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12 April 2013
Keith Allan Devereaux Sentenced in U.S. District CourtRead the Press Release
The United States Attorney's Office announced that during a federal court session in Great Falls, on April 8, 2013, before U.S. District Judge Sam E. Haddon, KEITH ALLAN DEVEREAUX, a 35-year-old resident of Great Falls, was sentenced to a term of:
Prison: 78 months
Special Assessment: $100
Restitution: $3,480
Supervised Release: 3 years
DEVEREAUX was sentenced in connection with his guilty plea to aiding and abetting the crime of robbery affecting commerce.
In an Offer of Proof filed by Assistant U.S. Attorney Jessica A. Betley, the government stated it would have proved at trial the following:
On February 21, 2012, around 10:00 p.m., Great Falls Police were alerted to a robbery at the Eagles Lodge. It was reported that three men had robbed a female employee at gun point and then sprayed her in the face with pepper spray. Officers arrived to find the employee absolutely hysterical. She was sobbing and told officers she believed she was going to be shot during the robbery.
Officers began their investigation and found $3,961 had been stolen from the money drawers. The inside of the building also smelled of pepper spray so badly that the police called the Great Falls Fire and Rescue in order to aerate the room. Police interviewed the victim two days later because she was too upset to speak until that point.
According to the victim, the last customer left the bar around 9:30 p.m. Once the customer left, the victim began to clean the west end of the bar. She did not recall hearing anyone come inside, but heard a male voice tell her to turn around. The victim turned around to see three men who were all dressed in black hooded sweatshirts with their faces fairly covered. One of the men pointed a handgun at the victim and yelled, "where's the money?" She believed two of the men had handguns, but could not identify which ones possessed the guns. Another man pointed a gun at the victim and made her walk to the end of the bar. The victim heard banging and slamming, and eventually one man said, "you'll be okay," and sprayed her in the face with pepper spray. The victim struggled to breathe, found her phone, and ran outside to call police.
On February 23, 2012, Great Falls police received a tip that John Gopher, Alicia Arthur, Anthony Gregori, and DEVEREAUX may have been involved in the robbery. The tip reported Gopher had bragged that over $2,000 had been stolen in the robbery of the Eagles Lodge. The person also relayed that Gopher, Gregori, Arthur, and DEVEREAUX had traveled to Billings, but would soon be returning to Great Falls.
Detectives arrested DEVEREAUX after he returned to Great Falls. DEVEREAUX told police he had been in the same car with Gopher, Arthur, and Gregori on the night of the robbery. But that he had returned home at some point. DEVEREAUX did tell the police, however, that he had been with Gopher and Arthur when they devised a plan to rob the Eagles Lodge. DEVEREAUX said he participated in the planning of the robbery, and added the Eagles Lodge looked like a hospital or old person's home. Gopher and Arthur also told police that DEVEREAUX had participated in the robbery.
Gopher, Arthur, and Gregori pled guilty to federal charges and have been sentenced.
Because there is no parole in the federal system, the "truth in sentencing" guidelines mandate that DEVEREAUX will likely serve all of the time imposed by the court. In the federal system, DEVEREAUX does have the opportunity to earn a sentence reduction for "good behavior." However, this reduction will not exceed 15% of the overall sentence.
The investigation was conducted by a cooperative effort between the Great Falls Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Justice Department and Council of State Governments Identify States Cutting Correction Costs While Reducing Recidivism and Improving SafetyRead the Press Release
The Department of Justice and the Council of State Governments (CSG) highlight 17 states that have cut corrections costs while reducing recidivism and improving public safety. With funding from the Justice Department’s Bureau of Justice Assistance (BJA), staff from the CSG Justice Center – in partnership with the Pew Center on the States – worked with lawmakers, policymakers, and a wide range of justice system professionals and stakeholders from each state to identify crime and corrections trends and formulate strategies that would save money and improve safety.
Over the past 20 years, state spending on corrections has skyrocketed—from $12 billion in 1988 to more than $52 billion in 2011. Declining state revenues and other fiscal factors are straining many states’ criminal justice systems, often putting concerns about the bottom line in competition with public safety.
“Our nation pays a high price whenever our prisons and criminal justice systems fall short of delivering results that deter and punish crime, keep the American people safe, and ensure that those who pay their debts to society have the chance to become productive, law-abiding citizens,” said Attorney General Eric Holder. “These states have been able to achieve fundamental and positive reform because leaders from both sides of the aisle have come together to tackle these difficult issues. It is my hope that their success will be emulated by others across the country."
A new report, Lessons from the States: Reducing Recidivism and Curbing Corrections Costs Through Justice Reinvestment, summarizes the experiences of states participating in the Justice Reinvestment Initiative, an across-the-board analysis of statewide crime and corrections data designed to help officials redirect public funds from costly prison building projects to cost-effective programs aimed at ensuring greater public safety. Based on these analyses, the states have enacted legislation and implemented justice reinvestment policies which incentivize use of risk based decision making, increase services and support for victims, target grants to law enforcement and establish state wide standards and training for probation agencies.
According to the report, states are able to reach these goals when they:
1. Conduct a comprehensive analysis of crime, arrest, conviction, jail, prison, probation and parole data; 2. Engage diverse constituencies of elected and appointed leaders as well as criminal justice stakeholders; 3. Focus resources on individuals most likely to reoffend; 4. Reinvest taxpayer dollars in proven programs and strategies; 5. Strengthen community supervision by responding to violations swiftly, proportionately, and with approaches that are evidence-based; 6. And reward the performance of local agencies whose actions result in cost savings.
“We support states that are committed to taking a data-driven approach to lowering re-offense rates of people released from prison and jail,” said Denise E. O’Donnell, BJA Director. “This report serves as a reference for states that are looking to tackle this issue. It shows that evidence-based strategies can improve public safety and reduce recidivism, even in an era of reduced resources.”
“Through our Justice Reinvestment effort, we’re helping state leaders use data and research to wisely use scarce resources. This approach has shown that states don’t have to choose between safe communities and fiscal solvency. Both are possible,” said Office of Justice Programs (OJP) Acting Assistant Attorney General Mary Lou Leary.
The 17 states involved in the Justice Reinvestment Initiative are Arkansas, Delaware, Georgia, Hawaii, Kansas, Kentucky, Louisiana, Missouri, New Hampshire, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, South Dakota, and West Virginia.
Being smarter and tougher on crime through innovative prevention, intervention, enforcement and reentry programs is a Justice Department priority. That’s why President Obama’s budget request for fiscal year 2014, released Wednesday, includes $85 million for the Justice Reinvestment Initiative.To read the report, Lessons from the States: Reducing Recidivism and Curbing Corrections Costs Through Justice Reinvestment, or for more information on the Justice Reinvestment Initiative, please visit: www.justicereinvestment.org
OJP provides federal leadership in developing the nation's capacity to prevent and control crime, administer justice and assist victims. OJP has six components: the Bureau of Justice Assistance; the Bureau of Justice Statistics; the National Institute of Justice; the Office of Juvenile Justice and Delinquency Prevention; the Office for Victims of Crime; and the Office of Sex Offender Sentencing, Monitoring, Apprehending, Registering, and Tracking. More information about OJP can be found at http://www.ojp.gov.
Jury Finds Westlake Man Guilty of Meth and Gun Possession ChargesRead the Press Release
LAKE CHARLES, La. – United States Attorney Stephanie A. Finley announced today that a jury found Anthony Frederick “Tony” Giaimis, 48, of Westlake, La., guilty Wednesday of conspiring to distribute and of possessing with intent to distribute methamphetamine. The jury also found him guilty of one count felony weapon possession. District Judge Patricia Minaldi presided over the trial.
Giaimis’ trial started Monday and ended Wednesday with the jury returning the guilty verdict after deliberating for about 45 minutes. The jury found that Giaimis conspired to distribute more than 50 grams of pure methamphetamine, and that he possessed more than 5 grams of pure methamphetamine, which police found on Jan. 6, 2012, during a search of a marina owned by his mother, the Bridge Port Yacht club, where Giaimis was living. The jury heard testimony that during the dates of the conspiracy, Giaimis obtained more than 80 ounces of methamphetamine from two men in the Houston area, which he sold to people living in and around Calcasieu Parish. Police also found 14 firearms in various locations at the marina. Giaimis had been previously convicted of a felony in June 2011 in the 253rd District Court of Texas in Chambers County for possession with intent to deliver more than 200 grams of methamphetamine.
Because of his prior conviction, Giaimis faces a minimum of 20 years to life in prison, a fine of up to $20 million, and at least 10 years of supervised release for the conspiracy to distribute methamphetamine count; and 10 to 40 years in prison, an $8 million fine, and at least eight years of supervised release for the possession with intent to distribute methamphetamine count; and he faces 15 years to life in prison, a $250,000 fine, and five years of supervised release for possession of a firearm by a convicted felon.
Justin W. Brewer, 42, and Ricky Martinez, 43, both of Houston, Texas, were charged in the same indictment with Giaimis in August 2012. Giaimis’ trial was severed from that of his co-defendants April 4, 2013.
Brewer pleaded guilty Monday before District Judge Patricia Minaldi to possession with intent to distribute more than 50 grams of methamphetamine. According to the stipulated factual basis for the guilty plea, Brewer was arrested Dec. 28, 2011, after 51.1 grams of pure methamphetamine was found in the trunk of his car. An informant told authorities that Brewer was in the Westlake area and was transporting a large quantity of methamphetamine. A Westlake police officer pulled Brewer over for a traffic violation, and found a drug smoking pipe and other drug paraphernalia in the console of car, and a box containing methamphetamine in the trunk.
Brewer faces 10 years to life in prison, a fine of up to $10 million, and at least five years of supervised release for the methamphetamine count.
Martinez is set for trial May 13, 2013. He is charged with one count of conspiracy to distribute more than 50 grams of methamphetamine and one count of possession of more than 50 grams of methamphetamine with intent to distribute. Martinez is alleged to have taken part in a conspiracy to distribute the methamphetamine from January 2009 to February 2012. If convicted, Martinez will face 10 years to life in prison, a fine of up to $10 million, and at least five years of supervised release for each count.
“It took the work of informants, police, sheriff’s officers, and federal agents to bring the defendants in this drug distribution operation to justice,” Finley stated. “I want to thank all of those who put their time and lives on the line to remove harmful and illegal drugs from our streets.”
The Westlake Police Department, Calcasieu Parish Sheriff’s Office, Lake Charles Police Department, FBI Safe Streets Task Force, Combined Anti-drug Team(CAT) Task Force, and the Drug Enforcement Administration Laboratory conducted the investigation. Assistant U.S. Attorney Joseph T. Mickel is prosecuting the case.Jury Finds Title Manager Guilty in Mortgage Fraud SchemeRead the Press Release
PITTSBURGH, Pa. - After deliberating for seven hours, a federal jury of four men and eight women found Catherine Slane guilty of four counts of conspiracy and wire fraud, United States Attorney David J. Hickton announced today.
Slane, 53, of Tarentum, Pa., was tried before United States District Judge Nora Barry Fischer in Pittsburgh, Pa.
According to Assistant United States Attorney Brendan T. Conway, who prosecuted the case, the evidence presented at trial established that Slane was employed as the Senior Title Manager at First Olympic Settlement Services and specialized in closing residential real estate transactions.
Russell Goggin, who passed away prior to Indictment, operated a company called Triplex Properties, which was a company that purchased properties in distressed circumstances -- from estates or from people attempting to sell their homes themselves and not through a real estate broker. He would enter into contracts in which he agreed to purchase properties at certain prices. Normally, before the closing on that transaction, Goggin would then attempt to locate buyers for the properties. He would advertise the house as "rent-to-own" which attracted individuals who could not typically afford to buy home because of credit issues, lack of a down payment, or for some other reason.
Despite their economic circumstances, Goggin convinced the buyers to purchase the homes promising to make improvements on the homes and by claiming that they would not have to make any down payments associated with the purchases. Based on those misrepresentations, the buyers agreed to purchase the properties from Goggin for many times the values of the homes.
Goggin, working through a Peter Kamaras, a mortgage broker who operated Single Source Mortgage, obtained financing for the buyers the purchase the homes through a series of fraudulent representations and bogus document. In the loan application process, the misrepresentations included overstating the borrowers' incomes and assets. In addition, Goggin and Kamaras submitted fake documents to support those and other misrepresentations.
The closing documents reflected that the borrowers were making substantial down payments, and that Goggin was not getting any money from the transactions. The sales price reflected the price that the buyer agreed to pay Goggin for the home, and not the price that the seller agreed to sell the property to Goggin for. In addition, the closing documents reflected that the buyers were making substantial down payments associated with the purchase of the properties, when, in fact, they were not making any payments.
Catherine Slane was the co-conspirator who did the closings. In addition to the fraudulent closing documents, Slane also wired funds received from the lender to Goggin. Goggin would then use those funds to obtain a certified check that he would bring back to Slane after the closing falsely evidencing to the lender that the buyers made the down payments.None of this fraud, however, was possible without fraudulent appraisals that supported the fraudulently elevated sales price shown to the lenders. Sam Shaheen was the appraiser who provided the fraudulent appraisals. Both Shaheen and Kamaras previously pleaded guilty based on their roles in the conspiracy and are awaiting sentencing.
Judge Fischer scheduled sentencing for Slane for Aug. 9, 2013. The law provides for a total sentence of 80 years in prison, a fine of $1,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based on the seriousness of the offenses and the criminal history, if any, of the defendant.
The Mortgage Fraud Task Force conducted the investigation that led to the prosecution of Slane. The Mortgage Fraud Task Force is comprised of investigators from federal, state and local law enforcement agencies and others involved in the mortgage industry. Federal law enforcement agencies participating in the Mortgage Fraud Task Force include the Federal Bureau of Investigation; the Internal Revenue Service, Criminal Investigations; the United States Department of Housing and Urban Development, Office of Inspector General; the United States Postal Inspection Service; and the United States Secret Service. Other Mortgage Fraud Task Force members include the Allegheny County Sheriff's Office; the Pennsylvania Attorney General's Office, Bureau of Consumer Protection; the Pennsylvania Department of Banking; the Pennsylvania Department of State, Bureau of Enforcement and Investigation; and the United States Trustee's Office.
June Lee Wolverine Sentenced in U.S. District CourtRead the Press Release
The United States Attorney's Office announced that during a federal court session in Great Falls, on April 1, 2013, before U.S. District Judge Sam E. Haddon, JUNE LEE WOLVERINE, a 33-year-old resident of Browning, appeared for sentencing. WOLVERINE was sentenced to a term of:
Prison: 78 months
Special Assessment: $200
Supervised Release: 3 years
WOLVERINE was sentenced after a federal district court trial in which she was found guilty of assault resulting in serious bodily injury and assault with a dangerous weapon. At trial, the following evidence and testimony was presented to the jury.
On July 3, 2012, the victim in this case was at home asleep. WOLVERINE entered the residence, stabbed the victim with a twelve-inch butcher knife in the chest, and stabbed the victim again as he ran for help. When receiving help, the victim made various statements to neighbors and medical personnel about the circumstances of the stabbing.
The victim's testimony at trial was different than what he provided the FBI in July of 2012. He claimed at trial that he was the aggressor and that WOLVERINE was only acting in self-defense. WOLVERINE also testified. Her testimony was different than what she told the FBI in July of 2012.
After the jury convicted WOLVERINE of both counts in the indictment, the United States District Court directed the U.S. Attorney's Office to investigate and report about potential criminal charges against the victim and WOLVERINE for perjury and false statements to federal agents.
Assistant U.S. Attorney Ryan G. Weldon prosecuted the case for the United States.
Because there is no parole in the federal system, the "truth in sentencing" guidelines mandate that WOLVERINE will likely serve all of the time imposed by the court. In the federal system, WOLVERINE does have the opportunity to earn a sentence reduction for "good behavior." However, this reduction will not exceed 15% of the overall sentence.
The investigation was a cooperative effort between the Blackfeet Law Enforcement Services and the Federal Bureau of Investigation.
Informational: Federal Court ArraignmentsRead the Press Release
The United States Attorney's Office announced that during a federal court session in Great Falls, on April 9, 2013, before U.S. Magistrate Judge Keith Strong, the following individuals were arraigned:
DAVID MUSKRAT, a 35-year-old resident of Poplar, appeared on charges of first and second degree murder. He is currently detained. If convicted of these charges, MUSKRAT faces possible penalties of mandatory life in prison and a $250,000 fine. Assistant U.S. Attorney Laura B. Weiss is the prosecutor for the United States. The investigation was a cooperative effort between the Federal Bureau of Investigation and the Fort Peck Tribes Criminal Investigation Division.
CRESTON KINDNESS, a 30-year-old resident of Fort Hall, Idaho, appeared on charges of assault resulting in serious bodily injury, assault with a dangerous weapon, and use of a firearm during a crime of violence. He is currently detained. If convicted of these charges, KINDNESS faces possible penalties of a mandatory minimum of 5 years and could be sentenced to life, a $250,000 fine, and 5 years supervised release. Assistant U.S. Attorney Danna R. Jackson is the prosecutor for the United States. The investigation was conducted by the Federal Bureau of Investigation.
FREDDY WAYNE JIMENEZ, a 40-year-old resident of Browning, appeared on charges of (6) counts of assault resulting in serious bodily injury and (5) counts of assault with a dangerous weapon. He is currently detained. If convicted of these charges, JIMENEZ faces possible penalties of 10 years in prison, a $250,000 fine, and 3 years supervised release for each count. Assistant U.S. Attorney Ryan G. Weldon is the prosecutor for the United States. The investigation was conducted by the Federal Bureau of Investigation.
VERN THOMAS GARDIPEE, a 48-year-old resident of Box Elder, appeared on a charges of aggravated sexual abuse and sexual abuse of a minor. He is currently detained. If convicted of these charges, GARDIPEE faces possible penalties of a mandatory minimum of 30 years in prison and could be sentenced to life, a $250,000 fine, and 5 years supervised release. Assistant U.S. Attorney Danna R. Jackson is the prosecutor for the United States. The investigation was conducted by the Federal Bureau of Investigation.
C'ERRA DAWN CLARK, a resident of Poplar, appeared on a charge of assault resulting in serious bodily injury. She is currently detained. If convicted of this charge, CLARK faces possible penalties of 10 years in prison, a $250,000 fine, and 3 years supervised release. Assistant U.S. Attorney Laura B. Weiss is the prosecutor for the United States. The investigation was a cooperative effort between the Federal Bureau of Investigation and the Fort Peck Tribes Criminal Investigation Division.
JONATHAN JAMES HENDERSON, a 28-year-old resident of Great Falls, appeared on a charge of possession with the intent to distribute methamphetamine. He is currently detained. If convicted of this charge, HENDERSON faces possible penalties of a mandatory minimum of 5 years and could be sentenced to 40 years, a $5,000,000 fine, and 5 years supervised release. Assistant U.S. Attorney Bryan R. Whittaker is the prosecutor for the United States. The investigation was conducted by the Federal Bureau of Investigation.
WILMA JAMIE RAE HOYT, a 29-year-old resident of Browning, appeared on charges of conspiracy to possess with the intent to distribute methamphetamine, possession with the intent to distribute methamphetamine, and distribution of methamphetamine. She is currently detained. If convicted of these charges, HOYT faces possible penalties of a mandatory minimum of 5 years and could be sentenced to 40 years, a $5,000,000 fine, and 4 years supervised release on each of the first two charges, and 20 years, a $1,000,000 fine, and 3 years supervised release on the third charge. Assistant U.S. Attorney Ryan G. Weldon is the prosecutor for the United States. The investigation was conducted by the Federal Bureau of Investigation.
SERGIO ALEJANDRO LOPEZ, a 37-year-old resident of Portland, Oregon, appeared on charges of conspiracy to possess with the intent to distribute methamphetamine, possession with the intent to distribute methamphetamine, and (2) counts of distribution of methamphetamine. He is currently detained. If convicted of these charges, LOPEZ faces possible penalties of a mandatory minimum of 10 years and could be sentenced to life, a $4,000,000 fine, and 5 years supervised release on each of the first two charges, and a mandatory minimum of 5 years and could be sentenced to 40 years, a $4,000,000 fine, and 4 years supervised release on the last two charges. Assistant U.S. Attorney Joseph E. Thaggard is the prosecutor for the United States. The investigation was conducted by the DRUG ENFORCEMENT ADMINISTRATION.
The defendants pled not guilty to the charges.
The charge, an indictment, information or complaint, is merely an accusation and all persons named as defendants are presumed innocent until proven guilty. A pre-trial conference and a trial date will be set and the United States will be required to prove the allegations set forth in the indictment beyond a reasonable doubt.
Indictment Alleges Plot to Rob Drug Stash HouseRead the Press Release
Dwight Berry, 28, Antonio Ellis, 27, Jermau Johnston, 18, all of Philadelphia, and Aski Washington, 33, of Darby, are charged by indictment , filed yesterday, in a conspiracy to rob a drug dealer’s stash house, announced United States Attorney Zane David Memeger. The defendants are charged with conspiracy to commit Hobbs Act robbery, attempted Hobbs Act robbery, conspiracy to possess with the intent to distribute five kilograms or more of cocaine, attempted possession with intent to distribute five kilograms or more of cocaine, and carrying a firearm during and in relation to a crime of violence. Berry, Washington, and Ellis are also charged with possession of a firearm by a convicted felon.
According to the indictment, on March 13, 2013, after weeks of planning, the defendants met at a predetermined location in Philadelphia. Defendants Berry and Johnston got into the minivan of Person #1 armed with two loaded firearms and zip ties. They then drove to a convenience store to purchase gloves for Johnston to use in the robbery. Defendants Ellis and Washington followed in a separate car carrying gloves, a mask, a can of lighter fluid, a lighter, and an empty back pack. The defendants met with Person #2 and, with everyone present, discussed the plan to rob the stash house which they believed contained 10 kilos of cocaine and was guarded by two armed guards. They drove to a final meeting place before the robbery where law enforcement moved in before the defendants could carry out their plan.
If convicted of all charges, the defendants face a mandatory minimum sentence of 15 years in prison up to life imprisonment, a fine of up to $20 million, five years supervised release, and a $500 special assessment. In addition, Berry, Washington, and Ellis each face an additional $250,000 fine and an additional $100 special assessment.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, and is being prosecuted by Assistant United States Attorney Salvatore L. Astolfi.Click here to view the indictment
An Indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Husband and Wife Sentenced in Stolen Identity Tax Refund SchemeRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern district of Florida, José A. Gonzalez, Special Agent in Charge, Internal Revenue Service, Criminal Investigation Division (IRS-CID), Miami Field Office, Rafael P. Hernandez, Jr., Chief, North Miami Beach Police Department, announced that defendants Douglas Michael Young, a/k/a “Douglas Pierre,” 41, and his wife, Nicole Young, a/k/a “Nicole Pierre,” a/k/a Nicole Pierre Smith, 42, both of Miramar, were sentenced yesterday for their participation in a stolen identity tax refund scheme. Douglas Young was sentenced to 61 months’ imprisonment, followed by three years of supervised release. Nicole Young was sentenced to 54 months’ imprisonment, followed by three years of supervised release. In addition, the defendants were ordered to pay joint and several liability restitution in the amount of $849,052.87. Douglas and Nicole Young (the Youngs) had previously pled guilty to one count of conspiracy to steal government property, one count of theft of government property, and one count of aggravated identity theft.
On October 5, 2011, six (6) defendants were charged in a nine count indictment for their participation in a tax refund scheme that resulted in the submission of approximately $1,207,389.00 in fraudulent claims for refunds using the personal identification information of unknowing. Charged in the indictment were Douglas Young and Nicole Young, Jeffrey Andre Young, Jr., 31, and Ernest V. Charles, 37, both of Miami, and Joseph Bshara, 27, and Siham Benabdallah, 23, both of Miami Shores, Florida.
According to the indictment, the Youngs owned and operated two tax preparation companies, Supreme Tax and Young Professional Services, Inc. The Youngs would obtain identification information from unknowing victims and use their identification information without their authorization to file fraudulent refund claims. In furtherance of the scheme, the Youngs charged the unknowing victims a “fee” for their purported tax preparation services. The Youngs would deduct the “fee” from any tax refunds and would deposit the “fee” into bank accounts they controlled. The remainder of the refunds would be converted into personal checks that would be deposited into bank accounts controlled by co-defendants Ernest V. Charles, Joseph Bshara, and Siham Benabdallah. Defendant Jeffrey Andre Young, Jr. would deliver the personal checks to Joseph Bshara and Siham Benabdallah for deposit into the bank accounts that they controlled.
On April 9, 2013, co-defendant Jeffrey Andre Young, Jr was sentenced to 34 months imprisonment followed by three years of supervised release after having previously pled guilty to one count of theft of government property and one count of aggravated identity theft. On that same date, Siham Benabdallah, was sentenced to time served followed by supervised release of three years after having pled guilty to one count of theft of government property.
On January 29, 2013, co-defendant Joseph Bshara pled guilty to one count of theft of government property and one count of aggravated identity theft. Defendant Ernest V. Charles remains at large.
Mr. Ferrer commended the investigative efforts of the Identity Theft Tax Refund Strike Force, with special commendation to IRS-CI and the North Miami Beach Police Department. The case is being prosecuted by Assistant U.S. Attorney Kurt Lunkenheimer.
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.
Grove City Man Charged with Possessing Child PornographyRead the Press Release
PITTSBURGH, Pa. - A resident of Mercer County was indicted on Wednesday, April 3, 2013, by a federal grand jury in Pittsburgh on a charge of possession of material depicting the sexual exploitation of a minor, United States Attorney David J. Hickton announced today.
The one-count indictment named Joseph L. Bryer, 52, of Grove City, Pa., as the sole defendant.
According to the indictment, on or about Aug. 23, 2011, Bryer possessed visual depictions, namely, images and videos in computer graphics files, the production of which involved the use of minors engaging in sexually explicit conduct.
The law provides for a maximum total sentence of 10 years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Carolyn J. Bloch is prosecuting this case on behalf of the government.
Homeland Security Investigations - Immigration and Customs Enforcement, with assistance from the United States Secret Service, conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Greer, S.C. Husband and Wife Sentenced for Filing False Tax ReturnsRead the Press Release
SPARTANBURG, S.C. – A husband and wife from Greer, S.C. were sentenced on Thursday, April 11, 2013 for filing false tax returns, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina.
Jeannine A. Hammett, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI); David A. Thomas, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Columbia Division in South Carolina; and James Ward, Special Agent in Charge, Department of Homeland Security, Office of the Inspector General in Atlanta join U.S. Attorney Tompkins in making today’s announcement.
U.S. District Court Judge Mary G. Lewis sentenced Julie Greene Tucker, 52, of Greer to 33 months in prison, to be followed by three years of supervised release. Tucker’s husband, James Dean Tucker, 54, also of Greer, was sentenced to eight months of house arrest and five years of probation. The Tuckers were ordered to pay $191,049 restitution to IRS, jointly and severally. Julie Tucker was ordered to pay an additional $590,128 as restitution to her former employer.
“For approximately 15 months the Tuckers used stolen money to fund a luxurious lifestyle way above their means. Today’s sentence sends a clear message that my office will work with our law enforcement partners to hold accountable those who break the law and to ensure the only rewards crooks get are stiff penalties and prison sentences,” said U.S. Attorney Tompkins.
“The IRS fosters confidence in the American tax system through the prosecution and conviction of individuals who intentionally conceal income and evade taxes. We should not expect the honest taxpayer to foot the bill for those who hide income from the IRS,” stated Jeannine A. Hammett, Special Agent in Charge of the Charlotte Field Office.
“The Tuckers funded their lavish lifestyle of luxury cars and expensive vacations with embezzled money. The FBI and our law enforcement partners remain committed to holding those accountable who abuse their positions for their own personal profit,” said David A. Thomas, Special Agent in Charge of the Columbia Division of the FBI.
In November 2012, James and Julie Tucker pleaded guilty to a criminal bill of information charging them with two counts of filing false tax returns. In addition, Julie Tucker pleaded guilty to one count of wire fraud. According to filed court documents and yesterday’s sentencing hearing, from in or about 1996 through in or about July 2011, Julie Tucker was employed at Trendset, Inc. (“Trendset”), a freight audit business, located in Greenville, S.C. Her last position at Trendset was Director of Administration. Court records show that in that capacity, Julie Tucker had access to Trendset bank accounts and had the authority to write checks and initiate wire transfers from these accounts on behalf of Trendset. From April 1986 through July 2012, James Tucker was employed with the Department of Homeland Security and stationed in Greenville, S.C.
According to filed documents and court proceedings, beginning in or about 2010 and continuing until her resignation in July 2011, Julie Tucker embezzled money from Trendset bank accounts. Unbeknownst to Trendset, Julie Tucker used her access to the company’s bank accounts to wire money to her name and into accounts held jointly by her and her husband. Court records indicate that Julie Tucker also wired funds and wrote checks from these accounts to make direct payments on several automobile loans and a credit card in the couple’s name.
Based on filed court documents and statements made in court, Julie and James Tucker used the embezzled funds to perform major home renovations, purchase a second home, and buy three luxury vehicles for themselves and an additional vehicle for the daughter of a Trendset co-worker. Court records indicate that the couple joined a local country club where they hosted a lavish Christmas party for family and friends. The couple also used the embezzled funds to pay for several personal vacation trips. According to yesterday’s sentencing hearing, Julie Tucker also spent well over $100,000 in jewelry purchases. The couple failed to include taxable income derived from Julie Tucker’s embezzlement scheme in their joint tax 2010 and 2011 tax returns, court records show.
Court records indicate that James Tucker lied to co-workers when he was asked about the couple’s lifestyle improvements and spending. Court records indicate that James Tucker sometimes would say that the couple received the money from James Tucker’s father, after a profitable sale of Hormel stock. Other times, James Tucker would say his wife had received a big promotion at Trendset and that she was making a lot more money than he was, court records indicate.
Julie Tucker was ordered to self-report to the Federal Bureau of Prisons upon designation of a federal facility. Federal sentences are served without the possibility of parole.
The investigation was handled by the IRS, FBI, and DHS-OIG. The prosecution was handled by Assistant U.S. Attorney Don Gast, of the U.S. Attorney’s Office in Asheville.
Four Des Moines Area Defendants Plead Guilty in Connection with Mortgage FraudRead the Press Release
DES MOINES, IA – United States Attorney Nicholas A. Klinefeldt announced today that four individuals have plead guilty to offenses relating to mortgage fraud schemes.
On April 10, 2013, Jamie Bowers-Danielson, age 35, and Matthew Danielson, age 35, both of Ankeny, pled guilty to bank fraud, in connection with a mortgage fraud scheme to obtain a “free house” in Ankeny, Iowa.
According to the written plea agreement, Matthew Danielson provided false information, including misrepresenting his marital status as single, to the mortgage lender. The purpose of providing the false information was to obtain a mortgage despite his lack of credit worthiness and to deceive the lender into failing to obtain his wife, Jamie Bowers- Danielson’s, signature on the mortgage, which resulted in the mortgage being voided. Jamie Bowers-Danielson admitted that she submitted false documentation to the loan originator as part of the scheme.
Jamie Bowers-Danielson also pled guilty to conspiracy to commit bank fraud. Bowers- Danielson used her position as a loan originator to help herself, and others qualify for mortgage loans through fraudulent means. This included submitting false and misleading statements and documents to mortgage lenders and banks for the purpose of obtaining loans for herself and other borrowers for which they should have not qualified.
On April 12, 2013, Bobbi Jo Wojewoda, age 43, of Grimes, pled guilty to the same conspiracy to commit bank fraud count. Bobbi Jo Wojewoda used her position as an apprentice appraiser to prepare appraisals with inflated values to help herself, and others qualify for mortgage loans. Bobbi Jo Wojewoda also failed to disclose material conflicts of interest to the mortgage lender when she performed appraisals on her own home and homes where she was the real estate agent.
Wade Charles Wojewoda, age 45, of Grimes, pled guilty on April 12, 2013, to receipt of proceeds obtained under false pretenses, related to the purchase of his and his wife, Bobbi Jo Wojewoda’s, home in 2003.
All four individuals entered their pleas before Chief Judge James E. Gritzner of the United States District Court. Judge Gritzner scheduled a sentencing date of July 26, 2013, for Jamie Bowers-Danielson and Matt Danielson; and a sentencing date of July 31, 2013, for Bobbi Jo Wojewoda and Wade Charles Wojewoda. All four defendants remain released on conditions pending sentencing.
Conspiracy to commit bank fraud and bank fraud are punishable by a term of imprisonment of up to 30 years and a fine of up to $1 million. Receipt of proceeds obtained under false pretenses is punishable by a term of imprisonment of up to one year and a fine of up to $100,000.
This case was investigated by the Federal Bureau of Investigation and prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
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Former Student Pleads Guilty to Computer Hacking at University of Central MissouriRead the Press Release
KANSAS CITY, Mo. - Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a former student of the University of Central Missouri pleaded guilty in federal court today to his role in a computer hacking conspiracy.
Joseph A. Camp, 28, of Kansas City, Mo., pleaded guilty before U.S. District Judge Brian C. Wimes to the charge contained in a Nov. 18, 2010 federal indictment. Camp has been in state or federal custody since his prior arrest in a New York investigation in December 2009. Federal charges are still pending in the Western District of New York.
By pleading guilty today, Camp admitted that he participated in an unlawful computer hacking scheme at UCM from March 2009 to March 2010. Camp, who had been a student at UCM in the fall semester of 2009, conspired with Daniel J. Fowler, 23, of Kansas City, Mo., a student and community advisor at UCM. Fowler pleaded guilty to his role in the conspiracy on June 22, 2011 and awaits sentencing. In addition to the computer hacking conspiracy, Fowler also pleaded guilty to one count of computer intrusion causing damage (computer hacking).
Camp and Fowler gained unlawful and unauthorized access to the UCM computer network, which allowed them to view and download large databases of faculty, staff, alumni and student information. They were also able to transfer money to their student accounts and attempted to change grades.
Camp and Fowler developed a computer virus, which they used to infect UCM computers B including an attempt to infect the computer used by the university’s president. They used several strategies to infect computers, such as offering to show vacation photographs on a thumb drive that contained the virus. They successfully distracted and misled at least one UCM administrator and were able to use a thumb drive to download their virus onto his UCM computer. They monitored the administrator’s computer activity and captured his username and password. They used their remote access of this administrator’s computer to remotely turn on the webcam to watch and photograph the administrator sitting at his desk in his office and to download his e-mails. They also obtained the username and password of a residence hall director and used that information to exploit the university’s computer system to conduct financial transactions in an attempt to unlawfully credit their student accounts with UCM funds.
Camp and Fowler successfully used the identities of fellow students, along with their university computer network permissions, to gain access to various portions of the computer network to which they would otherwise not have access. This also enabled them to mask their activities and mislead university authorities as to the identities of those conducting the attacks on the computer network.
Camp and Fowler manually installed the virus on several UCM computers in public areas, such as computer labs and the library. Once the virus was successfully installed on a computer, Camp and Fowler could obtain remote access to the computer, capture a user’s keystrokes, download any of the user’s files and remotely turn on the user’s webcam to watch and photograph the user of the infected computer.
Camp also admitted that he and Fowler obtained access to the affidavit used in support of a search warrant on Camp’s room. Camp used the information in that affidavit to make posts on Facebook.com to communicate threats and harass potential witnesses against them.
Camp was arrested when he traveled to New York in December 2009 to meet another person in order to sell the lists of UCM personal information. He was transported to the Western District of Missouri after the grand jury returned the indictment on Nov. 18, 2010. According to the indictment, Camp offered to sell 90,000 identities to a person in New York for $35,000. After learning that Camp had been arrested in New York, Fowler encrypted and destroyed computer evidence that he thought could be used against him.
Under the terms of today’s plea agreement, Camp will be sentenced to three years in federal prison without parole and must pay $61,500 in restitution.
This case is being prosecuted by Assistant U.S. Attorney Matthew P. Wolesky. It was investigated by the University of Central Missouri Police Department and the FBI.Former Southern Illinois Resident Sentenced for Defrauding Federal Unemployment Insurance ProgramRead the Press Release
Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today that Cartemus London, 38, of Chicago, Illinois, formerly a resident of Southern Illinois, was sentenced in the United States District Court for the Southern District of Illinois for defrauding the unemployment insurance program. Following his plea of guilty on November 28, 2012, to a one-count indictment for Embezzlement of Public Funds, the District Court sentenced London to a 5 year term of probation, the first 9 months of which he must spend on home confinement. London also was ordered to pay $39,937.00 in restitution to the Illinois Department of Employment Security and to pay a $100 special assessment.
“Lying and cheating to receive unemployment compensation is a crime,” said United States Attorney Wigginton. “Those who defraud the unemployment insurance program undermine support for an important public program and hurt and insult every law-abiding citizen of Southern Illinois, particularly as public programs face economic crises. I will continue to place a high priority on pursuing those who steal from the United States Treasury.”
At the time of his guilty plea, London admitted to being employed by American Airlines between March 2009 and March 2011 while also filing for and receiving unemployment insurance benefits. In order to receive the benefits, London had to certify, approximately every two weeks, to the Illinois Department of Employment Security (IDES) that he was not working and that he was ready, willing, and able to work. He also had to verify that he was actively seeking work. London was supposed to inform IDES of any income he received during the certification period, but he did not report that he was employed and earning money, instead choosing to collect both wages and benefits simultaneously. Between March 2009 and March 2011, London collected $39,937.00 in employment insurance benefits to which he was not entitled.
This case was investigated by the U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, the United States Postal Inspection Service, and the Illinois Department of Employment Security. This case was prosecuted by Special Assistant United States Attorney Katherine L. Lewis.
Former Shaw Group Safety Manager at TVA Nuclear Sites Sentenced to 78 Months in Prison for Major Fraud Case Against the United StatesRead the Press Release
Injuries hidden to obtain over $2.5 million in safety bonuses
CHATTANOOGA, Tenn. – On Apr. 11, 2013, Walter Cardin, 55, of Metairie, La., was sentenced to serve 78 months in prison followed by two years of supervised release, by the Honorable Curtis L. Collier, U.S. District Judge. Cardin was convicted at trial in November 2012, after being charged by a federal grand jury with eight counts of major fraud against the Tennessee Valley Authority (TVA), an agency of the United States.
The indictment and subsequent conviction of Cardin was the result of a six-year investigation conducted by the TVA-Office of Inspector General (TVA-OIG). The trial revealed that Cardin, as safety manager for the Shaw Group (formerly Stone & Webster Construction) at TVA’s Brown’s Ferry Nuclear site in Athens, Ala., provided false and misleading information about injuries at that facility as well as TVA’s Sequoyah Nuclear site in Soddy Daisy, Tenn., and TVA’s Watts Bar Nuclear site near Spring City, Tenn. The Shaw Group had a contract with TVA to provide maintenance and modifications to the three facilities and to provide construction for the Brown’s Ferry Unit Number 1 reactor restart. Cardin generated false injury rates which were used by the Shaw Group to collect safety bonuses of over $2.5 million from TVA. As part of a civil agreement filed with the United States in 2008, the Shaw Group paid back twice the amount of the ill-gotten safety bonuses.
Cardin was convicted of providing the false information about injuries by underreporting their number and severity. The false information was generated at the three plants in 2004 and 2005, and at the Brown’s Ferry and Sequoyah plants in 2006. The evidence presented at trial encompassed over 80 injuries, including broken bones, torn ligaments, hernias, lacerations, and shoulder, back, and knee injuries that were not properly recorded by Cardin. Some employees testified that they were denied or delayed proper medical treatment as a result of Cardin’s fraud. Evidence showed that Cardin intentionally misrepresented or simply lied about how the injuries had occurred and how serious the injuries were.
Judge Collier imposed a more severe sentence for Cardin after he found that he had obstructed justice when he testified falsely during the trial. At trial Cardin denied intentionally misclassifying injuries, disputing the evidence to the contrary in the medical records and from injured employees. Cardin also denied knowing that safety bonuses were tied to his classifications of the injuries. Investigators found emails sent by Cardin with this information and additional information tying the safety bonuses to the injury rates in Cardin’s desk drawers. Judge Collier cited the twin aims of deterrence and retribution to justify Cardin’s sentence.
U.S. Attorney William C. Killian commended the efforts by the TVA-OIG investigators in the case who obtained and reviewed over 500,000 documents and interviewed hundreds of witnesses as part of the investigation. In addition to the monetary losses to TVA, U.S. Attorney Killian spoke of the other the consequences of the fraud stating, “The defendant’s practices affected the safety of the work environment of nuclear sites. They resulted in employees becoming more reluctant to report injuries, employers failing to address safety issues on the work sites, and employees working through medical conditions that created risks of additional injuries to themselves and others. We will continue to vigilantly guard against unsafe work environments, as well as waste, fraud, and abuse of government funds.”
This case was investigated by TVA-OIG. Assistant U.S. Attorneys Perry H. Piper and Gregg L. Sullivan represented the United States at trial.
Former Schneider Hospital CEO Charged with Tax FraudRead the Press Release
St. Thomas – United States Attorney Ronald W. Sharpe and Special Agent in Charge José A. Gonzalez, Internal Revenue Service, Criminal Investigation Division, announced the arrest and unsealing of a two-count indictment charging Rodney E. Miller with assisting and advising in the preparation and presentation of fraudulent income tax returns to the Virgin Islands Bureau of Internal Revenue (BIR) and the Internal Revenue Service (IRS). Miller, former CEO of the Schneider Regional Medical Center on St. Thomas, made his initial appearance in federal court Wednesday before South Carolina U.S. Magistrate Judge Bruce Hendricks, and was ordered to appear in the Virgin Islands on May 1, 2013.
According to the indictment, Miller aided and assisted in the preparation of his personal Individual
Income Tax Return, Form 1040, for calendar year 2006, which was filed with the BIR pursuant to Internal Revenue Code, Title 26, Section 932(c)(4). The indictment further alleges that Miller willfully filed his 2006 income tax return knowing that it was false and fraudulent as to a material matter. Specifically, Miller reported total income in the amount of $265,198.00, although he knew that his true total income was substantially more than the amount reported.The indictment further alleges that Miller willfully assisted and advised in the preparation and presentation to the IRS, of his personal income tax return, Form 1040, for calendar year 2007 knowing that the return contained materially false information. Specifically, Miller reported total income in the amount of $255,589.00, knowing that his true total income was substantially more than the amount reported.
The maximum statutory penalty for each of the two counts charged is three years in prison. An indictment is merely a formal charging document and is not evidence of guilt. Every defendant is presumed innocent until and unless found guilty.
This case is being investigated by the Internal Revenue Service, Criminal Investigation Division, and is being prosecuted by Assistant United States Attorney Kim L. Chisholm.
Former Mortgage Loan Officer Receives 27 Months in Prison for Role in $2.5 Million Fraud ConspiracyRead the Press Release
ALEXANDRIA, Va. – Daniel A. Vivas, 40, of Oklahoma City, Okla. was sentenced today to 27 months in prison for his role in a bank fraud conspiracy that caused more than $2.5 million in losses to various banks and mortgage lenders.
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; Jon T. Rymer, Inspector General of the Federal Deposit Insurance Corporation (FDIC); and John P. Torres, Special Agent in Charge for ICE’s Homeland Security Investigations (HSI) in Washington, D.C., made the announcement after sentencing by United States District Judge Liam O’Grady.
Vivas pleaded guilty on January 18, 2013, to conspiracy to commit bank fraud. According to court documents, in 2005 and 2006, Vivas was a loan officer for Home Savings & Trust Mortgage at its office in Fairfax, Virginia. As a loan officer, Vivas was responsible for “originating” loans, that is, generating business for Home Savings by marketing its residential loan products and by taking residential mortgage loan applications from borrowers who were seeking a loan.
As part of a scheme, Vivas and his co-conspirators submitted fraudulent “tax preparer letters” to support false statements in Vivas’s clients’ loan applications that falsely represented the borrowers’ employment, income, and/or assets. The tax preparer letters falsely claimed that a tax professional had prepared the borrower’s tax returns for the preceding two tax years, that the borrower was self-employed, and that the borrower owned his own business. He would also fill in the name of a fictitious business entity supposedly owned by the borrowers.
In most cases, Vivas and his co-conspirators gave these false statements and documents to the lenders without their clients’ knowledge. When the borrowers were unable to sustain the monthly payments on their loans, the consequence for many was foreclosure and eviction.
Vivas is the latest defendant to be sentenced in a series of prosecutions of the conspirators. Four tax professionals have also been found guilty, including Osvaldo A. Mercado, the owner of Union Hispana Multiservices, a large tax preparation service operating in Northern Virginia. On June 8, 2012, Mercado was sentenced to 24 months in prison.
This ongoing investigation is being conducted by the FBI’s Washington Field Office, the FDIC Office of Inspector General, and ICE-HSI. Assistant United States Attorney James P. Gillis is prosecuting the case on behalf of the United States.
A copy of this press release may be found on the website of the United States Attorney's Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.Former Mcginn, Smith & Co., Inc. Senior Managing Director SentencedRead the Press Release
ALBANY, N.Y.—Matthew Rogers, of Miami, Florida, a citizen of the United Kingdom and a resident alien of the United States, who worked for McGinn, Smith & Co., Inc. as a senior managing director from 2007 until 2009, was sentenced today to one year of probation and ordered to pay a $10,000 fine by United States District Judge David N. Hurd, announced United States Attorney Richard S. Hartunian, Toni M. Weirauch, Special Agent-in-Charge, Internal Revenue Service, Criminal Investigation, New York Field Office, and Andrew W. Vale, Special-Agent-in-Charge, Federal Bureau of Investigation, Albany Division. The sentence follows Rogers’ November 29, 2011 guilty plea to filing a false income tax return related to his failure to declare $948,000 in fees that he had received between 2006 and 2009 in connection with private placement offerings sold by McGinn, Smith & Co., Inc.
In 2009, Rogers executed backdated promissory notes regarding some of the transactions to make it appear that they were loans. Rogers knew that these backdated promissory notes would be submitted to FINRA. In addition, on his 2009 return, Rogers falsely declared that $873,000 of the $948,000 was income in 2009 for “forgiveness of indebtedness” when he knew that this was false because the money was never a loan and was received over several tax years. Rogers admitted the following details in connection with his guilty plea:
The 2006 Fees
On September 29, 2006, Timothy M. McGinn, David L. Smith, and Matthew Rogers formed TDM Cable Funding LLC. That same day, TDM Cable Funding LLC purchased $2.6 million of cable contracts related to two Florida housing developments. The McGinn, Smith & Co., Inc. broker-dealer then raised over $3.5 million from investors seeking to invest in those cable contracts. In 2006, Rogers received $385,000 in fees from TDM Cable Funding LLC in connection with the September 2006 offering. His partners, Timothy M. McGinn and David L. Smith, received similar fees.
On January 10, 2007, Rogers submitted a personal financial statement to Mercantile Bank in Boca Raton, Florida requiring him to list all sources of income and all liabilities for 2006. Rogers concealed the $385,000 in fees that he had received in 2006 by failing to include it as income that he had received in 2006. Rogers also did not list the fees as “loans.”
In the fall of 2007, when Rogers gathered materials to prepare his 2006 federal income tax return, he called Timothy M. McGinn who told him that the $385,000 of fees were “loans,” and said “that’s the way it is.”
On October 15, 2007, Rogers signed the 2006 joint U.S. Individual Income Tax Return prepared for himself and his wife under the penalty of perjury knowing that the total income of $196,566 reported on line 22 of the return was false because it did not reflect the $385,000 in fees that he had received. The return was filed on October 18, 2007 at the Atlanta, Georgia service center.
The 2007 Fees and Return
During 2007, Rogers received $278,000 in fees in connection with three McGinn, Smith & Co., Inc. offerings which raised more than $10 million from investors.
On November 13, 2008, Rogers filed the joint 2007 U.S. Individual Income Tax Return prepared for himself and his wife under the penalty of perjury knowing that the total income reported was false because it did not reflect the $278,000 in fees that he had received in 2007.
The 2008 Fees and Return
During 2008, Rogers received $285,000 in fees in connection with a McGinn, Smith & Co., Inc. offering that raised more than $3 million from investors.
On January 20, 2009, Rogers submitted a personal financial statement to Mercantile Bank in Boca Raton, Florida requiring him to list all sources of income and all liabilities for 2008. Rogers concealed the $285,000 in fees that he had received in 2008 by failing to include it as income that he had received in 2008. Rogers also did not list the fees as “loans.”
On October 19, 2009, Rogers filed the joint 2008 U.S. Individual Income Tax Return prepared for himself and his wife under the penalty of perjury knowing that the total income reported was false because it did not reflect the $285,000 in fees that he had received.
The 2009 Fees
On June 10, 2009, Rogers received $25,000 in fees in connection with a McGinn, Smith & Co., Inc. offering which raised more than $1 million from investors.
The Execution of Backdated Promissory Notes
In November 2009, Timothy M. McGinn pressured Rogers to sign promissory notes in connection with several of the fee transactions involving TDM Cable Funding LLC. When Rogers learned about the promissory notes, he called McGinn. McGinn told Rogers that FINRA needed the notes and that Rogers had to sign them. Rogers, who did not want to be required to repay the fees that he had received, obtained a November 13, 2009 letter from McGinn, as managing member of TDM Cable Funding LLC, stating that the “debt” related to those fee transactions would be “forgiven” over four years. After receiving this fraudulent “forgiveness-of-debt” letter, Rogers executed the promissory notes. The only date on the promissory notes was the date of each transaction. Although Rogers knew that the promissory notes would be provided to FINRA, Rogers did not date his signature, and the promissory notes did not reveal that Rogers signed them in November 2009, more than two years after the transactions had actually occurred.
The 2009 Return Falsely Declaring $873,000 as “Forgiveness of Indebtedness”
On October 15, 2010, after Rogers became aware of the federal criminal investigation, Rogers filed his 2009 income tax return declaring $873,000 of the $948,000 of fees that he had received from 2006 through 2008 as income. Rogers falsely described the $873,000 as “forgiveness of indebtedness” despite knowing the fees had never been a loan and that he had an express agreement with McGinn that he would not have to repay the fees.
The total amount of loss is the tax loss resulting from Rogers's failure to declare the $948,000 that he received in fees.
The investigation was conducted by the Criminal Investigation Division of the Internal Revenue Service and the Federal Bureau of Investigation. The case is being prosecuted by Assistant United States Attorneys Elizabeth C. Coombe, Richard D. Belliss, and Wayne A. Myers of the United States Attorney’s Office for the Northern District of New York.
LOCAL CONTACT: Elizabeth C. Coombe
Assistant U.S. Attorney
Tel: (518) 431-0247Former Deputy Sheriff Pleads Guilty to Obstructing A Civil Rights InvestigationRead the Press Release
ROME, Ga. – Joshua L. Greeson pleaded guilty today to obstructing a pending public corruption and civil rights investigation by tampering with a witness while employed as a deputy with the Murray County Sheriff’s Department.
“The criminal justice system is based on the premise that police officers must be honest and truthful above all,” said United States Attorney Sally Quillian Yates. “Mr. Greeson wasn’t and such conduct cannot stand. This investigation is continuing and we will follow the evidence wherever it leads.”"Such conduct as described in this case cannot be tolerated and the FBI will continue to identify, investigate, and bring forward for prosecution those officers who betray the public's trust," said Mark F. Giuliano, Special Agent in Charge, FBI Atlanta Field Office
“Those who are entrusted with upholding and enforcing the law must have honesty and integrity,” said GBI Director Vernon M. Keenan. “The GBI will continue to work with our federal law enforcement counterparts to insure those in a position of trust are held accountable.”
According to United States Attorney Yates, the charges and other information presented in court, in August 2012, Greeson, was employed with the Murray County Sheriff’s Office as a Deputy Sheriff. On August 14, 2012, he conducted a traffic stop of a white Dodge vehicle. During the traffic stop, Greeson found methamphetamine in a metal can hidden under the tire well of the car. After locating the drugs, Greeson arrested the driver and the owner of the vehicle – who at the time was the front seat passenger.
On August 15, 2012, Greeson met with a state court judge to obtain a search warrant for the urine of the owner of the white Dodge vehicle. During the meeting, Greeson stated to the judge, in sum and substance, that he had not received any prior information about the white Dodge vehicle prior to stopping it.
Shortly thereafter, the Georgia Bureau of Investigation (“GBI”) received information that the drugs had been planted on the vehicle by another individual in an attempt to falsely inculpate the owner of the white Dodge. As a result of that information, the local district attorney’s office dismissed the charges against the owner of the white Dodge.
GBI agents interviewed Greeson on August 23, 2012, in connection with an investigation of public corruption and civil rights violations. During the interview, Greeson again falsely stated to the GBI agents that he had not received any information about the white Dodge car before he pulled it over.
Greeson met with the GBI for a second interview on August 27, 2012. During this meeting, Greeson admitted to the GBI that he had lied – admitted that prior to stopping the white Dodge he had, in fact, been provided with information that the vehicle was supposed to be carrying drugs.
On August 29, 2012, Greeson was terminated from the Murray County Sheriff’s Office.
Greeson, 26, of Murray County, Georgia, could receive a maximum sentence of 20 years in prison and a fine of up to $250,000. However, in determining the actual sentence, the Court will consider the United States Sentencing Guidelines, which are not binding but provide appropriate sentencing ranges for most offenders.
Sentencing is scheduled for June 28, 2013, at 1:30 p.m. before United States District Judge Harold L. Murphy.
This case is being investigated by Special Agents of the Federal Bureau of Investigation and the Georgia Bureau of Investigation.
Assistant United States Attorneys Jeffrey W. Davis and Michael Herskowitz are prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the HomePage for the U.S. Attorney's Office for the Northern District of Georgia is www.justice.gov/usao/gan.
Former Credit Suisse Managing Director Pleads Guilty in Connection with Scheme to Hide Losses in Mortgage-Backed Securities Trading BookRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, today announced the guilty plea of KAREEM SERAGELDIN, the former Managing Director/Global Head of Structured Credit in the Investment Banking Division of Credit Suisse Group (“Credit Suisse”). SERAGELDIN was extradited from the United Kingdom on Friday, April 5, 2013, to face charges that he fraudulently inflated the prices of asset-backed bonds in Credit Suisse’s trading book in late 2007 and early 2008. The bonds were comprised of subprime residential mortgage backed securities (“RMBS”) and commercial mortgage backed securities (“CMBS”). Once discovered, SERAGELDIN’s manipulation of these bond prices contributed to Credit Suisse taking a $2.65 billion write-down of its 2007 year-end financial result. He pled guilty to conspiring to falsify the books and records of Credit Suisse before U.S. District Judge Alvin K. Hellerstein.
As a result of his manipulation, SERAGELDIN was able to secure significant year-end bonuses since the trading book’s profitability was one of the factors in determining bonus amounts. His 2007 bonus was over $1.7 million and his Incentive Share Unit Award was more than $5.2 million. The latter was rescinded after Credit Suisse discovered the alleged fraud. SERAGELDIN’s co-conspirators, David Higgs and Salmaan Siddiqui, previously pled guilty and are cooperating with the government’s investigation.
Manhattan U.S. Attorney Preet Bharara said: “While the real estate market was imploding and the financial crisis emerging, Kareem Serageldin and his co-conspirators concealed significant subprime mortgage-related losses in order to secure multi-million dollar paydays. Serageldin’s extradition to face charges for his role in this conspiracy and the guilty plea he entered today demonstrate, once again, that no one is above the law.”
The following allegations are based on the Indictment filed against SERAGELDIN and the Informations to which Higgs and Siddiqui pled guilty:
SERAGELDIN was employed at Credit Suisse as a Managing Director. He held the position of Global Head of the Structured Credit Group in the Securities Department of Credit Suisse’s Investment Banking Division, and divided his time between the company’s New York and London offices. The Structured Credit Group held and traded ABS (“Asset Backed Security”) cash bonds, which included RMBS and CMBS. SERAGELDIN oversaw and
managed a number of trading books, including a trading book known as “ABN1.” The ABN1 book was comprised primarily of several thousand individual long and short subprime-related positions, and also included other securities. The long positions consisted of, among other things, various types of cash securities, including AAA-rated and non-AAA-rated cash bonds. Until March 2008, ABN1 had a net asset value of approximately $5.35 billion, approximately $3.71 billion of which consisted of ABS cash bonds, including RMBS and CMBS positions.
Pricing of Mortgage-Backed Securities
Credit Suisse traders were required at all relevant times to price securities they held at their fair value, that is, on a “mark-to-market” basis, which was determined by reference to either the current market price of the asset or liability, or the current price for a similar asset or liability. In the absence of a liquid market, Credit Suisse traders were required to look to other indicia in order to determine the fair value of the assets on their books. During this time, the ABX Index served as a benchmark for certain securities backed by home loans. It was widely understood within Credit Suisse that traders were to consult the corresponding ABX indices when pricing RMBS bonds and related products.
The Bond Pricing Scheme
The deterioration throughout 2007 of the real estate market in the United States, including the subprime housing market, led to significant reductions in valuations of mortgage-backed securities. As mortgage delinquencies increased across the country, the value of the securities backed by these mortgages decreased and the market for them became increasingly illiquid.
By late November 2007, SERAGELDIN was aware that the market for mortgage-backed securities had declined enormously. On November 28, 2007, SERAGELDIN told Higgs, Siddiqui, and a co-conspirator (“CC-1”) that “the housing market [was] going down the tubes” and that they had to “find a way to sell these bonds,” i.e., mortgage-backed bonds in ABN1. As SERAGELDIN recognized, “[t]hose bonds are going to start trading worse than the [ABX] Index.” SERAGELDIN and his co-conspirators did not sell the bonds because the market prices for the bonds were substantially below the inflated value at which they marked the bonds.
From August 2007 through February 2008, SERAGELDIN, Higgs, Siddiqui, and their co-conspirators artificially increased the price of bonds in order to create the false appearance of profitability in the ABN1 trading book. Specifically, SERAGELDIN directed Higgs on numerous occasions to reach specific Profit & Loss (“P&L”) targets on a daily and month-end basis. Higgs, in turn, instructed Siddiqui and another unnamed co-conspirator to mark the books so as to achieve the particular P&L targets specified by SERAGELDIN, rather than to reflect the fair value of the bonds.
In order to reach specific P&L targets, SERAGELDIN, Higgs, Siddiqui, and their co-conspirators marked up bond prices without regard to fair market value; improperly offset mark-downs with gains realized in other parts of the book to avoid a P&L impact; and engaged in the practice of “reversing out,” which involved freezing marks at a favorable point in time to achieve a desired P&L result. In addition, as part of their scheme, SERAGELDIN, Higgs, Siddiqui, and their co-conspirators concealed their manipulation of bond marks from internal control personnel within Credit Suisse who were charged with independently ensuring the accuracy of bond prices, and they devised other ways to avoid detection of their fraud.
Credit Suisse’s ABN1 Trading Book Was Falsely Inflated as a Result of the Scheme
As a result of the scheme, there was a growing disparity between the values ascribed to the marks in the ABN1 book and the available external benchmarks, such as the ABX Index. From August 2007 through the end of that year, as ABX Index prices fell, bond prices in ABN1 that were supposed to reflect the ABX Index remained effectively stable, thereby giving the false impression to Credit Suisse senior management that the ABN1 book was profitable. On one occasion in January 2008, SERAGELDIN expressed concern to Higgs that the overpriced bonds were at risk of being discovered: “We should mark these down because someone is going to spot this,” he said.
The February 2008 Mark-Down
On March 20, 2008, Credit Suisse issued a press release which announced completion of its internal review and stated that the fair value reduction, or write-down, of the ABS positions – which included but was not limited to the ABNl book – was approximately $2.65 billion. Approximately $540 million of this write-down was attributable to the ABN1 trading book and included ABS cash bonds for the fourth quarter 2007 that SERAGELDIN manipulated and inflated in connection with his scheme.
SERAGELDIN, 39, a citizen of the United Kingdom, faces a maximum sentence of five years in prison and a maximum fine of the greater of $250,000, or twice the gross gain or loss from the offense. He is scheduled to be sentenced before Judge Hellerstein on August, 2, 2013 at 1:30 p.m.
Mr. Bharara praised the work of the Federal Bureau of Investigation and thanked the Securities and Exchange Commission for its assistance in the investigation of this case.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant United States Attorney Eugene Ingoglia is in charge of the prosecution.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force, on which Mr. Bharara serves as a Co-Chair of the Securities and Commodities Fraud Working Group. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.stopfraud.gov.
U.S. v. Kareem Serageldin Indictment
U.S. v. David Higgs and Salmaan Siddiqui InformationsForeign National Pleads Guilty to Role in Drug Trafficking OrganizationRead the Press Release
Juan Miguel Mendez-Velasquez, 36, a citizen of Mexico who most recently resided in Mexico, entered a plea of guilty on April 11, 2013, to Conspiracy to Distribute and Possess With the Intent to Distribute Cocaine, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today. Mendez-Velasquez had been charged on August 22, 2012, in an eleven count indictment charging a total of ten individuals with being members of a large drug trafficking organization. Mendez-Velasquez is currently scheduled to be sentenced at 9:00 a.m. on August 2, 2013, at which time he faces a potential sentence of 5 to 40 years in prison, followed by a term of supervised release of not less than four years, a $5,000,000 fine, and a $100 special assessment. Mendez-Velasquez also admitted the Forfeiture Allegation in the Indictment and agreed to forfeit $114,800.00 to the United States. Mendez-Velasquez admitted that he is a citizen of Mexico who is in the United States illegally. He agreed to the entry of a Judicial Order of Removal, which will require him to be deported following the service of his sentence.
According to the Stipulation of Facts which was filed with the Court at the time of the plea, the organization charged in the Indictment was responsible for importing cocaine from Mexico into the United States, where it was taken to Salt Lake City, Utah. From Salt Lake City, the cocaine was transported by members of the conspiracy to the St. Louis Metropolitan area where it was distributed by various members of the organization, including some who operated within the Southern District of Illinois. Proceeds for the sales of the cocaine were then transported back to the leaders of the conspiracy in Salt Lake City.
Of the nine individuals named in the indictment with Mendez-Velasquez, four others have entered pleas of guilty and are awaiting sentencing; three others have been arrested and are awaiting trial; two are fugitives. Those not yet convicted are presumed innocent because an indictment is a formal charge against a defendant. Under the law, a defendant is presumed to be innocent of a charge and is entitled to a fair trial at which the Government must prove guilt beyond a reasonable doubt.
Evidence in support of the indictment in this case was obtained in an investigation which was conducted under the auspices of the Organized Crime Drug Enforcement Task Force (OCDETF). The OCDETF initiative is designed to bring federal, state, and local law enforcement agencies and resources together to identify, target and dismantle large national and international drug trafficking organizations. Participating agencies include the Drug Enforcement Administration (DEA), Internal Revenue Service, Criminal Investigations, the U.S. Immigration and Customs Enforcement Office of Homeland Security Investigations (ICE HSI), U.S. Marshal Service, the Granite City Police Department, Fairview Heights Police Department, the Collinsville Police Department, the St. Louis Metropolitan Police Department, the St. Louis County (Missouri) Police Department, the St. Charles County (Missouri) Sheriff=s Department, and the Nebraska State Patrol. This case is assigned to Assistant United States Attorney Randy G. Massey for prosecution.
Florida Corporation Pleads Guilty to Pill Mill ChargeRead the Press Release
Agrees to Forfeit $2 Million in Connection with the Operation of a Purported Garden City, Georgia Pain Clinic
SAVANNAH, GA - Nuvest, LLC, a Florida corporation, has pleaded guilty to an offense involving a purported pain clinic in Garden City, Georgia. Appearing before United States District Court Judge Dudley H. Bowen, Jr. on April 11, the corporation, through counsel, entered a plea of guilty to maintaining a drug-involved premises known as East Health Center. The corporation, which provided the funds used to launch and operate the clinic, admitted that the clinic was opened for the purpose of dispensing oxycodone, hydrocodone, and other drugs without legitimate medical purpose. The clinic operated in Garden City from February through May of 2011. As part of a plea agreement, the corporation agreed to forfeit the sum of $2,000,000, representing proceeds obtained as a result of the violation.
United States Attorney Edward Tarver said, “Pill mills are opened for the sole purpose of profiting from the unlawful dispensation of powerful, addictive, and often dangerous drugs. These drugs are abused by either the patients visiting the clinics or end up being unlawfully sold to others. An important goal in all of our law enforcement efforts is to deprive violators of their ill-gotten gains. I am confident that this prosecution sends a clear and unmistakable message that the United States intends to pursue the forfeiture of unlawful drug proceeds with great vigor.”
An extensive financial investigation of Nuvest, LLC was conducted by the DEA, GBI, and IRS - Criminal Investigations. Assistant United States Attorneys Karl Knoche, Greg Gilluly, and Jeff Buerstatte are prosecuting the case for the Government. For additional information, please contact First Assistant United States Attorney James D. Durham at (912) 201-2547.
Five Men Charged with Trafficking 57 Pounds of Crystal Methamphetamine ("Ice")Read the Press Release
Oklahoma City, Oklahoma -- Federal charges were filed today charging JOSE EDUARDO OSUNA VALDEZ (aka "Lalo"), 25, BRIAN JESUS GARCIA-PENA (aka "Chino"), 18, JESUS HERNANDEZ-CARILLO (aka "Jesus Jesse Hernandez"), 20, JOSE IRAI GARCIA–PENA, 20, and GAEL GUADALUPE ZANUEDO-ARREDONDO, 20, all from Mexico, with conspiracy to possess and actually possessing approximately 57 pounds of crystal methamphetamine (commonly known as "ice") with intent to distribute, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma.
According to the criminal complaint and affidavit, law enforcement received a tip on April 10, 2013, regarding a shipment of crystal methamphetamine being delivered to Oklahoma City. Law enforcement surveillance tracked the drug shipment being transferred from the transport vehicle (a white 1997 Acura) to a black Nissan Armada in the parking lot of the Flying-J truck stop located at Interstate 40 and Morgan Road, in Oklahoma City. Surveillance tracked the Armada to 4348 N.W. 12th Street, in Oklahoma City, where law enforcement converged to arrest the five defendants. According to the complaint affidavit, approximately 57 pounds of crystal methamphetamine "ice" was recovered from the vehicle. The street value is estimated to exceed $2.5 million. Reference is made to the complaint and affidavit for further information.
If convicted, the defendants each face no less than ten years and up to life in prison, plus a $10,000,000 fine. The public is reminded that the complaint is merely an accusation and that the defendants are each presumed innocent unless and until proven guilty.
This case is the result of an investigation by the Drug Enforcement Administration, the Oklahoma Highway Patrol, Oklahoma County District Attorney's Office, Oklahoma County Sheriff's Department, Canadian County Sheriff's Department, Norman Police Department, Edmond Police Department, Duncan Police Department, Moore Police Department, District-21 Drug Task Force, District-6 Drug Task Force, COMIT Task Force, U.S. Customs and Border Protection Air Training Center, and the Oklahoma National Guard-Counter Drug Unit. The case is being prosecuted by Assistant U.S. Attorney David Peterrmann.
Federal Jury Convicts Inmate for Retaliating Against Her for Being A Government WitnessRead the Press Release
MINNEAPOLIS—Earlier today in federal court, a jury found a 23-year-old inmate guilty of retaliating against another inmate for being a government witness in a drug-trafficking trial. Following a four-day trial, the jury convicted Veronique Zsa zsa Antique Muckle, of Superior, Wisconsin, on one count of federal witness retaliation. Muckle was indicted on September 11, 2012.
According to the indictment and evidence presented at trial, Muckle assaulted Angelique Michelle Vos on August 14, 2012, following Vos’ return to the Sherburne County Jail after serving as a cooperating government witness during a narcotics trial. Muckle, Vos, and more than three dozen others pleaded guilty for their roles in a large-scale drug-trafficking organization that transported prescription pills and heroin from Detroit to the Twin Ports region in Minnesota. In September 2011, the organization was brought down after it was investigated by the Lake Superior Drug and Violent Crime Task Force and the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (“ATF”). The investigation itself was commonly referred to as Operation Highlife.In August 2012, Muckle’s business partner and confidante Lawrence Lalonde Colton chose to go to trial. At the time, Muckle and Vos were held separately in the Sherburne County Jail. Muckle was already sentenced to 52 months in prison for her participation in the original drug conspiracy, and was awaiting placement in the federal prison system. Along with several other co-conspirators, Vos testified on behalf of the federal government in Colton’s drug-trafficking trial on August 14, 2012. When Vos returned from federal court, Muckle ran from a segregated area of the facility and violently attacked Vos. Colton was convicted on August 16, 2012, and later sentenced to 300 months in prison. At trial, Muckle took the stand and claimed the assault was because of a separate dispute between herself and Vos.
For her crime, Muckle faces a potential maximum penalty of 30 years in prison. United States District Court Judge David S. Doty will determine her sentence at a future hearing, yet to be scheduled.
This case is the result of an investigation by the Sherburne County Sheriff’s Office, the Lake Superior Drug and Violent Crime Task Force, the Duluth Police Department, and the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives. It is being prosecuted by Assistant U.S. Attorneys Allen A. Slaughter and Amber M. Brennan.Federal Jury Convicts Fruitland Man of Conspiracy, Arson and TheftRead the Press Release
Destroyed Government Vehicles and Building in Payette, Idaho, in May 2011
BOISE – U.S. Attorney Wendy J. Olson announced today that David Joseph VonBargen, 50, of Fruitland, Idaho, was convicted by a federal jury of carrying and using firearms – Molotov cocktails – during and in relation to a federal crime of violence, conspiracy to maliciously use explosive materials, conspiracy to maliciously damage federal property, and theft of firearms.
During the five day trial, the jury heard evidence that on May 27, 2011, VonBargen and his co-defendant, Donovan James Bolen, 22, also of Fruitland, schemed to set fires in Payette to divert law enforcement while they broke into the World’s Largest Pawn Shop, in Fruitland, and stole firearms. The jury found VonBargen guilty of using Molotov cocktails to set fire to two U.S. Department of Agriculture vehicles and a lumber warehouse belonging to Western Core Door, Inc., in Payette. The jury also found VonBargen guilty of burglarizing and stealing 12 firearms, including rifles, revolvers, and pistols, from the World’s Largest Pawnshop.
VonBargen is set for sentencing on June 25, 2013, before Chief U.S. District Judge B. Lynn Winmill at the federal courthouse in Boise. He faces a minimum term of 35 years up to life in prison, a maximum fine of $1,760,000, and up to 26 years of supervised release.
Bolen was sentenced on February 5, 2013, to 444 months in federal prison for the same crimes. Following his release from prison, Bolen will be on supervised release for five years. He was ordered to pay $162,124.87 in restitution to the victims, Western Core Door, Inc. 2 and the U.S. Department of Agriculture. Bolen was found guilty of the charges on October 16, 2012, following a five day trial.
“Mr. VonBargen’s use of Molotov cocktails to divert the attention of law enforcement was unconscionable, endangered the lives of first responders, and destroyed the property of innocent victims,” said Olson. “I commend the swift law enforcement response that brought both of the defendants in this case to justice. Mr. VonBargen now, like his co-defendant, faces a well-deserved lengthy prison sentence.”
The case was investigated by the Fruitland Police Department, the Payette Police Department, the Payette County Sheriff's Office, the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and the Idaho State Fire Marshal.
Federal Judge Sentences Former Social Security Employee to Nearly Six Years in Prison for Fraud and Identity TheftRead the Press Release
BIRMINGHAM – A federal judge this week sentenced a former Social Security Administration service representative to 70 months in prison for access-device fraud and aggravated identity theft, announced U.S. Attorney Joyce White Vance and Social Security Administration, Office of Inspector General, Special Agent in Charge Guy Fallen.
In imposing the nearly six-year sentence on MANUEL "Trey" CHANEY III, U.S. District Judge C. Lynwood Smith explained that the scheme was sophisticated and "far flung."
Chaney, 29, of Birmingham, worked for the Social Security Administration in its Bessemer office when he conducted the fraud between January 2010 and November 2010. He pleaded guilty last year to one count of access-device fraud and one count of aggravated identity theft for using bank routing and account numbers he took from Social Security records to access and steal money from other people's accounts. Chaney used Internet-based payment systems to electronically steal from those accounts and pay his own debts. He made more than 150 of the fraudulent online payments that affected more than 50 target accounts during the 10-month period.
The total value of the transactions exceeded $325,000. Among the creditors that Chaney paid were Alabama Power, Capital One Bank, Citibank, Discover Card, GE Money Bank, GMAC/Ally Bank, HSBC Bank, JP Morgan Chase Bank, and T-Mobile. Chaney must pay $40,857 restitution to his victims, and must forfeit $175,559 to the government as proceeds of his crime.
According to court records, Chaney carried out his fraud as follows:
He used his access to SSA records to identify recently deceased recipients of Social Security benefits from across the southeastern United States. From that pool of individuals, Chaney narrowed the field to those who had been receiving direct deposit of their benefits, as opposed to a paper check, before their death. From that group, Chaney narrowed his target group further by isolating individuals who had received direct deposit of benefits into an account at Wachovia/Wells Fargo Bank, where Chaney conducted his own banking. These became the target accounts Chaney accessed and used to make online payments for his vehicles, utility bills and credit cards, one of which had been used to purchase furniture for Chaney's new home.
The Social Security Administration, Office of Inspector General, with assistance from the U.S. Postal Inspection Service, the U.S. Secret Service, and the Jefferson County Sheriff's Department, investigated the case. Assistant U.S. Attorney Melissa K. Atwood prosecuted the case.
Fayetteville Man Sentenced for Drug TraffickingRead the Press Release
GREENVILLE - United States Attorney Thomas G. Walker announced that in federal court Wednesday, United States District Judge Malcolm J. Howard sentenced JARVIS MCCOY, 35ofFayetteville, North Carolinato 264 months imprisonment followed by 5 years supervised release.
A Federal Grand Jury returned a Criminal Indictment on May 1, 2012. On October 16, 2012, MCCOY pleaded guilty to Conspiracy to Distribute and Possess with the Intent to Distribute 280 Grams or More of Cocaine Base (Crack), in violation of Title 21 United States Code, Section 846.
According to the evidence presented in Court, on August 11, 2010, MCCOY sold a small amount of crack cocaine to a confidential informant. On August 19, 2010, MCCOY again sold crack cocaine to a confidential informant. On September 8, 2010, after a third sale of crack cocaine to an informant, law enforcement conducted a traffic stop of MCCOY’s vehicle where they located approximately 30 grams of crack cocaine. A search of MCCOY’s residence led to the seizure of an additional 231 grams of crack cocaine. In September 2011, upon execution of a search warrant, law enforcement located another 44.87 grams of cocaine base attributed to MCCOY. Finally, upon execution of another search warrant on January 5, 2012, 10.7 grams of crack cocaine was recovered. All told, MCCOY was held responsible for conspiring to distribute and possess with the intent to distribute over 1 kilogram of crack cocaine and over 100 grams of cocaine.
Investigation of this case was conducted by the Fayetteville Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant United States Attorney Rudy E. Renfer prosecuted the case for the government.
Ex-Soldier Sentenced in Manhattan Federal Court to Four Years in Prison for Extensive Veterans’ Unemployment Benefits Fraud SchemeRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that CHRISTOPHER WILSON, a one-time Army private who was dishonorably discharged in 2003 after deserting his post, was sentenced today to four years in prison for filing dozens of false and fraudulent applications for unemployment benefits intended for other military veterans, ultimately obtaining approximately $143,000 to which he was not entitled. WILSON pled guilty in July 2012 to one count of theft of Government funds and one count of mail fraud. He was sentenced today by U.S. District Judge Andrew L. Carter, Jr.
According to the Complaint, the Information, WILSON’s plea agreement, statements made in court proceedings, and other public documents:
Federal law provides for a permanent program of unemployment compensation for unemployed individuals separated from the Armed Forces, called the Unemployment Compensation for Ex-Service Members Program (“UCX”). UCX benefits are funded by the U.S. Department of Defense and administered by the states on behalf of the U.S. Department of Labor (“DOL”). To qualify for UCX benefits, a claimant must provide his or her Certificate of Release or Discharge from Active Duty (known as a “DD Form 214”), and must have been discharged or separated from their respective service honorably.
Between August 2010 until his arrest in September 2011, WILSON conspired with others to file dozens of false and fraudulent applications for UCX benefits to which they were not entitled. They did so by obtaining the names and social security numbers of unknowing individuals; creating fraudulent DD Form 214s and other documents which purported to indicate that these individuals had served in, and been honorably discharged from, the military; and then submitting these fraudulent documents to states, including New York, in support of claims for UCX benefits. In so doing, WILSON received approximately $143,000 in benefits to which he was not entitled.
In addition to the prison term, WILSON, 33, of Spring Lake, North Carolina, was ordered to pay $143,000 in restitution to the New York State Department of Labor (“NYS DOL”).
Mr. Bharara thanked DOL, NYS DOL, and the Department of Defense, Defense Criminal Investigative Service for their assistance in the investigation.
This case is being handled by the Office’s Complex Frauds Unit. Assistant United States Attorney Edward B. Diskant is in charge of the prosecution.
Everett Resident Linked to Gun Smuggling for Drug Cartels Gets Five Year Prison TermRead the Press Release
An Everett, Washington man who was part of a drug and gun smuggling ring with ties to a crime group in Mexico, was sentenced today in U.S. District Court in Seattle to five years in prison, announced U.S. Attorney Jenny A. Durkan. GEORGE ELLIOTT CHAVIS, 53, acquired guns for the group, some of which were smuggled into Mexico for use by a violent drug trafficking cartel. At sentencing U.S. District Court Judge Robert S. Lasnik said, “This was a very serious and dangerous crime – putting this kind of powerful firearms in the hands of drug traffickers.”
According to records in the case, CHAVIS acquired firearms for a violent drug trafficking organization, with direct ties to a violent cartel that intended to smuggle them back to Mexico. CHAVIS used his prior military experience and training to identify weapons for the group. In one instance, CHAVIS told a cartel leader that an assault weapon could be modified to a fully automatic machine gun. During the course of the investigation of the drug trafficking organization, investigators seized 20 pounds of heroin, in excess of 30 pounds of methamphetamine, over $400,000 in cash, body armor, and 18 firearms, including at least 10 assault-style rifles. CHAVIS was introduced to the drug traffickers by his daughter, Micalia Valenzuela, who was sentenced last month to five years in prison for her role in the crime group.
In January 2013, CHAVIS pleaded guilty to Conspiracy to Possess Firearms in Furtherance of a Drug Trafficking Crime/Crime of Violence. All 34 defendants have been indicted in the case. Some have already pleaded guilty and been sentenced to prison terms ranging from one year to nine years in prison. Trial for the remaining defendants is scheduled for May 6, 2013.
In asking for a six year sentence, prosecutors wrote to the court that CHAVIS “was intimately involved in a violent drug organization’s efforts to acquire military-style assault rifles, to be smuggled back into Mexico - with predictably deadly results.”
This was an Organized Crime and Drug Enforcement Task Force (OCDETF) investigation, providing supplemental federal funding to the federal and state agencies involved. 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, the 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, John McNeil and J. Tate London.
Elton Johnson Sentenced for Firearm ConspiracyRead the Press Release
ELTON JOHNSON, age 28, of New Orleans, Louisiana, was sentenced today to 21 months of incarceration by U. S. District Judge Lance M. Africk after he pleaded guilty to a one count indictment for conspiracy to make false statements in connection with a firearm purchase, announced U. S. Attorney Dana J. Boente.
According to court documents, JOHNSON conspired with his then girlfriend, Glenda Wright, to purchase a Ruger 9mm firearm at a gun show in Kenner, Louisiana, on January 28, 2008. JOHNSON supplied Wright money in advance to buy the gun. Wright falsely stated on the ATF Form provided by the licensed federal firearms dealer that she was to be the true owner, when in fact, the true owner was to be JOHNSON. Wright gave JOHNSON the Ruger firearm after the purchase which he kept until it was taken from him by the New Orleans Police Department in an arrest the following month.
JOHNSON was sentenced to 21 months in prison and was placed on 3 years of supervised release and ordered to pay a special assessment of $100.
Wright pled guilty in December of 2012 to conspiracy to make false statements in the purchase of a firearm and was sentenced in March of 2013 to 5 years of probation.
This investigation was conducted by the Bureau of Alcohol, Tobacco, Firearms & Explosives and the Jefferson Parish Sheriff’s Office and was prosecuted by Assistant United States Attorney Edward J. Rivera.
District Man Sentenced to 24 Years in Prison for 2012 Murder in Northeast Washington-Defendant Also Shot at Second Victim in the Attack-Read the Press Release
WASHINGTON – Sean Carter, 22, of Washington, D.C., was sentenced today to 24 years in prison on charges of second-degree murder while armed and assault with intent to kill stemming from a shooting in Northeast Washington, U.S. Attorney Ronald C. Machen Jr. announced.
Carter pled guilty in January 2013 in the Superior Court of the District of Columbia. He was sentenced by the Honorable Robert E. Morin. Upon completion of his prison term, Carter will be placed on eight years of supervised release.
According to the government’s evidence, on Aug. 23, 2012, at approximately 10:15 p.m., Carter saw Bidley Warren, 22, walking with a teenager on Rhode Island Avenue NE. Carter recognized both of them and went to his nearby home, where he retrieved a gun. Then he hurried toward them in the 1000 block of Rhode Island Avenue.
When Mr. Warren and the teenager saw Carter approaching with the gun, they ran away from him. Carter chased after them and began shooting. Mr. Warren tripped and fell, and the teenager stopped to check on him. Carter, meanwhile, shot again at the teenager, nearly striking him in the head. Due to the assault with gunfire, the teenager was forced to leave Mr. Warren behind and he ran away. Carter then stood over Mr. Warren and shot Mr. Warren in the head. Mr. Warren died soon afterward from the gunshot wound to his head.
After the murder, Carter fled to Atlanta. He was apprehended there by the U.S. Marshals Service on Oct. 2, 2012. The next day, Carter admitted to two detectives with the Metropolitan Police Department (MPD) that he chased and shot at Mr. Warren and the teenager, and that he then shot Mr. Warren in the head while Mr. Warren was on the ground. Carter claimed that he had been involved in fights with the teenager and Mr. Warren on previous occasions. According to the government’s evidence, Mr. Warren and the teenager had no interaction with Carter the night of the murder. Neither of the victims saw Carter approach them with the gun until it was too late. He ran after them from behind and chased them down the street with gunfire.
In announcing the sentence, U.S. Attorney Machen commended the work of the detectives of MPD’s Criminal Investigations Division and the officers of MPD’s Fifth District. He also acknowledged the efforts of the Atlanta Police Department, the U.S. Marshals Service, and the U.S. Attorney’s Office for the Northern District of Georgia. He also expressed appreciation to those who worked on the case from the U.S. Attorney’s Office for the District of Columbia, including Victim Witness Advocate Marcia Rinker, Witness Security Specialist Tanya Via and Paralegal Specialist Marian Russell. Finally, U.S. Attorney Machen praised the work of Assistant U.S. Attorney Shana Fulton of the Homicide Section, who prosecuted the case.
13-134District Man Pleads Guilty to Second-Degree Murder While Armed in Slaying of Northeast Washington Deli Owner-DNA Linked the Defendant to the Crime Scene-Read the Press Release
WASHINGTON – Steven Williams, 46, of Washington, D.C., pled guilty today to a charge of second-degree murder while armed in the June 2012 slaying of the owner of a Northeast Washington delicatessen, announced U.S. Attorney Ronald C. Machen Jr. and Cathy L. Lanier, Chief of the Metropolitan Police Department (MPD).
Williams pled guilty in the Superior Court of the District of Columbia. The Honorable Robert E. Morin scheduled sentencing for June 21, 2013. The charge carries a statutory maximum of 40 years in prison. Under the plea agreement, the government will ask for no more than 28 years of incarceration, and the defendant will seek no less than 20 years in prison.
According to the government’s evidence, the victim, Hae Soon Lim, 64, was found by police on June 14, 2012, at about 6:15 a.m., on the floor of her delicatessen, Grace’s Deli, in the 700 block of H Street NE. Her vehicle was found parked directly outside. An autopsy determined that Ms. Lim died from a single gunshot wound that entered through the back of her neck.
The Metropolitan Police Department (MPD) has a crime surveillance camera located a block away from the delicatessen at 8th and H Streets NE. A review of the video from the camera showed that a vehicle consistent with the appearance of the vehicle belonging to Ms. Lim pulled up and parked in front of the deli at about 5:25 a.m. on June 14, 2012. The video also shows a single person, believed to be the victim, leaving the vehicle and walking toward the restaurant.
The video then shows, moments later, a single person crossing H Street rapidly on foot, moving toward the front entrance of the restaurant, where that person then proceeds to interact in close proximity with the person believed to be Ms. Lim.
An empty, brown handgun holster was found on the floor directly next to Ms. Lim’s body. DNA from that holster revealed a match to the defendant. Williams’s DNA was also recovered from an empty cash register located inside the restaurant, behind the counter and out of reach from the customer area.
Williams was charged with the murder in November 2012 and remains in custody.
In announcing the plea, U.S. Attorney Machen and Chief Lanier praised the work of those who investigated the case for the MPD. They also expressed appreciation for the work performed by the District of Columbia Department of Forensic Sciences. Finally, they commended the efforts of those who worked on the case from the U.S. Attorney’s Office, including Assistant U.S. Attorneys Michael C. Liebman and Justin Dillon, who investigated and prosecuted the matter.
13-133District Man Found Guilty by A Federal Jury of Unlawful Gun Possession-Defendant Tossed Handgun Out A Window During Police Search of Apartment-Read the Press Release
WASHINGTON - Ezra Griffith, 23, of Washington, D.C., has been found guilty by a jury of a federal weapons charge, U.S. Attorney Ronald C. Machen Jr. announced today.
The jury found Griffith guilty on April 10, 2012 of a charge of unlawful possession of a firearm and ammunition by a person convicted of a crime that is punishable by more than a year in prison. Griffith was convicted in 2010 of an attempted robbery charge.
The verdict followed a trial in the U.S. District Court for the District of Columbia. The Honorable Amy Berman Jackson scheduled sentencing for June 27, 2013. Griffith faces up to 10 years in prison. The Court ordered that he be held without bond pending sentencing.
According to the government’s evidence, on Jan. 7, 2013, at approximately 7:10 a.m., the Metropolitan Police Department’s (MPD) Homicide Branch executed a search warrant at an apartment in the 2600 block of Birney Place SE. Officers approached the front door and knocked and announced, “Police, search warrant.” After a few moments, another occupant opened the door. Officers observed Griffith standing at the rear of a bed in his underwear.
Moments later, an officer who was one stationed outside, and who has known Griffith for more than eight years, notified the other officers that he had observed the defendant throw a handgun out of the apartment’s bedroom window and onto the ground below. The firearm was a 9mm Glock, with an extended 30-round magazine loaded into the well of the weapon.
In announcing the verdict, U.S. Attorney Machen commended the actions of the MPD officers. He also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialists Candace Battle and Candice Sisco. Finally, he praised the work of Assistant U.S. Attorney Emory V. Cole and Special Assistant U.S. Attorney Brittan Heller, who investigated and prosecuted the case.
13-131Defendant from La Tombola Case Sentenced to 21 Years in PrisonRead the Press Release
SAN JUAN, PR – Carmelo Rondón-Feliciano was sentenced today to 262 months in prison by United States District Court Judge José A. Fusté. On November 7, 2012, Rondón-Feliciano pled guilty to violating the Racketeer Influenced and Corrupt Organizations Act (“RICO”). Particularly, Rondón-Feliciano admitted that for at least ten years between 1993 and 2003, he participated in a pattern of racketeering activity through his drug trafficking organization. The reprehensible criminal acts perpetrated by his group included 12 murders between 1996 and 2001 that were directed or committed by co-defendant Alexis Candelario-Santana in furtherance of or in the protection of the drug trafficking organization, as well as the illicit trafficking of cocaine base (crack), cocaine, heroin and marihuana, announced United States Attorney Rosa Emilia Rodríguez-Vélez and Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division.
The evidence at Candelario-Santana’s trial established that Rondón-Feliciano became Candelario-Santana’s right hand man beginning in 1996 when Candelario-Santana took control of the drug trafficking organization at Palo de Goma, Sabana Seca, Toa Baja, Puerto Rico. Rondón-Feliciano continued his leadership role in the organization even after Candelario-Santana was arrested and charged in the Commonwealth of Puerto Rico with 12 murders in 2002. While Candelario-Santana was incarcerated, Rondón-Feliciano continued to run the organization and sent Candelario-Santana profits from the organization’s drug points until 2005-06, when the men had a dispute over the drug profits. Rondón-Feliciano then attempted to run the organization on his own.
In 2006, Rondón-Feliciano became the target of a Drug Enforcement Administration investigation. This investigation led to Rondón-Feliciano’s September 25, 2006, arrest after the execution of a search warrant at Las Brisas, where law enforcement authorities recovered an armory of weapons belonging to the drug trafficking organization (including AK-47-type assault weapons, numerous semiautomatic weapons, extended magazines -- some capable of firing 100 rounds or more without being reloaded -- and over 1,000 rounds of ammunition), as well as a large quantity of heroin and cocaine. Rondón-Feliciano was charged in the District of Puerto Rico.
Co-defendant Alexis Candelario-Santana was convicted by a jury on March 23rd. According to the evidence presented at Candelario-Santana’s trial, from approximately 1993 through 2003, the drug trafficking organization operated principally in Sabana Seca, Toa Baja, Puerto Rico. The organization purchased its drugs in bulk, processed and packaged the drugs and sold them at Sabana Seca through numerous sellers, runners and enforcers under Candelario-Santana’s control. The organization sold crack, cocaine, heroin and marijuana, and members of the organization routinely possessed firearms in order to protect the drug points. In addition, the evidence introduced at trial established that, between 1995 and 2001, Candelario-Santana either personally killed, or ordered others to kill, 13 individuals whom he viewed as threats to his drug trafficking organization or as being disloyal members of his drug trafficking organization. Candelario-Santana was also convicted of the October 17, 2009, murder of eight people and an unborn child and attempting to murder 19 others during a mass shooting at a Puerto Rico pub in what became known as the “La Tombola Massacre.” As a result of his conviction, Candelario-Santana will be sentenced to life in prison. There is no parole in the federal system.“The Rondon-Feliciano drug trafficking organization controlled the neighborhoods in the Sabana Seca area, spreading violence and fear in this community,” said Rosa Emilia Rodríguez-Vélez, U.S. Attorney for the District of Puerto Rico. “Justice has been served. The public welfare has been protected. This outstanding result was achieved through the collaboration of all of our law enforcement partners, and the U.S. Department of Justice, Criminal Division’s Capital Case Unit.”
The case was investigated by FBI, and PRPD, with the collaboration of DEA, ATF, US Postal Inspectors, Instituto de Ciencias Forenses and the Puerto Rico Department of Justice, and prosecuted by First Assistant United States Attorney María Dominguez-Victoriano, Assistant United States Attorney Marcela Mateo and Trial Attorney Bruce R. Hegyi of the Criminal Division’s Capital Case Unit.
Defendant Admits Role in $65 Million Stolen Identity Income Tax Refund Fraud SchemeRead the Press Release
NEWARK, N.J. – A North Carolina man today admitted his role in one of the nation’s largest and longest running stolen identity refund fraud schemes ever prosecuted, U.S. Attorney Paul J. Fishman announced.
Luis Martinez, 48, of Matthews, N.C., pleaded guilty today before U.S. District Judge Claire C. Cecchi, to an Information charging him with conspiracy to defraud the United States and theft of government property. The conspiracy caused more than 8,000 fraudulent U.S. income tax returns to be filed, which sought more than $65 million in tax refunds and resulted in losses to the United States of more than $12 million.
According to documents filed in this case and statements made in court:
Stolen Identity Refund Fraud (“SIRF”) is a common type of fraud that results in over $2 billion in losses annually to the U.S. Treasury. SIRF schemes generally share a number of hallmarks:
- SIRF perpetrators obtain personal identifying information, including Social Security numbers and dates of birth, from unwitting individuals, who often reside in the Commonwealth of Puerto Rico;
- SIRF participants complete Individual Income Tax Return 1040 Forms using the fraudulently-obtained information, and falsifying wages earned, taxes withheld and other data. Perpetrators use data to make it appear that the “taxpayers” listed on the fraudulent 1040 form are entitled to tax refunds – when in fact, the various tax withholdings indicated have not been paid and no refunds are due;
- SIRF perpetrators direct the U.S. Treasury Department to issue the refunds through checks to locations they control or can access, in various ways;
- SIRF perpetrators generate cash proceeds. Some sell the checks at a discount to face value. The buyers then cash the checks at banks or check cashing businesses or deposit them into bank accounts.
Federal law enforcement agencies, recognizing that SIRF was a serious problem, created a multi-agency task force in New Jersey comprised of investigators from the IRS and the U.S. Postal Inspection Service, along with the U.S. Secret Service, and with assistance from the Drug Enforcement Administration (the “New Jersey Task Force”).
An investigation led by the New Jersey Task Force with assistance from U.S. Immigration and Customs Enforcement, Homeland Security Investigations has revealed that starting as early as 2007, dozens of individuals in the New Jersey and New York area have been engaged in a large-scale, long running SIRF scheme. The scheme has caused more than 8,000 fraudulent 1040 forms to be filed, seeking more than $65 million in tax refunds, with losses to the U.S. Treasury of more than approximately $12 million.
Members of the conspiracy obtained personal identifiers, such as dates of birth and Social Security numbers, belonging to Puerto Rican citizens. They used those identifiers to create fake 1040s, which falsely reported wages purportedly earned by the “taxpayers” and taxes purportedly withheld, to create the appearance that the “taxpayers” were entitled to tax refunds. The returns were filed electronically. By tracing the specific IP addresses that submitted them, law enforcement officers learned just a handful of IP addresses created many of the fraudulent forms that led to the issuance of tax refund checks.
Martinez and the other members of the conspiracy then gained control of checks, sometimes bribing mail carriers to intercept checks and deliver them to other members of the conspiracy.
During the course of the investigation, members of the task force identified certain “hot spots” of activity and intercepted more than $22 million in fraudulently-applied for refund checks before they were delivered to members of the conspiracy.
U.S. Attorney Fishman praised special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Shantelle P. Kitchen; the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Marie Kelokates; the U.S. Secret Service, under the direction of Special Agent In Charge James Mottola; and the Drug Enforcement Administration, under the direction of Acting Special Agent in Charge Robert G. Koval, for the investigation leading to today’s guilty plea.
The conspiracy count carries a maximum potential penalty of five years in prison and up to a $250,000 fine. The substantive count of theft of government property carries a maximum potential penalty of 10 years in prison and up to a $250,000 fine. Sentencing is scheduled for July 16, 2013.
The government is represented by Assistant U.S. Attorneys Danielle Alfonzo Walsman, Mala Ahuja Harker, Lakshmi Srinavasan Herman, and Zach Intrater of the U.S. Attorney’s Office Criminal Division in Newark.
13-165
Defense counsel: Barry Goldberg Esq., New York
Martinez, Luis Information
Courtney Cal Gardenier Sentenced in U.S. District CourtRead the Press Release
The United States Attorney's Office announced that during a federal court session in Missoula, on April 4, 2013, before Chief U.S. District Judge Dana L. Christensen, COURTNEY CAL GARDENIER, a 25-year-old resident of Scottsdale, Arizona, was sentenced to a term of:
Prison: 24 months
Special Assessment: $100
Supervised Release: 3 years
GARDENIER was sentenced in connection with her guilty plea to conspiracy to distribute ecstasy.
In an Offer of Proof filed by Assistant U.S. Attorney Timothy J. Racicot, the government stated it would have proved at trial the following:
On November 3, 2011, Homeland Security Investigations ("HSI") was notified by agents from Customs and Border Protection ("CBP") in Chicago that two shipments of ecstasy were received at the mail facility. The packages were sent from Canada and were bound for Bozeman. One contained 22 grams and the other 23 grams of powder MDMA/ecstasy.
On November 9, 2011, a Postal Inspector conducted controlled deliveries of both packages and law enforcement subsequently searched both residences and interviewed the recipients of the packages. The recipients provided detailed information about their involvement in the conspiracy and identified GARDENIER as their point of contact to obtain the drugs. One recipient agreed to cooperate with law enforcement and eventually ordered approximately 1,000 tablets of suspected ecstasy from GARDENIER. Those pills were seized from GARDENIER following a controlled delivery and the DEA lab analyzed the pills and determined that they contained N-benzlypiperazine, or BZP, which is a Schedule I controlled substance.
GARDENIER was interviewed by law enforcement on November 22, 2011, following the controlled delivery of the BZP pills. She admitted that she had been involved in the distribution of both powdered MDMA and ecstasy pills and identified her sources of supply. Based on her statements and the statements of other witnesses, law enforcement estimated that GARDENIER distributed approximately nine ounces of MDMA during the life of the conspiracy, in addition to the BZP pills.
Because there is no parole in the federal system, the "truth in sentencing" guidelines mandate that GARDENIER will likely serve all of the time imposed by the court. In the federal system, GARDENIER does have the opportunity to earn a sentence reduction for "good behavior." However, this reduction will not exceed 15% of the overall sentence.
The investigation was a cooperative effort between the U.S. Department of Homeland Security - Homeland Security Investigations and the Missouri River Drug Task Force.
Coleen Furthmyre Pleads Guilty in U.S. Federal CourtRead the Press Release
The United States Attorney's Office announced that during a federal court session in Missoula, on April 4, 2013, before U.S. Magistrate Judge Jeremiah C. Lynch, COLEEN FURTHMYRE, a 46-year-old resident of Helena (formerly Anaconda), pled guilty to theft of government money. Sentencing has been set for July 29, 2013. She is currently released on special conditions.
In an Offer of Proof filed by Assistant U.S. Attorney Timothy J. Racicot, the government stated it would have proved at trial the following:
In November 2011, based on information received from Glacier Bank, the Secret Service and the Department of Housing and Urban Development ("HUD") initiated an investigation into FURTHMYRE for wire fraud and theft of government property. The investigation revealed that FURTHMYRE, then an employee of the Anaconda Housing Authority ("AHA"), had been stealing money from the AHA for approximately two years, primarily in the form of cash deposits received as rent payments for subsidized housing.
FURTHMYRE was interviewed on November 29, 2011, at the Butte-Silverbow Law Enforcement Center. At the outset of the interview, she asked, "This is about the money, isn't it?" She then admitted that over the past year she had taken cash from AHA's rental payments, deposited the money into her checking account, and used it to pay her personal bills. She said she would try to pay back the money she had stolen at the end of each month to balance the books. She initially tried to track the stolen proceeds by writing amounts on a sticky note, but had recently been unable to keep track of how much she had embezzled.
One interviewing agent told FURTHMYRE that he thought she had been stealing money for longer than one year and she replied that it might have started "a couple years ago." She said she deposited most of the stolen funds into her Glacier Bank account, but also put some of the money into her account at First National Bank. FURTHMYRE noted that she rarely deposited cash into her accounts other than the money she had stolen from the AHA. She said no one else was involved with the theft of funds from the AHA and that she had a meeting that night with her boss to explain what she had done. FURTHMYRE thought she owed the AHA about $28,000, and said she tried to obtain a loan to pay back the stolen funds.
After they interviewed FURTHMYRE, the investigating agents interviewed her boss at the AHA. He confirmed that he had a meeting scheduled with FURTHMYRE later that evening, but was not aware of any bookkeeping problems. After that meeting, he called one of the agents and said FURTHMYRE confessed to stealing money and told him she thought she owed the AHA about $33,000. During a second interview with law enforcement, he explained how FURTHMYRE was able to accomplish her theft and still present the appearance of maintaining balanced books. He said that she carried over shortages from previous months into the next month for several years. The AHA has provided a final loss amount of $31,243.50.
FURTHMYRE faces 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. Secret Service and the U.S. Department of Housing and Urban Development - Inspector General's Office.
Cassandra Joan Fadness Sentenced in U.S. District CourtRead the Press Release
The United States Attorney's Office announced that during a federal court session in Helena, on April 20, 2013, before U.S. District Judge Senior U.S. District Judge Charles C. Lovell, CASSANDRA JOAN FADNESS, a 60-year-old resident of Boulder, appeared for sentencing. FADNESS was sentenced to a term of:
Probation: 3 years
Special Assessment: $100
Restitution: must repay government for cost of probation
FADNESS was sentenced in connection with her guilty plea to theft of government money and social security payee fraud.
In an Offer of Proof filed by Special Assistant U.S. Attorney Chad C. Spraker, the government stated it would have proved at trial the following:
From approximately April of 2008 to approximately August of 2008, in Helena, FADNESS, while operating Montana Payee Services, became the representative payee for X.X. and, in that capacity, withdrew funds from X.X.'s beneficiary bank account by withdrawing cash and unauthorized fees and converting the cash and fees for her own personal use.
Because there is no parole in the federal system, the "truth in sentencing" guidelines mandate that FADNESS will likely serve all of the time imposed by the court. In the federal system, FADNESS does have the opportunity to earn a sentence reduction for "good behavior." However, this reduction will not exceed 15% of the overall sentence.
The investigation was conducted by the Social Security Administration - Office of Inspector General.
California Man Pleads Guilty to Transporting an Individual to Engage in ProstitutionRead the Press Release
ALBUQUERQUE – Marcus Edward Michael Todd Moore, 34, of Santa Rosa, Calif., entered a guilty plea this morning to a felony information charging him with transporting an individual in interstate commerce to engage in prostitution. The guilty plea was entered under a plea agreement with the U.S. Attorney’s Office.
Moore was arrested in Santa Rosa, Calif., in July 2012, on a criminal complaint filed in Las Cruces federal court charging Moore with attempting to entice a minor to engage in prostitution. According to the criminal complaint, in June 2012, Moore met a woman who claimed to be 17 years of age on a social networking Internet site and began the process of grooming her to travel to California for the purpose of engaging in prostitution. Unbeknownst to Moore, the woman was working with the FBI.
In mid-July 2012, Moore had a series of telephone conservations with the woman, which were consensually recorded by the FBI. During those conversations, Moore discussed paying for the woman to travel to California to engage in prostitution; the amount of money and other benefits the woman would receive, including a new car, her own apartment, regular shopping sprees; and the prospect of “working” overseas. On July 17, 2012, Moore purchased a one-way bus ticket for the woman to travel from Las Cruces, N.M., to Oakland, Calif.
During this morning’s hearing, Moore admitted purchasing a bus ticket for an individual to travel from Las Cruces to Oakland for the purpose of engaging in prostitution.
Moore has been on conditions of release since his arrest in July 2012, and will continue to remain out on those conditions pending his sentencing hearing, which has yet to be scheduled. Under the terms of his plea agreement, Moore faces up to 24 months in prison followed by at least three years of supervised release when he is sentenced. Moore will be required to register as a sex offender after he completes his prison sentence.
This case was investigated by the Las Cruces office of the FBI and is being prosecuted by Assistant U.S. Attorney Mick I.R. Gutierrez of the U.S. Attorney’s Las Cruces Branch Office.
California Businesswoman Agrees to Plead Guilty to Conspiracy to Conceal Israeli Bank AccountsRead the Press Release
Guity Kashfi of Los Angeles, was charged today in the U.S. District Court for the Central District of California with conspiracy to defraud the United States, the Justice Department and Internal Revenue Service, Criminal Investigation (IRS-CI) announced. A signed plea agreement was filed along with the charging document.
According to court documents, Kashfi, a U.S. citizen, maintained undeclared bank accounts at an international bank headquartered in Tel Aviv, Israel. The accounts were held in the names of nominees in order to keep them secret from the United States government. Kashfi used the accounts to obtain “back-to-back” loans from a branch of the bank in Los Angeles. Although the loans were secured or collateralized with certificates of deposit held in Kashfi’s undeclared offshore accounts, that fact was concealed to keep Kashfi’s offshore accounts secret.
According to the plea agreement, in 2008, Kashfi was told by a banker in Los Angeles that the bank was going to use the funds in her account in Israel to pay off her back-to-back loans in Los Angeles. Rather than pay off the loans, Kashfi transferred approximately $2 million to an account located in Luxembourg at a branch of a second Israeli bank. Kashfi did this to avoid repatriating funds from her first Israeli account back to the United States to pay back her loans in Los Angeles. Kashfi eventually used the funds in Luxembourg to obtain a new back-to-back loan from a branch of the second Israeli bank located in Los Angeles. In 2009, Kashfi went to Luxembourg to close her account. While there, two foreign bankers advised Kashfi that her money was safe in Luxembourg because the bank was a private bank and no one could get information relating to bank accounts located in Luxembourg. In 2011, Kashfi closed all her accounts in Luxembourg by signing paperwork in Los Angeles. She then transferred the funds to banks in the United States.
According to the plea agreement, Kashfi never told her accountant about her undeclared accounts, and failed to report any income from the accounts on her individual income tax returns that were filed with the IRS. For tax years 2005 through 2011, Kashfi failed to report interest income of approximately $221,306. The highest balance in Kashfi’s undeclared accounts was approximately $2,501,469.
Kashfi is the second defendant charged in the U.S. District Court for the Central District of California with failing to report income from undeclared accounts in Israel.
On March 29, 2013, Zvi Sperling of Beverly Hills, Calif., appearing before United States District Judge John F. Walter, pleaded guilty to conspiring to defraud the United States in connection with back-to-back loans obtained in Los Angeles that were secured by funds in undeclared bank accounts in Israel. For tax years 2005 through 2008, Sperling failed to report income of approximately $381,563. The highest balance in Sperling’s undeclared accounts was approximately $4 million.
“Today’s guilty plea is a stark reminder that those who attempt to hide their income and assets from the United States are running out of places to hide,” said Assistant Attorney General for the Justice Department’s Tax Division Kathryn Keneally. “The Internal Revenue Service will find the hiding places and the Department of Justice will criminally prosecute the tax cheats. And in the end, they will still owe and be required to pay the taxes due.”
“We will continue to work aggressively to uncover and prosecute those who hide unreported income in secret offshore bank accounts as well as the employees of financial institutions and the financial institutions themselves who facilitate such crimes,” said U.S. Attorney for the Central District of California André Birotte Jr.
“Most individuals file truthful tax returns voluntarily and pay their share of taxes,” said Richard Weber, Chief, IRS-CI. “As these two defendants have learned, hiding income and assets offshore is not tax planning, it’s tax fraud. The IRS is vigorously pursuing unreported income in hidden offshore accounts, as well as the banks and bankers who assist them.”
United States citizens and residents who have an interest in, or signature or other authority over, a financial account in a foreign country with assets in excess of $10,000 are required to disclose the existence of such account on Schedule B, Part III, of their individual income tax returns. Additionally, U.S. citizens and residents must file a Report of Foreign Bank and Financial Reports (FBAR) with the U.S. Treasury disclosing any financial account in a foreign country with assets in excess of $10,000 in which they have a financial interest, or over which they have signature or other authority.
Both Kashfi and Sperling have agreed to pay a civil penalty in the amount of 50 percent of the high balance of their undeclared accounts to resolve their civil liability with the IRS for failing to file FBARs.
Both Kashfi and Sperling face a potential maximum prison term of five years and a maximum fine of $250,000.
Assistant Attorney General Keneally and U.S. Attorney Birotte thanked special agents of IRS-CI, who investigated the case, and Tax Division Senior Litigation Counsel John E. Sullivan and Assistant Chief Elizabeth C. Hadden, who prosecuted these cases, and Assistant U.S. Attorney Sandra A. Brown of the U.S. Attorney’s Office for the Central District of California, who assisted with the prosecutions.
Additional information about the Tax Division and its enforcement efforts may be found at www.justice.gov/tax .
Butler Man Pleads Guilty in Mortgage Fraud SchemeRead the Press Release
PITTSBURGH, Pa. - A resident of Butler, Pa., pleaded guilty in federal court to charges of conspiracy and money laundering, United States Attorney David J. Hickton announced today.
Jeffrey Garbinski, 44, pleaded guilty to two counts before United States District Judge Cathy Bissoon.
In connection with the guilty plea, the court was advised that Garbinski owned and operated the Closing Company of PA ("Closing Company"), which closed residential real estate transactions. Sabrina Spetz was an attorney who closed many of the transactions at issue. Garbinski also operated a mortgage broker business called Main Street Mortgage Services, which did business as Asset Mortgage and Financial Services, Inc., and he was a title insurance agent.
Closing companies have trust accounts. What is supposed to happen is that the money from the lenders funding the loans goes into the trust account. At or shortly after the closing, those funds are disbursed consistent with the lender's instructions and the settlement statements. Most significantly with regard to this case, is that liabilities associated with the collateral are supposed to be paid immediately. Thus, the liens related to the property are paid and the lender stands in first lien position.
Rather than immediately paying the liabilities, Garbinski, with Spetz's knowledge and assistance, siphoned money from the company for years to support his lifestyle and for other business ventures. He would then use the money from the next transactions to pay the liabilities from the previous transactions. He would pay the monthly mortgage payments on the outstanding mortgages that should have already been paid to avoid discovery of his fraud. Eventually, the liabilities grew so large that Garbinski was no longer able to pay the liabilities and he filed for bankruptcy.
Although Garbinski committed this scheme regarding customers of the Closing Company, he also committed this scheme with his own personal residence. Dollar Bank funded a $600,000 loan to Garbinski arranged through his mortgage broker business and closed by the Closing Company. Basically, the loan through Dollar Bank was a typical refinance transaction in which all of the liabilities associated with the collateral, which was Garbinski's personal residence, were supposed to be paid off. Garbinski submitted a loan application that failed to report two significant mortgages on the property, and he also arranged to submit fraudulent title search records that did not reveal the two mortgages. Long after the loan closed, Dollar Bank discovered that they were in third lien position rather than first lien position. Now that Garbinski has filed for bankruptcy, Dollar Bank expects to suffer a total loss on that loan because the sale of the collateral is unlikely to pay off the first two liens on the property.
Ultimately, the title insurance company will likely have to pay substantial claims because of this fraud. The Closing Company was a representative of Fidelity National Title Insurance Company ("Fidelity"). Fidelity conducted an audit of the Closing Company of PA pursuant to the title insurance contract between Fidelity and the Closing Company. As part of that audit, Fidelity requested and obtained from Spetz bank statements that did not show the fraudulent withdrawals because the statements had been altered by Spetz at Garbinski's direction.
In terms of the money laundering, a homeowner sought to refinance a loan through Northwest Savings Bank. Because of concerns that Northwest had with Garbinski, Northwest refused to let the Closing Company close the transaction, and demanded that Fidelity close the transaction. Fidelity, however, was unaware of the transaction and did not close the loan. In order to make it appear that Fidelity was involved in closing the loan, the settlement statement was fabricated and provided to Northwest. The settlement statement falsely represented that Fidelity closed the transaction. In addition, Garbinski created a letter with wiring information for what was represented to be the trust account for Fidelity. In fact, the account number is for the Closing Company. The loan closed on Feb. 24, 2010, and was funded through a wire transfer from Northwest Savings Bank to the Citizens Bank account of the Closing Company. That money was supposed to have been used to pay off a liability associated with the collateral.
On Feb. 25, 2010, Garbinski withdrew $38,316 in cash from that account. Bank surveillance pictures showed Garbinski making the withdrawal. On that same day, Garbinski deposited $37,500 of that cash into the Clearview Federal Credit Union account of JAG Management LP, which was basically a shell company that Garbinski owned.
Judge Bissoon scheduled sentencing for July 24, 2013. The law provides for a total sentence of 50 years in prison, a fine of $1,500,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offenses and the criminal history, if any, of the defendant.
Assistant United States Attorney Brendan T. Conway is prosecuting this case on behalf of the government.
The Mortgage Fraud task Force conducted the investigation that led to the prosecution of Garbinski. The Mortgage Fraud Task Force is comprised of investigators from federal, state and local law enforcement agencies and others involved in the mortgage industry. Federal law enforcement agencies participating in the Mortgage Task Force include the Federal Bureau of Investigation; the Internal Revenue Service, Criminal Investigations; the United States Department of Housing and Urban Development, Office of Inspector General; the United States Postal Inspection Service; and the United States Secret Service. Other Mortgage Fraud Task Force members include the Allegheny County Sheriff's Office; the Pennsylvania Attorney General's Office, Bureau of Consumer Protection; the Pennsylvania Department of Banking; the Pennsylvania Department of State, Bureau of Enforcement and Investigation; and the United States Trustee's Office.
Bradenton Man Sentenced to 27 Years on Federal Child Pornography ChargesRead the Press Release
Tampa, FL - U.S. District Judge Elizabeth A. Kovachevich sentenced Brian Leavitt (25, Bradenton) yesterday to 27 years in federal prison for distribution and receipt of child pornography. The court also ordered Leavitt to forfeit a laptop computer and hard drive, which were used in the offense. He pleaded guilty on November 15, 2012.
According to court documents, in July 2010 and December 2010, Leavitt distributed at least eighty-six files of child pornography from his computer to undercover FBI agents through the use of a peer-to-peer file sharing program. In February 2011, Leavitt's computer was seized. A forensic search revealed more than 3,800 images and 13 videos of child pornography. Leavitt admitted to law enforcement agents that he had been seeking and downloading images and videos of child pornography. Leavitt had two prior juvenile adjudications for sex offenses against children.
This case was investigated by the Federal Bureau of Investigation. It was prosecuted by Assistant United States Attorney Jennifer L. Peresie.
It is another case 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.
Bankruptcy FraudRead the Press Release
Michael J. Moore, United States Attorney for the Middle District of Georgia, announced that Dr. George Robert Vito, who formerly practiced as a Podiatrist in Macon, Georgia, was indicted April 11, 2013 for four counts of Bankruptcy Fraud, in violation of Title 18 United States Code, Section 152(2).
The indictment alleges that Dr. Vito committed bankruptcy fraud by making false statements under oath by filing documents in his Chapter 7 bankruptcy case which were signed by him under penalty of perjury but intentionally omitted certain financial affairs, including Dr. Vito’s financial interests, control and ownership of a number of corporations. Dr. Vito is also charged with Bankruptcy Fraud for filing an Amendment to Statement of Financial Affairs Schedule in his bankruptcy case which intentionally omitted certain assets including cash, income, furniture, jewelry, real property and corporations.
The indictment further alleges that Dr. Vito knowingly and fraudulently made a false oath in his bankruptcy case by falsely asserting that his bankruptcy petition and supporting documents were true and correct. He is also charged with bankruptcy fraud by making a false oath for providing false testimony at the Creditor’s Meeting in connection with his Chapter 7 bankruptcy petition.
An indictment is only an accusation, and the defendant is presumed innocent until proven guilty at trial. An Initial Appearance hearing will be scheduled by the Court.
If convicted, Dr. Vito faces a maximum penalty on each count of five years imprisonment, a fine of $250,000 and $100 mandatory assessment fee.
This case was the result of a joint investigation with the United States Bankruptcy Trustee and the Federal Bureau of Investigation. Assistant United States Attorney Verda Colvin is prosecuting the case for the Government.Inquiries regarding the case should be directed to Sue McKinney, Public Affairs Specialist, United States Attorney’s Office at (478) 621-2601.
Baltimore Armed Career Criminal Exiled to over 23 Years for Illegally Possessing A Gun Used in A MurderRead the Press Release
Defendant Convicted of the Murder in State CourtBaltimore, Maryland - U.S. District Judge J. Frederick Motz sentenced Antonio Edwards, age 29, of Baltimore, Maryland, today to 278 months in prison followed by five years of supervised release for being a felon in possession of a firearm. Judge Motz found that Edwards was an armed career criminal based on five previous convictions for possession with intent to distribute narcotics.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Steven L. Gerido of the Bureau of Alcohol, Tobacco, Firearms and Explosives - Baltimore Field Division; Baltimore City State’s Attorney Gregg L. Bernstein; and Baltimore Police Commissioner Anthony W. Batts.
According to Edwards' plea agreement, Edwards was identified by eyewitnesses as the person who murdered Kinlaw Jones on December 26, 2009, in the 1800 block of East Pratt Street, shooting him multiple times. Police recovered eight .45 caliber shell casings from the scene, two fired bullets from the victim’s clothing and four additional. .45 caliber fired bullets were recovered during the autopsy. On January 2, 2010, police received an anonymous tip that Edwards, who had been arrested, may have had a weapon at 3039 Kenyon Avenue in Baltimore. Police learned that Edwards had rented a bedroom from the owner of 3039 Kenyon Avenue, who told police that Edwards had paid rent of $150 for the month of December and that he had stayed there as recently as the week of December 25, 2009.
A search warrant was executed for Edwards’ bedroom in the Kenyon Avenue home on January 7, 2010, and police recovered paperwork in Edwards’ name, a baseball hat, a black beanie and photos of Edwards. From the ceiling, police recovered a .45 caliber semi-automatic pistol, a holster, a box of .45 caliber ammunition, and a clear bag with rubber gloves inside. Ballistics analysis confirmed that the shell casings recovered from the scene of the murder and from the victim were fired by the .45 caliber semi-automatic pistol recovered from the room Edwards was renting. Forensic analysis also confirmed that Edwards’ DNA was present on the grip of the gun, the holster, rubber gloves, baseball hat and black beanie.
As part of his federal plea agreement, Edwards pleaded guilty to first degree murder and use of a handgun in the commission of a crime of violence in Baltimore City Circuit Court, and is set to be sentenced in that case. Judge Motz ordered that Edwards’ federal sentence will be served concurrent to this state sentence.
United States Attorney Rod J. Rosenstein commended the ATF, Baltimore Police Department and Baltimore City State’s Attorney's Office, and especially Assistant State’s Attorney Christopher Mason, for their work in the investigation and prosecution. Mr. Rosenstein thanked Assistant United States Attorney Michael C. Hanlon, who prosecuted the case.
As Tax Day Approaches, U.S. Attorney’s Office Pledges Pursuit of Tax OffendersRead the Press Release
MINNEAPOLIS—As Tax Day approaches, the U.S. Attorney’s Office reminds all Minnesotans that the deadline for filing federal income tax returns is Monday, April 15. To exemplify federal law enforcement’s commitment to pursue those who fail to pay their taxes or otherwise defraud the tax system, the Office noted that federal prosecutors in the District of Minnesota this week charged four individuals with tax-related crimes in three separate cases: On April 9, 2013, Roger Martin Pedley was indicted for evading taxes for tax years 2000-2009, and for knowingly structuring his financial transactions to evade federal reporting requirements. Pedley was charged with four counts of tax evasion, six counts of structuring cash transactions, and two counts of making false statements to a federal agent.
If convicted, Pedley faces a potential maximum penalty of five years in prison on each count. Any sentence would be determined by a federal district court judge. This case is the result of an investigation by the IRS-Criminal Investigation. It is being prosecuted by Assistant U.S. Attorney John Docherty.
In another case, charged on April 9, 2013, the former owner of Life Care PCA, a Farmington-based home health care company, was indicted for failing to pay federal income and employment taxes withheld from workers. The indictment charges Daniel Nok Musa with 14 counts of failure to account for and pay over withheld taxes. The indictment was unsealed following Musa’s initial appearance in federal court.
The indictment alleges that beginning in 2002, and for every quarter from at least January 1, 2005, through October 31, 2009, Musa failed to timely pay over to the IRS a total of approximately $180,000 in withheld employee taxes as well as the employer’s share of FICA taxes. From August 1, 2006, through November 1, 2009, Musa was the sole owner and president of Life Care.
If convicted, Musa faces a potential maximum penalty of five years in prison on each count. Any sentence would be determined by a federal district court judge. This case is the result of an investigation by the IRS-Criminal Investigation. It is being prosecuted by Assistant U.S. Attorney Michael L. Cheever.
In another indictment unsealed earlier this week, two executives of a Minnesota-based multi-level marketing company were charged for failing to file federal tax returns. The indictment, which was filed on April 9, 2013, charges Bradley Collin with one count of conspiracy to defraud the U.S. and three counts of failure to file a tax return. Michael Schlegel was charged with one count of conspiracy, three counts of tax evasion, and three counts of failure to file tax returns. The indictment was unsealed following the defendants’ initial appearance in federal court.
The indictment alleges that from 2002 through 2010, the defendants conspired with each other and others to defraud the U.S. by obstructing the IRS in its lawful collection of income taxes. To that end, Schlegel and Collin allegedly failed to make any payments toward the back taxes, interest and penalties levied against them in 2000, which totaled more than $600,000 and $800,000 respectively. The defendants also purportedly failed to file federal individual tax returns for tax years 2002-2009, pursuing “tax protestor” ideologies.
The indictment states that from 2002 to 2009, Schlegel controlled NatureRich, Inc., a multi-level marketing company that sold natural and health-related products. Like similar companies, NatureRich paid commissions to salespeople based on direct sales and on the sales of downstream salespeople. At various times between 2002 and 2009, Schlegel and Collin reportedly received wages and commission payments from NatureRich that totaled more than $400,000. Schlegel also purportedly caused NatureRich to pay his commissions to a nominee trust called the “Andrew James Living Trust,” from which he then paid his family’s expenses. During that time, Schlegel also operated a painting business, allegedly receiving more than $400,000 in income from painting contracts.In 2004, the defendants, through the use of nominee entities, allegedly began engaging the “warehouse” banking services of Olympic Business Systems and Century Business Concepts. “Warehouse” banking refers to the use of one or more bank accounts in which the funds of multiple clients are deposited, thereby concealing the true source of the funds.
The indictment alleges that the defendants also filed misleading federal corporate tax returns in the name of NatureRich in an effort to conceal the true extent of their personal interest in and the income derived from NatureRich. In all, the defendants allegedly attempted to conceal at least $3 million in gross income from the IRS, thereby avoiding income taxes on that income and also avoiding having those funds seized for payment of their previous tax debts.
If convicted, the defendants face a potential maximum penalty of five years in prison on the conspiracy count, and one year on each count of failure to file a tax return. In addition, Schlegel faces a potential maximum penalty of five years on each tax evasion count. All sentences will be determined by a federal district court judge.
This case is the result of an investigation by the IRS-Criminal Investigation. It is being prosecuted by Assistant U.S. Attorneys Tracy L. Perzel and Benjamin F. Langner.The District of Minnesota has been active in other tax cases. On April 9, 2013, in St. Paul, a Twin Cities-based attorney doing business as Sea Law Office, PLC, was sentenced for failing to report and pay taxes on more than $420,000 in income for tax years 2006 through 2010. United States District Court Judge Richard H. Kyle sentenced Bobby Gordon Okechuku Onyemeh Sea to eight months in prison on one count of filing a false U.S. Individual Income Tax Return. Sea was charged on November 2, 2012, and pleaded guilty on November 26, 2012.
From 2006 through 2012, Sea earned gross receipts for legal services, and in his plea agreement, he admitted failing to report those receipts on his tax returns. He also admittedly used the unreported income for his personal benefit. In addition, Sea admitted that on April 15, 2008, he filed a false 2007 tax return. Specifically, he reported a taxable income of $9,087, and refundable credits of $3,529, thus understating his taxable income by approximately $100,000 and claiming refundable credits that were not earned.
Sea also admitted filing false tax returns for tax years 2006, 2008, 2009, and 2010. As a result, he is admittedly responsible for a total tax loss of at least $80,000 but less than $200,000.
This case was the result of an investigation by the Internal Revenue Service-Criminal Investigation. It was prosecuted by Assistant U.S. Attorneys Timothy C. Rank and Ann M. Anaya.The District’s efforts to pursue tax dodgers were also enhanced last fall thanks to a U.S. Justice Department directive. In September 2012, the Department’s Tax Division issued a new directive to further the efforts of the Tax Division and U.S. Attorney offices in effectively responding to the grave challenges in stolen identity refund fraud (“SIRF”) cases. Tax Division Directive 144 now allows federal prosecutors to charge by complaint those criminals who are engaged in SIRF crimes. They may also obtain search warrants for the purpose of forfeiture of criminally derived proceeds arising from SIRF crimes, all without prior authorization from the Tax Division. To ensure fair and consistent nationwide enforcement of tax laws, the Tax Division has supervision over virtually all criminal proceedings arising under tax laws. Tax refund fraud, involving the use of stolen identities to steal refunds, has emerged as a fast-growing crime. Strong coordination at all levels of law enforcement is vital to combat these criminals.
The District of Minnesota is prosecuting several SIRF cases. Last month, three individuals pleaded guilty to participating in a conspiracy to file false tax returns to generate inflated refunds. Two of the defendants were licensed tax preparers. In November 2012, two defendants pleaded guilty to participating in a conspiracy to file false tax returns and claim tax refunds using stolen personal information.
For more information about the Tax Division and its enforcement efforts, visit www.justice.gov/tax. The Minnesota U.S. Attorney’s Office wants to remind people to protect themselves from identity theft. For more information, visit http://www.stopfraud.gov/protect-identity.html.An indictment is a determination by a grand jury that there is probable cause to believe that offenses have been committed by a defendant. A defendant, of course, is presumed innocent until he or she pleads guilty or is proven guilty at trial. Per U.S. Department of Justice policy, the U.S. Attorney’s Office is not allowed to provide the age and city of residence for defendants charged in criminal tax cases.
Armed Bank RobberyRead the Press Release
Michael J. Moore, United States Attorney for the Middle District of Georgia, announced that Eric Colbert, age 38, of Albany, Georgia, entered a plea of guilty today to Count One of an Indictment charging him with Armed Robbery, in violation of Title 18 United States Code, Section 2113(a) & (d) and Count Two charging Mr. Colbert with Discharging a Firearm During a Crime of Violence, in violation of Title 18 United States Code, Section 924(c) (1). Mr. Colbert entered his plea before the Honorable W. Louis Sands, United States District Judge in Albany, Georgia.
As part of his plea of guilty, Mr. Colbert admitted that on the morning of November 18, 2011, he entered First State Bank in Albany, Georgia, held up a gun, fired a shot into the ceiling, and shouted, “This is a robbery!” Mr. Colbert also admitted firing an additional shot at an Albany Police Department officer who was in the bank, and then firing several shots behind him as he fled from the bank with the officer in pursuit. Mr. Colbert was apprehended shortly after his attempt to rob the First State Bank. No money was stolen from the Bank, and no one was hurt.
The maximum penalty for Count One is twenty-five (25) years in prison and a fine of $250,000.00, or both, followed by a term of supervised release of five (5) years. Count Two carries a mandatory minimum term of imprisonment of ten (10) years up to a maximum of life in prison, a fine of $250,000.00, or both, followed by a term of supervised release of five (5) years. The sentence imposed pursuant to Count Two will run consecutively to any other term of imprisonment.
The case was investigated by the Federal Bureau of Investigation, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Albany Police Department. Assistant United States Attorney Peter Leary is handling the prosecution for the Government.
Inquiries regarding the case should be directed to Sue McKinney, Public Affairs Specialist, United States Attorney’s Office at (478) 621-2601.
Arizona Businessmen and California Attorney Convicted for Hiding Millions in Secret Foreign Bank Accounts at UBS AG and Pictet & CieRead the Press Release
A jury convicted Stephen M. Kerr and Michael Quiel yesterday on federal tax charges stemming from their failure to disclose secret offshore bank accounts in Switzerland, the Justice Department and Internal Revenue Service (IRS) announced. Kerr and Quiel, prominent Phoenix businessmen, were each convicted of two counts of filing false individual income tax returns for 2007 and 2008 . Kerr was also convicted of two counts of failing to file a Report of Foreign Bank and Financial Accounts (FBAR). San Diego attorney Christopher M. Rusch had previously pleaded guilty to conspiracy to defraud the government and failing to file an FBAR on Feb. 6, 2013.
According to the evidence presented at trial, Kerr and Quiel, with the assistance of Rusch and others, including Swiss nationals, established nominee foreign entities and corresponding bank accounts at UBS AG and Pictet & Cie to conceal Kerr and Quiel’s ownership and control of stock and income that were deposited into these accounts. Rusch testified at trial, admitting that he and others caused the sale of the shares of stock through the undeclared accounts . Kerr also hired Rusch to facilitate the domestic sale of 11.4 million shares of stock held in the name of a foreign entity controlled by Kerr and to transfer the proceeds from the sale of the stock to an undeclared foreign account at UBS AG to conceal that the money was income to Kerr that should have been reported on his tax returns.
The evidence established that in order to create a further layer of separation between Kerr and Quiel and the income they concealed in the undeclared foreign accounts, they directed Rusch to transfer some of the money in the undeclared accounts back to the United States through Rusch’s Interest on Lawyer’s Trust Account (IOLTA) before dispersing the money for Kerr and Quiel’s benefit. Rusch transferred approximately $2,000,000 through his IOLTA account so that Kerr could purchase a golf course in Erie, Colo. Additionally, after transferring approximately $955,000 from Quiel’s undeclared foreign accounts to his IOLTA account, at Quiel’s direction, Rusch wrote checks payable to an Arizona bank account owned and controlled by Quiel.
According to trial evidence, Kerr and Quiel filed false tax returns with the IRS that failed to report the proceeds of stock sales, interest and dividend income earned through the secret accounts, and further failed to report that they had a financial interest in bank accounts located in Switzerland. Kerr also failed to file FBARs in 2007 and 2008 that reported his offshore accounts to the IRS. Accountants for Kerr and Quiel testified that neither Kerr nor Quiel disclosed the existence of their offshore accounts in Switzerland during the preparation of their tax returns.
“Many investigations are underway and focusing upon an ever wider circle of banks worldwide, their clients and others who would help the clients try to hide income and assets offshore,” said Assistant Attorney General for the Justice Department’s Tax Division Kathryn Keneally. “The lesson of today’s guilty verdicts is that no hiding place will prove safe enough.”
“This prosecution serves notice that the Department of Justice will not tolerate fraudulent activity designed to undermine the integrity of our income tax system,” said U.S. Attorney for the District of Arizona John S. Leonardo.
“Clients, as well as promoters, of international tax fraud are under the watchful scrutiny of the IRS.” said Richard Weber, Chief, IRS-Criminal Investigation. “Mr. Kerr and Mr. Quiel disregarded their legal responsibility to file true and accurate tax returns reporting all their income and interest. They now face substantial monetary penalties and the risk of incarceration.”
U.S. citizens who have an interest in, or signature or other authority over, a financial account in a foreign country with assets in excess of $10,000 are required to disclose the existence of such accounts on Schedule B, Part III, of their individual income tax returns. Additionally, U.S. citizens must file an FBAR with the U.S. Treasury disclosing any financial account in a foreign country with assets in excess of $10,000 in which they have a financial interest, or over which they have signature or other authority.
Sentencing for Kerr and Quiel is scheduled for June 25, 2013. Sentencing for Rusch is scheduled for July 17, 2013.
Department of Justice Tax Division Assistant Attorney General Kathryn Keneally thanked special agents of IRS-Criminal Investigation, who provided valuable assistance in conducting the investigation, and Trial Attorneys Timothy Stockwell and Monica Edelstein who prosecuted the case.
Additional information about the Justice Department’s Tax Division and its enforcement efforts may be found at www.justice.gov/tax/ .
Approximately $1 Million Worth of Food Products Seized from V.I.P. Foods, Inc.’s Ridgewood, New York FacilityRead the Press Release
Loretta E. Lynch, United States Attorney for the Eastern District of New York, today announced the unsealing of a civil complaint and the seizure of approximately $1,000,000 worth of food products from V.I.P. Foods, Inc. (“V.I.P.”) pursuant to a warrant issued by United States District Judge Nicholas G. Garaufis. The complaint alleges that V.I.P. violated the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. § 301, et seq. The suit seeks forfeiture and condemnation of the adulterated food products.
V.I.P., based in Ridgewood, New York, is a manufacturer, warehouse, and repacker of various formulated dried mixes and bases such as chicken soup base, blueberry muffin mix, pancake mix, and flavored mashed potatoes. V.I.P.’s products are distributed under various names including V.I.P. Foods, VIP Foods, and KoJel. V.I.P. also distributes products under private label. The government’s claims arose from an investigation conducted by the FDA which revealed widespread rodent infestation, other insanitary conditions, and issues with V.I.P.’s building structure which provide entryway for insects and rodents. The complaint alleges that FDA inspectors observed live and dead rodents, rodent-gnawed containers of food, rodent nests within pallets of food and packaging materials, rodent excreta pellets too numerous to count scattered throughout V.I.P.’s premises, and rodent urine stains on and around food product and food product packaging.
“VIP’s warehouse was a picnic ground for rodents, and the company failed utterly in its obligation to provide food deemed safe for human consumption. Those who store, package, and sell the food we serve our families have a responsibility to maintain basic standards of cleanliness in their facilities. We are committed to protecting the public from health risks and ensuring that food manufacturers comply with the federal laws prohibiting them from preparing, packing, and holding food products under unsanitary conditions,” stated United States Attorney Lynch.
The government’s case is being litigated by Assistant United States Attorney Melanie D. Hendry.
Anchorage Man imprisoned for "Crash for Cash" Insurance ScamRead the Press Release
Anchorage, Alaska - U.S. Attorney Karen L. Loeffler announced today that an Anchorage resident who had been indicted for three separate instances of wire fraud in connection with an insurance scam was sentenced Tuesday in federal court in Anchorage.
Rustem Mukhametshin, 26, was sentenced by U.S. District Court Judge Timothy Burgess, to 12 months in prison, to be followed by three years of supervised release and to make restitution payments totaling more than $70,000. Mukhametshin, who is a citizen of Russia, plead guilty in January 2013, and is scheduled to be deported from the United States at the conclusion of his prison sentence.
According to Assistant U.S. Attorney Bryan Schroder, who prosecuted the case, Mukhametshin was a principle figure in a unique and extensive scheme to defraud insurance companies for tens of thousands of dollars. Mukhametshin exploited a weakness in the practices of the insurance companies since they generally do not inspect vehicles when they issue an insurance policy. The companies assume that the vehicle being insured is of a reasonable condition, making its value consistent with other cars of the same make, model, production year, and mileage. Mukhametshin exploited that practice by buying damaged cars at rates well below the standard value, and then staging accidents with the damaged cars he purchased. The difference between the low value of the damaged cars and the value of an undamaged standard vehicle of similar model, year, mileage, was then taken as profit. Mukhametshin staged four of these accidents and only stopped the criminal activity after the insurance company refused to pay.
Assistant U.S. Attorney Bryan Schroder further stated that Mukhametshin’s scheme was even more extensive because confederates of the defendant were staging similar fraudulent “accidents.” The loss amount directly attributable to the defendant’s actions was $70,656.70.
Ms. Loeffler commends the Federal Bureau of Investigation for the investigation on this case.Alleged Marijuana Trafficker Detained on Federal Firearms and Drug ChargesRead the Press Release
PROVIDENCE, R.I. – Casey J. Dunphy, 38, of Providence, was ordered detained in federal custody on April 11, 2013, following an initial appearance in federal court on firearms and drug charges, announced United States Attorney Peter F. Neronha, Providence Police Chief Colonel Hugh T. Clements, Jr., and Eugenio A. Marquez, Acting Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Boston Field Office.
Dunphy was arrested on March 22, 2013, by detectives with the Providence Police Department’s Narcotics and Organized Crime Bureau after a court authorized search of his residence resulted in the seizure of 34 marijuana plants; containers and bags containing approximately 750 grams of marijuana; a semiautomatic assault rifle and ammunition, including two fully loaded and four unloaded magazines; a .44 caliber revolver loaded with hollow point ammunition; a shotgun; additional ammunition for each weapon, including a speed loader for the .44 caliber revolver; and $15,500 dollars in cash.
Dunphy is charged with one count each of manufacture of marijuana, possession with intent to distribute marijuana, being a felon in possession of a firearm, possession of firearms in furtherance of drug trafficking, and possession of a semiautomatic assault weapon in furtherance of drug trafficking.
According to information provided to the court, Dunphy, a licensed medical marijuana caregiver, was serving a 5-year probationary term on a previous drug trafficking conviction in state court at the time of his arrest. Dunphy has been detained since his arrest.
According to an affidavit in support of a criminal complaint filed with the court, on March 22, 2013, detectives with the Providence Police Department’s Narcotics and Organized Crime Bureau observed an alleged drug transaction between Dunphy and another person while the two were inside a vehicle parked in front of Dunphy’s residence. According to the affidavit, after Dunphy returned to his residence, detectives followed the vehicle and stopped it a short distance away. The driver allegedly admitted to detectives that he had just bought marijuana from Dunphy, and that he had done so previously on multiple occasions. The individual allegedly told detectives that he is not enrolled as a medical marijuana patient.
A criminal complaintis merely an allegation and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Manufacture of fewer than 50 marijuana plants is punishable by a maximum sentence of 5 years in federal prison and 3 years supervised release; possession with intent to distribute less than 50 kilograms of marijuana is punishable by a maximum sentence of 5 years in federal prison and 3 years supervised release; being a felon in possession of a firearm is punishable by a maximum sentence of 10 years in federal prison and 3 years supervised release; possession of firearms in furtherance of drug trafficking is punishable by a mandatory minimum sentence of 5 years in federal prison, to be served consecutive to all other sentences imposed, and 3 years of supervised release; and possession of a semiautomatic assault weapon in furtherance of drug trafficking is punishable by a mandatory minimum sentence of 7 years in federal prison, to be served consecutive to all other sentences imposed, and 3 years of supervised release.
The case is being prosecuted by Assistant U.S. Attorney Milind M. Shah.The matter was investigated by the Providence Police Department’s Narcotics and Organized Crime Bureau and ATF.
Contact: 401-709-5357
[email protected]Albuquerque Couple Arraigned on Federal Wire Fraud Charges Arising Out of Alleged Scheme to Defraud Office Supply BusinessRead the Press Release
ALBUQUERQUE – Matthew Channon, 36, and his wife Brandi Channon, 33, both of Albuquerque, N.M., were arraigned in federal court this morning on an eleven-count indictment charging them with wire fraud. Both entered not guilty pleas and were released under pretrial supervision pending trial, which has yet to be scheduled.
The indictment alleges that the Channons engaged in unlawful schemes to defraud OfficeMax of more than $100,000.00 by creating numerous MaxPerk Rewards accounts in fictitious names, addresses and phone numbers in order to avoid OfficeMax’s policy of issuing only one account per person, and using the accounts to claim rewards from OfficeMax to which they were not entitled.
Counts 1 through 6 of the indictment, each of which charges Matthew Channon with wire fraud, allege that, between March 2010 and Sept. 2010, Matthew Channon perpetuated a scheme to defraud OfficeMax by creating more than 5,400 MaxPerk Rewards accounts; using OfficeMax receipts for purchases made by other customers to claim rewards that were issued to accounts he controlled; purchasing items at OfficeMax using the rewards; and reselling the items for cash. Matthew Channon allegedly falsely claimed almost 47,700 purchases for MaxPerk Rewards accounts that he controlled, generating more than $180,000.00 in rewards that were issued to those accounts.
Counts 7 through 10 of the indictment, each of which charges Matthew and Brandi Channon with wire fraud, allege that, between Sept. 2009 through June 2011, Matthew and Brandi Channon engaged in a scheme to defraud OfficeMax by using MaxPerk Rewards accounts to obtain rewards through the company’s ink and toner cartridge recycling program. The Channons allegedly created approximately 120 MaxPerk Rewards accounts; purchased thousands of used ink and toner cartridges at low cost; and presented approximately 24,935 of used ink and toner cartridges for recycling at OfficeMax, causing approximately $74,800.00 in rewards to be issued to MaxPerk Rewards accounts they controlled.
Count 11 of the indictment charges the Channons with conspiring to commit wire fraud in connection with the scheme charged in Counts 7 through 10. The indictment also includes forfeiture allegations which seek to forfeit property constituting or derived from the proceeds of the Channons’ illegal activities. It seeks a money judgment in the amount of $109,158.13, the money the Channons allegedly derived from their unlawful conduct.
A conviction on each of the eleven counts in the indictment carries a maximum penalty of 20 years in prison and a $250,000.00 fine. An indictment is merely an accusation. All criminal defendants are presumed innocent unless found guilty beyond a reasonable doubt.
The case was investigated by the Albuquerque Division of the FBI and is being prosecuted by Assistant U.S. Attorney C. Paige Messec.