Latest Records
Newest first across public DOJ and U.S. Attorney press releases.
Friday 8 March 2013
Hazleton Woman Charged with Passing Counterfeit MoneyRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced today that a criminal Information was filed in U.S. District Court in Scranton today against Cindy Batista, age 23, of Hazleton, Pennsylvania, charging her with passing counterfeit $100 bills.
According to United States Attorney Peter J. Smith, Batista passed $100 bills at various businesses in Luzerne County between February 5, 2013 and February 12, 2013.
The case was investigated by the U.S. Secret Service and is assigned to Assistant U.S. Attorney Lorna N. Graham 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 sentence following a finding of guilty is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
In this particular case, the maximum penalty under the federal statute is 20 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.
Grace Healthcare and Grace Ancillary Services Agree to Pay United States and State of Tennessee $2.7 Million to Resolve False Claims AllegationsRead the Press Release
Government Alleges Companies Billed for Medically Unnecessary Therapy
CHATTANOOGA, Tenn. -- Chattanooga based nursing home chain Grace Healthcare LLC and its affiliate, Grace Ancillary Services LLC (collectively, Grace), have agreed to pay $2.7 million, plus interest, to resolve allegations that they violated the False Claims Act by knowingly submitting or causing the submission to the Medicare and TennCare/Medicaid programs of false claims for medically unreasonable and unnecessary rehabilitation therapy. Grace Ancillary Services LLC provided the therapy in some of the skilled nursing facilities Grace Healthcare LLC owns and/or manages in Tennessee and elsewhere.
According to the settlement agreement, federal and state investigators alleged that from 2007 through June 2011, Grace pressured physical, occupational and speech therapy staff in at least 10 nursing home facilities owned or managed by Grace to increase the amount of therapy provided to patients in order to meet targets for Medicare revenue that were set without regard to patients’ individual therapy needs and could only be achieved by billing for a large amount of therapy per patient. As part of the settlement, Grace has agreed to enter into a Corporate Integrity Agreement with the Inspector General of the Department of Health and Human Services that provides for procedures and reviews to be put in place to monitor and ensure Grace’s compliance with federal health care benefit program requirements.
“The continued viability of our federal healthcare benefit programs depends, in large part, on the honesty and integrity of the program participants,” said U.S. Attorney Bill Killian. “Health care providers must make decisions regarding the level of services to be provided based solely on individual patient need rather than a desire to increase the bottom line. As this settlement demonstrates, when aggressive business practices cross the line into waste and abuse, we are committed to working with our federal and state partners to protect public funds.”
"Medicare does not pay for medically unnecessary rehabilitation services," said Derrick L. Jackson, Special Agent in Charge at the U.S. Department of Health and Human Services Office of Inspector General in Atlanta. “The Inspector General is committed to identifying improper billing to Medicare and Medicaid and returning those dollars to the taxpayers.”
Mr. Killian noted that this settlement resulted from a joint, comprehensive investigation conducted by the Department of Justice and Tennessee Attorney General’s Office in cooperation with the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG) and the Tennessee Bureau of Investigation (TBI), and commended the efforts of all who played a role in the complex investigation, including TBI-Medicaid Fraud Control Unit Special Agent T.J. Battle, HHS-OIG Special Agent Tony Maffei, DOJ Trial Attorney Christelle Klovers, AUSAs Rob McConkey and Betsy Tonkin, HHS-OIG Senior Counsel Tonya Keusseyan, and Assistant Tennessee Attorney General Mary McCullohs. The investigation was prompted by a qui tam or whistleblower complaint filed in 2010. After investigators contacted Grace in early 2011 to request information and discuss the allegations, Grace cooperated with the investigation by providing documents as well as other information and making its personnel available for interviews.
This resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Secretary of the Department of Health and Human Services Kathleen Sebelius in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover $10.2 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 are over $14 billion, with recoveries by the U.S. Attorney’s Office for the Eastern District of Tennessee alone totaling more than $75 million during the same period.
Grace Healthcare and Grace Ancillary Services Agree to Pay United States and State of Tennessee $2.7 Million to Resolve False Claims AllegationsRead the Press Release
Government Alleges Companies Billed for Medically Unnecessary Therapy
CHATTANOOGA, Tenn. -- Chattanooga based nursing home chain Grace Healthcare LLC and its affiliate, Grace Ancillary Services LLC (collectively, Grace), have agreed to pay $2.7 million, plus interest, to resolve allegations that they violated the False Claims Act by knowingly submitting or causing the submission to the Medicare and TennCare/Medicaid programs of false claims for medically unreasonable and unnecessary rehabilitation therapy. Grace Ancillary Services LLC provided the therapy in some of the skilled nursing facilities Grace Healthcare LLC owns and/or manages in Tennessee and elsewhere.
According to the settlement agreement, federal and state investigators alleged that from 2007 through June 2011, Grace pressured physical, occupational and speech therapy staff in at least 10 nursing home facilities owned or managed by Grace to increase the amount of therapy provided to patients in order to meet targets for Medicare revenue that were set without regard to patients’ individual therapy needs and could only be achieved by billing for a large amount of therapy per patient. As part of the settlement, Grace has agreed to enter into a Corporate Integrity Agreement with the Inspector General of the Department of Health and Human Services that provides for procedures and reviews to be put in place to monitor and ensure Grace’s compliance with federal health care benefit program requirements.
“The continued viability of our federal healthcare benefit programs depends, in large part, on the honesty and integrity of the program participants,” said U.S. Attorney Bill Killian. “Health care providers must make decisions regarding the level of services to be provided based solely on individual patient need rather than a desire to increase the bottom line. As this settlement demonstrates, when aggressive business practices cross the line into waste and abuse, we are committed to working with our federal and state partners to protect public funds.”
"Medicare does not pay for medically unnecessary rehabilitation services," said Derrick L. Jackson, Special Agent in Charge at the U.S. Department of Health and Human Services Office of Inspector General in Atlanta. “The Inspector General is committed to identifying improper billing to Medicare and Medicaid and returning those dollars to the taxpayers.”
Mr. Killian noted that this settlement resulted from a joint, comprehensive investigation conducted by the Department of Justice and Tennessee Attorney General’s Office in cooperation with the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG) and the Tennessee Bureau of Investigation (TBI), and commended the efforts of all who played a role in the complex investigation, including TBI-Medicaid Fraud Control Unit Special Agent T.J. Battle, HHS-OIG Special Agent Tony Maffei, DOJ Trial Attorney Christelle Klovers, AUSAs Rob McConkey and Betsy Tonkin, HHS-OIG Senior Counsel Tonya Keusseyan, and Assistant Tennessee Attorney General Mary McCullohs. The investigation was prompted by a qui tam or whistleblower complaint filed in 2010. After investigators contacted Grace in early 2011 to request information and discuss the allegations, Grace cooperated with the investigation by providing documents as well as other information and making its personnel available for interviews.
This resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Secretary of the Department of Health and Human Services Kathleen Sebelius in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover $10.2 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 are over $14 billion, with recoveries by the U.S. Attorney’s Office for the Eastern District of Tennessee alone totaling more than $75 million during the same period.
Gayle Patrick Skunkcap, Jr., Jessie Jay St. Goddard, and Woodrow Jay Wells Plead Guilty in U.S. Federal CourtRead the Press Release
The United States Attorney's Office announced that during a federal court session in Helena, on March 4, 2013, before U.S. District Judge Sam E. Haddon, GAYLE PATRICK SKUNKCAP, JR., age 42, JESSIE JAY ST. GODDARD, age 50, and WOODROW JAY WELLS, age 45, residents of Browning, pled guilty to violating the Lacey Act (illegal sale of tribal wildlife) and theft from a tribal government receiving federal funding. Sentencing has been set for June 24, 2013. They are currently released on special conditions.
In an Offer of Proof filed by Assistant U.S. Attorneys Carl E. Rostad and Ryan G. Weldon, the government stated it would have proved at trial the following:
All wildlife on the Blackfeet Indian Reservation is owned by the Blackfeet Indian Tribe. In managing such wildlife, hunting is allowed. Hunting by non-members on the Blackfeet Indian Reservation is a highly regulated activity. The 2010 and 2011 Blackfeet Regulations set forth the number of tags that may be given to non-members and the price of payment required for each tag. These tags are required, are limited in number, and are highly lucrative. There are only between five and ten hunting licenses for each big-game species availabe to non-tribal members each year, with each license costing between $1,500 and $12,000, depending on the animal.
SKUNKCAP, Jr., was the Director of the Blackfeet Fish and Wildlife Department, and ST. GODDARD and WELLS were Tribal Councilmen on the Blackfeet Tribal Business Council. In 2010 and 2011, the Blackfeet Fish and Wildlife Department received federal funding in excess of $220,000, each year.
Between 2010 and 2011, SKUNKCAP, ST. GODDARD, and WELLS held four big-game hunts for country musicians participating in an outdoors television show on the Blackfeet Indian Reservation without obtaining the limited and expensive hunting licenses for non-tribal members to shoot elk, moose, deer, and a black bear. They also used tribal funds and personnel to outfit and guide the musicians, television show hosts, and a fly fishing expert.
They each face possible penalties of 10 years in prison, a $250,000 fine and 3 years supervised release.
The investigation was a cooperative effort between the U.S. Fish and Wildlife Service, the Federal Bureau of Investigation, and the Blackfeet Internal Affairs Office.
Gainesville Accountant Pleads Guilty to Wire Fraud and Tax EvasionRead the Press Release
ALEXANDRIA, Va. – Melvin Mooring, 54, of Gainesville, Va., pleaded guilty today to wire fraud and tax evasion in connection with the theft of approximately $3.3 million from a Chantilly, Va., company where Mooring had served as the chief financial officer.
Neil H. MacBride, United States Attorney for the Eastern District of Virginia; Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division; and Thomas J. Kelly, Special Agent in Charge, Washington, D.C. Field Office, IRS-Criminal Investigation, made the announcement after the plea was accepted by United States District Judge Liam O’Grady.
Mooring faces a maximum penalty of 20 years in prison on the wire fraud count and five years in prison on the tax evasion count when he is sentenced on June 7, 2013.
From 2000 to 2011, Mooring served as the chief financial officer, or CFO, of K&R Industries, a private company in Chantilly, Va. In a statement of facts filed with his plea agreement, Mooring admitted that from 2004 to 2011, he stole approximately $3.3 million from the company via company checks and wire transfers, which he routed through the bank account of a company he controlled in order to conceal their fraudulent nature. Mooring also admitted to altering company financial statements to conceal the fraud and to using the stolen funds for personal purposes, including for travel and to purchase real estate, automobiles, and jewelry. Mooring also admitted to failing to report the stolen funds as income on his individual income tax returns for the years 2005 through 2010, resulting in approximately $865,000 in losses to the United States Treasury.
This case was investigated by IRS-Criminal Investigation. Assistant United States Attorney Paul J. Nathanson and Tax Division Trial Attorney Tracy L. Gostyla are prosecuting the case on behalf of the United States.
A copy of this press release may be found on the website of the United States Attorney's Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.Fugitive Hedge Fund Manager Arrested in Italy in U.S. Case Alleging Market Manipulation Scam That Led to at Least $200 Million in LossesRead the Press Release
LOS ANGELES – Florian Wilhelm Jürgen Homm, a German hedge fund manager who was on the run for more than five years, has been arrested in Italy on federal fraud charges that accuse him of orchestrating a market manipulation scheme designed to artificially improve the performance of his funds, a fraud that led to at least $200 million in losses to investors around the world.
Homm, 53, was arrested at the Uffizi Gallery in Florence, Italy at approximately 12:30 p.m. on Friday (local time). Federal prosecutors in Los Angeles obtained an arrest warrant on Wednesday, March 6, after filing a criminal complaint that charges Homm with four felony charges: conspiracy to commit wire fraud, wire fraud, conspiracy to commit securities fraud and securities fraud. Homm was arrested by Italian authorities after the United States submitted a request for a provisional arrest with officials in Rome.
Homm was the founder and chief investment officer of Absolute Capital Management Holdings Limited, a Cayman Islands-based investment advisor that managed nine hedge funds from 2004 until September 2007. The criminal complaint filed in United States District Court in Los Angeles alleges that Homm directed the hedge funds to buy billions of shares of thinly traded, United States-based “penny stocks.” Homm caused many of the purchases of penny stocks to be made through Hunter World Markets, Inc., a broker-dealer in Los Angeles that Homm co-owned. Homm also allegedly obtained shares of the penny stock companies through various businesses he controlled.
After the hedge funds invested hundreds of millions of dollars in the illiquid penny stocks, Homm caused the hedge funds to trade the stocks among themselves in “cross-trades” made through the Los Angeles-based broker dealer. As part of the stock manipulation scheme, Homm and others allegedly sold their own shares of the penny stocks to the hedge funds managed by Homm. The cross-trades served to increase the trading prices of the previously illiquid stocks and, in turn, to boost the net asset values and apparent performance of the hedge funds. This apparent performance improvement at the hedge funds generated additional fees for Homm and Absolute Capital, as well as boosting Absolute Capital’s stock price on the London Stock Exchange, Alternative Investment Market.
Folllowing allegations made by a “whistleblower” in 2006, Homm also dumped tens of millions of dollars worth of his own shares in Absolute Capital prior to resigning from the firm in the middle of the night on September 18, 2007. The allegedly fraudulent conduct caused at least $200 million in losses to investors in the hedge funds. The scheme allegedly netted Homm and his co-schemers more than $53 million via trades made through Hunter World Markets alone.
A complaint contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty in court.
The wire fraud conspiracy charge carries a statutory maximum penalty of five years in federal prison. The wire fraud count carries a maximum penalty of 20 years in prison. The two charges related to securities fraud each carry a maximum penalty of 25 years in prison.
The case against Homm is the product of an ongoing investigation by the Federal Bureau of Investigation. Agents in the FBI’s Los Angeles Field Office worked with the FBI’s Legal Attaché Office in Rome and its sub-office in Milan, where agents worked collaboratively with Italian authorities, to secure the apprehension of Homm. The U.S. Department of Justice Attaché in Rome provided substantial assistance.
The Securities and Exchange Commission provided assistance to the FBI’s investigation.Two years ago, the United States Securities and Exchange Commission filed a civil lawsuit in Los Angeles federal court against Homm and four other defendants, alleging a microcap stock manipulation scheme as part of “portfolio pumping” plot to increase the value of Absolute Capital (see: http://www.sec.gov/litigation/litreleases/2011/lr21865.htm).
Homm recently published a book that was translated into English under the title, Rogue Financier: The Adventures of an Estranged Capitalist.
Release No. 13-033a
Four Defendants Sentenced in Timeshare FraudRead 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, and Daniel C. Alexander, Chief, Boca Raton Police Department, announced yesterday that Senior United States District Judge Kenneth L. Ryskamp sentenced defendants Anthony J. Chiaramonte, 35, of New York City, Nicholas Charles Higgins, 27, of Boynton Beach, Florida, Wensley Robin McFarlane, 53, of Lake Worth, Florida, and James Michael Tomasso, 53, of Boca Raton, Florida, for conspiring to commit mail and wire fraud, in violation of Title 18, United States Code, Section 1349.
Defendant Chiaramonte was sentenced to 51 months in prison; defendant Higgins was sentenced to one year and one day in prison; defendant McFarlane was sentenced to 90 months in prison; and defendant Tomasso was sentenced to 42 months in prison.
These defendants participated in a telemarketing boiler room through which telemarketers negotiated to purchase victim-owned timeshares on condition that the victim paid an advanced fee to cover such things as a title search. This fee ranged as high as tens of thousands of dollars. The victims were also told that this fee would be refunded to them at closing together with the money the conspirators were to pay them for the timeshares. None of these purchases ever occurred. In total, the conspiracy victimized over 1,000 people, many of whom were senior citizens, and cost the victims, in aggregate, more than $2.5 million.
Mr. Ferrer commended the investigative efforts of the FBI and the Boca Raton Police Department. This case is being handled by Assistant U.S. Attorney Kerry S. Baron.
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.
Four Co-Conspirators Sentenced in Major E. Idaho Drug CaseRead the Press Release
Nine Defendants Await Sentencing in April
POCATELLO – Four co-conspirators in a large-scale methamphetamine trafficking organization were sentenced this week in United States District Court, U.S. Attorney Wendy J. Olson announced today. The defendants appeared before Chief U.S. District Judge B. Lynn Winmill at the federal courthouse in Pocatello.
Antonio Javier Mendoza, 28, of Shelley, Idaho, was sentenced on March 5 to 96 months in federal prison followed by five years of supervised release for conspiracy to possess with intent to distribute in excess of 50 grams of methamphetamine. Mendoza was ordered to pay a $1,000 fine. He pleaded guilty to the charge on December 18, 2012.
Fabiola Esmerelda Marin Castro, 25, a Mexican national formerly living in Rexburg, Idaho, was sentenced on March 5 to 36 months in prison for conspiracy to possess with intent to distribute in excess of 50 grams of methamphetamine. She was also fined $300 and ordered to forfeit $83,575 and two vehicles. She pleaded guilty on December 18.
Daniel Quiroz, 25, a Mexican national formerly residing in Rexburg, was sentenced on Thursday to 78 months in prison for conspiracy to possess with intent to distribute in excess of 50 grams of methamphetamine. Quiroz was ordered to serve five years of supervised release and fined $500. He will be subject to deportation following his release from prison. He pleaded guilty on December 18.
Abel Garcia, 24, of Idaho Falls, Idaho, was sentenced today for making a false statement to a bank. Garcia was sentenced to one month in prison followed by two years of supervised release, and fined $750. He pleaded guilty to the charge on December 19.
Nine other defendants have pleaded guilty and are awaiting sentencing in April. One defendant is a fugitive.
Samuel Nevarez-Ayon, 26, a Mexican national formerly living in Rexburg, pleaded guilty to continuing criminal enterprise for his leadership role in the conspiracy. Sentencing is set for April 4. He faces a minimum term of 20 years up to life in prison, a maximum fine of $2 million, and a minimum term of five years of supervised release.
Juan Ortiz, Jr., 28, Ricardo Garcia Lopez, 36, Isidoro David Herrera, 31, of Idaho Falls, Idaho; and Rafael Ignacio Guerrero, 37, a Mexican national, pleaded guilty to conspiracy to possess with intent to distribute in excess of 50 grams of methamphetamine. They each face a minimum term of ten years in prison, at least five years of supervised release, and a maximum fine of $10 million. Ortiz and Lopez are set for sentencing on April 1; Guerrero on April 3, and Herrera on April 30.
Everado Tapia Torres, Jr., 30, of Idaho Falls, pleaded guilty to possession with intent to distribute five grams or more of methamphetamine. He faces at least five years in prison, a maximum fine of $5 million, and at least four years of supervised release. Sentencing is set for April 3.
Ana Rosa Valdez-Ceja, 26, of Shelley, pleaded guilty to money laundering. She faces up to 20 years in prison, a maximum fine of $500,000, at up to three years of supervised release. Sentencing is set for April 29.
Alberto Abarca, 23, of Idaho Falls, pleaded guilty to possession with intent to distribute methamphetamine. He faces up to 20 years in prison, a maximum fine of $1 million, and up to three years of supervised release. Sentencing is set for April 29.
Nicolas Levi Olsen, 30, of Idaho Falls, pleaded guilty to an information charging him with aiding and abetting possession with intent to distribute methamphetamine. He faces up to 20 years in prison, a maximum fine of $1 million, and up to three years of supervised release. Sentencing is set for April 30.
Guadalupe Meraz, 41, of Medera, California, is a fugitive from justice. A warrant has been issued for his arrest.
According to the plea agreements, from June 2005 through January 2012, a group of individuals centered around Nevarez-Ayon entered into a conspiracy to possess and distribute in excess of 50 grams of actual methamphetamine in the Idaho Falls area. In furtherance of the conspiracy, Nevarez-Ayon admitted that he distributed methamphetamine to other individuals on at least three occasions during this same time period. In furtherance of the conspiracy, Nevarez-Ayon directed activities of various co-defendants. In addition to distributing methamphetamine, several defendant laundered proceeds from the sale of the methamphetamine, and made false loan application to local banks to further the laundering of money. During the course of the conspiracy, the defendants obtained in excess of $500,000 from the distribution of methamphetamine.
The charges are the result of a nine-month investigation by the Organized Crime Drug Enforcement Task Force (OCDETF), including the Idaho State Police, Bonneville County Sheriff's Office, Idaho Falls Police Department, Madison County Sheriff's Office, Rexburg Police Department, Bingham County Sheriff’s Office, Fremont County Sheriff’s Office, Federal Bureau of Investigation (FBI), U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI), Internal Revenue Service-Criminal Investigation, and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). Other federal agencies participating in the OCDETF program include the Drug Enforcement Administration and the U.S. Marshals Service.
The OCDETF program is a federal multi-agency, multi-jurisdictional task force that supplies supplemental federal funding to federal and state agencies involved in the identification, investigation, and prosecution of major drug trafficking organizations.
Former Quincy Man Pleads Guilty to Tax Evasion Schemes and Theft from Federal Housing ProgramRead the Press Release
BOSTON – A former Quincy man, now living in New Hampshire, was convicted yesterday for carrying out two elaborate tax evasion schemes and theft of federal housing assistance funds.
Raymond Stebbins, 70, of Manchester, NH, pleaded guilty before U.S. District Judge George A. O’Toole, Jr. to two counts of conspiracy, five counts of tax evasion, two counts of making false statements and theft of public money.
Stebbins was engaged in two schemes – first, a false invoice scheme aimed at evading the ascertainment and assessment of income taxes and, second, a Section 8 housing fraud scheme.
In 2001, Christopher McGadden, the General Manager of Xcel Fire Protection, a fire protection indoor sprinkler business, hired Stebbins in a quasi-sales position. Stebbins purportedly owned numerous businesses, among them a trucking company, a moving company, a real estate company, and two or more business equipment resale companies. Stebbins prepared and sent bogus invoices in the names of the companies he purportedly owned to Xcel. The invoices falsely reflected that one of the Stebbins’ companies had provided goods or services to Xcel when they had not. Knowing the invoices were bogus, McGadden authorized Xcel to pay the invoices by check. Stebbins then deposited the Xcel checks into various bank accounts he’d opened, structuring the withdrawals of funds from those accounts. Thereafter, Stebbins gave McGadden 90 percent of the proceeds of those checks in cash and kept 10 percent for himself. In addition, McGadden caused Xcel’s customers to write checks directly in the name of one of Stebbins’ companies. Stebbins deposited those checks in to his bank account and did the same 90/10 split with McGadden. Neither Stebbins nor McGadden paid the proper income taxes on the $490,000 they took from Xcel checks and Xcel’s customer checks.
In a second conspiracy, starting around December 30, 1999, Stebbins conspired with another individual, identified as FV, to defraud the IRS. Stebbins carried out a nearly identical false invoice tax evasion scheme in which the two men fraudulently diverted more than $3.3 million in funds rightfully belonging to FV’s construction company based in Nashua, NH.
This scheme, although larger in scope, worked virtually identically to Stebbins’ scheme with McGadden. Neither Stebbins nor FV paid the proper income taxes on the money they took from FV’s company checks.For the tax years 2005 through 2009, Stebbins attempted to evade a large part of income tax due he owed to the IRS by filing erroneous returns which under-reported his income.
Furthermore, Stebbins made false statements to the U.S. Department of Housing and Urban Development when applying for the Section 8 Housing Assistance Program which provides housing assistance payments to people who need rent subsidy in order to obtain adequate housing.
Beginning in December 1997, Stebbins represented to HUD that he was unable to afford adequate housing. As a result, Stebbins received Section 8 benefits from June 1998 through May 2008. During this time, HUD periodically attempted to establish Stebbins’ continued eligibility for Section 8 benefits, and the level of those benefits, by sending him annual re-certification forms which requested information concerning his household income level and assets. Stebbins filled out the forms with false entries that under-reported his household income and assets. At the time he was receiving Section 8 benefits from HUD, Stebbins was an approved Section 8 housing assistance landlord for two multi-family properties, one in Quincy and another in Nashua, NH. Between January 1, 2002 and May 31, 2008, Stebbins effectively stole money from HUD in the form of Section 8 housing payments that he was not entitled to.
Judge O’Toole scheduled sentencing for June 11, 2013. Defendants convicted under these statutes are subject to serve a maximum sentence of five years in prison, followed by three years of supervised release and a $250,000 fine for each count of conspiracy and false statements; a maximum of five years in prison, followed by three years of supervised release and a $100,000 fine for each count of tax evasion; and a maximum of 10 years in prison, followed by three years of supervised release and a $250,000 fine for theft of public money.
In September 2011, McGadden was sentenced by U.S. District Judge William G. Young to one year in prison, followed by two years of supervised release, a fine of $7,500 and $178,435 in restitution to the IRS. In March 2011, McGadden pleaded guilty to conspiracy to defraud the United States and tax evasion.
United States Attorney Carmen M. Ortiz; William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; and Cary Rubenstein, Special Agent in Charge of the U.S. Department of Housing and Urban Development, Office of the Inspector General, New York Regional Office, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Diane Freniere of Ortiz’s Public Corruption and Special Prosecutions Unit.
Former Pima County Sheriff’s Deputy Sentenced to Five Years in PrisonRead the Press Release
TUCSON, Ariz. – On March 7, 2013, former Pima County Sheriff’s Deputy Francisco Jimenez, of Tucson, Ariz., was sentenced by U.S. District Judge Jennifer G. Zipps to five years in prison for conspiring to commit offenses against the United States, namely, theft of government money and attempted possession with the intent to distribute marijuana. In addition, Jimenez was ordered to serve a three-year term of supervised release upon his release from prison and to pay $12,000 in restitution to the government.
Jimenez pleaded guilty on June 25, 2012, to Count One of a superseding indictment charging conspiracy to commit offenses against the United States. The superseding indictment, which also charged four other defendants, alleged eight offenses involving corruption within law enforcement. The charged offenses stemmed from multiple undercover scenarios involving the defendants’ use, or the attempted use, of law enforcement officers to steal or protect drug loads and to steal money purportedly belonging to drug trafficking organizations.Two undercover scenarios leading to charges in the superseding indictment involved the theft of government money from the glove compartment of a vehicle during traffic stops conducted by defendant Jimenez, who was then a Pima County Sheriff’s Deputy. On June 26, 2010, and then again on Oct. 8, 2010, Jimenez performed a traffic stop on a vehicle which purportedly contained drug proceeds, searched the vehicle, and stole $4,000 from the glove compartment of the vehicle.
A third undercover scenario involved the purported theft of marijuana and drug money from a storage facility in Green Valley, Ariz.. On Nov. 24, 2010, Jimenez drove his patrol car near the storage facility to provide security while co-conspirators broke into a storage unit to steal marijuana and drug proceeds that were supposedly in the storage unit.
Co-defendant Miguel Arvizu, a former Pima County Sheriff’s Deputy at the time of the charged offenses, was sentenced on July 10, 2012, to five years imprisonment for his role in arranging and participating in the offenses, as well as recruiting Jimenez and other co-defendants into the conspiracy. Arvizu was also ordered to serve a three-year term of supervised release upon his release from prison and to pay $31,000 in restitution to the government.
The investigation in this case was conducted by the Federal Bureau of Investigation. The prosecution was handled by Eric Markovich and Gordon Davenport, Assistant U.S. Attorneys, District of Arizona, Tucson.
CASE NUMBER: CR-11-00791-TUC-DCB
RELEASE NUMBER: 2013-021_JimenezFor more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
Former NFL Player Freddie Mitchell Pleads Guilty to Federal Tax Fraud ConspiracyRead the Press Release
Orlando, Florida - United States Attorney Robert E. O'Neill announces that Freddie L. Mitchell II (34, Lakeland) pleaded guilty today to conspiracy to file a false tax claim with the government. Mitchell faces a maximum penalty of 10 years in federal prison. A sentencing date has not yet been. Two co-defendants, Jamie Russ-Walls and Richard Walls, already have been sentenced in the case.
According to the plea agreement, on November 30, 2009, Internal Revenue Service Criminal Investigation (IRS-CI) determined that a fraudulent 2008 Form 1040 claiming a $1,968,288 tax refund had been filed in the name of a professional athlete (A.G). Agents soon learned that A.G. had been introduced by Mitchell to a former IRS employee, Jamie Russ-Walls. A.G. had been told by Mitchell that Jamie Russ-Walls could help A.G. get extra money back from the IRS.
At the end of July 2009, Jamie Russ-Walls and Richard Walls flew to Orlando and met with A.G. and Mitchell. Jamie Russ-Walls indicated that she and her husband worked in the tax preparation business. After providing copies of his tax records to the couple, A.G. was told that he could get additional money back from the IRS because of "grey areas" in his tax returns. A.G. eventually made a $100,000 down payment to Mitchell towards the tax preparation fee. Mitchell then split the fee with Jamie Russ-Walls and Richard Walls.
Without A.G.'s knowledge, Mitchell, Jamie Russ-Walls and Richard Walls then electronically submitted a fraudulent 2008 Form 1040 in A.G.'s name to the IRS. The form included false business losses totaling $5,367,775, resulting in a fraudulent refund of $1,968,288. A.G. never had any involvement in these businesses and never had provided the information on the tax schedule to Mitchell, Jamie Russ-Walls, or Richard Walls. The false return also had included other paperwork asking the IRS to direct deposit the refund into the bank accounts of Mitchell and Jamie Russ-Walls. A.G. subsequently learned of the fraudulent activity when the IRS rejected his regular tax return that was filed in October 2009. The IRS was then able to cancel payment on the fraudulent return.
Agents also discovered five additional false 2009 returns totaling $2,264,005 that had been submitted by Mitchell, Jamie Russ-Walls and Richard Walls. Each of these claims had been accompanied by false W-2 forms showing wages in the millions of dollars from Chameleon Enterprises, LLC. Mitchell had incorporated this business in 2003, listed himself as the manager, and opened a mailbox in Kathleen, Florida, to receive correspondence. When contacted by the IRS about the wages allegedly paid to these five individuals, Mitchell falsely verified their employment and income. Records checks later revealed that Chameleon actually had been dissolved as a corporation by the State of Florida in 2007. It did not, therefore, pay any wages in 2009.
Jamie Russ-Walls and Richard Walls previously pleaded guilty for their roles in this case. On February 14, 2013, Richard Walls was sentenced to 3 years and 1 month in federal prison. Jamie Russ-Walls was sentenced on February 1, 2013, to a term of 5 years of probation.
This case was investigated by IRS-CI. It is being prosecuted by Assistant United States Attorney Robert E. Bodnar, Jr.
Former Merrill Lynch Financial Advisor Sentenced for EmbezzlementRead the Press Release
TALLAHASSEE, FL B James Ryan Lanier, 33, was sentenced to 106 months in federal prison for embezzling more than $800,000 from Merrill Lynch clients. The sentence was announced by Pamela C. Marsh, United States Attorney for the Northern District of Florida.
Between 2008 and 2010, Lanier used his position as a financial advisor for Merrill Lynch in Tallahassee to funnel approximately $887,931 in client funds to his own personal bank accounts. Lanier was able to induce Merrill Lynch Client Associates to wire transfer client funds to bank accounts Lanier controlled by using forged client authorization letters and falsely claiming that his clients had verbally approved the transfers. To facilitate the scheme, Lanier purposely sought assistance from Merrill Lynch employees who were unfamiliar with Lanier’s clients. Lanier used the embezzled client funds to make loan payments, and to purchase vehicles, an interest in a cellular telecommunications business, and a condominium in Albany, Georgia.
Last November, Lanier pled guilty to 13 counts of wire fraud, three counts of mail fraud, four counts of money laundering, and two counts of aggravated identity theft in connection with the embezzlement.
In addition to the prison sentence, Lanier was ordered to pay $887,931 in restitution to Merrill Lynch.
U.S. Attorney Marsh commended the work of the Federal Bureau of Investigation, the Internal Revenue Service – Criminal Investigations, and the United States Marshal’s Service, whose joint investigation led to the arrest in this case. Ms. Marsh stated, “This office will vigorously prosecute financial advisors and consultants who victimize and swindle their own clients. This sentence should serve as a stark warning to those who may be tempted to line their own pockets by betraying their clients’ trust.”
The case was prosecuted by Assistant U.S. Attorney Jason Coody.Former Laredo Police Officer SentencedRead the Press Release
On Wednesday, March 6, 2013, former Laredo Police Officer Eliseo Montes, Jr., age 33, was sentenced to 20 years imprisonment for his involvement in a conspiracy to distribute large amounts of marijuana, announced U.S. Attorney Robert Pitman, Western District of Texas. The case was investigated by the Internal Revenue Service(IRS) Criminal Investigation Division, the Irving Police Department, the Federal Bureau of Investigation, the Department of Homeland Security Immigration and Customs Enforcement—Homeland Security Investigations (HSI), the Waco Police Department, and the Laredo Police Department.
A federal jury in Waco, Texas, found Montes guilty of two counts of conspiracy to possess with intent to distribute marijuana and conspiracy to commit money laundering on December 20, 2012. On Wednesday, United States District Judge Walter S. Smith, Jr., sentenced Montes terms of imprisonment of 240 months on each count to run concurrently, and a $1,000 fine on each count. Judge Smith remanded Montes to the custody of the U.S. Marshals Service following sentencing.
According to court records, members of the conspiracy acquired marijuana from sources in Mexico and distributed it in Waco and Dallas, Texas, as well as other states. Evidence at trial established that Montes invested in quantities of the marijuana. In January 2009, while employed as a Patrol Sergeant with the Laredo Police Department, Montes assisted members of the conspiracy by staging a traffic stop to help two conspirators avoid paying a debt they owed for marijuana. Montes and the coconspirators staged the stop to make it appear to the marijuana supplier that law enforcement had seized monies purportedly intended to pay the marijuana debt. Montes was paid for his assistance. The conspirators conducted various financial transactions with various banking institutions to conceal the profits from the sale of marijuana.
Assistant United States Attorney Mary Kucera prosecuted this case on behalf of the Government.Former Gymnastics Coach Charged with Attempted Transfer of Obscene Material to A Minor and Attempted Receipt and Possession of Child PornographyRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Michael B. Steinbach, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, announced the arrest of defendant Raymond Adams, 42, of Boca Raton, in connection with a seven count indictment charging Adams with attempted transfer of obscene material to a minor, possession of child pornography, and attempted receipt of child pornography, in violation of Title 18, United States Code, Sections 1470, 2252(a)(2) and 2252(a)(4)(B).
Adams, who is also facing pending state charges in Broward County 17th Judicial Circuit in case number 09019123CF10A related to molesting a 10 year old gymnastics student of his in 2009, had his initial appearance before United States Magistrate Judge William Matthewman yesterday. A pre-trial detention hearing is set for Monday, March 18, 2013, before the duty United States Magistrate Judge. If convicted, Adams faces a mandatory statutory minimum sentence of five years and a possible maximum statutory sentence of up to twenty years in prison and a lifetime of supervised release. In addition, Adams would have to register as a sex offender.
Anyone with any information about this case should contact the FBI at (305) 944-9101.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse. Project Safe Childhood was launched in May 2006 by the Department of Justice and is 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.
Mr. Ferrer commended the investigative efforts of the FBI. The case is being prosecuted by Assistant U.S. Attorney Brandy Brentari Galler.
An indictment is only an accusation and a defendant is presumed innocent until proven guilty beyond a reasonable doubt.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Former Executive Director of La Posta Gaming Commission Admits Embezzling Funds from TribeRead the Press Release
United States Attorney Laura E. Duffy announced that Troy Teague, former Executive Director of the La Posta Gaming Commission ("Commission") pled guilty today in front of Magistrate Judge Jan Adler to embezzling $57,000 from the La Posta Band of Mission Indians.
According to court records, Teague served as Executive Director of the Commission from 2006 to 2011. In that capacity, he was responsible for: (1) creating the Commission's budget and maintaining the Commission's books and records; (2) issuing checks on behalf of the Commission; and (3) monitoring, reviewing and making payments on all Commission credit cards. Teague understood that any and all checks he issued B and all credit card charges B on the Commission account could only lawfully be used for legitimate La Posta business.
Despite the fact that Teague recognized that he could not use the Commission credit card or bank account for personal expenses, he used both the credit card and checking account for personal business, including: (i) membership dues at a gun club; (ii) Home Depot charges; (iii) car audio/video components; (iv) vacation expenses; (v) legal fees; (vi) a grain mill; (vii) restaurant expenses, (viii) car rentals; and (ix) entertainment (e.g, comedy club bill). Teague admitted that (between June 2009 and April 2011) he embezzled a total of $57,000 from La Posta. Thereafter, he paid the tribe's credit card bills and concealed from the Commission that they included his personal expenses.
"The United States Attorney's Office is committed to doing its part to enhance security in Indian Country,” said Assistant U.S. Attorney Jill Burkhardt, community outreach director and tribal liaison. “The diligent prosecution of federal crimes committed on reservations is an important complement to State and Tribal law enforcement efforts.
" U.S. Attorney Duffy praised the enforcement work by the FBI agents who diligently pieced together the full scope of the fraud.
"Today's conviction proves that Mr. Teague exploited and violated his position of trust as the Executive Director with the La Posta Band of Mission Indians and unjustly enriched himself at the expense of the tribe," said Daphne Hearn, Special Agent in Charge of the San Diego FBI Field Office. “The FBI is committed to ensuring those in positions of trust are held to the highest standards and anything less will be vigorously pursued and investigated.”
DEFENDANT Criminal Case No. 13cr0852-MMA Troy Teague Age: 38 El Cajon, California SUMMARY OF CHARGESOffense: Title 18, United States Code, Section 1163 - Embezzlement and Theft from
INVESTIGATING AGENCY
an Indian Tribal Organization
Maximum penalties: 5 years custody; $250,000 fine; 3 year supervised release.Federal Bureau of Investigation
Former Destin Mortgage Broker Sentenced to 2 Years in Prison for Bank FraudRead the Press Release
PENSACOLA, FLORIDA – A former mortgage broker, Randolph Branham, 46, of Destin, Florida, was sentenced in federal court yesterday to 2 years in prison and ordered to pay over $1.8 million in restitution, having been adjudicated guilty of multiple bank fraud violations.
In December of last year, Branham pled guilty to a five-count indictment, alleging that he had overstated his income to financial institutions and mortgage lenders on mortgage loan documents related to six pieces of property located in Destin, Panama City Beach, and Freeport, Florida. As a part of the scheme to defraud the lenders, Branham also submitted fraudulent letters falsely inflating his income. Approximately $2.4 million in loans were issued by the lenders as a result of Branham’s fraud. The lenders defrauded included: The First National Bank of Florida (which was closed by the FDIC in September 2011), SunTrust Mortgage, Trustmark National Bank, First City Bank of Florida, IndyMac Bank (now known as OneWest Bank), and Bank of America.
Yesterday afternoon, Senior U.S. District Judge Lacey A. Collier sentenced Branham to 2 years in prison and ordered him to pay over $1.8 million in restitution to the victim lenders and the FDIC as Receiver for The First National Bank of Florida due to the bank’s closure.
Pamela C. Marsh, United States Attorney for the Northern District of Florida, praised the work of Northwest Florida Mortgage Fraud Task Force, a partnership between the Federal Bureau of Investigation, the Okaloosa County Sheriff’s Office and the Florida Department of Law Enforcement.
U.S. Attorney Marsh stated, “The successful prosecution of this mortgage broker on mortgage fraud offenses demonstrates the commitment of the Department of Justice to combating mortgage fraud in the Northern District of Florida. It is critical that we protect the integrity of the real estate market and banking institutions in our communities, which are major contributors to the health of our economy in Florida. I commend the investigative activities of the Northwest Florida Mortgage Fraud Task Force, a partnership between the Federal Bureau of Investigation, the Okaloosa County Sheriff’s Office and the Florida Department of Law Enforcement. Together, they did an excellent job in unraveling some very complicated real estate financial transactions in this case.”
The case was prosecuted by Assistant United States Attorney Tiffany H. Eggers.Federal Officials Speak to Alban Elementary School Students About Making Responsible DecisionsRead the Press Release
U.S. Attorney Goodwin, U.S. Marshal Foster say Alban’s service learning club builds student character and strong communities
ST. ALBANS, W.Va. – United States Attorney Booth Goodwin and U.S. Marshal John D. Foster today met with students from Alban Elementary School in St. Albans, W.Va. to discuss the importance of making responsible decisions. Goodwin and Foster also commended the 44 students for their participation in a service learning project known as The Success Club at Alban Elementary.
The Success Club, established by former Alban Elementary teacher Deb Austin Brown, teaches students a variety of success strategies, focuses on community service and inspires youth leadership.
“Educating our young people is one of the most effective ways that we can solve problems in our communities.” U.S. Attorney Booth Goodwin said, “Service learning projects, like the Success Club at Alban, are invaluable. They provide more than just an outlet for students to interact with peers – they serve as a source where students can begin to develop a good ethical compass.”
Goodwin created the United States Attorney’s Ambassador for Justice Awards program in April 2012 to honor West Virginia high school juniors who have shown outstanding leadership skills and a commitment to social justice. The Ambassador for Justice program was formed following a tragic high school shooting in Chardon, Ohio, that claimed the lives of three young people and wounded two others in February of last year. The Ambassador for Justice program was also established in response to a handful of reports that involved school bullying and attempted acts of violence by students within the southern district of West Virginia.
U.S. Marshal John Foster said,“This program at Alban Elementary is an important way to equip young people with problem-solving techniques and leadership qualities. The students, in turn, can use these qualities to add value to and strengthen their communities.”
Alban Success Club director Deb Austin Brown said, “It truly meant a great deal for our students to hear from U.S. Attorney Goodwin and U.S. Marshal Foster. Our service learning club was created primarily to help students recognize the importance of community service. This is a building block for their growth. When students are motivated and set goals, they are bound to have success.”
Over the past two years, Goodwin and Foster have visited several schools throughout the southern district of West Virginia speaking to students about bullying prevention, making responsible decisions and educating youth about the harmful effects of drug abuse.
For more information about the Success Club at Alban, please visit: http://www.99successstrategies.com/
Everett Woman who was Key Player in Mexico Based Drug Distribution Ring Sentenced to PrisonRead the Press Release
An Everett resident, who was deeply involved in a conspiracy to distribute drugs from Mexico and obtain guns to take back across the border was sentenced today in U.S. District Court in Seattle to five years in prison and four years of supervised release for Conspiracy to Distribute Controlled Substances, announced U.S. Attorney Jenny A. Durkan. During the 2012 investigation, MICALIA VALENZUELA, 32, was captured on court authorized wiretaps discussing drug distribution, obtaining weapons and was reported to advocate violence against targets in Mexico. VALENZUELA, who split her time between Mexico and Everett during the course of the investigation, was arrested March 29, 2012. She was indicted along with 34 other members of the drug trafficking ring including her father and other relatives. At sentencing U.S. District Judge Robert S. Lasnik recommended that VALENZUELA get drug treatment while incarcerated.
According to records filed in the case, during the investigation, agents seized a significant quantity of heroin, methamphetamine, and firearms, including military-style assault rifles and sniper rifles which were bound for Mexico. VALENZUELA was actively involved in the distribution of the drugs and discussing the weapons the group was trying to obtain to smuggle back to Mexico. When she was arrested at her apartment investigators found approximately an ounce of heroin, together with smaller amounts of methamphetamine, cocaine and heroin; a loaded revolver and ammunition; body armor; and a “shopping list” of firearms, including AK-47s and AR-15 style assault rifles. In her plea agreement VALENZUELA admits distributing heroin in November 2011. VALENZUELA served the drug trafficking organization as a drug courier.
“The same cartels responsible for violence in Mexico have infiltrated Washington communities,” said Brad Bench, special agent in charge of HSI Seattle. “These are people who resort to violence to protect their criminal enterprise. HSI is focused on rooting these operatives out of our communities by disrupting every level of their illicit business.”
Ten members of the conspiracy have pleaded guilty. Trial for the other defendants is scheduled for May 6, 2013.
The case was investigated by the ICE’s Homeland Security Investigations, the Bureau of Alcohol, Tobacco and Firearms (ATF), the Drug Enforcement Administration (DEA), the Snohomish Police Department, Washington State Patrol, the Snohomish Regional Drug Task Force and the Seattle Police Department.
The case is being prosecuted by Assistant United States Attorneys Vince Lombardi, Jeffrey Backhus and J. Tate London.
Elmira Woman sentenced for filing false tax returnsRead the Press Release
ROCHESTER, N.Y.--U.S. Attorney William J. Hochul, Jr. announced today that Dawn White, 28, of Elmira, N.Y., who was convicted by a federal jury of conspiracy and filing false federal income tax returns, was sentenced by U.S. District Court Judge Charles J. Siragusa to 33 months in prison and ordered to pay $67,926 in restitution to the Internal Revenue Service.
Assistant U.S. Attorney Richard A. Resnick, who handled the trial of the case, stated that in 2005 and 2006, White and her sister Jennifer Ford, filed several false income tax returns with the IRS and New York State. Specifically, White and her sister filed tax returns which contained false wage and tax withholding information that resulted in tax refunds to which Ford knew she was not entitled.
For example, for the 2005 tax year, White submitted an income tax return claiming to have earned $94,000 from General Revenue Corporation with $39,000 withheld in federal taxes. In actuality, the defendant earned only approximately $4,000 from General Revenue Corporation and had only $325 in taxes withheld from her earnings. As a result, White received a refund from the IRS in the amount of approximately $21,000. In total, 13 false tax returns were filed, resulting in a loss of approximately $100,000 to the IRS.
Jennifer Ford was convicted of conspiracy and filing false income tax returns in January 2012 and will be sentenced on March 26, 2013.The sentencing is the culmination of an investigation on the part of Special Agents of the Internal Revenue Service, Criminal Investigation Division, under the direction of Toni Weirauch, Special Agent-In-Charge, New York Field Office.
East St. Louis Man Pleads Guilty to Firearm OffenseRead the Press Release
On February 7, 2013, Detrin C. Spraggins, a 46-year old East St. Louis, Illinois, man pled guilty in United States Federal District Court, in East St. Louis, to Unlawful Possession of a Firearm by a Previously Convicted Felon, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today. Spraggins is scheduled for sentencing on May 31, 2013, at which time he faces a maximum potential sentence of 10 years’ in prison and a fine of up to $250,000, not more than 3 years’ of supervised release after his prison term, and a mandatory special assessment of $100. Spraggins also agreed to the forfeiture of the firearm.
Court proceedings revealed that on February 15, 2012, law enforcement officers patrolling in East. St. Louis, Illinois, observed individuals standing around a pickup truck with the door open parked across from an apartment building. As officers drove closer, the driver of the pickup truck closed the driver’s door and quickly sped off. Other officers stopped Spraggins when he pulled into a driveway. Spraggins consented to a body search, where contraband was discovered. This find led to an officer further opening the ajar door of the pickup truck to look for additional contraband. As he did so, he noticed the butt of a firearm sticking out of the driver’s side door pocket.
This case was investigated by the WAVE (Working Against Violent Elements) Task Force, which focuses its efforts on combating violent crime in East St. Louis, Washington Park, and surrounding communities. The WAVE Task Force receives financial support through the Department of Justice’s Project Safe Neighborhoods (PSN) initiative, a nationwide federal program which endeavors to address gun-related violence.
This case is assigned to Assistant United States Attorney Daniel T. Kapsak for prosecution.
Drug Dealer Sentenced in Federal CourtRead the Press Release
MOBILE, Ala. - Joseph Augustus Reed, 36, of Fairhope, was sentenced in federal court yesterday for his role in the distribution of crack cocaine there. Reed entered a guilty plea to the charge of possession with intent to distribute crack cocaine in May of 2012. He was sentenced on March 7, 2013, by District Court Judge William H. Steele. Judge Steele ordered that Reed serve 114 months imprisonment, to be followed by a supervised release term of three years. Judge Steele ordered that the defendant receive drug treatment, and that during his supervised release term, he will be subject to drug testing. Judge Steele also ordered that Reed pay a $100 special mandatory assessment. No fine was imposed.
The case was investigated by the Fairhope Police Department and the Federal Bureau of Investigations. It was prosecuted in the United States Attorney’s Office by Assistant United States Attorney Gloria Bedwell.
District Man Sentenced to Five Years in Prison for Shooting High-Powered Rifle- Incident Took Place in Broad Daylight in Southeast Washington-Read the Press Release
WASHINGTON –Nathaniel Carter, 34, of Washington, D.C., was sentenced today to five years in prison on charges stemming from a shooting that took place in broad daylight in Southeast Washington, U.S. Attorney Ronald C. Machen Jr. announced.
Carter pled guilty in January 2013, in the Superior Court of the District of Columbia, to charges of assault with a dangerous weapon and possession of a firearm during a crime of violence. He was sentenced by the Honorable Lynn Leibovitz. Upon completion of his prison term, Carter will be placed on three years of supervised release.
According to the government’s evidence, the shooting took place at 9:30 a.m. on Dec. 14, 2011, in an apartment community in the 3400 block of 13th Place SE. Carter fired six shots from a high-powered rifle at another man who tried to flee from the gunfire. The dispute stemmed from an alleged altercation that occurred between the two men in 2009. The men had largely avoided each other until a verbal altercation on the morning of the shooting. No one was injured by the gunfire, including numerous innocent bystanders who were in the area at the time of the shooting. At least one round pierced an apartment door, striking the steps inside.
Detectives from the Metropolitan Police Department (MPD), acting on information from the community, quickly located the firearm and other hidden evidence from the crime scene.
In announcing the sentence, U.S. Attorney Machen commended the detectives of MPD’s Seventh District who were involved in the arrest and investigation of this case, as well as the members of the community whose cooperation led to the successful prosecution of this case. Finally, U.S. Attorney Machen expressed his appreciation to Paralegal Specialists D’Yvonne Key and Richard Cheatham and Assistant U.S. Attorney Mervin A. Bourne, Jr., who investigated and prosecuted the case.
13-087District Man Pleads Guilty to Robbery Charge in Attack of Senior Citizen-Defendant Accosted the Victim in Broad Daylight in Northwest Washington-Read the Press Release
WASHINGTON – Reggie Gordon, 29, of Washington, D.C., has pled guilty to a charge of robbery for an attack against a senior citizen that took place earlier this year in Northwest Washington, U.S. Attorney Ronald C. Machen Jr. announced.
Gordon pled guilty on March 7, 2013 in the Superior Court of the District of Columbia. The Honorable Heidi M. Pasichow scheduled sentencing for May 30, 2013. Under the court’s voluntary sentencing guidelines, Gordon faces a likely range of 30 to 42 months in prison.
According to the government’s evidence, Gordon accosted a 69-year-old man at about 2:40 p.m. on Feb. 8, 2013, in area of 14th and Newton Streets NW. Gordon approached the victim from behind, with a knife in his hand, and demanded, “Give me the bag, give me the cash.” The victim handed over a bag, which contained cigarettes, and took money out of his pocket and handed it to Gordon. After Gordon fled, the victim flagged police, who immediately began searching the area. Gordon was stopped soon afterward by police and arrested.
In announcing the plea, U.S. Attorney Machen commended the work of the officers of the Metropolitan Police Department (MPD), whose quick work led to the defendant’s arrest. He also praised those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialists Debra McPherson and Todd McClelland, and Intelligence Specialist Sharon Johnson. Finally, he thanked Assistant U.S. Attorney Phil Selden, of the Fourth District Unit of the Felony Major Crimes Section, who investigated and prosecuted the case.
13-091District Man Pleads Guilty to Federal Charges After Search Turns up A Semiautomatic Gun and PCP-Defendant Arrested After A Struggle with Police-Read the Press Release
WASHINGTON - Antowaun Lynch, 29, of Washington, D.C., has pled guilty to federal drug and weapons offenses stemming from a search last fall in which he was caught by police with a gun and phencyclidine (PCP), U.S. Attorney Ronald C. Machen Jr. announced today.
Lynch pled guilty on March 7, 2013 in the U.S. District Court for the District of Columbia to unlawful possession with intent to distribute phencyclidine and unlawful possession of a firearm and ammunition by a person convicted of a crime. The Honorable Rosemary M. Collyer scheduled sentencing for May 16, 2013. Lynch faces up to 20 years in prison. Judge Collyer ordered that he be held without bond pending his sentencing.
According to the government’s evidence, in the early morning hours of Sept. 30, 2012, officers with the Metropolitan Police Department (MPD) were called to the 600 block of Edgewood Street NE to investigate several robberies. Lynch was part of a group of people that the officers encountered. When the officers approached him, Lynch appeared nervous and asked, “Why are you doing this?” Lynch continued to turn his body to the right toward the police car and away from the officers. He put his right hand on his waistband at his side. An officer then put his hand on Lynch’s waistband and noticed a weapon was concealed in the area.
When Lynch attempted to grab the weapon and remove it from his waistband, the officers grabbed onto the gun. Lynch kicked and resisted the officers who were trying to remove the gun and arrest him. After this struggle, the officers were able to retrieve the weapon, a semiautomatic handgun loaded with six rounds of 9mm ammunition in the magazine and one round in the chamber. After his arrest, officers also found a clear glass vial with a black top containing a yellow liquid of approximately one ounce of fluid PCP in Lynch’s pants pocket.
Lynch has a 2005 felony conviction in Virginia.
In announcing the plea, U.S. Attorney Machen commended the actions of the MPD officers who participated in this arrest and the removal of the handgun and drugs. He also acknowledged the efforts of Assistant U.S. Attorneys Emory V. Cole and Brittan Heller, who investigated and prosecuted the case.
13-088Department of Justice and Federal Trade Commission Extend <br /> Public Comment Period for Patent Assertion Entity WorkshopRead the Press Release
WASHINGTON – The Department of Justice and the Federal Trade Commission (FTC) announced today that the deadline for submitting written comments on their recent Patent Assertion Entity Activities Workshop has been extended from March 10, 2013 to April 5, 2013.
The workshop, held on Dec. 10, 2012, explored the impact of patent assertion entity (PAE) activities on innovation and competition and the implications for antitrust enforcement and policy. Additional information about the workshop is available at the Department of Justice and FTC websites. Comments may be submitted via e-mail to: [email protected]. Submitted comments will be made publicly available on the Department of Justice and FTC websites.Press contacts:
Department of Justice
Office of Public Affairs
Gina Talamona
202-514-2007Federal Trade Commission
Office of Public Affairs
Peter Kaplan
202-326-2334Defendant in Children Charity Fraud Case Pleads GuiltyRead the Press Release
Nehemiah Muzamhindo Admits Bilking W.K. Kellogg Foundation of $800,000GRAND RAPIDS, MICHIGAN – Nehemiah Muzamhindo, a resident of Grand Rapids, Michigan and citizen of Zimbabwe, pled guilty to federal money laundering and income tax charges before U.S. Magistrate Judge Ellen Carmody, U.S. Attorney Patrick Miles announced today. Joining Miles in the announcement were Scott Collins, Special Agent in Charge of the Diplomatic Security Service (“DSS”) and Special Agent in Charge Erick Martinez, Internal Revenue Service Criminal Investigation.
Muzamhindo faces a maximum sentence of 23 years in prison; an order of restitution and criminal fines, and deportation. Sentencing, which will be conducted by U.S. District Judge Janet T. Neff, has not yet been scheduled.
Muzamhindo was investigated by federal agents in 2008 for his role in a scheme to obtain fraudulent U.S. passports. While conducting a search warrant on his home, agents discovered evidence that Muzamhindo had received large wire transfers from bank accounts held by the W.K. Kellogg Foundation (“WKKF”) in the Republic of South Africa. WKKF has its headquarters in Battle Creek, Michigan and is one of the world’s largest children’s charities. The investigation ultimately determined that Muzamhindo was part of a fraudulent scheme to submit bogus invoices for payment to WKKF, which paid members of the scheme approximately $800,000 between 2006 and 2008 before learning that it was being swindled.
By pleading guilty to a federal money laundering charge, Muzamhindo admitted to being part of the scheme, and to wiring roughly half of the fraudulent funds back to Africa, where one of his accomplices lived. He also admitted that he had filed false income tax returns during 2006 and 2008 because he did not report any of the money he received from WKKF during those years.
U.S. Attorney Miles commented that “The positive result in this case is directly attributable to the dedicated and coordinated efforts of federal law enforcement, beginning with the Diplomatic Security Service uncovering Muzamhindo’s scheme in the course of an unrelated passport fraud investigation. Their diligence prevented the loss of even more money meant to help disadvantaged children. Then agents of the IRS worked to have Muzamhindo held accountable for his attempt to cheat on his taxes, reinforcing the message that swindlers will be held accountable for the full measure of their deceit in this district.”
“The worldwide presence and investigative capabilities of the Diplomatic Security Service enabled us to pull all of the pieces together – uncovering the connections to South Africa; allowing DS agents to compile the evidence that assisted the prosecution team to accepting Muzamhindo’s guilty plea,” said Scott Collins, Assistant Special Agent in Charge of the Chicago Field Office of the Diplomatic Security Service. “Our Detroit Resident Office led our investigation and worked collaboratively with the IRS and U.S. Attorney’s Office. DSS takes very seriously our charge to protect the integrity of the U.S. passport and visa. Those who fraudulently acquire U.S. travel documents often do so in order to commit other crimes.”
Special Agent in Charge Erick Martinez, Internal Revenue Service Criminal Investigation added that Muzamhindo’s crime was worse than many typical fraud cases: “He diverted money intended for children for his own greedy purposes.”
The case was prosecuted by Assistant U.S. Attorney Timothy VerHey and was investigated by special agents of the IRS-Criminal Investigation and of the Diplomatic Security Service.
END
Davenport Man Sentenced After Federal Drug ConvictionRead the Press Release
DAVENPORT, IA- On March 8, 2013, Leeandrel Quinn-Lake, age 35, from Davenport, Iowa, was sentenced by United States District Court Judge John A. Jarvey to 168 months imprisonment, announced United States Attorney Nicholas A. Klinefeldt. Quinn-Lake was also ordered to serve five years of supervised release and pay $100 towards the Crime Victims Fund. As part of the plea proceeding, Quinn-Lake admitted that from October 2007 to February 2009 he joined a conspiracy to distribute cocaine, obtained quantities of crack cocaine from multiple sources, and then distributed this cocaine in the Davenport area. Quinn-Lake admitted that he was responsible for between 840 grams to 2.8 kilograms of crack cocaine.
This case was investigated by the Drug Enforcement Administration, the Iowa Division of Narcotics Enforcement, the Davenport Police Department and the United States Marshals Service and was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
(Download Press Release )
Davenport Man Sentenced After Federal Conviction for Felon in Possession of AmmunitionRead the Press Release
DAVENPORT, IA- On March 8, 2013, Yusuf Hasan Shariff, age 56, from Davenport, Iowa, was sentenced by United States District Court Judge John A. Jarvey to 15 months imprisonment on the charge of possession of ammunition as a felon, announced United States Attorney Nicholas A. Klinefeldt. Shariff was also ordered to serve three years supervised release and pay $100 towards the Crime Victims Fund.
On April 13, 2012, Scott County, Iowa, Sheriff deputies responded to a local gas station when Shariff was unable to pay for gasoline. When Shariff was unable to find a means to pay the bill, he handed the deputy a .32 caliber bullet and said “. . . let’s take this to the next level.” During a transport to jail, Shariff made verbal threats to kill the deputy. The Clinton County dispatcher also reported that police had made contact with Shariff earlier that day, and that Shariff made statements about revenge against the police department.
On April 17, 2012, a Davenport police officer conducted a traffic stop of a mini-van driven by Shariff. Shariff ended up crashing his vehicle into a retaining wall near Genesis West in Davenport. When a Davenport police officer approached Shariff, he refused several orders to remain still and to go down to his knees. As the officer approached, Shariff stood up, pulled away from the officer, and then swung at and punched the officer in the mouth. A second police officer arrived and Shariff physically struggled with both officers. As they went to the ground, Shariff obtained control of a knife and stabbed at the police officers. With the assistance of a third officer, Shariff was taken into custody. While being transported to jail, Shariff again made verbal threats to kill a Davenport police officer.
On April 19, 2012, Davenport police officers searched Shariff’s Davenport residence and seized an additional 15 rounds of .32 caliber ammunition. On October 22, 2012, Shariff pled guilty to possession of ammunition as a felon, having previously been convicted in 1999 of a felony drug offense.
This case was investigated by the Bureau of Alcohol, Tobacco and Firearms, the Davenport Police Department, and the Scott County Sheriff’s Office, and was prosecuted by the United States Attorney’s Office for the Southern District of Iowa as part of the Project Safe Neighborhoods initiative.
(Download Press Release )
Dallas-Area Businessmen Charged in Plot Involving Illegal Export of Approximately $12 Million Worth of Computers to IranRead the Press Release
Defendants Allegedly Shipped Computers to Dubai, Concealing That They Were Ultimately Destined for Iran
DALLAS — Borna Faizy, aka “Brad,” and Touraj Ghavidel, aka “Brent Dell,” corporate owners/operators of Signal Microsystems in Addison, Texas, a company that sold computers domestically and internationally, were arrested yesterday by members of the North Texas Counterproliferation Task Force on an indictment alleging that they illegally shipped computer equipment to Iran through Dubai. They made their initial appearances yesterday afternoon and were released on bond. In addition, both pleaded not guilty to the charges. Today’s announcement was made by Sarah R. Saldaña, United States Attorney for the Northern District of Texas and Diego Rodriguez, Special Agent in Charge for the FBI Dallas Division.
The indictment, which was returned under seal by a federal grand jury in Dallas earlier this week, alleges that from 2005 to January 2012, Faizy, 42, of Frisco, Texas, and Ghavidel, 44, of Plano, Texas, conspired together and with others to export computers and computer equipment from the United States to Iran, in violation of the prohibitions imposed upon that country by the United States Government, without first having the required authorizations or licenses from the Office of Foreign Assets Control (OFAC).
As part of their conspiracy, the indictment alleges that Faizy and Ghavidel acquired computers from U.S. companies to supply to end-users in Iran and concealed from the United States that the computers were destined for Iran. They allegedly evaded regulations, prohibitions and licensing requirements of the Iranian Transactions and Sanctions Regulations (ITSR), which prohibit, among other things, the export, re-export, sale, or supply, directly or indirectly, from the United States to Iran, without prior authorization from the Secretary of the Treasury. These regulations further prohibit the unauthorized exportation of goods from the United States to a third country if the goods are intended or destined for Iran.
Faizy and Ghavidel allegedly actively recruited Iranian customers by marketing their computer business to business owners and individuals in Iran, and, in 2008 or 2009, attended a computer trade show, known as “GITEX,” in Dubai to recruit Iranian customers. The defendants allegedly used freight-forwarding companies in Dubai to ship the equipment to Iran and communicated with coconspirators using fictitious names and coded language to obscure the true identities and locations of the ultimate consignees and end-users. They also created invoices and export forms that falsely identified the ultimate consignees of the shipments as parties in Dubai.
Each defendant is charged with one count of conspiracy to illegally export to Iran, nine substantive counts charging illegal export and attempted export of goods to Iran and one count of making false statements to a federal agency. Upon conviction, the conspiracy count carries a maximum statutory penalty of 20 years in federal prison. Each of the substantive counts carries a maximum statutory penalty of 20 years in federal prison and each of the false statement counts carries a maximum penalty of five years in federal prison. In addition, upon conviction, each count carries a maximum fine of $250,000.
The investigation is being conducted by members of the North Texas Counterproliferation Task Force, which includes the FBI, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the Department of Commerce and Defense Criminal Investigative Service.
The prosecution is being handled by Assistant U.S. Attorneys J. Mark Penley, Gary C. Tromblay and Katherine Miller of the Northern District of Texas and Trial Attorney David Recker of the Justice Department’s National Security Division.
An indictment is merely a formal charge that a defendant has committed a violation of criminal law and is not evidence of guilt. Every defendant is presumed innocent until, and unless, proven guilty.
Dallas Man Sentenced to 20 Years in Federal Prison for Role as Leader of Methamphetamine Distribution ConspiracyRead the Press Release
DALLAS — Todd Ray Walker, 39, of Dallas, was sentenced this afternoon by U.S. District Judge Barbara M. G. Lynn to 240 months in federal prison for conspiring to possess with the intent to distribute methamphetamine, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas. Walker has been in custody since June 27, 2011, when he was arrested by officers with the Dallas Police Department.
According to documents filed in the case, Walker admitted that on multiple occasions from January 2011 to the date of his arrest, he received multi-ounce quantities of methamphetamine from multiple Dallas-based supply sources, stored the drugs at residences on Westglen Drive and Forney Road in Dallas, and distributed the drugs from the residences. During the time of the conspiracy, Walker possessed and/or distributed more than two kilograms of methamphetamine.
In addition, Walker admitted that in retaliation for the theft of drugs and drug proceeds from the Westglen residence, on or about June 27, 2011, he held a female against her will for several hours at the residence. He forced her to strip so that he could search her for drugs and/or money and admits that he was armed with a handgun while he held her inside the residence. Her hands were then bound by co-defendant James Darnell Brown, and Walker took photographs of her being assaulted by co-defendants Amy Suzanne Benat and Rachel Marie Anderson. Walker, Brown, Benat and Anderson were arrested when officers with the Dallas Police Department arrived at the residence on June 27, 2011, and a subsequent search of the residence resulted in the seizure by law enforcement of approximately 250 grams of methamphetamine and multiple firearms.
Walker was ordered to forfeit his residence on Westglen Drive and 36 firearms to the United States.
This Organized Crime Drug Enforcement Task Force (OCDETF) investigation was conducted by the FBI. To date, a total of 50 defendants, mostly customers of Walker, have been named in multiple indictments.
Deputy Criminal Chief Assistant U.S. Attorney Rick Calvert was in charge of the prosecution.
Dale City Man Sentenced to 220 Months for Producing Child PornographyRead the Press Release
ALEXANDRIA, Va. – MacArthur Taylor, 40, of Dale City, Va., was sentenced to 220 months in prison, followed by 15 years of supervised release, for creating child pornography by himself engaging in sexual activity with a 14-year-old girl.
Neil H. MacBride, United States Attorney for the Eastern District of Virginia; Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office; and Stephan M. Hudson, Prince William County Chief of Police, made the announcement after sentencing by United States District Judge Anthony J. Trenga.
Taylor pleaded guilty on June 11, 2012, to producing child pornography. He was identified by law enforcement after he provided his Dell Streak Tablet to an acquaintance to repair. While attempting to repair the tablet, the acquaintance saw still images of a female minor in various states of undress. A video produced by Taylor was also later discovered on the tablet showing the victim engaging in sexually explicit conduct. When law enforcement interviewed the young girl, she admitted to engaging in sexually explicit conduct with Taylor for the past two years.
The investigation was conducted by the Prince William County Police Department and FBI Washington Field Office’s Child Exploitation Task Force. Assistant United States Attorney Jay V. Prabhu and Department of Justice Trial Attorney Maureen C. Cain are prosecuting the case on behalf of the United States.
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.
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.Coon Rapids Man Charged for Stealing Prosthetics from the U of M, Selling Them OnlineRead the Press Release
MINNEAPOLIS—Earlier today in federal court, a 52-year-old Coon Rapids man was charged with allegedly stealing prosthetics and related supplies from the University of Minnesota Medical Center-Fairview and selling them online. Peter Stasica was charged via an Information with one count of wire fraud.
Allegedly, from February to August 2011, Stasica, who was then Prosthetics manager for Fairview’s Orthotics and Prosthetics Department, began removing prosthetics and prosthetic-related supplies without authorization to sell on eBay. In addition, Stasica allegedly solicited under false pretenses from several patients prosthetics they were not using. Stasica did not disclose to those patients that he intended to sell their prosthetics.
If convicted, Stasica faces a potential maximum penalty of 20 years in prison. All sentences will be determined by a federal district court judge. This case is the result of an investigation by the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney David M. Genrich.
A defendant, of course, is presumed innocent until he or she pleads guilty or is proven guilty at trial.Charlottesville Woman Sentenced on Synthetic Drug ChargesRead the Press Release
CHARLOTTESVILLE, VIRGINIA -- A local woman, who pled guilty in April 2012 to synthetic drug distribution charges, was sentenced this afternoon in the United States District Court for the Western District of Virginia in Charlottesville.
Lois Lee McDaniel, of Charlottesville, Va., previously pled guilty to one count of conspiracy to possess with the intent to distribute and to distribute controlled substance analogues 3,4-Methylenedioxymethcathinone (MDMC), 3,4-Methylenedioxypyrovalerone (MDPV), and 4-Mehtyl-ethylcathinone(4-MEC), commonly referred to as bath salts. Bath salts are mixtures of many different chemicals, including those that resemble cocaine, methamphetamine, and ecstasy.
This afternoon in District Court, McDaniel was sentenced to 28 months in federal prison, three years of supervised release thereafter and a fine of $1,000.
“The abuse of bath salts, especially among young people, is on the increase in Central Virginia. These substances are highly addictive and extremely dangerous. They are also often illegal, as demonstrated by the prosecution of Ms. McDaniel,” United States Attorney Timothy J. Heaphy said today. “The Department of Justice will continue to work with both law enforcement and the health care community to raise awareness of the dangers presented by these bath salt compounds. We must attack this problem with both strong enforcement and education about the dangers posed by this emerging threat.”
McDaniel, the former owner of the C-Ville Video Store, previously admitted that she, and others at the store, sold bath salts from behind the counter. McDaniel bought her MDMC, MDPV and 4-MEC from a source in New York.
In all, McDaniel admitted to distributing more than 200 grams of bath salts between April 2011 and August 2011. The defendant also admitted that she knew individuals were using the bath salts to get high and that she should not have been selling them to customers. C-Ville Video Store became so widely known for distributing bath salts that there was often a line of bath salt users waiting in line outside the store prior to its opening in the morning.
The investigation of the case was conducted by Jefferson Area Drug Task Force and the Drug Enforcement Administration. Assistant United States Attorney Ron Huber and Special Assistant United States Attorney Joseph Platania prosecuted the case for the United States.Bethel Man pleads guilty and is sentenced for illegally using imitation of official seal of U.S. Fish and Wildlife ServiceRead the Press Release
Anchorage, Alaska - U.S. Attorney Karen L. Loeffler announced today that a Bethel man pled guilty and was sentenced in federal court in Anchorage for illegally making and printing an imitation official insignia of the United States Fish & Wildlife Service.
On March 8, 2013, John Jens Owens, 50, of Bethel, Alaska, was sentenced by United States Magistrate Court Judge Deborah Smith. The court ordered Owens to pay a fine of $500, was placed on one year probation, and was ordered to make and print an announcement in the Delta Discovery and Tundra Drums acknowledging his wrongdoing.
Owens’ plea agreement included the facts he admitted to in support of the charges: In May 2010, Owens read an article in the Delta Discovery paper written by a Fish & Wildlife Service refuge officer for the Yukon Delta National Wildlife Refuge. The next day, Owens copied the official seal of the Department of the Interior United States Fish & Wildlife Service from the U.S. Fish & Wildlife Service website. After Owens made the imitation of the official seal, he affixed it, without permission, as letterhead to a letter he drafted.
Owens drafted the letter in order to make it appear that it was written by and came from the U.S. Fish & Wildlife Service, Office of Law Enforcement in the Yukon Delta National Wildlife Refuge. Owens disseminated false information in the letter. None of the representations in the letter originated or were approved by the U.S. Fish & Wildlife Service. Owens then printed the false letter and mailed it to numerous villages in and around the Yukon Delta National Wildlife Refuge. Owens printed and mailed this fraudulent letter, on official-looking letterhead, in order to get people angry at the U.S. Fish & Wildlife Service.
Yukon Delta National Wildlife Refuge Management personnel were pleased to see resolution to this case, and said they make it a priority to maintain the integrity of information delivered to the public, including information regarding waterfowl management regulations.
Ms. Loeffler commended the United States Fish & Wildlife Service for the investigation that led to the successful prosecution of Owens.
Autauga County Man Sentenced to 60 Months for $6.2 Million TheftRead the Press Release
Ricky Nelson Dawson, a U.S. Department of Agriculture Employee, Converted Checks Payable to the Government
Montgomery, Alabama - Ricky Nelson Dawson, age 54, of Autauga County, was sentenced today by United States District Judge Myron H. Thompson to a prison term of 60 months based on his conviction for wire fraud arising out of his theft of approximately $6.2 million in checks payable to the federal government, U.S. Attorney George L. Beck, Jr., announced today.
According to court records, Dawson, a United States Department of Agriculture (“USDA”) employee, had served since 2000 as director of the Bay Minette and Camden offices of USDA’s Rural Development programs. One of those programs was the Rural Utilities Service, which provided loans and grants to local water authorities and electric utilities (the “Authorities”).
Between March 2007 and May 2012, Dawson received checks—all payable to “Rural Development” or a variation thereof—from various Authorities representing funds intended as payment to USDA. Dawson embezzled the checks by depositing them into an account in the name “Ryal Development Farm” that he had opened at First Community Bank, in Chatom. On some of the checks, Dawson hand wrote the letter “y” over the “ur” in “Rural” to make it appear as if “Ryal” Development was the payee of the checks. The following chart summarizes Dawson’s activities:
Date Deposited
Amount ($)
Payor
March 22, 2007
149,838.29
East Central Baldwin County
28,000
Hobson Water System
April 4, 2008
106,246.29
Mexia Water System
November 3, 2008
24,841.77
Mexia Water System
December 8, 2008
21,464.60
Town of Autaugaville
February 18, 2009
75,000
St. Stephens Water System
August 21, 2009
400,000
Southern Pine Electric Cooperative
January 4, 2010
5,000
Freemanville Water System
January 22, 2010
35,000
Freemanville Water System
April 21, 2010
90,000
Freemanville Water System
September 28, 2010
70,000
Freemanville Water System
November 22, 2010
500,000
Perry County Water Authority
March 1, 2011
190,534
East Central Baldwin County
April 14, 2011
995,000
Perry County Water Authority
July 1, 2011
779,263.73
Autauga County Water Authority
December 9, 2011
799,172.79
West Dallas Water Authority
April 18, 2012
999,000
City of Thomasville Water Works and Sewer Board
May 4, 2012
957,559.29
City of Thomasville Water Works and Sewer Board
TOTAL
$6,225,920.76
After depositing the checks, Dawson transferred the funds into his accounts at Regions Bank and E*TRADE Securities. He also used the funds from later thefts to make payments (a) to Authorities that were the payors of checks Dawson had previously converted, and (b) to USDA. The net amount taken by Dawson after the “repayments” came to approximately $3.8 million. A hearing to determine restitution will be scheduled within 90 days.
Dawson has been free on a $25,000 unsecured bond. He was ordered to report to prison on May 31, 2013.
The case was investigated by the FBI and by USDA’s Office of Inspector General and was prosecuted by Assistant U.S. Attorneys Andrew O. Schiff and Tommie B. Hardwick.
PRESS CONTACT: Clark Morris
Email: [email protected]
Telephone: (334) 551-1755
Fax: (334) 223-7617Alleged Top Lieutenant in Sinaloa Cartel IndictedRead the Press Release
ALEXANDRIA, Va. – A man the U.S. government has identified as a narcotics kingpin and top lieutenant in the Sinaloa Cartel has been indicted by a federal grand jury in Alexandria, Va.
Neil H. MacBride, United States Attorney for the Eastern District of Virginia; Mythili Raman, Acting Assistant Attorney General for the Criminal Division; and Karl Colder, Special Agent in Charge for the Drug Enforcement Administration’s (DEA) Washington Division Office, made the announcement after the indictment was unsealed.
Damaso Lopez Nunez, aka “El Licensiado,” 47, of Mexico, was indicted on Nov. 23, 2011, and accused of conspiring to distribute cocaine and conspiring to commit money laundering. He faces a maximum penalty of life imprisonment, if convicted. The indictment was unsealed on March 7, 2013.
On Jan. 9, 2013, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated Lopez Nunez under the Foreign Narcotics Kingpin Designation Act, which prohibits U.S. persons from conducting financial or commercial transactions with the designated individual and freezes any assets they have under U.S. jurisdiction. According to OFAC, Lopez Nunez is a top lieutenant of Joaquin “Chapo” Guzman Loera of the Sinaloa Cartel. A chart of the Chapo Guzman organization can be viewed here: http://www.treasury.gov/resource-center/sanctions/Programs/Documents/20130109_sinaloa_operatives.pdf.
The indictment provides a forfeiture notice of $280 million representing the proceeds of the alleged offenses.
This ongoing investigation is being conducted by the DEA’s Washington Division Office and Mazatlan Resident Office.Assistant United States Attorney Daniel J. Grooms of the Eastern District of Virginia’s National Security and International Crime Unit and Trial Attorney Darrin L. McCullough of the Narcotic and Dangerous Drug Section of the Justice Department’s Criminal Division are prosecuting the case on behalf of the United States.Criminal indictments are only charges and not evidence of guilt. A defendant is presumed to be innocent until and unless proven guilty.
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.
Alabama Corrections Officer and Former Corrections Officer Indicted for Stolen Identity Tax Refund FraudRead the Press Release
A 29-count indictment was unsealed today in Montgomery, Ala., charging Bryant Thompson, an Alabama corrections officer, and Quincy Walton, a former Alabama corrections officer, with federal tax crimes, the Justice Department and the Internal Revenue Service (IRS) announced. Thompson and Walton are both charged with one count of conspiracy to defraud the United States; Thompson is additionally charged with 10 counts of wire fraud and 10 counts of aggravated identity theft, and Walton is additionally charged with four counts of theft of government money and four counts of aggravated identity theft.
According to the indictment, Thompson, a corrections officer at the Alabama Department of Corrections, unlawfully obtained the names and Social Security numbers of inmates in the custody of the state of Alabama and caused to be filed false tax returns in the names of those inmates. The IRS issued tax refund checks in the names of inmates whose identities Thompson unlawfully obtained and Walton cashed those checks.
An indictment is merely a formal charge by the grand jury. The defendants are presumed innocent unless and until proven guilty.
If convicted, Thompson and Walton face a maximum sentence of five years in federal prison for the conspiracy count, a maximum of 20 years for each wire fraud count, a maximum of 10 years for each theft of government money count and a minimum of two years for aggravated identity theft. In addition to prison time, Thompson and Walton also face the possibility of fines and restitution to the IRS and other victims.
The case was investigated by IRS Criminal Investigation and is being prosecuted by Trial Attorneys Alexander R. Effendi and Justin K. Gelfand of the Justice Department’s Tax Division.
Accountant Fined and Sentenced to ProbationRead the Press Release
ALBANY, N.Y. — Ronald L. Simons, 58, of Vestal, New York, was sentenced today to one year probation and ordered to pay a $5,000 fine by United States Magistrate Judge Christian F. Hummel, announced United States Attorney Richard S. Hartunian, Special-Agent-in-Charge Toni M. Weirauch of the Internal Revenue Service, Criminal Investigation, New York Field Office, and Andrew W. Vale, Special Agent-in-Charge, Federal Bureau of Investigation, Albany Division. The sentencing follows Simons’ November 8, 2011 guilty plea.
In October 2007, Simons, a certified public accountant and partner in the accounting firm of Piaker & Lyons in Binghamton, New York, submitted a false 2006 income tax return on behalf of David L. and Lynn A. Smith. David L. Smith is a former owner of the Albany broker-dealer McGinn, Smith & Co., Inc., and was convicted of conspiracy to commit mail and wire fraud, mail fraud, wire fraud, securities fraud, and filing false tax returns on February 6, 2013 following a fourweek jury trial.
The return, prepared and submitted to the Internal Revenue Service by Simons, did not report $407,000 in fees distributed to David L. Smith from TDM Funding LLC in 2006. Simons reclassified the $407,000 as loans despite knowing that the McGinn Smith controller initially booked the $407,000 as fees and that David L. Smith previously characterized the majority of the $407,000 as fees.
This case was investigated by the Internal Revenue Service, Criminal Investigation and the Federal Bureau of Investigation. This case was prosecuted by Assistant United States Attorneys Elizabeth C. Coombe, Richard D. Belliss, and Wayne A. Myers.
LOCAL CONTACT:
Elizabeth C. Coombe
Assistant U.S. Attorney
Tel: (518) 431-0247
Thursday 7 March 2013
Winnebago Man Sentenced for Felony DUI ConvictionRead the Press Release
United States Attorney Deborah R. Gilg announced that Joseph C. Snowball, age 24 of Winnebago, was sentenced by Chief United States District Court Judge Laurie Smith Camp for his felony conviction of driving under the influence while having a minor child present in the vehicle. Snowball was sentenced to five years’ probation and was ordered to pay restitution in the amount of $188,621.25 for injuries suffered by the passengers in the vehicle he was driving. While on probation, Snowball will be required to perform 100 hours of community service. In addition, he will not be allowed to drive unless he has an ignition interlock device installed on his vehicle.
On May 11, 2012, Snowball was in a vehicle on the Winnebago Indian Reservation along with four other persons, including a five year old child. The adults in the vehicle had been drinking for an extended period of time. When the owner of the vehicle became too intoxicated to drive safely, Snowball took over even though he did not have a driver’s license and even though he was also intoxicated. Within minutes after taking over control of the car, Snowball lost control of the vehicle causing it to leave the roadway and crash into a tree. Snowball’s blood alcohol level was determined to be .234. All the passengers suffered injuries, although none were life-threatening.
Although this was Snowball’s first DUI offense, he was convicted of a felony because federal law makes driving under the influence while having a minor child present in the vehicle an offense punishable by an additional one year term of imprisonment over the standard penalties for a DUI conviction.
This case was investigated by the Bureau of Indian Affairs.
Wills Point Man Pleads Guilty to Possessing A Short Barrel ShotgunRead the Press Release
Department of Justice
Office of Public AffairsSearch warrant leads to a federal conviction
TYLER, Texas – A 36 year old Wills Point man has pleaded guilty to possessing a short barrel shotgun announced U.S. Attorney John M. Bales today.
Michael Jack Callaway pleaded guilty today in U.S. Magistrate Judith Guthrie’s court to the felony offense of possessing an unregistered short barrel shotgun. A federal grand jury indicted Callaway for the offense on November 7, 2012. Callaway admitted that on August 22, 2012, members of the Van Zandt County Drug Task Force found a short barrel shotgun among numerous rifles, pistols, and shotguns, as well as hundreds of rounds of ammunition, during the execution of a search warrant at his residence in Wills Point, Texas. Callaway must forfeit the seized weapons and ammunition to the United States Attorney’s Office.
Callaway is facing up to ten years in prison and a $250,000.00 fine. A sentencing hearing date has not been set.This case was investigated by the Van Zandt County Drug Task Force and the Bureau of Alcohol, Tobacco, Firearms, and Explosives, Tyler Office and prosecuted by Assistant U.S. Attorney Jim Noble.
William Jesus Brandel-mena Pleads Guilty to Illegal Re-entryRead the Press Release
WILLIAM JESUS BRANDEL-MENA, age 34, a citizen of Honduras, pled guilty in federal court today before U. S. District Judge Susie Morgan to a one-count indictment charging him with illegal re-entry by a removed alien, announced U. S. Attorney Dana Boente.
According to court documents, BRANDEL admitted to being an alien who had previously been removed from the United States, was found in the United States, in Jefferson Parish, Louisiana on March 26, 2012, without having obtained consent from the Secretary of the Department of Homeland Security to reapply for admission to the United States.
The indictment charging BRANDEL with illegal re-entry also included a notice of sentencing enhancement based on his prior aggravated felony conviction. With the enhancement, the charge carries a maximum statutory penalty of twenty years imprisonment, a fine of $250,000, and three years of supervised release following any term of imprisonment. Sentencing for BRANDEL is scheduled for June 5, 2013 at 2:00 P.M.
The case was investigated as part of a United States Immigration and Customs Enforcement, Enforcement and Removal Operations (ICE) national operation known as Operation Cross Check, which targeted fugitive aliens. ICE was assisted in this investigation by the Kenner Police Department. The case is being prosecuted by Special Assistant U. S. Attorney Robert Weir and Assistant U. S. Attorney Jon Maestri.
(Download Factual Basis )
West Tennessee Drug Round-Up Nets 11 on Federal Trafficking ViolationsRead the Press Release
Henderson, Decatur, Benton, and Madison counties following indictments for federal drug trafficking violations, announced U.S. Attorney Edward L. Stanton III.
The indictments were returned by a federal grand jury in Jackson on February 19, 2013, but remained under seal until today’s arrests. Each indictment contained counts alleging violations of the Controlled Substances Act (CSA).
The suspects arrested during the operation were:
• Thomas Arnold, 46, of Benton County
• Jason Blackstock, 30, of Henderson County
• Monica Bruce, 37, of Benton County
• Jerry Evans, 69, of Decatur County
• Peggy Gullett, 46, of Henderson County
• Teresa McCoy, 43, of Decatur County
• James Nolen, 47, of Henderson County
• Billie Pearcy, 68, of Decatur County
• Karen Pepper, 37, of Madison County
• Bruce Rosson, 29, of Decatur County
• Freddy Webb, 51, of Henderson County
A twelfth suspect, Elizabeth Little, 47, of Decatur County, was out of state and is making arrangements to turn herself in to authorities. In addition to the arrests, law enforcement officials seized illicit narcotics, U.S. currency, and drug paraphernalia. At least 10 firearms were also seized, including handguns and long guns.
The charges in the indictments stem from the illegal activity of possessing and distributing methamphetamine. Each of the 12 suspects was charged with unlawfully and knowingly possessing with intent to distribute a mixture and substance containing a detectable amount of methamphetamine, a Schedule II controlled substance. This charge is punishable as follows:No Prior Felony Drug Trafficking Convictions
# # # #
o Up to 20 years imprisonment
o A fine of up to $1,000,000
o Up to three years supervised release
Prior Felony Drug Trafficking Convictions
o Up to 30 years imprisonment
o A fine of up to $2,000,000
o Up to six years supervised release
The case was investigated by the Bureau of Alcohol, Tobacco and Firearms; FBI Memphis, Jackson Resident Agency; Tennessee Bureau of Investigation; Tennessee Highway Patrol; Henderson County Sheriff’s Department; Lexington Police Department; and the 24th Judicial District Drug Task Force. The case is being prosecuted by Assistant United States Attorney Matt Wilson on behalf of the government.
The charges and allegations contained in the indictment are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Vanderbilt Woman Pleads Guilty to Defrauding Sprint CommunicationsRead the Press Release
PITTSBURGH, Pa. - A resident of Vanderbilt, Pa., pleaded guilty in federal court to a charge of mail fraud, United States Attorney David J. Hickton announced today.
Susan Rowan, 39, pleaded guilty to one count before United States District Judge David S. Cercone.
In connection with the guilty plea, the court was advised that Rowan defrauded Sprint Communications by impersonating a rodeo star. After receiving shipments of hundreds of cellular telephones under the pretense that they were for her fictitious company, she would use them for herself and provide them to members of her family.
Judge Cercone scheduled sentencing for July 2, 2013 at 10:30 a.m. The law provides for a total sentence of not more than 20 years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the criminal history, if any, of the defendant.
Pending sentencing, the court continued Rowan on bond.
Assistant United States Attorney James T. Kitchen is prosecuting this case on behalf of the government.
The United States Secret Service conducted the investigation that led to the prosecution of Rowan.
Two Women Plead Guilty to Fraud and Money Laundering Charges for Nevada Medicaid Fraud SchemeRead the Press Release
RENO, Nev. – Two women have pleaded guilty to federal health care fraud and money laundering charges for defrauding the Nevada Medicaid program of approximately $1 million, announced Daniel G. Bogden, United States Attorney for the District of Nevada.
Susan Hill, 65, of Las Vegas, and Cassandra Little, 48, of Reno, pleaded guilty on Wednesday, March 6, 2013, before U.S. District Judge Howard D. McKibben in Reno. Hill pleaded guilty to one count of health care fraud and one count of money laundering. Little pleaded guilty to 28 counts of health care fraud and 10 counts of money laundering.
“The U.S. Attorney’s Office and U.S. Department of Justice will vigorously prosecute persons who cheat and steal from federally-funded programs,” said U.S. Attorney Bogden. “Everyone suffers when programs designed to help persons in need are defrauded.”
“The acceptance of guilt by Ms. Hill and Ms. Little is the first step prior to them facing sentencing for these crimes,” said Nevada Attorney General Catherine Cortez Masto. “This office will make a strong argument at sentencing to ensure that justice is served. The fraud perpetrated by both Ms. Hill and by Ms. Little spanned a number of years and involved Medicaid monies being paid out for services not provided.”
According to the court records, from about January 2007 to January 2011, Hill and Little defrauded the Nevada Medicaid program of approximately $1 million by fraudulently billing for expensive therapy-related services such as psychosocial rehabilitation and basic skills training which were never provided. To execute their scheme, Hill and Little formed a company, the Hill/Little LLC, and entered into a contract with Nevada Medicaid to provide health care services to children who were eligible for Medicaid. Hill was the president of the LLC. Little, a PhD and licensed social worker, was to provide the clinical services to the children. Hill and Little then created a program to obtain aid for the parents of the children who were eligible to receive the Medicaid funding; however, the program was not authorized or allowed under their Medicaid contract with the state. Hill recruited parents and guardians to provide services to their own children following minimal training provided by Hill/Little LLC. The services were nothing more than what parents normally do without reimbursement. Hill/Little LLC then billed Medicaid $8,000 per month for each child, using a billing code which was only authorized for services that could have been provided by Little, the licensed social worker. Hill/Little kept $5,000 per month for each child and paid each parent/guardian approximately $3,000. The parents/guardians reported that their children received no services from Hill or Little, and none of the services billed by Hill/Little from January 2007 to January 2011 were ever provided. Using this scheme, Hill and Little unlawfully received approximately $1 million from Medicaid for services they did not provide.
Hill and Little face up to 10 years in prison and a $250,000 fine on the health care fraud charges and up to 20 years in prison and a $500,000 fine on the money laundering charges. They are scheduled to be sentenced on July 23, 2013, beginning at 9:30 a.m. in Reno.
The case was investigated by the State of Nevada Medicaid Fraud Control Unit, the State of Nevada Attorney General’s Office, and IRS Criminal Investigation, and is being prosecuted by Assistant U.S. Attorney Ronald C. Rachow and Senior Deputy Attorney General Andrew Schulke, designated as a Special Assistant U.S. Attorney, with assistance from the Nevada Attorney General’s Office.
This case was handled in connection with the President's Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys' offices and state and local partners, it's the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.StopFraud.gov.
Two Sentenced for Using Stolen Identities to Claim Millions in Fraudulent Income Tax RefundsRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
CINCINNATI – Tawanda Marimbire, 25, of Cincinnati was sentenced in U.S. District Court to 70 months in prison for his role in a scheme to use stolen identities to obtain at least $5 million in fraudulent tax refunds. Co-conspirator Kudzaishe Robert Bungu, 28, was sentenced to 27 months in prison.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, Mark Porter, Special Agent in Charge, U.S. Secret Service, and Kathy Enstrom, Special Agent in Charge, Internal Revenue Service Criminal Investigation, Cincinnati Field Office (IRS), announced the sentences handed down yesterday by Chief U.S. District Judge Susan Dlott.
In early 2012, the Secret Service and IRS began investigating a large ring of individuals around the Cincinnati community who were using stolen identities to file fraudulent income tax returns and then steal the fraudulent tax refunds. Members of the ring purchased stolen identities for thousands of actual taxpayers through illicit online forums and from accomplices. The undisputed head of the scheme was Kudzaiishe Marimbire, the brother of Tawanda Marimbire. Most of the stolen funds were laundered and sent to Zimbabwe.
On April 11, 2012, government agents executed a search at several locations. They seized numerous luxury cars, computers, and tax documents. They also found more than $1 million in cash and money orders in a storage locker used by the Marimbire ring. Several members of the group immediately fled the Cincinnati area. Kudzaiishe Marimbire, Hlomera Mabhande, Andrew Bere, and Julius Marimbire fled to Zimbabwe and are fugitives. Tawanda Marimbire was arrested days after the search as he attempted to cross the Canadian border with about $76,000 in cash. Johanes Tagarisa was eventually arrested in Atlanta months after the seven were indicted in September 2012. He pleaded guilty on December 10, 2013 to one count of conspiracy and is awaiting sentencing.
Tawanda Marimbire pleaded guilty on January 15, 2013 to one count of wire fraud. Bungu pleaded guilty on December 17, 2012 to one count of engaging in illegal monetary transactions.
“This case is a perfect example of the emerging problem with tax refunds obtained through the use of stolen identities,” U.S. Attorney Stewart said. “In 2012, around the same time that this case was investigated and indicted, the Department of Justice announced a new directive to fight this exact scheme, which was named ‘stolen identity refund fraud’ or ‘SIRF.’”
IRS Criminal Investigation Special Agent in Charge Kathy A. Enstrom said, “Individuals who commit refund fraud and identity theft of this magnitude and with this degree of trickery, dishonesty and deceit, deserve to be punished to the fullest extent of the law. IRS Criminal Investigation remains committed to the pursuit of refund fraud and identity theft, and together with our partners at the U.S. Attorney’s Office, we will hold those who engage in similar conduct accountable.”
Others charged as a result of the ongoing investigation include:
* Tinotende Madyira, 25, sold a list of stolen identities to Kudzaishe Marimbire. He pleaded guilty to identity theft and was sentenced to 12 months and 1 day of imprisonment.
• Liberty Matonhodze, 25, working for Bungu, he was involved in withdrawing the refunds from the debit cards at ATMs. He was sentenced to 12 months and 1 day of imprisonment, plus restitution of $120,000.
• Fitzgerald Chibamu, 36, was involved with Kudzaiishe Marimbire in the transfer of the stolen funds through his bank accounts to Zimbabwe. He has pleaded guilty and is awaiting sentencing.
• Charges are pending against Lameigo Mutongwiza and Zla Holder, indicted on November 6, 2013.U.S. Attorney Stewart commended the cooperative investigation by the Secret Service and IRS, as well as Assistant United States Attorney Timothy Mangan, who is representing the United States in this case.
###Two People from Mexico Indicted for LarcenyRead the Press Release
United States Attorney Brendan V. Johnson announced that Ismael Espinoza-Ortiz, a/k/a Misael Sereseres Ortega, age 37, and Alejandra Corral Madrid, age 26, both of Mexico, appeared before U.S. District Judge Roberto A. Lange on March 6, 2013 and pled guilty to the Indictment that charged them with Bank Larceny. The maximum penalty upon conviction is 10 years of imprisonment, a $250,000 fine, or both; 3 years of supervised release; an additional 2 years of supervised release upon revocation; and $100 to the Victim Assistance Fund. Restitution may be imposed.
The charge stems from an incident on November 5, 2012 wherein Sereseres Ortega and Corral Madrid entered the BankWest branch office in Pierre, South Dakota and Sereseres Ortega handed the bank teller $1,535 in small bills and requested the teller change the bills into larger ones. Corral Madrid stood next to Sereseres Ortega at the teller window and witnessed the interaction. While the teller walked several feet from her station to use a bill counting machine, Sereseres Ortega reached his left hand under the glass and stole property and money belonging to and in the care, custody and control, management and possession of BankWest in the amount of $2,070. After taking the property and money belonging to BankWest, Sereseres Ortega and Corral Madrid exited the bank and fled Pierre. They were arrested later that day in Campbell County, South Dakota.
Sereseres Ortega also pled guilty to the Indictment that charged him with Illegal Reentry after Deportation. The maximum penalty upon conviction is 10 years of imprisonment, a $250,000 fine, or both; 3 years of supervised release; an additional 2 years of supervised release upon revocation; and $100 to the Victim Assistance Fund.
That charge stems from incidents wherein Sereseres Ortega has previously been ordered to deport from the United States. He was ordered to deport to Mexico on June 18, 1995 and was deported on January 19, 1996 through El Paso, Texas. He was arrested by immigration officials on October 6, 1997 and was again removed to Mexico on October 9, 1997. He was arrested again by immigration officials on February 17, 2010 and deported to Mexico on February 23, 2010. At no time since his initial deportation in 1996, has Sereseres Ortega requested or been granted permission to reenter the United States.
The investigation was conducted by the Federal Bureau of Investigation and the Immigration and Customs Enforcement. Assistant U.S. Attorney Meghan N. Dilges is prosecuting the cases. Both defendants were remanded to the custody of the U.S. Marshal pending sentencing, which has been set for May 29, 2013.
Two Northern California Real Estate Investors Agree to Plead Guilty to Bid Rigging at Public Foreclosure AuctionsRead the Press Release
Two Northern California real estate investors have agreed to plead guilty for their role in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in Northern California, the Department of Justice announced.
Felony charges were filed today in the U.S. District Court for the Northern District of California in Oakland against Peter McDonough of Pleasanton, Calif., and Michael Renquist of Livermore, Calif.
Including today’s pleas, 29 individuals have pleaded guilty or agreed to plead guilty as a result of the department’s ongoing antitrust investigation into bid rigging and fraud at public real estate foreclosure auctions in Northern California.
According to court documents, for various lengths of time between November 2008 and January 2011, McDonough and Renquist conspired with others not to bid against one another, but instead designated a winning bidder to obtain selected properties at public real estate foreclosure auctions in Alameda County, Calif . McDonough and Renquist were also charged with a conspiracy to use the mail to carry out a scheme to fraudulently acquire title to selected Alameda County properties sold at public auctions, to make and receive payoffs and to divert money to co-conspirators that would have gone to mortgage holders and others by holding second, private auctions open only to members of the conspiracy. The department said that the selected properties were then awarded to the conspirators who submitted the highest bids in the second, private auctions. The private auctions often took place at or near the courthouse steps where the public auctions were held. Renquist was also charged with additional counts for his involvement in similar conduct in Contra Costa County, Calif.
“The conspirators suppressed competition and lined their pockets through fraudulent and collusive conduct at the expense of lenders and distressed homeowners,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “The Antitrust Division and its law enforcement partners at the FBI will continue to hold accountable individuals who subvert the competitive process at foreclosure auctions around the country.”
The department said that the primary purpose of the conspiracies was to suppress and restrain competition and to conceal payoffs in order to obtain selected real estate offered at Alameda and Contra Costa County public foreclosure auctions at non-competitive prices. When real estate properties are sold at these auctions, the proceeds are used to pay off the mortgage and other debt attached to the property, with remaining proceeds, if any, paid to the homeowner. According to court documents, the conspirators paid and received money that otherwise would have gone to pay off the mortgage and other holders of debt secured by the properties, and, in some cases, the defaulting homeowner.
“The FBI and the Antitrust Division continue to bring to justice those individuals who engage in fraudulent anticompetitive practices at foreclosure actions,” said David J. Johnson, FBI Special Agent in Charge of the San Francisco Field Office. “The foundation of our real estate market depends on fairness and transparency of all participants, and we are committed to working with our local and federal partners to ensure that conspirators are held accountable.”
A violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine for the Sherman Act charges may be increased to twice the gain derived from the crime or twice the loss suffered by the victims if either amount is greater than $1 million. A count of conspiracy to commit mail fraud carries a maximum sentence of 30 years in prison and a $1 million fine. The government can also seek to forfeit the proceeds earned from participating in the conspiracy to commit mail fraud.
The charges today are the latest filed by the department in its ongoing investigation into bid rigging and fraud at public real estate foreclosure auctions in San Francisco, San Mateo, Contra Costa and Alameda counties, Calif. These investigations are being conducted by the Antitrust Division’s San Francisco Office and the FBI’s San Francisco office. Anyone with information concerning bid rigging or frau d related to public real estate foreclosure auctions should contact the Antitrust Division’s San Francisco Field Office at 415-436-6660, visit www.justice.gov/atr/contact/newcase.htm, or call the FBI tip line at 415-553-7400.
Today’s case was done in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.StopFraud.gov.
**The fraud charge(s) referenced in this press release were subsequently dismissed on the government’s motion.**
Two Men Charged with Real Estate Investment Fraud SchemeRead the Press Release
NEWARK N.J. – Two men were arrested this morning and charged with engaging in a real estate investment fraud conspiracy that defrauded more than fifteen victims of approximately $5 million from 2009 to the present, U.S. Attorney Paul J. Fishman announced.
Paul Mancuso, 46, of Glen Rock, N.J., and Pasquale Stiso, a/k/a “Pat Stiso,” 52, of West Harrison, N.Y., are charged by Complaint with one count of conspiracy to commit wire fraud. They made their initial court appearances this afternoon before U.S. Magistrate Judge Madeline Cox Arleo in Newark federal Court. Stiso was released on bail. Mancuso was ordered detained, pending a bail hearing tomorrow.
According to the Complaint:
From 2009 through the present, Mancuso held himself out as a real estate investor, broker, and/or developer, as well as a “hard money” lender and broker of other various purported investments. Mancuso obtained from his victims substantial investments for various projects that, in fact, either did not exist at all, or in which Mancuso had no actual involvement. Stiso, a disbarred attorney, held himself out as an individual who was working with Mancuso on various purported projects. Some of the purported projects touted by Mancuso, Stiso, and/or their co-conspirators included investments in a phony ticket scam, the development of a pizzeria at a resort in the Bahamas, the development of a casino in Atlantic City, the development of a commercial shopping center, and the “flipping” of a piece of real estate in Matawan. Most, if not all, of Mancuso’s victims lost all or substantially all of the money they invested with him and his co-conspirators. Many of Mancuso’s victims have lost all or substantially all of their life savings in his various schemes to defraud.The Complaint also alleges that Mancuso and Stiso were heavily involved in illegal gambling pursuits, and that they both owe substantial sums of money to one of their bookmakers or “bookies” (referred to in the Complaint as “the Bookie”). Indeed, Mancuso paid the Bookie in excess of $600,000 from gambling losses in or around 2012, and defendant Mancuso still owes the Bookie approximately $500,000 from gambling losses.
The charge of wire fraud conspiracy carries a maximum potential penalty of 20 years in prison and a maximum fine of $250,000 or twice the gross gain or loss associated with the offense, whichever is greatest.
U.S. Attorney Fishman credited special agents of the Federal Bureau of Investigation, under the direction of Acting Special Agent in Charge David Velazquez; Special Agents of the Internal Revenue Service-Criminal Investigation, under the direction of Acting Special Agent in Charge Shantelle P. Kitchen; as well as Criminal Investigators of the U.S. Attorney’s Office for the investigation leading to today’s arrests.
The government is represented by Assistant U.S. Attorney Lisa M. Colone of the U.S. Attorney’s Office Criminal Division in Newark.
The charge and allegations in the Complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
13-109
Defense counsel:
Mancuso: Mary Frances Palisano, Esq., Newark, NJ (standing in for Lawrence Lustberg, Esq.)
Stiso: Max Di Fabio, Esq. White Plains, NYMancuso, Paul and Stiso, Pasquale Criminal Complaint
Two Fitchburg Men Convicted of Distributing CocaineRead the Press Release
BOSTON – Two Fitchburg men were convicted today in U.S. District Court in Worcester of conspiracy and multiple counts of distributing crack cocaine.
Shawn McWhorter a/k/a/ Kaeshaun, 39, and Junior Barclay a/k/a Mouse, 31, were convicted by a jury of multiple counts of distributing cocaine base (crack) and conspiracy to distribute cocaine base. United States District Judge Timothy S. Hillman scheduled sentencing for McWhorter on May 30, 2013, and Barclay on May 29, 2013. Defendants convicted under this statute are subject to serve a maximum of 40 years in prison, followed by five years of supervised release and a fine of $4 million.
During the four-day trial, evidence proved that McWhorter distributed crack cocaine on July 26, 2011, and that he and Barclay together conspired to and did distribute crack cocaine on August 5, 2011, and August 25, 2011. In January 2011, McWhorter and Barclay were arrested as part of Operation Red Wolf, a multi-agency investigation targeting gang members involved in drug dealing and firearms distribution in the Fitchburg area.
United States Attorney Carmen M. Ortiz; John J. Arvanitis, Special Agent in Charge of the Drug Enforcement Administration’s New England Field Division; Richard DesLauriers, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Fitchburg Police Chief Robert A. DeMoura; Webster Police Chief Timothy J. Bent; Gene Marquez, Acting Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives, Boston Field Division; and Colonel Timothy P. Alben, Superintendent of the Massachusetts State Police, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Cory Flashner and Mark Grady of Ortiz’s Worcester Branch Office.Two Defendants Plead Guilty in Manhattan Federal Court to Participating in $57.3 Million Fraud on Organization That Makes Reparations to Victims of Nazi PersecutionRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that POLINA STAROSELETSKY and ASYA GALINDO pled guilty today in Manhattan federal court to conspiring to defraud programs administered by the Conference on Jewish Material Claims Against Germany, Inc. (the “Claims Conference”), established to aid the survivors of Nazi persecution, out of more than $57 million. STAROSELETSKY was arrested in November 2010, and GALINDO was arrested in October 2011, as part of an ongoing investigation that has resulted in charges against a total of 31 defendants, 10 of whom were former Claims Conference employees, including a former director. STAROSELETSKY pled guilty before U.S. District Judge Thomas P. Griesa, and GALINDO pled guilty before U.S. Magistrate Judge Sarah Netburn.
Manhattan U.S. Attorney Preet Bharara said: “The sad drumbeat continues in this appalling, multi-million dollar fraud scheme against an organization dedicated to providing aid to victims of the Nazis, with 25 of the 31 defendants charged now having pled guilty. We will continue to aggressively prosecute each and every individual who allegedly played a role in this fraud, and we will not stop until justice is served.”
According to the Complaints and the Indictment filed in Manhattan federal court:
The Claims Conference, a not-for-profit organization which provides assistance to victims of Nazi persecution, supervises and administers several funds that make reparation payments to victims of the Nazis, including “the Hardship Fund” and “the Article 2 Fund,” both of which are funded by the German government. Applications for disbursements through these funds are processed by employees of the Claims Conference’s office in Manhattan, and the employees are supposed to confirm that the applicants meet the specific criteria for payments under the funds.
As part of the charged scheme, a network of individuals systematically defrauded the Article 2 Fund and Hardship Fund programs for over a decade. The Claims Conference first suspected the fraud in December 2009, and immediately reported their suspicions to law enforcement, which conducted a wide-reaching investigation.
The Hardship Fund pays a one-time payment of approximately $3,500 to victims of Nazi persecution who evacuated the cities in which they lived and were forced to become refugees. Members of the conspiracy submitted fraudulent applications for people who were not eligible. Many of the recipients of fraudulent funds were born after World War II, and at least one person was not even Jewish. Some members of the conspiracy recruited other individuals to provide identification documents, such as passports and birth certificates, which were then fraudulently altered and submitted to corrupt insiders at the Claims Conference, who then processed those applications. When the applicants received their compensation checks, they kept a portion of the money and passed the rest back up the chain.
From the investigation to date, the Claims Conference has determined that at least 3,839 Hardship Fund applications appear to be fraudulent. These applications resulted in a loss to the Hardship Fund of approximately $12.3 million.
The Article 2 Fund makes monthly payments of approximately $400 to survivors of Nazi persecution who make less than $16,000 per year, and either lived in hiding or under a false identity for at least 18 months; lived in a Jewish ghetto for 18 months; or were incarcerated for six months in a concentration camp or a forced labor camp. The fraud involved doctored identification documents in which the applicant’s date and place of birth had been changed. The fraud also involved more sophisticated deception, including altering documents that the Claims Conference obtained from outside sources to verify a person’s persecution by the Nazis. Some of the detailed descriptions of persecution in the fraudulent Article 2 Fund applications were completely fabricated.
From the investigation to date, the Claims Conference has determined that at least 1,112 Article 2 Fund cases it processed have been determined to be fraudulent. Those cases have resulted in a loss to the Claims Conference of approximately $45 million.
While employed as a caseworker in the Article 2 Fund program at the Claims Conference, STAROSELETSKY knowingly processed fraudulent applications in return for payments from her co-conspirators. In addition, after she was no longer employed by the Claims Conference, STAROSELETSKY passed materials, including identification documents, to a co-conspirator still employed at the Claims Conference to support fraudulent Hardship Fund applications.
GALINDO recruited individuals to provide identification documents that were subsequently used in connection with the preparation of fraudulent Hardship Fund and Article 2 Fund applications, in exchange for a portion of the money paid out to those applicants.
With today’s pleas, a total of 25 defendants charged in the scheme have pled guilty, including seven former Claims Conference employees. Charges remain pending against the remaining six defendants in the case, who are presumed innocent unless and until proven guilty.
STAROSELETSKY, 50, of Brooklyn, New York, and GALINDO, 73, of Sherman Oaks, California, each face a maximum sentence of 20 years in prison. STAROSELETSKY and GALINDO are scheduled to be sentenced by Judge Griesa on August 14 and August 27, 2013, respectively.
Mr. Bharara praised the investigative work of the Federal Bureau of Investigation (“FBI”). He also thanked the Claims Conference for bringing this matter to the FBI’s attention and for its extraordinary continued cooperation in this investigation, which he noted is ongoing.
This case is being handled by the Office’s Complex Frauds Unit. Assistant U.S. Attorney Christopher D. Frey and Special Assistant U.S. Attorney Rebecca Rohr are in charge of the prosecution.
U.S. v. Semen Domnitser, et al S1 Indictment