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3 April 2013
Porcupine Man Indicted for Involuntary ManslaughterRead the Press Release
United States Attorney Brendan V. Johnson announced that a Porcupine, South Dakota man was indicted by a federal grand jury on two counts of involuntary manslaughter.
Alden Brewer, Jr., age 25, was indicted on December 18, 2012 for driving while under the influence, at a high rate of speed, causing an accident that killed two people. He appeared before U.S. Magistrate Judge Veronica L. Duffy on March 13, 2013 and pled not guilty to the indictment. The maximum penalty upon conviction is 8 years’ imprisonment and/or a $250,000 fine.
The charge is merely an accusation and Brewer is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Federal Bureau of Investigation, Bureau of Indian Affairs Office of Justice Services, South Dakota Division of Criminal Investigation, and South Dakota Highway Patrol. Special Assistant U.S. Attorney Laura A. Shattuck is prosecuting the case.
Brewer was remanded to the custody of the U.S. Marshal. A trial date has not been set.
Pine Ridge Man Indicted for Larceny and Tampering with A Witness; Woman Indicted for LarcenyRead the Press Release
United States Attorney Brendan V. Johnson announced that a man and woman from Pine Ridge, South Dakota have been indicted by a federal grand jury for a December 15, 2012 incident at Pine Ridge involving the theft of over $1,000 in property and for threatening witnesses of the theft.
Michael Alford, age 31, was indicted by a federal grand jury on March 19, 2013 for Larceny and two counts of Tampering with a Witness. Philana Red Feather, a/k/a Philana Garcia, age 57, was indicted on the same date for Larceny. Alford and Red Feather appeared before U.S. Magistrate Judge Veronica L. Duffy on March 26, 2013 and pled not guilty to the indictment. The maximum penalty upon conviction for Alford is 20 years of imprisonment and a $250,000 fine. The maximum penalty upon conviction for Red Feather is 5 years of imprisonment and a $250,000 fine.
The charges are merely accusations and Alford and Red Feather are presumed innocent until and unless proven guilty.
The investigation is being conducted by the Bureau of Indian Affairs, Office of Justice Services, and the Oglala Sioux Tribe Department of Public Safety. Both were remanded to the custody of the U.S. Marshal. A trial date has been set for June 4, 2013.
Pine Ridge Man Indicted for Felony Child Abuse and NeglectRead the Press Release
United States Attorney Brendan V. Johnson announced that a Pine Ridge, South Dakota man has been indicted by a federal grand jury for allegedly intentionally and knowingly abusing and neglecting three minor children on December 15, 2012 at Pine Ridge, subjecting them to an environment which was injurious to their welfare and threatened them with substantial harm.
Newton Two Two, age 30, was indicted by a federal grand jury on March 19, 2013 for Felony Child Abuse and Neglect. Two Two appeared before U.S. Magistrate Judge Veronica L. Duffy on March 28, 2013 and pled not guilty to the indictment. The maximum penalty upon conviction is 10 years of imprisonment and a $250,000 fine.
The charge is merely an accusation and Two Two is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Bureau of Indian Affairs, Office of Justice Services, and the Oglala Sioux Tribe Department of Public Safety.
Two Two was remanded to the custody of the U.S. Marshal. A trial date has been set for June 4, 2013.
Pine Ridge Man Indicted for AssaultRead the Press Release
United States Attorney Brendan V. Johnson announced that a Pine Ridge, South Dakota man has been indicted by a federal grand jury for allegedly assaulting a young female companion on four different occasions in 2012.
Jon Craig Dillon, a/k/a JC Dillon, a/k/a Jon Craig Goings, age 25, was indicted by a federal grand jury on March 22, 2013 for one count of Assault with a Dangerous Weapon and four counts of Assault Resulting in Serious Bodily Injury. Dillon appeared before U.S. Magistrate Judge Veronica L. Duffy on March 22, 2013 and pled not guilty to the indictment. The maximum penalty upon conviction is 10 years of imprisonment and a $250,000 fine for each count.
The charges are merely accusations and Dillon is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Bureau of Indian Affairs, Office of Justice Services, and the Oglala Sioux Tribe Department of Public Safety. Dillon was remanded to the custody of the U.S. Marshal. A trial date has been set for May 28, 2013.
Panama City Man Sentenced to 15 Years in Federal Prison for Receipt of Child PornographyRead the Press Release
PANAMA CITY, FLORIDA – Robert E. Eldridge 43, of Panama City, was sentenced today to serve 180 months in federal prison for receipt and possession of child pornography
Eldridge pled guilty in January to two counts of receiving and possessing child pornography. During his plea of guilty, Eldridge admitted that between January 1, 2012, and March 21, 2012, he downloaded in excess of 35 videos and 160 still images containing child pornography from a peer-to-peer network and that he “preferred minor females around 12 years of age.”
Due to a prior conviction for Promoting Sexual Performance of a Child, Eldridge faced an enhanced penalty of a mandatory minimum term of imprisonment of fifteen years on Count One of his indictment and a mandatory minimum term of imprisonment of ten years on Count Two. Eldridge was also sentenced to a 10-year term of supervised release, which he will be required to serve upon completion of his prison sentence.
In announcing the court’s sentence, Pamela C. Marsh, United States Attorney for the Northern District of Florida stated: “Protecting children from sexual exploitation is one of the highest priorities of the Department of Justice and this Office. We will continue our partnership with our state, local, and federal law enforcement agents to ensure that offenders are prosecuted to the full extent of the law.”
Ms. Marsh had high praise for the Bay County Sheriff’s Office and agents of the U.S. Immigration and Customs Enforcement's Homeland Security Investigations (ICE HSI) who assisted in the investigation. The case was prosecuted by Assistant U.S. Attorney Kathryn Risinger.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched by the Department of Justice in May 2006 to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorney’s 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 exploit children via the Internet, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Murdo Man Indicted for Firearm ViolationsRead the Press Release
United States Attorney Brendan V. Johnson announced that a Murdo, South Dakota man has been indicted by a federal grand jury for Possession of a Stolen Firearm and Possession of a Firearm by a Prohibited Person.
Shaun Sporrer, age 41, was indicted by a federal grand jury on April 2, 2013. He appeared before U.S. Magistrate Judge Mark A. Moreno on April 2, 2013 and pled not guilty to the indictment. The maximum penalty upon conviction is 10 years of custody, a $250,000 fine, or both; 3 years of supervised release; and a $100 Special Assessment. Restitution may also be ordered.
The charge is merely an accusation and Sporrer is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Jones County Sheriff’s Office; the Bureau of Alcohol, Tobacco, Firearms and Explosives; and the Northern Plains Safe Trails Drug Enforcement Task Force. Assistant U.S. Attorney Jay Miller is prosecuting the case.
Sporrer was remanded to the custody of the U.S. Marshal. A trial date has not been set.
Mortgage Broker Pleads Guilty to Defrauding Financial InstitutionRead the Press Release
Tampa, Florida - United States Attorney Robert E. O'Neill announces that Gloria Arias (44, Weston) pleaded guilty today to making material misrepresentations to a financial institution. Arias faces a maximum penalty of 30 years in federal prison for her involvement in this mortgage fraud offense.
According to the plea agreement, Arias worked as a mortgage broker for Synergy Lending Group. The owner of Synergy Lending also owned and operated a real estate business (“Realty Alliance, LLC”) and a title agency (“Title Executives of Broward, Inc.”). In the summer of 2006, Realty Alliance was hired to market condominium units at The Arbors at Carrollwood (“The Arbors”). The Arbors is a 390-unit condominium complex located at 3939 Ehrlich Road in Hillsborough County. Synergy Lending was responsible for assisting prospective borrowers in obtaining financing from various mortgage lenders to purchase condo units at The Arbors. Arias used her role as a mortgage broker to ensure that borrowers were qualified for mortgage loans by including false information in their Uniform Residential Loan Applications. She falsely inflated gross monthly incomes, included bogus employment information, padded bank account balances, and added false primary residence designations.
Through Arias’ fraudulent activities, the following mortgage loans were obtained in connection with the purchase and sale of condo units at The Arbors:
Buyer Development Lender Loan Amount Sale after Foreclosure or Market Value Loss Amount W.Q.K.
The Arbors Countrywide Bank $155,358.00 $27,425.00 $127,933.00 The Arbors Countrywide Bank $146,448.00 $31,300.00 $115,148.00 O.C. The Arbors Countrywide Bank $218,426.00 $45,254.00 $173,172.00
TOTAL: $416,253.00This case was investigated by the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney Simon Gaugush.
Massive Joint Law Enforcement Operation Dismantles Southeastern Connecticut Heroin and Cocaine RingsRead the Press Release
Niantic, Conn. – In a massive operation headed by the U.S. Attorney’s Office for the District of Connecticut and Homeland Security Investigations in Connecticut, in partnership with federal, state and local law enforcement agencies, approximately one hundred individuals were arrested today on charges related to the large-scale trafficking of heroin and cocaine from the Dominican Republic and Puerto Rico into and around southeastern Connecticut.
The announcement of this long-term investigation and today’s arrests was made by David B. Fein, U.S. Attorney for the District of Connecticut, Michael L. Regan, State’s Attorney for the Judicial District of New London, Bruce M. Foucart, Special Agent in Charge of Homeland Security Investigations in New England, Steven G. Hughes, Special Agent in Charge of U.S. Secret Service, New York Field Office, New London Police Chief Margaret Ackley, Norwich Police Chief Louis J. Fusaro, Sr., Colonel Danny R. Stebbins of the Connecticut State Police, and other members of federal, state and local law enforcement agencies who participated in the investigation and today’s operation.
This morning, more than 700 law enforcement officers involved in the operation executed scores of federal and state arrest and arrest warrants in Connecticut, New York, Rhode Island, Massachusetts and Puerto Rico. Approximately 52 individuals were arrested on federal narcotics and money laundering charges, and approximately 52 individuals were arrested on state narcotics and related charges. Additional defendants were previously arrested during the course of the investigation, and several individuals are currently being sought by law enforcement. The arrests stem from a 15-month investigation that included the use of court-authorized wiretaps on 15 telephones, extensive physical surveillance and controlled purchases and seizures of cocaine and heroin.
As alleged in criminal complaints filed in association with today’s arrests and unsealed today in U.S. District Court in New Haven, this investigation was initiated in early 2012 to combat narcotics-trafficking and money laundering in the City of New London. The investigation revealed two overlapping conspiracies centered in New London County, one involving heroin distribution and one involving cocaine distribution. The two conspiracies employed a variety of methods to import narcotics from the Dominican Republic and Puerto Rico into southeastern Connecticut, and involved scores of individuals who distributed wholesale amounts of drugs to customers in New London County.
In association with today’s arrests, law enforcement officers executed multiple search warrants and seized narcotics, firearms, cash and vehicles.
“We allege that the defendants arrested today were responsible for a very large percentage of the heroin and cocaine available for street sale in New London County,” said U.S. Attorney David Fein. “As is clear from this extensive and far-reaching investigation and today’s coordinated operation, we in federal, state and local law enforcement are committed to working together, across state and federal borders, to disrupt the flow of illegal narcotics and to identifying and seizing assets purchased with the proceeds of drug trafficking.”
“I would like to take the opportunity to express our office’s appreciation for the tireless work of the members of the US Attorney’s Office, Homeland Security, the Secret Service the Connecticut State Police and all of our local police departments – New London, Norwich, Waterford, Groton Town, Groton City, and East Lyme – in identifying and targeting this large scale narcotics trafficking enterprise in Southeastern Connecticut,” said Michael L. Regan, State’s Attorney for the Judicial District of New London. “The dedication of, and cooperation between, these agencies has been exemplary and is a credit to all.”
“Drug trafficking organizations must be aggressively attacked and dismantled at every level,” said Bruce M. Foucart, special agent in charge of HSI Boston. Foucart oversees HSI throughout New England. “Today we have stopped two criminal organizations from bringing significant quantities of heroin and cocaine into our communities in Connecticut and throughout New England. The result of this operation is nothing short of significant and it underscores what the people expect from law enforcement: Keep drugs out of our neighborhoods. These arrests will keep the citizens of New England safer from the inevitable violence that drug trafficking brings, and chokes off a major drug stream into Connecticut – the largest our agency has ever uncovered in the state's history.”
“The U.S. Secret Service is proud to have participated in the multi-agency criminal investigation leading to the arrests of over 100 suspects involved in this money laundering and narcotics scheme”, said Steven Hughes, Special Agent in Charge of the U.S. Secret Service New York Field Office. “Through a collaborative approach with New York and Connecticut based Secret Service Offices and in conjunction with Homeland Security Investigations, other federal agencies, Connecticut State Police, as well as several local police departments in the New London area, this case exemplifies how cooperation and strong partnerships have allowed us to focus our resources and respond quickly to uncover and prevent these types of crimes, whether they originate within or outside our borders.”
“This law enforcement operation is the culmination of a long-term investigation that was initiated by members of the New London Police Department, Department of Homeland Security and U.S. Secret Service,” said New London Police Chief Margret Ackley. The New London Police Department has dedicated numerous officers to this investigation, and an operation of this size is not possible without the assistance of our federal partners. I would like to take this opportunity to thank the dedicated officers of the New London Police Department and all of our federal partners for making this law enforcement operation possible and actively working to make our community a safer place.”
“The operation today shows the importance and the benefits of interagency cooperation,” said Norwich Police Chief Louis J. Fusaro, Sr. “When local, state, and federal law enforcement agencies all work together the resulting arrests speak for themselves. I am very pleased with the outcome of this law enforcement operation. The arrests made today and the prosecution of these individuals will have a huge effect on illicit activity in the City of Norwich and this region, now and into the future.”
“The Connecticut State Police is a proud participant in this significant investigation, which has targeted and disrupted the flow of narcotics into our state,” said Colonel Danny Stebbins of the Connecticut State Police. “The extraordinary teamwork of local, state and federal law enforcement contributed to today’s successful operation.”
The Heroin Conspiracy
As alleged, the investigation revealed that Luis Ariel Capellan Maldonado, also known as “Ariel,” regularly procured multi-kilogram quantities of heroin from the Dominican Republic and worked with several individuals to distribute the drug in southeastern Connecticut. Operating out of his apartment building on Hawthorne Drive in New London, Capellan Maldonado supplied customers with raw heroin, often in quantities of 50 to 150 grams. He also had access to kilogram quantities of cocaine and sometimes supplied cocaine to wholesale cocaine distributors in New London.
The investigation further revealed that Capellan Maldonado coordinated the shipment of heroin, and sometimes cocaine, via human couriers from the Dominican Republic to the United States. He also obtained heroin from other sources in New York City and Rhode Island.
Capellan Maldonado, a citizen of the Dominican Republic, routinely sent thousands of dollars in drug proceeds back to the Dominican Republic.
The investigation further revealed that one of Capellan Maldonado’s associates, Enrique Luciano, also known as “Ipi,” supplied wholesale quantities of heroin and cocaine to Miguel Morales, also known as “Neow,” and others, who distributed heroin and cocaine to other wholesale distributors and street-level sellers in and around New London.
The Cocaine Conspiracy
As alleged, the investigation revealed that Pedro Rivera, also known as “Cheito,” of Groton, regularly obtained kilogram quantities of cocaine from sources in Puerto Rico. Rivera’s trusted associate, Luis Zayas, also known as “Guichan,” of Waterford, also was involved in the procurement of cocaine. Rivera, Zayas and their associates used a variety of methods to transport the cocaine from Puerto Rico to the United States, including the U.S. mail. Pedro Rivera and Zayas supplied other individuals, including Frankie Rivera, who used his business, PR Speedshop on Westwood Avenue in New London, to sell cocaine to street-level customers.
The investigation also identified Juan G. Cheverez, also known as “Guinchi,” of Groton as a narcotics trafficker who received kilogram-quantities of cocaine in the mail from Axel Matta Figueroa, also known as “Joelito,” in Puerto Rico. At times, Cheverez also obtained cocaine from Luis Zayas. Cheverez was assisted by others with distributing cocaine around New London and in transporting money to Puerto Rico.
The investigation further revealed that Oscar Valentin, also known as “Tato,” and his employees sold narcotics supplied by Pedro Rivera and others to customers from a garage Valentin managed at the intersection of Walker Street and Bristol Street in New London.
The federal defendants arrested today in Connecticut were transported to U.S. District Court in New Haven. Based on the quantity of narcotics involved in these conspiracies, the government is seeking pre-trial detention on the vast majority of the defendants who, if convicted, face mandatory minimum terms of imprisonment of five or ten years.
In addition to the defendants arrested today, during the course of the investigation, three individuals were previously arrested and charged with federal firearms offenses, and five individuals were previously arrested and charged with state narcotics violations.
U.S. Attorney Fein stressed that a complaint is only a charge and not evidence of guilt. Charges are only allegations, and each defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This matter is being investigated by Homeland Security Investigations; United States Secret Service; United States Postal Inspection Service; Bureau of Alcohol, Tobacco, Firearms and Explosives; U.S. Customs and Border Protection, Office of Air and Marine; Connecticut State Police; New London Police Department, Norwich Police Department, Waterford Police Department, Groton Town Police Department, East Lyme Police Department and Putnam Police Department. The United States Marshals Service; ICE Enforcement and Removal Operations; Drug Enforcement Administration; HSI Assistant Attaché, Santo Domingo, Dominican Republic; HSI Arecibo, Puerto Rico Resident Office; Internal Revenue Service – Criminal Investigation; Connecticut Department of Correction, Parole and Community Services; and the Groton City, Willimantic, New Haven and Bristol Police Departments have provided valuable assistance to the investigation.
The federal case is being prosecuted by Assistant United States Attorneys Alina P. Reynolds, Sarah P. Karwan and Henry K. Kopel. The state cases are being prosecuted by the State’s Attorney for the New London Judicial District and Senior Assistant State’s Attorneys Paul Narducci and Stephen Carney.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722 [email protected]Marlon Jenerro Green Pleads Guilty to Threatening Veterans Affairs EmployeesRead the Press Release
JANICE STAVES, age 57, a resident of New Orleans, and JAMES YOUNGBLOOD, age 69, a resident of New Orleans, pled guilty to conspiracy to commit public bribery in federal court today before United States District Court Judge Ivan L.R. Lemelle, announced U. S. Attorney Dana Boente.
According to court documents, STAVES was employed as a Purchasing Clerk for the Housing Authority of New Orleans (HANO) from 1992 until June 1, 2009. YOUNGLOOD also had previously worked at HANO from 1972 until 2003. Upon leaving HANO, YOUNGBLOOD formed and operated YOUNGBLOOD and YOUNGBLOOD Construction, LLC.
During the conspiracy, STAVES and YOUNGBLOOD figured out a way to embezzle money from HANO, which receives federal funding. In 2007, STAVES and YOUNGBLOOD discussed, telephonically and in person, that STAVES could get YOUNGBLOOD paid with HANO funds, for doing no work, and in return, YOUNGBLOOD provided kickbacks to STAVES. During this time frame, YOUNGBLOOD received HANO checks totaling $661,904.11, despite having performed no work. STAVES, deposited approximately $100,448.00 in cash from YOUNGBLOOD, into accounts that she controlled. YOUNGBLOOD would deposit his checks and then bring STAVES cash at the HANO office so that she would receive her portion. YOUNGBLOOD would bring the cash to her office in an envelope. They would meet in the parking lot, or in the parking lots of gas stations or restaurants close to the HANO office.
Legitimate HANO transactions mandated that requisition orders for jobs would come from a particular department, and would be routed to STAVES, who was then supposed to create a legitimate purchase order. The purchase order would then be routed to supervisors for proper approval, and a check would be issued from Accounts Payable after receiving the required supervisor signatures. However, these procedures were not followed. Also, STAVES and YOUNGBLOOD took advantage of the fact that some smaller vendors were allowed to receive prepaid checks to facilitate the payment of workers. STAVES also did not ask for nor receive any requisition orders on jobs purportedly done by YOUNGBLOOD, as no work had been done.
In order to work around HANO’s procedures, STAVES would create fake purchase orders for YOUNGBLOOD and request a prepaid check. The fraudulent purchase order was usually for debris removal and/or supplies, such as locks.
Both defendants face a maximum term of imprisonment of five (5) years, as well as a fine of $250,000.00 and three (3) years of supervised release following any term of imprisonment. Sentencing is set for Wednesday, July 10, 2013 at 2:00pm.
The case was investigated by the Special Agents of the Federal Bureau of Investigation and the United States Department of Housing and Urban Development, Office of the Inspector General. The prosecution is being handled by Assistant United States Attorney Jon Maestri.
(Download Factual Basis - Staves )
(Download Factual Basis - Youngblood )
Marlon Jenerro Green Pleads Guilty to Threatening Veterans Affairs EmployeesRead the Press Release
MARLON JENERRO GREEN, age 41, of New Orleans, Louisiana, pleaded guilty before U.S. District Judge Ivan L.R. Lemelle to one count of making threatening communications announced U. S. Attorney Dana J. Boente.
According to court documents, GREEN is a U.S. military veteran receiving monthly benefits from the United States Department of Veterans Affairs (VA) who called the VA office in New Orleans on May 24, 2011 and threatened to kill an employee over a dispute regarding his VA benefits.
GREEN will be sentenced on July 10, 2013, and faces a maximum term of imprisonment of five (5) years, a fine of $250,000 and three (3) years of supervised release following any term of imprisonment as to each count of the indictment.
The case was investigated by special agents of the Federal Bureau of Investigation and prosecuted by Assistant U.S. Attorney Gregory M. Kennedy.
(Download Factual Basis )
Margate City Commissioner Indicted on Federal Bribery ChargesRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Michael B. Steinbach, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, announced the unsealing of a three-count indictment charging David McLean, 50, a City Commissioner for the City of Margate and a board member on the Margate Community Redevelopment Agency Board (MCRA), with bribery in connection with programs receiving federal funds. McLean made his initial appearance in federal court this morning before U.S. Magistrate Judge Lurana Snow in Fort Lauderdale. If convicted, the defendant faces a maximum statutory sentence of up to 10 years on each count.
The indictment charges defendant David McLean with three counts of bribery in connection with a program receiving federal funds, in violation of Title 18, United States Code, Section 666. More specifically, the indictment alleges that on May 25, 2012, McLean, while a Margate city commissioner, knowingly and corruptly accepted $1,000 in cash and an $8,000 release of back rent, in exchange for his influence in connection with the award of a Margate occupational license (Count 1). The indictment further alleges that on November 2, 2012, McLean accepted $3,000 in cash in exchange for his influence in connection with a $25,000 MCRA construction grant (Count 2). Lastly, the indictment alleges that on January 30, 2013, McLean accepted another $2,000 in cash in exchange for his influence in connection with the $25,000 MCRA construction grant.
U.S. Attorney Wifredo Ferrer stated, “Public officials who sell their office and their influence to line their own pockets with cash undermine the good work of all hard-working public servants, who labor for the public good. That is why corruption in government, at any level, will simply not be tolerated.”
“Investigating public corruption remains one of the FBI’s top priorities. This indictment represents our commitment to investigate corrupt acts and the individuals who are behind them,” said Assistant Special Agent in Charge Scott A. Gilbert, FBI Miami Division. “We encourage anyone who may have information about corruption to come forward and report it.”
Mr. Ferrer commended the investigative efforts of the FBI. The case is being handled by Assistant U.S. Attorney Neil Karadbil.
An indictment is only an accusation and a defendant is presumed innocent unless proven guilty.
Attachments: Indictment (PDF)
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.
Manhattan U.S. Attorney and FBI Assistant Director-In-Charge Announce Guilty Plea from Former Goldman Sachs Vice President for Fraudulently Amassing and Concealing Trading PositionRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and George Venizelos, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced that MATTHEW TAYLOR pled guilty today in Manhattan federal court to wire fraud in connection with a scheme to accumulate and conceal an unauthorized trading position in an account that TAYLOR managed at Goldman, Sachs & Co. (“Goldman Sachs”). TAYLOR was formerly a vice president at Goldman Sachs and a trader on Goldman Sachs’s Capital Structure Franchise Trading (“CSFT”) desk. He pled guilty today before U.S. District Judge William H. Pauley III.
According to the Information filed in Manhattan federal court:
While employed at Goldman Sachs as a vice president, TAYLOR was a member of the CSFT desk and was responsible for a trading account called the CSFT Equity Volatility Portfolio (the “Trading Account”), which included trading in equity derivatives products. Among the products that TAYLOR traded on the CSFT desk were Standard & Poor’s E-mini futures contracts (“S&P E-mini futures”), which are futures contracts tied to the S&P 500 stock index. TAYLOR traded in S&P E-mini futures using an electronic trading platform called “Globex.”
In November 2007, TAYLOR had lost a significant portion of the profits that he had accumulated in the Trading Account earlier that year. As a result, he was instructed by his supervisors to reduce the overall risk in the Trading Account. These supervisors had also previously informed TAYLOR and other traders on the CSFT desk about risk limits for the CSFT desk and acceptable risk levels and trading limits.
Despite these instructions to reduce the risk in the Trading Account, on December 13, 2007, TAYLOR significantly increased the notional value of his long position in S&P E-mini futures by entering a series of electronic trades through Globex. In so doing, he amassed a position that far exceeded all trading and risk limits set by Goldman Sachs, not only for individual traders, but for the entire CSFT desk. TAYLOR increased the profitability of the Trading Account in order to restore his professional reputation with Goldman Sachs and to increase his performance-based compensation.
At the same time that TAYLOR increased his S&P E-mini futures position, he actively concealed this position from others at Goldman Sachs. He recorded multiple false entries for S&P E-mini futures trades that he never made in a manual trade entry system (the “Manual Trade Entry System”), which was typically intended to be used by traders for recording trades that – unlike S&P E-mini futures – could not be executed through the Globex electronic trading platform. TAYLOR recorded multiple false trading entries in the Manual Trade Entry System that were in the opposite direction of the electronic trades he made in the Trading Account. Where TAYLOR purchased S&P E-mini futures in the Trading Account via Globex, he then manually entered fictitious S&P E-mini futures sales in the Manual Trade Entry System. The purpose of entering these fabricated trades was to conceal and understate the true size of the S&P E-mini futures position within the Trading Account, as the fictitious sales functioned to offset portions of TAYLOR’s actual purchases.
In addition, at the end of the trading day on December 13, 2007, TAYLOR prepared a false profit and loss report for the Trading Account (the “December 13, 2007 P&L Report”) that served to conceal his actual oversized position and market risk. He then forwarded the December 13, 2007 P&L Report to his supervisors and others at Goldman Sachs. By the morning of December 14, 2007, however, various employees at Goldman Sachs had detected a significant discrepancy between TAYLOR’s actual position in the Trading Account and what TAYLOR had falsely reported in the December 13, 2007 P&L Report. In response to questioning from these employees, TAYLOR made various false statements about his position and risk in the Trading Account. His fraudulent scheme resulted in significant losses to Goldman Sachs.
TAYLOR, 34, of West Palm Beach, Florida, is charged with one count of wire fraud. This count carries a maximum sentence of 20 years in prison and a fine of the greater of $250,000 or twice the gross gain or loss from the offense. He is scheduled to be sentenced before Judge Pauley on July 26, 2013 at 11:30 a.m.
Mr. Bharara praised the investigative work of the FBI. He also thanked the U.S. Commodity Futures Trading Commission.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force, on which Mr. Bharara serves as a Co-Chair of the Securities and Commodities Fraud Working Group. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.stopfraud.gov.
The case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorney Steve Lee is in charge of the prosecution.
U.S. v. Matthew Taylor Information
Man Charged with Sexual Assault of A Minor on Cruise ShipRead the Press Release
GALVESTON, Texas – Todd Eric Nordahl, 49, of Tucson, Ariz., has been arrested on charges that he had sexual contact with a minor while in the special maritime and territorial jurisdiction of the United States, United States Attorney Kenneth Magidson announced today.
Nordahl was arrested Sunday, March 31, 2013, after the cruise ship returned to port. He is set for a probable cause hearing before U.S. Magistrate Judge John R. Froeschner Thursday at 2:00 p.m.
According to the criminal complaint, on or about March 27, 2013, Nordahl knowingly engaged in sexual contact with a boy he knew to be a minor.
The case arose after a Royal Caribbean security officer contacted the FBI, reporting allegations made by a 15-year-old boy on board the Mariner of the Seas while in international waters.
Nordahl allegedly provided an alcoholic beverage to the minor victim and purportedly made sexual advances toward him. After a brief period of “cuddling,” Nordahl performed oral sex on the minor boy, according to the criminal complaint.
The FBI investigated with the cooperation of Royal Caribbean Cruise Lines. Assistant United States Attorney Sherri. L. Zack is prosecuting the case.
A criminal complaint is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.Livery Fleet Owner Found Guilty in Manhattan Federal Court in Multi-Year Insurance Fraud SchemeRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that SCOTT ERIC SANDERS was found guilty yesterday on all counts against him in an Indictment charging him with participating in a long-running automobile insurance fraud scheme and aggravated identity theft. As part of the scheme, SANDERS, who owns fleets of commercial vehicles, systematically misled insurance companies as to where the vehicles he owned and controlled were garaged and operated, and how those vehicles were being used, so that he could obtain automobile insurance for those vehicles at substantially lower premiums. SANDERS was convicted after a four-week jury trial before U.S. District Judge Lewis A. Kaplan.
According to evidence introduced at trial, other proceedings in this case, and documents previously filed in Manhattan federal court:
In New York State, owners of fleets of commercial vehicles, including livery cars and ambulettes, are required to obtain commercial automobile liability and physical damage insurance coverage. The insurance policy premiums are based, in part, on where the insured vehicles are garaged and operated, as well as how the vehicles are used. Vehicles that are principally garaged or operated in New York City are charged a substantially higher premium than vehicles that are principally garaged or operated elsewhere. Vehicles that are primarily used as livery cabs are charged a substantially higher insurance premium than vehicles that are operated for many other commercial purposes. Owners of livery fleets obtain automobile insurance through the voluntary insurance market or, when they are unable to obtain insurance through the voluntary market, through the New York Automobile Insurance Plan (“NYAIP”). The NYAIP assigns policy applications to insurance carriers doing business in New York State, who are then required to provide insurance coverage to the applicant.
From 2005 through 2010, SANDERS controlled fleets of livery cars that were garaged and operated in New York City. During that time period, SANDERS engaged in a widespread conspiracy to defraud automobile insurance companies in order to obtain automobile insurance for his vehicles at lower premiums by misrepresenting where the vehicles were garaged and operated, and in some instances, how those vehicles were being used. SANDERS caused insurance applications to be submitted to both NYAIP and directly to insurance companies that claimed his vehicles were garaged and operated outside of New York City, when they were not. In addition, on some of those applications, he represented that his vehicles were being used for commercial purposes other than as livery vehicles when they were in fact being used as livery vehicles. In addition, in some of these applications, SANDERS falsely listed other people as the presidents and owners of his companies to conceal his ownership and control of those companies. Relying on these misrepresentations, the insurance companies issued insurance policies for the vehicles controlled by SANDERS at lower premiums than those for which they would have been eligible had the insurance companies been aware of the true locations of garaging, operation, and true use of these vehicles.
In addition, as part of the same scheme, SANDERS helped other commercial fleet owners whose vehicles operated in New York City obtain insurance at lower premiums using the same misrepresentations about how those vehicles were being used and where those vehicles were being garaged and operated. Over the course of his scheme, insurance companies lost millions in premiums that they would have otherwise charged had they been provided accurate garaging, operating, and usage information about the vehicles.
SANDERS was convicted of one count of conspiracy to commit mail and wire fraud, five counts of mail fraud, and one count of aggravated identity theft.
SANDERS, 41, of Saddle River, New Jersey, faces a maximum sentence of 120 years in prison on the seven fraud counts and a mandatory consecutive sentence of two years in prison for the aggravated identity theft count. In addition, he faces a maximum fine of at least $1.5 million and forfeiture of the proceeds of the crime. SANDERS is scheduled to be sentenced by Judge Kaplan on July 9, 2013.
Mr. Bharara praised the United States Postal Inspection Service for its outstanding work in the investigation. Mr. Bharara also thanked the NYAIP and the National Insurance Crime Bureau for their assistance.
This matter is being handled by the Office’s Complex Frauds Unit. Assistant U.S. Attorneys Paul Krieger and Brent Wible are in charge of the criminal case.
Lapwai Man Pleads Guilty to AssaultRead the Press Release
COEUR D'ALENE – Paris Channing Leighton, 41, of Lapwai, Idaho, pleaded guilty today in United States District Court to assault resulting in serious bodily injury, U.S. Attorney Wendy J. Olson announced.
According to court statements, Leighton admitted that on May 18, 2012, he punched or kicked his girlfriend at their residence in Lapwai. The victim was taken to the hospital where a CT scan revealed that Leighton had caused the victim to suffer facial fractures
The charge is punishable by up to ten years in prison, a maximum fine of $250,000, and up to three years of supervised release.
Sentencing is set for June 24, 2013, before U.S. District Judge Edward J. Lodge at the federal courthouse in Coeur d’Alene.
The case was investigated by the Nez Perce Tribal Police and the Federal Bureau of Investigation.
Kentucky Attorney Sentenced to Prison for Stealing More Than Half A Million Dollars from Disabled VeteranRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
CINCINNATI – Brian P. Gilfedder, 65, of Lexington, Kentucky was sentenced in the Eastern District of Kentucky to serve 41 months in federal prison for stealing $639,618.43 in VA and Social Security benefits from a disabled veteran over a 20-year period.
Carter M. Stewart, U.S. Attorney for the Southern District of Ohio, and Quentin G. Aucoin, Special Agent in Charge, Department of Veterans Affairs Office of Inspector General Southeast Field Office (VA-OIG), announced the sentence handed down yesterday by U.S. District Judge Danny C. Reeves in the Eastern District of Kentucky.
According to court documents, Gilfedder pleaded guilty to a one-count bill of information charging him with devising a scheme to defraud, embezzle, steal, and knowingly convert $639,618.43 in VA and Social Security benefits paid out to an incompetent veteran. Gilfedder, licensed to practice law at the time he was appointed fiduciary by the VA in 1990, was responsible for managing the disabled veteran’s financial affairs. Gilfedder admitted that he stole the veteran’s money between January 1991 and August 2011, putting it to his own use and taking it with the intent to deprive the owner of the use or benefit of the money. He was charged with submitting altered VA documents along with fraudulent accountings to VA in order to conceal the theft.
Gilfedder agreed to forfeit his license to practice law in the State of Kentucky as part of his plea agreement. He was also sentenced to serve 3 years of supervised release upon his release from prison and was ordered pay restitution to the VA and Social Security Administration totaling $639,618.43.
The VA fiduciary program was established to protect Veterans and other beneficiaries who, due to injury, disease, or age, are unable to manage their financial affairs. Upon determining a veteran is unable to manage his or her financial affairs, VA will appoint a fiduciary. The fiduciary, normally chosen by the veteran, must undergo an investigation of their suitability to serve. Only after a complete investigation is a fiduciary appointed to manage a veteran’s VA benefits. The fiduciary is responsible to the veteran and oversees the financial management of VA benefit payments. Generally, family members or friends serve as fiduciaries for beneficiaries; however, when friends and family are not able to serve, VA looks for other qualified individuals such as attorneys to serve as a veteran’s fiduciary.
Special Agent in Charge Quentin G. Aucoin stated, “The VA Office of Inspector General is dedicated to aggressively investigating individuals who misuse their fiduciary authority to embezzle VA funds from the incompetent veterans placed under their care.”
“Protecting our nation’s veterans must remain a high priority endeavor,” Stewart said. “Especially disturbing is the act of inflicting intentional harm of any kind upon a disabled or otherwise vulnerable veteran.”
Stewart commended the investigative efforts of the VA-OIG Nashville Resident Agency, along with the assistance of the Social Security Administration Office of Inspector General and the Louisville, Kentucky VA Fiduciary Hub, and Special Assistant U.S. Attorney Kenneth L. Parker, who prosecuted the case.
Jesse Shaderic Wall, Jr. Pleads Guilty in U.S. Federal CourtRead the Press Release
The United States Attorney's Office announced that during a federal court session in Missoula, on April 3, 2013, before U.S. District Judge Jeremiah C. Lynch, JESSE SHADERIC WALL, Jr., a 66-year-old resident of Kalispell, pled guilty to wire fraud. Sentencing has been set for July 12, 2013. He is currently released on special conditions.
In an Offer of Proof filed by Assistant U.S. Attorney Timothy J. Racicot, the government stated it would have proved at trial the following:
At the time of the crimes referenced in the Indictment, WALL was a CPA in the Kalispell area. Beginning in 2008, WALL made material misrepresentations to RBM Lumber Company to induce the company to invest $350,000 with him. One RBM executive explained to law enforcement that WALL was the company's accountant and that he offered to invest some of RBM's money in mediums that would produce a higher rate of return than RBM could get from a bank. RBM agreed and began providing WALL with various sums of money at various times. According to the RBM representative, WALL created a Nevada corporation called Milestone Innovations, Inc., and the money that RBM provided WALL was invested on behalf of that Nevada entity.
WALL used the money he obtained from RBM on his struggling business, as opposed to depositing it into any interest-bearing investments. RBM's expectation was that the money would be readily available should the company need it and WALL was not given authority to tie the funds up for any extended period of time. But in February 2011, when RBM asked WALL to return the money, he was unable to do so. He told RBM that the money was invested in real estate, which was not true. In reality, WALL had spent the RBM money but was hoping to sell his house in the coming months and planned to use the proceeds from that sale to pay RBM. WALL did repay $190,000 to RBM in June 2011.
WALL was interviewed by a Secret Service agent on December 29, 2011. During the interview, WALL expressed a desire to pay RBM back, but also said he "perhaps did say something misleading to them," to induce them to part with their money.
Count I of the Indictment involved a check that WALL wrote on July 1, 2009, from a Wells Fargo Bank account in the name of Milestone Innovations, Inc., for $12,500. The check was written to "Jesse S. WALL, CPA PC," and deposited into WALL's business account at West One Bank. That deposit caused a wire communication in interstate commerce between Wells Fargo Bank in Montana and a federal reserve bank outside Montana.
WALL faces possible penalties of 20 years in prison, a $250,000 fine and 3 years supervised release.
The investigation was conducted by the U.S. Secret Service
Intermountain Health Care Inc. Pays U.S. $25.5 Million<br /> to Settle False Claims Act AllegationsRead the Press Release
Intermountain Health Care Inc. has agreed to pay the United States $25.5 million to settle claims that it violated the Stark Statute and the False Claims Act by engaging in improper financial relationships with referring physicians, the Justice Department announced today. Intermountain operates the largest health system in the state of Utah.
The Stark Statute restricts the financial relationships that hospitals may have with doctors who refer patients to them. The relationships at issue in this matter that the United States alleged were prohibited by the Stark Statute included employment agreements under which the physicians received bonuses that improperly took into account the value of some of their patient referrals; and office leases and compensation arrangements between Intermountain and referring physicians that violated other requirements of the Stark Statute. These issues were disclosed to the government by Intermountain.
“The Department of Justice has longstanding concerns about improper financial relationships between health care providers and their referral sources, because such relationships can corrupt a physician's judgment about the patient's true healthcare needs,” said Stuart F. Delery, Acting Assistant Attorney General for the Department’s Civil Division. “In addition to yielding a recovery for taxpayers, this settlement should deter similar conduct in the future and help make health care more affordable for patients.”
“People should expect that hospitals and doctors care more for their patients than their bottom line profits,” said Gerald Roy, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services region including Utah. “So I applaud Intermountain for recognizing their liability and coming forward to self-disclose these violations. We will vigilantly protect taxpayer-funded health programs against Stark violations through tight coordination with our partners at the Department of Justice.”
This resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover more than $10.2 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 are over $14.2 billion.
The case was handled by the Justice Department’s Civil Division, the United States Attorney’s Office for the District of Utah, the Office of Inspector General of the Department of Health and Human Services and the Centers for Medicare and Medicaid Services. The claims settled by this agreement are allegations only, and there has been no determination of liability.
Indictments Returned in Hammond Federal CourtRead the Press Release
FOR IMMEDIATE RELEASECONTACT: Mary Hatton
www.usdoj.gov/usao/inn/ CELL: (219) 314-9993
Hammond, Indiana—The United States Attorney’s Office announced that the following Indictments were returned on April 3, 2013:
Eugene Jackson, Jr., 32, of Gary, Indiana, was charged with possession of a firearm by a convicted felon.This charge was filed as the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives HIDTA Task Force.This case has been assigned to and will be prosecuted by Assistant United States Attorney Dean Lanter.
Terrance Winton, 48, of Merrillville, Indiana, was charged with possession with the intent to distribute crack cocaine.This charge was filed as the result of an investigation by the Federal Bureau of Investigation GRIT Task Force.This case has been assigned to and will be prosecuted by Assistant United States Attorney Jennifer Chang-Adiga.
Sammy Earl Jones, 29, of Gary, Indiana, was charged with possession of a firearm by a convicted felon.This charge was filed as the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives.This case has been assigned to and will be prosecuted by Assistant United States Attorney Thomas McGrath.
Simmuel Lamont Mobley, 45, of Gary, Indiana, was charged with possession of a firearm and ammunition by a convicted felon.This charge was filed as the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives.This case has been assigned to and will be prosecuted by Assistant United States Attorney Thomas McGrath.
Joseph Jamel Smith, 20, of Chicago, Illinois, was charged with possession of a firearm by a convicted felon.This charge was filed as the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives.This case has been assigned to and will be prosecuted by Assistant United States Attorney Thomas McGrath.
The United States Attorney's Office emphasized that an Indictment is merely an allegation and that all persons charged are presumed innocent until and unless proven guilty in court.
Indictment: Sales of Marijuana Substitute K2 Made Kansas Men More Than $3 MillionRead the Press Release
TOPEKA, KAN. – Three Kansas men who launched a global sales and supply network for a synthetic version of marijuana have been charged with violating the federal Food, Drug and Cosmetic Act, U.S. Attorney Barry Grissom said today.
A 64-page federal indictment alleges the men began selling K2 – named after the second-highest mountain in the world – at a shop in Lawrence, Kan., and quickly expanded the business to encompass a chain of suppliers, retailers, wholesalers and business associates that reached to California; Massachusetts; New Jersey; Portland, Oregon; Las Vegas, Nev.; Indianapolis, Ind.; Argentina; Latvia, Germany, Lithuania, United Kingdom, Ukraine, Netherlands, Canada, Sweden, Singapore, Thailand and Uruguay.
The indictment also alleges the defendants unlawfully smuggled and distributed a Chinese-made diet drug called Que She.
Named in the indictment are:
Bradley Miller, 55, Wichita, Kan., who was part owner of Persephone’s Journey, a retail store in Lawrence, Kan., and Bouncing Bear Botanicals, ostensibly a wholesaler of herbs and botanical products. Bouncing Bear Botanicals was located in the basement of Persephone’s Journey and then moved to a warehouse in Oskaloosa, Kan. Miller developed recipes for K2 and manufactured it.
Clark Sloan, 54, Tonganoxie, Kan., Miller’s brother, who developed and monitored the Bouncing Bear Botanical Web site and worked in marketing and Internet technologies.
Jonathan Sloan, 32, Lawrence, Kan., Clark Sloan’s son, who was co-owner with Miller of Persephone’s Journey and Bouncing Bear Botanicals.Each of them is charged with the following:
One count of conspiracy to distribute a misbranded drug
One count of distributing K2, which is a misbranded drug.
One count of distributing Que She, a misbranded drug.
Eighteen counts of mail fraud.
One count of smuggling Que She into the United States
One count of smuggling K2 out of the United States
One count of smuggling Que She out of the United States
One count of conspiracy to commit money laundering.The indictment alleges: – The defendants manufactured and distributed K2 as an “all natural product” but it contained synthetic chemicals called JWH Compounds that mimic the effects of the THC in marijuana. Their products also contained solvents, either the alcohol Everclear or acetone, as well as other additives.
– They manufactured and sold at least four types of K2 products: Standard, Citron, Blonde and Summit, with Standard being the least potent and Summit being the most potent, depending on the amount of JWH Compounds that were mixed with herbs. The defendants manufactured the K2 without quality controls, resulting in inconsistent potencies.
– They intended K2 products to be smoked like marijuana by recreational drug users, but they falsely referred to K2 products as aromatic incense and falsely labeled them as “not for consumption.” On Sacred Journey’s Facebook page they promoted what they called “K2 Smoke” as follows: “Ask about our new K2 smoke :) K2 = the second highest peak in the world :) Enjoy your journey!”
– Miller and Jonathan Sloan mailed samples of K2 to retail stores along with brochures and pricing information. They gave out free samples of K2 on what they called “Sample Sundays.”
The indictment quotes from e-mails the defendants sent and received including the following: – “I made a new batch...If this flies pretty fast, maybe we can make half a million or so real quick and then bail.”
– “We could name the whole line off of mountains. The higher the strength, the higher the mountain.”
– “Big shipments of some weird substance are going to raise lotsa red flags...As soon as they figure out that it gets people high – BOINK – illegal.”
– “I know that money looks good...But I think it is walking a shaky line. Playing one step ahead of the feds is whacked out.”Upon conviction, the crimes carry the following penalties: Conspiracy: A maximum penalty of five years in federal prison and a fine up to $250,000.
Distributing misbranded K2 or misbranded Que She: A maximum penalty of three years and a fine up to $250,000.
Mail fraud: A maximum penalty of 20 years and a fine up to $250,000 on each count.
Smuggling Que She into the United States: A maximum penalty of 20 years and a fine up to $250,000.
Smuggling Que She or Que She out of the United States: A maximum penalty of 10 years and a fine up to $250,000.
Conspiracy to commit money laundering: A maximum penalty of 20 years and a fine up to $500,000.The Food and Drug Administration investigated. Assistant U.S. Attorney Tanya Treadway is prosecuting.
Illinois Business Owner Indicted for $3 Million Scheme to Sell Foreign Versions of BotoxRead the Press Release
KANSAS CITY, Mo. - Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that an Alton, Ill., business owner was indicted by a federal grand jury today for distributing more than $3 million worth of foreign Botox and Juvederm in the United States.
Christopher Carstens, 47, of Alton, and his company, Orthopaedic Solutions, Inc., were charged in a nine-count indictment returned by a federal grand jury in Kansas City for violations of the Federal Food, Drug and Cosmetic Act.
Today’s indictment alleges that Carstens and Orthopaedic Solutions distributed approximately 5,879 units of a foreign version of the prescription drug Botox and a foreign version of the prescription device Juvederm through their sales representatives to doctors or other health care professionals in the United States between 2008 and 2011, at a retail value of approximately $3,058,183.
Juvederm is a clear, biodegradable gel implant that is injected into the skin to correct wrinkles and folds.
Carstens and Orthopaedic Solutions are charged with one count of mail fraud because they executed their scheme by distributing foreign Botox (which the FDA had not approved for distribution in the United States) via FedEx and attempted to hide their fraudulent scheme from doctors and health care professionals. Carstens and Orthopaedic Solutions are charged with one count of distributing an unapproved new drug across state lines because they had not received approval to import or distribute the foreign version of Botox in the United States. Carstens and Orthopaedic Solutions are charged with one count of distributing a misbranded drug across state lines because the foreign Botox labeling failed to bear the statement “Rx only.”
Carstens and Orthopaedic Solutions are charged with three counts of distributing an adulterated device across state lines because the foreign versions of Juvederm lacked FDA approval for distribution in the United States. Carstens and Orthopaedic Solutions are charged with three counts of distributing a misbranded device across state lines because the Juvederm 3 labeling failed to bear adequate directions for use or appropriate warnings.
Today’s indictment also contains a forfeiture count, which would require Carstens and Orthopaedic Solutions to forfeit to the government any property derived from the proceeds of the scheme, including a money judgment of $3,058,183.
Dickinson cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Jane Pansing Brown. It was investigated by the U.S. Food and Drug Administration, Office of Criminal Investigation.Hermosa Man Sentenced for Assault and EscapeRead the Press Release
United States Attorney Brendan V. Johnson announced that a Hermosa, South Dakota man convicted of two counts of Assault Resulting in Serious Bodily Injury and one count of Escape, charged in two separate criminal cases, was sentenced on April 1, 2013 by U.S. District Judge Roberto A. Lange.
Barry Allman, age 22, was sentenced to 84 months in custody, 2 years of supervised release, and a $200 special assessment to the Victim Assistance Fund for the two counts of Assault Resulting in Serious Bodily Injury. Allman was sentenced to 12 months in custody on the Escape conviction, of which 6 months are consecutive and 6 months are concurrent with the assault conviction, and a $100 special assessment to the Victim Assistance Fund.
The assault conviction stems from an incident that took place on May 3, 2012 in Parmelee. While at a social gathering, Allman fired a 9mm handgun three times into the ground. Two of the rounds ricocheted and caused serious bodily injury to the victims.
The Escape conviction stems from an incident that took place on November 26, 2012 when Allman was released on a furlough from federal custody to attend a funeral. Allman failed to return as ordered, and absconded until he was apprehended on December 18, 2012.
The investigations were conducted by the Federal Bureau of Investigation, U.S. Marshal Service, Rapid City Police Department, and the Rosebud Sioux Tribe Law Enforcement Services. The case was prosecuted by Assistant U.S. Attorney Marie H. Ruettgers.
Allman was remanded to the custody of the U.S. Marshal.
Hartford Man Sentenced to More Than Nine Years in Prison for Illegal Possession of A FirearmRead the Press Release
David B. Fein, United States Attorney for the District of Connecticut, announced that ALEXANDER GARAY, 36, of Hartford, was sentenced today by United States District Judge Vanessa L. Bryant in Hartford to 115 months of imprisonment, followed by three years of supervised release, for illegally possessing a firearm.
According to court documents and statements made in court, on May 22, 2012, GARAY was arrested after he engaged Hartford police officers in a car chase during which he nearly hit an officer, threw bags of heroin out of his car window and forced another individual’s vehicle off the road. A subsequent search of GARAY’s vehicle revealed a Taurus 9 millimeter pistol and an additional quantity of heroin.
The firearm GARAY possessed had been reported stolen from its legal owner in 2006.
Prior to May 2012, GARAY had been convicted of multiple felony offenses, including weapon in a motor vehicle (twice), criminal possession of a firearm, sale of hallucinogens/ narcotics, possession of narcotics (twice), and stealing a firearm.
It is a violation of federal law for a person previously convicted of a felony offense to possess a firearm or ammunition that has moved in interstate or foreign commerce.
GARAY has been detained since his arrest by Hartford Police on May 22, 2012. On January 23, 2013, he pleaded guilty to one count of possession of a firearm by a previously convicted felon.
This matter was investigated by the Hartford Police Department and Bureau of Alcohol, Tobacco, Firearms and Explosives. The case was prosecuted by Assistant United States Attorneys Jonathan S. Freimann and Michelle McConaghy.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722 [email protected]Four Individuals, Including Two Utahns, Charged with Smuggling Peruvian Artifacts into United StatesRead the Press Release
SALT LAKE CITY -- A federal grand jury returned an indictment Wednesday morning charging four individuals, including two residents of West Valley City, Utah, with smuggling Peruvian artifacts into the United States and interstate transportation of the stolen property.
Charged in the indictment are Cesar Guarderas, age 70, and Rosa Isabel Guarderas, age 45, both of West Valley City and Javier Abanto-Sarmiento, age 39, and Alfredo Abanto-Sarmiento, age 36, both of Trujillo, Peru. Both West Valley City residents are naturalized U.S. citizens.
According to a complaint filed in the case, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) special agents initiated an investigation of Javier Abanto-Sarmiento and Cesar Guarderas in October 2012. Abanto-Sarmiento is the brother of Isabel Guarderas. Using an undercover agent, two Peruvian artifacts were purchased from Cesar Guarderas in November. Guarderas was given $3,000 at that time as a down payment for the two artifacts. The complaint alleges Guarderas represented the artifacts to be authentic, not replicas. Ten additional artifacts were purchased from Guarderas for $20,000 in November. The artifacts were examined by Utah Valley University and Tulane University professors, who are experts in the region and cultural time period. They were also tested at a laboratory in Washington. The artifacts were determined to be authentic.
According to the complaint, undercover telephone, e-mail and in-person discussions during the investigation corroborate the artifacts trafficking conspiracy between Javier Abanto-Sarmiento and Cesar Guarderas. Cesar Guarderas said Javier Abanto-Sarmiento had access to more than 100 pieces of pottery in Peru and was willing to ship them to the United States. Abanto-Sarmiento stated that he bribes officials in Peru to get the artifacts out of the country. Guarderas said Abanto-Sarmiento knows where to look for pottery buried in the ground and that he acquired some of his pottery using this method. Guarderas also said that Abanto-Sarmiento had a contact with the National Institute of Culture in Peru who provides him with authentic certifications stating that the pottery are replicas and Guarderas said that Abanto-Sarmiento uses the certifications to illegally export genuine artwork from Peru.
In December, HSI special agents in Salt Lake City detained a parcel originating from Peru and destined for the Guarderas residence in West Valley City. Special agents, who had a warrant to inspect the package, discovered eight artifacts inside the box. Special agents went to the Guarderas home a few days later and, according to the complaint, Guarderas, turned over eight additional artifacts from his garage. HSI special agents also have received an additional nine artifacts that were purchased by the undercover agent from Abanto-Sarmiento and shipped from Peru.
Abanto-Sarmiento was arrested by HSI special agents in Miami on March 4, 2013, as he flew into the United States from Peru. He is in custody and is being transferred to Salt Lake City by U.S. Marshals.
Cesar and Isabel Guarderas were arrested March 25, 2013, on a complaint. Federal prosecutors did not seek detention and the two were released. They are scheduled for arraignment Friday at 10:45 p.m. before U.S. Magistrate Judge Brooke C. Wells.
Alfredo Abanto-Sarmiento, who is in Peru, has not been arrested.
The potential maximum penalty for smuggling goods into the United States is up to 20 years in prison. Interstate transportation of stolen property carries a potential 10-year sentence. Each count has a potential fine of $250,000.
Indictments are not findings of guilt. Individuals charged in indictments are presumed innocent unless or until proven guilty in court.
The case is being prosecuted by the U.S. Attorney’s Office in Salt Lake City and investigated by HSI special agents.
In 1997, the United States and Peru, pursuant to the UNESCO Convention and the enactment of the U.S. Cultural Property Implementation Act, entered into a bi-lateral agreement prohibiting the importation into the United States of specific cultural property originating from Peru, including artifacts and ethnological religious objects.
HSI plays a leading role in criminal investigations that involve the illegal importation and distribution of cultural property, including the illicit trafficking of cultural property, especially objects that have been reported lost or stolen. Specially trained HSI special agents, assigned to both domestic and international offices, partner with governments, agencies and experts to protect cultural antiquities. Since 2007, HSI has repatriated more than 6,600 items representing the cultural heritage of more than 24 countries.
Four Akron Residents Indicted for Conspiracy Involving Student Financial Aid and Fake G.E.D. CertificatesRead the Press Release
Four Akron residents have been indicted for their roles in a conspiracy in which some used fake G.E.D. certificates to enroll in the University of Akron and fraudulently obtain more than $104,000 in financial aid, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
Lori A. Martin, age 46, Raheem J. Martin, age 40, Teresa K. Scott, age 34, and Tina M. Mileca, age 34, are charged with conspiracy to commit mail fraud and wire fraud.
“These defendants cut corners to get money to which they were not entitled,” Dettelbach said. “Our office will continue to prosecute those who defraud the federal government.”
The defendants conspired to obtain federal student financial aid money to which the recipients were neither eligible nor entitled by creating and submitting fake Official Transcripts falsely reporting General Educational Development test results and the awarding of G.E.D. certificates for persons who had not earned and did not have such certificates, according to the indictment.
The defendants submitted these fake documents to the University of Akron to gain admission to the university and, thereby, access to the federal funds. The defendants used the grant and loan money they received to pay for living expenses and other personal expenditures, as well as costs associated with attending the University of Akron, according to the indictment.
The conspiracy took place from August 2006 through September 2011, according to the indictment.
Lori Martin created fake Official Transcripts that reported test results and the awarding of G.E.D. certificates for Raheem Martin, Scott and Mileca. She also helped them complete online applications to the University of Akron and student aid, according to the indictment.Scott and Mileca each paid $200 each to Lori Martin for the fake G.E.D. Official Transcript, according to the indictment.
Lori and Raheem Martin obtained more than $76,100 in Pell Grants and federally insured loans from these activities. Scott received more than $23,800 in Pell Grants and federally insured loans while Mileca obtained at least $4,600, according to the indictment.
As a result of the conspiracy, the Department of Education was defrauded and sustained a total loss of at least $104,611, according to the indictment.
This case was investigated by Special Agents of the Department of Education, Office of Inspector General, located in Ann Arbor, Michigan, and the University of Akron Police Department, with the assistance of the Akron Police Department.
If convicted, the defendants’ sentences will be determined by the Court after review of factors unique to this case, including the defendants’ prior criminal record, if any, the defendants’ roles 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 prosecuted by Assistant United States Attorney Rebecca Lutzko.
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.
Former Stock Broker Pleads Guilty in Manhattan Federal Court to Insider Trading ChargesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that THOMAS C. CONRADT, a former stock broker at a securities trading firm (“Securities Trading Firm-1”), pled guilty today in Manhattan federal court to charges arising from his involvement in an insider trading scheme. The alleged scheme involved the misappropriation of material, non-public information (“Inside Information”) concerning IBM’s acquisition of a software company, SPSS, Inc., in 2009. CONRADT was charged in November 2012, and pled guilty today before U.S. District Judge Andrew L. Carter, Jr. pursuant to a cooperation agreement.
According to the Indictment to which CONRADT pled guilty, statements made during the plea proceeding, and other court documents:
The Inside Information concerning IBM’s acquisition of SPSS originated from a corporate lawyer who was part of the legal team that represented IBM in the transaction (“Attorney-1”) in 2009. On May 31, 2009, Attorney-1 shared Inside Information concerning the transaction, including the names of the parties and the fact that IBM was going to acquire SPSS for a significant premium over its market price, with his close friend, Trent Martin, a former research analyst at an international financial services firm. The information was shared in confidence and, based on their longstanding history of sharing confidences, Attorney-1 expected that Martin would not share the information or use it to trade.
However, in June and July 2009, Martin bought SPSS common stock and call option contracts based on the Inside Information he was given by Attorney-1 and, in turn, shared the tip with his roommate, CONRADT, who worked as a stock broker at a securities trading firm (“Securities Trading Firm-1”). In June and July 2009, CONRADT bought SPSS common stock and tipped David J. Weishaus, his co-worker at Securities Trading Firm-1, who also bought SPSS common stock and call options. CONRADT and Weishaus also tipped their co-workers at Securities Trading Firm-1 (“CC-1 and CC-2”), who then bought SPSS call option contracts. When IBM announced its acquisition of SPSS on July 28, 2009, the share price of SPSS common stock rose by 41% in one day. Thereafter, Martin, CONRADT, Weishaus, CC-1, and CC-2 sold their SPSS positions, yielding total profits of approximately $1 million.
CONRADT, 35, of Denver, Colorado, pled guilty to one count of conspiracy to commit securities fraud and two counts of securities fraud. The conspiracy count carries a maximum sentence of five years in prison and a fine of $250,000, or twice the gross gain or loss from the offense. The securities fraud counts each carry a maximum sentence of 20 years in prison and a maximum fine of $5 million. As part of his plea agreement, CONRADT agreed to forfeit his share of the proceeds obtained from the offense. He is scheduled to be sentenced by Judge Carter on October 3, 2013.
Weishaus is next scheduled to appear before Judge Carter on June 5, 2013. Martin was arrested in in Hong Kong in December 2012 pursuant to a request from the United States and extradited to the United States in March 2013. Martin is next scheduled to appear before Judge Carter on April 10, 2013. The charges against Weishaus and Martin are merely accusations. They are presumed innocent unless and until proven guilty.
Mr. Bharara praised the investigative work of the FBI. He also thanked the U.S. Securities and Exchange Commission. Mr. Bharara noted that the investigation is continuing.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force, on which Mr. Bharara serves as a Co-Chair of the Securities and Commodities Fraud Working Group. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.StopFraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys John T. Zach and David B. Massey are in charge of the prosecution.
U.S. v. Thomas C. Conradt and David J. Weishaus Indictment
Former SSA Executive Sentenced to 15 Months in Prison for Embezzling over $400,000 and Tax EvasionRead the Press Release
Baltimore, Maryland - U.S. District Judge J. Frederick Motz sentenced Salvatore Petti, age 76, of Ellicott City, Maryland today to 15 months in prison followed by three years of supervised release for evading payment of taxes on income earned from a Social Security Administration (SSA) employee association and embezzling funds from the association. Judge Motz also entered an order that Petti: forfeit approximately $83,000 in proceeds held in bank accounts, and from the sale of a personal seat license for the Baltimore Ravens and three Marriott timeshares; and pay restitution totaling $570,493 - $299,724 to the employee association for the funds he embezzled; and $270,769 to the IRS for unpaid taxes from 1998 through 2009.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Thomas J. Kelly of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office.
“There are serious consequences for this type of criminal conduct,” said Thomas J. Kelly, Special Agent in Charge, IRS Criminal Investigation, Washington, D.C. Field Office. “Mr. Petti’s act of intentionally under-reporting income on his federal tax returns is unlawful. Today’s sentence demonstrates the collaborative effort between IRS Criminal Investigation and its federal law enforcement partners in bringing individuals to justice who choose to engage in any financial scheme to defraud the American public.” Petti worked for the SSA for more than 40 years, retiring in 1995 as a District Director. He also served as the treasurer for the Employees Activities Association (EAA) of the SSA, located in Woodlawn, Maryland. The EAA provided social, recreational, welfare, health and athletic activities for its members, the employees of the SSA. EAA was comprised of multiple entities, including two for-profit and three non-profit entities. Between 2005 and 2008, Petti earned an annual salary from the EAA of approximately $60,000.
According to his plea, in 2009, the SSA Office of Inspector General audited the EAA and discovered that Petti had not reported any EAA income to the IRS between 2006 and 2008. Indeed, by February 2009, Petti had not reported to the IRS any EAA income from at least 1998 through 2009. Petti was also able to evade paying taxes on his salary from EAA by classifying himself as an independent contractor, when he in fact knew that he should have been classified as an employee. Unlike other employees of EAA who had income, Social Security, and Medicare taxes withheld from their paychecks, Petti did not. Even though he classified himself as an independent contractor, Petti did not issue himself a Form 1099, he did not send the IRS a Form 1099 showing the income he received, and he did not report his EAA income to the IRS when he filed his false tax returns.
The auditors told Petti in February 2010 that Petti’s EAA income would be reported to the IRS. The next month, Petti filed amended tax returns for the years 2006 through 2009, reporting his EAA salary. Petti, however, included false expenses for purported “office expenses,” “supplies,” “travel” and “utilities.”
Further investigation revealed that Petti was embezzling substantial funds from the EAA. Between 2005 and 2009, in addition to the $60,000 salary he was entitled to receive, Petti issued unauthorized checks to himself, which he falsely classified as “administrative expenses” and “general expenses,” in order to conceal his theft from EAA. Additionally, because Petti knew that the outside accounting firm audited the non-profit entities but not the for-profit entities, Petti issued the checks to himself from the for-profit entities’ bank accounts in order to hide the unauthorized income from the accounting firm. By doing so, Petti was able to hide approximately $416,000 of unauthorized payments to himself between 2005 and 2009. Petti did not report the $416,134 of additional, unauthorized income on either his original tax returns for years 2005 through 2009, nor on his amended tax returns in 2006 through 2009.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
United States Attorney Rod J. Rosenstein thanked the SSA - OIG for its assistance in the case. Mr. Rosenstein commended the IRS Criminal Investigation for its work in the investigation and praised Assistant U.S. Attorney David I. Sharfstein, who prosecuted the case.
Former Portsmouth Restaurant Owner Pleads Guilty to Credit and Debit Card FraudRead the Press Release
CONCORD, N.H. – Former Portsmouth, N.H., restaurateur Brian Pearson, 30, pleaded guilty in United States District Court for the District of New Hampshire to wire fraud, announced United States Attorney John P. Kacavas.
Pearson acknowledged that, from approximately January 2011 to May 23, 2011, he processed more than 1400 unauthorized credit and debit fraud transactions against the accounts of individuals who had previously dined at his now defunct Portsmouth restaurant, Bella Sol. Pearson obtained the credit and debit card numbers from the hard drive of his restaurant’s point-of-sale system where they were stored. Pearson was a resident of Chocorua, N.H., until he was arrested on charges relating to the credit and debit card fraud.
Pearson is facing a maximum prison sentence of twenty years and a fine of $250,000. Pearson is scheduled to be sentenced on July 8, 2013 and has been detained pending sentencing.
This case arose from an investigation jointly undertaken by the U.S. Secret Service and the Portsmouth Police Department. The case is being prosecuted by Assistant United States Attorney Bill Morse.
Former Insurance Broker Indicted for EmbezzlementRead the Press Release
Little Rock - Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas; Randall C. Coleman, Special Agent in Charge of the Little Rock Field Office for the Federal Bureau of Investigation; and Deborah Perry, Acting Regional Director of the United States Department of Labor, Employee Benefits Security Administration; announced today that a federal grand jury indicted John Mathis Lile III, 55, of Little Rock on two counts of embezzlement.
According to the indictment, Lile was formerly the President of Cosmopolitan Life Insurance Company (“Cosmo”) and President, CEO, and Chairperson of Advanced Insurance Brokerage of America, Inc. (“AIBA”), Little Rock-based companies that together funded and managed self-insurance health care plans for small businesses around the State. The indictment goes on to claim that Lile abused his position by using a company-issued credit card to charge personal expenses of more than $300,000 over a three-year span, all of which were ultimately paid for by funds from Cosmo and AIBA.
“When health care companies are victimized, the shockwaves extend far beyond office walls and negatively impact the lives and wellbeing of individual policy holders,” stated Thyer. “Those who steal from trusting citizens for personal gratification will ultimately find there is a price to pay. If convicted of these charges, Lile faces a statutory sentence of ten years on each count.”
“In today’s challenging economic times, hard-working Arkansans must be able to rely on the security of their employment benefits to support themselves and their families,” said SAC Coleman. “My office will continue to work together with the Department of Labor, the Department of Justice, and our other partners to investigate and pursue prosecution of those who choose to embezzle from employment benefit plans.”
“Theft of employee benefit plan assets jeopardizes the security of America’s workers. I hope that this indictment sends a clear message to all who hold an office of trust, or operate or administer employee benefit plans, that the Department of Labor is committed to vigorously pursuing those who abuse their positions for personal gain,” Perry added.
This investigation was conducted by the Federal Bureau of Investigation and the United States Department of Labor. It is being prosecuted by First Assistant United States Attorney Patrick C. Harris and Assistant United States Attorney Alex Morgan.
An indictment contains only allegations. The defendant is presumed innocent unless and until proven guilty.
Former Dallas Police Officer Pleads Guilty to Federal Tax OffenseRead the Press Release
DALLAS — Stephanie Barney appeared on Friday before U.S. Magistrate Judge David L. Horan and pleaded guilty to an information charging one count of making or subscribing a false income tax return. She faces a maximum statutory penalty of three years in federal prison and a $100,000 fine. In addition, according to the terms of the plea agreement, Barney agrees to pay restitution of up to $42,941 to the Internal Revenue Service (IRS). The announcement was made today by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
According to the factual resume filed in the case, Barney admitted that in June 2007, while she was employed as an officer with the Dallas Police Department, she filed an amended joint tax return, for tax year 2006. She admitted that on that return, she claimed false medical deductions and falsely claimed a business loss that caused her to understate the amount of her taxable income.
Barney also admitted, according to the factual resume, that she filed similar false tax returns for tax years 2004 and 2005. When Barney was audited by the IRS in 2007, she provided the investigating revenue agent falsified checks and receipts in an attempt to fraudulently substantiate the questionable itemized deductions she had claimed on her 2006 tax return.
According to the factual resume, the tax loss is $42,941.58, representing the total losses for tax years 2004, 2005 and 2006.
According to an order setting conditions for her release, Barney is a resident of Dallas. A sentencing date has not yet been set.
The case is being investigated by IRS Criminal Investigation. Assistant U.S. Attorney Stephen P. Fahey is in charge of the prosecution.
Former CEO/Owner of Home Health Care Provider Pleads Guilty to Falsifying Records in Connection with A Federal Audit-Audit Involved Medicaid/Medicare Payments-Read the Press Release
WASHINGTON – Jeannette N. Awasum, the former owner of a health care provider, pled guilty today to a federal charge stemming from falsifying records in connection with a U.S. Department of Health and Human Services audit.
The guilty plea was announced by U.S. Attorney Ronald C. Machen Jr., Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office, and Nicholas DiGiulio, Special Agent In Charge of the U.S. Department of Health and Human Services, Office of Inspector General (HHS - OIG) for the region including the District of Columbia.
Awasum, 49, of Germantown, Md., pled guilty in the U.S. District Court for the District of Columbia to a charge of falsification of records in connection with a federal investigation. She is to be sentenced July 9, 2013 by the Honorable Richard J. Leon. The charge carries a maximum statutory sentence of 20 years in prison and a fine of up to $250,000.
According to a statement of offense, signed by the defendant as well as the government, in early June 2010, Awasum, the Chief Executive Officer and owner of Tri State Home Health and Equipment Service, was informed that the U.S. Department of Health and Human Services requested the physician-signed plans of care for 130 of its patients. These plans of care are what authorize providers like Tri State to provide home healthcare services to Medicare and D.C. Medicaid beneficiaries.
Awasum knew that Tri State lacked plans of care for 62 of these 130 patients. Tri State received approximately $1,879,853 from Medicare and D.C. Medicaid for treating these 62 patients during the period for which plans of care were missing. Awasum directed her employees to fraudulently create plans of care for the services that these 62 patients received, making it appear as if the documents had been created prior to the services being provided. In total, the employees created 81 plans of care for these 62 patients.
Awasum instructed one of her employees to take the 81 fabricated forms to a doctor whom Awasum knew never examined these patients. Despite the fact that this doctor never examined these patients, he signed the plans of care in June 2010, making it appear as if he authorized these 62 patients receiving home healthcare services prior to the time that Tri State provided these services. The employee, at Awasum’s directions, placed the fraudulent 81 plans of care in Tri State’s file so that the forms would be present when the U.S. Department of Health and Human Services audited the services provided to these 62 patients.
In announcing the plea, U.S. Attorney Machen, Assistant Director in Charge Parlave, and Special Agent in Charge DiGiulio commended the efforts of those who investigated the case from the FBI’s Washington Field Office and the Office of the Inspector General of the U.S. Department of Health and Human Services. They also praised those who worked on the case from the U.S. Attorney’s Office, including Legal Assistant Donna Galindo, former Assistant U.S. Attorney Courtney G. Saleski, and Assistant U.S. Attorney Matt Graves, who is prosecuting the matter.
13-115Fluor Hanford Agrees to Pay $1.1 Million to Resolve Allegations of Improper LobbyingRead the Press Release
The Justice Department announced today that Fluor Hanford LLC has agreed to pay $1.1 million to settle allegations that Fluor violated the False Claims Act by using federal funds for lobbying. Fluor is a Department of Energy (DOE) contractor that performs management and engineering services at the DOE’s Hanford Nuclear Site in eastern Washington. Fluor’s parent company, Fluor Corporation, is headquartered in Texas and performs engineering, construction and personnel services for commercial and government customers.
Between 2005 and 2009, Fluor contracted with the DOE to manage and operate the Hazardous Materials Management and Emergency Response (HAMMER) Center. The HAMMER Center provides homeland security and emergency response training to first responders and law enforcement personnel. Fluor allegedly used DOE funds to lobby Congress and other federal officials to increase funding for the HAMMER Center, in violation of a federal law known as the Byrd Amendment, which prohibits the use of federal funds for lobbying.
“The money allocated by Congress for this program was designed to train first responders and law enforcement personnel to respond to crisis situations, not to lobby Congress for more funding,” said Stuart F. Delery, Acting Assistant Attorney General for the Civil Division of the Department of Justice. “This resolution demonstrates that the Justice Department will work to ensure that public funds are not used to influence legislation.”
“The cleanup efforts at Hanford are too important to have prime contractors who misuse government funds to lobby for more government funds,” said Michael C. Ormsby, U.S. Attorney for the Eastern District of Washington. “We are pleased that Fluor has settled these allegations and hope that this serves as a reminder to all prime contractors at Hanford that they must be good stewards of tax payer dollars.”
The allegations resolved by today’s settlement were initially alleged in a whistleblower lawsuit filed under the False Claims Act by Loydene Rambo, a former employee of Fluor. Under the False Claims Act, private whistleblowers can sue on behalf of the United States for false claims. The United States has the right to take over the action, as it did here. The whistleblower is entitled to a share of any recovery. Rambo will receive $200,000 of the government’s settlement.
This case was handled by the Civil Division of the Department of Justice and the U.S. Attorney’s Office for the Eastern District of Washington, with investigative assistance provided by the Department of Energy’s Office of Inspector General.
The False Claims Act suit was filed in the U.S. District Court for the Eastern District of Washington, and is captioned United States ex rel. Rambo v. Fluor Hanford, LLC et al., No. cv-11-5037 (E.D. Wash.). The claims settled in this case are allegations only; there has been no determination of liability.
Fluor Hanford Agrees to Pay $1.1 Million to Resolve Allegations of Improper LobbyingRead the Press Release
WASHINGTON – The Justice Department announced today that Fluor Hanford LLC (Fluor) has agreed to pay $1.1 million to settle allegations that Fluor violated the False Claims Act by using federal funds for lobbying. Fluor is a Department of Energy (DOE) contractor that performs management and engineering services at the DOE's Hanford Nuclear Site in Eastern Washington. Fluor's parent company, Fluor Corporation, is headquartered in Texas and performs engineering, construction, and personal services for commercial and government customers.
Between 2005 and 2009, Fluor contracted with the DOE to manage and operate the Hazardous Materials Management and Emergency Response (HAMMER) Center. The HAMMER Center provides homeland security and emergency response training to first responders and law enforcement personnel. Fluor allegedly used Department of Energy funds to lobby Congress and other federal officials to increase funding for the HAMMER Center, in violation of a federal law known as the Byrd Amendment, which prohibits the use of federal funds for lobbying.
"The money allocated by Congress for this program was designed to train first responders and law enforcement personnel to respond to crisis situations, not to lobby Congress for more funding," said Stuart F. Delery, Acting Assistant Attorney General for the Civil Division of the Department of Justice. "This resolution demonstrates that the Justice Department will work to ensure that public funds are not used to influence legislation."
"The cleanup efforts at Hanford are too important to have prime contractors who misuse government funds to lobby for more government funds," said Michael C. Ormsby, United States Attorney for the Eastern District of Washington. "We are pleased that Fluor has settled these allegations and hope that this serves as a reminder to all prime contractors at Hanford that they must be good stewards of tax payer dollars."
The allegations resolved by today's settlement were initially alleged in a whistleblower lawsuit filed under the False Claims Act by Loydene Rambo, a former employee of Fluor. Under the False Claims Act, private whistleblowers can sue on behalf of the United States for false claims. The United States has the right to take over the action, as it did here. The whistleblower is entitled to a share of any recovery. Rambo will receive $200,000 of the government's settlement.
This case was handled by the Civil Division of the Department of Justice and the U.S. Attorney's Office for the Eastern District of Washington, with investigative assistance provided by the Department of Energy Office of Inspector General.
The False Claims Act suit was filed in the United States District Court for the Eastern District of Washington, and is captioned United States ex rel. Rambo v. Fluor Hanford, LLC et al., No. CV-11-5037 (E.D. Wash.). The claims settled in this case are allegations only; there has been no determination of liability.
Federal Jury Convicts Three in Health Care Fraud Scheme Stemming from Their Involvement in the Operation of Euless Healthcare Corp.Read the Press Release
Scheme Involved Nearly $3 Million in Fraudulent Billings
DALLAS — Following a seven-day trial, before U.S. District Judge David C. Godbey, a federal jury has convicted three defendants on health care fraud and related charges stemming from their involvement in the operation of Euless Healthcare Corporation (EHC) and Medic Healthcare Incorporated (Medic), announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas. ECH was located on West Bedford Euless Road in Hurst Texas, and Medic, which operated from October 2009 to May 2011, was located on Bonhomme Road in Houston.
Specifically, defendants Godwin Umotong, 58, and Comfort Gates, 46, both of Houston, were each convicted on one count of conspiracy to commit health care fraud. In addition, Umotong was also convicted on five counts of health care fraud and Gates was convicted on two counts of health care fraud. Umotong was an employee of EHC and Medic; Gates was an employee of Medic. Defendant Vagharshak Smbatyan, 61, of Grenada Hills, California, was convicted on one count of making a false statement to a federal agency.
The conspiracy count and each of the substantive health care fraud counts carry a maximum statutory penalty of 10 years in federal prison, a $250,000 fine and restitution. The false statement count carries a maximum statutory penalty of five years in federal prison, a $250,000 fine and restitution. Judge Godbey set a July 15, 2013, sentencing date for all three defendants convicted today.
Ovsanna Agopian, the operator of both EHC and Medic, pleaded guilty in November 2012 to one count of conspiracy to commit health care fraud. Agopian, 58, is a resident of Houston; her husband is Vagharshak Smbatyan. Three other defendants charged in the case, Boghos Babadjanian, 55, of Sherman Oaks, CA; Leslie Omagbemi, 56, of Dallas, TX; and Munda Massaquoi, 69, of Houston, TX, also pleaded guilty to their roles in the fraud. All are awaiting sentencing.
According to documents filed in the case and evidence presented at trial, Agopian, Umotong, Omagbemi, Massaquoi and Gates conspired together to submit, or cause to be submitted, fraudulent claims to Medicare for diagnostic tests and office visits. Agopian recruited unlicensed doctors to work for EHC and Medic by telling them that they would treat beneficiaries in the beneficiaries’ homes. Medicare does not pay for services performed by unlicensed persons. Nevertheless, these recruits went to beneficiaries’ homes and purported to conduct medical examinations, including ordering diagnostic tests. In total, more than $2.7 million was fraudulently billed, and of that amount, Medicare paid more than $1.3 million.
The case was investigated by the Dallas Health Care Fraud Prevention and Enforcement Action Team (HEAT) Strike Force, which includes the U.S. Department of Health and Human Services - Office of Inspector General (HHS-OIG), the FBI and the Texas Attorney General’s Medicaid Fraud Control Unit. Assistant U.S. Attorneys Michael McCarthy and Michael Elliott are in charge of the prosecution.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,480 defendants who have collectively billed the Medicare program for more than $4.8 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the HEAT Strike Force, go to: http://www.stopmedicarefraud.gov/.
Federal Grand Jury in San Antonio Returns Tax Related IndictmentsRead the Press Release
In San Antonio today, a federal grand jury returned three indictments charging San Antonio residents with various tax related offenses announced United States Attorney Robert Pitman and Internal Revenue Service–Criminal Investigation Special Agent in Charge Steve McCollough.
The first indictment charges Sampson Delton Cotten with 23 counts of preparing false and fraudulent income tax returns. According to the indictment, Cotton, doing business as SC Financial Consultant Tax Co., knowingly prepared false income tax returns for approximately ten taxpayers from 2007 to 2010 that included fraudulent amounts of business income or loss as well as exemption amounts. Authorities estimate the total loss due to Cotton’s scheme was over $111,000. Upon conviction, Cotton faces up to three years in federal prison per count.
The second indictment charges Mark Schautteet with one count of tax evasion and three counts of making and subscribing a false income tax return. According to the indictment, from 2001 to 2007, the de facto owner and chief executive officer of Forming Services of Texas, Inc.; Forming Systems of Texas, Inc. and Suspended Forms, Inc., did willfully attempt to evade paying federal taxes withheld from employee wages and Federal Insurance Contributions Act (FICA) taxes. The indictment also alleges that Schautteet failed to file Employer’s Quarterly Federal Tax Returns (Form 941) and provided fraudulent information to a tax return preparer thus causing false income tax returns to be filed for tax years 2004, 2005 and 2006 which understated Schautteet’s actual income. The indictment further alleges that Schautteet attempted to hide assets in a trust which he created and used monies from that trust to pay third party debts. Furthermore, the indictment alleges that Schautteet canceled the sale of a parcel of real estate upon which the Internal Revenue Service had placed a lien in an effort to collect the taxes owed. Upon conviction, Shautteet faces up to five years in federal prison for tax evasion and up to three years in federal prison per count for making and subscribing a false income tax return.
The third indictment charges Lapoe Smith, Jr., with one count of tax evasion and four counts of making and subscribing a false income tax return. The indictment alleges that from August 2005 to May 2011, Smith knowingly evaded paying income tax for the calendar year 2005 on $2 million he failed to claim as income.
Upon conviction, Smith faces up to five years in federal prison for tax evasion and up to three years in federal prison per count for making and subscribing a false income tax return.
Assistant United States Attorney William R. Harris is prosecuting these cases on behalf of the Government.
An indictment is merely a charge and should not be considered as evidence of guilt. The defendants are presumed innocent until proven guilty in a court of law.
Farmington Man and Apple Valley Woman Plead Guilty to Armed Robbery of Northfield HotelRead the Press Release
MINNEAPOLIS—Yesterday in federal court in St. Paul, a 27-year-old Farmington man and 29-year-old Apple Valley woman pleaded guilty to the armed robbery of America’s Best Value Inn and Suites in Northfield. On April 2, 2013, Eric Wade Forcier pleaded guilty to two counts of interference with commerce by robbery pursuant to the Hobbs Act; one count of using, carrying, possessing and brandishing a firearm during and in relation to a crime of violence; and one count of being a felon in possession of a firearm. Julie Ann Campana pleaded guilty to one count of aiding and abetting interference with commerce by robbery. Both were indicted on December 3, 2012, and both pleas were entered before United States District Court Judge Paul A. Magnuson.
In his plea agreement, Forcier admitted that on October 29, 2012, he entered the hotel wearing a Halloween mask, pointed a handgun at the night manager, and demanded money from the cash register and the safe. After receiving $114, he ran outside to an awaiting vehicle. Shortly after the car left the scene, police stopped it and arrested Campana, the driver. Forcier fled from police, discharging his handgun, but was arrested later in the day. Officers recovered items from the vehicle as well as along the path that Forcier took in running from the police. Those items included the Halloween mask and a .32-caliber, semi-automatic pistol.Forcier also admitted robbing four other businesses. On October 22, 2012, he stole $1,850 from Eddy’s Bar & Grill in Inver Grove Heights. He admittedly entered the bar, pointed a handgun at several employees, and fired it at the ceiling. On October 15, 2012, he stole $60 from an Apple Valley Domino’s Pizza; on October 18, 2012, he stole $154.41 from a Bloomington SuperAmerica; and on October 19, 2012, he stole $200 from an Apple Valley Jiffy Lube.
Because he is a felon, Forcier is prohibited under federal law from possessing firearms at any time. His prior Dakota County convictions include second-degree drug possession (2008), possession of stolen property (2008), two counts of fifth-degree drug possession (2007), and fleeing police in a motor vehicle (2007).
In her plea agreement, Campana admitted she was the lookout and get-away driver for Forcier on October 29. Campana also admitted that before the robbery, she asked the hotel’s night manager several questions about the hotel’s nighttime operations. In addition, Campana was admittedly Forcier’s get-away driver for the robberies at Eddy’s, SuperAmerica, and Domino’s.
For his crimes, Forcier faces a potential maximum penalty of 20 years in prison on each of the two robbery counts; life in prison for brandishing a firearm; and ten years in prison for being a felon in possession of a firearm. Campana faces a potential maximum penalty of 20 years in prison. Judge Magnuson will determine their sentences at a future hearing, yet to be scheduled.
The Hobbs Act, passed by Congress in 1946, allows federal prosecutors to prosecute individuals who commit armed robberies of businesses engaged in interstate commerce.
This case is the result of an investigation by the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives; the Dakota County Sheriff’s Office; the Rice County Sheriff’s Office; and the police departments of Apple Valley, Bloomington, Inver Grove Heights and Northfield. It is being prosecuted by Assistant U.S. Attorneys Amber M. Brennan and Allen A. Slaughter.Easton Hospital Agrees to Pay Government $454,866Read the Press Release
To Resolve Allegation Of Improper Medicare Claims
The United States Attorney's Office for the Middle District of Pennsylvania announced that Easton Hospital has agreed to pay the United States $454,866 to resolve allegations that it submitted improper claims to the Medicare program. Easton Hospital is a subsidiary of Community Health Systems and is located in Easton, Pennsylvania.
According to United States Attorney Peter J. Smith, Easton Hospital has agreed to pay $454,866 to resolve allegations that from January 1, 2004, through May 28, 2009, Easton Hospital improperly submitted claims to the Medicare program for payment that contained evaluation and management services that were not allowable under Medicare.
Medicare does not normally allow additional payments for such services performed by a provider on the same day as a procedure, unless the service is significant, separately identifiable, and above and beyond the usual preoperative and postoperative care associated with the procedure. In such cases, an attachment to the claim, known as "Modifier 25," may be submitted to allow the additional payment.
In this matter, the government determined that Easton Hospital incorrectly attached Modifier 25 to Medicare claims that led Medicare to pay the hospital for evaluation and management services that were not significant and separately identifiable from the underlying procedure for which Medicare also paid the hospital.
The U.S. Attorney’s Office acknowledged and Easton Hospital’s cooperation and remedial action which helped to resolve the matter. After the Government contacted Easton Hospital concerning improper Modifier 25 claims, the hospital conducted an internal review to determine what caused the improper claims to be submitted to the Medicare program and took action to increase medical coding training and bolster its compliance program.
The Harrisburg Office of the U.S. Attorney’s Office had jurisdiction because Medicare provider claims are processed by Novitas Solutions, Inc., formerly Highmark Medicare Services, in Camp Hill, Pennsylvania. The U.S. Attorney’s Office for the Eastern District of Pennsylvania cooperated in this matter.
The case was investigated by the U.S. Department of Health and Human Services, Office of the Inspector General, in Harrisburg and handled by D. Brian Simpson, of the United States Attorney's Office, Civil Division.
East St. Louis Man Sentenced on Crack Cocaine ChargesRead the Press Release
Kevin M. Cavitt, 45, of East St. Louis, Illinois, was recently sentenced in United States District Court in East St. Louis, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today. The Court sentenced Cavitt to 84 months in prison, followed by six years of supervised release. The Court also imposed a fine of $300 and a special assessment of $100. Cavitt had previously entered a plea of guilty to a single count of Possession with the Intent to Distribute Crack Cocaine. The offense took place in the John DeShields Federal Housing Facility in East St. Louis, Illinois.
“It is always a good thing to stop a drug dealer, but to stop one in public housing is even better.” noted United States Attorney Wigginton.
Information revealed in Court shows that on July 11, 2012, officers of the U.S. Marshal Task Force observed what was believed to be a drug sale between Cavitt and the driver of a vehicle next to the John DeShields housing complex. Upon being asked to stop, Cavitt fled officers and was seen throwing three plastic baggies found to contain “crack cocaine” and a digital scale. Several hundred dollars in cash was found on his person. This money was forfeited as drug proceeds.
The investigation was conducted by the United States Marshal Service Task Force, which includes members of the East St. Louis Police Department, and occurred on a detail called “Ban and Bar” sweeps. This program is coordinated by the United States Attorney’s Office, the U.S. Marshals Service Task Force, and the East St. Louis Housing Authority. The program is designed to reduce crime in the Federal Housing Developments by patrolling federal properties and by arresting individuals that commit crimes on or near federal housing developments. The case was prosecuted by Assistant United States Attorney Deirdre A. Durborow.
Drug Organization Operating in Perry Housing Projects DismantledRead the Press Release
BUFFALO, N.Y.-- U.S. Attorney William J. Hochul, Jr. announced today that a federal grand jury in Buffalo has returned an indictment charging 12 defendants with conspiracy to traffic 280 grams or more of cocaine base and 500 grams or more of cocaine within the Perry Housing Projects. The defendants are also accused of utilizing three apartments within the Perry Housing Projects and a juvenile to further their drug trafficking activities.
This morning, law enforcement officers also executed 11 search warrants and arrested Tyshawn Bradley, 27, and Nannette Brown, 44, both of Cheektowaga, N.Y., Darnell Brown, a/k/a D, 28, Dallas McLamore, a/k/a Ice, a/k/a Dal, 28, Eric Ross, 23, Brandon Atkins, a/k/a YB, 26, Tashawn Gay, 22, Melvin Tucker, a/k/a Hoff, 23, David Varner, 54, Latifah Donaldson, a/k/a LaLa, 21, Tara Robinson, a/k/a Coek, 23 and Phayon Redmond, a/k/a Booper, 27, all of Buffalo. The charges carry a mandatory minimum sentence of 10 years in prison, a maximum of life, a fine of $10,000,000, or both.
In addition, the grand jury has returned three indictments charging Dimone Thomas, a/k/a Pony, 26, Shariff Johnson, a/k/a Ahmad Johnson, 33 and Rudell Jackson, a/k/a Rudy, 24 with distributing cocaine base in the Fruit Belt area of Buffalo. The Jackson charges carry a mandatory minimum five years to forty years imprisonment, a fine of $5,000,000, or both, while the Thomas and Johnson charges carry up to 20 years imprisonment, a $1,000,000 fine, or both.
United States Attorney Hochul stated, “Children and grandmothers living in the Perry apartments - or any public housing project - are entitled to live as safe and secure as every other American.” Hochul continued, “For too long, those who call this area home were subjected to the danger and destruction of drug traffickers. Criminals should know we mean business, while residents and companies alike should know the area is now safe for business, school and play.”Assistant U.S. Attorney Timothy C. Lynch, who is handling the Perry Projects case, stated that the investigation focused on the drug trafficking activities of Tyshawn Bradley, Darnell Brown, Dallas McLamore and their associates. According to the indictment, Bradley, Brown, McLamore and Eric Ross operated a cocaine base and cocaine distribution organization on a daily basis out of several apartments within the Perry Housing Projects, including apartments within the high-rise towers located at 124 Fulton Street and 305 Perry Street. The organization also utilized a person under the age of 18 to distribute cocaine base to customers on the grounds of the public housing facility. Law enforcement utilized court-ordered wire interceptions, undercover drug purchases, covert cameras and traditional police investigative techniques to infiltrate and dismantle this organization.
The Fruit Belt area indictments charge narcotics trafficking in the area of the new Medical Campus.
The indictments are the culmination of an investigation on the part of the Federal Bureau of Investigation’s Safe Streets Task Force, under the direction of Special Agent in Charge Christopher M. Piehota, the New York State Police, under the direction of Major Matthew Renneman, and the Buffalo Police Department, under the direction of Commissioner Daniel Derenda.The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
District Man Enters Plea of Nolo Contendere in Bank Robbery Case-Defendant Arrested Shortly After the Crime-Read the Press Release
WASHINGTON – John Morris, 64, of Washington, D.C., entered a plea of nolo contendere today to a charge of bank robbery while armed, announced U.S. Attorney Ronald C. Machen Jr., Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office, and Cathy L. Lanier, Chief of the Metropolitan Police Department (MPD).
Morris entered the plea in the U.S. District Court for the District of Columbia. Under a nolo contendere plea, a defendant is convicted of the offense, accepts responsibility, and agrees that the government could prove him guilty beyond a reasonable doubt. However, the defendant in such a plea does not admit to the facts of the case. The Honorable Richard W. Roberts scheduled sentencing for June 11, 2013. Morris faces a statutory maximum of 25 years in prison.
According to the government’s evidence, just before noon on March 22, 2012, Morris walked into a TD Bank in the 1200 block of First Street NE. He was wearing a black jacket, black pants, black shoes, sunglasses and a cap. He demanded money from two bank tellers, claiming that he had a bomb. The tellers turned over about $3,700. Morris left a bag behind, which he claimed had the bomb, and warned that he could remotely control its detonation.
Two officers with the Metropolitan Police Department were in the area at the time of the robbery, and they quickly spotted Morris across the street from the bank. A third MPD officer arrived on the scene, and Morris told him, “Yeah, I did it. It’s rough out here.” Morris, who at the time of his arrest was dressed in a black jacket, black pants, black shoes, sunglasses and a cap, also could be seen clearly on video surveillance photographs of the robbery.
The stolen money was recovered after the robbery. Morris’s bomb threat led to an emergency response that included the evacuation of the bank. The bag left inside the bank contained an alarm clock.
In announcing the plea, U.S. Attorney Machen, Assistant Director in Charge Parlave and Chief Lanier thanked those who investigated the case from the MPD and FBI’s Washington Field Office, including the FBI/MPD Violent Crimes Task Force. They also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Stephanie Brooker, former Chief of the Asset Forfeiture and Money Laundering Section, and Paralegal Specialist Jeannette Litz. Finally, they expressed appreciation to Assistant U.S. Attorney Catherine K. Connelly, who is prosecuting the matter.
13-114Deported Honduran Charged with Illegal Re-entering United StatesRead the Press Release
PITTSBURGH - An individual found in Homestead, Pa., has been indicted by a federal grand jury in Pittsburgh on a charge of re-entry into the United States after deportation, United States Attorney David J. Hickton announced today.
The one-count indictment named Wilson Baca-Ortiz, 33, formerly from Honduras, as the sole defendant.
According to indictment, Wilson Baca-Ortiz, an alien, was removed from the United States by United States Immigration and Customs Enforcement on Nov. 21, 2005. Wilson Baca-Ortiz was found on March 21, 2013, pursuant to an on-going investigation into another immigration matter.
The law provides for a maximum total sentence of two years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Paul E. Hull is prosecuting this case on behalf of the government.
Immigration and Customs Enforcement conducted the investigation leading to the indictment in this case.
An indictment or information is an accusation. A defendant is presumed innocent unless and until proven guilty.
Covington Businessman, Bay E. Ingram, Sentenced in Connection with Bp Oil Spill FraudRead the Press Release
BAY E. INGRAM, age 51, a resident of Covington, Louisiana, was sentenced today to 18 months imprisonment by United States District Judge Sarah S. Vance for conspiracy to commit wire fraud in the aftermath of the BP oil spill, announced U.S. Attorney Dana J. Boente. INGRAM was also ordered to pay $463,271.31 in restitution, which he paid today, to the victims of his crimes; Rotorcraft Leasing Company, LLC (RLC) received $314,091.77 and British Petroleum, p.l.c. (BP) received $149,179.54.
According to court documents, INGRAM was a businessman who owned and operated Southeast Recovery Group (SRG), a company which provided disaster relief services in the aftermath of the oil spill due to the sinking of the Deepwater Horizon rig in the Gulf of Mexico in April 2010. INGRAM through his company SRG, provided a helicopter that was supposed to be used for oil spill response by representatives of the St. Bernard Parish Sheriff’s Office and the Louisiana Department of Wildlife and Fisheries, and also assisted in the construction of helipads at the Hopedale, Louisiana facility of British Petroleum, p.l.c. (BP). In the case of both the helicopter and the helipads, INGRAM through his company SRG, acted as a “middleman” between the supplier of the helicopter, and the companies responsible for the construction of the helipads, on the one hand, and BP, who was billed for cost of providing the goods and services, on the other hand. In the case of the helicopter, INGRAM was supplied the helicopter from his supplier, a company called Rotorcraft Leasing Company, LLC (RLC).
According to documents filed with the court, INGRAM arranged for the helicopter to be stationed at Hopedale from June through November 2010, but never had an agreement with BP to supply the helicopter after June 15, 2010. In an effort to get paid by BP, and to justify the amount of his unpaid invoices to BP totalling approximately $1.4 million, INGRAM falsified and forged documents, including a contract between his company and RLC. INGRAM also falsified flight logs and flight manifests for the helicopter.
INGRAM also caused the construction of five helipads at Hopedale at a cost of approximately $110,000. He then falsely represented to BP that his actual costs had been over $250,000, and billed BP for, and was paid, $303,000.
Throughout the period June 2010 and April 2011, court documents assert that INGRAM’s suppliers repeatedly contacted INGRAM in an effort to seek payment. Trying to dissuade his suppliers from contacting BP directly, INGRAM created false and fictitious e-mails, some in the names of real persons and some in the name of a non-existent or fictitious person.
The case was investigated by special agents of the Federal Bureau of Investigation.
The case was being prosecuted by Assistant U. S. Attorneys Matt Chester and Eileen Gleason.
Court of Appeals Rejects Second Amendment Challenge to Federal Firearms StatuteRead the Press Release
BUFFALO, N.Y.-- U.S. Attorney William J. Hochul, Jr. announced today that the United States Court of Appeals for the Second Circuit has rejected a Second Amendment challenge to a federal statute which imposes stiff punishment on drug traffickers who possess firearms to further their drug-trafficking activities. Ron Bryant was convicted in 2008, following a jury trial in federal court in Rochester, New York, of trafficking in crack cocaine and possessing a shotgun in furtherance of his drug activity. Bryant appealed his conviction, claiming that because he possessed the shotgun to protect his home, the federal statute violated his Second Amendment right to bear arms.
Bryant based his claim on the United States Supreme Court’s decision in District of Columbia v. Heller, which was decided shortly after his conviction. In Heller, the Supreme Court said that law-abiding responsible citizens have a constitutional right under the Second Amendment to bear arms for lawful purposes. In a case decided shortly after Heller, the Supreme Court emphasized that this right was most notably “for self-defense within the home.”
In Bryant’s case, the Court of Appeals rejected Bryant’s claim that the Second Amendment protected his right to possess the shotgun to protect himself while he was selling crack cocaine from his home. The Court said that even if Bryant had originally obtained the shotgun for the legitimate reason of protecting himself after he was robbed, “once Bryant engaged in an illegal home business, . . . he was no longer a law-abiding citizen using the firearm for a lawful purpose, and his conviction for possession of a firearm under these circumstances does not burden his Second Amendment right to bear arms.”
Bryant remains in federal prison serving a sentence of 81 months imposed by United States District Judge Charles J. Siragusa following his conviction.
On appeal the government was represented by Assistant United States Attorney Monica J. Richards and the trial was handled by Assistant United States Attorneys Aaron J. Mango and Michael DiGiacomo.
Cleveland Woman Accused of Stealing Prescription Pad from Hospital to Obtain OxycodoneRead the Press Release
A federal grand jury returned a one-count indictment charging a Cleveland woman with conspiracy to possess with intent to distribute Oxycodone, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
Charmin Reeves, age 35, is accused of stealing 10 blank prescriptions from an area hospital where she worked. She filled one out one prescription for 90 pills of Oxycontin in November 2009 and sold the other nine blank prescriptions for $900, according to the indictment.
"Prescription drug abuse is a huge problem throughout Ohio," Dettelbach said. "We will continue to work with our law enforcement partners to push back against this trend."
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. In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
This case is being prosecuted by Assistant United States Attorney Michael L. Collyer. The case was investigated by the Cleveland branch of the Federal Bureau of Investigation and the Cleveland Police Narcotics Unit.
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.
Chicago Man Sentenced to Life in Prison for Killing Bank Teller During Robbery in 2007Read the Press Release
CHICAGO — A Chicago man was sentenced today to life in prison for the fatal shooting of bank teller Tramaine Gibson during a bank robbery at the Illinois Service Federal Savings and Loan on the city’s south side on May 22, 2007. The defendant, DAVID VANCE, was convicted at a trial in July 2011 of the fatal shooting while robbing the ISF bank, located on Martin Luther King Drive, of $6,875 with two co-defendants. A security guard and a customer were also shot during the robbery.
Vance, 34, was also convicted of robbing the Cole Taylor Bank, located on East 63rd Street in Chicago, of $11,438 on May 10, 2007. He received the mandatory life sentence from U.S. District Judge Joan Gottschall, who also imposed a mandatory consecutive sentence of 32 years for Vance’s use of a firearm during the robberies and shooting. There is no parole in the federal prison system.
Judge Gottschall also ordered mandatory restitution of nearly $1.2 million that includes restitution to the banks, as well as funds for the security guard’s disability and the estate of Gibson, who was 23 when he was killed. No funds are likely to be recovered, however, the judge acknowledged in court.
“This heinous crime is an unfortunate example of how an armed robbery can go horribly wrong,” the government argued in support of the mandatory sentence. “A life sentence will send a message to individuals considering such crimes that they will forfeit the right to live in a free society when they are caught. They will forfeit that right not for a few years, but for the rest of their lives.”
Vance jumped the teller counter and “killed Gibson in his cold-blooded pursuit of the money in the bank vault,” the government argued. Vance confronted Gibson, who was unarmed, and demanded that he open the vault, which he was not even able to do. Vance shot Gibson at close range and then dragged his bleeding body toward the bank vault. Because the murder occurred during a bank robbery, the judge ruled that the life sentence was required regardless of whether Vance intended to kill Gibson.
Two co-defendants, Alton Marshall, 34, who testified against Vance, and Henry Bluford, 35, both of Chicago, each pleaded guilty to the bank robberies and, under the terms of their plea agreements, are expected to receive sentences of 20 years in prison when they are sentenced on April 17 and 24, respectively.
The government is being represented by Assistant U.S. Attorneys Sharon Fairley, Lela Johnson, and Andrianna Kastanek.
The sentence was announced by Gary S. Shapiro, United States Attorney for the Northern District of Illinois, and Cory B. Nelson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.
Case SentencedRead the Press Release
BATON ROUGE, LA – United States Attorney Donald J. Cazayoux, Jr. announced today that U.S. District Court Chief Judge Brian A. Jackson sentenced Brad J. Case, age 30, of Baton Rouge, Louisiana, to a term of imprisonment of 96 months and 20 years supervised release after imprisonment. Case had previously pled guilty to one count of distribution of child pornography.
On May 8, 2011, Case distributed 25 images of child pornography to an undercover Special Agent with the Federal Bureau of Investigation (FBI) through the internet using a peer-to-peer file sharing program. The FBI was able to trace the source of the child pornography to an apartment located in Baton Rouge and rented by Case. On October 12, 2011, the FBI executed a search warrant at Case’s apartment and seized, among other things, a computer belonging to Case. A forensic examination of Case’s computer revealed several hundred images and numerous videos depicting child pornography.
This matter was investigated by the United States Attorney’s Office for the Middle District of Louisiana and the Federal Bureau of Investigation. The matter was prosecuted by Assistant United States Attorney Chris Dippel.
Carney's Point, NJ Woman Charged in Multi-Million Dollar Mortgage Fraud SchemeRead the Press Release
Rashika J. Moon, 42, of Carneys Point, New Jersey, was charged today by Information with participating in a mortgage fraud conspiracy involving more than 100 Philadelphia properties and more than $20 million in fraudulent loan proceeds, announced United States Attorney Zane David Memeger. Moon is charged with conspiracy to commit loan and wire fraud, false statement in connection with Federal Housing Administration loan, and loan fraud. The information also seeks the criminal forfeiture of over $1.7 million from Moon.
The information alleges a massive mortgage fraud conspiracy that operated between May 2004 and February 2009, primarily in the West Philadelphia section of the city of Philadelphia. Moon, is alleged to have been associated with KREW Settlement Services, a Philadelphia real estate settlement company that is alleged to have been at the center of the conspiracy. Moon is alleged to have had the legal authority to sign checks from KREW’s bank account. Moon is also alleged to have directly participated in numerous fraudulent loan applications by either purchasing properties in her name based on the submission of false loan applications and other false documents, or by later “selling” many of those properties to “straw buyers” whose identities and fraudulent information were used to obtain other loans. Many of the fraudulent loan applications are alleged to have included falsely-inflated sales prices and falsely-inflated appraisals, causing the lenders to loan more money than the properties than they were truly worth. Most of the mortgages were unpaid and most of the properties fell into foreclosure.
According to the information, co-conspirator Eric Ponder, charged elsewhere, held himself out as a real estate developer and helped cause the submission of numerous fraudulent loan applications that resulted in mortgages being unwittingly issued by various banks by, making false statements on loan applications in his own name and helping secure mortgages in the names of others by recruiting “straw buyers” whose identity and fraudulent information was used to obtain the loans. Ponder is also alleged to have submitted false invoices for construction work never performed on the properties in order to justify payments to him from the settlement proceeds of loans in the names of the straw buyers. The information also alleges that another co-conspirator, Willie G. Manley, charged elsewhere, was an accountant who created false income documents, such as W-2 forms, paystubs, and Form 1040 income tax returns, which were submitted to lenders. The conspiracy also included grossly inflated appraisals, false title insurance policies, false receipts for home repairs that were never performed, and straw buyers who knowingly allowed their names and identities to be used to purchase the properties and defraud the banks.
If convicted, Moon faces a maximum possible sentence 37 years imprisonment, 5 years supervised release, a fine of $1,500,000 or twice the value of the property involved in the transactions, and a $300 special assessmentThe case was investigated by the Federal Bureau of Investigation, the Internal Revenue Service Criminal Investigation, and the Department of Housing and Urban Development’s Office of Inspector General. It is being prosecuted by Assistant United States Attorney Michael S. Lowe.
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UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525CVS to Pay $11 Million to Settle Civil Penalty Claims Involving Violations of Controlled Substances ActRead the Press Release
One of the Largest Settlements Ever Paid for Record-Keeping Violations
By Retail Pharmacy Chain Related to Controlled PharmaceuticalsOklahoma City, Oklahoma -- CVS Pharmacy, Inc., and Oklahoma CVS Pharmacy, L.L.C., (collectively "CVS"), have agreed to pay $11,000,000 to the United States to settle civil penalty claims for record-keeping violations under the Controlled Substances Act and related regulations, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma.
"The abuse of prescription drugs is a well-documented epidemic inflicting devastating, long-term, effects on individuals, families, and entire communities," said U.S. Attorney Sanford C. Coats. "To combat this problem, it is essential that those who dispense controlled substances comply with DEA's record-keeping requirements. This ensures that dispensers of prescription drugs remain accountable for the controlled substances within their control and makes the illegal diversion of those drugs more difficult. I commend the DEA Office of Diversion Control who diligently pursued this investigation."
"Abuse of prescription drugs is one of the most critical issues we face today. The scope of this problem is alarming," said Acting Special Agent in Charge Daniel R. Salter of the DEA Dallas Field Division. "This settlement reinforces the responsibilities of all pharmacies to prevent the diversion of dangerous drugs. This case highlights DEA's steadfast resolve to combat the growing prescription drug abuse problem in this country by ensuring that all DEA registrants, including nationwide pharmacy chains, are in compliance with the law. This is vital to protect public health and keep our communities safe."
The Controlled Substances Act, 21 U.S.C. Sections 801 et seq. ("CSA"), was passed by Congress to combat the illegal distribution and abuse of controlled substances, including prescription medications. The CSA is enforced by the Drug Enforcement Administration's (DEA) Office of Diversion Control, whose mission is to prevent, detect, and investigate the diversion of controlled pharmaceuticals and listed chemicals from legitimate sources while ensuring an adequate and uninterrupted supply for legitimate medical, commercial, and scientific needs. Under the CSA, entities registered with the DEA who purchase, distribute, dispense, transfer, or sell controlled substances must comply with inventory and documentation requirements. Regulations promulgated under the CSA require that each DEA registrant, including pharmacies, maintain complete and accurate records of each substance manufactured, received, sold, delivered, dispensed or otherwise disposed of by the registrant for two years. These requirements play a vital role in ensuring the appropriate handling, accounting, and distribution of controlled substances. Violations of the record-keeping requirements subject DEA registrants to civil monetary penalties.
CVS is a Rhode Island corporation with its corporate headquarters in Woonsocket, Rhode Island. CVS currently operates approximately 7,400 retail pharmacies in the United States that dispense branded and generic prescription drugs, including controlled substance medications, to retail consumers. CVS operates 46 pharmacy retail stores in Oklahoma. Each CVS pharmacy retail store is separately registered with DEA and is assigned a unique DEA registration number to dispense controlled substances as required by the CSA.
The United States has alleged that from October 6, 2005 to October 5, 2011, CVS pharmacy retail stores in Oklahoma and elsewhere violated the CSA and the record-keeping regulations by:
- 1) Creating, entering and maintaining invalid "dummy" DEA registration numbers or numbers other than the valid DEA registration number of the prescribing practitioner on dispensing records, which were at times provided to state prescription drug monitoring programs;
- 2) Filling prescriptions for certain prescribers whose DEA registration numbers were not current or valid; and
- 3) Entering and maintaining CVS dispensing records, including prescription vial labels, in which the DEA registration numbers of non-prescribing practitioners were substituted for the DEA registration numbers of the prescribing practitioners.
In order to resolve the claims by the United States, CVS has agreed to pay $11,000,000 to the government to settle civil penalty claims and acknowledged that each of its DEA-registered retail stores is required to comply with the record keeping requirements as provided under the CSA and the regulations promulgated thereunder. In reaching this settlement, CVS did not admit liability, and the government did not make any concession regarding the legitimacy of the claims. The agreement allows the parties to avoid the delay, expense, inconvenience, and uncertainty involved in litigating the case.
This case was investigated by the Drug Enforcement Administration's Office of Diversion Control, Oklahoma City District Office Diversion Group, and was prosecuted by Assistant United States Attorney Ronald R. Gallegos. Settlement was concluded with the assistance of the Department of Justice Criminal Division’s Narcotic and Dangerous Drug Section.
Buffalo Man Pleads Guilty to Cocaine Charges in 31-Gang CaseRead the Press Release
BUFFALO, N.Y.-- U.S. Attorney William J. Hochul, Jr. announced today that David Howard, age forty-one (41), of Buffalo, New York, pleaded guilty before District Judge Richard J. Arcara for cocaine trafficking in 2008 and 2009. The charge carries a maximum penalty of life in prison.
According to Assistant U.S. Attorney Michael L. McCabe, Howard aided in distributing kilogram amounts of cocaine to members of the “31 Gang” in Buffalo, New York. In doing so, Howard used a house at 115 Shumway, in the City of Buffalo, as a “work house” for the purchase, preparation and distribution of cocaine and crack cocaine. In February 2009, Howard also provided money to co-defendant Marcus Chambers to purchase multiple kilograms of cocaine from a supplier in Mentor, Ohio. On February 17, 2009, Chambers was stopped by local police in Mentor, who recovered $220,000 from Chambers’s vehicle.
Howard was indicated along with 34 others in this case. All defendants have pleaded with 3, including Howard, awaiting sentencing.
The plea was the culmination of an investigation on the part of agents from the Federal Bureau of Investigation under the direction of Special Agent in Charge Christopher M. Piehota and officers on the FBI's Safe Streets Task Force.
Sentencing is scheduled on July 15, 2013 at 1:00 p.m. before Judge Arcara.
Bookkeeper Sentenced to Prison for Fraud and Aggravated Identity TheftRead the Press Release
BIRMINGHAM – U.S. District Judge C. Lynwood Smith Jr. this week sentenced an Etowah County woman to nearly five years in prison for stealing more than $900,000 from her former employer through fraud and identity theft, announced U.S. Attorney Joyce White Vance and FBI Special Agent in Charge Richard D. Schwein Jr.
Judge Smith ordered PEGGY MCGLAUGHN, 68, to serve 57 months in prison, 33 months for the fraud and 24 months for the aggravated identity theft, to be served consecutively to the fraud sentence. McGlaughn also must serve five years’ supervised release after completing her prison sentence and must pay $933,079 in restitution to Bob Roberts & Company, the Etowah County construction company where she worked as bookkeeper and office manager for 24 years. She will be credited $60,750 toward that restitution for two vehicles seized through asset forfeiture proceedings by the FBI.
McGlaughn is scheduled to report to prison in June. She pleaded guilty to the fraud and aggravated identity theft charges in 2011. According to court records, she carried out her scheme to steal from her employer as follows:
From October 2003 until February 2010, McGlaughn obtained the signatures of Bob Roberts & Company principals on company checks and told the principals those checks would be used to pay for company expenses. McGlaughn would make the checks out to another company employee and, unbeknownst to that employee, forge his endorsement on the checks and then present them to a local bank for payment. During the course of her scheme, McGlaughn forged endorsements and cashed more than 100 of the company’s checks, keeping the money for herself.
The FBI investigated the case, and it was prosecuted by the U.S. Attorney’s Office for the Northern District of Alabama.