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Friday 15 February 2013
Pair Sentenced to Federal Prison in Connection with Foreign Currency Exchange Releated Ponzi SchemeRead the Press Release
Scheme resulted in an estimated $10.6 million loss to over 150 investors
In Austin this morning, 43-year-old Christopher Brown Cornett of Buda, TX, and 49–year-old Heidi Beryl Beyer of Scottsdale, AZ, were sentenced to 40 years and six years in federal prison, respectively, for carrying out a Ponzi scheme which victimized more than 150 individuals and resulted in a total estimated loss to investors of over $10.6 million announced United States Attorney Robert Pitman, Federal Bureau of Investigation Special Agent in Charge Armando Fernandez and Internal Revenue Service-Criminal Investigation Special Agent in Charge Steve McCollough.
In addition to the prison terms, United States District Judge Sam Sparks ordered that the defendants jointly and severally pay restitution in the amount of $9,525,031.77. Judge Sparks ordered Cornett to pay an additional $795,701.62 restitution. Furthermore, Judge Sparks ordered that both defendants be placed under supervised release for a period of three years after completing their prison terms.
“Mr. Cornett and Ms. Beyer defrauded investors out of millions of dollars, and the sentences handed down today exemplify the consequences criminals face for such crimes. Investment schemes cause serious damage to victims, both financially and emotionally, and therefore demand serious punishments. My office is committed to bringing white collar criminals to justice, and today’s sentences are evidence of that commitment,” stated United States Attorney Robert Pitman.
In October 2012, Cornett pleaded guilty to one count of conspiracy to commit wire fraud and one count of conspiracy to commit money laundering; Beyer pleaded guilty to one count of wire fraud. By pleading guilty, Cornett admitted that from April 2008 to October 2011, he devised a scheme to obtain money from investors under false pretenses. Beyer joined in the scheme in September 2009. According to court records, the defendants represented to investors that their money would be placed into a common pool of funds that would be invested in foreign currency exchange trades, and that investors would receive the profits of the trades, less a fixed share of the profits for the defendants (usually between 25 to 30% of the profits). These representations were made both orally and in writing, in the form of emails and, eventually, in the form of a Subscription Agreement each investor had to sign.
Information which the defendants failed to disclose to investors included the fact that: Cornett had previously been fired from Morgan Stanley for failure to follow company rules; Cornett was terminated from Brookstreet Securities in 2002 because he had violated securities regulations; on January 8, 2003, the National Association of Securities Dealers (“NASD”) barred Cornett from associating with any member of the NASD in any capacity based on Cornett’s theft of approximately $28,000 of an investor’s money; Cornett was not properly registered as required by the Commodities Exchange Act and CFTC regulations; as well as Cornett’s previous federal conviction in 2003 for five counts of federal bank fraud and the fact that he served two years in federal prison as a result of that prior conviction.
According to court records, the defendants solicited from pool participants a total of approximately $14.6 million during their scheme. The defendants lost approximately $7.3 million of the pool’s funds in foreign currency exchange trading. They used the remaining pool funds for personal enrichment or to make payments to other investors so as to lull those investors into the mistaken belief that their investment was profitable and sound. Court records reflect that Cornett used pool funds to cover gambling losses in Las Vegas which exceeded $600,000 and to purchase a new Chevrolet Corvette.
“This type of scheme threatens our economy and undermines the trust in our financial system,” stated Internal Revenue Service-Criminal Investigation Special Agent in Charge Steve McCollough. “IRS-Criminal Investigation wants to make sure that criminals face the consequences of their actions just as these defendants did.”
“The FBI, IRS-CI and the Western District of Texas United States Attorney's Office recognize the importance of protecting Americans from criminals who steal from victims without violence but through broken promises and deceit. Americans now, more than ever in tough economic times, count on law enforcement to protect them from white collar criminals and to send messages to future fraudsters that these law enforcement agencies will actively pursue them to ensure crime does not pay,” stated Federal Bureau of Investigation Special Agent in Charge Armando Fernandez.
This investigation was conducted by the Internal Revenue Service-Criminal Investigation and the Federal Bureau of Investigation. Assistant United States Attorney Chris Peele prosecuted this case on behalf of the Government.
Owner and Operator of Anti-Aging Center Sentenced for Distributing Growth HormonesRead the Press Release
SHREVEPORT, La: United States Attorney Stephanie A. Finley announced today that Dallas Day Humble, 53, of Monroe, was sentenced Thursday to 27 months in prison and two years of supervised release for conspiracy to import and distribute and distribution of human growth hormones. Humble was also ordered to pay a forfeiture money judgment of $585,648 jointly with co-defendant Linda Bunch Wells.
Co-defendant Linda Bunch Wells, 53, of Monroe, was sentenced Jan. 24, 2013 to 27 months in prison with two years of supervised release for distributing and importing human growth hormones at the Northeast Louisiana Anti-Aging and Wellness Center (NLAW) in Monroe. Co-defendant Paul N. Temple, 56, of Monroe, was sentenced Aug. 31, 2012 to five years supervised probation for facilitation and receipt of human growth hormones he purchased for the center.
According to court documents, Humble, who owned and operated the NLAW, asked Temple in the summer of 2003 to locate a company and buy human growth hormones for distribution at the center. The hormones were part of a so-called anti-aging program for patients. Some of the human growth hormones administered were illegally imported into the United States from China. Humble and his business partners would order hormones from overseas, and the packages would be labeled as non-medical products in order to pass through U.S. Customs.
Under federal law, human growth hormones may only be prescribed for the treatment of specified diseases and medical conditions. Evidence at sentencing revealed that the company administered more than 26,926 units of the hormones over the five-year period totaling more than $406,000 in sales.“The center’s operation facilitated the distribution of a controlled substance that could have caused harm instead of helping those in the community, ” Finley said. “We will not ignore this kind of illegal activity, and any involved in conspiracies should know that they will be investigated and prosecuted.”
The Food and Drug Administration/Office of Criminal Investigations and Louisiana State Police conducted the investigation. Assistant U.S. Attorney Earl Campbell prosecuted the case.
Olney Man Sentenced on Methamphetamine Related ChargesRead the Press Release
Fe bruary 15, 2013Brian K. Boulb, 43, of Olney, IL, was sentenced to federal prison on drug charges, Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today. Boulb was sentenced to 235 months in prison, four years supervised release following his imprisonment, and fined $300.
Boulb had previously pleaded guilty to a three count federal indictment. Count 1 charged that from November, 2009, until August 7, 2012, Boulb conspired to manufacture more than 50 grams of methamphetamine. Count 2 charged that from on or about November 20, 2009, to July 15, 2012, Boulb knowingly and intentionally possessed pseudoephedrine, knowing and having reasonable cause to believe it would be used to manufacture methamphetamine. Count 3 charged that on August 7, 2012, Boulb knowingly and intentionally possessed equipment, chemicals, products, or materials, knowing the items would be used to manufacture methamphetamine.
The investigation was conducted by the Richland County Sheriff’s Office. The case is being handled by Assistant United States Attorney George Norwood.
Olney Man Sentenced on Methamphetamine Related ChargesRead the Press Release
Christopher P. Stout, 31, of Olney, IL, was sentenced to federal prison on drug charges, Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today. Stout was sentenced to 120 months in prison, six years supervised release following his imprisonment, and fined $200.
Stout had previously pleaded guilty to a two count federal indictment. Count 1 charged that from 2010, until January 26, 2012, in Richland and Clay Counties, Stout conspired with others to manufacture methamphetamine. Count 2 charged that from June, 2010, to May 17, 2012, in Richland County, Stout possessed pseudoephedrine, knowing and having reasonable cause to believe that the pseudoephedrine would be used to manufacture methamphetamine.
The investigation was conducted by the Richland County Sheriff’s Office. The case is being handled by Assistant United States Attorney George Norwood.
Nine People Indicted for Defrauding Medicaid and Social Security Benefit ProgramsRead the Press Release
COVINGTON, KY - Nine people were charged with fraudulently collecting money and benefits from federal and state assistance programs, for more than a decade in some cases.
A federal grand jury in Covington returned seven indictments Thursday evening charging a man and seven women from Carter, Boyd, Lawrence, Morgan and Bracken County with Supplemental Security Income (SSI) fraud and health care fraud. An additional man was charged only with making false statements related to alleged fraud and one of the women was also charged with aggravated identity theft.
According to the indictments, the defendants fraudulently obtained benefits from the Social Security Administration (SSA) and Medicaid by concealing and intentionally failing to disclose their true living arrangements and financial resources.
The indictments allege that over the course of years, many of the defendants told SSA agents that they had divorced or separated from their spouses, when in fact they were living together and sharing living expenses. Had SSA known the defendants’ true living arrangements and financial resources, the defendants would have been ineligible for SSI and Medicaid benefits, or their eligibility would have been reduced greatly.
SSI is a cash assistance program designed to provide financial assistance to disabled and elderly people who have little or no income or resources. Based on an agreement between Kentucky and the SSA, Kentuckians who are eligible for SSI also qualify for Medicaid coverage.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky and Guy P. Fallen, Special Agent in Charge, Social Security Administration jointly announced the indictments.
The investigation was conducted by the SSA. Assistant U.S. Attorney Chris Nasson represents the U.S. Attorney’s Office in this case.
A date for the defendants to appear in court has not yet been set. If convicted, the defendants face up to five years in prison for the SSI charge and 10 years on the health care fraud charge. However, any sentence following a conviction would be imposed after the Court reviews the U.S. Sentencing Guidelines and the federal statutes.
New Jersey Man Sentenced to 20+ Years in Prison for Heroin Trafficking SchemeRead the Press Release
PITTSBURGH, Pa. - A resident of Wallington, New Jersey, has been sentenced in federal court to 262 months imprisonment (22 years, 10 months), to be followed by a 10-year term of supervised release, on his conviction of violating the federal narcotics laws, United States Attorney David J. Hickton announced today.
United Stated District Judge Terrence F. McVerry imposed the sentence on Wesley A. McDaniels, a/k/a "Young," 33
According to information presented to the court, from in or around February 2009, to on or about May 9, 2011, McDaniels conspired to possess with intent to distribute and distribute between 700 and 1,000 grams or more of heroin in the Pittsburgh area. McDaniels has four previous drug felony convictions, and served a period of imprisonment on each one of them. He qualified as a "career offender" under the federal sentencing guidelines based upon his extensive criminal history.
Assistant United States Attorney Stephen R. Kaufman prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Drug Enforcement Administration for the investigation leading to the successful prosecution of McDaniels.
New Haven Man Pleads Guilty to Federal Narcotics Conspiracy ChargeRead the Press Release
February 15, 2013David B. Fein, United States Attorney for the District of Connecticut, today announced that CORNELL STREATER, also known as “Messy,” 21, of Shelton Avenue, New Haven, pleaded guilty yesterday before United States Magistrate Judge Holly B. Fitzsimmons in Bridgeport to one count of conspiracy to possess and distribute cocaine base (“crack cocaine”).
According to court documents and statements made in court, this matter stems from an investigation conducted by the FBI New Haven Safe Streets Task Force, the New Haven Police Department and the Connecticut State Police into drug distribution and related violence allegedly being committed by members and associates of the Grape Street Crips in New Haven.
STREATER is scheduled to be sentenced by Senior United States District Judge Warren W. Eginton on May 9, 2013, at which time STREATER faces a maximum term of imprisonment of 20 years and a fine of up to $1 million.
On April 9, 2012, a grand jury returned an indictment charging 18 individuals, including STREATER, with narcotics distribution offenses stemming from this investigation. To date, nine of the defendants have pleaded guilty. The other nine defendants are detained while awaiting trial.
With respect to the defendants awaiting trial, U.S. Attorney Fein stressed that an indictment is not evidence of guilt. Charges are only allegations, and each defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This case was being investigated by the FBI’s New Haven Safe Streets Task Force, which includes officers from the New Haven, Hamden and Milford Police Departments, and the State of Connecticut Department of Correction. The investigation was significantly assisted by the Connecticut State Police, the United States Marshals Service and the Westerly (R.I.) Police Department.
The investigation was funded in significant part by the United States Attorney’s Office Organized Crime Drug Enforcement Task Force and supported by the Office’s Project Safe Neighborhoods and Anti-Gang programs.
This case is being prosecuted by Assistant United States Attorneys Anthony Kaplan and Gordon Hall.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
[email protected]New Haven Drug Dealer Sentenced to Five Years in Federal PrisonRead the Press Release
February 15, 2013David B. Fein, United States Attorney for the District of Connecticut, announced that JAVIER SERRANO, also known as “Javi,” 21, of New Haven, was sentenced today by United States District Judge Robert N. Chatigny in Hartford to 60 months of imprisonment, followed by four years of supervised release, for distributing narcotics in New Haven.
According to court documents and statements made in court, in April 2011, the Bureau of Alcohol, Tobacco, Firearms and Explosives, in conjunction with the Drug Enforcement Administration and the New Haven Police Department’s Tactical Narcotics Unit, began an intensive investigation into drug dealing in the vicinity of 36 Maltby Place in the Fair Haven section of New Haven. The investigation, which included the use of court-authorized wiretaps, law enforcement surveillance and controlled purchases of crack cocaine and cocaine from a number of individuals, revealed that SERRANO and others operated an open-air narcotics market where they sold crack cocaine, cocaine, and heroin to customers on a daily basis.
SERRANO has been detained since his arrest on November 16, 2011. On October 1, 2012, he pleaded guilty to one count of conspiracy to distribute and to possess with intent to distribute 28 grams or more of cocaine base (“crack”), a quantity of cocaine and a quantity of heroin.
This matter is being investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Drug Enforcement Administration and the New Haven Police Department’s Tactical Narcotics Unit. The Stamford Police Department has provided critical assistance to the investigation.
This case is being prosecuted by Assistant United States Attorneys Anthony E. Kaplan and Marc H. Silverman.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
[email protected]Nashville Musician Pleads Guilty in Federal Court to Attempted Enticement of A MinorRead the Press Release
Banjo Player Was in Dallas to Perform With Country Music Band at Local Bar
DALLAS — Abraham Eugene Spear, 30, of Nashville, Tennessee, pleaded guilty this morning in federal court in Dallas, before Chief U.S. District Judge Sidney A. Fitzwater, to one count of attempted enticement of a minor. He faces a statutory penalty of not less than 10 years and not more than life in prison, a $250,000 fine and a lifetime of supervised release. Spear, who has been in federal custody since his arrest in September 2012, in Dallas, is to be sentenced by Judge Fitzwater on June 7, 2013. Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
Spear admitted that from August 27, 2012, through September 20, 2012, he used the Internet and a cell phone to knowingly attempt to persuade an individual, whom he believed to be a seven-year-old girl, to engage in sexual activity. Spear, using the monikers of MUSICMAN30 and BANJOPAINE, communicated over several weeks with an undercover law enforcement agent, whom Spear believed to be the mother of two girls, ages seven and nine. During these communications, he persuaded, or attempted to persuade, the “mother” to allow him to meet her two girls to engage in different sexual acts with him. On September 20, Spear traveled from Tennessee to Dallas to perform with the Josh Thompson band at a bar in Dallas. That day, he agreed to meet the mom at a restaurant in Dallas, and after he was identified, he was arrested by special agents with the FBI. Spear admitted that many of the messages he sent were sexual in nature and geared toward the “mother’s” seven and nine-year-old daughters. Spear also admitted sending a sexually explicit photo of himself to the “mother,” asking what the girls would think of the photo.
Spear also admitted that he had engaged in sexually explicit communications with other mothers of minor girls, including one in which he offered to pay $200 to engage in sexual acts with the mother’s minor daughter.
The matter was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”
The investigation was conducted by the FBI. Assistant U.S. Attorney Camille Sparks is in charge of the prosecution.
Milton man Pleads Guilty to Illegally Receiving More than $300,000 in Social Security PaymentsRead the Press Release
LAFAYETTE, La: United States Attorney Stephanie A. Finley announced today that Randy P. Courville, 53, of Milton, La., pleaded guilty before U.S. District Judge Elizabeth E. Foote to defrauding $324,818 from the Social Security Administration (SSA).
According to court documents, Courville received Social Security disability payments from early 1995 until March 2012 even though he continuously worked selfemployed as a painter. He owned his own business called R.T’s painting, which was later changed to Affordable Painting. Courville’s wife and three children also received benefits during this time. The SSA informed Courville after he started receiving benefits that should he be able to work or had completed any work that he, Courville, was required to notify their office. At no time between 1995 and 2012 did Courville notify SSA that he was able to or had completed any work.
Courville faces a maximum penalty of up to 10 years in prison, a $250,000 fine or both, and three years of supervised release for the count of theft of government money. He is required to pay $324,818 in restitution. Courville is scheduled to appear June 21, 2013 for sentencing in U.S. District Court in Lafayette.
“Courville worked at his private business while taking money that was meant for those who cannot work,” Finley said. “This case should serve as a warning to anyone who lies in order to receive benefits that we do not take the defrauding of SSA lightly.”
The Social Security Administration-Office of Inspector General conducted the investigation. Assistant U.S. Attorney Kelly Uebinger is prosecuting the case.
Milford Man Sentenced to Five Years in Federal Prison for Distributing Child PornographyRead the Press Release
February 15, 2013David B. Fein, United States Attorney for the District of Connecticut, announced that ROLAN SOSA, 36, of Milford, was sentenced today by United States District Judge Vanessa L. Bryant in Hartford to 60 months of imprisonment for receiving and distributing child pornography. SOSA also was ordered to pay a $20,000 fine.
According to court documents and statements made in court, on November 16, 2011, detectives assigned to the Connecticut Child Exploitation Task Force in New Haven logged into a publicly available Internet file sharing program and downloaded 14 images of child pornography from a shared directory maintained by SOSA.
On December 15, 2011, SOSA was arrested at his residence in Milford. On that date, law enforcement agents also seized SOSA’s laptop computer. Subsequent analysis of the seized computer revealed 110 images and 134 video files of child pornography. Included in his collection of child pornography were images of children under the age of 12 engaged in sexually explicit conduct. Forensic review also revealed that SOSA distributed child pornography images and videos through the file sharing program located on his computer.
SOSA has been detained since his arrest. On October 9, 2012, he pleaded guilty to one count of receipt of child pornography.
This matter was investigated by the Federal Bureau of Investigation and the Connecticut Child Exploitation Task Force, which includes federal, state and local law enforcement agencies. The case was prosecuted by Assistant United States Attorney Henry Kopel.
The Connecticut Child Exploitation Task Force, which is housed at the main FBI office in New Haven, investigates crimes against children occurring over the Internet, and provides computer forensic review services for participating agencies. For more information about the Task Force, or to report child exploitation crimes, please contact the FBI at 203-777-6311.
This prosecution is part of the U.S. Department of Justice’s Project Safe Childhood Initiative, which is aimed at protecting children from sexual abuse and exploitation. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
To report cases of child exploitation, please visit www.cybertipline.com.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
[email protected]Massillon Man Charged with Bank RobberyRead the Press Release
A federal grand jury returned a one-count indictment charging Alexander D. Love, age 21, of Massillon, Ohio, with bank robbery, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
The indictment charges that on January 10, 2013, Love robbed the Charter One Bank located at 54 Federal Avenue, NE, Massillon, Ohio.
If convicted, the defendant’s sentence will be determined by the Court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violation. The sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
The matter was investigated by the Massillon Police Department and the Federal Bureau of Investigation’s Canton Office. The case is being prosecuted by Trial Attorney Kevin Culum.
An indictment is only a charge 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.
Maryland Man Pleads Guilty in Scheme That Used Stolen Identifying Information to Seek More Than $20 Million in Fraudulent Tax Refunds-Identities Stolen from Nursing Home Patients, Others-Read the Press Release
WASHINGTON – Kevin Brown, 42, of Capitol Heights, Md., pled guilty today to federal charges stemming from his role as a key organizer and leader of an identity theft and tax fraud scheme involving the filing of returns seeking more than $20 million in fraudulent refunds.
The guilty plea was announced by U.S. Attorney Ronald C. Machen Jr.; Thomas J. Kelly, Special Agent in Charge of the Washington Field Office of the Internal Revenue Service-Criminal Investigation (IRS-CI); Gary R. Barksdale, Inspector in Charge of the Washington Division of the U.S. Postal Inspection Service; Eric M. Thorson, Inspector General, U.S. Department of Treasury; and David Beach, Special Agent in Charge, Washington Field Office, U.S. Secret Service.
The case represents one of the largest prosecutions to date involving the use of stolen identifying information.
According to evidence presented to the Court by Assistant U.S. Attorney Sherri L. Schornstein, the defendant was among participants in a massive identity theft and false tax refund scheme involving an extensive network of more than 100 people, many of whom were receiving public assistance. It also involves bank tellers and postal carriers. From 2006 to date, they caused the filing of at least 7,000 fraudulent federal income tax returns seeking more than $20 million in refunds. The case remains under investigation.
Brown pled guilty in the U.S. District Court for the District of Columbia to one count each of conspiracy to defraud the government with respect to claims; making false, fictitious or fraudulent claims for a tax refund, and fraud and related activity in connection with identification information (identity theft). The guilty plea was entered before the Honorable Magistrate Judge Alan Kay. The defendant will be sentenced at a later date by the Honorable Ellen S. Huvelle.
The conspiracy charge carries a statutory maximum of 10 years in prison. The false claims charge carries a statutory maximum of five years in prison, and the identity fraud charge carries up to 15 years. The charges also carry potential fines. Under federal sentencing guidelines, the parties have agreed that the likely range is a prison sentence of up to 14 years and a fine of up to $175,000.
The government has seized and administratively forfeited from Kevin Brown a 2007 Range Rover and more than $100,000 in cash and bank accounts.
“The scope of the identity theft conspiracy revealed by today’s guilty plea is staggering: more than one hundred participants schemed to file more than 7,000 bogus tax returns seeking to rip off $20 million from U.S. taxpayers,” said U.S. Attorney Machen. “These conspirators filed fake tax returns in the names of dead people, grandparents in assisted living facilities, drug addicts, and prisoners. Today one of the masterminds behind this criminal plot took responsibility for his role, but this investigation is not over.”
“IRS Criminal Investigation takes particular interest in cases where individuals, for their own personal benefit, use deceit and fraud to line their pockets,” said Special Agent in Charge Kelly. “The illegal activity detailed in the indictment has had a negative and long-lasting impact on the community. Honest and law-abiding citizens are fed up with the likes of those motivated merely by greed. Identify theft is a loathsome, despicable crime that victimizes honest Americans and causes immense hardship to those individuals whose identities were stolen. This plea should serve as a warning to those who are considering similar conduct.”
According to the government’s evidence in this case, the refunds were sought in the names of people whose identities had been stolen, including the elderly, people in assisted living facilities, drug addicts and incarcerated prisoners. At one nursing home alone, at least 14 identities were stolen, including five from people who were deceased at the time tax returns were filed in their names. Some people sold their identifying information. Some victims unwittingly turned over their identifying information after being told that they were due an income tax refund or were entitled to some “Obama Stimulus Money.”
The government’s evidence showed that participants in the schemes had various roles: some stole the identifying information; some permitted their personal identifying information to be used; some created and mailed the fraudulent federal tax returns; some permitted their addresses to be used for receipt of the refund checks. Some helped cash the checks; some provided bank accounts for negotiation of checks, and some forged endorsements of identity theft victims on the refund checks.
The false returns typically claimed that the “taxpayer” operated a sole proprietorship, such as a barber, claimed phony dependents, and then reported income that was sufficient to generate tax refunds based on the Earned Income Tax Credit, a refundable federal income tax credit for working families with low to moderate incomes.
According to the government’s evidence, Brown was a key organizer and leader of the scheme and recruited others to join in the illegal activities. Brown, who owned Classic Kutz, a barbershop in the 3200 block of 22nd Street SE, Washington, D.C., sometimes listed that establishment as the business name on the fraudulent returns. Among other things, he prepared fraudulent returns, mailed them, endorsed refund checks, and deposited funds.
In announcing the guilty plea, U.S. Attorney Machen, Special Agent in Charge Kelly, Inspector in Charge Barksdale, Inspector General Thorson, and Special Agent in Charge Beach commended those who investigated the case. They also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialist Donna Galindo, Assistant U.S. Attorney Diane Lucas, who assisted with forfeiture issues, and Assistant U.S. Attorney Sherri L. Schornstein, who is prosecuting the case.
13-058Man Sentenced to 33 Months in Prison and 30 Years of Supervised Release for Failing to Register as A Sex OffenderRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Neil DeSousa, United States Marshal, and Ric L. Bradshaw, Sheriff, Palm Beach County Sheriff’s Office, announced that Ernesto Cedillo, 25, of Palm Springs, FL, was sentenced by U.S. District Judge Kenneth Ryskamp to 33 months in prison, to be followed by 30 years of supervised release following his guilty plea to the charge of failing to register under the Sex Offender Registration and Notification Act (SORNA), in violation of Title 18, U.S.C. § 2250(a).
According to court filings, Cedillo was convicted in Indiana for sexually molesting a 13-year old girl in July 2005. Cedillo pled guilty and was convicted and sentenced in February 2007 to six years in prison in Indiana for that charge, with four years of the sentence suspended. He was released in Indiana and then was found here in Florida in 2008 and sent back to Indiana because he failed to register as a sex offender in either state, pursuant to SORNA. Based upon the Indiana failure to register Cedillo was jailed in Indiana again. He was released in June 2011 and sometime after that he absconded. Indiana authorities did not know his whereabouts and he failed to register under SORNA in Indiana again.
Sometime between June 2011 and September of 2012, Cedillo relocated to Palm Beach County and again failed to register with local police and was arrested by the Palm Beach County Sheriff's Office on September 6, 2012. Following his arrest, Cedillo admitted to having fled Indiana without registering because he knew there were warrants out for him up there. He also admitted traveling to Florida and failing to register here, even though he knew he was required to do so under the law.
Mr. Ferrer commended the U.S. Marshal Service and the Palm Beach County Sheriff’s Office for their work on the case. This case is being prosecuted by Assistant U.S. Attorney Lauren Jorgensen.
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.
Man Pleads Guilty in Panamanian Drug Trafficking ConspiracyRead the Press Release
WILMINGTON, Del. – Charles M. Oberly, III, United States Attorney for the District of Delaware, announced today that Kelvin Cook, age 34 of Wilmington, Delaware, pleaded guilty to conspiracy to possess with the intent to distribute five kilograms or more of cocaine and one kilogram or more of heroin, in violation of Title 21, United States Code, Sections 841 and 846. The charge carries a maximum term of life imprisonment, with a mandatory minimum term of ten years imprisonment. The Court scheduled a sentencing hearing for Thursday, June 20, 2013, at 3:00 p.m.
According to facts introduced at the change of plea hearing, Cook was responsible for recruiting a number of drug couriers to take smuggling trips to Panama to illegally import cocaine and heroin into the United States. Agents identified a total of 19 couriers who took smuggling trips on behalf of the organization, and who smuggled, or attempted to smuggle, more than 13 kilograms of cocaine and five kilograms of heroin from Panama to Delaware. Cook also was responsible for a significant crack cocaine distribution network on the 500 block of West Sixth Street in Wilmington.
Cook is the fourteenth individual charged in connection with the Wilmington-based Panama drug conspiracy to enter a guilty plea in federal court. Ten defendants have entered guilty pleas in the United States District Court for the District of Delaware, while four other defendants have entered guilty pleas in the United States District Court for the Southern District of Texas. In addition, three defendants are in Panamanian custody, while two other defendants remain at large.
The investigation was led by the Drug Enforcement Administration, the Department of Homeland Security – Homeland Security Investigations, the Internal Revenue Service – Criminal Investigation Division, and the Wilmington Police Department.
This case is being prosecuted by Assistant United States Attorney Robert F. Kravetz. For further information, contact Press Information Officer Kimberlynn Reeves at (302) 573-6277, ext. 16287.
For additional information regarding the case, see also: http://www.justice.gov/archive/usao/de/news/2011/Panama%20Press%20Release.html; http://www.justice.gov/archive/usao/de/news/2012/07-27.html; http://www.justice.gov/archive/usao/de/news/2012/07-25.html; http://www.justice.gov/archive/usao/de/news/2012/Banerjee%20Plea%20Release.html
Lansing Businessman Pleads Guilty to Obstructing the Irs by Evading Payment and Falsifying Quarterly Tax Returns Totalling over $250,000.00Read the Press Release
GRAND RAPIDS, MICHIGAN – U.S. Attorney Patrick Miles announced today that George Adatsi, age 49, of Lansing, Michigan, pled guilty to a felony tax offense of obstructing the IRS. U.S. Attorney Miles was joined in the announcement by Special Agent in Charge Erick Martinez, Internal Revenue Service (IRS) Criminal Investigation Division. Adatsi appeared before U.S. Magistrate Judge Ellen Carmody in Grand Rapids to enter his guilty plea.Adatsi owned two companies, Health Staffers, Inc. (HSI) and Health Staffers of Michigan, Inc. (HSMI) that employed nurses and home health aides who provided health care services in private homes and nursing homes. Adatsi admitted that he did not forward to the IRS $121,214 of the Social Security and Medicare taxes (commonly referred to as “FICA taxes”) he had withheld from the employees of HSI from 2001 through 2003. He also admitted that he later intentionally hid assets from the IRS to avoid payment of this amount. Adatsi further admitted that from 2004 through 2008 he filed false quarterly federal tax returns that under reported HSMI’s gross wages paid to its employees and, consequently, under reported both the income taxes and FICA taxes withheld from the HSMI employees. Adatsi acknowledged that the total of the underreported employment taxes was an additional $129,929.
“Adatsi grossly under reported the wages of his employees. He hid assets from the IRS and claimed he did not have the money to pay the taxes which he had already collected from his employees,” said Special Agent in Charge Erick Martinez. “The law is clear on the issue of employers’ responsibility to accurately report and forward withholding taxes and to deal honestly with the IRS.”
A sentencing hearing will be set by U. S. District Court Judge Janet T. Neff. The maximum penalty for obstructing the IRS is not more than three years in prison and a $250,000 fine.
This IRS investigated the case, and Assistant U.S. Attorney Ray Beckering prosecuted it.
END
Justin Worley to Plead Guilty in Federal Court to Nine Counts of Bank RobberyRead the Press Release
PROVIDENCE, R.I. – According to documents filed in U.S. District Court in Providence today, Justin L. Worley, 34, has agreed to plead guilty in federal court to robbing eight banks in Rhode Island and one in Massachusetts, announced United States Attorney Peter F. Neronha.
According to court documents, Worley will plead guilty to nine counts of bank robbery. Worley will admit to the court that on nine separate occasions he entered financial institutions, and using implied or explicit threats, including the threat of death in at least four of the robberies, he robbed the banks of a total of $32,633.
According to the documents, Worley will admit to robbing eight financial institutions in Rhode Island between April 16, 2012, and September 18, 2012, and to robbing one in Seekonk, Mass., on February 23, 2012.
Worley was arrested at a motel in Seekonk on September 19, 2012, by East Providence, R.I., and Seekonk, Mass., police.
The bank robberies were investigated by the Barrington, Cranston, East Providence, North Providence, Pawtucket, Seekonk and Warwick Police Departments and the FBI.
The maximum statutory penalty for bank robbery is 20 years in federal prison; a fine of up to $250,000; and a term of supervised release of 3 years.
Worley has been detained in federal custody since November 15, 2012.
The case is being prosecuted by Assistant U.S. Attorneys William J. Ferland and Paul F. Daly, Jr.
Contact: 401-709-5357
[email protected]Jacksonville Resident Convicted of Lying to Federal Agents as Part of Black MambaRead the Press Release
BRUNSWICK, GA: – John Kenneth Rosenbaum, 24, from Jacksonville, Florida, was convicted yesterday by a federal jury after a 3-day trial before Chief U.S. District Court Judge Lisa Godbey Wood for lying to agents with the U.S. Fish and Wildlife service when he orchestrated a hoax concerning a Black Mamba snake.
United States Attorney, Edward J. Tarver said, “Lying to federal agents is a crime. This defendant caused an unnecessary panic and wasted the resources of dozens of law enforcement personnel. For his crime, he will now face the cell of a federal prison.”
Luis Santiago, Special Agent in Charge for the Office of Law Enforcement, Southeast Region, United States Fish and Wildlife Service, stated, “Many times our investigations go well beyond violations of wildlife laws, as in this case where concern for public safety was also a key element. Causing such public concerns by making false statements concerning such a dangerous species is absolutely inexcusable.”
The evidence presented during trial revealed that on November 21, 2011, Rosenbaum went to a hospital in South Georgia and reported that he had been bitten by a Black Mamba snake. Black Mamba snakes originate in Africa, are highly aggressive, and haves toxic venom that can kill within minutes. It is a violation of the federal Lacey Act to possess a Black Mamba in Georgia. Rosenbaum told an emergency room physician that he had driven across the Florida border to Exit 3 on Interstate 95 for the purpose of buying a Black Mamba snake. Rosenbaum said the snake escaped and bit him. Because Rosenbaum had puncture wounds and had written “Black Mamba Snake” on his arm, the physician immediately began snake-bite treatment, and then called law enforcement.
Over concerns that a Black Mamba snake was on the loose in a populated area, a coordinated search and investigation by United States Fish and Wildlife Service, Georgia Department of Natural Resources, Kingsland Police Department, Camden County Sheriff’s Department, and Florida Fish and Wildlife Commission was mobilized.
Rosenbaum continued to tell the story of the Black Mamba to federal agents and others for nearly five months. Over 1000 hours of law enforcement time were utilized in the search and investigation. Federal agents later determined that Rosenbaum’s story was a hoax, and that he had actually been bitten by his pet Egyptian Banded Cobra, which he kept in his home. Rosenbaum faces a maximum statutory penalty of 5 years in prison; a fine of $250,000; and, 3 years of supervised release. Rosenbaum remains in custody pending his sentence. A sentencing date will be scheduled following completion of a presentence investigation and report.
Assistant United States Attorneys T. Shane Mayes and Brian T. Rafferty prosecuted the case for the United States. For additional information, please contact First Assistant United States Attorney James D. Durham at (912) 201-2547.
Indictment: Store Sold Counterfeit Goods by Ralph Lauren, Nike in Kansas City, Kan.Read the Press Release
KANSAS CITY, KAN. – A man has been charged with selling goods with counterfeit trademarks from Ralph Lauren, Nike and other well known names at his store in Kansas City, Kan., U.S. Attorney Barry Grissom said today.
Jehad Shalabi, 44, is charged with one count of conspiracy to traffic in counterfeit trademark goods. The indictment alleges that Shalabi sold counterfeit goods at the Joe Black clothing store at 3201 State Avenue in Kansas City, Kan. In 2009 Shalabi was identified as the manager of the store. Subsequently, he listed the owner and manager of the store for occupational tax purposes in the names of his accountant or relatives.
The indictment alleges Shalabi offered for sale at Joe Black hundreds of counterfeit trademark items including Polo Ralph Lauren shirts, hoodies and T-shirts; Nike Air Force, Jordan Airmax and Goadomes shoes; Major League Baseball hats; T-shirts, tank tops, jeans, sweatshirts, hoodies and shorts with tattoo designs by Ed Hardy; Luxirie jeans; Rocawear T-shirts, long-sleeve shirts and body suits; and Coogi shirts, dresses, T-shirts, shorts, jeans and jackets.
The government is seeking a money judgment of $89,000, representing the proceeds of the crime.
If convicted, he faces a maximum penalty of 10 years in federal prison and a fine up to $2 million. The FBI and ICE-HSI investigated. Assistant U.S. Attorney Scott Rask is prosecuting.
OTHER INDICTMENTS
Daniel Lee Wadell, 28, and Stephan Michael Hudson, 32, are charged with attempted bank robbery. The indictment alleges that on March 6, 2013, they attempted to rob the Citizens State Bank at 102 North Commercial Street in Kincaid, Kan.
If convicted, they face a maximum penalty of 20 years and a fine up to $250,000. The FBI investigated. Assistant U.S. Attorney Jabari Wamble is prosecuting.
Ryan Ridens, 46, Linwood, Kan., is charged with one count of possessing two pistols and ammunition after a felony conviction. The crime is alleged to have occurred March 4, 2013, in Kansas City, Kan.
If convicted, he faces a maximum penalty of 10 years in federal prison and a fine up to $250,000. The Kansas City, Kan., Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives investigated. Assistant U.S. Attorney Scott Rask is prosecuting.
Cecelia Maria Aispuro, 26, Victorville, Calif., is charged with one count of possession with intent to distribute methamphetamine. The crime is alleged to have occurred March 6, 2013, in Sedgwick County, Kan.
If convicted, she faces a penalty of not less than 10 years and not more than life and a fine up to $4 million. The Drug Enforcement Administration investigated. Assistant U.S. Attorney Mona Furst is prosecuting.
Jesus Clemente, 40, a citizen of Mexico who has been living in Wichita, Kan.; Filberto Rodela-Gomez, 37, a citizen of Mexico who has been living in Wichita, Kan.; and Braulio Rodolfo Arena-Pinzon, 25, a citizen of Mexico who has been living in Wichita, are charged with one count of possession with intent to distribute methamphetamine and one count of conspiracy to possess with intent to distribute methamphetamine. The crimes are alleged to have occurred in February and March 2013 in Sedgwick County, Kan.
If convicted, they face a penalty of not less than 10 years and not more than life and a fine up to $10 million on each count. The Wichita Police Department investigated. Special Assistant U.S. Attorney Michelle Jacobs is prosecuting.
Perfecto Morales-Santiago, 35, who is not a citizen of the United States, is charged with unlawfully re-entering the United States after being deported. He was found Feb. 2, 2013, in Johnson County, Kan.
If convicted, he faces a maximum penalty of two years in federal prison and a fine up to $250,000. ICE Enforcement and Removal Operations investigated. Assistant U.S. Attorney Scott Rask is prosecuting.
In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.
Ijaz Khan Sindhu 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 February 15, 2013, before U.S. District Judge Dana L. Christensen, IJAZ KHAN SINDHU, a 33-year-old resident of Othello Washington, pled guilty to conspiracy to distribute cocaine. Sentencing has been set for May 24, 2013. He is currently detained.
In an Offer of Proof filed by Assistant U.S. Attorney Tara L. Elliott, the government stated it would have proved at trial the following:
On August 23, 2012, a Confidential Informant (CI) was scheduled to purchase cocaine from Shahid Khan and SINDHU in Missoula. Prior to arriving in Montana, Khan and SINDHU were stopped by Idaho police officers and it was later discovered that they had 10 ounces of cocaine in their car.
The CI would have testified that he purchased cocaine from SINDHU on numerous occasions between January and August of 2012, and usually purchased approximately 9 ounces of cocaine at a time. He would have further testified that Khan was with SINDHU on at least 4 or 5 of those occasions and at least once Khan took the money from the CI for the cocaine.
Khan pled guilty to federal charges.
SINDHU faces possible penalties of a mandatory minimum of 5 years and could be sentenced to 40 years, a $5,000,000 fine, and four years supervised release.
The investigation was conducted by the Federal Bureau of Investigation.
Huntsville Woman Sentenced to 10 Months in Prison for Stealing Children's Social Security BenefitsRead the Press Release
HUNTSVILLE – A federal judge Thursday sentenced a Huntsville woman to 10 months in prison for stealing government property by claiming Social Security benefits for children who did not live with her and spending the money on herself, announced U.S. Attorney Joyce White Vance and Social Security, Office of Inspector General, Resident Agent in Charge Guy Fallen.
DIANE CUTTS OATES, 49, pleaded guilty in October to one count of theft of government property. U.S. District Judge Karon O. Bowdre imposed the prison sentence and ordered Oates to pay more than $38,000 in restitution to the Social Security Administration. She is scheduled to report to prison March 24.
Oates had two children who lived with their father in Tennessee, and the father had custody of the children. Oates applied for child benefits in December 2009 and falsely stated that she and the two children lived together in the same house. Oates received $17,412 in back payments for the children and benefit checks for three more months for a total $38,328 from Social Security.
Oates used deceit to receive Social Security benefits which rightfully belonged to her children, according to the government’s sentencing memorandum. “The defendant’s actions were the height of arrogance and selfishness. These public funds have been put aside to protect citizens from falling through the cracks. This money is not appropriated so a scoundrel like Diane Oates can use the public coffers as her own personal piggy bank,” the government said in its memorandum. “Her children were very much entitled to this money, but they were denied use of it due to their mother’s, this defendant’s, theft.”
The Social Security, OIG, and the U.S. Secret Service investigated this case, which Assistant U.S. Attorney Terence M. O’Rourke prosecuted.
Houston Man Lands in Federal Prison for Theft of Government FundsRead the Press Release
HOUSTON - Carlos Melchor-Sanchez, 47, of Houston, has been ordered to federal prison following his conviction on one count of theft of government funds from the Social Security Disability Insurance fund, United States Attorney Kenneth Magidson announced today. He entered a plea of guilty to the charge in November 2012.
Today, U.S. District Judge Ewing Werlein Jr., who accepted the guilty plea, sentenced Melchor-Sanchez to 21 months in prison. He also was ordered to pay $83,764 in restitution to the Social Security Administration (SSA). Melchor-Sanchez will also be required to serve a term of three years of supervised release following completion of the prison term.
During his plea, Melchor-Sanchez admitted that from February 1996 through March 2012, he stole approximately $83,000 from the SSA. Melchor-Sanchez admitted he applied for SSA Disability Insurance Benefits using the identity and SSA record of a person named Hector Contreras and began receiving SSA disability benefits in that name beginning in February 1996. He also admitted he had obtained a Texas Driver License (TDL) in the name of Hector Contreras. Melchor-Sanchez admitted he took various actions to maintain the flow of SSA benefits, including swearing to a false affidavit in that false name which he submitted to SSA claiming he was the victim of identity theft.
In response to a letter from the SSA in August 2008 alerting him that his benefits would be terminated an arrest warrant from Woodland, Calif., for Hector Contreras, Melchor-Sanchez sent his fingerprints to the Superior Court of Yolo County. It was determined, based on a fingerprint comparison, that he was not the Hector Contreras wanted in that county. Melchor-Sanchez forwarded the county court letter to the SSA and continued receiving benefits.
In August 2009, Melchor-Sanchez opened an account at JP Morgan Chase using the Contreras identity and Social Security number. For identification, Melchor-Sanchez used the TDL he obtained in Contreras’ name and a credit card also issued in that name. Melchor-Sanchez also admitted he was deported previously to Mexico on March 10, 1993, and had not been granted permission to re-enter the United States.
Melchor-Sanchez will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The criminal charges are the result of an investigation conducted by the SSA - Office of Inspector General. The case was prosecuted by Assistant United States Attorney Al Balboni.
High-Ranking Mexican Mafia Associate Sentenced in Stabbing and Drug Trafficking Case Crimes Committed in Aid of Mexican Mafia's Racketeering ActivityRead the Press Release
United States Attorney Laura E. Duffy announced that Robert Mercado, a high-ranking Mexican Mafia associate from San Diego, was sentenced today by United States District Judge Anthony J. Battaglia to 14 years in custody after Mercado pleaded guilty to Violent Crime in Aid of Racketeering, in violation of Title 18, United States Code, Section 1959. Mercado was one of thirty-six individuals arrested last year as part of "Operation Carnalismo," an investigation that targeted the Mexican Mafia's organized criminal activity. "Operation Carnalismo" was one of three similar investigations charged at the same time that focused on Mexican Mafia crime, which resulted in well over 100 arrests of local gang members and associates.
Court filings described the Mexican Mafia as a notorious, violent prison gang that controls a large portion of the criminal activity committed by Southern California Hispanic street-gang members. The Mexican Mafia controls the criminal activity of its subsidiary gangs through the extortionate collection of the proceeds from other criminal activity, such as drug trafficking. These extortion payments, commonly referred to as "taxes," are collected for the benefit of members by gang associates like Mercado. The Mexican Mafia and its associates engage in a variety of crime in order to maintain their presence in the criminal world, including murder, assault, kidnapping, extortion and drug trafficking.
As part of his plea, Mercado admitted that he carried out a variety of crimes in support of the Mexican Mafia, including assault with a dangerous weapon (stabbing), drug trafficking and extortion. Filings with the Court revealed that Mercado was a trusted lieutenant to convicted Mexican Mafia Member Salvador Colabella. Colabella had several independent methamphetamine-trafficking organizations under his command. Mercado and others took money and cars from a number of drug dealers through violence or the threat of violence. In one particular incident, Mercado admitted stabbing a drug dealer (and twisting the knife in order to maximize the damage) because he believed that the drug dealer was not properly paying taxes to Colabella. After the stabbing, Mercado and an associate sent a third member of their group to the hospital in order to prevent the injured drug dealer from speaking with the police. Adding insult to injury, Mercado and his associate further demanded that the drug dealer give them his car, which he did later that evening after being released from the hospital. As part of his plea, Mercado also admitted that he sold heroin that was provided to him by the same victim of his violent assault.
United States Attorney Duffy praised the members of the Federal Bureau of Investigation's Violent Crimes B Gang Group ("VCTF-GG"), which led this investigation, for their continued, outstanding work in pursuit of Mexican Mafia crime. The VCTF-GG is a federal task force comprised of investigators from the FBI, Bureau of Prisons, and the San Diego, Chula Vista, and National City Police Departments. Duffy added,
DEFENDANT Criminal Case No. 12CR290-AJB Robert Mercado PROGRESS OF CASES CHARGED AS PART OF OPERATION CARNALISMO
" We will continue to work tirelessly in order to ensure that our neighborhoods remain safe from organized gang activity through the successful prosecutions of cases like this. Gang members must know that their actions have serious consequences under federal law."Summary: As of February 15, 2013, 30 of 36 defendants have been convicted and 12 of those 30 have been sentenced.
12CR290-AJB - Convictions
INVESTIGATING AGENCIES
Salvadore Colabella - RICO conspiracy
Jose Luis Mercado - RICO conspiracy
Robert Mercado - Violent Crime in Aid of Racketeering (168 months in custody)
Maria de Jesus Claudia Ochoa - RICO conspiracy
Silvano Hernandez - RICO conspiracy
Jose Briseno-Contreras - RICO conspiracy (46 months in custody)
12CR291-AJB - Convictions
Ramon Agredano - Conspiracy to distribute methamphetamine (84 months in custody) Ricardo Cornejo - Conspiracy to distribute methamphetamine (135 months in custody) David York - Conspiracy to distribute methamphetamine
Guillermo Chaidez - Conspiracy to distribute methamphetamine (120 months in custody) Adrian Dominguez - Conspiracy to distribute methamphetamine
Charles Smith - Conspiracy to distribute methamphetamine
Anna Sheneman - Conspiracy to distribute methamphetamine (93 months in custody) Esteban Rodriguez - Conspiracy to distribute methamphetamine (60 months in custody)
12CR292-AJB - Convictions
Juan Guerrero - Conspiracy to distribute methamphetamine (135 months in custody) Jorge Moreno - Conspiracy to distribute methamphetamine
Eduardo Moreno - Conspiracy to distribute methamphetamine (120 months in custody) Allen Mundell - Conspiracy to distribute methamphetamine
Brett Youkel - Conspiracy to distribute methamphetamine (120 months in custody)
Lacy McElroy - Conspiracy to distribute methamphetamine (100 months in custody)
12CR293-AJB - Convictions
Alfredo Bazurto - Conspiracy to distribute methamphetamine
Charles Monroe - Conspiracy to distribute methamphetamine
Jose Pedro Covarrubias - Conspiracy to distribute methamphetamine (120 months in custody)
George Chavez - Conspiracy to distribute methamphetamine
Jose Esparza - Conspiracy to distribute methamphetamine
John Atkinson - Conspiracy to distribute methamphetamine (120 months in custody) Annabel Vasquez - Conspiracy to distribute methamphetamine
Fantaja Deleal - Conspiracy to distribute methamphetamine (78 months in custody)
12CR294-MMA - Convicted
Carlos Lozano - Distribution of methamphetamine (57 months in custody)Federal Bureau of Investigation
Chula Vista Police Department
San Diego County Sheriff's Department
National City Police Department
San Diego Police Department
San Diego County District Attorney's Office
U.S. Bureau of Prisons
California Department of Corrections and Rehabilitation
San Diego County Probation
Department, Immigration and Customs Enforcement's Homeland Security Investigations
Internal Revenue Service-Criminal InvestigationsHarrison County Man Sentenced on Firearms ChargeRead the Press Release
COUNCIL BLUFFS, IA – On February 15, 2013, Micah David Meloccaro, age 22, of Woodbine, Iowa, was sentenced in United States District Court in Council Bluffs on the charge of unlawful user of a controlled substance in possession of a firearm, announced United States Attorney Nicholas A. Klinefeldt. United States District Court Judge Stephanie M. Rose sentenced Meloccaro to 30 months imprisonment, to be followed by 3 years of supervised. The Court also ordered Meloccaro to forfeit two shotguns and ammunition which he had possessed, and to pay a $100.00 special assessment for the Crime Victim Fund. Meloccaro was allowed to remain on conditions of release, supervised by the United States Probation Office, pending designation of the Federal Bureau of Prisons facility at he will serve his sentence.
Meloccaro was sentenced upon his plea of guilty to unlawful user of a controlled substance in possession of a firearm. The charges arose out of an emergency medical response to Melocarro’s then residence in Woodbine, Iowa, on April 13, 2012. The emergency response was regarding a friend of Meloccaro’s, whom Meloccaro had accidently shot at close range with a 12-gauge shotgun. The shooting victim is recovering. During the emergency response, deputies of the Harrison County Sheriff’s Department observed growing marijuana. A search was conducted by the Harrison County Sheriff’s Department and the Iowa Division of Narcotics Enforcement, and a marijuana grow operation was found in the house. Meloccaro eventually admitted to smoking marijuana on a regular basis. As a part of the federal plea agreement in this case, Melocarro must also plead guilty in the District Court of the State of Iowa for Harrison County to manufacturing marijuana.
This investigation was conducted by the Harrison County Sheriff’s Department, the Iowa Division of Narcotics Enforcement, and the Federal Bureau of Alcohol, Tobacco, Firearms and Explosives. The Harrison County Attorney’s Office also aided in this case, which was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
(Download Press Release )
Hadley Man Convicted of Drug ChargesRead the Press Release
BOSTON - A Hadley man was convicted yesterday in U.S. District Court in Springfield of distributing more than five kilograms of cocaine.
Pablo Drullard, 31, pleaded guilty before U.S. District Judge Michael A. Ponsor to conspiring to possess with intent to distribute and distribution of more than five kilograms of cocaine. Sentencing is scheduled for May 13, 2013. The maximum sentence under the statute is life in prison, followed by five years of supervised release and a $10 million fine.
Between July 31, 2010, and May 2, 2011, Drullard and others participated in a criminal conspiracy that transported kilograms of cocaine from Texas to western Massachusetts.
United States Attorney Carmen M. Ortiz; John J. Arvanitis, Special Agent in Charge of the Drug Enforcement Administration Boston Field Division; and Richard DesLauriers, Special Agent in Charge of the Federal Bureau of Investigation Boston Field Division, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Kevin O’Regan of Ortiz’s Springfield Branch Office.
Fugitive Drug Trafficker Sentenced to Eleven Years in PrisonRead the Press Release
RICHMOND, Va. – Lorenzo Brooks, a.k.a. Tyrone Brown, 38, formerly of New York City, was sentenced today to 132months in prison, followed by a 5 year term of supervised release, for conspiring to distribute between 50 and 150 kilograms of cocaine. A forfeiture order in the amount of $1,500,000.00 representing the proceeds of Brooks’ drug trafficking activities was also entered.
Neil H. MacBride, United States Attorney for the Eastern District of Virginia; and Robert Brisolari, Acting Special Agent in Charge for the Drug Enforcement Administration (DEA)’s Washington Field Office, made the announcement today after sentencing by United States District Judge Henry E. Hudson.
Brooks was charged in early 2007; however, he remained a fugitive until his arrest in California in August, 2012. He pled guilty on November 13, 2012, to Conspiring to Distribute and Possess with the Intent to Distribute Five Kilograms or More of Cocaine Hydrochloride.
According to court documents, beginning as early as 2004 Brooks was supplying numerous members of a large-scale drug trafficking organization based in Richmond, Virginia with cocaine hydrochloride. All of the members of that organization were arrested and convicted in 2006 and 2007.
As part of his efforts to avoid detection by law enforcement, Brooks operated vehicles with concealed compartments or “traps” built into them. He used these compartments to conceal the narcotics he was transporting from New York to Richmond, and to conceal his profit upon his return to New York. One of these vehicles was seized by law enforcement in 2007.
Brown admitted that he conspired to distribute between 50 kilograms and 150 kilograms of cocaine hydrochloride from approximately January 1, 2004, through December 30, 2006.This case was investigated by the Drug Enforcement Administration. Assistant United States Attorney Angela Mastandrea-Miller prosecuted 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 Whitefish Bay, WI, Man Sentenced to 28 Years in Federal PrisonRead the Press Release
United States Attorney James L. Santelle announced that David Phillip Foley, (age: 51) formerly of Whitefish Bay, Wisconsin, was sentenced this morning to a term of imprisonment of 336 months, followed by ten years of supervised release. The 28-year term of imprisonment will run consecutively to and begin after Foley’s recently imposed Wisconsin State sentence of 10-years for theft by fraud, issuance of worthless checks and two counts of bail jumping. In November, 2012, a jury found Foley guilty of three counts of production of child pornography, transportation of a minor across state lines to engage in a sex act, distribution and possession of child pornography.
In August 2010, the Wisconsin Department of Justice, Division of Criminal Investigation (DCI) was contacted by Fox 6 News, who reported they had received a cardboard mailer, addressed to the television station. The DVD, which had been sent anonymously, contained numerous images of child pornography and a typed letter. The letter stated that the sender had discovered the disc in a dumpster in Whitefish Bay.DCI determined that the child pornography had been “burned” or copied to the disc on August 10, 2010, just a few days before its delivery to the TV station. Before the DVD was received at the TV station, Foley told individuals that his landlord was “going to be in trouble,” and that they should “watch the news.”
In the months leading up to the receipt of the DVD, numerous persons who were acquainted with Foley heard him complain bitterly about his landlord, who Foley accused of harassing him and interfering with the operation of his business.
In December of 2010, Foley claimed that he had found a Toshiba laptop computer bag behind the barbershop near where his landlord’s car had been parked. Foley told people that the laptop contained child pornography. Foley’s business partner had a former private investigator turn the laptop over to authorities.
The investigation revealed that until November 19, 2010, this Toshiba computer was owned by a man who posted it for sale on Craig’s list. The investigation further revealed that Foley purchased this computer and the child pornography was first uploaded after the purchase. A search warrant was obtained for Foley’s apartment to seize his computers. A forensic examination revealed that Foley had placed the images of child pornography on the disc mailed to the news station and also on the Toshiba laptop. This was done in an attempt by Foley to set up his landlord and have him arrested for possession of child pornography.
Foley’s computers also revealed that he had sexually molested a 14-year old boy and had videotaped the molestation on 3 separate occasions. Once the victim in these videos was
identified, law enforcement learned that Foley had also taken the boy to a hotel near the Mall of America in March, 2011, where he sexually molested the boy.
This case was prosecuted in federal court as part of “Project Safe Childhood,” the Department of Justice’s nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse. 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 using the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.According to United States Attorney James L. Santelle, “the protection of our nation’s children is a top priority of the Department of Justice, and prosecutions such as this further this priority.” Santelle also praised the work of the Wisconsin Department of Justice, Division of Criminal Investigation, Internet Crimes Against Children.
The case was prosecuted by Assistant United States Attorneys Penelope L. Coblentz and Carol L. Kraft.
Former Milwaukee Man Convicted of $778,000 Food Stamp FraudRead the Press Release
James L. Santelle, United States Attorney for the Eastern District of Wisconsin announced today that John S. Williams (age: 33) of Fox Point, WI pled guilty to a single count information charging him with unlawfully purchasing and redeeming Supplemental Nutrition Assistance Program benefits, commonly referred to as food stamps.
According to the charging document, Williams doing business as John Henry Distribution, LLC (JHD) became a licensed vendor of the United States Department of Agriculture Food and Nutrition Service (FNS), which enabled Williams to redeem QUEST cards. QUEST cards are the Electronic Benefit Transfer cards that replaced food stamp coupon booklets. Williams was classified as a mobile vendor and operated out of his private vehicles. Between August 2010 and January 2013, Williams redeemed approximately $778,000 in QUEST benefits from food stamp benefit recipients who were not purchasing food, but instead receiving cash for providing access to their QUEST benefits.
The maximum penalty for this offense is 20 years imprisonment, $250,000 fine and 3 years of supervised release. This case was investigated by the United States Department of Agriculture- Office of Inspector General and the Milwaukee County Sheriff’s Department.
Former Local Union President and Former Executive Assistant Charged with Stealing Money from Union and Obstruction of JusticeRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Richard L. Walker, Special Agent in Charge, U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, announced the unsealing of a 17-count indictment and the arrests of defendants Darryl Brice Payne, a/k/a Darryl “Mike D,” Payne, 47, of Sunrise, and Tianni Latrice Brown, f/k/a Tianni Latrice Wade, 31, of Lauderhill, Florida.
Payne and Brown are both charged in Count 1 with conspiracy to steal money, funds, property, and other assets of the International Longshoremen’s Association, AFL-CIO, Local Union No. 1526 (“ILA Local 1526”) in Fort Lauderdale, from March 2008 through August 2009. During this time, Payne was President of ILA Local 1526 and Brown was Payne’s Executive Assistant. Payne is also charged with ten counts (Counts 2-11) of theft of labor union assets, in violation of Title 29, United States Code, Section 501(c); one count (Count 12) of endeavoring to influence, obstruct or impede the due administration of justice, in violation of Title 18, United States Code, Section 1503; three counts of mail fraud (Counts 14-16), in violation of Title 18, United States Code, Section 1341; and making false statements (Count 17) in relation to a document required by the Employee Retirement Income Security Act of 1974 (“ERISA”) to be kept as part of an employee pension benefit plan, in violation of Title 18, United States Code, Section 1027. Brown is also charged with eight counts of theft of labor union assets (Counts 2-9), endeavoring to influence, obstruct or impede the due administration of justice (Count 12), and making false statements to Special Agents of the U.S. Department of Labor, Office of Labor Racketeering and Fraud Investigations (Count 13), in violation of Title 18, United States Code, Section 1001.
According to the indictment, Payne and Brown prepared and used false and altered documents to deceive union officials and obtain union funds purportedly to pay for legitimate assets, goods, services and travel expenses for the use of the union. In fact, however, those expenses covered the personal expenses of the defendants and others.
The indictment also alleges that Payne and Brown corruptly endeavored to obstruct he grand jury investigation by causing the production of false documents in response to a federal grand jury subpoena, and by withholding and failing to produce other documents that were required to be produced in response to a federal grand jury subpoena. The indictment also alleges that Brown made false statements to Special Agents of the Department of Labor’s Office of Labor Racketeering and Fraud Investigations, who were conducting the investigation.
Lastly, the indictment alleges that Payne engaged in a mail fraud scheme to deceive officials of the ILA Pension Fund by presenting a falsely altered U.S. Department of Labor document that made it appear as if he had received workers’ compensation for approximately four years (1991-1994). In fact, however, Payne had received workers’ compensation payments for only about four months in 1991. By using the falsely altered document, Payne was able to obtain one additional year credited to his time as a beneficiary of the ILA Pension Fund, which would enable him to obtain additional money to which he was not entitled upon his retirement. The indictment alleges that Payne’s use of the same altered document violated another statute prohibiting making false statements in relation to a document required by ERISA to be kept as part of the records of an employee pension benefit plan.
If convicted, the defendants face the following possible maximum statutory sentences: Counts 1-11, 13, and 17: up to five years in prison; Count 12: up to 10 years in prison; and Counts 14-16: up to 20 years in prison.
Mr. Ferrer commended the investigative efforts of the U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations. The case is being prosecuted by Assistant U.S. Attorney William T. Shockley.
An indictment is merely an accusation and a defendant is presumed innocent unless proven guilty.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Former Customs Officer Found Guilty of Importing over 1,200 Pounds of Marijuana into the United States from MexicoRead the Press Release
TUCSON, Ariz. – On February 14, 2013, Luis Vasquez, 33, formerly of Douglas, Ariz., and a former Customs and Border Protection Officer, was found guilty of drug charges by a federal jury in Tucson. The case was tried before U.S. District Judge David C. Bury. Vasquez was remanded to the custody of the United States Marshals Service while awaiting sentencing. Sentencing is set before Judge Bury on April 29, 2013.
The evidence at trial showed that Vasquez used his position as an inspector at the Douglas Port of Entry to allow over 1,200 pounds of marijuana into the United States from Mexico. He was found guilty on all counts, including conspiracy to import marijuana, unlawful importation of marijuana, conspiracy to possess with intent to distribute marijuana and possession with the intent to distribute marijuana. The convictions carry a maximum penalty of 40 years imprisonment, a $5,000,000 fine or both.
The evidence at trial showed that on at least two occasions, Vasquez, along with other members of the conspiracy, imported a large quantity of marijuana from Mexico into the United States through the Douglas Port of Entry. Vasquez’ role in the conspiracy was to use his position as a Customs Officer to allow pick-up trucks loaded with marijuana to cross the international border without inspection.
The investigation in this case was conducted by the Federal Bureau of Investigation, the Department of Homeland Security, Customs and Border Protection and Office of the Inspector General, and the Douglas, Ariz., Police Department. The prosecution was conducted by James T. Lacey and Joseph W. Hanley, Assistant U.S. Attorneys, District of Arizona, Tucson.
CASE NUMBER: CR-11-2486-TUC-DCB
RELEASE NUMBER: 2013-017_VasquezFor more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az
Former Claims Adjuster Pleads Guilty to Fraud ChargesRead the Press Release
St. Louis, MO - Brian Behl pled guilty to filing false insurance claims to divert more than $400,000 for his personal expenses.
According to court documents, Brian Michael Behl worked for Allianz as a Claims Adjuster in the O’Fallon, Missouri, office for about ten years until he was terminated on September 20, 2012. Allianz, which also did business from time to time as Fireman's Fund, is a company that provides insurance against theft, damage and other losses to personal property. Allianz's clients are companies whose employees were re-locating for employment purposes. Whenever property was damaged during a move, the covered employee would file a claim with Allianz, which would be reviewed by a Claims Adjuster. During the claims process, either the adjuster or a salvage company would assess the value of the damaged property. In some instances, a salvage company would pay the covered employee directly for the damaged property and then take custody of it. Allianz then reimbursed the salvage company.
Because of his years of experience, Behl had authority to approve insurance claims under $10,000 without the prior approval of a manager. Between March 2010 and September 20, 2012, Behl falsified damage claims and caused Allianz to make substantial monetary payments to a fictitious salvage company. In furtherance of the scheme, Behl opened a bank account in the name of a fictitious company called B & M Salvage Repair. From his office in O'Fallon, Behl re-opened old Allianz accounts that had previously been closed and made false damage claims on those accounts. Over the course of the fraud scheme, Behl caused more than 40 checks from Allianz or Fireman's Fund to be issued payable to B & M Salvage to pay for the false claims, which he cashed and used for his own personal enjoyment. He purchased a 1993 Ford Mustang Cobra and a 2009 Harley Davidson motorcycle, and made other personal expenditures with the illegal proceeds. In all, Behl fraudulently diverted more than $400,000 to himself over the course of the scheme.
BRIAN MICHAEL BEHL, St. Louis, MO, pled guilty to one felony count of mail fraud before United States District Judge Carol E. Jackson. Sentencing has been set for May 16, 2013.
Additionally, Behl will be required to forfeit to the government all money and property derived from the illegal activity. Subject to forfeiture is the Ford Mustang, the motorcycle and $40,744 cash.
Mail fraud carries a maximum penalty of 20 years in prison and/or fines up to $1 million.
In determining the actual sentences, a Judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.This case was investigated by the O’Fallon, Missouri, Police Department and the Postal Inspection Service. Assistant United States Attorney Reginald Harris is handling the case for the U.S. Attorney’s Office.
Former Chariho High School Coach Sentenced to 5 Years in Federal Prison on Child Pornography ChargesRead the Press Release
PROVIDENCE, R.I. – Glen Matteson, 52, of Richmond, R.I., a former Chariho High School assistant soccer coach, was sentenced in U.S. District Court in Providence today to 60 months in federal prison on child pornography charges, announced United States Attorney Peter F. Neronha; Richmond Police Chief Elwood M. Johnson, Jr.; Colonel Steven G. O’DonnellSuperintendent of the Rhode Island State Police; and Bruce M. Foucart, Special Agent in Charge of Homeland Security Investigations (HSI).
U.S. District Court Judge John J. McConnell, Jr., also ordered Matteson to serve 10 years of supervised release upon completion of his prison term and to register as a sex offender. Matteson pleaded guilty on November 20, 2012, to one count each of receipt, possession and distribution of child pornography.
According to information presented to the court, on February 19, 2012, Richmond Police received a complaint from a local resident that he had found sexually graphic text messages from Matteson on the cell phone of his 15-year-old son, a soccer player on Matteson’s soccer team. With the father’s consent, Richmond Police engaged in a series of text message exchanges with Matteson over four days, assuming the identity of the boy. In the context of the sexually explicit texts, Matteson invited the boy to accompany him to a soccer event and offered to transport him. On February 22, 2012, the morning of the planned meeting, Matteson was arrested by Richmond Police.
According to information presented to the court, after Matteson made certain admissions to Richmond Police to viewing, storing and distributing child pornography images and videos, Richmond Police and law enforcement officers and agents from the Rhode Island Internet Crimes Against Children (ICAC) Task Force executed a court authorized search of Matteson’s cell phone, two home computers, a digital storage device, and his work computer at the ACI. In addition to discovering numerous text messages and emails containing sexually explicit messages, a forensic examination of the equipment by the ICAC Task Force resulted in the discovery of 898 images and 73 videos depicting child pornography.
The case was prosecuted by Assistant U.S. Attorney John P. McAdams.
Matteson was ordered by the court to self-surrender to begin serving his prison sentence on March 12, 2013.
Matteson is awaiting trial in state court on a charge of indecent solicitation of a child.
The ICAC Task Force is a Department of Justice grant-funded program administered by the Rhode Island State Police Computer Crimes Unit. It is comprised of detectives from the Rhode Island State Police and Providence, West Warwick, and Coventry, R.I., Police Departments, and an agent from Homeland Security Investigations. The objective of the RI ICAC is to form strong working relationships between local, state and federal law enforcement to effectively and efficiently prevent, detect, investigate, and prosecute online child exploitation and child pornography crimes.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to locate, apprehend and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab “resources.”
Contact: 401-709-5357
[email protected]Former Camp Lejeune Employee Sentenced for Child Pornography ChargeRead the Press Release
GREENVILLE - United States Attorney Thomas G. Walker announced that in federal court Wednesday, February 13, 2013, Senior United States District Judge Malcolm J. Howard sentenced SHANE MICHAEL GREEN, 39, to 108 months imprisonment followed by a 20 years of supervised release.
A Federal Grand Jury returned a Criminal Indictment on June 24, 2012. On October 15, 2012, GREEN pled guilty to downloading child pornography, in violation of Title 18, United States Code, Section 2252(a)(2). According to the Indictment on October 24, 2009, GREEN received a video of a minor engaged in sexually explicit conduct. According to the investigation, in May, 2011, law enforcement detected an IP address that was sharing images of child pornography. The IP address was tracked to a private network on Camp Lejeune, North Carolina. The Naval Criminal Investigative Service investigated and found that GREEN had been downloading child pornography using a peer to peer file sharing program while on Camp Lejeune employed as a civilian firefighter.
This case was part of the Project Safe Childhood initiative, a national program aimed at ensuring that criminals exploiting children are effectively prosecuted by making full use of all available law enforcement resources at every level. For more information about this important national project, Project Safe Childhood, go to www.projectsafechildhood.gov.
Investigation of this case was conducted by the North Carolina State Bureau of Investigation and the Naval Criminal Investigative Service with informational assistance provided by the National Center for Missing and Exploited Children. Special Assistant United States Attorney Mark Griffith prosecuted the case.
Florida-Based Lender Processing Services Inc. to Pay $35 Million<br /> in Agreement to Resolve Criminal Fraud Violations<br /> Following Guilty Plea from Subsidiary CEORead the Press Release
Lender Processing Services Inc. (LPS), a publicly traded mortgage servicing company based in Jacksonville, Fla., has agreed to pay $35 million in criminal penalties and forfeiture to address its participation in a six-year scheme to prepare and file more than 1 million fraudulently signed and notarized mortgage-related documents with property recorders’ offices throughout the United States. The settlement, which follows a felony guilty plea from the chief executive officer of wholly owned LPS subsidiary DocX LLC, was announced today by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney for the Middle District of Florida Robert E. O’Neill.
The non-prosecution agreement, which LPS entered into today with the U.S. Department of Justice and the U.S. Attorney’s Office for the Middle District of Florida, requires the company to make the payment and meet a series of other conditions.
Lorraine Brown, the former CEO of DocX LLC, pleaded guilty on Nov. 20, 2012, in federal court in Jacksonville to conspiracy to commit mail and wire fraud. During her guilty plea, Brown admitted to her leadership role in the scheme.
LPS has taken a number of remedial actions to address the misconduct at DocX. Among other things, LPS has wound down all of DocX’s operations, re-executed and re-filed mortgage assignments as appropriate and terminated Brown and others. LPS has also demonstrated changes in its compliance, training and overall approach to ensuring its adherence to the law, and has retained an independent consultant to review and report on LPS’s document execution practices; assess related operational, compliance, legal and reputational risks; and establish a plan for reimbursing any financial injuries to mortgage servicers or borrowers.
According to the statement of facts accompanying the agreement, before its wind-down, DocX was in the business of assisting residential mortgage servicers with creating and executing mortgage-related documents to be filed with property recorders’ offices throughout the United States. Employees of DocX, at the direction of Brown and others, falsified signatures on the documents. Through this scheme and unbeknownst to the clients, Brown and subordinates at DocX directed authorized signers to allow other, unauthorized personnel to sign and to have documents notarized as if they were executed by authorized signers. These signing practices were used at DocX from at least March 2003 until late 2009, and were implemented to increase profits.
Also to increase profits, Brown hired temporary workers to sign as authorized signers. These temporary employees would sign mortgage-related documents at a much lower cost and without the quality controls represented to clients. These documents were then falsely notarized by employees at DocX, allowing the fraud scheme to remain undetected.
After these documents were falsely signed and fraudulently notarized, Brown authorized DocX employees to file and record them with local county property records offices across the country. Many of these documents – particularly mortgage assignments, lost note affidavits and lost assignment affidavits – were later relied upon in court proceedings, including property foreclosures and federal bankruptcy actions.
In entering into the non-prosecution agreement with LPS, the Justice Department took several factors into consideration. Soon after discovering the misconduct at DocX, LPS conducted a thorough internal investigation, reported all of its findings to the government, cooperated with the government’s investigation and effectively remediated any problems it discovered. The government’s investigation also revealed that Brown and others at DocX took various steps to actively conceal the misconduct from detection, including from LPS senior management and auditors.
Brown, 51, of Alpharetta, Ga., faces a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. She is scheduled to be sentenced on April 23, 2013, before U.S. District Judge Henry Lee Adams Jr. in Jacksonville.
This case is being handled by Trial Attorney Ryan Rohlfsen and Assistant Chief Glenn S. Leon of the Justice Department’s Criminal Division Fraud Section and Assistant U.S. Attorney Mark B. Devereaux of the U.S. Attorney’s Office for the Middle District of Florida. The case is being investigated by the FBI, with assistance from the state of Florida’s Department of Financial Services.
Today’s disposition is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF). 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.
Related Materials:
LPS Non-Prosecution Agreement
LPS Statement of FactsFlorida Woman Sentenced to Prison for Obstruction of Justice in Relation to Her Husband’s DisappearanceRead the Press Release
A Gainesville, Fla., woman was sentenced today to serve one year and one day in prison for her role in the obstruction of a multinational investigation into the disappearance of her husband, then an employee in the U.S. Consulate in Curacao, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division, U.S. Attorney Pamela C. Marsh for the Northern District of Florida, Director of the U.S. State Department’s Diplomatic Security Service ( DSS) Gregory B. Starr and Special Agent in Charge of the FBI’s Miami Field Office Michael B. Steinbach.
Abby Beard Hogan, 50, was sentenced by U.S. District Judge M. Casey Rodgers in the Northern District of Florida. In addition to her prison term, Hogan was sentenced to two years of supervised release. On March 29, 2012, Hogan pleaded guilty before U.S. Magistrate Judge Gary R. Jones to one count of obstruction of justice.
According to court documents, on the night of Sept. 24, 2009, Abby Hogan’s husband, James Hogan, an employee at the U.S. Consulate in Curacao, a Caribbean island that was part of the Netherlands Antilles, left his home on foot and subsequently disappeared. In the early hours of Sept. 25, 2009, James Hogan called his wife and spoke for approximately three minutes. The next day, when James Hogan failed to report to work, the U.S. government and Dutch and Antillean law enforcement launched an island-wide search and opened an investigation into Hogan’s disappearance. On Sept. 25, 2009, a diver located James Hogan’s blood-stained clothing on a local beach.
According to evidence submitted in Abby Hogan’s sentencing hearing, she repeatedly provided false information to U.S. law enforcement about the time period before James Hogan’s disappearance and withheld relevant information. Abby Hogan initially told investigators that, before his disappearance, she and her husband had an argument. She subsequently modified that statement and claimed that there had been no argument, just a minor disagreement over her husband’s next assignment for the State Department. Abby Hogan further told U.S. law enforcement agents that James Hogan had been in a “good mood” prior to leaving for his walk on the evening of his disappearance. She repeatedly denied that there had been any marital problems or that her husband had been upset or depressed in any way. Abby Hogan further stated that she could not remember the full three-minute conversation before her husband disappeared because she was sound asleep when her husband called. She claimed she fell back asleep after the call, and did not awake until the following morning. In fact, all of these statements were false, as established by the deleted emails and other computer forensic evidence , which was submitted to the court.
According to court documents, after law enforcement interviews, between Sept. 30, 2009, and Jan. 15, 2010, Abby Hogan deleted more than 300 emails from her email account. These emails contained information that Abby Hogan knew was relevant to specific questions she had been asked by U.S. law enforcement. The emails also contained information that she had either previously misrepresented or knowingly omitted during her interviews with law enforcement, including that she was engaged in an extramarital affair; the night James Hogan disappeared, the couple had argued, and he left the house angry and upset; and that she did not want law enforcement to know what had happened that evening.
The case was prosecuted by Senior Trial Attorney Teresa Wallbaum of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorney Frank Williams for the Northern District of Florida. The Criminal Division’s Office of International Affairs provided assistance. The case was investigated by DSS and the FBI’s Miami Field Office and Legal Attaché Office in Bridgetown, Barbados. Assistance was also provided by Curacao law enforcement authorities.
Federal Jury Indicts Boise Man on Child Exploitation ChargesRead the Press Release
BOISE – U.S. Attorney Wendy J. Olson announced today that Jason Lloyd Schaber, 40, of Boise, Idaho, is scheduled to be arraigned in federal court on February 19 on charges related to allegations of child exploitation. Specifically, the indictment returned by the federal grand jury on February 12 alleges that Schaber posted ads on Craigslist offering a three-year-old minor for sex. The indictment also includes 22 other charges related to production, distribution and possession of child pornography between 2010 and 2012.
According to court documents, investigators with the Internet Crimes Against Children (ICAC) Task force began their investigation of Schaber in April 2012, after Boise police were contacted by a person who saw a Craigslist ad offering a toddler for sex. Investigators working with Craigslist and Google traced the ad to Schaber in mid-May 2012, according to reports. Schaber was arrested on May 31, 2012; he has been in custody on state charges since then. Ada County dismissed the state charges yesterday in favor of the federal indictment.
The federal indictment alleges that Schaber used a facility in interstate commerce in aid of a racketeering enterprise that involved the sex trafficking of a child, and that he offered and attempted to induce a person under 18 years of age into prostitution. The indictment further alleges that between April 2010 and May 2012, Schaber produced sexually explicit images and videos of minors engaged in sexually explicit conduct, and that he distributed child pornography images and videos to 16 other individuals via email between September 2011 and April 2012.
A three-year old child, who is known to Schaber, was placed in the custody of the Idaho Department of Health and Welfare and is currently in foster care.
The charge of use of facility in interstate commerce in aid of racketeering enterprise sex trafficking of a child – introducing a person under 18 years into prostitution, as charged in count one of the indictment, is punishable by up to five years in prison, a maximum fine of $250,000, and up to three years supervised release.
The charge of sexual exploitation of children–production of sexually explicit images of a minor, as charged in counts two through six, is punishable by not less than 15 years and not more than 30 years in prison; distribution of sexually explicit images of minors, as charged in counts seven through 22, is punishable by not less than five years and not more than 20 years in prison; and possession of sexually explicit images of minors, as charged in count 23, is punishable by up to ten years in prison. Each count is punishable by at least five years to lifetime supervised release and a maximum fine of $250,000.
“Protecting children from sexual abuse and sexual exploitation is a critical law enforcement function,” said Olson. “Tragically, this case involves the exploitation and victimization of a young child and the production and distribution of child pornography. Fortunately, through the cooperative efforts of federal and local law enforcement and the Ada County Prosecuting Attorney’s Office, we have been able to fully investigate this case and obtain an indictment that addresses all of the conduct identified by law enforcement.”
The case is being investigated by the Boise Police Department, the Ada County Sheriff's Office, and members of the Internet Crimes Against Children Task Force, with technical assistance provided by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), and the High Technology Investigative Unit of the U.S. Department of Justice, Child Exploitation and Obscenity Section.
An indictment is a means of charging a person with criminal activity. It is not evidence. The person is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
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, visit www.usdoj.gov/psc. For more information about internet safety education, visit www.usdoj.gov/psc and click on the tab “resources.” For more information about registered sex offenders in Idaho, visit www.isp.idaho.gov/sor_id/.
Federal Jury Convicts Two for Roles in Austin-based Heroin Distribution OperationRead the Press Release
Jose Pardo, age 68, of Austin and Jorge Carrillo, age 45, of Lockhart, TX, both face between ten years and life in federal prison after a jury convicted them yesterday afternoon for their roles in a heroin distribution operation announced United States Attorney Robert Pitman.
The jury convicted Pardo and Carrillo of one count of conspiracy to possess with intent to distribute and to distribute heroin. Evidence presented at trial revealed the defendants conspired from May 2011 until their arrests in June of 2012 to distribute more than 17 kilograms of heroin. Testimony also revealed that at least on one occasion, heroin was processed after business hours at the Pardo family-owned restaurant, Jovita’s, and that numerous drug transactions occurred right behind Jovita’s in co-defendant Amado Pardo’s house.
Jose Pardo and Jorge Carrillo, along with 12 co-defendants who entered guilty pleas prior to trial, are scheduled to be sentenced at 9:00 a.m. on May 3, 2013, before United States District Judge Sam Sparks in Austin. The alleged ringleader, Amado Pardo, passed away prior to trial.
This case was investigated by the Federal Bureau of Investigation, Austin Police Department, Texas Department of Public Safety, Texas Department of Criminal Justice Office of the Inspector General, Drug Enforcement Administration and the Travis County Sheriff’s Office. This matter is being prosecuted by Assistant United States Attorneys Dan Guess and Elizabeth Cottingham.
Essex County, N.J., Man Sentenced to 118 Months in Prison for Armed CarjackingRead the Press Release
NEWARK., N.J, - An Essex County man was sentenced today to 118 months in prison for his role in an armed carjacking in Elizabeth, N.J., on Jan. 25, 2011, U.S. Attorney Paul J. Fishman announced.
Jermaine May, 29, of Newark, previously pleaded guilty before U.S. District Judge Claire C. Cecchi in Newark federal court to a Superseding Information charging him with conspiracy to commit carjacking, theft of a motor vehicle by force, violence and intimidation, and use of a firearm in furtherance of a crime of violence.
According to documents filed in this case and statements made in court:
May conspired with Alhakim Young, David Jones and Maurice Williams to carjack a vehicle. On Jan. 25, 2011, May, Young, Jones and Williams traveled to Elizabeth, N.J., in a white Jeep Cherokee to look for a vehicle to carjack. May and Young approached two victims who were standing near a 2004 Infiniti G-35 that was parked and warming up on Britton Street in Elizabeth, and at gunpoint, ordered the two victims to the ground. Williams and Jones fled in the Infiniti, while May and Young fled in the white Jeep Cherokee. Young, Jones and Williams previously pleaded guilty to conspiracy to commit carjacking, carjacking, and use of a firearm in furtherance of a crime of violence.
May was sentenced to concurrent 58-months prison terms on the conspiracy and carjacking counts and a consecutive 60-month prison term on the count of using a firearm in furtherance of a crime of violence, for a total sentence of 118 months in prison. Judge Cecchi also sentenced May to five years of supervised release. Restitution will be determined at a later date.
U.S. Attorney Fishman credited special agents with the FBI, under the direction of Acting Special Agent in Charge David Velazquez B. Ward in Newark, with the investigation leading to today’s plea.The government is represented by Assistant U.S. Attorneys Dara Aquila Govan of the General Crimes Unit and Gurbir Grewal of the Economic Crimes Unit in Newark.
13-084Defense counsel: Lisa Mack Esq., Assistant Federal Public Defender, Newark
Elyria Man Charged with Illegal ReentryRead the Press Release
A federal grand jury has returned an indictment charging Natividad Mundo, age 51, formerly of Elyria, Ohio, with illegally reentering the United States following her deportation, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
The indictment alleges that on April 17, 2012, Natividad Mundo was removed and deported from the United States following convictions for aggravated trafficking in cocaine and conspiracy to commit aggravated trafficking in cocaine. The indictment alleges Mundo subsequently illegally re-entered the United States and was found in Lorain County.
If convicted, the defendant’s sentence will be determined by the Court after review of factors unique to the case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense, and the characteristics of the violation. In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
The case is being presented by Assistant United States Attorney Gregory C. Sassé after an investigation by the United States Border Patrol.
An indictment is only a charge 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.
District Man Sentenced to Prison Term for Running an Illegal Gambling Operation-Defendant, Others Operated at Locations in Chinatown Area-Read the Press Release
WASHINGTON – Chun Liu, 55, of Washington, D.C., was sentenced today to six months in prison, to be followed by six months of home confinement, on charges involving the operation of an illegal gambling business, announced U.S. Attorney Ronald C. Machen Jr. and John P. Torres, Special Agent in Charge of the Washington Office of U.S. Immigration and Customs Enforcement’s (ICE) Office of Homeland Security Investigations (HSI).
Liu pled guilty in October 2012 in the U.S. District Court for the District of Columbia to one count of conducting an illegal gambling business and one count of money laundering. He was sentenced by the Honorable Senior Judge Thomas F. Hogan. As part of the plea agreement, Liu agreed to the forfeiture of $255,320, which represents proceeds from the gambling business. The amount includes more than $230,000 in cash that was seized by law enforcement authorities in a search of the operation in September 2011. Following his home confinement, Liu will be placed on three years of supervised release.
According to a proffer of evidence, signed by the defendant as well as the government, Liu and other individuals operated a total of three illegal gambling establishments in the Chinatown area of Northwest Washington from March 2007 through October 2011.
From approximately March 2007 until December 2007, Liu continuously operated a gambling establishment in the 800 block of Sixth Street NW. From April 2009 until December 2009, he moved the operation to another location, on the same block. In February and March of 2010, the operation moved to the 500 block of H Street NW. And finally, from July 2010 until October 2011, Liu returned to the first location on Sixth Street NW.
The gambling activity typically took place from 9 a.m. until 3 or 4 a.m. At any given time, Liu operated electronic, touch-screen gaming machines and up to five Mahjong tables inside the gambling establishments. Liu conducted numerous financial transactions involving the proceeds of his illegal gambling activity, including paying rent for his residence, making monthly payments on his Mercedes-Benz automobile, and paying utility bills.
In announcing the sentence, U.S. Attorney Machen and Special Agent in Charge Torres praised the investigative work of the Special Agents from the Washington Office of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations. They also commended the efforts of those who worked on the case for the U.S. Attorney’s Office, including Paralegal Specialist Taryn McLaughlin, the Asset Forfeiture and Money Laundering Section, and Assistant U.S. Attorney Scott L. Sroka, who prosecuted the matter.
13-057District Man Sentenced to More Than 12 Years in Prison for Northwest Washington Home Invasion-Police Catch Defendant in Front of the Home with Stolen Property-Read the Press Release
WASHINGTON – Shawn A. Thomas, 42, of Washington, D.C., was sentenced today to more than 12 years in prison following his conviction on burglary and other charges in a home invasion in Northwest Washington, DC, U.S. Attorney Ronald C. Machen Jr. announced.
Thomas was found guilty by a jury in December 2012 in the Superior Court of the District of Columbia of first-degree burglary, first-degree theft, receiving stolen property, and destruction of property. The Honorable Heidi M. Pasichow sentenced him to 10 years in prison on the burglary charge and imposed shorter concurrent sentences on the theft and property-related offenses. Judge Pasichow also sentenced Thomas to an additional 28 months for committing these crimes while on release in an unrelated second-degree theft case.
According to the government’s evidence, on Sunday, Aug. 5, 2012, at about 7 a.m., several intruders threw a rock through a window and entered a single-family residence in the 3900 block of Reno Road NW. The victim was home alone at the time. After hearing the glass break, and hearing voices, he barricaded himself in the bathroom and called 911.
The Metropolitan Police Department (MPD) responded within minutes. When they arrived, they found Thomas seated in a car in front of the burglarized home and various items belonging to the victim and his family - including a DVD player, stereo components, cordless telephones, and jewelry - in the back seat of the vehicle. Inside Thomas’s pocket, MPD officers also found the victim’s paging device. It had been on a bedside dresser at the time of the home invasion.
The victim and his family had just moved into this home only days before the burglary, and the other family members were visiting relatives out of town at the time of the crime.
“Thanks to the victim’s quick thinking and the fast response by police, this defendant was arrested and brought to justice,” said U.S. Attorney Machen. “Home invasions are as dangerous as they are terrifying, and the community is safer with this defendant in prison.”
In announcing the sentence, U.S. Attorney Machen commended the work of the MPD officers and detectives who investigated the case. He also praised the efforts of those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialist Catherine Bouldin, who assisted in preparing the case for trial, Assistant U.S. Attorney Jonathan Kravis who secured the indictment in the case, and Assistant U.S. Attorney Kevin Andrew Chambers, who tried the case to the jury. The Assistant U.S. Attorneys are assigned to the Second and Third District Unit of the Superior Court Felony Major Crimes Section.
13-059District Man Sentenced to 20 Months in Prison for Taking Part in Robbery in Northeast Washington-Defendant Stole Victim’s Sneakers-Read the Press Release
WASHINGTON – Junior Josephson, 18, of Washington, D.C., has been sentenced to a 20-month prison term for his role in a robbery last fall of an acquaintance in Northeast Washington, U.S. Attorney Ronald C. Machen Jr. announced today.
Josephson pled guilty to robbery in December 2012 in the Superior Court of the District of Columbia. He was sentenced on Feb. 14, 2013 by the Honorable Herbert B. Dixon, Jr. Upon completion of his prison term, Josephson will be placed on three years of supervised release.
According to the government’s evidence, Josephson knew the 22-year-old victim well, having grown up in the same neighborhood. On Oct. 21, 2012, at about 2:30 p.m., Josephson was with four assailants who jumped on top of the victim in the 500 block of Emerson Street NE. The four knocked the victim to the ground, and began punching and kicking him. Josephson pulled off the victim’s Nike sneakers, while the others kept beating him and going through his pockets.
The victim was able to escape and ran to the Fort Totten Metro station, where a transit employee called for an ambulance. The victim was transported by ambulance to a hospital, where he was admitted and treated for multiple lacerations and bruises.
The police later recovered surveillance footage from a drugstore that showed Josephson was present, on Oct. 21, 2012, when another suspect used the victim’s stolen credit card to purchase merchandise. Josephson was arrested on Oct. 31, 2012. He was wearing the Nike Air Penny Sprite sneakers believed to have been taken from the victim.
In announcing the sentence, U.S. Attorney Machen praised the work of the Metropolitan Police Department, which investigated the case. He also commended the efforts of those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialist Tamaya Reid and Assistant U.S. Attorney Trevor N. McFadden, of the Fourth District Felony Prosecution Unit.
13-056Department of Justice and National Institute of Standards and Technology Announce Launch of National Commission on Forensic ScienceRead the Press Release
The U.S. Department of Justice and the U.S. Department of Commerce’s National Institute of Standards and Technology (NIST) announced today the establishment of a National Commission on Forensic Science as part of a new initiative to strengthen and enhance the practice of forensic science.
The National Commission on Forensic Science will be composed of approximately 30 members, bringing together forensic science service practitioners, academic researchers, prosecutors, defense attorneys, judges and other relevant stakeholders to develop policy recommendations for the Attorney General. The commission will consider guidance on practices for federal, state and local forensic science laboratories developed by groups of forensic science practitioners and academic researchers administered by NIST.
“Forensic science is an essential tool in the administration of justice and needs to be continually evaluated as science progresses,” said Deputy Attorney General James M. Cole. “Forensic science helps identify perpetrators, convict the guilty, exonerate the innocent, and protect public safety. This initiative is led by the principle that scientifically valid and accurate forensic analysis strengthens all aspects of our justice system.”
“The Department of Justice and the National Institute of Standards and Technology have a history of successful collaboration,” said Under Secretary of Commerce for Standards and Technology and NIST Director Patrick Gallagher. “Through this initiative, we will work even more closely with the forensic science community to strengthen the forensic science system.”
The commission will have responsibility for developing guidance concerning the intersections between forensic science and the courtroom and developing policy recommendations, including uniform codes for professional responsibility and requirements for training and certification.
The new initiative provides a framework for coordination across forensic disciplines under federal leadership, with state and local participation. The Department of Justice, through its involvement in the commission, will take an active role in developing policy recommendations and coordinating implementation. The NIST-administered guidance groups will develop and propose discipline-specific practice guidance that will become publicly available and be considered for endorsement by the commission and the Attorney General. This coordinated effort will help to standardize national guidance for forensic science practitioners. Additionally, NIST will continue to develop methods for forensic measurements and validate select existing forensic science standards.
Specific criteria for membership will be announced in an upcoming Federal Register notice, and applicants will have 30 days from the publication of the notice to submit their applications.
As a non-regulatory agency of the U.S. Department of Commerce, NIST promotes U.S. innovation and industrial competitiveness by advancing measurement science, standards and technology in ways that enhance economic security and improve our quality of life. To learn more about NIST, visit www.nist.gov .
Daphne Woman Sentenced to Federal Prison in Falsification of Bankruptcy DocumentsRead the Press Release
United States Attorney Kenyen Brown announces that Teresa Weinacker of Daphne, Alabama today was sentenced to five months in Federal prison followed by five months home confinement and three years supervised release after she pled guilty to felony falsification of a Statement of Financial Affairs she caused to be filed in the bankruptcy case of her corporation, Xena Express, Inc. doing business as Pet Friendly, Inc. Weinacker was also ordered to pay restitution of $54,961.57 and to pay a $100 special assessment.
The charges concerned a “bust out scheme” of Pet Friendly, Inc., the business Weinacker controlled. This is a type of fraud where, just before filing bankruptcy, a person who controls a corporation transfers or conceals a corporation’s property and hides that transfer from the bankruptcy court. Property that should go to pay debts is instead taken by the controlling person. Weinacker was the president and controlling shareholder of Xena Express, Inc., which filed bankruptcy in October, 2009. Shortly before the bankruptcy filing, Weinacker opened a new bank account under her own name, doing business as Pet Friendly, Inc. She then, as president of Xena Express, Inc., faxed instructions to her major customer, Wal-Mart Stores, Inc. in Arkansas to wire transfer funds due Xena Express, Inc. to the bank account she had opened in her own name Weinacker caused Wal-Mart to send almost Fifty-five thousand dollars that should have gone to the bankrupt corporation for businesses debts to instead be sent to her own account without the knowledge or approval of the Bankruptcy Court.. Weinacker answered a question on the bankruptcy Statement of Financial Affairs that asked about transfers of corporate property by stating “NONE”, when she knew she had caused the obligation due from Wal-Mart to be paid to her own account, instead of the corporate account.
The case was investigated by agents of the Mobile Office of the Federal Bureau of Investigation The case was be prosecuted by Assistant U.S. Attorney Charles Baer on behalf of the United States Attorney’s Office for the Southern District of Alabama.
Cuyahoga Falls Man Charged with Theft of Public Money and Identity TheftRead the Press Release
A federal grand jury sitting returned a two-count indictment charging Joshua Papai, age 44, of Cuyahoga Falls, Ohio, with one count of theft of public money, and one count of identity theft, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
The indictment charges that between December 31, 2008, and April 30, 2010, Papai received approximately $61,129.40 in disability benefits from the Department of Veteran’s Affairs, to which he was not entitled. During this period, the indictment alleges that Papai worked at various times as a snow plower, roofer, home health care aid, and state-tested nursing assistant throughout that time period.
The indictment also charges that on August 4, 2008, Papai used another person’s Social Security account number to open a bank account in a fictitious name. Joshua Papai used this account to hide employment earnings to which he was not entitled because he was receiving disability.
If convicted, the defendant’s sentence will be determined by the court after a review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense, and the characteristics of the violations. In all cases, the sentence will not exceed the statutory maximum, and, in most cases, they will be less than the maximum.
This case is being prosecuted by Trial Attorney Ian D. Hoffman following an investigation by the Department of Veteran’s Affairs, Office of the Inspector General.
An indictment is only a charge and is not evidence of guilt. The defendant is entitled to a fair trial in which it will be the government's burden to prove guilt beyond a reasonable doubt.
Council Bluffs Man Sentenced on Methamphetamine Conspiracy and Firearm ChargesRead the Press Release
COUNCIL BLUFFS, IA – On February 15, 2013, Clifford Arthur Ellis, age 28, of Council Bluffs, Iowa, was sentenced in United States District Court in Council Bluffs on the charges of conspiracy to distribute methamphetamine and possession of a firearm in relation to drug trafficking, announced United States Attorney Nicholas A. Klinefeldt. United States District Court Judge Stephanie M. Rose sentenced Ellis to 175 months imprisonment regarding the drug conspiracy, and 60 months on the firearms charge, with the sentences to be served consecutively, that is one in addition to the other, for a total sentence of 235 months imprisonment. The Judge also ordered Ellis to serve 5 years of supervised release following his imprisonment. The Court also ordered Ellis to forfeit the firearm and ammunition which he had possessed, and to pay a $200.00 special assessment for the Crime Victim Fund. Ellis remains in the custody of the United States Marshal pending designation of the Federal Bureau of Prisons facility at which he will serve his sentence.
Ellis was sentenced upon his plea of guilty to conspiracy to distribute methamphetamine and possession of a firearm during and in the course of the conspiracy. The charges arose out of the investigation by the SouthWest Iowa Narcotics Task Force of a conspiracy to distribute methamphetamine, which conspiracy began in mid-2011, and was continued by some of the coconspirators, including Ellis, until at least April 1, 2012. For his involvement in the conspiracy, Ellis admitted responsibility for approximately 1.36 kilograms of methamphetamine. Ellis also regularly carried a loaded .45 caliber pistol, and then, later, a loaded 9mm pistol upon his person in the course of the conspiracy. On January 4, 2012, Ellis and two other persons were arrested by Council Bluffs Police Officers in the course of the burglary of a truck parked in an apartment parking lot in Council Bluffs. The 9mm pistol was recovered from Ellis at that time. On April 1, 2012, an Iowa State Patrol Trooper and Mills County Sheriff Deputies arrested Ellis and another person in Mills County carrying approximately one ounce of methamphetamine for distribution.
This investigation was conducted by the SouthWest Iowa Narcotics Task Force, the Council Bluffs, Iowa, Police Department, the Mills County Sheriff’s Department, and the Iowa State Patrol. The Pottawattamie County Attorney’s Office and the Mills County Attorney’s Office also aided in this case, which was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
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Cooperation Among Federal, State, and Local Law Enforcement Results in Crackdown on Sex Offenders Throughout the Eastern District of North CarolinaRead the Press Release
RALEIGH - United States Attorney Thomas G. Walker announced a series of successful prosecutions of sex offenders in the Eastern District of North Carolina. The prosecutions were handled by law enforcement throughout the district, and include a wide variety of crimes and offenders, including producers of child pornography and repeat offenders.
“I am proud to announce this series of sentencing and guilty pleas,” said Walker, “not only because they help demonstrate that the safety of the children in our district is among our highest priorities, but because they demonstrate the extraordinary results that can be obtained only by the coordination and cooperation of agencies and prosecutors at every level of law enforcement.”
The cases included the sentencing of BRIAN JOSEPH VANCOURT of Havelock, NC, who on February 13, 2013 was sentenced by Senior District Court Judge Malcolm J. Howard to 192 months’ imprisonment and lifetime supervised release for receipt of child pornography. VANCOURT, who had previously been subject to a military court martial for child pornography crimes, was detected by two different law enforcement agencies – the Colorado Springs, CO Police Department and the FBI, less than one year after his release from the brig for his prior offense, using a peer to peer network to acquire child pornography and to discuss in explicit terms his desire to engage in sex acts with a 9 year old child. These leads led to a search conducted at VANCOURT’S Havelock-area residence by the FBI, the North Carolina State Bureau of Investigation, and the Havelock Police Department, which led to the discovery of a vast collection of child pornography, including tens of thousands of images and videos depicting the sexual abuse of children. The Craven County District Attorney’s office also participated in the prosecution.
That same day, Judge Howard sentenced BRANDON STEFAN LEE of Cumberland County to a term of 151 months imprisonment and lifetime supervised release for receipt of child pornography. LEE was discovered using peer-to-peer technology to traffic in child pornography from his residence on Fort Bragg, and had amassed a library of over 12,000 images of children being sexually exploited. Investigation was led by the Cumberland County Sheriff’s Office and the FBI.
Judge Howard also sentenced SHANE MICHAEL GREEN, 39, a former civilian firefighter on Camp Lejeune, to 108 months imprisonment and 20 years supervised release for downloading child pornography on a private network on the base. Law enforcement officials traced a user of peer-to-peer technology to that network and identified GREEN as the responsible party. GREEN had amassed a collection of child pornography totaling over 1,700 images and over 30 videos depicting child sexual abuse. The case was investigated by the Naval Criminal Investigative Service and the North Carolina State Bureau of Investigation.
Elsewhere, NATHANIEL BELTRAN GRINSTEAD of Wake County pled guilty on Tuesday to one count of manufacturing child pornography. GRINSTEAD produced child pornography involving at least two children in multiple North Carolina locations, and faces not less than 15, and up to 30 years imprisonment. He is scheduled for sentencing before District Court Judge Louise Flanagan in New Bern on June 5, 2013. The investigation in his case was an effort coordinated by the Morrisville Police Department and the FBI. The office of the Wake County District Attorney also participated in the prosecution.
Also on Tuesday, February 12, 2013, WILLIAM RICHARD RAPER, a/k/a WILLIAM RICHARD ROPER, a registered sex offender, pled guilty to one count of receipt of child pornography. RAPER, a resident of Craven County, was caught by a probation officer looking at child pornography on a laptop computer. Subsequent forensics confirmed that RAPER had used the internet to seek out child sex abuse images. Due to his prior sex offense, RAPER faces not less than 15 nor more than 40 years imprisonment. Sentencing is scheduled before Judge Flanagan on June 5, 2013. The New Bern Police Department, the North Carolina State Bureau of Investigation, and the FBI cooperated in the investigative effort, while the Craven County District Attorney’s office assisted in the prosecution.
These cases follow the earlier guilty plea of MITCHELL BYRON HALES, who pled guilty January 29, 2013 to one count of distributing child pornography. The plea was entered before Senior United States District Court Judge James C. Fox in Wilmington, North Carolina. HALES’ criminal conduct was also detected by investigators working undercover to identify and locate individuals engaged in the use of peer to peer technologies to trade in child pornographic material. He faces between 5 and 20 years imprisonment on the charge at the time of his sentencing, presently scheduled for the May 13, 2013 term of court. The case was investigated by the FBI and the Raleigh Police Department, and the Wake County District Attorney’s office collaborated on the prosecution.
Recent prosecutions also include sex offenders who have refused to comply with their sex offender registration obligations. On February 8, 2013, Chief United States District Court Judge James C. Dever sentenced FRED LAWRENCE DAVIS to 30 month’s imprisonment and lifetime supervised release for failing to maintain his sex offender registration obligations as required by law. After his release from a New York prison in 1996 after completing his sentence for Attempted First Degree Rape, DAVIS failed to register in any of the states he subsequently lived in, including New York, Arizona, and North Carolina, notwithstanding having been advised on multiple occasions of his registration obligations. Investigation of this case was led by the United States Marshal Service.
“We are grateful for the tremendous work and cooperation demonstrated by the results of these cases,” said Walker. “Whether you are a producer, distributor, or collector of images and videos of children being sexually abused, you should understand that this kind of conduct is unjustifiable in any way. We will not tolerate behavior that treats children as objects for sexual amusement. The difficult reality is that there are many more of these cases to come. As recent weeks demonstrate, we have a coalition dedicated to making sure that these cases are treated as the priorities they are.”
“These predators victimized a child every time they shared or downloaded a picture or video of child pornography. The FBI will remain vigilant and continue our active role as part of the national strategy to track down sexual predators to protect our children,” said Roger A. Coe, Acting Special Agent in Charge of the Charlotte Division of the FBI.
All of these cases were brought as part of the Project Safe Childhood initiative, a national program aimed at ensuring that criminals exploiting children are effectively prosecuted by making full use of all available law enforcement resources at every level. For more information about this important national project, Project Safe Childhood, go to www.projectsafechildhood.gov.
The cases were prosecuted by Assistant United States Attorneys Jay Exum and Ethan Ontjes and Special Assistant United States Attorneys Mark J. Griffith and David A. Coleman.
Co-Founders of South San Francisco Company Plead Guilty to Taking Money from Their Employees’ Benefit PlansRead the Press Release
SAN FRANCISCO – Kenneth A. Tholin and Enrique Quiles Sr., pleaded guilty Wednesday to a conspiracy to unlawfully and willfully convert to their own use, or the use of another, money from an employee benefit plan, in violation of 18 U.S.C. § 371, United States Attorney Melinda Haag announced.
According to their plea agreements, Tholin and Quiles were general partners and co-founders of a South San Francisco company called Geo Grout, Inc., which is a contractor that specializes in grouting techniques to solve soil and structural problems. They were the trustees of Geo Grout’s employee benefit plans and thus held the obligation and responsibility of ensuring that the employee benefit plans’ trust accounts only be used for the exclusive benefit of its participants or its beneficiaries.
According to their plea agreements, between March 2009 and April 2011, however, Tholin and Quiles removed a total of $1,772,500 from the employee benefit plans’ trust accounts for unauthorized purposes. Of the $1,772,500.00 removed from the employee benefit plans’ trust accounts, Tholin and Quiles have returned $908,481.26 to the employee benefit plans’ trust accounts.
Tholin and Quiles are scheduled to appear before United States District Court Judge Edward M. Chen at 2:30 p.m. on July 31 for sentencing. The maximum statutory penalty for a count of conspiracy, in violation of 18 U.S.C. § 371, is five years in prison and a fine of $250,000, or twice the gross gain or loss, whichever is greater, plus restitution if appropriate. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Katherine Dowling and Hallie Hoffman are the Assistant U.S. Attorneys who are prosecuting the case with the assistance of Rawaty Yim and Christine Tian. The prosecution is the result of an investigation by the United States Department of Labor.
Clear Lake Man Charged with Federal Child Pornography OffensesRead the Press Release
Brandon Phinney, age 27, of Clear Lake, Iowa, has been indicted on federal child pornography charges. The charges are contained in an Indictment unsealed February 13, 2013, in United States District Court in Cedar Rapids.
The Indictment alleges that, between 2008 and 2011, Phinney received and possessed child pornography.
If convicted on all charges, Phinney faces a mandatory minimum sentence of 5 years’ imprisonment and a possible maximum sentence of 70 years’ imprisonment, $1,500,000 in fines, $600 in special assessments, and at least 5 years and up to life on supervised release following any imprisonment.
Phinney appeared on February 13, 2013, in federal court in Cedar Rapids and was released on bond. Phinney’s next appearance for trial is set for April 15, 2013.
As with any criminal case, a charge is merely an accusation and a defendant is presumed innocent until and unless proven guilty.This case is being prosecuted by Assistant United States Attorney Mark Tremmel and was investigated by the Clear Lake Police Department, the Mason City Police Department, and the Iowa Division of Criminal Investigation.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab “resources.”
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is CR 13-3005.
Clarion County Man Sentenced to Prison for Possessing Sexually Explicit Images of MinorsRead the Press Release
PITTSBURGH, Pa. - A resident of Clarion County has been sentenced in federal court to 30 months imprisonment followed by 10 years supervised release on his conviction of possessing child pornography, United States Attorney David J. Hickton announced today.
Chief United States District Judge Gary L. Lancaster imposed the sentence on Daniel Sloan Beavers, 42, of Rimersburg, Pa.
According to information presented to the court, on or about Oct. 20, 2010, Beavers knowingly possessed visual depictions, namely, images and videos contained in computer graphic files, the production of which involved the use of minors engaging in sexually explicit conduct.
Assistant United States Attorney Amy L. Johnston prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Department of Homeland Security Investigations for the investigation leading to the successful prosecution of Beavers.
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.