by a licensed medical practitioner.
In order to mislead New York authorities and private insurers, some of the defendants in this case who were the true owners of these medical clinics (“No-Fault Clinic Controllers”) paid licensed medical practitioners, including doctors, to use their licenses to form the professional corporations through which the medical clinics would then bill the private insurers for the bogus medical treatments. SANDLER owned, operated, and controlled at least four of these no-fault clinics, and TADDER was a manager at one of the clinics.
The No-Fault Clinic Controllers also instructed the clinic doctors to prescribe excessive and unwarranted referrals for various “modality treatments” for nearly every patient they saw. The treatments included physical therapy, acupuncture and chiropractic treatments – as much as five times per week for each – and treatments for psychology, neurology, orthopedics, and range of motion, in addition to functional capacity tests. Clinic doctors also prescribed unnecessary MRI’s, x-rays, orthopedics, and medical supplies. The No-Fault Clinic Controllers received thousands of dollars in kickbacks for patient referrals from the owners of the modality clinics (“Modality Controllers”). MIKHALOV was a Modality Controller who admitted to owning modality clinics that purported to be owned by licensed doctors, as required by New York Law. GREENSHNER was a chiropractor who provided unnecessary medical treatments at one of the modality clinics.
Patients were also referred to personal injury lawyers to file lawsuits against the insurance companies arising out of their exaggerated injuries from automobile accidents. The success of these lawsuits hinged on how many medical treatments the patients received, providing the necessary incentive for the patients to receive multiple treatments at the no-fault and modality clinics. NAIMARK admitted to paying a No-Fault Clinic Controller to refer him patients that received unnecessary treatments so that he could file personal injury lawsuits on behalf of the patients.
The second charge to which NAIMARK pled guilty relates to payments he made to a runner to bring him no-fault patients so that he could file personal injury lawsuits on their behalf.
NAIMARK, 54, of Flushing, New York, pled guilty to two counts of conspiracy to commit health care fraud. He faces a maximum sentence of 20 years in prison. He is scheduled to be sentenced by Judge Oetken on July 22, 2013.
SANDLER and MIKHALOV each pled guilty to conspiracy to commit health care fraud and conspiracy to commit mail fraud, and each faces a maximum sentence of five years in prison. TADDER pled guilty to conspiracy to commit health care fraud and conspiracy to commit mail fraud and faces a maximum sentence of 30 years in prison. GREENSHNER pled guilty to conspiracy to commit health care fraud, and faces a maximum sentence of 10 years in prison.
GREENSHNER, MIKHALOV, SANDLER, and TADDER are scheduled to be sentenced by Judge Oetken on July 1, 2013, July 8, 2013, July 9, 2013, and September 27, 2013, respectively.
U.S. Attorney Preet Bharara thanked the Federal Bureau of Investigation and the New York City Police Department for their continued outstanding work in this investigation.
The case is being prosecuted by the Office’s Organized Crime Unit. Assistant U.S. Attorneys Daniel S. Goldman, Nicholas L. McQuaid, Carolina A. Fornos and Daniel S. Noble are in charge of the prosecution. Assistant U.S. Attorneys Jason L. Cowley and Martin Bell of the Office’s Asset Forfeiture Unit are responsible for the forfeiture of assets.
U.S. v. Sol Naimark S11 Information
Keyser Resident Convicted on Drug ChargesRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Chris Zumpetta-Parr, Public Affairs SpecialistMARTINSBURG, WEST VIRGINIA — A 51 year old Keyser, West Virginia, resident was convicted on March 13, 2013, by a Martinsburg jury on six counts. The trial lasted two days, concluding late afternoon Wednesday. Judge Gina M. Groh presided over the trial.
United States Attorney William J. Ihlenfeld, II, announced that: CHARLES PAGE HAINES, III was convicted on one count of “Conspiracy to Distribute Cocaine Base” from June 5 to June 28, 2012; four counts of “Distribution of Cocaine Base” on June 5, June 6 and twice on June 7, 2012; and one count of “Maintaining a Drug-Involved Premise” from June
5 to June 28, 2012, all in Keyser, Mineral County, West Virginia.Trial evidence indicated that HAINES was involved with co-defendants Loren Constantine Brown and Crystal Starr Metz in a conspiracy to distribute cocaine base and provided his residence as a place from which the crack was distributed.
HAINES, who is in custody pending sentencing, faces up to 20 years imprisonment and a $1,000,000 fine on each of the conspiracy and distribution counts and up to 20 years imprisonment and $500,000 fine on the maintaining a drug-involved premise count.
This case was prosecuted by Assistant United States Attorney Zelda E. Wesley and former Assistant United States Attorney Thomas O. Mucklow and investigated by the Potomac Highlands Drug and Violent Crimes Task Force, consisting of officers from the Federal Bureau of Investigation, and the West Virginia State Police - Bureau of Criminal Investigations.
Kbic Man Sentenced to Prison for Sexual Abuse of A MinorRead the Press Release
MARQUETTE, MICHIGAN – Brian Paul Loonsfoot, 31, of Baraga, Michigan, was sentenced to 78 months in federal prison for sexual abuse of a minor, U.S. Attorney Patrick A. Miles, Jr. announced today. In addition to the prison term, U.S. District Judge Robert Holmes Bell ordered Loonsfoot to serve ten years of supervised release following his release from prison, and to pay a $100 special assessment. Loonsfoot’s sentence to custody will begin after his release from the Wisconsin prison system, where he is serving a sentence for sexual abuse of the same victim. Loonsfoot had pled guilty to the federal charge last November.
The investigation of this case revealed that Loonsfoot, who was 28 years old at the time of the offense, had sexual relations with a 12 year old girl who was a close friend of his family. These sexual acts occurred in Green Bay, Wisconsin, and on the Keweenaw Bay Indian Community reservation. Loonsfoot was prosecuted by Brown County, Wisconsin authorities for his offenses in Green Bay. In September 2011, Loonsfoot pleaded guilty to one count of second degree sexual assault of a child under 16. He was sentenced to seven years of confinement by the Brown County Circuit Court in December, 2011.
The Keweenaw Bay Indian Community Tribal Police and the Federal Bureau of Investigation investigated the case. Assistant U.S. Attorney Paul D. Lochner prosecuted the case.
END
Katelyn & Claire, Inc and Alex T, Inc Guilty PleaRead the Press Release
BATON ROUGE, LA - United States Attorney Donald J. Cazayoux, Jr. announced today that KATELYN & CLAIRE, INC. and ALEX T, INC., both doing business as Quality Express, pled guilty before United States District Court Chief Judge Brian A. Jackson to conspiracy to launder monetary instruments and multiple counts of failure to file Currency Transaction Reports. The corporations also agreed to forfeit to the United States $992,462.40, which were funds involved in the charged offenses.
Quality Express, which is located on Foster Drive in Baton Rouge, Louisiana, offered check cashing, currency exchanges and money transfers. Between March 2010 and April 2011, an undercover agent, working at the direction of the DEA and IRS, provided more than $275,000 in United States currency to agents of Quality Express to be exchanged or transferred so that it could be more easily concealed and avoid detection by law enforcement. The money was represented to be drug proceeds.
To further conceal the currency exchanges and transfers, Quality Express and its agents failed to file Currency Transaction Reports that would have reflected the receipt of United States Currency, on six separate occasions, in amounts ranging from $12,000 to $90,000. The defendants believed that the money was proceeds from drug trafficking.
United States Attorney Donald J. Cazayoux, Jr. stated, “This plea along with the nearly one million dollar money forfeiture here should send a clear message to any businesses, which attempt to help drug dealers and any other criminals launder the proceeds of their illegal actions, that we will not tolerate these acts in the Middle District of Louisiana.”
Damon Rowe, Acting IRS Special Agent-in-Charge, stated that “avoiding currency reporting requirements is a criminal violation of federal law under the Bank Secrecy Act. Deliberately avoiding these requirements is a form of money laundering; and IRS Criminal Investigation will work closely with the U.S. Attorney’s Office, and our law enforcement counterparts, to forcefully investigate these conspiracies.”
DEA Acting Assistant Special Agent-in-Charge Tony James stated, “The DEA, in conjunction with the IRS and local law enforcement agencies, will continue to pursue entities that lauder drug trafficking funds in order to fully dismantle drug trafficking organizations’ ability to pollute the city of BR with drugs.”
THANG MINH TRAN, also known as Tommy, had previously pled guilty to conspiracy to launder monetary instruments and money laundering. TRAN was one of the operators of Quality Express, and he used the business to facilitate the money laundering. Former Quality Express employees THAHN NGUYEN, also known as Money, and SON NGUYEN, also known as Tattoo, previously pled guilty to distribution of MDMA, more commonly known as Ecstasy.
This investigation was conducted by the United States Drug Enforcement Agency and the Internal Revenue Service. The Baton Rouge Police Department, West Baton Rouge Sheriff’s Office, East Baton Rouge Sheriff’s Office, Ascension Parish Sheriff’s Office and Gonzales Police Department assisted in the investigation. The case was prosecuted by Assistant United States Attorneys Jennifer M. Kleinpeter and J. Lane Ewing, Jr.
Justice Department Announces Nearly $2 Million in Grants to Strengthen Legal Services for the PoorRead the Press Release
Attorney General Eric Holder announced today $1.8 million in new resources to improve access to criminal legal services and strengthen indigent defense across the nation. In remarks during the “50 Years Later: The Legacy of Gideon v. Wainwright” event hosted by the Department of Justice, the Attorney General emphasized the department’s commitment to ensuring that all those accused of a crime, regardless of their wealth, education or class, have adequate legal representation and counsel. March 18th marks the 50th Anniversary of the U.S. Supreme Court’s landmark decision in Gideon v. Wainwright, where the court unanimously ruled that even those unable to afford counsel are entitled to counsel by court appointment. At today’s event, Attorney General Holder led a discussion on keeping and continuing the promise of Gideon, which included U.S. Supreme Court Justice Elena Kagan and former Vice President Walter Mondale, who, as Minnesota Attorney General in 1963, organized the submission of the amicus curiae brief to the U.S. Supreme Court with 21 state attorneys general in support of Clarence Gideon.
“Despite half a century of progress, far too many Americans still struggle to gain access to the legal assistance they need, and far too many children and adults enter our justice systems with little understanding of their rights,” said Attorney General Holder. “This is unacceptable and unworthy of a legal system that stands as an example for the world. I’m proud to say that today’s Justice Department is rising to the challenge to confront the obstacles facing indigent defense providers.”
Acting Associate Attorney General Tony West also delivered remarks about reclaiming Gideon’s petition at today’s ceremony.
“The constitutional right to counsel is a cornerstone of our criminal justice system,” said Acting Associate Attorney General Tony West. “It’s a principle that resides at the core of our concept of equal justice under the law, to which the Department of Justice remains deeply committed. Gideon reminds us that justice is as much a journey as it is a destination -- as much a process as it is an outcome -- and that we must give equal attention to both.”
At the event, Attorney General Holder discussed the importance of the Department’s Access to Justice Initiative, which he launched in 2010, to address the access to justice crisis in the criminal and civil justice system and help ensure that the justice system delivers outcomes that are fair to everyone, regardless of wealth and status. Strengthening the indigent defense system is among the Initiative’s priorities.“Fair treatment and justice are the right of everyone, no matter what their income,” said Deborah Leff, Acting Senior Counselor of the Access to Justice Initiative. “Clarence Earl Gideon won a victory in the U.S. Supreme Court for all Americans. It is now our responsibility to make sure that Gideon’s promise is fulfilled.”
The following Bureau of Justice Assistance (BJA) initiatives were a part of today’s announcement:
- $720,000 toward the upcoming grant solicitation, Answering Gideon’s Call: National Assistance to Improve the Effectiveness of Right to Counsel Services, which will enable an organization to work directly with states and counties to improve their ability to provide quality representation to indigent defendants and implement innovative strategies.
- $540,000 for two new jurisdictions, chosen by BJA, from last year’s Answering Gideon’s Call solicitation that will improve public defender and other indigent defense systems. The two new jurisdictions will join four jurisdictions, selected last year, to receive assistance with improving the capacity of indigent defense systems and increase the knowledge base about those systems.
- $140,000 toward opportunities through BJA’s National Training and Technical Assistance Center (NTTAC) that will provide technical assistance to help jurisdictions meet their constitutional obligation and provide adequate representation to indigent defendants. Additionally, these funds will support an initiative that will collect data to help determine ineffective components of criminal justice systems, and enable stakeholders, including district attorneys and judges, to join public defenders in the call for more manageable caseloads and to ensure adequate time is devoted to their clients.
The following Office of Juvenile Justice and Delinquency Prevention (OJJDP) solicitation was also part of today’s announcement:
- $400,000 for the Office of Justice Programs’ Office of Juvenile Justice and Delinquency Prevention competitive solicitation, Juvenile Indigent Defense National Clearinghouse. This award will support the improvement of juvenile indigent defense by providing a broad range of activities and services to improve the overall level of systemic advocacy, improving the quality of juvenile indigent defense representation and ensuring professional and ongoing technical support to the juvenile indigent defense bar.
For more information on the DOJ’s Access to Justice Initiative, which works to strengthen and improve legal services for disadvantaged groups, please visit: www.justice.gov/atj and www.justice.gov/atj/gideon/.
Related Materials:
Attorney General Eric Holder Speaks at the Justice Department's 50th Anniversary Celebration of the U.S. Supreme Court Decision in Gideon v. Wainwright
Acting Associate Attorney General Tony West Speaks at the Justice Department's 50th Anniversary Celebration of the U.S. Supreme Court Decision in Gideon v. WainwrightJury: Cahokia Man Guilty of Child Pornography OffensesRead the Press Release
A Cahokia man was found guilty on March 14, 2013, after a 3 day jury trial, for Production of Child Pornography (Count 1), Receipt of Child Pornography (Count 2), and Possession of Child Pornography (Count 3), the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today. Charles E. Hicks, 24, Cahokia, IL, faces a term of not less than fifteen years but not more than thirty years in prison on Count 1; on Count 2, Hicks faces a term of not less than five but not more than twenty years in prison; and, on Count 3, Hicks faces a term of not more than ten years in prison. Additionally, each count of conviction carries a potential fine up to $250,000, and a term of supervised release of five (5) years to life. Upon his release from prison, Hicks must register as a sex offender as a condition of his supervised release. Sentencing is scheduled for June 28, 2013, in East St. Louis, Illinois. Hicks was ordered detained (held without bond) after the jury’s verdict.
On January 14, 2011, an undercover operation conducted by a member of the United States Secret Service's Southern Illinois Cyber Crime Unit identified a computer that was offering to share images and videos of child pornography. The agent downloaded three images of child pornography from this computer, and later obtained a subpoena to identify the subscriber information related to this computer. The subscriber information identified Hicks’ residence as the location of the computer from which the images of child pornography were downloaded. Agents were able to make contact with Hicks at his mother’s house in Belleville, Illinois. While speaking with him, agents learned that he had two computers stored at his mother’s residence, one of them a HP Pavilion desktop computer. A forensic preview at the scene revealed images of child pornography on the HP computer.
While Hicks initially denied downloading child pornography, he admitted to using search terms on LimeWire that he knew would result in child pornography files that he was able to download. Hicks eventually admitted that he had been downloading child pornography for about two to three years, but that he only did so in the hope that law enforcement officers would track him down so they could find the person making the images available.
A forensic examination performed on the HP Pavilion desktop computer revealed 159 images and 130 video files of child pornography on this computer, and that the forensic evidence was consistent with Hicks being the person who downloaded and possessed the images. It also revealed that on April 3, 2008, Hicks knowingly downloaded several image and video files from LimeWire that he knew contained child pornography.
The investigation further revealed that, on August 1, 2008, Hicks took two pornographic photographs of a minor knowing that he/she was 16 years old at the time. One of the photographs depicted Hicks engaged in sexual intercourse with the minor. The other photograph was of the lascivious display of the minor=s genitals. The evidence at trial established that Hicks had persuaded or coerced the minor to engage in sexual activity for the purposes of photographing it.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in 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".
The case was investigated by the Illinois State Police and United States Secret Service=s Southern Illinois Cyber Crime Unit. The case is assigned to Special Assistant United States Attorney Matthew Brooks and Assistant United States Attorney Angela Scott.
Jury Convicts Cedar Rapids Man on Child Pornographt ChargesRead the Press Release
A man who received and possessed child pornography was convicted by a jury today after a four-day trial in federal court in Cedar Rapids.
James Sumner, age 49, from Cedar Rapids, was convicted of one count of receipt of child pornography and three counts of possession of child pornography. The verdict was returned this morning following about six hours and thirty minutes of jury deliberations.
The evidence at trial showed that, between 2007 and 2008, Sumner used the Internet to download child pornography. The evidence also showed that, between 2007 and 2011, Sumner possessed child pornography on CDs at his residence in Cedar Rapids.
Sentencing before United States District Court Chief Judge Linda R. Reade will be set after a presentence report is prepared. Sumner was taken into custody by the United States Marshal after the verdict was returned and will remain in custody pending sentencing. Sumner faces a mandatory minimum sentence of five years’ imprisonment and a possible maximum sentence of fifty years’ imprisonment, $1,000,000 in fines, $400 in special assessments, and at least five years and up to life on supervised release following any imprisonment. He also will be required to register as a sex offender.This case is being prosecuted by Assistant United States Attorney Mark Tremmel and was investigated by the Cedar Rapids Police Department.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab “resources.”
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is CR 12-92.
Hartford Man Charged with Murdering Potential Witness in Federal InvestigationRead the Press Release
March 15, 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, and Hartford Police Chief James C. Rovella today announced that a federal grand jury sitting in Hartford returned an indictment yesterday charging KERONN MILLER, also known as “Fresh,” 22, of Hartford, with the 2010 murder of Ian Francis of Hartford.
According to court documents and statements made in court, on December 21, 2010, Ian Francis was shot multiple times while sitting in his vehicle on Sigourney Street in Hartford. Francis succumbed to his injuries on January 15, 2011.
The indictment alleges that MILLER and others, known and unknown to the grand jury, murdered Francis with the intent to prevent the attendance of appearance of a person at a federal proceeding and to prevent Francis and another person from communicating with a federal law enforcement officer or judge about the commission or possible commission of a federal crime, namely, narcotics trafficking.
The indictment further alleges that MILLER conspired with others, known and unknown to the grand jury, to commit this offense.
The charges of witness tampering murder and conspiracy to commit witness tampering murder carry a mandatory lifetime term of imprisonment or death, should the government seek the death penalty in this matter.
MILLER was arrested on a federal arrest warrant on November 7, 2012. He has been detained since his arrest.
This indictment followed a joint law enforcement investigation headed by the Federal Bureau of Investigation’s Northern Connecticut Violent Crimes and Gang Task Force and the Hartford Police Department’s Major Crimes Division.
U.S. Attorney Fein stressed that an indictment is not evidence of guilt. Charges are only allegations, and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This case is being prosecuted by Assistant United States Attorney Brian P. Leaming.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
[email protected]