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Tuesday 5 February 2013
Freeburg Man Sentenced for Enticement of A Minor and Child Pornography ChargesRead the Press Release
A Freeburg man, Clayton R. Collins, 35, plead guilty and was sentenced in federal district court to 25 years in prison on February 4, 2013, on a five-count indictment charging him with Enticement of a Minor to Engage in Sexual Activity, Transportation of Child Pornography, Receipt of Child Pornography, Possession of Child Pornography, and Receipt of Obscene Matter, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today. Following his prison sentence, Collins will be on federal supervised release for the remainder of his life and will also be required to register as a sex offender. Collins has been in custody since his arrest on June 15, 2012.
A factual stipulation filed with the Court revealed that in September, 2011, Collins began communicating with a 13-year-old female through an Internet social networking website. Collins used this website and subsequent text messages to induce the 13-year-old female to engage in sexual intercourse. Collins had sexual intercourse with the minor on four separate occasions between September 28, 2011 and October 16, 2011. During a forensic examination of Collins’ computer, numerous images containing child pornography were recovered. These images included 101 images of another identified 13-year-old female engaged in sexually explicit conduct whom Collins had also met through a social networking website. These images had been transported and received through Collins’ cellular phone and computer. Additional files recovered from Collins’ computer included numerous video and image files containing depictions of bestiality.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab “resources.”
This investigation was conducted by the United States Secret Service Southern Illinois Cyber-Crime Unit and the Illinois State Police. The case was prosecuted by Assistant United States Attorney Ali Summers.
Frank Xavier Manyen and Julie Ann Rozell Plead Guilty in U.S. Federal CourtRead the Press Release
The United States Attorney's Office announced that during a federal court session in Billings, on February 5, 2013, before Chief U.S. District Judge Richard F. Cebull, FRANK XAVIER MANYEN, a 32-year-old resident of Laurel, and JULIE ANN ROZELL, a 38-year-old resident of Billings, pled guilty to conspiracy to possess with intent to distribute and distribution of methamphetamine. Sentencing has been set for May 8, 2013. They are currently detained.
In an Offer of Proof filed by Assistant U.S. Attorney Jessica T. Fehr, the government stated it would have proved at trial the following:
In October of 2010, the FBI Safe Streets Task Force (BSSSTF) received information about a large scale methamphetamine distribution organization operating in Yellowstone County.
In the spring of 2011, law enforcement began performing electronic surveillance on C.M., an individual living in Billings. Investigators discovered that C.M., D.M. and A.H. began supplying the larger methamphetamine organization in late 2010 with methamphetamine after the prior source of supply had a run in with law enforcement. C.M., D.M. and A.H., had several distributors that sold the methamphetamine for the organization. One of the distributors was ROZELL. ROZELL admitted to distributing approximately four pounds of methamphetamine for the organization. One of her distributors was MANYEN.
During the investigation law enforcement learned that MANYEN was a distributor of methamphetamine for ROZELL from approximately March 2011, and continuing thereafter until late January 2012. MANYEN worked with another individual to distribute the methamphetamine obtained from ROZELL - an individual named H.M. MANYEN and H.M. together distributed the methamphetamine they obtained from ROZELL in the greater Billings area. MANYEN and H.M. obtained approximately 700 grams of methamphetamine from ROZELL, which they in turn distributed to their own customers.
MANYEN faces possible penalties of a mandatory minimum of 5 years and could be sentenced to 40 years, a $5,000,000 fine, and 5 years supervised release.
ROZELL faces possible penalties of a mandatory minimum of 10 years and could be sentenced to life, a $10,000,000 fine, and 5 years supervised release.
The investigation was conducted by the Billings Big Sky Safe Streets Task Force and High Intensity Drug Trafficking Area (HIDTA) Task Force.
Fourteen Defendants Charged in Separate Stolen Identity Refund SchemesRead the Press Release
Identity Theft Tax Fraud Strike Force Continues to Charge More Cases
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Richard Weber, Chief, IRS-Criminal Investigation Division (IRS-CI), and Jose A. Gonzalez, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), Miami Office, Paula Reid, Special Agent in Charge, U.S. Secret Service, Michael B. Steinbach, Acting Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, Antonio J. Gomez, Acting Inspector in Charge, U.S. Postal Inspection Service, Miami Division, Guy Fallen, Special Agent in Charge, Social Security Administration, Office of Inspector General (SSA-OIG), Kelly R. Jackson, Special Agent in Charge, IRS-CI, St. Paul Field Office, Steven Steinberg, Chief, Aventura Police Department, Larry Gomer, Chief, North Miami Beach Police Department, and J.D. Patterson, Director, Miami-Dade Police Department, announced the filing of federal charges against 14 defendants in six separate cases, in which thousands of stolen identities were used to submit millions of dollars in fraudulent tax refund claims. The cases announced today reaffirm the joint federal and local commitment, first announced in October 2012, to crack down on stolen identity refund fraud (SIRF) and its perpetrators.
According to the Federal Trade Commission, Florida had the highest rate of identity theft in the United States in 2011. Florida’s rate of 178 complaints per 100,000 residents – the highest in the United States – is dwarfed by the Miami rate of 324.1 complaints per 100,000 residents. Moreover, a September 2012 report by the U.S. Treasury Inspector General for Tax Administration (TIGTA) determined that Florida has the highest rate of stolen identity refund fraud in the United States. The City of Miami’s per capita number of false returns based on identity theft was 46 times the national average, and its per capita SIRF fraud dollar value was more than 70 times the national average.
On October 10, 2012, to combat the rising tide of SIRF scams, the U.S. Attorney’s Office, along with its federal and local law enforcement partners, established the South Florida Identity Theft Tax Fraud Strike Force (Strike Force). The members of the Strike Force include IRS-CI, U.S. Secret Service, FBI, U.S. Postal Inspection Service, City of Aventura Police Department, Miami-Dade Police Department, North Miami Beach Police Department, and the SSA-OIG.
U.S. Attorney Wifredo A. Ferrer stated, “Identity theft tax refund fraud has spread through South Florida like a virus. Since the creation of the Strike Force, the U.S. Attorney’s Office has charged 113 defendants responsible for approximately $92 million in stolen identity refund fraud. We will continue to crack down on identity thieves who are lining their pockets with our tax dollars by stealing the personal identification information of others.”
“Identity theft is a serious crime that victimizes honest taxpayers and causes immense hardship,” said Richard Weber, Chief, IRS Criminal Investigation. “Today’s actions should serve as a warning that we will continue to work with our law enforcement partners and the U.S. Attorney’s office to hold accountable those individuals who undermine our income tax system by filing false claims for refunds.”
Secret Service Special Agent in Charge Paula Reid stated, “The U.S. Secret Service will continue to work with the U.S. Attorney’s Office, Internal Revenue Service, and our law enforcement partners in the south Florida region to combat this crime that is impacting the lives of so many innocent people. Together, we will strive to identify offenders; but, most importantly, safeguard our communities against this harsh violation that is compromising the financial status of so many hardworking, honest efforts.”
“Using stolen identities to fraudulently claim income tax refunds is a growing epidemic in Florida. In the City of Miami alone, the per capita number of false returns from identity theft was 46 times the national average,” said Michael B. Steinbach, Acting Special Agent in Charge of FBI Miami. “The FBI is actively targeting these fraudsters who seek illicit gains by victimizing hard-working taxpayers.”
Antonio J. Gomez, Acting Inspector in Charge for U.S. Postal Inspection Service stated, “The U.S. Postal Inspection Service is going to continue to collaborate with the U.S. Attorney’s Office and our law enforcement partners at every level to protect the American taxpayer from this type of predatory crime and to ensure that the U.S. Postal Service is not used as a conduit for this type of criminal activity.”
Director J.D. Patterson from the Miami-Dade Police Department stated, “The continued partnership between local, state, and federal law enforcement agencies proves to be an effective measure against wide-spread crime epidemics such as; Identity theft tax refund fraud.”
The cases announced today include:
1. United States v. Nael Dawud Sammour, Case No. 13-60024-CR- Dimitrouleas
Defendant Nael Dawud Sammour was indicted on eight counts of theft of public money, in violation of 18 U.S.C. 641, and two counts of aggravated identity theft, in violation of 18 U.S.C. 1028A, for his role in attempting to negotiate 75 fraudulently obtained U.S. Treasury tax refund checks totaling $750,369.45. According to the charges, unknown individuals used stolen identification information, including the names, dates of birth, and social security numbers of unsuspecting taxpayers, to fraudulently apply for and receive tax refunds to which they were not entitled. Thereafter, defendant Sammour obtained many of these fraudulently obtained U.S. Treasury tax refund checks and transferred these checks, along with counterfeit driver’s licenses and Social Security cards, to undercover IRS agents posing as check cashers. When the defendant was arrested, law enforcement located and seized $30,128.24. This case is being prosecuted by Assistant U.S. Attorney Marc Anton.
2. United States v. Shalamar Major and Tanisha Wright, Case No. 13-60018-CR-Rosenbaum
Defendant Shalamar Major was indicted on one count of conspiracy to file false claims, in violation of 18 U.S.C. 286, and one count of unlawful disclosure of HIPAA-protected medical information, in violation of 42 U.S.C. 1320d-6(a)(3) and (b)(3). Co-defendant Tanisha Wright was indicted on one count of access device fraud, in violation of 18 U.S.C. 1029, one count of theft of mail, in violation of 18 U.S.C. 1708, one count of conspiracy to file false claims, in violation of 18 U.S.C. 286, three counts of identity theft, in violation of 18 U.S.C. 1028, three counts of theft of public money, in violation of 18 U.S.C. 641, and three counts of aggravated identity theft, in violation of 18 U.S.C. 1028A.
According to the indictment, defendant Major was a scheduler at the Boca Raton Regional Hospital in Boca Raton, Florida. As a scheduler, Major had access to the personal identification information of Boca Raton Regional Hospital patients, including their names, dates of birth, and social security numbers. In exchange for the promise of future payments, Major provided Wright with stolen personal identifying information of numerous Boca Raton Regional Hospital patients. After receiving the stolen identification information, Wright used the information to electronically file federal income tax returns in the victims’ names and to claim tax refunds to which she was not entitled. Wright directed the IRS to direct-deposit the refunds onto pre-paid reloadable debit cards that were already in her possession. Thereafter, Wright would use the debit cards to make withdrawals at local ATMs or would use the debit cards to make purchases at various local businesses. Once Wright cashed out the fraudulently obtained refund debit cards, she split the proceeds with Major. In total, 57 returns were identified as having been fraudulently filed, seeking $306,720 in federal tax refunds.
3. United States v. Christopher and Jeffrey Rosier, Case No. 13-60020-CR-Scola
Defendant Christopher Rosier was indicted on four counts of identity theft, in violation of 18 U.S.C. 1028, one count of access device fraud, in violation of 18 U.S.C. 1029, one count of aggravated identity theft, in violation of 18 U.S.C. 1028A, and one count of conspiracy to file false claims, in violation of 18 U.S.C. 286. Codefendant Jeffrey Rosier was indicted on one count of conspiracy to file false claims, in violation of 18 U.S.C. 286.
According to the indictment, defendant Christopher Rosier obtained personal identification information of numerous individuals, including their names, dates of birth, and Social Security numbers, and used this information to electronically file federal income tax returns in the victims’ names, seeking tax refunds to which he was not entitled. Defendant Christopher Rosier directed the IRS to direct-deposit the tax refunds onto pre-paid reloadable debit cards that were either already in his possession or were mailed to various local addresses that he controlled. Once the debit cards were received, defendant Jeffrey Rosier would cash the debit cards by making withdrawals at local ATMs and would split the proceeds with defendant Christopher Rosier. In total, defendant’s Rosier attempted $53,976 in fraudulent tax refunds, yet was only successfully in obtaining $36,732 in unlawful tax dollars. Additionally, law enforcement seized $8,660.00 in U.S. currency, as well as a laptop computer and a 2007 Infiniti G35 from the defendants.
4. United States v. Jahed Movlayazdanpahi, Case No. 13-20057-CR-Cooke
Defendant Jahed Movlayazdanpahi, 29, of Miramar, was charged in a three count indictment for his participation in an identity theft tax refund scheme. According to the indictment, the defendant received stolen tax refunds to which he was not entitled. The indictment charges the defendant with theft of public money and property. The case is being prosecuted by Assistant U.S. Attorney John R. Byrne.
5. United States v. Fednol Pierre and Jeanson Pata, Case No. 13-60005-CR-Cohn
Two defendants were charged in 13 count indictment for their participation in an identity theft tax refund scheme. Charged in the indictment were Fednol Pierre, 34, of Miami, and Jeanson Pata, 31, of West Palm Beach. The indictment charges Pierre with theft of government money and aggravated identity theft. It also charges Pata with theft of government money or property and false statement to a federal agency. According to the indictment, Pierre used stolen personal identification information to steal six tax refund payments, totaling $52,535.87. The indictment further alleges that Pata participated in the theft of two of these payments, totaling $14,078, and made a false statement to the United States Secret Service during the investigation. The case is being prosecuted by Assistant U.S. Attorney Benjamin Coats.
6. United States v. Douglas Michael Young, et al., Case No. 12-CR-20767-CR-Dimitrouleas
Last week, five defendants pled guilty in U.S. v. Douglas Michael Young, et al., Case. No. 12-CR-20767, for their involvement in a tax fraud conspiracy. On January 29, 2013, defendants Jeffrey Andre Young, Jr., 31, of Miami, and Joseph Bshara, 27, of Miami Shores, each pled guilty to one count of theft of government property and one count of aggravated identity theft. On that same date, Siham Benabdallah, 23, of Miami Shores, pled guilty to one count of theft of government property. Jeffrey Andre Young, Jr., Joseph Bshara, and Siham Benabdallah were involved in cashing tax refund checks from one of two tax preparation companies, either Young Professional Services, Inc., or Supreme Tax, both owned and operated by co-defendants Douglas Michael Young and Nicole Young. In total, these defendants chased checks totaling $37,749.44.
On February 1, 2013, Douglas Michael Young, a/k/a “Douglas Pierre,”41, Nicole Young, a/k/a “Nicole Pierre,” a/k/a “Nicole Pierre Smith,” 42, both of Miramar, each pled guilty to one count of conspiracy to steal government property, one count of theft of government property, and one count of aggravated identity theft. Defendant Douglas Michael Young and his wife, Nicole Young, owned and operated two tax preparation companies, Supreme Tax and Young Professional Services, Inc. The Youngs would obtain identification information from unknowing victims and use their identification information to file fraudulent tax refund claims. The Youngs charged the unknowing victims a “fee” for their purported tax preparation service, which would be deducted from their refund check. The Youngs would deposit the “fees” into bank accounts they controlled. The remainder of the refunds would be converted into personal checks that would be deposited into bank accounts controlled by co-defendants Ernest V. Charles, Joseph Bshara, and Siham Benabdallah. The case is being prosecuted by Assistant U.S. Attorney Kurt Lunkenheimer.
An indictment is only an accusation and a defendant is presumed innocent unless and until proven guilty.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Former Title Agent and Broker Convicted in Miami<br /> for Role in Reverse Mortgage SchemeRead the Press Release
A Miami title agent and former mortgage broker was found guilty late yesterday, Feb. 4, 2013, for her role in a “reverse mortgage” fraud scheme in connection with a loan worth more than $400,000, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida.
After a six-day jury trial before the Honorable Richard W. Goldberg, sitting by designation in the Southern District of Florida, a federal jury convicted Yesenia Pouparina (aka Yesenia Campos), 40, of four counts of wire fraud and one count of mail fraud for her role in securing a fraudulent Home Equity Conversion Mortgage (HECM), commonly referred to as a reverse mortgage loan, and making false representations related to the occupancy of the property and its subsequent “short sale.” A HECM is a federally insured loan that enables older Americans to withdraw equity from a home so they can remain independent and financially secure. The jury also found that three bank accounts controlled by the defendant, which were seized by the government during the course of the investigation, should be forfeited.
According to court documents and evidence presented at trial, Pouparina, a licensed title agent in the state of Florida, devised a scheme to obtain a reverse mortgage loan on her own property in the name of her mother, an individual who failed to meet the requirements of the HECM program. Pouparina submitted to a lending institution a false loan application and doctored records in support of that application, misrepresenting her mother’s eligibility to participate in the HECM program. Pouparina acted as the title agent for the loan and disbursed the loan proceeds directly to her own personal bank accounts. Pouparina also enriched herself by collecting fees generated by the loan, and also profited by using the loan proceeds in connection with her business as a “hard money lender” in other mortgage deals.
Judge Goldberg ordered Pouparina to surrender to the U.S. Marshals on Feb. 20, 2013. At sentencing, currently scheduled for May 9, 2013, Pouparina faces a maximum potential penalty per count of 20 years in prison and a $250,000 fine, or twice the net gain or loss from the offense.
This case was investigated by the Office of Inspector General, U.S. Department of Housing and Urban Development. Trial Attorneys Sandra L. Moser and Mary Ann McCarthy of the Justice Department Criminal Division’s Fraud Section prosecuted the case, with assistance from the U.S. Attorney’s Office for the Southern District of Florida.
This conviction is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF), which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants, including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
Former Payette Man Sentenced to 37 Years for Conspiracy, Arson and TheftRead the Press Release
Defendants Used Molotov Cocktails to Destroy Government Vehicles and
Building in Payette, IdahoBOISE – Donovan James Bolen, 23, of Fruitland, Idaho, was sentenced today in United States District Court in Boise to 444 months in prison for carrying and using explosive devises during and in relation to a federal crime of violence; conspiracy to maliciously use explosive materials; conspiracy to maliciously damage federal property; and theft of firearms, U.S. Attorney Wendy J. Olson announced. Chief U.S. District Judge B. Lynn Winmill also ordered Bolen to serve five years of supervised release and pay $162,124.87 in restitution to the victims, Western Core Door, Inc. and the U.S. Department of Agriculture.
A federal jury convicted Bolen on October 16, 2012. During the five day trial, the jury heard evidence that on May 27, 2011, Bolen and co-defendant David Joseph Vonbargen schemed to set fires in Payette, Idaho, to divert law enforcement while they broke into the World’s Largest Pawn Shop and stole firearms. The jury found Bolen guilty of using Molotov cocktails to set fire to two U.S. Department of Agriculture vehicles and a lumber warehouse belonging to Western Core Door, Inc., in Payette, and then burglarized and stole 12 firearms, including rifles, revolvers, and pistols, from the World’s Largest Pawnshop in Fruitland. The fire at Western Core Door, Inc., took firefighters approximately 16 hours to get under control. The firefighters were able to contain the fire and prevent it from destroying nearby residences, whose siding melted from the heat of the fire.
Judge Winmill found that Bolen attempted to obstruct justice after his arrest, by attempting to get a witness to lie to the police about his involvement, and by convincing his girlfriend to destroy evidence of his involvement. Bolen has previously been convicted of 14 crimes, with his first arrest at age six and first criminal conviction at age ten.
Vonbargen, 50, of Fruitland, is scheduled for a competency hearing before Judge Winmill on March 25, 2013, at the federal courthouse in Boise. No trial date has been set.
“Mr. Bolen’s conduct merited a lengthy sentence,” said Olson. “His use of Molotov cocktails to divert the attention of law enforcement was unconscionable, endangered the lives of first responders, and destroyed the property of innocent victims. Such conduct will not be tolerated. I applaud the cooperative efforts of state, local and federal law enforcement agencies in this case.”
The case was investigated by the Fruitland Police Department, the Payette Police Department, the Payette County Sheriff's Office, the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and the Idaho State Fire Marshal.
Former Middlefield Resident Sentenced to 20 Years in Federal Prison for Possessing Child PornographyRead the Press Release
February 5, 2013David B. Fein, United States Attorney for the District of Connecticut, announced that RICHARD C. POUPART, 53, formerly of Middlefield, Conn., and Newport, Maine, was sentenced today by United States District Judge Janet Bond Arterton in New Haven to 240 months of imprisonment, followed by a lifetime term of supervised release, for possessing child pornography. The penalties in this matter were enhanced based on POUPART’s previous conviction for sexual assault of a minor.
“This defendant has a history of sexually assaulting minors, and this significant sentence will protect children from future harm,” stated U.S. Attorney Fein. “I commend the U.S. Postal Inspection Service and the Shelton and Milford Police Departments for their expert investigation of this matter.”
According to court documents and statements made in court, in September 2007, members of the Shelton Police Department executed a state search warrant at POUPART’s Middlefield residence and seized computers, zip drives, compact discs and other electronic storage media. Subsequent forensic examination of the seized items revealed images and videos of child pornography, including images that POUPART took of one of his minor female relatives in 2003.
On June 17, 1991, POUPART was convicted in Vermont state court of sexually assaulting a 14-year-old girl.
On July 15, 2009, in Connecticut Superior Court in Derby, POUPART was convicted of two counts of sexual assault in the fourth degree. The two victims in that case were POUPART’s minor female relatives, and the conduct occurred in 2006 and 2007.
POUPART has been detained in federal custody since August 6, 2010. On May 25, 2012, he pleaded guilty to one count of possession of child pornography.
This matter was investigated by the United States Postal Inspection Service, the Shelton Police Department and the Milford Police Department. The case was prosecuted by Assistant United States Attorneys Anastasia King and Neeraj Patel.
This prosecution is part of the U.S. Department of Justice’s Project Safe Childhood Initiative, which is aimed at protecting children from sexual abuse and exploitation. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
To report cases of child exploitation, please visit www.cybertipline.com.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
[email protected]Florida Resident Sentenced in Pill ConspiracyRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Chris Zumpetta-Parr, Public Affairs SpecialistWHEELING, WEST VIRGINIA - A 32 year old Deland, Florida, resident was sentenced on February 4, 2013, in United States District Court in Wheeling by Judge Frederick P. Stamp, Jr. for her role in a Florida to West Virginia pill ring.
United States Attorney William J. Ihlenfeld, II, announced that: DANA K. DEEM was sentenced to 37 months imprisonment to be followed by three years of supervised release. DEEM entered a plea of guilty on November 28, 2012, to “Conspiracy to Distribute Schedule II Controlled Substances” from March of 2012 to September 12, 2012, in Moundsville. DEEM was remanded to the custody of the United States Marshal pending designation to a Federal institution.
In a joint investigation, involving the Marshall County Sheriff’s Department, the DEA, United State Postal Service, and the West Virginia State Police, beginning in the spring of
2012, agents received information that ROUPE’s apartment in Marshall County was being used to distribute pills being brought to West Virginia from Florida typically via rental vehicles. During the investigation, two traffic stops occurred during which $5,500 in drug proceeds were seized which will be forfeited to the United States as proceeds from the drug activity.This case was prosecuted by Assistant United States Attorney John C. Parr.
Florida Man Pleads Guilty to Selling Unapproved Cancer DrugsRead the Press Release
United States Attorney Laura E. Duffy announced today that Martin Paul Bean, III, pled guilty before United States Magistrate Judge David Bartick to conspiring to import unapproved foreign oncology drugs and sell them to doctors throughout the United States.
As part of his guilty plea, Bean admitted that between 2005 and 2011, he operated a business from his residence in Boca Raton, Florida, that sold over $7 million of prescription oncology drugs (for the treatment of cancer) to doctors throughout the United States. Bean ordered the drugs from various foreign sources, including companies in Pakistan, Indian and Turkey, and directed the drugs to be shipped in bulk directly to Oberlin Medical Supply in San Diego.
In pleading guilty, Bean acknowledged that he did business as GlobalRxStore, and marketed the drugs via an Internet website and through "blast faxes" sent to doctors’' offices. GlobalRxStore operated a call center in Winnipeg, Canada, where orders from doctors in the United States were accepted by telephone, facsimile and electronic mail. Bean admitted that the GlobalRxStore website falsely stated that it was lawful to import the drugs from abroad and that such drugs could be sold and used in the United States. Bean further admitted that he falsely advised doctors that GlobalRxStore's association with Oberlin Medical Supply somehow made his conduct legitimate. The drugs sold by Bean and GlobalRxStore were prescription drugs, including drugs marketed in the United States under the names Gemzar7, Taxotere7, Eloxatin7, Zometa7 and Kytril7. As Bean acknowledged he was aware, such drugs were intended for sale in markets outside the United States, and could not be lawfully imported, marketed or used in the United States.
Bean admitted that over the course of the conspiracy, he received $865,000 in proceeds from the sale of the unapproved foreign oncology drugs. As part of the plea agreement, Bean forfeited a 2004 Jaguar XJ he purchased with proceeds received from the illegal sale of drugs through GlobalRxStore.
Bean further admitted that on June 20, 2011, he caused a package containing Zoldria to be delivered to a doctor in Lawndale, California. Zoldria is manufactured in India and sold in that country, and although its manufacturer represents that it contains the same active ingredient as Zometa7, it is not approved for use in the United States.
Bean’s guilty plea is subject to final acceptance by United States District Court Judge William Q. Hayes. Bean is scheduled to be sentenced on May 6, 2013 at 9:00 a.m. before Judge Hayes.
This case is related to United States v. Maher Idriss, Criminal Case No. 12cr1775-WQH. On March 8, 2012, Maher Idriss pled guilty to conspiring to import merchandise contrary to law. At the time of his plea, Idriss admitted that between May 1, 2006, and May 5, 2011, he operated Oberlin Medical Supply and conspired with the owners and operators of GlobalRxStore to import and distribute unapproved oncology drugs not intended for sale in the United States. Idriss admitted that he and the owners of Global were all aware that it was unlawful to import these drugs. For example, after unapproved drugs to be shipped to Oberlin were seized by federal authorities in transit, Idriss discussed the seizures and the unlawful nature of the importation with Bean and other owner of Global. Idriss is scheduled to be sentenced before Judge Hayes on May 20, 2013 at 9:00 a.m.
The Food, Drug & Cosmetic Act ("FDCA"), is intended to assure, among other things, that all drugs manufactured and distributed within the United States are safely manufactured, made from appropriate ingredients, and properly labeled. Pursuant to the terms of the FDCA, the U.S. Food and Drug Administration (" FDA") regulate the manufacture, processing, labeling, and distribution of all drugs shipped and received in interstate commerce, including the wholesale distribution of prescription drugs. Under the FDCA, anyone manufacturing, preparing, compounding, or processing prescription drugs for sale and use in the United States must annually register with the FDA as a drug establishment, and provide a list to the FDA of the drugs which they manufacture for commercial distribution, and a copy of all labeling. This registration requirement applies equally to drug establishments located outside of the United States that import their drugs into the United States. Under the FDCA, a drug is deemed misbranded if it was manufactured at any domestic or foreign establishment and that drug was not annually listed with the FDA by the establishment as one of the drugs which was manufactured for commercial distribution in the United States at that location.
Under the FDCA, no person may offer for sale in the United States any drug not approved by the FDA. The approval process addresses the chemical composition of the drug, the drug's safety and effectiveness, and elements of the drug's distribution, such as the methods used in, and the facilities and controls used for, the manufacture, processing, and packing of the drug, as well as the labeling to be used for the drug. The approval process is specific to each manufacturer and each product and its labeling. Drugs manufactured outside the United States which are not intended for use in the United States do not go through this approval process and are considered unapproved drugs.
Any prescription drug whose labeling fails to bear the words "Rx only" is deemed to be misbranded. Moreover, all wording required by the FDCA to appear on drug labels and labeling sold in the continental U.S. must be in the English language. It is unlawful for anyone other than the manufacturer of a drug manufactured in the United States and exported to import that same drug back into the United States.
Criminal Case No. 12cr3734-WQH DEFENDANT Martin Paul Bean, III SUMMARY OF CHARGEConspiracy, in violation of Title 18, United States Code, Section 371
Criminal Case No. 12cr1775-WQH DEFENDANT Maher Idriss SUMMARY OF CHARGE Importation Contrary of Law, in violation of Title 18, United States Code, Section 545
Maximum Penalties: 5 years in custody, $250,000 fine, restitution and forfeiture.
Maximum Penalty: 20 years in custody and/or $250,000 fine INVESTIGATING AGENCIESFood and Drug Administration, Office of Criminal Investigations
Immigration and Customs Enforcement’s Homeland Security Investigations
Federal Bureau of Investigation
Postal Inspection ServiceFamily Members Sentenced in $1.9 Million Dollar Stolen Identity Refund Fraud SchemeRead the Press Release
Montgomery, Alabama - Several family members were sentenced Friday in the Middle District of Alabama for their involvement in a $1.9 million dollar stolen identity refund fraud scheme, the Justice Department and the Internal Revenue Service (IRS) announced. Barbara Murry, Veronica Temple, and Yolanda Moses each received a sentence of 57 months of incarceration and ordered to pay restitution in the amount of $1,908,659. Douglas Murry received a sentence of 24 months of incarceration and was ordered to pay restitution in the amount of $142,038. Almetta Johnson received a sentence of eight months home detention. Lee Moses, Jeffrey Temple, and Courtney Johnson each received a sentence of probation.
On April 25, 2012, Barbara Murry, Douglas Murry, Yolanda Moses, Lee Moses, Veronica Temple, Jeffrey Temple, Almetta Johnson, and Courtney Johnson were charged in a multi-count indictment by a federal grand jury on a variety of charges relating to an identity theft and tax fraud scheme. According to court documents, between January 2006 and April 2012, the defendants and their co-conspirators directed over 900 false tax refunds claiming in excess of $1.9 million to several bank accounts controlled by the defendants and their co-conspirators. The conspiracy consisted of two parts. First, the defendants received false tax refunds into their bank accounts and provided a portion of the funds to the third-party preparers. None of the defendants obtained the identities or prepared the tax returns in this part of the conspiracy.
According to court documents, the second part of the conspiracy centered on B & B Weaving Shop and B & B Tax Service. Barbara Murry owned and operated B & B Weaving Shop, located in Montgomery, Alabama. B& B Weaving Shop was located in the same building as B & B Tax Service. Barbara Murry’s daughters, Yolanda Moses and Veronica Temple, ran B & B Tax Service. Veronica Temple and her sister, Yolanda Moses, obtained stolen identities from multiple sources. Veronica Temple, Yolanda Moses, and others filed false tax returns from both B & B Tax Service and their homes and directed the tax refunds to numerous bank accounts controlled by the defendants and their co-conspirators. Veronica Temple, Yolanda Moses, and Barbara Murry recruited individuals, including Douglas Murry, to open bank accounts in furtherance of the scheme. Many of the identity victims were 16 and 17 year-old minors.
“The Justice Department will investigate and prosecute stolen identity refund fraud crimes, whether they are committed by a single thief, or a ring of thieves,” said Assistant Attorney General Kathryn Keneally. “The prison sentences handed down today demonstrate that such invasions of personal privacy and theft of public monies will not be tolerated.”
“Individuals who commit identity theft and refund fraud of this magnitude deserve to be punished to the fullest extent of the law,” said Richard Weber, Chief, IRS Criminal Investigation. “These individuals demonstrated a blatant disregard of the integrity of the United States tax system and caused immeasurable hardship to innocent victims. IRS Criminal Investigation remains committed to the pursuit of identity theft and, together with our partners at the U.S. Attorney’s Office, we will hold those who engage in similar conduct accountable.”
Assistant Attorney General Keneally commended the efforts of special agents of IRS - Criminal Investigation, who investigated the case, and Tax Division Trial Attorneys Jason H. Poole and Michael Boteler, and Assistant United States Attorney Jared Morris, who prosecuted the case.
Additional information about the Tax Division and its enforcement efforts may be found at justice.gov/tax.
PRESS CONTACT: Clark Morris
Email: [email protected]
Telephone: (334) 551-1755
Fax: (334) 223-7617Essex County, N.J., Woman Admits Lying in Federal CourtRead the Press Release
NEWARK, N.J. – An Essex County, N.J., woman today admitted to committing perjury while testifying in a federal trial, U.S. Attorney Paul J. Fishman announced.
Debora Medeiros Da Silva, 27, of Newark, pleaded guilty before U.S. District Judge Katharine S. Hayden in Newark federal court to an Information charging her with knowingly making false declarations before a grand jury or court.According to documents filed in this case and statements made in court:
On Sept. 23, 2009, while appearing as a witness under oath before the federal grand jury, Da Silva testified that she witnessed Peter Ventricelli, the target of a grand jury investigation, retrieve a bag of guns from her bedroom closet, and that he later gave the bag of guns to his brother, Mark Ventricelli. Da Silva subsequently appeared as a witness under oath at the trial in the matter of United States v. Peter Ventricelli and Mark Ventricelli, where she denied ever seeing any guns in a bag.
The federal charge of knowingly making false declarations before a grand jury or court carries a maximum potential penalty of five years in prison and a maximum fine of $250,000.
U.S. Attorney Fishman credited special agents with the FBI, under the direction of Acting Special Agent in Charge David Velazquez in Newark, with the investigation leading to today’s guilty plea.
Sentencing before Judge Hayden is scheduled for May 16, 2013.
The government is represented by Assistant U.S. Attorney Dara Aquila Govan of the Organized Crime/Gangs Unit in Newark.
13-063
Defense counsel: Lorraine Gauli-Rufo Esq., Assistant Federal Public Defender, NewarkDa Silva Information
Enid Man to Serve 36 Months in Federal Prison for Failure to Register as A Sex OffenderRead the Press Release
Oklahoma City, Oklahoma – Sanford C. Coats, United States Attorney for the Western District of Oklahoma, announced that WILLIAM K. ECHOLS, 28, of Enid, Oklahoma, was sentenced today by United States District Judge Stephen P. Friot to serve 36 months in prison for failure to register as a sex offender. Upon his release, Echols will be under the Supervision of United States Probation Office for ten years.
After traveling with the carnival around the United States, Echols was discovered in Enid, Oklahoma, by the United States Marshals after an anonymous tip through the website TipSoft.com. Echols was subsequently indicted by the federal grand jury in April of 2012 and charged with failing to register as a sex offender. Echols was required to register under the Sex Offender Registration and Notification Act (Adam Walsh Act) following his 2004 conviction in Trinity County Superior Court in California for Molesting a Child. In August of 2012, Echols entered a guilty plea to the charge in the indictment of failing to register as a sex offender. The defendant also has four prior convictions for failing to register as a sex offender in Nebraska, California, and Oregon.
This case was brought as part of Project Safe Childhood, 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, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit .
The case was investigated by the United States Marshals Service and was prosecuted by Assistant U.S. Attorney Robert Don Gifford.
Eighteen People Charged in International, $200 Million Credit Card Fraud ScamRead the Press Release
Crime Ring Invented 7,000 Fake Identities to Obtain Tens of Thousands of Credit Cards
NEWARK, N.J. – Federal agents in four states arrested 13 people today for allegedly creating thousands of phony identities to steal at least $200 million in one of the largest credit card fraud schemes ever charged by the Department of Justice, U.S. Attorney Paul J. Fishman announced.
The activity described in a Complaint unsealed today describes a sprawling criminal enterprise that stretched across dozens of states and numerous countries. The defendants charged in the Complaint allegedly fabricated identities to obtain credits cards and doctored credit reports to pump up the spending and borrowing power associated with the cards. They would then borrow or spend as much as they could based on their fraudulently obtained credit history and not repay the debts, looting businesses and financial institutions of more than $200 million in confirmed losses.
This morning, hundreds of law enforcement officers from the FBI and the U.S. Postal Inspection Service arrested 13 defendants and searched 13 locations in New Jersey, New York, Pennsylvania, and Connecticut. All of the defendants are charged with one count of bank fraud. The defendants are scheduled to appear later today before U.S. Magistrate Judge Madeline Cox Arleo in Newark federal court.
“This type of fraud increases the costs of doing business for every American consumer, every day,” U.S. Attorney Fishman said. “Through their greed and their arrogance, the individuals arrested today and their conspirators allegedly harmed not only the credit card issuers, but everyone who deals with increased interest rates and fees because of the money sucked out of the system by criminals acting in fraud rings like this one.”
“The criminal activity described in today’s complaint highlights the activity of an extensive, sophisticated, organized scheme, executed against U.S. financial institutions, which, in turn, effects every citizen of the United States,” Acting Special Agent in Charge Velazquez said. “This elaborate network utilized thousands of false identities, fraudulent bank accounts , fake companies, and collusive merchants, to defraud financial institutions of hundreds of millions of dollars, in order to facilitate extravagant lifestyles they could otherwise not afford. The arrests today are the result of the relentless and tenacious work of the United States Attorney’s Office, U.S. Postal Inspection, U.S. Secret Service, the Social Security Administration, the Federal Bureau of Investigation and numerous financial institutions.”
According to documents filed in this case:
The defendants and their conspirators stole hundreds of millions of dollars through a scheme repeated thousands of times to create more than 7,000 false identities and fraudulently obtain tens of thousands of credit cards (the “Fraud Cards”). The scheme involved a three-step process in which the defendants would:
- “Make up” a false identity by creating fraudulent identification documents and a fraudulent credit profile with the major credit bureaus.
- “Pump up” the credit of the false identity by providing false information about that identity’s creditworthiness to the credit bureaus. Believing the furnished information to be accurate, the credit bureaus would incorporate this material into the false identity’s credit report, making it appear that the false identity had excellent credit.
- “Run up” large loans using the false identity. The higher the fraudulent credit score, the larger the loans that the defendants could obtain. These loans were never repaid, and the defendants reaped the profits.
The Sham Companies
The enormous size and scope of the Criminal Fraud Enterprise required the defendants and others to construct an elaborate network of false identities. Across the country, the defendants and their co-conspirators maintained more than 1,800 “drop addresses,” including houses, apartments, and post office boxes, which they used as the mailing addresses of the false identities.
They created dozens of sham companies that did little or no legitimate business, obtained credit card terminals for the companies and then ran up charges on the Fraud Cards. To accept payments in the form of credit cards, a business must establish a merchant account with an entity known as a merchant processor. The merchant processor provides the business with equipment to process credit cards, receives payments from credit card companies for credit cards run at the business, and deposits those payments, minus a fee, into the business’ bank account. When the merchant processors shut down accounts operated by the conspirators for fraud, they would apply for new terminals and create new companies.
The Sham Companies also served as “furnishers,” providing the credit bureaus with false information about the credit history of numerous false identities of people who purportedly worked at or owned the Sham Companies.
Tradelines
The defendants used sophisticated methods – including a network of black-market businesses called “tradelines” providers – to commit fraud.
Tradelines come in two varieties: primary tradelines and authorized user tradelines. Primary tradelines are lines of credit in a credit history. If a credit card user has primary tradelines in good standing, it can have a significant impact on the user’s credit score, enabling the user to borrow more from credit card issuers. The defendants, however, trafficked in fraudulent primary tradelines.
A second kind of tradeline is the “authorized user” tradeline, where a credit card holder adds another, so-called “authorized user,” to a credit card account. This raises the credit score of the authorized user, who inherits some of the primary user’s credit history.
Some defendants created and sold fake lines of credit for false identities made up by other defendants. These fraudulent primary tradelines were then used to increase the credit limits on Fraud Cards, so that the defendants could reap even larger profits. Defendants used the authorized user tradelines to create new identities.
Complicit Businesses
The defendats also relied upon complicit businesses, including several jewelry stores in the Jersey City, N.J., area, to extract money from the Fraud Cards. The complicit businesses would allow the defendants to conduct sham transactions on the Fraud Cards and would then receive the proceeds from the credit card companies and split them with the other conspirators. These complicit businesses maintained multiple credit card merchant processing accounts at the same time. By operating dozens of accounts, these businesses furthered the conspiracy by allowing more fraudulent transactions to be processed before the merchant processors shut down the account. The proceeds from these merchant terminals were deposited into various business checking accounts, and the money was paid out to the owners of the complicit businesses, along with other defendants and conspirators.
Lavish spendingThe conspiracy generated enormous profits for the defendants – even though they spent millions of dollars sustaining the elaborate network of drop addresses and running credit reports on the thousands of false identities. Records of the New York and New Jersey Departments of Labor reveal that many of the defendants have no reported legitimate employment in the last five years. Nonetheless, the defendants used the proceeds of the criminal enterprise to buy luxury automobiles, electronics, spa treatments, expensive clothing and millions of dollars in gold. They also stockpiled large sums of cash. Law enforcement discovered approximately $70,000 in cash in the oven of one defendant.
The defendants also moved millions of dollars through accounts under their control, and wired millions of dollars overseas. An analysis of 169 bank accounts of the defendants, sham companies, and complicit businesses has identified $60 million dollars in proceeds that flowed through the accounts, much of it withdrawn in cash. The conspirators wired millions of dollars to Pakistan, India, the United Arab Emirates, Canada, Romania, China and Japan. Due to the massive scope of the conspiracy, which involved over 25,000 fraudulent credit cards, loss calculations are ongoing. Final figures may grow beyond the present confirmed losses of more than $200 million.
The investigation that produced today’s arrests involved cyber crime investigators from the FBI and has been ongoing for more than 18 months. It previously resulted in the arrest of four other individuals and the seizure of more than $2 million in gold from a jewelry store in Jersey City.
The bank fraud count with which the defendants are charged is punishable by a maximum potential penalty of 30 years in prison and a fine of $1 million.
U.S. Attorney Fishman praised special agents of the FBI’s Cyber Division, under the direction of Acting Special Agent in Charge David Velazquez, for the investigation leading to today’s arrests, as well as postal inspectors under the direction of Acting Postal Inspector in Charge Marie Kelokates and the U.S. Secret Service, under the direction of Special Agent in Charge James Mottola. He also thanked the U.S. Social Security Administration for its role in the investigation.
The government is represented by Assistant U.S. Attorney Erez Liebermann, chief of the Computer Hacking and Intellectual Property section of the Economic Crimes Unit, and Assistant U.S. Attorneys Daniel V. Shapiro of the General Crimes Unit, Zach Intrater of the Economic Crimes Unit, and Barbara Ward of the Asset Forfeiture Unit of the U.S. Attorney’s Office in Newark.
The charge and allegations contained in the Complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Defendants:Name
Age
Residence
59
Iselin, N.J.
Muhammad Shafiq
38
Bellerose, N.Y.
Ijaz Butt
53
Hicksville, N.Y.
Qaiser Khan
48
Valley Stream, N.Y.
Shafique Ahmed
52
Floral Park, N.Y.
Habib Chaudhry
45
Valley Stream, N.Y.
Raghbir Singh
57
Hicksville, N.Y.
Muhammad Naveed
35
Flushing, N.Y.
Khawaja Ikram
40
Staten Island, N.Y.
Nasreen Akhtar
37
Jersey City, N.J.
Mohammad Khan
48
Staten Island, N.Y.
Azhar Ikram
39
Howard Beach, N.Y.
Shahid Raza, a/k/a “Abid Mian”
44
Valley Stream, N.Y.
Vernina Adams
31
Philadelphia, Pa.
Sat Verma
60
Iselin, N.J.
Vijay Verma
45
Iselin, N.J.
Tarsem Lal
74
Iselin, N.J.
Vinod Dadlani
49
Lyndhurst, N.J.
13-061
Qureshi, Babar, et al., Complaint
Eight Individuals Sentenced During the Month of January for Federal Supervised Release ViolationsRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Chris Zumpetta-Parr, Public Affairs SpecialistWHEELING, WEST VIRGINIA - United States Attorney William J. Ihlenfeld, II, announced that during the month of January, 2013, eight individuals had their supervised release revoked for violating terms and conditions imposed by the United States District Court.
WHEELING DIVISION REVOCATIONS
(Judge Frederick P. Stamp, Jr.)
NICOLE RAE LEE, age 43, of Wheeling, was sentenced to 12 months and 1 day imprisonment for possession and use of cocaine, drug paraphernalia and alcohol and associating with a convicted felon without her probation officer’s approval. LEE was originally sentenced on March 22, 2007, to 24 months imprisonment and 6 years of supervised release for the distribution of crack cocaine within 1,000 feet of a protected location. In 2008, LEE’s sentence was reduced to 18 months pursuant to the crack re-sentencing guidelines. On May 18, 2009, LEE’s supervised release was revoked for violations and she was sentenced to
7 months imprisonment and 65 months of supervised release. LEE was remanded to the custody of the United States Marshal pending designation to a Federal institution.The United States was represented at the Wheeling revocation hearings by Assistant
United States Attorney John C. Parr.CLARKSBURG DIVISION REVOCATIONS (Judge Irene M. Keeley)
ANTONIO COTTINGHAM, age 26, of Fairmont, West Virginia, was sentenced to 21 months imprisonment for a charge and arrest in Marion County for conspiracy to commit a felony (delivery of crack cocaine). NOTTINGHAM was originally sentenced on May 16, 2007, to 70 months imprisonment and 3 years of supervised release for the distribution of crack cocaine and again on May 20, 2011, to 8 months imprisonment and 3 years of supervised release for escape from custody. COTTINGHAM was remanded to the custody of the United States Marshal pending designation to a Federal institution.SAMANTHA LORETTA, age 26, of Clarksburg, West Virginia, was sentenced to 18 months for testing positive for the use of narcotics and failure to notify probation officer of her arrest in Harrison County for shoplifting. LORETTA was originally sentenced on November
7, 2007, to 57 months imprisonment and 3 years of supervised release. LORETTA was remanded to the custody of the United States Marshal pending designation to a Federal institution.MATTHEW W. HAYES, age 28, of Rivesville, West Virginia, was sentenced to 6 months imprisonment to be followed by 36 months of supervised release for testing positive for the use of narcotics and failure to be truthful with his probation officer. HAYES was originally sentenced on February 28, 2011, to 3 years probation for the distribution of heroin. HAYES was remanded to the custody of the United States Marshal pending designation to a Federal institution.
DANIEL LEE STEVENS, age 46, of Mannington, West Virginia, was sentenced to 4 months imprisonment for testing positive for the use of narcotics on two separate occasions. STEVENS was originally sentenced on September 4, 2007, to 5 years probation for being a felon in possession of a firearm. STEVENS, who is free on bond, will self-report to the designated Federal institution.
MICHAEL JOSEPH GOODWIN, age 27 of Clarksburg, West Virginia, was sentenced to 30 days imprisonment for failure to report for drug testing, failure to obtain GED during his term of supervised release and testing positive for use of opiates. GOODWIN was originally sentenced on May 9, 2008, to 27 months imprisonment and 3 years of supervised release for the distribution of crack cocaine. GOODWIN, who is free on bond, will self-report to the designated Federal institution.
The United States was represented at the Clarksburg revocation hearings by Assistant
United States Attorney Zelda E. Wesley, Andrew R. Cogar and Stephen D. Warner.MARTINSBURG DIVISION REVOCATIONS (Judge Gina M. Groh)
ANGELA SUE HODGE, age 37, of Kanawha County, West Virginia, was sentenced to 12 months imprisonment for falsifying a drug screen and use of narcotics. HODGE was originally sentenced on March 30, 2010, to 18 months imprisonment and 3 years of supervised release for the distribution of crack cocaine. HODGE was remanded to the custody of the United States Marshal pending designation to a Federal institution.TIMOTHY DOUGLAS IMPERIO, age 31, of Mineral County, West Virginia, was sentenced to 6 months imprisonment to be followed by 30 months of supervised release for failure to file reports with his probation officer, failure to maintain employment, failure to notify probation officer of change in employment status; and, being untruthful to the probation officer. IMPERIO was originally sentenced on July 13, 2009, to 30 months imprisonment and 3 years of supervised release for perjury. IMPERIO was remanded to the custody of the United States Marshal pending designation to a Federal institution.
The United States was represented at the Martinsburg revocation hearings by Assistant
United States Attorney Paul T. Camilletti.The United States Probation Office carries out probation and pretrial services functions throughout the Northern District of West Virginia. With locations in Wheeling, Clarksburg, Martinsburg, and Elkins, the office works to assist the federal courts in the fair administration of justice, to protect the community, and to bring about long-term positive change in individuals under supervision. Jeff Givens is the Chief Probation Officer for the Northern District.
East St. Louis Man Pleads Guilty to Firearm OffenseRead the Press Release
On February 4, 2013, Akai J. Aikens, a twenty-nine year old East St. Louis, Illinois, man pled guilty in Federal District Court, in East St. Louis, to Unlawful Possession of a Firearm by a Previously Convicted Felon, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today. Aikens is scheduled for sentencing on May 10, 2013, at which at which time he faces a maximum potential sentence of 10 years’ in prison and a fine of up to $250,000, not more than 3 years’ of supervised release after his prison term, and a mandatory special assessment of $100. Aikens also agreed to the forfeiture of the firearm.
Court proceedings revealed that on October 5, 2012, a law enforcement officer on patrol in East St. Louis, IL, observed a vehicle traveling through the city with large objects hanging from the rearview mirror obstructing the driver’s view. The officer activated emergency lights to initiate a traffic stop. The vehicle abruptly turned into a parking lot at a bar and car wash with the seat passenger exiting the vehicle, running behind the building. The officer yelled out for the passenger to come back or the police dog would be sent. Aikens emerged and was asked if he hid a gun behind the building. He denied doing so. On instinct, the officer released the patrol dog to conduct an “article search” around the car wash. Moments later the dog assumed a “down position” near a firearm lying in the grass behind the car wash. Prior to October 5, 2012, Aikens had been convicted of a crime that was punishable by a term of imprisonment of more than one year.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Illinois State Police.
This case is assigned to Assistant United States Attorney Daniel T. Kapsak for prosecution.
Dublin Woman Charged with Filing False Claims with IRSRead the Press Release
OAKLAND, Calif. – Denise LaShawn Reed, aka Brooke Nicholson, aka Lauren Roberts, aka Denise Berry, aka Savana Jones, aka Neyce Roberts was arrested yesterday morning on charges related to a false tax refund scheme, United States Attorney Melinda Haag and IRS Criminal Investigation Special Agent in Jose M. Martinez announced.
According to the indictment, between January 2009 and February 2010, Reed, of Dublin, Calif., presented claims to the IRS for refunds of taxes that she knew to be false, fictitious and fraudulent. Reed made the claims by preparing and presenting U.S. Individual Income Tax Returns, Forms 1040, in the names of other individuals. Reed, who knew she was not entitled to the requested refunds, was charged with 14 counts of filing false claims for refunds of taxes totaling $97,002.
Reed made her initial appearance before United States Magistrate Judge Donna Ryu, in Oakland, and was release on a $50,000 bond. Her next scheduled court appearance is Feb. 14, 2013.
The maximum penalty for each count of filing false claims, in violation of Title 18, United States 287, is five years in prison and a fine of $250,000. 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.
Cynthia Stier is the Assistant United States Attorney who is prosecuting the case. The prosecution is the result of an investigation by the Internal Revenue Service, Criminal Investigation.
Please note, an indictment contains only allegations against an individual and, as with all defendants, must be presumed innocent unless and until proven guilty.
In response to these types of cases, the Justice Department’s Tax Division issued a new directive to further the efforts of the Tax Division and help U.S. Attorneys’ Offices respond quickly and effectively to the challenges in stolen identity refund fraud (SIRF) cases. To further this goal, Tax Division Directive 144, which took effect on Oct. 1, 2012, was issued to streamline the process for prosecuting these offenses.
(Reed indictment )
Distribution of Cocaine Base AKA Crack CocaineRead the Press Release
Michael J. Moore, United States Attorney for the Middle District of Georgia, announced that two defendants from Eatonton, Georgia, Frank Eugene Mathis, age 37, and Shellany Omar Denham, age 29, entered pleas of guilty to Distribution of Cocaine Base a/k/a Crack Cocaine, in violation of Title 21 United States Code Section 841(a)(1) and 18 United States Code Section 2, before the Honorable C. Ashley Royal, United States District Court, Macon, Georgia. Sentencing has been set for April 24, 2013.Frank Eugene Mathis pled guilty to distributing more than 28 grams of cocaine base a/k/a crack cocaine. In addition, Mathis pled guilty to Possession of a Firearm by a Convicted Felon, in violation of Title 18 United States Code, Section 922(g)(1) and 924(a)(2).
This case was investigated by Putnam County Sheriff’s Office, Lt. Harry Luke and Drug Enforcement Administration Special Agent Hub Jordan. The case was prosecuted by Assistant United States Attorney Verda Colvin.
For additional information please contact Sue McKinney, Public Affairs Specialist at (478) 621-2602.
Devils Lake Woman Pleads Guilty to Federal Drug ChargeRead the Press Release
FARGO - U.S. Attorney Timothy Q. Purdon announced that on Feb. 5, 2013, Ashley Lenoir of Devils Lake, N.D., pleaded guilty before U.S. District Judge Ralph R. Erickson to a charge of distribution of a controlled substance.
Lenoir, 32, pleaded guilty to selling methamphetamine, a Schedule II controlled substance, on the Spirit Lake Indian Reservation. The incident occurred on Aug. 15, 2011.
The charge of distribution of a controlled substance carries a statutory maximum penalty of 20 years' imprisonment.
The case was investigated by the Bureau of Indian Affairs and the Drug Enforcement Administration.
Sentencing for Lenoir has been scheduled for April 29, 2013, in U.S. District Court in Fargo, N.D., at 1:30 p.m
Assistant U.S. Attorney Janice M. Morley is prosecuting the case.
Department of Justice Sues Standard & Poor’s for Fraud in Rating Mortgage-Backed Securities in the Years Leading up to the Financial CrisisRead the Press Release
Attorney General Eric Holder announced today that the Department of Justice has filed a civil lawsuit against the credit rating agency Standard & Poor’s Ratings Services alleging that S&P engaged in a scheme to defraud investors in structured financial products known as Residential Mortgage-Backed Securities (RMBS) and Collateralized Debt Obligations (CDOs). The lawsuit alleges that investors, many of them federally insured financial institutions, lost billions of dollars on CDOs for which S&P issued inflated ratings that misrepresented the securities’ true credit risks. The complaint also alleges that S&P falsely represented that its ratings were objective, independent, and uninfluenced by S&P’s relationships with investment banks when, in actuality, S&P’s desire for increased revenue and market share led it to favor the interests of these banks over investors.
“Put simply, this alleged conduct is egregious – and it goes to the very heart of the recent financial crisis,” said Attorney General Holder. “Today’s action is an important step forward in our ongoing efforts to investigate – and – punish the conduct that is believed to have contributed to the worst economic crisis in recent history. It is just the latest example of the critical work that the President’s Financial Fraud Enforcement Task Force is making possible.”
Attorney General Eric Holder was joined in announcing the filing of the civil complaint by Acting Associate Attorney General Tony West, Principal Deputy Assistant Attorney General for the Civil Division Stuart F. Delery, and U.S. Attorney for the Central District of California André Birotte Jr. Also joining the Department of Justice in making this announcement were the attorneys general from California, Connecticut, Delaware, the District of Columbia, Illinois, Iowa and Mississippi, who have filed or will file civil fraud lawsuits against S&P alleging similar misconduct in the rating of structured financial products. Additional state attorneys general are expected to make similar filings today.
“Many investors, financial analysts and the general public expected S&P to be a fair and impartial umpire in issuing credit ratings, but the evidence we have uncovered tells a different story,” said Acting Associate Attorney General West. “Our investigation revealed that, despite their representations to the contrary, S&P’s concerns about market share, revenues and profits drove them to issue inflated ratings, thereby misleading the public and defrauding investors. In so doing, we believe that S&P played an important role in helping to bring our economy to the brink of collapse.”
Today’s action was filed in the Central District of California, home to the now defunct Western Federal Corporate Credit Union (WesCorp), which was the largest corporate credit union in the country. Following the 2008 financial crisis, WesCorp collapsed after suffering massive losses on RMBS and CDOs rated by S&P.
“Significant harm was caused by S&P’s alleged conduct in the Central District of California,” said U.S. Attorney for the Central District of California Birotte. “Across the seven counties in my district, we had huge numbers of homeowners who took out subprime mortgage loans, many of which were made by some of the country’s most aggressive lenders only because they later could be securitized into debt instruments that were given flawed ‘AAA’ ratings by S&P. This led to an untold number of foreclosures in my district. In addition, institutional investors located in my district, such as WesCorp, suffered massive losses after putting billions of dollars into RMBS and CDOs that received flawed and inflated ratings from S&P.”
The complaint, which names McGraw-Hill Companies, Inc. and its subsidiary, Standard & Poor’s Financial Services LLC (collectively S&P) as defendants, seeks civil penalties under the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) based on three forms of alleged fraud by S&P: (1) mail fraud affecting federally insured financial institutions in violation of 18 U.S.C. § 1341; (2) wire fraud affecting federally insured financial institutions in violation of 18 U.S.C. § 1343; and (3) financial institution fraud in violation of 18 U.S.C. § 1344. FIRREA authorizes the Attorney General to seek civil penalties up to the amount of the losses suffered as a result of the alleged violations. To date, the government has identified more than $5 billion in losses suffered by federally insured financial institutions in connection with the failure of CDOs rated by S&P from March to October 2007.
“The fraud underpinning the crisis took many different forms, and for that reason, so must our response,” said Stuart F. Delery, Principal Deputy Assistant Attorney General for the Department’s Civil Division. “As today’s filing demonstrates, the Department of Justice is committed to using every available legal tool to bring to justice those responsible for the financial crisis.”
According to the complaint, S&P publicly represented that its ratings of RMBS and CDOs were objective, independent and uninfluenced by the potential conflict of interest posed by S&P being selected to rate securities by the investment banks that sold those securities. Contrary to these representations, from 2004 to 2007, the government alleges, S&P was so concerned with the possibility of losing market share and profits that it limited, adjusted and delayed updates to the ratings criteria and analytical models it used to assess the credit risks posed by RMBS and CDOs. According to the complaint, S&P weakened those criteria and models from what S&P’s own analysts believed was necessary to make them more accurate. The complaint also alleges that, from at least March to October 2007, and because of this same desire to increase market share and profits, S&P issued inflated ratings on hundreds of billions of dollars’ worth of CDOs. At the time, according to the allegations in the complaint, S&P knew that the quality of non-prime RMBS was severely impaired, and that the ratings on those mortgage bonds would not hold. The government alleges that S&P failed to account for this impairment in the CDO ratings it was assigning on a daily basis. As a result, nearly every CDO rated by S&P during this time period failed, causing investors to lose billions of dollars.
The underlying federal investigation, code-named “Alchemy,” that led to the filing of this complaint was initiated in November 2009 in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.StopFraud.gov
Due to public interest in this case, the Department of Justice is releasing documents that may not be in an accessible format. If you have a disability and the format of any material on the site interferes with your ability to access some information, please email the Department of Justice webmaster at [email protected] or contact Adora Andy at 202.514.2007. To enable us to respond in a manner that will be of most help to you, please indicate the nature of the accessibility problem, your preferred format (electronic format (ASCII, etc.), standard print, large print, etc.), the web address of the requested material, and your full contact information so we can reach you if questions arise while fulfilling your request.
Portable Document Format (PDF) files may be viewed with a free copy of Adobe Acrobat Reader.Related Materials:
Standard & Poor's Complaint
Attorney General Eric Holder Speaks at the Press Conference Announcing Lawsuit Against S&P
Acting Associate Attorney General Tony West Speaks at the Press Conference Announcing Lawsuit Against S&P
Principal Deputy Assistant Attorney General for the Civil Division Stuart F. Delery Speaks at the Press Conference Announcing Lawsuit Against S&PCrystal Beach Woman Arresting for Defrauding FEMA in the Wake of Hurricane IkeRead the Press Release
GALVESTON, Texas – Whitney Rohacek, 26, of Crystal Beach, has been was arrested following the return of an indictment charging her with fraud in connection with a major disaster and aggravated identity theft, United States Attorney Kenneth Magidson announced today.
Rohacek was arrested this afternoon without incident. She made her appearance just moments ago before U.S. Magistrate Judge John Froeschner, at which time she was permitted to be released upon posting $10,000 bond.
The four-count sealed indictment was returned Jan. 30, 2013, and unsealed upon her arrest today. The indictment alleges she submitted a false bill of sale for a travel trailer that contained a forged signature, as well as fraudulent title documents and receipts in order to obtain disaster assistance from the Federal Emergency Management Agency in the wake of Hurricane Ike.
If convicted of fraud in connection with a major disaster or emergency, Rohacek faces a maximum punishment of up to 30 years in prison, as well as a possible $250,000 fine. The aggravated identity theft charge also carries another possible fine of $250,000 and a two-year-term of imprisonment, upon conviction, which must be served consecutively to any other prison term imposed.
The investigation leading to the charges in this case was conducted by the Department of Homeland Security – Office of Inspector General. Assistant United States Attorney Andrew Leuchtmann is prosecuting this case.
An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.Crosby Felon Indicted for Possessing A Pistol and DrugsRead the Press Release
MINNEAPOLIS—A federal indictment filed yesterday charges a 32-year-old felon from the northern Minnesota community of Crosby with possessing a .40-caliber, semi-automatic pistol along with approximately 30 grams of methamphetamine and crack cocaine. Zachari Allen Kozar was specifically charged with one count of being a felon in possession of a firearm, one count of possession with intent to distribute methamphetamine and crack cocaine, and one count of using and carrying a firearm during and in relation to a drug-trafficking crime.
According to a law enforcement affidavit filed in the case, authorities began observing Kozar in the fall of 2012 as part of a drug trafficking investigation. Then, on December 26, 2012, officers stopped Kozar for a traffic violation while he was in Baxter, Minnesota. During that stop, Kozar allegedly became agitated when a drug-sniffing canine was brought to the scene. After the dog alerted to a controlled substance, police spotted a clear plastic baggie with crystal-like content, along with a handgun, under the vehicle’s front passenger seat. Police subsequently executed a search warrant on the vehicle, finding the loaded .40-caliber Steyr firearm in a nylon gun holster, a second .40 caliber magazine, a plastic baggy containing approximately 2.8 grams of crack cocaine, as well as ten baggies of various amounts of methamphetamine and crack cocaine, totaling approximately 32.1 grams. Kozar was arrested shortly after the initial traffic stop, and $896 in U.S. currency was found on his person.Because he is a felon, Kozar is prohibited under federal law from possessing a firearm or ammunition at any time. His prior convictions in St. Louis County include two counts of theft of a motor vehicle (1999), fleeing police in a motor vehicle (1999 and 2004), third-degree burglary (1999), damage to property (1999), escape from custody (2001), fifth-degree drug possession (2004 and two counts in 2008), and third-degree drug possession (2009) . Because some of these convictions constitute crimes of violence, Kozar is subject to the federal Armed Career Criminal Act. That act mandates a minimum of 15 years in prison for anyone subsequently convicted in federal court for being a felon in possession of a firearm or ammunition.
If convicted, Kozar faces a potential maximum penalty of life in prison for being a felon in possession, 20 years for drug possession, and a possible consecutive five-year to life sentence for carrying and using a firearm during or in relation to a drug trafficking crime. All sentences will be determined by a federal district court judge.
This case is the result of an investigation by the Lakes Area Drug Investigative Division, the Minnesota Bureau of Criminal Apprehension, and the United States Bureau of Alcohol, Tobacco, Firearms and Explosives. It is being prosecuted by Assistant U.S. Attorney Allen A. Slaughter.An indictment is a determination by a grand jury that there is probable cause to believe that offenses have been committed by a defendant. A defendant, of course, is presumed innocent until he or she pleads guilty or is proven guilty at trial.
Corpus Christi Man Pleads Guilty to Bank RobberyRead the Press Release
CORPUS CHRISTI, Texas – A man accused of robbing a Texas Champion Bank through use of force and intimidation has been convicted of bank robbery, United States Attorney Kenneth Magidson announced today. Nicholas Vernon Tolmie, 52, of Corpus Christi, entered a plea just a short time ago before Senior U.S. District Judge John D. Rainey.
Tolmie was indicted in January 2013. As part of his plea today, Tolmie admitted he robbed the Texas Champion Bank located on Ayers Street in Corpus Christi on July 11, 2012, and again on Nov. 19, 2012. In both robberies, Tolmie presented threatening notes to bank tellers demanding money.
Tolmie was arrested on Nov. 19, 2012, after Corpus Christi Police officers responded to the bank to investigate the robbery. Officers searched the area and found discarded clothes in an abandoned building matching the clothes worn during the robbery.
The investigation revealed that a man had recently fled the building and entered a nearby restaurant. Officers located Tolmie in that restaurant and he was subsequently detained. Tolmie had the cash from the robbery concealed in his boots and admitted it came from the bank robbery. Tolmie was later identified by an eyewitness and fingerprint evidence as having also committed the July 11, 2012, robbery. Tolmie later admitted he committed both bank robberies.
Tolmie has been in custody without a bond since his arrest on Nov. 19, 2012. Judge Rainey has set sentencing for May 20, 2013, at 10:30 a.m., at which time Tolmie faces up to 20 years imprisonment as well as a possible $250,000 fine.
This case was investigated by the FBI and prosecuted by Assistant United States Attorney Sam Brown IV.
Church Rock, N.M., Man Pleads Guilty to Second Degree Murder Charge Involving Death of a Navajo ManRead the Press Release
ALBUQUERQUE –Danny Dan Don Brown, 25, a member of the Navajo Nation who resides in Church Rock, N.M., pled guilty this morning to a second degree murder charge under a plea agreement with the U.S. Attorney’s Office.
Brown and co-defendant, Melvyn Lee Morgan, 29, a member of the Navajo Nation who resides in Gallup, N.M., were charged in a criminal complaint on Dec. 4, 2011, for the Dec. 3, 2011 murder of Robert L. Smith, also a member of the Navajo Nation. According to the complaint, the murder occurred in Church Rock, which is within the Navajo Indian Reservation. Brown and Morgan were arrested on Dec. 27, 2011, and have been in federal custody since that time. The two were indicted on Jan. 24, 2012, and charged with second degree murder.
According to court records, late on the night of Dec. 3, 2011, Brown, Morgan and the victim had a fight after drinking alcohol. During the fight, Brown and Morgan repeatedly kicked and punched the victim, who died as a result of injuries he sustained.
Under the terms of his plea agreement, Brown faces a sentence of not less than 12 years and not more than 15 years in prison. Brown remains in custody pending his sentencing hearing, which has yet to be scheduled.
Morgan has entered a not guilty plea to the indictment. The charges in the indictment as to Morgan are only accusations and he is presumed innocent unless proven guilty.
The case was investigated by the Gallup office of the FBI with assistance from the Crownpoint Division of the Navajo Nation Department of Public Safety and the McKinley County Sheriff’s Office, and is being prosecuted by Assistant U.S. Attorney Paul H. Spiers.
Cherokee County Individuals Arrested on Federal Drug Trafficking ChargesRead the Press Release
Department of Justice
Office of Public AffairsTYLER, Texas - U.S. Attorney John M. Bales announced today that 11 individuals are in custody following a lengthy investigation into drug trafficking in the Eastern District of Texas.
On Feb. 5, 2013, a combined task force of federal, state and local law enforcement agencies began arresting individuals named in a federal indictment returned by a grand jury on Jan. 23, 2013. The indictment charges the following individuals with conspiracy to possess with intent to distribute and distribution of more than 50 grams of methamphetamine:
Javier Colmenero Loyola, 46
James Franklin Carpenter, 59
Bobby Joe Whiteley, 42
Brandon Wesley Kimble, 28
Christopher Trent O'Neal, 27
Toby Hill Coslett, aka "Crazy," 41
Jeffrey Rainey, aka "Pee Wee," 49
Stile Parker Denton, 48
Morris Edward Stone, 43
James Adrien Craig, aka "Ace," 37
Christine Marie Hamer, 35The defendants will appear today before U.S. Magistrate Judge John D. Love. If convicted, the defendants each face a minimum of 10 years and up to life in federal prison.
A grand jury indictment is not evidence of guilt. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law. ####
This indictment is the result of a joint investigation by the Tyler office of the Federal Bureau of Investigation, the Cherokee County Sheriff’s Office, the Jacksonville Police Department and members of the Safe Streets Task Force. Numerous additional agencies participated in today’s arrests including DEA, ATF, HSI, the US Marshals Service, the Texas Department of Public Safety (DPS), the Texas Rangers Special Operations Group, and the Anderson County Sheriff’s Department. This case is being prosecuted by Assistant U.S. Attorney Richard Moore.Cedar Rapids Man Pleads Guilty to Federal Child Sexual Exploitation OffensesRead the Press Release
A man who sexually exploited and extorted minors pled guilty today in federal court in Cedar Rapids.
Lucas Robinson, age 23, from Cedar Rapids, was convicted of one count of sexual exploitation of children, one count of possession of child pornography, and one count of extortion.At the plea hearing, Robinson admitted that, between 2009 and 2012, he used, persuaded, induced, enticed, and coerced minor females to engage in sexually explicit conduct for the purpose of producing visual depictions of this conduct. He admitted he threatened to distribute sexually explicit depictions of minors so they would send him more sexually explicit depictions of themselves, so they would talk to him when he wanted, and so at least one minor would engage in sexual activity with him.
Sentencing before United States District Court Chief Judge Linda R. Reade will be set after a presentence report is prepared. Robinson remains in custody of the United States Marshal pending sentencing. Robinson faces a mandatory minimum sentence of 15 years’ imprisonment and a possible maximum sentence of 42 years’ imprisonment, $750,000 in fines, a $300 special assessment, and supervised release for 5 years to life following his imprisonment.
This case is being prosecuted by Assistant United States Attorney Mark Tremmel and was investigated by the Cedar Rapids Police Department and the Benton County Sheriff’s Office.This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab “resources.”
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is CR 12-0089.
Cary Man Sentenced for CarjackingRead the Press Release
RALEIGH - United States Attorney Thomas G. Walker announced that in federal court today, United States District Judge Louise Flanagan sentenced MICHAEL DONNELL LEONARD for weapons offenses stemming from a carjacking. LEONARD, 50, of Cary, North Carolina, received 262 months imprisonment followed by 5 years of supervised release.
On March 29, 2012, LEONARD entered a business in Raleigh, North Carolina, looking for his estranged girlfriend. He pulled a pistol on other employees of the center, and demanded the victim come to him. LEONARD held the gun against the woman as he forced her out of the building and to her car, and they drove off. A short while later, Raleigh Police located the vehicle at a gas station in Raleigh. When LEONARD and the woman emerged from the station, LEONARD was apprehended. A Lorcin .380 semi-automatic pistol was recovered.
USA Walker commented, “We are thankful this incident ended without physical injury to those threatened by this defendant, and hope the significant sentence meted out today will provide encouragement to all victims of domestic violence.”
Investigation of the cases was conducted by the Raleigh Police Department and the Federal Bureau of Alcohol, Tobacco, Firearms and Explosives. - United States Attorney Thomas G. Walker announced that in federal court today, United States District Judge Louise Flanagan sentenced MICHAEL DONNELL LEONARD for weapons offenses stemming from a carjacking. LEONARD, 50, of Cary, North Carolina, received 262 months imprisonment followed by 5 years of supervised release.
On March 29, 2012, LEONARD entered a business in Raleigh, North Carolina, looking for his estranged girlfriend. He pulled a pistol on other employees of the center, and demanded the victim come to him. LEONARD held the gun against the woman as he forced her out of the building and to her car, and they drove off. A short while later, Raleigh Police located the vehicle at a gas station in Raleigh. When LEONARD and the woman emerged from the station, LEONARD was apprehended. A Lorcin .380 semi-automatic pistol was recovered.
USA Walker commented, “We are thankful this incident ended without physical injury to those threatened by this defendant, and hope the significant sentence meted out today will provide encouragement to all victims of domestic violence.”
Investigation of the cases was conducted by the Raleigh Police Department and the Federal Bureau of Alcohol, Tobacco, Firearms and Explosives.
Businessman Eddy Zai Sentenced to More Than Seven Years in Prison, Ordered to Repay $23 Million for Credit Union FraudRead the Press Release
Local businessman A. Eddy Zai was sentenced to more than seven years in prison and ordered to forfeit more than $23 million after he previously pleaded guilty to nine counts related to his participation in a fraud against St. Paul Croatian Federal Credit Union, law enforcement officials said.
“Mr. Zai held himself out to the community as a successful entrepreneur, when in reality he was part of a conspiracy that resulted in one of the largest credit union collapses in history,” said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
“Eddy Zai’s sentence and restitution amount reflect his extensive involvement in bribing loan officials, submitting false documentation and obtaining millions of dollars in loans for numerous non-operational businesses managed by him,” said Stephen D. Anthony, Special Agent in Charge of the FBI’s Cleveland office. “The FBI will continue to seek justice for victims of the SPCFCU collapse and any other financial fraud scheme where trust and faith have been unwittingly placed.”
Darryl Williams, Special Agent in Charge of the Internal Revenue Service-Criminal Investigations’ Cincinnati Office, said: “Honest and law abiding citizens are fed up with those who use deceit and fraud to line their pockets with other people’s money. Let these convictions stand as a warning to those who victimize the public that whether you are the main perpetrator of a fraud, or merely assist in its facilitation, the law will hold all guilty parties accountable."
Zai, 44, of Pepper Pike, pleaded guilty last year to one count of conspiracy to commit bank fraud and bank bribery, two counts of bank fraud, three counts of money laundering, one count of bribery and two counts of making false statements of financial institutions.
U.S. District Judge John Adams sentenced Zai to 87 months in prison, followed by five years of supervised release, and ordered him to pay more than $23 million in restitution.
Zai conspired with others, including Anthony Raguz, the former Chief Operating Officer of the St. Paul Croatian Federal Credit Union (SPCFCU), to submit false loan documents to the credit union, defraud the credit union of approximately $16.7 million, and pay bribes and kickbacks to Raguz for using his position at the credit union to approve numerous loans to Zai and the entities and nominee companies he controlled, according to court documents.
The conduct took place from December 2003 through March 2010, according to court documents.
SPCFCU, located in Eastlake, was placed into conservatorship by the National Credit Union Administration on April 23, 2010. One week later, the NCUA liquidated SPFCFU and discontinued its operations after determining the credit union was insolvent. At that time, SPCFCU served about 5,400 members and was believed to have assets of approximated $239 million.At the time, Zai owned, operated and controlled The Cleveland Group, LLC (aka the Cleveland Group of Companies) and its many related entities, which included: Cleveland Flooring & Designs, Ltd.; Alpina, Inc.; Cleveland Development Group, LLC; The Cleveland Group, Environmental, LLC; Cleveland Real Estate Group, Inc.; The Cleveland Group Real Estate Division; The Cleveland Group, Excavating Division; Cleveland Management Group, Inc.; The Cleveland Group, Construction Division; The Cleveland Group, Consulting Division; The Cleveland Group, Ltd.; 417, Ltd.; 417 Limited; and Sutton Park, Ltd.
Certain of these entities were created primarily to operate as a “safe haven” for credit union proceeds, while others performed little or no legitimate business despite having loan proceeds intented for Zai’s “business” ventures, according to court documents.Zai engaged in a scheme to defraud the credit union by, among other things, submitting loan documents for and receiving loan proceeds on behalf of companies that ceased operations. He continued to seek and obtain loan proceeds in the name of non-operating entities even after he directed that no loan payments be made to the credit union. This scheme to defraud the credit union resulted in an approximately $13.7 million loss, according to court documents.
Zai submitted numerous false loan documents to the credit union between March 2008 and July 2009 in order to influence the credit union’s decision to approve loans to the companies he controlled.
Zai gave Raguz numerous cash payments, usually in the form of $100 bills concealed in envelopes and hand-delivered to Raguz at the credit union’s offices, and totaling more than approximately $5,000. The payments were made to both induce Raguz to approve additional fraudulent loan applications and to reward Raguz for having previously approved false loan applications, according to court documents.This case is being prosecuted by Assistant U.S. Attorney Bridget M. Brennan following an investigation by the Cleveland office of the Federal Bureau of Investigation and the Internal Revenue Service, Criminal Investigation Division.
Buckingham Man Sentenced to 36 Months in Prison for Marijuana Charge from June 2000Read the Press Release
NORFOLK, Va. – James Benjiman Baynor, Jr., 61, of Buckingham, Va., was sentenced today to 36months in prison, followed by three years of supervised release, for possession with the intent to distribute marijuana. The conviction is based on Baynor’s indictment in June 2000.
Neil H. MacBride, United States Attorney for the Eastern District of Virginia; Robert Brisolari, Acting Special Agent in Charge for Drug Enforcement Administration (DEA)’s Washington Field Division; and Col. K.L. Wright, Chesapeake Chief of Police, made the announcement after sentencing by United States District Judge Rebecca Beach Smith.
Baynorpled guilty on Sept. 27, 2012. According to court documents, in June 2000, Baynor maintained a marijuana grow operation at his place of business on Queen City Road in Chesapeake, VirginiaDetectives served a search warrant and recovered 174 growing marijuana plants, 990 grams of cut marijuana, a small quantity of methamphetamine, and drug paraphernalia, including scales, hydroponic grow lights, electrical wires and numerous small film containers. Baynor fled the Tidewater area after learning of a federal indictment and was not located until July 2012, when he was arrested for driving while intoxicated in Buckingham County, Va. Initially Baynor provided the Buckingham County law enforcement officials with a false name, but their check with the National Crime Information Center (NCIC) revealed Baynor’s true identity and located the arrest warrant that had outstanding since 2000.
This case was investigated by the DEA’s Washington Field Office and the Chesapeake Police Department. Assistant United States Attorney Laura P. Tayman prosecuted the case on behalf of the United States.
A copy of this press release may be found on the website of the United States Attorney's Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.Brandon Royce Clark Sentenced to 100 Months for Possession of AmmunitionRead the Press Release
GREENEVILLE, Tenn. - Brandon Royce Clark, 23, of Morristown, Tenn., was sentenced in the U.S. District Court for the Eastern District of Tennessee at Greeneville, Honorable R. Leon Jordan, U.S. District Judge, presiding, to serve 100 months in prison for the felony offense of possession of ammunition by a previously convicted felon.
Upon his release from prison, Clark will be subject to supervised release under the supervision of the U.S. Probation Office for three years. There is no parole in the federal system.
Clark pleaded guilty in June 2012, to possessing ammunition after having been previously convicted of a felony offense. Federal law prohibits any person, previously convicted of any offense which carries a potential penalty exceeding one year of incarceration, from thereafter possessing a firearm or ammunition
Law enforcement agencies participating in the joint investigation which led to indictment and subsequent conviction of Clark included the Morristown Police Department and Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant U. S. Attorney J. Gregory Bowman represented the United States.
This case was brought as part of Project Safe Neighborhoods (PSN), a comprehensive national strategy that creates local partnerships with law enforcement agencies to effectively enforce existing gun laws. It provides more options to prosecutors, allowing them to utilize local, state, and federal laws to ensure that criminals who commit gun crimes face tough sentences. PSN gives each federal district the flexibility it needs to focus on individual challenges that a specific community faces.
Bonners Ferry Man Sentenced for Bank Fraud and Aggravated Identity TheftRead the Press Release
COEUR D'ALENE – Christopher M. Doyle, 25, of Bonners Ferry, Idaho, was sentenced today in United States District Court to 36 months in prison for bank fraud and aggravated identity theft, U.S. Attorney Wendy J. Olson announced. U.S. District Judge Edward J. Lodge also ordered Doyle to serve four years of supervised release and pay restitution of $1,163.29. He pleaded guilty to the charges on November 6, 2012.
According to the plea agreement, Doyle admitted that on April 6, 2010, while employed at Ace's Elder Care, a nursing home, he stole two checks belonging to an elderly patient residing in the facility. Both checks were drawn on the victim’s bank account. Doyle admitted that he forged the victim’s name on the signature line and made it payable to his girlfriend in the amount of $500. Doyle then deposited the check into his girlfriend's bank account using an ATM. According to the plea agreement, Doyle’s image was captured showing him depositing the check at the ATM. On April 22, 2010, during an interview with a U.S. Postal Inspector, Doyle admitted that he stole the victim’s checks while working at the nursing home and deposited them into his girlfriend's bank account.
The case was investigated by the U.S. Postal Inspection Service.
Alabama Woman Pleads Guilty in A Stolen Identity Refund Fraud SchemeRead the Press Release
Montgomery, Alabama - Larreka Jackson pleaded guilty yesterday to her role in a multi-million dollar conspiracy to use stolen identities to obtain tax refunds, announced George L. Beck, U.S. Attorney for the Middle District of Alabama.
On August 15, 2012, a federal grand jury in Montgomery, Alabama, returned a 25-count indictment charging Larreka Jackson for conspiring to file false tax returns using stolen identities, filing false claims, wire fraud and aggravated identity theft. According to the indictment, Jackson operated a tax preparation business called It’s Tax Time in Montgomery, Ala. Jackson used It’s Tax Time as a front to file false tax returns using stolen identities. Jackson unlawfully obtained the names and Social Security numbers of actual persons and filed false tax returns using those names. Jackson directed the fraudulent tax refund to bank accounts controlled by her and her co-conspirators.
The case was investigated by special agents of IRS - Criminal Investigation. Trial Attorneys Jason H. Poole and Michael Boteler of the Justice Department’s Tax Division and Assistant U.S. Attorney Todd Brown are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found at justice.gov/tax.
PRESS CONTACT: Clark Morris
Email: [email protected]
Telephone: (334) 551-1755
Fax: (334) 223-7617Acadiana Outreach Case Manager Pleads Guilty to Involvement in OWI Bribery SchemeRead the Press Release
LAFAYETTE, La.: United States Attorney Stephanie A. Finley announced today that former Acadiana Outreach Center case manager, Elaine Crump, 59, of Lafayette, pleaded guilty to a one-count Bill of Information charging her with Misprision of a Felony, that is, failure to report a bribery scheme.
This plea is related to the bribery investigation in which individuals within the 15th Judicial District Attorney’s Office accepted bribes in return for their participation in the facilitation of “immediate 894 pleas.”
The Louisiana Code of Criminal Procedure Article 894 provides a procedure by which a person can initially plead guilty to a crime with the understanding that the conviction will be set aside if the person successfully completes certain requirements imposed during a probationary period, including community service.
Crump made the following admissions in her factual stipulations entered during the guilty plea hearings in open court before Magistrate Judge Patrick J. Hanna today: In September of 2007, Crump began working at Acadiana Outreach as an intake specialist. In 2009, she was promoted to the position of case manager. In early 2010, Crump was approached by a former Acadiana Outreach case manager who she had worked with from September of 2007 to October of 2009. The case manager confessed to Crump that she had been creating false Acadiana Outreach community service certificates while employed as a case manager. The certificates purported to confirm that individuals had completed court-mandated community service when, in fact, they had not done so. Because she was no longer employed by Acadiana Outreach, the former case manager asked Crump to assist her with continuing the fraud.
The former case manager proposed to Crump that she, the former case manager, would continue preparing fraudulent Acadiana Outreach certificates on official letterhead, and in exchange for payments, Crump would allow her, the former case manager, to forge Crump’s signature on the fraudulent certificates. Crump agreed to the former case manager’s proposal, even though she understood that the certificates would falsely certify that the listed individual had completed the mandated community service, and that the certificates would be filed in the court record of the 15 Judicial District criminal th
proceedings. Thereafter, Crump began receiving regular payments from the former case manager ranging from $25 to $100 in cash. Crump understood that the former case manager was being paid by another individual who was obtaining the false certificates from the former case manager and causing them to be filed into the court record.In an effort to avoid detection, the former case manager would provide Crump with the names of the individuals for whom the former case manager had prepared false certificates and the number of completed community service hours reflected on the fraudulent certificates. This enabled Crump to falsely verify the accuracy of the certificates if questioned by employees of Acadiana Outreach or courthouse staff.
In September of 2011, shortly after Crump was laid off from Acadiana Outreach, the former case manager proposed to Crump that she, the former case manager, continue creating additional fraudulent certificates and forging Crump’s name on them, but backdating the documents to a period in which Crump was employed by Acadiana Outreach. Crump agreed and continued to receive payments from the former case worker.
At sentencing, Crump faces a term of imprisonment of up to three years, a fine of up to $250,000, or both, and a term of supervised release of not more than three years, following confinement.
“Those involved in this bribery scheme have put their own interests above that of the criminal justice system,” Finley said. “Crump’s work at the Outreach Center was an important part of the 894 process and was designed to help people and assist in protecting the public, not to help facilitate Crump’s greed. My office and the FBI will continue to investigate and prosecute corruption in the Western District of Louisiana.”
The FBI is investigating the case. Assistant U.S. Attorney John Luke Walker and Assistant U.S. Attorney Richard Willis are prosecuting the case.
Monday 4 February 2013
Wood County Man Sentenced to Prison Time for Violating Federal Sex Offender Registration LawRead the Press Release
HUNTINGTON, W.Va. – U.S. Attorney Booth Goodwin today announced that a Wood County man was sentenced to a year and a half in federal prison followed by 15 years of supervised release for failing to update his sex offender registration under the Sex Offender Registration and Notification Act. Randall K. Taylor, 48, Rockport, Wood County, W.Va., previously pleaded guilty in October 2012.
On February 8, 1991, Taylor was convicted in the Court of Common Pleas, Franklin County, Ohio of gross sexual imposition with specification. As a result of his felony conviction, Taylor was required to register as a sex offender. On June 22, 2011, Taylor registered as a sex offender in the state of Ohio.
An investigation conducted by the United States Marshals Service in the Southern District of West Virginia revealed that Taylor traveled in interstate commerce to Rockport, Wood County, West Virginia, where he resided from September 2011 through May 17, 2012. Taylor admitted that subsequent to his travel to West Virginia, he was required to update his sex offender registration under the Sex Offender Registration and Notification Act. The investigation further revealed that Taylor failed to update his sex offender registration as required by law.The United States Marshals Service and the West Virginia State Police conducted the investigation. Assistant United States Attorney Lisa Johnston handled the prosecution. The sentence was imposed by United States District Chief Judge Robert C. Chambers.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/usao/wvs/PSCpage.html. For more information about internet safety education, please visit www.usdoj.gov/psc and follow the link named “Resources.”
Woman Sentenced for Trafficking Cocaine in N. IdahoRead the Press Release
COEUR D'ALENE – Barbara Jeanne Willoughby, 23, of Paramount, California, was sentenced today in United States District Court in Coeur d’Alene, to 18 months in prison for conspiracy to possess with intent to distribute cocaine, U.S. Attorney Wendy J. Olson announced. U.S. District Judge Edward J. Lodge also ordered Willoughby to serve three years of supervised release. She pleaded guilty to the charge on June 18, 2012.
Willoughby admitted in court that on March 18, 2012, she conspired with co-defendant Hector Rivera to distribute 500 grams or more of cocaine. According to court documents, Willoughby drove the rental vehicle from California to Idaho because Rivera’s license was suspended. Law enforcement stopped the vehicle because it had no front license plates. During this initial contact, law enforcement became suspicious of Willoughby and Rivera’s behavior. A search of the vehicle discovered cocaine in a backpack in the cab of the truck.
Rivera, 35, also of Paramount, California, pleaded guilty on November 5, 2012, to one count of conspiracy to possess with intent to distribute cocaine. Sentencing is set for April 1. He faces a minimum term of five years in prison, a maximum fine of $5 million, and at least five years of supervised release.
The case was investigated by the Bonners Ferry Police Department, Idaho State Police, U.S. Border Patrol, and the North Idaho Violent Crimes Task Force (NIVCTF). NIVCTF members include the Federal Bureau of Investigation, the Idaho State Police, Kootenai County Sheriff’s Office, Shoshone County Sheriff’s Office, Bonner County Sheriff’s Office, Coeur d’Alene Police Department, Post Falls Police Department, and the Coeur d’Alene Tribal Police Department. The NIVCTF investigates a myriad of violent crimes, including armed robbery, kidnapping, felonious assault and drug trafficking.
Winner Man Arraigned on Firearms ChargesRead the Press Release
United States Attorney Brendan V. Johnson announced that a Winner, South Dakota man has been indicted by a federal grand jury for Prohibited Person in Possession of a Firearm and Possession of Firearm with Obliterated Serial Number.
Joshua Felix, age 38, was indicted by a federal grand jury on January 16, 2013. He appeared before US Magistrate Judge Mark A. Moreno on January 31, 2013 and pled not guilty to the indictment. The maximum penalty upon conviction is 5 years of custody; a $250,000 fine, or both; 3 years of supervised release; a $100 special assessment; and restitution.
The charges are merely accusations, and Felix is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Rosebud Sioux Tribe Law Enforcement Division. Assistant U.S. Attorney Tim Maher is prosecuting the case. Felix was released on bond pending trial. No trial date has been set.
Wilmington Man Sentenced for Drug TraffickingRead the Press Release
Wilmington - United States Attorney Thomas G. Walker announced that in federal court on January 31, 2013 Senior United States District Judge James C. Fox, sentenced DAVID CRUMMY, 50, of Wilmington, North Carolina, to 180 months imprisonment followed by 5 years supervised release.
On February 28, 2012, CRUMMY pled guilty to conspiring to possess with the intent to distribute and distributing more than 280 grams of cocaine base (crack).
On June 30, 2011, New Hanover County Sheriff’s Detectives executed a search warrant at the residence of one of CRUMMY’S co-conspirators in Wilmington North Carolina. During the search, officers found approximately 249 grams of crack cocaine. CRUMMY and several conspirators had been converting cocaine into crack cocaine at the time of the search warrant.During the course of the investigation it was uncovered that CRUMMY was responsible for the importation, conversion and distribution of more than 4 kilograms of cocaine base (crack) from January 2010 until the time of his arrest. CRUMMY was supplying crack cocaine in the Wilmington area.
This case was brought as a part of an Organized Crime Drug Enforcement Task Force (OCDETF) Operation entitled WoofPack, investigating importers and multi-level distributors of heroin, cocaine, crack cocaine and gang activity associated with this distribution. So far 29 persons have been sentenced in federal court as a part of this OCDETF.
Investigation of this OCDETF case is being conducted by the Federal Bureau of Investigations (Safe Streets Task Force); the Bureau of Alcohol, Tobacco, and Firearms and Explosives; the North Carolina State Bureau of Investigations; the Wilmington Police Department; the New Hanover County Sheriff’s Office and the Greenville Police Department. Special Assistant United States Attorney Timothy Severo represents the government. Mr. Severo is a prosecutor with the New Hanover District Attorney’s Office. District Attorney Ben David has assigned him to the United States Attorney’s office to prosecute federal Organized Crime Drug Enforcement Task Force criminal matters.
Virginia Charter Fishing Boat Captain Pleads Guilty to Lacey Act ViolationRead the Press Release
William W. Lowery IV, 44, of Tappahannock, Va., pleaded guilty today to trafficking in illegally-harvested striped bass, in violation of the Lacey Act, announced Ignacia S. Moreno, Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division, and Neil H. MacBride, U.S. Attorney for the Eastern District of Virginia.
Among other things, the Lacey Act makes it unlawful for any person to import, export, transport, sell, receive, acquire or purchase any fish and wildlife taken, possessed, transported or sold in violation of any law or regulation of the United States, or to attempt to do so. Under the Lacey Act, it is a “sale” of fish or wildlife for any person, for money or other consideration, to offer or provide guiding, outfitting, or other services.
Lowery was indicted on Nov. 8, 2012, by a federal grand jury on one count each of violating the Lacey Act and Destruction of Evidence. Lowery faces a maximum penalty of one year in prison, a $100,000 fine, and one-year of supervised release. He is scheduled to be sentenced on May 9, 2013.
As part of his plea agreement, Lowery has agreed to serve 30 days in jail, pay a $5,000 fine and $1,300 in restitution to the National Oceanic and Atmospheric Administration (NOAA) for the illegally-harvested striped bass, and surrender his captain’s license for life. As part of his plea agreement, Lowery has also agreed that he will not engage in the charter fishing industry in any capacity during the term of his supervised release.
In a statement of facts filed with his plea agreement, Lowery admitted that on Jan. 15, 2010, he took a charter fishing trip into the Exclusive Economic Zone (EEZ) to fish for striped bass, knowing that it was illegal to fish for striped bass in the EEZ. When Lowery’s boat, the Anna Lynn was approached by law enforcement, Lowery attempted to flee. When the Anna Lynn was caught, law enforcement officers observed a plastic trash barrel with 13 Striped Bass floating in the water near the Anna Lynn. The trash barrel had been thrown overboard from the Anna Lynn during the pursuit, and the striped bass contained within the trash barrel had been harvested by fishermen aboard the Anna Lynn within the EEZ.
This case was investigated by the National Oceanic and Atmospheric Administration, Fisheries, Office for Law Enforcement, and the U.S. Coast Guard with assistance from the Federal Communications Commission Enforcement Bureau, Norfolk, Va. Office. Trial Attorney James B. Nelson of the Department of Justice’s Environmental Crimes Section of the Environment and Natural Resources Division and Assistant U.S. Attorney Stephen W. Haynie from the Eastern District of Virginia are prosecuting the case on behalf of the United States.
Village Market Food Centers’ Comptroller Charged with Stealing from CompanyRead the Press Release
GRAND RAPIDS, MICHIGAN – Christopher E. Pratt was charged Friday, February 1, 2013, with defrauding his former employer, Village Market Food Centers. In a one count Felony Information, the United States Attorney’s Office alleged that from 2004 until 2012 Pratt, who was Village Market’s Comptroller stole over $6,000,000 by diverting funds from Village Market Food Centers accounts to pay Pratt’s personal credit card bills. The Information alleges that Pratt used the money primarily to finance and maintain a fleet of muscle-cars. Pratt will appear in Court sometime in the next few weeks for his arraignment.If convicted, Mr. Pratt faces up to twenty years in prison, supervised release of up to three years, and other fines and penalties. This case is being investigated by the Federal Bureau of Investigation.
The charges in an information are merely accusations, and a defendant is presumed innocent until and unless proven guilty in a court of law..
END
Vice-President of Car Dealership Sentenced to 6 Years for Money Laundering and Drug Trafficking for the Gulf CartelRead the Press Release
Orlando, FL - U.S. States District Judge Roy B. Dalton, Jr. today sentenced Eladio Marroquin-Medina (31, Apopka) to 6 years in federal prison for conspiracy to possess with the intent to distribute 1,000 kilograms or more of marijuana and conspiracy to engage in money laundering. Medina was the vice-president JM2 Auto Sales, Inc. at 2636 Floral Avenue in Apopka.
Joel Torres, the president of JM2, was previously convicted by a federal jury of three counts of money laundering and eleven counts of Failure to File IRS Form 8300 (a report required for cash purchases over $10,000). Torres’ sentencing is scheduled for February 25, 2013, before United States District Judge Roy B. Dalton, Jr.
According to court documents, Medina and Torres laundered narcotics proceeds for the Gulf Cartel, at their car dealership in Apopka. The Gulf Cartel was a drug trafficking organization based out of Mexico. As payment for vehicles, Medina and Torres received money that was derived from narcotics sales. These vehicles were sent back to members of the Cartel in Texas, and were also used by local Cartel members in Florida. At one point during the money laundering conspiracy, from October 26, 2010 to November 16, 2010, one Cartel member brought more than $115,000 in cash into JM2 for the purchase of vehicles.
This case was investigated by the Internal Revenue Service Criminal Investigation, Federal Bureau of Investigation, U.S. Immigration and Customs Enforcement's Homeland Security Investigations, Drug Enforcement Administration, Bureau of Alcohol, Tobacco, Firearms and Explosives, Apopka Police Department, Orange County Sheriff's Office, and Osceola County Sheriff's Office. It was prosecuted by Assistant United States Attorneys Christopher LaForgia and Shawn Napier.
Utica Man Sentenced in Fraud CaseRead the Press Release
United States Attorney Richard S. Hartunian announced today that a Utica man has been sentenced for his role in an insurance and health care fraud scheme.
On January 31, 2013, JOSEPH DELLERBA, age 66, was sentenced by United States District Court Judge Norman A. Mordue in Syracuse. DELLERBA was sentenced to 30 months imprisonment and ordered to pay restitution in an amount exceeding $1.4 million, with $102,111 due immediately. DELLERBA will also serve three years of supervision following his release from incarceration.
DELLERBA pled guilty on September 17, 2012 to conspiracy to commit mail and health care fraud. DELLERBA admitted that in or about 2005 he agreed with other conspirators to participate in an insurance and health care fraud scheme. The scheme involved a staged motor vehicle accident on Harbor Lock Road in Utica on March 20, 2006. On that date, DELLERBA claimed to have been injured while a passenger in a Ford van which was struck by a Ryder truck driven by a coconspirator. In fact, the collision was staged and DELLERBA was not a passenger at the time of the impact. The defendant claimed to have been injured as a result of the accident and submitted false insurance claims, including claims for personal injuries, no fault benefits and disability benefits. DELLERBA sought medical treatment for non-existent injuries or injuries that were not related to the collision. The bills for this medical care were submitted to and paid by a health care benefit program, specifically an insurance policy issued by Progressive Insurance Company. DELLERBA also commenced a civil lawsuit seeking damages for personal injuries sustained in the accident. He received a payment of $682,297.21 to settle that suit.
The case was investigated by the Federal Bureau of Investigation and the New York State Insurance Fraud’s Bureau. The case was prosecuted by Assistant United States Attorney Edward R. Broton.
Two Patient Recruiters of Miami Home Health Company Plead Guilty in $20 Million Health Care Fraud SchemeRead the Press Release
Two patient recruiters for a Miami home health care company have pleaded guilty for their participation in a $20 million home health Medicare fraud scheme. The guilty pleas were announced today by U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; Michael B. Steinbach, Acting Special Agent-in-Charge of the FBI’s Miami Field Office; and Special Agent-in-Charge Christopher Dennis of the HHS Office of Inspector General (HHS-OIG), Office of Investigations Miami Office.
Manuel Lozano, 65, and Vladimir Jimenez, 43, pleaded guilty today and Jan. 22, 2013, respectively, to one count each of conspiracy to receive health care kickbacks. They entered their guilty pleas before U.S. District Judge Joan A. Lenard in Miami federal court.
According to the court documents, both Lozano and Jimenez were patient recruiters who worked for Serendipity Home Health, a Miami home health care agency that claimed to provide home health and therapy services to Medicare beneficiaries.
The pair admitted that from approximately April 2007 through March 2009, Lozano and Jimenez would recruit patients, for which Serendipity could bill Medicare, in exchange for kickbacks and bribes they would solicit from Serendipity’s owners and operators. Medicare was billed for home health care and therapy services on behalf of these beneficiaries that were medically unnecessary and/or not provided.
Lozano and Jimenez each face a maximum potential penalty on the conspiracy charge of five years in prison and a $250,000 fine, or twice the gain or loss from the offense. Sentencing is scheduled for April 15 and April 1, 2013, for the respective defendants.
In a related case, on June 21, 2012, Serendipity owners and operators Ariel Rodriguez and Reynaldo Navarro were sentenced to 73 and 74 months in prison, respectively, following guilty pleas in March 2012 to one count each of conspiracy to commit health care fraud. According to court documents, from approximately January 2006 through March 2009, Serendipity submitted approximately $20 million in claims for home health services that were not medically necessary and/or not provided. Medicare actually paid approximately $14 million for these fraudulent claims.
This case is being prosecuted by Senior Trial Attorney Joseph S. Beemsterboer of the Criminal Division’s Fraud Section. The case was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.
Since their inception in March 2007, strike force operations in nine locations have charged more than 1,480 defendants who collectively have falsely billed the Medicare program for more than $4.8 billion. In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
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.
Three Sentenced for Trafficking Meth in Southwest IdahoRead the Press Release
Ten Co-Defendants Await Sentencing on Related Drug Charges
BOISE – U.S. Attorney Wendy J. Olson announced today that three members of a Southwest Idaho drug trafficking organization were sentenced to serve federal prison sentences for conspiracy to distribute methamphetamine. The defendants appeared before Chief U.S. District Judge B. Lynn Winmill at the federal courthouse in Boise.
Jacob James Clevenger, 31, of Weiser, Idaho, was sentenced to 188 months; Mario Martinez, Jr., 55, of Greenleaf, Idaho, to 57 months; and Fabian Jordano Beltran, 23, also of Weiser, to 36 months in prison. The defendants were each ordered to serve five years of supervised release after their prison term. Clevenger and Martinez pleaded guilty in October 2012; Beltran pleaded guilty in July.
According to court documents, from early November 2011 through May 16, 2012, the defendants conspired with others, including co-defendants, to distribute a total of approximately 11 pounds of methamphetamine in Canyon, Payette and Washington counties in Idaho.
Seven co-defendants pleaded guilty last year to related drug trafficking charges and are currently awaiting sentencing. Patric Campbell and Benjamine L. Vertner are set for sentencing on February 25; Amber Hites on February 26; Kristopher Hensley, Johnathan E. Chapman, and Johnny A. Tambunga on February 27; and Dawson Lee Moore on March 27.
On January 22, three co-defendants were convicted by a federal jury of conspiracy to distribute methamphetamine. Jesus Guadalupe Sanchez a/k/a Jose Salazar, a Mexican national, Michael Dennis Morris, and Jim Allen Loveland are scheduled to be sentenced on April 8. Sanchez was also convicted of possession of methamphetamine with intent to distribute.
The case was investigated by the Idaho State Police.
Three Nicholas County Residents Sentenced to Prison for Methamphetamine Manufacturing ConspiracyRead the Press Release
CHARLESTON, W.Va. – U.S. Attorney Booth Goodwin today announced that three Nicholas County residents were sentenced to federal prison for conspiracy to manufacture methamphetamine. Felicia Bess, 23, of Summersville, Nicholas County, W.Va., was sentenced today to three years in prison. Co-defendant Roy Spinks, Jr., also known as “Brat” 39, of Craigsville, Nicholas County, W.Va., was sentenced on Feb.1st to six years in prison. A third co-defendant, Bratten Smith, 28, of Richwood, Nicholas County, W.Va., was also sentenced on Feb.1st to two years in prison. Spinks admitted that from September 2010 until June 2011, he manufactured methamphetamine using a technique known as the “shake and bake” method. Spinks further admitted that he manufactured the methamphetamine at several different residences located in and around Nicholas County. Co-defendant Bess admitted that from September until June 2011, she cooked methamphetamine using the “shake and bake” method and assisted other individuals, including co-defendant Spinks.
Bratten Smith admitted that from at least February 2011 until May 1, 2011, he assisted co-defendants Spinks and Bess in manufacturing methamphetamine at a residence in Nicholas County, W.Va. Smith further admitted that during the scheme, he supplied pseudoephedrine and other ingredients used to manufacture methamphetamine. In exchange for the meth-making materials, Smith admitted that he received methamphetamine for his personal use.
The U.S. Forestry Service, the Central West Virginia Drug Task Force, the West Virginia State Police, the Nicholas County Sheriff’s Department and the Richwood Police Department conducted the investigation. Assistant United States Attorney John Frail handled the prosecutions. The sentences were imposed by United States District Judge John T. Copenhaver, Jr.
The Executive Office for Immigration Review Swears in New Assistant Chief Immigration JudgeRead the Press Release
FALLS CHURCH, Va. – The Executive Office for Immigration Review (EOIR) today announced the investiture of a new assistant chief immigration judge. Chief Immigration Judge Brian M. O’Leary presided over the investiture during a ceremony held at EOIR’s headquarters on Feb. 1, 2013.
After a thorough application process, Attorney General Eric Holder appointed Abigail M. Price to her new position. “We are pleased to welcome Ms. Price as our newest assistant chief immigration judge,” said O’Leary. “She will be responsible for the continuing development and implementation of the Office of the Chief Immigration Judge’s emphasis on providing immigration proceedings for all respondents that are fundamentally fair and timely. We are proud to be able to place in this important role someone with Judge Price’s strong background in working with vulnerable populations.”
Biographical information follows.
Abigail M. Price, Assistant Chief Immigration Judge
Abigail M. Price was appointed as an assistant chief immigration judge in January 2013, with responsibility for continuing the development and implementation of EOIR policy concerning vulnerable populations. She received a bachelor of arts degree in 1982 from Wheaton College, in Norton, Mass.; a juris doctorate in 1988 from Case Western Reserve University School of Law in Cleveland, Ohio; and a master of laws degree in 1989 from New York University School of Law. From April 2012 to December 2012, Judge Price served as a consultant to Catholic Relief Services in Baltimore, Md. From April 2011 to December 2011, she was a consultant for the International Rescue Committee (IRC) in New York. From April 2009 to April 2011, Judge Price served as deputy and national legal services director for Kids in Need of Defense in Washington, D.C. From 2001 to 2009, she worked for the IRC, as national director of immigration programs, and as global advisor on the prevention of exploitation. From 2000 to 2001, Judge Price was a resettlement expert for the Office of the United Nations High Commissioner for Refugees, Department of International Protection, Resettlement Section, in Geneva, Switzerland. From 1996 to 2000, she served as immigration policy advisor for the National Catholic Conference of Bishops/United States Catholic Conference, Migration and Refugee Services, in Washington, D.C. From 1994 to 1996, Judge Price served as the Washington representative for Church World Service, Immigration and Refugee Program, National Council of Churches USA, in New York. From 1993 to 1994, she was supervising attorney for Haitian Legal Services. From June 1992 to December 1992, Judge Price served as supervising attorney for the Haitian Refugee Program for Catholic Legal Immigration Network, Inc. From 1990 to 1992, she served as supervising attorney for the Diocese of Brooklyn, Catholic Migration Office, in New York. Judge Price is a member of the Connecticut Bar.
- EOIR -
The Executive Office for Immigration Review (EOIR) is an agency within the Department of Justice. Under delegated authority from the Attorney General, immigration judges and the Board of Immigration Appeals interpret and adjudicate immigration cases according to United States immigration laws. EOIR’s immigration judges conduct administrative court proceedings in immigration courts located throughout the nation. They determine whether foreign-born individuals—whom the Department of Homeland Security charges with violating immigration law—should be ordered removed from the United States or should be granted relief from removal and be permitted to remain in this country. The Board of Immigration Appeals primarily reviews appeals of decisions by immigration judges. EOIR’s Office of the Chief Administrative Hearing Officer adjudicates immigration-related employment cases. EOIR is committed to ensuring fairness in all of the cases it adjudicates.
Executive Office for Immigration ReviewTappahannock Charter Fishing Boat Captain Pleads Guilty to Lacey Act ViolationRead the Press Release
NORFOLK, Va. – William W. Lowery IV, 44, of Tappahannock, Va., pleaded guilty today to trafficking in illegally-harvested striped bass, in violation of the Lacey Act, announced Neil H. MacBride, U.S. Attorney for the Eastern District of Virginia, and Ignacia S. Moreno, Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division.
Among other things, the Lacey Act makes it unlawful for any person to import, export, transport, sell, receive, acquire or purchase any fish and wildlife taken, possessed, transported or sold in violation of any law or regulation of the United States, or to attempt to do so. Under the Lacey Act, it is a “sale” of fish or wildlife for any person, for money or other consideration, to offer or provide guiding, outfitting, or other services.
Lowery was indicted on Nov. 8, 2012, by a federal grand jury on one count each of violating the Lacey Act and Destruction of Evidence. Lowery faces a maximum penalty of one year in prison, a $100,000 fine, and one-year of supervised release. He is scheduled to be sentenced on May 9, 2013.
As part of his plea agreement, Lowery has agreed to serve 30 days in jail, pay a $5,000 fine and $1,300 in restitution to the National Oceanic and Atmospheric Administration (NOAA) for the illegally-harvested striped bass, and surrender his captain’s license for life. As part of his plea agreement, Lowery has also agreed that he will not engage in the charter fishing industry in any capacity during the term of his supervised release.
In a statement of facts filed with his plea agreement, Lowery admitted that on Jan. 15, 2010, he took a charter fishing trip into the Exclusive Economic Zone (EEZ) to fish for striped bass, knowing that it was illegal to fish for striped bass in the EEZ. When Lowery’s boat, the Anna Lynn was approached by law enforcement, Lowery attempted to flee. When the Anna Lynn was caught, law enforcement officers observed a plastic trash barrel with 13 Striped Bass floating in the water near the Anna Lynn. The trash barrel had been thrown overboard from the Anna Lynn during the pursuit, and the striped bass contained within the trash barrel had been harvested by fishermen aboard the Anna Lynn within the EEZ.
This case was investigated by the National Oceanic and Atmospheric Administration, Fisheries, Office for Law Enforcement, and the U.S. Coast Guard with assistance from the Federal Communications Commission Enforcement Bureau, Norfolk, Va. Office. Trial Attorney James B. Nelson of the Department of Justice’s Environmental Crimes Section of the Environment and Natural Resources Division and Assistant U.S. Attorney Stephen W. Haynie from the Eastern District of Virginia are prosecuting the case on behalf of the United States.Syracuse Area Physician Required to Pay Civil Penalty for Violations of the Federal Controlled Substances ActRead the Press Release
Onondaga County physician settles for $60,000.00
(Syracuse, New York)- United States Attorney Richard S. Hartunian announced that in December of 2012, his office reached a civil settlement with Dr. William Beals, a Liverpool, New York physician, for $60,000.00. The settlement agreement provided for payments over time and Dr. Beals made his final payment to the United States on January 11, 2013. As part of the settlement agreement, Dr. Beals also voluntarily surrendered his Drug Enforcement Administration number, which enables physicians to prescribe controlled substances. The settlement was in connection with violations of the Controlled Substances Act.
On February 1, 2012, DEA investigators conducted an inspection of Dr. Beals’ office and subsequently questioned him about controlled substances he purchased between March 8, 2010 and January 25, 2012. According to the complaint filed in connection with the settlement, Dr. Beals had ordered approximately 5,000 Hydrocodone pills, a Schedule III controlled substance, and 1,100 Zolpidem pills, a Schedule IV controlled substance during this time period. Dr. Beals, however, not only was unable to provide purchase, dispensing, or destruction records for these drugs, he could not account for their whereabouts in any way.
The Controlled Substances Act was enacted to ensure that controlled substances are properly regulated and to help prevent drug diversion. To that end, practitioners who dispense controlled substances are required to properly maintain complete and accurate inventories and records of all controlled substances that they purchase, receive, dispense, or destroy.
Prescription drug abuse is a significant nationwide issue. According to U.S. Attorney Richard S. Hartunian, his office takes drug diversion very seriously and will aggressively pursue those who violate the Controlled Substances Act, especially if they are professionals in the medical field. “It simply is unacceptable for medical professionals to act irresponsibly when handling controlled substances. The potential for these substances to end up in the wrong hands is something we are not willing to risk, and we will take whatever steps are necessary to prevent this from happening.”
Suburban Man Sentenced to Five Years in Federal Prison for Receiving Child PornographyRead the Press Release
CHICAGO — A north suburban man was sentenced today to five years in federal prison for amassing a staggering collection of child pornography over a decade. The defendant, DANIEL BERMAN, 49, of Northbrook and formerly of Buffalo Grove, pleaded guilty last July to receiving child pornography, admitting that he had collected more than 100,000 illicit images.
Berman was formerly a police dispatcher in Northbrook and a paramedic in Northfield, however, his public safety employment played no role in the offense. There were no allegations or indications of any sexual contact with minors.
Berman was also fined $85,000 and placed on supervised release for 15 years following his prison term by U.S. District Judge Matthew Kennelly. Berman was ordered to surrender on May 14 and must serve at least 85 percent of his sentence before he is eligible for release. There is no parole in the federal prison system.
“The children depicted in these images experienced immeasurable harm,” Judge Kennelly said, adding “it’s anything other than a victimless crime.”
According to court documents, Berman was charged after U.S. Immigration and Customs Enforcement’s Homeland Security Investigations agents received information from Italian authorities that a website containing child pornography had been accessed by a computer with an internet address located in Buffalo Grove. Agents executed a search warrant at Berman’s Buffalo Grove home in May 2011 and seized computer equipment, including three external hard drives, 14 DVDs containing child pornography and 15 binders containing 611 categorized images of child pornography. The computer hard drives and DVDs were found to contain virtually countless illicit images and videos. Authorities tabulated approximately 100,000 images and videos with known victims identified by the National Center for Missing and Exploited Children.
In addition to the sheer volume of child pornography that Berman accumulated between 2001 and 2011, Assistant U.S. Attorney Andrianna D. Kastanek noted that he maintained his collection in a systematic and organized manner over a lengthy period of time.
In pleading guilty, Berman also admitted that he used peer-to-peer file sharing programs to acquire child pornography from other Internet users, who also had access to images and videos of child pornography stored in shared files on his computer.
The sentence was announced today by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Gary Hartwig, Special Agent-in-Charge of HSI in Chicago.
Somerset County Man Sentenced for Evading Income TaxesRead the Press Release
JOHNSTOWN, Pa. - A resident of Fort Hill, Pa., has been sentenced in federal court to six months in prison to be followed by six months home detention with electronic monitoring and three years supervised release on his conviction of income tax evasion, United States Attorney David J. Hickton announced today.
United States District Judge Kim R. Gibson imposed the sentence on Leonardus A. Otto.
According to information presented to the court, for the calendar years 2005, 2006 and 2007 Otto filed income tax returns showing a total taxable income of $70,844 with total tax due of $26,467, when in actuality his total taxable income was $488,165 with total tax due of $147,259.
Assistant United States Attorney John J. Valkovci, Jr., prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Internal Revenue Service for the investigation leading to the successful prosecution of Otto.
Six Sentenced to Prison in Florida for Federal Tax CrimesRead the Press Release
Six individuals have been sentenced to federal prison by U.S. District Judge William P. Dimitrouleas for filing false claims for tax refunds, announced Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division, Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida, and Jose A. Gonzalez, Special Agent in Charge, IRS-Criminal Investigation (IRS-CI), Miami Office.
On Jan. 28, 2013, Penny Jones of Rigby, Idaho, was sentenced to 144 months in prison. Jones had pleaded guilty, without the benefit of a plea agreement, to conspiracy to defraud the United States and 41 counts of filing false claims for tax returns. On that same day, John Michael Smith Jr. of Hidden Hills, Calif., was sentenced to 36 months in prison. Smith pleaded guilty to filing a false claim for a tax refund. According to court documents related to the plea, Smith had sought over $208,000, an amount to which he knew he was not entitled.
Defendants Michael D. Beiter, Jr. formerly of Coral Springs, Fla., David Clum, Jr., of Whites Creek, Tenn., Dale Peters, of San Mateo, Calif., and Christopher Marrero, of Davie, Fla., were all sentenced on Feb. 1, 2013. All four were convicted, following a four-week trial in October 2012, of conspiracy to defraud the United States with respect to claims and multiple counts of filing false claims for tax refunds.
Beiter was sentenced to 300 months in prison, which is to be served consecutively to a ten year sentence he is currently serving for promoting a separate tax fraud scheme. Clum was sentenced to 293 months in prison. Peters was sentenced to 144 months in prison. Marrero was sentenced to 180 months in prison.
“Taxpayers should be wary of deals that appear too good to be true,” said Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division. “Instigators of these tax scams take money from these taxpayers, who may end up paying substantial penalties to the IRS. Sentences like the ones handed down in this case show that peddlers of these bogus tax schemes face significant jail time for their crimes.”
U.S. Attorney Wifredo A. Ferrer stated, “Tax refund scams are the latest crime du jour. For a $750 fee, complicit clients across the United States expected the defendants to submit false returns to the IRS on their behalf, claiming exorbitant fraudulent refunds, to be shared with the defendants. Instead of receiving enormous refunds, however, the defendants were sentenced to substantial jail time and the clients received substantial civil penalties and were subject to aggressive collection efforts by the IRS. As this case demonstrates, we will continue to crack down on fraudsters and will not let them line their pockets with our tax dollars.”
“The defendants who perpetrated this scheme systematically defrauded the government and the taxpaying public,” said Richard Weber, Chief IRS Criminal Investigation. “At the IRS, protecting taxpayer money is a matter we take very seriously. IRS Criminal Investigation will continue to vigorously pursue those who unjustly enrich themselves by preparing false claims for refunds.”
The evidence at trial showed that Jones, Beiter, Clum, Peters and others operated a scheme to defraud the IRS out of tax refunds. The false return scheme operated under the name PMDD Services LLC, and, later, Forever Grace LLC. The false return scheme was nationwide, causing the filing of tax returns for at least 180 clients from 30 different states, requesting more than $160 million in fraudulent tax refunds. The defendants and clients of the scheme collectively filed more than 380 tax returns, mostly from tax year 2008 but also for other tax years. The tax returns falsely reported the amount of their personal debt obligations as both income and as federal tax withholding. The fictitious income and withholding was reported to the IRS on Forms 1099-OID.
According to the evidence at trial, the tax returns prepared as part of the scheme fraudulently claimed refunds in amounts specifically intended to allow the clients to pay off their mortgages, credit cards, student loans, and other personal debts. Clients paid $750 to have the defendants prepare a tax return reporting this fictitious “OID” income, and clients agreed to share 10 percent of their tax refund with defendants. The trial evidence also showed that defendant Beiter and Clum held seminars in Florida and Tennessee, respectively, in which they recruited potential clients.
The evidence at trial further established that most clients of the scheme did not receive the enormous refunds requested, but instead received substantial civil penalties. Those who did receive refunds were typically subject to collection efforts by the IRS.
In addition, the evidence showed that defendants Beiter, Clum and Marrero recruited clients for the scheme. Clum also filed false “OID” tax returns himself. Peters was PMDD Services’ information technology specialist, writing software and implementing computerized procedures to automate the process of preparing the fraudulent tax returns.
Separate from the 1099-OID scheme, Marrero was convicted of filing three false tax returns at three separate IRS offices on the same day. Each return requested a refund in excess of $80,000 based on non-existing gambling income and associated tax withholding.
Previously, in a related case, a client of the scheme, Philip Butcher, formerly of Rogers, Ark., pleaded guilty to filing a false claim for a tax refund. Butcher filed two tax returns reporting his loans as OID income and tax withholding, claiming tax refunds totaling $1,456,696.
These cases were investigated by Special Agents of IRS-Criminal Investigation. Assistant U.S. Attorney Bertha Mitrani and Tax Division Trial Attorneys Jonathan Marx and Jed Silversmith prosecuted the cases.
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Complaint for Permanent Injunction and Other Relief (PDF)Six Sentenced to Prison for Federal Tax CrimesRead the Press Release
Six individuals were sentenced to federal prison last week by U.S. District Judge William P. Dimitrouleas for filing false claims for tax refunds, announced Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida, Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division, and Jose A. Gonzalez, Special Agent in Charge, IRS-Criminal Investigation (IRS-CI), Miami Office.
On January 28, 2013, Penny Jones, of Rigby, Idaho, was sentenced to 144 months in prison. Jones had pleaded guilty, without the benefit of a plea agreement, to conspiracy to defraud the United States and 41 counts of filing false claims for tax returns. On that same day, John Michael Smith, Jr., of Hidden Hills, Calif., was sentenced to 36 months in prison. Smith pleaded guilty to filing a false claim for a tax refund. According to court documents related to the plea, Smith had sought over $208,000, an amount to which he knew he was not entitled.
Defendants Michael D. Beiter, Jr., formerly of Coral Springs, Fla., David Clum, Jr., of Whites Creek, Tenn., Dale Peters, of San Mateo, Calif., and Christopher Marrero, of Davie, Fla., were all sentenced on February 1, 2013. All four were convicted, following a four-week trial in October 2012, of conspiracy to defraud the United States with respect to claims and multiple counts of filing false claims for tax refunds.
Beiter was sentenced to 300 months in prison, which is to be served consecutively to a ten year sentence he is currently serving for promoting a separate tax fraud scheme. Clum was sentenced to 293 months in prison. Peters was sentenced to 144 months in prison. Marrero was sentenced to 180 months in prison.
U.S. Attorney Wifredo A. Ferrer stated, “Tax refund scams are the latest crime du jour. For a $750 fee, complicit clients across the United States expected the defendants to submit false returns to the IRS on their behalf, claiming exorbitant fraudulent refunds, to be shared with the defendants. Instead of receiving enormous refunds, however, the defendants were sentenced to substantial jail time and the clients received substantial civil penalties and were subject to aggressive collection efforts by the IRS. As this case demonstrates, we will continue to crack down on fraudsters and will not let them line their pockets with our tax dollars.”
“Taxpayers should be wary of deals that appear too good to be true,” said Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division. “Instigators of these tax scams take money from these taxpayers, who may end up paying substantial penalties to the IRS. Sentences like the ones handed down in this case show that peddlers of these bogus tax schemes face significant jail time for their crimes.”
“The defendants who perpetrated this scheme systematically defrauded the government and the taxpaying public,” said Richard Weber, Chief IRS Criminal Investigation. “At the IRS, protecting taxpayer money is a matter we take very seriously. IRS Criminal Investigation will continue to vigorously pursue those who unjustly enrich themselves by preparing false claims for refunds.”
The evidence at trial showed that Jones, Beiter, Clum, Peters, and others operated a scheme to defraud the IRS out of tax refunds. The false return scheme operated under the name PMDD Services LLC, and, later, Forever Grace LLC. The false return scheme was nationwide, causing the filing of tax returns for at least 180 clients from 30 different states, requesting more than $160 million in fraudulent tax refunds. The defendants and clients of the scheme collectively filed more than 380 tax returns, mostly from tax year 2008 but also for other tax years. The tax returns falsely reported the amount of their personal debt obligations as both income and as federal tax withholding. The fictitious income and withholding was reported to the IRS on Forms 1099-OID.
According to the evidence at trial, the tax returns prepared as part of the scheme fraudulently claimed refunds in amounts specifically intended to allow the clients to pay off their mortgages, credit cards, student loans, and other personal debts. Clients paid $750 to have the defendants prepare a tax return reporting this fictitious “OID” income, and clients agreed to share 10 percent of their tax refund with defendants. The trial evidence also showed that defendant Beiter and Clum held seminars in Florida and Tennessee, respectively, in which they recruited potential clients.
The evidence at trial further established that most clients of the scheme did not receive the enormous refunds requested, but instead received substantial civil penalties. Those who did receive refunds were typically subject to collection efforts by the IRS.
In addition, the evidence showed that defendants Beiter, Clum, and Marrero recruited clients for the scheme. Clum also filed false “OID” tax returns himself. Peters was PMDD Services’ information technology specialist, writing software and implementing computerized procedures to automate the process of preparing the fraudulent tax returns.
Separate from the 1099-OID scheme, Marrero was convicted of filing three false tax returns at three separate IRS offices on the same day. Each return requested a refund in excess of $80,000 based on non-existing gambling income and associated tax withholding.
Previously, in a related case, a client of the scheme, Philip Butcher, formerly of Rogers, Ark., pleaded guilty to filing a false claim for a tax refund. Butcher filed two tax returns reporting his loans as OID income and tax withholding, claiming tax refunds totaling $1,456,696.
These cases were investigated by Special Agents of IRS-Criminal Investigation. Assistant U.S. Attorney Bertha Mitrani and Tax Division Trial Attorneys Jonathan Marx and Jed Silversmith prosecuted the cases.
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.
Recipient of Ponzi Schemer’s Funds Sentenced to 57 Months in Custody for Evading More Than $1 Million in Income TaxesRead the Press Release
United States Attorney Laura E. Duffy announced that Donald E. Lopez was sentenced today in federal court in San Diego to serve 57 months in custody for tax evasion stemming from his willful failure to pay income taxes the more than $3.94 million in funds he received from convicted Ponzi-scheme operator Matthew La Madrid. U.S. District Judge Larry Alan Burns ordered Lopez immediately into custody, and directed him to pay $1,345,693.26 in restitution to the Internal Revenue Service for his crimes. Lopez had previously pled guilty to a one-count felony information charging him with willfully evaded income taxes on this $3.94 million in revenue, his concealment of his use of the money, and his false representations in court proceedings in San Diego in order to conceal the fact that he had received and spent the money for his own use and benefit.
As outlined in Lopez’s plea agreement and other court records, the funds Lopez concealed were part of a $10 million transfer La Madrid had made to Lopez’s company in November 2007, as part of La Madrid’s fraudulent investment, real estate, and mortgage fraud schemes. The money was identified in other proceedings as investor funds from La Madrid’s and related fraud schemes. La Madrid has already been sentenced to serve ten years in prison for orchestrating these schemes, which included sending these funds to Lopez without his client’s knowledge or consent.
In connection with his plea to tax evasion, Lopez admitted that, after taking these funds, he did not file tax returns for 2007 and 2008, and knowingly and willfully failed to report the funds as income for those years. As a result, the IRS lost more than $1.3 million in tax revenue.
Previously, on November 13, 2009, Lopez had pled guilty to a federal obstruction of justice charge based on his false representations in a civil case filed in the United States District Court for the Southern District of California, seeking to recover La Madrid investor funds. Lopez admitted in that proceeding that he sought to conceal from the Court and the IRS the true location, condition, and disposition of the $10 million wired by La Madrid to Lopez’s company in November 2007. Lopez had served a 15 month sentence on the obstruction of justice conviction before being charged last year with tax evasion.
DEFENDANT Case Number: 12CR4033-LAB Donald E. Lopez SUMMARY OF CHARGEIncome Tax Evasion, in violation of Title 26, United States Code, Section 7201
INVESTIGATING AGENCYInternal Revenue Service - Criminal Investigation