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Tuesday 12 February 2013
U.S. Attorney Adds Four Federal Prosecutors to Orlando OfficeRead the Press Release
Orlando, FL - U.S. Attorney Robert E. O’Neill announced today that his office has added four new attorneys to its Orlando office. With cumulative responsibilities for federal criminal prosecutions, affirmative and civil defense, appellate, and forfeiture proceedings, the Middle District of Florida includes a geographical area encompassing thirty-five of Florida’s sixty-seven counties. Until recently, approximately 114 attorneys and 129 support staff occupied five offices (Tampa, Orlando, Fort Myers, Jacksonville, and Ocala) covering approximately one-half of the state’s population. Still, the MDFL has kept pace with similarly busy districts for the past several years, with fewer attorneys than some of its respective counterparts.
The Middle District of Florida is one of 94 federal districts across the country. The MDFL (second in population only to the Central District of California) and is one of the busiest districts in the country, consistently ranking within the top three categories for the number of civil case filings and prosecutions involving the exploitation of children (Project Safe Childhood). Impacted by a nationwide hiring freeze and normal attrition, the office has had to do more with less. Finally, to restore the district’s staffing deficit, a Department of Justice waiver allowed for the hiring of additional personnel in FY 2013.
“The caseload doesn’t stop,” said U.S. Attorney Robert O’Neill. “We have had to make some internal adjustments in order to keep pace with the increasing flow of work. During that time, our staff really stepped up to make sure that the public continued to be served. Our district is very diverse in the types of cases that we litigate. Now, with the addition of new personnel, we will be able to continue the great work throughout the district and address those cases more aggressively and effectively.”
On February 11, 2013, U.S. Chief District Judge Anne C. Conway administered the oath of office in Orlando to Shawn P. Napier, Joseph M. Schuster, Andrew C. Searle, and James D. Mandolfo.
Shawn P. Napier is assigned to the Criminal Division. Prior to joining the office, he served as a Senior Assistant Attorney General in the Office of the Ohio Attorney General. Mr. Napier graduated magna cum laude from Capital University Law School, in Columbus, Ohio, where he obtained his Juris Doctorate. He is a graduate of the University of Central Florida where he obtained Bachelor of Arts in Political Science.
Joseph M. Schuster - He is assigned to the Criminal Division. Prior to becoming an Assistant United States Attorney, Mr. Schuster practiced as an associate with the law firm of Dechert LLP, in New York City, specializing in White Collar and Securities Litigation. He graduated with honors from New York University’s Tisch School of the Arts, where he obtained a Bachelor’s Degree in fine Arts Dramatic Writing. He obtained a Master of Arts Degree, with honors, in History of International Relations from the London School of Economics and Political Science. Thereafter, he obtained his Juris Doctorate from the Georgetown University Law Center, in Washington, DC, as a Dean’s Scholar.
Andrew C. Searle is assigned to the Criminal Division. Mr. Searle served as an Assistant District Attorney in the Trial Division of the New York County District Attorney’s Office in New York, prior to joining the office. He graduated from the University of Florida, where he obtained a Bachelor of Science in Business Administration degree in Finance. He obtained his Juris Doctor degree from Temple University, Beasley School of Law, in Philadelphia.
James D. Mandolfo is assigned to the Criminal Division. Before joining the office, Mr. Mandolfo practiced law with the firm of Hunton & Williams LLP, in Miami, where he represented clients in a wide array of complex securities and commercial litigation. He obtained his Juris Doctor degree, cum laude, from Fordham University School of Law, New York, NY and is a graduate of Pennsylvania State University, where he graduated with Highest Distinction and ranked first in the Political Science Department.
U.S. Attorney Adds Five Federal Prosecutors to Tampa OfficeRead the Press Release
Tampa, FL - U.S. Attorney Robert E. O’Neill announced today that his office has added five new attorneys to its Tampa office. With cumulative responsibilities for federal criminal prosecutions, affirmative and civil defense, appellate, and forfeiture proceedings, the Middle District of Florida includes a geographical area encompassing thirty-five of Florida’s sixty-seven counties. Until recently, approximately 114 attorneys and 129 support staff occupied five offices (Tampa, Orlando, Fort Myers, Jacksonville, and Ocala) covering approximately one-half of the state’s population. Still, the MDFL has kept pace with similarly busy districts for the past several years, with fewer attorneys than some of its respective counterparts.
The Middle District of Florida is one of 94 federal districts across the country. The MDFL (second in population only to the Central District of California) is one of the busiest districts in the country, consistently ranking within the top three categories for the number of civil case filings and prosecutions involving the exploitation of children (Project Safe Childhood). Impacted by a nationwide hiring freeze and normal attrition, the office has had to do more with less. Finally, to restore the district’s staffing deficit, a Department of Justice waiver allowed for the hiring of additional personnel in FY 2013.
“The caseload doesn’t stop,” said U.S. Attorney Robert O’Neill. “We have had to make some internal adjustments in order to keep pace with the increasing flow of work. During that time, our staff really stepped up to make sure that the public continued to be served. Our district is very diverse in the types of cases that we litigate. Now, with the addition of new personnel, we will be able to continue the great work throughout the district and address those cases more aggressively and effectively.”On February 5, 2013, U.S. District Judge Steven D. Merryday administered the oath of office in Tampa to Josephine W. Thomas, Natalie Hirt Adams, Suzanne C. Nebesky, Patrick D. Scruggs, and Michael Kenneth.
Josephine W. Thomas is currently assigned to the General Crimes Section in the Criminal Division in Tampa. She has served in the Middle District since October 5, 2009, after coming to the office on a detail from the Department of Justice Honors Program. Ms. Thomas is a graduate of Stetson University School of Law in Gulfport, from where she obtained her Juris Doctorate. She is also a graduate of North Carolina State University, from where she obtained a degree in Textile Chemistry and graduated cum laude.
Natalie Hirt Adams is assigned to the Asset Forfeiture Section, within the Asset Recovery and Victims Rights’ Division, in Tampa. Ms. Adams previously practiced law at the law firm of Wilmer Cutler Pickering Hale and Dorr, LLP, in Washington, D.C., where she was a Senior Associate. She attended Duke University School of Law, where she obtained her Juris Doctorate, cum laude. Ms. Adams is a graduate of Northwestern University in Evanston Illinois, where she obtained a Bachelor of Science Degree in Political Science and Theater, magna cum laude.
Suzanne C. Nebesky is currently assigned to the Financial Litigation Unit within the Asset Recovery and Victims Rights’ Division, in Tampa. Prior to joining the office, Ms. Nebesky was a litigation associate at the law firm of McRae & Metcalf, P.A., in Tampa. She attended the United States Naval Academy, in Annapolis, Maryland from 1997-1998. She is a graduate of the Honors College at the College of Charleston, in Charleston, South Carolina, where she obtained her Bachelor of Arts Degree in Corporate Communications, cum laude. Suzanne graduated from the University Of Florida Levin College Of Law, cum laude.
Patrick D. Scruggs is assigned to the Narcotics Section in Tampa. His previous practice includes working in the Trial Division and the Prescription Drug Investigation Unit of the New York County District Attorney’s Office in New York City. Mr. Scruggs obtained a Bachelor of Science Degree in Foreign Service, with an International Politics Major, from Georgetown University, School of Foreign Service, from where he graduated magna cum laude, in December. He obtained his Juris Doctor degree from Boston College Law School in Newton, Massachusetts.
Michael Kenneth serves in the Civil Division in Tampa. Mr. Kenneth worked as an associate in the law firm of Troutman Sanders in Washington, D.C., where he represented clients in a wide assortment of complex fraud, torts, and commercial litigation cases. He obtained his Juris Doctorate from Harvard Law School. Mr. Kenneth graduated from Yale University, cum laude with honors, where he obtained a B.A. in Ethics, Politics, and Economics.
Two Philadelphia Traffic Court Judges Plead Guilty in Ticket-fixing SchemeRead the Press Release
PHILADELPHIA - H. Warren Hogeland, 75, of Richboro, PA, and Kenneth Miller, 76, of Brookhaven, PA, pleaded guilty today to taking part in a fraud scheme involving seven other judges at Philadelphia Traffic Court. Hogeland was a Bucks County Senior Magisterial District Judge; Miller was a Delaware County Senior District Judge. Both accepted assignments with Traffic Court when their services were requested. The two defendants admitted to participating in the practice of giving breaks on traffic citations to friends, family, the politically-connected, and business associates. Specifically, Hogeland presided over a ticket issued to Miller’s son and declared Miller’s son “not guilty” without him having to make an appearance. Additionally, Miller arranged for a ticket, received by “J.B.,” to be declared “not guilty.” Both defendants pleaded guilty to mail fraud; Hogeland also pleaded guilty to conspiracy.
As part of the scheme, tickets were “fixed” by either being dismissed, finding the ticket holder “not guilty,” or finding the ticket holder guilty of a lesser offense. In many cases, the ticket holder did not even appear in Traffic Court, yet their ticket was “fixed.” As a result, the ticketholders paid lesser or no fines and costs, and evaded the assessment of “points” on their driver’s record. This widespread “ticket-fixing” defrauded both the Commonwealth of Pennsylvania and the City of Philadelphia of funds, and allowed potentially unsafe drivers to remain on the roads.U.S. District Court Judge Robert F. Kelly scheduled sentencing hearings for both Hogeland and Miller on May 24, 2013. Each defendant faces a possible advisory sentencing guideline range of zero to six months in prison, before variances or departures.
This case was investigated by the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorneys Denise S. Wolf and Anthony J. Wzorek.UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525Two Men Sentenced to Prison for Violating Sex Offender Registration and Notification Act (SORNA)Read the Press Release
ALBUQUERQUE – Yesterday a federal district judge in Las Cruces, N.M., sentenced two men to prison terms for failure to comply with the Sex Offender Registration and Notification Act (SORNA), announced by U.S. Attorney Kenneth J. Gonzales and U.S. Marshal Conrad E. Candelaria.
SORNA, also known as the Adam Walsh Protection and Safety Act, requires that a convicted sex offender register in each jurisdiction where the offender resides, where the offender is employed, and/or where the offender is a student, and that the sex offender maintain current registrations.
Vincent Foreman, 41, a Texas resident most recently located in Carlsbad, N.M., was sentenced to 30 months in prison followed by five years of supervised release, for failing to update his sex offender registration in Eddy County, N.M., between Jan. 18, 2011 and Dec. 14, 2011. Foreman was required to register as a sex offender and maintain his registration because he was convicted of criminal sexual contact with a minor and false imprisonment in the State of New Mexico (Cibola County) in Oct. 1997. Although Foreman registered as a sex offender in San Angelo, Texas, after he was released from prison, he failed to update his registration when he relocated to Carlsbad. On April 23, 2012, Foreman pled guilty and admitted that he failed to update his registration as required.
In a separate case, Jessie Lee Cox, 41, most recently residing in Hobbs, N.M., was sentenced to twelve months in prison followed by five years of supervised release, for failing to register as a sex offender. Court records reflect that Cox was required to register as a sex offender because he previously had been convicted of a sex offense in the State of Texas. Cox was arrested on June 20, 2012, and has been in custody since that time. On Oct. 11, 2012, Cox entered a guilty plea and admitted that he failed to register as a sex offender in Lea County, N.M., between Jan. 30, 2011 and Feb. 13, 2012.
The two cases were investigated by the U.S. Marshal Service and were prosecuted by Assistant U.S. Attorney Amanda Gould of the U.S. Attorney’s Las Cruces Branch Office.
Two Former Krahl Construction Executives Sentenced to Prison Terms for Billing Fraud and Kickback SchemeRead the Press Release
CHICAGO — Two former top executives of a defunct general contractor, Krahl Construction, were sentenced to prison terms after pleading guilty to engaging in a $10.4 million fraudulent billing and kickback scheme. Five additional employees of Krahl and two individuals who received kickbacks – all of whom also pleaded guilty – are scheduled to be sentenced on various dates beginning today through mid-March in U.S. District Court.
JOHN PADERTA, 54, of Fontana, Wis., and formerly of Burr Ridge, Krahl’s former president who owned at least 80 percent of the company, was sentenced to five years in prison. DOUG HARNER, 48, of Chicago, Krahl’s former executive vice president and part owner, was sentenced to four years in prison. The sentences were imposed last week by U.S. District Judge Matthew Kennelly, who also will sentence the remaining defendants.
Paderta was ordered to pay restitution of $9,987,463 to Digital Realty Trust, of San Francisco, which hired Krahl to renovate portions of an eight-story building located at 350 E. Cermak, Chicago, and $433,059 to Berwind Property Group, a Chicago firm that hired Krahl to develop commercial property in Bolingbrook known as the Tallgrass project. Paderta was ordered to begin serving his sentence on May 7.
Harner was ordered to pay restitution of $9,471,908 to Digital, and $100,000 to Berwind. He was ordered to begin serving his sentence on May 8. Paderta and Harner were each ordered to also forfeit $9 million in fraudulent proceeds to the government.
The sentences were announced today 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.
The fraud scheme caused actual losses of nearly $10 million to Digital and $433,000 to Berwind, while two former employees of those firms allegedly received kickbacks valued at $625,000 and $119,500, respectively. Krahl, which specialized in interior construction, closed its Chicago office at 322 S. Green St., in January 2010, less than a week after FBI agents executed a federal search warrant. The judge noted that 180 Krahl employees who lost their jobs as a result of the fraud scheme were also victims, as were the company’s customers and sub-contractors whose projects were adversely affected when Krahl closed.
According to court records, between 2005 and 2009, certain defendants fraudulently inflated the cost of renovation projects being performed by Krahl and caused the creation of false documents to support the inflated costs, resulting in over-billing Digital and Berwind a combined total of approximately $15 million. At the same time, the two clients’ employees secretly used their positions to solicit and accept bribe/kickback payments and home improvements in exchange for favorable action to help Krahl obtain contracts with those companies.
The remaining Krahl defendants who admitted roles in the scheme and are awaiting sentencing are: Thaddeus Stepniewski, 52, of Lisle, Krahl’s chief financial officer; Scott Mousel, 49, of New Orleans and formerly of Lisle, a Krahl project manager for two portions of the Cermak project; John Bak, 38, of Ringwood, Ill., also a Krahl project manager on portions of the Cermak project; Heather Ellis, 36, of Midlothian, a Krahl project manager assistant on portions of the Cermak project; and Erin Scott, 37, of Clarendon Hills, also a Krahl project manager assistant on the Cermak project.
Also awaiting sentencing are Scott Solano, 41, of Burr Ridge, a Digital employee who managed the Cermak building, and Timothy Scannell, 49, of Chicago, a Berwind vice president who managed the Tallgrass renovation of a three-story office building and warehouse in Bolingbrook.
Solano solicited and accepted kickbacks from Krahl, including payments totaling approximately $500,000 and renovations on his home totaling approximately $125,000. In exchange for the kickbacks, Solano promised to, and did, take favorable action on behalf of Krahl as requested and as opportunities arose, including helping Krahl obtain contracts from Digital.
Scannell also solicited and accepted kickbacks from Krahl, including payments totaling approximately $100,000, as well as renovations on his home totaling approximately $19,500. In exchange for the kickbacks, Scannell promised to take favorable action on behalf of Krahl as requested and as opportunities arose, including agreeing to help Krahl obtain contracts from Berwind.
The government is being represented by Assistant U.S. Attorneys Stephen Heinze and Jacqueline Stern.
Two Charged with Possession and Distribution of Crack CocaineRead the Press Release
JOHNSTOWN, Pa. - Two residents of Johnstown, Pa., have been indicted by a federal grand jury in Johnstown on charges of distributing and possessing cocaine base, in the form commonly known as "crack," United States Attorney David J. Hickton announced today.
The three-count indictment named James K. Parker, 40, and Ebony R. Thorne 30.
According to the indictment, on Oct. 18, 2012, Parker distributed less than 28 grams of cocaine base; on Oct. 30, 2012, Parker and Thorne distributed less than 28 grams of cocaine base; and on Oct. 31, 2012, they possessed less than 28 grams of cocaine base with the intent to distribute it.
The law provides for a maximum total sentence for Parker of 60 years in prison, a fine of $3,000,000, or both, and for Thorne of 40 years in prison, a fine of $2,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney John J. Valkovci, Jr., is prosecuting this case on behalf of the government.
The Laurel Highlands Resident Agency of the Federal Bureau of Investigation and the Cambria County Drug Task Force conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Tuscaloosa Woman Sentenced for Falsely Claiming Disaster BenefitsRead the Press Release
BIRMINGHAM – A federal judge today sentenced a Tuscaloosa woman to eight months home detention as part of 16 months’ probation for fraudulently claiming disaster benefits following the April 27, 2011, tornadoes that struck Tuscaloosa, Birmingham, and other parts of the state, announced U.S. Attorney Joyce White Vance and James E. Ward, special agent in charge, Department of Homeland Security, Office of the Inspector General.
GLORIA L. MCCOY, 32, pleaded guilty in November to falsely stating to the Federal Emergency Management Agency in an application for disaster benefits that she rented an apartment in Tuscaloosa that was damaged by the storm. Based on her representation to FEMA, the agency paid her $9,161 in disaster-relief benefits. U.S. District Judge Virginia Emerson Hopkins ordered McCoy to pay that amount to FEMA in restitution.
DHS-OIG investigated the case, which was prosecuted by the U.S. Attorney’s Office for the Northern District of Alabama.The public can report fraud, waste, abuse or allegations of mismanagement involving disaster relief operations through the National Disaster Fraud Hotline, toll free, at 1-866-720-5721, or by e-mailing [email protected]. The telephone line is staffed by a live operator 24 hours a day, seven days a week.
Topeka Man Gets 10+ Years for Distributing CrackRead the Press Release
TOPEKA, KAN. – A Topeka man has been sentenced to more than 10 years in federal prison for distributing crack cocaine, U.S. Attorney Barry Grissom said today.
Terry Allen Thomas, Jr., 38, Topeka, Kan., was sentenced to 130 months in federal prison. In November, a federal jury found Thomas guilty on three counts of distributing crack cocaine and two counts of maintaining a residence in furtherance of drug trafficking.
Testimony at trial indicated that Thomas and co-defendants set up crack houses at various rental locations in Topeka. Thomas was convicted of maintaining crack houses at 1306 S.W. Harrison, Apt. 35; and 1312 S.W. Western, Apt. 5.
Co-defendants included:
Willie Marquis Halcrombe, who was sentenced to 108 months.
Glennard Hayes, who was sentenced to 75 months.
Janaya Lechelle Stewart, who was sentenced to 28 months.
Audrey Ferguson, who was sentenced to four months home detention and three years supervised release.Grissom commended the Topeka Police Department and Assistant U.S. Attorney Randy Hendershot for their work on the case.
Thirty-One Alleged Holland Latin Kings Gang Members and Associates Indicted for Racketeering Related ChargesRead the Press Release
Joint Federal and State Investigation Targets Gang Violence, Drug DealingGRAND RAPIDS, MICHIGAN – A federal grand jury indicted 31 alleged members and associates of the Holland Latin Kings gang for a range of offenses, including conspiring to engage in racketeering, committing violent crimes in aid of racketeering, possessing firearms and conspiring to distribute cocaine and marijuana. The grand jury alleges in the indictment that the Holland Latin Kings gang is an enterprise whose members and associates engaged in crimes of violence and drug trafficking in order to promote the gang and enrich its members while insulating themselves from law enforcement, among other things. The charges are the result of a joint federal and state investigation targeting gang violence and drug trafficking in the Holland, Michigan, area.
U.S. Attorney Patrick Miles was joined in the announcement of the charges by: Gil Salinas, Acting Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives; Ronald J. Frantz, Prosecuting Attorney, Ottawa County; D/F/Lt. Mike Harvitt, Michigan State Police; Gary Rosema, Sheriff, Ottawa County Sheriff’s Office; and Matt Messer, Chief of Public Safety, City of Holland Police Department.
The charges in the indictment are only allegations and are not evidence of guilt. The defendants are presumed innocent unless and until proven guilty, and the government has the burden of proving their guilt beyond a reasonable doubt.
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Texas Man Pleads Guilty to Distributing "Bath Salts"Read the Press Release
ROCHESTER, N.Y. - U.S. Attorney William J. Hochul, Jr. announced today that Dung Lam Le, 27, of Dallas, Texas, pleaded guilty today to conspiracy to distribute 4-methyl-N-ethylcathinone, a controlled substance analogue, more popularly known as “4-MEC” or “bath salts” before U.S. District Judge Frank Geraci, Jr. The charge carries a maximum term of 20 years in prison, a fine of $1,000,000, or both.
Assistant U.S. Attorney Douglas E. Gregory, who is handling the case, stated that agents from the Drug Enforcement Administration, acting in an undercover capacity, purchased significant quantities of the controlled substance analogues by communicating with Dung Le via e-mail and on-line. Authorities also seized over one kilogram of 4-methyl-N-ethylcathinone during the course of the investigation.
The Drug Enforcement Administration, along with many local law enforcement agencies, have recently increased their efforts to combat the importation, distribution, and use of designer drugs known as “bath salts,” which have a similar chemical structure to “methcathinone,” a Schedule I controlled substance. “Bath salts” are synthetic stimulants that have no real value as a bath salt or other bath product. Their only known purpose is to be consumed by humans as a recreational drug. Users of “bath salts” typically snort the drug in powder form or ingest the drug in pill form, but some users have been known to smoke it, or inject the drug intravenously. The drug has proven to affect users in a variety of ways, but users typically experience highs similar to those experienced after ingesting MDMA or “ecstasy”, and stimulants like cocaine and methamphetamine (euphoria and increased energy).
Companies located in China and India are principally responsible for manufacturing and exporting “bath salts” to the United States. Shippers of “bath salts” typically mislabel the product to evade detection by law enforcement, and sell the drugs via the Internet to distributors around the world, including in the United States. Distributors in the United States then sell the drugs online, through traditional distribution methods or by retail distribution at convenience stores, gas stations, and “head shops” (retail stores specializing in drug paraphernalia) in packets labeled “bath salts.” “Bath salts” have been shown to have a number of adverse and largely unpredictable effects, which include psychotic episodes, delusions, panic attacks, increased heart rate, chest pain, agitation, dizziness, nausea and vomiting.
The investigation was conducted by Special Agents of the Drug Enforcement Administration, under the direction of Brian R. Crowell, Special Agent in Charge, New York Region.
Sentencing is scheduled for May 14, 2013 at 10:30 a.m. before Judge Geraci.
Ten Current and Former Law Enforcement Officers Among 15 Arrested for Protecting Drug Dealers in Federal Drug Trafficking StingRead the Press Release
Defendants Charged With Providing Security for Undercover Cocaine Transactions
ATLANTA – Seven Metro Atlanta police officers, two former DeKalb County jail officers, a contract officer with Federal Protective Services, and five others have been charged with accepting thousands of dollars in cash payments to provide protection during drug deals in a federal undercover operation.
The defendants are making their initial appearances today before United States Magistrate Judge Alan J. Baverman. U.S. Attorney Sally Quillian Yates announced the case during a press conference today at the Richard Russell Federal Building, joined by FBI Special Agent in Charge Mark Giuliano and ATF Special Agent in Charge Scott Sweetow. Atlanta Police Department Chief George Turner, DeKalb Interim Police Chief Lisa Gassner, Forest Park Police Department Chief Dwayne Hobbs, MARTA Police Department Chief Wanda Dunham, DeKalb County Sheriff Thomas Brown, Stone Mountain Police Department Chief Chauncy Troutman, and Federal Protective Service District Commander Jim Longanecker also attended the press conference.
United States Attorney Yates said, “This is a troubling day for law enforcement in our City. The law enforcement officers charged today sold their badges by taking payoffs from drug dealers that they should have been arresting. They not only betrayed the citizens they were sworn to protect, they also betrayed the thousands of honest, hard-working law enforcement officers who risk their lives every day to keep us safe. We will continue to work with our local law enforcement partners to pursue this corruption wherever it lies.”
Mark F. Giuliano, Special Agent in Charge, FBI Atlanta Field Office, stated: “In recognizing the need for the criminal justice system and those who work within that system to firmly have the public’s trust, the FBI considers such public corruption investigations as being crucial. The FBI will continue to work with its various local, state, and other federal law enforcement agencies in ensuring that the public’s trust in its law enforcement officers is well deserved.”
“Corrupt public officials undermine the fabric of our nation’s security, our overall safety, the public trust, and confidence in those chosen to protect and serve,” said ATF Special Agent in Charge Scott Sweetow. “The corruption and abuse of power exemplified in this case can tarnish virtually every aspect of society.”
The law enforcement officers arrested today were: Atlanta Police Department (APD) Officer Kelvin Allen, 42, of Atlanta; DeKalb County Police Department (DCPD) Officers Dennis Duren, 32, of Atlanta and Dorian Williams, 25, of Stone Mountain, Georgia; Forest Park Police Department (FPPD) Sergeants Victor Middlebrook, 44, of Jonesboro, Georgia and Andrew Monroe, 57, of Riverdale, Georgia; MARTA Police Department (MARTA) Officer Marquez Holmes, 45, of Jonesboro, Georgia; Stone Mountain Police Department (SMPD) Officer Denoris Carter, 42, of Lithonia, Georgia, and contract Federal Protective Services Officer Sharon Peters, 43, of Lithonia, Georgia. Agents also arrested two former law enforcement officers: former DeKalb County Sheriff’s Office (DCSO) jail officers Monyette McLaurin, 37, of Atlanta, and Chase Valentine, 44, of Covington, Georgia.
Others arrested today were: Shannon Bass, 38, of Atlanta; Elizabeth Coss, 35, of Atlanta; Gregory Lee Harvey, 26, of Stone Mountain, Georgia; Alexander B. Hill, 22, of Ellenwood, Georgia; and Jerry B. Mannery, Jr., 38, of Tucker, Georgia.
According to United States Attorney Yates, the charges and the criminal complaints:
The undercover operation arose out of an ATF investigation of an Atlanta area street gang in August 2011. ATF agents learned from an individual associated with the gang that police officers were involved in protecting the gang’s criminal operations, including drug trafficking crimes. According to this cooperating individual, the officers—while wearing uniforms, driving police vehicles, or otherwise displaying badges—provided security to the gang members during drug deals.
In affidavits filed in support of the charges, an FBI agent described how drug traffickers sometimes recruit law enforcement officers to maintain a physical presence at drug deals. The traffickers hope that the officers’ presence at the drug deals will prevent rival drug groups from intervening and stealing their drugs or money, and also keeps legitimate law enforcement officers away from the scene. In return for the corrupt officers’ services, the drug dealers often pay the officers thousands of dollars, according to the affidavits.
Acting at the direction of FBI and ATF, the cooperator communicated to gang members and their associates that the cooperator sought police protection for upcoming drug deals. In response, three individuals—Bass, Coss, and Mannery—while not law enforcement officers themselves, provided the cooperator with the names of police officers who wanted to provide security for drug deals. Once these officers were identified, FBI and ATF agents arranged with the cooperator, as well as with Bass, Coss, and/or Mannery, for the officers to provide security for drug transactions that were described in advance to involve the sale of multiple kilograms of cocaine. The individuals charged today participated in undercover drug sales involving agents and/or cooperators, during which the agents and/or cooperators exchanged cash for kilograms of sham cocaine. The police officers, usually in uniform and displaying a weapon and occasionally in their police vehicles, patrolled the parking lots where the deals took place and monitored the transactions. These transactions were audio and video recorded.
The defendants arrested today include the seven police officers and one contract federal officer who protected the undercover drugs deals, as well as two former sheriff’s deputies who falsely portrayed themselves to be current deputies, and two individuals who falsely represented themselves as officers despite having no connection to a local police department. The defendants also include four individuals who are not law enforcement officers but who acted as intermediaries between the agents and/or cooperators and corrupt officers and also assisted with the scheme.
Specifically, the undercover investigation included the following transactions:
DeKalb County Police Department
Between October 2011 and November 2011, DeKalb County Police Officer Dennis Duren, working together with Bass, provided protection for what he and Bass believed were four separate transactions in the Atlanta area that involved multiple kilograms of cocaine. Duren and Bass accepted cash payments totaling $8,800 for these services. During the transactions, Duren was dressed in his DeKalb County Police uniform and carried a gun in a holster on his belt, as he patrolled on foot in the parking lots in which the undercover sales took place. After the first two transactions, Duren allegedly offered to drive his patrol vehicle to future transactions for an additional $800 fee, and afterward received an additional $800 in cash for using his patrol vehicle in the final transaction in November 2011. Duren and Bass are each charged with conspiring to commit extortion by accepting bribe payments and attempted possession with intent to distribute more than five kilograms of cocaine. Duren also is charged with possessing a firearm in furtherance of a drug trafficking crime.
Between January and February 2013, DeKalb County Police Officer Dorian Williams, working together with Mannery and Bass, provided protection for what he and Mannery believed were three separate transactions in the Atlanta area that involved multiple kilograms of cocaine. Williams and Mannery accepted cash payments totaling $18,000 for these services. During the transactions, Williams was dressed in his DeKalb County Police uniform and carried a gun in a holster on his belt, and he patrolled the parking lots in which the undercover sales took place in his DeKalb Police vehicle. During a meeting between the three transactions, Williams allegedly instructed Bass to remove any cocaine from the scene if Williams had to shoot someone during the upcoming sale. In another meeting, Williams suggested that future drug transactions should take place in the parking lot of a local high school during the afternoon, so that the exchange of backpacks containing drugs and money would not look suspicious. Williams and Mannery are each charged with conspiring to commit extortion by accepting bribe payments and attempted possession with intent to distribute more than five kilograms of cocaine.
Stone Mountain Police Department
Between April and September 2012, Stone Mountain Police Officer Denoris Carter, working together with Mannery, provided protection for what he and Mannery believed were five separate transactions in the Atlanta area that involved multiple kilograms of cocaine. For these services, Carter and Mannery accepted cash payments totaling $23,500. For all five transactions, Carter dressed in his Stone Mountain Police uniform. In four of the deals, he arrived in his police cruiser and either patrolled or parked in the parking lots in which the undercover sales took place and watched the transactions. During the final transaction in September 2012, Carter was on foot, displaying a firearm in a holster on his belt, and he walked through the parking lot in which the transaction took place and watched the participants. Finally, during one of the transactions, Carter agreed to escort the purchaser of the sham cocaine in his police vehicle for several miles, until the purchaser reached Highway 78. Carter is charged with conspiring to commit extortion by accepting bribe payments, attempted possession with intent to distribute more than five kilograms of cocaine, and possessing a firearm in furtherance of a drug trafficking crime.
Atlanta Police Department
Between June and August 2012, Atlanta Police officer Kelvin D. Allen, working together with Coss, provided protection for what he and Coss believed were three separate transactions in the Atlanta area that involved multiple kilograms of cocaine. Allen and Coss accepted cash payments totaling $10,500 for their services. For two transactions, Allen dressed in his Atlanta Police uniform and carried a gun in a holster on his belt. Allen patrolled on foot in parking lots in which the undercover sales took place and appeared to be monitoring the transactions. During a meeting after the three transactions, a cooperator gave Allen and Coss each a $1,000 bonus payment in return for protecting the three transactions. Allen and Coss are each charged with conspiring to commit extortion by accepting bribe payments and attempted possession with intent to distribute more than five kilograms of cocaine. Allen also is charged with possessing a firearm in furtherance of a drug trafficking crime.
MARTA Police DepartmentBetween August and November 2012, MARTA Police Department Officer Marquez Holmes, working together with Coss, provided protection for what he and Coss believed were four separate transactions in the Atlanta area that involved multiple kilograms of cocaine. For these services, Holmes and Coss accepted cash payments totaling $9,000. During the transactions, Holmes was dressed in his MARTA Police uniform and carried a gun in a holster on his belt. In two of the transactions, Holmes patrolled on foot in the parking lots in which the undercover sales took place and monitored the transactions. During the other two deals, Holmes drove to the site in his MARTA police cruiser and parked next to the vehicles in which the undercover drug sale took place. Holmes is charged with conspiring to commit extortion by accepting bribe payments, attempted possession with intent to distribute more than five kilograms of cocaine, and possessing a firearm in furtherance of a drug trafficking crime.
Forest Park Police Department
Between October to December 2012, Forest Park Police Sergeants Victor Middlebrook and Andrew Monroe, sometimes working alone and at other times together, provided protection for what they believed were six separate drug deals in the Atlanta area, all involving multiple kilograms of cocaine. For his services in the first four transactions, Middlebook accepted cash payments totaling $13,800. During these transactions, Middlebrook wore plain clothes, but displayed his badge and a firearm in a holster on his belt. He patrolled on foot in the parking lots nearby the vehicles in which the undercover sales took place and appeared to be monitoring the transactions. For the final two transactions, both Middlebrook and Monroe provided security and were given cash payments totaling $10,400. Middlebrook again monitored the transactions on foot in plain clothes while displaying his badge and gun, while Monroe watched from his vehicle in the parking lot and afterward escorted the purchaser of the sham cocaine for several miles. Middlebrook and Monroe are charged with conspiring to commit extortion by accepting bribe payments and attempted possession with intent to distribute more than five kilograms of cocaine; Middlebrook is also charged with possession of a firearm in furtherance of a drug trafficking crime.
DeKalb County Sheriff’s Office
In January 2013, former DeKalb County Sheriff Jail Officer Monyette McLaurin, working together with Harvey, provided protection for what they believed were two separate drug transactions in the Atlanta area that involved multiple kilograms of cocaine. Harvey already had provided security for two undercover drug transactions in December 2012, falsely representing that he was a DeKalb County detention officer and wearing a black shirt with the letters “SHERIFF” printed across the back during the transactions. Harvey then stated that he knew other police officers who wanted to protect drug deals, and in January 2013 he introduced McLaurin as one of these officers. During a meeting to discuss future drug transactions, McLaurin falsely represented that he was a deputy employed by the DeKalb Sheriff’s office, even though his position as a jail officer ended in 2011. McLaurin and Harvey further stated during this meeting that they may need to kill another person who knew that Harvey had protected drug deals, if this person reported the activity to others.
During the two transactions in January 2013, McLaurin was dressed in a DeKalb County Sheriff’s Office uniform with a badge, and he carried a gun in a holster on his belt. He accompanied the undercover seller of the cocaine to pick up the drugs from a warehouse, counted the kilograms the seller received, and stood outside the purchaser’s vehicle during the actual transaction. He further discussed with the seller whether they should agree upon a signal for the seller to indicate that the sale had gone awry, requiring McLaurin to shoot the drug buyer. For their services, McLaurin and Harvey were paid $12,000 in cash. McLaurin and Harvey are each charged with attempted possession with intent to distribute more than five kilograms of cocaine and with possessing a firearm in furtherance of a drug trafficking crime.
Later in January 2013, McLaurin and Harvey introduced a second former DeKalb County Sheriff’s Jail Officer, Chase Valentine, to help provide security for future drug deals. Like McLaurin, Valentine falsely represented himself to be a DeKalb County Sheriff’s Deputy, even though his position as a jail officer ended in 2010. Together with Harvey, Valentine provided security for one undercover drug transaction on January 17, 2013, during which he wore a DeKalb Sheriff’s Office uniform and a pistol in a holster on his belt. During the transaction, Valentine escorted the seller to pick up the sham cocaine, counted the number of kilograms delivered, and stood outside the purchaser’s car during the actual transaction. For these services, Valentine received $6,000 in cash. Valentine is charged with attempted possession with intent to distribute more than 500 grams of cocaine and possession of a firearm in furtherance of a drug trafficking crime.
Federal Protective Services
In November 2012, Sharon Peters, who was a contract officer for the Federal Protective Services, worked together with Mannery to provide protection for what they believed were two separate transactions in the Atlanta area that involved multiple kilograms of cocaine. For these services, Peters and Mannery accepted cash payments totaling $14,000. For both transactions, Peters parked her vehicle nearby the cars where the sham drugs and money were exchanged, and watched the transactions. Before both transactions, Peters told others that she had her pistol with her in the car. Peters is charged with attempted possession with intent to distribute more than five kilograms of cocaine, and possession of a firearm in furtherance of a drug trafficking crime.
Imposter Clayton County Police Officer
Between December 2012 and January 2013, Alexander B. Hill falsely represented himself to be an officer with the Clayton County Police Department while providing security for what he believed were three separate drug transactions in the Atlanta area that involved multiple kilograms of cocaine. During an initial meeting, Hill wore a uniform that appeared to be from Clayton Police, but during the transactions he wore plain clothes and, for at least the first deal, a badge displayed on his belt. For these services, Hill received payments totaling $9,000 in cash. Hill charged with attempted possession with intent to distribute more than five kilograms of cocaine and with possession of a firearm in furtherance of a drug trafficking crime.
Each charge of attempted possession with intent to distribute at least five kilograms of cocaine carries a maximum penalty of life imprisonment, a mandatory minimum sentence of 10 years in prison and a fine up to $10,000,000. Each charge of attempted possession with intent to distribute at least 500 grams of cocaine carries a maximum penalty of 40 years in prison, a mandatory minimum sentence of five years in prison and fine of up to $5,000,000. Each charge of possession of a firearm in furtherance of a drug trafficking crime carries a maximum penalty of life imprisonment, a mandatory minimum sentence of five years in prison and a fine of up to $250,000. Each charge of conspiring to commit extortion by accepting bribe payments carries a maximum sentence of 20 years in prison and fine of up to $250,000. In determining the actual sentence, the Court will consider the United States Sentencing Guidelines, which are not binding but provide appropriate sentencing ranges for most offenders.
The public is reminded that criminal charges are only allegations. A defendant is presumed innocent of the charges and it will be the government’s burden to prove a defendant’s guilt beyond a reasonable doubt at trial.
These cases are being investigated by special agents of the Federal Bureau of Investigation and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Assistant United States Attorneys Kim Dammers, Jill Steinberg and Brent Alan Gray are prosecuting these cases.
For further information please contact the U.S. Attorney's Public Information Office at [email protected] or (404) 581-6016. The Internet address for the HomePage for the U.S. Attorney's Office for the Northern District of Georgia is www.justice.gov/usao/gan
Attachments:
- Bass, Shannon Criminal Complaint
- Coss, Elizabeth Criminal Complaint
- Harvey, Gregory Lee Criminal Complaint
- Mannery, Jerry B Jr. Criminal Complaint
Suffolk Man Indicted for Offenses That Resulted in the Murder of A Federal WitnessRead the Press Release
NORFOLK, Va. – A federal grand jury sitting in Norfolk, Va., has indicted Leroy Scott, Jr., 49, of Suffolk, on five offenses including conspiracy, witness tampering, retaliation against federal witnesses and the use of a firearm resulting in the murder of one of the witnesses.
Neil H. MacBride, United States Attorney for the Eastern District of Virginia, made the announcement after the indictment was unsealed this afternoon.According to the fivecount indictment, the defendant is alleged to have conspired to prevent Junior Bivins, Jr. and other individuals, from testifying in a court proceeding that related to Scott’s and his associates’ drug distribution activities, weapons violations and other criminal offenses. Scott also sought retaliation against Bivins and others for providing information to law enforcement officers, resulting in the first degree murder of Bivins on or about November 20, 2001 in Suffolk, Virginia.
If convicted of the murder offense, Scott faces a maximum potential punishment of death. Scott is scheduled to be arraigned on these offenses on February 15, 2013, in U.S. District Court, Norfolk.
This case was investigated by the Drug Enforcement Administration and the Suffolk Police Department. Assistant U.S. Laura Everhart is prosecuting the case on behalf of the United States.
Criminal indictments are only charges and not evidence of guilt. A defendant is presumed to be innocent until and unless proven guilty.
A copy of this press release may be found on the website of the United States Attorney's Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on http://pacer.uspci.uscourts.gov.Statement by Attorney General Eric Holder on the Senate Passage of the Violence Against Women ActRead the Press Release
Attorney General Eric Holder issued the following statement today on the Senate passage of the Violence Against Women Act:
“I am extremely pleased the Senate has passed the reauthorization of the Violence Against Women Act, which contains important new provisions to expand access to justice for all victims of violence and strengthen law enforcement and prosecutorial tools to hold accountable those who commit these crimes. Notably, the tribal provisions included in the VAWA reauthorization and originally proposed by the Department of Justice, will close a significant jurisdictional gap that has left too many Native American women, precisely because they are Native American, exposed to violence for far too long. The status quo is simply unacceptable and the Senate has today acted courageously on behalf of our society’s most vulnerable, who deserve not only equal justice but also our unquestionable resolve to protect them. As the House of Representatives now moves to consider reauthorizing this critical law, I urge lawmakers to come together, as they have historically, to pass an improved and strengthened VAWA that continues its 18 years of progress towards ending the scourge of violence against all victims in our society.”
Schuyler County Man Convicted on Child Exploitation ChargesRead the Press Release
ROCHESTER, N.Y.-- U.S. Attorney William J. Hochul, Jr. announced today that Daryl E. Vonneida, 62, of Dix, N.Y., was convicted by a federal jury of 14 charges, including production of child pornography, transporting minors in interstate commerce for illegal sexual activity and possession of child pornography. The defendant, who was previously convicted of sexual abuse in the First Degree in Schuyler County Court, faces a mandatory term of life in prison on four of the charges relating to the production of child pornography and transporting minors in interstate commerce.
U.S. Attorneys Marisa J. Miller and Tiffany H. Lee, who handled the prosecution of the case at trial, stated that the defendant was charged after two minor children came forward with allegations of abuse by Vonneida. Members of the New York State Police and Federal Bureau of Investigation executed a search warrant at the defendant's residence in September 2011 and recovered videos produced by Vonneida in which he coerced four children to engage in sexually explicit conduct. The defendant admitted to producing the videos and to taking the children to Hershey Park, PA and Splash Lagoon in Erie, PA.
Evidence presented by the Government at trial showed that the defendant used his position as a volunteer photographer at a church in Horseheads to gain the trust of the parents and the victims.
"This case serves as an important reminder to parents and guardians of children," said U.S. Attorney Hochul. "As the actions of this defendant demonstrate, child predators can be of any age, and include persons who work to gain the trust of parents and the child. Predators like the defendant are manipulative, resourceful, and can appear kind and generous – such as volunteering to take the child on overnight trips to amusement parks. In order to protect those most vulnerable in our society – our children – parents are reminded to speak often to their children in age specific terms. Topics should include appropriate conduct and permissible physical contact with adults, immediately speaking to the parent about any interaction with an adult which the child believed was inappropriate or 'creepy,' and knowing common lures used by predators to entice their child."For more information, the public is encouraged to visit the following websites, which contain helpful information about protecting children from exploitation and abduction:
NY Sex Offender Registry
http://www.criminaljustice.ny.gov/nsor/
DOJ National Sex Offender Public Website
http://www.nsopw.gov/
What you can do to protect your child (NCJRS)
https://www.ncjrs.gov/html/ojjdp/psc_english_02/intro.html
Office of Juvenile Justice and Delinquency Prevention, Department of Justice
OJJDP Publications—Child Protection
http://ojjdp.ncjrs.org/pubs/missing.html
National Center for Missing and Exploited Children (NCMEC)
http://www.missingkids.com
NCMEC’s website to teach children about dangers on the Internet
http://www.netsmartz.org
The Federal Bureau of Investigation’s Crime Against Children Program webpage
http://www.fbi.gov/hq/cid/cac/crimesmain.htmThe conviction is the culmination of an investigation on the part of Special Agents of the Federal Bureau of Investigation, under the direction of Special Agent in Charge Christopher M. Piehota, and by Investigators with the New York State Police, under the direction of Major Mark Koss.
Sentencing is scheduled for May 13th, 2013 before U.S. District Judge Charles J. Siragusa.Savannah Man Sentenced to over 13 Years in Prison for Federal Firearms OffenseRead the Press Release
SAVANNAH, GA – Charles Starks, 22, of Savannah, Georgia was sentenced yesterday by Senior United States District Court Judge B. Avant Edenfield to 162 months in prison for possessing a firearm as a convicted felon and for a related drug offense. Starks was classified as a “career offender” under the federal sentencing guidelines due to his previous convictions for burglary, obstruction, firearms possession and drug trafficking. Evidence presented at the sentencing hearing revealed that Starks distributed marijuana to an underage female while he possessed a stolen, loaded .38 caliber Smith and Wesson revolver.
The case was investigated and prosecuted under Project Ceasefire, a joint federal, state and local firearms initiative involving the U.S. Attorney’s Office, the Chatham County District Attorney’s Office, the ATF and the Savannah-Chatham Metropolitan Police Department.
United States Attorney Tarver said: “Project Ceasefire is an effective program designed to remove from our streets previously convicted felons who, after their initial release from confinement, continued to engage in criminal activity by using and carrying firearms. The career path chosen by this very young Defendant is extremely unfortunate. Because of his multiple felony convictions, he has qualified for designation into an exclusive category known as the “career offender.” Felons with guns, serve hard time, for a long time.”
Assistant United States Attorney Carlton R. Bourne prosecuted the case on behalf of the United States. For additional information, please contact First Assistant United States Attorney James D. Durham at (912) 201-2547.
Santa Cruz Woman Pleads Guilty to Wire FraudRead the Press Release
SAN JOSE, Calif. – Tara Denise Bonelli today pleaded guilty in federal court in San Jose to Wire Fraud, United States Attorney Melinda Haag announced. In pleading guilty, Bonelli admitted to promoting false and fraudulent real estate investments by knowingly making false promises about how investor funds were to be invested and repaid. Among other inducements, Bonelli promised investors that their funds would be used to purchase foreclosed and distressed properties for resale, when in reality she used those funds for personal expenses.
Bonelli, 33 of Santa Cruz, Calif., was indicted by a federal Grand Jury on March 16, 2011. She was charged with 18 counts of wire fraud in violation of 18 United States Code § 1343. Under the plea agreement, Bonelli pleaded guilty to one count of wire fraud that included the total charged loss of more than $3 million.
The sentencing of Bonelli is scheduled for June 25, 2013, at 9 a.m. before United States District Court Judge Edward J. Davila in San Jose. The maximum statutory penalty for each count of wire fraud, in violation of 18 United States Code § 1343 is 20 years in prison and a fine of $250,000, plus restitution. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Matt Parrella and Susan Knight are the Assistant U.S. Attorneys who are prosecuting the case with the assistance of Elise Etter. The prosecution is the result of a two-year investigation by the Federal Bureau of Investigation and the Internal Revenue Service - Criminal Investigation Division.
(Bonelli Plea Agreement )
Richard Lee Wade Sentenced to 60 Months for Sending Threatening Letters Through the MailRead the Press Release
Memphis, TN – Richard Lee Wade, 50, of Roanoke, VA, was sentenced today to 60 months in federal prison by U.S. District Judge John T. Fowlkes for sending threatening communications through the mail to a pair of Memphis-area women, announced U.S. Attorney Edward L. Stanton III.
# # # #
“Brazen conduct such as Wade’s repeatedly stalking and terrorizing of innocent women and their families will simply not be tolerated,” said U.S. Attorney Stanton. “The sentence imposed today by the court should serve as a clear reminder to individuals who stalk, threaten and intimidate victims as Wade did by using the U.S. Postal Service that they will be prosecuted to the fullest extent of the law and will ultimately suffer the severe consequences of federal imprisonment.”
On May 5, 2012, Wade was indicted on nine counts of sending threatening letters. In these letters, Wade made repeated threats to inflict serious injury upon the women, including torturing and killing them and threatening to have someone else track them down and kill them. In one of the letters, read during his plea hearing, Wade made the threat, “I will not stop until one of us in our grave.”
Wade pleaded guilty to two of the nine counts on November 6, 2012. Following the completion of his prison term, Judge Fowlkes ordered him to serve three years of supervised release. There is no parole in the federal prison system.
This case was investigated by the United States Postal Inspection Service and the Collierville Police Department. Assistant U.S. Attorney Lorraine Craig represented the government.Parmelee Man Charged with Involuntary ManslaughterRead the Press Release
United States Attorney Brendan V. Johnson announced that a Parmelee, South Dakota man has been indicted by a federal grand jury for Involuntary Manslaughter.
Nathaniel Red Bird, age 32, was indicted by a federal grand jury on January 16, 2013. He appeared before U.S. Magistrate Judge Mark A. Moreno on February 7, 2013 and pled not guilty to the indictment. The maximum penalty upon conviction is up to 8 years’ in 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 Red Bird is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Federal Bureau of Investigation and Rosebud Sioux Tribe Law Enforcement Services. Assistant U.S. Attorney Marie H. Ruettgers is prosecuting the case.
Red Bird was remanded to the custody of the U.S. Marshal pending trial. A trial date has been set for April 2, 2013.
Palm Beach County Health Department Employee Arrested for Stealing Patient InformationRead 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, announce that Salita St. Simon, 30, of Belle Glade, was arrested today on a charge of identity theft, in violation of Title 18, United States Code, Section 1028(a)(7). If convicted, St. Simon faces up to five years imprisonment and three years of supervised release.
According to the criminal complaint and information provided in Court, St. Simon was a senior clerk at the Palm Beach County Health Department (PBCHD) until earlier today. For approximately the last year, St. Simon obtained patient identification information, including patient names and social security numbers, from the PBCHD’s computer system and provided that information to her accomplices. These accomplices, in turn, used the information to file fraudulent tax returns seeking the patients’ refunds. Over the last year, St. Simon stole more than 2,800 patients’ information in this way.
Mr. Ferrer commended the investigative efforts of the FBI and thanked the PBCHD for its substantial assistance in investigating this matter. This case is being prosecuted by Assistant U.S. Attorney Marc Osborne.
A complaint is only an accusation, and a defendant is presumed innocent until proven guilty beyond a reasonable doubt.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Orlando Man Arrested in Million Dollar Fraud SchemeRead the Press Release
Orlando, FL - United States Attorney Robert E. O'Neill announces the unsealing of an indictment charging Gurudeo "Buddy" Persaud (47, Orlando) with one count of mail fraud and four counts of wire fraud. If convicted, Persaud faces a maximum penalty of 20 years in federal prison on each count.
According to the indictment, Persaud formed White Elephant Trading Company, LLC in 2007. White Elephant was a private equity fund that purportedly invested in securities on the national markets. Persaud solicited investors by telling them that he would generate profits using his trading skills and that he would make all trading decisions. Persaud guaranteed investors rates of return of 6% to 18% that were payable in a short period of time. However, Persaud used a trading strategy that was based on lunar cycles and the gravitational pull between the moon and the Earth. Furthermore, Persaud did not invest all of the money that he received from investors, but instead used money from later investors to pay earlier investors and used significant portions of the money for his own personal use. Persaud defrauded investors out of approximately $1,000,000.
An indictment is merely a formal charge that a defendant has committed a violation of the federal criminal laws, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by the Federal Bureau of Investigation. It will be prosecuted by Assistant United States Attorney David Haas.
Orlando Armed Career Criminal Sentenced to 15 Years in Federal PrisonRead the Press Release
Orlando, FL - United States Chief District Judge Anne Conway sentenced Rodney U. Berry (43, Orlando) today to 15 years in federal prison for possession of a firearm by a convicted felon. Berry pleaded guilty to the charge on September 6, 2012.
According to court documents, on May 21, 2012, Berry met with a Bureau of Alcohol, Tobacco, Firearms, and Explosives Alcohol (ATF) undercover agent (UC) in the parking lot of Boardwalk Bowling Alley on East Colonial Drive in Orlando. Berry met with the UC and handed the UC a Smith & Wesson handgun in exchange for 50 Roxicodone pills. Berry was subsequently apprehended.
Berry has ten prior felony convictions. As a previously convicted felon, he is prohibited from possessing either firearms or ammunition under federal law. According to court documents, his previous convictions include assault with a dangerous weapon, grand theft of a motor vehicle, fleeing or attempting to elude a law enforcement officer, distribution of cocaine, and possession of a firearm by a convicted felon. These prior felony convictions qualified Berry as an Armed Career Criminal.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives. It was prosecuted by Assistant United States Attorney Christopher LaForgia.
It is another case prosecuted as a part of the Department of Justice's "Project Safe Neighborhoods" program - a nationwide, gun-violence reduction strategy led by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). United States Attorney Robert E. O'Neill, along with Julie Torres, Special Agent in Charge, ATF Tampa Field Division, is coordinating the Project Safe Neighborhoods effort here in the Middle District of Florida in cooperation with federal, state, and local law enforcement officials.
New Jersey Man Charged with Using Fake Credit CardRead the Press Release
PITTSBURGH, Pa. - A resident of Oaklyn, New Jersey, has been indicted by a federal grand jury in Pittsburgh on charges of access device fraud, United States Attorney David J. Hickton announced today.
The two count indictment named Raymond Hasaan Matthews, 36, as the sole defendant.
According to the indictment, Matthews used a counterfeit American Express credit card in November 2011 at Casa D'Oro Jewelers and other retailers to buy merchandise.
The law provides for a maximum total sentence of not more than 20 years in prison, a fine of $500,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Gregory C. Melucci is prosecuting this case on behalf of the government.
The United States Secret Service conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Monroe County Company, Owner Plead Guilty to Discharging Wastewater into A Tribuary of the Little Muskingum RiverRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
COLUMBUS – Robert D. Armstrong, 54, of New Matamoras, Ohio, pleaded guilty to violating the Clean Water Act by causing wastewater from oil and gas wells to flow into a tributary of the Little Muskingum River in 2010. Mr. Armstrong also pled guilty on behalf of his company, RCA Oil and Gas LLC (“RCA Oil and Gas”), which was charged with the same offense.
Carter M. Stewart, U.S. Attorney for the Southern District of Ohio, Ohio Attorney General Mike DeWine, Randall K. Ashe, Special Agent in Charge of the U.S. Environmental Protection Agency (U.S. EPA), Scott J. Nally, Director of the Ohio Environmental Protection Agency (Ohio EPA) and James Zehringer, Director of the Ohio Department of Natural Resources (ODNR) announced the guilty pleas entered yesterday before U.S. District Court Judge Michael Watson.
Mr. Armstrong is the owner and operator of RCA Oil and Gas which provides services for oil and gas wells in southeast Ohio, including the services related to the hydrofracturing or “fracking” of oil and gas wells.
During June 2010, Armstrong built a reservoir with an earthen wall to hold water he intended to use in the fracking process of a nearby well. The reservoir contained approximately 2.2 million gallons of fresh water. Armstrong added thousands of gallons of brine or wastewater from the fracking process at two other oil and gas wells to the reservoir. As a result of the addition, all of the liquid in the reservoir was classified as oil field wastewater.
On June 19, 2010, Armstrong used a backhoe to breach a wall of the reservoir, releasing the wastewater into Rockcamp Run. The reservoir contained about 800,000 gallons of wastewater at the time. Most of the water flowed into Rockcamp Run. Analysis of a sample of the wastewater from the reservoir showed significant concentrations of barium and sodium.
"As the nation increases its use of natural gas, exploration companies must ensure that the waste water resulting from the fracking process is treated and disposed of safely and legally," said Randall Ashe, Special Agent in Charge of EPA’s criminal enforcement program in Ohio. “The defendant knowingly released hundreds of thousands of gallons of contaminated wastewater into a tributary of the Little Muskingum River, damaging critical habitat for fish and wildlife. Companies and their contractors who try to skirt the law to save money undermine our efforts to protect the public and the environment and will be vigorously prosecuted.”
Stewart commended the cooperative investigation by the U.S. EPA, the Ohio EPA, the ODNR and the Bureau of Criminal Investigation’s Environmental Enforcement Unit in Ohio Attorney General DeWine’s Office. Assistant U.S. Attorney Michael Marous is representing the government in this case.Judge Watson will schedule a date for sentencing.
Mexican Man Sentenced for Transporting Undocumented WorkersRead the Press Release
BUFFALO, N.Y.- U.S. Attorney William J. Hochul, Jr. announced today that Santos Hernandez-Perez, 36, of Mexico, who was convicted of unlawfully transporting undocumented workers within the United States, was sentenced to 36 months in prison. The sentence, which was above the recommended federal guidelines, was handed down by U.S. District Court Judge Richard J. Arcara.
According to Special Assistant U.S. Attorney Fauzia K. Mattingly, on February 10, 2012, Hernandez-Perez was in a vehicle with five undocumented workers from Mexico when they were stopped by the Niagara Country Sheriff's Department for traffic violations. The defendant was driving the men from Tucson, Arizona, to Barker, New York, where two of the workers were going to work on a farm. The other men were destined for North Carolina. None of the individuals, including Hernandez-Perez, had permission to be in the United States.
The sentencing is the culmination of an investigation on the part of Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent in Charge James C. Spero.
McLaughlin Man Arraigned on Assault ChargesRead the Press Release
United States Attorney Brendan V. Johnson announced that a McLaughlin, South Dakota man has been indicted by a federal grand jury for two counts of Assault With a Dangerous Weapon and four counts of Domestic Assault by a Habitual Offender.
Benedict Iron Thunder, Jr., age 35, was indicted by a federal grand jury on January 16, 2013. He appeared before U.S. Magistrate Judge William D. Gerdes on February 7, 2013, and pled not guilty to the indictment. The maximum penalty upon conviction is 10 years of imprisonment on the Assault With a Dangerous Weapon charges and one of the Domestic Assault charges because it is alleged that substantial bodily injury resulted from that assault. The remaining three Domestic Assault charges could result in 5 years of imprisonment. All counts include a $250,000 fine and a period of supervised release of 3 years. The charges are merely accusations and Iron Thunder is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Bureau of Indian Affairs, Standing Rock Agency. Assistant U.S. Attorney Troy Morley is prosecuting the case. Iron Thunder was remanded to the custody of the U.S. Marshal. A trial date has not yet been set.
Logan Quinn Sandau Sentenced in U.S. District CourtRead the Press Release
The United States Attorney's Office announced that during a federal court session in Great Falls, on February 12, 2013, before U.S. District Judge Sam E. Haddon, LOGAN QUINN SANDAU, a 24-year-old resident of Poplar and an enrolled member of a federally recognized tribe, appeared for sentencing. SANDAU was sentenced to a term of:
Prison: 46 months
Special Assessment: $200
Supervised Release: 3 years
SANDAU was sentenced in connection with his guilty plea to assault with a dangerous weapon and assault resulting in serious bodily injury.
In an Offer of Proof filed by Assistant U.S. Attorneys Laura B. Weiss and Ryan G. Weldon, the government stated it would have proved at trial the following:
On June 9, 2012, SANDAU struck J.W.S. with his car outside a residence on the Fort Peck Indian Reservation. The victim suffered multiple leg fractures, a torn ACL and underwent orthopedic and skin grafting procedures.
The victim was with his brother the day of the offense. They arrived at their cousin's house. Words were exchanged between SANDAU and the victim, resulting in SANDAU threatening to kill the victim. The victim then began punching SANDAU. SANDAU fell, then jumped up and ran to the driver's side of his vehicle. He hopped in and accelerated around the house. The victim did not chase him. SANDAU began driving down the alley toward the victim, who was standing near the house. SANDAU first slowed down when he approached, then suddenly hit the gas and struck the victim, pinning him against the house. Several eye witnesses saw this event transpire and identified SANDAU as the driver.
The victim suffered multiple injuries, including several leg fractures, a torn ACL, cut tendons requiring surgery, and skin grafts.
Because there is no parole in the federal system, the "truth in sentencing" guidelines mandate that SANDAU will likely serve all of the time imposed by the court. In the federal system, SANDAU does have the opportunity to earn a sentence reduction for "good behavior." However, this reduction will not exceed 15% of the overall sentence.
The investigation was a cooperative effort between the Federal Bureau of Investigation, the Fort Peck Tribes Criminal Investigation Division, and the Poplar Police Department.
Leader of Professional Money Laundering Ring Pleads Guilty in TexasRead the Press Release
One of the leaders of an organization that laundered more than $20 million through “shell” business bank accounts pleaded guilty today in federal court in Houston, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney Kenneth Magidson of the Southern District of Texas.
Enrique Morales, 42, of Houston and Guadalajara, Mexico, pleaded guilty today before U.S. District Judge Lee H. Rosenthal in the Southern District of Texas to conspiracy to commit money laundering and conspiracy to operate an unlicensed money transmitting business.
In August 2012, a federal grand jury in Houston indicted Morales and four of his co-defendants for their roles in operating a money transmitting business that provided professional money laundering services to narcotics traffickers as part of a scheme commonly referred to as “the Black Market Peso Exchange.” According to the indictment, from October 2009 to September 2011, the defendants placed U.S. currency obtained through the sale of drugs in the U.S. into bank accounts held in the name of shell companies, which were owned and operated by the defendants. The money was then transferred to different accounts in the U.S. and Mexico. In exchange, pesos were transferred to bank accounts owned by the defendants’ clients.
A total of five people arrested as part of this scheme have now been convicted. Willie Whitehurst, Fulton Smith and Anthony Foster, all from Houston and money couriers for the organization, previously pleaded guilty to conspiracy to commit money laundering and conspiracy to operate an unlicensed money transmitting business. Smith, 40, pleaded guilty yesterday, while Whitehurst, 44, and Foster, 47, pleaded guilty in January 2013. An office manager for the organization, Sarah Combs, 48, of Dickinson, Texas, previously pleaded guilty to conspiracy to operate an unlicensed money transmitting business.Foster, Whitehurst and Combs are scheduled for sentencing on May 9, 2013, while the sentencings of Smith and Morales are set for May 29, 2013. For the money laundering conspiracy, Morales, Whitehurst, Foster and Smith face up to 20 years in federal prison and a $500,000 fine, or twice the value of the property involved in the offense, whichever is greater. All five defendants face up to five years in federal prison and a fine of $250,000 for conspiracy to operate an unlicensed money transmitting business.
The case was investigated by the special agents with the Drug Enforcement Administration and Internal Revenue Service – Criminal Investigation. The case is being prosecuted by Assistant U.S. Attorney Ted Imperato of the Southern District of Texas and Keith Liddle, trial attorney in the Money Laundering and Bank Integrity Unit of the Criminal Division’s Asset Forfeiture and Money Laundering Section.The Money Laundering and Bank Integrity Unit investigates and prosecutes complex, multi-district and international criminal cases involving financial institutions and individuals who violate the money laundering statutes, the Bank Secrecy Act and other related statutes. The unit’s prosecutions generally focus on three types of violators: financial institutions, including their officers, managers and employees, whose actions threaten the integrity of the individual institution or the wider financial system; professional money launderers and gatekeepers who provide their services to serious criminal organizations; and individuals and entities engaged in using the latest and most sophisticated money laundering techniques and tools.
Lackawanna County Attorney Charged with Federal Income Tax FraudRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced that today a Grand Jury in Scranton has returned an indictment charging Lackawanna County Attorney Danielle Ross Pietralczyk, age 37, of Jermyn, Pennsylvania with two counts of tax evasion and two counts of filing a false federal income tax return.
According to United States Attorney Peter J. Smith, the indictment alleges that tax returns verified by Ross under penalty of perjury failed to report any amounts of income she received from private paying clients while acting as the sole guardian ad litem for the Lackawanna County Family Court. It is alleged that the only income Ross reported for 2009 and 2010 was her County compensation reported on 1099 Forms which she received as an independent contractor hired by Lackawanna County.
The indictment charges that as the sole guardian ad litem for the Lackawanna County Family Court, Ross was provided with an annual compensation of $38,000. However, pursuant to a contract between Ross and Lackawanna County, Ross was permitted to bill private paying parties above her County compensation at a rate of $50 per hour. Ross allegedly managed and exercised complete control over her private billings and income. That income was allegedly known only to Ross and not Lackawanna County, nor was Lackawanna County required to approve Ross’s private billings.The prosecution is the result of a continuing joint investigation by the United States Internal Revenue Service (IRS), the Federal Bureau of Investigation (FBI), and the Lackawanna County District Attorney’s Office. Prosecution is assigned to Assistant United States Attorney Michelle Olshefski.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilty is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
In this particular case, the maximum penalty under the federal statute is 16 years’ imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
Kyle Man Charged with AssaultRead the Press Release
United States Attorney Brendan V. Johnson announced that a Kyle, South Dakota man was indicted by a federal grand jury for Assault with a Dangerous Weapon and Assault Resulting in Serious Bodily Injury.
William Lawrence Montileaux, age 39, was indicted on January 23, 2013 for Assault with a Dangerous Weapon and Assault Resulting in Serious Bodily Injury. He appeared before U.S. Magistrate Judge Veronica L. Duffy on February 1, 2013, and pled not guilty to the indictment. The maximum penalty upon conviction is 10 years' imprisonment and/or $250,000 fine. The charge is merely an accusation, and Montileaux is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Bureau of Indian Affairs and the Federal Bureau of Investigation. Special Assistant U.S. Attorney Laura Shattuck is prosecuting the case. Montileaux was released on bond pending trial. A trial date has been set for April 9, 2013.
Justice Department Reaches Settlement with Virginia Dental Office to Stop HIV DiscriminationRead the Press Release
The Justice Department announced today that, as part of its Barrier-Free Health Care Initiative , it has reached a settlement with Woodlawn Family Dentistry, of Alexandria, Va., under the Americans with Disabilities Act (ADA). This is the third settlement addressing HIV discrimination by a medical provider reached by the Justice Department in three weeks.
The Justice Department found that Woodlawn Family Dentistry required a patient with HIV to schedule all future appointments as the last appointment of the day. The department determined that, because the patient has HIV, Woodlawn failed to offer him the same options and availability in scheduling future appointments as it offered to other people. The department further determined that there was no lawful reason why Woodlawn could not treat the patient at any time during normal business hours.
“Ensuring that people with HIV are treated equally and with dignity is critical, especially in the medical field,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The ADA does not tolerate this type of discrimination and neither will the Justice Department.”
Under the settlement, Woodlawn must pay $7,000 to the patient and $3,000 in civil penalties. In addition, Woodlawn must train its staff on the ADA and develop and implement an anti-discrimination policy.
In the past two weeks, the department announced similar agreements with the Fayetteville Pain Center and the Castlewood Treatment Center to address HIV discrimination. All three settlements are part of the Department of Justice’s Barrier-Free Health Care Initiative, a partnership of the Civil Rights Division and U.S. Attorney’s offices across the nation, to target enforcement efforts on a critical area for individuals with disabilities. The initiative, launched on the 22nd anniversary of the ADA in July 2012, includes the participation of 40 U.S. Attorney’s offices. The division expects the initiative to address access to health care for people with HIV and those with hearing disabilities, as well as physical access to medical facilities. In 2012, the division and U.S. Attorneys offices reached two settlement agreements regarding access to medical care for people with HIV and four settlements regarding access to medical care for people with hearing disabilities. For more information on the Barrier Free Health Care Initiative visit www.ada.gov/usao-agreements.htm .
For more information on the ADA and HIV visit www.ada.gov/aids . Those interested in finding out more about these settlements or the obligations of public accommodations under the ADA may call the Justice Department’s toll-free ADA information line at 800-514-0301 or 800-514-0383 (TDD), or access its ADA website at www.ada.gov . ADA complaints may be filed by email to [email protected] .
Jordan Gerald Lee Jackson Sentenced in U.S. District CourtRead the Press Release
The United States Attorney's Office announced that during a federal court session in Great Falls, on February 11, 2013, before U.S. District Judge Sam E. Haddon, JORDAN GERALD LEE JACKSON, a 25-year-old resident of Heart Butte and an enrolled member of the Blackfeet Tribe, appeared for sentencing. JACKSON was sentenced to a term of:
Prison: 30 months
Special Assessment: $100
Supervised Release: 2 years
JACKSON was sentenced in connection with his guilty plea to assault resulting in serious bodily injury.
In an Offer of Proof filed by Assistant U.S. Attorney Laura B. Weiss, the government stated it would have proved at trial the following:
On June 18, 2011, victim "C.A." was picked up by his cousin, JACKSON, in Great Falls. JACKSON was driving a blue van. Two other individuals were also in the van and everyone was drinking alcohol. When asked about alcohol consumption, JACKSON said, "I'm not sure how much I drank, but it was a lot."
By the time they arrived in Heart Butte, it was dark. C.A. then departed from Heart Butte with JACKSON. JACKSON indicated he was "really drunk," swerved off the road but laughed it off and kept going. The vehicle went off the road again, flipped over and ultimately landed upside down with the victim still strapped in the passenger seat.
A passerby cut the victim out of the passenger side as the victim was bleeding and yelling that he couldn't feel his arm. The victim was transported via ambulance to the Blackfeet Emergency Room. The nurse noted the following about C.A.'s right arm: "very badly evulsion to point of almost amputation." He was transferred via helicopter to Great Falls then to Harborview Medical Center in Seattle, Washington. He underwent three surgical procedures, including a skin graft.
Approximately an hour after the rollover, JACKSON was taken to the emergency room in Browning where his BAC was found to be .20.
Because there is no parole in the federal system, the "truth in sentencing" guidelines mandate that JACKSON will likely serve all of the time imposed by the court. In the federal system, JACKSON does have the opportunity to earn a sentence reduction for "good behavior." However, this reduction will not exceed 15% of the overall sentence.
The investigation was a cooperative effort between the Federal Bureau of Investigation, the Montana Highway Patrol, and the Blackfeet Law Enforcement.
Jacksonville Man Convicted of Orchestrating A Scheme to Defraud, Attempting to Murder A Witness, and Murder for HireRead the Press Release
Jacksonville, Florida - A federal jury yesterday found Paul S. Kruse (59, Jacksonville) guilty of conspiracy, wire fraud, attempting to murder a government witness, and murder-for-hire. Kruse faces a maximum penalty of 20 years in prison on the conspiracy conviction, 20 years for each wire fraud conviction, 30 years for attempting to kill a government witness, and 10 years for his murder-for-hire plot. Kruse's sentencing hearing is scheduled for June 19, 2013.
Kruse was initially indicted in April 2012. A second superseding indictment was filed on November 1, 2012.
According to the evidence presented at trial, beginning in 2010, Kruse and his brother conspired to recruit and defraud a number of clients to whom they provided financial advisory services. Although Kruse and his brother had been licensed financial advisors for decades, at the time of the scheme, both were unlicensed. As part of the scheme, Kruse established a sham investment firm called "Yorkshire Financial Services." Along with his brother, they convinced their clients, a number of which were retirees, to move their individual retirement accounts ("IRAs") to Yorkshire. Kruse and his brother deceptively told clients that Yorkshire had been in business for more than 30 years, had a staff of experienced securities traders, and traded in a combination of stocks, bonds, and currencies appropriate for IRAs. In reality, Kruse did not invest the investors' funds. Rather, he spent the investors' money on luxury cars, home improvements, personal items, and made hundreds of thousands of dollars in cash withdrawals.
In early 2011, Kruse hired a personal assistant who witnessed Kruse's conduct, which included forging investor signatures, not engaging in investment activity, and lavish spending of investors' money. While Kruse was out of town, the assistant took the documents from the Yorkshire scam to the Federal Bureau of Investigation. In early 2012, Kruse approached the FBI and provided a voluntary written confession of his guilt in running an investment fraud scheme.
After Kruse's confession, his co-conspirator brother committed suicide. Kruse was subsequently held in custody on pre-trial detention. While in jail, Kruse hired hitmen to murder his former personal assistant. The assistant was scheduled to be a government witness. Kruse stated that he wanted the former assistant killed to prevent her from testifying, and to avenge his brother's death. Kruse also hired the hitmen to rob and kill two former business partners, whom Kruse contended had cheated him. Unbeknownst to Kruse, the hitmen were undercover federal agents.
This case was investigated by the FBI and the Bureau of Alcohol, Tobacco, Firearms, and Explosives. It is being prosecuted by Assistant United States Attorney Mark B. Devereaux and Trial Attorney Ryan Rohlfsen, with the U.S. Department of Justice, Criminal Division, Fraud Section in Washington, D.C.
Informational: Federal Court ArraignmentsRead the Press Release
The United States Attorney's Office announced that during a federal court session in Billings, on February 11, 2013, before U.S. Magistrate Judge Carolyn S. Ostby, the following individuals were arraigned:
BENJAMIN QUINN McCHESNEY, a 35-year-old resident of Billings, appeared on charges of kidnaping and kidnaping involving a minor. If convicted of these charges, McCHESNEY faces possible penalties of life in prison, a $250,000 fine, and 5 years supervised release on each count. McCHESNEY also appeared on charges of conspiracy to use firearms during and in relation to a drug trafficking crime, theft of firearms from a licensed dealer, theft of firearms in interstate commerce, and possession of stolen firearms. If convicted of these charges, McCHESNEY faces possible penalties of 20 years in prison, a $250,000 fine, and 3 years supervised release on the first count, and 10 years in prison for each of the remaining three counts. Special Assistant U.S. Attorney Ed Zink is the prosecutor for the United States. The investigation was a cooperative effort between the Billings Police Department, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the United States Marshals Service.
The defendant pled not guilty to the charges.
The charge, an indictment, information or complaint, is merely an accusation and all persons named as defendants are presumed innocent until proven guilty. A pre-trial conference and a trial date will be set and the United States will be required to prove the allegations set forth in the indictment beyond a reasonable doubt.
Indictment Returned in Hammond Federal CourtRead the Press Release
FOR IMMEDIATE RELEASECONTACT: Mary Hatton
www.usdoj.gov/usao/inn/ FAX (219) 852-2770
Hammond, Indiana- The United States Attorney’s Office announced that the following Indictment was returned on February 7, 2013 and unsealed today:
Tracey R. Tigner, 41, of Gary, Indiana, was charged in an Indictment with embezzlement and theft of funds from the Painters District Council 91 of the International Union of Painters and Allied Trades. These charges were filed as the result of an investigation by the United States Department of Labor Office of Inspector General as well as the Office of Labor Management Standards. This case has been assigned to and will be prosecuted by Assistant United States Attorney Randall Stewart.
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.
Hermosa Woman Charged with False Statement and False DeclarationRead the Press Release
United States Attorney Brendan V. Johnson announced that a Hermosa, South Dakota woman has been indicted by a federal grand jury for False Statement to a Federal Agency and False Declaration before a Grand Jury.
Doreen Amiotte, age 47, was indicted by a federal grand jury on January 16, 2013. She appeared before U.S. Magistrate Judge Mark A. Moreno on February 8, 2013 and pled not guilty to the indictment. The maximum penalty upon conviction is up to 5 years’ in 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 Amiotte is presumed innocent until and unless proven guilty.
The investigation is being conducted by the U.S. Marshal Service. Assistant U.S. Attorney Marie H. Ruettgers is prosecuting the case.
Amiotte was released on bond pending trial. A trial date has been set for April 2, 2013.
Gregg County Woman Sentenced for Bank FraudRead the Press Release
Department of Justice
Office of Public AffairsTYLER, Texas – A 23-year-old Longview, Texas, woman has been sentenced to federal prison for bank fraud violations in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
Amanda Henderson pleaded guilty on Nov. 6, 2012 to conspiracy to commit bank fraud and was sentenced to 33 months in federal prison today by U.S. District Judge Michael H. Schneider. Henderson must also pay restitution in the amount of $14,659.25.
According to information presented in court, beginning in May 2011, Henderson and co-defendant, Mark Alan McCullars, created counterfeit checks which appeared to be payroll checks issued by businesses in East Texas. They also created fraudulent drivers’ licenses so that they could cash the counterfeit checks at check-cashing businesses. McCullars and Henderson cashed over 100 fraudulent checks resulting in a loss of $14,659.25 to check cashing businesses in East Texas. They were indicted by a federal grand jury on May 11, 2012. McCullars was sentenced to 51 months in federal prison on Feb. 6, 2013.
This case was investigated by the United States Secret Service and prosecuted by Assistant U.S. Attorney Mary Ann Cozby.
####Grandville Man Pleads Guilty to Distribution of Child PornograpyRead the Press Release
GRAND RAPIDS, MICHIGAN – William Russell Odett, 41, of Grandville, Michigan pleaded guilty on Monday, February 11, 2013, to distributing images of child pornography via the Internet, U.S. Attorney Patrick A. Miles, Jr. announced today. Odett faces a minimum of five years and a maximum of 20 years of imprisonment, and he will be required to serve a term of supervised release after his prison term has been completed. Odett will also be required to register as a sexual offender.The case stemmed from an undercover online investigation that took place in May 2012. During that investigation, an undercover officer was able to download child pornography that Odett had made available on the Internet. Agents then executed a search warrant at Odett’s home and recovered a number of computers that contained a substantial collection of child pornography.
This case is part of Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. The U.S. Attorney's Office, county prosecutor's offices, the Internet Crimes Against Children task force (ICAC), federal, state, and local law enforcement are working closely together to locate, apprehend, and prosecute individuals who exploit children. The partners in Project Safe Childhood work to educate local communities about the dangers of online child exploitation, and to teach children how to protect themselves. For more information about Project Safe Childhood, please visit the following web site: www.projectsafechildhood.gov.
The Department of Homeland Security, Homeland Security Investigations (HSI) and the Ottawa County Sheriff's Office investigated the case. Assistant U.S. Attorney Sean M. Lewis prosecuted the case.
END
Goodwin Charges Five Men in Connection with A Major Workers’ Compensation Insurance Fraud SchemeRead the Press Release
Defendants conspire to steer millions of dollars away from Brickstreet Insurance
CHARLESTON, W.Va. – U.S. Attorney Booth Goodwin today charged a workers’ compensation insurance premium field auditor employed by BrickStreet Mutual Insurance Company (“BrickStreet”) with orchestrating a multimillion-dollar fraud on his employer, the state’s leading workers’ compensation provider. Arville W. Sargent, 52, of Chapmanville, Logan County, W.Va., was charged in a two-count information with honest services mail fraud and tax evasion as part of the scheme to defraud BrickStreet.
According to a court document filed today, from its inception in January 2006 until at least February 1, 2011, Sargent engaged in a scheme to defraud BrickStreet by allowing certain policyholders operating in the coal mining industry to drastically underreport their payroll during annual field audits he conducted on behalf of BrickStreet for the intended purpose of confirming those policyholders were paying accurate workers’ compensation insurance premiums. According to the filings today, Sargent purposely allowed four “employee leasing” companies, Aracoma Contracting, LLC (“Aracoma”), Christian Contracting, Newhall Contracting and T&W Services, LLC, all of whom provided labor on a contract basis to coal companies in southern West Virginia, to falsify documents drastically understating their actual payroll. In exchange for saving those policyholders millions of dollars in insurance premiums rightfully owed to BrickStreeet, Sargent accepted hundreds of thousands of dollars in cash bribes and other things of value, including a Yamaha Rhino all-terrain vehicle.
“Mine safety is unquestionably a priority of my office. Today’s filings underscore my commitment to approach this important issue from every angle,” U.S. Attorney Booth Goodwin said. “Employers in the coal mining industry who cheat the workers’ compensation insurance system are really only cheating the hard-working miners who risk injury to perform dangerous jobs to provide for their families.
Goodwin continued, “Failing to honestly and accurately report employment information to insurance companies like BrickStreet potentially exposes those coal miners to devastating financial misfortune if they get hurt on the job. These charges are even more disturbing because these crooked operators were able to compromise the one person entrusted to make sure the employees are properly accounted for: the insurance company’s auditor. This type of corruption has long plagued the coal industry in southern West Virginia and must be stopped.”
In addition to defrauding BrickStreet, the principals of Aracoma, Jerome Eddie Russell, 50, of Williamson, West Virginia and Frelin Workman, 58, of Belfrey, Kentucky, admitted paying a significant number of their employees in cash as part of a tax evasion scheme to avoid the associated payroll taxes. Randy Workman, 36, of Belfrey, Kentucky, similarly utilized a significant cash payroll to evade payroll taxes. Likewise, Arthur White, Jr., 60, of Lenore, West Virginia paid a portion of the payroll for T&W Services, LLC through a shell company, thereby evading taxes.
Sargent, Russell, Frelin Workman and Randy Workman each face up to 25 years in prison and a $500,000 fine.
White faces up to ten years in prison and a $500,000 fine.
The FBI and the IRS are handling the investigations. This investigation was handled in coordination with the United States Attorney’s Office for the Western District of Virginia and the IRS’s local Abingdon, Virginia Resident Agency. Assistant United States Attorney Thomas Ryan is in charge of the prosecutions.
Four Sentenced for Robbing A Traveling Jeweler in College StationRead the Press Release
HOUSTON – Four people have been sentenced to federal prison for robbing an interstate traveling jeweler of jewelry in College Station, United States Attorney Kenneth Magidson announced today.
Ivan Carvajal, 30, and Tito Vargas, 25, both of Houston, previously pleaded guilty and were sentenced by U.S. District Court Judge Lynn Hughes to 136 and 57 months, respectively. Luis Flores, 22, of Houston, and Maria Guitierrez, 32, of Atlanta, Ga., had also entered a plea of guilty and were both previously sentenced to 60 months in prison.
One remaining defendant, Brayan Vargas (no relation to Tito Vargas), 19, of Bogota, Colombia, is currently a fugitive in the case and a warrant remains outstanding for his arrest. A photograph is attached. Crime Stoppers will pay up to $5,000 for any information called in to 713-222-TIPS (8477) or submitted online at www.crime-stoppers.org that leads to the location and arrest of Brayan Vargas. Tips can also be sent by text message. Text TIP610 plus your tip to CRIMES (274637). All tipsters remain anonymous.
On Aug. 24, 2011, the defendants traveled in several cars and followed a traveling jeweler from New York he visited several jewelry stores to show his merchandise. At one point, Gutierrez even followed him into an electronics store as he shopped.
The next day, the five robbers waited for him at the location where he had left his merchandise at the end of the previous evening as he came to retrieve his items. They met with others and followed him again from Houston to College Station in at least four cars. Eventually, in College Station, they robbed him of approximately $200,000 worth of jewelry at gunpoint.
Immediately thereafter, Gutierrez and Carvajal were involved in a traffic accident, but fled. They were soon arrested for fleeing the scene of an accident. Inside the car, officers found broken glass consistent with the recent broken window from the victim’s car along with other evidence tying them to the robbery.
Brayan Vargas and Tito Vargas were later arrested at apartment complex in Houston for their role in the College Station robbery based upon evidence developed after the robbery. At the time of their arrest, agents located a large sum of U.S. currency, a diamond tester and jewelry taken during the College Station robbery. They also discovered jewelry taken during a robbery in Shreveport, La.
Luis Flores was arrested for his role in the College Station robbery while serving time in Texas Department of Corrections for an attempted theft of a jeweler that occurred on April 21, 2011. At the time of the College Station robbery, he was out on bond on that charge.
Brayan Vargas, who was initially arrested on related state charges, had been released on bond on those charges but fled. He is currently a fugitive for both the state warrant and the federal warrant for robbing a jeweler traveling in interstate commerce.
This prosecution is a result of the collaborative work of members of the FBI, police departments in College Station and Navasota, Brazos County District Attorney’s Office and the U.S. Attorney’s Office. Assistant U.S. Attorneys Kebharu H. Smith and Joe Magliolo are prosecuting the case.
Four Individuals Sentenced in Federal CourtRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Chris Zumpetta-Parr, Public Affairs SpecialistMARTINSBURG, WEST VIRGINIA — Four individuals were sentenced on February
11, 2013, in United States District Court in Martinsburg by Judge Gina M. Groh.United States Attorney William J. Ihlenfeld, II, announced that:
JAMES EDWARD ALSTON, age 45, of Martinsburg, was sentenced to 70 months imprisonment to be followed by three years of supervised release. ALSTON entered a plea of guilty on August 15, 2012, to “Possession with Intent to Distribute Crack Cocaine in Martinsburg. ALSTON was remanded to the custody of the United States Marshal pending designation to a Federal institution.
DARNELL KEITH CAREY age 34, of Kearneysville, West Virginia, was sentenced to
33 months imprisonment to be followed by 12 years of supervised release. CAREY entered a plea of guilty on October 9, 2012, to “Distribution of Crack Cocaine within 1,000 Feet of Pikeside Transitional School.” CAREY was remanded to the custody of the United States Marshal pending designation to a Federal institution.RICHARD TAYLOR, age 42, of Bunker Hill, West Virginia, was sentenced to 24 months imprisonment to be followed by three years of supervised release. TAYLOR entered a plea of guilty on October 10, 2012, to “Distribution of Crack Cocaine” in Martinsburg, West Virginia. TAYLOR was remanded to the custody of the United States Marshal pending designation to a Federal institution.
These cases were prosecuted by Assistant United States Attorney Jarod O. Douglas and former Assistant United States Attorney Thomas O. Mucklow and investigated by the Eastern Panhandle Drug & Violent Crime Task Force, consisting of officers from the West Virginia State Police - Bureau of Criminal Investigation, the Martinsburg Police Department, and the Berkeley County Sheriff’s Department.
RUSTY MARK EDWARDS, age 38, of Ridgeley, West Virginia, was sentenced to 60 months imprisonment to be followed by four years of supervised release. EDWARDS entered a plea of guilty on August 13, 2012, to “Possession with Intent to Distribute 202.7 Grams of Crack Cocaine” in Ridgeley, Mineral County, West Virginia. EDWARDS, who is free on bond, will self-report to the designated Federal institution on March 12, 2013.
This case was prosecuted by Assistant United States Attorney Jarod O. Douglas and former Assistant United States Attorney Thomas O. Mucklow and investigated by the Potomac Highlands Drug & Violent Crime Task Force (consisting of officers from the Federal Bureau of Investigation, and the West Virginia State Police - Bureau of Criminal Investigations); the Allegany County, Maryland, Task Force; the Washington County, Maryland, Task Force, and the FBI.
Former University Community Hospital Employee Pleads Guilty to Tax Fraud and Aggravated Identity TheftRead the Press Release
Tampa, Florida - United States Attorney Robert E. O'Neill announces that Tanya Cullens today pleaded guilty to one count of conspiracy to defraud the Internal Revenue Service, wire fraud, theft of government funds, and one count of aggravated identity theft. She faces a maximum penalty of 5 years in federal prison for the tax fraud conspiracy and a consecutive 2-year mandatory minimum term of imprisonment for the aggravated identity theft charge.
According to the plea agreement, in 2012, Cullens was a member of the cleaning staff at University Community Hospital. On January 17, 2012, Cullens stole a patient list from the hospital. The list contained the names, dates of birth, and social security numbers of 48 patients who had been treated at University Community Hospital.
Shortly after stealing the patient list from the hospital, Cullens provided the list to her friend and co-conspirator, who used the list to file fraudulent tax returns with the IRS. None of the individuals whose personal information appeared on the fraudulently filed tax returns knew that the conspirators were filing the returns on their behalf. In total, ten fraudulent tax returns were filed by the conspirators, totaling approximately $79,204 in bogus tax refunds. Ultimately, the IRS paid out $44,080.00 in refunds to the conspirators.
This case was investigated by the Internal Revenue Service Criminal Investigation and the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney Simon Gaugush.
Former USACE Engineer Sentenced to Federal Prison for BriberyRead the Press Release
GALVESTON, Texas - Christopher Castillo, 33, of Monte Alto, has been handed a federal prison sentence after having been convicted of one count of bribery, United States Attorney Kenneth Magidson announced today. Castillo entered a plea of guilty before U.S. Magistrate Judge John Froeschner on Aug. 22, 2012, which was later accepted by U.S. District Judge Gregg Costa.
Today, Judge Costa considered the evidence and sentenced Castillo to a term of 48 months in federal prison to be followed by three years of supervised release. Castillo was also ordered to pay a $50,000 fine. Calling bribery a serious offense, Judge Costa noted commented that Castillo was living the American Dream as an engineer with a master’s degree, but that was not enough for him. At the hearing, Castillo offered an apology for his actions.
“The actions of this individual are not in line with the Army's Core Values nor are they reflective of the service the Corps provides our nation,” said Col. Christopher Sallese, district commander of the U.S. Army Corp of Engineers (USACE) Galveston District. “As public servants, we are committed to managing taxpayers' dollars while maintaining the publics' trust and we will continue to work with the Criminal Investigation Command and Department of Justice to ensure that employees and contractors who commit fraud are held accountable.”
Castillo was a civil engineer with USACE under the direction of the Galveston office. At the time of his plea, he admitted that as part of his official duty, he supervised projects in the Southern District of Texas and the performance of government contractors. One such contractor had been involved in numerous construction jobs for the U.S. government in 2010, 2011 and 2012, including an emergency power cooling building for the U.S. Border Patrol located in Hidalgo County. As supervisor of that project, Castillo could terminate work if he believed it was unfavorable or he could unfavorably report to USACE thereby preventing the company from getting future contracts.
A USACID agent obtained information that Castillo solicited and received a new concrete driveway from the owner of that company in late 2010 while it was engaged in contract services for the U.S. government. Specifically, Castillo asked that his driveway be paved and that the owner must pay for the work. The owner was afraid to refuse because Castillo could prevent him from getting government contracts.
The owner paid another person to install the driveway, paid the expenses and supplied much of the material. The project had an estimated value of $80,000 and was completed on or about Jan. 14, 2012.
Previously released on bond, Castillo was permitted to remain on bond and voluntarily surrender to a U.S. Bureau of Prisons facility to be determined in the near future.
The case was investigated by United States Army Criminal Investigation Command's USACID and is being prosecuted by Assistant United States Attorney James McAlister.
Former Homer Housing Authority Director and Five Others Sentenced for Theft of Public MoneyRead the Press Release
430,000 in checks written for work never performed
SHREVEPORT, La: United States Attorney Stephanie A. Finley announced today that former Homer Housing Authority executive director Michelle Green, 35, of North Little Rock, Ark., and five co-defendants were sentenced before U. S. District Judge Elizabeth E. Foote for defrauding the HHA out of $430,000.
Green was sentenced to 37 months in prison, three years of supervised release, and was ordered to pay $430,000 in restitution to the U.S. Department of Housing and Urban Development (HUD).
Green pleaded guilty Oct. 29, 2012 to causing checks to be issued to friends and relatives for work allegedly performed for HHA. The defendants admitted they did no work for HHA, and that they usually cashed the checks and returned much of the proceeds to Green. More than $430,000 worth of checks were written between December 2007 until Green was fired in April 2011. Green and five co-defendants were indicted in July 2012.
Co-defendant Curtis L. Mays, 34, of Harker Heights, Tx., was sentenced to probation, five years supervised release, and was ordered to pay $26,176 in restitution.
Katrina G. Robertson, 38, of Haynesville, La., received probation, five years supervised release, and $26,176 in restitution.
Flack D. Robertson, 35, of Haynesville, La., was sentenced to probation, five years supervised release, and $50,190 in restitution.
Aaron Perry, 29, of Haynesville, La., received probation, three years supervised release, and $20,630 in restitution.
Katrina Henderson, 34, of Shreveport, received probation, three years of supervised release, and $15,380 in restitution.
“The victims in this case are the Homer Housing Authority and the citizens of Homer, Louisiana. The defendants sought to enrich themselves at the expense of the residents who could potentially qualify and are in need of low-income housing opportunities,” Finley said. “The citizens of this community lose when criminals steal from programs like this. Our office will continue to investigate and prosecute anyone who violates the public trust in this manner.”
The Housing and Urban Development-Office of Inspector General and the FBI investigated the case. Senior Litigation Counsel Joseph G. Jarzabek prosecuted the case.
Former Department of Defense Contractor Sentenced to 30 Months in Prison for Smuggling Kickback Proceeds from Afghanistan to the United StatesRead the Press Release
A former employee of a Department of Defense contracting company at Bagram Airfield, Afghanistan, was sentenced today to serve 30 months in prison for attempting to smuggle $150,000 in kickback proceeds he received for steering U.S. government subcontracts to an Afghan company, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney Barry Grissom of the District of Kansas.
Donald Gene Garst, 51, of Topeka, Kan., was sentenced by U.S. District Judge Julie A. Robinson in Topeka. In addition to his prison term, Garst was sentenced to serve one year of supervised release and was ordered to pay a fine of $52,117. The department previously forfeited the $150,000 Garst had attempted to smuggle into the United States.
Garst pleaded guilty on Nov. 9, 2012, to a one-count information charging him with bulk cash smuggling. According to court documents, Garst was employed by a private U.S. company that was contracted by the U.S. government and its armed forces at Bagram Airfield from January 2009 to May 2011. Garst was involved in identifying, evaluating and monitoring subcontracts awarded to Afghan companies by his employer, and he used his position to meet executives of an Afghan construction company called Somo Logistics. Garst then entered into an agreement with the Afghans under which he would receive kickback payments on a contract-by-contract basis in return for treating Somo Logisitcs favorably in the contracting process.
In December 2010, Garst accepted a kickback for $60,000 on the first subcontract awarded to Somo Logistics. The subcontract was for the term lease of heavy equipment meant to be used for construction on Bagram Airfield. Garst hand-carried approximately $20,000 of the kickback proceeds into the United States, and he received the remainder via a series of structured wire transfers from Somo Logistics executives.
In May 2011, Garst accepted a $150,000 kickback for a second subcontract for the lease of heavy construction equipment. Garst shipped the $150,000 in cash to the United States, and his failure to declare the value of the shipment was discovered by law enforcement.
Garst had further agreed to receive $400,000 on a third subcontract, but his scheme was discovered by law enforcement before he could receive that payment.
This case is being prosecuted by Assistant U.S. Attorney Jared Maag and Trial Attorney Wade Weems of the Criminal Division’s Fraud Section. The case was investigated by Special Agents with the Army Criminal Investigations Division and the Defense Criminal Investigative Service, with assistance from the Special Inspector General for Afghanistan Reconstruction and the FBI.
Former Cortez Resident Indicted for Wire Fraud and Income Tax EvasionRead the Press Release
DENVER – Brian K. Shoults, age 42, of Mesa, Arizona, was indicted last week by a federal grand jury in Durango, Colorado, for wire fraud and income tax evasion, the United States Attorney’s Office and IRS – Criminal Investigation announced. Shoults was arrested on February 8, 2013, and on that date appeared before a U.S. Magistrate Judge in Durango. He was released on a $50,000 unsecured bond. He is expected to be back in court on April 19, 2013 for arraignment, which will also take place in Durango.
According to the indictment, from April 8, 2008, through August 25, 2011, Shoults executed a scheme to defraud the Copy Shop Inc. (doing business as Office Outpost), located in Cortez, Colorado, in an effort to embezzle more than $250,000 from that company.
Shoults, a bookkeeper for Office Outpost, would allegedly electronically wire money from the Office Outpost accounts for his own personal use without the knowledge of any other employees or owners of the Office Outpost. He electronically logged into Office Out Post's accounts at Community Banks of Colorado, located in Cortez, Colorado, to transfer money from the Office Outpost's accounts into two of his personal bank accounts over which he had signatory authority.
As bookkeeper, Shoults oversaw Office Outpost's payroll, including the calculation and payment of payroll checks to Office Outpost's employees. He had authority to access Office Outpost accounts and draw on those funds in order to pay payroll expenses as well as other business expenses incurred by Office Outpost. He also had sole responsibility for reconciling the Office Outpost's bank statements with its internal books and records. This allowed Shoults to write checks from the Office Outpost's accounts without supervision from or the knowledge of other employees or owners of Office Outpost.
Shoults allegedly committed tax evasion for years 2008, 2009, 2010, and 2011 by willfully failing to report all income he actually received from Office Outpost. For each corresponding year, he was required to report all income on his U.S. Individual Income Tax Form 1040 which was required to be filed the following year by April 15. Using his position at Office Outpost, he manipulated his W-2 form to show less income then he actually received from Office Outpost. Such additional taxable income substantially increases the amount of tax due and owing to the United States of America.
“The old adage ‘Trust but Verify’ is particularly important for business’ books and financial records,” said U.S. Attorney John Walsh. “All too often, leaving one person in charge of bookkeeping opens the door to massive theft,” as in this case.”
“This is a reminder that all taxpayers should file complete and accurate tax returns; all income regardless of the source is taxable,” said Steven Boyd, Special Agent in Charge, IRS Criminal Investigation, Denver Field Office. “It’s important for business to have good internal controls which includes segregation of duties to help reduce fraud and errors.”
“This case like most embezzlement cases is a prime example of how only having one employee overseeing the businesses’ banking accounts can end up in a big loss for the business,” said Cortez Police Department Detective Lieutenant Jim Kingery said. “The thefts start out small but once they’ve tested the waters and gotten away with it they generally go for more. Thankfully with the Cortez Police Department and the IRS – Criminal Investigations working together there can be a positive outcome. When you have specific crimes like this it is good to be able to work with an agency that does this on an everyday basis.”
Shoults was charged with one hundred and twenty-three counts of wire fraud and four counts of attempting to evade or defeat tax (income tax evasion). If convicted of wire fraud he faces not more than 20 years in federal prison, and a fine of up to $250,000 per count. If convicted of tax evasion he faces not more than 5 years in federal prison, and a fine of up to $250,000 per count.
This case was investigated by IRS-Criminal Investigation and the Cortez Police Department. The case is being prosecuted by Assistant U.S. Attorney James Candelaria.
The charges contained in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty.
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Former Central Falls Mayor, Business Associate Sentenced on Federal Corruption ChargesRead the Press Release
PROVIDENCE, R.I. – Former Central Falls, R.I., Mayor Charles D. Moreau, 49, of Lincoln, R.I, and longtime friend, business associate and political supporter Michael G. Bouthillette, 49, of Lincoln, R.I., were sentenced in U.S. District Court in Providence today for participating in a corruption scheme in which the former mayor accepted goods and services from Mr. Bouthillette as a reward for having directed and provided board-up work on more than 160 properties in Central Falls between 2007 and 2009, announced United States Attorney Peter F. Neronha, Rhode Island Attorney General Peter F. Kilmartin and Colonel Steven G. O’DonnellSuperintendent of the Rhode Island State Police.U.S. District Court Judge John J. McConnell sentenced Moreau to 24 months in federal prison, to be followed by 3 years of supervised release, 300 hours of community service, and a fine of $25,000.
Bouthillette was sentenced to 3 years of probation, including 2,000 hours of community service to the residents of Central Falls – the equivalent of one year of fulltime employment without pay - and a fine of $5,000. The court also ordered Bouthillette to provide the Rhode Island Foundation with a payment of $160,000 to establish an endowment of charitable funds for the residents of Central Falls for public safety, housing and education programs. In addition, Bouthillette is prohibited from collecting more than $275,000 in liens placed on properties for board-up work he performed for which he yet to be paid. The court ordered that any remaining funds to be collected by Bouthillette are to be provided to the City of Central Falls.
On November 19, 2012, Moreau admitted to the court that beginning in September 2007, he ordered that all vacated homes in Central Falls be boarded up by his longtime friend and political supporter, Michael Bouthillette. Bouthillette admitted to the court that as a reward, on three occasions, he corruptly provided Moreau with things of value. Moreau and Bouthillette each pled guilty to one count of Federal Program Fraud.
An investigation conducted by the United States Attorney’s Office, the Rhode Island Department of the Attorney General and the Rhode Island State Police revealed that beginning in September 2007, Moreau circumvented the State requirement that such work go out for competitive bidding by declaring that each vacant home presented as an “emergency” necessitating an immediate board-up. From approximately September 2007 to July 2009, Bouthillette boarded up at least 167 homes.
The investigation revealed that Bouthillette submitted an invoice to the City of Central Falls for a board-up, at which time a lien was placed on the subject property for the amount of the invoice. As foreclosed properties were sold and the liens discharged, Central Falls would pay Bouthillette. The scheme allowed Bouthillette to make unreasonable profits amounting to hundreds of thousands of dollars.
Bouthillette admitted to the court that as reward to the former mayor for providing him with the board-up work, on three occasions he gave Moreau things of value. Bouthillette admitted that in March 2009, he assisted Moreau in obtaining a furnace for Moreau’s Central Falls residence for which Bouthillette admitted that he contributed at least a portion of the purchase price; Bouthillette admitted that, from March to November of 2009, he provided numerous renovations and repairs to a Lincoln residence owned by Moreau which Moreau never paid for; and Bouthillette admitted to the court that in April 2010, he provided flood remediation work at Moreau’s Lincoln home which Moreau never paid for. Moreau admitted to the court that he accepted each of these gratuities from Bouthillette.
The cases were prosecuted in federal court by Assistant U.S. Attorney Terrence P. Donnelly and Rhode Island Assistant Attorney General J. Patrick Youngs.
Contact: 401-709-5357
[email protected]Florida Man Pleads Guilty to Federal Election ViolationRead the Press Release
A Florida resident pleaded guilty today to causing a presidential campaign committee to make a false statement to the Federal Election Commission (FEC), announced Assistant Attorney General Lanny A. Breuer of the Justice Department?s Criminal Division and Robert O. Davis, Acting U.S. Attorney for the Northern District of Florida. Jay Odom, 56, of Destin, Fla., pleaded guilty before Senior U.S. District Judge Lacey A. Collier in the Northern District of Florida to one count of causing another to make false statements to the FEC. According to court documents, in approximately December 2007, Odom directly and indirectly solicited employees of his business entities and their family members to each make the maximum allowable contributions to the authorized campaign committee of a presidential candidate. The employees were encouraged to make these donations with the understanding that Odom would advance funds to or reimburse these individuals for their contributions. Odom admitted to both knowing that this activity was illegal and intending to conceal the true source and amount of the campaign contributions. In 2007, Odom directly or indirectly used personal funds to reimburse individual contributions to the authorized campaign committee of the presidential candidate for a total of $23,000. As a result of this scheme, Odom intentionally caused the presidential candidate?s authorized campaign committee to file a report with the FEC that falsely stated that 10 individual donors had made federal campaign contributions when in fact each contribution was made by Odom. At sentencing, scheduled for April 23, 2013, Odom faces a maximum potential penalty of five years in prison. This case was investigated by the FBI. This case is being prosecuted by Assistant U.S. Attorney Randall J. Hensel and Trial Attorney Brian K. Kidd of the Criminal Division?s Public Integrity Section.Five Convicted in Relation to $20+ Million ‘Black Market Peso Exchange’ SchemeRead the Press Release
HOUSTON – One of the leaders of an organization that laundered more than $20 million through “shell” business bank accounts has just entered a guilty plea in federal court in Houston, United States Attorney Kenneth Magidson announced today along with Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division. With the plea of Enrique Morales, 42, of Houston and Guadalajara, Mexico, five people taken into custody in relation to the scheme have now been convicted.
Morales pleaded guilty to conspiracy to commit money laundering and conspiracy to operate an unlicensed money transmitting business before U.S. District Judge Lee H. Rosenthal this morning.
Willie Whitehurst, Fulton Smith and Anthony Foster, all from Houston and money couriers for the organization, also pleaded guilty to the same two charges. Smith, 40, entered a plea yesterday while Whitehurst, 44, and Foster, 47, pleaded guilty last month. An office manager for the organization - Sarah Combs, 48, of Dickinson - previously pleaded guilty to conspiracy to operate an unlicensed money transmitting business.
In August 2012, a federal grand jury in Houston indicted the five defendants for their parts in a large “Black Market Peso Exchange” scheme. From October 2009 to September 2011, the defendants placed U.S. currency gained through the sale of drugs in U.S. cities into bank accounts held in the name of the organization’s “shell” companies. The money was then transferred to different accounts in the U.S. and in Mexico. In exchange, pesos were transferred back to accounts owned by the organization’s clients.
Foster, Whitehurst and Combs are scheduled for sentencing on May 9, 2013, while Smith and Morales are set for May 29, 2013. For the money laundering conspiracy, Morales, Whitehurst, Foster and Smith face up to 20 years in federal prison and a $500,000 fine, or twice the value of the property involved in the offense, whichever is greater. All five face up to five years in federal prison and a fine of $250,000 for conspiracy to operate an unlicensed money transmitting business.
The case was investigated by the Drug Enforcement Administration and Internal Revenue Service – Criminal Investigation. Assistant United States Attorney Ted Imperato of the Southern District of Texas and Trial Attorney Keith Liddle of the Justice Department’s Money Laundering and Bank Integrity Unit are prosecuting the case.
Erie Man Facing Multiple ChargesRead the Press Release
ERIE, Pa. - A former resident of Erie, Pennsylvania, has been indicted by a federal grand jury in Erie on charges of violating federal laws relating to the sexual exploitation of children, United States Attorney David J. Hickton announced today.
The three-count indictment named Douglas E. Melter, 32, as the sole defendant.
According to the indictment presented to the court, Melter attempted to induce a minor to engage in illegal sexual activity, possessed computer images depicting minors engaging in sexually explicit conduct and possessed a firearm while he was a convicted felon.
The law provides for a maximum total sentence of life in prison, a fine of$750,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Christian A. Trabold is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation, the Pennsylvania State Police and the Erie Police Department conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Launched in February 2006, Project Safe Childhood is a nationwide initiative designed to protect children from online exploitation and abuse. Led by the U.S. Attorneys' Offices, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Drug-Using Gun Thief Pleads Guilty to Violating Federal Firearms LawsRead the Press Release
JOHNSTOWN, Pa. - A resident of Irvona, Pa., pleaded guilty in federal court to charges of violating federal firearms laws, United States Attorney David J. Hickton announced today.
"We in the U.S. Department of Justice are working to ensure that every appropriate resource is focused on preventing gun violence and keeping firearms out of the hands of prohibited persons. One of the ways illegal guns get into the hands of criminals is when illegal drug users trade guns that have been bought or stolen for controlled substances," said U.S. Attorney Hickton. "In this case, the defendant was a prescription drug abuser who stole 72 firearms from his employer, a federally- licensed firearms dealer, and either sold them for cash to purchase drugs or traded them to acquire drugs. Fortunately, the vast majority of the firearms have been recovered."
"ATF's priority is protecting our neighborhoods from violent crime. Public safety is threatened when firearms are diverted from lawful commerce to the criminal element," said Acting Special Agent in Charge Donald Robinson of the ATF Philadelphia Field Division. "Individuals who traffic in firearms or criminally possess firearms will be targeted and arrested by ATF in our continued efforts to prevent and reduce firearms related violence in our communities."
Justin D. McElheny, 35, pleaded guilty to two counts before United States District Judge Kim R. Gibson.
In connection with the guilty plea, the court was advised that from Dec. 2007 to Oct. 15, 2011, McElheny stole 72 firearms, including revolvers, pistols and rifles of various calibers, from East Coast Gun Sales. In addition, during the same time McElheny was in possession of the stolen firearms, he was an unlawful user of Percocet, Oxycontin, Roxicet and Vicodin.
Judge Gibson scheduled sentencing for June 27, 2013 at 9:30 a.m. The law provides for a total sentence of 20 years in prison, a fine of $500,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offenses and the criminal history, if any, of the defendant.
Pending sentencing, the Judge released the defendant on $25,000 unsecured bond. Assistant United States Attorney John J. Valkovci, Jr., is prosecuting this case on behalf of the government.
The Bureau of Alcohol, Tobacco, Firearms and Explosives, the Pennsylvania State Police and the Allegheny Township Police Department conducted the investigation that led to the prosecution of McElheny.
According to Mr. Hickton, McElheny is being prosecuted as part of Project Safe Neighborhoods, a collaborative effort by federal, state, and local law enforcement agencies, prosecutors, and communities to prevent, deter, and prosecute gun crime.