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Friday 1 February 2013
Head of New Haven Narcotics Trafficking Ring Pleads GuiltyRead the Press Release
February 1, 2013David B. Fein, United States Attorney for the District of Connecticut, announced that JOSEPH JACKSON, also known as “Mighty” and “M.I.,” 37, of New Haven, pleaded guilty today before United States Magistrate Judge Joan G. Margolis in New Haven to one count of conspiracy to possess with intent to distribute, and to distribute, 280 grams or more of cocaine base (“crack cocaine”).
This matter stems from a joint law enforcement investigation conducted in 2010 by the FBI New Haven Safe Streets Task Force, the DEA New Haven Task Force, the New Haven Police Department and the Hamden Police Department. Through the use of court-authorized wiretaps, investigating officers identified and dismantled a large drug trafficking organization that was headed by JACKSON and centered in the Newhallville section of New Haven and Hamden. At the time, JACKSON was one of the principal suppliers of crack cocaine in and around New Haven. The investigation revealed that JACKSON purchased multiple kilograms of cocaine from various sources of supply, and then converted a large majority of the cocaine into crack cocaine. JACKSON then provided distribution quantities of crack to others who sold it on his behalf and gave the proceeds to JACKSON. At times, JACKSON sold crack and powder cocaine to his own customers.
JACKSON was arrested on October 28, 2010. On that date, federal agents executed search warrants at various locations, including JACKSON’s residence on Winchester Avenue in New Haven and a West Haven apartment that JACKSON used to process, store and package narcotics. A search of the Winchester Avenue residence revealed a Taurus .40 caliber pistol with an obliterated serial number, crack cocaine and cash. A search of the West Haven apartment revealed one kilogram of cocaine, 150 grams of crack packaged for distribution, multiple cell phones, drug packaging materials and cash.
JACKSON is scheduled to be sentenced by Senior United States District Judge Ellen Bree Burns on May 2, 2013, at which time JACKSON faces a minimum term of imprisonment of 10 years and a maximum term of imprisonment of life.
If the binding plea agreement filed today is accepted by the Court, JACKSON will be sentenced to 25 years of imprisonment.
JACKSON also has agreed to forfeit two automobiles and two motorcycles seized during the investigation.
Forty-seven individuals have been charged in federal court with various narcotics offenses as a result of this investigation.
This matter was investigated by the FBI New Haven Safe Streets Task Force (composed of members of the New Haven, Milford and Hamden Police Departments and the Connecticut Department of Correction), the Drug Enforcement Administration’s New Haven Task Force (composed of members of the New Haven, West Haven, Meriden, Ansonia, Hamden and Branford Police Departments), along with substantial participation by members of the New Haven and Hamden Police Departments. The United States Marshals Service also has assisted the investigation.
The investigation was funded in significant part by the United States Attorney’s Office Organized Crime Drug Enforcement Task Force and supported by the Office’s Project Safe Neighborhoods and Anti-Gang programs.
This matter is being prosecuted by Assistant United States Attorneys Christopher M. Mattei and Robert M. Spector.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
[email protected]Hartford Crack Dealer Sentenced to 13 Years in Federal PrisonRead the Press Release
February 1, 2013David B. Fein, United States Attorney for the District of Connecticut, today announced that DANA ADAMS, also known as “Soul,” 42, of Hartford, was sentenced yesterday by United States District Judge Janet C. Hall in New Haven to 156 months of imprisonment, followed by five years of supervised release, for distributing crack cocaine and for violating the conditions of his supervised release from a previous federal conviction.
This matter stems from “Operation Vinefield,” a joint law enforcement investigation headed by the FBI’s Northern Connecticut Violent Crimes Task Force targeting narcotics trafficking and gang violence in Hartford’s North End. As a result of the nine-month investigation, 38 individuals were charged with various offenses related to the distribution of crack cocaine and the unlawful possession and dealing of firearms in and around Hartford.
According to court documents and statements made in court, ADAMS and others supplied crack cocaine to numerous street-level dealers, including gang members, who primarily distributed the drug in the area of Enfield Street in Hartford. On April 19, 2012, searches of residences on Bellevue, Enfield, Townley and Sharon Streets in Hartford, all of which ADAMS was suspected of using for his drug trafficking activities, revealed crack cocaine, drug paraphernalia, narcotics packaging materials and cash.
ADAMS’s criminal history includes multiple felony narcotics convictions, including a previous federal conviction in 2004 related to his distribution of crack cocaine in Hartford. ADAMS was incarcerated for more than four years on that conviction, and he was serving a term of supervised release at the time of this most recent offense.
ADAMS has been detained since his arrest on April 19, 2012. On November 6, 2012, he pleaded guilty to one count of conspiracy to possess with intent to distribute, and to distribute, 280 grams or more of cocaine base (“crack cocaine”).
Judge Hall sentenced ADAMS to 138 months of imprisonment for conspiring to distribute crack cocaine, and a consecutive 18-month sentence for violating the conditions of his supervised release.
This matter has been investigated by the FBI’s Northern Connecticut Violent Crimes Task Force, the Connecticut State Police, the Hartford Police Department, and the Connecticut Department of Correction. The case is being prosecuted by Assistant United States Attorney Brian P. Leaming.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
[email protected]Harrisonburg Woman Pleads Guilty to Distributing FentanylRead the Press Release
HARRISONBURG, VIRGINIA -- A local woman who sold the drugs that ultimately led to the overdose death of a Timberville, Va. man, pled guilty yesterday afternoon in the United States District Court for the Western District of Virginia in Harrisonburg to related charges.
Jacie Elizabeth Kyger, 28, of Harrisonburg, Va., waived her right to be indicted and pleaded guilty to a one count Information charging her with distributing Fentanyl. As part of the plea agreement, Kyger has agreed to a 15-year sentence recommendation in Federal prison.
“This case shows how dangerous and highly addictive drugs like Fetanyl can be,” United States Attorney Timothy J. Heaphy said today. “Ms. Kyger exploited the weakness of others when she sold Fetanyl, and her acts ultimately led to an untimely death. When it comes to the problem of drug abuse, we must bring a comprehensive approach which combines enforcement with prevention and treatment.”
According to a statement of facts entered into evidence by Assistant United States Attorney Grayson Hoffman and agreed to by the defendant, Kyger had an on-going narcotics relationship with Kevin Michael Moyer. The investigation revealed a large number of text messages sent between the two establishing that relationship and discussing Moyer purchasing Fentanyl from Kyger.In early November 2011, the two discussed, via text message, Kyger selling Moyer a Fentanyl patch and two Percocet pills. On November 4, 2011, Kyger sold Moyer the drugs for $60. On the morning of November 5, 2011, the body of Kevin Michael Moyer was found lying on the floor of his parent’s home. A syringe containing a liquid containing Fentanyl and a portion of a Fentanyl patch were found next to Moyer’s body in his parent’s bathroom. The Medical Examiner for the Commonwealth of Virginia concluded that Mr. Moyer died of “acute fentanyl toxicity.”
The investigation of the case was conducted by the RUSH Drug Task Force, the Drug Enforcement Administration, the Rockingham County Sheriff’s Office and the Harrisonburg Police Department. Assistant United States Attorney Grayson Hoffman will prosecute the case for the United States.
Guilty Plea Entered by Two Individuals Charged in Plot to Conceal and Dispose of Assets in Connection with Rothstein CaseRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and José A. Gonzalez, Special Agent in Charge, Internal Revenue Service, Criminal Investigation Division (IRS-CID), announced that Kimberly Wendell Rothstein, 38, and Stacie Weisman, 49, pled guilty today to conspiracy to commit money laundering in violation of Title 18, United States Code, Section 371, before the Honorable Judge Robin S. Rosenbaum. Sentencing for Kimberly Rothstein has been scheduled April 19, 2013 at 9:00 a.m. Sentencing for Stacie Weisman has been scheduled for June 7, 2013 at 10:00 a.m.
Kimberly Rothstein and Stacie Weisman were charged, along with Scott F. Saidel, 45, in September 2012 in connection with certain crimes committed in furtherance of a plot to conceal and dispose of assets which were forfeitable as proceeds of a Ponzi scheme orchestrated by Scott W. Rothstein. At the same time, in September, Eddy Marin, 50, and Patrick Daoud, 54, were also charged in a separate, but related, matter with obstruction of justice and perjury, in violation of Title 18, United States Code, Sections 1512(k) and 1621.
According to the documents filed with the court, former Ft. Lauderdale attorney Scott W. Rothstein, who was the Chief Executive Officer and Chairman of the law firm of Rothstein, Rosenfeldt and Adler, P.A. (RRA), used the funds obtained from the operation of a Ponzi scheme to purchase tens of millions of dollars of real estate, vehicles, vessels, business interests, luxury watches, jewelry and sports memorabilia for himself, his wife, Kimberly Rothstein, and others. As part of his plea agreement, Scott W. Rothstein agreed to forfeit to the government all assets acquired with funds derived through the aforesaid Ponzi scheme. On November 9, 2009, agents of the Internal Revenue Service, Criminal Investigations, went to the Rothstein residence, where Kimberly Rothstein assisted the agents in retrieving what was believed to be all of the available cash, jewelry and luxury watches which had previously been purchased by Scott W. Rothstein with proceeds derived from the Ponzi scheme. However, according to Court documents, before, during and after the aforesaid seizure by federal agents on November 9, 2009, Kimberly Rothstein, Stacie Weisman, and Scott F. Saidel knowingly took action to conceal certain items of jewelry, valued in excess of one million dollars, for the purpose of preventing the government from exercising its authority to take such property into its lawful custody and control. Thereafter, Kimberly Rothstein and Stacie Weisman sold and attempted to sell a portion of this jewelry to and through various persons, including Eddy Marin and Patrick Daoud.
The documents further allege that, in connection with civil proceedings instituted by the Trustee in bankruptcy for RRA, all of the defendants took steps to obstruct justice by concealing the true location of certain items of jewelry in order to prevent its availability for use in the bankruptcy proceedings. It is further alleged that Marin and Daoud committed perjury during depositions in connection with the bankruptcy proceedings, and that Kimberly Rothstein, Stacie Weisman and Scott F. Saidel sought to have Scott W. Rothstein testify falsely in connection with those proceedings.
Defendants Eddy Marin and Patrick Daoud are set to commence trial on April 8, 2013. Defendant Scott F. Saidel pled guilty on January 30, 2013 and is scheduled to be sentenced on June 7, 2013.
U.S. Attorney Ferrer commended the investigative efforts of IRS-CID and FBI. This case is being prosecuted by Assistant U.S. Attorneys Lawrence LaVecchio, Jeffrey Kaplan, Paul Schwartz and Evelyn Sheehan.
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.
Guilty Plea Entered by Contractor Charged with Paying Bribes to Director of Traffic EngineeringRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Michael B. Steinbach, Acting Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, Jose A. Gonzalez, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), and Marlies T. Gonzalez, Special Agent in Charge, U.S. Department of Transportation, Office of Inspector General, announced that James Hashim, 50, of Plantation, pled guilty today to conspiracy to commit bribery in programs receiving federal funds, highway fraud, mail fraud, extortion under color of official right, and tax fraud, all in violation of Title 18, United States Code, Sections 371, before the Honorable Judge James I. Cohn. Sentencing has been scheduled for Friday, April 26, 2013, at 11:00 a.m.
Hashim was charged, along with Anthoneel Allen, 40, of Wellington, in connection with a scheme wherein they paid bribes to Jihad El Eid, who was the Director of Traffic Engineering in the Division of Public Works in Broward County.
According to the documents filed with the court, in or about 2005, Allen hired Hashim as a vice president of Southeast Underground Utilities (SUU). Hashim was to work as an estimator and to help SUU obtain government contracts. Hashim admitted that beginning in the fall of 2006 through 2010, he and Allen provided to Jihad El Eid more than $150,000 in cash, a 2003 Ford Taurus, and a job at SSUU for Wael El Eid (a relative of Jihad El Eid) in order to curry favor with Jihad El Eid. In return, Jihad El Eid helped SUU obtain work on multi-million dollar projects initiated by the Broward County Traffic Engineering Division, including the Signalization and Street Light Installation (SSLI) contract, a contract to make installations and do repair work of the street lights and traffic equipment in Broward County; the Advanced Transportation Management System (ATMS Project), a federally-funded project, which required the contractor to install an integrated traffic control system which entailed laying hundreds of thousands of feet of underground cable and conduit in order to synchronize traffic flow within Broward County; and the Video Detection Contract (VDC), which required the contractor to install video detection cameras in various intersections in Broward County in order to improve traffic flow. Jihad El Eid also assisted SUU concerning billing, specification and inspection matters that resulted in SUU being overpaid by at least $3,000,000.
According to the documents filed with the court, Hashim also admitted that he and Allen conspired to evade paying federal income and employment taxes on bonuses and payments made by SUU related to the purchase of Hashim’s $1.25 million house in Plantation.
Mr. Ferrer commended the investigative efforts of the FBI, IRS-CI, and the U.S. Department of Transportation, Office of Inspector General, in connection with the investigation of this matter. Mr. Ferrer would also like to recognize the assistance provided by the Broward County Office of the County Attorney, the Broward County Professional Standards Section, the Federal Highway Administration, the Florida Department of Transportation, and the employees of the Broward County Traffic Engineering Division. The case is being prosecuted by Assistant U.S. Attorney Jeffrey N. Kaplan.
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.
Grand Jury Indicts Santa Monica Restaurant and Sushi Chefs on Federal Charges Related to Sale of Protected Whale MeatRead the Press Release
LOS ANGELES – A federal grand jury has returned a nine-count indictment that charges a now-shuttered Santa Monica sushi restaurant and two men who worked there as chefs with selling meat from Sei whales, which are protected under the Marine Mammal Protection Act.
The indictment, which was filed yesterday afternoon charges:
Typhoon Restaurant, Inc., which is the parent company of the now-closed The Hump Restaurant, which was located at the Santa Monica Airport;Kiyoshiro Yamamoto, 48, of Culver City; and
Susumu Ueda, 39, of Lawndale.
The indictment accuses the three defendants of conspiring to import and sell whale meat, specifically meat from Sei whales, which are listed as an endangered species.
Yamamoto and Ueda allegedly ordered the whale meat from Ginichi Ohira, a Japanese national who previously pleaded guilty to a misdemeanor charge of illegally selling a marine mammal product. Once Ohira received the whale meat in the United States, he prepared an invoice that incorrectly described the meat as fatty tuna and delivered the whale meat to The Hump, according to the indictment that describes a conspiracy that last from 2007 into 2010.
According to the indictment and documents previously filed in this matter, The Hump sold whale sushi to informants posing as customers on three specific occasions in the fall of 2009 and in early 2010. The meat sold as “whale” on two of the occasions was examined by scientists, who tested the DNA of the meat and determined it was Sei whale, and receipts given to the informants who went to The Hump indicated that they had purchased “whale,” according to an affidavit previously filed.
It is illegal to sell any kind of whale meat in the United States. Sei whales are protected under the Marine Mammal Protection Act of 1972 and they are listed as endangered in the Endangered Species Act of 1973.
In addition to the conspiracy charge, The Hump is charged with smuggling and Yamamoto is charged with two counts of smuggling.
The Hump is also charged with a misdemeanor count of the sale of a marine mammal product for an unauthorized purpose, and Yamamoto is charged with two misdemeanor counts of sale of a marine mammal product for an unauthorized purpose.
Yamamoto is additionally charged with obstructing an official proceeding. Contained in that charges is an allegation that Yamamoto instructed other sushi chefs at The Hump to lie about the source of the whale meat.
Ueda is additionally charged with making a false statement to federal investigators about the source of the whale meat.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty.
If they are convicted of the charges against them in the indictment, Yamamoto would face a statutory maximum penalty of 67 years in federal prison, and Ueda would face a statutory maximum sentence of 10 years.
If it is convicted, Typhoon Restaurant, Inc. would face fines totaling $1.2 million.
Yamamoto, Ueda and representatives of The Hump will be summoned to appear for arraignments in United States District Court in the coming weeks.
The investigation into The Hump and Yamamoto was conducted by the National Oceanic and Atmospheric Administration, Office of Law Enforcement. NOAA investigators received assistance from the United States Fish and Wildlife Service, the California Department of Fish & Game, and U.S. Customs and Border Protection.
The investigation into The Hump was started after members of the general public brought information to NOAA. Anyone with information about the illegal sale of marine mammals is encouraged to call the NOAA Law Enforcement hotline at (800) 853-1964.
Release No. 13-018
Gary, Indiana Man Sentenced to 240 Months in Prison for Drug ConspiracyRead the Press Release
DAVENPORT, IA – On February 1, 2013, Tracy Lee White, age 47, of Gary, Indiana, was sentenced to 240 months imprisonment for conspiracy to manufacture, distribute, and possess with intent to distribute at least 1000 kilograms of marijuana, announced United States Attorney Nicholas A. Klinefeldt. United States District Judge Stephanie M. Rose imposed the sentence after White and the United States Attorney reached an agreement that the 240-month sentence furnishes adequate protection to the public, is in keeping with the gravity of the offense, and promotes respect for the law, just punishment, and deterrence to criminal conduct. United States District Judge Stephanie M. Rose also fined White $20,000, ordered him to serve five years supervised release following his incarceration, and ordered him to pay a $100 special assessment to the crime victim fund.
At the time of his guilty plea, White admitted his involvement in a conspiracy that obtained more than 1,000 kilograms of marijuana in Colorado and transported it to Iowa and elsewhere with several other individuals. White traveled to Colorado on numerous occasions to meet with the suppliers and others for the purpose of purchasing of multiple pounds of marijuana.
This investigation was conducted by the Clinton, Iowa, Police Department, Quad City Metropolitan Enforcement Group, the Iowa Division of Narcotics Enforcement, and the United States Drug Enforcement Administration. This case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
(Download Press Release )
Frank Vennes Pleads Guilty to Lying to Investors in Petters’ Ponzi SchemeRead the Press Release
MINNEAPOLIS—Late this afternoon in federal court in St. Paul, a business associate of Thomas J. Petters, the Minnesota businessman convicted in 2009 of orchestrating a $3.65 billion Ponzi scheme, pleaded guilty to fraudulently raising money from individuals and through hedge funds for investment in Petters Company, Inc. (“PCI”). Frank Elroy Vennes, Jr., age 55, of Stuart, Florida, was charged on July 11, 2011, in a Second Superseding Indictment. Appearing today before United States District Court Judge Richard H. Kyle, he specifically pleaded guilty to one count of securities fraud and one count of money laundering.
Following the plea hearing, U.S. Attorney B. Todd Jones said, “This case exemplifies one of the highest priorities of this office — protecting our citizens from financial fraud. Because of the tremendous dedication of this office and our investigative partners, we successfully constructed a very strong case. We were able to convict Tom Petters, the biggest fraudster in Minnesota history, who is now serving a 50-year sentence in Leavenworth. We also successfully prosecuted many of his associates, and today, yet another individual pleaded guilty. We are taking action to recoup the financial losses suffered by so many because of this fraud and know the court will appropriately sentence Mr. Vennes for his related crimes.”
FBI Special Agent in Charge Chris Warrener added, “This guilty plea today symbolizes the ongoing joint efforts between the FBI, the U.S. Attorney’s Office, IRS-CI, and the U.S. Postal Inspection Service to combat significant fraud in the State of Minnesota. It also reflects our continued joint commitment to ensuring that those responsible for the Petters fraud are held accountable.”
From 1995 through September of 2008, Vennes and his company, Metro Gem, obtained money from others for investment in PCI notes. He also assisted in the formation of hedge funds, known as the Arrowhead Funds, to help raise additional investment funds for that same purpose. Beginning in 2001 and proceeding through September 24, 2008, he knew that individuals associated with the Arrowhead Funds were making misrepresentations and omissions to investors regarding investments in PCI, and he aided and abetted in those misrepresentations.
“This complex investigation shows that the appearance of success can be a mask for a tangled financial web of lies,” said Kelly R. Jackson, Special Agent in Charge of the St. Paul Field Office of the IRS-CI. “Ponzi schemes can thrive for a long time because of the false representations about the investments that were made to investors. But that time is gone, and as Mr. Vennes’ plea shows, it’s time for those responsible to face judgment.”
PCI was owned and operated by Tom Petters, who, in or before 1993, initiated the Ponzi scheme by representing that funds invested in PCI promissory notes would finance the purchase of electronics and other consumer merchandise. Purportedly, PCI would resell that merchandise for a profit to certain “big box” retailers, including Sam’s Club and Costco. In truth, however, no merchandise was bought or resold. Instead, Petters diverted hundreds of millions of dollars for his own benefit and the benefit of his co-conspirators.
Petters’ Ponzi scheme unraveled in 2008, when federal agents executed search warrants at his business offices as well as other locations. He was subsequently prosecuted in federal court in the District of Minnesota and, in April of 2010, was sentenced to 50 years in federal prison. He is currently serving his sentence in the federal penitentiary in Leavenworth, Kansas.
In his plea agreement, Vennes admitted that he raised funds for investment in PCI notes through third-party agents, particularly after 1998. Because he had a federal criminal record, having been previously convicted on federal narcotics, firearms, and money laundering charges, he had difficulty obtaining funding on his own. As a result, he regularly worked through others, especially when trying to solicit money from banks and institutional investors. Arrowhead Capital Partners II, L.P. and Arrowhead Capital Finance, Ltd., collectively known as the Arrowhead Funds, were among those third-party agents.
From 1999 through September 2008, all paperwork and communication between PCI and the Arrowhead Funds went through Vennes or one of his employees. At the same time, Vennes received “commissions” from Petters for brokering deals involving the Arrowhead Funds. His commissions were based on the amount of money he raised for Petters and PCI. Between 2001 and 2008, Vennes received more than $48 million in commissions.
During that same time period, Vennes knew that those acting on his behalf were making material misrepresentations and omissions to investors in the Arrowhead Funds and did nothing to correct the situation. Investors were told, for example, that whenever a retailer purchased consumer electronics or other goods from PCI, those products were paid for by the retailer with funds directly deposited into a bank account under the control of a management company. Thus, investors were falsely assured that all PCI transactions were, in fact, taking place, and all money was secure. However, Vennes, among others, was well aware that no payments were ever received from retailers and, instead, came from PCI alone.
Furthermore, investors were never informed of Vennes’ criminal record or his involvement in the Arrowhead Funds’ transactions. And, finally, they were kept unaware that in late 2007 and early 2008, the PCI Notes held by the Arrowhead Funds were delinquent and were approaching default. Instead of disclosing that information to investors, Vennes and others arranged to secretly extend the due dates on the notes, the intent being to conceal the payment problems and to lull investors into believing their investments were secure and performing well.
Vennes’s co-defendant in this case, James Nathan Fry, age 59, of Orono, Minnesota, was charged with five counts of securities fraud, four counts of wire fraud, and three counts of making a false statement to the U.S. Securities and Exchange Commission during its investigation of investments in PCI by hedge funds under the management of Fry’s company, Arrowhead Capital Management. His trial is scheduled to begin on February 5, 2013.
For his crimes, Vennes faces a potential maximum penalty of ten years in prison on the money laundering count and five years on the securities fraud count. Judge Kyle will determine his sentence at a future hearing, yet to be scheduled.
If convicted, Fry faces a potential maximum penalty of 20 years on each wire fraud count and five years on each securities fraud and false statement count.
Two Florida hedge fund managers have pleaded guilty to committing fraud in connection to this scheme by making material misrepresentations to investors in their hedge funds concerning investments in PCI. David William Harrold, age 53, of Del Ray Beach, Florida, and Bruce Francis Prevost, age 52, of Palm Beach Gardens, Florida, await sentencing, each on four counts of securities fraud.
This case is the result of an investigation by the Federal Bureau of Investigation, the Internal Revenue Service–Criminal Investigations, and the U.S. Postal Inspection Service. It is being prosecuted by Assistant U.S. Attorneys Timothy C. Rank, Kimberly A. Svendsen, and Robert M. Lewis.
This law enforcement action is in part sponsored by the interagency Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive attack on financial crimes. It includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement, who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force hopes to improve efforts across the federal executive branch, and, with state and local partners, investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.The task force and the Minnesota U.S. Attorney’s Office want to remind people to protect themselves from securities fraud. For more information, visit http://www.stopfraud.gov/protect-securities.html.
Four Canton Men Sentenced to Prison for Drug Trafficking Involving Rated R Street GangRead the Press Release
Four Canton men were sentenced to prison this week for their involvement in a drug-trafficking ring in which cocaine, heroin and crack cocaine was brought into Stark County and distributed by members of the Rated R street gang, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, and Stephen D. Anthony, Special Agent in Charge of the Federal Bureau of Investigation’ Cleveland office.
Jasmine Watkins, 29, was sentenced to 20 years in prison.
Virgil Hill, 26, was sentenced to 20 years in prison.
Cordrick Owens, 32, was sentenced to 12 years, 7 months in prison.
Jerry Gordon, 25, was sentenced to 10 years in prison.
All four previously pleaded guilty to conspiracy to distribute controlled substances (cocaine, crack cocaine and heroin). Watkins also pleaded guilty to being a felon in possession of a firearm, for which he was sentenced to 10 years in prison, to be served concurrently to his 20-year sentence.
“This group is well known to law enforcement for causing serious trouble throughout Canton,” Dettelbach said. “These prison sentences will eliminate some of the worst of the worst offenders in Stark County.”
Anthony said: “These four sentences wrap up another phase of law enforcements efforts to dismantle drug trafficking groups in our area. The FBI will continue to work side by side with our law enforcement partners to make Canton neighborhoods a safer place to live.”
Watkins provided Gordon with shipments of drugs at a home in Columbus and then Gordon and others moved the drugs to a stash house he controlled on Sol Beck NE in Canton. Once there, Gordon distributed the drugs to local dealers, according to court documents.
Hill was identified in court documents as the leader of "Rated R." He and others made large purchases of cocaine from Gordon, according to court documents.
Seventeen people have now been sentenced to prison in this case. They are:
Travis Grant: 10 years, 1 month.
Timothy Bertram: 4 years, 9 months.
Oscar Todd: 10 years, 5 months.
Edward Turpin IV: 10 years.
Perez Antwan Williams: 5 years.
Demond Hill: 10 years, 2 months.
Bennie Woodson: 6 years, 10 months.
Ronald D. Hill: 6 years, 10 months.
John L. Hill: 3 years, 1 month.
Barry Giamourdes: 4 years, 3 months.
Brandon Jones: 10 years.
Lavanya Mayle: 5 years.
Brian Brown: 6 years.
Five others were indicted on federal charges last month for their role in the conspiracy.
This case was being prosecuted by Assistant U.S. Attorneys Linda H. Barr and Vasile C. Katsaros following an investigation by the FBI’s Safe Streets Task Force, which is comprised of the FBI, Canton Police Department, Alliance Police Department, Ohio Adult Parole Authority, Stark County Sheriff’s Office, Massillon Police Department and Perry Police Department.Founder and Leader of Korean Night Breeders Gang Sentenced to 210 Months for ExtortionRead the Press Release
ALEXANDRIA, Va. – Han Sa Yu, 44, a resident of Maryland who is originally from South Korea, was sentenced today to 210 months in prison, followed by three years of supervised release, for using fear, violence and threats of violence to extort Korean businesses operating in Annandale, Va. Yu also agreed to pay over $98,000 in restitution to the victims of his extortion.
Neil H. MacBride, United States Attorney for the Eastern District of Virginia, and John P. Torres, Special Agent in Charge for U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) in Washington, D.C., made the announcement after sentencing by United States District Judge James C. Cacheris.
Yu pleaded guilty to conspiracy to commit extortion on Nov. 9, 2012. According to court documents, around 2006, Yu founded the Korean Night Breeders to carry out extortions of various businesses in Annandale, including doumi, restaurants, and taxi businesses. The Korean Night Breeders targeted businesses owned by persons of Korean descent and frequently sought out those that employed illegal aliens. Dressed in black suits, which became their uniform, Yu and the Korean Night Breeders would surround their victims and threaten violence unless they paid a “tax” or “protection” money. From one victim alone, the Korean Night Breeders extorted more than $30,000. Various restaurants in Annandale either paid extortion or provided free food and drink to the Korean Night Breeders.
Yu, also known as “Thunder” and “Bungay,” modeled the gang after Asian organized crime syndicates. He would hold meetings where the gang would discuss potential victims, and Yu would teach fighting techniques and his extortion protocol. The size of the gang varied, but at times had 15 or more members. Yu and his gang used the extortion proceeds to purchase marijuana and cocaine, among other things. Three of Yu’s co-conspirators also pled guilty and are scheduled to be sentenced on Feb. 22, 2013.
This case was investigated by the Transnational Gang Unit of ICE HSI’s Washington, D.C., Field Office, with assistance from the Fairfax County Police Department. Assistant United States Attorney Michael J. Frank and Virginia Assistant Attorney General and Special Assistant United States Attorney Marc J. Birnbaum prosecuted the case on behalf of the United States.
A copy of this press release may be found on the website of the United States Attorney's Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.Former Parking Lot Attendant Sentenced to 27 Months for Stealing Nearly $900,000 in Fees from Udvar-Hazy CenterRead the Press Release
ALEXANDRIA, Va. – Freweyni Mebrahtu, 46, of Sterling, Va., was sentenced today to 27 months in prison, followed by three years of supervised release, for stealing nearly $900,000 in visitor parking fees when she was employed by Parking Management, Inc., (PMI), the company contracted to manage parking services at the Smithsonian Institution’s Steven F. Udvar-Hazy Center in Chantilly, Va.
Neil H. MacBride, United States Attorney for the Eastern District of Virginia; Scott S. Dahl, Inspector General for the Smithsonian Institution; and Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office, made the announcement after sentencing by United States District Judge T.S. Ellis, III.
Mebrahtu pled guilty on Nov. 1, 2012, to theft of public money. At sentencing, she was ordered to pay $895,680 in restitution and to forfeit an equal amount in the form of a money judgment in favor of the United States.
Mebrahtu was a full-time employee of PMI, which managed the 2,000-vehicle parking lot at the Udvar-Hazy Center. Over the course of three years, Mebrahtu stole cash entrance fees paid by tens of thousands of museum visitors, taking upwards of $4,000 in a single day by failing to hand out parking ticket stubs to paying customers and by unplugging an electronic vehicle counter that had been installed to measure vehicle traffic. At the end of each shift, Mebrahtu would submit a daily work summary to PMI that repeatedly under-reported the true number of vehicles that had entered the parking lot through her lane. These falsified PMI reports were provided to the Smithsonian. The total loss due to her theft is calculated at $895,680. Based on the $15 entrance fee, it is estimated that Mebrahtu stole from 59,712 visitor vehicles over the course of her crime.
Instead of reporting the thefts, Mebrahtu shared advice with co-workers about how to steal money from the museum. A co-worker, Meseret Terefe, 37, of Silver Spring, Md., was sentenced on Jan. 18, 2013, to 20 months in prison.
The investigation was initiated by the Smithsonian Office of the Inspector General and jointly investigated by the FBI’s Washington Field Office. Assistant United States Attorney Jasmine Yoon and Special Assistant United States Attorney James McDonald are prosecuting the case on behalf of the United States.
A copy of this press release may be found on the website of the United States Attorney's Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.Former Midland Independent School District Warehouse Operations Buyer Pleads Guilty to Stealing from the DistrictRead the Press Release
Frank Gonzales Carrasco, age 45 and former Warehouse Operations Buyer for Midland Independent School District (MISD), faces up to ten years in federal prison after admitting to stealing construction materials from the school district announced United States Attorney Robert Pitman.
Appearing before U.S. Magistrate Judge David Counts in Midland this morning, Carrasco pleaded guilty to one count of theft concerning programs receiving federal funds. According to the factual basis filed in this case, between July 2009 and January 2012, Carrasco was employed by MISD as the Operations Buyer at the warehouse. His job responsibilities included ordering and managing the inventory necessary to complete work at MISD facilities. By pleading guilty, Carrasco admitted that during his employment, he ordered large amounts of copper pipe and electrical wire on behalf of MISD which exceeded any work orders anticipated by the school district. Carrasco then took the extra copper pipe and electrical wire—more than 18,000 pounds--to Recycle Midland where he recycled it for cash. Carrasco admittedly collected $46,041.71 from Recycle Midland for copper pipe and electrical wire that originally cost MISD more than $140,000. To conceal his scheme, Carrasco hid the theft of the materials by adding pipe or wire to work orders for jobs that did not require it or had already been completed.
In addition to the prison time, Carrasco faces up to a $250,000 fine as well as restitution to MISD. Carrasco is on a $10,000 bond pending sentencing. A sentencing date has yet to be scheduled.
This case was investigated by the Midland Police Department with assistance from Midland Independent School District internal auditors. Assistant United States Attorney V. LaTawn Warsaw is prosecuting this case on behalf of the Government.
Former Memphis Police Officer Sentenced to 84 Months for Civil Rights Violations, Drug ConspiracyRead the Press Release
Memphis, TN – Melvin Victor Robinson, 32, a former Memphis Police Officer, was sentenced today to 84 months in federal prison following his guilty plea to civil rights violations and attempting to possess 10 kilograms of cocaine with the intent to distribute, announced U.S. Attorney Edward L. Stanton III.
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“This sentence should serve as an unequivocal warning that law enforcement officers who disgrace their badge and violate the public’s trust will ultimately be caught and prosecuted to the fullest extent of the law,” said U.S. Attorney Stanton. “We will continue to hold accountable anyone who engages in such conduct – including those who take an oath to protect and serve.”
In July, Robinson pleaded guilty to one count of attempting to possess a controlled substance with intent to distribute, in violation of Title 21, U.S.C. Section 846; one count of deprivation of rights under color of law, in violation of Title 18, U.S.C. Section 242; and conspiracy against rights, in violation of Title 18, U.S.C. Section 242.
On January 26, 2012, an informant contacted Robinson and contracted the sale and purchase of 10 kilograms of cocaine. According to facts stated in court, Robinson met the informant while he was on duty and in his police car. The informant told Robinson that the cocaine was stored inside a trailer located at a trucking lot in south Memphis. The informant then provided Robinson with the key and location of the trailer. Approximately ten minutes later, Special Agents and Task Force Officers of the FBI saw Robinson get out of his police car and enter the trailer. Robinson later exited the trailer and placed a black duffel bag containing what he believed to be cocaine inside his police car.
Robinson also pleaded guilty to stealing money from Jwan Boddie. On November 14, 2011, Boddie was detained by Robinson during an arrest while Robinson was working as a MPD officer. According to facts stated in court, Robinson and his partner responded to a narcotics call at the Colonial Inn, where they found Boddie in his hotel room. During that search Robinson admitted to stealing $700 and later sharing the money with his partner.
Robinson also pleaded guilty to striking Jeremy Pettis during an arrest in April 2011. According
to facts stated in court, Robinson detained and punched Pettis in the face while he was sitting in his vehicle.
“The criminal behavior of a police officer harms the integrity of all of law enforcement,” said Aaron T. Ford, Special Agent in Charge of the Memphis Division of the Federal Bureau of Investigation. “The hard work by the FBI and our law enforcement partners to investigate and prosecute this case stands as a reminder that the majority of law enforcement officers serve and protect their communities honorably.”
“This is proof that the judicial system works,” said Memphis Police Department Director Toney Armstrong. “Regardless of what position you hold you will be held accountable for your actions if you choose to break the law.”
This crime was investigated by the Tarnished Badge Task Force, which is comprised of investigators from the Federal Bureau of Investigation, Memphis Police Department, and Shelby County Sheriff’s Office. The case was prosecuted by Assistant United States Attorney Brian K. Coleman on behalf of the government.Former Jersey City Public School Teacher Admits Preparing False Tax Returns, Tax EvasionRead the Press Release
NEWARK, N.J. – A Hudson County, N.J., man who worked as a tax preparer admitted today that he filed falsified returns on behalf of his clients, and also failed to report his own income, U.S. Attorney Paul J. Fishman announced.
Elijah Washington, Jr., of Jersey City, N.J., pleaded guilty before U.S. District Judge Jose L. Linares in Newark federal court to an Indictment charging him with aiding in the preparation of false tax returns and tax evasion. Washington was arrested after preparing a false tax return for an undercover law enforcement agent and was indicted in April 2012 by a federal grand jury.
According to documents filed in this case and statements made in court:
In addition to being a public school teacher, Washington owned and operated a tax preparation business – Elijah’s Professional Tax Service – in Jersey City, where he prepared tax returns for tax years 2005 through 2008. He fabricated various items to obtain larger refunds for clients, including tuition and fees deductions, child tax credits, charitable contributions and job expenses. Washington also failed to report his own income on the money he earned from the tax preparation business.
On the tax evasion charges, Washington faces a maximum penalty of five years in prison and a maximum fine of $250,000, or twice the loss sustained by the Government, or twice the gain derived from the offense, whichever is greatest. Sentencing is scheduled for April 24, 2013.
U.S. Attorney Fishman credited special agents of IRS - Criminal Investigation, under the direction of Acting Special Agent in Charge Shantelle P. Kitchen in Newark, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Andrew J. Bruck of the U.S. Attorney’s Office General Crimes Unit in Newark.
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Defense counsel: Peter Willis Esq., Jersey CityWashington, Elijah Indictment
Former East St. Louis Police Officer Sentenced for Obstructing A Federal Civil Rights InvestigationRead the Press Release
A former East St. Louis police officer was sentenced in US District Court on January 31, 2013, for making false statements to federal investigators, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today. Ramon Carpenter, 40, was sentenced to 30 months imprisonment, was ordered to pay a $200 special assessment and a $400 fine, and was ordered to serve a two year term of supervised release following service of his prison sentence. Carpenter pled guilty in US District Court on September 26, 2012.
Evidence presented at the sentencing hearing established that on May 8, 2012, a female driver was stopped by two East St. Louis police officers while driving home from purchasing liquor at approximately 2:45 AM. At the time of the stop, the driver was driving uninsured on a suspended license while she was under the influence of alcohol and in possession of an open container of alcohol. The driver believed that she was going to be arrested. She was asked to get out of the car, at which time East St. Louis Police Officer Ramon Carpenter purported to conduct a “frisk,” but he actually groped and fondled her in a sexually inappropriate way. She was not arrested. Rather, the officers allowed her to drive her car back to her apartment. The officers followed her, and all three entered her home where the officers discovered that she had left four children, ages 10, 9, 8, and 1, alone in the apartment while she went out to buy liquor. She feared that the Department of Children and Family Services was going to be called. Instead, Officer Carpenter directed the victim to follow him out of the residence and to get into his car. She complied. The officer drove her to an isolated area in Jones Park where he coerced her into performing oral sex upon him. After the sex act was completed, the driver was returned home with no charges
A federal criminal investigation began the next morning when the driver went to the police station to complain. When federal agents interviewed Carpenter, he falsely denied being with the victim in the park and he falsely denied receiving oral sex from her.
“Ramon Carpenter’s outrageous conduct constituted a gross violation of the civil rights of the victim, and further served to undermine public confidence in an agency that is charged with ensuring the safety of the community,” United States Attorney Wigginton said.
The investigation was conducted through the Metro East Public Corruption Task Force by agents from the Internal Revenue Service, the Illinois State Police, and the Federal Bureau of Investigation. The case was prosecuted by Assistant United States Attorney Steven D. Weinhoeft.
Former Bank Executive Admits Embezzling from Bank of AmericaRead the Press Release
LUBBOCK, Texas — Donnie Wright, 53, of Lubbock, Texas, appeared yesterday in federal court and pleaded guilty, before U.S. District Judge Sam R. Cummings, to one count of embezzlement of funds by a bank employee. Wright, who remains on bond, faces a maximum statutory penalty of 30 years in federal prison, a $1 million fine and restitution. Judge Cummings ordered a presentence investigation report with the sentencing date to be set after the completion of that report. Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
According to documents filed in the case, Wright was employed by Bank of America in Lubbock, as a Branch Manager at the 5144 82nd Street location. The factual resume states that Wright was a member of the Board of Deacons and Trustee at Community Baptist Church (CBC) in Lubbock. Beginning in May 2006 and continuing to January 24, 2010, Wright used his position as a Bank of America employee to embezzle funds owned by CBC and entrusted to the custody and care of Bank of America. He employed a variety of methods to embezzle the funds, including embezzling from CBC’s Certificates of Deposits held at the bank; making cash withdrawals from CBC’s accounts using debit (withdrawal) tickets; and fraudulently drawing checks on CBC’s checking account.
The case was investigated by the FBI and the Lubbock Police Department. Assistant U.S. Attorney Amanda R. Burch is in charge of the prosecution.
Former Atlanta Investment Advisor Pleads Guilty to Embezzeling More Than $2.5 Million from ClientsRead the Press Release
ATLANTA – The owner and operator of Lighthouse Financial Partners, LLC, an investment advisory service in Atlanta, Georgia, pleaded guilty today in federal court before U.S. District Judge Steven C. Jones to a charge of defrauding more than 50 of his clients. Benjamin Daniel DeHaan, 37, of Decatur, Georgia stole more than $2.5 million from his clients, and then used the money to purchase a home and partial ownership in a restaurant and bar in Memphis, Tennessee.
United States Attorney Sally Quillian Yates said, “This defendant may have started out as a legitimate investment advisor, but he got greedy and began stealing from his clients. In less than three years, he diverted more than $2.5 million from his clients’ accounts and used the money to fund a lavish lifestyle. He is now facing a lengthy prison sentence and will never work in the securities industry again.”
Mark F. Giuliano, Special Agent in Charge, FBI Atlanta Field Office, stated: “The defendant in this case, while now acknowledging his criminal behavior, has caused much financial and emotional harm to the victims who were once his clients. The FBI remains committed to identifying, investigating, and presenting for prosecution such cases of criminal fraudulent activity that harm so many individuals.”
According to United States Attorney Yates, the charges and other information presented in court, DeHaan owned and operated Lighthouse Financial Partners, LLC, an investment advisory service in Atlanta, Georgia. DeHaan recruited investors by posting a series of videos on Lighthouse’s website and on YouTube. DeHaan told investors that he had developed a proprietary software program that allowed him to determine when to buy and when to sell a particular stock. Approximately 114 people entrusted DeHaan with money to invest on their behalf. At its peak, Lighthouse had approximately $6.7 million in assets under management.
From January 2010 through May 2012, DeHaan misappropriated and converted to his own use more than $2.5 million of his clients’ money. DeHaan used the fraud proceeds to purchase a new house for himself in Memphis, Tennessee and to purchase partial ownership of a restaurant and bar in Memphis. DeHaan also used his clients’ money to fund an investment account in his own name and to pay Lighthouse’s overhead and operating expenses. DeHaan attempted to cover-up his theft by emailing fraudulent account statements to investors. This lulled the victims into a false sense of security and delayed their complaints to law enforcement.
DeHaan pleaded guilty to a Criminal Information charging him with one count of wire fraud. He could receive a maximum sentence of 20 years in prison and a fine of up to $250,000. In determining the actual sentence, the Court will consider the United States Sentencing Guidelines, which are not binding, but provide appropriate sentencing ranges for most offenders.
Sentencing is scheduled for April 9, 2013, at 11 a.m., before United States District Judge Steve C. Jones.
This case is being investigated by Special Agents of the Federal Bureau of Investigation.
Assistant United States Attorney Russell Phillips is prosecuting the case.
For further information please contact the U.S. Attorney’s Public Information Office at [email protected] or (404) 581-6016. The Internet address for the HomePage for the U.S. Attorney's Office for the Northern District of Georgia is www.justice.gov/usao/gan.
Felon Sentenced to 5+ Years in Prison for Trafficking High Powered WeaponsRead the Press Release
A convicted felon who trafficked in multiple high powered firearms, was sentenced today in U.S. District Court in Seattle to 66 months in prison and three years of supervised release for Conspiracy to Unlawfully Deal in Firearms and being a felon in possession of a firearm, announced U.S. Attorney Jenny A. Durkan. JOSHUA DAWSON, 21, is one of six Seattle area men, indicted in April 2012 following a firearms trafficking investigation. The men sold guns to a person working with law enforcement in the Renton, Washington area. At sentencing U.S. District Judge Richard A. Jones said, “You were directly involved in providing firearms that would hit the streets without any concern of where they would go or how they would be used.”
“Getting firearms out of the hands of felons and off our streets is one of our top priorities,” said U.S. Attorney Jenny A. Durkan. “I commend the creative and coordinated work by local and federal law enforcement to infiltrate this criminal gang that was trafficking the high powered weapons that fuel violence in our community.”
DAWSON was indicted following an undercover investigation involving the Seattle Police Department Gang Unit, the FBI Safe Streets Task Force and the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF). The firearms that were sold as part of the conspiracy were very dangerous weapons. They included handguns, shotguns, semi-automatic rifles with large capacity magazines and scopes, stolen firearms, and weapons tied to crimes of violence. When he pleaded guilty in June 2012, DAWSON admitted selling eight guns between January and March 2012: a Smith and Wesson .38 caliber revolver; a Mac 11 9mm pistol; an SKS 7.62 assault rifle; a Romarm/Cugir, 7.62 x 39mm caliber rifle; a DPMS, .223/5.56mm caliber rifle; an Olympic Arms, multi rifle with a silencer; a Weatherby, 7mm caliber rifle; and a Maadi, 7.62 x 39mm caliber rifle. In all in this operation, 25 guns were taken off the street, many of which were previously reported stolen. DAWSON has prior convictions for robbery and theft. When officers went to arrest him in April 2012, DAWSON fled in his car, crashing into multiple other vehicles. When he was taken into custody, officers located a loaded Kel-Tec model PF-9, 9mm pistol in the glove compartment of his car.
“I want to congratulate the dedicated agents, officers and detectives who worked this investigation,” said Kelvin Crenshaw, Special Agent in Charge of the ATF Seattle Field Division. “Thanks to their efforts a convicted felon who chose to peddle high powered weapons on the streets of Seattle is now behind bars and no longer a threat. ATF is dedicated and resolute in the fight against violent crime and we will never rest in the pursuit of those who would threaten the safety and security of our communities.”
“As we did in this case, the FBI will continue to work hand-in-hand with our partners, sharing resources to target those who would facilitate putting dangerous weapons in the hands of criminals,” said FBI Assistant Special Agent in Charge Steven M. Dean. “This partnership is committed to reducing the drug- and gang-related violence in our communities.”
Prosecutors wrote in their sentencing memo that “…those who possess and sell firearms illegally bear some of the responsibility for the resulting violence that occurs. The illegal sale of firearms only serves to flood the area with weapons that are difficult, if not impossible, to accurately track. Given the dangerousness that these weapons present, and the very real possibility that weapons sold illegally could subsequently be used in other crimes, trafficking in firearms presents unique risks.”
Five others were prosecuted as part of the case: Andre M. Conerly, 26, was sentenced to 96 months in prison; Daunte R. Williams, 29, was sentenced to 78 months in prison; James L. Henderson, 22, was sentenced to five years in prison; Alexander J. Olivio-Altheimer, 21, was sentenced to four years in prison; and Djuan O. Gardner, 28, was sentenced to 70 months in prison.
The case was jointly investigated by the FBI Seattle Safe Streets Task Force, the Seattle Police Department Gang Unit, and the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF). The case was prosecuted by Assistant United States Attorney Nicholas Brown.
Feds Target Stolen Identity Tax Refund FraudRead the Press Release
Nine people have been charged or arrested in the last three weeks
ATLANTA – The Internal Revenue Service began accepting tax returns for the 2012 tax year only two days ago, but the U.S. Attorney’s Office, the Criminal Investigation Division of the IRS, and other law enforcement partners are already in full swing investigating and prosecuting stolen identity tax refund fraud.
United States Attorney Sally Quillian Yates said, “Identity theft is a crime that can take many forms, all of which take a financial and emotional toll on its victims. But stealing someone’s identity – their name, date of birth, or social security number – for the purpose of filing a fraudulent tax return, causes even greater harm because it can significantly delay the victim from receiving his or her legitimate tax refund, and it costs the Treasury millions of dollars in lost revenue every year. The investigation and prosecution of tax-related identity theft during this tax filing season is a priority in this district.”
“Identity theft is a despicable crime that victimizes honest taxpayers and causes immense hardship,” said Veronica Hyman-Pillot, IRS Criminal Investigation Special Agent in Charge. “Identifying, investigating and vigorously prosecuting those individuals involved in tax-related identity theft schemes remains a top priority for IRS Criminal Investigation. The recent indictments and arrests are just a sample of what is to come as we join forces with our law enforcement partners and the United States Attorney’s office to put an end to identity theft.”
In the last three weeks alone, federal prosecutors in Atlanta have charged or arrested 9 people with stolen identity tax refund fraud, and executed two search warrants:
- Today, Kevin Joseph Sonnier, 44, of Ellenwood, Georgia, and Bernardo Davis, 26, of Morrow, Georgia, were arrested on a criminal complaint charging them with wire fraud, aggravated identity theft, and conspiracy to defraud the government. According to the criminal complaint, Sonnier and Davis filed over 15,000 false tax returns from 2011 to 2012 that claimed over $15 million in bogus refunds. Sonnier and Davis used the names and social security numbers of thousands of unsuspecting victims to claim fraudulent refunds from the government. They obtained some of these names and social security numbers through the use of a website and advertisements that touted the availability of an “Obama stimulus payment” and provided a toll-free number. However, no stimulus payment actually existed and Sonnier and Davis instead used the victims' personal information to file thousands of false tax returns that claimed millions of dollars in bogus refunds.
In conjunction with the arrest of Sonnier and Davis, today federal agents searched two locations, including 2295 Lake Harbin Road, Morrow, Georgia, where it is believed a business named "Sonnier Tax Service" has operated, and Kevin Sonnier's primary residence in Ellenwood, Georgia. Assistant United States Attorneys Stephen H. McClain and Thomas J. Krepp are prosecuting the case.
- On January 29, 2013, Jarred Ryan Corker, 26, of Marietta, Georgia, was arrested on a charge of theft of government property arising from his possession of debit cards containing fraudulently obtained tax refunds. According to the criminal complaint, Atlanta Police Department officers found a stack of 21 Visa debit cards issued by TurboTax and approximately $7,100 in cash in Corker’s possession during a traffic stop. The criminal complaint charges that the TurboTax debit cards were loaded with tax refunds issued by the IRS based on fraudulently filed 2011 federal tax returns. In total, 97 fraudulently filed tax returns were identified as part of the scheme with an intended tax loss to the IRS of over $290,000. Assistant United States Attorney Nathan Kitchens is prosecuting the case.
- On January 28, 2013, Frederick Roberts, 51, of Atlanta, Georgia, was arrested on a federal indictment for filing false tax returns with the IRS. Roberts was charged with three counts of mail fraud, three counts of aggravated identity theft, and three counts of filing a false claim against the United States. According to the indictment, Roberts filed false tax returns with the IRS seeking refunds in the names of other people whose identities were stolen, and then falsely listed as the taxpayer’s address his own address or an address from which he could retrieve mail so that he would be able to receive the requested refund check. Assistant United States Attorney Christopher Bly is prosecuting the case.
- In November 2012, a federal grand jury indicted eight individuals for conspiring to commit wire fraud and aggravated identity theft stemming from their use of stolen personal identification information to file hundreds of false federal income tax returns using online tax filing websites, and directed tax refunds to fictitious business bank accounts established to further the scheme. The indictment remained sealed until January 18, 2013, to allow law enforcement the opportunity to locate the defendants. The defendants are charged with conspiring to commit wire fraud and aggravated identity theft. Those indicted include Marcus Behling, 29, of Powder Springs, Georgia; Charlie Brewer, 24, of Mableton, Georgia; Nyron Nelson, 37, of Marietta, Georgia; Maurice Pollock, 31, of Austell, Georgia; Shawn Lavon Brown, 36, of Atlanta, Georgia; Christopher Edwards, 41, of Tucker, Georgia; Tasha Ellis, 32, of Atlanta, Georgia; and Kelly Sue Lonas, 38, of Marietta, Georgia. On January 18, 2013, all the defendants except Brown, Ellis, Lonas and Edwards were arrested. Brown, Ellis and Lonas were arrested in 2012. Christopher Edwards remains at large. Assistant United States Attorney Jeffrey Brown is prosecuting the case.
- On January 15, 2013, Amechi Igabari, 25, of Marietta, Georgia was indicted on charges of theft of government funds and aggravated identity theft. According to the indictment, which was unsealed this week, Igabari possessed or used the identities of at least 15 victims whose social security numbers were used to file false tax returns that claimed bogus refunds. To date, law enforcement has been unable to locate Igabari and arrest him. Anyone with information about his whereabouts is asked to call (404) 338-7533. Assistant United States Attorney Thomas J. Krepp is prosecuting the case.
Members of the public are reminded that criminal complaints and indictments contain only allegations. A defendant is presumed innocent of the charges and it will be the government's burden to prove a defendant's guilt beyond a reasonable doubt at trial.These cases are being investigated by Special Agents of the Internal Revenue Service Criminal Investigation. If you believe you may be a victim of tax return-related identity theft please contact the IRS Identity Protection Specialized Unit at 800-908-4490, extension 245 (Mon. - Fri., 7 a.m. - 7 p.m. local time).
For further information please contact the U.S. Attorney’s Public Information Office at [email protected] or (404) 581-6016. The Internet address for the HomePage for the U.S. Attorney's Office for the Northern District of Georgia is www.justice.gov/usao/gan.
- Today, Kevin Joseph Sonnier, 44, of Ellenwood, Georgia, and Bernardo Davis, 26, of Morrow, Georgia, were arrested on a criminal complaint charging them with wire fraud, aggravated identity theft, and conspiracy to defraud the government. According to the criminal complaint, Sonnier and Davis filed over 15,000 false tax returns from 2011 to 2012 that claimed over $15 million in bogus refunds. Sonnier and Davis used the names and social security numbers of thousands of unsuspecting victims to claim fraudulent refunds from the government. They obtained some of these names and social security numbers through the use of a website and advertisements that touted the availability of an “Obama stimulus payment” and provided a toll-free number. However, no stimulus payment actually existed and Sonnier and Davis instead used the victims' personal information to file thousands of false tax returns that claimed millions of dollars in bogus refunds.
Federal Jury Finds Red Lake Man Guilty of Domestic Assault by A Habitual OffenderRead the Press Release
MINNEAPOLIS—Yesterday in federal court in St. Paul, a trial jury found a 35-year-old Red Lake man guilty of domestic assault involving a woman on the Red Lake Indian Reservation. On January 31, 2012, Brian Gordon Graves was convicted on one count of assault with a dangerous weapon and one count of domestic assault by a habitual offender. This is the second time the United States Attorney’s Office for the District of Minnesota has prosecuted someone under the federal “domestic assault by a habitual offender” law. Graves was indicted for these crimes on November 5, 2012.
According to the indictment and evidence presented at trial, on October 6, 2012, Graves assaulted the victim with a 12-gauge shotgun. This assault was committed after Graves was convicted on at least two prior occasions in Red Lake Indian Tribal Court (criminal domestic violence in 1997 and first-degree assault in 1998).
The domestic assault by a habitual offender law was enacted in 2006 by Congress as support to the Violence Against Women Act of 2000. The 2006 statute is a valuable tool for federal prosecutors because research shows that many domestic violence offenders are repeat offenders and because domestic violence rates are extremely high in Indian Country.Violence against American Indian women occurs at epidemic rates. In 2005, Congress found that one in three American Indian women is raped during her lifetime, and American Indian women are nearly three times more likely to be battered in during their lives than Caucasian women.
The U.S. Justice Department is taking steps to increase engagement, coordination, and action relative to public safety in tribal communities, including the creation of the Violence Against Women Federal and Tribal Prosecution Task Force. This task force will explore current issues raised by professionals in the field and recommend “best practices” in prosecution strategies involving domestic violence, sexual assault and stalking.
For his crimes, Graves faces a potential maximum penalty of ten years in federal prison on the assault with a dangerous weapon count, and a potential maximum penalty of five years on the domestic assault by a habitual offender count. U.S. District Court Judge Donovan W. Frank will determine Graves’s sentences at a future hearing, not yet scheduled.
This case is the result of an investigation by the Federal Bureau of Investigation and the Red Lake Tribal Police Department. It is being prosecuted by Assistant U.S. Attorney Deidre Y. Aanstad.
Because the Red Lake Indian Reservation is a federal-jurisdiction reservation, some of the crimes that occur there are investigated by the FBI in conjunction with the Red Lake Tribal Police Department. Those cases are prosecuted by the U.S. Attorney’s Office.Federal Court Bars Kansas Instant Tax Service Franchisee from Operating and Preparing Tax Returns,Orders Payment of $100,000 in PenaltiesRead the Press Release
A Kansas City, Kan., federal court permanently barred an Instant Tax Service franchisee, A&S Tax Services LLC, from further operating or preparing federal tax returns for others, the Justice Department announced today. Instant Tax Service is a national tax-preparation chain operated by ITS Financial LLC, based in Dayton, Ohio. An Ohio federal court entered a preliminary injunction against ITS Financial LLC and its owner last November.
In the Kansas case, the owner of A&S Tax Services, Semere Tsehaye of St. Louis was also permanently enjoined from engaging in certain abusive practices. Both A&S Tax Services and Tsehaye consented to the civil injunction order without admitting the allegations against them. The order, signed by Judge John W. Lungstrum of the U.S. District Court for the District of Kansas, also provides that A&S Tax Services will pay $100,000 in civil tax penalties.
According to the government complaint , the defendants operated Instant Tax Service offices at multiple locations in the Kansas City metropolitan area. The defendants allegedly instructed A&S Tax Services employees at Instant Tax Service offices to engage in systemic and pervasive tax fraud, including routinely preparing tax forms falsely claiming education and dependent-care credits, reporting items pertaining to phony companies, and reporting fictitious income and expenses in order to fraudulently inflate the Earned Income Tax Credit.
Last year, Judge Lungstrum permanently enjoined Tsehaye’s brother, Ahferom Goitom, from preparing federal tax returns.
In the past decade, the Justice Department’s Tax Division has obtained hundreds of injunctions to stop the promotion of tax-fraud schemes and the preparation of fraudulent returns. Information about these cases is available on the Justice Department’s website .
Related Materials:
United States v. Semere Tsehaye, et al.
Stipulated Order for Permanent Injunction Other Relief Against Semere Tsehaye and A & S Tax Services, LLC
East St. Louis Man Sentenced as Career OffenderRead the Press Release
John Arnold, 25, of East St. Louis, Illinois, was sentenced in United States District Court in East St. Louis, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today. Arnold, who was indicted by a federal grand jury on June 20, 2012, and entered a plea of guilty to Possession with the Intent to Distribute Crack Cocaine on September 17, 2012, was sentenced today to 151 months in prison, followed by three years of supervised release. Arnold was also ordered to pay a fine of $750 and a special assessment of $100. In imposing the sentence, the Court found that Arnold was a Career Offender as defined in the United States Sentencing Guidelines.
According to a stipulation of facts submitted to the Court at the time of the plea, Arnold was arrested by the East St. Louis Police Department on April 5, 2012, at approximately 3:00 p.m. following a traffic violation. Arnold was placed under arrest after a computer check revealed that his driver’s license was revoked. The Defendant was patted down before to the arrest and two baggies containing a quantity of crack cocaine and a small amount of marijuana were located in Arnold’s underwear. Arnold later admitted that he intended to sell the crack cocaine.
Evidence in support of the indictment was obtained in an investigation by the Drug Enforcement Administration (DEA) and the East St. Louis Police Department. This prosecution was handled by Assistant United States Attorney Randy G. Massey.
East Hampton Man Charged with Placing Fake Bomb in Front of East Hampton Middle SchoolRead the Press Release
February 1, 2013David B. Fein, United States Attorney for the District of Connecticut, and Kimberly K. Mertz, Special Agent in Charge of the New Haven Division of the FBI, today announced that a federal grand jury in Hartford returned an indictment yesterday charging SEAN DORAN, 20, of East Hampton, with one count of intentionally conveying false or misleading information and a hoax by leaving a fake bomb device at the front doors of East Hampton Middle School in East Hampton on January 12, 2013.
The indictment was unsealed today during DORAN’s initial appearance and arraignment before United States Magistrate Judge Donna F. Martinez in Hartford. DORAN pleaded not guilty to the charge and was released on a $50,000 bond.
“As alleged, the defendant purposefully placed a fake bomb right at the door of a Connecticut middle school,” stated U.S. Attorney Fein. “Hoaxes threaten the sense of security that children and teachers are entitled to enjoy in their school. This indictment should be a clear signal that all threats to schools will be vigorously investigated by my office.”
“The indictment of Mr. Doran should be a warning to those individuals who choose to disrupt and threaten everyday public life, hoax or no hoax,” stated FBI Special Agent in Charge Mertz. “Placing a hoax bomb in a public location is criminal. Placing it outside a school is absolutely appalling. The FBI and its law enforcement partners will work tirelessly to bring to justice those responsible for such criminal conduct.”
If convicted of the charge, DORAN faces a maximum term of imprisonment of five years and a fine of up to $250,000.
U.S. Attorney Fein stressed that an indictment is not evidence of guilt. Charges are only allegations, and each defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
The case has been assigned to Chief United States District Judge Alvin W. Thompson in Hartford.
This matter is being investigated by the Federal Bureau of Investigation’s JTTF, the East Hampton Police Department, the New Haven Police Department and the Connecticut State Police. The case is being prosecuted by Special Assistant United States Attorney Anjna R. Kapoor.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
[email protected]Eagle Butte Woman Charged with Assault with Dangerous WeaponRead the Press Release
United States Attorney Brendan V. Johnson announced that an Eagle Butte, South Dakota woman has been indicted by a federal grand jury for two counts of Assault with a Dangerous Weapon.
Rae Jean Araujo Cota, a/k/a Rae Jean Slides Off, age 36, was indicted by a federal grand jury on January 16, 2013. She appeared before US Magistrate Judge Mark A. Moreno on January 30, 2013 and pled not guilty to the indictment. The maximum penalty upon conviction is 10 years of custody; a $250,000 fine, or both; 3 years of supervised release; a $100 special assessment; and restitution.
The charges relate to two alleged assaults of the same victim that occurred in Eagle Butte in November and December of 2012. One assault involved a knife, and the other a frying pan. The charges are merely accusations, and Araujo Cota is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Cheyenne River Sioux Tribe Law Enforcement Division. Assistant U.S. Attorney Mikal Hanson is prosecuting the case. Araujo Cota was remanded to the custody of the US Marshal. A trial date has been set for April 2, 2013.
Dutch Citizen Sentenced to 12 Years in Prison for Computer Hacking Scheme that Stole and Sold Credit Card InfoRead the Press Release
A Dutch citizen who was arrested and extradited from Romania was sentenced today to 12 years in prison for a computer hacking and credit card fraud scheme that victimized people around the world, announced U.S. Attorney Jenny A. Durkan. DAVID BENJAMIN SCHROOTEN, 22, also known in the hacking world as ‘Fortezza’ pleaded guilty in November 2012 to Conspiracy to Commit Access Device Fraud and Bank Fraud, Access Device Fraud, Bank Fraud, Intentional Damage to a Protected Computer, and Aggravated Identity Theft. At sentencing U.S. District Judge Ricardo S. Martinez asked him, “I don’t think you would ever consider walking into someone’s home, pulling out a gun and robbing them… Did it ever occur to you that you were doing that to all your victims?”
“By trafficking over 100,000 credit card numbers stolen by hackers, this defendant helped create the profitable black market for stolen data,” said U.S. Attorney Jenny A. Durkan. “We will target every link of the cyber crook business model. The hacker who stole the numbers was sentenced to seven years in prison, the broker who sold them online was sentenced today to 12 years in prison, and next before the court will be the leader of a criminal gang that was using these credit card numbers for fraud.”
SCHROOTEN and co-conspirator Christopher A. Schroebel, 21, of Keedysville, Maryland marketed stolen credit card numbers via internet sites. Schroebel hacked into the computers of two Seattle area businesses and stole credit card information. According to the records in the case, SCHROEBEL hacked into the point of sale computer in a restaurant in the Magnolia neighborhood of Seattle, and a restaurant supply store in Shoreline, Washington. Schroebel inserted malicious code onto the victim’s computers that copied the personal information of the credit card transactions at the point of sale terminals. Schroebel conspired and worked with SCHROOTEN to build “carding websites,” in order to make the stolen credit card numbers available to criminals for fraud. Investigators estimate that tens of thousands of people were victimized by having their stolen credit card numbers trafficked by SCHROOTEN – with a damage figure of more than $63 million.
Charles Tony Williamson, 33, of Torrance, California, is charged with 22 counts of various felony offenses including Conspiracy to Access Protected Computers to Further Fraud, Access Device Fraud; Bank Fraud; and Aggravated Identity Theft for his role purchasing and using the stolen credit card numbers. Williamson is scheduled for trial this spring.
“David Benjamin Schrooten's on-line criminal activities victimized thousands of U.S. citizens, and defrauded U.S. banking intuitions out of millions of dollars. Mr. Schrooten’s arrest and conviction demonstrates the Secret Service’s ability to pursue criminal actors beyond the borders of the United States and should serve notice to other online criminals,” said Jim Helminski, Special Agent in Charge of the U.S. Secret Service in Seattle. “I would like to commend the team of Seattle Electronic Crime Task Force Investigators, the many law enforcement organizations both domestic and international, and the prosecutors from the United States Attorney’s Office, Western District of Washington who worked many hours to investigate, and ensure extradition back to the United States to bring David Schrooten to justice
Credit card fraud costs financial institutions $40 billion annually. In the Western District of Washington more than 180,000 stolen credit card numbers have been identified in recent cyber cases.
The case is being investigated by the U.S. Secret Service Electronic Crimes Task Force and Seattle Police Department as part of the Task Force. The U.S. Marshals Service assisted with extraditing SCHROOTEN from Romania. The case is being prosecuted by Assistant United States Attorney Kathryn Warma. Substantial assistance was provided by the Department of Justice Criminal Division Office of International Affairs.
Drug User Pleads Guilty to Unlawful Possession of A FirearmRead the Press Release
A marijuana user who unlawfully possessed a gun with an obliterated serial number pled guilty January 31, 2013, in federal court in Cedar Rapids.
Geromey Gilliand, age 23, from Dubuque, Iowa, was convicted of one count of possession of a firearm by an illegal drug user.
At the plea hearing, Gilliand admitted he was an unlawful user of marijuana on November 28, 2012, when police officers arrested him in Dubuque on an outstanding arrest warrant. During a search incident to arrest, officers found marijuana and a loaded .22 caliber pistol in Gilliand’s packpack. The serial number on the gun had been scratched off.
Sentencing before United States District Court Chief Judge Linda R. Reade will be set after a presentence report is prepared. Gilliand remains in custody of the United States Marshal pending sentencing. Gilliand faces a possible maximum sentence of 10 years’ imprisonment, a $250,000 fine, $100 in special assessments, and 3 years of supervised release following any imprisonment.
This case is being prosecuted as part of Project Safe Neighborhoods, a cooperative local, state and federal program aimed at the enhanced prosecution of gun crimes. The case is being prosecuted by Assistant United States Attorney Daniel C. Tvedt and was investigated by the Dubuque Police Department, the Dubuque Sheriff’s Office, and the Bureau of Alcohol, Tobacco, and Firearms.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is CR 12-1023.
District Man Sentenced to 52 ½ Years in Prison for Murder and Other Charges in Killing at Northwest Washington Store- Store Owner Fatally Shot During Robbery-Read the Press Release
WASHINGTON - Dowen Knight, 48, of Washington, D.C., was sentenced today to 52 ½ years in prison for first-degree felony murder while armed and related charges in the slaying of a Northwest Washington store owner, U.S. Attorney Ronald C. Machen Jr. announced.
A jury found Knight guilty of the crimes in October 2012, following a trial in the Superior Court of the District of Columbia. Knight, who was convicted of 12 counts, was sentenced by the Honorable Florence Y. Pan.
According to the evidence at trial, at approximately 9 p.m. on Nov. 7, 2009, Knight and an accomplice entered La Casa de Morata, a liquor store in the 5400 block of Georgia Avenue NW. The store owner, Rufina Hernandez, 51, and her son were working there at the time.
Knight pulled a pistol, went behind the counter, and approached Ms. Hernandez. Upon seeing this, Ms. Hernandez’s son attempted to come to her assistance, but the accomplice ordered him not to move. As Knight approached Ms. Hernandez, she opened the cash register and invited him to take the money. Knight reached inside, took the bills and then fired a single shot, striking her in the left side of her chin. Knight then pointed the gun at the son and ordered him to the floor. However, the son refused and backed into the storage room. Then Knight and the accomplice fled the store.
When officers of the Metropolitan Police Department (MPD) arrived on the scene, they found Ms. Hernandez standing outside, being held upright by her son, who was still grasping the cell phone which he had used to make the 911 call. Paramedics transported her to the Washington Hospital Center. However, she succumbed to her injuries and was pronounced dead at the hospital.
The accomplice is currently awaiting sentencing in the case.
In announcing the sentence, U.S. Attorney Machen praised the work of the MPD detectives, officers, crime scene technicians, and forensics specialists who worked on the case. He also praised those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialist Alesha Matthews Yette and Litigation Technology Specialists Kimberly Smith, Leif Hickling, Paul Howell and William Henderson. Finally, he commended the efforts of Assistant U.S. Attorney Gary Wheeler, who secured the indictment in the case and handled the prosecution at trial.
13-037Demetrious Fields Sentenced to 444 Months for Racketeering, Drug Conspiracy and Money LaunderingRead the Press Release
Memphis, TN – Demetrious Fields, 42, of Memphis, TN was sentenced today by U.S. District Judge Samuel H. Mays, Jr. to 444 months in prison for his role in the Craig Petties Drug Trafficking Organization (DTO), announced U.S. Attorney Edward L. Stanton III and Resident Agent-in-Charge of the Drug Enforcement Administration’s Memphis office Brian Chambers.
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On October19, 2011, Fields pleaded guilty to one count of RICO conspiracy; one count of conspiracy to possess with intent to distribute more than five kilograms of cocaine, and one count of conspiracy to commit money laundering.
As outlined in the indictment, Fields was a member of a criminal racketeering enterprise, the Petties DTO, whose members conspired with cocaine traffickers in Mexico, Texas, Mississippi, North Carolina, Georgia, Tennessee, and elsewhere. As part of the conspiracy, cocaine was prepared, packaged and/or stored, prior to distribution to buyers in “stash houses.” The defendant and the co-conspirators used these “stash houses” to avoid detection by law enforcement authorities. It was further part of the conspiracy that the defendants and their co-conspirators sorted, counted, packaged, and stored large amounts of cash derived from the sale of controlled substances in various co-conspirators’ premises in the Western District of Tennessee. The co-conspirators delivered large amounts of currency derived from the sale of cocaine from the Western District of Tennessee and elsewhere to Texas and Mexico. In order to facilitate continued drug trafficking and in order to prevent others from cooperating with law enforcement authorities, it was further part of the conspiracy that the defendant and the co-conspirators did kill other people. Over thirty people have been charged and convicted as part of this investigation.
In addition to the prison sentence, Mays also ordered Fields to serve five years of supervised release and ordered him to pay $33,000 in restitution. There is no parole in the federal prison system.
The case was investigated by the Drug Enforcement Administration, the United States Marshals Service, the Memphis Police Department, the Shelby County Sheriff’s Department and the Olive Branch Police Department. The case is being prosecuted by Assistant United States Attorney David Pritchard on behalf of the government.Defendant sentenced to Nearly five years for role in tax fraud and drug conspiraciesRead the Press Release
U.S. Attorney Karen L. Loeffler announced today that Isaac Amparo-Vazquez, 30, also known as David Feliciano-Sanchez and Jesus Angel Quinones-Ortiz, of the Dominican Republic, was sentenced in federal court Friday for his role in drug and tax fraud conspiracies. Amparo-Vazquez, was sentenced by United States District Court Judge Timothy M. Burgess to 57 months in prison to be followed by 4 years of supervised release.
According to court documents, Amparo-Vazquez conspired to import over two kilograms of cocaine into Alaska. Amparo-Vazquez also conspired to use stolen Puerto Rican identities to file tax returns and obtain fraudulent income tax refunds. Amparo-Vazquez admitted to making false applications to the Alaska DMV to obtain identification documents in other names.In sentencing Amparo-Vazquez, Judge Burgess characterized the defendant’s crimes as “unconscionable.” The judge noted that not only did Amparo-Vazquez enter the United States illegally, but upon doing so, he helped import more than two kilograms of cocaine into Alaska. Then, as Judge Burgess stated, the defendant proceeded “to add insult to injury” by conspiring to “rip off” the United States Treasury for substantial sums of money. The United States estimates that the total loss intended by members of the conspiracy exceeded $25 million. Amparo-Vazquez was found personally responsible for cashing two Treasury checks totaling just over $11,000.
Court documents indicate that, between January 2010 and March 2012, Amparo-Vazquez and other co-conspirators defrauded the United States by filing false tax returns and claiming millions of dollars in tax refunds to which they were not entitled. To accomplish their tax refund scheme, the conspirators obtained the names and social security numbers of individuals from the Commonwealth of Puerto Rico. They then fabricated individual income tax returns in those names claiming that they were owed thousands of dollars in refunds to which they were not entitled.
According to documents filed by the United States, Amparo-Vazquez convinced certain of his friends and acquaintances to give him their addresses so that U.S. Treasury checks could be sent to the Anchorage area. Amparo-Vazquez also admitted that he obtained false identification documents from the Alaska DMV and then used these false identification documents to open a bank account, into which account he ultimately deposited a U.S. Treasury check with false endorsements. On those documents, he admittedly made false claims that he was a U.S. citizen, when in fact he was a Dominican citizen illegally in the United States.
Finally, Amparo-Vazquez admitted that, between December 31, 2011 and January 8, 2012, he conspired with his brother and others to arrange for two kilograms of cocaine to be shipped to Alaska for distribution. Amparo-Vazquez made telephone calls to discuss the prices to be paid for these two kilograms of cocaine.
“This sentencing is a testament to the results that can be obtained through the collaborative efforts of local, state, and federal law enforcement agencies,” said Tamera D. Cantu, Assistant Special Agent in Charge for the Internal Revenue Service-Criminal Investigation in Alaska. “IRS-CI and our partner agencies will continue to work vigorously to combat tax refund fraud. This sentence should serve as a deterrent to those that contemplate similar fraudulent actions.”
The case is being jointly prosecuted by Assistant U.S. Attorneys Thomas C. Bradley, James Barkeley, and Stephanie C. Courter of the U. S. Attorney’s Office for the District of Alaska. The case was investigated by the Internal Revenue Service Criminal Investigation (IRS-CI), U.S. Immigration and Customs Enforcement (ICE), which oversees Homeland Security Investigations (HSI), the U.S. Postal Inspection Service (USPIS), the U.S. State Department’s Diplomatic Security Service, and the Drug Enforcement Administration (DEA). Additional assistance was provided by the Tax Division of the United States Department of Justice as well as the U.S. Attorney’s Offices for the District of New Jersey, the Eastern District of Pennsylvania, and the Southern District of New York.
Dealership Office Manager Pleads Guilty to Bank FraudRead the Press Release
ALEXANDRIA, La: United States Attorney Stephanie A. Finley announced today that Dianne Handy, 43, of Alexandria, La., pleaded guilty Wednesday before U.S. District Judge Dee D. Drell to defrauding more than $57,894 from Leglue Nissan where she was office manager.
Handy pleaded guilty to one count of bank fraud involving credit card transactions she processed through Peoples State Bank. According to court documents, Handy fraudulently caused Leglue Nissan in Alexandria to issue refunds to her own credit cards more than 72 times between July 2009 and July 2011 for a total of $57,894. As office manager, Handy was responsible for handling the dealership’s daily cash deposits, processing credit card transactions and making salary payments.
Handy faces a maximum penalty of 30 years in prison, a $1 million fine or both, and five years of supervised release for the count of bank fraud. Handy is scheduled to appear April 3, 2013, for sentencing in U.S. District Court in Alexandria.
The U.S. Secret Service, Baton Rouge Office, conducted the investigation. Assistant United States Attorney Howard Parker is prosecuting the case.
Davenport Man Sentenced to 15 Years in Prison for Methamphetamine and Gun OffensesRead the Press Release
DAVENPORT, IA – On February 1, 2013, Steven Michael Gruetzmacher, age 46, of Davenport, Iowa, was sentenced to 180 months imprisonment for conspiring to manufacture and distribute methamphetamine and for possessing firearms in furtherance of a drug trafficking crime, announced United States Attorney Nicholas A. Klinefeldt. United States District Judge Stephanie M. Rose also sentenced Gruetzmacher to 5 years supervised release.
Gruetzmacher agreed with others to manufacture and distribute methamphetamine from July 2011 through early March 2012. Gruetzmacher manufactured and distributed methamphetamine on multiple occasions over the course of the conspiracy.
The case was investigated by the Drug Enforcement Agency and the Davenport, Iowa, Police Department, and was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
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Davenport Man Sentenced in Connection with Marijuana ConspiracyRead the Press Release
DAVENPORT, IA – On February 1, 2013, Jonathan Lamont Morning, age 34, of Davenport, was sentenced to 120 months imprisonment, announced United States Attorney Nicholas A. Klinefeldt. United States District Judge John A. Jarvey also sentenced Morning to five years supervised release following imprisonment, ordered him to pay a $100 special assessment to the crime victim fund, and ordered him to forfeit $10,182 in cash seized during the investigation.
On January 27, 2012, Morning was arrested by Davenport, Iowa, police while making a delivery of 10 pounds of marijuana. Police subsequently recovered another 100 pounds of marijuana from Morning’s residence. The investigation revealed that Morning was involved in an interstate marijuana trafficking conspiracy with another Davenport resident, Earl Buckner. Buckner was sentenced on April 13, 2012, to 60 months imprisonment.
This case was investigated by the Davenport, Iowa, Police Department, the Iowa Division of Narcotics Enforcement, and the United States Drug Enforcement Administration, and the case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
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Clinton Woman Pleads Guilty to Filing False Returns; Faces up to 3 Years in PrisonRead the Press Release
DAVENPORT, IA – On February 1, 2013, Regina Jimenez, age 60, of Clinton, Iowa, pled guilty to two counts of filing false tax returns, announced United States Attorney Nicholas A. Klinefeldt. Jimenez faces up to 3 years imprisonment, a fine of up to $1,000,000 and costs of prosecution on each count.
Jimenez operated AA Accounting & Tax Services, Inc. in Clinton, Iowa from approximately 2007 through 2011. Jimenez used the business to facilitate the theft of over $200,000 from a client who believed that Jimenez would use the money to pay the client’s taxes. Jimenez instead used the money for personal expenditures and did not report the stolen funds on her tax returns.
The case was investigated by Internal Revenue Service - Criminal Investigation, and is being prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
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Christopher Wayne Williams Sentenced in U.S. District CourtRead the Press Release
The United States Attorney's Office announced that during a federal court session in Missoula, on February 1, 2013, before U.S. District Judge Dana L. Christensen, CHRISTOPHER WAYNE WILLIAMS, a 38-year-old resident of Helena, appeared for sentencing. WILLIAMS was sentenced to a term of:
Prison: 5 years (Count VI) plus 130 days (Count III)
Special Assessment: $200
Supervised Release: 5 years
WILLIAMS was convicted on September 27, 2012, following a 4 day trial in federal district court in which he was found guilty of conspiracy to manufacture, distribute, and possess with intent to distribute marijuana, manufacture of marijuana, possession with the intent to distribute marijuana, and possession of a firearm during a drug trafficking offense.
Following WILLIAMS' conviction on all counts, the parties reached a post-conviction agreement in which the United States agreed to dismiss Counts I, II, VI, V, VII, and VIII, in exchange for WILLIAMS' waiver of appeal. WILLIAMS was only sentenced on Counts III and VI.
The facts established at trial proved the following:
In late 2010, the federal government began to investigate Montana Cannabis. The investigation was prompted, in part, because of complaints from the public about the activities at the former State Nursery facility. It was also prompted by complaints from employees of Montana Cannabis about WILLIAMS' volatile behavior. The employees were also worried about the manner in which firearms were part of the culture of the grow operation.
Accordingly, a number of federal agencies began to investigate the conspiracy. The investigation was extensive and included close scrutiny of the conspiracy's banking practices.
On March 14, 2011, search warrants were executed at the Helena grow operation and dispensary, the Flor residence, the Billings dispensary, and the Missoula dispensary. About 950 plants were found at the Helena grow operation. Firearms were also found at that location placed in a manner clearly intended to protect the operation from robbery. Several of the firearms were associated with Dan Nichols, a notorious criminal who served as "armed security" at the Helena grow operation. Significant amounts of marijuana were also found at the Billings, Helena, and Missoula dispensaries.
WILLIAMS showed up at the greenhouse in Helena during the search. He stated that the operation there had produced 56 cycles, each of which yielded 150 to 200 ounces of marijuana. Using the lower estimate of 150 ounces per cycle, and assuming each ounce sold at a conservative $200 an ounce, the Helena operation yielded $1,680,000 over the course of the conspiracy. Combined with the amount of proceeds produced at the Miles City address, the conspiracy produced a total of at least $1,728,000 in marijuana.
The search of the Flor residence in Miles City disclosed the presence of marijuana prepared for distribution. An extensive cache of firearms was also found in the residence. Many of those firearms were placed in a manner so that they could be used to protect the operation.
Justin Flor was at the Billings dispensary when it was searched. He had a pistol in the waistband of his pants. Justin Flor stated that his family was preparing to grow marijuana in Miles City as part of its annual outdoor grow. Justin Flor disclosed that Montana Cannabis used bank accounts and he deposited money from the sale of marijuana into at least one of the banks accounts.
Assistant U.S. Attorney Joseph E. Thaggard and Paulette L. Stewart prosecuted the case for the United States.
Following the sentencing, United States Attorney Michael W. Cotter said, "Williams repeated claims of "compliance" with Montana law are simply false. Williams is a convicted marijuana dealer who operated a drug trafficking organization outside both federal and state law. It is also important to remember that Williams used not one, but several weapons in furtherance of his drug trafficking crime. He will serve the remainder of his incarceration in a federal penitentiary. Marijuana, along with heroin, LSD and Ecstasy are all Schedule I controlled substances. Schedule I substances are defined as having no currently accepted medical use in the United States, a lack of accepted safety for use under medical supervision, and a high potential for abuse."
Because there is no parole in the federal system, the "truth in sentencing" guidelines mandate that WILLIAMS will likely serve all of the time imposed by the court. In the federal system, WILLIAMS does have the opportunity to earn a sentence reduction for "good behavior." However, this reduction will not exceed 15% of the overall sentence.
The investigation was conducted by the following federal, state and local law enforcement agencies: the Drug Enforcement Administration, U.S. Immigration and Customs Enforcement's Homeland Security Investigations, Criminal Investigation Division of the Internal Revenue Service, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Federal Bureau of Investigation, the Environmental Protection Agency-Criminal Investigation Division, U.S. Customs and Border Protection-Border Patrol, and the Occupational Safety and Health Administration. These federal agencies were assisted by local High Intensity Drug Trafficking Area task forces, the Northwest Drug Task Force, the Kalispell Police Department, the Flathead County Sheriff's Office, the Missoula Police Department, the Missoula County Sheriff's Office, the Missoula High Intensity Drug Trafficking Area (HIDTA) Task Force, the Great Falls Police Department, the Cascade County Sheriff's Office, the Central Montana Drug Task Force, the Billings Police Department, the Yellowstone County Sheriff's Office, the Eastern Montana High Intensity Drug Trafficking Area (HIDTA) Task Force, the Dillon Police Department, the Beaverhead County Sheriff's Office, the Park County Sheriff's Office, the Bozeman Police Department, the Gallatin County Sheriff's Office, the Belgrade Police Department, the Missouri River Drug Task Force, the Helena Police Department, the Lewis & Clark Sheriff's Office, and the Eastern Montana Drug Task Force - Miles City.
Chinese National Sent to Prison in Nearly $1 Million Bank Fraud/Identity Theft ScamRead the Press Release
HOUSTON – Xin Gu, 29, of Dalian, China, has been sentenced to prison following his convictions of conspiracy to commit bank fraud and aggravated identity theft, United States Attorney Kenneth Magidson announced today. Gu entered a plea of guilty on Tuesday, July 10, 2012, after hearing a day of trial testimony in federal court in Houston.
Today, U.S. District Judge Gray H. Miller handed Gu 30 months for the bank fraud conviction and an additional 24 months on the aggravated identity theft which must be served consecutively for a total sentence of 54 months in federal prison. Gu is expected to face deportation proceedings following his release from prison.
On Feb. 3, 2012, Gu was arrested after he posed as someone else in a Chase bank in Houston. He had presented a fraudulent passport with his picture and someone else’s information as well as other fraudulent identification documents bearing the victim’s name and identifying information. At the time of his arrest, Gu also had other receipts and withdrawal slips for other withdrawals made on the victim’s account that same day.
Seven days prior to that arrest, a fictional authorized user had been added to the victim’s business and personal accounts at a Chase Bank branch in New York without the victim’s knowledge by a man posing as the victim. Subsequently, another woman - posing as that fictional account user - then also began making withdraws on the victim’s account in Houston.
Gu and the woman posing as the victim and fictional authorized user, respectively, made withdrawals from the victim’s business and personal accounts totaling approximately $980,000 in a seven-day period. One of those purchases included a $236,000 Mercedes Benz purchased with a cashier’s check. Items found in the Mercedes allowed Secret Service agents to determine Gu knew the woman posing as the fictional account user.
The investigation into the conspiracy is ongoing.
Gu has been in custody since the date of his arrest where he will remain pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The charges brought against Gu were the result of a an investigation by the United States Secret Service. This case was prosecuted by Assistant United States Attorneys John Jocher and Andrew Leuchtmann.
Chinese National Pleads Guilty to Smuggling Counterfeit Tobacco Products to U.S.Read the Press Release
PROVIDENCE, R.I. – Lin Xiao Wei, 32, a Chinese national, pleaded guilty in U.S. District Court in Providence today to importing counterfeit tobacco products into the United States from China, earmarked for Rhode Island. Wei admitted to the court that beginning in February 2012, he arranged for the shipment of a 22-foot cargo container containing counterfeit cigarettes.
Wei, who has been detained since his arrest in Miami on June 4, 2012, by the Rhode Island Food and Drug Administration, Office of Criminal Investigations (FDA-OCI) Task Force, pleaded guilty in federal court in Providence today to one count of causing the sale of counterfeit tobacco products.
Wei’s guilty plea was announced by Peter F. Neronha, United States Attorney for the District of Rhode Island, and Mark Dragonetti, Special Agent in Charge, FDA Office of Criminal Investigations (FDA-OCI).
Appearing before U.S. District Court Judge John J. McConnell, Jr., Wei admitted that he arranged for the purchase and shipment from China to the United States of a 20-foot cargo container of counterfeit Marlboro cigarettes. The cargo container, which shipping documentation claimed contained 696 cartons of leather products, was shipped from a port in China on March 27, 2012.
Between the time Wei allegedly agreed to ship the fraudulent tobacco products to the U.S., and the arrival of the cargo container through a port in Miami on April 27, 2012, several wire transactions were sent to Wei for the cost of the product and associated shipping fees. Upon arrival in Miami, FDA-OCI and Homeland Security Investigations agents seized the container.
According to information presented to the court, on June 3, 2012, Wei met at a Miami hotel with a confidential informant who was working with investigators, and an undercover FDA-OCI Task Force agent from Rhode Island. Wei discussed the shipment of the fraudulent tobacco products, as well as previous shipments of counterfeit pharmaceutical products and the availability of other fraudulent products.
Wei is scheduled to be sentenced on April 10, 2013. Causing the sale of counterfeit tobacco products carries a maximum sentence of 3 years in federal prison; a fine of $10,000; and 3 years of supervised release.
U.S. Attorney Peter Neronha thanked Wifredo A. Ferrer, United States Attorney for the District of Southern Florida, and his staff, for their assistance in this matter.
U.S. Attorney Neronha also commended FDA-OCI Rhode Island Task Force members, Rhode Island State Police, East Providence Police and North Providence Police for their efforts in this multi-jurisdictional investigation.
U.S. Attorney Peter Neronha also thanked Homeland Security Investigations and the Bureau of Alcohol, Tobacco, Firearms and Explosives for their assistance in this investigation.
The case is being prosecuted by Assistant U.S. Attorneys Richard B. Myrus and Adi Goldstein.
Contact: 401-709-5357
[email protected]Capitol Heights Pimp Sentenced to over 12 Years in Prison for Sex Trafficking of MinorsRead the Press Release
Greenbelt, Maryland - Chief U.S. District Judge Deborah K. Chasanow sentenced Dennis Smith, a/k/a Domo, age 31, of Capitol Heights, Maryland, today to 150 months in prison, followed by 10 years of supervised release, for transporting a minor to engage in prostitution and sex trafficking of a minor.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation.
"The sexual victimization and trafficking of children is among the highest criminal investigative priorities for the FBI here in Maryland," said Stephen Vogt, Special Agent in Charge of the FBI's Maryland office. "This case highlights the exemplary work of the Maryland Child Exploitation Task Force and further validates the significant resources incorporated into working jointly with our law enforcement partners. The FBI pledges our firm commitment in finding, investigating and prosecuting individuals who prey on young victims."
According to Smith’s plea agreement, in October 2011, Smith met a 16 year old female on a social networking site. After a month of engaging in computer chats and text messaging, Smith drove to the girl’s home and picked her up. After picking up two adult women, Smith drove them all to Richmond, where the women engaged in prostitution. Smith had the girl collect the money made by the two women for two days. Smith then photographed and advertised the girl online for sexual services. The 16 year old engaged in commercial sex acts and provided the money she made to Smith. Smith then drove the three females back to Maryland, where he again advertised the 16 year old for sexual services. The next day the girl returned home.
In February 2012, Smith again picked up the 16 year old and another 15 year old female from their high school and took them back to his home. In March 2012, law enforcement was notified that Smith was prostituting the 15 year old girl at a hotel in New Carrollton, Maryland, through an online advertisement. An undercover law enforcement officer set up a “date” with the 15 year old girl. When the officer arrived at the hotel, he identified the 15 year old girl, as well as a 17 year old girl, who were engaged in prostitution. Smith was arrested at the hotel and his laptop and cell phone were seized along with tattoo equipment.
Smith admitted that he brought the 15 and 17 year old girls to his hotel where he photographed them and advertised them online for sexual services. Smith instructed the younger girl on how much to charge clients for sexual services and she provided the money she made from prostitution to Smith. There were text messages on Smith’s cell phone between Smith and the girls that related to the girls engaging in prostitution. Both the 15 and 16 year old girls were tattooed with Smith’s nickname,“Domo.”
This case is part of the Maryland Child Exploitation Task Force efforts to combat child prostitution. The Task Force, created in 2010 is comprised of 15 members representing 10 agencies, both state and federal. Since October 2011, the TF has recovered 32 juveniles and investigated 25 cases that have resulted in state and federal prosecutions. The Task Force coordinates with the National Center for Missing and Exploited Children and the Maryland State Police Child Recovery Unit to identify missing children being advertised online for prostitution.
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 "resources" tab on the left of the page.
United States Attorney Rod J. Rosenstein commended the FBI for its work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Kristi N. O’Malley and Special Assistant U.S. Attorney LisaMarie Freitas of the U.S. Justice Department, Criminal Division, Child Exploitation and Obscenity Section, who are prosecuting the case.
Boca Raton Chiropractor Sentenced for Conspiracy to Commit Mail Fraud in Connection with Staged Accident SchemeRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Michael B. Steinbach, Acting Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, Jose A. Gonzalez, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), and Jeff Atwater, Florida Chief Financial Officer, announced that defendant Jennifer Adams, 39, of Boca Raton, a chiropractic doctor, was sentenced yesterday to 54 months in prison, to be followed by 3 years of supervised release. She was also ordered to pay restitution of $1,920,424.83. Adams previously pled guilty to a one-count Information charging her with conspiring with others to commit mail fraud for her role in a staged accident fraud scheme.
According to court documents, to execute the fraud scheme, the recruiters sought out drivers and their friends/family members to participate in staged accidents. Under Florida’s “No Fault” insurance law, insurers are required to provide Personal Injury Protection (PIP) coverage of $10,000 per person. The recruiters referred to the individuals whom they recruited as the “Perro” and the “Perra.” The “Perro” was the person who “caused” the staged accident. The “Perra” was the person who was the “victim” of the staged accident and whose car was struck by the “Perro’s” car. Thus, if the recruiter found a Perro with a wife and two children and a Perra with two friends, for a total of seven (7) participants, the maximum PIP benefit was $70,000.
Once the recruiters found the participants, they coached the participants on how to perform the staged accident, what to say to the police officer who responded to the scene, and on how to claim that they had been injured. Thereafter, the accident was staged. After impact, a police officer was called, and a police report was filed. After the staged accident, the Perro and Perra filed false claims with their insurance companies, alleging that they and their family members were injured.
Court documents state that the accident participants were then directed by the recruiters to chiropractic clinics that were controlled by co-defendants. The staged accident participants completed paperwork falsely asserting that they suffered injuries during the staged accident. The co-conspirators advised the participants on how to fill out the paperwork and what to say if an insurance investigator interviewed them about their injuries or treatment. The staged accident participants were instructed to sign numerous blank treatment forms that would later be submitted indicating that they had visited the clinic on a number of separate occasions for treatment, although they may have visited the clinic only once or twice. During their visits, some staged accident participants received no treatment at all, or may have received only a short exam or treatment from the chiropractor or LMT but the paperwork completed by the LMTs and chiropractors, including Dr. Adams, indicated that a full and lengthy exam and treatment was given.
According to court documents, Adams agreed to place her name on the corporate paperwork for two clinics, thus utilizing her status as a licensed Chiropractic Physician, to allow the clinics to bill insurance companies directly for PIP claims without obtaining additional licensure from the State of Florida. Those clinics were Ovy Rehabilitation Medical Center, Inc. (OVY) in West Palm Beach, Florida and Chiropractic Office of South Florida, LLC (COSF) in Palm Springs, Florida. Although Adams was named as the owner of the clinic on the corporate paperwork, the co-conspirators maintained control of the bank account and running the operations of the clinics.
Court documents state that Adams initially believed the clinics to be operating legitimately. Sometime thereafter, Adams became aware that her license and status as a Chiropractor was being used to fraudulently submit claims by U.S. Mail to insurance companies. Adams realized these patients did not require the medical treatment they sought. Adams continued to work at both clinics signing prescriptions for plans of treatment that she knew were not medically necessary and that she knew were being submitted for reimbursement to numerous insurance companies. According to court documents, from the time that Adams was told about the fraud until the clinics were closed by law enforcement, the clinics submitted fraudulent claims that resulted in more than ten insurance companies making total payments of $1,920,424.83. Defendant Adams received a salary for her work as a chiropractic physician paid from the COSF and OVY checking accounts. The bulk of the proceeds of the fraud were taken by co-conspirators.
Mr. Ferrer commended the investigative efforts of the FBI, IRS-CI, and the Florida Department of Insurance Fraud, and issued a special thanks to the National Insurance Crime Bureau (NICB) for its assistance in this investigation. Mr. Ferrer also thanked the members of the Greater Palm Beach Health Care Fraud Task Force. The case is being prosecuted by Assistant U.S. Attorney A. Marie Villafaña.
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.
Armed Bank Robber Sentenced on Bank Robbery and Firearms ChargesRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Michael B. Steinbach, Acting Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, W. Howard Harrison, Chief, Plantation Police Department, and Anthony Strianese, Chief, Delray Beach Police Department, announce that Bryan Whitehead, 32, of Miami, was sentenced today before U.S. District Judge William J. Zloch, in connection with his previous convictions after trial for bank robbery, in violation of Title 18, United States Code, Section 2113(a) and the use of a firearm during and in relation to a crime of violence, in violation of Title 18, United States Code, Section 924(c).
At today’s hearing, U.S. District Judge William J. Zloch sentenced defendant Bryan Whitehead to 471 months in prison (39.25 years) to be followed by five years of supervised release upon his release from imprisonment.
According to the Indictment, in court statements, and documents filed with the court, on May 1, 2010, a black male, later identified as Bryan Whitehead, wearing a dark nylon covering on his face, royal blue surgical scrubs, and brandishing a dark colored handgun, entered Bank of America, located at 7215 W. Atlantic Boulevard, in Delray Beach, Florida. Whitehead forced customers to the floor at gunpoint and accompanied bank employees to the vault area where he made the bank manager open one of the vault drawers. Whitehead also took money from several teller drawers and removed dye packs from the bank loot prior to departing the bank. Whitehead escaped with approximately $30,000 in cash.
Thereafter, on Monday, May 21, 2012, Whitehead entered the BB&T branch located at 450 Pine Island Road, in Plantation, Florida. Whitehead, who was wearing khaki pants and holding a firearm, entered the bank and forced a bank customer to the ground at gunpoint before pulling a black beanie over his face. From the lobby, Whitehead pointed a firearm at a bank teller and demanded that she open the door to the teller area. Whitehead removed the cash from the teller drawers and placed the cash in a dark colored cloth sack. Whitehead then demanded at gunpoint that the tellers open the vault. Once inside the vault area, Whitehead filled a cloth sack with in excess of $13,990 and thereafter fled the bank. Ultimately, Plantation Police Department captured Whitehead in a nearby gas station parking lot. During a search of the Defendant’s vehicle, officers recovered the firearm used during the commission of the offense, Whitehead’s disguise, a police scanner, and the stolen money.
Mr. Ferrer commended the investigative efforts of the FBI, the Plantation Police Department, and the Delray Beach Police Department. This case was prosecuted by Assistant U.S. Attorney Marc Anton.
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.
5 Area Residents Charged in Tax Fraud SchemeRead the Press Release
BROWNSVILLE, Texas – Five family members have been charged in an eight-count indictment alleging a tax fraud scheme that involved filing false tax returns on behalf of deceased individuals, United States Attorney Kenneth Magidson announced today along with Internal revenue Service-Criminal Investigation Special Agent in Charge Lucy Cruz.
The indictment alleges Judy Lynn McCune recruited members of her family, including her mother Loretta Ann McCune, sister Rania Ann Sanchez and sons Robert Gutierrez and Edward Gutierrez in the scheme to prepare federal tax returns and cash United States Treasury refund checks in the name of deceased individuals.
Just moments ago, Judy Lynn McCune, Sanchez and Edward Gutierrez turned themselves in to federal authorities and are expected to appear before U.S. Magistrate Judge Felix Recio today at 10:00 a.m. Loretta Ann McCune is expected to also turn herself in sometime in the near future. A warrant remains outstanding for Robert Gutierrez.
“Investigating identity theft and refund fraud is a priority for IRS-CI,” said Cruz. “Stealing identities and filing false tax returns is a serious crime that hurts innocent taxpayers. These indictments should serve as a strong warning to those who are considering similar conduct. IRS-CI is serious about investigating these crimes and holding to account those who would defraud the government.”
Judy Lynn McCune allegedly recruited her mother to prepare and file the false returns, while her sister and sons cashed refund checks issued in the name of deceased individuals, according to the indictment. The conspiracy allegedly involved obtaining Social Security numbers and dates of birth for deceased individuals through the Internet and then filing both paper and electronic federal income tax returns using the identifiers of these deceased individuals. The refunds were allegedly directly deposited in the personal bank account or mailed to the personal addresses of the accused. The indictment alleges the total scheme consisted of approximately 340 false claims totaling $763,124.
Loretta Ann McCune, Robert Gutierrez and Edward Gutierrez are charged with filing false, fictitious or fraudulent claims. The indictment further charges Judy Lynn McCune and Loretta Ann McCune with aggravated identity theft for their unlawful use of the deceased individuals name and Social Security numbers as well as theft of government money in connection with the falsely filed returns.
If convicted of the scheme to prepare federal tax returns and cash the refund checks in the name of deceased persons, all face up to 10 years in prison and a possible $250,000 fine. Judy Lynn and Loretta Ann McCune also face the same punishment if they are convicted of theft of government money. Loretta Ann McCune, Robert Gutierrez and Edward Gutierrez face a possible sentence of five years in prison if convicted of filing false, fictitious or fraudulent claims. If convicted of aggravated identity theft, Judy Lynn McCune and Loretta Ann McCune will receive an additional mandatory two-year prison term that must be served consecutive to any other prison term imposed.
IRS investigated and Assistant United States Attorney Karen Betancourt is prosecuting the case.
An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.3rd Defendant in Rhode Island's Largest Cocaine Bust Sentenced to 15 1/2 Years in Federal PrisonRead the Press Release
PROVIDENCE, R.I. – Andrew Rios, 41, of California, was sentenced today in U.S. District Court in Providence to 188 months in federal prison on drug trafficking charges, announced United States Attorney Peter F. Neronha and Rhode Island Attorney General Peter F. Kilmartin. Rios was arrested in January 2011 in connection with the seizure of 65 kilos of cocaine and more than $1.2 million in cash, the single largest seizure of cocaine in Rhode Island.
U.S District Court Judge William E. Smith also ordered Rios to serve 5 years of supervised release upon completion of his prison term. Rios pleaded guilty on October 1, 2012, to one count of conspiracy to distribute and possess with the intent to distribute five kilograms or more of cocaine and one count of possessing with the intent to distribute five kilograms or more of cocaine.
Two other defendants who were arrested with Rios previously pleaded guilty to trafficking charges and have been sentenced to lengthy federal prison sentences. Armando Saucedo, 33, of California, was sentenced on November 1, 2012, to 156 months in prison; Adilson A. Reyes, 31, of Utah, was sentenced November 5, 2012, to 135 months in prison.
Beginning in September 2010, federal, state and local law enforcement agents, working in conjunction with the Rhode Island Attorney General’s office, developed information about the trafficking of cocaine from outside of Rhode Island into the state. As a result, law enforcement monitored activity at hotels in West Greenwich and Pawtucket, at a storage facility in North Kingstown, and several vehicles. In January 2011, law enforcement agents executed court authorized searches of the storage facility in North Kingstown and of two vehicles. 65 kilos of cocaine, $1.2 million in cash and a firearm were seized.
The cases were prosecuted by Assistant U.S. Attorneys Sandra R. Hebert and Paul F. Daly, Jr.
Contact: 401-709-5357
[email protected]
Thursday 31 January 2013
ormer Maryland National Guard Employee at Aberdeen Proving Ground Pleads Guilty to Fraud Scheme with Losses of More than $107,000Read the Press Release
Baltimore, Maryland - Lynn Carol Williams, age 56, of Middle River, Maryland pleaded guilty today to wire fraud in connection with a scheme to misuse the corporate purchasing card and cause losses of more than $107,000 to the Freestate Challenge Academy, a Maryland National Guard program located at Aberdeen Proving Ground.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; Special Agent in Charge Robert Craig of the Defense Criminal Investigative Service - Mid-Atlantic Field Office and Chief Chip Honan of the Aberdeen Proving Ground Police Department.
According to her plea agreement, from October 2007, through February 2011, Williams worked as an administrative aide at Freestate Challenge Academy, a Maryland National Guard youth training program located at Aberdeen Proving Ground. Williams was authorized to use the Academy’s corporate credit card to make purchases for the Academy, and was required to prepare a monthly expense report, which included the purchasing card billing statement, original receipts, copies of the approved requisition forms, and a log of activity on the purchasing card. Once her supervisor approved the expense report, it was forwarded to the State of Maryland Military Department, which paid the account balance on the corporate purchasing card.
Williams admitted that from February 2008, through October 2010, she used the corporate credit card to buy gift cards and items over the internet for her personal use. For example, on May 18, 2010, Williams paid for two airline tickets for her and a friend to travel to Los Angeles, California, with six gift cards purchased with the corporate credit card. To conceal her fraud, Williams prepared false logs of the card activity and fictitious receipts, purportedly for office supplies, snacks for program participants and other legitimate items purchased from local stores.
Williams faces a maximum sentence of 20 years in prison for wire fraud. U.S. District Judge Richard D. Bennett scheduled sentencing for May 6, 2013 at 3:00 p.m.
United States Attorney Rod J. Rosenstein praised the FBI, Defense Criminal Investigative Service and Aberdeen Proving Ground Police for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Joyce K. McDonald, who is prosecuting the case.
Woodland Park, N.J. Man Admits Scheme to Defraud More Than 17 Charities and Non-Profit OrganizationsRead the Press Release
NEWARK, N.J. – The owner and president of GAC Consulting Group LLC (“GAC”) today admitted his role in a scheme to defraud at least 17 charities and non-profit organizations, costing them more than $750,000 in losses, U.S. Attorney Paul J. Fishman announced.
Gregory Ciccone, 36, of Woodland Park, N.J., pleaded guilty before U.S. District Judge Katharine S. Hayden in Newark federal court to one count of wire fraud and one count of filing a false tax return. On Oct. 26, 2010, Ciccone was arrested and charged with mail fraud and wire fraud in connection with his charity fraud scheme, which promised high-end prizes that were never delivered.
A Superseding Indictment returned by a federal grand jury on May 15, 2012, charged Ciccone with mail fraud, wire fraud and filing a false 2009 tax return.
According to documents filed in the case and statements made in court:
Ciccone owned and operated GAC, a business which contracted with charities and non-profit organizations and arranged for high-end prizes to be auctioned off to bidders during fund-raising events. They included: a walk-on role on the “Desperate Housewives” television show; tickets to the 2009 Tony Awards; an appearance by “C.A.,” a celebrity who is a cancer survivor; and rounds of golf at the Augusta National Golf Course in Augusta, Ga.
Ciccone convinced the charities and non-profit organizations to pay GAC both an up-front retainer and commission fees based upon his ability to provide certain prizes. Ciccone not only did not deliver the vast majority of the prizes offered to his victims, he never had the ability to do so. From October 2006 through April 2010, Ciccone’s actions caused more than $768,000 in losses to at least 17 different charities and non-profit organizations.
After his Oct. 26, 2010, arrest, Ciccone filed a false 2009 tax return on May 13, 2011, in which he failed to list certain retainer fees and commissions received from his victims, as well as gambling winnings. As part of his plea, Ciccone agreed to pay back $267,778 in criminal forfeiture.
The fraud charges to which Ciccone pleaded guilty are punishable by a maximum penalty of 20 years in prison and a maximum fine of $250,000, or twice the gain or loss caused by the offense; and a maximum penalty of three years in prison and a fine of $100,000 on the tax fraud count. Judge Hayden continued Ciccone’s bail pending sentencing. Sentencing is scheduled for May 14, 2013.
U.S. Attorney Fishman credited special agents with the FBI under the direction of Acting Special Agent in Charge David Velazquez, special agents of the IRS - Criminal Investigation, under the direction of Acting Special Agent in Charge Shantelle P. Kitchen, and criminal investigators with the U.S. Attorney’s Office’s criminal investigator program, for the investigation leading to the guilty plea.The government is represented by Assistant U.S. Attorneys Joseph Mack and Kathleen P. O’Leary of the U.S. Attorney’s Healthcare and Government Fraud Unit.
13-057
Defense counsel: Salvatore T. Alfano Esq., Bloomfield, N.J., and Louis C. Esposito Esq., Cedar Grove, N.J.
Ciccone, Gregory Superseding Indictment
Woman Indicted in Ocala for Theft of Nearly $1 Million Dollars of Treasury Department FundsRead the Press Release
Ocala, FL - United States Attorney Robert E. O'Neill announces the return by a grand jury of an indictment charging Centerria Shantia Farmer with theft of funds belonging to the U.S. Department of the Treasury. If convicted, Farmer faces a maximum penalty of 10 years in federal prison. The indictment also notifies Farmer that the United States is seeking a money judgment in the amount of $902,639.78, which represents the proceeds of the theft of government property.
An indictment is merely a formal charge that a defendant has committed a violation of the federal criminal laws, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by the Internal Revenue Service Criminal Investigation and the United States Secret Service. It will be prosecuted by Assistant United States Attorney Diidri W. Robinson.
Woman Indicted for Theft of Government PropertyRead the Press Release
Tampa, Florida - United States Attorney Robert E. O'Neill announces the unsealing of an indictment charging Kayla Noble with 12 counts of theft of government property. If convicted, she faces a maximum penalty of 10 ten years in federal prison for each count.
According to the indictment, Noble stole federal income tax refunds that were fraudulently issued in the names of 12 different taxpayers. The total loss to the United States Treasury from the fraudulently obtained income tax refunds was $102,237.
An indictment is merely a formal charge that a defendant has committed a violation of the federal criminal laws, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by the Internal Revenue Service Criminal Investigation. It will be prosecuted by Assistant United States Attorney Matthew J. Mueller.
Virginia, Minnesota, Felon Pleads Guilty to Possessing A .38-caliber RevolverRead the Press Release
MINNEAPOLIS—Earlier today in federal court, a 48-year-old felon from the northern Minnesota community of Virginia pleaded guilty to possessing a .38-caliber revolver. John Carl Pape specifically pleaded guilty to one count of being a felon in possession of a firearm. Pape, who was indicted on October 15, 2012, entered his plea before United States District Court Judge Patrick J. Schiltz.
In his plea agreement, Pape admitted possessing the Smith & Wesson, five-shot revolver on May 6, 2012. On that day, police received a complaint that two vehicles had been vandalized in a church parking lot in Eveleth, Minnesota. One of the victims stated that her purse was stolen, and that it contained the gun and credit cards, among other items. Later that day, Pape was questioned by authorities and admitted attempting to make purchases and withdrawals with the victim’s stolen credit card. During the subsequent execution of a search warrant at Pape’s residence on May 6 and 7, 2012, officers seized items linked to the theft, including the gun.
Because he is a felon, Pape is prohibited under federal law from possessing firearms at any time. His previous St. Louis County convictions include third-degree burglary (1991 and 2004), fifth-degree possession of drugs (2007 and 2008), and fifth-degree sale of marijuana (1998).Since at least three of Pape’s prior convictions constitute crimes of violence or major drug crimes, he is subject to the federal Armed Career Criminal Act if convicted in the current federal case. That act mandates a minimum of 15 years in federal prison. For his crime, Pape faces a potential maximum penalty of life in prison. Judge Schiltz will determine Pape’s sentence at a future hearing, not yet scheduled.
This case is the result of an investigation by the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives. It is being prosecuted by Assistant U.S. Attorney Thomas M. Hollenhorst.Virginia Man Sentenced to 37 Months in Prison for Role in Bribery and Kickback Scheme Involving Government Contracts-Defendant and His Father Laundered $401,000 in Payments to RelativeRead the Press Release
Who Threatened to Expose the Scheme-WASHINGTON – Lee A. Khan, 32, of Fairfax, Va., was sentenced today to 37 months in prison for his role in a money laundering scheme meant to keep law enforcement from learning about a larger conspiracy involving bribery, kickbacks and federal government contracts.
Khan pled guilty in May 2012 in the U.S. District Court for the District of Columbia to a charge of conspiracy to commit money laundering. Among other things, he admitted scheming to channel more than $400,000 to a relative who threatened to expose wrongdoing involving millions of dollars in government contacts issued through the U.S. Army Corps of Engineers.
The sentencing was announced by U.S. Attorney Ronald C. Machen Jr.; Debra Evans Smith, Acting Assistant Director in Charge of the FBI’s Washington Field Office; Sheila Olander, Acting Special Agent in Charge of the Washington Field Office of the Internal Revenue Service-Criminal Investigation (IRS-CI); Peggy E. Gustafson, Inspector General for the Small Business Administration (SBA); Robert E. Craig, Special Agent in Charge of the Mid-Atlantic Field Office of the Defense Criminal Investigative Service (DCIS), and Frank Robey, Director of the U.S. Army Criminal Investigation Command’s Major Procurement Fraud Unit (MPFU).
Khan was sentenced by the Honorable Emmet G. Sullivan. As part of his plea agreement, Khan agreed to forfeit his interest in more than $1 million in bank account funds, 13 properties in Virginia, Florida, and West Virginia, and a Rolex watch. In addition, Judge Sullivan ordered him to join other conspirators in paying $401,000 in restitution to the federal government. Following completion of his prison term, Khan will be placed on three years of supervised release.
A total of 12 people have pled guilty to charges in the largest domestic bribery and bid-rigging scheme in the history of federal contracting cases, and Khan was the eighth defendant to be sentenced. All of those sentenced so far have received prison terms. All told, corrupt public officials agreed to steer government contracts from the U.S. Army Corps of Engineers and the U.S. Department of the Army in exchange for more than $30 million in bribe and kickback payments. The investigation is continuing.
Khan is one of three family members charged in the case. His father, Kerry F. Khan, 55, a former program manager for the U.S. Army Corps of Engineers, pled guilty in May 2012 to charges of bribery and conspiracy to commit money laundering in a scheme in which he received or was promised more than $26 million in payments from various contractors who submitted fraudulently inflated invoices to the government. The contracts were awarded through the U.S. Army Corps of Engineers and the Department of the Army. His uncle, Nazim Khan, 50, pled guilty to a charge of conspiracy to commit interstate transportation of stolen property.
According to the government’s evidence, Lee Khan helped his father launder $401,000 to pay one of their close family members, identified in court documents as “Khan Family Member A.” The primary purpose of the payment was to prevent the family member from disclosing information concerning bribe payments made to Kerry Khan by a former government contractor.
At the time of the money transfers, “Khan Family Member A” was incarcerated at the Alexandria Detention Center in Alexandria, Va., where he was jailed following his conviction of a federal felony drug trafficking crime. The family member wrote a letter to the former government contractor – copying Lee Khan – threatening to go to the authorities unless he received a deposit covering “the entire cost of my house and 4 cars.”
Although Lee Khan did not know the full extent of his father’s illegal conduct, he did know that the source of Kerry Khan’s funds came from unlawful activities. He orchestrated the payments to the relative through multiple accounts in August 2011 in an effort to disguise that he and his father were the source of the funds.
Lee Khan told his father that if “Khan Family Member A” cooperated with law enforcement, even after getting paid, that he would kill him or have him killed.
Lee Khan and his father were among four people arrested on Oct. 4, 2011. He has been in custody ever since. “Khan Family Member A,” meanwhile, never got control of the $401,000, which was seized by law enforcement.
In addition to Lee Khan, those who have been sentenced include:
-Nazim Khan, owner of KC Builders Custom Homes LLC, a company that helped channel money to Kerry Khan in the bribery and kickback scheme. He was sentenced in December 2012 to two years in prison and ordered to pay, along with two other defendants, a total of $611,904 in restitution. He also agreed to an order of forfeiture in the amount of $83,403.
-Harold F. Babb, the former director of contracts at Eyak Technology LLC (EyakTek), an Alaska Native-owned small business. He was sentenced in October 2012 to seven years and three months in prison and ordered to pay $9,405,230 in restitution and to forfeit a money judgment of $689,342.
-Michael A. Alexander, a former program manager with the Army Corps of Engineers. He was sentenced in September 2012 to a six-year prison term and ordered to pay $1.25 million in restitution and a $1.25 million forfeiture money judgment.
-James Edward Miller, the owner of Big Surf Construction Management LLC. He was sentenced in October 2012 to five years and 10 months in prison. Miller also was ordered to pay $9,405,230 in restitution and to forfeit a money judgment of $4,055,063 and specific property, including bank account funds, a property in Virginia Beach, three vehicles, and diamond rings and other jewelry.
-Robert L. McKinney, the president of Alpha Technology Group. He was sentenced in October 2012 to two years and nine months in prison. McKinney also was ordered to forfeit $246,000, representing the illegal proceeds he retained from the crime. In addition, he must pay $984,664 in restitution to the federal government.
-Larry G. Corbett, owner of Core Technology LLC and Enterprise Technical Solutions, Inc. He was sentenced in November 2012 to two years and three months in prison, ordered to perform 500 hours community service, and ordered to forfeit $290,000.
-Theodoros Hallas, the former Executive Vice President of Operations for Nova Datacom, LLC. He was sentenced in November 2012 to one year and three months in prison and ordered to perform 500 hours community service.
Those awaiting sentencing include Kerry Khan; Alex Cho, the former chief technology officer of Nova Datacom, LLC; Nick Park, a former employee of Nova Datacom who later opened his own business, Unisource Enterprise Inc. (UEI), and Oh Sung Kwon, also known as Thomas Kwon, the co-founder and chief executive officer of Avenciatech, Inc.,
In announcing the sentences, U.S. Attorney Machen, Acting Assistant Director in Charge Smith, Acting Special Agent in Charge Olander, Inspector General Gustafson, Special Agent in Charge Craig, and Director Robey thanked those who investigated the case from the FBI’s Washington Field Office; the Office of the Inspector General for the Small Business Administration; the Department of Defense’s Defense Criminal Investigative Service; the Defense Contract Audit Agency; the Washington Field Office of the Internal Revenue Service-Criminal Investigation, and the Army Criminal Investigation Command. They also expressed thanks to the U.S. Marshals Service for its assistance on the forfeiture matter.
They also praised the efforts of those who worked on the case from the U.S. Attorney’s Office, including Assistant U.S. Attorneys Michael K. Atkinson, Bryan Seeley, and James Smith of the Fraud and Public Corruption Section and Assistant U.S. Attorney Anthony Saler of the Asset Forfeiture and Money Laundering Section. Finally, they expressed thanks for assistance provided by former Special Assistant U.S. Attorney Christopher Dana; Forensic Accountant Maria Boodoo; Paralegal Specialists Tasha Harris, Lenisse Edloe, Shanna Hays, Taryn McLaughlin, Christopher Samson, and Nicole Wattelet, and Legal Assistants Krishawn Graham and Jessica McCormick.
13-036USP-Marion Inmate Pleads Guilty to Possessing A Weapon in PrisonRead the Press Release
Lamar Elmer Smith, 32, an inmate at the United States Penitentiary at Marion, Illinois, pled guilty today in in United States District Court in Benton to charges that he possessed a weapon in that prison, announced Stephen R. Wigginton, United States Attorney for the Southern District of Illinois. The indictment, returned by a Federal Grand Jury on November 6th, alleged that the offense occurred on August 16, 2012. The weapon Smith possessed was a 7 inch long piece of sharpened metal, which appeared to be constructed from fence material, and resembled an ice pick.
At the time he possessed the weapon, Smith was serving a 211 month sentence imposed in the Eastern District of Missouri for conspiring to distribute cocaine and possessing a firearm during a drug trafficking crime.
Sentencing was set for May 16, 2013, at 10:30 a.m. at the United States District Courthouse in Benton. At that time, Smith faces up to 5 years’ imprisonment, a $250,000 fine, and 3 years of supervised release to follow his incarceration. Federal law requires that any term of imprisonment for the weapon offense be imposed consecutively to the 211 month sentence he was already serving. Following the hearing, Smith was returned to the custody of the Federal Bureau of Prisons to await sentencing.
The case was investigated by the Federal Bureau of Investigation with the assistance of the Federal Bureau of Prisons.
The case is being prosecuted by Assistant United States Attorney James M. Cutchin.
Two Men Convicted of Orchestrating Tax Fraud Scheme That Illegally Sought Quarter Billion Dollars in Fraudulent Tax RefundsRead the Press Release
SANTA ANA, California – Two Inland Empire men who ran the Fontana-based Old Quest Foundation have been convicted of running a tax fraud scheme that resulted in more than 400 fraudulent federal income tax returns being filed with the IRS that cumulatively sought more than $250 million in fraudulent refunds.
Arturo S. Ruiz, 55, of Moreno Valley, who was the chief executive officer of Old Quest, was found guilty yesterday of one count of conspiracy to defraud the United States and 41 counts of filing false claims against the United States, including four of his own federal tax returns.
Francisco J. Mendoza, 51, of San Bernardino, who was the president of Old Quest, was also found guilty yesterday of one count of conspiracy to defraud the United States and 37 counts of filing false claims against the United States.
The two defendants, both of whom are currently being held without bond, are scheduled to be sentenced by United States District Judge Josephine Staton Tucker on May 10. As a result of this week’s convictions, Ruiz faces a statutory maximum sentence of 215 years in federal prison, and Mendoza faces a statutory maximum sentence of 195 years in federal prison.
The case against Ruiz and Mendoza stems from “Operation Stolen Treasures,” an investigation conducted by Special Agents with IRS Criminal Investigation that led to 55 people being indicted by a federal grand jury in the fall of 2011 (see: http://www.justice.gov/archive/usao/cac/Pressroom/2011/140.html). Ruiz and Mendoza were the lead defendants in a 19-defendant indictment that was at the center of Operation Stolen Treasures.
The evidence presented during a two-week trial showed that Ruiz and Mendoza fraudulently told Old Quest clients they each could receive tax refunds of hundreds of thousands of dollars by accessing “secret government accounts” through a process that included the filing of IRS Forms 1099 OID. During presentations made across the Southland, members of the Old Quest conspiracy promoted the secret account theory and other “tax defier” arguments. In an attempt to give legitimacy to the scheme, Ruiz and Mendoza falsely told clients who attended seminars that Old Quest had employees who were attorneys, accountants, CPAs and former IRS employees. Taxpayers who signed up were required to pay Old Quest fees as high as $10,000, and they were required to promise to “donate” to Old Quest 25 percent of any tax refunds they received.
In exchange for the payments, Old Quest prepared and filed false income tax returns, which routinely sought hundreds of thousands of dollars – and sometimes millions of dollars – in income tax refunds. In some cases, Old Quest filed multiple false tax returns on behalf of clients. During a search warrant executed at Old Quest’s offices, special agents with IRS Criminal Investigation seized several unfiled tax returns, including one signed tax return that falsely reported $10,500,106 in federal income tax had been withheld and fraudulently claimed a $6,868,675 tax refund.
Bank records introduced as evidence showed that Old Quest received approximately $1.9 million from clients who used the fraudulent OID scheme, a figure that includes kickbacks from tax refunds erroneously issued by the IRS. The evidence also showed that while IRS agents were searching Old Quest' s offices, Mendoza emptied more than $250,000 from one of Old Quest’s bank accounts, and that Ruiz hid the funds from authorities by depositing them into another bank account in a different name.
When customers received IRS letters warning that their tax returns were frivolous, Old Quest employees assured customers that the IRS sent letters only to “intimidate” them because the “IRS did not want to pay.” After several refund checks were erroneously issued and the IRS froze the bank accounts of the customers who had received them, Ruiz and Mendoza instructed their employees to open new accounts for customers at different banks in an attempt to avoid further IRS scrutiny. The IRS search of the Old Quest offices and computers in September 2009 revealed numerous emails and printouts of IRS publications warning of the exact same scheme that Ruiz and Mendoza were promoting.
Prior to the tax refund scheme, Ruiz and Mendoza had promoted a “land patent” program to many of the same clients, according to the evidence at trial. Under this program, Ruiz and Mendoza promised to eliminate the clients’ mortgages through an obscure and mysterious process, again in exchange for substantial fees. The land patent program quickly failed, and dozens of clients lost their homes to foreclosure.
In addition to selling the fraudulent schemes to customers across the Southland, Ruiz and Mendoza failed to report to the IRS hundreds of thousands of dollars of their own income, and they filed their own false federal income tax returns that fraudulently sought refunds. The evidence at trial showed that Ruiz bragged about not paying taxes for more than 25 years.
A total of 55 defendants were indicted as part of Operation Stolen Treasures, and with this week’s convictions of Ruiz and Mendoza 19 people now have been convicted.
Release No. 13-017
Two Florida Individuals Indicited for Aggravated Identity Theft in Connection with the Filing of False Tax ReturnsRead the Press Release
Samara Y. Henderson, 25, and Marlow S. Favors, 34, both of Tampa, Florida, were indicted by a federal grand jury in Nashville today in a 9-count indictment charging conspiracy, mail fraud and aggravated identity theft, announced Jerry E. Martin, United States Attorney for the Middle District of Tennessee.
According to the indictment, from approximately March 2011 through January 2012, Henderson and Favors were charged in a conspiracy that devised a scheme to obtain the names and social security numbers of individuals and used the personal identification to file false tax returns in the names of those individuals without their knowledge or permission. The indictment alleges that the tax returns filed in the scheme claimed false and fraudulent refunds which were loaded onto debit cards and mailed to addresses in Tennessee and Florida. Some of the tax returns filed in the scheme listed addresses on Rachel’s Lane in Hermitage, Tennessee, while other tax returns used addresses in Tampa, Florida, or Odessa, Florida, among other places, as the individual’s address.The indictment also alleges that Henderson and Favors then used the debit cards to pay for personal expenses, such as vehicles and accessories, vehicle repairs, plastic surgery procedures, ATM withdrawals and other personal expenditures.
As part of the indictment, the United States Attorney's Office is seeking a monetary judgment against Henderson and Favors of approximately $1 million, which represents the proceeds of the scheme.
If convicted, Favors and Henderson face the following maximum penalties: for conspiracy, five years in prison and a $250,000 fine for each count; mail fraud, 20 years in prison and a $250,000 fine for each count; for aggravated identity theft, two years in prison, in addition to any other terms of imprisonment imposed on the other counts, and a $250,000 fine for each count.
The case was investigated by the Internal Revenue Service - Criminal Investigation. Assistant United States Attorney Kathryn B. Ward is representing the United States.An indictment is merely an accusation and is not evidence of guilt. Defendants are presumed innocent unless and until proven guilty in a court of law.